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Judgment
Petitioner Association has come to this Court praying for the issuance of a writ of mandamus forbearing the first respondent herein from altering its
policy with regard to licensing of Indian Trade Foreign Liquor (I.M.F.L.) retail shops in so far as the petitioner is concerned.
W.M.P. No. 6338 of 1989 is filed to amend the prayer in the main W.P. No. 3485 of 1985, was ordered on 25-4-1989. The amended prayer
is to the following effect:--
.....to issue any writ, order or direction more appropriate a writ of mandamus directing the respondent authorities to consider the application for
renewal of FL-1 Licences for the year 1989-90 submitted by the members of the Petitioner Association in terms of the conditions set out in the
notice issued by the respondent authorities in Na. Ka. No. 83/83/ dt. 8-2-1989...
The Petitioner Association is registered under the Tamil Nadu Societies Registration Act, 1975 and has 130 members all of whom are retailers
of Indian Made Foreign Liquor (I.M.F.L.). It seems there are 89 shops in Madurai City itself and the remaining 41 shops are located in the
suburbs and nearby villages. It is alleged in the affidavit that the daily turnover would he about Rs. 10,000/-for 10 of the city shops and the
remaining city liquor shops would average between Rupees 3,000/- to Rs. 5,000/-. The daily turnover in the sub-urban and mofussil shops would
average about Rs. 7,000/-. The members of the Petitioner Association are licence holders under the Tamil Nadu Liquor (Licence and Permit)
Rules, 1981 and under these Rules, licences are granted for a period of one year i.e. from 1st of April to 31st March of the following year.
Normally, notifications are issued in December or January every year for renewal of licence. It is alleged in the affidavit that in the year 1989, the
usual notification in January for renewal of the licence has not been issued, and the members of the Petitioner Association were apprehensive that
there will be a radical policy change. It is further alleged in the affidavit, that after the present Government in Tamil Nadu took charge on 27-1-
1989, the notification for renewal of I.M.F.L. retail licence was issued on 8-2-1989 by the second respondent herein, and the members of the
petitioner Association were called for to apply for renewal of their licence for 1989-90, on or before 28th February, 1989, that the fees stipulated
were Rs. 20,000/- privilege fee, Rs. 500/- licence fee and Rs. 100/- application fee, that the members of the petitioner association were thus re-
assured that the policy would continue, and that they renewed rental agreements, and obtained ''No Objection Certificate'' from their landlord. It is
further alleged in the affidavit that the petitioner association received a communication from the Tamil Nadu State Marketing Corporation on 23-2-
1989 stating that the Government had decided that the Tamil Nadu State Marketing Corporation (hereinafter referred to as ''TASMAC'') should
set up retail outlet for I.M.F.L. and beer and 25% of the retail shops would be run by TASMAC. It is also alleged in the affidavit that statements
were issued by the Honourable Chief Minister of Tamil Nadu, on the floor of the Legislative Assembly and to the Press regarding change in policy
with regard to licensing of I.M.F.L. retail shops. It is slated in the affidavit that the change in policy with regard to the I.M.F.L. retail trade will not
be beneficial for the revenue. The petitioner association does not claim a fundamental right to trade in liquor, admitting that the members of the
petitioner association are not questioning the right of the respondent authorities to revise its policy with regard to prohibition from time to time. The
petitioner association''s grievance seems to be that the revision in policy has been abrupt, arbitrary without adequate notice depriving the members
of the petitioner association of their only source of livelihood. Tt is further alleged in the affidavit that the respondent authorities having called upon
the members of the petitioner association to renew their I.M.F.L. licences for the year 1989-90 by issuing a notification dated 8-2-1989 cannot
now alter those terms. Based on the principle of promissory estoppel, the pelitioner association claims that on their part they have acted on the
notification dated 8-2-1989 issued by the respondent authorities, making huge financial commitments and as such the respondent authorities cannot
revise the policy. With these allegations, the pelitioner association has come to this Court with the prayer as stated supra, as amended.
Notice of motion has been ordered by Sivasubramaniam, J. on 14-3-1989. The learned Advocate General appears for the respondent. When
questioned, whether counter is necessary, the learned Advocate General replied that no counter is necessary in this case, and that he will make his
submission.
Mrs. Ramani Natarajan, the learned counsel for the petitioner contends that the respondent authorities are bound to renew the licences of the
members of the petitioner association for one year, as per the Circular dated 8-2-1989 issued by the second respondent herein, and that the
Circular dated 8-2-1989 refers only for a period of one year and does not limit to 31-5-1989. The learned counsel for petitioner association
admits that there is no fundamental right for trade in liquor. But the learned counsel argues that though the right to trade in liquor is not fundamental,
yet Art. 14 of the Constitution will be attracted if the action of the respondent authorities is arbitrary. Relying upon the decision of the Supreme
Court which is reported in State of M.P. and Others Vs. Nandlal Jaiswal and Others, , the learned counsel argues that it is a contract between the
Government and the petitioner add the State Government cannot say unilateraily that the licences cannot be renewed. The learned counsel, relying
upon heavily on the judgment of the Supreme Court which is reported in Delhi Cloth and General Mills Ltd. Vs. Union of India (UOI), , for
applying the principle of promissory estoppel to the facts of this case, submits that alteration of position by promisee is only requirement and the
fact damage, prejudice or detriment to him need not be proved. The learned counsel further relies upon the judgment which is reported in Union of
India (UOI) and Others Vs. Godfrey Philips India Ltd., , and contends that the doctrine of promissory estoppel is applicable against the
Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive
action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. The learned counsel builds up her argument stating that
by Circular dated 8-2-1989, each licence holder of the petitioner association has been informed to renew the licence for the period 1989-90 and
having held out these representations, the Government cannot now say that it will renew the licence only for two months. The learned counsel
states that this stand of the Government is arbitrary and as such the ratio laid down by the Supreme Court in State of M.P. and Others Vs. Nandlal
Jaiswal and Others, , is attracted. The learned counsel further stresses that the decision of the Supreme Court in Delhi Cloth and General Mills Ltd.
Vs. Union of India (UOI), , will apply in all force to the facts of this case, because if the Government has to take the entire retail trade in liquor, the
petitioner has no legs to stand. The learned counsel submits that the policy taken by the Government is not a wholesale take over, but it is only a
modification of the procedure. So, the learned counsel argues that having gone to the extent of informing the members of the petitioner association
by Circular dated 8-2-1989, to renew the licence for one year, now the Government cannot decide unilaterally by another Circular dated 23-1-
1989 allowing the petitioner to do the business to run the retail shops till 31-5-1989.
The learned Advocate General, on behalf of the respondents made the following submissions:
(1)The communication dated 8-2-1989 is only calling for the renewal of the licences and no promise is made by that communication. The renewal
of the licences is provided for under Rule 21 of the Tamil Nadu Liquor (Licence and Permit) Rules, 1981 (hereinafter referred to as the ''Rules'')
and the renewal is not automatic.
(2) The learned Advocate General states the Circular dated 8-2-1989 is issued only by Excise Inspector, Madurai and not by the Government, the
first respondent herein. The learned Advocate General further contends that even on 17-2-1989, the Chief Minister of Tamil Nadu made a
statement on the floor of the Tamil Nadu Legislative Assembly stating that in future auction will be held for running the retail shops and that no
renewal will be granted.
(3) The learned Advocate General submits that the allegations made in the affidavit filed in support of the petition, by the petitioner association are
very vague and no particulars are mentioned in its affidavit that whether the members of the petitioner association applied before or after 17-2-
1989 and the affidavit is bereft of particulars. The learned counsel further contends that the members of the petitioner association are not affected,
because they are already running their shops and they cannot say that they have acted only on the promise of the respondent authorities.
(4) The learned Advocate General relies upon the new Rules framed which are issued as Tamil Nadu Liquor (Retail Vending) Rules, (989 in G. O.
Ms. No. 506, (Home, Prohibition & Excise (XV) Department) dated 15-4-1989 and states that in view of the new Rules, it is not open to the
petitioner association to question the policy of the Government or it is not open to the petitioner association to pray for that they should be granted
licence for the whole year 1989-90.
(5) The learned Advocate General contends that the principle of promissory estoppel will not operate assuming that the members of the petitioner
association has made out a case, because merely calling for application for renewal, wilt not confer any right to the members of the petitioner
association as they have no vested right for renewal. The learned Advocate General relies upon a decision of a Division Bench of this Court which
is reported in Vadiappan State of Tamil Nadu, (1984) 1 MLJ: 1984 Tax LR 2545 and also two decisions which are reported in Jamal M.
Company v. Union of India, 1985 WLR 150 (Mad) and in Balasubramanian, A.S. v. The Assistant Commissioner of Prohibition & Excise,
Collector''s Office, Madras, 1985 WLR 601 and also the new Rules framed by G.O.Ms. No. 506 (Home, Prohibition and Excise (XV)
Department dated 15-4-1989. The argument of the learned Advocate General is that as the above mentioned rules are not challenged so far by the
members of the petitioner association, no writ of mandamus can be issued in these circumstances.
Mrs. Ramani Natarajan, the learned counsel for the petitioner association replies that renewal of the licence of the members of the petitioner
association is automatic, that the circular dated 8-2-1989 relied upon by the petitioner association is a re-assurance given by the Government to
the petitioner with regard to the Policy which is going to be followed in the year 1989-90 and that the Tamil Nadu Liquor (Licence and Permit)
Rules, 1981 have not been repealed so far and they are in existence.
I have given very careful consideration to the arguments of Mrs. Ramani Natarajan, the learned counsel for the petitioner association and the
arguments of the learned Advocate General, for the respondent. It is true that the members of the petitioner association arc the licence holders
under the Tamil Nadu Liquor (Licence and Permit) Rules, 1981. They could have applied for the renewal under Rule 21 of (be abovementioned
Rules. The Circular dated 8-2-1989, which is relied upon by the petitioner stales that under Rule2l of the Rules, it is the duty of the licence holders
to apply for renewal before 28-2-1989. It is further stated therein and all the dealers are requested to send their applications before 28-2-1989 to
the office of the District Collector. I am not able to find out any promise from the reading of the above mentioned Circular, as rightly contended by
the learned Advocate General. The circular merely stated that the dealers have to apply for renewal of their licences within a particular period. In
fact, it is only a repetition of the contents of the Rules, which is already there in the Statute Book. As held by the Supreme Court in Delhi Cloth and
General Mills Ltd. Vs. Union of India (UOI), , for the purpose of finding out whether a promissory estoppel arises in favour of the person acting on
the representation, it is necessary to look into the whole of the representation made. In the above cited case, the Supreme Court has held that the
representation made must be clear, unambiguous and not tentative or uncertain.
The Supreme Court has quoted a passage from Halsbury''s Laws of England, (Hals-bury''s Laws of England, 4th Edition, Vol. 16, p. 1071, para
1595) which is to the following effect:
1595. Representation must be unambiguous -- To found an estoppel a representation must be clear and unambiguous, not necessarily susceptible
if only one interpretation, but such as will reasonably be understood by the person to whom it is made in the sense contended for, and for this
purpose the whole of the representation must be looked at. This is merely an application of the old maxim applicable to all estoppels that they
must be certain to every intent.
As such, I am not able to see any promise in a clear and unambiguous terms made in this case, as contended by the learned counsel for the
petitioner association. By circular dated 8-2-1989 issued by the second respondent, the petitioner association was asked to apply for renewal in
time and that does not mean that the members of the petitioner association will get the renewal of their licences automatically. It is to be noted that
within a week after the Circular dated 8-2-1989, the Chief Minister of Tamil Nadu has made a statement on the floor of the Legislative Assembly
about the change in the policy on this issue, say with regard to the grant of licence to run the liquor shops. It is true that the Supreme Court in State
of M.P. and Others Vs. Nandlal Jaiswal and Others, , which is also a case with regard to grant of licence for manufacture and sale of country
liquor, stating that though there is no fundamental right in a citizen to carry on trade or business in liquor and no one can claim as against the State
the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and
selling liquor, held that when the State decides to grant such right or privilege to others, the State cannot escape the rigour of Art. 14. In the very
same judgment, the Supreme Court has held as follows (at p. 279):
...While considering, the applicability of Art. 14 in such a case, the Court must bear in mind that, having regard to the nature of the trade or
business, 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. The Court, would, in view of the inherently pernicious nature of the commodity allow a large measure of latitude to the State Government in
determining its policy of regulating manufacture and trade in liquor. Moreover, the grant of licences for manufacture and sale of liquor would
essentially be a matter of economic policy where the Court would hesitate to intervene and strike down what the Slate Government has done,
unless it appears to be plainly arbitrary, irrational or mala fide.
I am of the VIEW, that this passage, aptly applies to the facts of the case on hand. I am not able to see that the action of the Government is
arbitrary, irrational or mala fide, because under the Tamil Nadu Liquor (Retail Vending) Rules 1989, which came into force on 15-4-1989, Rule
3(2) provides as follows:
. . .Notwithstanding anything contained in these rules, the licensees under the Tamil Nadu Liquor (Licence and Permit) Rules, 1981 for the retail
vending of liquor who have applied lor renewal under Rule 21 of those rules shall continue such selling in accordance with the provisions of the said
1981 rules during the period on and from the 1st April 1989 to the 31st May 1989, subject to the payment of proportionate privilege fee and
licence fee payable under the said 1981 Rules.
This is an answer to the petitioner''s contention. In Union of India (UOI) and Others Vs. Godfrey Philips India Ltd., . the Supreme Court affirming
the view taken in Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, . held that promissory estoppel cannol be used to
compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority
or power of the officer of the Government or of the public authority to make. In the present case, having noted that the Tamil Nadu Liquor (Retail
Vending) Rules, 1989 came to force on 15-4-1989 vide G.O.Ms. No. 506 (Home, Prohibition and Excise (XV) Department) dated 15th April
1989, and in view of Rule 3(2) of (he abovementioned Rules, 1989. I do not think this Court can issue a writ as prayed for. The fundamental
principle being no mandamus can be issued against a Statute. Rule 3(2) of Rules. 1989 provides for a particular mode of disposing of the
applications of members of the petitioner association. This Court cannot issue a Writ of Mandamus against the tenor of that Rule.
Moreover, the vires of the Rules are not in question as rightly contended by the learned Advocate General. A Division Bench of this Court in C.
Vadiappan and Others Vs. The State of Tamil Nadu and Others, when holding Tamil Nadu Prohibition (Second Amendment) Ordinance (IV of
1983) is constitutionally valid, held as follows (at p. 102):
If the Government can frame rules conferring certain rights on the petitioners, it can also repeal these Rules which will have the effect of
withdrawing the benefits conferred on them. The conferment of certain benefits under the Rules repealed cannot form the basis for the petitioners''
contention that the Government which framed the Rules cannot repeal the Rules. It is also well-established that the plea of promissory esloppel is
not available (o a party against a legislative or sovereign function.
A Division Bench of this Court in Jamai M. Company, Represented by Maksood Hasan v. Union of India, 1985 WLR 150 when considering the
question of promissory estoppel has held that a promise is necessary for invoking the doctrine of promissory estoppel and that a promise is an
essential element. As I have already stated that on the facts of this case, there is no promise on the part of the Government and hence the doctrine
of promissory estoppel will not apply. In Express Newspapers Pvt. Ltd. and Others Vs. Union of India (UOI) and Others, , the Supreme Court
has noted the limitation about the principle of promissory estoppel held as follows (at p. 948):
Another limitation is (hat the principle of estoppel does not operate at the level of Government Policy.
I am entirely in agreement with the arguments of the learned Advocate General that the allegations made in the affidavit of the petitioner
association arc very vague and they are not made out to apply the principle of promissory estoppel as enunciated by the Supreme Court in the
decisions cited supra. The action of merely calling for applications for renewal cannot be taken 35 a promise by any stretch of imagination. It is to
be seen that even before the last date of receiving applications by Circular dated 8-2-1989, Chief Minister of Tamil Nadu has made a. statement
on the floor of the Legislative Assembly on 17-2-1989 itself with regard to the new policy. This Court cannot close its eyes and decide a case on
abstract principles. Here is a case where the members of the petitioner association were reminded to file their renewal applications and even before
the last date, a statement was made by the Chief Minister of Tamil Nadu on the floor of the Legislative Assembly with regard to the new policy. In
these circumstances, one would fairly expect that the members of the petitioner association have to understand the effect of the statement made by
the Chief Minister of Tamil Nadu, on the floor of the Assembly and the petitioner association cannot contend that even when the Rules are
modified the members are entitled to the renewal.
A look at the Form F.L. 1 of the licence also shows that it is issued only for the year ending 3lst March, subject to certain conditions. As such,
the members of the petitioner association cannot claim the renewal as a matter of right. It is to be stated, that though as on date the Tamil Nadu
Liquor (Licence and Permit) Rules 1981 are in force, since it has not been repealed by the new Rules, especially Rule 3.1 which provides for
repeal, I am oi the view that the effect of Rule 3(2) of the Tamil Nadu Liquor (Retail Vending) Rules 1989 operates on the licence of the members
of the petitioner association, as it specifically provides for that. As per the ratio laid down by the Supreme Court in Motilal Padampat Sugar Mills
Co. Ltd. Vs. State of Uttar Pradesh and Others, . I am of the view that the principle of promissory estoppel cannot be invoked on the facts of this
case. It is of common knowledge that the exchequer will draw more revenue, by adopting the policy of licensing the retail shops through public
auction, and when the new Rules 1989 provides for the auction of the privilege, I am not able to apply the principle of promissory estoppel,
assuming it can apply to the facts of this case. This Court can take note of the change of the new Rule, 1989 and the change ol new policy by
which the Government is trying to increase the revenue of the State. In my view, the action of the Government is not arbitrary. In my view, the
Government is not bound by any promise, if there is a promise af all on the facts of this case. In my view. as per the ratio laid down in Motilal
Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, . that there be no promissory estoppel against the exercise of legislative
power of the Government, As such, I am not able to accept the contention raised by the learned counsel for petitioner association that the first
respondent herein. State, is bound by the Circular dated 8-2-1989 issued by the second respondent herein, and the applications for renewal have
to be considered. It is interesting to note the observations of the Supreme Court in a case which is reported in D.R. Kohli and Others Vs. Atul
Products Ltd., . which runs as follows (at p. 542):
. . .We do not agree that in this case the principle of promissory estoppel can be pleaded as a bar against the contention of the Department. The
respondent had not done anything prejudicial to its interest relying upon any representation made on behalf of the Department. It is not the case ot
the respondent that it would not have manufactured the dyes but for the advice given by the Department. On the other hand it is obvious that the
respondent had before it the exemption notification which alone could be the basis for its actions. The Department was not also expected to render
legal advice to the respondent on a matter of this nature.
Similarly, it cannot be case of the members of the petitioner association that they would not have applied for renewal but lor the Circular dated 8-
2-1989. especially when they are entitled to apply for renew at under the Tamil Nadu Liquor (Licence and Permit) Rules 1981. In my view, on the
face of Rule 3(2] of Tamil Nadu Liquor (Retail Vending) Rules 1989, to issue a writ as prayed for. will be futile. There are no merits in the writ
petition and accordingly it is dismissed. However, there will be no order as to costs.
Petition dismissed.