No Fundamental Right To Carry On Liquor Business, But State Mustn’t Discriminate Between Qualified Liquor Suppliers: Chhattisgarh HC [Read Order]

‘The policy for procurement should be framed by the State Government.’

The Chhattisgarh High Court has held that a citizen has no fundamental right to carry-on any trade or business in liquor, as trade in liquor has been regarded as res extra commercium.

However, Justice Sanjay K. Agrawal observed that, once the State permits trade and business in liquor, it cannot discriminate between person or suppliers who are qualified to carry-on trade or business.

Two manufacturers/sellers of foreign liquor had approached the high court challenging the state policy on the process of procurement of liquor in the State, contending that it is arbitrary, non-transparent and has conferred unguided and unbridled discretion on the authorities.

The bench, referring to Supreme Court rulings, observed that there is no fundamental right under Article 19(1)(g) of the Constitution of India to trade in liquor. The court also observed that, in the case of trade in liquor, the State has following three options: (a) To completely prohibit the trade in liquor, (b) To create a monopoly for itself over manufacture, sale, possession or distribution of alcohol, and (c) To allow private individuals to trade into liquor.

The court then said: “Once the State permits trade or business in liquor, it cannot discriminate between the persons/suppliers who are qualified to carry on trade or business. In other words, the State is under an obligation to provide level playing field to all the players to participate in the trade in liquor.”

The court also observed that the policy for procurement should be framed by the State Government. The Court disposed of the writ petitions with these observations:

• A citizen has no fundamental right to carry-on any trade or business in liquor or beverage, as trade in liquor has been regarded as res extra commercium, but once the State permits to trade and business in liquor, it cannot discriminate between person or suppliers who are qualified to carry-on trade or business.


• Section 18-A(1) of the Act of 1915 was introduced with effect from 21-4-2017 in the Act of 1915 giving power to the State Government to grant the exclusive right for sale of liquor to any Corporation wholly owned and controlled by the State Government. Section 18-A(2) of the Act of 1915 was also introduced giving power and jurisdiction subject to the rules made by the State Government to grant necessary license to the Corporation owned and controlled by the State Government. The Rules of 2017 have also been framed by the State Government in this regard in its rule-making power under Section 62(d) of the Act of 1915.


• The State Government has constituted respondent No.3, a Corporation namely, Chhattisgarh State Marketing Corporation Limited; though sale of liquor has been handed over to the said Corporation, but no order general or special has been passed by the State Government giving exclusive right for sale of liquor to the Corporation as provided under Section 18-A(1) of the Act of 1915. Likewise, the Excise Commissioner has also not granted any license to respondent No.3 Corporation as mandated under Section 18-A(2) of the Act of 1915, which is clearly impermissible in law. The State Government and thereafter, the Excise Commissioner, both, have failed to perform their statutory function envisaged under Section 18-A(1) & 18-A(2) of the Act of 1915.


• The petitioners have placed sufficient data on record to show that they are being discriminated by respondent No.3 in the procurement of liquor for want of a fair and transparent policy for procurement of liquor.


• The State Government has not come out on record with a clear and transparent policy of procurement of liquor except relying upon the website designed by NIC and the Rules of 2017 stating that it has resulted in a neutral non-apprehending and transparent procedure for sale of liquor while adopting the return and stand taken by respondent No.3 Corporation and the said Corporation has changed its stand regarding procurement of liquor during the hearing of these petitions.


• The officers of respondents No.1 and 2 are holding an additional charge and working as officers with respondent No.3 on various posts such as General Manager, Deputy General Manager, Manager, Deputy Manager, Assistant Manager, Excise Constable etc. Even the Joint Secretary of the Government is working as Working Director in respondent No.3, which is in conflict with the principle of law laid down in Rajendra Shankar Shukla (supra).

The court then directed the state to frame necessary guidelines to procure liquor as to the issuance of Orders and Indents to the manufacturers/petitioners, to maintain equality in the procurement of liquor.