Bihar liquor ban: SC gives time till July 31 to companies to dispose stock

Liquor manufacturers from Bihar today got an extension of two more months till July 31 from the Supreme Court for disposing of their old stocks of alcoholic beverages worth over Rs 200 crore outside the state.

Earlier, the court had extended till May 31 the deadline of April 30 for disposing of old stocks, including raw material, fixed by the Nitish Kumar government which had imposed a ban on liquor in the state from April one last year. A vacation bench of Justices A K Sikri and Deepak Gupta took note of the submission of senior advocate Kapil Sibal, representing the Confederation of Indian Alcoholic Beverage Companies, that the firms would be incurring huge losses if they are not allowed to dispose of their existing stocks of alcoholic beverages outside Bihar.

The state government opposed the demand for extension of time, saying the firms were indulging in illegal liquor trade. "If they are engaging in illegal trade, then why don't you (state) check them? Do you think that once the stocks are cleared, there would be no illegal trade," the bench remarked. It, however, made clear to liquor firms that the deadline of July 31 would not be extended under any condition.

The confederation, on May 24, had moved the apex court for extension of May 31 deadline. The apex court had on March 31 granted time till May 31 to these companies to dispose of the old stocks and directed them to follow the resolution passed by the Bihar government with regard to disposal of stocks following the imposition of prohibition in the state.

The confederation, in its fresh plea, has said it was not possible to dispose of the old stocks worth over Rs 200 crore in such a short time as due procedure is to be followed for either destroying or exporting the stocks. It had said that the stock was lying in the ware houses of companies and the godowns of Bihar State Beverage Corporation (BSBCL) which needed to exported to other states or destroyed.

Bihar government which has prohibited consumption, stocking and sale of liquor in the state had on March 30, passed a resolution by which it has allowed the companies to export their old stocks to other states. The state government had granted time to export the excisable and non-excisable articles till April 30, after which they will not be able to do so.

On October 7, 2016, the apex court had stayed the operation of Patna High Court judgement quashing the state's law banning sale and consumption of all types of liquor, saying liquor and fundamental rights "do not go together".

Bihar government has challenged the high court verdict of September 30, 2016, which had quashed the notification banning consumption and sale of liquor in the state. However, after the law was set aside, Bihar government had come out with a new law banning sale and consumption of liquor which was notified on October 2, 2016. It had notified the Bihar Prohibition and Excise Act, 2016 to ensure that the ban on sale and consumption of alcohol including Indian Made Foreign Liquor (IMFL) as well spiced and domestic liquor, continued in the state.

While assailing the September 30, 2016 high court verdict, the state government had urged the apex court to decide whether the state can impose absolute prohibition on distribution and consumption of liquor and whether an individual can claim the right to consume liquor as his or her fundamental right under the Constitution. It had claimed that as a consequence of the high court order, the state government's effort to bring in complete prohibition on liquor, in performance of its constitutional obligations, has been frustrated.

The high court had on September 30, 2016 quashed the notification banning consumption and sale of alcohol in the state, saying it was ultra vires to the Constitution. The order was passed on a batch of petitions filed by the Liquor Trade Association and others, challenging the liquor law which had stringent penal provisions.

Soon thereafter, the Bihar government brought in the new law banning liquor after including harsher provisions like arrest of all adults in a house where contraband was found. The Grand Secular Alliance government in Bihar had first banned manufacture, trade, sale and consumption of country- made liquor since April 1, 2016, but later imposed a blanket ban on all types of liquor, including foreign liquor, in the state.