 "Madras HC presses TASMAC for guidelines on procurement of IMFL")
The Madras High Court has asked the Tamil Nadu State Marketing Corporation (TASMAC), the sole distributor of Indian Made Foreign Liquor (IMFL) in the State, to come out with necessary guidelines for issuing orders and indents and asked it to make all brands available for the customers.
An order issued by Justice V Dhanapalan said that the choice of the consumer would vary based on the brand quality of the liquor and the retail outlets should have all the brands as per the requirement of the customer.
Besides, TASMAC has to be fair in its approach and should have a guideline for issuing orders and indents, which help them to serve the consumer based on their choice.
The order was issued in a petition filed by Golden Vats Pvt Ltd, a Chennai-based company into manufacturing and selling of Indian Made Foreign Spirits. The company has been manufacturing the IMFS from the State from March, 2011 in the brands of ordinary, medium and premium by giving employment to about 600 persons both directly and indirectly.
While it has been supplying liquor to TASMAC, the petitioner said that the Corporation, from July 2013 "with a malafide intension to favour certain IMFL manufacturer's of its choice," suddenly changed its purchase pattern and drastically reduced issuing of Indent orders to the petitioner company.
It also argued that while the manufacturer's cost was fixed by TASMAC with a marginal profit for all brands, it has fixed retail price which is 600 per cent more on the manufacturer's price and is making huge profits on the IMFL sales. On the other hand, as of today the manufacturing cost has exceeded the price fixed by the TASMAC thereby the ordinary and medium brands were a loss to the petitioner. "Due to placing of orders of premium brands, the petitioner was in a position to bear the loss," it said.
According to the amended provisions of the Tamil Nadu Prohibition Act 1937, TASMAC was statutorily empowered with exclusive privilege of selling, by retail, IMFL for the whole of State of Tamil Nadu and no other person shall be entitled to any privilege of selling, by retail IMFL in whole or any part of the State.
TASMAC alone was entitled to open as many as shops for carrying on the business of sale, by retail, of IMFL and fix the number of shops depending upon the population of locality, needs of locality and other factors. Today there are 6800 shops established by the Corporation, it added.
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There are 11 IMFL license holders who manufacture IMF spirits and supply to the TASMAC including United Spirits Ltd, Mohan Breweries & Distilleries Ltd, Shiva Distilleries Ltd, Empee Distilleries Ltd, . Southern Agrifurane Industries Ltd (SAFIL), Midas Golden Distilleries Private Ltd, Elite Distilleries Pvt Ltd, SNJ Distilleries Pvt Ltd, KALS Distilleries Pvt Ltd, Golden Vats Pvt Ltd, Imperial Spirits and Wine Pvt Ltd.
"Prior to July 2013, when other IMFL manufacturers were placed with 20 per cent of supply of indent order on the total monthly purchase indent however the petitioner was sidelined and singled out and only 10 per cent of total monthly indent (release order) was placed right from the day of placing indent order," it alleged. It added that however, the previous sales record show that its premium brands has been on demand in retail.
"However the fact remains that there were no rationale or basis for placing supply and indent orders with various IMFL manufacturers right from the beginning. It is submitted that there were no fixed guidelines and orders are placed according to the whims and fancies of the Chairman of TASMAC, who is headed by a political personality to favour IMFL manufacturer's of his choice," it alleged.
The company, in the writ petition, requested that there should be a-la-carte system and consumer who is the master of his choice should be allowed to purchase according to his wishes. However, this autocratic style of thrusting the brands on consumers for extraneous considerations amounts to abuse & misuse of powers which cannot be countenanced in law.