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PETITIONER: STATE OF U.P. & OTHERS

       Vs.

RESPONDENT: GARIB DASS & OTHERSSHEO KUMAR ETC. ETC.

DATE OF JUDGMENT:       20/11/1996

BENCH: CJI, S.C. SEN, K.S. PARIPOORNAN

ACT:

HEADNOTE:

JUDGMENT:                      J U D G E M E N T      Ahmadi, CJI.      Special leave  granted in  SLP (civil) Nos.4669-4771 of 1978.      A group  of writ petitions came to be filed in the High Court   of   Judicature   at   Allahabad   questioning   the constitutional validity  of Section  37-A of the U.P. Excise Act,  1910   (hereinafter  called   ’the   act’)   and   the Notifications issued thereunder on March 30 and 31, 1978. By the  said  Notifications,  a  total  prohibition  on  ’Tari’ (Toddy) was  introduced in the State and partial prohibition was introduced  in respect of the country liquor and foreign liquor. The  Constitutional validity  of   Section 37-A  was unsuccessful challenged  in an earlier Writ petition No.2972 of 1972  (Garibdas Vs.  State). Presumably  for that  reason these Writ  petitions were  heard and  disposed of by a Full Bench of  the High  Court and  were allowed by the judgement dated 25.5.1978.  The Full  Bench held the said provision to be ultra  vires Article  14 of  the Constitution and hence a nullity. Consequently, it held that the Notifications issued under  the  said  provision  were  unsustainable.  Both  the Section and  the  Notifications  were,  therefore,  quashed. Feeling aggrieved  by the  said order,  the  State  of  U.P. sought a  certificate under  Article 133 of the Constitution of  India  which  was  granted.  The  appeal  was  filed  on 29.5.1978 along  with an  application for stay. Interim stay against the  implementation of  the  impugned  judgment  was granted. The other special leave petitions followed.      Section 20(1)  of the  Act states  that no  person, not being licensed  to manufacture,  cultivate, collect  or sell any intoxicant, shall have in his possession any quantity of any intoxicant  in excess  of such  quantity  as  the  State Government has,  under Section 6 declared to be the limit of sale  by  retail  except  under  a  permit  granted  by  the Collector in that behalf. Sub-section (2) next provided that sub-section (1)  shall not  extend to  any foreign liquor in the possession of any common carrier or warehouseman as such or which  has been purchased by any person for his bona fide private consumption  and not for sale. Section 37-A was then introduced by  U.P. Excise (Amendment) Act, 1972 with effect

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from 22.1.1972 and read as under:      "37-A.     Prohibition  of  import,      export, transport  or possession of      intoxicants--   (1)    The    State      Government may by notification--      (a) prohibit  the import  or export      of any  intoxicant into of from the      Uttar Pradesh  or any part thereof;      or      (b) prohibit  the transport  of any      intoxicant.      (2)  Without   prejudice   to   the      provisions of Section 20, the State      Government  may,  by  notification,      prohibit  the   possession  by  any      person  or   class  of   person  or      subject to such exceptions, if any,      as  may   be   specified   in   the      notifications, by  all  persons  in      Uttar Pradesh  or in  any specified      area  or   areas  thereof,  of  any      intoxicant  either   absolutely  or      subject to  such conditions  as may      be specified in the notifications."      The rest  of the  provisions are  not necessary  to  be stated.  This  Amending  Act  received  the  assent  of  the President on 19.1.1972 and was published in the U.P. Gazette Extraordinary dated 22.1.1972. Sub-section (3) made it clear that the power of the State Government under sub-section (1) to  prohibit   the  import,   export  or  transport  of  any intoxicant and  its power  under sub-section (2) to prohibit the  possession  of  any  intoxicant  may  be  exercised  in pursuance of  the policy of gradual extension of prohibition in the  State, and  different areas may from time to time be selected in  that behalf  after taking  into account certain factors indicated in that sub-section.      The High Court struck down the validity of Section 37-A on the following line of reasoning:      "On a  harmonious  construction  of      the two provisions, the position is      that Section  37-A operates subject      to  an   exemption  in   favour  of      foreign  liquor   possessed  by  an      individual   for    his    personal      consumption, no  reason is apparent      in the  provisions of  Section 37-A      to make  this invidious distinction      against other kinds of intoxicating      liquors.   The   learned   Advocate      General has  also to  been able  to      suggest  any   rational  basis  for      classifying  intoxicating   liquors      other than the foreign liquors, for      adverse treatment.  Foreign liquors      is as  much an  intoxicating liquor      as country  liquor, or    for  that      matter Tari. From the point of view      of   enforcing    the   policy   of      prohibition  both   stands  on   an      identical footing.  The placing  of      foreign liquor  and country  liquor      in separate  classes is  arbitrary,      fanciful    and    illicit.    This      classification is  not based on any      rational  nexus   with  the  object

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    sought to  be achieved.  The object      of Section  37-A was to execute the      policy  of   prohibition  in   this      State. This  classification defeats      rather than  achieves the  aim  and      objection.  Section   37-A  (2)  is      clearly   violative   of   equality      clause of the Constitution."      The Full Bench then proceeded to add that since Section 20 was  already on  the statute  book when  Section 37-A was added on 2.1.1972, the latter was violative of Article 14 of the Constitution  of India  at its  very inception  and was, therefore, void  ab initio  and  the  subsequent  repeal  of Section 20(2)  by the  U.P. Act  9 of  1978 with effect from 1.5.1972 could  not revive Section 37-A which was stillborn. It further  observed that ’in order to effectuate the scheme of prohibition  Section 37-A  will have  to be re-enacted by the State  Legislature’. On  this line of reasoning both the Section and the Notifications came to be quashed.      After  the   impugned  judgement   was   delivered   on 25.5.1978, the  Act was  further amended  by the U.P. Excise (Second Amendment)  Act,  1978,  U.P.  Act  No.30  of  1978, whereby a  new section  37-A was  submitted for the existing one. The  new Section  which came  to  be  substituted  with retrospective effect  from 1.5.1972  insofar as relevant for our purposes reads as under:      "37-A.   Prohibition   of   import,      export,  transport,  possession  or      consumption  of  intoxicants.---(1)      Subject to  the provisions  in sub-      section (4),  the import  or export      of any  intoxicating into  or  from      Uttar  Pradesh  of  any  intoxicate      shall be prohibited.      (2)    Notwithstanding     anything      contained  in   Section   20,   but      subject to  the provision  of  sub-      section  (4),   the  possession  or      consumption by  any person or class      of  persons   or  subject  to  such      exceptions,  if   any,  as  may  be      specified, by  all persons in Uttar      Pradesh or if any specified area or      areas thereof,  of  any  intoxicate      shall absolutely or subject to such      conditions as  may be specified, be      prohibited."      Sub-section (3)  is materially  the  same;  while  sub- section (4)  which  is  made  subject  to  sub  section  (3) provides that  the areas to which the prohibition on import, export or  transport of any intoxicant under sub-section (2) extends and  the date  on which  the prohibition in any area comes into  force shall be such as the State Government may, from time to time, specify by notifications. Sub-section (3) permits the State Government to select different areas after taking  into   account  any  one  or  more  of  the  factors enumerated  therein  which,  inter  alia,  can  be  (a)  the character of  an area, (b) the general economic condition of the local population, including their level of nutrition and standard of living, (c) the local public opinion, or (d) any other relevant  factor which  in the  opinion of  the  State Government   is material in the public interest. Sub-section (2) of  Section 20 was deleted by U.P. Act No.9 of 1978 with effect from  1.5.1972. The  newly introduced Section 37-A is different in  many respects  from the  earlier one.  In  the

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first place  sub-section (2) of Section 37-A now begins with the words ’notwithstanding anything contained in Section 20’ as against  the earlier  on  which  opened  with  the  words ’without prejudice to the provisions of section 20’ and went on to provide that’ the State Government may by Notification prohibit the  possession by  any person  or class of persons ...of any intoxicant ....’. The new Section 37-A begins with a non obstante clause ’notwithstanding anything contained in Section 20  but subject  to sub-section (4)’. This amendment was introduced  specifically to  correct the  situation that arose on account of impugned judgement. The Prefatory Note - statement of  objects and  reasons  -  makes this abundantly clear. We may extract the Prefatory Note at this stage:      "Prefatory   Note-   statement   of      Objects  and   Reasons.--  (1)  For      giving  effect   to  the  directive      principle of State policy contained      in Article  47 of the Constitution,      the   State   Government   enforced      prohibition  in   seven   districts      (Kanpur,   Lucknow,   Unnao,   Bara      Banki, Dehra  Dun,  Naini  Tal  and      Almora)  by   notifications,  dated      March 30,  1978 and March 31, 1978,      issued under  Section 37-A  of  the      U.P. Excise  Act, 1910.  Apart from      these  districts,  prohibition  had      already been  enforced in five hill      districts, (Chamoli,  Uttar  Kashi,      Pithoragarh,  Pauri   Garhwal   and      Tehri-Garhwal),  by   notifications      dated March  31, 1972  and July 22,      1972.   Section    37-A   and   the      notification dated March 30 and 31,      1978, aforesaid were declared ultra      vires  of   Article   14   of   the      Constitution by a Full Bench of the      High Court  on May  25, 1978 in the      case reported  in 1978  All LJ  581      (Sheo Kumar  V. State  of U.P.  and      Others). The  State  has  preferred      appeal  to   the  Supreme     Court      against the  decision of  the  high      Court   and the  operation  of  the      decision of the High Court has been      stayed, Yet  with a  view to remove      doubts it  was decided to amend the      U.P. Excise Act, 1910.      (2) Since the State Legislature was      not   in   session   and   it   was      considered necessary  to carry  out      the       required       amendments      immediately,   the   Governor   was      pleased  to  promulgate  the  Uttar      Pradesh  Excise  (Third  Amendment)      Ordinance, 1978,  on June  26, 1978      which  is  to  be  replaced  by  an      enactment.      (3)  The   Uttar   Pradesh   Excise      (Second Amendment)  Act,  1978,  is      being introduced accordingly."      Thus, the  old Section  37-A now stands replaced and is no more in existence. The new Section 37-A introduced by Act 30 of  1978 is  deemed to  have come  into force with effect from 1.5.1972 i.e., the date from which the old Section 37-A

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was brought  on the state book. Similarly sub-section (2) of Section 20  which was omitted by U.P. Act 9 of 1978 has also been stated  to have  been omitted with effect from 1.5.1972 with the  proviso that  no act done or omission taking place during the  period commencing  on 1.5.1972  and ending  with 25.6.1978 which  would  not  be  an  offence  but  for  such substitution shall  constitute an  offence punishable  under the principal  Act. Clause  5 of  the Amending  Act provides that notwithstanding  any judgement,  decree or order of any court to  the contrary  anything done  or purporting to have been done  and any  action taken  or purporting to have been taken under  the provisions  of the principal Act before the commencement of  this Section  shall be  valid and be deemed always to  have been  valid as  if  the  provisions  of  the principal Act  as amended  by this  Act were in force at all material times. It may incidentally be mentioned that before this Amending  Act 30  of  1978  became  law  there  was  in existence the  U.P. Excise (Third Amendment) Ordinance, 1978 (Ordinance No.11  of 1978)  which  stood  repealed  by  this amending Act but notwithstanding the repeal anything done or any action  taken under  the provisions of the principal Act as amended  by the  said Ordinance  shall be  deemed to have been done or taken under the corresponding provisions of the principal Act  as amended  by the  Amending Act  as  if  the latter were  enforced at  all material  times. The effect of these amendments  clearly is  to overcome  the  consequences flowing from the impugned judgement of the Full Bench of the High  Court.   The  underlying  idea  is  to  sub-serve  the objective of Article 47 of the Constitution of India.      The question  then is  what  is  the  effect  of  these legislative changes  on the  impugned decision  of the  Full Bench of the High Court. In the first place, it is necessary to remember  that  the  validity  of  the  newly  introduced Section 37-A  is not  in challenge before us. Secondly, sub- section 20  of the  Act was  omitted by Act No.9 of 1978 and again by  Act No.30  of 1978  with retrospective effect from 1.5.1972. These legislative changes would undoubtedly make a profound impact on the impugned decision more so because the entire structure  of  Section  37-A  has  also  undergone  a change. The  discriminatory part  of Section  20(2) has been effaced from  the statute  book with  effect  from  1.5.1972 itself,  thereby   removing  that   which  the   High  Court considered   violative of  Article 14  of the  Constitution. Therefore, even if the line of reasoning adopted by the High Court as  extracted hereinbefore was correct (of course this is contested  by the appellants), the foundation on which it was based  having disappeared with retrospective effect, the basis for the decision is non est and therefore, contend the appellants, the  impugned judgement  cannot  be  allowed  to stand. We see considerable force in this line of reasoning.      The  deletion   of  Section   20(2)  of  the  Act  with retrospective effect from 1.5.1972 and the substitution of a new  Section   37-A  by   Act  No.30   of  1978   also  with retrospective effect from 1.5.1972 has virtually altered the law on  the subject  and has  removed the  part which in the opinion of the High Court was discriminatory. As pointed out earlier, in  the opinion of the High Court even the omission of Section 20(2) would not make any difference since Section 37-A was stillborn, a proposition which in the submission of the appellant  State was  extremely doubtful. Ex Facie there is a  good deal  of force  in this  submission but it is not necessary for us to examine the same because as suggested by the High  Court, Section 37-A has been re-enacted, albeit in a modified form which seeks to remove the nexus with Section 20 altogether.  Thus, the  very foundation on which the High

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Court decision  is based  having disappeared the decision is rendered ineffective  in view  of  the  legislative  changes introduced   with    retrospective   effect.   Since   these legislative changes are not challenged  as unconstitutional, they must  operate as  if they  were on  the statute book in their present form from 1.5.1972 and must be so implemented.      In the  result, these  appeals are allowed, in that, it is declared  that in  view  of  the  subsequent  legislative changes made  in Section  20(2) and  Section 37-A of the Act with  retrospective   effect  from   1.5.1972  the  impugned judgement has  been rendered incapable of implementation and therefore the interim stay against its operation granted and confirmed by  this court is made absolute. These appeals are disposed of accordingly with no order as to costs.