Supreme Court Sets Aside MP High Court’s Costs And Adverse Remarks In Som Distilleries Case, even as it left intact the High Court’s direction to renew the company’s liquor licences.
New Delhi: The Supreme Court on Tuesday (October 27) dismissed the State of Madhya Pradesh’s appeal in the Som Distilleries licence dispute only to the extent of the Madhya Pradesh High Court’s direction to renew the licence, and set aside the other parts of the High Court ruling, including the Rs 1 lakh costs imposed on the State, the observations allowing damages claims for alleged mala fide action and the adverse remarks against the Advocate General’s office [State of Madhya Pradesh v. Som Distilleries Private Limited].
The matter was heard by a bench led by Chief Justice of India Surya Kant and including Justice Joymalya Bagchi. Senior Advocate Mukul Rohatgi appeared for Som Distilleries, while Solicitor General Tushar Mehta appeared for the State of Madhya Pradesh.
What the Supreme Court kept and what it removed
The renewal direction, which allows the distillery to resume manufacturing, survives. What goes is everything else in the High Court’s judgment that went against the State: the order to pay Rs 1 lakh as costs, the observations that left the company free to claim damages from the State for alleged mala fide action, and the critical remarks recorded against the office of the Advocate General.
On the State’s concern over unpaid excise dues, CJI Surya Kant said the dues can be recovered while the industry is allowed to run, and that if payment is not made, coercive measures, including the freezing of accounts, could be taken.
How the case reached here
The dispute goes back to February 4, 2026, when the Excise Commissioner suspended the licences of two Som group companies, Som Distilleries Private Limited and Som Distilleries and Breweries Limited, under Section 31 of the Madhya Pradesh Excise Act, 1915. The action followed a December 2023 trial court verdict at Depalpur convicting several persons, including company employees, in a case over the transport of illicit liquor on allegedly forged permits. Appeals against those convictions are pending.
On March 23, 2026, a single judge of the High Court at Jabalpur dismissed the companies’ challenge to the suspension. On April 15, 2026, a Division Bench disposed of the writ appeal, noting that the 2025-26 licensing year had ended and directing that the 2026-27 renewal applications be decided independently under the law. The Excise Commissioner then set up a four-member inquiry committee, issued a fresh show-cause notice on June 12 over alleged discrepancies in the online renewal declaration, and rejected the renewal applications on June 18, 2026.
By its judgment of September 24, 2026, the High Court quashed the June 18 rejection, directed the renewal of the manufacturing licences within 15 days, imposed Rs 1 lakh as costs on the State and preserved the company’s right to seek damages for the period of closure. The State appealed to the Supreme Court, which has now confined the relief to the renewal direction.
The State’s submissions
Earlier in the hearing, SG Tushar Mehta told the Court that a truck had been intercepted carrying boxes of Blue Chip whisky manufactured by Som Distilleries, and alleged that the import-export permit and the bilty produced for the consignment were forged.
Mr Mehta also took issue with the High Court’s recording that the employees’ conviction had been stayed. He submitted that this was incorrect, since only the sentence had been stayed and not the conviction.
These are the State’s allegations in a criminal case whose appeals remain pending; they are untested at the appellate stage, the Supreme Court expressed no view on their merits, and the accused are entitled to the presumption of innocence until the appeals are finally decided.
An exchange in Court
For the company, Mr Rohatgi argued that there were only six or seven players in the area and used a Hindi saying to describe the company’s position, that one cannot live in the sea and make an enemy of the crocodile.
Mr Mehta replied in a lighter vein, “You are swimming in liquor not water.” Justice Joymalya Bagchi added, “That is more harmful than water.”
The legal position
Section 31 of the Madhya Pradesh Excise Act, 1915 empowers the licensing authority to suspend or cancel a licence on specified grounds, including offences committed by the licensee or by persons acting on its behalf. The High Court’s Division Bench had held in April that renewal stands on its own footing and must be decided on the merits under the Act. With Tuesday’s ruling, the renewal direction stands, while the State is spared the costs, the damages observations and the remarks against its law officers. The Supreme Court’s written order was not available at the time of writing.
Case Title: State of Madhya Pradesh v. Som Distilleries Private Limited
Bench: Chief Justice of India Surya Kant and Justice Joymalya Bagchi (bench composition as available)
Date of Hearing: October 27, 2026
Appearances: Senior Advocate Mukul Rohatgi for Som Distilleries; Solicitor General Tushar Mehta for the State of Madhya Pradesh