India’s first legal alcohol home delivery startup HipBar might have to close down their services permanently in Bengaluru. Karnataka High Court, in a ruling, stated that the excise laws do not have the provisions to permit licensing of the alcohol delivery under Karnataka Excise Act, 1965.
The verdict of banning the online sale and home delivery of alcoholic beverages in the state was delivered by HC Justice S Sujatha. The HC also dismissed a petition filed by the alcohol delivery startup.
“Indisputably, liquor is deleterious to the health of mankind. The social stigma attached to it as far as the family and society are concerned cannot be lost sight of. Younger generation including children below the permissible age succumbing to this temptation of liquor consumption may not be stringently regulated through online orders. The eligibility of age and sound mind to receive and consume liquor is difficult to monitor with the trade carried out by the petitioner-company,” Justice Sujatha said.
The Chennai-based startup, founded in 2015, operates out of Bengaluru, Goa and Mahe in Puducherry. The company got its licence to deliver alcohol in Bengaluru in 2017 from Karnataka Excise Department.
The legal struggles have surrounded the company ever since a Kannada news channel ran a report highlighting the loopholes in the functioning of HipBar. Amidst the controversy, the company decided to discontinue its services in November 2018. HipBar’s license was withdrawn in the same month.
HipBar’s founder, Prasanna Natarajan, also states that the excise department had created a committee to formulate the appropriate rules for alcohol delivery licensing. However, in November 2018, the permission was revoked without any show-cause notice.
Following the developments, HipBar had filed a writ in the Karnataka High Court earlier this year. The company had claimed that it does not require any permission as it operates within guidelines set by the Excise Department. The startup also clarified that they are just a delivery agent for legal age customers and they always maintained that they always do age verification.
HipBar not just delivers alcohol, but also acts as a payment wallet for such purchases. The Reserve Bank of India (RBI) had granted a wallet licence to HipBar in 2017, under the Payment and Settlement Systems Act, 2007. However, the company came to light after the RBI had imposed a penalty of INR 10.85 Lakh for non-compliance of regulatory guidelines.