2006 (7) TMI 612 - SC - Central Excise

Exercise for grant of licence was stopped Held that - In any event the period for which licences could be directed to the appellants has since expired. This Court, thus, cannot direct grant of licence for the next year only because some licences had been granted after 9th March, 2005. Article 14 of the Constitution of India carries with it a positive concept. Equality cannot be claimed in illegalities. We have moreover noticed hereinbefore, the statement made by the learned Additional Solicitor General that steps would be taken for cancellation of licences of those licensees who had been granted licence after the said date. We do not intend to make any further observation in regard thereto. It is true that some licences had been granted, but the same cannot by itself be a ground to issue a writ of mandamus, particularly in view of the fact that the appellants have no legal right in respect thereof. For the reasons aforementioned, no merit in these appeals. Moreover the period for which the applications for grant of licences had been granted has also expired. We dismiss these appeals.

Issues Involved:
1. Legitimacy of the rejection of L-52 licence applications.
2. Alleged arbitrary and discriminatory treatment by the State.
3. Applicability of the doctrine of legitimate expectation.
4. Compliance with procedural requirements and policy decisions.
5. The State's authority to change or rescind policy decisions.

Detailed Analysis:

Legitimacy of the Rejection of L-52 Licence Applications:
The Government of National Capital Territory of Delhi formulated an excise policy in 2002 permitting the sale of Indian Made Foreign Liquor (IMFL) through private parties upon issuance of L-52 licences. The appellants filed applications for these licences, which were subsequently rejected by the State. The appellants argued that the State acted illegally and without jurisdiction in rejecting their applications, especially since other licences had been granted between 11.3.2005 and 28.4.2005. The Court noted that the State had the right to adopt, vary, amend, or rescind policy decisions and that the appellants did not derive any accrued or vested right merely by filing applications.

Alleged Arbitrary and Discriminatory Treatment by the State:
The appellants contended that the State adopted a pick-and-choose method, ignoring the first-cum-first-serve basis for granting licences. The Court observed that the equality clause in Article 14 of the Constitution of India would apply, and the State could not adopt different procedures for different applicants. The Court expressed dissatisfaction with the manner in which the applications were processed, noting that the cases of the appellants were not considered along with those who were similarly situated, thereby implying a lack of fairness and reasonableness in the State's actions.

Applicability of the Doctrine of Legitimate Expectation:
The appellants argued that they had a legitimate expectation to obtain licences based on the State's policy decision. The Court, however, found it difficult to accept this contention, stating that the doctrine of legitimate expectation is a source of procedural or substantive right, but its relevance depends on whether the expectation was legitimate. The State's advertisement clearly stated that the grant of L-52 licences was subject to acceptance by the competent authority, who could accept or reject any application without assigning any reason. Therefore, the appellants could not have had any legitimate expectation that they would invariably be granted a licence.

Compliance with Procedural Requirements and Policy Decisions:
The Court noted that the State had made a change in its policy decision with a view to earn more revenue and represented to the applicants that their cases would be considered on their own merits. Such consideration was required to be fair and reasonable. The Court also pointed out that the State issued a public notice on 7.2.2005, notifying the closure of the scheme and clarifying that pending applications would be considered as per the rules and terms and conditions of the scheme. The Court emphasized that the applications were required to be strictly scrutinized, and unless an accrued or vested right had been derived by the appellants, the policy decision could have been changed.

The State's Authority to Change or Rescind Policy Decisions:
The Court reiterated that the matter relating to the grant of licences for dealing in liquor is within the exclusive domain of the State. The State had the right to adopt a policy decision and consequently had the right to vary, amend, or rescind the same. The Court cited several precedents to support the view that the application for a licence must be decided in accordance with the law applicable on the date on which the authority granting the registration applies its mind to the prayer for registration. The Court concluded that if a policy decision had been taken on 16.9.2005 not to grant L-52 licences, no licence could have been granted after that date.

Conclusion:
The Supreme Court dismissed the appeals, finding no merit in the appellants' arguments. The Court held that the appellants did not have any legal right to the grant of licences and that the State's policy decision to stop issuing L-52 licences was valid. The Court also noted that the period for which the applications for grant of licences had been granted had expired, and therefore, no further relief could be provided to the appellants.

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