M.S. JAYARAJversusCOMMISSIONER OF EXCISE, KERALA AND ORS.

A                                   M.S. JAY ARAJ
                                            v.
              COMMISSIONER OF EXCISE, KERALA AND ORS.

                               SEPTEMBER 29, 2000

B                      [K.T. THOMAS AND R.P. SETHI, JJ.]


         Kera/a Abkari Shops (Disposal in Auction) Rules, 1974; Rules 6(1)
    and 6(2).

C        Excise Range-Foreign liquor shop-Shifting of-From one Range to
    another-Permissibility of-Held : Excise Commissioner has no authority to
    permit such shifting-Kera/a Abkari Act.

          Practice and Procedure :
D         Locus standi-Illegal order-Writ petition against-Held : An. illegal
    order cannot remain alive and operative on the sole ground that the person
    who filed the writ petition has no locus standi-Constitution of India, 1950,
    Art. 226.

           The appellant was the highest bidder in the auction for vending foreign
E   liquor in an Excise Range. But the appellant failed to find a suitable place to
    locate the shop within the boundaries of the said Excise Range. However, the
    1st respondent-Excise Commissioner granted permission to the appellant for
    shifting the shop to another Range under Rule 6(2) of the Kerala Abkari Shops
    (Disposal in Auction) Rules, 1974.
F         The 3rd respondent, who was running a hotel and restaurant in the
    latter range, filed a writ petition before the High Court for quashing the
    aforesaid permission on the ground that the 2nd respondent had no authority
    to pass such an order, which was allowed.

G         On behalf of the appellant it was contended that the High Court ought
    not to have entertained the writ petition since the 3rd respondent had no locus
    standi to file the petition; and that the High Court failed to trace the power of
    the Excise Commissioner which power had been conferred on him by the first
    proviso to Rule 6(2) of the Auction Rules.

H         Dismissing the appeal, the Court
                                       616
              M.S. JAY ARAJ v. COMMISSIONER OF EXCISE                       617
       HELD : 1.1. The repeated usage of the negative expression "no" in sub-      A
rules (1) and (2) of Rule 6 of the Kerala Abkari Shops (Disposal in Auction)
Rules, 1974 looms large therein. By such usage the legislature has imposed
absolute ban on certain activities e.g. "no licensee shall be permitted to sell
foreign liquor outside the local limits specified in his licence" as in sub-rule
(1) and "no foreign liquor shop shall be located outsid.e the notified limits"     B
as in sub-rule (2). Then again "no foreign liquor shop shall be located" within
the distance fixed as from certain institutions. There is neither proviso nor
any explanation as for sub-rule (1) but the proviso is placed only below sub-
rule (2). Therefore, sub-rule (1) must work out by itself unexpanded or
unrestricted by any other clause. [624-C-D]

      1.2. The only exception from the ban contained in sub-rule (1) is provided
                                                                                   c
in sub-rule (3). A superior authority like the Government alone is vested with
the power of transfer of liquor shops from one locality to another in "the
interest of public peace or morality or on grounds of expediency." Even for
the Government to order transfer of a shop from one locality to another it
cannot be done unless there is existence of the exigency indicated in sub-         D
rule (3). Therefore it cannot be conceived that a subordinate officer can do it
without any such exigency. [625-A-B]
      2. The Excise Commissioner has no authority to permit shifting of a
foreign liquor shop from one Range to a totally different Range. Consequently,
the order passed by the first respondent-Excise Commissioner in favour of          E
the appellant is without authority of law and it has been rightly struck down
by the High Court. [625-D]

       3. In view of the finding of the High Court that the order of the Excise
Commissioner was passed in violation of law, the motion should not be nipped
out solely on the ground of locus standi. If the Excise Commissioner bas no        F
authority to permit a liquor shop owner to move out of the Range (for which
auction was held) and have his business in another Range it would be improper
to allow such an order to remain alive and operative on the sole ground that
the person filed the writ petition has strictly no locus standi. [623-A-B]
      Chairman, Railway Boardv. Chandrima Das, [2000) 2 SCC 465, relied            G
on.
      Nagar Rice & Flour Mills v. N. Teekappa Gowda, [1970] 1 SCC 575;
Jasbhai Motibhai Desai v. Roshan Kumar Haji Ahmed, (1976) 1 SCC 671,
Thammanna v. K. Veera Reddy, (1980) 4 SCC 60 and Dr. Duryodhan Sahu v.
Jitendra Kumar, [1998) 7 sec 273, referred to.                                     H
     618                    SUPREME COURT REPORTS (2000] SUPP. 3 S.C.R.

A        People's Union for Democratic Rights v. Union of India, [1982) 3 SCC
    235; Bandhua Mukti Morcha v. Union of India, [1984) 3 SCC 161; State of
    HP. v. A Parent of a Student of Medical College, [1985) 3 SCC 169 and
    Bangalore Medical Trust v. B.S. Muddappa, (1991) 4 SCC 54, cited.

            CIVIL APPEL LA TE JURISDICTION : Civil Appeal No. 5614 of 2000.
B
         From the Judgment and Order dated 12.6.2000 of the Kerala High Court
    in W.A. No. 992 of2000.

            P. Krishnamurthy, M.T. George and Ms. Premi for the Appellant.

C           C.S. Vaidyanathan, E.M.S. Anam and Fazlin Anam for the Respondent
    No.3.

         G. Prakash, Ms. Beena Prakash and Jyothish A.P. for the Respondent
    Nos. 1-2.

D          The Judgment of the Court was delivered by

           THOMAS, J. Leave granted.

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

          In the State of Kerala, the right to sell foreign liquor is restricted by
G   statutory provisions. The Government of Kerala has formulated rules for it
    under the Kerala Abkari Act and one set of such rules is called "the Kerala
    Abkari Shops (Disposal in Auction) Rules, 1974" (for convenience it would
    be referred to as the "Auction Rules"). The Government has the authority,
    under the said rules to notify in the Gazette the limits of each area (range)
    wherein the shop or shops could be located for vending such foreign liquor.
H   Officers are authorised by the Government to auction the right to. vend
      M.S. JAY ARAJ v. COMMISSIONER OF EXCISE [THOMAS, J.]                      619

foreign liquor from each such shop and for such period as may be fixed.                A
Person who offers the highest bid would normally be preferred for conferring
the privilege to vend foreign liquor and licence would be issued to him for
that purpose. Among the different types of licence only two are relevant for
the purpose of this case. One is called "Licence for the privilege of possession
of Indian made Foreign Liquor for sale to public in sealed bottles without the
privilege of consumption on the premises". As the said licence is to be issued         B
in Form FL-I it can be termed as such hereinafter. The other is called "Hotel
(Restaurant) Licence" and it is to be issued in Form FL-3. (It can be referred
to as such hereinafter).

       FL-3 licence consists of the privilege to sell foreign liquor for consumption   C
within a room specifically approved for the purpose to residents in the hotel
or boarding houses, including their guests. FL- I licence is for the privilege
of selling foreign liquor in sealed bottles containing a quantity above I 80 ml.

      For the facts in this case the following events are to be narrated:

      On 13.3.2000 appellant participated in the auction held in respect of a          D
shop to be located within a .range called "Changanassery Excise Range"
consisting of the areas falling within the limits ofChanganassery Municipality.
Appellant was the highest bidder and he quoted above Rs. 63 lakhs. On his
being chosen for the licence appellant remitted a portion of the bid amount
on the same day.                                                                       E
      He failed to find out a suitable place to locate the shop within the
boundaries of Changanassery Excise Range. Hence he applied to the first
respondent (Commissioner of Excise, Kerala) for permission to locate the shop
outside the said range. On the same day the application was forwarded by
the second respondent (Assistant Excise Commissioner of the district) with             F
a recommendatory note. The Excise Commissioner granted permission to the
appellant on 12.4.2000 for shifting the shop to another range called Karukachal
which comprises of the areas falling within Karukachal Panchayat. (That
range is situate next to the Changanassery range.) The third respondent, who
i~ running the hotel and restaurant at Karukachal and who obtained FL-3                G
licence to supply foreign liquor in peg measurements to patrons visiting the
hotel, filed a writ petition before the High Court under Article 226 of the
Constitution for quashing the aforesaid permission granted by the first
respondent. Third respondent contended mainly that the Excise Commissioner
had no authority to pass such an order. In defence of the pennission so
granted the Excise Commissioner and the second respondent relied on Rule               H
     620                     SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.

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

           Third respondent filed an appeal before the Division Bench of the High
    Court and learned Judges of the Bench reversed the order passed by the
    single judge holding that the Commissioner of Excise has no power or
    jurisdiction under Rule 6(2) to transfer an Abkari or foreign liquor shop
C   outside the limits notified in the Gazette under Rule 4 of the Auction rules.
    The Division Bench did not seriously take the objection raised by the present
    appellant that writ petitioner had no locus standi to challenge the order of the
    Excise Commissioner. However, learned Judges observed that the writ petitioner
    is a licensee having FL-3 licence and was running a hotel-cum- restaurant in
D   Karukachal Panchayat and hence the order permitting the appellant to shift
    the shop to Karukachal Panchayat would affect her rights. Resultantly the
    Division Bench quashed the order on the Excise 'Commissioner though learned
    Judges granted two weeks' time to dispose of the stock of liquor acquired
    by the appellant for the purpose of selling the same in exercise of the licence
    granted to him.
E
            Shri P. Krishnamurthy, learned senior counsel, who argued for the
     appellant, adopted a two-pronged onslaught on the judgment of the Division
     Bench of the High Court. First is that the High Court ought not to have
     entertained the writ petition filed by the third respondent as she is a rival
     businesswoman who cannot have locus standi to file the petition. Second is
F    that the Division Bench failed to trace the power of the Excise Commissioner
     which power has been conferred· on him by the first proviso to Rule 6(2) of
    the Auction Rules. Shri C.S. Vaidyanathan, learned senior counsel who argued
    for the third respondent, contended that the locus standi of the third respondent
    for moving the High Court is no concern now as the learned single judge of
G   the High Court had already entertained the writ petition and decided it on
    merits only. Alternatively, learned counsel contended that the third respondent
    is not, in fact, a rival businesswoman and she need be regarded only as a
    resident of Karukachal Panchayat who is entitled to assail any order passed
    by a statutory authority in violation of law. Without prejudice to such
    contention learned counsel made an endeavour to support the interpretation
H   placed by the Division Bench of the High Court on Rule 6(2) of the Auction
      M.S. JA YARAJ v. COMMISSIONER OF EXCISE [THOMAS, J.]                  621
~~                                                                                 A
      Shri P. Krishnamurthy, learned senior counsel relied on the decisions of
this Court in the Nagar Rice & Flour Mills and Ors. v. N. Teekappa Gowda
& Bros. and Ors., [1970] 1 SCC 575; Jasbhai Motibhai Desai v. Roshan
Kumar Haji Bashir Ahmed & Ors., [1976] 1 SCC 671; Thammanna v. K. Veera
Reddy and Ors., [1980] 4 SCC 60 and Dr. Duryodhan Sahu and Ors., v.                B
Jitendra Kumar and Ors., [1998] 7 SCC 273 in order to bolster up his contention
that the third respondent had no locus standi to maintain a petition under
Article 226 of the Constitution in respect of the impugned order passed by
the Excise Commissioner.

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

       In this context we noticed that this court has changed from the earlier
strict interpretation regarding locus standi as adopted in Nagar Rice & Flour      F
Mills and Ors. v. N. Teekappa Gowda & Bros. and Ors., [1970] 1 SCC 575
and Jasbhai Motibhai Desai v. Roshan Kumar Haji Bashir Ahmed & Ors.,
[1976] 1 sec 671 and a much wider convass has been adopted in later years
regarding a person's entitlement to move the High Court involving writ
jurisdiction. A four Judge Bench in Jasbhai Motibhai Desai (supra) pointed         G
out three categories of persons vis-a-vis the locus standi: (1) a person
aggrieved; (2) a stranger; (3) a busybody or a meddlesome interloper. Learned
Judges in that decision pointed out that any one belonging to the third
category is easily distinguishable and such person interferes in things which
do not concern him as he masquerades to be a crusader of justice. The
Judgment has cautioned that the High Court should do well to reject the            H
    622                    SUPREME COURT REPORTS [2000) SUPP. 3 S.C.R.

A petitions of such busybody at the threshold itself. Then their· Lordships            ....
    observed the following:

           "The distinction between the first and second categories of applicants,
           though real, is not always well demarcated. The first category has as
           it were, two concentric zones; a solid central zone of certainty, and a
B          grey outer circle of lessening certainty in a sliding centrifugal scale,
           with an outermost nebulous fringe of uncertainty. Applicants falling
           within the central zone are those whose legal rights have been infringed.
           Such applicants undoubtedly stand in the category of 'persons
           aggrieved'. In the grey outer circle the bounds which separate the
           first category from the second, intermix, interfuse and overlap
c          increasingly in a centrifugal direction. All persons in this outer zone
           may not be persons aggrieved."

          A recent decision delivered by a two Judge Bench of this Court (of
    which one of us is a party - Sethi, J.) in Chairman Railway Board & Ors.
D   v. Chandrima Das & Ors., [2000] 2 sec 465 after making a survey of the later
    decisions held thus:

           "In the context of public interest litigation, however, the Court in its
           various judgments has given the widest amplitude and meaning to the
           concept of locus standi. In People's Union for Democratic Rights v.
           Union of India, [ 1982] 3 SCC 235 it was laid down that public interest
E
           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 andStateofH.P. v.A ParentofaStudentof
           Medical College, [ 1985] 3 SCC 169 on the right to approach the court
F          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
G          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
H          anyone who is not a mere busybody."
      M.S. IA YARAJ v. COMMISSIONER OF EXCISE [THOMAS, J.]                  623
                      ~




      In the light of the expanded concept of the locus standi and also in view    A
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 oflocus standi. If the Excise Commissioner
has no authority to permit a liquor shop owner to move out of the range (for
which auction was held) and have his business in another range it would j)e        B
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.

       Chapter I to 4 of the Auction Rules contain various-regulations regarding
fixation of the limit of each range, how to conduct the auction for each or lot    C
of shops etc. Chapter 5 of the Auction Rules contains two rules (Rule 6 and
Rule 6A) under the title "General Conditions applicable to licensees of toddy,
arrack or foreign liquor l shops". Though Rule 6 consists of 39 sub-rules we
are concerned only with the first three of them. Hence those three sub- rules
are extracted herein:
                                                                                   D
        "6(1) No licensees ofany toddy, foreign liquor shop shall be permitted
        to sell or possess toddy or foreign liquor or cocobrandy outside the
        local limits specified in his licence.

       (2) No toddy or foreign liquor shop notified in the Gazette under Rule
       4, shall be located outside the notified limits, but with the previous      E
       sanction of the Assistant Excise Commissioner it may be removed
       from one place to another within such limits. However, no such shop
       shall be located in or removed to place within an area declared as a
       project area. No toddy shop shall be located within 400 meters and
       no Foreign Liquor I shop shall be located within 200 meters from an         F
       educational Institution, Temple, Church, Mosque, Burial ground, Harijan
       Colonies or Tribal Colonies:

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

           Provided further that if any educational institution, Temple, Church,
       Mosque or burial ground comes into existence subsequent to the
       grant of licence, it shall not disentitle such shops for continuance:       H
    0624                     SUPREME COURT REPORTS [2000) SUPP. 3 S.C.R.

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

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

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

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

H          Otherwise the absolute ban incorporated in sub-rule ( 1) would become
-
             M.S. JA YARAJ v. COMMISSIONER OF EXCISE [THOMAS, J.]               625
    meaningless. It is also worthy to notice that the only exception from the ban      A
    contained in sub-rule {l) is provided in sub-rule (3), extracted above. A
    superior authority like the Board of Revenue alone was vested with that


-   power in "the interest of public peace or morality or on grounds of expediency."

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

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


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

    v.s.s.                                                      Appeal dismissed.




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