Case: Ugar Sugar Works Ltd Vs. Delhi Administration

of liquor is ‘good’ is to ascertain whether that particular brand of liquor has been tested and tried extensively elsewhere and has found its acceptability in other States. The manner in which the Government chooses to ascertain the factor of higher acceptability, must in the very nature of things, fall within the discretion of the Government so long as the discretion is not exercised mala fide. Unreasonably or arbitrarily. The allegations of mala fide made in the writ petition are totally bereft of any factual matrix and we, therefore, do not detain ourselves at all to consider challenge on that ground. In fairness to learned Counsel for the petitioner we may record that challenge to notification on grounds of mala fide was not pressed during arguments. Laying down requirement of achieving minimum sale figures of a particular brand of liquor in other States, as a mode for determination of the “acceptability” of that brand of liquor, is neither irrelevant, nor irrational or unreasonable. It appears that prescription of MSF requirement is aimed at allowing sale of only such brands of liquor which have been tested, tried and found acceptable at large in other parts of the country. 23. The policy objective as reflected in the impugned notification is to provide liquor of good quality in Delhi. The executive policy to determine whether a particular brand of liquor is of good quality or not, on the basis of larger acceptability of the particular brand in other parts of the country, appears to us to be a fair and relevant mode. The manner for determining whether a particular brand of liquor has acquired larger acceptability or not so as to qualify for it being “liquor of good quality” has to be decided by the State is its discretion so long as the manner adopted by the State is “just, fair and reasonable”. It is not in dispute that the criteria of MSF is being uniformly applied and no pick and choose policy has been adopted by the State in that behalf. Learned Counsel for the petitioners has been unable to convince us that fixation of MSF requirements as a criteria for such determination is in any manner “unfair, irrational or unreasonable”. 24. The argument that since MSF laid down for the year 1994-1995 were not changed till 1998-99, there was no need to increase MSF requirements in 1999-2000 or to further increase the same in the year 2000-2001 for the lowest price tag brand of liquor from 60,000 cases (7.2 lac bottles) to 75,000 cases (9 lac bottles) for the current year, suffers from the basic infirmity that it invites the Court to enter into an area of testing the executive policy, not on grounds whether it is “just, fair and reasonable”, but whether the object could not have been achieved by fixing a lower MSF requirement. In other words Court is being invited to prescribe MSF requirements in exercise of its power of judicial review. That is not permissible and we must decline the invitation to enter that area. It is not within the province of this Court to lay down that the executive policy must always remain static, even if its revision is “just, fair and reasonable”. What is relevant is to find out whether the executive action is mala fide, unreasonable or irrational as a criterion. As already observed the Court, in exercise of its power of judicial review, cannot sit in judgment over the policy of Administration except on the limited grounds already noted. Each State is empowered to formulate its own liquor policy keeping in view the interest of its citizens. Determination of wide scale acceptability of a particular brand of liquor, on the basis of national sales figures, does not strike us as being unreasonable, much less irrational. The basis for determination is not only relevant but also fair. No direction can be given or expected from the Court regarding the `correctness’ of an executive policy unless while implementing such policies, there is infringement or violation of any constitutional or statutory provision. In the present case, not only there is no such violation but on other hand, the State in formulating its policy has exercised its statutory powers and applied them uniformly.25. Though, we are not required to test the correctness of the ‘reason’ for increase of MSF over the previous years’ figures, but it is relevant to point out that increase of sale from 60,000 cases to 75,000 cases in respect of ‘lowest price tag’ brand of liquor does not appear to be arbitrary and on the other hand it appears to have a rational basis. Economic mechanism is a highly sensitive and a complex matter. With inflation every year, it goes without saying, that the brand which has the “lowest price tag” this year, was perhaps not the brand which had the “lowest price tag lat year”. It is possible that the brand ‘with lowest price tag’ this year may not be of that good quality as the brand with identical price tag last year, even though it may conform to ISI standards. It was, therefore, reasonable for the State to find out whether that particular brand with the lowest price tag this year, had been tested and tried elsewhere and had been accepted largely by the public in other parts of India to determine if that particular brand of liquor can be considered to be liquor of good quality keeping the health and welfare of the public in view. The impugned notification in our opinion furthers the object of providing good liquor having larger acceptability. The policy is made in the interest of health, welfare and morals to benefit all citizens of Delhi and not the big industrial houses as alleged. Determinaton of wide scale acceptability on the basis of revised national sales figures (MSF) does not strike us as being unreasonable let alone irrational, arbitrary or unfair. Under these circumstances there is no justifiable reason warranting interference with the impugned notification. 26.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]16. In view of this settled position of law, any argument impugning the policy decision of the State Government, as reflected in the impugned notification, based upon Article 19(1)(g) is totally out of place and merits outright rejection and we have no hesitation in doing so most emphatically.17. Faced with the settled legal position that there is no fundamental right to trade in liquor, learned Counsel for the petitioner did not pursue the argument based on Article 19(1)(g) to question the competence of Delhi Administration to take a policy decision with regard to regulating trade in liquor and laying down various regulatory measures and in our opinion rightly so. Learned Counsel, however, mounted his challenge to the impugned notification based on Article 14 principally on the ground that the policy as reflected in the impugned notification was irrational and that raising of MSF requirements over the previousfigures with a view to regulate thebeing sold in Delhi was arbitrary and has no nexus with the object sought to be achieved viz., to provide liquor of good quality to the consumers in the National Capital Territory of Delhi. It was also urged that the policy is discriminatory and as a result of the policy, small scale manufactures with good quality of liquor, were likely to be deprived of their marketing brand within the potential market of Delhi, in case they do not achieve the prescribed MSF outside Delhi and that would result in leaving the field wide open only for big business houses who would retain their monopoly in Delhi market.In the present case the executive policy regulating the sale of liquor in the territory of Delhi is sought to be challenged by the petitioner on the ground that it isbesides beingand has no nexus with the object sought to be achieved. We are unable toallegations of mala fide made in the writ petition are totally bereft of any factual matrix and we, therefore, do not detain ourselves at all to consider challenge on that ground. In fairness to learned Counsel for the petitioner we may record that challenge to notification on grounds of mala fide was not pressed during arguments. Laying down requirement of achieving minimum sale figures of a particular brand of liquor in other States, as a mode for determination of theof that brand of liquor, is neither irrelevant, nor irrational or unreasonable. It appears that prescription of MSF requirement is aimed at allowing sale of only such brands of liquor which have been tested, tried and found acceptable at large in other parts of thebasis for determination is not only relevant but also fair. No direction can be given or expected from the Court regarding theof an executive policy unless while implementing such policies, there is infringement or violation of any constitutional or statutory provision. In the present case, not only there is no such violation but on other hand, the State in formulating its policy has exercised its statutory powers and applied them uniformly.25. Though, we are not required to test the correctness of thefor increase of MSF over the previousfigures, but it is relevant to point out that increase of sale from 60,000 cases to 75,000 cases in respect of ‘lowest pricebrand of liquor does not appear to be arbitrary and on the other hand it appears to have a rational basis. Economic mechanism is a highly sensitive and a complex matter. With inflation every year, it goes without saying, that the brand which has thethis year, was perhaps not the brand which had theprice tag latIt is possible that the brand ‘with lowest pricethis year may not be of that good quality as the brand with identical price tag last year, even though it may conform to ISI standards. It was, therefore, reasonable for the State to find out whether that particular brand with the lowest price tag this year, had been tested and tried elsewhere and had been accepted largely by the public in other parts of India to determine if that particular brand of liquor can be considered to be liquor of good quality keeping the health and welfare of the public in view. The impugned notification in our opinion furthers the object of providing good liquor having larger acceptability. The policy is made in the interest of health, welfare and morals to benefit all citizens of Delhi and not the big industrial houses as alleged. Determinaton of wide scale acceptability on the basis of revised national sales figures (MSF) does not strike us as being unreasonable let alone irrational, arbitrary or unfair. Under these circumstances there is no justifiable reason warranting interference with the impugned notification.