R. P. SETHI, J, J. ( 1 ) ALLEGING corruption, favouritism, nepotism and mala fides against respondents-3 and 4, the petitioner herein has prayed for the issuance of appropriate writ or direction striking down the Karnataka excise (Sale of Indian and Foreign Liquor) (Amendment) Rules, 1997 as being illegal and unconstitutional and for a direction to the respondent-State to enforce the 1989 amendment rules. It is further prayed that a direction be issued for appointing an authority such as C. B. I. , to probe in detail to find out the total loss caused to the respondent - State by way of evasion of payment of excise duties, ceases, sales tax on the sale of "seconds" in IMFL which were allegedly sold without payment of excise duty cesses and sales tax during the period from December 1985 when the Supreme Court is stated to have affirmed the 1989 Amended Rules, till date by non-implementation of the 1989 Rules. It is contended that the difference be directed to be recovered personally from respondent-3 and 4. The petitioner has also sought for the prosecution of respondents-3 and 4 and other persons found to be responsible for alleged losses of revenue by way of evasion of excise duty and sales tax on the sale of IMFL including those of the distillaries. This petition has beer initiated in public interest by a former Minister of the State of karnataka. Respondents-3 and 4 are the former and present Chief ministers of the State. The petitioner and respondents-3 and 4 are admittedly political rivals belonging to different political parties in the state of Karnataka. ( 2 ) THE business of IMFL is stated to be conducted by distilleries in the private sector owned by allegedly influential liquor lobby. The process of manufacture, distribution and sale of I. M. F. L. is under the control of the State Government. To effectively collect excise duties, the central duty, health cess, educational cess and the sales tax, the State Government has posted the staff of Excise Department in several distilleries to ensure that each bottle of liquor manufactured in such distillaries does not go out without payment of the requisite duty and tax. Depending upon the manufacturing capacities of distillaries, the raw material in the form of rectified spirit is fixed and issued by the State Government to different distillaries. Depending upon the manufacturing capacities of distillaries, the raw material in the form of rectified spirit is fixed and issued by the State Government to different distillaries. It is alleged that despite apparent control exercised by the respondent-State government, the distillaries used to despatch lorry loads of IMFL bottles to different wholesalers of the State either by hood-winking the staff of the Excise Department or in complicity and collusion with them by illegal and corrupt means, without payment of the requisite excise duty and other cesses. The permits are also required to be issued to prevent the sale of "seconds". Having taken into consideration the nature of the trade, the way in which payment of excise duty, sales tax etc. , was being evaded by the distilleries and wholesale dealers, the respondent - State is stated to have deemed fit to amend the relevant State Excise Rules in the year 1989. Respondent - State appointed respondent No. 2 - Company, a public undertaking, as the sole distributor of IMFL with the declared object of having effective control over the whole trade in the IMFL in order to ensure that non-duty paid liquor did not enter the market. Consequently, the 2nd respondent arranged for infrastructure in the state of Karnataka and outside, adequate staff and mobilised various other resources to discharge its obligation as sole distributor. Feeling aggrieved of the 1989 Amendment Rules, several distillaries who were allegedly indulging in corrupt practices generating non-duty paid liquor challenged the validity of the said amendment Rules in w. P. Nos. 16876 and 16877/89, 16878 - 16882/89, 16967 to 16971/ 89, 16894 to 16988/89, 17000 to 17004/89, 17005 to 17009/89, 17103 to 17107/89 and 17632/89 in this Court which were vehemently and effectively resisted by respondents-1 and 2. Copy of the statement of objections filed by respondent No. 1 has been annexed with this petition as Annexure-B. The aforesaid writ petitions were dismissed by this Court vide a judgment in the case of jagadale AND SONS vs STATE OF KARNATAKA by the Division bench of this Court. Some of the writ petitioners filed special leave petitions in the Supreme Court. Special Leave was granted on 20th november 1989 and a conditional order of stay was passed by the apex Court. The Civil appeals were ultimately dismissed by the supreme Court on 15. 12. 1985,vide its judgment in the case of M/s. KHODAY DISTILLARIES LTD. Some of the writ petitioners filed special leave petitions in the Supreme Court. Special Leave was granted on 20th november 1989 and a conditional order of stay was passed by the apex Court. The Civil appeals were ultimately dismissed by the supreme Court on 15. 12. 1985,vide its judgment in the case of M/s. KHODAY DISTILLARIES LTD. vs STATE OF KARNATAKA. It is contended that after the Judgment of the Apex Court, the Rules of 1989 were not given effect to by the then Government headed by respondent No. 3. Similarly, respondent No. 4 also did not take any step for implementation of the Rules upheld by the Hon'ble Supreme court. It is submitted that respondents-3 and 4 allegedly colluded with the various distillaries and the liquor manufacturers by collecting huge amount from them with the result that huge losses to the State exchequer were caused. The losses are assessed at one Crore of rupees per day. It is alleged that with the illegal amounts recovered from the distillaries and manufacturers of the liquor, respondent No. 3 fought the Election and ultimately succeeded in becoming the Prime minister of India. ( 3 ) ONE Sri D. Nemirajaiah is stated to have filed a Writ Petition No. 25827/96 by way of 'public Interest Litigation' praying for the issuance of a direction to the State Government and its Officers to enforce the 1989 Amended Rules. During the pendency of the said writ Petition, the Excise Commissioner is stated to have issued a letter dated 9. 12. 1996 and a Memo of even date to all concerned to give effect to the aforesaid amended rules. However, in the Statement of Objections filed by the respondent - State, it was submitted that his Excellency the Governor of Karnataka in his address to the Joint session of the State Legislature on 19. 2. 1996 announced that the state has been seriously considering the desirability of re-introducing the prohibition in the State in view of the provisions of Article 47 enshrined in para-IV of the Constitution of India dealing with the directive Principles of the State Policy, the 1989 amended Rules were thereafter decided to be amended to restore the position prevailing prior to the amended rules. Draft rules, called "the karnataka Excise (sale of Indian and Foreign Liquor) (Amendment) rules, 1996 were published inviting objections. Draft rules, called "the karnataka Excise (sale of Indian and Foreign Liquor) (Amendment) rules, 1996 were published inviting objections. The 2nd respondent is stated to have filed detailed objections annexed with the petition as Annexure-L It is contended that after complying with the empty formalities, the respondent - State vide its notification in No. FD 325 edc 95 dated 12. 2. 1997 published in the Karnataka Gazette dated 13. 2. 1997 has enforced the Karnataka Excise (Sale of Indian and foreign Liquor) (Amendment) Rules, 1997 (hereinafter mentioned as 'impugned rules') giving effect to the same at once. ( 4 ) THE amendment rules, 1997 are the subject matter of controversy in this petition. As earlier noticed, the challenge is thrown to the rules on the ground of alleged corruption, favouritism, nepotism and mala fides made against respondents-3 and 4. It is submitted that the impugned Rules have taken away the effect of the judgment of this Court and the Hon'ble Supreme Court of India. The action of the respondents is termed to be tainted with corrupt motives. After justifying their action of amending the Rules in 1989, the respondents are stated to be estopped from changing their position by issuing the impugned rules. It is contended that the impugned rules have been promulgated with the oblique motive of facilitating evasion of excise duties by the distillarers and the manufacturers of the liquor in the State of Karnataka. The impugned rules are termed to be a method facilitating the sale of "seconds" in IMFL. It is contended that as despite amendment in 1989, the respondent-State failed to implement the same, their acts of commission and omission are deemed to be mala fide and against public interest. Reliance is also placed upon the 26th Report of the Committee on public accounts constituted by the Karnataka State Legislature for the year 1986-87; copy of the report is annexed to the Writ Petition as Annexure-P, respondent No. 4 is stated to be personally interested in the matter as his sons are allegedly involved in the trade of IMFL liquor. He is alleged to have bulldozed the earlier decision with mala fide motives, corrupt practices which are tainted with the vice of arbitrariness and unreasonableness. According to the petitioner, excise duty, cess and other taxes are evaded at least to the extent to 50 per cent of the total production of IMFL by various distillaries. He is alleged to have bulldozed the earlier decision with mala fide motives, corrupt practices which are tainted with the vice of arbitrariness and unreasonableness. According to the petitioner, excise duty, cess and other taxes are evaded at least to the extent to 50 per cent of the total production of IMFL by various distillaries. By enforcing the impugned ruies, the respondent - State is alleged to have been put in to huge loss of revenue resulting adversely the public interests requiring interference in issuance of appropriate direction by this court. The loss occasioned to the second-respondent, a public undertaking company, is claimed to be in crorers of rupees. Such a loss is stated to be the corresponding profits and benefits to the liquor manufacturers and distillers. The acts of commission and omission attributed to the respondent-3 and 4 are alleged to be amounting to the violation of the fundamental rights, being discriminatory and against the public policy. ( 5 ) RESISTING the petition, the respondents-1, 2 and 5 in their reply have submitted that the petition being devoid of merits was liable to be dismissed. No provision of law in any statute or rule made thereunder is stated to have been violated by the respondents. It is admitted that sub-rule 11 of Rule 3 of the Karnataka Excise ' (Sale of indian and Foreign Liquor) Rules, 1968 was substituted with effect from 13. 9. 1989 empowering the State to issue transport licence to such company owned or controlled by the State Government. It is not denied that pursuant to the amendment of the Rules in 1989, the State Government appointed respondent No. 2 as the sole. distributor authorising it to procure the liquor from the manufacturing units and arrange its sale. The factum of the validity of the said rule being challenged in this Court and the Hon'ble Supreme Court of india is also conceded. Despite R-2 becoming the sole distributor and enjoying the monopoly of liquor trade, the state Government declares to have considered the matter afresh and decided to do away with the monopoly in liquor trade. Such trade was decided to be made open in order to have competition to earn more revenue to the exchequer which is termed to be one of the main objects of the karnataka Excise Act and the Rules made thereunder. Such trade was decided to be made open in order to have competition to earn more revenue to the exchequer which is termed to be one of the main objects of the karnataka Excise Act and the Rules made thereunder. It is declared that the object to do away with the monopoly in the liquor trade was resorted to in the scenario of economic liberalisation policy. Draft rules were issued which were published in the extra-ordinary gazette on 30. 12. 1996. After consideration of the objections filed thereto, the Government finalised the draft rules and published the amended rules in the gazette on 13. 2. 1997. The allegation of the Government losing heavily on account of the impugned rules has vehemently been denied. It is contended that, "in the changed circumstances of economic liberalisation, under the amended Rules, 1997, the government has restored the position prevailed earlier to the substitution to sub-Rule 11 of Rule 3 with effect from 13. 9. 1989. That the Government has always empowered to change its policy if that policy is beneficial to the Government to earn more revenue to the exchequer. Such a policy decision of the Government cannot be questioned by anybody much less the petitioner and cannot be the subject matter of the Writ Petition. That the Government has changed its policy in its wisdom in order to earn more revenue and to do away with the monopoly in liquor trade. " The impugned Rules are stated to be not in any way contrary to the aims and objects of the karnataka Excise Act and the Rules made thereunder. No loss is stated to have been caused to the state Revenue as alleged by the petitioner. The allegations of the sons of respondent No. 4 being engaged in the liquor trade or possessing a commercial unit at kariganuru in Chennagiri taluk have also been denied. It is submitted that the impugned Rules were passed after consideration of the objections of respondent No. 2 as well. ( 6 ) FOR obvious reasons the respondent No. 2 has chosen not to file any objections in this Writ Petition. The learned Counsel appearing for it however referred to and relied upon the objections filed by R-2 in response to the notification inviting objections before amending the impugned Rules. ( 6 ) FOR obvious reasons the respondent No. 2 has chosen not to file any objections in this Writ Petition. The learned Counsel appearing for it however referred to and relied upon the objections filed by R-2 in response to the notification inviting objections before amending the impugned Rules. The aforesaid objections are annexed with the petition as annexure-L. It was stated by R-2 that it had a total strength of 745 Officers and employees. In addition to that, 109 employees were working on deputation in the company on account of the enormous work load. The Excise Rules are stated to have been amended in the year 1989 with a view to see that the commodities manufactured by the manufacturers were duly accounted to the State government with a view to see that no part of the goods escaped the liability of payment of sales tax and excise duty as per law. R-2 was decided to be appointed as a sole distributor with a view to check the sale of non-duty paid liquor popularly known as "seconds". It was contended that by experience it had been found that the check imposed by the Department of Excise at the distillery level was not sufficient or adequate for the purposes of preventing evasion of sales tax and excise duty. A policy decision was taken to ensure that the entire commodity manufactured by the manufacturers were sold only to the sole distributor, the respondent No2, who in turn had the authority to sell the same to intending wholesalers at the rates prescribed by the manufacturers themselves. With the laudable object as noted herein above, the State Government is stated to have issued five notifications on 13. 9. 1989 amending the excise Rules. Clause 11 was introduced to Rule 3 which provided for issue of a licence by the Excise Commissioner for the whole of the State or any part thereof to deal with products of all distilleries or breweries of wineries in the State or to import liquor from outside the State. Such distributor was obliged to establish not less than one depot in each District within the State as may be specified by. the Excise Commissioner in that behalf. The licence of sole distributorship was to be issued only to a company owned and controlled by the State Government or such company as the State government may specify. Such distributor was obliged to establish not less than one depot in each District within the State as may be specified by. the Excise Commissioner in that behalf. The licence of sole distributorship was to be issued only to a company owned and controlled by the State Government or such company as the State government may specify. The distributor licence fee was fixed at rs. 5 lacs and a further sum of Rs. 10,000/- per depot per annum. The Rules were proposed to be brought into force on 30. 9. 1989. However, manufacturers and others preferred writ petitions in this court challenging the constitutional validity of the aforesaid Rules. The operation of the Rules was stayed vide Court Order dated 27. 9. 1989 Ultimately a Division Bench of this Court vide its judgment dated 13. 11. 1989 upheld the constitutional validity of the amended rules. All writ petitions were dismissed with the result that the interim orders stood vacated. On the same day, the Commissioner of Excise issued necessary licence to R-2 as sole distributor after receiving the licence fee. Before enforcing the Rules, R-2 was asked by the state Government to provide the necessary infrastructure to shoulder the responsibilities of sole distributorship all over the State. Accordingly the R-2 established 22 depots in the State of Karnataka and deputed its staff to each one of the depots so that the business of the distributor could be effectively carried out. Licence in favour of R-2 was issued on 13. 11. 1989. Not satisfied with the judgment of this Court the distilleries, manufacturers and others filed various special leave petitions in the Hon'ble Supreme Court. The Apex Court vide its order dated 20. 11. 1989 passed a conditional interim order of stay which made it clear that the manufacturers or wholesalers and others in the trade could go through R-2 to sole distributor to carry on their transactions or carry on their transactions directly without going to R-2. It was however made clear that such manufacturers, wholesalers and others shall maintain accounts regularly in respect of the transactions carried out by them and submit the copy of the statement to R-2 every month besides furnishing the same to the Commissioner of Excise. It was however made clear that such manufacturers, wholesalers and others shall maintain accounts regularly in respect of the transactions carried out by them and submit the copy of the statement to R-2 every month besides furnishing the same to the Commissioner of Excise. Such a provision was made to ensure that in case their appeals were dismissed, they be held liable to compensate R-2 by way of commission which it would have got otherwise in the absence of a stay order. All such appeals were dismissed on 15. 12. 1995 vide the judgment of the Apex Court as already noted. While dismissing the appeals the Supreme Court directed the appellants therein to submit account to R-2, if not already submitted, within eight weeks from the date of the judgment and pay necessary compensation within 12 weeks from that date. The appellants submitted their accounts and paid the commission to R-2 amounting to Rs. 7. 75 crores. Despite judgment of the Apex Court the other manufacturers have not so far paid the commission. In the objections they further submitted that "we may be permitted to state that if M. S. I. L. is given a chance to function as a Sole Distributor as per the amended law which was uphold by the Court, we are sure that M. S. I. L. will make a tremendous progress and make maximum achievement in the field of checking the evasion of non-duty paid liquor otherwise known as seconds in the sale of Indian made Foreign liquor, beer, wine and Fenny in the State of Karnataka as well as in the field of export which will have a bearing on directly augmenting the income of the State by way of Sales Tax on Excise Duty. In the process, M. S. 'i. L. also will be richly beneficited by way of commission fixed by the State Government at 5% in respect of sales effected within the State of Karnataka and 0. 5% in respect of exports. " The proposed amendment was termed to be a bolt from the blue to the employees of R-2 which was reported to have been received with shock and surprise. The proposed amended Rules were stated to be having the effect of taking away the guarantees and the safeguards provided against the leakage of the State revenue vide earlier Rule 3 (11) of the Rules. The proposed amended Rules were stated to be having the effect of taking away the guarantees and the safeguards provided against the leakage of the State revenue vide earlier Rule 3 (11) of the Rules. It was submitted that the proposed amendment of the Rules was highly objectionable, not in the interest of the State and the employees of R-2. The R-2 claims to have taken the premises on lease from the Karnataka State Warehousing corporation and the private bodies for which they were paying Rs. 40 lacs per year as rent. They further submitted that they had paid a sum of Rs. 15 lacks as advance rent to the owners; Rs. 10 lacs for telephones and Rs. 2 lacs on installation of computers was also stated to have been spent by R-2. They further stated to have employed 25 personnel as security staff. Rs. 5 lacs was stated to be the expenditure incurred by R-2 on its transferred employees. In addition to that MSIL had to bear the establishment charges of the excise officials numbering 80 which came to around Rs. 40 lacs per year. At the time of the filing of the objections, the stocks held by the msil in various depots was worth Rs. 25 crorers, the sale of which had yet to take place. After its appointment as distributor, the respondent No. 2 claims to have carried on business in liquor and despite conditional interim order of the Hon'ble Supreme Court, carried on the turnover of the business in liquor which was stated to be as under:- ( 21 ) IN D. Satyanarayana's case (supra), the Full Bench of Andhra Pradesh High Court declined to dismiss the petition merely on the ground of the petitioner being a politician after being satisfied that there were large scale violation of abuse of power by the Chief minister. Constitutional and statutory violations were writ large. In that case, the petitioner who was a public worker and also a political leader had alleged various violations of laws and constitutional provisions by the Chief Minister, in support of which, he filed an affidavit running into 193 pages. Prayer was made for issuance of a writ of quo warranto against the Chief Minister declaring him to be an usurper of the Office. Prayer was made for issuance of a writ of quo warranto against the Chief Minister declaring him to be an usurper of the Office. He had also prayed for issuance of appropriate direction to the Central Government to appoint a Judicial commission under the Commission of Enquiry Act, 1952 for enquiring into the misdeeds of corruption and abuse of authority by the first respondent. The Court found that there did not exist any material which could justify the petitioner being held as a busy body or interloper. He was found to have ignited the jurisdiction of the Court for exercising its powers to uphold the constitution and the rule of law without claiming any personal relief for himself. It was also found that the petitioner therein was not making any political mileage. The court further held : "it will, therefore, be seen that merely because a question has a politicai colour, the Court cannot fold its hands in despair and declare judicial hands off". So long as a question arises whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the Court. Indeed it would be its constitutional obligation to do so. It is necessary to assert in the clearest terms, particularly in the context of recent history, that the Constitution is Supreme lex, the paramout law of the land, and there is no department or branch of Government above or beyond it. Every organ of government, be it the executive or the legislature or the judiciary, derives its authority from the Constitution and it has to act within the limits of its authority. No one howsoever highly placed and on authority howsoever lofty can claim that it shall be the sole judge of the extent of its power under the Constitution or whether its action is within the confines of such power laid down by the constitution. This Court is the ultimate interpreter of the constitution and to this Court is assigned the delicate task of determining what is the power conferred on each branch of government, whether it is limited, and if so, what the limits are and whether any action of that branch transfresses such limits. It is for this Court to uphold the constitutional values and to enforce the constitutional limitations. It is for this Court to uphold the constitutional values and to enforce the constitutional limitations. The test regarding the determination of what constitutes political question as laid down in Baker vs carr ( (1962) 369 US 186) was approvingly referred to by bhagwati. J. , (as he then was), the aforesaid case. The American doctrine regarding the adjudication of political questions was accepted by Venkataramaiah, J. , in his separate Judgment. In v. R. Sreerdma Rao vs Telugu Desam, A Political Party, AIR 1983 andh. Pra. 96, the technicalities of locus did not stand in the way of this Court from inquiring into the piea raised by the president of a Political party called "sarvodaya Congress" opposing the grant of election symbol to Telugu Desam Party on the ground that it "preached Chauvinism, propagates cessionist tendencies. " Our learned brother, P. A. Choudary, J. , very realistically observed : "considering the fact that the issues raised by the writ petitioner are of paramount public important to the democratic functioning of our society and taking into account the recent trends of law funnelled by several Court decisions freely upholding the right to sue as inhering even in those whose proprietary rights or personal interests are not directly affected, I reject the preliminary objection of Sri NT. Rama Rao to the maintainability of this Writ Petition. The writ petitioner claims to be the President of a political party called "sarvodaya Congress" and it undoubtedly appears to me that he is interested in a clean public life. He is not a mere interloper. " ( 22 ) A Division Bench of this Court in Muniswamy Reddy's case (supra) declined to dismiss the Writ Petition filed in public interest on the ground that the persons approaching the Court had their own cause to serve particularly when it was found that the proceedings were not intended to take a political vengenance against the respondents. Dishonest and illegal action cannot be shelved on the technicalities of locus standi which fact was found to be farfetched. ( 23 ) IN the instant case, though violation alleged is of serious nature affecting the public at large yet the bona fides of the petitioner in approaching the Court are not free from doubt. Dishonest and illegal action cannot be shelved on the technicalities of locus standi which fact was found to be farfetched. ( 23 ) IN the instant case, though violation alleged is of serious nature affecting the public at large yet the bona fides of the petitioner in approaching the Court are not free from doubt. It is not denied that the law is social auditor and any citizen can ignite the jurisdiction of this Court for creative measures, but no person having vested rights in the ultimate result be permitted to utilize the institution of the judiciary for his personal or political gains. The institution of the judiciary cannot and should not be permitted to be utilized by the politicians for the purposes of enforcement or propagation of their policies or put in obstacles in the enforcement of the policies of their political opponents. Simpliciter matter of policies, being of political nature, can be taken to the public at large for the purposes of getting their verdict. In such matters, the constitutional Courts may decline to interfere unless it is found that the constitutional violations were of such nature which required action notwithstanding that the person igniting the Court has a vested interest. In such a case, while exercising the jurisdiction, it can be held and declared by the Court that the action was being taken, prosecuted and concluded by the Court under its power vesting in it under Articles 226 and 227 of the Constitution and that such person initiating the jurisdiction be not given any credit which may wrongly be utilized by him for his political purposes or used against his opponents to harm them in their public and political life. Under the normal circumstances, political rivals should not be permitted to file cases in profusion under the well recognised and patent name of PIL, The petitioner in this case has been found to have initiated the proceedings by wearing the mask of the patent name of P. I. L. , for the purposes of his political interests and persona! publicity. He appears to have acted as proxy for his political party which is admitted to be a rival party being effective contender to the State power presently held by respondent- 3 and 4. The issue raised though important, yet the manner in which it is projected is more political than legal. publicity. He appears to have acted as proxy for his political party which is admitted to be a rival party being effective contender to the State power presently held by respondent- 3 and 4. The issue raised though important, yet the manner in which it is projected is more political than legal. The petitioner has been proved to be an interloper in the case. He is shown to have approached this Court with intentions which cannot be termed to be bona fide. The petition, at his instance, appears to be for vindicating his personal grievances and political vengeance. The petitioner is proved to have not approached this court with clean hands, clean heart and clean objectives. Even though, it is contended that the rules of 1989 were not given effect to by respondents-3 and 4, yet the petitioner has not assigned any reason for not projecting such an issue till the impugned rules were enforced. He himself had been the Minister in the Government which had enforced the 1989 Rules but not acted upon it despite there being no circumstances justifying for not giving effect to those Rules. We are not satisfied with the after thought argument that as there was a stay of the Hon'ble supreme Court, the petitioner - or the Government led by his political party could not give effect to the aforesaid Rules. We have been shown various orders passed by the Hon'ble Supreme Court which clearly indicate that those were effective with respect to only such persons who were before the Court and could not be operative in favour of the persons who had not resorted to judicial proceedings. Had the petitioner been sincere to the cause now projected, he could have taken some: steps or impressed upon the Government led by his political party to enforce 1989 Rules apparently made for the purposes of plugging the leakage of the excise duty resulting in consequential loss to the State exchequer. Nothing is shown to have been done by the petitioner which persuades us to agree with the submissions or the respondents that he has not approached the court bona fidely with clean hands, clean heart and clean objectives. Nothing is shown to have been done by the petitioner which persuades us to agree with the submissions or the respondents that he has not approached the court bona fidely with clean hands, clean heart and clean objectives. The rivalry of the petitioner with respondents-3 and 4 is not only political rivalry but to a certain extent has the colour of personal rivalry which appears to have motivated him to utilise the patent name of the PIL. for redressal of his grievances and taking political vengeance. It is not disputed that the petitioner and respondent No. 3 contested the elections to the Karnataka Legislative Assembly from holenarsipur constituency in the year 1985 when the petitioner was defeated and the said respondent elected. Not content with political defeat, he filed Election Petition No. 22/85 in this Court which was also dismissed. Again in the election held for Karnataka Legislative assembly in the year 1994, the petitioner contested from the same constituency where he was opposed by respondent No. 3's son. He was again defeated. He filed Election petition No. 16/95 which is stated to be still pending in this Court. He is alleged to have been indulging in frivolous litigation and making baseless imputations against the said respondents in the newspapers and other media with the alleged object of tarnishing his political image. Such allegations made by the 3rd respondent have not been denied by the petitioner. We see substance in the statements of the said respondent that the petitioner has attempted to misuse the process of this Court to settle his political scores with his opponents. ( 24 ) AS we have already observed, a person intending to initiate action in public interest must be a person, who himself is not guilty of any misdeeds and involved in criminal cases. The lapses on the part of the petitioner to take action for enforcement of 1989 Rules, has earlier been noticed by us in this order. The petitioner's own involvement in criminal cases is also not in dispute. The respondents have placed on record the copy of F. I. R. , (Annexure-R1) filed by the c. B. I. , against the petitioner for offences under Sections 120-B read with Sections 7, 12 and 13{2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988. The petitioner's own involvement in criminal cases is also not in dispute. The respondents have placed on record the copy of F. I. R. , (Annexure-R1) filed by the c. B. I. , against the petitioner for offences under Sections 120-B read with Sections 7, 12 and 13{2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988. The said F. I. R. , discloses that the same was registered on the basis of an order passed by the Hon'ble supreme Court on 4. 12. 1995 during the course of the proceedings in Writ Petition (Civil) No. 317 of 1993. On the basis of a preliminary enquiry held into the matter, it was revealed amongst other things that : "however, Shri G. Puttaswamy Gowda the then Health minister in the Government of Karnataka in utter disregard of the laid down provisions took undue interest in getting the sanction from the Government and wrote a letter No. MHFW/n/674/91 dated 28. 9. 91 falsely mentioning therein that the Government had decided to consider the applications for sanction of Dental, nursing and Pharmacy Colleges favourably on merits. All the applications pending for clearance by Local Inquiry Committee and inspection as also affiliations in the Bangalore University may be considered on merits and be sent to the Government with comments. It was also mentioned in the letter that the application of P. C. , Dental and Nursing College Trust, Bangalore was pending in the University for clearance. Please expedite the same. In fact, neither any such decision had been taken by that time nor the application of P. C. Dental College was pending with the university at that time, having been rejected already The university sent a reply to the aforesaid letter to the Minister vide letter No. ACA/lll/ai/lic-SNC/med/91-92 dated 10. 10. 1991 that the application of P. C. Dental College was not pending with the university for clearance and that the application had been returned to the Trust on 10. 7. 1991. Meanwhile, Shri G. Puttaswamy also took undue interest and directed the Director of Medical Education to inspect the college and submit the report. The Director of Medical Education submitted his report on 6. 9. 91 and mentioned therein that Sh. R. D. Pennathur has been appointed as Principal of the College. As mentioned above, Sh. 7. 1991. Meanwhile, Shri G. Puttaswamy also took undue interest and directed the Director of Medical Education to inspect the college and submit the report. The Director of Medical Education submitted his report on 6. 9. 91 and mentioned therein that Sh. R. D. Pennathur has been appointed as Principal of the College. As mentioned above, Sh. Pennathur was in service of the government and as such, could not have been appointed as principal of the College. Without waiting for the aforesaid reply from the University, a Cabinet Note was prepared at the instance of Sh. G. Puttaswamy Gowda mentioning therein that P. C. Dental college, had already admitted 19 students and that the similar proposal of the C'ollege had been rejected twice by the Cabinet sub-Committee, The said Cabinet Note was sent back from the office of the Minister for further processing and re-submission. Obviously, with design that the Note should be re-prepared. Thereafter, an incorrect Cabinet Note was obtained and it was mentioned therein that the institution had deposited Rs 25,000/- with the University for affiliation. In fact, the aforesaid amount of rs. 25,000/- had already been returned by the University on 10. 7. 1991 while rejecting the application. The said Cabinet Note giving incorrect facts was approved by the Cabinet under the leadership of Sh. S. Bangarappa, the then Chief Minister of the State although, the proposal was against the laid down norms under Section 53 of the Karnataka State university Act as it had not been recommended by the University. Ultimately, on 10. 5. 1991, the order was issued on behalf of the government of Karnataka giving permission to the trust for running p. O. Dental College with intake of 40 students for the year 1992. The fact, on the other hand was that the College had started running even before receipt of the Govt. Order with effect from 2. 9. 91. Although, as per the sanction of the Government the College was permitted to admit only 40 students during the Session of 1991-92 but Sh. Pnnathur admitted as many as 48 students. This strength of 40 was subsequently raised for the session of 1992- 93 to 120 and for the subsequent session to 110. Instead of initiating any action against the college for admitting excess students beyond the sanctioned strength, the College was allowed to raise the strength for the subsequent years by Sh. Pnnathur admitted as many as 48 students. This strength of 40 was subsequently raised for the session of 1992- 93 to 120 and for the subsequent session to 110. Instead of initiating any action against the college for admitting excess students beyond the sanctioned strength, the College was allowed to raise the strength for the subsequent years by Sh. G. Puttaswamy Gowda. The Bangalore University did not allow the excess students to appear in the examination and warned the college to discharge the excess students. " it was further found that the petitioner herein had obtained a sum of rs. 29 lakhs as corruption by utilisng his public position of being a minister. ( 25 ) A person with such antecedents and reputation cannot be permitted to ignite the process of law against his political rivals for the purposes of minimising the effect of criminal prosecution launched and pending against him. ( 26 ) THE bona fides of the petitioner in launching the proceedings against respondent-3 and 4 alleging corruption and violation of the constitutional provisions are also not free from doubt. The allegations levelled which shall be dealt separately, apparently appear to have been recklessly made without any substantial basis, ground or material. The general allegations of corruption, when denied, have not been reiterated by the petitioner. Impleading respondents-3 and 4 without there being any sufficient material was not only unnecessary but reflects the mala fide purpose of the petitioner, he appears to have conceived in filing the present writ petition. Taking the totality of the circumstances, the legal position and the personal basis of the petitioner, who himself is involved in criminal cases, we are of the opinion that he has no right to prosecute the remedy of public interest litigation. He cannot be permitted to hide his face in the mask and cloak of the fair name of P. I. L The unscrupulous oblique motive as the petitioner has been proved to be possessing, cannot be given the credit of scoring a political mileage over his opponents. He can also not be permitted to hide his alleged sins by pressurising the respondents to give in purportedly by dropping the criminal proceedings against him. The action of the petitioner in approaching the Court being personal, political, mala fide vindictive and revengeful, has to be terminated and dashed to the ground. No relief can be granted at his instance. He can also not be permitted to hide his alleged sins by pressurising the respondents to give in purportedly by dropping the criminal proceedings against him. The action of the petitioner in approaching the Court being personal, political, mala fide vindictive and revengeful, has to be terminated and dashed to the ground. No relief can be granted at his instance. ( 27 ) DESPITE holding that the petitioner has no right to file and prosecute this petition, we are of the opinion that this petition can not be dismissed in view of the public interest involved in it, which is shown to have resulted in huge losses to the State exchequer and corresponding undue monetary benefits in favour of the distillerers and distributors of IMFL As public interest litigation cannot be permitted to be withdrawn, the same cannot be dismissed only on the ground of the fact that a wrong person has initiated the action particularly when the violation of the Constitutional and legal provisions are writ large. While protecting the public interest and being aware of the abuse of the process by the authorities this Court cannot abdicate its role as a sentinel of the fundamental rights and liberties of the citizens. The respondents cannot be permitted of refusing to submit their action to scrutiny and judicial review. Merely on the question of locus, the acts alleged being in violation of rule of law, the provisions of the constitution and statutory laws cannot be permitted to be left out without proper adjudication. If this Court had the powers to appropriately mould the relief, why cannot it grant the said relief in the absence of the petitioner, when admittedly the action initiated is in public interest. More so, when the respondents have been notified and given opportunity to know about the allegations and rebut the same. The important questions of law affecting the State exchequer and the public at large which were addressed before us for days-together cannot be shelved or burried under debris of locus standi. When the respondents have fully understood the nature of the allegations made against them and traversed the same in their reply, they cannot have the grievance of any prejudice if we decide the other pleas raised on merits. When the respondents have fully understood the nature of the allegations made against them and traversed the same in their reply, they cannot have the grievance of any prejudice if we decide the other pleas raised on merits. ( 28 ) IN this case one Sri K. V. Amarnath s/o K. M. Venkateshappa has also filed an application under Order 1 Rule 10 (2) read with section 151 of the C. P. C. for being impleaded as second petitioner in the Writ Petition. He has claimed to be a businessman and a Tax payer. He has stated that he is a public spirited citizen and wants to be impleaded as a party-petitioner as the matters involved in the writ Petition are of far-reaching consequences apparently causing huge losses to the State exchequer. It appears that no objections have been filed to this application of Sri K. V. Amarnath, I. A. II is allowed. Sri K. V. Amarnath s/o K. M. Venkateshappa is permitted to be impleaded as petitioner No. 1 in place of Sri G. Puttaswamy gowda. Cause title shall be amended accordingly. Sri G. Puttaswamy gowda shall be shown as petitioner No. 2, but with the direction that he will have no interest in further litigation in this case. He shall not be deemed to be a necessary or proper party in case an appeal is filed against our order. His name shall be shown as petitioner No. 2 only for the purposes of the record of these proceedings. ( 29 ) IN view of the fact that I. A-II has been allowed and in the light of our observations made herein above, this petition cannot be dismissed only on the ground that the petitioner - Sri G. Puttaswamy gowda has no right to the this petition. The other pleas raised in the petition shall be considered, dealt with and decided hereafter. ( 30 ) SERIOUS allegations of corruption, favouritism and nepotism have been levelled against respondent-3 and 4. Such allegations as noted herein above, have been found to be without substance and apparently made with the mala fide intention of politicising the issue for purposes which could be termed to be fair and proper. Nature of the mala fides alleged against respondents-3 and 4 are of both personal and administrative. Such allegations as noted herein above, have been found to be without substance and apparently made with the mala fide intention of politicising the issue for purposes which could be termed to be fair and proper. Nature of the mala fides alleged against respondents-3 and 4 are of both personal and administrative. They are alleged to be the result of the acts of omission and commission attributable to the aforesaid two respondents. The charges of mala fides are very easy to be made, but difficult to be proved. We are aware that the present petition is a petition in " Public Interest' where strict proof of procedural rules may not be insisted upon. However, that does not give a licence to a litigant to level charges and make imputations without reference to facts and circumstances known to him personally or disclosing the source of information upon the basis of which such allegations are made. It is true that in a case initiated in public interest, it would be difficult for the petitioner to have personal knowledge in regard to the averments of mala fides, but when such a knowledge is wanting, it is obligatory for the petitioner to disclose his source of information so that the other side gets a fair chance to verify and make an effective answer. Slip shod affidavits and defective verifications should entail the rejection of the allegation. An affidavit with respect to allegations of mala fides must be modelled on the lines of Order XIX Rule 3 of C. P. C. The' failure to make requisite statutory verification should normally entail the dismissal of the petition in so far as allegations of mala fides are concerned. Exception could be made only in such cases where the Court itself is satisfied that the disclosure of the source of information may be detrimental either to the petitioner or to the society. Order XIX Rule 3 of the C. P. C. provides:"matters to which affidavits shall be confined.- Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove, except on interlocutory applications, on which statements of his belief may be admitted: provided that the grounds thereof are stated. "it has to be kept in mind that affidavits are accepted as an exception to oral evidence and without subjecting the deponent to cross- examination. "it has to be kept in mind that affidavits are accepted as an exception to oral evidence and without subjecting the deponent to cross- examination. Writ petitions under Article 226 of the Constitution are entirely decided on facts stated in the affidavits which make such affidavits to be more sacred particularly when the allegations of mala fide are levelled. Defective affidavits cannot be taken note of or construed in a liberal manner. Exceptions are always in the discretion of the Court. An affidavit is admittedly a declaration as to facts made in writing and sworn to before a person having the authority to administer oath, and swearing or solemnizing such affirmation is essential to give validity and credibility to an affidavit for the purposes of looking into the facts alleged. Swearing of false affidavits is an offence under Section 191 of the I. P. C. The provisions of Order XIX read with Section 191 require that the persons making the averments in the affidavits should make it with responsibility and be prepared to face the consequences, if the averments made therein are proved to be wrong. The affidavit accompanying the Writ Petition must be restricted to facts which are within the deponent's knowledge. If such averments are based on the information received by him, he is required to refer or at least indicate the source of information. If an objection is raised with respect to the affidavit being defective, the deponent has the liberty of filing a correct affidavit in terms of Order xix Rule 3 of the C. P. C. However, such rules of procedure has to be liberally construed in case of PIL. provided the action initiated by the petitioner is shown to be bona fide and in good faith. It would be sufficient if the deponent refers to various paras which are true to his knowledge and certifies the other paras, which are believed by him, to be true on the basis of the information received. He may also specify the source of information, so far as it is practicable. In the absence of such verification, no responsibility can be fastened upon the deponent for his criminal prosecution. Without there being any responsibility of the consequences, no litigant can be permitted to make reckless, baseless and vexatious allegations against his opponent. He may also specify the source of information, so far as it is practicable. In the absence of such verification, no responsibility can be fastened upon the deponent for his criminal prosecution. Without there being any responsibility of the consequences, no litigant can be permitted to make reckless, baseless and vexatious allegations against his opponent. In support of his allegations, the petitioner in this case has sworn the affidavit to this effect only:- "i, Puttaswamy Gowda, G. , age major, s/o. "shanti", No. 444, 8th Cross, Dollers Colony, RMV Extension, Bangalore-94, do hereby solemnly affirm and state on oath as under: i am the petitioner in the above writ petition and I know all the facts of the case. I state that the statements made in paragraphs 1 to 11 of the writ petition accompanying this affidavit are true to the best of my knowledge, belief and information. . . . . " apparently, the affidavit is not according to the form prescribed of the mandate of law. Prima facie no criminal responsibility can be fastened upon the petitioner on the basis of the aforesaid affidavit the averments made in the memorandum of Writ Petition paragraphs-1 to 11 have been termed to be "true to the best of my knowledge, belief and information". Which para is true to his knowledge or information has not been specified. The petitioner's affidavit being patently defective cannot be made the basis for determining the allegations of mala fides alleged against the respondents-3 and 4. ( 31 ) IN E. P. ROYAPPA vs STATE OF TAMIL NADU, the Supreme Court held that the burden of establishing mala fides is very heavy on the person who alleges it. It was further held that:- "the allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State, and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State, and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others, adversely but which are necessary in the execution of their duties. These facts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court, would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective in evaluating charges of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set-up - these considerations are wholly irrelevant in judicial approach - but because otherwise, functioning effectively would become difficult in a democracy. It is from this stand point that we must assess the merits of the allegations of mala fides made by the petitioner against the second "respondent. " ( 32 ) THERE cannot be any dispute to the proposition of law that it may always be not possible to prove or show the existepce of mala fides in fact with full and elaborate particulars. It is permissible in appropriate cases to draw reasonable inference of mala fides from the facts pleaded and established. However, such inference must be based on matrix and such mala fides cannot remain in the realm of insulations, surmises or conjectures. If sufficient material is placed on record, malice may be inferred by conduct taking into consideration both acts of commission and omission. The petitioner in this case has made general allegations of personal malice against respondents-3 and 4. The allegations made are serious if proved. The details of mala fides are, however, vague and ambiguous particularly against respondent No. 3. If sufficient material is placed on record, malice may be inferred by conduct taking into consideration both acts of commission and omission. The petitioner in this case has made general allegations of personal malice against respondents-3 and 4. The allegations made are serious if proved. The details of mala fides are, however, vague and ambiguous particularly against respondent No. 3. Serious allegations made against respondent No. 4 regarding the involvement of his son and brother in the business of IMFL, when controverted have not been reiterated or tried to be explained which shows that the petitioner was aware of the hallowness of his allegations which he apparently made for the purposes of political vendetta. . Respondent No. 4 has specifically and categorically denied the allegations of the involvement of his son and brother in the business which allegedly persuaded him to frame and enforce the impugned rules. There was no basis for the petitioner to allege that the entire action on the part of the 4th respondent is mala fide, motivated with corrupt practices and tainted with the vice of arbitrariness and unreasonableness or that his conduct in presiding over the cabinet meeting in the matter of liquor trade in which his sons were interested, smacks of undulated money making motive for himself and his sons. We are, therefore, of the opinion that the allegations of the mala fides were not properly pleaded. Such mala fides should normally have not been investigated in the absence of a valid, affidavit, as has not been done in this case. Even on perusal, we have found the allegations to be vague, ambiguous and without any substance. As the petitioner, a political rival of respondents-3 and 4, has tried to mislead the Court by making false imputations which also affect the political stature and personal integrity of respondents 3 and 4, he is liable to, not only pay the costs but also compensate the aforesaid respondents by the grant of symbolic compensation. ( 33 ) IT has now to be seen as to whether the impugned Rules as otherwise constitutionally valid and legally made or not. We do not agree with the submission of the learned Counsel for the respondents that as the impugned rules are the result of change of policy of the state Government, the same are not justiciable. ( 33 ) IT has now to be seen as to whether the impugned Rules as otherwise constitutionally valid and legally made or not. We do not agree with the submission of the learned Counsel for the respondents that as the impugned rules are the result of change of policy of the state Government, the same are not justiciable. Reliance of the respondents on State of M. P. and others vs Nandal Jaiswal and others AIR 1987 SC 251 is misplaced. The Supreme Court in that case, never held that the matter of policy cannot, under any circumstances, be made the subject of judicial review. What the Court earlier had held was that while considering the applicability of Article 14. it must be borne in mind that having regard to the nature of the trade or business, the Court would be slow to interfere with the policy laid down by the State Government for grant of licences for manufacture and sale of liquor. The Court, in view of the inherently pernicious nature of the commodity allow a large measure of latitude to the State Government In determining its policy of regulating, manufacture and trade in liquor. Relying upon its earlier judgment in r. K. Garg vs Union of India ( AIR 1981 SC 2138 ) the Supreme Court held that in cases of the law relating to economic activities, the courts should exercise judicial self-restraint if not judicial deference to legislative judgment. In that context, it was held:- ". . . 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 strait jacket formula. The Court must while adjudicating the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or 'play' in the "joints" to the executive. "the problem of Government" as pointed out by the Supreme court of the United States in Metropolis Theatre Company vs state of Chicago, (1912) 57 L ed 730" are practical ones and may justify, if they do not require, rough accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. "the problem of Government" as pointed out by the Supreme court of the United States in Metropolis Theatre Company vs state of Chicago, (1912) 57 L ed 730" are practical ones and may justify, if they do not require, rough accommodations, illogical, it 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 exercise which can be declared void. " The government, as was said in Permian Basin Area Rate cases, (1968) 20 L ed (2d) 312, is entitled to make pragmatic adjustments which may be called for by particular circumstances. The Court cannot strike down a policy decision taken by the State government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. It is against the background of these observations and keeping them in mind that we must now proceed to deal with the contention of the petitioners based on Article 14 of the Constitution. " ( 34 ) IN a recent judgment, the Apex Court, in the case of SECRETARY, JAIPUR DEVELOPMENT AUTHORITY vs DAULAT mal JAIN, rejected such a plea and held that the so-called public policy cannot be a camouflage for abuse of the power and trust entrusted with a public authority or public servant for the performance of public duties. This Court, therefore, can investigate into the allegations to see the legality of an executive action by piercing the veil and curtain of policy sought to be raised preventing the Court to investigate the circumstances under which the impugned rules were made. Rule of law is the heart and soul of the constitutional scheme prevalent in the Country. All executive actions including the matters of policy are subject to judicial review. The rule of law excludes arbitrariness. It postulates, intelligence without passion and reason freed from desire. What is needed in a democratic set-up is a government of laws rather than of men. All executive actions including the matters of policy are subject to judicial review. The rule of law excludes arbitrariness. It postulates, intelligence without passion and reason freed from desire. What is needed in a democratic set-up is a government of laws rather than of men. The Supreme Court, in bachan Singh vs State of Punjab, ( AIR 1982 SC 1325 ), observed that there were fundamental rights which were of prime importance and which breathed vitality in the concept of the Rule of Law, which were Articles-14, 19 and 21 constituting a golden triangle. In maneka GANDHI's case ( AIR 1978 Sc 597 ), the Apex Court held:"that Article 14 was not to be equated with the principle of classification. It was primarily a guarantee against arbitrariness in State action and the doctrine of classification was evolved only as a subsidiary rule for testing or determining whether a particular State action was arbitrary or not. "while dealing with the Rule of Law, the Apex Court in Bachan Singh's case (supra) held:- "it will thus be seen that the Rule of Law has much greater vitality under our constitution than it was in other countries like the United kingdom which has no constitutionally enacted fundamental rights. The Rule of Law has really three basic and fundamental assumptions one is that law making must be essentially in the hands of a democractically elected legislature, subject of course to any power in the executive in an emergent situation to promulgate ordinances effective for a short duration while the legislature is not in session as also to enact delegated legislation in accordance with the guidelines laid down by the legislature; the other is that, even in the hands of a democractically elected legislature, there should not be unfettered legislative power, for, as Jefferson said: "let no man be trusted with power but tie him down from making mischief by the chains of the Constitution", and lastly there must be an independent judiciary to protect the citizen against excesses of executive and legislative power. Fortunatively, whatever uncharitable and irresponsible critics might say when they find a decision of the court going against the view held by them, we can confidently assert that we have in our country all these three elements essential to the rule of law. Fortunatively, whatever uncharitable and irresponsible critics might say when they find a decision of the court going against the view held by them, we can confidently assert that we have in our country all these three elements essential to the rule of law. It is plain and indisputable that under our Constitution Law cannot be arbitrary or irrational and if it is, it would be clearly invalid, whether under Article 14 or Article 19 or Article 21, whichever be applicable. " ( 35 ) IN RAMANA DAYARAM SHETTY vs THE INTERNATIONAL AIRPORT AUTHORITY OF INDIA after referring to Dicey's "the law of the Constitution", Hayek "road to Serfdom" and "constitution of Liberty" by Herry Jones and to an article of Mathew, J. , entitled the "rule of Law and Welfare State" the Supreme Court held that the great purpose of the rule of law, notion is the protection of the individual against arbitrary exercise of power, wherever it is found. It was unthinkable that in a democracy governed by the rule of law the executive Government of any of its officers could be permitted to possess arbitrary powers over the interests of the individual. Every action of the executive Government must be informed with reasons and should be free from arbitrariness which was considered to be the very essence of the rule of law and bare minimal requirement. Appreciating the Judgment of the Kerala High Court in V. PUNNAN thomas vs STATE OF KERALA ( AIR 1969 Ker 81 ), the Apex Court observed that the Government was not and should not be as free as an individual in selecting the recipients for its largess. Whatever its activity, the Government was still the Government and subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay down arbitrariness and capricious standards for the choice of persons with whom it was to deal. The activities of the Government were held to be having a public element requiring to be fair, just and equal. Dealing with the complex nature of the duties of the Modern Welfare Democratic State, the Apex court in Ramana's Case (supra) held:- "today the Government, in a welfare State is the regulator and dispenser of special services and provided of a large number of benefits, including jobs contracts, licences, quotas, mineral rights, etc. Dealing with the complex nature of the duties of the Modern Welfare Democratic State, the Apex court in Ramana's Case (supra) held:- "today the Government, in a welfare State is the regulator and dispenser of special services and provided of a large number of benefits, including jobs contracts, licences, quotas, mineral rights, etc. The Government pours forth wealth, money, benefits, services, contracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They comprise social security benefits, cash grants for political suffers and the whole scheme of State and local welfare. Then again, thousands of people are employed in the State and the central Government and local authorities. Licences are required before one can engage in many kinds of businesses or work. The power of giving licences means power to withhold them and this gives control to the Government or to the agents of Government on the lives of many people. Many individuals and many more businesses enjoy largess in the form of Government contracts. These contracts often resemble subsidies. It is virtually impossible to lose money on them and many enterprises are set up primarily to do business with government. Government owns and controls hundreds of acres of public land valuable for mining and other purposes. These resources are available for utilisation by private corporations and individuals by way of lease or licence. All these mean growth in the Government largess and with the increasing magnitude and range of governmental functions as we move closer to a Welfare state, more and more of our wealth consists of these new forms. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. But on that account, can it be said that they do not enjoy any legal protection? Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure? Is the position of the Government in this respect the same as that of a private giver? We do not think so. Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure? Is the position of the Government in this respect the same as that of a private giver? We do not think so. The law has not been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognised as rights while others have been given legal protection not only by forging procedural safeguards but also by confining/structuring and checking Government discretion in the matter of grant of such largess. The discretion of the government has been held to be not unlimited in that the government cannot give or withhold largess in its arbitrary discretion or at its sweet will. It is insisted, as pointed out by professor Reich in an especially stimulating article on "the New property" in 73 Yale Law Journal 733, "that Government action be based on standards that are not arbitrary or unauthorised". The Government cannot be permitted to say that it will give jobs or enter into contracts or issue quotas or licences only in favour of those having grey hair or belonging to a particular political party or professing a particular religious faith. The Government is still the Government when it acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual. " as held by the Supreme Court in JAIPUR DEVELOPMENT's CASE, it is open for this Court to consider the change of the policy sought to be relied upon by the respondents and to determine as to whether the same was to further public good or was a means to fritter away the public property for the benefit of few resulting in loss to the state exchequer. The public policy of the Government is required to further public purpose and not be the result of whims and caprice particularly when it is challenged in a Court-of-law on the grounds of unconstitutionality and arbitrariness and being against the public interests. The public policy of the Government is required to further public purpose and not be the result of whims and caprice particularly when it is challenged in a Court-of-law on the grounds of unconstitutionality and arbitrariness and being against the public interests. This court, therefore, cannot shut its eyes and close the investigation needed to determine the locality, validity and constitutionality of the so-called policy necessitating the amendment of the Rules which are alleged to be adversely affecting the public interests. ( 36 ) IN order to determine the constitutional validity of the impugned Rules, it is necessary to have a look at the Scheme of the Karnataka Excise Act and recapitulate the circumstances leading to the enforcement of the impugned Rules. The Preamble to the kamataka Excise Act, 1965 states, "whereas it is expedient to provide for a uniform law relating to the production, manufacture, possession, import, export, transport, purchase and sale of liquor and intoxicating drugs and the levy of duties of excise thereon in the State of Karnataka, the Karnataka Excise Act has been enacted. " the Preamble has a clear reference to Entry 8, List II of the Seventh schedule to the Constitution which empowers the States to legislate in connection with "intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors". Chapter IV of the Act deals with manufacture, possession and sale of intoxicating liquors, Section 13 which forms a part of chapter IV prohibits manufacture, possession or sale of the excisable article in question except under a licence. It provides:"13 (1) No person shall. . . . . (a) to (c ). . . . . . . . (d) construct or work a distillery or brewery; or (e) bottle liquor for sale; (f ). . . . except under the authority and subject to the terms and conditions of a licence granted by the Deputy Commissioner in that behalf or under the provisions of Section 18. "section 15 (1) provides that no intoxicant shall be sold except under the authority and subject to the terms and conditions of a licence granted in that behalf. Both these sections, therefore, provide for issuing a licence for the manufacture, possession, purchase or sale of liquor. In fact such activity is prohibited without a licence. The terms and conditions of the licence may be such as may be prescribed. Both these sections, therefore, provide for issuing a licence for the manufacture, possession, purchase or sale of liquor. In fact such activity is prohibited without a licence. The terms and conditions of the licence may be such as may be prescribed. Section 17 deals with the power to grant a lease of the right to manufacture etc. Sub-section (1) of Section 17 provides as follows:"17 (1) : the state Government may lease to any person, on such conditions and for such period as it may think fit, the exclusive or other right - (a) of manufacturing or supplying by wholesale or of both or, (b) of selling by wholesale or by retail, or (c) of manufacturing or supplying by wholesale, or of both and of selling by retail. any Indian liquor or intoxicating drug within any specified area. "section 71 provides as follows:"71 (1) : The State Government may, by notification and after previous publication, make Rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing provision, the State Government may make Rules - (a ). . . . . . (b) omitted (c ). . . . . . (d) regulating the import, export, transport, manufacture, cultivation, collection, possession, supply or storage of any intoxicant. . . . (e) regulating the periods and localities in which, and the persons or classes of persons to whom, licences for the wholesale or retail sale of any intoxicant may be granted and regulating the number of such licences which may be granted in any local area; (f) and (g ). . . . . . . . (h) prescribing the authority by which, the form in which and the terms and conditions on and subject to which any licence or permit shall be granted, and may, by such Rules, among other matters.- (i) fix the period for which any licence or permit shall continue in force; (ii) to (vii) (i) to (m) (n) any other matter that may be prescribed under this Act,"sub-section (3) of Section 71 provides that every rule made under the Act shall have effect as if enacted in the Act subject to such modifications as may be made under sub-section (4 ). Sub-section (4) requires every rule to be laid as soon as may be before each house of the State Legislature while it is in session for a total period of 30 days or within other modes of time and in the manner prescribed therein. Section 71, therefore, clearly contemplates Rules being made prescribing different kinds of licences which may regulate the activity of manufacture and sale of intoxicants and the terms and conditions subject to which such licences may be issued. It also contemplates regulation of the number of such licences. The act does not specify the kinds of licences which may be issued. This is left to the rule making authority. Thus, different kinds of licences are specified under the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. Rule 3 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 deals with licences for the vend of Indian liquor (other than Arrack) or Foreign liquor or both. It deals with licences of all types. Sub- rule (1) deals with wholesale licences for vend of Indian liquor or Foreign liquor or both. Sub-rule (2) deals with retail of shop licence for vend of Indian liquor or Foreign liquor or both. Sub-rule (4) deals with licences to clubs. Sub-rule (5) deals with occasional licences. Sub-rule (6) deals with special licences. Sub-rule (7) deals with hotel and boarding house licences and so on. Sub-rule (11) which is introduced by the amendment deals with distributor licences. All kinds of licences, therefore, specify and regulate the activity of manufacture, distribution and sale of liquor are covered by Rule 3 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. ( 37 ) A distributer licence as contemplated under the Rules was held to be basically no different from the licences prescribed under the Act. It is a licence to deal in liquor in the manner prescribed. Form No. CL 11 prescribes the conditions of a distributor licence. Relevant conditions being No. 2, 3 and 6, are (2) The licensee may purchase the liquor only from distilleries/ breweries/wineries located within Karnataka or import from outside the State. (3) The licensee shall sell the liquor only to a person who is holding CL 1 licence in the State or export liquor to a person outside the State, who is holding a valid licence to deal in liquor. (3) The licensee shall sell the liquor only to a person who is holding CL 1 licence in the State or export liquor to a person outside the State, who is holding a valid licence to deal in liquor. (6) The licensee shall sell only the approved brands of liquor. " ( 38 ) SECTION 71 authorises the State Government, to make Rules in the manner prescribed therein, it appeals that in exercise of its powers the Government framed the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1988. The aforesaid Rules were amended in the year 1998 and thereafter in 1988. Under Rule 3 (11) of the Rules enforced prior to 1988, the Excise Commissioner had the power to grant a licence in form CL 11 for a private Bonded warehouse with the previous sanction of the State Government. The rules authorised the licensee to deposit or stock Indian liquor (other than arrack) without payment of duty. The licensee had the authority to transact the business in a Bonded Warehouse after payment of prescribed fee and was found by all conditions of licence including the "payment of establishment and supervision charges to be prescribed as per Rules. Vide amendment made in Rule 3 (11) of the aforesaid Rules, a provision for distributor licence was made for the first time. Such licence was to be issued in form CL 11 and was to be granted by the Excise Commissioner to an authorised distributor for any distillery, brewery or winery established within or outside the state for sale of liquor for the whole or part of the State. No distillery, brewery or winery was authorised, except with the prior approval of the Excise Commissioner to modify or withdraw the distributorship granted to a licensee under the said clause. The Excise commissioner on payment of additional licence fee equivalent to 25% of CL-11 licence fee had the authority to permit a licensee under the clause to sell foreign liquor. Subject to the conditions. referred to hereinabove, it was permissible for a distillery, brewery or winery to appoint one or more distributors for the sale of liquor for the whole or part of the State. The distributors licence fee was fixed at Rs. 1 lakh per year. Subject to the conditions. referred to hereinabove, it was permissible for a distillery, brewery or winery to appoint one or more distributors for the sale of liquor for the whole or part of the State. The distributors licence fee was fixed at Rs. 1 lakh per year. Vide amendment made in 1989 a provision was made for the grant of a distributor licence by the Excise commissioner for the whole of the State or any part thereof to deal in the products of distilleries or breweries or wineries in the State or to import liquor from outside the State for the purpose of distribution or sale within the State or as the case may be part thereof or to export liquor outside the State. The licensee was required to establish not less than one depot in each District within the State. The licensee under clause (b) of Rule 3 (11) was to be issued only to such company which was owned or controlled by the State Government. The licence was to be in form CL-11 and subject to renewal each year at the discretion of the Excise Commissioner. The Excise commissioner had the power to permit the licensee to sell foreign liquor. The licensee was authorised to receive non duty paid Indian liquor other than arrack and stock the same under the licensed premises for the purpose of export or to supply to a person possessing wholesale licence in the State of Karnataka or to a bonded warehouse. The distributor licencee fee was fixed at Rs. 5 lakh plus Rs. 10,000/- per depot per annum. Condition No. 3 of form cl-1 under the 1968 Rules was:"the holder of this licence shall upon requisition by an Officer beiow the grade of an Sub-Inspector of. Excise be bound to produce to such Officer the original invoice showing the importation of all kinds of liquors for the sale of which this licence is granted for inspection and to allow the samples of the liquors in the shop to be tested. "such condition under 1988 Rules was:"the iicensee, shall purchase his liquor only from licenced distillery/ brewey/ winery located within the State and/or from a licenced distributor having CL-11 licence. The licensee shall sell liquors to person holding CL-2, CL-4, CL-5, CL-6, CL-7, CL-7a, cl-7b, CL-9 and CL-10. "such condition under 1988 Rules was:"the iicensee, shall purchase his liquor only from licenced distillery/ brewey/ winery located within the State and/or from a licenced distributor having CL-11 licence. The licensee shall sell liquors to person holding CL-2, CL-4, CL-5, CL-6, CL-7, CL-7a, cl-7b, CL-9 and CL-10. "and under 1989 Rules was:"the licensee shall purchase his liquor only from a licenced distributor having not CL-11 licence. The licensee shall sell liquors to persons holding CL-2, CL-4, CL-5, CL-6, CL-7, CL-7a, CL-76, cl-9 and CL-10. "similarly condition No. 2 of Form CL-11 under 1968 Rules was: "the privilege under this licence extends only to the sale of Indian liquor (other than arrack) and brands furnished by the licensee. The Deputy Commissioner is at liberty to alter the list. " such condition under 1988 Rules was: "the licensee shall sell only the products of the Distillery/brewery/ winery for which he is an authorised Distributor. " and under 1989 Rules was: "the licensee may purchase the liquor only from distillery/ breweries/wineries located within Karnataka or import from outside the State. " ( 39 ) THE facts staled herein above clearly show that a Distributor licence was prescribed for the first time under Rule 3 (11) of the karnataka Excise (Sale of Indian and Foreign Liquor) Ruies, 1968. The aforesaid Rules as earlier noted were amended in the year 1988 and then in 1989. Feeling aggrieved by the 1989 amendment made in the Ruies, some of the distilleries filed Writ Petitions in this court which were dismissed and the matter was taken before the hon'ble Supreme Court. It was contended therein that by compelling the appellants to sell liquor to MSIL the sole distributor appointed by the Government and prohibiting the appellants from selling liquor to anyone else, the State Government had violated their fundamental rights under Article 19 (1) (g) of the Constitution to carry on trade or business. It was further submitted that the restrictions placed by the aforesaid amendment on their right to carry on trade were far from reasonable. The Rules were alleged to be beyond the legislative competence of the State. It was also submitted that the amended rules of 1989 were arbitrary, unreasonable which caused undue hardship to the appellants and, therefore, violated Article 14 of the constitution. The Rules were alleged to be beyond the legislative competence of the State. It was also submitted that the amended rules of 1989 were arbitrary, unreasonable which caused undue hardship to the appellants and, therefore, violated Article 14 of the constitution. The Rules were termed to be manifestly arbitrary because the avowed purpose of formulating the amended Rules was to stop evasion of excise duty. It was further contended that MSIL ought not to have been nominated for a distributor licence because it was not competent to discharge its obligations as it did not have the necessary infrastructure. ( 40 ) JUSTIFYING their action, the respondent State, in the statement of objections filed submitted that the liquor trade was subject to the regulatory provisions under the Excise Act. Therefore by the impugned Rules of 1989 no provision of the Constitution had been violated. It was submitted that the State had always the jurisdiction to impose reasonable restrictions under clause "d" of Article 304 and under the provisions of sub section 3 of section 71 of the Act. Every Rule made under the Act was to have the effect as if enacted under the Act. The impugned Rules were claimed to be forming part and parcel of the Act. It was specifically stated:- "the impugned Rules squarely fell within the Rule making power under Section 71 (2) (d) and they become part and parcel of the act under the provision of sub-section (3) and therefore they attain the status of law for the purpose of Articles 304. Even otherwise, the impugned Rules impose reasonable restrictions and therefore protected under Articles 304{b ). The Contention that the impugned Rules are violative of the provisions of Article 14 of the Constitution is without any substance as the trade in liquor is the monopoly of the State and the petitioners cannot claim the fundamental right in that trade. Their right to trade is regulated by the provisions of the Act and the Rules framed thereunder. The impugned Rules have been made with the sole object of preventing the leakage of excise revenue and therefore, they are reasonable restrictions within the meaning of Article 19 (6) of the Constitution. Their right to trade is regulated by the provisions of the Act and the Rules framed thereunder. The impugned Rules have been made with the sole object of preventing the leakage of excise revenue and therefore, they are reasonable restrictions within the meaning of Article 19 (6) of the Constitution. The contention that Rules are ultra vires the Act as they have no relation to the object and purpose of the Act and there is no nexux between the impugned rules and the purpose of the Act, is devoid of any substance. Under the provisions of the Act, the trade in liquor is regulated by issue of licence and lease. To achieve that object, rules have been made under the provisions of Section 71 (2) (d) of the Act. The Supreme Court, in K. RAMANATHAN vs STATE OF TAMIL NADU, 1985 SC and while considering the scope of the word 'relating' under clause (d) of sub-section (2) of Section 3 of the Essential Commodities Act, has held that there is no reason to give a restricted meaning to the word 'regulating' under clause (d) so as not to take in 'prohibiting'. Therefore, it is submitted that the impugned Rules are for the purpose of regulating the trade in intoxicating liquors by insisting that the manufacturer of liquors shall sell liquor only to the distributor which is either a Government Company or a company controlled by the Government. The impugned tales do not suffer from lack of competence. It is submitted that the State Government has taken a policy decision by making the impugned Rules to see that the manufacturers of intoxicating liquors shall sell only to the distributor who is holding a distributor's licence and all other wholesalers shall purchase the liquor only through the distributor as the Rules are in pursuance to the policy which is mainly meant to prevent the law of excise revenue. It is not correct to contend that this Hon'ble Court should exercise its discretionary jurisdiction under Article 226 of the Constitution of India in the matter of a policy decision of the State Government. It is not correct to contend that this Hon'ble Court should exercise its discretionary jurisdiction under Article 226 of the Constitution of India in the matter of a policy decision of the State Government. The Supreme Court while dealing with the question pertaining to the State Policy in the matter of giving permission to start educational institutions, has held that: "so long as there is no violation of fundamental rights and if the principles of natural justice are not offended, it is hot for the High Court to lay down the policy that should be adopted" Act 1973 SC 588 - STATE OF MAHARASHTRA vs shikshan SNASTHA. It is submitted that the Kerala High Court in the case of MONI seman vs STATE - AIR 1985 KERALA III while dealing with the contention regarding the validity of the rule made conferring exclusive privilege of vending foreign liquor to the State owned corporation and requiring other licences to any foreign liquor only from the said Corporation, has held a "state may completely prohibit the trade or impose severe restrictions on the business and only those persons who are willing to abide by the stringent conditions are given a light to carry on trade 8' and merely because what was previously permitted is no longer permitted under the new Rule. It cannot be said that there is a change of policy and transgress the permissible limits of delegated legislation. " it is submitted by the impugned Rules, a Distributor's licence can be granted only in favour of a Government Company or a company owned by the State Government and all other wholesale licences are required to purchase the intoxicated liquors from such distributor. It cannot be said that such a rule creating monopoly in favour of the State to the exclusion of all others is not intended by the Act. The licensing provisions contained in sections 13, 15 and 16 also enable the individuals to carry on business in liquor after obtaining licence. However, under Section 17 of the Act, the State Government is entitled to lease to any person the exclusive or other right of manufacture and supply Dy wholesale or of both and selling of wholesale by retail of manufacturing or supplying by wholesale or of both and of selling by retail any Indian made liquor or intoxicating drug within any specified area. Section 71 (2) (d) empowers the State Government to make Rules for regulating import, export, transport, manufacture, collection, possession, supply or storage of any intoxicant. In exercise of their powers the State Government has framed the impugned rules and therefore, they have nexus with the object of the Act. Even under the unamended rules, the manufacturer of intoxicating liquors can sell liquors only to a person holding wholesale licence whether in the State or outside the State. The impugned rules do not restrict any right of the manufacturer, but only requires, even such sale should be effected through a distributor. It may be seen that the petitioners are bound by the rules that may be framed from time to time, as mentioned in the conditions of the existing licences. Therefore, it submitted that the petitioners cannot challenge the validity of the impugned rules. The contention of the petitioner that he is entitled to store his liquor with any private bonded ware house without paying the excise duty, is not correct in as much as under the Karnataka excise (Sale of Indian made foreign liquor) Rules, 1968, the licences shall make arrangements to store the liquor in his own premises without payment of duty. The petitioners are not prevented to initiate effective steps to popularise the liquors produced by them. It is submitted that the impugned rules has not imposed anv oral prohibition of liquor and beer, but only contemplates restriction of the sale through Government Agency. As submitted earlier, the provisions of Section 17 read with the Section vest the Government with the power to make the impugned rules creating monopoly in favour of the Company and by the State or controlled by it. The contention that the impugned rules are imposing unreasonable restrictions in freedom of trade and commerce and in due course within the outside the State, in not sell it. If there is demand outside the State, for the liquor produced by the petitioner, the same can be sold only through the Distributor Licencees. The contention that the Government is meddling with the trade practice, is not correct in as much, as it is for the consumers to choose a particular brand of liquor and if the demand persists, the Government company will have to supply the same. The contention that the Government is meddling with the trade practice, is not correct in as much, as it is for the consumers to choose a particular brand of liquor and if the demand persists, the Government company will have to supply the same. It is not correct to state that the Government company is at liberty to purchase or do not purchase the liquor produced by the petitioner. It is bound to purchase the liquors, if there is demand from the wholesalers. Even otherwise, it is submitted that proper evidences will be issued to the Government company in this behalf. The government company is expected to act bonafide and with responsibility and it is not correct to contend that the Government agency will be interested only in a particular manufacturer. It is true that the petitioners have invested amounts in establishing the distillery/brewery. However, the impugned rules do not in any way affect her rights to manufacture liquor. What is intended by the impugned rules is that all liquor produced by the petitioner should be sold only to a distributor which is a government company controlled by the State and thereafter the liquor should be sold by the wholesalers. There were several complaints of evasion of tax and duty and it cannot be contended that there was no complaint at all in this behalf. The intention of the State Government is only to canalise the sale of liquor through the specified agency. As per the normal trade practice, it is already existing within the State and for the purpose of import and export. Even after the introduction of the impugned Rules, the business of wholesale and retail continues with the private individuals. " (emphasis supplied) .