M/S Blue Ice And Anr vs. State Of Haryana And Ors

Held

The Court held that the condition requiring an average monthly sale of ` 2,00,000/- of non-alcoholic items for the renewal of L-4/L-5 licenses was not illegal. The Court reasoned that these licenses are for selling liquor in pegs for on-consumption in restaurants, which naturally entails the sale of non-alcoholic food items. The negligible sales of non-alcoholic items by the petitioners, except for a suspicious surge in the months immediately preceding the renewal application, indicated a potential misuse of the license, possibly by selling liquor in bottles rather than pegs. The Court found the data presented by the State, showing a sudden and exponential increase in non-alcoholic sales, to be indicative of manipulation to meet the policy condition. Furthermore, the Court affirmed that under Rule 13 of the Haryana Liquor License Rules, 1970, renewal of a license is not an absolute right but is subject to fulfilling the conditions laid down in the excise policy. The Court found no vested right of the petitioners had been taken away, as the right to renewal itself flowed from the policy, which could impose conditions. The petitions were accordingly dismissed.

Facts

The petitioners, M/s Blue Ice Bar & Restaurant and another, held L-4/L-5 licenses for the years 2016-17 and 2017-18. They filed a writ petition challenging the non-renewal of their licenses for the year 2018-19. The Haryana Excise Policy 2018-19 introduced a condition requiring an average monthly sale of ` 2,00,000/- of non-alcoholic items in restaurants for renewal. The petitioners contended this condition was arbitrary, ultra vires, and applied retrospectively. The State argued that the condition was introduced to curb misuse of licenses, where licensees were selling liquor in bottles instead of pegs, leading to a lack of accompanying sales of non-alcoholic items. The State also presented data showing a sudden, significant increase in the petitioners' non-alcoholic sales in the months preceding the renewal application, suggesting manipulation.

Key Issues

1. Whether clause (h) in para 9.8.3 of the Haryana Excise Policy 2018-19, imposing a condition of average monthly sale of ` 2,00,000/- of non-alcoholic items for renewal of L-4/L-5 licenses, is ultra vires and arbitrary? 2. Whether the condition imposed in the 2018-19 policy is being applied retrospectively to the detriment of the petitioners' vested right of renewal? Petitioner's arguments: The petitioners argued that the new condition was contrary to the facts as their average monthly sale of non-alcoholic items exceeded ` 2,00,000/-. They contended that the condition was ultra vires, as it was added to the policy without notice and was being applied retrospectively to existing licensees. They also claimed the condition was tailor-made to exclude them and create a monopoly. Revenue's arguments: The State argued that L-4/L-5 licenses are for restaurants to operate bars, and the condition was introduced because licensees were misusing their licenses by selling bottles instead of pegs, leading to a decline in non-alcoholic sales. They presented data showing a suspicious spike in the petitioners' non-alcoholic sales just before renewal, indicating manipulation. The State also relied on Rule 13 of the Haryana Liquor License Rules, 1970, stating that renewal of a license is not a matter of right and is subject to fulfilling policy conditions.