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1994 Supreme(SC) 1034

SUPREME COURT OF INDIA
KHODAY DISTILLERIES Limited
VERSUS
STATE OF KARNATAKA
DECIDED ON: October 19, 1994

Headnote:

Constitutional validity of the (0 Kamataka Excise (Distillery and Warehouse) (Amendment) Rules, 1989, (ii) Kamataka Excise (Manufacture of Wine from Grapes) (Amendment) Rules, 1989, (iii) Karnataka Excise (Brewery) (Amendment) Rules, 1989, (iv) Kamataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989 and (v) Kamataka Excise (Bottling of Liquor) (Amendment) Rules, 1989 was unsuccessfully challenged by various parties before the Kamataka 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 (1 (g), 47, 300-A, 301, and 304 of the Constitution of India – Challenged – Held, WHILE interpreting the provisions of the Industrial courts Act, 1919 Lord Wright in National Assn. of Local government Officers v. Bolton Corpn. has observed thus:"section II of the Act of 1919 shows that trade is used as including industry because it refers to a trade dispute in the industry of agriculture. . . . Trade and industry are thus treated as interchangeable terms. Indeed, trade is not only in the etymological or dictionary sense, but in legal usage, a term of the widest scope. It is connected originally with the word tread and indicates a way of life or an occupation. In ordinary usage it may mean the occupation of a small shopkeeper equally with that of a commercial magnate; it may also mean a skilled craft - word trade may include all the connotations of the word business. As held in K. K. Narula case , in Article 19 (1) (g) of our Constitution, the words trade and business are used synonymously. Hence, we reject the contention and hold that after the taking-over of the trade, viz. , the activity of buying and selling liquor, no activity was left with the petitioners to carry on under the licence held by them.

JUDGMENT

P. B. SAWANT, J.

( 1 ) 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 (0 Kamataka Excise (Distillery and Warehouse) (Amendment) Rules, 1989, (ii) Kamataka Excise (Manufacture of Wine from Grapes) (Amendment) Rules, 1989, (iii) Karnataka Excise (Brewery) (Amendment) Rules, 1989, (iv) Kamataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989 and (v) Kamataka Excise (Bottling of Liquor) (Amendment) Rules, 1989 was unsuccessfully challenged by various parties before the Kamataka 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 (1 (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 A. P. High court upholding the validity of the amendments to the A. P. 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 A. P. 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. Special Leave Petition (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



































































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