Liquor price cuts were promoting drinking, Delhi govt tells HC

Appearing for the Delhi govt, senior advocate Abhishek Manu Singhvi told justice V Kameswar Rao that ‘a lot of malpractices in the guise of discounts were going on.’

The Delhi government on Thursday told the high court that it ended discounts on liquor as this was promoting drinking in the city and creating a monopoly in the market.

People stand in a queue outside a liquor store in Delhi. (ANI Photo)

“A lot of malpractices in the guise of discounts were going on. Two of them I have highlighted is promoting of drinking beyond a reasonable limit and monopolising,” senior advocate Abhishek Manu Singhvi, appearing for the Delhi government told justice V Kameswar Rao.

The case was filed by new licence holders who complained that the decision to do away with discounts was arbitrary and also against Delhi’s new excise policy.

Singhvi told the court that “Delhi could not become a city for promoting drunkenness through the measure of discount”. The senior counsel submitted that a few months after the launch of the new excise policy, the government found out that discounts or rebates on liquor was being “misused over and over again”, giving rise to malpractices. “This (discounts) was being misused over and over again by attracting and alluring people by unreasonable and strange discounting policy,” Singhvi told the court.

He also said discounts are also being used as a measure of monopolising”.

“We were generally not against discounts but when we found the policy working in the last few months, we found that by giving huge discounts, there was an attempt by few, with deep pockets who can afford, to monopolise the system -- then they would increase the price. It does not cross the boundaries of perversity,” he asserted.

The Delhi government’s new excise policy allowed retailers in the city, for the first time, to sell liquor at discounts or with offers. Some stores in the city reported incidents of crowding, as vends offered steep discounts. The withdrawal of discounts (the order regarding which was issued on February 28) came at a time when Delhi is headed for crucial elections to the three municipal corporations next month and the Bharatiya Janata Party (BJP), which currently governs the civic bodies, has targeted the new excise policy.

Singhvi said that the city government would file a detailed affidavit highlighting the reasons for its decision.

Justice Rao asked the city government to file their counter affidavit by Saturday and posted the matter for Monday.

He refused to interfere with the matter at this stage.

The petitioners have contended that their sales have fallen due to the decision to do away with discounts and that people are rushing to neighbouring cities for cheap liquor, causing them losses of crores on a daily basis.

In one of the pleas filed by Bhagwati Transformer Corporation through advocate Sanjay Abbott, the liquor licence holders contended that the decision of the government takes away their right to take business decisions with regards to discounts/ concessions/ rebate which the petitioners were otherwise empowered to take under the new excise policy and tender documents.

Senior advocate Rahul Mehra, also appearing for Delhi government, dismissed claims that petitioners were suffering losses of crores, and urged the court to ask them (liquor licence holders) to produce their sale records.

Senior advocates Mukul Rohatgi and Sajan Poovayya, who represented several petitioners, argued the order was passed by the concerned authority without any jurisdiction and was perverse and arbitrary.

“Revenue was (being) earned for the State. Suddenly one day without any warning, an order is issued without any jurisdiction saying that there are crowds so discounts must stop... Sales are down by 75%,” Rohatgi argued.