Srinagar, 6 June 2025 —
The High Court of Jammu & Kashmir and Ladakh has ruled that the business of liquor does not enjoy the protection of fundamental rights under Article 19(1)(g) of the Constitution of India. A Division Bench comprising Justice Sanjay Parihar and Justice Sanjeev Kumar held that liquor is res extra commercium—an article outside the realm of commerce—and that the trade in liquor is not a fundamental right but a regulated privilege.
COURT: NO FUNDAMENTAL RIGHT TO TRADE IN LIQUOR
The Court observed:
“Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium, being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited.”
CITING CONSTITUTIONAL MANDATES
The Bench referred to Article 47 of the Constitution, which directs the State to bring about prohibition of intoxicating drinks, stating:
“Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes.”
CASE BACKGROUND: LICENSE FEE HIKE FOR LIQUOR BAR CHALLENGED
The case titled Chief Executive Officer & Anr. v. M/s Highlander Bar and Restaurant & Ors. (LPA No. 163/2023) involved an appeal by the Chief Executive Officer of the Cantonment Board, Srinagar, against a judgment by a Single Judge that had quashed the Board’s decision to hike the annual license fee for a liquor bar from ₹30,000 to ₹5,00,000, with a 30% annual increment thereafter.
The restaurant owner (Respondent No. 1) contended that the fee hike was exorbitant, arbitrary, and violative of Section 277(4) of the Cantonment Act, 2006, and Article 14 of the Constitution.
The Single Judge had ruled in favor of the bar owner, holding the license fee discriminatory and excessive, and directed the Board to set a “reasonable license fee” in line with municipal rates in other States/UTs.
HIGH COURT REVERSES SINGLE JUDGE’S RULING
The Division Bench reversed the ruling, finding the comparison with other businesses such as hotels and restaurants legally flawed. The Court stated:
“The respondent cannot, as a matter of right, seek reduction of license fee because what he was dealing with was not a fundamental right to have a particular profession or occupation rather was bound by the contractual obligations. The board being the appropriate authority to issue license for running bar within its precincts cannot be, as a matter of right, be asked to fix a particular sum of fee that too to the liking of the respondent No. 1.”
COURT UPHOLDS BOARD’S AUTHORITY AND FEE STRUCTURE
Rejecting the claim that the fee lacked quid pro quo, the Court explained:
“The respondents fairly have conceded that board has the authority to charge a reasonable sum of fee for awarding such license. As already discussed above the business of selling wine within the precincts of Cantonment Board could only be undertaken on the strength of license and though there is no quid pro quo, however, the board cannot be stated to have been divested of its power to charge reasonable sum of fee.”
On the claim of discrimination, the Court emphasized:
“Learned writ court appears to have got swayed with the fact that since other business/occupations such as essential eatable businesses, hotel and restaurants are being charged less license fees as compared to bar for sale of liquor, it, therefore, proceeded to observe that the same is exorbitant and violative of Article 14. The said view of the learned writ court is erroneous in law because the business of sale of wine cannot be treated at par with other categories of business of eatables.”
FINAL VERDICT: LICENSE FEE HIKE NOT ARBITRARY
The Court concluded:
“The trade license fee prescribed by the board can neither be said to be exorbitant, irrational nor arbitrary, rather there appears to be no discrimination because the category of business undertaken by the respondent No. 1 stands on a different yardstick and the board having regard to the mandate of Cantonment Act and its objectives had all the power to generate its revenue for effective administration of the cantonment area.”
Accordingly, the appeal was allowed, and the judgment of the learned Single Judge was set aside.
LEGAL REPRESENTATION:
For the Appellants: Advocate Muzaffar A. Dar
For the Respondents: Deputy Solicitor General T.M. Shamsi, Advocates Nazima, Arun Dev Singh
