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2021 DIGILAW 629 (RAJ)

Lucky Wines v. State Of Rajasthan

2021-03-17

INDRAJIT MAHANTY, SATISH KUMAR SHARMA

body2021
JUDGMENT Sharma, J. - All these petitions except petition No. 3378/2021, Sanwaria Sethi and Brothers v. State of Rajasthan, have been filed by the licensees of liquor under the Excise Policy 2020-21 of the State of Rajasthan with the prayer to direct the respondents to renew their licenses for another one year and to quash the new Excise Policy issued by the State Government for the year 2021-22. 2. The D.B. Civil Writ Petition No. 3378/2021 Sanwaria Seth and Brothers v. State of Rajasthan relates to the license for Bhang, which shall be listed separately, as prayed for. 3. We have heard learned counsel for both the sides and perused the written submissions, and material made available on record. 4. The Learned Counsel for the petitioners Mr. R.B. Mathur, Mr. Ashutosh Bhatia and Mr. Mohit Khandelwal have submitted that the State Government in its excise policy for the year 2020-21 clearly assured the applicants that their licenses would be renewed for another one year. It is further contended that Section 37 of the Rajasthan Excise Act, 1950 certainly restricts them from claiming renewal of the licenses but such restriction is not applicable to the State Government, therefore, the State Government cannot take shelter of the said provision to not fulfill its promise. 5. Above assurance was given for the first time as in previous years the respondents could not receive adequate number of applications. Initially the petitioners and other applicants were reluctant to apply for the licenses due to the losses occurred in previous years in which the licenses were issued only for one year and the attitude of the State Government being adverse to change its stand. The petitioners relied upon the above assurance of the State Government and highlights of the excise policy issued on the websites and applied for the licenses. After obtaining the licenses they made huge investment in establishment of shops with the belief that they will get chance to run the shops at least for two years. 6. Like other entities, the State is also duty bound to fulfill its contractual obligations. It cannot be allowed to resile from its own promise or assurance given at the time of issuing the licenses. But the State Government has declined to renew the licenses and has issued new excise policy for the year 2021-22. 7. The State Government has not considered the plight of the petitioners. It cannot be allowed to resile from its own promise or assurance given at the time of issuing the licenses. But the State Government has declined to renew the licenses and has issued new excise policy for the year 2021-22. 7. The State Government has not considered the plight of the petitioners. They had to suffer huge losses due to the restrictions imposed by the State Government in COVID-19 Pandemic. The petitioners in the whole year could open their shops for full-time only for a period of two and a half months. 8. The reliefs and rebates provided in other contractual obligations have not been extended to the liquor licensees even the benefits given to the liquor licensees such as RTDC and other hotels have not been provided to the retail licensees which is a clear discrimination against them with the similarly situated entities. 9. The State Government has also not taken note of the fact that other States have renewed the licenses for another one year or some of them extended the period of licenses for two months. 10. In view of clear promise by the State Government the petitioners applied for licenses with legitimate expectation that their licenses shall be renewed for another one year. In such circumstances the State Government is obliged to renew their licenses on the basis of the principle of promissory estoppel, legitimate expectation and fairness. The new policy issued by the State Government for the year 2021-22 is a gross violation of Article 14, 19(l)(g), 21 and 299 of the Constitution of India, therefore, the State Government should be directed to renew the licenses of the petitioners and the new policy for 2021-22 is liable to be quashed. In support of their arguments, they have placed reliance on the following judgments (I) The Secretary to Government of Tamil Nadu V/s. Vinayagamurty- 2002 (3) CTC 257 Madras High Court. (II) Secretary to Government of Tamil Nadu V/s K Vinayagamurthy- 2002- (7) SCC 104. (III) Government of Andhra Pradesh & Ors. V/s. A. Hanumantha Rao and Ors- 2005 (2) ALT 653 (IV) The State of Jharkhand & Ors. V/s Brahmputra Metallics Ltd. & ors- 2020 SCC Online 968. (V) Food Corporation of India Vs. M/s Kamdhenu Cattle Fed Industries (1993) 1 Supreme Court Cases 71. (VI) The Union of India and Ors. Vs. M/s Anglo Afghan Agencies 1968 AIR (SC) 718. 11. Per contra Mr. V/s Brahmputra Metallics Ltd. & ors- 2020 SCC Online 968. (V) Food Corporation of India Vs. M/s Kamdhenu Cattle Fed Industries (1993) 1 Supreme Court Cases 71. (VI) The Union of India and Ors. Vs. M/s Anglo Afghan Agencies 1968 AIR (SC) 718. 11. Per contra Mr. M.S. Singhvi, learned Advocate General appearing on behalf of the respondents has submitted that in the Excise Policy, 2020-21 no such assurance was given which may confer any right to the petitioners to claim renewal of their licenses for another one year or confer obligation upon the State to renew their licenses mandatorily. 12. It is incorrect and baseless that the State could not get sufficient number of applications in the previous year. The data placed on record by the State shows that sufficient number of applications were received in the previous years and it is not so that the provision of renewal was added in the policy to allure the applicants. Only an enabling provision was added in the policy so that in case, a policy decision is taken to renew the license in certain circumstances, nobody can get the opportunity to make any objection that such indication was not given in the policy. 13. Though the highlights of the Excise Policy were not published with the permission of the authority of the State and the same was published by the agency outsourced for the purpose for which action is being taken against it. However, the policy itself or advertisement issued inviting the applications, or the highlights do not convey that the licenses shall be invariably renewed by the State. Thus, in absence of any promise on behalf of the State, the principle of promissory estoppel does not apply in this case and accordingly the question of legitimate expectation does not arise at all. 14. The principle of promissory estoppel cannot be applied against a statute and Section 37 of the Rajasthan Excise Act, 1950 clearly restricts the licensees from claiming renewal of licenses, therefore, being against the statute the principle of promissory estoppel does not apply in this case. 15. Learned Advocate General has further contended that the contention of extra investments and losses suffered by the licensees is not relevant to the present controversy, however, the contentions made in this regard have not been substantiated by any material, therefore, these contentions cannot be taken to be true. 15. Learned Advocate General has further contended that the contention of extra investments and losses suffered by the licensees is not relevant to the present controversy, however, the contentions made in this regard have not been substantiated by any material, therefore, these contentions cannot be taken to be true. The petitioners have knowingly suppressed the reliefs and benefits granted to them during COVID-19 pandemic. 16. It is also not true that shops were allowed to be opened for full time for only two and a half months, rather the shops were allowed to be opened after lockdown from June 2020 except in the containment zones. The shops were also allowed to be opened up to 7:00 pm during the period of night curfew. 17. The petitioners cannot claim parity with other entities with whom contracts were executed by the State or with the RTDC or Government owned hotels. The State has not made any discrimination between the retail licensees. It has already granted several benefits, reliefs and relaxations to them to cope with the difficulties faced by them in the era of COVID-19 Pandemic. 18. It is well settled that nobody has a fundamental or legal right to trade in liquor and the State Government is exclusively empowered to grant licenses for trading in liquor with certain restrictions or conditions, thus, the State Government has authority to take a policy decision in this regard which cannot be interfered with by the Courts unless the same is termed as arbitrary, unreasonable or violative of the fundamental rights of the citizens. In this case no ground exists to interfere in the policy decision of the State Government not to renew the licenses of the petitioners and to issue new policy for the year 2021-22. 19. It is not so that the State Government has issued the new policy on the same terms but the new policy has been issued with the definite objectives to augment the excise revenue by adopting method of auction instead of lottery, to issue composite license for country made liquor and India made foreign liquor and to ensure transparency and wider participation of the public etc. Therefore, it cannot be said that the Act of the State is arbitrary, unreasonable or violative of any of the provisions of Indian Constitution. 20. Therefore, it cannot be said that the Act of the State is arbitrary, unreasonable or violative of any of the provisions of Indian Constitution. 20. He has further contended that under the excise policy for 2021-22, many of the petitioners have filed applications and have already been issued licenses of shops as successful applicants and all the shops of the present policy have been allotted under new policy. Thus, the petitioners have got no right to get their licenses renewed or to question the policy issued for the year 2021-22. He has placed reliance on the following judgments.- (I) 2013(11) SCC 531 Bhaskar Laxman Jadhav Vs. Karamveer Kakasaheb Wagh Education Society & Ors. (para 42 to 47) (II) 1995(1) SCC page 274 Kasinka Trading v. Union of India (paras 12, 21) (III) 1997(3) SCC 398 Shreeji Sale Corporation Vs. Union of India (paras 3 to 5) (IV) AIR 1966 SC 343 M.R. Patel Vs. State of Bihar (para3) (V) D.B. Civil Special Appeal No. 180/2010 State of Rajasthan and others Vs. Mahendra Pratap and others decided on 20.04.2010 (para 17 & 18) (VI) 1992(2) SCC 631 Mohd. Fida Karim Vs. State of Bihar (paras 3 to 7) (VII) 2011 (3) SCC 193 (paras 27, 28, 32, 33, 41, 42, 44 to 48, 51) Shree Sidhbali Steels Limited Vs. State of U.P. (VIII) 2016(4) SCC 134 Kothari Industrial Corporation Vs. T.N. Electricity Board (paras 11 to 16). (IX) 1994(4) SCC 104 Excise Commissioner Vs. Issac Peter (paras 24 to 26) (X) 1975(1) SCC 737 Har Shankar Vs. Excise Taxation Commissioner (para 53). (XI) 2004 (11) SCC 26 State of Punjab Vs. Devans Modern Breweries Ltd. (paras 103) (XII) 1986 (4) SCC 566 State of M.P. Vs. Nandlal Jaiswal.(Para34) (XIII) 1972 (2) SCC 36 State of Orissa Vs. Harinarian Jaiswal. (Para 13) 21. We have considered the rival submissions made on behalf of both the sides and examined the relevant material made available on record. 22. In view of the above rival submissions the core issue arises for determination is as to whether the State Government, in its excise policy for the year 2020-21 made such a promise which may confer right to the petitioners to claim renewal of their licenses for another one year? 22. In view of the above rival submissions the core issue arises for determination is as to whether the State Government, in its excise policy for the year 2020-21 made such a promise which may confer right to the petitioners to claim renewal of their licenses for another one year? The decision of this issue depends upon the interpretation of relevant Clause No. 1 of the excise policy of 2020-21 which reads as under:- on the petitioners to rightfully claim the renewal of their licenses or it does not cast the obligation upon the State Government to renew the licenses of the petitioners mandatorily. Therefore, it is clear that no promise was made by the State Government to renew the licenses positively. 24. It is well settled legal position that the principle of promissory estoppel can only be applied where some promise is in unequivocal terms but in this case, in view of the above interpretation of clause 1 of the excise policy, the principle of promissory estoppel is not applicable and accordingly, in the absence of any promise by the State Government, the question of legitimate expectation to the petitioners does not arise at all. 25. It is also pertinent to note that the principle of promissory estoppel is not applicable against the statute. In this case Section 37 of the Act of 1950 strictly prohibits the petitioners-licensees to claim renewal of their licenses therefore, being no promissory obligation for renewal on the part of the state and in light of this statutory restriction, the principle of promissory estoppel cannot be applied in this case. 26. It cannot be disputed that no one has a fundamental or legal right to trade in liquor. It is only the State Government which can grant the licenses for the purpose after taking a proper policy decision regarding necessary modalities. Such policy decision of the State Government cannot be interfered with by the Courts unless the same can be termed as arbitrary, unfair, unreasonable or violative of fundamental rights of the citizens. 27. It is only the State Government which can grant the licenses for the purpose after taking a proper policy decision regarding necessary modalities. Such policy decision of the State Government cannot be interfered with by the Courts unless the same can be termed as arbitrary, unfair, unreasonable or violative of fundamental rights of the citizens. 27. In this regard, it is pertinent to note that the State Government has not issued the new policy with similar terms but the fact remains that the new policy for the year 2021-22 has been issued with material changes, with the object to augment the excise revenue, the process of auction has been adopted to issue the licenses in place of existing process of lottery. To increase the business of each licensee, composite licenses for country made liquor and IMFL are being issued for every shop instead of existing separate licenses for both types of liquor. The number of licenses within the district or State have also been restricted to ensure wider participation of the public. Thus, it cannot be construed that the new policy has been issued in arbitrary, unfair and unreasonable manner or to defeat the fundamental or legal rights of the petitioners or other persons. 28. The petitioners have not placed any material facts which may substantiate their contention that they have made extra investment in comparison to previous years during which no such clause was notified in the excise policy. Thus, this contention is not believable and of no help to the petitioners being irrelevant also. 29. Further, the petitioners have not placed necessary facts or material on record to substantiate their contention that adequate applications for licenses could not be received by the State in previous years. On the other hand, the data provided by the State Government clearly indicates that sufficient number of applications were received in previous years as well, therefore, this contention of the petitioners is also not tenable that the State Government inserted this clause of renewal in order to allure the applicants to file applications for licenses. 30. On the other hand, the data provided by the State Government clearly indicates that sufficient number of applications were received in previous years as well, therefore, this contention of the petitioners is also not tenable that the State Government inserted this clause of renewal in order to allure the applicants to file applications for licenses. 30. Though the learned Advocate General has contended that the highlights were published unauthorizedly by the outsourced agency for which necessary action has been initiated against it, but since it has been concluded that the excise policy itself and the advertisement issued therein contain no promise by the State for mandatory renewal of the licenses, therefore the claim of the petitioners cannot be considered on the basis of highlights published by the outsourced agency. Further, taking into consideration the policy, advertisement and highlights in entirety, no different conclusion can be arrived at. 31. In this backdrop, this explanation regarding inclusion of above clause of renewal appears to be reasonable that this is only an enabling provision which was added in the policy so that, in case a policy decision is taken to renew the license in certain circumstances, no one can object that such indication was not made in the policy and for want of which they did not opt to apply for licenses. Thus, it cannot be said that the State Government has misrepresented or allured the petitioners or public at large by including the above clause in the excise policy. 32. It may be pertinent to note that some of the petitioners had applied for licenses under the new excise policy of 2021-22 and shops have been allotted to them. The shops of the petitioners, which are the subject matter of these petitions, their licenses have already been issued under the new policy. This development also goes against the petitioners. 33. As per the judgments cited on behalf of both the sides, this legal position is well settled that the State Government is duty bound to adhere to its contractual obligations. It cannot be allowed to resile from its promise or assurance to violate the terms of the contract entered between the parties. 34. 33. As per the judgments cited on behalf of both the sides, this legal position is well settled that the State Government is duty bound to adhere to its contractual obligations. It cannot be allowed to resile from its promise or assurance to violate the terms of the contract entered between the parties. 34. In the cases cited by the petitioners, the relief was granted to the petitioners against the State Government on the basis of promissory estoppel, legitimate expectation and fairness, where promise or assurance was existing in the contract entered between the parties but here, in this case, the State Government has not made any promise to renew the licenses of the petitioners for another one year mandatorily. The new policy issued by the State Government for the year 2021-22 has already been issued in fair manner with definite legitimate objective which do not violate any fundamental or legal rights of the petitioners or others. Thus, the facts and circumstances of this case are quite different, therefore, the judgments cited by the petitioners are not applicable in this case. 35. On the other hand, in the case of Mohd. Fida Karim v. State of Bihar 1992 (2) SCC 631 , as cited by the respondents the State Government issued a policy granting license for liquor shops for five years. The licenses so issued were to be renewed every year subject to certain conditions. The State Government changed its original policy in between. This action of the state was challenged up to the Hon'ble Supreme Court, and the Hon'ble Supreme Court upheld the decision of the State Government by holding that the State Government was fully competent to change its policy. 36. In view of above discussion, the petitioners have not succeeded to establish any ground for desired relief. No case has been made out to interfere by this Court in writ jurisdiction. Therefore, the petitions are hereby dismissed. No costs.