Himachal Pradesh High Court
Himalayan Wine & Others vs State Of H.P. & Others on 28 June, 2016
Author: Sandeep Sharma
Bench: Tarlok Singh Chauhan, Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH
SHIMLA
CWP No.1525 of 2016 alongwith CWP Nos.1503, 1526, 1527, 1528,
.
1562 and 1563 of 2016
Judgment Reserved on: 17.06.2016
Date of decision: 28.06.2016
1. CWP No.1525 of 2016
Himalayan Wine & Others ....Petitioners
Versus
State of H.P. & Others ....Respondents
of
2. CWP No.1503 of 2016
M/s. Neelkanth Wine ....Petitioner
Versus
State of H.P. & Others
rt ....Respondents
3. CWP No.1526 of 2016
M/s.Kundlas Wines
....Petitioner
Versus
State of H.P. & Others ....Respondents
4. CWP No.1527 of 2016
Neelkanth Contractors & Builders ....Petitioner
Pvt.Ltd.
Versus
State of H.P. & Others ....Respondents
5. CWP No.1528 of 2016
M/s.Aradhana Wines & Others ....Petitioners
Versus
State of H.P. & Others ....Respondents
6. CWP No.1562 of 2016
M/s.G.S. Liquor ....Petitioner
Versus
State of H.P. & Others ....Respondents
7. CWP No.1563 of 2016
M/s.Rana Wines ....Petitioner
Versus
State of H.P. & Others ....Respondents
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2
Coram
The Hon'ble Mr.Justice Tarlok Singh Chauhan, Judge.
The Hon'ble Mr.Justice Sandeep Sharma, Judge.
.
Whether approved for reporting ?1 Yes.
For the Petitioners: Mr.B.C. Negi, Mr.Sanjeev Bhushan
and Mr.Ramakant Sharma, Senior
Advocates with Mr.Arvind Sharma,
Mr.Basant Thakur and Mr.Satish
Kumar Awasthi, Advocates.
of
For the Respondents-State: Mr.Shrawan Dogra, Advocate
General with Mr.Anup Rattan,
Additional Advocate General and
Mr.R.N. Sharma, Advocate.
rt
For Respondent-Himachal: Mr.Dilip Sharma, Senior Advocate
Pradesh Beverages Limited: with Mr.Munish Sharma, Advocate.
Sandeep Sharma,J.
1. With the consent of learned counsel representing the petitioners in the aforesaid writ petitions, all the cases are being taken together for final adjudication since issues involved in abovementioned petitions are identical. Moreover, in all the petitions similar relief has been claimed by the petitioners.
2. At the time of final hearing of the aforesaid matters, case bearing CWP No.1525 of 2016, titled:
M/s.Himalayan Wines vs. State of Himachal Pradesh and 1 Whether the reporters of Local Papers may be allowed to see the judgement? Yes.::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 3
Others, has been taken as lead case, since pleadings in that case are complete.
.
3. Briefly stated facts necessary for the just and proper adjudication of the controversy at hands, as narrated in CWP No.1525 of 2016, are that the petitioners are engaged in the business of Liquor for the last so many years in the of State of Himachal Pradesh. It is further averred in the writ petition that all the writ petitioners are holders of L-1 Licence granted to them under the H.P. Liquor Licensing Rules, 1986 rt (for short Rules, 1986) for the sale of liquor including Indian made Foreign liquor in the whole sale trade only. Perusal of the averments contained in the writ petition suggests that the petitioners are aggrieved with the issuance of letter dated 3rd June, 2016 by respondent No.2 to all the Assistant Excise & Taxation Commissioners in the State of Himachal Pradesh, conveying therein the approval of the Government for the "Liquor Sourcing Policy for 2016-17 and Liquor Sales Policy for 2016-17". Accordingly, in the backdrop of issuance of aforesaid communication, petitioners by way of present petition laid challenge to Annexures P-3, P-4 and P-5 annexed with all the writ petitions. By way of Annexures P-3 and P-4, all the concerned person including petitioners as ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 4 well as authorities envisaged under H.P. Excise Act,2011 (for short `Excise Act') have been informed with regard to approval .
of the Government for Liquor Sourcing Policy, 2016-17 and Liquor Sales Policy, 2016-17 with further information that w.e.f. 8th June, 2016 Corporation constituted in terms of Clause 2.38 of Announcements of Excise Allotments/Tender of for the year 2016-17 (for short `Excise Announcements') shall commence the business of wholesale and licenses of existing wholesale dealers would be discontinued w.e.f. 15th June, rt 2016.
4. By way of Annexure P-5, communication dated 4.6.2016 all the persons, engaged in the liquor business/ trade on the strength of L-1 License, have been directed to exhaust the stock, if any, on or before 14.6.2016. Petitioners contended that they, being the license holders of wholesale vend of Indian made foreign liquor trade only (for short `L-1'), were issued license from time to time, copies whereof are also placed on record as Annexure P-1. Petitioners by way of Annexure P-1 have placed on record documents/receipts suggesting that license for carrying wholesale vends of L-1 have been renewed by the respondents on year to year basis and lastly petitioners have been granted license in March, ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 5 2015 up to 31st March, 2016 after taking prescribed license fee. Petitioners also averred that since license was to expire .
on 31st March, 2016, they made an application before the competent authority for renewal in accordance with the Himachal Pradesh Liquor Licensing Rules, 1986 (for short `Rules, 1986') and their applications were accepted by the of respondents for renewal by receiving the license fee amounting to Rs.6 lacs as renewal fee for the year 2016-17.
5. Petitioners rt have also placed on record receipt/copy of challan on record to substantiate their claim with regard to deposit of license fee for renewal of license. It is also contended on behalf of the petitioners that after renewal of license they are continuing as L-1 licensee and have been selling Indian made foreign liquor to various retail sale licenses as per the provision of Act, Rules and Announcements of Excise Allotment/Tenders. Petitioners have also contended that after renewal of license for the year 2016-17, they mobilized all the financial resources for entire year and invested huge amount with a view to run the business as wholesalers in the capacity of L-1 till 31st March, 2017.
::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 66. All the petitioners have averred that to their utter chagrin and surprise, respondents issued letter dated .
3.6.2016 (Annexure P-3), conveying therein approval of the Government for Liquor Sourcing Policy, 2016-17 and Liquor Sales Policy, 2016-17. It is stated by the petitioners that the respondents have formulated a Company/Corporation;
of namely; H.P. Beverage Corporation Limited (for short `HPBL') appointing respondent No.2 as its Managing Director, but factum with regard to start of operation/business by the rt aforesaid newly constituted Company came to their notice when a meeting was convened by Assistant Excise & Taxation Commissioner, Solan on 4.6.2016 (Annexure P-4). According to the petitioners, unilateral action has been taken by respondents that too in complete violation of Act and Rules occupying the field and moreover, decision, as referred above, is contrary to the Excise Announcements for the year 2016-
17. All the petitioners have stated in their petitions that the respondents are estopped by their own act and conduct to initiate any action in terms of letter dated 3.6.2016 (Annexure P-3) especially when renewal of licence has been made in their favour after accepting renewal fee for the entire year, more particularly, when renewal is in terms of Rule 12 ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 7 of the Rules, 1986. Petitioners also submitted that as per Section 81 of the Excise Act, it is/was incumbent upon the .
respondent No.2, the Excise & Taxation Commissioner (who also has been designated as Financial Commissioner (Excise) under the H.P. Power and Appeal Orders, issued by the Government to make Rules by notification for regulating the of manufacture, supply, storage or sale of any liquor and imposing any restrictions and the conditions for the conduct of business of liquor by newly constituted HPBL, hence any rt action taken contrary to the Rules and Regulations deserves to be held invalid being contrary to the provisions of the Act.
It is also averred in the petitions that great prejudice would be caused to the petitioners in case respondents are allowed to act/proceed in terms of Annexure P-3. It is also submitted that once respondents have renewed the licenses by taking license fee in terms of Rules, petitioners being licensees cannot be stopped from carrying out their business till 31st March, 2017 since they have paid license fee for the whole year.
7. It is further submitted that new mechanism has been devolved by the respondents to monopolize the required trade by eliminating the petitioners who at present are the ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 8 major stake-holders in the liquor license in the State of Himachal Pradesh. Petitioners averred that there is no power .
with Excise Department to add or cancel any classification in the licensee in the Excise Policy without amending the Rules.
It is averred by the petitioners that once they were acting as L-1 licencee, any action of respondents to provide for another of license to warehouse certainly demonstrates bad and malafide intention of the respondents. According to the petitioners, no object is sought to be achieved by formulation rt of any Corporation/Company rather respondents solely with a view to harass them have issued Annexure P-3 asking them to exhaust their stock on or before 14.6.2016 and in case stock remains, unsold/unexhausted, Licensee will have to return the same back to the manufacturer, which is totally impracticable.
8. In the aforesaid background, the petitioners averred that respondents should have allowed them to continue for the entire financial year especially when renewal fee of whole of the year has been accepted by the respondents.
9. A detailed reply has been filed by respondents No. 1 to 12 on the affidavit of Additional Chief Secretary to the ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 9 Government of Himachal Pradesh, wherein it has been interalia stated that petitioners did not have any fundamental .
right to carry on any trade in liquor and the State Government enjoys exclusive privilege in respect of dealings in liquor trade. Respondents have stated that under Section 5 of the Excise Act, State Government is empowered to of appoint an Excise & Taxation Commissioner, who shall exercise all the powers of Financial Commissioner and subject to the control of State Government, the general rt superintendence and administration of all matters of excise shall vest in him. Accordingly, the State Government vide letter No.EXN.F(1)/2016 approved that, "existing system of whole sale licensing system of liquor as it exists during the year 2015-16 be continued for one month for the Financial Year 2016-17 commencing on 01.04.2016 till the proposed company/Corporation become operational for the purpose. The license fee be in proportionate with the fee of Financial Year 2016-17 for the period of 1 month."
10. It is also averred in the reply filed by the respondents that on 2.5.2016, the State Government approved continuation of the existing system till 31.5.2016, ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 10 which was subsequently extended till 14.6.2016. As such, the petitioners have no right to continue the business beyond .
that date since they do not have any vested right in any aspect of trade in liquor and to continue to do so, contrary to the directions of the State Government, which is exclusive domain of the respondent State, especially in trade of liquor.
of Respondents solely with a view to demonstrate that no sudden decision has been taken by them with regard to formation rtof proposed Company/Corporation, furnished chronological detail indicating therein the steps taken by it to implement the decision regarding switch-over from the existing system of wholesale trade in liquor by L-1 and L-13 licensees to the approved system of wholesale trade in liquor by a new Company which is reproduced hereinbelow:-
"Date Steps taken
11.03.2016 Council of Minister Meeting approved the
Excise Policy 2016-17 in the Cabinet Meeting held on 11.03.2016.
15.03.2016 Approval of the Government was conveyed by the Additional Chief Secretary (Excise and Taxation) to the Excise and Taxation Commissioner regarding establishing a new Company to exclusively handle all wholesale liquor trade throughout the state.
26.03.2016 Approval of the Government was conveyed by the Additional Chief Secretary (Excise and Taxation) to the Excise and Taxation Commissioner for the Memorandum of Association and Articles of Association of the proposed company.
::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 1101.04.2016 Approval of the Government was conveyed by the Additional Chief Secretary (Excise and Taxation) to the Excise and Taxation Commissioner regarding continuation of .
existing system for one month till the proposed Company becomes operations for the purpose and to charge the license fee on proportionate basis.
20.04.2016 Certificate of incorporation was issued by the Ministry of Corporate Affairs, Government of India.
of 26.04.2016 In its first meeting of the Board of Directors, Board of Directors of HPBL considered the issues related to appointment of statutory functionaries like Chairman, Managing Director, Company Secretary, Auditors in rt additional to other legal requirements like registered office of the company, adoption of common seal, application for PAN, TAN, TIN, Bank Account, Logo and financial year of the company. Board of Directors also discussed proposed organizational structure, hiring warehouses, liquor sourcing and liquor sales arrangements.
02.05.2016 Approval of the Government was conveyed by the Additional Chief Secretary (Excise and Taxation) to the Excise and Taxation Commissioner regarding continuation of existing system till 31.05.2016.
In its second meeting of Board of Directors, Board of Directors of HPBL further deliberated on the issues related to organization structure, liquor sourcing and liquor sales arrangements and hiring of warehouses in addition to confirming the minutes of first meeting.
03.05.2016 Field offices were informed about the decision for extension of existing system for a month by the Excise and Taxation Commissioner.
06.05.2016 PAN Number of HPBL was issued by the Income Tax Department.
13.05.2016 TAN number was issued by the Income Tax Department.
20.05.2016 TIN number for CST was issued by the Excise and Taxation Department to the HPBL.
::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 1223.05.2016 TIN number for VAT was issued by the Excise and Taxation Department to the HPBL.
24.05.2016 In its third meeting of Board of Directors, Board .
of Directors of HPBL again considered the organization structure, liquor sourcing policy and liquor sales policy and approved with some modification. Discussions regarding hiring of warehouses and other operational aspects were also discussed in the meeting.
01.06.2016 Approval of Government for the Liquor Sourcing Policy for 2016-17 and Liquor Sales Policy of 2016-17 were conveyed by the Additional Chief Secretary (Excise and Taxation) to the Excise and Taxation Commissioner.
Approval of Government was conveyed regarding continuation of existing system only rt till 14th June and starting the wholesale business of the HPBL by 8th June.
03.06.2016 Field offices were informed about the decision for extension of existing system till 14th June by the Excise and Taxation Commissioner.
08.06.2016 In its fourth meeting of Board of Directors, Board of Directors of HPBL considered various operational issues like hiring of warehouses, providing manpower for IT, printing of stationary and posting of required manpower in the HPBL immediately.
09.06.2016 Approval of the Government was conveyed by the Additional Chief Secretary (Excise and Taxation) to the Excise and Taxation Commissioner regarding creating and filling of the posts in the HPBL.
16.06.2016 New required licenses have been notified with amendments in the H.P. Liquor License Rules, 1986.
Fifth meeting of the Board of Directors of HPBL has been scheduled.
Perusal of the above events would show that government has acted consciously and vigorously to implement its announcement of excise policy made under condition 2.38. Relevant original record will be produced for kind perusal of this Hon'ble Court."
::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 1311. Respondents also stated in their reply that .
licenses for the wholesale vend of foreign liquor (L-1) and also wholesale vend for Country Liquor (L-13) are issued under the Excise Act and in terms of Section 81(a) of the said Act the Financial Commissioner, by issuing notification, is of competent to make rules regulating the manufacture, supply, storage or sale of any liquor including the character, rt erection, alternation, repair, inspection, supervision, management and control of any place for the manufacture, supply, storage or sale of such article and the fittings, implements, apparatus and registers to be maintained therein. In the year 2016-17 also relevant conditions relating to licenses for supply, storage or sale of the Country Liquor, Indian Made Foreign Spirit, Beer, Wine and Ready to Drink Liquor etc. have been framed by the Financial Commissioner which stands published vide notice No.7-635/2015-EXN-6194-6219, dated 19.3.2016. It is further averred by the respondents that detailed terms and condition relating to Allotment of Excise Licence for the year 2016-17 were issued in terms of Excise Announcements for ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 14 the year 2016-17, wherein as per clause 2.38 it was clearly mentioned/declared that:
.
"A Company will be set up under the Himachal Pradesh Excise and Taxation Department which shall be exclusively responsible for the procurement of all kinds of liquor i.e. Country Liquor, IMFS, Beer, Wine and RTD etc. In the State and shall further supply liquor so procured as wholesale-licensee to all the retail vends i.e. L-2, L-
of 14 & L-14A etc. during the year 2016-17. After the Company starts its operation, the retail licensees shall lift liquor i.e. Country Liquor, IMFS, Beer, rt Wine and RTD etc. only from the Company's licensed and prescribed premises."
12. Respondents-State in their reply have admitted that the petitioners voluntarily deposited an amount of Rs.6 lacs for renewal of their licenses but in view of Condition No.2.38 of the Excise Announcements for the year 2016-17 authority concerned, did not renew the licenses of the petitioners but only permitted them to continue till necessary arrangements as per Condition No.2.38 of Chapter-II of the Excise Announcements are made. Respondents have also mentioned that as per Rules, 1986, the licencee in addition to the provisions of the Excise Act and Rules framed their under from time to time are also under obligation to comply with the instructions/directions/orders/notifications issued by ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 15 the Excise & Taxation Commissioner from time to time. As per respondents all the licensees are bound to comply with .
all directions and orders of the Excise and Taxation Commissioner & Taxation Commissioner-cum-Financial Commissioner(Excise), Himachal Pradesh and all other Excise Officers, which may be issued from time to time by of them strictly in terms of specific Condition No.1.4 contained in Excise Announcements for the year 2016-17.
Respondents have also stated that licensees were well aware rt of the Excise Announcements made for year 2016-17 and as such they have no ground to raise any grievance as being put forth in the present writ petition. It is also stated in the reply filed by the respondents that the petitioners without availing alternative remedy available to them under Section 68 of the Excise Act, wherein a provision of appeal has been provided, have approached this Court and as such petitions deserve to be quashed and set aside.
13. After perusing averments contained in the writ petition as well as reply filed by the respondents, it emerges that the petitioners are aggrieved with the action of the respondents, whereby a conscious decision has been taken by the respondent-State to replace the existing system of ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 16 granting wholesale licenses for trading (L-1) Liquor by creating Company/Corporation in terms of Excise .
Announcements made for year 2016-17. Since respondents vide Annexure P-3 conveyed the decision of the Government for granting approval to Liquor Sourcing Policy and Liquor Sales Policy for 2016-17 and start the business by newly of constituted `HPBL' w.e.f. 18.6.2016, petitioners being aggrieved have approached this Court. Since the decision to replace old rt license system by constituting Company/Corporation has been taken after 31.3.2016, especially when the petitioners have deposited the amount of Rs.6 lacs for renewal of their licenses for the period of 2016- 17, petitioners being materially affected with the decision of the respondents to discontinue their licenses after 14.6.2016, have filed petitions before this Court.
14. Shri B.C. Negi and Shri Sanjeev Bhushan, learned Senior Counsel, appearing for the petitioners, vehemently argued that action of respondents in issuing Annexures P-3, P-4 and P-5 is totally unsustainable in the facts and circumstances of the case and as such same deserves to be quashed and set aside. The aforesaid learned Senior Counsel while advancing their arguments, reiterated the averments ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 17 contained in the writ petitions, which have been taken note of above and as such same are not reproduced here for the sake .
of brevity. However, few of the relevant submissions made on behalf of the petitioners by aforesaid Senior Counsel are noticed here.
15. Learned Senior Counsel representing the of petitioners stated that action of the respondents in creating Company/Corporation in terms of clause 2.38 of the Excise Announcements for the year 2016-17 cannot be held rt justifiable because same has been taken after commencement of the new financial year i.e. 2016-17. They also contended that all the petitioners have deposited an amount of Rs.6 lacs on account of renewal fee, which has been duly accepted by the respondents, meaning thereby that their licenses stand renewed till 2016-17 and as such any decision of respondents to start the operation of Company/Corporation body created in terms of clause 2.38 of the Excise Announcements for 2016-17 itself speaks of malafide intention of the respondents. It is forcefully contended by the learned Senior Counsel appearing on behalf of the petitioners that Corporation in terms of clause 2.38 has only been created on papers and there is no ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 18 infrastructure available to provide necessary support for effective working of the newly created Corporation. It is also .
contended by the learned Senior Counsel that without making any amendments in the Rules, 1986 (L-1) any action taken by the respondents to start functioning of the Corporation in terms of clause 2.38 cannot be held of justifiable, rather same would create confusion in the mind of the people, who are involved in the business of liquor.
During arguments having been made by the aforesaid learned rt Senior Counsel, attention of this Court was invited to the various provisions of the Excise Announcements for the year 2016-17, Liquor Sourcing Policy for the year 2016-17 and Liquor Sales Policy for the year 2016-17, to demonstrate that attempt is being made by the respondents to create further category of licenses for private operators solely with a view to eliminate the existing L-1 licenses (petitioners) without there being any clear objective. Learned Counsel vehemently argued that decision, if any, to accept or suspend the license issued in terms of Section 27 and 28 of the Excise Act can only be taken in terms of Section 29 of the Excise Act, wherein cancellation or suspension can only be done in exigencies as referred in clause 8 (a) to (f) of Section 29 of the ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 19 Excise Act. Though under Section 32(1)(a) Government has power to withdraw license permit or passes after expiry of 15 .
days notice in writing, but in the present case no notice, whatsoever, has been issued to the present petitioners and as such any action to discontinue the license of the petitioners after 14.6.2016 is in complete violation of the Rules as well of as principle of natural justice and as such the same cannot be allowed to sustain. Both the learned Senior Counsel forcefully contended that once license fee was accepted by the rt respondent beyond 31.3.2016 in terms of Rule 12 of the Rules, 1986, respondent-State has no authority/power to issue order of discontinuation of the license issued in favour of the petitioners w.e.f. 14.6.2016. It is contended on behalf of the petitioners that being a welfare State it is/was expected of the respondents State to protect the interest of petitioners, who have been contributing in the liquor trade for years together as L-1 licencee. It is also contended that once respondents accepted the license fee for whole year till March, 2017, petitioners are/were entitled to continue their business as L-1 license till March, 2017.
16. Shri Shrawan Dogra, learned Advocate General, representing the respondents, supported the decision of the ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 20 respondents-State to start the wholesale liquor business by the Company/Corporation in terms of clause 2.38 of .
Chapter-II of Excise Announcements made for the year 2016-
17. Mr.Dogra strenuously argued that Section 5 of the Excise Act empowers the respondents to appoint an Excise and Taxation Commissioner, who shall exercise the powers of of Financial Commissioner and subject to control of State Government, general superintendence and administration of all matters shall vest in him. Accordingly, State Government rt gave its approval for setting up a Company/Corporation as indicated in the Excise Announcements for the year 2016-17.
17. Mr.Dogra, at the time of advancing his arguments, referred to documents annexed with the petition as well as reply to demonstrate that the petitioners were fully aware of the conscious decision taken by the Government to set up a Corporation/Company for carrying out wholesale liquor business by the Corporation/Company to be constituted under clause 2.38 of Excise Announcements made for the year 2016-17 and as such they cannot be allowed to rake up this issue at this stage by filing present petitions. It is contended on behalf of the respondents-State that decision taken by Government to set up a Corporation/Private ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 21 Company for carrying out wholesale business is strictly in terms of implementation of Excise Announcements made in .
the Excise Policy for the year 2016-17, wherein it is specifically provided in clause 2.38 Chapter-II, that the Company would be set up under the Himachal Pradesh Excise and Taxation Department for procurement of all kinds of of liquor i.e. Country Liquor, IMFS, Beer, Wine and RTD etc in the State. He also contended that it has been made clear in the aforesaid provisions that once Company starts rt operation, the retail licensees shall lift liquor only from the Company's licensed and prescribed premises. He also refuted the submission on behalf of the petitioners that no amendments, whatsoever, have been carried out in Rules, 1986 in this regard. Therefore, he made available copy of the Notification regarding amendment made in H.P. Liquor Licence Rules, 1986, perusal whereof suggests that necessary amendments have been carried out by the respondent-State for giving effect to the clause 2.38, as referred hereinabove. At this stage, he forcefully refuted the arguments advanced on behalf of the petitioners that since license fee in the shape of amount of Rs. 6 lacs has been received by the respondents-
State, petitioners are entitled to continue their business on ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 22 the strength of license (L-1) till March, 2017. In this regard, Mr.Dogra, strenuously argued that since respondents had .
already taken conscious decision to set up a Corporation/Company in terms of clause 2.38, no license, whatsoever, for whole of the year was issued in favour of any person for carrying liquor business, rather license/permit, if of any, was issued for short term, but definitely not for a period beyond 31.5.2016.
18. Mr.Dogra forcefully contended that bare perusal rt of the Policies framed by the respondents-State for implementation of Excise Announcements made for the year 2016-17 suggests that decision has been taken by the Government in public interest and as such allegation, if any, of malafide as alleged by the petitioners is totally baseless and deserves outright rejection. Mr.Dogra also contended that petitioners have no vested right, whatsoever, to claim license to carry out the liquor trade, merely on the basis of deposit of renewal fee.
19. Having heard the learned counsel for the parties and gone through the record, this Court, after careful perusal of the pleadings available on the record as well as arguments having been made by the learned counsel representing the ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 23 parties to lis, is of the view that following two questions are required to be answered for just and fair decision in the .
matter:-
(a) "Whether decision/approval of the respondents for creating Company/Corporation in terms of clause 2.38 of the Excise Announcements for the year 2016-17 is in accordance with law", and "whether respondents are empowered to eliminate individual license holder for carrying liquor business as in the present case or not?
of
(b) "Whether any vested right has accrued in favour of the present petitioners after depositing of Rs.6 lacs for renewal of their licenses or whether after receipt of amount rt licensees/petitioners are entitled to continue their business for whole year i.e. 2016-17 or not?
20. Careful perusal of clause 2.38 to Chapter-II of Excise Announcements for the year 2016-17, as reproduced in para supra, clearly demonstrates that at the time of Announcement of Excise Policy for the year 2016-17, respondents-State made its intention clear that it intends to create Company/Corporation, which will replace the old system of L-1 wholesale dealer. Rather, later part of clause 2.38 makes it ample clear that once the Company starts its operation, retail licenses shall lift liquor i.e. Country liquor, IMFS, Beer, Wine and RTD etc. only from the Company's licensed and prescribed premises.
::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 2421. It is undisputed that vide Section 5 of the Excise Act, State Government is competent/empowered to appoint .
Excise & Taxation Commissioner who shall exercise powers of Financial Commissioner, subject to control of the State Government. Section 81 of Excise Act provides ample powers to respondents to make Rules for regulating the of manufacture, supply, storage or sale any liquor including the character, erection, alternation, repair, inspection, supervision, management and control of any place for the rt manufacture, supply, storage or sale of such article and the fittings, implements, apparatus and registers to be maintain therein.
22. Section 81(a) of the Act clearly provides that the Excise & Taxation Commissioner (who also has been designated as Financial Commissioner (Excise) under the H.P. Power and Appeal Orders, issued by the Government is empowered to make Rules by notification for regulating the manufacture, supply, storage or sale of any liquor and imposing any restrictions.
23. In this regard reference is made to Section 81(a) of the Act, which is reproduced hereinbelow:
"81(a) Regulating the manufacture, supply, storage or sale of any liquor including the ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 25 character, erection, alternation, repair, inspection, supervision, management and control of any place for the manufacture, supply, storage .
or sale of such article and the fittings, implements, apparatus and registers to be maintained therein."
It is crystal clear from the reading of aforesaid provisions that State Government alone is competent to of regulate the manufacturer, supply, storage or sale of any liquor by making requisite terms and conditions for
24. rt the same.
Facts narrated above as well as provisions of law mentioned hereinabove, leaves no doubt that respondents-
State has exclusive power to control the trade of liquor, as such, decision of respondents-State to create Corporation/ Company for carrying out liquor business cannot be held illegal and unjustifiable. Admittedly, as has been held in catena of cases, it is the exclusive domain of the Government to control the trade of liquor and no individual can claim any right to trade in liquor.
25. Moreover, issue with regard to competence of Government in creating another category of licensee by creating Company/Corporation requires no elaborate discussion by this Court, as issue is no longer res integra.
::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 2626. In Har Shankar and others etc. v. The Deputy Excise and Taxation Commissioner and others etc, AIR .
1975 SC 1121, it was observed by the Hon'ble Apex Court:-
"53.In our opinion, the true position governing dealings in intoxicants is as stated and reflected in the Constitution bench decisions of this Court in Balsara's case 1951 SCR 682 = (AIR 1951 SC
318); Cooverjee's case 1954 SCR 873 = (AIR 1954 of SC 220); Kidwai's case 1957 SCR 295 = (AIR 1957 SC 414); Nagendra Nath's case 1958 SCR 1240 = (AIR 1958 SC 398); Amar Chakraborty's case (1973) 1SCR 533 = (AIR 1972 SC 1863) and rt the RM DC case 1957 SCR 874 = (AIR 1957 SC
699) as interpreted in Harinarayan Jaiswal's case (1972) 3 SCR 784 = (AIR 1972 SC 1816) and Nashirwar's case (AIR 1975 SC 360). There is no fundamental right to do trade or business in intoxicants. The State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the state and indeed without such vesting these can be no effective regulation of various forms of activities in relation to intoxicants...."
27. The question before the three Judges Bench of the Hon'ble Apex Court in M/s Ugar Sugar Works limited vs. Delhi Administration and others, (2001) 3 SCC 635 arose regarding the validity of notification issued laying down terms and conditions for registration of different brands of Indian ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 27 Made Foreign Liquor (IMFL) for supply within the territory of Delhi during 2000-01 and laying down Minimum Sales .
Figures (MSF) as a criteria of eligibility for grant of license in Form L-1, whether it was violative of Articles 14, 16 and 19(1)(g) of the Constitution of India. Considering the law on the issue, it was again expressed that there is no of fundamental right to trade in intoxicants like liquor and the plea of the petitioner therein to the contrary was emphatically repelled with the following observations:-
rt "The contention that a citizen of this country has a fundamental right to trade in intoxicating liquors refuses to die in spite of the recent Constitution Bench decision in Khoday Distilleries, [1995] 1 SCC 574. It is raised before us again. In Khoday Distilleries, this Court reviewed the entire case-law on the subject and concluded that a citizen has no fundamental right to trade or business in intoxicating liquors and that trade or business in such liquor can be completely prohibited. It held that because of its vicious and pernicious nature, dealing in intoxicating liquors is considered to be res extra commercium (outside commerce).Article 47 of the Constitution, it pointed out, requires the State to endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and all drugs which are injurious to health. For the same reason, the Bench held, the State can treat a monopoly either in itself or in an agency created by it for ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 28 the manufacture, possession, sale and distribution of liquor as a beverage. The holding is emphatic and unambiguous. Yet an argument .
is sought to be built upon certain words occurring in clauses (e) and (f) of the summary contained in para 60 of the decision. In these clauses, it was observed that creation of a monopoly in the State to deal in intoxicating liquors and the power to impose restrictions, limitations and even prohibition thereon can be of imposed both under clause (6) of Article 19 or even otherwise. Seizing upon these observations, Shri Ganguly argued that this decision rt implicitly recognises that business in liquor is a fundamental right under Article 19(l)(g). If it were not so, asked the learned counsel, reference to Article 19(6) has no meaning. We do not think that any such argument can be built upon the said observations. In clause (e), the Bench held, a monopoly in the State or its agency can be created "under Article 19(6) or even otherwise". Similarly, in clause (f), while speaking of imposition of restrictions and limitations on this business, it held that they can be imposed "both under Article 19(6) or otherwise". The said words cannot be read as militating against the express propositions enunciated in clauses (b), (c), (d), (e) and (f) of the said summary. The said decision, as a matter of fact, emphatically reiterates the holding in Har Shanker, [1975] 1 SCC 737, that a citizen has no fundamental right to trade in intoxicating liquors. In this view of the matter, any argument based upon Article 19(l)(g) is out of place".::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 29
It was concluded thus:-
"15. In view of this settled position of law, any argument impugning the policy decision of the .
State Government, as reflected in the impugned notification, based upon Article 19(l)(g) is totally out of place and merits outright rejection and we have no hesitation in doing so most emphatically."
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28. Subsequently, another Constitution Bench of the Hon'ble Supreme Court in Khoday Distilleries Limited and others vs. State of Karnataka and others, (1995) 1 SCC 574 rt delving into the issue, whether the citizen has a fundamental right to carry on trade in liquor, upon referring to a large number of decisions, answered the issue in the negative and very succinctly summarized the legal position as under:-
"60.We may now summarize the law on the subject as culled from the aforesaid decisions.
(a) The rights protected by Article 19(1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, to be read along with the said qualifications. Even the rights guaranteed under the Constitutions of the other civilized countries are not absolute but are read subject to the implied limitations on them. Those implied limitations are made explicit by clauses (2) to (6) of Article 19 of our Constitution.
(b) The right to practise any profession or to carry on any occupation, trade or business does not extend to practising a profession or carrying on an occupation, trade or business which is inherently vicious and pernicious, and is condemned by all civilised societies. It does not entitle citizens to carry on trade or business in ::: Downloaded on - 15/04/2017 20:42:16 :::HCHP 30 activities which are immoral and criminal and in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public, i.e., res extra commercium, (outside commerce). There cannot be business in .
crime.
(c) Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commerce being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited.
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(d) Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, rt therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country. The State has, therefore, the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage, both because it is inherently a dangerous article of consumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purposes.
(e) For the same reason, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19(6) or even otherwise.
(f) For the same reason, again, the State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. The restrictions and limitations on the trade or business in potable liquor can again be both. under Article 19(6) or otherwise. The restrictions and limitations can extend to the State carrying on the trade or business itself to the exclusion of and ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 31 elimination of others and/or to preserving to itself the right to sell licences to do trade or business in the same, to others.
(g) When the State permits trade or business in the potable liquor with or without limitation, the .
citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business.
(h) The State can adopt any mode of selling the licences for trade or business with a view to maximise its revenue so long as the method adopted is not discriminatory.
(i) The State can carry on trade or business in of potable liquor notwithstanding that it is an intoxicating drink and Article 47 enjoins it to prohibit its consumption. When the State carries on such business, it does so to restrict and regulate production, supply and consumption of rt liquor which is also an aspect of reasonable restriction in the interest of general public. The State cannot on that account be said to be carrying on an illegitimate business.
(j) The mere fact that the State levies taxes or fees on the production, sale and income derived from potable liquor whether the production, sale or income is legitimate or illegitimate, does not make the State a party to the said activities. The power of the State to raise revenue by levying taxes and fees should not be confused with the power of the State to prohibit or regulate the trade or business in question. The State exercises its two different powers on such occasions. Hence the mere fact that the State levies taxes and fees on trade or business in liquor or income derived from it, does not make the right to carry on trade or business in liquor a fundamental right, or even a legal right when such trade or business is completely prohibited.
(k) The State cannot prohibit trade or business in medicinal and toilet preparations containing liquor or alcohol. The State can, however, under Article 19(6) place reasonable restrictions on the right to trade or business in the same in the interests of general public.
(l) Likewise, the State cannot prohibit trade or business in industrial alcohol which is not used as a beverage but used legitimately for ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 32 industrial purposes. The State, however, can place reasonable restrictions on the said trade or business in the interests of the general public under Article 19(6) of the Constitution.
.
(m) The restrictions placed on the trade or business in industrial alcohol or in medicinal and toilet preparations containing liquor or alcohol may also be for the purposes of preventing their abuse or diversion for use as or in beverage."
29. In view of the discussion made hereinabove as of well as law laid down by Hon'ble Apex Court in the judgments referred above, this Court has no hesitation to conclude that State Government is well within its rights to rt create Company/Corporation replacing the old system of issuance of licenses to the wholesalers as L-1 and as such no fault can be found with the same. Law laid down by the Hon'ble Apex Court makes it clear that no individual can claim to carry out liquor business as a fundamental right and it is the exclusive domain of the State Government to regulate the business of liquor trade by formulating/announcing policies from time to time.
30. Apart from the legal position, as has been discussed above, if we view this case from another angle, it can be safely concluded that respondents-State, by taking policy decision, has decided to set up Corporation/Company in terms of clause 2.38 of Chapter-II of Excise ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 33 Announcements for the year 2016-17. Needless to say that while making aforesaid Announcements Government/ .
Authority declares its Policy with regard to dealing with the particular subject and it has been repeatedly held by the Hon'ble Apex Court that Courts should desist from making interference in Policy decisions taken by the Government.
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31. In this regard reliance is placed upon Maharashtra State Board of Secondary and Higher Secondary rt Education and Another vs. Paritosh Bhupeshkumar Sheth and Others and Alpana V.Mehta vs. Maharashtra State Board of Secondary Education and Another, (1984)4 SCC 27, wherein the Hon'ble Supreme Court held:
"16. In our opinion, the aforesaid approach made by the High Court is wholly incorrect and fallacious. The Court cannot sit in judgment over the wisdom of the policy evolved by the Legislature and the subordinate regulation-
making body. It may be a wise policy which will fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or regulation will not render it ultra vires and the Court cannot strike it down on the ground that, in its opinion, it is not a wise or prudent policy, but is even a foolish one, and that it will not really serve to effectuate the purposes of the Act. The Legislature and its delegate are the sole repositories of the power to decide what policy should be pursued in relation to matters covered by the Act and there is no scope for interference by the Court unless the particular provision impugned before it can be said to suffer from any legal infirmity, in the sense of its being ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 34 wholly beyond the scope of the regulation- making power or its being inconsistent with any of the provisions of the parent enactment or in violation of any of the limitations imposed by the Constitution. None of these vitiating factors .
are shown to exist in the present case and hence there was no scope at all for the High Court to invalidate the provision contained in clause (3) of Regulation 104 as ultra vires on the grounds of its being in excess of the regulation-making power conferred on the Board. Equally untenable, in our opinion, is the next and last ground by the High Court for striking down clause (3) of Regulation 104 as unreasonable, namely, that it is in the nature of a bye-law and of is ultra vires on the ground of its being an unreasonable provision. It is clear from the scheme of the Act and more particularly, Sections 18, 19 and 34 that the Legislature has laid down in broad terms its policy to provide for rt the establishment of a State Board and Divisional Boards to regulate matters pertaining to secondary and higher secondary education in the State and it has authorised the State Government in the first instance and subsequently the Board to enunciate the details for carrying into effect the purposes of the Act by framing regulations. It is a common legislative practice that the Legislature may choose to lay down only the general policy and leave to its delegate to make detailed provisions for carrying into effect the said policy and effectuate the purposes of the Statute by framing rules/regulations which are in the nature of subordinate legislation. Section 3(39) of the Bombay General Clauses Act, 1904, which defines the expression 'rule' states: Rule shall mean a rule made in exercise of the power under any enactment and shall include any regulation made under a rule or under any enactment." It is important to notice that a distinct power of making bye-laws has been conferred by the Act on the State Board under Section 38. The Legislature has thus maintained in the Statute in question a clear distinction between 'bye-laws' and 'regulations'. The bye-laws to be framed under Section 38 are to relate only to procedural matters concerning the holding of meetings of State Board, Divisional Boards and the Committee, the quorum required, etc. More important matters affecting the rights of parties and laying down the manner in which the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 35 provisions of the Act are to be carried into effect have been reserved to be provided for by regulations made under Section 36. The Legislature, while enacting Sections 36 and 38, must be assumed to have been fully aware of the .
niceties of the legal position governing the distinction between rules/regulations properly so called and bye-laws. When the statute contains a clear indication that the distinct regulation- making power conferred under Section 36 was not intended as a power merely to frame bye- laws, it is not open to the Court to ignore the same and treat the regulations made under Section 36 as mere bye-laws in order to bring them within the scope of justiciability by of applying the test of reasonableness.
21. The legal position is now well-established that even a bye-law cannot be struck down by the Court on the ground of unreasonableness rt merely because the Court thinks that it goes further than "is necessary" or that it does not incorporate certain provisions which, in the opinion of the court, would have been fair and wholesome. The Court cannot say that a bye-law is unreasonable merely because the judges do not approve of it. Unless it can be said that a bye law is manifestly unjust, capricious, inequitable, or partial in its operation, it cannot be invalidated by the Court on the ground of unreasonableness. The responsible representative body entrusted with the power to make by laws must ordinarily be presumed to know what is necessary, reasonable, just and fair. In this connection we may usefully extract the following off-quoted observations of Lord Russell of Killowen in Kruse v. Johnson, (1898) 2 QB 91, 98, 99 (quoted in Trustees of the Port of Madras v. Adminchand Pyarelal, (1976)! SCR 721, 733) (SCC p.178, para 23):
(1) "When the Court is called upon to consider the byelaws of public representative bodies clothed with the ample authority which I have described, accompanied by the checks and safeguards which I have mentioned, I think the consideration of such bye-laws ought to be approached from a different standpoint.
They ought to be supported if possible. They ought to be, as has been said, 'benevolently interpreted' and credit ought to be given to those who have to administer ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 36 them that they will be reasonably administered."
"The learned Chief Justice said further that there may be cases in which it would be the duty .
of the court to condemn by-laws made under such authority as these were made (by a county council) as invalid because unreasonable. But unreasonable in what sense? If for instance, they were found to be partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men, the court might well say, 'Parliament never intended to give of authority to make such rules; they are unreasonable and ultra vires.' But it is in this and this sense only, as I conceive, that the question of reasonableness or unreasonableness can properly be regarded. A bye-law is not unreasonable merely because particular judges rt may think that it goes further than is prudent or necessary or convenient or because it is not accompanied by an exception which some judges may think ought to be there'.
" We may also refer with advantage to the well-known decision of the Privy Council in Slattery v. Naylor, (1988) 13 AC 446, where it has been laid down that when considering whether a bye-law is reasonable or not, the Court would need a strong case to be made against it and would decline to determine whether it would have been wiser or more prudent to make the bye-law less absolute or will it hold the bye-law to be unreasonable because considerations which the court would itself have regarded in framing such a bye-law have been over looked or reflected by its framers. The principles laid down as aforesaid in Kruse v. Johnson, (1898) 2 QB 91, 98, 99 and Stattery v. Naylor, (1988) 13 AC 446 have been cited with approval and applied by this Court in Trustees of the Port of Madras v. Aminchand Pyarelal & Ors.,(1976) 1 SCR 721, 733."
32. In Parisons Agrotech Private Limited and Another vs. Union of India and Others, (2015)9 SCC 657, the Hon'ble Supreme Court held:
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 37"14. No doubt, the writ court has adequate power of judicial review in respect of such decisions. However, once it is found that there is .
sufficient material for taking a particular policy decision, bringing it within the four corners of Article 14 of the Constitution, power of judicial review would not extend to determine the correctness of such a policy decision or to indulge into the exercise of finding out whether there could be more appropriate or better of alternatives. Once we find that parameters of Article 14 are satisfied; there was due application of mind in arriving at the decision rt which is backed by cogent material; the decision is not arbitrary or irrational and; it is taken in public interest, the Court has to respect such a decision of the Executive as the policy making is the domain of the Executive and the decision in question has passed the test of the judicial review.
15. In Union of India v. Dinesh Engg. Corpn., (2001)8 SCC 491, this Court delineated the aforesaid principle of judicial review in the following manner: (SCC pp.498-99, para 12) "12. There is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to the policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 38 material on record. ..... Any decision be it a simple administrative decision or policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a .
policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution."
16. The power of the Court under writ jurisdiction has been discussed in Asif Hameed. v. State of J&K, 1989 Supp.(2) SCC 364: 1 SCEC 358 in paras 17 and 19, which read as under:
of (SCC pp. 373-74) "17. Before adverting to the controversy directly involved in these appeals we may have rt a fresh look on the inter se functioning of the three organs of democracy under our Constitution. Although the doctrine of separation of powers has not been recognised under the Constitution in its absolute rigidity but the Constitution makers have meticulously defined the functions of various organs of the State. Legislature, executive and judiciary have to function within their own spheres demarcated under the Constitution. No organ can usurp the functions assigned to another.
The Constitution trusts to the judgment of these organs to function and exercise their discretion by strictly following the procedure prescribed therein. The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and executive, the two facets of people's will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits. It is the sentinel of democracy. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and executive. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed discipline of judicial restraint.
* * *
19. When a State action is challenged, the function of the court is to examine the action ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 39 in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions assigned under the Constitution and if not, the court must strike down the action. While doing .
so the court must remain within its self- imposed limits. The court sits in judgment on the action of a coordinate branch of the government. While exercising power of judicial review of administrative action, the court is not an appellate authority. The Constitution does not permit the court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these of authorities do not transgress their constitutional limits or statutory powers."
17. The aforesaid doctrine of separation of power and limited scope of judicial review in rt policy matters is reiterated in State of Orissa v. Gopinath Dash, (2005) 13 SCC 495 : (SCC p.497, paras 5-7) "5. While exercising the power of judicial review of administrative action, the Court is not the Appellate Authority and the Constitution does not permit the Court to direct or advise the executive in the matter of policy or to sermonise qua any matter which under the Constitution lies within the sphere of the legislature or the executive, provided these authorities do not transgress their constitutional limits or statutory power. (See Asif Hameed v. State of J&K; 1989 Supp (2) SCC 364 and Shri Sitaram Sugar Co. Ltd. v. Union of India; (1990) 3 SCC 223). The scope of judicial enquiry is confined to the question whether the decision taken by the Government is against any statutory provisions or it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution. Thus, the position is that even if the decision taken by the Government does not appear to be agreeable to the Court, it cannot interfere.
6. The correctness of the reasons which prompted the Government in decision-making taking one course of action instead of another is not a matter of concern in judicial review and the Court is not the appropriate forum for such investigation.
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 407. The policy decision must be left to the Government as it alone can adopt which policy should be adopted after considering all the points from different angles. In the .
matter of policy decisions or exercise of discretion by the Government so long as the infringement of fundamental right is not shown the courts will have no occasion to interfere and the Court will not and should not substitute its own judgment for the judgment of the executive in such matters. In assessing the propriety of a decision of the Government the Court cannot interfere even if a second view is possible from that of the Government."
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33. The Hon'ble Apex Court in Census Commissioner and Others vs. R.Krishnamurthy, (2015)2 SCC 796 held:
rt "23. The centripodal question that emanates for consideration is whether the High Court could have issued such a mandamus commanding the appellant to carry out a census in a particular manner.
24. The High Court has tried to inject the concept of social justice to fructify its direction.
It is evincible that the said direction has been issued without any deliberation and being oblivious of the principle that the courts on very rare occasion, in exercise of powers of judicial review, would interfere with a policy decision.
25. Interference with the policy decision and issue of a mandamus to frame a policy in a particular manner are absolutely different. The Act has conferred power on the Central Government to issue Notification regarding the manner in which the census has to be carried out and the Central Government has issued Notifications, and the competent authority has issued directions. It is not within the domain of the Court to legislate. The courts do interpret the law and in such interpretation certain creative process is involved. The courts have the jurisdiction to declare the law as unconstitutional. That too, where it is called for. The court may also fill up the gaps in certain spheres applying the doctrine of constitutional silence or abeyance. But, the courts are not to plunge into policy making by adding something ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 41 to the policy by way of issuing a writ of mandamus. There the judicial restraint is called for remembering what we have stated in the beginning. The courts are required to understand the policy decisions framed by the .
Executive. If a policy decision or a Notification is arbitrary, it may invite the frown of Article 14 of the Constitution. But when the Notification was not under assail and the same is in consonance with the Act, it is really unfathomable how the High Court could issue directions as to the manner in which a census would be carried out by adding certain aspects. It is, in fact, issuance of a direction for framing a policy in a specific manner.
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26. In this context, we may refer to a three- Judge Bench decision in Suresh Seth V. Commr., Indore Municipal Corporation, (2005)13 SCC 287, rt wherein a prayer was made before this Court to issue directions for appropriate amendment in the M.P. Municipal Corporation Act, 1956 so that a person may be debarred from simultaneously holding two elected offices, namely, that of a Member of the Legislative Assembly and also of a Mayor of a Municipal Corporation. Repelling the said submission, the Court held: (SCC pp.288-89, para 5) "In our opinion, this is a matter of policy for the elected representatives of people to decide and no direction in this regard can be issued by the Court. That apart this Court cannot issue any direction to the legislature to make any particular kind of enactment. Under our constitutional scheme Parliament and Legislative Assemblies exercise sovereign power to enact laws and no outside power or authority can issue a direction to enact a particular piece of legislation. In Supreme Court Employees' Welfare Assn. v. Union of India, (1989)4 SCC 187 (SCC para 51) it has been held that no court can direct a legislature to enact a particular law. Similarly, when an executive authority exercises a legislative power by way of a subordinate legislation pursuant to the delegated authority of a legislature, such executive authority cannot be asked to enact a law which it has been empowered to do under the delegated legislative authority. This view has been reiterated in state of J & K v A.R. Zakki,1992 Supp(1) SCC 548. In A.K. Roy v. Union of India, (1982)1 SCC 271it was held that no mandamus can be issued to enforce an Act which has been passed by the legislature."
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 4234. Reliance is placed upon the judgment of the Hon'ble Supreme Court in State of Kerala and Another vs. B.Six .
Holiday Resorts Private Limited and Others, (2010)5 SCC 186, wherein it has been held:
"22. Where the rules require grant of a licence subject to fulfillment of certain eligibility criteria either to safeguard public interest or to maintain efficiency in administration, it follows of that the application for licence would require consideration and examination as to whether the eligibility conditions have been fulfilled or whether grant of further licences is in public interest. Where the applicant for licence does not have a vested interest for grant of licence rt and where grant of licence depends on various factors or eligibility criteria and public interest, the consideration should be with reference to the law applicable on the date when the authority considers applications for grant of licences and not with reference to the date of application.
27. It is true that in Kuldeep Singh case, (2006)5 SCC 702, there were no statutory rules and what was considered was with reference to a policy. But the ratio of the decision is that where licence sought related to the business of liquor, as the State has exclusive privilege and its citizens had no fundamental right to carry on business in liquor, there was no vested right in any applicant to claim a FL-3 licence and all applications should be considered with reference to the law prevailing as on the date of consideration and not with reference to the date of application. Whether the issue relates to amendment to Rules or change in policy, there will be no difference in principle. Further the legal position is no different even where the matter is governed by statutory rules, is evident from the decisions in Hind Stone, (1981)2 SCC 205 and Howrah Municipal Corporation, (2004)1 SCC 663.
28. Having regard to the fact that the State has exclusive privilege of manufacture and sale of liquor, and no citizen has a fundamental right to carry on trade or business in liquor, the applicant did not have a vested right to get a licence. Where there is no vested right, the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 43 application for licence requires verification, inspection and processing. In such circumstances it has to be held that the consideration of application of FL-3 licence should be only with reference to the rules/law .
prevailing or in force on the date of consideration of the application by the excise authorities, with reference to the law and not as on the date of application. Consequently the direction by the High Court that the application for licence should be considered with reference to the Rules as they existed on the date of application cannot be sustained.
Re: Question (ii) of
29. The applicants for licence submitted that Rule 13(3) contemplates FL-3 licences being granted on fulfillment of the conditions stipulated therein; and the newly added proviso, by barring grant of new licence had the effect of rt nullifying the main provision itself. It was contended that the proviso to Rule 13(3) added by way of amendment on 20.2.2002 was null and void as it went beyond the main provision in Rule 13(3) and nullified the main provision contained in Rule 13(3).
30. Rule 13(3) provides for grant of licences to sell foreign liquor in Hotels (Restaurants). It contemplates the Excise Commissioner issuing licences under the orders of the State Government in the interest of promotion of tourism in the State, to hotels and restaurants conforming to standards specified therein. It also provides for the renewal of such licences.
The substitution of the last proviso to Rule 13(3) by the notification dated 20.2.2002 provided that no new licences under the said Rule shall be issued. The proviso does not nullify the licences already granted. Nor does it interfere with renewal of the existing licences. It only prohibits grant of further licences. The issue of such licences was to promote tourism in the State. The promotion of tourism should be balanced with the general public interest. If on account of the fact that sufficient licences had already been granted or in public interest, the State takes a policy decision not to grant further licences, it cannot be said to defeat the Rules. It merely gives effect to the policy of the State not to grant fresh licences until further orders. This is evident from the explanatory note to the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 44 amendment dated 20.2.2002. The introduction of the proviso enabled the State to assess the situation and reframe the excise policy.
31. It was submitted on behalf of the State .
Government that Rule 13(3) was again amended with effect from 1.4.2002 to implement a new policy. By the said amendment, the minimum eligibility for licence was increased from Two- star categorization to Three-Star categorization and the ban on issue of fresh licences was removed by deleting the proviso which was inserted by the amendment dated 20.2.2002. It was contended that the amendments merely implemented the policies of the government from of time to time. There is considerable force in the contention of the State. If the State on a periodical re-assessment of policy changed the policy, it may amend the Rules by adding, modifying or omitting any rule, to give effect to rt the policy. If the policy is not open to challenge, the amendments to implement the policy are also not open to challenge. When the amendment was made on 20.2.2002, the object of the newly added proviso was to stop the grant of fresh licences until a policy was finalized.
32. A proviso may either qualify or except certain provisions from the main provision; or it can change the very concept of the intendment of the main provision by incorporating certain mandatory conditions to be fulfilled; or it can temporarily suspend the operation of the main provision. Ultimately the proviso has to be construed upon its terms. Merely because it suspends or stops further operation of the main provision, the proviso does not become invalid. The challenge to the validity of the proviso is therefore rejected.
33. In view of the above, the appeals filed by the State are allowed in part and the appeals filed by the applicants for licences are dismissed, subject to the following clarifications:
(i) If any licences have been granted or regularized in the case of any of the applicants during the pendency of this litigation, on the basis of any further amendments to the Rules, the same will not be affected by this decision;
(ii) If any licence has been granted in pursuance of any interim order, the licence shall continue till the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 45 expiry of the current excise year for which the licence has been granted.
(iii) This decision will not come in the way of any fresh application being made in accordance with .
law or consideration thereof by the State Government."
35. Reliance is also placed upon Arun Kumar Agrawal vs. Union of India and Others, (2013)7 SCC 1, wherein the Hon'ble Apex Court held:
of "42. Matters relating to economic issues, have always an element of trial and error, so long as a trial and error are bona fide and with best intentions, such decisions cannot be questioned rt as arbitrary, capricious or illegal. This Court in State of M.P. and others v. Nandlal Jaiswal and others (1986) 4 SCC 566 referring to the Judgment of Frankfurter J. in Morey vs. Dond 354 US 457 held that (Nandlal Jaiswal case, SCC p.605, para 34) "34. .....we must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call "trial and error method" and, therefore, its validity cannot be tested on any rigid "a priori" considerations or on the application of any straight jacket formula."
43. In Metropolis Theatre Co. v. State of Chicago 57 L Ed 730 the Supreme Court of the United States held as follows:
".....The problem of government are practical ones and may justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void....."
44. In LIC v. Escorts Ltd. and others (1986) 1 SCC 264 this Court held that (SCC p.344, para
102) ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 46 "102. .....The Court will not debate academic matters or concern itself with intricacies or trade and commerce."
The Court held that (SCC p.344, para 102) .
"102. ....When the State or its instrumentalities of the State ventures into corporate world and purchases the shares of a company, it assumes to itself the ordinary role of shareholder, and dons the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reasons when it seeks to change the management by a resolution of the company, like any other of shareholder."
36. Now, adverting to another question that, "Whether any vested right has accrued in rt favour of the present petitioners after depositing of Rs.6 lacs for renewal of their licenses or whether after receipt of amount licensees/petitioners are entitled to continue their business for whole year i.e. 2016-17 or not?
37. Before proceeding to decide the issue, referred above, it would be apt to refer to relevant provisions of the Announcements of Excise and Allotments/Tender for the year 2016-17:
"Announcements of Excise and Allotments/Tender for the year 2016-17.
Excise and Taxation Department Himachal Pradesh To be made at the time of allotment/tender process of the Excise Licenses for the retain vends of country liquor, foreign liquor and country fermented liquor in Himachal Pradesh for the Financial Year 2016-17 CHAPTER-1 : GENERAL ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 47 "1.1 The liquor licenses, shall be granted subject to the provisions of the Himachal Pradesh Excise Act, 2011 and the Rules framed thereunder from time to time. A licensee shall also be himself responsible .
for fulfilling any other obligation under any other law or Rule not specifically mentioned hereunder in these terms and conditions."
CHAPTER-1I : MAIN PROVISIONS OF THE PROCEDURE FOR BIDDING THROUGH INVITING COMPETITIVE TENDERS:
of "2.1 The following licenses will be granted/allotted by way of competitive tenders for the year 2016-17 on the terms and conditions as prescribed in the succeeding paras:-
rt (i) A license in form L-2 for retail vend of foreign liquor for sale to the public. The licensee will also be eligible to sell foreign liquor in wholesale to the licensees in form L-3, L-4, L-5, L- 3A, L-4A, L-5A, L-12A, L-12B, and L-12C for consumption off the premises.
(ii) A license in form L-14 for retail vend of country liquor for consumption on and off the premises. Such licensees are also allowed to sell foreign liquor in the rural areas.
(iii) A license in form L-14-A for retail vend of country liquor for consumption off the premises.
They are also allowed to sell foreign liquor in rural areas.
(iv) a license in form L-20B for manufacture and retail sale of Country Fermented Liquor (Jhol)."
"2.38 A Company will be set up under the Himachal Pradesh Excise and Taxation Department which shall be exclusively responsible for the procurement of all kinds of liquor i.e. Country Liquor, IMFS, Beer, Wine and RTD etc. In the State and shall further supply liquor so procured as wholesale-licensee to all the retail vends i.e. L-2, L-14 & L-14A etc. during the year 2016-
17. After the Company starts its operation, the retail licensees shall lift liquor i.e. Country Liquor, IMFS, Beer, Wine and RTD ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 48 etc. only from the Company's licensed and prescribed premises."
38. Bare perusal of clause 2.38, as reproduced above, .
clearly suggests that while making Excise Announcements for the year 2016-17, decision was taken by the respondents to set up Company under H.P. Excise and Taxation Department for the procurement of all kinds of liquor. Moreover, careful of perusal of aforesaid provisions suggests that it was made clear to all concerned that after the Company starts its rt operation, the retail licensees shall lift liquor from the Company's licensed and prescribed premises, meaning thereby, all concerned were put to notice by the respondents that Company would be set up by the respondent-
Department itself for liquor procurement of all kinds of liquor including IMFS and retail licensees would be under obligation to lift liquor from the Company's licensed and prescribed premises.
39. It also emerges from the record that Company;
namely; `HPBL' has been created by respondents in terms of clause 2.38, as reproduced hereinabove, and thereafter vide Circular No.HPBL/LSP/2016-17/12682, dated 2nd June, 2016, Liquor Sourcing Policy 2016-17 have been circulated, wherein Manufactures/Suppliers/Importers are requested to ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 49 take note of the procedure prescribed in the Circular (Annexure P-6).
.
40. Perusal of both these Polices of 2016-17 suggests that a procedure in detail has been prescribed for procuring liquor Indian Made Foreign Liquor etc. to the HPBL for subsequent delivery to the buyers.
of
41. Since much emphasis has been laid on the issue of renewal fee, allegedly accepted by the respondents after 31.3.2016, rt it would be profitable to peruse relevant provisions of Excise Act, 2011 dealing with Licenses, Permits and Passes.
"CHAPTER - IV LICENSES, PERMITS AND PASSES
27. Grant of leases of manufacture, sale etc.--
(1) The State Government may lease to any person, competent to contract, on payment of such sum in addition to excise duty or countervailing duty, on such conditions and for such period, as it may deem fit, the right-
(a) of manufacturing or of supplying by wholesale, or of both, or
(b) of selling by wholesale or by retail, or
(c) of storing for manufacture or sale, any country liquor, foreign liquor, beer, wine spirit within any specified area.
(2) The State Government may lease to any person, competent to contract, on payment of such fee and on such conditions as the Financial Commissioner may direct under section 28, the right of manufacturing and possessing for home consumption-
(a) country liquor by distillation from specified fruits or grains in tribal areas, or
(b) country fermented liquor from grains in any specified area.::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 50
Explanation.-- For the purpose of this sub-section 'tribal area' or 'specified area' shall mean such area which stand notified as 'tribal area' or 'notified area' under the .
repealed Punjab Excise Act, 1914, on the date of commencement of the Himachal Pradesh Excise Act, 2011.
(3) The Financial Commissioner may grant to a lessee, a license for manufacturing or supplying the liquor in accordance with the terms of such lease as may be approved by the State Government under sub-section (1); provided that Collector may grant to a lessee, such licenses for sale of liquor by wholesale or by retail as the Financial Commissioner may prescribe.
of (4) The Collector may grant to a lessee under sub-section (2) a permit in such form as the Financial Commissioner may prescribe.
rt
28. Fees and other conditions for grant of licenses, permits and passes.--(1) Every license, permit or pass, under this Act, shall be granted--
(a) on payment of such fees, if any,
(b) in such form and containing such particulars,
(c) subject to such restrictions and on such
conditions, and
(d) for such period, as the Financial Commissioner
may direct.
(2) For the purposes of sub-section (1), the power of the Financial Commissioner to issue directions shall include the power to direct the licensee of a distillery, brewery, winery or warehouse to-
(a) provide free accommodation to the Excise Officer concerned at or near the licensed premises, failing which to pay to the State Government the rent and other charges for such accommodation as may be fixed by the Financial Commissioner; and
(b) pay to the State Government the costs, charges and expenses, including salaries and allowances of such Excise Officers, which the State Government may incur in connection with the supervision of such distillery, brewery, winery or warehouse.
(3) The authority granting a license under this Act, may require the licensee to give such security for the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 51 observance of the terms of his license, or to make such deposit in lieu of security, as such authority may direct.
(4) Subject to the rules made by the Financial Commissioner, the Collector may grant licenses for the .
sale of any liquor within a district:
Provided that a license for sale in more than one district shall be granted by the Financial Commissioner only.
(5) Before any license is granted in any year for the retail sale of liquor for consumption on any premises which have not been so licensed in the preceding year, the Collector shall take such measures as the State Government may prescribe, as may best enable him to of ascertain local public opinion in regard to the licensing of such premises.
29. Power to cancel or suspend licenses etc.-- Subject to such restrictions as the State Government may prescribe, the authority granting rt any lease, license, permit or pass under this Act, may cancel or suspend it--
(a) if it is transferred or sublet by the holder thereof without the permission of the said authority; or
(b) if any excise duty or countervailing duty or, other fee payable by the holder thereof is not duly paid; or
(c) in the event of any breach by the holder of such lease, license, permit or pass or by his servants, or by any one acting on his behalf with his express or implied permission, of any of the terms or conditions of such license, permit or pass; or
(d) if the holder thereof is convicted of any offence punishable under this Act or the Himachal Pradesh Value Added Tax Act, 2005, the Central Sales Tax Act, 1956 or the Himachal Pradesh Prevention of Specific Corrupt Practices Act, 1983 or of any cognizable and non-bailable offence, or any offence punishable under the Narcotic Drugs and Psychotropic Substances Act, 1985, or under the Trade and Merchandise Marks Act, 1958 or under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 or of any offence punishable under sections 482 to 489 ( both inclusive ) of the Indian Penal Code, 1860 or any offence referred to in section 135 of the Customs Act, 1962 ; or
(e) where a license, permit or pass has been granted on the application of the grantee of a lease under this Act, on the request in writing of such grantee; or
(f) at will, if the conditions of the license, permit or pass provides for such cancellation or suspension."
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 5242. Section 27 of the Excise Act, 2011, deals with grant of leases of manufacturer and sale etc. Section 27(1), .
authorized State Government to give lease/contract for manufacture/supply by wholesale on payment of sum fixed, which would be in addition to excise duty.
43. Respondents with a view to regulate the liquor of business has also formulated H.P. Liquor Licensing Rules, 1986, wherein, mode of grant and authority empowered to grant and renew as well as fee has been prescribed, which rt reads as follows:
"THE HIMACHAL PRADESH LIQUOR LICENCE RULES, 1986 ______________________________________________________ PRELIMINARY (A) These rules may be called the Himachal Pradesh Liquor Licence Rules, 1986 and shall extend to whole of Himachal Pradesh.
(B) These rules shall come into force at once.
A .Class of licences and authorities empowered to grant and renew.
1. There shall be the following classes of licences. Their mode of grant and authorities to grant and renew them shall be noted against each:-
Form Nature Mode of Authority
grant empowered to
Grant Renew
1 2 3 4 5
1-Foreign Liquor
L1 Wholesale vend of Fixed fee Collector Collector
foreign liquor to the
trade only
L1-A Storage of foreign liquor Fixed fee Collector Collector
in bond combined with
wholesale vend of
foreign liquor to the
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP
53
trade only.
L1-B Wholesale vend of Fixed fee Financial Financial
foreign liquor to L1 Commissioner Commissioner
vends only
L1-BB Wholesale vend of Fixed fee Financial Financial
.
imported foreign liquor Commissioner Commissioner
from outside India to
L1, L2, L3, L4, L5, L4-A,
L5-A, L10-BB, L 12-A, L
12-B and L12-C vends
only
B. Regulations governing the grant and renewal of licences.
2. The authority given by these rules to grant and renew of licences is, in each case subject to the restrictions contained in the Intoxicants Licence and Sale Orders as to the localities in which licences may be granted and the number of licences which may be granted in any local area, and to such reservations from the general superintendence of the Financial rt Commissioner as the State Government may notify under section 8 of the Punjab Excise Act as applied to Himachal Pradesh.
3. Every license shall be granted to a certain licensee in respect of certain premises.
4. A license may only be granted to :-
(a) an individual;
(b) a body incorporated under the Indian Companies Act;
(c) a society registered under the Himachal Pradesh Co-operative Societies Act;
(d) a partnership or firm;
(e) Hindu undivided family;
(f) Government Department ; and
(g) a Government Undertaking.
5. When a licence is granted to a Company or Society or Hindu undivided family or Government Department or Government Undertaking referred to in clauses (b), (c), (e), (f) and (g) above it must show the name of an individual as agent acting on behalf of the licensee, who is amenable in full to the Criminal Courts in India. On the application of the Company or Society or Hindu undivided family or Government Departments or Government Undertaking, the representative licensee may be changed by the authority competent to grant or renew the licence as the case may be.
6. When a licence is granted to a partnership or firm not incorporated under any Act, all the individuals comprising the partnership of firm should be specified on the licence.
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 547. On the application in writing of all the original partners, a partner may at any time be added in case of renewable licences, by the authority competent to renew the licence and in case of licences granted by auction or negotiation by the Collector, provided the proposed partner is eligible under the .
intoxicants Licence and Sale Orders or these rules, in which case he shall be responsible for all obligations incurred or to be incurred under the licence during the period of its currency as if it had originally been granted or renewed in his name.
8. On the application in writing of all the original partners, a partner may at any time be removed, in case of renewable licences , by the authority competent to renew the licence and in case of licences granted by auction or negotiation by the Collector.
of
9. A licence granted to a partnership or firm is determined by the dissolution of the partnership or firm subject to the liability of the partners jointly and severally, for any loss caused to Government thereby and for the performance of all obligations rt to Government incurred by the partnership or firm.
10. A licence is said to be renewed when the competent authority allows it to continue after the period of its expiry to the same licensees in respect of the same premises; and whenever a licence has determined by reason of surrender, cancellation or order of non-renewal or other causes, or where it is proposed to issue a licence in respect of premises or persons not previously licenced, a new licence is required:
Provided--
(a) a new licence is not required on account of the addition of or removal of a partner on the application of all the partners or the change of representative of a company or society;
(b) a licence continued to the legal representative of a deceased licensee for the remaining period of the licence shall not be deemed to be a new licence;
(c) if the premises of a licence are changed during the period of its currency, the authority competent to grant the licence may direct that the licence may be continued for the remaining period of the term on the existing fee;
(d) a licence may be transferred by the authority competent to grant it for the remainder of its currency to a new licensee.
11. All applications for the grant, extension or renewal of licences, which required the orders of the Excise Commissioner under the Intoxicants Licence and Sale Orders or these rules should be received through proper channels in the Excise Commissioner's office before the end of December, each year;
::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 55Provided that applications for the grant of licences in forms L-3 , L-3 -A, L-4, L-4-A, L-5, L-5-A or L-12-B may, in pungent case where they do not adversely affect any existing licence be submitted at any time in the year.
.
12(1) Every application for renewal of a licence, other than a licence governed by rule11, shall be submitted to the Excise Officer incharge of the district by the 31st January, each year. The Excise Officer-in-charge of the district shall lay before the Collector by the 10th day of February each year a list of all licences requiring renewal. The list shall be accompanied in the case of licences on the assessed fee, by a certificate of sales during the current upto 31st December; in the case of bottling licence by a similar certificate showing proof litres bottled upto 31st day of December. Except with the special of sanction of the Excise Commissioner, no order for renewal or non-renewal shall be made after 28th day of February in respect of licences for the following financial year :
Provided that no order for renewal of license in form L-1 rt shall be made if the licensee is in arrears of Excise and Sales Tax dues and undues the applicant furnishes alongwith the application for renewal a certificate to the following effect duly issued in his favour by the Assessing Authority of the District."
44. As per Section 27 of the Excise Act power lies with the State Government to grant lease to any person, competent to contract, on payment of amount which would be in addition to excise duty or countervailing duty. Section 27(b) provides for grant of lease/license for liquor in selling wholesale or by retail.
45. Section 28, deals with conditions for grant of licenses, permit and passes. As per Section 28(1), license, permit, pass can be granted on payment of fee.
46. Section 29 of the Excise Act, 2011 gives the powers to the Government to accept or suspend the licenses in terms of Sections 27 and 28, but such cancellation or ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 56 suspension can be done in certain exigencies as referred to in Section 29 of the Excise Act from clauses (a) to (f).
.
47. Section 32 of the Excise Act deals with the power to withdraw licenses, permits or passes on expiration of 15 days' notice in writing to do so, which reads as follows:
"32. Power to withdraw license etc.--(1) Whenever the authority which granted a license, permit or pass under this Act considers that such license, permit or pass should be of withdrawn for any cause other than those specified in section 29, it may,-
(a) withdraw the license, permit or pass on the expiration of fifteen days' notice in writing of its intention to do so; or rt
(b) withdraw any such license, permit or pass forthwith without notice.
(2) If any license, is withdrawn forthwith without notice under clause (b) of sub-section (1), there shall be paid to the licensee such sum, by way of compensation, as the Financial Commissioner may direct.
(3) When a license, permit or pass is withdrawn under this section, any fee paid in advance or deposit made by the licensee in respect thereof shall be refunded to him, after deducting the amount, if any, due to the State Government."
48. In Chapter-V of Announcements of Excise Allotments/Tender for the year 2016-17 provision has been made for fixation of licence fee i.e. Rs.6 lacs. The relevant extract reads as follows:-
"CHAPTER V: DUTIES AND FEES ETC.
5.1 FIXED FEE.
The fixed license fee and renewal fee for various vends of Foreign Liquor, country Liquor and Beer per license for the year 2016-17 shall be as under:::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 57
S.No. Nature of License Fixed License fee and Renewal fee (in Rupees) per annum.
1 L-1 (Wholesale vend Rs.6.00 lacs excluding such .
of Foreign Liquor, other fee as may be Indian Made Foreign prescribed.
Spirit/Beer for trade
only.)
2 L-1-A (Storage of Rs.87,000/- excluding such
Foreign Liquor in other fee as may be
bond.) prescribed."
... ........ ....... ......... ....... ........ .....
... ........ ....... ......... ....... ........ ....."
of
49. Learned counsel representing the petitioners, while rt advancing their arguments, heavily relied upon Sections 28, 29 and 32 of the Act and vehemently argued that decision, if any, to accept or suspend the license issued in terms of Sections 27 and 28 of the Excise Act could only be taken in terms of Section 29 of the Excise Act, wherein specific provision for cancellation or suspension is provided that too in exigencies as referred in clause 8 (a) to (f) of Section 29 of the Excise Act, 2011. Learned counsel also argued that under Section 32(1)(a) of the Excise Act, Government has power to withdraw license, permit or passes after expiry of 15 days notice in writing, but since no notice, whatsoever, has been issued to the present petitioners and as such any action to discontinue the license of the petitioners after 14.6.2016 is in complete violation of the Rules as well ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 58 as principle of natural justice and as such the same cannot be allowed to sustain.
.
50. After careful perusal of the provisions of the Act, referred hereinabove, as well as submissions made on behalf of the petitioners, this Court, after examining the issue in whole is of the view that the provisions contained in Sections of 27, 28, 29 and 32 of the Excise Act are not applicable in the present case. Permits, licenses and passes, if any, are granted under Sections 27 and 28 of the Excise Act on the rt payment of fee, whereas Section 29 of the Excise Act gives power to the State Government to accept or cancel/suspend the licenses etc. in certain exigencies as prescribed in clauses
(a) to (f) supra.
51. In the present case, admittedly, as it stands proved on record, petitioners have been granted licences/permits to run the wholesale business up to 31st March, 2016, which was further extended on period to period basis, but definitely not beyond 31st May, 2016. Though, as emerges from the record, petitioners deposited an amount of Rs.6 lacs on account of renewal fee but there is no record, whatsoever, to suggest that competent authority envisaged under the Excise Act, renewed their licenses after 31st March, ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 59 2016. Mere depositing of amount will not be sufficient to prove that their licenses stand renewed till 31st March, 2017.
.
Respondents in their reply have categorically stated that no permit beyond 31st March, 2016 have been issued and thereafter only passes on period to period basis have been granted to the L-1 licencees. Since respondents have not of renewed their licenses beyond 31st March, 2016, there is no question of invoking Sections 27, 28, 29 and 32 of the Excise Act in the present case.
rt
52. Section 29 deals with cancellation or suspension of licenses but in the instant case there is/was no requirement for the State Government to either cancel or suspend the licenses because admittedly after 31st March, 2016 no license, whatsoever, has been renewed. Similarly Section 32 is not applicable in the present case simply for the reasons that there is nothing on record to suggest that the Government withdrew the licenses granted to the petitioners.
Rather, as emerges from the record, beyond 31st March, 2016 licenses of the petitioners were never renewed and as such, once it has been proved on record that no license has been granted to the petitioners for the year 2016-17, there is/was no occasion for the respondents-State to withdraw or cancel ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 60 or suspend the same. Therefore, the plea raised by the petitioners that there is violation of Sections 27, 28, 29 and .
32 of the Excise Act deserves to be rejected being baseless.
53. In the present cases, petitioners have heavily relied upon the fact that an amount of Rs.6 lacs on account licence fee has been deposited by them which as per of petitioners have been duly received/accepted by the respondents-State. As per petitioners accepting of aforesaid amount as a license fee for renewal of their licenses has rt created vested right in their favour to continue as L-1 licensee till whole year i.e. March, 2017.
54. To test the aforesaid submission/contention raised on behalf of the petitioners, this Court while examining the record had an occasion to peruse receipt/challan whereby amount as referred above has been allegedly deposited by the petitioner. Careful perusal of the receipts made available on record itself suggests that it is nothing but challans filled by the petitioners themselves for depositing amount in the Treasury i.e. State Bank of India. It also emerges from the aforesaid challans/receipts that amount stands deposited in the Bank as it bears the stamp of the Bank. Perusal of aforesaid challans/receipts nowhere ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 61 indicates that licence has been renewed for a year i.e. up to 31st March, 2017. Since petitioners in support of their .
aforesaid contentions have also placed on record receipts of the previous years, this Court had an opportunity to have a glance over the same. Bare perusal of the receipts pertaining to previous years made available on record by the petitioners of suggests that in each and every receipt while accepting renewal fee, Excise authorities have specifically prescribed the period for which licence is granted.
rt
55. In the present case, there is no mention with regard to any period, rather, as has been observed above, it is only a challan submitted by licensees for depositing license fee. Admittedly, petitioners have not placed any documents, whatsoever on the record, which could be suggestive of the fact that their licenses were renewed till 31st March, 2017.
Rather, it has been their own case that they have been given permits on period basis. Respondents-State in its reply as well as in arguments having been made by learned Advocate General has brought to the notice of the Court that no license, whatsoever, has been granted to the petitioners for whole year after taking license fee, to the contrary all the L-1 licensees have been given/granted permits on month to ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 62 month basis. Perusal of the challan/hand receipt placed on record suggests that petitioners voluntarily deposited the .
money in the bank for renewal of their licenses but infact competent authority nowhere granted licenses to them in terms of Sections 27 & 28 of the Excise Act.
56. Perusal of the record made available to the Court of clearly suggests that the respondents have not issued permit/license for whole year after 31st March, 2016 in anticipation of creation of Company/Corporation in terms of rt clause 2.38 of Chapter-II of the Excise Announcements and petitioners were issued permit to carry out their business on monthly basis. Hence, it cannot be said that petitioners were actually granted L-1 licence to carry on their business till March, 2017. As has been observed above, there is no mention of period, whatsoever on the receipt annexed with the petitioners from where it can be informed that they have been granted license, if any, till March, 2017.
57. More over, bare reading of clause 2.38 as reproduced hereinabove clearly suggests that it was made known to everybody that as and when Corporation/Company starts its business, retailer licensees would be lifting liquor from the Corporation directly and as such there was no ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 63 occasion, whatsoever for the petitioners to deposit fee of Rs.
Six lac for renewal of their licenses and as such no right .
much less vested right can be claimed to have accrued in favour of the petitioners at this stage. Rather, at this stage, this Court is constraint to draw adverse inference that the petitioners voluntarily deposited an amount of Rs.6 lacs to of create right/equity in their favour purposely to defeat the decision of the Government, which was in offing pursuant to Announcements made by the Government.
rt Moreover, mere depositing/accepting of amount by authority for renewal of license will not create any right unless it is shown/proved that after depositing/accepting amount, authority renewed the license, petitioner cannot claim any right.
58. Mere depositing/accepting of amount towards renewal of fee of license would not amount to renewal of license in any manner and it will not create any right as is being claimed by the petitioners.
59. In this regard reliance is placed upon Delhi Development Authority v. M/s.Anant Raj Agencies Pvt.Ltd., AIR 2016 SCC 1806, wherein the Hon'ble Apex Court held:
"23. After careful examination of the material facts and evidence on record it is clear that on the basis of the admitted facts, the lease of the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 64 property in question is not renewed by the DDA in favour of the original lessee, in accordance with clause III(b) of the lease deed dated 06.01.1951. From a reading of the said lease deed it becomes very clear that the original lease .
period was initially for a period 20 years, which period expired on 10.08.1968 as the lease period commenced w.e.f. 11.08.1948. No doubt, the original lessee availed his option of the renewal of lease as provided in the lease deed by making a request to the DDA vide his letter dated 23.2.1967, but the same was not acceded to by the DDA. Before expiry of the original lease period, notices were issued by the office of DDA on 09.02.1968 and 16.02.1968 to the original of lessee alleging certain breaches of the terms and conditions (extracted above) of the lease deed. The original lessee was given 15 days time to remedy the said breaches. Though the original lessee made several replies to the aforesaid rt notices but he had failed to rectify the said breaches notified to him. Therefore, the DDA vide notice dated 01.09.1972 decided not to renew the lease of the property in question and terminated the lease in respect of the same, though in law the same was not even required on the part of the DDA in view of the conditions of the lease deed as after the expiry of the original period of lease it stands terminated by efflux of time.
24. The concurrent findings recorded by the courts below declaring the termination notice dated 01.09.1972, terminating the lease of the property in question granted in favour of the original lessee, served by the DDA to the original lessee, as illegal, arbitrary and without jurisdiction on the erroneous assumption of the non-existent fact that there has been a renewal of the lease for the reason that the original lessee applied for the renewal of the lease within time as stipulated in the clause III(b) (supra) of the lease deed and has been paying rent for the property in question to the office of the DDA. In our view, the said conclusion of the courts below is erroneous in law as it is contrary to the Clause III (b) of the lease deed and also Sections 21(1) and 22 of the Delhi Development Act, 1957 (for short the "DD Act") read with Rule 43 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 (for short the "Nazul Land Rules"). In this regard, it would be ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 65 necessary for this Court to refer to the decision relied upon by the learned counsel for the appellant, in the case of Shanti Prasad Devi & Anr. v. Shankar Mahto & Ors., (2005)5 SCC 543, wherein this Court, while interpreting Section .
116 of the Transfer of Property Act, 1882 with regard to its applicability and the effect of "holding over", held that it is necessary to obtain assent of the landlord for continuation of lease after the expiry of lease period and mere acceptance of rent by the lessor, in absence of agreement to the contrary, for subsequent months where lessee continues to occupy lease premises cannot be said to be conduct signifying assent on its part. The relevant paras 18 and 19 of (para 17 and 18 of AIR) of the case are extracted below :-
"18. We fully agree with the High Court and the first appellate court below that on expiry of period of lease, rt mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying "assent" to the continuance of the lease even after expiry of lease period. To the legal notice seeking renewal of lease, the lessor gave no reply. The agreement of renewal contained in clause (7) read with clause (9) required fulfilment of two conditions: first, the exercise of option of renewal by the lessee before the expiry of original period of lease and second, fixation of terms and conditions for the renewed period of lease by mutual consent and in absence thereof through the mediation of local mukhia or panchas of the village. The aforesaid renewal clauses (7) and (9) in the agreement of lease clearly fell within the expression "agreement to the contrary"
used in Section 116 of the Transfer of Property Act.
Under the aforesaid clauses option to seek renewal was to be exercised before expiry of the lease and on specified conditions.
19. The lessor in the present case had neither expressly nor impliedly agreed for renewal. The renewal as provided in the original contract was required to be obtained by following a specified procedure i.e. on mutually agreed terms or in the alternative through the mediation of Mukhias and Panchas. In the instant case, there is a renewal clause in the contract prescribing a particular period and mode of renewal which was "an agreement to the contrary" within the meaning of Section 116 of the Transfer of Property Act. In the face of specific clauses (7) and (9) for seeking renewal there could be no implied renewal by "holding over" on mere acceptance of the rent offered by the lessee. In the instant case, option of renewal was exercised not in accordance ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 66 with the terms of renewal clause that is before the expiry of lease. It was exercised after expiry of lease and the lessee continued to remain in use and occupation of the leased premises. The rent offered was accepted by the lessor for the period the lessee .
overstayed on the leased premises. The lessee, in the above circumstances, could not claim that he was "holding over" as a lessee within the meaning of Section 116 of the Transfer of Property Act."
(emphasis supplied by this Court) To the same effect, the learned counsel has further, rightly placed reliance on another decision of this Court in the case of Sarup Singh Gupta v. S. Jagdish Singh & Ors., (2006)4 SCC 205, wherein this Court of has held as under:-
"8...In our view, mere acceptance of rent did not by itself constitute an act of the nature envisaged by Section 113, Transfer of Property Act showing an rt intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted the rent which was being paid to him by the tenant. It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by the courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended..."
(emphasis supplied by this Court)
60. Learned Senior Counsel representing the petitioners argued that after acceptance of renewal fee by the respondents, vested right accrued in favour of the petitioners and petitioners' legitimately expecting that they have to carry out L-1 whole sale license till March, 2017 mobilized ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 67 resources and as such any action of respondents to change the existing system in mid way cannot be held justifiable. In .
this regard it is again reiterated at the cost of repetition that petitioners being old players of the game were fully aware that the respondents are contemplating to create/form company/Corporation to replace the old system of L-1 of licencee and hence this Court is unable to accept the aforesaid contention put forth on behalf of the petitioners that mere acceptance of renewal money has created vested rt right in their favour and they are entitled to invoke the principle/doctrine of legitimate expectation. In the present case, as clearly emerges from the record petitioners were aware from day one after Excise Announcements for the year 2016-17 that respondents-State is in the process of replacing the old system and especially when they were not granted license for whole year and only short term passes/permit were issued to petitioners as L-1 licennee to carry out their business and as such they cannot be allowed to draw/extract any benefit by depositing of fee, if any. As has been observed above, the petitioners purposely deposited the amount on account of renewal fee to create equity and right in their favour but mere depositing of fee will not create any right in ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 68 their favour, as has been laid down in the judgment referred above.
.
61. As far as accrual of vested rights and contention with regard to legitimate expectation, put forth by the petitioners, is concerned, the reliance is placed on Kuldeep Singh vs. Govt.of NCT of Delhi, (2006)5 SCC 702, wherein of the Hon'ble Apex Court held:
"14. Mr. Gopal Subramanaium, learned Additional Solicitor General appearing on behalf rt of the Respondent, on the other hand, submitted:
(i) The Appellants do not have any fundamental right to trade in liquor.
(ii) The State having adopted a policy decision, this Court should not exercise its power of judicial review interfering therewith. In any event, no case that the policy decision suffers from any illegality, irrationality or procedural impropriety having been made out nor any malice having been attributed in regard to the policy decision, this Court should not interfere with the judgment of the High Court.
(iii) The parties in whose favour licenses have been granted were necessary parties to the writ petitions and in their absence the writ petitions could not have been entertained.
25. It is, however, difficult for us to accept the contention of the learned Senior Counsel, Mr. Soli J. Sorabjee that the doctrine of 'legitimate expectation' is attracted in the instant case. Indisputably, the said doctrine is a source of procedural or substantive right. (See R. v. North and East Devon Health Authority, ex parte Coughlan 2001 Q.B. 213) But, however, the relevance of application of the said doctrine is as to whether the expectation was legitimate. Such legitimate expectation was also required to be determined keeping in view the larger public interest. Claimants' perceptions would not be relevant therefor. The State actions ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 69 indisputably must be fair and reasonable. Non - arbitrariness on its part is a significant facet in the field of good governance. The discretion conferred upon the State yet again cannot be exercised whimsically or .
capriciously. But where a change in the policy decision is valid in law, any action taken pursuant thereto or in furtherance thereof, cannot be invalidated.
33. The question again came up for consideration in Howrah Municipal Corpn. and Others v. Ganges Rope Co. Ltd. and Others [(2004) 1 SCC 663] wherein this Court categorically held: (SCC p.680 para 37) of "The context in which the respondent Company claims a vested right for sanction and which has been accepted by the Division Bench of the High Court, is not a right in relation to rt "ownership or possession of any property" for which the expression "vest" is generally used. What we can understand from the claim of a "vested right" set up by the respondent Company is that on the basis of the Building Rules, as applicable to their case on the date of making an application for sanction and the fixed period allotted by the Court for its consideration, it had a "legitimate" or "settled expectation" to obtain the sanction. In our considered opinion, such "settled expectation", if any, did not create any vested right to obtain sanction. True it is, that the respondent Company which can have no control over the manner of processing of application for sanction by the Corporation cannot be blamed for delay but during pendency of its application for sanction, if the State Government, in exercise of its rule-making power, amended the Building Rules and imposed restrictions on the heights of buildings on G.T. Road and other wards, such "settled expectation" has been rendered impossible of fulfillment due to change in law. The claim based on the alleged "vested right" or "settled expectation" cannot be set up against statutory provisions which were brought into force by the State Government by amending the Building Rules and not by the Corporation against whom such "vested right"
or "settled expectation" is being sought to be enforced. The "vested right" or "settled expectation" has been nullified not only by the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 70 Corporation but also by the State by amending the Building Rules. Besides this, such a "settled expectation" or the so-called "vested right" cannot be countenanced against public interest and convenience which are sought to .
be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon."
62. Consequently, in view of the detailed discussion made hereinabove as well as law laid down by the Hon'ble Apex Court, we are unable to accept the contentions of advanced on behalf of the petitioners that the decision of the respondents-State in setting up Corporation/Company for rt carrying out whole sale liquor business of L-1 and L-13 is bad in law. Exposition of law as discussed above has left no room/scope for this Court to deliberate upon the issue at hand. As of today, it is a law of land that State has an exclusive domain/rigtht to control the Trade of Liquor and in this regard it is free to make Rules and Regulations to regulate the business. It is also crystal clear from the principles laid down by the Hon'ble Apex Court in the judgments referred above that no individual, whatsoever, can claim the right to the business in Liquor Trade as a fundamental right. As far as accrual/creation of vested right in favour of the petitioners by depositing/accepting of renewal fee by then, as they have been unsuccessful to demonstrate that an amount of Rs.6 lacs deposited by them ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 71 for renewal of their licenses because there is no document on record to show that authority concerned renewed their .
licenses till 31st March, 2017. Petitioners have also failed to show any provisions of law or law laid down by the Highest Court of law that merely by depositing renewal fee, their licensees for carrying out L-1 business gets automatically of renewed.
63. In the present cases where admittedly after 31st March, 2016 passes/permits, if any, were being issued on rt period basis, petitioners have not placed on record any documents which could convince this Court that their licenses were renewed after depositing of fee in the Treasury.
At the cost of repetition it is once again highlighted that in all receipts previously issued by respondents at the time of taking money for renewal, period of renewal has specifically been mentioned. But in the present case there is none.
Moreover, as has been held by the Apex Court that nobody/individual can claim to do business of liquor as a fundamental right. Hence, no scope whatsoever is left with the Court to deliberate upon the issue of right, if any. Hence, in view of the detailed discussion made hereinabove this Court sees no infirmity, illegality in the decision taken by the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 72 respondents-State to replace the old system of issuance of L-
1 licences by creating Corporation/Company in terms of .
clause 2.38 of Chapter-II of the Excise Announcements for the year 2016-17, This Court further also sees no illegality whatsoever in the decision of the respondents-State, whereby all the licensees of L-1 license have been ordered to be of discontinued w.e.f. 15th June, 2016 and as such both the aforesaid decisions of State cannot be interfered with by this Court in exercise of its powers under Articles 226/227 of the rt Constitution of India.
64. It may be noticed that during final arguments held on 17.6.2016, learned Advocate General, appearing for the respondents-State, while rebutting the submissions made on behalf of the petitioners, had made available copy of Notification regarding amendment made in H.P. Liquor License Rules, 1986 (detail whereof is available in para-17 supra). Though, no specific challenge has been laid to the aforesaid Rules, 1986 by the petitioners but counsel representing the petitioners specifically submitted/argued that in the absence of amendment in the aforesaid Rules, 1986, no Corporation/Company could be set up by the respondents. Accordingly, in view of the submissions made ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 73 by the counsel representing the petitioners vis-à-vis amendment carried out in the aforesaid Rules, 1986, this .
Court, before proceeding on the merits, inquired from the petitioners, whether they intend to amend their petitions in light of amendments carried out in the Rules, 1986 or not.
But counsel representing the petitioners insisted that of petitions may be heard without there being any specific challenge to the amended Rules. Accordingly, since no specific challenge, whatsoever, has been laid to the amended rt Rules, 1986, this Court has restrained itself from giving findings/observations qua the same.
65. However, while dealing with the another contention/submission put forth on behalf of the petitioners that conditions stipulated in Annexures P-3, P-4 and P-5 whereby all the L-1 licencees have been directed to exhaust their stock by 15th June, 2016, this Court is of the view that the aforesaid stipulations made in annexure P-3 is definitely harsh and if it is allowed to sustain, great prejudice would be caused to the existing L-1 licence holders. Though, as has been held above, it is the domain of the respondents-State to regulate the business of liquor but respondents-State being welfare State is also expected to appreciate/acknowledge the ::: Downloaded on - 15/04/2017 20:42:17 :::HCHP 74 difficulties which would be faced by the petitioners as other similarly situate persons in the process of Implementation of .
Annexures P-3, P-4 and P-5. Petitioners as well as other similar situate persons admittedly have been engaged in liquor business as L-1 licensees and certainly in that capacity they after mobilizing their resources must have invested huge of amount. It is bounden duty of the State to protect their interest also before giving effect to Annexures P-3, P-4 and P-
5. Moreover, conditions put forth by the respondents-State rt that all L-1 licensees should exhaust their stock before 14th June, 2016 appears to be impracticable because admittedly after 14th June, 2016 petitioners as well as other L-1 licencees would not be entitled to carry out their business as L-1 licensee, meaning thereby they will not able to sell their stock to retail licensees. Since they have already procured their stock from manufacturer directly by paying required taxes, it would be impracticable for them to sell their stock to the manufacturer.
66. Hence, in view of the observations made hereinabove, this Court is of the view that the aforesaid condition made in Annexure P-3 by respondents is definitely harsh and would cause great prejudice and financial ::: Downloaded on - 15/04/2017 20:42:18 :::HCHP 75 hardship to the petitioners, as such same needs be rectified/modified. This Court, while appreciating the .
aforesaid genuine concerns/problems put forth by the petitioners and with a view to mitigate hardship of petitioners, and to balance the equities, deems it proper in the facts and circumstances of the cases to pass following of directions:-
Respondents-State in the process of giving effect to Annexures P-3, P-4 and P-5 may offer rt grace period to the existing L-1 licensees/ petitioners to enable them to exhaust their stocks, if any.
Or Respondent-State may itself consider purchasing stock lying with the L-1 licencees instead of procuring the same from manufacturer directly;
Or Allow petitioners as well as L-1 licensees to sell their existing stock to retail licensees.
Or Apart from above, respondents may refund an amount of Rs.6 lacs, if any, deposited on account of renewal fee for whole year, after making necessary adjustments, if any.::: Downloaded on - 15/04/2017 20:42:18 :::HCHP 76
58. In view of the observations and discussions made hereinabove, all these petitions are disposed of, accordingly.
.
59. Interim direction, if any, is vacated. All miscellaneous applications are disposed of.
A copy of this judgment be placed on each of the connected files.
(Tarlok Singh Chauhan)
of
Judge
28th June, 2016 (Sandeep Sharma)
(aks) rt Judge
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