IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No.6617 of 2011 Date of decision: 19.4.2011 A Kler Hotels Private Limited & others. -----Petitioners. Vs. The Union Territory, Chandigarh & another. -----Respondents. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Rajiv Atma Ram, Sr.Advocate with Ms. Trishanjali Sharma, Advocate for the petitioners. Mr. Sanjay Kaushal, Sr. Standing Counsel with Mr. Sanjiv Ghai, Advocate for respondents. --- ADARSH KUMAR GOEL, J. 1. This petition seeks quashing of Excise Policy 2011-12 issued by the Chandigarh Administration under the provisions of the Punjab Excise Act, 1914 and Punjab Liquor Licence Rules, 1956, as applicable to the Union Territory, Chandigarh. 2. Case of the petitioners is that they were allotted L-2/L- 14A licences for retail sale of IMFL and country liquor in the year 2006. Prior to the year 2006, the allotment of liquor vends used to take place by auction but as a result of model excise policy C.W.P. No. 6617 of 2011 suggested by the Central Government in February, 2006, Annexure P-11, mode of allotment was shifted to fixed fee system to prevent cartels in liquor trade and to improve the quality of vends and services. The licences granted to the petitioners were renewed in the years 2007-08, 2008-09, 2009-10 and 2010-11. However, in the impugned policy for the year 2011-12, there is again change of mode of allotment. Inspite of noting that the earlier policy was working well, the system has been changed. Only reason given for the change is that only existing licencees were continuing in the retail trade denying opportunity to new entrants. According to the petitioners, this was factually incorrect as the new entrants were also coming though there was steady decline. As against 61 new entrants in the year 2007-08, there were five new entrants in the year 2010-11. Thus, contention raised in the petition is that the impugned policy is irrational and is against the public policy. It is also submitted that there was an amendment in the rules vide notification dated 16.3.2007 by substituting Rule 1 of the 1956 Rules to provide for fixed fee as mode of grant of L-2/14A licences and also providing for renewal of all existing licences at their option and the impugned policy is against the said rule. 3. Mr. Sanjay Kaushal, learned Senior Standing Counsel for the U.T., Chandigarh has put in appearance and pointed out that necessary amendment has been made in the 1956 Rules, which will come into force w.e.f. 1.5.2011 and will be applicable to 2 C.W.P. No. 6617 of 2011 the licences to be granted under the impugned policy. Rule 27(4) of the 1956 Rules has been substituted by a new Rule dealing with grant of mode of retail sale country liquor (L-14) and retail sale foreign liquor (L-2). Under the amended Rules, tenders are to be invited for each retail licence and on consideration thereof, the licences are to be granted. Though new policy was introduced in the year 2006-07 to prevent cartels and to improve quality of vends and services, the experience showed that number of new entrants reduced and only existing licencees had acquired monopoly. Accordingly, the impugned policy is based on the reasons mentioned therein i.e. to provide opportunity to the new entrants and the licences are to be given by inviting tenders. 4. We have considered the rival submissions. 5. As regards the objection that change of policy is irrational, arbitrary and contrary to the public interest, we are of the view that the policy is a prerogative of the Executive and more so, in the matter of liquor trade. Observations in document suggesting a model policy in the year 2006 about the experience of cartelization while giving licences by auction, cannot be a bar to reconsideration of the matter. Whether or not the new policy will achieve the objective of encouraging new entrants, is not a matter which can be gone into by this Court. Free play in joints has to be allowed in policy making and Courts exercise restraint in interfering in such matters unless violation of any provision is involved or policy is arbitrary or irrational. On the material placed 3 C.W.P. No. 6617 of 2011 before this Court, it is not possible to hold that the new policy is irrational or absurd, so as to call for interference by this Court. It is well settled that liquor trade does not fall under Article 19(1)(g) of the Constitution. 6. In the facts and circumstances of the case, we are of the view that no interference is called for with the impugned policy. The petition is dismissed. (ADARSH KUMAR GOEL) JUDGE April 19, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 4