Summary
By majority, the Court struck down Haryana’s amended rule providing for a single statewide L-1BF licence for imported bottled foreign liquor. The Financial Commissioner’s regulatory power did not authorize determining the number of licences for the whole State in derogation of powers reserved to the State Government. The majority left the other challenges undecided. K.M. Joseph J. dissented, reading the regulatory power more broadly and rejecting the constitutional objections subject to observations on safeguards.
Issues
- Whether the Financial Commissioner could frame the rule requiring one statewide L-1BF licence.
- Whether the resulting exclusive licence and alleged risks of unfair dealing were constitutionally invalid.
Provisions considered
- Sections 6(a), 13(a), 58(2)(e) and 59(a), Punjab Excise Act, 1914, as applicable to HaryanaThe majority distinguished powers reserved to the State Government from the Financial Commissioner’s regulatory authority and held the impugned rule beyond the latter’s competence; the dissent differed on that construction. (¶¶ Navin Sinha J., 6–18, K.M. Joseph J., 4–20)
- Rule 24(i-eeee), Haryana Liquor License Rules, 1970, as amended in 2017The single statewide L-1BF licensing provision was struck down by the majority as ultra vires the Financial Commissioner’s statutory powers. (¶¶ Navin Sinha J., 5, Navin Sinha J., 15–19)
Held
- Majority: the power concerning licence numbers under Section 58(2)(e), read with the statutory scheme, belonged to the State Government and could not be assumed by the Financial Commissioner or sub-delegate under Section 59(a). The High Court’s construction would incongruously confer wider statewide powers on the Excise Commissioner than on the State Government. (¶ Navin Sinha J., 6–18)
- Majority: Rule 24(i-eeee) was struck down for want of statutory competence. Once that ground succeeded, it was unnecessary to adjudicate the other grounds, including constitutional objections to the exclusive licence. (¶ Navin Sinha J., 18–19)
- Dissent, K.M. Joseph J.: Section 58(2)(e) reserved licence numbers in a local area to the State, whereas Section 59’s power to regulate sale included fixing licence numbers for the State as a whole. He would uphold the competence to make the rule. (¶ K.M. Joseph J., 11–20)
- Dissent: open e-tendering and the policy’s revenue objective did not establish an impermissible monopoly. Article 19 was also unavailable to the company association without a citizen shareholder joining. Pricing and stock obligations provided safeguards, and concrete licence breaches could attract enforcement; he suggested suitable safeguards for fair dealing and would dismiss the appeal. These conclusions were not the majority’s basis of decision. (¶ K.M. Joseph J., 21–32)
Result
Appeal allowed by majority; amended Rule 24(i-eeee) struck down as ultra vires the Financial Commissioner’s powers. K.M. Joseph J. dissented and would have dismissed the appeal subject to his observations.