P.Pavan Kumar Reddy, S/o.Narahari Reddy V. The Commissioner of Prohibion and Excisse

WP/35500/2013

AI Insights

The case involves multiple Writ Petitions challenging the notifications issued by District Collectors for the relocation of A-4 excise shops, which were alleged to be arbitrary and contrary to the A.P. Excise (Grant of licence of selling by shops and conditions of licence) Rules, 2012. The petitioners, who were licensees of A-4 shops, argued that the relocation would cause them financial loss and was not in accordance with the established legal framework. The respondents, representing the government, defended the notifications as being within the legal rights of the Commissioner of Prohibition and Excise, supported by the amended 2012 Rules and the Excise Policy for 2013-14. The court examined the legal provisions, the amendments to the rules, and the implications of the relocation on the existing licensees, ultimately dismissing the petitions.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 745936 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 05-03-2014
• Assessment Year: misc
• Other Referred Cases: Rajamallaiah v. Anil Kishore, State of Punjab v. Devans Modern Breweries Ltd., Arji Sankara Rao v. Government of Andhra Pradesh, G. Venkatesh v. Commissioner of Prohibition and Excise, Shaktikumar M. Sancheti v. State of Maharashtra, C.P. Sikh Regular Motor Service v. State of Maharashtra, Khoday Distilleries Ltd. v. State of Karnataka, Devans Modern Breweries Ltd. v. State of U.P., Nandlal Jaiswal v. State of M.P., R. Selvaraj v. Government of TN, Indian Hotel & Restaurants Assn. v. State of Maharashtra, State of Jammu and Kashmir v. Shri Triloki Nath Khosa, B.K. Srinivasan v. State of Karnataka, State of U.P. v. Sheo Shanker Lal Srivastava, Tulsiram Patel v. State of U.P., M/s. Chingleput Bottlers v. M/s. Majestic Bottling Co., Madras City Wine Merchants’ Assn. v. State of T.N., Transport and Dock Workers Union v. Mumbai Port Trust, Ugar Sugar Works Ltd. v. Delhi Admn., Sterling Computers Ltd. v. M & N Publications Ltd., Ramesh Chandra Sankla v. Vikram Cement, M.P. Mittal v. State of Haryana, Andhra Pradesh Wine Dealers Association v. Deputy Director of Income Tax (Investigation)
• Laws Referred To: A.P. Excise Act, A.P. Excise (Grant of licence of selling by shops and conditions of licence) Rules, 2012
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: LEARNED GOVERNMENT PLEADER FOR PROHIBITION AND EXCISE
• Assessee Lawyers: K RAMAKRISHNA REDDY; N SUBBA RAO; S LAKSHMA REDDY; S RAHUL REDDY; I CHANDRASEKHAR; P NAGENDRA REDDY; P V RAMANA; C DAMODAR REDDY; B VIJAYSEN REDDY; S RAJASEKHAR RAO
• Keywords: A-4 excise shops; Economic Policy; Legitimate Expectation; Licence relocation; Public Order
• Section: 28; 72; 17; 4; 29; 21; 5(1); 16(9)

Judgement Text

"* THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN + WRIT PETITION NOs.35116, 35260, 35286, 35294, 35298, 35299, 35303, 35304, 35405, 35475, 35488, 35496, 35500, 35535, 35548, 35610, 35648, 35745, AND 35750 OF 2013 % Dated 05-03-2014 W.P. No.35116 of 2013: # B. Venkateswarlu and two others. …. Petitioners Vs. $ Government of A.P. Revenue (Excise) Department, rep., by its Prl. Secretary to Govt. Secretariat, Hyderabad and three others. …. Respondents ! Counsel for the petitioners: Sri K. Ramakrishna Reddy, Learned Senior Counsel, Sri N. Subba Rao, Sri S. Lakshma Reddy, Sri S. Rahul Reddy, Sri I. Chandrasekhar, Sri P. Nagendra Reddy, Sri P.V. Ramana, Sri C. Damodar Reddy, Sri B. Vijaysen Reddy and Sri S. Rajasekhar Rao, Learned Counsel appearing on behalf of the petitioners. ^ Counsel for respondents: Learned Government Pleader for Prohibition and Excise HEAD NOTE: ? Citations: 1) AIR 1980 SC 1502: 1980 Supp SCC 81 2) (2004) 11 SCC 26 3) 2005(6) ALD 514 4) (2007 (3) ALT 678 = (2007) 2 ALD 830 5) AIR 1961 SC 1170 : (1961) 3 SCR 185 6) AIR 1997 SC 2239 7) AIR 1990 SC 1747 8) AIR 1966 SC 1678 9) (1984 (2) SCC 500 10) (2001)8 SCC 61 11) (2003)5 SCC 134 12) (2005)10 SCC 437 13) (2004)11 SCC 625 14) (2001) 8 SCC 540 15) (1995) 1 SCC 351 16) (1974) 2 SCC 579 = AIR 1974 SC 1905 17) (1969) 1 AnWR 77 18) AIR 1951 SC 467 19) (2010) 6 SCC 545 20) 2012 (6) ALD 98 (DB 21) (1987) 1 SCC 658 22) AIR 1986 SC 1518 23) (1994) 5 SCC 198 24) (1980) 2 SCC 752 25) AIR 1965 SC 722 26) (2003) 1 SCC 506 : AIR 2003 SC 269 27) 2012 (6) ALD 390 28) (1985) 3 SCC 360 29) AIR 1982 SC 33: (1982) 1 SCC 39 30) AIR 1967 SC 1170 31) AIR 1967 SC 1836 32) AIR 1975 SC 2299 33) (1995) 1 SCC 574 34) (2006) 4 SCC 327 35) (2001) 9 SCC 432 36) 1999 American Law Reports 1137 37) 1978 (2) SCC 213 38) 1990 (3) SCC 447 39) 1993 Supp.(3) SCC 716 40) 1999 (4) SCC 135 41) 1999 (6) SCC 275 42) (1964) 4 SCR 280 43) (1986) 4 SCC 447 44) AIR 1958 Allahabad 692 45) AIR 1994 SC 813 = 1994 Supp (1) SCC 8 46) (2008) 5 SCC 33 47) 2008 28 JT 639 48) AIR 1958 SC 731 49) (2010) 7 SCC 643 50) AIR 1959 SC 942 51) AIR 1968 SC 1 52) AIR 1964 SC 1135 53) (2012) 4 SCC 483 54) (1988) 3 SCC 382 55) LAWS -TLMAD 2003-0-582: MANU/TN/0192/2003 56) (2013) 5 SCC 427 57) (2011) 7 SCC 639 58) (1966) 5 SCC 125 59) (2013) 2 SCC 772 60) (2013) 8 SCC 519 61) (1974) 1 SCC 19 62) AIR 1955 SC 191 63) AIR 1958 SC 538 64) (2003) 9 SCC 358 65) (1990) 4 SCC 366 66) (2003) 7 SCC 83 67) (2013) 8 SCC 154 68) 2002 (1) MLJ 627 69) AIR 1954 S.C. 220 70) AIR 1972 S.C 1816 71) AIR 1975 S.C. 360 72) AIR 1975 S.C. 1121 73) AIR 1977 S.C. 722 74) (2009) 14 SCC 85 75) (1986) 4 SCC 566 76) (1994) 5 SCC 509 77) 2004 (3) SCC 402 78) AIR 1984 S.C. 1030 79) (1993) 1 SCC 445 80) (2011) 2 SCC 575 81) 48 L Ed 971 82) (2008) 1 SCC 683 83) (1989) 1 SCC 89 84) AIR 1978 SC 597 85) AIR 1969 SC 198(1969)1 SCR 315 86) (1971) 3 SCC 864 = AIR 1973 SC 205 87) (1985) 3 SCC 398 88) (2006) 3 SCC 276 89) (1970) 2 SCC 458 90) (1981) 1 SCC 664 91) (1980) 2 SCC 295 92) (1981) 2 SCC 722 93) (1985) 1 SCC 641 94) (1972) 1 WLR 1373 95) (1980) 3 SCC 97 96) (2001) 3 SCC 635 97) (2010) 4 SCC 192 98) AIR 1952 SC 16 99) (1973) 1 SCC 409 100) (1980) 2 SC 471 101) (1985) 3 SCC 1 102) (2002) 7 SCC 222 103) (2004) 9 SCC 362 104) (2011) 6 SCC 508 105) (1993) 1 SCC 71 106) (1994) 4 SCC 42 107) (1999) 4 SCC 727 108) (2003) 3 SCC 485 109) (2003) 5 SCC 134 110) (2006) 4 SCC 1 111) (2006) 5 SCC 702 112) (2006) 8 SCC 381 113) (2009) 1 SCC 180 114) (1993) 3 SCC 499 115) (2011) 1 SCC 640 116) (1994) 4 SCC 104 117) 2004(2) ALD 599 (DB 118) AIR 1989 SC 997 119) (1875) Ch.D.426) 120) AIR 1964 SC 35 121) (2001) 4 SCC 9 122) (2007) 2 SCC 588 123) AIR 1969 SC 634 124) AIR 1956 SC 593 125) AIR 1965 SC 1216 126) AIR 2009 SC 713 127) AIR 2011 SC 1869 128) (2011) 10 SCC 420 129) (20120 12 SCC 133 130) (2013) 5 SCC 470 131) (1921) 2 KB 608 132) (1992) 4 SCC 683 133) (1998) 6 SCC 507 134) (2002) 1 SCC 100 135) AIR 1984 SC 1401 136) (1984) 4 SCC 371 137) 2005(4) Laws (APHC) 106 138) (2008) 12 SCC 481 139) (1980) 2 SCC 437 THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NOs.35116, 35260, 35286, 35294, 35298, 35299, 35303, 35304, 35405, 35475, 35488, 35496, 35500, 35535, 35548, 35610, 35648, 35745, AND 35750 OF 2013 COMMON ORDER: The notifications issued by District Collectors, inviting applications for grant of licences for the relocated A-4 excise shops, is questioned in these Writ Petitions as being arbitrary, illegal and contrary to the A.P. Excise (Grant of licence of selling by shops and conditions of licence) Rules, 2012 (hereinafter called the “2012 Rules”). It would suffice, for the disposal of this batch of Writ Petitions, if the facts in W.P. No.35116 of 2013 are noted. The petitioners were allotted A-4 shops at Konijerla and other villages for the licence period 01.07.2012 to 30.06.2013. They paid the licence fee of Rs.32.5 lakhs per annum. The licence was renewed, on completion of one year, in accordance with Rule 8 of the Rules. In the notification dated 30.11.2013, published in the District Gazette, the District Collector stated that the licence for the right of selling by shop was to be granted for the licence period from 01.07.2013 to 30.06.2014; the Commissioner of Prohibition & Excise had fixed 153 A-4 shops to be licensed in the areas/localities by proceedings dated 12.07.2012; among the 153 notified shops, 147 shops, which were disposed and established for the year 2012-13, were being renewed for the year 2013-14; in addition thereto, two new shops were allotted by the Commissioner of Prohibition & Excise by proceedings dated 29.11.2013; consequently he was issuing a notification for the A-4 shops which were either not disposed or had been cancelled or withdrawn for the year 2012-13; and, consequently, seven A-4 shops were being relocated under Rule 4 for drawal of lots. The petitioners are aggrieved by the said notification of the District Collector, informing the public and intending applicants, that A- 4 shops were being relocated from one area to another either within or beyond the District. It is the petitioner’s case that a similar attempt to relocate shops, by issuance of a notification, was under challenge in W.P. No.21377 of 2013 and batch; during the pendency of the Writ Petitions, the said notifications were withdrawn by the Government; and, consequently, the Writ Petitions were disposed of by order dated 21.08.2013. In the counter-affidavit filed on behalf of the Commissioner of Prohibition & Excise it is stated, among others, that the Commissioner had granted permission to relocate only 314 of the 1311 undisposed shops after considering all relevant factors; accordingly notifications dated 15.07.2013 were issued inviting applications for 300 shops at the proposed places; 810 applications were received for 127 A-4 shops; W.P. No.21474 of 2013 and batch was filed challenging the notification dated 15.07.2013; this Court had, by order dated 22.07.2013, permitted the authorities to proceed with the process of receipt of applications and drawal of lots, but had directed that no licenses shall be issued for any of the relocated shops; when the matter was being heard, the respondents withdrew the notifications with liberty to issue notifications afresh for relocation of the A-4 shops at all places where the turnover of the existing shops exceeded seven times the licence fee; as the cause in the Writ Petition did not survive, necessitating adjudication by this Court, the Writ Petitions were closed by order dated 21.08.2013; 60 A-4 shops, notified at their original places in the third round of notification, were confirmed; notifications dated 03.11.2013 were issued by the District Collectors inviting applications for establishing A-4 shops at the notified places; 547 applications were received pursuant to these notifications; among the 547 applications, 14 were received for the 12 A-4 shops notified in their original locations; as against the 121 A-4 shops sought to be relocated, 533 applications were received for 72 A-4 shops; lots were drawn on 07.12.2013 by the District Collectors, and successful applicants were declared; the Prohibition and Excise Superintendents had issued provisional licences to the successful applicants, except in Doulatabad of Medak district where the successful applicant did not pay the license fee; the Government had increased the price of liquor on more than three occasions without changing the percentage of margin allowed to the retailer on the purchases made from Andhra Pradesh Beverages Corporation Limited (‘APBCL’ for short); as the margin was fixed on the issue price, there would be no change in the profit margin of the licensees; because of the increase in price, the margin for the retailer had automatically increased, though there may not be a proportionate increase in sales; and, in such circumstances, it cannot be said that the gazette notification issued by the respective District Collectors are illegal, arbitrary and contrary to the provisions of the A.P. Excise Act; and, in similar circumstances, this Court had, by its order in W.P.No.22095 of 2013 dated 25.09.2013, held that relocation of an A-4 shop, at a place where the turnover is 14 times, cannot be said to be arbitrary or in violation of Article 14 of the Constitution of India. In the additional counter-affidavit, filed on behalf of the Commissioner, it is stated that 110 A-4 shops had crossed the turnover of 14 times and above throughout the State; two of such A-4 shops were disposed of at the relocated places in the second round of notification; the three A-4 shops, proposed in scheduled areas, were not notified for want of Gram Sabha resolution; of the remaining 104 A- 4 shops, notified at places where the turnover was 14 times and more, 17 A-4 shops have been notified for relocation at places where there is not even a single A-4 shop for the entire mandal; from out of these 104 A-4 shops, 61 were disposed of; out of 17 A-4 shops, notified at places where there is not even a single shop in the entire Mandal, 11 shops have been disposed of; in all 72 A-4 shops have been disposed of under the present notifications; in all these cases, the licensees were granted A-4 licences for the excise year 2012-13; in accordance with Rule 21, the licences of all A-4 licensees were renewed for a further period of one year from 01.07.2013 to 30.06.2014, wherever the licensees had sought renewal; the 7 times turnover, prescribed under Rule 16(9), is for each licence year; in the present notification a fixed licence fee is notified, in proportion to the period for which a licence was issued, in terms of Rule 16(9); if the licensee’s turnover crosses 7 times the licence fee, or the proportionate licence fee, in that excise year such licensees are liable to pay privilege fee; the petitioners’ contention that they would be put to loss if licences are issued to prospective applicants is not tenable; under Section 3 of the Act and Rule 11 of the Rules, the District Collector is the selection authority to conduct the process of selection of applicants for grant of licences, which includes the power to issue a notification duly inviting applications for grant of licences; at the time of selection of the applicants, the Commissioner had informed all the District Collectors, through D.O. letters, to issue notifications inviting applications for grant of licences; and as many as 5510 A-4 shops have been allotted to the successful applicants for the year 2013-14 as per the notification issued, in the District Gazettes, by the District Collectors concerned. Oral submissions were put forth by Sri K. Ramakrishna Reddy, Learned Senior Counsel, Sri N. Subba Rao, Sri S. Lakshma Reddy, Sri S. Rahul Reddy, Sri I. Chandrasekhar, Sri P. Nagendra Reddy, Sri P.V. Ramana, Sri C. Damodar Reddy, Sri B. Vijaysen Reddy and Sri S. Rajasekhar Rao, Learned Counsel appearing on behalf of the petitioners. Learned Government Pleader for Prohibition and Excise presented his arguments on behalf of the State Government. Written arguments have also been filed. The rival contentions, urged by Counsel on either side, are dealt with hereinafter under different heads. I . RULE 4 AS AMENDED AND NOTIFIED IN G.O.MS. NO.357 DATED 22.06.2013 : ITS SCOPE: It is contended on behalf of the petitioners that the 2012 Rules do not confer any power on the Commissioner to transfer A-4 shops fixed for a particular area/locality to another; no material has been placed before the Court to show whether the “public order” requirement of Rule 4 is satisfied; and opening new shops would create law and order problems. The Andhra Pradesh Excise Act is an Act intended to raise and secure revenue to the State without, at the same time, sacrificing the public interest involved in the regulation of trade in intoxicants. Administration of the Act is, therefore, vested primarily and centrally in the Commissioner of Excise. The fixation of the number of shops, their location, and grouping are considered by the legislative delegate to be matters of such vital importance in Excise administration that the power in this regard is vested in the Excise Commissioner. (Rajamallaiah v. Anil Kishore[1]). The provisions confer ample regulatory power upon the Excise Authority to regulate, several activities related to liquor, in any reasonable manner. (State of Punjab v. Devans Modern Breweries Ltd.,[2]). The 2012 Rules were amended by the Government in the exercise of the powers conferred by Section 72 r/w. Sections 17, 28, and 29 of the Act. The amendments were notified in G.O.Ms. No.357 dated 22.06.2013, and were published in the A.P. Gazette on 24.06.2013. Rule 4, after its amendment, reads as under: “Rule 4. Establishment of Shops:- Subject to such directions, which the Government may issue in this regard from time to time, the Commissioner of Prohibition and Excise, having due regard to the requirement, public order, health, safety and other factors as he thinks fit, may fix the number of shops to be established in an area/ locality before the publication of notification under Rule 5, and may relocate any un-disposed shops from any area/locality as he thinks fit.” The word “un-disposed”, in amended Rule 4, disables the Commissioner from relocating any A-4 shop, and his power to relocate A-4 shops is confined only to those which remained undisposed for the Excise Year 2013-14. The un-disposed A-4 shops are those for which either no licence was granted in the Excise Year 2012-13 or for which the licensees chose not to renew their licences for the Excise Year 2013-14. As against the stipulated 6596 shops for the entire State, the number of A-4 shops for which licences were renewed for the Excise Year 2013-14 were 4986. Around 1610 A-4 shops remained un- disposed, and were sought to be sold to augment State revenue. It is only these un-disposed A-4 shops which the amended Rule 4 empowered the Commissioner to relocate for augmenting State revenue through collection of licence fees. Reliance placed on behalf of the petitioners, on the judgments in Arji Sankara Rao v. Government of Andhra Pradesh[3], and G. Venkatesh v. Commissioner of Prohibition and Excise[4], is misplaced. In Arji Sankara Rao3, this Court held that, before issuing the auction notice, the Commissioner is required to fix the number of shops to be established in an area/locality; and, on a combined reading of Rules 3, 4 and 5, it was clear that the lease of the right to sell Indian Liquor and Foreign Liquor by shop by way of public auction can be granted only in respect of the shops fixed by the Commissioner in the particular area/locality identified by him, and in no other area/ locality. In G. Venkatesh4, this Court held that there is no provision under the Shop Rules permitting shifting of the shop even by the Commissioner from one mandal/municipality to another; if any of the shops are not disposed of, it is for the APBCL to sell liquor at the said outlet in the notified area; if the respondents are permitted to relocate the shop it would result in unhealthy competition as a result of the shops being relocated from an area where there are lesser sales to another area where there are higher sales; the location and upset price has been notified so as to enable the auction purchasers to take into account all relevant factors and offer their bids; and there is no justification in relocating un-disposed shops to some other mandal or locality. Both in Arji Sankara Rao3, and in G. Venkatesh4, the rules under consideration were the A.P. Excise (Lease of Right of selling by Shop and Conditions of Licence) Rules, 2005 (hereinafter called the “2005 Rules”). These Rules did not confer any power on the Commissioner of Excise to relocate un-disposed A-4 retail shops from an area/locality. The 2012 Rules were published in the A.P. Gazette on 18.06.2012. The power conferred on the Commissioner under Rule 4 of the 2012 Rules (before its amendment) was also limited to fixing the number of shops to be established in an area/locality before publication of the notification under Rule 5. It is only under the amended Rule 4 of the 2012 Rules that power has been conferred on the Commissioner to relocate an undisposed A-4 shop from an area/locality. I I . AMENDED RULE 4 – CONSTRUCTION TO BE PLACED THEREON: The contention that the addition to Rule 4, by amendment of the rules, does not carry any meaning, does not merit acceptance. In the interpretation of statutes, the court always presumes that the legislature has inserted every part thereof for a purpose, and the legislative intent is that every part of the statute should have effect. These presumptions will have to be made in the case of the rule- making authority also. (J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of U.P.[5]). It is a cardinal principle of construction of a statute or a statutory rule that effort should be made in construing the different provisions so that each provision will have its play. A statute, or rules made thereunder, should be read as a whole and one provision should be construed with reference to the other so as to make the rules consistent. Any construction which would bring any inconsistency or repugnancy between one provision and the other should be avoided. A construction that reduces one of the provisions to a 'dead letter' is not a harmonious construction as one part is being destroyed. (Jagdish Singh v. Lt. Governor Delhi[6]). To harmonise is not to destroy. Relocation of an A4 shop is permissible only if it was not disposed of at the beginning of the Excise Year 2013-14. Accepting the contention that the number of shops fixed in an area/locality, when the notifications were issued for the Excise Year 2012-13, cannot be increased subsequently, under the guise of relocation, would mean that an un-disposed shop can only be relocated to an area where no licence was either granted or renewed for an A-4 shop in the Excise year 2013-14. Undertaking such an exercise would be futile. As no one had sought licences in such areas/location in the first place, they are not likely to seek licences for the undisposed shops relocated to the same area/locality. The construction sought to be placed by the petitioner would render the very amendment of Rule 4 meaningless. Reading any limitation on the power conferred by the amended Rule 4, to relocate an un-disposed A-4 shop only within the district in which it was originally fixed, would also require this Court to read the words “to an area/locality within the district” into the amended Rule 4. A construction which requires, for its support, addition or substitution of words, or which results in rejection of words, has to be avoided. (Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests[7], Shyam Kishori Devi v. Patna Municipal Corpn[8], A. R. Antulay v. Ramdas Sriniwas Nayak[9], Dental Council of India v. Hari Prakash[10], J. P. Bansal v. State of Rajasthan[11] and State of Jharkhand v. Govind Singh[12]). Courts should not, ordinarily, add words to a statute or read words into it which are not there, especially when a literal reading thereof produces an intelligible result. (Delhi Financial Corpn v. Rajiv Anand[13]). Effect should be given to all the provisions and a construction that reduces one of the provisions to a “dead letter” must be avoided. (Anwar Hasan Khan v. Mohd. Shafi[14]). The contentions that the Commissioner lacks the power to relocate an undisposed shop from any area as he thinks fit under the amended Rule 4 \"to any area at any time as he thinks fit\", as it would amount to adding words, which were omitted in the Rule, by the Rule making authority; and no words which are omitted can be read into the Rule (casus omissus); are not tenable as no words have been omitted from Rule 4. On the contrary the words “and may relocate any undisposed shops from any area/locality as he thinks fit” has been inserted thereto. On a plain and literal reading, it is evident that the amended Rule 4 is open ended, and leaves it to the discretion of the Commissioner to decide the place where an undisposed A-4 shop should be relocated. No words need be added thereto. On the other hand reading any limitation in the amended Rule 4, regarding the areas/locality to which it should be relocated, would require addition of words thereto which is impermissible in law. III. ARE THE FACTORS ENUMERATED IN RULE 4 REQUIRED TO BE TAKEN INTO CONSIDERATION EVEN WHILE RELOCATING UNDISPOSED A-4 SHOPS? It is contended on behalf of the petitioners that, even while relocating A-4 shops, the factors enumerated in Rule 4 should be taken into consideration as fixation of the number of shops is at a micro level. The prescription in Rule 4, of having due regard to the requirement of public order, health, safety and other factors, is before the Commissioner fixes the number of shops to be established in an area/locality. Such an exercise has already been undertaken and completed in the previous Excise Years. On a plain and literal reading of the amended Rule 4 it is evident that the Commissioner is not obligated to again have due regard to these factors while relocating an un-disposed shop from an area/locality. It is unnecessary to delve further on this aspect as the counter- affidavit filed by the respondents discloses that, after permission was given by the Government, the Commissioner had requested the Deputy Commissioners of Prohibition & Excise, vide letter dated 08.07.2013, to provide information for relocation of the undisposed A-4 shops; a meeting with all the Deputy Commissioners were held on 11.07.2013 exclusively for the purpose of relocating the undisposed shops; the respective supervisory officers, monitoring affairs in the allotted districts, held deliberations with the respective Deputy Commissioners to decide about relocation of the undisposed shops strictly in accordance with Rule 4; during these discussions all the factors, envisaged under Rule 4, were considered; ultimately the field level officers had identified only 314 shops, from out of 1311 undisposed shops, for relocation all over the State; the Deputy Commissioners had submitted their proposals with specific remarks for relocation of the A-4 shops which were not disposed off; their proposals contained specific remarks with regards spatial gaps, to overcome the disqualifications under Rule 25, plugging unauthorised sale of I.D. liquor and to streamline the number of shops in a particular area/locality; they had pointed out that the shops had not been evenly distributed among the mandals/municipalities; there were some mandals where not even a single shop is located; in certain mandals there was only one A-4 shop in the entire mandal; in some municipalities there were only one or two shops; as A-4 shops were not rationally distributed earlier, there were excess shops in some areas, and no shops at other places; while there was no requirement of A-4 shops in certain areas, there was a requirement in others; in order to curb the menace of I.D. liquor, the field level officers had proposed some places for relocation; by virtue of the powers conferred under Rule 4 the Commissioner, after taking into consideration the requirement, public order, health, safety and other factors before relocating the A-4 shops, had accorded permission for relocation of shops; and, taking into consideration all relevant factors and the proposals submitted by the Deputy Commissioners, he had granted permission for relocation of 314 shops from out 1,311 undisposed shops. From the aforesaid averments in the counter-affidavit, it is evident that the Commissioner had again taken into consideration the factors enumerated in Rule 4 before relocating undisposed A-4 shops. IV. CAN SHOPS, HITHERTO FIXED FOR AN AREA/LOCALITY WITHIN A DISTRICT, BE RELOCATED TO ANOTHER AREA/LOCALITY IN ANOTHER DISTRICT OF THE STATE? It is contended on behalf of the petitioners that there are six zones in the State which are divided into two multi-zones; in the absence of any definition in the rules, and as the Licensing Authority (Excise Superintendent) is in-charge of an excise district, the word “area” can only mean a part of a district and not beyond; a “locality” is similar to an “area”; the words “area/locality” should be read ejusdem generis, and cannot travel beyond the district; the words “any area” must be read to mean a locality within the same mandal; the entire State cannot be taken as one area; the contemporaneous understanding of the Commissioner, in the impugned notification dated 30.11.2013, is that the word “area/locality” means a “district”; from the Excise Policy, notified in G.O.Ms. No.358 dated 22.06.2013, it is clear that the government understood “district” to be the “area”; as a result of the impugned notifications the number of shops, already fixed at the time of starting of the Excise Year, in an area has increased; the amended portion of Rule 4 does not confer power to relocate undisposed shops from one district to another after the number of shops, for each district, has been fixed on the basis of the criteria laid down in Rule 4; no power is conferred on the authority to enhance the number of shops in the transferee district; transfer of a shop from one district to another defeats the population ratio, falls foul of Rule 16(1), and adversely affects the licensee as there cannot be more than one shop for the same population; and the number of shops, fixed in an area / locality at the time of the notification, cannot be increased subsequently under the guise of relocation. It is no doubt true that Rule 4 of the 2012 Rules confers power on the Commissioner to fix the number of shops to be established in an area/locality, and it is in exercise of this power that the Commissioner had, hitherto, fixed the number of shops in different areas/localities in the State. The relocation, sought to be made by way of the impugned notifications, is of undisposed shops hitherto fixed in a particular area/locality. As the power of the Commissioner to relocate an undisposed shop, from an area/locality to another, is not fettered by village/municipal/municipal corporation/mandal/district level restrictions, it is open to him, for just and valid reasons, to relocate undisposed shops from an area/locality in a district/zone/multi-zone to another area/locality in a different district/zone/multi-zone. Reference made in the impugned notifications, issued by the District Collectors, is to the initial fixation of shops, by the Commissioner on 12.07.2012, in an area/locality. The distinction, between fixation of shops in an area/locality and relocation of an undisposed shop, must be borne in mind. While the initial exercise undertaken by the Commissioner under Rule 4 is to fix the total number of 6596 shops, stipulated in the Excise Policy of the Government for the entire State, in different areas/localities of the State, the exercise of power to relocate undisposed shops is restricted only to those shops for which no licences were renewed/granted for the Excise Year 2013-14. It is only because the shops, hitherto fixed in an area/locality, were not disposed of (for which either no licences were granted or renewed) are they now sought to be relocated. In Shaktikumar M. Sancheti v. State of Maharashtra[15], the Supreme Court considered the scope of the words “local area” under the Motor Vehicles Taxation Act and observed that the expression “local area” must be understood in the sense of any area administered by a local body. I n C.P. Sikh Regular Motor Service v. State of Maharashtra[16], the observations of the Supreme court were in the context of Section 2(1) of the Motor Vehicles Act, 1939 as inserted by Act 56 of 1969 whereby ‘area’, in relation to any provision of said Act, was defined to mean such area as the State Government may, having regard to the requirements of that provision, specify by notification in the Official Gazette. The definition of “local area” under the Motor Vehicles Taxation Act, and “area” under the Motor Vehicles Act, cannot be extrapolated to the 2012 Rules. The amended Rule 4 refers merely to the area/locality where the un-disposed shop was hitherto located. It does not specify the area/locality to which the un-disposed A-4 shop should be relocated. Even if the words “area” or “locality” is read to mean a town/village or a part thereof, the amended Rule 4 does not prohibit relocation of an un-disposed A-4 shop to an area/locality where an A-4 shop licence has already been granted. The meaning to be given to the words “area” or “locality” is, therefore, of no consequence. While the Excise Policy for 2013-14 places restrictions on relocation of an undisposed shop, from a higher population slab to a lower population slab, it does not prohibit an undisposed shop from being re-located in an area/locality where an A-4 shop is in operation. The population ratio of a village/municipality/municipal corporation is relevant only for fixation of the licence fee, and has no bearing on the relocation of an undisposed shop. The petitioners’ contention that the number of shops fixed in an area/locality, when the notifications were issued in July, 2012, cannot be increased subsequently is not tenable as such a power inheres, under the amended Rule 4 of the 2012 Rules, in the Commissioner. V. DISTINCTION BETWEEN THE EXERCISE OF POWER UNDER THE AMENDED RULE 4 AND RULE 18: It is contended on behalf of the petitioners that the rule making authority was conscious of the difference between an “area” or “locality” as referred to in Rule 18(1), and the words “any where in the State” as referred to in Rule 18(2); an area/locality is the basis for fixation of shops, and power must be exercised under Rule 4 for each area; and the very fact that the words “anywhere in the state” has not been used in the amended Rule 4 goes to show that undisposed A-4 shops can only be relocated within the same district, and not beyond. The power of the District Collector, under Rule 18(1) of the Rules, to permit APBCL to open outlets to sell IMFL and FL is circumscribed by the requirement of obtaining approval of the Commissioner. Exercise of such a power is limited only to such areas/localities where (i) the privilege of sale of shops could not be disposed of through selection; or (2) when a licence already granted is cancelled and the said shop could not be re-allotted for any reason. As the jurisdiction of the District Collector is confined to a “district” and not beyond, his power to permit APBCL to open outlets is not only confined to the district of which he is the Collector but also, as is clear from the use of the word “such”, to the very same area where the licence granted earlier was cancelled, or no licence was granted, that too only with the approval of the Commissioner. On the other hand the Commissioner’s power under Rule 18(2), to permit APBCL to open outlets, is neither limited by any area/locality restrictions nor is his power confined only to grant of permission in such places where an A- 4 shop licence could not be disposed of or where a cancelled licence could not be re-allotted. The only limitation on his power is his satisfaction that granting such permission is in public interest. The words “anywhere in the State” were used in Rule 18(2) only to distinguish the powers conferred on the District Collector and the Commissioner. While the power of the District Collector under Rule 18(1) is confined to the area/locality in the District, the power of the Commissioner under Rule 18(2) is not. Unlike Rule 18(1) which is confined to outlets being opened by the APBCL, no power is conferred under the 2012 Rules on the District Collector to relocate an un-disposed A-4 shop by grant of a licence. While Rule 18(2) enabled him to permit APBCL to open outlets anywhere in the State, the Commissioner, hitherto, lacked the power to relocate un-disposed A-4 shops from a certain area/locality to another. Such a power is now conferred on the Commissioner by the amended Rule 4. Consequent to Rule 4 being amended, the Commissioner not only has the power to permit APBCL to open outlets anywhere in the State, he also has the power to relocate un-disposed A-4 shops from any area/locality as he thinks fit to another. V I . DISTINCTION BETWEEN SHIFTING OF AN A-4 SHOP IN TERMS OF RULE 28 AND RELOCATION OF AN UNDISPOSED A-4 SHOP IN TERMS OF THE AMENDED RULE 4: It is contended on behalf of the petitioners that the words “shifting” and “relocating” mean the same; relocation of shops under Rule 4 can only be in accordance with the proviso to Rule 28(3); and the very fact that the rule making authority has neither amended Rule 28(3), nor has the word “district” been used in Rule 4, can only mean that the words “area/locality” in Rule 4 covers an area within the same mandal, and not beyond. Rule 28 of the 2012 Rules empowers the Commissioner to permit a licensed premises to be shifted either within a notified area or beyond a notified area but within the same Mandal or Municipality or Municipal Corporation. Unlike Rule 28, which relates to a licensed premises (ie an A-4 shop for which the licence has been renewed for the Excise Year 2013-14), power is conferred under the amended Rule 4 only to relocate those A-4 shops for which licences have not been granted or renewed for the Excise Year 2013-14. The power conferred under the amended Rule 4 to relocate an un-disposed shop is not fettered, unlike under Rule 28, by any “area” restrictions. The distinction between the amended Rule 4 and Rule 28 can be explained by way of an illustration. Let us say, for example, two A4 shops were fixed for grant of licences in “X” municipality. However licence was granted only in respect of one shop, and the other shop remained un-disposed. While a request made by a licensee, for shifting the shop for which a licence was granted in his favour, can be considered in terms of Rule 28 only within the area limits of “X” Municipality, the power to relocate the other A-4 shop, which remained un-disposed, is not confined to the area limits of “X” Municipality. The only limitation placed by the Excise Policy for the year 2013-14, on relocation of an un-disposed A-4 shop, is that it should be from an area to another within the same population slab or from a lower population slab to a higher population slab. V I I . POWER OF THE COMMISSIONER TO RELOCATE AN UNDISPOSED A-4 SHOP, HITHERTO FIXED IN A SCHEDULE AREA, TO A NON-SCHEDULE AREA: It is contended, on behalf of the petitioners, that Rule 4 does not empower the Commissioner to relocate shops, situated in scheduled areas, to non-scheduled areas; under Rule 5(1)(i) shops to be located in scheduled areas are separately listed and serially numbered; and shops in the scheduled areas cannot be relocated to non-scheduled areas unless the Commissioner deletes it from the said list, and includes it in the list of “plain areas”. Rule 2(t) of the 2012 Rules defines “Scheduled Area” to mean the Scheduled Areas notified under para 6 of the V Schedule to the Constitution. Rule 3(2) stipulates that, in the case of shops located in scheduled areas, the right to sell IMFL and FL in retail shops shall be granted to local scheduled tribe candidates; in case there is no such applicant available, it should be granted to any other scheduled tribe candidate; and, if not available, to any other candidate. The notification, under Rule 5(1), is required to separately list the shops to be located in scheduled areas, and for their being serially numbered, to make the applicants aware that licences, to sell IMFL and FL in such shops, would be granted only to the local scheduled tribes. Section 4 of the Panchayats (Extension to the Scheduled Areas) Act, 1996 stipulates that, notwithstanding anything contained under Part IX of the Constitution, the Legislature of a State shall not make any law under that Part which is inconsistent with any of the features mentioned in the clauses thereunder. Clause [c] of Section 4 requires every village to have a Gram Sabha consisting of persons whose names are included in the electoral rolls for the Panchayat at the village level. Clause (d) provides that every Gram Sabha shall be competent to safeguard and preserve the traditions and customs of the people, their cultural identity, community resources and the customary mode of dispute resolution. Clause (m) (i) stipulates that, while endowing Panchayats in the Scheduled Areas with such powers and authority as may be necessary to enable them to function as institutions of self government, a State Legislature shall ensure that the Panchayats, at the appropriate level, and the Gram Sabhas are endowed specifically with the power to enforce prohibition or to regulate or restrict the sale and consumption of any intoxicant. The Andhra Pradesh Panchayat Raj Act, 1994 was amended by the Andhra Pradesh Panchayat Raj (Amendment) Act, 1998. Section (2A), inserted thereto, stipulates that in their application to the Scheduled Areas in the State, as referred to in clause (1) of Article 244 of the Constitution of India, the remaining provisions of the Act shall apply subject to the provisions of Part VI-A of the Act. Part VI-A contains special provisions relating to the Panchayats, Mandal Parishads and Zilla Parishads located in the Scheduled Areas. Under Section 242-C (1), every Gram Sabha shall be competent to safeguard and preserve the traditions and customs of the people, their cultural identity, community resources and, without detriment to any law for the time being in force, the customary mode of dispute resolution. Section 242-I(1)(a) stipulates that the Gram Panchayat or, as the case may be, the Gram Sabha shall exercise such powers and perform such functions in such manner and to such extent as may be prescribed in respect of the enforcement of prohibition or regulation or restriction of the sale and consumption of any intoxicant. In the exercise of the powers conferred under Section 268(1) r/w. Sections 242-A to 242-I under Part VI-A of the Act, the Andhra Pradesh Panchayats Extension to Scheduled Areas (PESA) Rules, 2011 were made and notified in G.O.Ms. No.66 dated 24.03.2011. Rule 8(I)(b) requires the Gram Sabha to be consulted before the grant of any licence to open liquor shop in the village; for the Gram Sabha to convey its opinion, in the form of a resolution, within four weeks; and for licences to be granted only to the local Scheduled Tribes. Rule 8(I) (c) requires the department to issue a speaking order for granting or not granting any licence to open liquor shop/bar in the village under intimation to the concerned Gram Sabha, and that the Gram Sabha resolution shall be binding and final. In view of the aforesaid provisions, it is only if the Gram Sabha passes a resolution, permitting grant of a licence to open an A-4 to sell IMFL and FL in scheduled areas, can such licenses be granted. While the aforesaid provisions restrict opening of A-4 shops in schedule areas, and for relocation of an A-4 shop from a non- scheduled area to a scheduled area, neither the aforesaid provisions nor Rule 5(1)(i) of the Rules prohibit relocation of an un-disposed shop from a scheduled area to a non-scheduled area. VIII. THE AMENDED 2012 RULES CAME INTO FORCE ON ITS PUBLICATION IN THE A.P. GAZETTE ON 24.06.2013: Section 72(1) of the Act enables the Government, by notification, to make rules for carrying out all or any of the purposes of the Act. Section 2(23) of the Act defines “notification” to mean a notification published in the A.P. Gazette. There is no presumption that the public would be aware of subordinate legislation as soon as it is made. The principle that there can be no law that is not published or promulgated is as true a principle of justice and fair play as principles of natural justice. The idea that a person may be governed by a law that cannot be known by him because it is not published or promulgated is revolting to judicial conscience and civilised thought. (R. Narayana Reddy v. The State of A.P. by the Secretary, Home[17]). Before a law can become operative, it must be promulgated or published. It must be broadcast in some recognisable way so that all men may know what it is or, at the very least, there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence. Promulgation or publication of some reasonable sort is essential. (Harla v. State of Rajasthan[18]; T. Narasimhulu v. State of A.P.,[19]). The object of publication is to enable the public to acquire knowledge. (Tirumala Devi Eada v. State of Andhra Pradesh[20]; B.K. Srinivasan v. State of Karnataka[21]; Sonic Industries, Rajkot v. Municipal Corporation of the city of Rajkot[22]; Harla18). Where a law, whether parliamentary or subordinate, demands compliance, those that are governed must be notified of the law and all changes and additions made to it by various processes. Whether law is viewed from the standpoint of the ‘conscientious good man’ seeking to abide by the law or from the standpoint of Justice Holmes ‘unconscientious bad man’ seeking to avoid the law, the law must be known, that is to say it must be so made that it can be known. Subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It will then take effect from the date of such publication or promulgation. (B.K. Srinivasan21; Pankaj Jain Agencies v. Union of India[23]; Sonic Industries22; Harla18). When a statute vests a public power and conditions the manner of exercise of that power then the law insists on that mode of exercise alone. (Charles K. Skaria v. C. Mathew (Dr)[24]). Where the law prescribes the mode of publication of the law to become operative, the law must be published in that mode only. Where the statutory requirement of the mode or form of publication is mandatory, a failure to comply with those requirements might result in there being no effective order or rule, but where the mode of publication of the law is not prescribed by the law, such law should be published in some usual or recognised mode to bring it to the knowledge of all persons concerned. (State of Maharashtra v. Mayer Hans George[25]; T. Narasimhulu19). The mode of publication, prescribed under Section 72(1) of the A.P. Excise Act, is by way of a notification in the A.P. Gazette. “Notification”, in common english acceptation, means and implies the formal announcement of a legally relevant fact and in the event of a statute speaking of a notification being published in the official gazette, it cannot but mean a notification published by authority of law in the official gazette. Once the Rules are published in the Official Gazette they shall be deemed to have been published, and to be effective. (Subhash Ramkumar Bind v State of Maharashtra[26]; M.K. Rajasekhar v. Government of A.P.[27]). The amendment to the 2012 Rules, notified in G.O.Ms. No.357 dated 22.06.2013, was published in the A.P. Gazette on 24.06.2013 and, on such publication, the general public has been made aware of these Rules having been made. The amended 2012 Rules thus came into force on 24.06.2013. IX. HAS THE AMENDED RULE 4 BEEN GIVEN RETROSPECTIVE EFFECT? It is contended on behalf of the petitioners that, when licences were granted to them in the year 2012, there was no statutory rule or provision for relocation of an undisposed shop; even the renewal endorsement in the year 2013-14 does not refer to the possibility of relocation of other shops; licenses granted to the petitioners for the Excise year 2012-13, following the policy then in existence, cannot be changed as the licences were merely renewed and not issued afresh; the amended Rule 4 cannot be made applicable retrospectively to licences granted on 01.07.2012; and the exercise of relocation of undisposed shops should have been undertaken, if at all, before the licences were renewed and not thereafter. Para 4 of the 2012-13 Excise Policy stipulates that the period of licence shall be for one year. The one year period, for which the licence was originally granted, was from 1st July 2012 till 30.06.2013. For the second year 2013-14 the licensee was only entitled to have his request for renewal of the licence considered in terms of the Excise policies for the years 2012-13 and 2013-14. Rule 21 of the 2012 Rules provides that a licence granted under the Rules, for the period from 1st July, 2012 to 30th June, 2013 or part thereof, shall be considered for renewal for the period 1st July, 2013 to 30th June, 2014 subject to the applicant completing all formalities stipulated thereunder. The amendment made, by G.O.Ms. No.357 dated 22.06.2013, is to the 2012 Rules and, on its coming into force, forms part of the 2012 Rules which, in terms of Rule 21, necessitate compliance for grant of renewal of a licence. The original licence for the Excise Year 2012-13, which is a binding contract between the petitioners and the State, is only for one year and came to an end on 30th June, 2013. The renewed A-4 licence is a fresh contract between the petitioners and the State for a period of one year from 01.07.2013 till 30.06.2014. The licences for the Excise year 2013-14 were renewed, and a new contract was entered into between the petitioners and the State on or after 01.07.2013, in accordance with the amended Rules which came into force on 24.06.2013 prior to the commencement of the Excise Year 2013-14 on 01.07.2013. Neither the Act nor the Rules stipulate that the amended Rules would come into force only on each licensee being intimated thereof. The mere fact that the renewal endorsement on the petitioners licence does not refer to the amended rule is of no consequence, as the licensees are presumed to have knowledge of the Rules which were notified and published in accordance with law. As the amended rules have been made applicable only for renewal of licences for the Excise Year 2013-14, the contention that the amended Rule 4 has been applied retrospectively is not tenable. Reliance placed, on behalf of the petitioners, on State of A.P. v. Guntakal Toddy Tappers Coop. Society[28] is misplaced. In Guntakal Toddy Tappers Co-op Society28, the Supreme Court held:- “…..The net position, therefore, is that upto September 30, 1982, under the original Rule 3 annual leases were being granted following public auction. A five year basis was adopted under the newly introduced proviso to Rule 3 in respect of Tappers Cooperative Societies but at the end of one year out of the term of five years, there was a reversal of the policy and annual settlements were again adopted. That again was changed and a three year basis was adopted at the end of the year. It gives us a very uneasy feeling that the State has dealt with the Tappers Cooperative Societies, with whom contracts had been entered into, in such a cavalier fashion. If the State’s intention was really to earn more revenue and, with a view to protecting the interests of the State Exchequer, there was a deviation from the policy of settlement for five years with the Tappers Societies to the old scheme of one year, there could be no warrant for the adoption of a three year basis. At this juncture, counsel for respondents readily agreed to increase of the fee payable by each of them under the contracts entered into in 1982 valid for five years taking into consideration the general rise in prices and the corresponding rise in auction money fetched in other districts in respect of settlement of excise shops. It was also pointed out to us by counsel for respondents that in respect of three of the Tappers Societies out of four — exception being the Society in Guntakal District, the Societies have been running the shops not as lessees but as agents of the State. Learned counsel for the State told us that in regard to Guntakal no arrangement at all has been made during the current excise year. We are of the view that the State should not have interfered with the existing rights of the Tappers Societies and if it wanted to bring in a change, effect should have been given to such change only after the existing contracts with the respondent Societies came to terminate by efflux of time…….”. (emphasis supplied) Unlike in Guntakal Toddy Tappers Co-op Society28, where the Rule was amended when the five year license period was in operation, Rule 4 has been amended and applied for the Excise year 2013-14 (i.e., from 01.07.2013 to 30.06.2014) only after the one year license, granted for the Excise year 2012-13, expired on 30.06.2013. X. CAN RESTRICTIONS BE PLACED, ON A LICENCE GRANTED TO CARRY ON TRADE IN LIQUOR, ONLY BY PLENARY LEGISLATION AND NOT SUBORDINATE: It is contended, on behalf of the petitioners, that a property right cannot be affected by way of Rules and Executive Instructions; the authority of law, within the meaning of Article 300-A, is a law made by legislative authority; the word 'law', in the context of Article 300-A, must mean an Act of Parliament or of a State Legislature; the State or its Executive Officers cannot interfere with the rights of others unless a specific rule of law authorizes their acts; \"Every act done by the Government or by its officers must, if it has to operate to the prejudice of any person, be supported by legislative authority\"; the respondents have usurped power not vested in them under the Act and the Rules; the power so usurped will militate against the very scheme and intendment of the Excise statute, interfering and even destroying the existing legitimate contractual rights with the State, without compensation; and this would result in violation of Articles 14, 300-A and 19(1)(g) of the Constitution of India as it would be in violation of Sections 17, 23, 28, 32 and 33 of the Act. Reliance placed, on behalf of the petitioners, on Bishambhar Dayal Chandra Mohan v. State of U.P.,[29]; State of M.P. v. Thakur Bharat Singh[30]; Satwant Singh Sawhney v. Ramarathnam, Assistant Passport Officer, Government of India, New Delhi[31] and Smt Indira Nehru Gandhi v. Raj Narain[32], to contend that the State or its executive officers cannot interfere with the rights of others unless they can point to some specific rule of law which authorises their acts; the State or its officers may not, in the exercise of executive authority, without any legislation in support thereof, infringe the rights of citizens merely because the legislature of the State has the power to legislate in regard to the subject on which the executive order is issued; and every act done by the Government or by its officers must, if it is to operate to the prejudice of any person, be supported by some legislative authority; is misplaced. In Bishambhar Dayal Chandra Mohan29 the scope and extent of the executive power of the State, under Article 162 of the Constitution of India, in relation to trade and commerce in, and the production, supply and distribution of, food stuffs arose for consideration. In Smt. Indira Nehru Gandhi32, the validity of Article 329-A of the Constitution of India, and certain provisions of the Representation of the People Act, 1951, were in issue. In Thakur Bharat Singh30, the validity of an order, made in the exercise of the powers conferred by Section 3 of the Madhya Pradesh Security Act, 1959, was under challenge. I n Satwant Singh Sawhney31, the validity of the action of the Regional Passport Officer, in calling upon the petitioner to surrender both his passports to the Government, was under examination. None of these judgements relate to the executive power of the State to control and regulate trade in liquor. Even if the “license” granted in the petitioners favour is presumed to be a proprietary right, restrictions on the right of a licensee to carry on trade in liquor can be imposed by subordinate legislation or even executive instructions. There is nothing in clauses (2) to (6) of Article 19 which makes it imperative to impose restrictions on trade or business in potable liquor only by a law enacted by the legislature. Restrictions can also be imposed by subordinate legislation as long as it is not violative of any provisions of the Constitution. The trade or business in potable liquor is a trade or business in res extra commercium and, hence, can be regulated and restricted even by an executive order. (Khoday Distilleries Ltd. v. State of Karnataka[33]). The contention that the power to relocate undisposed A-4 shops, from an area/locality to another, can only be conferred by plenary legislation, and not subordinate, does not, therefore, merit acceptance. X I. IS THE PETITIONERS RIGHT OF EXCLUSIVE PRIVILEGE, TO SELL IMFL AND FL IN AN AREA, VIOLATED ON RELOCATION OF UNDISPOSED A-4 SHOPS TO THESE AREAS? Learned Counsel for the petitioners would contend that, Section 17 to 23 and 28 deals with parting of exclusive privilege vested in State; the distinction between “privilege to sell” and “exclusive privilege to sell in an area” in Sections 13 and 17 should be borne in mind; once the right to carry on business has been conferred by the State, after collecting the prescribed licence fee, no fetters can be placed, or an embargo imposed, on the privilege conferred on the licencees; the parting of exclusive privilege for consideration in such area/locality as the Commissioner may fix for sale by notification, and the licence granted over such an area, is an exclusive privilege granted to the contractor to the debarment of others from articulation in the said area, as a particular right or favour by law contrary to the general law, or else it is not a privilege much less an exclusive privilege granted under the Act; the State cannot claim a right over such an area/locality for granting further licences until the existing contract is terminated or expires by efflux of time; grant of exclusive privilege for an area creates a binding contract and a vested right in a licensee, to the exclusion of all others in the licensed area, for the excise year; the substantive right conferred on the petitioners under Section 17, on licenses being granted in their favour, was renewed during the current year under Rule 21; t h i s substantive right is affected, in terms of sales, on undisposed shops being relocated in their area, causing them considerable prejudice; new conditions cannot be imposed varying the subsisting contract with the petitioners who were granted exclusive privilege under Section 17; once areas/localities are demarcated by the Commissioner under Rule 4, sold to bidders for a consideration, and licenses are granted, there is a \"concluded contract\" between the State and the citizen/contractor; the statutory right of a licensee, under Section 23 of the Act, cannot be undermined; a shop can be relocated only to an area where no shops were licensed earlier; there was no provision in the Act or the Rules earlier for shifting or relocating an A-4 shop to an area in which exclusive privilege was already conferred; and the impugned action of the Commissioner, to relocate undisposed shops from other areas into the petitioners' area over which they have exclusive privilege, is contrary to law, illegal and without jurisdiction. Trade in liquor is not a fundamental right. It is a privilege of the State. The State parts with this privilege for revenue considerations. (Devans Modern Breweries Ltd2; Kerala Samsthana Chethu Thozhilali Union v. State of Kerala[34]). The State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. When the State permits trade or business in potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any. (Khoday Distilleries Ltd.33). Section 17(1)(v) of the Act enables the Government, subject to the provisions of Sections 28 and any rules made in this behalf and subject to such conditions as they may deem fit to impose, to grant for a fixed period, to any person at any place, a lease/licence for the exclusive privilege of selling Indian Made Foreign Liquor (IMFL) and Foreign Liquor (FL) by shop. Section 17(2) empowers the Government to prescribe, from time to time, different methods of selection for grant of exclusive privilege for different purposes under Section 17(1). Section 17(3) stipulates that, notwithstanding anything contained in sub-section (1), a lease/licence in respect of a shop may be granted for a period not exceeding two years at a time. What do the words “Exclusive Privilege”, used in Section 17(1) of the Act, mean? The word “Exclusive” is defined in “Law Lexicon of R a m a n a t h a I y e r ” to mean possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment, undivided, sole(as exclusive) possession; not including, admitting or pertaining to any other; opposed to inclusive, not to be taken in to account. In Blacks Law Dictionary, the word “exclusively” is shown to have multiple nuances or shades of meanings such as only or solely or substantially all or for the greater part. It also means to the exclusion of all others. (CBI v. Braj Bhushan Prasad[35]; Anoka County v. City of St. Paul[36]). The word “Privilege”, as commonly used in its broad and commonly accepted sense, means a particular advantage or a personal benefit or favour and a private or personal favour enjoyed. It also means a particular and peculiar benefit or advantage enjoyed by a person beyond the common advantage of other citizens; and some particular right or favour granted by law contrary to the general rule. The doctrine of Noscitur a sociis (meaning of a word should be known from its accompanying or associating words) has relevance in understanding the import of words in a statutory provision. (Bangalore Water Supply & Sewerage Board v. A Rajappa[37]; Rohit Pulp and Paper Mills Ltd. vs. CCE[38]; Oswal Agro Mills Ltd. vs. CCE[39]; K. Bhagirathi G. Shenoy v. K.P. Ballakuraya[40]; Lokmat Newspapers (P) Ltd. v. Shankarprasad[41]; Braj Bhushan Prasad35). On application of the said doctrine, and reading both the words “Exclusive” and “privilege” together, the term “exclusive privilege” can only mean a privilege granted to a person to the exclusion of all others. However a lease/licence for such “exclusive privilege” is, by Section 17(1) itself, made subject to Section 28 of the Act, the Rules made thereunder and the conditions which the Government may deem fit to impose. The expression “subject to” conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. (South India Corpn. (P) Ltd. v. Secy., Board of Revenue, Trivandrum[42]; Chandavarkar Sita Ratna Rao v. Ashalata S. Guram[43]). The operative part of Section 17(1) is prefaced by the words \"subject to the provisions of Section 28, any rules made in this behalf and such conditions as the government may deem fit to impose”, which means that the exclusive privilege granted by the State must yield to the provisions of Section 28 of the Act, any rules made in this behalf, and such conditions as the government may deem fit to impose. (Indian Minerals Co. v. N.I.L.M. Assos.[44]). The power conferred on the Government, under Section 17(1) (v) of the Act, to grant an exclusive privilege to any person to sell IMFL and FL in a shop is subject to (1) the provisions of Section 28 of the Act; (2) any Rules made in this behalf; and (3) any conditions which the Government may deem fit to impose. Section 28(1) requires every permit/licence to be issued or granted on payment of such fees, for such period, subject to such restrictions and conditions, to be in such form and to contain such particulars as may be prescribed. Section 2(26) of the Act defines ‘prescribed’ to mean prescribed by Rules made under the Act. The 2012 Rules were made in the exercise of the powers conferred by Section 72 r/w. Sections 17, 28 and 29 of the Act. Rule 1(4) of the 2012 Rules makes these rules applicable for grant of licence for selling IMFL and FL in retail by shop, the conditions governing such licence, and the transport of IMFL and FL by such licence holders. The Rules, subject to which exclusive privilege was granted to the petitioners for the Excise Year 2013-14 (i.e, from 01.07.2013 to 30.06.2014), are the 2012 Rules as amended by G.O.Ms.No.357 dated 22.06.2013. The conditions imposed by the Government, to which the exclusive privilege granted to the petitioners are subject to, are those stipulated in the Excise Policy for the year 2012-13 as notified in G.O.Ms.No.390 dated 18.06.2012, and for the Excise Year 2013-14 as notified in G.O.Ms.No.358 dated 22.06.2013. The power conferred on the Commissioner, under Rule 4 of the Rules, is subject to such directions which the Government may issue from time to time. Para 5 of the Excise Policy, formulated by the Government for the Excise year 2012-13, stipulates that the number of retail shops shall be retained at the present level i.e., 6596. The Commissioner was, therefore, not entitled to increase the total number of retail shops in the State beyond the 6596 shops fixed by the Government. The State can adopt any reasonable mode of selling licences for trade or business with a view to maximise its revenue. (Khoday Distilleries Ltd.33). The State Government’s exclusive privilege, or right to carry on certain activities in liquor, are given or sold by it to a private person under a licence for the amount receivable under the Act and the Rules. Such an amount constitutes the consideration for the licence and is termed as a ‘licence fee’. The term ‘licence fee’ connotes the idea of it being the consideration in money receivable by the Government from a private person by grant of a licence, for parting in such person’s favour, its exclusive privilege or right of carrying on certain activities in respect of liquor. (State of U.P. v. Sheopat Rai[45]). The issuance of a liquor licence constitutes a contract between the parties i.e. between Excise Authorities on the one hand and the individual applicant-contractor on the other. (Devans Modern Breweries Ltd.,2). However the said contract has, by law, been made subject to the amended 2012 Rules and the Excise Policy of the year 2013-14. Notwithstanding the exclusive privilege granted to the petitioners, to sell IMFL and FL in the stipulated areas/localities, un- disposed A-4 shops can be relocted in accordance with the amended 2012 Rules and the Excise Policy for the year 2013-14. Reliance placed by the petitioners on Sections 13 and 21 to 23 of the Act is misplaced. Section 13 of the Act relates to manufacture and bottling of liquor for sale and has no application to sale of IMFL and FL in an A-4 shop. Section 21 enables the Government to levy excise duty or/and a countervailing duty on any excisable article manufactured or produced in the State, and Section 22 prescribes the modes in which excise duty and countervailing duty may be levied on any excisable article. Section 23(1) stipulates that, instead of or in addition to any excise duty or fees leviable under Sections 21 and 22, the Commissioner may accept payment of a sum in consideration of the grant of licence or both for the exclusive privilege in respect of liquor or any other intoxicant under Section 17. Section 23 relates merely to the consideration for the lease or licence for grant of exclusive privilege under Section 17 and, as Section 17 itself makes the lease/licence for grant of exclusive privilege subject to Section 28, the Rules made in this behalf and the conditions which the Government may deem fit to impose, the petitioners cannot claim exclusive privilege either under Section 17 or Section 23 of the Act contrary to the amended 2012 Rules and the Excise Policy for the year 2013-14. X I I . STATUTORY RULES ARE PRESUMED TO BE CONSTITUTIONALLY VALID: It is contended, on behalf of the petitioners, that the power to make rules can only be exercised to make rules consistent with the Act and not contrary thereto; relocation of shops from one district to another, and from one zone to another, is ultra-vires Rule 4 as it is not in relation to an “area” or a “locality”; and any unreasonable rule or condition, in the excise contract licence, is ultra vires the Act. It is no doubt true that the power of delegated legislation can be exercised to give effect to, and must be in conformity with, the provisions of the Act. (Kerala Samsthana Chethu Thozhilali Union34). The vires of the amended Rule 4 of the 2012 Rules has not been subjected to challenge in this batch of Writ Petitions. Judicial restraint is in order while judging the constitutional validity of statutes and delegated legislation. There is a presumption in favour of the constitutionality of both statutes and delegated legislation, and it is only when there is a clear violation of a constitutional provision (or of the parent statute, in the case of delegated legislation) beyond reasonable doubt that the court should declare it to be unconstitutional. (Hinsa Virodhak Sangh v. Mirzapur Moti Kuresh Jamat[46]; Govt. of A.P. v. P. Laxmi Devi[47]). The Courts must presume that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience, that its discriminations are based on adequate grounds, and that the legislature is free to recognise degrees of harm, and confine its restrictions to those cases where the need is deemed to be the clearest. (Mohd. Hanif Quareshi v. State of Bihar[48]; Nagaland Senior Govt. Employees Welfare Assn. v. State of Nagaland[49]; Mahant Moti Das v. S.P. Sahi[50]; A.C. Aggarwal, Sub-Divisional Magistrate, Delhi v. Ram Kali[51]). The statutory provision must be interpreted and read broadly, and not narrowly. The approach must be to uphold the validity of the impugned delegated legislation by a process of fair and broad reading of the statutory mandate. (Devans Modern Breweries Ltd.,2). It would be wholly inappropriate for this Court, therefore, to examine the validity of the amended Rule 4 on the basis of submissions made across the bar. XIII. BURDEN LIES HEAVILY ON THE PERSON, WHO SEEKS TO IMPEACH THE RULE, TO PLEAD AND PROVE THAT IT IS UNCONSTITUTIONAL: The contention that Rule 4 is ultra vires the Act, and Article 14 of the Constitution, is without support of any pleadings in the Writ Petitions. It is well settled that, even in cases where there is a challenge to the validity of a statutory rule, the burden is on the party, who seeks to impeach the validity of a rule made by a competent authority on the ground that the rules offend Article 14, to plead and prove that there has been a clear violation of the constitutional principles. If the validity of the rule is challenged on the ground either of its unreasonableness or its discriminatory nature, the petitioners ought to have laid a foundation for it by setting out the facts necessary to sustain such a plea and adduce cogent and convincing evidence, for there is a presumption that every factor which is relevant or material has been taken into account in formulating the classification. (State of U.P. v. Kartar Singh[52]; K.B. Nagur v. Union of India[53]; Nagaland Senior Govt. Employees Welfare Assn.49). The action of governmental authorities must be presumed to be reasonable and in public interest and the person assailing it must plead and prove the contrary. (Fertilisers and Chemicals Travancore Ltd. v. Kerala SEB[54]; Nagaland Senior Govt. Employees Welfare Assn.49). Courts must be slow to embark upon an unnecessary, wide or general enquiry, and confine their decision within the narrow limits required on the facts of a case. Decisions, on questions of constitutionality, should not be taken unless such adjudication is unavoidable; and the policy of strict necessity must be followed in disposing of a constitutional issue. (K.B. Nagur53). X I V . IS THE ACTION OF THE COMMISSIONER, IN RELOCATING UNDISPOSED A-4 SHOPS TO AREAS WHERE THE PETITIONERS SHOPS ARE LOCATED, DISCRIMINATORY? It is contended that the petitioners have been discriminated against as the A-4 shops in other districts, and in scheduled areas, are now being relocated to areas/localities where they are running their A- 4 shops; the turnover in each A-4 shop for the year 2012-13 was taken into consideration to determine the areas/localities where undisposed A-4 shops should be relocated; under Rule 16(1), the license fees are proportionality reduced for new entrants; no shop has been relocated in areas where the turnover of the A-4 shop is 13 times or below; on shops being relocated, the turnover of the existing licensees would fall below the turnover of the A-4 shops whose turnover is 13 times the license fee; failure to relocate undisposed shops, in areas where the turnover is 13 times, would also result in discrimination; and a new A-4 shop should not be established in their area, in the middle of an excise year, more so as the Government would not get any extra monetary benefit. Article 14 forbids class legislation, and not a reasonable classification. What is forbidden is discrimination. Persons similarly situated must be similarly treated. Where, however, the persons are not similarly situated, there is no prohibition to treat them separately, provided of course there is a reasonable nexus between the basis of classification and the object to be achieved. (K. Muthusamy v. Government of Tamilnadu[55]). Every instance of discrimination does not necessarily fall within the ambit of Article 14 of the Constitution. Discrimination means an unjust and unfair action in favour of one and against another. It involves an element of intentional and purposeful differentiation and unfavourable bias; an unfair classification. (Rajasthan State Industrial Development & Investment Corporation v. Subhash Sindhi Coop. Hs. Society[56]; The State of M.P. v. Narmada Bachao Andolan[57]; Madhu Kishwar v. State of Bihar[58]). A valid classification based on a just objective is truly a valid discrimination. The result to be achieved by the just objective presupposes the choice of some for differential consideration/treatment over others. Legalistically, the test for a valid classification may be summarized as a distinction, based on a classification founded on an intelligible differentia, which has a rational relationship with the object sought to be achieved. (Kallakkurichi Taluk Retired Officials Assn. v. State of T.N.[59]). Classification must be truly founded on substantial differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved. (State of Maharashtra v. Indian Hotel & Restaurants Assn.[60]; State of Jammu and Kashmir v. Shri Triloki Nath Khosa[61]). To pass the test of permissible classification two conditions must be fulfilled, namely, (i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (ii) the differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases. What is necessary is that there must be a nexus between the basis of classification and the object of the provision under consideration. (Indian Hotel & Restaurants Assn.60; Budhan Choudhry v. State of Bihar[62]). Rule 16(9) of the 2012 Rules required a licensee to pay privilege fee at 8%, plus applicable Value Added Tax (VAT) thereon, on the sale price of IMFL and FL purchased from APBCL where the cumulative value of purchases, during the licence period, exceeded six times the annual licence fee. The “six times”, prescribed under the 2012 Rules, was enhanced to “seven times” on Rule 16(9) being amended by G.O.Ms. No.357 dated 22.06.2013. While all licencees are required to pay the annual licence fee or the proportionate licence fee as stipulated in Rule 16(1) and its proviso, a privilege fee is levied only when the cumulative purchases of IMFL and FL by the licensee, during the Excise Year, exceeds seven times the annual licence fee. If his cumulative purchases for the Excise Year are less than seven times the annual licence fee, the licensee is not required to pay the privilege fee. Implicit in Rule 16(9) is that the Rule making authority considered the profit earned on cumulative purchases of IMFL and FL by the licensee, upto seven times the annual licence fee, as a reasonable return on their investment. By the impugned notifications, undisposed A-4 shops were sought to be relocated only to areas/localities where the cumulative purchases of each A-4 shop, during the Excise year 2012-13, exceeded fourteen times their licence fee. The licensees, whose turnover exceeded fourteen times the annual licence fee in the previous Excise Year 2012-13, form a distinct class, different from those who did not achieve a turnover of fourteen times the licence fee. The object sought to be achieved by relocation of shops only to such areas is two fold. Firstly, to generate more revenue for the State and, secondly, to ensure that, even after relocation, both the existing and the relocated A-4 shops achieve, on an average, a turnover of seven times the annual licence fee and, thereby, achieve a reasonable return on their investment. The contentions that, as the turnover is not uniform throughout the year, the monthly turnover should have been taken as the basis; the turnover from 1st July to 30th November, 2013 should also have been taken into consideration before deciding on which shop should be relocated; as the licence fee is correlated to population, the population figures should have been factored, while identifying areas/localities for relocation of undisputed A-4 shops; all shops, whose turnover exceeds 14 times, should have been arranged in a descending order, and notified in seriatum; a chronological order should have been followed, and shops should have firstly been relocated in areas where the turnover is the highest; leaving big mandals, and proceeding against smaller ones, violates Article 14 of the Constitution of India; and if the State intends to raise revenue, and dispose of un-disposed shops, they should reduce the basis of the number of times turnover; are not tenable. Classification, to be valid under Article 14, need not necessarily fall within an exact or a scientific formula for exclusion or inclusion of persons or things. There is no requirement of mathematical exactness or for doctrinaire tests to be applied for determining the validity, as long as it is not palpably arbitrary. (Indian Hotel & Restaurants Assn.60; Ram Krishna Dalmia v. S.R. Tendolkar[63]; Welfare Association, A.R.P. v. Ranjit Pl.Gohili[64]; Shashikant Laxman Kale v. Union of India[65]). So long as there is a nexus between the basis of classification and the object sought to be achieved, the classification is valid. (The State of Madhya Pradesh v. Gopal D. Tirthani[66]). The test ought not to be what would be a ‘better’ basis for the categorization for that would introduce subjectivity in the process. The test is whether categorization, on the basis adopted, results in hostile discrimination and adoption of the criteria has no reasonable nexus with the object sought to be achieved. (Samaj Parivartana Samudaya v. State of Karnataka[67]). It is no doubt true that, on another shop being established in his area/locality, the licensee, who had earlier achieved a turnover of fourteen times the licence fee in the Excise Year 2012-13, may achieve a turnover less than a licensee who had achieved a turnover of thirteen times the licence fee in the earlier Excise year 2012-13. However relocating an undisposed shop to an area, where the turnover achieved in the Excise Year 2012-13 was thirteen times or below the licence fee, would have resulted in each of the two licencees not being able to achieve a turnover of seven times the annual licence fee, which Rule 16(9) presumes to be a reasonable return on their investment. The licence fee is fixed for a population slab. It is the very same licence fee, fixed in terms of Rule 16(1) on the basis of population, that is levied even on relocation of an un-disposed A-4 shop. Where an un- disposed A-4 shop is relocated after 31st July, the licence fee is required to be reduced proportionately in terms of the proviso to Rule 16(1). While the licence fee, even for the relocated A-4 shop, would be the licence fee prescribed under Rule 16(1), the proviso to Rule 16(1) would require a proportionate reduction of such licence fee, if a licence is granted to the relocated un-disposed shop after 31st July, 2013. The privilege fee, of 8% plus VAT, is required to be paid by the licensees of the relocated undisposed A-4 shops as soon as their purchases exceeed seven times the proportionate licence fee paid by them, and not the prescribed annual licence fee. It is not even the petitioners’ case that any area/location, where an A-4 shop had achieved a turnover of less than fourteen times the licence fee in the Excise Year 2012-13, has been identified for relocation of un-disposed A-4 shops. Even with regards the new shops, in the relocated areas, there is no discrimination shown by the State as the existing licensees are not being deprived of their rights to vend liquor in retail. (R. Selvaraj v. Government of TN rep. by its Secretary, P & E Dept.[68]). In the additional counter-affidavit, the allegation that the respondents had not notified some places where the cumulative value of purchases is more than that of the place of the petitioners is denied. The respondents state that at Munugodu the two A-4 shops, notified and disposed of for the year, had recorded a turnover of 18.5 and 7.14 times respectively on their licence fee for the year 2012-13; the average turnover of Munugodu village was 12.93 times and, as such, no shop was proposed for relocation at Munugodu; in Valigonda the two A-4 shops had recorded an average turnover of 23.36 times during 2012-13, and hence one more A-4 shop was notified thereat to which as many as 33 applications had been received, and the said shop has been disposed of in the present notification. X V . IS EXERCISE OF POWER BY THE COMMISSIONER, TO RELOCATE UNDISPOSED A-4 SHOPS TO PLACES WHERE THE PETITIONERS SHOPS ARE SITUATED, SO UNREASONABLE AND ARBITRARY AS TO VIOLATE ARTICLE 14 OF THE CONSTITUTION? It is contended, on behalf of the petitioners, that “requirement” under Rule 4 can be assessed only after taking sales into consideration; the impugned decision to relocate undisposed A-4 shops, by the notifications dated 30.11.2013, was taken in the latter half of the excise licence year 2013-14; by this time some of the petitioners had lifted more than 7 times the licence fee, and were paying privilege fee of 8% plus VAT; as the rival competitor is not liable to pay privilege fee or VAT, the competitive edge of the petitioner in the market would be adversely affected; the impugned action would result in a difference in the sale price, as additional tax need not be paid by the new entrants; payment of additional tax at 13.5% by the existing licensees is almost equal to the licence fee; treating unequals as equals is in violation of Article 14 of the Constitution of India; the Commissioner cannot relocate shops from one district to another at his whims and fancies; he must take viability, under Rule 16(9), into consideration; except collection of the licence fee, no other object is achieved in establishing another shop in the same area; a new shop being established in the area will only result in dispersal of customers, and creation of unhealthy competition; there is no transparency as state-wide statistical data has not been published; the counter-affidavit is also silent whether the Commissioner was appraised of the statistical details of the entire State; shops with higher turnover have not been notified; exercise of power, to relocate shops from one district to another, is unwarranted and unreasonable; and, instead, the power under R u l e 1 8 s h o u l d h a v e b e e n e t o h a v e b e e n p e r m i t t e d t o o outlets in the localities/areas where shops could not be disposed or could not be allotted for any other reason. Article 19 (1) (g) of the Indian Constitution confers a fundamental right to trade subject to reasonable restrictions. However, liquor trade is viewed differently on the premise that there is no fundamental right to trade in intoxicants. (R. Selvaraj68; Cooverjee v. Excise Commissioner, Ajmer[69]; State of Orissa v. Harinarayan[70]; Nashirwar v. State of M.P.[71], Harishankar v. Dy. Excise and Taxation Commissioner[72] and Lakhanlal v. State of Orissa[73]). The State can create a monopoly, either in itself or in the agency created by it, for the sale and distribution of liquor as a beverage. It can also sell the licence to the citizens, for the said purpose, by charging fees. This can be done under Article 19(6), or even otherwise, as the State can impose limitations and restrictions, on the trade or business in potable liquor as a beverage, which are in their nature different from those imposed on the trade or business in goods and articles which are res commercium. (R. Selvaraj68; Khoday Distilleries Ltd33). Privilege can be claimed by a State in a “no-right” situation, namely, when a citizen is not permitted to carry on trade. However persons in whose favour licences have been granted, in terms of a statutory enactment, derive a right to deal in liquor. (Devans Modern Breweries Ltd.,2). While the power to relocate an un-disposed shop may well be unfettered save population - slab restrictions, it cannot be exercised by the Commissioner at his mere whim or fancy. The power conferred by legislation – plenary or subordinate – must be exercised reasonably and should be informed by reason. Article 14 of the Constitution would be attracted even in the matter of trade in liquor. (Kerala Samsthana Chethu Thozhilali Union34; V.K. Ashokan v. Assistant Excise Commissioner[74]) . The State can, for the purpose of selling the licence, adopt any mode with a view to maximise its revenues but, while doing so, must conform to the equality clause enshrined in Article 14 of the Constitution. (Devans Modern Breweries Ltd.,2). When the State decides to grant such a right or a privilege to carry on trade or business in liquor to others, it cannot escape the rigour of Article 14. It cannot act arbitrarily or at its sweet will. It must comply with the equality clause while granting the exclusive right or privilege of selling liquor. The State cannot ride roughshod over the requirement of that Article. (State of M.P. v. Nandlal Jaiswal[75]; Devans Modern Breweries Ltd.,2). The State, while parting with its exclusive privilege or a part thereof, may impose conditions but, once such terms and conditions are laid down by reason of a statute, the same cannot be deviated from. (Kerala Samsthana Chethu Thozhilali Union34). The power conferred on the Commissioner, to relocate undisposed A-4 shops, is by subordinate legislation (amendment of Rule 4 of the 2012 Rules) and by Executive Policy (para 2 of G.O.Ms. No.358 dated 22.06.2013). The principle of non-arbitrariness cannot apply to a change of policy by legislation. (Madras City Wine Merchants’ Assn. v. State of T.N.,[76]). As the vires of the amended Rule 4 is not under challenge in these Writ Petitions, this Court is only required to examine whether exercise of power, under the said Rule, by the Commissioner is in violation of Article 14 of the Constitution. While considering the applicability of Article 14 to liquor trade, the Court would be slow to interfere with the policy laid down by the State Government, for the sale of liquor, having regard to the nature of the trade or business. The Court would, in view of the inherently pernicious nature of the commodity, allow a large measure of latitude to the State Government in determining its policy of regulating trade in liquor. The grant of licence for the sale of liquor would essentially be a matter of economic policy where the Court would hesitate to intervene and strike down what the State Government has done unless it appears to be plainly arbitrary, irrational or malafide. What can be said in regard to legislation relating to economic matters must apply equally in regard to executive action in the field of economic activities'. (Nandlal Jaiswal75; R. Selvaraj68). While the Excise policy for 2013-14 prohibits relocation of an undisposed A-4 shop from a higher population slab to a lower population slab, the Commissioner has confined exercise of his power under the amended Rule 4, to relocate A-4 shops which remained undisposed in an area/locality, only to those areas/localities where the existing A-4 shops achieved a turnover of 14 times or more the annual license fee in the earlier Excise year 2012-13 thereby striking a balance between augmenting State revenue and ensuring a reasonable return on investment for both the existing A-4 shop and the relocated undisposed A-4 shop. The amended Rule 16(9), in levying privilege fee at 8% plus VAT only on purchases from APBCL in excess of seven times the annual license fee, presumes that a turnover of seven times the annual license fee is a reasonable return on investment. It is only if this Court were to be satisfied that the exercise of power by the Commissioner is so unreasonable, as to violate Article 14, would interference be justified. The concept of 'reasonableness' defies definition. The functional and conceptual implication of the term 'reasonableness' is that it is essentially another word used for public policy. (Om Prakash v. State Of Uttar Pradesh[77]; Friedmann: 'Legal Theory, 4th Ed., at pages 83-85'). The authority must, by the use of his reason, ascertain and follow the course which reason dictates. He must act reasonably. The word ‘unreasonable’ is frequently used as a general description of the things that must not be done. A person entrusted with a discretion must direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting ‘unreasonably’. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. The rule of reason has thus become a generalized rubric covering not only sheer absurdity or caprice, but merging into illegitimate motives and purposes, a wide category of errors commonly described as ‘irrelevant considerations’, and mistakes and misunderstandings which can be classed as self-misdirection. (Administrative Law: HWR Wade & C.F. Forsyth – Tenth Edition). Can exercise of power, to relocate undisposed A-4 shops to areas where the existing shops achieved a turnover exceeding fourteen times the annual licence fee in the previous Excise Year 2012-13, be said to be so arbitrary and unreasonable as to violate Article 14 of the Constitution of India? The grant of a liquor licence does not involve any right or expectation but is a matter of privilege. All that is required is that the Commissioner should act fairly, and deal with the applications without any bias, and not in an arbitrary or capricious manner. (M/s. Chingleput Bottlers v. M/s. Majestic Bottling Co.[78]). The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must, therefore, resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. If the decision is within the confines of reasonableness, it is no part of the court's function to look further into its merits. ‘With the question whether a particular policy is wise or foolish the court is not concerned; it can only interfere if to pursue it is beyond the powers of the authority.” (Sterling Computers Ltd. v. M & N Publications Ltd.[79]; Administrative Law, Prof. Wade). Article 14 cannot be interpreted in a doctrinaire or dogmatic manner. Excessive interference by the judiciary in the functions of the executive is not proper. In view of the inherent complexities involved in modern society, some free play must be given to the executive. (Transport and Dock Workers Union v. Mumbai Port Trust[80]; Missouri, Kansas and Texas Railway Co. v. May[81]; Aravali Golf Club v. Chander Hass[82]). While fair play in action is an essential requirement, “free play in the joints” is also a necessary concomitant for an administrative body functioning in an administrative sphere. (Fasih Chaudhary v. D.G., Doordarshan[83]). It is un-understandable as to how, in the instant case, the action of the State and the Commissioner can be termed arbitrary as their endeavour is only to sell as many of the remaining undisposed A-4 shops as is possible and, thereby, augment State revenue. The exercise undertaken by the Commissioner is merely to relocate undisposed A-4 shops within the maximum number of shops fixed by the Government. The State can always re-locate undisposed shops, for augmenting public revenue, as long as the existing licensees are not deprived of their privilege of carrying on their business. (R. Selvaraj68). It is not even the petitioners’ case that they are prevented from trading in liquor as a result of relocation of an undisposed shop in their area. It does not stand to reason that the power to relocate an undisposed shop should be exercised only at the beginning of the Excise year, and not thereafter. If the respondents could have exercised the power under the amended Rule 4 at the inception, without any demur, there is no reason to contend that the respondents cannot take any steps subsequently to settle such vacant shops in accordance with the Rules. (K. Muthusamy55). The undisposed shops, which have been relocated consequent to the impugned notifications, are required, in terms of the proviso to Rule 16(1), only to pay the proportionate licence fee, and not the annual licence fee in its entirety. Privilege fee, under Rule 16(9), would be levied on these shops the moment they achieve a turnover of seven times the proportional licence fee paid by them. The decision of the Commissioner , to relocate undisposed A-4 shop only to those areas where the existing licensees had achieved twice the purchases prescribed in Rule 16(9), is informed by reason and has not been exercised at his whim or fancy. As licensees who achieved a turnover of 14 times the annual licence fee, in the Excise Year 2012-13, constitute a distinct class, it cannot be said that unequals have been treated equally. No material has been placed by the petitioners to even show, let alone establish, that relocation of undisposed A-4 shops would either create a law and order problem or unhealthy competition. Those A-4 shops, which have already achieved a turnover of seven times or more the annual licence fee for the Excise Year 2013-14, cannot be heard to complain of loss of competitive edge as they have already earned a reasonable return on their investment, in terms of Rule 16(9), even before completion of 3/4th of the said Excise Year. Any reduction in the price, at which the relocated A-4 shops would sell IMFL and FL till they achieve a turnover of seven times the proportionate license fees paid by them, would only benefit consumers. Permitting APBCL to open outlets, in areas where the A-4 shops could not disposed of, may not help the State in enhancing its revenues as the very fact that no one came forward to seek licences in such areas reflects low consumption of IMFL and FL thereat. The contention that the decision of the Commissioner, to relocate undisposed A-4 shops to areas/localities in which the petitioners were granted renewal of their licences, is arbitrary and in violation of Article 14 must therefore fail. XVI. DOES PRINCIPLES OF NATURAL JUSTICE NECESSITATE COMPLIANCE BEFORE AN UNDISPOSED A-4 SHOP IS RELOCATED? It is contended, on behalf of the petitioners, that the decision of Commissioner, to relocate some other undisposed shop into the area of the petitioners shops, was taken without notice to them, and without giving them an opportunity of being heard; and the administrative decision of the Commissioner, affecting the exclusive privilege of the petitioner to sell IMFL & FL in their licenced area, infringes their right, results in civil consequences, and is in violation of principles of natural justice. The rules of natural justice are not embodied rules. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case and the framework of the law under which the enquiry is held. Whenever a complaint is made before a Court that some principle of natural justice has been contravened, the Court has to decide whether observance of that rule was necessary for a just decision on the facts of the case. (Maneka Gandhi v. Union of India[84]; Suresh Koshy George v. University of Kerala[85]; D.F.O., South Kheri v. Ram Sanehi Singh[86]). It should not proceed as if there are inflexible rules of natural justice of universal application. Each case depends on its own circumstances. Rules of natural justice vary with the rules prescribed by the legislature. (M/s. Chingleput Bottlers78). Rules of natural justice are not statutory rules. These rules are not cast in a rigid mould nor can they be put in a legal strait-jacket. They are not immutable but flexible. These rules can be adapted and modified by statutes and statutory rules. (Union of India v. Tulsiram Patel[87]). Not only can the principles of natural justice be modified but, in exceptional cases, they can even be excluded where the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provisions warrant its exclusion. (Tulsiram Patel87; State of U.P. v. Sheo Shanker Lal Srivastava[88]). If a statutory provision either specifically, or by necessary implication, excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the Legislature or the statutory authority and read into the concerned provision the principles of natural justice. (Union of India v. Col. J.N. Sinha[89]; Tulsiram Patel87) . The implication of natural justice being presumptive, it may be excluded by express words of the statute or by necessary intendment. (Swadeshi Cotton Mills v. Union of India[90]; Tulsiram Patel87). The power conferred on the Commissioner, under the amended Rule 4, is to relocate undisposed A-4 shops from any area/locality as he thinks fit. The wide discretion conferred on the Commissioner neither explicitly, nor by necessary implication, requires compliance with principles of natural justice before its exercise. Undisposed A-4 shops have been relocated by the Commissioner in the exercise of his powers under Rule 4 of the amended 2012 Rules. Legislative action, plenary or subordinate, is not subject to natural justice. Subordinate legislation cannot be questioned on the ground of violation of principles of natural justice on which administrative action may be questioned. (Tulsipur Sugar Co. Ltd. v. Notified Area Committee, Tulsipur[91] Rameshchandra Kachardas Porwal v. State of Maharashtra[92]; Madras City Wine Merchants’ Assn.76; Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India[93] Bates v. Lord Hailsham of St Marylebone[94]). Even otherwise the grant of licence to trade in liquor is the grant of a “privilege”. An authority or body need not observe the rules of natural justice where its decision, although final, relates not to a 'right' but to a 'privilege or licence'. All that is required, in such cases, is that the applications must be considered fairly. (M/s. Chingleput Bottlers78). As has been already held the decision, to relocate undisposed A-4 shops, is fair and reasonable and is not in violation of Article 14 of the Constitution. XVII. SCOPE OF INTERFERENCE IN POLICY DECISIONS OF GOVERNMENT: The Excise Policy for the year 2012-13, notified in G.O.Ms. No.390 dated 18.06.2012 and published in the A.P. Gazette on 18.06.2012, stipulated that the privilege of selling liquor through retail shops should be granted by collecting a fixed licence fee based on the population (as per census) of the places (municipality/town/village) where the shops were proposed to be established; the method of selection, for grant of shop licences, was to be by drawal of lots; the period of licence was for one year; and renewal for the second year 2013-14 was to be considered subject to payment of the licence fee to be fixed by the Government for the second year (2013-14), and the licensee not incurring any disqualification as per rules. The total number of A4 shops in the entire State was fixed at the earlier stipulated number of 6596 shops. The licence fee, for different population slabs, was prescribed in Para 8 of the said Excise Policy i.e, for the population slab of upto 10,000, the licence fee was Rs.32.50 Lakhs. It was Rs.34.00 Lakhs for the population slab between 10,000 and 50,000; Rs.42.00 Lakhs for the population slab between 50,000 and 3 lakhs; Rs.46.00 Lakhs for the population slab between 3 lakhs and 5 lakhs; Rs.64.00 Lakhs for the population slab between 5 lakhs and 20 lakhs; and Rs.104.00 Lakhs for the population slab above 20 lakhs. In addition to the licence fee, the licensee was required to pay a privilege fee at 8%, plus applicable VAT, on the invoice value of the liquor purchased during the licence year in excess of 6 times the annual licence fee. The Excise Policy for the year 2013-14, as notified in G.O.Ms. No.358 dated 22.06.2013 and published in the A.P. Gazette on 24.06.2013, stipulated that the privilege, of selling liquor through retail shops, should be renewed by collecting a fixed licence fee based on the population, as per the 2011 Census, of the places (Corporation/Municipality/Town/Village) for the year 2013-14. Para 2 of the said Excise Policy, while permitting the Commissioner of Prohibition and Excise to relocate un-disposed A-4 shops from any locality/area as he thought fit, prohibited him from relocating such A-4 shops from a higher licence fee slab to a lower licence fee slab. Para 3 prescribed the method of selection, for grant of licences for the un- disposed shops, to be by drawal of lots. Under Para 5, the total number of retail shops in the entire State was retained at 6596. The licence fee, stipulated under para.8 of the Excise Policy for the year 2013-14 for different population slabs, is the same as stipulated in the earlier Excise Policy for the year 2012-13. However the privilege fee, at the rate of 8% plus applicable VAT, was to be paid only where the invoice value of the liquor purchased by a licensee, during the excise year, was in excess of seven times the prescribed annual licence fee. The Excise Policies for the years 2012-13 and 2013-14 have been made by the Government to enhance State revenue. This Court would not, ordinarily, examine in judicial review proceedings under Article 226 of the Constitution of India, policy choices of the Executive. Policy is not static but is dynamic. (T.N. Education Deptt. Ministerial & General Subordinate Services Assn. v. State of T.N.[95]). If the policy cannot be faulted on grounds of malafide, unreasonableness, arbitrariness or unfairness etc the mere fact that it would hurt business interests does not justify invalidating the policy. In economic regulation cases, there are good reasons for judicial restraint, if not judicial deference, to the judgment of the executive. Courts should not express their opinion whether, at a particular point of time or in a particular situation, any such policy should have been adopted or not. It is best left to the discretion of the State. (Ugar Sugar Works Ltd. v. Delhi Admn.[96]). Each State is empowered to formulate its own liquor policy. No direction can be given or expected from the Court regarding the “correctness” of an executive policy unless, while implementing such policies, there is infringement or violation of any constitutional or statutory provision. (Ugar Sugar Works Ltd.96) . Public authorities must have liberty in framing policies. If a decision has been taken in a bonafide manner, although not strictly following the norms laid down by Courts, such decisions are upheld on the principle that Courts, while judging the validity of executive decisions, must grant certain measure of freedom of “play in the joints” to the executive. (Sterling Computers Ltd.79). Judges should exercise judicial self-restraint while exercising powers of judicial review of administrative or legislative decisions. (Transport and Dock Workers Union80). Specific places were hitherto fixed by the Commissioner, in the exercise of his powers under Rule 4 of the 2012 Rules and the earlier 2005 Rules, for locating the total 6596 A-4 retail shops in different areas/localities of the State. While the amended Rule 4, and para 2 of the Excise Policy for the year 2013-14, enable the Commissioner to relocate un-disposed A-4 shops from any locality/area as he thinks fit, he is disabled by Para.2 of the said Excise Policy, from relocating un- disposed A-4 shops from a higher licence fee slab to a lower licence fee slab. For example - the Commissioner is disabled from relocating an un-disposed shop, fixed earlier in an area where the population was in excess of 20 Lakhs, to an area where the population is 10,000 or less. Save this restriction the power conferred on the Commissioner, by the amended Rule 4 to relocate un-disposed A-4 shops, is unfettered. From the counter-affidavit filed on behalf of the respondents it is evident that as many as 617 shops were not disposed of, inspite of repeated notifications, during the Excise year 2012-13; a notification was issued for disposal of these 617 shops during the Excise year 2013-14; applications in respect of 76 shops were received and disposed of, leaving 541 shops undisposed; as against 5979 shops, for which licenses were granted for the year 2012-13, licenses for only 4,986 shops were renewed for the year 2013-14; 993 shops were left unrenewed; at the end of the first round of notifications for the year 2013-14, 1610 shops remained undisposed; 215 shops were disposed of in the second round, leaving 1,395 shops undisposed for the year 2013-14; after repeated notifications, another 225 shops were disposed of; and 1,170 shops are yet to be disposed off even after seven rounds of notifications. The revenue which the State expected to generate was by collection of the prescribed licence fee for all the 6596 A-4 shops. As 1610 A-4 shops remained undisposed for the Excise Year 2013-14, before the impugned notifications were issued, there was a substantial shortfall in the expected revenue generation. This necessitated relocation of undisposed A-4 shops to other areas/localities where there was a greater demand for grant of licences to establish A-4 shops. As the licence fee is fixed for a population slab, relocation of an A-4 shop from a higher population slab to a lower population slab would have resulted in collection of lower licence fees, for grant of a licence for the A-4 shop, at the relocated place. This would, in turn, have resulted in loss in collection of the estimated revenue, thereby defeating the very object of relocating un-disposed A- 4 shop in terms of the amended Rules and the Excise Policy. XVIII. LEGITIMATE EXPECTATION: It is contended on behalf of the petitioners that, once a licence is granted with specific conditions and the licence is renewed on those conditions, the licensee has a legitimate expectation of carrying on business in the areas earmarked in their favour when they were granted A-4 licences; and the petitioners cannot be denied the opportunity of making reasonable profits. Legitimate expectation may arise (a) if there is an express promise given by a public authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue. Such an expectation must be reasonable. (Madras City Wine Merchants’ Assn.76). A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. (Jasbir Singh Chhabra v. State of Punjab[97]; Halsbury’s Laws of England, 4th Edn.). A decision taken in an arbitrary manner contradicts the principle of legitimate expectation. An authority is under a legal obligation to exercise power reasonably and in good faith to effectuate the purpose for which the power stood conferred. In this context, “in good faith” means “for legitimate reasons”. It must be exercised bonafide for the purpose and for none other. (Commr. of Police v. Gordhandas Bhanji[98], Sirsi Municipality v. Cecelia Kom Francis Tellis[99], State of Punjab v. Gurdial Singh[100], Collector (District Magistrate) v. Raja Ram Jaiswal[101], Delhi Admn. v. Manohar Lal[102] and N.D. Jayal v. Union of India[103]; NOIDA Entrepreneurs Assn. v. NOIDA[104]). The Court can interfere only if the decision taken by the authority is found to be arbitrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and is not taken in public interest. A claim based on mere legitimate expectation, without anything more, cannot ipso facto give a right to invoke these principles. (Jasbir Singh Chhabra97). The mere reasonable or legitimate expectation of a citizen may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant’s perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. (Food Corporation of India v. Kamdhenu Cattle Feed Industries[105]; Jasbir Singh Chhabra97). Legitimate expectation cannot be upgraded to a legally enforceable right which it is not, as it is merely a part of the rule of non- arbitrariness to ensure procedural fairness of the decision. The requirement of public interest can outweigh the legitimate expectation of private persons and the decision of a public body on that basis is not assailable. (Ghaziabad Development Authority v. Delhi Auto & General Finance (P) Ltd.,[106]). As the decision of the Commissioner, in relocating un-disposed A-4 shops to areas wherein the petitioners A-4 shops are located, does not suffer from arbitrariness, is not in violation of Article 14 of the Constitution of India, and is taken in the larger public interest of enhancing public revenue, the doctrine of legitimate expectation has no application. There is a distinction between a mere hope and a legitimate expectation. (R. Selvaraj68; Madras City Wine Merchants Association's76). For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope. It cannot amount to a claim or demand on the ground of a right. However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope, even leading to a moral obligation, is not a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. Again it is distinguishable from a genuine expectation. Such expectation should be justifiably legitimate and protectable. Every such legitimate expectation does not by itself fructify into a right and, therefore, does not amount to a right in the conventional sense. (Punjab Communications Ltd. v. Union of India[107], Chanchal Goyal (Dr.) v. State of Rajasthan[108], J.P. Bansal v. State of Rajasthan[109], State of Karnataka v. Umadevi[110], Kuldeep Singh v. Govt. of NCT of Delhi[111], Ram Pravesh Singh v. State of Bihar[112] and Sethi Auto Service Station v. DDA[113]; Union of India v. Hindustan Development Corpn[114]; Jasbir Singh Chhabra97). Neither the Government nor the Commissioner have promised the petitioners that they would make profits from their business, of trading in liquor, for the Excise Year 2013-14. The doctrine of legitimate expectation arises only in the field of administrative decisions. If the plea of legitimate expectation relates to procedural fairness there is no possibility of invoking the doctrine as against legislation – plenary or subordinate. If there is a change in policy, or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise. (Madras City Wine Merchants’ Assn.76). The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choices within the executive or legislative power. In matters of economic policy, the court gives a large leeway to the executive and the legislature. Granting licences is either by way of executive or legislative policy. (Bajaj Hindustan Ltd. v. Sir Shadi Lal Enterprises Ltd.,[115]). The decision taken by the Commissioner, to relocate some of the un- disposed A-4 shops, is in the exercise of the powers conferred under the amended Rule 4 of the 2012 Rules, which has the force of law. It is also in accordance with the Excise Policy framed by the Government for the Excise Year 2013-14 which was notified in G.O.Ms.No.358 dated 22.06.2013 and was published in the A.P. Gazette on 24.06.2013. The contention that the petitioners’ legitimate expectation is violated thereby does not, therefore, merit acceptance. X I X . IS FAILURE TO IDENTIFY AREAS, AT WHICH THE UNDISPOSED A-4 SHOPS SHOULD BE RELOCATED, BEFORE THE COMMENCEMENT OF THE EXCISE YEAR 2013-14, FATAL? Learned Counsel for the petitioners would contend that, if the shops had been identified in June, 2013 itself, the exercise of issuing a notification undertaken in the beginning of the year, and the proposal to relocate undisposed A-4 shops had been brought to their notice, the petitioners would not have sought renewal; and, if another shop is now located in their area, the petitioners would not only suffer huge loss but their bank guarantees and licence fees would be forfeited in terms of Rule 16(8). As both the amended 2012 Rules, and the Excise policy for the year 2013-14, were published in the A.P. Gazette before the commencement of the Excise year 2013-14, the licensees cannot claim ignorance thereof before they participated in the selection process for grant of licenses. They had the option to opt out if the conditions were detrimental to their interest or were to their disadvantage. Having participated in the selection process, based on the extant rules and the Excise policy, it is not open to them to now turn around and contend that exercise of power, strictly in terms thereof, is illegal. (Devans Modern Breweries Ltd.,2). Neither the Act nor the Rules obligated the petitioners to seek renewal of their licences, and they did so on their own volition. The State has not guaranteed the petitioners, either under the Act or the amended 2012 Rules or the Excise Policy for the year 2013-14, a specified sum as profit or a fixed return on their investment. In contracts entered into between the State and its citizens, pursuant to an auction, the State does not guarantee a profit to the licensees. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. There is no warranty against incurring losses. It is a business for the licensees. Whether they make profit or incur loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more to the State in case they make substantial profits. (Asstt. Excise Commr. v. Issac Peter[116]; Devans Modern Breweries Ltd.,2). The right to carry on business, more so in the sale of liquor which is Res extra commercium, does not carry with it any obligation on the State to guarantee the licensees a particular rate of return on their investment. Any person carrying on business may earn huge profits, or may suffer extensive losses. Neither does the State promise a businessman that it would make good the losses suffered by him nor would the businessman share his profits with the State if it is in excess of what he had earlier envisaged. Maybe the licensees were not wise in offering their bids. Many an unexpected development may occur which may either cause loss to the contractor or result in large profit. Such contracts do not imply a warranty — or a guarantee — of profit to the contractor. It is a business for him — profit and loss being normal incidents thereof. (Asstt. Excise Commr.116). Relocation of undisposed shops does not deprive the licensees of their right to carry on the trade in intoxicants for the duration of the licence period. This right to trade, during the period of the excise year, should not be confused with the right to make profits. Even assuming that, by reason of the new shops, the licensees may suffer in sales, it would not result in discrimination. The licensees were well aware that there may be an increase of shops in their area, on undisposed shops being relocated thereat, and that their sales may get reduced thereby. Neither the viability of liquor trade nor the profit or loss of the liquor vendor is of any concern of the State, and it confers privilege on fixed terms for a fixed period. It is for the participant to plan and participate in the purchase of the privilege. (R. Selvaraj68; Issac Peter116). It is not open to the petitioners to now turn around and contend that un- disposed A-4 shops should not be relocated in their areas as they may suffer losses thereby. X X . HAS THE COMMISSIONER ABDICATED HIS POWERS UNDER RULE 4 AND SURRENDERED HIS DISCRETION TO HIS SUBORDINATES? It is contended, on behalf of the petitioners, that the Commissioner could not have called for proposals from the Deputy Commissioners of Prohibition and Excise, who have no role to play under the Act and the Rules, for the purpose of issuing licences; and, from the counter-affidavit, it is clear that the Commissioner has merely accorded permission and has not take an independent decision under Rule 4. The principles of administrative law, such as surrender of discretion and abdication of duty vitiating the decision, would apply in the case of exercise of power conferred by a statute or rules made thereunder or instruments which are statutory in character. (Irrigation Development Employees Association v. Govt. of A.P.[117]). Exercise of statutory power partakes a quasi-judicial complexion. In the exercise of such power, the authority cannot permit its decision to be influenced by the dictation of others as this would amount to abdication and surrender of its discretion. It would then not be the authority's discretion that is exercised, but someone else's. If an authority \"hands over its discretion” to another body it acts ultra vires. Such interference by a person or body extraneous to the power is contrary to the nature of the power conferred on the authority. (State of U.P. v. Dharmander Prasad Singh[118]). In the counter-affidavit filed on behalf of the respondents it is stated that, after 21.08.2013, the respondents had issued four notifications notifying the un-disposed A-4 shops at their original places during which 89 shops were disposed; 1170 A-4 shops still remained un-disposed; in order to dispose of these un-disposed shops, a decision was taken to relocate the A-4 shops in a phased manner at places where the turnover of the existing A-4 shops was more than 14 times the licence fee; mandals, where there were no A-4 shops, were notified; all the Deputy Commissioners of Prohibition and Excise were asked to submit proposals for relocation of shops wherever the turnover of the A-4 shops were 14 times and above the license fee; a meeting was convened on 06.11.2013 wherein all the Deputy Commissioners sought permission to relocate A-4 shops in 17 mandals which did not have a single A-4 shop; they also submitted proposals in respect of 106 shops where the turnover was 14 times and above the license fee; after thoroughly examining the proposals, the Commissioner of Prohibition and Excise had again convened a meeting on 29.11.2013 with the Deputy Commissioners of Prohibition and Excise, and had accorded permission to relocate 104 A-4 shops at those areas/localities where the turnover was 14 times or more; in addition, taking into consideration Rules 4 and 17, A-4 shops were sought to be relocated in those mandals which did not have any A-4 shop at all; and the Commissioner had accorded permission to relocate 69 A-4 shops from one location to another within the district, 15 A-4 shops from one district to another within the zone, and 37 A-4 shops from one district to another within the multi-zone within the same licence fee slabs. In calling for proposals, and in seeking information, from his subordinates the Commissioner has neither surrendered his discretion nor has he abdicated his duties. It is evident that it is the Commissioner who has exercised the powers conferred on him under the amended Rule 4, and not the Deputy Commissioners who, as his subordinates, had merely submitted proposals to, and had furnished the information sought for by, him. X X I. ARE DISTRICT COLLECTORS EMPOWERED TO ISSUE THE NOTIFICATION UNDER RULE 5(1) OF THE RULES? It is contended on behalf of the petitioners that the impugned notifications, issued by District Collectors, are ultra-vires Rule 5 as the competent authority is the licensing authority i.e., the Excise Superintendent; if a thing has to be done in a certain way, it must be done in that way only; merely because they were also granted licences, pursuant to notifications issued by District Collectors in July, 2012, does not disable the petitioners from questioning the impugned notifications issued by the District Collector as the “cause” is different; the earlier “cause”, whereby the petitioners were granted licences in July, 2012, is not before the court; no fresh notification was issued for the petitioners’ areas in the year 2013-14 as it is only a renewal; the petitioners cannot be precluded from questioning the jurisdiction of the District Collector merely because they were granted a similar benefit in the earlier year 2012-13; and the impugned notifications were issued by the District Collector, for re-location of the shops, without guidelines or norms or in accordance with the power contemplated under the Excise Act or the Rules. A. THE PROCEDURE PRESCRIBED BY STATUTORY RULES MUST BE STRICTLY ADHERED TO: When a procedure has been laid down, the authority must act strictly in terms thereof. (Taylor v. Taylor[119]). If a statute has conferred a power to do an act, and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted. (State of U.P. v. Singhara Singh[120]; Dhanajaya Reddy v. State of Karnataka[121]; Ramchandra Murarilal Bhattad v. State of Maharashtra[122]; State of Gujarat v. Shantilal Mangaldas[123]). Rule 5(1) of the 2012 Rules requires the notification in the District Gazette, inviting applications for grant of licences in the area/locality, to be issued by the licencing authority. Rule 2(L) of the 2012 Rules defines “licensing authority” to mean the Prohibition & Excise Superintendent of the concerned place in which the licenced shop is located. As the licencing authority is the Prohibition & Excise Superintendent, the impugned notifications issued by the District Collectors do not accord with Rule 5(1) of the 2012 Rules. The contention of the Learned Government Pleader that the District Collector is the selection authority under Rule 11, and is entitled to issue the notification under Rule 5(1), is not tenable. Rule 3(1) stipulates that, subject to the provisions of the Rules, the right to sell IMFL and FL in retail by shops shall, ordinarily, be granted by way of a licence issued after publishing a notification and inviting applications from the public. Rule 12 relates to submission of applications, and selection of applicants for the grant of licences. While Rule 12(1) requires applications, along with the prescribed enclosures, to be addressed to the licencing authority, the selection procedure, detailed in Rule 12(6) of the Rules, makes it clear that the District Collector is the selection authority. On a conjoint reading of Rules 5 and 12, it is evident that, while the notification under Rule 5(1) is to be issued by, and the applications addressed to, the Prohibition & Excise Superintendent as the licencing authority, the selection process is conducted under the aegis of the District Collector on whom power is conferred to select the successful applicant. After the applicant is selected by the District Collector for grant of the licence, it is the Prohibition & Excise Superintendent who, as the licensing authority, is competent to issue the licence under Rule 24. The District Collectors were, therefore, not entitled to issue the impugned notifications under Rule 5(1) of the Rules. B . PETITIONERS CANNOT BLOW HOT AND COLD AT THE SAME TIME: This, by itself, may not justify setting aside the impugned notifications as the petitioners are themselves beneficiaries of licences, granted to them for the Excise year 2012-13, on similar notifications being issued under Rule 5(1) by the District Collectors. A party cannot be permitted to “blow hot-blow cold”, “fast and loose” or “approbate and reprobate”. Where one knowingly accepts the benefits of an order, he is estopped from denying the validity of, or the binding effect of, such an order upon himself. (Nagubai Ammal v. B. Shama Rao[124]; CIT v. V. MR. P. Firm Muar[125]; Ramesh Chandra Sankla v. Vikram Cement[126]; Pradeep Oil Corpn. v. MCD[127]; Cauvery Coffee Traders v. Hornor Resources (International) Co. Ltd.[128]; V. Chandrasekaran v. Administrative Officer[129]; and Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd.,[130]). A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn around and say it is void for the purpose of securing some other advantage. (Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. Ltd[131]; Halsbury’s Laws of England, 4th Edn., Vol. 16; R.N. Gosain v. Yashpal Dhir[132]; P.R. Deshpande v. Maruti Balaram Haibatti[133]). Since the petitioners are themselves beneficiaries of the notifications issued earlier by District Collectors, and are being permitted to trade in liquor, criticism by such beneficiaries of the impugned notifications, also issued by the District Collectors, is not justified. (K. Muthusamy55). C . DISCRETIONARY JURISDICTION, UNDER ARTICLE 226 OF THE CONSTITUTION, IS NOT TO BE EXERCISED FOR THE MERE ASKING. The contention that the notifications issued under Rule 5(1), inviting applications for the Excise year 2012-13, are not under challenge in these writ proceedings and this Court should not examine the validity of such notifications, but should set aside the impugned notifications issued by the District Collectors under Rule 5(1) for the Excise Year 2013-14, does not merit acceptance. A writ of mandamus is designed to promote justice (ex debito justitiae). The grant or refusal of the writ is at the discretion of the Court. While dealing with a writ petition, the court must exercise discretion taking into consideration a wide variety of circumstances, inter alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant or refusal. (Rajasthan State Industrial Development & Investment Corpn.130). The power conferred on the High Court, under Article 226 of the Constitution, is to advance justice and not to thwart it. The lookout of the High Court is, therefore, not merely to pick out any error of law through an academic angle but to see whether injustice has resulted on account of any erroneous interpretation of the law. If justice became the by-product of an erroneous view of law the High Court is not expected to erase such justice in the name of correcting the error of law. (Roshan Deen v. Preeti Lal[134]; Ramesh Chandra Sankla126; State of U.P. v. District Judge, Unnao[135]). While examining the contention that the impugned notifications, issued by the District Collectors, must be set aside on the ground that no such power is conferred on them under Rule 5(1), it does not stand to reason that this Court should ignore or turn a blind eye to the fact that similar notifications were issued, for the Excise Year 2012-13, by District Collectors whereby A-4 shop licences were granted to the petitioners, and were renewed for the Excise Year 2013-14. In the exercise of its discretionary jurisdiction under Article 226, it is open to the High Court to decline relief if the grant of relief would defeat the interests of justice or where the petitioner seeks to secure a dishonest advantage or perpetuate an unjust gain. (M.P. Mittal v. State o f Haryana[136]; Andhra Pradesh Wine Dealers Association v. Deputy Director of Income Tax (Investigation)[137]). Permitting the petitioners, who are beneficiaries of similar notifications issued by District Collectors in the Excise Year 2012-13, to run A-4 shops for the Excise Year 2013-14, while at the same time setting aside the impugned notifications whereby others were granted licences for the relocated shops, would not only result in a premium being placed on the earlier illegal acts of the District Collectors but would also be against larger public interest. The jurisdiction of the High Court, under Article 226 of the Constitution, is extraordinary, equitable and discretionary, (K.D. Sharma v. Steel Authority of India Ltd[138]) , and should be exercised in the larger interest of justice. While granting relief in favour of the applicant, the court must balance interests and equities. It can pass an appropriate order which justice may demand and equities may project. Courts of equity should go much further both to give and refuse relief in furtherance of public interest. Granting or withholding of relief may properly be dependent upon considerations of justice, equity and good conscience. (Ramesh Chandra Sankla126; Shiv Shankar Dal Mills v. State of Haryana[139]). As the entire exercise of relocation of un-disposed shops is to enable the Government to augment its revenue, I see no reason to exercise discretion, under Article 226 of the Constitution of India, to set aside the impugned notifications while at the same time permitting the petitioners to continue to carry on trade in IMFL and FL and reap the benefits of the earlier notifications issued, under Rule 5(1) by the District Collectors, for the Excise year 2012-13. X X II. IS THE STATE, BY RELOCATING UNDISPOSED A-4 SHOPS, ENCOURAGING CONSUMPTION OF LIQUOR? It is contended, on behalf of the petitioners, that liquor is not an essential commodity, and grant of privilege fee by the State is only a revenue generating exercise; the very fact that A-4 shops, in some districts, could not be disposed shows that the people in those districts do not wish to consume IMFL; a welfare State should not dispose of A- 4 shops which could not be relocated; and relocation of shops, from one district to another, falls foul of the government policy for the year 2013-14 as it would amount to encouraging people in that district to consume more IMFL. The power of the State to raise revenue by levying taxes and fees should not be confused with the power of the State to regulate trade or business in liquor. The State exercises two different powers on such occasions. The mere fact that the State levies taxes and fees on trade or business in liquor or derives income from it, does not make the right to carry on trade or business in liquor a fundamental right. (R. Selvaraj68). Whether or not the undisposed A-4 shop should be relocated are matters of legislative or executive policy and this Court would not sit in judgment over the policy decisions of the State. The Excise Policy for the year 2014, while permitting the Commissioner to relocate undisposed shops, requires an intensive campaign to be undertaken to educate the public about the evil effects of drinking and for steps to be taken to initiate establishment of de-addiction centres in each district. The manner in which the revenue needs of the State should be balanced with the need to educate the public of the evil effects of drinking are also not for this Court to adjudicate in proceedings under Article 226 of the Constitution of India. This contention urged by the petitioners, who are carrying on trade in the sale of IMFL and FL in retail shops, is akin to the devil quoting the scriptures, and does not merit acceptance. XXIII: CONCLUSION: Viewed from any angle, I see no reason to exercise discretion, under Article 226 of the Constitution of India, to interfere. The Writ Petitions fail and are, accordingly, dismissed. The miscellaneous petitions pending, if any, shall also stand dismissed. No costs. _______________________________ RAMESH RANGANATHAN, J Date: 05.03.2014. Note: L.R. copy to be marked. 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