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Breaking: Madras High Court order directing closure of TASMAC/liquor shops in Tamil Nadu amid Lockdown challenged in Supreme Court

Earlier the Tamil Nadu government had already moved the top court against the High Court's directions to include Aadhaar number in liquor sale bill and mandating cashless transactions for such sale.

Meera Emmanuel

The Tamil Nadu Government has moved the Supreme Court challenging the Madras High Court's order to close TASMAC/liquor vending outlets in the State amid the COVID-19 lockdown.

In the appeal filed today, the Tamil Nadu State Marketing Corporation (TASMAC) has submitted that the net effect of the Madras High Court's order is a "complete and indefinite standstill of the sale of liquor in the State leading to grave losses to the State’s revenue and commercial activity in the State."

This order has been challenged as factually untenable and legally unsustainable given that,

  • the Supreme Court itself has declined to entertain a plea for the total ban on the sale of liquor as the same is a policy matter within the domain of State.

  • the State has reasons to believe that the entire batch of Writ Petitions if not some have been filed by vested private interest, so has to make enormous commercial gains, from the unfortunate situation.

The Madras High Court had ordered the closure of liquor vending outlets on Friday evening, a day after it initially declined to intervene on a plea urging that they remain closed during the lockdown.

The TASMAC has argued that this closure order was passed on a misinterpretation of an order of the Supreme Court on Friday, wherein it had urged the State governments to consider non-direct sale including online sale/home delivery of liquor. The TASMAC contends that the Supreme Court had thereby, "recognised that States have a broad margin of power to determine whether and how to effect sales of liquor in this lockdown period."

Therefore, the TASMAC argues that the Madras High Court's March 8 order "is a clear case of judicial overreach and is not sustainable in light of the Supreme Court Order."

The High Court's Friday order was passed after the Court was appraised of large-scale violations of the guidelines issued by the State as well as the High Court on May 7 to be followed during the sale of alcohol during this time.

Apart from the precautionary directions concerning social distancing, sanitisation etc. issued by the State, on May 7 the High Court had also issued guidelines concerning, inter alia,

  • limits of alcohol purchase per person per day,

  • a bar on cash payments save for those without online payment facilities and;

  • a direction that the bill of sale include the name, Aadhar number and address of the customer.

Following this order, the Tamil Nadu Government had approached the Supreme Court in appeal challenging the High Court's directions qua mandatory cashless payments and the inclusion of Aadhaar number in the bill of sale.

Before the Supreme Court, the Tamil Nadu Governmnet raised concern that the mandatory inclusion of the customer's Aadhaar number in the bill of sale would amount to a violation of the right to privacy.

Further, it is pointed out that such a procedure may also delay the time it takes to make the sale of alcohol per person and contribute to overcrowding, thereby also increasing the risks of spreading the COVID-19 infection.

An objection has also been raised to the High Court's direction to make cashless transactions the norm for alcohol sale. In this regard, the Tamil Nadu Government has raised objection that there can be no prohibition on cash payment. It is added that there are practical difficulties to implementing a cashless regime for alcohol sale overnight.

It has been pointed out that the process may require amendments in law and the issuance of tenders. In this regard, the State Government also says that it was already in the process of issuing such tenders before the COVID-19 lockdown was imposed.

All the same, it is stated that the process is bound to take some time to ensure that a digital payment option is available for around 5,800 liquor vending outlets in Tamil Nadu.

In any case, the Tamil Nadu government asserts that cash payment cannot be completely prohibited and that even if digital payment facilities are made available, it can only remain an option.

While this appeal was pending, the Madras High Court had yesterday ordered the closure of all liquor outlets in the State until the lockdown is lifted, after noting that the precautionary directions issued for liquor sale "have been thrown into air."

The Court added that it is open to the State and the TASMAC to resort to only home delivery of the liquor by indirect/online sale during this lockdown period.

The State Government has now also challenged this order of closure as well before the Supreme Court. It asserts, inter alia,

"The extent of judicial overreach in the present case will have the effect of stultifying a major commercial activity in the State and it is salient that in no other state, where liquor is being sold (with the exception of perhaps Maharashtra where the COVID-19 figures are 3-4 times that of Tamil Nadu), are the sales being carried out exclusively through online means and that this is in fact an add-on to sales through physical retail outlets."
TASMAC in its SLP

It argues that the "the Impugned Judgment has encouraged commercial opportunism from the private entities", while referring to an application moved by a Fintech company called ‘HIP Bar Private Ltd’, which had "prayed that they be permitted to intervene to propose alternatives to opening of the TASMAC liquor shops to the public in the form of technology assisted home delivery."

The State adds that, "its (HIP Bar's) capability as a home delivery coordinator is unknown and untested at best and it is not scheduled systems provider of the State", while "e-payment and home delivery call for immense logistical coordination, supply chain management."

TASMAC contends that this would warrant time and manpower, especially in the present COVID-18 situation, "thus all the more requiring close scrutiny through the State’s bidding process."

Over and above these concerns, the State-owned entity has challenged the Madras High Court ruling as disproportionate, "when considered against the fact that that the State had made elaborate bandobast arrangements for crowd control."

Wherever there was overcrowding, prompt action was taken by Police, it is submitted. Further, it is added that TASMAC has also stopped sales at 12 such shops where overcrowding was reported.

Arguing that the High Court ought not to have passed its closure order on unsubstantiated media reports, TASMAC has now urged the Supreme Court to set aside the ruling.

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