Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1999 Supreme(Mad) 872

High Court of Judicature at Madras
The Honourable Mr. Justice R. Jayasimha Babu and The Honourable Mr. Justice
A. Subbulakshmy
S. Ganesan
Versus
Assistant Commissioner Excise, Collectorate, Chennai & another
W.A. Nos.888, 872, 875, and etc. of 1998
Decided On : 26-08-1999

Mr. R. Thiagarajan, Senior Counsel in W.A.No. 888. Mr. A.M. Packianathan, in W.P. No.872, Mr. R. Subramanian, in W.P. No.875, Mr. R. Gandhi, Senior Counsel in W.P. No.884 1998, Mr. V. Ayyathurai, in W.P. No.896 of 1998; Mr. D. Veerasekaran, in W.A. No.916 of 1998, Mr. G. Veerapattiran in W.P.No.916 of 1998 and Mr. A. Shanmugavel, in W.P.No.945 of 1998 Advocates for Appellants. Mr. Patti B. Jagannathan, Special Government Pleader for Respondent No.1 and Mrs. Rita Chandrasekaran for M/s. Aiyar & Dolia for W.A. No.888, Mr.N. Krishnamithra, Advocate for Respondent No.1, in W.P. No.872; Mr.C. Ra-jagopalan in W.P. No.875, Mr. E.R.K. Moorthy in W.P.No.884 of 1998, Mr. S.C. Ramalingam in W.P. No.896 of 1998, Mr. R. Subramaniam in W.P. No.899 of 1998 and Mr. K. Doraiswami, Senior Advocate for
W.P. No.916 and 945 of 1998, Advocates for Respondents.

Rule 13(1) of the Tamil Nadu Liquor (Retail Vending) Rules, 1989 is valid and within the powers of the State to make, and the requirement therein that prospective licensees, who are not owners of the building must produce a lease agreement with their landlords is not arbitrary or discriminatory. Statutory tenants are excluded from the scope of Rule 13(1), and the policy decision of the State to exclude statutory tenants from the eligibility for grant of a licence for the retail vend is not arbitrary or mala fide.

Headnote:
TAMIL NADU LIQUOR (RETAIL VENDING) RULES, 1989 - RULE 13(1) - VALIDITY - SCOPE - REQUIREMENT OF LEASE AGREEMENT - INTERPRETATION - STATUTORY TENANTS - EXCLUSION FROM SCOPE OF RULE - POLICY DECISION OF STATE - JUDICIAL REVIEW - FUNDAMENTAL RIGHTS - ARTICLE 14 AND 19 OF THE CONSTITUTION OF INDIA.
Fact of the Case:

The issue in this case was the validity and scope of Rule 13(1) of the Tamil Nadu Liquor (Retail Vending) Rules, 1989 (the Rules), which required the person in whose favor the sale of the privilege of vending Indian made Foreign Liquor in retail is confirmed, to produce a certificate in Form No. III from the Excise Officers, or an officer not below the rank of the Deputy Tahsildar duly authorised by the Collector regarding the suitability and also ownership or lease of the building for not less than a year of the shop from where he intends to sell liquor, and a xerox copy of the document showing that the auction purchaser himself is the owner of the building or a xerox copy of the lease agreement executed with the landlord of the building wherein the proposed shop is to be located.
Finding of the Court:

The Court held that Rule 13(1) of the Rules is valid and that the reference therein to the lease agreement requires a prospective licensee to produce a subsisting lease agreement with the landlord and in the absence of such lease deed, no licence could be granted by the authorities for running a shop for the retail vend of Indian Made Foreign Liquor in such premised. It was also held by the learned single Judge that in cases where the landlord expressly stipulated that the premises is not to be used for trade in liquor, licence under Rule 13(1) of the Rules could not possibly be granted.
Issues: 1. Whether Rule 13(1) of the Tamil Nadu Liquor (Retail Vending) Rules, 1989 is valid and within the powers of the State to make? 2. Whether the requirement in Rule 13(1) that prospective licensees, who are not owners of the building must produce a lease agreement with their landlords is arbitrary or discriminatory? 3. Whether statutory tenants are excluded from the scope of Rule 13(1) and if so, whether such exclusion is valid? 4. Whether the policy decision of the State to exclude statutory tenants from the eligibility for grant of a licence for the retail vend is arbitrary or mala fide?
Ratio Decidendi: 1. The Court held that Rule 13(1) of the Rules is valid and within the powers of the State to make, as it is a reasonable regulation of trade in liquor, a commodity which is recognised as being inherently pernicious, and whose consumption is required to be reduced and not to be increased. 2. The Court held that the requirement in Rule 13(1) that prospective licensees, who are not owners of the building must produce a lease agreement with their landlords is not arbitrary or discriminatory, as it is a uniform policy applied to all intending licensees. 3. The Court held that statutory tenants are excluded from the scope of Rule 13(1), as they do not have a subsisting lease agreement with the landlord and their right to retain possession of the premises is not derived from a lease agreement but is only traceable to the immunity conferred by law against their dispossession except in accordance with the provisions of the Rent Control law. 4. The Court held that the policy decision of the State to exclude statutory tenants from the eligibility for grant of a licence for the retail vend is not arbitrary or mala fide, as the State has ample powers to prescribe the conditions subject to which such privilege is allowed by it to be enjoyed by any citizen.
Final Decision: All the writ appeals were dismissed, but in the circumstances, without costs.

Judgment :

R. Jayasimha Babu, J.

1. In this batch of writ appeals directed against the common order made by the learned single Judge on 7. 1998 in W.P.Nos.5071, 6809,6963,7158,7571,7454,7470,7483,7728,7724,7629,7963,8118,8142, 8235,8236 and 8409 of 1998, the question raised is regarding the validity and scope of Rule 13(1) of the Tamil Nadu Liquor (Retail Vending) Rules, 1989 (hereinafter referred to as the Rules) in so far as that Rule requires the person, in whose favour the sale of the privilege of vending Indian made Foreign Liquor in retail is confirmed, to produce a certificate in Form No. III from the Excise Officers, or an officer not below the rank of the Deputy Tahsildar duly authorised by the Collector regarding the suitability and also ownership or lease of the building for not less than a year of the shop from where he intends to sell liquor, and the further requirement in that Rule that a xerox copy of the document showing that the auction purchaser himself is the owner of the building or a xerox copy of the lease agreement executed with the landlord of the building wherein the proposed shop is to be located be produced.

2. All the appellants herein are tenants who either do not have a subsisting lease agreement in their favour, or whose lease agreement do not permit them to carry on trade in liquor in that premises. The writ petitions from which these writ appeals arise had been filed by a tenant, who, had challenged the validity of this Rule to the extent indicated above) and by certain other tenants, who, though retaining possession of the premises claimed only the status of statutory tenants, and did not have subsisting lease agreements in their favour, as also by also by landlords who were aggrieved by the grant of licence to the persons in occupation of the premises, and whose legal status would only be that of statutory tenants, and not contractual tenants.

.3. The requirement in Rule 13(1) of the Rules that the person in whose favour the sale of the privilege of the retail vend of Indian Made Foreign Liquor is confirmed should either be the owner of the premises or be a lessee thereof who is in a position to produce the lease agreement executed by the landlord for a period of not less than a year, was earlier a part of Rule 7 of the same set of Rules prior to 211. 1990. After that date, what was earlier Rule 7(2)(C) was in effect made a part of Rule 13(1) by amending the same.

.4. Rule 13(1) of the Rules reads as under:

."13(1) within seven days of receipt of the orders of confirmation if the sale of the privilege in Form V, the auction purchaser shall make an application in Form VI to the licensing authority for the grant of the licence together with the application fee specified in sub-rule (3). a certificate in Form III from the Excise Officer or an officer not below the rank of a Deputy Tahsildar duly authorised by the Collector regarding suitability and also ownership or lease of the building for not less than a year of the shop from where he intends to sell liquor, and a xerox copy of the document showing that the auction purchaser himself is the owner of the building or a xerox copy of the lease agreement executed with the landlord of the building wherein the proposed shop is to be located"

5. A learned singles Judge of this Court in W.P.No.11263 of 1991 decided on 18. 1991. interpreted this Rule 13(1) in favour of statutory tenants by holding that the reference to the lease agreement in that Rule would include a statutory tenant as such tenants are protected by the Tamil Nadu Buildings (Lease and Rent Control) Act, and the possession of such statutory tenants must be regarded as lawful possession. A similar view was reiterated by another learned single Judge of this court in W.P.No.10861 of 1993 decided on 16. 1993. Following those decisions. and relying on an opinion which the Government Pleader has furnished to the Commissioner of Prohibition and Excise, the commissioner had issued in

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Judicial Analysis

1999 Supreme(Mad) 872

High Court of Judicature at Madras The Honourable Mr. Justice R. Jayasimha Babu and The Honourable Mr. Justice A. SubbulakshmyS. GanesanVersusAssistant Commissioner Excise, Collectorate, Chennai & anotherW.A. Nos.888, 872, 875, and etc. of 1998 Decided On : 26-08-1999

Judicial Analysis

High Court of Judicature at Madras
The Honourable Mr. Justice R. Jayasimha Babu and The Honourable Mr. Justice
A. Subbulakshmy
S. Ganesan
Versus
Assistant Commissioner Excise, Collectorate, Chennai & another
W.A. Nos.888, 872, 875, and etc. of 1998
Decided On : 26-08-1999