### State possesses exclusive privilege to link liquor license renewals to district-wide and cluster participation thresholds.

The petitioners, existing liquor licensees in Rajasthan, challenged the constitutional validity of Clauses 2.2.6, 2.2.7, and 2.2.8 of the Rajasthan Excise & Temperance Policy 2025–2029.

The new policy introduced a "cluster" system (grouping 1–5 contiguous shops) and made the renewal of individual licenses conditional upon: (a) at least 70% of eligible licensees in a district opting for renewal, and (b) all shops within a specific cluster applying for renewal.

If these conditions were not met, the shops were liquidated through e-auction.

The petitioners, despite fulfilling individual eligibility and paying fees, had their renewal applications cancelled because other shops in their assigned clusters remained unrenewed or the district threshold was not met.

They alleged these clauses were arbitrary and coercive.

The Court applied the principle that trade in liquor is res extra commercium, and thus, a citizen has no fundamental right under Article 19(1)(g) to trade in intoxicants, as established in Khoday Distilleries Ltd. v. State of Karnataka.

It further relied on Section 37 of the Rajasthan Excise Act, 1950, which stipulates that no person has a claim to the renewal of a license.

The Court also invoked the doctrine of limited judicial review in policy matters, asserting that executive wisdom in fiscal and revenue-related regulations is generally immune from interference unless it suffers from "manifest arbitrariness."

Finally, the principle of estoppel was applied against petitioners who participated in the renewal process after accepting the policy's terms.

The Court reasoned that since the State holds an "exclusive privilege" over liquor, it has wide discretion to determine the method of settlement to optimize revenue and prevent illegal trade in "fallow areas."

The 70% district threshold and cluster-based requirements were deemed rational policy tools intended to ensure administrative stability and collective participation, rather than arbitrary hurdles.

The Court dismissed the argument of "economic coercion," noting that renewal is purely voluntary.

Critically, the Court found that the petitioners failed to provide empirical evidence of "hostile discrimination," noting that 6,420 out of 7,665 licensees had successfully opted for renewal under the same rules, which demonstrated general policy acceptance.

The Court emphasized that it cannot substitute its own wisdom for that of the executive in matters of revenue rationalization.

It ruled that there is no fundamental right to the renewal of a liquor license and that the cluster mechanism is a valid exercise of State regulatory power.

The Court further held that the petitioners were estopped from challenging the policy after having submitted renewal applications under its specific terms.

Consequently, the High Court dismissed the batch of writ petitions, upholding the validity of the Excise & Temperance Policy 2025–2029.