Supreme Court Sets Aside Punjab & Haryana High Court's Interim Stay on Chandigarh Liquor Vend Allotments

The Supreme Court on Tuesday (April 1) set aside an interim order passed by the Punjab and Haryana High Court restraining the implementation of liquor vend allotments under the Chandigarh Excise Policy 2025-2026.

A bench of Justice Dipankar Datta and Justice Manmohan observed that the High Court had not recorded any reasons while granting the interim relief.

“If indeed the High Court had found a prima facie case for grant of interim relief and the other conditions, viz. balance of convenience/inconvenience and sufferance of irreparable loss and injury, were also satisfied so as to call for grant of such relief, we would have expected the High Court to at least record some reason(s), howsoever brief, evincing application of mind to the contentions urged on behalf of the writ petitioners in support of their prayer. Unfortunately, the High Court has recorded no such satisfaction. It is only on this short ground that we feel inclined to set aside that part of the impugned order of the High Court restraining implementation of allotments made under the Excise Policy 2025-2026. Ordered accordingly”

The Court set aside the High Court's order dated March 26, 2025 directing status quo on the liquor vends for the year 2025-26 until April 3, 2025. This order resulted in the freezing of 97 liquor vends allotted through e-auction from April 1, 2025. The Union Territory of Chandigarh as well as the allottees challenged this order in the present appeal.

The court directed the parties to appear before the High Court on April 3, 2025.

The Supreme Court held that at the final hearing stage, the allottees could not claim any equity in their favor, and the High Court has to decide the matter based on the merits.

If the High Court cannot not dispose of the petitions by the end of April 2025, it may consider interim relief, but any such relief must be supported by cogent reasons, the Supreme Court said, keeping all contentions on merit open for arguments before the High Court.

Background

The case involves three pleas filed by liquor companies before the Punjab and Haryana High Court seeking to quash the tendering process and the allotment of 87 out of 97 vends to bidders allegedly controlled by a single family.

The petitioners claimed that the bidding process was manipulated, violating Clause 14 (Mode of Allotment) of the policy, which prohibits issuing more than ten licenses to an entity, including entities with common partners, directors, or associates. The petitioners alleged that the family and its associates effectively monopolized the liquor trade in Chandigarh.

The petition filed by Vault Liquor Private Limited claimed that cartelization had occurred and that 12 cartel members had refrained from cross-bidding, causing a loss to the state exchequer. It alleged that the authorities were proceeding with the allotment process despite evidence of rigging and cartelization.

The High Court allowed the petitioners to amend their plea to challenge the constitutionality of the Chandigarh Excise Policy 2025-2026 and granted ad-interim stay on the allotment till April 3, 2025.

Solicitor General Tushar Mehta represented the appellant-administration.

Senior Advocates Dr. Abhishek Manu Singhvi and Aryaman Sundaram along with Advocate-on-Record Pranav Krishna and advocates Varun Dewan, Naresh Jain, Jaigopal Yadav, R.S. Lakshman, Yadwinder Singh represented the appellants-allottees.

Senior Advocates Mukul Rohatgi, PS Patwalia and Puneet Bali represented the respondent-liquor companies.

Case no. – SLP (C) Nos. 8919-8921/2025

Case Title – Union Territory of Chandigarh & Ors. Etc. v. M/S. Kler Wines & Ors. Etc.

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