In an unexpected turn of events, a wine shop in Rajasthan drew with a base price of Rs. 70 lakh drew a bid of Rs. 510 crores in an e-auction. The e-auction, which began at 11 AM in the morning continued till midnight and the gavel was finally down at the highest bid of Rs. 510 crores. The wine-shop is located in the Nohar area in Hanumangarh, Rajasthan.
The bizarre comes when an e-auction has been taking place for over 7,000 liquor shops in Rajasthan since last week. Earlier, there was a lottery system through which the government used to get a fixed reserve price of the shops due to the fact that there was a minimum reserve price in the liquor shop allotment. However, this year the Rajasthan state government introduced a new excise policy in which it mentioned that the liquor shop allotment will be done through e-auction instead of the lottery system.
The e-auction of these wine shops not only witnessed an average of 30% or more bidding than the base price but in a competition of epic proportions, two women outbid everyone and bought a wine shop for a whopping Rs. 510 crores. In 2019, the shop was sold for Rs. 65 lakhs in a lottery, but for the first time, the state will make money off of a wine shop that has received the highest bid of Rs. 510 crores. The final bid was over 700 times the base price of the shop (Rs. 72 lakhs).
According to reports, the excise department sent a demand notice was sent to the two women who outbid everyone. In the case a bidder fails to deposit the amount, the allotment will be cancelled, and the security deposit of Rs. 1 lakh, which was already collected, will be forfeited. The reports also state that the final bid not only left the bidders shocked but also the officials from the Excise department who never expected the shop to draw such a high bid.
This is not just an isolated event as another wine shop in Churu was sold for Rs. 11 crores while another wine shop in Sanganer, Jaipur, was sold in the e-auction for Rs. 8 crore. Additionally, two wine shops in Hanumangarh were sold for Rs. 11 crores each. One should note that the base price of most of these shops was between 85 lakhs to 2 crores only.
CR Dewasi, the Additional Commissioner, excise policy said that excise department used to get a revenue of Rs. 700-800 crore back when a reserve price was set and no e-auction mechanism was set in place. The excise department earned revenue of Rs. 10,500 crores in the last financial year, even when the COVID-19 impact was at its peak and most liquor shops remained closed for more than a month. According to Dewasi, the department is expecting Rs. 13,000 crores in revenue after the e-auction gets completed. On being asked as to the reason why there are such high bids on the sale of liquor shops, Dewasi said, said, “E-auction of the wine shops is the reason behind high bidding for wine shops.”
“Out of the 7,665 wine shops in the state, e-auction of 3,572 wine shops have been done in the first phase which will continue till March 10,” he added.
According to excise department officials, there are over 7,000 liquor shops in Rajasthan which includes IMFL and country liquor. For the e-auction, a person will not be given more than 5 shops in Rajasthan and not more than 2 shops in the same district. For a person to participate in the e-auction and bid for a shop having the reserve price of Rs. 50 lakh, they have to deposit Rs. 40,000 application fee with Rs. 50,000 as earnest money. The same way, for shops that have a reserve price of Rs. 50 lakhs and more and up to Rs. 2 crores, an applicant must the application fee of Rs. 50,000 and Rs. 1 lakh security money. To bid for a shop that has a reserve price of more than Rs. 2 crores, the applicant must submit Rs. 60,000 as application fee with Rs. 2 lakhs as security money. The excise department has warned that the application fee will be non-refundable.