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Delhi HC refuses to stay tender notice for bids under new excise policy, seeks response from Delhi govt

The petition has been filed by one Pankaj Singh, a retail license holder under the the Delhi Excise Act, 2009, who intends to undertake liquor retail business in the capital.

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The Delhi High Court on Thursday sought response from the Delhi Government on yet another plea filed by a liquor vendor challenging the New Excise Policy announced in June this year.

The Bench, led by Chief Justice D.N. Patel and Justice Jyoti Singh, however, refused to grant any interim stay on the tender notice floated by the Government for bids for the grant of zonal retail licenses for the sale of liquor. 

The petition has been filed by one Pankaj Singh, a retail license holder under the the Delhi Excise Act, 2009, who intends to undertake liquor retail business in the capital.

Senior Counsel Darpan Wadhwa appeared on behalf of the petitioner and the Delhi Government was represented by Senior Advocates Dr Abhishek Singhvi and Rahul Mehra.

The matter is slated for September 24.

New Excise Policy divides Delhi into 32 zones, comprising 27 liquor vends each

Till recently, liquor sale in Delhi was regulated in terms of the Delhi Excise Rules, 2010. However, on February 5, 2021, the Delhi Government constituted a committee of Group of Ministers (GoM) under the Chairmanship of the Deputy Chief Minister Manish Sisodia, and comprising ministers Kailash Gehlot and Satyendra Jain, to finalize a new excise policy for Delhi for the year 2021-22. Subsequently, a notification dated May 25, 2021 was issued amending the Delhi Excise Rules, 2010, and the New Excise Policy was introduced by the Government in June this year. As per the new policy, Delhi is divided into 32 zones, comprising 27 liquor vends each, for the purpose of issuance of licenses. 

On June 28, 2021, the Delhi Government floated a tender, inviting electronic bids for grant of 32 zonal retail licenses for the year 2021-22, for sale of Indian and Foreign Liquor in the national capital, on the basis of the newly approved policy.
As 12 out of these 32 zones received only a single bid, the Delhi Government decided to invite a fresh tender for these 12 zones. Accordingly, on August 13, 2021, the Delhi Government issued notice inviting electronic bids for grant of 12 zonal licenses.

Senior Counsel Darpan Wadhwa, representing the petitioner, contended that the said tender is in violation of the New Excise Policy inasmuch as it provides only a 60-day period to a licensee to commence operations, while the new policy provides for a 90-day period for commencement of operations. 

Furthermore, the said tender allows a licensee to grant concession or discount on the MRP of liquor, in contravention to the Delhi Excise Rules, 2010, wherein sale of liquor below the MRP set by the Excise Commissioner is expressly barred.
In addition, he contended that the introduction of home delivery license for home delivery of liquor, in the amended rules, would impact the recovery of excise revenue promised by a zonal liquor retailer.

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The plea alleges that the Delhi Government did not disclose all the information necessary for a prospective bidder to assess the risks involved. “This has rendered the tender arbitrary, without application of mind, prejudicial to the interest of the Petitioner and prospective bidders, and also violative of Article 14 of the Constitution,” reads the plea.

In light of the above, the plea seeks quashing of the notice inviting tender dated August 13, 2021

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