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2001 Supreme(Mad) 1655

IN THE HIGH COURT OF JUDICATURE AT MADRAS
B.Subhashan Reddy, C.J. and K.P.Sivasubramaniam, J.
R.Selvaraj and others
Versus
Government of Tamil Nadu represented by its Secretary, Prohibition and Excise Department, Fort St.George, Chennai and others
W.A.Nos.2740 to 2743, 2749 to 2760, 2763, 2777 to 2792, 2797, 2803, 2815, 2824, 2825, 2862 and 2874 of 2001 and W.A.M.Ps.
Decided On : 21 December 2001

Advocates:
Arunagirinathan, for M/s.V.Sanjeevi, for Appellants in W.A.Nos.2740 to 2742 of 2001.
R.Gandhi, Senior Counsel, for M/s.R.G.Narendran, for Appellants in W.A.No.2743 of 2001.
R.Gandhi, Senior Counsel, for M/s.M.Bhaskar, for Appellants in W.A.No.2749 of 2001.
D.Selvaraju, for Appellants in W.A.No.2750 of 2001.
R.Krishnamurthi, Senior Counsel, for M/s.V.Ayyadurai, for Appellants in W.A.Nos.2751 and 2752 of 2001.
P.Chandrasekaran, for Appellant in W.A.No.2753 of 2001.
M.Ravindran, for V.Viswanathan, for Appellants in W.A.Nos.2754 of 2001.
AR.L.Sundaresan, for Appellants in W.A.Nos.2755 to 2758 of 2001.
R.Subramanian, for Appellants in W.A.Nos.2759 and 2760 of 2001.
T.V.Krishnamachari, for Appellant in W.A.Nos.2763 of 2001.
K.Ravi Anantha Paddmanabhan, for Appellant in W.A.Nos.2777 of 2001.
M/s.N.Damodaran, for Appellants in W.A.Nos.2778 to 2784 of 2001.
R.G.Narendran, for Appellant in W.A.No.2785 of 2001.
K.V.Sundararajan, for Appellants in W.A.Nos.2786 to 2792 of 2001.
D.Selvaraju, for Appellant in W.A.No.2797 of 2001.
A.Jinasenan, for Appellant in W.A.No.2803 of 2001.
V.Raghavachari, for Appellant in W.A.No.2815 of 2001.
G.K.R.Pandian, for Appellants in W.A.Nos.2824 and 2825 of 2001.
K.Thennan, for Appellant in W.A.No.2862 of 2001.
S.M.Edward Stanley, for M/s.Muthumani Doraisamy, for Appellant in W.A.No.2874 of 2001.
R.Muthukumarasamy, Additional Advocate General, assisted by K.Mahadevan, Special Government Pleader, for Respondents in all the Appeals.

Headnote:Tamil Nadu Liquor (Retail Vending) Rules, 1989-Rule 34-G.O. Ms. No. 238 (Prohibition and Excise) dated 9.11.2001-Selling of unsold shops in notified areas-Licensed and existing vendors cannot object to selling of unsold shops in notified areas on the ground that profit would go down-No guarantee of profit is given by State while auctioning the shops.

       

B.Subhasha Reddy, C.J.: In this batch of cases, the validity of G.O.Ms.No.238, Prohibition and Excise Department, dated 9.11.2001 is questioned. The impugned G.O. has been issued in exercise of the powers conferred under Rule 34 of Tamil Nadu Liquor (Retail Vending) Rules, 1989.

2. The excise year in this State has commenced on 1.8.2001 and expires on 31.7.2002. G.O.Ms.No.115, Prohibition and Excise Department, dated 22.6.2001 was issued on the eve of this excise year. For granting the rights of privilege for retail vending Indian Made Foreign Liquor (IMFL), applications were invited. Privilege is granted in lieu of the amount paid, which is called ‘privilege amount’, which means the amount determined by the Commissioner for a shop for the grant of privilege based on the guidelines issued by the Government. The privilege amount is fixed on the basis of the local authority like village panchayat, Panchayat Union, Municipalities and Municipal Corporations. In 30 districts of Tamil Nadu, a specified number of shops i.e., 6000 were indicated and by adopting the drawal method, the privilege rights were given. But all of such shops were not sold out. Out of 6000 shops notified, 5377 shops were sold out leaving a balance of 353 shops. To make up the deficiency, the impugned G.O. has been issued. The question which is raised is whether the number of shops can be increased after grant of privilege rights to the appellants and the like.

3. The writ petitions have been filed questioning the action of the respondents in notifying some shops which were not ear-marked earlier. Even, out of the shops which have been ear-marked and notified earlier and have not been sold out, some of them have been notified for granting privilege to vend liquor in retail. The contention raised by the writ petitioners was that once the shops have been earmarked they cannot be altered later on, and that the shops having been sold out and the licences having been issued consequent there to, the power to either sell out the unsold shops or to notify the new shops has been exhausted. The respondents converted the said contention on the ground that trade in liquor cannot be construed as a fundamental right and the State in its economic policy and to improve on finances, can always make new strategies, and that the power which is vested in the rules has been properly exercised. The appellants who were the writ petitioners have also raised further contention that even if there was a power to notify and grant privilege after the first notification, the same has not been exercised by the District Collectors independently and the Government was not entitled to impose on the District Collectors, that by amendment in G.O.Ms.No.119, the proviso to Sub Rule (3) of Rule 4 extinguished and that in any event the doctrine of legitimate expectation or the doctrine of promissory estoppel would come in aid of them. The respondents have also countered the said contention. The learned single Judge after hearing all the parties and even while holding that the impugned notification cannot be traced to the power conferred on the Government under Rule 34 of the Rules mentioned above, held that Government is entitled to frame its economic policy and the same cannot be interfered with by Courts, that the issuance of G.O.Ms.No.119, dated 30.6.2001 does not have the effect of extinction of the proviso which was added by G.O.Ms.No.115, dated 22.6.2001, and what has been substituted is only the main part of Sub-Rule (3), and that with the substitution of the same, the proviso would be operative. The learned single Judge has also repelled the contentions based on the doctrines of either legitimate expectation or promissory estoppel. The learned single Judge has also held that the Government having issued the G.O. has always got power to amend the same in view of the provision contained in the General Clauses Act. Hence, these writ appeals.

4. The learned counsel for the appellants reiterated the






































































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