Liquor Consumption In Clubs & Associations Require Valid Licenses, Cannot Act Beyond The Scope Of Registered Bye-Laws: Madras High Court

A single-judge bench of Justice S.M Subramaniam held that Clubs registered under Tamil Nadu Societies Registration Act with its bye-laws also registered under the provisions of the Act must strictly follow the objects and purpose already set out in the bye laws. When alcohol consumption is beyond the scope of the bye-laws of the petitioner club, it must be r/w Rules relating to the grant of licenses in Chapter IV of The Tamil Nadu Liquor (License and Permit) Rules, 1981, which makes it abundantly clear that the Club cannot allow its members to consume alcohol in its premises without FL.2 License and an amendment to the existing bye-laws.

F.L.2 license is stipulated for 'license for possession of liquor by a non-proprietary Club for supply to members' in the Rules. Even for consumption of liquor in a Club or Association, a license must be obtained for the possession of liquor and for supply to its members inside the premises, the court added.

The single-judge bench accordingly noted in its order that the Tamil Nadu Prohibition Act, 1937 imposes a total prohibition on buying and consumption of alcohol. However, this is subject to exceptions when r/w the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 (regulates the liquor retail vending both in shops and bars) and Tamil Nadu Liquor (License and Permit) Rules, 1981 (deals with grant of license and possession of liquor and licenses for liquor used for consumption).

"…Thus the legal position is that the prohibition is the law and buying, selling, possession and consumption are regulated by the Rules in force. Therefore, consumption of liquor when regulated under the Rules, then the consumption must be in accordance with the provisions of the Act and Rules and it is not at the choice of the consumers of liquor. When there is total prohibition imposed under law, usage of liquor is regulated through Rules, then the Rules should be scrupulously implemented for the purpose of buying, selling, possession and consumption of liquor", the court noted while also adding that consumption of alcohol in the club premises without license will attract offences punishable under the Prohibition Act.

The court has also censured the growing tend of filing writ petitions seeking general directions like injunctions, almost often on the pretext that law enforcement authorities are interfering with the lawful businesses of the complainants.

"Conducting inspections on suspicious circumstances, on informations or complaints is the primary duty of the Public Authorities and Police Officials. Thus, they are bound to conduct such inspections, so as to prevent any illegal activities in any such Clubs, Associations, Spa, Massage Centre, Recreation Clubs etc. No doubt, largescale allegations against these Spa, Clubs, Associations, Recreation Clubs etc., are in the public domain and such allegations are resulting in various consequences in the Society", the bench further added.

While declining the relief for an injunction, the court has also issued a few directions to the Director-General of Police, that includes constitution of trained Special Squads across the State of Tamil Nadu for the purpose of conducting inspections in Social Clubs, Associations, Spa, Recreation Clubs, Massage Centres etc., and initiating action against any offence or illegal activity.

It has also been instructed that there must be communication about the action taken to competent jurisdictional authorities under the Tamil Nadu Societies Registration Act, enabling those Authorities to initiate further actions under the provisions of the Tamil Nadu Societies Registration Act, 1975. DGP should also issue guidelines to subordinate officers to coordinate with the Registration Department and other Government Departments for effective implementation of statutory provisions

The DGP has also been asked to issue circulars within four weeks to police officials, registration departments, local bodies, connected government departments etc to initiate action against erring clubs and associations.

The matter has been posted for reporting compliance on 24^th January, 2022.

Arguments Raised And Other Observations Made

The petitioner in the case was 'Kancheepuram Reading Room and Tennis Club' registered under Tamil Nadu Societies Registration Act, 1975. The petitioner club contended that the police officials were harassing its members with constant and unnecessary inspections. It was also submitted that purchasing liquor from Government approved shops, bringing the liquor bottle inside the petitioner-Club premises and consumption of liquor by the members in the Club premises, cannot be objected by the Police Authorities. It was also submitted that license is not required as long as the petitioner club is not selling alcohol in its premises.

The government advocate for the respondent authorities argued that consumption of alcohol is not in consonance with the purpose and object for which Reading Room and Tennis Club was registered, i.e., permitting the sports activities and maintaining a reading room for its members. Another contention levelled by the respondent police was that the Club is a public place and liquor consumption in such a place is illegal in the absence of a valid license.

Aligning with the submissions made by the Government Advocate, the court finally held that Section 4 of the Tamil Nadu Prohibition Act bars manufacture of, traffic in, consumption of liquor and intoxicating drugs. Section 4-A makes it illegal to consume alcohol in public places without a valid license, which in turn, permits the authorities to prosecute such intoxicated persons. The court also added that Section 37 and Section 38 of the Tamil Nadu Societies Registration Act talks about the instances where a registered society's license can be revoked/ cancelled. Section 37 places an impediment on registered societies to act outside the scope of the bye-laws or objects specified in the memorandum filed with the Registrar under Section 6. Similarly, Section 38 terms unlawful activities as a ground sufficient to cancel the registration of the registered society. The process of cancellation under both sections would include an opportunity given to the registered society to show cause why the license shouldn't be cancelled.

Senior Counsel T.R. Rajagopalan appeared for the petitioner club. Additional Government Pleader M. Rajendiran appeared for the respondents.

Case Title: M/s.The Kancheepuram Reading Room and Tennis Club, Represented by its Secretary v. The Director-General of Police & Ors

Case No: WP No.30803 of 2012 & MP No.1 of 2012

Citation: 2022 LiveLaw (Mad) 1