The Supreme Court has agreed to examine the constitutional validity of Section 58 of the Bihar Prohibition and Excise Act, 2016, which empowers District Collectors to confiscate vehicles in liquor cases. The move comes after Bihar challenged a Patna High Court ruling that quashed the confiscation and auction of a seized SUV.
New Delhi: The Supreme Court of India has agreed to closely examine the constitutional validity of Section 58 of the Bihar Prohibition and Excise Act, 2016, a law that allows the District Collector to confiscate vehicles and properties involved in liquor-related offences in Bihar.
This development took place after the State of Bihar approached the Supreme Court, challenging a judgment of the Patna High Court.
The High Court had earlier quashed the confiscation and auction of a vehicle owned by one Shankar Baranwal, criticising the valuation and auctioning process followed by state authorities.
The matter was heard by a bench led by Chief Justice of India BR Gavai, along with Justices K Vinod Chandran and NV Anjaria, who issued notice to the parties.
The bench made it clear that it would examine the constitutional validity of Section 58 of the 2016 Act in connection with Rules 12A and 12B of the Bihar Prohibition and Excise Rules, 2021.
The case began in 2020 when a Tata Safari SUV belonging to Baranwal was seized by police after they allegedly found six liquor bottles (180 ml each) inside the vehicle.
Since liquor is banned in Bihar under the prohibition law, the District Collector initiated confiscation proceedings against the car. In 2021, an order was passed against Baranwal, and his challenges before the Appellate Authority and in Revision also failed.
Following this, the vehicle was put up for auction in 2022. The SUV, which had been purchased in 2013 for around Rs 14 lakh, was valued at Rs 3.2 lakh in 2021 by the Additional District Transport Officer (ADTO). However, it was eventually auctioned for only Rs 1.85 lakh.
When the matter reached the Patna High Court, the judges found serious irregularities in the way the vehicle was valued and auctioned.
The Court strongly criticised the method adopted by Motor Vehicle Inspectors in Bihar, where vehicles were given a “wholesale valuation” without properly checking their purchase price, year of manufacture, depreciation, or insurance value.
The High Court came down heavily on this practice and observed that bureaucrats cannot simply rely on visual checks while valuing vehicles.
It specifically remarked that state bureaucrats cannot conduct valuations by mere “naked eye assessment”. The Court further held that such arbitrary practices not only cause loss to the vehicle owner but also lead to loss for the state government itself.
As a result, the Patna High Court ruled that Baranwal was entitled to compensation. The Court ordered that he should be paid Rs 3.2 lakh (the value fixed in 2021) after deducting Rs 20,000 as penalty.
Importantly, the Court also directed the ADTO who had done the valuation to personally payRs ₹1.35 lakh to Baranwal. The State of Bihar was separately asked to pay Rs 1.65 lakh for the irregularities.
Challenging this decision, the State of Bihar argued before the Supreme Court that the High Court had gone beyond its powers in making such directions, especially by personally penalising the valuation officer. The state requested that these directions be set aside.
While hearing the plea, the Supreme Court issued notice and at the same time stayed the High Court’s order requiring the ADTO (valuer) to pay compensation.
However, the Supreme Court emphasised that the bigger legal question remains—whether Section 58 of the Bihar Prohibition and Excise Act, 2016, which gives sweeping powers of confiscation to the Collector, is constitutionally valid.
The bench observed:
“Issue notice, since we are inclined to consider the question with regard to validity of Section 58 of the Bihar Prohibition and Excise Act, 2016 read with Rules 12A and 12B of the Bihar Prohibition and Excise Rules, 2021.”
The outcome of this case is expected to have a significant impact on Bihar’s prohibition regime, which has often been criticised for its strict and sometimes harsh enforcement.
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If the Supreme Court strikes down or limits Section 58, it could drastically change how vehicles and properties seized in liquor-related cases are handled in the state.
Case Title:
The State of Bihar & Ors. v. Shankar Baranwal, registered as SLP (C) No. 20640/2025.
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