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Tuesday, July 14, 2020

Most contractors give up liquor licences, MP faces choice: Run vends or re-auction

A division bench on Thursday gave contractors three days to submit affidavits conveying willingness to run vends. The court said failure to do so will entail re-auction of the shops. The matter will be heard next on June 17.

Written by Milind Ghatwai | Bhopal | Published: June 7, 2020 1:45:16 am
liquor sale, madhya pradesh, madhya pradesh liquor sale, liquor sale license, Madhya Pradesh High Court  Bhopal, Indore, Jabalpur, Gwalior, Ujjain and Rewa are among the bigger cities where contractors are not ready to open shops. (Representational image) (Photo: Nirmal Harindran)

Two days after the Madhya Pradesh High Court asked liquor contractors to submit affidavits, informing if they are willing to run the vends, a majority of contractors have surrendered their licences. The development leaves the state government with two options — re-auction the vends or run them by itself.

Bhopal, Indore, Jabalpur, Gwalior, Ujjain and Rewa are among the bigger cities where contractors are not ready to open shops. The situation, they argue, has changed from when they won the bids in March to now when liquor sales are down and are unlikely to pick up.

A division bench on Thursday gave contractors three days to submit affidavits conveying willingness to run vends. The court said failure to do so will entail re-auction of the shops. The matter will be heard next on June 17.

Senior advocate Naman Nagrath said the main cities alone account for 50 per cent revenue from liquor sales. When smaller cities are considered, the licences surrendered add up to more than 70 per cent, worth roughly about Rs 7,200 crore of Rs 10,460 crore of state revenue from liquor sale. “As and when re-auction takes place, the government is not likely to recover more than

Rs 4,000 crore. The government should have considered the suggestion to reduce licence fee by about 25 per cent,’’ he said.

Excise Commissioner Rajeev Dubey said the government will not lose anything. In the event of re-auction fetching a lesser amount, the tender rules empower the government to recover the shortfall from the original licence holders, he said.

“It’s possible that we have to make some alternate arrangement for running the shops … But at the end of the year, we will recover the difference from the contractors who surrendered their licenses,’’ he said.

The bench has restrained the government from taking any action against liquor contractors during the pendency of the litigation. The lockdown was imposed on March 24, a week before the new licence period was to begin. The government asked licence holders to open shops in the first week of May but they refused, first citing the possibility of being held responsible for spreading Covid-19, and later seeking a reduction in licence fee.

On Saturday, the state constituted a group of ministers under chairmanship of Home Minister Narottam Mishra to take quick policy decisions in the interest of revenue while implementing the excise policy for 2020-21.

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