WP/22202/2006 of S.Malleswara Reddy Vs The Commissioner of Prohibition AND Excise, on 30 December 2008

COMMON ORDER:

These three writ petitions which are based on the same set offacts are heard together and decided by this Common Order.

The parties to all the writ petitions being common, for the sakeof convenience they shall be referred to as they are arrayed inW.P.No.22202 of 2006.

The facts, in brief, are as under :

The petitioners claim to be the joint owners of House Nos. 2-479, 2-480, 2-481, 2-481/1, 2-481/2, 2-481/3, 2-485, 2-485/1 and 2-486 of Balajinagar, Near I.T.I. Circle in Cuddapah MunicipalCorporation. The 5[th] respondent herein is in occupation of an adjacentpremises bearing D.No.2-484/1 of Balajinagar. He was granted a tradelicense for the year 2005-06 by the Commissioner of MunicipalCorporation of Cuddapah to carry on business in the said premises inthe name and style of M/s. Eagle Restaurant and Bar. On anapplication made by the 5[th] respondent under theprovisions of The Andhra Pradesh Excise (Grant of License of Sellingby Bar and Conditions of Licence) Rules, 2005 (for short, ‘the Rules’)made under G.O.Ms.No.997, Revenue (Ex.II), dated 24.05.2005, he was also granted a licence in Form-2B by the Prohibition & ExciseSuperintendent, Cuddapah for running a Bar in the said premises forthe year 2005-06 (from 1.7.2005 to 30.6.2006).

However, since the premises bearing No.2-484/1 did not satisfythe distance restriction of 100 meters as provided under Rule 6 (1) (ii)of the Rules, the existing entrance to the Bar and Restaurant atpremises No.2-484/1 was closed and a new entrance was providedthrough the neighbouring premises bearing D.No.2-478.Accordingly, the 5[th] respondent carried on the business during theyear 2005-06.

While so, there was an amendment to the Rules byG.O.Ms.No.596, Revenue (Ex.II) Department, dated 26.5.2006 andRule 5 of the Rules was substituted thereby requiring a personintending to establish a Bar to obtain a prior clearance in Form-2A fromthe Commissioner. Accordingly, the 5[th] respondent made anapplication in Form-1A to the Commissioner of Prohibition & Excise,A.P., Hyderabad, for prior clearance for grant of license of selling byBar at Door No.2-484/1. Having considered the same, the Commissioner of Prohibition & Excise, by order dated 26.6.2006,granted the prior clearance for 45 days from the date of issue inrespect of premises bearing No.2-484/1. Thereafter, the 5[th] respondentmade a request for grant of revised prior clearance by adding the newpremises bearing D.No.2-478 also. The said request was rejected bythe Commissioner of Prohibition and Excise by order dated11.08.2006 on the ground that the two houses were not contiguousand they were separated by a drainage canal. The 5[th] respondentmade another representation for prior clearance enclosing NOCgranted by the local authority as well as the consent affidavits given by the house owners stating that he had closed the old entrance topremises No.2-484/1 with cement bricks and provided a new entrance

through the newly acquired premises bearing D.No.2-478 and thus thedistance between the said premises and the Educational Institutionwas more than 100 meters. By order dated 26.08.2006 theCommissioner of Prohibition & Excise again rejected the request ofthe 5[th] respondent observing that the closure of thedrainage canal would cause inconvenience to the public. However, ona request made by the 5[th] respondent to reconsider the issue, theCommissioner of Prohibition & Excise called for a report from theDeputy Commissioner of Prohibition & Excise. Accordingly, theDeputy Commissioner of Prohibition and Excise personally inspectedthe premises in question on 19.9.2006 and submitted a report dated25.9.2006 stating that it is necessary to cover the entire drainagechannel by a permanent structure without obstructing the flow ofdrainage water. In the light of the said report dated 25.09.2006 theCommissioner of Prohibition & Excise by order dated 18.10.2006granted the revised prior clearance as sought by the 5[th] respondent byadding D.No.2-478 subject to the condition that the entire drainagechannel between the two houses is covered by a permanent structureso that the drainage passes beneath the covered structure allowingfree passage from one house to other without any inconvenience to thepublic. Pursuant thereto, the Deputy Commissioner of Prohibition &Excise, Chittoor, by proceedings dated 26.10.2006 accordedpermission for grant of Form-2B licence in favour of the 5[th] respondent and accordingly the Prohibition & Excise Superintendent, Cuddapah,by order dated 27.10.2006 granted Form-2B licence in favour of therespondent fro the year 2006-07.

Aggrieved by the same, the petitioners filed W.P.No.22202 of2006 seeking a declaration that the proceedings of the Commissioner,dated 18.10.2006 as well as the consequential orders of the Deputy Commissioner of Prohibition & Excise and the Prohibition & Excise Superintendent, Cuddapah, dated 26.10.2006 and 27.10.2006respectively granting Form-2B licence in favour of the 5[th] respondentfor the year 2006-07 are arbitrary and illegal.

Though the petitioners sought for interim relief of suspension ofthe licence granted in favour of the 5[th] respondent, no such order waspassed by this Court and consequently the 5[th] respondent carried on the business during the year 2006-07. Thereafter, the 5[th]respondent made an application seeking renewal of his licence for theyear 2007-08 and the same was granted by the Prohibition & ExciseSuperintendent, Cuddapah, by order dated 27.06.2007 subject to thecondition that the 5[th] respondent should obtain NOC fromthe Municipal Corporation of Cuddapah as required under Rule 6 (1)(v) of the Rules for sale of liquor at the premises in question.Accordingly, the 5[th] respondent made an applicationseeking NOC from the Commissioner, Municipal Corporation forrunning the Bar and Restaurant at premises bearing D.No.2-484/1 andD.No.2-478, Balaji Nagar. However, by order dated 30.06.2007 theapplication of the petitioner for NOC was rejected on the ground thatas per the sanctioned Master Plan in G.O.Ms.No.1078, M.A., dated19.09.1981 the said premises falls in public and semi-public area. TheCommissioner, Municipal Corporation also communicated the saidproceedings to the Prohibition & Excise Superintendent, Cuddapahby letter dated 04.07.2007. On the basis of the said communication,the Prohibition & Excise Superintendent issued a show-cause noticedated 7.7.2007 calling upon the 5[th] respondent to show-cause as towhy the Form-2B licence renewed for the year 2007-08 should not becancelled.

Aggrieved by the same, the 5[th] respondent filed W.P.No.15379of 2007 seeking a declaration that the proceedings of the

Commissioner of Municipal Corporation dated 30.06.2007 as well asthe show-cause notice dated 7.7.2007 issued by the Prohibition &Excise Superintendent, Cuddapah, are arbitrary and illegal. The 5[th]respondent also sought a direction to the Commissioner, MunicipalCorporation to issue NOC in respect of his licensed premises bearingD.Nos.2-484/1 and 2-478 for running the Bar and Restaurant.

This Court while directing rule nisi, by order dated 19.07.2007 in WPMP.No.19426 of 2007, granted interim stay of all furtherproceedings pursuant to the show-cause notice dated 07.07.2007 andaccordingly the 5[th] respondent carried on his business during theexcise year 2007-08 without any interruption.

Before the expiry of the excise year 2007-2008, the 5[th] respondent made an application dated 23.06.2008 for renewal ofhis Form-2B licence for the year 2008-09. Since he did not produceNOC from the Municipal Commissioner, Cuddapah, the licensingauthority sought for a clarification from the Commissioner of Prohibition& Excise. By proceedings dated 2.7.2008 the Commissioner ofProhibition & Excise directed the Prohibition & Excise Superintendentto follow the interim order of this Court dated 19.7.2007 inWPMP.No19426 of 2007 in W.P.No.15379 of 2007 which is inoperation. Pursuant thereto, the Prohibition & Excise Superintendent,Cuddapah, by order dated 7.7.2008 granted renewal of Form-2Blicence in favour of the 5[th] respondent for the year 2008-09 subject tothe outcome of final orders in W.P.No.15379 of 2007.

Aggrieved by the same, the petitioners filed W.P.No.16583 of2008 seeking a Certiorari to call for the records relating to theproceedings of the Commissioner dated 2.7.2008 as well as theconsequential proceedings of the Prohibition & ExciseSuperintendent, dated 7.7.2008 and to quash the same.

Separate counter-affidavits have been filed by the respondents in the respective writ petitions opposing the reliefs sought for.

I have heard the learned counsel for both the parties andperused the material on record.

Sri P. Kamalakar, the learned counsel for the petitioners inW.P.No.22202 of 2006 and W.P.No.16583 of 2008 contended that theprior clearance granted on 26.6.2006 for grant of Bar licence atpremises bearing No.2-484/1 cannot be revised or reviewed by theCommissioner of Prohibition & Excise since no such power isconferred under the Statute. It is contended that since the building forwhich prior clearance was granted on 26.6.2006 was hit by theprohibition under Rule 6 of the Rules, the 5[th] respondent ought to havechosen some other building in conformity with the requirements of thedistance rule and mere addition of a separate building to the existinglicensed premises by making certain modifications does not cure theillegality. At any rate, since the Commissioner of Prohibition & Exciseis not the competent authority to permit the alterations by covering thedrainage channel between the two houses, the revised prior clearancedated 18.10.2006 is without jurisdiction and liable to be set aside onthat ground alone.

So far as W.P.No.16583 of 2008 is concerned, it is contendedby Sri P. Kamalakar that the renewal of Form-2B licence in favour ofthe 5[th] respondent for the year 2008-09 is wholly illegal and withoutjurisdiction since the NOC as required under Rule 6(1) (v) wasadmittedly rejected by the Municipal Corporation, Cuddapah. Thelearned counsel also contended that the interim stay of all furtherproceedings pursuant to the show-cause notice dated 7.7.2007granted by this Court pending W.P.No.15379 of 2007 is in no wayrelevant for the purpose of renewal of licence for the year 2008-09, andthe Prohibition & Excise Superintendent committed a grave error ingranting renewal in violation of Rule 6 (1) (v) of the Rules.

On the other hand, Sri S.R. Ashok, the learned Senior Counselappearing for the 5[th] respondent (petitioner in W.P.No.15379 of 2007),contended that having issued the NOC for the licensing years 2005-06 and 2006-07 there is absolutely no justifiable reason to deny suchNOC for the licensing year 2007-08 in the absence of any changedcircumstances. It is also contended that the stand taken by theMunicipal Corporation that the area for which NOC was sought by the5[th] respondent comes under public and semi-public zone is withoutany basis and incorrect as is evident from the fact that the petitioners inW.P.No.22202 of 2006 whose business premises is also situated inthe very same area are granted trade licenses to carry on the businessin IMFL.

The learned Government Pleader for Prohibition & Excise, SriSiva Kumar, submitted that in view of the restrictions on the grant oflicence in Form-2B prescribed under Rule 6 (1) (v) of the Rules, nolicence can be granted unless the 5[th] respondent produces thepermission or NOC from the concerned local authority for sale of liquorat the premises in question.

Sri S.I. Newton, the learned Standing Counsel for the MunicipalCorporation, Cuddapah, while explaining that the premises in questionfalls within the public and semi-public use zone under the ZoningRegulations prescribed under General Town Planning Scheme ofCuddapah and the same is earmarked for Industrial Training Institute,contended that as per the sanctioned Master Plan it is impermissibleto establish a Bar and Restaurant in the said area.

In view of the above rival submissions, the following twoquestions arise for consideration by this Court :

(1) Whether the revised prior clearance dated 18.10.2006 grantedby the Commissioner of Prohibition & Excise in favour of the5[th] respondent is contrary to law?by the Commissioner of Prohibition & Excise in favour of the5[th] respondent is contrary to law?

(2) Whether the 5[th] respondent is entitled to renewal of his Form- Question No.1:

The requirement to obtain a prior clearance was inserted for thefirst time under G.O.Ms.No.596, dated 26.5.2006 by substituting Rule 5

of the Rules as under :

5. Application for licence:-

(1) A person intending to establish a Bar, maysubmit an application in Form 1-A to the Commissionerenclosing a Challan for Rs.1,000/- to get prior clearance.(2) The Commissioner having due regard torequirement and other factors as he deems fit, may8grant a prior clearance in Form-2A to such of theapplicants covered under sub-rule (1).

Provided that the grant of prior clearance shall notconfer any right on the applicant for grant oflicence in Form-2B. The holder shall not claim forany compensation or loss in case license in Form-2B is not granted.(3) … … .. .. … ..(4) … … .. .. … ..(5) … … .. .. … ..(6) … … .. .. … ..(7) … … .. .. … ..

On a reading of the above provision, it is clear that the mere grantof prior clearance does not confer any right on the applicant for grant oflicence in Form-2B. In other words, even after a prior clearance isgranted, it is open to the licensing authority to enquire into thecompliance with the requirements under Rule 6 of the Rules and theForm-2B licence would be granted only after being satisfied that noneof the restrictions are attracted.

In the case on hand, the 5[th] respondent was already running aBar and Restaurant in the premises bearing Door Nos. 2-484/1 and 2-478 of Balajinagar by the date of amendment to Rule 5 of the Rules by G.O.Ms.No.596, dated 26.6.2006, under which the prior clearance fromthe Commissioner is made a condition precedent for grant of licencefor a Bar. Accordingly, the 5[th] respondent made an application for prior clearance. However, the application was only for one premisesbearing Door No.2-484/1 and the same was accordinglygranted by Commissioner by order dated 26.06.2006. Subsequently,the 5[th] respondent sought for revised prior clearance by addingpremises No.2-478. After considering the report submitted by theDeputy Commissioner of Prohibition & Excise who had personallyinspected the premises in question, the Commissioner granted therevised prior clearance on 18.10.2006 subject to the condition ofconstructing a permanent structure covering the entire drainagechannel without causing any obstruction to the flow of drainage. Byno stretch of imagination, the said order can be treated as grantingpermission to the 5[th] respondent to make the said constructions. Itgoes without saying that before making the said constructions the 5[th]respondent is bound to obtain the necessary permissions from thecompetent Municipal Authorities. As a matter of fact, it is not the caseof the petitioners that the said permanent structure on the drainagechannel was made by the 5[th] respondent without obtaining thepermission from the Municipal Authorities.

So far as the further contention that in view of the distanceprohibition prescribed under Rule 6 (1) (ii), the Commissioner oughtnot to have granted prior clearance is concerned, it is relevant to notethat the proviso to Rule 5(2) itself made it clear that the grant of priorclearance shall not confer any right on the applicant for grant oflicence in Form-2B. There is also no provision extending therestrictions under Rule 6 on the grant of prior clearance in Form-1B. Apparently, the restrictions under Rule 6 are only on the grant of alicence in Form-2B. Therefore, it is not open to the petitioners to

challenge the prior clearance dated 18.10.2006 on the ground that the building for which the prior clearance was granted was hit by thedistance prohibition under Rule 6 of the Rules. The contention of thepetitioners that the order dated 18.10.2006 amounts to revising theearlier order dated 26.6.2006 which is beyond the competence of theCommissioner is also without any substance. The prior clearancegranted on 26.6.2006 was only in respect of a portion of the premisesin which the 5[th] respondent was running the Bar and Restaurant. Thesubsequent order granting the prior clearance in respect of the otherportion of the said premises does not amount to revising the earlierorder and therefore cannot be held to be illegal.

Question No. 2:

Rule 6 of the Rules made under G.O.Ms.No.997, Revenue(Ex.II), dated 24.05.2005, to the extent it is relevant for the purpose ofcontroversy involved in this matter may be extracted hereunder :

6. Restrictions on the grant of Licence :-

(1) A Licence form-2B shall not be granted.

(i) … … … … .. …. …

(ii) … … … … .. …. …

(iii) … … … … .. …. …

(iv) … … … … .. …. …

(v) Unless the applicant produces the permission or theno objection certificate from the local authorityconcerned for sale of liquor at the premises by theapplicant.

Under Rule 6 (1) (v), it is mandatory to produce the permission orNOC from the concerned local authority for sale of liquor at the premises by the applicant who seeks a licence in Form-2B. As held bythis Court in MANDAKINI RESTAURANT AND BAR v. DY. COMMR.OF PROH. & EXCISE[[1]]the said requirement is also applicable forrenewal of the licence under Rule 9-A of the Rules, as inserted by G.O.Ms.No.868, dated 21.06.2007.

The request of the 5[th] respondent for grant of NOC for the year2007-08 was rejected by the Commissioner, Municipal Corporation,Cuddapah, on the ground that the premises in question (DoorNo.2-484/1 and 2-478 of Balajinagar) falls in public and semi-publiczone as per the Master Plan sanctioned in G.O.Ms.No.1078, M.A.,dated 19.09.1981, and therefore establishment of Bar & Restaurant isnot permissible.

The said order is assailed by the 5[th] respondent disputing the Corporation’s Claim that the premises in question falls within publicand semi-public use zone. It is also contended by the 5[th] respondentthat having issued NOC for the licensing years 2005-06 and 2006-07,it is not open to the Corporation to refuse grant of NOC for the year2007-08 relying upon the sanctioned Master Plan dated 19.9.1981. Itis also the case of the 5[th] respondent that theCorporation granted trade licenses for different kinds of trades in thelocality including the petitioners in W.P.No.22202 of 2006 who arealso carrying on business in IMFL in the same locality. Thus, it iscontended that the action of the Corporation in rejecting NOC to the5[th] respondent amounts to hostile discrimination apart from beingarbitrary and illegal.

The Commissioner, Municipal Corporation, Cuddapah, filed acounter-affidavit in W.P.No.15379 of 2007 stating that the area where the Bar & Restaurant of the 5[th] respondent was located was originallywithin the area of operation of Chemmumiahpet Gram Panchayat andas per the village map of Chemmumiahpet, the particular area was inSy.No.557 known as Balajinagar. The main road of Balajinagar andthe National Highway No.18 were commercially developed under theadministration of Gram Panchayat and trade licenses were also issuedduring the said period. While so, Cuddapah Municipality was upgraded as Cuddapah Municipal Corporation in November, 2004 and thereafter the Chemmumiahpet Gram Panchayat along with fourother Gram Panchayats merged with Cuddapah Municipal corporationunder G.O.Ms.No.125, M.A., dated 17.03.2005. It is further stated that the Government of A.P. sanctioned a Master Plan for Cuddapah inG.O.Ms.No.1078, HMA & UD (MA), dated 19.09.1981 prescribing theproposed land use as per the Zones specified thereunder. Map No.4sanctioned by the Government along with G.O.Ms.No.1078, dated19.09.1981 consists of an Outline Development Plan for Cuddapahunder General Town-planning Scheme which included the landcovered by the then Cuddapah Municipality as well as thesurrounding Gram Panchayats. In the said maps, the proposed landuse was specifically mentioned such as residential use zone,commercial use zone, industrial use zone, public and semi-public usezone and agricultural land use zone and etc and the area where the5[th] respondent wanted to run a Bar and Restaurant falls under publicand semi-public use zone which is earmarked for Industrial TrainingInstitute, and the said area is known as I.T.I. Circle. Hence, therequest of the petitioner for issuance of NOC for running a Bar andRestaurant in the said area was rejected.

Nothing could be placed before this Court by the 5[th] respondent to controvert the stand taken by the Corporation that thearea wherein he proposed to establish the Bar and Restaurant fallsunder semi-public and public use zone.

In the circumstances, the Commissioner, Municipal Corporationwas justified in rejecting NOC since establishment of Bar andRestaurant within public and semi-public use zone is impermissibleunder Master Plan Zoning Regulations.

It is true that for the years 2005-06, 2006-07, the NOCs weregranted to the 5[th] respondent for the very same premises. However, the material on record shows that the said NOC was granted by theHealth Officer of the Municipal Corporation only for running arestaurant but not Bar. Therefore the Commissioner was justified inrejecting the NOC for running a Bar for the year 2007-08.

So far as the allegation of the 5[th] respondent that many othertraders including the petitioners in W.P.No.22202 of 2006 are allowedto continue their business in Balajinagar in violation of the ZoningRegulations is concerned, in the additional counter-affidavit it isexplained by the Corporation that a letter dated 7.9.2006 wasaddressed to the Superintendent, Prohibition & Excise Department,furnishing a list of 24 Wine shops existing in Cuddapah Town and mentioning the land use as per the sanctioned Master Plan. The list ofreligious structures and educational institutions located within 100 mts.from the said wine shops was also furnished according to which 11shops were found objectionable. Accordingly, the Excise Departmentwas requested to take steps to cancel the said licenses. TheCorporation is also taking steps to cancel the trade licenses granted totwo shops by name Mohan Wines at Door No.2-485 and Madhu Winesat Door No.2/476 of I.T.I. Circle, situated adjacent to the premises inrespect of which the 5[th] respondent sought for NOC since they werefound objectionable as per Master Plan and Zoning Regulations. TheCorporation issued notices on 25.2.2008 to all the Wine shops andBars which are located in violation of Zoning Regulations asking themto relocate their shops. The Corporation also informed theSuperintendent of Prohibition & Excise not to renew the licenses to thesaid shops.

Thus, it is clear that necessary steps have already beeninitiated by the Corporation to cancel the trade licenses which wereearlier issued in violation of Master Plan Zoning Regulations. At anyrate no Mandamus can be issued to perpetuate the illegality and therefore the Municipal Corporation cannot be compelled to actcontrary to Zoning Regulations merely on the ground that some of thetraders in the locality are allowed to carry on the business.

For the aforesaid reasons, the action of the Commissioner,Municipal Corporation in rejecting NOC sought by the 5[th]respondent does not suffer from any infirmity and warrants nointerference by this Court. Consequently, the 5[th] respondent is notentitled for renewal of his Form-2B licence for the year 2007-08 muchless for the year 2008-09. Hence, the renewal of licence granted bythe Prohibition & Excise Superintendent by order dated 7.7.2008 forthe year 2008-09 which is impugned in W.P.No.16583 of 2008 beingillegal is liable to be set aside. For the very same reasons the show-cause notice issued by the Prohibition & Excise Superintendent, forcancellation of Form-2B licence for the year 2007-08 which is thesubject matter of W.P.No.15379 of 2007 warrants no interference.However, since the excise year 2007-08 has expired during thependency of the writ petitions and the 5[th] respondent carried on thebusiness till the expiry of the excise year 2007-08, that part of the writpetition is rendered superfluous.

Conclusion

In the result, W.P.No.22202 of 2006 is dismissed andW.P.No.16583 of 2008 shall stand allowed setting aside the impugnedorders dated 2.7.2008 and 7.7.2008. W.P.No.15379 of 2007 shall alsostand dismissed. However, there shall be a direction to the MunicipalCorporation of Cuddapah to complete the proceedings for cancellationof the trade licenses in respect of the shops which are found to beobjectionable as per the Master Plan and Zoning Regulations within aperiod of four (4) weeks from the date of receipt of this order, if notalready cancelled. There shall also be a direction to the licensingauthority under the A.P. Excise Act, 1968, to takeconsequential steps following due process of law wherever the licenses granted under the A.P. Excise Act and the Rules madethereunder are found to be contrary to law. No costs.

Dt. 30.12.2008 Tsnr/gbs

______________

G. ROHINI, J.

[1]2008 (4) ALT 359 = 2008 (4) ALD 188