1986 (10) TMI 321 - SUPREME COURT

Whether under the policy decision dated 30th December 1984, D-2 licence was to be granted to each of respondent Nos.5 to 11 only for a limited period of 5 years commencing from 1st April 1986 or it was to be granted for a minimum period of five years with a clause for automatic renewal from year to year after the expiration of the period of five years?

Held that:- A the first place, the Ratlam Alcohol plant was unable to supply the requirements of even Jabalpur and Betul districts and during the period ending 31st March 1986 Sagar Aggarwal himself had to purchase liquor from outside at higher rates in order to satisfy the requirements of these two districts for which he held D-1(S) licence. 'If that be so, how could Ratlam Alcohol plant which could not produce more than 60 lakh proof litres at the outside, possibly supply liquor for the whole of the territory of the State. If Ratlam Alcohol plant could be made to supply the requirement of the entire State there would be no need for any other distillery at all. But obviously the capacity of the Ratlam Alcohol plant was very limited and it was not able to achieve production on up to this capacity. Secondly, it was decided that the Ratlam Alcohol plant would manufacture only ractified spirit for making masala liquor which was more popular and which brought greater revenue to the State and obviously therefore Ratlam Alcohol plant could not be available for producing ordinary liquor for supply to the retail vendors. Thirdly, it is difficult to understand how the learned Judge could assume that Sagar Aggarwal would continue to get liquor from Ratlam Alcohol plant at the rate of ₹ 1.80 per proof litre. The rate for supply of liquor by the Ratlam Alcohol plant would naturally depend upon varying market conditions. And lastly we fail to understand how the learned Judge could proceed on the assumption that a rate of ₹ 4 per proof litre would be fixed by the Export Committee for supply of liquor by the existing contractors from the new distilleries. We do not know what rate would be fixed by the Expert Committee. That would depend upon diverse considerations and of course one of the considerations would certainly be that Sagar Aggarwal had offered minus 2.31 rupees per proof litre while taking D-1(S) licences for Jabalpur and Betal districts. The figure of ₹ 56 crores put forward by Sagar Aggarwal and accepted by the learned judge was clearly hypothetical and based on assumptions which were totally unwarranted. We do not think that the learned Judge was right in observing that the public exchequer would incur a loss of ₹ 56 crores by the policy decision dated 30th December, 1984 and that the policy decision was therefore vitiated by mala fides or under-hand dealing or improper or corrupt motive.

We must therefore hold that the High Court was in error in allowing the writ petitions even to a limited extent. We accordingly allow the appeals of the State Government and respondents Nos. 5 to 11 and dismiss the writ petitions.