HC questions UT admn’s failure to stop cartels

Stating that restrictions have to be made applicable across board, bench asks administration to submit response by October 27

COURT NOTED THAT POLICY STIPULATES A SINGLE ENTITY CAN BE ALLOTED A MAXIMUM OF 10 LIQUOR VENDS

CHANDIGARH: The Punjab and Haryana high court has questioned the Chandigarh administration for its failure to stop cartelisation or trade monopoly in allotment of liquor vends in the excise policy for 2020-2021.

“..we are prima facie of the view that the action of the Chandigarh Administration in allotting more than 10 liquor vends to the same persons, who by formulating different companies applied for the tender process, is contrary to the purport and object to be achieved by clause 13 of the excise policy,” the bench of justice Jaswant Singh and justice Ashok Kumar Verma said during resumed hearing of a plea challenging the policy.

The plea alleges that the administration’s policy is leading to “complete cartelisation and monopoly” of certain individuals through their firms. The excise policy does not promote free trade, as it states that for any brand of foreign liquor there shall be only five wholesale licensees, who shall further sell liquor to all the retail licensees. It had argued that the UT should have capped the highest bid and draw of lots could have been introduced so that cartels may not jack up prices to bag contracts.

SAME GROUP GOT VENDS THROUGH 2 FIRMS

The court said that it has come to light that Bajaj Group has been allotted 15 liquor vends in the city, through two separate corporate entities: Bajaj Spirits Private Limited and Liquor World Venture

Private Limited. The directors of both the companies are same.

But excise officials have failed in performing their duties in complying with the conditions stipulated in clause 13, which says not more than one bid can be submitted by a company/firm/person for a particular licensing unit, and to curb the menace of cartelisation and monopolistic practices, a single person/entity is entitled for allotment of up to a maximum 10 vends, said the bench.

The court observed that this happened despite the fact that along with bids the firms were to submit photograph, proof, PAN card and list of all directors as with the registrar of companies.

“Once the directors running the company are same and still more than 10 liquor vends are allotted to the said persons, the purport and object to be achieved by imposing restriction under Clause 13 would be defeated,” adding that if persons are permitted to participate by formulating different entities, “we do not find any reason for imposing any restraint on any individual, as the same would be discriminatory in nature”.

The restrictions have to be made applicable across the board for everyone or none, the bench added, asking the UT administration to submit response to some issues framed by it by October 27.

The administration has been asked to address whether clause 13 conditions were violated as the department failed to check credentials of all the directors of firms, how it allowed single person/ entity to participate through artificial barrier of bidding through different firms and whether it did not amount to monopoly. It has also been asked to address if one person was allowed to bid through different entities, whether it did not defeat the purpose for which restrictions were imposed.