K. Reghunath and C. Vijayan v. State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **MONDAY, THE 15TH DAY OF JULY 2013/24TH ASHADHA, 1935** ## **WP(C).No. 9020 of 2013 (B)** ## **--------------------------------------** **PETITIONERS:** **---------------------** ## **1. K.REGHUNATH,** - **PARTNER, K.R.GRAND RESIDENCY, KUNNAMKULAM, AGED 58 YEARS, S/O.MAKKUTY, KATTAMPLI HOUSE, PERUMPLIAVU P.O, THRISSUR DISTRICT.** **2. C.VIJAYAN, PARTNER, K.R.GRAND RESIDENCY, KUNNAMKULAM, AGED 63 YEARS, S/O.NARAYANAN, CHENNATHODI HOUSE, NORTH EDAYUR P.O, MALAPPURAM DISTRICT.** **BY SRI.P.VIJAYA BHANU, SENIOR ADVOCATE, ADVS. SMT.M.C.ASHI, SMT.M.M.DEEPA, SRI.VIPIN NARAYAN.** **RESPONDENTS:** - **------------------------** **1. STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES(A) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.** **2. EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM-695 001.** **3. THE DEPUTY COMMISSIONER OF EXCISE, THRISSUR-680 003.** **4. THE CIRCLE INSPECTOR OF EXCISE, WADAKKANCHERRY-680 582.** ## **BY SR. GOVERNMENT PLEADER SRI. RAMPRASAD UNNI.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-07-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Prv.** ## **W.P.(C).NO.9020/2013-B:** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **EXHIBIT P1 : TRUE COPY OF THE APPLICATION DT.26-3-2012 FOR FL-3 LICENSE BEFORE THE R2.** - **EXHIBIT P2 : TRUE COPY OF THE ORDER NO.XC6-8992/12/DT.17-5-2012 ISSUED BY THE R1.** - **EXHIBIT P3 : TRUE COPY OF THE CLASSIFICATION CERTIFICATE GRANTING 4 STAR CATEGORY TO THE 1ST PETITIONER FIRM DT.21-6-2012.** - **EXHIBIT P4 : TRUE COPY OF THE APPLICATION DT.22-6-2012 SUBMITTED TO THE R2.** - **EXHIBIT P5 : TRUE COPY OF THE ORDER NO.XC6-16379/12/K.DIS. DATED 28-7-2012 ISSUED BY THE R2.** - **EXHIBIT P6 : THE JUDGMENT DT.27-7-2012 BY THE DIVISION BENCH OF THIS HON'BLE COURT IN W.A.NO. 470/2012 AND CONNECTED WRIT APPEALS WAS REPORTED AS SURENDRA DAS B V.STATE OF KERALA REPORTED IN 2012(3) KHC 653.** - **EXHIBIT P7 : TRUE COPY OF THE JUDGMENT IN W.P.(C).NO. 15356/2012 OF THIS HON'BLE COURT DT.1-8-2012.** - **EXHIBIT P8 : TRUE COPY OF THE REPRESENTATION PREFERRED TO THE R2 DT.8-8-2012.** - **EXHIBIT P9 : TRUE COPY OF THE HON'BLE SUPREME COURT IN ORDER IN S.L.P.NO.26241-26243/2012 WITH SLP.NO. 27163-27182/2012 DT.19-9-2012.** - **EXHIBIT P10 : TRUE COPY OF THE OFFICE REPORT OF THE HON'BLE SUPREME COURT IN S.L.P.NO.26241-26243/2012 WITH SLP.NO. 27163-27182/2012 DT.2-3-2013.** - **EXHIBIT P11 : TRUE COPY OF THE OFFICE REPORT OF THE HON'BLE SUPREME COURT IN CONTEMPT PETITIONS IN SLP.NO.26241-26243/2012 WITH SLP.NO. 27163-27182/2012 DT.18-1-2013.** - **EXHIBIT P12 : TRUE COPY OF THE GOVERNMENT ORDER GO(RT)NO.180/2013/TD DT.2-3-2013 ISSUED BY THE R.1.** - **EXHIBIT P13 : TRUE COPY OF THE GOVERNMENT ORDER, GO(P)NO.20/2013/TD DATED 12-2-2013 ISSUED BY THE R1.** - **EXHIBIT P14 : TRUE COPY OF THE STATEMENT OF THE 1ST PETITIONER RECORDED BY R4 DT.30-6-2012.** **Prv.** ## **W.P.(C).NO.9020/2013-B:** **EXHIBIT P15 : TRUE COPY OF THE STATEMENT OF THE 2ND PETITIONER RECORDED BY THE R4 DT.30-6-2012.** - **EXHIBIT P16 : TRUE COPY OF THE ORDINANCE ISSUED BY THE GOVERNMENT OF KERALA DT.25-11-2012.** **EXHIBIT P17: NIL.** **EXHIBIT P18: TRUE COPY REPORT NO:XC6-18967/2012 DT. 15/01/2013 ISSUED BY THE COMMISSIONER OF EXCISE, THIRUVANANTHAPURAM, (THE 2ND RESPONDENT HEREIN) TO THE R.1.** ## **RESPONDENTS' EXHIBITS: NIL.** ## **//TRUE COPY//** **P.A. TO JUDGE.** **Prv.** ## **A.M.SHAFFIQUE,J.** -------------------------------W.P.(C).No. 9020 OF 2013 -------------------------------Dated this the 15[th] day of July, 2013 ## **JUDGMENT** Petitioner has applied for an FL3 licence in respect of a hotel he has constructed under the name and style “KR GRAND REGENCY”. According to him, he had submitted all necessary particulars for the grant of licence in terms with the Rules. Finally by Ext.P18 order the Commissioner of Excise as per proceedings ZC 6-18967/2012 dated 15.1.2013 recommended the grant of licence in the light of the directions of the Supreme Court in respect of the grant of licence and subject to the decision of the Supreme Court in SLP(C)Nos.26241-26243/2012, 27163-27182/2012 and subsequent changes to be made in the abkari policy of the Government. 2. According to the petitioner, though such an order had been passed by the Excise Commissioner, subsequently by the impugned order dated 2.3.2013 at Ext.P12, the Government rejected the application of the petitioner on the basis of the judgment of the Supreme Court in B Six case and Kandath Distillery case. 3. Reference to the impugned order would show that the Government has taken a conscious policy decision not to grant any more bar licences as per G.O.(Ms) 12/2013/TD dated 23.1.2013 and the Foreign Liquor Rules thereon was also amended to that effect. It is further observed that on examining the application for W.P.(C).No. 9020 OF 2013 2 the FL3 licence of the petitioner it was found that B Six case the Supreme Court held that the FL-3 licence should be considered by the licensing authority by applying the law prevailing as on the date of consideration and not with reference to the law that was applicable on the date of application and Kandath Distillery case the Supreme Court had held that the State has necessary power to frame and reframe, change or re-change, adjust or readjust the policy which cannot be declared as illegal or arbitrary on the ground that the policy was better and suited to the prevailing situations. 4. This order is impugned by the petitioner. Petitioner submits that initially they had submitted an application for FL-3 licence on 26.3.2012 as Ext.P1 the second respondent had rejected the said application on the ground that petitioner did not have the 4 star classification certificate. Ext.P2 is the said order dated 17.5.2012. Subsequently the petitioner obtained the classification certificate on 21.6.2012 and the application was resubmitted on 22.6.2012 by way of Ext.P4. Again the application is rejected by Ext.P5 dated 28.7.2012. It is stated that the petitioner did not submit the classification certificate and the third respondent could not conduct necessary inspection in the hotel. According to the petitioner, the reasons stated is absolutely incorrect. Later in the batch of Writ Appeal No.470 of 2012 and connected cases, this W.P.(C).No. 9020 OF 2013 3 Court had set aside the Government Order dated 9.2.2011 the basis on which Ext.P5 order came to be passed. Petitioner also filed WP (C) No.15356 of 2012 and pursuant to judgment dated 1.8.2012 petitioner preferred a representation before the second respondent in order to get the benefit of judgment in W.A.No.470 of 2012 and connected cases and sought for the issuance of FL-3 licence. The representation is Ext.P8 dated 8.8.2012. Thereafter no orders were passed. According to the petitioner, the first respondent preferred a Special Leave Petition before the Supreme Court challenging the judgment in W.A.No.470 of 2012 and connected cases. While considering the said matter, the learned Solicitor General of India who appeared for State of Kerala has undertook that all the pending applications will be considered within 8 weeks and those applicants who are found to be successful will be granted licence in accordance with law. Ext.P9 is the said order passed by the Supreme Court taking note of the said undertaking. The petitioner submits that despite such an undertaking at Ext.P9, the first respondent did not take any action and therefore, the petitioner filed an application before the Supreme Court as Ext.P10 along with impleading petitions, to take contempt against the first respondent. In the mean time, the Government had passed Ext.P12 order. 5. According to the petitioner, there is no reason for denying the petitioner the FL-3 licence. The reasons stated by them in W.P.(C).No. 9020 OF 2013 4 initially rejecting the FL-3 licence was set aside by this Court in W.A.No.470 of 2012 and connected cases and therefore, there is no reason for taking such a view. 6. A statement is filed by the second respondent inter alia contending that as per G.O.(P) 48/2012/TD dated 27.3.2012, the Foreign Liquor Rules were amended to the extend that no new FL-3 licence shall be granted to the hotels which are located within a radius of 3 Kms in Grama Panchayat, 1 Km in Municipal Corporation/City Corporation area from another hotel having an FL3 licence. In so far as the petitioner's hotel is situated in a Municipal area and there are two FL-3 licensed hotels functioning within 1Km radius of the hotel, licence cannot be issued to the petitioner. In respect of the order issued at Ext.P9 it is stated that the State Government was only directed to consider the application and grant licence to successful applicants in accordance with law. It is therefore submitted that in so far as the decision is to be taken by the Government with reference to the date on which the application is to be considered as held by the Supreme Court in B Six v. State of Kerala, as on the said date the rules have been amended and therefore, the petitioner is not entitled to the said benefit. 7. Heard the learned counsel appearing for the petitioner and the learned Government Pleader. W.P.(C).No. 9020 OF 2013 5 8. The short question involved in the above case is the date on which the application of the petitioner is to be considered. It is not in dispute that as per Ext.P9 judgment, the Government had given an undertaking that all the pending applications will be considered in accordance with the unamended rules. That was a case in which the question related to the grant of FL-3 licence for 3 star hotels as in the mean time an amendment was incorporated by which a decision was taken to grant FL-3 licence only to 4 star classification hotels. Apparently the petitioner is a 4 star classification hotel, and therefore the decision in the judgment impugned in the Special Leave Petitions pending before the Supreme Court will not have any application. But the fact remains that when an application is filed by an applicant, the same is required to be considered in accordance with the rules prevailing as on the date when the application is filed. That is the view taken by the Division Bench in W.A.No.470 of 2012 and connected cases. Viewed in the light of the said judgment, it is not open for the Government now to state that by virtue of the rules coming into force ,FL-3 licence cannot be issued in respect of a municipal area within 1Km from the radius of other licence holders. 9. The learned counsel for the petitioner relied upon the judgment of this Court in **Kallada Hotels and Resorts v. State of Kerala (2012(2) KLT 167** ), wherein a Division Bench of this Court W.P.(C).No. 9020 OF 2013 6 held that if orders had been issued without committing a mistake the appellant in the said case would have got the licence even before the new policy was introduced. It is further held that licence cannot be declined on account of a mistake committed by the excise authorities. Finally it is held that case the application is to be considered and disposed of by the Government and Excise Commissioner with reference to Rule 13(3) as it stood prior to the amendment introduced to it with effect from 9.12.2011. The same situation had arisen in this case also. The amendment had come into force only on 27.3.2012. As far as the petitioner is concerned his application was originally submitted along with all the particulars on 22.6.2012. Ext.P18 is the order issued by the Excise Commissioner in terms of Rule 13(3) of the Foreign Liquor Rules on 15.1.2013. Going by the Rules under 13(3), the ultimate authority to decide upon grant or rejection of FL-3 licence is the Excise Commissioner. I do not find any provision by which the Government is empowered to issue any orders under the rules, though as a matter of procedure, the Government directs the grant of licence. But if one goes by the rules as such, Government has nothing to do with the grant of licence and it is purely within the discretion of the Excise Commissioner to grant the licence in terms of Rule 13(3) of the Foreign Liquor Rules. 10. It is also relevant to note that there had been substantial W.P.(C).No. 9020 OF 2013 7 delay on the part of the authorities in considering the application of the petitioner. Ext.P5 order rejecting the application was issued without taking into consideration the documents produced. It was stated in Ext.P5 that supporting documents and the original star classification certificate was not produced and the Deputy Excise Commissioner has not inspected the hotel and has not recommended the application. But in Ext.P18 it could be seen that all the authorities had recommended the grant of licence and therefore, there is no reason for the Government to have rejected the aforesaid application. In these circumstances, I am of the view that this writ petition is only to be allowed as follows: Exts.P5 and P12 are quashed. Respondents are directed to issue necessary FL-3 licence in favour of the petitioner on the basis of Ext.P18 recommendation made by the Excise Commissioner under Rule 13(3) of the Foreign Liquor Rules, as if the licence is deemed to have been issued on the date of Ext.P5 with reference to the statutory provision as available at that time. This may be done within a period of one month from the date of receipt of a copy of this judgment. ## **A.M.SHAFFIQUE, JUDGE** cms