A tenant's claim for a liquor license is unsustainable when their possession becomes litigious due to ongoing eviction proceedings, distinguishing between juridical and lawful possession.

ORDER :

(N. ANAND VENKATESH, J.)

This writ petition has been filed challenging the impugned proceedings of the second respondent dated 24.03.2025.

2. Heard the learned counsels appearing for the parties.

3. The case of the petitioner is that they entered into a lease agreement with the third respondent on 24.04.2021 and the lease was granted for a period of seven years. Thus, according to the petitioner, the lease period will come to an end only in the year 2028. The petitioner is running the recreation club and wanted to start a FL-2 bar. An application was submitted before the second respondent and the second respondent, through the impugned proceedings dated 24.03.2025, rejected the application on the ground that the petitioner has to submit the renewal copy of the rental agreement from his land owner or in the alternative, to find out another place to run the bar.

4. The case of the third respondent is that the lease agreement is subject to renewal once in every eleven months and hence, at the end of eleven months, the lease expires and it continues only if the third respondent renews the lease. The learned counsel further submitted that the very object for which the petitioner society was constituted is not to run a bar and that according to the third respondent, running a bar in the subject property will result in an illegal activity. It was further brought to the notice of this Court that already a suit has been filed by the third respondent in O.S.No.34 of 2024 before the Sub Court, Alandur seeking for the relief of delivery of possession and for damages.

5. Apart from that, another suit has been filed in O.S.No.348 of 2023 against the third respondent seeking for the relief of permanent injunction not to interfere with the business run by the society. Thus, it is clear that the possession of the petitioner is now a litigious possession. In view of the above, it has to be seen whether the petitioner will be entitled for a FL-2 license.

6. This issue is no longer res integra and it was considered by this Court in W.P.No.11330 of 2025 and while disposing of the writ petition by order dated 17.06.2025, this Court held as follows:-

“9. It is not in dispute that the petitioner was a tenant under the 2nd respondent and based on the earlier agreement, the petitioner was utilising the property for running a Bar and an FL-2 license was issued, enabling the petitioner to serve liquor supplied by the TASMAC in the Bar. The 2nd respondent has terminated the tenancy and initiated proceedings before the Small Causes Court, which is pending in RLTOP No.46 of 2025 and has sought for the eviction of the petitioner.

10. Under such circumstances, the earlier No Objection Certificate (NOC) granted in favour of the petitioner for the FL-2 license, becomes questionable.

11. The issue in hand is no longer res integra and is covered by an earlier judgment of this Court. The first judgment that can be relied upon is in the case of S.Mohan Sambasivam vs. The Commissioner of Prohibition and Excise , Chepauk, Chennai reported in (1998) 1 CTC 573 . The second judgment is that of the Hon-ble Division Bench of this Court in S.Ganesan vs. Assistant Commissioner Excise, Collectorate, Chennai and Another reported in (2000) 1 CTC 193.

12. The Hon-ble Division Bench after considering the entire law and issue, has held that in the absence of the continuation of the lease agreement and where the possession of the tenant has become litigious possession, the insistence for issuance of the license is unsustainable.

13. It was clarified that a tenant holding over or in juridical possession cannot be equate