Shiv Prasad Bhagat vs State Of Odisha & Ors
2023 Latest Caselaw 9194 Ori

                    ORISSA HIGH COURT: CUTTACK

AFR                      W.P(C) NO. 7681 OF 2023

        In the matter of an application under Articles 226 and
        227 of the Constitution of India.
                              ---------------

Shiv Prasad Bhagat ..... Petitioner

-Versus-

State of Odisha & Ors. ..... Opp. Parties

For petitioner : Mr. P.K. Rath, Senior Advocate along with M/s. S. Rath, P.

Nayak, S. Mohapatra, A. Behera, S.K. Behera, S. Das and P.K.

Basantia, Advocates

For opp. parties : Mr. P.P. Mohanty, Addl. Govt. Advocate

P R E S E N T:

THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR JUSTICE MURAHARI SRI RAMAN

Date of hearing: 10.08.2023 :: Date of judgment: 14.08.2023

DR. B.R. SARANGI,J. The petitioner, by means of this writ

petition, seeks to quash the order dated 01.10.2022

under Annexure-1, by which the Government of Odisha

in Excise Department has rejected the representation of

the petitioner despite recommendation made by the // 2 //

Commissioner of Excise for re-opening of IMFL "ON"

shop in its existing site, and further to quash the orders

dated 27.06.2018 and 01.01.2019 under Annexure-2 &

Annexure-3 respectively passed by the Government, as

well as the order dated 25.01.2019 under Annexure-4

passed by the Collector, Angul rejecting the

representation of the petitioner regarding relocation of

the shop, and further to issue direction to opposite

party no.1/Government to grant permit for reopening of

the "ON" shop in its original location, i.e., Mouza-Nisha

of Nisha Gram Panchayat in the district of Angul within

a stipulated period.

2. The factual matrix of the case, in brief, is

that the petitioner is the licensee in respect of the IMFL

"ON" (Restaurant) shop at Hotel Modern, Nisha, Angul

situated over Plot No.1359/1850 and Khata

No.205/420 of Mouza-Nisha, PS-Nisha in the district of

Angul. But his "ON" shop was closed pursuant to

decision of the Government in compliance of the

judgment dated 15.12.2016 of the apex Court in State // 3 //

of Tamilnadu v. K. Balu, (2017) 2 SCC 281, the

operative part of which was to the following effect:-

"29. We, accordingly, hereby direct and order as follows:

29.1. All States and Union Territories shall forthwith cease and desist from granting licenses for the sale of liquor along National and State highways.;

29.2. The prohibition contained in Para 29.1 above shall extend to and include stretches of such highways which fall within the limits of a municipal corporation, city, town or local authority;

29.3. The existing licenses which have already been renewed prior to the date of this order shall continue until the term of the license expires but no later than 1-4- 2017;

29.4. All signage and advertisements of the availability of liquor shall be prohibited and existing ones removed forthwith both n National and State highways;

29.5 No shop for the sale of liquor shall be

(i) visible from a national or State highways;(ii) directly accessible from a national or State highways; and (iii) situated within a distance of 500 m of the outer edge of the national or State highway or of a service lane along the highway.

29.6 All States and Union Territories are mandated to strictly enforce the above directions. The Chief Secretaries and Directors General of Police shall within one month chalk out a plan for enforcement in consultation with the State Revenue and Home Departments. Responsibility shall be assigned, inter alia, to District Collector and Superintendents of police and other competent authorities. Compliance shall be strictly monitored by calling for fortnightly reports on action taken.

// 4 //

29.7 These directions issue under Article 142 of the Constitution."

In view of aforesaid judgment of the apex Court, all the

States and the Union Territories were to forthwith cease

and desist from granting licenses for the sale of liquor

along National and State highways and such

prohibition was to extend to and include stretches of

such highways, which fall within the limits of a

municipal corporation, city, town or local authority.

Therefore, giving effect to the said judgment, the liquor

shop in question was closed with effect from

01.04.2017.

2.1 The aforesaid judgment of the apex Court

was reviewed from time to time. The apex Court, vide

order dated 11.07.2017 passed in SLP (C) No.10243 of

2017 (Arrive Safe Society of Chandigarh v. The

Union Territory of Chandigarh), reported in (2017) 7

SCR 369, granted some relaxations. Paragraph-7 of the

said order reads as under:-

"7.The purpose of the directions contained in the order dated 15 December 2016 is to deal with the sale of liquor along and in proximity of highways properly understood which provide connectivity between cities, towns and villages. The order does not // 5 //

prohibit licensed establishments within municipal areas. This clarification shall govern other municipal areas as well. We have considered it appropriate to issue this clarification to set at rest any ambiguity and to obviate repeated recourse to IAs, before the Court."

Again the apex Court, vide order dated 23.02.2018

passed in Civil Appeal Nos.12164-12166 of 2016 (The

State of Tamil Nadu Rep. By Sec. and Ors. v. K.

Balu & Anr.), reported in (2018) 1 SCR 665, clarified

the matter. Paragraph-8 of the said order is quoted

below:

"8. Having regard to these directions, we are of the view that the state governments would not be precluded from determining whether the principle which has been laid down by this Court in the order dated 11 July 2017 in Arrive Safe Society (supra) should also apply to areas covered by local self governing bodies and statutory development authorities. We are inclined to allow the state governments to make this determination since it is a question of fact as to whether an area covered by a local self-governing body is proximate to a municipal agglomeration or is sufficiently developed as to warrant the application of the same principle. In deciding as to whether the principle which has been set down in the order dated 11 July 2017 should be extended to a local self-governing body (or statutory development authority) the state governments would take recourse to all relevant circumstances including the nature and extent of development in the area and the object underlying the direction prohibiting the sale of liquor on national and the state highways. The use of the expression 'municipal areas' in the order dated 11 July 2017 does not prevent the // 6 //

state governments from making that determination and from taking appropriate decisions consistent with the object of the orders passed by this Court. We leave it open to individual licensees to submit their representations to the competent authorities in the state governments if they are so advised upon which appropriate decisions may be taken by the state governments. We have issued this general direction to obviate both litigation before the High Courts and repeated recourse to applications to this Court.

2.2 By virtue of clarification issued by the apex

Court, the relaxation as is applicable to the municipal

area is also applicable to the area coming within local

self-governing bodies and statutory development

authority areas subject to conditions; (i) whether the

area covered by a local self government body is

proximate to the municipal agglomeration; or (ii)

sufficiently developed as to warrant application of the

same principle. Further, the apex Court, vide order

dated 23.02.2018 in Civil Appeal Nos.12164-12166 of

2016, specifically clarified that wherever the liquor

shops are existing either in the close proximity to the

municipal agglomeration or location sufficiently

developed, the shop qualifies to be permitted to operate.

The location in question is coming in the second

category, i.e., the area, where the 'ON' shop was in // 7 //

operation, is sufficiently developed, though it is located

within the jurisdiction of local self-governing body as

well as statutory government authority, i.e., Talcher-

Angul-Meramundali Development Authority (TAMDA).

So far as TAMDA is concerned, the location is coming

within the statutory authority. The location of the 'ON'

shop qualified to be within sufficiently developed area,

because it is adjacent to M/s. Jindal Steel & Power

Limited (JSPL) and other industrial units in and around

the locations. Therefore, the petitioner submitted a

representation to the Government on 15.03.2018 to

permit reopening of the 'ON' shop, which was closed

since 01.04.2017, and the Government, vide letter

dated 11.05.2018, forwarded the said representation to

the Collector, Angul for necessary enquiry.

2.3 Pursuant to letter dated 11.05.2018 issued

by the Government, the Collector, Angul submitted a

report on 31.05.2018 clearly stating therein that the

location in question is coming within the area, which

has been developed a lot with the establishment of JSPL

and other giant factories. Taking into consideration the // 8 //

scenario, the Government prepared a guideline dated

27.06.2018 fixing distance factor of 3 KMs from

municipal area so as to warrant reopening and re-

location of the shop. The said guideline is not applicable

to the petitioner's shop.

2.4 The apex Court, vide order dated 23.02.2018,

has also provided two pre-requisites for the purpose of

operation of the licensed establishment within local self-

governing body area subject to the location is either in

close proximity to municipal corporation area or the

same is sufficiently developed. The petitioner qualifies

the second criteria. Therefore, it is incumbent upon the

Government to permit reopening of the shop in

compliance of the orders passed by the apex Court. The

petitioner's shop is existing within the limit of local self-

governing body area as well as statutory development

authority area, namely, "TAMDA". Therefore, the

Government is required to consider the application for

reopening of the "ON" shop of the petitioner in its

original location where it was functioning before its

closure.

// 9 //

2.5 Challenging the inaction of the Government,

earlier the petitioner had approached this Court by

filing W.P.(C) No.12053 of 2018, which was disposed of

vide order dated 11.12.2018 with a direction to the

Principal Secretary to the Government of Odisha,

Department of Excise, to decide the representation of

the petitioner by a speaking order in accordance with

law within a period of four weeks from the date of

receipt of the order with an observation that it would be

open to the petitioner to challenge that decision by way

of appropriate proceedings. The said order was also

communicated to the Government and thereafter, the

Government passed the order dated 01.01.2019 under

Annexure-3 directing the Collector, Angul to consider

the case limiting to 3 KMs criteria. Such limitations

provided by the Government under Annexures-2 & 3

cannot be sustained in the eye of law.

2.6 Since there was a wrong quoting of prayer in

W.P.(C) No.12053 of 2018, I.A. No.18180 of 2018 was

filed for modification of the order dated 11.12.2018,

which was also allowed vide order dated 08.01.2019. As // 10 //

the petitioner's "ON" shop was lying closed since

01.04.2017, he sustained heavy loss. In the meantime,

the Government passed the order dated 01.10.2022,

which is contrary to the ratio decided by the apex

Court. But the petitioner, challenging the orders passed

under Annexures-2, 3 and 4, approached this Court by

filing W.P.(C) No.1254 of 2019 and during pendency of

the said writ petition, the Commissioner of Excise,

Odisha made recommendation to the Government for

re-opening of the "ON" shop in its previous location,

which is in terms of the orders dated 11.07.2017 and

23.02.2018 passed by the apex Court. The

Commissioner of Excise, Odisha further mentioned that

the impugned notification dated 27.06.2018 under

Annexure-2 is not applicable in respect of petitioner's

IMFL "ON" shop.

2.7 The petitioner brought the aforesaid

recommendation dated 21.05.2021 to the notice of this

Court by filing an Interlocutory Application. This Court,

vide order dated 07.07.2022, disposed of the said I.A.

with a direction to the competent authority/ // 11 //

Government to take an appropriate decision on the

recommendation made by the Commissioner of Excise,

Odisha. The said order was communicated to the

Government and in compliance thereof, the Government

passed the order dated 01.10.2022 under Annexure-1

rejecting the claim of the petitioner for reopening of his

"ON" shop. Hence, this writ petition.

3. Mr. P.K. Rath, learned Senior Counsel along

with Mr. A. Behera, learned counsel appearing for the

petitioner vehemently contended that the rejection of

the claim of the petitioner for renewal of his "ON" shop

without giving any opportunity of hearing cannot be

sustained in the eye of law. It is further contended that

if the shop is permitted to be opened, it is in compliance

of the order passed by the apex Court. While rejecting

the claim of the petitioner, vide order dated 01.10.2022

under Annexure-1, the authority has not applied its

mind in proper perspective. Therefore, the said order

cannot be sustained in the eye of law. It is further

contended that on careful reading of the direction of the

apex Court, it appears that the local self government // 12 //

body areas are divided into two parts, i.e, (i) the

proximity of an area covered by self-same governing

body to municipal agglomeration and (ii) area covered

by the local self governing body is sufficiently developed

as to application of the same principle. It is further

contended that the Government in its wisdom has

issued a set of executive instructions dated 27.06.2018

on the question of area covered under local self

governing body which are in proximity with the

municipal corporation and distance factor is provided to

be 3 KMs. From the outer limit of the municipal

corporation/municipality, provided the area is

sufficiently developed as urban area. Therefore, the

rejection of the claim of the petitioner has been done in

contravention of the directions issued by the apex Court

and clarified from time to time. Thereby, the orders so

passed by the Government in Annexures-1, 2 & 3 and

the Collector, Angul in Annexure-4 cannot be sustained

in the eye of law and the same are liable to be quashed.

4. Mr. P.P. Mohanty, learned Addl. Government

Advocate appearing for the State-opposite parties // 13 //

vehemently contended that the State Government,

pursuant to the order dated 23.02.2018 passed by the

apex Court in Civil Appeal Nos.12164-12166/2016,

which relates to distance factor for operation of existing

liquor shops along the highways, issued the orders

dated 27.06.2018 and 01.01.2019 clarifying the criteria

to be followed for the purpose. It is further contended

that in compliance of the orders of the apex Court, the

State Government took a consensus decision to allow

the retail liquor outlets to operate along the highways

within 3 KMs from the outer limit of the municipal

corporation/municipalities provided the area is

sufficiently developed as urban areas. Therefore, the

State Government directed the Collectors to constitute

one inspection committee for field verification and

basing on the recommendation of the said committee,

the Collectors of the districts shall dispose of the

representations filed by the licensees following the

parameters as enumerated in Excise Department order

dated 27.06.2018. Thereby, it is contended that no

illegality or irregularity has been committed by the State

Government in rejecting the claim of the petitioner.

// 14 //

Therefore, the writ petition at the instance of the

petitioner should be quashed.

5. This Court heard Mr. P.K. Rath, learned

Senior Counsel along with Mr. A. Behera, learned

counsel appearing for the petitioner and Mr. P.P.

Mohanty, learned Addl. Government Advocate

appearing for the State-opposite parties in hybrid

mode. Pleadings have been exchanged between the

parties and with the consent of learned counsel for the

parties, the writ petition is being disposed of finally at

the stage of admission.

6. On the basis of the pleadings available on

record as well as the arguments advanced by learned

counsel for the parties, there is no dispute that the

petitioner was granted license to open IMFL "ON" shop

adjacent to the National Highway, but because of the

judgment of the apex Court, as mentioned above, the

"ON" shop of the petitioner was closed on 01.04.2017.

Subsequently, the apex Court clarified the said

judgment, vide order dated 11.07.2017, and thereafter,

on 23.02.2018, granted relaxation for opening of the // 15 //

"ON" shop. In response to the same, the petitioner

requested the Government to grant permission to open

his shop taking into consideration the relaxation

granted by the apex Court. But, without considering the

same in proper perspective, it was contended that to

implement the spirit and objectives of dictum of the

apex Court, the Government fixed the restrictive

parameters to 3 KMs from the outer limit of

municipality/municipal corporation, vide its letter

dated 27.06.2018, as a policy decision for the State of

Odisha. Even if relaxation was granted, on the basis of

the order of the Collector dated 25.01.2019, the

proposal of the Commissioner of Excise, Odisha cannot

be sustained in the eye of law, as the same is not in

accordance with the Government order issued in this

regard. Needless to say, the direction given by the apex

Court was that the local self governing body areas are

divided into two parts, i.e, (i) the proximity of an area

covered by self-same governing body to municipal

agglomeration and (ii) area covered by the local self

governing body is sufficiently developed as to

application of the same principle. Thereby, taking // 16 //

advantage of such division of areas even if the petitioner

applies for license that cannot be given as it is a policy

decision of the Government and the same is in

adherence to the orders passed by the apex Court.

7. Government has to run the Government and

for that purpose it has to take policy decisions. The

policy decisions are entirely within the domain of the

Government. Necessarily the Government shall exercise

its own discretion in this regard. But, it is a

fundamental rule for the exercise of the discretionary

power that discretion must brought to bear on every

case-each one must be considered on its own merits

and decided as the public interest requires at the time.

In enforcing this rule the courts are underlining the

difference between judicial and administrative

processes. The legal rights of litigants are decided

according to legal rules and precedents so that like

cases are treated alike.

8. In State of Gujarat v. Arvind Kumar

Tewari, (2012) 9 SCC 545, the apex Court held that // 17 //

policy decision cannot ordinarily be subject-matter of

judicial review.

9. In Chief Constable of the North Wales

Police v. Evans, (1982) 2 All E.R. 141 (H.L), it is held

that judicial review is concerned, not with the decision,

but with the decision-making process. Unless that

restriction on the power of the court is observed, the

court will under the guise of preventing the abuse of

power, be itself guilty of usurping power.

10. In Union of India v. J.D. Suryavanshi,

(2011) 13 SCC 167, the apex Court held that courts

should not interfere in matters of policy or in the day-

to-day functioning of any departments of Government

or statutory bodies. Even within the executive, the need

for separation of roles has been voiced.

11. In Raj Shikshan Prasarak Mandal v. State

of Maharashtra, (2001) 10 SCC 75, the apex Court

held that so long as the Government decision is not

actuated with any malice or is not the outcome of an

arbitrary or whimsical act, the same should not be

interfered with by a court of law under Article 226.

// 18 //

12. In Netai Bag v. State of West Bengal,

(2000) 8 SCC 262, the apex Court held that the

Government is entitled to make pragmatic adjustments

and policy decision which may become necessary or

called for under the prevalent peculiar circumstances.

The court cannot strike down a policy decision merely

because it feels that another decision would have been

fairer or wiser or more scientific or logical.

13 In Directorate of Film Festivals v. Gaurav

Ashwin Jain, (2007) 4 SCC 737, the apex Court held

as follows:

"The scope of judicial review of governmental policy is now well defined. Courts do not and cannot act as appellate authorities examining the correctness, suitability and appropriateness of a policy, nor are courts advisors to the executive on matters of policy which the executive is entitled to formulate. The scope of judicial review when examining a policy of the Government is to check whether it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution, or opposed to any statutory provision or manifestly arbitrary. Courts cannot interfere with policy either on the ground that it is erroneous or on the ground that a better, fairer or wiser alternative is available. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review."

// 19 //

14. In M.P. Gangadharan & Anr. Vs. State of

Kerala & Ors., (2006) 6 SCC 162, the Supreme Court

considered a question as to whether a Family Court can

be shifted from one place to another within the area of

its jurisdiction. The Court while discussing the scope of

judicial review in such administrative functions,

observed that the constitutional requirement for judging

the question of reasonableness and fairness on the part

of the statutory authority must be considered having

regard to the factual matrix obtaining in each case. It

cannot be put in a straight-jacket formula. It must be

considered keeping in view, the doctrine of flexibility.

Before an action is struck down, the court must be

satisfied that a case has been made out for exercise of

power of judicial review. Referring to the recent

development of law, the Court further observed that 'We

are not unmindful of the development of the law that

from the doctrine of Wednesbury Unreasonableness, the

court is leaning towards the doctrine of proportionality.

But in a case of this nature, the doctrine of

proportionality must also be applied having regard to

the purport and object for which the Act was enacted'.

// 20 //

15. In Maharashtra Land Development

Corporation & Ors. Vs. State of Maharashtra &

Anr., (2011) 15 SCC 616, the Supreme Court observed

that the Wednesbury principle of reasonableness has

given way to the doctrine of proportionality. As per the

Wednesbury principles, administrative action can be

subject to judicial review on the grounds of illegality,

irrationality or procedural impropriety. The principle of

proportionality envisages that a public authority ought

to maintain a sense of proportion between particular

goals and the means employed to achieve those goals,

so that administrative action impinges on the individual

rights to the minimum extent to preserve public

interest. It was held by the Court that administrative

action ought to bear a reasonable relationship to the

general purpose for which the power has been

conferred. Any administrative authority while exercising

a discretionary power will have to necessarily establish

that its decision is balanced and in proportion to the

object of the power conferred. The test of proportionality

is concerned with the way in which the decision maker // 21 //

has ordered his priorities, i.e. the attribution of relative

importance to the factors in the case. It is not so much

the correctness of the decision that is called into

question, but the method to reach the same. If an

administrative action is contrary to law, improper,

irrational or otherwise unreasonable, a court competent

to do so can interfere with the same while exercising its

power of judicial review. It was further held that, the

principle of proportionality therefore implies that the

Court has to necessarily go into the advantages and

disadvantages of any administrative action called into

question. Unless the impugned administrative action is

advantageous and in public interest such an action

cannot be upheld. At the core of this principle is the

scrutiny of the administrative action to examine

whether the power conferred is exercised in proportion

to the purpose for which it has been conferred.

Similar view has also been taken by this

Court in Sona Spun Pipe Industries Ltd. V. State of

Odisha, MSME Department & Two Ors., 2020 (II) CLR // 22 //

902 : 2020 (III) ILR-CUT 364, where one of us (Dr. B.R.

Sarangi, J.) was a Member.

16. Taking into consideration the aforesaid facts

and circumstances of the case, if the Government, as a

matter of principle, has taken a decision by framing a

policy in conformity with the direction given by the apex

Court, which has been revised from time to time, the

claim made by the petitioner, that his shop has to be

opened at the place where it was granted, even though

it was closed on 01.04.2017, is not tenable. The policy

decision of the Government, which is in adherence to

the direction of the apex Court, is to allow the retail

liquor outlet to operate the highways within 3 KMs

outer limit of municipality/municipal corporation

provided the areas is sufficiently developed as urban

areas. Therefore, it was directed to consider the

representation of the petitioner within the parameters of

the policy decision as well as the direction of the apex

Court. Applying the same, if the representation filed by

the petitioner has been rejected, this Court is not

inclined to interfere with the same.

// 23 //

17. In the result, therefore, the writ petition

merits no consideration and the same is dismissed.

But, however, under the circumstances of the case,

there shall be no order as to costs.

                                                              (DR. B.R. SARANGI)
                                                                   JUDGE


            M.S. RAMAN, J.                  I agree.


                                                                (M.S. RAMAN)
                                                                    JUDGE




                           Orissa High Court, Cuttack
                           The 14th August, 2023, Alok




Signature Not Verified
Digitally Signed
Signed by: ALOK RANJAN SETHY
Designation: Secretary
Reason: Authentication
Location: Orissa High Court
Date: 14-Aug-2023 17:28:10