M/s.gayatri Liquor Shop, Vs. State Of Karnataka - Court Judgment

Excerpt:
r in the high court of karnataka dharwad bench dated this the15h day of june, 2021 before the hon’ble mr. justice hemant chandangoudar w.p no.147875/2020 connected with w.p.nos.106715/2018, 106956/2018, 102705/2019, 146644/2020, 147315/2020, 147472/2020, 147539/2020, 147559/2020, 147637/2020, 147638/2020, 146935/2020, 147962/2020 and 147867/2020 (excise) in w.p.no.147875/2020: between: shri raju s/o ramachandra tikute, age 43 years, occ: agriculture, r/o galataga, tq: nippani, dist: belagavi. ...petitioner (by sri shivaraj p mudhol, advocates) and:1. the state of karnataka represented by its secretary, department of excise, m s building, bengaluru-560 001.2. the commissioner for excise 2 floor, ttmc building, nd 2 `a’ block, bmtc, shantinagar, bengaluru-560002.3. the deputy.....

Judgment:

R IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE15H DAY OF JUNE, 2021 BEFORE THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR W.P No.147875/2020 connected with W.P.Nos.106715/2018, 106956/2018, 102705/2019, 146644/2020, 147315/2020, 147472/2020, 147539/2020, 147559/2020, 147637/2020, 147638/2020, 146935/2020, 147962/2020 and 147867/2020 (EXCISE) In W.P.No.147875/2020: BETWEEN: Shri Raju S/o Ramachandra Tikute, Age 43 years, Occ: Agriculture, R/o Galataga, Tq: Nippani, Dist: Belagavi. ...Petitioner (By Sri Shivaraj P Mudhol, Advocates) AND:

1. The State of Karnataka Represented by its Secretary, Department of Excise, M S Building, Bengaluru-560 001.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd 2 `A’ Block, BMTC, Shantinagar, Bengaluru-560002.

3. The Deputy Commissioner Belagavi, District Belagavi-590001.

4. The Deputy Commissioner (Excise) Belgavi North District, H Q Chikkodi, Sai Plaza Nippani Road, Chikkodi District Belgavi-591201.

5. The Deputy Superintendent of Excise Chikkodi Sub-Division, Chikkodi Dist: Belagavi – 591 201.

6. Inspector of Excise Chikkodi Range Chikkodi, Dist: Belagavi – 591 201.

7. The Mysore Sales International Ltd MSIL House No.36, Cunningam Road, Bengaluru-560052, by its Managing Director.

8. District Liaison Officer Mysore Sales International Ltd, Belagavi District, Belagavi-590001.

9. Sri Malappa Sidram Psuture Age 47 years, Occ: Agriculture, R/o Galataga, Taluk Nippani, Dist: Belagavi – 590 001. ... Respondents (By Smt.K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R6; Sri Mrutyunjay S Hallikeri, Advocate for R7, Sri Harshawardan M Patil, Advocate for R9, R8 – served) 3 This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as it violates of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P No.106715/2018: BETWEEN: Manjunath s/o Ramayya Ilager, Age 49 years, Occ: Business, Proprietor of Suresh Wines Sammasagi (Hale Sammasagi), Tq. Hangal, Dist. Haveri. ...Petitioner (By Sri F V Patil, Advocate) AND:

1. State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru.

2. The Commissioner of Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru.

3. The Deputy Commissioner Haveri, Tq. & Dist. Haveri.

4. The Deputy Commissioner for Excise, Haveri, Tq. & Dist. Haveri. 4

5. The Mysore Sales International Limited, Rep. by Managing Director, Cunningham Road, Bengaluru. ... Respondents (By Smt. K Vidyawati, Additional AG for R1 to R4, Sri Mrutyunjay S Hattikeri, Advocate for R5) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P. No.106956/2018: BETWEEN:

1. S R Kalal Age 60 years, Occ: Business, R/o Halapet, Kerur Proprietor of Geeta Bar and Restaurant, Kerur, Tq. Badami, Dist. Bagalkote.

2. Smt. Malathi H Meti (M H Meti) Age 54 years, Occ: Business, R/o Kerur, Proprietor of Manjula Wines, Kerur, Tq. Badami, Dist. Bagalakote.

3. Smt. P M Patil Age 50 years, Occ: Business, R/o Kerur, Proprietor of Anand Bar and Restaurant, Kerur Tq. Badami, Dist. Bagalakote.

4. B S Bannur, Age 24 years, 5 Occ: Business, R/o Kerur Proprietor of Laxmi Bar and Restaurant, Kerur, Tq. Badami, Dist. Bagalakote.

5. Smt. Suvarna T Pujar Age 53 years, Occ: Business R/o Kerur, Proprietor of Prabhat Wine Center, Kerur, Tq. Badami Dist. Bagalakote. ...Petitioners (By Sri F V Patil, Advocate) AND:

1. State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru.

3. The Deputy Commissioner Bagalakote, Tq. & Dist. Bagalakote.

4. The Deputy Commissioner for Excise, Bagalakote, Tq. & Dist. Bagalakote.

5. The Mysore Sales International Limited, Rep. by Managing Director, Cunningham Road, Bengaluru.

6. The General Manager Beverage Division, Mysore Sales International Limited, 6 Cunningham Road, Bengaluru. ...Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R4, Sri Mrutyunjay S Hattikeri, Advocate for R5, R6 - served) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P. No.102705/2019: BETWEEN:

1. Shamiulla Shadaguppi Age 30 years, Occ: Agriculture R/o Kallapur, Tq. Hanagal, Dist. Haveri.

2. Shri Shaila Ningappa Sunkad Age 37 years, Occ: Household work & Coolie work R/o Kallapur Tq. Hanagal, Dist. Haveri.

3. Renuka W/o Irappa Koragar Age 57 years, Occ: Household work & Coolie work, R/o Kallapur Tq. Hanagal, Dist. Haveri. ...Petitioners (By Sri F V Patil, Advocate) AND:

1. State of Karnataka Rep. by its Secretary, 7 Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru.

3. The Deputy Commissioner Haveri, Tq. & Dist. Haveri.

4. The Deputy Commissioner for Excise, Haveri, Tq. & Dist. Haveri.

5. The Mysore Sales International Limited, Rep. by Managing Director, Cunningham Road, Bengaluru.

6. Zilla Samparka Adhikari Beverage Division, The Mysore Sales International Limited, Haveri, Tq. & Dist. Haveri. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R4, Sri Mrutyunjay S Hattikeri and Sri B S Goutham, Advocate for R5, R6 – ack. received without seal) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc.,. In W.P. No.146644/2020: BETWEEN M/s. Lotus Wine Shop At Belur, Tq. & Dist. Dharwad, Rep. by its Partner, 8 Shri Narayan Chandrashekar Kalal, Age 53 years, Occ. Business, R/o Lotus Layout, Dharwad Tq. & Dist. Dharwad-580007. ...Petitioner (By Sri F V Patil, Advocate) AND:

1. State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru-560 001.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru-560006.

3. The Deputy Commissioner Dharwad, Tq. & Dist. Dharwad-580007.

4. The Deputy Commissioner for Excise Dharwad Tq. & Dist. Dharwad – 580 007.

5. The Mysore Sales International Limited, Rep. by Managing Director, Cunningham Road, Bengaluru-560001.

6. The General Manager Beverage Division, Mysore Sales International Limited, CTS No.477/1, K-2, R R Mahalakshmi, 3 Floor, rd Desai Cross Pinto Road, Hubballi-580020 Dist: Dharwad. ... Respondents 9 (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarnim AGA for R1 to R4, R5 & R6 – served) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P. No.147315/2020: BETWEEN: M/s. Gayatri Liquor Shop At Varur, Tq. Hubballi Dist. Dharwad, Rep. by its Partner Shri Narayan Chandrashekar Kalal, Age 53 years, Occ. Business, R/o VPC2278/1, Varur Village, Tq. Hubballi, Dist. Dharwad-580001. ...Petitioner (By Sri F V Patil, Advocate) AND:

1. State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru-560 001.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru-560001. 10

3. The Deputy Commissioner Dharwad, Tq. & Dist. Dharwad-580001.

4. The Deputy Commissioner for Excise, Dharwad, Tq. & Dist. Dharwad – 580 001.

5. The Mysore Sales International Limited Rep. by Managing Director, Cunningham Road, Bengaluru-560001.

6. The General Manager Beverage Division, Mysore Sales International Limited, CTS No.977/1K-2 R R, Mahalakshmi, 3 Floor, rd Desai Cross, Pinto Road, Tq. Hubballi, Dist: Dharwad-580001. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R4, R4 & R5 – served) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc.,. In W.P.No.147472/2020: BETWEEN1 Nagaraj D Jannu Age 36 years, Occ. Busines, R/o Chikkerur, Tq. Hirekerur – 581111, Dist. Haveri. 11

2. Smt. V N Kalal Age 56 years, Occ. Business, R/o Medur, Tq. Hirekerur – 581111, Dist. Haveri.

3. Venkatesh D Jannu Age 33 years, Occ. Business, R/o Hirekerur, Tq. Hirekerur –581111, Dist. Haveri. ...Petitioners (By Sri F V Patil, Advocate) AND:

1. State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru- 560 002.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru-560002.

3. The Deputy Commissioner Haveri, Tq. & Dist. Haveri - 580010.

4. The Deputy Commissioner of Excise, Haveri, Tq. & Dist. Haveri – 580 110.

5. The Mysore Sales International Limited, Rep. by Managing Director Cunningham Road, Bengaluru-560002. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R4, Sri M S Hallikeri, Advocate for R5 12 This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P.No.147539/2020: BETWEEN: M/s. Maharaja Wines Rep. by its Partner, Sri Manohar, S/o Venugopalagouda, Age 39 years, Occ. Business, R/o VPC920 Motebennur Tq. Byadagi -581106, Dist. Haveri. ...Petitioner (By Sri F V Patil, Advocate) AND:

1. The State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru-560 001.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru-560002.

3. The Deputy Commissioner Haveri, Tq. & Dist. Haveri - 580010.

4. The Deputy Commissioner of Excise Haveri, Tq. & Dist. Haveri – 580 110. 13

5. The Mysore Sales International Limited, Rep. by Managing Director, Cunningham Road, Bengaluru-560002. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R4, Sri M S Hallikeri, Advocate for R5) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P.No.147559/2020: BETWEEN: Krishnaji Ramanna Kalal Age 74 years, Occ. Business, R/o CTS No.1001 & 1002/A Door No.3950/28, Byadagi Tq. Byadagi, Dist. Haveri – 581106. ...Petitioner (By Sri F V Patil, Advocate) AND:

1. The State of Karnataka Rep. by its Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru-560 001.

2. The Commissioner for Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru-560002. 14

3. The Deputy Commissioner Haveri, Tq. & Dist. Haveri - 580010.

4. The Deputy Commissioner of Excise Haveri, Tq. & Dist. Haveri – 580 110.

5. The Mysore Sales International Limited Rep. by Managing Director, Cunningham Road, Bengaluru-560002. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R4, Sri M S Hallikeri, Advocate for R5) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P.No.147637/2020: BETWEEN: M/s. Regal Wines Represented by its Partner, Shri Anil s/o Bhimarao Kapali, Age 38 years, Occ: Managing Partner at M/s. Regal Wines, R/o R S No.2166, Vikrampur Athani, Dist: Belagavi, Pin-591304. ...Petitioner (By Sri Jagadish Patil and Sri Pruthviraj P Hithalamani, Advocates) AND:

1. The State of Karnataka Rep. by its Secretary, Department of Finance, 15 Vidhan Soudha, Bengaluru-560 001.

2. The State of Karnataka Represented by its Secretary, Department of Excise, Vidhan Soudha, Bengaluru-560001.

3. The Excise Commissioner Office of the Excise Commissioner, BMTC Building, TTMC `A’ Block, Shantinagar, Bengaluru-560001.

4. The Deputy Commissioner Belagavi District, Belagavi-590001.

5. The Deputy Commissioner of Excise Belagavi District, Belagavi-590001.

6. The Managing Director Mysuru Sales International Limited, MSIL House, Cunningham Road, Bengaluru-560052.

7. Uday Kasappa Nimbaragi Age 22 years, Occ: Business R/o Abbihal Road, Nimbaragi Tota, Athani Rural, Tq: Athani, Dist: Belagavi– 591304. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R5, Sri H M Patil, Advocate for R7, R6 – ack. NYR) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 by declaring the same as violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. 16 In W.P.No.147638/2020: BETWEEN: M/s Sarovara Wines Represented by its Partner Shri Sachin s/o Sadashiv Butali, Age 26 years, Occ: Managing, Partner at M/s Sarovara Wines, R/o R S No.117/1, Darur, Tq: Athani Dist: Belagavi. ...Petitioner (By Sri Jagadish Patil and Sri Pruthviraj P Hithalamani, Advocates) AND:

1. The State of Karnataka Rep. by its Secretary, Department of Finance, Vidhan Soudha, Bengaluru-560 001.

2. The State of Karnataka Represented by its Secretary, Department of Excise, Vidhan Soudha, Bengaluru-560001.

3. The Excise Commissioner Office of the Excise Commissioner, BMTC Building, TTMC `A’ Block, Shantinagar, Bengaluru-560001.

4. The Deputy Commissioner Belagavi District, Belagavi-590001.

5. The Deputy Commissioner of Excise Belagavi District, Belagavi-590001. 17

6. The Managing Director Mysuru Sales International Limited, MSIL House, Cunningham Road, Bengaluru-560052.

7. Amol Deelipkumar Naik Age Major, Occ: Business R/o Darur, Tq: Athani, Dist: Belagavi,–591304. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R5, Sri H M Patil and Sri Vithal S Teli, Advocate for R7, R6 – served) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 by declaring the same as violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P.No.146935/2020: BETWEEN: Shri Raghavendra S/o Devanna @ Devendra Kamblekar Age 46 years, Occ: Business, R/o Maigur Road, Darga Colony, Jamakhandi – 587301 Tq: Jamakhandi, Dist: Bagalakot. ...Petitioner (By Sri A S Patil, Advocates) AND:

1. The State of Karnataka Represented by its Principal Secretary to the Department of Finance, Vidhan Soudha, Bengaluru-560 001. 18

2. The State of Karnataka Represented by its Secretary to the Department of Excise, M S Building, Bengaluru-560001.

3. The Commissioner of Excise 2 Floor, TTMC `A’ Block, nd BMTC, Shantinagar, Bengaluru-560001.

4. The Deputy Commissioner Belagaum District, Belagaum-590001.

5. The Deputy Commissioner of Excise Belgaumi District, Belgaum-590001.

6. The Mysore Sales International Limited, MSIL House No.36, Cunningham Road, Bengaluru-560052, Represented by its Managing Director.

7. The District Liaison Officer/District Coordinator, Belagavi District, Mysore Sales International Limited 1 Floor, Mujawar Arched st Nehru Nagar, Belagavi-590010.

8. The Deputy Superintendent of Excise Enforcement and Investigation Chikodi Sub-Division, Chikodi-590001 Belgaum.

9. The Excise Inspector Raibag Circle, Raibag-591317 Tq: Raibag, Dist: Belgaum. 19

10. Shri Vasant S/o Maruti Karigar Age 45 years, Occ: Vice president Gram Panchayat, R/o Mekhali, Tq: Raibag-591 317, Dist: Belagavi. ... Respondents (By Smt.K Vidyawati, Additional AG and Sri Vinayaka S Kulkarni, AGA for R1 to R5, Sri H M Patil and Sri Vithal S Teli, Advocate for R7, R6 – served) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 by declaring the same as violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P.No.147962/2020: BETWEEN: Anand Ramachandra Kalal Age 70 years, Occ: Business, R/o Vijaya Nagar, Haveri Town, Tq. and Dist. Haveri. ...Petitioner (By Sri F V Patil, Advocate) AND:

1. The State of Karnataka Rep. by its Under Secretary, Department of Excise, M S Building, Ambedkar Veedhi, Bengaluru.

2. The Commissioner of Excise 2 Floor, TTMC Building, nd A Block, BMTC, Shantinagar, Bengaluru. 20

3. The Deputy Commissioner Haveri, Tq. & Dist. Haveri.

4. The Deputy Commissioner of Excise, Haveri, Tq. & Dist. Haveri.

5. The Mysore Sales International Limited, Rep. by Managing Director Cunningham Road, Bengaluru. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayak S Kulkarni, AGA for R1 to R4, Sri Mrutyunjay S Hattikeri, Advocate for R5) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, as it is violative of Section 71(2)(e) of the Karnataka Excise Act, 1965 etc. In W.P.No.147867/2020: BETWEEN: Ramagouda Narasagouda Patil Age 47 years, Occ: Business, r/o Shiruguppi village, Tq. Kagawad, Dist. Belagavi. ...Petitioner (By Sri H M Patil, Advocate) AND:

1. The State of Karnataka Rep. by its Under Secretary Department of Excise, M S Building, Bengaluru-560001.

2. The Commissioner of Excise BMTC Building, TTMC A Block, 21 Shantinagar, Bengaluru-560001.

3. The Deputy Commissioner Belagavi, Dist: Belagavi.

4. The Deputy Commissioner of Excise, Belagavi District, Belagavi – 590 001.

5. Mysore Sales International Limited, MSIL House Cunningham Road, Bengaluru-560052, Represented by its Managing Director.

6. District Liaison Officer Mysuru Sales International Limited, 1 Floor, Mujawar Building, st Belagavi – 590010.

7. The Deputy Superintendent of Excise Enforcement and Investigation, Chikkodi Sub-Division, Chikkodi, Dist: Belagavi-590001.

8. The Excise Inspector Kagwad Circle, Kagwad, Tq: Kagwad Dist: Belagavi. ... Respondents (By Smt. K Vidyawati, Additional AG and Sri Vinayak S Kulkarni, AGA for R1 to R4 & R7 & R8, Sri B S Goutham, Advocate for R5 & R6) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to issue a writ in the nature of mandamus directing the respondents No.4 and 5 to consider the representation dated 13.11.2018 vide Annexure-G representation dated 17.12.2018 vide Annexure-J and representation/consent letter dated 7.9.2020 vide Annexure-K and direct the respondent No.4 and 5 to establish MSIL Liquor outlet at Shirguppi village. 22 These writ petitions having been heard and reserved for orders on 19.4.2021 and coming on for pronouncement this day, through video conference, the court made the following:

ORDER

These writ petitions are filed to strike down Rule 3(11-C) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 and also to declare that the notification dated 23.9.2016 issued by respondent No.1 and the consequential intimation dated 6.10.2016 issued by respondent No.2 are without authority of law and to quash the order dated 27.9.2018 passed by respondent No.2.

2. Petitioners are all running liquor shops after obtaining CL-2 licence from the competent Authority under the provisions of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 (for short `Rules’). The licences granted to petitioners are in terms of Rules 12(3(b) of the Rules.

3. The 1st respondent amended the Rules by inserting Rule 3(11-C ) of the Rules w.e.f. 1.7.2003 by giving overriding effect. Rule 3(11-C) of the Rules specifies that a license in Form CL(11-C) shall be granted by the Deputy Commissioner only to such companies owned or controlled by 23 the State Government and specified by the government for possession and sale of liquor in retail shops. Petitioners are aggrieved by insertion of Rule 3(11-C) of the Rules wherein the licence to run retail sale liquor outlet are granted to Government owned/controlled companies without reference to or applicability of Rule 12 of the Rules. Petitioners are also aggrieved by notification and circular issued by respondent No.1 approving 900 CL (11-C) licence in favour of respondent No.5 in various locations in the State of Karnataka and also the CL-11-C granted in favour of respondent No.5. Hence, these writ petitions.

4. Mr. F.V. Patil, learned counsel appearing for the petitioners in W.P.No.106715/2018 and other connected writ petitions would make the following submissions: i) The impugned Rule 3(11-C) of the Rules which specifies for granting retail licence in favour of State owned or controlled companies without reference to Rule 12 of the Rules which provides for granting maximum number of licences in an area/Taluk on the basis of population is arbitrary and discriminatory. 24 ii) Section 71 of the Karnataka Excise Act, 1965 (for short `Act’) empowers the State Government to make Rules to carry out the purposes of this Act by publishing notification. Section 71(2)(e) of the Act empowers the government to frame the rules for regulating the grant of licences to be granted in an area and regulating the periods etc. Hence, the grant of CL-11-C licence in favour of the State companies is contrary to Section 71(2)(e) of the Act and rules 12(3) of Rules which specifies the maximum number licenses to be granted in a local area depending on the population. By subordinate legislation, the State could not have inserted Rule 3(11-C) of the Rules to grant retail licence in favour of State owned or controlled companies, notwithstanding anything contained in Rule 12 of the Rules. In support reliance is placed on the decision of the Apex Court in the case of STATE OF T.N. AND ANOTHER VS. P KRISHNAMURTHY AND OTHERS reported in 2006 4 SCC517and the decision of the Apex Court in the case of STATE OF KERALA AND OTHERS Vs. TRAVANCORE CHEMICALS AND MANUFACTURING COMPANY AND ANOTHER reported in 1998 8 SCC188 25 iii) The impugned Rule is inserted so as to circumvent the two judgments of the Division Bench of this Court in the case of STATE OF KARNATAKA –VS- M/S.MANDYA DISTRICT WINE MERCHANTS ASSOCIATION reported in 1986 KARNATAKA2943and in the case of NAGARAJ AND OTHERS –VS- STATE OF KARNATAKA AND OTHERS reported in ILR1999Kar. 2903, wherein it is held that sub-Rule 3 of Rule 12 of the Rules does not confer any power on the licensing Authority to grant additional licences over and above the maximum number fixed by the Excise Commissioner with the previous approval of the Government. Hence, the judgment of this Court cannot be annulled by the Government in exercise of its delegated power. In support, reliance is placed on the decision of the Apex Court in the case of STATE OF TAMIL NADU AND OTHERS -Vs- K.S. SHYAM SUNDER AND OTHERS reported in 2011 8 SCC737iv) The co-ordinate Bench of this Court in the case of B MARTIN AND OTHERS –VS- STATE OF KARNATAKA AND OTHERS reported in 2011(3) Kar.LJ16 while upholding the validity of Rule 3(11)(c) of the Rules has not laid down any 26 ratio. Hence, the decision of the coordinate Bench of this Court in the case of B Martin (supra) is not applicable since it is not accompanied by the reasons and has not proceeded with conscious consideration of the issue and therefore it cannot be declared to have binding effect. In support of his submission, he has placed a reliance on the decision of the Apex Court in the case of PURBANCHAL CABLE AND CONDUCTOR PRIVATE LIMITED AND OTHERS -Vs- ASSAM STATE ELECTRICITY BOARD AND OTHERS reported in (2012) 7 SCC462 v) The petitioners who are granted with the licences to sell liquor have locus standi to maintain writ petition challenging any other licence issued in favour of a trader. In support, reliance is placed on the decision of the Apex Court in the case of M.S.JAIRAJ -Vs- COMMISSIONER OF EXCISE reported in 2000 7 SCC552and in the case of SAI CHALCHITRA -Vs- COMMISSIONER MEERUT MANDAL AND OTHERS reported in 2005 3 SCC683 vi) Hence, learned counsel for the petitioner submits that this writ petition requires to be allowed by striking down 27 Rule 3(11-C) of the Rules and also consequential notification, circular and licences granted to respondent No.5.

5. The learned counsel for the petitioners in the connected writ petitions have reiterated the submissions made by Mr. F.V. Patil, learned counsel.

6. Sri K N Phaneendra, learned Senior counsel appearing for respondent No.5 would make the following submissions: i) Petitioners have no locus standi to challenge the validity of the impugned rule and so also the consequential notification dated 29.03.2016 and licences issued in favour of respondent No.5 since the licences granted to the petitioners are not cancelled for the purpose of granting licence in favour of respondent No.5. In support, reliance is placed on the decision of the Apex Court in the case of JASBHAI MOTHIBHAI DESAI -VS- ROSHAN KUMAR, HAJI BASHIR AHMED AND OTHERS reported in (1976) 1 SCC671and order passed in W.P.No.101601/2018. ii) The validity of Rule 3(11-C) of the Rules is already upheld by the coordinate Bench of this Court in the 28 case of B Martin (supra) and the same has attained finality. The grant of CL-11 in favour of MSIL is traceable to Rule 3(11- C) of the Rules. Once the validity of the said Rules is upheld by this Court, the said issue cannot be gone into yet again by this Court. The decision of the Division Bench of this Court in the case of State of Karnataka –vs- Mandya District Wines Merchant Association relied upon by the petitioner is not applicable to the facts of the present case since Rule 3(11-C) of the Rules was amended on 30.6.2003 subsequent to the judgment passed by this Court. iii) The petitioners are only vendors of liquor and the right to carry on the business does not extend to carry on the business in activities which are inherently pernicious or injurious to health. In support reliance is placed on the decision of the Apex Court in the case of KHODAY DISTILLERIES LIMITED AND OTHERS VS. STATE OF KARNATAKA AND OTHERS reported in 1996 10 SCC304 7. Learned Additional Advocate General appearing for respondents No.1 to 4 would reiterate the submissions 29 made by the learned Senior counsel appearing for respondent No.5 and she would make the following submissions: i) Section 71 of the Act empowers the State Government to make Rules by notification so as to carry out the objects of the Act. In pursuance of the power conferred under Section 71(2)(e) of the Act, Rule 3(11-C) of the Rules was inserted inviting objections and suggestions from all persons likely to be affected with respect to the draft notification dated 12.6.2003. However, objections were not filed against the draft notification. Thereafter government published the present notification dated 30.6.2003 by amending the rules by inserting the impugned Rule 3(11-C) of the Rules. The source of power for inserting the impugned rule is traceable to Section 71(2)(e) of the Act. Hence, the submissions of the learned counsel for the petitioner that by way of subordinate legislation, Rule 3(11-C) of the Rules could not have been inserted for grant of licence in favour of the State owned or controlled companies without reference to Rules 12 of the Rules is not acceptable. 30

8. I have examined the submissions made by the learned counsel for the parties. The points that arise for consideration are as follows: i) Whether by way of subordinate legislation, the State Government can insert Rule 3(11-C) of the rules to grant retail outlet licences in favour of State owned/controlled companies without reference to Rule 12(3) of the Rules?. ii) Whether the decision in the case of B Martin (supra) upholding the validity of Rules 3(11-C) of the Rules is not ratio decidendi since the particular point of law is not consciously determined as contended by the learned counsel for the petitioners?. iii) Whether the petitioners have got locus standi to question CL-2 licences granted in favour of MSIL in terms of Rule 3(11-C) of the Rules and also the circular and notification issued in the light of the Rule impugned 3(11-C) of the Rules.

9. Before examining the issues involved in these writ petitions, it is necessary to reproduce the relevant provisions of Act, 1965 and Rules, 1968 for ready reference:

31. "Section 71(2)(e) of the Act reads thus:

71. Power to make Rules.- (1) The State Government may, by notification and after previous publication, make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing provision, the State Government may make rules,- (a) xxxxx (b) xxxxx (c) xxxxx (d) xxxxx (e) regulating the periods and localities in which, and the persons or classes of persons to whom, licences for the wholesale or retail sale of any intoxicant may be granted and regulating the number of such licences which may be granted in any local area;” Rule 3 of the Rules reads thus: “3. Licences.- Licences for the vend of (Indian Liquor (other than arrack)]. or Foreign liquor or both shall be of the following descriptions, namely.- [(1) xxxx (1-A) xxxx (2) xxxx [(3) xxxx]. [(4) xxxx (5) xxxx (6) xxxx 32 (7) xxxx (8) xxxx (9) xxxx (10) xxxx (11) Distributor licence.- (a) A licence under this clause shall be granted by the Excise Commissioner for the whole of the State or any part thereof to deal in the products of all distilleries or breweries or wineries in the State or to import liquor from outside the State for the purpose of distribution or sale within the State or part thereof or to export liquor outside the State. The licensee shall establish such a number of depots in different parts of the State, as the Excise Commissioner may specify in this behalf. (11-A) XXXX (11-B) XXXX [(11-C) Retail shop licence issued to Government Companies.- (1) Notwithstanding anything contained in Rule 12, a licence under this clause in Form CL(11-C) shall be granted by the Deputy Commissioner, only to such companies owned or controlled by the State Government and specified by the Government, for possession and sale of liquor in retail shops with a condition that such shops shall be exclusively maintained by them and shall not be transferred and sub-leased to others. Consumption of liquor within the licensed premises shall not be allowed under this category of licences.]. “12. Number of licences to be fixed.- (1) The maximum number of licences to be granted in an area shall be determined from time to time by the Excise Commissioner with the previous approval of the State Government: [Provided that, the maximum quota fixed shall be relaxed as a one-time measure during the 33 period commencing from 27 June, 2017 and th ending on 31 December, 2017, in respect of st shifting of affected CL-2 (Retail Shop) licences, and restricted to renewal of licenses for the Excise year 2017-18, in compliance with the judgment of the Hon’ble Supreme Court in Civil Appeal Nos.12164 to 12166 of 2016 (Arising out of SLP © Nos.14911 to 14913 of 2013) and Civil Appeal No.12170 of 2016, dated 15-12-2016].. (2) The number of retailers licences to be granted in a taluk for the year shall be determined with reference to the population of such taluk and the probable demand. (3) The number of retail licences to be granted in a Taluk shall be as follows.- (a) One retail licence for every 7,500 urban population or a fraction thereof exceeding 3,500; and (b) One retail licence for every 15,000 rural population or a fraction thereof exceeding 7,500. Explanation.- “Population” for the purpose of this sub-rule shall be population as ascertained at the last preceding census and includes the projected annual growth subsequent to the last preceding censes].. [(3-a) xxxxx.]. [(4) xxx.].

10. A plain reading of Section 71 of the Act indicates that the State Government may by notification and after previous publication make rules to carry out the purposes of this Act. Section 71(2)(e) of the Act provides for framing Rules by the State Government so as to regulate the grant of maximum number of licences for the retail sale of any 34 intoxicant in any local area. In other words, the State Government by framing Rules can regulate the maximum number of licences to be granted in any local area.

11. A reading of Rule 12 of the Rules indicates that the Excise Commissioner with the previous approval of the State Government shall determine the maximum number of licences to be granted in a taluk with reference to population of such taluk in the probable demand and number of retail licences to be granted. Rule 12 was also framed by exercising delegated power under Section 71(2)(e) of the Act. In other words, the grant of a retail license was subject to the population of the inner local area.

12. Rule 3(11-C) of the Rules provides for grant of licence in Form CL(11-C) licence in favour of Government Companies or companies controlled by the State Government without reference to Rule 12(3) of the Rules. Rule (11-C) of the Rules was inserted by the State Government by exercising the power under Section 71(2)(e) of the Act which provides for regulating the period and localities and the number of licenses 35 to be granted for retail sale of any intoxicant in any local area by exercising power under Section 71(2)(e) of the Act.

13. A collective reading Section 71 (2) (e) of the Act, Rule 3 (11-C ) and Rule 12 of the Rules indicate that the State Government by exercising power under Section 71 (2) (e) frame rules for granting retail licences to the State owned/controlled companies without reference to or applicability of Rule 12(3) of the Rules which specifies that retail licences in favour of a citizen can be granted depending on the population of the local area.

14. The impugned Rule 3(11-C) of the Rules is inserted for grant of retail licenses to a Government owned/ controlled company without reference to or applicability of Rule 12 (3) of the Rules. In other words, the population in any local area will not be relevant for the purpose of granting retail licenses to a government owned or controlled company. The power to regulate the grant of number of licenses vests with the Government and the government by exercising power under Section 71 can frame rules for granting licences for the State owned or controlled companies without reference to the population of the local area as specified in Rule 12(3) of the 36 Rules. The impugned Rule was inserted by exercising the power under Section 71(3)(e) of the Act and as such cannot be said to be made in excess of the power conferred by the Act or is in conflict with provisions of the said Act. The impugned Rule being inserted duly authorized by the Act and within the bounds of the power delegated, the said Rule cannot be said to be invalid or unconstitutional. Hence, the submission of the learned counsel for the petitioners that by subordinate legislation the impugned Rule could not have been inserted is not acceptable.

15. The Apex Court in the case of KHODAY DISTILLERIES LIMITED-VS- STATE OF KARNATAKA reported in 1995 (1) SCC574while examining the validity of Rule 3 (11) of the Rules which specifies that a licensee either for manufacture or sale of liquor is prohibited from selling liquor to any other than the holder of distributor licence and the holder of such a licence can only be a company owned or controlled by the State Government has held that the right to carry on any occupation, trade or business does not extend to carry on the trade or business in activities which are inherently pernicious or injurious to health, safety and welfare of the general public. It 37 was further held that the citizen has no fundamental right to trade or business in intoxicant liquor. Hence, such trade or business in liquor can be completely prohibited. For the same reason, the State can make a monopoly either in itself or the agency created by it, for the manufacture, possession, sale and distribution of liquor as a beverage and it can also grant licenses to the citizens for this purpose by charging fees. When the State permits trade or business, in potable liquor with or without limitation, the citizen has the right to carry on trade or business only subject to the limitation so placed.

16. The Apex Court after holding that the citizen has the right to carry on trade or business in intoxicating liquor only subject to limitation so placed and it is not a fundamental right, the special leave petitions were directed to be placed before an appropriate bench for deciding other questions. The Apex Court after considering Sections 13, 15 and 71(2) of the Act, has held as follows: The Act is clearly within the legislative competence of this State Legislature. Nobody has challenged the amended Rules or within the scope of delegated authority under Section 71 of the Act. If the main Act is within the legislative competence of the State Legislature and the Rules have been framed under a validly deleted authority and or within the scope of that authority, it fails to see 38 how the Rule can be challenged on the ground lack of Legislative competence. If the act is valid, so are the Rules. The tests of arbitrary action which applies to administrative action do not necessarily apply to delegated legislation. In order that delegated legislation can be struck down, such legislation must be manifestly arbitrary; the law which could not be reasonably expected to emanate from an authority delegated law making power. In The case of Indian Express News Paper (Bombay) (P) Ltd., - vs- Union of India, this Court has held that a piece of subordinate legislation does not carry the same degree of immunity, which is enjoyed by a statute passed by a competent legislature. A subordinate legislation may be questioned under Article 14 on the ground that it is unreasonable; “unreasonable is not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary”. Drawing a comparison between the Law in England and in India, the Court further observed that in England that the Judges would say “parliament never intended the authority to make such Rule; they are unreasonable and untravirus.” In India, arbitrariness is not a separate ground since it will come within the embargo of Article 14 of the Constitution . But subordinate legislation is so arbitrary that it could not be said to be in conformity with the statute or that it offends Article 14 of the Constitution of India. The Apex Court in the case of Khoday Distilleries Ltd. (supra) has specifically held that the sale of liquor is not a fundamental right nor subordinate delegation can be questioned on the ground of arbitrariness but can be questioned only if it is so arbitrary if it is not in conformity with the statute or that it offends Article 14 of the Constitution of India".

17. In view of the law laid down by the Apex Court in the case of Khoday Distilleries Ltd. supra, the impugned Rule cannot be said to be manifestly arbitrary since the said Rule is 39 inserted by exercising power under Section 71(2)(e) of the Act and the impugned Rule does not offend the provisions of the Act.

18. The impugned Rule starts with the non-obstante clause which provides for grant of retail license in favour of Government owned or controlled company without reference to or applicability of Rule 12(3) of the Rules. Section 71(2)(e) of the Act provides for regulating the grant of a number of licenses. The grant of license to the government owned/ controlled company without reference to the population in any local area cannot be said to be violative of Article 19(1)(g) of the Constitution of India in view of the decision of the Apex Court in the case of Khoday Distilleries Ltd., wherein it is held that citizens have no fundamental right to do trade or business in intoxicating liquor and citizens have the right to carry on trade or business only subject to the limitation so placed. It was further held that the State can make a monopoly either in itself or the agency created by it, for the manufacture, possession, sale and distribution of liquor as a beverage and it can also grant licenses to the citizens for this purpose by charging fees In the present case, the petitioners have been 40 granted CL-2 licenses for selling liquor and the said right is not taken away by the impugned Rule and the licenses so granted is subject to certain limitations so placed. Hence exclusion of applicability of Rule 12(3) of the Rules for granting retail licences to the government owned or controlled company cannot be said to be discriminatory since the right to carry on the business of sale of liquor by the petitioners is subject to limitations so placed and the state can create monopoly either in itself or the agency created by it for sale of liquor.

19. The impugned Rule provides for granting retail licence to the Government owned/controlled companies without reference to Rule 12 (3) of the Rules. The Rule 12 was also inserted by subordinate legislation. Hence, the submission of the learned counsel for the petitioners that by subordinate legislation the applicability of Rule 12 cannot be excluded is untenable.

20. The petitioners have also challenged the impugned Rule on the ground that the amended Rules have been amended so as to circumvent the judgment of the Division Bench of this Court in the case of STATE OF41KARNATAKA -VS- MANDYA DISTRICT WINES MERCHANTS’ ASSOCIATION reported in ILR1986Kar. 2343, wherein, it is held that Rule 12 of the Rules being mandatory, the Licensing Authority cannot grant any license beyond the maximum number specified in the Rule in respect of the local area. The judgment rendered by the Division Bench (supra) was in the context of granting additional licenses to sell the maximum number of licenses fixed for an area by the Excise Commissioner with the approval of the State Government. However this judgment was rendered before amendment of Rule 311(C) of the Rules, which was inserted by exercising the power under Section 71(3)(e) of the Act and the impugned Rule is in conformity with the provisions of the Act and also the source of power to insert the said Rule is traceable to Section 71(3)(e) of the Act. Hence, the submission of the petitioners that the impugned Rule is inserted so as to circumvent or nullify the judgment of the Division Bench of this Court is not tenable in law.

21. The coordinate Bench of this Court while examining the validity of the impugned Rule 3 (11-C) in the case of MARTIN AND OTHERS -VS- STATE OF KARNATAKA42REPORTED BY ITS SECRETARY, FINANCE DEPARTMENT AND OTHERS reported in ILR2011KAR1777has held as follows:

6. In view of the above legal position and also since it is settled in various other cases that sale of liquor is neither fundamental right nor a question of arbitrariness which can be questioned, and also when the State intends to promote business through organised sectors namely, the companies owned by the State, the granting of licenses to the MSIL cannot be held to be arbitrary and, the Rule enabling grant of some more licenses in the interest of public health or general order and thereby, grant of some more CL-2 licenses through MSIL, cannot be held to be bad.

8. Further grievance of the petitioners is, there is no provision for grant of fresh licenses under Rule 5 of the Rules as per the policy made by the State on 3.9.2003 in not granting any fresh licenses. But, subsequently, it has taken a decision of the Apex Court reported in AIR1996SC911referred to above and also the decision in NASHIRWAR VS. STATE OF MADHYA PRADESH AND OTHERS wherein the Apex Court has held that, the State has the exclusive right and privilege of manufacturing and selling liquor. It can auction licenses for carrying on business of selling liquor and a citizen has no fundamental right to do business in liquor.

9. It is stated that one of the purposes of regulation is to raise revenue to the State by granting licenses to the State owned companies and while exercising monopoly or privilege, the State felt it proper to give more licenses to the State owned company to regulate business in liquor. Although a policy was brought in during 2003 to restrict issuance of CL2 and CL9 licenses, however, it shall not bar the issuance of licenses in favour of the State is to earn revenue for the State as limited revenue would be generated in case of 43 private CL2 or CL9 license holders since the margin profit is fixed. For the purpose of generating revenue, when the State has taken a decision to give more number of CL-2licenses to the State owned companies, that cannot be fixed for issuance of licenses to the Government owned companies by the Commissioner of Excise and it applies only to private individuals.

22. The Coordinate bench of Martin supra has upheld the validity of the impugned Rule applying the ratio laid down by the Apex Court in the case of Khody distilleries supra and in the case of NASHIRWAR VS. STATE OF MADHYA PRADESH AND OTHERS reported in AIR1996SC911by assigning reasons though not explicitly. Hence, the submission of the learned counsel for the petitioners that, ratio decidendi is not laid down and the said decision is not binding or applicable to the facts of the present case is without any substance. Even otherwise, the challenge to the impugned Rule in these writ petitions is not maintainable in view of the discussions made in the preceding paras holding that the impugned Rule so inserted does not lack legislative competence and also offend Article 14 of the Constitution of India.

23. The petitioners have also questioned the notification, circular and CL-11(c) licenses granted to the 5th 44 respondent issued in terms of Rule 11(c) of the Rules. Admittedly, the petitioners are also granted with CL-2 retail licenses to sell liquor and they are challenging the notification dated 29.03.2016 and licenses granted in favour of the 5th respondent stating they are contrary to the provisions of the Act and Rule 12 of the Rules. The impugned notification dated 29.03.2016 is issued recommending four places in each assembly constituency for granting retail licenses in favour of Respondent.No.5. The said notification is issued in terms of the impugned rule and the same cannot be said to be illegal since no right is created in favor of any citizen.

24. The coordinate bench of this court in W.P.No.101601 of 2018 has held that in the absence of right, a rival competitor cannot be excluded for establishing or running the liquor business. The Apex Court in the case of JASBHAI SUPRA has held that the owner of cinema house cannot challenge the setting up of a new cinema house because it does not result in injury to a legal right or legally protected interest, the business competition causing it being a lawful activity. The decision relied upon by the learned counsel for the petitioner in the case of Sai Chalchitra is rendered by the Apex Court 45 consisting of two learned Judges. The decision rendered by the Apex Court in the case of Jasbhai is by a larger bench and by following the said decision it is held that the challenge to the notification dated 29.03.2016 and so also the licenses granted in favour of the Respondent No.5 is not maintainable for want of locus standi.

25. In view of the foregoing discussion, it is held that the impugned Rule does not lack legislative competence and also does not offend Article 14 of the Constitution of India and the petitioners have no locus standi to challenge the notification dated 29.03.2016 and CL- (11-C) licences granted in favour of the respondent No.5-MSIL. Accordingly, writ petitions stand dismissed. Sd/- JUDGE Bkm