While more and more states in the union are imposing prohibition, Karnataka is penalising bar-cum-restaurants under a now-defunct law that required establishments to sell a minimum of 468 litres of liquor every month.
The state excise department has slapped fines, totalling crores of rupees, on over 150 bar-cum-restaurants in Bengaluru, with retrospective effect. Of these, over 30 premium establishments have even moved the High Court against the penalities.
The notices were issued under Rule 14(2) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, that required CL-9 licence holders in the city municipal corporation areas to procure a minimum of 52 cases or 468 litres of liquor – excluding fenny, wine and beer – every month. The penalty amount is Rs 100 for shortfall in procurement for every litre.
The rule was scrapped nearly two years ago, but it is cited for violations in the past. The notices threaten cancellation of liquor licences if the establishments do not pay up before June, when their CL-9 licences come up for renewal.
Excise Commissioner SR Umashankar was categorical: “Yes, the rule was quashed in August 2014, and there is no longer any prescribed quantity to be sold. But they have to pay a penalty for not serving 468 litres a month in the past. If they do not pay the penalty, we won’t renew their licence.”
Fava, a popular restaurant in upmarket UB City , has been asked to pay a penalty of Rs 20 lakh. Similarly, DV Raghuovernath, owner of Adithya Entertainment, received a notice to pay Rs 1.13 crore for the five bars and restaurants he runs in the city.
“Many liquor licences are due for renewal by June-end, but excise officials won’t renew until we pay the penalties,” said Ashish Kothare, head of Bengaluru chapter of the National Restaurant Association of India. Some establishments, he pointed out, have been asked to pay penalties for shortfall in procurement from as far back as since 2004.
Rule 14(2) came into existence in April 2003 and was followed by the setting up of the Karnataka State Beverages Corporation Limited in July 2003. The state-run entity became regulator and sole distributor of liquor in the state.
“The Corporation was meant to stop the distribution of illegal liquor,” said PO Mathew, joint managing director of Koshy’s bar and restaurant. “They have fined us over Rs 10 lakh for 10 years,” he said, adding that his restaurant’s liquor-demand is only about 250 litres a month.
PM Ananthanarayana, owner of Fusion Lounge (on Brigade Road) and Roadhouse Bell restaurant (in Koramangala), who was slapped with a fine of Rs 10.36 lakh for 2012-2014 -is one of the petitioners.
“When the government is the distributor, there is no question of illegal sale of liquor. And, when they quashed the rule itself, there is no value to this notice or penalty. If customers are not drinking more, it is not our fault,” he argued.
Establishments that procure a liquor licence in the CL-9 category, like Koshy’s, are primarily known for their food. Liquor, for these restaurants, is a value addition.
“Tandoor on MG Road is famous for its food. How can they be expected to sell more liquor?” Kothare asked. Jordan Phillips JerseyShare This