ORDER
1. These two writ petitions raise common question, viz., whether the amendment of Cl. (ii) of sub-rule (f) of R. 29 of the Andhra Pradesh Foreign Liquor and Indian Liquor Rules 1990 (for short “the Rules), is constitutionally invalid; if not, whether it applies to cases where applications for F.L. 17 licences were filed prior to the date of enforcement of the amended Rule.
2. The petitioners in the first writ petition proposed to run a Bar in the name and style of ‘Sanai Bar and Restaurant’ in Premises No. 9-2-226. Wyra Road, Khammam and applied for the grant of F.L. 17 licence on 11-9-1990 to the 1 st respondent. The petitioner says that he obtained the said premises on a monthly rental of Rs. 4,000/- and paid huge amounts as advance and deposit to the landlord. The 1st respondent directed the Excise Sub-Inspector Khammam to enquire into the matter and submit a report. The petitioner submitted the required certificates from the Commissioner of Municipality Khammam on 24-9-1990 and no-objection certificate from the Medical and Health Department on 27-10-1990 and another no-objection certificate from the District Educational Officer, Khammam on 20-12-90. He also submitted a no-objection certificate from the local Sub-Divisional Police Officer dated 20-10-1990 and from the Assistant Commissioner, Endowments on 29-10-1990. On the basis of these certificates, the Circle Inspector, Excise and the Assistant Excise Superintendent, Khammam Range recommended for grant of F.L. 17 licence in favour of the petitioner. While so, G.O. Ms. No. 30, Revenue (Ex. III) Department, dated 11-1-1991 amending the rule was published in the Gazette dated 17-1-1991 on which date it came into force. As the 1 st respondent did not grant the licence to the petitioner, he seeks a writ of mandamus directing the respondents to grant F.L. 17 licence in the name of ‘Sanai Bar and Restaurant’ at Premises No. 9-2-226, Wyra Road, Khammam by declaring the said G.O. as inapplicable to the case of the petitioner.
3. The petitioner in the second writ petition (W.P. No. 2626 of 1991) applied for the grant of an F.L. 17 licence to the 2nd respondent the Commissioner of Excise, to run a Bar under the name and style of M/s. Kalyani Garden Bar and Restaurant, along with a Challan for Rs. 100/-, on 2-6-1990. His application was forwarded to the Superintendent of Excise, Guntur, and the matter was enquired into and a report was sent to the 2nd respondent (Commissioner of Excise) through the Deputy Excise Commissioner. He says that he has complied with the requisite formalities and submitted no-objection certificates from the Assistant Superintendent of Police, Assistant Commissioner of Excise, District Medical and Health Officer, Guntur, etc. On that basis the case of the petitioner was recommended by the 3rd * respondent as well as the Deputy Commissioner of Excise. On 7-2-1991 in Proceedings No. Cr. 2811/91/Ex/G2, the 2nd respondent refused to grant clearance on the basis of the amended rules. In these circumstances, the petitioner filed the writ petition for a writ of mandamus declaring the said G.O. Ms. No. 30, dated 11-1-1991 as illegal and void, and consequentially to declare the proceedings issued by the 2nd respondent on 7-2-1991 also as illegal and void and for a consequential direction to respondents 2 and 3 to grant a licence in Form F.L. 17.
4. The respondents filed a counter-affidavit in W.P. 990 of 1991, stating inter alia that before 1-2-1988 Clause (ii) of Sub-rule (1) of Rule 29 of the Rules prescribed 500 meters as the minimum required distance between the proposed bar premises and the educational institutions and places of public worship. Later by G.O.Ms. No. 59, Revenue Department, dated 1-2-1988 the distance was reduced to 100 meters. In Writ Petition No. 1644 of 1989 the High Court observed that the distance of 100 meters from the place of public worship and educational institutions for establishing a bar is not conducive to the school going children and deleterious to women; and since the State has to strike a balance between the consideration of decency and public morality on the one hand and the State revenue on the other hand, the
Government restored the former distance by issuing the orders in the impugned G.O. Ms. No. 33, dated 11-1-1991. It is not disputed that the petitioner filed an application on 11-9-1990, along with a challan dated 1-9-1990 for Rs. 100/-, before the Excise Superintendent. It is stated that the proposals for grant of prior clearance for establishment of a bar in favour of the petitioner at the proposed premises were received by the licensing authority on 16-1-1991 through the Deputy Commissioner of Excise. As G.O. Ms. No. 30, dated 11-1-1991 was already issued, the matter was referred to the Excise Superintendent, Khammam to examine the proposals in accordance with the amended Rule, whose report was awaited. In the circumstances, it is prayed that the writ petition may be dismissed.
5. The learned counsel for the petitioners in both these cases submit that as the applications were admittedly filed long before the impugned G.O. came into force, the petitioners are entitled to get licence on satisfying conditions in the Rules as they existed on the date of the application notwithstanding the fact that the Rules were amended subsequently.
6. The learned Government Pleader on
the other hand, contends that filing of the application for grant of a licence is immaterial and that on the date of the consideration of the application as the amended Rule has already come into force the licence cannot be granted to the petitioners except in accordance with the amended Rule.
7. Before dealing with the contentions, it will be useful to refer to the judgment of the Full Bench of this court in Kasireddy Varahalu v. State of Andhra Pradesh, . In that case the Full Bench laid down that the law applicable or circumstances that have to be taken into consideration must be those which exist on the date when the permits are granted and not on the date when the proceedings were initiated. That case arose under the Motor Vehicles Act, 1939. The Regional Transport Authority, Visakhapatnam invited applications for two permits under S. 57 of the M.V.
Act. On 31-5-1958 two persons were granted permits, aggrieved by which, 23 persons filed appeals (o the State Transport Authority. On 27-11-1958 the State Transport Authority set aside the order of the Regional Transport Authority and remanded the case. On 4-6-1962 the matter was considered afresh by the R.T.A. Again appeals were filed before the S.T.A. raising a preliminary objection that the R.T.A. applied the law as it stood on 4-6-1962, the date of its consideration, instead of applying the law which prevailed on the date when the applications were called for. This contention was upheld by the appellate authority and the matter was again remanded for fresh consideration of the application with a direction that the R.T.A. should dispose of the matter keeping in view not only S. 47 of the Act but also G.O.Ms. No. 1037, dated 28-3-1953, but not Rule 153-B which came into force on 25-11-1960. On Revision the Government confirmed this order of the appellate authority on 6-4-1965 which was assailed in the writ petition. The Full Bench observed (at page 4):
“No person has an inherent right to the grant of a permit to ply motor vehicle or to its renewal which is entirely within the discretion of the transport authorities. Unlike in suits to enforce rights, an applicant for a permit cannot claim to have a vested right. If he had a vested right, any subsequent change of law cannot take that right away, unless it is made applicable retrospectively.”
8. From the above decision it follows that the law as applicable on the date of consideration of application for grant of permit will have to be applied but not on the date of application unless a person has a vested right to get the permit.
9. In so far as the first case (W.P. No. 990 of 1991) is concerned, the application fell for consideration of the Commissioner of Excise, the licensing authority, on 16-1-1991. On that date, the impugned G.O. has not come into force. The unamended Rule 29 was in force. Therefore, the licensing authority was not justified in referring the matter to the Excise Superintendent to scrutinise the case with reference to the amended Rule which has not
come into force as on that day. In the circumstances W.P. No. 990 of 1991 has to be allowed. Accordingly, a direction is issued to the 1st respondent to consider the application of the petitioner for grant of F.L. 17 licence of Premises No. 9-2-226, Wyra Road, Khammam on the basis of rule 29 as it stood on 16-1-1991.
10. In so far as the second writ petition (W.P. 2626 of 1991) is concerned, the case came up for consideration by the licensing authority on 4-2-1991. By that time the amended Rule had already come into force. Therefore, the application of the petitioner has to be considered on the basis of the Rule as amended by G.O.Ms. No. 30, dated 11-1-1991.
11. Sri C.B. Mohan Reddy, the learned counsel for the petitioner, submits that the amended rule is illegal and arbitrary and violative of Art. 14 of the Constitution as there is no reasonable basis for classifying bars which are proposed to be established in cities having population of more than 3 lakhs and bars proposed to be established in other places. Whereas in the first category of cases the restriction with reference to distance is not applicable, in other cases the distance restriction is applicable. It is further contended that in the Andhra Pradesh Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 the distance prescribed is only 100 meters, whereas in the impugned Rule the prescribed distance is 300 meters and for that reason also the Rule is discriminatory.
12. The learned Government Pleader, on the other hand, submits that by the impugned G.O. the earlier position with reference to the distance was restored in view of the observation of the High Court in W.P. No. 1644 of 1989. The learned Government Pleader further submits that the petitioners have no fundamental right in the toddy business, therefore, they cannot complain of the Rules on the ground that they are discriminatory; they have to take the licence on the conditions on which it is offered. It is also contended that the Rule is not discriminatory and is not violative of Art. 14 of the Constitution for purposes of grant of licence the premises have
been classified into those which are located in shopping “complex or commercial area in municipalities having more than 3 lakhs population or in a hotel approved by the Tourism Department of the State or the Central Government, and other premises; and the classification is reasonable and cannot be said to be arbitrary or illegal.
13. To appreciate the rival contentions of the learned counsel it will be appropriate to quote the impugned Rule as it existed before the amendment and as it exists after the amendment.
Cl. (ii) of Sub-rule (1) of Rule 29 as it stood prior to amendment under G.O. Ms. No. 30, dated 11-1-91:
“29. (1) A licence in Form F.L. 17,…..
involving consumption of liquor at the premises shall not be granted:
(i) xxx xxx xxx xxx
(ii) within one hundered meters from Educational Institutions recognised by the Government and from places of public worship such as temples, registered by the Endowments Department, Churches and Mosques.
Provided that the above restriction shall not be applicable to the bars proposed to be established in cities having a population of more than three lakhs where the bar is to be located in shopping complex or commercial area as certified by the Municipal authorities or in a hotel approved by the Tourism Department of the State or Central Govern- mem.”
Cl. (ii) of Sub-rule (1) of Rule 29 as it exists after amendment under G.O. Ms. No. 30, dated 11-1-91:–
“Cl. (ii) of Sub-rule (1) of Rule 29 :–
Within 500 meters from educational institutions recognised by the Government and within 250 meters from places of public worship such as temples registered by the Endowments Department, Churches and Mosques.
Provided that the above restriction shall
not be applicable to the bars proposed to be established in cities having a population of more than three lakhs where the bar is to be located in shopping complex of commercial area as certified by the Municipal authorities or in a hotel approved by the Tourism Department of the State or Central Government.”
From a perusal of the above rule it is noticed that the distance of 100 meters is replaced with the distance of 500 metres in the case of educational instituutions recognised by the Government and 250 metres in the case of places of public worship such as temples, Churches and Mosques. The rule as it stood before its amendment also required the same distance of 500 metres. Now as the rule stands the licence to open a bar, in Form F.L. 17 can be granted if the premises where the bar is proposed to be located is more than 500 metres from educational institutions recognised by the Government and more than 250 metres from places of public worship such as temples, registered by the Endowment Department, Churches and Mosques. This restriction of distance is not applicable to bars proposed to be established in cities having population of more than 3 lakhs where the bar is to be located (i) in a shopping complex of commercial area, or (ii) in a hotel approved by the Tourism Department of the State or the Central Government.
14. In State of M. P. v. Nandlal, , the Supreme Court observed (at page 279):
“There is no fundamental right in a citizen to carry on trade or business in liquor. The State under its regulatory power has the power to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession. No one can claim as against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor.”
From the above observation it is clear that having regard to the pernicious nature of the commodity the State Government has right to
determine its policy with regard to liquors; granting licence for manufacturing/sale of liquor would be a matter of economic policy in which the Courts would be slow to intervene and strike down what the State Government has done, unless it appears to be plainly arbitrary and illegal.
15. In Sri Durga Wines v. Excise Superintendent, (1988) 1 ALT 585 a learned single Judge of this Court held that no one has a fundamental right to trade in intoxicants and therefore the business in intoxicants cannot claim the protection of Art. 19(1)(g). It further held that no citizen has a right to trade in intoxicants except as a grant from the State. Therefore, the citizen cannot accept the grant and reject the conditions subject to which it is made. This was confirmed by a Division Bench of this Court in Writ Appeal No. 55 of 1988, dated 22-6-1990. It, therefore, follows that the State Government has a right to prescribe conditions for granting licence to carry on business in liquor; the licensee or an applicant for licence cannot, therefore, challenge the conditions except when they are plainly arbitrary and illegal.
16. It is now well settled that Art. 14 of
the Constitution prohibits class legislation and permits reasonable classification for purposes of legislation. Two tests which have to be satisfied are:
(i) that the classification is founded on an intelligible differentia which distinguishes persons that are grouped together from others left out of the group, and
(ii) the differentia must have a rational relation to the object sought to be achieved by the legislation. (See Dalmia’s case, .
By the impugned rules persons have been classified into those residing in rural areas, i.e., in areas in the cities or town having population of less than 3 lakhs, and those residing in urban area, i.e., Municipalities having population of more than three lakhs. The intention of the rule-making authority is to ensure that in the rural areas where the students are not usually exposed to the modern style of life are not should not be
distracted by the intoxicant shops nearby the educational institutions. So also, the rural public should not be disturbed by the intoxicant shops nearer to the places of worship. In urban areas where the residents are more enlightened, if the intoxicant shops are located in any shopping complex or any restaurants approved by the Tourism Department, they would not become traps for the student community. From that object in view, the classification of the premises where the bar can be located into areas in cities having population of more than 3 lakhs in the shopping complex of commerical area, and hotels approved by the Tourism Department, is, in my view, reasonable classification. Therefore, the classification in my view cannot be said to be violalive of Art. 14 of the Constitution and as such illegal or arbitrary.
17. For the above reasons, the second writ petition (W.P. No. 2626 of 1991) fails and it is accordingly dismissed. Having regard to the circumstances of the case, the parties in both the writ petitions are directed to bear their own costs. Advocate’s fee Rs. 250/- in each.
18. Order accordingly.