Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
SANJAY V. GANGAPURWALA, P.D. AUDIKESAVALU, JJ.
The Managing Director, Tamil Nadu State Marketing Corporation Limited, Egmore, Chennai & Anr. - Appellants
Versus
P. Sangeetharaj & Ors. - Respondents
W.A. Nos. 374, 1493 to 1565, 1568 & 1570 to 1662 of 2023 & C.M.P. Nos. 14415 to 14430, 14432, 14433, 14435, 14436, 14438, 14440, 14442, 14443, 14445 to 14456, 14458 to 14460, 14462 to 14471, 14473 to 14507, 14509 to 14511, 14513, 14514, 14516 to 14531, 14533 to 14545, 14547 to 14552, 14554 to 14570, 14572 to 14575, 14580, 14582, 14599, 14600 & 14616 to 14798 of 2023
Decided On : 05-09-2023
TASMAC - Liquor Vending - 17-C, 17-D, 21, 22-D, 54 of the Tamil Nadu Prohibition Act, 1937 - Rules 3, 4, 9-A, 10, 11 of the Tamil Nadu Liquor Retail Vending (In Shops and Bars) Rules, 2003 - Circular No. A3/19/2014 - Notification Na. Ka. No. A3/1382/2022 - Writ Petitions - Judicial Review - Public Interest - Financial Interests
Fact of the Case:
The case involved intra-Court appeals against the order passed by the Writ Court in a batch of Writ Petitions challenging the tender notification issued by TASMAC for the grant of privilege to run the bar attached to its shops. The Writ Court quashed the tender notification, citing previous court orders and directed TASMAC to issue a new circular in line with those decisions.
Finding of the Court:
The Court found that the Writ Court had exceeded the scope of judicial review in contractual matters pertaining to the State. It held that the Writ Court's decision thwarted TASMAC's commercial wisdom and forced it to restrict competition, thereby defeating public interest. The Court also noted that the Writ Court had failed to consider previous decisions that upheld the validity of the circular issued by TASMAC.
Issues: The main issue was whether the Writ Court's decision to quash the tender notification and direct TASMAC to issue a new circular was justified. The Court also considered the scope of judicial review in contractual matters and the public interest in safeguarding the financial interests of TASMAC.
Ratio Decidendi: The Court held that the Writ Court had exceeded the scope of judicial review and that its decision was not in line with previous decisions that upheld the validity of the circular issued by TASMAC. It emphasized the need to safeguard the financial interests of TASMAC and ensure fair and transparent procedures for the grant of privilege to run bars attached to its shops.
Final Decision: The Court set aside the Writ Court's order and dismissed the Writ Petitions. It allowed TASMAC to issue a fresh tender for future periods following the prescribed procedure in accordance with the law.
JUDGMENT
(Prayer: Appeal under Clause 15 of the Letters Patent, 1865 to set aside the order passed by this Court in W.P. No. 21391 of 2022 etc., batch dated 30.09.2022, thereby allowing the Writ Appeal.)
Common Judgment:
P.D. Audikesavalu, J.
1. These intra-Court appeals invoking Clause 15 of the Letters Patent, 1865, arise out of the common order dated 30.09.2022 in W.P. No. 21391 of 2022 etc., batch passed by the Writ Court.
2. The parties are hereinafter referred as per their description in the said Writ Petitions for the sake of clarity and convenience.
3. In the State of Tamil Nadu, monopoly in retail vending of liquor has been conferred on the Tamil Nadu State Marketing Corporation Limited (hereinafter referred to as 'TASMAC' for short). Rules 3 and 4 of the Tamil Nadu Liquor Retail Vending (In Shops and Bars) Rules, 2003 (hereinafter referred to as 'the Rules' for short) made in exercise of powers conferred under Sections 17-C, 17-D, 21, 22-D and 54 of the Tamil Nadu Prohibition Act, 1937, pertain to the grant of licence for retail vending of liquor in shops and bars for the whole of the State of Tamil Nadu. Rule 2(r) of the Rules defines 'shop' as the building in which the liquor is stocked and sold, and as per Rule 2(d) of the Rules, 'bar' means a place located within the shop or adjoining the shop used for consumption therein of liquor. While Rules 8 and 9 of the Rules pertain to the location of the shop, Rule 9-A inserted by G.O. Ms. No. 20, Home, P & E (VI) Department dated 29.03.2013 issued by the Government of Tamil Nadu, reads as follows:-
“9-A. Grant of privilege to run the bar.- The privilege of running bars may be granted to private parties by tender. The Board of the corporation may decide the upset price and other terms and conditions of tender, from time to time, with the prior approval of the Commissioner of Prohibition and Excise. The Corporation, as agency shall collect the tender amount from the successful tenderers and remit the same to the Government on or before the 25th of the following month and the Corporation may retain 1% of the amount so collected as agency commission.”
The said rule was later re-numbered as Rule 9-B by G.O. Ms. No. 17, Home, P&E (VI) Department dated 13.02.2022 issued by the Government of Tamil Nadu. Rules 10 and 11 of the Rules read as follows:-
“10. Location of Bar.– (1) The bar shall lie within the shop or adjoining the shop.
(2) The bar shall have a minimum plinth area of fifteen square metres. The requirement of plinth area for any bar exceeding fifteen square metres shall be decided by the Collector.
(3) Every bar shall be housed in pucka building and no part of the bar shall be thatched either on the sides or on the roof. The bar room shall be sufficiently screened so that consumption of liquor is not visible from outside and shall also be provided with fans. Sufficient number of tables and chairs for the consumers to conveniently sit and consume liquor shall be provided. Such room shall not be used as a club or recreation room or for any other purpose whatsoever. No gambling or any kind of disorderly conduct in the shop shall be permitted.
(4) Facilities such as drinking water and wash basin within the surroundings of each shop premises shall be provided and the shop, its premises and surroundings shall be always kept clean, hygienic and well lit.
(5) Every shop shall have a signboard in Tamil in front of the shop showing the number of the shop and details regarding authorization issued by the Corporation for the shop, the price of liquor in different sizes of bottles sold in the shop shall also be displayed. There shall also be displayed on the signboard the following slogans in bold letters about the evils of drinking and such other slogans as may be approved by the Commissioner.
“Liquor – ruins country, family and life”
11. Working hours of the shop and bar.– No bus
AI
The main legal point established in the judgment is the limited scope of judicial review in contractual matters pertaining to the State, emphasizing the need to safeguard the financial interests of t....
Judicial review of tender conditions is limited; courts should not interfere unless actions are arbitrary, discriminatory, or mala fide, ensuring public interest is prioritized.
Tender conditions upheld as reasonable for bidder integrity, safety and compliance; judicial review in contracts limited to arbitrariness, mala fides or public interest, with deference to administrat....
The formulation of tender conditions falls within the administrative domain of the authority, and judicial review is limited to preventing arbitrariness or favoritism. The courts cannot interfere wit....
Judicial interference in the matter of tenders and contracts is limited and the court should exercise restraint in interfering with the administrative decision-making process.
Point of law: powers of judicial review are limited and while exercising such power the Court has to see whether the process adopted or decision made by the authority is malafideor is intended to fav....
The court affirmed that stringent eligibility criteria in public tender processes cannot violate statutory relaxations for Start-ups, emphasizing limited grounds for judicial review.
Judicial review in tenders limited to mala fides, arbitrariness, irrationality impacting public interest; courts defer to authority's interpretation of eligibility unless perverse.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
