1986 Supreme(SC) 407

SUPREME COURT OF INDIA
P.N. Bhagwati, CJI., V. KHALID, J.
Civil Appeals Nos. 1622-39 of 1986 with Civil Misc. Petns, Nos. 11420-22, 19489-91, 19707, 19563, 19706 of 1986, Spl. Leave Petn. (Civil) Nos. 7440, 6206 of 1986, D/-24-10-1986.
State of M.P., others, etc. etc., Appellants
Versus
Nandlal Jaiswal, others, etc. etc., Respondents.

Headnote:(1) Constitution of India-Arts. 226 and 227-laches-inordinante and un• explained delay in filing writ petition third party rights created in intervening period- High Court should decline to interfere.

       When the writ jurisdiction of High Court is invoked, unplained delay coupled with the creation of third party rights in the meanwhile is an important factor which always weighs with the High Court in deciding whether or not to exercise such jurisdiction. It is not necessary to burden this judgment 'With reference to variolls decisions of this Court where it has been emphasised time and again that where there is inordinate and unexplained delay and third party rights are created in the intervening period, the High Court would decline to interfere, even if the State action complained of is unconstitutional or illegal. 1979 (3) SCR 1014 and 1980 (1) SCR 491 relied on. [Para 23

       (2) Excise Act, 1915 (M.P.)-S. 62(2) (h), Rule XXII-disposal of licence under-any of the four modes may he adopted.

       It is clear on a plain reading of Rule XXII that a licence for manufacture or sale of country liquor may be disposed of in anyone of four different modes, viz., tender, auction, fixed licence fee or such other manner as the State Government may by general or special order direct. These four different modes are alternative to one another and anyone of them may be resorted to for the purpose of disposing of a licence. It is not necessary that the mode of disposal by tender must first be resorted to and if that cannot be acted upon then only the mode of disposal by auction and failing that and not otherwise, the third mode of disposal by fixed licence fee and only in the event of it not being possible to adopt the first three modes of disposal, the last mode, namely, 'such other manner as the State Government may by general or special order direct'. [Para 4

       (3) Excise Act, 1975 (M. P.)-S. 62 (2) (h) -Rules III. IV and V-licence in form D.2-purpose of grant-person nor having licence in form D.2 not entitled to obtain in form D.7.

       It is clear from Rules III, IV and V that there are two purposes for which a licence in Form D.2 for construction and working of a distillery may be granted. It may be granted as an adjunct to the licence in Form D. 1 under Rule IV or it may be granted as an independent licence under Rule V irrespective whether the grantee holds a licence in Form D. 1 or not. There are also two types of licences for wholesale supply of country liquor to retail vendors, namely, licence in Form D. I and licence in Form D. 1 (s). The licence in Form D.1 in clause 5 clearly contemplates that the holder of licence must also have a licence in Form D.2. No one can have a licence in Form D 1 unless he has simultaneously a licence in Form D.2 He must have a distillery in which he distils country spirit in order that he should be able to make wholesale supply of country liquor to retail vendors. If for any reason he is unable to obtain licence in From D. 2 for working a distillery. no licence in Form D. 1 can be given to him and if he bas such licence, it would become ineffective. It IS for this reason that when a person is granted a licence in form D.1 by the Excise Commissioner under Rule III, he is also simultaneously granted a licence in Form D. 2 under Rule IV and the period of both the licences is co-terminus But, though a person cannot be granted a licence in form D.1 unless be also obtains licence in Form D. 2, the converse does not hold true. A licence in Form D. 2 can be granted to a person under Rule V even though he does not hold a licence in Form D.1. Where a person is granted a licence in Form D. 2 for working a distillery under Rule V, without having a licence in Form D. 1 for wholesale supply of country liquor to retail vendors, be cannot make wholesale supply of country liquor manufactured by him to retail vendors but he can supply of country liquor to a person holding licence in form D.1 (s) or he can manufacture rectified spirit, denatured spirit or foreign liquor as contemplated in Condition 3 of the licence in Form D. 2. It is not necessary that a person holding a licence in Form D.2 must also simultaneously have a licence in Form D. 1. [Para 5

       (4) Excise Act, 1915 (M.P.)-S. 62 (2) (h) Rule XXII-D.2-licence granted for 5 years with renewal clause of every year-no monopoly created in favour of licensee.

       Obviously the provision of renewal every year was to operate within the span of 5 years Itself and every year, the licence would be renewable on payment of licence fee of Rs. 5,000/ and due fulfilment of the conditions of the licence and the provisions of the Act and the Rules it is not possible to spell out from this clause that the licence was to be granted for an initial period of 5 years and thereafter it was liable to be renewed from year to year. The so called concession made on behalf of the State G0vernment and respondent Nos. 5-11 was, therefore, really not a concession at all but it was a stand taken in recognition of the correct position in regard to the grant of D.2 licence. The High Court was, in the circumstances, right in holding that the grant of D.2 licence to respondent Nos. 5-11 was for a maximum period of 5 years and it did operate to create monopoly in their favour for an indefinite period of time. [Para 20

       (5) Constitution of India-Art. 162-policy decision of Government-one part of it cannot be upset while sustaining another when it is single integrated.

       The policy decision dated 20th December 1984 was a single integrated decision arrived at by the State Government taking a holistic view of all the aspects involved in the decision and it is difficult to appreciate how the High C0urt could sustain one part of the policy and strike down the other. Either the policy as a whole could be sustained or as a whole, it could be declared to be invalid, but certainly one part could not be sustained, whatever be the ground and the other pronounced invalid. That would be making a new policy for the State Government which it was not competent for the High Court to do. [Para 26

       (6) Excise Act, 1915 (M. P.)-S. 14 (c)-no form of licence prescribed licence for construction of distillery may be granted.

       Merely because the form of a licence for constructing a distillery is not prescribed by the Rules, it does not mean that such a licence cannot be granted by the Excise Authorities. If the form of a licence is prescribed, then, of course, such form has to be followed, but if no form is prescribed, the only consequence is that the licence to be granted by the Excise Authorities need not conform to any particular form. S. 14 (c) of the Act clearly provides that the Excise Commissioner may license the construction and working of a distillery and there was, therefore, nothing contrary to the Act or the Rules in the Excise Commissioner issuing Letter of Intent in favour of each of respondent Nos. 5-11 granting licence for construction of a new distillery. [Para 30

       (7) Excise Act. 1915 (M. P.)-S. 62 (2) (h)-Rule XXII --fourth mode of disposal of licence prescribed in policy decision of Government-no further generol or special order is needed.

       The fourth mode of disposal set out in Rule XXII was sufficient to permit disposal of licences in the manner set out in the policy decision dated 30th December 1984. The argument that there was no general or special order made by the State Government pursuant to the policy decision dated 30th December 1984 which would bring the case within the fourth mode set out in Rule XXII is equally futile. When the policy decision dated 30th December 1984 was arrived at by the State Government itself, there could be no need for a separate general or special order to be made by the State Government in that behalf. (1972) 3 SCR 784 relied on. [ Para 30

       (8) Constitution of India-Art. 163 (3)-cabinet decision produced in Court without objection-becomes liable for scrutiny by the Court.

       It is true that what has been produced before the Court by way of policy decision dated 30th December 1984 is the decision of the Cabinet and if its production had been objected to on behalf of the State Government, a question would perhaps have arisen whether it is barred from the scrutiny of the Court under clause (3) of Article 163 of the Constitution. But, it has been produced by the petitioners without any objection on the part of the state Government and once it is produced, the Court is entitled to look at it and it clearly contains the decisi0n of the State Government and must be held to fall within the last clause of Rule XXII. AIR 1980 SC 383 relied on. [Para 30

       (9) Industries (Development & Regulation) Act, 1951-Ss 11 and 3 (c) and (d)-licence from Central Government for setting up new industry-not needed if 50 or more workers are not 10 be employed.

       It is obvious from section 11 read with the definitions of 'factory' and 'industrial undertaking' contained in sub sections (c) and (d) of section 3 of this Act that licence from the Central Government for setting up new distilleries would be necessary only of 50 or more workers would be working in such distilleries and here in the present writ petitions, there is nothing to show that 50 or more workers were going to be employed in the new distilleries. [Para 31

       (10) Constitution of India-Arts. 14 and 19 (g)-no fundamental right in trade or business of liquor-State giving right of such trade to others-rigour of equality is applicable.

       There is no fundamental right in a citizen to carryon 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 carryon 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 Art. 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. (1975) 3 SCR 234 relied on. [Para 33

       (11) Constitution of India-•Art. 14-policy of Government relating to trade and business of liquor-Court should be slow to interfere on the ground of this Article.

       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 or 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 manufature 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 has done, unless it appears to be plaintly, irrational or mala fide. (1982) 1 SCR 947 relied on. (Para 34

       (12) Constitution of India-Arts. 14 and 19 (g)-State Government granting licence for putting up new industry-no need to advertise and invite offers.

       When the State Government is granting licence for putting up a new industry, it is not at all necessary that it should advertise and invite offers for putting up such industry. The State Government is entitled to negotiate with those who have come up with an offer to set up such industry. 1980 (3) SCR 1338 relied on. [ Para 38

       (13) Judgement-criticising conduct of parties or witnesses- no strong and carping language should be used.

       Judge, should not use strong and carping language while criticising the conduct of parties or their witnesses. They must act with sobriety, moderation and restraint. They must have humility to recognise that they are not infallible and harsh and disparaging strictures passed by them against any party may be mistaken and unjustified and if so, they may do considerable harm and mischief and result in injustice. [Para 43