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of <h1>No fundamental right to run liquor business; State may prohibit or monopolize manufacture, sale under Art.19(6) and Art.47</h1> SC held that there is no fundamental right to carry on trade or business in potable liquor as a beverage; liquor as beverage is res extra commercium and ... Fundamental right to carry on trade in liquor - Monopoly and Reasonable Restrictions - validity of the government order 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 - 'trade' is different from 'business' - Whether the State can prevent the petitioners from carrying on with the business of liquor as apart from trade, during the unexpired period of the licences? Held that:- There is no doubt that the word 'business' is more comprehensive than the word 'trade' since it will include manufacture which the word 'trade' may not ordinarily include. The primary meaning of the word 'trade' is the exchange of goods for goods or goods for money. However, the word 'trade' has also secondary meaning, viz., business carried on with a view to profit. In fact, the words 'trade' and 'industry' are also used interchangeably many times. It all depends upon the context in which the words occur. We may now summarise the law on the subject as culled from the aforesaid decisions. The rights protected by Article 19(1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, to be read along with the said qualifications. Even the rights guaranteed under the Constitutions of the other civilized countries are not absolute but are read subject to the implied limitations on them. Those implied limitations are made explicit by clauses (2) to (6) of Article 19 of our Constitution. The right to practise any profession or to carry on any occupation, trade or business does not extend to practising a profession or carrying on an occupation, trade or business which is inherently vicious and pernicious, and is condemned by all civilised societies. It does not entitle citizens to carry on trade or business in activities which are immoral and criminal and in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public, i.e., res extra commercium, (outside commerce). There cannot be business in crime. Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commerce being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country. The State has, therefore, the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage, both because it is inherently a dangerous article of consumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purposes. For the same reason, again, 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 the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. The State can adopt any mode of selling the licences for trade or business with a view to maximise its revenue so long as the method adopted is not discriminatory. The mere fact that the State levies taxes or fees on the production, sale and income derived from potable liquor whether the production, sale or income is legitimate or illegitimate, does not make the State a party to the said activities. The power of the State to raise revenue by levying taxes and fees should not be confused with the power of the State to prohibit or regulate the trade or business in question. The State exercises its two different powers on such occasions. Hence the mere fact that the State levies taxes and fees on trade or business in liquor or income derived from it, does not make the right to carry on trade or business in liquor a fundamental right, or even a legal right when such trade or business is completely prohibited. The State cannot prohibit trade or business in medicinal and toilet preparations containing liquor or alcohol. The State can, however, under Article 19(6) place reasonable restrictions on the right to trade or business in the same in the interests of general public. Likewise, the State cannot prohibit trade or business in industrial alcohol which is not used as a beverage but used legitimately for industrial purposes. The State, however, can place reasonable restrictions on the said trade or business in the interests of the general public under Article 19(6) of the Constitution. The restrictions placed on the trade or business in industrial alcohol or in medicinal and toilet preparations containing liquor or alcohol may also be for the purposes of preventing their abuse or diversion for use as or in beverage. We, therefore, hold that a citizen has no fundamental right to trade or business in liquor as beverage. The State can prohibit completely the trade or business in potable liquor since liquor as beverage is res extra commercium. The State may also create a monopoly in itself for trade or business in such liquor. The State can further place restrictions and limitations on such trade or business which may be in nature different from those on trade or business in articles res commercium. One of the incidental contentions, viz., whether the State can create monopoly in trade or business in potable liquor is already answered above. This is apart from the fact that Article 19(6) provides for such monopoly in favour of the State even in trades and businesses which are legitimate. It is not, therefore, necessary to dilate upon this aspect any further. The word 'trade' may include all the connotations of the word 'business'. As in Article 19(1)(g) of our Constitution, the words 'trade' and 'business' are used synonymously. Hence, we reject the contention and hold that after the taking-over of the trade, viz., the activity of buying and selling liquor, no activity was left with the petitioners to carry on under the licence held by them. Issues Involved1. Constitutional validity of Karnataka Excise (Amendment) Rules, 1989.2. Validity of the Kerala Government's order canceling foreign liquor licenses.3. Validity of Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 amendments and the A.P. 1993 Act.4. Whether the A.P. 1993 Act deals with the trade or business of liquor and the State's right to prevent business during the validity of licenses.Detailed Analysis1. Constitutional Validity of Karnataka Excise (Amendment) Rules, 1989The appellants challenged the constitutional validity of various Karnataka Excise (Amendment) Rules, 1989, arguing that these rules adversely affected their fundamental right to carry on trade or business in liquor and were violative of Articles 14, 19(1)(g), 47, 300-A, 301, and 304 of the Constitution of India. The High Court dismissed these challenges. The Supreme Court had to decide whether the appellants/petitioners have a fundamental right to carry on trade in liquor.2. Validity of the Kerala Government's Order Canceling Foreign Liquor LicensesThe Kerala High Court upheld the validity of a government order dated 9-12-1992, which canceled all foreign liquor licenses issued under Rule 13(3) of the Kerala Foreign Liquor Rules, 1974, to hotels, restaurants, and tourist homes. The Supreme Court was tasked with deciding whether the appellants have a fundamental right to carry on trade in liquor.3. Validity of Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 Amendments and the A.P. 1993 ActThe Andhra Pradesh High Court upheld the validity of amendments to the Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970, and the A.P. 1993 Act. The High Court ruled that these rules and the Act did not violate the right to carry on trade in liquor, as it is not a fundamental right. The Supreme Court had to consider whether the appellants/petitioners have a fundamental right to carry on trade in liquor.4. Whether the A.P. 1993 Act Deals with Trade or Business of Liquor and the State's Right to Prevent Business During the Validity of LicensesThe appellants argued that the A.P. 1993 Act deals only with the taking over of trade in liquor and not business, and thus the State had no right to prevent them from carrying on business during the validity of their licenses. The High Court dismissed this argument, and the Supreme Court had to decide whether the State can prevent the petitioners from carrying on with the business of liquor during the validity of their licenses.Supreme Court's JudgmentFundamental Right to Trade in LiquorThe Supreme Court held that there is no fundamental right to trade or business in liquor. The State has the power to regulate the trade or business by placing restrictions in the interests of the general public, even to the extent of completely prohibiting such business or trade. The Court noted that liquor is classified into potable liquor, medicinal and toilet preparations, and industrial liquor. The State has the exclusive privilege to sell liquor and can also have a monopoly in manufacturing, possessing, and distributing liquor.Monopoly and Reasonable RestrictionsThe Court examined whether a monopoly for the manufacture, trade, or business in liquor can be created in favor of the State and whether reasonable restrictions under Article 19(6) of the Constitution can be placed only by an Act of Legislature or by subordinate legislation. The Court concluded that the State can create a monopoly and impose reasonable restrictions through either legislative or subordinate legislation.State's Power Under Article 47The Court discussed the State's power to carry on trade in liquor under Article 47 of the Constitution, which mandates the State to endeavor to bring about prohibition of the consumption of intoxicating drinks and drugs injurious to health. The Court held that the State's power to regulate and restrict the business in potable liquor includes the power to carry on such trade to the exclusion of others.Analysis of Previous JudgmentsThe Court reviewed various judgments, including State of Bombay v. F.N. Balsara, Cooverjee B. Bharucha v. Excise Commissioner, and Krishna Kumar Narula v. State of J & K. The Court reiterated that there is no fundamental right to trade or business in intoxicants and that the State has the power to prohibit absolutely every form of activity in relation to intoxicants.ConclusionThe Supreme Court concluded that a citizen has no fundamental right to trade or business in liquor as a beverage. The State can prohibit completely the trade or business in potable liquor, create a monopoly in itself for such trade, and impose restrictions and limitations on such trade or business. The Court also held that the State can place restrictions under Article 19(6) through subordinate legislation.Specific Case of A.P. 1993 ActIn the case of the A.P. 1993 Act, the Court held that the Act deals with taking over the wholesale trade and distribution of liquor and that the petitioners' licenses were terminated lawfully. The contention that the Act dealt only with trade and not business was rejected.SummaryThe Supreme Court's judgment clarified that there is no fundamental right to trade or business in liquor, and the State has the power to regulate, restrict, or prohibit such trade. The Court upheld the validity of the Karnataka, Kerala, and Andhra Pradesh Excise Rules and Acts, affirming the State's authority to control the liquor trade in the interest of public health and welfare.
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