A Division Bench of the Madras High Court has set aside an order passed by a single judge of the court on January 31, 2022, directing the Tamil Nadu State Marketing Corporation (Tasmac) to close down all “so-called bars” attached to retail liquor shops across the State as law permitted only the Commissioner of Prohibition and not the marketing corporation to permit the use of a public space to consume liquor.
First Bench of Chief Justice S.V. Gangapurwala and Justice P.D. Audikesavalu set aside the order on the sole ground that the single judge had issued the direction in a case where Tasmac’s right to grant permission for bars was neither pleaded by any of the parties nor formed the subject matter of the writ petitions before him. Consequently, Tasmac too did not have an opportunity to defend itself before the judge, it said.
“It is made clear that no view has been expressed by this court on those aspects [related to Tasmac’s act of permitting customers to consume liquor in enclosures adjacent to some of its retail liquor shops], meaning that the challenge to the policy of the State in granting the privilege of running bars is left open,” the Division Bench said, disposing of a batch of appeals preferred by the corporation.
In his order, the single judge had said that the Tamil Nadu Prohibition Act, 1937, and the amendments made to it in 2003 permit Tasmac to only have a monopoly over wholesale and retail sale of liquor. They do not permit it to run “bars” either directly or indirectly and the power to grant licence for running bars was only with the Commissioner of Prohibition and Excise. However, the Division Bench said that the subject matter of the writ petitions before the single judge was only with respect to obtaining no-objection certificates (NOCs) from the owners of properties adjacent to liquor shops.
It agreed with Advocate-General R. Shunmugasundaram that those who want to participate in the tender to sell snacks and collect empty bottles need not produce such NOCs along with their bids.
It said the Tasmac was right in insisting that only the highest bidder would have to obtain an NOC within seven days of opening of the bids, failing which the second highest bidder would be given an opportunity to increase his bid amount and produce the NOC. “It will be unrealistic to expect the owner of the bar premises to grant NOC in writing to all potential tenderers before submitting bids,” it added.
