1994 (7) TMI 366 - SC - Indian Laws

Court dismisses appeals & writ petition on liquor rules, finds no integrated policy.

MADRAS CITY WINE MERCHANTS’ ASSON. AND ANR. Versus STATE OF TAMIL NADU AND ANR.

The court dismissed the appeals and the writ petition, ruling that the Tamil Nadu Liquor (Retail Vending) Rules, 1989 and Tamil Nadu Liquor (Retail ... - Issues Involved:1. Whether the Tamil Nadu Liquor (Retail Vending) Rules, 1989 and Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 form an integrated policy.2. Whether the appellants can claim the benefit of the doctrine of legitimate expectation.3. Whether the rescinding of the Bar Rules by the impugned G.O. was arbitrary and violated Article 14.4. Whether the appellants could claim the benefit of Section 8 of the Tamil Nadu General Clauses Act.Issue-wise Detailed Analysis:1. Integrated Policy:The court examined whether the Tamil Nadu Liquor (Retail Vending) Rules, 1989 and Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 form an integrated policy. It was concluded that these are two separate sets of rules. The Retail Vending Rules deal with the retail vending of Indian Made Foreign Spirits (IMFS), while the Bar Rules regulate the issue of licenses and the privilege of retail vending of liquor in bars. The mere fact that one must hold a retail vending license to apply for a bar license does not integrate these rules into a single policy. Thus, the argument that they form an integrated scheme was rejected.2. Doctrine of Legitimate Expectation:The doctrine of legitimate expectation was discussed extensively. The court noted that legitimate expectation may arise from an express promise or a consistent past practice. However, it emphasized that such an expectation must be reasonable and cannot preclude changes in policy or public interest. In this case, the bar licenses were for a period of one year and could be renewed only on the privilege amount fixed by the State Government. Given the lack of an express promise of renewal and the policy decision announced before the renewal applications were due, the court concluded that there was no legitimate expectation for renewal. The court also noted that the doctrine of legitimate expectation applies primarily to administrative decisions and not to legislative actions.3. Arbitrariness and Violation of Article 14:The court addressed whether the rescinding of the Bar Rules was arbitrary and violated Article 14. It was established that legislative actions, including subordinate legislation, are not subject to the principles of natural justice. The decision to repeal the Bar Rules was based on public interest considerations, including law and order issues and complaints from the public, particularly from women. The court found that the government acted within its policy-making authority and that the decision was neither arbitrary nor unreasonable. The court also noted that the government is competent to formulate policies and that the repeal of the Bar Rules was a matter of policy.4. Section 8 of the Tamil Nadu General Clauses Act:The court examined the applicability of Section 8 of the Tamil Nadu General Clauses Act, which deals with the effect of repeals. It was noted that Section 54 of the Prohibition Act is a rule-making section, and the rules and notifications issued under it have the effect of being enacted in the parent act. The court agreed with the High Court's reasoning that the repealed rules ceased to exist after 31.5.1993, and the privilege and licenses granted under those rules were valid only up to that date. Therefore, the appellants could not claim the benefit of Section 8 to extend the validity of their licenses beyond the repeal date.Conclusion:The court dismissed the appeals and the writ petition, concluding that the Tamil Nadu Liquor (Retail Vending) Rules, 1989 and Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 do not form an integrated policy. The appellants could not claim the benefit of the doctrine of legitimate expectation or Section 8 of the Tamil Nadu General Clauses Act. The rescinding of the Bar Rules was not arbitrary and did not violate Article 14. The appeals and writ petition were dismissed with no order as to costs.