State authorities must enforce regulations to prevent unauthorized liquor sales in Recreation Clubs and ensure compliance with relevant statutes to protect public health.

Headnote:(A) Tamil Nadu Prohibition Act, 1937; Tamil Nadu Societies Registration Act, 1975; Tamil Nadu Liquor (Licence and Permit) Rules, 1981 - Writ petitions seeking to close Recreation Clubs operating as liquor shops - Complaints reveal violation of regulation by private individuals using Recreation Clubs to circumvent state laws - Court directed authorities to verify licenses, monitor club activities for compliance with laws, and ensure public health protection - Specific clauses in club by-laws regarding liquor sales required for legitimacy. (Paras 2-20)

(B) Principle of public health - State must regulate activities impacting public health, including unauthorized liquor sales in clubs. (Paras 7, 17)

(C) Duties of authorities - Competent authorities are bound to conduct inspections and take actions against violations of the Tamil Nadu Societies Registration Act, 1975. (Paras 12, 19).

Facts of the case:
A batch of writ petitions filed against Recreation Clubs operating liquor businesses under the guise of clubs, leading to public nuisance and health concerns. The court highlighted unchecked operations and called for regulatory measures to ensure compliance.

Findings of Court:
The court found that many Recreation Clubs were circumventing laws and demanded that clubs incorporate specific operational clauses and undergo regular checks.

Issues: The key issues pertained to the legality of operating liquor sales in clubs registered under the Societies Act and the requisite of incorporating specific clauses in by-laws related to liquor sales.

Ratio Decidendi: The Court ruled that without proper by-law clauses for liquor sales, such operations are unauthorized, warranting regulatory scrutiny and potential closure of non-compliant clubs.

Result: Writ petitions disposed of with directions to effectively monitor and regulate Recreation Clubs selling liquor.

COMMON ORDER

[Order of the Court was made by S.M.SUBRAMANIAM, J.]

The present batch of writ petitions have been instituted seeking either to close down the Recreation Clubs, which are recently mushrooming in the urban and rural areas or not to grant FL-2 licence to run liquor shops in the name of Recreation Clubs.

2. The large scale complaints placed before this Court show that numerous Recreation Clubs are registered under the Tamil Nadu Societies Registration Act , 1975, and those Recreation Clubs are running only liquor shops and selling liquors to not only the members, but also to the non- members. In the State of Tamil Nadu, retail vending liquor shops are being run only by the TASMAC, a fully State-owned Corporation and no license has been granted to the private individuals to run retail liquor shops. Since licenses are not granted to run liquor shops, the private individuals are registering Recreation Clubs under the , 1975 and by obtaining FL2 license, they are running liquor shops alone, which is causing not only inconvenience to the residents residing in that locality, road users etc., but such Recreation Clubs are allowing the persons to involve in certain offenses inside the premises. These clubs are mostly remain unchecked by the officials of the Registration Department as well as by the police officials. The happenings inside these Recreation Clubs are since non- transparent, no actions are taken either by the police officials or by the officials of the Prohibition and Excise Department or by the competent authorities under the , 1975. This situation resulted in institution of number of writ petitions before the High Court seeking either to close down the Recreation Clubs or not to grant FL2 license to these Recreation Clubs, who all are running only retail vending liquor shops.

3. This Court has examined the relevant rules in this regard. The Assistant Commissioner (Excise), Pudukkottai, has filed a status affidavit, dated 14.08.2025, in W.P.(MD) No.7409 of 2024. In the said status affidavit, the rules relating to grant of FL2 licence have been stated in Paragraph No.4, which reads as under:

a) Rule 2 (vii):-“Licence” includes the privileges granted under Section 17-C of the Act for the sale by retail of Indian-made Foreign Spirits and foreign liquor issued under these rules, and “licence holder”, means the holder of such a licence.

b) Rule 17(a):- 17 (a) Kinds of licences — The licences issued under these rules shall be of the following kinds, for the purposes specified in the Act.

(A) Licences for liquor used for consumption The licences issued under this class are for privilege of sale of Indian Made Foreign Spirits in retail under section 17-C of the Act or for sale of foreign liquor.

F.L. 1 – Licence for the grant of privilege of retail sale of bottled Indian – made foreign spirits or sale of foreign liquor.

F.L. 2. – Licence for possession of liquor by a non-proprietary club for supply to members.

c) Rule 19 (B) (2):-

In the case of an application for a licence in Form F.L.2. -

(i) that the club in respect of which the licence has been applied for is of a non-proprietory character functioning for more than 3 years and

(ii) that atleast 50 of the members of the club have signified their willingness to obtain liquor from the said club or that the club should have functioned with a bar in the pre-prohibition days and have on its rolls not less than 50 persons.”

4. Pertinently, the Tamil Nadu Prohibition Act , 1937, and the Tamil Nadu Societies Registration Act , 1975, do not specifically give definition to the word “Recreation” used in Section 3 of the , 1975, and the word “Club” used in Rule 17(a) of the Tamil Nadu Liquor (Licence and Permit) Rules, 1981.

5. However, in the counter affidavit of the Inspector General of Registration, it has been stated that the Oxford Dictionary has given a meaning for the word “Recreation” as follows:

“Any activity that refreshes, satisfies, and brings enjoyment to people, in whi

Click Here to Read the rest of this document