Haryana Financial Commissioner is not competent to amend rules for grant of liquor licences

Satya Prakash
Tribune News Service
New Delhi, February 16

Haryana Financial Commissioner is not competent to amend rules for grant of number of liquor vend licences for the entire state, the Supreme Court has ruled.

By a majority of 2:1, a three-judge Bench headed by Chief Justice of India Ranjan Gogoi struck down Rule 24(i-eeee) of the Haryana Liquor License Rules 1970, terming it ultra vires the Punjab Excise Act, 1914.

The majority verdict was delivered by CJI Gogoi and Justice Navin Sinha while Justice KM Joseph dissented. Justice Joseph held that the Financial Commissioner had power to decide the number of licenses to be granted.

Writing the verdict for the majority, Justice Sinha held that the Financial Commissioner was not competent to amend the Rules for grant of number of licences for the entire state as this power was exclusive to the State Government under Section 6 read with Section 13(a) and 58(2)(e) of the 1914 Act.

“In the scheme of the Act, the Rules and the Order read together it is apparent that a liquor license is to be granted for a local area only. The power to determine the number of licences that may be granted in any category in a local area is exclusively vested in the State Government under Section 58(2)(e) of the Act.”

“The delegation of this power by the State Government to the Financial Commissioner is prohibited by Section 13(a). This is only in consonance with the general power of superintendence vested in the State Government under Section 8,” Justice Sinha wrote.

The ruling came on an appeal filed by International Spirits and Wines Association of India which had unsuccessfully challenged Rule 24(i-eeee) of the Haryana Liquor License Rules 1970 (as amended by the Haryana Liquor License (Amendment) Rules 2017) before the Punjab and Haryana HC.

The issue was if a sub-delegate of the Financial Commissioner was competent under Section 13(b) read with Section 59(a) to issue L-1BF licence for the entire state under the amended rule, notwithstanding the prohibition in Section 13(a) to the delegation of powers under Section 58 by the State Government. The High Court had dismissed the Association’s petition.

However, the Supreme Court said: “To hold that the power of Financial Commissioner under Section 59(a) of the Act to regulate sale of liquor, and that sale could be regulated through grant of licence, the Financial Commissioner was vested with the power to determine the number of licences, to our mind is not only unreasonable but also unsustainable. Such an interpretation amounts to reading words into the statute which the legislature itself never intended”.

“The amendment notified by the Excise 15 Commissioner as a delegate of the Financial Commissioner was per se ultra vires the powers of the latter under Section 6 and 13(a) read with Section 58(2)(e) of the Act," the majority said.

The top court allowed the Association’s appeal, saying: "The Financial Commissioner was therefore not competent to amend the Rules with regard to grant of number of licences for the entire state, and which power was exclusive to the State Government under Section 6 read with Section 13(a) and 58(2)(e) of the Act”.

It held that Rule 24(i-eeee) as amended by the Financial Commissioner in exercise of powers under Section 59(a) of the Act was ultra vires the powers of the Financial Commissioner under the Act and accordingly struck it down.