M/S.Durgawines, A4 Shop No.02, Nizamaba Vs. Govt. of A.P.Rep., by Its Secretary (Pr - Court Judgment

SooperKanoon Citationsooperkanoon.com/1134887
CourtAndhra Pradesh High Court
Decided OnAug-07-2013
JudgeHON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY
AppellantM/S.Durgawines, A4 Shop No.02, Nizamaba
RespondentGovt. of A.P.Rep., by Its Secretary (Pr
Excerpt:
the hon'ble sr.justice ramesh ranganathan writ petition no.21097 of2013and batch dated 07-08-2013 m/s.durga wines, a4 shop no.02, nizamabad town rep. by its prop:mr.bantu satyajith reddy....petitioner govt. of a.p.rep., by its secretary (prohibition and excise).secretariat, hyderabad & ors.....respondents counsel for the petitioner:sr.k.durgaprasad counsel for respondents: g.p.for prohibition and excise head note: ?.citations: 1 (1975) 2 scc482=air1976sc2632 (1967) 1 s.c.r.120 3 (1973) 3 scc8894 air1974sc16825 1996) 4 scc766 (1997) 116 plr2527 (2004) 1 scc7028 (1955) 2 scr603= air1955sc6619 (1898) 2 ch 28 10 1898 ac57111 (2004) 2 scc112 (2004) 11 scc2613 (2006) 4 scc32714 (2011) 334 itr387(ap) 15 (1996) 5 scc26816 (2009) 14 scc8517 (1995) 1 scc574the hon'ble sr.justice ramesh ranganathan writ petition nos.21097, 22275, 22276, 22283 & 22318 of2013common order: the question which arises for consideration, in this batch of writ petitions, is whether the amended rule 28 (2) of the andhra pradesh excise (grant of licence of selling by shop and conditions of licence) rules, 2012 (for brevity, 'the 2012 rules').and its proviso, are directory or mandatory; and whether non-compliance therewith would justify the respondents directing the andhra pradesh bewerages corporation limited (hereinafter referred to as 'apbcl') not to supply indian made foreign liquor and foreign liquor (hereinafter referred to as 'imfl' and fl' respectively) to the subject a4 shops. it would suffice, for the disposal of this batch of writ petitions, if the facts in w.p.no.22275 of 2013 are noted. the petitioner was allotted an a4 shop at nizamabad town, on a yearly rental of rs.46,00,000/- for the period from 01.07.2012 to 30.06.2013, and was granted a license to sell imfl & fl thereat. the licencee was entitled for renewal of the license for the year 2013-2014 also, for which they paid the yearly rental firs.instalment of rs.15,33,500/-, and a bank guarantee for the remaining balance of rs.30,68,000/-. the petitioner claims to be still running the subject a-4 shop. it is their case that, as they had complied with the stipulated conditions for renewal of the licence, apbcl was bound to supply imfl and fl to their shop; the fourth respondent was insisting that they pay an additional sum of rs.2,00,000/-, towards licence fee for a permit room; they neither desire to, nor can they, establish a permit room in the absence of space either in the existing shop or adjacent thereto; it is not possible for them to obtain a premises on lease in nearby areas; and, if the respondents insist upon their taking a permit room license for the year 2013-2014 on payment of rs.2,00,000/-, they, and other similarly situated, do not want to renew the a4 shop licence for the year 2013- 2014; and the respondents should be directed to refund the amounts paid by them and return their bank guarantee. both sr.k. durgaprasad and sr.a. jagannadha rao, learned counsel for the petitioners.would submit that rule 28(2) of the rules is directory in nature; as the petitioners were granted a licence in the year 2012-2013 and are entitled, as of right, for renewal thereof, it is only those conditions which were stipulated earlier, for grant of licence for the year 2012-2013, which can alone be imposed even for renewal of the licence for the year 2013-2014; the distinction between a bar and an a4 shop is that no alcohol can be consumed at an a4 shop; the petitioners cannot be compelled to pay an additional sum of rs.2,00,000/- merely because a few of the a4 shops were illegally permitting, or turning a blind eye to, consumption of liquor adjacent to their premises; the rules empower the authorities to cancel or suspend the licence of an a4 shop in case alcohol is being consumed adjacent thereto; and the action of the respondents, in insisting on payment of permit room licence fee of rs.2,00,000/- , as a condition for supply of imfl and fl from apbcl, is arbitrary and illegal. learned counsel would further contend that this rule is not even uniformly applied; and the respondents are supplying imfl and fl to those a4 licensed shops who paid the permit room license fee of rs.2,00,000/- though no permit room has been opened; and, even among those who have not paid the permit room licence fee of rs.2,00,000/-, imfl and fl is being supplied to a few. the case of the respondents, (as is reflected in the counter affidavit filed in w.p.no.21097 of 2013).is that the state government framed a new prohibition & excise policy for the year 2013-2014, in g.o.ms.no.358 dated 22.06.2013 for disposal of retail liquor outlets, which requires the privilege of selling liquor through retail shop to be renewed on collecting the fixed licence fee as per 2011 census; circular instructions were issued, pursuant thereto, to collect 1/3rd of the annual licence fee and a bank guarantee for the remaining 2/3rd annual licence fee; the 2012 rules were amended and notified in g.o.ms.no.357 dated 22.06.2013, and the proviso to rule 25(2) was deleted; rs.1,00,000/-, as stipulated earlier in rule 26, was substituted by rs.2,00,000/-; as a result all villages, towns, municipalities and municipal corporations, whose population exceeds 5000, are entitled for grant of a permit room licence on payment of the licence fee of rs.2,00,000/- for the year 2013- 2014; it is only on payment thereof that the depot managers of apbcl are being instructed to supply imfl and fl to the a-4 shops; and the action of the respondents, in this regard, is not illegal. the 2012 rules, notified in g.o.ms.no.391 dated 18.06.2012, superseded the earlier andhra pradesh excise (lease of right of selling by shop and conditions of licence) rules, 2005 (for brevity, 'the 2005 rules') issued in g.o.ms.no.998 dated 24.05.2005. rule 27 (2) of the 2005 rules read thus:- ".the holder of licence in form a-4 may be permitted to have a permit room in form a-4 (b) located in a place whose population is 5000 and above".the word 'may' in rule 27 (2) of the 2005 rules has been substituted by the word 'shall' in rule 25 (2) of the 2012 rules. it is useful in this context to extract rule 25 (2) of the 2012 rules and its proviso which read as under: ".(2) the holder of licence in form a-4 in places, whose population is 5000 and above, shall be licensed in form a-4(b) to have a permit room. provided that no such permit room will be granted in municipal corporation and municipalities and within a belt area of 5 kms from the periphery of such municipal corporation and within a belt area of 2 kms from the periphery of such municipalities and in tourism centres. the premises selected for permit room must be adjacent to the existing a-4 licensed premises and it must have a minimum plinth area of 15 sq.mts for consumption of liquor with additional facilities of sanitation such as wash basin, water closet and drinking water.". the proviso to rule 25 (2) was deleted by an amendment to the said rules which was notified in g.o.ms.no.357 dated 22.06.2013. as noted hereinabove, rule 25(2) of the 2012 rules uses the word ".shall".the term 'shall', in its ordinary significance, is mandatory and the court shall, ordinarily, give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence or would be at variance with the intent of the legislature or the rule making authority to be collected from other parts of the act/rules. the construction of the said expression depends on the provisions of a particular act/rules, the setting in which the expression appears.the object for which the direction is given, the consequences that would flow from the infringement of the direction and such other considerations. (govindlal chhaganlal patel v. agricultural produce market committee1; khub chand v. state of rajasthan2; state of u.p.v. babu ram upadhya3).while the use of the word ".shall". or ".may". is not conclusive on the question whether the particular requirement of law is mandatory or directory, the circumstance that the legislature/rule making authority has used a language of compulsive force is always of great relevance and, in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the statute ought to be construed as peremptory. one of the fundamental rules of interpretation is that if the words of a statute/rule are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature/rule making authority. (govindlal chhaganlal patel1).in determining the question whether a provision is mandatory or directory, the subject-matter, the import of the provision, the relation of that provision to the general object intended to be secured by the act/rules will decide whether the provision is directory or mandatory. it is the duty of the courts to get at the real intention of the legislature by carefully attending to the whole scope of the provision to be construed. 'the key to the opening of every law is the reason and spirit of the law, it is the animus imponentis, the intention of the law-maker expressed in the law itself, taken as a whole. (govindlal chhaganlal patel1; in re presidential poll4).no universal rule can be laid down and, in each case, one must look to the subject-matter and consider the importance of the provision disregarded, and the relation of that provision to the general object intended to be secured. while the proviso to rule 25(2).which was applicable for the earlier excise year 2012-2013, prohibited a permit room licence being granted in municipal corporations and municipalities, and within a belt area of 2 kms from the periphery of such municipalities and in tourism centres, rule 25 (2) of the 2012 rules, consequent upon the deletion of its proviso, requires the holder of a licence in form-a-iv, in all such places where the population is 5000 and above, to obtain a licence in form-a-iv (b) to have a permit room. rule 25(2) of the 2012 rules, consequent upon deletion of its proviso by g.o.ms.no.357 dated 22.06.2013, is mandatory. the contentions that rule 25 (2) of the 2012 rules is directory; it is only such of those a4 licensed shops which desire to have a permit room which need to pay the licence fee of rs.2,00,000/-; and the respondents are not entitled to force the a4 licenses to pay rs.2,00,000/- or compel them to open a permit room, therefore, need only to be noted to be rejected. as noted hereinabove, while rule 27 (2) of the 2005 rules used the word 'may', the substituted rule 25 (2) of the 2012 rules uses the word 'shall'. the heydon's rule is that, for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law).four things are to be discerned and considered: (1) what was the common law before the making of the act/rules; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy the legislature has resolved to cure; and (4) the true reason of the remedy. then the court is always to make such construction as shall: (a) suppress the mischief and advance the remedy; and (b) suppress subtle inventions and evasions for the continuance of the mischief pro privato commodo (for private benefit).and (c) add force and life to the cure and remedy according to the true intent of the makers of the act/rules pro publico (for the public good).the heydon's rule is applied in order to suppress the mischief which was intended to be remedied as against the literal rule which could have otherwise covered the field. (parayankandiyal eravath kanapravan kalliani amma v.k.devi5; and goodyear india ltd.v.state of haryana6; ameer trading corpn. ltd.v.shapoorji data processing ltd.,7; halsbury's laws of england, vol. 44(1).4th reissue, para 1474, pp. 906-07; bengal immunity co.ltd.v.state of bihar8; in re mayfair property company9; eastman photographic material company v. comptroller general of patents, designs and trade marks10; national insurance co.ltd.v.baljit kaur11).it is common knowledge that in open places, in and around several a4 retail shops, large scale consumption of alcohol takes place and, in an inebriated condition, such persons cause nuisance to, and harass, passers-by more particularly women and children. it is difficult for those, who live in and around such a4 retail shops, to even commute near, or pass by, such shops for fear of being subjected to needless abuse and humiliation. insistence on all a- 4 retail shops, in places where the population exceeds 5000, establishing permit rooms would substantially reduce, if not all together eliminate, consumption of alcohol in open places, or on public roads, adjacent to a4 shops. the requirement of a permit room being established by all a4 shop licencees, in areas in which the population exceeds 5000, is in the larger public interest of preventing consumption of alcohol in open places or on public roads adjacent to a4 shops, and thereby ensure that such consumption is restricted within a closed enclosure adjacent to the licenced a4 shops. it is with a view to ensure this laudable object, of preventing consumption of alcohol in public places, that the rule making authority has substituted the word ".may". in rule 27(2) of the 2005 rules by the word ".shall". in rule 25(2) of the 2012 rules and has deleted its proviso by the amendment notified in g.o.ms.no.357 dated 22.06.2013. i find it difficult, therefore, to accept the submission that rule 25 (2) of the 2012 rules, as amended by g.o.ms.no.357 dated 22.06.2013, is merely directory and not mandatory. the heydon's rule applies and, consequently, the use of the word 'shall' in rule 25(2) of the 2012 rules would require mandatory compliance. it is necessary to note that there is no challenge to the validity of the deletion, of the proviso to rule 25(2).in any of these writ petitions. no one has a right to carry on any business in liquor as it is considered ".res extra commercium".trade in liquor is not a fundamental right. it is a privilege of the state. the state parts with this privilege for revenue considerations. (state of punjab v. devans modern breweries ltd12; kerala samsthana chethu thozhilali union v. state of kerala13).as the business of trading in intoxicating liquor is res extra commercium, a high degree of control is exercised by law to ensure that the business of trading in liquor is carried on strictly in accordance with the provisions of the a.p.excise act, the rules made thereunder, and the terms and conditions of the licence granted in favour of the licensee. (commissioner of income tax, vijayawada v. m/s.swarna bar & restaurant14).the petitioners cannot claim to have a fundamental right to carry on business in trading in liquor. their right, if any, can be regulated by statutory provisions, both plenary and subordinate. the petitioners contention that they have a legitimate expectation of the 2012 rules, in force when they were granted licence on 01.07.2012, being continued even for the licence renewal period from 01.07.2013 to 30.06.2014 does not merit acceptance. the licence year 2013-2014 commenced from the 1st of july, 2013. the proviso to rule 25 (2) was deleted and notified prior thereto by g.o.ms.no.357 dated 22.06.2013. the petitioners cannot, therefore, claim to be unaware of the deletion of the proviso to rule 25 (2) of the 2012 rules. it is true that, in a given set of facts, the government may be bound by the doctrine of promissory estoppel. however, where the question revolves upon the validity of the withdrawal of the previous policy, and introduction of a new policy, the doctrine of legitimate expectation is required to be angulated thus: whether it was revised by a policy in the public interest or the decision is an abuse of power?. the power to lay policy by executive decision or legislative action (plenary or subordinate) includes the power to withdraw the same unless, in the former case, it is a malafide exercise or an abuse of power. the doctrine of legitimate expectation plays no role when the authority is empowered to take a decision by an executive policy or under law. the court leaves the authority to decide its full range of choices within the executive or legislative power. in formulating executive or legislative policy, for grant of licences, divers.factors are taken into consideration. in matters of economic policy, the court gives a large leeway to the executive and the legislature. (p.t.r.exports (madras) (p) ltd.v.union of india15).the rules no doubt empower the authorities to take action against the errant a-4 retail shops which do not prevent consumption of imfl & fl adjacent thereto. the rule making authority has, however, chosen to prescribe establishing a permit room as a condition for renewal of the licence for the excise year 2013-14. the manner in which consumption of alcohol should be regulated, be it by penal action or otherwise, is for the legislature or rule making authority to decide. this court may not be justified in stipulating that a particular mode be followed instead of another as these are all matters of legislative or executive policy. the grant of licence depends upon the policy prevailing on the date of the grant of a licence. in the present case, the subordinate legislative policy, of requiring each a-4 retail shop to establish a permit room adjacent thereto, was introduced by g.o.ms.no.357 dated 22.06.2013 much before the commencement of the renewal period from 01.07.2013 onwards. the court would, therefore, not bind the government to the policy prevailing earlier. a prior decision would not bind the government for all times to come. when the government is satisfied that a change in the policy is necessary in the public interest, it is entitled to revise the policy and lay down a new policy. the court would, therefore, allow free play to the government to evolve policy in the public interest and to act thereupon. the petitioners have no vested or accrued right for issuance of permits nor is the government bound by its previous policy. the government is also not barred, by promissory estoppel or legitimate expectation, from evolving a new policy. (p.t.r.exports (madras) (p) ltd.15).the subordinate legislative policy introduced newly from the excise year 2013-14, of all a-4 retail shops having an adjacent permit room, does not necessitate interference. nothing prevented the petitioners.if they so desired, from refraining to renew their licences if they felt that opening a permit room would adversely affect them financially or otherwise. having paid the requisite licence fee, and having sought renewal for the excise year 2013-2014, it is not now open to the petitioners to contend that they should be permitted to withdraw their request for renewal of licence, and be refunded the licence fee paid by them earlier, merely on the ground that the respondents are insisting that the petitioners pay a sum of rs.2,00,000/- and establish a permit room. the submission of both sr.a. jagannadha rao and sr.k. durga prasad, learned counsel for the petitioners.on the plea of discrimination and consequent violation of article 14 of the constitution of india is not without merit. sr.k. durga prasad, learned counsel, would point out that in nizamabad town twenty a4 shop licences were granted; of these, only ten shops had paid the permit room licence fee of rs.2,00,000/-; even, amongst this ten shops, only one has opened a tin-roofed permit room otherwise open to all natural elements; and, even among the other ten (i.e.those who have not paid the additional permit room fee of rs.2,00,000/-).the respondents are selectively directing apbcl to supply imfl and fl to some of such shops. while denying the allegation of selective supply/distribution of imfl & fl, learned government pleader for prohibition & excise would fairly state that, among the shops in nizamabad town, only ten have paid the licence fee of rs.2,00,000/-, of which one alone has established a permit room; and the remaining nine shops, which have paid the permit room licence fee of rs.2,00,000/-, are being supplied imfl and fl by apbcl as they had sought time to establish a permit room. while the fundamental right under article 19 of the constitution of india, for carrying on business in the trade of liquor, is not available as it is res extra commercium, article 14 of the constitution of india is, undoubtedly, attracted even in the matter of trade in liquor. (kerala samsthana chethu thozhilali union13; v.k.ashokan v. assistant excise commissioner16).the state, while parting with its exclusive privilege or a part thereof, may impose conditions but, once such terms and conditions are laid down by reason of a statute or a statutory rule, they cannot be deviated from. (kerala samsthana chethu thozhilali union13).the state can adopt any mode of selling licences, for trade or business in liquor, with a view to maximise its revenue as long as the method adopted is not discriminatory. (khoday distilleries ltd.v.state of karnataka17).amongst those carrying on business in the trade of liquor, the respondents would not be justified in according differential and selective treatment to those, who have paid rs.2,00,000/- as permit room licence fee, and directing apbcl to supply imfl and fl to them even though they have not established a permit room. the object of establishing a permit room cannot be negated, or converted to a revenue generation exercise, as the requirement of establishing a permit room is to ensure that unruly elements do not indulge in public consumption of alcohol, and to avoid their misbehaving thereafter with the general public passing nearby the a4 retail shops. an affidavit is now filed by the commissioner of prohibition & excise stating that three months time would be, uniformly, granted to all a-4 shops, licensed in the state of a.p., for opening a permit room; and none of those shops, which have failed to establish a permit room, shall be proceeded against within this period provided all of them pay rs.2,00,000/- towards the permit room licence fee. sr.a.jagannadha rao, learned counsel for the petitioner, would seek time for the petitioners herein to pay the permit room licence fee of rs.2,00,000/-. i consider it appropriate, in such circumstances, to direct the respondents to permit the petitioners.and other similarly situated a4 shop licencees, to pay the permit room licence fee of rs.2,00,000/- within a period of four weeks from today; and grant them three months time, on par with all others.to establish a permit room provided they pay the licence fee of rs.2,00,000/- within four weeks from today. the respondents shall also ensure that all a4 retail shops, in the state of andhra pradesh, pay the prescribed permit room licence fee of rs.2,00,000/- and establish a permit room within a period of three months. the respondents shall, thereafter, take action against all such a4 retail shops which have not established a permit room, and not resort to selective action against the defaulters.the writ petitions stand disposed of accordingly. the miscellaneous petitions pending, if any, shall also stand disposed of. there shall be no order as to costs. _____________________________ ramesh ranganathan, j07h august, 2013.
Judgment:

THE HON'BLE Sr.JUSTICE RAMESH RANGANATHAN WRIT PETITION No.21097 OF2013and batch Dated 07-08-2013 M/s.Durga Wines, A4 shop No.02, Nizamabad Town rep.

by its Prop:Mr.Bantu Satyajith Reddy....Petitioner Govt.

of A.P.rep., by its Secretary (Prohibition and Excise).Secretariat, Hyderabad & Ors.....Respondents Counsel for the petitioner:Sr.K.Durgaprasad Counsel for respondents: G.P.for Prohibition and Excise HEAD NOTE: ?.Citations: 1 (1975) 2 SCC482=AIR1976SC2632 (1967) 1 S.C.R.120 3 (1973) 3 SCC8894 AIR1974SC16825 1996) 4 SCC766 (1997) 116 PLR2527 (2004) 1 SCC7028 (1955) 2 SCR603= AIR1955SC6619 (1898) 2 Ch 28 10 1898 AC57111 (2004) 2 SCC112 (2004) 11 SCC2613 (2006) 4 SCC32714 (2011) 334 ITR387(AP) 15 (1996) 5 SCC26816 (2009) 14 SCC8517 (1995) 1 SCC574THE HON'BLE Sr.JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.21097, 22275, 22276, 22283 & 22318 OF2013Common Order:

The question which arises for consideration, in this batch of Writ Petitions, is whether the amended Rule 28 (2) of the Andhra Pradesh Excise (Grant of Licence of Selling by Shop and Conditions of Licence) Rules, 2012 (for brevity, 'the 2012 Rules').and its proviso, are directory or mandatory; and whether non-compliance therewith would justify the respondents directing the Andhra Pradesh Bewerages Corporation Limited (hereinafter referred to as 'APBCL') not to supply Indian Made Foreign Liquor and Foreign Liquor (hereinafter referred to as 'IMFL' and FL' respectively) to the subject A4 shops.

It would suffice, for the disposal of this batch of Writ Petitions, if the facts in W.P.No.22275 of 2013 are noted.

The petitioner was allotted an A4 shop at Nizamabad town, on a yearly rental of Rs.46,00,000/- for the period from 01.07.2012 to 30.06.2013, and was granted a license to sell IMFL & FL thereat.

The licencee was entitled for renewal of the license for the year 2013-2014 also, for which they paid the yearly rental fiRs.instalment of Rs.15,33,500/-, and a bank guarantee for the remaining balance of Rs.30,68,000/-.

The petitioner claims to be still running the subject A-4 shop.

It is their case that, as they had complied with the stipulated conditions for renewal of the licence, APBCL was bound to supply IMFL and FL to their shop; the fourth respondent was insisting that they pay an additional sum of Rs.2,00,000/-, towards licence fee for a permit room; they neither desire to, nor can they, establish a permit room in the absence of space either in the existing shop or adjacent thereto; it is not possible for them to obtain a premises on lease in nearby areas; and, if the respondents insist upon their taking a permit room license for the year 2013-2014 on payment of Rs.2,00,000/-, they, and other similarly situated, do not want to renew the A4 shop licence for the year 2013- 2014; and the respondents should be directed to refund the amounts paid by them and return their bank guarantee.

Both Sr.K.

Durgaprasad and Sr.A.

Jagannadha Rao, learned counsel for the petitioneRs.would submit that Rule 28(2) of the Rules is directory in nature; as the petitioners were granted a licence in the year 2012-2013 and are entitled, as of right, for renewal thereof, it is only those conditions which were stipulated earlier, for grant of licence for the year 2012-2013, which can alone be imposed even for renewal of the licence for the year 2013-2014; the distinction between a bar and an A4 shop is that no alcohol can be consumed at an A4 shop; the petitioners cannot be compelled to pay an additional sum of Rs.2,00,000/- merely because a few of the A4 shops were illegally permitting, or turning a blind eye to, consumption of liquor adjacent to their premises; the Rules empower the authorities to cancel or suspend the licence of an A4 shop in case alcohol is being consumed adjacent thereto; and the action of the respondents, in insisting on payment of permit room licence fee of Rs.2,00,000/- , as a condition for supply of IMFL and FL from APBCL, is arbitrary and illegal.

Learned counsel would further contend that this Rule is not even uniformly applied; and the respondents are supplying IMFL and FL to those A4 licensed shops who paid the permit room license fee of Rs.2,00,000/- though no permit room has been opened; and, even among those who have not paid the permit room licence fee of Rs.2,00,000/-, IMFL and FL is being supplied to a few.

The case of the respondents, (as is reflected in the counter affidavit filed in W.P.No.21097 of 2013).is that the State Government framed a new Prohibition & Excise policy for the year 2013-2014, in G.O.Ms.No.358 dated 22.06.2013 for disposal of Retail Liquor Outlets, which requires the privilege of selling liquor through retail shop to be renewed on collecting the fixed licence fee as per 2011 census; circular instructions were issued, pursuant thereto, to collect 1/3rd of the annual licence fee and a bank guarantee for the remaining 2/3rd annual licence fee; the 2012 Rules were amended and notified in G.O.Ms.No.357 dated 22.06.2013, and the proviso to Rule 25(2) was deleted; Rs.1,00,000/-, as stipulated earlier in Rule 26, was substituted by Rs.2,00,000/-; as a result all villages, towns, municipalities and municipal corporations, whose population exceeds 5000, are entitled for grant of a permit room licence on payment of the licence fee of Rs.2,00,000/- for the year 2013- 2014; it is only on payment thereof that the Depot Managers of APBCL are being instructed to supply IMFL and FL to the A-4 shops; and the action of the respondents, in this regard, is not illegal.

The 2012 Rules, notified in G.O.Ms.No.391 dated 18.06.2012, superseded the earlier Andhra Pradesh Excise (Lease of Right of Selling by Shop and Conditions of Licence) Rules, 2005 (for brevity, 'the 2005 Rules') issued in G.O.Ms.No.998 dated 24.05.2005.

Rule 27 (2) of the 2005 Rules read thus:- ".The holder of licence in Form A-4 may be permitted to have a permit room in Form A-4 (B) located in a place whose population is 5000 and above".The word 'may' in Rule 27 (2) of the 2005 Rules has been substituted by the word 'shall' in Rule 25 (2) of the 2012 Rules.

It is useful in this context to extract Rule 25 (2) of the 2012 Rules and its proviso which read as under: ".(2) The holder of Licence in Form A-4 in places, whose population is 5000 and above, shall be licensed in Form A-4(B) to have a Permit Room.

Provided that no such Permit Room will be granted in Municipal Corporation and Municipalities and within a belt area of 5 kms from the periphery of such Municipal Corporation and within a belt area of 2 kms from the periphery of such Municipalities and in Tourism centres.

The premises selected for permit room must be adjacent to the existing A-4 Licensed premises and it must have a minimum plinth area of 15 sq.mts for consumption of liquor with additional facilities of sanitation such as wash basin, water closet and drinking water.".

The proviso to Rule 25 (2) was deleted by an amendment to the said Rules which was notified in G.O.Ms.No.357 dated 22.06.2013.

As noted hereinabove, Rule 25(2) of the 2012 Rules uses the word ".shall".The term 'shall', in its ordinary significance, is mandatory and the court shall, ordinarily, give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence or would be at variance with the intent of the Legislature or the Rule making authority to be collected from other parts of the Act/Rules.

The construction of the said expression depends on the provisions of a particular Act/Rules, the setting in which the expression appeaRs.the object for which the direction is given, the consequences that would flow from the infringement of the direction and such other considerations.

(Govindlal Chhaganlal Patel v.

Agricultural Produce Market Committee1; Khub Chand v.

State of Rajasthan2; State of U.P.v.

Babu Ram Upadhya3).While the use of the word ".shall".

or ".may".

is not conclusive on the question whether the particular requirement of law is mandatory or directory, the circumstance that the Legislature/Rule making authority has used a language of compulsive force is always of great relevance and, in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the statute ought to be construed as peremptory.

One of the fundamental rules of interpretation is that if the words of a statute/Rule are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature/Rule making authority.

(Govindlal Chhaganlal Patel1).In determining the question whether a provision is mandatory or directory, the subject-matter, the import of the provision, the relation of that provision to the general object intended to be secured by the Act/Rules will decide whether the provision is directory or mandatory.

It is the duty of the Courts to get at the real intention of the Legislature by carefully attending to the whole scope of the provision to be construed.

'The key to the opening of every law is the reason and spirit of the law, it is the animus imponentis, the intention of the law-maker expressed in the law itself, taken as a whole.

(Govindlal Chhaganlal Patel1; In re Presidential Poll4).No universal rule can be laid down and, in each case, one must look to the subject-matter and consider the importance of the provision disregarded, and the relation of that provision to the general object intended to be secured.

While the proviso to Rule 25(2).which was applicable for the earlier excise year 2012-2013, prohibited a permit room licence being granted in Municipal Corporations and Municipalities, and within a belt area of 2 kms from the periphery of such Municipalities and in Tourism centres, Rule 25 (2) of the 2012 Rules, consequent upon the deletion of its proviso, requires the holder of a licence in form-A-IV, in all such places where the population is 5000 and above, to obtain a licence in Form-A-IV (B) to have a permit room.

Rule 25(2) of the 2012 Rules, consequent upon deletion of its proviso by G.O.Ms.No.357 dated 22.06.2013, is mandatory.

The contentions that Rule 25 (2) of the 2012 Rules is directory; it is only such of those A4 licensed shops which desire to have a permit room which need to pay the licence fee of Rs.2,00,000/-; and the respondents are not entitled to force the A4 licenses to pay Rs.2,00,000/- or compel them to open a permit room, therefore, need only to be noted to be rejected.

As noted hereinabove, while Rule 27 (2) of the 2005 Rules used the word 'may', the substituted Rule 25 (2) of the 2012 Rules uses the word 'shall'.

The Heydon's Rule is that, for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law).four things are to be discerned and considered: (1) what was the common law before the making of the Act/Rules; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy the legislature has resolved to cure; and (4) the true reason of the remedy.

Then the Court is always to make such construction as shall: (a) suppress the mischief and advance the remedy; and (b) suppress subtle inventions and evasions for the continuance of the mischief pro privato commodo (for private benefit).and (c) add force and life to the cure and remedy according to the true intent of the makers of the Act/Rules pro publico (for the public good).The Heydon's rule is applied in order to suppress the mischief which was intended to be remedied as against the literal rule which could have otherwise covered the field.

(Parayankandiyal Eravath Kanapravan Kalliani Amma v.K.Devi5; and Goodyear India Ltd.v.State of Haryana6; Ameer Trading Corpn.

Ltd.v.Shapoorji Data Processing Ltd.,7; Halsbury's Laws of England, Vol.

44(1).4th Reissue, para 1474, pp.

906-07; Bengal Immunity Co.Ltd.v.State of Bihar8; In re Mayfair Property Company9; Eastman Photographic Material Company v.

Comptroller General of Patents, Designs and Trade Marks10; National Insurance Co.Ltd.v.Baljit Kaur11).It is common knowledge that in open places, in and around several A4 retail shops, large scale consumption of alcohol takes place and, in an inebriated condition, such persons cause nuisance to, and harass, passers-by more particularly women and children.

It is difficult for those, who live in and around such A4 retail shops, to even commute near, or pass by, such shops for fear of being subjected to needless abuse and humiliation.

Insistence on all A- 4 retail shops, in places where the population exceeds 5000, establishing permit rooms would substantially reduce, if not all together eliminate, consumption of alcohol in open places, or on public roads, adjacent to A4 shops.

The requirement of a permit room being established by all A4 shop licencees, in areas in which the population exceeds 5000, is in the larger public interest of preventing consumption of alcohol in open places or on public roads adjacent to A4 shops, and thereby ensure that such consumption is restricted within a closed enclosure adjacent to the licenced A4 shops.

It is with a view to ensure this laudable object, of preventing consumption of alcohol in public places, that the Rule making authority has substituted the word ".may".

in Rule 27(2) of the 2005 Rules by the word ".shall".

in Rule 25(2) of the 2012 Rules and has deleted its proviso by the amendment notified in G.O.Ms.No.357 dated 22.06.2013.

I find it difficult, therefore, to accept the submission that Rule 25 (2) of the 2012 Rules, as amended by G.O.Ms.No.357 dated 22.06.2013, is merely directory and not mandatory.

The Heydon's Rule applies and, consequently, the use of the word 'shall' in Rule 25(2) of the 2012 Rules would require mandatory compliance.

It is necessary to note that there is no challenge to the validity of the deletion, of the proviso to Rule 25(2).in any of these Writ Petitions.

No one has a right to carry on any business in liquor as it is considered ".res extra commercium".Trade in liquor is not a fundamental right.

It is a privilege of the State.

The State parts with this privilege for revenue considerations.

(State of Punjab v.

Devans Modern Breweries Ltd12; Kerala Samsthana Chethu Thozhilali Union v.

State of Kerala13).As the business of trading in intoxicating liquor is res extra commercium, a high degree of control is exercised by law to ensure that the business of trading in liquor is carried on strictly in accordance with the provisions of the A.P.Excise Act, the rules made thereunder, and the terms and conditions of the licence granted in favour of the licensee.

(Commissioner of Income Tax, Vijayawada v.

M/S.Swarna Bar & Restaurant14).The petitioners cannot claim to have a fundamental right to carry on business in trading in liquor.

Their right, if any, can be regulated by statutory provisions, both plenary and subordinate.

The petitioners contention that they have a legitimate expectation of the 2012 Rules, in force when they were granted licence on 01.07.2012, being continued even for the licence renewal period from 01.07.2013 to 30.06.2014 does not merit acceptance.

The licence year 2013-2014 commenced from the 1st of July, 2013.

The proviso to Rule 25 (2) was deleted and notified prior thereto by G.O.Ms.No.357 dated 22.06.2013.

The petitioners cannot, therefore, claim to be unaware of the deletion of the proviso to Rule 25 (2) of the 2012 Rules.

It is true that, in a given set of facts, the Government may be bound by the doctrine of promissory estoppel.

However, where the question revolves upon the validity of the withdrawal of the previous policy, and introduction of a new policy, the doctrine of legitimate expectation is required to be angulated thus: whether it was revised by a policy in the public interest or the decision is an abuse of power?.

The power to lay policy by executive decision or legislative action (plenary or subordinate) includes the power to withdraw the same unless, in the former case, it is a malafide exercise or an abuse of power.

The doctrine of legitimate expectation plays no role when the authority is empowered to take a decision by an executive policy or under law.

The court leaves the authority to decide its full range of choices within the executive or legislative power.

In formulating executive or legislative policy, for grant of licences, diveRs.factors are taken into consideration.

In matters of economic policy, the court gives a large leeway to the executive and the legislature.

(P.T.R.Exports (Madras) (P) Ltd.v.Union of India15).The Rules no doubt empower the authorities to take action against the errant A-4 retail shops which do not prevent consumption of IMFL & FL adjacent thereto.

The Rule making authority has, however, chosen to prescribe establishing a permit room as a condition for renewal of the licence for the excise year 2013-14.

The manner in which consumption of alcohol should be regulated, be it by penal action or otherwise, is for the legislature or rule making authority to decide.

This Court may not be justified in stipulating that a particular mode be followed instead of another as these are all matters of legislative or executive policy.

The grant of licence depends upon the policy prevailing on the date of the grant of a licence.

In the present case, the subordinate legislative policy, of requiring each A-4 retail shop to establish a permit room adjacent thereto, was introduced by G.O.Ms.No.357 dated 22.06.2013 much before the commencement of the renewal period from 01.07.2013 onwards.

The Court would, therefore, not bind the Government to the policy prevailing earlier.

A prior decision would not bind the Government for all times to come.

When the Government is satisfied that a change in the policy is necessary in the public interest, it is entitled to revise the policy and lay down a new policy.

The Court would, therefore, allow free play to the Government to evolve policy in the public interest and to act thereupon.

The petitioners have no vested or accrued right for issuance of permits nor is the Government bound by its previous policy.

The Government is also not barred, by promissory estoppel or legitimate expectation, from evolving a new policy.

(P.T.R.Exports (Madras) (P) Ltd.15).The subordinate legislative policy introduced newly from the Excise Year 2013-14, of all A-4 retail shops having an adjacent permit room, does not necessitate interference.

Nothing prevented the petitioneRs.if they so desired, from refraining to renew their licences if they felt that opening a permit room would adversely affect them financially or otherwise.

Having paid the requisite licence fee, and having sought renewal for the excise year 2013-2014, it is not now open to the petitioners to contend that they should be permitted to withdraw their request for renewal of licence, and be refunded the licence fee paid by them earlier, merely on the ground that the respondents are insisting that the petitioners pay a sum of Rs.2,00,000/- and establish a permit room.

The submission of both Sr.A.

Jagannadha Rao and Sr.K.

Durga Prasad, learned counsel for the petitioneRs.on the plea of discrimination and consequent violation of Article 14 of the Constitution of India is not without merit.

Sr.K.

Durga Prasad, learned counsel, would point out that in Nizamabad town twenty A4 shop licences were granted; of these, only ten shops had paid the permit room licence fee of Rs.2,00,000/-; even, amongst this ten shops, only one has opened a tin-roofed permit room otherwise open to all natural elements; and, even among the other ten (i.e.those who have not paid the additional permit room fee of Rs.2,00,000/-).the respondents are selectively directing APBCL to supply IMFL and FL to some of such shops.

While denying the allegation of selective supply/distribution of IMFL & FL, learned Government Pleader for Prohibition & Excise would fairly state that, among the shops in Nizamabad town, only ten have paid the licence fee of Rs.2,00,000/-, of which one alone has established a permit room; and the remaining nine shops, which have paid the permit room licence fee of Rs.2,00,000/-, are being supplied IMFL and FL by APBCL as they had sought time to establish a permit room.

While the fundamental right under Article 19 of the Constitution of India, for carrying on business in the trade of liquor, is not available as it is res extra commercium, Article 14 of the Constitution of India is, undoubtedly, attracted even in the matter of trade in liquor.

(Kerala Samsthana Chethu Thozhilali Union13; V.K.Ashokan v.

Assistant Excise Commissioner16).The State, while parting with its exclusive privilege or a part thereof, may impose conditions but, once such terms and conditions are laid down by reason of a Statute or a statutory rule, they cannot be deviated from.

(Kerala Samsthana Chethu Thozhilali Union13).The State can adopt any mode of selling licences, for trade or business in liquor, with a view to maximise its revenue as long as the method adopted is not discriminatory.

(Khoday Distilleries Ltd.v.State of Karnataka17).Amongst those carrying on business in the trade of liquor, the respondents would not be justified in according differential and selective treatment to those, who have paid Rs.2,00,000/- as permit room licence fee, and directing APBCL to supply IMFL and FL to them even though they have not established a permit room.

The object of establishing a permit room cannot be negated, or converted to a revenue generation exercise, as the requirement of establishing a permit room is to ensure that unruly elements do not indulge in public consumption of alcohol, and to avoid their misbehaving thereafter with the general public passing nearby the A4 retail shops.

An affidavit is now filed by the Commissioner of Prohibition & Excise stating that three months time would be, uniformly, granted to all A-4 shops, licensed in the State of A.P., for opening a permit room; and none of those shops, which have failed to establish a permit room, shall be proceeded against within this period provided all of them pay Rs.2,00,000/- towards the permit room licence fee.

Sr.A.Jagannadha Rao, learned counsel for the petitioner, would seek time for the petitioners herein to pay the permit room licence fee of Rs.2,00,000/-.

I consider it appropriate, in such circumstances, to direct the respondents to permit the petitioneRs.and other similarly situated A4 shop licencees, to pay the permit room licence fee of Rs.2,00,000/- within a period of four weeks from today; and grant them three months time, on par with all otheRs.to establish a permit room provided they pay the licence fee of Rs.2,00,000/- within four weeks from today.

The respondents shall also ensure that all A4 retail shops, in the State of Andhra Pradesh, pay the prescribed permit room licence fee of Rs.2,00,000/- and establish a permit room within a period of three months.

The respondents shall, thereafter, take action against all such A4 retail shops which have not established a permit room, and not resort to selective action against the defaulteRs.The Writ Petitions stand disposed of accordingly.

The miscellaneous petitions pending, if any, shall also stand disposed of.

There shall be no order as to costs.

_____________________________ RAMESH RANGANATHAN, J07h August, 2013.