Highway liquor ban does not apply inside town limits: SC

Bringing considerable cheer to the liquor industry, the Supreme Court has clarified that ban on selling liquor along national and state highways is not applicable to roads that fall inside city or town areas governed by municipal bodies, but only to highways linking towns or cities.

The SC had on 15 December last year banned liquor sales within 500 metres of national and state highways in the country (See: Supreme Court directs closure of all liquor shops along highways).

But on 11 July this year, a bench of Chief Justice J S Khehar and Justices D Y Chandrachud and Nageswara Rao held that the order "does not prohibit licensed establishments within municipal areas. This clarification shall govern other municipal areas as well" (See: Bar owners say cheers as SC may ease curbs on liquor sale along highways).

Although the order was passed last month, it was uploaded on SC website on Wednesday.

Shares of liquor companies rallied by up to 13 per cent on BSE in early morning trade today after the clarification that the liquor ban on highways does not extend to municipal areas.

United Spirits, Globus Spirits, GM Breweries, Pincon Spirit and Radico Khaitan were up in the range of 5 per cent to 13 per cent on BSE. By comparison, the S&P BSE Sensex was up 0.12 per cent at 31,605 at 09:35 am.

"The purpose of the directions contained in the order dated 15 December 2016 is to deal with the sale of liquor along and in proximity of highways properly understood, which provide connectivity between cities, towns and villages," the order said.

"The order does not prohibit licensed establishments within municipal areas. This clarification shall govern other municipal areas as well. We have considered it appropriate to issue this clarification to set at rest any ambiguity and to obviate repeated recourse to IAs before the Court," it said.

The SC made the clarification while dismissing an appeal against the judgement of Punjab and Haryana High Court, which dismissed the challenge against a notification of Chandigarh administration dated 16 March 2017 on the ground that it circumvents the Supreme Court order that banned the sale of liquor along the highways.