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1994 Supreme(SC) 1041

SUPREME COURT OF INDIA
M.N.VENKATACHALIAH, C.J.I., AND J.S. VERMA, P.B. SAWANT, K. RAMASWAMY AND B.P. JEEVAN REDDY, JJ.
KHODAY DISTILLERIES LTD. AND OTHERS
Versus
STATE OF KARNATAKAAND OTHERS.
Civil Appeals Nos. 4708-12 of 1989{From the Judgment and Order dated 13-11-1989 of the Karnataka High Court in W.P. Nos. 16878-82 of 1989} with Nos. 4718-27 of 1989, 6043-52 of 1993, SLP(C)Nos. 13817-28, 16208, 16601-02, 17935, 17953 of 1993, 185, 2479, 2962-63 and 5898 of 1994, W.P. (C) Nos. 666-67, 693-94, 774, 910 of 1990, 587, 591-92, 608, 612, 625 of 1993, SLP(C) Nos. 11380 and 9422-24 of 1994,
Decided on 19-1001994
Advocates appeared:
V.R. Reddy, Additional Solicitor General, K. Madhava Reddy, Shanti Bhushan, R.E Nariman and A.K. Ganguli, Senior Advocates (T.V.S.N. Chari, Nikhil Nayyar, B.V. Acharya, M. Veerappa, K.H. Nobin Singh, D. Prakash Reddy, Ms D. Bharathi Reddy, R.N. Naidu, N. Reddy, S. Sukumaran, C.N. Sreekumar, P. Mahale, P.N. Ramalingam, E.M.S. Anam, P.K. Pillai, M.A. Firoz, A.T.M. Sampath, E.G. Agarwala, P.P. Tripathi and B. Kanta Rao, Advocates, with them) for the appearing parties.

Advocates:
A.K.GANGULY, A.T.M.SAMPATH, B.Kanta Rao, B.V.ACHARYA, C.N.SRI KUMAR, D.BHARATHI REDDY, D.PRAKASH REDDY, E.C.AGARWAL, E.M.S.ANAM, K.Madhava Reddy, M.A.Firoz, M.VIRAPPA, N.REDDY, NIKHIL NAYAR, NOBIN SINGH, P.K.PALLI, P.Mahale, P.N.Ramalingam, P.P.TRIPATHI, R.F.NARIMAN, R.N.NAIDU, S.SUKUMARAN, SHANTI BHUSHAN, T.V.S.N.Chari, V.R.REDDY

Headnote:

Karnataka Excise (Distillery and Warehouse) (Amendment) Rules, 1989 - Constitution of India, 1950 - Articles 14, 19(l)(g), 47, 300-A, 301, and 304 - Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 - Validity of Government Order - Cancel all Foreign liquor Licenses - Appellants have fundamental right to carry on trade in liquor.3 - These matters arise out of various decisions of the Andhra Pradesh High Court upholding validity of amendments to Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 from time to time and A.P. High Court has held that the Rules and amendments thereto as well as the Act are not invalid on the ground that they violate the right to carry on trade in liquor which is not fundamental - Appeals, special leave petitions and writ petitions, first group was unsuccessfully challenged by various parties before Karnataka High Court, inter alia on ground that Rules in question affected adversely fundamental right of the parties to carry on trade or business in liquor – Held, Trade in its primary meaning is the exchange of goods for goods for goods for money and in a secondary meaning it is any business carried on with a view to profit, whether manual or mercantile, as distinguished from the liberal arts, or learned professions and from agriculture. However, the word- is of very general application, and must always be considered in the context in which it is used. As used in various revenue Acts, trade is not limited to buying and selling, but may include manufacture. In the expression restraint of trade the word is used in its loosest sense to cover every kind of trade, business, profession or occupation is apparent that the word trade may include all the connotations of the word business - As held in K.K. words trade and business are used synonymously - We reject the contention and hold that after taking-over of trade, viz., activity of buying and selling liquor, no activity was left with the petitioners to carry on under the licence held by them - Petitions dismissed

JUDGMENT

P.B. SAWANT, J.- This is a bunch of appeals, special leave petitions and writ petitions. The first group consists of CA Nos. 4708-12 of 1989, 4718-27 of 1989, WP (C) Nos. 666, 667, 693, 694, 774, and 910 of 1990 wherein constitutional validity of the (i) Karnataka Excise (Distillery and Warehouse) (Amendment) Rules, 1989, (ii) Karnataka Excise (Manufacture of Wine from Grapes) (Amendment) Rules, 1989, (iii) Karnataka Excise (Brewery) (Amendment) Rules, 1989, (iv) Karnataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989 and (v) Karnataka Excise (Bottling of Liquor) (Amendment) Rules, 1989 was unsuccessfully challenged by various parties before the Karnataka High Court, inter alia on the ground that the Rules in question affected adversely the fundamental right of the parties to carry on trade or business in liquor and that the said Rules were violative of Articles 14, 19(l)(g), 47, 300-A, 301, and 304 of the Constitution of India. A Bench of three learned Judges of this Court which heard this group of matters has referred them to the Constitution Bench.

2. The second group consists of CA Nos. 6043-50, 6051 and 6052 of 1993. These appeals arise out of the decision of the Kerala High Court upholding the validity of the government order dated 9-12-1992 passed by the Government of Kerala deciding to cancel all foreign liquor licences issued under Rule 13(3) of the Kerala Foreign Liquor Rules, 1974 to Hotels, Restaurants and Tourist Homes. A Bench of two learned Judges has referred the said matters also to the Constitution Bench for decision on the question whether appellants have a fundamental right to carry on trade in liquor.3. The third group consists of SLP (C) Nos. 13817-28, 16208, 16601-02, 17935, 17953 of 1993? 185, 2479, 2962-63, 5898 of 1994 and WP (C) Nos. 587, 591, 592, 608, 612 and 625 of 1993. These matters arise out of various decisions of the Andhra Pradesh High Court upholding the validity of the amendments to the Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 from time to time and A.P. (Regulation of Wholesale Trade, Distribution and Retail Trade in Indian Liquor and Foreign Liquor, Wine and Beer) Act, 1993 (hereinafter referred to as the "A.P. 1993 Act"). The High Court has held that the Rules and the amendments thereto as well as the Act are not invalid on the ground that they violate the right to carry on trade in liquor which is not fundamental.

4. It appears that some of the parties affected by the decision of the Andhra Pradesh High Court upholding the validity of the enactments and rejecting the argument that the petitioners have a fundamental right to carry on trade in liquor, filed writ petitions in the High Court for a declaration that though the validity of the enactments had been upheld by the High Court the A.P. 1993 Act deals only with the taking over of trade but not business in liquor and, therefore, the State had no right to prevent the writ petitioners from carrying on with the business of liquor during the validity of their licences. The argument was that trade is different from business. The High Court dismissed the petitions. SLP (C) Nos. 9422-24 of 1994 filed against the said decision, forming the fourth group, has also been referred to the Constitution Bench to be decided along with the matters in the above three groups.

5. Thus in matters in the first three groups, this Bench has to answer one question, viz., whether the appellants/petitioners have a fundamental right to carry on trade in liquor. The question involved in matters in the fourth group is different, viz., since the A.P. 1993 Act referred to above, deals only with the taking over of trade in liquor but not business, whether the State can prevent the petitioners from carrying on with the business of liquor as apart from trade, during the unexpired period of the licences.

6. We will first deal with the matters in groups 1, 2 and 3 and, therefore, with the question whether the appellants/petiti


































































































































































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