M J Antony: Prohibition hangovers

In the absence of uniform policy on liquor licences, government and traders engage in legal rows

If the constitutional directive principle to bring about "prohibition of consumption of intoxicating drinks" is literally followed, it has been found from experience that it will create an underworld, brewing its own concoction of social and economic vices. On the other hand, if there are no restrictions on the trade, lamp posts in the city will be used more for back support than for light.

The Supreme Court has taken a middle path. It has maintained that the trade is "outside commerce" (res extra commercium), such as tobacco, lottery, betting and other activities conducted in the dark. The government grants a limited privilege to conduct business in such commercial activities that are on the edge of morality. It can control them in public interest and to protect health. But regulation of liquor trade, reeking in political miasma, black money and crime is not easy. After every season when the state declares its policy for distribution of licences, there is a legal brawl at the courts' gates. The judiciary has to tidy up a cocktail of heady questions.

The latest instance comes from Kerala, which leads in liquor consumption in the country, boosted by its youth. The government amended two rules to curb alcoholism, which affected three-star hotels with bars. Only hotels with four stars and above were allowed to have such licence. And no new bars will be opened where there is already one within a certain distance. The question divided the high court judges. The Supreme Court took yet another view. It upheld the star hotel rule but struck down the distance rule (State of Kerala vs B Surendra Das).

The state government which earns Rs 7,000 crore annually from the trade has its own depots and shops. It justifies its role in the name of tourism and regulation. However, its record has not been satisfactory. The Comptroller and Auditor General, while auditing the state excise department, found that licences were issued to hotels with poor hygiene standards, which did not abide by the statutory working hours and sold alcohol even on dry days. There have been agitations in villages against the setting up of new outlets.

This is typical of most states. On the one hand, the governments want to raise revenue from this trade (and fill party coffers), and on the other, they have to swear by constitutional and Gandhian principles. This balancing act ends up giving the policy contortionist looks. The court has often criticised governments for irreconcilable stands. Recently, the Patna High Court remarked that the Bihar government's licensing policy was to generate revenue by "acting as Shylock and claiming its pound of flesh" (United Breweries vs Bihar Beverage Corporation).

Aspirants for licences are no better. In one Supreme Court case, it was found that there were 265,000 applications for tender in Chhattisgarh. The conditions for eligibility included "good moral character" of the family of the applicant, no criminal record and no dues to the government. The selection process was challenged. It was found that many applicants were non-existent, one person made several applications and age certificates were given by dentists and orthopaedics. The court ordered restart of the process (Ashok Lenka vs Rishi Dikshit).

These are not occasional hiccups. There is no uniform policy regarding alcohol and its varied forms. Industrial alcohol is a central subject under the Industries (Development and Regulation) Act. Potable alcohol can be made from it, and then it becomes a state subject. In the absence of proper supervision by either government, the poorer sections of people get at the noxious variety leading to mass tragedies. Some years ago, a bench of the Supreme Court raised six questions arising from the overlapping jurisdictions, and referred it to a Constitution bench of at least nine judges (State of UP vs Lalta Prasad). But no answers have come from the court and the issue has fallen under the stool.

Some judges, though in a dissenting minority, have taken the view that dealing in liquor, or for that matter in lottery or tobacco, is not prohibited by the Constitution. In the case State of Punjab vs Devans Modern Breweries, two of five judges of a Constitution bench asserted that there is a fundamental right to carry on liquor trade. The doctrine of res extra commercium, devised by the judges, was questioned. It is not found in the Constitution and its meaning is quite different from what is generally believed. The dictionary meaning refers to public roads, rivers and titles of honour, which are beyond commerce; not goods for sale.

These non-conformists point out that India has entered into trade agreements to deal in liquor with other countries. It is expected to remove trade barriers according to international conventions, subject to other provisions. Such dissenting judicial opinions are said to be the "brooding wisdom" of the court which might bloom another day, under another government or a new generation of judges.