{"id":88548,"date":"1986-04-09T00:00:00","date_gmt":"1986-04-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/chaitanya-kumar-vs-state-of-karnataka-ors-on-9-april-1986"},"modified":"2017-07-15T23:46:09","modified_gmt":"2017-07-15T18:16:09","slug":"chaitanya-kumar-vs-state-of-karnataka-ors-on-9-april-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/chaitanya-kumar-vs-state-of-karnataka-ors-on-9-april-1986","title":{"rendered":"Chaitanya Kumar vs State Of Karnataka & Ors on 9 April, 1986"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Chaitanya Kumar vs State Of Karnataka & Ors on 9 April, 1986<\/div>\n
Equivalent citations: 1986 AIR 825, \t\t 1986 SCR (2) 409<\/div>\n
Author: O C Reddy<\/div>\n
Bench: Reddy, O. Chinnappa (J)<\/div>\n
           PETITIONER:\nCHAITANYA KUMAR\n\n\tVs.\n\nRESPONDENT:\nSTATE OF KARNATAKA & ORS.\n\nDATE OF JUDGMENT09\/04\/1986\n\nBENCH:\nREDDY, O. CHINNAPPA (J)\nBENCH:\nREDDY, O. CHINNAPPA (J)\nSINGH, K.N. (J)\n\nCITATION:\n 1986 AIR  825\t\t  1986 SCR  (2) 409\n 1986 SCC  (2) 594\t  1986 SCALE  (1)1099\n\n\nACT:\n     Karnataka Excise  Act, 1965,  ss.\t2(2)  and  13(1)(e)\/\nKarnataka Excise (Bottling of Liquor) Rules, 1967, r. 3(2) :\nContracts for  bottling\t arrack\t -  Awarding  of  -  Whether\narbitrary and capricious.\n     Constitution of India, Arts. 14, 32 and 226 :\n     Government Contracts  - Distribution  of State largesse\nArbitrariness - When arises.\n     Public Interest  Litigation -  Balancing of interests -\nRole of the Court.\n     Words &  Phrases :\t \"to bottle\"  - \"Bottle\t liquor\t for\nsale\" -\t Meaning of  - Karnataka  Excise Act, 1965, ss. 2(2)\nand 13(1)(e).\n\n\n\nHEADNOTE:\n     Section 13(1)(e)  of the  Karnataka  Excise  Act,\t1965\nprescribes that\t no person  shall  bottle  liquor  for\tsale\nexcept under  the authority  and subject  to the  terms\t and\nconditions of  a licence.  Rule 3(2) of the Karnataka Excise\n(Bottling of  Liquor)  Rules,  1967,  as  it  stood  at\t the\nrelevant time,\tprovided that  no person  shall be granted a\nlicence to  bottle liquor,  unless he  was a  lessee of\t the\nright of retail vend of arrack, or he held a licence for the\ndistillation or\t manufacture of\t liquor, or trade and import\nlicence or  a licence  for compounding, blending or reducing\nof liquors or any other licence which required possession of\nbottling licence. Rule 4 provided that a lessee of the right\nof retail  vend of  liquor or  a person\t holding any  of the\nlicences specified  in rule  3 and  desirous of\t obtaining a\nlicence\t to  bottle  liquor  may  make\tan  application\t for\nlicence.\n     Pursuant to  the decision\tof the\tState Government  to\nsupply liquor  in sealed bottles, the Excise Commissioner by\na\n410\nGazette\t Notification\tdated\tApril\t11,   1984   invited\napplications  from   intending\tpersons\/firms  for  bottling\narrack, though\taccording to the rules it was to be confined\nto persons already connected with the liquor trade.\n     Out of the one hundred thirty one applications received\nthe Excise  Commissioner rejected twenty eight on the ground\nthat the  applicants were  distillers, ninety  on the ground\nthat they  were connected  with the liquor trade and five on\nthe ground  that there was no proof that they had a base i-n\nKarnataka. me  remaining eight applications were recommended\nfor the award of the bottling contracts.\n     The Secretary to the Government being dissatisfied with\nthe manner  of selection,  made adverse\t observations in his\nnote to\t the Excise Minister. But all the same, the Minister\naccepted  the\trecommendation\tof   the   Commissioner\t  in\nconsultation with  the Chief  Minister. The Deputy Secretary\nto  tile   Finance  Department\tin  his\t note  to  the\tHome\nDepartment also observed that it was not clear from the file\nas  to\t how  the   Excise  Commissioner  had  selected\t the\ncontractors. The  Government, however,\tby its\torder  dated\nSeptember 27,  1984 allotted  the bottling  contracts to the\npersons recommended by the Excise Commissioner.\n     Aggrieved by  the said  order some\t of the unsuccessful\napplicants filed  writ petitions  in the High Court alleging\narbitrariness in  selecting contractors.  The Government  at\nthis stage  on November\t 23,  1984  issued  a  notification,\ncontaining a  draft amendment  of r. 3(2) by addition of the\nwords \"or  to persons  entrusted with the bottling of arrack\nby the\tGovernment\" after  the words  \"reducing of liquors\",\nand inviting  objections,  if  any,  by\t the  public  before\nNovember 28,  1984 barely five days' time. This amended rule\nmaking persons\tunconnected with  the liquor  trade eligible\nfor grant  of licences,\t was published on November 30, 1984.\nLater, r.4  was also  amended to  bring it  in line with the\namended rule  3. More  writ petitions were thereafter filed,\nincluding some\tby public  spirited citizens,  one  of\tthem\nalleging malafides  on the  part of the Chief Minister whose\nson-in-law was\tstated to be interested in some of the firms\nto whom the contracts had been awarded.\n\t\t\t  MANOHAR\n411\n     The petitions  were contested  by the  State Government\ncontending in  their counter  affidavit that  it was thought\ndesirable  to\taward  the  bottling  contracts\t to  persons\nunconnected with  the manufacture  or sale of arrack as that\nwould prevent  the possibility of its adulteration and short\nmeasurement, and evasion of excise duty. B\n     The High  Court while  allowing the two writ petitions,\nstruck down the impugned order as being unlawful, arbitrary,\ncapricious, in flagrant violation of law, and as shocking to\njudicial conscience. It held that the allegation of personal\nbias against  the Chief Minister was false, without however,\nrecording any finding on the question of malafides. C\n     In appeals\t by special  leave  filed  by  some  of\t the\naggrieved contractors,\tit was\tcontended that\tthe bottling\nscheme introduced  by the  Government in  1984 was  entirely\noutside the Karnataka Excise (Bottling of Liquor) Rules, and\nthat r.3  had no  application  to  the\tpersons\t seeking  or\nobtaining bottling  contracts under the scheme, and that the\nRules, as  they stood  before October  1984, were applicable\nonly to\t those who  were engaged in the manufacture and sale\nof liquor  and who  desired to\tbottle such liquor for sale,\nnot to\tthose who  were merely\tengaged in  the business  of\nbottling liquor,  having nothing  whatever to  do  with\t the\nmanufacture or\tsale of liquor. It was also averred that the\npersons who  merely bottled  liquor at\tthe instance  of the\nGovernment were\t no more  than the  agents of the Government\nappointed for  the purpose of doing a job work, and since it\nwould not be necessary for the Government to obtain bottling\nlicences, it  would be equally unnecessary for the agents of\nthe Government\tto obtain  bottling licences. It was further\nargued that  the public\t interest litigation ceased to be in\npublic interest\t as soon as the relator wilfully indulged in\nfalse allegations and that should be a sufficient ground not\nto warrant the exercise of the extraordinary jurisdiction of\nthe High Court under Art.226 of the Constitution. G\n     Dismissing the appeals, the Court,\n^\n     HELD: 1.(i)  Bottling  of\tliquor\tmeant  for  sale  by\nwhosoever in  Karnataka was  regulated by  the\tBottling  of\nLiquor\n412\nRules, and  r.3 thereof,  as it\t stood at the relevant time,\nwas attracted  to  persons  seeking  or\t obtaining  bottling\ncontracts  under   the\tscheme\t introduced  by\t  the  State\nGovernment in 1984. [428 C; 426 G; 427 A-D]\n     (ii) me  action of the Excise Commissioner in excluding\nfrom consideration  for the  award of the bottling contracts\nthose  persons\t who  were  eligible  under  the  rules\t and\nrecommending such  persons  as\twere  not  eligible  was  an\nunusual, wilful\t and perverse way of exercising the power of\ndistributing State largesse. [420 F]\n     2.(i) It  was only\t subsequent  to\t the  award  of\t the\nbottling contracts that the Government thought it prudent to\namend r.3  of the  Bottling  of\t Liquor\t Rules.\t The  almost\nsurreptitious manner  in which\tit was sought to be achieved\nindicates anxiety  on the  part of  the Government to favour\nthe chosen  ones with  the bottling contracts. [422 F-G; 425\nE]\n     (ii) Governments  and the governed are equally bound by\nthe laws. If any prior policy decision had been taken by the\nGovernment of  Karnataka to  award the bottling contracts to\nstrangers to  the liquor  trade and not to persons connected\nwith the trade, nothing would have been simpler than to make\nnecessary amendments  to the  rules before  giving effect to\nthe  policy   and  restrict   the   advertisement   inviting\napplications to\t applicants who\t were unconnected  with\t the\nliquor trade.  But apart  from the statement in the counter,\nno such\t decision was  brought to  Court's notice.  m e\t so-\ncalled policy  decision, if  any, was  only an after-thought\ntailored to  meet the  situation and clearly in the teeth of\nthe Bottling  of Liquor\t Rules, which contemplated the grant\nof bottling licences to persons connected with the trade and\nnot to strangers to the trade. [422 C-G]\n     3.(i)  By\t virtue\t of  the  prohibition  contained  in\ns.l3(1)(e) of  the Excise Act no person could engage himself\nin the\tbusiness of  bottling  liquor  without\tobtaining  a\nlicence under the Rules. [427 F]\n     (ii) Bottling  liquor for\tsale may  be for selling the\nliquor by  the bottler\thimself or  by someone else for whom\nthe bottling  has been\tdone by\t the bottler.  me expression\n\"bottle liquor\tfor sale\"  occurring in s.l3(1)(e) when read\nwith the  definition of\t the words  \"to bottle\" in s.2(2) of\nthe Act makes\n413\nit amply evident of that all that was necessary was that the\nliquor bottled must be meant for sale. m ere was, therefore,\nno warrant  to say that only a bottler who himself sells the\nliquor bottled\tby  him\t was  subject  to  and\tgoverned  by\ns.l3(1)(e) and\tthe Rules  and\tnot  a\tbottler\t who  merely\nbottles liquor for others. [427 H, 427 F, 428 A, 427 G]\n     In the  instant case,  the recommendation of the Excise\nCommissioner to award the bottling contracts to eight chosen\npersons was not wholly consistent with the very principle on\nwhich he had excluded as many as 118 out of 131 applications\nfrom  consideration.   One  of\t the  successful  applicants\n(Sr.No.73) was\talready an excise contractor and, therefore,\nwas ineligible\tfrom being  considered in  terms of criteria\nenunciated  by\t him.  It   was\t strange   that\t while\t ten\napplications by\t the same person were rejected on the ground\nthat he\t was connected\twith  the  liquor  trade,  the\t11th\napplication by\tthat very  person should  have been  granted\nwithout a  word to  indicate the  sudden departure  from the\nprinciple or the reason for the departure. [421 B-D]\n     4. me  persons who have been awarded bottling contracts\ncannot be  said to be mere agents of the Government and thus\nnot required  in law  to take  out licences under the Rules.\nmay are\t not instrumentalities\tof the\tGovernment  but\t are\nindependent contractors\t who deal  with\t the  Government  at\narm's length.  may are\tas much\t agents of the Government as\ncontractors of\tthe Public  Works Department who build roads\nand bridges or, for that matter, the arrack vendors in whose\nfavour the  Government parts with its exclusive privilege of\nselling liquor. [428 C-D]\n     5. The  Court should  refuse to  act at the instance of\nthe pseudo-public  spirited citizens who indulge in wild and\nreckless allegations  besmirching the  character of  others.\nAll the\t same, it  cannot close its eyes and persuade itself\nto uphold  publicly mischievous executive actions which have\nbeen exposed.  When arbitrariness  and perversion  are\twrit\nlarge and  brought out\tclearly, the  Court cannot shirk its\nduty and refuse its writ. Advancement of the public interest\nand avoidance  of the  public  mischief\t are  the  paramount\nconsiderations. me  Court is  always concerned\twith  the  I\nbalancing of interests. [426 A-C]\n414\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 634-45
\nof 1986.\n<\/p>\n
     From the  Judgment and  Order dated  31.1.1986  of\t the
\nKarnataka High Court in W.P. No. 19851 and 19208 of 1984.\n<\/p>\n
     K.K. Venugopal, C.S. Vaidyanathan, S. Ravindra Bhat and
\nS.R. Setia for the Appellants in C.A. Nos. 634-35 and 644-45
\nof 1986.\n<\/p>\n
     Dr. Y.S.  Chitale, C.S.  Vaidyanathan, S. Ravindra Bhat
\nand S.R.  Setia for  the Appellants  in C.A. Nos. 636-37 and
\n642-43 of 1986.\n<\/p>\n
     G.L. Sanghi, M.N. Krishnamani, P.R. Seetharaman, A.T.M.
\nSampath and P.N. Ramalingam for the Appellants in C.A. Nos.
\n638-39 and 640-41 of 1986.\n<\/p>\n
     Shanti Bhushan,  Swaraj Kaushal, M.R. Achar, N. Santosh
\nHegde and K.M. Muzammil Khan for Respondent No. 1.\n<\/p>\n
     L.M.  Singhvi,  R.K.  Jain,  Abhishek  M.\tSinghvi,  C.
\nMakhopadhaya, Ranji Thomas, Rajiv Tyagi, Ms. Abha Jain, R.N.
\nMittal, and D.S. Mehra for Respondent No. 3.\n<\/p>\n
     B.R.L.  Iyengar,\tN.  Reddy  and\tP.R.  Ramashesh\t for
\nRespondent No. 4.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     CHINNAPPA\tREDDY,\tJ.  This  case\thas  made  political
\nhistory, but those concerned for the Rule of Law must remain
\nunmindful and  unruffled by  the ripples  caused by  it. The
\nlegality of  the action\t of the\t Government of\tthe State of
\nKarnataka in awarding contracts for ‘bottling’ arrack to the
\nappellants and\tothers was  questioned in  the High Court of
\nKarnataka and  the order  of the State Government was struck
\ndown on\t the ground  that it  was  ‘unlawful’,\t‘arbitrary’,
\n‘capricious’, ‘in flagrant violation of the rule of law’ and
\nas ‘shocking  the judicial conscience’. Some of the persons,
\nto whom\t the bottling  contracts had  been  awarded  by\t the
\nGovernment, have  preferred these  appeals under Article 136
\nof the Constitution.\n<\/p>\n
415<\/span><\/p>\n
     By general\t concurrence of\t opinion since days of yore,
\nmanufacture and\t sale of intoxicating liquor has always been
\nconsidered to  be a  dangerous and obnoxious trade requiring
\nthe   strictest\t  vigilance   and   supervision\t  and\teven
\nprohibition.  It   is  now   firmly  established   that\t the
\nGovernment is  the  exclusive  owner  of  the  privilege  of
\nmanufacturing and  selling intoxicating\t liquor and that the
\nGovernment may\tfarm out these privileges for the purpose of
\nraising revenue.  The legislatures  of the various States in
\nIndia have  enacted excise  laws which\tenable them to raise
\npublic revenue\tby farming  out these privileges and further
\nto regulate  and  supervise  the  manufacture  and  sale  of
\nintoxicating liquor.  The Karnataka  Excise Act, 1965 is one
\nsuch law.  The Preamble to the Act states that it is enacted
\n“to provide  for a  uniform law\t relating to the production,
\nmanufacture,   ‘possession,   import,\texport,\t  transport,
\npurchase and  sale of  liquor and intoxicating drugs and the
\nlevy of\t duties of  excise thereon in the State of Karnataka
\nand  for   certain  other  matters  hereinafter\t appearing.”
\nSection 2(15),(16),(18)\t and (19)  of  the  Act\t define\t the
\nexpressions  ‘Indian  liquor’,\t‘intoxicant’,  ‘liquor’\t and
\n‘manufacture’. Section\t2(25) defines  ‘sale or\t selling’ as
\nincluding ‘any\ttransfer otherwise  than by  way of   gift’.
\nSection 2(2)  defines “to  bottle” as  meaning “to  transfer
\nliquor from  a cask or other vessle to a bottle, whether any
\nprocess of  manufacture be employed or not, and includes re-
\nbottling”. Sections  3, 4  and 5 provide for the appointment
\nof   Excise    Commissioner,   Deputy\t Commissioner\t and
\nSuperintendents\t and   Deputy  Superintendents\t of  Excise.
\nChapter III  (secs. 8  to 12)  deals with import, export and
\ntransport of  intoxicants while\t Chapter IV (secs. 13 to 21)
\ndeals with  their manufacture,\tpossession and sale. Section
\n13(1)(e) prescribes  that ‘no person shall bottle liquor for
\nsale except under the authority and subject to the terms and
\nconditions of  a licence  granted by the Deputy Commissioner
\nin that\t behalf or  under the  provisions  of  section\t18’.
\nSection 16  provides for  the establishment  of distilleries
\nand warehouses.\t Section 17  authorises\t the  Government  to
\nlease to any person, on such conditions and for such periods
\nas it  may think  fit the  exclusive or other right – (a) of
\nmanufacturing or  supplying by\twholesale or of both; or (b)
\nof  selling   by  wholesale   or  by   retail;\tor   (c)  of
\nmanufacturing or  supplying by\twholesale, or of both and of
\nselling by retail any Indian liquor or intoxi-\n<\/p>\n
416<\/span><\/p>\n
cating drug  within any\t specified area. Chapter VI provides
\nfor the\t grant of  licences and\t permits and Chapter VII and
\nVIII  deal   with  offences  and  penalties  and  detection,
\ninvestigation and  trial of offences. Section 71 invests the
\nGovernment with\t the power  to\tmake  rules,  generally\t and
\nparticularly. Pursuant\tto the power given under section 71,
\nthe Government\tof Karnataka has made various sets of rules.
\nWe  are\t  primarily  concerned\twith  the  Karnataka  Excise
\n(Bottling of  Liquor) Rules,  1967. Prior  to  November\t 30,
\n1984, rules 3,4,5 and 6 of the Karnataka Excise (Bottling of
\nLiquor) Rules, were as follows :\n<\/p>\n
\t  “3. Restrictions  on\tthe  grant  of\tlicences  to
\n\t  bottle liquor\t – (1)\tNo liquor  shall be  bottled
\n\t  except at a warehouse.\n<\/p><\/blockquote>\n
\t  Provided that\t arrack may  also be  bottled in  an
\n\t  arrack deport\t licensed under the Karnataka Excise
\n\t  (Sale of Indian and Foreign Liquors) Rules, 1968.
\n\t  (2) No person shall be granted a licence to bottle
\n\t  liquor (unless  he is\t a lessee  of the  right  of
\n\t  retail vend  of arrack  or he holds a licence) for
\n\t  the distillation or manufacture of liquor or trade
\n\t  and import  licence or  a licence for compounding,
\n\t  blending or  reducing\t of  liquors  or  any  other
\n\t  licence  which   requires  possession\t  of  bottle
\n\t  licence.\n<\/p><\/blockquote>\n
\t  4. Application for licence – A lessee of the right
\n\t  of retail  vend of  liquor or a person holding any
\n\t  of the  licences specified  in rule 3 and desirous
\n\t  of obtaining\ta licence  to bottle liquor may make
\n\t  an application  specifying the  warehouse in which
\n\t  the operation\t of bottling  of liquors  is  to  be
\n\t  carried  on\ttogether  with\t the  detailed\tplan
\n\t  thereof.\n<\/p><\/blockquote>\n
\t  5. Grant  of\tlicence\t –  If,\t after\tmaking\tsuch
\n\t  enquiries as\the may\tdeem necessary,\t the  Excise
\n\t  Commissioner is  satisfied that the applicant is a
\n\t  fit  person\tto  hold  a  licence  and  that\t the
\n\t  warehouse  in\t  which\t he  proposes  to  carry  on
\n\t  bottling operation  is suitable, he shall, subject
\n\t  to the  conditions hereinafter  provided  grant  a
\n\t  licence on payment of
\n417<\/span>
\n\t  a fee of rupees one thousand per annum.<\/p><\/blockquote>\n
\t  6. Duration  of licence  – The  licence  shall  be
\n\t  granted in  Form MEB\t1 and shall take effect from
\n\t  the day  specified therein  and  shall  remain  in
\n\t  force until 30th June next year. B
\nRules 7\t to 19 deal with various regulatory prescriptions in
\nregard to  the bottling\t of liquor  with which\twe  are\t not
\ndirectly concerned  now. on November 30, 1984, subsequent to
\nthe filing  of some of the writ petitions in the High Court,
\nrule 3(2)  was amended\tby the\taddition of the words “or to
\npersons\t entrusted  with  the  bottling\t of  arrack  by\t the
\nGovernment” after  the words  “reducing of  liquors”.  Later
\nstill rule  4 was  also amended to bring it in line with the
\namended rule 3.\n<\/p>\n
     In the  scheme of\tthings that  prevailed before  1984,
\nbottling of  liquor was not obligatory. But if liquor was in
\nfact bottled,  it had  to be done under the authority of and
\nsubject to  the terms  and conditions  of a  licence and  in
\naccordance with\t the requirements  of the  Karnataka  Excise
\n(Bottling of  Liquor) Rules.  Under the\t rules no person was
\nentitled to the grant of licence to bottle liquor unless ‘he
\nwas a  lessee of  the right  to retail\tvend of arrack or he
\nheld a licence for the distillation or manufacture of liquor
\nor  trade   and\t import\t  licence  or\ta  licence  for\t the
\ncompounding, blending  or reducing  of liquors\tor any other
\nlicence which  requires possession  of bottling licence.’ In
\nsubstance  it\tmeant  that  only  those  persons  who\twere
\nconnected with\tthe liquor  trade were entitled to apply for
\nthe grant  of licence  to bottle liquor, that is, no one was
\nentitled to  apply for the grant of licence to bottle liquor
\nunless he  was already\tconnected with\tthe liquor trade. It
\nappears that  in July  1981, there  was\t a  ghastly  tragedy
\nresulting in  the death\t of  336  persons,  men,  women\t and
\nchildren as a result of the consumption of liquor containing
\nmethanole. Several  more persons  lost\ttheir  eye-sight.  A
\nCommission of  Enquiry headed  by a  High  Court  Judge\t was
\nappointed by the Government of Karnataka to investigate into
\nthe cause  of the  tragedy and\tto recommend the steps which
\nshould be  taken to  prevent  the  repetition  of  any\tsuch
\ntragedy.\n<\/p>\n
418<\/span><\/p>\n
After the  Commissioner submitted its report, the Government
\ndecided\t that\tin  order   to\tavoid  ‘adulteration,  short
\nmeasurement and\t evasion of  excise duty’,  it was necessary
\nthat arrack should be supplied in sealed bottles. Apart from
\nadulteration, it  was also  realised that  supply  of  loose
\narrack was  unhygienic and, therefore, it was necessary that
\narrack ‘t  should be sold in sealed bottles. The decision of
\nthe Government\twas announced  in the  budget speech  of the
\nChief Minister\tand instructions  were given  to the  Excise
\nCommissioner  to   issue  necessary   notification  inviting
\napplications for bottling arrack.\n<\/p>\n
     Pursuant to  the decision\tof the\tGovernment to supply
\nliquor in sealed bottles the Excise Commissioner by a notifi
\ncation published  in the  Karnataka Gazette  dated April 11,
\n1984 invited  applications from “intending persons\/firms for
\nbottling arrack”  in 18\t places in Karnataka State specified
\nin the\tr notification.\t me price payable for each bottle of
\ndifferent  size\t  was  determined   and\t mentioned   in\t the
\nnotification. We  were told  at the  hearing that  even at a
\nmodest estimate the turn over could be expected to be in the
\nneighbourhood of  Rs.50 crores\tand that  the prices were so
\ndetermined that\t the margin of profit would be in the region
\nof about 10 per cent. It appears that the Government had the
\ncost structure worked out by a firm of Chartered Accountants
\nwho recommended\t a margin  of profit  of 17 per cent but the
\nGovernment decided  that lO  per  cent\twas  sufficient\t and
\nreasonable. The\t notification stated that the bottling units
\nwould  be   supplied  arrack   in  bulk\t quantity  from\t the
\nwarehouses, feeding  centres or\t distilleries and  that\t the
\narrack would  have to  be bottled  in  the  bottling  units.
\nFurther details\t of the\t procedure to  be followed were also
\nmentioned in the notification and it was stipulated that the
\nworking of  the blending  units would  be  governed  by\t the
\nprovisions of  the Karnataka  Excise Act  and Rules.  It was
\nmentioned  that\t the  provisions  of  the  Karnataka  Excise
\n(General Conditions)  Rules would also apply. The period for
\nwhich the  arrangement would  be in  force was\tstated to be
\nfour years,  that is,  July 1, 1984 to June 30, 1988, in the
\nfirst  instance.   Every  application  was  required  to  be
\naccompanied by\ta draft of Rs.10,OOO and it was further made
\na condition  that successful applicants would have to make a
\ncash deposit  of Rs.50,OOO  within five\t days of the date of
\nacceptance of  his offer.  The successful applicant would be
\nissued a  bottling licence according to the rules on payment
\nof the prescribed licence
\n419<\/span>
\nfee. April  21, 1984  was prescribed  as the  last date\t for
\nreceipt of applications.\n<\/p>\n
     One of  the very  curious features of the advertisement
\nwhich attracts\timmediate attention is that the applications
\nfor  bottling\tarrack\twere  invited  from  all  “intending
\npersons\/ firms”\t without any  restriction whatsoever. Though
\nunder the  Karnataka Excise  (Bottling of  Liquor) Rules, as
\nthey stood  at the  relevant time,  bottling licences  could
\nonly be granted to persons already connected with the liquor
\ntrade, the  advertisement did  not confine its invitation to
\nsuch persons  only. That  was indeed  curious but things got
\n“curiouser and curiouser” as Alice would certainly have said
\nand as we shall presently see.\n<\/p>\n
     In response to the advertisement, 131 applications were
\nreceived by the Excise Commissioner. The Excise Commissioner
\nthen called  all the  applicants for  discussion in order to
\nascertain their\t experience and\t financial stability. At the
\nconclusion  of\t the   discussions   and   after   obtaining
\nintelligence reports,  the Excise  Commissioner proceeded to
\nmake  his  recommendation  to  the  Government.\t The  Excise
\nCommissioner after  referring to the qualifications etc., of
\neach of the 131 applicants stated as follows :\n<\/p>\n
\t  “131 applicants  were examined  with reference  to
\n\t  the interview and other informations available and
\n\t  the details are as under :\n<\/p><\/blockquote>\n
\t  Sl.Nos. 25,  35, 38,\t39, 40,\t 41, 42, 43, 44, 45,
\n\t  46, 47,  48, 49,  50, 51,  52, 53, 54, 55, 63, 64,
\n\t  78, 85,  86, 89,  95 and  122 are  distillers\t and
\n\t  hence they  need not\tbe considered. Sl.Nos. 2, 3,
\n\t  4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18,
\n\t  19, 20,  21, 22,  24, 26,  27, 28, 29, 30, 31, 32,
\n\t  33, 34,  36, 37,  56, 57,  58, 59, 60, 61, 62, 65,
\n\t  66, 67,  68, 69,  70, 71,  72, 73, 75, 76, 77, 79,
\n\t  80, 81,  82, 83,  84, 87,  88, 89, 90, 91, 92, 93,
\n\t  94, 96,  97, 98, 99, 100, 101, 103, 104, 105, 106,
\n\t  107, 108,  109, 110, 111, 113, 115, 116, 117, 118,
\n\t  123, 124,  125, 126,\t128, 129, are connected with
\n\t  the trade  of arrack\tand among them Sl. Nos. 9 to
\n\t  12, 13  to 20\t have no  base in Karnataka and they
\n\t  are said to be trading in
\n420<\/span>
\n\t  bottling, blending  etc., of\tarrack in Tamil Nadu
\n\t  and Kerala.\n<\/p><\/blockquote>\n
\t  Similarly Sl.\t Nos. 1,  114, 119, 120, and 127 are
\n\t  outsiders who\t have not shown any proof of base in
\n\t  Karnataka. These also need not be considered.
\n\t  In the  result others,  namely Sl. Nos. 5, 23, 74,
\n\t  102, 112, 121, 130, 131 who have got background of
\n\t  trade\t in   bottling\t and   blending\t  and\talso
\n\t  financially sound  and are  found to be capable of
\n\t  handling the\twork if\t entrusted to  them  may  be
\n\t  considered for  bottling work\t and their names may
\n\t  be recommended for approval”.\n<\/p><\/blockquote>\n
We see\tthat the  Excise Commissioner  rejected twenty eight
\napplications  on   the\tground\t that  the  applicants\twere
\ndistillers, ninety  applications  on  the  ground  that\t the
\napplicants were\t connected with\t the liquor  trade and\tfive
\napplicants on  the ground  that there was no proof that they
\nhad a  base in\tKarnataka. Eight  applications remained\t and
\nthey were  recommended to  be chosen  for the  award of\t the
\nbottling contracts.  Earlier we remarked that things were to
\nbecome\t“curiouser  and\t curiouser”.  They  did.  Under\t the
\nKarnataka Excise  (Bottling of Liquor) Rules, distillers and
\npersons connected with the liquor trade were those that were
\neligible for the grant of bottling licences and strangers to
\nthe liquor trade were not eligible for the grant of bottling
\nlicences. But  there the  Excise Commissioner was, excluding
\nfrom consideration  for the  award of the bottling contracts
\nthose persons  who were\t eligible for  the grant of bottling
\nlicences and  recommending such persons as were not eligible
\nfor the\t grant of  bottling licences  under  the  rules,  an
\nunusual, wilful\t and perverse way of exercising the power of
\ndistributing State largesse. It was suggested before us that
\nthe public  exchequer would  not suffer in any way since the
\nbottling charges  were to be borne by the arrack contractors
\nand not by the State. So were the huge profits to be made by
\nthe contractors.  It  would  make  no  difference  that\t the
\nbottling charges  were to  be borne by the contractors since
\nthe award  of bottling\tcontracts by  the State would enable
\nthem to make huge profits. me burden of the bottling charges
\nwould  of  course  be  passed  on  ultimately  to  the\tpoor
\nconsumer. Thus even if the award of the bottling
\n421<\/span>
\ncontracts was  not at  the expense  of the  exchequer, there
\ncould be no question that what was done was the distribution
\nby the\tState of  favours  loaded  with\t bounty\t by  way  of
\nenabling the  recipients of  the favours  to  earn  enormous
\nprofits. Proceeding  further we\t may also  mention  at\tthis
\nstage  itself\tthat  the   recommendation  of\t the  Excise
\nCommissioner to\t award the  bottling  contracts to the eight
\nchosen persons\twas not\t wholly\t consistent  with  the\tvery
\nprinciple on which he had excluded as many as 118 out of 131
\napplications  from  consideration.  One\t of  the  successful
\napplications (Serial  No. 73)  was that\t submitted  by\tT.V.
\nSarangadharan, who was already an excise contractor and who,
\ntherefore, was\tineligible from being considered on the very
\nprinciples enunciated  by the  Excise  Commissioner  in\t his
\nrecommendation. In fact, 10 applications (Nos. 58, 59 and 60
\nto 67) submitted by this very gentleman, T.V. Sarangadharan,
\nwere rejected  by the Excise Commissioner by the application
\nof that\t principle. It is strange that while 10 applications
\nby the\tsame person  were rejected on the ground that he was
\nconnected with\tthe liquor  trade, the\t11th application  by
\nthat very  person should have been granted without a word to
\nindicate the  sudden departure\tfrom the  principle  or\t the
\nreason for the departure. An attempt was made to explain the
\nchoice made in favour of Sarangadharan on the ground that he
\nhad  an\t  existing  bottling  unit  and\t that  he  had\tbeen
\nvoluntarily bottling  arrack in\t the previous  years.  Apart
\nfrom the  fact that  this ground  was not  mentioned in\t the
\nreport of  the Excise  Commissioner, it does not explain why
\nthen  the  ten\tother  applications  of\t Sarangadharan\twere
\nrejected, nor  does it\texplain why  the application  of the
\nMysore Sugar  Company  (a  public  sector  undertaking)\t was
\nrejected on the ground that it was connected with the liquor
\ntrade\tdespite\t  the\tfact   that   this   company,\tlike
\nSarangadharan, had  voluntarily bottled\t the arrack supplied
\nor sold\t by it\tin previous  years. To add to it, the Mysore
\nSugar Company was also a public sector undertaking.\n<\/p>\n
     We gather from the counter affidavit filed on behalf of
\nthe Excise Commissioner and the Government of Karnataka that
\nit was\tthought desirable to award the bottling contracts to
\npersons unconnected  with the manufacture and sale of arrack
\nas that\t would prevent\tthe possibility\t of adulteration and
\nshort measurement.  In their  own words, they have stated in
\ntheir counter before the High Court as follows :\n<\/p>\n
422<\/span><\/p>\n
\t  ” It\tis felt that as far as possible, the work of
\n\t  bottling of arrack should be entrusted to an India
\n\t  agency which is not connected with the manufacture
\n\t  of  arrack   or  rectified  spirit  to  avoid\t any
\n\t  possibility of adulteration and short measurement.\n<\/p><\/blockquote>\n
It was\tthought that  if the  work of  bottling of arrack is
\nentrusted to a third person unconnected with the manufacture
\nof arrack or sale of the same, it would be far easy to check
\nshort measurement,  adulteration and also prevent evasion of
\nexcise duty”. It would be possible to appreciate and commend
\nthe stand  taken by  the Government  of Karnataka  if such a
\npolicy decision\t had been  taken by  the  Government  before
\ninviting applications  for the\tbottling contracts  and\t the
\nrules had been suitably amended. Apart from the statement in
\nthe counter,  no such  decision was  brought to\t our notice.
\nWhether such  a decision was taken by way of a resolution of
\nthe Cabinet  or by the issue of a G.O. Or by a communication
\nto  the\t  Excise  Commissioner,\t  we  have   no\t information
\nwhatsoever. Assuming  that there  was any  such decision, it
\nwas clearly  in the  teeth of the Karnataka Excise (Bottling
\nof Liquor)  Rules which\t contemplated the  grant of bottling
\nlicences to  persons connected\twith the  trade and  not  to
\nstrangers to  the trade.  If any  prior policy\tdecision had
\nbeen taken  by the  Government of  Karnataka  to  award\t the
\nbottling contracts  to strangers to the liquor trade and not
\nto persons connected with the trade, nothing would have been
\nsimpler than  to make  necessary  amendments  to  the  rules
\nbefore giving  effect to  the policy.  Governments  and\t the
\ngoverned  are\tequally\t bound\t by  the   laws.   And\t the
\nadvertisement inviting\tapplications could  have  restricted
\nthe applications to applicants who were unconnected with the
\nliquor trade.  As we  shall presently  point out it was only
\nsubsequent to  the award  of the  bottling contracts that it
\nwas  thought   necessary  to   amend  the  Karnataka  Excise
\n(Bottling of  Liquor) Rules.  It looks\tto us  that the\t so-
\ncalled policy decision was only an after-thought tailored to
\nmeet  the  situation  and  the\tprinciple  purported  to  be
\nenunciated by  the Excise  Commissioner was  a mere  pretext
\ndesigned to eliminate all except the chosen.\n<\/p>\n
423<\/span><\/p>\n
     The correspondence\t which followed between the Excise A
\nCommissioner  and  the\tGovernment  is\talso  revealing.  On
\nreceipt of  the letter of the Excise Commissioner containing
\nhis recommendation, the Secretary to the Government wrote to
\nthe Excise Commissioner a letter in which he stated :\n<\/p>\n
\t  “The process\tof establishing\t bottling plants  at
\n\t  different   places\twould\tinevitably   involve
\n\t  financial outlays  and time.\tm ere are no details
\n\t  forthcoming regarding\t the  credit  worthiness  of
\n\t  these individuals who are to be entrusted with the
\n\t  bottling  work.   No\tinformation  is\t forthcoming
\n\t  regarding the infrastructural facilities available
\n\t  with them and the time frame within which they can
\n\t  set up the bottling plants. m e same may kindly be
\n\t  furnished.”\n<\/p><\/blockquote>\n
Instead of placing before the Government the material if any
\nwhich was available to him to judge the credit worthiness of
\nthe contractors\t and  the  availability\t of  infrastructural
\nfacilities to  them, the Excise Commissioner sent what would
\nstrike any one as an evasive reply. He said,
\n\t  “The process\tof establishing\t bottling plants  in
\n\t  different  places   involves\t financial   outlays
\n\t  towards the  cost of\tland,  buildings,  machinery
\n\t  etc. Before  finalising these\t proposals I  called
\n\t  all the applicants for discussions in my office to
\n\t  find out  their credit  worthiness and  capability
\n\t  for doing the work. me proposals sent by me to the
\n\t  Government are  on the  basis of  my assessment of
\n\t  the  credit\tworthiness  and\t  capacity  of\t the
\n\t  individuals\tto   provide   the   infrastructural
\n\t  facilities required  for  taking  up\tbottling  of
\n\t  arrack without undue delay.”\n<\/p>\n
The Secretary  was obviously  dissatisfied with the reply of
\nthe Commissioner.  So, in his note to the Excise Minister he
\nstated :\n<\/p>\n
\t  “There  is   hardly  any  data  on  record  either
\n\t  regarding   the    credit   worthiness    of\t the
\n\t  individuals\/firms companies recommended by the
\n424<\/span>
\n\t  Excise  Commissioner\t or  their  capabilities  to
\n\t  undertake  a\t job  of   the\tmagnitude   and\t the
\n\t  proportions in  question. No\tinformation is\talso
\n\t  forthcoming on  the infrastructural  facilities at
\n\t  their disposal. As the entire arrack is to be sold
\n\t  in bottles,  their  operational  efficiency  would
\n\t  have a  very significant  bearing  on\t the  excise
\n\t  revenues of  the State. In the absence of data, it
\n\t  is difficult\tto come\t to any\t conclusion on\tthis
\n\t  issue.”\n<\/p><\/blockquote>\n
Despite the note of the Secretary, the Minister accepted the
\nrecommendation of  the Excise  Commissioner and\t also  added
\nthat he\t had already  discussed the  proposal with the Chief
\nMinister and  that the latter had given his clearance to the
\nproposals, and\ttherefore, necessary  orders might be issued
\napproving the proposals of the Commissioner. When the matter
\nwent  to   the\tFinance\t Department,  the  deputy  Secretary
\n(Finance) made\ta note\tstating\t “Home\tDepartment  is\talso
\nrequested  to\ttake  into   consideration   the   following
\nobservations :\n<\/p>\n
\t  (a) It  is not  clear from  the file as to how the
\n\t  Excise  Commissioner\t had  selected\t 9  bottling
\n\t  contractors out  of 131 firms which have submitted
\n\t  their offers.\t mis has  to be\t brought  on  record
\n\t  clearly. Otherwise,  the selection  is subject  to
\n\t  challenge in the court of law.”<\/p><\/blockquote>\n
     The protest  of the  Deputy Secretary  was ignored, the
\npolitical  arm\t of  the   Executive  prevailed\t  over\t the
\nbureaucratic arm of the Executive, as it always happens when
\nthe question is of distribution of Government patronage, and
\nthe impugned order of the Government was issued on September
\n27, 1984  allotting the\t bottling  contracts  to  the  eight
\npersons recommended  by the  Excise Commissioner. On October
\n26, 1984,  M\/s. Pramila\t Plastics filed a writ petition (No.
\n17011 of  1984) in  the Karnataka High Court questioning the
\nG.O. Some  other persons already engaged in the liquor trade
\nwhose  applications   had  been\t  rejected  by\t the  Excise
\nCommissioner also  filed writ petitions questioning the G.O.
\nin November,  1984. At\tthat stage it appears to have dawned
\non the\tpowers that  it was necessary to amend the Karnataka
\nExcise\t(Bottling   of\tLiquor)\t  Rules.   So\tthe   Excise
\nCommissioner wrote  to the  Government on November 6, 1984 a
\nletter in the following terms:\n<\/p>\n
425<\/span><\/p>\n
\t  “I write to state that Government have approved in
\n\t  their G.O.  No. H.D.24EAA.84 dated 29.9.84 for the
\n\t  sale of  arrack in  sealed bottles.  In  order  to
\n\t  implement the\t orders of  Government contained  in
\n\t  the above Government Order, the amendments for the
\n\t  above rules are necessary. Unless these amendments
\n\t  are issued,  the bottling  units approved  by\t the
\n\t  Government in the above Government Order cannot be
\n\t  issued  licences   for  bottling  units.  hence  I
\n\t  request that\tthe enclosed  draft  amendments\t may
\n\t  kindly be approved and issued by the Government.”\n<\/p><\/blockquote>\n
On November  23, 1984,\tthe Government issued a notification
\ncontaining  a\tdraft  amendment  of  rule  3  and  inviting
\nobjections, if any, by the public to be made before November
\n28, 1984.  There is some controversy as to the date on which
\nnotification dated  November 23,  1984 was  published in the
\nGazette, that is, whether it was published on 23rd itself or
\non 29th,  that is,  after the  prescribed date for filing of
\nobjections. Even  if it\t was published\ton 23rd,  there\t was
\nhardly any time for anyone to make any objections since only
\nfive days’  time was  given. me draft rule was finalised and
\nthe amended  rule was  published on November 30, 1984. Later
\nit was\tdiscovered that\t an amendment  of rule\t4  was\talso
\nnecessary and  that rule  was accordingly  amended in April,
\n1985. The  almost surreptitious\t manner in  which rule 3 was
\namended subsequent  to\tthe  filing  of\t some  of  the\twrit
\npetitions also\tappears to  give an indication regarding the
\nanxiety of the Government to favour the chosen ones with the
\nbottling contracts.\n<\/p>\n
     More writ\tpetitions were\tthereafter  filed,  some  by
\nrival applicants  for the  bottling contracts  and  some  by
\npublic spirited\t citizens determined  to expose Governmental
\nmisconduct.  We\t  were\ttold  by  Shri\tVenugopal  that\t the
\npreliminary hearing  of the  writ  petitions  was  postponed
\ntwice and  that\t a  rule  Nisi\twas  issued  only  after  an
\namendment of  one of  the writ petitions by the inclusion of
\nan allegation  of malafides against the Chief Minister whose
\nson-in-law was\tstated to be interested in some of the firms
\nto whom\t the contracts\thad  been  awarded.  The  allegation
\nagainst the  Chief Minister  has been  found to be unfounded
\nand false. According to Shri Venugopal while the institution
\nof Public  Interest Litigation\tis a  good thing  in itself,
\nthose professing to be
\n426<\/span>
\npublic spirited\t citizens cannot be encouraged to indulge in
\nwild and  reckless allegations\tbesmirching the character of
\nothers and  so the  court must refuse to act at the instance
\nof such\t pseudo-public spirited citizens. We agree with Shri
\nVenugopal. But,\t simultaneously, the  court cannot close its
\neyes and  persuade itself  to  uphold  publicly\t mischievous
\nexecutive  actions   which  have   been\t so   exposed.\tWhen
\narbitrariness and  perversion are writ large and brought out
\nclearly, the  court cannot  shirk its  duty and\t refuse\t its
\nwrit. Advancement  of the  public interest  and avoidance of
\nthe public  mischief are  the paramount\t considerations.  As
\nalways,\t the  court  is\t concerned  with  the  balancing  of
\ninterests, and we are satisfied that in the present case the
\nHigh Court  had little\toption but  to act  as it did and it
\nwould have  failed in  its duty\t had it\t acted otherwise and
\nrefused to issue a writ on the ground that the allegation of
\npersonal bias against the Chief Minister was false. Had that
\nbeen done  the public  mischief perpetrated  would have been
\nperpetuated. That is not what courts are for.\n<\/p>\n
     To continue,  two of  the Writ Petitions filed by rival
\napplicants were\t settled between  the parties at the time of
\nthe preliminary\t hearing and  were so disposed of. After the
\ncases were  partly argued  at the  final hearing, permission
\nwas sought  to withdraw\t three other writ petitions filed by
\nrival  applicants.   The  result  was  that  only  two\tWrit
\nPetitions were\teffectively argued  and they were allowed by
\nthe  High  Court  on  the  ground  that\t the  order  of\t the
\nGovernment was\tarbitrary, capricious  etc. The\t High  Court
\nhowever held  that the\tallegation  of\tpersonal  bias\tmade
\nagainst the  Chief Minister  was false.\t The Court  did\t not
\nrecord any  finding on\tthe question  of ‘malafides’  on the
\nground that  it was  unnecessary. The  State Government\t has
\ngracefully accepted  the judgment of the High Court but some
\nof the\tpersons in  whose  favour  the\tcontracts  had\tbeen
\nawarded have preferred these appeals by Special Leave.\n<\/p>\n
     Shri K K. Venugopal, Dr. Chitale and Shri G.L. & Sanghi
\nlearned\t counsel  for  the  appellants\tsubmitted  that\t the
\n“bottling scheme”  introduced by  the Government in 1984 was
\nentirely outside  the Karnataka\t Excise (Bottling of Liquor)
\nrules, and  that Rule  3 had  no application  to the persons
\nseeking or  obtaining bottling\tcontracts under\t the scheme.
\nThey
\n427<\/span>
\nargued that  the Bottling  of Liquor  Rules  as\t they  stood
\nbefore October,\t 1984 were applicable only to those who were
\nengaged in  the manufacture  and  sale\tof  liquor  and\t who
\ndesired to  bottle such\t liquor\t for  sale.  They  were\t not
\napplicable and\tRule 3\twas not\t attracted to  the  case  of
\npersons who  were merely engaged in the business of bottling
\nliquor, having\tnothing whatever  to do with the manufacture
\nor sale\t of liquor.  It was said that those who were engaged
\nin the\tmanufacture and\t sale of  liquor had  the option  to
\nbottle or  not to  bottle the liquor manufactured or sold by
\nthem and  if they  preferred to\t bottle the liquor they were
\nobliged\t to   observe  the  rules  but\tothers\twho  neither
\nmanufactured nor  sold liquor  had not to observe the rules.
\nIt was\talso submitted\tthat the  persons who merely bottled
\nliquor at  the instance\t of the Government were no more than
\nthe agents  of the  Government appointed  for the purpose of
\ndoing a\t job-work, and\tsince it  would not be necessary for
\nthe Government\tto obtain  bottling licences,  it  would  be
\nequally necessary for the agents of the Government to obtain
\nbottling licences.  It is  patent that these submissions are
\nsubmissions of\tdesperation. It\t is impossible to agree with
\nthem. Even  the Government  did not think that the Rules had
\nno application\tand that  Rule\t3  was\tnot  attracted.\t The
\nadvertisement inviting\tapplications from intending bottlers
\nwas quite  clear that  licences for  bottling ‘as per rules’
\nwould have  to be  obtained on\tpayment\t of  the  prescribed
\nlicence fee  of Rs.1000\t each. The  necessity for  obtaining
\nlicences under\tthe Bottling  of Liquor Rules by the persons
\nto whom\t the bottling  contracts had  been awarded  was also
\nrealised by  the Government  and it was for that reason that
\nRule 3\tcame to\t be amended. We are unable to understand how
\ndespite the  prohibition contained  in s.13(1)(e) anyone can
\nengage himself\tin the\tbusiness of  bottling liquor without
\nobtaining a  licence  under  the  Rules.  It  is  true\tthat
\ns.13(1)(e) uses\t the expression\t ‘bottling liquor  for sale’
\nand the\t expression ‘to\t bottle’ is  itself defined  to mean
\n‘the transfer  of liquor  from a  cask or  other vessle to a
\nbottle\tfor   the  purpose   of\t sale’.\t  But  there  is  no
\njustification for  the implication  sought to  be read\tinto
\nsection 13(1)(e)  read with  the definition  of ‘to  bottle’
\nthat only  a bottler who himself sells the liquor bottled by
\nhim is\tsubject to  and governed by s.13(1)(e) and the Rules
\nand not\t a bottler  who merely\tbottles liquor\tfor  others.
\nBottling liquor\t for sale  may be  for selling the liquor by
\nthe bottler himself or by someone else for whom the bottling
\nhas been done by the bottler. In
\n428<\/span>
\neither case  it is  bottling liquor  for sale.\tALL that  is
\nnecessary is  that the liquor must be meant for sale. It may
\nbe that\t occasionally liquor may be bottled not for sale but
\nfor private  consumption. Manufacture  of liquor for private
\nor domestic  consumption may  be permitted  under the Excise
\nLaws and  where so  permitted, the  liquor  may\t be  bottled
\nwithout obtaining  a separate bottling licence but where the
\nliquor which  is bottled  is intended  to be sold whether by
\nthe bottler  or\t by  someone  else  at\twhose  instance\t the
\nbottling is  done,  the\t bottler  must\tnecessarily  have  a
\nbottling licence  without which\t he cannot engage himself in
\nthe business  of bottling liquor meant for sale. Bottling of
\nliquor\tmeant\tfor  sale  by  whosoever  is  without  doubt
\nregulated by  the Bottling of Liquor Rules. Nor is there the
\nslightest substance  in the  submission that the persons who
\nhave been  awarded the bottling contracts are mere agents of
\nthe government\tand so\tthey are not required in law to take
\nout   licences\t  under\t  the\t Rules.\t  They\t  are\t not
\n‘instrumentalities’ of\tthe Government; they are independent
\ncontractors who\t deal with  the Government  at arm’s length.
\nThey are  as much agents of the Government as contractors of
\nthe Public  Works Department  who build roads and bridges or
\nfor that  matter, the  arrack vendors  in whose\t favour\t the
\nGovernment parts  with its  exclusive privilege\t of  selling
\nliquor.\n<\/p>\n
     Though  considerable  argument  appears  to  have\tbeen
\nadvanced before\t the High  Court on  the question  of  locus
\nstandi, the  question was rightly not raised before us. Shri
\nVenugopal however  argued that\tPublic\tInterest  Litigation
\nceased to  be in  the public interest as soon as the relator
\nwillfully indulged in false allegations and that should be a
\nsufficient  ground  not\t to  warrant  the  exercise  of\t the
\nextraordinary jurisdiction  of the High Court under Art. 226
\nof  the\t  Constitution.\t We  have  already  considered\tthis
\nsubmission and rejected it.\n<\/p>\n
     A\tspecial\t  argument  was\t  advanced  on\t behalf\t  of
\nSarangadharan who  it was  said was  also eligible under the
\nrules as  they then  existed and  who was  entitled to claim
\npreference in  view of his previous bottling experience. But
\nthat was not the ground on which the contract was awarded to
\nhim and\t it is\tnot open  to us\t to uphold  the award in his
\nfavour for altogether different reasons, ignoring the claims
\nof over\t a hundred  other  applicants  of  whose  claims  to
\npreference we
\n429<\/span>
\nare truly  ignorant. Nor  is it within our province to weigh
\nthe claims and the preferences.\n<\/p>\n
     At the  conclusion of the argument, Shri Venugopal made
\nan appeal  that his  clients may be permitted to continue to
\nwork the  contracts for\t some reasonable  time so  that\t the
\nheavy investments  made by  them may not go waste. We do not
\nsee how\t we can\t do that. ALL the appeals are dismissed with
\ncosts.\n<\/p>\n
P.S.S.\t\t\t\t\t  Appeals dismissed.\n430<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Chaitanya Kumar vs State Of Karnataka & Ors on 9 April, 1986 Equivalent citations: 1986 AIR 825, 1986 SCR (2) 409 Author: O C Reddy Bench: Reddy, O. Chinnappa (J) PETITIONER: CHAITANYA KUMAR Vs. RESPONDENT: STATE OF KARNATAKA & ORS. DATE OF JUDGMENT09\/04\/1986 BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-88548","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nChaitanya Kumar vs State Of Karnataka & Ors on 9 April, 1986 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/chaitanya-kumar-vs-state-of-karnataka-ors-on-9-april-1986\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chaitanya Kumar vs State Of Karnataka & Ors on 9 April, 1986 - 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