Full Judgment Text
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PETITIONER:
M.S. JAYARAJ
Vs.
RESPONDENT:
COMMISSIONER OF EXCISE, KERALA AND OTHERS
DATE OF JUDGMENT: 28/09/2000
BENCH:
K.T. Thomas & R.P. Sethi
JUDGMENT:
THOMAS, J.
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Leave granted.
A bidder in auction for the privilege of vending foreign
liquor within a circumscribed range was permitted by the
Excise Commissioner to have his domain shifted to another
range. On hearing the said news a hotelier who is doing
business in the latter range was distressed and she quickly
approached the High Court for thwarting the said move. At
the first round the hotelier failed to checkmate the bidder
as a single judge of the High Court declined to grant the
relief prayed for by her. However, she succeeded on the
second round, when a Division Bench of the High Court, on
the appeal filed by her, quashed the order of the Excise
Commissioner. This appeal by special leave is by the
aforesaid bidder for restoration of the benefit which he
secured from the Excise Commissioner.
In the State of Kerala, the right to sell foreign liquor
is restricted by statutory provisions. The Government of
Kerala has formulated rules for it under the Kerala Abkari
Act and one set of such rules is called the Kerala Abkari
Shops (Disposal in Auction) Rules, 1974 (for convenience it
would be referred to as the Auction Rules). The
Government has the authority, under the said rules to notify
in the Gazette the limits of each area (range) wherein the
shop or shops could be located for vending such foreign
liquor. Officers are authorised by the Government to
auction the right to vend foreign liquor from each such shop
and for such period as may be fixed. Person who offers the
highest bid would normally be preferred for conferring the
privilege to vend foreign liquor and licence would be issued
to him for that purpose. Among the different types of
licence only two are relevant for the purpose of this case.
One is called Licence for the privilege of possession of
Indian made Foreign Liquor for sale to public in sealed
bottles without the privilege of consumption on the
premises. As the said licence is to be issued in Form FL-1
it can be termed as such hereinafter. The other is called
Hotel (Restaurant) Licence and it is to be issued in Form
FL-3. (It can be referred to as such hereinafter).
FL-3 licence consists of the privilege to sell foreign
liquor for consumption within a room specifically approved
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for the purpose to residents in the hotel or boarding
houses, including their guests. FL-1 licence is for the
privilege of selling foreign liquor in sealed bottles
containing a quantity above 180 ml.
For the facts in this case the following events are to
be narrated: On 13.3.2000 appellant participated in the
auction held in respect of a shop to be located within a
range called Changanassery Excise Range consisting of the
areas falling within the limits of Changanassery
Municipality. Appellant was the highest bidder and he
quoted above Rs.63 lakhs. On his being chosen for the
licence appellant remitted a portion of the bid amount on
the same day.
He failed to find out a suitable place to locate the
shop within the boundaries of Changanassery Excise Range.
Hence he applied to the first respondent (Commissioner of
Excise, Kerala) for permission to locate the shop outside
the said range. On the same day the application was
forwarded by the second respondent (Assistant Excise
Commissioner of the district) with a recommendatory note.
The Excise Commissioner granted permission to the appellant
on 12.4.2000 for shifting the shop to another range called
Karukachal which comprises of the areas falling within
Karukachal Panchayat. (That range is situate next to the
Changanassery range.) The third respondent, who is running
the hotel and restaurant at Karukachal and who obtained FL-
3 licence to supply foreign liquor in peg measurements to
patrons visiting the hotel, filed a writ petition before the
High Court under Article 226 of the Constitution for
quashing the aforesaid permission granted by the first
respondent. Third respondent contended mainly that the
Excise Commissioner had no authority to pass such an order.
In defence of the permission so granted the Excise
Commissioner and the second respondent relied on Rule 6(2)
of the Auction Rules.
Learned single judge of the High Court, while dismissing
the writ petition, held that Rule 6(2) of the Auction Rules
contains such powers for the Excise Commissioner to pass.
He also held that the order granting permission to locate
the shop outside the limit of the originally shown range is
not proved to have been vitiated by any mala fides.
Third respondent filed an appeal before the Division
Bench of the High Court and learned Judges of the Bench
reversed the order passed by the single judge holding that
the Commissioner of Excise has no power or jurisdiction
under Rule 6(2) to transfer an Abkari or foreign liquor shop
outside the limits notified in the Gazette under Rule 4 of
the Auction rules. The Division Bench did not seriously
take the objection raised by the present appellant that writ
petitioner had no locus standi to challenge the order of the
Excise Commissioner. However, learned Judges observed that
the writ petitioner is a licensee having FL-3 licence and
was running a hotel-cum- restaurant in Karukachal Panchayat
and hence the order permitting the appellant to shift the
shop to Karukachal Panchayat would affect her rights.
Resultantly the Division Bench quashed the order on the
Excise Commissioner though learned Judges granted two weeks
time to dispose of the stock of liquor acquired by the
appellant for the purpose of selling the same in exercise of
the licence granted to him.
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Shri P. Krishnamurthy, learned senior counsel, who
argued for the appellant, adopted a two-pronged onslaught on
the judgment of the Division Bench of the High Court. First
is that the High Court ought not to have entertained the
writ petition filed by the third respondent as she is a
rival businesswoman who cannot have locus standi to file the
petition. Second is that the Division Bench failed to trace
the power of the Excise Commissioner which power has been
conferred on him by the first proviso to Rule 6(2) of the
Auction Rules. Shri C.S. Vaidyanathan, learned senior
counsel who argued for the third respondent, contended that
the locus standi of the third respondent for moving the High
Court is no concern now as the learned single judge of the
High Court had already entertained the writ petition and
decided it on merits only. Alternatively, learned counsel
contended that the third respondent is not, in fact, a rival
businesswoman and she need be regarded only as a resident of
Karukachal Panchayat who is entitled to assail any order
passed by a statutory authority in violation of law.
Without prejudice to such contention learned counsel made an
endeavour to support the interpretation placed by the
Division Bench of the High Court on Rule 6(2) of the Auction
Rules.
Shri P. Krishnamurthy, learned senior counsel relied on
the decisions of this Court in the Nagar Rice & Flour Mills
and ors. vs. N. Teekappa Gowda & Bros. and ors.
{1970(1) SCC 575}; Jasbhai Motibhai Desai vs. Roshan Kumar
Haji Bashir Ahmed & ors. {1976(1) SCC 671}; Thammanna vs.
K. Veera Reddy and ors.{1980 (4) SCC 60}; Dr. Duryodhan
Sahu and ors. vs. Jitendra Kumar and ors. {1998(7) SCC
273} in order to bolster up his contention that the third
respondent had no locus standi to maintain a petition under
Article 226 of the Constitution in respect of the impugned
order passed by the Excise Commissioner.
It is not discernible from the Judgment of the learned
Single Judge whether appellant had raised the issue of locus
standi before him. But appellant did raise it before the
Division Bench. In this appeal also he endeavoured to
contend that the right of the third respondent is not
affected by the order passed by the Excise Commissioner as
the licence granted to her is only for selling liquor in
small quantity and that too only to those persons who visit
the hotel and restaurant, whereas the appellant is not
permitted to sell it like that. We too feel that if the
business of the third respondent is to be carried on in
accordance with the rules such business cannot affect the
business of the appellant. In that view of the matter
appellant would not be a rival trader or a rival business
contender for the third respondent. Perhaps bearing in mind
this aspect the third respondent maintained the stand in the
counter affidavit filed in this Court that her objection
against the order of the Excise Commissioner is as a citizen
of Karukachal Panchayat and she is entitled to raise such
objection.
In this context we noticed that this court has changed
from the earlier strict interpretation regarding locus
standi as adopted in Nagar Rice & Flour Mills and ors. vs.
N. Teekappa Gowda & Bros. and ors.{1970(1) SCC 575} and
Jasbhai Motibhai Desai vs. Roshan Kumar Haji Bashir Ahmed &
ors.{1976(1) SCC 671} and a much wider convass has been
adopted in later years regarding a persons entitlement to
move the High Court involving writ jurisdiction. A four
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Judge Bench in Jasbhai Motibhai Desai (supra) pointed out
three categories of persons vis-Ã -vis the locus standi: (1)
a person aggrieved; (2) a stranger; (3) a busybody or a
meddlesome interloper. Learned Judges in that decision
pointed out that any one belonging to the third category is
easily distinguishable and such person interferes in things
which do not concern him as he masquerades to be a crusader
of justice. The Judgment has cautioned that the High Court
should do well to reject the petitions of such busybody at
the threshold itself. Then their Lordships observed the
following: The distinction between the first and second
categories of applicants, though real, is not always well
demarcated. The first category has as it were, two
concentric zones; a solid central zone of certainty, and a
grey outer circle of lessening certainty in a sliding
centrifugal scale, with an outermost nebulous fringe of
uncertainty. Applicants falling within the central zone are
those whose legal rights have been infringed. Such
applicants undoubtedly stand in the category of persons
aggrieved. In the grey outer circle the bounds which
separate the first category from the second, intermix,
interfuse and overlap increasingly in a centrifugal
direction. All persons in this outer zone may not be
persons aggrieved.
A recent decision delivered by a two Judge Bench of this
Court (of which one of us is a party Sethi, J.) in
Chairman Railway Board & ors. vs. Chandrima Das & ors.
{2000 (2) SCC 465} after making a survey of the later
decisions held thus: In the context of public interest
litigation, however, the Court in its various judgments has
given the widest amplitude and meaning to the concept of
locus standi. In Peoples Union for Democratic Rights v.
Union of India {1982 (3) SCC 235} it was laid down that
public interest litigation could be initiated not only by
filing formal petitions in the High Court but even by
sending letters and telegrams so as to provide easy access
to court. [See also Bandhua Mukti Morcha v. Union of India
{1984 (3) SCC 161} and State of H.P. v. A Parent of a
Student of Medical College {1985 (3) SCC 169} on the right
to approach the court in the realm of public interest
litigation.] In Bangalore Medical Trust v. B.S. Muddappa
{1991(4) SCC 54} the Court held that the restricted meaning
of aggrieved person and the narrow outlook of a specific
injury has yielded in favour of a broad and wide
construction in the wake of public interest litigation. The
Court further observed that public spirited citizens having
faith in the rule of law are rendering great social and
legal service by espousing causes of public nature. They
cannot be ignored or overlooked on a technical or
conservative yardstick of the rule of locus standi of the
absence of personal loss or injury. There has, thus, been a
spectacular expansion of the concept of locus standi. The
concept is much wider and it takes in its stride anyone who
is not a mere busybody.
In the light of the expanded concept of the locus standi
and also in view of the finding of the Division Bench of the
High Court that the order of the Excise Commissioner was
passed in violation of law, we do not wish to nip the motion
out solely on the ground of locus standi. If the Excise
Commissioner has no authority to permit a liquor shop owner
to move out of the range (for which auction was held) and
have his business in another range it would be improper to
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allow such an order to remain alive and operative on the
sole ground that the person who filed the writ petition has
strictly no locus standi. So we proceed to consider the
contentions on merits.
Chapter 1 to 4 of the Auction Rules contain various
regulations regarding fixation of the limit of each range,
how to conduct the auction for each or lot of shops etc.
Chapter 5 of the Auction Rules contains two rules (Rule 6
and Rule 6A) under the title General Conditions applicable
to licensees of toddy, arrack or foreign liquor 1 shops.
Though Rule 6 consists of 39 sub-rules we are concerned only
with the first three of them. Hence those three sub- rules
are extracted herein: 6(1) No licensees of any toddy,
foreign liquor shop shall be permitted to sell or possess
toddy or foreign liquor or cocobrandy outside the local
limits specified in his licence. (2) No toddy or foreign
liquor shop notified in the Gazette under Rule 4, shall be
located outside the notified limits, but with the previous
sanction of the Assistant Excise Commissioner it may be
removed from one place to another within such limits.
However, no such shop shall be located in or removed to
place within an area declared as a project area. No toddy
shop shall be located within 400 meters and no Foreign
Liquor 1 shop shall be located within 200 meters from an
educational Institution, Temple, Church, Mosque, Burial
ground, Harijan Colonies or Tribal Colonies:
Provided the Excise Commissioner may for sufficient
reasons to be recorded in writing and subject to such
conditions as he may deem necessary to impose, order to
remove from any place, any toddy shop or Foreign Liquor 1
shop to a place outside the limits specified in this sub-
rule:
Provided further that if any educational institution,
Temple, Church, Mosque or burial ground comes into existence
subsequent to the grant of licence, it shall not disentitle
such shops for continuance:
(3) it shall be competent to the Board of Revenue to
order the transfer of shops from one site or locality to
another site or locality or to alter the specified limits of
any shop even during the currency of the contract or to
order any shop to be closed in the interest of public peace
or morality or on grounds of expediency and in such an event
of transfer, alteration or closure, the contractor shall
have no claim for compensation.
The repeated usage of the negative expression no in
sub-rules (1) and (2) looms large therein. By such usage
the legislature has imposed absolute ban on certain
activities e.g. no licensee shall be permitted to sell
foreign liquor outside the local limits specified in his
licence as in sub-rule (1) and no foreign liquor shop
shall be located outside the notified limits as in sub-
rule (2). Then again no foreign liquor shop shall be
located within the distance fixed as from certain
institutions. There is no proviso nor any explanation as
for sub-rule (1) but the proviso is placed only below sub-
rule (2). Therefore, sub-rule (1) must work out by itself
unexpanded or unrestricted by any other clause.
The first proviso to sub-rule (2) is intended to refer
to sub-rule (2) above. This can be discerned from two
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indications. One is the fact that the said proviso has been
placed in the said sub-rule only. Second is that its scope
is restricted to a place outside the limit specified in
this sub-rule. The contention of the appellant is that the
above words can have relation to the limits specified in
sub-rule (1) because the limit envisaged in the second
sub-rule is practically the same as the limit indicated in
sub-rule (2).
We have difficulty to accept the said contention for
more than one reason. If the rule making authority had
intended it to be so they would have effortlessly used the
words outside local limits specified in the licence in the
proviso because the same words have been used in sub- rule
(1). As the proviso gives powers to the Excise Commissioner
to order removal of a shop to a place outside the limits
specified in this sub-rule it can only refer to the limits
specified in that sub-rule and not elsewhere. It must be
noted in this context that sub-rule (2) specifies certain
limits such as within 400 meters (for toddy shops) and
within 200 meters (for FL-1 shops) from certain
institutions mentioned therein. It is with reference to
those limits which are specified in sub-rule (2) that the
proviso confers power on the Excise Commissioner to pass
order for removal.
Otherwise the absolute ban incorporated in sub-rule (1)
would become meaningless. It is also worthy to notice that
the only exception from the ban contained in sub-rule (1) is
provided in sub-rule (3), extracted above. A superior
authority like the Board of Revenue alone was vested with
that power in the interest of public peace or morality or
on grounds of expediency.
(Shri P. Krishnamurthy submitted that the Board of
Revenue in Kerala stood abolished in 1997 and in that place
Government is substituted in statutes.) If so, even for the
Government to order transfer of a shop from one locality to
another it cannot be done unless there is existence of the
exigency indicated in sub-rule (3). How could it be
conceived that a subordinate officer can do it without any
such exigency.
We, therefore, concur with the interpretation placed by
the Division Bench of the Kerala High Court on the scope of
the proviso to Rule 6(2) of the Auction Rules. It means
that Excise Commissioner has no authority to permit shifting
of a foreign liquor shop from one range to a totally
different range. Consequently the order passed by the first
respondent Excise Commissioner in favour of the appellant
is without authority of law and it has been rightly struck
down by the Division Bench of the High Court. Accordingly
we dismiss this appeal.
Learned counsel for the appellant lastly made a plea
that the amount deposited by him pursuant to the bid, should
be refunded to him as the appellant was not able to operate
the foreign liquor shop mainly on account of the
unauthorised order passed by the Excise Commissioner. It is
open to the appellant to make the application for such
refund. We direct the Government to pass orders thereon
within one month from the date of such application.
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