TMI Blog2016 (6) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... f any, already made shall continue for the rest of the period. - CWP No.5593 of 2016 (O&M) - - - Dated:- 9-6-2016 - MR. AJAY KUMAR MITTAL AND MRS. RAJ RAHUL GARG, JJ. For The Petitoner : Mr. Mohan Jain, Sr. Advocate with Mr. Vikram Jain, Mr. Arastu Chopra, Mr. Fateh Saini, Advocates, Mr. Ashish Aggarwal, Sr. Advocate with Ms. Ritu Pathak, Advocate, Mr. Sandeep Goyal, Advocate For The Respondent : Mr. Ashok Aggarwal, Advocate General, Punjab with Mr. Kamal Sehgal, Addl. A.G.Punjab and Mr. Harsimran Singh Sethi, Addl.A.G. Punjab. Ajay Kumar Mittal,J. 1. This order shall dispose of CWP Nos.5593, 5740 and 7668 of 2016 as learned counsel for the parties are agreed that the issues involved in these petitions are identical. However, the facts are being extracted from CWP No.5593 of 2016. 2. In CWP No.5593 of 2016, the petitioner prays for quashing the newly created/added Clause 2.14 of L-1A licence in the Excise Policy dated 13.3.2016 for the year 2016-17, Annexure P.1 being arbitrary, illegal and against the provisions of the Punjab Excise Act, 1914 (in short, the Act ) and the Punjab Liquor Licence Rules, 1956 (for brevity, the Rules ) as Excise department ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence fees for the L-1A (IMFL) for the year 2016-17 is fixed at ₹ 2.50 crores and it is proposed to have the security amount of this licence fixed at ₹ 25 lacs. According to the petitioner, the L-1A licence has been added/created just to monopolize the trade of liquor in the State of Punjab. Earlier, there was procedure in the excise policy that the person who was licensee of L-1 wholesale licence shall take the liquor directly from the manufacturing company. After adding L-1A licence, it has been specified that a person who is holder of L-1 licence will now have to take the liquor for sale from the L- 1A licensee i.e. newly created category of licence in the excise policy for the year 2016-17. It has been further claimed that the new licence has been created to monopolize the liquor trade and extend the same to the particular group of persons namely Chadha group, Malhotra group, Doda group and AD group who are at present major stake holders in the liquor business in the State of Punjab and are instrumental in influencing the excise department for creation of new category i.e. L-1A licence for their own economic interest. The petitioner avers that there is no pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Taxation Commissioner, Punjab dated 5.4.2016 has also been filed justifying the addition of L-1A licence in the excise policy for the year 2016-17. 6. We have heard learned counsel for the parties. 7. The controversy in these petitions relates to the following contentions:- a) Whether citizen has any fundamental right to trade or business in liquor as beverage? b) Whether the State can discriminate between the citizens where the trade or business in the potable liquor is permitted by the State and the scope of judicial review in the matter of liquor trade? c) Whether the newly added Clause 2.14 in the Excise Policy for the year 2016-17 by the State Government creating L-1A category of licence is legally valid, fair and does not suffer from the vice of arbitrariness? 8. The marathon submissions made with vehemence by learned counsel for both the parties requires issue (c) to be sub-categorized as under:- (i) Whether the action of the respondents in creating Licence L-1A category in the Excise Policy for the year 2016-17 is legal and valid as the policy was issued on 13.3.2016 whereas Punjab Liquor Excise Rules, 1956 were amended incorporating Licence 1-A in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to intoxicants. In American Jurisprudence , Volume 30 it is stated that while engaging in liquor traffic is not inherently lawful,. nevertheless it is a privilege and not a right, subject to governmental control. (page 538). This power of control is' an incident of the society's right to self-protection and it rests upon the right of the State to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime. (pp. 539, 540, 541). 11. Subsequently, another Constitution Bench in Khoday Distilleries Limited and others vs. State of Karnataka and others, (1995) 1 SCC 574 delving into the issue, whether the citizen has a fundamental right to carry on trade in liquor, upon referring to a large number of decisions, answered the issue in the negative and very succinctly summarized the legal position as under:- 60.We may now summarize the law on the subject as culled from the aforesaid decisions. (a) The rights protected by Article 19(1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, to be rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the same reason, again, the State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. The restrictions and limitations on the trade or business in potable liquor can again be both. under Article 19(6) or otherwise. The restrictions and limitations can extend to the State carrying on the trade or business itself to the exclusion of and elimination of others and/or to preserving to itself the right to. sell licences to do trade or business in the same, to others. (g) When the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. (h) The State can adopt any mode of selling the licences for trade or business with a view to maximise its revenue so long as the method adopted is not discriminatory. (i) The State can carry on trade or business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing down Minimum Sales Figures (MSF) as a criteria of eligibility for grant of licence in Form L-1, whether it was violative of Articles 14, 16 and 19(1)(g) of the Constitution of India. Considering the law on the issue, it was again expressed that there is no fundamental right to trade in intoxicants like liquor and the plea of the petitioner therein to the contrary was emphatically repelled with the following observations:- The contention that a citizen of this country has a fundamental right to trade in intoxicating liquors refuses to die in spite of the recent Constitution Bench decision in Khoday Distilleries, [1995] 1 SCC 574 . It is raised before us again. In Khoday Distilleries , this Court reviewed the entire case-law on the subject and concluded that a citizen has no fundamental right to trade or business in intoxicating liquors and that trade or business in such liquor can be completely prohibited. It held that because of its vicious and pernicious nature, dealing in intoxicating liquors is considered to be res extra commercium (outside commerce).Article 47 of the Constitution, it pointed out, requires the State to endeavour to bring about prohibition of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the questions before the Full Bench of the Madhya Pradesh High Court in Naresh Gupta vs. State of Madhya Pradesh (CWP No.1636 of 2010 decided on 26th March 2010) was regarding whether liquor policy which related to renewal of licence was a valid policy and whether such policy created any monopoly in favour of all such persons who were ready and willing to give 20% extra on the existing licence fee. Opining on the nature of right to deal in business of liquor, the Full bench had elaborately considered it and expressed as under:- 25. The Constitution Bench of the Supreme Court in Har Shankar and Others etc. v. The Deputy Excise and Taxation Commissioner and others, etc., AIR 1975 SC 1121 while dealing with right to deal in the business of intoxicants approved the ratio of earlier decisions, namely, decision of the Constitution Bench in the State of Bombay vs. F.N. Balsara, AIR 1951 SC 318 and Cooverjee B. Bharucha v. Excise Commr. And the Chief Commr. , Ajmer, AIR 1954 SC 220, State of Assam v. A. N. Kidwai AIR 1957 SC 414, Nagendra Nath Vora and another vs. Commissioner of Hills Division, AIR 1958 SC 398, Amar Chandra Chakraborty v. Collector of Excise, Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o (6) of Article 19 thereof. In other words, the fundamental rights guaranteed under Article 19(1)(a) to (g) of the Constitution of India have certain restrictions as enumerated in clauses (2) to (6) of the said Article 19. Further, the State is empowered to restrict or prohibit trades which are injurious to health and welfare of the public. Thus, citizens cannot claim fundamental right to trade or carry on business in such activities and potable liquor is one which falls in this category. Thus, trade of liquor can be completely prohibited by the State. 15. Adverting to the next issue, it has overlapping traits with the first issue. It shall not detain us longer as it had been subject matter of deliberations in various decisions of different courts. The Apex Court in State of M.P. and others vs. Nandlal Jaiswal and others , (1986) 4 SCC 566 opined that though a citizen has no fundamental right to carry on trade or business of liquor but where the State decides to grant the right or privilege to carry on this trade, in such a situation, the State cannot escape the rigour of Article 14. The relevant observations are quoted as under:- The State under its regulatory power has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such right or privilege, it cannot escape rigour of Article 14 of the Constitution and act arbitrarily or at will. While applying Article 14 of the Constitution in such a case, the court will be slow to interfere with the policy for grant of liquor or award of contracts unless the same was arbitrary, illegal or mala fide. In a given case, the State could review its policy in public interest. It is well settled that if decision making process is vitiated by arbitrariness, unfairness, illegality or irrationality, this court could strike down the same as well as consequential actions, in exercise of its power of judicial review. 17. In Har Shankar and others etc. v. The Deputy Excise and Taxation Commissioner and others etc, AIR 1975 SC 1121, it was observed:- 53.In our opinion, the true position governing dealings in intoxicants is as stated and reflected in the Constitution bench decisions of this Court in Balsara's case 1951 SCR 682 = (AIR 1951 SC 318); Cooverjee's case 1954 SCR 873 = (AIR 1954 SC 220); Kidwai's case 1957 SCR 295 = (AIR 1957 SC 414); Nagendra Nath's case 1958 SCR 1240 = (AIR 1958 SC 398); Amar Chakraborty's case (1973) 1 SCR 533 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. We had occasion to consider the scope of interference by the Court under Article 14 while dealing with laws relating to economic activities in R.K. Garg v. Union of India , (1982) 1 SCR 947 : (AIR 1981 SC 2138) . We pointed out in that case that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. We observed that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide . It is against the background of these observations and keeping them in mind that we must now proceed to deal with the contention of the petitioners based on Article 14 of the Constitution . The above principles were reiterated in Khoday Distilleries Ltd. And others v. State of Karnataka and others, (1995) 1 SCC 574 , wherein para 62, it was observed:- 62. We, therefore, hold that a citizen has no fundamental right to trade or business in liquor as beverage. The State can prohibit completely the trade or business in potable liquor since liquor as beverage is res extra commercium. The State may also create a monopoly in itself for trade or business in such liquor. The State can further place restrictions and limitations on such trade or business which may be in nature different from those on trade or business in articles res commercium. The view taken by this court in K.K.Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of the grant of the license. The court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free play to be Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. It would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 SC 487, Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628 as also Dwarkadas Marfatia Sons v. Board of Trustees of the Port of Bombay, (1989) 3 SCC 293 : (1989) 2 SCR 751 : AIR 1989 SC 1642. 17. As recorded by Division Bench of this Court in Ram Chander s case (supra), the issue is answered in the affirmative. Article 14 of the Constitution of India would be clearly attracted wherever State decides to grant contracts or licences in the trade and business of liquor to be carried on by the citizens and the action of the Government would be amenable to judicial review wherein it violates any statutory provision or rights guaranteed under the Constitution of India. 18. Examining the third issue, necessarily it would be expedient to advert to the relevant statutory provisions, rules framed thereunder and the Excise Policy for the year 2016-17. By Section 58 of the Act, the State Government may make rules for the purpose of carrying out the provisions of this Act whereas Section 59 of the Act empowers the Financial Commissioner to make rules by notification in respect of the subject covered therein. Section 59 of the Act is in following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed (ii) for causing spirits to be denatured through the agency or under the supervision of its own officers; (iii) for ascertaining whether such spirit has been denatured; (h) providing for the destruction or other disposal of any intoxicant deemed to be unfit for use ; (i) regulating the disposal of confiscated articles ; (j) prescribing the amount of security to be deposited by holders of leases, licenses, permits or passes for the performance of the conditions of the same. 19. By Clause (d) of Section 59 of the Act, the Financial Commissioner is authorized to make rules prescribing the scale of fees or the manner of fixing the fees payable in respect of any licence, permit or pass etc. in respect of the storing of any intoxicant. In pursuance of Section 59(d) of the Act, the Excise and Taxation Commissioner on whom the powers of the Financial Commissioner are conferred by the State Government, framed the Punjab Liquor Licence Rules, 1956 (for brevity, the Rules ). Rule 1 thereof contains a Table where the classes of licences, their mode of grant and the authorities who can grant and renew the licences are specified. Part I of the table deals with Foreign Liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per licencing unit or group or zone in Corporation areas. However, in other urban areas and Nagar Panchayat areas, a person shall not be allowed to file more than 100 applications irrespective of the number of licencing units or groups in that area. Similarly, in rural areas, the limit shall be of 100 applications for each licencing unit or group. xxxxxxxxxxxxx 36 . Procedure to grant the licence: The following procedure is prescribed for the grant of liquor licenses referred to in Rule 35, namely :- (1) The applications shall be in the prescribed form; (2) The application form for the grant of liquor vends shall be available in the office of the Assistant Excise and Taxation Commissioner (hereinafter referred to as AETC), In-charge of the district. The application Forms can also be downloaded from the website of the department (www.pextax.com). In addition, these application forms shall also be available in various bank branches authorized by the department for receipt of application forms. The applicant can submit his application for any Licensing Unit/Group/Zone of any district in any of the bank branches. The cost of application forms shall be as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eries, bottling plants and Wineries (Manufacturing units of IMFL, Wine and RTD) from both within and outside the State and sell to L-1 licensees only of the State ; (b) The licensee shall obtain consent/authority letter from concerned manufacturing unit/company; (c) The manufacturing unit/company shall not give/issue authority/consent letter to more than one person/company/firm/institution; (d) The manufacturing unit/company shall issue consent letter to such person/company/firm/institution who/which is at arms length distance from the manufacturing unit/company i.e. he should not be the promoter/Director/partner etc. in the liquor manufacturing unit/company or not its holding, subsidiary, closely held company fully/partially owned/financed / managed firm/company; (Emphasis supplied). (e) Licensee shall maintain accounts of receipts and supply of liquor; (f) No breakage shall be allowed to a licensee; (g) The licensee shall provide separate excise office for Excise Inspector within the premises; and (h) Licensee shall install CCTV Cameras on the premises. (ii) L1-A (BIO) Whole sale vend of Imported Foreign Liquor ( BIO Brands) to the L-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, authorized to purchase Beer from breweries both, within and outside the State. Fixed fee Collector with the prior approval of Excise Commissioner Collector. 22. The change/amendment which has been brought about by virtue of it, is that now L-1A licencee shall purchase the liquor from the breweries/distilleries whereas L-1 licencee is mandatorily required to purchase the liquor from L-1A licencee only. According to the procedure before the amendment, L-1 licencee was directly purchasing the liquor from the manufacturing company. This has caused grievance to the petitioners. 23. Adverting to the judicial precedents, it has been held by the Apex Court in Khoday Distilleries s case (supra) that any mode of selling the licences for trade or business in order to maximize its revenue can be adopted by the State so long as the method adopted is not discriminatory. Further, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and is also authorized to sell the licences to the citizens for the said purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. In Delhi Science Forum and others v. Union of India and Another, (1996) 2 SCC 405 Supreme Court while dealing with a challenge to action of grant of licences by the State Government to nongovernment companies including foreign collaborated companies for establishing, maintaining and working of telecommunication system of the country pursuant to Government policy of privatization and telecommunication, observed that since parting of privilege exclusively vested with the Government it can be questioned only on the ground of bad faith, based on irrelevant or irrational consideration, noncompliance with prescribed procedure or violation of any constitutional or statutory provisions. 39. In State of Punjab and Ors. V. Ram Lubhaya Bagga and Others, (1998)4 SCC 117 It was held by Supreme Court that it is not normally within the domain of any court to weigh pros and cons of the policy except where it is arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out can be summarized as follows: (i) grant of licence for manufacture and sale of liquor is a matter of economic policy where the Court would be slow to interfere unless the policy is plainly arbitrary, irrational or malafide. (ii) The court must while adjudging the constitutional validity of an executive decision relating to economic matters grant certain measure of freedom or 'play in joint' to the executive. (iii) The court cannot strike down a policy merely because it feels that another policy would have been fairer or wiser or more scientific or logical. (iv) Parting of privilege exclusively vests with the Government and the same can be questioned only on the ground of bad faith, based on irrational or irrelevant consideration, violation of any constitutional or statutory provision. (v) It is not normally within the domain of the Court to weigh the pros and cons of the policy. In case of policy decision on economic matters the Court should be very circumspect and must be most reluctant to impugn the judgment of experts who have arrived at a conclusion. (vi) Court cannot examine relative merits of different economic policy. In a democracy it is a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Article 14 with the following observations: Trade or business in country liquor has from its inherent nature been treated by the State and the society as a special category requiring legislative control which has been in force in the whole of India since several decades. In view of the injurious effect of excessive consumption of liquor on health this trade or business must be treated as a class by itself and it cannot be treated on the same basis as other trades while considering Article 14. Principle applicable to trades which all persons carry on free from regulator y controls do not apply to trade or business in country liquor; this is so because of the impact of this trade on society due to its inherent nature. 45. In Harinarayan Jaiswal (supra) the Highest bidder in an auction held for granting the exclusive privilege for selling country liquor challenged the order rejecting its bid. It was argued that power retained by the Government to accept or reject any bid without assigning any reason was an arbitrary power and was violative of Article 14 and 19 (1) (g) of the Constitution. It was held as follows: The fact that the Government was the seller does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p leakage thereof cannot be said to be arbitrary. Further, the Excise Policy for the year 2016-17 was formulated on 13.3.2016, though the notification in exercise of power under Section 59 of the Act was issued on 23.3.2016, the same having been issued before the enforcement date for Excise Policy 2016-17 to be effective, i.e. 1.4.2016, cannot, thus, be faulted. The plea of the petitioners that the notification was issued after the start of the Excise year on 1.4.2016 cannot be accepted being based on presumptions, assumptions and conjectures without there being any definite and concrete material to hold so. Thus, it is concluded that category licence L-1A in the Punjab Liquor Licence Rules 1956 in the modified form is legal and valid. 27. Whether Clause 2.14 of the Excise Policy for the year 2016-17 is valid or not, it would be imperative to extract the relevant portion of Clause 2.14 as contained therein:- Clause 2.14 i) It is necessary for the applicant for this licence to have an authority/consent letter from the manufacturing unit. ii) Any manufacturing company cannot issue the authority/consent letter to more than one person/company/firm/organization. iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Re: Special reference No.1 of 2012, (2012) 3 SCC 1, where it was observed as under:- 80. Dealing with Questions ( iii ) and ( iv ) in paras 94 to 96 of the judgment, this Court opined as follows: 94. There is a fundamental flaw in the first-come-firstserved policy inasmuch as it involves an element of pure chance or accident. In matters involving award of contracts or grant of licence or permission to use public property, the invocation of first-come-firstserved policy has inherently dangerous implications. Any person who has access to the power corridor at the highest or the lowest level may be able to obtain information from the government files or the files of the agency/instrumentality of the State that a particular public property or asset is likely to be disposed of or a contract is likely to be awarded or a licence or permission is likely to be given, he would immediately make an application and would become entitled to stand first in the queue at the cost of all others who may have a better claim. 95. This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of level playing field . We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of level playing field is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. Globalisation , in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of globalisation . Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of level playing field embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of equality should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of level playing field . 31. In Pawan Bhatia and others vs. state of Haryana and others , (2015) 4 RCR (Civil) 666 , this court observed thus:- 26. The licences have been granted on the basis of first come first served basis. The principle of first come first served basis has been commented adversely in Centre for Public Interest Litigation and others v. Union of India and others, (2012)3 SCC 1 . The Court examined inter-alia the following questions:- (i) Whether the Government has the right to alienate, transfer or distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution? xx xx xx (iv) Whether the policy of first-come-first-served followed by DoT for grant of licences is ultra-vires the provisions of Article 14 of the Constitution and whether the said policy was arbitrarily changed by the Minister of Communications and Information Technology (hereinafter referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticipate in the process. 28. The issue of grant of state privileges by the process of auction alone came up for answer in the Presidential Reference, since reported as Natural Resources Allocation, In re, Special Reference No. 1 of 2012, (2012) 10 SCC 1. The Constitution Bench held that action of the State, whether it relates to distribution of largesse, grant of contracts or allotment of land, is to be tested on the touchstone of Article 14 of the Constitution. The action has to be fair, reasonable, nondiscriminatory, transparent, non-capricious, unbiased, without favouritism or nepotism, in pursuit of promotion of healthy competition and equitable treatment. It should conform to the norms which are rational, informed with reasons and guided by public interest, etc. The Court held:- 107. From a scrutiny of the trend of decisions it is clearly perceivable that the action of the State, whether it relates to distribution of largesse, grant of contracts or allotment of land, is to be tested on the touchstone of Article 14 of the Constitution. A law may not be struck down for being arbitrary without the pointing out of a constitutional infirmity as State of A.P. v. McDow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is one universal efficacious method in the first place. It respects the mandate and wisdom of the executive for such matters. The methodology pertaining to disposal of natural resources is clearly an economic policy. It entails intricate economic choices and the Court lacks the necessary expertise to make them. As has been repeatedly said, it cannot, and shall not, be the endeavour of this Court to evaluate the efficacy of auction vis- -vis other methods of disposal of natural resources. The Court cannot mandate one method to be followed in all facts and circumstances. Therefore, auction, an economic choice of disposal of natural resources, is not a constitutional mandate. We may, however, hasten to add that the Court can test the legality and constitutionality of these methods. When questioned, the courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are ultra vires and intra vires the provisions of the Constitution. Nevertheless, it cannot and will not compare which policy is fairer than the other, but, if a policy or law is patently unfair to the extent that it falls foul of the fairness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mending the said rules was issued during the pendency of the writ petition on 23.3.2016. It would not, thus, debar the petitioner from maintaining the writ petition. 35. Equally, the plea of the respondents for dismissal of the writ petition for want of necessary parties being impleaded has no weight. As noted earlier, the notification amending the Rules was issued on 23.3.2016 during the pendency of the writ petition. Further, on April 12, 2016, on the no objection of the learned Advocate General, Punjab, it was directed that allotment of licences L-1A shall be subject to the further orders to be passed by this Court in this writ petition. The order dated 12.4.2016 is reproduced for ready reference which reads thus:- Further submissions have been made by the learned Advocate General, Punjab. For remaining arguments, to come up on 26.4.2016. Learned counsel for the petitioner(s) made a prayer that the allotment of licences under category L-1A be made subject to the further orders to be passed by this court in the writ petition(s), as no permit has been issued to the licencees L-1A so far. Learned Advocate General, Punjab pleads no objection to the same. In view ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
