*THE HONOURABLE SRI JUSTICE B.PRAKASH RAO + Writ Petition No.18070 of 2004 % Dated: 16-11-2004 Between: #Toddy Tappers Cooperative Society Kawadiguda, Kawadiguda, Hyderabad, rep. By its President Mr.D.Narsimha Goud, S/o late Rajaram. … Petitioner and $ 1.The Proh. & Excise Inspector, SHO, Musheerabad, Hyderabad. 2. The Proh. & Excise Superintendent Hyderabad District at Hyderabad. 3. The Commissioner of Proh. & Excise, Govt. of A.P., at Hyderabad. 4. The Govt. of A.P. Rep by its Secretary, Revenue (Excise-II) Department, Secretariat, Hyderabad. … Respondents ! Counsel for petitioners: Mr. T.Amarnath Goud ^ Counsel for respondents: G.P. for Proh. & Excise < GIST: >HEAD NOTE: ?Cases referred: 1.1984 (1) APLJ 50 (S.N.) 2. AIR 1985 SC 1676 3. (2003) 5 S.C.C. 669 4. AIR 2002 SC 2968 5. (1995) 1 S.C.C. 574 6. 1990 (3) A.L.T. 179 (D.B.) 7. AIR 1972 S.C. 1863 8. 1984 (2) A.P.L.J. 44 (S.N.) 9. AIR 1978 S.C. 851 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SIXTEENTH DAY OF NOVEMBER TWO THOUSAND AND FOUR PRESENT THE HON'BLE MR JUSTICE B.PRAKASH RAO WRIT PETITION Nos.18070of 2004, 18052 of 2004, 19088 of 2004, 20610 of 2004 and 18181 of 2004 1)WRIT PETITION NO : 18070 of 2004 Between: Toddy Tappers Cooperative Society Kawadiguda, Kawadiguda, Hyderabad, rep by its President Mr.D. Narsimha Goud, S/o. Late Rajaram ..... PETITIONER AND 1 The Proh. & Excise Inspector, SHO, Musheerabad, Hyderabad. 2 The Proh. & Excise Superintendent Hyderabad District at Hyderabad. 3 The Commissioner of Proh. & Excise, Govt. of A.P. at Hyderabad. 4 The Govt. of A.P. Rep by its Secretary, Revenue (Excise-II) Department, Secretariat, Hyderabad. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ of Mandamus, or any other appropriate writ, order or direction, declaring the action of the respondents in closing down the toddy shop of the petitioner society without issuing a notice or any order and preventing the petitioner society from conducting its business of tapping, transporting and selling of toddy as illegal, arbitrary, high handed, against principles of natural justice, and violative of Art.21 of constitution of India and further direct the respondents not to interfere with the lawfull business of tapping, transportation and sale of the toddy of the petitioner society. Counsel for the Petitioner: MR.T.AMARNATH GOUD Counsel for the Respondents : GP FOR PROH. & EXCISE 2) WRIT PETITION NO : 18052 of 2004 Between: Toddy Tappers Cooperative Society Old Bhoiguda, Secunderabad, Hyderabad District, rep. by its President Mr.M.Yella Goud, S/o Nara Goud. ... Petitioner AND 1 The Proh. & Excise Inspector, SHO, Secunderabad, Hyderabad 2 The Proh. & Excise Superintendent, Hyderabad District at Hyderabad 3 The Commissioner of Proh. & Excise, Govt.of A.P., at Hyderabad 4 The Govt.of A.P. rep.by its Secretary, Revenue (Excise-II) Department, Secretariat, Hyderabad .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ of Mandamus, or any other appropriate Writ, Order or direction, declaring the action of the respondents in closing down the toddy shop of the petitioner society without issuing a notice or any order and preventing the petitioner society from conducting its business of tapping, transporting and selling of toddy as illegal, arbitrary, high handed, against principles of natural justice, and violative of Art.21 of Constitution of India and further direct the respondents not to interfere with the lawful business of tapping, transportation and sale of the toddy of the petitioner society. Counsel for the Petitioner: MR.T.AMARNATH GOUD Counsel for the Respondents.: GP FOR PROHIBITION & EXCISE 3) WRIT PETITION NO : 19088 of 2004 Between: 1 Toddy Tappers Cooperative Society Humayunnagar, Humayunnagar, Hyderabad, rep by its President, Mr. Jaya Simha Goud, S/o. Yadaiah 2 Toddy Tappers Cooperative Society Asifnagar, Asifnagar, Hyderabad rep by its President Mr. B. Narsing Goud, S/o. Rajalingam … Petitioners AND 1 The Proh. & Excise Inspector, SHO, Golconda, Hyderabad. 2 The Proh. & Excise Superintendent, Hyderabad District at Hyderabad. 3 The Commissioner of Proh. & Excise, Govt. of A.P. at Hyderabad 4 The Govt. of A.P., rep by its Secretary Revenue (Excise-II) Department, Secretariat, Hyderabad. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ of Mandamus, or any order appropriate writ, order or direction, declaring the action of the respondents in closing down the toddy shop of the petitioners societies without issuing a notice or any order and preventing the petitioners societies from conducting their business of tapping, transporting and selling of toddy as illegal, arbitrary, high handed, against principles of natural justice, and violative of Art.21 of Constitution of India and further direct the respondents not to interfere with the lawful business of tapping, transportation and sale of the toddy of the petitioners societies. Counsel for the Petitioners: MR.T.AMARNATH GOUD Counsel for the Respondents : GP FOR PROHIBITION & EXCISE 4)WRIT PETITION NO : 20610 of 2004 Between: 1 Toddy Tappers Cooperative Society, Addagutta, Hyderabad, rep. by its President, Laxminarayana Goud. 2 Venu Gopal, S/o. Ramulu, R/o. Hyderabad. … Petitioners AND 1 State of A.P., rep. by its Spl. Chief Secretary, Revenue ( Excise-II) Department, Secretariat, Hyderabad. 2 The Commissioner of Prohibition & Excise, Govt of A.P. at Hyderabad. 3 The Proh. & Excise Superintendent, Hyderabad District at Hyderabad. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to Issue an appropriate writ or order or direction one in the nature of writ of mandamus; i) declaring the impugned action of the respondents in not allowing the petitioners to continue their toddy business, as arbitrary, illegal, and violative of Art. 14,21, 38,39 and 46 of the Constitution of India; ii)direct the respondents to permit the petitioners to continue their business notwithstanding distance rule as contained in Para-1 of Annexure to G.O.Ms.No.767 dt. 29.9.2004 of Respondent-1. iii) alternatively to declare Para-1 of Annexure to G.O.Ms.No.767 dt. 29.9.2004 of Respondent-1 as arbitrary, illegal and the same may be struck down; costs be awarded to the petitioners;. Counsel for the Petitioners: MR.T.AMARNATH GOUD Counsel for the Respondents : GP FOR PROHIBITION & EXCISE 5)WRIT PETITION NO : 18181 of 2004 Between: Bandamaisammanagar Toddy Tappers Cooperative Society, Lower Tank Bund, Hyderabad, Hyderabad district, rep. by its President S. Sreeramulu Goud, ..... PETITIONER AND 1 The Government of Andhra Pradesh, Prohibition & Excise Department, rep. by its Secretary, Secretariat, Hyderabad. 2 The Commissioner of Prohibition & Excise, Government of Andhra Pradesh, Hyderabad. 3 The Prohibition & Excise Superintendent, Hyderabad District at Nampally, Hyderabad. 4 The Prohibition & Excise Inspector, Musheerabad, Hyderabad. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ, or Order or direction more particularly one in the nature of "Writ of Mandamus" by declaring the action of the respondents in closing down the Toddy Shop of the Petitioner Society without issuing any notice or order and preventing the petitioner society from conducting its business of tapping, transporting and selling of toddy as illegal, arbitrary, violative of Principles of Natural Justice and also violative of Articles 14, 19(1)(g) and 21 of the Constitution of India besides against to the Excise (Toddy) Policy Guidelines issued in G.O.Ms.No.767 Revenue (Ex.II) Department dated 29-09-2004 and consequently direct the respondents not to interfere with the lawful business of tapping, transportation and sale of the toddy by the petitioner society. Counsel for the Petitioner: MR.V.AJAYAKUMAR Counsel for the Respondents : GP FOR PROHIBITION & EXCISE The Court made the following : THE HON’BLE SRI JUSTICE B.PRAKASH RAO WRIT PETITION Nos.18070of 2004, 18052 of 2004, 19088 of 2004, 20610 of 2004 and 18181 of 2004 COMMON ORDER: Since common question is involved in all these Writ Petitions, they are being taken up together for disposal. Heard Sri K.Ramakrishna Reddy and Sri D.Prakash Reddy, learned Senior Counsel appearing on behalf of the petitioners-societies, and the learned Advocate General on behalf of the respondents. In all these Writ Petitions, the petitioners, who are toddy tappers co- operative societies, seek a Writ of Mandamus declaring action of the respondents in closing down toddy shops of their societies without issuance of notice or any order, and preventing them from conducting business of tapping, transporting and selling of toddy as illegal, arbitrary apart from opposed to principles of natural justice and violative of Article 21 of the Constitution of India. The facts which are necessary for disposal of these Writ Petitions are that the petitioner societies were given licences in the year 2003 for varying periods, some restricting to the excise year 2003-2004 and some as a permanent basis, in terms of the Excise Policy at the relevant period especially as contained in G.O.Ms.No.998 Revenue (Excise-II) Department, dated 01.10.2003. In pursuance of the said licences, the petitioners are carrying on their respective business, which caters to the needs of several members of the respective societies. It is the case of the petitioners that the policy to grant licence for such longer period is based upon socio-welfare measure and to ameliorate the conditions of the poor tappers. However, under the present policy issued for the year 2004-2005 in G.O.Ms.No.767 Revenue (Excise-II) Department, dated 29.09.2004, certain restrictions in regard to the toddy shops have been brought in, whereby such shops to be established only where the trees are available within a distance of 50 KMs from the periphery of the village/town/ Municipality/Municipal Corporation. As a result, the shops existing in the twin cities, which are getting their allotments of trees from different far off places, are virtually asked to be closed down. The further case of the petitioners is that having regard to the subsistence of the licences for more than five years, the respondents can not impose any such restrictions or stop the business as long as they subsist. It is their further case that no action has been taken for cancellation of their licences nor any show cause notice was given to them to explain, thus, denying the petitioners the legitimate opportunity of hearing. Further, there is also no justification for such stoppage of business of petitioners’ shops suddenly, more so when they are entitled to run the business under the licences which have already been granted. Thus, principally it is contended that the impugned action on the part of the respondents in orally stopping their business is illegal. It is also further contended that the aforesaid G.O.No.767 can not have any retrospective in its operation in respect of the licences which have already been granted prior to its enforcement and it can be made applicable only in case of future licences. That apart, grant of licences in favour of the petitioners- societies to ameliorate the conditions of poor tappers being a socio welfare policy, there can not be sudden stoppage nor can be interdicted with, in such a fashion. At the fag end of the arguments, it was contended on behalf of the petitioners-societies that even though in these Writ Petitions, there is no challenge as to the validity of the present policy issued, however, in one case they did make one such challenge. Hence, these Writ Petitions. In the counter affidavits filed on behalf of the respondents herein, it was submitted that the petitioners-societies were allotted trees as per the Excise Policy for the year 2003-2004. It is contemplated now under the present policy for the year 2004-2005 that the trees will be allotted for the shops located in the local villages, mandals, districts, which are located within 50KMs distance from the location of the trees. However, having regard to the existence of the petitioners’ toddy shops where such trees do not exist within the prescribed distance, no tree can be allotted to them under the Policy. It is also pointed out that having regard to the scheme of the Act, the policy and licence can only be made applicable for one year and not beyond. Though in the earlier policy for the year 2003-2004, instructions were issued for grant of renewal of the licences year after year, having found certain difficulties, the present policy has been enunciated only with a view to facilitate quick transport of toddy and consumption of the same within 4 to 5 hours by consumers, and thereby avoiding any dilution or adulteration in between. Further, it avoids pooling of quantities obtained from different topes and transporting long distances covering about 400 to 500 KMs thereby affecting the quality. The restriction now imposed would prevent adulteration of toddy with obnoxious substances like Chloral Hydrate, Diazepam, etc. and provide pure and wholesome toddy to the consumers. It is now known fact that there are no trees in and around Hyderabad city, which are capable of yielding toddy, and the same is being brought from far off distant places like Anantapur, Prakasam and Karimnagar, etc., and water is added for dilution and certain drugs were added to increase its intoxicating quality, which is highly dangerous to human system and therefore, the present move is only with a view to protect general public from dangerous effects of these drugs. It was pointed out that from 2002-2004, about 3095 cases were booked, 99 persons died due to drinking adulterated toddy, 2081 persons have been taken into custody and 312983 litres of toddy had to be destroyed, and 605 KGs of Diazepam and 104 vehicles were seized and 1043 licences had to be suspended. Hence, there are no merits in the contentions of the petitioner societies in regard to the claim for continuance of their business in pursuance of the licences which have already been granted. It is made clear that no action has been taken affecting licences with the petitioner societies. The change is only in regard to allotment of trees. Hence, there are no merits in the Writ Petitions and the same are liable to be dismissed. Sri K.Ramakrishna Reddy and Sri D.Prakash Reddy, learned Senior Counsel appearing on behalf of the petitioners-societies, strenuously contend that having regard to the policy enunciated earlier under the provisions of Section 17 and Rule 3 of the A.P.Excise (Lease of Right to Sell Liquor in Retail) Rules, 1969, the petitioners, who are holding valid licences, are entitled to continue the business. However, the action of the respondents herein in stopping the business of petitioners-societies suddenly by oral orders, without any notice and without show-cause and especially without cancelling licences, is unsustainable, and further the present policy can not be given retrospective effect. It is argued that the petitioners are sufficiently protected under the socio-welfare policy measures and therefore, their rights to carry on the business as flown from the existing licences, can not be affected. Further, having regard to these licences for the respective periods and in some cases permanent, the respondents have no power or authority or jurisdiction to affect the same in any way. It is further contended by placing reliance on the decision of this Court in The Guntakal Toddy Tappers Co- opeative Society, Gooty V., Govt. of A.P. and State of Andhra Pradesh & others V. Guntakal Toddy Tappers Co-operative Society & another that in a similar circumstances where the period of existing licence holders was sought to be affected, the courts have held otherwise. Hence, the petitioners are entitled to the relief as sought for. The learned Advocate General appearing on behalf of the respondents herein by taking through various aspects especially the number of shops and the distance travelled, submitted that it is only keeping in view the public health and especially the long distance which the toddy has to pass through before reaching the twin cities giving raise to scope for not only dilution but also adulteration, the present policy has been enunciated restricting the existence of shops within 50 KMs range from the trees so as to provide the consumers with fresh toddy, unadulterated and undiluted. Further, by placing reliance on Government of Maharashtra & others V. Deokar’s Distillery and Secretary to Govt., Tamil Nadu & another Vs. K.Vinayagamurthy it is contended that since it is a policy decision of the Government, the same can not be interdicted by this Court in exercise of powers under Section 226 of the Constitution of India. Considering the submissions made and on perusal of the material, the question which falls for consideration in all these Writ Petitions is as to whether the petitioners, who are admittedly holding licences, are in any way affected by the Excise Policy of the Government for the year 2004-2005 ? Succinctly, it is now well established that a citizen has no fundamental right to trade or business in liquor as reiterated in Kohday Distilleries Ltd. & others V. State of Karnataka and others, which lays down as under: “The law on the subject relating to right to carry on trade or business in potable liquor can be summarized thus: a)The rights protected by Article 19(1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, to be read along with the said qualifications. Even the rights guaranteed under the Constitutions of the other civilized countries are not absolute but are read subject to the implied limitations on them. Those implied limitations are made explicit by clauses (2) to (6) of Article 19 of our Constitution. b) The right to practise any profession or to carry on any occupation, trade or business does not extend to practicing a profession or carrying on an occupation, 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 activities which are immoral and criminal and in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public, i.e. res extra commercium,(outside commerce). There can not be business in crime. c)Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence, the trade or business in liquor can be completely prohibited. d) Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country. The State has, therefore, the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage, both because it is inherently a dangerous article of consumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purposes. e) For the same reason, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19(6) or even otherwise. f)For the same reason, again, the State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. The restrictions and limitations on the trade or business in potable liquor can again be both under Article 19(6) or otherwise. The restrictions and limitations can extend to the State carrying on the trade or business itself to the exclusion of and elimination of others and/or to preserving to itself the right to sell licences to do trade or business in the same, to others. g)When the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State can not make discrimination between the citizens who are qualified to carry on the trade or business. h)The State can adopt any mode of selling the licences for trade or business with a view to maximize its revenue so long as the method adopted is not discriminatory. i)The State can carry on trade or business in potable liquor notwithstanding that it is an intoxicating drink and Article 47 enjoins it to prohibit its consumption. When the State carries on such business, it does so to restrict and regulate production, supply and consumption of liquor which is also an aspect of reasonable restriction in the interest of general public. The State can not on that account be said to be carrying on an illegitimate business. It carries on business in products which are not declared illegal by completely prohibiting their production but in products the manufacture, possession and supply of which is regulated in the interests of the health, morals and welfare of the people. It does so also in the interests of the general public under Article 19(6). j)The mere fact that the State levies taxes or fees on the production, sale and income derived from potable liquor whether the production, sale or income is legitimate or illegitimate, does not make the State a party to the said activities. The power of the State to raise revenue by levying taxes and fees should not be confused with the power of the State to prohibit or regulate the trade or business in question. The State exercises its two different powers on such occasions. Hence, the mere fact that the State levies taxes and fees on trade or business in liquor or derives income from it, does not make the right to carry on trade or business in liquor a fundamental right, or even a legal right when such trade or business is completely prohibited. k)The State can not prohibit trade or business in medicinal and toilet preparations containing liquor or alcohol. The State, can, however, under Article 19(6) place reasonable restrictions on the right to trade or business in the same in the interests of general public. l)Likewise, the State can not prohibit trade or business in industrial alcohol which is not used as a beverage but used legitimately for industrial purposes. The State, however, can place reasonable restrictions on the said trade or business in the interests of the general public under Article 19(6) of the Constitution. m)The restrictions placed on the trade or business in industrial alcohol or in medicinal and toilet preparations containing liquor or alcohol may also be for the purposes of preventing their abuse or diversion for use as or in beverage. The contention that if a citizen has no fundamental right to carry on trade or business in potable liquor, the state is also injuncted from carrying on such trade, particularly in view of the provisions of Article 47 is fallacious.” The same principle is found place by no stress and reiteration in Government of Maharashtra & others V. Deokar’s Distillery case ( 3 supra). There is no dispute to the basic fact that the petitioners are toddy co- operative societies for whom licences have been granted as per the Excise Policy for the year 2003-2004 for varying periods including up to the year 2007 and in some cases permanently. These societies are constituted by several members hailing from poor tappers’ communities