MANU/SC/0815/1994
Equivalent/Neutral Citation: 1992(60)ELT674(S.C .), 1994 INSC 289, JT1994(4)SC 655, 1995-1-LW21, (1995)2MLJ2(SC ), 1994(3)SC ALE575,
(1994)5SC C 509, [1994]Supp2SC R281
IN THE SUPREME COURT OF INDIA
Civil Appeal No. 4981 of 1994
Decided On: 27.07.1994
Madras City Wine Merchants' Association and Ors. Vs. State of T.N. and Ors.
Hon'ble Judges/Coram:
S. Mohan and M.K. Mukherjee, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: K. Parasaran and R.K. Garg, Anand Sasidharan, P.N.
Ramalingam, V. Balaji, A.T.M. Sampath, Advs. Umapathy, K. Swami, Pragati, Advs. in
C.-03-05. No. 4982/94 and K.K. Mani, Adv. in W.P. Nos. 648/93
For Respondents/Defendant: V.R. Reddy, Additional Solicitor General, G.L. Sanghi and
P.R. Seetharaman, Advs.
Case Note:
Commercial - Integral Scheme - Government issued G.O. Ms, in order to
facilitate Government to evolved fresh scheme of upset price for auctioning of
liquor retail vending shops in State - However, High Court dismissed
Appellants appeal challenging G.O. and held that policy of Government was
one step marched towards total prohibition, thus Appellants could not base
their case on legitimate expectation, nor was their any violation of Article 14
- Hence, this Appeal - Whether, Tamil Nadu Liquor (Retail Vending) Rules,
1989 and Tamil Nadu Liquor Retail Vending in Bar Rules, 1992 form an
integral scheme - Held, privilege of retail vending could only be under licence
and such a licence was obtained after a successful bid - There was no
automatic renewal because of power contained under Rule 14(3) enabling
Licensing Authority to refuse - However, Bar Rules under Rule 4(a) laid down
a qualification that only a person holding a vending licence could sought a Bar
licence - These were two sets of separate Rules, one dealt with retail vending
of IMFS and other with Bar - Merely, because to obtained Bar licence, one
must be a holder of retail vending licence, they could not become integrated
scheme - Therefore, it was incorrect that both these Rules form an integrated
scheme - Appeal dismissed.
Constitution - Legitimate Expectation - Whether, Appellants could claim
benefit of doctrine of legitimate expectation - Held, legitimate expectation
might arose, if there was an express promise given by a public authority -
Existence of a regular practice which claimant could reasonably expect to
continue and such an expectation must be reasonable - However, if there was
a change in policy or in public interest position was altered by a rule or
legislation, no question of legitimate expectation would arise - Moreover,
licence under Bar Rules of 1992 was for a period of one year and that could be
renewed, only on a privilege amount fixed by State Government - Therefore,
position was entirely different giving no room for any expectation - Thus, this
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receiving the benefit or privilege, and, if so, the courts will protect his
expectation by judicial review as a matter of public law. This subject has been
fully explained by Lord Diplock in O'Reilly v. Mackman [1982] 3 All ER 1124 :
(1983) 2 AC 237 and I need not repeat what he has so recently said.
Legitimate, or reasonable, expectation may arise either from an express
promise given on behalf of a public authority or from the existence of a regular
practice which the claimant can reasonably expect to continue. Examples of the
former type of expectation are Re Liverpool Taxi Owners' Association [1972] 2
All ER 589, (1972) 2 QB 299 and A-G of Hong Kong v. Ng Yuen Shiu [1983] 2
All ER 346 : (1983) 2 AC 629. (I agree with Lord Diplock's view, expressed in
the speech in this appeal, that 'legitimate' is to be preferred to 'reasonable' in
this context. I was responsible for using the word 'reasonable' for the reason
explained in Ng Yuen Shiu, but it was intended only to be exegetical of
'legitimate'.) An example of the latter in R v. Hull Prison Board of Visitors ex p.
St. German [1979] 1 All ER 701 : [1979] OB 425, approved by this House in
O'Reilly v. Mackman [1982] 3 All ER 1124 at 1126 : [1983] 2 AC 237 at 274.
52. In Halsbury's Laws of England Vol. 1(1) Fourth Edition Para 81 at pages 151-52 it
is stated thus:
81 Legitimate expectations. A person may have a legitimate expectation of
being treated in a certain way by an administrative authority even though he
has no legal right in private law to receive such treatment.
O'Reilly v. Mackman [1983] 2 AC 237 at 275 HL; AG of Hong Kong v. Ng Yuen
Shiu [1983] 2 AC 629 : [1983] 2 All ER 346 PC; Council of Civil Service Unions
v. Minister for the Civil Service [1985] AC 374 : [1984] 3 All ER 935 H.L. The
expectation must plainly be a reasonable one: AG of Hong Kong v. Ng Yuen
Shiu supra. It seems that a person's own conduct may deprive any expectations
he may have of the necessary quality of legitimacy : Cinnamon v. British
Airports Authority [1980] 2 All ER 368 : [1980] 1 WLR 582 CA.
The expectation may arise either from a representation or promise made by the
authority,
R v. Liverpool Corporation. ex p. Liverpool Taxi Fleet Operator's Association
[1972] 2 QB 299 : [1972] 2 All ER 589 CA; AG of Hong Kong v. Ng Yuen Shiu
[1983] 2 AC 629 : [1983] 2 All ER 346 PC; Council of Civil Service Unions v.
Minister for the Civil Service [1985] AC 374 : [1984] 3 All ER 935 HL; R. v.
Home Secretary ex P. Oloniluyi [1988] Times 26 November CA; R. v. Brent
London Borough Council ex P. Macdonagh [1989] Times 22 March. Although
there is an obvious analogy between the doctrines of legitimate expectation and
of estoppel, the two are distinct, and detrimental reliance upon the
representation is not a necessary ingredient of a legitimate expectation; see R.
v. Secretary of State for the Home Department ex p Khan [1985] All ER 40 at
48, 52 : [1984] 1 WLR 1337 at 1347 1352 CA; and see para 23 ante. In relation
to Inland Revenue extra-statutory concessions and assurances, see R. v. AG ex
p ICI plc [1986] 60 TC I R v. HM Inspector of Taxes Hull ex p. Brunfield [1988]
Times 25 November; and R v. IRC ex p. MFK Underwriting Agencies Ltd. [1989]
Times 17 July; of Re Preston [1985] AC 835 : [1984] 2 All ER 327 HL.
including an implied representation,
R. v. Secretary of State for the Home Department, ex p. Khan [1985] 1 All ER
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necessary implication exclude the operation of Section 8. Reading Sections 4
and 8 together , there can be no doubt that an enactment which repeals an
earlier enactment can exclude any of the provisions of Chapter II of the Tamil
Nadu General Clauses Act. The impugned GO. has rescinded the Tamil Nadu
Liquor (Retail Vending in Bar) Rules 1992 with effect on and from 1st June,
1993. Hence the repealed rules ceased to be in existence after 31. 5.1993. The
privilege and the licence granted to the petitioner were admittedly for one year
ending with 31.5.1993. Under the repealed rules they were obliged to apply for
renewal and the renewal was not automatic. The application for renewal had to
be considered under the rules by the concerned authority and appropriate
orders should be passed. Once the rules are repealed, with the expiry of
31.5.92, there could be no question of considering any application for renewal
for a period subsequent to that date. What all Section 8 of the Tamil Nadu
General Clauses Act preserves or protects are the rights acquired under the
repealed Act. In other words, the petitioners licence for the period upto
31.5.1993 remained undisturbed or unaffected by the impugned G.O. It is not
as if the same right or privilege can operate beyond 31.5.1993 as though by an
order of renewal. If the right or privileges cannot on its own force is subsist
when the impugned G.O. comes into force the provisions of Section 8 of the
Tamil Nadu General Clauses Act cannot give a fresh lease of life to such right or
privilege or alter the period of its validity. Hence, the contention based on the
provisions of the General Clauses Act has to fail.
76. We are in entire agreement with this line of reasoning.
77. In this connection, the reliance placed by the learned Additional Solicitor General
on Indira Sohanlal v. Custodian of Evacuee Property, Delhi MANU/SC/0063/1955 :
[1955]2SCR1117 is fully justified. At page 1118 it is stated thus:
(iv) that the scheme underlying Section 58(3) is that every matter to which the
new Act applies has to be treated as arising, and to and to be dealt with, under
the new law except in so far as certain consequences have already ensued or
acts have been completed prior to the new act, to which it is the old law that
will apply.
7 8 . If, therefore, as pointed out above, no right or privilege could operate beyond
31.5.1993, the benefit of Section 8 of the Tamil Nadu General Clauses Act cannot be
had before we leave the case one post-scriptum:
Intoxicating drinks have produced evils more deadly, because more continuous,
than all those caused to mankind by the great historic scourges of war, famine,
and pestilence combined.
William Gladstone.
79. In view of the foregoing discussion the appeals and writ petition deserve to be
dismissed. Accordingly they are dismissed. However, in the circumstances of the case,
there shall be no order as to costs.
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