Meghalaya High Court Says Central Bonded Warehouse Has Prima Facie Prejudiced Distillers, Asks It To Verify Uniformity In Rates Charged

The Meghalaya High Court has directed the Central Bonded Warehouse (CBW), sole wholesaler for alcoholic beverage in the State, to inquire into allegations of biased practices and to ascertain whether it is charging differentially from different manufacturers and distillers or is making certain rebates and concessions selectively. 

The bench comprising Chief Justice Sanjib Banerjee and Justice W. Diengdoh observed that prima facie element of prejudice is made out, justifying the institution of the present proceedings.

The petition filed by a group of manufacturers and distillers claimed that the CBW is applying different rates to different suppliers. This, according to the petitioners, would be completely against there being a level playing field since the higher rates charged from certain manufacturers and the lower rates charged from certain other manufacturers will have an impact on the quantum of supply and the products that ultimately reach the retailers’ shelves.

The petitioners asserted that different sets of rules are applied to different suppliers of liquor to the CBW, which is in a monopolistic position to control the quantum of supplies.

The Court emphasised that State has responsibility to establish robust regulations that prevent a single entity from dominating the market and exerting control over manufacturers, distillers, and the availability of products on retailers' shelves.

"The State should know better and should bring in rules that will allow the demand at the level of the individual buyers to direct the supply of the product rather than a State-appointed entity taking into account its profit-making exercise for deciding the same", the bench observed.

The matter is now listed for further consideration on July 18, 2023.

Case Title: International Spirits and Wines Association of India Association vs State of Meghalaya, Association of Meghalaya Bonded Warehouses vs. State of Meghalaya & ors. State of Meghalaya & ors.

For the Petitioners: Mr J. Saha, Sr Adv. with Mr A. Goyal, Adv. Mr A. Mukherjee, Adv. Mr P. Das, Adv. Ms C. Ghatak, Adv. Mr K. Paul, Sr Adv. with Mr Philemon Nongbri, Adv. Mrs R. Dutta, Adv.

For the Respondents: Mr K. Khan, AAG with Mr S. Sengupta, Addl Sr GA Ms. S. Laloo, GA Ms A. Thungwa, GA Mr R. Banerjee, Sr Adv. (VC) Dr N. Mozika, Sr Adv. Ms K. Gurung, Adv.

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