Navin Sinha, J. - (1.) The appellant having been unsuccessful in its challenge to Rule 24(i-eeee) of the Haryana Liquor License Rules 1970 (as amended by the Haryana Liquor License (Amendment) Rules 2017), (hereinafter referred to as 'the Rules') as being ultra vires the Punjab Excise Act, 1914 (hereinafter referred to as 'the Act'), is in appeal before this Court. The amended Rule provides for a single L-1BF license for the entire State to deal in imported foreign liquor, bottled outside India and imported into the country in a bottled form (i.e. bottled in original). Under challenge is also clause 9.5.1.2 of the State Excise Policy for the year 2017-2018 to that extent, carried forward to the year 2018-2019 also. The procedure for grant of the single license under the amended Rule is through tender by e-bidding, with a reserve price of Rs. 50 crores.
(2.) Sri Gopal Subramanium, learned senior counsel for the appellant, submitted that the creation of a monopoly by the State in favour of a private entity, to trade in liquor, is contrary to Article 19(6) of the Constitution of India. The impugned order acknowledges that it would lead to serious distortions in the market, yet erroneously declines interference holding that once the matter moves from State control into the hands of private enterprise, the restrictions applicable to the State cease to apply. Reliance was placed on Akadasi Padhan vs. State of Orissa, 1963 AIR(SC) 1047, to contend that if a monopoly is created by the State in its favour, the same cannot be constitutionally permitted if the private agents appointed pursuant thereto, act as independent entities. Sri Subramanium also relied on Khoday Distilleries Ltd. vs. State of Karnataka (I), 1995 1 SCC 574, to submit that once the State parts with its privilege to trade in liquor, in favour of private individuals, the rigours of Article 14 will continue to apply to provide equal opportunity to all desirous to do so. Alternatively, it was submitted that the absence of sufficient checks and balances gives untrammeled and uncanalised powers to the sole licensee which again is constitutionally impermissible. Sri Subramanium further relied on Khoday Distilleries Ltd. vs. State of Karnataka, 1996 10 SCC 304, to submit that the interpretation of Section 58 (2)(e) and 59(a) of the Act by the High Court was flawed. Rule 24 (i-eeee) was ultra vires the Act. The interpretation put by the High Court grants wider powers to the Financial Commissioner, than the State Government itself. The single monopolistic L-1BF license was also discriminatory and violative of Article 14 of the Constitution in so far as no such requirement was stipulated for wholesale trade in Indian made foreign liquor or country liquor in the State. There was no rational or reasonable classification for this distinction between licensees, having any rationale or nexus with any object to be achieved.
(3.) Ms. Pinky Anand, learned Additional Solicitor General, submitted that the appellant never participated in the bidding process for the L-1BF license. A mere apprehension that a single L-1BF license for the entire State may affect market dynamics, when the reality was otherwise, resulting in rise of revenue, negates the challenge laid out by the appellant. The issue of monopoly in the hands of a private entity is devoid of merit as the process is through public auction, open to participation by all, and not tailored to suit any particular person or activated by malafides, relying on Association of Registration Plates vs. Union of India, 2005 1 SCC 679. Trade in original bottled foreign liquor was only a fraction of the entire liquor trade in the State, ranging between 0.64 percent to 1.98 per cent. The aim and object of the amendment was to increase revenue, curb pilferage, control illicit trade in the State of Indian made foreign liquor and bottled in original bottled foreign liquor. The Financial Commissioner was competent under Section 59(a) read with Section 13 to amend Rule 24 by incorporation of Rule 24 (i-eeee) providing for a single L-1BF license for the entire State, as the competence of the State for issuance of license under Section 58(2)(e) was limited to a local area only.;