HON’BLE SHRI G.S.SINGHVI, THE CHIEF JUSTICE AND HON’BLE SHRI JUSTICE C.V.NAGARJUNA REDDY WRIT APPEAL No.811 OF 2007 Between: M/s. Siva Priya Bar & Restaurant, represented by its Proprietor, Sanikommu Koti Reddy, Narsaraopeta, Guntur District. ... Appellant. AND Commissioner of Prohibition & Excise, Hyderabad and three others. ... Respondents. :: J U D G M E N T :: Counsel for the appellant : Sri P. Venugopal Counsel for respondent Nos.1 to 3 : Assistant Government Pleader for Prohibition and Excise. Counsel for respondent No. 4 : Sri D. Krishna Murthy 11th October, 2007 Per G.S.SINGHVI, C.J. This is an appeal for setting aside order dated 05.9.2007 passed by the learned Single Judge in Writ Petition No.15355 of 2007 whereby he rejected the appellant’s challenge to the decision taken by Commissioner of Prohibition and Excise, Andhra Pradesh (respondent No.1 herein) to allow shifting of M/s.Kokila Bar and Restaurant, Narsaraopet from Door No.13-1-43 Lal Bahadur Market Centre, Narsaraopet to Door No. 11-31-468, Palanadu Bus Stand area, Narsaraopet. The appellant was granted Form-2B licence under the Andhra Pradesh (Grant of Licence of selling by Bar and Conditions of Licence) Rules,2005 (for short, ‘the Bar Rules’) for running the bar and restaurant in premises bearing No.11-31-469/1 and 4, Palanadu Bus Stand area, Narsarapet during the year 2006-2007. Later on, its licence was renewed for the excise year 2007-2008. Respondent No.4 was also granted Form-2B licence for running bar and restaurant in the premises bearing Door No.14-1-33, Lal Bahadur Market Centre, Narsaraopet for the excise year 2006-2007. At the fag end of the year, respondent No.4 filed application dated 17.5.2007 seeking permission to shift the licence premises to Door No.11-31- 469/2, Palanadu Bus Stand area, Narsaraopet on the ground that there was a division of the property of the premises where it was running the bar and restaurant and the portion which came to his owner’s share does not meet the requirement of plinth area. By an order dated 11.7.2007, respondent No.1 accorded permission to respondent No.4 to shift the bar and restaurant to premises bearing Door No.11-31-468. The appellant challenged the shifting of the licensed premises of respondent No.4 mainly on the ground that the sanction accorded by respondent No.1 is ultra vires the provisions of the Bar Rules and that it was totally arbitrary and unjustified. In the affidavit filed by him, Sanikommu Koti Reddy, Proprietor of the appellant averred that the reason put forward by respondent No.4 for seeking transfer of the licensed premises, namely, division of the property was factually incorrect because, as a matter of fact, there was no division of the property and that sufficient area was available for running the bar and restaurant in the premises approved by the competent authority. Along with his affidavit, Shri Sanikommu Koti Reddy annexed affidavit of the owner of the premises. He then relied on Rule 13 of the Bar Rules and pleaded that the difficulty, if any, faced by respondent No.4 in running the bar at the licensed premises did not justify shifting of the premises in the vicinity of the petitioner’s bar and restaurant because that would give rise to unhealthy competition. The case set up by the official respondents was that permission to shift the licensed premises of respondent No.4 was accorded in the back drop of report submitted by Deputy Commissioner of Prohibition and Excise. In paragraph 4 of the affidavit filed by him, Shri A. Ramesh Kumar, Prohibition and Excise Superintendent, Narsaraopet averred as under: “4. In reply to the allegations made in Para No.7 of the petitioner’s affidavit, I submit that the 4th respondent is a licensee under Form 2B for running the Bar and Restaurant in the premises bearing No.14-1-33, Lal Bahadur Market Centre, Narsaraopeta, Guntur District, for the year 2006-2007. I submit the 4th respondent made an application dated 17-5-2007 to the 1st respondent seeking permission to shift the licensed premises from Door No.14-1-33, Lal Bahadur Market Centre, Narasaraopeta town to D. No.11-31-469/2, Palanadu Bus Stand Area, Narasaraopeta town. The reasons given for shifting in the said representation is that he has sustained losses due to the lack of potential for running the Bar & Restaurant in the original licensed premises at Door No.14-1-33, Lal Bahadur Market Centre, Narasaraopeta town. Along with his representation, he also furnished (1) No Objection Certificate, (2) Rent Agreement, (3) Licnce copy, (4) Blue prints of proposed premises. I submit that the first respondent called for the remarks on the application of the 4th respondent from the 2nd respondent. I submit that the 2nd respondent vide Rc.No.129/2007/B1, Dated 2-6-2007 after personal Inspection of the proposed premises recommended for shifting of premises. I submit that the first respondent after considering the recommendations of the 2nd respondent passed order vide Cr.No.5200/2007/CPE/M3, dt.11-6- 2007 permitting the petitioner for shifting of the 4th respondent’s licensed premises from Door No.14-1-33, Lal Bahadur Market Centre, Narasaraopeta town to D.No.11-31-469/2, Palnadu Bus Stand Area, Narasaraopeta town subject to the condition that the proposed premises satisfy Rule 6 of the Bar Rules and the trade licence to run the Restaurant & Bar by the Narasaraopeta local authorities. I submit since there is a mistake in respect of Door Number of the proposed premises in the order of the 1st respondent dt.11-6-2007, the Commissioner issued orders vide Cr.No.5200/CPE/2007/M2, dated 11-7-2007 rectifying the mistake by correcting the door number as 11-31-468. I submit the record reveals that the 4th respondent addressed a letter to the 3rd respondent that there is a partition in between the owners of the building Door No.14-1-33 and by virtue of the division of property sufficient place will not be available to run the Bar and Restaurant and therefore requested to shift the premises to Door No.11- 31-469/2. The said representation was given to Prohibition & Excise Inspector on 19-6-2007. However, the Circle Inspector of Prohibition & Excise did not forward the said representation to the 3rd respondent. I submit that the application of the 4th respondent dated 17-5-2007 for shifting was considered and accepted by the first respondent by his order dated 11- 6-2007. The subsequent representation which was handed over to the Circle Inspector of Prohibition & Excise on 19-6-2007 was not taken into consideration.” In a separate counter-affidavit filed by him, Shri Gopu Venkata Rami Reddy, Proprietor of respondent No.4 alleged that the writ petitioner is guilty of misleading of the Court inasmuch as he produced fabricated and forged document for the purpose of obtaining ex parte order. He denied the petitioner’s assertion that application was made to Prohibition and Excise Superintendent for grant of permission to shift the licensed premises. On merits, he averred that permission to shift was granted by respondent No.1 in accordance with Rule 13 (3) of the Bar Rules and the petitioner does not have the locus standi to challenge the same. The learned Single Judge adverted to Rule 13 of the Bar Rules and held that in the absence of any prohibition, more than one bar and restaurant can be allowed in the same locality and that the petitioner cannot take exception to the shifting of the licensed premises of respondent No.4 from Lal Bahadur Market area to Palanadu Bus Stand area, Narasaraopet. We have heard learned counsel for the parties and scrutinised the record. We have gone through the original file produced by the learned Assistant Government Pleader for Prohibition and Excise. Rule 13, which postulates sale of liquor at the licensed premises only, reads as under: “(13) Sale permitted at the licensed premises only:- (1) The licensee shall sell the liquor only at the premises specified in the licence. (2) (a) No change or alteration of the licensed premises shall be made during the licence period without the prior approval of the Deputy Commissioner. (b) Extention of the licenced premises by adding contiguous enclosures to the existing permitted enclosures for consumption may be permitted for valid reasons by the Deputy Commissioner subject to payment of an extension fee of Rs.10,000/-. (c) Extention of the licensed premises by adding separate enclosures having no contiguity with the existing permitted enclosures may be permitted for valid reasons by the Deputy Commissioner subject to payment of additional licence fee @ 10% of licence fee for each such separate enclosure and on payment of extension fee of Rs.10,000/-. (3) No shifting of the licensed premises shall ordinarily be permitted during the licence period from one location to another. However, the shifting of the licenced premises under Form 2-B may be considered by the Commissioner subject to payment of Rs.10,000/- as shifting fee, if the shifting of the original licenced premises of Hotel and Restaurant is permitted by the local authority”. A reading of the above reproduced rule makes it clear that the licensee is required to sell the liquor only at the premises specified in the licence. Rule 13(2)(a) contains a prohibition against the change or alteration of the licensed premises without prior approval of the Deputy Commissioner. Sub-rule (3) of Rule 13 provides that no shifting of the licensed premises shall ordinarily be permitted during the licensed period from one location to another, but the Commissioner has the power to order shifting on payment of fee of Rs.10,000/-, if such shifting is permitted by the local authority. The use of word “ordinarily” in sub-rule (3) of Rule 13 and prohibition contained in sub-rule (2)(a) and sub-rule (3) of Rule 13 are reflective of the legislative intendment against the change or alteration of the licensed premises during the period of licence or shifting of the licensed premises except with the prior approval or permission of the Deputy Commissioner or the Commissioner, as the case may be. To put it differently, the exercise of power by the Deputy Commissioner to approve change or alteration of the licensed premises or shifting thereof by the Commissioner is permissible only in exceptional circumstances. This necessarily casts a duty on the concerned officers to objectively consider the cause shown by the licensee for change or alteration of the premises or shifting thereof. In the present case, we find that two different reasons were put- forward by respondent No.4 for seeking permission to shift the location of the bar and restaurant. In the first place, he came up with the plea that on account of division of the property between the owners, the plinth area left with him was not sufficient for running the bar and restaurant. Later on, he put-forward the plea of lack of sales as the cause for seeking change of the location. Deputy Commissioner of Prohibition and Excise (FAC), Guntur Division, who inspected the premises where respondent No.4 proposed the shifting of the bar and restaurant sent letter Rc.No.129/2007/B1, dated 2.6.2007 to the Joint Commissioner, Prohibition and Excise (Headquarters) and opined that the new premises is suitable for establishing the bar and restaurant. That letter reads as under: “GOVERNMENT OF ANDHRA PRADESH PROHIBITON AND EXCISE DEPARTMENT From To Sri K. Divakar M.A., The Joint Commissioner of Deputy Commissioner of Prohibition and Excise (H.Qrs.), Prohibition and Excise (FAC), Andhra Pradesh, Guntur Division, H Y D E R A B A D. G U N T U R. Rc.No.129/2007/B1, dated 02.06.2007 Sir, Sub:- PROH. & EXCISE DEPT., - Guntur Division – Narsaraopet Excise District - Representation of G.V. Rami Reddy Regarding shifting of 2B licence – Detailed report – Submitted - reg. Ref:- Commissioner of Proh. & Excise, A.P., Hyderabad CR.No.5200/2007/ CPE/M3, dt.17.05.2007. **** I invite kind attention to the subject and reference cited. In pursuance of the instructions issued in the reference cited, I have proceeded to Narsaraopet on 30.05.2007 and enquired into the reasons for the shifting of premises M/s. Kokila Restaurant & Bar, Narsaraopet D.No.14-1-33 to D.No.11-31-469/2 in Narsaraopet Town. I have inspected the proposed new premises D.No.11-31-469/2 and it is found suitable for establishment of restaurant & bar. The licensee Sri G.V. Rami Reddy stated that he proposed to shift the premises from Door No.14- 1-33 to D.No.11-31-469/2 as the sales are not encouraging in the present place and added that he may not be able to pay the licence fee if he continues his business in the present premises. My enquiries with local authorities reveal that the facts submitted by licensee are correct. Hence, the request of licensee for shifting of premises may kindly be considered. Yours faithfully, Sd/- Dy.Commr. of Proh. & Excise (FAC) Guntur.” By solely relying on the above reproduced letter and without considering whether there was any valid reason for relaxing the prohibition/restriction contained in Rule 13 against the shifting of the location, respondent No.1 passed order dated 11.6.2007, whereby he sanctioned shifting of the bar and restaurant of respondent No.4. The total non-application of mind by respondent No.1 is evinced from the contents of order dated 11.6.2007, which is reproduced below: “OFFICE OF THE COMMISSIONER OF PROHIBITION AND EXCISE A.P., HYDERABAD. Cr.No.5200/07/CPE/M3 Dated: 11.06.2007 Sri HIRALAL SAMARIYA, I.A.S., Commissioner of Prohibition & Excise Sub:- Proh. & Excise – Narsaraopet Excise District – Requesting for shifting of 2-B licence M/s. Kokila Restaurant & Bar – Narsaraopet from D.No.11-31-469/2, certain shifting orders – issued. Ref:- 1. Representation of Sri G.V. Rami Reddy, Narsaraopet, dt.17.5.2007. 2. This office Cr.No.5200/07/CPE/M3, dt.17.5.07. 3. D.C., Guntur, Rc.No.129/07/B1, Dt.2.6.07. *** In the circumstances reported by the Deputy Commissioner of Proh. & Excise, Guntur vide reference 3rd cited, permission is hereby accorded for shifting of M/s. Kokila Restaurant & Bar, Narsaraopet, from D.No.14-1-33 to D.No.11-31-469/2, Narsaraopet Town, subject to condition that the proposed premises satisfies Rule 6 of the Bar Rules and Trade Licence for the licensee is issued at the proposed premises of M/s. Kokila Restaurant & Bar, Narsaraopet by the local authorities. (The orders are issued with the approval of C.P.E., A.P., Hyd) Sd/- Sd/- P.R.S. PRASADA RAO, For Commissioner of Proh. & Excise. To The Deputy Commissioner of Proh. & Excise, Guntur is requested to take necessary action as per rules. Copy to the Proh. & Excise Superintendent, Narsaraopet.” In our opinion, the order passed by respondent No.1 is per se ultra vires Rule 13 of the Bar Rules because it does not reflect objective application of mind by the officer concerned on the issue of lifting the restriction contained in sub-rule (3) of that rule. Before relying on letter dated 2.6.2007 sent by the Deputy Commissioner, respondent No.1 was duty-bound to find out whether there was any substance in the assertion contained in the representation of respondent No.4 about the poor sales and also whether shifting of the bar and restaurant in the vicinity of the existing bar and restaurant would be in public interest and the interest of the revenue. The failure of the officer to direct his attention to this crucial issue leaves no manner of doubt that the request made by respondent No.4 was accepted without any tangible reason, much less a sound justification. The plea of respondent No.4 that the property had been divided among the owners and, on that account, the space available with it was not sufficient for running the bar and restaurant has not been taken into consideration by the official respondents to sanction shifting of the location of the licensed premises. In any case, that plea is falsified by the affidavit of the owner which was filed by the appellant along with the writ petition. The learned Single Judge declined to interfere with the so- called discretion exercised by the Commissioner without properly adverting to the scheme of Rule 13, which, as mentioned above, postulates shifting of the licensed premises from one location to another only in exceptional circumstances and the fact that the application made by respondent No.4 did not disclose any exceptional or extraordinary circumstances, which warranted shifting of the location of the licensed premises. Therefore, it is not possible to sustain the order under challenge. In the result, the appeal is allowed. The order of the learned Single Judge is set aside and the sanction accorded by respondent No.1 for shifting of the licensed premises of respondent No.4 is quashed. G.S.SINGHVI, C.J. 11th October, 2007. C.V.NAGARJUNA REDDY, J. ARS/svs