M J Antony: Bringing order to liquor licensing

OUT OF COURT

Distribution of licences to sell liquor is perceived to have close links with politics and crime. In law, trade in liquor is said to be res extra commercium or outside commerce, like betting, gambling and allied activities.

A citizen has no fundamental right to deal in a noxious item like liquor. The state alone has this privilege. It can part with it for a price, which is loosely called excise duty.

A reading of the Supreme Court judgement in Ashok Lanka vs Rishi Dixit delivered last month would indicate that not only is the trade noxious, but even the process of distribution of the state privilege tend to be so. The Chhattisgarh government invited applications for licences in February this year. It received 2.64 lakh applications out of which some 3,000 were rejected.

When the selection process began, a lawyer moved a public interest petition challenging it. Soon, more rejected candidates joined him. The question whether these could be called public interest petitions could itself lead to a tipsy debate. However, the high court accepted the objections raised in the petitions and quashed the whole selection process.

First, the high court upheld the use of the computer for the selection process, which itself was a hot issue. But it found serious flaws in the selection. The excise commissioner prescribed an application format in which no information required under the rules was sought from the candidates about themselves.

The district level committees did not scrutinise the eligibility conditions of the candidates either. According to the rules, only people who fulfilled the eligibility criteria could file applications. In this case, the saving grace was that the state collected Rs 77 crore from the applicants and that need not be refunded.

Some of the information which should have been filed by the candidates is quite relevant. They are obliged to disclose whether they as well as their family members possessed "good moral character" and there was no criminal record against them.

They should not have been convicted of any offence punishable under the excise or other laws for any cognisable or non-bailable offence. That certificate must be issued by the superintendent of police (SP) of the district. Moreover, they should be solvent and not a defaulter of government dues. Although these are elementary, this exercise was not done.

When the state appealed to the Supreme Court, some more salacious facts came to light. The rejected candidates brought a detailed chart that showed a sample of the mass fraud committed by the applicants. It was titled "Examples of same address of different fake selected applicants" in four districts.

The court remarked in its judgement: "It would appear that different persons belonging to different communities had filed different applications showing the same address. Even persons having the same name had filed more than one application."

Regarding the main complaint that no scrutiny of the eligibility of the candidates was undertaken, the Supreme Court said that the candidates had not been asked to submit affidavits in the prescribed format.

"It is not expected of the statutory functionaries to ask the selected candidates to comply with the requirements orally. It is beyond our comprehension as to why such post haste action was taken by the state," the judgement lamented.

The court therefore ordered the restart of the entire selection process by following the rules, especially regarding the eligibility of the candidates. Even the details given in their affidavits should be verified. It could not be presumed that the averments are true.

Severely criticising the government for its lapses, the Supreme Court pointed out that "the state undoubtedly has the exclusive privilege to deal in liquor but it has also to be borne in mind that it has a constitutional and legal duty to safeguard public interest and public health."

The judgement ended with a 12-point direction to straighten out the whole process. Even the chief secretary and the SP were involved in the revision. Thus, the curtains have apparently fallen on this year's brawl for licences.