Liquor ban: When highways are left high and dry

Photo: Subrata Majumdar
The recent knee-jerk de-notification of roadways by various state governments and the Centre’s plans for a presidential reference may roil the waters on the Supreme Court order banning the sale of liquor on highways. Even after a March 31 clarification of the court’s earlier order, the Centre and states still seem to be mulling their options to continue selling alcohol on highways.

States like Maharashtra, Punjab, Rajasthan and West Bengal took no chances and instead embarked on the adventurous step to de-notifying several portions of their highways in an attempt to protect hefty excise revenues through such liquor sales. As expected, the bold move has sparked instant scrutiny, with experts critical on the intention of these de-classifications.

Some have even seen it as a concerted effort by these governments to nullify the apex court’s vision for an alcohol-free network of highways. “These actions should not be seen as a device to frustrate the Supreme Court decision. If they do, it will not be taken well by the judiciary,” says Lalit Bhasin, managing partner, Bhasin & Co.

Taking a more opinionated stand, Manish Tiwari, advocate, Supreme Court, said the apex court judgment was an appropriate step to cleanse the highways from the dangers of drunken driving. He even hinted that states that have de-notified highways to skirt the ban should be made to return all central funding they had received for the development of these roads.

According to an industry expert, this trend may not contain itself to these regions alone, with others expected to join the bandwagon in the coming days. Many states have also asked the central authorities to de-classify portions of national highways to carve out further exceptions to the ban. This, however, seems less likely as issues of maintenance of these highways, which are currently undertaken by the Centre, will have to be transferred to the states.

With the increase in urban traffic, the cost of maintaining these roads are only expected to rise and could also impact a state’s budget significantly, if not compensated otherwise. In 2011, after demands by the Madhya Pradesh government, five national highways were declassified and handed over to the state authorities. However, the state government later requested the Centre to take back the highways because they were unable to provide for their maintenance. Whether excise revenues from continued alcohol sales on these roadways will make up for the increased burden on state exchequers is yet to be seen.

Apart from de-notifying highways, several other avenues could also be considered. “One is to move the Supreme Court by way of a review petition to bring out the hardships being faced by various parties.  De-notifying highways is an option, but it will need the support of the central government, state government and local bodies,” notes Ramesh Vaidyanathan, managing partner, Advaya Legal.

De-classifying highways could also create multiple legal complexities, especially in the context of tolled roadways. Litigation by concessionaires operating and maintaining these highways is a definite area of concern. The possibility of such de-notification actions being challenged in court can add a further twist to the tale, adds Vaidyanathan.

At present, the Ministry of Road Transport and Highways does not have a policy on de-notifying national highways. Most state highway statutes also do not consider de-classifications expressly. This makes the legality and procedural soundness of these moves somewhat uncertain. However, Bhasin is of the view that states do have an inherent right to de-notify such highways.

Although most state highway acts bar the jurisdiction of civil courts and protect actions taken in good faith, administrative decisions are usually subject to judicial scrutiny in the constitutional courts through a number of Supreme Court decisions in this regard.

As such, these de-notifications may well be taken up to these higher courts as public interest litigations on grounds of unreasonableness. According to Bhasin, even contempt proceedings may be initiated against government officials if these moves draw the ire of the apex court.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel