Liquor Ban To Leave States High And Dry

The Apex Court’s prohibitory order along highways triggers a rare flurry of activity by State Governments desperate to find loopholes and exemptions that will protect the liquor trade—and their excise revenue
 

- Sandeep Unnithan and Shweta Punj

Days after the Supreme Court’s December 15, 2016, verdict banned liquor vends within 500 metres of national and state highways, India’s Federation of Hotel Associations had a query. Did the verdict also apply to the thousands of restaurants and hotels along the highways, they wondered. On March 31, the hotel association’s lawyer, Aryama Sundaram, thought he would put doubts at rest and on his own sought a clarification from the Supreme Court on whether this applied only to shops serving alcohol. The response from the three-judge bench, including Chief Justice J.S. Khehar, hearing pleas for modifying the court’s December 2016 judgment, stunned states and hoteliers. The ban on shutting liquor vends 500 metres from state and national highways also applied to hotels and restaurants, the court ruled, “extending the prohibition to include stretches of such highways which fall within the limits of a municipal corporation, city, town or local authority”. The order mortified the hospitality industry and indeed most state governments and unleashed a prohibition-era nightmare. Thousands of hotels and restaurants across the country, within the path of highways snaking through cities, had to shutter their bars. Attempts by states to relocate the bars away from the 500 metre no-go zone on highways and into villages have met with fierce resistance from locals in states like Uttarakhand and Kerala.