JUDGMENT

SEN, J.— These appeals by special leave directed against a judgment of a Division Bench of the Madras High Court dated July 7, 1983 upholding the judgment and order of a learned single Judge dated June 13, 1983 relate to the grant of a licence for the manufacturing and supplying of bottled arrack to the wholesale and retail licensees for the Chingleput district under Rule 7 of the Tamil Nadu Arrack (Manufacture) Rules, 1981 (Rules for short) framed under the Tamil Nadu Prohibition Act, 1937 (Act for short). These appeals raise separate and distinct questions and must therefore receive separate consideration.

2. Put very shortly, the essential facts are these. On May 28, 1982. one O. H. Kumar carrying on business under the name and style of Messrs Three Star Bottling Company surrendered his licence for the manufacture and supply of bottled arrack for the Chingleput district for the financial year 1982-83. The Commissioner of Prohibition and Excise, Madras called for applications from intending persons for the grant of the licence. In response to the notice issued by the Commissioner under Rule 3 (2) of the Rules, there were two applications filed under Rule 5 in Form 1, namely, by J. Balaji, managing partner of Messrs Majestic Bottling Company on June 9, 1982 and by V. Ramabadran, managing partner of Messrs Chingleput Bottlers on June 14, 1982. The Commissioner issued a questionnaire and directed the Collector, Chingleput to have an inquiry held as regards the suitability of the applicants for the grant of a licence. Pursuant thereto, the Collector had an inquiry held by the Assistant Commissioner (Excise) which lasted for four days i.e. from June 21 to June 24, 1982. After the preliminary inquiry and field inspection made by the Assistant Commissioner (Excise) the Collector forwarded his report dated July 2, 1982 to the Commissioner who fixed July 5, 1982 for oral hearing of the parties.

3. On July 5, 1982, the Commissioner separately heard both J. Balaji and V. Ramabadran. At the hearing, the Commissioner recorded the statements of both J. Balaji and V. Ramabadran in support of their respective claims. On July 31, 1982 the Commissioner passed an order rejecting both the applications. As regards Messrs Majestic Bottling Company, the Commissioner held that their application was in order but that they did not satisfy the requirements of R. 5 (a) and (e) of the Rules. As to their suitability under Rule 5 (a), he found that though the partnership had been formed prior to the date of the application i.e. on June 9, 1982, the firm actually got registered subsequent thereto on June 23, 1982 and therefore there was no valid partnership in existence on June 14. 1982 i.e. on the date of the filing of the application. As regards Rule 5 (e), he held that there was no water facility in the lands owned by the partnership firm.

4. As regards Messrs Chingleput Bottlers, the Commissioner held that the application made by them was not in order because it was not accompanied by a solvency certificate and that there was no potable water available at the proposed site. He further held that there was only one and a half feet water in the well at the site and it was of poor quality. He also came to the conclusion that the application had not been made bona fide on behalf of the partnership firm but as benami for others. The Commissioner accordingly held that Messrs Chingleput Bottlers did not fulfil the requirements of Rule 5 (a), (c) and (e) of the Rules.

5. The finding of the Commissioner that Messrs Chingleput Bottlers were mere benamidars of O. H. Kumar, the previous licensee, was based on the report of the Collector and the other material gathered by him during the course of the inquiry.

6. Both Messrs Majestic Bottling Company and Messrs Chingleput Bottlers filed separate petitions under Art. 226 of the Constitution before the High Court questioning the validity of the order passed by the Commissioner. By his judgment dated June 13, 1983 a