New Excise Policy Not Consistent With Its Proposed Goal Of Avoiding Syndication Of Distributors: Petitioner Tells Delhi High Court

The Delhi High Court on Thursday commenced hearing a batch of petitions challenging Delhi Government's New Excise Policy 2021-22.

The Division Bench of Chief Justice DN Patel and Justice Jyoti Singh today heard Advocate Parag P Tripathi representing a wholesale licensee Anita Choudhary.

Choudhary has primarily opposed one of the clauses under the new policy which provides that such wholesale distributors who have a minimum five years experience in liquor trade in any State of India are eligible to apply for L-1 wholesale liquor licence in Delhi.

Choudhary, though meets the other criteria of minimum Rs. 150 crore turnover every year for 3 consecutive financial year, has an experience of only three years which is insufficient under the new policy.

"The 5 years limitation is completely arbitrary. There is no rationale behind this stipulation," Tripathi submitted adding that there was no such criteria in the earlier policy.

To this, the Bench responded,

"There is bound to be a cut-off line. You want the High Court to stay policy conditions? Instead of five years we should say three years? Then someone will come and say why three years, make it zero. Then someone will come and say why zero, there should be experience."

Tripathi also pointed out that the new excise policy seeks to ensure equitable distribution of liquor vends across Delhi and avoid syndicates leading to overcharging and brand influencing. For this purpose, it provides that manufacturers of liquors/ IMFL can't be wholesalers, so as to prevent commonalty of economic interest.

L1 wholesaler will have to have a monopoly contract with manufacturer, Tripathi submitted.

However, he added, the policy also enables agents of manufacturers to obtain L1 wholesale licenses.

"Once you allow agents of manufacturers to obtain wholesale licenses, the whole business of avoiding syndication is gone to winds. Manufacturers will obviously contract with their...This is completely inconsistent. This is end of competition," Tripathi submitted.

At this juncture, the Bench opined that even if this provision is removed, there is no certainty that brand influencing will erode.

"The consumer will ask the retailer which item is better. The retailer will always give an opinion that so and so brand people are buying. So where is the guarantee?"

The Bench will now continue hearing the pleas on 30th November.

Case Title: Anita Choudhary v. GNCTD (and other connected matters)