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Satya Vijai v. State Of U.P. & Others - WRIT TAX No. 245 of 2006 [2006] RD-AH 5801 (9 March 2006)


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Civil Misc. Writ Petition No.245 of 2006

Satya Vijai          Vs.         State of U.P. & others.

Hon'ble A.K. Yog, J.

Hon'ble Prakash Krishna, J.

The petitioner, Shri Satya Vijai, a licensee for country liquor for the year 2005-06 in respect of village Budhana, District Muzaffarnagar having two sub-shops at Villages Alipur  Atirna  and Nagwa, has filed the present writ petition for quashing the order dated 28th December, 2005 passed by the District Excise Officer, Muzaffarnagar in favour of respondent no.4 and also claimed a writ of Mandamus restraining the respondents from opening any country liquor shop at village Itawa, District Muzaffarnagar in pursuance of the impugned order dated 28.12.2005. The facts of the case in brief are as follows:-

The petitioner was allotted a shop to vend country liquor for the year 2005-06 in pursuance of the advertisement on payment of licence fee  of Rs.1,11,50,060/- annually  with the basic licence fee of Rs.14,11,400/- vide annexure-1 to the writ petition.  The respondent no.4, Satpal,  applied for and was allotted a shop to vend country liquor at village Khandrawali by the order dated 26.6.2005 vide annexure-3 to the writ petition. The aforesaid shop of the respondent No.4, Satpal,  has been shifted from Village Khandrawali to village Itawa by the impugned order.

The case of the petitioner is that shifting of shop of the respondent no.4 from the original place namely village Khandrawali to village Itawa has adversely effected his business and the shifting of the shop being in contravention of the Rule, known as U.P. Number and Location of  Excise Shop Rules 1968 framed under the U.P. Excise Act, 1920, is liable to be set aside. The further case is that the said shifting of the shop of the respondent No.4 has been done  on extraneous considerations specially  on the letter of Shri Virendra Singh, Minister, Animal Husbandry, Uttar Pradesh.

Two sets of counter affidavit have been filed -  one on behalf of the respondents No.1,2 and 3 through Shri S.N. Sharma, District Excise Officer, Muzaffarnagar wherein attempt has been made to show that the petitioner has not suffered any loss on account of  shifting of shop of respondent no.4 from village Khandrawali to village Itawa in as much as the petitioner has lifted country liquor  over and above the minimum guarantee quota fixed in the licence. It has been stated that in the month of January, 2006  the sales of the petitioner instead of coming down  due to opening of shop of the respondent no.4 has increased in comparison to the sales of the earlier months vide para 3-B of the counter affidavit. The shifting of the shop has been justified on the ground that there was demand by the residents of village Khandrawali to shift the shop from their village namely Khandrawali  and there was strong public resistance.  Before shifting shop to village Itawa, report from Excise Inspector and Sub Divisional Magistrate, Budhana, District- Muzaffarnagar/ Annexures - 4 and 5  to the counter affidavit, were called for by the District Excise Officer. The District Excise Officer after taking into consideration the representation made by the residents of village as also of the respondent no.4  and the two reports  one of District Excise Inspector dated 20.9.2005 and of the S.D.M. dated 21.12.2005 passed the impugned order on relevant consideration.  The said order has been passed in accordance with law on the basis of the material on the record and the allegation that the impugned order was politically motivated has been denied. It has been further stated that the shop of the respondent no.4 at the shifted place is about 8.6 kilometers from the shop of the petitioner. The distance between the village  Khandrawali and village Itawa is about 29 Kilometers, distance between the village Itawa and village Nagwa Tali is about 5 Kilometers. The distance between town area Budhana and village Itawa is about 8.6 Kilometers vide para -6 of the counter affidavit.  It has been further stated that petitioner is licensee  to vend country liquor  at Budhana with its sub-shop at Atirna and village Nagwatali and the shop of the respondent no.4 is in village Itawa  as ordered by the impugned order is beyond the territorial limit of the town area Budhana, village Alipur Atirna and Village Nagwatali. The plea that the petitioner has got an alternative remedy by way of appeal against the impugned order has also been set up in the counter affidavit.

The respondent no.4 has also filed a counter affidavit raising more or less the pleas, which have been taken by the other respondents namely 1,2 and 3.

Heard Shri Shashi Nandan, Senior Advocate, assisted by Shri Namit Srivastava, counsel for the petitioner, Shri S.P. Kesarwani, the learned standing counsel for the respondents no.1,2 and 3 and Shri Rajeev Gupta for the respondent no.4.

The respondent no.4 has shifted his shop to village Itwa and running the country liquor shop at the shifted place since 2.1.2006.

The learned counsel for the petitioner laid emphasis and submitted that the basic fee of the petitioner is about ten times to the basic fee paid by the respondent no.4 to vend country liquor. He challenged legality of the impugned order on the ground that while passing the impugned order, the authority concerned has violated Rule -5 of U.P. Number and Location of Excise Shop Rules 1968 (for the short Rules, 1968) which provides that no change in site of any shop or sub-shops, except for very cogent reason to be recorded in writing shall be permitted during currency of a settlement.  Advancing the argument further, it was submitted that while permitting the respondent no.4 to shift shop from village Khandrawali to village  Itawa, the reasons given by the authority concerned are not cogent reasons.

We have given careful consideration to the aforesaid submissions of the learned counsel of the petitioner.  Before adverting to the submissions it is desirable to notice certain facts which are not in dispute between the parties.  

The monthly quantity of country liquor lifted (in BL) by the petitioner is detailed in counter affidavit filed on behalf of the respondents no.1, 2 and 3, in para -3 B. The said para is reproduced below:-

Month M.G.Q.(in BL) Lifted quantity of

                         In terms of 36% V/V        Country Liquor (in BL)

        In terms of 36% V/V

April, 2005 11769 12660.84

May, 2005 11761 14661.76

June, 2005 11761 13612.32

July, 2005 11761 14679.55

Aug. 2005 11761 13830.40

Sept.2005 11761 11934.0

Oct.2005 11761 11793.92

Nov.2005 11761 11779.92

Dec.2005 11761 10566.0

Jan.2006 11761 13741.20

Feb.2006 2940.25  6840.88

                  (Proportionate quantity (Quantity lifted in the month

                   for 7 days i.e. up to             of Feb. 2006 up to 7.2.06).


            _______________________    ___________________

                  120558.25                                  136100.47

            _______________________     ____________________

Reply of the aforesaid para has been given in para -5 of the rejoinder affidavit of Shri Sanjiv Malik. The contents of para- 5 is reproduced below:-

"That the contents of paragraph no. 3-B of the  counter affidavit are admitted to the extent that petitioner had lifted the M.G.Q. till January, 2006 to a tune of 129260 B.L.  But from the month of  February from the date the respondent shop is allowed  to run from the petitioner area of  exclusive privilege  the sale  has considerly   came down and petitioner had only lifted 6841.08 B.L. for the  month of  February upto 9.2.2006 as the respondents has shown wrong  date i.e. 7.2.2006 in stead of the 9.2.2006 petitioner has not filed any quota as considerable amount of country liquor are lying in the shop's of the petitioner which he is unable to sell further there is a shortfall  of  4919.92 B.L. for the month of  February which the petitioner cannot lift."

It is evident from a bare perusal of the reply given in the rejoinder affidavit that the petitioner has not disputed the fact that they have lifted more than minimum guarantee quota (M.G.Q.) up to 7th February, 2006.  The second aspect of the case is that it has neither pleaded nor proved nor disputed during the course of the argument that the village Itawa does not fall within the territory of village Budhana or village Alipur Atirna and Nagwa wherein petitioner's sub-shops are situated. It is, therefore, crystal clear that shifting of shop from the village Khandrawali to village Itawa is outside the territorial limit prescribed in the licence of the petitioner's shop and sub-shops.

One of the main grievances of the petitioner appears to be, is that village Itawa falls in between village  Budhana  and Nagwa meaning thereby " that a new country liquor shop to be opened by the respondent no.4  will be actually  encroaching into the business of petitioner thereby causing him a huge financial loss" vide para 22 of the writ petition and that the petitioner is paying substantial amount in comparison to the respondent no.4 by way of licence fee.  Further  averment in para 24 of the writ petition is that if the respondent no.4 is permitted to open his shop at village Itawa in pursuance of the impugned order dated 28.12.2005,  it will not be possible for the petitioner to lift the minimum guarantee quota fixed for a shop which would result into loss of public revenue  also, as per para 24 of the writ petition. These are the entire allegations dealing with the plea of the petitioner with regard to the financial loss, pleaded in the writ petition. As demonstrated by the respondent in their counter affidavit  that the petitioner has been lifting more than the minimum guarantee quota  as prescribed in his licence, therefore, we are of the opinion that the averment made that the petitioner would not be able to lift the minimum guarantee quota and would, thus, suffer serious financial loss is not proved.

The contesting respondents no.1,2 and 3 in para 18 of  their counter affidavit have raised a specific plea which has not been specifically denied by the petitioner  that "neither the petitioner can sell country liquor outside the territorial limits of  town area Budhana,  village Alipur Atirna and Village Nagwa Tali nor the respondent no.4 can sell country liquor outside the territorial limits of village  Itawa".

As regards the plea of violation of Rule 5 of the Rules 1968 is concerned, it is appropriate to reproduce Rule 5 :-

"5. The following principles shall be observed in determining the location and the sites for shops/sub-shops:

(1) The location and the sites of all shops and sub-shops shall be decided by the Collector.

(2) No change in the site of any shop or sub-shop shall, except for very cogent reasons to be recorded in writing, shall be permitted during the currency of a settlement. The location of all shops and sub-shops shall be clearly defined at settlement in order to prevent any shifting of sites.

(3) ...................................

(4) ..................................

(5) ....................................

(6) .....................................

(7) ...................................

(8) ......................................

(9) .....................................

The pleading with regard to the violation of the above Rule 5.2  is that the District Excise Officer passed the impugned order at the behest of the Minister of Animal Husbandry and the same is neither in the public interest nor it is in consonance with the provisions of Rule  1968 vide para 20 of the writ petition. At the outset it may be stated here that the Minister of Animal Husbandry has not been impleaded as a party to the writ petition. A copy of the alleged letter of the Minister has been annexed as annexure-4 to the writ petition.  The aforesaid letter is dated 3rd of July, 2005 addressed to the Excise Officer wherein it has been mentioned that certain persons have opposed the opening of the country liquor shop  at village Khandrawali and it is in the interest of public in general to shift the shop to some other appropriate place wherein there is no public opposition. It appears that the District Excise Officer endorsed the said letter to the District Excise Inspector and asked for a report. The District Excise Inspector submitted a report dated 20.9.2005. A copy of the same has been filed as Annexure-C.A.4 to the counter affidavit. The respondents have also annexed protest letters given by the residents of the village for opening of the shop in the village and also a letter dated 8th of July, 2005 given by the respondent no.4  for permission to shift the shop to another place in view of the public resistance at village  Khandrawali  vide Annexure -CA -2. The District Excise Officer also called for a report from the Sub Divisional Magistrate who by his report dated 21.12.2005 found that during an enquiry  the distance between the Qasba Budhana to Itawa is about 8.6 Kilometers and there is no country liquor shop in between. He recommended, in the interest of  revenue to shift the shop to village Itawa vide Annexure-CA-5. The District Excise Officer after taking into consideration the entire facts and circumstances of the case and the two reports  permitted shifting  of the shop of the respondent no.4 from village Khandrawali to village Itawa by the impugned order dated 28.12.2005. Thus, it is crystal clear that the District Excise Officer before passing the impugned order got the matter enquired into and did not act in haste in passing the impugned order simply on the basis of recommendation made by the Minister, Animal Husbandry. The Minister, Animal Husbandry through his letter dated 8th July, 2005 brought to the notice of the District Excise Officer  the public opinion prevailing in village Khandrawali with regard to the opening of country liquor shop. It would be far stretching  the said letter of the Minister to contend that the impugned order was passed at the behest of the Minister concerned. Had it been so the order would have been passed  shortly after the receipt of the letter of the Minister. Since the concerned Minister has not been impleaded as one of the respondents, the allegations of mala fide cannot be gone into by this Court.

The impugned order has been passed after due enquiry and taking into consideration the relevant facts.

We also do not find any substance in the argument of the learned counsel for the petitioner that the change in site of the shop of the respondent no.4 was permitted without recording cogent reasons in writing. Further on a true and proper construction of Rule 5 (2) of the Rule 1968 we are of the opinion that the petitioner cannot challenge the shifting of the site of the shop of the respondent no.4 unless and until there is encroachment in the territory assigned to the petitioner under his licence to sell country liquor. Nor the petitioner has been able to prove any financial loss. Rule 5 (2) of Rules 1968 lays down for shifting the site of shop originally allotted to a licensee. The intention is clear that normally a licencee shall not be permitted to shift the site of his shop.

It is also not out of place to mention here that it is well settled by the numerous decisions of the Apex Court that there is no fundamental right to do trade or business in intoxicants and the State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants, its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State and indeed without such vesting there can be no effective regulation of  various forms of activities in relation to intoxicants. See,  The State of Bombay v. F.N. Balsara, AIR 1951 SC 318; Cooverjee B. Bharucha v. Excise Commissioner and Chief Commissioner, Ajmer, AIR 1954 SC 220; State of Assam v.  A.N. Kidwai, AIR 1957 SC 414; Nagendra nath  v.  Commissioner  of Hills Division, AIR 1958 SC 398; Aman Chandra Chakraborti  v. Collector of Excise, Government of Tripura, AIR 1972 SC 1863; State of Orissa v. Hari Narayan Jaiswal, AIR 1972 SC 1816; Nashirwar etc. v. State of Madhya Pradesh, AIR 1975 SC 360; Har Shanker and others v.  The Deputy Excise and Taxation Commissioner and others, AIR 1975 SC 1121; Lakhanlal  v. State of Orissa,  (1976) 4 SCC 660; Sat Pal & Co. v. Lt. Governor of Delhi, (1979) 4 SCC 232; Southern Pharmaceuticals and Chemicals v. State of Kerala, (1981) 4 SCC 391; State of M.P. v. Nandlal Jaiswal, (1986) 4 SCC 566; Doonganji & Co. (I) v. State of M.P., 1991 Supp (2) SCC 313; Khoday Distilleries Ltd. and others  v.  State of Karnataka and others, (1995) 1 SCC 574;  Rajendra Singh  v.  State of M.P. and others, (1996) 5 SCC 460 and Yadar Shafi and others v. State of J & K and others, (1996) 5 SCC 740.

In "American Jurisprudence", Volume 30, it has been  stated at page 538-541 that while engaging in liquor traffic is not inherently unlawful, nevertheless it is a privilege and not a right, subject to government control.  This power of control is an incident of the society's right to self-protection and it rests upon the right of the State to care for the health, morals and welfare of the people. Liquor traffic  is a source of pauperism and crime.

The Apex Court in the case of  Government of Maharashtra and others  v. Deokar's Distillery, (2003) 5 SCC 669 has once again reiterated the above principle. Paragraphs 43 to 45 of the report is reproduced below:-

"43. Concededly, a citizen of India in view of a catena of decisions of this Court has no fundamental right to carry on trade or business in potable liquor.  The State indisputably has a right to regulate or prohibit business in potable liquor as a beverage or otherwise keeping in view the fact that the same is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently  harmful. The State is, therefore, entitled to completely prohibit a trade or business in liquor  and create monopoly either in itself  or in an agency created by it or take over such activities itself. For the purpose of selling the licence it can adopt any mode with a view to maximize  its revenue so long as the method adopted is not discriminatory.

44. However, when the State permits trade or business in potable liquor, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business (See Khoday Distilleries Ltd. (supra)).

45. Although a citizen has no fundamental right to carry on trade or business in potable liquor, but when he is permitted to carry on such business, he would be entitled to claim equal right as against other citizens. In absence of the State imposing any prohibition or monopolizing the business, the same may be carried on by the licensee without being subjected to any discrimination. Such a right although may not be elevated to the status of a fundamental right but all the same it is a right."

Thus, the petitioner has no fundamental right to carry on trade in liquor or intoxicant except under a permit to be issued in accordance with the Rules."

In view of the fact that the petitioner has not been able to plead and show specifically any business loss by  shifting of the shop of  respondent no.4 to village Itawa, that the parties have failed to show their respective sales and or expected sale, the fact that the said shop is beyond the territorial limit of the petitioner's shop and sub-shops; the impugned order has been given effect to and above all when excise year is going to expire in a couple of weeks, i.e. on 31st of March, 2006, this Court is reluctant to permit the petitioner to invoke discretionary and extra-ordinary jurisdiction of this Court  to quash the impugned order in the facts of the present case.

We must, however, remind ourselves that power conferred on the High Court under Articles 226 and 227 of the Constitution of India is to advance justice and not to thwart it.  In this respect the following observation of the Apex Court made in the case of  Roshan Deen  Vs. Preeti Lal JT 2001 (10) S.C. 309  is reproduced below:-

"The look out of the High Court is, therefore, not merely to pick out any error of law through an academic angle but to see whether injustice has resulted on account of any erroneous interpretation of law.  If justice became the by-product of an erroneous view of law, the High Court is not expected to erase such justice in the name of correcting the error of law.

In view of the above discussion we find that is not an appropriate case where a writ, order or direction should be issued in the facts and circumstances of the present case. However, we add a word of caution. The respondents while allotting the shop by way of auction, renewal or otherwise in respect of  Excise Year 2006-07 shall take into consideration the site to which the shop is allotted and work out and fix the licence fee etc. accordingly.

In the result the writ petition is dismissed. No order as to costs.

Dt.   9th  March, 2006



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