Hotel Virad, N.K.Kottakkal v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **FRIDAY, THE 3RD DAY OF NOVEMBER 2017/12TH KARTHIKA, 1939** ## **WP(C).No. 30400 of 2017 (Y)** **-------------------------------------------** ## **PETITIONER(S) :** **-------------------------** **HOTEL VIRAD, N.K.KOTTAKKAL, EDARIKKODE P.O., MALAPPURAM DISTRICT, REPRESENTED BY ITS MANAGING PARTNER, K.VIJAYAN, AGED 60 YEARS, S/O.M.K.PADMANABHAN NAIR (LATE).** **BY SRI.C.C.THOMAS (SENIOR ADVOCATE) ADVS. SRI.M.G.KARTHIKEYAN SRI.NIREESH MATHEW** **RESPONDENT(S) :** - **-----------------------------** **1. STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES (A) DEPARTMENT, GOVT. SECRETARIAT, THIRUVANANTHAPURAM - 695 001.** **2. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM - 695 033.** **3. THE DEPUTY COMMISSIONER OF EXCISE, MALAPPURAM - 676 505.** **BY SRI.K.V.SOHAN, STATE ATTORNEY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-10-2017, ALONG WITH W.P(C).NO. 31540 OF 2017, THE COURT ON 03-11-2017 DELIVERED THE FOLLOWING:** **Msd.** ## **WP(C).No. 30400 of 2017 (Y)** ## **-----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** **EXHIBIT-P1: PHOTOCOPY OF THE CLASSIFICATION CERTIFICATE DATED 02.01.2017 ISSUED TO THE PETITIONER.** **EXHIBIT-P2: PHOTOCOPY OF THE FL-3 LICENSE NO.M-19 ISSUED BY THE 2ND RESPONDENT.** **EXHIBIT-P3: PHOTOCOPY OF THE FL-11 LICENSE NO.M21 ISSUED BY THE 3RD RESPONDENT DATED 06.04.2016.** **EXHIBIT-P4: PHOTOCOPY OF THE ORDER DATED 11.07.2017 IN SLP(C) NO.10243/2017 PASSED BY THE HON'BLE SUPREME COURT.** - **EXHIBIT-P5: PHOTOCOPY OF THE LETTER DATED 26.08.2017 ISSUED BY THE 3RD RESPONDENT ALONG WITH THE PLAN.** **EXHIBIT-P6: PHOTOCOPY OF THE APPLICATION DATED 29.08.2017 SUBMITTED BEFORE THE 3RD RESPONDENT.** - **EXHIBIT-P7: PHOTOCOPY OF THE JUDGMENT DATED 31.08.2017 IN WP(C) NO.28631/2017 PASSED BY THIS HON'BLE COURT.** - **EXHIBIT-P8: PHOTOCOPY OF THE ORDER NO.M5-3971/2017 DATED 19.09.2017 PASSED BY THE 3RD RESPONDENT.** **EXHIBIT-P9: PHOTOCOPY OF THE LETTER DATED 25.08.2017 SENT BY THE CHIEF SECRETARY TO THE EXCISE COMMISSIONER.** ## **RESPONDENT(S)' EXHIBITS :** ## **NIL** **//TRUE COPY//** **P.A.TO JUDGE.** **Msd.** ## **C.R.** ## **SHAJI P. CHALY, J.** ----------------------------------------------- ## **W.P.(C) Nos.30400 & 31540 of 2017 ----------------------------------------------Dated this the 3[rd] day of November, 2017** ## **J U D G M E N T** Captioned writ petitions are materially connected in respect of declining renewal of licence to FL-11 licenses on the basis of the judgment of the Apex Court in **State of Tamil Nadu and others v. K. Balu and another** [2017 (1) KHC 26 (SC)] and the clarification order dated 11.7.2017 in the said judgment. The hotel in W.P.(C) No.30400/2017 was conducting bar till 31.3.2015. Consequent to the change of policy, petitioner was issued with FL-11 licence. Though FL-11 licence as per Ext.P3 is renewed for the year 20172018 on payment of requisite fee, same was closed on 1.4.2017 alleging that, the hotel is situated within 500 meters from NH-16 (old NH-17) passing through Kottackal Municipality. According to the petitioner, all hotels opposite to the hotel of the petitioner were also closed. The hotel of the petitioner is located in Edarikode Panchayat whereas 2 W.P.(C) Nos.30400 & 31540 of 2017 Hotel Rydges Inn is situated in the Kottackal Municipality. However, the highway in question is one and the same. It is submitted by the petitioner that as per Ext.P4 clarification order of the Apex Court in **K. Balu** supra, the highways providing connectivity between cities, towns and villages are only considered as highway and the highway passing through cities, towns and villages are not considered as highway. Consequent to Ext.P4, 1[st] respondent issued a letter directing to renew or grant liquor licences to all the liquor outlets, which are situated/located on the side of the highways passing through cities, towns or villages except the highway providing connectivity between the cities, towns and villages. Thereafter, hotel Rydges Inn situated in Kottackal Municipality on the side of the same highway is given renewal of their FL-3 licence but the application submitted by the petitioner is forwarded by the 3[rd] respondent to 2[nd] respondent, evident from Ext.P5 3 W.P.(C) Nos.30400 & 31540 of 2017 requesting, direction to consider the application since the hotel is located within the Panchayat. Petitioner has submitted Ext.P6 application dated 29.8.2017 explaining the legal and factual position and seeking to grant renewal based on Ext.P4 clarificatory order passed by the Apex Court. Thereafter, petitioner has filed W.P.(C) No.28631/2017 and secured Ext.P7 judgment directing the 3[rd] respondent to consider and pass orders on Ext.P6 within two weeks from the date of receipt of a copy of the judgment. Third respondent as per the directives contained in Ext.P7 judgment, passed Ext.P8 without securing any order from respondents 1 and 2, rejecting Ext.P6 application holding that, establishments in municipal area alone are allowed to be renewed as per Ext.P9 letter of the 1[st] respondent, and also interpreting paragraph 7 of the clarificatory order of the Apex Court in **K.Balu** supra. Therefore, according to the petitioner, Ext.P8 is liable to be 4 W.P.(C) Nos.30400 & 31540 of 2017 ## interfered with. 2. A counter affidavit is filed by the 3[rd] respondent, on behalf of 2[nd] respondent refuting the allegations and claims and demands raised by the petitioner. According to the 3[rd] respondent, Ext.P8 order is passed in accordance with Ext.P4 clarificatory order passed by the Apex Court since the hotel of the petitioner is within the prohibited degree of distance from the National Highway - 16 and is situated in the Panchayat area. Therefore, petitioner is not entitled to secure any benefit on the basis of Ext.P4 clarificatory order. It is also contended that, Ext.P4 clarification is issued with respect to hotels situated within the municipal areas, which cannot be stretched by the petitioner to secure the relief as is sought for in the writ petition. That apart it is submitted, the hotel of the petitioner is situated in the Edarikode Panchayat area and that too within the 500 meters distance, prohibited by the Apex Court in **K.Balu** supra. Therefore, it 5 W.P.(C) Nos.30400 & 31540 of 2017 is the contention of the respondents that, Ext.P8 is in accordance with law and interference of this court may not be justified. 3. Similar is the situation with respect to the petitioner hotel in W.P.(C) No.31540/2017. The renewal of the licence for the year 2017-2018 was made after receiving requisite licence fee. But the same is closed on 1.4.2017 holding that, the same is situated within 500 meters from NH-544 (old NH-47) passing through Thrissur Corporation, Kuttanelloor - Mannuthy. Therein also the contention of the petitioner is that, on the very same side of the petitioner hotel, licenses of the other hotels are renewed, situated in the Thrissur Municipal Corporation. Counter affidavit filed is also having the similar contentions. 5. Heard learned senior counsel for the petitioners, Sri.C.C.Thomas, learned State Attorney, Sri.K.V.Sohan and perused the pleadings and the documents on record. 6 W.P.(C) Nos.30400 & 31540 of 2017 6. The discussion made above would make it clear that, consideration of the issues raised in the writ petitions are dependent on the directives contained in the judgment of the Apex Court in **K. Balu** supra, which read thus: “(i) All states and Union Territories shall forthwith cease and desist from granting licences for the sale of liquor along national and state highways. (ii) The prohibition contained in (i) above shall extend to and include stretches of such highways which fall within the limits of a municipal corporation, city, town or local authority; (iii) The existing licences which have already been renewed prior to the date of this order shall continue until the term of the licence expires but no later than 1 April, 2017. (iv) All signages and advertisements of the availability of liquor shall be prohibited and existing ones removed forth with both on national and state highways. (v) No shop for the sale of liquor shall be (i) visible from a national or state highway (ii) directly accessible from a national or state highway and (iii) situated within a distance of 500 meters of the outer edge of the national or state 7 W.P.(C) Nos.30400 & 31540 of 2017 highway or of a service lane along the highway. (vi) All States and Union Territories are mandated to strictly enforce the above directions. The Chief Secretaries and Directors General of Police shall within one month chalk out a plan for enforcement in consultation with the state revenue and home departments. Responsibility shall be assigned inter alia to District Collectors and Superintendents of Police and other competent authorities. Compliance shall be strictly monitored by calling for fortnightly reports on action taken. (vii) These directions issue under Article 142 of the Constitution of India.” 7. From the 2[nd] direction contained above, it is clear that, the prohibition contained in clause (i) above shall be extended to and include stretches of such highways which fall within the limits of a municipal corporation, city, town or local authority. However, Ext.P4 clarificatory order is passed in SLP (Civil) No.10423/2017 on 11.7.2017 wherein the directives extracted above were reproduced, and held as follows in paragraph 7: 8 W.P.(C) Nos.30400 & 31540 of 2017 “7. The purpose of the directions contained in the order dated 15 December 2016 is to deal with the sale of liquor along and in proximity of highways properly understood, which provide connectivity between cities, towns and villages. The order does not prohibit licensed establishments within municipal areas. This clarification shall govern other municipal areas as well. We have considered it appropriate to issue this clarification to set at rest any ambiguity and to obviate repeated recourse to IAs, before the Court.” 8. According to the learned senior counsel for petitioners, by virtue of the directions contained in paragraph 7, even though petitioner hotel is situated in the Panchayat area, since the highway passing through the municipal areas are exempted as per paragraph 7, the highways in question cannot be taken into account as highways and therefore, in accordance with the directions of the Supreme Court in its order dated 11.7.2017, measurement cannot be taken from the highway to the hotels of the petitioners. However, In my considered opinion, the first sentence of paragraph 7 is nothing but reproduction of the gist 9 W.P.(C) Nos.30400 & 31540 of 2017 of the order passed by the Apex Court in respect of the prohibition created. The only relaxation of the prohibition contained in the judgment, is the second sentence which read thus: “The order does not prohibit licensed establishments within municipal areas.” 9. Therefore, the clarification is only with respect to the establishments situated within the municipal areas. This I say because, as per clause (ii) in the judgment, the prohibition was in respect of the hotels situated within the limits of municipal corporation, city, town or local authority. When it was held so by the Apex Court specifically, the municipal area alone is exempted as per Ext.P4 clarificatory order. Learned State Attorney has invited my attention to Article 243P of the Constitution of India, which deals with municipalities. Therein as per clause (d), Municipal area is defined as territorial area of a Municipality as is notified by the Governor and Panchayat area is defined in clause (f) to mean Panchayat constituted under Article 243B. Panchayat is defined under clause (d) of Article 10 W.P.(C) Nos.30400 & 31540 of 2017 243 to mean an institution (by whatever name called) of self government constituted under Article 243B, for the rural areas and Panchayat area is defined under clause (e) to mean the territorial area of a Panchayat. Article 243Q deals with constitution of Municipalities which states that, there shall be constituted in every State a Municipal Council for a smaller urban area. The said provision was brought to my attention by the learned State Attorney in view of the contention advanced by the learned senior counsel for petitioner that municipal area referred to in Ext.P4 clarificatory order of the Apex Court includes a larger area inclusive of Panchayat area, which has the nature and character of a city. 10. Having evaluated the fact situation, I am of the considered opinion that, as per Ext.P4 clarificatory order, Apex Court has modified the order excluding the highways passing through the municipal areas and not Panchayat areas. This is more so consequent to the rigour created under direction No.2 in **K. Balu** supra. Merely because municipal areas are exempted 11 W.P.(C) Nos.30400 & 31540 of 2017 for the purpose of the measurement from a highway, it can never be said that, the highway notified will lose its character as a highway. In that view of the matter, so far as the Panchayat area is concerned, the measurement will have to be taken in accordance with the directions contained in the judgment of the Apex Court in **K.Balu** supra. 11. Taking into account the factual circumstances and reckoning the law as is declared by the Apex Court , I do not think that, the respondent statutory authority has committed any illegality, arbitrariness or error of law in the respective impugned orders declining renewal of licences to the petitioners, justifying interference of this Court, exercising the power of judicial review under Article 226 of the Constitution of India. Resultantly, writ petitions fail, accordingly they are dismissed. Sd/- **SHAJI P. CHALY JUDGE** smv 27.10.2017.