Kochi: In a significant development, the Kerala High Court on February 12 issued an interim stay on a contest announced by the Kerala State Beverages (Manufacturing and Marketing) Corporation (BEVCO) and Malabar Distilleries Ltd. to invite names and logos for a proposed premium brandy.

A Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar VM ordered the stay while hearing two Public Interest Litigations (PILs) challenging the contest.

During the hearing, counsel appearing for one of the petitioners argued that a government-backed contest of this nature would set a dangerous precedent that could later be adopted by private liquor manufacturers. It was further contended that the initiative violated Section 55H of the Abkari Act, which prescribes penalties for unlawful advertisement.

The petitioner’s counsel also submitted that the contest effectively promoted alcohol consumption. Referring to a press release issued by Malabar Distilleries, he pointed out that prize distribution for the contest was scheduled at an event on February 21 and sought an interim stay on these grounds.

The counsel representing the petitioner in the second PIL referred to BEVCO’s counter affidavit, which stated that the corporation had no knowledge of the contest.

In its counter, BEVCO submitted that it is a corporation wholly owned and controlled by the State government, but maintained that it had not issued any notification or press release regarding the contest. BEVCO further stated that it does not manufacture liquor and, therefore, no relief could be claimed against it.

The petitioner’s counsel then argued that clarity was needed on whether BEVCO’s Board of Directors had approved the contest, whether permission had been granted by the Excise Commissioner, whether legal vetting had been carried out, and whether statutory warning requirements had been complied with. At the very least, he submitted, the respondents should be directed to disclose the authority under which such public participation was initiated.

Opposing the plea, the government pleader submitted that no licence had been granted at the time suggestions were invited or advertisements were issued. She argued that the exercise was merely to seek public suggestions for a liquor brand that does not yet exist.

Justice Sen, responding orally, asked: "So you will spend money for a non-existent...Public exchequer money will be spent?"

In reply, the government pleader said that the State itself was not conducting the contest and that it was being undertaken by the company.

"It's a public sector undertaking. How much percentage of share do you own?...You have said so in the counter...So you are Article 12 in that way. Then would you spend money for this purpose? Media advertisement..." Justice Sen further observed orally.

The government pleader responded that the media advertisements were not issued by the excise department nor with its approval.

She also argued that the contest would not fall within the scope of Section 55H of the Abkari Act, which provides for a maximum punishment of six months’ imprisonment. If an offence were made out, she submitted, a complaint would have to be filed directly before the Magistrate court.

After hearing all submissions, the Bench granted an interim stay on the contest. In its order, the Court observed:

"We stay all further proceedings of the contest announced by the respondent no 3 and 4 until final disposal of the writ petition as we are prima facie satisfied that the petitioner has an arguable case of merit and...the nature of the advertisement is actually, is in effect, soliciting use of the liquor and a…measure towards the product being made available in the market."

The matter has been posted for further consideration on March 12.
(With Live Law inputs)