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1978 Supreme(Del) 210

High Court Of Delhi
GIDNEY CLUB,NEW DELHI - Appellant
Versus
UNION OF INDIA - Respondent
Civil 403 of 1978
Decided On : 12/13/1978

Advocates Appeared:
E.X.JOSEPH, K.N.Kataria, M.K.SAXENA, S.PAPPU, V.S.RAJAVAT

Directive Principles of State Policy embodied in Part IV of the Constitution can be enforced by administrative action by the state, so long as it does not contravene any law or rule.

Headnote:

DIRECTIVE PRINCIPLES - ENFORCEABILITY - PROHIBITION POLICY - RENEWAL OF LIQUOR LICENCE - RELEVANCE OF PROHIBITION POLICY - NATURAL JUSTICE - RULE 13 OF DELHI LIQUOR LICENCE RULES, 1976 - INTERPRETATION - QUASI-JUDICIAL FUNCTION OF LICENSING AUTHORITY - GOVERNMENT POLICY AS RELEVANT CONSIDERATION.

Fact of the Case:

Petitioner Club, a bona fide club, held a licence for the retail vend of foreign liquor under Rule 1 of the Delhi Liquor Licence Rules, 1976, made under the Punjab Excise Act, 1914. On 15-3-1978, the Delhi Administration issued a letter to various clubs, including the petitioner Club, stating that in accordance with the prohibition policy, all L-19 licences for retail vend of foreign liquor at clubs would be discontinued from 1-4-1978. The petitioner Club challenged the validity of this letter on the grounds that (1) a mere administrative policy could not deprive them of their right to renewal of the licence, (2) the procedure prescribed in Rule 13 of the Delhi Liquor Licence Rules, 1976, for non-renewal of licences was not followed, and (3) the prohibition policy was not a relevant consideration for the decision not to renew the licence.

Finding of the Court:

The court held that (1) Directive Principles of State Policy embodied in Part IV of the Constitution could be enforced by administrative action by the state, so long as it did not contravene any law or rule; (2) the prohibition policy was a relevant consideration for the decision not to renew the licence, as the Punjab Excise Act and the Rules thereunder authorized the framing of rules to bring about partial or total prohibition; (3) Rule 13 of the Delhi Liquor Licence Rules, 1976, did not apply when non-renewal was based on the policy of prohibition, and even if it did, the requirements of natural justice had been satisfied in spirit and substance; and (4) the licensing authority was bound to take into consideration the administrative declaration of the prohibition policy and give effect to it in the performance of its function.

Issues: 1. Whether Directive Principles of State Policy can be enforced by administrative action by the state? 2. Whether the prohibition policy was a relevant consideration for the decision not to renew the licence? 3. Whether Rule 13 of the Delhi Liquor Licence Rules, 1976, applied when non-renewal was based on the policy of prohibition? 4. Whether the requirements of natural justice had been satisfied in spirit and substance? 5. Whether the licensing authority was bound to take into consideration the administrative declaration of the prohibition policy and give effect to it in the performance of its function?

Ratio Decidendi: 1. Directive Principles of State Policy embodied in Part IV of the Constitution can be enforced by administrative action by the state, so long as it does not contravene any law or rule. 2. The prohibition policy was a relevant consideration for the decision not to renew the licence, as the Punjab Excise Act and the Rules thereunder authorized the framing of rules to bring about partial or total prohibition. 3. Rule 13 of the Delhi Liquor Licence Rules, 1976, did not apply when non-renewal was based on the policy of prohibition, and even if it did, the requirements of natural justice had been satisfied in spirit and substance. 4. The licensing authority was bound to take into consideration the administrative declaration of the prohibition policy and give effect to it in the performance of its function.

Final Decision: The writ petition was dismissed without order as to costs.

V. S. DESHPANDE, C. J.

( 1 ) CAN Directive Principles of State Policy embodied in Part IV of the Constitution (Article 47 in this case) be enforced by administrative action by the state ? This important question along with others is raised by this writ petition on the following facts:

( 2 ) PETITIONER No. 1 is a Club, which is the property of and an activity of the Delhi Branch of the All India Anglo-indian Association, New Delhi. Petitioner No. 2 is a member of the Club. A licence for the retain vend of foreign liquor at a club (bona fide or proprietory) in form L-19 was granted to the Club under Rule I of the Delhi Liquor Licence Rules, 1976 made under section 58 of the Punjab Excise Act, 1914, as applied to Delhi. The licence was for one year from 1-4-1977 to 31-3-1978. The relevant parts of section 58 authorising the framing of Rules regulating the sale of liquor are as follows:

"58. (1) The Lieutenant Governor of Delhi may, by notification, make rules for the purpose of carrying out the provisions of this Act or any other law for the time being in force relating to excise revenue.

(2) In particular, and without prejudice to the generality of the foregoing provision, the Lieutenant Governor of Delhi may make rules

(E) regulating the periods and localities for which, and the persons, or classes of persons to whom licences, permits and passes for the vend by wholesale or by retail of any intoxicant may be granted and regulating the number of such licences which may be granted in any local area;

(F) prescribing the procedure to befollowed and the matters to be ascertained before any licence is granted for the retail vend of liquor for consumption on the premises;

(O) implementing generally the policy of prohibition.

( 3 ) ON 15-3-1978 the following letter was addressed to the various clubs including the Gidney Club, petitioner No. 1.

"subject : Renewal of the Licence in form L-19.

( 4 ) THE validity of this letter is challenged in the writ petition on the following grounds:

(1) Under the Punjab Excise Act and the Rules framed thereunder the regulation of sale of liquor including the grant and renewal of licences is to be done according to law. The excise policy for the year 1978-79 given as the reason for the decision not to renew the L-19 licences held by the Clubs is not law. The impugned letter is, therefore, liable to be quashed.

(2) The renewal of licences is governed by Rule 13 which is as follows:

"whenever it is proposed not to renew a licence which is renewable and granted on a fixed fee, the authority competent to renew it shall give notice to the holder of such licence, record objections, if any, put forward. by the licensee, and pass a definite order in writing. The licensee may be given, on an application, an authenticated copy of such order.

NOTE : The Excise Inspector is responsible for laying before the Collector by the 7th January, a list of all licences requiring renewal, in order that the Collector may decide whether to consider the question of non-renewal of any licence. This list should be accompanied

(A) in the case of licences on assessed fee, by the certificate of sales required by rule 28, and (b) in the case of bottling licences, by a similar certificate showing the gallons, London Proof, bottled upto 31st December. "

APPLICATION for renewal was made by the petitioner-Club on 22-1-1978 as per annexure A-l. The procedure prescribed in Rule 13 was not followed before the renewal of the licence was refused to the petitioner-Club.

(3) In so far as the policy of the Government enforcing prohibition or partial prohibition in Delhi has led to the issue of the impugned letter, it was not a relevant consideration to be taken into account by the Collector of Excise who was empowered to renew the petitioners L-19 licence. The function of renewing the licence is quasi-judicial under Rule 13. The quasi-judicial authority was not entitled to take into consideration such an irrelevant consideration. Hence the decision of n



























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