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2013 (10) TMI 529 - SC - Indian LawsGranting Licence for establishing Distilleries under the Foreign Liquor (Compounding, Blending and Bottling) Rules, 1975 r.w Section 14 of the Abkari Act Right to carry on trade or business in liquor Held that - Article 47 is one of the Directive Principles of State Policy which is fundamental in the governance of the country and the State has the power to completely prohibit the manufacture, sale, possession, distribution and consumption of liquor as a beverage because it is inherently dangerous to the human health - A citizen has no fundamental right to trade or business in liquor as a beverage and the activities, which are res extra commercium, cannot be carried on by any citizen and the State can prohibit completely trade or business in portable liquor and the State can also create a monopoly in itself for the trade or business in such liquor. LIQUOR POLICY - Liquor policy of State is synonymous or always closely associated with the policy of the Statute dealing with liquor or such obnoxious subjects - Monopoly in the trade of liquor is with the State and it is only a privilege that a licensee has in the matter of manufacturing and vending in liquor - It is trite law that a Court of Law is not expected to propel into the unchartered ocean of State s Policies - State has the power to frame and reframe, change and re-change, adjust and readjust policy, which cannot be declared as illegal or arbitrary on the ground that the earlier policy was a better and suited to the prevailing situations. Situation which exited in the year 1998 had its natural death and cannot be revised in the year 2013, when there is total ban. DISCRETION AND DUTY - The powers, conferred on the Commissioner as well as the Government, have to be understood in the light of the Constitutional scheme bearing in mind the fact that the trade or business which is inherently harmful can always be restricted, curtailed or prohibited by the State, since it is the exclusive privilege of the State - State can always adopt a restrictive policy , even in cases where the applicants have satisfied all the conditions stipulated in the rules and the policy permits granting of licences - the satisfaction of the conditions laid down in 1975 Rules would not entitle an applicant as a matter of right to claim a distillery licence which is within the exclusive privilege of the State. MANDAMUS TO ISSUE LICENCE - The High Court cannot direct the State Government to part with its exclusive privilege Granting liquor licence is not like granting licence to drive a cab or parking a vehicle or issuing a municipal licence to set up a grocery or a fruit shop - Before issuing a writ of mandamus, the High Court should have, at the back of its mind, the legislative scheme, its object and purpose, the subject matter, the evil sought to be remedied, State s exclusive privilege etc. and not to be carried away by the idiosyncrasies or the ipse dixit of an officer who authored the order challenged - applicant has failed to establish a legal right or to show that there is a legal duty on the Commissioner or the Government to issue a distillery licence. DISCRETIONARY ORDER ARTICLE 14 Held that - The Respondent could lay a claim only if it establishes that a preferential treatment has been meted out to M/s Amrut Distilleries, Bangalore and M/s. Empee Distilleries, Madras while granting licences for establishing the respective distillery units in the Palakkad District on the ground of discrimination violating Article 14 of the Constitution of India - Respondent has prayed for another licence for it as well which cannot be claimed as a matter of right - Citizens cannot have a fundamental right to trade or carry on business in the properties or rights belonging to the State nor can there be any infringement of Article 14, if the State prefers other applicants for the grant of licence, during the pendency of some other applications, unless an applicant establishes a better claim over others - The learned single Judge as well as the Division Bench of the High Court was not justified in issuing a Writ of Mandamus directing the issuance of a distillery licence to the respondent order set aside Decided in favour of Petitioner.
Issues Involved:
1. Whether the High Court can issue a Writ of Mandamus under Article 226 of the Constitution directing the State to grant a licence for establishing distilleries. 2. The validity of the State's discretion in granting or denying distillery licences. 3. The applicability of Article 14 of the Constitution concerning the non-discriminatory treatment in granting licences. 4. The legal right of a citizen to trade or business in liquor. Detailed Analysis: 1. Writ of Mandamus Under Article 226: The primary issue is whether the High Court can compel the State to grant a distillery licence through a Writ of Mandamus. The Court emphasized that the High Court can direct the State to consider an application for a licence, but it cannot compel the State to part with its exclusive privilege. The Court stated, "A Writ of Mandamus can be issued in favour of an applicant who establishes a legal right in himself and is issued against an authority which has a legal duty to perform, but such a legal duty should emanate either in discharge of the public duty or operation of law." Since there is no legal duty cast on the Commissioner or the State Government to grant a distillery licence, the High Court's directive was deemed inappropriate. 2. State's Discretion in Granting Licences: The judgment discussed the discretionary power of the State in granting distillery licences. The Act and the 1975 Rules confer discretionary powers on the Commissioner and the State Government. The Court noted, "The powers conferred on the Commissioner and the State Government under Section 14 as well as Rule 4 are discretionary in nature." The State can adopt a restrictive policy, including not granting any licences in a particular district or area, even if the applicants satisfy all conditions. The Court concluded that the State's decision not to grant the licence was within its discretionary powers. 3. Article 14 and Non-Discriminatory Treatment: The Court examined whether the State's actions violated Article 14 of the Constitution, which ensures equality before the law. The respondent argued that it was discriminated against as other applicants were granted licences. The Court held that while the State cannot act arbitrarily, the respondent did not establish a better claim over others. The Court stated, "Citizens cannot have a fundamental right to trade or carry on business in the properties or rights belonging to the State nor can there be any infringement of Article 14, if the State prefers other applicants for the grant of licence." The Court found no evidence of discriminatory treatment. 4. Legal Right to Trade in Liquor: The judgment reiterated that there is no fundamental right to trade or business in liquor, as it is res extra commercium (outside commerce). The Court highlighted, "A citizen has, therefore, no fundamental right to trade or business in liquor as a beverage and the activities, which are res extra commercium, cannot be carried on by any citizen." The State has the exclusive right or privilege in dealing with liquor, and it can impose restrictions or completely prohibit the trade. Conclusion: The Supreme Court concluded that the High Court erred in issuing a Writ of Mandamus directing the State to grant a distillery licence. The State's discretionary power in granting licences was upheld, and no violation of Article 14 was found. The appeal was allowed, and the High Court's judgment was set aside. The Court emphasized the State's exclusive privilege in dealing with liquor and the lack of a legal right for citizens to claim a distillery licence.
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