Uttarakhand High Court
Gurvinder Singh Chadha vs Chief Secretary State Of Uttarakhand ... on 6 August, 2015
Bench: K.M. Joseph, V.K. Bist
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Writ Petition (PIL) No. 73 of 2015
Gurvinder Singh Chadha ......... Petitioner
Versus
Chief Secretary, State of Uttarakhand
and others ......... Respondents
Present: Mr. Manoj Tiwari, Senior Advocate assisted by Mr. Paresh
Tripathi, Mr. C.K. Sharma, Advocates for the petitioner.
Mr. U.K. Uniyal, Advocate General assisted by Mr. Subhash
Upadhyay, Chief Standing Counsel for the State of
Uttarakhand/respondent Nos. 1 & 2.
Mr. Sanmdeep Kothari, Advocate for respondent Nos. 4 & 5.
Writ Petition (M/S) No. 988 of 2015
Bansi Lal Kakkar ......... Petitioner
Versus
Chief Secretary, State of Uttarakhand
and others ......... Respondents
Present: Mr. Sharad Sharma, Senior Advocate assisted by Ms. Indu
Sharma, Advocate for the petitioner.
Mr. U.K. Uniyal, Advocate General assisted by Mr. Subhash
Upadhyay, Chief Standing Counsel for the State of
Uttarakhand/respondent Nos. 1 to 3.
Mr. A.S. Rawat, Senior Advocate assisted by Mr. Vipul
Sharma, Advocate for respondent No.2/Mandi Parishad
Uttarakhand.
Mr. Sanmdeep Kothari, Advocate for respondent Nos. 5 & 6.
AND
Writ Petition (M/S) No. 1062 of 2015
Blue Sprits India Pvt. Ltd. ......... Petitioner
Versus
State of Uttarakhand and others ......... Respondents
Present: Mr. Rakesh Thapliyal, Advocate for the petitioner.
Mr. U.K. Uniyal, Advocate General assisted by Mr. Subhash
Upadhyay, Chief Standing Counsel for the State of
Uttarakhand/respondent Nos. 1 to 3.
Mr. Sanmdeep Kothari, Advocate for respondent Nos. 4 & 5.
Mr. A.S. Rawat, Senior Advocate assisted by Mr. Vipul
Sharma, Advocate for respondent NNo.6/Mandi Parishad.
2
Coram : Hon'ble K.M. Joseph, C.J.
Hon'ble V.K. Bist, J.
JUDGMENT
Date: 6th August, 2015 K.M. Joseph, C.J. (Oral) These three writ petitions being connected, we are disposing of the same by a common judgment.
2. Writ Petition No. 73 of 2015 is filed as a Public Interest Litigation. Writ Petition (M/S) No. 988 of 2015 is filed by a person, who claims to possess an FL-5 licence under the U.P. Excise Act, 1910. Writ Petition (M/S) 1062 of 2015 is filed by a partnership Firm and even though in the body of the writ petition, there is no pleading as to what is the interest of the petitioner, it transpires that the petitioner has an FL-5 licence, according to the oral submission of Shri Rakesh Thapliyal learned counsel.
3. At once we may notice that the reliefs sought in the writ petitions are as follows :-
Writ Petition (PIL) No.73 of 2015 "I. Issue a writ, order or direction in the nature of certiorari quashing the order dated 27.04.2015 issued by the State Government (Contained as Annexure no.2 to this petition) after summoning the original of the same from the respondents.
II. Issue a writ order or direction in the nature of mandamus restraining the respondents from interfering in the functioning of the Mandi Parishad, created for a noble purpose vide Uttarakhand Act no. 9 of 2011."
Writ Petition (M/S) No. 988 of 2015 "I Issue a writ, order or direction in the nature of certiorari quashing the order dated 27.04.2015 passed by the respondent no.1 (contained in Annexure no.1 to this petition) after summoning the original of the same from the respondents.
I(a) To issue a writ, order or direction in the nature of certiorari quashing the notification dated 30.04.2015 3 issued by the Excise Commissioner, State of Uttarakhand (contained as annexure no.3 to the writ petition)."
Writ Petition (M/S) No. 988 of 2015 "A. Issue a writ, order or direction in the nature of certiorari quashing the Government Order dated 27.04.2015 (Annexure No.4 to the writ petition).
(A-i) To issue a writ, order or direction in the nature of certiorari quashing the notification dated 30.04.2015 issued by the Excise Commissioner, State of Uttarakhand (contained as annexure no.4 to the writ petition) after summoning the original of the same from the respondents.
B. Issue a writ, order or direction in the nature of mandamus commanding the respondents to issue FL-2 licence strictly as per pre-existing excise policy."
4. Pleadings have been exchanged and we heard the learned Senior Counsel for the petitioner appearing in Writ Petition (M/S) No. 988 of 2015 Shri Sharad Sharma, Shri Manoj Tiwari, learned Senior Counsel appearing for the petitioner alongwith Shri Paresh Tripathi in Writ Petition (M/S) No. 73 of 2015 on behalf of the Public Interest Litigant and also Shri Rakesh Thapliyal, learned counsel appearing on behalf of the petitioner in Writ Petition (M/S) No. 1062 of 2015. Besides we heard the learned Advocate General on behalf of the State and Shri A.S. Rawat, learned Senior Counsel for Mandi Parishad.
5. In the year 2015, it would appear that the Government of Uttarakhand has taken a decision that, for a period of 5 years, FL-2 (full right to vend in wholesale) licence will be given to the Mandi Parishads. It is relevant to run through what transpired and which, according to the petitioners, has occasioned the filing of the writ petitions. On 31.03.2015, purportedly acting under Section 40 of the United Provinces Excise Act, 1910 (hereinafter referred to as the "Excise Act"), Government of Uttarakhand framed the Rules.
4From the English translation provided to us, we find that the preamble would appear to suggest that it is for regulating retail sale of country / foreign liquor and beer in the State of Uttarakhand that the Rules were made. It is the common case that Rules 1 to 23, in fact, pertained to regulating of retail sale of country / foreign liquor in India. Rule 24, however, provided as follows:
"24. Whole sale licence of foreign liquor / beer / wine (FL-2/2B/2S/2W): New FL-2 arrangement shall be brought-in within one month and, till then, the old arrangement shall continue as it is."
6. Thereafter, we find the next document to refer to is Communication dated 27.04.2015 issued by the Chief Secretary to:
(1) Excise Commissioner; (2) Director, Mandi; and (3) Managing Director, Kumaon Mandal Vikas Nigam as well as Garhwal Mandal Vikas Nigam. It reads as follows:
"1. The Excise Department will issue the FL2 licence to the Mandi Parishad and simultaneously the Garhwal / Kumaon Mandal Vikas Nigam will open the branch of sub FL2 compulsorily in each district of their respective Garhwal and Kumaon divisons. The annual licence fee of FL2 for the whole state will be Rs. 1.25 crore.
2. The FL2 licence will be granted for a period of five years.
3. The Mandi Parishad will procure all brands in each FL2 and will authorise the Garhwal Mandal Vikas Nigam and Kumaon Mandal Vikas Nigam to run sub-FL2 in all districts of Garhwal Division and Kumaon Division respectively.
4. The Mandi Parishad can make any arrangement for it's efficient and effective functioning in future which will be conducive for it's business prospects.
5. The liquor from bonds (from BWFL2 to FL2) will be transported by the Mandi Parishad and Garhwal / Kumaon Mandal Vikas Nigam will transport the liquor for it's sub FL2s in each 7 districts of Garhwal Division and 6 districts of Kumaon Division respectively.
6. The total receipts of revenue at sub FL2 in the district will be deposited in a separate account and respective 5 Mandal Vikas Nigams will deposit the revenue in accounts of Mandi Parishad without any delay. After this Mandi Parishad will defray the expenses of concerned Mandal Vikas Nigam. From the above settlement of FL2 if there is any income to Garhwal Mandal Vikas Nigam after the all expenses in all 7 districts, 75% of the income will go to Mandi Parishad and 25% to Garhwal Mandal Vikas Nigam. Similarly if there is any income to Kumaon Mandal Vikas Nigam after all expenses in all 6 districts, 75% of the income will go to Mandi Parishad and 25% to Kumaon Mandal Vikas Nigam. The above income will be utilized in the promotion of agriculture / industrial / horticulture / fruits processing and infrastructure development by Mandi Parishad.
7. In order to promote the fruits production and fruits processing industries in hill areas, Mandi Parishad will establish two vintneries of 10 kilo capacity one in Garhwal Division and one in Kumaon Division within one year from the settlement of FL2 whereas 70% of fruits of the concerned local area will be utilized by the local vintnery and vintnery will be established in joint venture / PPP mode.
8. Mandi Parishad will have to install IP Adex cameras at FL2 premises within 15 days. In non-compliance of it will amount to the cancellation of FL2 licence for which the licencee will not be entitled for any compensation.
9. Garhwal / Kumaon Mandal Vikas Nigam will have to make arrangement for the proper storage of liquor at sub FL2s.
10. Mandi Parishad will have to maintain the minimum stock of all brands of foreign liquor / beer / wine at FL2 as fixed by the Additional Excise Commissioner (Licensing) and at sub FL2s as fixed by the Collector of the concerned district.
11. The sub-FL2 licensee of each district will have to ensure the every demanded brands by the retailer foreign liquor licensee of the concerned district. If the sub-FL2 licensee fails to make available the required brands of retailer licensee of foreign liquor, the retail licensee will file the complaint before the Collector of the concerned district. The Collector of the district will dispose off the written complaint within 3 days. The any aggrieved party will file the appeal against the order of the Collector before the Excise Commissioner / Govt. within 15 days according to rules.
12. The sub-FL2 of each district will ensure the availability of all brands of foreign liquor. To control 6 the illegal sale / smuggling of liquor, only foreign liquor in bottles with the approved holograms by the excise department will be permitted for sale and the foreign liquor will be sold at the fixed MRP (Maximum Retail Price). On detection of any irregularity the strict action will be taken by the excise department according to the rules.
13. The excise department will adjust / release the security amount of the LF5 licensees after obtaining the NOC from the sub-FL2 licensee of the concerned district.
14. Mandi Parishad and Garhwal Mandal Vikas Nigam / Kumaon Mandal Vikas Nigam will have to comply strictly with all provisions of the Excise Act 1910 and all directions / instructions issued from the Govt. / the Excise Commissioner from time to time."
7. Thereafter, the Excise Commissioner, in purported exercise of his powers under Section 41 of the Excise Act, purported to make the Rules, which we need not refer to, as they are reproduction of the contents of the Communication dated 27.04.2015 issued by the Chief Secretary. Having regard to the statutory / executive policy orders, which we have referred to, time is now ripe for us to notice the case of the petitioners.
8. As far as Writ Petition (PIL) No. 73 of 2015 is concerned, the petitioner therein claims to be a public interest litigant. According to the learned counsel appearing on behalf of the petitioner, what has been purported to be done by the Government is palpably illegal. He would draw our attention to the provisions of the Uttarakhand Agricultural Produce Marketing (Development and Regulation) Act, 2011 (hereinafter referred to as the "Mandi Act"). He would point out, with reference to the definition of the word "agricultural produce"; the section under which Market Committee is created; the provisions under which the functions of the Mandi Parishad are delineated; that what the Government of Uttarakhand is purporting to do is to empower or ask the Mandi Parishad to do something, which is ultra-vires its powers and functions under the Mandi Act. In other words, in 7 short, the case is that Mandi Parishad has been created with a particular object, which is to create bodies for facilitating the trade in agricultural produce in various market areas. According to the learned counsel, the Mandi Act does not contemplate the Mandi Parishad dealing in liquor. According to him, therefore, the public interest litigation is generated on considering the fact that the Government is compelling the Mandi Parishad to make a foray into what would be described as forbidden for it. Asking it to do something, which the Legislature has not permitted it to do, amounts to permitting it to do something which is ultra-vires and is illegal.
9. Out of deference to the contentions of the parties, many of which are common to three petitions, we would refer to some of the provisions of the Mandi Act. Section 2(i) defines "agricultural produce" as under:
"2(i) "Agricultural Produce" means all produce and commodities, whether processed or unprocessed, of agriculture, horticulture, floriculture, viticulture, apiculture, sericulture, pisciculture, animal husbandry, forest produce, as are specified in the Schedule or declared by the State Government, by notification, from time to time, and includes admixture of two or more of such products, processed in form and further includes Gur, Rab, Shakkar, Khandsari and Jaggery."
"Board" is defined under Section 2(iv) as meaning the Uttarakhand State Agricultural Marketing Board, established under Section 47 of the Act.
Section 2(v) defines "business" as follows:
"(v) "Business" means purchase, sale, processing, storage, transportation or connected activities of agricultural produce."8
10. There is reference to "sale" under Section 2(xliv) and "retail sale" is defined under Section 2(xlii). Section 4 provides for the establishment of a market. Section 16 provides for the constitution of the market committee. It reads as under:
"16. Establishment of Market Committee and its Incorporation:
(1) For every Market Area there shall be a Committee to be called the Market Committee which shall have jurisdiction over entire Market Area. (2) Every Market Committee shall be a body corporate by such name, as the State Government may, by notification, specify having perpetual succession and a common seal and shall sue and be said in its corporate name and shall, subject to such restriction as are imposed by or under this Act, be competent to contract and acquire, lease, sell or otherwise transfer any property and to do all other things necessary for the purpose for which it is established.
(3) Notwithstanding anything for the time being in force, every market committee shall be deemed to be a local authority for the purposes of The Land Acquisition Act, 1894 (Act No. 1 of 1894) and any other law for the time being in force;
Provided that the Committee shall not transfer any immovable property except in accordance with a resolution duly passed in any of its meeting by a majority of not less than three-fourth of the total number of its members and with the previous approval in writing of the Board."
Section 26 delineates the functions and duties of the Committee. Section 27 provides for the powers of the Committee. It, inter alia, provides as follows:
"(i) to exercise such other powers, as may be prescribed by the State Government from time to time."
11. Thereafter, we may pass on to Section 47, which provides for the creation of the Parishad or the Board, to which FL- 2 licence has been granted by the State. Section 47 reads as follows:
9"47. Establishment of the Board:
(1) The State Government shall, by notification in the official gazette, and with effect from a date to be specified therein, constitute a Board by the name of the Uttarakhand Agricultural Produce Marketing Board which shall have its headquarter at Rudrapur (Uddham Singh Nagar).
(2) The Board shall be a body corporate by the said name having perpetual succession and a common seal and shall sue or be sued by the said name and acquire, hold and dispose of property and enter into contracts. (3) The Board shall, for all purposes, be deemed to be a local authority."
12. The Chairman and members of the Board are to be appointed by the State Government under Section 48. It is to be noted that the Chairman is the Agriculture Minister of the State or a person appointed by the State Government under special circumstances. Thereafter, it provides for maximum of five members out of the nominated producers, one member out of the nominated traders, one member out of the nominated commission agents and maximum five representatives again appointed by the State Government. They are to be from various fields. Ex-officio members, it is relevant to notice, consist of Principal Secretary and Commissioner, Forest and Rural Development, who shall, in the absence of Chairman, preside over the meeting of the Board; Secretaries in the Ministries of Agriculture, Finance, Food and Civil Supply, Horticulture, Animal Husbandry and Cooperatives; the Agriculture Marketing Advisor to the Government of India; the Managing Director of the Board, who shall be ex-officio secretary of the Board; the Director, Agriculture; the Director, Horticulture; and the Registrar, Cooperative Societies, Uttarakhand.
Section 57 provides as follows:
"57. Directions on questions of Policy:
(1) In the discharge of its functions, the Board shall be guided by such directions on questions of policy, as may be given to it by the State Government.10
(2) If any question arises whether any matter is or is not a matter as respects which the State Government may issue a direction under sub section (1), the decision of the State Government shall be final."
Section 69 reads as follows:
"69. Powers of the Board:
The Board shall, subject to the provisions of this Act, perform the following functions and shall have power to do such thing as may be necessary or expedient or carrying out these functions:-
(i) coordination of the working of the Market Committees and other affairs thereof, including programs undertaken by such Market Committees for the Development of Markets and Market Areas;
(ii) undertake the State level planning of the development of Agricultural Produce Markets;
(iii) to make the necessary policies with a view to ensure efficiency in the working of Mandi Samiti;
(iv) to make regulations, consistent with this Act and Rules made thereunder, for Marketing affairs;
(v) to approve proposals for selection of new sites by the Market Committees for the development of Market;
(vi) to approve proposal for constructing infrastructural facilities in the Market Area;
(vii) to supervise and guide the Market Committee in the preparation of plans and estimates of construction programme, undertaken by the Market Committee;
(viii) to supervise all works, which are chargeable to the Board's fund;
(ix) to publish annually at the close of the year, its progress report, balance sheet, and statement of assets and liabilities and send copies to each member of the Board as well as to the State Government;
(x) to make necessary arrangements for propaganda and publicity on matters related to regulated marketing of agricultural produce;
(xi) to provide facilities for the training of officers and servants of the Board as well as Market Committee;
(xii) to prepare and adopt budget for the ensuing year;
(xiii) to make subventions and loans to Market Committees for the purposes of this Act, on such terms and conditions as the Board may determine;
(xiv) to do such other things as may be of general interest to Market Committees or considered necessary for the efficient functioning of the Board, as may be specified from time to time by the State Government;11
(xv) to arrange or organize seminars, workshops, exhibitions for encouragement of marketing of Agricultural Products;
(xvi) to establish and promote partnership between private and public sectors in the management of Market Committees;
(xvii) to carry out and promote value addition alongwith agri-processing activities;
(xviii) to establish separate business expansion chambers for trding, technology and expansion of services and transfer thereof and carryout necessary management for regulated Marketing and development of Marketing and publicity of allied matters; (xix) to promote and encourage Electronic trading, establish regulatory procedure of Market Committee infrastructure and allied activities and carryout necessary steps; and (xx) to consolidate, gradation and standardization of notified agricultural produce."
13. This, in our view, would suffice to draw the framework of the statute, which would be relevant for the purposes of resolution of the dispute raised.
14. Thereafter, it becomes necessary to pass on to the provisions of the U.P. Excise Act. Therein, Section 24-A provides as follows:
"24-A. Grant of exclusive or other privilege in respect of foreign liquor. - (1) Subject to the provisions of Section 31, the Excise Commissioner may grant to any person a licence or licences for the exclusive or other privilege, -
(a) of manufacturing or of supply by wholesale, or of both and selling by retail; or
(b) of manufacturing or of supplying by wholesale, or of both and selling by retail; or
(c) of selling by wholesale (to wholesale or retail vendors); or
(d) of selling by retail at shops (for consumption 'off' the premises only, any foreign liquor in any locality.
(2) The grant of licence or licences under clause (d) of sub-section (1) in relation to any locality shall be without prejudice to the grant of licences for the retail sale of foreign 12 liquor in the same locality in hotels and restaurants for consumption on their premises.
(3) Where more licences than one are proposed to be granted under clause (d) of sub-section (1) in relation to any locality for the same period, advance intimation of the proposal shall be given to the prospective applicants for every such licence.
(4) The provisions of Section 25, and proviso to Section 39 shall apply in relation to the grant of a licence for an exclusive or other privilege under this section as they apply in respect of the grant of a licence for an exclusive privilege under Section 24."
Section 40 provides for the power of rulemaking in favour of the government. It provides as follows:
"40. Power of State Government to make rules. - (1) The State Government may make rules for the purpose of carrying out the provisions of this Act or other law for the time being in force relating to the excise revenue:
Provided that the Uttar Pradesh Licensing Under the Surcharge Fee System Rules, 1968, made by the Excise Commissioner, Uttar Pradesh, with the previous sanction of the State Government, as amended by the Excise Commissioner, Uttar Pradesh, from time to time, before the commencement of this Act, shall, until altered or repealed by the State Government by rules made under this section, be deemed to be and always to have been as valid and effective as if the said rules were duly made by the State Government under this section.
(2) In particular and without prejudice to the generality of the foregoing provision, the State Government may make rules -
(a) regulating the delegation of any powers by the Excise Commissioner or Collector under Section 10(2)(h);
(b) prescribing the powers and duties of officers of the Excise Department;
(c) prescribing the manner in which appeals or revisions shall be presented and the procedure for dealing with such appeals and revisions;
(d) regulating the import, export, transport or possession of any intoxicant;
(e) regulating the periods and localities for which, and the persons to whom, licences for the vend by wholesale or by retail of any intoxicant may be granted;13
(f) prescribing the procedure to be followed and the matters to be ascertained before any licence for such vend is granted for any locality;
(g) for the prohibition of the sale of any intoxicant to any person or class of persons;
(h) for the grant of expenses to witnesses and compensation for loss of time to persons released under Section 49 on the ground that they have been improperly arrested and to persons charged before a Magistrate with offences punishable under the Act but acquitted;
(i) regulating the power of excise officers to summon witnesses from a distance under the provisions of Section 49;
(j) for declaring the excise officers to whom, and the manner in which, information or aid should be given under Section 56;
(k) for the prohibition of the employment by the licence holder of any person or class of persons to assist in his business in any capacity whatsoever;
(l) for the prevention of drunkenness, gambling or disorderly conduct in or near any licensed premises and the meeting or remaining of persons of bad character in such premises;'
(m) for the grant of rewards to officials, officers or informers by the Collector out of and upto fifty per cent of composition fee and by the Magistrate trying the case, out of and upto fifty per cent of fine recovered under the Act."
Section 41 provides for the power of rulemaking in favour of the Excise Commissioner. It provides as follows:
"41. Power of Excise Commissioner to make rules. - (1) The Excise Commissioner subject to the previous sanction of the State Government may make rules -
(a) regulating the manufacture, supply, storage or sale of any intoxicant including -
(i) the erection, alteration, repair, inspection, supervision, management and control of any place for the manufacture, supply, storage or sale of such article and the fittings, implements and apparatus to be maintained therein;
(ii) the cultivation of the hemp plant (Cannabis Sativa);14
(iii) the collection of portions of the hemp plant (Cannabis Sativa) from which any intoxicating drug can be manufactured and the manufacture of any intoxicating drug therefrom;
(b) regulating the deposit of any intoxicant in a warehouse and the removal of any intoxicant from any such warehouse or from any distillery, brewery or manufactory;
(c) prescribing the scale of fees or manner of fixing the fees payable for any licence, permit or pass including any consideration for the grant of any exclusive or other privilege granted under Section 24 or Section 24-
A or for storing of any intoxicant:
Provided that nothing contained in this clause shall be construed to prevent the State Government from levying by notification made from time to time, any fee, including vend fee, as part of consideration for the granting of any such privilege."
Section 77 reads as follows:
"77. Publication of rules and notifications. - All rules made and notifications issued under the Act shall be published in the Official Gazette, and shall have effect as if enacted in this Act from the date of such publication or from such other date as may be specified in that behalf;
Provided that notwithstanding anything to the contrary contained in this section or in any judgment, decree or order, the Notification Nos. 3514-E/XIII-331-78 and 1227-E/XIII- 332-78, both dated April 17, 1978, made by the State Government in exercise of the powers under Sections 28 and 29 of the amendments made by the aforesaid notifications shall have effect and be deemed always to have effect on and from April 1, 1978:
Provided further that notwithstanding anything to the contrary contained in this section, or in any contract, judgment, decree or order, the Notification No. 3842-E/XIII- 512-83, dated May 25, 1983, made by the State Government in exercise of the powers under Section 30 shall have effect and be deemed always to have effect on and from April 1, 1983."
"Excise revenue" is defined in Section 3(1) of the Act as under:
(1) "excise revenue" means revenue derived or derivable from any duty, fee, tax, fine (other than a fine imposed 15 by a Court of law), or confiscation imposed or ordered under the provisions of this Act, or any other law for the time being in force relating to liquor or intoxicating drugs;"
Section 10 provides for the administration of Excise Department. It is relevant to notice that Section 10(2)(f) provides that the State Government may, by notification applicable to whole of Uttar Pradesh, which, in the context of the U.P. Reorganisation Act, 2000, be referred as Uttarakhand, or to any district or local area comprised therein, delegate to the Excise Commissioner all or any of its powers under the Act, except the power conferred by Section 40 to make rules.
15. Having set-out the framework of the statutory provisions, which has been the context in which the arguments were canvassed before us, we may now proceed to discuss the arguments as such.
16. The learned counsel for the petitioner in the Public Interest Litigation would submit that it is the concern of the public interest litigant that the Government is seeking to clothe the Parishad with duties, which are not contemplated under the Mandi Act. Furthermore, it is the contention of the public interest litigant that Section 40(2)(e) of the Excise Act provides for the rule-making powers with the Government of Uttarakhand in regard to periods and the persons to whom wholesale or retail licence is to be granted. He would point out that no rule has been made by the Government under Section 40 of the Excise Act; instead, the rule- making power of the Government has been usurped by the Excise Commissioner purporting to act under Section 41 of the Excise Act and, therefore, the Rules made by the Excise Commissioner are ultra-vires being contrary to, both, the mandate of Section 40 as also Section 10, which proscribes delegation of the rule-making power of the Government under Section 40 to any other authority 16 including the Excise Commissioner. It is submitted that, running as a golden thread through the Mandi Act, is an idea or the concept that the Committee and the Board are created for the purpose of regulating trade in agricultural produce. Liquor cannot be treated as agricultural produce. He would further submit that sub-FL2 licence, which is un-contemplated in the Excise Act, is purported to be distributed in favour of the Garhwal Mandal Vikas Nigam and Kumaon Mandal Vikas Nigam. Therefore, there is a long list of illegalities, which have been committed by the State, runs the argument of the petitioner.
17. Mr. Sharad Sharma, learned Senior Counsel for the petitioner in Writ Petition (M/S) No. 988 of 2015, who claims to be a FL5 licence-holder, would also submit that the Mandi Act does not contemplate empowering the Mandi Parishad with the right to carry out trade in liquor, as trading in liquor is not one of the functions or powers of the Mandi Parishad. Therefore, it is illegal. He would also submit that, as far as the rule-making power of the Government and the Excise Commissioner under Sections 40 and 41 of the Excise Act respectively are concerned, the power to make rules, indeed, vests with the Excise Commissioner and not with the Government in the matter. For the purpose of revenue alone, the State Government has the power to frame rules and, for the purpose of sale, the Excise Commissioner can make rules. He would also draw our attention to Section 77 of the Excise Act to contend that the rules have not been published in the gazette. He would submit that the petitioner has locus standi in the matter, as the petitioner is having an FL5 licence and the fact that prices have been doubled by the authorities to whom the licences have been purported to be given by the State, thereby inflicting him with injury by way of compelling him to pay higher price for lifting the stock from the licence-holders and that is sufficient to clothe him with locus standi to challenge the order/rules.
1718 Shri Rakesh Thapliyal, learned counsel for the petitioner appearing in Writ Petition (M/S) No. 1062 of 2015 would submit as we have already noted that the petitioner is having a FL-5 licence. He would also submit that it is illegal and further he would submit that the rules which were made on 31.03.2015 contemplated that they will remain in existence for a period of one year, however, by an executive order the Government has purported to breathe life into the mechanism for a period of five years. He would submit that if the previous arrangement had continued, petitioner would have also participated in the process by which the rights were settled and it deprives him of the legal right and, therefore, he has locus standi.
19. Per contra, the learned Advocate General would defend the stand of the official respondents in the following way:
He would submit that it is settled law that there is no fundamental right to carry on trade in liquor under Article 19 of the Constitution of India. Secondly, he would submit that the Court would interfere in litigation relating to liquor only if it is established that there is a violation of Article 14 of the Constitution of India. There must be arbitrary State action. According to him, such a situation would arise only when Government parts with its privilege in favour of a party. He would submit that the present case involved a situation where the Government is seeking to trade through its own agencies and it is not a case where it parts with its privilege. He would highlight the circumstances in which the Government decided to evolve this policy. He would point out that it has been the experience of the Government that in the matter of wholesale trade in liquor, there is heavy competition. Prices were being quoted which were very high/astronomical. He poses a question whether on that ground it was reasonable to accept that they could make profit if they carried business in a legal way. According to him, what was happening was a lot of spurious trade 18 was going on by way of smuggling of liquor and more importantly, according to him, liquor was passing from the warehouses without collecting revenue due to the Government. The quality of liquor is also adversely commented on by the Advocate General. On the other hand, he poses to us a rosy picture, which would be achieved by the fulfillment of the policy which is put in place in 2015. He would submit that by virtue of giving FL-2 licence in favour of the Mandi Parishad, as 80% of the State of Uttarakhand consists of hills, Uttarakhand would undergo a sea change for the better. He pointed out that there would be development of roads. The Mandi Parishad is blessed with godowns, it has all the facilities for carrying out the trade. It is open to the State in its wisdom to give the power to any agency of its own and most importantly the revenue, which would be generated, would go in to the coffers of the Board and Mandi Committees, which, in turn, would enable it to better discharge its duties and functions under the Mandi Act. In this context, he emphasized Section 69 (xiv), which we have already extracted. He would also harp on Section 57 of the Act, under which it is open to the Government to issue policy directions which are binding on the Board. As far as the question of locus is concerned, he would submit that none of the petitioners have locus. He would submit that the Public Interest Litigation cannot fall within the categories of Public Interest Litigation as one would understand it in law. He would submit that Public Interest is better achieved by the rejection of the case of the petitioner than by countenancing it for the reasons which he has already mentioned. Regarding Sections 40 & 41 of the Excise Act and the argument of Shri Manoj Tiwari and Shri Paresh Tripathi, appearing on behalf of the Public Interest Litigant he would submit that actually Rule 24 in the Rules made on 31.03.2015 sets out that new policy will be put in place in regard to FL-2. He would submit that actually when rules are made under Section 41, it is not as if the Excise Commissioner is acting as an independent body as it is inherent 19 from the provisions of Section 41 that it can be made only with the previous sanction of the Government. Therefore, when the Government has applied its mind and gave previous sanction and Government has made the rules on 31.03.2015 and what is more Government followed it up by the executive decision on 27.04.2015, he would submit that the requirements of law stands satisfied. He would submit that at any rate the Government order dated 27.04.2015 must be treated as statutory rules, put in place pursuant to the policy decision it took for which the foundations were laid in Rule 24 in the Rules dated 31.03.2015.
20. As regards FL-2 (sub) Section 26 of the Excise Act is sought to be relied on. It reads as follows :-
"26. Grantee of exclusive privilege may let or assign. - Subject top the conditions of his licence the grantee of any exclusive privilege may let or assign the whole, or any portion of his privilege; but no lessee or assignee of such privilege or portion of a privilege shall exercise any right as such unless and until a licence has been granted to him by the Excise Commissioner on application made by the grantee.
21. In regard to the other petitioners also, the learned Advocate General would submit that the petitioners do not have any locus and the Court should not interfere at their instance.
22. Shri A.S. Rawat, learned Senior Advocate for the Mandi Parishad would also adopt the arguments of the learned Advocate General and would emphasize the benefits which would flow from giving the right to trade in liquor to the Mandi Parishad in conjunction with the Garhwal Mandal Vikas Nigam and Kumaon Mandal Vikas Nigam and latter are also the Government agencies.
20FINDINGS
23. The first question we must consider is whether we should interfere in the Public Interest Litigation which has been filed. Public Interest Litigation which began in the 80's has come a long way. The superior Courts in India have earned accolades for evolving this branch of litigation the world over. But equally it has also in due course come in for considerable criticism also. Suffice it for the purposes of our case that we refer to a judgment of the Hon'ble Apex Court, reported in (2003) 7 SCC 546. Therein a Bench of three-Judges of the Apex Court referring to the decision in BALCO Employees' Union [(2002) 2 SSC 333] has held as follows:
45. Pro bono publico constituted a significant state in the present day judicial system. They, however, provided the dockets with much greater responsibility for rendering the concept of justice available to the disadvantaged sections of the society.
Public interest litigation has come to stay and its necessity cannot be overemphasized. The courts evolved a jurisprudence of compassion. Procedural propriety was to move over giving place to substantive concerns of the deprivation of rights. The rule of locus standi was diluted. The Court in place of disinterested and dispassionate adjudicator became active participant in the dispensation of justice.
46. But with the passage of time, things started taking different shapes. The process was sometimes abused. Proceedings were initiated in the name of public interest litigation for ventilating private disputes. Some petitions were publicity oriented.
47. A balance was, therefore, required to be struck. The Courts started exercising greater care and caution in the matter of exercise of jurisdiction of public interest litigation.
50. The principles evolved by this Court in this behalf may be suitably summarized as under :
(i) The Court in exercise of powers under Article 32 and Article 226 of the Constitution of India can entertain a petition filed by any interested person in the welfare of the people who is in a disadvantaged position and, thus, not in a position to knock the doors of the Court.21
The Court is constitutionally bound to protect the fundamental rights of such disadvantaged people so as to direct the State to fulfill its constitutional promises. (See S.P. Gupta Vs. Union of India [1981 (supp) SCC 87], People's Union for Democratic Rights and Others Vs. Union of India (1982) 2 SCC 494, Bandhua Mukti Morcha Vs. Union of India and Others (1984) 3 SCC 161 and Janata Dal Vs. H.S. Chowdhary and Others (1992) 4 SCC
305)
(ii) Issues of public importance, enforcement of fundamental rights of large number of public vis-Ã -vis the constitutional duties and functions of the State, if raised, the Court treat a letter or a telegram as a public interest litigation upon relaxing procedural laws as also the law relating to pleadings. (See Charles Sobraj Vs. Supdt. Central Jail, Tihar, New Delhi (1978) 4 SCC 104 and Hussainara Khatoon and Others Vs. Home Secretary, State of Bihar (1980) 1 SCC 81).
(iii) Whenever injustice is meted out to a large number of people, the Court will not hesitate in stepping in. Articles 14 and 21 of the Constitution of India as well as the International Conventions on Human Rights provide for reasonable and fair trial.
In Mrs. Mankeka Sanjay Gandhi and Another Vs. Miss Rani Jethmalani, AIR 1979 SC 468, it was held:
"2. Assurance of a fair trial is the first imperative of the dispensation of justice and the central criterion for the court to consider when a motion for transfer is made is not the hypersensitivity or relative convenience of a party or easy availability of legal services or like mini-grievances. Something more substantial, more compelling, more imperiling, from the point of view of public justice and its attendant, environment, is necessitous if the Court is to exercise its power of transfer. This is the cardinal principle although the circumstances may be myriad and vary from case to case. We have to test the petitioner's grounds on this touch-stone bearing in mind the rule that normally the complainant has the right to choose any court having jurisdiction and the accused cannot dictate where the case against him should be tried. Even so, the process of justice should not harass the parties and from that angle the court may weigh the circumstances."
(See also Dwarka Prasad Agarwal (D) By LRs. and Anr. Vs. B.D. Agarwal and Ors. 2003 (5) SCALE 138).
(iv) The common rule of locus standi is relaxed so as to enable the Court to look into the grievances complained on behalf of the poor, depraved, illiterate and the disabled 22 who cannot vindicate the legal wrong or legal injury caused to them for any violation of any constitutional or legal right. (See Fertilizer Corporation Kamagar Union Vs. Union of India, AIR 1981 SC 344, S.P. Gupta (supra), People's Union for Democratic Rights (supra), Dr. D.C. Wadhwa Vs. State of Bihar (1987) 1 SCC 378 and Balco Employees' Union (Regd.) Vs. Union of India and Others [(2002) 2 SCC 333]).
(v) When the Court is prima facie satisfied about variation of any constitutional right of a group of people belonging to the disadvantaged category, it may not allow the State or the Government from raising the question as to the maintainability of the petition. (See Bandhua Mukti Morcha (supra)).
(vi) Although procedural laws apply on PIL cases but the question as to whether the principles of res judicata or principles analogous thereto would apply depend on the nature of the petition as also facts and circumstances of the case. (See Rural Litigation and Entitlement Kendra Vs. State of U.P. 1989 Supp (1) SCC 504 and Forward Construction Co. and Others Vs. Prabhat Mandal (Regd.), Andheri and others (1986) 1 SCC 100).
(vii) The dispute between two warring groups purely in the realm of private law would not be allowed to be agitated as a public interest litigation. (See Ramsharan Autyanuprasi and Another Vs. Union of India and Others 1989 Supp (1) SCC 251).
(viii) However, in an appropriate case, although the petitioner might have moved a Court in his private interest and for redressal of the personal grievances, the Court in furtherance of the public interest may treat it necessary to enquire into the state of affairs of the subject of litigation in the interest of justice. (See Shivajirao Nilangekar Patil Vs. Dr. Mahesh Madhav Gosavi and Others (1987) 1 SCC
227).
(ix) The Court in special situations may appoint Commission, or other bodies for the purpose of investigating into the allegations and finding out facts. It may also direct management of a public institution taken over by such committee. (See Bandhua Mukti Morcha (supra), Rakesh Chandra Narayan Vs. State of Bihar 1989 Supp (1) SCC 644 and A.P. Pollution Control Board Vs. M.V. Nayudu (1999) 2 SCC 718).
In Sachidanand Pandey and Another Vs. State of West Bengal and Others [(1987) 2 SCC 295], this Court held:
23"61. It is only when courts are apprised of gross violation of fundamental rights by a group or a class action on when basic human rights are invaded or when there are complaints of such acts as shock the judicial conscience that the courts, especially this Court, should leave aside procedural shackles and hear such petitions and extend its jurisdiction under all available provisions for remedying the hardships and miseries of the needy, the underdog and the neglected. I will be second to none in extending help when such is required. But this does mean that the doors of this Court are always open for anyone to walk in. It is necessary to have some self-imposed restraint on public interest litigants."
In Janata Dal Vs. H.S. Chowdhary and Others (1992) 4 SCC 305, this Court opined :
"109. It is thus clear that only a person acting bona fide and having sufficient interest in the proceeding of PIL will along have a locus standi and can approach the court to wipe out the tears of the poor and needy, suffering from violation of their fundamental rights, but not a person for personal gain or private profit or political motive or any oblique consideration. Similarly, a vexatious petition under the colour of PIL brought before the court for vindicating any personal grievance, deserves rejection at the threshold."
The Court will not ordinarily transgress into a policy. It shall also take utmost care not to transgress its jurisdiction while purporting to protect the rights of the people from being violated.
In Narmada Bachao Andolan Vs. Union of India & Others [(2000) 10 SCC 664], it was held:
"229. It is now well settled that the courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy-making process and the courts are ill-equipped to adjudicate on a policy decision so undertaken. The court, no doubt, has a duty to see that in the undertaking of a decision, no law is violated and people's fundamental rights are not transgressed upon except to the extent permissible under the Constitution. Even then any challenge to such a policy decision must be before the execution of the project is undertaken. Any delay in the execution of the project means overrun in costs and the decision to undertake a project, if challenged after its execution has commenced, should be thrown out at the very threshold on the ground of latches if the petitioner had the knowledge of such a 24 decision and could have approached the court at that time. Just because a petition is termed as a PIL does not mean that ordinary principles applicable to litigation will not apply. Latches is one of them.
* * *
232. While protecting the rights of the people from being violated in any manner utmost care has to be taken that the court does not transgress its jurisdiction. There is, in our constitutional framework a fairly clear demarcation of powers. The court has come down heavily whenever the executive has sought to impinge upon the court's jurisdiction."
(x) The Court would ordinarily not step out of the known areas of judicial review. The High Courts although may pass an order for doing complete justice to the parties, it does not have a power akin to Article 142 of the Constitution of India.
(xi) Ordinarily the High Court should not entertain a writ petition by way of Public Interest Litigation questioning constitutionality or validity of a Statute or a Statutory Rule.
51. In M.C. Mehta Vs. Kamal Nath [(2000) 6 SCC 213, it was held:
"20. The scope of Article 142 was considered in several decisions and recently in Supreme Court Bar Association Vs. Union of India (1998) 4 SCC 409 by which the decision of this Court in Vinay Chandra Mishra, Re (1995) 2 SCC 584 was partly overruled, it was held that the plenary powers of this Court under Article 142 of the Constitution are inherent in the Court and are "COMPLEMENTARY" to those powers which are specifically conferred on the Court by various statutes. This power exists as a separate and independent basis of jurisdiction apart from the statutes. The Court further observed that though the powers conferred on the Court by Article 142 are curative in nature, they cannot be construed as powers which authorise the Court to ignore the substantive rights of a litigant. The Court further observed that this power cannot be used to "supplant" substantive law applicable to the case or cause under consideration of the Court. Article 142, even with the width of its amplitude, cannot be used to build a new edifice where none existed earlier, by ignoring express statutory provisions dealing with a subject and thereby achieve something indirectly which cannot be achieved directly."
(See also Supreme Court Bar Association Vs. Union of India (1998) 4 SCC 409) 25
52. This Court in Balco Employees' Union (Regd.) (supra) succinctly opined:
"77. Public interest litigation, or PIL as it is more commonly known, entered the Indian judicial process in 1970. It will not be incorrect to say that it is primarily the Judges who have innovated this type of litigation as there was a dire need for it. At that stage, it was intended to vindicate public interest where fundamental and other rights of the people who were poor, ignorant or in socially or economically disadvantageous position and were unable to seek legal redress were required to be espoused. PIL was not meant to be adversarial in nature and was to be a cooperative and collaborative effort of the parties and the court so as to secure justice for the poor and the weaker sections of the community who were not in a position to protect their own interests. Public interest litigation was intended to mean nothing more than what words themselves said viz. "litigation in the interest of the public'.
78. While PIL initially was invoked mostly in cases connected with the relief to the people and the weaker sections of the society and in areas where there was violation of human rights under Article 21, but with the passage of time, petitions have been entertained in other spheres. Prof. S. B. Sathe has summarised the extent of the jurisdiction which has now been exercised in the following words :
"PIL may, therefore, be described as satisfying one or more of the following parameters. These are not exclusive but merely descriptive :
- Where the concerns underlying a petition are not individualist but are shared widely by a large number of people (bonded labour, undertrial prisoners, prison inmates).
- Where the affected persons belong to the disadvantaged sections of society (women, children, bonded labour, unorganised labour etc.).
- Where judicial law making is necessary to avoid exploitation (inter-country adoption, the education of the children of the prostitutes).
- Where judicial intervention is necessary for the protection of the sanctity of democratic institutions (independence of the judiciary, existence of grievances redressal forums).
- Where administrative decisions related to development are harmful to the environment and 26 jeopardize people's right to natural resources such as air or water."
79. There is, in recent years, a feeling which is not without any foundation that public interest litigation is now tending to become publicity interest litigation or private interest litigation and has a tendency to be counterproductive.
80. PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public-spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. There, have been, in recent times, increasingly instances of abuse of PIL. Therefore, there is a need to re-emphasize the parameters within which PIL can be resorted to by a petitioner and entertained by the court. This aspect has come up for consideration before this Court and all we need to do is to recapitulate and re-emphasize the same."
53. We do not intend to say that the dicta of this Court in Balco Employees Union (supra) contains the last words. But the same may be considered to be in the nature of guidelines for entertaining public interest litigation.
54. Incidentally, on administrative side of this Court, certain guidelines have been issued to be followed for entertaining Letters/Petitions received by this Court as Public Interest Litigation.
55. We do not intend to lay down any strict rule as to the scope and extent of Public Interest Litigation, as each case has to be judged on its own merits. Furthermore, different problems may have to be dealt with differently."
24. Therefore, we must ask ourselves a question as to whether the petitioner in the Public Interest Litigation would fall in any of these categories. If we accept the case of the State that the State has evolved its policy as a conscious decision on its part to promote public good by way of giving FL-2 licence in favour of the Board under the Mandi Act and again which, in turn, would act through the Garhwal Mandal Vikas Nigam and Kumaon Mandal Vikas Nigam, which are instrumentalities of the State, we fail to see how the petitioner can approach the Court and seek to interfere with 27 that mechanism. We have already pointed out the benefits, which, according to the State, would enure to the Board and the Marketing Committees and, therefore, to the public as also how the public weal will be generally enhanced. Uttarakhand is a hilly State. People living in remote areas and carrying on their vocations through agricultural operations must necessarily be provided with proper marketing facilities. Undoubtedly, it is true that the primary object of the act was to provide for marketing facilities for agriculturists. What has been the bane of agriculturists throughout India has been that the producers were not getting a fair deal. Mandies and the Boards were all created in short to achieve the object that conditions are created, so that the farmer gets a fair deal by way of a reasonable return on its produce and he is not exploited. In conjunction with this noble object, we must also read the various functions, which are entrusted with the market committee and the Board which include creation of various infrastructural facilities which includes roads, market yards, etc. All of this requires funds. Therefore, if the Government of the day thought that the granting of FL-2 licence in favour of the Mandi Paishad would enable it to achieve its excise policy and also the policy in the Mandi Act better, we would think it is inconceivable how a person could come complaining of it in Public Interest jurisdiction. If the policy is successful and every Government has a right to experiment and the Court will allow it free play in its joints to experiment, there would be a transformation of the entire scene in the sense that the public body would get much needed funds as under the policy it is entitled to keep 75% of the revenue and the 25% goes to the other public bodies. So the fundamental fact, which we must focus, is if the Government through this policy ensures flow of greater funds into public coffers, it is clear that it is done in public interest because money in the hands of the public bodies would always be presumed to be used for public good. There would be deployment of these public funds at the hands of 28 the board for the development of the infrastructural facilities in the countryside which in the State of Uttarakhand consists mostly of hills. There would be better facilities made available to the agriculturists. The policy speaks about the establishment of winery. It also speaks about development of horticulture. All of it is not foreign to the Mandi Act. On the other hand, it is the very soul of the Act that ultimately there is development of agriculture in the State and the plight of the agriculturists becomes better. It is to ameliorate their conditions that apparently the policy is put in place. From the perspective of excise also, in the view of the Government of the day, public interest is better served by giving the right to the public body to trade in liquor wholesale. It would, according to the State, bring about better collection of revenue as we can expect that the Board when it is a wholesale dealer and it lifts liquor from the distilleries, it would not be party to any mechanism by which tax lawfully due to the State is dodged. We can also going by the arguments of the State presume that the standard of the quality of liquor would be maintained. Can it be said that these are all irrelevant in deciding the question whether the Public interest litigation is to be countenanced or not. We surely think that under Article 226 of the Constitution of India there are various situations in which writs are sought for. The Court must pose the question as to what would be the out come of its decision on public interest. Should we probe deeply into the concerns of the public interest litigant; should we strike down the rules at his instance; should we go into the question of ultra vires at his instance; what would be the result of our inquiring in these regions; should it be that there is some technical or legal flaw and that we strike down the policy and the rules and the Government Orders; what would be the out come? The out come, in short, would be that there will be a reverting back to the status quo ante, which would be that the wholesale trade will slip back into the private hands. Should we ask ourselves a question, is this what the public interest litigant wants? No doubt, 29 Shri Paresh Tripathi very strenuously argued that what he would want is neither this or that; but that the rule of law should be upheld.
25. Mr. Rakesh Thapliyal did invite our attention to one of the judgments of the Hon'ble Apex Court in the case of M.S. Jayaraj vs. Commissioner of Excise, Kerala & others, reported in (2000) 7 SCC 552. Therein, a Bench of two-Judges, no doubt, held as follows:
"13. 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 vs. Chandrima Das, (2000) 2 SCC 465, after making a survey of the later decisions held thus:
"17. 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 People's 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'."
14. 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 30 range it would be improper to 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."
But, at the same time, we must notice what may have happened in the facts of that case:
"A bidder in auction for the privilege of vending foreign liquor within a circumscribed range and holding licence in Form FL 1 failed to find out a suitable place to locate his shop within that range. Therefore, on his request, he was permitted by the Excise Commissioner to locate his shop in another range. A hotelier holding licence in Form FL3 and doing business in the latter range challenged the said order of the Excise commissioner before the High Court. A Single Judge dismissed the writ petition. Before a Division Bench the respondent raised an objection against the locus standi of the writ petitioner but that was not taken seriously and the Division Bench quashed the said order of the Excise Commissioner on merits. The appellant (respondent before the High Court) contended that the words "outside the limits specified in this sub-rule" occurring in the first proviso below Rule 6(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 could have relation to the limits specified in Rule 6(1)."
26. Therefore, it was a case, where the hotelier, who was holding the licence, could not be said to be not affected by the location of the FL1 licence in the area. At any rate, we have already referred to the decision of the bench of three Judges later in 2003 exhaustively dealing with the areas of public interest, which should engage the court. At any rate, in the facts of this case, we are of the view that we need not permit the public interest litigant to prosecute the matter, as it would not sub-serve the interest of the public. It would also be, in our view, contrary to public interest to permit him to prosecute the matter.
27. No doubt, the learned counsel for the petitioner in the Public Interest Litigation did bring to our notice a judgment in the case of Ashok Lanka and another vs. Rishi Dixit and others, reported in (2005) 5 SCC 598. Learned counsel for the petitioner 31 drew our attention to paragraph 42 of the said judgment, which reads as follows:
"42. It may not be necessary for us to consider as to whether the public interest litigation should have been entertained by the High Court or not. The High Court did entertain the public interest litigation without any objection and ultimately allowed the same. Furthermore it is well settled that even in a case where a petitioner might have moved the court in his private interest and for redressal of personal grievances, the court in furtherance of the public interest may treat it necessary to enquire into the state of affairs of the subject of litigation in the interest of justice. [See Guruyayoor Devaswom Managing Committee Vs. C.K. Rajan, (2003) 7 SCC 546, para 50 and Prahlad Singh vs. Col. Sukhdev Singh, (1987) 1 SCC 727."
28. Regarding the provisions of the Mandi Act, we would think that we cannot entirely be oblivious to Section 69(xiv) and Section 57. Even though Section 69 provides that it is subject to the provisions of the Act and, therefore, the argument sought to be built-up is that unless it is something otherwise authorised under the Act, even direction for the State Government would be ultra vires; we would think that, in the facts of this case, we need not probe the matter so much at the instance of the public interest litigant. We also cannot be oblivious to Section 57 under which a Government's direction is binding. We notice that the Communication dated 27.04.2015 was addressed to the Director, Mandi and also to the Kumaon Mandal Vikas Nigam and Garhwal Mandal Vikas Nigam. We must also notice that, under the scheme of the Act, the Board, though it is a corporate body and, therefore, a distinct legal person and, therefore, distinct from the State Government; is clearly controlled by the State. A look at the composition of the Parishad, as we have already done, leaves the matter beyond the pale of doubt that the Board is, in fact, completely controlled by the Government. An instrumentality for the purpose of Article 12 of the Constitution of India could be said 32 to be its agency and, when the State does business through the Board or through its Mandal, we would take it that it would be a case, where it is doing it through one of its limbs even though it may have a separate legal existence for various other purposes, particularly when the Board is bound by the policy directives issued by the Government under the Act. On a conspectus of all these facts, we would think that the reliance placed on the provisions of the Mandi Act may not be justified.
29. Coming to the provisions of the Excise Act, it is true that the power of rule-making under Section 40 is exclusive to the Government and it is a power, which under Section 10, cannot be delegated to the Excise Commissioner. The power under Section 41 is earmarked to the Excise Commissioner, no doubt, to be exercised subject to the previous sanction of the Government. We would prima facie agree that it tends to cover the areas, which are not contemplated under Section 40. In this case, there are two dimensions to this aspect. We have already found that the Public Interest Litigation is not one, which we should entertain. The other two writ petitions involve challenge to the statutes (Rules)/order by an FL5 licence-holder and the writ petitioner in Writ Petition (M/S) No. 1062 of 2015, has not disclosed his interest at all in the pleadings, but, at the bar, makes the revelation that he is having a FL5 licence (we would think that there is suppression of material facts there). But, even proceeding on the basis that petitioners have FL5 licences, we would pose ourselves the question, whether a challenge to a statute or legislation can be countenanced at the hands of a person, who is not aggrieved.
30. It is settled law that court will not rule on the vires of any law in vacuum. A person, who does not have locus in the sense that he is not aggrieved by a rule, cannot maintain a challenge to the rule. No doubt, in Public Interest Litigation, it is true that there 33 are rare situations, in which public interest litigation can be maintained against a statute. But, we would think that, even there, the public interest litigation involved in this case is not one of those categories of cases, where we should be persuaded to examine the vires of the Rules.
31. As far as the other two writ petitions are concerned, we are of the view that the petitioners do not have any locus to maintain a challenge to the Rules.
32. There is another angle to the rule-making power under Sections 40 and 41 of the Excise Act. In V. Balasubramaniam vs. Tamil Nadu Housing Board and others, reported in AIR 1988 SC 6, a question arose, whether power could be exercised to make arrangements, which power was vested with statutory body, without making the Rules. The Court took the view that, when a substantive power is granted to do a thing with a body, then the fact that Rules are contemplated would not mean that, if Rules are not made or not published in the manner known to law, it would deprive the authority of the substantive powers, which are, otherwise, granted. The court, inter alia, held as follows:
"11. The impugned promotions of 11 Junior Engineers were made on various dates between June 25, 1971 and February 7, 1972. It is true that the regulations which had received the approval of the State Government had not been published in the Official Gazette by the relevant dates as required by Section 3(19-A) of the Tamil Nadu General Clauses Act, 1891 which defined the expression "notification" as a notification published in the Official Gazette and by Section 21 of the Tamil Nadu General Clauses Act, 1891 which provided that where in any Act or in any rule passed under any Act, it was directed that any order, notification or other matter should be notified or published such notification or publication should unless the said Act otherwise provided be deemed to be duly made if it was published in the official gazette. In the present case the Act did not in fact provide for any other mode of publication or notification. The said regulations were actually published in the Official Gazette only on May 14, 1975. The Division Bench of the High Court as stated earlier proceeded to dismiss the writ petitions on the sole ground that no writ in the nature of mandamus could be issued because the 34 regulations had not been published in the form of a notification in the Official Gazette on the dates on which the writ petitions were filed and, therefore, they were not enforceable. It is, however, not disputed that by the time the impugned promotions took place the regulations had been made by the Board and had also received the approval of the State Government although they had not been published in the Official Gazette. There were no other regulations which had been duly made and published in the Official Gazette. In the above situation could it be said there was a legal vacuum as regards the conditions of service of the officers and servants of the Board? Section 16 of the Act confers the power on the Board to appoint a Secretary, a Housing Board Engineer and such other officers and servants as it considers necessary for the efficient performance of its functions. Section 17 of the Act no doubt provides that the remuneration and other conditions of service of the Secretary, Housing Board Engineer and other officers and servants of the Board shall be such as may be prescribed by regulations. The making of the regulations in the ordinary course of events occupies considerable time since they have to receive the approval and confirmation of the Government in order to be effective. The Board came into existence on April 22, 1961 and it passed the resolution adopting the regulations on March 20, 1963. The regulations were submitted by the Board to the Government for its approval after the said resolution was adopted by the Board. Until the regulations were approved and confirmed by the State Government the Board had necessarily to take decisions in accordance with certain norms laid down by it as regards the modes of appointment of officers and staff of the Board. Those decisions cannot be invalidated merely on the ground that the regulations had not yet been promulgated in accordance with law. In DundeeHarbour Trustees v. D.&J. Nicol [1915 AC 550] Viscount Haldane, L.C. said that 'the answer to the question whether a corporation created by a statute has a particular power depends exclusively on whether that power has been expressly given to it by the statute regulating it, or can be implied from the language used. The question is simply one of construction of language, and not of presumption.' The above statement of law has been quoted with approval by a Constitution Bench of this Court in Mysore State Road Transport Corporation v. Gopinath Gundachar Char [1968 (1) SCR 767 : (AIR 1968 SC 464)]
13. Assuming for purposes of argument that the non-publication of the regulations in the Official Gazette rendered them ineffective as regulations as held by the Division Bench of the High Court but without expressing any final opinion on the said question it has to be held that it was open to the Board to lay down appropriate norms in accordance with which it proposed to make appointments of its officers and staff. The regulations which were made by the Board on March 20, 1963 which had been modified by its two resolutions dated December 8, 1964 and November 8, 1965 and which had been approved and confirmed by the State Government could still form the basis of the appointments of the officers and staff of the Board until they were replaced by formal regulations published in the form of a 35 notification in the Official Gazette. Even in the case of persons holding the civil posts in the Government this Court has held that notwithstanding the provisions of Article 309 of the Constitution the State Government had the executive power in relation to all matters with respect to which the legislature of the State had power to make laws and in absence of any such law made under Article 309 of the Constitution or the rules made under the proviso thereto the State Government could make valid appointments in exercise of its executive powers (vide B.N. Nagarajan v. State of Mysore) [1966 (3) SCR 682 : (AIR 1966 SC 1942)]. The power of the Board under Section 16 of the Act is similar to the power exercisable by a State Government under Article 162 of the Constitution as regards appointment to State Public Services is concerned and that power could be exercised by the Board in accordance with its own resolution which in this case had received the approval of the State Government until appropriate regulations were published by it in accordance with Section 161 of the Act. Having taken a decision as per its resolution dated November 8, 1965 laying down that the qualifying service which a Junior Engineer should possess for purposes of promotion to the cadre of Assistant Engineers should be five years which had received the approval of the Government the Board was bound to follow faithfully the said decision while making promotions of Junior Engineers. It could not have, therefore, departed from the norm prescribed by itself earlier without modifying it by another resolution of the Board and obtaining the approval of the State Government to it."
33. This principle has been followed subsequently also by the Hon'ble Apex Court in Meghalaya State Electricity Board and another versus Jagadindra Arjun, reported in (2001) 6 SCC 446, wherein the Hon'ble Apex Court, inter alia, held as follows :-
"Therefore, it is held that MSEB which is empowered to make appointment of its officers and employees and frame statutory regulations laying down its service conditions, has the power until the regulations are framed, to lay down service conditions in exercise of its administrative power by passing resolutions." (Para 14) The Hon'ble Apex Court in Shamkant Narayan Deshpande v. Maharashtra Industrial Development Corporation and another, reported in AIR 1993 SC 1173 has also followed the said principle and held as follows:
"The proposition that in the absence of the rules and regulations, the authority can act by executive instructions finds direct support in Mysore State Road Transport Corporation v.36
Gopinath Gundachar Char, (1968) 1 SCR 767 : (AIR 1968 SC
464) and V. Balasubramaniam v. Tamil Nadu Housing Board, (1987) 4 SCC 738 : (AIR 1988 SC 6)".
But, there may be situations, where the law-giver mandates that a power may be exercised subject to the Rules, which will be made. If we examine the situation in the facts of this case, one would notice that Section 40 of the Excise Act provides, undoubtedly, for power to the Government to make the Rules in regard to the period and the persons to whom wholesale or retail licence is to be granted. This is not a power, which is granted to the Excise Commissioner. It is not a case of simultaneously lodging of similar powers with two different authorities. Therefore, proceeding on the basis that the power to decide to whom the licence is to be granted, be it wholesale or retail, is vested exclusively with the Government; it would appear that the Government did make a beginning in the said direction by making Rule 24. Thereafter, the Government followed it up by issuing a policy decision on 27.04.2015. That is followed up by the Rules made by the Excise Commissioner on 30.04.2015. It may not be safe to say that, since the Government gave previous sanction, the Excise Commissioner was endowed with the power to make Rules. But, in the facts of this case, we have already found that it may not be open to the petitioners to maintain challenge to the Rules. Furthermore, we would also think that the grant of licence is governed by Section 24-A of the Excise Act. No doubt, there is a case that the authorities have acted under dictation by way of communication dated 27.04.2015. But the question would be, does Section 24-A provide that the licences are to be given in the manner provided in the Rules and subject to the Rules. We find that Rule 24-A does not contain such provision. So, on the one hand, there is rule-making power under Section 40 and the Rules may be made by the Government and, indeed, Rules ought to have been made; but, we would also pose a question, if Rules are not made, whether it will be fatal to the grant of licence.
37We would think that, for the purpose of this case, it may not be any illegality as such. But, we refuse to finally pronounce on this issue for the reason that we would rest our decision on surer foundation, which is that the petitioners have not made out a locus for us to interfere in these matters.
34. In the facts of this case, we are not persuaded to think that the petitioner had made out a case for interference.
35. There remains the contention relating to the period being one year. The Rules may contemplate one year under Rule 24 but the authority may grant FL-2 licence for a period of five years. We would think that even this argument is raised by a person, who does not appear to have locus in the matter.
36. This discussion will be incomplete, if we do not advert to Article 298 of the Constitution of India. Article 298 reads as follows:
"298. Power to carry on trade, etc. - The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose:
Provided that -
(a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject to each State to legislation by the State; and
(b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament"
37. In fact, Article 298 of the Constitution of India provides that the executive power of the State will extend to carry on business as long as it does not go against the law made by the Parliament, if the trade is in respect of subjects, which are reserved for the Parliament under List I. 38
38. In such circumstances, we are of the view that there is no merit in these writ petitions. They are dismissed. No order as to costs.
(V.K. Bist, J.) (K.M. Joseph, C.J.)
06.08.2015 06.08.2015
P. Singh / G