HON’BLE THE CHIEF JUSTICE SRI G.S. SINGHVI AND HON’BLE SRI JUSTICE G. V. SEETHAPATHY Writ Petition No.9662, 11640, 13042, 13342, 13349, 13350, 13360, 13433, 13458, 13459, 13460, 13470, 13502, 13668, 13767, 13768, 13769, 13774, 13777, 13779, 13818, 13827, 13865, 13883, 13890, 13892, 13907, 13976, 14100 and 14250 of 2006 Writ Petition No.13042 of 2006: Between: B. Muralidhar Reddy and others … Petitioners And The Government of Andhra Pradesh, Rep. by its principal Secretary, Revenue Department, Hyderabad and others … Respondents :: ORDER:: For petitioners in Writ Petition Nos.13042 and 13892 of 2006 Sri S. Ramachandra Rao, Senior Advocate, assisted by Sri K.R. Prabhakar, Advocate For petitioners in Writ Petition Nos.13349, 13470, 13768, 13342, 13458, 14250, 13502, 13368 and 14100 of 2006: Sarvasri G. Mohan Rao, A. Ravinder, M. Subrahmanyam, P. Naveen Rao, Advocates. For petitioners in Writ Petition Nos.13350, 13360, 13433, 13459, 13460, 13767, 13769, 13774, 13777, 13779, 13818, 13827, 13865, 13883, 13890, 13907, and 13976 of 2006: None Sri K. Pratap Reddy, Senior Advocate,Amicus in W.P. No.11640 of 2006, Counsel for Respondents: Smt.G. Malleswari, Government Pleader for Prohibition and Excise August 28, 2006 Per G.S. Singhvi, C.J. Whether the amendment made in Rule 27 (1) of the Andhra Pradesh Excise (Lease of Right of Selling by Shop and Conditions of Licence) Rules, 2005 (for short, ‘the Shop Rules’) vide G.O.Ms.No.598, Revenue (Ex.II), dated 26-5-2006, which was published in Andhra Pradesh Gazette (Extra-Ordinary) dated May 26, 2006 extending the restriction of 100 meters against the location of liquor shops from the places of public worship, educational institutions and hospitals to Municipal Corporation areas is violative of Articles 14, 19 and 300-A of the Constitution is the question which arises for determination in these petitions (except taken up Writ Petition Nos.9662 and 11640 of 2006) filed under Article 226 of the Constitution of India. Writ Petition No.9662 of 2006 is an off-shoot of order dated 10-4- 2006 passed by the Court in Writ Petition No.482 of 2006 whereby, while disposing of that writ petition, the Court suo motu directed the Commissioner of Prohibition and Excise to submit a report to the Court regarding location of liquor shops in violation of Rule 27 (1) of the Shop Rules. Writ Petition No.11640 of 2006 was registered as a taken up petition on the basis of letter dated 2-6-2006 sent by Smt.C. Jayasree, Headmistress, Sri Telaprolu Bapanaiah English Medium High School, Vijayawada with the complaint that “Chandamama Wine Shop” was located at a distance of 20 feet from the school in complete violation of the norms laid down by the government and prayed that the respondents be directed to remove the liquor shop from the vicinity of the school. The Facts: For the sake of convenience, we have taken the facts from Writ Petition No.13042 of 2006 filed by B. Muralidhar Reddy and nine others for quashing Clause 15 of G.O.Ms.No.598, Revenue (Ex.III) Department, dated 26-5-2006 whereby Rule 27 of the Shop Rules was amended and for issue of a mandamus to the respondents to allow them to run liquor shops in the existing premises by suspending the operation of the distance rule. All the petitioners are engaged in the sale of Indian Made Foreign Liquor (IMFL) and Foreign Liquor (FL) at different places in Hyderabad. They were granted licences by the competent authority in accordance with the provisions of the Andhra Pradesh Excise Act, 1968 (for short, ‘the Act’) and rules framed thereunder. The term of licences issued in their favour under the Shop Rules ended on 30th June, 2006. In the meanwhile, Collector and District Magistrate, Hyderabad issued notice dated May 27, 2006 for conducting auction for grant of lease of right to sell IMFL/FL by shop for a period of two years commencing from 1-7-2006. All the petitioners submitted their respective tenders for different shops and gave highest bids. Their bids were accepted by the competent authority. Thereafter, Prohibition and Excise Superintendent, Dhoolpet, Hyderabad issued letters dated 5-6-2006 to all the petitioners requiring them to complete the formalities for grant of licence in Form A-4. One of the conditions enumerated in the letters was that the premises should be located in conformity with Rule 27 (1) of the Shop Rules, which had been amended vide G.O.Ms.No.598, Revenue (Ex.II) Department, dated 26-5-2006. The petitioners did not comply with the said condition. Instead, they filed the writ petition under Article 226 of the Constitution with the complaint that the respondents are not allowing them to operate shops from the present sites on the ground that the same are located within 100 meters of the places of public worship or educational institutions or hospitals. The petitioners have relied on the unamended Rule 27 (1) and averred that the amendment made vide G.O.Ms.No.598 dated 26-5-2006 prohibiting location of shops within 100 meters from the places of public worship, educational institutions and hospitals is discriminatory and violative of their fundamental right to equality guaranteed under Article 14 of the Constitution. They have referred to Rule 6 of Andhra Pradesh Excise (Grant of Licence of Selling by Bar and Conditions of Licence) Rules, 2005 (for short, ‘the Bar Rules’) to show that there is no prohibition on the running of bar within 100 meters of the places for public worship, educational institutions and hospitals in the municipal corporation areas and pleaded that if liquor can be sold and consumed in the bar situated within 100 meters of places of public worship, educational institutions and hospitals, there is no justification to impose prohibition on the running of shops within 100 meters of such places and institutions. They have further averred that location of liquor shops within 100 meters of the places of public worship, educational institutions and hospitals does not in any manner affect the people living in the vicinity or those going to the places of public worship or educational institutions or hospitals because the liquor is required to be sold in sealed bottles and the same cannot be consumed at the shop. In the counter filed by Sri B.R. Meena, Commissioner, Prohibition and Excise, Andhra Pradesh, it has been averred that the restriction contained in the amended Rule 27 (1) of the Shop Rules is not discriminatory because the lease and licences are granted for operating shops and bars under different sets of rules i.e., the Shop Rules and the Bar Rules. According to Sri Meena, Rule 27 (1) of the Shop Rules was amended keeping in view the order passed by the High Court in Writ Petition No.482 of 2006. In para 7 of his affidavit, Sri Meena has averred that Rule 27 (1) was amended before commencement of the fresh lease period i.e., 1-7-2006 and, therefore, the same is binding on the petitioners. In the remaining petitions, except Writ Petition Nos.9662 and 11640 of 2006, the petitioners have made prayer similar to the one made in Writ Petition No.13042 of 2006. In Writ Petition No.13668 of 2006, the petitioners have further prayed for issue of a direction to the respondents to allow them to operate the shops as per the allotment letter dated 30-6-2006 issued by the concerned Prohibition and Excise Superintendent. Arguments: Sri S. Ramachandra Rao, Senior Advocate appearing for the petitioners in Writ Petition Nos.13042 and 13892 of 2006 and Sarvasri G. Mohan Rao, A. Ravinder, M. Subrahmanyam and P. Naveen Rao, Advocates appearing for the petitioners in Writ Petition Nos.13349, 13470, 13768, 13342, 13458, 14250, 13502, 13668 and 14100 of 2006 respectively argued that the amended Rule 27 (1) should be declared violative of Article 19 (1)(g) and struck down because the same imposes unreasonable restriction on the petitioners’ fundamental right to trade and business. Learned counsel emphasized that the petitioners had established shops at the present sites by spending huge amounts because they were hopeful of continuing business for a number of years, but now they are being asked to shift the shops by invoking amended Rule 27 (1) of the Shop Rules and, if the impugned rule is not struck down, they will suffer huge financial loss. Learned counsel further argued that the prohibition contained in amended Rule 27 (1) of the Shop Rules against the location of the licensed premises for sale of liquor through shops within 100 meters of the places of public worship, educational institutions and hospitals should be declared discriminatory and violative of Article 14 because there is no such restriction on the sale and consumption of liquor in the bar situated within 100 meters of such places and institutions. To substantiate their argument, learned counsel referred to the restriction contained in Rule 6 of the Bar Rules, which prohibit location of bar up to a distance of 50 meters only from the places of public worship or educational institutions or hospitals in the Corporation areas. They submitted that if a person operating the bar can sell the liquor within 50 meters from the place of public worship or educational institution or hospital, there is no rationale, rhyme, reason or justification to prohibit location of shops within 100 meters of such places or institutions etc. Sri S. Ramachandra Rao emphasized that his clients have been doing business of sale of liquor for the last twenty years in the shops situated within 100 meters of the places of public worship, educational institutions and hospitals and have given bids much higher than the upset price specified in the notice issued by the District Magistrate for auction of the leases with the hope that they will be able to do business of selling liquor for next two years and argued that they cannot be deprived of the right to carry on trade/business by imposing an unreasonable restriction regarding location of shops within 100 meters from the places of public worship or educational institutions or hospitals. Sri Ramachandra Rao also invoked the doctrine of legitimate expectation and argued that the respondents should not be allowed to compel the petitioners to shift their places of business from the present sites because they had given substantially high bids keeping in view the existing location of the shops. He was joined by other advocates in submitting that amendment made in Rule 27 (1) was not brought to the notice of the prospective bidders including the petitioners and, therefore, the amended rule cannot be made applicable to the auction held for grant of lease for the years 2006-2008. Learned counsel appearing for other petitioners pointed out that in a number of cases, the educational institutions, temples, mosques, churches and hospitals have come up after their clients had established shops for sale of liquor and submitted that the prohibition contained in Rule 27 (1) in the matter of location of liquor shops should not be applied to their cases. Smt.G. Malleswari, learned Government Pleader for Prohibition and Excise, invited our attention to Andhra Pradesh Gazette No.34 dated May 26, 2006 to show that amendment made in Rule 27 vide G.O.Ms.No.598, Revenue (Ex.II) Department, dated May 26, 2006 was published before issue of notice dated 27-5-2006 by Collector and District Magistrate, Hyderabad inviting tenders for grant of lease for shops for two years commencing from 1-7-2006. She submitted that all the bidders, including the petitioners, were very much aware of the amendment made in the Shop Rules because specific reference to G.O.Ms.No.598 dated 26-5-2006 was incorporated in the notice of auction published in the official gazette. Learned Government Pleader then argued that the petitioners do not have any fundamental right to trade or business in liquor and the restriction imposed on the location of shops within 100 meters of the places of public worship, educational institutions and hospitals does not violate their legal or fundamental rights. She then submitted that the impugned amendment cannot be struck down because the same has been carried out in accordance with the directions given by the Court in Writ Petition No.482 of 2006. Sri K. Pratap Reddy, Senior Advocate, who appeared as amicus in Writ Petition No.11640 of 2006, emphasised that with a view to achieve the objective set out in Article 47 of the Constitution, namely, raising the level of nutrition and the standard of living of the people and the improvement of public health, the Government of Andhra Pradesh had imposed total prohibition on the sale and consumption of liquor in the State, which remained in force till October 02, 1969, but, thereafter, in the garb of earning revenue, the government allowed sale and consumption of liquor. Sri Reddy submitted that even then restrictions were imposed on the location of liquor shops etc. within 500 meters of the public places of worship, educational institutions, hospitals etc., but in recent years successive governments have succumbed to the pressure of liquor lobby and reduced the restriction to 100 meters, which was further reduced to 50 meters in the case of municipal corporation areas. Learned Senior Counsel argued that in the name of garnering more revenue, the State cannot abandon its constitutional obligation under Articles 39 (f) and 47 of the Constitution, which ordain that the State policy should be directed to ensure that childhood and youth are protected against exploitation and against moral and material abandonment and the level of nutrition and standard of living of the people is raised and public health is improved by bringing about prohibition on the consumption of liquor. He further argued that the restriction contained in amended Rule 27 (1) must be treated as reasonable because the same is in consonance with the spirit of Article 47 of the Constitution. He submitted that the serenity, calm, peace and tranquility, which is sine qua non for places of public worship like temples, mosques, churches and educational institutions and hospitals will be put to grave peril if liquor shops and bars are allowed to be located within 100 meters of such places and institutions. Sri Reddy then submitted that the learned Single Judge ought not to have issued interim mandatory direction for grant of licence to the petitioners ignoring order dated 10-4-2006 passed by the Division Bench in Writ Petition No.482 of 2006 and the fact that Rule 27 (1) of the Shop Rules had been amended before issue of notices by the District Magistrate inviting tenders for auction of shops for the period of two years i.e., 2006-2008. He argued that it is one of the basics of judicial discipline that the Single Benches should follow the ratio of the judgments of the Division Bench and refrain from passing contrary orders. In support of this submission, Sri Reddy relied on the judgments of the Supreme Court in Lala Shri Bhagwan v. Ram Chand[1], Union of India v. Godfrey Philips India Ltd.[2], and Delhi Development Authority v. Ashok Kumar Behal[3]. Constitutional and Legal provisions: “Constitution of India: Article 39. Certain principles of policy to be followed by the State: The State shall, in particular, direct its policy towards securing- (a) that the citizen, men and women equally, have the right to an adequate means of livelihood; (b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment: (d) that there is equal pay for equal work for both men and women; (e) that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength; (f) that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment. Article 47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health: The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. Unamended Rule 27 of the Shop Rules (as provided by the learned counsel for the petitioners along with Writ Petition No.13042 of 2006): 27. Selection of Premises:- (1) The successful tenderer subject to the approval of Prohibition and Excise Superintendent, shall select suitable premises for sale of IL & FL within the Municipal Corporation, Municipality, village/town/city or area/locality as the case may be as notified in the District Gazette. It shall be at least 100 meters away from the place of Public worship, Educational Institutions, Hospitals and 50 meters away from Highways except in Municipal Corporations and 5 kms. belt area of the periphery of Municipal Corporations. Explanation:- For the purpose of this rule- (a) “place of public worship’ means a temple registered with the Endowment Department, Mosque registered with Wakf Board and Church and includes such other religious institutions, as the State Government may by order specify in this behalf, (b) “Educational Institutions” means any Primary School, Middle School and High School recognized by the State Government or Central Government, Junior College or any College affiliated to any University established by law, (c)“High Way” means National High Way or State High way and shall not passes within the limits of Municipal Corporation, Municipal Council or the Gouthan in any village or Panchayat area, (d)“Hospital” means any hospital which is managed or owned by a local authority, State Government or Central Government or any private hospital having a provision of at least thirty (30) beds, (2) The distances referred above shall be measured from the mid-point of the entrance of the licensed premises along with the nearest path by which pedestrian ordinarily reaches to the mid-point of the nearest gate of the institution or a place of public worship, if there is a compound wall and if there is no compound wall to the mid-point of the nearest entrance of the institution/place of public worship. (3) The boundaries of the premises shall be indicated in the Licence. (4) There shall be a single door for entry and exit and sales shall be conducted through without giving entry to the customers inside the premises. Amendments in Rule 27 of the Shop Rules (as printed in the Andhra Pradesh Gazette No.34 dated 26-5-2006): (1) In sub-rule (1),- a) the words “except in Municipal Corporations and 5 kms. belt area of the periphery of Municipal Corporations” shall be omitted; b) in Explanation for the item (c), the following shall be substituted, namely, - “(c) High Way” means National Highway or State Highway and shall not include the part of the National Highway or State Highway which passes within the limits of Municipal Corporation, Municipality or the Gouthan in any village or Panchayat area” (2) in sub-rule (2), in the third proviso, for the words “100 meters” the word “100 meters away” shall be substituted; (3) in sub-rule (5), the word “through” shall be omitted.” Rule 6 of the Bar Rules 6. Restrictions on the grant of Licence: i) Unless the premises has:- a) a minimum plinth area of 100 sq. meters. b) a separate bar room and Restaurant within the licensed premises for consumption. c) Sanitary equipment like wash basin, water closet, d) Facility for cooking and serving complete meals of good quality to the consumers as licensed by local authority. e) Air conditioning or Air cooling facility where liquor is consumed. f) Adequate vehicle parking arrangement. ii) Within 100 meters from educational institution recognized by the Government, places for public worship such as Temples registered by the Endowments Department, Mosques registered with the Wakf Board, Churches and Hospitals. Provided that in the limits of Municipal Corporations and within the belt area of 5 kms. of the periphery of Municipal Corporations, the distance restriction mentioned above shall be 50 meters. iii) Within 500 meters of predominantly residential area but licenses may however be sanctioned if the proposed premises is located on a main road used for shopping purposes. Provided that the restrictions in clauses (i) to (iii) shall not be applicable to Star Hotels (3 Star and above) certified by the Tourism Department of the State or Central Government. iv) within 50 meters of a Highway v) Unless the applicant produces the permission or the no objection certificate from the local authority concerned for sale of liquor at the premises by the applicant. vi) unless the applicant produces the lease deed on a Stamp paper for the proposed licensed premises from the owner of the premises. Explanation: a) “Place of public worship” means a temple registered with the Endowments Department, Mosque registered with Wakf Board and Church and includes such other religious institutions, as the State Government may by order specify in this behalf; b) “Educational Institutions” means any Primary school, Middle School and High School recognized by the State Government or Central Government, Junior College or any College affiliated to any University established by law: c) “High Way” means National High way or State Highway and shall not include the part of the National Highway or State Highway which passes within the limits of Municipal Corporation, Municipal Council or the Gouthan in any village or Panchayat area. d) “Hospital” means any hospital which is managed or owned by a local authority, State Government or Central Government or any private hospital having a provision of at least thirty (30) beds. The distances referred above shall be measured from the mid-point of the entrance of the proposed Bar premises along with the nearest path by which pedestrian ordinarily reaches to the mid-point of the nearest gate of the institution or a place of public worship, if there is a compound wall and if there is no compound wall to the mid-point of the nearest entrance of the institution/place of public worship or to the entrance of the first house of the predominantly residential area.” Questions to be determined: From the pleadings and arguments of the learned counsel, the following questions arise for determination by the Court: 1) Whether the petitioners have fundamental right to trade/ business in IMFL/FL and whether amended Rule 27 (1) of the Shop Rules is violative of the petitioners’ fundamental right guaranteed under Article 19 (1)(g) of the Constitution? 2) Whether amended Rule 27 (1) of the Shop Rules is violative of Article 14 of the Constitution? 3) Whether the doctrine of legitimate expectation can be invoked for directing the respondents to allow the petitioners to continue to operate liquor shops at the present locations notwithstanding the fact that the same fall within the restriction imposed by amended Rule 27 (1) of the Shop Rules? 4) Whether the learned Single Judge should have passed mandatory interim direction for issue of licences in favour of the petitioners ignoring order dated 10-4-2006 passed by the Division Bench in Writ Petition No.482 of 2006 and amendment made in Rule 27 (1) vide G.O.Ms.No.598 dated 26-5-2006? Re: Question No.1 We have given serious thought to the entire matter. The question whether the petitioners have fundamental right to trade or business in liquor has to be answered in negative in view of the judgments of the Supreme Court in Khoday Distilleries Ltd. v. State of Karnataka[4] and State of A.P. v. Mcdowell & Co.[5] I n Khoday Distilleries (supra), the Supreme Court considered almost all judicial precedents on the subject and laid down the following propositions: (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