Licensing Authority Must Examine Local Needs & Public Interest Before Granting FL-2 Licence: Madras High Court Quashes Liquor Permit in Jallikattu Area

Significantly, the Court observed that although consumption of liquor may be an individual and personal choice, establishment of liquor-serving premises cannot be permitted in a manner that disrupts community life or causes nuisance to residents. Licensing authorities are therefore obligated to balance individual choice with societal interests and local conditions.

Justice N. Sathish Kumar and Justice M. Jothiraman allowing the writ petitions, observed, “It is to be noted that consumption of liquor is an individual choice of a person. However, such liquor shops causing nuisance or posing threat to the residents of that locality must be looked into. There is no specific clause / objective in the by-laws approved by the Registrar for selling of liquor by obtaining FL2 licence from the Prohibition and Excise Department. In the absence of any such clause in the by-laws, which are to be approved under the Tamil Nadu Societies Registration Act, 1975, selling of liquor in the Recreation Clubs cannot be permitted and it is a violation of the by-laws of the Societies”.

While referring to Tamil Nadu State Marketing Corporation Ltd., v. R.M. Shah and others 2010 (2) CWC 337 and Article 21 of the Constitution of India, the Bench further noted, “…we are of the view that the licensing authority has failed to consider the following aspects:- i)the local needs justify the grant of license, ii)the public interest shall not suffer by the grant of license applied, iii)the resolution passed by the village panchayat and union panchayat and iv)the conditions enumerated under Rule 19 of the Tamil Nadu Liquor (License and Permit) Rules. Thus, the impugned license has been issued without considering the conditions and procedures stipulated under 19 of the Rules and the same is liable to be set aside”.

Advocate M. Mohaboob Athif appeared for the petitioner and T. Lajapathi Roy, Senior Counsel appeared for the respondent.

The writ petitions challenged the licence issued by the Prohibition and Excise Department permitting operation of a liquor-serving recreation club. The petitioners contended that the area was culturally sensitive and predominantly residential, and that the licence had been granted without proper enquiry into the impact on local residents and public peace.

The Bench noted that resolutions passed by the Village Panchayat and Union Panchayat opposing the licence were not meaningfully considered.

The Bench observed, “It is also to be noted that Alanganallur Union consisting of 36 villages, wherein there is no liquor shop is functioning and the village panchayat passed resolution on 05.11.2024 and 11.10.2025 objecting the opening of TASMAC and private liquor shop. However, without considering the same, FL2 license was granted. The official respondents failed to consider that the 8th respondent club had earlier functioned as NDR Vaigai Sports Recreation Helping Club and had changed its name as Pons recreation club, Thandalai, only in the year 2025 and as such, it is not possible for it to comply with the condition stipulated in 19(2) of the Rules. As per the said Rules it should be functioning for more than three years. In the instant case, the club had earlier been functioning somewhere else and wanted to shift now at the present place would not satisfy the above condition. The District Superintendent of Police, Madurai District issued no objection certificate without application of mind…”.

“…The impugned license had granted without considering 19B(1) of the Rules which stipulates that a general enquiry should be conducted with regard to the two aspects, ie., local needs and public interest shall not suffer. In the instant case, there is no public need as the village had restriction with regard to establishing liquor shop in its union. On the other hand the public interest was not at all considered. The Hon'ble Division Bench of this Court in WP.(MD)No.8038 of 2019 etc., batch dated 18.08.2025 had held that clause regarding number of members should be incorporated in the by-laws. In the instant case, the said exercise had not been made by the club”, the Bench further noted.

Placing reliance on the Division Bench decision in M.A. Sudhagar v. State of Tamil Nadu rep.by its Principal Secretary and others 2014 (4) CTC 721, the Court emphasised that licensing authorities are required to conduct a due enquiry and record satisfaction regarding statutory prerequisites before granting an FL-2 licence. Mechanical issuance of licences without such scrutiny, the Court observed, defeats the regulatory framework governing liquor establishments.

On the Village Panchayat and the Grama Sabha, constitutional bodies which are recognised under Part IX of the Constitution of India under Articles 243A, 243G, and the Eleventh Schedule through the 73rd Constitutional Amendment Act of 1992, the Bench further noted, “…The resolution passed by the Grama Sabha or the Village Panchayat, reflects the public needs that the Panchayat is duty to protect, particularly with respect to public health, morality, and welfare of the community. Further, the Tamil Nadu Panchayats Act, 1994, provides for the conduct of Grama Sabha meetings and enables Village Panchayats to pass resolutions reflecting the needs, priorities, and collective will of the local community”.

Cause Title: T. Sathiskumar v. The State Government of Tamilnadu & Ors. WP.(MD)Nos.31562 & 31655 of 2025

Appearances:

Petitioner: M. Mohaboob Athif, T. Palanichamy, Advocates.

Respondents: P. T. Thiraviam, Government Advocate, H. Arumugam, K. Sanjai Ghandhi, Government Advocate, T. Lajapathi Roy, Senior Counsel, M/S.Roy and Roy Associates, Advocates.

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