Licensing process and clarificatory amendment: blanket cancellation rejected, while retrospective clarification was upheld.

Strict compliance with the liquor licensing scheme was required under the Excise Act and Rules, but blanket cancellation of all licences was unsustainable because each licensee's eligibility and compliance had to be examined individually. The Court held that wholesale annulment could not stand without showing that the alleged irregularity pervaded the entire selection and that individual scrutiny was impracticable. It also treated the later deletion of the requirement to verify family members' criminal background as a bona fide clarificatory amendment, not a fresh substantive burden, and held it could operate retrospectively. The appeals were allowed and the cancellation set aside.

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Issues: (i) Whether the High Court was justified in directing cancellation of all licences on the footing that the selection process was vitiated for non-compliance with the Rules and the earlier directions of the Court; (ii) Whether the clarification deleting the words requiring verification of the family members' criminal background was valid and retrospective in effect.

Issue (i): Whether the High Court was justified in directing cancellation of all licences on the footing that the selection process was vitiated for non-compliance with the Rules and the earlier directions of the Court.

Analysis: The licensing scheme under the Chhattisgarh Excise Act, 1915 and the 2002 Rules was held to require strict compliance, informed by the public-health mandate of Article 47 of the Constitution of India. The Court reiterated that applicants had to satisfy the eligibility requirements under Rule 9, the scrutiny process under Rules 10 and 11 had to be meaningful, and the authorities were expected to verify documents and antecedents with due care. At the same time, the Court held that cancellation of all licences could not be sustained without examining the individual case of each licensee. The licensees were necessary parties, and the record did not justify treating the entire selection as a tainted mass so as to warrant en masse cancellation. The proper course was individual scrutiny of eligibility and compliance, not wholesale annulment.

Conclusion: The High Court's direction cancelling all licences was not sustainable, and the appellants succeeded on this issue.

Issue (ii): Whether the clarification deleting the words requiring verification of the family members' criminal background was valid and retrospective in effect.

Analysis: The Court held that the clarification issued in respect of Rule 9 was bona fide and explanatory. Since the reference to family members created an apparent inconsistency and was not intended to impose an unworkable requirement, the later notification was treated as a clarificatory measure rather than a fresh substantive burden. On that footing, the authorities were not required to verify the criminal antecedents of the family members of every applicant.

Conclusion: The clarification was valid and could operate retrospectively, and the objection on this score failed.

Final Conclusion: The appeals were allowed, the wholesale cancellation of licences was set aside, and the matter was resolved in favour of the appellants while emphasizing strict future compliance with the statutory scheme and the constitutional mandate of public health.

Ratio Decidendi: Where a licensing process is alleged to be vitiated, the Court will not sustain blanket cancellation unless the taint is shown to pervade the entire selection and individual scrutiny is impracticable; absent such a basis, each case must be tested on its own facts, and a clarificatory subordinate legislation may operate retrospectively if it merely removes an unintended ambiguity.

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