MAHARASHTRA EXCISE OFFICIAL DOCUMENT ANALYSIS

Document Type: Government Resolution (GR) / Administrative Order

Reference Number: GR No. FLR-0622/Pr.Kra.150/RAUSU-2

Issued By: Government of Maharashtra, Home Department (Ministry)

Date of Issue: 10 January 2024

Reference to Previous Notification: GR No. FLR-0622/Pr.Kra.150/RAUSU-2, dated 09.01.2024

Effective Date: From date of publication (10 January 2024)

Portal Reference: www.maharashtra.gov.in (Reference Code: 202401161444409729)

SUMMARY

This Government Resolution amends the Bombay Foreign Liquor Rules, 1953 (BFLR) to permit FL-II (Foreign Liquor – Retail) licensees to operate their licenses through third-party conducting agents under a formal "Conducting Agreement" (करारनाम्य). The GR establishes comprehensive conditions, restrictions, eligibility criteria, fee structures, and accountability mechanisms governing agent-based license operations. Both the licensee and the agent remain jointly and severally liable for all regulatory compliance and financial obligations. The amendment applies exclusively to FL-II retail licenses and selected premium categories (FL-II/S.P.O. and FL-II/E.O.) operating in Mumbai and Maharashtra.

KEY PROVISIONS

I. LICENSE TYPES AFFECTED

• FL-II (Foreign Liquor – Retail Sealed Bottled Liquor)
• FL-II / S.P.O. (Super Premium Outlet) – introduced vide GR dated 23.06.2022
• FL-II / E.O. (Elite Outlet) – introduced vide GR dated 23.06.2022
• Ancillary licenses: CL (Country Liquor), FL, TOD-3 licenses may be attached to conducting agreement arrangement

II. ELIGIBILITY OF LICENSEE

Any FL-II licensee may request permission to operate the license through a third-party agent via conducting agreement, provided:

1. Request is made in prescribed form to the District Collector (as the license approval authority)
2. The licensee remains the principal and retains ownership of the license
3. Proper verification and inquiry is completed by the District Collector
4. All documentary requirements (as per clause 4) are submitted

III. ELIGIBILITY & DISQUALIFICATIONS OF AGENT

An agent may NOT operate a license if:

(i) Age Below 21 Years:

• Person below 21 years of age is prohibited.

(ii) No Mental Capacity:

• Person of unsound mind or lacking capacity to enter into contracts.

(iii) Poor Character:

• Person whose character is not good, as per District Collector's opinion.
• Exemption Clause: District Collector may remove this disqualification by recording written reasons after proper inquiry and satisfaction, if no objection exists.

(iv) Prior Termination of Employment/Agreement:

• Person whose employment, license conducting agreement, or license has been previously terminated.
• Exemption Clause: District Collector may remove this disqualification by recording written reasons after proper inquiry and satisfaction, if no objection exists.

(v) Criminal Conviction:

• Person convicted of any crime.
• Exemption Clause: District Collector may remove this disqualification by recording written reasons after proper inquiry and satisfaction, if no objection exists.

(vi) Black-Listed:

• Person whose name appears in the Black List (काळ्या यादी) for any cause.

(vii) Scheduled Excise Licensee or Family Member:

• Holder of Scheduled Excise License (अनुसूवचत अबकारी अनुज्ञप्ती) or any family member thereof.

(viii) Multiple FL-II Licenses:

• Person operating two or more FL-II licenses (in their own name or family name) or family member thereof.

IV. APPLICATION PROCESS & TIMELINE

Step 1: Form of Application

• Licensee must apply in prescribed form to the District Collector (as license approval authority)
• Application Fee: ₹10,000/- (दस हजार रुपये)
• The form shall be prescribed by the Commissioner, State Excise

Step 2: District Collector's Verification

• Upon receipt of application, District Collector shall:
  • Conduct complete verification of details mentioned in the application
  • Conduct such other inquiries as deemed necessary
  • Prepare draft conducting agreement in prescribed form as per Bombay Prohibition Act, 1949
  • Accept or reject the application

Step 3: Approval & Privilege Fee

• If approved, District Collector shall:
  • Levy prescribed privilege fee (विशेषाविकार शुल्क)
  • Register the conducting agreement in prescribed form
  • Grant approval for agent to operate license for a government-specified period

Step 4: Registration

• After District Collector's approval, the conducting agreement must be:
  • Registered within 7 days with the Secondary Registrar and Stamp Officer
  • Stamp duty payable at prescribed rates
  • Mandatory requirement for validity

V. VALIDITY PERIOD & RENEWAL

(1) Initial Validity:

• Conducting agreement remains valid until 31 March of the year in which it is approved.
• Maximum validity: Until the next following 31 March (maximum one financial year).

(2) Renewal Conditions:

• Renewal Period: If renewal is sought for the next financial year, application must be filed:
  • At least 1 month before 31 March (i.e., before agreement expiry)
  • In prescribed form to the licensing approval authority
  • Fresh approval and privilege fee required

(3) Consecutive Renewal Limitation:

• No agreement shall be renewed for the same person for more than 5 consecutive years (सलग ५ िषानुंतर िाढविता येणार नाही).

(4) Renewal Eligibility Certificates:

• For renewal, licensee or agent must provide proof/affidavit that:
  • No outstanding government dues exist
  • No valid complaint/objection is pending
  • No negative judicial/quasi-judicial order exists
  • No criminal conviction of agent or licensee
  • Agent not in Black List
  • No scheduled excise license held
  • Not operating more than two FL-II licenses
  • Full particulars as per Section 5 of original Conducting Agreement

(5) Authority to Approve Renewal:

• Renewal approval authority: License approval authority (लायसन्स मंजुरी प्राविकरणाने)

VI. EARLY TERMINATION OF AGREEMENT

(1) Mutual Consent Termination:

• If either licensee or agent wishes to terminate agreement before expiry:
  • Joint written application must be filed with licensing approval authority
  • Both parties' consent required
  • Application must be filed at least 1 month before termination

(2) Decision Timeline:

• Licensing approval authority shall decide within:
  • 1 month from receipt, OR
  • Before 31 March, whichever is earlier

(3) Privilege Fee on Early Termination:

• If agreement is terminated before its validity period expires:
  • Privilege fee is NOT refundable (सदर विशेषाविकार शुल्क परत मिळण्यास पात्र राहणार नाही)

VII. PRIVILEGE FEE (SPECIAL FEE)

(1) Fee Payable:

• Conducting agreement for FL-II license: 50% of annual license fee shall be charged as additional privilege fee each financial year.
  • Formula: Annual License Fee × 50% = Privilege Fee
  • This is in addition to the regular annual license fee (not a substitute)

(2) Fee Payable Before Approval:

• Privilege fee must be paid in advance (आगाऊ भरािे लागेल) before approval is granted

(3) Payment as per Bombay Prohibition Act, 1949 Rules:

• Privilege fee shall be levied as per Bombay (Privilege Fee) Prohibition Rules, 1954
• Payment must be made only after Government Treasury deposit (शासनजमा केल्यानंतरच)

(4) Special Categories – Premium Outlets:

• For FL-II / S.P.O. (Super Premium Outlet) and FL-II / E.O. (Elite Outlet):
  • Privilege fee shall be calculated at the privilege fee rate applicable to that premium category, NOT at the base FL-II rate
  • Privilege fee = Annual License Fee of that category × applicable privilege fee percentage

(5) Non-Payment Consequence:

• If annual privilege fee is not paid within prescribed time:
  • Agreement approval automatically lapses on 31 March of that financial year
• If renewal application is not filed with required privilege fee:
  • Agreement shall automatically terminate on 31 March

VIII. OPERATING RESTRICTIONS FOR AGENTS

(1) Authority Limitations:

• Agent may operate the license ONLY for business purposes (अनुज्ञप्तीचे व्यवहार चालविणे)
• Agent may NOT apply for:
  • Change of license location (licensed premises)
  • Change of layout within premises
  • Expansion or reduction of premises area
  • License transfer/relocation
  • License name changes
  • Any modification to the license

(2) Consequence of Unauthorized Modifications:

• If such applications are made by agent:
  • Agent is not eligible (पात्र राहणार नाही)
  • Even if licensee applies and receives approval, such approval is void and invalid (गैरलागू ि अिैि ठरेल)

(3) Unauthorized Sub-Leasing Prohibition:

• Agent cannot lease or sub-contract the license to any third person or sub-lessee (त्रयस्थ व्यक्तीस/ पोटभाडे कसही कराराद्वारे देऊ शकणार नाही)

(4) Maximum Number of FL-II Licenses for One Agent:

• Maximum 2 FL-II licenses may be operated by one agent (whether in personal name, family name, partnership, private company, or any similar entity)
• Includes all licenses where agent is a stakeholder

(5) Definition of "Family":

• "Family" (कुटुंब) means:
  • One male and his spouse (or more than one spouse, where permitted)
  • AND their dependent children
  • Does NOT include extended family or distant relatives

(6) Definition of "Private Company":

• "Private Company" (खाजगी कंपनी) shall have the meaning assigned in Companies Act, 1956

(7) Counting of Multiple Licenses:

• An FL-II license is deemed as belonging to a family/partnership/company if it is held in the name of:
  • Any family member, OR
  • Any director of the private company, OR
  • Any partner in the partnership firm
• Such holding shall be counted towards the maximum of 2 licenses

IX. AGENT EMPLOYMENT & CONDUCT

(1) Agent's First Requirement – Own Employment:

• Upon executing the conducting agreement, agent must:
  • Immediately secure their own employment terms (स्ितःचा नोकरनामा मुंजूर करून घ्यािा)
  • With written approval (विहीत/लिखित मंजूरी) from licensing authority

(2) Appointment of Sub-Employees:

• For day-to-day operations, agent may:
  • Appoint other employees/staff with written consent of original licensee
  • Such employees shall be bound by employment contract terms (नोकरनाम्याच्या तरतूदी लागू असतील)

(3) Prohibited Conduct:

• Agent holding conducting agreement shall NOT:
  • Hold more than one scheduled excise license (एकापेक्षा अविक अनुसूवचत अबकारी अनुज्ञप्ती)
  • Operate other FL-II licenses via conducting agreement while already operating one
  • Family member also cannot hold other FL-II agreements simultaneously

(4) Declaration Requirement:

• Agent must file affidavit (प्रवतज्ञापत्र) certifying:
  • Not holding more than one scheduled excise license
  • Not operating other FL-II agreements
  • Full disclosure of all excise licenses held by agent or family members

X. JOINT & SEVERAL LIABILITY

(1) Full Accountability: Both original licensee (अनुज्ञप्तीिारक) and agent (अवभकता व्यक्ती) are:

• Jointly and severally liable (सुंयुक्तपणे ि पृथ:कपणे जबाबदार)
• For all breaches, violations, misconduct in license operation
• For all government dues and revenue losses (महाराष्ट्र दा�बुंदी कायदा, १९४९)

(2) Government Dues Responsibility:

• Original licensee's responsibility is absolute and inalienable (मूळ अनुज्ञप्तीिारकाची जबाबदारी अकाट्य आहे)
• Licensee cannot escape responsibility by using conducting agreement as a defense
• Licensee remains liable even if agreement is terminated

(3) Regulatory Action: Both parties are liable under:

• Bombay Prohibition Act, 1949 – all provisions
• All rules, conditions, directions, orders issued thereunder (presently and in future)
• Penalties, fines, criminal proceedings as per law

(4) Misfeasance: If any misfeasance or misconduct occurs resulting in government revenue loss, both parties shall face:

• Joint action (सुंयुक्तपणे)
• Separate action (पृथ:कपणे)
• As per Bombay Prohibition Act, 1949 provisions

XI. SPECIFIC GROUNDS FOR TERMINATION OF AGREEMENT

Conducting agreement shall be liable for termination and agent shall be disqualified from future agreements if:

(A) Unauthorized Import of Foreign Liquor:

• If agent or family member is convicted in competent court of:
  • Importing foreign liquor without authorization (परराज्यातील मद्य अनविकृत वरत्या आयात करणे)
  • Possessing unauthorized foreign liquor (बाळगणे)
  • Hoarding unauthorized foreign liquor (साठा करणे)
  • Selling unauthorized foreign liquor (विक्री करणे)

(B) Duty-Evasion Liquor:

• If agent or family member is convicted in competent court of:
  • Possessing excise-duty unpaid liquor (उत्पादन शुल्क चुकविलेले मद्य बाळगणे)
  • Hoarding excise-duty unpaid liquor (साठा करणे)
  • Selling excise-duty unpaid liquor (विक्री करणे)

(C) Spurious/Counterfeit Liquor:

• If agent or family member is convicted in competent court of:
  • Direct/indirect participation in manufacturing fake/counterfeit liquor (बनािट मद्य वनर्षमतीत प्रत्यक्ष / अप्रत्यक्ष सहभाग)
  • Possessing counterfeit liquor without authorization (बनािट मद्य अनविकृत वरत्या बाळगणे)
  • Hoarding counterfeit liquor (साठा करणे)
  • Selling counterfeit liquor (विक्री करणे)

(D) Overcharging – Multiple Instances:

• If agent is convicted in competent court of:
  • Selling liquor at price ABOVE the maximum retail price (MRP) on THREE or more occasions within one financial year
  • Complaint recorded against the license for such violations (विसुंगती प्रकरण नोंदविले)

(E) Fraudulent Documentation:

• If agent is convicted in competent court of:
  • Submitting false/fraudulent documents for obtaining the conducting agreement

XII. TERMINATION PROCEDURE & CONSEQUENCES

(1) Agreement Cancellation:

• Upon conviction in any ground listed in Section XI, the conducting agreement:
  • Is immediately liable for cancellation
  • Shall be revoked (र� करण्यात येईल)

(2) Disqualification from Future Agreements:

• Agent shall be perpetually disqualified from:
  • Entering into any future conducting agreement
  • Operating any license via conducting agreement

(3) Penalty for Operating Without Proper Approval:

• If agent operates a license without prior approval/authorization:
  • Penalty = 5 times the privilege fee + interest (विशेषाविकार शुल्काच्या ५ पट देय व्याजासह दुंड)
  • License shall be revoked (अनुज्ञप्ती र� करण्यात येईल)

XIII. BANK GUARANTEE REQUIREMENT

(1) Mandatory Bank Guarantee:

• Agent operating FL-II license via conducting agreement must:
  • Submit bank guarantee from a Nationalized Bank (राष्ट्रीयकृ त बँके ची बँक गॅरुंटी)
  • Amount = the higher of:
    • License approval fee, OR
    • License renewal fee
  • Timing: Before conducting agreement is executed

(2) Purpose:

• Bank guarantee secures:
  • Agent's performance obligations
  • Government revenue protection

XIV. DEATH/INCAPACITY OF LICENSEE OR AGENT

(1) Nominee Nomination Requirement: If either licensee or agent dies or becomes incapable of making decisions (अन्य आजाराने वनणगय घेण्यास असक्षम) during agreement validity:

• Licensee must nominate a legal heir as successor
• Agent must nominate a legal heir as successor
• Nominee details must be:
  • Mentioned in the conducting agreement (भाडेकरारात नमुद)
  • Written consent obtained (संमती भाडेकरारात नमुद)

(2) Partnership/Company Succession:

• For partnership firms (भागीदारी व्यिसायी सुंस्था):
  • Constitutional provisions for succession must be detailed in partnership deed
• For private companies (खाजगी कुं पनी):
  • Succession procedures per company constitution must be detailed
• For associations/trusts (मुंडळ):
  • Succession procedures per constitutional documents must be detailed

(3) Contingency Provisions:

• Conducting agreement must clearly specify:
  • Succession procedure for unforeseen circumstances
  • Operational continuity provisions
  • Process for executing deed/agreement in case of death/incapacity

XV. REGULATORY COMPLIANCE & DISPUTE RESOLUTION

(1) Regulatory Compliance: Both licensee and agent must:

• Comply with all provisions of Bombay Prohibition Act, 1949
• Comply with all rules, conditions, directions, orders issued thereunder
• Comply with all future rules, conditions, directions, orders that may be issued

(2) Dispute Resolution Mechanism:

• All disputes arising from the conducting agreement (including):
  • Terms and conditions disputes
  • Financial disputes
  • Performance disputes
  • Conduct disputes
• Shall be mandatorily resolved by the prescribed authority (विहीत प्राविकरणाकडे जाऊन सोडविणे बुंिनकारक)

(3) Limitation on Disputes:

• Such disputes/legal proceedings shall NOT affect:
  • Government's ownership rights in the license property
  • Government's statutory authority/prerogatives
  • State's ultimate sovereignty over the license

(4) Override Clause:

• Section 58 of Bombay Prohibition Act, 1949 remains fully operative
• Government retains full authority to:
  • Amend regulations
  • Change policy
  • Revoke/cancel licenses
  • Take any action as per law

(5) Conflicting Provisions:

• If any clause of conducting agreement conflicts with:
  • Bombay Prohibition Act, 1949, OR
  • Any subordinate rule/regulation thereunder
  • Such conflicting clause is VOID and of no effect (गैरलागू /वनरथगक ठरतील)

(6) Agent's Non-Claim to License:

• Agent shall NEVER have any claim on:
  • The license property
  • Government's privileges in the license
  • Future renewal or continuation
  • Such claim is specifically prohibited (हक्क साुंगू शकणार नाही)

(7) Non-Indemnification:

• Government and licensee are NOT liable to agent for:
  • Any loss or damages arising from government policy changes
  • Any loss from future regulatory amendments
  • Any loss from license cancellation or revocation
  • Agent assumes all such risks (अशा भविष्ट्यातील होणाऱ्या शासनाच्या निणयामुळे होणाऱ्या नुकसानीच्या भरपाईस अवभकता पात्र राहणार नाही)

XVI. FUTURE RIGHTS OF AGENT

(1) Eligibility for Partnership:

• Upon expiry of agreement, agent may:
  • Apply to become a partner (भागीदार) in the license holder's business (व्यक्तीचे नािे कायगरत अनुज्ञप्ती)
  • Apply to operate independently as license holder (त्याच्या नािािर स्ितंत्रपणे िगग करणे)
  • BUT only as per existing rules and on licensee's request

(2) No Automatic Rights:

• Agreement itself confers NO independent rights on agent
• All future rights depend on:
  • Licensee's future request/consent
  • Applicable regulations at that time
  • Government approval

(3) No Claim on License:

• Agent cannot claim ownership or permanent stake in the license based on conducting agreement

XVII. PRESCRIBED FORMS & AUTHORITY

(1) Form Prescription Authority:

• Commissioner, State Excise shall prescribe:
  • Application form for conducting agreement
  • Conducting agreement draft form
  • All required formats and schedules

(2) Forms Shall Include:

• Name and details of licensee
• Name and details of agent
• License number and type
• Licensed premises details
• Period of agreement
• Privilege fee details
• Terms and conditions
• Signatures and attestations

XVIII. STATUTORY AUTHORITY & PRECEDENCE

(1) Legal Basis: This order is issued under:

• Bombay Prohibition Act, 1949 – all provisions
• Bombay Foreign Liquor Rules, 1953
• Maharashtra Country Liquor Rules, 1973
• Bombay (Privilege Fee) Prohibition Rules, 1954
• All subordinate rules, orders, and directions

(2) Future Legislative Changes:

• If future amendments/new rules are enacted regarding conducting agreements:
  • Both parties shall be bound by such changes
  • Existing agreements shall be deemed automatically modified to comply (विहीत किंवा नव्या वनयमांसह सुसंगत)
  • No compensation for such changes

(3) Finality: This GR is:

• Final administrative decision on the subject
• Binding on all authorities (District Collectors, Excise Officers, etc.)
• Binding on all applicants and licensees

XIX. MISCONDUCT & REVENUE PROTECTION

(1) Misconduct Definition: Any violation of:

• License conditions
• Regulatory rules
• Criminal law provisions
• Ethical standards

(2) Liability for Misconduct: If misconduct occurs:

• Original licensee: Fully responsible
• Agent/Employee: Joint responsibility with licensee
• Both liable for:
  • Revenue loss to government
  • Criminal prosecution
  • License cancellation
  • Financial penalties

(3) Contingency Liability:

• Even if conducted via agent, licensee cannot escape liability for:
  • Failure to properly supervise agent
  • Failure to ensure compliance
  • Negligent oversight

XX. ADMINISTRATIVE PROCEDURES & TIMELINE

XXI. NON-COMPLIANCE CONSEQUENCES

(1) If Privilege Fee Not Paid in Time:

• Agreement approval automatically lapses on 31 March

(2) If Renewal Not Applied Before Deadline:

• Agreement automatically terminates on 31 March

(3) If Agent Operates Without Approval:

• Penalty: 5 times privilege fee + interest (विशेषाविकार शुल्काच्या ५ पट देय व्याजासह दुंड)
• License revoked (अनुज्ञप्ती र�)

(4) If Agent Makes Unauthorized Modifications:

• Such modifications are void (गैरलागू)
• Agent not eligible to apply (पात्र राहणार नाही)
• Licensee's approval also void (गैरलागू ि अिैि)

(5) If Agent Commits Disqualifying Acts:

• Agreement immediately revoked
• Agent perpetually disqualified from future agreements

(6) Non-Payment of Annual Privilege Fee:

• Agreement automatically lapses on 31 March of that year

XXII. SPECIAL PROVISIONS FOR PREMIUM OUTLETS

(1) Applicable Categories:

• FL-II / S.P.O. (Super Premium Outlet)
• FL-II / E.O. (Elite Outlet)
• Introduced vide GR dated 23.06.2022

(2) Privilege Fee for Premium Outlets:

• Same conducting agreement framework applies
• Privilege fee = Annual License Fee (of premium category) × applicable privilege fee %
• NOT calculated at base FL-II rate
• Rate determined by premium tier

(3) All Other Conditions:

• All other conditions, restrictions, and requirements of standard FL-II conducting agreements apply equally

XXIII. IMMUNITY & INDEMNITY

(1) Government Indemnity:

• Government shall NOT indemnify agent for:
  • Loss from policy changes
  • Loss from regulatory amendments
  • Loss from agreement termination
  • Loss from license revocation

(2) Agent Bears All Risk:

• Agent operates entirely at own risk
• Full responsibility for:
  • Market conditions
  • Regulatory changes
  • Government decisions
  • Unforeseen circumstances

(3) Limitation on Claims:

• Agent CANNOT claim:
  • Compensation from government
  • Damages for policy changes
  • Continuation rights
  • Renewal guarantees

WHO IS AFFECTED

1. FL-II Retail Licensees – Foreign Liquor retail sellers operating in sealed bottles in Mumbai and Maharashtra
2. Prospective Agents – Third parties seeking to operate FL-II licenses under conducting agreements
3. District Collectors – Verification and approval authority
4. Commissioner, State Excise – Form prescription authority and regulatory oversight
5. Subordinate Excise Officers – Compliance and enforcement authority
6. Registered Agents – Already operating under conducting agreements
7. FL-II / S.P.O. Licensees – Super Premium Outlets (eligible for conducting agreement)
8. FL-II / E.O. Licensees – Elite Outlets (eligible for conducting agreement)
9. CL, FL, TOD-3 Licensees – If ancillary to FL-II conducting arrangement

IMPORTANT NOTES / CONDITIONS / PENALTIES

Critical Conditions:

1. Original Licensee Cannot Escape Liability:

   • All government dues remain licensee's sole responsibility
   • Cannot be offset against conducting agreement
   • Conducting agreement is merely an operational arrangement

2. Joint & Several Liability:

   • Both licensee and agent liable for breaches, violations, criminal acts
   • Either can be prosecuted independently

3. Government Sovereignty Preserved:

   • Government retains full authority to:
     • Amend regulations at any time
     • Revoke/cancel licenses
     • Change policy
     • Impose new conditions
   • Conducting agreement does NOT limit government powers

4. Agent Has No Proprietary Rights:

   • Agent is not a partner or owner
   • Agent cannot claim continuity of agreement
   • Agreement strictly terminable at government discretion

5. Privilege Fee Non-Refundable:

   • If agreement terminated early, privilege fee is NOT refunded

6. 5-Year Renewal Limit:

   • No agent can hold conducting agreement for same license more than 5 consecutive years
   • After 5 years, fresh agent must be selected

7. Maximum 2 FL-II Licenses per Agent:

   • One agent can operate at most 2 FL-II licenses
   • Includes licenses held via conducting agreement

8. Conflicting Terms Void:

   • Any agreement clause conflicting with law is automatically void

9. Bank Guarantee Mandatory:

   • Agents must provide nationalized bank guarantee equal to approval/renewal fee (whichever higher)

10. No Sub-Leasing:

    • Agent cannot lease license to third party or sub-lessee

Penalties: