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Retail liquor vendors move Delhi High Court against Delhi Government’s News Excise Policy

Senior Advocate Mukul Rohatgi appearing for the petitioners association submitted that the government alleges that the policy has been formulated to discourage the formation of the monopolies or cartels, but the impugned policy would, in fact, lead to cartelization as Delhi will now be controlled by 16 people as opposed to earlier 850 people in the past 20 years

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The Delhi High Court today has sought the response of the Delhi Government in a plea filed by retail liquor vendors seeking quashing of the New Excise Policy formulated by the Delhi Government for 2021-2022 alleging it violates their fundamental rights. 

Issuing notice, the Bench of Chief Justice D.N. Patel and Justice Jyoti Singh, refused to grant any interim relief sought by Senior Advocate Mukul Rohatgi, appearing for petitioners association “Readymade Plaza India Pvt Ltd”, that the bids not be finalized without the leave of the court.

Rohatgi submitted that the government alleges that the policy has been formulated to discourage the formation of monopolies or cartels, but the impugned policy would lead to cartelization as Delhi will now be controlled by 16 people as opposed to earlier 850 people in the past 20 years. The matter will now be heard on August 9, 2021.

The petition, filed through Advocate Arun Khatri, by the shop owners engaged in retail liquor vends in Delhi for the past 15 years, having licenses issued in terms of Delhi Excise Rules, 2010.

The plea avers that till recently, liquor sale in Delhi was regulated by the Delhi Excise Rules, 2010. However, the Delhi Government introduced the New Excise Policy for 2021-22 in June this year on the basis of the report by the committee of Group of Ministers (GoM) under the Chairmanship of Deputy Chief Minister Manish Sisodia and comprising ministers Kailash Gehlot and Satyendra Jain. Pursuant to the GoM report, a notification dated May 25, 2021, was issued amending the Delhi Excise Rules, 2010. 

As per the new policy, Delhi is divided into 32 zones, having 9-10 wards each, for the purpose of issuance of licenses. Furthermore, a new category of zonal license L-7Z has also been introduced, whereby holders of these licenses shall run retail vends. The plea alleges that the scheme of the new excise policy, wherein one L-7Z license is granted for each zone and mandating running of 18 retail vends by the license holder would eliminate existing vendors. In addition, the minimum reserve price for one zone license is fixed for around Rs 200 crore, which would bankrupt existing retail vendors.

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 2021-22 through e-tendering process in the form of L-7Z/ L-7V for sale of Indian and Foreign Liquor in the NCT of Delhi. As per the schedule of the tender, the submission of the e-bid will take place between July 12 and 20.

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In this regard, the plea prays quashing of the New Excise Policy, as also the impugned notification dated May 25, 2021. Furthermore, the plea also seeks setting aside of notice dated June 28, 2021 inviting tender on ground of it being illegal, unfair, unreasonable, violative and ultravires of Delhi Excise Act, 2009, as also Article 14 and 19(1)(g) of the Constitution.

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 2021-22 available in public domain after the Government undertook to upload the policy on the website by the end of that day.

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