The court established that the licensing authority cannot grant licences in excess of the maximum number fixed by the Excise Commissioner with the previous approval of the Government under sub-rule (1) of Rule 12 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968.

( 1 ) THESE two writ appeals are presented by the State of Karnataka, the Excise commissioner and the Deputy Commissioner (Excise), Mandya, against the order of the learned single Judge allowing the writ petitions presented by the respondents holding that sub-rule (3) of rule 12 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 (for short 'the Rules') was mandatory and consequently the licences granted by the third appellant in excess of the ratio prescribed in the said clause was illegal.

( 2 ) THE facts of the case in brief are as follow : By a notification dated 27-9-1983 issued under sub-rule (1) of rule 12 of the Rules by the Excise commissioner, with the previous approval of the State Government, inter-alia. the maximum number of retail licences for liquor shops which could be granted in respect of Mandya Taluk had been fixed at 22. Appellant-3, the Licensing Authority, however, during the last Excise year ending with 30th June, 1986 had granted as many as 26 retail licences in favour of individuals. Questioning the legality of the grant of the licences in excess of the number fixed under Rule 12 (1) of the Rules, the respondents presented the writ petitions. The contention of the respondents in the writ petitions was that the grant of more lieences than the number fixed under rule 12 of the Rules was illegal. The writ petitions were allowed and a writ of mandamus was issued to appellant-3 to strictly conform to the ratio as between rural and urban population and the number of retail licences fixed under rule 12 of the Rules. Aggrieved by the said order, these appeals have been presented.

( 3 ) SRI M. R. Achar, learned Government Advocate appearing for the appellants ; Sri R. N. Narasimha Murthy, learned counsel for persons who have made applications for intervention in the matter and Sri K. R. 0. Karanth, learned counsel for the respondents have addressed arguments in support of their respective cases. Sri P. Viswanatha Shetty and Sri Tipperudrappa, learned counsel appearing for some of the appellants in some of the pending writ appeals in which similar question is involved who intervened with permission have also addressed arguments in support of the submission made by Sri R. N. Narasimha murthy. Rule 12 of the Rules which comes up for interpretation in these appeal reads:"number of licences to be fixed- (1) The maximum number of licences to be granted in an area shall be determined from time to time by the excise Commissioner with the previous approval of the State Government. (2) The number of retailers licences to be granted in a taluk for the year shall be determined with reference to the population of such taluk and the probable demand. (3) In Taluks having an urban population exceeding 10. 000 or a rural population exceeding 20,000 as per the last preceding census, one additional retail licence may be allowed for each 10,000 of the urban population or 20,000 of the rural population. The maximum number of licences determined on the basis of the population of a taluk shall be rounded off to the nearest whole number. (4) The number of wholesale licence shall be so determined that there shall be one wholesale licence for five retail licences. In the event of there being applicants, one wholesale licence shall be granted for each district, even if the number of retail licence in the district is less than five' (Italic words by us)

( 4 ) WITH reference to the interpretation of the above Rule, Sri M. R. Achar, learned Government Advocate, submitted as follows :- Section 15 (2) of the karnateka Excise Act, 1965 (for short 'the Act') confers powers on the Deputy commissioner and the Excise Commissioner to grant licences for the sale of liquor. There was no restriction imposed in the said provision to the effect that the licensing authority was bound by the rules. Therefore, though the Rule is framed in exercise of the powers conferred on the State Government under Section 71 (1) (e) of