IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 762 of 2007. Reserved on: 15.12.2009 Date of decision: 23.12.2009 M/s.Rangar Breweries Limited. …,. Petitioner Versus State of H.P & ors. ….. Respondents Coram: The Hon’ble Mr. Justice Deepak Gupta, J. The Hon’ble Mr.Justice V.K.Ahuja, J. Whether approved for reporting ? Yes For the petitioner: Mr.Suneet Goel, Advocate. For the respondents: S/Shri R.M.Bisht and Vikas Rathore, Dy.Advocate Generals for respondents No.1 and 2. Mr.K.D.Sood, Advocate for respondent No.3. _______________________________________________ Deepak Gupta, J. By means of this petition, the petitioner which is a company duly incorporated under the Indian Companies Act, 1956 engaged in the manufacture of liquor has challenged Clause 31 of the Excise Allotment Announcements which reads as follows:- 2 “31. The basic quota of country liquor will be supplied through any source approved by the Excise and Taxation Commissioner. The quantity earmarked for each manufactory (if any) shall be decided by the Excise and Taxation Commissioner. The Excise and Taxation Commissioner, however, reserves the right to allow the supplies of any kind of country liquor, as he considers necessary and expedient from within or outside the State and of any brand of country liquor and also at any rate during the currency of the year and no claim of compensation will be entertained from the licensee.” This clause gives the power to the Excise and Taxation Commissioner to earmark the quantity for each manufacturer. It is argued that this power is very wide and is violative of Article 14 of the Constitution of India. The petitioner also challenges the communication dated 5th March, 2007, Annexure P/5 whereby the Excise and Taxation Commissioner in exercise of the powers vested in him under clause 31 supra has directed as follows:- “1. That 24.30 lac proof liter Country Liquor quota has been earmarked to M/s. HPGIC Ltd. Bottling plant Mehatpur and 3 Parwanoo out of the total 1.25 crores proof liters quota of Country Liquor of the State for the year 2007-08.” Shri Suneet Goel, learned counsel for the petitioner contends that once the State has permitted private participation in the sale of liquor, it must treat all the participants equally and there can be no discrimination. He, therefore, challenges the earmarking of almost 20% of the yearly quota in favour of respondent No.3, M/s.H.P General Industries Corporation Limited. The respondents urged that the petitioner has no right to file the writ petition. According to the respondents, under Section 27 of the Punjab Excise Act, 1914 as applicable to the State of Himachal Pradesh, the right to manufacture, sale or trade in liquor vests in the Government. It is further urged that respondent No.3 is a public sector undertaking and, therefore, no plea of discrimination can be raised by the petitioner against an instrumentality of the State. The law in this regard is very clear. The Apex Court in State of M.P and others Vs. Nandlal 4 Jaiswal and others, 1986 (4) SCC 566 held as follows:- “33. But, before we do so, we may at this stage conveniently refer to a contention of a preliminary nature advanced on behalf of the State Government and respondents Nos. 5-11 against the applicability of Article 14 in a case dealing with the grant of liquor licences. The contention was that trade or business in liquor is so inherently pernicious that no one can claim any fundamental right in respect of it and Article 14 cannot therefore be invoked by the petitioners. Now, it is true, and it is well settled by several decisions of this Court including the decision in Har Shanker v. Deputy Excise & Taxation Commr. (1975) 3 SCR 254: (AIR 1975 SC 1121) that there is no fundamental right in a citizen to carry on trade or business in liquor. The State under its regulatory power has the power to prohibit absolutely every form of activity in relation to intoxicants - its manufacture, storage, export, import, sale and possession. No one can claim as against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor. But when the State decides to grant such right or privilege to others the State cannot escape the rigour of Article 14. It cannot act arbitrarily or at its sweet will. It must comply with the equality clause while granting the exclusive right or privilege of manufacturing or selling liquor. It is, therefore, not possible to uphold the contention of the State Government and 5 respondents Nos. 5-11 that Article 14 can have no application in a case where the licence to manufacture or sell liquor is being granted by the State Government. The State cannot ride roughshod over the requirement of that Article.” In Doongaji and Co. (I) Vs. State of Madhya Pradesh and others, 1991, Supp(2), SCC 313, the Apex Court held as follows:- “15. It is settled law by several decisions of this Court that there is no fundamental right to a citizen to carry on trade or business in liquor. The State under its regulatory power, has power to prohibit absolutely any form of activity in relation to an intoxicant, its manufacture, possession, import and export. No one can claim, as against the State, the right to carry on trade or business in any intoxicants, nor the State be compelled to part with its exclusive right or privilege of manufacture, sale, storage of liquor. Further when the State has decided to part with such right or privilege to the others, then State can regulate consistent with the principles of equality -enshrined under Art. 14 and any infraction in this behalf at its pleasure is arbitrary violating Art. 14. Therefore, the exclusive right or privilege of manufacture, storage, sale, import and export of the liquor through any agency other than the State would be subject to rigour of Art. 14. “ 6 Sh.Suneet Goel, learned counsel for the petitioner has placed reliance on the following observations of the Apex Court in Khoday Distilleries Ltd. and others Vs. State of Karnataka and others, 1995 (1) SCC 574:- “(g) When the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business.” The latest judgment of the Apex Court brought to our notice is in Kuldeep Singh Vs. Govt. of NCT of Delhi 2006(5) SCC 702 wherein it was held thus:- “20. Here, however, the State had made a change in its policy decision of opening the doors to the private entrepreneurs evidently with a view to earn more revenue. It represented to the applicants that their cases would be considered on their own merits. Such consideration was, thus, required to be fair and reasonable. Although dealing in liquor as has rightly been submitted by the learned Additional Solicitor General is not a fundamental right, but indisputably the 7 equality clause contained in Article 14 of the constitution of India would apply.” The contention of Sh.Suneet Goel is that the State has monopoly of the liquor trade and it may not allow any private entrants into this field. However, according to him, once the private entrants are invited and the liquor trade is open to all then the equality clause contained in Article 14 of the Constitution of India would apply and all have to be treated equally. There can be no quarrel with this preposition of law in so far as it relates to private players. However, when the doors to the liquor trade are opened partially for the private players and the State also continues to trade in liquor through its instrumentalities then the private players cannot complain of discrimination against the instrumentalities of the State. In Khoday Distilleries’ case, the Court clearly held that no person has a right to engage in the business of manufacture or sale of liquor and when the State permits any such person to trade in potable liquor, the said person has the right to carry on the trade subject to limitations which the 8 State may impose. In the Excise Policy Announcements, it was clearly stated that the Excise and Taxation Commissioner had a right to grant different quotas to different people. A citizen may have the right to complain about discrimination between the citizens but cannot complain of discrimination as against the instrumentalities of the State. Even in Doongaji’s case, the Apex Court clearly held that no one can claim right of equality against the State. Since respondent No.3 is an instrumentality of the State, the petitioner has no right to challenge the allotment of any particular quota to respondent No.3. In view of the above discussion, we find no merit in the petition which is accordingly rejected. No order as to costs. ( Deepak Gupta ) Judge December 23, 2009 (V.K.Ahuja) (m) Judge