IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY NINTH DAY OF FEBRUARY TWO THOUSAND AND EIGHT PRESENT HON'BLE MR JUSTICE R.SUBHASH REDDY WRIT PETITION No.26624 of 2007 Between: M/s.Kokila Restaurant and Bar, rep. by its Proprietor Gopu Venkata Rami Reddy, S/o. Govinda Reddy, C/o.14-1-33, Lal Bahadur market centre, Narasaraopeta, Guntur District ... Petitioner AND 1 The Government of AP., Prohibition and Excise Department, Secretariat Buildings, Hyderabad, rep. by its Secretary, 2 The Commissioner , Prohibiton & Excise, AP Hyderabad, 3 The Deputy Commissioner of Prohibition and Excise Guntur, 4 M/s. Siva Priya Bar & Restaurant, rep. by its Proprietor, Sri S. Koti Reddy, R/o. Narasaraopet, Guntur District. ...Respondents Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an appropriate writ order or direction more particularly one in the nature of writ of mandamus declaring order of the 3rd respondent dated 17.11.2007 in CR.No.5200/2007/CPE/M.3 in refusing to grant licence to the petitioner to run the Restaurant and Bar at D.No.11-31-468, Palnadu Bus Stand Area, Narasaraopeta, Guntur District in spite of fulfilling all the conditions stipulated under the Rules, as arbitrary, discriminatory application of mind to the irrelevant factors non consideration of the relevant material available on record violative of principles of natural justice violative of the Fundamental Rights guaranteed under Articles, 14 and 19 of the Constitution of India part from being violative of the provisions of the AP Excise Act and AP Excise (Grant of Licence for Selling by Bar and Conditions of licence) Rules, and consequently set aside the same and direct the respondents to grant licence in favour of the petitioner in the aforesaid premises. Counsel for the Petitioner: Mr. V. VENKATARAMANA Counsel for Respondent Nos.1 to 3: GP FOR PROHIBITION & EXCISE. Counsel for Respondent No.4: Mr. P. Venugopal. The Court made the following: Order: The petitioner has questioned the validity of the order dated 17-11-2007, passed by the second respondent, Commissioner of Prohibition & Excise, A.P., Hyderabad, in CR.No.5200/2007/CPE/M.3, whereunder his application seeking prior clearance in Form-2A for establishment of restaurant and bar in premises bearing D.No.11-31-468, Palnadu Bus Stand Area, Narasaraopeta, Guntur District is rejected. 2. The grant of licence for sale of liquor, in an establishment licenced by the local authority to serve food such as a hotel or a restaurant, is governed by the rules titled as The Andhra Pradesh Excise (Grant of License of selling by Bar and conditions of licence) Rules, 2005 (for short ‘the Rules’) framed under Section 72 of the Andhra Pradesh Excise Act, 1968. Licence and licence period are defined under Rule 3(i) & (l) of the Rules, as per which, licence means licence granted under the said Rules and licence period means a period of 12 months beginning from the 1st July of the year and ending with 30th June of the succeeding year. The petitioner herein was granted licence in Form 2-B for sale of liquor in the name of Kokila Restaurant & Bar in the premises bearing D.No.14-1-33, Lal Bahadur Market Centre, Narsaraopet, Guntur District, during the excise year 2006-07. During the said licence period, he applied for shifting of the licenced premises from the aforesaid premises to the premises bearing D.No.11-31-468, Palnadu Bus Stand Area, Narsaraopet. The said application for shifting was considered, and order dated 11-07-2007 was passed by the second respondent granting permission for shifting. However, the fourth respondent, who is impleaded as a party respondent in this writ petition, questioned the said order in W.P.No.15355 of 2007. The said writ petition was dismissed by a learned single Judge of this court by order dated 15-09-2007 and the same was carried in appeal in W.A.No.811 of 2007. A Division Bench of this court, by order dated 11-10-2007, allowed the same, interpreting Rule 13(2) & (3) of the Rules framed in G.O.Ms.No.997 dated 24-05-2005. The application of the petitioner herein for shifting of the licenced premises from D.No.14-1-33, Lal Bahadur Market Centre, Narsaraopet to D.No.11-31-468, Palnadu Bus Stand Area, Narsaraopet was made on the ground that there was a division of the property of the licenced premises and after division sufficient area was not available, for running a bar & restaurant. When the said request of the petitioner was permitted by the respondents, the same was questioned mainly on the ground that, factually there was no such division and there was also no extraordinary circumstance to consider shifting, as contemplated under Rule 13 of the Rules. The Division Bench of this court, while allowing W.A.No.811 of 2007, by order dated 11-10-2007, observed that there was no consideration by the competent authority as to the existence of any valid reason to permit such shifting as contemplated under Rule 13 of the Rules. It is appropriate to refer to the relevant paragraph in the said order, and the same reads as follows: “ 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 licenced 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.” 3. While things stood thus, after the expiry of the licence period, the petitioner, in the excise year 2007-08, submitted fresh application on 11-10-2007 and 23-10-2007 seeking prior clearance as required under the Rules to establish a bar & restaurant in the premises bearing D.No.11-31-468, Palnadu Bus Stand Area, Narsaraopet. The competent authority, i.e. the Commissioner of Prohibition & Excise, without conducting any enquiry, summarily rejected the same, referring to the order of this court in W.A.No.811 of 2007. 4. The grievance of the petitioner in this writ petition is that the competent authority has not considered his application for grant of prior clearance as per the Rules framed under the A.P. Excise Act, 1968. It is stated that as much as the petitioner has applied for prior clearance to seek a fresh licence in the premises bearing D.No. 11-31-468, Palnadu Bus Stand Area, Narsaraopet, earlier orders of this court, which relate to the excise year 2006-07 will not come in the way of the petitioner, to consider his case for grant of prior clearance. 5. Counter affidavit is filed by the third respondent, Deputy Commissioner of Prohibition & Excise, narrating the facts leading to passing an order permitting the petitioner to shift the licenced premises during the excise year 2006-07. It is stated that the licence of the petitioner expired on 30-06-2007 and there was no renewal of licence in his favour in the excise year 2007-08. In the counter affidavit, it is stated that as much as shifting was not permitted by this court in view of the order dated 11-10-2007, passed in W.A.No.811 of 2007, and taking into consideration the order passed by this court, the impugned order was passed rejecting the application of the petitioner. Respondents, while pleading that prior clearance was refused by recording reasons and there is no violation of any right much less any fundamental right guaranteed under Articles 14 and 19 of the Constitution of India, prayed for dismissal of the writ petition. 6. The impleaded respondent, i.e. the fourth respondent, has filed counter affidavit stating that the Rules do not contemplate seeking prior clearance to run a bar, and, as such, the very application made by the petitioner seeking prior clearance was not in accordance with law. It is stated that, in view of the earlier order of this court in W.A.No.811 of 2007, the claim of the petitioner was rightly rejected by the authorities. 7. Heard Sri Vedula Venkataramana, learned counsel for the petitioner, learned Govt. Pleader for Prohibition & Excise for respondents 1 to 3 and Sri P. Venugopal for the impleaded fourth respondent. 8. In this case, it is not in dispute that the petitioner was granted licence in Form-2B as per the Rules for sale of liquor in glass in the premises bearing Door No. 14-1-33, Lal Bahadur Market Centre, Narsaraopet. The said licence was valid upto 30-06-2007. While it is true that during the licence period the petitioner made an application for shifting, however when it was considered and permission was granted, the same came to be questioned before this court by the impleaded fourth respondent, in W.P.No.15355 of 2007. When the said writ petition was dismissed by a learned single Judge of this court, W.A.No.811 of 2007 was filed. So far as shifting of the premises during the licence period is concerned, the same is governed by Rule 13 of the Rules. As per Rule 13 (3) of the Rules, no shifting of the licenced premises shall ordinarily be permitted during the licence period from one location to another. Shifting of licenced premises was sought by the petitioner during the licence period which ended by 30-06-2007. In that context, while interpreting the word ‘ordinarily’ used in Rule 13(3) of the Rules, the Division Bench of this court allowed the writ appeal filed by the impleaded fourth respondent mainly on the ground that no valid reason was indicated for permitting the petitioner for such shifting. But, however, when application was filed by the petitioner after expiry of the licence period, seeking prior clearance as contemplated under Rule 5(2) of the Rules for grant of fresh licence from the competent authority, the same was rejected now referring to the order of this court in the writ appeal referred above, without considering the same on merits. When application is filed seeking prior clearance for obtaining fresh licence in premises bearing D.No. 11-31-468, Palnadu Bus Stand Area, Narsaraopet, after the expiry of the earlier licence period, the competent authority should have considered as to whether such clearance can be given or not, by considering the same in accordance with the Rules. Merely because the request of the petitioner for shifting of the licenced premises during the previous excise year, which was acceded to by the authorities, is not approved by this court in the writ appeal referred above, the same is no ground at all to reject the application of the petitioner seeking prior clearance to obtain a fresh licence in the premises bearing D.No.11-31- 468, Palnadu Bus Stand Area, Narsaraopet, for the current excise year. The application for granting prior clearance under Rule 5(2) of the Rules framed under G.O.Ms.No.997 dated 24-05-2005 has to be considered on its own merits, with reference to such entitlement, under the Rules. The scope of the application for shifting the licenced premises will arise only during the licence period and within the framework of Rule 13 of the Rules. If a licencee seeks shifting of the licenced premises and as much as ordinarily such shifting is not permissible under Rule 13 of the Rules, unless a valid reason is shown, shifting cannot be permitted. But, however, when an application is filed for grant of prior clearance to seek a fresh licence in the licenced premises, it is obligatory on the part of the respondents to consider whether such application is in conformity with the Rules or not. As much as the order in this regard in W.A.No.811 of 2007 is confined to the scope of shifting under Rule 13 of the Rules, the competent authority should not have rejected the application summarily, without enquiring into the same, merely referring to the order of this court in the writ appeal referred above. As much as the reason assigned by the respondents in the impugned order for rejection of the application of the petitioner is not a valid one, the impugned order is liable to be set aside. 9. Though it is the case of the impleaded fourth respondent that no such prior clearance is required, but Rule 5(1) & (2) of the Rules contemplates obtaining of prior clearance in Form-2A before making an application seeking licence in Form-2B. Hence, the case of the fourth respondent cannot be accepted. 10. For the aforesaid reasons, the order under challenge, i.e. the order dated 17-11-2007, passed by the Commissioner of Prohibition & Excise is set aside and consequentially there shall be a direction to the second respondent to consider the application of the petitioner dated 11-10-2007 and 23-10-2007 for grant of prior clearance, as contemplated under Rule 5(1) of the Rules, by considering the issue afresh in accordance with the Rules framed in G.O.Ms.No.997 dated 24-05-2005 and pass appropriate orders within a period of six weeks from the date of receipt of this order. 11. The writ petition is allowed to the extent indicated above. No order as to costs. __________________________ JUSTICE R. SUBHASH REDDY. February 29, 2008 MRR ... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRK}