The repeated usage of the negative expression 'no' in R.6(2) of the Auction Rules imposed an absolute ban on locating a liquor shop outside the notified limits, and the proviso only allowed for the removal of a shop within the specified limits.

1. Leave granted.

2. A bidder in auction for the privilege of vending foreign liquor within a circumscribed range was permitted by the Excise Commissioner to have his domain shifted to another range. On hearing the said news, a hotelier who is doing business in the latter range was distressed and she quickly approached the High Court for thwarting the said move. At the first round, the hotelier failed to checkmate the bidder as a Single Judge of the High Court declined to grant the relief prayed for by her. However, she succeeded on the second round, when a Division Bench of the High Court, on the appeal filed by her, quashed the order of the Excise Commissioner. This appeal by special leave is by the aforesaid bidder for restoration of the benefit which he secured from the Excise Commissioner.

3. In the State of Kerala, the right to sell foreign liquor is restricted by statutory provisions. The Government of Kerala has formulated Rules for it under the Kerala Abkari Act and one set of such Rules is called "the Kerala Abkari Shops (Disposal in Auction) Rules, 1974" (for convenience it would be referred to as the "Auction Rules"). The Government has the authority, under the said Rules to notify in the Gazette, the limits of each area (range) wherein the shop or shops could be located for vending such foreign liquor. Officers are authorised by the Government to auction the right to vend foreign liquor from each shop and for such period as may be fixed. Person who offers the highest bid would normally be preferred for conferring the privilege to vend foreign liquor and licence would be issued to him for that purpose. Among the different types of licence, only two are relevant for the purpose of this case. One is called "Licence for the privilege of possession of Indian made foreign liquor for sale to public in sealed bottles without the privilege of consumption on the premises". As the said licence is to be issued in Form FL-1, it can be termed as such hereinafter. The other is called "Hotel (Restaurant) Licence" and it is to be issued in Form FL-3. (It can be referred to as such hereinafter).

4. FL-3 licence consists of the privilege to sell foreign liquor for consumption within a room specifically approved for the purpose, to residents in the hotel or boarding houses, including their guests. FL-1 licence is for the privilege of selling foreign liquor in sealed bottles, containing a quantity above 180 ml.

5. For the facts in this case, the following events are to be narrated:

On 13.3.2000, appellant participated in the auction held in respect of a shop to be located within a range called "Changanassery Excise Range" consisting of the areas falling within the limits of Changanassery Municipality. Appellant was the highest bidder and he quoted above Rs. 63 lakhs. On his being chosen for the licence, appellant remitted a portion of the bid amount on the same day.

He failed to find out a suitable place to locate the shop within the boundaries of Changanassery Excise Range. Hence he applied to the first respondent (Commissioner of Excise, Kerala) for permission to locate the shop outside the said range. On the same day the application was forwarded by the second respondent (Assistant Excise Commissioner of the district) with a recommendatory note. The Excise Commissioner granted permission to the appellant on 12.4.2000 for shifting the shop to another range called Karukachal which comprises of the areas falling within Karukachal Panchayat. (That range is situate next to the Changanassery range.) The third respondent, who is running the hotel and restaurant at Karukachal and who obtained FL-3 licence to supply foreign liquor in peg measurements to patrons visiting the hotel, filed a writ petition before the High Court under Art.226 of the Constitution for quashing the aforesaid permission granted by the first respondent. Third respondent contended mainly that the Excise Commissioner had no authority to pass such an order. In def