1 IN THE HIGH COURT OF JUDICATURE ofR RAJASTHAN AT JODHPUR : O R D E R : 1. S.B. Civil Writ Petition No.682/2009. (Jitendra Sharma Vs. State of Rajasthan & Others) 2. S.B. Civil Writ Petition No.712/2009. (Ghanshyam Sharda Vs. State of Rajasthan & Others) DATE OF ORDER : February 20th, 2009. P R E S E N T HON’BLE MR. JUSTICE GOPAL KRISHAN VYAS ____________________________________ Mr. N.M. Lodha/Mr. Ramesh Purohit for the petitioners. Mr. M.R. Singhvi for the respondent(s). Reportable : BY THE COURT : By these writ petitions, the petitioners have challenged the impugned order dated 21.01.2009 (Annex.- 6), so also, fard (memo) prepared by the respondents dated 21.01.2009 (Annex.-6A). The petitioners have further sought direction to the respondents to allow the petitioners to conduct their business in pursuance of the licences. In the alternative, it is prayed that proportionately exclusive privileged amount may be reduced by passing appropriate and necessary order and respondents may be directed to pay cost of liquor lying in 2 the shop in question under the seal of the respondents. For deciding the controversy raised in these writ petitions, for the sake of convenience, the facts narrated in S.B. Civil Writ Petition No.682/2009 are taken into consideration and discussed. According to brief facts of the case, for the purpose of regulating import, transport, manufacture, sale and possession of intoxicating liquor and of intoxicating drugs, the State legislature enacted the Rajasthan Excise Act, 1950 (in short, to be called hereinafter as “the Act of 1950”); and, further, in exercise of the power conferred under Section 41 of the Act, rules were framed known as the Rajasthan Excise Rules, 1956 (in short, to be called hereinafter as “the Rules of 1956”). The Excise Commissioner issued notice dated 21.01.2008 inviting applications for renewal of licence for sale of country liquor for the year 2008-2009, in which, it was made clear that the minimum exclusive privileged amount will be 8% higher than the exclusive privileged amount of the concerned shop for the year 2007-2008. In pursuance of the said notice for the various shops, however, no application was received from any of the parties, therefore, the shops remained unlifted; and, again notice dated 18.03.2008 was issued inviting applications 3 for grant of licence. In the advertisement, it was made clear that the minimum amount should be at least 80% of the amount fixed originally and certain other conditions were also incorporated. In the Barmer town, there are 9 shops for country liquor and, for those shops, the minimum exclusive privileged amount is fixed for each shop. In the present case, the controversy is in relation to the shop located in Ward No.24, Barmer. Despite notice dated 18.03.2008, no application was submitted by any person for lifting the said shop, so also, various other shops and they were lying unlifted. Therefore, again, the respondent No.2 issued a public notice on 28.03.2008 and efforts were made for granting licence for those shops for which nobody applied. Originally the minimum exclusive privilege amount fixed for the shop in question was Rs.14,64,774/- but it was not possible to lift the shop on such high amount. However, the petitioner applied for having licence for sale of country liquor at the shop sanctioned in Ward No.24 of Barmer town for a sum of Rs.10,41,111/- and the Excise Commissioner sanctioned the same in favour of the petitioner vide sanction dated 01.04.2008. In pursuance of the said sanction, the petitioner deposited a sum of Rs.1,30,139/- as security amount and further deposited 4 like amount in respect of basic licence fees and the remaining amount was to be paid in 12 monthly installments. As per provisions of law, the shop in question was to be opened in Ward No.24 of the municipal area Barmer only after getting the location of the shop approved. The petitioner submitted site-plan showing location of the shop and the same was approved by the respondent authorities vide Annex.-5 after granting relaxation as provided under sub-rule (2) of Rule 75 of the Rules of 1956. According to the petitioner, as per Rule 75 of the Rules of 1956, the shop for sale of liquor shall not be located within a distance of 200 mtr from the collegiate educational institutions, Senior Secondary Schools, Girl Schools, hospitals or place of worship. However, a Gurudwara is situated at a distance of about 85 mtr from the shop in question. But, the respondents granted relaxation for opening the said shop and relaxation was granted in the year 1993-94 in relation to location of the shop as per Rule 75 (2) of the Rules of 1956. The petitioner's contention in the writ petition is that without any notice or information, the shop situated in Ward No.24 of the municipal area Barmer has been ordered to be closed by the Circle Inspector, Excise 5 Department, Barmer on 22.01.2009. It is very strange that since the shop of liquor was having valid licence and due approval of location, it was legally running and huge liquor was lying in the shop in question, therefore, the order for closure of the shop was illegally made and, upon enquiry, it is informed that the State Government has withdrawn the relaxation which was granted by the competent authority under Rule 75 (2); but, it is very strange that no notice or order has been served upon the petitioner prior to closure of the shop. The petitioner has placed on record communication dated 21.01.2009 addressed to the Excise Commissioner, whereby, relaxation granted under Rule 75 (2) up to 2003-04 have been withdrawn and consequently, the Excise Commissioner has directed the Additional Excise Commissioner and all the District Excise Officers for taking further action in the matter for closure of the shops. The petitioner contends that against the above illegal action of the respondents for closing the shop after withdrawing the relaxation, the petitioner sent notice for demand of justice on 24.01.2009 telegraphically to the District Excise Officer, Barmer who had granted the licence and approved the location of the shop in question; but, no reply whatsoever was given by the authority and, on 6 account of closure of the shop, the petitioner's contention is that he is facing recurring day to day loss whereas he has to pay the exclusive privilege amount every month, therefore, if any action has been taken on the basis of direction given by the State Government, then, at least the petitioner was to be given an opportunity of hearing before closing the shop. As per the petitioner, when licence has been granted for sale of country liquor in particular area which is Ward No.24 of the municipal area of Barmer, then, obviously sale can be effected at the location approved by the competent authority. It is pleaded that the petitioner was only knowing that if no other shop will be available then also he will be able to conduct his business in the shop in question and, therefore, he had moved the application. Approval of the location of the shop for conducting business was sanctioned by the authority concerned and upon this assurance he purchased the liquor and was pursuing business regularly. In these circumstances, a right accrued to the petitioner to conduct business at the approved site but due to illegal action of the respondents whereby the petitioner's shop situated at Ward No.24 has been closed, therefore, the petitioner has filed this writ petition for quashing orders Annex.-6 and Annex.-6A. 7 Learned counsel for the petitioner, upon the aforesaid facts, vehemently argued that the State action in directing the Excise Commissioner to close the shops without any notice is in utter disregard of the principles of natural justice. The petitioner is licensee and licence has been issued by the statutory authority which is District Excise Officer and the shop in question was approved by the competent authority which is evident from Annex.-5, sanction of location and this sanction was given after granting relaxation provided under Rule 75 (2) of the Rules of 1956. It is contended that at the very location the shop for sale of country liquor is going on for last 14 to 15 years, therefore, taking of such drastic action is illegal because before taking the said action no opportunity of hearing was afforded and, in that view of the matter, the action of the respondents is against the principles of natural justice. Learned counsel for the petitioner submits that action of the respondents is against the legitimate expectation so also once the relaxation was granted to the petitioner to pursue the business after granting relaxation under Rule 75 of the Rules of 1956, then, there is no question of passing order of closure of the shop for which the petitioner is having valid licence. The said licence was 8 granted by the District Excise Officer with due approval of the department, therefore, it is clear that action has been taken by the competent authority not on the basis of its application of mind but under the direction issued by the Government. It is contended that the competent authority who has granted the relaxation cannot act upon the direction issued by the Government and, that too, without providing opportunity of hearing. Learned counsel for the petitioner submits that the State Government and the Excise Department made a discrimination because relaxations made up to 2003-04 have been withdrawn and relaxations granted after 2003- 04 have not been withdrawn and, on that basis, the shops were ordered to be closed, therefore, such discrimination is not permissible under the law. Learned counsel for the petitioner further submits that bare perusal of the communication which is required to be considered as the basic order clearly shows that relaxation has been withdrawn en masse. It is contended that once relaxation has been granted and business is going on then the same cannot be withdrawn en masse because withdrawal can be made by the competent authority only after application of mind on individual matter because relaxations in different conditions and for different reasons were allowed in 9 individual cases looking to different circumstances. However, if en masse withdrawal is made then it is clear that individual matter has not been considered and withdrawal order has been passed without any application of mind by the competent authority at the instance of the State Government. Therefore, the withdrawal order has been passed in contravention of the settled principles of law without any application of mind for which no reasons have been given. As per learned counsel for the petitioner, the petitioner has purchased the liquor for sale at the shop having its location in Ward No.24 and liquor is lying in the shop which has been purchased by the petitioner after paying the value of the liquor, therefore, now it is the property of the petitioner and if the petitioner is not allowed to sell the liquor, after expiry of the licence period, the liquor will be forfeited by the department and the petitioner will suffer irreparable loss. In such circumstances, virtually on account of the action of the respondents, the property of the petitioner has been taken away by the respondents and the petitioner has been deprived from his property without any fault on his part, therefore, the fundamental right of the petitioner has been infringed. Learned counsel for the petitioner submits that a 10 right accrued to the petitioner after granting relaxation and approval to pursue the business, therefore, the accrued right has been taken away and, that too, without any fault on the part of the licensee. So also, no reason has been disclosed for so called withdrawal in arbitrary manner. Lastly, learned counsel for the petitioner submits that without granting any reasonable opportunity for alternative location the shop has been sealed and the petitioner has been deprived from conducting the business which is causing recurring loss to the petitioner. The action of the respondents is not only unjust but also arbitrary and illegal and is violative of Article 14 of the Constitution of India. Learned counsel for the petitioner submits that the petitioner has lifted the shop for sale, then, now new hurdle has been created by the respondents restraining him from pursuing his business, therefore, the petitioner cannot be blamed for any lapse. More so, the respondents' action is arbitrary and, therefore, the writ petition deserves to be allowed and orders impugned may be quashed. It is pointed out that on the one hand, order for closure has been passed en masse for the retail shops, and, on the other hand, in the hotels which are situated in the prohibited areas, as per Rule 75 of the Rules of 1956, 11 they are still allowed to serve liquor in those hotels, therefore, action of the respondents is discriminatory. In S.B. Civil Writ Petition No.712/2009 filed by petitioner Ghanshyam Sharda whose shop is situated near Lal Bahadur Shastri School in Zone No.5 of the Nagar Nigam Jodhpur, while adopting the arguments advanced by Mr. N.M. Lodha, it is pointed out by learned counsel for the petitioner Mr. Ramesh Purohit that respondents' action is totally discriminatory because the petitioner has been granted licence for running the liquor shop in the year 2005-06 and the said liquor shop is being run for last 25 years. It is submitted that earlier there was a school in front of the shop in question viz., Lal Bahadur Shastri School, but, in place of the said school, now a hotel-cum- Bar has been constructed, therefore, the restriction for opening the shop in front of the school is not in existence. It is stated by Mr. Purohit that the hotel which is constructed upon the land where earlier Lal Bahadur Shastri School was in existence is only 15 mtr from the shop in question. In between the said hotel known as Maple Abhay and petitioner's shop, there is only one divider and main gate of the school is more than 200 mtr distant from the petitioner's shop. Therefore, if the Government is allowing the hotel which is situated near 12 the petitioner's shop to sell and serve liquor, then, how the petitioner's shop can be ordered to be closed. It is contended that in the said hotel there is Bar where the hotel management is selling and serving liquor to the customers in the hotel but no order of closure has been made against the hotel situated near the petitioner's shop, therefore, it is total discrimination and the action is violative of Article 14 of the Constitution of India. In the reply to this ground, it is submitted by the respondents that under Section 41 of the Excise Act 1950, there is power left to the Government to frame rules and while exercising those powers Excise Rules, 1956 have been promulgated. But, in due course of time, as and when there were certain developments in the trade of liquor necessitating promulgation of different set of rules, it became necessary to frame separate independent rules; and, in exercise of the powers conferred by Section 41 of the Act of 1950, the State Government framed rules known as Rajasthan Excise (Grant of Hotel Bar/Club Bar Licenses) Rules, 1973. These are special set of rules and they operate independently. It is pointed out that in the aforesaid rules, there are certain special terms which are not otherwise defined in general Rules of 1956 and, more so, it is settled law that special rules always prevail over 13 the general rules. There are certain terms which are not defined anywhere else such as hotel, hotel/bar club license, club, club bar license, therefore, the general rules are not applicable to the hotels. As such grant of license to hotels is governed under the Rules of 1973 and the same is altogether different than the Rules of 1956. Learned counsel for the petitioner Mr. N.M. Lodha while substantiating his arguments, first of all, invited my attention towards recent judgment of the Hon'ble Supreme Court reported in (2008) 4 SCC 111, State of Uttar Pradesh Vs. Manoj Kumar. While citing the said judgment, learned counsel for the petitioner submits that almost in identical case, the Hon'ble Supreme Court held that the action of the respondents cannot be approved in passing the order of closure of the shops without issuing notice to the affected parties and further held that licensee shall be granted permission to pursue the business till completion of the currency of the lincence. It is further held that all the shops owners or sub-shop owners shall close their shops on or before 31.03.2008; meaning thereby, as per the judgment of the Supreme Court, it is held that no order of closure shall be made without providing opportunity of hearing or assigning reasons to the licensee in between the period of tenure of the licence. 14 Large number of judgments are cited by learned counsel for the petitioner showing that once relaxation has been granted at the time of issuing licence in favour of the petitioner in accordance with Rule 75 of the Rules of 1956, that cannot be rescinded without affording opportunity of hearing. Learned counsel for the petitioner also submits that the petitioner was having legitimate expectation from the respondents because he was granted licence after due relaxation as provided under Rules of 1956. In some of the judgments, learned counsel for the petitioner has tried to persuade this Court, that once location is approved after due relaxation for conducting business by the competent authority, then, the right of the competent authority cannot be snatched by the State Government which has been done in this case. Per contra, by way of filing interim reply to the writ petition, following grounds were taken for rejection of the writ petition : (A) In the reply, the respondents contend that the petitioner has not come with clean hands and is guilty of suppressing, concealing and withholding important facts from the knowledge of this Court. It is pointed out that order has been passed by the Commissioner dated 21.01.2009 by which the 15 Commissioner has withdrawn the relaxation which was conferred in exercise of power under proviso to sub-rule (2) of Rule 75. The respondents have placed on record Annex.-R/1 to prove this fact. (B) It is contended that the petitioner has also committed illegality while not pointing out the conditions of licence. For the same, it is pointed out that in condition No.5.3 of the licence, there is specific stipulation with regard to District Excise Officer who is competent to get the shop closed for good and sufficient reasons. Further, the District Excise Officer also enjoys the power so as to ask the licensee to transfer from one place to another and, on account of such closure, the licensee is not entitled to claim any compensation, damages or rebate in the monthly installments; but, the petitioner has deliberately not placed on record the terms and conditions of the licence. (C) As per the respondents, condition No.7.3 there is specific stipulation that in the event of the period of licence being over or in the event of licence being cancelled, the stock of country liquor along with the record is required to be furnished to the Excise Inspector and the same is required to be 16 deposited in the office of the Excise Inspector and remaining stock is to be disposed of by the District Excise Officer and, till the same is disposed of, the stock shall remain in joint custody of the Excise Inspector and the erstwhile licensee. The respondents have placed on record Annex.-R/2. (D) It is contended by the respondents in the reply that the petitioner has raised the ground of discrimination. The petitioner has attempted to raise the plea that, “.......but the relaxations, which have been granted after 2003-04 have not been withdrawn.”; but, this plea is factually incorrect because relaxation which was granted after 2003-04 has already been withdrawn by the Government vide order dated 27.02.2008 and the same was given effect to by the Commissioner which was conveyed by communication dated 05.03.2008. Thus, it is clear that relaxations granted to the licensees subsequent to 2003-04 have also been withdrawn. Therefore, there is no substance in the contention of the petitioner. (E) The respondents have pleaded the ground for rejection of the writ petition stating that the petitioner has wrongly raised the ground on the 17 anvil of Article 14 of the Constitution of India. As a matter of fact, in the matter of trading in liquor, Article 14 of the Constitution does not apply. As per the respondents, Article 14 of the Constitution of India is not attracted in the matter nor can one make it a basis to point out infringement of Article 14. (F) The respondents have in specific words raised the ground for rejection of the writ petition that as a matter of fact a policy decision was taken by the sensitive, answerable and responsible Government after giving serious though over the problem and having come to the conclusion that the liquor trade should be restricted and strictly regulated in accordance with law. It is pointed out that as per the scheme of the rules, Rule 75 prescribes certain distances from respective places within which no shop can be located, however, in exceptional cases and, that too, by recording reasons, the powers have been given to relax the prescription of rule, therefore, this power is to be exercised in rarest of rare cases, in extraordinary circumstances and not in routine manner. But, in this case, relaxations were granted in routine manner and while taking 18 shelter of the proviso to sub-rule (2) of Rule 75 of the Rules of 1956, large number of shops were opened, therefore, it was felt necessary by the Government that the entire matter of granting relaxation by the Government should be re- considered and reviewed. This decision has the underlying idea that the Government wanted to protect the sanctity of Colleges, educational institutions, Girls' Schools, Hospitals and places of worship, place of public entertainment. Therefore, the shops which were running against the provisions of sub-rule (2) of Rule 75 under the relaxation power have now been withdrawn and Government is now strictly adhering to the text of sub-rule (2) of Rule 75. Therefore, the impugned decision was taken and, in this sequence, Annex.- 6 was initially issued by the Government, in which, the decision of the Government was conveyed to the Commissioner, Excise Department, Udaipur vide communication dated 21.01.2009, in which, it is specifically mentioned that after 2003-04 as many as 156 liquor shops are running under relaxation provided under Rule 75(2) of the Rules of 1956; but, in this connection, the decision has 19 been taken that relaxation so granted should be withdrawn and the shops situated in the area enumerated under Rule 75 should be closed. However, if the licensee is ready to shift his shop to a proper location in accordance with Rule 75 (2) and is willing to pursue his business, then, the case may be considered in accordance with rules. The said communication was transmitted to all the Additional Commissioners and District Excise Officers. Therefore, in the interest of justice and to follow the rules in strict sense, the Government took the decision to withdraw the relaxation so granted to large number of shops after 2003-04 and it is ordered that those shops shall be closed which are running in the prohibited areas and may be shifted after taking consent of the licensee at a proper place in accordance with Rule 75 (2). Therefore, decision taken by the State Government is not bad or illegal nor does it suffer from any infirmity. More so, it is in public interest. It is contended by the respondents that the contention of the petitioner is totally incorrect that basic order clearly shows that relaxation has been withdrawn 20 en masse; more so, it is a case in which the Government took decision to implement the law in