Delhi HC refuses to stay govt order prohibiting discount on price of liquor

New Delhi [India], March 8 : The Delhi High Court on Tuesday dismissed the applications seeking a stay of the Delhi Government order prohibiting a discount on the price of liquor in the national capital.
The Vendors moved applications seeking a stay on the order. Ten liquor vendors had filed petitions challenging the said order.
Justice V Kameswar Rao observed, "This Court is of the view that the prayer as made for by the petitioners in these applications cannot be granted. The respondents are granted time to file detailed counter-affidavits into the writ petitions within one week. Rejoinder within one week thereafter. The applications are dismissed. The aforesaid is only a prima facie view.
Justice Rao further observed, "I agree with the submission of Dr Singhvi in as much as, any stay of the impugned order shall lead to the distortions in the market and the subsequent consequences."
The petitioners had challenged the order of February 28, 2022, issued by Commissioner (Excise) of the Department of Excise, Entertainment and Luxury Tax, Government of Delhi.
The said order had directed that the L7Z licencees shall not give concession, rebate, or discount on the Maximum Retail Price ( MRP) of liquor and to strictly abide by Rule 54(3) of the Delhi Excise Rules, 2010.
Senior Counsels Dr Abhishek Manu Singhvi and Rahul Mehra appeared for Delhi Government had justified the said order issued by the Commissioner (Excise) in the exercise of his power and function under Section 4 of the Delhi Excise Act, 2009 which empowers the Commissioner to regulate, control and monitor the manufacture, possession, import, export, transport, sale and consumption of liquor and other intoxicants. He has the power to ensure social wellbeing through education and promote responsible drinking.
They submitted that in terms of Rule 50 of the Rules of 2010, every licencee is bound to comply with the order issued by the Excise Commissioner from time to time and the impugned order in one of such direction which is required to be followed.
They further submitted that regulation of liquor trade is of paramount importance due to its injurious health effects and also adverse social impact due to its injurious health effects and also adverse social impact emanating from excessive and irresponsible drinking.
In the month of February 2022, some of the retail L7Z licencees started giving huge discounts/offers on the MRP of liquor including 'buy one get one' and 'buy one get two' etc. counsel for the Delhi Government argued.
They argued that the current phase of discounts being offered by some of the licensees is against the mandate and intent of the excise Act and the new Excise Policy for promoting healthy competition and consumer choice in the market, as a few licensees, for short term monetary gains, started offering discounts, which was leading to distortions in the market.
They argued the publicity done by licencees resulted in huge crowds gathering outside liquor vends leading to law and order issues, particularly, in the backdrop of the pandemic which necessitates the following of social distancing norms. Some people had also started buying liquor in bulk for hoarding and interstate movement of liquor.
On the other hand, senior Advocate Mukul Rohtagi appearing one of the petitioners had argued that the Excise Policy and the tender expressly permit the grant of discount/rebate/concession by the retail licencees.
He also referred to related provisions of Excise policy and Tender. He submitted that the grant of discount is based on the principles of the free market and fair competition in operation. Advocate Tanmaya Mehta had also made similar arguments stating that earlier there was no power to grant discounts. Advocate Mehta had contended the said order was in violation of Article 14 of the Constitution of India.
The Court observed, "This court is of the prima facie view that in the facts of this case and position of the Rules, Article 14 shall not come into play.
Petitions are listed for hearing on 25 March 2022.