GHAIO MALL AND SONS Vs. STATE OF DELHI

JUDGEMENT

(1.) This writ petition under Article 228 of the Constitution of India has arisen in the following circumstances.

(2.) Messrs. Ghaio Mall & Sons, the petitioner, is a joint family firm and it is alleged in the petition that this firm had been selling foreign liquor since 1922 and before the partition of the country held licenses in forms L-l, L-2, L-10 and L-11 at Amritsar, Sialkot and Multan. The firm applied for grant of L-2 license (wholesale and retail sale to the public) in Chawri Bazar Delhi for 1945-46. It appears that in anticipation of formal grant of this license the firm was given permits to import foreign liquor in Delhi, Ultimately, however, this license was not granted for reasons that are not clear on the record. The petitioning firm was granted license in form L-l (Wholesale and retail sale of liquor to traders only) for 1951-52 on 20, Beadonpura Karolbagh Delhi. In 1954, the firm learnt that Messrs. Army & Navy Stores, Regal Buildings, New Delhi, had closed their business and a vacancy in L-2 license had occurred there. On 21-1-1954 the petitioners applied for grant of this license in this vacancy and requested that the firm be allowed to operate this license from its existing Karolbagh place of business or from anywhere else. By application dated 21-5-1954 the firm informed the Chief Commissioner (licensing authority) that it had secured shop No. H. 32 in Con-naught Circus, New Delhi, which is suitable for the purpose of selling foreign liquor to the public. The firm wrote again to the Chief Commissioner on 30-7-1954 that there are persistent rumours in the city that its application will not be placed before him and to see that this does not happen. The firm again wrote on the subject, mentioning certain rival applicants and compared its own experience etc., with other applicants and particularly mentioned the rival applicants M/s Gaindamal Hemraj and stated that that firm was totally unknown to trade (vide letter dated 11-9-1954). In this letter the Chief Commissioner was reminded of the recently acquired premises by the firm in Connaught Circus, New Delhi. At about the same time the firm applied for change of the locality of L-l license from Karolbagh to Con-naught Circus and a reminder regarding this application for change of locality of L-l license was sent on 6-11-1954. The Chief Commissioner by his order dated 15-1-1955 allowed the petitioner to transfer its L-l license to shop No. H. 32 in Connaught Circus. Subsequently the petitioning firm filed an application Under Article 226 of the Constitution in this Court 'C. W. No. 323/D of 1954 (Punj)' (A), which was dismissed by the Circuit Court at Delhi on 22-12-1954 in limine. Attempts were made to get this matter heard by the Supreme Court but in the meanwhile the firm came to know that on 16-12-1954 the license in form L-2 had been granted to the respondent firm Gainda Mal Hemraj for 1955-56. On getting this information these proceedings were dropped and the present petition was filed in this Court for the relief that the license granted to Messrs Gaindamal Hemraj be set aside and for direction that the Chief Commissioner Delhi should hold proper enquiry regarding suitability of premises, etc., to hear both the parties and to decide the application of the petitioners before taking up the application of Messrs Gaindamal Hemraj. This petition is based on the allegations that:

(3.) Before discussing the arguments advanced by the learned counsel in this case it will be convenient to describe relevant provisions of the Excise Act and the rules framed under Section 59 of that Act. Section 26 of the Act lays down that nc liquor shall be sold except under a license and Section 59 authorises the Chief Commissioner Delhi to make rules by notification regulating the manufacture, supply, storage or sale of any intoxicant. In Rule 4.2 it is stated that unless otherwise directed licenses shall be granted for one year from the 1st April to the 31st March. The Chief Commissioner shall fix the number of liquor shops in any local area (B. 4,6). Licenses, however, may not be granted to type o persons described in Rule 4.7. The licenses are specified in Rule 5.1 which also gives the name of authority competent to grant a license. Under this rule the Chief Commissioner has the authority to grant L-2 license and the Collector is empowered to renew it. Every license is granted to a certain person in respect of certain premises (5.3). The authority competent to renew the license shall not refuse to do so without giving notice to the licensee and without recording his objections (Rule 5.12). As far the procedure Rule 5.11 reads :