Rakesh Dwivedi

Senior Advocate, Supreme Court

The sale of liquor has been prohibited by the Central government in exercise of powers under the Disaster Management Act, 2005. The ban raises the question of the expanse of this enactment. How much inflation of ambit would be constitutionally permissible, given that our Constitution is federal in character and involves an elaborate distribution of powers in the Seventh Schedule, as also the fact that except for the exercise of powers under Article 356, the state governments cannot be superseded?

The objective of the Disaster Management Act, 2005, is to deal with disasters, their impact, and all steps necessary to alleviate, remedy and rehabilitate. The object limits the ambit of the Act. It does not matter how wide the phraseology of the provisions is. The object or purpose of the Act sets the limit. Purposive construction is todays golden rule of interpretation, Justice RF Nariman observed in Shailesh Dhairyawan v Mohan Balkrishna (2016).

That being so, can the Central government prohibit the sale of liquor even though the sale of essential and non-essential goods has been permitted? Let us look at the three lists in the Seventh Schedule of the Constitution. Entry 8 of List 2, the State list, read with Article 246, gives exclusive power to the states to legislate and execute with respect to the manufacture, production, distribution and sale of liquor. The Central government has no power in this respect. It cannot encroach upon the legislative domain of the states. How then does the Disaster Management Act empower the Centre to impose a temporary ban on the sale of liquor during the fight the coronavirus pandemic?

The Centre can rest its case on entry 29 of List 3 which enables it to deal with the epidemic. It may bring in the residuary entry 97 in List 1, Parliaments exclusive domain, to deal with disasters. But these entries are limited to managing the epidemic and disasters. The residuary entry operates only when there are no express entries in any list. Neither of these entries would displace entry 8 of List 2. The Centre can prohibit all sales or some sales, if necessary, to deal with the pandemic disaster. But if retail and wholesale sales of essential articles as well as non-essentials and food deliveries are allowed, can the retailers be prevented from supplying liquor?

It is difficult to comprehend how the home delivery of liquor, particularly foreign liquor or IMFL, would result in the spread of coronavirus. It is a non-essential commodity which can be supplied to homes on demand after wearing masks and gloves.

Notably, the supply of liquor presents a vital source of revenue, along with VAT, or sales tax. The states need funds to remain functional and to discharge their duties, even those with respect to Covid-19. Managing a pandemic disaster brings in elements of centralisation in an otherwise federal framework of our constitutional governance, but only to enable the Central government to deal with the pandemic. The Disaster Management Act, 2005, cannot totally disrupt the states plenary jurisdiction as a federal partner. In fact, this enactment is itself carrying a federal structure for dealing with the pandemic. If, however, the goods to be supplied are selected for prohibition, irrespective of linkage to pandemic management or proximate nexus with it or the classification and selection of goods for continued prohibition is palpably arbitrary, then it becomes unconstitutional.

The prohibition of liquor supply is in exercise of an executive power under the Disaster Management Act. The executive needs to satisfy the rationality and proportionality test. In this case, the continued ban on supply of liquor, in any form, even if the supplier is willing to comply with the precautionary norms and is in a position to do so, is clearly and manifestly arbitrary.

There is no justification for treating it differently from other non-essentials. There seems to be an oversight that this good is in the exclusive jurisdiction of the states and its sale is much needed for the revenue of a state. It adversely impacts the states economy as well as the fight against the pandemic.

It is said that there is domestic violence on account of the consumption of liquor. If allowed in the present times, it would increase violence. But this is a matter for the states to consider for imposing a permanent ban. It is not a disaster management issue. It is said the poor would divert his little income to liquor. For this reason, the whole society should be deprived, else there would be a charge of discrimination. This, too, is for the states to consider while devising excise policy and rules. It may temporarily withhold supply of country liquor or raise its prices.

Assuming there is power micro-managing, selection of products by the Central government is not a good idea. The states execute at the ground level and the situation of coronavirus spread in each state is different. Even within the states, there are areas where there is little or no impact or the situation is getting better. Hence, at the micro level, the states should be left free to decide for themselves. It may be noted that the financial condition of the states is grim.

The excise duty source needs to be revived. This will also help the Centre as the demand from the states for funds will reduce. Federal cooperation and federal freedom are essential for the economic revival of India.

Read more:

Let the states take a call on liquor sale - The Tribune India