S.K. Mukherejee Vs. Union of India [1994] INSC 412 (3 August 1994)

Ahmadi, A.M. (J) Ahmadi, A.M. (J) Bharucha S.P. (J)

CITATION: 1994 AIR 2485 1994 SCC (5) 498 JT 1994 (5) 19 1994 SCALE (3)646

ACT:

HEAD NOTE:

The Judgment of the Court was delivered by AHMADI, J.- The Director of Civil Defence, West Bengal, by Order No. 4729-HCD dated 24-7-1965 appointed the petitioner on a temporary basis on the post of Staff Officer-cum- Instructor in the Directorate of Civil Defence, West Bengal in the scale of Rs 175-325 plus usual allowances. The petitioner claims to be a member of the Civil Defence Corps.

On this premise he contends that his case is governed by the Civil Defence Act, 1968 (Act No. 27 of 1968), hereinafter called 'the Act'. The said Act was brought into force with effect from 10-7-1968. It may be advantageous to notice the relevant provisions of the said Act at this stage.

2.The Act was enacted to make provision for civil defence and for matters connected therewith. It extends to the whole of India. The expression "Civil Defence Corps" has been defined to mean the corps formed wholly or mainly to meet the needs of civil defence, including an organisation deemed to be a corps under Section 4(1). That sub-section provides for the constitution of a Civil Defence Corps. It reads as under:

"4. (1) The State Government may constitute, for any area within the State, a body of persons to be called the Civil Defence Corps (hereinafter 500 referred to as the 'Corps') and may appoint a person, not being, in its opinion, below the rank of a District Magistrate (to be known as the 'Controller') to command such Corps:

Provided that if there is in existence in any area in a State, immediately before the commencement of this Act in that area, an organisation which, in the opinion of the State Government, may be entrusted with the functions of the Corps, the State Government may, instead of constituting a separate Corps for such area, call upon that organisation to take over or discharge the functions of the Corps in that area, and thereupon such organisation shall be deemed, for the purposes of this Act, to be the Corps for the area.

(2)The State Government may, for the purpose of coordinating the activities of the Controllers within the State, appoint a Director of Civil Defence and every Controller shall comply with the directions given by such Director." 3.Section 5 empowers the State Government to appoint members and officers of the Corps. Sub-section (2) of Section 5 provides that every person appointed to be a member of the Corps shall be given a certificate of membership. Section 6 provides for the dismissal of a member of Civil Defence Corps while Section 7 provides for an appeal to the State Government against an order made under Section 6. Section 8 enumerates the functions of members of the Corps while Section 9 empowers the Central Government to make regulations. As the petitioner has sought directions in regard to the making of regulations we may reproduce the section for ready reference. It reads thus:

"9. (1) The Central Government may, by notification make regulations for carrying out the purposes of this Chapter.

(2)In particular, and without prejudice to the generality of the foregoing power, such regulations may (a) prescribe the functions of the members of the Corps and regulate the manner in which they may be called out for service;

(b) regulate the organisation, appointment, conditions of service, discipline, accoutrement and clothing of members of any or all of the Corps;

4. Lastly Section 20 provides that every rule made under Section 3 and every regulation made under Section 9 by the Central Government shall be laid before each House of Parliament while in session for thirty days. Admittedly the Central Government has made rules in exercise of power conferred by Section 3 called the Civil Defence Rules, 1968.

So also in exercise of power under Section 9 the Central Government made regulations called the Civil Defence Regulations, 1968. Regulation 4 lays down the manner of applying for appointment to the Corps and Regulation 7 501 prescribes the form of certificate to be given on appointment. Regulation 8 sets out the conditions of service as under:

"8. Conditions of Service.- (1) The members of the Corps shall ordinarily serve in a voluntary and honorary capacity:

Provided that the State Government may, by order, authorise payment of duty allowance (at such scales as may be prescribed by it from time to time in consultation with the Central Government) to a member of the Corps when called on duty.

(2) Notwithstanding anything contained in clause (1), the Central Government may declare any appointment or class of appointments as paid appointments. A person appointed on the basis of payment shall be entitled to such conditions of service as regards pay, leave and other benefits as the State Government may , by order, prescribe." Regulation 13 provides for maintenance of service records whereas Regulation 14 provides for resignation from the Corps. These, in brief, are the relevant legal provisions.

It will thus be seen that the rules and regulations can be made by the Central Government only.

5. We may now briefly state the petitioner's case. The Civil Defence Organisation was set up in India in 1965 under the Defence of India Act and was later converted into a Civil Defence Corps under the Civil Defence Act, 1968.

Accordingly the Civil Defence Organisation of West Bengal was converted into a Civil Defence Corps by notification dated 10-7-1968 and thereupon the petitioner became a member of the said Corps. He also claims to be the Secretary- General of the Civil Defence Officers' Guild, India, a society registered under the West Bengal Societies Registration Act, 1961. The petitioner points out that the Central Government in compliance with the Calcutta High Court's Order in Civil Rule No. 6221 (W) of 1983 took over complete control of the Mobile Civil Emergency Force (MCEF) with effect from 1-4-1992 under office order dated 26-2-1992 whereby existing employees of MCEF, Calcutta became holders of civil posts under the Government of India and delivered all the benefits admissible to such employees. Since the petitioner and others did not receive the same benefit as they were not covered under the said order there was hostile discrimination between two groups of the same organisation in total violation of the equality clause in Article 14 of the Constitution. According to the petitioner since the Civil Defence Act, 1968, is a Central Act and extends to the whole of India including West Bengal, it is incumbent on the Central Government to regulate the recruitment and conditions of service of persons appointed in the Civil Defence organisation all over the country by making appropriate provisions in the rules or regulations so that every employee is governed by a uniform set of service conditions. Since the State Governments are laying down service conditions dehors the rules and regulations under the Act there is total lack of uniformity which has resulted in the petitioner being discriminated in matters of pay, promotion, transfer, etc. Being aware that it has no power to frame regulations, the State of West 502 Bengal resorted to obtaining undertakings from employees who desired to avail of the benefit of its regulations and those who were not prepared to furnish such undertakings were denied the benefits which introduced two sets of service conditions for employees working in the same organisation.

It is said that members of the guild like the petitioner are being victimised for their refusal to sign the undertaking.

Thus the situation is that employees governed by State regulations on the strength of undertakings stand on a different footing from those who have refused to give such undertakings and both these classes taken together stand on a different footing from MCEF employees within the organisation governed by Central Government regulations.

This, contends the petitioner, is clearly violative of Articles 14, 16 and 21 of the Constitution. The petitioner, therefore, seeks in the main the following two reliefs:

"(A) Issue an appropriate writ upon Respondent 1 to frame service rules governing service condition of members of Civil Defence Corps under the Civil Defence Act and take over administrative, financial and operational control of Civil Defence from State Government.

(B) Issue of an appropriate writ prohibiting the respondents from subjecting the petitioner and members of the guild to any rules and regulations outside the provisions of Section 9(2)(b) of Civil Defence Act."

6.In the counter-affidavit filed on behalf of the Union of India it is averred that under the regulations made under Section 9(2)(b), a member of the Civil Defence Corps has to apply in Forms A and B for enrolment and on being enrolled he would receive a certificate in Form C and a service record would be maintained in Form D. The petitioner should have produced some such documentary evidence to prove his say that he was a member of the Corps. On the contrary the petitioner is a full-time paid employee of the State Government appointed under notification dated 28-2-1973.

Thus he is an employee of the State Government governed by the State service conditions. Therefore, the petitioner cannot claim to be governed by rules and regulations made by the Central Government. While conceding that the State Government cannot make rules and regulations under the Act, it is alleged that he would be governed by executive directions of the State Government issued in this behalf.

Therefore, he cannot secure the reliefs sought.

7.The State of West Bengal also denies the petitioner's claim that he is a member of the Civil Defence Corps. On the contrary it contends that the petitioner is in State service covered by the rules of the State Government. He cannot, therefore, invoke Section 20 of the Act. It is lastly said that the petitioner can base no case on the administrative set up of MCEF nor can he complain of discrimination on that basis. The petitioner's petition is, therefore, liable to be dismissed.

8.In his rejoinder to the aforesaid counters the petitioner has reiterated his stand and contended that the factum of his suspension on the allegation 503 that he made baseless allegations in his letter of 7-5-1991 in his capacity as the office-bearer of the guild and the failure of the Government to enquire into the matter has been deliberately suppressed. It is also not stated that in the writ petition filed by the petitioner questioning the suspension, the State Government had made a statement that the action was in exercise of the employer's general power to refuse to take work and had, therefore, agreed to pay full wages during suspension. Therefore, contends the petitioner, it is evident from the counters that the only point surviving for adjudication is whether he is entitled to the benefits under the Act as a full-time salaried officer.

9.From the abridged facts it is evident that rules and regulations can be framed by the Central Government alone under the provisions of the Act. Such regulations under Section 9(2)(b) can inter alia relate to conditions of service. But there is no dispute that the Act could be brought into force by different States from different dates, so however, that such date shall not be earlier to the date on which the Defence of India Act, 1962 would expire. Even according to the petitioner the Act was brought into effect from 10-7-1968. However, the Order No. 4729-HCD dated 24-7- 1965 appointing the petitioner to the temporary post of Staff Officer-cum-Instructor in the Directorate of Civil Defence, West Bengal, being earlier to 10-7-1968, there can be no doubt that the petitioner's appointment was dehors the Act. Section 4(1) provides for the constitution of the Civil Defence Corps by the State concerned but the proviso to that sub-section says that if in any State there is in existence an organisation which can be entrusted the functions of the Corps, the State Government may instead of constituting a separate Corps, call upon the said organisation to take over and discharge the functions of the Corps whereupon such organisation shall be deemed to be the Corps for the area. Section 4(2) empowers the State Government to appoint a Director of Civil Defence to coordinate the activities of the Controllers within the State. Under Section 5(1) it is the State Government which is empowered to appoint members of the Corps. Thus the constitution of the Civil Defence Corps, the appointment of the Controller and the appointments of members/officers of the Corps is with the State Government. Section 17 provides for the delegation of the powers of the State Government/Controller to an officer of the State Government of the rank specified in the said provision. Even so, it is indeed true that the rules and regulations have to be made by the Central Government in view of the clear language of Sections 3 and 9 of the Act. The regulations may inter alia regulate the conditions of service of members of any or all the Corps. Regulation 8 of the Civil Defence Regulations, 1968, extracted earlier, bear on the service conditions of the members of the Corps. On a plain reading of this regulation it becomes immediately obvious that members of the Corps are expected to render service in a voluntary and honorary capacity but if the State Government so desires it may authorise payment of duty allowance in consultation with the Central Government to a member of the Corps called on duty. Clause (2) which begins with a non obstante clause empowers the 504 Central Government to declare any appointment or class of appointments as paid appointments whereupon the incumbent shall be entitled to the conditions of service as regards pay, leave, etc., as the State Government may by order, prescribe. Here again the power of prescribing the service conditions as to pay, leave, etc., rests with the State Government and not the Central Government. Therefore, the petitioner's contention that the service conditions as to pay, leave, etc., cannot be stipulated by the State Government is clearly misconceived. That function has clearly been entrusted to the State Government on a plain reading of Regulation 8 extracted hereinabove. If that be so, and we think it is so, no writ can issue (assuming there is jurisdiction to issue such a writ) to the Central Government as prayed in prayer (A) nor can a prohibitory order of the type prayed in prayer (B) issue to the State of West Bengal. We are afraid the petitioner has been labouring under a misconception that it is only the Central Government and not the State Government which can prescribe the salary, allowances, leave, etc., in view of Section 9(2), but in so thinking he has totally overlooked Regulation 8. We say so because in his petition, affidavits as well as written submissions, no emphasis is laid on Regulation 8. The Central Government's action in complying with court's orders in relation to MCEF can never offer a ground for contending that there has been discrimination and a violation of the equality clause in Article 14 of the Constitution.

10.For the above reasons we are convinced that the present petition is wholly misconceived and the petitioner cannot be granted either or both of the reliefs claimed by him. His petition, therefore, fails and is dismissed. Having regard to the fact that the petitioner is in dire circumstances since he is under suspension, we order to bear their own costs. Rule discharged. No order on IA.

505

SWAROOP N. SRIVASTAVA v. IVTH ADDL.DISTT.JUDGE (Venkattachala. J.) The Judgment of the Court was delivered by VENKATACHALA, J.- Special leave sought for in this petition is granted and we have heard learned counsel for the parties on the merits of the appeal.

2.For a residential building fallen vacant under sub- sections (3) and (4) of Section 12 of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 ('the Act') if under sub-section (1) of Section 16 of the Act, an application is received from the landlord of that vacant building for its release in his favour and another application is received from the former tenant of that building for its reallotment in his favour, which of those two applications require priority in the matter of their disposal by the District Magistrate concerned, is the question arising for our consideration in this appeal.

3. As it would be advantageous to refer to the facts which have given rise to the said question, brief mention of those facts could be made before its consideration.

4.Shri Swaroop Narain Srivastava, the appellant in this appeal, is the landlord of House No. 395/3 1, Raj Bhawan, Kashmiri Mohalla, Lucknow 'the disputed house'. By an allotment order made under the Act, that disputed house had been allotted in favour of one Sita Ram Shakya and he became its tenant.

506

5.Since Sita Ram Shakya, the tenant of the disputed house, died on 18-5-1973, Respondent 2, the wife of the deceased, Respondents 3 and 4, the sons of the deceased and Dr R.R.P. Singh, another son of the deceased, became the joint tenants of the disputed house as the heirs of the deceased living with him. However, when one of the said tenants of the disputed house Dr R.R.P. Singh, by an allotment order made under the Act in his favour on 30-3- 1975, got allotted another house in the same locality, a question arose whether the disputed house had fallen vacant by operation of sub-sections (3) and (4) of Section 12 of the Act. That question ultimately came up for consideration before a Full Bench of the Allahabad High Court on a reference made to it in a writ petition before that High Court. It was held by its order dated 12-3-1981 that the disputed house had fallen vacant under sub-sections (3) and (4) of Section 12 of the Act, when one of the joint tenants of the disputed house was allotted a separate residential house in the same locality under the provisions of the Act.

Subsequently, the writ petition which had been filed in the High Court disputing the decision of the revisional authority that the disputed house had fallen vacant, was dismissed by an order made by the High Court on 23-4-1981.

As a result of the dismissal of the said writ petition, an application which had been made by the appellant under Section 16(1)(b) of the Act for release of the disputed house in his favour and an application which had been made under Section 16(1)(a) of the Act by Respondents 2 to 4 for reallotment of the disputed house in their favour came up for consideration before the Additional District Magistrate (City) Lucknow in Case No. 62/193 of 1982. That Additional District Magistrate considered the said application made by the appellant for release of the disputed house in preference to the other application made by Respondents 2 to 4 for reallotment of the disputed house in their favour and granted the application made by the appellant for release of the disputed house in his favour, as in his view, when there was an application for release of the vacant building made by the landlord and when there was an application made by the former tenants for reallotment of the vacant building, the consideration of the application of the landlord had to be done on a preferential basis. On such consideration of the application for release of the disputed house made by the appellant, the Additional District Magistrate found on the basis of evidence placed before him that the appellant- landlord required the disputed house for his bona fide use and occupation. Consequently, he made a release order in respect of the disputed house in favour of the appellant on 24-8-1982. However, he allowed one month's time to Respondents 2 to 4 to vacate the disputed premises so as to enable the appellant to occupy it. The litigation did not come to an end there. Respondents 2 to 4 questioned the correctness of the order of the Additional District Magistrate by filing a Revision Petition RR. No. 111 of 1982 in the Court of the District Judge, Lucknow. The lvth Additional District Judge, Lucknow, who heard that revision petition allowed it by setting aside the order of Additional District Magistrate, Lucknow dated 24-8-1982 and remitting the case to Additional District Magistrate (City), Lucknow with a 507 direction to him to decide the reallotment application made by Respondents 2 to 4 in preference to the application made by the appellant for release of the disputed house in his favour. When the appellant filed a writ petition WP No. 6189 of 1982 against the said order of the court of the Ivth Additional District Judge in the High Court of Judicature at Allahabad, that High Court dismissed the writ petition upholding the impugned order of the Ivth Additional District Judge, Lucknow. The said orders of the Ivth Additional District Judge, Lucknow and of the High Court are appealed against by the appellant in the present appeal by special leave.

6.The disputed house, a residential building, of which the appellant was the landlord, had fallen vacant under sub- sections (3) and (4) of Section 12 of the Act, as is held by the Full Bench of the Allahabad High Court in its judgment dated 12-3-1981. This aspect of the case was not disputed before us. Therefore, the only question which requires our consideration in this appeal is whether the application for release of the vacant disputed house was rightly decided by the Additional District Magistrate in preference to the application for reallotment of that vacant disputed house made by Respondents 2 to 4, or whether the application for reallotment of the vacant disputed house made by Respondents 2 to 4 alone required to be considered on preferential basis as is held by the district court in a revision petition before it and the High Court in the writ petition before it.

The district court and the High Court as seen from their judgments have taken the view that the application for reallotment made by Respondents 2 to 4 required prior consideration and disposal as against the application for release made by the appellant because proviso (b) of sub- rule (6) of Rule 20 when enabled Respondents 2 to 4 to seek reallotment of the disputed house which had fallen vacant according to sub-section (3) of Section 12 of the Act, that application for reallotment of the disputed house made by Respondents 2 to 4 required to be considered on a preferential basis. According to them, such preferential consideration of reallotment application made by Respondents 2 to 4 would be necessary to obviate the hardship which they may have to suffer in the event of the vacant disputed house, is not allotted in their favour. In our view, the district court as well as the High Court had fallen into a grave error in thinking that the hardship to which the former tenants could be put could be obviated in the event the building which had become vacant on account of its falling vacant under sub-sections (3) and (4) of Section 12 of the Act is allotted to them, when such view cannot receive support either from the provisions of the Act or from the provisions of the U.P. Urban Buildings (Letting, Rent and Eviction) Rules, 1972 ('the Rules'. All that has happened is when sub-rule (6) of Rule 10 of the Rules prohibited the making of the application by certain persons, proviso (2) thereto enables persons like Respondents 2 to 4 who must be deemed to have vacated the residential building to make an application for reallotment of such building. If that be so, permissibility to make an application for reallotment by 7 Respondents 2 to 4, cannot entitle them for prior consideration and disposal of their application for reallotment by the District Magistrate in preference to 508 the application for release made by the landlord, the appellant or any other applications of the persons who are given preferential claim for allotment of a vacant building under the provisions of the Act and the Rules. Sub-section (1) of Section 16 of the Act which permits the filing of applications before the District Magistrate by the landlord for release of the building fallen vacant and by others for reallotment of such building insofar as is material reads:

"16. Allotment and release of vacant building.- (i) Subject to the provisions of the Act, the District Magistrate may by order (a) require the landlord to let any building which is or has fallen vacant or is about to fall vacant, or a part of such building but not appurtenant land alone, to any person specified in the order (to be called an allotment order); or (b) release the whole or any part of such building, or any land appurtenant thereto, in favour of the landlord (to be called a release order):

Provided that in the case of vacancy referred to in sub-section (4) of Section 12, the District Magistrate shall give an opportunity to the landlord or the tenant, as the case may be, of showing that the said section is not attracted to his case before making an order under clause (a)-" Requirement of the proviso is admittedly fulfilled because of the holding of the Full Bench of the High Court that the disputed house had fallen vacant.

7.When Rule 10 of the Rules which provides for allotment procedure is seen, nowhere it is provided that an application for allotment of a vacant building should be considered in preference to the application made for release of the vacant building by the landlord. On the other hand, Rule 13 which provides the procedure for consideration of the application made for release of a vacant building by the landlord, by its sub-rule (4) requires that landlord's application for release under the rules shall, as far as possible, be decided within one month from the date of its presentation and no allotment in respect of a building covered by an application in that rule shall be made unless such application has been rejected. Thus, when sub-rule (4) of Rule 13 expressly states that unless an application made by the landlord for release of a vacant building is rejected, no allotment of the vacant building covered by that application could be made, it in terms requires consideration of the application for release of vacant building at the first instance in preference to other application for allotment. Therefore, it must be held that the rule requires the consideration of the application for release made by the landlord in respect of the vacant building and decision thereon in preference to consideration of any other application for allotment or reallotment made in respect of that vacant building. If that be our answer to the question under consideration the orders of the district court and the High Court appealed against in this appeal become unsustainable and require to be interfered with.

509

8. In the result, we allow this appeal, set aside the order dated 15-12-1982 of the Court of Additional District Judge made in Rent Revision No. 111 of 1982 and order dated 28-4- 1983 of the High Court made in WP No. 6189 of 1982 and restore the order dated 24-8-1982 of the Additional District Magistrate (City), Lucknow made in Case No. 62/193 of 1982 with the modification that Respondents 2 to 4 or any person claiming through them who may be in possession of the disputed house shall put the appellant in possession of the same forthwith. However, in the facts and circumstances of this civil appeal Respondents 2 to 4 shall pay to the appellant-landlord costs of this appeal which we quantify at Rs 20,000.

513

MADRAS CITY WINE MERCHANTS ASSN. V. STATE OF T. N.(Mohan, J.) The Judgment of the Court was delivered by MOHAN, J.- Leave granted.

2. The first appellant in CA No. 4981 of 1994 arising out of SLP (C) No. 9854 of 1993 is an Association registered under the Societies Registration Act. The members of the Association have been granted licences to carry on business in the retail vending of Indian-made foreign spirits (hereinafter referred to as 'I.M.F.S.').

3. The second appellant is a licensee of I.M.F.S. Shop No. 336 at No. 7, Thyagaraja Road, Madras-17 for the year 1992- 93.

4. The respondent, the Government of Tamil Nadu framed the Tamil Nadu Liquor (Licence and Permit) Rules, 1981. Under these Rules, Indianmade foreign spirit and foreign liquor was to be sold only by persons who are granted licence for personal consumption. In the year 1989, the Government of Tamil Nadu decided to grant the privilege of selling by retail of I.M.F.S. and beer through auction/tender system.

Accordingly, the Government framed Tamil Nadu Liquor (Retail Vending) Rules, 1989 by GOMs No. 506 Home (Prohibition) dated 15-4-1989. In the auction, the successful bidder was granted the licence to carry on the business of vending I.M.F.S. in retail in their respective shops. The licence was valid for a period of one year. Under the said rules, it was provided for a renewal of the licence for two successive years on the licensee offering to pay 15% and 10% respectively more than the privilege amount at which the sale was confirmed in his favour during the previous years.

Rule 13 contained all these clauses. Under Rule 14(3), a provision was made that it was open to the licensing authority to refuse the renewal by an order recording the reasons for refusal. However, before such refusal, the licensing authority was obligated to give a reasonable opportunity to the licensee of being heard.

5. The successful bidders obtained licences for the year 1989-90 and carried on the business. Most of them obtained renewal for the subsequent excise year 1991-92.

514 6.The Government issued orders in GOMs No. 90 Prohibition dated 21-4-1992 to the effect that fresh auction may be conducted for all the liquor retail vending shops whose licence period expires on or before 31-5-1992 as well as those whose licence period expires on or after 31-5-1992 by restricting the period of licence to 31-5-1992 and refunding the proportionate portion of the privilege amount. This course was adopted in order to facilitate the Government to evolve fresh scheme of upset price for auctioning of the liquor retail vending shops in the State.

7.The notification also provided that the licence to be issued for the year 1992-93 shall be renewed for the second and third years after collecting increased privilege fees.

The prescription relating to increased fees was provided under Rule 14(1) and (2) of the 1989 Rules made under the Tamil Nadu Prohibition Act, 1937. An ordinance was passed terminating the validity of licences which enured beyond 31- 5-1992 with the expiry of the said period. Subsequently, Tamil Nadu Act 42 of 1992 came into force with effect from 12-5-1992. By this Act Section 23(b) of the Tamil Nadu Prohibition Act, 1937 was substituted. In accordance with GOMs No. 90 Prohibition dated 21-4-1992, auctions came to be conducted. The successful bidders were issued the licences.

At that stage, the Government received representations from these dealers for the establishment of a bar within or adjoining licence premises. The Government forwarded these representations to the Commissioner of Prohibition and Excise and obtained necessary recommendations. Thereafter, the Government framed rules by GOMs No. 99, Prohibition, dated 26-5-1992 known as Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992. Those rules permitted to open a bar within or adjoining licence premises. These rules came into force on 1-6-1992. Rule 3 provides for grant of privilege by issue of licence to a person holding a licence granted under Rule 13 of the 1989 Rules for retail vending of liquor in the bar. The rules stated retail vending of liquor includes the vending of liquor in open bottles, glasses or pegs for consumption in the bar. Rule 4 required every person holding a licence granted under Rule 13 of 1989 Rules and who intends to obtain the privilege of retail vending of liquor in the bar shall make an application in the prescribed form to the licensing authority for the grant of privilege and issue of licence for retail vending of liquor in the bar. Every licensee of retail I.M.F.S. shop was entitled to apply for and obtain a bar licence on payment of a licence fee and the privilege amount ranging from Rs 18,750 to Rs 75,000 depending upon the area in which the shop was located.

8.The case of the appellant is, in order to obtain the privilege of vending I.M.F.S. in retail for the excise year 1992-93, the members of the first appellant-Association increased their offer. This huge offer was to enable them to have a bar attached and thereby increased the volume of sale of liquor. On obtaining licences under retail vending rules, the members of the appellant-Association spent considerable sums of money for acquiring the adjoining premises to locate the bar in accordance with the Bar Rules.

They 515 were carrying on business in accordance with the rules with the fond hope of making good the investment and also earn a profit during the period to come.

9. It appears that the Government received various complaints. The drinking in the Bars led to law and order problem. Therefore, by impugned GOMs No. 44, Prohibition and Excise dated 3-3-1993, the Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 were rescinded with effect from 1-6-1993. The said GO was challenged before the High Court of Madras in WP No. 7776 of 1993. The writ petition was dismissed on the ground that the court could not interfere with the policy decisions taken by the State. Aggrieved by the same, Writ Appeal No. 658 of 1993 was preferred. By the impugned judgment dated 13-6-1993, the writ appeal was dismissed holding that the policy of the Government is one step marching towards the total prohibition. The appellants could not base their case on legitimate expectation, nor was there any violation of Article 14 of the Constitution.

Thus, the present civil appeals.

10. Ramanathapuram District Liquor Retail Sellers' Association has preferred Writ Petition (Civil) No. 648 of 1993 under Article 32 of the Constitution of India, challenging GOMs No. 44 dated 3-3-1993.

11. Mr K. Parasaran, learned Senior Counsel, appearing for the appellants in Civil Appeal No. 4981 of 1994 arising out of SLP (C) No. 9854 of 1993 submits that change of policy must pass muster of Article 14 of the Constitution of India.

When the State Government has permitted the sale of liquor, the change of policy can be tested on the touchstone of Article 14 of the Constitution of India. In Supreme Court Advocates-on-Record Assn. v. Union of India 1 (SCC p. 703), this Court has taken the view that due consideration of every legitimate expectation in the decision-making process is a requirement of the rule of non-arbitrariness. Again, in Kumari Shrilekha Vidyarthi v. State of U.p.2 this Court has taken the view, a change in policy should not be done arbitrarily.

12. In support of this submission, reliance is placed on Halsbury's Laws of England, Vol. 1(1), 4th Edn., para 81 at page 15 1.

13. In this background of law, the facts require to be analysed. By GOMs No. 90, Prohibition and Excise dated 21-4-1992 retail selling of liquor was permitted. Such licence-holders were entitled to renewal as well. On their representations the Bars came to be permitted. Thereafter GOMs No. 99 dated 26-5-1992 came to be passed enabling these licence-holders to open Bars. It is noteworthy that under both the sets of rules a provision is made for renewal. It was in the hope that bar licence will be renewed for the subsequent years as well, each licensee spent huge amounts in opening the Bars. In such a case, the plea of legitimate expectation certainly will come to the rescue of the appellants. No doubt, the State can change its policy but it cannot be done arbitrarily as held in the above cases.

Raising a hope in the 1 (1993) 4 SCC 441, 703 2 (1991) 1 SCC 212, 239-40: 1991 SCC (L&S) 742: 1990 Supp (1) SCR 625, 650 516 retail vendors that they would be allowed to carry on vending in Bars, renewal being a matter of course, suddenly to deny that privilege is arbitrary.

14. A privilege once accrued cannot be taken away. This is a clear implication of Section 8(3) of the Tamil Nadu General Clauses Act. More so, in a case like this where the rules are prospective in nature such a legitimate expectation cannot be denied. Section 4 of the Tamil Nadu General Clauses Act does not, in any way, militate against the operation of Section 8. If retail vending of liquor is permitted there cannot be anything wrong in selling the same liquor in the bar.

15. Lastly, the learned counsel cites R. Vijayakumar v.

Commissioner of Excise3 and submits that even in policy matters Article 14 of the Constitution will apply.

16.Mr R.K. Garg, learned counsel, appearing for the appellants in CA No. 4982 of 1994 arising out of SLP (C) No. 9957 of 1993 submits as follows.

17.The Prohibition Act provides for complete prohibition.

However, the Government has reserved to itself the power to grant exemption in order to augment financial resources.

The Government of Tamil Nadu in the year 1992-93 decided as a policy to provide for bar licence attached to the retail shops in order to augment revenue on auctions of retail shops. This change in policy was notified before the auction for the year 1992-93 stating only retail venders will be eligible for bar licences. Out of the successful retail shop vendors 300 and odd applied and secured bar licence in accordance with the definite condition of auction held in 1992-93 that licence for bar attached to the shop will be granted after application was received and the prescribed fee was paid. The State of Tamil Nadu has, by this integrated new policy, escalated the bid amounts, in addition earned bar licence fees. Thus, it is submitted that the rules relating to retail vending of IMFL and the rules for sale of liquor in Bars attached to the shop formed a single integrated scheme. Such a trade was to go on for a period of 3 years with automatic yearly renewal on terms specified without fresh auction. The Government cannot destroy the integrated character of trade. This arbitrary action has resulted in unjust enrichment on the part of the Government and breach of faith bordering on fraud. No demonstrable basis was disclosed for such an action.

18.The Government illegally and arbitrarily delinked the retail sale from sale in the Bars. Such an integrated policy could not be so changed as to impose unjust back- breaking burden's on the retail vendors. This amounts to destruction of fair play. It is also violative of Article 14 of the Constitution of India.

19.The impugned notification dated 3-3-1993 has to be tested on the following grounds:

1. Whether the Bar Rules could be rescinded arbitrarily? 3 1994 Supp (2) SCC 47 : JT (1993) 6 SC 325 517

2. Whether both the sets of Rules form integrated policy?

3. The State having made the retail vending licensees part with huge amount in the hope they could have Bars if not bound to honour its commitment.

A change in policy affects not merely legitimate expectations but also the credibility of State to act fairly and reasonably.

20. The impugned notification is also arbitrary because no examination was undertaken warranting change of policy. No committee was appointed. No report was received before the impugned notification was issued. The State has proceeded on unfounded apprehensions relating to law and order.

21. It is violative of Article 14 of the Constitution because:

(i) It is destructive of the principles of natural justice;

(ii) it is not based on relevant considerations and fair determination of changed circumstances justifying prejudice and injury to the lawful interest of the retail vendors;

(iii) no damage to public policy is established requiring all Bars had to be closed.

In support of the above submissions Mr R.K. Garg, learned counsel, cites State of M.P. v. Nandlal Jaiswal4. On the strength of this ruling it is submitted that an integrated policy cannot be broken.

22. On the question of legitimate expectation reliance is placed on Council of Civil Service Unions v. Minister for the Civil Service5.

23. Mr G.L. Sanghi, learned counsel, appearing for the State of Tamil Nadu traces the history relating to prohibition in Tamil Nadu. On 16-7-1991, the present Government, as a first step towards implementation of total prohibition policy in the State, brought complete prohibition in relation to manufacturing and trading of country liquor.

This was done because the State took note of the serious social evil uprooting the family life of very many poor people in the State. Thereafter GOMs 90 dated 21-4-1992 was passed enabling auction of liquor retail vending shops. At that point of time retail vending shops were not allowed to have bar attached to the licence shops. They were to sell the liquor only in bottles. In the earlier year the total number of retail vending shops was 3049 whereas in the year 1992-93 the number of shops increased to 4216. There was also an increase in the revenue from 32 crores to 98 crores.

This increase was due to the commercial expectation of the bidders and the heavy competition among them.

24.The Government also thought it fit that such shop owners who have licence might be allowed to have Bars attached to the shops. It was in this view the bar licence was granted to those persons who held the licence for shops under Tamil Nadu (Liquor Retail Vending) Rules, 1989. The 4 (1986) 4 SCC 566 5 (1984) 3 All ER 935 : 1985 AC 374: (1984) 3 WLR 1174, HL 518 Government received various representations that such running of Bars attached to retail vending shops had become nuisance to the public particularly to the womenfolk.

Therefore, the Governor of Tamil Nadu in his speech made in the Legislative Assembly on 4-2-1993 announced the policy decision of the Government to abolish Bars. It was under these circumstances, GOMs No. 44 dated 3-3-1993 came to be passed discontinuing both the grant and the renewal of bar licences. This GO was unsuccessfully challenged before the High Court. It is submitted that only under the authority of rules the vendor was empowered to sell liquor. There are two different sets of rules one of the year 1988 dealing with the retail vending of IMFS; 1992 Rules dealing with bar licences. There is no question of these two different sets of rules becoming an integrated scheme. That being so, the principle of Nandlal case4 cannot apply. In the case of a statutory rule, no question of arbitrariness would arise.

It is always open to a State to change its policy. If the contention of the appellants is accepted it would amount to fettering the State from repealing a law. This Court in Ghaziabad Development Authority v. Delhi Auto & General Finance Pvt. Ltd.6 has clearly pointed out the inapplicability of the doctrine of legitimate expectation.

The same is the position here.

25.As regards the principle that the Government cannot claim any immunity from the doctrine of promissory estoppel and there is no obligation to act fairly and justly, reliance is placed on Vasantkumar Radhakisan Vora v. Board of Trustees of the Port of Bombay7.

26.The next submission of the learned counsel is, legislative action whether plenary or subordinate is not subject to natural justice. It has been so laid down in Union of India v. Cynamide India Ltd.8 To the same effect is Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India9. The principle that subordinate legislation cannot be questioned on the ground of violation of the principle of natural justice, has been reiterated. In the case of liquor vending licences one can expect to have renewal on payment of 15 per cent or 10 per cent, as the case may be. But in a bar licence there is no possibility of renewal of the privilege because Rule 6(1)(c) states: "A privilege amount as may be fixed by the Government in this behalf." If, therefore, it is a privilege no question of right to renewal arises. Lastly, it is submitted that no representation was made. Therefore, the question of promissory estoppel cannot arise.

27.Mr V.R. Reddy, learned Additional Solicitor General, submits that there is no scope in this case for contending that the principle of legitimate expectation would arise.

Union of India v. Hindustan Development Corpn. 10 is an authority for the proposition that this principle applies only to 6 (1994) 4 SCC 42: JT (1994) 3 SC 275 7 (1991) 1 SCC 761 8 (1987) 2 SCC 720: AIR 1987 SC 1802 9 (1985) 1 SCC 641, 691: 1985 SCC (Tax) 121 : (1985) 2 SCR 287, 347 10 (1993) 3 SCC 499: JT (1993) 3 SC 15, 50-51 519 administrative decisions. When the State completely prohibited the manufacture and sale of country liquor it brought a windfall to those selling IMFS. This accounts for the increase in the excise revenue.

28.Supporting the argument of Mr G.L. Sanghi that the principle of natural justice is not applicable to legislative acts H.S.S.K. Niyami v. Union of India11 is cited.

29.With regard to the applicability of Section 8 of the Tamil Nadu General Clauses Act it is submitted that the repeal shall not affect the previous operation of the repealed law, has no application to the present case. The citation in this behalf is Indira Sohanlal v. Custodian of Evacuee Property, Delhi12.

30. Before we go into the questions of law arising in this case, we will brieflytrace the legislative history leading to the impugned order.

31. Thanks to the courage and wisdom of Mr C. Rajagopalachari (Rajaji), prohibition came to be introduced in his own native district of Salem in the year 1937 by enacting Madras (later Tamil Nadu) Prohibition Act of 1937.

By stages it was extended throughout the State in 1948. So much so the Gandhian ideal of the abolition of evil of drinking was realised. To recall the Father of the Nation Mahatma Gandhi:

"Nothing but ruin stares a nation in the face that is prey to the drink habit." In this Act two important sections for our purposes are Sections 54 and 55. They are quoted in full:

"54. Power to make rules.- (1) The State Government may make rules for the purpose of carrying into effect the provisions of this Act.

(2) In particular and without prejudice to the generality of the foregoing provision, the State Government may make rules- (a) for the issue of licences and permits and the enforcement of the conditions thereof;

(aa)*prescribing the penalty for wastage or shortage of spirits in excess of the prescribed limits at such rate not exceeding twice the normal rate of excise duty or fee that would be payable on the quantity of the spirits lost in excess of the prescribed limits;

(b) prescribing the powers to be exercised and the duties to be performed by paid and honorary Prohibition Officers in furtherance of the objects of the Act;

(bb) ** prescribing the ways in which the duty under Section 18-A may be levied;

11 (1990) 4 SCC 516: AIR 1990 SC 2128 12 (1955) 2 SCR 11 17 : AIR 1956 SC 77 * Clause (aa) inserted by Act 68 of 1986 ** Clause (bb) inserted by Act 19 of 1948 520

(c) determining the local jurisdiction of Police and Prohibition Officers in regard to inquiries and the exercise of preventive and investigating powers;

(d) authorizing any officer or person to exercise any power or perform any duty under this Act;

(e) prescribing the powers and duties of prohibition committees and the members thereof and the intervals at which the members of such committees shall make their reports;

(f) regulating the delegation by the Commissioner or by Collectors or other district officers of any powers conferred on them by or under this Act;

(g) regulating the cultivation of the hemp plant, the collection of those portions of such plant from which intoxicating drugs can be manufactured and the manufacture of such drugs therefrom;

(h) declaring how denatured spirit shall be manufactured;

(i) declaring in what cases or classes of cases and to what authorities appeals shall lie from orders, whether original or appellate, passed under this Act or under an y rule made thereunder, or by what authorities such orders may be revised, and prescribing the time and manner of presenting appeals, and the procedure for dealing therewith;

(j) for the grant of batta to witnesses, and of compensation for loss of time to persons released under sub-section (3) of Section 38 on the ground that they have been improperly arrested, and to persons charged before a Magistrate with offences under this Act and acquitted;

(k) regulating the power of Police and Prohibition Officers to summon witnesses from a distance under Section 42;

(1) for the disposal of articles confiscated and of the proceeds thereof;

(m)+ for the prevention of the use of medicinal or toilet preparations for any purpose other than medicinal or toilet purposes and for the regulation of the use of any liquor or drug exempted from all or any of the provisions of this Act;

(n)+ for the proper collection of duty on all kinds of liquor or drugs;

(nn)+ for exemption from, or suspension of the operation of any rule made under this Act;

(o)+ for all matters expressly required or allowed by this Act to be prescribed.

+ Clauses (m), (n), (o) inserted by Act 8 of 1958 and clause (nn) added by Act 1 of 1975 with effect from 1-9-1974 521 (2-A)++ A rule or notification under this Act may be made or issued so as to have retrospective effect on and from a date not earlier than,- (i) the 1st of September, 1973, insofar as it relates to toddy; and (ii) the 1st of September, 1974, insofar as it relates to any liquor other than toddy.

(iii)+++ the 1st of May, 1981, insofar as it relates to the matters dealt with in Sections 17-B, 17-C, 17-D, 17-E, 18-B and 18-C :

*Provided that a notification issued under sub-section (1) of Section 16 may have retrospective effect from a date not earlier than 1st November, 1972:

*Provided further that the retrospective operation of any rule made or notification issued under this Act shall not render any person guilty of any offence in regard to the contravention of such rule or the breach of any of the conditions subject to which the exemption is notified in such notification when such contravention or breach occurred before the date on which the rule or notification is published, as the case may be.

(3)** All rules made under this Act shall, as soon as possible after they are made, be placed on the table of the Legislative Assembly and shall be subject to such modifications by way of amendments or repeal as the Legislative Assembly may make within fourteen days on which the House actually sits either in the same session or in more than one session.

55. Publication of rules and notifications.- All rules made and notifications issued under this Act shall be published in the Official Gazette and upon such publication, shall have effect as it enacted in this Act." (emphasis supplied)

32. The operation of the Prohibition Act was temporarily suspended in August 1971. However, prohibition was reintroduced in August 1972 by abolition of toddy shops and in September 1974 by abolition of arrack shops. Even while the prohibition was enforced the sale of IMFS continued in licensed shops to permit-holders.

33. In May 1981, once again sale of toddy and arrack was permitted. The manufacture of IMFS was also permitted.

Concerning the sale of IMFS the Tamil Nadu Liquor (Licence and Permit) Rules, 1981 were framed. In the year 1989 the Tamil Nadu Liquor (Retail Vending) Rules, 1989 (for short, Retail Vending Rules) were framed by which the 1981 Rules were repealed insofar as they related to the retail vending of IMFS and beer. Rule 3 of these rules states the privilege of selling liquor in licence shops would be available to persons by auction. The privilege amount was determined in that ++ Sub-section (2-A) inserted by Act 1 of 1975 +++ Item (iii) added by Act 51 of 1981 * The provisos inserted by Act 68 of 1986 ** Sub-section (3) added by Act 8 of 1958 522 auction. The State was enabled under Rule 4(1) to fix the maximum number of shops to be established in the State.

34.Prior to the auction, notice of auction in Form No. 1 has to be published in Tamil and English dailies. As per rule any person intending to participate in the auction has to deposit an earnest money of Rs 10,000 in an area falling within the limits of the Municipal Corporation or Municipality; a sum of Rs 7500 in other areas. Rule 8 requires offer by tender in sealed cover as prescribed in Form IV. After the confirmation of sale of privilege the auction-purchaser has to make an application in Form VI for the grant of licence. The licensing authority after verifying various factors, as may be necessary for satisfying itself, as to the suitability of the auction- purchaser, grants a licence within three days of the order of confirmation of sale. The licence so granted shall remain valid for a period of one year ending with 31st May of succeeding year.

35. From the above procedure the following is clear:

1. Even if one happens to be the successful bidder in the auction, it does not automatically entitle him to a licence.

2. The licence once granted is valid for only one year ending with 31st of May of succeeding year.

In this regard Rule 14 of the Retail Vending Rules is relevant which is extracted below:

"Renewal of licence.- (1) If a licensee intends to renew the licence for the second year he shall apply at least 30 days before the date of expiry. of the licence for renewal in Form VIII after remitting- (i) an application fee of Rs 100 (Rupees one hundred only);

(ii)the licence fee of Rs 2500 (Rupees two thousand and five hundred only); and (iii)the privilege amount determined at fifteen per centum more than the privilege amount at which the sale of the privilege was confirmed in the previous year.

(2) If a licensee intends to renew the licence for the third year, he shall apply at least 30 days before the date of expiry of the licence for renewal in Form VII after remitting- (i) an application fee of Rs 100 (Rupees one hundred only);

(ii)the licence fee of Rs 2500 (Rupees two thousand and five hundred only) and (iii) the privilege amount determined at ten per centum more than the privilege amount at which the sale of the privilege was confirmed in the previous year.

Proviso omitted.

(3) If the licensing authority decides not to renew the licence, he may refuse renewal by an order recording the reasons for refusal:

(emphasis supplied) 523 Provided that the licensing authority shall give a reasonable opportunity of being heard to the licensee before such refusal.

(4)If a licence is not renewed, the licence fee remitted by the licensee shall be refunded to him." What is important to be noted here is, under Rule 14(3) of the said Rules the licensing authority is empowered either to renew or not to renew the licence. Therefore, there is -no automatic renewal. These rules were approved on 15-4- 1989 by GOMs No. 506, Home, Prohibition and Excise dated 15- 4-1989.

36. The present Government assumed office in June 1991. On 16-7-1991 complete prohibition of manufacture and trade in country liquor was imposed. Undoubtedly, this was a step in furtherance of Article 47 of the Constitution of India. On 21-4-1992, by GOMs No. 90 the Government ordered the auction of retail vending shops throughout the State. The sale of liquor was to be in bottles. At this stage, no bar was allowed to be attached to the licence shop of retail vending. For the excise year 1992-93 the number of shops increased and the excise revenue also correspondingly increased. As rightly urged by learned Additional Solicitor General this increase was due to the total prohibition of country liquor, namely, toddy and arrack. The retailers made a representation that they could be allowed to have bar attached to the shops. It was in these circumstances, GOMs No. 99, Prohibition and Excise Department dated 26-5-1992 came to be passed. It must be made clear at this stage that these Rules called Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 deal only with the bar regulating the issue of licence and the privilege of retail vending of liquor in the bar. The Rules came into force on 1-6-1992. Under Rule 4(a) it is only a person holding a licence granted under Rule 13 of Retail Vending Rules, 1989 who can make an application for the grant of privilege and issue of licence for retail vending of liquor in the bar.

37. The privilege amount varied from place to place from Rs 18,750 to Rs 75,000.

38. The period of licence was coterminous with the period of licence issued for vending liquor. Rule 6 dealing with renewal of licence is important. Clauses (1), (2) and (4) of Rule 6 are quoted hereunder:

"Renewal of licence.- (1) If the licensee intends to renew the licence for the second term he shall apply not later than thirty days before the date of expiry of the licence issued under Rule 4 in Form III together with the following amount- (a) an application for Rs 100 (Rupees One hundred only);

(b) a licence fee of Rs 500 (Rupees Five hundred only);

(2) If the licensee intends to renew the licence for the third term, he shall apply not later than thirty days before the date of expiry of the licence renewed, in Form III.

524 (4) The licensing authority may refuse the renewal of a licence by an order in writing for reasons to be recorded therein :

Provided that the licensing authority shall give a reasonable opportunity of being heard to the licensee before such refusal."

39. It has to be carefully noticed that under Rule 6(1)(c) the privilege amount may be fixed by the State Government in that behalf. Further there is power to refuse renewal; of course, for valid reasons subject to right of appeal and revision under Rules 16 and 17. On 4-2-1993 the Governor of Tamil Nadu made the following address:

"Prohibition as a key issue of State Policy is a constitutional directive. Honourable Members of the House are aware that the Government, under the leadership of the Chief Minister, Dr J. Jayalalitha, implemented as its first decision the abolition of cheap liquor shops throughout the State, in keeping with its announced policy of prohibition, although this involved an annual loss of revenue of Rs 390 crores. The drive against bootlegging and illicit liquor was intensified with the formation of the Prohibition Enforcement Wing. The Chief Minister's drive against erring officials resulted in a noticeable reduction in the incidence of illicit liquor. A massive multi-media propaganda offensive against the evils of liquor has also been launched. We have decided to give a decisive edge to the offensive against illicit liquor by strengthening further the Prohibition Enforcement Wing at a cost of Rs 7 crores.

With one enforcement unit in each Police Sub- Division, the Enforcement Wing will act effectively against the antisocial elements engaged in the illicit liquor trade. This Government places the highest emphasis on the welfare of the people, revenue considerations yielding place to consideration of maximum social good. Members of the House will wholeheartedly welcome the decision of the Government to withdraw the licences for Bars attached to foreign spirit shops with effect from the excise year commencing from June, 1993." Pursuant to this, the impugned GOMs No. 44, Prohibition and Excise Department came to be passed on 3-3-1993. That reads as under:

"Prohibition and Excise (VI) Department GOMs No. 44 Dated:

3-3-1993 Read:

GOMs No. 99, Prohibition of Excise, dated 26-5-1992 ORDER The Government have decided to discontinue the granting/renewal of licences for bars attached to the Indian-made liquor retail vending shops under the Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 with effect from the excise year commencing from the 1-6-1993.

525

2. The following notification will be published in the Tamil Nadu Government GaZette.

Notification In exercise of the powers conferred by Sections 17-C, 17-D, 21 and 54 of the Tamil Nadu Prohibition Act, 1937 (Tamil Nadu Act X of 1937). The Governor of Tamil Nadu hereby rescinds the Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992, with effect on and from 1-6-1993.

(By Order of the Governor) K. Malaisamy Secretary to Govt."

40. The effect of the above GO is, on and from 1-6-1993 the Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 came to be rescinded. Both the learned Single Judge and the Division Bench of the High Court under the impugned judgment have upheld the validity of GOMs No. 44 dated 3-3-1993. In the light of the above discussion the correctness of the following contentions may be examined:

1.Whether the Tamil Nadu Liquor (Retail Vending) Rules, 1989 (for short Retail Vending Rules) and Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 (for short Bar Rules) form an integral scheme?

2. Whether the appellants can claim the benefit of the doctrine of legitimate exception?

3. Whether under the impugned GO by rescinding of the Bar Rules-

(a) the State has not acted fairly;

(b) violation of Article 14, the action being arbitrary?

4. Whether the appellants could claim the benefit of Section 8 of the Tamil Nadu General Clauses Act? Question No. 1: Whether the Tamil Nadu Liquor (Retail Vending) Rules, 1989 (for short Retail Vending Rules) and Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 (for short Bar Rules) form an integral scheme?

41. In view of what is stated above, it is clear that privilege of retail vending could only be under licence.

Such a licence is obtained after a successful bid. The mere success in the bid does not ensure the privilege. Still, as seen above, even after the confirmation of sale the auction- purchaser will have to apply in Form No. VI to the licensing authority for the grant of licence along with the requisite fee. It is only after the licensing authority is satisfied as to the suitability of the auction procedure for the grant of licence, such a licence is granted. The period of