1. These set of Writ Petitions are filed seeking to strike down Rule 3(11) (c) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as amended by Notification dated 30.06.2003 and also to quash the notification issued on 3.7.2009 by the 1st respondent and also quash the license in Form No.CL-II (c) dated 25.03.2010 issued by the Deputy Commissioner in favour of Mysore Sales International Limited., and for such other orders.

2. Petitioners are said to be CL-2 and CL-9 license holders respectively granted under the provisions of Karnataka Excise (Sale of Indian and Foreign Liquors) Rules 1968 (hereinafter referred to as ‘rules’ for short) and the same was renewed from time to time. According to the petitioners, Rule 3 (11) (c) of the said Rules makes provision for grant of retail license notwithstanding anything contained in Rule 12 of the said Rules in favour of State owned companies, which was published in the Karnataka Gazette (extraordinary) dated 30.06.2003 and the said Notification amends Rule 8 of the Rules making provision for retail shop license to Government companies charging only Rs. 1,00,000/- Subsequently, by order dated 3.9.2003 , the Government has taken a decision in the meeting of Council of Ministers to stop entertaining any application for grant of fresh license and by inserting Rule 5(A) to the Rules with effect from 24.6.2000, a provision was made to renew the licenses issued earlier thereby, only the existing licenses were continued by renewing. Thereafter, the Government by exercising its discretion under Section 71 of the Karnataka Excise Act, amended the Rules by inserting sub-rule 11 (c) to Rule 3 of the Rules which provides for granting retail license to Government companies and also amended Rule 8 of the Rules by fixing the license fee at Rs.1,00,000/- per year for retail shop license issued to the Government Companies. Though it was brought into force with effect from 1.7.2003, it was not enforced due to policy decision of the Government dated 3.9.2003 banning issue of fresh licenses. Thereafter, based on the census report and also due to the need for more licenses, the Chief Controlling Authority requested the State Government to relax the restriction and to provide more licenses and accordingly, the Government has taken a decision to grant 463 licenses in favour of Mysore Sales International Limited and accordingly, on the applications filed by the MSIL, although objections were filed and the consent of Grama Panchayath was not obtained, the Deputy Commissioner has favoured MSIL with licenses by charging only Rs.1,00,000/- for each shop as against the individual licensees who are charged between Rs.6,00,000/- to Rs.3,20,000/- for CL-9 license and Rs.4,46,000 to Rs.3,00,000/- for CL-2 licensees. Hence, these writ petitions seeking to strike down Rule 3(11) (C) of the Rules and also the communication issued by the Government of the Excise Commissioner to issue licenses in favour of MSIL.

3. Heard.

4. According to the learned Counsel for the petitioners, Rules 8 of the Rules provides for charging only minimum license fee to the Government owned retail shops as against individual licensees who are charged exorbitantly, which is arbitrary and further according to him, by sub-rule 11 (c) of Rule 3 of the Rules, a provision is made to grant retail license in favour of State owned companies notwithstanding anything contained in Rule 12, whereas the same is prohibited in respect of CL-2 and CL-9 license holders.

5. The learned Counsel appearing for M/s. Mysore Sales International Limited has relied upon the decision of the Apex Court reported in AIR 1996 SC 911 in the case of M/s. Khoday Distilleries Ltd., etc., Vs. State of Karnataka and others to contend that, the validity of Rule 3 (11) (c) has already been upheld by the Apex Court wherein referring to Section 71 of the Karnataka Excise Act r/w Rule 3(11) of the Karnataka Excise (Sales of Indian and Foreign Liquors) Rul