SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2026 Supreme(Online)(Mad) 48225

IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. R. Swaminathan, J
P. Ganapathy Subramaniam – Appellant
Versus
Secretary to Government Home, Prohibition and Excise Department – Respondent
Writ Petition



Advocates:
For the Appellants/Petitioners: S.R. Jothinath
For the Respondents: T.Gowthaman, K.Sathish, K.Balakrishnan

Trade in liquor is res extra commercium, meaning it is outside ordinary commerce; therefore, the State possesses the plenary power to regulate, monopolize, or close such trade to further public policy goals without being constrained by an individual's claim of legitimate expectation or procedural technicality.

Headnote:The petitioner, a bar licensee, challenged the policy decision to close retail liquor shops and their attached bars, contending procedural lapses and lack of notice. The petitioner sought a writ of mandamus to refrain the authorities from coercive closure. Relying on the established legal principle that liquor trade is 'res extra commercium', the Court determined that the State has the authority to regulate or close liquor businesses in furtherance of public health objectives under the constitutional framework. The court framed the issue as whether a licensee can compel the State to continue liquor operations despite a policy decision to close shops. The court reasoned that since liquor trade is outside ordinary commerce, no fundamental right is violated by operational closure. Procedural objections and arguments concerning 'legitimate expectation' were rejected, determining that the State's directive policy takes precedence over individual commercial interests. In the result, the writ petition was dismissed, with directions that licensees may seek refunds of proportionate excess fees and security deposits through individual representations to the authorities.

Table of Content
1. summary of grievances regarding sudden shop closures by the state. (Para 2 , 3)

ORDER

Heard both sides.

2. The writ petitioner is a bar licensee. The authorities have taken a policy decision to close down the TASMAC shops, to which the bar is attached. The grievance of the writ petitioner is that without serving any proceedings such an arbitrary action has been taken. Hence, the writ petition has been filed for directing the authorities not to take such coercive action of closure or ceiling of the shops and the attached bars.

3. The learned Additional Government Pleader points out that similar writ petitions were filed by the licensees in W.P.No.14245 of 2026 and etc., batch, wherein, the Madurai Bench of this Court has declined to grant the relief sought for by the writ petitioners therein. I am inclined to adopt the very same approach. For ease of reference, the order passed in W.P.No.14245 of 2026 and etc., batch reads as follows:

"2. The factual background in which these writ petitions arise is that, in exercise of its powers under the Tamil Nadu Prohibition Act, 1937 and the rules framed thereunder, the State of Tamil Nadu has monopolized retail liquor vending throughout the State. For that purpose, it has been establishing retail liquor vending shops through the State~owned corporation, namely, Tamil Nadu State Marketing Corporation Limited (TASMAC). 3. It is the contention of the petitioners that following a change of Popular Government, by way of a press release, an announcement was made that 717 retail liquor vending shops were to be closed. These petitioners have licences to sell snacks and water bottles and to collect empty bottles in the respective shops that are now being chosen and closed. The licence is awarded by a tender. The licence period is up to 30.06.2026. When the petitioners had legitimate expectations of carrying on their avocation up to 30.06.2026, the shops were suddenly and abruptly closed, without any opportunity or any proper written order. The petitioners were consequently ordered to shut the bars and close down their business. Under these circumstances, the petitioners haveapproached this Court. Apart from this, some of the landlords who have let out their shops to run the TASMAC retail outlet are also before this Court.

4. The learned counsel for the petitioners would submit that Rule 8 of the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 (hereinafter Rules), prohibits shops from being located within 50 metres and 100 metres, respectively, in municipal areas and other areas, with reference to educational institutions, places of worship, etc. However, in contravention of the Rules, the Government has now decided to close shops up to a distance of 500 metres. Without amending Rule 8, this cannot be carried out. Further, without taking a proper decision, the entire process has been undertaken solely on the Hon'ble Chief Minister's announcement and the issuance of a press release. Therefore, through executive action, the same ought not to have been done.

5. It is their further contention that the selection of the shops for closure has not been properly carried out, and that some of the shops have been picked and chosen arbitrarily. The information on their location is also not recorded correctly, and the shops are being arbitrarily closed. Therefore, the petitioners pray that the respondents be prohibited from closing these shops. In addition, the learned counsel appearing on behalf of the licensees also submits that some of them have paid the entire licence fee up to 30.06.2026. Therefore, when the licensees abruptly ended 40 days before, the proportionate fee had to be refunded to them.

6. Per contra, the learned Advocate General appearing on behalf of the State of Tamil Nadu would submit that the entire business of liquor sale is res extra commercium. The petitioners are not even licensees of the excise authorities. They are only permitted by TASMAC itself to sell

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

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

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top