Liquor licence as personal privilege: partnership to exploit the licence treated as an impermissible transfer and void.

A liquor licence treated as a personal privilege under the Abkari law could not be shared through a partnership arrangement without consent. The court construed the prohibition on sale or "other transfer" broadly, holding that any arrangement by which the licensee parts with part of the exclusive privilege in favour of others amounts to an impermissible transfer. A partnership formed to exploit the licence was therefore contrary to the Abkari Act, the Rules and public policy, and was void under the Contract Act. As a result, the arrangement was not recognised as a genuine partnership for income-tax registration.

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Issues: Whether a partnership formed by an individual liquor licensee for exploiting the licence was valid and entitled to registration under the Income-tax Act, and whether such arrangement amounted to an ed transfer of the licence under the Abkari law.

Analysis: The statutory scheme treated the liquor licence as a personal privilege and forbade the licensee from selling or otherwise transferring the contract or licence without consent. The relevant rules were construed in the light of the public policy against unrestricted dealing in intoxicating liquor. The expression "or otherwise transfer" was given a wide meaning so as to cover any arrangement by which the licensee parts with a portion of his exclusive privilege in favour of others. On that construction, entering into a partnership to exploit the licence amounted to an impermissible transfer of the licence interest, rendering the partnership contrary to the Abkari Act and the Rules and therefore void under the Contract Act.

Conclusion: The partnership was not a genuine and lawful partnership for income-tax purposes and was not entitled to registration.

Ratio Decidendi: Where the liquor licensing law treats the licence as a personal privilege and prohibits its sale or other transfer, a partnership formed to share and exploit that privilege is void and cannot be recognised as a genuine partnership for registration under the Income-tax Act.

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