Punjab-Haryana High Court
Vishal Singla vs State Of Haryana And Others on 6 April, 2021 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CM-4252-CWP-2021 in/and
CWP-17625-2020 (O&M)
Date of Decision:-6.4.2021
Vishal Singla
… Petitioner
Versus
State of Haryana and others
… Respondents
CORAM: HON’BLE MR. JUSTICE RAJAN GUPTA
HON’BLE MR. JUSTICE KARAMJIT SINGH
Present:- Mr. N.S. Boparai, Advocate
for the petitioner.
Mr.Ankur Mittal, Addl. A.G. Haryana.
KARAMJIT SINGH, J.
Case has been heard through video conferencing on account of
COVID-19 Pandemic.
Petitioner-Vishal Singla was declared successful bidder for
three zones i.e. Zone Nos.17, 22 & 41 and was given license to run L-2 and
L-14 liquor vends for the year 2020-2021. The present writ petition has
been filed by the petitioner seeking mandamus directing the respondents for
rescheduling of installments of license fee including those for the months of
October-November, 2020, to reduce the license fee in view of less sale due
to COVID-19 Pandemic, to waive interest and penalties, if any on late
deposit of license fee and not to cancel the allotment of liquor vends and to
given concession/relief to the petitioner on the basis of letter dated
15.10.2020 (Annexure P-15).
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The petition was contested by the respondents, who filed short
reply in the shape of affidavit of Mr. Ashutosh Rajan, Joint Excise and
Taxation Commissioner-cum-Collector (Excise), Haryana.
The petitioner filed rejoinder to the aforesaid affidavit,
controverting the contents of the same.
The petitioner has sought indulgence of this Court under Article
226/227 of the Constitution of India on the following two issues as reflected
by this Court vide order dated 19.1.2021:-
(i) Discrimination in the Policy dated 15.10.2020 (Annexure
P-15) regarding charging of license fee of first and
second quarter, one time fee for additional points and
rebate in license fee of third and fourth quarter for the
year 2020-2021.
(ii) The demand of license fee by the Government for the
period from 12.11.2020 to 19.11.2020, when the liquor
vends remained closed.
The counsel for the petitioner interalia contended that due to
COVID-19 Pandemic, the entire sale expectancy suffered, as there was a
complete lock-down till May, 2020 and thereafter the liquor vends were
opened in a phased manner. In regard to sale of liquor to L-4 and L-5
license holders (hotel and restaurant industry), the same remained closed till
September, 2020. So there was no supplies of liquor to L-4 and L-5 license
holders till September, 2020, whereas L-2 and L-14 license holders started
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operations in a phased manner from May, 2020 onwards and could not
supply liquor to L-4 and L-5 license holders till September, 2020. It was
further contended that ‘Ahatas’ (Anumat Kakshs) attached to the liquor
vends also remained closed till October, 2020 as a result of which the
petitioner suffered huge financial loses.
The counsel for the petitioner further contended that L-4 and L-
5 license holders are end users being consumption points for L-2 and L-14
license holders. As there was no sale of liquor till September, 2020 by L-4
and L-5 license holders, it directly effected the sales of L-2 and L-14 license
holders. However, the Government while formulating Policy dated
15.10.2020 (Annexure P-15) gave benefit/concession of the aforesaid extra
ordinary circumstances to L-4 and L-5 license holders but ignored L-2 and
L-14 license holders. The aforesaid policy is arbitrary and irrational. The
same being discriminatory and unfair, smacks of favoritism. The aforesaid
policy is also violative of Article 14 of the Constitution of India and thus is
unsustainable. The counsel for the petitioner in support of his arguments,
placed reliance on Asia Foundation and Construction Ltd. vs. Traflgar
House Construction (I) Ltd. 1997(1) SCC 738, wherein the Hon’ble Apex
Court while allowing the appeal held as follows:-
“11. This being the position, in our considered opinion, High
Court was not justified in interfering with the award by
going into different clauses of the bid document and then
coming to the conclusion that the terms provided for
modification or corrections even after a specified date and
further coming to the conclusion that respondent no.1 being
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the lowest bidder there was no reason for the Port Trust to
award the contract in favour of the appellant. We cannot
lose sight of the fact of escalation of cost in such project on
account of delay and the time involved and further in a
coordinated project like this, if one component is not
worked out the entire project gets delayed and the enormous
cost on that score if re-bidding is done. The High Court has
totally lost sight of this fact while directing the rebidding. In
our considered opinion direction of re-bidding in the facts
and circumstances of the present case instead of being in the
public interest would be grossly detrimental to the public
interest.
12. In the premises, as aforesaid, we set aside the impugned
judgment of the Orissa High Court and direction that the
contract awarded in favour of the appellant Paradip Port
Trust be affirmed and the appellant may execute the work
expeditiously. We further make it clear that the appellant
will not be entitled to claim any escalation of the bid
amount on the ground of any delay in issuing the work order
on account of the pendency of the present litigation. This
appeal is, therefore, allowed. But in the circumstance
without any order as to costs.”
The counsel for the petitioner also referred to Directorate of
Education and Others vs. Educomp Datamatics Ltd. and Others,
2004(4) SCC 19, wherein it was held that the Court can scrutinise the award
of contracts by the Government or its agencies in exercise of its powers of
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judicial review to prevent arbitrariness or favoritism within its inherent
limitations.
The counsel for the petitioner further brought to the notice of
this Court, judgment delivered by the Hon’ble Supreme Court in Jagdish
Mandal vs. State of Orissa and Others, 2007(14) SCC 517, wherein the
Hon’ble Apex Court held that the Court can interfere in tender or contractual
matters in exercise of power of judicial review if the process adopted or
decision made by the authority is mala-fide or intended to favour someone
or the process adopted or the decision made is so arbitrary and irrational that
no responsible authority acting reasonably and in accordance with relevant
law could have reached.
The counsel for the petitioner also relied upon The Haryana
State Agricultural Marketing Board and Others vs. Sadhu Ram and
Others, 2008(16) SCC 405, wherein it was observed that Court can
judicially review the exercise of contractual powers by the Government
bodies in order to prevent arbitrariness or favoritism.
In regard to issue No.2, the counsel for the petitioner contended
that the Government also took vindictive action by closing the liquor vends
from 12.11.2020 to 19.11.2020, as a result of which the petitioner further
suffered heavy financial losses. This being the position, the Government
could not demand license fee regarding liquor vends for the period from
12.11.2020 to 19.11.2020, from the petitioner.
On the other hand the State counsel while refuting the
arguments raised by the counsel for the petitioner, submitted that due to
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COVID-19 Pandemic the Haryana Excise Policy for 2020-2021 started from
6.5.2020 and has been extended upto 19.5.2021 i.e. for 379 days, with no
extra license fee for 14 additional days. Besides this Haryana Government
had not charged any license fee for the period from 1.4.2020 to 5.5.2020,
during which the liquor vends remained closed due to lock-down. It was
further contended that even for ‘Ahatas’ (Anumat Kakshs) the license fee
was exempted to the extent of 40%.
The State counsel brought to the notice of this Court that the
petitioner being holder of L-2 and L-14 licenses is not covered under Policy
(Annexure P-15) whereby certain concessions were given to the L-4 and L-5
license holders. The counsel for the State further argued that the petitioner
started making default in payment of license fee right from June 2000
onwards. As per the amended current Excise Policy, the monthly
installments are to be paid by 15th day of each month by the license holders.
In the month of September, 2020, the petitioner failed to pay license fee of
`22,43,909/- and even in the month of October, 2020 he defaulted in paying
the license fee and resultantly his liquor vends were sealed on 12.11.2020, as
per the current Excise Policy, in order to safeguard the revenue of the State.
The State counsel further contended that the petitioner cannot take benefit of
his own wrongs and as such he is liable to pay license fee even for the period
from 12.11.2020 to 19.11.2020 during which his liquor vends were sealed by
the Government. The State counsel further argued that as on 17.3.2021
amount of `3,76,12,242/- was standing due against the petitioner which
includes license fee and penalty for short-lifting of quota.
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The State counsel while referring to Joshi Technologies
International INC. vs. Union of India and Others (2015) 7 SCC 728,
submitted that the present writ petition is not maintainable which has been
filed by the petitioners to avoid his contractual obligation. The occurrence
of commercial difficulty, inconvenience or hardship in performance of the
conditions agreed to in the contract can provide no justification in not
complying with the terms of contract, which the parties had accepted. It is
not permissible that a licensee can workout the license if he finds it
profitable to do so and otherwise he can challenge the same if he finds it
commercially inexpedient to conduct his business.
It was next argued by the State counsel that Annexure P-15 is a
policy decision, which falls within the domain of the State Government. The
petitioner has no right to invoke the writ jurisdiction under Article 226/227
of the Constitution of India to challenge the same. It is was further
contended that even otherwise the petitioner has failed to prove any
discrimination, bias, arbitrariness or favoritism as has been pleaded in the
writ petition. The State counsel urged that the writ petition deserves to be
dismissed.
We have considered rival submissions addressed by the counsel
for the parties and gone through the synopses submitted by both the parties.
Basically the present writ petition has been filed by the
petitioner challenging Policy dated 15.10.2020 (Annexure P-15), framed by
the State Government whereby certain benefits were given to license holders
in view of the fact that COVID-19 Pandemic, affected the liquor business to
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the large extent. Annexure P-15 which is in the form of letter, reads as
follows:-
“From
Excise & Taxation Commissioner,
Haryana
To
All Deputy Excise and Taxation Commissioner
(Excise) in the State of Haryana
No.3355/X-III
Panchkula, dated the 15.10.2020
Subject: Regarding charging of license fee of 1st and 2nd quarter,
one time fee for additional points and rebate in license
fee of 3rd and 4th quarter for the year 2020-21.
Memo:-
Kindly refer to the subject cited above.
The matter has been reviewed and it has been decided to
allow the following benefits to the licensees keeping in view that
the COVID-19 pandemic has impacted the business to the large
extent:-
1. License fee of 1st and 2nd quarters from all annual licensees
except L-2/L-14A/L-1/L-13 licensees is chargeable after
calculating the days of opening proportionately on per day
basis.
2. One time fee for additional point and time extension fee
from the annual licensees except L-2/L-14A/L-1/L-13
licensees is chargeable after calculating the days of opening
proportionately on per day basis.
3. 20% rebate in license fee of 3rd and 4th quarters can be
given to the annual licensees except L-2/L-14A/L-1/L-13
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licensees, who have deposited their license fee of 3 rd and 4th
quarter by 20.09.2020.
Besides the above, license fee for Anumat Kaksh may be charged
as per the provisions of Excise Policy 2020-21 and Amended
Excise Policy 2020-21.
You are directed to take action accordingly.
Sd/-
Asst. Excise and Taxation Officer (Excise)
for Excise and Taxation Commissioner
Haryana, Panchkula”
The petitioner has challenged Annexure P-15 on the ground that
while ignoring L-2 and L-14 license holders, the State Government gave
benefits to the other categories of license holders, which resulted in unequal
classification between the various categories of license holders and such
classification is without any rationale and is arbitrary, discriminatory and
unjustified.
In this case the State filed short reply by way of affidavit of
Joint Excise and Taxation Commissioner-cum-Collector (Excise) Haryana,
in which it was specifically stated that in wake of COVID-19 Pandemic, the
Excise Policy was amended and number of incentive were given to the
licensees which are reproduced below:-
(i) The validity period of L-2 and L-14 and other concomitant
licenses was extended to 379 days instead of the usual 365
days. It means that the licensees got 14 extra days for sale
by paying license fee for 365 days only.
(ii) As per the original Excise Policy, the second installment of
security of 11% was to be taken within 7 days of starting of
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the year i.e. by 7th April. After Amendment, it was divided
into two parts of 5% each and was taken after 10 and 15
days of the start of the year.
(iii) The 1st installment of licensee fee for the month of June
was also allowed to be paid in a relaxed manner i.e. in two
parts, 5% by 5th June, 2020 and 3.3% by 15th June, 2020.
The License fee payment schedule was also relaxed. Nearly
6 months have passed since excise year started on 6th May,
2020. Only 61.5% of Annual License fee has become due
as per the Amended Excise Policy 2020-21. After 6
months operations, 70.2% of the License fee would have
fallen due as per original Excise Policy 2020-21. Reliefs as
explained in this sub-para and sub-para 5(ii) above are
deferments as already provided by the Government after
amended the Excise Policy. As a matter of fact, the
Government had envisaged and gauged the situation in
advance and has extended relief of the deferment of license
fee and security amount already.
(iv) In case any vend or vends of any zone are closed or are
subsequently closed on account of falling under COVID
Containment zone, its license fee quota shall be
proportionately waived off in proportion of days of closure.
It means full waiver of license fee was allowed for the
period for which the vend remained in COVID
containment zone.
(v) In case the Govt. decides to announce lockdown either in
whole State or in certain pockets, resulting into closure of
retail vend(s) in such cases, the licensee fee and quota for
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such period shall be proportionately exempted by ETC
Haryana. Similarly, licensee fee and quota of vends falling
in containment zone shall be waived off.
(vi) Mandatory quota lifting norm of first quarter was relaxed
to further safeguard the interests of the Licensees.
In the light of the above, we are of the view that financial losses
suffered by L-2 and L-14 license holders, due to unprecedented situation of
COVID-19 pandemic were also kept in mind by the authorities while
amending the Haryana Excise Policy. No license fee was charged regarding
L-1/L-13/L-2/L-14 license holders for the lock-down period during which
the liquor vends remained closed. Similar relief was given to the liquor
vends falling in containment zone. The Haryana Excise Policy for the year
2020-21 started w.e.f. 06.05.2020. As per Clause 2(d)(ix), the petitioner had
option to either start or refuse to start operations of his allotted zones as per
the amended Excise Policy. However, he accepted the terms of the contract
and started his business. The seven other allottees, who did not start
operations were allowed to exist and fresh allotment was made. No doubt
apart from the aforesaid benefits given to all the categories of license
holders, some additional concessions were given to L-4 and L-5 license
holders (hotel and restaurant industry) vide Annexure P-15. Restaurants and
hotels were the worst sufferers as they were opened much after the opening
of liquor vends. This being the position, we are of the view that there was
no arbitrariness, discrimination or unreasonableness in the impugned action
taken by the Government on account of unforeseen circumstances caused
due to spread of COVID-19 Pandemic. The aforesaid measures taken by the
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State Government with the aim to tide over the license holders from
financial crises, appears to be fair and proper.
Also it is the settled legal position that there is no fundamental
right to trade in liquor. In this context reference be made to Khoday
Distilleries Ltd. and Others vs. State of Karnataka and Others, (1995) 1
SCC 574. Besides this, the Hon’ble Supreme Court in M/s Ugar Sugar
Works Ltd. vs. Delhi Administration, 2001(3) SCC 635, has held that the
State has the authority to regulate the sale, purchase and consumption of
liquor. The Hon’ble Apex Court further held that no direction can be given
or expected from the Court regarding ‘correctness’ of an executive policy
unless while implementing such policies, there is infringement or violation
of any constitutional or statutory provision. In the instant case the petitioner
has failed to bring to the notice of this Court any such unconstitutionality.
Rather it appears on the record that the Haryana Government amended its
Liquor Policy for the year 2020-2021 to provide succor to all the licensees,
who suffered unforeseen financial losses due to imposition of lock-down in
the entire State.
It is trite that Article 14 of the Constitution applies even to the
matters of Government policy and if the policy or any action of the
Government, even in contractual matters fails to satisfy the test of
‘reasonableness’, it would be unconstitutional. However in the present
petition, the petitioner has failed to establish that Annexure P-15 was
vitiated by arbitrariness, unfairness and irrationality. ‘Level playing field’ is
an important concept while construing Article 19(1)(g) of the Constitution as
has been held in Reliance Energy Ltd. and Another vs. Maharashtra
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State Road Development Corporation Ltd. (2007)8 SCC 1. We are of the
view that the Haryana Government by amending its Liquor Policy for the
year 2020-21 provided ‘level playing field’ to all the stake holders, so as to
sub-serve the larger interest of all the license holders including L-2 and L-14
licensees.
Furthermore, the matters of economic and financial policies,
ought to be left to be decided by the Government itself. The Court cannot
strike down a policy decision taken by the State in the form of letter
Annexure P-15. This Court can interfere in such like matters only if the
policy decision is patently arbitrary, discriminatory or mala-fide. However,
no such illegality or irrationality or discrimination is brought on record by
the petitioner.
We have gone through the judgments referred by counsel for the
petitioner, but are of the view that the same are not of any help to the
petitioner to establish his case.
As per the respondents, the petitioner is defaulter since
beginning of the current Excise Policy. As on 17.03.2021 amount of
`3,76,12,242/- was outstanding against the petitioner. The petitioner failed
to deposit monthly license fee as per the schedule provided in the amended
Excise Policy for 2020-21. Due to the same reason, his liquor vends were
sealed and remained closed from 12.11.2020 to 19.11.2020. The aforesaid
action of the Government could not be termed as arbitrary or vindictive. The
said action was taken by the Government as per law, in order to safeguard
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the revenue of the State. So no fault could be found in the aforesaid
executive action.
In the light of the above, there is no justifiable reason
warranting interference with impugned policy (Annexure P-15) or the action
of the Government to seal the liquor vends of the petitioner, for the period
from 12.11.2020 to 19.11.2020.
Accordingly, this writ petition stands dismissed.
(RAJAN GUPTA) (KARAMJIT SINGH)
JUDGE JUDGE
06.04.2021
Gaurav Sorot
Whether reasoned / speaking? Yes / No
Whether reportable? Yes / No
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