DAMODARAN Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE writ appeals are directed against the common judgment is two writ petitions disposed of by our learned brother Mathew J. along with a batch of other writ petitions involving the same questions. The appellants are bidders in auction of the right to vend country liquor as a monopoly in particular areas. They were the highest bidders; and they executed agreements to the Government and obtained licences. They paid some of the instalments of the kist too and then defaulted the payment of further instalments. The Government took steps to re-auction the right with a view to recover the difference in the amounts to be obtained in such re-auctions and the amounts payable by the appellants and also to recover the arrears of the kist under the Revenue Recovery Act. The appellants then filed writ petitions and obtained stay of the proceedings started by the Government. They contended that S. 18-A of the Cochin Abkari Act of 1077, which was amended by the Abkari laws (Amendment and Validation) Act in 1964 and extended to the whole of Kerala by another Act in 1967, was ultra vires the Constitution as it infringed the fundamental right of the appellants to carry on the trade in liquor; and that the rental was neither an excise duty nor a luxury tax nor a fee and therefore, an illegal exaction, for which there was no authority vested in the State under the Constitution. Mathew J. dismissed these contentions and dismissed the writ petitions.

(2.) SEVERAL contentions have been raised before us by Mr. V. K. . K. Menon, the counsel of the appellant in one of these cases. Since other writ petitions were also disposed of by Mathew J. by the same judgment, we allowed the counsel in some of those writ petitions also to intervene and advance arguments; and Mr. M. I. Joseph and Mr. K. Sudhakaran have also adduced arguments. Some of the contentions raised by Mr. V. K. K. Menon but not seriously pursued are that S. 18-A is ultra vires as it involved excessive delegation of legislative power; that many provisions of the Abkari Act offend the rights guaranteed under Art. 301 of the Constitution, since they imposed serious and unreasonable restrictions on the movement of the liquor trade; and that the contracts between the Government and the appellants were vitiated by a mutual mistake of law. These contentions have not been seriously pressed. However, regarding the last contention we shall add a few words towards the close of this judgment. The contentions which have been seriously pursued may now be considered.

(3.) BOTH sides admit that the trade in liquor was considered to be a close preserve of the State; and that it was treated practically as property belonging to the State. Even before the British took over the administration in India, the supply of alcoholic drink was regulated by the farming system; and under the system the monopoly of manufacture and sale of liquor in a particular area was granted in return for the payment of a lump sum. After the British took over the administration, the system of farming out was continued with modifications. This is evident from publications like the Malabar District Gazetteer and Excise and Temperance in Madras, a Note on excise Policy prepared under instructions of the Madras Government; and that the same was the practice in the erstwhile Cochin and the Travancore States is evident from the Cochin State Manual and the Travancore State Manual.