Lalchand Jaiswal vs Municipal Corporation, Murwara (Katni) and Others

S.P. Khare, J.

This is a petition under Article 226 of the Constitution of India for quashing the order dated 1.4.1999 (Annexure P-1) of the Respondent No. 2 and for a direction to the Respondent No. 1 to consider the application of the Petitioner for renewal of Bar licence F.L.3 for the year 1999-2000.

The Petitioner is running "Dreamland Bar and Restaurant" near old Bus stand, Katni. He was granted bar licence F.L.3 for the year 1997-98 and 1998-99 by the Municipal Corpporation, Katni as per notification dated 29.3.1996 of the State Government. The pelitioner submitted an application on 19.3.1999 for renewal of this licence for the year 1999-2000. That has been rejected by the impugned order dated 1.4.1999 by the Municipal Commissioner mainly on the grounds (a) the hotel bar is adjacent to Anjuman Islamia School (b) it is in front of the Government hospital and (c) it is close to the Stadium. There is objection of the Collector to the grant of FL 3 licence to the Petitioner on these grounds. The Petitioner had filed a civil suit but that has been ultimately held to be not maintainable in the absence of the statutory notice u/s 401 of the M.P. Municipal Corporation Act, 1956 (hereinafter to be referred to as the Act).

The Petitioner''s case is that his application for renewal of the licence was to be considered by the "Municipal Corporation" and not by the "Commissioner". It was necessary to give an opportunity of hearing to the Petitioner on the objections of the Collector and other persons so that he could explain that those objections are not valid. According to the Petitioner the bar is existing in the same premises for the last 10 years and the Petitioner is having this licence for two years for running the bar at the same place. Therefore, the renewal could not be declined on the ground that the bar is near the school, hospital and stadium. The refusal is said to be malafide.

The Respondents'' case is that according to the norms laid down by the State Government the licence could not be renewed. The Municipal Commissioner could pass the order rejecting the application for renewal keeping in view the objections of the Collector and the representations received from other quarters. There was no need of hearing the Petitioner on those objections. It is said that the application for renewal has been rejected in public interest. This writ petition is not maintainable in view of the alternative remedy of appeal to the Appeal Committee of the Municipal Corporation against the order of the Municipal Commissioner.

The points for determination are (a) whether the application for renewal of the licence FL 3 was to be considered by the Municipal Corporation and not the Commissioner alone (b) whether it was necessary to hear the Petitioner on various objections as to the renewal of the licence at the site where the bar is running (c) whether the grounds on which the application was rejected are valid and (d) whether this petition is not maintainable in view of the alleged alternative remedy. The learned Counsel for both the sides have been heard on these points.

Points (a)

Rule 8 (3) of the M.P. Foreign Liquor Rules, 1996 provides that FL 2 and FL 3 licences shall be granted by the "Municipal Corporation" or the "Municipal Committee" within the local limits of their respective areas as per the guidelines laid down by the State Government". This rule does not confer the power to grant the licence on the "Municipal Commissioner". According to Section 2 (13) of the Act "Corporation" means the Municipality of a larger urban area. Section 6 enumerates the Municipal authorities charged with carrying out the provisions of the Act as (a) the Corporation (b) the Standing Committee and (c) the Commissioner. As per Section 54 the Commissioner of the Corporation shall be appointed by the Government. According to Section 55 he shall be the "Principal executive officer" of the Corporation. Section 69 (2) porvides that the Municipal Government of the city vests in the Corporation. "Sub-section (3) of Section 69 vests in the Commissioner "the entire executive power" for the purpose of carrying out the porvisions of the Act. Section 366 (2) provides that every licence granted under the Act shall be signed by the Commissioner. Sub-section (9) of Section 366 states that every application for a licence shall be addressed to the Commissioner. A careful reading of these relevant provisions shows that the "Corporation" and "the Commissioner" are two different Municipal authorities. The Commissioner is the principal executive officer of the Corporation and the entire executive power is vested in him for the purpose of carrying out the provisions of the Act but he is not the Corporation. As Rule 8 (3) of the Foreign Liqour Rules, 1996 confers the power to grant FL 3 licence on the "Municipal Corporation", it could not be exercised by the Municipal Commissioner. That is to be exercised by the "Corporation" which is a distinct Minicipal authority. Nothing has been pointed out on behalf of the Respondents to show that legally there could be delegation of this power of the Corporation to the Municipal Commissioner or in fact it has been delegated to him.

In the celebrated book "Principles of Statutory Interpretation" by Justice G.P. Singh, 7th Edition page 752 the law has been stated: "when the Act prescribes a particular body or officer to exercise a power, if must be exercised by that body or officer and non-else unless the Act by express words or necessary implication permits delegation, in which event it may be exercised by the delegate if delegation is made in accordance with the terms of the Act but not otherwise". In Director General, E.S.I. and another Vs. T. Abdul Razak, etc., it has been stated that the law is well settled that in accordance with the maxim "delegatus non potest delegare", a staturory power must be exercised only by the body or officer in whom it has been confided, unless sub-delegation of the power is authorised by express words or necessary implication.

In view of the above legal position the question of renewal of the licence of the Petitioner could be considered by the "Corporation" which is a Municipal authority under the Act and it could not be done by the Municipal Commissioner. As already stated Rule 8 (3) of the M.P. Foreign Liquor Rules, 1996 has conferred that power on the Municipal Corporation and there is no indication in that rule for sub-delegation of this power of the Corporation. The decision-making power is vested in the Corporation which is to be exercised in the manner in which the Corporation takes the decision. The order dated 1.4.1999 (Annexure P-1) issued by the Municipal Commissioner without any decision in that behalf by the Corporation is without jurisdiction.

Points (b) and (c)

Article 47 of the Constitution of India ordains that the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. It incorporates the Gandhian philosophy: "Nothing but ruin stares a nation in the face that is prey to the drinking habit". It is one of the directive principles which is fundamental in the governance of the country. There is no fundamental right to do trade or business in intoxicants. It can be prohibited or regulated by the State.

The Constitution Bench of the Supreme Court in the case of Khoday Distilleries Ltd. and Others Vs. State of Karnataka and Others, has held that because of its vicious and pernicious nature, dealing in intoxicating liquors is considered to be res extra comnnercium (outside commerce).

Long back Field, J. in Crowley v. Christensen (1889) 34 L. Ed. 620 proclaimed: "There is no inherent right in a citizen to sell intoxicating liquours by retail; it is not a privilege of a citizen. As it is a business attended with "danger to the community", it may be entirely prohibited, or be permitted under such conditions as will "limit to the utmost its evils", (emphasis supplied). This dictum has been approved in several Constitution Bench decisions of the Supreme Court hoding that "intoxicating liquors are inherently harmful to the individuals consuming them and to the Society as a whole" and therefore the trade and business in liquour can be restricted. This principle has been rencently reiterated in State of Andhra Pradesh and others, etc. Vs. McDowell and Co. and others, etc., .

Renewal of bar licence cannot be automatic and the licence holder cannot claim any "legitimate expectation" for such renewal. Madras City Wine Merchants'' Association and Another Vs. State of T.N. and Another, . In the present case the Petitioner is not entitled as of right to renewal of the licence for running the liquor bar at the site where he is doing so for the last two years. The grounds on which the Minicipal Commissioner declined to renew the licence are legal and valid. These grounds are that this liquor bar is running in immediate vicinity or close proximity to the school, hospital and stadium. The object is that people who come there should not be tempted to enter into the liquor bar and drink; and thereby to limit the evil to some extent. The Municipal Corporation, Katni will consider the application of the Petitioner for renewal of the licence keeping in view these grounds. It was pointed on behalf of the Petitioner that the Collector has granted licence to a person who is running the ritail shop of the liquor at some distance. There is a difference between a retail shop and bar. From the retail shop the consumers of liquor buy the liquor bottles and take them elsewhere for consumption but in the liquor bar the intoxicant is consumed there itself. The Corporation may consider that in case the licence is renewed the Petitioner should be directed to shift it elsewhere. It is found from the record that the Petitioner was running such bar at Jhinjhri which is a place away from the dence locality and the ''Mayor'' allowed the shifting of this barto the present place without taking into consideration the points referred above.

The plea of the Respondents is that renewal of the licence is an administrative act. In the present case the Petitioner has got a copy of the return with the annexures which contain the objections and he may submit his explanation or representation to the Corporation as early as possible.

Point (d)

As the order of the Commissioner of the Minicipal Corporation was without jurisdiction there was no question of assailing it in appeal before the Appeal Committee of the Corporation. The writ petition challenging such order is maintainable.

The petition is allowed to the extent that the order dated 1.4.1999 (Annexure P-1) of the Municipal Commissioner is quashed. The Municipal Corporation Katni will consider the application of the Petitioner for renewal of the lecence in light of the observations made above and after taking into account the objections and the representation of the Petitioner on the those objections. The Corporation will pass a reasoned order. The Collector, Katni is directed to reconsider the question whether the retail liquor shop near the school, hospital and stadium should continue there or it should be shifted elsewhere. A copy of this order be sent by the Registry to him.