Som Distilleries PVT LTD vs. The State Madhy Pradesh

Held

The Court partly allowed the writ petitions. Regarding the rejection of renewal applications for the petitioners' licenses, the Court quashed the impugned order dated 18.06.2026 passed by the Excise Commissioner and directed the renewal of licenses (D-1, FL-9 for Som Distilleries Pvt Ltd; B-3, FL-9, FL-9A for Som Distilleries & Breweries Ltd) within 15 days. The Court found the rejection of renewal applications to be unjustified. However, the Court dismissed the challenge to the tender process and the issuance of supply orders to private respondents. The Court reasoned that at the time of the tender process, the petitioners' licenses were either under suspension or at the stage of non-renewal, and the use of terms like 'live' or 'working license' did not alter the fact that they lacked the necessary license to obtain a work order. The Court held that it would not be advisable to set aside the entire tender process as no disqualification was alleged against other bidders. The petitioners were granted liberty to claim damages/losses from the State Government for any malafide actions. The Court awarded costs of Rs. 1,00,000.00 to each petitioner payable by the Government of M.P.

Facts

The petitioners, Som Distilleries Pvt Ltd and Som Distilleries & Breweries Ltd, challenged orders dated 12.06.2026 and 18.06.2026 passed by the Excise Commissioner, Madhya Pradesh. These orders stemmed from a criminal conviction of certain individuals, including company personnel, in Sessions Trial No. 23/2023. The petitioners themselves were not accused or convicted. Following the conviction, the Excise Commissioner issued show-cause notices for license cancellation and later suspended the petitioners' licenses. Subsequently, tenders for country liquor supply were issued with altered conditions, allegedly to debar the petitioners. The petitioners challenged the suspension and the tender conditions, with previous interim orders providing some relief. The licensing year 2025-26 had expired, rendering the challenge to the suspension order infructuous, but renewal applications for 2026-27 were to be considered independently.

Key Issues

1. Whether the Excise Commissioner was justified in issuing orders dated 12.06.2026 and 18.06.2026, which included the rejection of renewal applications for the petitioners' licenses, based on the conviction of certain individuals in Sessions Trial No. 23/2023, despite the petitioners not being accused or convicted as corporate entities? The petitioner argued that the orders were arbitrary and malafide, especially considering their long operational history and substantial revenue contribution. They contended that the convictions were of individuals and not the companies, and that their licenses had been renewed for subsequent periods. The State argued that the convictions warranted action under the Excise Act. 2. Whether the tender process, including the conditions introduced in the NITs dated 15.03.2026 and 12.06.2026, and subsequent corrigendum, was arbitrary and designed to oust the petitioners from participation? The petitioner argued that the conditions, such as requiring a 'live' or 'working' distillery license at the time of tender issuance or submission, were specifically introduced to prevent them from bidding, especially after their licenses were suspended or renewal was in question. They claimed this resulted in financial loss to the state. The State contended that the petitioners did not possess the requisite licenses to participate in the tender process.