Liquor licence renewal and policy-based refusal require uniform enforcement and rational classification, not selective denial of renewal.

Renewal of FL-3 liquor licences could not be denied solely on the basis of a prohibition policy where the State showed no concrete, uniform steps to implement that policy consistently. The Court noted that restricting these licences while allowing increased import of arrack created inconsistency, and that hoteliers licensed to promote tourism were similarly placed to other licensees. A distinction between earlier licence holders and those granted licences in 1992-93 was found to lack a rational nexus with the stated object, because the rules did not draw a renewal/fresh grant distinction. Selective denial of renewal on that record was therefore unsustainable, and protection continued until a merits-based decision or uniform enforcement of the policy.

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Issues: (i) Whether the rejection of the appellants' applications for renewal of FL-3 licences for 1993-94 solely on the basis of the Government's policy decision dated 9 November 1992 was legally justified.

Analysis: The applications for renewal were rejected on the footing that the Government had decided not to issue licences in view of its prohibition policy. The Court found that the State had not placed material showing any concrete and consistent steps to enforce that policy uniformly. It noted the inconsistency between curtailing these licences and permitting increased import of arrack, and also observed that the appellants, being hoteliers licensed to promote tourism, stood on the same footing as other licensees. The proposed distinction between licence holders operating earlier and those licensed in 1992-93 was held not to furnish a valid basis for differential treatment, since the rules did not make a distinction between renewal and fresh grant and the classification lacked a rational nexus with the stated object.

Conclusion: The rejection of renewal was not sustained, and the appellants were entitled to protection against interference until their applications were decided on merits without reliance on the policy decision dated 9 November 1992 or until the policy was enforced uniformly.

Final Conclusion: The impugned rejection of renewal could not be upheld on the record before the Court, and interim protection was granted to the appellants pending a merits-based decision in accordance with law.

Ratio Decidendi: A licensing decision said to be based on a policy objective must rest on a rational and uniformly applied classification having a real nexus with that objective; arbitrary or inconsistent implementation cannot justify selective denial of renewal.

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