shifting of licensed Liquor Shop = We find no prohibition in the Excise Act or Rules for shifting the F.L.1 Licensed premises from one place to another. The permission dated 07.06.2018 for shifting the licensed shop from Mahe to Karaikal granted by Respondent No. 3 is legal and valid.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.9494­9495 OF 2019
(Arising out of SLP (Civil) No. 10744 – 10745 of 2019)
M/S CEE CEE & CEE CEE’S …APPELLANT
versus
K. DEVAMANI & ORS. …RESPONDENTS
J U D G M E N T
INDU MALHOTRA, J.
Leave granted.

  1. The Appellant is an F.L.­ 1 License holder issued on
    26.10.2016 by the Deputy Commissioner, Excise, Mahe
    under the Puducherry Excise Act, 1970 (“Excise Act”).
    Under the F.L. ­ 1 License, the Appellant is permitted to
    sell Indian Made Foreign Liquor (“IMFL”) to other License
    holders, and not in retail.
    1
  2. On 28.02.2017, the Appellant filed an Application before
    the Deputy Commissioner (Excise), Mahe for shifting his
    licensed Liquor Shop from Mahe to Karaikal under Rules
    163 and 209 of the Puducherry Excise Rules, 1970
    (“Excise Rules”).
  3. The Deputy Commissioner (Excise), Mahe forwarded the
    Application to Respondent No. 3 – the Deputy
    Commissioner (Excise), Karikal vide letter dated
    07.03.2017, and requested Respondent No. 3 to conduct
    an inspection to assess the suitability of the site at
    Karaikal.
  4. Respondent No. 1, a resident of Karaikal, submitted an
    objection dated 02.06.2017 before the Sub – Collector
    (Excise), Collectorate, Karaikal to oppose the shifting of the
    liquor shop to Karaikal. Respondent No. 1 inter alia
    submitted that pursuant to the Judgement dated
    15.12.2016 passed in State of Tamil Nadu v. Balu1
    , various
    liquor shops had been shifted from other regions to the
    residential areas in Karaikal. The Court had directed that
    no shop for the sale of liquor could be situated within a
    1 (2017) 2 SCC 281 : AIR 2017 SC 262 : 2017 (1) SCJ 586.
    2
    distance of 500 meters of the outer edge of the National or
    State Highways or of a service lane along the Highway.
    It was submitted that shifting of the shop was contrary
    to public interest of the residents of Karaikal. For about 35
    houses in Nedunkadu circle, Karaikal, there were 35 liquor
    shops already operational.
    It was further submitted that the Madras High Court
    vide Order dated 07.03.2003 in K. Murali v. Commissioner
    (Excise)­cum­Secretary in W.P. (Civil) No. 39661/2002 had
    interpreted the expression ‘from one place to another’ in
    Rules 163 and 209 of the Excise Rules to mean that
    shifting was permissible only within a particular local area,
    panchayat or commune, and not from one region to
    another in the Union Territory.
    In view of the restrictive meaning of the word ‘place’,
    the Licensing Authority could not grant permission to shift
    the licensed shop of the Appellant from one region to
    another i.e. from Mahe to Karaikal, which is at a distance
    of 650 kilometers.
    3
    The shifting of liquor shops from one region to another
    would be in contravention of Rules 163 and 209 of the
    Excise Rules.
  5. Respondent No. 1 and one K. M. Baskar filed W.P. (Civil)
    Nos. 13081/2017 and 15953/2017 before the Madras High
    Court for the issuance of a writ of mandamus restraining
    Respondent No. 2 and 4 ­ Excise Authorities from shifting
    liquor shops from Mahe to Karaikal.
    The Madras High Court vide Order dated 26.02.2018
    directed the Excise Authorities to consider the objections
    raised by Respondent No. 1 along with the Application for
    shifting filed by the Appellant in accordance with law.
  6. Respondent No. 3 ­ Deputy Commissioner (Excise),
    Karaikal granted a personal hearing to Respondent No. 1
    on 01.03.2018.
  7. Respondent No. 3 ­ Deputy Commissioner (Excise),
    Karaikal vide Order dated 27.03.2018 rejected the
    objections raised by Respondent No. 1, on the ground that
    the Order dated 07.03.2003 passed by a single judge of the
    Madras High Court in K. Murali (supra) was set aside by a
    division bench vide Order dated 06.09.2005.
    4
  8. Respondent No. 1 filed a 2nd W. P. (C) No. 11767/2018
    before the Madras High Court to quash the Order dated
    27.03.2018, and restrain Respondents No. 2 to 4 ­ Excise
    Authorities from permitting the re­location of liquor shops
    from Mahe to Karaikal, and granting liquor licenses in
    Karaikal.
  9. Respondent No. 2 – Deputy Commissioner (Excise),
    Puducherry vide Order No. 2239/DCE/S2/FL­1/2017 –
    2018/251 dated 07.06.2018 granted permission to the
    Appellant to shift the liquor shop from Mahe to Karaikal,
    subject to the fulfillment of the conditions contained in
    Rule 209 of the Excise Rules.
  10. The Deputy Commissioner (Excise), Mahe vide Order dated
    13.06.2018 conveyed the permission granted by
    Respondent No. 2 – Deputy Commissioner (Excise),
    Puducherry to the Appellant. The approval was made
    subject to the following two additional conditions:
    (i) there will be one entrance and exit only; and
    (ii) the boundary of the proposed site should be
    protected properly.
    5
  11. Respondent No. 3 – the Deputy Commissioner, Excise,
    Karaikal vide Order dated 15.06.2018 granted permission
    to the Appellant to commence his business of wholesale
    vending of IMFL at Karaikal.
  12. Respondent No. 1 filed a 3rd W. P. (Civil) 15661/2018
    before the Madras High Court to quash the Order dated
    15.06.2018, and restrain Respondent Nos. 2 to 4 ­ Excise
    Authorities from shifting liquor shops from Mahe to
    Karaikal, on the grounds similar to those raised in the 2nd
    W.P. (Civil) No. 11767/2018.
    The High Court vide Order dated 05.07.2018 granted
    interim stay of the Order dated 15.06.2018 passed by
    Respondent No. 3.
  13. The Excise Authorities supported the case of the Appellant
    – License holder in W.P (Civil) Nos. 11767/2018 and
    15661/2018.
  14. A division bench of the Madras High Court vide Impugned
    Judgement and Order dated 14.02.2019 allowed W.P.
    (Civil) Nos. 11767/2018 and 15661/2018, and quashed
    the Orders dated 27.03.2018 and 15.06.2018 passed by
    Respondent No. 3. The permission granted by Respondent
    6
    No. 2 to 4 to shift the Licensed Shop of the Appellant from
    Mahe to Karaikal was set aside.
    The division bench held that the disposal of the
    representation by Respondent No. 3 – Deputy
    Commissioner (Excise) Karaikal was not in accordance with
    the Order dated 26.02.2018 passed in W.P. (Civil) Nos.
    13081/2017 and 15953/2017.
    The word / phrase / term “place” in the Excise Act and
    Excise Rules had a restrictive meaning. The area defined
    by Section 2 (22) of the Excise Act was restricted to the
    “area” in which the liquor shop was located. The order
    which permitted shifting of the wholesale liquor shop of the
    Appellant from Mahe to Karaikal had to be confined to the
    region of Mahe, and not to Karaikal, which is an entirely
    different region in the Union Territory of Puducherry.
  15. Aggrieved by the Order dated 14.02.2018, the Appellant –
    Licensed holder has filed the present Special Leave
    Petition.
    We have heard Mr. Mahesh Jethmalani, Senior
    Counsel for the Appellant, Mr. R. Venkataramani, Senior
    7
    Counsel for the Union Territory and office bearers, and Mr.
    S. Thananjayan, Counsel for Respondent No. 1.
  16. The issue which arises for our consideration is whether the
    permission granted by Respondent Nos. 2 to 4 ­ Excise
    Authorities to transfer the licensed shop from one region to
    another in the Union Territory of Puducherry was
    permissible under the Excise Act and Rules.
  17. RELEVANT STATUTORY PROVISIONS
    The Puducherry Excise Act, 1970 provides a uniform law
    relating to the production, manufacture, possession,
    import, export, transport, purchase and sale of liquor, and
    intoxicating drugs in the Union Territory of Puducherry.
    17.1. Section 1(2) extends the applicability of the Excise Act to
    the whole of the Union Territory of Puducherry.
    17.2. The word ‘place’ is defined in Section 2 (22) as follows:
    “2. – Definitions

    (22) “place” includes a house, building, shop, booth, tent,
    vessel, raft, and vehicle.”
    The word ‘place’ does not indicate the territorial
    limits within which the Licensing Authority could grant
    shifting of a licensed shop. Section 2(22) describes the
    type of structure or establishment of the licensed shop,
    8
    which could either be a house, building, shop, booth,
    tent, vessel, raft, or vehicle in which the licensed
    premises is situated.
    17.3. Section 14 of the Excise Act provides that no liquor or
    intoxicating drug will be sold without a license issued by
    the Licensing Authority i.e. the Deputy Commissioner or
    Excise Commissioner.
    17.4. Section 70 of the Excise Act empowers the Government
    to frame rules for carrying out the functions of the Act.
    The Government has enacted the Puducherry Excise
    Rules, 1970 in exercise of the powers under Section 70.
    Rule 1(2) extends the applicability of the Excise Rules
    to the whole of the Union Territory of Pondicherry.
    i) Rule 22A (a) of the Excise Rules defines ‘region’ as any of
    the 4 regions of the Union Territory viz, Pondicherry,
    Karaikal, Mahe and Yanam.
    “CHAPTER­IIA
    Control of inter­State Transport of Liquor
  18. A. Definitions — In this Chapter, unless there is
    anything repugnant in the subject or context—
    (a) “Region” means any of the regions known as
    Pondicherry, Karaikal, Mahe and Yanam in the Union
    territory of Pondicherry.”
    9
    ii) Rule 113 of the Excise Rules provides for the grant of an
    F.L.­ 1 license for wholesale vending of liquor.
    “CHAPTER – VI
    Sale of Indian or Foreign liquors
  19. Licences. — Licences for the sale of Indian liquor or
    foreign liquor or both shall be of the following descriptions,
    and shall be granted by the Excise Commissioner or Deputy
    Commissioner, as the case may be, in accordance with the
    provisions of sub­section (2) of section 14 of the Act,
    namely:—
    (1) F.L. 1 Licence:— The holder of this licence shall be
    permitted to sell foreign liquor or Indian liquor, or both, in
    quantities of not less than 9 litres in sealed or capsuled
    bottles 2[***] at any one time and in any single transaction
    to any other licensee under this chapter and also in sealed
    or capsuled bottles in quantities not exceeding 3 [4.5 litres
    of all liquors other than beer and 9 litres of beer] at any one
    time and in any single transaction to an unlicensed person.
    But he shall not allow the consumption of the liquor at the
    licensed premises:
    Provided that such licensees may issue another licensed
    dealer samples of liquors, in quantities not exceeding 0.180
    litres.”
    iii) The procedure for transfer of a licensed liquor shop is
    provided under Rule 209 of the Excise Rules.
    “CHAPTER—XIII
    Excise Licences (General Conditions)
  20. Shifting of shops: — The licensee shall not shift the
    licensed premises from one place to another without the
    prior approval of the Licensing Authority.
    Provided that the licensing authority may permit, subject
    to the fulfilment of conditions of licence, shifting of licensed
    premises on payment of one­fourth of the license fee for
    such shifting”
    iv) The term ‘shop’ is defined by Rule 189 of the Excise
    Rules, as follows:
    “CHAPTER—XIII
    Excise Licences (General Conditions)

    10
  21. Definition — In this chapter, “shop” means the
    licensed premises where liquor is sold.”
    (emphasis supplied)
  22. DISCUSSION & ANALYSIS
    18.1. Rule 113 under Chapter VI of the Rules pertains to the
    sale of Indian or foreign liquors. It provides that the
    Excise Commissioner or Deputy Commissioner may
    issue an F.L. – 1 License for the sale of Indian liquor or
    foreign liquor, or both, in accordance with the
    provisions of Section 14 (2) of the Excise Act.
    18.2. Chapter XIII of the Excise Rules contains the General
    Conditions of Excise Licenses. Rule 188 states that
    Chapter XIII will apply to all Licenses issued under the
    Excise Act for sale of liquors, and every license is
    deemed to include the conditions prescribed herein.
    Rule 189 of the Excise Rules describes “shop” as the
    licensed premises from where liquor is sold.
    Rule 191 (2) provides that the applicant of a license
    shall select a site, and intimate the licensing authority,
    who may, after making such enquiry as he thinks fit,
    approve the site selected.
    11
    Rule 191 (4) provides that the Licensee shall sell the
    liquor only from the approved shop.
  23. The Appellant is the holder of an F.L. – 1 License issued by
    the Licensing Authority viz. the Deputy Commissioner,
    Excise, Mahe for carrying out vending of IMFL.
    An F.L.­1 Licensee is permitted to sell liquor only to
    other Licensees, and not in retail.
    19.1. The Petitioner was carrying out his wholesale business
    from MMC, No. 1/40,41 Main Road, Mahe.
    19.2. The Appellant filed an Application dated 28.02.2017 for
    shifting his liquor shop from Mahe to Karaikal under
    Rules 163 and 209 of the Excise Rules before the
    Deputy Commissioner, (Excise), Mahe.
    19.3. Rule 209 in Chapter XIII of the Excise Rules provides
    for Shifting of Shops of all license holders, whether
    wholesale or retail.
    Rule 209 permits shifting of the liquor shop from one
    “place” to another, subject to approval by the Licensing
    Authority on the terms and conditions contained
    therein.
    12
    The proviso to Rule 209 states that the Licensing
    Authority may permit shifting of the licensed premises,
    subject to the fulfillment of the conditions of license,
    and payment of 1/4th of the license fee for such
    shifting.
    There is no restriction or prohibition either in the
    Excise Act or Rules on the Licensing Authority from
    granting permission to shift the licensed shop from one
    region to another, subject to the conditions being
    complied with.
    A fortiori, a licensee can shift a liquor shop from
    one region to another within the Union Territory of
    Puducherry, subject to the prior approval of the
    Competent Authority.
  24. We are of the view that the expression ‘from one place to
    another’ is not restrictive, and does not curtail the power of
    the Licensing Authority to grant permission for shifting the
    licensed shop from one region to another in the Union
    Territory of Puducherry so long as the conditions stipulated
    by the Excise Act and Excise Rules, as also the conditions
    for grant of a license are complied with. The shifting should
    13
    not result in the increase in number of liquor shops beyond
    the maximum number of licenses which may be fixed for a
    particular area under Rule 122 of the Excise Rules.
  25. Given the peculiar demography of the Union Territory of
    Puducherry, which comprises of four unconnected regions,
    it would be contrary to the object and purpose of the
    Excise Act, if a restrictive meaning was to be given to Rule
    209 of the Excise Rules. The Act must be read as a whole
    to ascertain the intent of the legislature.
    If the intention of the legislature was to restrict the
    shifting of a liquor shop to a region, locality, municipality,
    or commune, Rule 209 of the Excise Act would have
    expressly contained such a prohibition, which is absent.
  26. The Excise Act and the Excise Rules use the expression
    ‘local area’ in contra­distinction with the word ‘place’,
    whenever it is intended to confine the area in which the
    liquor shop is located. For instance, Section 9 of the Excise
    Act prohibits the transportation of intoxicants from one
    ‘local area’ to another. Similarly, Section 10 of the Excise
    Act restricts the movement of intoxicants beyond a certain
    quantity which is stipulated for a ‘local area’.
    14
  27. We find from the Counter Affidavit filed by the State that
    similar proposals for shifting 5 shops to Karaikal from
    other regions were granted by the Licensing Authority, as
    per details given hereinbelow :
    Sr.No. Name &
    License No.
    Date of Shifting and
    Order
    Place of shifting
    From To
  28. M/s
    Vijayalakshmi
    Wines
    L.No. 8/FL­1
    13.07.1995 vide Order
    No. 13142/93­
    94/C2/DC(E)
    Puducherry Karaikal
  29. M/s Vinoth
    Liquors
    L. No. 10/ FL1
    21.01.2009 vide
    Memorandum No.
    10526/DC(E)/C208 –
    09
    Puducherry Karaikal
  30. M/s Ding Dong
    Liquors
    L. No. 11/ FL1
    29.11.2013 vide Order
    No.
    6146/DC(E)/C2/13­14
    Puducherry Karaikal
  31. M/s Apollo
    Wines
    L. No. 12/FL­1
    11.07.2014 vide Order
    No. 418/DC(E)/20­14
    Mahe Karaikal
  32. M/s. Fancy
    Traders
    L. No. 13/ FL1
    13.01.2016 vide Order
    No.
    5176/DC(E)/C2/215­
    16
    Puducherry Karaikal
  33. The Counsel for the State submitted that Respondent Nos.
    2 to 4 – Excise Authorities have assessed the pros and cons
    of the shifting, and sought the view of the police authorities
    prior to granting permission to the Appellant. The Report of
    the Excise Officer was obtained, which stated that the site
    of the Appellant at Karaikal is not located on the National
    or State Highway. There are no religious or educational
    15
    institutions which are located within the 100 meters radius
    of the site at Karaikal. There would be no hindrance to the
    traffic in the area. The Superintendent of Police confirmed
    that there would be no law and order problem if the
    licensed shop of the Appellant is shifted.
  34. In the present case, the Licensing Authority i.e. the Deputy
    Commissioner (Excise) vide Letter dated 07.06.2018 has
    granted permission to shift the F.L.1 Licensed premises of
    the Appellant from Mahe to Karaikal, subject to compliance
    with the conditions laid down in Rule 209 of the Excise
    Rules. The Deputy Commissioner (Excise), Mahe permitted
    shifting of the premises subject to two additional
    conditions viz.
    (i) There shall be one and the same entrance and exit
    only;
    (ii) The boundary of the building should be properly
    protected.
    We have been informed by the Counsel for the
    Appellant and the State that all conditions under the
    Excise Act and Rules have complied with.
    16
  35. Consequently, Respondent No. 3 ­ the Deputy
    Commissioner (Excise), Karaikal vide letter dated
    15.06.2018 granted permission to the Appellant to run the
    F.L.­1 business from the location designated in Karaikal.
  36. We find no prohibition in the Excise Act or Rules for
    shifting the F.L.1 Licensed premises from one place to
    another. The permission dated 07.06.2018 for shifting the
    licensed shop from Mahe to Karaikal granted by
    Respondent No. 3 is legal and valid.
  37. We allow the Civil Appeals and set aside the Order dated
    14.02.2019 passed by the division bench of the Madras
    High Court in W.P. (Civil) Nos. 11767/2018 and
    15661/2018.
  38. Ordered accordingly.
    Pending applications, if any, are accordingly disposed.
    …..……………………………J.
    (UDAY UMESH LALIT)
    ..….…………………………..J.
    (INDU MALHOTRA)
    New Delhi
    December 18, 2019.
    17