The Hon'ble Sri Justice C.V.Nagarjuna Reddy Writ Petition No.16010 of 2010 Date: 30-08-2010 Between: Siripurapu Venkata Rao ..... Petitioner AND The Commissioner of Prohibition and Excise and 3 others. .....Respondents Counsel for the Petitioner: Mr.O.Manoher Reddy Counsel for respondent Nos.1 to 3: AGP for Prohibition & Excise Counsel for respondent No.4: Mr.M.S.R.Chandra Murthy for Mr.M.Subrahmanyam The Court made the following: Order: This Writ Petition is filed for a Mandamus to set aside order, dated 02-07-2010, of respondent No.3. I have heard Sri O.Manoher Reddy, learned Counsel for the petitioner, the learned Assistant Government Pleader for Prohibition and Excise representing respondent Nos.1 to 3 and Sri M.S.R.Chandra Murthy, learned Counsel representing Sri M.Subrahmanyam, learned Counsel for respondent No.4. The petitioner participated in the auction-cum-bid for grant of privilege to sell liquor under A-4 license. He has emerged as the highest bidder, having offered Rs.1,00,08,999/- against the upset price of Rs.34,62,906/-, in respect of K.Pentapadu, Shop No.1 of Pentapadu Mandal, West Godavari District. Respondent No.4 became the successful bidder for Pentapadu Village of Pentapadu Mandal by offering a sum of Rs.2,61,00,000/- as against the upset price of Rs.1,08,03,030/-. The petitioner was granted temporary license for locating his shop at a premises, which is 300 meters away from the border of Pentapadu Village, within the village limits of K.Pentapadu. After the petitioner started running the said shop, respondent No.4 appeared to have made a representation to respondent No.3 objecting to the running of the shop by the petitioner at the premises in question on the plea that location of the said shop would adversely affect the viability of his shop. Purporting to consider the report submitted by the Station House Officer, Tadepalligudem, respondent No.3 has passed the impugned order whereby he has directed the petitioner to shift the shop from the existing premises to another premises in K.Pentapadu Village. At the hearing, Sri O.Manoher Reddy, learned Counsel for the petitioner, submitted that the impugned order is passed in serious violation of principles of natural justice. He submitted that respondent No.3 ought not to have made enquiries behind the petitioner’s back and acted on the report of the Station House Offcer, Tadepalligudem, without putting the petitioner on notice. The learned Counsel further submitted that there is no basis for respondent No.3 in concluding that location of the petitioner’s shop at the premises in question would adversely affect the business of respondent No.4 and that had a notice been given to the petitioner, he would have satisfied respondent No.3 on this aspect. The learned Assistant Government Pleader for Prohibition and Excise sought to support the action of respondent No.3 with reference to Rule 27 of the A.P.Excise (Lease of Right of Selling by Shop and Conditions of License) Rules, 2005 (for short ‘the Rules’). Sri M.S.R.Chandra Murthy, learned Counsel representing respondent No.4, submitted that the Writ Petition, filed bypassing the alternative remedy of appeal under Section 63 of the A.P.Excise Act, 1968, is not maintainable. He has further stated that, as evident from the report received from respondent No.2, the action of the petitioner in locating the liquor shop near the border of the village is mala fide and that the same is intended to attract the customers of respondent No.4. The learned Counsel placed reliance on the judgments of this Court in Assistant Commissioner of Prohibition & Excise vs. K.Vidya Sagar[1] and Ch.Subrahmanyeswara Rao vs. Commissioner, Prohibition and Excise, Hyderabad and others[2] in support of his submission. I have carefully considered the submissions of the learned Counsel for the parties and perused the record. As regards the legal position relating to the power of the licensing authority to permit location of the liquor shops, it does not admit of any dispute that a fair amount of discretion is vested in the licensing authority in this regard. The Division Bench in Assistant Commissioner of Prohibition & Excise’s case (1 supra), while interpreting Rule 6 of the A.P.Excise (Indian and Foreign Liquor Retail Sale Conditions of Licenses) Rules, 1993, which is in parimateria with Rule 27 of the Rules, held that mere satisfaction of the distance requirement, envisaged therein, by itself would not scuttle the right of the licensing authority to object to the location of the liquor shop in a particular premises and that the further requirement of suitability also needs to be satisfied by the licensee to locate the liquor shop in a premises. A learned single Judge of this Court, while following the above-said ratio, in Ch.Subrahmanyeswara Rao (2 supra), held that if the location of a liquor shop at a particular premises adversely affects the business of another licensee, the licensing authority has the power to refuse to grant permission to locate the said shop at that premises even though it conforms to the distance requirements under Rule 27 of the Rules. But, the question in this Writ Petition mainly centers around whether location of the liquor shop at the premises in question by the petitioner would adversely affect the business of respondent No.4. A perusal of the impugned order shows that respondent No.3 has called for two reports bearing the same date i.e., 01-07-2010 from the Station House Officer, Tadepalligudem, and the Assistant Prohibition and Excise Superintendent, Eluru. These reports opined that in order to avoid unhealthy competition, it is necessary to direct the petitioner to shift the premises. As noted above, the petitioner was already granted a temporary license for running the liquor shop at the premises in question. In my opinion, the petitioner is entitled to a notice and opportunity of putting forth his case in order to satisfy respondent No.3 that the location of his shop at the premises in question would not adversely affect the interests of respondent No.4 and that the same is in conformity with Rule 27 of the Rules. Respondent No.3 should, therefore, have given such a notice to the petitioner and supplied copies of the reports, on which he sought to place reliance, to the petitioner before rejecting his request for locating liquor shop in the premises in question. Failure to follow this fair procedure has vitiated the decision of respondent No.3 and the impugned order was thus passed in violation of the principles of natural justice. I do not find any merit in the submission of the learned Counsel for respondent No.4 that the petitioner should have availed the remedy of a statutory appeal as the law is well settled that an order, passed in violation of principles of natural justice, is nonest, and the aggrieved person is entitled to invoke the jurisdiction of this Court under Article 226 of the Constitution of India (see Harbans Lal Sahnia vs. Indian Oil Corporation Limited[3]). For the aforementioned reasons, the impugned order, dated 02-07-2010, passed by respondent No.3, is set aside. Respondent No.3 is directed to issue notice to the petitioner and supply the material, on which he intends to rely. After receiving objections, if any, from the petitioner and also calling for further objections, if any, from respondent No.4 and after giving the petitioner and respondent No.4 an opportunity of hearing, respondent No.3 shall pass a fresh order. Till this exercise is completed, the petitioner shall be permitted to run his liquor shop in the premises in question. The Writ Petition is accordingly allowed to the extent indicated above. As a sequel, WPMP.Nos.20137 & 20138 of 2010 and WVMP.Nos.3277 and 3774 of 2010 are disposed of as infructuous. ___________________________ (C.V.NAGARJUNA REDDY, J) 30th August, 2010 lur [1] 1998 (6) ALT 706 (D.B.) [2] 2005 (6) ALD 501 [3] (2003) 2 SCC 107