Delhi High Court allows liquor sellers to participate in tendering process and guarantees full refund of amount in case of discrepancy
The Delhi High Court allowed a retail liquor seller to participate in the bidding process and refund the deposit he made, in the event that he is not satisfied with the retail price set by the excise commissioner.
Judicial Vipin Sanghi and Judge Jasmeet Singh on Tuesday, during a plea hearing challenging the terms and conditions of the tender notice issued by the Delhi government on the basis of the new policy of excise for 2021-2022, allowed time for the Delhi government, among others, to file a detailed counter-affidavit.
The judiciary observed: “It is stated by Dr Singhvi and Rahul Mehra, lead counsel for the defendant, on instructions, that as regards the petitioner, in case the petitioner is not satisfied with the fixing of the MRP by the commissioner and wishes to withdraw from the tender procedure within three days of the fixing of the average sale price, the defendants reimburse the entire deposit paid by the applicant in respect of the offer . “
The case was brought before the bench of Chief Justice DN Patel and Justice Jyoti Singh; however, as the same did not meet for the day, he was entered before the magistracy headed by Judge Sanghi.
The Claimant was represented by Senior Advisers Rajiv Nayar and Sandeep Sethi, while the Government of Delhi was represented by Senior Advisers Abhishek Manu Singhvi and Rahul Mehra.
Mr Nayar informed the court that the Delhi government had failed to provide criteria for the maximum retail price, which, according to the terms of the tender, was to be subsequently set by the Excise Commissioner. This makes it uncertain for an interested bidder to estimate its profit margin and to decide whether it would be possible to participate in the tendering process.
“You have to know the rules of the game before the bidding starts,” he said.
Mr Sethi argued that the exercise of retail pricing by the Excise Commissioner as a result of the tendering process depends solely on the wisdom of the latter, who is not bound by the contributions provided by bidders.
“I cannot dispute his fixation… The court will say that you made the deal on the basis. When there were no criteria, you did not insist on any criteria and you submitted to the setting of no criteria… You cannot complain today ”, declared Mr. Sethi, following on from his arguments.
In contrast, Dr Singhvi argued that a coordinated bench of the Delhi High Court refused to grant interim relief in a batch of similar cases listed before it.
The Delhi government, in its counter affidavit filed pursuant to the previous order, stated that under the terms of the tender, once the tender process is completed, licensees will have two weeks to submit their comments regarding the retail price.
With that, the bench said that the conditions of the tender leave everything in doubt and in this light, stressed: “You look at it from the point of view of a businessman with whom you want to make a huge commitment. You want an EMD of Rs 30 crore, apart from the participation fee of Rs 10 lakh, then you want it to commit. Once you have his neck in your hand, now you say we will determine. So some Babu will determine this. Is this the way businesses operate? “
Dr Singhvi responded that the determination is transparent because the license holder has the opportunity to make suggestions; and keeping in mind these suggestions as well as the prices in neighboring states, the Excise Commissioner determines the price. It is therefore a much more extensive and inclusive participatory process.
The judiciary, however, was not satisfied with this submission and called it an “arbitrary” exercise, on the grounds that a businessman will not engage in such an important engagement without knowing exactly where he would end up. .
Mr. Mehra argued that an impression is given as if it is arbitrary, when in reality it is not. He argued that the process is expected to increase revenues by over Rs 2,000 crore, which has shaken the status quo for many people and is the reason such pleas are being filed in court.
He further argued that the pricing by the Excise Commissioner is not something new, it happens year after year. The petition, he argued, is an attempt to block the whole process at the last minute.
Further, he informed the court that Delhi imports alcohol from other places as there is no manufacturing unit in Delhi.
In accordance with the policy, the lowest price for any manufacturing unit within the bandwidth of neighboring states would be the price at which manufacturers would sell to retailers. “It’s a policy that is completely pro retailer and pro consumer,” he added.
The judiciary, not satisfied with the bids advanced, said: “If you are so convinced that your conditions are very good and people will bid wholeheartedly because they are standing on a solid foundation; and if, in your opinion, this tender will be successful in this way … therefore, you declare that you will return the EMD in case, after the price has been determined by the commissioner, the bidder is not satisfied. The Chamber, however, refused to extend the deadline for submitting electronic tenders for the tender.
Dr Singhvi has agreed to reimburse the EMD as long as it is limited to this particular petitioner. The case is scheduled for August 27.
On the previous date, the judiciary ordered that the case be brought before the bench led by the Chief Justice upon presentation by Dr Singhvi as a batch of similar pleas challenging not only the new excise policy, but also the The tender in question, is pending before the bench of Chief Justice DN Patel and Judge Jyoti Singh.
The petition was filed by Robin Choudhary through lawyer Medhavi Singh. The plea sought to determine the criteria for setting the MRP for alcohol under the new tendering regime, and not to give effect to the call for tenders published on June 28, 2021 until the setting of alcohol MRP criteria.
The plea said: “The petitioner wishing to enter the fray for the bidding process, after reading the policy, 2021 was surprised to learn that the bidding and the policy, 2021 did not failed to comply with the mandatory step of publishing the criteria for setting the MRP of various categories / brands of alcohol in accordance with Rule 54 (1) of the Delhi Excise Rules, 2010.
“In the interest of fair play and transparency on the part of the respondent state, it is only reasonable and logical that each tenderer has all the criteria / formulas / financial breakdowns before submitting the tender. ‘offer in order to allow a potential bidder like the petitioner in this case to assess the commercial viability of their offer, whether or not to bid and prepare a viable offer after obtaining concrete figures / data / prices from each brand which will be available for sale once the new regime comes into effect. “
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Until recently, the sale of alcohol in Delhi was regulated by the Delhi Excise Rules, 2010. However, on February 5, the Delhi government established a Committee of Ministers (GoM) under the chairmanship of the Deputy Chief Minister Manish Sisodia, and composed of Ministers Kailash Gehlot and Satyendra Jain, to finalize a new excise policy for Delhi for the year 2021-2022. Subsequently, a notification dated May 25, 2021 was issued to amend Delhi’s excise rules, 2010. According to the GoM report, the new excise policy was introduced by the Delhi government in June of this year.
Under the new policy, Delhi is divided into 32 zones, each comprising 27 alcohol sales, for licensing purposes. On June 28, the Delhi government launched a tender, inviting electronic bids for the granting of 32 zonal retail licenses for 2021-2022 through an electronic tendering process. in the form of L-7Z / L-7V for the sale of Indian and foreign liquor to NCT area of Delhi, based on the newly approved policy.
To be eligible to participate in the offer, the candidate submitting for one zone must make a deposit (EMD) of Rs 30 crore, and for an additional zone, an EMD of Rs 60 crore. In accordance with the schedule of the call for tenders, the submission of the electronic offer was to take place between 12 and 20 July 2021.