Mandatory affidavit and eligibility scrutiny for liquor licences cannot be diluted by circulars or unexpressed retrospective amendments.

Eligibility verification for retail liquor licences was treated as a condition precedent under the Chhattisgarh Excise Settlement of Licences for Retail Sale of Country/Foreign Liquor Rules, 2002, and the prescribed affidavit had to be filed strictly at the application stage. A circular issued by the Excise Commissioner could not override or dilute the Rules, and the later amendment to Rule 8 was not expressed to be retrospective, so it could not validate a completed non-compliant selection. The scrutiny of successful applicants was found inadequate, requiring fresh verification of eligibility, consideration of objections, and accountability of the committee and supervisory officers, while existing licences were allowed to continue temporarily pending that exercise.

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Issues: (i) Whether Rule 9 of the Chhattisgarh Excise Settlement of Licences for Retail Sale of Country/Foreign Liquor Rules, 2002 required the applicant to file the prescribed affidavit at the application stage and whether that requirement was mandatory; (ii) whether the circular issued by the Commissioner of Excise and the subsequent amendment to Rule 8 could dilute or retrospectively alter the statutory requirements governing the selection process; (iii) whether the selection already undertaken was vitiated for want of proper scrutiny of eligibility conditions and, if so, what consequential relief was warranted.

Issue (i): Whether Rule 9 of the Chhattisgarh Excise Settlement of Licences for Retail Sale of Country/Foreign Liquor Rules, 2002 required the applicant to file the prescribed affidavit at the application stage and whether that requirement was mandatory.

Analysis: Rule 9 began with a mandatory command that the applicant had to fulfil the stated eligibility conditions for obtaining a licence. The scheme of the Rules treated eligibility as a condition precedent to grant of licence, and the affidavit requirement was tied to verification of suitability, antecedents, criminal background, premises, and absence of government dues. The later cancellation provision also showed that the affidavit was intended to be a substantive safeguard and not a mere formality. The statutory language, read with the object of regulating liquor trade in the public interest, indicated that filing of the affidavit was required in strict compliance with the Rules.

Conclusion: Rule 9 was mandatory and the prescribed affidavit had to be filed in accordance with the statutory requirement.

Issue (ii): Whether the circular issued by the Commissioner of Excise and the subsequent amendment to Rule 8 could dilute or retrospectively alter the statutory requirements governing the selection process.

Analysis: The Commissioner of Excise could operate only within the four corners of the Act and the Rules. A circular could not override or dispense with statutory requirements. The amendment to Rule 8, although expressed as applicable to the 2005-06 settlement, did not state that it was retrospective. In the absence of an express indication, and especially after the selection process had already concluded, the amendment could not be treated as retrospectively validating an earlier departure from the Rules. The statutory framework could not be read to permit post hoc validation of an illegal or non-compliant selection process.

Conclusion: The circular could not dilute the Rules, and the amendment to Rule 8 was not retrospectively effective so as to validate the completed selection process.

Issue (iii): Whether the selection already undertaken was vitiated for want of proper scrutiny of eligibility conditions and, if so, what consequential relief was warranted.

Analysis: The scrutiny undertaken by the authorities was found to be inadequate, and the applications were not examined in the manner contemplated by the Rules. At the same time, the successful candidates had participated in the process and licences had already been granted in the interim. The Court balanced the illegality in the procedure with the practical situation created by subsequent events and directed a fresh scrutiny of successful candidates, filing and verification of affidavits, consideration of objections, and personal responsibility of the committee members and supervisory officers. The existing licences were allowed to continue temporarily, subject to the further scrutiny and decision.

Conclusion: The selection process required fresh scrutiny and could not stand as a completed and unqualified exercise, but interim continuance of the selected candidates was permitted subject to compliance and further decision.

Final Conclusion: The statutory safeguards governing liquor licences were held to be mandatory, the administrative circular could not override the Rules, and the purported amendment did not retrospectively cure the defect; however, instead of nullifying all interim licences outright, the Court ordered a fresh and strict scrutiny of eligibility and allowed temporary continuation pending that exercise.

Ratio Decidendi: Where a regulatory statute makes eligibility and affidavit-based verification conditions precedent to the grant of a liquor licence, those safeguards must be strictly complied with and cannot be diluted by an executive circular or retrospectively validated by an unexpressed amendment.

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