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IN THE HIGH COURT OF DELHI
Rekha Palli, J.
Pixie Enterprises Private Limited - Appellant
Versus
Delhi International Airport Limited - Respondent
W.P.(C) 9038 of 2021 & C.M. Appl. 28109 of 2021
Decided On : 22-10-2021
Entities performing public functions must act fairly and justly, and their decisions are subject to judicial review for adherence to principles of public interest and contractual obligations.
Headnote:(A) Constitution of India - Article 226 - Delhi Excise Act, 2009 - Delhi Excise Rules, 2010 - Quashing of refusal letter for No Objection Certificate (NOC) to operate liquor vends at the IGI Airport - Respondent denied the NOC citing existing operator and binding contract - Court held that public functions must be performed fairly and in line with the law - Contractual rights of the existing operator remain unless a breach occurs or conditions change. (Paras 10, 30, 38)
(B) Legal Obligations - Private entities managing public infrastructure must act reasonably, with fairness akin to public law standards - Actions taken must allow for judicial review concerning public interest and fairness. (Paras 20, 32)
(C) Licensing Framework - The successful bid must not inherently assume the issuance of licenses or NOCs without meeting specified conditions - The new excise policy mandates compliance with existing contractual obligations at the Airport. (Paras 8, 29)
Facts of the case:
The petitioner, a successful bidder under the new excise policy for liquor vends at the airport, sought to compel issuance of an NOC citing its high bid, despite existing operators on-site. The respondent denied the request due to a valid contract with the current operator.
Findings of Court:
Respondent's refusal to issue an NOC was not arbitrary, given it had existing contracts and a legal duty to maintain them until legally voided.
Issues: The central issue revolved around the validity of the NOC refusal amidst existing contracts and the nature of the respondent’s obligations.
Ratio Decidendi: The court reasoned the imperative of fairness in administrative functions, noting that the existing contractual obligations took precedence over the successful bid.
Result: The writ petition was dismissed.
| Table of Content |
|---|
| 1. initial petition for a liquor vend license. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. petitioner's arguments against noc denial. (Para 10 , 11 , 12 , 13 , 14 , 15) |
| 3. public interest and obligations of respondent. (Para 16 , 17 , 18 , 19 , 20) |
| 4. jurisdictional authority of the parties. (Para 21 , 22 , 23 , 24 , 25) |
| 5. court's evaluation of evidence and agreements. (Para 26 , 27 , 28) |
| 6. public functions and judicial review obligations. (Para 29 , 30 , 32 , 33) |
| 7. final judgment and dismissal of the petition. (Para 34 , 35 , 38 , 39) |
JUDGMENT
Rekha Palli, J. The present petition preferred under Article 226 of the Constitution of India seeks quashing and setting aside of letter dated 17.08.2021 issued by the respondent no.1, refusing to grant a `No Objection Certificate' (hereinafter referred to as "NOC") to the petitioner to operate ten liquor vends at the Indira Gandhi International Airport (Domestic Wing) (hereinafter referred to as "IGI Airport" or "the Airport"). Consequently, the petitioner also seeks a direction to the respondent nos.1, 3 and 4 to issue a NOC in its favour to enable it to obtain a licence from respondent no.2 for running these liquor vends.
2. Pixie Enterprises Private Limited, the petitioner herein, is a Pondicherry based company, incorporated in 1998, which claims to have 20 years' experience in manufacturing packaging products for the liquor industry in Pondicherry and Tamil Nadu. Delhi International Airport Limited/respondent no.1, operates and manages the Indira Gandhi International Airport, New Delhi. The Department of Excise, Entertainment Tax & Luxury Tax, Government of National Capital Territory of Delhi/respondent no.2, is the administrative Department of the Government of NCT of Delhi concerned with regulating excise related activities within the National Capital Territory of Delhi. The Airports Authority of India/respondent no.3 is a statutory body functioning under the Directorate General of Civil Aviation, under the Ministry of Civil Aviation/respondent no.4 and currently holds 26% shareholding in respondent no.1.
3. The DELHI EXCISE ACT , 2009 (hereinafter referred to as "the Act") came into effect from 04.10.2010, whereafter the DELHI EXCISE RULES , 2010 (hereinafter referred to as "the Rules") were notified by respondent no.2 by exercise of its powers under Section 81 of the Act empowering it to make rules inter alia "prescribing the authority by which, the form and the manner in which, and the terms and conditions, subject to which any licence, permit or pass shall be granted." Under these Rules, it is open for the respondent no.2/GNCTD to determine as to whether the licences under the Act should be auctioned, tendered, or granted by any other procedure. The various categories of licences which could be issued are prescribed under Rule 32; the licence for "Retail vend of Indian Liquor and Foreign Liquor in Shopping Malls and Shopping Complex at Airport" which is the subject matter of the present petition, has been classified as "L-10".
4. On 17.07.2015, the respondent no.2 issued a public notice prescribing the terms and conditions for grant of L-10 licences, according to which, these licences were to be granted on a "first come first serve" basis. Accordingly, the retail liquor outlets in all the shopping malls in Delhi and the shopping complex at the IGI Airport were, ever since, being run on the basis of licences issued and renewed on an annual basis in pursuance of the said public notice.
5. On 16.03.2021, the respondent no.2, upon realizing that the finalization of the excise policy for the year 2021-2022, proposing to bring some radical changes in the manner of issuance of the licences was likely to take time, issued a circular informing the existing licence holders that subject to payment of pro-rata licence fee, they could seek renewal of their licence for a period of three months commencing from 01.04.2021, which period was, on 10.06.2021, extended till 30.09.2021. This
