Chandigarh: No bank guarantees from allottees, UT seals 42 liquor vends
It all started after a contractor moved high court alleging that over 87 out of the total 96 vends in the city were allocated to merely two or three individuals, thus hinting at cartelisation; these individuals allegedly operated under different firm names or through their relatives, associates, and employees
Amid allegations of cartelisation and policy violations in the allotment of the liquor vends for the 2025-26 financial year, a fresh controversy has erupted with the UT excise and taxation department sealing 42 out of the 96 vends in the city over non-submission of bank guarantees to the tune of ₹33 crore.
The allotees are required to submit their bank guarantees -- equivalent to 15% of the licence fee -- within seven working days of the notification of allotment, as per Clause 21 of the UT Excise Policy. Failure to do so results in the cancellation of the allotment and forfeiture of the earnest money and security deposit. The vends were allotted on March 21.
One of the reasons being cited for non-submission of bank guarantees is the uncertainty over allotments amid the ongoing controversy over the tendering process, a matter which is pending in the Punjab and Haryana high court.
Chandigarh wine contractors’ association president Darshan Singh Kler, meanwhile, said the department must not accept any bank guarantees submitted after the deadline as it will be in violation of the excise policy. “Giving them (defaulters) more time would be unfair,” he said and urged the department to publish a list of successful bidders, along with the exact date and time of their bank guarantee submissions. “Allotments lacking timely submissions should be cancelled and re-allotted as per policy,” he said.
What’s the controversy all about
It all started after a contractor moved high court alleging that over 87 out of the total 96 vends in the city were allocated to merely two or three individuals, thus hinting at cartelisation. These individuals allegedly operated under different firm names or through their relatives, associates, and employees.
Another petition, filed by M/S Kler Wines, and a third petition, argued that the entire tendering process was carried out in violation of the prescribed rules. The petitioners contended that the notice inviting tender (NIT) issued on March 13 was flawed and that the process itself was indicative of collusion among bidders.
In response to the three petitions, the high court had stayed the operation of all liquor vends in Chandigarh from April 1. The UT administration challenged the decision in the Supreme Court, which subsequently quashed the high court’s order. Following this, liquor vends were allowed to open on April 3. The next hearing is scheduled for April 24.
No end to UT’s woes
The UT has been suffering revenue losses over the past two years due to Punjab’s excise policy. In Punjab, excise duty and VAT are just 1%. In contrast, Chandigarh imposes an excise duty ranging from ₹66 to ₹377 per proof litre, with VAT at 12.5%. This allows liquor vendors in Punjab enjoy higher profit margins compared to those in Chandigarh. Liquor rates in Punjab are also slightly higher than in Chandigarh. Due to this, contractors were hesitant to bid for vends in the city. As a result, 12 vends remained unsold in 2024-25, with UT managing to collect only ₹800 crore against a target of ₹1,000 crore from the auctions. In 2023-24, it had set a target of ₹830 crore but managed to collect only ₹600 crore.
For 2025-26, the department had brought down the target to ₹800 crore. It managed to generate ₹606 crore from licence fee, against a reserve price of ₹439 crore, through the auction of the 96 vends.
