IMPORTANT POINT
There is no fundamental right to trade in liquor and the only right of the licencee is to seek to enforce the terms of contract and the statutory provisions governing the contract.

Headnote:(i) Constitution of India-Article 226-Writ jurisdiction-Exercise of-Complaints of violation of statutory rules and conditions-Violation of each and every provision does not furnish a ground for court to interfere-Excise laws-There is no fundamental right to trade in liquor-Only right of licencee is to seek to enforce terms of contract which is statutory in nature and statutory provisions governing contract.
       Held : The provision may be a directory one or a mandatory one. In the case of directory provisions, substantial compliance would be enough. Unless it is established that violation of a directory provision has resulted in loss and/or prejudice to the party, no interference is warranted. Even in the case of violation of a mandatory provision, interference does not follow as a matter of course. A mandatory provision conceived in the interest of a party can be waived by that party, whereas a mandatory provision conceived in the interest of public cannot be waived by him. In other words, wherever a complaint of violation of a mandatory provision is made, the Court should enquire - in whose interest is the provision conceived. If it is not conceived in the interest of public, question of waiver and/or acquiscence may arise - subject of course, to the pleadings of the parties. (Para 6)
       (ii) EXCISE LAW-Madhya Pradesh Excise Act-Liquor shops-Licences granted to appellant, the highest bidder-Failure to pay monthly rental (licence fee) for two months-Notice -Appellant did not appear before specified authority-Notification issued communicating that if appellant did not clear arrears, shops would be sold by reauction- Appellant failed to pay arrears-Reauction-Demand made upon appellant for loss of revenue resulting from reauction-Challenged-Writ petition-Rightly dismissed.
       Held that the opportunity contemplated by sub-section (1-A) cannot be operated in a leisurely manner. A realistic view has to be taken while determining whether the opportunity given was reasonable or not. The object of all excise laws is two fold viz., to raise revenue and to regulate the trade in liquors which is a noxious substance. There is no fundamental right to trade in liquor (Khoday Distilleries Ltd. v. State of Karnataka, 1995(1) SCC 574. The only right of the licencee is to seek to enforce the terms of contract (which is statutory in nature) and the statutory provisions governing the contract. The considerations aforementioned should be kept in mind while examining complaints of violation of statutory Rules, conditions and terms of contract as well as complaints of lack of reasonable opportunity. (Para 7)

JUDGMENT

B. P. Jeevan Reddy, J.-Leave granted.

2. These appeals are preferred against the judgment of a Division Bench of the Madhya Pradesh High Court allowing the Letters Patent Appeal preferred by the State of Madhya Pradesh against the judgment of a learned Single Judge who had allowed the writ petition filed by the appellant. While we agree fully with the reasoning and conclusion of the Division Bench, we think it necessary at the same time to emphasise a few aspects relevant in the case of such contracts. First, the relevant facts briefly.

3. For the excise year 1994-95, the appellant was the highest bidder for certain number of liquor shops. His bid in a sum of Rs. 11,67,00,000/- was accepted, payable in monthly instalments of Rs.97,25,000/- each. After making the necessary deposits and after complying with other conditions, licences were granted to him and he commenced the business with effect from 1.4.1995. He failed to pay the monthly rental (licence fee) for the months of July and August, 1994. Thereupon a notice dated 9.8.94 (exhibit R-3) was issued by the authorities intimating him that he was in arrears of the licence fee for the months of July and August and that if he does not pay the same, the shops would be reauctioned. The appellant was asked to be present personally on 23.8.1994 for showing cause. Though the appellant received the said notice, he did not appear before the specified authority. He thus failed to avail of the opportunity of personal hearing afforded to him. (Though the appellant disputed this fact, the Division Bench has accepted the respondent s contention and has found as a fact that the appellant did fail to appear on the date of hearing. We accept the said finding.) On 2.9.94, a notification was issued - communicated to a large number of excise officers and other departments and a copy of which was also sent to the appellant - stating that if the appellant did not clear the arrears on or before 12.9.94, the shops would be sold by reauction to be held at 2.00 p.m. on 12.9.94. The said notification is marked exhibit R-12. It was also published in the daily newspaper, Nav Bharat Times. The notification mentioned the precise amount of arrears due from the appellant and stated that on the reauction being held, the existing licence in favour of the appellant shall stand cancelled. Since the appellant failed to pay, reauction was held on 12.9.94, whereafter, a demand was made upon the appellant for the loss of revenue resulting from reauction, as provided by sub-section (4)(b) of Section 31 of the Madhya Pradesh Excise Act. We may set out sub-section (4) of Section 31 at this stage :

"(4) Where a licence is cancelled or suspended under Clause (a), Clause (b), Clause (c) or Clause (e) of sub-section (1),-

(a) the fee payable for the balance of the period for which such licence would have been current but for such cancellation or suspension, may be recovered from the ex-licensee as excise-revenue;

(b) the Collector may take the grant under management or resell it at the risk and loss of the ex-licensee, but any profit realised by such management or resale which is not in excess of the amount recovered under clause (a) for such period shall be paid to the ex-licensee."

4. The appellant questioned the said demand by way of a writ petition in the Madhya Pradesh High Court. He submitted that he was not given due opportunity before cancelling the licence as required by sub-section (1-A) of Section 31, that there was no order of cancellation of licence as such and that there was no proper publicity for the reauction conducted. He submitted that on account of lack of due publicity, only one bidder was present at the reauction and that the shops were sold at a low price. The learned single Judge was impressed by the said contentions and allowed the writ petition. On appeal, however, the Division Bench rejected all of them. Before we set out the reasoning of the Division Bench, it

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1996 Supreme(SC) 1222

IMPORTANT POINTThere is no fundamental right to trade in liquor and the only right of the licencee is to seek to enforce the terms of contract and the statutory provisions governing the contract.

Cases Referred (5)

IMPORTANT POINT
There is no fundamental right to trade in liquor and the only right of the licencee is to seek to enforce the terms of contract and the statutory provisions governing the contract.