Markandeya Katju, C.J.@mdashThese appeals have been filed against the impugned judgment dated 26.9.2005 delivered by the learned single Judge in WP(C) Nos. 17960/2005, 14310/2005 and 17805/2005. Since all these appeals involve common questions of law and fact, we are disposing them of together.
2. The writ petitioners had prayed for a mandamus directing the Government of NCT of Delhi through the Commissioner of Excise to grant L-52 licenses to the petitioners in terms of respondent''s policy vide public notice dated 22.11.2004. They have also prayed for quashing of Condition No.15 attached to the terms and conditions for grant of license in form L-52 as per respondent''s public notice for the year 2004-05.
3. In WP(C) No. 17960/2005 titled S.P. Khanna v. Govt. of NCT of Delhi it is alleged in para 3 (a) of the writ petition that the respondent Government of NCT of Delhi had issued a policy on 22.11.2004 for grant of L-52 licenses in Delhi for retail vending of Indian Made Foreign Liquor (IMFL)/Beer in private sector for the year 2004-05 onwards and invited applications by public notice dated 22.11.2004 from the applicants who held the eligibility criteria as per said public notice. The eligibility criteria is enumerated in para 3(a) of the writ petition.
4. In para 3(b) of the said writ petition it is mentioned that the petitioner who qualified all the eligibility conditions for grant of L-52 license applied to the respondent for such a license with respect to premises taken on lease from Mr. Sanjay Sood vide lease deed dated 13.1.2005 with respect to commercial premises bearing No.R-13, Inderpuri, New Delhi on a monthly rent of Rs.40,000/- and submitted its application along with all the requisite documents i.e. along with the lease deed, solvency certificate of Rs. 25 lakh and earnest money of Rs. 2.5 lakh. A true copy of the application is Annexure P2. It is alleged that the petitioner''s application was processed by the respondent and found to be in order. However, the respondent did not inspect the premises offered by the petitioner. Instead the respondent issued the public notice dated 7.2.2005 declaring that it is going to consider the applications received by it till date. A true copy of the public notice is Annexure P-3. The aforesaid notice dated 7.2.2005 states as under:-
"OFFICE OF THE COMMISSIONER (EXCISE) Govt. of NCT of Delhi L-Block, Vikas Bhawan, IP Estate, New Delhi-2 PUBLIC NOTICE
Excise Department, Govt. of NCT of Delhi had invited applications for opening of private liquor vends (license L-52) vide public notice dated 21/11/04, 22/11/04 and 23/11/04. In response to this sufficient number of applications have been received in the department. Many new private vends have already been opened after processing of such applications and a few more applications are under scrutiny. It has, Therefore, been decided to close the scheme with immediate effect. Applications already received by the Department would be considered as per rules and terms and conditions of the scheme but no new applications would be accepted. The status of all pending applications is already available on the department''s website: www.Excise.delhigovt.nic.in.
Sd/- Commissioner (Excise)"
5. It is alleged that the writ petitioner had taken a shop on rent at Rs. 40,000/ p.m and had also furnished a solvency certificate of Rs. 25 lakh and deposited earnest money of Rs.2.5 lakh and hence he should have been issued the license. In para 7 of the petition it is mentioned that the respondent had granted certain licenses to persons whose applications were submitted much after the writ petitioner''s application thereby giving them undue favor, whereas license was illegally withheld from the petitioner although the petitioner''s application was prior and qualified all the requisites. Hence, it is alleged that Article 14 of the Constitution has been violated.
6. It is contended that the respondent is hand in glove with certain people to give them undue advantage.
7. From the facts of the case, it appears that till 2002 liquor licenses were not granted to private persons, but sales were made through DTTDC, DSIDC, DSCSC and/or Delhi Consumer Cooperative Wholesale Store. In the year 2002 L-52 licenses were introduced permitting private parties to do the business of sale of liquor through licenses.
8. The petitioners have alleged that the policy of the respondent was to grant L-52 licenses on a "first come first served" basis provided all the requirements have been met. They have alleged that licenses have been granted to persons who applied subsequent to their applications and hence there is violation of Article 14 of the Constitution.
9. On the other hand, the case of the appellant is that the Government of NCT of Delhi for the first time allowed grant of L-52 licenses for the year 2002-03 for the retail sale of IMFL to applicants in the private sector also. In pursuance of this policy an advertisement was issued in July,2002 in which it was specified that only 70 L-52 licenses will be issued in the entire NCT of Delhi. It was further specified that the number of L-52 licenses in each district will not be more than 8. A large number of applications were received at that time and by draw of lots 65 applications were selected and finally only 45 applicants were granted L-52 licenses for running private liquor shops. For the excise year 2004-2005 again a public notice was issued in all leading newspapers on 21.11.2004 inviting applications in general for grant of L-52 licenses. It was further decided that in case more than one application for opening of L-52 shop is received within a distance of 250 meters, the first application received amongst all the applications within the area of 250 meters will be considered for grant of L-52 license. In other words, in such circumstances, the principle of "first come first serve" will be followed. In pursuance to the aforementioned public notice dated 21.11.2004, 194 applications were received till 4.2.2005, on which date, acceptance of further applications was stopped. The aforesaid applications were scrutinised and thereafter 55 applicants were granted L-52 license, taking the figure of retail IMFL vends under the private sector from 45 to 100. In the current excise year starting from 1.7.2005, out of 100 liquor shops 95 are operational in the NCT of Delhi.
10. It appears that objections were raised in the Delhi Legislative Assembly against opening of L-52 retail liquor shops and a number of representations/objections were received by the Excise Department not only from the elected representatives including MPs, MLAs and Municipal Councillors but also from the public at large, Residents Welfare Associations, NGOs etc. against opening of these L-52 retail liquor shops. In deference to the aforesaid objections, the appellant, NCT Government of Delhi took a decision on 16.9.2005 to stop the process of issuance of new L-52 licenses. It is alleged by the appellant that by stopping the issuance of new L-52 licenses it is suffering a loss of Rs. 1.7 crore per annum as license fee, and hence it cannot be attributed any ulterior motives for stopping the issuance of licenses.
11. In our opinion, the writ petitions deserve to be dismissed on the short point that the persons who had applied subsequently, but were granted licenses, have not been imp leaded as respondents in the writ petition. Even assuming that the policy of "first come first serve" has been violated, this Court would have to quash the licenses granted to the subsequent applicants after issuing notices to them and only then could it direct grant of licenses to the petitioners. This Court cannot increase the number of licenses presently existing since that would be against the policy decision of the government dated 16.9.2005 not to grant further licenses. Since the said persons have not been imp leaded, the writ petition deserves to be dismissed for non-impleading of necessary parties vide
12. Moreover, a bare reading of the terms and conditions for the grant of L-52 licenses makes it clear that the grant of the license is not subject to the principle of "first come first serve". This is neither part of the advertisement nor any rule. The "first come first serve" principle was applicable in this case only when more than one application for opening of L-52 shop is received within a distance of 250 meters. Only in such cases the application received first was to be considered for grant of L-52 licenses. The "first come first serve" principle was not applicable generally or universally under any statutory rule or GO.
13. The Government can not only take policy decisions, it can also change the earlier policy decisions. Thus in
"It would, Therefore, be clear that grant of license depends upon the policy prevailing as on the date of the grant of the license. The court, would, Therefore, not bind the Government with a policy which was existing on the date of the application as per the previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down a new policy."
The above decision lays down two principles:-
(1)The Government can change an earlier policy.
(2)The policy which has to be considered is the policy which is prevalent on the date of grant of the license and not the policy which was prevalent on the date of the application for license.
14. The government has taken a policy decision dated 16.9.2005 not to grant further L-52 licenses. It is well settled that in policy matters this Court has a very limited scope of interference vide
15. In Union of India v. International Trading Co. (supra vide Paragraph 17) the Supreme Court observed:
"The Courts as observed in
As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6th Edition), there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. The reasonableness in administrative law must Therefore distinguish between proper course and improper abuse of power. Nor is the test the Court''s own standard of reasonableness as it might conceive it in a given situation. The point to note is that the thing is not unreasonable in the legal sense merely because the Court thinks it to be unwise."
16. In
"Life is sometimes contradiction and even inconsistency is not always a virtue. What is important is to know whether mala fides vitiates or irrational and extraneous factors fouls".
In that decision the Court also observed :
"Once, the principle is found to be rational, the fact that a few freak instances of hardship may arise on either side cannot be a ground to invalidate the order or the policy. Every cause claims a martyr and however, unhappy we be to see the seniors of yesterdays becoming the juniors of today, this is an area where, absent arbitrariness and irrationality, the Court has to adopt a hands-off policy."
17. In
"The Court cannot sit in judgment over the wisdom of the policy evolved by the Legislature and the sub-ordinate regulation making body. It may be a wise policy, which will fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or regulation will not render it ultra virus and the Court cannot strike it down on the ground that in its opinion, it is not a wise or prudent policy but is even a foolish one, and that it will not really serve to effectuate the purpose of the Act. The legislature and its delegate are the sole repositories of the power to decide what policy should be pursued in relation to matters covered by the Act and there is not scope for any interference by the Courts unless the particular provision impugned before it can be said to suffer from any legal infirmity in the sense of its being wholly beyond the scope of the regulation-making power or it being inconsistent with any of the provisions of the parent enactment or in violation of any of the limitation imposed by the Constitution."
18. A similar view has been reiterated in
19. In
"The Court cannot strike down a policy decision taken by the government merely because it feels that Anr decision would have been fairer or wiser or more scientific or logical."
The Government is entitled to make pragmatic adjustments and policy decision which may be necessary or called for under the prevalent peculiar circumstances. While deciding the said case, the Court referred to and relied upon its earlier judgments in
20. In
21. In
22. This Court cannot ordinarily interfere in administrative matters, since the administrative authorities are specialists in matters relating to the administration. The court does not have the expertise in such matters, and ordinarily should leave such matters to the discretion of the administrative authorities. It is only in rare and exceptional cases, where the Wednesbury principle applies, that the Court should interfere, vide
"However, we cannot lose sight of the fact that the Corporation is an independent autonomous statutory body having its own constitution and rules to abide by, and functions and obligations to discharge. As such, in the discharge of its function it is free to act according to its own light. The views it forms and the decisions it takes are on the basis of the information in its possession and the advice it receives and according to its own perspective and calculations. Unless its action is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the Courts or a third party to substitute its decision, however more prudent, commercial or business like it may be, for the decision of the Corporation. Hence, whatever the wisdom ( or the lack of it ) of the conduct of the Corporation, the same cannot be assailed by making the Corporation liable."
23. In
"If the High Court cannot sit as an appellate authority over the decisions and orders of quasi-judicial authorities, it follows equally that it cannot do so in the case of administrative authorities. In the matter of administrative action, it is well known that more than one choice is available to the administrative authorities. They have a certain amount of discretion available to them. They have "a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred". (per Lord Diplock in Secretary of State for Education and Science v. Metropolitan Borough Counsel of Tameside, 1977 AC 1014. The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, the Court can intervene. To quote the classic passage from the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation, 1947 (2) ALL ER 680:
"It is true the discretion must be exercised reasonably. Now what does that mean? Lawyer familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word "unreasonable'' in a rather comprehensive sense. It has frequently been used and is frequently used as a general discretion of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting "unreasonably''. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority".
24. In
(1)The modern trend points to judicial restraint in administrative action.
(2)The Court does not sit as a court of appeal over administrative decisions but merely reviews the manner in which the decision was made.
(3)The Court does not have the expertise to correct an administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible."
25. As Lord Denning observed:
"This power to overturn executive decisions must be exercised very carefully, because you have got to remember that the executive and the local authorities have their very own responsibilities and they have the right to make decisions. The courts should be very wary about interfering and only interfere in extreme cases, that is, cases where the Court is sure they have gone wrong in law or they have been utterly unreasonable. Otherwise you would get a conflict between the courts and the government and the authorities, which would be most undesirable. The courts must act very warily in this matter." (See ''Judging the World'' by Garry Sturgess Philip Chubb).
26. In our opinion judges must maintain judicial self restraint while exercising the powers of judicial review of administrative or legislative decisions.
"In view of the complexities of modern society," wrote Justice Frankfurter, while Professor of Law at Harvard University, "and the restricted scope of any man''s experience, tolerance and humility in passing judgment on the worth of the experience and beliefs of Ors become crucial faculties in the disposition of cases. The successful exercise of such judicial power calls for rare intellectual disinterestedness and penetration, lest limitation in personal experience and imagination operate as limitations of the Constitution. These insights Mr. Justice Holmes applied in hundreds of cases and expressed in memorable language:
"It is misfortune if a judge reads his conscious or unconscious sympathy with one side or the other prematurely into the law, and forgets that what seem to him to be first principles are believed by half his fellow men to be wrong."
27. In writing a biographical essay on the celebrated Justice Holmes of the U.S.Supreme Court in the dictionary of American Biography, Justice Frankfurter wrote:
"It was not for him (Holmes) to prescribe for society or to deny it the right of experimentation within very wide limits. That was to be left for contest by the political forces in the state. The duty of the Court was to keep the ring free. He reached the democratic result by the philosophic route of skepticism �" by his disbelief in ultimate answers to social questions. Thereby he exhibited the judicial function at its purest."
(see "Essays on Legal History in Honour of Felix Frankfurter'' Edited by Morris D.Forkosch).
28. In our opinion adjudication must be done within the system of historically validated restraints and conscious minimization of the judges'' preferences. The Court must not embarrass the administrative authorities and must realize that administrative authorities have expertise in the field of administration while the Court does not. In the word of Chief Justice Neely:
"I have very few illusions about my own limitations as a Judge. I am not an accountant, electrical engineer, financer, banker, stockbroker or system management analyst. It is the height of folly to expect Judges intelligently to review a 5000 page record addressing the intricacies of a public utility operation. It is not the function of a Judge to act as a super board, or with the zeal of a pedantic school master substituting its judgment for that of the administrator."
29. In administrative matters the Court should Therefore ordinarily defer to the judgment of the administrators unless the decision is clearly illegal or shockingly arbitrary. In this connection Justice Frankfurter while Professor of Law at Harvard University wrote in "The Public and its Government''�"
"With the great men of the Supreme Court constitutional adjudication has always been statecraft. As a mere Judge, Marshall had his superiors among his colleagues. His supremacy lay in his recognition of the practical needs of government. The great judges are those to whom the Constitution is not primarily a text for interpretation but the means of ordering the life of a progressive people."
In the same book Justice Frankfurter also wrote "
"In simple truth, the difficulties that government encounters from law do not inhere in the Constitution. They are due to the judges who interpret it. That document has ample resources for imaginative statesmanship, if judges have imagination for statesmanship."
30. In
"In exercising the power of judicial review, the Courts cannot be oblivious of the practical needs of the government. The door has to be left open for trial and error."
31. In
32. Lord Diplock explained irrationality as follows:
"By irrationality I mean what can be now be succinctly referred to as Wednesbury unreasonableness. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it."
33. In view of the above discussion the policy decision of the respondent government dated 16-9-2005 to stop process of issuance of new L52 licenses cannot be faulted as it cannot be said to be so outrageous in defiance of logic or accepted moral standards that no sensible person could have arrived at it. No doubt the government could have taken a different decision but on this ground the decision dated 16.9.2005 cannot be said to be vitiated. The legislature and executive in their wisdom have different choices and this court cannot say that this or that choice should have been preferred. As Mr. Justice Cardozo of the US Supreme Court observed in Anderson v. Wilson, 289 US 20:
"We do not pause to consider whether a statute differently conceived and framed would yield results more consonant with fairness and reason. We take this statute as we find it."
34. In our opinion the same principle will apply to administrative decisions also. It must never be forgotten that the administrative authorities have wide experience in administrative matters. No Court should Therefore strike down an administrative decision solely because it is perceived by it to be unwise. A Judge cannot act on the belief that he knows better than the executive on a question of policy, because he can never be justifiably certain that he is right. Judicial humility should Therefore prevail over judicial activism in this respect.
35. It is well settled that this Court should not interfere in policy matters unless it is clearly unconstitutional or shockingly arbitrary in the Wednesbury sense. This court can only interfere if the policy decision is clearly vocative of some constitutional or statutory provision or is shockingly arbitrary vide
36.In
"To ascertain unreasonableness and arbitrariness in the context of Art 14 of the Constitution, it is not necessary to enter upon any exercise for finding out the wisdom in the policy decision of the State Government. It is immaterial whether a better or more comprehensive policy decision could have been taken. It is equally immaterial if it can be demonstrated that the policy decision is unwise and is likely to defeat the purpose for which such decision has been taken. Unless the policy decision is demonstratably capricious or arbitrary and not informed by any reason whatsoever or it suffers from the vice of discrimination or infringes any statute or provision of the Constitution, the policy decision cannot be struck down. It should be borne in mind that except for the limited purpose of testing the public policy in the context of illegality and unconstitutionality, courts should avoid "embarking on unchartered ocean of public policy."
37.Often, there is a misunderstanding that Judges can intervene in an administrative decision whenever they think it to be unreasonable. That is not so. It is only when there is extreme unreasonableness that the Court can intervene, and not otherwise.
38. Thus, in Re W, (1971) AC 682 Lord Hailsham observed ;-
"Two reasonable persons can perfectly and reasonably come to opposite conclusions on the same set of facts without forfeiting their title to be regarded as reasonable. Not every reasonable exercise of judgment is right and not every mistaken exercise of judgment is unreasonable."
39. Hence, the Wednesbury unreasonableness means "unreasonableness verging on absurdity" as observed by the House of Lords in Puhlhofer v. Hillingdon L.B.C (1986) 1 All ER 467.
40. In Nottinghamshire C.C. v. Secretary of State for the Environment, (1986) 1 All ER 199 Lord Scarman observed that "to challenge a decision of the Minister as unreasonable the applicant must establish by evidence that the decision was so absurd that he must have taken leave of his senses.".
41. We are of the opinion that Court should not readily strike down policy decisions on the ground that they are unconstitutional, rather every attempt should be made to uphold their constitutional validity, if legally possible. The courts should always hesitate to declare a statute or policy decision unconstitutional, unless it finds it clearly so, because invalidating a statute or policy decision is a grave step. Of the three organs of the State (the legislature, the executive and the judiciary) only the judiciary has the power to declare the Constitutional limits of all three. This great power should Therefore be exercised by the judiciary with the utmost humility and self restraint.
42. As observed by the Supreme Court in
43. One of the earliest scholarly treatments of the scope of judicial review is Prof. James Bradley Thayer''s article "The Origin and Scope of the American Doctrine of Constitutional Law", published in 1893 in the Harvard Law Review. This paper is a singularly important piece of American legal scholarship, if for no other reason than that Justices Holmes and Brandeis of the U.S. Supreme Court, among modern judges, carried its influence with them to the Bench, as also did Mr. Justice Frankfurter. Thayer, who was a Professor of Law at Harvard University, strongly urged that the Courts must be astute enough not to trench upon the proper powers of the other departments of Government, nor to confine their discretion. Full and free play must be allowed to "that wide margin of considerations which address themselves only to the practical judgment of a legislative body or the executive authorities". Moreover, every action of the other departments embodies an implicit decision on their part that it was within their Constitutional power to act as they did. The judiciary must accord utmost respect to this determination even though it be a tacit one. This meant for Thayer, and he attempted to prove that it had generally meant to the Courts, that a statute or a policy decision could be struck down as unconstitutional only "when those who have the right to make it have not merely made a mistake, but have a made a very clear one, so clear that it is not open to rational question". After all, the Constitution is not a legal document of the nature of a title deed or the like, to be read closely and construed with technical finality, but a complex charter of Government, looking to unforeseeable future exigencies. Most frequently, reasonable men will differ about its proper construction. The Constitution leaves open "a range of choice and judgment", and hence Constitutional construction "involves hospitality to large purposes, not merely textual exegesis''.
44. In Lochner v. New York (1905) 198 U.S 45, Mr. Justice Holmes, the celebrated Judge of the U.S. Supreme Court in his classic dissenting judgment pleaded for judicial tolerance of state legislative action even when the Court may disapprove of the State Policy. Similarly, in his dissenting judgment in Griswold v. Connecticut, 381 U.S 479, Mr. Justice Hugo Black of the U.S. Supreme Court warned that "unbounded judicial creativity would make this Court a day-to-day Constitutional Convention". Justice Frankfurter has pointed out that great judges have constantly admonished their brethren of the need for discipline in observing their limitations (see: Frankfurter''s "Some Reflections on the Reading of Statutes'').
45. Apart from the above, it is well settled that there is no fundamental right to the grant of license to do business of liquor. Trade in liquor is considered to be rest extra commercium inasmuch as the State while exercising its power of parting with its exclusive privilege to deal with liquor has a positive obligation to see to the public interest and the public welfare. The state has thus a right to prohibit every form of activity in relation to intoxicants vide
46. For the reasons given above these appeals are allowed. The impugned judgment is quashed and the writ petitions are dismissed.
