Holding

"Close proximity" under Rule 5(4) of the Uttar Pradesh Excise Shop Rules means a distance of approximately 100 metres (300 ft), and no licence shall be granted for a shop within that radius, but existing shops must be closed only after notice, with a final closure deadline of 31 March 2008.

Summary

The Supreme Court examined the meaning of "close proximity" in sub‑rule (4) of Rule 5 of the Uttar Pradesh Number and Location of Excise Shop Rules, 1968, after a Lucknow High Court had held that it meant a distance of about 100 metres (300 ft) and ordered the immediate closure of liquor shops within that radius without notice. The Court agreed with the High Court’s interpretation that 100 metres/300 ft is the appropriate measure, but criticised the method of closing shops without giving notice to the affected parties. It directed that the interim order allowing the shops to continue operating remain in force until 31 March 2008, after which any shop within the specified distance must shut down and no new licences may be issued. The petition filed by the State of Uttar Pradesh seeking relief was therefore dismissed. The decision clarifies the statutory requirement for licensing of excise shops and underscores the need to observe principles of natural justice.

Issues considered

What is the proper interpretation of the term "close proximity" in sub‑rule (4) of Rule 5 of the Uttar Pradesh Excise Shop Rules?
Whether the High Court was justified in ordering the immediate closure of shops within the prohibited distance without notice?

Legislation cited

Subjects

Excise lawStatutory interpretationLicensingProximity distanceNatural justicePublic interest litigationAdministrative law

Judgment

[2008] 3 S.C.R. 757
. -~

> STATE OF U.P. AND ORS. A
v.
MANOJ KUMAR DWIVEDI AND ORS'.
(Special Leave Petition (C) No. 7756 of 2006)

FEBRUARY 25, 2008
B
• ~ (A.K. MATHUR AND AFTAB ALAM, JJ.)
•
Uttar Pradesh Number and Location of Excise Shop
Rules, 1968:
Rule 5(4) - Location and sites for liquor shop - Not to be c
in 'close proximity' of certain places mentioned in the rule -
High Court opining that 100 meters or 300 ft. (approx.) would
be a just measure where liquor shop should not be opened in
close proximity of the places mentioned in the rule - Held:
., High Court was right in holding that 100 meters or 300 ft. D
"-I
(approx.) should be the criteria where Excise Commissioner
would not give any licence to a shop under the Excise Act -
However, approach of High Court in closing the shops without
any notice to affected parties was not correct- The shops would
continue to operate till 31. 3. 2008 and thereafter all shops falling E
within a radius of 100 meters or 300 ft. (approx.) to a place
mentioned in the rule shall be closed-Principle of natural
;ustice-Notice.
~
Words and Phrases
F
Expression 'close proximity' as occurring in r. 5(4) of UP
Number and Location of Excise Shop Rules, 1968 -
Connotation of
CIVIL APPELLATE JURISDICTION : Petition for Special
Leave to Appeal (Civil) No. 7756 of 2006 G
From the Judgment and Order dated 6.4.2006 of the High
.....-
' Court of Judicature at Allahabad. Lucknow Bench, Lucknow in
C.M.W.P. No. 167812006 (PIL) and W.P. No. 2093 (MIS) of2006
757 H
758 SUPREME COURT REPORTS [2008] 3 S.C.R.
,, .
A (PIL). •
WITH
SLP (C) Nos. 8016/2006, 8022/2006 and 7684/2006.
Dr. R.G. Padia, Ajay Kumar Misra, Dinesh Kr. Goswami,
B Anil Kumar Jha, Anurag Sharma, Joseph Poopkall, Prashant ,

Kumar, Arvind Verma, Malvika Trivedi, T. Mahipal, Kamlendra ..; •
Mishra, Shekhar Kumar, Santosh Kumar Tripathi, S. Janani, •
Deepak Goel, Indra Sawhney, B.K. Prasad, Mrs. Anil Katiyar,
D.S. Mahra, K.K. Tyagi and P. Narasimhan for the appearing
c parties.
The following order of the Court was delivered:
1. All these special leave petitions involve a common
question as to the interpretation of sub- rule (4) of Rule 5 of the
D U. P. Number and Location of Excise Shop Rules, 1968
(hereinafter for short the "U.P. Excise Rules"). Since these
\- ..
petitions involve a common question, they were heard together
and are being disposed of by this order. However, for convenient
disposal of these petitions, the facts of SL P (C) No. 7756/2006
E are taken into consideration.
SLP(C) No. 7756 I 2006
2. This petition is directed against the judgment and order ,.
dated 6.4.2006 passed by the Division Bench of the High Court
..
F of Judicature at Allahabad, Lucknow Bench whereby the Division
Bench has taken the view that the word "close proximity" used
in sub- rule (4) of Rule 5 of the U.P. Excise Rules shall be meant
to be 100 meters or 300 ft. (approx.). The brief facts leading to
the decision of the Division Bench of the High Court are that a
G
public interest petition was filed before the Lucknow Bench of
the High Court making a grievance that liquor shops were opened
in purely residential areas in breach of the provisions of U.P.
Excise Rules.
3. The said Excise Rules have been made in exercise of
t:I the powers under clauses (c) and (f) of sub- section (2) of Section
STATE OF U.P. AND ORS. v. MANOJ KUMAR 759.
DWIVEDI AND ORS.

.
>
").
' 40 of the Uttar Pradesh Excise Act, 1910 (U.P. Act No. 4 of A
1910) read with Section 21 of the U.P. General Clauses Act,
1904 (U.P. Act No. 1 of 1904). The said Sub- Rule (4) of Rule 5
of the Excise Rules reads as under :-
5. The following principles shall be observed in determining
the location and the sites for shops/sub- shops:- B

' .~ (4) No new shop or sub- shop shall be licensed in close
proximity to a place of public resort, school, hospital, place
•
of worship or factory, or to the entrance to a bazar or a
residential colony. All objections to the licensing of a shop c
or sub- shop made by persons affected, shall receive full
consideration."
4. The Division Bench of the High Court taking note of the
abovesaid provision directed that all the licensed shops which
were operating in close proximity to a place of public resort, D
school, hospital, place of worship or factory, or to the entrance
• "-f
to a bazar or a residential colony shall be closed with immediate
effect. As a result of the orders passed by the High Court, as
many as 53 liquor shops were closed in Gomti Nagar area of
Lucknow. After hearing the parties and taking a just and fair E
solution to the problem, the Division Bench fixed the distance
of 100 meters or 300 ft. (approx.) within which there shall be no
liquor shop close to a place of public resort, school, hospital,
place of worship or factory, or to the entrance to a bazar or a
~ residential colony. F
5. Aggrieved against the said judgment and order of the
High Court, this petition has been filed by the State of Uttar
Pradesh.
6. Notice was issued in all the petition and the operation
G
of the impugned judgment and order was stayed by this Court
vide order da.ted 28. 4. 2006 . Today the petition has come up
for final disposal before us.
-ot-
• 7. We have heard learned counsel for the parties and
perused the record.
I H
•

760 SUPREME COURT REPORTS [2008] 3 S.C.R.

{.
A 8. Sub- Rule (4) of Rule 5 of the U.P. Excise Rules deals
(
with the location of Excise shop and sub- shop and shop has
been defined in Rule 2(a) of the said Rules as under :-
"(a) "Shop" means a retail shop for vend of country liquor,
foreign liquor and bhang."
B
Rule 5 of the U.P. Excise Rules deals with the location ofa
shop and the principle which has to be observed while issuing ~
.
/

license to a shop. From a plain reading of sub- rule (4) it is clear •
that no shop or sub- shop for vending of country liquor, foreign
c liquor and bhang shall be opened in the close proximity to a
place of public resort, school, hospital, place of worship or
factory, or to the entrance to a bazar or a residential colony. In
case of any violation of the said Rule, if objections are received
from affected persons, the same shall receive full consideration.
Therefore if any shop is opened in the close proximity to a place
D
of public resort, school, hospital, place of worship or factory, or
'1- • •
to the entrance to a bazar or a residential colony then the
residents of that area has a right to protest and the decision
has to be taken by the Excise Commissioner. Unfortunately, the
tendency of the State is to ignore the Rules in order to augment
E the revenue of the State and the State indiscrimin ately opens
shops making the life of the residents of the area miserable. In
fact the present public interest petition before the High Court
was a result of the failure of the State Machinery to take
necessary steps in the matter. If the Excise Commissioner has
F taken proper care while issuing licences to the liquor vendors ""
and considered the objections of the residents of the area,
perhaps there would not have been any necessity of filing the
public interest litigation before the High Court.
9. Be that as it may, it appears that proper care was not
G
taken while opening shops in the close proximity of a place of
public resort, school, hospital, place of worship or factory, or to
the entrance to a bazar or a residential colony and that is how
Sub- Rule (4) of Rule 5 came up for interpretation before the r
High Court. The High Court has after taking into consideration
H
STATE OF U.P. AND ORS. v. MANOJ KUMAR 761
DWIVEDI AND ORS.
,. 7'
the overall view of the matter opined that 10 0 meters or 30 0 ft A
)
(approx.) would be a just measure where the shop should not
be opened in the close proximity of a place of public resort,
school, hospital, place of worship or factory, or to the entrance
to a bazar or a residential colony. We fully agree with the view
taken by the High Court and we are also of the view that 10 0 B
meters or 30 0 ft.(approx.) should be the right criteria were the
:-J.. Excise Commissioner shall not give any licence to a shop under
.. the Excise Act. We hope and trust that the Excise Commissioner
of the State shall take into consideration sub- rule (4) of Rule 5
of the U.P. Excise Rules and see that no shops or sub- shops c
are opened within radius of 10 O meters or 30 0 ft. (approx.) of
a place of public resort, school, hospital, place of worship or
factory, or to the entrance to a bazar or a re.sidential colony. The
interpretation of the word "close proximity" was vague therefore
it was misused by the authorities. But, now the matter has been
D
placed beyond any vagueness. Therefore, with the interpretation
' "'-f of the expression "close proximity" by the High Court, the matter
has been put in the right perspective and the doubt has been
cleared. Therefore, taking into consideration all the facts and
circumstances of the case, we affirm the view taken by the High
Court insofar as fixing the distance of 10 0 meters or 30 0 ft. E
(approx.) from a place of public resort, school, hospital, place
of worship or factory, or to the entrance to a bazar or a residential
colony where no shop or sub- shop shall be opened under the
~ U.P. Excise Act and Rules framed thereunder.
F
10. However, we do not approve of the approach of the
High Court in closing the shops without issuing notice to the
affected parties. This should not have been done. Since the
operation of the impugned judgment and order was stayed by
this Court, these shops have continued to operate. We direct
G
that the interim order dated 28. 0 4 . 2 0 0 6 passed by this
Court under which these shops are operating, shall continue to
operate till 31. 3. 2 0 0 8 and after that no shops or sub- shops
-I under the U.P. Excise Act shall be opened or continue to open
within a radius of 10 0 meters or 30 0 ft. (approx.) of a place of
H
762 SUPREME COURT REPORTS [2008] 3 S.C.R.

A public resort, school, hospital, place of worship or factory, or to { .
the entrance to a bazar or a residential colony. All the shop (

owners or sub- shop owners shall close their shops on or before
31. 3. 2 0 0 8 if they are within a radius of 10 0 meters or 30 0 ft.
(approx.) to a place of public resort, school, hospital, place of
B worship or factory, or to the entrance to a bazar or a residential
colony. As there is sufficient time, the shop owners or sub- shop
owners shall make necessary arrangement to shift their shops.
If these shops are not closed after 31. 3. 2 0 0 8 the Excise -1
Commissioner of the State shall see to it that the said shops
c are closed and no fresh licence or renewal shall be made of a
licence if they are operating in prohibited area.
11. With the abovesaid observations, this special leave
petition is disposed of.
SLP (C) No. 8016 I 2006, SL P(C) No. 8022 I 2006 and
D
SLP (C) No. 7684 I 2006
1- •._
For the reasons mentioned in SLP (C) No. 1678 I 2006,
these petitions also stand disposed of in the same terms.
R.P. Special Leave petition disposed of.
E