The single Bench of Justice Moushumi Bhattacharya of the Calcutta High Court in the case of M/s. Down Town Temptation Private Limited and Another Vs Additional General Secretary, Finance Department, Government of W.B. and Others held that the State cannot add to the legislative object or curtail the right of an entity where the Act and the Rules do not provide the basis for such curtailment.
The State is also under an obligation to preserve equality and fairness as mandated in the Constitution and is hence, precluded from applying different standards to different entities on the pretext of ensuring a crime-free environment in the establishments where liquor is sold and consumed.
Brief Facts:
The factual matrix of the case was that the Petitioner applied for the renewal of the excise license of three restaurants. However, the objection was received from the police. Thereafter, the Petitioner approached the court by way of a writ petition which was disposed of by a direction on the Excise Commissioner to dispose of the appeal under the provisions of The Bengal Excise Act, 1909, within a certain time frame.
The grounds for rejecting the renewal of the license were consistent violations of the Immoral Traffic (Prevention) Act of 1956 and the Indian Penal Code in the relevant establishments and the involvement of one Jagjit Singh in the business of the three establishments and the ongoing legal proceedings against him.
The present Petition was filed aggrieved by three orders in the matter of rejection of the renewal of Excise Licenses.
Contentions of the Petitioners:
It was contended that the pendency of judicial proceedings cannot be the basis of a rejection for renewal of an Excise License. It was further contended that those who are on a similar footing to that of the Petitioners can’t be given preferential treatment.
Contentions of the State:
It was contended that the immoral activities taking place in the Petitioners' three restaurants, is a situation where the license renewal should be refused because it was a potential threat to law and order. Further, emphasis was placed on the activities of Jagjit Singh forcing girls to do prostitution and it was argued that the corporate veil should be lifted to ascertain the involvement of Jagjit Singh in the affairs of the establishments.
Observations of the Court:
It was observed that non-renewal of Excise Licenses must be confined to and governed by The Bengal Excise Act, 1909 (hereinafter referred to as the “1909 Act”) and the West Bengal Excise (Selection of New Sites and Grant of License for Retail Sale of Liquor and Certain Other Intoxicants) Rules, 2003 (hereinafter referred to as the “2003 Rules”). The 1909 Act deals exhaustively with the conditions for refusing to continue the license of an existing holder. Section 85 of the 1909 Act deals with a vast range of situations warranting restrictions concerning the provisions of the Code of Criminal Procedure, 1973. Section 74 of the Act reinforces the power of the Collector and Excise Officers to investigate any offence punishable under the Cr. P.C. in the same manner and amplitude as may be exercised by a Police Officer. Thus, the non-renewal must only be for the conditions/circumstances provided under the Act and the Rules.
It was noted that the concerned authorities have been conferred the power to take effective measures against illegal activities which may be carried on by a licensee or committed within the licensed premises. The defence of immoral activities, even if based on evidence, can only be used for non-renewal of a license if the defence forms part of the relevant sections of the 1909 Act and the 2003 Rules. Rule 14(2) read with the proviso of the 2003 Rules which has been set out above, does not contain any restriction on the ground either of commission of immoral activities or pendency of charges against an existing license holder. Under the Rules, the license holder (a) must be convicted by a criminal court and (b) convicted for the commission of a non-bailable offence. The State has not said that Jagjit Singh satisfied either of these two conditions.
It was opined by the Bench that in India a presumption is drawn when it comes to the sale of liquor and drunkenness and illegal acts. Public perception has been constructed in a way that people associate liquor with immoral acts like prostitution. The rationale behind such a mental construct is that drinking would lead to hostile behaviour and risk to public safety.
The Court even though found the contentions of the Respondent compelling, expounded that grant of liquor license is more of a privilege than a right. For depriving a person of his valuable legal right, express provision must be present in the Act/Rule.
Further, the High Court propounded that based on the reports of the police, renewal of the license cannot be refused. The State must act within the legislative framework of a statute in matters related to the grant of licenses, more so when specific exceptions and prohibitions are provided for.
The decision of the Court:
The Hon’ble Calcutta High Court quashed the impugned orders in the matter of rejection of the renewal of Excise Licenses and directed the Respondents to revisit the applications for renewal of licenses of the Petitioners for the three establishments.
Case Title: M/s. Down Town Temptation Private Limited and Another Vs Additional General Secretary, Finance Department, Government of W.B. and Others
Coram: Hon’ble Justice Moushumi Bhattacharya
Case No: W.P.A 17757 of 2022
Advocate of the Petitioner: Mr. Soumya Mazumder, Adv. Mr. Arindam Jana, Adv. Mr. Saptarshi Banerjee, Adv. Mr. Somosh Ghosh, Adv.
Advocate for the Respondents: Mr. Anirban Ray, Ld. G.P. Mr. Raja Saha, Adv. Mr. Debashis Ghosh, Adv. Mr. Amit Kr Ghosh, Adv. Mr. Varun Kothari, Adv
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