A) ABSTRACT / HEADNOTE
The landmark case of Cooverjee B. Bharucha v. The Excise Commissioner and the Chief Commissioner, Ajmer, and Others (1954 SCR 873) forms a seminal pronouncement on the scope and nature of reasonable restrictions under Article 19(6) of the Constitution of India, particularly in the context of the liquor trade. The Supreme Court meticulously analyzed whether the Excise Regulation I of 1915 and the licensing system through public auction violated the fundamental right to carry on any occupation, trade or business under Article 19(1)(g). The petitioner challenged the auction procedures and the state monopoly over liquor licenses as unconstitutional. However, the court upheld the validity of the regulation, emphasizing the State’s power to impose restrictions on trade involving intoxicating substances due to their inherent public harm. The judgment also clarified the distinction between a license fee and a tax, recognizing the licensing system as a revenue-raising mechanism backed by statutory authority. The court’s opinion rested on international legal precedents and Indian jurisprudence, establishing the government’s discretionary control over morally hazardous trades. This ruling continues to hold enduring relevance in administrative, constitutional, and excise law.

Keywords: Article 19(1)(g), Liquor License, Reasonable Restrictions, State Monopoly, Excise Law

B) CASE DETAILS

i) Judgement Cause Title:
Cooverjee B. Bharucha v. The Excise Commissioner and the Chief Commissioner, Ajmer, and Others

ii) Case Number:
Petition No. 232 of 1953

iii) Judgement Date:
13 January 1954

iv) Court:
Supreme Court of India

v) Quorum:
Mehr Chand Mahajan, C.J., Mukherjea, Vivian Bose, Ghulam Hasan, and Jagannadhadas, JJ.

vi) Author:
Mehr Chand Mahajan, C.J.

vii) Citation:
AIR 1954 SC 220; 1954 SCR 873

viii) Legal Provisions Involved:

• Article 19(1)(g) of the Constitution of India

• Article 19(6) of the Constitution of India

• Article 14 of the Constitution of India

• Excise Regulation I of 1915

• Relevant Auction Rules under the Regulation

ix) Judgments overruled by the Case:
None

x) Case is Related to which Law Subjects:

• Constitutional Law

• Administrative Law

• Excise and Taxation Law

• Liquor Licensing Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case emerged from a public auction held for granting liquor licenses under Excise Regulation I of 1915, applicable in the erstwhile Ajmer-Merwara province. The petitioner, a previous license holder, lost the bid to a rival, Chhoga Lal, due to higher bidding. The petitioner challenged the auction on constitutional grounds under Article 32, alleging violation of his fundamental rights. He particularly attacked the procedural irregularities in the auction process and the overarching constitutional validity of the Excise Regulation which granted significant discretion to the Excise Commissioner and other authorities in regulating liquor trade. He contended that the rules amounted to a monopoly and restricted the right to free trade.

The Supreme Court was thus tasked with assessing (i) whether the restrictions imposed by the Regulation were reasonable and (ii) whether the license fee structure amounted to an unauthorized tax.

D) FACTS OF THE CASE

The Collector of Excise, Ajmer held an auction on 16 March 1953 for the Chang Gate Country Liquor Shop, Beawar, for the year 1953–54. The petitioner and one Chhoga Lal participated. Chhoga Lal’s bid of Rs. 57,000 emerged the highest. However, he failed to pay the mandated 50% of the bid amount immediately, as required under Rule 6(8)(a). Instead, he deposited Rs. 16,500 on 16 March and the balance of Rs. 12,000 two days later, breaching the rule.

Despite the irregularity, the Excise Minister confirmed the sale. The petitioner objected, demanded a resale or transfer of the license to him, and also filed an appeal before the Chief Commissioner, which was rejected.

The petitioner moved to the Supreme Court under Article 32, arguing infringement of Articles 14 and 19(1)(g). He also challenged the legality of the Minister’s authority, the fee structure as disguised taxation, and the regulation itself as violating his fundamental rights.

E) LEGAL ISSUES RAISED
i. Whether the Excise Regulation I of 1915 infringes Article 19(1)(g) and is ultra vires of the Constitution.
ii. Whether the system of public auction for liquor licenses violates Article 14 by enabling arbitrary discretion.
iii. Whether the license fee levied through auction is in the nature of a tax and hence unconstitutional.
iv. Whether the Minister of Excise had the legal authority to confirm the auction.
v. Whether procedural irregularities in auction amounted to constitutional violations.

F) PETITIONER’S ARGUMENTS
i. The counsels for Petitioner / Appellant submitted that

The petitioner asserted his fundamental right under Article 19(1)(g) to carry on any trade, which included the liquor trade. He argued that the Excise Regulation and auction rules violated this right by arbitrarily restricting access to trade and promoting state-sanctioned monopoly.

They argued that the licensing system granted excessive discretion to the Excise authorities, especially the Excise Commissioner and the Minister, without transparent criteria. The confirmation of a defective bid by Chhoga Lal was cited as evidence of arbitrary exercise of power.

They contended that the failure to adhere to Rule 6(8)(a) rendered the auction void and should have resulted in a resale, but instead, the authorities wrongfully confirmed the sale.

The petitioner submitted that the licensing fee collected through auction was not a regulatory fee but a means of raising revenue, akin to taxation, and thus needed legislative backing under Article 265.

The petitioner also argued discrimination under Article 14, asserting that he was not given the same leeway as Chhoga Lal to delay the deposit, and no appeal hearing was granted.

G) RESPONDENT’S ARGUMENTS
i. The counsels for Respondent submitted that

The State, represented by the Attorney-General M.C. Setalvad, countered that there is no inherent right to trade in liquor, which is inherently injurious to public health and morality. Hence, the State has full authority to control or prohibit such trades under Article 19(6).

They emphasized that liquor licensing is a regulatory measure, and not all trades are protected under Article 19(1)(g). The State has a duty to ensure responsible regulation, especially in trades with public health implications.

It was argued that auctioning of licenses is a fair and transparent process, and all interested parties had an equal opportunity to participate. The highest bid wins, and no arbitrary exclusion occurred.

The respondents submitted that Section 24 and 27 of the Regulation clearly authorized collection of duties and license fees, and that auction-based licensing was backed by statutory rules.

Citing Crowley v. Christensen, 34 Law Ed 620, and Indian cases like Rashid Ahmed v. Municipal Board, Kairana, [1950 SCJ 324], they argued that liquor trade cannot be equated with ordinary commercial activity.

H) RELATED LEGAL PROVISIONS
i. Article 19(1)(g) – Guarantees the right to practice any profession or trade.
ii. Article 19(6) – Permits reasonable restrictions in the public interest, and allows State monopolies.
iii. Article 14 – Equality before law.
iv. Excise Regulation I of 1915 – Sections 13, 14, 18, 24, 27, 30, 62, and 64 are critical.
v. Auction Rules under Excise Regulation – Particularly Rule 6(8)(a) concerning payment timelines.

H) JUDGEMENT

a. RATIO DECIDENDI
i. The Court ruled that liquor trade is not a trade that citizens have a fundamental right to carry out. It is inherently harmful, and State regulation or prohibition is reasonable under Article 19(6)[1].

The licensing system through public auction is not arbitrary or discriminatory, as it provides open participation to all. No monopoly exists, as all citizens can compete[2].

The Court held that licence fee collected via auction is in essence a revenue mechanism and akin to a tax, but validly backed by statutory authority, unlike in Rashid Ahmed‘s case where no legal authority existed[3].

b. OBITER DICTA
i. The Court referred to Field J.’s observations in Crowley v. Christensen highlighting that liquor business endangers public morality and safety, justifying heightened regulation or complete prohibition[4].

c. GUIDELINES 

• Liquor trade is subject to strict regulatory control, and no fundamental right exists to engage in it.

• Auction-based licensing is a valid and non-discriminatory mechanism.

• Revenue collection through licensing is permissible when backed by statutory provisions.

• Disputes over procedural lapses in auctions must be challenged under Article 226, not Article 32.

I) CONCLUSION & COMMENTS

This judgment firmly established that fundamental rights under Article 19 are not absolute, especially in cases involving hazardous trades. The ruling carefully delineates State powers under Article 19(6) and affirms the legality of licensing regimes for controlled substances. It represents a principled stand on balancing public interest against individual economic rights, especially in areas with moral and health concerns. The Court’s reliance on both Indian and foreign jurisprudence strengthens its analysis and shows a judicious blending of constitutional doctrine, public policy, and administrative law.

J) REFERENCES

a. Important Cases Referred
i. Crowley v. Christensen, 34 Law Ed 620
ii. Commonwealth of Australia v. Bank of New South Wales, [1950] AC 235
iii. Rashid Ahmed v. Municipal Board, Kairana, [1950] SCJ 324

b. Important Statutes Referred
i. Constitution of India – Articles 14, 19(1)(g), 19(6), 32
ii. Excise Regulation I of 1915 – Sections 13, 14, 18, 24, 27, 30, 62, 64