STATE OF MADHYA PRADESH Vs. NANDLAL JAISWAL

JUDGEMENT

(1.) THESE appeals by special leave are directed against a judgment of the Madhya Pradesh High Court in what has come to be known as, M. P. Liquor case, brought before the High Court by way of three writ petitions under Art. 226 of the Constitution. Writ Petn. No. 3718 of 1985 was filed by one Nandlal Jaiswal on 28/11/1985 while Writ Petn. No. 335 of 1986 was filed by one Sagar Agarwal on 24/01/1986. Both these writ petitions were directed against the policy decision of the State of Madhya Pradesh contained in the Cabinet decision dated 30/12/1984. The third writ petition, viz., Writ Petition No. 785 of 1986 was also filed challenging the same policy decision of the State of Madhya Pradesh by a firm called M/s. Doongaji and Co. but it was filed much later at a time when arguments were actually going on in Court in the first two writ petitions. The respondents in the first two writ petitions were not aware at that time that it was a writ petition which was filed by M/s. Doongaji and Co. They thought that it was merely an intervention application since no notice was served upon them and they had also no opportunity of filing an affidavit in reply to that writ petition. All these three writ petitions were disposed of by a common judgment delivered by a Division Bench of the High Court consisting of Acting Chief Justice J. S. Verma and Justice B. M. Lal. Both the learned Judges, by separate judgments, substantially set aside the policy decision dated 30/12/1984. Since the decision of the High Court for all practical purposes went against the respondents, they preferred Civil Appeals Nos. 1622 to 1639 of 1986 before this Court by special leave. M/s. Doongaji and Co. and Nand Lal Jaiswal also, to the limited extent that they did not succeed, filed special leave petitions Nos. 6206 and 7440 of 1986. That is how the present appeals and special leave petitions have come up before us. The facts giving rise to these appeals and special leave petitions are material and need to be stated in some detail.

(2.) BUT, before we advert to the facts, it is necessary to set out the relevant provisions of Madhya Pradesh Excise Act, 1915 which is the statute regulating manufacture, sale and possession of intoxicating liquor in the State of Madhya Pradesh. originally, this Act was enacted for the former Province of C.P. and Berar but subsequently, after the coming into force of the Constitution, it was extended to the State of Madhya Pradesh by M.P. Extension of Laws Act, 1958 and it was rechristened as M.P. Excise Act 1915. Section 2(13) of the Act defines liquor' to mean 'intoxicating liquor' and to include "spirits or wine, tari, beer, all liquid consisting of or containing alcohol, and any substance which the State Government may, by notification, declare to be liquor for the purpose" of the Act. The term "manufacture" is defined in Section 2(14) to include "every process, whether natural or artificial, by which any intoxicant is produced or prepared, and also redistillation and every process for the rectification, flavouring, blending or colouring of liquor". There is also the definition of ,spirit' in Section 2(17) which provides that "spirit" means any liquor containing alcohol obtained by distillation whether it is denatured or not. Chapter IV of the Act is headed 'Manufacture, Possession and Sale' and that is the chapter with which we are concerned in the present appeals. Section 13 provides, inter alia, that no distillery or brewery shall be constructed or worked and no person shall use, keep or have in his possession any material, still, utensil, implement or apparatus whatsoever for the purpose of manufacturing any intoxicant other than tari, except under the authority and subject to the terms and conditions of a licence granted in that behalf. It is also obligatory under this section to have a licence for manufacture of intoxicant and for bottling liquor for sale and no intoxicant can be manufactured and no liquor can be bottled for sale without such licence. Section 14 is a material section and it may, therefore, be reproduced in extenso :

(3.) IT is also clear from Rules III, IV and V which we have set out above, that there are two purposes for which a licence in Form D. 2 for construction and working of a distillery may be granted. IT may be granted as an adjunct to the licence in Form D. 1 under Rule IV or it may be granted as an independent licence under Rule V irrespective whether the grantee holds a licence in Form D. 1 or not. There are also two types of licences for wholesale supply of country liquor to retail vendors, namely, licence in Form D. 1 and licence in Form D. 1 (s). The licence in Form D. 1 in clause 5 clearly contemplates that the holder of such licence must also have a licence in Form D. 2. No one can have a licence in Form D. 1 unless he has simultaneously a licence in Form D. 2. He must have a distillery in which he distils country spirit in order that he should be able to make wholesale supply of country liquor to retail vendors. If for any reason he is unable to obtain licence in Form D. 2 for working a distillery, no licence in Form D. 1 can be given to him and if he has such licence, it would become ineffective. IT is for this reason that when a person is granted a licence in Form D.1 by the Excise Commissioner under Rule III, he is also simultaneously granted a licence in Form D. 2 under Rule IV and the period of both the licences is conterminous. But, though a person cannot be granted a licence in Form D. 1 unless he also obtains licence in Form D. 2, the converse does not hold true. A licence in Form D. 2 can be granted to a person under Rule V even though he does not hold a licence in Form D. 1. Where a person is granted a licence in Form D. 2 for working a distillery under Rule V, without having a licence in Form D. 1 for wholesale supply of country liquor to retail vendors, he cannot make wholesale supply of country liquor manufactured by him to retail vendors but he can supply such country liquor to a person holding licence in Form D. 1(s) or he can manufacture rectified spirit, denatured spirit or foreign liquor as contemplated in Condition 3 of the licence in Form D. 2. IT is not necessary that a person holding a licence in Form D. 2 must also simultaneously have a licence in Form D. 1.