IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

MONDAY, THE TWENTY FIFTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY THREE

PRESENT

HONOURABLE MR. JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE AND HONOURABLE MR. JUSTICE R RAGHUNANDAN RAO

WRIT APPEAL NO: 932 OF 2023

Writ Appeal under clause 15 of the Letters Patent against the order passed in WP.No.20356/2023 dated 15.09.2023 on the file of the High Court.

Between:

M/s. Galaxy Restaurant and Bar, (Originally M/s. Blues Restaurant and Bar), Rep. by its Licensee, S. Chenchi Reddy, S/o. Venkat Reddy, aged about 45 years, D.No.T.S.No.84, Block No.2, Baker Compound, Brodipet Main Road, Guntur City and District.

...APPELLANT/ 5^th RESPONDENT

AND

• 1. M/s. New Modern Restaurant and Bar, Rep. by its Licensee, Kamineni Srinivasa Rao, S/o. K. Seshaiah, aged 48 years, D.No.13-8-185, Gunturvari Thota, G.T. Road, Opp-RTC Bus Stand, Guntur Town, Guntur District
• 2. M/s. Swathi Restaurant and Bar, Rep. by its Licensee, Kolli Srinivasa Rao, S/o. K. Vengaiah, aged about 60 years, D.No.13-8-207, Gunturvari Thota, G.T. Road, Opp-RTC Bus Stand, Guntur Town, Guntur District

...WRIT PETITIONERS/ RESPONDENTS

• 3. The State of Andhra Pradesh, Rep. by its Principal Secretary, Prohibition and Excise Department A.P. Secretariat at Velagapudi, Amaravati, Guntur District
• 4. The Commissioner, Prohibition and Excise Department, Government of Andhra Pradesh, Sai Vihar Apartments, Prasadampadu, Vijayawada
• 5. The Deputy Commissioner, Prohibition and Excise Department, Guntur, Guntur District
• 6. The District Prohibition and Excise Officer, Guntur, Guntur District
• 7. The Prohibition and Excise Inspector, A.P. State Beverages Corporation Limited, IML Depot, Guntur.
• 8. The A.P. State Beverages Corporation Limited, Rep. by its Depot Manager, IML Depot, Guntur.

...RESPONDENTS/ RESPONDENTS

IA NO: 1 OF 2023

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the order of the learned single Judge passed in WP.No.20356/2023 dated 15.09.2023, pending disposal of the writ appeal.

Counsel for the Appellant : SRI. O M R LAW FIRM Counsel for Respondents 1 & 2 : Ms. SODUM ANVESHA Counsel for Respondents 3 to 7 : GP FOR PROHIBITION AND EXCISE Counsel for Respondent No.8 : --The Court made the following:

IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

HON'BLE MR. JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE

$&$

HON'BLE MR. JUSTICE R. RAGHUNANDAN RAO

W.A.No.932 of 2023

M/s. Galaxy Restaurant and Bar, (Originally M/s. Blues Restaurant & Bar) Rep. by its Licensee, S. Chenchi Reddy, S/o. Venkat Reddy, aged about 45 years, D. No.T.S.No.84, Block No.2, Baker Compound, Brodipet Main Road, Guntur City and District.

...Appellant

Versus

M/s. New Modern Restaurant and Bar, Rep. by its Licensee, Kamineni Srinivasa Rao, S/o. K. Seshaiah, aged about 48 years, D.No.13-8-185, Gunturvari Thota, G. T. Road, Opp: RTC Bus Stand, Guntur Town, Guntur District and seven others.

...Respondents

Counsel for the appellant		<b>OMR Law Firm</b>
Counsel for Respondent Nos.1 & 2	$\ddot{\phantom{0}}$	Ms. Sodum Anvesha
Counsel for Respondent Nos.3 to 7	$\ddot{\phantom{0}}$	GP for Prohibition<br>and Excise
Counsel for Respondent No.8

Dt.:25.09.2023

PER DHIRAJ SINGH THAXUR, CJ:

1. The present writ appeal under Clause 15 of the Letters Patent has been preferred against the judgment and order dated 15.09.2023 passed in W.P.No.20356 of 2023. By virtue of the judgment and order impugned the writ petition filed by the petitioners/respondent Nos.l and 2 has been allowed and the orders passed by the Commissioner, Prohibition and Excise Department, permitting the shifting of the bar premises of the appellant from Bekar Compound, Brodipet Main Road, Guntur to a premises situate opposite to RTC Bus Stand, Guntur has been set aside.

2. Briefly stated the material facts are as under:

2.1. The appellant obtained a license in form 2B to run a bar upon payment of an amount of Rs.69,00,000/- in an auction conducted for that purpose by the Excise department. The bar license was obtained in the name of M/s. Blues Restaurant and Bar and goes to run at Bekar Compound, Brodipet Main Road Guntur.

2.2. According to the license policy prevalent in the State of Andhra Pradesh the auction purchaser could establish the bar anywhere in the Nagarpanchayat, Municipality/Municipal Corporation as the case may be, subject to the restrictions laid down under the Rules.

2.3. Even the petitioners/respondent Nos.1 and 2 herein, were similarly issued bar licenses in the year, 2022 for running the bar business in the area of bus stand at Guntur. The amount of license fee paid by the petitioners was similar to the one paid by the appellant herein.

3. An application came to be filed by the appellant with the office of the Commissioner of Prohibition and Excise requesting for cha,nging the trade name of the licensee from M/s. Blues Restaurant and Bar to M/s. Galaxy Restaurant and Bar. Apart from this, the appellant also sought permission for shifting the licensed premises from Bekar Compound, Brodipet to premises situate opposite the RTC bus stand, Guntur. The reason for shifting the premises was the alleged losses being suffered by the appellant at the licensed premises at Brodipet.

4. Rule 29(C) of the Andhra Pradesh Excise (Lease of Right of Selling by Bar, Grant and Conditions of License) Rules, 2022 (for

short "the Rules") deals with the issue of shifting of license premises and reads as under:

"29. C. No shimming of the licensed premises shall ordinarily be permitted during the licence period from one location to another. However, shifting of the licensed premises may be considered by the Commissioner of Prohibition. c" Excise for valid reasons within the same Nagar Panchayat, Municipality including its 3 KM belt area from the periphery or Municipal Corporation includingits 10 KM belt area from the periphery, as the case may be, subject to payment oft % of the non- refundable registration charge and licence fee or Ids. 50,000/-, whichever is higher, as shifting fee and on production of trade licence granted by the local authority concerned."

5. While application of the appellant was being processed, the writ petitioners on having realized that there was such an application moved by the appellant, objected to the proposed shifting of the premises from Brodipet to the area near the bus stand where the petitioners were conducting their business. The objection raised to the shifting was obviously aimed at ensuring that there was no more competition which would result in reduction of profits being earned by the objectors.

5.1. It appears that the Commissioner of Prohibition a,n d Excise directed the concerned officer to also consider the objections being raised by the petitioners while submitting the report on the proposed shifting.

6. From the record it appears that the Excise Inspector submitted a report in which it was reflected that the shifting of the premises was justified on account of the fact that the appellant was suffering losses at its premises in Brodipet. The report further suggested that the appellant had purchased stock worth Rs.1,29,00,000/- from 09.09.2022 to 28.02.2023, from the Depot at Nallapadu, while he could manage to sell liquor worth only Rs.1,09,00,000/-. The inspector also appears to have visited the proposed premises in the bus stand area and upon verification found it to be complied with the Rules. This report of the Inspector had the approval of the District Prohibition and Excise Officer, Guntur. Insofar as the objections of the petitioners are concerned, it was stated by the District Prohibition and Excise Officer that the RTC bus stand, Guntur had a lot of potential inasmuch as previously there were seven restaurants and bars functioning during the period from 2016 to 2017, which had come down to only five during the period from 2017 to 2019 and further that currently there were only four 2B licensees operating in the area.

7. Based upon the reports, the Commissioner of Prohibition and Excise permitted not only the change in the trade name of the appellant but also permitted the shifting of the licensed premises to the new premises at the bus stand area in G7rntur.

8. Being aggrieved of the order of shifting the petitioners challenged the same before the writ Court on the ground that the shifting of the premises could have been permitted only for valid reasons in terms of Rule 29(C) of the Rules and that the shifting ordered by the Commissioner of Prohibition and Excise on the ground that losses were being suffered, was not a valid reason for granting permission to shift.

9. A preliminary objection, however, was raised to the filing of the writ petition on the ground of locus of the petitioners to challenge the order passed by the Commissioner.

10. The learned Single Judge framed the following two questions for determination:

• i) Whether the petitioners being rival traders have the locus to file Writ Petition?
• ii) Whether the proceedings impugned are not sustainable as the reasons assigned for according permission to the 5th respondent to relocate the business premises or not valid and the proceedings impugned are vitiated by arbitrary exercise of power?

11. Both these issues were decided against the appellant. It would be worthwhile to deal with each issue which was raised and decided by the learned Single Judge on locus:

Issue No.1 on locus:

12. The first issue that falls for our consideration is whether the writ Court was correct in holding that the petitioners did have the locus to challenge the permission granted by the Commissioner of Excise permitting the shifting of the bar premises being rivals in trade.

13. In our opinion, the ratio of the judgment in Jasbhai Motibhai Desai vs. Roshan Kumar and others' would be apt in the facts and circumstances of the case.

14. In this case the owners of the site made an application under Rule 3 of the Bombay Cinema Rules, 1954 to the District Magistrate for the grant of a certificate that there was no objection to the location of a cinema theatre at that site. The District Magistrate notified in the prescribed form the substance of the application in the newspapers and invited objections to the grant of a No Objection Certificate. The District Magistrate then recommended that No

Objection Certificate should be refused. The State Government however, did not agree with the recommendations of the District Magistrate and directed the letter to grant the certificate which was subsequently granted.

15. The writ petition then came to be filed challenging the grant of No Objection Certificate by a cinema owner who owned a theatre in the area, who contended in the writ petition that he owned a cinema theatre in Mehmadabad, which had a small population of around 15,000 persons and that there was no scope for more than one Cinema theatre in the town. He therefore, proceeded to challenge the No Objection Certificate primarily on the ground that the No Objection Certificate had been issued by the District Magistrate not in exercise of his own discretion under the Bombay Cinemas Registration Act, 1953 and the Rules framed there under, but mechanically, according to the dictates of the State Government and that the power to issue such a Non Objection Certificate vested only with the District Magistrate who was the licensing authority.

16. The Supreme Court held that the petitioner was not a `person aggrieved' and had no locus standi to challenge the grant of No Objection Certificate, it held thus:

1

"47. In the light of the above discussion, it is demonstrably clear that the appellant has not been denied or deprived of a legal right. He has not sustained injury to any legally protected interest. In fact, the impugned order does not operate as a decision against him, much less does it wrongrully affect his title to something. He has not been subjected to a legal wrong He has suffered no legal grievance. He has no legal peg for a justiciable claim to hang on. Therefore he is not a person aggrieved' and has no locus standi to challenge the grant of the No-objection Certificate.

51. For all the foregoing reasons, we are of opinion that the appellant had no locus standi to invoke this special jurisdiction under article ,2,26 of the Constitution. Accordingly, we answer the question posed at the commencement of this judgment, in the negative, and on that ground, without entering upon the merits of the case, dismiss this appeal with costs."

52. In our opinion, the ratio of the aforementioned judgment was squarely applicable to the case of the petitioners at hand, who similarly cannot be said to be persons aggrieved inasmuch as the orders of shifting did not at all operate as a decision against the petitioners nor affected their right to carry on their business as usual. No injury would be sustained by the petitioners to any of their so called legally protected interest. By granting a license to run a bar to the petitioners, the department at no point of time had made any assurance express or subtle, ensuring to the petitioners a minimum amount of profit safeguarded against the rival bar owners operating in the area. However, the learned Single Judge appears to have distinguished the judgment of the Apex Court (supra) by

placing reliance upon the Apex Court Judgment in M.S.Jayaraj vs. Commissioner of Excise, Kerala and others2, wherein paragraph 14 and 21, the Apex Court held as under:

"14. In the light of the expanded concept of the locus standi and also in view of the finding of the Division Bench of the High Court that the order of the Excise Commissioner was passed in violation of law, we do not wish to nip the motion out solely on the ground of locus standi. If the Excise Commissioner has no authority to permit a liquor shop owner to move out of the range (for which auction was held) and have his business in another range it would be improper to allow such an order to remain alive and operative on the sole ground that the person who .filed the writ petition has strictly no locus standi. So we proceed to consider the contentions on merits

21. We, therefore, concur with the interpretation placed by the Division Bench of the Kerala High Court on the scope of the proviso to Rule 6(2) of the Auction Rules. It means that Excise Commissioner has no authority to permit shifting of a foreign liquor shop from one range to a totally different range. Consequently the order passed by the first respondent Excise Commissioner in favour of the appellant is without authority of law and it has been rightly struck down by the Division Bench of the High Court. Accordingly we dismiss this appeal."

22. The facts in the case of M.S.Jayarazj vs. Commissioner of Excise, Kerala and others pertained to a situation where the Apex Court interfered primarily on the ground that the Excise Commissioner had no authority to permit shifting of a foreign liquor

2 20007 5CC 552

shop from a one range to a totally different range and therefore, it was held to be passed without authority and law.

19. Whereas in the present case, according to Rule 29(C), there was a specific power vested in the Commissioner of Excise who could order shifting of the licensed premises for a valid reason. Reliance placed by the learned Single Judge on M.S.Jairaj vs. Commissioner of Excise, Kerala and others was therefore totally inapt in the facts and circumstances of the case.

20. We therefore, accordingly hold that the petitioners had no locus standi at all to challenge the order dated 07.08.2023 passed by the Commissioner of Prohibition and Excise as they could not be said to be persons aggrieved as none of their rights were affected.

21. Since the appellant would succeed in the present Letters Patent Appeal only on this issue yet, for purposes of record we hold that the view expressed by the writ Court even on the other issue that the ground on which the shifting was ordered was not a valid reason within the spirit of Rule 29(C), is unsustainable in law. In the absence of there being any definition of a valid reason, we fail to understand as to how a case as had been projected by the appellant that he was suffering losses and was unable to pay the salaries of

12 HCJ & RRR, J W.A.No.932 of 2023

his employees could not be said to be a `valid reason' within the spirit of Rule 29 (C) of the Rules. In fact, it would be in the interest of not only the bar owner, but even the Government which earns revenue from the sales conducted at such bars to ensure that the licensees make profits and not losses which would then have an effect on the collection of revenues. Permitting the shifting of a bar before the licensee closes down its operations would be in the interest of not only the bar licensee but even the Government.

22. It appears that the writ Court was more inclined to protect the business interest of the petitioners on the ground that shifting of business in the area where the petitioners were conducting business would cause loss to the licensees who had established their business operation there. It needs to be reiterated that according to the policy of the State Government, the successful licensees in the auction could have established their business of a bar anywhere and the auction was not in reference to a particular locality or area. Even if 20 successful licensees had decided to set up their bar business in the bus stand area at Guntur, there could be imposed no prohibition on such a right.

23. The fact that they were already existed seven bars in the said area which had come down to four at present, would only suggest

the scale of operations that had been conducted in the past in the said area. The net effect of the judgment to the extent it prevented the shifting of the licensed premises is to make redundant the power which is otherwise vested in the Commissioner of Excise in terms of Rule 29(C) of the Rules.

13

24. In our opinion. even otherwise the decision of the Commissioner of Prohibition and Excise is not one which would be said to perverse on the touchstone of the Wednesbury Principle.

25. For the reasons mentioned above, we are of the opinion that the judgment and order impugned is unsustainable on all grounds, the same is accordingly set aside and the Writ Appeal is allowed. No costs.

Pending miscellaneous applications, if any, shall stand closed.

SD/- S.V.S.R. MURTHY JOINT REGISTRAR

//TRUE COPY//

USECTION OFFICER

To,

One CC to SRI. O M R LAW FIRM Advocate [OPUC]

• 2. One CC to MS. SODUM ANVESHA Advocate [OPUC]
• 3. Two CCs to GP FOR PROHIBITION AND EXCISE, High Court of Andhra Pradesh. [OUT]

4. Three CD Copies

$M.M.Bar$

Madhu

HIGH COURT

DATED: 25/09/2023

JUDGMENT

WA.No.932 of 2023

ALLOWING THE WA WITHOUT COSTS