M/S Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
[2026] 10 S.C.R. 232 : 2026 INSC 1009
M/s Balaji Formalin Pvt. Ltd. & Anr.
v.
Union of India & Anr.
(Writ Petition (C) No. 893 of 2019)
18 September 2026
[J.B. Pardiwala* and K. Vinod Chandran, JJ.]
Issue for Consideration
Issue arose whether rr.18A and 18B, inserted by the Maharashtra
Poisons (Amendment) Rules, 2011, in the Maharashtra Poisons
Rules, 1972, could be said to be violative of Arts.14 and
19(1)(g) of the Constitution.
Headnotes†
Maharashtra Poisons Rules, 1972 – rr.18A and 18B – Validity
of – Writ petition by the petitioners seeking declaration
that Notification dated 21.01.2011 be declared ultra vires
the Poisons Act, 1919, as well as the Constitution to the
extent of insertion of rr.18A and 18B, respectively in the
Maharashtra Poisons Rules – Petitioner’s case that rr.18A
and 18B restrict purchase of methanol, and mandate the
addition of bitterant and colourant to methanol before sale
to a non-drug manufacturer; and by operation of r.18B, any
possession of methanol without a licence in Form A liable
to confiscation – High Court dismissed the petitions and
upheld the validity of the impugned rules – Correctness:
Held: rr.18A and 18B are violative of Arts.14 and 19(1)(g)
of the Constitution – Restriction imposed by sub-rule (1) of
r.18A is disproportionate or rather wider than what the object
justifies – It proceeds on the erroneous understanding that by
verifying licence in Form A the seller would be able to ascertain
the use of the methanol – Restriction fails to strike a balance
as, it shifts the burden onto a class of persons while also
leaving the public interest unserved – Thus, the sub-rule fails
to constitute a reasonable restriction in public interest within the
meaning of Art.19(6), and thus, violate Art.19(1)(g) – As regards
sub-rule (2) of r.18A, the requirement of addition of bitterant
and colourant in methanol prescribed therein fails the test of
* Author
[2026] 10 S.C.R. 233
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
being reasonable and having a proximate nexus to the object –
Parthasarthy Committee Report would reveal manifold causes
for liquor tragedies apart from methanol being sold illegally by
the licensees, being diverted through illegal and unlicensed
channel, or pilferage – Person who indulges in diverting methanol
through illegal or unlicensed channels, or by pilferage, may not
pass through the point of sale that the impugned rule seeks to
regulate – What sub-rule (2) achieves is mere identification at the
cost of restricting marketability of the final product and imposing
additional financial burden on the industries – In practicality, the
impugned rules prescribe a regulatory framework that does not
prevent the misuse of methanol in liquor which takes place in
the unregulated field – Sub-rule even in the best case of full
compliance cannot prevent the misuse it aims to prevent – Thus,
it cannot be said to bear a reasonable and proximate nexus with
the object it seeks to achieve – It addresses a mischief it does
not in fact remedy while imposing a continuous burden on the
industries – Furthermore, intention behind the introduction of the
impugned rules cannot be discreditied – Although, the intention in
mandating denaturants was identification, yet the intention solely
would not pass the test of manifest arbitrariness – Impugned rules
cannot be said to be reasonable or rather a rational application of
mind in exercising the law-making power – Impugned notification
is manifestly arbitrary and lacks rational nexus with the object
sought to be achieved, thereby violating Art.14 – Also, impugned
rules fail to pass the test of proportionality, and result in violation
of the fundamental rights guaranteed u/Art.19(1)(g) of the non-
drug manufacturers – Maharashtra Poisons (Amendment) Rules,
2011. [Paras 35-60]
Liquor – Hooch Tragedies, involving laththa laced with
methanol – Prevention – Suggestions to States and Union
Territories to prevent hooch tragedies – Suggestions given
as regards cooperation and working of various Departments,
as regards the existing Rules in States/Union Territories,
and as regards health and awareness – Suggestions
emphasise breaking the chain of supply and demand of
illicit liquor by strict implementation of the State Prohibition
Law; strengthening enforcement at state borders; and
regulation of methanol – Implementation of peripheral laws
concerning procurement, manufacture, transportation, sale
234 [2026] 10 S.C.R.
Supreme Court Reports
and consumption of liquor within the state; State police, in
coordination with the prohibition department and the excise
department, to identify and bring to book local breweries;
monitoring of industrial units to find out which industrial units
are manufacturing such chemical solvents and selling them
illegally to liquor makers; existing rules in a State, if any,
which regulate methanol be amended; State rules governing
the grant of licence and permit require a comprehensive
re-look, to ensure that a licence or permit is not granted as a
matter of course but only after due verification; any person
who is found to have defaulted or breached the conditions
of the licence or permit, or the rules made thereunder, liable
to have such licence or permit suspended or cancelled, and
should further be debarred from being granted any fresh
licence or permit; Methanol be transported in dedicated
tankers earmarked exclusively for that purpose, to eliminate
the possibility of pilferage or substitution; State Health
and Family Welfare Department to have a comprehensive
policy and a specialized cell to handle liquor tragedies –
Though the Court may issue various directions, yet the
police machinery to see to it that the provisions of the Act
governing regulation of alcohol are implemented strictly and
effectively. [Paras 61-67]
Legislation – Subordinate legislation – Challenged to:
Held: Can be on the same grounds available against a plenary
legislation – Subordinate legislation should not be an exercise
of power that is unreasonable, lacking an adequate determining
principle, irrational, excessive or disproportionate – Object behind
the State action, the manner in which it is undertaken, and its
effect on the fundamental rights, all must meet the tests of Part
III of the Constitution. [Para 24]
Case Law Cited
Goodwill Paint & Chemical Industry v. Union of India [1991] Supp.
1 SCR 219 : (1992) Supp. 1 SCC 16; State of Tamil Nadu v. P.
Krishnamoorthy & Ors. [2006] 3 SCR 396 : (2006) 4 SCC 517;
Mahalakshmi Sugar Mills Co. Ltd. v. Union of India & Ors. [2008]
5 SCR 793 : (2009) 16 SCC 569; Vasu Dev Singh v. Union of India
[2006] Supp. 8 SCR 535 : (2006) 12 SCC 753; Mohd. Faruk v.
State of M.P. & Ors. [1970] 1 SCR 156 : (1969) 1 SCC 853;
[2026] 10 S.C.R. 235
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
K.S. Puttaswamy (Privacy-9 J.) v. Union of India & Ors. [2017]
10 SCR 569 : (2017) 10 SCC 1 – referred to.
List of Acts
Poisons Act, 1919; Maharashtra Poisons Rules, 1972; Constitution
of India; Maharashtra Poisons (Amendment) Rules, 2011.
List of Keywords
Notification No. DRG 2006/1006/C.R. 659/06/DRUGS-2
dated 21.01.2011; Restrict purchase of methanol; Addition of
bitterant and colourant to methanol before sale to non-drug
manufacturer; Possession of methanol without licence in Form
A liable to confiscation; Reasonable restriction in public interest;
Parthasarthy Committee Report; Liquor tragedies; Methanol;
Pilferage; Reasonable and proximate nexus; Test of manifest
arbitrariness; Test of proportionality; Non-drug manufacturers;
Hooch Tragedies; Laththa laced with methanol; Prevention of
hooch tragedies; Cooperation and working of various Departments;
Rules in States/Union Territories; Health and awareness; State
Prohibition Law; Implementation of peripheral laws; Subordinate
legislation; Plenary legislation.
Case Arising From
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.
893 of 2019
Under Article 32 of the Constitution of India
With
Writ Petition (Civil) No. 1059 of 2019 and Civil Appeal No. 13008
of 2026
Appearances for Parties
Advs. for the Petitioner(s):
Balbir Singh, Sr. Adv., Mohan Jayakar, Sandeep Sudhakar
Deshmukh, Abhay Dhadiwal, Nikhil Wable, Nishant Sharma,
Ankur Savadikar, Kartik Sharma.
Advs. for the Respondent(s):
Anand Dilip Landge, Siddharth Dharmadhikari, Aaditya Aniruddha
Pande, Shrirang B. Varma.
236 [2026] 10 S.C.R.
Supreme Court Reports
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided into the
following parts:-
INDEX§
I. BACKGROUND ............................................................... 2
II. SUBMISSIONS ON BEHALF OF THE PARTIES ........... 6
i. Submissions on behalf of the petitioners in W.P. No.
893 of 2019 & appellant in SLP(C) No. 16236 of 2019 ...
6
ii. Submissions on behalf of the Respondent-State ..... 8
III. ISSUE FOR CONSIDERATION ....................................... 10
IV. ANALYSIS ........................................................................ 10
A. Whether Rules 18A and 18B, respectively, of the
Maharashtra Poisons Rules could be said to be
arbitrary, disproportionate, and unreasonable? .......
13
B. Few meaningful suggestions .................................... 27
V. CONCLUSION .................................................................. 35
1. Leave granted in SLP (C) No. 16236 of 2019.
2. We are, in this case, concerned with the measures adopted by the
Administration in the wake of a hooch tragedy to make methanol,
both unpalatable and unrecognizable. Mark Twain has famously said,
“Evidence has been brought forward which proves that prohibition
only drives drunkenness behind doors and into dark places, and
does not cure it or even diminish it”.
3. Forced temperance, it is learned from experience, is no solution for
alcoholism. Neither the taste or colour matters, for the one craving
§ Ed. Note: Pagination as per the original Judgment.
[2026] 10 S.C.R. 237
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
and in making such a measure, the fallout is the death knell of an
industry. To adulterate methanol with a bitterant and colourant would
not quell the craving and to achieve unavailability, there should be
stricter regulatory measures for transportation and storage as put
forth in the excise laws. The present exercise puts to jeopardy an
industry itself and would result in ‘missing the woods for the trees’.
4. Since the issues raised in the two captioned writ petitions and the
appeal, respectively, are the same, those were taken up for hearing
analogously and are being disposed of by this common judgment
and order.
I. BACKGROUND
5. By the aforecaptioned writ petitions, the petitioners seek a declaration
that Notification No. DRG 2006/1006/C.R. 659/06/DRUGS-2 dated
21.01.2011 (“2011 notification”) issued by the Medical Education
and Drugs Department, Government of Maharashtra be declared
ultra vires the Poisons Act, 1919 (for short, “the Poisons Act”),
as well as the Constitution to the extent of insertion of Rules 18A
and 18B, respectively (“the impugned rules”), in the Maharashtra
Poisons Rules, 1972 (for short, “the Maharashtra Poisons Rules”).
6. The aforecaptioned appeal arises from the judgment and order
passed by the High Court of Bombay dated 03.05.2019 in W.P. No.
2535 of 2012 by which the High Court dismissed the writ petition
holding that the Rule 18A(2) of the Maharashtra Poisons Rules does
not have an extra-territorial operation (“the impugned judgment”).
7. The issue involved in the present litigation is plain and simple. The
petitioners are aggrieved by the operation of impugned rules 18A
and 18B of the Maharashtra Poisons Rules, respectively, which
restrict purchase of methanol, and mandate the addition of bitterant
and colourant to methanol before sale to a non-drug manufacturer.
Further, by operation of Rule 18B, any possession of methanol
without a licence in Form A is liable to confiscation. The practical
hardship for the petitioners lies in the fact that after addition of the
denaturant, their final products are not acceptable by other industries.
8. It appears from the materials on record that sometime in the year
1991, around 250 persons consumed spurious liquor purchased
from one Chhaya Bar situated in Andheri, Mumbai Suburban. The
persons, who had consumed liquor, had no idea that what was
238 [2026] 10 S.C.R.
Supreme Court Reports
consumed by them was methanol, which is no less than poison.
As a result, around 93 persons lost their lives.
9. In the wake of this incident referred to above, it appears that the
State Government thought fit to appoint a Committee under the
Chairmanship of P.R. Parthasarthy, Addl. Director General of Police
to look into the causes for the liquor tragedy and the measures to be
taken. The Committee tendered its report to the State Government
with several suggestions, one of them was translated into action
by the 2011 notification.
10. By the 2011 notification, the Maharashtra Poisons Rules were
amended and alongwith the following impugned rules, methanol
was inserted in the Schedule appended to the said rules to be
recognized as a ‘poison’. The impugned rules read thus:-
“18A. Ascertaining use of Methanol (Methyl Alcohol) at
the time of sale:
(1) A licensee who desires to sell Methanol (Methyl
Alcohol) to anyone shall first ascertain the use of that
substance for which the purchase is being made. This
shall be done by verifying the licence issued to the
purchaser by the Licensing Authority in Form A.
(2) Except when the Methanol (Methyl Alcohol) is being
purchased for the manufacture of drugs as certified by
the local Food and Drugs Administration, a licensee
shall not sell Methanol (Methyl Alcohol) to any person,
unless the same is, before the sale thereof, mixed with
one gram of methylene carmine and four grams of
denatonium Saccharide to every one hundred liters of
Methanol (Methyl Alcohol).
18B. Methanol (Methyl Alcohol) to be confiscated if found
without valid licence:
Any Methanol (Methyl Alcohol) found to be in possession
without a valid licence issued in Form A shall be
confiscated.
18C. Persons, Firms or Companies already in business
of Methanol (Methyl Alcohol) to obtain licence within
ninety days.
[2026] 10 S.C.R. 239
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
Persons, firms or companies who are already in the
business of Methanol (Methyl Alcohol) in whatever capacity
and are required to obtain a licence under these rules,
shall obtain such a licence within a period of ninety days
from the date of publication of the Maharashtra Poisons
(Amendment) Rules, 2011, in the Official Gazette.”
11. Being aggrieved by the impugned rules, two writ petitions bearing
nos. 2153 of 2012 and 2535 of 2012, respectively, were filed in the
High Court.
12. The High Court vide its order dated 24.02.2012 granted interim relief
permitting the purchase of methanol by non-drug manufacturers or
actual user of dyes, drugs and chemicals. However, such persons
were required to submit their purchase orders to the Food and Drug
Administration.
13. The High Court dismissed the aforesaid petitions vide the impugned
judgment and upheld the validity of the impugned rules. However,
the High Court upon request made by the original appellant extended
the aforesaid relief to enable the appellant to question the legality
and validity of the impugned judgment before the Supreme Court.
14. In such circumstances referred to above, the appellants are here
before this Court with the present appeal.
II. SUBMISSIONS ON BEHALF OF THE PARTIES
i. Submissions on behalf of the petitioners in W.P. No. 893 of
2019 & appellant in SLP(C) No. 16236 of 2019, respectively
15. Mr. Balbir Singh, the learned Senior Counsel appearing for the
petitioners would submit that as methanol is one of the key ingredients
in products like formaldehyde, disinfectants, paraformaldehyde,
decorative laminate, paint, resin manufacture, the mandatory addition
of denaturant would make it unsuitable for industrial use.
i. Mr. Singh further submitted that the impugned notification
being disproportionate and arbitrary is violative of Article 14
of the Constitution. In the same breath, he submitted that the
restriction imposed by the impugned rules, said to be in the
interest of general public are not reasonable, and are violative of
the fundamental right to carry on occupation, trade or business.
240 [2026] 10 S.C.R.
Supreme Court Reports
ii. Mr. Singh highlighted that as methanol is governed by various
other legislation, the introduction of the impugned rules was
not at all necessary. He illustrated that methanol falls within
Class ‘A’ hazardous product under the Petroleum Rules,
which means all storage facilities and transportation tankers
have to be approved and licenced by the Chief Controller
of Explosives. Any tanker leaving a port is required to be
mandatorily surveyed, samples are drawn and tankers are
sealed. This acts as a necessary safeguard against pilferage.
iii. He submitted that by operation of the impugned rules even
the producers of methanol would not be in a position to sell
methanol in State of Maharashtra and thus, would be forced
to export it to other states, or stop production altogether.
iv. As regards Rule 18A, Mr. Singh emphasized that the rules
require that a licensee who desires to sell methanol to anyone
is mandatorily required to ascertain the use of the substance
for which the purchase is being made. Such ascertainment
is required to be done by verifying the licence issued to the
purchaser in Form A. However, the anomaly lies in the fact
that the proforma of Form A does not prescribe the ultimate
use of the licensee nor specifies what the business of the
licensee is. As a result, the verification as mandated by Rule
18A(1) is almost impossible to achieve.
v. In addition to the aforesaid, something very gross was pointed
out by Mr. Singh. The colourant identified and mandated by
the State in Rule 18A(2) contains carcinogenic materials which
promote cancer causing cell formation.
vi. In such circumstances referred to above, the learned counsel
would submit that the impugned notification is an unreasonable
and a disproportionate exercise of power and is liable to be
struck down for being violative of Articles 14 and 19(1)(g),
respectively.
ii. Submissions on behalf of the Respondent-State
16. Mr. Anand Dilip Landge, the learned counsel appearing for the
State of Maharashtra would submit that the issue at hand should
be addressed posing the question, whether a piece of legislation
[2026] 10 S.C.R. 241
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
enacted to prevent colourless and odourless methanol from being
misused, or mistaken for consumable alcohol is liable to be struck
down merely because a commercial user considers some other
regulatory method more preferable.
i. Mr. Landge further submitted that as methanol can be
indistinguishably mixed with liquor and can cause grave
loss of life, the impugned notification has a direct nexus with
the prevention of this misuse by identification of methanol.
The prescribed colorant assists visual identification and the
bitterant makes accidental or intentional consumption difficult.
The impugned rules are lawful as it merely regulates sale and
does not prohibit manufacture or import of methanol.
ii. He argued that the power to “regulate sale” permits the State
to prescribe the condition or form in which a poison may be
sold. In this context, he submitted that regulation would include
prescription of conditions that make the substance identifiable,
traceable and less capable of misuse. The prescribed addition
is a condition attached immediately before sale and is covered
within “regulation of sale”. He added that under Sections 2 and
8 of the Poisons Act, respectively, the State possesses authority
to prescribe an identification safeguard for methanol at sale.
iii. In the aforesaid context, he placed reliance on the decision of
this Court in Goodwill Paint & Chemical Industry v. Union of
India, reported in 1992 Supp (1) SCC 16, to submit that this
Court has recognized that inherently dangerous consequences
associated with trade in poisons justify statutory restrictions.
iv. Mr. Landge contended that the restriction imposed is
proportional and reasonable as it regulates sale of methanol.
The other measures like sealing of tankers, petroleum-safety
licences and hazardous-chemical rules serve different purposes
and do not prevent diversion after transport, unlawful resale,
substitution, or use of illicit liquor.
v. In such circumstances referred to above, the learned counsel
prayed that there being no merit in the petitions those be
dismissed and the interim protection operating against the
enforcement of the impugned notification be vacated. In the
alternative, issues regarding specification of the additives,
242 [2026] 10 S.C.R.
Supreme Court Reports
manner of certification, licensing of a genuine industrial
consumer, may be left to the competent authority for a time-
bound decision without disturbing the validity or enforcement
of the impugned notification.
III. ISSUE FOR CONSIDERATION
17. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the following question
fall for our consideration:-
a. Whether Rules 18A and 18B, respectively, inserted by the
Maharashtra Poisons (Amendment) Rules, 2011, in the
Maharashtra Poisons Rules, 1972, could be said to be violative
of Articles 14 and 19(1)(g) of the Constitution, respectively?
IV. ANALYSIS
18. Before adverting to the rival submissions canvassed on either side,
we must briefly look into the relevant provisions of the Poisons Act
as well as the Maharashtra Poisons Rules.
19. The Poisons Act seeks to regulate the import, possession, and sale
of poisons. Section 2 empowers the State Government to formulate
rules regulating the possession and sale of poisons. Sub-section
(2) empowers the State to formulate rules for regulating the grant of
licences for production, possession and sale of specified poisons.
Section 3 confers power upon the Central Government to prohibit
import of poisons without a licence. Likewise, Section 4 confers
power upon the State Government to regulate possession of any
specified poison alongwith prescribing appropriate punishment.
Section 5 provides for a deeming fiction that any substance declared
as a poison under the rules or notification would be deemed to be
a poison under the Act. Section 6 further provides the penalty for
unlawful importation for specified poisons. Section 7 confers power
upon the District Magistrate, Sub-divisional Magistrate, Commissioner
of Police, respectively, to issue warrant for search of any place.
Section 8 confers power on the State Government to make rules
in furtherance of objects and purposes of the Act, in addition to
that contained in Section 2. It is in exercise of the powers under
Sections 2 and 8, respectively, that the Maharashtra Poisons Rules
came to enacted.
[2026] 10 S.C.R. 243
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
20. Rule 3 of the Maharashtra Poisons Rules provides that possession
of any poison for the purposes of its sale or sale of any poison as
the case may be shall be made only under a valid licence issued in
Form A, unless exempted by the rules. Rule 4 prescribes the Form
and process for grant or renewal of such licences. Rule 9 addresses
dispensation and sale of poisons. Rule 9(2) states that every sale
of poison shall be made only in person, or where it is a company
through or under the supervision of an accredited representative.
Rule 10 indicates to whom any poison specified within the rules
may be sold. Having regard to the relevance of the rule, it would
be apposite to quote it. It reads thus:-
“10. Persons to whom poisons may be sold. – (1) Subject
to the provisions of these rules, a licensee may sell any
poison to any person if he –
(a) is a licensee or holds a permit in Form B;
(b) is personally known to the licensee or is identified
to his satisfaction;
(c) is over the age of 18 years;
(d) is not wandering medicant
(e) appears to be in his senses.
(2) The licensee shall not sell any poison in any quantity
exceeding that specified in the permit.
(3) The licensee shall retain the permit with him on sale
of the poison to the permit-holder.”
21. Rule 11 mandates every licensee to maintain a register for the
purposes of recording sale of poisons by him. The register shall
contain the name of the poison, purpose for which the poison was
required, and the quantity sold. In addition to this, Rule 12 further
mandates a licensee to maintain a stock register qua each poison,
recording the daily balance of stock of poisons. Rule 14 confers
power on various authorities to inspect stock of poisons at the
licensee’s premise, and the registers maintaining record of poison
at any time. Rules 15, and 16, respectively, prescribe the manner
in which poisons are to be stored, packaged and labelled.
22. Rule 15A inserted by the 2011 notification prescribes the manner
in which methanol would be carried in containers in transit. The
244 [2026] 10 S.C.R.
Supreme Court Reports
impugned rules, more particularly, Rules 18A and 18B, respectively,
requires a purchaser to hold a licence in Form A in order to buy
methanol, the mandatory addition of denaturant in methanol except
when being purchased for the purpose of drug manufacturing,
and the confiscation of methanol in case of absence of licence in
Form A, respectively.
A. Whether Rules 18A and 18B, respectively, of the
Maharashtra Poisons Rules could be said to be arbitrary,
disproportionate, and unreasonable?
23. The impugned rules brought into force by the 2011 notification are
in a form of a subordinate legislation. It is now well settled by a
catena of decisions that validity of a subordinate piece of legislation
may be challenged on the following grounds:-
i. There is lack of legislative competence to make the subordinate
legislation;
ii. It is ultra vires the fundamental rights or any other Articles of
the Constitution;
iii. It is ultra vires the parent Act;
iv. It is contrary to the any other statutory provision;
v. The law-making power has been exercised in bad faith;
vi. It is manifestly arbitrary or unreasonable ;
vii. It does not fulfill the object and purpose of the parent Act, or
exceeds the limits of authority conferred by the enabling Act.
[See: State of Tamil Nadu v . P. Krishnamoorthy, (2006)
4 SCC 517; Mahalakshmi Sugar Mills Co. Ltd. v . Union
of India, (2009) 16 SCC 569; Vasu Dev Singh v. Union of
India, (2006) 12 SCC 753.]
24. It is trite law that a subordinate legislation can be challenged on the
same grounds available against a plenary legislation. In other words,
a subordinate legislation should not be an exercise of power that is
unreasonable, lacking an adequate determining principle, irrational,
excessive or disproportionate. The object behind the State action, the
manner in which it is undertaken, and its effect on the fundamental
rights, all must meet the tests of Part III of the Constitution.
[2026] 10 S.C.R. 245
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
25. The test of arbitrariness under Article 14 is not merely whether the
object is legitimate, but whether the means adopted bear a reasonable
and proximate nexus to that object, and whether those means are
proportionate to the burden they impose. This has also been expressed
in several decisions as, the validity of a law which infringes the
fundamental rights has to be tested not with reference to the object
of the State action but on the basis of its effect on the rights.
26. It is not necessary for us to multiply precedents on the exposition
of arbitrariness as the principles are well settled by a catena of
decisions of this Court.
27. At the cost of repetition, we deem it necessary to once again quote
Rule 18A, for a better exposition. The same reads thus:-
“18A. Ascertaining use of Methanol (Methyl Alcohol) at
the time of sale:
(1) A licensee who desires to sell Methanol (Methyl
Alcohol) to anyone shall first ascertain the use of that
substance for which the purchase is being made. This
shall be done by verifying the licence issued to the
purchaser by the Licensing Authority in Form A.
(2) Except when the Methanol (Methyl Alcohol) is being
purchased for the manufacture of drugs as certified by
the local Food and Drugs Administration, a licensee
shall not sell Methanol (Methyl Alcohol) to any person,
unless the same is, before the sale thereof, mixed with
one gram of methylene carmine and four grams of
denatonium Saccharide to every one hundred liters of
Methanol (Methyl Alcohol).”
28. Before we proceed to address the inconsistencies and the nature of
restriction imposed by the rules, it would be apposite to discuss the
licensing framework provided by the Maharashtra Poisons Rules.
Rule 4 of the said rules prescribes that any person who wishes
to sell, or to possess for sale, any poison must hold a licence in
Form A. Such a licence has to be acquired for all the respective
premises where the applicant seeks to stock poisons. Thus, Form
A is granted only to a person who either sells poisons or possess
for the purpose of sale. Further, Rule 10 stipulates to whom poison
be sold which includes a person who is either a licensee or holder
of a permit in Form B.
246 [2026] 10 S.C.R.
Supreme Court Reports
29. In addition to the aforesaid, the impugned Rule 18A(1) prescribes
a condition that a licensee before selling methanol must ascertain
the use of methanol and this shall be done by verifying whether the
purchaser holds a licence in Form A. In other words, it restricts the
purchase of methanol by anyone for further use, more particularly,
manufacturers of downstream products. It also forestalls a permit
holder in Form B from procuring methanol, even to be used as a
raw material. It would not be inapposite to say that a purchaser who
is a manufacturer of a product in which methanol is a raw material
would not hold Form A licence.
30. The sub-rule also overlooks that “ascertainment of use” is already
covered under Rule 11 as well as the permit in Form B. As a corollary
to the aforesaid rule, the licensee-seller would also be precluded
from selling methanol to any manufacturer or industrial consumer.
Thus, Rule 18A virtually changes the purpose of licence in Form A,
puts a licensee-seller and a purchaser on the same pedestal, and
renders permit in Form B nugatory.
31. There is no gainsaying that a law requiring that an act which is
inherently dangerous, noxious or injurious to public health and
safety may be regulated by a permit or licence under the stamp
of an authority. No person can claim such a licence or permit as a
right, and such a restriction regulated by rules would be reasonable.
32. The question that begs for an answer now is whether the impugned
rules fall within the ambit of the saving clause of Article 19(6) or is
in excess of it and thereby violative of Article 19(1)(g).
33. The impugned rules would stand the test of constitutionality only
if the respondent is successful in establishing that the restriction
imposed is reasonable and in the larger public interest. In other
words, the restriction on the freedom guaranteed was necessary,
and the intended object could not have been achieved by imposing
a less drastic restriction. [See: Mohd. Faruk v. State of M.P., (1969)
1 SCC 853]
34. A restriction can be said to be reasonable when it is not excessive
in nature, more particularly, when it does not go beyond what is
required in the public interest, is born out of care and deliberation of
relevant factors, and strikes a balance between the rights guaranteed
and societal interests.
[2026] 10 S.C.R. 247
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
35. When restriction imposed by sub-rule (1) of Rule 18A is tested on
the anvil of the aforesaid principle of law, it fails on two counts.
First, the restriction is disproportionate or rather wider than what
the object justifies. It proceeds on the erroneous understanding that
by verifying licence in Form A the seller would be able to ascertain
the use of the methanol. Further, it assumes that by verifying the
purchaser’s licence, methanol would not reach persons who may
use it for adulteration of liquor.
36. Secondly, what is discernable from the aforesaid is that the restriction
fails to strike a balance as, it shifts the burden onto a class of persons
while also leaving the public interest unserved. The State action is
excessive. We say so because less drastic measures like cancellation
or debarment of licensees found in breach of rules, the imposition
of more stringent conditions at the stage of grant of renewal of
licence, a requirement for the return of unsold or excess methanol
to the licensee or a designated authority after a specified period
alongwith calling for explanation, coupled with penal consequence
in cases of non-maintenance or discrepancy in the registers, etc.,
are all left unaddressed.
37. Thus, the sub-rule fails to constitute a reasonable restriction in
public interest within the meaning of Article 19(6), and therefore
violate Article 19(1)(g).
38. We shall now address ourselves on sub-rule (2) of Rule 18A. This
sub-rule mandates addition of 1g of methylene carmine (colourant)
and 4g of denatonium saccharide (bitterant) to every 100l of methanol
before it is sold to any non-drug manufacturer.
39. We are conscious of the fact that some hardship or inconvenience
that may be caused to a section of society cannot by itself be a
ground to strike down a legislation. If a rule otherwise appears to
be fair, just and reasonable, and does not suffer from the vice of
any constitutional guarantee, mere fact that some hardship, financial
burden, or commercial difficulty is caused is no ground to declare
the State action unconstitutional. However, such actions must be
reasonable and proportionate.
40. In the present case, the aforesaid requirement of addition of bitterant
and colourant in methanol prescribed under Rule 18A(2) fails the
test of being reasonable and having a proximate nexus to the object
on two counts.
248 [2026] 10 S.C.R.
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41. First, a careful reading of the Parthasarthy Committee Report would
reveal manifold causes for liquor tragedies apart from methanol
being sold illegally by the licensees. The other causes identified
by the Committee were methanol being diverted through illegal and
unlicensed channels, availability of methanol as a cheaper alternative
to ethyl alcohol, corruption in law enforcement agencies, genuine
confusion between ethyl and methyl alcohol, and pilferage. All such
causes reasons may continue to operate despite the regulatory
framework that the impugned rules seek to put in place. In other
words, a large chunk of persons supplying spurious liquor in the
market operate beyond the framework of the impugned rules.
42. The aforesaid causes, namely, methanol being diverted through
illegal and unlicensed channel, or pilferage do not originate at the
point of lawful sale by a licensee which the impugned rule seek to
regulate, or for reasons, namely, confusion, or misuse of licensee’s
premise, rules already exist in place but are not implemented well,
and for other reasons, namely, corruption, or methanol being a
cheaper alternative, they are outside the ambit of the Maharashtra
Poison Rules.
43. In the context of the present sub-rule, a person who indulges in
diverting methanol through illegal or unlicensed channels, or by
pilferage, may not pass through the point of sale that the impugned
rule seeks to regulate. The impugned denaturing requirement leave
diversion outside the register unaddressed.
44. The following industries through their respective affidavits have
explained the manner in which they are affected by the operation
of the sub-rule (2) of Rule 18A. It reads thus:-
Industries How are they affected?
Aarti Industries Ltd.
(Spack Division)
Bitterant will leave traces in final product.
As their final product (Di Methyl
Sulphate) is colourless, colourant will
lead to colouration in final product. As
a result, dyes industry will not accept
such DMS.
Pharma industry would not accept such
a DMS.
[2026] 10 S.C.R. 249
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
Akyl Chemicals Ltd. Final product (methyl amines) has
application in life saving drugs such
as metformin hydrochloride (diabetic
drug), ranitidine (antacid), erythromycin
(antibiotics), etc., any change in process
of manufacture of these drugs will have
adverse effect.
Addition of bitterant and colourant would
damage the catalyst.
Balaji Amines Ltd. Same as above.
Balaji Formalin Pvt.
Ltd.
Final product (paraformaldehyde) is in
the form of white crystals – addition of
colourant would lead to non-acceptance
of the product.
Bhabha Atomic Research Centre
(BARC), India’s atomic research centre,
demands ulta-pure formaldehyde.
Colourant would leave traces of colour in
formaldehyde which is not acceptable to
paint industry, pharma and drug industry.
Thermo Fisher
Scientific India Pvt.
Ltd.
Final product (Laboratory and Industry
grade methyl alcohol) is used by pharma
industries, and for research activities.
Addition of bitterant and colourant would
impact such analysis and manufacture
of drugs.
Purified methanol (99.9%) would not
be supplied to pharma and laboratory
research customers.
45. Secondly, it is apposite to understand that the bitterant and colourant
prescribed under sub-rule (2) are additives. What the provision
achieves is mere identification at the cost of restricting marketability
of the final product and imposing additional financial burden on the
industries. It is one thing to identify addition of methanol in potable
alcohol, however, that too operates only if and when the consumer
notices it. It is another thing to prevent the manufacture of illicit
250 [2026] 10 S.C.R.
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liquor from methanol in the first place. This aspect of identification
works like rearranging the deck chairs on the Titanic, to say that the
measure addresses a surface level aspect and does not address
the core issues of diversion and pilferage.
46. The respondent State failed to indicate that this practice of putting
such additives would discourage or rather dissuade continuous
usage of methanol or affect its chemical composition so that it
cannot be used in making of spurious liquor. Further, the respondent
State has also failed to indicate on how mixing of the additives
would definitively prevent deaths. One another question that is left
unanswered is how the respondent plans to prevent manufacturing
of spurious liquor by the use of other adulterants. The respondent
overlooked that identification is only a possibility. What was expected
from the respondent was to introduce stringent measures addressing
diversion and pilferage, manner of disposal and return of unused
methanol, etc.
47. The respondent has also not disputed that the denaturant cannot
be diluted and masked through the addition of any colouring and
flavouring agent. In other words, the mandate of sub-rule (2) fails
to perform if any miscreant makes spurious liquor from methanol
but thereafter masks the color and flavour.
48. What is discernable from the above is that in practicality, the impugned
rules prescribe a regulatory framework that does not prevent the
misuse of methanol in liquor which takes place in the unregulated
field. The sub-rule even in the best case of full compliance cannot
prevent the misuse it aims to prevent. Thus, it cannot be said to
bear a reasonable and proximate nexus with the object it seeks to
achieve. It addresses a mischief it does not in fact remedy while
imposing a continuous burden on the industries.
49. There is no doubt that on matters affecting policy and requiring
technical or administrative expertise, the courts would be reluctant to
interfere and leave the matter for the experts to address. However,
a policy that is irrational, or lacks rational justification, or is violative
of any constitutional, statutory or any other provision of law is liable
to be struck down. The courts can examine whether the Government
has formulated the policy keeping in mind all the facts and is not
marred with unreasonableness. Afterall, the basic tenet of Article
14 is fairness in action and non-arbitrariness in essence.
[2026] 10 S.C.R. 251
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
50. We do not discredit the intention behind the introduction of the
impugned rules. There is no doubt that the State was confronted
with a serious public health concern. Although, the intention in
mandating denaturants was identification, yet the intention solely
would not pass the test of manifest arbitrariness.
51. In such circumstances referred to above, the impugned rules cannot
be said to be reasonable or rather a rational application of mind
in exercising the law-making power. The impugned notification is
manifestly arbitrary and lacks rational nexus with the object sought
to be achieved, thereby violating Article 14.
52. We may now address ourselves on the constitutional validity of
Rule 18B. It reads thus:-
“18B. Methanol (Methyl Alcohol) to be confiscated if
found without valid licence:
Any Methanol (Methyl Alcohol) found to be in possession
without a valid licence issued in Form A shall be
confiscated.”
53. This rule essentially states that no person can possess methanol
without having a licence in Form A. The said rule would be rendered
unworkable and otiose when applied in a case where a person is
lawfully in possession of methanol by way of the Form B permit.
At the same time, imposition of such condition renders the permit
redundant in its complete form and action.
54. We may now view the aforesaid from one another angle
of proportionality analysis prescribed in K.S. Puttaswamy
(Privacy-9 J.) v. Union of India, reported in (2017) 10 SCC 1,
which seeks answer to the following questions:-
(i) Is the state action in furtherance of a legitimate aim?
(ii) Is the state action suitable for achieving such an aim?
(iii) Is the measure necessary for achieving the aim? and
(iv) Is the measure adequately balanced with the right of the
individual?
55. As regards, legitimacy of the aim, there can be no dispute that the
impugned rules pursue a legitimate aim. We do not say for a moment
that methanol is not a hazardous or toxic substance, and its sale
252 [2026] 10 S.C.R.
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and possession should not be subject to regulation. The prevention
of loss of life arising from consumption of liquor adulterated with
methanol is an object of utmost importance and the power to regulate
poisons is governed by Sections 2 and 8, respectively.
56. The second test is whether the state action is suitable for achieving
such an aim. The evaluation under this test would entail an analysis
of whether the impugned restriction can further the intended objective.
As discussed in the foregoing paragraphs of this judgment that by
restricting the purchase of methanol through licensing framework
under Rule 18A(1), and consequential action of confiscation under
Rule 18B would not even remotely achieve the aim of stopping the
addition of methanol in liquor.
57. As regards adoption of less restrictive measures, the State has failed
in showing that no equally effective and less restrictive alternative
was available. In our considered view, the check-points or rather
the safeguards in the Maharashtra Poison Rules if implemented in
letter and spirit would better address the problem of pilferage and
diversion.
58. Finally, the answer to the last test lies in the question whether the
burden placed on a class of citizens is out of proportion to the benefit
it is likely to produce. On one hand lies the burden on the industries
as noted in paragraph 44 above, namely, loss of yield, reduced life of
catalyst leading to more byproduct formation impacting environment
and quality of formaldehyde, high power consumption, reduced life
of equipment, increased susceptibility of health hazards owing to
improper evaporation, etc, while on the other, lies the benefit of
identification which the State hopes would prevent the harm sought
to be addressed. Thus, the burden on the industries is substantial
and continuing but the benefit that the State claims to achieve is
only a possibility.
59. The Chhaya Bar incident which moved the respondent State to
introduce the amendments, occurred in 1991, however, neither from
the materials on record, nor from the submissions on behalf of the
State, we have been able to gauge the actions that were undertaken
by the State between 1991 to 2011. The pressing question is,
considering that the State was conscious of the causes behind such
tragedies and committed towards resolving it, what other measures
apart from the amendment i.e., investigation, search, rigorous
[2026] 10 S.C.R. 253
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
examination of records, probe into complaints of pilferage and sale
of spurious liquor, did the State take to fight the menace of spurious
liquor in these years. This question assumes greater importance in
light of the fact that the stay on the operation of the impugned rules
has been in operation for about 14 years now.
60. In such a view of the matter, we are of the considered opinion that
that the impugned rules fail to pass the test of proportionality, and
result in violation of the fundamental rights guaranteed under Article
19(1)(g) of the non-drug manufacturers.
B. Few meaningful suggestions
“The death of one man is a tragedy,
the death of millions is a statistic”
61. We are tempted to preface this part of our judgment with the words
attributed to a French diplomat, as a satire to express the horrors of
war, more particularly, the moral failure and indifference of those in
power towards mass deaths, or deaths that are politically convenient
to minimize.
62. The recent hooch tragedies at Bhavnagar, Gujarat and Sagar,
Madhya Pradesh, which claimed around 13 and 15 lives, respectively,
are again a reminder for the authorities to wake up and act.
63. History bears eloquent testimony to the fact that complete alcohol
ban often drives the liquor trade underground, increasing the
prevalence of unregulated, lethal brews. Take the case of the State
of Gujarat. The State of Gujarat has a strict prohibition policy. It is
a dry State. The State of Gujarat has witnessed at least ten major
mass hooch tragedies since the State’s formation and independence,
claiming the lives of over 600 people. Despite, the State of Gujarat
maintaining a strict prohibition policy since its creation in 1960, hooch
tragedies, (laththa laced with methanol) has rapidly led to severe
public health crises. In the words of eminent jurist, the legendary
Shri Nani Palkhiwala:
“Prohibition would be most desirable in every way but
for a single unfortunate fact,-- the only thing is it is not
prohibitive. In order that prohibition might be prohibitive,
prohibition must be on the part of the governed and
254 [2026] 10 S.C.R.
Supreme Court Reports
not the Government. When the Government begins
to prohibit liquor, it ends in promoting liquor, because
it cannot do otherwise for all that it’s worth. All the
statesmen from Augustus to Asquith have failed in their
attempts to prohibit. Man cannot defeat man’s nature. The
question is not whether prohibition is good, the question
is not whether prohibition is desirable or advisable. The
question is whether the Government is justified in trying
the experiment of prohibition. It has been hotly insisted
upon that drink is disastrous, especially when in excess,
and therefore it ought to be prohibited. Now, it is obvious
to any mortal out of Bedlam that if a thing is an evil
when used in excess, the remedy lies in preventing the
excess. If drunkards are a nuisance, the remedy lies in
preventing people from being drunkards, but NOT in
preventing people from drinking. The Government cannot
say that because some are drunkards nobody shall drink,
the Government might as well say that because some
are gluttons, nobody shall eat.”
(A passage from the article written by Shri Nani
Palkhiwala at the age of 17. It was originally published in
the Gujarati-English weekly newspaper Jame Jamshed in
October 1937. The piece was compiled and reproduced
decades later in Essays and Reminiscences: A Festschrift
in Honour of Nani A. Palkhiwala)
64. It can be safely said that there are five evils associated with
prohibition – (i) loss of revenue on taxes, (ii) expenditure on
implementation and good money spent (iii) corruption in police and
excise (iv) illegal distilling and in the present days, and (v) resultant
drug menace.
65. In the present case, the report of the Parthasarthy Committee lays
emphasis on taking care of the deficiencies, the implementation of
the prohibition policy, and also the effective implementation of the
provisions of the law. Therefore, in our opinion, having regard to
the seriousness of the issue it will be in the larger public interest if
the respondent takes into consideration the report of the Committee
at the earliest and considers the recommendations and implement
them effectively and meaningfully.
[2026] 10 S.C.R. 255
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
66. Before we close this matter, we must address ourselves on the
important aspect as regards what steps could be taken to prevent
hooch tragedies, and what best could be done for effective
implementation of the policies. The following suggestions shall be
discussed and looked into by all the States/Union Territories.
As regards cooperation and working of various Departments
I. There is a need to break the chain of supply and demand of
liquor by strict implementation of the State Prohibition Law, if
any. This will require a multipronged approach by the State
Government, and will also involve participation of multiple
Departments of the State such as Prohibition Department,
Excise Department, Police Department, Transport Department,
Industries Department, Health Department, Social Justice
and Empowerment Department along with Non-Government
Organizations.
II. As liquor is manufactured in the State and also brought from
outside, implementation steps should involve strict monitoring
at the State borders. In this regard, the State Transport
Department being vigilant at the borders would help control
illegal transport of liquor in the State. There shall be stationing
of checking squad to check private vehicles as well. At the same
time, it would be crucial to find out the mode by which huge
quantities of liquor enter the city. Implementation of peripheral
laws concerning procurement, manufacture, transportation of
sale and consumption of liquor within the State would also
prove critical in preventing hooch tragedies from occurring.
III. The State Police in coordination with the Prohibition Department
and Excise Department, respectively, can identify and bring
to book local breweries which are generally located in semi-
industrial areas, congested areas in the urban parts of the
State. Many municipal school premises, which are open lands,
are often used as storage grounds for illegal liquor. In such
circumstances, the Education Department shall keep a check
on school premises, and report to jurisdictional police in case
of such storage.
IV. Any chemical solvent used in the manufacture of the spurious
liquor is generally illegally procured from industrial units.
256 [2026] 10 S.C.R.
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Therefore, monitoring of industrial units by the Department
of Industries would be useful to find out which industrial units
are manufacturing such chemical solvents and selling them
illegally to liquor makers.
As regards the existing Rules in States/Union Territories
V. The existing rules in the State, if any, which regulate methanol
should be amended to include that conveying vehicles used
in transport of liquor shall not be released on bond or surety
in case of breach of any rule, till orders of court.
VI. The State Rules governing the grant of licence and permit
require a comprehensive re-look, so as to ensure that a licence
or permit is not granted as a matter of course but only after
due verification of the antecedents, credentials, and genuine
requirement of the applicant. Further, the rules should provide
for periodic and regular scrutiny of licences and permits already
granted, including verification of continued eligibility, actual
usage, and compliance with the conditions of grant, so that
the grant of a licence or permit does not remain a one-time
exercise but is subject to ongoing accountability.
VII. The State Rules should mandate periodic returns of unused
or excess methanol by industrial consumers to the seller, or
a designated authority, within a specified time frame, so as
to prevent stockpiling beyond what is reasonably required for
the consumer’s manufacturing process. This will reduce the
risk of pilferage or diversion of surplus stock.
VIII. Every licensee and permit-holder dealing in or consuming
methanol should be required to maintain a record of
consumption and closing stock, reconciled at periodic intervals,
so that any unaccounted or unexplained shortfall between
opening stock, consumption, and closing stock is flagged and
investigated at the earliest.
IX. Any person who is found to have defaulted or breached
the conditions of the licence or permit, or the Rules made
thereunder, should be liable to have such licence or permit
suspended or cancelled, as the case may be, and should further
be debarred from being granted any fresh licence or permit.
[2026] 10 S.C.R. 257
M/s Balaji Formalin Pvt. Ltd. & Anr. v. Union of India & Anr.
X. Transport of methanol should be undertaken in dedicated
tankers or containers earmarked exclusively for that purpose,
so as to eliminate the possibility of pilferage or substitution
that arises when methanol is transported in general-purpose,
or shared vehicles alongside other goods. Additionally,
transportation and storage should be under strict supervision
of excise authorities, regulatory measures being prescribed
by rules and the excise officers being deputed to supervise
transportation and the storage centers/facilities, their services
being reimbursed by the entity who stocks and transports
methanol.
XI. Containers and tankers used for transport and storage of
methanol should be sealed in a tamper-evident manner at
the point of dispatch, such that they cannot be opened, and
no residual quantity can be siphoned, or left unaccounted
for at the bottom of the container, except by the authorized
personnel of the consuming industry at the point of receipt,
with the seal number and condition recorded both at dispatch
and at receipt.
As regards health and awareness
XII. The State Health and Family Welfare Department should
have a comprehensive policy and a specialized cell to handle
liquor tragedies. When there are large scale casualties,
public hospitals are in complete chaos in the face of the
sudden emergency. Experiences of the past show that these
hospitals are hardly equipped with the necessary specialized
medicines or equipment required to handle such emergencies.
A comprehensive disaster management system and policy
should be in place for handling such emergencies.
XIII. The State Government should increase the number of
de-addiction centers and fully operationalize already existing
centers. The deaddiction centers should be given the additional
responsibility of reaching out to liquor affected families so
that the prohibition laws, if any, can be implemented well and
gradually there can be some positive outcome.
XIV. The consumption of liquor and its consequences often lead
to disruption of families. Therefore, there should be family
258 [2026] 10 S.C.R.
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counseling centers in each local area, especially for such
families who are suffering in silence the travails of liquor
consumption.
XV. The general public’s cooperation in informing the law enforcing
agencies is very important as far as implementation of
laws regulating alcohol and prohibition law, respectively, is
concerned. An awareness campaign should be conducted by
the State Governments and NGOs regarding the prohibition
law and its implementation.
67. We are of the view that in the matters of the present nature, although
the Court may issue various directions, yet it is the police machinery
that should rise to the occasion and see to it that the provisions
of the Act governing regulation of alcohol are implemented strictly
and effectively.
V. CONCLUSION
68. For all the aforesaid reasons, we have reached the conclusion that
the impugned rules are violative of Articles 14 and 19(1)(g) of the
Constitution, respectively.
69. In the result, the petitions stand allowed in the aforesaid terms.
Pending applications, if any, also stand disposed of.
70. The civil appeal is disposed of in above terms.
71. Registry shall forward one copy each of this judgment to all the
High Courts, and one copy each to all the Chief Secretaries of the
respective States.
Result of the case: Appeal disposed of.
†Headnotes prepared by: Nidhi Jain