LexM/S. RAMNARAYAN SATYANARAYAN AGRAWAL versus ASSOCIATED ALCOHOLS AND BREWERIES LTD. AND ORS.
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A MIS. RAMNARAYAN SATYANARAYAN AGRAWAL v. ASSOCIATED ALCOHOLS AND BREWERIES LTD. AND ORS. MAY 10, 1995 B [A.M. AHMADI, CJ, S.P. BHARUCHA AND SUHAS C.SEN, JJ.] Industries (Development and Regulation) Act, I951-Section JI-In- dustrial undertaking-Licence to manufacture potable alcohol-A factory employing less than 50 workers-Whether can be treated as an 'industrial C undertaking'-Held, No-It does not require a licence u/s 11 to manufacture potable alcohol. Constitution of India-Entry 8, List II-Intoxicating liquors-Manufac- ture potable alcohol-Appellant being not an industrial undertaking as defined in Section 3(d) of Industries (Development and Regulation) Act, no D special licence from Central Government is necessary. The State Government granted permission to give licence in favour of the appellant to manufacture potable alcohol in pursuance of his ap- plication. The Excise Commissioner issued a notice dated 8-7-1993 inviting E tenders for supply of country liquor in the State. The tender of the appellant being much lower was accepted. The respondents filed a writ petition ques- tioning the right of the appellant to make its tender on the grounds that the appellant only held an authorisation from the State Government; that the State Government had no power, authority or jurisdiction in the matter of licensing the manufacture of potable alcohol; that only the Central Govern- F men! possesses such licensing authority and that the appellant did not hold any licence from the Central Government. The High Court allowing the . Writ petition held that the alcohol industry can be set up only after obtain- ing a licence from the Government of India and thereafter the State shall have the control of the industry in terms of Entry 8 of list II of the Con- G stitution which gives power to the State to legislate in respect of intoxicating liquor. It was held that without a licence from the Central Government, an industrial undertaking for production or manufacture of alcohol cannot be set up. Therefore the appellant had to obtain a licence from the Central Government for setting up of an industry for manufacture of potable al- cohol. The Court further held that licences for setting up of industries for H manufacture of potable alcohol and industrial alcohol has to be obtained 330 • • \ R.S. AGRAWAL v. ASSOCIATED ALCOHOLS AND BREWERIES 331 separately and it cannot be treated as one and the same product. The A appellant challenged the order by filing this appeal by special leave. The appellant contended that the provisions of the Industries (Development and Regulation) Act, 1951 would not apply to an industrial unit in which less than fifty persons are employed. The manufacturing process of appellant's business establishment was being carried out by only B 22 workers and therefore, the appellant's business undertaking could not be treated as a factory nor an 'industrial undertaking' as defined u/s 3(d) of the Act. It was alleged that the appellant could not be compelled to obtain a licence u/s 11 of the Act. The question raised was whether the appellant was an 'industrial C undertaking' as defined in the Act. Allowing the appeal, this Court HELD: 1.1. Under the provisions of the Industries (Development and D Regulation) Act, if it any premises fifty or more workers are working with the aid of power or one hundred or more workers are working without the aid of power, then that place will be treated as a 'factory'. In order to be an 'industrial undertaking', as defined in the Act, it must be an undertaking carried on in 'one or more factories'. [339-D] In the instant case, since the appellant did not employ more than 22 persons, its place of manufacture could not be regarded as a 'factory'. Consequently, his business organisation could not be treated as an 'in- dustrial undertaking' as defined in the Act. The appellant's undertaking E did not come within the mischief of the Act and the appellant could not be required to obtain a licence from the Central Govt. in order to carry on F business of manufacturing potable alcohol. [339-E-F] 1.2. Entry 8, List II of the Constitution of India relates to 'intoxicat- ing liquors, that is to say, the production, manufacture, possession,. transport, purchase and sale of intoxicating liquors'. The production and manufacture of intoxicating liquors will fall within the jurisdiction of the G State. Every step that is necessary to be ta
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