A bench of justices Vikramjit Sen and Justice Shiva Kirti Singh passed the order on a batch of pleas by Kerala bar owners, who had challenged the liquor policy claiming it to be discriminatory.
Earlier the high court had upheld the state government's liquor policy which is aimed at making Kerala a liquor-free state by 2023.
The apex court said the state government would consider taking measures for rehabilitation of those who will lose employment due to the policy.
The verdict, which was reserved in August, was delivered a day before Justice Sen was to retire as the judge of the Supreme Court.
However, Kerala government had argued that the decision taken by the state not to renew licenses was a policy decision.
The private bar owners had contended that this policy of "partial ban" was discriminatory in nature.
Attorney General Mukul Rohatgi, appearing for the bar owners, had said this policy will lead to a situation where only the well-heeled have access to alcohol.
Rohatgi further suggested that states should be asked to
"It is not a logical solution. It has to be different for different states. It cannot be same for everyone," he said, adding, "By a fiat, it is starting from April 1. It (order) has to be tweaked for different states."
However, the court said, "The number of deaths due to drunked driving is phenomenal and the number of injured is much higher. The figure is much higher than what is actually recorded as most of the cases are not registered as drunked driving cases."
He said after March 31, more than 20,000 liquor vends across the highways would get shut causing a huge loss to the revenue.
"Some balance is required as the trade is not illegal. It is a legal trade and millions of employees are there. Please keep it (operation of order) deferred for at least a month and hear the matter in detail," he said.
A battery of senior advocates appearing for the private parties and few states echoed the arguments of the attorney general and spoke about huge loss of revenue.
The counsel appearing for parties said that some states have imposed a ban on serving liquor in bars and restaurants along the highways, including some five-star hotels, despite the attorney general giving the opinion that it does not came under the ambit of the court's order.
Besides some liquor vendors' associations and states like Kerala, Punjab and Telangana have approached the apex court seeking modification of the December 15, 2016 judgement.
The verdict had come on a PIL alleging that nearly 1.42 lakh people died per year in road mishaps and that the drunken driving is a major contributor.
It had also directed that all signages indicating the presence of liquor vends will be prohibited along national and state highways.
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