The Supreme Court of India is set to examine the constitutional validity of Section 58 of the Bihar Prohibition and Excise Act, 2016, which grants District Collectors the authority to confiscate property involved in offenses under the Act. The case arises from a petition filed by the State of Bihar, challenging a Patna High Court order that criticized the auctioning of a seized vehicle at “throwaway prices.”
A bench led by Chief Justice BR Gavai, along with Justices K Vinod Chandran and NV Anjaria, issued a notice in the matter and stayed the High Court’s direction regarding payment by the valuer. The court observed:
“Issue notice, since we are inclined to consider the question with regard to the 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.”
Background of the Case
The dispute stems from the confiscation and auction of a Tata Safari SUV belonging to the respondent, Shankar Baranwal. The vehicle was seized in 2020 after being allegedly found carrying six 180 ml bottles of Royal Stag whisky, in violation of Bihar’s prohibition laws. After failed appeals, the vehicle was auctioned in 2022.
The respondent challenged the auction in the Patna High Court, which found several flaws in the valuation process. It noted that the vehicle, originally purchased in 2013 for approximately ₹14 lakhs, was randomly valued at ₹3.2 lakhs in 2021, and later auctioned for just ₹1.85 lakhs—without any individualized assessment.
High Court’s Criticism of Vehicle Valuation
The Patna High Court strongly criticized the practice of wholesale, non-transparent valuations carried out by Motor Vehicle Inspectors in Bihar, observing:
“Property cannot be valued with the naked eye by the bureaucrats… Without reference to date of purchase, depreciation, or any government policy, the evaluation process is arbitrary and causes losses to both the state exchequer and individuals.”
Compensation Ordered by High Court
In its ruling, the High Court held that the respondent was entitled to ₹3.2 lakhs, but deducted ₹20,000 as penalty. It directed the Assistant District Transport Officer (ADTO) to pay ₹1.35 lakhs, while ordering the State of Bihar to compensate ₹1.65 lakhs for the improper vehicle confiscation and auction process.
Supreme Court to Review Collector’s Confiscation Powers
With the matter now before the Supreme Court, legal attention will focus on whether the District Collector’s powers under Section 58 — along with Rules 12A and 12B of the Bihar Prohibition and Excise Rules, 2021 — meet constitutional standards of due process and fairness.
Case Title:
The State of Bihar & Ors. vs. Shankar Baranwal,
SLP(C) No. 20640/2025
