UGAR SUGAR WORKS LTD. versus DELHI ADMINIS1RATION AND ORS.

Citation: [2001] 2 S.C.R. 630 · Decided: 22-03-2001 · Supreme Court of India · Bench: A.S. ANAND, R.C. LAHOTI, SHIVARAJ V. PATIL · Disposal: Case Allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
UGAR SUGAR WORKS LTD. 
v. 
-f-
DELHI ADMINIS1RATION AND ORS. 
MARCH 22, 2001 
B 
[DR. A.S. ANAND, C.J., R.C. LAHOTI AND SHIVARAJ V. PATIL, JJ.] 
Constitution of India, 1950 : Article 19( 1 )( g). 
Executive Policy-Excise Year 2000-2001-Minimum Sales Figures laid 
c 
down as a criterion for eligibility for grant of licence-Validity of-Held : 
There is no fundamental right to trade in intoxicants, like liquor-Hence, any 
challenge to the policy decision based upon Art. 19( 1 )( g) is totally out of place 
and merits outright rejection-Hence, executive policy valid. 
Delhi Liquor Licence Rules, 1976: Rule 16. 
.. 
~ 
D 
Executive Policy-Excise Year 2000-2001-Judicial review of-Notifi-
cation laid down Minimum Sales Figures (MSF) and terms and conditions for 
registralion of different brands of Indian Made Foreign Liquor as criteria for 
grant of licence-Validity of-Held: In exercise of its power of judicial review 
court does not ordinarily inteifere with the policy decision of the Executive 
E 
unless the policy is unreasonable, arbitrary or unfair-Laying down of MSF of 
-~ 
a particular brand of liquor is not irrelevant, irralional or unreasor.able-MSF 
~· 
is a mode for determining thal the quality of liquor is good-It is not permis-
sible for the court to prescribe MSF requirements-The executive policy is in 
the interest of health, welfare and morals to the benefit all citizens of the Stale-
F 
Hence, notification valid-Punjab Excise Act, 1914. 
The petitioner-company was engaged in the business of manufacture 
or Indian Made Foreign Liquor (ThfFL). For the Excise Year 2000-2001, 
the respondent issued a notification under the Punjab Excise Act, 1914 and 
Delhi Liquor Licence Rules, 1976 laying down terms, conditions and Mini· 
G 
mum Sales Figures (MSF) for registration or different brands of ThfFL as 
criteria of eligibility for grant or licence. The petitioner had filed the 
present writ petition challenging the aforesaid notification. 
On behalf of the petitioner it was contended that laying down MSF 
.J(-
criterion was arbitrary and discriminatory as against small scale manu· 
H 
facturers and has no nexus with the object or providing liquor or good 
630 
' 
UGAR SUGAR WORKS. LTD. v. DELHI ADMINISTRATION 
631 
quality for consumption and was as such violative of Articles 14, 16 and 
A 
19(1)(g) of the Constitution. 
Dismissing the petition, the Court 
HELD : 1. There is no fundamental right to trade in intoxicants, like 
liquor. In view of this settled position of law, any argument impugning the 
policy decision of the State Government, as reflected in the impugned 
notification, based upon Article 19(1)(g) is totally out of place and merits 
outright rejection. [637-D; 639-F) 
State of UP. v. Mc Dowell & Co., [1996] 3 SCC 709 and Har Shankar v. 
The Dy. Excise and Taxation Commr., [1975) 1 SCC 737, relied on. 
Khoday Distilleries, In Re: [1995) 1 SCC 574, cited. 
2. The challenge, thus, in effect, is to the executive policy regulating 
trade in liquor. It is well settled that the Courts, in exercise of their power 
of judicial review, do not ordinarily interfere with the policy decisions of 
the executive unless the policy can be faulted on grounds of mala fide, 
unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, 
irrationality, perversity and mala fide will render the policy unconstitu-
tional. However, if the policy cannot be faulted on any of these grounds, the 
mere fact that it would hurt business interests of a party, does not justify 
invalidating the policy. In tax and economic regulation cases, there are 
good reasons for judicial restraint, if not judicial deference, to the judg-
ment of the executive. The Courts are not expected to express their opinion 
as to whether at a particular point of time or in a particular situation any 
such policy should have been adopted or not. It is best left to the discretion 
of the State. [ 640-C-E] 
Tamil Nadu Education Depanment Ministerial and General Subordinate, 
Services Association v. State of Tamil Nadu, [1980) 3 SCC 97, referred to. 
laker Ainvays (1997) 2 WLR 234, referred to. 
3.1. State has every right to regulate the supply of liquor within its 
territorial jurisdiction to ensure that what is supplied is 'liquor of good 
quality' in the interest of health, morals and welfare of the people. One of 
the modes for determining that the quality of liquor is 'good' is to ascer-
B 
c 
D 
E 
F 
,G 
tain whether that particular brand 

Excerpt shown. Read the full judgment & AI analysis in Lexace.