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Delhi High Court issues notice on plea challenging Delhi Government’s new excise policy

The Counsel representing the petitioners Sanyam Khetarpal submitted that according to the government, the policy has been formulated to discourage the formation of monopolies or cartels, but the impugned policy would, in fact, lead to cartelization as one entity would have control over one zone. “What will happen to small players,” stated Khetarpal.

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The Delhi High Court today has sought a response from the Delhi Government in a plea seeking quashing of the New Excise Policy formulated by the Delhi Government for the year 2021-2022.

The Bench of Chief Justice D.N. Patel and Justice Jyoti Singh, however, while issuing notice, refused to grant any interim relief of extension of the date for submission of the electronic bids.

The Counsel representing the petitioners Sanyam Khetarpal submitted that according to the government, the policy has been formulated to discourage the formation of monopolies or cartels, but the impugned policy would, in fact, lead to cartelization as one entity would have control over one zone. “What will happen to small players,” stated Khetarpal.

Upon this, the Bench stated that the policy is not drafted just to oust a single entity. The whole policy is meant for the public at large, and divisions are there for better administration.

Dr. Abhishek Singhvi, representing Delhi Government, urged the Court to fix one date for the Government to put in place a proper response in a batch of similar pleas, so that this ‘full-scale assault’ on the Government, in the form of similar writs being filed everyday by different market players, could be stopped.

The matter is slated for hearing on August 9’ 2021.

Filed through Advocates Sanyam Khetarpal and Narita Yadav, by Ashiana Towers and Promoters Ltd., the shop owners engaged in retail liquor vends in Delhi for the past 18 years and holding licenses issued by the Excise Commissioner in terms of Delhi Excise Rules, 2010.

The plea avers that 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. Pursuant to the report by the GoM, the new Excise Policy was introduced by the Delhi Government in June this year.

The plea further avers that on June 28’2021, pursuant to the newly approved policy, the Delhi Government floated a tender, inviting e-bids for grant of 32 zonal retail licenses for the year 2021-22 through e-tendering process in the form of L- 7Z/L-7V for sale of Indian and Foreign Liquor in the region of NCT of Delhi. To be eligible to participate in the bid, the applicant bidding for one zone is required to make an Earnest Money Deposit (EMD) of Rupees 30 Crores, and for one more zone, EMD of Rupees 60 Crores. As per the schedule of the tender, the submission of the e-bid will take place between 12th to 20th July 2021.

In addition, the plea also contends that as per the new policy, Delhi is divided into 32 zones, comprising 27 liquor vends each, for the purpose of issuance of licenses. The tender rule specifies that no individual entity can bid for more than two zones, thereby meaning that 54 shops will be in control of one entity, to the exclusion of others interested in the trade.

The plea states thus: “The objective of the policy is to ensure accountability on part of the licensee and to keep monopolies and cartels under check. However, a close look into the policy reveals that it only tends to create a monopoly in favor of certain persons.”

Also Read: Supreme Court adjourns plea seeking CBI probe into murder of minor girl in Odisha

In addition to seeking quashing of the New Excise Policy as being illegal, unfair, arbitrary, and violative of Delhi Excise Act, 2009, the plea also prays for quashing of tender notice dated June 28’2021 inviting e-bids for grant of a license, and restraining the government from taking any further action in furtherance of the tender notice.

A similar plea by Readymade Plaza India Pvt. Ltd., a group of retail liquor vendors running a business in Delhi for the last 15 years, is also listed for hearing on August 9’ 2021. 

The Bench of Justice Rekha Palli of the Delhi High Court, on July 5’2021, discarded the plea filed by Delhi Liquor Traders Association seeking direction to make the New Excise Policy for the year 2021-22 available in the public domain after the Government undertook to upload the said policy on the website by the end of that day.

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