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M/S CEE CEE & CEE CEE’S

v.

K. DEV AMANI & ORS.

(Civil Appeal Nos. 9494-9495 of 2019)

DECEMBER 18, 2019

[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.] Puducherry Excise Act, 1970 – Puducherry Excise Rul es, 1970 – rr. 122, 163 and 209 – Appellant sought to t ransfer his licensed liquor shop from one region to another – Responde nt No.

3-the Deputy Commissioner of the region where appel lant sought transfer, granted permission – Respondent No. 1 filed w rit petition – High Court set aside the permission granted to th e appellant – High Court held that the word/phrase/term ‘place’ i n the Excise Act and Excise Rules had a restrictive meaning – It was further held that the order which permitted shifting of the wholes ale liquor shop of the appellant had to be confined to a regio n and not to an entirely different region – On appeal, held : The Exc ise Act and The Excise Rules uses the expression ‘local area’ i n contra- distinction with the word ‘place’, whenever it was intended to confine the area in which the liquor shop was locat ed – The expression ‘from one place to another’ is not restric tive, and does not curtail the power of the Licensing Authority to gr ant permission for shifting the licensed shop from one region to a nother in the Union Territory of Puducherry so long as the conditions st ipulated by the Excise Act and Excise Rules, as also the conditions for grant of a license are complied with – The shifting shoul d not result in the increase in number of liquor shops beyond the m aximum number of licenses which may be fixed for a particu lar area u/r.122 of the Excise Rules – Further, the permissio n was granted to shift the premises subject to compliance with the condit ions laid down with r.209 of the Excise Rules – In the instan t case, the Deputy Commissioner had imposed additional two conditions – All the conditions under the Excise Act and Rules were complied by the appellant – The permission granted for shifting the licensed shop was legal and valid.

[2019] 15 S.C.R. 384

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Allowing the appeals, the Court

HELD: 1. The expression ‘from one place to another’ in Rule 209 of the Puducherry Excise Rules, 1970 is not restrict ive, and does not curtail the power of the Licensing Aut hority to grant permission for shifting the licensed shop from one region to another in the Union Territory of Puducherry so l ong as the conditions stipulated by the Puducherry Excise Act, 1970 and Excise Rules, as also the conditions for grant of a license are complied with. The shifting should not result in the i ncrease in number of liquor shops beyond the maximum number of lic enses which may be fixed for a particular area under Rule 122 of the Excise Rules. [Para 20] [393-G-H] 2. Given the peculiar demography of the Union Territory of Puducherry, which comprises of four unconnected regions , it would be contrary to the object and purpose of the Exc ise Act, if a restrictive meaning was to be given to Rule 209 of the E xcise Rules. The Act must be read as a whole to ascertain th e intent of the legislature. If the intention of the legisla ture was to restrict the shifting of a liquor shop to a region, locality, municipality, or commune, Rule 209 of the Excise Act would h ave expressly contained such a prohibition, which is abse nt. [Para 21] [394-A-B] 3. The Excise Act and the Excise Rules use the expression ‘local area’ in contra-distinction with the word ‘place ’, whenever it is intended to confine the area in which th e liquor shop is located. [Para 22] [394-C] 4. In the present case, the Licensing Authority i.e . the Deputy Commissioner (Excise) vide Letter dated 07.06.2018 has granted permission to shift the F.L.1 Licensed premise s of the Appellant from one region to another, subject to complian ce with the conditions laid down in Rule 209 of the Excise Ru les. The Deputy Commissioner (Excise) from where appellant s ought transfer permitted shifting of the premises subject to two additional conditions viz .

(i) There shall be one and the same entrance and exit only;

M/S CEE CEE & CEE CEE’S v. K. DEVAMANI & ORS.

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(ii) The boundary of the building should be properly protected.

This Court was informed by the Appellant and the St ate that all conditions under the Excise Act and Rules were complied with. [Para 25] [395-A-C] 5. Consequently, Respondent No. 3 - the Deputy Commissioner (Excise), where appellant sought trans fer vide letter dated 15.06.2018 granted permission to the Appel lant to run the F.L.-1 business from the location designated . [Para 26] [395-D] 6. This Court finds no prohibition in the Excise Act or Rules for shifting the F.L.1 Licensed premises from one place to another. The permission dated 07.06.2018 for shi fting the licensed shop from one region to another granted by Respond ent No. 3 is legal and valid. [Para 27] [395-E] State of Tamil Nadu v. Balu (2017) 2 SCC 281 – referred to.

K. Murali v. Commissioner (Excise)-cum-Secretary in W.P. (Civil) No. 39661/2002 – referred to.

Case Law Reference

(2017) 2 SCC 281 referred to Para 4

CIVIL APPELLA TE JURISDICTION : Civil Appeal Nos. 9494- 9495 of 2019.

From the Judgment and Order dated 14.02.2019 of the High Court of Judicature at Madras in W.P . Nos. 15661 & 11767 of 2018.

Mahesh Jethmalani, R. Venkataramani, Sr. Advs., Ankur Mittal, Ms. Nidhi Mittal, U.C. Mittal, Ms. Aishwarya Pandey, S. Thananjayan, K. Balu, Ms. Promila, V.G. Pragasam, S. Prabu Ramasub ramanian, S. Manuraj, Yashraj Singh Bundela, Praveen Vignesh, Advs. for the appearing parties.

The Judgment of the Court was delivered by INDU MALHOTRA, J.

Leave granted.

1. The Appellant is an F.L.- 1 License holder issued on 26.10.2016 by the Deputy Commissioner, Excise, Mahe under the A B C D E F G H 387 Puducherry Excise Act, 1970 (“ Excise Act ”). Under the F.L. - 1 License, the Appellant is permitted to sell Indian Made Foreign Liquor (“ IMFL ”) to other License holders, and not in retail.

2. On 28.02.2017, the Appellant filed an Application before the Deputy Commissioner (Excise), Mahe for shifting his licensed Liquor Shop from Mahe to Karaikal under Rules 163 and 209 of the Puducherry Excise Rules, 1970 (“ Excise Rules ”).

3. The Deputy Commissioner (Excise), Mahe forwarded the Application to Respondent No. 3 – the Deputy Commissioner (Excise), Karikal vide letter dated 07.03.2017, and requested Respondent No. 3 to conduct an inspection to assess the suitability of the site at Karaikal.

4. Respondent No. 1, a resident of Karaikal, submitt ed an objection dated 02.06.2017 before the Sub – Collect or (Excise), Collectorate, Karaikal to oppose the shifting of the l iquor shop to Karaikal. Respondent No. 1 inter alia submitted that pursuant to the Judgement dated 15.12.2016 passed in State of Tamil Nadu v. Balu 1, various liquor shops had been shifted from other re gions to the residential areas in Karaikal. The Court had directed that no shop for the sale of liquor could be situated within a distance of 500 meters of the outer edge of the National or State Highways or of a ser vice lane along the Highway.

It was submitted that shifting of the shop was contrary to public interest of the residents of Karaikal. For about 35 houses in Nedunkadu circle, Karaikal, there were 35 liquor shops already opera tional.

It was further submitted that the Madras High Court vide Order dated 07.03.2003 in K. Murali v. Commissioner (Excise)-cum- Secretary in W.P. (Civil) No. 39661/2002 had interpreted the expression ‘from one place to another’ in Rules 163 and 209 of the Excise R ules to mean that shifting was permissible only within a particular local area, panchayat or commune, and not from one region to another in the Union Territory.

In view of the restrictive meaning of the word ‘pla ce’, the Licensing Authority could not grant permission to shift the licensed shop of the Appellant from one region to another i.e. from Mahe to Karaikal, which is at a distance of 650 kilometers.

1 (2017) 2 SCC 281 : AIR 2017 SC 262 : 2017 (1) SCJ 586.

M/S CEE CEE & CEE CEE’S v. K. DEVAMANI & ORS.

[INDU MALHOTRA, J.]

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The shifting of liquor shops from one region to another would be in contravention of Rules 163 and 209 of the Excise Rules.

5. Respondent No. 1 and one K. M. Baskar filed W.P. (Civil)

Nos. 13081/2017 and 15953/2017 before the Madras High Court for the issuance of a writ of mandamus restraining Respondent No. 2 and 4 - Excise Authorities from shifting liquor shops from Mahe to Karaikal.

The Madras High Court vide Order dated 26.02.2018 directed the Excise Authorities to consider the objections raised by Respondent No. 1 along with the Application for shifting filed by the Appell ant in accordance with law.

6. Respondent No. 3 - Deputy Commissioner (Excise), Karaikal granted a personal hearing to Respondent No. 1 on 01.03.2018.

7. Respondent No. 3 - Deputy Commissioner (Excise), Karaikal vide Order dated 27.03.2018 rejected the objections rai sed by Respondent No. 1, on the ground that the Order dated 07 .03.2003 passed by a single judge of the Madras High Court in K. Murali (supra)

was set aside by a division bench vide Order dated 06.09.2005.

8. Respondent No. 1 filed a 2 nd W. P. (C) No. 11767/2018 before the Madras High Court to quash the Order dated 27.03.201 8, and restrain Respondents No. 2 to 4 - Excise Authorities from perm itting the re-location of liquor shops from Mahe to Karaikal, and granting liquor licenses in Karaikal.

9. Respondent No. 2 – Deputy Commissioner (Excise), Puducherry vide Order No. 2239/DCE/S2/FL-1/2017 – 2018/251 dated 07.06.2018 granted permission to the Appellant to shift the liquor shop from Mahe to Karaikal, subject to the fulfillment of the conditions contained in Rule 209 of the Excise Rules.

10. The Deputy Commissioner (Excise), Mahe vide Order dated 13.06.2018 conveyed the permission granted by Respondent No. 2 – Deputy Commissioner (Excise), Puducherry to the Appe llant. The approval was made subject to the following two additional conditions:

(i) there will be one entrance and exit only; and (ii) the boundary of the proposed site should be protect ed properly.

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11. Respondent No. 3 – the Deputy Commissioner, Exci se, Karaikal vide Order dated 15.06.2018 granted permission to the Appellant to commence his business of wholesale vending of IMFL at Karaikal.

12. Respondent No. 1 filed a 3 rd W. P. (Civil) 15661/2018 before the Madras High Court to quash the Order dated 15.06.201 8, and restrain Respondent Nos. 2 to 4 - Excise Authorities from shifting liquor shops from Mahe to Karaikal, on the grounds similar to those raised in the 2 nd W.P. (Civil) No. 11767/2018.

The High Court vide Order dated 05.07.2018 granted interim stay of the Order dated 15.06.2018 passed by Respondent No. 3.

13. The Excise Authorities supported the case of the Appellant – License holder in W.P (Civil) Nos. 11767/2018 and 15661/2018.

14. A division bench of the Madras High Court vide Impugned Judgement and Order dated 14.02.2019 allowed W.P. (Civ il) Nos.

11767/2018 and 15661/2018, and quashed the Orders dated 27.03.2018 and 15.06.2018 passed by Respondent No. 3. The permission granted by Respondent No. 2 to 4 to shift the Licensed Shop of the Appe llant from Mahe to Karaikal was set aside.

The division bench held that the disposal of the representati on by Respondent No. 3 – Deputy Commissioner (Excise) Karaikal w as not in accordance with the Order dated 26.02.2018 passed i n W.P.

(Civil) Nos. 13081/2017 and 15953/2017.

The word / phrase / term “place” in the Excise Act and Exc ise Rules had a restrictive meaning. The area defined by Section 2 (22) of the Excise Act was restricted to the “area” in which the liquor shop was located. The order which permitted shifting of the wholesale liquor shop of the Appellant from Mahe to Karaikal had to be confined to the region of Mahe, and not to Karaikal, which is an entirely different region in the Union Territory of Puducherry.

15. Aggrieved by the Order dated 14.02.2018, the Appellant – Licensed holder has filed the present Special Leave Petit ion.

We have heard Mr. Mahesh Jethmalani, Senior Counsel for the Appellant, Mr. R. Venkataramani, Senior Counsel for the Union Territory and office bearers, and Mr. S. Thananjayan, C ounsel for Respondent No. 1.

M/S CEE CEE & CEE CEE’S v. K. DEVAMANI & ORS.

[INDU MALHOTRA, J.]

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16. The issue which arises for our consideration is whether the permission granted by Respondent Nos. 2 to 4 - Excise Authorities to transfer the licensed shop from one region to another in t he Union Territory of Puducherry was permissible under the Excis e Act and Rules.

17. RELEV ANT ST ATUT OR Y PROVISIONS

The Puducherry Excise Act, 1970 provides a uniform law relating to the production, manufacture, possession, import, export, trans port, purchase and sale of liquor, and intoxicating drugs in the Union Territory of Puducherry.

17.1. Section 1(2) extends the applicability of the Excise Act to the whole of the Union Territory of Puducherry.

17.2. The word ‘place’ is defined in Section 2 (22) as fol lows:

“2. – Definitions

…

(22) “place” includes a house, building, shop, boot h, tent, vessel, raft, and vehicle.”

The word ‘place’ does not indicate the territorial limits within which the Licensing Authority could grant shifting of a licensed shop.

Section 2(22) describes the type of structure or establishm ent of the licensed shop, which could either be a house, building, shop, booth, tent, vessel, raft, or vehicle in which the licensed premises is situated.

17.3. Section 14 of the Excise Act provides that no liquor or intoxicating drug will be sold without a license issued by the Licensing Authority i.e. the Deputy Commissioner or Excise Commissioner.

17.4. Section 70 of the Excise Act empowers the Government to frame rules for carrying out the functions of th e Act. The Government has enacted the Puducherry Excise Rules, 1970 in exercise of the powers under Section 70.

Rule 1(2) extends the applicability of the Excise Rules to the whole of the Union Territory of Pondicherry.

i) Rule 22A (a) of the Excise Rules defines ‘region’ as any of the 4 regions of the Union Territory viz , Pondicherry, Karaikal, Mahe and Yanam.

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“CHAPTER-IIA

Control of inter-State Transport of Liquor 22. A. Definitions — In this Chapter, unless there is anythin g repugnant in the subject or context— (a) “Region” means any of the regions known as Pondicherry, Karaikal, Mahe and Yanam in the Union territory of Pondicherry.”

ii) Rule 113 of the Excise Rules provides for the grant of a n F.L.- 1 license for wholesale vending of liquor.

“CHAPTER – VI

Sale of Indian or Foreign liquors

113. Licences. — Licences for the sale of Indian li quor or foreign liquor or both shall be of the following descriptio ns, and shall be granted by the Excise Commissioner or Deputy Commissioner, as the case may be, in accordance wit h the provisions of sub-section (2) of section 14 of the Act, namely:— (1) F.L. 1 Licence:— The holder of this licence sha ll be permitted to sell foreign liquor or Indian liquor, o r both, in quantities of not less than 9 litres in sealed or c apsuled bottles 2[***] at any one time and in any single transacti on to any other licensee under this chapter and also in sealed or capsuled bottles in quantities not exceeding 3 [4 .5 litres of all liquors other than beer and 9 litres of beer ] at any one time and in any single transaction to an unlice nsed person. But he shall not allow the consumption of the l iquor at the licensed premises:

Provided that such licensees may issue another lice nsed dealer samples of liquors, in quantities not exceeding 0.180 litres.”

iii) The procedure for transfer of a licensed liquor shop i s provided under Rule 209 of the Excise Rules.

“CHAPTER—XIII

Excise Licences (General Conditions)

M/S CEE CEE & CEE CEE’S v. K. DEVAMANI & ORS.

[INDU MALHOTRA, J.]

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209. Shifting of shops: — The licensee shall not sh ift the licensed premises from one place to another without the prior approval of the Licensing Authority.

Provided that the licensing authority may permit, s ubject to the fulfilment of conditions of licence, shifting o f licensed premises on payment of one-fourth of the license fee for suc h shifting”

iv) The term ‘shop’ is defined by Rule 189 of the Excise Rules, as follows:

“CHAPTER—XIII

Excise Licences (General Conditions)

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189. Definition — In this chapter, “shop” means the licens ed premises where liquor is sold. ”

(emphasis supplied)

18. DISCUSSION & ANAL YSIS

18.1. Rule 113 under Chapter VI of the Rules pertains to the sale of Indian or foreign liquors. It provides that the Excise Commissioner or Deputy Commissioner may issue an F.L. – 1 License for the sale of Indian liquor or foreign liquor, or both, in ac cordance with the provisions of Section 14 (2) of the Excise Act.

18.2. Chapter XIII of the Excise Rules contains the G eneral Conditions of Excise Licenses. Rule 188 states that Chapter XI II will apply to all Licenses issued under the Excise Act for sale of liquors, and every license is deemed to include the conditions prescribed herein.

Rule 189 of the Excise Rules describes “shop” as the licensed premises from where liquor is sold.

Rule 191 (2) provides that the applicant of a license shall select a site, and intimate the licensing authority, who may, after making such enquiry as he thinks fit, approve the site selected.

Rule 191 (4) provides that the Licensee shall sell the liquor only from the approved shop.

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19. The Appellant is the holder of an F.L. – 1 License issued by the Licensing Authority viz . the Deputy Commissioner, Excise, Mahe for carrying out vending of IMFL.

An F.L.-1 Licensee is permitted to sell liquor only to other Licensees, and not in retail.

19.1. The Petitioner was carrying out his wholesale business from MMC, No. 1/40,41 Main Road, Mahe.

19.2. The Appellant filed an Application dated 28.02.2017 for shifting his liquor shop from Mahe to Karaikal under Rules 163 and 209 of the Excise Rules before the Deputy Commissioner, (E xcise), Mahe.

19.3. Rule 209 in Chapter XIII of the Excise Rules provides for Shifting of Shops of all license holders, whether wholesale or re tail.

Rule 209 permits shifting of the liquor shop from one “place” to another, subject to approval by the Licensing Authority on th e terms and conditions contained therein.

The proviso to Rule 209 states that the Licensing Authority may permit shifting of the licensed premises, subject to the fulfillment of the conditions of license, and payment of 1/4 th of the license fee for such shifting.

There is no restriction or prohibition either in the Excise A ct or Rules on the Licensing Authority from granting permission to shift the licensed shop from one region to another, subject to the conditions being complied with.

A fortiori , a licensee can shift a liquor shop from one region to another within the Union Territory of Puducherry, subject to the prior approval of the Competent Authority.

20. We are of the view that the expression ‘from one plac e to another’ is not restrictive, and does not curtail t he power of the Licensing Authority to grant permission for shifting the lice nsed shop from one region to another in the Union Territory of Puducherry so long as the conditions stipulated by the Excise Act and Excise R ules, as also the conditions for grant of a license are complied with. The shifting should not result in the increase in number of liquor shops beyond the maximum number of licenses which may be fixed for a par ticular area under Rule 122 of the Excise Rules.

M/S CEE CEE & CEE CEE’S v. K. DEVAMANI & ORS.

[INDU MALHOTRA, J.]

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21. Given the peculiar demography of the Union Territory of Puducherry, which comprises of four unconnected regions, it would be contrary to the object and purpose of the Excise Act, if a r estrictive meaning was to be given to Rule 209 of the Excise Rules. The A ct must be read as a whole to ascertain the intent of the l egislature.

If the intention of the legislature was to restrict the shifti ng of a liquor shop to a region, locality, municipality, or commune, Rule 209 of the Excise Act would have expressly contained such a prohibition, which is absent.

22. The Excise Act and the Excise Rules use the expression ‘local area’ in contra-distinction with the word ‘place’, whenever it is intended to confine the area in which the liquor shop is located. F or instance, Section 9 of the Excise Act prohibits the transportation of intoxicants from one ‘local area’ to another. Similarly, Section 10 of t he Excise Act restricts the movement of intoxicants beyond a certain quantity which is stipulated for a ‘local area’.

23. We find from the Counter Affidavit filed by the State th at similar proposals for shifting 5 shops to Karaikal from other regions were granted by the Licensing Authority, as per det ails given hereinbelow :

Place of shifting Sr.No. Name & License No. Date of Shifting and Order From To 1. M/s Vijayalakshmi Wines L.No. 8/FL-1 13.07.1995 vide Order No.

13142/93-94/C2/DC(E)

Puducherry Karaikal

2. M/s Vinoth Liquors

L. No. 10/ FL-1

21.01.2009 vide Memorandum

No. 10526/DC(E)/C208 – 09

Puducherry Karaikal

3. M/s Ding Dong Liquors

L. No. 11/ FL-1

29.11.2013 vide Order No.

6146/DC(E)/C2/13-14

Puducherry Karaikal

4. M/s Apollo Wines

L. No. 12/FL-1

11.07.2014 vide Order No.

418/DC(E)/20-14

Mahe Karaikal

5. M/s. Fancy Traders

L. No. 13/ FL-1

13.01.2016 vide Order No.

5176/DC(E)/C2/215-16

Puducherry Karaikal

24. The Counsel for the State submitted that Respondent N os.

2 to 4 – Excise Authorities have assessed the pros and cons of the shifting, and sought the view of the police authorities prior to granting permission to the Appellant. The Report of the Excise O fficer was obtained, which stated that the site of the Appellant at K araikal is not located on the National or State Highway. There are no rel igious or educational institutions which are located within the 100 meters radius of the site at Karaikal. There would be no hindrance to the t raffic in the area. The Superintendent of Police confirmed that there would be A B C D E F G H 395 no law and order problem if the licensed shop of the Appellant is shifted.

25. In the present case, the Licensing Authority i.e. the D eputy Commissioner (Excise) vide Letter dated 07.06.2018 has granted permission to shift the F.L.1 Licensed premises of the Ap pellant from Mahe to Karaikal, subject to compliance with the conditions laid down in Rule 209 of the Excise Rules. The Deputy Commissioner (Ex cise), Mahe permitted shifting of the premises subject to tw o additional conditions viz .

(i) There shall be one and the same entrance and exit only;

(ii) The boundary of the building should be properly protected.

We have been informed by the Counsel for the Appellant and the State that all conditions under the Excise Act an d Rules have complied with.

26. Consequently, Respondent No. 3 - the Deputy Commissioner (Excise), Karaikal vide letter dated 15.06.2018 granted permission to the Appellant to run the F.L.-1 business from the location des ignated in Karaikal.

27. We find no prohibition in the Excise Act or Rules for shifting the F.L.1 Licensed premises from one place to another. The permission dated 07.06.2018 for shifting the licensed shop from Mahe to Karaikal granted by Respondent No. 3 is legal and valid.

28. We allow the Civil Appeals and set aside the Order da ted 14.02.2019 passed by the division bench of the Madras High Court i n W.P. (Civil) Nos. 11767/2018 and 15661/2018.

29. Ordered accordingly.

Pending applications, if any, are accordingly disposed.

Ankit Gyan Appeals allowed.

M/S CEE CEE & CEE CEE’S v. K. DEVAMANI & ORS.

[INDU MALHOTRA, J.]