Bank surety default: Chandigarh admn cancels allotment of 47 liquor vends, fresh auction to follow

A day after sealing 47 of the 96 liquor vends allotted in Chandigarh for fiscal 2025-26 over non-submission of bank guarantees worth ₹40 crore, the UT excise and taxation department on Wednesday cancelled their allotment.

The decision was taken after the department wrote to higher authorities, recommending the cancellations. As per Clause 21 of the UT Excise Policy, successful bidders must submit bank guarantees—15% of the licence fee—within seven working days of the allotment notification. Failure to do so leads to automatic cancellation, and forfeiture of earnest money and security deposit.

The vends had been allotted on March 21 and operations had begun from April 3.

A senior excise official confirmed the cancellations, adding that the department would soon re-auction the 47 vends.

Back to square one

In the auction held on March 21, the UT was able to auction 96 out of 97 liquor vends for the year 2025-26, raking in ₹606 crore in revenue—36% above the ₹439 crore reserve price.

This was in sharp contrast to its struggles in the previous two years. In 2024–25, 12 vends went unsold, bringing in only ₹800 crore against a ₹1,000-crore target. The year before, the department had failed to allot 18 vends, raising just ₹600 crore against a target of ₹830 crore.

However, with the cancellation of nearly half the allotments this year, the department may once again fall short of its ₹800-crore target, albeit more conservative than past two years.

Allotments challenged in court over ‘cartelisation’

The successful auction had sparked allegations of cartelisation, with multiple petitions filed in the Punjab and Haryana high court. A section of liquor contractors alleged that 87 of the 96 vends had been secured by a single family, operating under different firm names or through their relatives, associates and employees

The high court stayed the operation of all liquor vends from April 1. The UT administration then moved the Supreme Court, which quashed the stay, clearing the way for vends to open on April 3. The matter is next listed in the high court on April 24.

I-T dept, ED roped in to verify credentials of successful bidders

Meanwhile, the UT excise department has requested the income tax department and Enforcement Directorate to verify the credentials of the successful bidders, amid questions over the source of their investments.