ORDER
Ramalingam, J.
1. Under the Tamil Nadu Liquor (Licence and Permit) Rules, 1981, the petitioner was granted a licence in Form No. FL.l for the retail sale of bottled Indian made foreign spirits. The period of the current licence was to expire on 31-3-1989. In pursuance of a notice issued to him, the petitioner paid a sum of Rs. 20,600 and applied for renewal of the licence for the year 1989-90.
2. The Government of Tamil Nadu made the Tamil Nadu Liquor (Retail Vending) Rules, 1989, and published the same in G.O.Ms.No.596, Prohibition and Excise, dated 15-4-1989. Rule 33 of the 1989 Rules states that the provisions of the Tamil Nadu Liquor (Licence and Permit) Rules, 1981 in so far as they relate to the retail vending of Indian-made foreign liquor shall be repealed.
3. The effect is that on and after June 1989, the persons like the petitioners who had been granted a retail licence in Form FL1, under the 1981 Rules would become disentitled to continue to run their retail shops. Hence the petitioner and others similarly placed have filed these writ petitions challenging the validity of the Tamil Nadu Liquor (Retail and Vending) Rules, 1989, hereinafter called the 11989 rules’.
4. The first contention of the petitioner is regarding the validity of the Proviso to Rule 3 of 1989 Rules. Rule 3(1) states that the privilege for retail vending in liquor shall be granted to any person by auction in accordance with the provisions of the said Rule. The Proviso to Rule 3(1) reads as follows:
Rule 3(1) …Provided that, where the Commissioner considers it necessary, he may direct the licensing authority to grant, on payment of such sum or fee or both as may be fixed by the Commissioner, the privilege in relation to not exceeding forty per centum of the maximum number of retail shops permitted by the Government and distributed as far as possible among the various districts by nomination to the Tamil Nadu State Marketing Corporation or the Tamil Nadu Civil Supplies Corporation or Co-operative Societies.
5. In attacking the validity of this Proviso, the petitioner contends that under Section 17(e)(1) of the Tamil Nadu Prohibition Act,1937, the State Government may grant to any person the exclusive privilege of (a) manufacturing Indian-made foreign spirits, or (b) selling by retail India made foreign spirits, within any local area. He refers to Section 17(C)(1-A) and states that under the said Sub-section, the Tamil Nadu State Marketing Corporation Limited, may be granted exclusive privilege of supplying, by wholesale, Indian made foreign spirits, for the whole of the State Tamil Nadu, and no other person.
6. An argument is developed that the Tamil Nadu State Marketing Corporation Limited, cannot be given the privilege of sale of Indian made foreign spirits in retail. This argument is wholly misconceived. Merely because Section 17(C)(1-A) confers power on the Government to grant exclusive privilege for wholesale vending of IMFL in favour of Tamil Nadu State Marketing Corporation Limited, it cannot be considered that the State Government cannot give the privilege of retail vending of Indian made foreign spirits to the Tamil Nadu State Marketing Corporation Limited. There is no prohibition or bar under Tamil Nadu Prohibition Act, 1937, disabling the Government from conferring upon the Tamil Nadu State Marketing Corporation Limited, the privilege of retail vending of IMFL.
7. The contention of the petitioner that retail supply of Indian made foreign spirits by the Tamil Nadu State Marketing Corporation Limited, is ultra vires the Tamil Nadu Act 10 of 1937, is therefore to be rejected.
8. The second contention of the petitioner is that under Section 17(C), the State Government can confer the exclusive or other privilege of manufacturing Indian made foreign spirit or selling of Indian made foreign spirits (emphasis supplied). He refers to Section 17 of Tamil Nadu Excise Act, where it is provided that the State Government may grant any person the exclusive or other privilege of supplying by wholesale and selling by retail any liquor other than foreign liquor. He states that the licensing provision under the Tamil Nadu Prohibition Act;1937 is similar to Section 17(1) of the Tamil Nadu Excise Act 1971. He contends that the State Government has no jurisdiction to confer on the Tamil Nadu Marketing Corporation Limited the privilege of retail vending of IMFL. This contention is also devoid of merits. Merely because there is no corresponding provision in the Tamil Nadu Prohibition Act, 1971, it cannot be concluded that the State Government cannot give the privilege of retail vending to the corporation like the Tamil Nadu State Marketing Corporation Limited. Even under Section 17-C(1) of Prohibition Act, it is lawful for the State Government to grant the exclusive or other privilege of selling by retail Indian made foreign spirits to any person or persons on such conditions and for such period as it deems fit. This Section 17-C is comprehensive enough to include the power of the State Government to grant the privilege to sell by retail Indian made foreign spirits to Tamil Nadu Marketing Corporation or such other bodies as the Government may from time to time decide.
9. The possession and sale of liquor by the State Marketing Federation and the other bodies on the grant of a privilege by the State Government would save them from the penalties provided under Section 4(1) states that nothing contained in this Sub-section shall apply to any act done under, and in accordance with, the provisions of the Act or the terms of any rule, notification, order, licence or permit, issued thereunder.
10. The next contention of the petitioner is that the Proviso to Rule 3 in so far as it enables the State Government to confer the privilege of retail sale of IMFL in favour of the Co- operative Societies is violative of Section 20(B) of Tamil Nadu Prohibition Act. That section reads as follows:
20-B. Where any co-operative society registered or deemed to have been registered under any law in force for the time being, makes an application for the grant of a licence under Clause (d) of Section 20, the authority competent to grant such licence shall, in granting such licence, give preference to such co-operative society over every other applicant.
11. The argument advanced is that under Section 20(B) of the Tamil Nadu Act 10 of 1937, the Cooperative Society is entitled only to a preference where it applies along with others for the grant of a licence. When the Act does not contemplate the conferment of exclusive privilege to the Co-operative Society, it is contended that the Proviso to Rule 3 is ultra vires Section 20(B).
12. This contention of the petitioner cannot be sustained. Section 20(b) is only an enabling provision. It states that when a Co-operative Society applies, for licence under Section 20(B) of the Act it must be given preference over the other applicants. That would not mean or exclude the power of the State Government to act in accordance with the rules made by it under which the State Government is enabled to confer an exclusive privilege of retail vending of IMFL, for local areas, subject to the conditions prescribed in the Proviso of Rule 3. Section 20(B) does not prohibit the grant of any exclusive privilege to a Co-operative Society.
13. The next contention is that the Proviso to Rule 3 which enables the State Government to confer a benefit in the form of privilege to the Civil Supplies Corporation Limited is beyond the scope of the provisions of Tamil Nadu Act 10 of 1937. But a careful study of the provisions of the Tamil Nadu Act 10 of 1937 would show that they do not contain an embargo on the State Government prohibiting it from conferring any privilege of retail vending in favour of Civil Supplies Corporation.
14. Tamil Nadu State Marketing Corporation or the Tamil Nadu Civil Supplies Corporation or Cooperative Societies can be reasonably classified as responsible public bodies which are distinct and different from private individuals. The conferment of any special privilege in favour of such bodies would not be hit by Article 14 of the Constitution of India.
15. The next contention of the petitioner is that the Proviso to Rule 3 which enables the Commissioner to nominate the State Marketing Corporation or the Tamil Nadu Civil Supplies Corporation or Co-operative Societies is an uncanalised and unbridled power which is likely to be abused and therefore, the said conferment of power on the licensing authority without any guidelines is violative of Article 14 of the Constitution. Here again, the contention of the petitioner is devoid of merits. The Commissioner holds a high and responsible position in the hierarchy of officialdom and is vested with powers to decide. The provisions of the Tamil Nadu Act 10 of 1937 and the Rules thereunder provide guidelines in the exercise of power to grant the privilege. Therefore, the contention of the petitioners that the proviso to Rule 3 centers unbridled powers cannot sustained.
16. The next contention is that the petitioner had already paid a sum of Rs. 20,600 towards renewal fee. At the time of payment of the said fee, the petitioner was led to believe that the licence would be renewed for a full year. Hence it is contended that the respondents are bound by the principle of promissory estoppel. Here again, the plea of the petitioner cannot be sustained.
17. Under the Rules of 1981, the application for renewal can be made and if such an application is made and is not disposed of, the applicant is entitled to continue to run the shop for a period of two months beyond the date of the expiry of the current licence. The petitioner has paid a sum of Rs. 20,600. By reason of such payment, the petitioner is privileged to continue to run the shop for a period of two months beyond 31-3-1989. The petitioner was never given any promise that the licence for the year 1989-90 would be renewed in favour of the petitioner. In such circumstances, the plea of the petitioner of promissory estoppel cannot be sustained.
18. The last of the submission of the petitioner is that the provisions of the Rules relating to grant of renewal of the shop for the second and third year on payment of 10 per cent or 15 per cent rhore than the bid amount allows a monopoly in favour of the successful bidder and are therefore unconstitutional. It could immediately be seen that t here is no provision for renewal beyond the third year more revenue than what was secured in the first year is obtained and therefore the submission of the petitioner that a monopoly is created in favour of the successful bidder is not correct.
19. One more contention of the petitioner has to be referred i.e., under the rules it is provided that no shop can be located within a distance of 50 metres, etc., from any place of worship or educational institution and the Proviso to Rule 18(1) of the 1989 rules states that the distance restriction shall not apply to areas designated as ‘Commercial’ or ‘Industrial’ by the Development or Town Planning authorities. The petitioners statement that the word ‘development’ or ‘town planning authorities’ is vague is hardly acceptable. The ‘development authority’ in cities like Madras would mean the Metropolitan Development authority and the world ‘town Planning authority’ would mean the Directorate of Town and Country Planning. There can be no doubt about the above expressions occurring in these rules and this contention of the petitioner is rejected.
20. In addition to the foresaid contentions urged by Thiru S.Vadivelu, the learned Counsel appearing for the petitioner in a batch of writ petitions, Mrs. Nalini Chidambaram, urged the following contentions. According to Mrs.Nalini Chidambaram the state should not trade either directly or indirectly in intoxicating liquors because Article 47, of the Constitution enjoins on the State the duty to impose prohibition and therefore when the State itself appoints nominees like the State Marketing Corporation or Civil Supplies Corporation to trade in liquor, there is a violation of Article 47. This contention is devoid of merits. The Prohibition Act, the validity of which has already been upheld by the Supreme Court, provides for the grant of privilege by way of permits and licences. Elaborate provisions had been made under the prohibition Act for the wholesale vending and retail vending of intoxicating liquors. It is the duty of the State to see that no misuse of this privilege is committed. In order to have an effective supervision and control over the proper enforcement of the Prohibition Act, it would be fair and proper for the Government to give the privilege of wholesale or retail vending of intoxicating liquor to such responsible bodies as the State Marketing Corporation or the Tamil Nadu Civil Supplies Corporation or selected Co-operative societies. Therefore, the contention of the petitioner that the State is violating the Constitutional mandate of Article 47 is not correct.
21. Mr. Edmund, appearing for some other petitioners contended that the provision of Rule 9(1)(e) is not valid. The said Rule states:
If the amount quoted in the highest tender is higher than the maximum bid amount recorded, the sale Officer shall continue the auction allowing the participation of only the highest bidder and the tenderers who have quoted above the highest bid.
22. He contends that the definition of a ‘sale officer’ occurring in Rule 2(X) which defines the sales officer as a person authorised by the Commissioner or Collector to conduct auction and accept the bid or tender, is sufficient and there is no need for a rule like Rule 9(e). Even assuming that the contention of the petitioners were to be accepted that Rule 9(e) is not necessary that would not make the 1989 Rules either violative of the Parent Act or ultra vires the Constitution. Hence all the contentions of the petitioner are rejected and all the writ petitions are dismissed.
