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2014 (3) TMI 732

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.... noted. The petitioners were allotted A-4 shops at Konijerla and other villages for the licence period 01.07.2012 to 30.06.2013. They paid the licence fee of Rs.32.5 lakhs per annum. The licence was renewed, on completion of one year, in accordance with Rule 8 of the Rules. In the notification dated 30.11.2013, published in the District Gazette, the District Collector stated that the licence for the right of selling by shop was to be granted for the licence period from 01.07.2013 to 30.06.2014; the Commissioner of Prohibition & Excise had fixed 153 A-4 shops to be licensed in the areas/localities by proceedings dated 12.07.2012; among the 153 notified shops, 147 shops, which were disposed and established for the year 2012-13, were being renewed for the year 2013-14; in addition thereto, two new shops were allotted by the Commissioner of Prohibition & Excise by proceedings dated 29.11.2013; consequently he was issuing a notification for the A-4 shops which were either not disposed or had been cancelled or withdrawn for the year 2012-13; and, consequently, seven A-4 shops were being relocated under Rule 4 for drawal of lots. The petitioners are aggrieved by the said notification of ....

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....he successful applicant did not pay the license fee; the Government had increased the price of liquor on more than three occasions without changing the percentage of margin allowed to the retailer on the purchases made from Andhra Pradesh Beverages Corporation Limited ('APBCL' for short); as the margin was fixed on the issue price, there would be no change in the profit margin of the licensees; because of the increase in price, the margin for the retailer had automatically increased, though there may not be a proportionate increase in sales; and, in such circumstances, it cannot be said that the gazette notification issued by the respective District Collectors are illegal, arbitrary and contrary to the provisions of the A.P. Excise Act; and, in similar circumstances, this Court had, by its order in W.P.No.22095 of 2013 dated 25.09.2013, held that relocation of an A-4 shop, at a place where the turnover is 14 times, cannot be said to be arbitrary or in violation of Article 14 of the Constitution of India. In the additional counter-affidavit, filed on behalf of the Commissioner, it is stated that 110 A-4 shops had crossed the turnover of 14 times and above throughout the Sta....

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....sekhar Rao, Learned Counsel appearing on behalf of the petitioners. Learned Government Pleader for Prohibition and Excise presented his arguments on behalf of the State Government. Written arguments have also been filed. The rival contentions, urged by Counsel on either side, are dealt with hereinafter under different heads. I. RULE 4 AS AMENDED AND NOTIFIED IN G.O.MS. NO.357 DATED 22.06.2013 : ITS SCOPE: It is contended on behalf of the petitioners that the 2012 Rules do not confer any power on the Commissioner to transfer A-4 shops fixed for a particular area/locality to another; no material has been placed before the Court to show whether the "public order" requirement of Rule 4 is satisfied; and opening new shops would create law and order problems. The Andhra Pradesh Excise Act is an Act intended to raise and secure revenue to the State without, at the same time, sacrificing the public interest involved in the regulation of trade in intoxicants. Administration of the Act is, therefore, vested primarily and centrally in the Commissioner of Excise. The fixation of the number of shops, their location, and grouping are considered by the legislative delegate to be matters of suc....

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....locality; and, on a combined reading of Rules 3, 4 and 5, it was clear that the lease of the right to sell Indian Liquor and Foreign Liquor by shop by way of public auction can be granted only in respect of the shops fixed by the Commissioner in the particular area/locality identified by him, and in no other area/ locality. In G. Venkatesh4, this Court held that there is no provision under the Shop Rules permitting shifting of the shop even by the Commissioner from one mandal/municipality to another; if any of the shops are not disposed of, it is for the APBCL to sell liquor at the said outlet in the notified area; if the respondents are permitted to relocate the shop it would result in unhealthy competition as a result of the shops being relocated from an area where there are lesser sales to another area where there are higher sales; the location and upset price has been notified so as to enable the auction purchasers to take into account all relevant factors and offer their bids; and there is no justification in relocating un-disposed shops to some other mandal or locality. Both in Arji Sankara Rao3, and in G. Venkatesh 2005(6) ALD 514, the rules under consideration were the A.P.....

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....ence was either granted or renewed for an A-4 shop in the Excise year 2013-14. Undertaking such an exercise would be futile. As no one had sought licences in such areas/location in the first place, they are not likely to seek licences for the undisposed shops relocated to the same area/locality. The construction sought to be placed by the petitioner would render the very amendment of Rule 4 meaningless. Reading any limitation on the power conferred by the amended Rule 4, to relocate an un-disposed A-4 shop only within the district in which it was originally fixed, would also require this Court to read the words "to an area/locality within the district" into the amended Rule 4. A construction which requires, for its support, addition or substitution of words, or which results in rejection of words, has to be avoided. (Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests AIR 1990 SC 1747, Shyam Kishori Devi v. Patna Municipal Corpn AIR 1966 SC 1678, A. R. Antulay v. Ramdas Sriniwas Nayak (1984 (2) SCC 500, Dental Council of India v. Hari Prakash (2001)8 SCC 61, J. P. Bansal v. State of Rajasthan (2003)5 SCC (2002) 1 SCC 100 and State of Jharkhand v. Govind Singh (2....

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....rmission was given by the Government, the Commissioner had requested the Deputy Commissioners of Prohibition & Excise, vide letter dated 08.07.2013, to provide information for relocation of the undisposed A-4 shops; a meeting with all the Deputy Commissioners were held on 11.07.2013 exclusively for the purpose of relocating the undisposed shops; the respective supervisory officers, monitoring affairs in the allotted districts, held deliberations with the respective Deputy Commissioners to decide about relocation of the undisposed shops strictly in accordance with Rule 4; during these discussions all the factors, envisaged under Rule 4, were considered; ultimately the field level officers had identified only 314 shops, from out of 1311 undisposed shops, for relocation all over the State; the Deputy Commissioners had submitted their proposals with specific remarks for relocation of the A-4 shops which were not disposed off; their proposals contained specific remarks with regards spatial gaps, to overcome the disqualifications under Rule 25, plugging unauthorised sale of I.D. liquor and to streamline the number of shops in a particular area/locality; they had pointed out that the shop....

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.... the amended portion of Rule 4 does not confer power to relocate undisposed shops from one district to another after the number of shops, for each district, has been fixed on the basis of the criteria laid down in Rule 4; no power is conferred on the authority to enhance the number of shops in the transferee district; transfer of a shop from one district to another defeats the population ratio, falls foul of Rule 16(1), and adversely affects the licensee as there cannot be more than one shop for the same population; and the number of shops, fixed in an area / locality at the time of the notification, cannot be increased subsequently under the guise of relocation. It is no doubt true that Rule 4 of the 2012 Rules confers power on the Commissioner to fix the number of shops to be established in an area/locality, and it is in exercise of this power that the Commissioner had, hitherto, fixed the number of shops in different areas/localities in the State. The relocation, sought to be made by way of the impugned notifications, is of undisposed shops hitherto fixed in a particular area/locality. As the power of the Commissioner to relocate an undisposed shop, from an area/locality to anot....

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....n un-disposed A-4 shop to an area/locality where an A-4 shop licence has already been granted. The meaning to be given to the words "area" or "locality" is, therefore, of no consequence. While the Excise Policy for 2013-14 places restrictions on relocation of an undisposed shop, from a higher population slab to a lower population slab, it does not prohibit an undisposed shop from being re-located in an area/locality where an A-4 shop is in operation. The population ratio of a village/municipality/municipal corporation is relevant only for fixation of the licence fee, and has no bearing on the relocation of an undisposed shop. The petitioners' contention that the number of shops fixed in an area/locality, when the notifications were issued in July, 2012, cannot be increased subsequently is not tenable as such a power inheres, under the amended Rule 4 of the 2012 Rules, in the Commissioner. V. DISTINCTION BETWEEN THE EXERCISE OF POWER UNDER THE AMENDED RULE 4 AND RULE 18: It is contended on behalf of the petitioners that the rule making authority was conscious of the difference between an "area" or "locality" as referred to in Rule 18(1), and the words "any where in the State....

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....ner by the amended Rule 4. Consequent to Rule 4 being amended, the Commissioner not only has the power to permit APBCL to open outlets anywhere in the State, he also has the power to relocate un-disposed A-4 shops from any area/locality as he thinks fit to another. VI. DISTINCTION BETWEEN SHIFTING OF AN A-4 SHOP IN TERMS OF RULE 28 AND RELOCATION OF AN UNDISPOSED A-4 SHOP IN TERMS OF THE AMENDED RULE 4: It is contended on behalf of the petitioners that the words "shifting" and "relocating" mean the same; relocation of shops under Rule 4 can only be in accordance with the proviso to Rule 28(3); and the very fact that the rule making authority has neither amended Rule 28(3), nor has the word "district" been used in Rule 4, can only mean that the words "area/locality" in Rule 4 covers an area within the same mandal, and not beyond. Rule 28 of the 2012 Rules empowers the Commissioner to permit a licensed premises to be shifted either within a notified area or beyond a notified area but within the same Mandal or Municipality or Municipal Corporation. Unlike Rule 28, which relates to a licensed premises (ie an A-4 shop for which the licence has been renewed for the Excise Year 2013-14....

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....s, to sell IMFL and FL in such shops, would be granted only to the local scheduled tribes. Section 4 of the Panchayats (Extension to the Scheduled Areas) Act, 1996 stipulates that, notwithstanding anything contained under Part IX of the Constitution, the Legislature of a State shall not make any law under that Part which is inconsistent with any of the features mentioned in the clauses thereunder. Clause [c] of Section 4 requires every village to have a Gram Sabha consisting of persons whose names are included in the electoral rolls for the Panchayat at the village level. Clause (d) provides that every Gram Sabha shall be competent to safeguard and preserve the traditions and customs of the people, their cultural identity, community resources and the customary mode of dispute resolution. Clause (m) (i) stipulates that, while endowing Panchayats in the Scheduled Areas with such powers and authority as may be necessary to enable them to function as institutions of self government, a State Legislature shall ensure that the Panchayats, at the appropriate level, and the Gram Sabhas are endowed specifically with the power to enforce prohibition or to regulate or restrict the sale and co....

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....f an un-disposed shop from a scheduled area to a non-scheduled area. VIII. THE AMENDED 2012 RULES CAME INTO FORCE ON ITS PUBLICATION IN THE A.P. GAZETTE ON 24.06.2013: Section 72(1) of the Act enables the Government, by notification, to make rules for carrying out all or any of the purposes of the Act. Section 2(23) of the Act defines "notification" to mean a notification published in the A.P. Gazette. There is no presumption that the public would be aware of subordinate legislation as soon as it is made. The principle that there can be no law that is not published or promulgated is as true a principle of justice and fair play as principles of natural justice. The idea that a person may be governed by a law that cannot be known by him because it is not published or promulgated is revolting to judicial conscience and civilised thought. (R. Narayana Reddy v. The State of A.P. by the Secretary, Home (1969) 1 AnWR 77). Before a law can become operative, it must be promulgated or published. It must be broadcast in some recognisable way so that all men may know what it is or, at the very least, there must be some special rule or regulation or customary channel by or through which such ....

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....ant fact and in the event of a statute speaking of a notification being published in the official gazette, it cannot but mean a notification published by authority of law in the official gazette. Once the Rules are published in the Official Gazette they shall be deemed to have been published, and to be effective. (Subhash Ramkumar Bind v State of Maharashtra (2003) 1 SCC 506 : AIR 2003 SC 269; M.K. Rajasekhar v. Government of A.P. 2012 (6) ALD 390). The amendment to the 2012 Rules, notified in G.O.Ms. No.357 dated 22.06.2013, was published in the A.P. Gazette on 24.06.2013 and, on such publication, the general public has been made aware of these Rules having been made. The amended 2012 Rules thus came into force on 24.06.2013. IX. HAS THE AMENDED RULE 4 BEEN GIVEN RETROSPECTIVE EFFECT? It is contended on behalf of the petitioners that, when licences were granted to them in the year 2012, there was no statutory rule or provision for relocation of an undisposed shop; even the renewal endorsement in the year 2013-14 does not refer to the possibility of relocation of other shops; licenses granted to the petitioners for the Excise year 2012-13, following the policy then in existence, ....

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....ot tenable. Reliance placed, on behalf of the petitioners, on State of A.P. v. Guntakal Toddy Tappers Coop. Society (1985) 3 SCC 360 is misplaced. In Guntakal Toddy Tappers Co-op Society (1985) 3 SCC 360, the Supreme Court held:- ".....The net position, therefore, is that upto September 30, 1982, under the original Rule 3 annual leases were being granted following public auction. A five year basis was adopted under the newly introduced proviso to Rule 3 in respect of Tappers Cooperative Societies but at the end of one year out of the term of five years, there was a reversal of the policy and annual settlements were again adopted. That again was changed and a three year basis was adopted at the end of the year. It gives us a very uneasy feeling that the State has dealt with the Tappers Cooperative Societies, with whom contracts had been entered into, in such a cavalier fashion. If the State's intention was really to earn more revenue and, with a view to protecting the interests of the State Exchequer, there was a deviation from the policy of settlement for five years with the Tappers Societies to the old scheme of one year, there could be no warrant for the adoption of a three ....

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....tractual rights with the State, without compensation; and this would result in violation of Articles 14, 300-A and 19(1)(g) of the Constitution of India as it would be in violation of Sections 17, 23, 28, 32 and 33 of the Act. Reliance placed, on behalf of the petitioners, on Bishambhar Dayal Chandra Mohan v. State of U.P., AIR 1982 SC 33: (1982) 1 SCC 39; State of M.P. v. Thakur Bharat Singh AIR 1967 SC 1170; Satwant Singh Sawhney v. Ramarathnam, Assistant Passport Officer, Government of India, New Delhi AIR 1967 SC 1836 and Smt Indira Nehru Gandhi v. Raj Narain AIR 1975 SC 2299, to contend that the State or its executive officers cannot interfere with the rights of others unless they can point to some specific rule of law which authorises their acts; the State or its officers may not, in the exercise of executive authority, without any legislation in support thereof, infringe the rights of citizens merely because the legislature of the State has the power to legislate in regard to the subject on which the executive order is issued; and every act done by the Government or by its officers must, if it is to operate to the prejudice of any person, be supported by some legislative aut....

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.... the State, after collecting the prescribed licence fee, no fetters can be placed, or an embargo imposed, on the privilege conferred on the licencees; the parting of exclusive privilege for consideration in such area/locality as the Commissioner may fix for sale by notification, and the licence granted over such an area, is an exclusive privilege granted to the contractor to the debarment of others from articulation in the said area, as a particular right or favour by law contrary to the general law, or else it is not a privilege much less an exclusive privilege granted under the Act; the State cannot claim a right over such an area/locality for granting further licences until the existing contract is terminated or expires by efflux of time; grant of exclusive privilege for an area creates a binding contract and a vested right in a licensee, to the exclusion of all others in the licensed area, for the excise year; the substantive right conferred on the petitioners under Section 17, on licenses being granted in their favour, was renewed during the current year under Rule 21; this substantive right is affected, in terms of sales, on undisposed shops being relocated in their area, cau....

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....e words "Exclusive Privilege", used in Section 17(1) of the Act, mean? The word "Exclusive" is defined in "Law Lexicon of Ramanatha Iyer" to mean possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment, undivided, sole(as exclusive) possession; not including, admitting or pertaining to any other; opposed to inclusive, not to be taken in to account. In Blacks Law Dictionary, the word "exclusively" is shown to have multiple nuances or shades of meanings such as only or solely or substantially all or for the greater part. It also means to the exclusion of all others. (CBI v. Braj Bhushan Prasad (2001) 9 SCC 432; Anoka County v. City of St. Paul 1999 American Law Reports 1137). The word "Privilege", as commonly used in its broad and commonly accepted sense, means a particular advantage or a personal benefit or favour and a private or personal favour enjoyed. It also means a particular and peculiar benefit or advantage enjoyed by a person beyond the common advantage of other citizens; and some particular right or favour granted by law contrary to the general rule. The doctrine of Noscitur a sociis (meaning of a word should be known from its accompanyi....

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....f the 2012 Rules makes these rules applicable for grant of licence for selling IMFL and FL in retail by shop, the conditions governing such licence, and the transport of IMFL and FL by such licence holders. The Rules, subject to which exclusive privilege was granted to the petitioners for the Excise Year 2013-14 (i.e, from 01.07.2013 to 30.06.2014), are the 2012 Rules as amended by G.O.Ms.No.357 dated 22.06.2013. The conditions imposed by the Government, to which the exclusive privilege granted to the petitioners are subject to, are those stipulated in the Excise Policy for the year 2012-13 as notified in G.O.Ms.No.390 dated 18.06.2012, and for the Excise Year 2013-14 as notified in G.O.Ms.No.358 dated 22.06.2013. The power conferred on the Commissioner, under Rule 4 of the Rules, is subject to such directions which the Government may issue from time to time. Para 5 of the Excise Policy, formulated by the Government for the Excise year 2012-13, stipulates that the number of retail shops shall be retained at the present level i.e., 6596. The Commissioner was, therefore, not entitled to increase the total number of retail shops in the State beyond the 6596 shops fixed by the Governm....

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....nt of exclusive privilege subject to Section 28, the Rules made in this behalf and the conditions which the Government may deem fit to impose, the petitioners cannot claim exclusive privilege either under Section 17 or Section 23 of the Act contrary to the amended 2012 Rules and the Excise Policy for the year 2013-14. XII. STATUTORY RULES ARE PRESUMED TO BE CONSTITUTIONALLY VALID: It is contended, on behalf of the petitioners, that the power to make rules can only be exercised to make rules consistent with the Act and not contrary thereto; relocation of shops from one district to another, and from one zone to another, is ultra-vires Rule 4 as it is not in relation to an "area" or a "locality"; and any unreasonable rule or condition, in the excise contract licence, is ultra vires the Act. It is no doubt true that the power of delegated legislation can be exercised to give effect to, and must be in conformity with, the provisions of the Act. (Kerala Samsthana Chethu Thozhilali Union34). The vires of the amended Rule 4 of the 2012 Rules has not been subjected to challenge in this batch of Writ Petitions. Judicial restraint is in order while judging the constitutional validity of st....

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....gent and convincing evidence, for there is a presumption that every factor which is relevant or material has been taken into account in formulating the classification. (State of U.P. v. Kartar Singh AIR 1964 SC 1135; K.B. Nagur v. Union of India (2012) 4 SCC 483; Nagaland Senior Govt. Employees Welfare Assn.49). The action of governmental authorities must be presumed to be reasonable and in public interest and the person assailing it must plead and prove the contrary. (Fertilisers and Chemicals Travancore Ltd. v. Kerala SEB (1988) 3 SCC 382; Nagaland Senior Govt. Employees Welfare Assn.49). Courts must be slow to embark upon an unnecessary, wide or general enquiry, and confine their decision within the narrow limits required on the facts of a case. Decisions, on questions of constitutionality, should not be taken unless such adjudication is unavoidable; and the policy of strict necessity must be followed in disposing of a constitutional issue. (K.B. Nagur53). XIV. IS THE ACTION OF THE COMMISSIONER, IN RELOCATING UNDISPOSED A-4 SHOPS TO AREAS WHERE THE PETITIONERS SHOPS ARE LOCATED, DISCRIMINATORY? It is contended that the petitioners have been discriminated against as the A-4 sho....

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....s Assn. v. State of T.N. (2013) 2 SCC 772). Classification must be truly founded on substantial differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved. (State of Maharashtra v. Indian Hotel & Restaurants Assn. (2013) 8 SCC 519; State of Jammu and Kashmir v. Shri Triloki Nath Khosa (1974) 1 SCC 19). To pass the test of permissible classification two conditions must be fulfilled, namely, (i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (ii) the differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases. What is necessary is that there must be a nexus between the basis of classification and the object of the provision under consideration. (Indian Hotel & Restaurants Assn.60; Budhan Choudhry v. State of Bihar AIR 1955 SC 191). Rule 16(9) of the 2012 Rules required a licensee to pay privilege fee at 8%, plus applicable Value Ad....

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....fied in seriatum; a chronological order should have been followed, and shops should have firstly been relocated in areas where the turnover is the highest; leaving big mandals, and proceeding against smaller ones, violates Article 14 of the Constitution of India; and if the State intends to raise revenue, and dispose of un-disposed shops, they should reduce the basis of the number of times turnover; are not tenable. Classification, to be valid under Article 14, need not necessarily fall within an exact or a scientific formula for exclusion or inclusion of persons or things. There is no requirement of mathematical exactness or for doctrinaire tests to be applied for determining the validity, as long as it is not palpably arbitrary. (Indian Hotel & Restaurants Assn.60; Ram Krishna Dalmia v. S.R. Tendolkar AIR 1958 SC 538; Welfare Association, A.R.P. v. Ranjit Pl.Gohili AIR 1958 SC 538; Shashikant Laxman Kale v. Union of India (1990) 4 SCC 366). So long as there is a nexus between the basis of classification and the object sought to be achieved, the classification is valid. (The State of Madhya Pradesh v. Gopal D. Tirthani (2003) 7 SCC 83). The test ought not to be what would be a &#3....

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....etary, P & E Dept. 2002 (1) MLJ 627). In the additional counter- affidavit, the allegation that the respondents had not notified some places where the cumulative value of purchases is more than that of the place of the petitioners is denied. The respondents state that at Munugodu the two A-4 shops, notified and disposed of for the year, had recorded a turnover of 18.5 and 7.14 times respectively on their licence fee for the year 2012-13; the average turnover of Munugodu village was 12.93 times and, as such, no shop was proposed for relocation at Munugodu; in Valigonda the two A-4 shops had recorded an average turnover of 23.36 times during 2012-13, and hence one more A-4 shop was notified thereat to which as many as 33 applications had been received, and the said shop has been disposed of in the present notification. XV. IS EXERCISE OF POWER BY THE COMMISSIONER, TO RELOCATE UNDISPOSED A-4 SHOPS TO PLACES WHERE THE PETITIONERS SHOPS ARE SITUATED, SO UNREASONABLE AND ARBITRARY AS TO VIOLATE ARTICLE 14 OF THE CONSTITUTION? It is contended, on behalf of the petitioners, that "requirement" under Rule 4 can be assessed only after taking sales into consideration; the impugned decision t....

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....the citizens, for the said purpose, by charging fees. This can be done under Article 19(6), or even otherwise, as the State can impose limitations and restrictions, on the trade or business in potable liquor as a beverage, which are in their nature different from those imposed on the trade or business in goods and articles which are res commercium. (R. Selvaraj68; Khoday Distilleries Ltd33). Privilege can be claimed by a State in a "no-right" situation, namely, when a citizen is not permitted to carry on trade. However persons in whose favour licences have been granted, in terms of a statutory enactment, derive a right to deal in liquor. (Devans Modern Breweries Ltd.,2). While the power to relocate an un-disposed shop may well be unfettered save population - slab restrictions, it cannot be exercised by the Commissioner at his mere whim or fancy. The power conferred by legislation - plenary or subordinate - must be exercised reasonably and should be informed by reason. Article 14 of the Constitution would be attracted even in the matter of trade in liquor. (Kerala Samsthana Chethu Thozhilali Union34; V.K. Ashokan v. Assistant Excise Commissioner (2009) 14 SCC 85). The State can, for....

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.... (Nandlal Jaiswal75; R. Selvaraj68). While the Excise policy for 2013-14 prohibits relocation of an undisposed A-4 shop from a higher population slab to a lower population slab, the Commissioner has confined exercise of his power under the amended Rule 4, to relocate A-4 shops which remained undisposed in an area/locality, only to those areas/localities where the existing A-4 shops achieved a turnover of 14 times or more the annual license fee in the earlier Excise year 2012-13 thereby striking a balance between augmenting State revenue and ensuring a reasonable return on investment for both the existing A-4 shop and the relocated undisposed A-4 shop. The amended Rule 16(9), in levying privilege fee at 8% plus VAT only on purchases from APBCL in excess of seven times the annual license fee, presumes that a turnover of seven times the annual license fee is a reasonable return on investment. It is only if this Court were to be satisfied that the exercise of power by the Commissioner is so unreasonable, as to violate Article 14, would interference be justified. The concept of 'reasonableness' defies definition. The functional and conceptual implication of the term 'reaso....

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....ly according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. If the decision is within the confines of reasonableness, it is no part of the court's function to look further into its merits. 'With the question whether a particular policy is wise or foolish the court is not concerned; it can only interfere if to pursue it is beyond the powers of the authority." (Sterling Computers Ltd. v. M & N Publications Ltd. (1993) 1 SCC 445; Administrative Law, Prof. Wade). Article 14 cannot be interpreted in a doctrinaire or dogmatic manner. Excessive interference by the judiciary in the functions of the executive is not proper. In view of the inherent complexities involved in modern society, some free play must be given to the executive. (Transport and Dock Workers Union v. Mumbai Port Trust (2011) 2 SCC 575; Missouri, Kansas and Texas Railway Co. v. May 48 L Ed 971; Aravali Golf Club v. Chander Hass (2008) 1 SCC 683). While fair play in action is an essential requirement, "free play in the joints" is also a necessary concomitant for an administrative b....

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.... licence fee for the Excise Year 2013-14, cannot be heard to complain of loss of competitive edge as they have already earned a reasonable return on their investment, in terms of Rule 16(9), even before completion of 3/4th of the said Excise Year. Any reduction in the price, at which the relocated A-4 shops would sell IMFL and FL till they achieve a turnover of seven times the proportionate license fees paid by them, would only benefit consumers. Permitting APBCL to open outlets, in areas where the A-4 shops could not disposed of, may not help the State in enhancing its revenues as the very fact that no one came forward to seek licences in such areas reflects low consumption of IMFL and FL thereat. The contention that the decision of the Commissioner, to relocate undisposed A-4 shops to areas/localities in which the petitioners were granted renewal of their licences, is arbitrary and in violation of Article 14 must therefore fail. XVI. DOES PRINCIPLES OF NATURAL JUSTICE NECESSITATE COMPLIANCE BEFORE AN UNDISPOSED A-4 SHOP IS RELOCATED? It is contended, on behalf of the petitioners, that the decision of Commissioner, to relocate some other undisposed shop into the area of the pet....

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.... of the statute or by necessary intendment. (Swadeshi Cotton Mills v. Union of India (1981) 1 SCC 664; Tulsiram Patel87). The power conferred on the Commissioner, under the amended Rule 4, is to relocate undisposed A-4 shops from any area/locality as he thinks fit. The wide discretion conferred on the Commissioner neither explicitly, nor by necessary implication, requires compliance with principles of natural justice before its exercise. Undisposed A-4 shops have been relocated by the Commissioner in the exercise of his powers under Rule 4 of the amended 2012 Rules. Legislative action, plenary or subordinate, is not subject to natural justice. Subordinate legislation cannot be questioned on the ground of violation of principles of natural justice on which administrative action may be questioned. (Tulsipur Sugar Co. Ltd. v. Notified Area Committee, Tulsipur (1980) 2 SCC 295 Rameshchandra Kachardas Porwal v. State of Maharashtra (1981) 2 SCC 722; Madras City Wine Merchants' Assn.76; Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India (1985) 1 SCC 641 Bates v. Lord Hailsham of St Marylebone (1972) 1 WLR 1373). Even otherwise the grant of licence to trade in liquor is t....

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....he population, as per the 2011 Census, of the places (Corporation/Municipality/Town/Village) for the year 2013-14. Para 2 of the said Excise Policy, while permitting the Commissioner of Prohibition and Excise to relocate un-disposed A-4 shops from any locality/area as he thought fit, prohibited him from relocating such A-4 shops from a higher licence fee slab to a lower licence fee slab. Para 3 prescribed the method of selection, for grant of licences for the un-disposed shops, to be by drawal of lots. Under Para 5, the total number of retail shops in the entire State was retained at 6596. The licence fee, stipulated under para.8 of the Excise Policy for the year 2013-14 for different population slabs, is the same as stipulated in the earlier Excise Policy for the year 2012-13. However the privilege fee, at the rate of 8% plus applicable VAT, was to be paid only where the invoice value of the liquor purchased by a licensee, during the excise year, was in excess of seven times the prescribed annual licence fee. The Excise Policies for the years 2012-13 and 2013-14 have been made by the Government to enhance State revenue. This Court would not, ordinarily, examine in judicial review ....

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....on was in excess of 20 Lakhs, to an area where the population is 10,000 or less. Save this restriction the power conferred on the Commissioner, by the amended Rule 4 to relocate un-disposed A-4 shops, is unfettered. From the counter-affidavit filed on behalf of the respondents it is evident that as many as 617 shops were not disposed of, inspite of repeated notifications, during the Excise year 2012-13; a notification was issued for disposal of these 617 shops during the Excise year 2013-14; applications in respect of 76 shops were received and disposed of, leaving 541 shops undisposed; as against 5979 shops, for which licenses were granted for the year 2012-13, licenses for only 4,986 shops were renewed for the year 2013-14; 993 shops were left unrenewed; at the end of the first round of notifications for the year 2013-14, 1610 shops remained undisposed; 215 shops were disposed of in the second round, leaving 1,395 shops undisposed for the year 2013-14; after repeated notifications, another 225 shops were disposed of; and 1,170 shops are yet to be disposed off even after seven rounds of notifications. The revenue which the State expected to generate was by collection of the prescr....

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....gistrate) v. Raja Ram Jaiswal (1985) 3 SCC 1, Delhi Admn. v. Manohar Lal (2002) 7 SCC 222 and N.D. Jayal v. Union of India (2004) 9 SCC 362; NOIDA Entrepreneurs Assn. v. NOIDA (2011) 6 SCC 508). The Court can interfere only if the decision taken by the authority is found to be arbitrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and is not taken in public interest. A claim based on mere legitimate expectation, without anything more, cannot ipso facto give a right to invoke these principles. (Jasbir Singh Chhabra97). The mere reasonable or legitimate expectation of a citizen may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises....

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....jab Communications Ltd. v. Union of India (1999) 4 SCC 727, Chanchal Goyal (Dr.) v. State of Rajasthan (2003) 3 SCC 485, J.P. Bansal v. State of Rajasthan (2003) 5 SCC 134, State of Karnataka v. Umadevi (2006) 4 SCC 1, Kuldeep Singh v. Govt. of NCT of Delhi (2006) 5 SCC 702, Ram Pravesh Singh v. State of Bihar (2006) 8 SCC 381 and Sethi Auto Service Station v. DDA (2009) 1 SCC 180; Union of India v. Hindustan Development Corpn (1993) 3 SCC 499; Jasbir Singh Chhabra97). Neither the Government nor the Commissioner have promised the petitioners that they would make profits from their business, of trading in liquor, for the Excise Year 2013-14. The doctrine of legitimate expectation arises only in the field of administrative decisions. If the plea of legitimate expectation relates to procedural fairness there is no possibility of invoking the doctrine as against legislation - plenary or subordinate. If there is a change in policy, or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise. (Madras City Wine Merchants' Assn.76). The doctrine of legitimate expectation plays no role when the appropriate authority is empow....

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....guaranteed the petitioners, either under the Act or the amended 2012 Rules or the Excise Policy for the year 2013-14, a specified sum as profit or a fixed return on their investment. In contracts entered into between the State and its citizens, pursuant to an auction, the State does not guarantee a profit to the licensees. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. There is no warranty against incurring losses. It is a business for the licensees. Whether they make profit or incur loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more to the State in case they make substantial profits. (Asstt. Excise Commr. v. Issac Peter (1994) 4 SCC 104; Devans Modern Breweries Ltd.,2). The right to carry on business, more so in the sale of liquor which is Res extra commercium, does not carry with it any obligation on the State to guarantee the licensees a particular rate of return on their investment. Any person carrying on business may earn huge profits, or may suffer extensive losses. Neither does the State promise a businessman that it would make good the lo....

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....ory power partakes a quasi-judicial complexion. In the exercise of such power, the authority cannot permit its decision to be influenced by the dictation of others as this would amount to abdication and surrender of its discretion. It would then not be the authority's discretion that is exercised, but someone else's. If an authority "hands over its discretion" to another body it acts ultra vires. Such interference by a person or body extraneous to the power is contrary to the nature of the power conferred on the authority. (State of U.P. v. Dharmander Prasad Singh AIR 1989 SC 997). In the counter-affidavit filed on behalf of the respondents it is stated that, after 21.08.2013, the respondents had issued four notifications notifying the un-disposed A-4 shops at their original places during which 89 shops were disposed; 1170 A-4 shops still remained un-disposed; in order to dispose of these un-disposed shops, a decision was taken to relocate the A-4 shops in a phased manner at places where the turnover of the existing A-4 shops was more than 14 times the licence fee; mandals, where there were no A-4 shops, were notified; all the Deputy Commissioners of Prohibition and Excise ....

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....s in the year 2013-14 as it is only a renewal; the petitioners cannot be precluded from questioning the jurisdiction of the District Collector merely because they were granted a similar benefit in the earlier year 2012-13; and the impugned notifications were issued by the District Collector, for re- location of the shops, without guidelines or norms or in accordance with the power contemplated under the Excise Act or the Rules. A. THE PROCEDURE PRESCRIBED BY STATUTORY RULES MUST BE STRICTLY ADHERED TO: When a procedure has been laid down, the authority must act strictly in terms thereof. (Taylor v. Taylor (1875) Ch.D.426)). If a statute has conferred a power to do an act, and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted. (State of U.P. v. Singhara Singh AIR 1964 SC 35; Dhanajaya Reddy v. State of Karnataka (2001) 4 SCC 9; Ramchandra Murarilal Bhattad v. State of Maharashtra (2007) 2 SCC 588; State of Gujarat v. Shantilal Mangaldas AIR 1969 S....

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....-blow cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of an order, he is estopped from denying the validity of, or the binding effect of, such an order upon himself. (Nagubai Ammal v. B. Shama Rao AIR 1956 SC 593; CIT v. V. MR. P. Firm Muar AIR 1965 SC 1216; Ramesh Chandra Sankla v. Vikram Cement AIR 2009 SC 713; Pradeep Oil Corpn. v. MCD AIR 2011 SC 1869; Cauvery Coffee Traders v. Hornor Resources (International) Co. Ltd. (2011) 10 SCC 420; V. Chandrasekaran v. Administrative Officer (20120 12 SCC (1998) 6 SCC 507; and Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470). A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn around and say it is void for the purpose of securing some other advantage. (Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. Ltd1 AIR 1967 SC 1836 31; Halsbury's Laws of England, 4th Edn., Vol. 16; R.N. Gosain v. Yashpal Dhir1 AIR 1975 SC 2299; P.R. Deshpande v. Maruti Balaram Haibatti1 (1995) 1 SCC 574). Si....

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....enewed for the Excise Year 2013-14. In the exercise of its discretionary jurisdiction under Article 226, it is open to the High Court to decline relief if the grant of relief would defeat the interests of justice or where the petitioner seeks to secure a dishonest advantage or perpetuate an unjust gain. (M.P. Mittal v. State of Haryana (1984) 4 SCC 371; Andhra Pradesh Wine Dealers Association v. Deputy Director of Income Tax (Investigation) 2005(4) Laws (APHC) 106). Permitting the petitioners, who are beneficiaries of similar notifications issued by District Collectors in the Excise Year 2012-13, to run A-4 shops for the Excise Year 2013-14, while at the same time setting aside the impugned notifications whereby others were granted licences for the relocated shops, would not only result in a premium being placed on the earlier illegal acts of the District Collectors but would also be against larger public interest. The jurisdiction of the High Court, under Article 226 of the Constitution, is extraordinary, equitable and discretionary, (K.D. Sharma v. Steel Authority of India Ltd (2008) 12 SCC 481), and should be exercised in the larger interest of justice. While granting relief i....