Holding

The High Court’s order cancelling all licences was erroneous; licences must be scrutinised individually, necessary parties must be impleaded, and en‑masse cancellation is not justified absent a tainted selection process.

Summary

The State of Chhattisgarh granted excise licences for retail liquor sale under the Chhattisgarh Excise Act, 1915 and the 2002 Rules. After objections were raised, a writ petition was filed before the Chhattisgarh High Court, naming 65 licence‑holders as parties while omitting 126 others. The High Court cancelled all the licences, holding that the selection committees had committed irregularities and that the burden of proof lay on the objectors. On appeal, the Supreme Court held that the High Court erred because the private respondents were not impleaded in a representative capacity, no public notice or leave under Order 1 Rule 8 CPC was obtained, and the selection process was carried out by several district committees, not a single agency, so an en‑masse cancellation was unwarranted. Each licence should be examined individually, the burden of proof remains on the applicant, and the clarificatory notification could have retrospective effect. The Court set aside the cancellation order and directed fresh scrutiny of the applications. The appeal was allowed.

Issues considered

The validity of cancelling all licences without impleading all affected licence‑holders as parties.
Whether the High Court complied with Order 1 Rule 8 of the CPC and gave public notice before entertaining the writ petition.
Whether en‑masse cancellation is permissible where selection was performed by multiple district committees and no gross irregularity is shown.
Who bears the burden of proof in establishing eligibility for licence grant – the applicant or the objector.
The permissibility of retrospective effect of a clarificatory notification omitting the requirement of family members' criminal certificates.
The scope for relaxation of eligibility criteria under the Excise Rules.

Legislation cited

Code of Civil Procedure, 1908s. Order 1 Rule 8
Constitution of Indias. Article 47

Subjects

Excise licenceSelection committeeEn‑masse cancellationPublic healthArticle 47Burden of proofNecessary partiesRetrospective notificationStrict constructionEligibility criteriaChhattisgarh Excise Act

Judgment

A ASHOK LENKA
V.

RISH! DIKSHIT AND ORS.

APRIL 21, 2006

B [S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.)

Chattisgarh Excise Act, 1915--Chattisgarh Excise Seu/ement of licences
for Retail Sale of Country/Foreign Liquor Rules, 2002.

c Rules 9 and 11--District level Selection Commillees undertaking process
ofselection ofpersons to be granted licences--{:;hallenge to grant-Writ petition
making some licensees parties, while leaving out many others-High Court
cancelling entire set of licences-On appeal, held-Jn writ petition private
respondents were not impleaded in representative capacity; no leave in terms
D ofOrder 1, Rule 8 of the Code of Civil Procedure was obtained, and no public
notice was given regarding pendency of petition---ln that view. cancellation of
licences of all private respondents was wrong-Inadequacies offulfillment of
eligibility criteria should have been decided by taking up individual matters-
lt was more so as selection process was undertaken not by one but several
District level Committees, and it was not a case of gross irregularity which
E could lead to cancellation of enitre process-All licensees whose licences had
been cancelled and against whom allegations were made were necessary parties
to writ petition and in their absence it could not be decided.

Interpretation of-As there was no provision for relaxing any condition
F for grant of licence, provisions thereof are to be construed strictly.
Shortcomings of--Act and the Rules found to deal with only control and
regulations-No discretion given to authorities for relaxation of provisions of
Rules-In that behalf, Rules directed to be framed again-Also, processing of
applications for grant of licences found to be unsatisfactory and improvements
G suggested for future.

Constitution of lndia, 1950-Article 47--Grant of licence for selling of
liquor-Rules and policy decisions-Held: Their formulation must be guided
by public interest, strictly conform to public good, and not be otherwise
derogative ofpublic health-Not only eligibility criteria sh.iuld be laid down,
H I~
ASH OK LENKA v. RISH! DIKSHIT 143
but having regard to past experience as to -how and in what manner licensees A
find means and methods to circumvent the provisions, all endeavours should
be made to plug all loopholes-All information supplied by applicants for
licences must undergo and satisfY 'strict scrutiny test '-State should not treat
its right ofparting with its privilege only a means of earning mare and more
revenue.
B
Licences-Grant of-Satisfaction ofeligibility criteria-Burden ofproof-
Held-initially it is on applicants-Wherever objections are raised to grant of
licence, satisfaction was required to be arrived at by competent authority
upon their consideration, but that does not mean that burden was upon objector
to prove same.
c
Pleadings-Rejoinder and sur-rejoinder-No new plea is ordinarily
permitted in a rejoinder without the leave of Court-However, if new facts are
brought on record for first time in it, opposite party is entitled to file a sur-
rejoinder controverting them.
D
Interpretation of s·tarutes-Subordinate legislation or· notification-
Retrospective effect-Ordinarily, it cannot be given-However, if it is
clarificatory, such effect can be given.

Interpretation of statutes-Relaxation of statutory provisions-It can be
granted provided there exists a specific provision therefor-It cannot be.granted E
by exclusion, when th(!re does not exist any provision.

Words and° phrases~Public health-In context of Article 47 of
Constitution of India, I950. ·

Appellants were granted excise Iice·nces by co-appellant, the State. F
Grant of the licences was governed by the Chattisgarh Excise Act, 1915,
whereunder, by a notification dated 15-3-2002, the State Government had
mad Chattisgarh Excise Settlement of Licences for Retail Sale of Counrty/
Foreign Liquor Rules, 2002. However, n_otification dated ?-7-2005, with
retrospective effect, omitted from Rule 9(3)(d) requirement of certificate
regarding criminal antecedents of family members of selected licensee. G
Respondents opposed grant of licences to appellants by filing objections
before District Level Selection Committees. On rejection of their
objections, they filed writ petition before High Court, making sixty five
licensees parties, while leaving out one hundred and twenty six others. In
pleadings, in response to rejoinder of respondents, State filed an additional H
144 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A affidavit also. High Court held that (i) District Level Committees had
committed several irregularities, (ii) the burden of proof to prove that the
applicants for grant of licences did not possess the prescribed eligibility
was wrongly placed on the objectors like respondents, as they were not
supposed to prove the negative facts by producing evidence, (iii) there was
B no conflict between the English and Hindi versions of Rule 9(3)(d), and
English version would prevail over Hindi version, rejection contention of
State that notification dated 5-7-2005 merely corrected error in English
version which was absent in its Hindi version, (iv) a sur-rejoinder to
rejoinder was impermissible without permission of the court, and hence
did not consider it. On the aforementioned premises, the High Court
C allowed the writ petition and cancelled entire set of licences. Hence the
present appeal.

Appellant contended that the High Court having not held the whole
selection process to be bad in law, no situation arose requiring cancellation
of the entire set of licences, it should have identified the cases where
D requirements of law had not been complied with and only in such cases,
the licensees could have been directed to be revoked.

Allowing the appeal, the Court

HELD I. It was not a case where the writ petitioners had impleaded
E the private respondents in their representative capacity. In the writ
proceedings, no leave in terms of Order 1, Rule 8 of the Code of Civil
Procedure or the principles analogous thereto had been obtained. No
public notice had also been given as regard pendency of the said writ
petition. Therefore, the High Court committed an error in directing
F cancellation of licences of all the private respondents of the writ petition.
The inadequacies or otherwise of fulfillment of eligibility criteria or the
violation of the statute should have been decided by taking up individual
matters and upon proper scrutiny of the case. 1164-F; 165-C, DI

2.1. In law it is permissible to cancel the entire selection process if it
G is held that the same is tainted to such an extent that it may not be possible
to separate the innocent from the trainted ones. When selections, however,
are carried out not by one agency but by several ones, the principles of
en masse cancellation may not apply. (163-81

Benny T.D. and Ors. v. Registry of Co-operative Societies and Anr.,
H [1998] 5 SCC 269, Onkar Lal Bajaj and Ors. v. Union of lndia and Anrs.,
ASHOK LENKA v. RISH! DIKSHIT 145
(2003) 2 SCC 673, Union of India and Ors. v. Rajesh P. U. Puthuvalnikathu A
and Anr., (2003) 7 SCC 285, Bihar School Board v. S.C. Sinha, AIR (1970)
SC 1269, Union of India v. Anand Kumar Pandey, (1994) 5 SCC 663,
Hanuman Prasad and Ors. v. Union of India Anr., (1996) 10 SCC 742 and
Union of India and Ors. v. 0. Chakradhar, (2002) 3 SCC 146, relied on.

2.2. Admittedly, several District Level Committees have carried out B
the selection process and in that view of the matter is was obligatory on
the part of the High Court to consider the mode or manner of selection
made by each one of them individually. It was not a case of mass cheating
in an examination or illegality or gross irregularity in the selection process
which would lead to cancellation of the entire selection process. (163-C, DJ C
3.1. The licensees whose licences were necessary parties to the writ
petition. In the absence of any opportunity of hearing given to them, their
right to continue their business has been violated. It is not a case where
·the State, for one reason or the other, did not intend to part with its
exclusive privilege to deal in liquor. It is also not a case where the State D
acted in such an arbitrary manner which would attract the wrath of Article
14 of the Constitution of India. All licensees in relation to whom allegations
had been made, thus, were necessary parties in the writ petition and in
their absence the same could not have been decided. (162-E, F]

3.2. Furthermore, it would be travesty of justice if the parties against E
whom serious allegations were made and are said to have been found had
not been made the parties to the writ petition as by reason "thereof they in
terms of the High Court judgment were not allowed to carry on their
business in terms _of the licences granted in their favour. All such persons
whose licences had been cancelled were, thus, necessary parties. F
(162-G, H; 163-A]

4.1. The writ petitioners have not disclosed as to how each one of
the licensees who had appeared as respondents therein were ineligible or
otherwise disqualified and/or not fulfill the conditions therefor. Had suc_h
opportunities been given, the State as also the said respondents could have G
met the said allegations. Such allegations were made only in the rejoinder.
No new plea ordinarily could have been permitted in the rejoinder without
the leave of the Court. (163-D-E]

4.2. The High Court did not place reliance upon the additional
affidavit filed by the State inter alia on the ground that the same being ·H
146 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A sur-rejoinder could not have been filed. The High Court's attention was
evidently not drawn to the fact that writ petitioners brought on record
new facts for the first time in the rejoinder and, thus, the State was entitled
to file a sur-rejoinder controverting the allegations made therein.
(163-E, Fl

B 5. The contention of the appellant that burden of proof was placed
on the objector may not be entirely correct. The initial burden was on
the applicants themselves for grant of licences to satisfy the members of
the District Level Committees that they fulfil the eligibility and other
criteria. In such matters, the satisfaction was required to be arrived at
C by the competent authority upon considering the objections raised by the
writ petitioners. It did not mean that whenever an objection was raised,
the burden thereof would be upon the objector to prove the same.
(178-A, Bl

Ashok Lenka and Anr. v. Rishi Dixit and Ors., (20051 5 SCC 598, held
D applicable.

6. Ordinarily, a subordinate legislation cannot be given a
retrospective effect. The Notification dated 15-3-2005, however, is said to
be clarificatory in nature. A clarficatory notification can be given
retrospective effect. Such a clarification, according to the State, was
E necessary to be issued as there was an apparent conflict between the Hindi
and the English version of the Notification. It may be true that before the ,..
High Court such a contention has not been raised but the bona fide of the
State in this behalf are not in doubt. In that view of the matter, it was not
necessary for the District Level Committee or the State to verify the
criminal background of the family members of the applicants.
F (179-A, B, CJ

7. The Act and the Rules deal only with control and regulations.
There was no provision which gives any discretion to the authorities
concerned to relax provisions of the Rules. The Rules in this behalf again
must be framed upon taking into consideration all relevant factors. The
G State in making the rules and formulating the policy decisions must be
guided by public interest. In such matters, the State has a positive
obligation to ensure that any activity contemplated, strictly conforms to
the requirements of public good and is not otherwise derogative of public
health. The State parts with its exclusive privilege on certain statutory
H conditions such as payment of excise fee. When it lays down criteria for
ASHOK LENKA v. RISH! DIKSHIT 147
selection of persons who would become qualified for grant of licence under A
the Act, not only the eligibility criteria therefor should be laid down, but
having regard to its past experience as to how and in what manner, the
licensees find means and methods to circumvent the said provisions, all
endeavors should be made to plug all loopholes. The State has extremely
solemn obligation to fulfil in that behalf. All information supplied by the B
applicants for licences, thus, must undergo and satisfy the 'strict scrunity
tesC. The State should not treat its right of parting with its privilege only
a means of earning more and more revenue. It may certainly earn revenue
but only upon fulfilment of its constitutional and statutory obligations.
There exists a strong umJerlying action of public health and welfare when
the matter come~ to retention of the exclusive privilege and/or parting C
therewith either in whole or in part. 1158-F, G, H; 159-A, B]

Consumer Action Group and Anr. v. State of T.N. and Ors., Tata Iron
& Steel Co. Ltd. v. State of Jharkhand and Ors., 12005] 4 SCC 272,
Government of India and Ors. v. Indian Tobacco Association, 120051 7 SCC
396 and Commnr. of Central Excise, Raipur v. Hira Cement, JT (2006) 2 SC D
369, relied on.

Arehano Reddy v. State of A.P., (2005) 6 ALT 6, approved.

R. v. Hughes. (2002) UKPC 12, Bugdaycay v. Secy. of State for Home
Department 11987] r All ER 940, R. v. Secy of State for Home Department,
ex. p. Brind.(1991) l AA ER 720, R. v. Ministry of Defence, ex. p. Smith 119961 E
I All ER 257, referred ti>.

CAD Vol. VII No. 9 pp 496 to 498; Constitutional Law of India, by
HM. Seervai Vol II 4th Ed, p 2012, referred to.

'The Law and the Public Health: A Study of Infections Disease Law in F
the United States, Columbia Law Review, Vol. 99 No. I, January, 1999; Public
Hedlth and Human Rights; American Bar Association Journal on Human
Rights, Fall 1998, Vol. 25 No I; Halsbury's Laws of England, 4th Ed Vol. 26
p5, referred to.

7.i.· Relaxation can be granted by the authorities provided there
G
exists a specific provision therefor, Relaxation cannot be granted by
exclusion, when there does not exist any provision. The provisions of the
Act therefore, deserve strict construction. 1161-H; 162-A, Bl

CIVIL APPEL~ATE JURISDICTION: Civil Appeal No. 2I52 of2006.

From the Judgment and Final Order dated 6.3.2006 of the High Court H
148 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A of Judicature, Chhattisgarh Bilaspur in W.P. No. 2820/2005.
WITH

C.A. No. 2161/06, 2160/06, 2159/06, 2158/06, 2156/06, 2155/06, 2157/
06, 2154/06.
B
Prashant Mishra, Addi. A.G. Mukul Rohtagi, C.A. Sundram, Ranjit
Kumar, Ashok H. Desai, C.S. Vaidyanathan, lndu Malhotra, Abhishek Sinha,
Liz Mathew, Savita Sinha, Vikas l'v;ehta, P.C. Sen, Binu Tamta, Rani Chhabra,
Rajeev Srivastava, Gauri Chhabra, Sudha Pal, Suparna Srivastava, Deepti
Singh, Rajesh Srivastava, Jatin Zaveri, Rohit Singh and Dharmendra Kumar
C Sinha for the Appellant.

Soli J. Sorabjee and Prakash Srivastava for the Respondents.

The Judgment of the Court was delivered by

0 S.B. SINHA, J. Leave granted.

INTRODUCTION

The Appellants are before us in the second round. They, except the
State of Chhattisgarh, were granted excise licences. Grant of such licences
E indisputably is governed by the Chhattisgarh Excise Act, 1915 (for short "the
Act"). On or about 15.3.2002, the State Government under 'the Act' made
rules known as Chhattisgarh Excise Settlement of Licences for Retail Sale of
Country/Foreign Liquor Rules, 2002 (for short "the Rules").

The State issued notices inviting tenders for grant of licences under the
F Rules. Pursuant to or in furtherance of the said notices inviting tenders about
2,64, 703 applications were filed. The grant of licences in favour of the
Appellants in some of the appeals came to be questioned before the
Chhattisgarh High Court. By reason of a judgment dated 31.3.2005, a Division
Bench of the said Court allowed the writ petition and directed cancellation
G of the licences. Appeals thereagainst were filed before this Court. Interim
orders were passed therein as a result whereof licensees continued to carry
on their business. This Court, however, while refraining itself from setting
aside the entire selection process thought it fit to ask the respective District
Level Committees to consider the matter relating to grant of such licences
afresh. Having regard to the actions of the statutory functionaries, the exercises
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 149

as regard scrutiny so as to arrive at a satisfaction that the requirement of the A
Rules vis-a-vis selection process were required to be undertaken by the
Selection Committees. They were directed to do so afresh.

We would advert to the said directions a little later. However, we at this
juncture, may notice that, according to the State, in terms of the directions
of this Court, the District Level Committee under the strict supervision of the B
Chief Secretary as also the Commissioner of Excise went into the said exercise
over again and found that the licensees were not only eligible therefor but
also fulfilled other conditions laid.down in the Rules. It is not in dispute that
the writ petitioners-Respondents, filed objections before the District Level
Committee. The said objections were rejected. Aggrieved by and dissatisfied C
therewith, the writ petitioners-Respondents filed a writ petition before the
Chhattisgarh High Court. The. State in the meanwhile issued a notification
effecting an amendment in Rule 9 of the Rules in terms of a notification
dated 22.3.2005.

PROCEEDINGS BEFORE THE HIGH COURT D

In the writ petition, the following reliefs were prayed for:

"7.1. That, this Hon'ble Court may be pleased to send for the entire
records from the respondents and district committees in regard to the
compliance of the directions of the Hon'ble Supreme Court and E
observance of the statutory rules and all such other relevant and
complete record as are in their possession leading to the affirmation
of the selection of the select candidates.

7.2. The respondents 1 to 12 be directed to satisfy this Hon'ble Court
regarding the compliance of the mandatory directions as given by the F
Hon'ble Apex Court in the case of Ashok Lanka v. Rishi Dikshit.

7.3. That the Hon'ble Court may be pleased to issue a writ in the
nature of mandamus quashing and annulling the entire selection of
respondents 13 to 89 and also quashing the telllporary licences by G
issuing a writ in the nature of certiorari.

That, the Hon 'ble Court may be pleased to issue a writ in the
nature of mandamus commanding the respondents 1 to 12 to make
selection strictly in accordance with law, rules and the directions of
the Hon'ble Supreme Court, afresh.· H
150 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A 7.4. That the contempt' proceedings be initiated against the respondents
2 to l2 for the non-compliance of the order of the Hon'ble Apex
Court."

Before the High Court, the questions raised by the parties inter alia
were:
B
(i) The permanent addresses of the persons in whose favour licences
were granted were not property verified.
(ii) The temporary addresses given by them were wrong and in that
view of the matter scrutiny of their applications could not be
c carried out.
(iii) Provisions of Rule 9(d)(iii) in terms whereof criminal anti.;cedents
not only of the applicants but also of their family members were
required to be verified, had not been complied with. According
to the State, however, there was no necessity to verify the criminal
D background of the family members of the licensees as a mere
error had crept in the English version of the notification which
stood clarified by issuing another notification dated 5.7.2005.

Before the High Court, the parties produced a large number of
documents. It is not in dispute that 191 persons had been granted licences.
E Before the High Court, however, 65 licensees were made parties and 126
were not. The private respondents also filed their counter affidavits contending
that the allegations made in the writ petition were incorrect. Several instances
of alleged irregularities on the part of the District Level Committee in the
matter of proper scrutiny of the contents of the applications filed by the
F licensees had been brought on record. The. State appears to have filed
documents containing approximately 3000 pages in order to show that the
directions of this Court had been complied with, in letter and spirit. In reply
to the said counter affidavit, the writ petitioners filed a rejoinder to which we
shall refer to hereinafter. We may. however, notice that the State in purported
response to the said rejoinder affidavit filed by the writ petitioners filed an
G additional affidavit dealing with the contentions raised therein.

The High Court in its impugned judgment has noticed some of the
purported irregularities committed by the District Level Committees. Several
instances were brought to the notice of the High Court to show as to how and
in what manner the purported irregularities in the matter of selection of the
H licensees had been effected, allegedly as a result whereof the directions
ASHOK LENKA v. RISH! DIKSHIT (SINHA, .I.] 151
contained in this court's decision in As/wk Lanka and Anr. v. Rishi Dixit and A
Ors., (2005] 5 SCC 598 (Ashok Lanka - I) were flouted.

The High Court held:

"Thus, it is quite clear that respondents I to 12 have failed to carry
out the directions issued by the Supreme Court in the ma~ner expected B
of them and in conformity with the mandatory Rules 9 and 11 of the
Rules ... "

The High Court noticed the contents of the additional return filed by
the State oil 23.02.2006 but apparently the contents thereof had not been
taken into consideration on the ground that the same was by way of si.ir- C
rejoinder to the rejoinder filed by the writ petitioners and, as such, such
pleadings are impermissible without permission of the court. It was furthermore
held
. that
'
in the said additional
. -
return, untenable defences were set up. covering
;

up serious lapses committed by Respondent Nos. I to 12.

The High Court thereafter proceeded to cite examples in support of its D
findings. It was noticed that the official respondents wrongly placed the
burden of proof on the objectors like the writ petitioners to prove that the
applicants for grant of licences did not possess the prescribed eligibility, as
the writ petitioners objectors were not supposed to prove the negative facts
by producing evidence. The responsibility cast on the statutory authorities E .......
has, thus, been sought to be placed on the objectors which constituted a
serious flaw in the enquiry vitiating the selection process.

Before the High Court, a chart was produced by the writ petitioners
showing common addresses of a number of licensees. The High Court in
detail noticed the findings of this Court and opined that the State and its F
officers failed to comply therewith and, furthermore, flouted the mandatory
provisions of Rules 9 and 11.

As regards the purported clarification made by the State in respect of
the variation in the Hindi version of Rule 3 and the English version thereof,
it was held: G
(i) The State and its officers were bound by the decisions of this
Court.

(ii) The English version shall prevail over the Hindi version, and
H
152 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A (iii) In any event, there is no conflict between the English version
and the Hindi version.

On the aforementioned premise, holding that licences were illegally
granted to the Respondent Nos. 13 to 89 of the writ petition, it was directed:

B '' ... The respondents 13 to 89 who has the beneficiaries of the illegal
acts of respondent No. I to 12 cannot be allowed to have the continued
benefits of wrong-doing of respondents I to 12 till the term of the
licences comes to an end."

On the aforementioned premise, the writ petitions filed by the contesting
C respondents herein were allowed.

SUBMISSIONS

We have heard a large number of counsel in support of these appeals.
Mr. Ashok Desai, Mr. Sunderam, Mr. Dushyant Dave, Mr. Mukul Rohtagi,
D Mr. C.S. Vaidyanathan and Mr. Ranjit Kumar appearing on behalf of successful
licensees submitted:

(i) The High Court committed a manifest error insofar as it failed
to take into consideration that the compliance of this Court's
order was not carried out with utmost diligence.
E
(ii) Rule 8 does not envisage that a resident of a State other than the
State of Chhattisgarh was not eligible for filing application for
grant of licence and only in some cases temporary addresses had
been given only for the purpose of postal communications.
(iii) As regards compliance of Rules 9 and 11, the age of the candidates
F was verified from documents such as driving licence, election ID
Card, PAN Card, telephone bills, electricity bills, ration cards,
residence certificates issued by competent authorities, birth
certificates, school certificate, etc.
(iv) In cases where more than one document had been submitted, the
G Selection Committee satisfied itself as regards the correctness
thereof from any of the said documents. As, for example, when
a certificate in proof of residence had not been issued by an
authority competent therefor, other documents such as driving
licence, PAN Card, Election ID Card were taken into
H consideration.
AS HOK LENKA v. RISH! DIKSHIT [SINHA, J.] 153
(v) The High Court, in arriving at the conclusion as regards purported A
non-compliance of the rules, failed to notice various documents
and drew inferences which were contrary to the records.

(vi) So far as the alleged non-compliance of Rule 9(c) of the Rules
is concerned, a consolidated list of defaulters along with their
complete addresses was available with all the licensing authorities B
and the same had been relied upon while scrutinizing the various
applications.

(vii) As regards, alleged compliance of Rule 9(d) of the Rules, it was
submitted that the Superintendent of Police of the respective
districts where the applicant was a resident of more than one C
district and one State had issued character certificates.

(viii) In terms of Rule 12, in the case where there had been multiplicity
of applications, a lottery was held which was completely above
board being a computer generated programme operated by a
Central Government organization, viz. National Informatics D
Centre.

(ix) The High Court had wrongly held that certificates were to be
granted only by the Revenue Authorities of Chhattisgarh inasmuch
as nothing in· the excise rules or the decision of this Court
precluded a person who is resident of another State from applying E
for and obtaining a liquor licence.

(x) The requirements of the Rules being that the applicant should be
a citizen of India and above the age of21, the certificates granted,
as also character certificates, issued by the. Superintendents of
Police of their respective Districts met the requirements of the F
Rules.

(xi) Licences of some of the licensees could not have been directed
to be cancelled on the basis of purported irregularities committed
by the District Level Committee in respect of those who were
not parties to the writ petition.
G
(xii) Since many of the applicants were not permanent residents of
the State they had merely given a temporary address along with
the permanent address and only for that reason there had been
overlapping of addresses.

(xiii)The High Court having not held the whole selection process to H
154 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A be bad in law, no situation arose requiring cancellation of the
entire set of licenses. The High Court was required to identify
the cases whose requirements of law had not been complied with
and only in such cases, the licensees could have been directed to
be revoked.

B (xiv) In view of the directions contained in Para 40 of this Court's
judgment in Ashok Lanka - I (supra), the onus of proof, being on
the writ petitioners, the High Court committed a mistake in
holding that the burden of proof had been wrongly thrown on
the objectors.
C (xv) The findings of the High Court as regards purported non-
compliance of the directions of this Court by the State is based
on a wrong premise as for example, in the case of Abhay Singh,
although the High Court proceeded on the basis that he is a fake
person, no objection in this behalf was taken by the writ petitioners
before the District Level Committees.
D
Mr. Srivastava, learned counsel appearing on behalf of the writ
petitioners, however, has drawn our attention to several instances showing
how the age of some of the applicants for grant of licences had been verified
only on the basis of the certificate issued by a doctor or a dental surgeon
which could not be held to be valid proof therefor. In some cases, only
E dwelling certificates had been produced by way of proof of residence which
again could not have been considered to be valid proof having not been
certified by any statutory or public authority. In view of the admitted fact that
several persons have shown the same addresses, fictitious persons might have
been granted licences.
F
STATUTORY PROVISIONS

The Act was enacted to consolidate and amend the Excise Law in the
State of Chhattisgarh. Section 7(e) of the Act provides that the State
Government may, by notification, for the whole or for any specified part of
G the State, delegate to the Chief Revenue Authority or the Excise Commissioner
all or any of its powers under the said Act except the power conferred by
Section 62 to make rules.

Rule 4 provide:; for fonnation of groups of liquor shops; clause (iii)
whereof prohibits an applicant/finn/company from obtaining licences for more
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 155
than two groups of shops. Rule 5 provides for the period of licence which A
would be for an excise year or part thereof.

Rules "6 and 7 of the Rules read as under:

"6. Application fee with application
B
The application fee with the application for licence of groups of
· liquor shops shall be as shown in the table below
.. -.
S.No. Reserve Price of the group Prescribed
application fee
. '•·
c
I. For group of shops of Rs. 5 lakh to I crore Rs. 1,000/-
..
2; ·For group of shops of Rs. I crore to 2 crore Rs. 3,000/-

3. For group of shops of Rs. 2 crore to 8 crore Rs. s,0001-

The amount of application fee will neither be adjustable in licence
fee nor the amount will be refondable in case of not granting the
licence.

7. Issue of licence for liquor shops -
E
The licence.s for liquor shops shall be issued by the licensing
authority on deposit of the security amount and licence fee for the
month of advance by the licensee."

Rule 8 provides for procedure for grant of licence, which reads as
unqer: F
"8. Procedure for grant of licence -

(a) Whenever a new licence is proposed to be granted in an area or
locality, the licensing authority shall invite the applications for this
purpos.e after giving wide publicity through daily newspapers having G
circulation in that area.

(b) A list of shops of country/foreign liquor for which the licensing
authority proposes to grant licence shall be exhibited along with
shopwise licence fee minimum monthwise guaranteed quantity,
security" amount, and annual quantity in office of Collector, Tehsil, H
156 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A District Excise Officer/Assistant Commissioner, Excise and Deputy
Commissioner, Excise (Flying Squad).

(c) Application for grant of licence with application fee shall be
submitted in the prescribed form as appended to these Rules as
Annexure 4.
B
(d) The last date to be fixed for the receipt of application shall not
\le earlier than ten days with effect from the date of publication of the
advertisement in the newspapers."

Rule 9 provides that the applicant shall affirm an affidavit as regards
C the matters specified therein. It reads as under:
"9. Eligibility conditions for applicant-The applicant has to fulfill
the following conditions for obtaining the licence for shop/ group of
shops of Country/foreign liquor.

(a) Should be a citizen of India or a partnership firm whose partners
D are citizen of India. No change in partnership shall be allowed
after settlement of shop(s) groups of shops except with the
permission of the Excise Commissioner.
(b) Shou Id be above 21 years of age.
E (c) Should not be defaulter/ blacklisted or debarred from holding an
excise licence under the provisions of any rules made under the ,.
Act.
(d) Has to submit an affidavit duly verified by public notary as
proof of the following, namely -
F ( 1) That he possessed or has an arrangement for taking on rent
suitable premises in that locality for opening the shops in
accordance with the rules.

(2) That he possess good moral character and have no criminal
background and have not been convicted of any offence
G punishable under the Act or Narcotic Drugs and Psychotropic
Substances Act, 1985 or any other law for the time being in
force or any other cognizable and non-bailable offence.

(3) That in case he is selected as licensee, he will furnish a
certificate issued by Superintendent of Police of the district
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 157
of which he is the resident, showing that he as well as his A
family members possess good moral character and have no
criminal background or criminal record, within thirty days
of grant of licence.

(4) That he shall not employ any salesmen or representative
who has criminal background as mentioned in clause (iii) or B
who suffer from any infectious or contagious disease or is
below 21 years of age or a woman.

(5) That no government dues are outstanding against him."

Rule I0 envisages formation of a district-level committee; whereas C
Rule 11 provides for selection of licensees, clauses (b) and (c) whereof read
thus:

"(b) The said Committee shall select licensees from the list of
applicants. In case more than one applicants are found suitable for
any particular group of shops the Committee shall select the licensee D
for such group of shops by lottery. In case the selected applicant does
not deposit the required amount according to Rule 13 and does not
fulfil the prescribed formalities or is unable to arrange suitable premises
for the shops within stipulated period, the licensing authority shall
cancel the allotment and take steps for resettlement of the shops/
group of shops. E
( c) In case there is no application for a particular group of shops or
no applicant is found suitable for a group of shops the licensing
authority shall take immediate steps· for resettlement as per procedure
laid down in Rule 8."
F
Rule 12 reads as under:

"12. Statement of settled shops-A statement of the settled shops
alongwith names and address of the licensees, shop wise annual
quantity, details of security amount and licence fee deposited shall be G
sent by the District Excise Officer/ Assistant Commissioner Excise to
the Excise Commissioner within 15 days of the settlement."

Rule 13 provides for payment oflicence fee and security amount, which
reads as under:

"13. Payment oflicence fee and security amount.-In case an applicant H
158 SUPREME COURT REPORTS 120061 SUPP. I S.C.R.

A is selected as licensee, he shall deposit one month's amount of licence
fee and the security amount within three days of being informed of
his selection. If he fails to deposit the amount of one-month licence
fee and security amount within prescribed period, his selection shall
stand cancelled and the said licensee shal I be debarred from holding
any excise licence in future, anywhere in the State and his application
B fee shall also stand forfeited. A consolidated list of such defaulters
under this rule, along with their complete addresses shall be forwarded
by the District Excise Officer/Assistant Commissioner to the Excise
Commissioner, who will circulate the consolidated list of the State to
all the licensing authorities of the State."
c
CONSTITUTIONAL SCHEME

When a law is made, having regard to the phraseology used in Part IV
of the Constitution of India, it is expected that law made or actions taken
would be in furtherance thereof. In terms of the Directive Principles of State
D Policy, the State is bound to make endeavours to promote public health
which is one of its primary duties of the State. One important component of
the said directions was regulation and control over the trade in intoxicating
drinks so as to enable the State to curb or minimize, as far as possible, the
consumption thereof. The State may or may not prohibit manufacture, sale or
consumption of liquor but it is vital that while parting with its exclusive
E privilege to deal with intoxicating liquor, the provisions of the Act and the
Rules for which the same had been enacted must be strictly complied with.

The Act and the Rules deal only with control and regulations. There
was no provision which gives any discretion to the authorities concerned to
F relax the provisions of the Rules. The Rules in this behalf again must be
framed upon taking into consideration of all relevant factors. The State in
making the rules and formuiating the policy decisions must be guided by
public interest. In such matters, the State has a positive obligation to ensure
that any activity contemplated, strictly conforms to the requirements of public
good and is not otherwise derogative of public health. The State parts with
G its exclusive privilege on certain statutory conditions such as payment of
excise fee. When it lays down criteria for selection of persons who would
become qualified for grant of licence under the Act, not only the> eligibility
criteria therefor should be laid down, but having regard to its past experience
as to how and in what manner, the licensees find means and methods to
H circumvent the said provisions, all endeavours should be made to plug all
ASHOK LENKA v. RISHI DIKSHIT [SINHA, J.] 159
loopholes. The State has an extremely solemn obligation to fulfil in that A
behalf. All information supplied by the applicants for licences, thus, must
undergo and satisfy the 'strict scrutiny test'. The State should not treat its
right of parting with its privile$e only as a means of earning more and more
revenue. It may certainly earn revenue but only upon fulfillment of .its
constitutional and statutory obligations. There exists a strong underlying notion B
of public health and welfare when the matter comes to retention of the
exclusive privilege and/ or parting therewith either in whole or in part.

Inception of Article 47

Article 47 of the Constitution of India reads as under:
c
"The State shall regard the raising of the level of nutrition and the
standard of living of its people and the improvement of public health
as among its primary duties and, in particular, the State shall endeavour
to bring about prohibition of the consumption except for medicinal
purposes of intoxicating drinks and of drugs which are injurious to .D
health."

The importance of Article 47 of the Constitution of India may have to
be noticed tracing the history back from the date of constitutional debate.
With a view to find out the intent and purport for which the said provision
was inserted, Shri H.M. Seervai in his treatise, Constitutional Law of India, E
VoLII, 4th Ed. p.2012 noticed that all sections of the society including.the
Mohammadan community, whose social habits were reinforced by the Koranic
injunction in relation to intoxicating liquor, supported the insertion of such
a provision. The learned Author stated:

"The prohibition of intoxicating liquor had long been a part of the F
policy of the Indian National Congress; and its inclusion in Art. 47
received support fr.om the Mohammedan community .whose social
habits were reinforced by the Koranic injunction against intoxicating
liquor. In considering the directive in Art. 47, it may be observed that
alcohol (the intoxicating ingredient of liquor) is a "narcotic", a word G
replaced by the word "depressant" to describe the same effects contrary
to the popular belief that it is a sti.mulant. It is not mere accident that
intoxicating liquor and dangerous drugs have been clubbed together
in entry 8, List IL"

Article 47 has a unique feature in the sense that the first part refers to :H
160 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A public health, whereas the second part specifically refers to prohibition of
liquor. Similar provisions are found in the Constitution of U.S. and Lithuania
as well. It is of some significance to note that Section 70 was inserted in the
draft Constitution after the first part was suggested by Shri B.N. Rau derived
from the recommendations of the U.N. Conference on Food and Agriculture,
1943 as several members, including Seth Govind Das and Shri Bishwanath
B Das specifically wanted that prohibition should find specific mention at a
suitable place in the Constitution. One of the members, Kazi Sayed Karimuddin
expressed his desire that such a provision should be included in a separate
Article having regard to the preachings of Mahatma Gandhi and also having
regard to the fact that the same has been approved by all communities. In
C Article 47, however, only liquor was specifically mentioned at the instance
of Shri Bishwanath Das who opined that if prohibition of liquor is to be
included in a separate Article, other harmful articles like opium, tobacco and
like products should also find mention in Article 47. (See CAD Vol. VII
No.9, pp. 496 to 498.)

D Regulation of liquor vis-a-vis Public Health

Having noticed the parliamentary debate, we may also notice the
importance of regulation of liquor vis-a-vis public health.

In common parlance, public health tends to refer only to aspects of
E medical care and prevention of disease. However, a true interpretation of the
term 'public health' will include not only this traditional notion but several
other aspects that promote healthy living.

Public health refers to both a goal for the health of a population and to
professional practices aimed at its attainment. In both senses, the term tends
F to be broadly defined. The Constitution of the WHO defines the goal as a
state of complete physical, mental and social well-being and not merely the
absence of disease or infirmity. The Institute of Medicine defines it as the
fulfillment of society's interest in assuring the conditions in which people
can be healthy. Public health, as the practice that pursues the goal of a
G healthy population, also has a broad definition, including the development of
the social machinery, which will ensure to every individual in the community
a standard of living adequate for the maintenance of health. [See Lawrence
0. Gosten, Scott Burris and Zita Lazzarini, The Law and the Public's Health:
A Study ofinfectious Disease Law in the United States, Columbia Law Review,
Vol 99 No. l, January 1999, pp. 61 and 69]
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 161

The relationships among medicine, public health, ethics and human A
rights are now evolving rapidly, in response to a series of events, experiences
and struggles. In general people equate medical care with health, but the vast
majority of research into the health of populations identifies so called 'societal
factors' as the major determinants of health status. Public health, although
starting as a social movement, has at least in recent years, responded relatively B
little to this profound knowledge about the dominant impact of society on
health, such as behaviour like excess alcohol. Given that the major determinants
are societal in nature, it seems evident that only a framework that expresses
fundamental values in societal terms, and a vocabulary of values that links
directly with societal structure and function, can be useful to the work of
public health. [See Jonathan M. Mann, Public Health and Human Rights, C
American Bar Association Journal on Human Rights, Fall 1998, Vol. 25
No. i, pp. 2, 3 and 4.]

Grant of licence as a measure of control of intoxicating liquor is an
age-old phenomenon. Even in England several statutes have been enacted
therefor including the current one which was enacted in 2003. (See Halsbury 's D
Laws of England, 4th Ed. Volume 26 p.5.)

Regulation of liquor under the Act

The Chhattisgarh Act provides for a unified regulation of sale and
supply of alcohol. It seeks to promote fundamental licenCing objectives. It E
enjoins several duties upon the licensing authorities, namely, (i) prevention
of crime and disorder, (ii) public safety; (iii) prevention of public nuisance;
and (iv) the protection of children from harm.

In view of Article 47 of the Constitution, indisputably, public health in
society plays a vital role. By the said expression, the makers of the Constitution
F
refer both to the goal of health of the pttblic and the attending promotion of
healthy practices.

Prohibition of liquor was, thus, inserted as part of public health .. Strict
control was contemplated and it was made necessary. This in tum would G
require that while granting licence the statutory committees and other
authorities must resort to strict scrutiny of the applications. For the purpose
of grant of licence, the law as contained in the rules, do not contain any
provision for relaxing any condition. The legislative policy, therefore, was
not to grant any relaxation therein. Relaxation, it is trite, can be granted by
the authorities provided there exists a specific provision therefor. Relaxation H
162 SUPREME COURT REPORTS (2006] SUPP. I S.C.R.

A cannot be granted by exclusion, when there does not exist any provision.
This aspect of the matter has recently been considered by this Court wherein
it was held that if an exemption notification is to be issued, the same must
be done within the four-corners of the legislative policy. (See Consumer
Ac/ion CJroup and Anr. v. State of T.N. and Ors, Tata Iron & Steel Co. Ltd.
B v. State of Jharkhand and Ors., (2005] 4 sec 272, CJovernment of India and
Ors. v. Indian Tobacco Association, [2005] 7 SCC 396 and Commnr. of
Cenlral Excise. Raipur v. Hira Cemenl, JT (2006) 2 SC 369].

The provisions of the Act therefore deserve strict construction. We may
in passing notice that whereas in cases of suspect legislation or where the
C statute ex facie is arbitrary requiring the burden of proof of the State to be
shifted, the strict scrutiny test would apply whereas in a case where the
provision is not so arbitrary, intermediate construction, the doctrine of
proportionality would apply. [See R. v. Hughes, (2002) UKPC 12: 12 BHRC
243 (P.C.)]

We may also notice that the English Courts while departing from the
D Wednesbury principle developed the 'anxious scrutiny' test which was later
modified by the Court of Appeal into the strict scrutiny test. (See Bugdaycay
v. Secy of State.for Hume Deparlment, [ 1987) I All ER 940 at 952, R. v. Secy
of Stale for Home Deparlmenl, ex. p. Brind, ( 1991) I AA ER 720, R. v.
Ministry of Defence, exp Smilh, [ 1996] I All ER 257 and B. Archuna Reddy
E v. Slate of AP, (2005) 6 ALT 6).

NECESSARY PARTIES

The licensees whose licences were directed to be cancelled were
necessary parties to the writ petition. In the absence of any opportunity of
F hearing given to them, their right to continue their businesses has been violated.
It is not a case where the State, for one reason or the other, did not intend
to part with its exclusive privilege to deal in liquor. It is also not a case where
the State has acted in such an arbitrary manner which would attract the wrath
of Article 14 of the Constitution of India. All the licensees in relation to
whom allegations had been made, thus, were necessary parties in the writ
G petition and in their absence the same could not have been decided.

Furthermore, it would be a travesty of justice if the parties against
whom serious allegations were made and are said to have been found had not
been made the parties to the writ petition as by reason thereof they in terms
of the High Court judgment were not allowed to carry on their businesses in
H terms of the licences granted in their favour.
ASH OK LENKA v. RISH! DI KS HIT [SINHA, J.) 163
All such persons whose licences had been cancelled were, thus, necessary A
parties.

EN-MASSE CANCELLATION-PRINCIPLES OF

In law it is permissible to cancel the entire selection process if it is held
·that the same is tainted to such an extent that it may not be possible to ·B
separate the innocent from the tainted ones. As, for example, in a case of
mass cheating adopted by the students in a Board Examination, it may be
permissible to cancel the entire examination. When selections, however, are
carried outi1ot by orie agency but by several ones, the principle of en masse
cancellati0i1 may not apply. In this case, admittedly, several District Level C
Committees have carried out the selection process and in that view of the
matter it was obligatory on the part of the High Court to consider the mode
of manner of selection made by each one of them individually. It was not a
case of mass cheating in an examination or an illegality or gross irregularity
in the sel~ction process which would lead to cancellation of the entire selection
process. D
In the writ petition, the writ petitioners have not disclosed as to how
each one of the licensees who had appeared as respondents therein were
ineligible or otherwise disqualified and/ or did not fulfil the conditions therefor.
Had such opportunities been given, the State as also the said respondents
could have met the said allegations. Such allegations were made only in the E
rejoinder. No new plea ordinarily could have been permitted in the rejoinder
without the leave of the court. We would not have commented upon this as
the High Court does not appear to have placed reliance upon the additional
affidavit filed by the State inter alia on the ground that the same being a sur-
rejoinder could not have been filed. The High Court's attention was evidently F
not drawn to the fact that writ petitioners brought on record new facts for the
first time in the rejoinder and, thus, the State was entitled to file a sur-
rejoinder controverting t_he allegations made therein.

In Benny TD. and Ors. v. Registrar of Cooperative Societies and Anr.,
[1998] 5 sec 269, this Court repelled a contention raised therein that in view G
of the findings of the Public Inquiry Commission that there has been tampering
of marks in respect of several candidates and as such there has been no fair
and objective selection, public interest demanded annulment of the entire
selection: This Court held that the same could not be done as the same would
tantamount to gross violation of principles of natural justice which cannot be H
164 SUPREME COl TRT REPORTS (20061 SUPP. I S.C.R.

A brushed aside on the ground that public interest demands annulment of the
selection.

Yet again in Onkar Lal Bajaj and Ors. v. Union of India and Anr.,
(2003] 2 SCC 673, this Court while dealing with a case of en masse
cancellation of the licences granted to the LPG Distributors as a result whereof
B unequals were said to have been clubbed by reason of arbitrary exercise of
executive pow..:r, the same was held to be impermissible stating:

"The solution by resorting to cancellation of all was worse than the
problem. Cure was worse than the disease. Equal treatment to unequals
is nothing but inequality. To put both the categories-tainted and the
c rest---0n a par is wholly unjustified, arbitrary, unconstitutional being
violative of Article 14 of the Constitution .... "

It was further held:

"The aforesaid observations would apply with equal if not more force
D to DSBs if media exposure that the allotments were made either to
the high political functionaries themselves or their near and dear ones
is correct, the authorities would not only be justified in examining
such cases but it would be their duty to do so. Instead of fulfilling
that duty and obligation, the executive cannot unjustly resort to
cancellation of all the allotments en masse by treating unequals as
E
equals without even prima facie examining any cases exposed by the
media .... "

It was also not a case where the writ petitioners had impleaded the
private respondents in their representative capacity. In the writ proceedings,
F no leave in terms of Order I, Rule 8 of the Code of Civil Procedure or the
principles analogous thereto had been obtained. No public notice had also
been given as regard pendency of the said writ petition.

In Union of India and Ors. v. Rajesh P. U., Puthuvalnikathu and Anr.,
(2003] 7 SCC 285], this Court observed:
G
" ... Applying a unilaterally rigid and arbitrary standard to cancel the
entirety of the selections despite the firm and positive information
that except 31 of such selected candidates, no infirmity could be
found with reference to others, is nothing but total disregard of
relevancies and allowing to be carried away by irrelevancies, giving
H
ASH OK LENKA v. RISH! DIKSHIT [SINHA, J.] 165
a complete go-by to contextual considerations throwing to the winds A
the principle of proportionality in going farther than what was strictly
and reasonably to meet the situation. In short, the competent authority
completely misdirected itself in taking such an extreme and
unreasonable decision of cancelling the entire selections, wholly
unwarranted and unnecessary even on the factual situation found too, B
and totally in excess of the nature and gravity of what was at stake,
thereby virtually rendering such decision to be irrational."

We are, therefore, of the opinion that the High Court committed an
error in directing cancellation of licences of all the private respondents of the
writ petition without arriving at a finding as to how and in what manner C
licence granted to each one of them was either in violation of the provisions
of the statute or the directions of this Court.

To put it shortly, the inadequacies or otherwise of fulfillment of eligibility
criteria or the violation of the statute should have been decided by taking up
individual matters and upon proper scrutiny of the case. To the aforementioned D
extent, the judgment of the High Court cannot be sustained.

It was also not a case wherein en masse cancellation was warranted as
enunciated in Bihar School Examination Board v. S. C. Sinha, AIR (1970) SC
1269, Union of India v. Anand Kumar Pandey, (1994] 5 SCC 663, Hanuman
Prasad and Ors. v. Union of India and Anr., (1996] IO SCC 742 and Union E
of India and Ors. v. 0. Chakradhar, (2002] 3 SCC 146.

ASHOK LENKA - I

Analysing the provisions of the Act and the Rules, this Court opined
that the Rules contemplated strict compliance of the Rules as also the terms F
and conditions of the licences. Eligibility clause contained in the advertisement
was, therefore, required to be considered applying a rigorous standard.
Emphasising the necessity to verify the requisite documents by the District
Level Committees and the mode and manner in which the selection processes
were to be adverted to in terms of Rule I I of the Rules, it was held that the G
Scrutiny Committee was entrusted with the duties to oversee as to whether
the conditions have been complied with or not. The expression "has to submit
an affidavit" contained in Rule 9 ex facie was found to be mandatory in
nature. It was opined:
"Furthermore, filing of an affidavit in the prescribed format is a H
166 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A statutory requirement under the Rules. Filing of such an affidavit is
necessary as in the event the same on verification is found to be
incorrect, not only the deponent can be proceeded against but his
licence would also be liable to be cancelled. Filing of an affidavit
under the Rules is, therefore, mandatory in character."

B This Court noticed from the chan filed on behalf of the writ petitioners
that different persons belonging to different communities had filed different
applications showing the same addresses and even the persons with sami::
names have filed more than one application. It was held:

" ... The authorities of the State cannot raise a plea that they would not
c even notice the inherent defects contained in the application. They
could not proceed on a presupposition, for which there is no legal
sanction, that contents of the affidavit would be correct. No summary
report required to be prepared by the Member-Secretary for its
placement before the Committee appears to have not been prepared.
The Rules postulate that each and every application must be examined
D carefully. Mere fact that a large number of applications have been
filed, as a result whereof the State had been able to obtain crores and
crores of rupees by itself did not entitle the State to dispense with the
statutory requirements. The application fees were not meant to be
utilised for the purpose of earning revenue but to meet the
E administrative charges required therefor. Application fee cannot be
equated with tax."
In the aforementioned situation, it was directed:

"Keeping in view the peculiar facts and circumstances of this case,
we intend to issue the following directions:
F
(i) The Member-Secretary shall scrutinise all the applications of the
successful candidates afresh and prepare a summary report within
one week from date.
(ii) Irrespective of the format prescribed by the Commissioner of
Excise, each of the selected candidates must file an appropriate
G
affidavit, which would be in strict compliance with the requirement
of Rule 9.
(iii) Such affidavits must be filed before the respective Committees
within one week from date, the contents whereof would be verified
in terms of Order 6 Rule 15 of the Civil Procedure Code. The said
H
ASHOK LENKA v. RISHI DIKSHIT [SINHA, J.] 167
affidavits shall be scrutinised by the Committee so as to enable them A
to arrive at a finding as to whether the applicants fulfil the eligibility
criteria and are otherwise suitable for grant of licence under the Act
and the Rules.
(iv) The writ petitioners or any other person in the locality may file
appropriate applications before the said Committee with a view to B
show that the selected candidates do not fulfil the eligibility criteria
or are debarred or are otherwise unsuitable for obtaining a licence
under the Act.
(v) Such objections may also be filed within two weeks from date.
The Committee may consider the said objections and, if necessary, C
may call for further or better particulars from the selected candidates
so as to satisfy themselves about their eligibility; etc.
(vi) The respective district-level committees shall strictly verify and
scrutinise the affidavits as also other documents furnished by the said
applicants so as to arrive at a decision that the statutory requirements
have been complied with upon application of their mind.
(vii) The members of the Committee are made personally liable to
see that all statutory requirements are complied with. They would
.strictly apply the statutory provisions as regards eligibility and
suitability of the candidates.
(viii) The aforementioned exercise by the Committee should be . E
completed within one month. In the event, any affidavit filed by a
selected candidate either pursuant to this order or filed earlier in the
format prescribed by the Commissioner of Excise is found to be
incorrect, strict action in accordance with law shall be taken against
him. F
(ix) The Superintendent of Police of each district within whose
jurisdiction the selected candidates ordinarily reside shall verify the
antecedents and other relevant particulars of the selected candidates
vis-a-vis their eligibility/suitability to obtain a licence and submit a
report to the Committee by 12-6-2005 which would be strictly in G
terms of sub-rule (3) of Rule 9. While issuing such a certificate in
favour of the selected candidates by 12-6-2005, he shall also file a
copy of the report before the Committee.

(x) We direct the Chief Secretary of the State and the Commissioner
of Excise to act strictly in accordance with law and oversee the H
168 SUPREME COURT REPORTS [2006[ SUPP. I S.C.R.

A functioning of the Scrutiny Committees.

(xi) If the State and the Commissioner of Excise come across
misconduct on the part of any of the officers including the members
of the Committee, strict action must be taken against the officer
concerm:d.
B
(xii) The selected candidates in the meanwhile may carry on the trade
in liquor pursuant to the licence granted in their favour but the same
shall be subject to this order as also the decision of the Scrutiny
Committee."

C WERE THE DIRECTIONS COMPl!ED WITH?
We may notice in the following chart some of the cases, by way of
sample as to the mode and manner in which the Committees dealt with the
applications in respect of the private respondents both who were parties and
D who were not parties:
Private Respondents who were parties
s No. and nam~ of Directio:i No. 6 Direction No. 9 Direction No. I(
No. respondent
Details of records Photocopy of Details of the
received in regard the report supervision
E to examination of submitted by conducted by
the affidavit and the Supdt. of the Chief
page No. Police Secretary and
regarding Excise
character Commissioner
verification
l 2 8 II 12
F
I. Shri Amit Singhal, I. Domicile Certificate, Enclosed Directions
Ganjpara, 2. Higher Sec. 35-36 issued for time
Respondent No. 3 Certificate, bound
3. Telephone llill 32-34 proceedings on
14.05.2005,
meeting held by
G the Excise
Commissioner
on 16.05.2005.
Video
Conferencing
held by the
Chief Secretary
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA,J.] 169
on Lo.U).LUU), A
letter issued to
the Suptd. of
Police by Chief
Secretary,
Chhattisgarh on
26.05.2005,
letter issued to
the General
B
Director, Pol ice,
Chhattisgarh by
Chief Secretary
on 07 .06.2005
Page No. 37 to
130
c
45. Shri Vikram I. Dwelling Certificate, Enclosed As above
Vishwal, Sarsiva, 2. Age Certificate by 1393
respondents No. Doctor
61 and 80. 1391-1392

47. Shri Manish I. Dwelling Certificate, Enclosed As above D
Upadhyaya, 2. Voter List, 3. Rent 1442-1445
Bhanwarpur Deed, 4. PAN Card, Age
Respondent No. 66 Certificate, 1433-1441

65. Shri Pawan Singh, I. Dwelling Certificate, Enclosed As above
Fingeshwar, 2. Age Certificate by 1992
Respondent No. 88 Doctor
E
1990-1991

Private Respondents who were not parties

s. No. and name of Direction No. 6 Direction No. 9 Direction No.
No. respondent 10 F
Details of records Photocopy of Details of the
received in regard to the report supervision
examination of the submitted by conducted by
affidavit and page No. the Supdt. of the Chief
Police Secretary and
regarding Excise
character Commissioner
G
verification

I 2 8 11 12
I. Rameshwar Prasad I. Age Certificate by Enclosed 9 Directions
Dhimar, Doctor, 2. Family Card iss~ed for time
Tikarapara, 6-8 bound
H
170 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A IUruup, Ka1pur proceedmgs on
14.05.2005.
meeting held by
the Excise
Commissiom:r
on 16.05.2005.
Video
Conforencing
B held by the
Chief Semtary
on 26.05.2005,
letter issued to
the Suptd. of
Police by Chief
Secretary.
c Chhattisgarh on
26.05.2005,
letter issued to
the General
Director. Police,
Chhattisgarh by
Chief Secretary
D on 07.06.2005
Page '.'lo. I 0 tu
103

. 19. Maheshbar Dass. I. Domicile Certificate . Enclosed As above
Basna Group. 2. Rent Deed, 3. PAN 284-287
Mahasamund Card. 4. Age Certificate
278-283
E
36. Ajay Singh I. Inquiry Report of the Enclosed As above
C'hoteekoni group, Committee constituted 625-628
Bilaspur by Revenue Officials
2. Rent Deed
3. PAN Number
F 608-624

125. Pintu Singh. I. Bank Pass Book, Enclosed As above
C'handerpur group, 2. Medical Certificate. 2111-2117
Janjgir 3. Domicile Certificate
2106-2110

G
A tabular statement has also been placed before us indicating how each
of the directions issued by this Court in para 90 are said to have been complied
with, which is as under:

H
ASH OK LENKA v. RISHI DIKSHIT [SINHA, J.] 171
"Sri. DIRECTION COMPLIANCE
No.
A
i The Member-Secretary shall • On 16.05.200,5 the Excise
scrutinise all the applications Commissioner convened a
of the. successful candidates meeting of all. the Assistant
afresh and prepare a summary Commissioner Excise and
report within one week from District Excise Officers for B
date. instructing them to comply
with the Order passed by the
Hon'ble Supreme Court within
the prescribed time. Jn this
meeting the officers were also · C
appraised as to how the
scrutiny is to be conducted, the .
affidavits are to be obtained
and the eligibility criteria have
to be checked and further as to
how the objections are to be D
dealt with.
• The Member - Secretary, who
is the District Excise Officer
scrutinized all the applications
of the successful candidates
E
afresh and prepared a summary .
report within one week ..
.
ii Irrespective of the format Each of the selected candidates
prescribed by the filed appropriate affidavits, in
Commissioner of Excise, each strict compliance of the
of the selected candidates must requirement of Rule 9.
F
file an appropriate affidavit,
which would be in strict
) compliance with
requirement of Rule 9.
the

iii Such affidavits must be filed It is submitted that the Scrutiny G
before the respective Committees have scrutinized
Committees within one week the Affidavits submitted by the
from date, the contents successful candidates, the
whereof would be verified in contents of which were verified
terms of Order 6 Rule 15 of in terms of Order 6 Rule 15. It
(continued) H
172 SUPREME COURT REPORTS {2006J SUPP. I S.C.R.

A the Civil Procedure Code. The 1s subm 1tted that the Scrutiny
said affidavits shall be Committee consisting of ~he
scrutinised by the Committee District Collector, Assistant
so as to enable them to arrive Commissioner, Excise and the
at a finding as to whether the District Excise Officer have
applicants fulfill the eligibility personally interviewed each of
B criteria and are otherwise the successful Applicants
suitable for grant of licence before the Licenses were
under the Act and the Rules. confirmed.

iv The writ petitioners or any • Respondents merely sought to
other person in the locality raise general and omnibus
c may file appropriate objections that the addresses
applications before the said of some of the other successful
Committee with a view to candidates seem to be
show that the selected incomplete or duplicated.
candidates do not fulfil the
D eligibility criteria or are
debarred or are otherwise
unsuitable for obtaining a
licence under the Act.

v Such objections may also be •
-
The objectors were given an
E filed within two weeks from opportunity for making
date. The Committee may representations before the
consider the said objections Committee.
and, if necessary, may call for
further or better particulars • The Committee decided the
from the selected candidates so objections raised by the
F objectors after considering the
as to satisfy themselves about
their eligibility, etc. objections with the documents
that had been submitted by the
successful Applicants.

• However, the objectors did not
G point out a single instance
where Applicant was ineligible
as not fulfilling the eligibility
criteria as prescribed in Rule
9 of the Excise Rules.
H (continued)
ASH OK LENKA v. RISH! DIKSHIT [SINHA, J.] 173
vi · The respective district-level • The District Level Committees A
committees shall strictly verify strictly verified and scrutinized
and scrutinise the affidavits as the affidavits and supporting
also other documents documents furnished by the
furnished by the said said applicants so as to arrive
applicants so as to arrive at a at a decision that the statutory B
decision that the statutory requirements have been
requirements have been complied.
complied with upon
application of their mind. • The Committee also personally
interviewed each of the
successful Applicants before C
the Licenses were con firmed.
vii The. members of the
Committee are made
personally liable to see that all
statutory requirements are
complied with. They would D
strictly apply the statutory
provisions as regards
eligibility and suitability of the
candidates.
•-. viii The aforementioned exercise • The Scrutiny Committees E
by the Committee should be completed the exercise within
completed within one month. one month.
In the event, any affidavit filed
by a selected candidate either
pursuant to this order or filed F
earlier in the format prescribed
by the Commissioner of
Excise is found to be incorrect,
strict action in accordance with
law shall be taken against him.
G
ix The Superintendent of Police • That immediately after the
of each district within whose passing of the Order dated
jurisdiction the selected 11.05.2005, by letter dated
candidates ordinarily reside 16.05.2005, the Excise

... (continued) H
174 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A shall verity the antecedents Comm 1sswner reque~ted
and other relevant particulars Director General of Police
of the selected candidates vis- Chhattisgarh to submit
a-vis their eligibility/suitability character verification report of
to obtain a licence and submit successful applicants within
a report to the Committee by the time allowed by the
B 12-6-2005 which would be Hon 'ble Supreme Court i.e. by
strictly in terms of sub-rule (3) 12th June, 2005.
of Ruic 9. While issuing such
• By letter dated 26.05.2005 the
a certificate in favour of the
Excise Commissioner
selected candidates by
requested the Superintendent
c 12-6-2005, he shall also file a
of Police of the concerned
copy of the report before the
District of other States in such
Committee.
cases where the successful
applicants have shown their
pennanent resident, to verify
D the antecedents of such
candidates. It is submitted that
report from Superintendent of
Police of concerned districts of
other States were also received
in the concerned Excise Office
E of the concerned district.
• It is submitted that all the
character verification reports
were received in the office of
District Level Committee by
F 12th June, 2005.
x We direct the Chief Secretary • The Chief Secretary,
of the State and the Government of Chhattisgarh
Commissioner of Excise to act convened several meeting with
strictly in accordance with law Collectors/ Assistant
and oversee the functioning of Commissioner Excise/District
G
the Scrutiny Committees. Excise Officers through Video
Conferencing a11d took stock •
of stage of compliance of the
Order passed by the Hon'ble
Supreme Court."
H
.
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 175
Before we advert to the rival contentions of the parties, we may also A
notice the following chart showing licence holders against whom findings
have been recorded in the impugned judgment and subsequently the licences
were cancelled:
NAME OF REASONS FOR ADDRESS I ADDRESS II AGE/CERTIFIED
PARTIES CANCELLATION BY
B
Satyendra (i) Discrepancies in In character In letter by 47 ye_ars- certifiec
Singh certificates with certificate by SP, Bilaspur- by private
respect to police Village Mali, practitioner Dr.
addresses; authrority- Police Station H.S. Hura
(ii) Age certified by Vialleg Nabinagar,
private practitioner Karhara, Post Aurangabad.
Jaipur, Pol ice
Station Mali,
c
District
Aurangabad
Abhay (i) Certificate issues - - 27 years- certifiec
Singh by Tahsildar does by private
,
not bear revenue practitioner Dr.
case number or seal H.S. Hura D
of office of
Tahsildar;
(ii) Age certified by
private practitioner.
Arv ind (i) Residential Certificate Certificate Certificate by Dr.
Singh certificate issued by suggesting suggesting N.L. Upadhyay, a
the Sarpanch does that he is a that he is dental surgeon.
E
not mention the resident of residing at
revenue case Bath a. Baya Kasdol,
number or the District Raipur
authority of the
Sarpanch to issue
the Certificate; .
(ii) Age certified by F
a dental surgeon;
(iii) Discrepancies in
addresses.
1
'
Anil Pal (i) Discrepancies in Certificate Police
addresses. indicating him verification
to be a .report suggests
G
resident of that he is a
village Jhapla, resident of
P.O. Jhapla, village
district Bankat;
.
.
Palamou Police Station
(Jharkhand) Husainabad,
district
(contmued) I-I
176 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A Palamou
(Jharkhand)
Pradeep (i) He is not an - - ---

Gupta independent person:
(ii) His financial
condition indicates
that he could not
B undertake the
financial burden of
Iiquor trade.
Anil Kumar (i) Not residing - - --
Gupta within the territorial
jurisdiction of the

c police station
issuing the
certificate.

From the aforementioned chart, it would appear that although various
instances have been cited in respect of the persons against whom findings
have been recorded in the impugned judgment, their licences remained valid
D whereas licences have been directed to be annulled in respect of Satyendra
Singh, Abhay Singh, Arvind Singh, Anil Pal, Pradeep Gupta and Anil Kumar
Gupta. We have hereinbefore dealt with the consequences of not impleading
some successful licensees in the writ petition.

E SOME INDIVIDUAL CASES
Before us, various instances had been shown as to how the provisions
of the mandatory rules have been flouted in the selection process. The
eligibility of the candidates was also questioned.

Rule 9 provides for affirmation of an affidavit by the applicant
F categorically stating that in the event he is selected, he shall furnish the
information specified therein within 30 days from the date of grant of licence
including a certificate issued by the Superintendent of Police of the district
of which he is the resident.

G The learned counsel for the Appellant has placed before us a chart, as
noticed hereinbefore, showing the mode and manner in which the directions
of this Court had been purportedly complied with. From the said chart, it
would appear that there are several cases where only residence certificate of
some incompetent person was produced in support of residence and certificate
by a doctor in support of age were produced as proof without producing any
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 177

other document to prove those two facts. Thus, there was no proper proof of A
residence or age produced by these applicants. The record of scrutiny produced
by the State shows that, those applicants who had submitted aforesaid improper
documents were not even asked by the State at the scrutiny, to submit proper
documents such as residence certificate by Revenue Authority, etc. or proper
proof of age such as School Certificate or Birth Certificate, etc.
B
We may in this connection notice some findings of the High Court.
Before the High Court, it had been conceded that the residential certificates
issued by the Councillors of Municipal Council or Sapranches or other persons
who had no legal authority and/ or otherwise incompetent to issue the same,
had been taken into consideration. It may be true that residence certificates C
granted in favour of the applicants who are not ordinarily inhabitants of the
State of Chhattisgarh; cannot be procured from the Revenue Department of
the State. The applicants, however, could procure such certificates from the
competent authorities of the respective States where the applicant was a
resident and who hold similar status in their State, particularly, when it is one
of the eligible criteria. The High Court in paragraph 21 of its judgment has b
noticed the example of residence certificate of Abbay Singh, which does not
even bear the revenue case number or seal of the office of the Tehsildar
which are mandatory requirements. The High Court has also noticed that the
certificates relating to age had been issued by Dental Surgeons and Orthopaedic
Surgeons. The High Court furthermore noticed the report of the Station House E
Officer, Chirmiri to S.P. Koria mentioning about one licensee Pradeep Gupta
that he is an employee of liquor contractor Amolak Singh Bhatia and financial
condition of Pradeep Gupta is not such that he could take the financial burden
of liquor trade. In spite of it, liquor licence was granted to him.

Furthermore, the High Court in paragraph 22 of its judgment found that F
the Official Respondents have failed to carry out the directions issued by this
Court in the manner expected of them and in conformity with the mandatory
rule 9 and 11 of the Rules. The High Court in paragraph 23 also found that
the burden was wrongly shifted on objectors to prove the negative facts by
evidence which was a serious flaw in enquiry. Jn paragraph 24, it also took
notice of a chart and found that vague and incomplete address such as 'resident G
of Raipur' and 'resident of Saja' which is an assembly constituency, has been
accepted by the authorities.

The aforesaid findings of the High Court establish that the licences
might have been issued in fake names and to the ineligible applicants. Our H
178 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A attention has furthermore been drawn to the fact that some of the applicants
are facing criminal trials, veracity whereof is not established.

The contention of the learned counsel appearing on behalf of the
Appellant that this Court has placed burden of proof on the objector may not
be entirely correct. The initial burden was on the applicants themselves for
B grant of licences to satisfy the members of the District Level Committees that
they fulfill the eligibility and other criteria. This Court merely opined that
even in such matters, the satisfaction was required to be arrived at by the
competent authority upon considering the objections raised by the writ
petitioners. This Court, thereby, did not mean that whenever an objection was
C raised, the burden thereof would be upon the objector to prove the same. Sub
para (iv) of Paragraph 90 of the judgment in Ashok Lanka I (supra) merely
gave the objectors an additional opportunity to place materials before the
District Level Committees to show that some of the applicants might be
ineligible.

D Our attention has further been drawn to the fact that certificates issued
by the doctors or dental surgeons, orthopaedics as regards proof of age of the
applicants had been taken into consideration. The same was wholly illegal.
But, it does not appear that such a contention had been raised before the High
Court. It is expected that in future the competent authority shall consider the
desirability of verification of age for arriving at the satisfaction tha! a person
E below the age of 21 years is not granted a licence.
.
NOTIFICATION

Before us the Hindi version of the notification has been read wherefrom
F it appeared that the requirement of providing the certificate as regards the
alleged criminal background of the family members of the licensees had
inadvenently appeared in the English version of the notification, but were
absent in the Hindi version.

It is true that this Coun had delivered the judgment in Ashok Lanka - I
G (supra) on I Ith May, 2005. A clarificatory notification was issued on 5.7.2005
by deleting the words "'as well as his family members" from the notification
dated 15.3.2005. The relevant portion of the said notification reads as under:

" ...... In the said rules, -

( 1) In sub rule 3 of clause (d) of rule 9 the words "as well as his
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA. J.] 179
family members" shall be omitted." A
The said notification was given a retrospective effect.

Ordinarily· a subordinate legislation cannot be given a retrospective
effect. The Notification dated 15.3.2005, however, is said to be clarificatory
in nature. A clarificatory Notification can be given retrospective effect. Such B
a clarification, according to the State, was necessary to be issued as there was
an apparent conflict between the Hindi version and the English version of the
Notification.

It may be true that before the High Court such a contention has not
been raised but we are satisfied about the bona fide of the State in this behalf. C
In that view of the matter, it was not necessary for the District Level Committee
or the. State to verify the criminal background of the family members of the
applicants.

Presumably, character certificates were required to be issued by the
respective Superintendents of Police in respect of the candidates concerned. D
Of course, if they had been residing at different places at different points of
time, such character certificates were required to be issued by the
Superintendent of Police of each such place. But the same would not mean
that character certificates were required to be produced by the candidates in
respect of their family members also particularly when it was not certain as E
to who would come within the purview of the said term. It was in that sense
the Notification dated 15.3.2005 was a clarificatory one, and, therefore, could
be given a retrospectiv~ effect.

CHARACTER CERTIFICATES
F
In view of the directions contained in sub-paragraph (xi) of Paragraph
90, we do' not accept the contention of Mr. Desai that only certificate issued
by the Superintendent of Police of the place of his permanent residence is to
be filed. It. however; appears that the Commissioner of Excise had issued
letters to the concerned Superintendents of Police as regard requirement to
comply with the provisions of Rule 9 of the Rules. The reason why we say G
so .is that if a person is resident of any district for a year, the certificate which
may be issued by the Superintendent of Police of that place may remain valid
only for that year. He would not be in a position to vouchsafe about the
conduct of the person concerned or as to whether he has any criminal
antecedents prior or subsequent thereto. H
180 SUPREME COURT REPORTS (20061 SUPP. I S.C.R.

A It may, therefore, be necessary that the applicant should state the details
of the places where he had stayed or carried on business and produce a
certificate from the concerned authorities from each such place.

ADDRESS OF THE APPLICANT

B No case, however, has been pointed out before us where such certificates
had been given by the Superintendent of Police other than from the place
wherein the applicant is a permanent resident. Terms and conditions of the
advertisement did not mandate that a person residing outside the State of
Chhattisgarh would be ineligible for filing an application. If that be so, then
C those who were residents of places other than the State of Chhattisgarh would
also be eligible therefor. They may have a temporary address in Chhattisgarh
or they may not have a permanent address within the said State but by way
of temporary address, they cannot give an address which is not their residence
even for temporary purpose. Even in paragraph 71 of the judgment in Ashok
Lanka - I (supra), this Court pointed out the said fact. No serious dispute has
D been raised that the said contention of the writ petitioners was not correct.
But, even if they had no temporary address but they had been able to file
their character certificates and proof of permanent address, they cannot be
held to be ineligible for the grant of licences. Furthermore, there is nothing
to indicate that the District Level Committees had information as to whether
E the applicants were defaulters in respect of some other State. Such mechanism
of scrutiny is not available in the statutory scheme and in our opinion should
be provided.

We hope and trust that in future, i.e., for the following excise year,
appropriate steps shall be taken to make the position clear that if the applicants
p are not residents of the State of Jharkhand either on a temporary or permanent
basis, they would not be shown to be residents of such places wherefrom
their antecedents cannot be verified. Such applicants, therefore, should not be
allowed to furnish an address only for the purpose of communication and if
so, the same should clearly be stated in the application.

G In the Act or the Rules, again no particular authority had been mentioned
as having been authorized to issue certificate. No particular method of
verification of proof of address and identity had also been shown to exist. It
will be appropriate if a clarification is issued in this behalf.

The Scrutiny Committee appears to have relied upon certificates issued
H
ASHOK LENKA v. RISH! DIKSHIT [SINHA, J.] 181
by Tahsildars, Municipal Counsellors, etc. which had not been objected to by A
the writ petitioners. It is stated that most of the applicants are income tax
payees. They have been granted a PAN Card. In future, however, the
authorities should insist that the applicants must enclose Xeroxed copies of
their PAN Cards along with their applications.

CONCLUSION
B

The period for which licences had been granted is over. For all practical
purposes, the State and the licensees have succeeded in their attempts to
defeat the purpose for which the writ petitions were filed by the writ petitioners
- Respondents. We must express our dismay that despite our directions, the C
applications filed by the Appellants had not been scrutinized minutely which
should have been done. The State of Chhattisgarh, we are not very sure,
whether was aware of its constitutional duties and functions. It seems to have
been more concerned with raising of revenue. To that extent it had succeeded,
as the High Court in the first round of litigation despite dir~cting a fresh
scrutiny of the applications did not direct refund of the huge amount collected D
by it by way of application fees. We would, however, expect the State and
its officers to scrupulously follow the constitutional mandate in future. It was
with this intention we have dealt with these matters at some detail.

We hope and trust that the State of Chhattisgarh and its authorities
would not commit the same mistakes in the coming years keeping in mind E
the mandate of Article 47 of the Constitution of India and scrupulously
observe the rules for disposal of liquor shops.

With the aforementioned observations and directions, these appeals are
allowed. The parties, however, are directed to pay and bear their own costs.
F
V.S. Appeal allowed.