REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.9494­9495 OF 2019 (Arising out of SLP (Civil) No. 10744 – 10745 of 2019)

M/S CEE CEE & CEE CEE’S      …APPELLANT

versus

K. DEVAMANI & ORS.         …RESPONDENTS

J U D G M E N T

INDU MALHOTRA, J.

Leave granted.

1. The Appellant is an F.L.­ 1 License holder issued on

26.10.2016  by the Deputy Commissioner, Excise, Mahe

under the Puducherry Excise Act, 1970 (“Excise  Act”).

Under the F.L. ­ 1 License, the Appellant is permitted to

sell Indian Made Foreign Liquor (“IMFL”) to other License

holders, and not in retail.  

1

2. On 28.02.2017, the Appellant  filed an Application before

the Deputy Commissioner  (Excise),  Mahe for shifting his

licensed Liquor Shop from Mahe to Karaikal under Rules

163 and 209 of the Puducherry Excise Rules, 1970

(“Excise Rules”).  

3. The  Deputy  Commissioner (Excise),  Mahe forwarded the

Application to Respondent No. 3 – the Deputy

Commissioner (Excise), Karikal  vide  letter dated

07.03.2017, and requested Respondent No. 3 to conduct

an inspection to assess the suitability of the site at

Karaikal.  

4. Respondent  No.  1,  a resident  of  Karaikal, submitted  an

objection dated 02.06.2017 before the Sub – Collector

(Excise), Collectorate, Karaikal to oppose the shifting of the

liquor shop to Karaikal. Respondent No. 1  inter alia

submitted that pursuant to the Judgement dated

15.12.2016 passed in State of Tamil Nadu v. Balu1, various

liquor shops had been shifted  from other  regions  to  the

residential areas in Karaikal. The Court had directed that

no shop for the sale of liquor could be situated within a

1 (2017) 2 SCC 281 : AIR 2017 SC 262 : 2017 (1) SCJ 586.

2

distance of 500 meters of the outer edge of the National or

State Highways or of a service lane along the Highway.

It was submitted that shifting of the shop was contrary

to public interest of the residents of Karaikal. For about 35

houses in Nedunkadu circle, Karaikal, there were 35 liquor

shops already operational.  

It was further submitted that the Madras High Court

vide Order dated 07.03.2003 in K. Murali  v. Commissioner

(Excise)­cum­Secretary  in W.P. (Civil) No. 39661/2002 had

interpreted the expression  ‘from one place to another’ in

Rules 163 and 209 of the Excise Rules to mean that

shifting was permissible only within a particular local area,

panchayat or commune, and not from one region to

another in the Union Territory.  

In view of the restrictive meaning of the word ‘place’,

the Licensing Authority could not grant permission to shift

the licensed shop of the Appellant from one region to

another i.e. from Mahe to Karaikal, which is at a distance

of 650 kilometers.  

3

The shifting of liquor shops from one region to another

would be in  contravention of  Rules  163 and 209 of the

Excise Rules.

5. Respondent No. 1 and one K. M. Baskar filed W.P. (Civil)

Nos. 13081/2017 and 15953/2017 before the Madras High

Court for the issuance of a writ of mandamus restraining

Respondent No. 2 and 4 ­ Excise Authorities from shifting

liquor shops from Mahe to Karaikal.  

The Madras High Court  vide  Order dated 26.02.2018

directed the Excise Authorities to consider the objections

raised by Respondent No. 1 along with the Application for

shifting filed by the Appellant in accordance with law.  

6. Respondent No. 3 ­ Deputy Commissioner (Excise),

Karaikal granted a personal hearing to Respondent No. 1

on 01.03.2018.  

7. Respondent No. 3 ­ Deputy Commissioner (Excise),

Karaikal  vide  Order dated 27.03.2018 rejected the

objections raised by Respondent No. 1, on the ground that

the Order dated 07.03.2003 passed by a single judge of the

Madras High Court in K. Murali (supra) was set aside by a

division bench vide Order dated 06.09.2005.

4

8. Respondent  No.  1 filed  a  2nd  W.  P. (C)  No.  11767/2018

before the Madras High Court to quash the Order dated

27.03.2018, and restrain Respondents No. 2 to 4 ­ Excise

Authorities from permitting the re­location of liquor shops

from Mahe to Karaikal, and granting liquor licenses in

Karaikal.

9. Respondent No. 2 – Deputy Commissioner (Excise),

Puducherry  vide  Order No. 2239/DCE/S2/FL­1/2017 –

2018/251 dated 07.06.2018 granted permission to the

Appellant to shift the liquor shop from Mahe to Karaikal,

subject to the fulfillment  of the conditions contained in

Rule 209 of the Excise Rules.  

10. The Deputy Commissioner (Excise), Mahe vide Order dated

13.06.2018 conveyed the permission granted by

Respondent No. 2 – Deputy Commissioner (Excise),

Puducherry to the Appellant. The approval was made

subject to the following two additional conditions: (i) there will be one entrance and exit only; and (ii) the boundary of the proposed site should be

protected properly.

5

11. Respondent No. 3 – the Deputy Commissioner, Excise,

Karaikal  vide Order dated 15.06.2018 granted permission

to  the Appellant to commence his  business of  wholesale

vending of IMFL at Karaikal.  

12. Respondent No. 1 filed a 3rd  W. P. (Civil) 15661/2018

before the Madras High Court to quash the Order dated

15.06.2018, and restrain Respondent Nos. 2 to 4 ­ Excise

Authorities from shifting liquor shops from Mahe to

Karaikal, on the grounds similar to those raised in the 2nd

W.P. (Civil) No. 11767/2018.   

The High Court  vide Order dated 05.07.2018 granted

interim stay of the Order dated 15.06.2018 passed by

Respondent No. 3.  

13. The Excise Authorities supported the case of the Appellant

– License holder in W.P (Civil) Nos. 11767/2018 and

15661/2018.

14. A division bench of the Madras High Court vide Impugned

Judgement and Order dated 14.02.2019 allowed W.P.

(Civil)  Nos. 11767/2018  and  15661/2018, and  quashed

the Orders dated 27.03.2018 and 15.06.2018 passed by

Respondent No. 3. The permission granted by Respondent

6

No. 2 to 4 to shift the Licensed Shop of the Appellant from

Mahe to Karaikal was set aside.  

The division bench held that the disposal of the

representation by Respondent No. 3 – Deputy

Commissioner (Excise) Karaikal was not in accordance with

the  Order dated  26.02.2018  passed in  W.P. (Civil)  Nos.

13081/2017 and 15953/2017.  

The word / phrase / term “place” in the Excise Act and

Excise Rules had a restrictive meaning. The area defined

by Section 2 (22) of the Excise Act was restricted to the

“area” in  which the liquor shop  was located. The  order

which permitted shifting of the wholesale liquor shop of the

Appellant from Mahe to Karaikal had to be confined to the

region of Mahe, and not to Karaikal, which is an entirely

different region in the Union Territory of Puducherry.  

15. Aggrieved by the Order dated 14.02.2018, the Appellant –

Licensed holder has filed the present Special Leave

Petition.  We have heard  Mr. Mahesh Jethmalani, Senior

Counsel for the Appellant, Mr. R. Venkataramani, Senior

7

Counsel for the Union Territory and office bearers, and Mr.

S. Thananjayan, Counsel for Respondent No. 1.  

16. The issue which arises for our consideration is whether the

permission granted  by  Respondent  Nos.  2 to  4 ­  Excise

Authorities to transfer the licensed shop from one region to

another in the Union Territory of Puducherry was

permissible under the Excise Act and Rules.

17. RELEVANT STATUTORY PROVISIONS     

The Puducherry Excise Act, 1970 provides a uniform law

relating to  the  production, manufacture, possession,

import, export, transport, purchase and sale of liquor, and

intoxicating drugs in the Union Territory of Puducherry.

17.1. Section 1(2) extends the applicability of the Excise Act to

the whole of the Union Territory of Puducherry.

17.2. The word ‘place’ is defined in Section 2 (22) as follows: “2. – Definitions  … (22) “place” includes a house, building, shop, booth, tent, vessel, raft, and vehicle.”

The word ‘place’ does not indicate the territorial

limits within which the Licensing Authority could grant

shifting of a licensed shop.  Section 2(22) describes the

type of structure or establishment of the licensed shop,

8

which could either be a house, building, shop, booth,

tent, vessel, raft, or vehicle in which the licensed

premises is situated.  

17.3. Section 14 of the Excise Act provides that no liquor or

intoxicating drug will be sold without a license issued by

the Licensing Authority i.e. the Deputy Commissioner or

Excise Commissioner.   

17.4. Section 70 of the Excise Act empowers the Government

to frame rules for carrying out the functions of the Act.

The Government has enacted the Puducherry Excise

Rules, 1970 in exercise of the powers under Section 70.  

Rule 1(2) extends the applicability of the Excise Rules

to the whole of the Union Territory of Pondicherry.  

i) Rule 22A (a) of the Excise Rules defines ‘region’ as any of

the 4 regions of the  Union  Territory  viz, Pondicherry,

Karaikal, Mahe and Yanam.  

“CHAPTER­IIA Control of inter­State Transport of Liquor  22. A. Definitions — In this Chapter, unless there is anything repugnant in the subject or context—  (a) “Region” means any of the regions known as Pondicherry, Karaikal, Mahe and Yanam in the Union territory of Pondicherry.”

9

ii) Rule 113 of the Excise Rules provides for the grant of an

F.L.­ 1 license for wholesale vending of liquor.  “CHAPTER – VI Sale of Indian or Foreign liquors  113. Licences. — Licences for the sale of Indian liquor or foreign liquor or both shall be of the following descriptions, and shall be granted by the Excise Commissioner or Deputy Commissioner, as the case may be, in accordance with the provisions of sub­section (2) of section 14 of the Act, namely:—  (1) F.L. 1 Licence:— The holder of this licence shall be permitted to sell foreign liquor or Indian liquor, or both, in quantities of  not less than 9  litres  in sealed or capsuled bottles 2[***] at any one time and in any single transaction to any other licensee under this chapter and also in sealed or capsuled bottles in quantities not exceeding 3 [4.5 litres of all liquors other than beer and 9 litres of beer] at any one time and in any single transaction to an unlicensed person. But he shall not allow the consumption of the liquor at the licensed premises:  Provided  that  such  licensees may  issue another licensed dealer samples of liquors, in quantities not exceeding 0.180 litres.”

iii) The procedure  for transfer  of  a licensed  liquor shop  is

provided under Rule 209 of the Excise Rules.  “CHAPTER—XIII Excise Licences (General Conditions) 209. Shifting of shops: — The licensee shall not shift the licensed premises from one place to  another  without the prior approval of the Licensing Authority.

Provided that the licensing authority may permit, subject to the fulfilment of conditions of licence, shifting of licensed premises  on payment  of  one­fourth  of the license  fee for such shifting”

iv) The term ‘shop’ is defined  by  Rule  189 of the  Excise

Rules, as follows:  “CHAPTER—XIII Excise Licences (General Conditions) …

10

189. Definition — In this chapter,  “shop” means the licensed premises where liquor is sold.”

(emphasis supplied)

18. DISCUSSION    & ANALYSIS     

18.1. Rule 113 under Chapter VI of the Rules pertains to the

sale  of Indian or  foreign  liquors. It  provides  that the

Excise Commissioner or Deputy Commissioner may

issue an F.L. – 1 License for the sale of Indian liquor or

foreign liquor, or both, in accordance with the

provisions of Section 14 (2) of the Excise Act.

18.2. Chapter XIII of the Excise Rules contains the General

Conditions of Excise Licenses. Rule 188 states that

Chapter XIII will apply to all Licenses issued under the

Excise Act for sale of liquors, and every license is

deemed to include the conditions prescribed herein.  

Rule 189 of the Excise Rules describes “shop” as the

licensed premises from where liquor is sold.

Rule 191 (2) provides that the applicant of a license

shall select a site, and intimate the licensing authority,

who may, after making such enquiry as he thinks fit,

approve the site selected.  

11

Rule 191 (4) provides that the Licensee shall sell the

liquor only from the approved shop.

19. The Appellant is the holder of an F.L. – 1 License issued by

the Licensing Authority  viz. the Deputy Commissioner,

Excise, Mahe for carrying out vending of IMFL.

An F.L.­1 Licensee  is  permitted to sell liquor only to

other Licensees, and not in retail.  

19.1. The Petitioner was carrying out his wholesale business

from MMC, No. 1/40,41 Main Road, Mahe.

19.2. The Appellant filed an Application dated 28.02.2017 for

shifting his liquor shop from Mahe to Karaikal under

Rules 163 and 209 of the Excise Rules before the

Deputy Commissioner, (Excise), Mahe.

19.3. Rule 209 in Chapter XIII of the Excise Rules provides

for  Shifting of Shops of all license  holders,  whether

wholesale or retail.  

Rule 209 permits shifting of the liquor shop from one

“place” to another, subject to approval by the Licensing

Authority on the terms and conditions contained

therein.  

12

The  proviso to  Rule  209 states that the  Licensing

Authority may permit shifting of the licensed premises,

subject to the fulfillment of the conditions of  license,

and payment of 1/4th  of the license fee for such

shifting.  

There  is  no restriction or  prohibition either in the

Excise  Act  or  Rules  on  the  Licensing  Authority from

granting permission to shift the licensed shop from one

region to another, subject to the conditions being

complied with.

A fortiori, a licensee can shift a liquor shop from

one region to another within the Union Territory of

Puducherry, subject to the prior approval of the

Competent Authority.

20. We are of the view that the expression ‘from one place to

another’ is not restrictive, and does not curtail the power of

the Licensing Authority to grant permission for shifting the

licensed shop from one region to another in the  Union

Territory of Puducherry so long as the conditions stipulated

by the Excise Act and Excise Rules, as also the conditions

for grant of a license are complied with. The shifting should

13

not result in the increase in number of liquor shops beyond

the maximum number of licenses which may be fixed for a

particular area under Rule 122 of the Excise Rules.

21. Given the peculiar demography of  the Union Territory of

Puducherry, which comprises of four unconnected regions,

it  would  be contrary to the object and purpose of the

Excise Act, if a restrictive meaning was to be given to Rule

209 of the Excise Rules. The Act must be read as a whole

to ascertain the intent of the legislature.

If the intention  of the legislature  was to restrict the

shifting of a liquor shop to a region, locality, municipality,

or commune, Rule 209 of the Excise Act would have

expressly contained such a prohibition, which is absent.  

22. The Excise Act and the Excise Rules use the expression

‘local area’ in contra­distinction with the word ‘place’,

whenever it  is intended to confine the area in which the

liquor shop is located. For instance, Section 9 of the Excise

Act  prohibits the transportation  of intoxicants from one

‘local area’ to another. Similarly, Section 10 of the Excise

Act restricts the movement of intoxicants beyond a certain

quantity which is stipulated for a ‘local area’.

14

23. We find from the Counter Affidavit filed by the State that

similar proposals for shifting 5 shops to Karaikal from

other regions were granted by the Licensing Authority, as

per details given hereinbelow :

Sr.No. Name & License No.  

Date of Shifting and Order

Place of shifting  From  To

1. M/s Vijayalakshmi Wines  L.No. 8/FL­1

13.07.1995  vide  Order No. 13142/93­ 94/C2/DC(E)

Puducherry Karaikal

2. M/s Vinoth Liquors  L. No. 10/ FL­ 1

21.01.2009  vide Memorandum No. 10526/DC(E)/C208 – 09

Puducherry Karaikal

3. M/s Ding Dong Liquors  L. No. 11/ FL­ 1

29.11.2013 vide Order No. 6146/DC(E)/C2/13­14

Puducherry Karaikal

4. M/s Apollo Wines L. No. 12/FL­1

11.07.2014 vide Order No. 418/DC(E)/20­14

Mahe  Karaikal

5. M/s. Fancy Traders L. No. 13/ FL­ 1

13.01.2016 vide Order No. 5176/DC(E)/C2/215­ 16

Puducherry Karaikal

24. The Counsel for the State submitted that Respondent Nos.

2 to 4 – Excise Authorities have assessed the pros and cons

of the shifting, and sought the view of the police authorities

prior to granting permission to the Appellant. The Report of

the Excise Officer was obtained, which stated that the site

of the Appellant at Karaikal is not located on the National

or  State  Highway.  There  are  no religious  or  educational

15

institutions which are located within the 100 meters radius

of the site at Karaikal. There would be no hindrance to the

traffic in the area. The Superintendent of Police confirmed

that there would be no law and order problem if the

licensed shop of the Appellant is shifted.  

25. In the present case, the Licensing Authority i.e. the Deputy

Commissioner (Excise)  vide  Letter  dated  07.06.2018 has

granted permission to shift the F.L.1 Licensed premises of

the Appellant from Mahe to Karaikal, subject to compliance

with the conditions laid down in Rule 209 of the Excise

Rules. The Deputy Commissioner (Excise), Mahe permitted

shifting of the premises subject to two additional

conditions viz.  

(i) There shall be one and the same entrance and exit

only;

(ii) The  boundary of the  building should  be  properly

protected.

We have been informed by the Counsel for the

Appellant and the State that all conditions under the

Excise Act and Rules have complied with.

16

26. Consequently, Respondent No. 3 ­ the Deputy

Commissioner (Excise), Karaikal  vide  letter dated

15.06.2018 granted permission to the Appellant to run the

F.L.­1 business from the location designated in Karaikal.

27. We find no prohibition in the Excise Act or Rules for

shifting the F.L.1 Licensed premises from one place to

another. The permission dated 07.06.2018 for shifting the

licensed shop from Mahe to Karaikal granted by

Respondent No. 3 is legal and valid.  

28. We allow the Civil Appeals and set aside the Order dated

14.02.2019 passed by the  division bench of the  Madras

High Court in W.P. (Civil)  Nos. 11767/2018 and

15661/2018.  

29. Ordered accordingly.

Pending applications, if any, are accordingly disposed.

…..……...........................J. (UDAY UMESH LALIT)

..….……..........................J. (INDU MALHOTRA)

New Delhi December 18, 2019.

17