Liquor Contractors Cannot Be Penalised For Supply Failure Due To Portal Glitches: Madhya Pradesh HC

The Madhya Pradesh High Court on 8 July held that liquor contractors cannot be penalised for the Excise Department's failure to supply liquor due to technical glitches in its online portal, observing that the State cannot take advantage of its own lapse to deny relief to licensees.

Justice Sandeep N. Bhatt partly allowed a batch of writ petitions filed by several liquor contractors and directed the authorities to grant relief sought by them, while declining the remaining reliefs considering the facts and circumstances of the case. He held:

“I am of the view that the respondents have miserably failed to perform their part of the duty in reasonable manner by not supplying the goods though all the formalities at the end of the petitioner are completed. Moreover, considering the fact that petitioner is having license for the present year also is a relevant factor for consideration of relief of the present petition.”

The dispute arose after the contractors were unable to procure liquor before the end of the excise year due to technical issues with the departmental portal. Although the contractors had completed the required formalities and generated delivery demands, the supply could not be made because of the system malfunction.

The petitioners contended that an Excise Department circular required officers to manually issue delivery challans and permits whenever technical glitches prevented online processing. However, despite the portal issues, the authorities failed to adopt the manual procedure, resulting in denial of liquor supply.

The High Court accepted the contention and held that the authorities failed to discharge their statutory duties in a reasonable manner. It observed that after granting licences and collecting revenue from the contractors, the State could not penalise them for failures attributable to its own administrative machinery.

It noted that the Excise Commissioner had issued instructions on 28 March 2026 directing all Assistant Commissioners that, in case of technical glitches, officers must manually process the movement of excise goods, issue delivery challans and permits, and upload the details after restoration of the system.

Further, the Bench observed that under the Excise Policy and the Sale of Goods Act, once the required documents are generated and contractual formalities are completed, the authorities are expected to facilitate delivery of the goods.

Relying on the Supreme Court's decisions in Kusheshwar Prasad Singh v. State of Bihar and Dilbagh Rai Jerry v. Union of India, it reiterated that no person can be allowed to take advantage of his own wrong. It added that the State, as a welfare government, must act fairly while dealing with citizens.

Accordingly, the High Court partly allowed the writ petitions and directed the authorities to provide the relief sought in the relevant prayer clauses, while refusing the remaining reliefs in view of the circumstances of the case.

For Petitioner: Pourush Ranka, Advocate

For Respondent: Rahul Sethi, Additional Advocate General along with Astha Nagori, Advocate