Som Distilleries Licence Renewal Upheld by Supreme Court

Som Distilleries and Breweries Limited, referred to here as Som Distilleries, has retained the benefit of a Madhya Pradesh High Court direction requiring renewal of manufacturing licences after the Supreme Court dismissed the state's challenge on that issue. The Court, however, removed the Rs 1 lakh cost order, damages-related relief and remarks against the Advocate General's office.

What did the Supreme Court decide in the Som Distilleries case?

The Supreme Court confirmed the Madhya Pradesh High Court's direction to renew the liquor manufacturing licence of Som Distilleries, finding no reason to interfere with that part of the September 24, 2026 judgment. The order was passed on October 27, 2026, in State of Madhya Pradesh & Anr. v. Som Distilleries Pvt. Ltd. & Ors., SLP (C) Nos. 36079-36080/2026.

The bench comprised Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana. It held that, considering the specific facts and circumstances, the High Court's renewal direction did not warrant interference. This preserves the core relief obtained by the company and permits the resumption of manufacturing operations subject to the licence renewal direction.

At the same time, the Supreme Court modified the High Court ruling in favour of the state on other issues. It set aside the direction imposing Rs 1 lakh in costs on the Madhya Pradesh government, the observations allowing the company to claim damages, costs and losses from the state for alleged mala fide action, and the adverse observations concerning the office of the Advocate General.

How did the licence dispute develop?

The dispute began on February 4, 2026, when the Madhya Pradesh Excise Commissioner suspended eight excise licences linked to Som Distilleries and associated entities. The suspension followed criminal proceedings involving allegations of illegal transportation of liquor through forged permits.

The state action was taken under Section 31 of the Madhya Pradesh Excise Act, 1915. The provision allows the licensing authority to suspend or cancel a licence on specified grounds, including offences by a licensee or by persons acting on its behalf. The licence suspension affected the group companies' manufacturing operations during the period of closure.

The companies later sought renewal of their excise licences, but the renewal applications were rejected through an order dated June 18, 2026. Som Distilleries challenged that decision before the Madhya Pradesh High Court. Earlier proceedings before the High Court had also considered the distinction between suspension-related action and the statutory process for renewal.

On September 24, 2026, the High Court quashed the June 18 rejection order and directed that all manufacturing licences be renewed within 15 days. It additionally imposed Rs 1 lakh in costs on the state and preserved the companies' right to seek damages or losses for the closure period before an appropriate forum. The state then approached the Supreme Court.

Which parts of the High Court ruling were changed?

The Supreme Court left the licence renewal direction intact but removed the additional reliefs granted by the High Court. Its order narrowed the outcome to renewal of the relevant licence and did not retain the High Court's costs, damages-related observations or criticism of the state's law officers.

In particular, the Court set aside the High Court's paragraph A-29 observations that had given the company liberty to claim damages, costs and losses from the state for alleged mala fide conduct. It also removed the corresponding relief directions. The ruling does not adjudicate any damages claim arising from the operational closure.

The Supreme Court further held that there was no need to impose Rs 1 lakh in costs on the Madhya Pradesh government. It also expunged the High Court's observations in paragraph A-11 that had attributed the departmental action to wrong legal advice from the office of the Advocate General.

What does the ruling mean for Som Distilleries and the state?

For Som Distilleries, the immediate legal effect is that the High Court's direction for licence renewal survives the state's appeal. The company had said after the High Court judgment that renewal would facilitate the resumption of operations at its Bhopal plant. The Supreme Court's order maintains that operational relief.

For the Madhya Pradesh government, the ruling removes the financial cost of Rs 1 lakh and the judicial observations that had criticised the Advocate General's office. It also removes the High Court's express permission concerning damages and losses. The state challenged the High Court ruling, but its challenge did not succeed on the central renewal issue.

The decision is relevant to regulated liquor manufacturing because it distinguishes the renewal of a licence from other enforcement actions. The High Court had held that renewal must be assessed on its merits under the Excise Act. The Supreme Court did not disturb that conclusion while limiting the ancillary reliefs granted against the state.

There is no stock-price movement, revenue impact or quantified closure loss stated in the available information. Investors and market participants therefore have a clear legal outcome on licence renewal but no disclosed financial measure of the effect of the suspension or the reopening of manufacturing operations.

Conclusion

The Supreme Court's October 27 order gives Som Distilleries the principal relief it sought by retaining the direction to renew its manufacturing licence. But it also resets the balance of the High Court ruling by removing Rs 1 lakh in costs, damages-related observations and adverse comments about the Advocate General's office.

The key matter to watch is the implementation of the licence renewal direction and the restoration of operations at the Bhopal plant. The available order does not provide a quantified financial impact from the closure period or a scheduled further hearing on damages, while the criminal proceedings that preceded the suspension remain separate from the renewal ruling.