This judgment does not grant the appellants regular licences or decide fresh licence applications: applications under Rule 9(1)-F remain to be filed and decided within three months, and the 27 December 2019 notifications are kept in abeyance only for these appellants and only until the balance licence period ends. It also does not record any finding on the consequential punishment or contempt proceedings raised in the appeals beyond disposing of the appeals themselves.
- Case
- Barun Malakar and Others v. State of West Bengal and Others
- Court
- High Court at Calcutta
- Decision
- Bench
- Arijit Banerjee; Apurba Sinha Ray
- Judgment by
- Apurba Sinha Ray
- Case numbers
- MAT 812 of 2024; MAT 847 of 2022; MAT 418 of 2023
- Outcome
- Appeals disposed of, with relief granted in part: common judgment disposing of MAT 812 of 2024, MAT 847 of 2022 and MAT 418 of 2023; the State is directed to let the appellants run their shops from 15 December 2026 for the balance of their six-month temporary licences; Notifications 2067-F.T. and 2066-F.T. dated 27 December 2019 kept in abeyance for the appellants only; liberty to apply under Rule 9(1)-F of the 2003 Rules.
Shops shut in March 2019 may reopen from 15 December 2026
The High Court at Calcutta has directed West Bengal to let a group of liquor-shop licensees resume business from 15 December 2026 for the balance of their six-month temporary licences, to clear the stock in their shops. Justices Arijit Banerjee and Apurba Sinha Ray delivered the common judgment on 13 November 2026 in three appeals: MAT 812 of 2024 (Barun Malakar and others), MAT 847 of 2022 (Raju Ghosh) and MAT 418 of 2023 (Goutam Mondal and another).
The direction is narrow: the shops may run only for the unexpired balance of the six-month term, to sell off stock already bought. The Court also gave the appellants liberty to apply for fresh licences under Rule 9(1)-F of the West Bengal Excise (Selection of New Sites and Grant of Licence for Retail Sale of Liquor and Certain Other Intoxicants) Rules, 2003, with the authorities to decide any such application within three months of the application.
A new licence category, a six-month term, and a suspension that outlived the election
A notification dated 3 October 2018 introduced a new excise licence category under Rule 4(q), permitting sale of all liquor except tari and pachwai. The appellants were granted temporary licences under that category for six months, effective from 1 January 2019 and due to expire on 14 August 2019, having met the prescribed requirements and paid the requisite fees.
On 2 March 2019 the Excise Commissioner suspended all such shops until further orders by Order No. C-40E, citing the General Election and Election Commission instructions. The suspension came within weeks of the licences taking effect, with no breach alleged. The election ended on 23 May 2019, but the suspension continued.
On 22 August 2019 the Commissioner rescinded the suspension (Order No. 22EG), yet the appellants were still not allowed to resume: continuation would be considered on demand and supply, law and order and other factors. While that was pending, Notifications 2067-F.T. and 2066-F.T. dated 27 December 2019 omitted the Rule 4(q) category altogether.
The questions before the Division Bench
The appeals asked six questions: was the suspension authorised by Sections 26 and 42 of the Bengal Excise Act, 1909? Did the election-closure rules permit suspension beyond the period in the 1995 Election Closure Rules? After rescission on 22 August 2019, were the appellants entitled to restoration for the unexpired period? Could the authorities reconsider eligibility or impose fresh conditions on licences already granted? Was there any valid basis for treating Rule 4(q) holders differently? And were the 27 September 2019 findings, as adopted on 16 April 2024, sustainable?
The third appeal, MAT 418 of 2023, added questions about the 27 December 2019 notifications: whether the category could validly be omitted under Sections 85 and 86 alone, when it had been introduced invoking Sections 30, 31, 37A, 85 and 86; whether the omission could affect licences already granted; whether they had an enforceable right to trade for the licence period; and whether discontinuing their category while others continued was arbitrary under Articles 14, 19(1)(g) and 21.
The rival cases: legitimate expectation against res extra commercium
For the appellants, senior advocate Aninda Kr. Mitra argued that the licences had been granted for a fixed period after all requirements were met, with no allegation of breach, and that the suspension was solely on account of the election. Once it was rescinded, he said, the licences ought to have been restored for the balance period rather than subjected to a fresh consideration of eligibility. He invoked legitimate expectation (State of Jharkhand v. Brahmaputra Metallics Ltd. ((2023) 10 SCC 634)) and argued that only the granting Collector, not the Excise Commissioner, could suspend under Section 42.
For the State, counsel submitted that liquor trade is res extra commercium, with no fundamental right under Article 19(1)(g) to a licence's grant, renewal or continuation. Section 37 permits a licence for a period not exceeding six months, so the licences had expired by efflux of time. Section 42 gives the licensing authority plenary power to cancel or suspend, and no promissory estoppel runs against statutory power. The State relied on Supreme Court authority including Khoday Distilleries v. State of Karnataka ((1995) 1 SCC 574) and Kerala Bar Hotels Association v. State of Kerala ((2015) 16 SCC 421).
No fundamental right, but no unexplained curtailment either
The Court accepted the State's starting point: no fundamental right to run a liquor business, which may be a privilege or a legal right. But, the Bench said, whatever its character, that privilege or legal right cannot be curtailed without showing any cogent ground. A procedure conforms to constitutional safeguards only when it is just, fair and right.
The suspension order of 2 March 2019 did not state under which provision the Excise Commissioner issued it, although Section 42 vests the power in the authority that granted the licence — here, the Collector of Nadia. A closure for a few days for public peace could be justified, but nothing explained why the licences stayed suspended long after the election ended, and the rescinding order of 22 August 2019 gave no reason for the delay either.
On efflux of time the Bench was equally direct. The licences were suspended within weeks of taking effect, the licensees had invested heavily and bought stock, and the State showed no default. The State could not say they had no right simply because six months had elapsed: that was, in the Court's words, unjust and unconscionable. The Court also held that the 27 December 2019 notifications, though they abolished the Rule 4(q) category, did not cancel licences already granted.
The directions: resume, apply afresh, and decide within three months
Finding merit in the appellants' submissions, the Bench directed the State to allow the appellants to run their businesses for the balance period stipulated in their temporary licences to clear their stock, from 15 December 2026 until the balance of the six-month term is complete.
Pending representations — particularly Goutam Mondal's — must be disposed of within three months of the judgment, and Notifications 2067-F.T. and 2066-F.T. are kept in abeyance until the balance licence period ends, but only for these appellants. The appeals stand disposed of, with no order as to costs.
BANTHRY ANALYSISFor law students
This judgment shows how far the State's power over liquor licensing extends — and where it stops. Trade in liquor is res extra commercium, so there is no fundamental right under Article 19(1)(g) to a licence — but that is not the absence of all rights. Once the State grants a licence, the licensee holds a privilege or legal right, and curtailing it demands a cogent, recorded reason. That is the Article 14 discipline applied to a privilege: the procedure must be just, fair and right.
Second, the two reason-giving failures: the suspension order cited no provision and came from the Excise Commissioner, although Section 42 vests the power in the granting authority, the Collector; and the rescinding order gave no reason for keeping the suspension alive months after the election. A court cannot supply reasons the authority never recorded.
Third, legitimate expectation plays its limited role. Following Brahmaputra Metallics, the licensees' expectation — having invested on the faith of a six-month licence — is not a free-standing right, but a consideration whose denial without reasons makes the State's action arbitrary. The remedy matches: only the balance of the term is restored, the notifications are held in abeyance only for these appellants, and fresh applications are left to be decided on their merits.
READING PROMPTSQuestions for a closer reading
- Why did the Division Bench hold that the State could not rely on efflux of time to deny the appellants the balance of their licence term, even though the licences were granted for only six months?
- Under Section 42 of the Bengal Excise Act, 1909, who had the power to suspend the appellants' licences, and why did the identity of the suspending authority matter here?
- What is the difference between the Court's finding that the appellants have no fundamental right to trade in liquor and its finding that their privilege or legal right could not be curtailed without cogent reasons?
