liquor outlets, asks TN govt to consider refund Madurai Bench of the Madras High Court refused to stop the closure of 33 outlets in Thoothukudi, Madurai, and Tiruchy districts.

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Tamil Nadu
Madras HC refuses to stay closure of liquor outlets, asks TN govt to consider refund
Madurai Bench of the Madras High Court refused to stop the closure of 33 outlets in Thoothukudi, Madurai, and Tiruchy districts.

The Madurai Bench of Madras High Court.(File Photo | Express)
Jegadeeswari Pandian
Updated on: 
21 May 2026, 7:59 am
2 min read
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MADURAI: Calling the state government’s decision to close Tasmac outlets located within 500m from educational institutions and places of worship a welcome step, a vacation bench of the Madurai Bench of the Madras High Court refused to stop the closure of 33 outlets in Thoothukudi, Madurai, and Tiruchy districts, and instead directed the government to consider refunding the licence fee for the non-operating period within three weeks.

Justice D Bharatha Chakravarthy gave the direction on a batch of petitions filed by landlords of buildings in which the outlets were operated and the licensees who were permitted to sell snacks, water, and collect liquor bottles in the bars attached to the outlets.

The counsel representing the petitioners argued that the government’s decision was arbitrary, as Rule 8 (1) of the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003, only prohibits the establishment of liquor outlets within 50m from places of worship or educational institutions in municipalities and corporations and 100m in other areas. The government cannot change this existing rule to 500m merely through a press release, one of the advocates contended.

They also pointed out that many licensees already paid the licence fee up to the expiry of the lease period on June 30, and the excess fee for the non-operating period has not been refunded.

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Citing the monetary loss they might face from the government’s decision, they requested the court to forbid the government from shutting down the outlets without following due process of law.

However, Advocate General Vijay Narayan told the court that the entire business of selling liquor is ‘res extra commercium’ (‘things outside commerce’- a legal principle denoting items that cannot be privately owned or traded). “The petitioners were only permitted by the Tasmac to sell water bottles, snacks, and collect liquor bottles. As per licence condition number 2, their activity comes to an end as and when the shop closes,” he pointed out. As far as refunding the security deposit or excess fee was concerned, the government would consider and take an appropriate decision, he added.

Hearing both sides, the judge observed that Article 47 of the Indian Constitution, a Directive Principle of State Policy, expects the state government to work towards ensuring public health, which includes prohibiting intoxicating drinks, except for medicinal purposes. So the legitimate expectation or right to carry on trade under Article 19(1)(g) of the Constitution, which applies to ordinary commerce, cannot be considered as far as the liquor trade is concerned, as the same is harmful to public health and welfare. No citizen can claim any unrestricted fundamental right to trade liquor under Article 19(1)(g), he added.

The objections raised by the petitioners in connection with Rule 8 were also rejected by the judge, citing that the rule does not prevent the government from closing a shop outside the prohibited radius mentioned in the rule.

He directed the licensees to file an application for refund of licence fee or security deposit within a week.

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Madras HC bins advocates’ plea ove
[21/05, 08:35] Meta AI: *Madurai Bench of Madras High Court – Refuses to Stay Closure of 33 TASMAC Outlets*
*Bench*: Justice *D. Bharatha Chakravarthy*
*Date*: 21 May 2026 | _The New Indian Express_

*1. What was the case?*
A batch of petitions by *landlords + bar licensees* of 33 TASMAC outlets in *Thoothukudi, Madurai & Tiruchy districts*. They challenged TN Govt’s 12 May 2026 press release to shut 717 TASMAC shops within 500m of schools/temples/bus stops.

*2. Petitioners’ arguments*
1. *Rule 8 violation*: TN Liquor Retail Vending Rules 2003 say only _50m in Corporations/Municipalities_ and _100m elsewhere_. Govt can’t change it to 500m by press release.
2. *Financial loss*: Licensees paid fees till 30 June 2026. Shops closing now = excess fee not refunded.
3. *Due process*: Can’t shut without following law.

*3. State’s reply – AG Vijay Narayan*
1. *Res extra commercium*: Liquor trade is _“things outside commerce”_ – no fundamental right to trade.
2. *Licence condition #2*: Bar licensees’ right ends when TASMAC shop closes.
3. *Refund*: Govt will consider and take appropriate decision on security deposit/excess fee.

*4. Justice D. Bharatha Chakravarthy’s order*
1. *“Welcome step”*: Called the 500m closure decision a _welcome step_.
2. *Article 47*: Directive Principle – State must work for public health, including prohibition of intoxicating drinks except medicinal use.
3. *No Article 19(1)(g) right*: _“No citizen can claim any unrestricted fundamental right to trade liquor under Article 19(1)(g)”_ because liquor is harmful to public health.
4. *Rule 8 doesn’t bar closure*: Rule 8 sets _minimum_ prohibited distance. It doesn’t prevent govt from closing shops _beyond_ that distance.
5. *No stay granted*: Refused to stop closure of 33 outlets.
6. *Relief given*: Directed licensees to apply for refund within 1 week. Govt to consider refund of licence fee/security deposit for non-operating period within 3 weeks.

*5. Legal points to note*
**Issue** **Court’s view**
**500m rule** Policy decision, valid. Rule 8 is a floor, not a ceiling.
**Fundamental right** Liquor trade is *res extra commercium*. No Article 19(1)(g) protection.
**Refund** Licensees can claim proportionate refund. Govt to decide in 3 weeks.
*6. How this differs from Chennai Bench order*
– *Chennai*: Justice GR Swaminathan – dismissed landlord petitions outright, called it “good decision”. No refund direction.
– *Madurai*: Justice D Bharatha Chakravarthy – also called it “welcome step”, no stay, but _directed govt to consider refunds_ for bar licensees.

*Bottom line*: Both benches upheld the 500m closure policy. Madurai Bench added a remedy for licensees to claim refunds.

Want the full judgment text or updates if anyone appeals to Division Bench/Supreme Court?