Withdrawing liquor discounts the responsible thing to do: Delhi govt to HC

The submission came on a bunch of pleas by owners of liquor stores who had challenged a February 28 order by the Delhi government in which it prohibited hefty discounts on liquor since it was leading to crowding at the stores and unhealthy market practices

The Delhi government on Monday told the Delhi high court that it had to step as a “responsible agreement” by ordering withdrawal of discounts by liquor vends after it came to its notice that cheap liquor was being hoarded, and sent to neighbouring cities in UP and Haryana.

Delhi government’s senior counsels said that since cheapest liquor was being sold in Delhi under the new excise policy, some people had started “bootlegging”. (Getty Images/iStockphoto)

The submission came on a bunch of pleas by owners of liquor stores who had challenged a February 28 order by the Delhi government in which it prohibited hefty discounts on liquor since it was leading to crowding at the stores and unhealthy market practices.

The court said that it would pronounce an interim order on Tuesday.

Senior advocates Abhishek Manu Singhvi and Rahul Mehra, for the Delhi government, said that this was a responsible government showing extreme restraint. The senior counsels said that since cheapest liquor was being sold in Delhi under the new excise policy, some people had started “bootlegging”.

Senior advocates Mukul Rohatgi and Sajan Poovayya, who represented several petitioners, argued that the Delhi government order was passed without any jurisdiction and was “perverse and arbitrary”. Poovayya contended that once the tender is called for and licences are issued, it is not open for the authorities to make changes in the tender conditions in that excise year unless there is a change in the law.

“When an order is passed by the commissioner, it has to be tested on merits of what the order contains,” he said, adding that the moment there is an MRP system, the dealers have the freedom to give discounts under the excise policy.

Earlier, in its affidavit, the government had said that the city liquor shops had sold 245.08 lakh litres of liquor in February 2022, a spike, which it had attributed to the rebates in the liquor.

It had said that the increase in sales due to discounting cannot be logically attributed to only increase in consumption as the average sales during the discounting period is showing a significant spike and the chances of illicit hoarding, black marketing and interstate movement of liquor cannot be ruled out.

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.

Last week, the government, while opposing the pleas, said that it has ended discounts on liquor as it was promoting drinking in the city beyond permissible limits and creating a monopoly in the market.

Senior advocate Singhvi had said that “Delhi could not become a city for promoting drunkenness through the measure of discount”.