Vendors challenge HC order on liquor discounts in Delhi

On March 8, a single judge had refused to halt the state government’s decision to withdraw discounts on liquor in the national capital.

New Delhi: The Delhi high court on Tuesday issued notice to the Delhi government on a plea challenging the single judge order which had refused to interfere with the city government’s decision to do away with the discounts.

People stand before liquor shop in Delhi on February 16, after local vendors announced huge discounts. (Rahul Singh/ANI)

A bench of Justices Mukta Gupta and Neena Bansal Krishna asked the government to respond on the appeal following which the matter was posted for further hearing on Monday.

On March 8, a single judge had refused to halt the state government’s decision to withdraw discounts on liquor in the national capital, saying that prima facie, grant of rebate has resulted in a steep increase in the sales in February, 2022 as compared to the sales in December, 2021 in certain zones.

It had also said that “to sell a bottle of liquor free of cost is not healthy competition, but anti competitive, which is clearly impermissible”.

The interim order had come on a bunch of pleas by the liquor license holders against the decision of the Delhi government of February 28 to do away with discounts on liquor.

On Tuesday, senior advocate Mukul Rohtagi, counsel for the petitioner, argued that the order issued by the Excise Commissioner was arbitrary as he has no power to issue such an order amending the policy. He has no power to change the policy but to implement it.

He further argued that the vendors have a right to give discounts according to the new excise policy and the government can’t change the rule when the order has been initiated.

“It started in November. If you want to change the rules, then return my licence fee. Two weeks have gone since the order passed. Sell is 50 per cent down”,” he added.

The petitioners have contended that their sales have dipped due to the decision to do away with discounts and people are rushing to the neighbouring cities for cheap liquor, thus 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 license holders contended that the decision of the government completely 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.

Earlier, the Delhi government had told the high court that the licensees were misusing the discount provision in its excise policy, to offer 50% or more discounts, which would distort market forces, create monopoly and promote alcoholism.

The government also told the court that Delhi has become an “export centre” for cheap liquor to various states in the country. It had also said that “Delhi cannot become a city for promoting drunkenness through the measure of discount”.

The government further said it cannot rule out the possibility of illicit hoarding, black marketing and interstate movement of liquor. It also said the consumption pattern cannot increase manifold overnight as a person will not start drinking double their usual capacity.

The Delhi government had said liquor shops had sold 24.5 million litres of liquor in February 2022 — almost double the average monthly sale of 13.2 million liters in 2019-20 — a spike, which it attributed to heavy discounts.