Orissa High Court

M/S. Galaxy Bar And vs State Of Odisha And Others ..... ... on 3 March, 2025

Author: Arindam Sinha

Bench: Arindam Sinha, M.S. Sahoo

               IN THE HIGH COURT OF ORISSA AT CUTTACK
                                    W.P.(C) No.12490 of 2024
                              (IA Nos.16823 and 17010 of 2024)
              M/s. Galaxy Bar and                                .....                                   Petitioner
              Restaurant, Nayagarh

                                                    versus-

              State of Odisha and others                          .....                       Opposite Parties

       Advocates appeared in this case:
               For petitioner                        : Mr. R.P. Kar, Senior Advocate
                                                       Mr. A.N. Ray, Advocate

               For opposite parties                  : Mr. Bimbisara Das, AGA
                                                      (for O.P. nos.1 to 5)

                                                       Mr. A.K. Patra, Advocate
                                                       Mr. B. Sharangi, Advocate
                                                       (for intervener-applicant (O.P. no.6)

                                                        Mr. B.P. Das, Advocate
                                                        (for intervener-applicant (O.P. no.7)

                                                 CORAM:
               THE HON'BLE MR. JUSTICE ARINDAM SINHA,
                                   ACTING CHIEF JUSTICE
                                                      AND
                    THE HON'BLE MR. JUSTICE M.S. SAHOO
                                                     JUDGMENT

------------------------------------------------------------------------------------------------------- Dates of hearing: 29th October, 2024, 10th December, 2024, 6th January, 2025 and 3rd March, 2025 Date of judgment: 3rd March, 2025

-------------------------------------------------------------------------------------------------------

W.P.(C) no.12490 of 2024

ARINDAM SINHA, ACJ.

1. The writ petition was moved before us on 29th October, 2024.

Mr. Kar, learned senior advocate appearing on behalf of petitioner

had submitted, impugned is order dated 29th April, 2024 made by

the Principal Secretary to Government, Excise Department rejecting

his client's application for issue of licence to operate 'ON' shop in

his restaurant at Nayagarh town. This is his client's third writ

petition.

2. Drawing attention to page-6 of impugned order he submitted,

it is bereft of reason. Alluding to State policy, apparently in

contradiction with rule 51 in Odisha Excise Rules, 2017, does not

qualify as a reason. He seeks interference.

3. We had recorded our prima facie appreciation in order dated

29th October, 2024, made upon the petition moved. Paragraphs-4 to

6 from said order are reproduced below.

"4. On perusal of impugned order we appreciate three contentions made therein. First is, no applicant for liquor licence has a vested right to have his application considered. We disregard this contention because we find that petitioner's application was considered.

5. Second contention is, application of petitioner is without lodging category, which violates clause of the excise policy

W.P.(C) no.12490 of 2024

on 'ON' shop licence being granted for only star hotels and other hotels having minimum number of rooms to be decided by the Excise Department. A policy mandate requiring only hotels as can apply for 'ON' shop licence, barring standalone restaurants, is a contention that needs demonstration as on existing policy, in line with the rules.

6. The third contention is one which this Court takes exception to. The authority being of considered opinion that earlier set aside decision of the Government was just and proper is not in order. The contention is rejected. The rejection is because earlier orders passed by this Court were not made subject matter of challenge by the authority."

4. On 10th December, 2024 Mr. Patra, learned advocate

appearing on behalf of applicant-intervener had moved the

application. He has represented his client in the hearing of the writ

petition since then. His client holds licence to run an 'OFF' shop.

The application is allowed to add applicant as opposite party no.6 in

the writ petition. Mr. Das, learned advocate appears on behalf of

another applicant-intervener. He submits, his client is the bus owner

association. They object to licence being granted to petitioner for

running 'ON' shop. His client is also added as opposite party no.7.

Petitioner has liberty to make the amendments to cause title, to be

W.P.(C) no.12490 of 2024

countersigned by Court Master. Consolidated cause title be filed

and circulated. The applications are disposed of.

5. We reproduce below paragraphs-2 and 3 from our later order

dated 10th December, 2024.

"2. Mr. Dash, learned advocate, Additional Government Advocate appears on behalf of State and submits, he is ready with answer in respect of paragraph-5 in our earlier order dated 29th October, 2024. He submits, the answer was given by coordinate Bench on judgment dated 27th March, 2024 in a batch writ petitions, lead case being W.P.(C) No.19873 of 2023 (The Lotus Restaurant, Ganjam v. State of Odisha). He relies on paragraph 8.13, reproduced below.

"In the wake of aforesaid observations and having regard to the fact that the restriction contained in Clause 4.2.3(I) of the Excise Policy, 2023-24 being in the larger public interest, the decision taken by the State Government cannot be faulted with. In such view of the matter, this Court dispels the contention advanced by Sri Prafulla Kumar Rath, learned Senior Counsel."

3. Challenge in the writ petition is that impugned policy of restricting grant of licence in respect of ON shops to only hotels with lodging, excluding restaurants is against rule 51 in Odisha Excise Rules, 2017. State has adjournment to

W.P.(C) no.12490 of 2024

demonstrate from Lotus Restaurant (supra), the challenge was dealt with and answered by coordinate Bench."

6. Today, Mr. Bimbisara Dash, learned advocate, Additional

Government Advocate appears on behalf of State and reiterates

submissions earlier made, recorded and dealt with. With reference

to our aforesaid queries, contention on behalf of State stood

recorded in paragraph-2 of order dated 6th January, 2025.

"2. Drawing attention to the decision in Lotus Restaurant he submits, answer to the query is given in the judgment itself by paragraph 8.7. Said paragraph refers to earlier judgment passed by same Bench vide order dated 4th March, 2024 in W.P.(C) no. 4152 of 2024 (Laxmipriya Kar v. State of Odisha and others). He hands up said order dated 4th March, 2024 (supra), to reiterate, the query was thus answered."

We rejected the contention as would appear from paragraph-4 of

said order dated 6th January 2025, also reproduced below.

"4. We have perused said order dated 4th March, 2024 (supra). We do not find there was reference to the query, on whether the clause in the policy is in conflict with rule 51.

As such, we do not have answer to our query made by paragraph-3 reproduced above. We make it clear that State has to demonstrate point taken and answered by a view in a

W.P.(C) no.12490 of 2024

judgment or order, to rely upon it as a precedent. Otherwise we will proceed to adjudicate. At this stage Mr. Dash hands up his instruction dated 19th December, 2024. The instructions seek to justify formulation of the policy but does not answer the query."

7. Rule 51 does not make any distinction between hotels having

accommodation and restaurants, in State considering grant of

licence to run 'ON' shop. It provides for applications being

submitted in prescribed form, only by those who are having hotels

or restaurants. The distinction is clear inasmuch as, applicants are

not described as those who are having hotel and restaurant. In the

circumstances, the imposition upon distinctive feature requiring an

'ON' shop licence applicant to also provide for accommodation

appears to be without any basis.

8. Moving on to impugned rejection order dated 29 th April

2024, we have already noted that only the second ground of

rejection is one which merits adjudication. Reason given is that

petitioner's restaurant attracts bar of clauses (b) and (c) in rule

26(1) being near a place of worship and also an educational

institution of the deaf and dumb. Here we must point out that

petitioner had also contended on discrimination because there is an

W.P.(C) no.12490 of 2024

'ON' shop functioning near his proposed shop, granted relaxation

under rule 26 of Odisha Excise Rules, 2017. We must clarify, we

have noted as fact vicinity of the proposed shop near a place of

worship and educational institution on perusal of inquiry report

dated 4th June 2022 submitted by the Inspector of Excise, Nayagarh,

countersigned by the Superintendent of Excise. The report says the

proposed shop is 1000 meters from Jagannath Temple and 330

meters away from Seba Ashram School for blinds, deaf, and dumb

and Sudhar short stay home for women Training Institute

(functioning in one premises). The report also says that such

vicinity will in no way hurt religious sentiments of the people or

have any adverse impact on the institution. It goes on to say that the

objections are motivated and if relied upon will lead to loss of

revenue.

9. Proviso under sub-rule (1) in rule 26 is reproduced below.

"Provided that the restriction on the minimum distance as mentioned under clauses (b) and (c) may be relaxed by the State Government in special circumstances."

When there is aforesaid report, the State deciding to not exercise

discretion also appears to be arbitrary. The State has policy, based

W.P.(C) no.12490 of 2024

on the statute and rules, to balance its requirement of revenue with

the effect on society on allowing sale of liquor. Materials on record

before us do not provide a situation where a reasonable or prudent

person would come to the conclusion of deciding not to relax the

conditions in clauses (b) and (c) per the empowering proviso.

10. Added opposite party no.6 is an objector. Mr. Patra on his

behalf has relied on clauses (b) and (c) under rule 26(1) as basis for

his client's objection. It is a fact also that said opposite party runs

an 'OFF' shop in vicinity or the locality, in which his customers