The Supreme Court of India has recently taken up a significant constitutional and legal question concerning the Bihar Prohibition and Excise Act, 2016. At the heart of the matter lies Section 58 of the Act, which grants the District Collector powers to confiscate property allegedly involved in liquor-related offences.
A bench comprising Chief Justice of India (CJI) BR Gavai and Justices K Vinod Chandran and NV Anjaria has issued notice in a petition filed by the State of Bihar, challenging a Patna High Court ruling that strongly criticised the confiscation and auctioning of a private vehicle at “throwaway prices.”
The case is titled The State of Bihar & Ors. v. Shankar Baranwal, SLP(C) No. 20640/2025.
Background of the Case
The case arises from the seizure of a Tata Safari car in 2020, when it was allegedly found carrying six 180 ml bottles of Royal Stag whisky—a direct violation of the prohibition law in Bihar.
The vehicle, originally purchased in 2013 for around ₹14 lakhs, was seized and subjected to confiscation proceedings. These proceedings concluded in 2021, upholding the seizure. The vehicle owner challenged the decision both before the Appellate Authority and through revision proceedings, but failed. Consequently, the car was put up for auction in 2022.
The dispute centered not only on the confiscation but also on the valuation and auction process, which the Patna High Court found to be arbitrary and unfair.
Patna High Court’s Criticism of Valuation and Auction
The Patna High Court noted serious irregularities in how vehicles seized under the Excise Act were being valued and auctioned:
- The Assistant District Transport Officer (ADTO), Bhojpur, initially valued the Tata Safari at ₹3,20,000 in 2021.
- However, the vehicle was ultimately auctioned for only ₹1,85,000.
- No proper assessment of depreciation, condition of the vehicle, or government-approved valuation methodology was carried out.
The High Court remarked that Motor Vehicle Inspectors often conducted wholesale valuations without any individualized assessment. It held that:
“Property cannot be valued with the naked eye by bureaucrats of the State of Bihar… In almost each and every case Motor Vehicle Inspectors are evaluating valuation of the vehicle in wholesale without there being individual assessment.”
Finding fault in this approach, the High Court directed that the respondent (vehicle owner) should be compensated. It ordered:
- ₹3,20,000 (initial valuation) as compensation, with ₹20,000 deducted as penalty.
- The State of Bihar to pay ₹1,65,000.
- The ADTO personally to pay ₹1,35,000 to the respondent for irregularities in valuation.
This strong stance by the High Court prompted the Bihar government to challenge the decision in the Supreme Court.
Supreme Court’s Intervention
The Supreme Court, while staying the direction of payment against the valuer (ADTO), decided to examine a larger constitutional issue—the validity of Section 58 of the Bihar Prohibition and Excise Act, 2016, along with Rules 12A and 12B of the Bihar Prohibition and Excise Rules, 2021.
The Court 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.”
This means the Supreme Court will now test the legality and constitutional soundness of granting sweeping powers of confiscation to District Collectors.
Section 58 of the Bihar Prohibition and Excise Act, 2016 – Why It Matters
Section 58 empowers the District Collector to order the confiscation of vehicles, premises, or other properties allegedly used in the commission of offences under the prohibition law.
Critics argue that:
- Such administrative confiscation powers blur the separation between executive and judicial functions.
- Confiscation often happens before the completion of trial, raising concerns of violation of Article 21 (Right to Life and Personal Liberty) and Article 300A (Right to Property) of the Constitution.
- The auctioning process lacks transparency, standardised valuation, and fair procedure, leading to losses for both citizens and the state exchequer.
By agreeing to examine Section 58, the Supreme Court has opened the door to a possible landmark ruling on the balance between prohibition enforcement and constitutional rights.
The Larger Debate: Prohibition Laws in Bihar
Bihar’s prohibition policy, implemented in 2016, has been a subject of constant legal battles and public debate. While the government justifies it on social and moral grounds—claiming reduction in domestic violence, improvement in household savings, and curbing alcoholism—critics highlight:
- Harsh penalties for minor infractions.
- Misuse of power by authorities leading to wrongful seizures.
- Judicial burden with thousands of pending prohibition-related cases.
- Economic losses due to black market growth and smuggling.
The present case adds another dimension—whether confiscation powers under Section 58 are constitutional, fair, and reasonable.
Key Legal Issues Before the Supreme Court
- Validity of Section 58 – Does empowering District Collectors with confiscation powers violate constitutional principles?
- Due Process – Can property be seized and auctioned before conviction, or does that violate the right to property under Article 300A?
- Separation of Powers – Should executive officers (Collectors) perform what is essentially a judicial function of deciding confiscation?
- Transparency in Valuation and Auction – How should seized properties be valued to ensure fairness to both owners and the state?
The answers to these questions will not only determine the future of Bihar’s prohibition law but may also set a precedent for similar laws in other states.
Implications of the Case
- For Citizens – A ruling against Section 58 may protect vehicle and property owners from arbitrary confiscation and unfair auctions.
- For the State – Bihar’s enforcement mechanism may weaken if the confiscation provision is struck down or curtailed.
- For the Judiciary – The case highlights the judiciary’s role in ensuring that executive overreach does not trample constitutional rights.
- For Other States – Several Indian states have partial prohibition laws; this ruling may influence how those laws are implemented.
Conclusion
The Supreme Court’s decision to examine the validity of Section 58 of the Bihar Prohibition and Excise Act, 2016 marks a crucial turning point in the debate over prohibition laws in India.
While the Bihar government defends its strict prohibition regime, the judiciary is being asked to balance social policy objectives with the constitutional guarantee of property rights and due process.
The outcome of State of Bihar v. Shankar Baranwal could reshape how states implement prohibition laws and handle confiscated property. For now, all eyes remain on the Supreme Court as it takes up this significant case.
