Uttarakhand High Court
Pawan Kumar vs State Of Uttarakhand & Others on 3 July, 2025
Reserved
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
HON'BLE THE CHIEF JUSTICE MR. G. NARENDAR
AND
HON'BLE SRI JUSTICE ALOK MAHRA
WRIT PETITION (M/B) NO.127 OF 2025
Pawan Kumar .....Petitioner.
Versus
State of Uttarakhand & others ....Respondents.
With
WRIT PETITION (M/B) NO.131 OF 2025
Siddhant Bailwal .....Petitioner.
Versus
State of Uttarakhand & others ....Respondents.
WRIT PETITION (M/B) NO. 132 OF 2025
Tejendra Singh .....Petitioner.
Versus
State of Uttarakhand & others ....Respondents.
Counsel for the Petitioners : Mr. Shobhit Saharia and Mr. Tej
Pratap Singh, learned counsel.
Counsel for the Respondents : Mr. S.N. Babulkar, learned
Advocate General with Mr. J.S.
Bisht, learned Standing Counsel.
Judgment Reserved on:17.06.2025
Judgment Delivered on:03.07.2025
The Court made the following:
COMMON JUDGMENT:
(per Hon’ble The Chief Justice Mr. G. Narendar)
Heard learned counsel for the petitioners and
learned Advocate General for the State- respondents.
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2. The instant writ petitions are preferred praying to
declare a part of Rule 17b of the Uttarakhand Excise Policy
Manual- Year 2025-26, 2026-27 and 2027-28 (Three Year
Excise Policy), which prohibits sale of liquor by FL-5DS/M
licensees in “adjoining areas of Natraj Chowk, AIIMS, IDPL
and Shyampur”. The rule is challenged on the ground of
ambiguity and vesting of unguided power rendering it
arbitrary and discriminatory.
3. Rule 17b of the Policy reads as under:-
“17(b) The previously approved FL-5 DS/M in Haridwar city of
Haridwar district, Rishikesh city of Dehradun district such as Natraj
Chowk and adjoining areas, AIIMS adjoining area, IDPL area,
Shyampur area will not be renewed for the financial year 2025-26”.
4. The contention is that, the unguided discretion has
resulted in ambiguity and has resulted in excessive delegation
resulting in arbitrariness in the decision making.
5. The undisputed fact is that all the petitioners were
granted FL-5 (DS) licenses for the year 2024-25; that as per
the earlier policy, the Government, in exercise of its powers
vested under Section 37-A, in particular, sub-section (3) of
Section 37-A in Chapter VI-A of the United Provinces Excise
Act, 1910(for short “the Act, 1910”), has prohibited sale of
liquor within the Rishikesh Nagar Palika, i.e. within a
definitive perimeter; that in consonance with the then
existing policy, the petitioners were called upon to deposit the
license fees for renewal, etc;. That it is not in dispute that
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vending of foreign liquor in shopping malls, departmental
stores, pursuant to the Rules formulated in 2013, namely, the
Uttarakhand Excise (Settlement of Licenses for Foreign Liquor
Premium Retail Vends, Shopping Malls/ Departmental Stores)
Rules, 2013, which came to be gazetted on 26.12.2013, came
to be permitted.
6. That the State Government enacted the impugned
Policy/Rules, in exercise of the powers conferred on it under
Section 40 of the U.P. Excise Act, 1910 (United Provinces Act
No.04/1910) (as adapted and modified in Uttarakhand) read
with Section 21 of the U.P. General Clauses Act, 1904.
That the State Government, in a departure from the usual
practice, has framed a triennial policy called Uttarakhand
Policy Manual/ Year 2025-26, 2026-27, and 2027-28 (three
years excise policy), which came to be issued on 05th March,
2025. That perusal of Rule 1 would demonstrate that it
pertains to the expected revenue from the various thirteen
districts for each of the years and the district also includes
Haridwar, where ban or prohibition of sale of liquor has been
implemented in certain parts and the projected revenue is the
second highest amongst thirteen districts. That, while so
framing the Rules, Rule 17 came to be enacted; that while so
framing the Rules, the State proceeded to add the words “and
adjoining areas”, after mentioning the definitive area,
namely, Natraj Chowk, AIIMS, IDPL and Shyampur and under
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the triennial policy it was promulgated that FL-6/ DS/M
licenses would not be renewed for the financial year 2025-26.
Rule 17 reads as under:-
“17. Regarding prohibition of alcohol:-
The following provisions will be applicable for the financial
years 2025-26, 2026-27 and 2027-28.
a) No bar license will be approved in the places notified as
restricted and prohibition areas in the state.
b) The previously approved FL-5DS/ M in Haridwar city of
Haridwar district, Rishikesh city of Dehradun district such as Natraj
Chowk and adjoining areas, AIIMS adjoining area, IDPL area,
Shyampur area will not be renewed for the financial year 2025-26″.
7. The present petitioners are aggrieved by the words
“and adjoining areas”, as it is their contention that the words
“and adjoining areas” has resulted in delegation of unbridled
and unguided power in the executive to choose any area
under the ambiguous phrase “and adjoining areas”.
8. Several contentions have been canvassed, both
orally and by way of written submission, by learned counsel
for the petitioners and the learned Advocate General.
9. Learned counsel for the petitioners would content
that the Rule prohibiting non-renewal of FL-5 (DS)/M licenses
for the year 2025-26 under Rule 17(b) within the non-notified
area, is patently discriminatory and arbitrary; that despite the
Rules, the licenses in respect of Bars have been processed,
and are permitted to dispense liquor.
10. That the sale of liquor by retail liquor shops is also
not prohibited, and in fact, the authorities have permitted the
sale of IMFL (Indian Made Foreign Liquor) by shops, situated
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even on highway and also by shops, located at the very
entrance of Rishikesh. The petitioners have also placed on
record several photographs along with the supplementary-
affidavit dated 23.04.2025.
11. That the attempt to distinguish between Bar
licenses and FL-5DS/M licenses, is a clear demonstration of
arbitrariness in the application of the Rules; that, admittedly,
Section 37-A(3) of the Act, 1910 enables the State
Government to impose prohibition in any “particular area”;
that the phrase “adjoining area” is neither definitive, nor
pertains to a particular area and vests an unbridled and
unguided discretion in the executive to pick and choose any
area under the phrase “adjoining area”. That the phrase
“adjoining area” is in the teeth of the provisions of sub-
section (2), which stipulates that the specified area or areas
requires to “specified”; that the provisions of sub-section (2)
mandates prohibition of sale “in or over” a specified area or
specified areas; that prohibition under sub-section (3) of
Section 37 is to advance the policy of prohibition and the
criteria for invoking sub-section (3) is set out in clauses (a),
(b), (c) and (d); that the phrase “adjoining area” is neither
specific nor particular to any identifiable area and has
resulted in the officers of the State applying it in a selective
and arbitrary manner, based on political and unethical
considerations.
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12. That in exercise of the powers under Section 37-A
(3), a notification came to be issued on 07.08.2020 under
which localities were notified, where-in, complete prohibition
came to be imposed. By the said notification, the “areas”
were specifically identified and prohibition came to be
imposed in the “areas”, i.e., the limits of Haridwar and
Rishikesh, Municipal Corporations. That the areas in and over
which prohibition is imposed under the Excise Rules, 2025-
26, are a reiteration of the same localities, that is, the areas
comprised in the Municipal Corporations of Haridwar and
Rishikesh. Reference is made to Rule 28.03, which reads as
under:-
“28.3 Judgment passed by the Hon’ble Supreme Court in Civil
Appeal No.12164-12166 of 2016, “State of Tamil Nadu vs. K. Baalu&
anr.” dated 15.12.2016 and 31.03.2017, SLP Civil No.10243 of 2017,
“Arrive Safe Society of Chandigarh Vs. The Union Territory of
Chandigarh & anr.” dated 11.07.2017 and in the light of the decision
passed in Civil Appeal No(s)12164-12166/2017, it is also mentioned
that in the State, Haridwar and Rishikesh Municipal Corporation/
Municipal Bodies as a result of re-demarcation, the prohibition are in
the said cities will remain as per the previously determined
prohibition area.” (underlining by this Court)
13. It is contended by learned counsel for the
petitioners, that the ‘area/s’, where the licensed shops of the
petitioners are situated, do not fall within the limits of
Municipal Corporations of Haridwar and Rishikesh. That in the
premises, where one of the petitioners is carrying on
business, in the first floor, a licensed bar is vending and
serving liquor, while prohibition is sought to be selectively
7
applied to the premises of the petitioner by an arbitrary
application of the phrase “adjoining area”.
14. That the very Rule 17(b) is discriminatory, as
prohibition is sought to be imposed only on the retail sale of
liquor by Bars under Rule 17(a) and by FL-5DS/M stores
under Rule 17(b); that there is no prohibition in respect of
vending of liquor by retail stores; that the continuous running
of the bars is evidenced by the bills issued by the said bars
along with the Aadhaar card of the person who consumed /
purchased the liquor from the bars on 24.04.2025 and
25.04.2025 are placed on record and are demonstrative of
selective application of the ambiguous policy. That, though
there are six types of licenses, only the renewal of FL-5DS/M
licenses have been prohibited and the renewal of FL-6(C), FL-
6 (C) star category, FL-6 (C) Five Star category, FL-7
(Restaurant Bar), FL-7 (B) (Beer Bar) and FL-7 (Club Bar)
licenses have not been prohibited from vending liquor and the
same per se renders the Rule discriminatory, and requires to
be struck down. That, the ambiguity in the provisions has
stood demonstrated by the subsequent action of the Excise
Commissioner, who during the course of hearing, has issued
an order dated 25.04.2025 whereby he has sought to define
and clarify the ambiguity by stipulating the ‘area’ comprised
within 2 Kms, from the “restricted specified areas”, as being
the ‘adjoining area”. That the said order is ultra vires the
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provisions of Section 40 of the Act, 1910, as the power to
specify an ‘area’ is vested only with the State Government
and not in the Excise Commissioner. That the provisions of
Section 41 of the Act, 1910 empowers the Excise
Commissioner to make Rules only in respect of the subjects
covered under Section 41 of the Act, 1910 and the power of
imposing prohibition in a specified area or areas, is not one of
the subjects, which falls within the ambit of Section 41 of the
Act, 1910.
15. It is contended that the very act of the Excise
Commissioner in issuing the notification dated 24.05.2025,
whereby renewal of bar licenses also came to be prohibited is
proof enough of the discriminatory nature of the action and
which notification has also been subjected to challenge in
another batch of writ petitions.
16. The photographs filed along with the
supplementary-affidavit, demonstrate location of IMFL-5
shops on the Yatra Marg and are indiscriminately situated
along the highway, and in places clearly visible from the
highway is proof of the discriminatory nature of the State
action, in avoiding renewal of licenses to the selected IMFL-5
(DS)/ ML shops.
17. The Legislature has delegated separate rule making
powers to the Government under Section 40, and to the
9
Excise Commissioner u/s 41 of the Act, 1910 and that the
Government has neither further delegated, nor is the Excise
Commissioner a delegatee under Section 40. That the power
to legislate as a delegate is vested in the Excise
Commissioner only under Section 41 of the Act, 1910, and
Section 41 does not empower the delegatee to make rules in
respect of prohibition, which is a subject that is clearly placed
within the ambit of Section 40 r/w Section 37-A (2) and (3).
18. That the non-renewal, apart from being arbitrary,
has also resulted in loss to the State Exchequer; that the
notification defining ‘adjoining areas’ as being area within 2
Km. radius of the specified area is without jurisdiction and
ultra vires Section 40 of the Act, 1910; that there being no
power of further delegation with the State Government, the
action of the Excise Commissioner in issuing the notification is
wholly vitiated, as being contrary to the provisions of Section
40 read with Section 37-A of the Act, 1910.That the
impugned notifications are in the teeth of the law settled by
the Constitution Bench of the Hon’ble Apex Court in the case
of Khoday Distilleries Ltd. vs. State of Karnataka,
reported in (1995) 1 SCC 574, more particularly, Paragraph
No.60(g), wherein it has been held that once the State
undertakes the business of granting license, it cannot practice
arbitrariness in the matter of granting trade licenses; that
reliance placed on the ruling of the Hon’ble Apex Court in the
10
case of State of Kerala & others vs. Kandath Distilleries,
(2013) 6 SCC 573, is inapplicable, as it relates to grant of a
manufacturing license and not a license to trade or indulge in
retail vending. That apart, the facts and circumstances of the
said case and the facts and circumstances of BALCO
Employees’ Union (Regd.) vs. Union of India, reported in
(2002) 2 SCC 333 are completely distinguishable to the
case on hand; that in the instant case, the action of the State
Government in selectively omitting renewal of licenses is a
result of malafide exercise of power and the notifications are
issued by an incompetent authority not vested with the
jurisdiction u/s 40 of Act. This Court having perused the said
judgment, it is apparent that the same deals with the issue of
grant of manufacturing licence and not grant of retail vending
licence. The issue with regard to grant of privilege to vend in
retail sale of potable alcohol is squarely covered by the
Constitutional Bench rendered in Khoday‘s case.
19. In fact, the rigor of Section 40 and the sanctity of
the power vested in the State Government is fortified by
Section 10(2)(f) of the U.P. Excise Act, 1910, which
specifically prohibits the State Government from delegating
its rule making power under Section 40 to the Excise
Commissioner.
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20. Lastly, it is submitted that the promulgated rules
are still-born on account of non-compliance with the
mandatory provisions of Section 23-A of the U.P. General
Clauses Act, 1904 which mandates the placing of Rules before
both the Houses of the legislature for a total period of thirty
days; that the non-compliance is fatal and the Rules stands
vitiated on account of non-compliance with the mandatory
requirement of placing the Rules before the Houses; that the
provisions of Section 23-A of the U.P. General Clauses Act,
1904 also enable the Houses to either modify or reject the
Rules; that in the absence of such validation by the Houses,
the Rules are rendered non est in the eyes of law and still
born.
21. Per contra, learned Advocate General would
vehemently counter the contentions on the short ground that
there are no sufficient pleadings in support of the prayers and
on account of no sufficient pleadings, the prayers and the
grounds urged in the course of argument cannot be
appreciated by this Court. This contention need not deter this
Court for long. A bare reading of the prayer would suffice to
show that the challenge is limited to the offending phrase
“and adjoining area”. That apart, the contentions canvassed
are legal contentions. It is no more res integra that the
procedure is the hand made of justice and procedural aspects
and technicalities ought not to be allowed, to assume
12
insurmountable proportions and turn into hurdles in
dispensing justice. The Hon’ble Apex Court in the case of
“Ramathal & others vs. K. Rajamani (Dead) through Lrs
and Another” reported in 2023 SCC OnLine SC 1022, in
Paragraph Nos.23 and 24 held as under:-
“23. It would be appropriate at this stage itself to refer to the
settled legal position on the above aspect. This Court in the case
of Bhagwati Prasad v. Chandramaul very aptly put that the question for
the Courts to consider in such matters is whether the parties knew that
the matter in question was involved and whether they led evidence
about it. We may profitably extract para 10 of the aforesaid report:
“10. But in considering the application of this doctrine of the facts
of the present case, it is necessary to bear in mind the other
principle that considerations of form cannot over-ride the
legitimate considerations of substance. If a plea is not specifically
made and yet it is covered by an issue by implication, and the
parties knew that the said plea was involved in the trial, then the
mere fact that the plea was not expressly taken in the pleadings
would not necessarily disentitle a party from relying upon it if it is
satisfactorily proved by evidence. The general rule no doubt is
that the relief should be founded on pleadings made by the
parties. But where the substantial matters relating to the title of
both parties to the suit are touched, though indirectly or even
obscurely, in the issues, and evidence has been led about them,
then the argument that a particular matter was not expressly
taken in the pleadings would be purely formal and technical and
cannot succeed in every case. What the Court has to consider in
dealing with such an objection is: did the parties know that the
matter in question was involved in the trial, and did they lead
evidence about it? If it appears that the parties did not know that
the matter was in issue at the trial and one of them has had no
opportunity to lead evidence in respect of it, that undoubtedly
would be a different matter. To allow one party to rely upon a
matter in respect of which the other party did not lead evidence
and has had no opportunity to lead evidence, would introduce
considerations of prejudice, and in doing justice to one party, the
Court cannot do injustice to another.”
24. The said ratio has been followed by this Court in 2008, by a
two-judge Bench in the case of Bachhaj Nahar v. Nilima Mandal. This
13
Court in clear terms stated the object and purpose of pleadings and
issues. Para 12 of the said report is reproduced hereinunder:
“12. The object and purpose of pleadings and issues is to ensure
that the litigants come to trial with all issues clearly defined and to
prevent cases being expanded or grounds being shifted during
trial. Its object is also to ensure that each side is fully alive to the
questions that are likely to be raised or considered so that they
may have an opportunity of placing the relevant evidence
appropriate to the issues before the court for its consideration.
This Court has repeatedly held that the pleadings are meant to
give to each side intimation of the case of the other so that it may
be met, to enable courts to determine what is really at issue
between the parties, and to prevent any deviation from the course
which litigation on particular causes must take.”
22. As noted supra, the very reliefs sought clearly
indicate the issue in question which is required to be
answered by the respondent-State. Furthermore, the Hon’ble
Apex Court in the case of “R. Nagaraj (Dead) through Lrs.
& another vs. Rajmani & others“, reported in 2025 SCC
OnLine SC 762, has, after relying on its earlier judgments,
been pleased to hold in Paragraph No.21 and 21.1 as under:-
“21. We have in earlier paragraph discussed the object of framing
the issues. We also held that there could be several points directly or
indirectly connected with the main issue that has been framed. In such
cases, when the larger issue that has been framed is wide enough to
cover different points of disputes within it, there is no necessity to frame
a specific issue on that aspect. Further, when the parties go to trial with
the knowledge that a particular point is at lis, had full opportunity to let
in evidence, they cannot later turn back to say that a specific issue was
not framed. All that is required under law, is for the Court to render a
finding on the particular fact or law in dispute, on the facts of the case.
However, we make it clear that such evidence, in the absence of
pleadings, cannot permit either of the parties to make out a new case. It
is pertinent to mention here that the Courts are vested with powers to
go into the question of law, touching upon either the limitation or the
jurisdiction, even if no plea is raised and not in cases, where facts have
to be pleaded and evidence has to be let in. The Civil Procedure Code
14and the law of limitation, being procedural laws, meant to assist the
Courts in the process of rendering justice, cannot curtail the power of
the Courts to render justice. Procedural laws after all are handmaid of
justice. What is to be seen is whether any irregularity arising from a
failure to follow procedure has caused serious prejudice to the parties. It
is not to be forgotten that the process of adjudication is to discern the
truth.
21.1. It will be useful to refer to certain judgments of this Court
on violation of procedural law, which are as follows:
(i) Sardar Amarjit Singh Kalra (Dead) by L.Rs. v. Pramod Gupta
(Smt.) (Dead) by L.Rs.:
“26. Laws of procedure are meant to regulate effectively,
assist and aid the object of doing substantial and real justice
and not to foreclose even an adjudication on merits of
substantial rights of citizen under personal, property and other
laws. Procedure has always been viewed as the handmaid of
justice and not meant to hamper the cause of justice or
sanctify miscarriage of justice……..”
“28. All the Rules of procedure are the handmaid of justice.
The language employed by the draftsman of processual law
may be liberal or stringent, but the fact remains that the object
of prescribing procedure is to advance the cause of justice. In
an adversarial system, no party should ordinarily be denied the
opportunity of participating in the process of justice
dispensation. Unless compelled by express and specific
language of the statute, the provisions of Code of Civil
Procedure or any other procedural enactment ought not to be
construed in a manner which would leave the court helpless to
meet extraordinary situations in the ends of justice. The
observations made by Krishna Iyer, J. in Sushil Kumar
Sen v. State of Bihar (1975) 1 SCC 774] are pertinent : (SCC
p. 777, paras 5-6)The mortality of justice at the hands of law troubles a
judge’s conscience and points an angry interrogation at the law
reformer.
The processual law so dominates in certain systems as to
overpower substantive rights and substantial justice. The
humanist Rule that procedure should be the handmaid, not the
mistress, of legal justice compels consideration of vesting a
residuary power in judges to act ex debito justitiae where the
tragic sequel otherwise would be wholly inequitable. … Justice
15is the goal of jurisprudence — processual, as much as
substantive.
29. In State of Punjab v. Shamlal Murari (1976) 1 SCC
719 : 1976 SCC (L&S) 118] the Court approved in no
unmistakable terms the approach of moderating into
wholesome directions what is regarded as mandatory on the
principle that : (SCC p. 720)“Processual law is not to be a tyrant but a servant, not an
obstruction but an aid to justice. Procedural prescriptions are
the handmaid and not the mistress, a lubricant, not a resistant
in the administration of justice. In Ghanshyam
Dass v. Dominion of India (1984) 3 SCC 46] the Court
reiterated the need for interpreting a part of the adjective law
dealing with procedure alone in such a manner as to subserve
and advance the cause of justice rather than to defeat it as all
the laws of procedure are based on this principle.”
(iii) Sugandhi (Dead) by LRs v. P. Rajkumar:
“9. It is often said that procedure is the handmaid of
justice. Procedural and technical hurdles shall not be allowed to
come in the way of the court while doing substantial justice. If
the procedural violation does not seriously cause prejudice to
the adversary party, courts must lean towards doing
substantial justice rather than relying upon procedural and
technical violation. We should not forget the fact that litigation
is nothing but a journey towards truth which is the foundation
of justice and the court is required to take appropriate steps to
thrash out the underlying truth in every dispute. Therefore, the
court should take a lenient view when an application is madefor production of the documents under Sub-rule (3).”
23. That apart, it is no more res integra that the
Constitutional Courts are well endowed with the authority to
mould the relief. In this regard, reliance is placed on the
ruling reported in (2010) 3 SCC 470, Paragraph Nos.17, 18,
19 and 26.
24. It is also a primary objection by the State, that this
Court cannot go into the vires and legality of the Policy/
16
Rules, nor the legality of the rule making power of the Excise
Commissioner under Section 40 of the Act, 1910.
25. Elaborating further he would contend that the Rules
are a policy decision and this Court cannot enter upon and
adjudicate the correctness of the policy, that too, the policy
being an economic policy. That, it is settled law that, Courts
ought to be slow in tinkering with the opinion of experts who
have drawn the policy.
26. The Learned Advocate General would simply brush
aside the submissions regarding the impugned action being
discriminatory. He would submit that the phrase “adjoining
areas”, is well defined, and the apprehension that bars are
exempted is only an apprehension and the State Government
is in the process of imposing ban on bars also; that no bar
licenses have been renewed and the apprehension is without
reasonable basis.
27. That, the right to trade in liquor, is not a legal right
but is merely a privilege which the State may or may not
grant. That the right to carry on business in liquor, not being
a fundamental right, the writ petitions are required to be
rejected at the threshold itself. That the invocation of the
provisions of Article 226 can be only by an aggrieved person,
and the right to do business in liquor not being a fundamental
right, the petitioners cannot have any grievance. In this
17
regard, he would place reliance on the ruling of the Hon’ble
Apex Court rendered in State of Kerala & others vs.
Kandath Distilleries, reported in (2013) 6 SCC 53, and
would place reliance on the observations and conclusions of
the Hon’ble Apex Court drawn in Paragraph Nos.24, 25, 27,
28, 29, 30, 31, 32 and 33.
28. The learned Advocate General would contend that,
the Hon’ble Apex Court by a catena of decisions, has held
that carrying on business in potable liquor/ alcohol is a matter
of policy and the scope of interference in economic policy
matters ought to be minimal. That, the framing of such
policies is the positive responsibility of the legislature and the
Courts have only the power to destroy and not to re-
construct, and therefore, the Courts ought to adopt the
principle of Judicial self- restraint.
29. That policies are made by the Government, after
due deliberations with experts and the discretion is left with
the policy makers as to the time, place and manner, in which,
any particular issue or policy is required to be addressed.
That it is also within the exclusive domain of the policy
makers, to decide, as to which class of people of the society
the policy will be applicable, because framing of economic
policies is a function of experts and the Courts do not possess
the expertise to determine as to which of the policy is good or
18
bad. In this regard, he would place reliance on the judgment
of the Hon’ble Apex Court in the case of BALCO Employees’
Union (Regd.) vs. Union of India &others, reported in
(2002) 2 SCC 333 and would place reliance on the
observations and the conclusion drawn in Paragraph Nos.36
to 51.
30. The Learned Advocate General would further
submit that framing of the policy by the State Government
invoking the provisions of Section 40 of the of the Act, 1910
and the consequent framing of Rule 17(b) is a subordinate
legislation and it is well- settled principle, that the
subordinate legislation can be challenged on two grounds: (i)
on the ground of violation of fundamental and legal rights;
(2) on the ground of violation of any provisions of the parent
or principal Act, and no other ground is available to the
petitioner to challenge the impugned policy. That admittedly,
the petitioner has no fundamental right in carrying on
business of potable liquor/ alcohol. That as the petitions are
not challenging the vires of the provisions of the parent or
principal act, the writ petitions are liable to be rejected. That
the contentions of the petitioner that the denial of renewal of
licenses of FL-5DS/M shops is discriminatory, is merely based
on value judgment basis and not supported by any material.
19
31. That during the pendency of the writ petitions, the
Government has refused the renewal of bar licenses in the
prohibited areas.
32. That it is a policy of the State that sale and
consumption of potable liquor/ alcohol in religious areas, like
Rishikesh and Haridwar, should be prohibited. If this be the
contention of the State, then the raison d’etre is lost as it is
the admitted case that the shops of the petitioners are
situated well outside the boundaries of Rishikesh and
Haridwar. The above is not only the submission, but is also
the rule as framed by the State and subsisting.
33. That it settled law that it is not the imperative for
the State to implement its entire policy in one-go and the
State has the right to implement its policy in a phased
manner. In this regard, he would place reliance on the ruling
of the Hon’ble Apex Court rendered in the case of Lalit
Kumar Jain vs. Union of India, reported in (2021) 9 SCC
321, and would place reliance on Paragraph No.103; that the
various grounds canvassed by the petitioners in the course of
hearing are not supported by necessary pleadings.
34. It is further contended that the author of the
notification issued by the Excise Commissioner refers to the
policy of the Government and the explicit and implied power
available to the Commissioner for making the Rules to make
20
the Government Policies more effective and workable; that
the Government Order passed by the Excise Commissioner is
as a functionary of the government and a ministerial act. That
the Excise Commissioner has the right to adopt all means and
measures to implement the policy. That the principle, that the
officers/ bureaucrats are functionaries and not delegates of
the government is settled in the case of Samsher Singh vs.
State of Punjab & another, reported in (1974) 2 SCC
831, and reliance is placed on Paragraph Nos.31 and 35, and
in the case of Bidi, Bidi Leaves & Tobacco Merchants
Association Gondia & other vs. The State of Bombay &
others, reported in AIR 1962 SC 486, Paragraph No.20.
35. That the arguments advanced cannot be considered
as they are not supported by the pleadings and that the Court
cannot make out a case in favour of the petitioners who have
not raised any pleadings. In this regard, he would place
reliance on the ruling of the Hon’ble Apex Court in the case of
State of Maharashtra & others vs. Narmada Estates Pvt.
Ltd. & others, reported in (2010) 12 SCC 419; State of
U.P. & others vs. Raj Karan Singh, reported in (1998) 8
SCC 529, and; Dr. R.K.S. Chauhan & another vs. State of
U.P. & others, reported in 1995 Supp (3) SCC 688.
36. Lastly, he would contend that de hors the above
contentions, the State is empowered under the provisions of
21
Section 36-A of the U.P. Excise Act, to refuse renewal of
licenses without assigning any reason; that there is no
challenge questioning the vires of the said provision.
37. The last contention will not detain this Court and
the ruling of the Constitutional Bench of the Supreme Court in
the case of Khoday Distilleries, particular Paragraph No.60,
is a clear answer. The provisions of Section 36-A cannot be
read, interpreted and understood as vesting unbridled power
in the State to act in an arbitrary and discriminatory manner,
and the power vested under Section 36-A has to be read
down and be understood in the light of the law laid down by
the Hon’ble Apex Court. Hence, the said contention requires
to be rejected at the threshold itself. That apart, the rule of
law, the primacy of law and fairness in action are the soul of
the Constitution and any statute enacted are subject to the
power conferred on the State by the Constitution and not
independent of the Constitution and are subject to judicial
review.
38. Having heard learned counsel for the petitioners
and learned Advocate General for the State, this Court is of
the opinion that it is just and necessary to extract various
provisions, relevant and pertinent, for adjudicating the issue
on hand.
22
39. Admittedly, the power to legislate regarding
prohibition of sale in a specified area or areas or to a person
or a class of persons, is vested in the State under the
provisions of Section 37-A, and the power to make rules in
this regard is vested in the State under Section 40 and the
bar to further delegate this rule making power is traceable to
Section 10(2)(f). The provisions of Section 10(2)(f), Section
37-A, Section 40 and read as under:-
“Section 10(2)(f) delegate 1[***] to the Excise
Commissioner all or any of its powers under this Act, except the
power conferred by Section to make rules. (emphasis by this
Court).
Section 37-A. Prohibition of import, export, transport,
possession or consumption of intoxicants.-(1) Subject to the
provisions in sub-section (4), the import or export of any intoxicating
into or from Uttar Pradesh or any part thereof or the transport of any
intoxicant shall be prohibited.
(2) Notwithstanding anything contained in Section 20, but
subject to the provision of sub-section (4), the possession or
consumption by any person or class of persons or subject to such
exceptions, if any, as may be specified, by all persons in Uttar
Pradesh or in any specified area or areas thereof, of any
intoxicant shall absolutely or subject to such conditions as may
be specified, be prohibited.(emphasis by this Court).
(3) In pursuance of the policy of gradual extension of
prohibition in the State and having regard to the administrative
convenience, the State Government may from time to time
select different areas in that behalf after taking into account any
one or more of the following factors, namely :–
(a) the character of an area as —
(i) the seat of Government; or
(ii) a seat of learning; or
(iii) a place of pilgrimage or of religious importance; of
(iv) hill area; or
(v) an industrial area; or
(vi) contiguous to dry area; or
(vii) inhabited by Scheduled Castes or Scheduled Tribes;
or
(b) the general economic condition of the local population,
including their level of nutrition and standard of living; or
(c) the local public opinion; or
(d) any other relevant factor which in the opinion of the State
Government is material in the public interest;
Provided that nothing in this sub-section shall be construed to
require the State Government to recite in its order, the
considerations on the basis of which a particular area is selected at
any time for the enforcement of prohibition.
23
(4) Subject to the provisions of sub-section (3), the area
to which the prohibition on import, export or transport of any
intoxicant under sub-section (1) and on possession or consumption of
any intoxicant under sub-section (2) extends and the date on which
the prohibition in any area comes into force, shall be such as the
State Government may, from time to time, specify by
notification.(emphasis by this Court).
(5) Notwithstanding anything contained in sub-section (4), in
relation to any prohibition area, the State Government may, either by
rules on by general or special order make any exemption or
relaxation in respect of the possession, consumption, import, export
or transport of the intoxicants mentioned in the notification under
sub-section (4) or any of such intoxicant by or for purposes of —
(a) member of defense services;
(b) foreigners visiting or residing in the prohibition area;
(c) travellers through the prohibition area;
(d) district hospitals or medical colleges requiring any
intoxicant for medicinal purposes;
(e) persons holding licenses under Sections 17, 18. 21
and 24;
(f) consignment from, to, or passing through the
prohibition area by rail, road or air;
(g) industrial, scientific, educational, medical or religious
purposes.
……………
Section 40. Power of State Government to make rules.-
(1) The State Government may make rules for the purpose of
carrying out the provisions of this Act or other law for the time
being in force relating to excise revenue:(emphasis by this Court).
[Provided that the Uttar Pradesh Licensing under the
Surcharge Fee System Rules, 1968 made by the Excise
Commissioner, Uttar Pradesh, with the previous sanction of the State
Government, as amended by the Excise Commissioner, Uttar
Pradesh, from time to time, before the commencement of this Act,
shall, until altered or repealed by the State Government by rules
made under this section be deemed to be and always to have been as
valid and effective as if the said rules were duly made by the State
Government under this section.]
(2) In particular and without prejudice to the generality of the
foregoing provision, the 2[State Government] may make rules —
(a) regulating the delegation of any powers by the Excise
Commissioner or Collector under Section 10(2)(h);
(b) prescribing the powers and duties of officers of the Excise
Department;
(c) prescribing the manner in which appeals or revisions shall
be presented and the procedure for dealing with such appeals
and revisions;
(d) regulating the import, export, transport or possession of
any intoxicant;
(e) regulating the periods and localities for which, and
the persons to whom, licenses for the vend by wholesale
or by retail of any intoxicant may be granted;
(f) prescribing the procedure to be followed and the matters to
be ascertained before any license for such vend is granted for
any locality;
24
(g) for the prohibition of the sale of any [intoxicant] to
any person or class of persons;
(h) for the grant of expenses to witnesses and compensation
for loss of time to persons released under Section 49 on the
ground that they have been improperly arrested and to
persons charged before a Magistrate with offences punishable
under the Act but acquitted;
(i) regulating the power of excise officers to summon witnesses
from a distance under the provisions of Section 49;
(j) for declaring the excise officers to whom, and the manners
in which, information or aid should be given under Section 56;
(k) for the prohibition of the employment by the license-holder
of any person or class of persons to assist in his business in
any capacity whatsoever;
(l) for the prevention of drunkenness, gambling or disorderly
conduct in or near any licensed premises and the meeting or
remaining of persons of bad character in such premises.
[(m) for the grant of rewards to officials, officers or informers
by the Collector out of and up to fifty per cent of composition
fee and by the Magistrate trying the case, out of and up to fifty
per cent of fine recovered under the Act. ]”
(emphasis supplied by this Court).
40. That apart, the other provision that is required to
be looked into is are Section 23-A of the U.P. General
Clauses Act, 1904 r/w Section 77 of the U.P. Excise Act,
1910, which read as under:-
“23-A. Date of coming into effect of rules and the control
of Legislature over them.-(1) All rules made by the State
Government under an Uttar Pradesh Act shall, as soon as may be
after they are made, be laid before each House of the State
Legislature, while it is in session, for a total period of not less then
thirty days, which may be comprised in one session or two or more
successive sessions, and shall, unless some later date is appointed,
take effect from the date of their publication in the Gazette subject to
such modifications or annulments as the two Houses of the
Legislature may, during the said period, agree to make, so however,
that any such modification or annulments as the two Houses of the
Legislature may, during the said period, agree to make so however,
that any such modification or annulment shall be without prejudice to
the validity of anything previously done thereunder.
(2) Where any Central Act, in force in or applicable to Uttar
Pradesh and relating to matters with respect to which the State
Legislature has power to make laws for Uttar Pradesh, confers power
on the State Government to make rules thereunder then subject to
any express provisions to the contrary in such Act, the provisions of
subsection (1) shall mutatis mutandis apply to the rules made by the
State Government in exercise of that power.]
77. Publication of rules and notifications.- All rules made
and notifications issued under the Act shall be published in the
Official Gazette, and shall have effect as if enacted in this Act from
the date of such publication or from such other date as may be
specified in that behalf:
25
[Provided that notwithstanding anything to the contrary
contained in this section or in any judgment, decree or order,
the Notification Nos.3514-E/ XIII-331-78 and 1227-E/ XIII-
332-78, both dated April 17, 1978, made by the State
Government in exercise of the powers under Sections 28 and
29 of the amendments made by the aforesaid notifications
shall have effect and be deemed always to have effect on and
from April 1, 1978:][Provided further that notwithstanding anything to the contrary
contained in this section, or in any contract, judgment, decree
or order, the Notification No.3842-E/ XIII-512-83, dated May
25, 1983, made by the State Government in exercise of the
powers under Section 30 shall have effect and be deemed
always to have effect on and from April 1, 1983.]”
41. The interpretation and consideration of the law is to
be interspersed and appreciated in the backdrop of the Uttar
Pradesh Rules of Business, 1975 and the Business of
Uttaranchal (Allocation) Rules, 2003.
42. The point that is canvassed by the petitioners is the
legality and the competence of the Excise Commissioner to
make rules and the legality of the Rules notified in exercise of
the powers vested u/s 40, on 05th March, 2025. It would be
beneficial to examine the law regarding delegation or
excessive delegation, or what tantamounts to excessive
delegation and one of the earliest ruling of the Hon’ble Apex
Court is rendered in the case of “M.K. Papiah & Sons vs.
Excise Commissioner & another“, reported (1975) 1 SCC
492. Paragraph Nos.11 to 19 read as under:-
“11. We are not certain whether the preamble of the Act gives
any guidance for fixing the rate of excise duty. But that does not
mean that the Legislature here has no control over the delegate. The
legislative control over delegated legislation may take many forms.
12. In Corporation of Calcutta v. Liberty Cinema [AIR 1965 SC
1107, the validity of Section 548(2) of the Calcutta Municipal Act,
1951, which empowered the Corporation to levy fees “at such rates
as may from time to time be fixed by the Corporation” was
challenged on the ground of excessive delegation as it provided no
26guidance for the fixation of the amount. The majority upheld the
provision relying on the decision in Banarsi Das v. State of M.P. [AIR
1958 SC 909] holding that the fixation of rates of tax not being an
essential legislative function, could be validly delegated to a non-
legislative body, but observed that when it was left to such a body,
the Legislature must provide guidance for such fixation. The
Court found the guidance in the monetary needs of the Corporation
for carrying out the functions entrusted to it under the Act.
13. In Municipal Board, Hapur v. Raghuvendra Kripal [AIR
1966 SC 693, the validity of the U.P. Municipalities Act, 1916, was
involved. The Act had empowered the municipalities to fix the rate of
tax and after having enumerated the kinds of taxes to be
levied, prescribed an elaborate procedure for such a levy and
also provided for the sanction of the Government. Section
135(3) of the Act raised a conclusive presumption that the procedure
prescribed had been gone through on a certain notification being
issued by the Government in that regard. This provision, it was
contended, was ultra vires because there was an abdication of
essential legislative functions by the Legislature with respect to the
imposition of tax inasmuch as the State Government was given the
power to condone the breaches of the Act and to set at naught the
Act itself. This, it was contended, was an indirect exempting or
dispensing power. Hidayatullah, J. speaking for the majority, said
that regard being had to the democratic set up of the municipalities
which need the proceeds of these taxes for their own administration,
it is proper to leave to these municipalities the power to impose and
collect these taxes. He further said that apart from the fact that the
Board was a representative body of the local population on whom the
tax was levied, there were other safeguards by way of checks
and controls by Government which could veto the action of the
Board in case it did not carry out the mandate of the
Legislature.
14. In Devi Dass Gopal Krishnan v. State of Punjab [AIR 1967
SC 1895] the question was whether Section 5 of the East Punjab
General Sales Tax Act, 1948, which empowered the State
Government to fix sales tax at such rates as it thought fit was bad.
The Court struck down the section on the ground that the Legislature
did not lay down any policy or guidance to the Executive in the
matter of fixation of rates. Subba Rao, C.J., speaking for the Court,
pointed out that the needs of the State and the purposes of the Act
would not provide sufficient guidance for the fixation of rates of tax.
He pointed out the danger inherent in the process of delegation:
“An overburdened Legislature or one controlled by a powerful
Executive may unduly overstep the limits of delegation. It may
not lay down any policy at all: it may declare its policy in
vague and general terms; it may not set down any
standard for the guidance of the Executive; it may confer
an arbitrary power on the Executive to change or modify
the policy laid down by it without reserving for itself any
control over subordinate legislation. This self-effacement
of legislative power in favour of another agency either in whole
or in part is beyond the permissible limits of delegation.”
In Municipal Corporation of Delhi v. Birla Cotton Spinning and
Weaving Mills [AIR 1968 SC 1232 : (1968) 3 SCR 251] the
main question was about the constitutionality of delegation of
taxing powers to municipal corporations. The Delhi Municipal
Corporation Act (66 of 1957) by Section 113(2) had
empowered the Corporation to levy certain optional taxes.
Under Section 150, power was given to the Corporation to
define the maximum rate of tax to be levied, the classes of
27
persons and the description of articles and property to be
taxed, the systems of assessment to be adopted and the
exemptions, if any, to be granted. The majority of the Court
held the delegation to be valid. Wanchoo, C.J. observed that
there were sufficient guidance, checks and safeguards in the
Act which prevented excessive delegation. The learned Chief
Justice observed that statements in certain cases to the effect
that the power to fix rates of taxes is not an essential
legislative function were too broad and that
“the nature of the body to which delegation is made is
also a factor to be taken into consideration in
determining whether there is sufficient guidance in the
matter of delegation.”
According to the learned Chief Justice, the fact that
delegation was made to an elected body responsible to the people
including those who paid taxes provided a great check on the
elected councillors imposing unreasonable rates of tax. He then
said:
“The guidance may take the form of providing maximum
rates of tax up to which a local body may be given the discretion
to make its choice, or it may take the form of providing for
consultation with the people of the local area and then fixing the
rates after such consultation. It may also take the form of
subjecting the rate to be fixed by the local body to the approval of
Government which acts as a watch-dog on the actions of the local
body in this matter on behalf of the Legislature. There may be
other ways in which guidance may be provided.”
15. In Sita Ram Bishambhar Dayal v. State of U.P. [(1972) 4 SCC
485] Section 3-D(1) of the U.P. Sales Tax Act, 1948, had provided for
levying taxes at such rates as may be prescribed by the State
Government not exceeding the maximum prescribed therein. Hegde, J.,
in speaking for the Court, observed: [SCC p. 487 para 5, SCC (Tax) p.
296]
“However much one might deplore the ‘New Despotism’ of
the Executive, the very complexity of the modern society and the
demand it makes on its Government have set in motion forces
which have made it absolutely necessary for the Legislatures to
entrust more and more powers to the Executive. Text book
doctrines evolved in the 19th century have become out of date.
16. In this case, we think that Section 71 of the Act which
provides for the rule-making power imposes the necessary check upon
the wide power given to the Government to fix the rate. Sub-section (4)
of that section provides:
“Every rule made under this section shall be laid as soon as
may be after it is made, before each House of the State
Legislature while it is in session for a total period of thirty days
which may be comprised in one session or in two or more
successive sessions and if before the expiry of the session in
which it is so laid or the session immediately following, both
Houses agree in making any modification in the rule (it?) shall
thereafter have effect only in such modified form or be of no
effect, as the case may be; so however that any such modification
or annulment shall be without prejudice to the validity of anything
previously done under that rule.
17. The appellant submitted that Section 71(4) does not provide a
guarantee for legislative control over delegated legislation. The
argument was that the rules would come into force as soon as they are
framed and that the power of the Legislature to annul the rules
28
subsequently cannot be regarded as sufficient control over delegated
legislation.
18. That laying of rules before the Legislature is control over
delegated legislation is implied in the speech of Lord Thankerton in the
House of Lords in Minister of Health v. King [1931 AC 524] where he
said:
“In this case, as in similar cases that have come before the courts,
Parliament has delegated its legislative function to a Minister of
the Crown, but in this case Parliament has retained no specific
control over the exercise of the function by the Minister, such as a
condition that the order should be laid before Parliament and
might be annulled by a resolution of either House within a limited
period.”
19. In Institute of Patent Agents v. Joseph Lockwood [1894 AC
347] Lord Watson said:
“The Legislature retained so far a check that it required that the
regulations which they framed should be laid upon the table of
both Houses; and of course these regulations could have been
annulled by an unfavourable resolution upon a motion made in
either House.”
(emphasis supplied by this Court)
43. On a plain reading of the above, it is apparent that
the Hon’ble Apex Court has drawn a clear distinction
between, matters which are essentially legislative in nature
and matters that are not essential legislative function.
Proceeding further, the Hon’ble Apex Court has recognized
the inevitability of discharge of legislative functions by the
Executive, but the ratio clearly settled by the above judgment
after placing reliance on its own rulings is that the rule
making power that may be entrusted to the Executive can be
delegated only after providing a proper policy or guidance for
the purpose of achieving the objective of the Act or Rules,
and; that any enabling provision, enabling the Executive
which is not bounded by policy or guidance is liable to be
struck down. What can be deduced from the above ratio is
that, the Legislature may invest the Executive to perform a
legislative function within definite boundaries and any
enabling provision which confers an arbitrary power on the
29
Executive to change or modify the policy would amount to a
subordinate legislation resulting in self-effacement of
legislative power in favour of an agency other than the
legislature, and which in the wisdom of the Hon’ble Apex
Court is beyond the permissible limits of delegation.
44. In the case on hand, the limits of delegation is
clearly set-out under Section 10(2)(f) of the Act of 1910,
wherein it is unambiguously stipulated that the rule making
power in respect of subject matters envisaged under Sections
40 r/w Section 37-A cannot be delegated to the Excise
Commissioner. Despite this embargo, the facts disclose that
the impugned Government Order notifying the “adjoining
areas” and specifying the boundaries of a specified area
wherein prohibition is imposed, has been issued by the Excise
Commissioner, contrary to the mandate of Section 40 r/w
Section 37-A and Section 10(2)(f). The Excise Commissioner
having been expressly prohibited from being invested with
the jurisdiction to make any subordinate legislation in respect
of the matters enumerated under Section 40 r/w Section 37-
A, the impugned proceedings fall foul of the mandate of law.
45. A useful reference could also be made to the law
laid down by the Hon’ble Apex Court in the case of St. Johns
Teachers Training Institute vs. Regional Director,
National Council for Teacher Education &another,
30
reported in (2003) 3 SCC 321, wherein in Paragraph
Nos.10, 12, 16 and 17, the Hon’ble Apex Court has been
pleased to elucidate on the importance of the subordinate
legislation being made validly and also regarding the checks
and balances against the excessive delegation. Paragraph
Nos.10, 12, 16 and 17 read as under:-
“10. A regulation is a rule or order prescribed by a superior for
the management of some business and implies a rule for general
course of action. Rules and regulations are all comprised in delegated
legislations. The power to make subordinate legislation is
derived from the enabling Act and it is fundamental that the
delegate on whom such a power is conferred has to act within
the limits of authority conferred by the Act. Rules cannot be
made to supplant the provisions of the enabling Act but to
supplement it. What is permitted is the delegation of ancillary
or subordinate legislative functions, or, what is fictionally
called, a power to fill up details. The legislature may, after laying
down the legislative policy confer discretion on an administrative
agency as to the execution of the policy and leave it to the agency to
work out the details within the framework of policy. The need for
delegated legislation is that they are framed with care and
minuteness when the statutory authority making the rule,
after coming into force of the Act, is in a better position to
adapt the Act to special circumstances. Delegated legislation
permits utilisation of experience and consultation with interests
affected by the practical operation of statutes. Rules and regulations
made by reason of the specific power conferred by the statutes to
make rules and regulations establish the pattern of conduct to be
followed. Regulations are in aid of enforcement of the provisions of
the statute. The process of legislation by departmental regulations
saves time and is intended to deal with local variations and the power
to legislate by statutory instrument in the form of rules and
regulations is conferred by Parliament. The main justification for
delegated legislation is that the legislature being overburdened and
the needs of the modern-day society being complex, it cannot
possibly foresee every administrative difficulty that may arise after
the statute has begun to operate. Delegated legislation fills those
needs. The regulations made under power conferred by the statute
are supporting legislation and have the force and effect, if validly
made, as an Act passed by the competent legislature. (See Sukhdev
Singh v. BhagatramSardar Singh Raghuvanshi [(1975) 1 SCC 421 :
1975 SCC (L&S) 101 : AIR 1975 SC 1331] .)
12. The question whether any particular legislation suffers from
excessive delegation has to be decided having regard to the subject-
matter, the scheme, the provisions of the statute including its
preamble and the facts and circumstances in the background of which
the statute is enacted. (See Registrar of Coop. Societies v. K.
Kunjabmu [(1980) 1 SCC 340 : AIR 1980 SC 350] and State of
Nagaland v. Ratan Singh [AIR 1967 SC 212 : 1967 Cri LJ 265] .) It is
also well settled that in considering the vires of subordinate
legislation one should start with the presumption that it is intra vires
and if it is open to two constructions, one of which would make it
valid and the other invalid, the courts must adopt that construction
31
which makes it valid and the legislation can also be read down to
avoid its being declared ultra vires.
16. The contention that there are no guidelines for the State
Governments regarding grant of an NOC and consequently, the State
Governments may refuse to grant an NOC on wholly irrelevant
considerations is without substance. It is averred in para 7 of the
counter-affidavit filed by the Council that it has issued certain
guidelines to the State Governments on 2-2-1996 for issuance of an
NOC and a copy whereof has also been annexed. The relevant part of
the guidelines is being reproduced below:
“1. The establishment of teachers’ training institutions by
Government, private managements or any other agencies
should largely be determined by assessed need for trained
teachers. This need should take into consideration the supply
of trained teachers from existing institutions, the requirement
of such teachers in relation to enrolment projections at various
stages, the attrition rates among trained teachers due to
superannuation, change of occupation, death etc. and the
number of trained teachers on the live register of the
employment exchanges seeking employment and the
possibility of their deployment. The States having more than
the required number of trained teachers may not encourage
opening of new institutions for teacher education or to increase
the intake.
2. States having shortage of trained teachers may encourage
establishment of new institutions for teacher education and to
increase intake capacity for various levels of teacher education
institutions keeping in view the requirements of teachers
estimated for the next 10-15 years.
3. Preference might be given to institutions which tend to
emphasize the preparation of teachers for subjects (such as
Science, Mathematics, English etc.) for which trained teachers
have been in short supply in relation to requirement of schools.
4. Apart from the usual courses for teacher preparation,
institutions which propose to concern themselves with new
emerging specialities (e.g. computer education, use of
electronic media, guidance and counselling etc.) should receive
priority. Provisions for these should however, be made only
after ensuring that requisite manpower, equipment and
infrastructure are available. These considerations will also be
kept in view by the institution intending to provide for optional
subjects to be chosen by students such as guidance and
counselling special education etc.
5. With a view to ensuring supply of qualified and trained
teachers for such specialities such as education of the disabled,
non-formal education, education of adults, preschool
education, vocational education etc. special efforts and
incentives may be provided to motivate private
managements/voluntary organisations for establishment of
institutions, which lay emphasis on these areas.
6. With a view to promoting professional commitment among
prospective teachers, institutions which can ensure adequate
residential facilities for the Principal and staff of the institutions
as well as hostel facilities for a substantial proportion of its
enrolment should be encouraged.
7. Considering that certain areas (tribal, hilly regions etc.)
have found it difficult to attain qualified and trained teachers, it
32would be desirable to encourage establishment of training
institutions in those areas.
8. Institutions should be allowed to come into existence only if
the sponsors are able to ensure that they have adequate
material and manpower resources in terms, for instance, of
qualified teachers and other staff, adequate buildings and other
infrastructure (laboratory, library etc.), a reserve fund and
operating funds to meet the day-to-day requirements of the
institution, including payment of salaries, provision of
equipment etc. Laboratories, teaching science methodologies
and practicals should have adequate gas plants, proper fittings
and regular supply of water, electricity etc. They should also
have adequate arrangements. Capabilities of the institution for
filling norms prepared by NCTE may be kept in view.
9. In the establishment of an institution preference needs to be
given to locations which have a large catchment area in terms
of schools of different levels where student teachers can be
exposed to demonstration lessons and undertake practice
teaching. A training institution which has a demonstration
school where innovative and experimental approaches can be
demonstrated could be given preference.”
17. A perusal of the guidelines would show that while considering
an application for grant of an NOC the State Government or the
Union Territory has to confine itself to the matters enumerated
therein like assessed need for trained teachers, preference to such
institutions which lay emphasis on preparation of teachers for
subjects like Science, Mathematics, English etc. for which trained
teachers are in short supply and institutions which propose to
concern themselves with new and emerging specialities like computer
education, use of electronic media etc. and also for speciality
education for the disabled and vocational education etc. It also lays
emphasis on establishment of institutions in tribal and hilly regions
which find it difficult to get qualified and trained teachers and
locations which have catchment area in terms of schools of different
levels where student teachers can be exposed to demonstration
lessons and can undertake practice teaching. Para 8 of the guidelines
deals with financial resources, accommodation, library and other
infrastructure of the institution which is desirous of starting a course
of training and teacher education. The guidelines clearly pertain to
the matters enumerated in sub-section (3) of Section 14 of the Act
which have to be taken into consideration by the Regional Committee
while considering the application for granting recognition to an
institution which wants to start a course for training in teacher
education. The guidelines have also direct nexus to the object of the
Act, namely, planned and coordinated development of teacher
education system and proper maintenance of norms and standards. It
cannot, therefore, be urged that the power conferred on the State
Government or Union Territory, while considering an application for
grant of an NOC, is an arbitrary or unchannelled power. The State
Government or the Union Territory has to necessarily confine itself to
the guidelines issued by the Council while considering the application
for grant of an NOC. In case the State Government does not take into
consideration the relevant factors enumerated in sub-section (3) of
Section 14 of the Act and the guidelines issued by the Council or
takes into consideration factors which are not relevant and rejects the
application for grant of an NOC, it will be open to the institution
concerned to challenge the same in accordance with law. But, that by
itself, cannot be a ground to hold that the Regulations which require
an NOC from the State Government or the Union Territory are ultra
vires or invalid.”
33
46. On a reading of the law as elucidated by the
Hon’ble Apex Court, hereinabove, it can be safely discerned
that a rule or order is a regulation prescribed by a superior
for the management of the businesses. That the power to
make subordinate legislation is derived from the enabling act
and it is fundamentally that the delegatee has to act within
the limits of authority conferred upon it by the Act. That rules
cannot be made to supplant the provisions of the enabling act
only to the extent of supplementing it; that what can be
delegated is only ancillary function or in the wisdom of the
Hon’ble Apex Court, a power to fill-up details. That delegated
legislation ought to be framed with care and minuteness in
order that the enable easy adaptation of the Act once it
comes in force. The Hon’ble Apex Court has held that the
main justification for permitting delegated legislation is
because the legislature is over-burdened and the needs of the
modern society being complex, it would be difficult for the
legislature for foresee any administrative difficulty that may
arise. That apart, in Paragraph No.16, the Hon’ble Apex Court
has examined the guidelines that have been framed under
the enabling act and thus, providing a definitive area of
operation to the delegate.
47. The Constitution Bench of the Hon’ble Apex Court in
the case of “Rojer Mathew vs. South Indian Bank Ltd. &
34
others“, reported in (2020) 6 SCC 1, after a detailed
consideration of several of its own rulings, has been pleased
to hold in Paragraph 120 to 137 as under:-
“120. The Eighth Schedule referred to in Section 183 contains a
list of 19 tribunals with corresponding enactments under which they
were constituted. Section 183 overrides the provisions of the enactments
specified in Column 3 of the Eighth Schedule and mandates that from
the appointed date, the Chairperson, Vice-Chairperson, Chairman, Vice-
Chairman, President, Vice-President, Presiding Officer or Member of the
Tribunal, Appellate Tribunal or, as the case may be, other authorities as
specified in Column 2 of the Eighth Schedule shall be appointed in terms
of provisions of Section 184 of the Finance Act. These provisions,
however, do not apply to those who have already been appointed to the
said posts immediately before the appointed date, that is the date on
which the Central Government may, by a notification in the Official
Gazette, bring the said provisions into effect.
121. Section 184, to repeat, reads as under:
“184. Qualifications, appointment, term and conditions of service,
salary and allowances, etc. of Chairperson, Vice-Chairperson and
Members, etc. of the Tribunal, Appellate Tribunal and Other
Authorities.–(1) The Central Government may, by notification,
make rules to provide for qualifications, appointment, term of
office, salaries and allowances, resignation, removal and the other
terms and conditions of service of the Chairperson, Vice-
Chairperson, Chairman, Vice-Chairman, President, Vice-President,
Presiding Officer or Member of the Tribunal, Appellate Tribunal or,
as the case may be, other authorities as specified in Column 2 of
the Eighth Schedule:
Provided that the Chairperson, Vice-Chairperson, Chairman, Vice-
Chairman, President, Vice-President, Presiding Officer or Member
of the Tribunal, Appellate Tribunal or other Authority shall hold
office for such term as specified in the rules made by the Central
Government but not exceeding five years from the date on which
he enters upon his office and shall be eligible for reappointment:
Provided further that no Chairperson, Vice-Chairperson, Chairman,
Vice-Chairman, President, Vice-President, Presiding Officer or
Member shall hold office as such after he has attained such age as
specified in the rules made by the Central Government which shall
not exceed,–
(a) in the case of Chairperson, Chairman or President, the age
of seventy years;
35
(b) in the case of Vice-Chairperson, Vice-Chairman, Vice-
President, Presiding Officer or any other Member, the age of
sixty-seven years:
(2) Neither the salary and allowances nor the other terms and
conditions of service of Chairperson, Vice-Chairperson, Chairman,
Vice-Chairman, President, Vice-President, Presiding Officer or
Member of the Tribunal, Appellate Tribunal or, as the case may be,
other authority may be varied to his disadvantage after his
appointment.
122. Section 184 has conferred upon the Central Government
power to make rules by way of notification to provide for (a)
qualifications; (b) appointment; (c) term of office; (d) salaries and
allowances; (e) resignation; and (f) removal and other terms and
conditions of service of the Chairperson, Vice-Chairperson, Chairman,
Vice-Chairman, President, Vice-President, Presiding Officer or
Member of the Tribunal, Appellate Tribunal or, as the case may be,
other Authorities as specified in Column 2 of the Eighth Schedule. The
first proviso states that the incumbent officers shall hold office for
such terms as may be specified in the rules made by the Central
Government but the term shall not exceed five years from the date
on which he assumes the office and shall be eligible for
reappointment. The second proviso states that the persons so
appointed shall hold office till they attain the age specified in the
rules made by the Central Government which shall not exceed in the
case of Chairperson, Chairman and the President, the age of 70 years
and in the case of Vice-Chairperson, Vice-Chairman, Vice-President or
any other Members, the age of 67 years. Sub-section (2) of Section
184 states that the salaries and allowances and other terms and
conditions of service of the persons appointed may not be varied to
their disadvantage after appointment.
123. Section 185(1) of the Finance Act is also relevant and
reads:
“185. Transitional provisions.–(1) Any person appointed
as the Chairperson or Chairman, President or Vice-Chairperson or
Vice-Chairman, Vice-President or Presiding Officer or Member of the
Tribunals, Appellate Tribunals, or as the case may be, other
authorities specified in Column 2 of the Ninth Schedule and holding
office as such immediately before the appointed day, shall on and
from the appointed day, cease to hold such office and such
Chairperson or Chairman, President, Vice-Chairperson or Vice-
Chairman, Vice-President or Presiding Officer or Member shall be
entitled to claim compensation not exceeding three months’ pay and
allowances for the premature termination of term of their office or of
any contract of service.”
The Chairperson or Chairman, President or Vice-Chairperson or
Vice-Chairman, Vice-President or Presiding Officer or Member of the
Tribunals/Appellate Tribunals specified in Column 2 of the Ninth
Schedule who hold office as per the above provisions before the
appointed date shall cease to do so and will be entitled to
compensation not exceeding three months’ pay and allowance for the
premature termination of the office or the contract of office.
However, we would clarify that presently we are not examining
constitutional vires of sub-section (1) to Section 185.
124. Section 186 of the Finance Act, 2017 reads as under:
“186. General power to make rules.–Without prejudice to any
other power to make rules contained elsewhere in this Part,
the Central Government may, by notification, make rules
generally to carry out the provisions of this Part.”
The aforesaid provisions stipulate that without prejudice to any
other power to make rules contained elsewhere in Part XIV of the
36
Finance Act, 2017, the Central Government may, by notification,
make rules generally to carry out the provisions of the said Part.
125. Reading of the said provisions indicates that except for
providing the upper age-limit and that the person appointed shall not
have tenure exceeding five years from the date on which he enters
office and shall be eligible for re-appointment, the Finance Act
delegates the power to specify the qualifications, method of selection
and appointment, terms of office, salaries and allowances, removal
including resignation and all other terms and conditions of service to
the Central Government which would act as a delegatee of
Parliament. The governing statutory provisions embodied in the
existing parent legislation specified in Column 3 of the Schedule and
the rules made thereunder are overwritten and authority and power
is conferred on the Central Government to decide qualifications for
appointment, process for selection, and terms and conditions of
service including salaries, allowances, resignation and removal
through delegated or subordinate legislation. Before we look into the
vires of this delegation, it behoves us to recount and reflect on the
approach adopted by this Court in gauging the validity of delegated
legislation.
126. This Court addressed this conundrum the first time
in Delhi Laws Act, 1912, In re [Delhi Laws Act, 1912, In re, 1951 SCC
568 : AIR 1951 SC 332] wherein a seven-Judge Bench delivered
seven different judgments clearly evincing the divergence of opinion
on the issue. Albeit, the majority view, as clarified and held by J.M.
Shelat, J. speaking for the majority in B. Shama Rao v. State (UT of
Pondicherry) [B. Shama Rao v. State (UT of Pondicherry), AIR 1967
SC 1480] , can be deduced as under : (B. Shama Rao case [B.
Shama Rao v. State (UT of Pondicherry), AIR 1967 SC 1480] , AIR p.
1486, para 5)
“5. … In view of the intense divergence of opinion except for
their conclusion partially to uphold the validity of the said laws
it is difficult to deduce any general principle which on the
principle of stare decisis can be taken as binding for future
cases. It is trite to say that a decision is binding not because of
its conclusion but in regard to its ratio and the principle laid
down therein. The utmost, therefore, that can be said of this
decision is that the minimum on which there appears to be
consensus was (1) that legislatures in India both before and
after the Constitution had plenary power within their respective
fields; (2) that they were never the delegates of the British
Parliament; (3) that they had power to delegate within certain
limits not by reason of such a power being inherent in the
legislative power but because such power is recognised even in
the United States of America where separatist ideology prevails
on the ground that it is necessary to effectively exercise the
legislative power in a modern State with multifarious activities
and complex problems facing legislatures; and (4) that
delegation of an essential, legislative function which amounts
to abdication even partial is not permissible. All of them were
agreed that it could be in respect of subsidiary and ancillary
power.
127. All the seven Judges in Delhi Laws Act, 1912, In re [Delhi
Laws Act, 1912, In re, 1951 SCC 568 : AIR 1951 SC 332] were in
unison that abdication or effacement by conferring the power of
legislation to the subordinate authority, even if partial, is not
permissible. The difference of opinion primarily arose from the
meaning and scope of the abdication or effacement of the legislative
power. On the said aspect, we would like to refer to the judgments of
Fazl Ali, J., Mukherjea, J. and Bose, J. Fazl Ali, J. had expressed the
said principle as : (Delhi Laws Act, 1912, In re case [Delhi Laws Act,
1912, In re, 1951 SCC 568 : AIR 1951 SC 332] , SCC pp. 611 & 615-
16, paras 11, 19 & 22)
37
“11. … ‘The true distinction … is this. The legislature cannot
delegate its power to make a law; but it can make a law to
delegate a power to determine some fact or state of things
upon which the law makes, or intends to make, its own action
depend. To deny this would be to stop the wheels of
Government [Locke’s Appeal, (1873) 72 Pa 491] .’
***
2. The true import of the rule against delegation is this:
19. This rule in a broad sense involves the principle underlying
the maxim, delegatus non potest delegare, but it is apt to be
misunderstood and has been misunderstood. In my judgment,
all that it means is that the legislature cannot abdicate its
legislative functions and it cannot efface itself and set up a
parallel legislature to discharge the primary duty with which it
has been entrusted. This rule has been recognised both in
America and in England….
***
22. What constitutes abdication and what class of cases will be
covered by that expression will always be a question of fact,
and it is by no means easy to lay down any comprehensive
formula to define it, but it should be recognised that the rule
against abdication does not prohibit the legislature from
employing any subordinate agency of its own choice for doing
such subsidiary acts as may be necessary to make its
legislation effective, useful and complete.”
The learned Judge had further observed that an act is a law
when it embodies policies, defines standards and directs the authority
chosen to act within certain prescribed limits and not go beyond. The
Act should be a complete expression of the will of the legislature to
act in a particular way and of its command on how it should be
carried out. When the legislature decides the circumstances as the
best way to legislate on a subject, then, such legislation does not
amount to abdication of powers because from the very nature to
legislation it is manifest that when power is misused it can be
withdrawn, altered and repealed. Most importantly, the delegate is to
only adopt and extend the laws enacted by the legislature.
128. Mukherjea, J. in Delhi Laws Act, 1912, In re [Delhi Laws
Act, 1912, In re, 1951 SCC 568 : AIR 1951 SC 332] opined that the
legislative functions concern with declaring the legislative policy and
laying down the standards which is to be enacted into a rule of law,
and what can be delegated as the task of subordinate legislation by
its very nature is ancillary to the statute which delegates the power
to make it. When the legislative policy is enunciated with sufficient
clearness or the standards are laid down, the courts cannot interfere
with the discretion that the legislature has exercised in determining
the extent of necessary delegation. The delegatee cannot be allowed
to check the policy declared by the legislators and cannot be given
the power to repeal or abrogate any statute.
129. Bose, J. in Delhi Laws Act, 1912, In re [Delhi Laws Act,
1912, In re, 1951 SCC 568 : AIR 1951 SC 332] while observing that
the main function of the legislature is to legislate and not leave it to
others, nevertheless acknowledged that it is impossible to carry on
Government of a modern State with its infinite complexities and
ramifications without a large devolution of power and delegation of
authority. This is a practical necessity which has been acknowledged
even by the American courts. To decide otherwise would make it
difficult for the Government to function and work effectively.
130. A Division Bench of this Court in Ramesh Birch v. Union of
India [Ramesh Birch v. Union of India, 1989 Supp (1) SCC 430] had
examined the aforesaid seven opinions in Delhi Laws Act, 1912, In
re [Delhi Laws Act, 1912, In re, 1951 SCC 568 : AIR 1951 SC 332]
and culled out the ratio to observe that the lines of reasoning were
different but nevertheless the Judges had accepted the inevitable that
38
while Parliament has ample and extensive powers of legislation, these
would include the power to entrust some of the functions and powers
to another body or authority. At the same time, in Delhi Laws
Act [Delhi Laws Act, 1912, In re, 1951 SCC 568 : AIR 1951 SC 332]
the Judges had agreed that there should be limitations on such
delegation. However, on the question as to what is this limitation,
there was a lack of consensus. The two Judges in Ramesh
Birch [Ramesh Birch v. Union of India, 1989 Supp (1) SCC 430]
relying on the ratio in Delhi Laws Act [Delhi Laws Act, 1912, In re,
1951 SCC 568 : AIR 1951 SC 332] , had observed : (Ramesh Birch
case [Ramesh Birch v. Union of India, 1989 Supp (1) SCC 430] , SCC
p. 467, para 19)
“19. … Some thought that there is no abdication or effacement
unless it is total i.e. unless Parliament surrenders its powers in
favour of a “parallel” legislature or loses control over the local
authority to such an extent as to be unable to revoke the
powers given to, or to exercise effective supervision over, the
body entrusted therewith. But others were of opinion that such
“abdication” or “effacement” could not even be partial and it
would be bad if full powers to do everything that the legislature
can do are conferred on a subordinate authority, although the
legislature may retain the power to control the action of such
authority by recalling such power or repealing the Acts passed
by the subordinate authority. A different way in which the
second of the above views has been enunciated–and it is this
view which has dominated since–is by saying that the
legislatures cannot wash their hands off their essential
legislative function. Essential legislative function consists in
laying down the legislative policy with sufficient clearness and
in enunciating the standards which are to be enacted into a
rule of law. This cannot be delegated. What can be delegated is
only the task of subordinate legislation which is by its very
nature ancillary to the statute which delegates the power to
make it and which must be within the policy and framework of
the guidance provided by the legislature.”
Thereupon the Division Bench had referred to the “policy and
guideline” theory as a test to decide whether or not it is a case of
excessive delegation which it was observed means reference and
giving proper regard to the context of the Act and the object and
purposes sought to be achieved which should be clear and it is not
necessary that the legislation should “dot all the i’s and cross all the
t’s of its policy”. It is sufficient if it gives the broadest indication of
the general policy of the legislature.
131. We would now refer to an earlier decision of this Court
in Devi Das Gopal Krishnan v. State of Punjab [Devi Das Gopal
Krishnan v. State of Punjab, AIR 1967 SC 1895] wherein K. Subba
Rao, C.J. speaking for the Court had struck down Section 5 of the
East Punjab General Sales Tax Act, 1948 which had empowered the
State Government to fix rate of tax to such rate as it deemed fit, as
bad and unconstitutional observing that the needs of the State and
the purposes of the Act did not provide sufficient guidance for fixing
the rates of tax. It was observed : (AIR p. 1901, para 15)
“15. … ‘But in view of the multifarious activities of a welfare
State, it cannot presumably work out all the details to suit the
varying aspects of a complex situation. It must necessarily
delegate the working out of details to the executive or any
other agency. But there is a danger inherent in such a process
of delegation. An overburdened legislature or one controlled by
a powerful executive may unduly overstep the limits of
delegation. It may not lay down any policy at all; it may
declare its policy in vague and general terms; it may not set
down any standard for the guidance of the executive; it may
confer an arbitrary power on the executive to change or modify
39
the policy laid down by it without reserving for itself any
control over subordinate legislation. This self-effacement of
legislative power in favour of another agency either in whole or
in part is beyond the permissible limits of delegation. It is for a
court to hold on a fair, generous and liberal construction of an
impugned statute whether the legislature exceeded such limits.
But the said liberal construction should not be carried by the
courts to the extent of always trying to discover a dormant or
latent legislative policy to sustain an arbitrary power conferred
on executive authorities. It is the duty of the court to strike
down without any hesitation any arbitrary power conferred on
the executive by the legislature.’
132. A year later in MCD v. Birla Cotton Spg. & Wvg.
Mills [MCD v. Birla Cotton Spg. & Wvg. Mills, AIR 1968 SC 1232] this
Court, however, upheld Section 113(2) of the Delhi Municipal Act,
1957 which had empowered the corporation to levy certain optional
taxes by observing that there were sufficient guidelines, safeguards
and checks in the Act which prevented excessive delegation as the
Act had provided maximum rate of tax. It was observed that the
nature of body to which delegation is made is also a relevant factor to
be taken into consideration in determining whether there is sufficient
guidance in the matter of delegation and also when delegation is
made to an elected body accountable to the people including those
who paid taxes, as this acted as a sufficient check. It was observed :
(AIR p. 1244, para 28)
“28. A review of these authorities therefore leads to the
conclusion that so far as this Court is concerned, the principle
is well established that essential legislative function consists of
the determination of the legislative policy and its formulation
as a binding rule of conduct and cannot be delegated by the
legislature. Nor is there any unlimited right of delegation
inherent in the legislative power itself. This is not warranted by
the provisions of the Constitution. The legislature must retain
in its own hands the essential legislative functions and what
can be delegated is the task of subordinate legislation
necessary for implementing the purposes and objects of the
Act. Where the legislative policy is enunciated with sufficient
clearness or a standard is laid down, the courts should not
interfere. What guidance should be given and to what extent
and whether guidance has been given in a particular case at all
depends on a consideration of the provisions of the particular
Act with which the Court has to deal including its Preamble.
Further it appears to us that the nature of the body to which
delegation is made is also a factor to be taken into
consideration in determining whether there is sufficient
guidance in the matter of delegation.”
Thus, the guidelines in the form of providing maximum rates of
tax up to which a local body may be given discretion to make its
choice or provision for consultation with the people of the local area
and then fixing the rates or subjecting the rate of tax so fixed by the
local authority to the approval of the Government which acts as
watchdog were treated as satisfying the policy and guideline test.
133. This ratio in Birla Cotton Spg. & Wvg. Mills [MCD v. Birla
Cotton Spg. & Wvg. Mills, AIR 1968 SC 1232] was followed and
expounded in M.K. Papiah & Sons v. Excise Commr. [M.K. Papiah &
Sons v. Excise Commr., (1975) 1 SCC 492 : 1975 SCC (Tax) 128] in
which this Court had examined what constitutes essential features
that the legislature cannot delegate, to observe that this cannot be
delineated in detail but nevertheless and certainly it does not include
the change of policy. The legislator is the master of the policy and the
delegate is not free to switch the policy for then it would be
usurpation of legislative power itself. Therefore, when the question of
the excessive delegation arises, investigation has to be made
40
whether policy of the legislation has not been indicated sufficiently or
whether change of policy has been left to the pleasure of the
delegate. This aspect is of substantial importance and relevance in
the present case.
134. In Avinder Singh v. State of Punjab [Avinder
Singh v. State of Punjab, (1979) 1 SCC 137] this Court had
highlighted that the founding document, that is, the Constitution had
created three instrumentalities with certain basic powers and it is
axiomatic that legislative powers are not abdicated for this would
mean betrayal of the Constitution and is intolerable in law. Therefore,
legislature cannot self-efface its personality and make over in terms
the plenary and essential legislative functions. Nevertheless, the
complexities of modern administration are bafflingly intricate and
present themselves with urgencies and difficulties and the need for
flexibility, which the direct legislation may not provide. Delegation of
some part of the legislative powers therefore became inevitable and
an administrative necessity. Thus, while essential legislative policy
cannot be delegated, however inessentials can be delegated over to
relevant agencies.
135. Similar opinion was expressed in Registrar of Coop.
Societies v. K. Kunjabmu [Registrar of Coop. Societies v. K.
Kunjabmu, (1980) 1 SCC 340] , wherein it has been observed : (SCC
pp. 342-43, para 3)
“3. … They function best when they concern themselves with
general principles, broad objectives and fundamental issues
instead of technical and situational intricacies which are better
left to better equipped full time expert executive bodies and
specialist public servants. Parliament and the State
Legislatures have neither the time nor the expertise to be
involved in detail and circumstance. Nor can Parliament and
the State Legislatures visualise and provide for new, strange,
unforeseen and unpredictable situations arising from the
complexity of modern life and the ingenuity of modern man.
That is the raison dètre for delegated legislation. That is what
makes delegated legislation inevitable and indispensable. The
Indian Parliament arid the State Legislatures are endowed with
plenary power to legislate upon any of the subjects entrusted
to them by the Constitution, subject to the limitations imposed
by the Constitution itself. The power to legislate carries with it
the power to delegate. But excessive delegation may amount
to abdication. Delegation unlimited may invite despotism
uninhibited. So, the theory has been evolved that the
legislature cannot delegate its essential legislative function.
Legislate it must by laying down policy and principle and
delegate it may to fill in detail and carry out policy. The
legislature may guide the delegate by speaking through the
express provision empowering delegation or the other
provisions of the statute, the Preamble, the scheme or even
the very subject-matter of the statute. If guidance there is,
wherever it may be found, the delegation is valid. A good deal
of latitude has been held to be permissible in the case of taxing
statutes and on the same principle a generous degree of
latitude must be permissible in the case of welfare legislation,
particularly those statutes which are designed to further the
directive principles of State policy.”
The above decision states that the policy and principles test
can be applied through express provisions empowering delegation or
any other provision of the statute including the Preamble, the scheme
or even the subject-matter of the statute.
136. We will refer to a recent decision of this Court
in Keshavlal Khemchand & Sons (P) Ltd. v. Union of India [Keshavlal
Khemchand & Sons (P) Ltd. v. Union of India, (2015) 4 SCC 770 :
(2015) 2 SCC (Civ) 681] wherein a Division Bench of this Court had
41observed that in spite of abundance of authority on the subject we
are not blessed with certainty, and then observed that
in Kunjabmu [Registrar of Coop. Societies v. K. Kunjabmu, (1980) 1
SCC 340] this Court had declined to consider whether M.K. Papiah &
Sons [M.K. Papiah & Sons v. Excise Commr., (1975) 1 SCC 492 :
1975 SCC (Tax) 128] had beaten the final retreat from the position
enunciated in Delhi Laws Act [Delhi Laws Act, 1912, In re, 1951 SCC
568 : AIR 1951 SC 332] and had proceeded to examine the theory of
“policy and guidelines” referring to several judgments. The Division
Bench then went on to observe that the earlier judgments had not
been able to lay down the principle including as to what exactly
constitutes “essential legislative function”, but the following
inferences can be drawn : (SCC p. 796, para 51)
“51.1. The proposition that essential legislative functions
cannot be delegated does not appear to be such a clearly
settled proposition and requires a further examination which
exercise is not undertaken by the counsel appearing in the
matter. We leave it open for debate in a more appropriate case
on a future date. For the present, we confine to the
examination of the question:
‘Whether defining every expression used in an enactment is an
essential legislative function or not?’
51.2. All the judgments examined above recognise that there
is a need for some amount of delegated legislation in the
modern world.
51.3. If the parent enactment enunciates the legislative policy
with sufficient clarity, delegation of the power to make
subordinate legislation to carry out the purpose of the parent
enactment is permissible.
51.4. Whether the policy of the legislature is sufficiently clear
to guide the delegate depends upon the scheme and the
provisions of the parent Act.
51.5. The nature of the body to whom the power is delegated
is also a relevant factor in determining ‘whether there is
sufficient guidance in the matter of delegation’. ”
(emphasis in original)
137. Appropriate in regard to “policy and guideline” test would
be reference to yet another earlier judgment of this Court in Gwalior
Rayon Silk Mfg. (Wvg.) Co. Ltd. v. CST [Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd. v. CST, (1974) 4 SCC 98 : 1974 SCC (Tax) 226 : AIR
1974 SC 1660] wherein while referring to the views of an eminent
American jurist Willoughby, it was stated : (SCC p. 112, paras 24-25)
“24. The matter has been dealt with on p. 1637 of Vol. III
in Willoughby on the Constitution of the United States, 2nd
Edn., in the following words:
‘The qualifications to the rule prohibiting the delegation of
legislative power which have been earlier adverted to are those
which provide that while the real law-making power may not
be delegated, a discretionary authority may be granted to
executive and administrative authorities : (1) to determine in
specific cases when and how the powers legislatively conferred
are to be exercised; and (2) to establish administrative rules
and regulations, binding both upon their subordinates and
upon the public, fixing in detail the manner in which the
requirements of the statutes are to be met, and the rights
therein created to be enjoyed.’
25. The matter has also been dealt with in Corpus Juris
Secundum, Vol. 73, p. 324. It is stated there that the law-
making power may not be granted to an administrative body to
be exercised under the guise of administrative discretion.
Accordingly, in delegating powers to an administrative body
with respect to the administration of statutes, the legislature
42
must ordinarily prescribe a policy, standard, or rule for their
guidance and must not vest them with an arbitrary and
uncontrolled discretion with regard thereto, and a statute or
ordinance which is deficient in this respect is invalid. In other
words, in order to avoid the pure delegation of legislative
power by the creation of an administrative agency, the
legislature must set limits on such agency’s power and enjoin
on it a certain course of procedure and rules of decision in the
performance of its function; and, if the legislature fails to
prescribe with reasonable clarity the limits of power delegated
to an administrative agency, or if those limits are too broad, its
attempt to delegate is a nullity.”
48. In the case on hand, a bare reading of triennial
policy would suffice to demonstrate the ambiguity in the
matter of specifying area to impose prohibition. The enabling
provision Section 37-A r/w Section 40 speak of a “specific
area”, whereas the offending portion speaks of “adjoining
areas”, which by no stretch of imagination can be equated
with a “specific area”.
49. With regard to delegation, the Hon’ble Apex Court
in the case of “The Registrar of Cooperative Societies,
Trivandrum & another vs. K. Kunjabmu & others“,
reported in (1980) 1 SCC 340, has observed in Paragraph
No.3 and the efficacy of the internal aids in the matter of
interpretation of a statute. A useful reference could also be
made to the observations of the Hon’ble Apex Court in
Paragraph No.12. Paragraph Nos.3 and 12 read as under:-
“3. It is trite to say that the function of the State has long
since ceased to confined to the preservation of the public peace, the
exaction of taxes and the defence of its frontiers. It is now the
function of the State to secure to its citizens “Social, economic
and political justice”, to preserve “liberty of thought,
expression, belief, faith and worship” and to ensure “equality
of status and of opportunity” and “the dignity of the
individual” and the ‘unity of the nation’. That is what the
preamble to our Constitution says and that is what is elaborated in
the two vital chapters of the Constitution on Fundamental Rights and
Directive Principles of State Policy. The desire to attain these
43objectives has necessarily resulted in intense legislative activity
touching every aspect of the life of the citizen and the nation.
Executive activity in the field of delegated or subordinate legislation
has increased in direct, geometric progression. It has to be and it is
as it should be. Parliament and the State Legislatures are not bodies
of experts or specialists. They are skilled in the art of discovering the
aspirations, the expectations and the needs, the limits to the patience
and the acquiescence and the articulation of the views of the people
whom they represent. They function best when they concern
themselves with general principles, broad objectives and fundamental
issues instead of technical and situational intricacies which are better
left to better equipped full time expert executive bodies and specialist
public servants. Parliament and the State Legislatures have neither
the time nor the expertise to be involved in detail and circumstance.
Nor can Parliament and the State Legislatures visualise and
provide for new, strange, unforeseen and unpredictable
situations arising from the complexity of modern life and the
ingenuity of modern man. That is the raison d’etre for
delegated legislation. That is what makes delegated legislation
inevitable and indispensable. The Indian Parliament and the State
Legislatures are endowed with plenary power to legislate upon any of
the subjects entrusted to them by the Constitution, subject to the
limitations imposed by the Constitution itself. The power to legislate
carries with it the power to delegate. But excessive delegation may
amount to abdication. Delegation unlimited may invite despotism
uninhibited. So the theory has been evolved that the legislature
cannot delegate its essential legislative function. Legislate it must by
laying down policy and principle and delegate it may to fill in detail
and carry out policy. The legislature may guide the delegate by
speaking through the express provision empowering delegation or the
other provisions of the statute, the preamble, the scheme or even the
very subject-matter of the statute. If guidance there is, wherever it
may be found, the delegation is valid. A good deal of latitude has
been held to be permissible in the case of taxing statutes and on the
same principle a generous degree of latitude must be permissible in
the case of welfare legislation, particularly those statutes which are
designed to further the Directive Principles of State Policy. (emphasis
supplied by this Court)
12. The policy of the Act is there and so are the guidelines.
Why the legislation? “To facilitate the formation and working of
Cooperative Societies.” Cooperative Societies, for what purpose? “For
the promotion of thrift, self-help and mutual aid.”Amongst whom?
“Amongst agriculturists and other persons with common economic
needs.” To what end? “To bring about better living, better business
and better methods of production.”The objectives are clear, the
guidelines are there. There are numerous provisions of the Act
dealing with registration of societies, rights and liabilities of
members, duties of registered societies, privileges of registered
societies, property and funds of registered societies, inquiry and
inspection, supersession of committee of societies, dissolution of
societies, surcharge and attachment, arbitration, etc. We refrain from
referring to the details of the provisions except to say that they are
generally designed to further the objectives set out in the preamble.
But, numerous as the provisions are, they are not capable of
meeting the extensive demands of the complex situations
which may arise in the course of the working of the Act and
the formation and the functioning of the societies. In fact, the
too rigorous applications of some of the provisions of the Act may
itself occasionally result in frustrating the very objects of the Act
instead of advancing them. It is to provide for such situations that
the Government is invested by Section 60 with a power to relax the
occasional rigour of the provisions of the Act and to advance the
objects of the Act. Section 60 empowers the State Government to
44exempt a registered society from any of the provisions of the Act or
to direct that such provision shall apply to such society with specified
modifications. The power given to the government under
Section 60 of the Act is to be exercised so as to advance the
policy and objects of the Act, according to the guidelines as may
be gleaned from the preamble and other provisions which we have
already pointed out, are clear.” (emphasis supplied by this Court)
50. From a reading of Paragraph No.3 above, it is clear
that the Hon’ble Apex Court has recognized the function of
the State having traversed the preservation of public peace
and the exaction of taxes and the defence of its frontiers. It is
further recognized that the functions of the State are all
encompassing and that it is the function of the State to
secure to its citizens “social, economic and political justice”,
expression, belief, faith and worship and to ensure equality of
status and of opportunity and the dignity of the individual and
the ‘unity of the nation’. Elaborating further, the Hon’ble Apex
Court has recognized the need for “delegated legislation”, but
proceeded to caution in role that excessive delegation may
amount to abdication itself and having examined the various
provisions of the Act under challenge therein, concluded that
the power given to the Government under Section 60 of the
Act, i.e. the power of the State Government to exempt
registered society from the applications of the Act, held that
the power ought to be exercised only to advance the policy
and objects of the Act. In the instant case, there is no dispute
that the legislative act by the Government or notifying a
specific area over which the transporting, vending and
possessing of potable liquor came to be banned, i.e. within
45
the limits of Haridwar and Rishikesh Municipal Corporations.
The Revenue laws and the Panchayat Raj Acts and Municipal
Corporation Acts, provided for revenue villages, district
municipalities and the manner for establishing the areas are
provided in detail. That apart, the establishment of above
area, is within the definitive boundary notified and published
in the gazette. On the contrary, “adjoining areas” is neither
definitive nor specific. It would invest unguided and unbridled
power in the Executive to pick and choose any area and
define it as an “adjoining area”.
51. It is also necessary to examine the law regarding
the maxim delegatus non potest delegare. The Hon’ble Apex
Court has elucidated on this maxim in the case of Sahni Silk
Mills (P) Ltd. & another vs. Employees’ State Insurance
Corporation, reported in (1994) 5 SCC 346. Paragraph
Nos.6 to 8 read as under:-
“6. By now it is almost settled that the legislature can
permit any statutory authority to delegate its power to any other
authority, of course, after the policy has been indicated in the
statute itself within the framework of which such delegatee is to
exercise the power. The real problem or the controversy arises when
there is a sub-delegation. It is said that when Parliament has specifically
appointed authority to discharge a function, it cannot be readily
presumed that it had intended that its delegate should be free to
empower another person or body to act in its place. In Barium Chemicals
Ltd. v. Company Law Board [AIR 1967 SC 295 : 1966 Supp SCR 311 :
(1966) 36 Com Cas 639] , this Court said in respect of sub-delegation:
“Bearing in mind that the maxim delegatus non potestdelegare
sets out what is merely a rule of construction, sub-delegation can be
sustained if permitted by express provision or by necessary implication.”
7. Again in MangulalChunilal v. ManilalMaganlal [AIR 1968 SC 822
: (1968) 2 SCR 401 : 1968 Cri LJ 979] , while considering the scope of
Section 481(1)(a) of the Bombay Provincial Municipal Corporation Act
(59 of 1949) this Court said that Commissioner of the Ahmedabad
Municipal Corporation had delegated his power and function under the
aforesaid section to a Municipal Officer to launch proceedings against a
person charged with offences under the Act or the rules and that officer
46
to whom such functions were delegated could not further delegate the
same to another.
8. In Halsbury’s Laws of England, 4th Edn., Vol. I, in respect of
sub-delegation of powers it has been said:
“In accordance with the maxim delegatus non potest delegare, a
statutory power must be exercised only by the body or officer in
whom it has been confided, (H. Lavender & Son Ltd. v. Minister of
Housing and Local Government [(1970) 3 All ER 871 : (1970) 1 WLR
1231] ) unless sub-delegation of the power is authorised by express
words or necessary implication (Customs and Excise Comrs. v. Cure
and Deeley Ltd. [(1962) 1 QB 340 : (1961) 3 All ER 641 : (1961) 3
WLR 798] and Mungoni v. Attorney General of Northern
Rhodesia [(1960) 1 All ER 446 : (1960) 2 WLR 389 : 1960 AC 336,
PC] ). There is a strong presumption against construing a
grant of legislative, judicial, or disciplinary power as impliedly
authorising sub-delegation; and the same may be said of any
power to the exercise of which the designated body should
address its own mind. Allam & Co. v. Europa Poster Services
Ltd. [(1968) 1 All ER 826: (1968) 1 WLR 638] …”
(emphasis supplied by this Court)
52. From a reading of the above, it can be deduced
that there is a strong presumption against “construing a
glance of legislative, judicial or disciplinary power, as
impliedly authorizing sub-delegation”.
53. The distinction between the sub-delegation and
ministerial exercise of power has been dealt with by the
Hon’ble Apex Court in the case of Sidhartha Sarawgi vs.
Board of Trustees for the Port of Kolkata & others,
reported in (2014) 16SCC 248. Paragraph Nos.4,9 &10
read as under:
“4. There is a subtle distinction between delegation of
legislative powers and delegation of non-legislative/administrative
powers. As far as delegation of power to legislate is concerned, the
law is well settled: the said power cannot be sub-delegated. The
legislature cannot delegate essential legislative functions which
consist in the determination or choosing of the legislative policy and
formally enacting that policy into a binding rule of conduct
[HarishankarBagla v. State of M.P., AIR 1954 SC 465 at p.
468, para 9; Agricultural Market Committee v. Shalimar
Chemical Works Ltd., (1997) 5 SCC 516 at p. 524, para 24].
Subordinate legislation which is generally in the realm of rules and
regulations dealing with the procedure on implementation of plenary
legislation is generally a task entrusted to a specified authority. Since
the legislature need not spend its time for working out the details on
implementation of the law, it has thought it fit to entrust the said
47task to an agency. That agency cannot entrust such task to its
subordinates; it would be a breach of the confidence reposed
on the delegate.
9. The Constitution confers power and imposes duty on the
legislature to make laws and the said functions cannot be delegated
by the legislature to the executive. The legislature is constitutionally
required to keep in its own hands the essential legislative functions
which consist of the determination of legislative policy and its
formulation as a binding rule of conduct. After the performance of
the essential legislative function by the legislature and laying the
guiding policy, the legislature may delegate to the executive or
administrative authority, any ancillary or subordinate powers that are
necessary for giving effect to the policy and purposes of the
enactment. In construing the scope and extent of delegated power,
the difference between the essential and non-essential functions of
the delegate should also be borne in mind. While there cannot be
sub-delegation of any essential functions, in order to achieve the
intended object of the delegation, the non-essential functions can be
sub-delegated to be performed under the authority and supervision
of the delegate.
10. Sometimes, in the plenary legislation itself, the lawmakers
may provide for such sub-delegation. That is what we see under
Sections 21 and 34 of the Major Port Trusts Act, 1963, which we
shall be discussing in more detail at a later part of this judgment.”
From a reading of the above it is crystal clear that
legislative function cannot be delegated and the mandate of
the Constitution is that legislative function which consists of
determination of legislative policy and its formulations as a
binding rule of conduct and what may be delegated is any
ancillary or subordinate powers that are necessary for giving
effect to the policy. In and under the Act, it is discernible that
“specifying an area” is a matter of policy and determination of
the policy cannot be sub-delegated.
54. As observed earlier, the efficacy of the laws under
challenge is to be also appreciated in the background of U.P.
Rules of Business, 1975 and the Business of Uttaranchal
(Allocation) Rules, 2003. The U.P. Rules of Business, 1975
have been made in exercise of power conferred under clauses
48
(2) and (3) of Article 166 of the Constitution of India and hold
the field as on today.
Rule 3 reads as under:-
“3. Disposal of Business- Subject to the provisions of these
Rules in regard to consultation with other departments and
submission of cases to the Chief Minister, the Cabinet and the
Governor, all business allotted, to a department under the Business
of U.P. (Allocation) Rules, 1975, shall be disposed of by or under the
general or special direction of the Minister-in-charge.”
Rule 4 relating to inter-departmental consultations
reads as under:-
“4. Inter-departmental Consultations- (1) When the subject of
a case concerns more than one department, no order shall be issued
until all such departments have concurred, or, failing such
concurrence, a decision thereon has been taken by or under the
authority of the Cabinet.
Explanation- Every case in which a decision, if taken in one
department, is likely to affect the transaction of business allotted to
another department, shall be deemed to be a case the subject of
which concerns more than one department.
(2) Unless the case is fully covered by powers to sanction
expenditure or to appropriate or re-appropriate funds, conferred by
any general of special orders made by the Finance Department, no
department shall, without the previous concurrence of the Finance
Department, issue any orders which may-
(a) involve any abandonment or revenue or involve any
expenditure for which no provision has been made in the
Appropriation Act;
(b) involve any grant of land or assignment of revenue
or concession, grant, lease or licence of mineral or forest rights
or a right to water power or any easement or privilege in
respect of such concession;
(c) relate to the number or grade of posts, or to the
strength of a service, or to the pay or allowances of
government servants or to any other condition of their service
having financial implications; or
(d) otherwise have a financial bearing whether involving
expenditure or not:
Provided that no orders of the nature specified in clause (c)
shall be issued in respect of the Finance Department without the
previous concurrence of the Department of Personnel.
(3) The Law Department shall be consulted on:-
(a) proposals for legislation;
(b) the making of rules and orders of a general character in the
exercise of a statutory power conferred on the Government; and
49
(c) the preparation of contracts and assurances to be entered
into by the Government.
(4) Unless the case is fully covered by a decision or advise
previously given by the Department of Personnel that Department
shall be consulted on all matters involving-
(a) the determination of the methods of recruitment and
conditions of service of general application to government servants in
civil employment, and
(b) the interpretation of the existing orders of general
application relating to such recruitment or conditions of service.
(5) Notwithstanding anything contained in sub-rules (1), (2)
and (4), the Department in-charge of a case may, while consulting
any Department other than the Law Department and Finance
Department, as required under these rules, set a time-limit, which
shall ordinarily not be less than two weeks, and if the comments of
the Department consulted are not received within that time-limit, the
Department in-charge of the case may presume that the Department
consulted has no comments to offer or no views to express. It may
thereupon recall its file from the Department consulted and take its
own decision accordingly, except where these rules require the
concurrence of the Department consulted.
(6) For the removal of doubts, it is hereby declared that the
mere fact that the advice of any other Department is sought should
not mean that its consent is necessary, and the Department seeking
advice may take its own decision according to these rules while
differing from the Department consulted.”
55. In the instant case, the note provided by the State
regarding date-wise details of the promulgation proceedings
of the Uttarakhand Excise Policy Rules for the year 2025-26,
2026-27 and 2027-28. The note details that the file was
forwarded to the Finance Department, thereby the State has
acknowledged that the requirement of inter-departmental
consultations, and the note of the Finance Department dated
27.02.2025 has recommended that guidance/ approval of the
Hon’ble Cabinet be obtained. The note does not detail the
concurrence of the Finance Department and sub-rule (2) of
Rule 4 reads as under:-
“…….
(2) Unless the case is fully covered by powers to sanction
expenditure or to appropriate or re-appropriate funds, conferred by
any general of special orders made by the Finance Department, no
department shall, without the previous concurrence of the Finance
Department, issue any orders which may-
50
(a) involve any abandonment or revenue or involve any
expenditure for which no provision has been made in the
Appropriation Act;
(b) involve any grant of land or assignment of revenue
or concession, grant, lease or licence of mineral or forest rights
or a right to water power or any easement or privilege in
respect of such concession;
(c) relate to the number or grade of posts, or to the
strength of a service, or to the pay or allowances of
government servants or to any other condition of their service
having financial implications; or
(d) otherwise have a financial bearing whether involving
expenditure or not:
Provided that no orders of the nature specified in clause
(c) shall be issued in respect of the Finance Department
without the previous concurrence of the Department of
Personnel.”
56. In terms of sub-rule (3), the file has also been
forwarded to the Law Department, and the Law Department,
after providing its consultation, is said to have returned the
file. Neither the note, nor the consultation of the Law
Department is placed before the Court. That apart, Rule 7
mandates that all items specified in First Schedule shall be
placed before the Cabinet. Items 19, 27 and 30 read as
under:-
“19. Proposal involving any important change of policy or
practice.
27. Cases involving financial implications on which the Finance
Minister desires a decision of the Cabinet.
30. Proposals to vary or reverse a decision previously taken by
the Cabinet.”
57. In consonance with the Business of Uttaranchal
(Allocation) Rules, 2003, the Department of Excise is held by
the Chief Minister. It is pertinent to note at this juncture that
the House was in session between 18.02.2025 and
22.02.2025, but the Rules have not been placed before the
House. On this being pointed out the Ld Advocate General,
51
made a vain attempt to pass it off as an ordinance, and
placing it before the House was not imperative.
58. One of the primary objections raised by the learned
Advocate General is that various argument regarding vires
and the legality of the Rules promulgated are not supported
by the pleadings and hence, cannot be considered as the
same would tantamount to the Court making out a case on
behalf of the petitioners. The next limb of argument is that no
relief beyond the relief claimed can be granted.
59. The reliance on BALCO‘s case (supra), in the
opinion of this court, is wholly misplaced. The law regarding
moulding of the prayer is well settled by the Hon’ble Apex
Court. That apart the challenge is to the ambiguous phrase
“adjoining areas” only. The policy having not afforded any
pre-decisional hearing and the policy, in the facts and
circumstances of the case on hand, having been sought to be
utilized against the petitioners, and select few, the relief
sought for, is in respect of only a phrase of the policy, which
in the opinion of the petitioners, is being deliberately and
discriminatorily used to target a few by taking advantage of
the ambiguity in the provision.
60. That apart, the specific case of the petitioners is
that the executive/ administrative action is unguided and
unbridled, in the absence of definition of the phrase
52
“adjoining area”, as incorporated in Rule 17b. It is pertinent
to note at this stage that the phrase “adjoining area” came to
be clarified by an administrative order, after the
commencement of arguments of the instant writ petitions,
and the said order has been issued by the Excise
Commissioner on 25.04.2025.
61. That apart, the facts and circumstances of the
BALCO‘s case (supra) are wholly at variance with the facts
and circumstances of the instant case and the facts of the
instant case are more appropriately covered by the law laid
down by the Constitutional Bench of the Hon’ble Apex Court
in Khoday Distilleries case (supra), which holds the field
even as on today. Similarly, reliance in the case of Lalit
Kumar Jain (supra), in our respectful consideration, is
inapplicable to the case on hand. It is not the case that partial
prohibition in a particular area has been promulgated with the
intention of extending the policy of prohibition, but the stated
grounds on which the prohibition has been imposed, is that
the area within the limits of Haridwar & Rishikesh has a
special religious significance and sale of liquor hurts the
sentiments of the local population. If the prohibition was in
furtherance of the policy of prohibition, the case of the State
would have been on a different pedestal. The case of the
petitioners is that the petitioners are being selectively
targeted by taking advantage of the ambiguous phrase
53
“adjoining area”, and which “adjoining area” later came to be
clarified by the order of the Excise Commissioner as meaning
2 Km. radius.
62. The contention that the said Government Order
issued by the Excise Commissioner is without jurisdiction or
without competence, is not without substance. The area of
legislation by the Excise Commissioner, as noted supra, has
been delegated under Section 41, and in fact, a bar is placed
on the State Government in delegating its rule making power
under Section 40 by way of a negative covenant under
Section 10(2)(f), as reproduced supra. The clause though
empowers the State to delegate to the Excise Commissioner,
all or any of its powers under this Act, it excepts the rule
making power under Section 40 from being delegated. The
rigor of the enactment is amplified by this very provision
which clearly negates any arguments that it is a matter for
the executive and a mere ministerial act. The argument must
fly in the face of bar under Section 10(2)(f), which clearly
excepts the power under Section 40 being delegated by the
State Government to the Excise Commissioner. In the light of
the above bar, the maxim of delegatus non potest delegare
gets applicable. We have already extracted the relevant
portion of the ruling of the Hon’ble Apex Court in this regard.
54
63. That apart, we find that there is no compliance with
the provision of 23-A of the U.P. General Clauses Act, 1904.
Section 77 of the United Provinces Excise Act, 1910 mandates
that all rules made and notifications issued under the Act
shall be published in the official gazette and shall have effect
as if enacted in this Act from the date of such publication. If
Section 77 is read in conjunction with Section 23-A, it
becomes apparent that the mandate of the provision has
been violated in more ways than one.
64. The sequence of dates and events when
appreciated, it is apparent that the authority empowered to
make rules has not placed the proposed rules for the
consideration of the house.
65. That apart, the mandate of Section 23-A also
stands violated. It is the mandate of Section 23-A that the
rules be placed before the House of the State Legislature for
a period of thirty days. The efficacy and mandatory nature of
such a provision has been succinctly dealt with by the Hon’ble
Apex Court in the case of M.K. Papiah, reported in (1975) 1
SCC 492 (Para 14). It is not in dispute that the State
Legislature is a unicameral Legislature and the house was in
session between 18.02.2025 and 22.02.2025. The Hon’ble
Supreme Court has held that the requirement of placing the
Rules before the House, constitutes a inherent, check &
55
balance. Despite the same, the rules have not been placed
before the House.
66. Apart from the above discussion, the law that holds
the field with regard to grant of licenses, is the law settled by
the Constitutional Bench of the Hon’ble Apex Court in
Khoday Distilleries case (supra), more particularly,
Paragraph No.60(g), which clearly states that the State action
can neither be discriminatory, nor arbitrary, once the State
permits trade or business in potable liquor with or without
limitation, the citizen has the right to carry on trade or
business subject to the limitations, if any, and the State
cannot make discrimination between the citizens who are
qualified to carry on the trade or business.
67. In the case on hand, the phrase “adjoining area” is
not only vitiated by ambiguity, but has become an enabling
tool for selective application of the same. The very fact that
the Government Orders were issued refusing bar licenses
after the commencement of arguments, and that the
adjoining area came to be clarified as a 2Km radius after the
commencement of arguments, are matters which this Court
cannot close its eyes to.
68. The notifications notifying or clarifying the
“adjoining area” is per se without competence. The
jurisdiction to determine an area over which prohibition is to
56
be imposed, is vested in the State, and the said power is
traceable to Section 40(2)(e) read with Section 37-A(2).The
ambit of the Excise Commissioner as a legislative function, as
detailed supra, is traceable to Section 41 alone, as no
notification delegating any other power in the Excise
Commissioner has been placed before this Court to
demonstrate the lawful delegation in terms of Section
10(2)(f). The use of the specified by prefixing it before the
word area, amplifies the intention of the Legislature to enable
the State to prohibit sale in an “identifiable locality”. The
word ‘specified’ is an adjective of the word “specify” which is
defined as “identify clearly and definitely. That apart in the
light of the bar u/s 10(2)(f) the notification issued by the
Excise Commissioner was without competence. Even the said
GO does not specify any locality that is identified clearly and
definitely.
69. In view of our above discussions, we are of the
considered opinion that the provisions of Rule 17b to the
extent enabling the State to impose prohibition in “adjoining
areas” is liable to be held bad in law.
(i) The rule making power of the State to impose
prohibition, being in respect of “specified area”, the
phrase “adjoining area” not being a specified area,
as required under sub-section (2) of Section 40,
57
the same requires to be declared as ultra vires, and
is accordingly, declared as ultra vires sub-section
(2) of Section 40 r/w sub-sections (2) and (3) of
Section 37-A.
(ii) The Government Order dated 25.04.2025 is being
in the teeth clause (f) of sub-section (2) of Section
10 which vests the power to legislate in the
exclusive domain of the State Government, the
same are declared to be without competence and
beyond the power of the Excise Commissioner,
conferred upon him under Section 41 and beyond
the legislative competence of the Excise
Commissioner.
70. Accordingly, the writ petitions are allowed. The
offending phrase / words of Rule 17b, i.e. “adjoining areas”
is, hereby, quashed. Rule 17b shall be read down and be
read without the phrase “adjoining areas”.
71. The State Government shall process the
applications of the petitioners and other eligible persons in
terms of the law laid down by the Constitutional Bench of the
Hon’ble Apex Court in Paragraph 60 (g) in the case of
Khoday Distilleries (supra) within an outer limit of four
weeks from the date of receipt of this judgment.
58
72. There shall be no order as to costs.
73. Pending application, if any, also stands disposed of.
(G. NARENDAR, C.J.)
(ALOK MAHRA, J.)
Dated: 03rd July, 2025
NISHANT
NISHANT Digitally signed by NISHANT KUMAR
DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND,
2.5.4.20=ad3fcb5ca64340f5dd0a4c574afa0fd63133605ca57cdc00ec2b7462b452b3
26, postalCode=263001, st=UTTARAKHAND,
KUMAR
serialNumber=7E81318F3B1BE7EAAC9370185F7C9C20892BC63A055CFD19616905
60487E670C, cn=NISHANT KUMAR
Date: 2025.07.14 11:20:38 +05’30’