B NARAGAPPA Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The petitioner is the holder of a number of licences issued under the Karnataka Excise (Lease, of the Right of Retail Vend of Liquors) Rules, 1969 (hereinafer referred to as 'the Rules'), for selling liquor in retail in several shops in the district of S. Kanara during the excise year 1973-74 ending with the 30th of June, 1974. He has presented this writ petition questioning the validity of the Notification published in Karnataka Gazette (Exy.) dt.Mar.19, 1974 by the Excise Commr. under Rule 4 of the Rules stating that the privilege to vend liquor in retail in the State of Karnataka would be disposed of by public auction by the Deputy Commrs of the districts concerned, on the dates and at time and places specified in Sch.V thereof.

(2.) The contentions of the petitioner are : (1) that the Notification issued in so far as the district of S.Kanara is concerned, stating that the privilege would be disposed of both on shopwise basis and groupwise basis is not in conformity with Rule 4 of the Rules; (ii) that the State Government was not competent to issue any instruction to the Excise Commr. regarding the manner in which the privilege should be disposed of in the several parts of the State; and (iii) that the Notification issued in the case of the Dist. of S.Kanara is violative of Art.14 of the Constn., because, in the case of district of Bangalore, there is a provision for disposing of the privilege on Talukwise basis and districtwise basis also, in addition to shopwise basis and groupwise basis, whereas in the case of district of S.Kanara. the privilege can be disposed of either on shopwise, or on groupwise basis only. Sec.17 of the Karnataka Excise Act authorises the State Govt. to lease to any person, the exclusive right of selling liquor in retail. The State Govt. has framed the rules in exercise of the powers vested in it under S.71 of the Act providing for the procedure to be followed in connection with the disposal of the privilege to vend liquor in retail. Rules 3 and 4 of the Rules which are relevant for the purpose of this case read as follows: " 3(1). Lease of Right of Retail Vend-The right of retail vend liquors may be disposed of- (i)) by tender; (ii) by auction; (iii) by tender-eum-auction; (iv) in any other manner; as the State Govt. may, by order, specify; Prqvided that if the disposal is not finalised in any one manner, the State Govt may, by order, direct that it may be done in any other manner. (2) .............. 4. Notification by the ExcAsc Commissioner-After an order under Rule 3 is made, the Excise Commr. shall issue a Notification containing the following particulars, namely : - (i) the name ox names of shops or group Off shops of liquors in taluk or taluks or district or districts to be disposed of; (ii) where the disposal is by tender, the last date for receipt of tenders, the time and place of their consideration; (iii) where the disposal is by auction, the date on which, the time at which and the place in which the auction will be held; (iv) Where the disposal is by tender-cum-auction, the last date for receipt of tenders and the time at which and the place in which the auction will be held: (v) the period of lease; (vi) the general conditions governing the tender, auction or tender- cum-auction."

(3.) The first contention urged on behalf of the petitioner is that it was not permissible to issue a Notification under Rule, 4 of the, Rules stating that the auction would be held both on shopwise basis and on groupwise basis (the expression 'group' means 'group of shops') . Reliance is placed in support of the above contention by Shri Mohandas N. Hegde on the word 'or' appearing between 'shops' and 'group of shops' in Rule 4(i) of the Rules. The question for consideration is whether the presence of the word 'or' in Rule 4(i) makes it obligatory on the part of the Excise, Commr. to issue a I' otification to auction the excise privilege in question, either on shopwise basis or on groupwise basis and not in both the ways. It is asserted on behalf of the State Govt. that Rule 4(i) should be read as permitting the Excise Commr. to hold auction in all the modes permissible under Rule 4 (i) So that the State Govt might accept the bids in respect of either shops or group of shops, depending upon the total amqunt realised at the auction. The auctions are held under the Rules for the purposes of realising excise revenue and the Govt. is vitally interested in realising the highest revenue from any particular area or shop or group of shops. In that process, if the Commissioner publishes a Notification calling for bids both on shopwise basis and on groupwise basis, so that he could accept higher Off the two defending upon the bids ultimately offered by the bidders, it cannot be said that the procedure adopted by him is contrary to Rule 4(i). Although ordinarily the expression 'or' is used to understand the word preceeding it and the woid following it disjunctively, it cannot be said that the said expression conveys the meaning that one excludes the, other in all cases. In interpreting the said expression, the Court should bear in mind the nature of the legislation, the interest that are affected by it and the object with which it is enacted. The legislation In question is one enacted with the object of regulating the consumption of liquor in the, State of Karnataka." The object of S. 17 of the Act and the rules made thereunder is to see. that the State's exchequer is able to realise the maximum excise revenue possible in any area or place. It is well known that in the case of an excise licence, under which liquor is sold in retail, the person who, would be, affected would not be certainly the licencee but the consumer. The person before the Court is not at all affected because, any duty to be paid ordinarily would be passed on to the consumer. The petitioner is not certainly representing the class of consumers before the Court in this petition. If these facts are borne in mind, it is clear that the "Excise Commr. is entitled under Rule 4 to advertise the auction of the privilege in all the possible modes, so that ultimately, he can dispose of it in one of those methods by which, he is able to collect the highest excise revenue in any area or from any shop. I, therefore, reject the contention urged on behalf of the petitioner that it was not permissible, for the Excise Commr. to issue the Notification providing for auction on shopwise, basis as well as groupwise basis, in the case of the district of South Kanara.