Decided on March 03,2003

Maharashtra Distilleries And Ors. Appellant
STATE OF KERALA And ANR. Respondents


Jawahar Lal Gupta, J. - (1.) Are the conditions laid down by the Kerala State Beverages (Manufacturing and Marketing) Corporation Limited vide its notice dated February 11, 2002, for execution of rate contract by the suppliers arbitrary and illegal? Is the Corporation not entitled to insist upon the Earnest Money Deposit; restrict the brands to the maximum of 8 and levy the fees as mentioned in the impugned notice? These are the questions that arise for consideration in these bunch of writ petitions. Learned Counsel for the parties have referred to the facts in O.P. No. 6705/2002. These may be briefly noticed.
(2.) The Petitioners are licensed under the Abkari Act, 1967 and the Rules to manufacture Indian made foreign liquor within the State of Kerala. On May 11, 1983, the State Government took a policy decision to establish a Public Sector Corporation to procure spirit; arrange blending; bottling; selling and supply of arrack and also for dealing with sale of foreign liquor. It appointed a committee to consider the matter. A proposal was submitted by the committee. It was considered by the Government. Vide order dated February 1, 1984, the proposal for the incorporation of the public corporation by the name of Kerala State Beverages Limited was approved. The Memorandum and Articles of Association of the Company were also approved. A copy of this order has been produced as Ext.P -1. Thereafter, the Corporation has been periodically issuing notices inviting offers for registration for supply of Indian made foreign liquor. It is the admitted position that the Corporation is "the monopoly purchaser and distributor of "foreign made foreign liquor, Indian made foreign liquor (Brandy, Whisky, Rum, Gin, Wine, Vodka etc.) and Beer in the State of Kerala".
(3.) In February, 2002, the Corporation invited sealed offers from manufacturers owning a Distillery/Brewery/Blending Unit for registration and for entering into rate contract for the supply of foreign made foreign liquor, Indian made Foreign Liquor and Beer from April 1, 2002. Certain conditions were laid down. The relevant conditions which are the subject -matter of challenge in these petitions are contained in paragraphs 3(a), 3(b), 5(f), 5(i), 18(b) and 22 of the notice. A copy has been produced as Ext. P -4 These provide as under: 3(a). Offers shall be for entering into rate contract for supply of FMFL/IMFL/Beer to the Corporation. Offers shall be accompanied by a Bank Draft for an amount of Rs. 10,00,000 (Rupees ten lakhs only) drawn in favour of the Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd., payable at Thiruvananthapuram towards initial Earnest Money Deposit. The E.M.D. for exclusive wine suppliers shall be Rs. 50,000. The E.M.D. bears no interest. Offers which do not satisfy the conditions are liable to be rejected and the Earnest Money Deposit will be refunded. For a quantity of business upto 15,000 cases, E.M.D. shall be Rs. 10 lakhs and shall progressively increase by Rs. 1 lakh up to an addition of every 15,000 cases, transacted. This is upto a turnover of 1.5 lakh cases. Beyond 1.5 lakh turnover Rs. 2 lakhs for every additional 25,000 cases will be realized. The maximum E.M.D. will be Rs. 40 lakhs. (b) Offers received without the E M.D. of Rs. 10 lakhs will be rejected. 5(f) The number of brands quoted shall not exceed a maximum of 8 brands. 5(i) Transfer of liquor from the Corporation's warehouse to its own FL -1 shops will not be considered as sale. 18(b) The value of transit or godown breakage (if any) along with duties leviable thereon duly recorded by the Corporation shall be debited to the supplier. Service charges as approved by the Board of Directors for all routine purchases to the Corporation's FL -1 shops will be debited to the supplier. Transfer Fee for inter warehouse transfer, discount on special purchase to corporation's FL -1 shops, revalidation fee, regularization fee, display charges etc. will also be debited to the supplier. 22. Arbitration. - - All disputes and claims that may arise between the Corporation and the supplier in respect of the purchases made under the contract shall be referred to arbitration only and not to any Court of Law. The Commissioner of Excise, Kerala will act as Arbitrator whose decision shall be final and the arbitration proceedings shall beat the city of Thiruvananthapuram.;

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