Letters Patent Appeal No.38 of 1993,Letters Patent Appeal No.39 of 1993,Letters Patent Appeal No.40 of 1993,Letters Patent Appeal No.41 of 1993,Letters Patent Appeal No.42 of 1993

18th September, 2003

Petitioner Counsel: Mr. AKSHAY NAIK
Respondent Counsel: Mrs. T. D. KHADE

Cases Cited:
State of Bombay Vs. F. N. Balsara, AIR 1951 SC 318 [Para 6,9]
Khoday Distilleries Ltd. Vs. State of Karnataka, (1995)1 SCC 574 [Para 7,14]
State of A. P. Vs. Mcdowell & Co., (1996)3 SCC 709 [Para 7,14,15]
Ugar Sugar Works Ltd. Vs. Delhi Administration, (2001)3 SCC 635 [Para 7,11,14]
Govt. of Maharashtra Vs. Deokar's Distillery, 2003(4) ALL MR 316 (S.C.)=(2003)5 SCC 669 [Para 7,12]
Union of India Vs. International Trading Co., (2003)5 SCC 437 [Para 7,16]

JUDGMENT

S. T. KHARCHE, J. :- By invoking the jurisdiction of this Court under Clause 15 of Letters Patent, this bunch of appeals take an exception to the common judgment and order dated 26.3.1993 passed by the learned Single Judge in bunch of writ petitions upholding the constitutional validity of the statutory notification dated 14.9.1992, bearing No.BPA-1088/1866/EXT-3, issued the Govt. of Maharashtra under Section 139(1)(a) of the Bombay Prohibition Act, 1949 (for short the Act) declaring the area of Gadchiroli district as "dry district" by enforcing "prohibition"throughout the district with effect from 2nd day of October, 1992 and follow up and consequential orders issued by the Collector of Gadchiroli on 15.9.1992 directing cancellation of subsisting licences expiring on 31.3.1993 with effect from expiry of 15 days from the date of the impugned orders. Common questions are involved in these appeals and, therefore, they are being disposed of by this common judgment.

2. Relevant facts are as under :

The appellants hold licence in Form CL-III for retail sale of country liquor at various places issued under the Maharashtra Country Liquor Rules, 1973 by the Collector, Gadchiroli. The licences were issued prior to 18 to 20 years before the bifurcation of Chandrapur district. The said district was bifurcated into two districts in 1984-85, i.e. Gadchiroli and Chandrapur. In the district of Gadchiroli, there is a population of tribals who have inhabited in this district from time immemorable. The tribals are customarily and habitually accustomed to consume alcoholic drinks and the State of Maharashtra has specifically framed rules known as Bombay Prohibition (Mhowra Flowers) (Prescribed Limits in the Weight) Rules, 1963 which specifically enable the tribals residing in tribal area of the State specified in col.no.2 of the Schedule, which includes tribals of Gadchiroli district to possess a greater quantity of Mhowra Flowers. The Govt. of Maharashtra issued statutory notification dated 14.9.1992 and declared the area of Gadchiroli district of the State as a "Dry Area"with effect from 2nd day of October, 1992 in the interest of general public in that district and particularly as the area of Gadchiroli district of the State consisted "mainly of the tribal area." The Gadchiroli district has about 40% of population of tribals in most of the areas and about 51% of such population in some of the areas and is one of the backward districts of the State. As a necessary consequence of said declaration, the Govt. of Maharashtra prohibited the grant of licences and permits specified in the schedule thereto in the Gadchiroli district of the State with effect from 2nd day of October, 1992. It is well known that 2nd October is birth day of Father of the Nation and has special solemnity for people of India. As a necessary corollary of the said order, it was further declared by the said notification that any such licences and permits, which were already granted by the Collector of the district before the 2nd day of October, 1992 and which were in force shall stand cancelled with effect from 2nd day of October, 1992 on taking of action towards cancellation of such licences and permits by the statutory authority granting such licences and permits in accordance with the provisions of clause (a) of sub-section (1) of section 56 of the said Act. The Schedule to the said notification sets out the list of various licences and permits which were directed to be cancelled as an essential measure of follow-up action in order to effectuate the enforcement of prohibition policy in the said district. On 15th September, 1992, the Collector of Gadchiroli issued necessary orders to the effect that the subsisting licences shall stand cancelled on expiry of 15 days from the date of the said orders in exercise of the powers conferred on him under Section 56(1)(a) of the Act by issuing the statutory notification dated 14.9.1992.

3. We have heard the learned counsel for the parties.

4. Mr. Naik, learned counsel for the appellants, contended that Section 139(1)(a) of the Act empowers the State Government merely to prohibit the grant of any kind of licence, permit etc. and the State Govt. was not concerned with the premature cancellation of licences already issued and the subject matter concerning cancellation of licences was under Sections 54 and 56 of the Act. He contended that Section 139(1)(a) of the Act is unconstitutional as the said section suffers from vices of excessive delegation of legislative power and did not prescribe any guideline governing exercise of power thereunder. He contended that the said section enables the Government to act arbitrarily as it does not prescribe the time or conditions or circumstances in which the power conferred thereunder may be exercised by the Government. He contended that the said section conferred unfettered powers on the State Government and the said section is also violative of Article 14 of the Constitution of India. He contended that though the State is not precluded from regulating the trade and business in potable liquor merely because it imposes tax and fee on purchase or sale and income is derived from such liquor, the State cannot discriminate between citizens carrying on business in liquor within the restrictions. The citizen has the right to carry on trade or business subject to the limitation, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. He contended that when a citizen is permitted to carry on such trade or business, he would be entitled to claim equal right as against other citizens. In absence of the State imposing any prohibition or monopolizing the business, the same may be carried on by the licensee without being subjected to any discrimination. Such a right although may not be elevated to the status of a fundamental right, but all the same it is a right. The Bombay Prohibition Act, 1949 regulates the rights of the citizens in carrying on business. It is beyond any cavil that a right to carry on business in liquor being not absolute, the same would be subject to such restrictions and limitations as may be imposed by law. Mr. Naik further contended that the statutory notification issued by the Collector of Gadchiroli is violative of the provisions of Article 19(1)(g) read with Article 301 of the Constitution of India.

5. Mr. Naik further contended that the conclusions drawn by the learned Single Judge that Section 139(1)(a) of the Act are valid and not ultra-vires to the constitution of India; that the order passed by the Collector is quasi legislative in character and is not violative of Article 14 or Article 301 of the Constitution; that the State was not bound to grant hearing to the residents of the locality before issuing the order dated 14.9.1992 or before taking the follow-up action by making the subsisting licences inoperative or cancelling them or that the State had authority to direct the Collector to cancel the licences in view of the provisions contained in Section 139(1)(a) and 139(1)(n) of the Act and the order for cancelling the licences and permits etc. has a nexus with the policy and object of the Act and the order of cancelling the licences is thus for a cause within the meaning of Section 56(1)(a) of the Act and that it is the duty of the State Government to enforce the impugned order as a part of rule of law in the State of Maharashtra faithfully and vigorously with immediate effect, are not sustainable in law.

6. Mr. Agrawal, learned A.G.P., contended that the constitutional validity of Sections 139 and 356 of the Act has been upheld by the Supreme Court in State of Bombay Vs. F. N. Balsara - AIR 1951 SC 318. He contended that each State is empowered to formulate its own liquor policy keeping in view the interest of its citizens and no direction can be given or expected regarding the correctness and executive policy until there is infringement or violation of any constitutional provision.

7. The learned A.G.P. contended that the order or business in intoxicant liquor is not a fundamental right under Article 19(1)(g) of the Constitution of India. The State can create monopoly in itself for trade or business in such liquor and can further place restrictions and limitations on such trade or business in res commercium and such restrictions and limitations under Art.19(6) can be placed by subordinate legislation as well and the State is not precluded from regulating the trade and business in potable liquor merely because it imposes tax or fee on purchase or sale and income is derived from such liquor. He also contended that restriction can also be placed by subordinate legislation or executive order. He contended that the impugned order passed by the learned Single Judge is just, legal and valid. In support of these submissions, he relied on the decisions of Supreme Court in the cases of Khoday Distilleries Ltd. Vs. State of Karnataka & ors. - (1995)1 SCC 574; State of A. P. & ors. Vs. Mcdowell & Co. - (1996)3 SCC 709; Ugar Sugar Works Ltd. Vs. Delhi Administration & ors. (2001)3 SCC 635; Govt. of Maharashtra & ors. Vs. Deokar's Distillery - (2003)5 SCC 669 : [2003(4) ALL MR 316 (S.C.)] and Union of India & another Vs. International Trading Co. & anr. - (2003)5 SCC 437.

8. We have given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. The learned Single Judge considered the various decisions of the Apex Court and has summarized his conclusions as under :

(i) Section 139(1)(a) of the Bombay Prohibition Act, 1949 is valid.

(ii) Section 56 of the Bombay Prohibition Act, 1949 is valid.

(iii) (a) The impugned order dated 14th September, 1992 is not invalid on the ground that the same is beyond any scope and ambit of section 139(1)(a) of the Bombay Prohibition Act, 1949. The impugned order is intra vires.

(b) The said impugned order is quasi legislative in character. The said impugned order is not violative of Article 141 or Article 301 of the Constitution. The said impugned order cannot be quashed merely on the ground that there is likelihood of practical difficulties in enforcing the impugned order, assuming that there are any such difficulties.

(iv) Since the impugned order dated 14th September, 1992 was quasi legislative in character, the State was not bound to grant hearing to the residents of the locality before issuing the order dated 14th September, 1992 or before taking the follow up action making the subsisting licences inoperative or cancelling the same.

(v) The State Government had necessary authority to direct the Collector to cancel the impugned licences in view of the provisions contained in section 139(1)(a) and section 139(1)(n) of the Bombay Prohibition Act, 1949. The impugned order for cancelling the licences and permits etc. has a nexus with the policy and object of the Act. The impugned order of cancelling the licence is thus for a cause within the meaning of section 56(1)(a) of the Bombay Prohibition Act, 1949. In a situation of this kind, the Collector was bound to grant hearing to the petitioners before exercising the power under section 56(1)(a) of the Act.

(vi) The impugned order dated 14th September, 1992 is constitutionally valid.

(vii) It is the duty of the State Government to enforce the impugned order as a part of rule of law in this State faithfully and vigorously with immediate effect."

9. So far as the validity of Sections 139(1)(a) and 56 of the Bombay Prohibition Act is concerned, there is no dispute that the Apex Court upheld the constitutional validity of these provisions of law in the case of State of Bombay Vs. F. N. Balsara, cited supra, and the learned Single judge observed in para 10 of his judgment that it is necessary to refer to the judgment of the Supreme Court in the first prohibition case, i.e. F. N. Balsara's case. In para 23 of his judgment, Fazal Ali, J., speaking for the Bench, referred to the view taken by the High Court of Bombay declaring sections 52, 53 and 139(1)(c) of the above referred Act as invalid on the ground that the said sections constituted delegation of legislative power and the Govt. was left with the power to exempt persons or classes from the provisions of the Act as it deemed fit. After extracting the passage from the judgment of the Bombay High Court on the subject, the Supreme Court held that the view taken by the High Court of Bombay was not correct in view of the principles laid down by the Supreme Court in Re Delhi Laws Act case. By para 33 of the said judgment, the Hon'ble Supreme Court declared section 12(c), section 12(d), section 13, section 23 and section 24 as unconstitutional on the ground that the said sections affected possession of medicinal and toilet preparations containing alcohol etc. as more particularly set out therein. Article 47 of the Constitution makes an exception in favour of consumption of liquor and drugs for medicinal purposes and for no other purpose. In the said paragraph of the judgment, it is also stated that sub-section (1) of section 136 and clauses (b), (c), (e) and (f) of sub-section (2) of section 136 were also unconstitutional. It was in terms held, "I hold that the rest of the provisions of the Act are valid and I also hold that my decision declaring some of the provisions of the Act to be invalid does not affect the validity of the Act as it remains." (The emphasis is supplied). It is, therefore, obvious that section 139(1)(a) as well as section 56 of the said Act were also declared constitutional and valid by the Supreme Court in the above referred landmark judgment of the Apex Court.

10. The Constitution Bench of the Apex Court while dealing with the question as to whether a monopoly for the manufacture, trade or business in liquor can be created in favour of the State and (ii) whether reasonable restrictions under Article 19(6) of the Constitution can be placed only by Act of Legislature or by a subordinate legislation as well, summarized the law on the subject relating to right to carry on trade or business in potable liquor and observed (a) The rights protected by Article 19(1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, to be read along with the said qualifications. Even the rights guaranteed under the Constitutions of the other civilized countries are not absolute but read subject to the implied limitations on them. Those implied limitations are made explicit by clauses (2) to (6) of Article 19 of our Constitution; (b) The right to practice any profession or to carry on any occupation, trade or business does not extend to practising a profession or carrying on an occupation, trade or business which is inherently vicious and pernicious, and is condemned by all civilised societies. It does not entitle citizens to carry on trade or business in activities which are immoral and criminal and in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public, i.e., res extra commercium, (outside commerce). There cannot be business in crime. (c) Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. (d) Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country. The State has, therefore, the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage, both because it is inherently a dangerous article of consumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purposes. (e) For the same reason, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19(6) or even otherwise. (f) For the same reason, again, the State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. The restrictions and limitations on the trade or business in potable liquor can again be both under Article 19(6) or otherwise. The restrictions and limitations can extend to the State carrying on the trade or business itself to the exclusion of the elimination of others and/or to preserving to itself the right to sell licences to trade or business in the same, to other. (g) When the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade, or business subject to the limitation, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. (h) The State can adopt any mode of selling the licences for trade or business with a view to maximise its revenue so long as the method adopted is not discriminatory. (i) The State can carry on trade or business in potable liquor notwithstanding that it is an intoxicating drink and Article 47 enjoins it to prohibit its consumption. When the State carries on such business, it does so to restrict and regularise production, supply and consumption of liquor which is also an aspect of reasonable restriction in the interest of general public. The State cannot on that account be said to be carrying on an illegitimate business. It carries on business in products which are not declared illegal by completely prohibiting their production but in products, the manufacture, possession and supply of which is regulated in the interests of the health, morals and welfare of the people. It does so also in the interest of the general public under Article 19(6). (j) The mere fact that the State levies taxes or fees on the production, sale and income derived from potable liquor whether the production, sale or income is legitimate or illegitimate, does not make the State a party to the said activities. The power of the State to raise revenue by levying taxes and fees should not be confused with the power of the State to prohibit or regulate the trade or business in question. The State exercises its two different powers on such occasions. Hence the mere fact that the State levies taxes and fees on trade or business in liquor or derives income from it, does not make the right to carry on trade or business in liquor a fundamental right, or even a legal right when such trade or business is completely prohibited. (k) The State cannot prohibit trade or business in medicinal and toilet preparations containing liquor or alcohol. The State can, however, under Article 19(6) place reasonable restrictions on the right to trade or business in the same in the interests of general public. (l) Likewise, the State cannot prohibit trade or business in industrial alcohol which is not used as a beverage but used legitimately for industrial purposes. The State, however, can place reasonable restrictions on the said trade or business in the interests of the general public under Article 19(6) of the Constitution. (m) The restrictions placed on the trade or business in industrial alcohol or in medicinal and toilet preparations containing liquor or alcohol may also be for the purposes of preventing their abuse or diversion for use as or in beverage.

11. In Ugar Sugar Works Ltd. Vs. Delhi Administration & ors. - (2001)3 SCC 635 the Apex Court considered the question as to whether the impugned notification issued by respondent no.2 laying down terms and conditions for registration of different brands of Indian-made Foreign Liquor (IMFL) for supply within the territory of Delhi during 2000-2001 and laying down Minimum Sales Figures (MSF), as a criterion of eligibility for grant of licence in Form L-1, is violative of Articles 14, 16 and 19(1)(g) of the Constitution and observed that it is well settled that the Courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy. Each State is empowered to formulate its own liquor policy keeping in view the interests of its citizens. Determination of wide-scale acceptability of a particular brand of liquor, on the basis of National Sales Figures, does not strike us as being unreasonable, much less irrational. The basis for determination is not only relevant but also fair. No direction can be given or expected from the Court regarding the "correctness" of an executive policy unless while implementing such policies, there is infringement or violation of any constitutional or statutory provision. Thus, under the circumstances, the Supreme Court found that there was no justifiable reason warranting interference with the impugned notification in that case.

12. In Government of Maharashtra Vs. Deokar's Distillery- (2003)5 SCC 669 three Judges bench of Supreme Court was dealing with the common question as to whether the State of Maharashtra is empowered to charge from the liquor licensees, under the Bombay Prohibition Act, 1949, at whose premises government staff is posted for supervision as per the provision of Section 58-A, are governed by the Maharashtra Civil Services (Revised Pay) Rules, 1998 and other rules, resolutions made by the State Government under the power vested in it by the proviso to Article 309 of the Constitution, to fix the pay and other allowances of its employees, for levy and recovery of the cost of supervision to be paid to the State Government as contemplated under Section 58-A of the Act or not, and observed in paras 31 and 32 as under, per majority -

"The legal (sic liquor) licensee does not have a fundamental right to deal in liquor. Under Entry 8, List II in the Seventh Schedule to the Constitution of India and thereby under Sections 49 and 143(2)(u) of the Prohibition Act, the State has the Exclusive right/privilege in respect of potable liquor and the State, in our opinion, can charge any reasonable expenses or even consideration for permitting such activity by grant of licence and that the respondents ought to comply with all reasonable orders, as undertaken by them while obtaining the licence. This factor, the High Court has not appreciated. Once the liquor licensee has undertaken to abide by all reasonable orders under the Prohibition Act while obtaining the licence, they cannot wriggle out of the contractual liability voluntarily incurred by them.

The order of the High Court is bad in law. The High Court, in our view, has erred in not appreciating that the impugned demand notice was also in the nature of demanding balance of the price of the exclusive privilege which would become final only on the issue of the notification, order under Article 309, the bulk of which has already been recovered in advance, which privilege exclusively vests with the Government considering the effect of provisions especially Section 49 and Section 143(2)(u) of the Prohibition Act. In our opinion, the establishment charges demanded are in the nature of price for parting with the privilege to permit manufacture and sale of liquor and the privilege exclusively vests with the Government."

13. However, Hon'ble Justice S. B. Sinha recorded dissenting view and observed in paras 43, 44, 45 and 46 as under :

"Concededly, a citizen of India in view of a catena of decisions of this Court has no fundamental right to carry on trade or business in potable liquor. The State indisputably has a right to regulate or prohibit business in potable liquor as a beverage or otherwise keeping in view the fact that the same is dangerous and injurious to health and is therefore, an article which is res extra commercium being inherently harmful. The State is, therefore, entitled to completely prohibit a trade or business in liquor and create monopoly either in itself or in an agency created by it or take over such activities itself. For the purposes of selling the licence it can adopt any mode with a view to maximise its revenue so long as the method adopted is not discriminatory.

However, when the State permits trade or business in potable liquor, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. (See Khoday Distilleries Ltd. Vs. State of Karanataka).

Although a citizen has no fundamental right to carry on trade or business in potable liquor, but when he is permitted to carry on such business, he would be entitled to claim equal right as against other citizens. In absence of the State imposing any prohibition or monopolizing the business, the same may be carried on by the licensee without being subjected to any discrimination. Such a right although may not be elevated to the status of a fundamental right but all the same it is a right.

The Bombay Prohibition Act, 1949 regulates the rights of the distillers in carrying on business. It is beyond any cavil that a right to carry on business in liquor being not absolute, the same would be subject to such restrictions and limitations as may be imposed by law."

14. In this context, it may not be out of place to mention here that the question whether the citizens have fundamental right to trade or business in liquor is no longer res integra and as per the clear and unequivocal dictum of the Supreme Court in the cases of Khodey Distilleries, Ugar Sugar Works Ltd., State of A.P. Vs. Mcdowell & Co. and other cases the law is well settled and, therefore, the contention of Mr. Naik that the impugned order dated 14.9.1992 is invalid on the ground that the same was beyond the scope and ambit of Section 139(1)(a) of the Act and is also violative of Articles 19(1)(g) and 301 of the Constitution cannot be subscribed.

15. We may also usefully make a reference to the three Judges' Bench decision of Supreme Court in State of A. P. & ors. Vs. Mcdowell & Co. - (1996)3 SCC 709, cited supra, wherein it is observed in paras 26 and 39 as under :

"By an amendment effected in 1956, the First Schedule was amended. The Amendment Act inter alia introduced Entry 26 in the Schedule. It reads:

"Fermentation Industries :

(1) Alcohol.

(2) Other products of fermentation industries".

The contention of the learned counsel for the petitioners is based upon these provisions. The submission is this : manufacture and production of intoxicating liquor is an industrial activity falling within Item 26 of the First Schedule to the IDR Act; the IDR Act provides for licensing of industries mentioned in the First Schedule to the Act besides providing extensive control and regulation of such industries and their products; the grant, the renewal and the refusal to grant or renew the licences is thus the exclusive province of the Center; the State has no say in the matter; the State Legislature is incompetent to prohibit manufacture of intoxicating liquors. But the argument, in our opinion, ignores the existence and the ambit of Entry 8 in List II. Entry 8 expressly speaks of production, manufacture, possession, transport, purchase and sale of intoxicating liquors. It means that the power to make a law with respect to the said matters rests with the State Legislature. What is significant is that the entry speaks expressly of production and manufacture of intoxicating liquors as well. This would mean that the industries producing and manufacturing intoxicating liquors fall within the purview of Entry 8. In other words, we must first carve out the respective fields of Entry 24 and Entry 8 in List II. Entry 24 is a general entry relating to industries whereas Entry 8 is a specific and special entry relating inter alia to industries engaged in production and manufacture of intoxicating liquor. Applying the well-known rule of interpretation applicable to such a situation (special excludes the general). We must hold that the industries engaged in production and manufacture of intoxicating liquors do not fall within Entry 24 but do fall within Entry 8. This was the position at the commencement of the Constitution and this is the position today as well. Once this is so, the making of a declaration by Parliament as contemplated by Entry 52 of List I does not have the effect of transferring or transplanting, as it may be called, the industries engaged in production and manufacture of intoxicating liquors from the State List to Union List. As a matter of fact, Parliament cannot take over the control of industries engaged in the production and manufacture of intoxicating liquors by making a declaration under Entry 52 of List I, since the said entry governs only Entry 24 in List II but not entry 8 in List II.

(emphasis added).

The contention that a citizen of this country has a fundamental right to trade in intoxicating liquors refuses to die in spite of the recent Constitution Bench decision in Khoday Distilleries, this Court reviewed the entire case-law on the subject and concluded that a citizen has no fundamental right to trade or business in intoxicating liquors and that trade or business in such liquor can be completely prohibited. It held that because of its vicious and pernicious nature, dealing in intoxicating liquors is considered to be res extra commercium (outside commerce). Article 47 of the Constitution, it pointed out, requires the State to endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and all drugs which are injurious to health. For the same reason, the Bench held, the State can create a monopoly either in itself or in an agency created by it for the manufacture, possession, sale and distribution of liquor as a beverage. The holding is emphatic and unambiguous. Yet an argument is sought to be built upon certain words occurring in clauses (e) and (f) of the summary contained in para 60 of the decision. In these clauses, it was observed that creation of a monopoly in the State to deal in intoxicating liquors and the power to impose restrictions, limitations and even prohibition thereon can be imposed both under clause (6) of Article 19 or even otherwise. Seizing upon these observations, Shri. Ganguly argued that this decision implicitly recognises that business in liquor is a fundamental right under Article 19(1)(g). If it were not so, asked the learned counsel, reference to Article 19(6) has no meaning. We do not think that any such argument can be built upon the said observations. In clause (e), the Bench held, a monopoly in the State or its agency can be created "under Article 19(6) or even otherwise". Similarly, in clause (f), while speaking of imposition of restrictions and limitations on this business, it held that they can be imposed "both under Article 19(6) or otherwise". The said words cannot be read as militating against the express propositions enunciated in clauses (b), (c), (d), (e) and (f) of the said summary. The said decision, as a matter of fact, emphatically reiterates the holding in Har Shankar that a citizen has no fundamental right to trade in intoxicating liquors. In this view of the matter, any argument based upon Article 19(1)(g) is out of place."

16. Eventually, reference may also be had to the recent decision of Supreme Court in Union of India & anr. Vs. International Trading Co. - (2003)5 SCC 437 wherein it has been held in paras 22 and 23 as under :

"If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed.

Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of person upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. (See Parbhani Transport Coop. Society Ltd. Vs. Regional Transport Authority, Shree Meenakshi Mills Ltd. Vs. Union of India, Hari Chand Sarda Vs. Mizo District Council and Krishnan Kakkanth Vs. Govt. of Kerala.)"

17. Having regard to the aforesaid settled legal position it is crystal clear that the impugned order passed by the learned Single Judge upholding the constitutional validity of Sections 139(1)(a) and 56 of the Act cannot be said to be not sustainable in law. It is admitted position that the State of Maharashtra, Home Department, Mantralaya, Bombay, issued the order dated 14.9.1992 bearing No.BPA-1088/1866/EXC-3 which reads thus :

"Whereas the Government of Maharashtra has decided to declare the area of Gadchiroli district of the State which consists mainly of the tribal area as a dry district by enforcing prohibition in the interest of the general public in that district with effect from the 2nd day of October, 1992;

Now, therefore, in exercise of the powers conferred by clause (a) of sub-sec. (1) of Sec.139 of the Bombay Prohibition Act, 1949, (Bom.XXV of 1949), the Govt. of Maharashtra hereby prohibits the grant of following kinds of licences and permits specified in the Schedule hereto in the Gadchiroli district of the State w.e.f. the 2nd day of October, 1992.

2. For the avoidance of doubt it is hereby declared that any such licence and permits granted before the 2nd day of October, 1992 and which are in force shall stand cancelled w.e.f. the 2nd day of October, 1992 on taking action towards cancellation of such licence and permits by the authority granting such licence and permits in accordance with the provisions of clause (a) of sub-section (1) of Section 56 of the said Act.

SCHEDULE

Kinds of licence and permits

I. Licence for sale of Mild Liquor (Beer) on the premises of a hotel, restaurant, canteen or club under the Special Permits and Licences Rules, 1952.

II. The following licences and permits under the Bombay Foreign Liquor Rules, 1953, namely :

(i) Ordinary Trade and Import Licence for the removal from a Customs Frontier and for the import and vend of foreign liquors (potable) including Indian Made Liquors (Potable) excised at a special rates. ("not to be drunk on the premises").

(ii) Vendor's Licence for sale of Foreign Liquor.

(iii) Licence for the sale at a hotel of imported foreign liquor (Potable) and Indian Made Foreign Liquors (potable) on which excise duty has been paid at special rates.

(iv) Licence for the sale at a club of imported foreign liquor (potable) and Indian Made Foreign Liquors (Potable) on which excise duty has been paid at special rates.

(v) Permits for purchase, possession, transport, use and consumption of a foreign liquor and country liquor.

III. Licence for the retail sale of tody under the Maharashtra Tody-Shops (Licensing) and Tody Trees (Tapping) Rules, 1958.

IV. The following licences under the Mah. Country Liquor Rules, 1973, namely :-

i) Licence authorising the storage and wholesale sale of duty paid country liquor to retail shops.

ii) Licence for the retail sale of country liquor.

[By order and in the name of the Governor of Maharashtra."]

18. On consideration of the settled law laid down by the Apex Court in the aforementioned cases, we are of the considerated opinion that the impugned judgment and order passed by the learned Single Judge is perfectly legal and correct. We are in respectful agreement with the view expressed by the learned Single Judge that the order dated 14.9.1992 issued by the State of Maharashtra has acquired force of law and is not violative of Articles 14, 19(1)(g), 47, 300A and 301 of the Constitution of India. It is well settled law that the State alone has exclusive right to deal with the subject matter and when it parts with some of its privileges in the form of licence to the citizens, no vested right is created and, therefore, the contention of the learned counsel for the appellants that the order issued by the State of Maharashtra on 14.9.1992 is unconstitutional, is required to be rejected. Similarly, we do not find any merit in the argument that the said order discriminates between tribals and non-tribals.

19. The learned A.G.P. rightly submitted that to avoid hardship to the appellants, the Government has taken a decision that fresh licence will be issued to them in the neighbouring districts except Wardha and subject to other normal conditions applicable for issue of such licence and the Government has also taken the decision to relocate them through fresh licence. The appellants have no constitutional right to trade in liquor and the citizens have no fundamental right to carry on trade or business in potable liquor and the question of any discrimination does not arise. We accept this submission and hope and trust that the State of Maharashtra would relocate the licensees for rehabilitating them in the neighbouring districts except Wardha subject to other normal conditions applicable for issue of such licence.

20. Consequently, all the Appeals stand dismissed with costs.

Appeals dismissed.