Behenji Mayawati. The unseemly haste with which the liquor policy in UP was changed to allow a private company to be the sole packager and distributor of country liquor – now reversed after a court order – raises questions about the chief minister's credentials.
The Chief Minister of India’s most populous state who leads the Bahujan Samaj Party aspires to be the country’s first Dalit Prime Minister. Mayawati wants to be known as a no-nonsense politician who is capable of providing good (and tough) governance. Despite the CBI investigations pending against her in the Taj Corridor and disproportionate assets cases, she would like the world to believe that she does not tolerate corruption. If the manner in which the government of Uttar Pradesh recently changed its liquor policy is an indication, she has some distance to travel – before her hopes of heading the world’s largest democracy and acquiring a reputation for probity come true.
On March 3 this year, a bench of the Supreme Court comprising Chief Justice K. G. Balakrishnan and Justice R.V. Raveendran heard a petition and decided to issue notices to the UP government and other respondents in the case, including the state Excise Commissioner and the UP Cooperative Sugar Factories’ Federation (UPSCFF). The impact of this was almost instantaneous. The following day, March 4, the state government promptly changed its liquor policy and the UPSCFF scrapped its agreement with Blue Water, whose owners are reportedly wealthy businesspersons with interests in not just liquor but in real estate as well.
It is learnt that fresh licences have been issued by the state excise authorities to more than one firm and that the monopoly that Blue Water had enjoyed over the liquor business is now over.
The story began on June 14, 2007, within a month of Mayawait being sworn in for the fourth time as Chief Minister of UP. The state government issued an order changing its liquor policy ostensibly to check evasion of excise duty and preventing smuggling of alcohol. Earlier, wholesalers used to purchase liquor directly from distilleries and sell the goods (both ‘country’ liquor as well as Indian-made ‘foreign’ liquor) through vendors who would obtain licences after bidding for them through open, public auctions. For the purpose of issuing licences, the state excise department has divided UP into 17 divisions.
Following the June 14 order, on June 28, the Excise Commissioner, UP, asked four state government-run corporations and apex cooperative bodies to bid for a single licence for the entire state. Two days later, on June 30, the bids were opened and the licence was awarded to the UPCSFF. There was a catch to the state government’s new liquor policy. No budgetary provision had been made to enable the concerned organisation, in this case the UPCSFF, to be in a financial position to execute the terms and conditions of the licence.
Clearly, there was a gameplan. The day the licence was issued to the UPCSFF, the federation entered into an agreement with a private company, Blue Water Industries Pvt Ltd. This firm had been registered with the Registrar of Companies in Jalandhar on June 5, 2007, showing its registered office in Mohali. Its directors were named as Bhupinder Singh, Manmohan Singh Walia and Parminder Sharma. It entered into an agreement with the UPCSFF for packaging and marketing country liquor from its Nanpara distillery. Blue Water was so ‘efficient’ that it successfully commenced operations in all 17 divisions in the state from July 1 itself.
That’s not all. A sum of Rs 85 lakh was paid as licence fee and an additional Rs 50 lakh as security deposit. The company’s share capital was barely Rs 1 crore, contributed by three major promoters, but it did not seem daunted by the prospect of paying Rs 4,000 crore a year to the state government in the form of excise duty. In fact, the firm faced no apparent difficulty in forking out Rs 825 crore as advance deposits of excise duty for the months of July, August and September last year.
Viney Kumar Mishra, who describes himself as a social worker and a journalist – he is editor, City Guide – then decided to file a public interest litigation (PIL) petition against the state government’s new liquor policy. On September 7, a bench of the high court at Allahabad comprising Chief Justice H.L. Gokhale and Justice Anjani Kumar declined to entertain the petition questioning the validity of the UP Excise (Settlement of Licences for Wholesale of Country Liquor and Foreign Liquor) Rules, 2007, on the ground that the petitioner was “not concerned with the case”.
The rebuff did not deter Mr Mishra. He engaged advocate Vivek Goyal and decided to move the Supreme Court of India on October 10 challenging the Allahabad high court’s decision to reject his petition, arguing that he had not filed the petition for personal gain, private profit or out of a political motive but merely because the issue involved public interest. The court did take notice then.
Who does not know that the booze business is rather murky, not just in India and in other parts of India but in many parts of the world? It is fairly common knowledge that slush funds change hands in this business because the liquor trade is such a lucrative business. What is apparent is that corrective action was taken only after it was realised that the mess could blow up in the face of the powers-that-be in the state.
Hopefully, Chief Minister Mayawati is aware of the facts of the case. And, hopefully, general secretary of the Communist Party of India (Marxist) Prakash Karat is also aware of the people he wants to do business with.