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of <h1>TASMAC lacks authority to grant bar licenses, must stop allowing bars until law amendments</h1> <h3>S. JAGANNATHAN, S. PARAMASIVAM, V. SURESH, C. KUMAR, K. MANI, C. THOMAS, B. KATHIRVEL, M. KUMAR, R. RAJAMANI, K. VELMURUGAN, R. SENJTJ NAIDU, M. JAMES, S. JOHN PANDIYAN, S. SURENDRAN, B. SANGEETHARAJ, S. KRISHNARAJ, N. DAYALAN Versus other Versus The Managing Director, Tamil Nadu State Marketing Corporation Limited and Ors.</h3> S. JAGANNATHAN, S. PARAMASIVAM, V. SURESH, C. KUMAR, K. MANI, C. THOMAS, B. KATHIRVEL, M. KUMAR, R. RAJAMANI, K. VELMURUGAN, R. SENJTJ NAIDU, M. JAMES, S. ... Issues Involved:1. Validity of the Tender Notification dated 14.12.2021 issued by TASMAC.2. Requirement of 'No Objection Certificate' (NOC) from premises owners.3. Compliance with the Tamil Nadu Transparency in Tenders Act, 1998.4. Legality of TASMAC's business model and auction process.5. Petitioners' claims of financial loss due to COVID-19 lockdown.Issue-Wise Detailed Analysis:1. Validity of the Tender Notification dated 14.12.2021 issued by TASMAC:The petitioners challenged the Tender Notification dated 14.12.2021, arguing that it was issued without considering the hardships faced by them and contrary to the provisions of the Tamil Nadu Transparency in Tenders Act, 1998. They claimed that the tender process was vitiated by favoritism and lack of transparency. The Court noted that the tender process had been postponed in certain districts due to administrative reasons and inclement weather. The tender process was purportedly conducted under Rule 9A of the Tamil Nadu Liquor Retail Vending (In Shops and Bars) Rules, 2003, which allows TASMAC to grant the privilege of running bars to private parties by tender.2. Requirement of 'No Objection Certificate' (NOC) from premises owners:The petitioners argued that the requirement of obtaining a 'No Objection Certificate' (NOC) from the owners of the premises was done away with in the impugned tender, which they claimed was intended to oust them and include persons closer to the ruling dispensation. The Court referred to a Division Bench decision in The Deputy Collector/District Manager Tamil Nadu State Marketing Corporation Tiruchirapalli Vs. R.Ramkumar, which upheld the requirement of an NOC. The Court found that the deletion of the NOC requirement in the impugned tender was arbitrary and resulted in an unfair exercise of power by TASMAC.3. Compliance with the Tamil Nadu Transparency in Tenders Act, 1998:The petitioners contended that the tender process did not comply with the provisions of the Tamil Nadu Transparency in Tenders Act, 1998, and the Rules made thereunder. They argued that the tender forms were not readily available for download, and no drop boxes were provided for submitting tender applications. The Court noted that the petitioners were given tender forms pursuant to the Court's orders but were not allowed to submit their applications due to the absence of drop boxes. The Court emphasized that the tender process must comply with the provisions of the Tamil Nadu Transparency in Tenders Act, 1998.4. Legality of TASMAC's business model and auction process:The Court examined the historical background of the prohibition law in Tamil Nadu and the role of TASMAC. It noted that the Tamil Nadu Prohibition Act, 1937, aims to prohibit the manufacture, sale, and consumption of intoxicating liquors and drugs, except for medicinal, scientific, industrial, or similar purposes. The Court found that TASMAC's practice of auctioning rights to sell short eats and collect used bottles in bars attached to its retail shops was not consistent with the provisions of the Tamil Nadu Prohibition Act, 1937. The Court held that TASMAC could not encourage consumption of liquor in public places and directed TASMAC to take steps to close down the bars attached to its shops within six months.5. Petitioners' claims of financial loss due to COVID-19 lockdown:The petitioners claimed that they suffered huge financial losses due to the COVID-19 lockdown, which forced the bars to remain closed for about 15 months. They argued that TASMAC should have allowed them to operate their licenses for an additional 15 months to compensate for the losses. The Court acknowledged the petitioners' financial hardships but emphasized that the tender conditions clearly stated that no compensation would be provided if the liquor shop or bar was closed due to administrative reasons or changes in government policy. The Court held that the petitioners could not dictate terms to TASMAC and dismissed their claims.Conclusion:The Court dismissed the writ petitions, finding no merit in the petitioners' arguments. It directed TASMAC to close down the bars attached to its shops within six months and emphasized the need for compliance with the provisions of the Tamil Nadu Prohibition Act, 1937, and the Tamil Nadu Transparency in Tenders Act, 1998. The Court also highlighted the need for legislative amendments to address the inconsistencies between the current practice and the statutory provisions.
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