Andhra HC (Pre-Telangana)
Obili Kusumar vs The Govt. Of A.P. And Others on 27 December, 2014
Author: Vilas V.Afzulpurkar
Bench: Vilas V.Afzulpurkar
HONBLE SRI JUSTICE VILAS V.AFZULPURKAR WRIT PETITION No. 21410 of 2014 27-12-2014 Obili Kusumar.Petitioner The Govt. of A.P. and others. Respondents Counsel for the Petitioner: Sri O.Manohar Reddy Counsel for Respondents: Government Pleader for Prohibition and Excise <Gist : >Head Note: ? Cases referred: HONBLE SRI JUSTICE VILAS V.AFZULPURKAR W.P.No.21410 of 2014 ORDER:
The petitioner herein was a successful bidder with respect to one of the shops notified by the 4th respondent at Gazette Sl.No.162 for Mantada village, Krishna District. He was granted provisional licence on 01-07-2014 and has been carrying on business at Mantada, Vuyyuru Mandal, Machilipatnam, Krishna District. The petitioner questions relocation of one of the shops in respect of Gazette Serial No.168, which was originally located at Mudunuru Village to Gopavanipalem on various grounds as detailed hereunder.
The petitioner states in his affidavit that out of 173 shops notified in Machilipatnam Division, 24 shops remained unsold and the 4th respondent issued Notification, dated 25-07-2014 inviting bids for 22 undisposed shops and on the same day by another Gazette Notification No.32/2014, the proposed Shop at Gopavanipalem was notified. The petitioner challenges the relocation of the said Shop at Gopavanipalem on the ground that it is at a distance of two kilometres from his shop. Therefore, he submits that relocation of Shop at Gopavanipalem would seriously affect the petitioner.
Sri O.Manohar Reddy, learned counsel appearing for the petitioner has raised two specific contentions based on Rule 4 as well as Rule 16 (9) of the A.P.Excise (Grant of Licence of Selling by Shop and Conditions of Licence) Rules, 2012 (hereinafter referred to as the Rules). Learned counsel submits that under Rule 4 of the Rules, the Commissioner is required to examine requirement of public order, health, safety and other factors as he thinks fit and would thereupon fix the number of shops to be established in an area/locality and then Notification under Rule 5 of the Rules has to be published. Rule 4 of the Rules has been amended under G.O.Ms.No.357, dated 22-06-2013 by adding the following sentence to Rule 4 of the Rules and may relocate any undisposed shops from any area/locality as he thinks fit. Learned counsel for the petitioner, therefore, contends that while initially fixing the number of shops in an area/locality, the Commissioner has to take into consideration all the factors such as public order, health, safety and other factors and the said requirement is also required to be fulfilled while ordering relocation of a shop from notified location to any location.
It is the specific contention of the learned counsel for the petitioner that while ordering change of location from Mudunuru to Gopavanipalem, the Commissioner has not taken into consideration any of the factors, which are enumerated under Rule 4 of the Rules. Further contends that the counter affidavit filed by the respondents is silent on the aspect considered by the Commissioner and hence the notification directing relocation of the shop is not sustainable. The other contentions raised by the learned counsel is based upon Rule 16(9) of the Rules, which provides that the licencee shall be required to pay privilege fee at 8% plus applicable VAT thereon on the sale price of IMFL and FL purchased from APBCL when the cumulative value of his/her purchases during the licence year exceeds seven times the annual licence fee. Learned counsel would submit that the viability of the Shop thus is determined based upon the annual turnover of a shop and the criteria adopted for levying privilege fee refers to a turnover exceeding seven times the annual licence fee. As per Rule 16(9) when relocation is ordered, the contingency as contemplated under Rule 16(9) of the Rules will not be achieved by the shop, which is already existing and located as per the original Notification. Learned counsel therefore submits that the very viability of the existing shop would be affected on account of such arbitrary relocation. In support of the said contention, the learned counsel for the petitioner relied upon batch of writ petitions, which were filed during the previous excise years when the very same contention was raised in the batch of writ petitions with respect to Rule 16(9) of the Rules. The then existing Rule 16 (9) required that privilege fee will be payable if the turnover exceeds six times the annual licence fee and that requirement is now amended in the present excise year to seven times the annual licence fee.
Learned counsel for the petitioner placed reliance upon counter affidavit filed by the Commissioner of Prohibition and Excise in W.P.No.35116 of 2013 and batch and has drawn attention of this Court to paragraph 10 of the Counter, wherein the Commissioner has stated as follows :-
It is submitted that the Commissioner of Prohibition and Excise requested all the Deputy Commissioners of Prohibition and Excise of the State to submit proposal for relocation of shops wherever the turnover of the shop/s is 14 times and above. In this connection, a meeting with all the Deputy Commissioners of Prohibition and Excise was convened on 06-11-2013 and the Deputy Commissioners have requested the Commissioner of Prohibition and Excise to accord permission to relocate the A4 shops in (17) Mandals, which are not having even a single A4 shop for the entire Mandal. The Deputy Commissioners have submitted proposals in respect of (106) shops where the turnover is 14 times and above.
Learned counsel also placed reliance upon the decision of this Court in W.P.No.35516 of 2013 and batch, dated 05-03-2014 wherein this Court considered the aforesaid contentions and dismissed the writ petitions by observing as follows:-
It is not even the petitioners case that any area/location, where an A4 shop had achieved a turnover of less than 14 times the licence fee in the excise year 2013, has been identified for relocation of undisposed A4 shops. Even with regards the new shops, in the relocated areas, there is no discrimination shown by the State as the existing licencees are not being deprived of their rights to vend liquor in retail.
Learned Government Pleader for Excise has filed a counter affidavit, wherein it is stated that as per the orders of the Commissioner, Notification was issued in respect of Gazette at Sl.No.168 for relocation of A4 shop from Mudunuru Village to Gopavanipalem village. It is also stated that for the lease year 2013-14 also, A4 shop was notified in Gopavanipalem village, but later the said shop was shifted from that village to Penumalli village in view of the specific permission granted by the Government vide its Memo, dated 27-07-2014. It is, therefore, submitted that it is not a new proposal to locate a shop at Gopavanipalem and only in view of the situation that shop at Mudunuru is undisposed even after third round of notification, the decision to relocate the shop at Gopavanipalem was taken. It is further stated that the Commissioner has taken decision on the basis of the reports of the subordinate officers and the same is in accordance with Rule 4 of the Rules. It is further stated that during the excise years 2008 to 2010, three A4 shops were functioned at Mantada village and in 2012-13, two A4 shops were functioned at Mantada village and one A4 shop was functioned at Gopavanipalem village and in 2013-14, Mantada village A4 shop was shifted to Bhadrirajupalem and Gopavanipalem A4 shop was shifted to Penumali Village. The sales statistics of two shops at Mantada as well as at shop at Gopavanipalem were also set out in the counter and it is stated that relocation of the Shop is viable. The figures of population of the village is also given in the counter where Gopavanipalem village has population of 514 as per 2011 census and there are six adjacent villages around it and no A4 shop is existing is the said six villages. It is also stated that the existing shop at Mantada village would not be affected, as the location of shop proposed at Gopavanipalem is two kilometres away from the petitioners A4 shop.
Learned Government Pleader placed reliance upon a copy of report of the Prohibition and Excise Inspector, Vuyyuru, addressed to the Prohibition and Excise Superintendent, Machilipatnam, on 21-07-2014. wherein the proposal for shifting shop from Mudunuru to Gopavanipalem was put up for consideration. The Deputy Commissioner of Excise under his report, dated 21-07-2014, informed the Commissioner of Prohibition and Excise, proposing to relocate three A4 shops and also enclosed list of proposed relocation of three A4 shops. So far as the present writ petition is concerned, G.Sl.No.168 was proposed to be shifted to Gopavanipalem. Based on the aforesaid reports, the Commissioner of Prohibition and Excise, after careful examination of the proposals submitted by the Deputy Commissioner, passed order, dated 25-07- 2014 under Rule 4 of the Rules with regard to relocation as that Shop at Mudunuru was not disposed even after third round of Notification.
Learned Government Pleader also placed reliance upon the judgment of the learned Single Judge of this Court in W.P.No.21073 of 2014, dated 26-09-2014, wherein the learned Single Judge considered similar objections for relocation and found that relocation of undisposed shops is a completely independent exercise from the exercise of determination of total number of shops in a locality/area. In the process of relocation, the total number of shops authorized to be established at the first instance by the Commissioner will never get altered. The learned Judge also considered similar contention with reference to Rule 16(9) of the Rules and came to the conclusion that Rule 16(9) of the Rules does not offer any guidance for regulating the exercise contained in the later part of Rule 4 of the Rules relating to relocation of undisposed shops and consequently, declined to interfere with the order of relocation. In addition, the learned Government Pleader submits that the petitioner being an existing licencee of a shop situated at two kilometres away from Gopavanipalem has no vested right locus to question the Notification directing relocation of the shop.
I have considered both the said contentions and in my view, the arguments based upon the interpretation of Rule 4 of the Rules has to be appreciated in its proper object and purport. It is no doubt true that while fixing number of shops, the Commissioner shall take into consideration requirement of public order, health, safety and other factors, which he thinks appropriate and decide the area/locality where the shop has to be located and it is thereafter the shop has to be notified under Rule 5 of the Rules. As mentioned above, Rule 4 of the Rules has undergone the amendment under G.O.Ms.No.357 Revenue (Excise-II) Department, dated 22-06-2013.
The amended Rule 4 of the Rules reads as follows:-
Establishment of Shops:- Subject to such directions, which the Government may issue in this regard from time to time, the Commissioner of Prohibition and Excise, having due regard to the requirement, public order, health, safety and other factors as he thinks fit, may fix the number of shops to be established in an area/locality before the publication of notification under Rule 5 and may relocate any un-disposed shops from any area/locality as he thinks fit.
A bare reading of the amended Rule 4 of the Rules goes to show that before publication of Notification under Rule 5 of the Rules, the Commissioner shall take into consideration the requirement of public order, health, safety and other factors, which he thinks appropriate and decide the area/locality where the shop has to be located. At a later stage, when an undisposed shop is to be relocated, the Commissioner has to take into consideration all the factors as mentioned under Rule 4 of the Rules including the factors relating to existing shop in the vicinity of the proposed location and thereafter may take appropriate decision. The Commissioner undoubtedly would also take into consideration the viability of the existing shop while ordering relocation.
From a reading of the counter affidavit and the contentions of the learned Government Pleader, as noted above, it is evident that relocation of shop at Gopavanipalem is not an exercise done for the first time and in the previous excise years also, shops were notified and located therein. That apart, the specific averment in the counter affidavit that the petitioners shop at Mantada is two kilometres away from Gopavaniapalem also is not controverted and in view of that, the contingency of the petitioners business being affected by relocation of the shop was also taken into consideration while ordering relocation. In view of the distance and potentiality as mentioned in the counter affidavit, it does not appear that the petitioners business would be any way affected by relocation of the said shop. Since the Commissioner passed orders basing on the reports of his subordinate officers in support of such relocation, it cannot be said that the Commissioner has not taken into consideration all the factors as are required to be taken into consideration in terms of Rule 4 of the Rules. Therefore, the 1st contention raised by the learned counsel for the petitioner is, therefore, rejected.
So far as the contention of Rule 16(9) of the Rules is concerned, in my view, there is a complete misunderstanding of purport of the said Rule inasmuch as any licencee in a given excise year may be able to achieve business turnover as contemplated under Rule 16 (9) of the Rules, but that by itself cannot be taken as a criteria for determining the viability of shop at a new location. It cannot be disputed that viability of a shop and its potential profitability are two different aspects all together. While viability of a shop may not depend on the achievability of seven times turnover to the annual licence fee and the viability can be assessed and sustained even if the turnover exceeds the minimum expected turnover.
Rule 16 (9) of the Rules contemplates a situation where the licencee runs his business into a huge turnover exceeding seven times the annual licence fee but that by itself it cannot be presumed that by granting a licence, every licencee will exceed the turnover of seven times the annual licence fee. In any case, vending of liquor is a privilege which the State Government extends to the licencee and is otherwise is a matter of business prospects of a licencee and it cannot be said that the licencee is entitled to have as much as turnover as possible and that cannot be diminished by relocating other shop even at a distance of two kilometres. The contentions based on the said Rule were also rejected by this Court in the decisions cited above in W.P.No.21073 of 2014, dated 26-09-2014 and the same contention was also considered by another learned Single Judge in W.P.No.35116 of 2013 and batch, dated 05-03-2014 and ultimately, the entire batch of writ petitions were dismissed.
It is evident from the above that the population of the village is the criteria and not with reference to Gram Panchayat. Similarly, under Rule 16(9) of the Rules, the licence fee is determined on the basis of population and keeping that in view, Rule 16(9) of the Rules cannot have any relevance with regard to issue of relocation.
In the facts and circumstances of the case, I am therefore unable to state as to how the petitioner could successfully challenge the impugned Notification based on the contention relating to Rule 16(9) of the Rules. The 2nd contention is, therefore, also liable to be rejected and is accordingly rejected.
Accordingly, the writ petition is dismissed. No order as to costs.
The miscellaneous petitions, if any, pending in this writ petition shall stand closed.
_______________________ VILAS V.AFZULPURKAR, J Date: 27-12-2014