The government has the power to amend rules and regulations governing the sale of liquor, and such amendments are not subject to the doctrine of promissory estoppel or the principles of natural justice.

Headnote:
FOREIGN LIQUOR LICENCE - RAJASTHAN EXCISE ACT, 1950 - RAJASTHAN FOREIGN LIQUOR (GRANT OF WHOLE-SALE TRADE AND RETAIL OF LICENCES) RULES, 1982 - AMENDMENT - VALIDITY - PROMISSORY ESTOPPEL - NATURAL JUSTICE - SECTION 37 - RENEWAL OF LICENCE - RIGHT TO CLAIM - SECTION 41 - DELEGATED LEGISLATION - POWER TO AMEND - SCOPE - RULES TO HAVE OVERRIDING EFFECT - SECTION 8 - CONFLICT BETWEEN RULES AND RAJASTHAN EXCISE RULES, 1956 - PREVALENCE OF RULES, 1982.
Fact of the Case:

Petitioners challenged the validity of Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1982, framed under Section 41 of the Rajasthan Excise Act, 1950. Earlier rules provided for a fixed fee and annual renewal, but the new rules introduced an auction procedure and exempted existing licensees from the auction. However, a subsequent amendment deleted the exemption and made renewal subject to auction. Petitioners, existing licensees, argued that this amendment violated their vested rights, promissory estoppel, and principles of natural justice.
Finding of the Court:

The court held that the amendment was valid and enforceable. It found that the right to trade in liquor is not a fundamental right and that the government had the power to amend the rules under Section 41 of the Act. The court also held that the doctrine of promissory estoppel did not apply, as it had been curtailed by a Supreme Court decision. Additionally, the court found that the amendment was prospective and not retrospective, and that the government was not required to provide a hearing or opportunity to show cause before amending the rules.
Issues: 1. Whether the amendment to the Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1982, was valid and enforceable? 2. Whether the doctrine of promissory estoppel applied to the amendment? 3. Whether the amendment violated the principles of natural justice? 4. Whether the government was required to provide a hearing or opportunity to show cause before amending the rules?
Ratio Decidendi: 1. The right to trade in liquor is not a fundamental right. 2. The government had the power to amend the rules under Section 41 of the Rajasthan Excise Act, 1950. 3. The doctrine of promissory estoppel did not apply, as it had been curtailed by a Supreme Court decision. 4. The amendment was prospective and not retrospective. 5. The government was not required to provide a hearing or opportunity to show cause before amending the rules.
Final Decision: The court dismissed all five writ petitions challenging the validity of the amendment to the Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1982.

JUDGMENT

1. These five writ petitions have been filed for challenging the validity of Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1982, (hereinafter referred to as `the Rules, 1982'). These rules have been framed under Section 41 of the Rajasthan Excise Act, 1950, (Rajasthan Act II of 1950), hereinafter called to be as `the Act, 1950'. Earlier to it, grant of licences for foreign liquor was governed by the Rajasthan Foreign Liquor (Grant of Whole-sale Trade and Retail of Licences) Rules, 1972, which were also framed under Section 41 of the Act, 1950.

2. Earlier rules provided for a procedure of grant of licence, both, for the wholesale and retail on payment of fixed fees and thereafter there was provision of renewal of the same every year.

3. According to the Rules, 1982, auction procedure has been provided under R. 4. Rule 8 of the Rules, 1982 expressly mentions that in case there is any conflict between the provisions of these rules and the Rajasthan Excise Rules, 1956, the former shall prevail. R. 9 of these Rules repealed the Rules of 1972. However, Rr. 6 & 7 of the Rules, 1982 provide for exemption from auction in respect of persons holding licences for sale of foreign liquor on the date of coming into force of these rules. Whereas R. 6 provides for exemption, R. 7 provides for renewal by resort to R. 72(A) of the Rajasthan Excise Rules, 1976. Rr. 6 & 7 of Rules, 1982 may be reproduced below for ready reference :

R. 6 Exemptions-(1) The provision of these rules shall not apply to the Canteen Stores Department (India) of the Commanding Office of the Armed Forces of the Union of India or the Border Security Force Personnel stationed in Rajasthan who are holding requisite licence under the provisions of Rajasthan Excise Rules, 1956.

(2) The provisions relating to grant of licence by auction in rule 3 of these rules shall not be applicable in respect of persons holding licence for sale of foreign liquor on the date of coming into force of these rules.

R. 7. Fees for the renewal of licences.-(1) A licence granted or deemed to have been granted under these rules shall expire on the 31st day of March.

(2) A person seeking renewal of the licence shall apply in accordance with rule 72-A of the Rajasthan Excise Rules, 1956 and such application shall be accompanied by a treasury receipt showing the payment of :

(a) renewal fees at the rates prescribed by the State Government from time to time.

(b) the usual licence fees payable under rule 69(1) of the Rajasthan Excise Rules, 1956.

4. The amendments were introduced in these rules, 1982 by notifications dated the 24th March, 1982. The present petitioners, all of whom claimed to be existing licensees under the Rules of 1982, applied for the renewal of the licences in pursuance of the provisions mentioned above. On March 31, 1982, an important amendment was introduced in Rules of 1982, by which sub-rule 2 of Rule 6 providing for exemption was deleted and a proviso was added to sub-rule 2 of R. 7 which reads as under :

"Provided that where the licensing authority has renewed the licence for a part of the year, the licenssee shall pay the prescribed proportionate fee for such part of the year and the excess amount, if any, deposited by him while applying for license for the whole of the year shall be refunded to him."

R. 3 was added for grant of licence for exclusive privilege of selling foreign liquor both by wholesale and retail either by auction or by private negotiation or on commission basis or any other system sanctioned by the Government from time to time.

5. The cumulative effect of Rules and of amendment to Rules of 1982 which were earlier promulgated on February 20, 1982 was that the State Government which were earlier committed to exemption to the existing licensees and provided for renewal, took a somersault and deleted the provisions of exemption and made it express that there cannot be any claim for renewal. Armed with the above amendment of Marc

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1982 Supreme(Raj) 345

RAJASTHAN HIGH COURT AT JAIPUR BENCHG.M.Lodha, J.M/s Raju Wine Stores etc. - AppellantVersusState of Rajasthan & ors. - RespondentS.B.C.W.P. Nos. 535, 539, 534, 510 and 512 of 1982.Decided On : 1-05-1982

The government has the power to amend rules and regulations governing the sale of liquor, and such amendments are not subject to the doctrine of promissory estoppel or the principles of natural justice.

Cases Referred (4)

RAJASTHAN HIGH COURT AT JAIPUR BENCH
G.M.Lodha, J.
M/s Raju Wine Stores etc. - Appellant
Versus
State of Rajasthan & ors. - Respondent
S.B.C.W.P. Nos. 535, 539, 534, 510 and 512 of 1982.
Decided On : 1-05-1982