The exercise of discretionary power by a licensing authority must be reasonable and in accordance with the purposes of the relevant legislation. The authority must provide specific reasons and findings of fact to support its decision and must act in a procedurally fair manner.

P. A. CHOUDARY, J.

( 1 ) THE petitioner, under the name and style of M/s. Neelam Wines, desires to run a wine shop from a mulgi bearing Municipal No. 15-7-280 of Begum Bazar, Hyderabad. The proposed wine shop is only a place from where bottled liquor is to be sold. No liquor is to be consumed on the premises of the shop. For that purpose, the petitioner first obtained from the Excise Superintendent, Hyderabad District, an Excise Licence No. 39 dated 12-12-79 after paying a huge licence fee of Rs. 13,500. Next he had also obtained permission from the Municipal Corporation of Hyderabad on 16-11-79 a "no Objection" declaration from the landlady of the premises.

( 2 ) ADDITIONALLY, on 25-1-80 he applied to the City Commissioner of Police, Hyderabad for grant of a licence under the Hyderabad City Police Act. That application was rejected by the City Police Commissioner through his Memo dated 24-7-80. The petitioner now challenges in this writ petition the legality of that refusal order made by the City Police Commissioner. As this Writ Petition is concerned with the validity of that Memo, it is necessary to set out the Memo in its entirety which reads thus:-- "you are hereby informed that your request for grant of police licence to run a retail wine shop at premises No. 15-7-280 Begum Bazar, Hyderabad, is rejected from Jaw and order point of view". (Emphasis supplied ). Two main arguments are advanced in support of this Writ Petition. It is first argued for the petitioner that for running of a wine shop in the City of Hyderabad, there is no legal obligation to obtain any licence under the above Hyderabad City Police Act (hereinafter called "the Police Act" ). It is said that the licence which the petitioner had already obtained from the Excise Superintendent under the Excise Act is enough in law to run a wine shop. Secondly, it is argued by the petitioners that in any case the order of the City Commissioner of Police refusing to grant licence from the view point of "law and Order", without giving any further particulars and justification, is illegal and ultra vires of his powers under the Hyderabad City Police Act.

( 3 ) THE learned Government Pleader, on the other hand, has contended that to run a wine shop in Hyderabad obtaining of a licence from the City Commissioner of Police is a legal requirement under the Hyderabad City Police Act and that that requirement is in addition to the requirement to obtain a licence under the Excise Act. In answer to the petitioners second contention, the learned Government Pleader said that although the order of the Commissioner of Police is laconic still it can be supported and sustained by a reference to the records which show that there is really a law and order problem in the area justifying refusal. PART ONE

( 4 ) THE first question that this Writ Petition raises is whether or not a police licence is required to run a wine shop in Hyderabad. This question is no longer res Integra. It has been the subject-matter of two unreported decisions recently rendered by this Court. In Cri. M. P. No. 872 of 1977 dated 1-8-1977 Sambasiva Rao J. . (as he then was) ruled that when once the Commissioner of Excise grants to a person a licence under the Excise Act to run a wine shop from a particular premises in the City of Hyderabad, law does not require of him to obtain any further licence under the provisions of the Hyderabad City Police Act. According to this ruling of Sambasiva Rao J. , the Excise licence is sufficient to run a wine shop. This judgment of Sambasiva Rao J. , clearly supports the first contention of the writ petitioner and would, if accepted, render consideration of the second question in this case unnecessary. But recently a Division Bench of this Court consisting of Jayachandra Reddy, J. , and P. Rama-chandra Raju J. , in Crl. A. No. 962 of 1979 dated 26-9-1980 took exactly a contrary view to the one taken by Sambasiva Rao, J. The learned Judges construing Section 21 (1) (f) (i) and Sectio

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