Airport Gold View Hotels & Suites Pvt. Ltd. v State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **MONDAY, THE 31ST DAY OF JULY 2017/9TH SRAVANA, 1939** **WP(C).No. 9535 of 2011 (N)** **-----------------------------------------** **PETITIONER(S) :** **-------------------------** **M/S. AIRPORT GOLD VIEW HOTELS & SUITES PVT.LTD., NEDUMBASSERY, ERNAKULAM, REPRESENTED BY ITS DIRECTOR, SRI.C.B.PARDHANANI, AGED 71 YEARS, S/O.B.H.PARDHANANI.** ## **BY ADVS. SRI.M.G.KARTHIKEYAN SRI.NIREESH MATHEW** **RESPONDENT(S) :** - **----------------------------** **1. STATE OF KERALA, REPRESENTED BY SECRETARY TAXES (A) DEPARTMENT, GOVT.SECRETARIAT, THIRUVANANTHAPURAM.** **2. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE,THIRUVANANTHAPURAM- 695 001.** **3. THE JOINT EXCISE COMMISSIONER, CENTRAL ZONE, ERNAKULAM- 682 017.** **4. THE DEPUTY COMMISSIONER OF EXCISE, ERNAKULAM- 682 017.** **5. THE CIRCLE INSPECTOR OF EXCISE, ALUVA- 682 141.** **6. THE CHIEF ELECTORAL OFFICE(KERALA), THIRUVANANTHAPURAM- 695 001.** - **R1 TO R5 BY SR. GOVERNMENT PLEADER SRI. P.M.MANOJ R6 BY ADV. SRI.MURALI PURUSHOTHAMAN, S.C** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31-07-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Msd. ## **WP(C).No. 9535 of 2011 (N)** ## **-----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** **EXHIBIT P1: PHOTOCOPY OF THE APPLICATION DATED 15.10.2010 SUBMITTED BEFORE THE 2ND RESPONDENT THROUGH PROPER CHANNEL.** **EXHIBIT P2: PHOTOCOPY OF THE ORDER NO. XC6-397/2011 DATED 28.02.2011 PASSED BY THE 2ND RESPONDENT.** **EXHIBIT P3: PHOTOCOPY OF THE CHALAN EVIDENCING THE PAYMENT OF RS.22 LAKHS.** **EXHIBIT P4: PHOTOCOPY OF THE LETTER DATED 05.03.2011 SENT TO THE RESPONDENTS.** - **EXHIBIT P5: PHOTOCOPY OF THE FL-3 LICENSE NO. 167/10-11 ISSUED BY THE EXCISE COMMISSIONER, DATED 14.03.2011.** - **EXHIBIT P6: PHOTOCOPY OF THE LETTER DATED 24.03.2011 SENT TO THE RESPONDENTS.** - **EXHIBIT P7: PHOTOCOPY OF THE ABKARI POLICY FOR THE YEAR 2011-2012 GO(MS)NO. 26/2011/TD DATED 14.02.2011 ISSUED BY THE GOVT. OF KERALA.** ## **RESPONDENT(S)' EXHIBITS :** ## **NIL** ## **//TRUE COPY//** ## **P.S.TO JUDGE.** Msd. ## **SHAJI P. CHALY, J.** -------------------------------------------------- ## **W.P.(C) No.9535 of 2011 ----------------------------------------------Dated this the 31[st] day of July, 2017** ## **JUDGMENT** This writ petition is filed by the petitioner, a company incorporated under the Companies Act, 1956, seeking to declare that the petitioner company is entitled to commence the business as per Ext.P5 FL-3 licence issued under the Foreign Liquor Rules, with effect from 02.04.2011, treating the amount of Rs.22 lakhs paid as per Ext.P3 _chalan_ as the licence fee for the year 2011-12, and seeking other consequential and alternative reliefs. Material facts for the disposal of the writ petition are as follows: 2. Petitioner is a three star classified hotel situated near to the Cochin International Airport. It applied for issuance of FL-3 licence as per Rule 13(3) of the Foreign Liquor Rules, as early as on 15.10.2010, evident from Ext.P1. Sanction was accorded only on 28.02.2011, as per Ext.P2. Accordingly, petitioner paid Rs.22 lakhs towards the licence fee for the Abkari year 2010-11, on 01.03.2011, as per Ext.P3 _chalan_ . Since no licence was issued immediately, petitioner as 2 **W.P.(C) No.9535 of 2011** per Ext.P4, requested respondents 1 to 5 to issue licence only after 13.04.2011, treating the amount paid as licence fee for the abkari year 2011-12. It is the submission of the petitioner that, the said request was made consequent to receipt of information that issuance of fresh licence will amount to violation of the model code of conduct of elections declared to the State Assembly. However, petitioner was served with Ext.P5 licence dated 14.03.2011, apparently sanctioned as per Order No.XC6-397/11 dated 28.02.2011 of the Excise Commissioner, Thiruvananthapuram. 3. Thereupon, petitioner submitted Ext.P6 representation to respondents 1 to 6, stating that it is impossible for it to commence the business on or before 31.03.2011, and hence the licence may be issued only for the year 2011-12, either permitting to commence the business on 02.04.2011 or 14.04.2011, treating the amount paid as licence fee. Actually, the Bar is not conducted in accordance with the licence issued. According to the petitioner, it was impossible for the petitioner to lift the liquor and to commence business on or before 31.03.2011, hence he intended to conduct the same either with effect from 02.04.2011 or on any subsequent 3 **W.P.(C) No.9535 of 2011** date. It is also contended that, even though licences were granted to similarly placed persons/licencees, issuance of licences were deferred to after 13.04.2011, the date of election as directed by the respondent. Therefore, treating the petitioner in a different manner is nothing but discrimination and arbitrariness employed on the petitioner, goes the contention. These are the background facts projected in the writ petition. 4. The 1st respondent has filed a counter affidavit virtually admitting the factual circumstances with respect to the submission of the application and the issuance of the licence. It is stated thereunder that in Ext.P2 order, it is stipulated that licence fee paid is not refundable, whether fully or partly on any account. However, as per letter dated 01.03.2011, the 4th respondent reported that the licence fees have been remitted by the licensee on 01.03.2011, and in the meanwhile, the Model Code of Conduct in connection with the General Election to Kerala Legislative Assembly have come into force. Accordingly, permission for grant of licence was obtained from the 6th respondent on 12.03.2011, even though petitioner has submitted an application to start his business **W.P.(C) No.9535 of 2011** 4 after 13.04.2011 by adjusting FL-3 licence fee remitted for 2010-11 to 2011-12 which is not legally sustainable. As per Rule 14 of the Foreign Liquor Rules, if the licence referred to in Rule 13 is granted during the course of a financial year, the full annual fee shall be paid and the licence shall expire at the end of the financial year. Therefore, the petitioner is not eligible for adjustment of the licence fee remitted for the year 2010-11 to the subsequent abkari year. Therefore, there is no question of remission of licence fee in any case. Other legal contentions are also raised in accordance with Rule 14 of the Foreign Liquor Rules, 1953, justifying the action of the 1st respondent in not making any adjustment as sought for by the petitioner. 5. Heard learned counsel for the petitioner and the learned Senior Government Pleader. Perused the documents on record and the pleadings put forth by the respective parties. 6. The fact discussion made above would make it clear that the sole question to be decided is whether the petitioner is entitled to get adjustment of the licence fee paid for the year 2010-11 to any subsequent period or as is sought for, or entitled for refund. Licence was granted as per Rule 13(3) of Rules, 1953 for the abkari year 2010-11, as per the order **W.P.(C) No.9535 of 2011** 5 dated 28.02.2011. However, from Ext.P5, it is clear that the same was issued on 14.03.2011. Therefore, the balance period available to the petitioner for conduct of the Bar in accordance with the licence granted is only 17 days. Even though petitioner has a contention that since the Model Code of Conduct was brought into force for the State Assembly Election, it is stated in the counter affidavit filed by the State that permission for issue of licence was obtained from the 6th respondent, State Election Commission on 12.03.2011, and therefore, there is no adverse consequence in the matter of issuance of the licence consequent to the introduction of Model Code of Conduct for the election. However, immediately on according sanction as per Ext.P2 and payment of licence fee as per Ext.P3 on 01.03.2011, petitioner has submitted Ext.P4, requesting that the licence may not be issued for the period 2010-11, since the Model Code of Conduct has come into force. However, Ext.P5 licence was issued on 14.03.2011. Thereupon, petitioner has submitted Ext.P6 before respondents 1 to 6, reiterating the stand adopted in Ext.P4 and further submitting that licence to similarly situated persons are not issued, consequent to the objection raised by the State 6 **W.P.(C) No.9535 of 2011** Election Commission, and it was therefore, requested that after the elections on 13.04.2011, the licence may be re-issued to the petitioner for the ensuing year 2011-12. It is also contended in the writ petition that lifting of liquor after the issuance of Ext.P5 have also become difficult consequent to the short period remaining for conduct of the Bar i.e. 17 days. Anyhow, fact remains, petitioner has not conducted the Bar even for a single day, and the respondents are not having a case otherwise also. 7. Yet another aspect I find is that even though petitioner has made a specific contention in Exts.P4 and P6 and also in the writ petition that other similarly situated persons who were accorded sanction for issuing licence were not issued with licence consequent to the objection raised by the State Election Commission is not seen refuted in the counter affidavit filed by the State Government. Therefore, such a vital contention, when it is not disputed specifically, can only be deemed to be admitted by the respondents. The sole contention advanced in the counter affidavit is that in the sanction, it is clearly stipulated that under no circumstances petitioner is not entitled to refund of the licence fee paid **W.P.(C) No.9535 of 2011** 7 accordingly. It is also true that as per Rule 14 of the Foreign Liquor Rules, if any of the licences under Rule 13 is granted with a licence, in the course of a financial year, the full annual fee shall be paid and the licence shall expire at the end of the financial year. 8. The said issue was considered by a Division Bench of this Court in W.A.No.393 of 2016 dated 29.02.2016, upholding the judgment of a learned Single Judge in W.P.(C) No.9012 of 2012 dated 04.11.2015 in the matter of _**'M/s.**_ _**Yesar Regency, Karimugal, Ernakulam District v. State**_ _**of Kerala and others**_ ' and held that the licence was issued to the petitioner therein on 31.03.2012, pursuant to a direction issued by this Court on 28.02.2012 to grant licence within one month, and finally issued on 31.03.2012. In the process, it was held that the licensee was denied the opportunity to conduct the beer parlour even for a single day during 2011-12, and therefore, there is absolutely no justification for the claim of the appellants that they are entitled to appropriate the licence fee for the entire year. It was further held that any permission for such appropriation would amount to nothing but unjust enrichment, which cannot be permitted. 8 **W.P.(C) No.9535 of 2011** 9. Therefore, it is the contention of the learned counsel for the petitioner that since the licence is not put to use by the petitioner, the fee paid would become an unjust enrichment to the State. It is also contended that a privilege was granted to the petitioner to vend liquor under FL-3 and when it is not conducted, the fee charged for extension of the privilege cannot be said to be utilized for the purpose of privilege, granted as per the licence. Moreover, it is contended that, the respondents have no case that liquor was lifted by the petitioner in accordance with the licence issued on 14.03.2011, and therefore, by no stretch of imagination, it can be said that the petitioner has enjoyed the privilege granted in any manner in accordance with the conditions contained under Ext.P2 sanction and Ext.P5 licence issued. 10. On the other hand, learned Senior Government Pleader advanced his arguments strictly in accordance with Rule 14 of the Foreign Liquor Rules, 1953, and contended that under no circumstances, the petitioner can ask for adjustment or repayment of the licence fee since the petitioner was well aware that if licence fee is paid as grant of privilege, petitioner **W.P.(C) No.9535 of 2011** 9 is not entitled to get refund of the same under any circumstances. 11. Having evaluated the situation in accordance with the arguments advanced by the respective counsel, I am of the considered opinion that the ultimate question to be decided is whether the privilege extended to the petitioner was utilized by the petitioner in any manner. It is true, Rule 14 contemplates a situation where a licence is granted under rule 13 in the course of a financial year, the annual licence fee shall be paid and the licence shall expire at the end of the financial year. However, in my considered opinion, such a peremptory prescription is made under Rule 14 to ensure that any person who conducted a liquor vend in accordance with the licence granted, the fee paid will end with the financial year. Therefore, in my view, the Rule comprehends a situation of the licensee conducting a liquor vend in accordance with the privilege extended so. Moreover, in the real and practical sense there is no _quid pro quo_ for the fee charged, but on the other hand the privilege is extended to a person by charging substantial fees as a regulatory measure for the purpose of controlling opening up of the liquor vends excessively. **W.P.(C) No.9535 of 2011** 10 Therefore, when privilege so granted is not utilized even for a day, there is no justification in not appropriating the fee for any successive year. Here is a case where, there is no contra case for the respondents, that petitioner enjoyed the privilege even for a single day of the year i.e. 2010-11 ended on 31.3.2011. Viewed in that circumstances, if the Government refuses to appropriate the amount for the subsequent financial year i.e. 2011-2012, it cannot be nothing else other than unjust enrichment by the State as is held by the Division Bench of this court in the judgment referred to _supra_ . Accordingly petitioner is entitled to succeed in this writ petition. 12. Anyhow, from the facts and circumstances and the arguments advanced, it is evident that the petitioner was paying the licence fee for the subsequent years in accordance with the varied policy of the successive Government, and it is also submitted at the Bar that the petitioner is conducting liquor vend in accordance with the Rules even now. Therefore, in my considered opinion, petitioner is entitled to get adjustment of the amount of Rs.22 lakhs paid as per Ext.P3 _chalan_ dated 01.03.2011 on account of the sanction accorded 11 ## **W.P.(C) No.9535 of 2011** as per Ext.P2 by the Commissioner of Excise, Thiruvananthapuram dated 28.02.2011 and the consequential licence dated 14.3.2011 for any privilege secured by the petitioner under the Foreign Liquor Rules, 1953, hereafter, or refund the amount within two months from date of receipt of a copy of this judgment. The above directions are issued subject to SLP (C) No.27440/2016 pending before the Apex Court in regard to the issue in question, as pointed out by the learned Senior Government Pleader. The writ petition is allowed accordingly. Sd/- **SHAJI P. CHALY JUDGE** St/03.08.2017