Full Judgment Text
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PETITIONER:
AMAR CHANDRA CHAKRABORTY
Vs.
RESPONDENT:
COLLECTOR OF EXCISE, GOVERNMENT OF TRIPURA & ORS.
DATE OF JUDGMENT03/05/1972
BENCH:
DUA, I.D.
BENCH:
DUA, I.D.
SIKRI, S.M. (CJ)
RAY, A.N.
PALEKAR, D.G.
BEG, M. HAMEEDULLAH
CITATION:
1972 AIR 1863 1973 SCR (1) 533
1972 SCC (2) 442
CITATOR INFO :
R 1975 SC 360 (22)
R 1975 SC1121 (46,53)
R 1980 SC 614 (15)
RF 1988 SC 771 (5)
RF 1990 SC1927 (28)
F 1991 SC 506 (9)
ACT:
Bengal Excise Act, 1909, s. 43--Withdrawal of
licence--Collector whether has power to withdraw licence to
sell liquor-Principle of ejusdem generis, application of-S.
43 whether violative of Ar. 14 of Constitution-Section
whether requires separate order withdrawing licence after
expiry of notice period-Show cause notice whether necessary-
Natural justice requirements of-S. 43 whether violates Art
19 of Constitution Grant of licence without public notice
under s. 22(1) of Act whether valid.
HEADNOTE:
The appellant was granted a licence on March 13, 1968 by the
Excise Collector to establish a warehouse for’ the storage
in bond and wholesale vend of country spirit by import and
for supply to the excise vendors in the territory of Tripura
for five years commencing April 1, 1968 and ending March 31,
1973. The mode of granting the licence was criticised by
the Committee of Estimates. As a result the Governor of
Tripura on July 2, 1970 inserted r. 164-A in the Tripura
Excise Rules of 1962 whereby fees for licence for the
wholesale vend of country spirit were required to be fixed
by tender-cum-auction. On July 6, 1970 the Excise Collector
exercising his power under s. 43 of the Bengal Excise, Act
1909 as extended to the Union Territory of Tripura withdrew
the licence granted to the appellant after 15 days’ notice
and remission of 15 days fee. The appellant challenged the
Excise Collector’s order in a petition under Art. 226 of the
Constitution. The Judicial Commissioner dismissed the
petition. Intr alia the Judicial Commissioner held that the
licence granted to the appellant was invalid because it was
granted without public notice as required by the proviso to
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s. 22(1) of the Act. In appeal by special leave it was
contended by the appellant that (i) the Collector had no
power to pass the impugned order; (ii) the words "any cause
other than" in s. 43 must be read ejusdem generis with the
causes in mentioned in s. 42; (iii) s. 43 was arbitrary and
violative of Art. 14 of the Constitution; (iv)the terms of
s. 43 had not been complied with; (v) the impugned order was
passed without a show cause notice and was against natural
justice; (vi) s. 43 being arbitrary imposed unreasonable
restrictions on the appellant’s right to carry on business.
HELD : (i) Under s. 22, Sub-s. (1) the Chief Commissioner is
no doubt given the power of granting the: exclusive
privilege of manufacturing and selling country liquor or
’intoxicating drugs as mentioned in clauses (a) to (e) but
subs. (2) of this section in express terms provides that no,
grantee of any privilege under sub-s. (1) shall exercise the
same unless or until he has received a licence in that be-
half from the Collector or the Excise Commissioner. In view
of this provision it is obvious that it is the Collector who
grants the licence
534
within the contemplation of s. 43 and therefore it was this
very officer who rightly granted the licence to the
appellant and is empowered to withdraw the licence under s.
43. [538 F-G]
(ii)The ejusdem generis rule strives to reconcile the
incompatibility between specific and general words. This
doctrine applies when (1) the statute contains an
enumeration of specific words; (2) the subjects ,of the
enumeration constitute- a class or category; (3) that class
or ,category is not exhausted by the enumeration; (4) the
general term follows the enumeration and (5) there is no
indication of a different legislative intent. In the
present case it was not easy to construe the various clauses
of s. 42 as constituting one category or class. But that .-
apart the very language of the two sections 42 and 43 and
the object intended to be achieved by them also, negative
any intention of the legislature to attract the rule of
ejusdem generis. Therefore the expression ’any cause other
than’ in s. 43(1) could not be considered ejusdem generis
with the causes specified in clauses (a) to (g) of 42(1).
[540 F-H]
(iii)Trade or business in country liquor has from its
inherent nature, been treated by the State and the society
as a special category requiring legislative control which
has been in force in the whole of India since several
decades. In view of the injurious effect of
excessive .consumption of liquor on health this trade or
business must be treated as a class by itself and it cannot
be treated on the same basis as other ’trades while
considering Art.. 14. [541 A-B]
(iv)The submission that a separate order withdrawing the
licence after the expiry of 15 days period from the order
dated July 6, 1970 was necessary could not be accepted.
Section 43 does not provide for ,any such procedure. All
that this section contemplates is that ever the authority
concerned considers that the licence should be withdrawn for
any cause other than those specified in s. 42 it may
withdraw the same but to do so it must remit a sum equal to
the amount of fees payable in respect of the licence for 15
days. It was not complained that this amount was not
remitted in the present case. [541 C--D]
(v)The order dated July 6, 1970 could not be attacked on the
ground that a show cause notice was not given. The contents
of this order show that the appellant had ample opportunity
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of showing cause against the intention of the Collector to
withdraw the licence from September 1, 1970. Rules of
natural justice vary with the varying constitutions of
statutory bodies and the rules prescribed by the legislature
,under which they have to act and the question whether in a
particular case the rules of natural justice have been
contravened must be judged not by any preconceived opinion
of what they may be but in the light ,of the relevant
statutory provisions. Applying this test the impugned order
could not be considered to violate any principle of natural
justice.
Gullapalli Nageswara Rao v. A.P. State Road Transport
Corporation, [1959] Supp. 1 S.C.R. 319 and K. K. Narula v.
State of J. & K., [1967] 3 S.C.R. 50 referred to.
(vi)It is no doubt true that in s. 43 there is no express
mention of the precise grounds on which a licence may be
withdrawn. But keeping in view ’the nature of the trade or
business for which the grant of licence under ’the Act is
provided the cause contemplated by s. 43 must be such as may
have reasonable nexus with the object of regulating this
trade or business in the general interest of the Public. In
535
the determination of reasonableness of restrictions on trade
or business regard must be had to its nature, the conditions
prevailing in it and its, impact on the society as a Whole.
Art. 47 of our Constitution directs the State to endeavour
to prohibit consumption of intoxicating drinks, and of drugs
which are injurious to health except for medicinal purpose.
The cause for withdrawing the appellant’s licence was in
terms of a major policy decision of the Tripura Government
and this was a cause which while keeping in view the purpose
and object of granting such. exclusive privileges and
licences could not be considered to be either irrelevant or
collateral to that purpose and object. [543 B-E]
K.K. Narula v. The State of J. & K. [1967] 3 S.C. R. 60,
referred to.
(vii)The public notice under s. 22(1) is a condition
precedent to the grant of the exclusive privilege of selling
liquor. The underlying policy of s. 22 seems to be not to
allow such an important matter to. be decided in the secrecy
of office without giving it publicity. Failure to give such
public notice was therefore rightly considered by the
Judicial Commissioner to be fatal to the grant of the
exclusive privilege to the appellant. [544 G-545 A]
The appeal must accordingly be dismissed.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1063 of 1971.
Appeal by special leave from the judgment and order dated
June 25, 1971 of the Court of Judicial Commissioner for
Tripura in Civil Matter No. 2 of 1970.
A. K. Sen and D. N. Mukherjee, for the appellant.
Govind Das and S. P. Nayar, for the respondents.
The Judgment of the Court was delivered by
Dua, J. This appeal is by special leave. The appellant
assails the order of the Judicial Commissioner, Tripura
dated June 25, 1971 dismissing his petition under Art. 226
of the Constitution challenging the order of the Collector
of Excise, Tripura, dated July 5, 1970.
The appellant was granted licence for the period April 1,
1963 to March 31, 1966 for running a warehouse for supply of
country liquor to excise vendors in the territory of
Tripura. The Bengal Excise Act, 1909 (hereinafter called
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the Act) had been extended to that territory on August 1,
1962. The appellant’s licence was subsequently extended for
a further period of two years ending March 31,,1968. On
November 6, 1967 the appellant applied to the Excise
Collector praying that he should be permitted to continue
the supply of country liquor for a period of five years
commencing April 1, 1968. The Collector recommended the
appellant’s case to the Government on November 18, 1967 for
extension of his licence for a further period of only two
years. On
536
December 22 1967 the Collector of Excise, Tripura, Agartala
wrote to the appellant that he had been appointed by the
Chief Commissioner a contractor for the supply of country
liquor to the excise vendors for the territory of Tripura
for five years i.e., from 1-4-68 to 31-3-73 at the existing
rate i.e., Rs. 2.25 only being the cost of one L.P. litre of
country liquor of 40 U.P. strength for sale to the excise
vendors" of that territory from the Central Warehouse at
Agartala. On ’January 13, 1963 the appellant was asked by
the Collector of Excise to deposit Rs. 1,000/as security and
Rs. 2,500/- as licence fee for five years at the rate of Rs.
5001- per year. On March 13, 1968 the appellant was
accordingly granted a licence to establish a warehouse for
the storage in bond and wholesale vend of country spirit by
import and for supply to the excise vendors in the territory
of Tripura for five years commencing April 1, 1968 and
ending March 31, 1973. It was granted by the Excise
Collector.
The Committee of Estimates in their Fifth Report about the
working of Excise Department in the territory of Tripura in
general and about the procedure adopted in giving contract
to the appellant for a period of five years from 1968 to.
1973 in particular made some adverse observations critic
sing the method of appointment by means of selection because
this method according to the report, left loopholes for
corruption. As a result of this report the Lt. Governor of
Tripura on July 2, 1970 inserted r. 164-A in the Tripura
Excise Rules of 1962 in exercise of the power conferred by
s. 86 of the Act. According to the now rule, fees for
licence for the wholesale vend of country spirit were
required to be fixed by tender-cum-auction. On July 6, 1970
the Excise Collector issued the following order to the
appellant :
"GOVERNMENT OF TRIPURA
OFFICE OF THE COLLECTOR OF EXCISE
No. 810/DM/EX/5(19)/70-71 dated, Agartala the
6-7-1970
Whereas it has been decided by the Government of Tripura
that the licenses for the wholesale of country spirit shall
hence forwards be granted by the method of tender-cum-
auction and to different persons for different specified
areas as far as practicable, instead of the present system
of selection of one licensee for the whole territory of
Tripura, in the interests of excise revenue.
And whereas 1, Sri Omesh Saigal, Collector of Excise,
Tripura consider that for the aforesaid reason the license
no. 1 dated the 13th March, 1968 issued to
Sri Amar Chandra Chakraborty for the wholesale
vend
537
of Country spirit in the Union Territory of Tripura for
the, period from the 1St April, 1968 to 31 St March, 1973
should be withdrawn.
Now, therefore, in exercise of the powers conferred on me
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under Section 43 of the Bengal Excise, Act, 1909, as
extended to the Union Territory of Tripura,
remit a sum of Rs. 20.84 equal to the amount
of the fees payable in respect of the said
license for 15 days and hereby give the
licensee 15 days’ notice of my intention to
withdraw the said license and order that the
said license be withdrawn with effect from 1st
September, 1970.
Any fee paid in advance or deposit made by the licensee in
respect thereof shall be refunded to him after deducting the
amount, if any due to the Government.
Sd/- Omesh Saigal
5-7-70
Collector of Excise."
Feeling aggrieved the appellant challenged this order in the
court of the Judicial Commissioner by means of a writ
petition under Art. 226 of the Constitution which was
dismissed by the impugned order.
The order of the Collector dated July 6, 1970 was challenged
by the appellant on a number of grounds, including
invalidity of s. 43 of the Act and r. 164A of the Rules
framed thereunder. The learned Judicial Commissioner in an
exhaustive order came to the conclusion that the appellant
had been given a contract for five years on the basis of his
application dated November 6, 1967 without issuing a public
notice as required by the proviso to S. 22(1) of the Act.
This violation of the statutory provision invalidated the
contract or the privilege of selling country liquor secured
by the appellant. According to the Judicial Commissioner
this ground by itself was enough for throwing out of the
appellant’s writ petition. The contention that s. 43 of the
Act does not envisage withdrawal by the Collector of the
licence pertaining to, the privilege granted by the Chief
Commissioner of Tripura under s. 22 of the Act was also
negatived by the Judicial Commissioner as in his opinion the
Collector who had issued the licence was fully competent to
withdraw the same. Similarly challenge to the cons-
titutionality of s. 43 of the Act was repelled and it was
held that this section merely imposes reasonable
restrictions in the matter of trade in liquor. The argument
that 15 days’ notice as contemplated by s. 43 of the Act had
not been given was also rejected because in the Judicial
Commissioner’s opinion notice had actually been given to the
appellant but he had not cared to avail of it as
538,
he never approached against the action withdrawing the
licence. Rule 164A was held to be intra vires and within
the terms of s. 86 of the Act.
In this Court the principal contention raised by Shri A. K.
Sen, on behalf of the appellant, is that s. 43 of the Act
contemplates a show cause notice which has not been given
and that in any event this section clothes the authority
granting the licence with unguided and uncanalised power to
withdraw the licence and is, therefore, violative of Art. 14
and also Art. 19 of the Constitution as it encroaches on the
appellant’s fundamental right of carrying on trade or
business.
Shri Sen further submitted that the authority granting the
licence was the Chief Commissioner but the order dated July
6, 1970 was issued by the Collector of Excise. The order
withdrawing the licence, according to the learned counsel
could only be made by the authority granting the licence and
that too after the expiry of 15 days. The counsel added
that withdrawal of licence virtually amounts to its
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forfeiture with the result that the provisions dealing with
such withdrawal calls for a strict construction.
The contention that the authority granting the licence was
the Chief Commissioner and, therefore, the notice issued by
the Collector of Excise is bad, cannot be accepted. The
licence dated March 13, 1968 was issued from the office of
the Collector of Excise, Agartala and was signed by that
officer. Even in the appellant’s writ petition in para 15
there is an express averment that the licence dated March
13, 1968 had been issued under the signatures of the
Collector of Excise, Tripura. No doubt, it is added in the
same paragraph that the Collector is not the authority to
exercise power under s. 43 of the Act but this submission
has not been substantiated at the bar and is contrary to the
statutory provisions. Under s. 22, sub-s. (1), the Chief
Commissioner is no doubt given the power of granting the
exclusive privilege of manufacturing and selling country
liquor or intoxicating drugs as mentioned in cls. (a) to (e)
but sub-s. (2) of this section in express terms provides
that no grantee of any privilege under sub-s. (1) shall
exercise the same unless or until he has received a licence
in that behalf from the Collector or the Excise Commis-
sioner. In view of this provision it is obvious that it is
the Collector who grants the licence within the
contemplation of s. 43 and, therefore, it was this very
officer who rightly granted the licence to the appellant and
is empowered to withdraw the licence under s. 43.
As sec. 43 provides for withdrawal of a licence for any
cause other than those specified in s. 42 of the Act we
consider it proper to reproduce both these sections. They
read
539
"42. Power to cancel or suspend license, permit or
pass.
(1)’ Subject to such restrictions as the Chief Commissioner
may prescribe, the authority who granted any license, permit
or pass under this Act may cancel or suspend it-
(a) if it is transferred or sublet by the holder thereof
without the permission of the said authority; or
(b) if any duty or fee payable by the holder thereof be not
duly paid; or
(c) in the event of any breach by the holder thereof, or by
any of his servants, or by any one acting on his behalf with
his express or implied permission, of any of the terms or
conditions thereof; or
(d) if the holder thereof is convicted of any offence
punishable under this Act or any other law for the time
being in force relating to revenue, or of any cognizable
and. non-bailable offence, or of any offence punishable
under the Dangerous Drugs Act, 1930, (II of 1930), or under
the Trade and Merchandise Marks Act, 1958 (43 of 1958), or
under any section which has been introduced into the Indian
Penal Code by Section 3 of that Act (Act XLV of 1860); or
(e) if the holder thereof is punished for any offence
referred to in clause 8 of section 167 of the Sea Customs
Act, 1878 (VIII of 1878); or
(f) where a licence, permit or pass has been granted on the
application of the holder of an exclusive privilege granted
under section 22, on the requisition in writing of such
holder; or
(g) if the conditions of the license, permit or pass:,.
provide for such cancellation or suspension at Will.
(2), When a license permit or pass held by any person Is
cancelled under clause (.a), clause (b), clauser (c),
clause’ (d) or clause (e) of sub-section (1) the authority
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aforesaid may cancel any other licence, permit or pass
granted to such person by, or by the authority of" the Chief
Commissioner under this Act, or ’under the Opium Act, 1878
(1 of 1878). ,1286Sup.Cl/72
540
(3)The holder of a license, permit or pass shall not be
entitled to any compensation for its cancellation or
suspension under this section, or to the refund of any fee
paid or deposit made in respect thereof.
43.Power to withdraw licenses.-(1) Whenever the authority
who granted any license under this Act considers that the
license should be withdrawn for any cause other than those
specified in section 42, it shall remit a sum equal to the
amount of the fees payable in respect thereof for fifteen
days, and may withdraw the license either-
(a) on the expiration of fifteen days’ notice in writing of
its intention to do so, or
(b) forthwith, without notice.
(2) If any license be withdrawn under clause (b) of
sub-section (1), the said authority shall, in addition to
remitting such sum as aforesaid, pay to the licensee such
further sum (if any), by way of compensation, as the Excise
Commissioner may direct.
(3)When a license is withdrawn under sub-section (1), any
fee paid in advance, or deposit made by the licensee in
respect thereof shall be refunded to him after deducting the
amount (if any) due to the Government."
Before dealing with the contention relating to Art. 19 we
consider it proper to dispose of the argument founded on the
ejusdem generis rule and Art. 14 of the Constitution. It
was contended by Shri Sen that the only way in which s. 43
can be saved from the challenge of arbitrariness is to
construe the expression "any cause other than" in s, 43(1)
ejusdem generis with the causes specified in cll. (a) to (g)
of s. 42 (1). We do not agree with this submission. The
ejusdem generis rule,strives to reconcile the
incompatibility between specific and general words. This
doctrine applies when (i) the statute contains an
enumeration of specific words; (ii) the subjects of the
enumeration constitute a class or category-, (iii) that
class or category is not exhausted by the enumeration; (iv)
the general term follows the enumeration and (v) there is no
indication of a different legislative intent. In the
present case. it is not easy to construe the various clauses
of S. 42 as constituting one category or class. But that
apart, the very language of the two sections and the objects
intended respectively to be achieved by them also negative
any intention of the legislature to attract the rule of
ejusdem generis.
Trade or business in country liquor has from its inherent
nature been treated by the State and the society as a
special category
541
requiring legislative control which has been in force in the
whole of India since several decades. In view of the
injurious effect of excessive consumption of liquor on
health this trade or business must be treated as a class by
itself and it cannot be treated on the same basis as other
trades while considering Art. 14. this classification is
founded on an intelligible differentia having a rational
relation to the object to be achieved by the control imposed
on the trade or business in country liquor. Art. 14, it may
be pointed out, only forbids class legislation but
reasonable classification does not come within the
prohibition. Nothing convincing was urged at the bar to
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attract the prohibition embodied in Art. 14.
The submission that a separate order withdrawing the licence
after the expiry of 15 days’ period from the order dated
July 6, 1970 was necessary has also not appealed to us.
Section 43 does not provide any such procedure. All that
this section contemplates is that whenever the authority
concerned considers that the licence should be withdrawn for
any cause other than those specified in s. 43 it may
withdraw the same but to do so it must remit a sum equal to
the amount of fees payable in respect of the licence for 15
days. It is not complained that this amount was not
remitted as required. Now if the licence is withdrawn under
s. 43 (1 ) (a) on the expiration of 15 days’ written notice
of the authority’s intention to do so then nothing further
need be done. It is only when the licence is desired to be
withdrawn forthwith without notice as contemplated by s. 43
(1 ) (b) that the authority is under a further obligation to
pay compensation as may be directed by the Excise
Commissioner. Here the licence stood withdrawn on September
1, 1970 as stated in the intimation contained in the order
dated July 6, 1970. That intimation fully complies with the
provisions of s. 4 3.
The argument that no show cause notice was given to the
appellant before withdrawing the licence is equally.
unacceptable for reasons just stated. The section does not
contemplate two separate notices. The order dated July 6,
1970 also clearly state, that 15 days’ notice was being
given to,’the licensee regarding the intention of the
Collector of Excise to withdraw his licence and it is also
specifically mentioned in the order that the said licence
would be withdrawn with- effect from September 1, 1970. The
fact that tinder the notice the licence was to be withdrawn
more than 15 days after the date of the notice did not
cause the appellant any prejudice and indeed no objection
was raised on this score. The contents of this order also
quite clearly show that the appellant had ample opportunity
of showing- cause against the intention of the Collector to
withdraw the licence with effect from September 1, 1970.
Rules of natural justice on which the appellant’s counsel
relied for his grievance vary with the varying consti-
5 4 2
tutions of statutory bodies and the rules prescribed by the
legislature under which they have to act and the question
whether in a particular case the rules of natural justice
have been contravened must be judged not by any preconceived
opinion of what they may be but in the light of the relevant
statutory provisions : Gullapalli Nageswara Rao v. A. P.
State Road Transport Corporation(1). Applying this test to
the present case the order dated July 6, 1970 cannot be,
considered to violate any rule of natural justice.
According to Shri Sen the business of selling liquor is
protected by Art. 19 of the Constitution as a fundamental
right and reliance for this submission has been placed on K.
K. Narula v. The State of J & K(2). This fundamental right
has been illegally infringed, said the counsel. It is no
doubt true that this Court in the case cited held that
dealing in liquor is business and a citizen has a right to
do business in that commodity but it was added that the
State can make a law imposing reasonable restrictions on the
said right in public interest. In dealing with reasonable
restrictions no abstract standard or general pat-tern is
possible to lay down. In each case, regard has to be had to
the nature of trade or business, the conditions prevailing
in such trade or business, the nature of the infringement
alleged, and the underlying purpose of the restrictions the
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imposition of which is alleged to constitute ant
infringement.
According to Shri Sen the licence was granted to the
appellant for five years and withdrawal of this licence
before ’die expiry of five years has caused him immense
financial loss. The licence was withdrawn without any fault
on his part,. Unreasonableness of’ the provision contained
in S. 43, according to him, is manifest because it permits
the licensing authority to withdraw the licence for any
reason whatsover not falling under s. 42. This wide and
arbitrary power being unreasonable, is, violative of the
appellant’s fundamental right under Art. 19. Let us see if
this submission is, well-founded.
Section 42 empowers the authority granting a licence, permit
or pass under the Act to cancel or suspend it subject to
such restrictions as may be imposed by the Chief
Commissioner. The grounds oh which the order of
cancellation or suspension may be based are contained in
cll.(a) to (g) of sub-s. Except for cll. (f) and (g) all
other clauses suggest’ some impropriety or default on the
part of the licensee. Clause (f) speaks of cancellation or
suspension on the written. requisition by the holder of the
exclusive privilege under s. 22 and cancellation or
suspension under cl. (g) is in accordance with the
conditions of the licence,, pen-nit or pass in question.
Sub-section (3) expressly negatives
1) [1959] SUPP. 1 S.C.R. 319. (2) [1967] 3 S.C.R.
50.
5 4 3
the right to, compensation and also to refund of fee and
deposit.authority granting a licence under the Act to
withdraw the same for anycause other than those
specified in s. 42 on remitting a sum ,equal to the amount
of fee payable for 15 days. It is no doubt true that in s,
43 there, is no express mention of the precise grounds on
which the licence can be withdrawn. But in our opinion
keeping in view the nature of the trade or business for
which the grant of licence under the Act is provided the
cause contemplated by s. 43 must be such as may have
reasonable nexus with the object of regulating this trade or
business in the general interest of the public. In the
determination of reasonableness of restrictions on
trade or business regard must be had to its nature, the
conditions prevailing in it and its impact on the societ as
a whole. These factors must inevitably differ from trade to
trade and not general rule governing all trades or
businesses is possible to lay down. The right to carry on
lawful trade or business is subject to such reasonable
conditions as may be considered essentials by the appro-
priate authority for the safety, health, peace, order and
morals of the society. Article 47 of our Constitution
directs the State to endeavour to prohibit consumption
intoxicating drinks of drugs which are injurious to health
except for medicinal purposes. In the case of country
liquor, therefore, the question of determining
reasonableness of the restriction may appropriately be
considered by giving due weight to the increasing evils of
excessive consumption of country liquor in the interests of
health and social welfare. Principles applicable to trades
which all persons carry on free from regulatory, controls do
not apply to trade or business in country liquor : this is
so because of the impact of this trade on society due to its
inherent nature.
In the present case, according to the counter-affidavit
after the Committee of Estimates had in their Fifth Report
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criticised the working of the Excise Department in the
territory of Tripura in general and the procedure adopted in
granting five years licence to the appellant in particular,
the Council of Minister,,,, as a consequence of this
criticism, resolved that the exclusive privilege of
supplying countery liquor by wholesale should be allowed to
three persons and not to one and that also by
tender-cum-auction. Pursuant to this decision r. 164A was
inserted in the Tripura Excise Rules on July 2, 1970. The
Union Territory of Tripura was accordingly divided into
three districts for the purpose of licence for wholesale
supply of country liquor with effect from September 1,
1970. .,It was for implementing this policy decision of the
State Government that on july 6, 1970 the Collector of
Excise informed the appellant by the impugned order that his
licence would be withdrawn on september 1, 1970, at the same
time remitting to him 15 days licence fee as required by
statute.
544
The Government then took steps to invite tenders and fix a
date for auction of. wholesale supply of country liquor.
The cause for withdrawing the appellant’s licence is in
terms of the major policy decision taken by the Tripura
Government and this, in our opinion, is a cause which,
keeping in view the purpose and object of granting such
exclusive privileges and licences, cannot be considered to
be either irrelevant or collateral to that purpose and
object. The appellant had, it may be recalled, secured his
licence for the maximum period of five years as provided by
r. 22(4) of the Tripura Excise Rules, 1962 for a nominal
annual sum. On the withdrawal of the licence, fee for 15
days was remitted to him and the fee paid in advance and the
deposit made were also directed to be refunded as provided
by s. 43(3).
But this apart, the learned Judicial Commissioner has also
held in the judgment under appeal that since the contract
for five years had been given to the appellant in complete
violation of the statutory provision enacted in the proviso
to s. 22(1) of the Act he could not claim to be a holder of
any valid contract or of. a valid conclusion. Shri
Mukherjee, however, did make a faint attempt the
conclusions of the learned Judicial Commissioner by
submitting that the appellant was not aware of non-
compliance with the proviso to, s. 22 (1 ) of the Act and
that he could not be penalised for any such non-compliance.
We are not impressed by this submission.
Section 22 contemplates the grant of exclusive privilege
which amounts to a virtual monopoly for manufacturing
supplying and selling at wholesale or retail country liquor
or intoxicating drugs within a specified local area.
Keeping in view the nature of this trade or business
particularly the unhealthy effects of intoxicants on certain
important sections of the society it cannot be denied that
the residents of the local area concerned would be vitally
interested in the matter of grant of exclusive privileges
and licences for sale of liquor as unless appropriately
regulated such trade or business may prove a source of
nuisance and annoyance to the persons presiding in the
vicinity. It is apparently in recognition of this vital
interest of the residents of the locality that public notice
of the intention to grant such exelusive privilege is
provided so that objections thereto,, if any, may be
preferred before the exclusive privilege is actually
granted. The, public notice ’is thus a condition precedent
to the grant of exclusive privilege. The underlying policy
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of s. 22 seems to be not to allow such an important matter
to be decided in the secrecy of office without giving it
proper publicity. All the conditions of the proposed grant
including its duration are expected to be notified. Such
notification would serve also to eliminate chances of
favouritism, nepotism and corruption. Section 22 seems also
to have its roots in these deeper considera-
545
tions. Failure to give such public notice was, therefore,
in our opinion, rightly considered by the learned Judicial
Commissioner to be fatal to the grant, of the exclusive
privilege to the appellant. Nothing convincing has been
said at the bar against this view. If non compliance with
the proviso to s. 22 ( 1 ) is by itself fatal to the grant
of exclusive privilege than the impugned order dated July 6,
1970 is sustainable on this ground alone and the writ
petition was thus rightly dismissed. In any event, this
ground, along with the others already noticed, would, in our
opinion, constitute, a good cause for withdrawing the
licence under s. 43 of the Act. On this view the impugned
judgment of the learned Judicial Commissioner does not seem
to us to be open to challenge particularly under Art. 136 of
the Constitution. This appeal accordingly fails and is
dismissed with costs.
G.C. Appeal
dismissed
546