# Vijay Pratap Singh & Ors v. State of U.P. & Ors

- **Citation:** (2025) 3 ILRA 633
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-03-05
- **Case number:** Writ C No. 2218 of 2025
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/vijay-pratap-singh-ors-v-state-of-u-p-ors-53229
- **Pages:** 20

## Headnote

A. Civil Law - UP Excise Act, 1910 -
Sections 24, 24-A & 36-A - New Excise
Policy, 2025 - Liquor shop license -
Renewal - e-lottery - Exclusion claimed -
634 INDIAN LAW REPORTS ALLAHABAD SERIES
Right to carry out trade in liquor -
Entitlement - Ugar Sugar Works Ltd.'s
case
relied
upon
-
There
is
no
fundamental right to carry out trade in
liquor - Held, the dealing in liquor attracts
the principles of res extra commercium as
it has been well settled that there cannot
be any commerce, there cannot be a
business in crime because specifically the
liquor and the intoxicants have to be
regulated
as
they
are
noxious
and
injurious to health; no citizen can claim
any right to deal with such goods on the
principles of General Public Policy i.e. res
extra commercium. (Para 24 and 33)

B. Civil Law - Constitution of India,1950 -
Article 226 - Writ - Judicial review -
Excise Policy - Scope of interference - B.
Surendra Das's case relied upon - The
challenge to the Policy can be on a Ltd.
ground and one of the grounds available
to challenge the Policy was violation of
Article 14 of the Constitution of India -
Once it is held that the petitioners have no
right, no writ can be issued as the
challenge to the Policy is premised on the
foundation of a right. (Para 25 and 34)

C. Principles of res extra commercium -
General Public Policy -Applicability. (Par
33)

D. Civil Law - Constitution of India,1950 -
Article 300-A - Right to property - Right
of return of money - Right protected
under the Rules, how far can be taken
away by a Policy - Held, the right of
return of the money at the end of the
license year is even protected in the rules,
the said right cannot be taken away
through a Policy decision - High Court
quashed the Clause 5.15.2.2(1)(ga) of the
Policy declaring it violative of Art. 300-A
of Constitution. (Para 36 and 40)

E. Constitution of India,1950 - Article
300-A - Word 'Law' - Meaning - The word
'law' as used in the context of Article 300A of the Constitution has to mean the law
framed
by
legislature
and
not
the
executive directions as given under Article
162 of the Constitution. (Para 38)
F Practice and Procedure - Though the
provision of Policy was not challenged, the
issue relating to it was arisen and
addressed by both side - Permissibility of
deciding the vires of Policy - Held, Clause
5.15.2.2 (1) (ga) of the said Policy, has
the affect of taking away the rights vested
under Art. 300-A; although, there is no
challenge to the said provision, however,
the issue has arisen and was addressed by
both the sides extensively - High Court
quashed the Clause 5.15.2.2 (1) (ga) of
the Policy. (Para 40)

Writ petition dismissed. (E-1)

List of Cases cited:

## Text

_Characters 0–39,960 of 61,801. This is a partial read: ask again with offset=39960 for what follows._

3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
633
to third respondent only because it
is registered as MSE?

89. Structuring of the cloud
contract is such that the bidder (third
respondent) is the MSP. It acts not only on
its behalf but also acts on behalf of CSP in
submitting the bid. The cloud contract
envisages an agreement between MSP and
its dominant partner i.e. CSP. The contract
further stipulates a guarantee by the CSP
that it shall provide all services which are
expected to be provided by the CSP and
also extend assurances in assisting MSP in
performing its part of obligation under the
contract. MSP, therefore, is in collaboration
with CSP for performing duties under the
cloud contract with dominant functions
performed by CSP.

90. MSP and CSP are two distinct
entities with different roles assigned to
them in the cloud contract. The dominant
partner of cloud contract i.e. CSP is not an
MSE. The MSE regime does not extend
benefit of MSE policy in cases of foreign
collaboration or an exigency in which the
registered MSE is not rendering the
services or plays a subservient role to a
dominant partner which is not an MSE.
Even foreign collaboration or joint venture,
etc., is not permissible in the MSME
regime. Works contract are also excluded
from its purview. The MSME policy, as is
apparent from the Act of 2006 as well as
procurement policy of 2012 limits its
applicability only to registered MSME
units for the goods produced by it or
services rendered by it. Nothing more and
nothing less.

91. Extending the benefit of MSE
policy in award of cloud contract in favour
of third respondent would thus run counter
to the policy objectives and provisions of
MSE regime. Extending such benefit will
be
wholly
irrational
and
arbitrary.
Preferential treatment to third respondent
under the MSME policy will not subserve
the objective of the policy itself and would
be arbitrary.

92. Grant of benefit of MSE policy
in favour of third respondent for award of
cloud contract since is found impermissible
and arbitrary, the consequential award of
contract to third respondent cannot be
sustained and is quashed. Consequently,
this petition succeeds and is allowed.
Respondent no.2 is directed to proceed
further in accordance with law for award of
cloud contract, in light of the observations
contained in this judgment.

93. Parties are left to bear their
own costs.
----------
(2025) 3 ILRA 633
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 05.03.2025

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Writ C No. 2218 of 2025
alongwith other connected cases

Vijay Pratap Singh & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Manoj Kumar Dwivedi, Akhilesh Kumar Mishra,
Vikrant Dwivedi

Counsel for the Respondents:
C.S.C.

A. Civil Law - UP Excise Act, 1910 -
Sections 24, 24-A & 36-A - New Excise
Policy, 2025 - Liquor shop license -
Renewal - e-lottery - Exclusion claimed -
634 INDIAN LAW REPORTS ALLAHABAD SERIES
Right to carry out trade in liquor -
Entitlement - Ugar Sugar Works Ltd.'s
case
relied
upon
-
There
is
no
fundamental right to carry out trade in
liquor - Held, the dealing in liquor attracts
the principles of res extra commercium as
it has been well settled that there cannot
be any commerce, there cannot be a
business in crime because specifically the
liquor and the intoxicants have to be
regulated
as
they
are
noxious
and
injurious to health; no citizen can claim
any right to deal with such goods on the
principles of General Public Policy i.e. res
extra commercium. (Para 24 and 33)

B. Civil Law - Constitution of India,1950 -
Article 226 - Writ - Judicial review -
Excise Policy - Scope of interference - B.
Surendra Das's case relied upon - The
challenge to the Policy can be on a Ltd.
ground and one of the grounds available
to challenge the Policy was violation of
Article 14 of the Constitution of India -
Once it is held that the petitioners have no
right, no writ can be issued as the
challenge to the Policy is premised on the
foundation of a right. (Para 25 and 34)

C. Principles of res extra commercium -
General Public Policy -Applicability. (Par
33)

D. Civil Law - Constitution of India,1950 -
Article 300-A - Right to property - Right
of return of money - Right protected
under the Rules, how far can be taken
away by a Policy - Held, the right of
return of the money at the end of the
license year is even protected in the rules,
the said right cannot be taken away
through a Policy decision - High Court
quashed the Clause 5.15.2.2(1)(ga) of the
Policy declaring it violative of Art. 300-A
of Constitution. (Para 36 and 40)

E. Constitution of India,1950 - Article
300-A - Word 'Law' - Meaning - The word
'law' as used in the context of Article 300A of the Constitution has to mean the law
framed
by
legislature
and
not
the
executive directions as given under Article
162 of the Constitution. (Para 38)
F Practice and Procedure - Though the
provision of Policy was not challenged, the
issue relating to it was arisen and
addressed by both side - Permissibility of
deciding the vires of Policy - Held, Clause
5.15.2.2 (1) (ga) of the said Policy, has
the affect of taking away the rights vested
under Art. 300-A; although, there is no
challenge to the said provision, however,
the issue has arisen and was addressed by
both the sides extensively - High Court
quashed the Clause 5.15.2.2 (1) (ga) of
the Policy. (Para 40)

Writ petition dismissed. (E-1)

List of Cases cited:

1.
Krishna
Rai
(dead)
through
Legal
Representatives & ors. Vs Banaras Hindu
University; (2022) SCC 713

2. Government of India Vs Vedanta Ltd. & ors.;
(2020) 10 SCC 1

3. Khoday Distilleries Ltd. & ors.Vs St.of Karn. &
ors.; (1995) 1 SCC 574

4.
Ugar
Sugar
Works
Ltd.
Vs
Delhi
Administration & ors.; (2001) 3 SCC 635

5. St. of Kerala & ors.Vs B. Surendra Das & ors.;
(2015) 12 SCC 101

6. Kuldeep Singh Vs Govt. of NCT of Delhi;
(2006) 5 SCC 702

7. U.O.I.Vs Indo-Afghan Agencies Ltd.; (1968) 2
SCR 366

8. National Building Construction Corporation Vs
S. Raghunathan & ors.; (1998) Supp (1) SCR
156

9. S. B. International Ltd. Vs Assistant Director
General of Foreign Trade & ors.; 1996 (2) SCC
439

10. U.O.I.Vs Indian Charge Crome and Anr.;
1999 (7) SCC 314

11. Howrah Municipal Corp. & ors.Vs Ganges
Rope Co. Ltd. & ors.; 2004 (1) SCC 663
3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
635
12. Kuldeep Singh Vs Govt. NCT of Delhi; 2006
(5) SCC 702

13. Commissioner of Municipal Corporation,
Shimla Vs Prem Lata Sood & ors.; 2007 (11)
SCC 40

14. Anand Kumar Sharma Vs St. of U.P. & ors.;
2014 SCC OnLine All 15240

15. The St. of Mah. & anr.Vs Lok Shikshan
Sanstha & ors.; 1971 (2) SCC 410

16. Col A. S. Sangwan Vs U.O.I.& ors.; 1980
(Supp) SCC 559

17. Shri Sitaram Sugar Comp. Ltd. Vs U.O.I.&
ors.; 1990 (3) SCC 223

18. U.O.I.Vs S. L. Dutta & anr.; 1991 (1) SCC 505

19.
Ugar
Sugar
Works
Ltd
Vs
Delhi
Administration & ors.; 2001 (3) SCC 635

20. Sidheshwar Sahakari Sakhar Karkhana Ltd.
Vs U.O.I.& ors.; 2005 (3) SCC 369

21. Dhampur Sugar Kashipur Ltd. Vs St. of
Uttaranchal & ors.; 2007 (8) SCC 418

22. Bajaj Hindustan Ltd. Vs Sir Shadi Lal
Enterprises Ltd. & anr.; 2011 (1) SCC 640

23. Ehsan Khalid Vs U.O.I. through Secretary &
ors.; 2014 (13) SCC 356

24. Writ Tax No.504 of 2002; Brij Bhushan
Chaudhary Vs St. of U.P. decided on 05.07.2002

25. Bombay Dyeing & Mfg. Co. Ltd. Vs St. of
Bombay; AIR 1958 SC 328

26. Bishambhar Dayal Chandra Mohan & ors.Vs
St. of U.P. & ors.; (1982) 1 SCC 39

27. Hindustan Times & ors.Vs St. of U.P. & anr.;
(2003) 1 SCC 591

(Delivered by Hon'ble Pankaj Bhatia, J.)

1. Heard Shri Manoj Kumar Dwivedi,
Shri Shobhit Mohan Shukla, Shri Anurag
Kumar Singh, Shri Rohit Jaiswal, Shri
Abhishek Singh and Shri Avinash Singh,
learned
counsel
appearing
for
the
petitioners and Dr. L.P. Mishra, learned
counsel appearing for the State assisted by
Shri Anil Pratap singh, learned Addl.
Advocate General, Shri Shailendra Kumar
Singh, learned CSC, Shri Pankaj Khare,
learned A.C.S.C., Shri Tushar Verma,
learned A.C.S.C., Shri Badrish Tripathi,
learned A.C.S.C., Shri Abhishek Kumar
Pandey, A.C.S.C. and Shri Dheerendra
Singh, learned Standing Counsel for the
respondent - State.

2. Present writ petitions have been
filed challenging the Government Order
dated 06.02.2025 specifically 5.11 issued
by respondent no.1.

There is also a challenge to the
consequential
order
dated
06.02.2025
issued by respondent no.2 and the notices
dated 13.02.2025 issued by respondent no.3
which provides for settlement of all country
liquor shops through e-lottery process
including the shop of the petitioners as
contained in Annexures - 1 to 3.

A further mandamus has been
sought commanding respondent no.3 to
exclude the shop of the petitioners for the
settlement through e-lottery for the Excise
Year 2025 - 26.
It is further prayed that any other
writ
which
this
Court
may
deem
appropriate may be issued.

3. The facts that arise from all the
petitions are that the petitioners were
running liquor shops by virtue of the
licenses granted in their favour in terms of
the policy which subsisted prior to passing
of the policy dated 06.02.2025. It is
claimed that most of the petitioners were
636 INDIAN LAW REPORTS ALLAHABAD SERIES
running the shops since the year 2018
which were granted to them through elottery process and were renewed on a
yearly basis on the basis of the demands
and
fees
as
demanded
which
were
enhanced from time to time. It is further
stated that in terms of the license granted in
the year 2018 and renewed subsequently
from year to year, the last such license in
favour of the petitioners was to subsist till
31.03.2025 and there was a legitimate
expectation
that
in
terms
of
the
prescriptions contained in the rules, an
option of renewal shall be conferred and
shall be given to the petitioners, however,
the State Government through Government
Order dated 06.02.2025 framed the excise
policy. In terms of the said excise policy,
the manner of allocation and grant of shops
was radically modified and it was provided
that all the liquor shops which were under
the control of the State Government and are
regulated by virtue of the U.P. Excise Act
and the Rules framed thereunder shall be
amended and shall be given through a fresh
e-lottery to be drawn as prescribed in the
government
policy.
Certain
other
prescriptions were also noticed in the said
government policy. The said policy for the
sake of brevity is being referred to 'New
Excise Policy, 2025'.

4. In sum and substance of the
arguments is that Condition No.5.11 of the
said policy takes away the rights of
consideration for renewal which were
vested in favour of the petitioners in terms
of various rules and to that extent it is
proposed to be argued that the policy is bad
in law. The other contentious issue as raised
is with regard to Clause 5.15.2.2(1)(ga)
wherein it has been prescribed that all the
stocks which are lying with the licensee
shall be taken on 01.04.2025 and shall be
kept in the custody of the Excise
Commissioner which shall be destroyed by
them under their guidance and videography,
and no amount of compensation shall be
payable to the licensee.

5. In nutshell argument raised by
the petitioners are in respect of these two
clauses which are said to be offending.

6. The first argument raised is that
the policy decision is contrary to Rule 5 of
the Rules which have been framed for
regulating the sale of various liquor shops.
The second argument raises is that the
circular which is in the form of a
Government Order cannot override the
rules
which
specifically
provide
for
consideration and right of renewal which I
shall advert to subsequently. It is further
argued that as the rules have not been
amended, a challenge was raised before the
Allahabad High Court on the ground that
without amending the respective rules in
respect of various shops, the Government
Order has been floated. It is argued that in a
huge haste, to overcome the said legal
lacunae, the rules have been modified on
03.03.2025 by issuance of a publication. In
terms of the said rules with regard to liquor
sale through Model Shops were amended,
the rules in respect of country liquor was
also modified. It is stated that after the
modification of the said rules, the interim
order which was passed by the Allahabad
High Court in Writ Tax No.748 of 2025
was vacated and the parties were given the
liberty to challenge their rights.

7. Attacking the said amendment
in
the
rules
w.e.f.
03.03.2025,
the
submission of learned counsel for the
petitioners is that the said rules cannot be
applied retrospectively. He argues that the
policy was framed on 06.02.2025 through
the Government Order and thereafter,
3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
637
applications
were
invited
for
the
participants and as such, the law as was
applicable on the date of inviting the tender
through e-lottery should be the relevant law
and thus, the amendments effected w.e.f.
03.03.2025 do not cure the lacunae which
has occurred by the State. It is further
argued that the petitioners cannot be
deprived of the legal rights which vest in
them by virtue of the rules through an
illegal policy which in the present case is
Government Order dated 06.02.2025. It is
further proposed to be argued that the State
has to act as a welfare State to uphold the
majesty and rule of law, which is absent in
the present case. It is further argued by
virtue of the provisions contained in Clause
5.15.2.2(1)(ga), the right of property stands
affected adversely and the petitioners have
been deprived of their right to property
without any law which is also violative of
Art. 300A of Constitution of India. It is
further argued that the State in its policy
has specifically excluded one kind of shop
known as U.P. Excise (Settlement of
Licenses for Premium Retail Vends of
Foreign Liquor) Rules, 2020 and to that
extent,
the
policy
of
the
State
is
discriminatory insofar as they have taken
policy in respect of certain kind of shops
only whereas the premium retail vends
have been exempted from the said policy
decision
which,
according
to
the
petitioners, is arbitrary and illegal. It is
further argued that only two rules have
been amended in respect of two kind of
shops and there are no amendment with
regard to the other shop noticeably the
shops of retail of Bhang as well as the other
retail shops which include the shop of
vending of Beer.

8. It is further argued by one of the
counsel(s) appearing for the petitioners that
in terms of the rules it was prescribed that
after the expiry of the period of license, if
the licensee desires, the State Government
may take steps for renewal on the basis of
the material available. In the present case,
the said right of 'desire' expressed and
conferred by virtue of the rules has been
taken away in terms of the policy. It is
further argued that the policy is violative of
Rule 5. He further argues that although
there is no fundamental right under Art.
19(6) of the Constitution, the policy still
has to satisfy the test of Art. 14 of the
Constitution which is miserably failing in
the present policy. I shall advert to the
judgments
referred
by
the
parties
subsequently.

9. Starting from the said argument
as recorded above, learned counsel for the
State was called.

10. Dr. L.P. Mishra, learned
counsel for the State assisted by the other
counsels argues that firstly there is no right
to carry trade in liquor as has been held by
the Supreme Court. He further argues that
the distinction drawn with regard to the
premium retail vends of foreign liquor and
allegations of violation of Art. 14 of
Constitution on that ground merits rejection
on account of sole reason that the said
shops are a separate category and no parity
can be claimed by the petitioners who have
a license in different category of shops. He
further argues that separate rules governed
with regard to the sale of the foreign kinds
of liquor and thus, the claim of parity is not
justified. He further argues that there is no
specific challenge to Clause 1(ga) of Para
5.15.2.2 and thus, the petitioners cannot
argue on the said clause. He further argues
that the argument that only two set of rules
have
been
modified/amended
on
03.03.2025 is for the reason that the
category of shops have been reduced which
638 INDIAN LAW REPORTS ALLAHABAD SERIES
were five in number in earlier policy and
now they are four in number. He argues
that the amendment with regard to two set
of
shops,
as
recorded
above,
were
published, however, with regard to the
other set of shops, no rules have been
framed so far which shall be done by the
State
Government
in
terms
of
the
prescriptions contained in the Excise Act.
He further argues that with regard to the
claim that the petitioners would be
deprived of their right to property, he has
given statement that earlier with regard to
destruction of the liquor and the erstwhile
rules which were prevalent shall be
considered by the State Government as per
the directions that may be issued by this
Court and a rational decision shall be taken
at an appropriate level by the appropriate
authority. He argues that he is unable to
make a statement on that count as the
policy decision in question was ratified by
the Cabinet and without approval of the
Cabinet, no decision/statement can be
given at this stage. He, however, undertakes
that till a fresh decision is taken by Cabinet
at an appropriate level, the stocks after the
expiry of the license shall not be destroyed
and shall be kept which shall be subject to
further decision which shall be taken by the
State Government at an appropriate level in
accordance with law.

11. He also places reliance on
Section 36-A of U.P. Excise Act which
shall be dealt with subsequently. He also
argues that the amendment carried out in
the rules on 03.03.2025 have not been
challenged in the present writ petitions. He
further argues that the submission of
counsel for the petitioners that law as
prevalent
on
the
issuance
of
the
advertisement would prevail, is contrary to
the settled principles, as the law which
applies on the date of the issuance of the
licenses would be governing the rights in
between the parties and to that extent, the
petitioners are wrong in arguing the same.

12. In rejoinder, learned counsel
for the petitioners apart from reiterating the
submissions as have been recorded above,
have argued that once the license is
granted, the rights start accruing in favour
of the petitioners and the said rights can be
taken away only in accordance with law
and whatever benefits flow from the
licenses granted should be extended to the
petitioners which have been denied by
means of the policy. It is further proposed
to be argued that the petitioners were
continuing since the year 2018 onward and
had made heavy investments and the State
Government has come out with a policy
abruptly which will lead severe losses to
the petitioners. It is further argued that due
to the fact that the licenses were renewed
since the year 2018 on year to year basis,
the petitioners have made huge investments
and thus, there was a legitimate expectation
that the licenses would be renewed this
year also.

13. Dr. L.P. Mishra, learned
counsel for the State countering the
submission on the arguments of legitimate
expectation argues that the legitimate
expectation cannot be claimed against law
and to that extent, the arguments merits
rejection.

14. Learned the counsel for the
State argues that the petitioners have also
applied under the New Policy and they are
estopped from challenging the Policy.
Having taken the benefit of the said
submissions, the counsel for the petitioner
argues that merely because the petitioners
have applied under the new Policy, they
cannot be estopped from arguing on their
3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
639
vested right, which according to them vests
by virtue of their rights in their favour.

15. Learned counsel for the
petitioners in support of the contentions
that they are not estopped from raising the
plea, as argued by the counsel for the State,
have placed reliance on Para 24 of the
judgment of the Supreme Court in the case
of Krishna Rai (dead) through Legal
Representatives and Others vs. Banaras
Hindu University; (2022) SCC 713 which
is as under:

"24. The case laws relied
upon by the Division Bench would
have no application in the facts of
the present case as none of the
judgments relied upon by the
Division Bench laid down that
principle of estoppel would be
above law. It is settled principle
that principle of estoppel cannot
override the law. The manual duly
approved by the Executive Council
will prevail over any such principle
of estoppel or acquiescence."

16. The counsel for the petitioners
placed reliance on the judgment in the case
of Government of India vs. Vedanta
Limited & Ors; (2020) 10 SCC 1 to argue
that the law as prevalent on the date of
Public Policy would apply. In this context
reliance is placed on para 106, which is as
under :

"106.
The
two
Explanations in Section 48 begin
with the words "For the avoidance
of any doubt". It cannot, however,
be presumed to be clarificatory and
retrospective, since the substituted
Explanation 1 has introduced new
sub-clauses, which have brought
about a material and substantive
change in the section. A new
Explanation 2 has been inserted
which states that the test as to
whether there is a contravention
with the fundamental policy of
Indian law, shall not entail a review
on the merits of the dispute. Since
the amendments have introduced
specific criteria for the first time, it
must
be
considered
to
be
prospective, irrespective of the
usage of the phrase "for the
removal of doubts". Reliance is
placed on the judgment of this
Court in Sedco Forex International
Drill.
Inc. v. CIT [Sedco
Forex
International
Drill.
Inc. v. CIT,
(2005) 12 SCC 717] wherein it was
held that an Explanation if it
changes the law, it cannot be
presumed
to
be
retrospective,
irrespective of the fact that the
phrases used are "it is declared"
or "for the removal of doubts".
In SsangYong
Engg.
&
Construction
Co.
Ltd. v. NHAI [SsangYong Engg. &
Construction
Co.
Ltd. v. NHAI,
(2019) 15 SCC 131 : (2020) 2 SCC
(Civ)
213]
this
Court
was
considering the amendments made
to
Section
34,
wherein
two
Explanations to Section 34 had
been inserted, which are identically
worded with the two Explanations
to Section 48. In that case, a
similar ground of retrospectivity
had been urged. This Court held
that since the Explanations had
been introduced for the first time, it
is the substance of the amendment
which has to be looked at, rather
than the form. Even in cases where
"for
avoidance
of
doubt",
640 INDIAN LAW REPORTS ALLAHABAD SERIES
something is clarified by way of an
amendment,
such
clarification
cannot have retrospective effect, if
the earlier law has been changed
substantially."

17. Before adverting to the factual
submissions as recorded above, it is
essential to notice that the excise under the
State of U.P. is governed under the
provisions of U.P. Excise Act, 1910; the
powers and duties of the officers regulating
are specified; the establishment and control
of the liquor shops is exclusively in the
administration of the Excise Departments
in the District; the import, export and
transport is also regulated by virtue of
Chapter III; and manufacture, possession
and sale is governed by Chapter IV of the
said act.

18. It is essential to notice Section
24 and Section 24A of the U.P. Excise Act.
Section 24 grants an exclusive privilege of
manufacture which can be granted by the
State Government through the Excise
Commissioner which is subject to the
provisions of Section 31, which is quoted
herein below:

"24. Grants of exclusive
privilege of manufacture, etc.-
Subject to the provisions of Section
31, the Excise Commissioner may
grant to any person a license for
the exclusive privilege-
(1) of manufacturing or of
supplying by wholesale, or of both,
or
(2) of selling by wholesale
or by retail, or
(3) of manufacturing or of
supplying by wholesale, or of both,
and of selling by retail, any country
liquor or intoxicating drug within
any local area."

19. Section 24A governs the right
of the Excise Commissioner for grant of
license or licenses for the exclusive or other
privilege with regard to sale by retail at
shops. Section 24A is quoted herein below:

"24-A. Grant of exclusive
or other privilege in respect of
foreign liquor.-(1) Subject to the
provisions of Section 31, the Excise
Commissioner may grant to any
person a license or licenses for the
exclusive or other privilege,-
(a) of manufacturing or of
supply by wholesale, or of both; or
(b) of manufacturing or of
supplying by wholesale, or of both
and selling by retail; or
(c) of selling by wholesale
(to wholesale or retail vendors); or
(d) of selling by retail at
shops (for consumption 'on' or 'off'
the premises or for consumption
'on' and 'off' the premises) any
foreign liquor in any locality.
(2) The grant of license or
licenses under clause (d) of subsection (1) in relation to any
locality shall be without prejudice
to the grant of licenses for the retail
sale of foreign liquor in the same
locality in hotels and restaurants
for consumption in their premises.
(3) Where more licenses
than one are proposed to be
granted under clause (d) of subsection (1) in relation to any
locality for the same period,
advance intimation of the proposal
shall be given to the prospective
applicants for every such license.
3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
641
(4)
The
provisions
of
Section 25, and proviso to Section
39 shall apply in relation to grant
of a license for an exclusive or
other privilege under this section
as they apply in respect of the grant
of a license for an exclusive
privilege under Section 24."

20. In terms of the powers
conferred by virtue of Section 24 & 24A of
the Excise Act, the State through the Excise
Commissioner is empowered to control and
regulate the sale etc., of the liquor shops.

21. Chapter VI of the said Act
provides for grant of licenses, permits and
passes which include the power to suspend
or cancel the licenses. It is essential to
notice Section 36-A of the Excise Act,
which is as under:

"36-A. Bar to right of
renewal and compensation-No
person to whom a license has been
granted under this Act shall have
any claim to the renewal of such
license
or
any
claim
for
compensation on the determination
or non-renewal thereof."

22. In terms of the powers
conferred by virtue of the Act, rules have
been framed with regard to the sale in
respect of various kind of liquors. In terms
of the said statutory prescription and the
rules framed, the petitioners were granted
license. It is essential to notice that the
rules which are applicable to various kind
of liquor are known as U.P. Excise
(Settlement of Licenses for Retail Sale of
Beer) Rules, U.P. (Settlement of Licenses
for Retail Sale of Country Liquor) Rules,
U.P. Excise Settlement of License for
Retail Shop of Foreign Liquor (Excluding
Beer and Wine) Rules, and, U.P. Excise
(Settlement of Licenses for Retail Sale of
Wine), Rules which have been framed from
time to time. The State Government also
framed rules which are known as the U.P.
Excise (Settlement of Retail Licenses for
Model Shop of Foreign Liquor) Rules.

23. To test the first argument that
the right of the petitioners of renewal is
conferred by virtue of the Rules, vests in
them as soon as they are granted license. To
test the said argument, it is essential to
notice Constitutional Bench Judgment of
the Supreme Court in the case of Khoday
Distilleries Ltd. and Others vs. State of
Karnataka and Others; (1995) 1 SCC 574,
wherein the Supreme Court had the
occasion to consider the rights to carry out
trade in liquor, in contradistinction to the
rights entrusted by virtue of Article 19 of
the Constitution of India. The law as
summarized by the Supreme Court is as
under:

"60.
We
may
now
summarise the law on the subject
as
culled
from
the
aforesaid
decisions.
(a) The rights protected by
Article 19(1) are not absolute but
qualified. The qualifications are
stated in clauses (2) to (6) of
Article 19. The fundamental rights
guaranteed in Article 19(1)(a) to
(g) are, therefore, to be read along
with the said qualifications. Even
the rights guaranteed under the
Constitutions of the other civilized
countries are not absolute but are
read
subject
to
the
implied
limitations on them. Those implied
limitations are made explicit by
clauses (2) to (6) of Article 19 of
our Constitution.
642 INDIAN LAW REPORTS ALLAHABAD SERIES
(b) The right to practise
any profession or to carry on any
occupation, trade or business does
not
extend
to
practising
a
profession or carrying on an
occupation,
trade
or
business
which is inherently vicious and
pernicious, and is condemned by
all civilised societies. It does not
entitle citizens to carry on trade or
business in activities which are
immoral and criminal and in
articles
or
goods
which
are
obnoxious and injurious to health,
safety and welfare of the general
public, i.e., res extra commercium,
(outside commerce). There cannot
be business in crime.
(c) Potable liquor as a
beverage is an intoxicating and
depressant
drink
which
is
dangerous and injurious to health
and is, therefore, an article which
is res
extra
commercium being
inherently harmful. A citizen has,
therefore, no fundamental right to
do trade or business in liquor.
Hence the trade or business in
liquor
can
be
completely
prohibited.
(d)
Article
47
of
the
Constitution considers intoxicating
drinks and drugs as injurious to
health and impeding the raising of
level of nutrition and the standard
of living of the people and
improvement of the public health.
It, therefore, ordains the State to
bring about prohibition of the
consumption of intoxicating drinks
which obviously include liquor,
except for medicinal purposes.
Article 47 is one of the directive
principles which is fundamental in
the governance of the country. The
State has, therefore, the power to
completely
prohibit
the
manufacture,
sale,
possession,
distribution and consumption of
potable liquor as a beverage, both
because
it
is
inherently
a
dangerous article of consumption
and also because of the directive
principle contained in Article 47,
except when it is used and
consumed for medicinal purposes.
(e) For the same reason,
the State can create a monopoly
either in itself or in the agency
created by it for the manufacture,
possession, sale and distribution of
the liquor as a beverage and also
sell the licences to the citizens for
the said purpose by charging fees.
This can be done under Article
19(6) or even otherwise.
(f) For the same reason,
again,
the
State
can
impose
limitations and restrictions on the
trade or business in potable liquor
as a beverage which restrictions
are in nature different from those
imposed on the trade or business in
legitimate activities and goods and
articles which are res commercium.
The restrictions and limitations on
the trade or business in potable
liquor can again be both under
Article 19(6) or otherwise. The
restrictions and limitations can
extend to the State carrying on the
trade or business itself to the
exclusion of and elimination of
others and/or to preserving to itself
the right to sell licences to do trade
or business in the same, to others.
(g) When the State permits
trade or business in the potable
liquor with or without limitation,
the citizen has the right to carry on
3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
643
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.
(h) The State can adopt any
mode of selling the licences for
trade or business with a view to
maximise its revenue so long as the
method
adopted
is
not
discriminatory.
(I) The State can carry on
trade or business in potable liquor
notwithstanding
that
it
is an
intoxicating drink and Article 47
enjoins
it
to
prohibit
its
consumption.
When
the
State
carries on such business, it does so
to restrict and regulate production,
supply and consumption of liquor
which
is
also
an
aspect
of
reasonable
restriction
in
the
interest of general public. The State
cannot on that account be said to
be carrying on an illegitimate
business.
(j) The mere fact that the
State levies taxes or fees on the
production,
sale
and
income
derived
from
potable
liquor
whether the production, sale or
income is legitimate or illegitimate,
does not make the State a party to
the said activities. The power of the
State to raise revenue by levying
taxes and fees should not be
confused with the power of the
State to prohibit or regulate the
trade or business in question. The
State exercises its two different
powers on such occasions. Hence
the mere fact that the State levies
taxes and fees on trade or business
in liquor or income derived from it,
does not make the right to carry on
trade or business in liquor a
fundamental right, or even a legal
right when such trade or business
is completely prohibited.
(k)
The
State
cannot
prohibit trade or business in
medicinal and toilet preparations
containing liquor or alcohol. The
State can, however, under Article
19(6) place reasonable restrictions
on the right to trade or business in
the same in the interests of general
public.
(l)
Likewise,
the
State
cannot prohibit trade or business in
industrial alcohol which is not used
as a beverage but used legitimately
for industrial purposes. The State,
however, can place reasonable
restrictions on the said trade or
business in the interests of the
general public under Article 19(6)
of the Constitution.

(m) The restrictions placed
on the trade or business in
industrial alcohol or in medicinal
and toilet preparations containing
liquor or alcohol may also be for
the purposes of preventing their
abuse or diversion for use as or in
beverage."

24. Similarly, the Supreme Court
had the occasion to deal with the scope of
judicial review in challenge to the Excise
Policy under Article 226 in the judgment in
the case of Ugar Sugar Works Ltd. vs.
Delhi Administration and Others; (2001) 3
SCC 635 wherein the Constitutional Bench
Judgment was affirmed to hold that there is
no fundamental right to carry out trade in
liquor and the grounds to challenge were
also very limited.
644 INDIAN LAW REPORTS ALLAHABAD SERIES
25. It is essential to notice the next
judgment of the Supreme Court in the case
of State of Kerala and Others vs. B.
Surendra Das and others; (2015) 12 SCC
101 wherein the view that no one has a
fundamental right to trade in liquor was
reaffirmed. It was also stated that the
challenge to the Policy can be on a limited
ground and one of the grounds available to
challenge the Policy was violation of
Article 14 of the Constitution of India.

26. It is also essential to notice the
judgment of the Supreme Court in the case
of Kuldeep Singh vs. Govt. of NCT of
Delhi; (2006) 5 SCC 702 wherein the
Supreme Court had the occasion to
consider that on account of the change of
Policy, the huge investments made did not
confer on the licensee any accrued or
vested right so as to bar the government
from
changing
the
previous
policy
decisions. It is essential to notice paragraph
15 and 30 of the said judgment, which are
as under:

"15. The appellants filed
applications for grant of licence
pursuant to the policy decision
adopted by the State. They might
have invested a huge amount, but
did not thereby derive any accrued
or vested right. The matter relating
to grant of licence for dealing in
liquor is within the exclusive
domain of the State. If the State had
the right to adopt a policy decision,
they indisputably had a right to
vary, amend or rescind the same.
The effect of a policy decision taken
by the State is to be considered
having regard to the provisions
contained in Article 47 of the
Constitution of India as also its
power of regulation and control in
respect of the trade in terms of the
provisions of the Excise Act.
30. Unless, therefore, an
accrued or vested right had been
derived by the appellants, the
policy decision could have been
changed."

27. The counsel for the petitioners
have also relied upon the judgment in the
case of Ugar Sugar Works Ltd. (supra) and
argued that the limited ground of challenge
are available, as held in Paras 13 to 18,
which are as under:

"13. That there is no
fundamental right to trade in
intoxicants, like liquor, has been
conclusively held by this Court
in State of A.P. v. McDowell &
Co. [(1996) 3 SCC 709] where
taking note of some of the earlier
Constitution Bench decisions of this
Court, the argument that a citizen
of this country has a fundamental
right to trade in intoxicant liquor
was
once
again
emphatically
repelled. That issue is, thus, no
longer res integra. The following
observations
of
the
Bench
in McDowell case [(1996) 3 SCC
709] are educative: (SCC pp. 73536, para 39)
"39. The contention that a
citizen of this country has a
fundamental right to trade in
intoxicating liquors refuses to die
in spite of the recent Constitution
Bench
decision
in
Khoday
Distilleries [Khoday
Distilleries
Ltd. v. State of Karnataka, (1995) 1
SCC 574] . It is raised before us
again.
In Khoday
Distilleries [Khoday
Distilleries
Ltd. v. State of Karnataka, (1995) 1
3 All. Vijay Pratap Singh & Ors. Vs. State of U.P. & Ors.
645
SCC 574] this Court reviewed the
entire case-law on the subject and
concluded that a citizen has no
fundamental right to trade or
business in intoxicating liquors and
that trade or business in such
liquor
can
be
completely
prohibited. It held that because of
its vicious and pernicious nature,
dealing in intoxicating liquors is
considered
to
be
res
extra
commercium (outside commerce).
Article 47 of the Constitution, it
pointed out, requires the State to
endeavour
to
bring
about
prohibition of the consumption
except for medicinal purposes of
intoxicating drinks and all drugs
which are injurious to health. For
the same reason, the Bench held,
the State can treat a monopoly
either in itself or in an agency
created by it for the manufacture,
possession, sale and distribution of
liquor as a beverage. The holding
is emphatic and unambiguous. Yet
an argument is sought to be built
upon certain words occurring in
clauses (e) and (f) of the summary
contained in para 60 of the
decision. In these clauses, it was
observed
that
creation
of
a
monopoly in the State to deal in
intoxicating liquors and the power
to impose restrictions, limitations
and even prohibition thereon can
be imposed both under clause (6) of
Article 19 or even otherwise.
Seizing upon these observations,
Shri Ganguly argued that this
decision implicitly recognises that
business in liquor is a fundamental
right under Article 19(1)(g). If it
were not so, asked the learned
counsel, reference to Article 19(6)
has no meaning. We do not think
that any such argument can be built
upon the said observations. In
clause (e), the Bench held, a
monopoly in the State or its agency
can be created 'under Article
19(6)or even otherwise'. Similarly,
in clause (f), while speaking of
imposition
of
restrictions
and
limitations on this business, it held
that they can be imposed 'both
under Article 19(6)or otherwise'.
The said words cannot be read as
militating
against
the
express
propositions enunciated in clauses
(b), (c), (d), (e) and (f) of the said
summary.