Source: http://www.rishabhdara.com/sc/view.php?case=8100
Timestamp: 2020-04-01 10:24:31
Document Index: 17015982

Matched Legal Cases: ['Art.\t226', 'Art. 226', 'Art. 226', 'Art. 226', 'Art.\t14', 'Art.\n226']

CHINGLEPUT BOTTLERS versus MAJESTIC BOTTLING COMPANY
1984 AIR 1030	1984 SCR (3) 190 1984 SCC (3) 258	1984 SCALE (1)832
CHINGLEPUT BOTTLERS V. MAJESTIC BOTTLING COMPANY [1984] RD-SC 60 (15 March 1984)
SEN, A.P. (J) SEN, A.P. (J) VARADARAJAN, A. (J)
CITATION: 1984 AIR 1030	1984 SCR (3) 190 1984 SCC (3) 258	1984 SCALE (1)832
RF	1989 SC 49	(16,19)
Constitution of	India-Art.	226-High Court's Jurisdiction to issue writ of a mandamus in cases where duty sought to he enforced is of discretionary nature.
Natural Justice-Application of rules of natural justice to- cases which relate not to rights but to mere privileges of licences.
Tamil Nadu Arrack (Manufacture)	Rules,	'981-R. 7- Commissioner has no legal duty to grant licence-Approval of Staff	Government is a pre-requisite for grant of licence- High Court cannot compel grant of licence by Commissioner by issuing writ of mandamus.
On the surrender of the licence for the manufacture and supply of bottled arrack for the Chingleput District for the financial year	]982-83 by the then existing licensee, the Commissioner of	Prohibition and Excise called for fresh applications from intending persons for the grant of licence under the Tamil Nadu Arrack (Manufacture) Rules, 1981 framed under the Tamil Nadu Prohibition Act, 1937.	Two firms, namely, Majestic Bottling Company and Chingleput Bottlers, filed there applications and an enquiry with regard to them was held by the Assistant Commissioner. The	Commissioner considered the report of enquiry, gave separate oral hearing to the two applicants and passed an order rejecting both the applications. As regards Majestic Bottling	Company	the Commissioner held that they did not satisfy the requirements of rr. 5(a) and 5(e). In the case of Chingleput Bottlers, he held that they did not satisfy the requirements of rr. 5(a), 5(c) and 5(e). While recording the finding in respect of Chingleput Bottlers, the Commissioner relied on a report of the Collector and other material gathered by him during the course of the enquiry, which included a representation from.
Majestic Bottling Company against	the application of Chingleput Bottlers. Both the	applicants filed petitions under Article 226 of the Constitution questioning the orders passed by the Commissioner.
A Single Judge of	the High Court issued	a writ of certiorari quashing the order of the Commissioner insofar as he rejected the application of Majestic Bottling Company and also issued a writ of mandamus ordaining the Commissioner to grant the licence to Majestic Bottling Company. As regards Chingleput Bottlers,	the Single Judge rejected their contention that	the Commissioner had acted in breach of rules of natural justice by his failure to furnish them the report of the Collector and observed that nothing precluded them from seeking perusal of the records or from making a demand for a copy of the same.
191 Both the applicants preferred appeals to the Division Bench. The State Government which was in possession of material adverse to the two partners	of Majestic Bottling Company did not initially file a separate counter affidavit but only did so at the conclusion of the hearing.	The Division Bench	ruled	that	the order passed by	the Commissioner must be adjudged by the reasons stated by him and those reasons cannot be supplemented by fresh reasons provided by the State	Government in its belated affidavit and upheld the judgment of the Single Judge.
The State	Government and Chingleput Traders filed appeals against the judgment of the Division Bench.
It was contended on behalf of the State Government that the grant of licence under r.	7 was	subject to the prior approval of the State Government, that if the High Court was satisfied that	the impugned order of	the Commissioner was liable to be quashed on the ground that there was an error apparent on the face of the record, the proper course for it to adopt was to issue a writ of mandamus to the Commissioner to re-determine	the question of grant of such privilege and that the High Court had no power to issue a writ of mandamus directing the Commissioner to grant the licence in favour of Majestic Bottling Company.
It was contended on behalf of Chingleput Bottlers that the Commissioner had acted in breach	of rules of natural justice in not furnishing them a copy of	the report submitted by the Collector and other	material gathered by him during the course of the enquiry. Allowing the appeal of the State Government and dismissing the appeal of Chingleput Bottlers.
HELD: 1. No mandamus will lie where the duty sought to be enforced is of a discretionary nature nor will a mandamus issue to compel the	performance by	a public body or authority of an act contrary to law. [198H-199A] (a) In the instant case the Commissioner was under no legal duty to grant a licence to Majestic Bottling Company till he	received the prior approval of the State Government under r. 7. Even assuming that the Commissioner recommended the grant of a	licence to them under r. 7, tho State Government were	under no compulsion to grant	such prior approval. The grant or refusal of such licence was entirely in the	discretion of the State Government. The High Court had no	jurisdiction to	issue a writ of mandamus to	the Commissioner to grant a licence to Majestic Bottling Company contrary to the provisions of r. 7. [199 A-C] de Smith: Judicial Review of Administrative Action, 4th Ed. pp.	341 and 544: H.W.R. Wade: Administrative Law. 5th ed. p. 638; referred to.
(b) Absence of a	specific plea	in the nature of demurrer would	not invest the High Court with jurisdiction to issue a writ of mandamus ordaining the Commissioner to grant a licence under r. 7 without the prior approval of the 192 State Government which is a condition pre-requisite for the grant of such privilege. The High Court was unduly technical in applying the rules	of pleading and short-circuited the whole procedure	upon a wrongful assumption	of its	own powers. The view taken by it is manifestly erroneous;
otherwise, the statutory requirements of such prior approval of the	State Government under r. 7 would be rendered wholly otiose. [201 C-E] K.N. Guruswamy v. Stare of Mysore,[1955] 1 S.C.R. 305;
and P.	Bhooma Reddy v. State of Mysore, [1969] 3 S.C.R. 14;
(c) It is not possible to accept the contention that no useful purpose	would have been served	by the	High Court remitting the	matter	for the reconsideration of	the Commissioner since it had already found that all the reasons that could be given for upholding the validity of	the Commissioner's order were bad	and unsustainable. This was not a case where it could be said that there was nothing for the State Government	to consider while examining	the question whether it should accord or refuse prior approval to the	grant of licence to Majestic Bottling Company under r. 7. One of the relevant factors that the State Government had to	take into consideration was whether the partners of that Company were persons who would abide by the provisions of the Act and the rules. The facts disclosed in the counter affidavit of the State	Government lay a serious charge against the partners of that Company and it was permissible for the State Government to take	those	facts	as justification for refusal to grant prior approval under r.
7. [202C, 203A-B, E-F] (d) The proper course for the High Court to adopt was to issue a writ of mandamus directing the Commissioner to redetermine the question after following the procedure of r.
7 and in case he came to a decision to grant the licence in favour of Majestic Bottling Company, to refer the matter to the State Government for its prior approval. [206A-B] M/s Hochtief Gammon v. State of Orissa, [1976] 1 S.C.R.
667; Padfield v. Minister of	Agriculture, Fisheries	and Food, L.R. [1968] A.C. 997: referred to.
Gujarat State Financial Corpn. v. M/s. Lotus Hotels Pvt. Ltd., [1983] 3 S.C.C. 379; distinguished.
State of Tamil Nadu v. C. Vadiappan, [1982] 2 Mad. L.J.
30; and	K. Ramaswamy v. Government of Tamil	Nadu (Writ Appeal No. 368 of 1981); overruled.
2. It is a fundamental rule of law that no decision must be	taken which will affect the rights of any person without first giving him an opportunity of putting forward his case. Strict adherence to the rules of natural justice is required where a public authority	or body	has to deal with rights. The audi	alteram partem rule may not apply to cases which relate not to rights or legal expectation but to mere privilege	or licence. An authority or body need not observe the rules of natural justice	where its decision, although final, relates not	to a	'right' but to a 'privilege' or 'licence'. All that is emphasised in such 193 cases is that the applications for grant of	privilege or licence must be considered fairly. There are no inflexible rules of natural justice of universal application. Each case depends on its own circumstances. Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the legislature under which	they have to act. [209C-D-G, 213D-E-G] The right	to know the	case to be met does	not necessarily involve any right to know the source of adverse information or	to confront the informants, for, in	some cases it would be quite proper for the authority to employ confidential sources. [210B-C] Ridge v. Baldwin: L.R. [1964] A.C. 40; R. v. Gaming Board for Great Britain, [1970] 2 All E.R. 528; R. Surinder Singh Kanda v. Government of the Federation of Malaya, L-R.
[1962] A.C. 322; Breen	v. Amalgamated, Engineering Union, [1971] 2 Q.B. 175; Mac Innes v. Onslow Fane & Anr., [1978] 3 All E.R. 211. Kishan Chand Arora v. Commissioner of Police, [1961] 3. S.C.R. 135;	and Nakkuda Ali v.	M.F. De S.
Jayaratne L.R. [1951] A.C. 66. referred to.
3. In the instant case there is nothing in the language of r. 7 to suggest that in refusing to grant the privilege, the Commissioner is obliged to act 'judicially'. The order refusing a licence under r. 7 is purely an administrative or executive order and is not open to appeal or revision. There is no lis between the Commissioner and the person who is refused such privilege. The power of	refusal	of licence unlike the power to grant is	not subject to any	pre- condition. The grant of a liquor licence under r. 7 does not involve any right or expectation but	it is a matter of privilege. The	Commissioner was under no obligation either to disclose the sources of information or the gist of the information that he had. All that was required was that he should act fairly and deal with the applications without any bias, and not in an arbitrary	or capricious	manner.	The Commissioner was entitled to act on	the report of	the Collector and also on other material gathered by him during the course of the enquiry. It	cannot	be said that	the Commissioner in	dealing with the applications	did not act fairly in not furnishing a copy of	the report of	the Collector or in taking a representation from Majestic Bottling Company. There is also no suggestion of any mala fides on the	part of the	Commissioner or the State Government. [213G-H, 214A-B, C-E, G-H]
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1 1970-1 1972 of 1983 Appeals by	Special leave	from the] judgment and order dated the 27th July, 1983 of the Madras High Court in W. A.
Nos. 523, 531 & 528 of 1983.
K.K. Venugopal and C.	S. Vaidyanathan for	the Appellants in CA-Nos. 1 1970-71183.
Sahnti Bhushan, A. T. M. Sampath and Mr. K. Subramaniam for the Respondents in CA. Nos. 1 1970-71/83.
194 A.K. Sen and A.V. Rangam for the Appellant in CA. No. 1 1972 of 1983.
Soli J. Sorabjee A.T.M. Sampath and K. Subranmaniam for the Respondent in CA. 11972/83.
The Judgment of the Court was delivered by SEN, J. These appeals by special leave directed against a judgment of a Division Bench of the Madras High Court dated July 7, 1983 upholding the judgment and order of a learned Single Judge dated June 13, 1983 relate to the grant of a licence for the manufacturing and supplying of bottled arrack	to the	wholesale and	retail	licensees for	the Chingleput district under r. 7 of the Tamil	Nadu Arrack (Manufacture) Rules, 1981 ('Rules', for short) framed under the Tamil Nadu Prohibition Act, 1937	('Act'	for short).
These appeals raise separate and distinct questions and must therefore receive separate consideration.
Put very shortly, the essential facts are these. On May 28, 1982 one O.H. Kumar carrying on business under the name and style of Messrs Three Star Bottling Company surrendered his licence for the manufacture and supply of bottled arrack for the Chingleput district for the financial year 1 982.83.
The Commissioner of Prohibition & Excise, Madras called for applications from intending persons for the grant of	the licence. In response	to the notice issued by	the Commissioner under r. 3(2) of the Rules, there were	two applications filed under r. 5 in Form 1, namely, by J.
Balaji. managing partner of Messrs Majestic Bottling Company on June	9, 1982 and by V. Ramabadran, managing partner of Messrs Chingleput Bottlers on June 14,	1982.	The Commissioner issued a questionnaire	and directed	the Collector, Chingleput to have an inquiry held as regards the suitability of	the applicants	for the	grant of a licence.
Pursuant thereto, the Collector had an inquiry held by the Assistant Commissioner	(Excise) which	lasted for four days i.e. from June 21 to June 24, 1982. After the preliminary inquiry	and field inspection made	by the Assistant Commissioner (Excise), the Collector forwarded his report dated July 2, 1982 to the Commissioner who fixed July S, 1982 for oral hearing of the parties.
On July 5, 1982, the Commissioner separately heard both J. Balaji and V. Ramabadran. At	the hearing,	the Commissioner recorded the statements of both J. Balaji and v. Ramabadran in 195 support of their respective claims. On July	31,1982	the Commissioner passed	an order rejecting	both	the applications. As regards Messrs Majestic Bottling Company, the Commissioner held that their application	was in order but that they did not satisfy the requirements of r. S (a), and (e)	of the	Rules. As to their suitability under r. S (a), he	found that though the	partnership had been formed prior to the date of the application i.e. On June 9, 1982 the firm actually got registered subsequent thereto on June 23, 1982 and therefore	there was no valid partnership in existence on June 14,	1982 i. e. On the date of the filing of the	application. As	regards r. 5(e), he held that there was no water facility in the lands owned by the partnership firm.
As regards Messrs Chingleput Bottlers, the Commissioner held that the application made by them was not in order because it was not accompanied by a solvency certificate and that there was no potable water available at the proposed site. He further held	that there was only one and a half feet water in the well at the site and D it was of poor quality. He also came to the conclusion that the application had not	been made bona fide on behalf of the partnership firm but as benami for others. The Commissioner accordingly held that Messrs Chingleput Bottlers did not	fulfil	the requirement of r. 5(a), (c) and (e) of the Rules.
The finding of the Commissioner that Messrs Chingleput Bottlers were mere benamidars	of O.H.	Kumar, the previous licensee, was based on	the report of the Collector and the other material	gathered by him during	the course cf	the inquiry.
Both Messrs Majestic Bottling	Company	and Messrs Chingleput Bottlers filed separate petitions under Art. 226 of the	Constitution before the High Court questioning the validity of the order	passed by the Commissioner. By his judgment dated	June 13, 1983 a learned Single Judge held that the Commissioner was not justified in rejecting	the application of	Messrs Majestic Bottling Company on a wrongful assumption that they did	not satisfy	the requirement of	r. 5(a)	and (e) of the Rules. He held that the order was vitiated	by an error apparent on the face of the record inasmuch as J. Balaji, managing partner of Messrs Majestic Bottling Company had produced record with regard to the availability of water.
The Learned Single Judge however set aside the finding of the	Commissioner that the application made by Messrs Chingleput 196 Bottlers was not in order because it was not accompanied by a solvency certificate holding	that non-production of a solvency certificate would not	entail a dismissal of	the application on	that ground alone, as also the finding with regard to non-availability of	water at the proposed	site since the blending unit of Messrs Three Star Bottling Company was already functioning there. The learned single Judge rejected	the contention of Messrs Chingleput Bottlers that the Commissioner had acted in breach of the rules of natural justice	by his failure to furnish the report of the Collector observing that nothing precluded them from seeking perusal of the records; nor did they make a demand for it.
By his judgment, the learned Single Judge by the issue of a writ of certiorari quashed the impugned order of the Commissioner insofar as he rejected the application made by Messrs Majestic	Bottling Company on the ground that there was an	error apparent on the face of the record but instead of remitting the matter back to the Commissioner to	re- consider the question of grant of such privilege, issued a writ of	mandamus ordaining the Commissioner to grant	the licence to Messrs Majestic Bottling Company. He further upheld	the order of	the Commissioner rejecting	the application of	Messrs Chingleput Bottlers for the grant of privilege on the ground that they were mere benamidars of the previous licensee. Aggrieved by the judgment of	the learned Single	Judge, both the State Government and Messrs Chingleput Bottlers preferred appeals	under cl. 1 S of the Letters Patent. Upholding the judgment of the learned Single Judge the learned Judge of the Division Bench held	that learned Single	Judge was justified not only in quashing the same but in issuing a writ	of mandamus directing	the Commissioner to	grant	the licence in favour of Messrs Majestic Bottling Company without the prior approval	the State Government under r. 7 of the Rules.
Before proceeding	further, we would like	to mention that the State Government did not file a separate counter.
There was a counter-affidavit filed by R. Lakshmanan, Joint Commissioner (IV), Department	of Prohibition & Excise, Madras on behalf of both the State Government as well as the Commissioner of	Prohibition &	. Excise seeking to support the impugned order passed by the Commissioner. In addition to the grounds mentioned by the Commissioner for the refusal of the	applications for grant of privilege, there was an additional ground taken in paragraph 11 and it was alleged that J. Balaji, managing partner of Messrs Majestic Bottling Company and his other partner Smt. Shanthi, who incidentally is also his 197 mother	were the two	erstwhile directors	of Messrs Dhanalakshmi Chemical Industries Private Limited, Ranipet upto November 26, 1980	and there was prima facie evidence that the company had misused the large quantity of rectified spirit	by diverting alcohol	from industries to arrack production and	therefore they	were persons not likely to abide by the provisions of the Act and the Rules farmed thereunder within the meaning	of r. 5(b), and this would have been a relevant point to be taken into consideration by the State Government in the matter of grant or refusal of prior approval	under r. 7(1). It was alleged that these two persons	were directors during the aforesaid period of misuse.
At the conclusion of the hearing of the appeals before the High Court, the State Government filed a supplementary affidavit of S. Ranganathan, Deputy Secretary to the State Government of Tamil Nadu, Department of Prohibition & Excise furnishing further and better	particulars of	the alleged misuse of rectified spirit by Messrs Dhanalakshmi Chemical Industries Private Limited which had put	the State Government to a loss of revenue to the tune of Rs. 2 crores.
It was	averred that investigation into the case was almost complete and a prosecution was about to be launched against the Company and its directors, including J. Balaji and Smt.
Shanthi, the two partners of Messrs Majestic Bottling Company. Inasmuch as no such objection was taken before the learned Single	Judge, the learned Judges felt that it was not necessary for them to deal with the facts brought out in the two	counter-affidavits. It	appears that	the learned Advocate-General also did not	press	the ground at	the hearing of the appeals. The learned Judges held that the validity of the impugned order passed	by the Commissioner must be	adjudged by the reasons stated by him and cannot be supplemented by fresh reasons by the State Government in the shape of affidavit or otherwise .
There are	really two	questions that	fall	for determination. The first is as to the jurisdiction of the High Court to issue a writ of mandamus. It is said that the grant of licence under r. 7 is subject to the prior approval of the	State Government and is in the discretion of	the State Government. The	High Court is not the granting authority and therefore had no power	to issue a writ of mandamus directing the Commissioner to grant	a licence to Messrs Majestic	Bottling Company. The second question is whether the Commissioner acted in breach of the rules natural justice in not furnishing 198 to Messrs Chingleput Bottlers a copy of the report submitted by the	Collector and other material gathered by him during the course of the inquiry tending to show that they were benamidars of one O.H.	Kumar, the previous licensee. It is said that Messrs Majestic Bottling Company had at	the separate hearing before the Commissioner submitted a brief styled as a representation containing several documents in opposition to the application	made by Messrs Chingleput Bottlers on the ground	that their application was benami without furnishing a copy of the same to them and this must have influenced	the mind of the Commissioner. Even if the Commissioner was not acting in a judicial Or quasi judicial capacity, he was required to	act fairly. The rules of natural justice	therefore required that Messrs Chingleput Bottlers should	not be	deprived of this business without knowing the case they	had to meet. Both the questions that arise will have to be dealt with separately.
The first	issue, as already indicated, raises a question of prime importance and of some difficulty. It would therefore be convenient,	in the	first instance, to deal with the appeal preferred by the State Government. It is urged that the High Court had no jurisdiction to issue a writ of	mandamus ordaining the Commissioner	to grant a licence to Messrs Chingleput Bottlers under r. 7 of	the Rules without the prior approval of the State Government. It is said	that although a writ of mandamus may be a necessary adjunct to a writ of certiorari the proper course for the High Court to have adopted was, if it was satisfied that the impugned order	of the Commissioner was liable to be quashed insofar as he	rejected the application made by Messrs Majestic Bottling Company on the ground that there was an error apparent	on the	face of the record, to have issued a writ of mandamus Commissioner to redetermine the question as to the	grant of such privilege. Reliance is	placed on de Smith's Judicial Review of Administrative Action, 4th edn.
at pp.341 and 544. The contention must, in our opinion.
In order that a writ of	mandamus may issue to compel the Commissioner to grant the licence, it must be shown that under the Act and the Rules framed thereunder there was a legal duty imposed on	the Commissioner to issue a licence under r. 7 of	the Rules without the prior approval of the State Government and that Messrs Majestic Bottling Company had a corresponding legal right for its enforcement. No mandamus will lie where the duty sought to be enforced is of a discretionary nature nor will a mandamus 199 issue to compel the performance by such public body or authority of an act contrary to law. The Commissioner of Prohibition & Excise was under no legal duty	to grant a licence to Messrs Majestic Bottling Company till he received the prior approval of the State Government under r. 7. Even assuming that the Commissioner	recommended the grant of a licence, to them under r. 7, the State Government were under no compulsion to grant	such prior approval. The grant or refusal of such licence was entirely	in the discretion of the State Government. The High Court had no jurisdiction to issue a	writ of Mandamus to the Commissioner	to grant a licence to Messrs Majestic Bottling Company contrary to the provisions of r. 7 of the Rules.
The learned Judges observed	that	in normal circumstances they would have	upheld the objection of the learned Advocate General as to the jurisdiction of the High Court to issue a writ of mandamus, but in view of the fact that the State Government had chosen not to file a separate return taking a specific plea that in the event of a writ of certiorari being granted, the Court should not issue a writ of mandamus for the grant of	licence since the grant or refusal of licence was subject to the prior approval of the State Government under r. 7 of the Rules. The learned Judges accordingly held that the learned Single Judge was justified in issuing a writ in the nature of mandamus directing the Commissioner to issue a licence in favour of Messrs Majestic Bottling Company in view of the fact that there were only two applicants	in the	field and the application of Messrs Chingleput Bottlers having been rejected,	the State Government had	no other option but to make the grant in favour of Messrs Majestic Bottling Company. Further,	the learned Judges	observed that to sustain the objection would be tantamount to allowing the State Government to sit in appeal over the judgment of the High Court. In substance, the learned Judges were of the view that failure of	the State Government to take a specific plea as to jurisdiction precluded them	from	raising	a question	as to	the jurisdiction of	the High Court to issue a writ of mandamus.
We are afraid, we cannot accept this line of reasoning.
It is true that sometimes it is prudent	to couple a writ of	certiorari with a writ of mandamus to control the exercise of discretionary power. The following illuminating passages from de Smith's Judicial Review of Administrative Action; 4th edn. at pp.341 and 544 pithily	sum up	the function of a writ of mandamus;
200 "It is now	open	to a court when granting certiorari to remit the matter to the authority with a direction to reconsider and to decide in accordance with the findings of the court.	Apart from this, the role of	the courts is	limited to ensuring	that direction has been exercised according to law.	If, therefore,	a party aggrieved by the	exercise of discretionary power seeks	an order of	mandamus to compel the	authority to determine the matter on	the basis legally relevant considerations, the proper form of the mandamus will be one to	hear and determine according to law; though	by holding inadmissible the considerations on which the original decision was based the court may indirectly indicate the particular manner in which the discretion ought to be exercised. In practice the frontier between control of legality and control of	the actual exercise of discretion remains indeterminate, for the courts are sometimes observed to cross the	boundaries that	they have set to their own jurisdiction." **	**	**	** "The duty to observe	these basic principles of legality in exercising a	discretion is	unlike	the "duty" to	apply the law correctly to findings of fact, prima facie enforceable by mandamus. Hence where an authority has	misconceived or misapplied	its discretionary powers by exercising them for an improper purpose, or capriciously, or on the basis of irrelevant considerations or without regard to relevant considerations it	will be	deemed to have failed to exercise its discretion or jurisdiction at all or to have failed to hear and determine according to law, and mandamus may issue to compel it	to act in accordance with the law " Professor H.W.R. Wade in	his Administrative Law, 5th edn. at	p. 638	also defines the purpose of	a writ of mandamus in these words:
"Mandamus is	often	used	as an	adjunct to certiorari. If a tribunal or authority acts in a matter where it has no power to	act at all, certiorari will quash the decision and prohibition will prevent further unlawful proceedings. If there is power to act, but the power is abused (as by breach of natural justice or error on the face of the record), certiorari will quash and mandamus may issue simultaneously to require a proper rehearing.	An example is Board of Education v.
Rice [1911] AC 179 cited elsewhere; the Board's 201 decision was ultra vires since they had addressed their minds to	the wrong question, consequently it	was quashed by	certiorari and	the Board were commanded by mandamus to determine the matter according to law, i.e.
within the limits indicated by the House of Lords." In	our judgment, the	High Court exceeded	its jurisdiction in issuing a writ of mandamus directing	the Commissioner to	grant a licence to Messrs Majestic Bottling Company without the prior . approval of the State Government as enjoined by r. 7 of the Rules. The High Court was unduly technical in applying the rules of pleadings. Absence of a specific plea in nature of demurrer would not invest the High Court with jurisdiction to issue	a writ	of mandamus ordaining the Commissioner to	grant a	licence to Messrs Majestic Bottling Company under r. 7	of the Rules without the prior approval of	the State Government which was a condition pre-requisite	for the grant of such privilege. It is regrettable	that the High	Court	should	have short- circuited the whole procedure upon a wrongful assumption of its own	powers. The view taken by	the High Court is manifestly erroneous. Otherwise, the statutory requirement of such	prior approval	of the	State Government under r. 7 would be rendered wholly otiose.
We	should	not be understood	as laying down an inflexible rule	that the High	Courts	cannot, under	any circumstances, regulate	or control the manner of grant of a liquor licence	by the issue of a writ of mandamus. It would all depend upon the facts and	circumstances as to whether the High Court should	issue a writ of mandamus or not. The grant of a liquor licence is a matter of privilege. In the very nature of things, the grant of refusal of licence is in the discretion	of the State Government. Normally, where the statute vests a discretionary	power upon an administrative authority, the	Court would not interfere with the exercise of such discretion unless it is made with oblique motives or extraneous purposes or upon extraneous considerations. The present case does not	fall within the rule laid down in K.
N. Guruswamy v. The State of Mysore & or and P. Bhooma Reddy v. State of Mysore & ors. The decisions in Guruswamy's and Bhooma Reddy's	cases are both in consonance with the well- settled principle that the High Court can always issue a 202 writ of	mandamus under Art. 226 of the Constitution against a public authority to	compel the performance of a public duty where such authority acts in violation of the law.
It is urged on behalf of Messrs Majestic Bottling Company placing	reliance on the decision of the House of Lords in Padfield v. Minister of Agriculture, Fisheries & Food and that of this Court in Messrs Hochtief Gammon v.
State of Orissa & ors. following the same that, no doubt where the reasons given are bad and the authority had not taken into consideration the	relevant matters or	real grounds on which the order could have been passed, the Court can direct the authority to reconsider the matter in the light of such relevant	matters. But it was urged that no useful purpose	would be served in remitting the matter to the authority for reconsideration where all the reasons that can be	given for upholding the validity of the order have been found by the Court to be bad and unsustainable. The submission] is	that in	such a	case the Courts will	not direct the authority to reconsider the matter for,	then there is nothing to reconsider but the Court will direct the authority to carry out	what it has by the impugned order refused to do. In Hochtief Gammon's case, this Court deduced the following principles from the decision of House of Lords in Padfield's case:
"The Executive have to reach their	decisions by taking into account relevant considerations.	They should not refuse	to consider relevant	matter	nor should they take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful.	The Courts have power to see that	the Executive	acts lawfully.	It is	no answer to	the exercise of that power to say that the Executive acted bonafide nor that they	have bestowed	painstaking consideration. They cannot avoid scrutiny by courts by failing to	give reasons. If they give reasons and they are not good reasons, the court	can direct them to reconsider the matter in the light of relevant matters though the propriety,	adequacy or	satisfactory character of these reasons may not be open to judicial scrutiny.	Even if the	Executive considers	it inexpedient to exercise their powers they should state their reasons and there must be.. material to show that they have considered all the relevant facts.
203 This was not a case where it could be said that there was nothing for the State Government	to consider as to whether should	accord or refuse prior approval to the grant of a licence to Messrs Majestic Bottling Company under r. 7 of the	Rules. The Commissioner by	the impugned order rejected the applications for	grant of a licence made by both Messrs Chingleput Bottlers and Messrs Majestic Bottling Company and therefore the stage was not reached. The stage for the	State Government to reconsider the matter of grant of privilege	under r. 7 would only arise when	the commissioner makes a recommendation for the	grant of a licence to Messrs Majestic Bottling Company. At that stage, the State Government would have to consider whether	they should accord prior approval for the grant of such privilege to Messrs Majestic Bottling Company having regard to	the matters specified in r. 5 of	the Rules and the conditions set out in r. 6(c), in view of the further facts brought out in the	supplementary counter affidavit of Deputy Secretary to the	State Government, Department of Prohibition & Excise in support of the objection raised in para	11 of	the counter-affidavit. One	of the	relevant factors that	the State Government must, as	they should,	take into consideration is the suitability of Messrs Majestic Bottling Company for the grant	of licence as required under r. S(a) and the other is whether J. Balaji, the managing partner and Smt. Shanthi the other partner, were persons who would abide by the	provisions of the Act and the Rules made thereunder as enjoined by r. 5(b). The facts lay a serious charge that Balaji, managing partner of Messrs Majestic Bottling Company and his	other partner Smt. Shanthi were directors of Messrs Dhanalakshmi Chemical Industries Private Limited, Ranipet upto November 26, 1980	and that there was	prima facie evidence showing that the company had misused the rectified spirit issued to it causing a loss of revenue to the State Government to the tune	of Rupees two crores or thereabout.
lt would be permissible for the State Government to take these facts as justification for refusal to	grant prior approval under r. 7 of the Rules.
In coming	to the	conclusion they did,	the learned Judges have drawn sustenance from the decision of this Court in Gujarat State Financial Corporation v. Messrs Lotus Hotels Private Limited and of the High Court in the State of Tamil Nadu & Anr. v. C. Vadiappan in	support of the view that the High Court had jurisdiction	to issue a writ of mandamus directing the State of Tamil Nadu and 204 the Commissioner of Prohibition & Excise to grant	the privilege for the manufacture	and supply of bottled arrack to Messrs Majestic Bottling Company	for the Chingleput district under	r. 7 of the Rules. The decision in Gujarat State Financial Corporation's case	(supra)	is clearly distinguishable	and is not an authority for any	such proposition. No such question	arose in that case at all.
There, the Court was dealing with a contract entered into by the Gujarat State Financial Corporation with	Messrs Lotus Hotels Private Limited for the purpose of setting up a 4- star hotel. The Company approached the Corporation for a loan of	rupees 30 lakhs and tile Corporation sanctioned a loan of	Rs. 29.93 lakhs on certain terms and conditions which the Company accepted. The Corporation however finally resolved not to disburse the loan to the Company whereupon the Company moved Gujarat High Court	by a petition under Act. 226 for the issue of a writ of mandamus to direct the Corporation to	disburse the loan. A learned Single Judge of the High Court issued	the writ as prayed for and it was confirmed by a Division Bench. on appeal by the Corporation, this writ Court held that the	High Court was justified in issuing the writ of mandamus. The decision in Gujarat State Financial Corporation's case, (supra) turned on the doctrine of promissory	estoppel and	it does not	justify	the conclusion reached by the learned Judges in the present case for the	issue of a writ of mandamus.	It is	needless to stress that if the requirement of law was that the advance of loan	to be	sanctioned by the Gujarat State Financial Corporation was	to be	subject to the prior approval of the Reserve Bank of India, the decision of the Court would have been otherwise:
It is difficult to subscribe to the doctrine evolved by the High Court in Vadiappan's case, (supra) that	the Commissioner is	the 'sole arbiter' under r. 7 of the Rules.
It relied upon the earlier decision of the High Court in K.
Ramaswamy v. Government of Tamil Nadu & ors laying down that the proviso to r. 6 of the Tamil Nadu Arrack (Supply by Wholesale) Rules, 1981 had to be understood strictly in a negative sense.	According to the High	Court, at best it confers on the Government a power to veto. By itself, the High Court observed, 'it does not make the Government a final arbiter between the competing claims. The High Court further observed in Ramaswamy's case, supra, that	'the weighing of the pros and cons and the consideration of the merits and demerits of the rival clai- 205 ments remained,	from first to last with the Commissioner as his sole responsibility, and that the	requirement of	the Government's proper approval under the proviso to r. 6 of the Tamil Nadu Arrack	(Supply by Wholesale) Rules 1981 was no doubt a necessary part of the validity of every licence, but 'the enabling power cannot be employed as a machinery for a review in every case but only	as a check upon a possible abuse	of its	power by the Commissioner'. That- approach of the High Court seems to run counter to	the scheme of the Act and the Rules framed thereunder. The grant of a liquor licence under r. 7 is a matter of privilege of the State Government. The Commissioner merely exercises the delegated powers of the State Government. The ultimate responsibility for the grant of such privilege is with the State Government under r. 7 of the Rules.
Nor can we subscribe to the contention that	the Commissioner had to act under the directions and control of the State Government under sub-s. (2) of s. 25A of the act while exercising his powers delegated under sub-s (1) of s.
17C read with s. 25A (1) in the matter or grant of a liquor licence under r. 7 of the Rules. It would not justify the High Court to issue a writ of mandamus to the Commissioner to grant a licence to Messrs Majestic Bottling Company under r. 7 of the Rules without the prior approval of the State Government. Obviously,	the State Government and	the Commissioner cannot act de hors the scheme of the Act and the Rules framed thereunder. Further, the contention that the State Government had already made up their mind against the grant of such privilege to Messrs Majestic Bottling Company and that there was no occasion for the High Court to send back the case to the Commissioner as it would	have amounted to the State	Government being asked	to sit in appeal over the judgment of the High Court, cannot be accepted. We regret to	say, the High Court has tried to circumvent the whole procedure by issuing a writ of mandamus directing the Commissioner to	grant a	licence under	r. 7 without the prior approval of	the State Government. As already stated,	the grant of a licence under	r. 7 of the Rules is a privilege. There are no charges of mala fides on the part of the State Government. There is no suggestion that the State Government had already	made up their mind.
This is also not a case where the rules of necessity require recourse to a writ of mandamus to command the issue of a licence without conforming to the procedure prescribed under r. 7.
In the premises, it was	not a	proper	exercise of jurisdiction for the High Court to have issued a writ of mandamus under Art. 226 206 of the	Constitution ordaining	the Commissioner to grant a licence to Messrs Majestic Bottling Company under r. 7 of the rules without the prior approval of the State Government. In	our opinion, the proper course for the High Court to adopt was to issue a writ of mandamus directing the Commissioner to redetermine the question after following the procedure of r. 7 and in case he came to a decision to grant the licence in favour	of Messrs Majestic-Bottling Company, to refer the matter to the State Government for its prior approval. Otherwise r. 7 of the Rules would	be rendered.
completely otiose.
Turning to	the appeal preferred	by M/s Chingleput Bottlers, learned counsel for	them has mainly advanced a three-fold submission:	(1) The	Commissioner had acted in flagrant violation of the rules of natural justice in. not furnishing to Messrs Chingleput Bottlers a copy of	the report	of the	Collector and	other	extraneous material comprising of a representation received from Messrs Majestic Bottling Company along with various other documents. Nor had he disclosed to them the substance of the report of	the Collector or other information gathered by him irrespective of the	source. (2) The impugned order passed by	the Commissioner was vitiated by errors apparent on the face of the record. There was	no factual basis for the assumption that the three persons from whom Messrs Chingleput Bottlers had taken the lease of the land on which the blending unit is located. viz, K.J.	George, M/s. Visvambaran and	E.K.
Chandrasekaran, were real partners of	Messrs	Three	Star Bottling Company. There was	also no warrant for	the suspicion cast	by the	Collector in his report that Messrs Chingleput Bottlers were mere benamidars of one O.H. Kumar, proprietor of	Messrs Three Star Bottling Company,	the existing licensee, on the ground that they had entered into an agreement to purchase the blending	unit from him. The function of the Commissioner in making the grant of privilege under	r. 7 of the Rules of being a quasi judicial nature,	the Commissioner could not	act on	unwarranted conjectures and	mere surmises. (3) The Commissioner had rot acted fairly inasmuch as he adopted a double standard. For a secret	inquiry	was conducted	against Messrs Chingleput Bottlers for adjudging their suitability for	the grant of privilege while	no such inquiry was made against Messrs Majestic Bottling Company. The Commissioner had thus treated Messrs Chingleput Bottlers and Messrs Majestic Bottling Company on an unequal footing and thus the procedure adopted was violative of Art.	14. The observation made by	the Commissioner that the deposit of Rs.	10,01,001 made by Messrs Chingleput Bottlers with 207 the Indian overseas Bank had not come from bona fide sources and that obviously there was	some secret understanding between O.H. Kumar and	Messrs Chingleput Bottlers was not based on any material	at all.	The Commissioner knew that O.H. Kumar, the previous licensee, was not in a position to advance	rupees	10 lakhs and	odd to Messrs Chingleput Bottlers. Again, no such inquiry was made	as to	the financial capacity of	Messrs	Majestic Bottling Company.
Further, the Commissioner had	wrongly assumed	that Messrs Chingleput Bottlers and given their address as 'Ramabadran, c/o Messrs Three Star	Bottling Company, Iyanchery' when no such address was ever	furnished and therefore the impugned order is vitiated by an error	apparent on the face of the record.
In support	of the	contention that the	Commissioner acted in violation of	the rules of natural justice,	the learned counsel contends that Messrs Chingleput Bottlers had a right to be heard. It is urged that there was clear breach of the	principle of audi alteram partem in	as much as neither a copy of the report of the Collector was furnished to Messrs Chingleput	Bottlers nor	a copy of	the representation submitted by Messrs Majestic Bottling Company against the grant of licence to them. The argument is that a hearing where a party does not know the case he has to meet is no hearing at all, while the learned counsel concedes that the right	to know the	case to be met does	not necessarily involve any right to know the sources of adverse inference or to confront informants, for in many cases it will be quite proper for	the authority	to employ confidential sources, the rules of natural justice require that the information itself hold he disclosed so that there is a fair opportunity of meeting the case.
In	the file relating to Messrs Majestic Bottling Company there is a representation filed by	J. Balaji, managing partner of	Messrs	Majestic Bottling Company, consisting of 131 pages and was apparently handed over by J.
Balaji at the time of hearing	before the Commissioner on July 5,	1982. The representation dated July 5, 1982 is in the form of a	petition in continuation of the application for grant made on June 9, 1982. Regarding Messrs Chingleput Bottlers, certain objections are raised to the grant of licence. The objections are formulated in a document marked Annexure 'A'. It is alleged that the existing licensee O.H.
Kumar is ruling the show under the name and style of Messrs Three Star Bottling Company which is under the control of three persons, namely, K.J. George, M.S. Visvambaran	and E.K. Chandrasekaran. It recites that now find- 208 ing that O.H. Kumar could not get the present licence, they have set up Ramabadran who has himself shown his address as care of	Messrs Three Star Bottling Company. This itself clearly shows that the	applicant Ramabadran is a benamidar of Messrs Three Star Bottling Company. In support of the assertion that	Ramabadran is a benamidar of	o.H. Kumar, there is a copy of the judgment of the High Court of Madras in Writ Petition No. 1239 of	1961 filed along with other papers. In the file relating to Messrs Chingleput Bottlers there is a two-page note which formulates certain objections to the	grant of privilege to Messrs Chingleput Bottlers. It was obviously handed over by J. Balaji, managing partner of Messrs	Majestic Bottling Company	to the Assistant Commissioner (Excise) during his inspection of the blending unit or	before the Collector before the submission of his report.
We do not think that the	Commissioner was under an obligation to furnish Messrs Chingleput Bottlers with a copy of the report submitted by	the Collector	or of	the representation made by Messrs	Majestic Bottling Company.
This equally applies to the two-page note appearing in the file of	Messrs Chingleput Bottlers. It was quite proper for the Commissioner to make secret and discreet inquiries from confidential sources. There was no duty cast	on him to disclose to Messrs Chingleput Bottlers the	sources of adverse information or	to give them	an opportunity to confront the informants. Rules	of fairplay only 'enjoin- that Messrs Chingleput Bottlers should know the case against them. This apparently they did from the questionnaire issued by the	Commissioner	and the questions put by	the Commissioner on July S, 1982 on the basis of the information gathered by him. p The Commissioner has relied upon	the report of the Collector and the conclusions reached by the Collector are based on the statement of Ramabadran recorded by the	Assistant Commissioner(Excise). Further, at	the hearing on July 5, 1982, the	Commissioner recorded	the statement of	Ramabadran, managing	partner	of Messrs Chingleput Bottlers.	There was no	occasion for	the Commissioner to	have recorded	the statement of Ramabadran over again unless this	was to	give him an opportunity to explain the substance of the report of the Collector or other information gathered by him irrespective of	the source.
The learned Judges repelled the contention of Messrs Chingleput Bottlers that the Commissioner acted in breach of the rules of natural justice by his failure to furnish them with a copy of the 209 report	of Collector	on the	ground	that there is no fundamental right in a	citizen to carry on any trade in liquor. According to them, the Commissioner under the Rules performs an administrative function and having regard to the requirements of	r. 5 of the Rules, and in view of the fact that Messrs Chingleput Bottlers had neither a legal right nor a legal expectation that they would be	granted	the privilege all that was	required was that the Commissioner should act fairly in dealing with the application and not in a capricious or arbitrary manner. On the material an record, the Learned Judges held that they were satisfied that the Commissioner acted fairly and reasonably and not arbitrarily or capriciously	in coming to the conclusion	that Messrs Chingleput Bottlers had not made the	application on their own behalf, but benami	for others and in rejecting their application for the privilege for setting up a blending unit for arrack Incidentally, they pointed out	that Messrs Chingleput Bottlers did not specifically make a grievance of the fact in the writ petition	that principles of natural justice had not been complied with. It is a fundamental rule of law	that no decision must be taken which will affect the rights of any person without first giving him an opportunity of putting forward his case.
There has ever since the judgment of Lord Reid in Ridge v Baldwin, supra, been considerable fluctuation of judicial opinion in England as to the degree of strictness with which the rules of natural justice should be extended, and there is growing awareness of the problems created by the extended application of principles of natural justice, or the duty to act fairly, which tends to sacrifice	the administrative efficiency and despatch, or frustrates the object of the law in question. Since this Court had held that	Lord Reid's judgment in Ridge v. Baldwin would be of assistance in deciding questions relating to	natural justice, there is always "the duty to act judicially" whenever the rules of natural justice	are applicable. There is therefore	the insistence upon the requirement of a "fair hearing".
In the light of the settled principles, we have to see whether the Commissioner acted	in breach of the rules of natural justice or fairplay in passing the impugned order.
There is	authority for	the proposition that an authority or body need	not observe the rules	of natural justice where its decision, although final, relates not to a 'right' but to a 'privilege or licence' In a number of recent decisions, the Courts have, while extending 210 the protection	of natural justice in the former category of claims, denied	such protection	to the latter category. All that is	emphasized in	such cases is that the applications must be	considered fairly. In R.V. Gaming Board for Great Britain ex parte Bneaim & Khaida the Court of Appeal held that in	refusing a certificate for reasons concerning the character and suitability of the applicants, the Board must act fairly and obey the broad principles of natural justice.
In fact, it was held that they had done so since they had given the applicants full opportunity to know and contest the case against them, even though they had not revealed the sources of their information or given	their	reasons. It follows that the right	to know the case to be met does not necessarily involve any right to know the source of adverse information or to confront the informants, for in some cases it would be quite proper for the authority to employ confidential sources.
The Master of Rolls referred to the contention advanced by counsel appearing for the applicants that they ought not to be deprived of the chance to get licence for the gaming business without knowing the case they had to meet.	The counsel criticized especially the way in which the Board proposed to keep that confidential information and relied on some words of his in R. Surinder Singh Kanda v. Government of the Federation of Malayaa where he had said:
"That the Judge or whoever has to adjudicate must not hear evidence or receive representation from one side behind the back of the other." Lord Denning rejected the contention by observing that 'the counsel had put his case too high'. The learned Master of Rolls then observed:
"It is an error to regard Crockford's as having any right	of which they are being deprived. They have not had in the past, and they have not now, any right to play these games of chance-roulette, cheminde-fer, baccarat and the like for their own profit. What they are really	seeking is a privilege-almost, I might say, a franchise-to carry on gaming 211 for profit, a thing never hitherto allowed in	this country. It is for them to show that they are fit to be trusted with it." In Brren v. Amalgameted Engineering Union. Lord Denning said:
"If a	man seeks a privilege	to which he has no particular claim-such as an appointment to some post or other- then he can be turned away without a word." The Master	of Rolls went on to say that nonetheless statutory and in some cases domestic bodies must act fairly and this may involve a hearing. although it	is not clear from the judgment whether the duty applies where an initial application is	being considered or only where an existing privilege is being terminated.
In Mcinnes	v. Onslow Fane & Anr.2 Megarry, V.C. has drawn a	distinction between initial applications for grant of licence and the revocation, suspension or	refusal to renew licences	already granted. The learned Vice-Chancellor says that there is	a substantial	distinction between 'application cases' and 'forfeiture cases'. He observes that while an applicant for grant of licence has neither a right to such a grant nor a reasonable expectation that such grant would be made in his favour, but cancellation or forfeiture of an existing licence	or refusal to	renew	a licences, involves a right to a hearing as the applicant has what may be called 'reasonable expectation'. Megarry, V.C. dealt with the question whether the grant or refusal of licence by the Board of Control is subject to any requirement of natural justice or fairness which would be enforced by the courts.
In dealing with the nature of the right to claim a licence, he said	that it was nothing but a privilege. The three distinct categories can best be discerned in his own words:
"First, there are	what may be	called	the forfeiture cases.	In these, there is a decision which takes away	some existing right or position, as where a member of	an organization	is expelled or a licence is revoked. Second, at the other extreme there are what may be called the	application cases. There are cases where the	decision merely refuses to grant	the applicant the right or position that he seeks, such as membership 212 of the organization, or a licence to do certain acts.
Third, there is an intermediate category, which may be called the	expectation cases, which differ from	the application cases	only in	that the applicant has some legitimate expectation from what	has already happened that his	application will be	granted. This	head includes cases where an existing licence holder applies for a renewal of	his licence, or a person already elected or appointed	to some position seeks confirmation from some confirming authority.
The learned Vice-Chancellor went	on to say that there was a substantial distinction	between forfeiture cases and application cases. In forfeiture cases, there is a threat to take something	away for some reason.	In such	cases,	the right to an unbiased tribunal, the right to notice of the charges and the right	to be heard in answer to the charges which were the three features of natural justice are plainly apt. In	application cases, on the other land, nothing is being taken away, and in all normal circumstances there are no charges, and so no requirement of an opportunity of being heard in answer to the charges. Indeed, there is the far wider and less defined questions of the general suitability of the	applicant for membership or a licence. The distinction is	well recognized, for in general it is clear that the Courts will require natural justice to be observed for expulsion	from a social club, built	not on an application for	admission to it. The intermediate category i.e. Of the expectation cases, may at least in some respects be regarded as being more akin to forfeiture	cases	than application cases; for although in	form there is no forfeiture but	merely an attempt at acquisition that fails, the legitimate	expectation of a renewal of the licence or con formation of the membership is one which	raises	the question of what it is that	has happened to make	the applicant unsuitable for the membership or licence for which he was previously thought suitable.
In such cases, Megarry, V.C. felt that much help cannot be had	from	discussing whether 'natural	justice' or 'fairness' was	the more appropriate term. He observes that if one expects that natural justice is a flexible term which impose, different requirement in different cases, it is capable of applying appropriately to the whole range of situations indicated by the	terms such as	'judicial,' 'quasi-, judicial' and 'administrative'. The content of the "duty to act fairly' did not	impose on the Board to give either oral hearing to the 213 applicant or to disclose the case against him nor was . it under any obligation to give	reasons for a decision. The learned Judge then went on to say	that there was no obligation for the Board to give the applicant even the gist of the	reasons	while	they refused his application, or proposed to do so, and added.
The concepts of natural justice and the duty to be fair must	not be allowed to discredit themselves while ranking unreasonable requirements and imposing undue burdens." In such cases; the right to hearing has been denied on the ground that the	claim	or interest or legitimate expectation is	a more	'privilege or 'licence'. This is in consonance with the decision of a Constitution Bench of this Court in Kishan Chand	Arora v. Commissioner	of Police, Calcutta following the judgment of the Privy	Council in Nakkuda Ali v. M.F.De S. Jayaratne's case.
It is beyond the scope of the present judgment to enter into a	discussion on the apparent conflict	between	the decision . Of the Privy Council in Nakkuda Ali's case and the observation	of Lord Reid in Baldwin's case. It would appear that the long line of cases beginning with Baldwin's case and ending with D'arcy Ryan's case are cases dealing with interference with property rights, deprivation of membership of professional or	other non-statutory bodies, dismissal from	office, imposition of penalties	and deprivation of	advantages etc.	Both the Privy Council as well as	this Court have required strict adherence to the rules of natural justice where a public authority or body has to	deal with rights. But the principle that there was a duly to	observe the audi alteram partem rule may not apply to cases which relate	not to	rights or legal expectations but to mere privilege or licence.
lt is now	well-settled that while considering	the question of breach of the principles of natural justice, the Court should not proceed as if there are inflexible rules of natural justice	of universal application. Each case depends on its own circumstances. Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the legislature under which they have to act.
214 There is nothing in the language of r.7 of the Rules to suggest	that in refusing to	grant	the privilege,	the Commissioner is	obliged to act 'judicially'. The order refusing a licence under r.7 is purely an administrative or executive order and is not open to appeal or revision. There is no lis between the Commissioner and the person who is refused such privilege. The power of	refusal	of licence unlike the power to grant is	not subject to any	pre- condition.
It must follow that the grant of a liquor licence under r.7 of	the Rules does not involve any right or expectation but it	is a matter of privilege. The Commissioner	was therefore under no obligation either to disclose the sources of information	or the	gist of the information that he had.
All that was required	was that he should act fairly, and deal with the applications without any bias, and not in an .
arbitrary or capricious manner.
There is no suggestion of any mala fides on the part of the Commissioner or the State Government. The Commissioner heard both the parties after he had an inquiry made through the collector to adjudge their suitability for the grant of the licence. The Commissioner had issued a questionnaire and had the material collected	by the Collector.	The Commissioner was entitled to act on the report of	the Collector and also on other material gathered by him during the course of the inquiry. There is no requirement under the Act for	a confronted hearing like the hearing contemplated between rival claimants for the grant	of a stage carriage permit	under the Motor Vehicles Act, 1939	into their respective merits and demerits. The Commissioner separately heard both the parties	and had their statements recorded with respect to all the relevant aspects It cannot be said that the Commissioner in dealing with the applications did not act fairly in not furnishing a copy of the report of the Collector or in taking a representation from Messrs Majestic Bottling Company., The High Court could not have in proceedings under Art.
226 of	the Constitution interfered with the impugned order of the	Commissioner merely because on a reappraisal of the evidence it might have come to a contrary conclusion. There was no error of jurisdiction on the part of the Commissioner nor was the impugned order vitiated by any error apparent on the face of	the record. The finding reached by	the Commissioner that the application made by Messrs Chingleput Bottlers was not made bona fide on their own 215 account but as benanmi	for others is a finding based on appreciation A of evidence. The Commissioner was entitled to rely upon the facts found by	the Collector.	It may be pointed out that the Collector's report is entirely based on the statement of V. Ramabadran, managing partner of Messrs Chingleput Bottlers. The High Court was therefore justified in dismissing the appeal preferred by Messrs Chingleput Bottlers.
In the result, the appeal preferred by the State Government must	succeed and is allowed. The judgment	and order passed by the High Court for the issue of a writ or mandamus directing the Commissioner of Prohibition & Excise, Madras is set	aside and the	case is demanded to	the Commissioner for a decision afresh according to law. For the reasons	stated, the appeal filed by Messrs Chingleput Bottlers must fail and is dismissed.