M/S CEE CEE AND CEE CEES Vs K. DEVAMANI
Bench: HON'BLE MS. JUSTICE INDU MALHOTRA, HON'BLE MR. JUSTICE AJAY RASTOGI
Judgment by: HON'BLE MS. JUSTICE INDU MALHOTRA
Case number: C.A. No.-009494-009495 / 2019
Diary number: 13882 / 2019
Advocates: ANKUR MITTAL Vs
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.94949495 OF 2019 (Arising out of SLP (Civil) No. 10744 – 10745 of 2019)
M/S CEE CEE & CEE CEE’S …APPELLANT
K. DEVAMANI & ORS. …RESPONDENTS
J U D G M E N T
INDU MALHOTRA, J.
1. The Appellant is an F.L. 1 License holder issued on
26.10.2016 by the Deputy Commissioner, Excise, Mahe
under the Puducherry Excise Act, 1970 (“Excise Act”).
Under the F.L. 1 License, the Appellant is permitted to
sell Indian Made Foreign Liquor (“IMFL”) to other License
holders, and not in retail.
2. On 28.02.2017, the Appellant filed an Application before
the Deputy Commissioner (Excise), Mahe for shifting his
licensed Liquor Shop from Mahe to Karaikal under Rules
163 and 209 of the Puducherry Excise Rules, 1970
3. The Deputy Commissioner (Excise), Mahe forwarded the
Application to Respondent No. 3 – the Deputy
Commissioner (Excise), Karikal vide letter dated
07.03.2017, and requested Respondent No. 3 to conduct
an inspection to assess the suitability of the site at
4. Respondent No. 1, a resident of Karaikal, submitted an
objection dated 02.06.2017 before the Sub – Collector
(Excise), Collectorate, Karaikal to oppose the shifting of the
liquor shop to Karaikal. Respondent No. 1 inter alia
submitted that pursuant to the Judgement dated
15.12.2016 passed in State of Tamil Nadu v. Balu1, various
liquor shops had been shifted from other regions to the
residential areas in Karaikal. The Court had directed that
no shop for the sale of liquor could be situated within a
1 (2017) 2 SCC 281 : AIR 2017 SC 262 : 2017 (1) SCJ 586.
distance of 500 meters of the outer edge of the National or
State Highways or of a service lane along the Highway.
It was submitted that shifting of the shop was contrary
to public interest of the residents of Karaikal. For about 35
houses in Nedunkadu circle, Karaikal, there were 35 liquor
shops already operational.
It was further submitted that the Madras High Court
vide Order dated 07.03.2003 in K. Murali v. Commissioner
(Excise)cumSecretary in W.P. (Civil) No. 39661/2002 had
interpreted the expression ‘from one place to another’ in
Rules 163 and 209 of the Excise Rules to mean that
shifting was permissible only within a particular local area,
panchayat or commune, and not from one region to
another in the Union Territory.
In view of the restrictive meaning of the word ‘place’,
the Licensing Authority could not grant permission to shift
the licensed shop of the Appellant from one region to
another i.e. from Mahe to Karaikal, which is at a distance
of 650 kilometers.
The shifting of liquor shops from one region to another
would be in contravention of Rules 163 and 209 of the
5. Respondent No. 1 and one K. M. Baskar filed W.P. (Civil)
Nos. 13081/2017 and 15953/2017 before the Madras High
Court for the issuance of a writ of mandamus restraining
Respondent No. 2 and 4 Excise Authorities from shifting
liquor shops from Mahe to Karaikal.
The Madras High Court vide Order dated 26.02.2018
directed the Excise Authorities to consider the objections
raised by Respondent No. 1 along with the Application for
shifting filed by the Appellant in accordance with law.
6. Respondent No. 3 Deputy Commissioner (Excise),
Karaikal granted a personal hearing to Respondent No. 1
7. Respondent No. 3 Deputy Commissioner (Excise),
Karaikal vide Order dated 27.03.2018 rejected the
objections raised by Respondent No. 1, on the ground that
the Order dated 07.03.2003 passed by a single judge of the
Madras High Court in K. Murali (supra) was set aside by a
division bench vide Order dated 06.09.2005.
8. Respondent No. 1 filed a 2nd W. P. (C) No. 11767/2018
before the Madras High Court to quash the Order dated
27.03.2018, and restrain Respondents No. 2 to 4 Excise
Authorities from permitting the relocation of liquor shops
from Mahe to Karaikal, and granting liquor licenses in
9. Respondent No. 2 – Deputy Commissioner (Excise),
Puducherry vide Order No. 2239/DCE/S2/FL1/2017 –
2018/251 dated 07.06.2018 granted permission to the
Appellant to shift the liquor shop from Mahe to Karaikal,
subject to the fulfillment of the conditions contained in
Rule 209 of the Excise Rules.
10. The Deputy Commissioner (Excise), Mahe vide Order dated
13.06.2018 conveyed the permission granted by
Respondent No. 2 – Deputy Commissioner (Excise),
Puducherry to the Appellant. The approval was made
subject to the following two additional conditions: (i) there will be one entrance and exit only; and (ii) the boundary of the proposed site should be
11. Respondent No. 3 – the Deputy Commissioner, Excise,
Karaikal vide Order dated 15.06.2018 granted permission
to the Appellant to commence his business of wholesale
vending of IMFL at Karaikal.
12. Respondent No. 1 filed a 3rd W. P. (Civil) 15661/2018
before the Madras High Court to quash the Order dated
15.06.2018, and restrain Respondent Nos. 2 to 4 Excise
Authorities from shifting liquor shops from Mahe to
Karaikal, on the grounds similar to those raised in the 2nd
W.P. (Civil) No. 11767/2018.
The High Court vide Order dated 05.07.2018 granted
interim stay of the Order dated 15.06.2018 passed by
Respondent No. 3.
13. The Excise Authorities supported the case of the Appellant
– License holder in W.P (Civil) Nos. 11767/2018 and
14. A division bench of the Madras High Court vide Impugned
Judgement and Order dated 14.02.2019 allowed W.P.
(Civil) Nos. 11767/2018 and 15661/2018, and quashed
the Orders dated 27.03.2018 and 15.06.2018 passed by
Respondent No. 3. The permission granted by Respondent
No. 2 to 4 to shift the Licensed Shop of the Appellant from
Mahe to Karaikal was set aside.
The division bench held that the disposal of the
representation by Respondent No. 3 – Deputy
Commissioner (Excise) Karaikal was not in accordance with
the Order dated 26.02.2018 passed in W.P. (Civil) Nos.
13081/2017 and 15953/2017.
The word / phrase / term “place” in the Excise Act and
Excise Rules had a restrictive meaning. The area defined
by Section 2 (22) of the Excise Act was restricted to the
“area” in which the liquor shop was located. The order
which permitted shifting of the wholesale liquor shop of the
Appellant from Mahe to Karaikal had to be confined to the
region of Mahe, and not to Karaikal, which is an entirely
different region in the Union Territory of Puducherry.
15. Aggrieved by the Order dated 14.02.2018, the Appellant –
Licensed holder has filed the present Special Leave
Petition. We have heard Mr. Mahesh Jethmalani, Senior
Counsel for the Appellant, Mr. R. Venkataramani, Senior
Counsel for the Union Territory and office bearers, and Mr.
S. Thananjayan, Counsel for Respondent No. 1.
16. The issue which arises for our consideration is whether the
permission granted by Respondent Nos. 2 to 4 Excise
Authorities to transfer the licensed shop from one region to
another in the Union Territory of Puducherry was
permissible under the Excise Act and Rules.
17. RELEVANT STATUTORY PROVISIONS
The Puducherry Excise Act, 1970 provides a uniform law
relating to the production, manufacture, possession,
import, export, transport, purchase and sale of liquor, and
intoxicating drugs in the Union Territory of Puducherry.
17.1. Section 1(2) extends the applicability of the Excise Act to
the whole of the Union Territory of Puducherry.
17.2. The word ‘place’ is defined in Section 2 (22) as follows: “2. – Definitions … (22) “place” includes a house, building, shop, booth, tent, vessel, raft, and vehicle.”
The word ‘place’ does not indicate the territorial
limits within which the Licensing Authority could grant
shifting of a licensed shop. Section 2(22) describes the
type of structure or establishment of the licensed shop,
which could either be a house, building, shop, booth,
tent, vessel, raft, or vehicle in which the licensed
premises is situated.
17.3. Section 14 of the Excise Act provides that no liquor or
intoxicating drug will be sold without a license issued by
the Licensing Authority i.e. the Deputy Commissioner or
17.4. Section 70 of the Excise Act empowers the Government
to frame rules for carrying out the functions of the Act.
The Government has enacted the Puducherry Excise
Rules, 1970 in exercise of the powers under Section 70.
Rule 1(2) extends the applicability of the Excise Rules
to the whole of the Union Territory of Pondicherry.
i) Rule 22A (a) of the Excise Rules defines ‘region’ as any of
the 4 regions of the Union Territory viz, Pondicherry,
Karaikal, Mahe and Yanam.
“CHAPTERIIA Control of interState Transport of Liquor 22. A. Definitions — In this Chapter, unless there is anything repugnant in the subject or context— (a) “Region” means any of the regions known as Pondicherry, Karaikal, Mahe and Yanam in the Union territory of Pondicherry.”
ii) Rule 113 of the Excise Rules provides for the grant of an
F.L. 1 license for wholesale vending of liquor. “CHAPTER – VI Sale of Indian or Foreign liquors 113. Licences. — Licences for the sale of Indian liquor or foreign liquor or both shall be of the following descriptions, and shall be granted by the Excise Commissioner or Deputy Commissioner, as the case may be, in accordance with the provisions of subsection (2) of section 14 of the Act, namely:— (1) F.L. 1 Licence:— The holder of this licence shall be permitted to sell foreign liquor or Indian liquor, or both, in quantities of not less than 9 litres in sealed or capsuled bottles 2[***] at any one time and in any single transaction to any other licensee under this chapter and also in sealed or capsuled bottles in quantities not exceeding 3 [4.5 litres of all liquors other than beer and 9 litres of beer] at any one time and in any single transaction to an unlicensed person. But he shall not allow the consumption of the liquor at the licensed premises: Provided that such licensees may issue another licensed dealer samples of liquors, in quantities not exceeding 0.180 litres.”
iii) The procedure for transfer of a licensed liquor shop is
provided under Rule 209 of the Excise Rules. “CHAPTER—XIII Excise Licences (General Conditions) 209. Shifting of shops: — The licensee shall not shift the licensed premises from one place to another without the prior approval of the Licensing Authority.
Provided that the licensing authority may permit, subject to the fulfilment of conditions of licence, shifting of licensed premises on payment of onefourth of the license fee for such shifting”
iv) The term ‘shop’ is defined by Rule 189 of the Excise
Rules, as follows: “CHAPTER—XIII Excise Licences (General Conditions) …
189. Definition — In this chapter, “shop” means the licensed premises where liquor is sold.”
18. DISCUSSION & ANALYSIS
18.1. Rule 113 under Chapter VI of the Rules pertains to the
sale of Indian or foreign liquors. It provides that the
Excise Commissioner or Deputy Commissioner may
issue an F.L. – 1 License for the sale of Indian liquor or
foreign liquor, or both, in accordance with the
provisions of Section 14 (2) of the Excise Act.
18.2. Chapter XIII of the Excise Rules contains the General
Conditions of Excise Licenses. Rule 188 states that
Chapter XIII will apply to all Licenses issued under the
Excise Act for sale of liquors, and every license is
deemed to include the conditions prescribed herein.
Rule 189 of the Excise Rules describes “shop” as the
licensed premises from where liquor is sold.
Rule 191 (2) provides that the applicant of a license
shall select a site, and intimate the licensing authority,
who may, after making such enquiry as he thinks fit,
approve the site selected.
Rule 191 (4) provides that the Licensee shall sell the
liquor only from the approved shop.
19. The Appellant is the holder of an F.L. – 1 License issued by
the Licensing Authority viz. the Deputy Commissioner,
Excise, Mahe for carrying out vending of IMFL.
An F.L.1 Licensee is permitted to sell liquor only to
other Licensees, and not in retail.
19.1. The Petitioner was carrying out his wholesale business
from MMC, No. 1/40,41 Main Road, Mahe.
19.2. The Appellant filed an Application dated 28.02.2017 for
shifting his liquor shop from Mahe to Karaikal under
Rules 163 and 209 of the Excise Rules before the
Deputy Commissioner, (Excise), Mahe.
19.3. Rule 209 in Chapter XIII of the Excise Rules provides
for Shifting of Shops of all license holders, whether
wholesale or retail.
Rule 209 permits shifting of the liquor shop from one
“place” to another, subject to approval by the Licensing
Authority on the terms and conditions contained
The proviso to Rule 209 states that the Licensing
Authority may permit shifting of the licensed premises,
subject to the fulfillment of the conditions of license,
and payment of 1/4th of the license fee for such
There is no restriction or prohibition either in the
Excise Act or Rules on the Licensing Authority from
granting permission to shift the licensed shop from one
region to another, subject to the conditions being
A fortiori, a licensee can shift a liquor shop from
one region to another within the Union Territory of
Puducherry, subject to the prior approval of the
20. We are of the view that the expression ‘from one place to
another’ is not restrictive, and does not curtail the power of
the Licensing Authority to grant permission for shifting the
licensed shop from one region to another in the Union
Territory of Puducherry so long as the conditions stipulated
by the Excise Act and Excise Rules, as also the conditions
for grant of a license are complied with. The shifting should
not result in the increase in number of liquor shops beyond
the maximum number of licenses which may be fixed for a
particular area under Rule 122 of the Excise Rules.
21. Given the peculiar demography of the Union Territory of
Puducherry, which comprises of four unconnected regions,
it would be contrary to the object and purpose of the
Excise Act, if a restrictive meaning was to be given to Rule
209 of the Excise Rules. The Act must be read as a whole
to ascertain the intent of the legislature.
If the intention of the legislature was to restrict the
shifting of a liquor shop to a region, locality, municipality,
or commune, Rule 209 of the Excise Act would have
expressly contained such a prohibition, which is absent.
22. The Excise Act and the Excise Rules use the expression
‘local area’ in contradistinction with the word ‘place’,
whenever it is intended to confine the area in which the
liquor shop is located. For instance, Section 9 of the Excise
Act prohibits the transportation of intoxicants from one
‘local area’ to another. Similarly, Section 10 of the Excise
Act restricts the movement of intoxicants beyond a certain
quantity which is stipulated for a ‘local area’.
23. We find from the Counter Affidavit filed by the State that
similar proposals for shifting 5 shops to Karaikal from
other regions were granted by the Licensing Authority, as
per details given hereinbelow :
Sr.No. Name & License No.
Date of Shifting and Order
Place of shifting From To
1. M/s Vijayalakshmi Wines L.No. 8/FL1
13.07.1995 vide Order No. 13142/93 94/C2/DC(E)
2. M/s Vinoth Liquors L. No. 10/ FL 1
21.01.2009 vide Memorandum No. 10526/DC(E)/C208 – 09
3. M/s Ding Dong Liquors L. No. 11/ FL 1
29.11.2013 vide Order No. 6146/DC(E)/C2/1314
4. M/s Apollo Wines L. No. 12/FL1
11.07.2014 vide Order No. 418/DC(E)/2014
5. M/s. Fancy Traders L. No. 13/ FL 1
13.01.2016 vide Order No. 5176/DC(E)/C2/215 16
24. The Counsel for the State submitted that Respondent Nos.
2 to 4 – Excise Authorities have assessed the pros and cons
of the shifting, and sought the view of the police authorities
prior to granting permission to the Appellant. The Report of
the Excise Officer was obtained, which stated that the site
of the Appellant at Karaikal is not located on the National
or State Highway. There are no religious or educational
institutions which are located within the 100 meters radius
of the site at Karaikal. There would be no hindrance to the
traffic in the area. The Superintendent of Police confirmed
that there would be no law and order problem if the
licensed shop of the Appellant is shifted.
25. In the present case, the Licensing Authority i.e. the Deputy
Commissioner (Excise) vide Letter dated 07.06.2018 has
granted permission to shift the F.L.1 Licensed premises of
the Appellant from Mahe to Karaikal, subject to compliance
with the conditions laid down in Rule 209 of the Excise
Rules. The Deputy Commissioner (Excise), Mahe permitted
shifting of the premises subject to two additional
(i) There shall be one and the same entrance and exit
(ii) The boundary of the building should be properly
We have been informed by the Counsel for the
Appellant and the State that all conditions under the
Excise Act and Rules have complied with.
26. Consequently, Respondent No. 3 the Deputy
Commissioner (Excise), Karaikal vide letter dated
15.06.2018 granted permission to the Appellant to run the
F.L.1 business from the location designated in Karaikal.
27. We find no prohibition in the Excise Act or Rules for
shifting the F.L.1 Licensed premises from one place to
another. The permission dated 07.06.2018 for shifting the
licensed shop from Mahe to Karaikal granted by
Respondent No. 3 is legal and valid.
28. We allow the Civil Appeals and set aside the Order dated
14.02.2019 passed by the division bench of the Madras
High Court in W.P. (Civil) Nos. 11767/2018 and
29. Ordered accordingly.
Pending applications, if any, are accordingly disposed.
…..……...........................J. (UDAY UMESH LALIT)
..….……..........................J. (INDU MALHOTRA)
New Delhi December 18, 2019.