Delayed liquor licence-fee instalments confer no entitlement to corresponding liquor supply or refund.

The petitioner, a liquor contractor, was the highest bidder for the Foreign Liquor Shop at New Kabadkhana, Bhopal, for the excise year 2009–2010, with a bid of ₹1,67,99,999. The licence was granted for 1 April 2009 to 31 March 2010, subject to payment of the annual licence fee in 24 fortnightly instalments.

The petitioner claimed that public protests and resistance at the allotted site prevented him from operating the shop and led him to request police protection and shifting of the shop. He also obtained an interim injunction in a civil suit permitting continuation of the shop at the allotted location.

The petitioner asserted that, although he ultimately deposited the entire bid amount, liquor worth only approximately ₹26.88 lakh was supplied, while liquor corresponding to approximately ₹1.41 crore was neither supplied nor refunded.

He further challenged the State’s decision to close the shop for the excise year 2010–2011 instead of renewing or shifting it.

The respondents relied on Clause 25.4 of the Excise Policy 2009–2010, under which liquor could not be released against delayed or deficient fortnightly instalments.

The petitioner sought quashing of the closure decision, renewal or shifting of the shop, and refund of ₹1,41,12,000 with interest, or, alternatively, supply of liquor against that amount.

1. Whether the petitioner was entitled to refund of the amount deposited towards the annual licence fee, or to supply of liquor against that amount, where the corresponding fortnightly instalments had allegedly been deposited belatedly or were deficient under Clause 25.4 of the Excise Policy 2009–2010?

2. Whether the petitioner was entitled to renewal or shifting of the Foreign Liquor Shop for the excise year 2010–2011, notwithstanding the State’s decision to close the shop on account of public objection?

3. Whether the State’s action in closing the shop and refusing the claimed reliefs was arbitrary, discriminatory, or otherwise amenable to interference under Article 226 of the Constitution?

The Court applied Clause 25.4 of the Excise Policy 2009–2010, which disentitled a liquor contractor from obtaining release of liquor corresponding to any fortnightly instalment that was paid late or was deficient.

It relied on State of Madhya Pradesh v. Lalit Jaggi, SLP (C) No. 14286 of 2006, for the principle that licence fee payable by a liquor contractor is consideration or rent for the State’s privilege of manufacturing and vending liquor, and is not the price or excise duty on liquor; the dispute is substantially contractual and governed by the licence conditions.

The Court also applied the principle that there is no fundamental or vested right to carry on trade in liquor, and that the State may regulate, restrict, or prohibit such trade in public interest, subject to constitutional and statutory limits.

Since the petitioner did not challenge Clause 25.4, relief contrary to that clause could not be granted.

The Court held that the petitioner had admittedly defaulted in making the fortnightly payments prescribed by the Excise Policy. Under Clause 25.4, the consequence of such delayed or deficient payment was that the petitioner could not obtain an NOC or release of liquor corresponding to the deficit amount; the respondents had therefore acted in accordance with the governing policy.

The Court rejected the petitioner’s reliance on the earlier decision in Rajendra Singh Wadhwa v. State of Madhya Pradesh, observing that the present policy contained the specific restriction in Clause 25.4, while the earlier policy did not.

Applying Lalit Jaggi, the Court further concluded that payment of licence fee did not create an entitlement to receive liquor of equivalent value, because the fee represented consideration for the State’s privilege and was not the price of liquor.

The petitioner also failed to produce documentary evidence establishing that local persons had actually prevented him from opening the shop, including any police complaint seeking protection.

By the time of adjudication, the licence period and the 2010–2011 excise year had long expired, rendering the claims for renewal, shifting, or quashing of the closure decision infructuous or incapable of being granted.

It held that the petitioner was not entitled to refund of ₹1,41,12,000 or to supply of liquor against that amount because the relevant instalments had not been paid within time and Clause 25.4 expressly barred release of liquor against delayed or deficient payments.

The claims for renewal or shifting of the shop could not be granted because the relevant licence periods had expired.

No sufficient proof of unlawful obstruction, arbitrariness, discrimination, or legal entitlement to the requested relief was established.