LexM/S KHODAY DISTILLERIES LTD. ETC. versus STATE OF KARNATAKA AND ORS. ETC.
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•' MIS KHODA Y DISTILLERIES LTD. ETC. v. STATE OF KARNATAKA AND ORS. ETC. OCTOBER 19, 1994 (M.N. VENKATACHALIAH, CJ, J.S. VERMA, P.B. SAWANT, K. RAMASWAMY AND B.P. JEEVAN REDDY, JJ.] Constitution of India-Articles 19(1) (g), 19(6), 47, 298, 300A, 301 to 305 and Entry 8 and 51 of list JI and Entry 52 of list I, Seventh Schedule-Right to carry trade in liquor-Whether a fundamental right-Held, Ntr-State can prohibit completely trade or business in potable liquor Monopoly for manufacture, trade or business in liquor can be created in favour of State-Reasonable restrictions under Article 19(6) can be placed by subor- dinate legislation as well, so long as such legislation is not violative of any provisions of Constitution. Words and Phrases-Constitution of India-Article 19( 1) (gj-Words 'trade' and 'business'-Meaning of-Held, word 'trade' may include all con- notations of word 'business'-lnArticle 19(1) (g), words 'trade' and 'business' are used synonymously. A B c D E Petitioners, wholesale trades in liquor had challenged the constitu- tional validity of the Kamataka Excise (Distillery and Warehouse) (Amendment) Rules, 1989, Karnataka Excise (Manufacture of Wine from Grapes) (Amendment) Rules 1989, Karnataka Excise (Brewery) (Amend· ment) Rules, 1989, Kamataka Excise (Sale of Indian and Foreign Liquor) f (Amendment) Rules, 1989 and Karnataka Excise (Bottling of liquor) (Amendment) Rules, 1989 on the group that the Rules in question affected adversely the fundamental right of the parties to carry on trade or business in liquor and that the said Rules were violative of Articles 14, 19(l)(g), 47, 300 A, 301 and 304 of the Constitution of India. Some appeals bad also been tiled against the decision of the Kerala High Court upholding the G validity of the. Government order dated 9th December, 1992 passed by the Government of Kerala deciding to cancel all foreign liquor licences issued under Rule 13 (3) of the Kerala Foreign Liquor Rules, 1974 to Hotels, Restaurants and Tourist Homes. A bunch of special leave Petitions and writ petitions were tiled against various decisions of the Andbra Pradesh H 477 478 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R. A High Court upholding the validity of the amendments to the A.P. Foreign Liquor and Indian Liquor Rules, 1970 and A.P. (Regulations of wholesale Trade, Distribution and Retail Trade in Indian Liquor and Foreign Liq- uor, Wine and Beer) Act, 1993. B Two rival contentions of law raised. One, that there was no fun- damental right to trade or business in liquor and that the State had power to regulate the trade or business by placing restrictions on such trade or business in the interests of the general public even to the extent of prohibiting completely such business or trade. The other contention was that a citizen had a fundamental right to trade or business in liquor and C the State could only place reasonable restriction on the said right in the interests of general public by law made for purpose under Article 19 (6) of the Constitution. The State could not, therefore, prohibit completely the said trade or business in liquor in the garb of regulating it, and the limitations or restrictions placed had to pass the test of reasonableness. D These matters were referrel\ to the Constitution Bench to decide questions, firstly whether the pe:itioners/appellants had a fundamental right to carry on trade in liquor and secondly, whether the State could prevent the petitioners from carrying on with the business of liquor as apart from trade, during the unexpired period of the licences. Two inciden- E ta! questions raised were (i) .whether a monopoly for the manufacture, trade or business in liquor could be created in favour of the State and (ii) whether reasonable restrictions under Article 19 (6) of the Constitution could be placed only by Act of Legislature or by a subordinate legislation as well. F It was contended that the State could not carry on trade in liquor under Article 47 of the Constitution. If the law on the subject was con- sidered to be law under Article 19(6), it bad to be on the basis that a citizen had got a fundamental right to trade in liquor. If the law was that a citizen bad no fundamental right, then Article 19(6) could not be applied because G the said article applied only to those rights which a citizen possessed. What a citizen could not do under Article 19 (1), the State could not do under Ar
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