LexNASHIRWAR ETC. ETC. versus THE STATE OF MADHYA PRADESH
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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NASHIRW AR ETC. ETC.
v.
THE STATE OF MADHYA PRADESH
November 27, 1974
861
[A. N. RAY, C.J., K. K. MATHEW AND N. L. UNTWALIA JJ.]
Central Provinces Excise Act; 1915--S. IS-Whether the State has the power
to gram liquor licences by public auction-Whether. violates fundamental right
under Art. !9(1)(g) of the Constitution.
Constit111wn of India, 1950-Art. 19(1)(g)-Entry 8, List U.
Under the Central Provinces Excise Act, 1915 (which was the .Act applicable
to the State of Madhya Pradesh) the excise 1111thorities granted licences for
selling foreign liquor under a system of fee per bottle. From the year 1964-65
the State Government decided that licences for foreign liquor should be disposed
of by public auction.
The appellants unsuccessfully
challenged before
the
High Court the authority of the State to hold public auctions for grant of.
licences for foreign liquor.
In 1964 th'e Act woo amended, as a result of
which the State could grant leases in respect of both country and foreign
liquor.
By a notification the State Government declared that it would grant
·foreign liquor licences by public auction. Similarly the impugned Act of
Kerala State places restrictions on the manufacture, sale, import and export
of liquor. The appellants in the Madhya Pradesh case and the petitioners
in the Kerala case have questioned the constitutional validity of the restrictions
on the ground that they deprive them of the fundamental right to carry on
trade in· liquor. It was ,contended that the right to trade in liquor was not
declared by the legislature to be a monopoly of the. State to exclude trade in
liquor from the operation of Art.19(1 )(g) as a fundamental right to trade.
Dismissing the appeals and. writ petitions :
HELD : 1 (a) The State has exclusive right or privilege of manufacturing
and selling liquor. The State grants such right or privilege in the shape
of ·a licence or a lease. The State has power to hold public auction for
grant of such right or privilege and accept payment of. money in consideration
of grant of lease. [872-B]
(b) The State legislatme is authorised to
make a provision for public
au;tion by reason of the power contained in Entry 8, List II of the Constitu-
tion. That entry empowers the State Governm.ent to legislate with regard to
intoxicating liquor, that is to say, oroduction, manufacture, possession .. transport,
purchase and sale of intoxicating liquor. [865-F]
(2) (a) There are three principal reasons to bold that there is no funda-
mental right of citizens to carry on trade or to do business in liquor. First,
·there. is the police power of the State to enforce public morality, to orob.ibit
trades in noxious or dangerous got>ds.
Second, there is power of the State· to
enforce an absolute probibitio!l of manufacture or sale of intoxicating liquors.
Article 47 s~tes that. the State shall. endeavour to bri.ip ll·. about prohibition of
the consumption; ~tept for medical {lurposes, of into~l1lting drinks and df'\lis
which arc injurious to health. Third" the history of excis.i law in India shOws
that the State has . the exclll'Sive right 'Qr privilege of manufacture or sale of
liquor.
[8~J.il
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(b) Trild(lh'~.quor.has historically .. ~~ ori,a difte)'e~':f9oting.from .1·
··
trades; Itestr1oflo11S which are nol ip6rnuss1ble with btlttr
!les are lawful
reasonable 10 .far : . .as the trade' in· .liquor is .::oru:ei'iiell)) -hat Is why e'i>
prohibition Q~.~·tradp ln liquor•·is·~ .only permissib\e. ~~.is also.reasonable.
T.be reasons are" 'pubhc morality, public interest andr harniful and danger11111
character of the liquor. The State p<>ssesses. the · right' Of complete · corifrol
over all aspects of intoxicants viz., ,maqufacture, colle~tion, sale and consump-
tion. The State• Ms exclusive· rlSh'f 1tol1ilanufact11re ad/114lel! liquor and. Ii> ~
the said right in ·order to raise revenue. [8710-EJ
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(. -
862
SUPREME COURT REPORTS
[1975J 2.~.C.lt.
Cc) The nature of the trade is such that the State confers right to vend
liquor by farming ou.t either in auction or on private treaty. Rental is the
consideration for the privilege granted by tile Government for manufacturing or
vending liquor. Rental is neither a tax nor an excise dllty.
Rental is the
consideration for the agreement for grant of privilege by the Government. [87 lF] .
(d) The grant of a lease either by public auction or for a sum is ,a
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