M/s Z.A. Shah, Advocate, along with Irfan Noor, Advocate; M/s A.V. Gupta, Senior Advocate, along with Y.E. Tak, Advocate; M/s D.C. Raina, Senior Advocate along with Dinesh Verma; M/s R.K. Gupta, S.K. Shukla, Rahul Pant, C.M. Gupta, Rishi Gupta, C.S. Gupta, W.S. Nargal, Rajesh Bhushan, B.S. Manhas along with D.S. Chouhan, Shakoor A. Malik, Gagan Basotra, Rajeev Saraf, Sunil Sethi, Kishore Kumar, F.A. Natnoo, Raghubir Singh, K.C. Sharma, D.K. Khajuria, Mrs. Radha Sharma, P.N. Raina along with Ms. Anshuja Sharma, H.H. Singh, R.P. Sapolia, Ajay Vaid, Hari Hartar Singh, C.S. Azad, Mrs. Surinder Kour, M/s Nitin Bhasin, H.C. Jhalmeria, M.R. Qureshi, K.S. Chib, Y.E. Tak, Advocates, for the Petitioners in their respective writ petitions. Mr. U.K. Jalali, Sr. Advocate, with Ms.Ruchi Bakhri, Advocate, and M/s Sunil Sethi, S.S. Jamwal, Ajay Singh Sahi, Surinder Singh, Advocates, for private-respondents/caveators, in their respective writ petitions. No.289/2004, OWP No.290/2004, OWP No.291/2004, OWP No.292/2004, OWP No.293/2004, OWP No.294/2004, OWP No.295/2004, OWP No.296/2004, OWP No.297/2004, OWP No.298/2004, OWP No.279/2004,OWP No.299/2004, OWP No.302/2004, OWP No.280/2004, OWP No.282/2004, OWP No.283/2004, OWP No.301/2004, OWP No.300/2004 OWP No.303/2004, OWP No.312/2004, OWP No.313/2004, OWP No.314/2004, OWP No.315/2004,OWP No.316/2004, OWP No.318/2004, OWP No.319/2004, OWP No.320/2004, OWP No.321/2004, OWP No.322/2004, OWP No.323/2004, OWP No.324/2004, OWP No.328/2004, OWP No.329/2004, OWP No.330/2004,OWP No.331/2004, OWP No.332/2004, OWP No.334/2004, OWP No.340/2004, OWP No.343/2004, OWP No.345/2004, OWP No.359/2004, OWP No. 362/2004, OWP No.379/2004, OWP No.382/2004, OWP No.469/2004, OWP No.478/2004, OWP No.482/2004, OWP No.506/2004, OWP No.508/2004, OWP No.535/2004, OWP No.551/2004, OWP No.572/2004, wherein the petitioners are aggrieved of the mode and manner, tone and tenor, by which the Excise Department had notified the result of draw of lots for grant of off-licences held on 27-02-2004 under No.EC/STS/108/ 2004-05/1944-45 in the Local Newspaper, by adopting a procedure alien to the Excise Act, the Rules framed thereunder and the Excise Policy of the Government and, thus, acted in contravention of the Constitution. 2. The petitioners further stated that there is no provision for issuance of off-licences by resort to draw of lots in terms of Rules and the Act. The entire mechanism is without jurisdiction and manipulated. That the Act and the Rules provided consideration of the applications by human mind and not by a machine or by a computer. Further case of the petitioners is that the licences have been granted for several other areas, which had not been notified earlier. The entire mechanism is without jurisdiction and manipulated. That the Act and the Rules provided consideration of the applications by human mind and not by a machine or by a computer. Further case of the petitioners is that the licences have been granted for several other areas, which had not been notified earlier. The petitioners also stated that in terms of the Policy, they were to be treated as a separate class along with similarly situated persons, who had applied for off-licences prior to 22-07-2003 and their applications were complete in all respects, and the consideration required to be accorded to them area-wise and the decision to be taken on merits, as provided in the Excise Policy in vogue and existed at the relevant time. The petitioners, therefore, seek the result of draw of lots, held on 27-02-2004 by the Excise Department, to be quashed by a writ of certiorari and further declare the mode of grant of off-licences by draw of lots ultra vires of the Excise Act, Rules framed thereunder and the Excise Policy; also directing the respondents by a writ of mandamus to treat all those persons, who had applied for the grant of licences prior to 22-07-2003, as a separate class and the decision be taken on merits for grant of off-licences area-wise and further to notify the areas other than 89 places for which the procedure of draw of lots was adopted, and afford a chance to every one to apply for such area as well along with notifying the number of IMFL licensees ear-marked and to be issued for such areas. 3. The petitioners further submitted that they had applied for the grant of off-licences for retail vending of liquor at places specified in their applications to the Excise Department. The cases of the petitioners were processed and after completing all the formalities, the licences were not issued in view of litigation and stay order passed by the Court. The Government, however, issued a new Excise Policy vide Government Order No.99-F of 2003 dated 07-04-2003 and, subsequently, modified it vide Government Order No.156-F of 2003 dated 22-07-2003, and provided guidelines for the disposal of the applications of the persons, who had applied for the liquor licences prior to 22-07-2003. The Government, however, issued a new Excise Policy vide Government Order No.99-F of 2003 dated 07-04-2003 and, subsequently, modified it vide Government Order No.156-F of 2003 dated 22-07-2003, and provided guidelines for the disposal of the applications of the persons, who had applied for the liquor licences prior to 22-07-2003. In terms of the aforesaid Policy, the petitioners were to be treated as a different class and entitled to the grant of licences after consideration of their applications for the places specified therein. The petitioners are, however, aggrieved of the procedure adopted by the Excise Department in the matter of grant of off-licences by draw of lots and seek a direction to the respondents to decide their applications and comply with the Government Order dated 07-04-2003 read with the Government Order dated 22-07-2003 and treat the petitioners a different class for the grant of off-licences for the places indicated in their respective applications. Further action of the respondents in ignoring the applications for the purpose of grant of off-licences for the places indicated in the applications, on merits, in terms of the existing Excise Policy and instead selected the persons by draw of lots for issuance of liquor licences to place(s) not specified in their applications, is challenged on the ground of being illegal, unconstitutional and cannot stand the test of law laid down in Articles 14 and 16 of the Constitution of India. It is further stated that the procedure adopted by draw of lots is not a foolproof procedure for selection of grant of liquor licences. That any Policy, which is against the mandate of the Act and the Rules, is not legally sustainable. The petitioners further pleaded that system of selection by draw of lots is faulty and discrepant. That certain names of the applicants before the Excise Department (Gouri Arora and Pankaj Dutta) are found in the category of selected persons in the first draw of lots for a particular place, but again, in second draw of lots, their names are figured/listed in the awaiting category for different places for the grant of off-licences. That the procedure of draw of lots is alien and defective to the existing Excise Policy and not supported by the Excise Act and the Rules framed thereunder and, thus, the action of the Excise Department is against the mandate of law. The second group consists of OWP No.285/2004 and OWP No.284/2004. That the procedure of draw of lots is alien and defective to the existing Excise Policy and not supported by the Excise Act and the Rules framed thereunder and, thus, the action of the Excise Department is against the mandate of law. The second group consists of OWP No.285/2004 and OWP No.284/2004. In OWP No.285/2004, the petitioners are organizations, non-governmental, stated to be working for the welfare of the general public. The petitioners further stated to have lodged demonstrations for the complete prohibition of liquor in the State of Jammu and Kashmir. The grievance of the petitioners is that the respondents have granted as many as 200 more licences for opening the liquor vends, least realizing that liquor is not only harmful and dangerous to the life and health of the public, but it also affects the future of the children. The petitioners further stated that the State is required to have a restricted approach in case of liquor trade, as is enjoined in Article 47 of the Constitution. The petitioners are also stated to be aggrieved of the order dated 27-02-2004, by which various persons have been selected for the grant of off-licences at various places and the respondents are bent upon to issue the licences, notwithstanding the resentment of the public and strong protests by the people and also the residents of Chhani Himmat Housing Colony, in ultra-violation of the dictates of the Constitution of India to ensure total prohibition in phased manner. That the action of the Government in granting the licences is unimaginable, and is not only against the directive principles of the State Policy, but also more contrary to the declared Policy, rather than in consonance with the same. The petitioners further state that the decision of the Government to grant more licences has neither any rationale or basis, nor justifiable, being without any study, much less in-depth study, conducted by the respondents with regard to the requirement of any more liquor vends for the places identified and notified than the places un-notified for which even the applications were not invited, without realizing that grant of licences is arbitrary and unconstitutional and cannot be granted by draw of lots and, thus, seek the quashing of the order dated 27-02-2004 issued by respondent-2. 4. The third group consists of OWP No.281/2004 and OWP No.204/2004. 4. The third group consists of OWP No.281/2004 and OWP No.204/2004. The petitioners are aggrieved of the procedure adopted by the Excise Department for the grant of fresh off-licences and stated the same to be wholly discriminatory and illegal, as the petitioners have been deprived of their right to participate for the grant of licences. It is stated that the respondent-2, Excise commissioner, issued a public notice published in all the local newspapers on 25-09-2003, inviting applications from general public of J&K for grant of off-licences for retail sale of Indian Made Foreign Liquor (IMFL), in terms of the existing Excise Policy. The licences were yet to be granted, when the Government presented a Finance Bill 2004, whereby it restructured the regulation of liquor sale in the State of J&K and the existing dual system was given go bye and the new system has been introduced within the IMFL network. On the anvil of the change in the system, the Excise Commissioner selected 205 persons by draw of lots for the grant of off-licences. The petitioners stated that the persons selected are those, who had submitted applications under the earlier government Excise Policy of 2003. The Department did not invite fresh applications from general public under new Scheme for the grant of licences, nor notified the places other than 89 places earlier notified, for which licences were intended to be issued and, thus, the petitioners sought the issuance of a writ of certiorari in quashing the order dated 27-02-2004 issued by the Excise Commissioner in respect of the persons selected for the grant of off-licences for the retail sale of IMFL and country liquor (Desi Whisky) for 205 places in J&K State; with a further relief in the nature of mandamus directing the respondents to issue a fresh notice inviting applications for the new identified locations other than the 89 places already notified. 5. For understanding the points in controversy, it would be enough to refer to the facts of writ petitions of that group. I would first deal with the matters in group one. Before I proceed to examine the precise controversy raised before the Court, it is necessary, at the outset, to focus attention on the factual matrix of the cases, which, in brief, may be noticed. 6. I would first deal with the matters in group one. Before I proceed to examine the precise controversy raised before the Court, it is necessary, at the outset, to focus attention on the factual matrix of the cases, which, in brief, may be noticed. 6. The grant of off-licences for running the retail liquor vends known as JKEL-2, is regulated by the provisions of the Jammu and Kashmir Excise Act, 1958 (hereinafter for short referred to as "The Excise Act") and the Rules framed thereunder, in the Jammu and Kashmir State. The Rules framed under the Excise Act are called Jammu and Kashmir Liquor Licences and Sale Rules, 1984. The Excise Act also contains the provision for grant of off-licences for the sale of country liquor. So far as the grant of licences for sale of country liquor is concerned, the Government had been adopting different procedures, sometimes by auction and sometimes the Government would itself deal with the country liquor and set up various country liquor vends in the State. Whereas the position in case of JKEL-2 licences for the sale of IMFL was different from that of country liquor. 7. According to the petitioners, in terms of the Excise Act, Rules and Excise Policy enunciated by the Government, no person desirous of getting a JKEL-2 licence was required to apply to the competent authority. Such person was required to obtain "no objection" from various authorities prescribed by the Rules or by the Government order, before the grant of licence. Further case of the petitioners is that they applied during the year 1998-2003 for the issuance of JKEL-2 licences to the competent authority and also completed the requisite formalities of obtaining "no objection" from various authorities, as prescribed under the Rules and the Government orders. When the licences were not granted by the competent authority even after the completion of all formalities prescribed under the Act, many writ petitions came to be filed and in view of interim directions passed by the Court, the cases could not be processed. However, subsequently, those writ petitions came to be finally disposed of and the Government came out with a fresh Excise Policy announced vide Order No.99-F of 2003 dated 07-04-2003. The aforesaid Excise Policy in so far as it pertained to the applications for the grant of licences are concerned, provided as under: "... 1. However, subsequently, those writ petitions came to be finally disposed of and the Government came out with a fresh Excise Policy announced vide Order No.99-F of 2003 dated 07-04-2003. The aforesaid Excise Policy in so far as it pertained to the applications for the grant of licences are concerned, provided as under: "... 1. DISPOSAL OF APPLICATIONS RECEIVED (A) All applications pending consideration, with the Excise Department or the Finance Department including those in which the Finance Department has issued NOC but have not been acted upon in view of the stay orders or directions passed by the Honble Courts, shall be treated as fresh applications with precedence as per date of receipt and processed afresh under the laws, rules, regulations and these policy guidelines. ... ... ... .. 2. SALE OF LIQUOR (A) The licences for wholesale trade be it in JKEL-I or JKEL-IA shall issue on need basis in accordance with the provisions of the Act and the rules there under but in authorizing the same utmost care shall be taken in site selection vis-…-vis the place of worship, educational/health institution and related factors. (B) A highly restrictive approach shall be pursued for issue of "off-licence". In such cases the proposals received or to be received, apart from the fulfillment of procedures and formalities provided for, shall be: (i) evaluated minutely with reference to the requirement of distance from a place of worship, health/educational institution, railway station or a place where religious congregations take place. The assessment of reasonable distance shall be made with conservative standards; (ii) put to public notice for invitation of objections from the general public within a period of one month of the receipt of complete proposal. The objections if any received within the stipulated date, shall be disposed of on merits by the competent authority within a period of one month In processing the requests for grant of `off-licences the consideration of un-serviced areas, arresting the menace of bootlegging, the demand potential and the relevance from tourism point of view shall be of paramount importance. A clear precedence shall be drawn in the processing of such applications with the priority consideration for educated unemployed youth and the ex-servicemen." Subsequently, the Government partially modified the aforesaid Policy in so far as the disposal of the pending applications is concerned, vide Order No.156-F of 2003 dated 22nd July, 2003. A clear precedence shall be drawn in the processing of such applications with the priority consideration for educated unemployed youth and the ex-servicemen." Subsequently, the Government partially modified the aforesaid Policy in so far as the disposal of the pending applications is concerned, vide Order No.156-F of 2003 dated 22nd July, 2003. Para No.1 of the Excise Policy stood substituted by the subsequent partial modification by the following para: "DISPOSAL OF APPLICATION RECEIVED All applications pending consideration as on date shall be treated separately as a class. Of these, the applications which are complete shall be considered on merits for issuance of Licences subject to rules and regulations along with such other new applications as may be received by the government within a prescribed time. Those, however, who had not completed all the formalities, will have to do so before being taken up for consideration. The Excise Commissioner may, however, if considered necessary, ask for fresh process wholly or partly in a case where a document is too old, time barred or unsatisfactory." In pursuance to the partial modification of the Excise Policy, the Commissioner Excise issued a notice dated 22nd July, 2003 and identified various areas on tentative basis proposed to be considered for the issuance of various kinds of licences for sale of IMFL. This was done to address the menace of bootlegging, manufacture of spurious liquor, prevention of Inter-State smuggling and servicing of unserved and underserved areas, as per the assessment made by the Department. It was further indicated in the notification that no application shall be received in the Excise Department after 31st July, 2003. It, however, did not end up here. Another notice came to be issued and published in the Newspaper dated 3rd September, 2003 and demanded detailed bio-data to be furnished by all persons, who had applied for grant of off-licences for the sale of liquor, in response to the Department Notice dated 23-07-2003, in the format given in the said Notice along with duly attested affidavit. They were further required to deposit their forms by or before 15-09-2003. Notice further indicated that applicants, who had previously applied to the Excise Department prior to the issuance of the aforesaid Notice either under the current Excise Policy or the earlier Excise Policies and whose applications were entertained by the Department, may also submit their bio-data with adequate documentary proof of having applied earlier. Notice further indicated that applicants, who had previously applied to the Excise Department prior to the issuance of the aforesaid Notice either under the current Excise Policy or the earlier Excise Policies and whose applications were entertained by the Department, may also submit their bio-data with adequate documentary proof of having applied earlier. The form of bio-data, according to the averments in the petitions, is not in accord with the prescribed Rules and Policy. The form of bio-data did not contain the matters, which were required to be ascertained under Rule 30 of the Jammu and Kashmir Liquor Licence and Sales Rules, 1984, inasmuch as "no objection was not required to be obtained from various authorities and, thus, it was a complete departure from the procedure prescribed under the Rules. The form of bio-data of the applicants for grant of licence for sale of IMFL is reproduced hereunder: @Z_TBL_BEG = COLUMNS(3), DIMENSION(IN), COLWIDTHS(.4500,E1,E1), ABOVE(.1000), BELOW(.1000), HGUTTER(.0555), VGUTTER(.0555), KEEP(OFF) @Z_TBL_BODY = TABLE TEXT, TABLE TEXT, TABLE TEXT , Form of bio-data of applicant for grant of License for sale of IMFL, + 1., Date on which the original application has been received in the Excise Department, : ___________________ 2., Variety of License If Company/ Society/Partnership,, quote Reg. No. & Authority, : Individual/Partnership/Company/Society, , , : ___________________ 3., Name of applicant, : ___________________ 4., Parentage, : ___________________ 5., Resident of, : ___________________ Mohalla/Village ______ Town ______________ District _____________ 6., Location of proposes, : Mohalla/Village ______ Town ______________ District _____________ 7., Is the proposed premises:, Owned/Rented ________ 8., Name & Style of proposed premises, : ____________________ 9., Qualification of applicant, : ____________________ 10., Financial Standing of Applicant, : ____________________ 11., Value of Movable Property , : Rs. __________________ 12., Value of Immovable Property:, Rs. __________________ 12., Value of Immovable Property:, Rs. __________________ 13., Is the applicant, : Educated Unemployed,, Ex-Serviceman/None of these ____________ 14., If the applicant,, any member of his/her family/any blood relation or depen dent is in possession of any Liquor License in J&K or outside the State,, please indicate., : Owners Name:________ : Kind of License:_______ : Location:_____________ : District:__________ : Relationship:________ 15., Has the applicant ever been Convicted under the J&K Excise Act or any other Criminal Law of the Country, : __________________ 16., Has the spounse or any blood relation of the applicant ever been convicted under the J&K Excise Act or any other Criminal Law of the country, : __________________ 17., Is the applicant doing any business which requires registration with the Sales Tax Department. If so,, indicate Registration No., : __________________ 18., Is the applicant a defaulter of dues under the J&K Excise Act., : __________________ 19., Is the applicant an Income Tax Payer? If so,, indicate PAN, : __________________ 20., Any special claim for grant of License, : __________________ @Z_TBL_END = Signature of Applicant Dated: _____________ Strike off whichever is not relevant. NOTE: 1. In case of Partnership, every partner has to submit the bio-data form separately. 2. Any information being found untrue shall render the application to be rejected summarily. 8. Another notice, however, came to be issued and published in the newspaper, wherein the Excise Commissioner represented upon the report of the Committee that some more areas have been identified for the grant of off-licences for sale of IMFL. A fresh list of all the areas through out the State was notified and the applications were invited for the grant of off-licences. These applications were invited up to 6th October, 2003 with further assertion that the persons who had already filed applications need not apply again. The notice further indicated that only one application from an individual/society/partnership shall be considered by the Department. Any one, who has filed more than one application, on the last date mentioned hereinabove, shall specify a single place for which his application should be considered, failing which the Department shall be at liberty to reject all the multiple applications or randomly consider one of these for one of the places. Any one, who has filed more than one application, on the last date mentioned hereinabove, shall specify a single place for which his application should be considered, failing which the Department shall be at liberty to reject all the multiple applications or randomly consider one of these for one of the places. The position with regard to the consideration of the applications for the grant of off-licences for the sale of IMFL under the Excise Act remained in the same state till 25th February, 2004. A notice, however, came to be issued by the Excise Commissioner of the Jammu and Kashmir on 25-02-2004, whereby it was notified for the information of all the concerned that draw of lots for grant of off-licences at various places in Kashmir Division and Jammu Division, for retail vending of liquor, from amongst the applicants, who had applied to the Excise Department in response to the departmental advertisement, will be held on 27-02-2004 at 2.00 p.m. in the Excise and Taxation Complex, Panama Chowk, Jammu. The draw of lots was conducted within a day of the publication of the aforesaid notice. In the aforesaid notice, 205 locations were identified for which the draw of lots was held. The result of draw of lots also came to be notified under the said notice. The petitioners contended that only 89 locations were identified for the grant of liquor licences, whereas draw of lots has been made for 205 locations. The Excise Deptt. had mixed up those applicants, who had applied for the grant of licences before or by 22.7.03, with those who had applied subsequent thereto. It was further pleaded that more than 7000 applications were received after 22nd July, 2003 on the prescribed Format and were considered in the draw of lots without completion of any formalities. Notwithstanding, whether the applicants were educated unemployed youth and/or ex-servicemen, selection for grant of off-licences was made by draw of lots, a procedure contrary to the one prescribed under the existing Excise Policy, Excise Rules and the Excise Act, which required their applications to be considered on merits. That the petitioners further stated to have protested against the draw of lots having been drawn amongst members of the same family and also in favour of those who are kith and kin of the officers of the Excise Department, but without any positive response. That the petitioners further stated to have protested against the draw of lots having been drawn amongst members of the same family and also in favour of those who are kith and kin of the officers of the Excise Department, but without any positive response. The Excise Department was keen, according to the petitioners, to grant licences to their favourites and before the Code of Conduct for ensuing elections is enforced. That the decision for the methodology required to be adopted by holding draw-of lots was neither published, nor any guidelines or any such procedure was publically notified. It is also stated that the respondents by declaring the result of draw of lots for as many as 205 locations clearly demonstrate that 116 new places, not notified earlier, were also included without giving a chance to the petitioners to apply for such areas, and, as such, the petitioners could not apply for these places, which never came to be notified earlier. The petitioners, therefore, claim to have been deprived of the privilege of getting licences, as a result of this procedure unknown to Excise Act, Excise Rules framed thereunder and the existing Excise Policy of the Government, and, thus, clearly discriminated deliberately and intentionally by the respondents and, which action is violative of their fundamental right under Article 14 of the Constitution. 9. That the petitioners are Nari Jagran Manch and Mahila Manch-BJP and claim to look after the interest and rights of the women, who are the worst sufferers of liquor consumption and its affects on the family life. Their chief concern is to enforce prohibition of liquor in the State of Jammu and Kashmir. The sole contention of the petitioners is that the State is bound to impose prohibition, instead it is encouraging the Policy of opening of liquor vends in the State of Jammu and Kashmir. But instead doing so, the State was proliferating the liquor trade and intended to grant 200 more licences for retail sale of IMFL and country liquor in the State. Looking to the population statistics of the Jammu and Kashmir State and comparing it with other States, there is more concentration of liquor vends in Jammu province. That respondent-2 issued an Order dated 27th February, 2004, whereby 200 more licences were decided to be issued in the State in addition to the licences of liquor vends already existed in the State. That respondent-2 issued an Order dated 27th February, 2004, whereby 200 more licences were decided to be issued in the State in addition to the licences of liquor vends already existed in the State. The precise grievance of the petitioners made in all these petitions is that the State is violating its own commitment of complete prohibition by granting fresh licences to run liquor vends. Further challenge in these petitions is to the effect that State was under an obligation under Article 47 of the Constitution to impose prohibition on consumption of liquor. It is further submitted that the petitions be treated as Public Interest Litigations, as the State Government has not adhered to its own commitment in the Excise Policy; that, in principle, it has committed on 07-04-2003 to adopt a prohibition policy in conformity with the Principles already enshrined in Article 47 of the Constitution of India for total prohibition on the State/country liquor. That the provisions contained therein, though not enforceable by any Court, but the principles laid down are fundamental in the governance of the State and it is the duty of the State to apply these principles in making the law. 10. By their impugned action, the respondents, according to the petitioners, are doing more for the spread of the liquor consumption than for restricting/checking it. Against the selection of the persons for issuance of 205 liquor vends, there have been demonstrations, agitations and protests from the local public in their areas where the licences for the sale of liquor through retail vends have been granted, which too gave vent to the public anger. That apart, the whole exercise for the issuance of liquor licences has been undertaken in violation of the Excise Act and Rules framed thereunder and the Excise Policy, with impunity. That there has been a clear breach of Rule 30 of the Jammu & Kashmir Excise Liquor Licence and Sales Rules, 1984, which mandates that the Excise Commissioner will take the reasonable steps to obtain opinion of the persons which reside in the neighbourhood and are likely to be affected by their proposed intention to grant the licences, and objections are required to be invited. The opinion of the Municipality and District Magistrate is also required to be secured in case of the area, where the licence is to be granted within the Municipal limits. The opinion of the Municipality and District Magistrate is also required to be secured in case of the area, where the licence is to be granted within the Municipal limits. Further plea raised by the petitioners is that the Government though propagating openly that it has always favoured total prohibition as an ideal policy, but their action in this case is totally contrary to their declared policy than in adherence to the same. Further submission of petitioners is that the grant of licences to run retail shops for the sale of IMFL by the impugned draw of lots dated 27-02-2004, the manner the procedure has been followed, is in the exercise of arbitrary powers in pursuance of their policy, and is violative of Article 14 of the Constitution of India and, thus, deserves to be struck down. In the matters in third group of writ petitions, OWP No.204/2004 and OWP No.281/2004, the petitioners submitted that there existed a dualistic system of administration of retail sale of liquor in terms of Jammu & Kashmir Liquor Licence and Sales Rules, 1984, in the State. In terms of the aforesaid Rules, the retail sale of IMFL is organized through grant of licences of JKEL-2 by charging fixed annual fee and the sale of the country liquor is made through vends, which are auctioned on annual basis and for which licences of JKEL-9 are issued by the Excise Department. The case of the petitioners is that applications were invited from the general public for the grant of off-licences of JKEL-2 by the Commissioner Excise, J&K (respondent-2) through a public notice issued and published in all the local newspapers on 25th September, 2003. This notice was in respect of 89 off-licences outlets at various places identified by the Department in the State. The aforesaid notice also mentioned that the persons, who had earlier applied to the Department for the grant of the said licences in response to the earlier notification, need not apply afresh. The petitioners, as per averments in the writ petition, however, did not apply in view of the saturation in the market; and in the assessment of the petitioners, it was not attractive to obtain such licences for the sale of liquor on payment of huge amount as annual fee. The petitioners, as per averments in the writ petition, however, did not apply in view of the saturation in the market; and in the assessment of the petitioners, it was not attractive to obtain such licences for the sale of liquor on payment of huge amount as annual fee. In the meanwhile, the Government in its Annual Budget presented a Finance Bill and announced for restructuring the regulation of liquor sale in the State of J&K. The new measures pertain to the retail sale of liquor, which included both the Indian Made Foreign Liquor and the country liquor, and dualistic system in case of IMFL and country liquor has been done away with. Now the retail sale and distribution of country liquor, which, according to the earlier system, was through vends on auction basis, has been brought within the Indian Made Foreign Liquor network. The persons, who have been granted licences under JKEL-2, shall now be authorized to sell on retail basis all kinds of liquor, both Indian Made Foreign Liquor and country liquor from the same vends. On the presentation of the Finance Bill 2004 in the State Assembly, the Excise Commissioner, respondent-2, vide its notice dated 25-02-2004 notified that the draw of lots for grant of off-licences at various places in Kashmir and Jammu Division for retail vending of liquor, from amongst the applicants who had earlier applied to the Excise Department in response to various advertisements, is to be held on 27-02-2004 at 2.00 p.m. The grievance of the petitioners is that the persons, who had applied for the grant of off-licences in the year 2003, when dualistic system for retail sale of liquor was prevalent in the State, have been considered for the grant of fresh off-licences for 205 locations in the Jammu and Kashmir State. With the restructuring of the Policy of the liquor sale on the presentation of the Finance Bill 2004, dual system has been put to an end and retail sale of country liquor has been brought in the IMFL network. 11. With the new system for distribution and sale of the liquor having been introduced, the general public was entitled to be invited for the participation for grant of fresh licences, which has not been done in this case. 11. With the new system for distribution and sale of the liquor having been introduced, the general public was entitled to be invited for the participation for grant of fresh licences, which has not been done in this case. That this amounted to denial of opportunity to the petitioners and general public for consideration in the selection process for the grant of fresh licences for retail sale of liquor for 205 locations in the Jammu and Kashmir State, which is patently illegal and is violative of Articles 14 and 16 of the Constitution. In such event, the entire process of selection by draw of lots is unfair, discriminatory and is tainted with illegality in the eyes of law, and the select list so issued by respondent-2 vide order dated 27-02-2004 also deserves to be quashed. The respondents filed a detailed counter and submitted that a dualistic system of regulation of sale of liquor in the State exists as on date and the sale of Indian Made Foreign Liquor organized through outlets, as were granted the privilege on payment of fixed licence fee; whereas the sale of country liquor was held either through auction of vends on an annual basis or through Departmental vending in the alternative. That the High Court desired the State to formulate a Policy on issue of licences and place it before the Court in PIL (LPA) No.145/1999, titled Residents of Kunjwani and others V/s State and others. A Policy was, accordingly, enunciated by the State and notified vide Government Order No.112-F of 2001 dated 03-04-2001, and placed before the Court and the same was taken on record, which satisfied the appellants in the said PIL (LPA). The Government, however, subsequently, notified further Excise Policy vide Order No.99-F of 2003 dated 07-04-2003 read with Government Order No.156-F of 2003 dated 22-07-2003. Till the State thought appropriate to bring about a total prohibition, this recognized the need for restrictive and preventive trade in liquors. 12. The Government is further stated to have decided in the existing Policy that in processing the applications for grant of retail licences, the un-serviced areas and the demand potential from tourists point of view shall be considered of paramount importance, besides the menace of manufacture of spurious liquor, prevent interstate smuggling and arrest of boot-legging. The existing Policy further provided the priority consideration for educated unemployed youth and ex-servicemen. The existing Policy further provided the priority consideration for educated unemployed youth and ex-servicemen. Regarding the disposal of the applications already received, the Policy provided that such applications shall be treated as a class and processed along with the new applications as may be received within the prescribed time by the Government. It is further stated that the Department, in terms of the Policy, identified the locations, for which the grant of privilege for sale of IMFL could be considered, and issued a public notice on 22-07-2003 notifying such areas tentatively. The respondents further stated that in order to study and survey the unserved and underserved areas and also the areas requiring such facilities from tourism point of view, a Committee was constituted and charged with such responsibility. On the recommendations of the Committee, 89 locations were notified by the Department vide notice No.EC/STS/207/2003-04/1027-31 dated 22-09-2003 and the applications were invited from the individuals/societies/ partnerships for consideration of their cases for the grant of off-licences for the sale of IMFL under the Excise Act. It is further stated that it was invariably indicated in the notices issued from time to time that the applicants, who had earlier applied to the Department, should also supply their bio-data with poof of having applied previously. The Department, according to the respondents, received as many as 7781 applications. In the Excise Commissioners Conference held in New Delhi on 05-09-2003, the regulation of sale of liquor in the State was the main issue for discussion. A consensus reached at in the Conference was that the system of auction be done away with because it has led to creation of liquor mafia, which enjoys monopoly and which is also detrimental to the interest of the State revenue and the administration of liquor Policies as well. The States were advised to switch over to the system of fixed fee licences. 13. Based on the aforesaid consensus in the Excise Commissioners Conference in New Delhi and in consultation with the Excise Department, the Government thought of restructuring the regulation of sale of liquor in the State. The Government, after an in-depth study of the prevailing system and to achieve the objective, thought it expedient to put an end to the dualistic system of the regulation of sale of liquor and formulate a uniform mechanism for regulation through fixed fee licences. The Government, after an in-depth study of the prevailing system and to achieve the objective, thought it expedient to put an end to the dualistic system of the regulation of sale of liquor and formulate a uniform mechanism for regulation through fixed fee licences. Budget Cabinet in its meeting held on 13-02-2004 considered the proposal formulated in this behalf and a decision was taken to incorporate in the budgetary measures for the year 2004-05, with regard to the restructuring of the sale of the liquor in the State and the same was, accordingly, announced in the legislature on 20-02-2004. It is further stated that the existing country liquor vends, about 117 in numbers, were required to be converted into IMFL outlets and for which the immediate selection of licensees became essential. Also, in view of the manifest position of model Code of Conduct in the impending Parliamentary Elections, the State Government was asked to complete the budgetary process by 29-02-2004. It is in this perspective that the Department had to consider the matter regarding the procedure and the manner in which the selection of licensees for the additional IMFL vends (existing country liquor vends) could be organized within this period. The respondents also stated that the 54 areas out of 170, where country liquor vends existed presently, were already notified and included in 89 locations, inviting applications in the notice. The Department further thought it just, fair and equitable to consider the selection of licensees for additional 116 areas from amongst the applications already received. The evaluation was done by the Evaluation Committee, which recommended the rejection of duplicate applications, applications not accompanied by the prescribed documents; applications wherein the request for specified area was not indicated or if indicated, it referred to the locations other than those notified. The Department, under these circumstances, took a conscious decision and with the purpose to grant opportunity to as many applicants as possible; and even entertained all those applications, which did not pertain to the locations notified or even accompanied by the requisite documents; and also those whose applications had already been received but had not furnished their Bio-Data, despite notice issued in this behalf. The Department also decided that after excluding 89 applicants selected for 89 identified and opted locations, all the balance applications including the waiting list candidates, who could not be selected for above locations, shall be considered for each additional vend for the area for which applications were not invited and resorted to selection of applicants for grant of IMFL licences for the sale liquor by draw of lots. The respondents also stated that two draws of lots were decided to be held, one for already identified and opted areas, and other for unspecified/additional vends. The respondents further stated that so far as preference to be accorded to the educated unemployed youth and ex-servicemen is concerned, the Department decided to choose three applicants for each location, so that preference could be accorded as per the Excise Policy to the educated unemployed and the ex-servicemen. In their reply, the respondents had also indicated a chart showing category-wise result of draw of lots and preferential consideration accorded to the educated unemployed youth and the ex-servicemen. According to the respondents, the procedure adopted was approved by the Government and stood announced on spot before the draw of lots had actually taken place. The draw of lots, the respondents stated, was held on 27-02-2004 and was absolutely transparent and in full public view. It had the approval of the Government being a Policy matter and was published in the local newspaper. Further contention of the respondents is that all the petitioners, except petitioners in OWP No.204/2004, participated in the draw on the acceptance of their applications and inclusion in it by the Department. The respondents denied that the procedure adopted by draw of lots was not transparent, discriminatory and unconstitutional, nor there was any breach of Excise Act and Rules, besides the Excise Policy of the Government. All the requisite formalities provided in the relevant Rules and the enactment shall be completed by the selectee before the grant of the licence. The manner in which the wait list candidates shall be considered for the grant of licence along with selected candidates in the select list, is clearly and without ambiguity indicated in the Annexure-RD, in the select list. The manner in which the wait list candidates shall be considered for the grant of licence along with selected candidates in the select list, is clearly and without ambiguity indicated in the Annexure-RD, in the select list. The respondents further stated that completion of requisite formalities under Rule 30 of the Jammu and Kashmir Excise Liquor Licence and Sales Rules, 1984, is the official responsibility of the Excise Department and the applicants are not required to do any exercise in this behalf on their own. The procedure for the grant of licences was announced prior to the draw of lots and by a notice, subsequent to the draw, all the candidates were informed to complete the formalities under the Excise Act and the Rules before the actual grant of licences, vide specimen of the letter issued as Annexure-RG. It is also stated that consideration of pending applications for grant of licences along with such new applications that may be received by the Government within the prescribed time does not confer on them any right or title for the grant of a licence. In so far as the completion of procedure for the grant of licences is concerned, they have to be treated as a separate class, as again they will not require to obtain NOCs. So far as consideration for grant of licences is concerned, it is submitted that they have to be treated at par with the other new applications as may be received by the Department. Rule 30 of the Jammu and Kashmir Liquor Licence and Sales Rules, 1984 prescribes a definite procedure to be followed and without which a licence cannot be granted. In order to facilitate the processing of the applications in a regulated manner, the pro-forma of application was prescribed by the Department. Further contention of the respondents is that this pro-forma is neither inconsistent with the Act nor the Rule. Fresh Excise Policy has been issued on 07-04-2003 vide Government Order No.99-F of 2003 read with Government Order No.156-F of 2003 dated 22-07-2003. The Excise Policy dated 07-04-2003 came to be amended vide Government Order dated 22-07-2003. This is stated to have manifestly been done to protect the old cases to again undergo the cumbersome exercise of obtaining NOCs in case of their selection for grant of licences. The Excise Policy dated 07-04-2003 came to be amended vide Government Order dated 22-07-2003. This is stated to have manifestly been done to protect the old cases to again undergo the cumbersome exercise of obtaining NOCs in case of their selection for grant of licences. It is also submitted that no privilege is conferred on the pending applicants to grant the licences in ignoring those who may apply for such licences. The draw of lots undertaken on 27-02-2004 has taken care of both the pending applications as well as the applications received subsequently for the grant of off-licences as per Policy guidelines, rules and regulations. That in order to make procedure for choosing the persons for grant of licences for sale of liquor by retail vends, proposal of draw of lots to be adopted for the grant of licences for the retail sale of liquor was submitted to the Government for approval, vide communication dated 22-02-2004. It was after getting the approval from the Government as a matter of Policy, the proposal of draw of lots was notified on 25-02-2004. The respondents further stated that since applications were more than 7000, the draw of lots was found the only transparent, fair and reasonable method to be adopted, in the wisdom of the Excise Department. Such a procedure is stated to have found no fault, is clearly in accord with the Excise Act and the Rules framed thereunder and the provisions of the Constitution and law. Though in the notice, only 89 locations were identified, but the draw of lots was notified for 205 locations. This was done because the Government has put to an end to the system of auction of country liquor and, consequently, increased the number of locations available with the Department for the grant of off- licences for the sale of liquor by retail vends. All the applications received before and after 22-07-2003 were considered for all the places as per the Excise Policy in force. The proposed procedure for the grant of licences by draw of lots was decided by the Excise Commissioner and the Government had put its seal in granting the approval. All the applications of the applicants pending and fresh received subsequently were included in the process. The proposed procedure for the grant of licences by draw of lots was decided by the Excise Commissioner and the Government had put its seal in granting the approval. All the applications of the applicants pending and fresh received subsequently were included in the process. Further contention of the respondents is that the rules and regulations, all the formal requirements and the procedure in the matters are all within the purview of the Government and it is in pursuance of the policy, switch over to the new system from Ist April, 2004 was imminent and draw of lots was made on account of this urgency. The respondents submitted that the entire process was transparent, fair and reasonable and as per the rules and regulations and provisions of the Excise Policy and, thus, does not violate any provisions of the Constitution. As regards the case of the petitioner, Vivek Kumar, son of Jagdish Chander, it was processed in 1998-99, but could not be considered for the grant of off-licence on account of stay orders. After the vacation of the stay, the Excise Policy issued by the Government on 03-04-2001 was in vogue. In terms of this Policy, grant of off-licences was normally denied except in exceptional circumstances and the case of the petitioner was not covered by the exceptions. But no exceptional circumstances were found to enable the grant of the licence at Tikri. It is also stated that in view of the fresh Excise Policy enunciated by the Government, the petitioner could not claim any privilege for the grant of off-licence. After the notification for Tikri on 22-07-2003, the case of the petitioner was to be considered only along with other eligible persons, whose applications were received by the Department. 14. The Excise Department informed Vivek Kumar about this fact vide order No.162 of 2003 dated 08-09-2003 issued in compliance with the order dated 03-09-2002 passed by this Court in SWP No.803/2002. The fresh Excise Policy, however, though initially did not recognize petitioner, Vivek Kumar, as a privileged candidate, but, subsequently, it was provided that the pending cases would be considered along with new applications received in response to the notification made in this behalf. The fresh Excise Policy, however, though initially did not recognize petitioner, Vivek Kumar, as a privileged candidate, but, subsequently, it was provided that the pending cases would be considered along with new applications received in response to the notification made in this behalf. The respondents further pleaded that the petitioner does not get the right vested for grant of a licence mere on completion of the formalities, but would only be beneficial on his selection for the grant of licence in comparison to other eligible applicants. The petitioner was to be treated as a separate class and by virtue of this Policy, he does not require to complete the procedure as envisaged under Rule 30 of the Excise Act and Rules framed thereunder, and the case of the petitioner is also stated to have been considered along with other eligible applicants for the licence at Tikri, but was not found selected in draw of lots for a particular location. The petitioner, Vivek Kumar, was also considered for other 116 locations separately. It is further submitted that the entire process undertaken by draw of lots was transparent and simple, and did not offend any provision of either Excise Act or Excise Rules or the Excise Policy formulated by the Government, for being without any discrimination. The observance of the Excise Act and the Rules were also stated to have been observed even at the time of the grant of licence. Draw of lots does not mean that the licences have been granted to the selected persons. Where selected candidates fail to fulfil the requisite formalities, the candidates placed in waiting list will be considered in order of precedence. 15. As a matter of fact, under the new Excise Policy, by which the distribution of the country liquor has been brought in the network of IMFL in dispensing with the system of auction, the draw of lots was made for 205 locations instead of 89 locations notified earlier. Against the enhanced locations, all the petitioners in the writ petition were considered along with other candidates, who were not successful in the draw of lots for 89 locations, and special care has been taken that no discrimination is made with the preferential categories. Against the enhanced locations, all the petitioners in the writ petition were considered along with other candidates, who were not successful in the draw of lots for 89 locations, and special care has been taken that no discrimination is made with the preferential categories. Procedure to be adopted for draw of lots is clearly indicated in the communication of the Excise Commissioner dated 22-02-2004 in general and also for candidates from the preferential categories, viz., educated unemployed youth and ex-servicemen, in particular. Out of the total applications received by the Excise Department, 7334 applications from the aspirants for grants of liquor licences were considered in the draw of lots for 89 locations. Three candidates have been chosen for each location, with first candidate indicated as selected and second and third figured in the waiting list for particular location. If the first candidate is from general category, the second/third candidate is from the categories of educated unemployed youth and ex-serviceman. The candidates from the preferential categories would be placed as above the candidates of the general category and graded as selected. First draw of lots was made for 89 notified locations and second for 116 locations, in which all candidates including those figured in wait list were considered. Only the candidates, viz., 89 persons, selected in the first draw of lots were excluded from the second draw of lots and, thus, as submitted by the respondents, is a transparent and unambiguous procedure. The procedure followed by draw of lots for the grant of licences in IMFL could, therefore, be legal and not arbitrary, ruling out all possibilities of any favouritism and nepotism, in the electronic device of draw of lots. It is further stated that for the first time, a notification was issued on 22-07-2003 inviting applications from the persons desirous of granting of liquor licences. The applicants having their applications pending on that date were also asked to furnish their bio-data and their applications, as per the amended provisions of the Policy dated 22-07-2003, were to be considered along with fresh applications. The applicants having their applications pending on that date were also asked to furnish their bio-data and their applications, as per the amended provisions of the Policy dated 22-07-2003, were to be considered along with fresh applications. The respondents also submitted that to remove discrimination and eliminate all possibilities of favour or extraneous influence in the grant of liquor licences, the only fair and transparent mode was draw of lots and in no other manner, and, thus, it cannot be termed as either against the Excise Policy or the provisions of Excise Laws, Rules and Regulations. The petitioners have been considered, as is stated by the respondents, for all 116 locations, for which whether or not they had applied. As regards the matter covered by the third group of writ petitions, the respondents-State in their detailed reply through Advocate General, submitted that, as on date, dualistic system of regulation of sale of liquor existed in the State. The sale of IMFL was organized through payment of fixed licence fee, whereas sale of country liquor was operated through auction of vends on an annual basis or through departmental vending in the alternative. Based on the conference of the Excise Commissioners held at New Delhi, its recommendations were considered by the State in consultation with the Excise Department for restructuring the regulation of sale of liquor in the State. An in-depth study of the existing system was made and keeping in view the objective perceived, the State Government thought to shun the dualistic system of regulation of sale of liquor and carve out a uniform mechanism through fixed fee licences for its regulation. The Budget Cabinet in its meeting held on 13-2-2004 considered the formulated proposals. Since the decision in this regard involved a momentous departure from the existing system, the same was decided to be incorporated in the budgetary measures for the year 2004-05 and when the budget was presented in the State Legislature on 20-02-2004, the decision of restructuring the sale of liquor was announced by the Finance Minister. The existing country liquor vends were required to be converted into IMFL outlets as a follow up measure, which necessitated an imminent change in the rules applicable on the subject and selection of licensees became imperative. The existing country liquor vends were required to be converted into IMFL outlets as a follow up measure, which necessitated an imminent change in the rules applicable on the subject and selection of licensees became imperative. It was further stated that in view of the Parliamentary Elections and imposition of model Code of Conduct, the Government was asked to conclude the budgetary process by 29th February, 2004. The Excise Department having left with only a little more than a weeks time to consider the matter pertaining to the procedure and the manner in which the selections of licensees for additional IMFL vends (existing country liquor vends) could be organized within this time. It is further submitted that 54 areas out of 170 in which the country liquor vends already existed, stood already notified and included in 89 locations in the notice inviting applications. A preliminary scrutiny of the applications, more than 7000, received in response to the notice issued for 89 locations, was made and 447 applications stated to have been received in duplicate, whereas in 759 applications, areas/places, for which the privilege was sought, had not been indicated and in some earlier applications (old cases), some had not furnished their bio-data. The Evaluation Committee, appointed in this behalf, recommended the rejection of duplicate applications; applications not accompanied with the prescribed documents and the applications wherein request for specified areas was not indicated, or if indicated, it pertained to the locations other than those notified within the shortest possible time. Excise Department thought and decided that after ignoring 89 identified applications, which could be selected for 89 identified and opted locations, all the remaining applications including the wait listed candidates, shall be considered for each additional vend for which areas, specified in the applications were not notified, and followed the procedure of draw of lots. That two draws of lots were organized - one for identified/opted locations and other for unspecified and additional vends. It is also stated that in doing so, preference to be accorded to the educated employed youth and ex-servicemen was also taken care of, as per Excise Policy and decided to choose three applicants for each location. It is further stated that for this purpose, the procedure suggested by the Excise Commissioner was approved by the Government and stated to have been announced on spot before the draw of lots actually took place. It is further stated that for this purpose, the procedure suggested by the Excise Commissioner was approved by the Government and stated to have been announced on spot before the draw of lots actually took place. The respondents further stated to have organized electronic draw of lots in presence of public and for which publicity in advance was given to this procedure. That the complete transparency and fairness in the procedure, adopted by draw of lots, is visible for having been organized in full public gaze. Preferential treatment was given to the candidates of the categories, as laid down in the Excise Policy notified vide Government Order No.99-F of 2003 dated 07-04-2003 to be read with Government Order No.156-F dated 22-07-2003. The respondents also stated that all the 89 locations notified earlier by the Department were prime locations and had the petitioners been really interested to participate in the draw of lots, they would have, in response to the departmental advertisement, applied. That the procedure adopted by the department cannot be challenged by the petitioners having neither any locus standi nor any of their right having been infringed/violated. Trade in liquor is a privilege of the State and the State is free to set conditions, terms and policy for its operation. It is by compulsion that the State is permitting the trade in liquor to save the people to lean towards spurious liquor or other intoxicating substances, which could prove fatal, besides being health hazardous to the consumers. In draw of lots for 205 prime locations, the candidates, whose applications had already been received up to 06-10-2003 in pursuance of notification issued by the department for 89 specified areas, were considered. Country liquor vends, 170 in number, were already operating in the State and only a switch over to IMFL network as a sequel to the measure has been done. Added 35 new locations have been notified for inviting applications. It is also stated that there has been no change from the economic angle but only the country liquor has come to be sold in the premises of JKEL-2 licences, which earlier was sold under licence JKEL-9. Full opportunity was provided to general public to participate in the allotment of licences. It is also stated that there has been no change from the economic angle but only the country liquor has come to be sold in the premises of JKEL-2 licences, which earlier was sold under licence JKEL-9. Full opportunity was provided to general public to participate in the allotment of licences. All the applications received in response to the advertisement notice were considered for 205 locations, out of which 89 had already been identified locations and licences were required to be issued for remaining 116 locations, as against 170 country liquor vends already existed. Respondents further contended that the draw of lots was made out of the applications received from the public in general and the whole process was open, fair and through media notified earlier. This is further stated to have been borne out from the number of applications received for 205 locations and the applicants participated in the draw of lots. The respondents further emphatically refuted the petitioners contention that the State largesse has been distributed to selected few in an arbitrary, illegal and irrational manner without inviting fresh applications under the new Scheme and deprived them of their right to participate for the grant of licences. 16. Mr. U.K. Jalali, Senior Advocate along with Ms. Ruchi Bakhri, M/s S.S. Jamwal, Ajay Singh Sahi and Surinder Singh, Advocates, appeared for private-respondents-4, 5, 7, 8, 9, 10, 11, 12, 13, 14, 17, 19, 20, 21, 22, 23, 25 to 28, 30 to 34, 36, 38, 41 to 60, 62, ,65 to 68, 70, 72 to 84, 86 to 110, 112, 115 to 124, 126, 129 to 133, 136, 137, 139 to 144, 146, 147, 149 to 155, 157 to 160, 162 to 170, 172, 174 to 182, 186, 187, 191 to 193, 195 to 202, and 204 to 207 in OWP No.204/2004. Mr. U.K. Jalali, learned senior Advocate appearing for some of the private-respondents in OWP No.204/2004, submitted that trade in liquor, being restricted and a privilege, is granted on payment of licence fee, and the manner in which it was granted, viz., draw of lots, in view of the new Liquor Policy, required to be implemented in a time bound window before the budget proposals were to be concluded. There could be no other transparent, reasonable, viable, open and fair method, and best suited to the circumstances. There could be no other transparent, reasonable, viable, open and fair method, and best suited to the circumstances. What is required to be seen is, whether in the circumstances, the decision lacked good faith, can be dubbed as irrational, tempered with a predisposition of mind, absurd or perverse. His further submission is that judicial review in the matters pertaining to parting of State privilege in respect of trade in liquor, which is restricted in nature, is permissible only in exceptional cases. Where the decision is not tainted with unreasonableness, lack of application of mind in selecting people out of the applications received by draw of lots, cannot be said to have suffered from procedural impropriety. Further submission of Mr. Jalali is that the State can adopt any mode of selling the licence for trade or business in liquor with a view to maximize its revenue, especially when the trade of liquor is the State monopoly and can only be passed on as a privilege to those who seek licence under the rigours of rules and policy the State may adopt. Therefore, it should not be confused with the power of the State to prohibit or regulate the trade or business in question by charging fee and extending it to a broader spectrum of people in the society including educated unemployed youth and ex-servicemen in giving them preferential treatment in accordance with the Excise Policy of the State. That once the selection process has started, it is difficult to ensure the participation of all the aspirants, and the applicants, who had completed the formalities, have been offered the proposed licences subject to fulfillment of the conditions explicitly indicated therein. The procedure of draw of lots to be adopted for final selection in granting the licence to trade in liquor was made public when notified in Daily Excelsior and Kashmir Times on 25th February, 2004. Even prior to that also, the Excise Commissioner informed the Finance Commissioner vide his letter dated 22.02.2004 of his proposal for final selection by draw of lots. It is also stated that none came forward to agitate the decision of the Excise Commissioner to adopt the procedure for grant of liquor licences by draw of lots till the final list came to be published on 27-02-2004. Mr. It is also stated that none came forward to agitate the decision of the Excise Commissioner to adopt the procedure for grant of liquor licences by draw of lots till the final list came to be published on 27-02-2004. Mr. Jalali further submitted that shift in policy was to ensure that the liquor vends, which were concentrated in few hands, could be distributed to many people providing a source of livelihood to those, who had applied for it and there is no deviation from the policy of restricted trade but only put to an end to the dualistic system of selling of country liquor and brought it within network of IMFL. The participation of more than 7,000 people in the selection by draw of lots itself confirms the fairness, openness and transparency in the process and not inconsistent to the rules and regulations and the Excise Policy of the State. 17. Mr. Sunil Sethi, Advocate appearing for private-respondents-3, 6, 15, 16, 18, 24, 29, 37, 39, 40, 61, 63, 64, 69, 71, 85, 111, 113, 114, 125, 127, 128, 134, 135, 138, 145, 148, 156, 161, 171, 173, 183, 184, 185, 188, 189, 190, 194, 203 in OWP No.204/2004, in his reply submitted that the draw of lots has been held publicly and was a transparent and fair process for grant of off-licences in which the respondents having been declared successful and selected for the grant of licences for trade in liquor. There has been neither any violation of the rules and regulations and the provisions of the Excise Act nor the Excise Policy formulated by the State. All the persons, who had applied for the off-licences and completed the formalities, were invited to participate, in the draw of lots. That respondent-2 had given a wide publicity prior to the holding of the draw of lots for grant of liquor licences and electronic draw of lots was organized on 27-02-2004 in full public view. That since the Government had abolished the country liquor vends, which earlier used to be auctioned, it increased the number of locations from 89 to 205, so as to bring the country liquor vends within the network of IMFL. That since the Government had abolished the country liquor vends, which earlier used to be auctioned, it increased the number of locations from 89 to 205, so as to bring the country liquor vends within the network of IMFL. The increase in the locations from 89 to 205 did not, in any manner, violate the fundamental rights of the petitioners nor was an exhibition of any illegality committed by the official-respondents in finalizing the selection process for grant of licences. His submission is that the candidates of preferential categories, viz., educated unemployed youth or ex-servicemen, have been graded as selected and placed above the candidates of general category. This itself is evident that the respondents have taken care of specifics, and the procedure adopted for selection by electronic draw of lots is fair and transparent. That the respondents have acted strictly in accordance with the Excise Policy framed by the Government from time to time and consistent with the Excise Act and the rules and regulations made therein. That since the petitioners admitted to have not applied for the grant of liquor licences in the year 2003 in pursuance of the notification issued by respondent-2, they are estopped to rack up this issue now when the process of the grant/issuance of licences is over. That there is nothing even to remotely suggest that the process for selection by electronic draw of lots adopted by the official-respondents, in any manner, either violated the Excise Policy announced by the Government or is contrary to the rules and regulations and provisions of the Excise Act. That more than 7,000 applications were received, as a result of notification issued by official-respondents, and the applications of those candidates, who had completed the formalities, have been duly considered for all 205 locations. The trade in liquor being a privilege of the State, no citizen has fundamental right to claim the grant of a licence in this trade and this privilege is being parted by the State only with a view to save the public from consuming spurious liquor which can create havoc to the public being health hazard. 18. Mr. The trade in liquor being a privilege of the State, no citizen has fundamental right to claim the grant of a licence in this trade and this privilege is being parted by the State only with a view to save the public from consuming spurious liquor which can create havoc to the public being health hazard. 18. Mr. A.H. Naik, learned Advocate General, in reply to Writ Petitions No.284/2004 and No.285/2004, reiterated the stand of the State and submitted that the State of Jammu and Kashmir, as a matter of Policy, is committed to bring about prohibition on consumption of liquor, so as to improve the public health, as ordained in the Directive Principles enshrined in the Constitution. It was further emphasized that an attempt aimed at total prohibition by any individual State in isolation rather than serving the objective, defeated the same and each such State has suffered not only in terms of revenue loss but more importantly due to the growth of unlawful activities of the bootleggers, who have all through been involved in the activities, which seriously jeopardize the public health and social welfare. Further submission of the learned Advocate General is that the State enjoys the exclusive privilege, in view of this backdrop, for manufacture and sale of intoxicating drinks. The grant of this privilege in favour of any person by the State has to be clearly distinguished from the right of freedom of trade and commerce, guaranteed by the Constitution. It is further stated that no fundamental right can be claimed by a citizen to carry on business in liquor and the restrictions imposed by law on consumption of liquor cannot be challenged as violative of Article 19(1)(g), as this cannot be regarded as a `trade or business within the meaning of the said Article. The trade in liquor is regulated by the State through various provisions of the Excise Act, Rules and Regulations made therein and the Excise Policy announced from time to time in this regard. It is further denied that in view of the object already made explicit in the Policy for issuance of liquor licences in the State, it is too far gone to say that the decision of the respondents is in violation of the declared Policy of the State Government. It is further denied that in view of the object already made explicit in the Policy for issuance of liquor licences in the State, it is too far gone to say that the decision of the respondents is in violation of the declared Policy of the State Government. That the Government is fully conscious of its commitment so far as its Policy and commitments in regard to trade in liquor in the State are concerned and a highly restrictive approach is being followed in issuing the licences, after having due regard to the public sensitivities and also to the factors as public nuisance, environmental pollution etc. 19. The paramount considerations of the present Excise Policy, i.e., to arrest the menace of manufacture of spurious liquors, arresting the bootlegging, preventing of inter-State smuggling and servicing the requirements of tourism, were strictly kept in mind. The grievances raised in this petition were subject matter of consideration in PILs, viz., LPA No.145/1999, under the title of Residents of Kunjwani and others v. State and others as well as PIL No.803/2001, Vaid Vaishno Dutt and others versus State and others, filed and have been disposed of by the Division Bench of this Court. The issues have been finally set at rest by the Division Bench of this Court, need no fresh consideration in this petition, and desired to formulate a Policy on the issue of licences. The Excise Policy announced by the State Government vide Government Order No.112-F of 2001 dated 03-04-2001 and subsequently notified vide Government Order No.99-F dated 07-04-2003 read with Government Order No.156-F of 2003 dated 22-07-2003 is in recognition of the need for restrictive and regulative trade in liquors till the time it is considered appropriate to bring a total prohibition. The official-respondents, it is stated, therefore, have not violated any provision of law nor have taken any action in violation of the directive principles of the State Policy. The draw of lots was merely a selection for issuance and not grant of licences. This mode was adopted after making full scrutiny of the persons to whom licence is granted and also the place at which it is granted. That the present Excise Policy is in full agreement with law and the Constitution. The places were identified for grant of licences after complete study and full survey of the localities. This mode was adopted after making full scrutiny of the persons to whom licence is granted and also the place at which it is granted. That the present Excise Policy is in full agreement with law and the Constitution. The places were identified for grant of licences after complete study and full survey of the localities. It is also stated that the Excise Policy is meant for abolition of use of spurious liquor, which creates health hazards and to aim at to put check on bootlegging and smuggling of liquor and to cater to the needs of the tourists visiting in the State. The Excise Policy announced by the Government is stated to be an endeavour for making move towards prohibition, fully conscious of the spirit of the Constitution. That the new vends have been notified for almost all the areas and the localities, where country liquor vends already existed. So the present Excise Policy and the opening of the liquor vends is in accord and not in collusion with the provisions of the Constitution. 20. I have heard the learned counsel appearing for the respective parties in great length and with their assistance, gone through large number of judgments referred by them. Record produced on 25-05-2004 by the Excise Department has also been perused meticulously. 21. The counsel for the petitioners have broadly made the following submissions: (i) that the fundamental right available to the petitioners, in matters relating to the issuance of liquor licences or trade in liquor, is only under Article 14 of the Constitution and that the said right of the petitioners has been violated; (ii) That in terms of the Policy relating to the year 2003-04, the petitioners have right of consideration for grant of JKEL-2 licences and the consideration had to be accorded to the petitioners on merits in terms of the Policy amended vide Government Order No.156-F of 2003 dated 22-07-2003. Since the issue of grant of licences was not considered on merits, therefore, the respondents have acted in contravention of the Policy; (iii) That the Policy, as amended vide Government Order (supra), required the Licensing Authority to grant licences after according consideration on merits and this was the only procedure prescribed by the Government and it was binding on the Excise Commissioner to act in accordance with the prescribed procedure. The Licensing Authority having acted otherwise, has contravened the Policy; (iv) That the Excise Commissioner has acted without jurisdiction in resorting to draw of lots as the procedure for grant of licences when draw of lots was not prescribed as procedure under the Policy for 2003-04; (v) That even in draw of lots, various irregularities have been committed and some persons have been shown twice and even more times as prospective licensees; (vi) That by resort to draw of lots, the objective of the Policy has been defeated; (vii) That the petitioners had legitimate expectation in terms of amended Policy that they would be accorded consideration by proper application of mind and their cases would be considered on merits; (viii) That by resorting to unexpected and certain procedure of draw of lots, the legitimate expectations of the petitioners were dashed to ground and, thus, they were prejudicially affected; (ix) That the Excise Commissioner had resorted to draw of lots, under draft Excise Policy for the year 2004-05, which Policy had not been approved and was yet to be notified. (x) That the action of the respondents is contrary to the provisions of the Excise Act and the Rules framed thereunder; (xi) That the grant of fresh licences and opening of new vends is contrary to the commitment of the State of Jammu and Kashmir, as a matter of policy, to bring about prohibition on consumption of liquor, as ordained in the directive principles enshrined in the Constitution. Where as the submissions on behalf of the respondents made were broadly as under: (a) That the Policy on which the reliance is placed by the petitioners has no statutory force and this is meant for guidance of the Excise Commissioner and not for the petitioners and that the petitioners had no right to trade or privilege to deal in liquor and that no person can claim any fundamental rights, in any form, to trade in liquor; (b) That the Government, for the first time, has resorted to uniformity and transparency, and the procedure of draw of lots was adopted by the Excise Commissioner in his wisdom and, thus, cannot be faulted; (c) That the petitioners have participated in the process of selection and are failed and, thus, the petitioners cannot challenge the very process of selection; (d) That the Excise Rules do not create any obligation to grant of licences and that the Excise Commissioner, being bound by the Rules, he was not required to grant licences to the petitioners, as they had no right to any licence; (e) That regard being had to the nature of trade, it is administrative discretion of the Licensing Authority to issue/grant licences; (f) That to deal in a liquor trade is only a privilege and not a right; (g) That the change in Policy, by resorting to draw of lots for purposes of identifying prospective licensees, is neither irrational nor arbitrary or perverse; (h) That the Court cannot substitute its own view for that of Licensing Authority and the matter was not subject to judicial review; (i) That prior to 07-04-2003, there was never any advertisement inviting applications for grant of liquor licences and that it is for the first time that the Government and the Excise Commissioner have resorted to open public invitation for grant of licences, and such an action on the part of the Government and its functionaries is fair, reasonable and cannot be viewed in bad taste. The petitioners mainly relied upon the judgment of the Apex Court in Doongaji and Co. v. State of Madhya Pradesh, AIR 1991 SC 1947, wherein it is held as under: "It is settled law by several decisions of this Court that there is no fundamental right to a citizen to carry on trade or business in liquor. The petitioners mainly relied upon the judgment of the Apex Court in Doongaji and Co. v. State of Madhya Pradesh, AIR 1991 SC 1947, wherein it is held as under: "It is settled law by several decisions of this Court that there is no fundamental right to a citizen to carry on trade or business in liquor. The State under its regulatory power has power to prohibit absolutely any form of activity in relation to an intoxicant, its manufacture, possession, import and export. No one can claim, as against the State, the right to carry on trade or business in any intoxicants, nor the State be compelled to part with its exclusive right or privilege of manufacture, sale, storage of liquor. Further when the State has decided to part with such right or privilege to the others, then State can regulate consistent with the principles of equality enshrined under Art.14 and any infraction in this behalf at its pleasure is arbitrary violating Art.14. Therefore, the exclusive right or privilege of manufacture, storage, sale, import and export of the liquor through any agency other than the State would be subject to rigour of Art.14. Vide Har Shanker v. Dy. Excise & Taxation Commr., (1975) 2 SCR 254 : AIR 1975 SC 1121) and State of M.P. v. Nandlal Jaiswal, (1987) 1 SCR 1 : (AIR 1987 SC 251)" 22. Mr. Z.A. Shah, learned counsel appearing for the petitioners, in controverting the contention of the Advocate General that the liquor licences cannot be connected with the ordinary licences and it is the privilege of the State and the State could, therefore, deal with it only, submitted that arbitrariness of the State or its functionaries are always bound to judicial review. He further challenged that the privilege of the Government to grant licences for the sale of liquor cannot be kept away from the gaze of judicial scrutiny when such action ex-facie is arbitrary and is abuse of power or colourable exercise of power under the garb of authority vested in them under the provisions of law. A citizen may not be able to claim as of fundamental right to trade or business in liquor and, consequently, Article 14 may not be infringed. The reliance was placed upon the decision of the Apex Court in State of Madhya Pradesh and others, etc. etc. v. Nandlal Jaiswal and others etc. A citizen may not be able to claim as of fundamental right to trade or business in liquor and, consequently, Article 14 may not be infringed. The reliance was placed upon the decision of the Apex Court in State of Madhya Pradesh and others, etc. etc. v. Nandlal Jaiswal and others etc. etc., AIR 1987 SC 251, wherein it was held as under: "32...There is no fundamental right in a citizen to carry on trade or business in liquor. The State under its regulatory power has the power to prohibit absolutely every form of activity in relation to intoxicants - its manufacture, storage, export, import, sale and possession. No one can claim as against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor. But when the State decides to grant such right or privilege to others the State cannot escape the rigour of Article 14. It cannot act arbitrarily or at its sweet will. It must comply with the equality clause while granting the exclusive right or privilege of manufacturing or selling liquor. It is, therefore, not possible to uphold the contention of the State Government and respondents Nos.5-11 that Article 14 can have no application in a case where the licence to manufacture or sell liquor is being granted by the State Government. The state cannot ride roughshod over the requirement of that Article." "33. But, while considering the applicability of Article 14 in such a case, we must bear 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 would, 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. The Court would, 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. Moreover, the grant of licences for manufacture and sale of liquor would essentially be a matter of economic policy where the court would hesitate to intervene and strike down what the State Government had done, unless it appears to be plainly arbitrary, irrational or mala fide." Learned counsel appearing for the petitioners further submitted that, undoubtedly, the State Government has discretion to formulate its Policy and impose such restrictions for grant of licences for the sale of liquor and other banned items in the manner the State considers it proper and beneficial to the State revenue. Once the State has formulated and announced such Policy, which, according to the State, is in consonance of the provisions of law applicable, the State must act fairly, and its decision vis-…-vis the citizens must not be arbitrary. His further submission is that, in fact, such is the consistent view starting from Cooverji B. Bharucha v. Excise Commissioner and the Chief Commissioner, Ajmer and Ors., AIR 1954 SC 220, wherein it has been held that it is open to the petitioner under Article 226 of the Constitution to approach the High Court for a mandamus, if the officers have conducted themselves not in accordance with law or if they have acted in excess of their jurisdiction. Again in Ramana Dayaram Shetty v. The International Airport Authority of India and others, AIR 1979 SC 1628, while dealing with the proposition that the Government cannot choose to exclude persons, the Apex Court held as under: "21. This rule also flows directly from the doctrine of equality embodied in Art.14. It is now well settled as a result of the decisions of this Court in E.P. Royappa v. State of Tamil Nadu, (1974) 2 SCR 348 : (AIR 1974 SC 555) and Maneka Gandhi v. Union of India, (1978) 1 SCC 248 : (AIR 1978 SC 597) that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory: it must not be guided by any extraneous or irrelevant consideration, because that would be denial of equality. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory: it must not be guided by any extraneous or irrelevant consideration, because that would be denial of equality. The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Article 14 and it must characterize every State action whether it is under authority of law or in exercise of executive power without making of law. The State cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm, which is rational and non-discriminatory. This principle was recognized and applied by a Bench of this Court presided over by Ray, C.J., in Erusian Equipment and Chemicals Ltd. v. State of West Bengal, (AIR 1975 SC 266) (supra) where the learned Chief Justice pointed out that `the State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of black-listing has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of black-listing - a citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling - It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. It must, therefore, follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground." In Khoday Distilleries Ltd. and others v. State of Karnataka and others, (1995) 1 SCC 574, it has been held that when the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. 23. It is needless to make reference to the various judgments referred to by the parties to the effect that there is no fundamental right to do trade or business in intoxicants. The State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants - its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State and without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants. However, once the State Government has framed the Rules for grant of privilege of sale of liquor and announced Policies from time to time, the State cannot act arbitrarily and discriminately, and it must comply with the equality cause while granting the exclusive right or privilege of manufacturing or selling liquor. It cannot be said that Article 14 has no applicability in a case where licence to sell liquor is granted by the State Government, but while considering the applicability of Article 14, the Court would be slow to interfere with the policy laid down by the Government. But the State Government cannot choose to come forward with the Rules or instructions or blatantly deviate from its announced Policies for the grant of such privilege. 24. Mr. But the State Government cannot choose to come forward with the Rules or instructions or blatantly deviate from its announced Policies for the grant of such privilege. 24. Mr. A.V. Gupta, learned counsel appearing for the petitioners, in support of his contention for total prohibition in the State, placed reliance on the judgment of the Apex Court in Synthetics and Chemicals Ltd. and others v. State of U.P. and others, (1990) 1 SCC 109, wherein it is held as under: "106. The concept of royal privilege has been derived historically from England as Great Britain continues to be a monarchy with democracy. The Head of the State is the Crown. It was on these bases that what has not been provided for was supposed to be the privilege of the Crown but under Indian Constitution the Head of the State and the three functionaries of the State, the Executive, the Legislature and the judiciary have their powers defined under the Constitution. There is nothing like privilege vested in any one of the functionaries of the State in the background of this basic features of our Constitution the doctrine of privilege is difficult to reconcile with if we examine this privilege of trading in commodities injurious to health and dangerous to life in the context of Article 21 and Article 47 of our Constitution." "107. Article 21 of the Constitution reads: "21. Protection of life and personal liberty.-No person shall be deprived of his life or personal liberty except according to procedure established by law." This article casts a duty on the State to protect the life of every citizen except as is provided under Article 21. If we compare this duty of the State with the scheme of privilege which means that the State has a privilege to endanger human life (the life of a citizen) such a privilege runs contrary to Article 21. Another significant article of our Constitution is Article 47. It reads as under: "47. If we compare this duty of the State with the scheme of privilege which means that the State has a privilege to endanger human life (the life of a citizen) such a privilege runs contrary to Article 21. Another significant article of our Constitution is Article 47. It reads as under: "47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health.-The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health." This article appears in the chapter of Directive Principles of State Policy. Inclusion of this article in this chapter clearly goes to show that it is the duty of the State to do what has been enacted in Article 47 and in fact this article starts with the phrase "Duty of the State" and the duty is to improve public health and it is further provided that this duty to improve public health will be discharged by the State by endeavouring to bring about prohibition. It sounds contradictory for a State which is duty bound to protect human life, which is duty bound to improve public health and for that purpose is expected to move towards prohibition claims that it has the privilege of manufacture and sale of alcoholic beverages which are expected to be dangerous to human life and injurious to human health, transferring this privilege of selling this privilege on consideration to earn huge revenue without thinking that this trade in liquor ultimately results in degradation of human life even endangering human life and is nothing but moving contrary to the duty cast under Articles 21 and 47 and ideal of prohibition enshrined in Article 47. In view of Articles 21 and 47 with all respect to the learned Judges who so far accepted the privilege doctrine it is not possible to accept any privilege of the State having the right to trade in goods obnoxious and injurious to health." Whereas the learned counsel appearing for the respondents, on other hand, in support of their contentions, relied upon the decision of the Apex Court in case entitled Ugar Sugar Works Ltd. v. Delhi Administration and others, (2001) 3 SCC 635: "17. Faced with the settled legal position that there is no fundamental right to trade in liquor, learned counsel for the petitioner did not pursue the argument based on Article 19(1)(g) to question the competence of Delhi Administration to take a policy decision with regard to regulating trade in liquor and laying down various regulatory measures and in our opinion rightly so. Learned counsel, however, mounted his challenge to the impugned notification based on Article 14 principally on the ground that the policy as reflected in the impugned notification was irrational and that raising of MSF requirements over the previous years figures with a view to regulate the "quality of liquor" being sold in Delhi was arbitrary and has no nexus with the object sought to be achieved, viz., to provide liquor of good quality to the consumers in the National Capital Territory of Delhi. It was also urged that the policy is discriminatory and as a result of the policy, small-scale manufacturers with good quality of liquor, were likely to be deprived of their marketing brand within the potential market of Delhi, in case they do not achieve the prescribed MSF outside Delhi and that would result in leaving the field wide open only for big business houses who would retain their monopoly in Delhi market." "18. The challenge, thus, in effect, is to the executive policy regulating trade in liquor in Delhi. It is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. It is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy. In tax and economic regulation cases, there are good reasons for judicial restraint, if not judicial deference, to judgment of the executive. The courts are not expected to express their opinion as to whether at a particular point of time or in a particular situation any such policy should have been adopted or not. It is best left to the discretion of the State." 25. Again in State of Andhra Pradesh and others, etc. v. McDowell and Co. and others etc., AIR 1996 SC 1627, Honble Supreme Court held that because of its vicious and pernicious nature, dealing in intoxicating liquors is considered to be res extra commercium (outside commerce). Article 47 of the Constitution, it pointed out, requires the State to endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and all drugs, which are injurious to health. For the same reason, the Court held, the State can create a monopoly either in itself or in an agency created by it for the manufacture, possession, sale and distribution of liquor as a beverage. The holding is emphatic and unambiguous. In this view of the matter, any argument based upon Article 19(1)(g) is out of place. It further held that it is the nature of the business, therefore, an important element in deciding the reasonableness of the restrictions. It is further held that if an enactment is challenged as violative of any of the fundamental rights guaranteed by Clauses (a) to (g) of Article 19 and so on, it can be struck down only if it is found not saved by Article 19 and so on. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating it. It cannot be struck down on the ground that the Court thinks it unjustified. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating it. It cannot be struck down on the ground that the Court thinks it unjustified. In this connection, it may be uttered that even in the case of administrative action, the scope of judicial review is limited to three grounds, viz., (i) unreasonableness, which can more appropriately be called irrationality; (ii) illegality; and (iii) procedural impropriety. In M/s Rishi Pal & Co. v. State of Himachal Pradesh and others, AIR 1999 SC 541, the Supreme Court, while dealing with the powers of the Commissioner to change the mode of grant of licences, held as under: "5..The Rule entitles the Financial Commissioner to grant licences by the modes of auction, negotiations, private contract, allotment, tenders and any other arrangement or mode which he considers expedient. It also entitles the Financial Commissioner, by order in writing, to change the mode of granting the licence prior to its grant for a financial year. We do not find in this Rule, or anywhere else, any restriction in regard to the regrouping of vends. If, for any reason, the bids at an auction cannot be accepted, the Financial Commissioner can decide to resort to negotiations instead. He can do so provided the bids at the auction have not been confirmed. The Financial Commissioner would then be entitled to negotiate for one vend or two vends combined, the objective being to get the maximum revenue for the State. A clause that relates to auctions and permits the Presiding Officer thereat to regroup vends does not imply that the power to do so does not exist in the Financial Commissioner." 26. In case Gidhey Club, New Delhi and another v. The Chief Secretary, Delhi Administration, Delhi and another, AIR 1980 Delhi 33, the High Court, while dealing with the monopoly of regulating the liquor trade vested in the Government, held as under: "12. The reason is that the executive power of the Government is co-extensive with its rule making power. The basic principle is that the exercise of the executive power of the Government cannot be challenged by a petitioner unless he shows that such executive action contravenes, any law. No such contravention has been shown to have been made by the implementation of the policy of prohibition. The basic principle is that the exercise of the executive power of the Government cannot be challenged by a petitioner unless he shows that such executive action contravenes, any law. No such contravention has been shown to have been made by the implementation of the policy of prohibition. We are of the view, therefore, that the directive principle embodied in Article 47 can validly be implemented by executive action so long as it does not contravene any law or rule. Since the monopoly of regulating the liquor trade is vested in the Government, the executive policy of the Government must prevail as it does not trench on any ones legal rights." Again in Tata Cellular v. Union of India, (1994) 6 SCC 651, while dealing with the scope of judicial review, the Apex Court held as under: "74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself." "75. In Chief Constable of the North Wales Police v. Evans Lord Brightman said: "Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made. * * * Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power." In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms: "This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p.1160)." In R. v. Panel on Take-overs and Mergers, ex p Datafin plc, Sir John Donaldson, M.R. commented: "An application for judicial review is not an appeal." In Lonrho plc v. Secretary of State for Trade and Industry, Lord Keith said: "Judicial review is a protection and not a weapon." It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin, Re, Lord Fraser observed that: "Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitute its own decision on the merits for that of the administrative officer". Further in Shalini Soni v. Union of India, 1981(1) SCR 961, the High Court held that by now, the parameters of Courts power of judicial review of administrative or executive action or decision and the grounds on which the Court can interfere with the same are well settled. Whenever a decision-making function is entrusted to the subjective satisfaction of a statutory functionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote. The matter in controversy has several, but crucial aspects, and the counsel appearing for the parties have projected different dimensions of the controversy. 29. Having regard to the issue involved, I am inclined to deal with the controversy in somewhat unconventional manner. I - Acts and Rules: To begin with, the provisions of the Jammu and Kashmir Excise Act, 1958 provided vide Section 14 that no person can sell without a licence from the Commissioner, liquor or intoxicating drugs. The Act, as such, does not provide any procedure governing grant of licences. Under SRO-679, Rules have been sanctioned called the Jammu & Kashmir Liquor Licence and Sales Rules, 1984. The Act, as such, does not provide any procedure governing grant of licences. Under SRO-679, Rules have been sanctioned called the Jammu & Kashmir Liquor Licence and Sales Rules, 1984. The Rules make a separate provision for: (a) Country Liquor; and (b) Foreign Liquor. To deal in Foreign Liquor, the Rules envisage seven different types of licences. For Country Liquor, the Rules envisage four types of licences. It is only for denatured spirit that the Rules provide only one type of licence. Similarly, for rectified spirit, the Rules provide for two types of licences. So far JKEL-2 licence is concerned, which is the subject matter of the present proceedings, the Rules provide that mode of grant of such licences (Rule 4) shall be: (a) Fixed fee; or (b) Auction; or (c) Private contract. Under Rule 5, the Authority given to the Excise Commissioner to grant and renew licences is subject to: (a) restrictions contained in these Rules as to the localities for which licences may be granted; (b) the number of licences, which may be granted in any local area; and (c) to such reservations as the State Government may notify under Section 20 of the Jammu & Kashmir Excise Act Svt. 1958. Having regard to Rule 5, it appears that no person can obtain licence for a locality or area unless such locality or area is identified by the Excise Commissioner. This position is also clear from Rule 6 of the Rules. The licence granted under the Rules and its operations is restricted to: (a) particular licensee to whom it is granted, means a person in whose name the licence is granted; and (b) particular premises; means particular place where the trade or business under the licence has to be conducted. This position is clear from Rule 7. Under Rule 8, a licence may be granted to: (a) an individual; (b) an incorporate Company; (c) a registered co-operative society; and (d) a partnership or a firm. 28. II - Procedure for grant of Licences: Rule 15 of the Rules provides that "All Applications" for the grant or renewal of licences, which require the orders of the Excise Commissioner under these rules should be received through the `proper channel in the Excise commissioners office before the end of October in each year. 28. II - Procedure for grant of Licences: Rule 15 of the Rules provides that "All Applications" for the grant or renewal of licences, which require the orders of the Excise Commissioner under these rules should be received through the `proper channel in the Excise commissioners office before the end of October in each year. The petitioners have also submitted that the rules do not define the "proper channel" and, therefore, in the matter of licence, the petitioners had approached various and different authorities in this behalf. 29. III - Number of Licensees: Under Rules 5 and 6, the Excise commissioner is competent to determine the locality and area identified by him for grant of trade in liquor. Rule 28 provides for number of liquor vends, which may be licensed in local area by the Excise Commissioner. It appears that under Rules 5, 6 and 28, the Excise Commissioner alone has jurisdiction to determine the number of liquor vends, which may be licensed in a local area (Rule 28). So far as the charging of fee is concerned, Rules provide four modes: (a) Fixed fee; (b) Assessed fee; (c) Fee determined by Auction; and (d) By private contract. So far as JKEL-2 is concerned, Rule 4 provides the following means of such licences: (a) Fixed fee; or (b) Auction; or (c) Private contract. Rules 31 and 32 provide the limit of fixed fee. Separate provisions have been made in so far as Assessed fee, Fee by auction or Private negotiations are concerned (Rules 35, 36 and 37). Having regard to the position under Rules and the Act, my first finding is that so far as the procedure relating to grant of JKEL-2 licence on fixed fee method basis is concerned, the Rules make no provision. I may add that Rules provide four modes of charging fee, i.e.: (a) Fixed fee; (b) Assessed fee; (c) Fee determined by auction; and (d) Fee by private contract. So far as JKEL-2 is concerned, the mode of grant of licence is: (a) by fixed fee or (b) by auction or (c) by private contract. Rules 31 and 32 provide limits of fixed fee. A detailed procedure is provided in Rules 35, 36 and 37 of the Excise Rules as regards determination of fee by auction or private negotiations. So far as JKEL-2 is concerned, the mode of grant of licence is: (a) by fixed fee or (b) by auction or (c) by private contract. Rules 31 and 32 provide limits of fixed fee. A detailed procedure is provided in Rules 35, 36 and 37 of the Excise Rules as regards determination of fee by auction or private negotiations. Under Rule 33, the assessed fee is determined, but there is no provision as regards the procedure for grant of licence of fixed fee basis. 30 IV -- Policy: That the Government vide Order No.99-F of 2003 dated 07-04-2003 framed and announced Excise Policy for the year 2003-04. The distinctive features of the Policy, according to the petitioners, are: (a) That the directions contained in the Policy are intended to ensure uniformity and transparency in decision making; (b) That in the background of restricted and regulated authorization of trade, the requirement of tourism and public sensitivities have to be balanced and are of paramount consideration; (c) In processing the request for grant of off-licences so far as locality and area is concerned, regard shall be had to: (i) consideration of unserviced area; (ii) arresting the menace of bootlegging; and (iii) potential demand and relevance from tourism point of view. So far as the persons to be granted licences are concerned, the Policy provided precedence in processing of applications with priority consideration for: (a) Educated unemployed youth; (b) Ex-servicemen. The Policy also recognized the fact of the situation as it existed in April, 2003. It records that: (a) Several applications stood already filed for grant of licences prior to public notification of the Police; and (b) That there were several cases in which the Finance Department had already issued `No Objection, but the licences could not be granted because of restraint orders from the Court. The Policy provided that all applications, whether pending or awaiting grant of licences formally, were to be treated as fresh applications with only advantage of precedent as per date of receipt of these applications and were to be processed afresh under the policy guidelines. 31. The Policy, thus, in my opinion, having regard to its distinctive features and object, it ought to achieve, mandated the Excise Commissioner to deal with the cases which require his order under Rule 15 of the Rules in a particular manner. 31. The Policy, thus, in my opinion, having regard to its distinctive features and object, it ought to achieve, mandated the Excise Commissioner to deal with the cases which require his order under Rule 15 of the Rules in a particular manner. Not only that, apart from the requirements, to be satisfied in so far as the premises in respect of which the licence is required to be granted under Rule 30 of the Rules, the Policy also provided other requirements like distance from place of worship, Health/Educational institutions, Railway Station, place of religious congregation and objections from public as additional requirements to be satisfied. I find merit and agree with the contention of the learned counsel for the petitioners that in view of the position under Rules and the Excise Policy, the jurisdiction of the Excise Commissioner, as Licensing Authority in the matter of granting licences was regulated and the Excise Commissioner, while granting licences had to provide priority consideration to `Educated Unemployed Youth and Ex-servicemen. It is interesting to record that learned Advocate General took exception to the object of the Policy in particular and encouraging the youth in liquor trade. The merits of such a submission can be evaluated by the framers of the Policy rather than the Court. It is presumed that the Policy makers were well aware of the reasons for making priority consideration to the `educated unemployed youth. The Excise Commissioner, therefore, had no absolute discretion in the matter of grant of licences and his discretion was subject, not only to the Rules, but also to the Policy as well. I, therefore, hold that the Excise Commissioner was bound by the Policy. 32. V - Modification in the Policy: That vide Government Order No.156-F of 2003 dated 22-07-2003, amendment was made in the Policy. I, therefore, hold that the Excise Commissioner was bound by the Policy. 32. V - Modification in the Policy: That vide Government Order No.156-F of 2003 dated 22-07-2003, amendment was made in the Policy. The amendment made provided: (a) that all pending applications, as on 22-07-2003, shall be treated separately as a class; (b) That out of the applications pending consideration, as on 22-07-2003, such of them as are complete shall be considered on merits for issuance of licences along with such other new applications as may be received by the Government within the prescribed time; (c) Such of the applicants, who had not completed formalities, could complete them before these were taken up for consideration; and (d) The Excise Commissioner could ask for fresh process, if he felt unsatisfied with regard to any document. 33. That the counsel for the parties had placed different interpretations on the amendment effected in the Policy. According to the petitioners, all such applications, which were pending as on 22-07-2003, were to be considered on "merits" along with those applications which the Government was likely to receive within the prescribed time. It is further submitted that the amendment was effected because in the unamended Policy, there was no procedure indicated as to how the object of the Policy could be achieved. The Rules are silent as regards the method for selecting or identifying the persons; more so when in the process of selection, object of Policy is to be achieved. The counsel for the petitioners took the extreme position. The Rules do no provide the provision for achievement of any object in the liquor and the Rules have been framed in order to make the liquor trade restricted, both with regard to the persons to be granted licences as also the premises for which such licences are required. It is for the first time that the amended Policy provided consideration of applications on merits and the intention was to achieve the objects of the policy. The Excise Commissioner, the counsel urged strenuously, was, therefore, required before passing the order under Rule 15, to take into consideration the objects of the Policy. Negatively put, it was submitted that without consideration on "merit", the objects of the Policy could not be achieved. The Excise Commissioner, the counsel urged strenuously, was, therefore, required before passing the order under Rule 15, to take into consideration the objects of the Policy. Negatively put, it was submitted that without consideration on "merit", the objects of the Policy could not be achieved. But the petitioners counsel further contended that since the Rules no where provide procedure for grant of JKEL-2 licences on fixed fee basis, the Government in terms of the amended Policy, as a matter of law, regulated the power of Excise Commissioner in granting licences and made it compulsory for him to resort to consideration on merits of the applications rather than granting licences on first come first basis. Neither the Act nor the Rules say anything about the objects sought to be accomplished. Object is provided in the Policy of 2003. Where Act and Rules are silent, the Policy has not been questioned, but relied upon. The petitioners have only assailed the selection, which is made in contravention of the Policy. It is the Policy, which provided procedure and filled up lacuna in Rule 15. Excise Commissioner is delegated all the powers by the Government and is bound by the Policy formulated and announced by the Government. The power vests in the State Government in regard to trade in liquor and the Excise Commissioner is a delegatee of that power. He has no discretion but to follow the Policy promulgated by the Government. 34. The procedure followed in the Policy of 2004-05 is draw of lots, whereas applications have been invited and received under the Policy 2003-04. Approval granted for new Policy does not provide the procedure for draw of lots. The Policy is binding on the Excise Commissioner and any action of the Excise Commissioner in contravention of the Policy can neither be said to be reasonable nor based on fair principles. 35. On the contrary, the counsel for the respondents submitted that the consideration was required to be accorded not to the applications, which were complete as on the date the amendment was effected in the Policy, but also to the applications, which were received subsequently by the Government and that the Policy did not intend to create two different classes of persons with different objects. It was submitted that the Policy was only in the nature of guidance to the Excise Commissioner and the Excise Commissioner was free to adopt the procedure and he, as a matter of fact, adopted the procedure of draw of lots, which he felt was reasonable and fair in the circumstances, and he resorted to such procedure only after the approval was granted by the Government. It was further urged that the amended Policy without creating any different class had to be uniformly applied with no precedence or advantage in favour of such applicants, who had, of their own applied for grant of licences before the Excise Policy was announced and notified publicly. It is, thus, clear that the Rules do not provide any procedure for the grant of JKEL-2 licences on fixed fee basis (unlike for licences granted on assessed fee or by way of auction). It is entirely for the State Government to formulate Policy relating to intoxicating drugs and liquor trade. The other functionaries of the State had to execute the Policy. The Government having announced the Excise Policy and also having made the amendment thereto, the Policy was intended to be followed and not flouted. The Policy, apart from having set out the objects of the Excise Policy, also prescribed procedure for grant of JKEL-2 licences. The Government being primarily responsible for framing the Excise Policy and for its objectives, its subordinate functionaries are obliged in law to carry out such a Policy, more so when they are consistent with the situation and the law. No authority can act in a manner, which has the effect of defeating the Policy. The binding character of the policy arises from the source of its power and the jurisdiction of the Government in formulating the Policy. The Excise Commissioner has certain discretion and free play within the Rules and as regards the number of licences and the places to the extent of independent decision, which other wise is subject to a Constitution, rules and rule of law, and is limited by directions contained in the Policy. I am in agreement with the learned Advocate General that the Policy, as amended, is only in the nature of guidelines to the Excise Commissioner and that he is free to deal with the grant of licences, notwithstanding the Policy, as he may consider appropriate. I am in agreement with the learned Advocate General that the Policy, as amended, is only in the nature of guidelines to the Excise Commissioner and that he is free to deal with the grant of licences, notwithstanding the Policy, as he may consider appropriate. The extent of powers the Excise Commissioner enjoys under the Rules is limited by the Rules themselves as also the Excise Policy. The Policy of the Government framed under its plenary executive powers, so long as they are consistent with the provisions of the Constitution and the statutory laws, are binding and cannot be deviated from. The Government directed the Excise Commissioner to act in a certain manner in the Policy, the Excise Commissioner could not under the Policy itself have altered, amended or modified the Act in a different manner. It was publicly notified that the applications will be considered "on merits". Whether such considerations were to be accorded only to such applicants, who had completed all formalities by or before 22-07-2003 or brought within its fold the other applicants as well, who responded to public notice in this behalf, issued subsequent to 22-07-2003 without treating earlier applicants as a class, though so provided by the amended Policy, is a matter which, in my view, does not call for a determination, because the Excise Commissioner had not at all identified prospective licensees upon consideration on merits, as provided in the amended Policy. Instead he has resorted to draw of lots, whereas the counsel for the petitioners submitted, it was more a matter of chance rather than the application of mind. `Consideration on merits does not mean draw of lots. It clearly amounts to a fundamental shift from `consideration on merits to `realm of chance, as Rules nowhere provide draw of lots. How the object can be achieved in case of educated unemployed youth and ex-servicemen, when the procedure adopted for selection by draw of lots, and the methodology adopted was only prejudicial to the specific consideration on `merits. The action of the Excise Commissioner has to be judged also in the light of the principles evolved by the Courts with regard to the executive action. The action of the Excise Commissioner has to be judged also in the light of the principles evolved by the Courts with regard to the executive action. In Ramana Dayaram Shetty v. the International Airport Authority of India and others, AIR 1979 SC 1628, the Apex Court held as under: "It is well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurter in Vitarelli v. Seaton, (1959) 359 US 535 : 3 L Ed 2d 1012 where the learned Judge said: "An executive agency must be rigorously held to be the standards by which it professes its action to be judged... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. ...This judicially evolved rule of administrative law is not firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword." This Court accepted the rule as valid and applicable in India in A.S. Ahluwalia v. State of Punjab (1975) 3 SCR 82 : (AIR 1975 SC 984) and in subsequent decision given in Sukhdev v. Bhagatram, (1975) 3 SCR 619 : (AIR 1975 SC 1331), Mathew, J., quoted the above-referred observations of Mr. Justice Frankfurter with approval. It may be noted that this rule, though supportable also as emanating from Article 14, does not rest merely on that article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority" 36. Norms and the procedure having been prescribed by the Government in the amended Policy, which was intended to be followed by the Excise Commissioner in the matter of grant of licences, were clearly violated. I, therefore, hold the action of the Excise Commissioner in following the procedure other than provided by the Policy as unsustainable. Further, the stand of the respondents is that the Excise Commissioner issued public notice and invited applications for grant of off-licences for the year 2003-04. I, therefore, hold the action of the Excise Commissioner in following the procedure other than provided by the Policy as unsustainable. Further, the stand of the respondents is that the Excise Commissioner issued public notice and invited applications for grant of off-licences for the year 2003-04. The Excise Commissioner also publicly notified the areas for which the licences were intended to be granted. The Excise commissioner also notified the format according to which the applications were required to be submitted. This process of inviting applications as also of notifying the areas continued between 22-07-2003 to 06-10-2003. The response, interestingly, and which goes to show the public interest, was over-whelming, as against 89 locations notified by the Excise Commissioner, as many as 7781 applications were received. It is not known as to how many JKEL-2 type licences were required to be granted in each of the notified areas. Between October 2003 to February, 2004, two significant developments have taken place. It is disclosed in the counter affidavit that consequent to a decision taken at the Excise Commissioners Conference held at New Delhi, it was resolved that all the country liquor vends should be converted into IMFL vends. It is contended that these country liquor vends should be allotted on `fixed fee basis rather on `auction basis, so far as the sale of country liquor is concerned, as it gives rise to mal-practices. Conversion of country liquor vends into IMFL vends seems to have involved the office of the Excise Commissioner and office of the Government between the months referred to above till the Government agreed to the proposal so made. It is further disclosed that since the budgetary proposals for the year 2004-05 were in the process of finalizing and the decision with regard to the Excise Policy had to be urgently taken, also for the reasons that elections to Lok Sabha had been announced and the code of conduct was likely to become applicable soon, the Excise Commissioner submitted a proposal to the Government providing for a detailed procedure, based on draw of lots, in the matter of grant of licences in view of large number of applications, which had been received in response to various public notices issued previously. A communication was addressed by the Excise Commissioner under EC/STS/108/2003-04/1924 dated 22-02-2004 to the Financial Commissioner, Finance Department, in which the proposed procedure for draw of lots was forwarded and it was also stated that the liquor vends should become functional by Ist April, 2004 in accordance with the new Excise Policy announced in the budget of 2004-05. Along with said communication, proposed procedure for draw of lots for grant of off-licences was also sent. On behalf of the Government vide communication No.ET/E/5/2004 dated 25-02-2004, however, the Excise Commissioner was informed that the draft Excise Policy for the year 2004-05, is approved for: (i) putting the distribution of country liquor in IMFL network as per option-III of the draft Excise Policy and dispensing with the system of auction; (ii) grant of 35 more licences in addition to the licences required for 170 existing vends presently involved in vending of country liquor; and (iii) procedure of selection of licences as per detail indicated in the communication dated 22-02-2004. 37. It is, thus, obvious that country liquor, which was otherwise being offered for sale in separate country liquor vends, was put for distribution in IMFL network and that the system of auctioning country liquor was dispensed with. Approval was also accorded to the number of licences relating to IMFL vends. Approval was also accorded to the procedure of selection of the licensees. But it is self-evident from the said communication that it referred to `draft Excise Policy for the year 2004-05. Applications had been invited vide notice dated 23-07-2003 by the Excise Commissioner, for the year 2003-04. In the earlier communication dated 22-02-2004, the Excise Commissioner had represented to the Government that the liquor vends were intended to become functional by 01-04-2004 in accordance with the new Policy. The budget tabled by the Finance Minister in the State Legislature for 2004-05 has also been examined carefully. It nowhere provides anything in the new Excise Policy in so far as the procedure of selection of licensees is concerned. Conversion of erstwhile country liquor vends into IMFL vends or distribution of the country liquor through IMFL network is not subject matter in the present proceedings. It is only the method of allotting the licences, which has seriously been questioned. According to the communication referred above, draw of lots procedure was approved, in so far as the present draw of lots Policy 2004-05 is concerned. It is only the method of allotting the licences, which has seriously been questioned. According to the communication referred above, draw of lots procedure was approved, in so far as the present draw of lots Policy 2004-05 is concerned. The approval per se does not apply to the Policy, i.e., stated to be for the year 2003-04. No new Policy for the year 2004-05 has been placed on record. The Excise Policy announced vide Government Order No.99-F of 2003 dated 07-04-2003 does not provide that it will remain operative only till 31-03-2004. The Policy is still in vogue. The approval relating to draw of lots for grant of licences, in my opinion, does not relate to the said Policy, but only to the approved Excise Policy for the year 2004-05, which Policy had yet to be publicly notified. I also do not agree with the submission of the respondents that the approval granted to the draft Policy of the year 2004-05 will have the effect of changing the Policy sanctioned vide Government Order dated 07-04-2003. It is, therefore, held that the Excise Commissioner was not justified in resorting to draw of lots, as a procedure for identifying the prospective licensees. If it was the intention of the Government that for grant of off-licences, such a procedure should be resorted to, the decision suffers from non-application of mind because by resort to such procedure, restricted in its application only to the identification of the prospective licensees, could not achieve the objects of the Policy. The amended Policy prescribed correctly the methodology for achieving the object of the Policy by providing consideration to the applications on merits. The procedure for draw of lots, while maintaining the object of the Policy could not be achieved, as it was left to chance, I, therefore, hold that the Excise Commissioner acted in contravention of the Policy in resorting to draw of lots in the matter of identifying prospective licensees. The action is unsustainable in law. 38. The procedure for draw of lots, while maintaining the object of the Policy could not be achieved, as it was left to chance, I, therefore, hold that the Excise Commissioner acted in contravention of the Policy in resorting to draw of lots in the matter of identifying prospective licensees. The action is unsustainable in law. 38. VI - Draw of Lots: So far as the draw of lots is concerned, the respondents submitted that in the draw of lots, the charge of arbitrariness cannot be made and that the Excise Commissioner in all fairness has resorted to the said procedure and, therefore, the action cannot be faulted, irrespective of the fact whether the draw of lots is an irregularity or mistakes have been committed or whether it was properly done, I am of the view that draw of lots, by itself, may eliminate the charge of favourtism or nepotism (unless it is shown to be manipulated), but in the circumstances of the case, the event cannot be considered in isolation. The resort to draw of lots was contrary to the procedure prescribed by the Excise Policy and that the procedure for selecting the prospective candidates by draw of lots was approved for draft Excise Policy for 2004-05. The Government Order sanctioning the Policy publicly notified the procedure of selection unlike the draw of lots. It was approved on 25-02-2004 and on the same date, it was got published in the newspaper as per the averments made in the writ petition and on 27-02-2004, the draw of lots took place. At no stage, the procedure of draw of lots was notified. The procedure relating to draw of lots and its adoption for grant of JKEL-2 licences on fixed fee basis was either an administrative decision or the procedure to intent to become part of the Rules. In the case of latter, it had to be duly notified in the Government Gazette and in the case of former, it had to take shape in the form of Government Order substituting the previous Government Order No.156-G-F of 2003 dated 22-07-2003. It is further emanated from the counter affidavit that in the matter of draw of lots, the respondents resorted to the draw of lots, the procedure provided therein. According to respondent, during the first draw, applications, locations, specifically were put to draw of lots along with other applications. It is further emanated from the counter affidavit that in the matter of draw of lots, the respondents resorted to the draw of lots, the procedure provided therein. According to respondent, during the first draw, applications, locations, specifically were put to draw of lots along with other applications. Subsequently, for other locations, which had not been notified, every applicant was put to draw of lots. It is also stated that draw of lots was resorted to merely for selection of prospective licensees. After draw of lots, changes were made in the selected candidates depending upon the preferential treatment to be provided in terms of the Excise Policy notified vide Government Order No.99-F of 2003 dated 07-04-2004 read with Government Order No.156-F of 2003 dated 22-07-2003. It is apt to note that even in the procedure relating to draw of lots, Government Order No.156-F of 2003 dated 22-07-2003 has been mentioned for purposes of identifying the Policy and for providing preferential treatment. There is no manner of doubt that the approval accorded to draw of lots did not alter previously notified Excise Policy and if that be so, the draw of lots could not be resorted to by the Excise Commissioner being in contravention of the Policy, under which the prospective licensees had to be identified on the basis of "merit" and not otherwise. In the present proceedings, therefore, I do not express any opinion as to the procedure relating to the draw of lots and its application, and I only hold that the procedure of draw of lots could not be adopted for the grant of licences to prospective licensees. The moot point raised in the petitions that the process of draw of lots is not provided for in the Rules and, as such, such process is de hors the Rules and, thus, merits acceptance. 39. VII - Wednesburys Principle: Mr. A.H. Naik, learned Advocate General and other counsel representing the respondents, carried me through various judgments to persuade to take a view that the procedure of draw of lots was reasonable, fair and bona fide and that it cannot be faulted on any ground whatsoever. Suffice it to say that the question involved in the present proceedings, is whether the Excise Commissioner could at all resort to draw of lots? Suffice it to say that the question involved in the present proceedings, is whether the Excise Commissioner could at all resort to draw of lots? It is not the validity of the draw of lots, but its adoption as the basis for identifying the prospective licensees, was spinal point raised in the petitions. As has already been held that resort to draw of lots, in the facts and circumstances of the case, ran counter to the Excise Policy, which provided altogether a different principle and norm for selecting prospective licensees. The Excise Policy is binding on the Excise Commissioner with regard to the objects sought to be achieved by it as also the procedure prescribed for achieving the objects of the Policy. 40. VIII - Legitimate Expectation: The petitioners submitted that they had legitimate expectation that their applications will be considered as a separate class under the amended Policy, announced, formulated and notified by the Government and their applications would be considered on "merits". It is established from record that the Policy recognized the fact that the applications, some complete and some incomplete, were pending on 22-07-2003. The Policy also provided that all those persons whose applications were pending ought to be treated as a separate class. It is only in the matter of consideration that their cases had to be considered along with others and the decision to grant off-licences had to be taken on merits. The petitioners, therefore, in my opinion, had the legitimate expectation that their applications will receive due consideration and that the Licensing Authority would accord such consideration on merits. Admittedly, no consideration has been accorded on merits nor the petitioners had participated in the draw of lots. The petitioners were (such of them who were present at the time of draw of lots) only silent spectators observing, perhaps, that how computerized machine was dealing with their applications. The petitioners had not played any role in the process of draw of lots. A silent spectator cannot be said to be a participant in a process. The question of legitimate expectation has been considered specifically in catena of cases handed down by various High Courts and the Apex Court. The petitioners had not played any role in the process of draw of lots. A silent spectator cannot be said to be a participant in a process. The question of legitimate expectation has been considered specifically in catena of cases handed down by various High Courts and the Apex Court. The relevant extracts from the decision of the Apex Court in case entitled Madras City Wine Merchants Association and Another v. State of T.N. and Another, (1994) 5 SCC 509, are quoted herein below: "Legitimate expectation may arise: (a) if there is an express promise given by a Public Authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue; and (c) Such an expectation must be reasonable. 41. It has, thus, to be noticed that the concept of legitimate expectation in administrative law has now, undoubtedly, gained sufficient importance. It is stated that `legitimate expectation is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action and this creation takes its place beside such principles as the rules of natural justice, unreasonableness, the fiduciary duty of local authorities and in future, perhaps the principle of proportionality. These are the revealing decisions and show that the Courts now expect government departments to honour their published statements or else to treat the citizens with the fullest personal consideration. Unfairness in the form of reasonableness has come close to unfairness in the form of violation of natural justice, and the doctrine of legitimate expectation operates in both contexts." 42. Thus, where the denial of legitimate expectation amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, and caused abuse of power or violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14 of the Constitution. As has been held by the Apex Court in Punjab Communications Ltd. v Union of India and others, (1999) 4 SCC 727, the Policy decision of the Government creates a legitimate expectation, which is normally binding on the decision makers. However, the change in Policy defeating the substantive legitimate expectation must satisfy the test of Wednesbury reasonableness. The Court, therefore, can interfere with the change in Policy on being satisfied that it is irrational or perverse, according to Wednesbury principle. However, the change in Policy defeating the substantive legitimate expectation must satisfy the test of Wednesbury reasonableness. The Court, therefore, can interfere with the change in Policy on being satisfied that it is irrational or perverse, according to Wednesbury principle. In view of the above legal position, it can be unhesitatingly held that the petitioners had substantive legitimate expectation that their applications would receive due consideration at the hands of the Licensing Authority and that the question of grant of licences would be considered on merits rather than to chance, which has been contravened. 43. IX - Rights of the Petitioners: In the case of liquor trade, it has been established by various authorities that having regard to the nature of the trade, the only right available is under Article 14. The Government is, undoubtedly, monitoring the trade and can do the business either itself or through public. Where the Government wants to maximize revenue, so long as the method adopted is not discriminatory, the foundation of the trade is through public. When the State neither prohibits nor monopolises the said business, the citizens cannot be discriminated against while granting licences to carry on such business. In other words, the State has the exclusive privilege to sell liquor and this privilege can be sold under the garb of law. When the Government parts with the privilege and allows trade and invites public participation, no discrimination can be made. Article 14 applies to liquor trade also and exclusively deals in principle in Khodays case, the relevant extract of which is reproduced as under: "When the State prohibits trade or business in the potable liquor with or without limitation, a citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens, who are qualified to carry on the trade or business." 44. The State can adopt any mode of selling the licence for trade or business with a view to maximize its revenue, so long as the method adopted is not discriminatory, (1995) 1 SCC 574. In placing reliance on the aforesaid decision, it is held that the writ petitions are maintainable and the petitioners have been discriminated in the matter of granting off-licences by the respondents. In placing reliance on the aforesaid decision, it is held that the writ petitions are maintainable and the petitioners have been discriminated in the matter of granting off-licences by the respondents. A short point involved in writ petitions, OWP No.284/2004 and OWP No.285/2004, is, whether this Court, by a judicial order, can direct the Government to bring about total prohibition in sale, trade or business of potable liquor. The contention raised by Mr. A.V. Gupta, learned counsel appearing for the petitioners, is that if a citizen has no fundamental right to carry on trade or business in liquor, the State is also injuncted from carrying on such trade, particularly in view of the provisions of Article 47 of the Constitution of India. To trade in liquor is a privilege of the State. When the State permits trade or business in potable liquor with or without limitations, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens, who are qualifying to carry on the trade or business. A similar matter came up for consideration before the Apex Court in Khoday Distilleries Ltd. and others v. State of Karnataka and others, (1995) 1 SCC 574 and it was held as under: "55...The States power to regulate and to restrict the business in potable liquor impliedly includes the power to carry on such trade to the exclusion of others. Prohibition is not the only way to restrict and regulate the consumption of intoxicating liquor. The abuse of drinking intoxicants can be prevented also by limiting and controlling its production, supply and consumption. The State can do so also by creating in itself the monopoly of the production and supply of the liquor. When the State does so, it does not carry on business in illegal products. It carries on business in products which are not declared illegal by completely prohibiting their production but in products the manufacture, possession and supply of which is regulated in the interests of the health, morals and welfare of the people. It does so also in the interests of the general public under Article 19(6) of the Constitution." "56. The contention further that till prohibition is introduced, a citizen has a fundamental right to carry on trade or business in potable liquor has also no merit. It does so also in the interests of the general public under Article 19(6) of the Constitution." "56. The contention further that till prohibition is introduced, a citizen has a fundamental right to carry on trade or business in potable liquor has also no merit. All that the citizen can claim in such a situation is an equal right to carry on trade or business in potable liquor as against the State when the State reserves to itself the exclusive right to carry on such trade or business. When the State neither prohibits nor monopolies the said business, the citizens cannot be discriminated against while granting licences to carry on such business. But the said equal right cannot be elevated to the status of a fundamental right." 45. The State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicant - its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State and, indeed, without such vesting, there can be no such effective regulation of various forms of activities in relation to intoxicants. In American Jurisprudence, Volume 30 it is stated that while engaging in liquor traffic is not inherently unlawful, nevertheless it is a privilege and not a right, subject to governmental control. This power of control is an incident of the societys right to self-protection and it rests upon the right of the State to care for the health, morals and welfare of the people. In Lakhanlal v. State of Orissa, (1976) 4 SCC 660, the Apex Court in referring to the decision of Har Shankar case reiterated the similar view. Again in State of M.P. v. Nandlal Jaiswal, (1986) 4 SCC 566, the Apex Court observed that no one can claim as against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor. 46. Again in State of M.P. v. Nandlal Jaiswal, (1986) 4 SCC 566, the Apex Court observed that no one can claim as against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor. 46. A Division Bench of this Court vide its judgment delivered in PIL (W) No.893/2001 titled Vaid Vaishno Dutt and others v. State of Jammu and Kashmir and others, dealing with somewhat identical question observed as under: "We are conscious that the total prohibition is an ideal policy but it can be imposed if such a decision is taken by the State Government." Similar was the view recorded in PILs Nos.70/1999, 978/1998 and 135/1999, titled Kuldeep Raj v. State; Residents of Kunjwani v. State; and Residents of Patta Chungi v. State, decided on 9.4.1999, in which it has been observed as under: "One of the directive principles of the State Policy as contained in Article 47 of the Constitution of India is that the State shall endeavour to bring about prohibition on the consumption except for medicinal purposes intoxicating drinks and drugs which are injurious to health. Notwithstanding the existence of the aforesaid Article in the Constitution of India the judicial view is that it is up to the State Authorities to take a decision as to whether prohibition is to be enforced or not." 47. This Court has, therefore, clearly ruled that the power to take decision as regards total prohibition vests only in the Government and it is only for the Government to take a decision in this behalf. In other words, no judicial order can be passed to bring about total prohibition. The Division Bench also noticed Article 47 of the Constitution of India which is contained in Part IV of the Constitution of India "Directive Principles of State Policy". It is a settled law that the Court has no jurisdiction to enforce by judicial order, directive principles of State Policy. These principles are meant to be observed by the Government in governance within their jurisdiction. There is one more aspect of the matter, which has somehow escaped the attention. 48. The Constitution of India applies to the State of Jammu and Kashmir with such modifications as the President of India may direct under Article 370 of the Constitution. These principles are meant to be observed by the Government in governance within their jurisdiction. There is one more aspect of the matter, which has somehow escaped the attention. 48. The Constitution of India applies to the State of Jammu and Kashmir with such modifications as the President of India may direct under Article 370 of the Constitution. By virtue of the Constitution application order of 1954 various provisions of the Constitution of India have been made applicable to the State of Jammu and Kashmir with such modifications as the President of India has directed. Part IV of the Constitution of India has not been made applicable to the State of Jammu and Kashmir. The Constitution of the State in Part IV contained separately "Directive Principles of State Policy." Having regard to various provisions contained in Part IV of the State Constitution, I have not come across any provision identical or para materia or corresponding to Article 47 of the Constitution of India. Article 47 of the Constitution of India reads thus: "The State shall regard the raising of the level of nutrition and the standard of living of its people and improvement of public health as among its primary duties and in particular, the State shall endeavour to bring about the prohibition of the consumption except for medicinal purposes of intoxicating drinks and drugs which are injurious to health." The only provision, which may be said to be relevant and in some way closer to the aforesaid Article of the Constitution of India is Section 24 of the State Constitution. The said provisions provide as under: "The State shall make every effort to safeguard and promote the health of the people by advancing public hygiene and by prevention of disease through sanitation, pest and vermin control, propaganda and other measures and to ensure wide spread efficiency and free medical services throughout the State with particular emphasis, in its remote and backward region." 49. The State Government, therefore, is expected to make directive principles of the State Policy as contained in the State Constitution to be the basis of its governance. However, the State Government is entirely at liberty to take the decision as regards total prohibition and that would be a step towards promoting the health of the people. The State Government, therefore, is expected to make directive principles of the State Policy as contained in the State Constitution to be the basis of its governance. However, the State Government is entirely at liberty to take the decision as regards total prohibition and that would be a step towards promoting the health of the people. I must also record that the State Government, pursuant to the decision of the Court delivered in PILs Nos.70/1999, 7/1999 and 138/1999 took Policy decision and issued Government Order No.112-F of 2001 dated 03-04-2001. This was followed by another Policy under Government Order No.99-F of 2003, which was amended by Government Order No.156-F of 2003 dated 22-07-2003. The State Government has committed itself in terms of these Policies to adopt restrictive approach in the matter of grant of licences. It is expected that the Government would follow the Policy publicly notified and declared by it and, at present, it should allay the apprehension of the petitioners in OWP No.284/2004 and No.285/2004 that the Government is liberal in granting liquor licences. 50. Further, on going through the record produced by Mr. A.H. Naik, learned Advocate General, it is found that a Committee was constituted by the Excise Commissioner vide Excise Order No.144 of 2003 dated 01-09-2003 for making assessment for underserved and unserved areas for granting off-licences. The Committee, after making extensive exercise and keeping in view various aspects from different angles including the tourism and tourists resorts, identified suitable areas having potential for opening of new IMFL vends, recommended the places and a comprehensive list of such places irrespective of already notified places, was enclosed with their recommendations. It is indubitably gatherable from the aforesaid record that extensive survey was conducted by the respondents before identifying the places having potential for opening of IMFL vends at places other than those already notified. Therefore, I do not find myself in agreement with the submission of Mr. A.V. Gupta that neither any survey was conducted nor any study carried out as to the necessity of opening of IMFL vends in places notified and un-notified, for which the Committee had recommended the areas for granting off-licences. In the above view of the matter, I do not find any merit in the submissions of Mr. A.V. Gupta and, thus, no relief can be granted to the petitioners. In the above view of the matter, I do not find any merit in the submissions of Mr. A.V. Gupta and, thus, no relief can be granted to the petitioners. Therefore, both the writ petitions, viz., OWP No.284/2004 and OWP No.285/2004, accordingly, stand dismissed. 51. The learned counsel appearing for the petitioners in other petitions further submitted that the respondents in pursuance of the decision taken in the corridors of the Civil Secretariat resorted to the grant of liquor licences by draw of lots, a procedure alien to the Excise Act, Rules and Regulations framed thereunder and the Excise Policy of 2003-04 formulated and announced by the Government. It is stated that in the Excise Commissioners Conference, it was decided that system of auction should be dispensed with and instead `fixed fee licence system should be adopted. It was on the recommendation of the Committee that 89 locations were notified on 22-09-2003 and in all 7781 applications were received. A decision was taken that the existing country liquor vends be converted into IMFL vends. This will increase the number of locations (which were previously 89) and were added up by further locations and now 205 locations became available. It is also stated that respondents admitted the increase in the number of locations, and many applications were rejected on the ground that they were duplicate applications and/or were not accompanying the prescribed documents and/or they lacked the specific areas, for which the licences were requested for. It is further contended that after having received applications, which was the decision of the Excise Commissioner, the Excise Commissioner was bound in terms of the Excise Policy to accord consideration on merits, so that the object of the Policy could be achieved. Instead of doing so, the Excise Commissioner resorted to the procedure of draw of lots. According to the records placed before the Court, draft Excise Policy for the year 2003-04 was accorded approved in respect of: (a) The country liquor distribution was put in IMFL network dispensing with the system of auction; (b) Grant of 35 more licences in addition to 170 existing vends; and (c) Procedure of selection of licensees as was indicated by the Excise Commissioner in his communication dated 22.02.2004 to the Government. It is stated that the approval was accorded on 25-02-2004. It is stated that the approval was accorded on 25-02-2004. The communication dated 22.02.2004 indicates the break-up reported by the Excise Commissioner to the Government, and is given as under: (a) General - 2192 (b) Educated unemployed - 4648 (c) Ex-servicemen - 494 52. The question, which arises for consideration is, whether the Excise Commissioner could suggest `draw of lots for achieving the object of the Policy when people from all categories applied for grant of licences. Further, if the draw of lots had to be resorted to, it could only be done amongst the respective categories but, in no circumstances, various categories could be mixed up before draw of lots. The petitioners had applied pursuant to the Excise Policy, which was applicable for the year 2003-04 and under the said Policy, they were entitled to consideration on merits so far as grant of licence is concerned. The new Excise Policy has not been brought on record. It is also not know as to what changes were made in the new Excise Policy. When the applications were not required to be considered on merits, then the Excise Commissioner was still trying to achieve the object contemplated by the Policy of 2003-04. The affidavit filed by the Excise commissioner clearly discloses that the object of the Policy of 2003-04 was sought to be achieved by him and yet upon the approval, he followed the procedure relating to the Policy for 2004-05, which is yet to be formulated and notified and even when its details are still not known. The consideration, therefore, under the Excise Policy of 2003-04 still subsists, neither substituted nor changed, had to be accorded on merits and draw of lots can never be treated or equated with consideration on merits. Draw of lots, obviously, is a matter of chance. The object of the Policy had to be achieved by conscious application of mind rather than by draw of lots leaving the achievement of object to chance. The Excise Commissioner had, therefore, no power to follow the procedure of its own, and the procedure adopted by draw of lots, in my opinion, is patently without jurisdiction. The Government in terms of its Policy had clearly provided its procedure for grant of licences, i.e., consideration of the applicants on merits with a view to accomplish the object of the Policy. The Government in terms of its Policy had clearly provided its procedure for grant of licences, i.e., consideration of the applicants on merits with a view to accomplish the object of the Policy. The procedure so provided does not contravene the object of the Act or the Rules. However, I appreciate the anxiety of the Excise Commissioner for selecting the prospective licensees by draw of lots, but the procedure adopted and methodology followed, being alien to the Excise Act, Rules and Regulations, and the Excise Policy of the Government, cannot be sustained. There cannot be a departure from the announced Excise Policy by the Government. The respondents cannot interpret the Policy according to their convenience. The Government itself, being donor of the power or the delegator, was competent to entertain the applications but, of course, having authorized the Excise commissioner to grant licences referred to him, in doing the needful in accordance with the Rules and, therefore, it did not matter as to where the application originally be filed for the grant of liquor licence. The spinal question that falls for consideration is as to whether the Excise Commissioner followed the procedure, which is just and proper and whether the Excise Commissioner has followed the directions of the Government being delegatee of the power? The methodology adopted by the Excise Commissioner in resorting to draw of lots, is neither known to the Excise Act, Rules and Regulations nor to the Excise Policy for achieving the objective explicitly delineated therein. 53. Where the Government action runs counter to its own Policy, Excise Act, Rules and Regulations and not supported by reasons and law taken, it cannot but be ascribed as mala fide. Equity, good conscience and justice require that judicial power be used to set aside such action. Suffice, however, to record that the accepted methodology of government working being in fairness and the same is lacking in its entirety in the matter under consideration. Justice of the situations demands action clothed with bona fide reasons and necessities of the situation in accordance with law. But if the same runs counter, law courts would not be in a position to accord approval to the same. Justice of the situations demands action clothed with bona fide reasons and necessities of the situation in accordance with law. But if the same runs counter, law courts would not be in a position to accord approval to the same. The action of the respondents to resort to draw of lots, prima facie, was contrary to the procedure prescribed by the Excise Policy and that the procedure of selecting the prospective licensees by draw of lots in respect of additional and unspecified locations neither ever came to be notified nor applications invited. Such a procedure was either an administrative decision or a procedure intended to become the part of the Rule. In case such a procedure was intended to become the part of the Rule, it was required to be duly notified in the Government Gazette; and if it was an administrative decision, it had to be in the form of Government Order setting aside the previous Government Order No.156-F of 2003 dated 22-07-2003. In this perspective, the action of the respondents appears, prima facie, to be tainted and is, thus, unsustainable in resorting to the procedure of draw of lots, which is alien to the Excise Act, Rules and Regulations made therein, and the Excise Policy, pursuant to which the applications were invited for the grant of liquor licences. I, therefore, allow all the writ petitions except the writ petitions, OWP No.284/2004 and OWP No.285/2004, and by a writ of certiorari quash Notification No.EC/STS/108/2004-05/1944-45 dated 27-02-2004, along with all the consequential actions of the respondents for the selection of prospective licensees by draw of lots. I further hold that having regard to the Excise Policy notified vide Government Order No.99-F of 2003 dated 07-04-2003 and amended vide Government Order No.156-F of 2003 dated 22-07-2003, respondents could not validly resort to draw of lots in the matter of identification of the prospective licensees for issuance of JKEL-2 licences. All the Caveats filed in these writ petitions shall stand discharged. All the Caveats filed in these writ petitions shall stand discharged. The respondents are at liberty to conduct a fresh exercise and consider the applications received in respect of 89 notified locations; and further invite applications in respect of 116 additional locations, for which the applications had not been invited for the grant of JKEL-2 licences, after following the procedure and adopting the methodology in accordance with Excise Act, Rules framed thereunder and in terms of the Excise Policy announced, promulgated and formulated by the State Government vide Government Order No.99-F of 2003 dated 07-04-2003 and amended vide Government Order No.156-F of 2003 dated 22-07-2003. It is hoped and expected that this exercise will be carried out by the respondents within a period of three months from the date of the order, so as to accomplish the object of the aforesaid Excise Policy explicitly delineated therein. 54. All the writ petitions are, consequently, disposed of in the terms indicated above. The official-record produced by the State Government be returned to the learned counsel for the State-respondents against proper receipt.