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Supreme Court Of India
J. KRISHAN KUMAR NARULA
Versus
State of JAMMU AND KASHMIR
Decided On : March 1, 1967
EXCISE - Renewal of liquor license - Discretion of Excise Commissioner - Fundamental right to do business - Reasonable restrictions - Arbitrary exercise of power - Principles of natural justice.
Fact of the Case:
The appellants, who held liquor licenses, were denied renewal of their licenses by the Excise Commissioner on the ground that the localities where they were carrying on business were congested and there were complaints from the inhabitants. The appellants challenged the Commissioner's order, contending that it was arbitrary, unreasonable, and violated their fundamental right to do business.
Finding of the Court:
The Court held that dealing in liquor is business and a citizen has a right to do business in that commodity, but the State can make a law imposing reasonable restrictions on the said right, in public interests. The Court further held that the Commissioner's order was not arbitrary or unreasonable, as he had made a bona fide inquiry and found that the localities were not suitable for carrying on business in liquor.
Issues: 1. Whether the Excise Commissioner's order was arbitrary, unreasonable, and violated the appellants' fundamental right to do business. 2. Whether the Commissioner's discretion under S. 20 of the Act was controlled by S. 22 of the Act.
Ratio Decidendi: 1. The Court held that the Commissioner's order was not arbitrary or unreasonable, as he had made a bona fide inquiry and found that the localities were not suitable for carrying on business in liquor. The Court also held that the Commissioner's discretion under S. 20 of the Act was not controlled by S. 22 of the Act, as the former deals with the issuance of a fresh license and the latter deals with the cancellation of a license. 2. The Court further held that the appellants' fundamental right to do business was not violated, as the State had the power to impose reasonable restrictions on the said right in public interests.
Final Decision: The appeals were dismissed with costs.
Judgment
SUBBA RAO, J.
( 1 ) THESE two appeals arise out of a common judgment of a Division Bench of the High Court of Jammu and Kashmir dismissing the two petitions filed by the appellants for the issuance of a writ quashing the order passed by the Taxing and Excise Officer, Jammu, refusing to renew their licences for the year 1966-67 in respect of their liquor shop.
( 2 ) THE facts giving rise to these two appeals may be briefly and separately stated.
( 3 ) CIVIL Appeal No. 65 of 1967 relates to Glory Restaurant situated in Moti Bazar, Jammu. The appellant in the said appeal, who is the proprietor of the said restaurant, after taking the requisite licence from the Government, had been carrying on for the last 7 years the business of retail sale of country and foreign liquor in the said restaurant. The licence was an annual licence and it was being renewed from year to year. On 11/12/1965, the Deputy Excise and Taxation Commissioner, Jammu, issued a notice to the appellant ordering the shifting of the premises of the said restaurant to some other locality on the ground that the inhabitants of the locality had complained against the location of the appellants bar and restaurant there. As the licence for 1965-66 would expire on 31/03/1966, the appellant applied for a fresh licence for 1966-67 and deposited the prescribed licence fee in the Government treasury.
( 4 ) THE appellant in Civil Appeal No. 66 of 1967 was carrying on business in liquor in his hotel, named Bliss Hotel and Bar, situated in Parade Ground, Jammu, under a licence issued by the Government of the said State. He obtained a licence for the first time in 1964. After obtaining the licence, it is alleged, he had spent about Rs. 70,000 in furnishing the Hotel and Bar but for unavoidable reasons he could not do business during the financial year 1964-65. For the year 1965-66 he made an application for the renewal of the licence and on 11/12/1965, he received a letter from the Deputy Excise and Taxation Commissioner, Jammu desiring the appellant to shift the premises of his Hotel and Bar to some other suitable place after getting it approved by the Department on the ground that he had received complaints from the inhabitants of the locality against the location of the bar there. At the instance of the 2nd respondent, the Excise and Taxation Commissioner, Jammu, his licence, along with those of other licensees was collected by the 3rd respondent. As he was not given a licence to do business in liquor in the same locality, this appellant also filed a writ petition in the High Court for a relief similar to that claimed by the appellant in Civil Appeal No. 65 of 1967.
( 5 ) TO both the petitions, the State of Jammu and Kashmir, through its Chief Secretary, the Excise and Taxation Commissioner. Jammu and Kashmir, and the Deputy Excise and Taxation Commissioner. Jammu, were made respondents 1, 2 and 3 respectively
( 6 ) THE respondents opposed the petitions and pleaded, inter alia, that the localities wherein the petitioners were carrying on the business were most congested and frequented part of the city and that, as complaints were made against their carrying on the business in the said localities, the respondents refused to renew their licences to carry on the said business in the said localities. They also pleaded that under the Excise Act. 1958, hereinafter called the Act, the issuing of licence was at the discretion of the Excise Commissioner and he had, having regard to the complaints received, bona fide, in exercise of his discretion, refused to give licence to the appellants to carry on business in the said localities.
( 7 ) IN the High Court the Writ petitions, along with others, were decided by a Division Bench consisting of Chief Justice and Justice Syed Murtaza Fazl Ali. They gave concurrent but separate judgments. Both the Judges agreed on merits in dismissing the petitions, but expressed different views on the questions whether the petitioners had fundamental r
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