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PETITIONER: M.S.  JAYARAJ

       Vs.

RESPONDENT: COMMISSIONER OF EXCISE, KERALA AND OTHERS

DATE OF JUDGMENT:       28/09/2000

BENCH: K.T. Thomas  &  R.P. Sethi

JUDGMENT:

THOMAS, J. L...I...T.......T.......T.......T.......T.......T.......T..J

   Leave granted.

   A bidder in auction for the privilege of vending foreign liquor  within  a circumscribed range was permitted  by  the Excise  Commissioner  to have his domain shifted to  another range.   On  hearing the said news a hotelier who  is  doing business  in the latter range was distressed and she quickly approached  the High Court for thwarting the said move.   At the  first round the hotelier failed to checkmate the bidder as  a  single judge of the High Court declined to grant  the relief  prayed  for by her.  However, she succeeded  on  the second  round,  when a Division Bench of the High Court,  on the  appeal  filed by her, quashed the order of  the  Excise Commissioner.   This  appeal  by  special leave  is  by  the aforesaid  bidder  for restoration of the benefit  which  he secured from the Excise Commissioner.

   In the State of Kerala, the right to sell foreign liquor is  restricted  by statutory provisions.  The Government  of Kerala  has formulated rules for it under the Kerala  Abkari Act  and one set of such rules is called the Kerala  Abkari Shops (Disposal in Auction) Rules, 1974 (for convenience it would  be  referred  to  as   the  Auction  Rules).    The Government has the authority, under the said rules to notify in  the Gazette the limits of each area (range) wherein  the shop  or  shops  could be located for vending  such  foreign liquor.   Officers  are  authorised  by  the  Government  to auction the right to vend foreign liquor from each such shop and  for such period as may be fixed.  Person who offers the highest  bid would normally be preferred for conferring  the privilege to vend foreign liquor and licence would be issued to  him  for  that purpose.  Among the  different  types  of licence  only two are relevant for the purpose of this case. One  is  called Licence for the privilege of possession  of Indian  made  Foreign  Liquor for sale to public  in  sealed bottles   without  the  privilege  of  consumption  on   the premises.  As the said licence is to be issued in Form FL-1 it  can be termed as such hereinafter.  The other is  called Hotel  (Restaurant) Licence and it is to be issued in Form FL-3.  (It can be referred to as such hereinafter).

   FL-3  licence consists of the privilege to sell  foreign liquor  for consumption within a room specifically  approved

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for  the  purpose  to  residents in the  hotel  or  boarding houses,  including  their guests.  FL-1 licence is  for  the privilege  of  selling  foreign  liquor  in  sealed  bottles containing a quantity above 180 ml.

   For  the facts in this case the following events are  to be  narrated:   On 13.3.2000 appellant participated  in  the auction  held  in respect of a shop to be located  within  a range  called Changanassery Excise Range consisting of the areas   falling   within  the    limits   of   Changanassery Municipality.   Appellant  was  the highest  bidder  and  he quoted  above  Rs.63  lakhs.  On his being  chosen  for  the licence  appellant  remitted a portion of the bid amount  on the same day.

   He  failed  to find out a suitable place to  locate  the shop  within  the boundaries of Changanassery Excise  Range. Hence  he  applied to the first respondent (Commissioner  of Excise,  Kerala)  for permission to locate the shop  outside the  said  range.   On  the same  day  the  application  was forwarded  by  the  second   respondent  (Assistant   Excise Commissioner  of  the district) with a recommendatory  note. The  Excise Commissioner granted permission to the appellant on  12.4.2000 for shifting the shop to another range  called Karukachal  which  comprises  of the  areas  falling  within Karukachal  Panchayat.   (That range is situate next to  the Changanassery  range.) The third respondent, who is  running the  hotel and restaurant at Karukachal and who obtained FL- 3  licence  to supply foreign liquor in peg measurements  to patrons visiting the hotel, filed a writ petition before the High  Court  under  Article  226  of  the  Constitution  for quashing  the  aforesaid  permission granted  by  the  first respondent.   Third  respondent  contended mainly  that  the Excise  Commissioner had no authority to pass such an order. In  defence  of  the  permission   so  granted  the   Excise Commissioner  and the second respondent relied on Rule  6(2) of the Auction Rules.

   Learned single judge of the High Court, while dismissing the  writ petition, held that Rule 6(2) of the Auction Rules contains  such  powers for the Excise Commissioner to  pass. He  also  held that the order granting permission to  locate the  shop outside the limit of the originally shown range is not proved to have been vitiated by any mala fides.

   Third  respondent  filed an appeal before  the  Division Bench  of  the  High Court and learned Judges of  the  Bench reversed  the order passed by the single judge holding  that the  Commissioner  of  Excise has no power  or  jurisdiction under Rule 6(2) to transfer an Abkari or foreign liquor shop outside  the limits notified in the Gazette under Rule 4  of the  Auction  rules.  The Division Bench did  not  seriously take the objection raised by the present appellant that writ petitioner had no locus standi to challenge the order of the Excise  Commissioner.  However, learned Judges observed that the  writ  petitioner is a licensee having FL-3 licence  and was  running a hotel-cum- restaurant in Karukachal Panchayat and  hence  the order permitting the appellant to shift  the shop  to  Karukachal  Panchayat  would  affect  her  rights. Resultantly  the  Division  Bench quashed the order  on  the Excise Commissioner though learned Judges granted two weeks time  to  dispose  of the stock of liquor  acquired  by  the appellant for the purpose of selling the same in exercise of the licence granted to him.

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   Shri  P.   Krishnamurthy,  learned senior  counsel,  who argued for the appellant, adopted a two-pronged onslaught on the judgment of the Division Bench of the High Court.  First is  that  the High Court ought not to have  entertained  the writ  petition  filed  by the third respondent as she  is  a rival businesswoman who cannot have locus standi to file the petition.  Second is that the Division Bench failed to trace the  power  of the Excise Commissioner which power has  been conferred  on  him by the first proviso to Rule 6(2) of  the Auction  Rules.   Shri  C.S.  Vaidyanathan,  learned  senior counsel  who argued for the third respondent, contended that the locus standi of the third respondent for moving the High Court  is no concern now as the learned single judge of  the High  Court  had already entertained the writ  petition  and decided  it on merits only.  Alternatively, learned  counsel contended that the third respondent is not, in fact, a rival businesswoman and she need be regarded only as a resident of Karukachal  Panchayat  who is entitled to assail  any  order passed  by  a  statutory  authority  in  violation  of  law. Without prejudice to such contention learned counsel made an endeavour  to  support  the  interpretation  placed  by  the Division Bench of the High Court on Rule 6(2) of the Auction Rules.

   Shri P.  Krishnamurthy, learned senior counsel relied on the  decisions of this Court in the Nagar Rice & Flour Mills and  ors.   vs.   N.   Teekappa  Gowda  &  Bros.   and  ors. {1970(1) SCC 575};  Jasbhai Motibhai Desai vs.  Roshan Kumar Haji  Bashir Ahmed & ors.  {1976(1) SCC 671};  Thammanna vs. K.   Veera Reddy and ors.{1980 (4) SCC 60};  Dr.   Duryodhan Sahu  and  ors.  vs.  Jitendra Kumar and ors.  {1998(7)  SCC 273}  in  order to bolster up his contention that the  third respondent  had no locus standi to maintain a petition under Article  226 of the Constitution in respect of the  impugned order passed by the Excise Commissioner.

   It  is not discernible from the Judgment of the  learned Single Judge whether appellant had raised the issue of locus standi  before  him.  But appellant did raise it before  the Division  Bench.   In  this appeal also  he  endeavoured  to contend  that  the  right  of the third  respondent  is  not affected  by the order passed by the Excise Commissioner  as the  licence  granted to her is only for selling  liquor  in small  quantity and that too only to those persons who visit the  hotel  and  restaurant, whereas the  appellant  is  not permitted  to  sell it like that.  We too feel that  if  the business  of  the  third respondent is to be carried  on  in accordance  with  the rules such business cannot affect  the business  of  the  appellant.  In that view  of  the  matter appellant  would  not be a rival trader or a rival  business contender for the third respondent.  Perhaps bearing in mind this aspect the third respondent maintained the stand in the counter  affidavit  filed in this Court that  her  objection against the order of the Excise Commissioner is as a citizen of  Karukachal  Panchayat and she is entitled to raise  such objection.

   In  this context we noticed that this court has  changed from  the  earlier  strict  interpretation  regarding  locus standi  as adopted in Nagar Rice & Flour Mills and ors.  vs. N.   Teekappa  Gowda & Bros.  and ors.{1970(1) SCC 575}  and Jasbhai Motibhai Desai vs.  Roshan Kumar Haji Bashir Ahmed & ors.{1976(1)  SCC  671}  and a much wider convass  has  been adopted  in later years regarding a persons entitlement  to move  the  High Court involving writ jurisdiction.   A  four

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Judge  Bench  in Jasbhai Motibhai Desai (supra) pointed  out three categories of persons vis-Ã -vis the locus standi:         (1) a  person  aggrieved;  (2) a stranger;  (3) a busybody or  a meddlesome  interloper.   Learned  Judges in  that  decision pointed  out that any one belonging to the third category is easily  distinguishable and such person interferes in things which  do not concern him as he masquerades to be a crusader of  justice.  The Judgment has cautioned that the High Court should  do well to reject the petitions of such busybody  at the  threshold  itself.  Then their Lordships  observed  the following:   The  distinction between the first and  second categories  of  applicants, though real, is not always  well demarcated.   The  first  category  has   as  it  were,  two concentric  zones;  a solid central zone of certainty, and a grey  outer  circle  of  lessening certainty  in  a  sliding centrifugal  scale,  with  an outermost nebulous  fringe  of uncertainty.  Applicants falling within the central zone are those   whose  legal  rights   have  been  infringed.   Such applicants  undoubtedly  stand in the category  of  persons aggrieved.   In  the  grey outer circle  the  bounds  which separate  the  first  category from  the  second,  intermix, interfuse   and  overlap  increasingly   in  a   centrifugal direction.   All  persons  in  this outer zone  may  not  be persons aggrieved.

   A recent decision delivered by a two Judge Bench of this Court  (of  which  one  of us is a party    Sethi,  J.)  in Chairman  Railway  Board & ors.  vs.  Chandrima Das  &  ors. {2000  (2)  SCC  465}  after making a survey  of  the  later decisions  held  thus:  In the context of  public  interest litigation, however, the Court in its various judgments has

   given the widest amplitude and meaning to the concept of locus  standi.   In Peoples Union for Democratic Rights  v. Union  of  India  {1982 (3) SCC 235} it was laid  down  that public  interest  litigation could be initiated not only  by filing  formal  petitions  in  the High Court  but  even  by sending  letters and telegrams so as to provide easy  access to court.  [See also Bandhua Mukti Morcha v.  Union of India {1984  (3)  SCC  161} and State of H.P.  v.  A Parent  of  a Student  of Medical College {1985 (3) SCC 169} on the  right to  approach  the  court  in the realm  of  public  interest litigation.]  In Bangalore Medical Trust v.  B.S.   Muddappa {1991(4)  SCC 54} the Court held that the restricted meaning of  aggrieved  person and the narrow outlook of  a  specific injury   has  yielded  in  favour  of  a  broad   and   wide construction in the wake of public interest litigation.  The Court  further observed that public spirited citizens having faith  in  the  rule of law are rendering great  social  and legal  service  by espousing causes of public nature.   They cannot   be  ignored  or  overlooked   on  a  technical   or conservative  yardstick  of the rule of locus standi of  the absence of personal loss or injury.  There has, thus, been a spectacular  expansion of the concept of locus standi.   The concept  is much wider and it takes in its stride anyone who is not a mere busybody.

   In the light of the expanded concept of the locus standi and also in view of the finding of the Division Bench of the High  Court  that the order of the Excise  Commissioner  was passed in violation of law, we do not wish to nip the motion out  solely  on the ground of locus standi.  If  the  Excise Commissioner  has no authority to permit a liquor shop owner to  move  out of the range (for which auction was held)  and have  his business in another range it would be improper  to

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allow  such  an order to remain alive and operative  on  the sole  ground that the person who filed the writ petition has strictly  no  locus standi.  So we proceed to  consider  the contentions on merits.

   Chapter  1  to  4 of the Auction Rules  contain  various regulations  regarding fixation of the limit of each  range, how  to  conduct the auction for each or lot of  shops  etc. Chapter  5  of the Auction Rules contains two rules (Rule  6 and  Rule 6A) under the title General Conditions applicable to  licensees  of toddy, arrack or foreign liquor 1  shops. Though Rule 6 consists of 39 sub-rules we are concerned only with  the first three of them.  Hence those three sub- rules are  extracted  herein:   6(1) No licensees of  any  toddy, foreign  liquor  shop shall be permitted to sell or  possess toddy  or  foreign  liquor or cocobrandy outside  the  local limits  specified  in his licence.  (2) No toddy or  foreign liquor  shop notified in the Gazette under Rule 4, shall  be located  outside the notified limits, but with the  previous sanction  of  the  Assistant Excise Commissioner it  may  be removed  from  one  place  to another  within  such  limits. However,  no  such  shop shall be located in or  removed  to place  within an area declared as a project area.  No  toddy shop  shall  be  located within 400 meters  and  no  Foreign Liquor  1  shop shall be located within 200 meters  from  an educational  Institution,  Temple,  Church,  Mosque,  Burial ground, Harijan Colonies or Tribal Colonies:

   Provided  the  Excise  Commissioner may  for  sufficient reasons  to  be  recorded  in writing and  subject  to  such conditions  as  he  may deem necessary to impose,  order  to remove  from  any place, any toddy shop or Foreign Liquor  1 shop  to  a place outside the limits specified in this  sub- rule:

   Provided  further  that if any educational  institution, Temple, Church, Mosque or burial ground comes into existence subsequent  to the grant of licence, it shall not disentitle such shops for continuance:

   (3)  it  shall be competent to the Board of  Revenue  to order  the  transfer of shops from one site or  locality  to another site or locality or to alter the specified limits of any  shop  even  during the currency of the contract  or  to order  any shop to be closed in the interest of public peace or morality or on grounds of expediency and in such an event of  transfer,  alteration or closure, the  contractor  shall have no claim for compensation.

   The  repeated  usage of the negative expression no  in sub-rules  (1)  and (2) looms large therein.  By such  usage the   legislature  has  imposed   absolute  ban  on  certain activities  e.g.   no licensee shall be permitted  to  sell foreign  liquor  outside the local limits specified  in  his licence  as  in  sub-rule (1) and no foreign  liquor  shop shall  be  located outside the notified limits as  in  sub- rule  (2).   Then  again no foreign liquor  shop  shall  be located   within  the  distance   fixed  as  from   certain institutions.   There  is no proviso nor any explanation  as for  sub-rule (1) but the proviso is placed only below  sub- rule  (2).  Therefore, sub-rule (1) must work out by  itself unexpanded or unrestricted by any other clause.

   The  first proviso to sub-rule (2) is intended to  refer to  sub-rule  (2)  above.  This can be  discerned  from  two

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indications.  One is the fact that the said proviso has been placed  in the said sub-rule only.  Second is that its scope is  restricted  to a place outside the limit  specified  in this sub-rule.  The contention of the appellant is that the above  words  can have relation to the limits  specified  in sub-rule  (1)  because  the limit envisaged  in  the  second sub-rule  is practically the same as the limit indicated  in sub-rule (2).

   We  have  difficulty to accept the said  contention  for more  than  one  reason.  If the rule making  authority  had intended  it to be so they would have effortlessly used  the words outside local limits specified in the licence in the proviso  because the same words have been used in sub-  rule (1).  As the proviso gives powers to the Excise Commissioner to  order  removal of a shop to a place outside the  limits specified  in this sub-rule it can only refer to the limits specified  in  that sub-rule and not elsewhere.  It must  be noted  in  this context that sub-rule (2) specifies  certain limits  such  as within 400 meters (for toddy  shops)  and within   200   meters  (for   FL-1  shops)  from   certain institutions  mentioned  therein.  It is with  reference  to those  limits  which are specified in sub-rule (2) that  the proviso  confers  power on the Excise Commissioner  to  pass order for removal.

   Otherwise  the absolute ban incorporated in sub-rule (1) would  become meaningless.  It is also worthy to notice that the only exception from the ban contained in sub-rule (1) is provided  in  sub-rule  (3), extracted  above.   A  superior authority  like  the Board of Revenue alone was vested  with that  power in the interest of public peace or morality  or on grounds of expediency.

   (Shri  P.   Krishnamurthy  submitted that the  Board  of Revenue  in Kerala stood abolished in 1997 and in that place Government  is substituted in statutes.) If so, even for the Government  to order transfer of a shop from one locality to another  it cannot be done unless there is existence of  the exigency  indicated  in  sub-rule  (3).   How  could  it  be conceived  that a subordinate officer can do it without  any such exigency.

   We,  therefore, concur with the interpretation placed by the  Division Bench of the Kerala High Court on the scope of the  proviso  to Rule 6(2) of the Auction Rules.   It  means that Excise Commissioner has no authority to permit shifting of  a  foreign  liquor  shop from one  range  to  a  totally different range.  Consequently the order passed by the first respondent   Excise Commissioner in favour of the appellant is  without authority of law and it has been rightly  struck down  by the Division Bench of the High Court.   Accordingly we dismiss this appeal.

   Learned  counsel  for the appellant lastly made  a  plea that the amount deposited by him pursuant to the bid, should be  refunded to him as the appellant was not able to operate the   foreign  liquor  shop  mainly   on  account   of   the unauthorised order passed by the Excise Commissioner.  It is open  to  the  appellant to make the  application  for  such refund.   We  direct the Government to pass  orders  thereon within one month from the date of such application.

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