The court affirmed that a company cannot be denied a liquor licence based solely on an FIR against a director, emphasizing discrimination and lack of legal basis for such denial.

JUDGMENT :

Sanjeev Prakash Sharma, J.

Necessary facts, shorn of details, are that the petitioner – company is engaged in wholesale distribution and import of alcoholic beverages across several States in India. For the State of Punjab, it had an L-1 licence for the year 2022-23 which was renewed for 2023-24.

As on 31.03.2024, petitioner’s annual turnover was approximately Rs.2,378 crores. They are aggrieved by the respondents’ action regarding the non-renewal/denial of fresh L-1 licence for State of Punjab for the year 2024-25. The L-1 licence is issued for wholesale distribution to ensure the supply chain from manufacturers to retails, while L-2/L-14 Licenses are issued for retail liquor vends, under the PUNJAB EXCISE ACT , 1914. The power to reject, suspend or cancel licence is permissible only under specific conditions as mentioned in the statute.

2. Learned Senior counsel for the petitioner submits that the present petition is third round of litigation on the issue, and by way of this petition, he challenges the order dated 17.05.2024 passed by respondent No.3 – Excise Commissioner, and order dated 10.04.2024 passed by respondent No.5 i.e. Collector-cum-Deputy Commissioner (Excise).

3. By the aforesaid orders, the petitioner has been denied grant of L-1 licence for wholesale of liquor on the premise of its having been involved in an FIR, registered against one of the Directors of the Company. The order passed by the Collector-cum-Deputy Commissioner (Excise) has been upheld by the Excise Commissioner in the appeal, vide its order dated 17.05.2024.

Learned Senior counsel for the petitioner submits that the order dated 17.05.2024, passed by respondent No.3 suffers from non-application of mind, and therefore, the order is wholly arbitrary and non-speaking in nature.

4. It is stated that on 11.03.2024, the respondents issued the Excise Policy for the year 2024-25, whereby it amended the earlier policy of renewal of L-1 licence, and decided that all existing L-1 licence holders would be required to obtain a fresh licence for the excise year 2024-25.

5. As per the new Excise Policy, L-1 licence was divided into L-1 (PML) i.e. Punjab Medium Liquor and L-1 (IMFL/IFL) i.e. Imported Foreign Liquor, and one entity was allowed to hold only one type of L-1 licence out of the two.

6. The petitioner, having vast experience and having fulfilled all the conditions as laid down under the new Excise Policy, applied for grant of L-1 licence on 18.03.2024. However, the respondents have demanded further clarification on 04.04.2024 from the petitioner with regard to FIR dated 25.08.2023 and also the information regarding FIR registered against son of one of the Directors of the company. The petitioner was also asked to provide information for grant of L-1 licenses in other states.

7. It is stated by learned Senior counsel for the petitioner that the petitioner – company consists of three Directors. However, prior to the year 2023, one Amandeep Singh Dhall was also the Director of the company, and he resigned on 19.09.2022. His resignation was accepted, however, an FIR was registered by the Police Station CBI, ACB, New Delhi on 25.08.2023 for offences under Section 120-B I.P.C. and Sections 7 , 7A and 8 P.C. Act, 1988. In