IMPORTANT POINT
Once the High Court had come to the conclusion that the portions of G.O. Ms. dealing with the non-renewal of the privileges granted to the existing licences subject to their fulfilling the other conditions of the provisions of Tamil Nadu Prohibition Act, 1937 and Tamil Nadu Liquor (Retail Vendees) Rules, 1989 is arbitrary then it would strike down the same leaving the matter for appropriate authority under the Statute to deal with the cases of applicants.

Headnote:Constitution of India-Articles 136, 19(1)(g) and 19(6)-Trade in Indian made foreign liquor-No inherent right to sell it by retail-Reasonable restrictions can be placed on it by State-Tamil Nadu Govt. purports to change its policy for augmentation of its excise revenue-No grievance about High Court s conclusion so far it deals with the dispensing with the right of renewal of the existing licences but its directions contained in clauses (ii), (iii) and (iv) require modification-SLP dismissed accordingly.
       Held : We have carefully considered the rival submissions at the Bar as well as the decision cited in support of the contention raised. So far as the trade in noxious or dangerous goods are concerned, no citizen can claim to have trade in the same and the intoxicating liquor being a noxious material, no citizen can claim any inherent right to sell intoxicating liquor by retail. It cannot be claimed as a privilege of a citizen of a State. That being the position, any restriction which the State brings forth, must be a reasonable restriction within the meaning of Article 19(6) and reasonableness of the restriction would differ from trade to trade and no hard and fast rule concerning all trades can be laid down. The Government of Tamil Nadu does not purport to abolish the trade in intoxicating liquor and what it purports to do is to change its policy intended for augmentation of excise revenue. With that end in view under the new set of Government orders, there have been large number of shops to deal with retail vending of Indian made foreign liquor, there has been re-categorisation of the shops, there has been re-adjustment and relocation of the retail shops, there has been increase in the amount of privilege fee and the High Court has upheld all these conditions on the ground that they relate to the augmentation of excise revenue. But so far as the right of renewal is concerned, the same having been unequivocally indicated in the excise policy of 2001-2002, as reflected in G.O.Ms. No. 115 for the block period of 2001 -2004, the State Government could not have annulled the same and directing afresh the self same procedure to be adopted again by drawal of lots for settling of the privileges in respect of 7,000 shops inasmuch as that has nothing to do with the augmentation of excise revenue. To our query, as to how this should be helpful in achieving the augmentation of excise revenue, Mr. Venugopal was not able to satisfy us and in our view, the High Court rightly came to the conclusion that the aforesaid decision was nothing but an arbitrary and whimsical one taken by the State Government, only to replace the existing licensees by a fresh set of persons by a fresh drawal of lot. Even though the licensees under the earlier policy may not claim an absolute right of renewal but it cannot be denied that under G.O.Ms. No. 115 read with the excise policy evolved for the block period 2001-2004 and the relevant provisions of the Act and Rules, contemplate a case of renewal and this is also apparent from the recommendations of the Excise Commissioner himself on the basis of which the State Government came forward with the revised policy and a new set of rules by enacting G.O.Ms. Nos. 128, 129 and 130. We have, therefore, no hesitation in affirming the conclusion of the Division Bench of the Madras High Court that the portions of G.O.Ms. dealing with the non-renewal of the privileges granted to the existing licensees subject to their fulfilling the other conditions of the provisions of the Act and the rules to be arbitrary. We are, therefore, not persuaded to interfere with the conclusion of the High Court, so far as it deals with the dispensing with the right of renewal of the existing licensees under the present set of G.O.Ms, which fell before the High Court for consideration. Necessarily, therefore, the appropriate excise authority will have to decide the case of the applicants for renewal of the licences in accordance with the Rules as well as the other conditions of the licences. Mr. Chidambaram very fairly stated that none of the respondents have any grievances to be governed by the rules and conditions of licence including the conditions providing for a minimum off-take. But the manner in which the High Court has issued the directions, appears to us not to be in conformity with the rules for issuance of a mandamus. Once the court comes to the conclusion that certain provisions of the Act or the Rules of the Government order is arbitrary, then the Court would strike down the same, leaving the matter for the appropriate authority under the statute to deal with the cases of the applicants. In that view of the matter, the directions contained in Clause (ii), Clause (iii) and Clause (iv) require modulation. We, therefore, substitute the aforesaid clauses of the impugned judgment by the following directions. (Para 7)
       Held consequently : The competent authority/the State Government shall consider the application for renewal of the licence in accordance with law and would be entitled to include all conditions in the licence, including the condition of minimum off-take. Needless to mention that the licensees of the privileges would be bound by the enhancement of the privilege amount as well as the re-categorisation of the shops contained in the three G.O.Ms., referred to earlier. It is also made clear that the facility of the renewal would be available to those of the existing licensees, who had remitted the requisite amount on or before 31st of July, 2002, as ordered by the High Court itself. We also further direct that the privilege fee already paid by these licensees for the Excise Year 2002-2003 shall be duly adjusted. Clauses (i) and (v) of the directions contained in the impugned judgment shall remain as it is. Mr. Venugopal had referred to an affidavit which had been filed in this Court by the Secretary to the Government of Tamil Nadu, Prohibition and Excise Department, wherein it had been stated that the State Government will be willing to consider the grant of renewal in favour of the existing licensees, subject to their giving an undertaking to this court that they would abide by the rules and conditions relating to the minimum off-take during the current year as well as previous excise year 2001-2002 and would withdraw the writ petitions filed by them, which are pending in the High Court of Madras. So far as the minimum off-take for the excise year 2002-2003 is concerned, Mr. Chidambaram, appearing for the respondents, fairly stated that the respondents would abide by the same. But so far as the minimum off-take for the previous excise year is concerned, the same not having been there at the time of grant of the privilege and issuance of licence, but having been introduced at a later point of time, the legality of the same is the subject matter of consideration before the High Court of Madras and we express no opinion on the same. These special leave petitions are accordingly dismissed with the modulated directions, as stated earlier. (Paras 8, 9 & 10)

JUDGMENT

Pattanaik, J.-This batch of Special Leave Petitions are by the State of Tamil Nadu, directed against the judgment of the Division Bench of Madras High Court, dealing with the licensing system for retail vending of Indian made foreign liquor. The Excise Year is for the period of 1st of August of the year in question till the 31st of July of the next year. In June, 2001, the Government of Tamil Nadu came forward with a Policy to be adopted for licensing of the Indian made foreign liquor retail vending shops for the block period 2001-2004. The said Policy was issued under G.O.Ms. No. 113. For the aforesaid block period, it was decided that the retail vending shops for the entire State should be fixed at 6000 and the privilege fee shall be worked out on the notified area basis, taking the average privilege fee of the last three years and providing for some suitable increase. It was also stipulated that the licensee should lift the minimum off-take fixed for the shop by the licensing authority and in case of failure to lift the same, the licensee will be liable to pay a penalty in proportion to the loss of revenue due to non-lifting of stocks and if there is still further default, then the licence would be liable to be cancelled. In accordance with the aforesaid policy decision, amendments to the Tamil Nadu Liquor (Retail Vending) Rules, 1989 were made, which were issued under G.O.Ms. No. 115 dated 22nd of June, 2001. The Prohibition Commissioner also recommended a new licensing system for grant of licences to the Indian made foreign liquor retail vending shops for the block year 2001-2004, which was accepted by the State Government and the necessary amendments to the Retail Vending Rules were made. Under Rule 13 of the amended rules, when the number of eligible applications does not exceed the number of shops notified for an area, then all applicants shall be selected for the grant of privilege. But when the number of applications in respect of the shops in a notified area is more then the number of shops in that area, the selection of applicant for grant of privilege shall be decided by drawal of lot by the licensing authority in the presence of the Collector and the applicants who prefer to be present. Rule 14 of the amended rules provided that privilege amount be fixed by the Commissioner, on the basis of the guidelines approved by the Government. Rule 30(2) provides for the lifting of the minimum off-take of the liquor fixed for the shops by the licensing authority based on the guidelines issued by the Government and the consequences to follow, in case the licensee fails to lift the minimum off take. Sub-rule (7) of Rule 30 provides that the applicant on being granted licence, shall abide by the provisions of the Tamil Nadu Prohibition Act, 1937, as well as the Tamil Nadu Liquor (Retail Vending) Rules, 1989, as amended from time to time and the terms and conditions of the licence granted thereunder.

2. In accordance with the aforesaid Excise Policy and the provisions of the Act and the Rules, the exclusive privilege in respect of different retail vending shops of Indian made foreign liquor were settled with the applicants and licences were also issued by the licensing authority in favour of them for carrying on the business. Even though the policy was for the block period of 2001-2004 and an existing licensee could apply for renewal of his licence, for the excise year 2002-2003, the Government of Tamil Nadu changed the policy by issuance of three G.O.Ms. of the same date being G.O.Ms. Nos. 128, 129 and 130. The aforesaid three G.O.Ms. indicate that the Government felt that there is a need for increasing the number of shops in unserved areas that are not notified and also in the existing notified areas where there is further potential and demand identified by the Collectors. It was also indicated that the privilege amount in respect of the shops located in areas adjoining the Corporations and Municipalities could

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2002 Supreme(SC) 848

Cases Referred (1)