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TMI Blog2014 (3) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... rinking and for steps to be taken to initiate establishment of de-addiction centres in each district. The manner in which the revenue needs of the State should be balanced with the need to educate the public of the evil effects of drinking are also not for this Court to adjudicate in proceedings under Article 226 of the Constitution of India. This contention urged by the petitioners, who are carrying on trade in the sale of IMFL and FL in retail shops, is akin to the devil quoting the scriptures, and does not merit acceptance. - Writ petition dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt of applications and drawal of lots, but had directed that no licenses shall be issued for any of the relocated shops; when the matter was being heard, the respondents withdrew the notifications with liberty to issue notifications afresh for relocation of the A-4 shops at all places where the turnover of the existing shops exceeded seven times the licence fee; as the cause in the Writ Petition did not survive, necessitating adjudication by this Court, the Writ Petitions were closed by order dated 21.08.2013; 60 A-4 shops, notified at their original places in the third round of notification, were confirmed; notifications dated 03.11.2013 were issued by the District Collectors inviting applications for establishing A-4 shops at the notified places; 547 applications were received pursuant to these notifications; among the 547 applications, 14 were received for the 12 A-4 shops notified in their original locations; as against the 121 A-4 shops sought to be relocated, 533 applications were received for 72 A-4 shops; lots were drawn on 07.12.2013 by the District Collectors, and successful applicants were declared; the Prohibition and Excise Superintendents had issued provisional licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which a licence was issued, in terms of Rule 16(9); if the licensee's turnover crosses 7 times the licence fee, or the proportionate licence fee, in that excise year such licensees are liable to pay privilege fee; the petitioners' contention that they would be put to loss if licences are issued to prospective applicants is not tenable; under Section 3 of the Act and Rule 11 of the Rules, the District Collector is the selection authority to conduct the process of selection of applicants for grant of licences, which includes the power to issue a notification duly inviting applications for grant of licences; at the time of selection of the applicants, the Commissioner had informed all the District Collectors, through D.O. letters, to issue notifications inviting applications for grant of licences; and as many as 5510 A-4 shops have been allotted to the successful applicants for the year 2013-14 as per the notification issued, in the District Gazettes, by the District Collectors concerned. Oral submissions were put forth by Sri K. Ramakrishna Reddy, Learned Senior Counsel, Sri N. Subba Rao, Sri S. Lakshma Reddy, Sri S. Rahul Reddy, Sri I. Chandrasekhar, Sri P. Nagendra Red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relocate any un-disposed shops from any area/locality as he thinks fit." The word "un-disposed", in amended Rule 4, disables the Commissioner from relocating any A-4 shop, and his power to relocate A-4 shops is confined only to those which remained undisposed for the Excise Year 2013-14. The un-disposed A-4 shops are those for which either no licence was granted in the Excise Year 2012-13 or for which the licensees chose not to renew their licences for the Excise Year 2013-14. As against the stipulated 6596 shops for the entire State, the number of A-4 shops for which licences were renewed for the Excise Year 2013-14 were 4986. Around 1610 A-4 shops remained un-disposed, and were sought to be sold to augment State revenue. It is only these un-disposed A-4 shops which the amended Rule 4 empowered the Commissioner to relocate for augmenting State revenue through collection of licence fees. Reliance placed on behalf of the petitioners, on the judgments in Arji Sankara Rao v. Government of Andhra Pradesh 2005(6) ALD 514, and G. Venkatesh v. Commissioner of Prohibition and Excise 2005(6) ALD 514, is misplaced. In Arji Sankara Rao3, this Court held that, before issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have effect. These presumptions will have to be made in the case of the rule-making authority also. (J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of U.P. AIR 1961 SC 1170 : (1961) 3 SCR 185). It is a cardinal principle of construction of a statute or a statutory rule that effort should be made in construing the different provisions so that each provision will have its play. A statute, or rules made thereunder, should be read as a whole and one provision should be construed with reference to the other so as to make the rules consistent. Any construction which would bring any inconsistency or repugnancy between one provision and the other should be avoided. A construction that reduces one of the provisions to a 'dead letter' is not a harmonious construction as one part is being destroyed. (Jagdish Singh v. Lt. Governor Delhi AIR 1997 SC 2239). To harmonise is not to destroy. Relocation of an A4 shop is permissible only if it was not disposed of at the beginning of the Excise Year 2013-14. Accepting the contention that the number of shops fixed in an area/locality, when the notifications were issued for the Excise Year 2012-13, cannot be increased subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 4 is open ended, and leaves it to the discretion of the Commissioner to decide the place where an undisposed A-4 shop should be relocated. No words need be added thereto. On the other hand reading any limitation in the amended Rule 4, regarding the areas/locality to which it should be relocated, would require addition of words thereto which is impermissible in law. III. ARE THE FACTORS ENUMERATED IN RULE 4 REQUIRED TO BE TAKEN INTO CONSIDERATION EVEN WHILE RELOCATING UNDISPOSED A-4 SHOPS? It is contended on behalf of the petitioners that, even while relocating A-4 shops, the factors enumerated in Rule 4 should be taken into consideration as fixation of the number of shops is at a micro level. The prescription in Rule 4, of having due regard to the requirement of public order, health, safety and other factors, is before the Commissioner fixes the number of shops to be established in an area/locality. Such an exercise has already been undertaken and completed in the previous Excise Years. On a plain and literal reading of the amended Rule 4 it is evident that the Commissioner is not obligated to again have due regard to these factors while relocating an un-disposed shop from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the counter-affidavit, it is evident that the Commissioner had again taken into consideration the factors enumerated in Rule 4 before relocating undisposed A-4 shops. IV. CAN SHOPS, HITHERTO FIXED FOR AN AREA/LOCALITY WITHIN A DISTRICT, BE RELOCATED TO ANOTHER AREA/LOCALITY IN ANOTHER DISTRICT OF THE STATE? It is contended on behalf of the petitioners that there are six zones in the State which are divided into two multi-zones; in the absence of any definition in the rules, and as the Licensing Authority (Excise Superintendent) is in- charge of an excise district, the word "area" can only mean a part of a district and not beyond; a "locality" is similar to an "area"; the words "area/locality" should be read ejusdem generis, and cannot travel beyond the district; the words "any area" must be read to mean a locality within the same mandal; the entire State cannot be taken as one area; the contemporaneous understanding of the Commissioner, in the impugned notification dated 30.11.2013, is that the word "area/locality" means a "district"; from the Excise Policy, notified in G.O.Ms. No.358 dated 22.06.2013, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Year 2013-14. It is only because the shops, hitherto fixed in an area/locality, were not disposed of (for which either no licences were granted or renewed) are they now sought to be relocated. In Shaktikumar M. Sancheti v. State of Maharashtra (1995) 1 SCC 351, the Supreme Court considered the scope of the words "local area" under the Motor Vehicles Taxation Act and observed that the expression "local area" must be understood in the sense of any area administered by a local body. In C.P. Sikh Regular Motor Service v. State of Maharashtra (1974) 2 SCC 579 = AIR 1974 SC 1905, the observations of the Supreme court were in the context of Section 2(1) of the Motor Vehicles Act, 1939 as inserted by Act 56 of 1969 whereby 'area', in relation to any provision of said Act, was defined to mean such area as the State Government may, having regard to the requirements of that provision, specify by notification in the Official Gazette. The definition of "local area" under the Motor Vehicles Taxation Act, and "area" under the Motor Vehicles Act, cannot be extrapolated to the 2012 Rules. The amended Rule 4 refers merely to the area/locality where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is confined to a "district" and not beyond, his power to permit APBCL to open outlets is not only confined to the district of which he is the Collector but also, as is clear from the use of the word "such", to the very same area where the licence granted earlier was cancelled, or no licence was granted, that too only with the approval of the Commissioner. On the other hand the Commissioner's power under Rule 18(2), to permit APBCL to open outlets, is neither limited by any area/locality restrictions nor is his power confined only to grant of permission in such places where an A-4 shop licence could not be disposed of or where a cancelled licence could not be re-allotted. The only limitation on his power is his satisfaction that granting such permission is in public interest. The words "anywhere in the State" were used in Rule 18(2) only to distinguish the powers conferred on the District Collector and the Commissioner. While the power of the District Collector under Rule 18(1) is confined to the area/locality in the District, the power of the Commissioner under Rule 18(2) is not. Unlike Rule 18(1) which is confined to outlets being opened by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea limits of "X" Municipality, the power to relocate the other A-4 shop, which remained un-disposed, is not confined to the area limits of "X" Municipality. The only limitation placed by the Excise Policy for the year 2013- 14, on relocation of an un-disposed A-4 shop, is that it should be from an area to another within the same population slab or from a lower population slab to a higher population slab. VII. POWER OF THE COMMISSIONER TO RELOCATE AN UNDISPOSED A-4 SHOP, HITHERTO FIXED IN A SCHEDULE AREA, TO A NON-SCHEDULE AREA: It is contended, on behalf of the petitioners, that Rule 4 does not empower the Commissioner to relocate shops, situated in scheduled areas, to non-scheduled areas; under Rule 5(1)(i) shops to be located in scheduled areas are separately listed and serially numbered; and shops in the scheduled areas cannot be relocated to non-scheduled areas unless the Commissioner deletes it from the said list, and includes it in the list of "plain areas". Rule 2(t) of the 2012 Rules defines "Scheduled Area" to mean the Scheduled Areas notified under para 6 of the V Schedule to the Constitution. Rule 3(2) stipulates that, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... munity resources and, without detriment to any law for the time being in force, the customary mode of dispute resolution. Section 242-I(1)(a) stipulates that the Gram Panchayat or, as the case may be, the Gram Sabha shall exercise such powers and perform such functions in such manner and to such extent as may be prescribed in respect of the enforcement of prohibition or regulation or restriction of the sale and consumption of any intoxicant. In the exercise of the powers conferred under Section 268(1) r/w. Sections 242-A to 242-I under Part VI-A of the Act, the Andhra Pradesh Panchayats Extension to Scheduled Areas (PESA) Rules, 2011 were made and notified in G.O.Ms. No.66 dated 24.03.2011. Rule 8(I)(b) requires the Gram Sabha to be consulted before the grant of any licence to open liquor shop in the village; for the Gram Sabha to convey its opinion, in the form of a resolution, within four weeks; and for licences to be granted only to the local Scheduled Tribes. Rule 8(I)(c) requires the department to issue a speaking order for granting or not granting any licence to open liquor shop/bar in the village under intimation to the concerned Gram Sabha, and that the Gram Sabha resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s processes. Whether law is viewed from the standpoint of the 'conscientious good man' seeking to abide by the law or from the standpoint of Justice Holmes 'unconscientious bad man' seeking to avoid the law, the law must be known, that is to say it must be so made that it can be known. Subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It will then take effect from the date of such publication or promulgation. (B.K. Srinivasan21; Pankaj Jain Agencies v. Union of India (1994) 5 SCC 198; Sonic Industries22; Harla18). When a statute vests a public power and conditions the manner of exercise of that power then the law insists on that mode of exercise alone. (Charles K. Skaria v. C. Mathew (Dr) (1980) 2 SCC 752). Where the law prescribes the mode of publication of the law to become operative, the law must be published in that mode only. Where the statutory requirement of the mode or form of publication is mandatory, a failure to comply with those requirements might result in there being no effective order or rule, but where the mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -14. Rule 21 of the 2012 Rules provides that a licence granted under the Rules, for the period from 1st July, 2012 to 30th June, 2013 or part thereof, shall be considered for renewal for the period 1st July, 2013 to 30th June, 2014 subject to the applicant completing all formalities stipulated thereunder. The amendment made, by G.O.Ms. No.357 dated 22.06.2013, is to the 2012 Rules and, on its coming into force, forms part of the 2012 Rules which, in terms of Rule 21, necessitate compliance for grant of renewal of a licence. The original licence for the Excise Year 2012-13, which is a binding contract between the petitioners and the State, is only for one year and came to an end on 30th June, 2013. The renewed A-4 licence is a fresh contract between the petitioners and the State for a period of one year from 01.07.2013 till 30.06.2014. The licences for the Excise year 2013-14 were renewed, and a new contract was entered into between the petitioners and the State on or after 01.07.2013, in accordance with the amended Rules which came into force on 24.06.2013 prior to the commencement of the Excise Year 2013-14 on 01.07.2013. Neither the Act nor the Rules stipulate that the amended Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made during the current excise year. We are of the view that the State should not have interfered with the existing rights of the Tappers Societies and if it wanted to bring in a change, effect should have been given to such change only after the existing contracts with the respondent Societies came to terminate by efflux of time.......". (emphasis supplied) Unlike in Guntakal Toddy Tappers Co-op Society (1985) 3 SCC 360, where the Rule was amended when the five year license period was in operation, Rule 4 has been amended and applied for the Excise year 2013-14 (i.e., from 01.07.2013 to 30.06.2014) only after the one year license, granted for the Excise year 2012- 13, expired on 30.06.2013. X. CAN RESTRICTIONS BE PLACED, ON A LICENCE GRANTED TO CARRY ON TRADE IN LIQUOR, ONLY BY PLENARY LEGISLATION AND NOT SUBORDINATE: It is contended, on behalf of the petitioners, that a property right cannot be affected by way of Rules and Executive Instructions; the authority of law, within the meaning of Article 300-A, is a law made by legislative authority; the word 'law', in the context of Article 300-A, must mean an Act of Parliament or of a State Legislature; the State or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e action of the Regional Passport Officer, in calling upon the petitioner to surrender both his passports to the Government, was under examination. None of these judgements relate to the executive power of the State to control and regulate trade in liquor. Even if the "license" granted in the petitioners favour is presumed to be a proprietary right, restrictions on the right of a licensee to carry on trade in liquor can be imposed by subordinate legislation or even executive instructions. There is nothing in clauses (2) to (6) of Article 19 which makes it imperative to impose restrictions on trade or business in potable liquor only by a law enacted by the legislature. Restrictions can also be imposed by subordinate legislation as long as it is not violative of any provisions of the Constitution. The trade or business in potable liquor is a trade or business in res extra commercium and, hence, can be regulated and restricted even by an executive order. (Khoday Distilleries Ltd. v. State of Karnataka (1995) 1 SCC 574). The contention that the power to relocate undisposed A-4 shops, from an area/locality to another, can only be conferred by plenary legislation, and not subo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shop to an area in which exclusive privilege was already conferred; and the impugned action of the Commissioner, to relocate undisposed shops from other areas into the petitioners' area over which they have exclusive privilege, is contrary to law, illegal and without jurisdiction. Trade in liquor is not a fundamental right. It is a privilege of the State. The State parts with this privilege for revenue considerations. (Devans Modern Breweries Ltd2; Kerala Samsthana Chethu Thozhilali Union v. State of Kerala (2006) 4 SCC 327). The State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. When the State permits trade or business in potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any. (Khoday Distilleries Ltd.33). Section 17(1)(v) of the Act enables the Government, subject to the provisions of Sections 28 and any rules made in this behalf and subject to such conditions as they may deem fit to imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quot; can only mean a privilege granted to a person to the exclusion of all others. However a lease/licence for such "exclusive privilege" is, by Section 17(1) itself, made subject to Section 28 of the Act, the Rules made thereunder and the conditions which the Government may deem fit to impose. The expression "subject to" conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. (South India Corpn. (P) Ltd. v. Secy., Board of Revenue, Trivandrum (1964) 4 SCR 280; Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (1986) 4 SCC 447). The operative part of Section 17(1) is prefaced by the words "subject to the provisions of Section 28, any rules made in this behalf and such conditions as the government may deem fit to impose", which means that the exclusive privilege granted by the State must yield to the provisions of Section 28 of the Act, any rules made in this behalf, and such conditions as the government may deem fit to impose. (Indian Minerals Co. v. N.I.L.M. Assos. AIR 1958 Allahabad 692). The power conferred on the Government, under Section 17(1)(v) of the Act, to grant an exclusive privil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the consideration in money receivable by the Government from a private person by grant of a licence, for parting in such person's favour, its exclusive privilege or right of carrying on certain activities in respect of liquor. (State of U.P. v. Sheopat Rai AIR 1994 SC 813 = 1994 Supp (1) SCC 8). The issuance of a liquor licence constitutes a contract between the parties i.e. between Excise Authorities on the one hand and the individual applicant- contractor on the other. (Devans Modern Breweries Ltd.,2). However the said contract has, by law, been made subject to the amended 2012 Rules and the Excise Policy of the year 2013-14. Notwithstanding the exclusive privilege granted to the petitioners, to sell IMFL and FL in the stipulated areas/localities, un- disposed A-4 shops can be relocted in accordance with the amended 2012 Rules and the Excise Policy for the year 2013-14. Reliance placed by the petitioners on Sections 13 and 21 to 23 of the Act is misplaced. Section 13 of the Act relates to manufacture and bottling of liquor for sale and has no application to sale of IMFL and FL in an A-4 shop. Section 21 enables the Government to levy excise duty or/and a countervailing dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience, that its discriminations are based on adequate grounds, and that the legislature is free to recognise degrees of harm, and confine its restrictions to those cases where the need is deemed to be the clearest. (Mohd. Hanif Quareshi v. State of Bihar AIR 1958 SC 731; Nagaland Senior Govt. Employees Welfare Assn. v. State of Nagaland (2010) 7 SCC 643; Mahant Moti Das v. S.P. Sahi AIR 1959 SC 942; A.C. Aggarwal, Sub- Divisional Magistrate, Delhi v. Ram Kali AIR 1968 SC 1). The statutory provision must be interpreted and read broadly, and not narrowly. The approach must be to uphold the validity of the impugned delegated legislation by a process of fair and broad reading of the statutory mandate. (Devans Modern Breweries Ltd.,2). It would be wholly inappropriate for this Court, therefore, to examine the validity of the amended Rule 4 on the basis of submissions made across the bar. XIII. BURDEN LIES HEAVILY ON THE PERSON, WHO SEEKS TO IMPEACH THE RULE, TO PLEAD AND PROVE THAT IT IS UNCONSTITUTIONAL: The contention that Rule 4 is ultra vires t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existing licensees would fall below the turnover of the A-4 shops whose turnover is 13 times the license fee; failure to relocate undisposed shops, in areas where the turnover is 13 times, would also result in discrimination; and a new A-4 shop should not be established in their area, in the middle of an excise year, more so as the Government would not get any extra monetary benefit. Article 14 forbids class legislation, and not a reasonable classification. What is forbidden is discrimination. Persons similarly situated must be similarly treated. Where, however, the persons are not similarly situated, there is no prohibition to treat them separately, provided of course there is a reasonable nexus between the basis of classification and the object to be achieved. (K. Muthusamy v. Government of Tamilnadu LAWS -TLMAD 2003-0-582: MANU/TN/0192/2003). Every instance of discrimination does not necessarily fall within the ambit of Article 14 of the Constitution. Discrimination means an unjust and unfair action in favour of one and against another. It involves an element of intentional and purposeful differentiation and unfavourable bias; an unfair classification. (Rajasthan State Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s levied only when the cumulative purchases of IMFL and FL by the licensee, during the Excise Year, exceeds seven times the annual licence fee. If his cumulative purchases for the Excise Year are less than seven times the annual licence fee, the licensee is not required to pay the privilege fee. Implicit in Rule 16(9) is that the Rule making authority considered the profit earned on cumulative purchases of IMFL and FL by the licensee, upto seven times the annual licence fee, as a reasonable return on their investment. By the impugned notifications, undisposed A-4 shops were sought to be relocated only to areas/localities where the cumulative purchases of each A-4 shop, during the Excise year 2012-13, exceeded fourteen times their licence fee. The licensees, whose turnover exceeded fourteen times the annual licence fee in the previous Excise Year 2012-13, form a distinct class, different from those who did not achieve a turnover of fourteen times the licence fee. The object sought to be achieved by relocation of shops only to such areas is two fold. Firstly, to generate more revenue for the State and, secondly, to ensure that, even after relocation, both the existing and the relocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imes the licence fee in the Excise Year 2012-13, may achieve a turnover less than a licensee who had achieved a turnover of thirteen times the licence fee in the earlier Excise year 2012-13. However relocating an undisposed shop to an area, where the turnover achieved in the Excise Year 2012-13 was thirteen times or below the licence fee, would have resulted in each of the two licencees not being able to achieve a turnover of seven times the annual licence fee, which Rule 16(9) presumes to be a reasonable return on their investment. The licence fee is fixed for a population slab. It is the very same licence fee, fixed in terms of Rule 16(1) on the basis of population, that is levied even on relocation of an un-disposed A-4 shop. Where an un-disposed A-4 shop is relocated after 31st July, the licence fee is required to be reduced proportionately in terms of the proviso to Rule 16(1). While the licence fee, even for the relocated A-4 shop, would be the licence fee prescribed under Rule 16(1), the proviso to Rule 16(1) would require a proportionate reduction of such licence fee, if a licence is granted to the relocated un-disposed shop after 31st July, 2013. The privilege fee, of 8% p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional tax need not be paid by the new entrants; payment of additional tax at 13.5% by the existing licensees is almost equal to the licence fee; treating unequals as equals is in violation of Article 14 of the Constitution of India; the Commissioner cannot relocate shops from one district to another at his whims and fancies; he must take viability, under Rule 16(9), into consideration; except collection of the licence fee, no other object is achieved in establishing another shop in the same area; a new shop being established in the area will only result in dispersal of customers, and creation of unhealthy competition; there is no transparency as state-wide statistical data has not been published; the counter-affidavit is also silent whether the Commissioner was appraised of the statistical details of the entire State; shops with higher turnover have not been notified; exercise of power, to relocate shops from one district to another, is unwarranted and unreasonable; and, instead, the power under Rule 18 should have been exercised, and APBCL ought to have been permitted to open outlets in the localities/areas where shops could not be disposed or could not be allotted for any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anting the exclusive right or privilege of selling liquor. The State cannot ride roughshod over the requirement of that Article. (State of M.P. v. Nandlal Jaiswal (1986) 4 SCC 566; Devans Modern Breweries Ltd.,2). The State, while parting with its exclusive privilege or a part thereof, may impose conditions but, once such terms and conditions are laid down by reason of a statute, the same cannot be deviated from. (Kerala Samsthana Chethu Thozhilali Union34). The power conferred on the Commissioner, to relocate undisposed A-4 shops, is by subordinate legislation (amendment of Rule 4 of the 2012 Rules) and by Executive Policy (para 2 of G.O.Ms. No.358 dated 22.06.2013). The principle of non- arbitrariness cannot apply to a change of policy by legislation. (Madras City Wine Merchants' Assn. v. State of T.N., (1994) 5 SCC 509). As the vires of the amended Rule 4 is not under challenge in these Writ Petitions, this Court is only required to examine whether exercise of power, under the said Rule, by the Commissioner is in violation of Article 14 of the Constitution. While considering the applicability of Article 14 to liquor trade, the Court would be slow to interfere with the polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. The rule of reason has thus become a generalized rubric covering not only sheer absurdity or caprice, but merging into illegitimate motives and purposes, a wide category of errors commonly described as 'irrelevant considerations', and mistakes and misunderstandings which can be classed as self-misdirection. (Administrative Law: HWR Wade & C.F. Forsyth - Tenth Edition). Can exercise of power, to relocate undisposed A-4 shops to areas where the existing shops achieved a turnover exceeding fourteen times the annual licence fee in the previous Excise Year 2012-13, be said to be so arbitrary and unreasonable as to violate Article 14 of the Constitution of India? The grant of a liquor licence does not involve any right or expectation but i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aximum number of shops fixed by the Government. The State can always re-locate undisposed shops, for augmenting public revenue, as long as the existing licensees are not deprived of their privilege of carrying on their business. (R. Selvaraj68). It is not even the petitioners' case that they are prevented from trading in liquor as a result of relocation of an undisposed shop in their area. It does not stand to reason that the power to relocate an undisposed shop should be exercised only at the beginning of the Excise year, and not thereafter. If the respondents could have exercised the power under the amended Rule 4 at the inception, without any demur, there is no reason to contend that the respondents cannot take any steps subsequently to settle such vacant shops in accordance with the Rules. (K. Muthusamy55). The undisposed shops, which have been relocated consequent to the impugned notifications, are required, in terms of the proviso to Rule 16(1), only to pay the proportionate licence fee, and not the annual licence fee in its entirety. Privilege fee, under Rule 16(9), would be levied on these shops the moment they achieve a turnover of seven times the proportional licence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a given case must depend to a great extent on the facts and circumstances of that case and the framework of the law under which the enquiry is held. Whenever a complaint is made before a Court that some principle of natural justice has been contravened, the Court has to decide whether observance of that rule was necessary for a just decision on the facts of the case. (Maneka Gandhi v. Union of India AIR 1978 SC 597; Suresh Koshy George v. University of Kerala AIR 1969 SC 198(1969)1 SCR 315; D.F.O., South Kheri v. Ram Sanehi Singh (1971) 3 SCC 864 = AIR 1973 SC 205). It should not proceed as if there are inflexible rules of natural justice of universal application. Each case depends on its own circumstances. Rules of natural justice vary with the rules prescribed by the legislature. (M/s. Chingleput Bottlers78). Rules of natural justice are not statutory rules. These rules are not cast in a rigid mould nor can they be put in a legal strait-jacket. They are not immutable but flexible. These rules can be adapted and modified by statutes and statutory rules. (Union of India v. Tulsiram Patel (1985) 3 SCC 398). Not only can the principles of natural justice be modified but, in exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Constitution. XVII. SCOPE OF INTERFERENCE IN POLICY DECISIONS OF GOVERNMENT: The Excise Policy for the year 2012-13, notified in G.O.Ms. No.390 dated 18.06.2012 and published in the A.P. Gazette on 18.06.2012, stipulated that the privilege of selling liquor through retail shops should be granted by collecting a fixed licence fee based on the population (as per census) of the places (municipality/town/village) where the shops were proposed to be established; the method of selection, for grant of shop licences, was to be by drawal of lots; the period of licence was for one year; and renewal for the second year 2013-14 was to be considered subject to payment of the licence fee to be fixed by the Government for the second year (2013-14), and the licensee not incurring any disqualification as per rules. The total number of A4 shops in the entire State was fixed at the earlier stipulated number of 6596 shops. The licence fee, for different population slabs, was prescribed in Para 8 of the said Excise Policy i.e, for the population slab of upto 10,000, the licence fee was Rs.32.50 Lakhs. It was Rs.34.00 Lakhs for the population slab between 10,000 and 50,000; Rs.42.00 Lakhs for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases, there are good reasons for judicial restraint, if not judicial deference, to the judgment of the executive. Courts should not express their opinion whether, at a particular point of time or in a particular situation, any such policy should have been adopted or not. It is best left to the discretion of the State. (Ugar Sugar Works Ltd. v. Delhi Admn. (2001) 3 SCC 635). Each State is empowered to formulate its own liquor policy. No direction can be given or expected from the Court regarding the "correctness" of an executive policy unless, while implementing such policies, there is infringement or violation of any constitutional or statutory provision. (Ugar Sugar Works Ltd.96). Public authorities must have liberty in framing policies. If a decision has been taken in a bonafide manner, although not strictly following the norms laid down by Courts, such decisions are upheld on the principle that Courts, while judging the validity of executive decisions, must grant certain measure of freedom of "play in the joints" to the executive. (Sterling Computers Ltd.79). Judges should exercise judicial self-restraint while exercising powers of judicial review of adminis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... location of an A-4 shop from a higher population slab to a lower population slab would have resulted in collection of lower licence fees, for grant of a licence for the A-4 shop, at the relocated place. This would, in turn, have resulted in loss in collection of the estimated revenue, thereby defeating the very object of relocating un-disposed A-4 shop in terms of the amended Rules and the Excise Policy. XVIII. LEGITIMATE EXPECTATION: It is contended on behalf of the petitioners that, once a licence is granted with specific conditions and the licence is renewed on those conditions, the licensee has a legitimate expectation of carrying on business in the areas earmarked in their favour when they were granted A-4 licences; and the petitioners cannot be denied the opportunity of making reasonable profits. Legitimate expectation may arise (a) if there is an express promise given by a public authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue. Such an expectation must be reasonable. (Madras City Wine Merchants' Assn.76). A person may have a legitimate expectation of being treated in a certain way by an administrativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... henu Cattle Feed Industries (1993) 1 SCC 71; Jasbir Singh Chhabra97). Legitimate expectation cannot be upgraded to a legally enforceable right which it is not, as it is merely a part of the rule of non-arbitrariness to ensure procedural fairness of the decision. The requirement of public interest can outweigh the legitimate expectation of private persons and the decision of a public body on that basis is not assailable. (Ghaziabad Development Authority v. Delhi Auto & General Finance (P) Ltd., (1994) 4 SCC 42). As the decision of the Commissioner, in relocating un-disposed A-4 shops to areas wherein the petitioners A-4 shops are located, does not suffer from arbitrariness, is not in violation of Article 14 of the Constitution of India, and is taken in the larger public interest of enhancing public revenue, the doctrine of legitimate expectation has no application. There is a distinction between a mere hope and a legitimate expectation. (R. Selvaraj68; Madras City Wine Merchants Association's76). For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope. It cannot amount to a claim or demand on the ground of a right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision taken by the Commissioner, to relocate some of the un-disposed A-4 shops, is in the exercise of the powers conferred under the amended Rule 4 of the 2012 Rules, which has the force of law. It is also in accordance with the Excise Policy framed by the Government for the Excise Year 2013-14 which was notified in G.O.Ms.No.358 dated 22.06.2013 and was published in the A.P. Gazette on 24.06.2013. The contention that the petitioners' legitimate expectation is violated thereby does not, therefore, merit acceptance. XIX. IS FAILURE TO IDENTIFY AREAS, AT WHICH THE UNDISPOSED A-4 SHOPS SHOULD BE RELOCATED, BEFORE THE COMMENCEMENT OF THE EXCISE YEAR 2013-14, FATAL? Learned Counsel for the petitioners would contend that, if the shops had been identified in June, 2013 itself, the exercise of issuing a notification undertaken in the beginning of the year, and the proposal to relocate undisposed A-4 shops had been brought to their notice, the petitioners would not have sought renewal; and, if another shop is now located in their area, the petitioners would not only suffer huge loss but their bank guarantees and licence fees would be forfeited in terms of Rule 16(8). As both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and loss being normal incidents thereof. (Asstt. Excise Commr.116). Relocation of undisposed shops does not deprive the licensees of their right to carry on the trade in intoxicants for the duration of the licence period. This right to trade, during the period of the excise year, should not be confused with the right to make profits. Even assuming that, by reason of the new shops, the licensees may suffer in sales, it would not result in discrimination. The licensees were well aware that there may be an increase of shops in their area, on undisposed shops being relocated thereat, and that their sales may get reduced thereby. Neither the viability of liquor trade nor the profit or loss of the liquor vendor is of any concern of the State, and it confers privilege on fixed terms for a fixed period. It is for the participant to plan and participate in the purchase of the privilege. (R. Selvaraj68; Issac Peter116). It is not open to the petitioners to now turn around and contend that un- disposed A-4 shops should not be relocated in their areas as they may suffer losses thereby. XX. HAS THE COMMISSIONER ABDICATED HIS POWERS UNDER RULE 4 AND SURRENDERED HIS DISCRETION TO HIS SUBO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee; after thoroughly examining the proposals, the Commissioner of Prohibition and Excise had again convened a meeting on 29.11.2013 with the Deputy Commissioners of Prohibition and Excise, and had accorded permission to relocate 104 A-4 shops at those areas/localities where the turnover was 14 times or more; in addition, taking into consideration Rules 4 and 17, A-4 shops were sought to be relocated in those mandals which did not have any A-4 shop at all; and the Commissioner had accorded permission to relocate 69 A-4 shops from one location to another within the district, 15 A-4 shops from one district to another within the zone, and 37 A-4 shops from one district to another within the multi-zone within the same licence fee slabs. In calling for proposals, and in seeking information, from his subordinates the Commissioner has neither surrendered his discretion nor has he abdicated his duties. It is evident that it is the Commissioner who has exercised the powers conferred on him under the amended Rule 4, and not the Deputy Commissioners who, as his subordinates, had merely submitted proposals to, and had furnished the information sought for by, him. XXI. ARE DISTRICT COLLECTORS E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority is the Prohibition & Excise Superintendent, the impugned notifications issued by the District Collectors do not accord with Rule 5(1) of the 2012 Rules. The contention of the Learned Government Pleader that the District Collector is the selection authority under Rule 11, and is entitled to issue the notification under Rule 5(1), is not tenable. Rule 3(1) stipulates that, subject to the provisions of the Rules, the right to sell IMFL and FL in retail by shops shall, ordinarily, be granted by way of a licence issued after publishing a notification and inviting applications from the public. Rule 12 relates to submission of applications, and selection of applicants for the grant of licences. While Rule 12(1) requires applications, along with the prescribed enclosures, to be addressed to the licencing authority, the selection procedure, detailed in Rule 12(6) of the Rules, makes it clear that the District Collector is the selection authority. On a conjoint reading of Rules 5 and 12, it is evident that, while the notification under Rule 5(1) is to be issued by, and the applications addressed to, the Prohibition & Excise Superintendent as the licencing authority, the selection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ONSTITUTION, IS NOT TO BE EXERCISED FOR THE MERE ASKING. The contention that the notifications issued under Rule 5(1), inviting applications for the Excise year 2012-13, are not under challenge in these writ proceedings and this Court should not examine the validity of such notifications, but should set aside the impugned notifications issued by the District Collectors under Rule 5(1) for the Excise Year 2013-14, does not merit acceptance. A writ of mandamus is designed to promote justice (ex debito justitiae). The grant or refusal of the writ is at the discretion of the Court. While dealing with a writ petition, the court must exercise discretion taking into consideration a wide variety of circumstances, inter alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant or refusal. (Rajasthan State Industrial Development & Investment Corpn.130). The power conferred on the High Court, under Article 226 of the Constitution, is to advance justice and not to thwart it. The lookout of the High Court is, therefore, not merely to pick out an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice, equity and good conscience. (Ramesh Chandra Sankla126; Shiv Shankar Dal Mills v. State of Haryana (1980) 2 SCC 437 ). As the entire exercise of relocation of un-disposed shops is to enable the Government to augment its revenue, I see no reason to exercise discretion, under Article 226 of the Constitution of India, to set aside the impugned notifications while at the same time permitting the petitioners to continue to carry on trade in IMFL and FL and reap the benefits of the earlier notifications issued, under Rule 5(1) by the District Collectors, for the Excise year 2012-13. XXII. IS THE STATE, BY RELOCATING UNDISPOSED A-4 SHOPS, ENCOURAGING CONSUMPTION OF LIQUOR? It is contended, on behalf of the petitioners, that liquor is not an essential commodity, and grant of privilege fee by the State is only a revenue generating exercise; the very fact that A-4 shops, in some districts, could not be disposed shows that the people in those districts do not wish to consume IMFL; a welfare State should not dispose of A-4 shops which could not be relocated; and relocation of shops, from one district to another, falls foul of the government policy for the year 2013-14 as it would amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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