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        Central Excise

        2006 (7) TMI 612 - SC - Central Excise

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        Liquor licensing policy can change before grant; pending applicants gain no vested right or enforceable legitimate expectation. In liquor licensing, an applicant does not acquire a vested, accrued, or enforceable legitimate expectation merely by filing an application, making ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Liquor licensing policy can change before grant; pending applicants gain no vested right or enforceable legitimate expectation.

                          In liquor licensing, an applicant does not acquire a vested, accrued, or enforceable legitimate expectation merely by filing an application, making investments in anticipation, or relying on an earlier policy. The State may alter, vary, or withdraw the policy before grant of licence, and the controlling policy is the one in force on the date of grant. Article 14 cannot be used to compel continuation of an earlier scheme or to claim parity with irregular or illegal grants made to others. The applicants therefore had no enforceable right to insist on L-52 licences after the policy change and closure of the scheme.




                          Issues: (i) Whether the applicants for L-52 liquor licences acquired any vested or accrued right, or a legitimate expectation, to compel grant of licences on the basis of the earlier policy and pending applications. (ii) Whether rejection of the applications after the policy change and closure of the scheme was invalid for want of equality, fairness, or consistency in state action.

                          Issue (i): Whether the applicants for L-52 liquor licences acquired any vested or accrued right, or a legitimate expectation, to compel grant of licences on the basis of the earlier policy and pending applications.

                          Analysis: The grant of a liquor licence lies within the exclusive domain of the State, and a person applying for such a licence does not acquire a fundamental right to trade in liquor. Mere filing of applications, investment made in anticipation, or a time frame mentioned in correspondence does not create an accrued or vested right. The relevant policy could be altered, varied, or withdrawn before the grant of licence, and the applicable policy was the one in force on the date of grant. The doctrine of legitimate expectation was held inapplicable because the advertisement itself reserved to the competent authority the power to accept or reject applications without assigning reasons, and the larger public interest and statutory control under Article 47 governed the field.

                          Conclusion: No vested, accrued, or enforceable legitimate expectation arose in favour of the applicants.

                          Issue (ii): Whether rejection of the applications after the policy change and closure of the scheme was invalid for want of equality, fairness, or consistency in state action.

                          Analysis: Although Article 14 applies to state action in liquor trade, equality cannot be invoked to perpetuate illegality or to compel the State to continue an earlier course contrary to a valid policy decision. The Court found that the State had changed its policy and had the power to do so, and that licences granted to others after the stated cutoff could not confer a right on the appellants to insist on similar treatment. The irregular processing of some other applications did not legalize the appellants' claim, and the proper remedy, if any, lay against those irregular grants, not in directing grant of fresh licences contrary to the subsisting policy.

                          Conclusion: The rejection was not invalid on Article 14 grounds, and the appellants could not claim parity with any illegal or irregular grants made to others.

                          Final Conclusion: The appeals failed because the applicants had no enforceable right to obtain liquor licences after the policy change, and the State was entitled to decline further grants under the revised policy framework.

                          Ratio Decidendi: In liquor licensing, an applicant acquires no vested right or legitimate expectation merely by applying under an earlier policy, and Article 14 cannot be used to demand parity with an illegal or inconsistent grant made to others when the State has validly changed its policy.


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