Ramachandran S. v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM** **TUESDAY, THE 14TH DAY OF OCTOBER 2014/22ND ASWINA, 1936** ## **WP(C).No. 7914 of 2009 (H)** ## **---------------------------** ## **PETITIONER:** **-------------------** **RAMACHANDRAN.S.,THUMBUMKARA VEEDU, PACHALLOOR P.O., THIRUVALLOM VILLAGE, THIRUVANANTHAPURAM TALUK, THIRUVANANTHAPURAM DISTRICT.** **BY ADVS.SRI.S.P.ARAVINDAKSHAN PILLAY SMT.N.SANTHA SRI.K.A.BALAN SRI.PETER JOSE CHRISTO SRI.S.A.ANAND** ## **RESPONDENT(S):** **--------------------------** **1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN-695 001.** **2. THE COMMISSIONER OF EXCISE, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM, PIN-695 033.** **3. THE DEPUTY EXCISE COMMISSIONER, EXCISE DIVISION OFFICE, THIRUVANANTHAPURAM, PIN-695 023.** **4. THE DISTRICT COLLECTOR, CIVIL STATION, KUDAPANAKUNNU P.O., THIRUVANANTHAPURAM, PIN-695 043.** **5. THE CIRCLE INSPECTOR OF EXCISE, EXCISE CIRCLE OFFICE, NEDUMANGAD, PIN-695 541.** ## **BY ADV. GOVERNMENT PLEADER SRI.P.V.ELIAS** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14-10-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **mbr/** **WP(C).No. 7914 of 2009 (H) --------------------------------------** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** ## **------------------------------------** - **EXHIBIT P1 : TRUE COPY OF TODDY SHOP LICENSE OF T.S.NO.5/2002-2003.** - **EXHIBIT P2 : TRUE COPY OF TODDY SHOP LICENSE OF T.S.NO.8/2007-2008.** - **EXHIBIT P3 : CERTIFICATE OF PREFERENCE ISSUED BY THE CIRCLE INSPECTOR OF EXCISE.** - **EXHIBIT P4 : TRUE OCPY OF THE G.O.(MS) NO.27/09/TD DATED 13.2.2009.** - **EXHIBIT P5 : TRUE COPY OF THE NOTIFICATION.** - **EXHIBIT P6 : TRUE COPY OF THE RELEVANT EXTRACT OF THE GUIDELINES.** ## **RESPONDENT'S EXHIBITS:** **NIL** **---------------------------------------** ## **/TRUE COPY/** ## **P.S. TO JUDGE** **mbr/** ## **C.K. ABDUL REHIM, J.** ## **--------------------------W.P.(C)No.7914 of 2009** ## **------------------------------Dated this the 14[th] day of October, 2014** ## **JUDGMENT** ## The writ petition is filed seeking the following reliefs: - i. declare Rule 5(1) (a) and (b) of the Kerala Abkari Shops Disposal Rules, 2002 as void and unconstitutional and strike it down. - ii. call for the records leading to Ext.P4 and quash Clause - 3 of it by the issuance of a writ of certiorari or any other appropriate writ, order or direction. - iii.declare that para 4 of the Guidelines issued by the Government to be followed in the sale of toddy shops for 2009-2010 granting preference to those licensees who have conducted the toddy shops during the last three years consecutively i.e. from 2006-2007 to 2008-2009 is illegal, arbitrary, discriminatory and illogical. - iv.declare that the petitioner is eligible and entitled to participate in the sale of any toddy shop notified for sale for the year 2009-2010, with preference to the toddy shop in Group I of Nedumangad Excise Range. - v. Issue a writ of mandamus or other appropriate writ, order or direction commanding the respondents not to discriminate the petitioner in the matter of participation in the sale of notified toddy shops for the ## **W.P.(C)No.7914 of 2009 2** year 2009-2010. vi.grant such other reliefs as this Hon'ble Court deems fit and proper in the circumstances of the case including the costs of this Writ Petition(Civil). 2. Evidently, all the reliefs sought for except Sl.No.1 above has become infructuous because it relates to grant of licence for the year 2009-10, which expired as on 31/3/2010. 3. Rule 5(1)(a) and (b) are challenged as void and unconstitutional based on various grounds. The main attack is against prescribing preference for giving privilege to those licencees who had conducted toddy shops during the preceding three years from 2006-07 to 2008-09. Secondly it is contended that exclusion of persons against whom Abkari cases are registered under Section 56 of the Act, from disqualification to have the privilege for vending toddy shops is illegal and unsustainable. It is pointed out that the reservation of the privilege to those licencees who have conducted toddy shops during the preceding three years is violative ## **W.P.(C)No.7914 of 2009 3** of Article 14 of the Constitution of India. It is also contended that the exclusion of persons against whom cases are registered under Section 56 is violative of various provisions contained in the Abkari Act. The rule being contrary to the provisions contained in the parent act is liable to be strucked out, is another contention raised. 4. Whether the reservation of privilege made in favour of the licencees of three consecutive previous years will offend Article 14 of the Constitution of India, is to be examined first. Learned counsel for the petitioner placed reliance on the decision of the honourable Supreme Court in **Khoday Distilleries Ltd. And Others V.State of Karnataka And Others [(1995) 1 SCC 574].** Attention is drawn to the observations contained in paragraph 60(g) of the said decision, wherein it is observed that when the State permits trade or business in portable liquor with or without limitation, the citizen has the right to carry on trade or business subject to limitations, if any, and the State cannot make ## **W.P.(C)No.7914 of 2009 4** discrimination between citizens who are qualified to carry on the trade or business. But in the earlier portion of paragraph 60 the honourable apex court had observed that, the right protected under Article 19(1) are not absolute, but qualified as stated in clause (2) to (6) of Article 19. Therefore the fundamental rights guaranteed under article 19(1)(a) to (g) are therefore to be read along with the qualifications contained in clauses (2) to (6). The rights guaranteed under the Constitution are not absolute, but are subjected to implied limitations. The right protected to carry on any profession do not extent to practicing a profession or occupation or trade or business which is inherently vicious and pernicious, and is condemned by all civilized societies. It does not entitle citizens to carry on trade or business in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public. It is held that portable liquor being an intoxicating drink which is dangerous and injurious to health is therefore an article inherently harmful. A citizen has, therefore, no fundamental right ## **W.P.(C)No.7914 of 2009 5** to do trade or business in liquor. In view of those observations made by the apex court it is to be examined whether there is any discrimination coming within the purview of Article 14 of the Constitution of India. Referring to Article 47 of the Constitution the Apex Court in the very same decision observed that, the State has to bring about prohibition of consumption of intoxicating drinks including liquor. The State has therefore, the power to prohibit the manufacture, sale, possession, distribution and consumption of portable liquor, both because it is inherently a dangerous article and also because of the Directive Principles contained in Article 47 of the Constitution. It is held that for such reasons the State can create monopoly either in itself or in the agency created by it for sale and distribution of liquor (emphasis supplied) and can also sell the licences to the citizens for the said purpose by charging fees. The honourable Supreme Court held that this can be done under Article 19(6), which evidently is a qualification with respect to exercise of fundamental rights. ## **W.P.(C)No.7914 of 2009 6** 5. When the Constitutional mandate empowers the State to formulate monopoly in the trade of liquor or to formulate limitations with respect to distribution or sale of liquor, it cannot be contended that all the citizens in the country should be given equal opportunity for such trade or business. Even in paragraph 60(g) of **Khoday Distilleries case** (cited supra) the honourable apex court observed that when the State permits trade or business in portable liquor with or without limitations (emphasis supplied) the citizen has the right to carry on the trade and the State cannot make discrimination between the citizens. In the policy framed by the State Government with respect to vending of privilege of toddy, the State had exercised its wisdom in limiting the grant of privilege only to those licencees who was holding such privilege during the previous three years. The said limitation put forth in the matter of trade in liquor cannot be challenged as one violative of Article 19. Nor it can be challenged as an unreasonable limitation for which the State Government has no power. When the State Government ## **W.P.(C)No.7914 of 2009 7** in formulation of its policy had framed a limitation with respect to grant of privilege of vending toddy the petitioner cannot be heard to contend that it should be made open for all the citizens and that the restriction imposed reserving such privilege to any particular class is violative of constitutional provisions. 6. Yet another major challenge raised against validity of Rule 5(1) (a) and (b) is that the provisions will run contrary to various provisions of the Abkari Act. Learned counsel had drawn attention to Section 29 of the Act which confers power on the Government to frame Rules. It is contended that, Rule 5 (1) (a) and (b) of the Kerala Abkari Shops Disposal Rules, 2002 are framed in a manner prejudicial to the generality of the provisions contained in the Abkari Act. Learned counsel has placed reliance on the decision of the honourable Supreme Court in **Kerala Samsthana Chethu Thozhilali Union V.State of Kerala [2006 (2) KLT 270 (SC)]** ,wherein it is held that a Rule is not only required to be made in conformity with provisions of the Act, but the same must conform ## **W.P.(C)No.7914 of 2009 8** with the provisions of any other Act, as subordinate legislation. It cannot be violative of any plenary legislation made by the Parliament or the State legislature. Learned counsel has pointed out the exclusion of cases registered under Section 56 from the purview of disqualifications will amount to causing prejudice to the provisions contained in the Abkari Act. When Section 56 prescribed punishment with respect to committing of certain acts by the licencee or his employee, there is no reason for excluding such offences from the purview of disqualification, is the contention. Section 56 basically prescribe prohibitions in the conduct of business on the basis of an Abkari licence. It prescribes punishment for various offences described therein. But the State Government while restricting the grant of privilege had disqualified only those persons against whom cases are registered for Abkari offences of more grave nature, such as adulteration etc. Disqualification incorporated with respect to the matter of granting privilege for conduct of toddy shops, will not in ## **W.P.(C)No.7914 of 2009 9** any manner cause prejudice to provisions contained in Section 56 which relates to punishment of offences with respect to prohibitions contained in conduct of business in liquor. The exemption from the disqualification which imposed with respect to those persons against whom other offences are charged, cannot be treated as in any manner contradictory to provisions of the parent Act or it cannot be said that such provision will in any manner offend or prejudice Section 56 of the parent Act. 7. Another contention raised is based on Section 26 which confers power on the Excise authorities to cancel or recall or suspend the licences. The reasons enumerated under Section 26 for cancellation or suspension of the licence need not be incorporated as a disqualification, because the power of cancellation or suspension will remain intact even in a case where privilege for vending toddy is granted on the basis of the licence obtained with respect to the previous years. 8. It is further contended that when the parent Act had classified all offences coming within the purview of ## **W.P.(C)No.7914 of 2009 10** the Abkari Act as cognizable the exemption provided with respect to offences under Section 56 from the purview of disqualification will run contrary to the provision contained under Section 41A. It is evident that the Government have put limitation and disqualification as part of their policy formulation. It cannot be contended that registration of criminal cases for any cognizable offence shall be treated as disqualification for granting privilege with respect to vending of toddy. 9. Lastly, learned counsel had drawn attention to Section 18A which provides powers on the Government to grant any person or persons with exclusive privilege for selling liquor by way of retail. It is contended that when the provision enables the Government to sell such privilege to any person or persons, it is not justifiable for the Government to restrict sale of such privilege only with respect to a particular group of persons prescribing qualification of having licence for the previous three years. As already observed formulating rules for sale of liquor is one coming within the realm of policy decision of ## **W.P.(C)No.7914 of 2009 11** the State Government. The question as to how it has to be restricted or to whom it has to be given or what should be the conditions for granting such exclusive privilege etc. are matters coming within the purview of the policy decision of the Government. 10. Learned counsel had placed further reliance on a decision of the honourable Supreme Court in **State of M.P. and Others V.Nandlal Jaiswal and others [(1986) 4 SCC 566]** to contend that, when the State decides to grant right or privilege to others (otherthan the State) it cannot escape the rigour of Article 14. The State cannot act arbitrary or at its sweet will. It must comply with the equality clause while granting the exclusive right or privilege of selling liquor. Therefore the contention is that, Article 14 can have no application, cannot be sustained. But as observed in **Khoday Distilleries case** (cited supra) when the State is conferred with powers to create monopoly or to put limitation in the matter of sale and distribution of liquor, it cannot be contended that the State is not powerless to create classification which are ## **W.P.(C)No.7914 of 2009 12** reasonable to the extent of restraining grant of privilege within certain class of citizens. 11. For the reasons as mentioned above this court is of the considered opinion that challenge against validity of Rule 5(1)(a) and (b) of the Kerala Abkari Shops Disposal Rules, 2002 cannot succeed. Consequently, the writ petition fails and the same is hereby dismissed. Sd/- **C.K. ABDUL REHIM JUDGE** MJL