EMBASSY RESTAURANT Vs. DELHI ADMINISTRATION

JUDGEMENT

(1.) The petitioners. Embassy, Gaylords, Quality, Standards and Volga are well known restaurants running at Connaught Place, New Delhi. They have challenged the constitutional "validity of rule 18 of the Delhi Liquor Licensing Rules, 1976 which provides that a licence for liquor in form L-5 for the retail vend of foreign liquor in a Bar may only be granted to the holders of a licence in form L-3 for the retail vend of foreign liquour in Hotel or Restaurant. The purport of the impugned order is that Indian made foreign liquor can be sold in Restaurants which form part of ahotel but cannot be sold in restaurants, which are running as independent restaurants, not being a pan of any hotel. The petitioners contend that rule 18 is discriminatory and violates article 14 of the Constitution of India. These petitions were heard by the bench consisting S.S. Chadha, and Y.K. Sabharwal, JJ. Justice Chadha held that rule 18 was unconstitutional being violative of article 14 while Justice Sabharwal held that rule 18 was free from the said vice of discrimination and was valid, in view of this difference of opinion the reference is made to me as a third Judge.

(2.) Both the learned Judges have elaborately traced the legislative history of the liquor regulations and history of liquor licensing in Delhi. They have also referred to some decisions of the superior courts. Both the learned Judges, it appears, have proceeded on the assumption that granting of liquor licence (including the restrictions) is amenable to writ jurisdiction under article 226 of the Constitution of India and can be subjected to rigour of article 14 of the Constitution of India. Apparently, they have relied upon the decision of the Supreme Court rendered by Bhagwati, C J. and Khalil, J. in State of Madhya Pradesh v. Nand Lal (AIR 1987 SC page 251). In that case the two learned Judges of the Supreme Court have held that although no citizen has fundamental right to carry on trade or business in liquor and it is an exclusive right or privilege of the State to do so the State cannot escape the rigour of article 14 of the Constitution of India once it decides to grant right or peivilege to others. It cannot act arbitrarily or at its sweet will. The Supreme Court further held that it was not possible to uphold a contention that Article 14 can have no application in a case where the licence to manufacture or sell is being rendered by the State Government. There is no doubt that the two learned Judges of the Supreme; Court have laid down a new approach in regard to the manufacture and sale of liquor and its licensing. The new approach is welcome for a number of reasons. But the difficulty is that the said ratio is clearly in conflict with the earlier decisions of the Supreme Court and particularly the decisions of the Constitution Bench of the Supreme Court in Har Shankar v. Deputy Excise and Taxation Commissioner (AIR 1975 SC page 1121). The Constitution Bench hag quoted with approval the earlier decision of the Supreme Court in State of Orissa v. Hari Narain Jaiswal (AIR 1972 SC page 1816) in which it was held by the Supreme Court. "If the Government is the exclusive owner of this privilege, reliance on article 19(l)(g) or Article 14 of the Constitution of India becomes irrelevant". The question then is, is it open to the High Court to prefer a decision of a Division Bench of two Judges of the Supreme Court in preference to the decision of the Five Judge Bench of the Supreme Court, even if the bench of the High Court feels that the decision of the two Judge Bench is more wholesome ? The two learned Judges of this Court have not adverted to the decision of the Supreme Court in Har Shankar case. In State of 'Madhya Pradesh v. Nand Lal, in para 32 of the judgment two learned Judges have referred to Har Shankar;s case. It appears that the learned Judges agreed with Har Shankar that dealing in liquor is the, privilege of the State and that there was no fundamental right in a citizen to carry on trade or business in liquor. But as I read the judgment of the two Judges of the Supreme Court I find that they have cut a new ground in holding "that State cannot escape the rigour of article 14": Thus there is a confliet between the two decisions of the Supreme Court, one rendered by the Constitution Bench and the other by two Judges Bench. It would be for the Supreme Court to clarify as to which of the two judgments are correct. The Supreme Court may hold that there is no conflict between the two decisions. It can approve the approach of the two Judges of the application of article 14 to the liquor trade by another Constitution Bench. So long as it is not done, the discipline of the law of the precedents would require this court should follow decisions of the Five Judge Bench in Har Shankar and dismiss the writ petition on a preliminary ground of maintainability.

(3.) Shri D.D.Thakur appearing for the petitioners tried to pursuade me that the decision of the two Judge Bench of the Supreme Court Nand Lal case was in keeping with various earlier decisions of the Supreme Court on their true analysis The exercise made by him in analysing the various cases is quite interesting. If the question was open and was not concluded by the Five Judge Bench of the Supreme Court a different view could have been possible. The question is, whether it is permissible or not keeping in view the law of the precedents ?