Excise policy and liquor licences upheld where delay, third-party rights, and no Article 14 arbitrariness were shown.

Unexplained delay in challenging an excise policy, after the State and private parties had altered their position and created third-party rights, justified refusal of writ relief on the ground of laches. The policy and licences were not invalid for non-compliance with the Excise Rules or the Industries (Development and Regulation) Act, 1951, because the relevant rule permitted disposal of licences in the manner directed by the State Government and the statutory objection was not supported on the record. The policy was also not arbitrary or discriminatory under Article 14, as it followed examination of pollution, production, modernisation, fiscal factors and site suitability, and the State retained wide discretion in liquor licensing.

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Issues: (i) Whether the writ petitions were liable to be rejected on the ground of inordinate delay and laches after the State and the private respondents had altered their position and created third-party rights. (ii) Whether the impugned policy decision and the grant of licences to the existing contractors were invalid for want of compliance with the Excise Rules or the Industries (Development and Regulation) Act, 1951. (iii) Whether the policy decision was arbitrary or discriminatory and therefore violative of Article 14 of the Constitution.

Issue (i): Whether the writ petitions were liable to be rejected on the ground of inordinate delay and laches after the State and the private respondents had altered their position and created third-party rights.

Analysis: The challenge was brought long after the policy decision, after letters of intent had been issued, agreements executed, land acquired, buildings constructed, and plant and machinery ordered and installed. The petitioners had knowledge, or at least constructive knowledge, of the change in policy, yet allowed the private respondents to proceed at great expense. In writ jurisdiction, unexplained delay coupled with the creation of third-party rights is a material ground for refusing relief.

Conclusion: The challenge was barred by laches, and the petitioners were disentitled to relief.

Issue (ii): Whether the impugned policy decision and the grant of licences to the existing contractors were invalid for want of compliance with the Excise Rules or the Industries (Development and Regulation) Act, 1951.

Analysis: Rule XXII permitted disposal of licences by tender, auction, fixed fee, or such other manner as the State Government directed. The policy decision itself was a sufficient governmental direction within that rule, and no further rule amendment was required to implement the policy. Section 14(c) of the M.P. Excise Act, 1915 authorized licensing of the construction and working of distilleries. The objection based on Section 11 of the Industries (Development and Regulation) Act, 1951 was not established on the pleadings and, in any event, was unsupported by the record.

Conclusion: The policy decision was not invalid on the ground of non-compliance with the Excise Rules or the Industries (Development and Regulation) Act, 1951.

Issue (iii): Whether the policy decision was arbitrary or discriminatory and therefore violative of Article 14 of the Constitution.

Analysis: The decision was taken after prolonged examination of pollution, inadequate production, modernization needs, fiscal considerations, and the need to construct new distilleries at suitable sites. No contractor was excluded from consideration in principle, since the policy preserved the ability of similarly situated persons to apply on the same basis. In matters of liquor licensing and economic policy, the State is entitled to a wide area of discretion, and interference is warranted only where the action is plainly arbitrary, irrational, or mala fide.

Conclusion: The policy decision did not offend Article 14.

Final Conclusion: The impugned policy decision was upheld in its entirety, and the writ petitions were not maintainable in view of delay, third-party prejudice, and the absence of constitutional infirmity.

Ratio Decidendi: Where a challenged executive policy in the liquor trade is the product of informed deliberation, does not exclude similarly placed persons from consideration in principle, and has already induced substantial third-party alteration of position, writ relief may be refused for laches and the policy will not be struck down unless it is shown to be plainly arbitrary, discriminatory, or mala fide.

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