Hotel Sky Palace, Kannur v State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.V.RAMAKRISHNA PILLAI** ## **WEDNESDAY, THE 26TH DAY OF FEBRUARY 2014/7TH PHALGUNA, 1935** ## **WP(C).No. 26280 of 2011 (H)** **----------------------------** **PETITIONER(S):** **--------------------------** **HOTEL SKY PALACE, METRO TOWER, THAVAKKARA ROAD, KANNUR -670 002, REPRESENTED BY ITS MANAGING PARTNER, T.P. NARAYANAN, AGED 43 YEARS, S/O NARAYANAN.** **BY SRI.C.C.THOMAS, SENIOR ADVOCATE ADVS. SRI.M.G.KARTHIKEYAN SRI.NIREESH MATHEW** **RESPONDENT(S):** **----------------------------** **1. STATE OF KERALA, REP. BY SECRETARY, TAXES (A) DEPARTMENT, GOVT. SECRETARIAT, THIRUVANANTHAPURAM.** **2. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM.** **3. THE DEPUTY COMMISSIONER OF EXCISE, KANNUR.** ## **4. THE CIRCLE INSPECTOR OF EXCISE, KANNUR.** **R1 TO R4 BY SR.GOVERNMENT PLEADER SRI.P.FAZIL** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26-02-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Kss** ## **WPC.NO.26280/2011 (H)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **P1: COPY OF THE STAR RE-CLASSIFICATION ORDER DTD. 29/07/2010 ISSUED BY THE INDIAN TOURISM DEPARTMENT, CHENNAI.** **P2: COPY OF THE FL-3 LICENSE NO.2 ISSUED BY THE EXCISE COMMISSIONER.** **P3: COPY OF THE ORDER NO.XCI-30509/05 DTD. 10/08/2009 PASSED BY THE EXCISE COMMISSIONER.** **P4: COPY OF THE JUDGMENT DTD. 7/10/2010 IN WPC.NO.23131/2009 PASSED BY THIS HON'BLE COURT.** **P5: COPY OF THE ORDER DTD. 29/03/2011 INI.A.NO.5635/2011 IN WPC.NO.23131/2009 PASSED BY THIS HON'BLE COURT.** **P6: COPY OF THE ORDER G.O.(RT) NO.701/2011/TD DTD. 1/10/2011 PASSED BY THE 1ST RESPONDENT.** **P7: COPY OF THE REPORT ALONG WITH SKETCH SUBMITTED BY THE DEPUTY COMMISSIONER OF EXCISE, EXCISE INTELLIGENCE & INVESTIGATION BUREAU, HEAD QUARTERS.** **P8: COPY OF THE ORDER NO.XCI-21071/13 D.DIS DTD. 26/08/2013 PASSED BY THE 2ND RESPONDENT.** ## **RESPONDENT'S EXHIBIT:** **R1(a): REPORT OF THE 3 MEMBERS COMMITTEE.** **/TRUE COPY/** **P.S.TO JUDGE** **Kss** ## **A.V.RAMAKRISHNA PILLAI, J** --------------------------------------------- W.P.(C) No.26280 of 2011 --------------------------------------------Dated this the 26[th] day of February, 2014 ## **JUDGMENT** Ext.P6 order is under challenge. 2. The petitioner is having a three star classified hotel and obtained Ext.P2 license for conducting a bar license from 15.11.2005. The petitioner obtained an FL-3 license under Rule 13(3) of the Foreign Liquor Rules (Ext.P2) which is being continued uninterruptedly from 15.11.2005 by renewing the same every year. The license was lastly renewed till 31.3.2012. The license of the petitioner was cancelled vide Ext.P3 order of the second respondent dated 10.8.2009 on the ground that at the time of the original grant of license, the distance between the gate of a Government U.P.School and the petitioner's hotel was 158 metres. The petitioner challenged the WPC No.26280 of 2011 2 same before this Court in WPC No.23131/2009. The same was disposed of vide Ext.P4 judgment directing the first respondent to consider the matter afresh, after affording the petitioner an opportunity of being heard. Ext.P2 license was renewed till the compliance of Ext.P4 judgment by the first respondent. Later, Ext.P7 report was obtained from the Deputy Excise Commissioner, Intelligence & Investigation Bureau, Head Quarters which states that if the distance is measured through the zebra crossing, the distance is 298.80 metres. On the basis of the same, Ext.P6 was passed by the first respondent cancelling the license on the same ground that at the time of original grant of license, the distance was less than 200 metres from the school. It is in this background, the petitioner has come up before this Court. 3. The State has filed a detailed counter affidavit wherein they have averred as follows: WPC No.26280 of 2011 3 In compliance with the judgment, the first respondent has passed Ext.P6 order cancelling the FL3 license issued to the Hotel Sky Palace, Kannur vide G.O.(Rt) No.701/2011/TD dated 1.10.2011. Government have examined the matter with available records, in detail. It was revealed that the Bar Hotel was situated in an objectionable site at the time of granting of FL3 license in the year 2005. The zebra crossing was made only during 2007 as per work order dated 20.6.2007 issued from Kannur Municipality. It is very clear that the zebra crossing was drawn after a gap of more than one and a half years since the opening of the bar and the bar hotel was in an objectionable site at the time of grant of FL3 license. The distance between the Hotel Sky Palace and its nearest objectionable site, Government U.P.School, Thavarakkara was measured by several officers, Assistant Excise Commissioner, Kannur, Deputy Commissioner of Excise, Northern Zone, Kozhikkode, Deputy Commissioner of Excise, Excise Intelligence and Investigation Bureau, Thiruvananthapuram and by the three members committee headed by the Joint Commissioner of Excise, WPC No.26280 of 2011 4 Thiruvananthapuram a senior IAS officer. All of them have reported that the distance was less than 200 metres. The petitioner was also present while measuring the distance. The zebra cross on the road was marked in 2007 as per the work order dated 20.6.2007 of the Kannur Municipality. The FL3 license was issued on 9.11.2005. It is therefore submitted that Ext.P6 order of the Government cancelling the FL3 license was made after considering all relevant matters and hence the decision of the government is correct and legal. The FL3 license granted to the hotel is liable to be cancelled in the light of the facts revealed.” 4. I have heard the learned senior counsel appearing for the petitioner and the learned Senior Government Pleader in the matter. The following were the arguments advanced by the learned senior counsel for the petitioner. i) The first respondent has not considered the fact that the zebra crossing was drawn by the Municipality on 20.6.2007 and even if the petitioner applies for a fresh grant of license, the petitioner is entitled to get an FL3 license, especially, in the light of the principles laid down WPC No.26280 of 2011 5 by this Court in _**State of Kerala**_ v _**Vijayakumar**_ (2009(1) KLT 578). The measurement should be taken along the footpath and through zebra crossing in conformity with the traffic rules. ii) As per the 3[rd] proviso to Note (2) of Rule 13(3) of the Foreign Liquor Rules, all the licenses functional on 31.3.2007 are regularised and more than 120 bar hotels functioning within the objectionable site are regularised by the said proviso. 5. The learned Senior Government Pleader, per contra, inviting my attention to paragraph-5 of the counter, submitted that neither the public nor the educational institution is benefited by the zebra crossing as borne out from the report submitted by the Deputy Commissioner. According to the learned Senior Government Pleader, the petitioner alone was benefited by the said zebra crossing. 6. Admittedly, Ext.P2 license was issued after satisfying all the requirements under Rule 13(3), 13A and 13B of the Foreign Liquor Rules. It is also an admitted fact that the distance between the WPC No.26280 of 2011 6 Government U.P.School and the petitioner's hotel was found to be 298.80 metres, if the measurement is taken through the zebra line. 7. This Court in _**State of Kerala**_ v _**Vijayakumar**_ (2009(1) KLT 578), observed that in measuring the distance from gate to gate along footpath and through zebra crossing in conformity with traffic rules has to be followed. Admittedly, there is a zebra line at present. 8. As rightly pointed out by the learned senior counsel for the petitioner, the petitioner is entitled to get a fresh license even now, as per Rule 13(3) of the Foreign Liquor Rules because the hotel is having three star classification. Therefore, the finding in Ext.P6 that at the time of original grant the distance rule was not followed, is not a valid reason for cancelling Ext.P2 license. It is also relevant to note that the petitioner is entitled to get a fresh license even now. WPC No.26280 of 2011 7 9. It appears from Ext.P6 that the first respondent has not considered the fact that the renewal of license amounts to a fresh grant as held by this Court in _**Abraham v Assistant Excise Commissioner**_ (2002(1) KLT 607). 10. That being the case, even at the time of renewal of license for the year 2011-2012, the measurement has to be taken through the zebra line. It is stated in Ext.P6 that the zebra crossing was shown by the local authority only on 20.6.2007. Therefore, even from 20.6.2007, the distance was more than 200 meters, if the measurement was taken from the zebra crossing, following the principles laid down by this Court in _Vijayakumar's case_ (supra). Therefore, even if the petitioner had applied for a fresh license, the petitioner's firm is entitled to get the license renewed on the basis of the measurement through zebra crossing which is more than 200 meters. Here, it is 298 meters as reported in Ext.P7. As per Rule 13(3) which stood in WPC No.26280 of 2011 8 force in the year 2006, FL3 license could have been issued only to hotels which have obtained three star, four star, five star, five star deluxe, heritage, heritage grand or heritage classic classification from Ministry of Tourism of the Government of India. 11. Admittedly, the petitioner's hotel had a valid three star classification. As per the third proviso to Rule 13(3) of the Foreign Liquor Rules, all existing licenses not having the qualification made mention of in rule 13(3) and are functional on 31[st] March 2007 were regularised. The petitioner's hotel was functioning with the bar license as on 31.3.2007. Therefore, it was argued by the learned senior counsel for the petitioner that without considering the classification and the distance rule, the license stand regularised by virtue of the aforesaid proviso. Unfortunately, this fact escaped the attention of the first respondent while passing Ext.P6 order. When similarly placed persons having hotels functioning within the objectionable sites are WPC No.26280 of 2011 9 permitted to conduct the bar, the cancellation of the license of the petitioner is in violation of Article 14 of the Constitution of India and it is discriminatory. 12. As held by the Apex Court in _**Khoday Distilleries Ltd.**_ v _**State of Karnataka and others**_ reported in 1995(1) SCC 574, similarly placed licensees cannot be treated unequally even for the Abkari business though there is no fundamental right for the said business. 13. It was further argued by the learned Senior counsel for the petitioner that Section 26 of the Abkari Act is the power to suspend/cancel/revoke the license by the Excise Commissioner and the Excise Commissioner while passing Ext.P3 order cancelling the license originally is not empowered to pass such an order under Section 26, once a license is granted and the same is commenced. The provisions under Section 26 can be invoked only if the ingredients in clause (a) to (e) is attracted; it was argued. WPC No.26280 of 2011 10 14. Section 26 deals with the non-payment of rental, tax etc. or breach of conditions of license or permit as well as the conviction of licensee for certain offences. Evidently and admittedly too, there is no violation of any of the conditions of license or any ingredients of Section in this case to pass an order like Ext.P6. Ext.P6 order is in fact a confirmation of Ext.P3 order by virtue of the power under Rule 40 of the Foreign Liquor Rules of the Government. 15. It is true that the Apex Court has opined that the law/rule to be reckoned with is the law/rule on the date of consideration of the application. However, since the licenses were already granted and the same were regularised by introducing a proviso in the rules on 1.4.2004, all the licenses are permitted to be continued. Therefore, the licenses which existed as on 31.3.2007 are to be regularised by the proviso and it cannot be cancelled. WPC No.26280 of 2011 11 On a consideration of the entire materials now placed on record, this Court is of the definite view that the petitioner is entitled to the relief as prayed for. Therefore, this writ petition is allowed. Ext.P6 is quashed. It is hereby declared that the petitioner's firm viz.Hotel Sky Palace is entitled to have Ext.P2 license without any interference from the respondents. The respondents are directed to permit the petitioner to conduct a Bar on the strength of license in their hotel. **sd/- A.V.RAMAKRISHNA PILLAI JUDGE** css/ true copy P.S.TO JUDGE