Holding

The executive policy of imposing Minimum Sales Figures for liquor licences is a valid, non‑arbitrary exercise of legislative power and does not violate Articles 14, 16 or 19(1)(g); the petition is dismissed.

Summary

Ugar Sugar Works Ltd., a manufacturer of Indian Made Foreign Liquor, challenged a Delhi Administration notification issued under the Punjab Excise Act, 1914 and Delhi Liquor Licence Rules, 1976 that imposed Minimum Sales Figures (MSF) as a condition for obtaining an L‑1 licence for the excise year 2000‑2001. The petitioner alleged that the MSF requirement was arbitrary, discriminatory against small manufacturers and violative of Articles 14, 16 and 19(1)(g) of the Constitution. The Supreme Court held that there is no fundamental right to trade in intoxicants and that the policy of setting MSF is a permissible exercise of the State’s power to ensure the supply of liquor of good quality. The Court emphasized that judicial review of executive policy is limited to cases of mala‑fide, unreasonable or arbitrary action, none of which were found here. Consequently, the MSF criterion was deemed a reasonable and relevant mode to assess acceptability of liquor brands, and the notification was upheld. The writ petition was dismissed without any order as to costs.

Issues considered

Whether the Minimum Sales Figures requirement for liquor brands violates the fundamental right to practice any trade, business or profession under Article 19(1)(g).
Whether the MSF requirement is arbitrary, unreasonable or discriminatory, thereby infringing Articles 14 and 16 of the Constitution.
Whether the executive policy of the Delhi Administration is amenable to judicial review on the grounds of mala‑fide, irrationality or arbitrariness.

Legislation cited

Punjab Excise Act, 1914s. 26, s. 34, s. 35, s. 5

Subjects

Minimum Sales Figuresliquor licensingArticle 19(1)(g)Article 14Article 16judicial reviewexecutive policyintoxicantsconstitutional lawDelhi

Judgment

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
down as a criterion for eligibility for grant of licence-Validity of-Held :
c 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 ofplace
and merits outright rejection-Hence, executive policy valid.

D
Delhi Liquor Licence Rules, 1976: Rule 16.

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 ofjudicial 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 ofhealth, welfare and morals to the benefit all citizens of the Stale-
Hence, notification valid-Punjab Excise Act, 1914.
F
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 B
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. c
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 D
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 E
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]
F

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.
,G
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-
tain whether that particular brand of liquor has been tested and tried H
632 SUPREME COURT REPORTS [2001] 2 S.C.R.
A extensively elsewhere and has found its acceptability in other States. The
manner in which the Government chooses to ascertain the factor of higher
acceptability, must in the very nature of things, fall within the discretion of
the Government so long as the discretion is not exercised malffide, unrea-
sonably or arbitrarily. [641-D-G]

B 3.2•. Laying down requirement of achieving Minimum Sale Figures
(MSF) of a particular brand of liquor in other States, as a mode for
determination of the "acceptability" of that brand of liquor, is neither
irrelevant, nor irrational or unreasonable. Prescription of MSF require·
ment is aimed at allowing sale of only such brands of liquor, which have
c been tested, tried and found acceptable at large in other parts of the
country. [641-GI

4. The policy objective as reflected in the impugned notification is to
provide liquor of good quality. The executive policy to determine whether
a particular brand of liquor is of good quality or not, on the basis of larger
~. -
D
acceptability of the particular brand in other parts of the country, is a fair
and relevant mode. The manner for determining whether particular brand
of liquor has acquired larger acceptability or not so as to qualify for its
being 'liquor of good quality' has to be decided by the State in its discre-
tion so long as the manner adopted by the State is "just, fair and reason-
E able". It is not in dispute that the criterion of MSF is being uniformly
applied and no pick and choose policy has been adopted by the State in
that behalf. (641-H; 642·A·B)
•
5.1. It is not permissible for the Court to' prescribe MSF require-
ments in exercise of its power of judicial review. It is not within the
F
province of this Court to lay down that the executive policy must always
remain static, even if its re,ision is "just, fair and reasonable". What is
relevant is to find out whether the executive action is ma/a fide, unreason-
able or irrational as a criteriou. In exercise of its power of judicial review
court cannot sit in judgment over the policy of the Administration except
G on limited grounds. Each State is empowered to formulate its own liquor
policy keeping in view the interest of its citizens. Determination of wide
scale acceptability of a particular brand of liquor, on the basis of national
sales figu,les, is not unreasonable, much less irrational. The basis for deter-
mination is not only relevant but also fair. No direction can be given or
H expected from the Court regarding the 'correctness' of an executive policy
_(,

UGAR SUGAR WORKS. LTD. v. DELHI ADMINISTRATION (DR. A.S. ANAND, O.] 633

unless while implementing such policies, there is infringement or violation A
or any constitutional or statutory provision. In the present case, not only
there is no such violation but also on the other band, the State in formulat·
ing its policy bas exercised its statutory powers and applied them uni·
formly. (642-E-H)

5.2. The impugned notification furthers the object of providing good B
liquor having larger acceptability. The policy is made in the interest or
health, welfare and morals to benefit all citizens of the State and not the
big industrial houses as alleged. Determination of wide scale acceptability
on the basis of revised MSF is not unreasonable let alone irrational, arbi·
trary or unfair. [643-D) c
CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 321 of
2000.

(Under Article 32 of the Constitution of India.)
D I

P.P. Malhotra, Dinesh Kumar, Shelendra Sharma and Shirish Kumar
Misra for the Petitioner.

K.N. Shukla, Ms. Rekha Pandey and D.S. Mabra for the Respondents.
E
The Judgment of the Court was delivered by

DR. A.S. ANAND, CJ. Whether impugned notification issued by
Respondent No. 2 laying down terms and conditions for registration of
different brands of Indian Made Foreign Liquor (IMFL) for supply within the
territory of Delhi during 2000-2001 and laying down Minimum Sales Figures F
(MSF), as a criteria of eligibility for grant of licence in form L-1, is violative
of Articles 14, 16 and 19(l)(g) of the Constitution, is the short question raised
in this Writ Petition filed under Article 32 of the Constitution.

The petitioner is a Company incorporated under the Companies Act,
1956 having its registered office in Sangli, Maharashtra. It is engaged in the G
business of manufacture of IMFL and holds L-1 licence for supply of its
various brands of liquor for vending within the territory of Delhi.

The trade and business of liquor in National Capital Territory of Delhi
is governed by Punjab Excise Act, 1914 (hereinafter referred to as 'the Act') H
'>--
634 SUPREME COURT REPORTS [2001] 2 S.C.R.
A and the grant of licence for vending liquor is regulated by Delhi Liquo;
Licence Rules, 1976 (hereinafter "the Rules"). Respondent No. 1 , Delhi
Administration in exercise of its powers under Section 5 of the Act has been
taking policy decisions from time to time and issuing notifications dealing
with Registration of Brands and Eligibility of Brands of IMFL for its sale
in the National Capital Territory of Delhi. The eligibility for grant of licence
B
L-1, which enables the supplier to supply his brands of IMFL in Delhi, is
regulated by those policy decisions and includes compliance with specific
MSF requirements for:a particular year. According to the petitioner, the policy
of Delhi Government-pursuant to which impugned notification, laying down
MSF criteria for the year 2000-2001 has been issued, is arbitrary and
c discriminatory as against small scale manufacturers and has no nexus with
the object of providing liquor of good quality for consumption within the
territory of Delhi and is as such violative of Articles 14, 16 and 19(1)(g) of
the Constitution and, thus liable to be declared invalid and unconstitutional.

Before we proceed to examine the challenge to the policy of Delhi
D Government, on the basis of which the impugned notification laying down
MSF requirements for supply of various brands of liquor in Delhi has been
issued, we may first refer in short to the previous history of the case.

h1 1996 the petitioner filed Civil Writ Petition No. 483/1996 challeng-
E ing MSF requirements fixed for that year. Rule nisi came to be issued. That
petition has remained pending. Delhi Wine Merchants Association filed an
SLP against an order of the Delhi High Court upholding MSF requirements
through its judgment dated 25.4.1996 in Civil Writ Petition No. 4843 of 1995.
That SLP is also pending. Both these cases pertain to the challenge to the
notification issued for the period 1996-97. The present writ petition has put
F in issue the notification issued for the year 2000-2001 fixing enhanced MSF
requirements as a condition of eligibility to get L-1 Licence. The grounds of
challenge in all the three cases are similar.

Through the impugned notification MSF requirement for the lowest
price tag has been raised from 60,000 cases (7.2. lac bottles) to 75,000 ca8es
G
(9 lac bottles) over _the previous year's MSF requirements for the 'lowest
price tag' brand of liquor and this raise, according to the petitioner is unfair,
'unreasonable, arbiu'ary and violative of Article 19(1)(g) and 14 of the
Constitution.

H Let us first examine some of the Statutory provisions dealing with the
UOAR SUGAR WORKS. LTD. v. DELHI ADMINISTRATION [DR. A.S. ANAND, CJ.] 635
issue. Respondent No. I is empowered by Section 5 of the Act to issue A
notifications laying d9wn maximum/minimwn quantity of any intoxicating
liquor which may be sold either in retail or in wholesale in the territory of
Delhi Section 5 provides :

"5. PoweroftM lieutenant Governor to ckclare limit ofsale by retail
and by whole sale. • The Lieutenant Governor of Delhi may by B
notification declare, with respect either to the whole of the Union
Territory of Delhi or to any local area comprised therein and as
regards purchases generally or any specified class of purchases and
generally or for any specified occasion maximwn or minimwn
quantity or both of any intoxicant which for the pmposes of this Act C
may be sold by retail and by wholesale."

Section 26 of the Act deals with the sale of intol)icants and provides
as follows :
J
~
"Section 26 ·Sale of intoxicants - No liquor shill! be bottled for sale D
and no intoxicant shall be sold except under the authority and subject
to the terms and conditions of a licence granted in that behalf provided
that:

(1) a person licensed under Section 20 to cultivate the hemp plant may
sell without a licence those portions of the plant from which any E
.~)(
intoxicating drug can be manufactured to any person licensed under
this Act to deal in the same or to any officer whom the Financial
Commissioner may appoint in this behalf;
•
(2) a person having the right to the tari drawn from any tree may sell
the same without a licence to a person licensed to manufacture or F
sell tari under this Act;
" )c
(3) on such conditions as the Financial Commissioner may determine
a licence for. sale under the Excise Law for the time being in force
in other parts of the whole of the India except Part B States may be
G
deemed to be a licence granted in that behalf under this Act;

(4) nothing in this section applies to the sale of any foreign liquor
lawfully procured by any person for his private use and sold by him
or on his behalf or on behalf of his representatives in interest upon
his quitting a station or after his decease." H
636 SUPREME COURT REPORTS [2001] 2 S.C.R.
A Section 34 of the Act provides for fees, terms, conditions and form of
duration of licences, permits and passes.

Section 35 of the Act deals with the conditions for grant of licence for
sale of intoxicants and provides :

B "Section 35 - (1) Grant of licence for sale - Subject to the rules made
by the Financial Commissioner under the power conferred by this
Act, the Collector may grant licences for the sale of any intoxicant
within his District.

(2) Ascertainment of public opinion - Before any licence is granted
c in any year for the retail sale of liquor for consumption on any
premises which have not been no licensed in the preceding year, the
Collector shall take such measure in accordaoce with rules to be made
by the State Government in this behalf, as may best enable him to
ascertain local public opinion in regard to the licensing of such
D prellllses.

(3) A licence for sale in more than one district of the Punjab
(Haryana) shall be graoted by the Finaocial Commissioner only."

i Rule 16 of the Rules aims at controlling the quality of liquor aod lays
E down:

"Quality of liquor- (i) The liquor shall be of good quality which shall
be subject to periodical analysis, aod the licensee shall be bound to
take all possible steps to remedy the defects which the CollectOr of
Excise may consider material and the licensee shall thereon report to
F the Collector of Excise after rectification.

(ii) The licensee shall ensure that if any country liquor received in the
.
Bonded Warehouse is of inferior quality, he shall refrain from issuing
it aod shall immediately report the matter to the Excise Officer,
Bonded Warehouse. The said Excise Officer shall cause samples to
G
be taken of such liquor and submit a report to the Collector of Excise
who may get these samples analysed by the Chemical Examiner.

(iii) In case the country liquor is declared by the Chemical Examiner
as unfit for human consumption or below quality, it shall be disposed
H of in such manner as may be directed by the Collector of Excise.
UGARSUGAR WORKS. LTD. v. DELHI ADMINISTRATION (DR. A.S. ANAND, O.] 637
- ·~ (iv) The licensee shall not store or sell any liquor which does not A
conform to the specifications required in an order made by the Excise
Commissioner with the provisions approval of the Lt. Governor, or
if no such order has been made, which does not conform to the
specifications laid down by the Indian Standards Institution.

(v) The Excise Commissioner shall fix the price of Country Liquor B
applied to 'the BWH by different Distilleries, and, if necessary the
prices shall be fixed Brandwise.

Substituted vide Notification No. F. 10/68/80 - Fin (G) dated
18.4.1980." c
Having noticed some of the relevant provisions of the Act and ihe
Rules, we now consider the validity of the challenge to the impugned
notification as raised before us.

That there is no fundamental right to trade in intoxicants, like liquor, D
has been conclusively held by this Court in State ofA.P. & Ors. v. Mc Dowell
& Co. & Ors., (1996) 3 SCC 709, where taking note of some of the earlier
Constitution Bench decisioi.s of this Court, the argument that a citizen of this
country has a fundamental right to trade in intoxicant liquor was once again
emphatically repelled. That issue is, thus, no longer res integra. The following
observations of the Bench in Mc Dowe/l's case (supra) are educative : E

"The contention that a citizen of this country has a fundamental right
to trade in intoxicating liquors refuses to die in spite of the 1uent
Constitution Bench decision in Khoday Distilleries, (1995] I SCC
574. It is raised before us again. In Khoday Distilleries, this Court F
reviewed the entire case-law on the subject and concluded that a
citizen has no fundamental right to trade or business in intoxicating
liquors and that trade or business in such liquor can be completely
prohibited. It held that because of its vicious and pernicious nature,
dealing in intoxicating liquors is considered to be res extra comme rr:ium
(outside commerce). Article 47 of the Constitution, it pointed out, G
requires the State to endeavour to bring about prohibition of the
consumption except for medicinal purposes of intoxicating drinks and
all drugs which are injurious to health. For the same reason, the Bench
held, the State can treat a monopoly either in itself or in an agency
created by it for the manufacture, possession, sale and distribution of H
638 SUPREME COURT REPORTS r200112 s.c.R.
A liquor as a beverage. The holding is emphatic and unambiguous. Yet ~ ·-
an argument is sought to be built upon certain words occuning in
clauses (e) and (t) of the summary contained in para 60 of the
decision. In these cliuses, it was observed that c111ation of a monopoly
in the State to deal in intoxicating liquors and the power to impose
restrictions, limitations and even prohibition the111on can be imposed
B
both under clause (6) of Article 19 or even otherwise. Seizing upon
these observations, Shri Oanguly argued that this decision implicitly
recognises that business in liquor is a fundamental right under Article
19(1)(g). If it were not so, asked the learned counsel, reference to
Article 19(6) has no meaning. Wedo not think that any suchazgument
c can be built upon the said observations. In clause (e), the Bench held,
a monopoly in the State or its agency can be created "under Article
19(6) or even otherwise". Similarly, in clause (t), while speaking of
imposition of restrictions and limitations on this business, it held that
they can be imposed "both under Article 19(6) or otherwise". The said
+ -
D words cannot be read as militating against the express propositions
enunciated in clauses (b), (c), (d), (e) and (t) of the said summary.
The said tkcision, as a maiter of fact, emphatically reiteraies the
holding in Har Shanker, (1975] 1 SSC 737, thal a citizen has no
fundamental right to tratk in intoxicaling liquors. In this view of the
i,_ A
matter, any argument based upon Anicle 19(l)(g) is out of place".
E
(Emphasis ours)

In Har Shankar & Ors. v. The Dy. Excise and Taxalion Commr. & Ors.,
[1975] 1 SCC 737, Chandrachud, J. (as the learned Chief Justice then was)
in para 53 of the judgment opined :
F
"In our opinion, the true position governing dealings in intoxicants
is as stated and reflected in the Constitution Bench decisions of this
Court in Balsara's case (supra), Cooverjee's case (supra), Kidwai's
case (supra), Nagendra Nath's case (supra) Amar Chakrabony's case
(supra) and the R.M.D.C. case (supra), as interpreted in Harinarayan
G Jaiswal's case (supra) and Nashirwar's case (supra). There is no
fundamental right to do tratk or business in intoxicants. The State,
,.i. ~
under its regulalory powers, has the right to prohibit absolutely every
form of activity in relation to intoxicants - its manufacture, storage,
expon, impon, sale and possession. In all their manifestations, these
H rights are vested in the Stale and incleed without such vesting there
l1GAR SUGAR WORKS. LTD. v. DELHI ADMINISTRATION (DR. A.S. ANAND, CJ,] 639
can bl 110 1f!1c1iv1 1'lgulatio11 of various forms ofactivities i111'llatio11 A
to intoxicants. In "American 1urispnulence'', Volume 30 it is stated
that while engaging in liquor traffic is not inherently unlawful,
nevertheless it is a privilege and not a right, subject to governmental
control (page S38). This power of control is an incident of the
society's right to self-protection and if rests upon the right of the State
B
to care for the health, morals and welfare of the people. Liquor traffic
is a source of pauperism and crime (pp. S39, S40, S41)."

(Emphasis supplied)

In Har Shanker's case (supra) after considering decisions of five C
Constitution Benches, the law was summed up thus :

"These unanimous decisions of five Constitution Benches uniformly
emphasised after a careful consideration of the problem involved that
the State has the power to prohibit trades which are injurious to the
health and welfare of the public, that elimination and exclusion from D
business is inherent in the nature of liquor business, that no person
has an absolute right to deal in liquor and that all forms of dealings
in liquor have, from their inherent nature, been treated as a class by
themselves by all civilised communities. T7ie contention that the
citizen had either a natural or a fundamental right to carry on trade E
or business in liquor thus stood rejected'.

(Emphasis supplied)

In view of this settled position of law, any argument impugning the
policy decision of the State Government, as reflected in the impugned F
notification, based upon Article 19(1)(g) is totally out of place and merits
outright rejection and we have no hesitation in doing so most emphatically.

Faced with the settled legal position that there is no fundamental right
to trade in liquor, learned counsel for the petitioner did not pursue the
argument. based on Article 19(l)(g) to question the competence of Delhi G
Administration to take a policy decision with regard to regulating trade in
liquor and laying down various regulatory measures and in our opinion
rightly so. Learned counsel, however, mounted his challenge to the impugned
notification based on Article 14 principally on the ground that the policy as
reflected in the impugned notification was irrational and that raising of MSF H
640 SUPREME COURT REPORTS [2001] 2 S.C.R.
A requirements over the previous year's figures with a view to regulate the
"quality of liquor" being sold in Delhi was arbitrary and has no nexus with
the object sought to be achieved viz., to provide liquor of good quality to
the consumers in the National Capital Tenitory of Delhi. It was also urged
that the policy is discriminatory and as a result of the policy, small scale
manufactures with good quality of liquor, were likely to be deprived of their
B
marketing brand within the potential market of Delhi, in case they do not
achieve the presciibed MSF outside Delhi and that would result in leaving
the field wide open only for big business houses who would retain their
monopoly in Delhi market.

c The challenge, thus, in effect, is to the executive policy regulating trade
in liquor in Delhi. 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 unconstitutional.
D However, if the policy caonot 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 judgment of
the executive. The Courts are not expected to express their opinion as to
E 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.

1n Tamil Nadu Education Department Ministerial and General Subor-
dinate Services Association and Ors. v. State of Tamil Nadu & Ors.. [1980]
3 sec 97, noticing the jurisdictional limitations to analyse and fault a policy,
F this Court opined that :

·"The court caonot strike down a G.0., or a policy merely because
there is a variation or contradiction. Life is sometimes contradiction
and even consistency is not always a virtue. What is important is to
G know whether mala fides vitiates or irrational and extraneous factor
fouls."

It would also be prudent to recall the following observations of Lord
Justice Lawton in !Aker Airways, (1977) 2 WLR 234 at 267, while consid·
ering the parameters of judicial review in matters involving policy decisions
H of the executive :
UGAR SUGAR WORKS. LTD. v. DELHI ADMINISTRATION (DR. A.S. ANAND, CJ.] 641

"In the United Kingdom aviation policy is detennined by ministers A
within the legal framework set out by Parliament. Judges have
nothing to do with either policy making or the carrying out of policy.
Their function is to decide whether a minister has acted within the
powers given him by statute or the common Jaw. If he is declared by
a court, after due process of law, to have acted outside his powers,
he must stop doing what he has done until such time as Parliament
B
gives him the powers he wants. In a case such as this I regard myself
as a referee. I can blow my judicial whistle when the ball goes out
of play; but when the game restarts I must neither take part in it nor
tell the players how to play."
c
In the present case the executive policy regulating the sale of liquor
in the tenitory of Delhi is sought to be challenged by petitioner on the ground
that it is 'unfair' and 'unreasonable' besides being 'arbitrary' and has no
nexus with the object sought to be achieved. We are unable to agree.

The State has every right to regulate the supply of liquor within its D
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 ascertain whether that
particular brand ofliquor has been tested and tried extensively elsewhere and
has found its acceptability in other States. The manner in which the Govern- E
- l' ment chooses to ascertain the factor of higher acceptability, must in the very
nature of things, fall within the discretion of the Government so long as the
discretion is not exercised mala fi<k, unreasonably or arbitrarily. The allega-
tions of mala fide made in the writ petition are totally bereft of any factual
matrix and we, therefore, do not detain ourselves at all to consider challenge
on that ground. In fairness to learned counsel for the petitioner we may record F
that challenge to notification on grounds of ma/a fide was not pressed during
arguments: Laying down requirement of achieving minimum sale figures of
a particular brand of liquor in other States, as a mode for determination of
the "acceptability" of that brand of liquor, is neither irrelevant; nor irrational
or unreasonable. It appears ihat prescription of MSF requirement is aimed at G
allowing sale of only such brands of liquor which have been tested, tried and
found acceptable at large in other parts of the country.

The policy objective as reflected in the impugned notification is to
provide liquor of good quality in Delhi. The executive policy to determine
whether a particular brand of liquor is of good qiiality or not, on the basis H
642 SUPRBMB COURT RBPORTS [2001] 2 S.C.R.
A of larger acceptability of the particular brand in other parts of the country,
appcan to ua to be a fair and relevant mode. The manner for detennining
whether a particular brand of liquor bas acquired larger acceptability or not
so u to qualify for it being "liquor of good quality" bas to be decided by
the State in its discretion so lonj as the manner adopted by the State is "just,
fair and reasonable". It is not In dispute that the criteria of MSF is being
B
unifonnly applied and no pick and choose policy bas been adopted by the
State in that behalf. Learned counsel for the petitioners bas been unable to
convince ua that fixation of MSF requirements as a criteria for such deter·
mination is in any manner ''unfair, iITational or unreasonable".

c The argument that since MSF laid down for the year 1994-1995 were
not changed till 1998-99, there was no need to increase MSF requirements
in 1999-2000 or to further increase the same in the year 2000-2001 for the
lowest price tag brand of liquor from 60,000 cases (7 .2 lac bottles) to 75,000
cases (9 lac bottles) for the current year, suffers from the basic infmnity that
it invites the court to enter into an area of testing the executive policy, not
D on grounds whether it is ''.just, fair and reasonable'', but whether the object
could not have been achieved by fixing a lower MSF requirement In other
words Court is being invited to prescribe MSF requirements in exercise of
its power of judicial review. That is not pennissible and we must decline the
invitation to enter that area It is not within the province of this Court to lay
E down that the executive policy must always remain static, even if its revision
is "just, fair and reasonable". What is relevant is to find out whether the
executive action is mala fide, unreasonable or irrational as a criterion. As
already observed the Court, in exercise of its power of judicial review, cannot
sit in judgment over the policy of Administration except on the limited
grounds already noted. Each State is empowered to fomiulate its own liquor
F policy keeping in view the interest of its citizens. Detennination of wide scale
acceptability of a particular ~rand of liquor, on the basis of national sales
figures, does not strike us as being unreasonable, much le~s irrational. The
basis for detennination is not only relevant but also fair. No dire~tion can be
given or expected from the Court regarding the 'correctness' of an executive
G policy unless while implementing such policies, there is infringement or
violation of any constitutioniil or statutory provision. In the present case, not
only there is no such violation but on other hand, the State in fonnulating
its policy has exercised its statutory powers and applied them uniformly.
Through, we are not required to test the correctness of the 'reason' for
H increase of MSF over the previous years' figures, but it is relevant to point
UGAR SUGAR WORKS. LTD. v, DBLHI ADMINISTRATION [DR. A.S. ANAND, CI.] 643
out that increase of sale from 60,000 cases to 75,000 cases in respect of A
'lowest price tag' brand of liquor does not appear to be arbitrary and on the
other hand it appears to have a rational basis. Economic mechanism is a
highly sensitive and a complex matter. With inflation every year, it soe1
without saying, that the brand which bu the "lowest price tas" this year,
was perhaps not the brand which had "lowest price tag last year". It is
possible that the brand 'with lowest price tag' this year may not be of that
B
good quality as the brand with identical price tag last year, even though it
may confonn to IS! standards. It was, therefore, reasonable for the State to
fmd out whether that particular brand with the lowest price tag this year,
bad been tested and tried elsewhere and had been accepted largely by the
public in other parts of India to detennine if that particular brand of liquor c
can be considered to be liquor of good quality keeping the health and welfare
of the public in view. The impugned notification in our opinion furthers the
object of providing good liquor having larger acceptability. The policy is
made in the interest of health, welfare and morals to benefit all citizens of
Delhi and not the big industrial houses as alleged. Detennination of wide
D
scale acceptability on the basis of revised minimum sales figures (MSF) does
not strike us as being unreasonable let alone irrational, arbitrary or unfair.
Under these circumstances there is no justifiable reason wammting interler·
ence with the impugned notification. The Writ Petition accordingly fails and
is dismissed but without any order as to costs.
E
v.s.s. Petition dismissed.