Pattanaik, J. - (1.)This batch of Special Leave Petitions are by the State of Tamil Nadu, directed against the Judgment of the Division Bench of Madras High Court, dealing with the licensing system for retail vending of Indian made foreign liquor. The Excise Year is for the period of 1st of August of the year in question till the 31st of July of the next year. In June, 2001, the Government of Tamil Nadu came forward with a Policy to be adopted for licensing of the Indian made foreign liquor retail vending shops for the block period 2001-2004. The said Policy was issued under G.O.Ms. No. 113. For the aforesaid block period, it was decided that the retail vending shops for the entire State should be fixed at 6000 and the privilege fee shall be worked out on the notified area basis, taking the average privilege fee of the last three years and providing for some suitable increase. It was also stipulated that the licensee should lift the minimum off-take fixed for the shop by the licensing authority and in case of failure to lift the same, the licensee will be liable to pay a penalty in proportion to the loss of revenue due to non-lifting of stocks and if there is still further default, then the licence would be liable to be cancelled. In accordance with the aforesaid policy decision, amendments to the Tamil Nadu Liquor (Retail Vending) Rules, 1989 were made, which were issued under G.O.Ms. No. 115, dated 22nd of June, 2001. The Prohibition Commissioner also recommended a new licensing system for grant of licences to the Indian made foreign liquor retail vending shops for the block year 2001-2004, which was accepted by the State Government and the necessary amendments to the Retail Vending Rules were made. Under Rule 13 of the amended rules, when the number of eligible applications does not exceed the number of shops notified for an area, then all applicants shall be selected for the grant of privilege. But when the number of applications in respect of the shops in a notified area is more than the number of shops in that area, the selection of applicant for grant of privilege shall be decided by drawal of lot by the licensing authority in the presence of the Collector and the applicants who prefer to be present. Rule 14 of the amended rules provided that privilege amount be fixed by the Commissioner, on the basis of the guidelines approved by the Government. Rule 30(2) provides for the lifting of the minimum off-take of the liquor fixed for the shops by the licensing authority based on the guidelines issued by the Government and the consequences to follow, in case the licensee fails to lift the minimum off-take. Sub-rule (7) of Rule 30 provides that the applicant on being granted licence, shall abide by the provisions of the Tamil Nadu Prohibition Act, 1937, as well as the Tamil Nadu Liquor (Retail Vending) Rules, 1989, as amended from time to time and the terms and conditions of the licence granted thereunder.
(2.)In accordance with the aforesaid Excise Policy and the provisions of the Act and the Rules, the exclusive privilege in respect of different retail vending shops of Indian made foreign liquor were settled with the applicants and licences were also issued by the licensing authority in favour of them for carrying on the business. Even though the policy was for the block period of 2001-2004 and an existing licensee could apply for renewal of his licence, for the excise year 2002-2003, the Government of Tamil Nadu changed the policy by issuance of three G.O.Ms. of the same date being G.O.Ms. Nos. 128, 129 and 130. The aforesaid three G.O.Ms. indicate that the Government felt that there is a need for increasing the number of shops in unserved areas that are not notified and also in the existing notified areas where there is further potential and demand identified by the Collectors. It was also indicated that the privilege amount in respect of the shops located in areas adjoining the Corporations and Municipalities could be enhanced and as such there is a need to re-categorise the shops and to re-fix the privilege amount. The Commissioner of Prohibition and Excise also suggested that along with the increase in the number of notified shops and re-fixation of the privilege amount for the shops located in peripheral areas of Corporations/Municipalities, as well as the revision of privilege amount for augmenting the excise revenue, the Government should consider whether instead of renewing the licences of the existing licensees, all the shops may be allotted afresh in accordance with earlier G.O.Ms. No. 115, dated 22nd of June, 2001. In other words, it suggested to have a fresh draw of lot. In accordance with the aforesaid recommendations contained in G.O.Ms. No. 128, the State Government passed the necessary orders, directing that the provision for renewal of licences prescribed in Rule 14 of the Tamil Nadu Liquor (Retail Vending) Rules, 1989 be repealed and all the 7000 shops including the recategorised shops shall be disposed of, as per the procedures laid down in G.O.Ms. No. 115, dated 22nd June, 2001. Consequential amendments of certain rules were also made.
(3.)The existing holders of the privilege in question who had obtained licences for carrying on the business for the excise year 2001-2002, approached the High Court of Madras by filing writ petitions, challenging the validity of the Government Order Nos. 128, 129 and 130. The learned single Judge, on entertaining the writ petitions, granted interim orders on 16th of July, 2002, directing ad hoc renewal of licences for a period of three months in respect of the petitioners who had approached the Court. The State preferred the appeal to the Division Bench against the aforesaid interim order of the learned single Judge and the Division Bench while being in seisin of appeal against the interim order, passed by the single Judge, brought before it the writ petitions which were pending before the single Judge and disposed them of together by the impugned judgment dated 24th of July, 2002. On considering the submissions made at the Bar as well as the new excise policy and introduction of G.O.Ms. Nos. 128, 129 and 130, the Division Bench of the High Court came to the conclusion that though the excise policy is a subject of the policy-maker and it relates to a trade, which cannot be claimed as a matter of right by any citizen, but the Court would be entitled to probe into the reasonableness or otherwise of the Governmental orders and examine whether they can be sustained on the touchstone of the arbitrariness. The Division Bench sustained the Government orders, so far as they relate to the fiscal policy of the Government and the provisions made therein for augmentation of the excise revenue. It rejected the contention of the privilege holders and held that doctrine of promissory estoppel and legitimate expectation will have no application. But so far as the provisions dealing with the abolition of the renewal of the existing licence holders and to follow the procedure in respect of the shops by a fresh lot, the Court came to the conclusion that the aforesaid provision has absolutely no nexus with the object of augmentation of excise revenue and it was only meant to disable the existing licensees from opting for the renewal notwithstanding that the excise policy as enunciated in June, 2001 was for the block period 2001-2004. The Court held the aforesaid revised excise policy to be wholly unreasonable and arbitrary, having no nexus at all with the object of augmentation of excise revenue for which purpose the new policy was introduced. The Court finally disposed of the matter with the following directions:
"(i) The Government is at liberty to go ahead with the grant of privilege of retail vending of Indian Made Foreign Liquor to the extent of 7,000 shops as decided.

(ii) But the Government shall adhere to the places of retail vending which have been licenced for the excise year 2001-2002 and held by the petitioners and renew the licence of the petitioners for the excise year 2002-2003 on the petitioners' remittance of the privilege amount on the basis of the amount fixed in G.O.Ms. No. 129 dated 8-7-2002 and also taking into account the re-categorisation of the shops for the purpose of levy of the privilege amount.

(iii) The above facility of renewal to the petitioners shall be made available if the petitioners remit the requisite amounts on or before 31st of July, 2002.

(iv) For any reason, if there is a delay in renewal, the petitioners shall be entitled to vend the Indian Made Foreign Liquor in retail on payment of the proportionate privilege amount till the grant of licence.

(v) The Government, the Commissioner and all the District Collectors shall be entitled to re-locate the shops out of 7,000 at the places they feel expedient, but only after safeguarding the shops which are being run by the petitioners."
It is this order of the Division Bench of the Madras High Court, which is the subject-matter of challenge in all the special leave petitions.