Srinagar: Upholding the government decision of re-auction of 305 liquor vends in the Union Territory, the J&K and Ladakh High Court has ruled that since the government holds an exclusive privilege in the sale and manufacture of liquor, the scope of judicial review in administrative decisions is extremely limited.
The court dismissed the writ petitions by the bidders who challenged the 2024 government decision of re-auction of the retail liquor vend licenses across the former state.
Justice W S Nargal upholding the government decision said “in view of the exclusive privilege of the government in sale/manufacture of liquor, the scope of judicial review in administrative decisions concerning the same is extremely limited”.
Bids for the liquor vends were cancelled by the administration on the grounds of poor response and less competition.
The petitioners challenged the cancellation of the auction as arbitrary, mala fide and unreasonable. They argued that once they were declared as the highest bidder by virtue of the government entering into correspondence with them, a right was accrued to them.
This right, they argued, cannot be taken away without adopting due process of law, especially when a bidder is declared as the highest one and required to deposit money for the purpose and also barred from participating in other bids.
The decision of the government in going for re-auction is in derogation to the mandate and spirit of the provisions of the Contract Act beside being arbitrary and malafide, they argued further.
The advocate general D C Raina countered and said the liquor trade does not vest any right on the petitioners. It is an absolute privilege of the government to part with such privilege.
He contended that nobody has an unfettered right of having such a privilege adding “liquor trade is a privilege, which the government parts, and the scope of interference by courts in fiscal matters is minimal as compared to normal contractual obligations.”
Justice Nargal held that the government act of re-auction is a necessary and logical corollary of poor response and less competition in the bidding process. It only logically follows that once there is poor response and less competition in the bidding process, it would have the propensity of causing loss to the State exchequer.
He observed “it does not appear to this court that by taking such a stand, the government has sought to defend its stand on the basis of completely fresh reasons. In any event, even if it were to be assumed that this constitutes a fresh reason, it would be immaterial as this court, while adjudicating on the validity of the governmental action has only based its conclusion on the basis of reasons, explicitly mentioned in the order- the lack of competition and the poor response to the bids.”
He concluded “no vested right is accrued to a bidder simply by virtue of the fact that he/she has been declared as the highest bidder provisionally and subject to fulfilment of certain conditions in a given auction.”
Bearing in mind the nature of the liquor trade, the bench held “this court, being a constitutional court, should be slow in interfering with the executive decisions taken by the State. The decisions are essentially a matter of economic policy in which the government must be afforded a greater latitude and fair play in the joints.”
He said the mere existence of a provision for minimum guaranteed revenue or minimum reserve bid price in the Excise Policy 2024- 25, vide SO 85, does not disentitle the government from cancelling the auction and re-auctioning on germane considerations having a logical nexus with the policy objectives.
“The decision to cancel the auction and the subsequent order for reauctioning cannot be termed as arbitrary, discriminatory, or mala fide so as to warrant judicial interference,” said the court.
In categorical terms it “in any event, this court cannot interfere with an administrative decision, merely on the premise that any other decision would have been fairer, wiser, or more logical especially, when it relates to the Excise policy.”
The cause projected by the petitioners does not subserve an overwhelming public interest, which must be borne in mind to decide whether judicial intervention is called for or not, said the court.
It added “the petitioners, being fully aware of the said auction conditions participated in the same without any demur and after having participated in the auction, cannot turn around and challenge or impugn an auction condition unless there is a foundation of manifest arbitrariness or mala fide, which is conspicuously absent in the instant case.”
The court said that cancelling the auction cannot be termed as unreasonable or arbitrary and that it appears to be an informed decision based upon germane considerations.
The government, it said, is at liberty to proceed with the re-auction of various liquor vends in accordance with law.
