MADRAS CITY WINE MERCHANTS' ASSON. AND ANR. versus STATE OF TAMIL NADU AND ANR.

Citation: [1994] SUPP. 2 S.C.R. 281 · Decided: 27-07-1994 · Supreme Court of India · Bench: S. MOHAN · Disposal: Dismissed
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Judgment (excerpt)

MADRAS CITY WINE MERCHANTS' ASSON. AND ANR. 
A 
v. 
STATE OF TAMIL NADU AND ANR. 
JULY 27, 1994 
(S. MOHAN AND M.K. MUKHERJEE, JJ.j 
B 
Administrative Law : 
Doctn·ne of legitimate expectation-May arise in apress promise, 
regular practice and administrative decision-Change of policy by legisla-
C 
tion-17tis doctrine cannot be invoked-Tamil Nadu Liquor (Retail vending 
in Bar) Rules, 1992. 
' The appellants are licence holders to carry on business in the retail 
vending of Indian made foreign spirits (I.M.F.S.). Persuant to repre-
sentation from the appellants, the respondents framed Tamil Nadu Liquor D 
(Retail vending in Bar) Rules 1992 (Bar Rules) which permitted them to 
have Bars attached to their shops. 
As the drinking in the Bar led to law and order problems, the Bar 
Rules were rescinded by the respondents. The appellants challenged this 
decision before the High Court but were not successful. Aggrieved by the 
E 
High Court's judgment, the appellants preferred the present appeal. 
On behalf of the appellants it was contended that a privilege once 
accrued cannot be taken away; that the rules relating to retail trade in 
IMFS and the rules relating to sale in Bars formed an integral scheme; 
F 
and that the change in policy affected their legitimate expectation. 
On behalf of the respondents it was contended that it is always open 
to a State to change its policy; that Bar licence is a privilege so right to 
renewal does not arise; and that legislative action is not subject to natural 
justice. 
G 
Dismissing the appeals, this Court 
HELD : 1. The Retail vending rules and the Bar Rules are two 
separate sets of rules. It is incorrect to contend that both these Rules form 
an integrated scheme. Merely because for obtaining the Bar licence, one H 
281 
282 
SUPREME COURT REPORTS (1994] SUPP. 2 S.C.R. 
A must bea holder of retail vending licence, they cannot become integrated 
schemes. Each set of Rules take care of different situations. (300-E] 
State of M.P. v. Nandlal Jaiswal, (1984] 4 SCC 566, held inapplicable. 
2. It is clear that legitimate expectation may arise if there is an 
B express promise given by a public authority; or because of the existence of 
a regular practice which the claimant can reasonably expect to continue; 
such an expectation must be reasonable. (301-F] 
State of H.P. v.Kai/aslt Cltand Mahajan, (1992] Supp. 2 SC 351; Food 
Corporation of India v. M/s. Kamdhemt Cattle Feed Industries, JT (1992) 6 
C S.C. 259 and Union of India v. Hind1istan Development Corporation, JT 
(1993) 3 S.C. 15, relied on. 
Council of Civil Service Unions v. Minister for tlte Civil Services, (1984] 
3 All ER 935 and Halsbury's Laws of England, Vol. 1(1) Fourth Edition 
D para 81 at pp 151-152, referred to. 
3. The licence under the Bar Rules is for a period of one year which . 
could be renewed by a payment of a privilege amount as lixed by the State 
Government. Therefore, there is no room for any expectation. At best, it 
could be a hope. Long before the Bar licensee could apply for renewal the 
E policy decision has been taken not to renew. It is clear that there was 
absoJutely no promise of renewal at all. (312-E-F] 
F 
4. The Bar Rules have been repealed by exercise of the powers under 
Sections 17C, 17D, 21 and 54 of the Tamil Nadu Prohibition Act, ·1937. 
Therefore, this is a case oflegislation. The doctrine of legitimate expecta-
tion arises only in the lield of administrative decisions. There is no 
possibility of invoking the doctrine as against the legislation. (314-C-D] 
Supreme Cowt Advocates - on - Record Association v. Union of India, 
(1993] 4 SCC 441 and R. Vijaykumar v. The Commissioner of Excise, JT 
G (1993) 6 S.C. 325, held inapplicable. 
5. It is a settled principle that legislative action, plenary or subor-
dinate, is not subject to natural justice. When the consumption of liquor 
in Bars resulted in law and order problems, certainly in public interest the 
State could repeal the grant of Bar licences. There is nothing un-
H reasonable. (315-E, 316-D] 
: 
WINE MERCHANTS' ASSON. "· STATEOFT.N. [MOHAN,J.] 
283 
Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India, A 
(1985) 2 SCR 287, relied on. 
Vasantkwnar Radhakishan Vohra v. Board of Tmstees of the Pon of 
Bombay, [1991) 1 SCC 761, held inapplicable. 
6. If no right or privilege in the matter of Bar licences could operate B 
beyond 31.5.1993, the benefit of Section 8 of the Tamil Nadu General 
Clauses Act, cannot be had.
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