M J Antony: Addicted to litigation

OUT OF COURT

Changing policies on liquor licencing leads all parties to stagger towards the courts.

Litigation cannot be far behind when liquor licences are being distributed by the government. Trade in alcohol is a state monopoly and no citizen has a fundamental right to carry on this business. The Constitution directs the state to set sight on prohibition in the interest of public health and for raising the standard of living of people (Article 47). In practice, there are few commercial activities that have seen the convergence of false morality, political and financial corruption as the manufacture and sale of alcohol. Government policies are changed routinely to suit the times and challenged in the courts as often. Three recent judgements of the Supreme Court indicate the stink raised by such policy decisions and their implementation.

The judgement delivered last week by the Supreme Court in Kuldeep Singh vs Government of Delhi showed the discriminatory approach towards applicants for vendor licences. There were so many applicants that the scheme was closed. However, it was declared that pending applications would be considered. Then there was a huge public outcry against the excise policy. The Cabinet met and decided that no fresh licences would be issued. Despite that, applications were processed and some licences were issued. This led to litigation in the Delhi High Court and the Supreme Court. The failed applicants alleged discrimination against them and a "pick and choose" policy by the government. The latter contended that no one has a fundamental right to trade in liquor and the judiciary should not interfere in government policy.

Though the Supreme Court conceded that the state had a right to adopt a policy decision or change it, the manner in which it is done should be fair and reasonable. In this case, the Cabinet took a decision not to issue fresh licences, but still the excise officials continued to process the applications. The Supreme Court underlined that although dealing in liquor is not a fundamental right, the right to equality guaranteed under Article 14 is still applicable to those who had sought licences. The court also noted that despite the policy decision, a number of people were given licences. Following this observation, the government promised to cancel those licences.

The distribution of licences in Chhattisgarh was even more intriguing, as described in the Supreme Court judgement in Ashok Lenka vs Rishi Dikshit. This was the second round of litigation in the Apex court. Pursuant to notices inviting tender, 2.65 lakh applications were received. Litigation was inevitable as usual. The high court last year cancelled all licences. On appeal, the Supreme Court asked the district level committees to consider the matter relating to the grant of licences. In the second round, the district level committees themselves faced charges of irregularities.

For instance, several people have given the same address in their applications. Residence certificates issued by incompetent people have been produced. Some have merely declared that they were "resident of Raipur" or "resident of Saja" without any address. Age certificates have been obtained from dental or orthopaedic surgeons in several cases, instead of producing school-leaving certificates. In a few cases, employees of liquor contractors have been shown as applicants, though they could not have taken the burden of the liquor trade. Some applicants were reportedly facing criminal trials. The English version of the application sought details of the criminal background of the family members of the applicants. In the Hindi version, this query was dropped.

Commenting on this state of affairs, the Supreme Court said: "We must express our dismay that despite our directions, the applications had not been scrutinised minutely which should have been done. The state of Chhattisgarh, we are not very sure, whether was aware of its constitutional duties and functions. It seem to have been more concerned with raising of revenue."

In the third case, State of Maharashtra vs Nagpur Distillers, the liquor traders almost got a booty until the Supreme Court intervened. They had to pay a fee for transporting liquor. The rule was challenged in the Mumbai High Court. It stayed the recovery of the fee, based on an earlier judgement. The state appealed to the Supreme Court. It set aside the high court order.

"The high court should have paid a little more attention to the interests of the state and the consequences arising out of its order staying the payment of the fee merely on an undertaking by the licencee to pay it in case at a future point of time he is found liable to pay the same," the judgement said. "It is trite that government cannot run on undertakings." The licencee was directed to pay half the fee until the case was decided. Though the constitutional goal is prohibition, it has been found to be impractical so far. Therefore, the states found that the next best course is to create revenue from the "noxious" trade. They have found from experience that even this is not an easy course. Thus, both the liquor traders and the political parties have acquired an addiction for litigation.