Govt Policies On Liquor License Transfer Lack Statutory Force Without Official Gazette Notification: Bombay High Court (Nagpur Bench) Upholds S.139(2) Bombay Prohibition Act - 2025-05-05

Bombay High Court Quashes Minister's Order in Liquor License Dispute, Cites Lack of Gazette Notification for Contested Policies

Nagpur, Maharashtra – The Nagpur Bench of the Bombay High Court, in a significant ruling, has quashed an order by the Minister of State Excise, Maharashtra, that had rejected a revision petition concerning the transfer of a CL-III liquor license. Justice M.S.Jawalkar , presiding over the case of Bhartidevi Wd/o Motiram Moryani vs. State of Maharashtra & Ors. (Writ Petition No. 6228/2024), held that government policies or circulars influencing license transfers lack statutory force if not published in the Official Gazette as mandated by Section 139(2) of the Bombay Prohibition Act, 1949.

The Court also found that the petitioner was not granted an ample opportunity of hearing before the Minister, violating principles of natural justice, and that the Collector, Nagpur, had acted hastily in implementing the Minister's order, disregarding a Supreme Court protection.

Case Background: A Decades-Long License Saga

The dispute revolved around a CL-III liquor license originally issued in 1974 to Madhav Prasad Jaiswal . After several transfers and partnerships spanning decades: * The license was re-validated in 1984 by Smt. Jamunadevi Jaiswal , a relative, who became a partner. * FollowingMadhav Prasad 's death in 1988, the license was transferred to Jamunadevi in 1989. * Jamunadevi later inducted her daughter-in-law, Smt. Sandhya Jaiswal (Respondent No. 5), as a partner and subsequently withdrew. * In 2002, the license was transferred from Sandhya Jaiswal to the current petitioner, Bhartidevi Moryani, for a consideration of Rs. 18 lakhs plus privilege fees.

The challenge arose around 2004 when Respondent No. 6, Smt. Anita Jaiswal (claiming to be a legal heir of Madhav Prasad ), and others contested the transfers, alleging irregularities and undue influence. This led to a series of legal battles culminating in the Minister of State Excise's order dated 24/09/2024, rejecting the petitioner's revision plea. This order, and its immediate implementation by the Collector, Nagpur, on 25/09/2024, were challenged in the present writ petition.

Arguments Presented

Petitioner's Contentions (Represented by Senior Advocate Shri Sunil Manohar): * The Minister's order was arbitrary, influenced by extraneous considerations (alleged political pressure), and passed without affording the petitioner an adequate hearing, especially given her medical condition at the time. This violated principles of natural justice and a Supreme Court directive for ample opportunity. * The Collector lacked the power to review his earlier decisions, and the Minister could not direct such a review. * The crucial government policies relied upon by the respondents to invalidate the transfers (e.g., restricting partner rights upon original licensee's death, mandating transfer to legal heirs) were never published in the Official Gazette, thus lacking legal sanctity under Section 139(2) of the Bombay Prohibition Act, 1949. * Rule 28 of the Maharashtra Country Liquor Rules, 1973, explicitly empowers the Collector to permit license transfers, including to partners. * The respondents' grievances were raised after an inordinate delay of 15 years. * Allegations of fraud, misrepresentation, and tampering with records were unsubstantiated.

Respondents' Contentions (Represented by Senior Advocate Shri F.T. Mirza for the State, Shri S.M. Puranik for Resp. No. 5, and Shri M.P. Khajanchi for Resp. No. 6): * The transfer of the license to Jamunadevi after Madhav Prasad 's death violated the then-existing government policy (dated 20/03/1986), which stipulated that an incoming partner unrelated to the original licensee would have no rights upon the licensee's demise. The license should have devolved to Madhav Prasad 's legal heirs. * All subsequent transfers, including to the petitioner, were therefore illegal. * Respondent No. 6, Smt. Anita Jaiswal , is the rightful legal heir. * Allegations of fraud, misrepresentation, and removal of official records were leveled to support their claim that the initial transfers were illicit. * The petitioner was given sufficient opportunity before the Minister.

Court's Decisive Reasoning and Key Findings

Justice Jawalkar meticulously examined the arguments and evidence, making several critical observations:

Violation of Natural Justice : The Court found merit in the petitioner's claim that she was not given an "ample opportunity of hearing" by the Minister, especially considering her documented illness. The Minister proceeding with an "assumption that the Petitioner has nothing more to submit" was deemed a violation of natural justice.

Collector's Power of Review : The Court noted, "once an order is passed by the Collector, Nagpur, there was no reason to insist the Collector to pass another order, that too without challenging the earlier order... In fact, there is no any statutory power vested with the Respondent No. 2 to review its own order. Even Minister has no power directing the Collector to review it order beyond the provisions of law."

Non-Gazetted Policies Lack Statutory Force : This was a cornerstone of the judgment. The Court emphasized that government policies or circulars, like the one dated 20/03/1986 and others relied upon by the respondents, must be published in the Official Gazette to have statutory force, as per Section 139(2) of the Bombay Prohibition Act. The judgment quoted: "Section 139(2) of the Bombay Prohibition Act specifically provides that an order made under sub-section (1) shall, if it is of a general nature of affecting a class of persons, be notified in the Official Gazette." Relying on precedents like I.T.C. Bhandrachalam Paperboards & another vs. Mandal Revenue Officer, A.P. & others , Laxman R. Vajage vs. Collector of Bombay & others , and particularly Nilesh alias Narayan Y. Jadhav vs. State of Maharashtra & others , the Court stated: "if the Policy has not been reduced to anything acceptable in law has no statutory force unless it is published in the Government Gazette as per Section 139(2) of the Bombay Prohibition Act."

Rule 28 Prevails in Absence of Gazetted Policy : The Court found that Rule 28 of the Maharashtra Country Liquor Rules, 1973, grants the Collector the authority to permit license transfers, and this rule does not inherently restrict transfers only to legal heirs.

Inordinate Delay and Lack of Proof by Respondent No. 6 : The Court found the 15-year delay by Respondent No. 6 in raising her claim significant. Her explanation regarding the resolution of family disputes was termed "imaginary and unbelievable" without supporting documentation. Furthermore, " Anita Jaiswal has not placed any document to show that she is the legal heir of original License Holder Shri Madhav Prasad Jaiswal ."

No Substantiated Fraud or Misrepresentation : The allegations of fraud, misrepresentation, or that the petitioner was involved in the disappearance of files were found to be unproven. The Court noted that an inquiry against a clerk, Smt. Neral, was never concluded.

Hasty Implementation of Minister's Order : The Court criticized the Collector's action: "after passing of the order dated 24/09/2024, immediately on the next date, the Collector implemented the order... In fact, there was order passed by the Hon’ble Supreme Court. The protection of six weeks was granted to the Petitioner... Even then... in a hurried manner, the Respondent No. 2 – Collector executed the order."

The Court concluded that the Minister's order was "patently erroneous, without considering the provisions of law" and that the Minister had "recorded a perverse finding."

Final Decision and Implications

The High Court allowed the writ petition and passed the following orders: 1. The order dated 24/09/2024 passed by the Minister of State Excise Department, Maharashtra State, Mumbai, is quashed and set aside. 2. Consequently, the order dated 25/09/2024 passed by the Respondent No. 2 – Collector, Nagpur, implementing the Minister's order is also quashed and set aside. 3. The Collector, Nagpur, is directed to restore possession of the liquor shop to the petitioner as it existed before the Minister's order and to allow the shop to reopen immediately.

This judgment reiterates the critical importance of adhering to statutory requirements for the promulgation of government policies, especially those affecting citizens' rights and businesses. It underscores that administrative actions must comply with principles of natural justice and cannot be based on unverified claims or unnotified policies.