RISHI DIKSHIT Vs. STATE OF C.G.
LAWS(CHH)-2005-3-24
HIGH COURT OF CHHATTISGARH
Decided on March 31,2005

RISHI DIKSHIT Appellant
VERSUS
STATE OF C.G. Respondents

JUDGEMENT

A.K.PATNAIK,C.J. - (1.) THE petitioner is a business man and deals in liquor business. The State of Chhattisgarh was formed with effect from 01-11-2000 and the Madhya Pradesh Excise Act, 1915 was adapted under the provisions of the Madhya Pradesh Re-organization Act so as to make it applicable with modifications in the State of Chhattisgarh and on such adaptation, the Act has been renamed as Chhattisgarh Excise Act, 1915 (for short "the Act") Section 62 (1) of the Act provides that the State Government may make rules for the purpose of carrying out the provisions of the Act and Section 62 (2) provides that the State Government may in particular, and without prejudice to the generality of the provisions of Section 62 (1) make rules on the matters specified in clauses (a) to (n) thereof. In exercise of this power under Section 62 (1) read with Clauses (d) (d-1), (e), (f), (g) and Clause (b) of Section 18 (1) of the Act, the State Government by a notification dated 15-03-2002 made the Chhattisgarh Excise Settlement of Licences for retail sale of country/ foreign liquor Rules, 2002 (for short "the Rules 2002"). Thereafter, the Excise Commissioner, State of Chhattisgarh issued a circular dated 14-02-2005 to all the Collectors of the State of Chhattisgarh regarding the rules for settlement of licences for retail sale of country/foreign liquor shops in the State of Chhattisgarh for the year 2005-06. Pursuant to the said circular applications were invited from intending applicants for settlement of licences for retail sale of country liquor/ foreign liquor in the State of Chhattisgarh for the year 2005-06 and the petitioner amongst others applied for the group Rasera, District Raipur vide their application No.01250026 dated 26-02-2005 for licence of retail sale of country liquor/foreign liquor. After receipt of the applications, the respondents have proceeded to select the licensees. The petitioner has filed this writ petition challenging the circular dated 14-02- 2005 issued by the Excise Commissioner, state of Chhattisgarh and praying that the impugned circular be quashed and suitable directions be given to the respondents with regard to selection of the retail licensees of country/foreign liquor shops in the State of Chhattisgarh.
(2.) AT the hearing Mr. Ravindra Shrivastava along with Mr. P. Diwaker, Sr. Advocates submitted that under Section 62(2) of the Act, the State Government has made the Rules 2002 and Rule 9 of the Rules 2002 stipulates the eligibility conditions of the applicant and these are that the applicant should be a citizen of India or a partnership firm whose partners are citizen of India; should be above 21 years of age; should not be a defaulter/or should not be black listed or debarred from holding an excise licence under the provisions of the Rules made under the Act, possesses or has an arrangement for taking on rent suitable premises in the concerned locality for opening the shops in accordance with the Rules; possesses good moral character and has no criminal background and has not been convicted of any offence punishable under the Act or Narcotic Drugs and Psychotropic Substances Act, 1985 or any other law for the time being in force and that no government dues are outstanding against him. But the format of the application as prescribed by the Excise Commissioner, State of Chhattisgarh in the impugned circular does not contain any column requiring the applicant to furnish information to show that he satisfies the aforesaid eligibility conditions as prescribed under Rule 9 of the Rules 2002. they submitted that Rule 11 of Rules 2002 provides for selection of licensee from amongst such eligible or suitable applicants but unless the applications show that the applicants satisfied the eligibility conditions as prescribed in Rule 9 of the Rules 2002, the Committee entrusted under Rule 11 to select the licensee will not be able to know as to whether the applicant is eligible or suitable for grant of licence for retail sale of country or foreign liquor. They argued that the provisions in Rule 9 provide the eligibility conditions of the applicant, and are, therefore, mandatory and cannot be dispensed with by the Excise Commissioner, State of Chhattisgarh and yet it appears from the impugned circular as well as the prescribed format or the application in which the applicants are required to apply that these mandatory provisions in Rule 9 of the Rules 2002 have been dispensed with. They argued that since there has been a breach of the mandatory requirements of the Rules 2002 by the impugned circular and the applications filed by the applicants do not contain the information for the purpose of determining as to whether the applicants are eligible or suitable, the entire exercise under taken by the Department in selecting the licensees has to be declared by the court as illegal and contrary to the Rules 2002. In reply to the aforesaid submissions made by learned counsel for the petitioner, Mr. Prashant Mishra, learned Additional Advocate General submitted that a reading of Rule 9 would show that the applicant has to fulfill the conditions mentioned therein "for obtaining licence for shops/group of shops of the country liquor/foreign liquor" and, therefore, it is only after a selection is made from amongst the applicants in accordance with Rule 11 of the Rule 2002 that the selected candidates would have to satisfy the eligibility conditions as mentioned in Rule 9 of Rules 2002. He further submitted that the impugned circular was issued by the Excise Commissioner, State of Chhattisgarh pursuant to the decision taken by the State Government to amend the Rules 2002 and the circular was an internal circular issued to the Collectors of different districts of the State of Chhattisgarh. He produced before us a copy of the notification dated 22-03-2005 of the State Government of Chhattisgarh by which the provisions of Rule 8 of Rule 2002 have been amended. He further argued that since the petitioner has submitted an application in the format as prescribed by the Excise Commissioner, State of Chhattisgarh and has participated in the process of selection of the licensees, he has acquiesced in the entire procedure of the selection as laid down in the impugned circular of the Excise Commissioner, State of Chhattisgarh and at this stage he cannot challenge the said procedure as contrary to the Rules 2002. In support of his submission, he cited the judgment of Supreme Court in the case of Nain Sukh Das Vs. U.P. State1, wherein the Supreme Court has held that the petitioners acquiesced in the elections being conducted under the old system of separate electorates and felt no discrimination having been practised against them could not complain of infringement of their fundamental rights under Articles 15(1) and 14 of the Constitution. Mr. Mishra further submitted that it is now well settled by the Courts that the Court would be slow in interfering in matters relating to the policy of the State Government regarding sale of foreign liquor/country liquor. In particular, he cited decisions of the Supreme Court in the case of State of Orissa Vs. Had Narayan Jaiswal2, and in the case of Khoday Distilleries Ltd. Vs. State of Karnataka3. He submitted that in this case also the Courts should not interfere with the policy decision of the State Government as incorporated in the impugned circular of the Excise Commissioner, State of Chhattisgarh.
(3.) MR . Ravi Shankar Prasad, Sr. Advocate assisted by Mr. Abhishek Sinha, learned counsel appearing for the interveners similarly cited the decision of the Supreme Court in the case of State of Madhya Pradesh and Others Vs. Nandlal Jaiswal and Others4 in which the Supreme Court has observed that while considering the applicability of Article 14 in the case where licence for manufacture and sale of liquor is being granted by the State Government, the Court would be slow to interfere with the policy laid down by the State Government for grant of licences for manufacture and sale of liquor having regard to the nature of the trade or business. He also relied on the Constitution Bench decision of the Supreme Court in the Khoday Distilleries Vs. State of Karnataka and Others3 (supra) in which the Supreme Court while summarizing the law relating to the liquor business held that the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees and the State can impose limitations and restrictions on the trade or business in such liquor and such restrictions or limitations can extend to the state carrying on the trade or business itself to the exclusion of and elimination of others and/or to preserving to itself the right to sell licences to do trade or business in the same. Mr. Prasad argued that in view of the aforesaid law laid down by the Supreme Court, the decision of the State Government as to how it will select the retail licensees of country/foreign liquor in the State of Chhattisgarh should be left to the State and should not be interfered with by the Court in exercise of its power of judicial review. Regarding Rule 9 of the Rules 2002, he argued that the requirements in Clauses (a) (b) and (c) of the said Rule 9 that the applicant should be a citizen of India or a partnership firm whose partners are citizens of India; that he should be above 21 years of age; and that he should not be a defaulter/or should not be black listed or debarred from holding an excise licence under the provisions of the Rules made under the Act are eligibility conditions and are mandatory in nature and every applicant has to satisfy the said requirements, but the applicant need not file an affidavit as required in Rule 9 (d) of Rules 2002 to show that he possesses or has an arrangement for taking on rent suitable premises in the concerned locality for opening the shops in accordance with the Rules or that he possesses good moral character or has no criminal back ground or that no government dues are outstanding against him. Such an affidavit, according to Mr. Prasad, can be filed by the applicant after he is selected in accordance with the Rule 11 of the Rules 2002. He cited the decision of the Supreme Court in the case of Rajendra Singh Vs. State of M.P.5 for the proposition that every breach of statutory provision does not furnish a good ground for the Court to interfere and if a statutory provision is only a directory one and not a mandatory one and there is substantial compliance with the directory provision, the Court will not interfere merely because there is some reach in the provisions of the Rules. He submitted that in the case of Rajendra Singh5 (supra) the Supreme Court has further held that wherever a complaint of violation of mandatory provision is made, the Court should inquire as to whose interest the provision is conceived and if it is not conceived in the interest of the public, the question of waiver and/or acquiescence may arise subject of course to the pleadings of the parties and it is necessary for the Court to keep these considerations in mind while deciding whether or not to interfere in the decision under Article 226 or in a suit. Mr. Prasad further submitted that in this case, since the petitioner has acquiesced by submitting an application in the format as prescribed by the Excise Commissioner, State of Chhattisgarh under the impugned circular, he cannot, at this stage be allowed to challenge that Rule 9 of Rules 2002 has been dispensed with by the Excise Commissioner, State of Chhattisgarh in the impugned circular and the format does not contain columns in which the applicant is required to furnish information to show that he satisfies the eligibility requirements as prescribed in Rule 9 of the Rules 2002. Mr. Sanjay K. Agrawal, learned counsel for the different intervener adopted the aforesaid arguments of Mr. Prasad.;


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