High Court of KeralaSingle JudgeWrit petition disposed of; Ext.P5 and Ext.P9 qu...

Kallada Residency Kodungallur v State of Kerala and Others

Case / Petition Number:WP(C).No.19489 of 2010

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • V. Chitambaresh
Judgment Date
2012-02-21
Court Decision / Holding
The court quashed Ext.P5 and Ext.P9, directing the second respondent to reconsider Ext.P3 afresh in accordance with law, taking into account amendments to Rule 13(3) of the Foreign Liquor Rules. Fresh orders should be passed within one month from receipt of copy of the judgment, with opportunity of hearing for both sides.
Final Disposition
Writ petition disposed of; Ext.P5 and Ext.P9 quashed; licence to be reconsidered afresh in light of law and amended Rule 13(3); fresh orders to be issued within one month; no costs.

Parties to the Case

Appellants / Petitioners

  • Kallada Residency Kodungallur, Thrissur District, represented by its Managing Partner Sri K.R. Syleskumar

Respondents

  • State of Kerala Taxes (A) Department, Govt. Secretariat, Thiruvananthapuram
  • The Excise Commissioner, Commissionerate of Excise, Thiruvananthapuram
  • The Deputy Commissioner of Excise, Thrissur
  • The Circle Inspector of Excise, Excise, Circle Office, Kodungallur, Thrissur District
  • Addl. 5 Mohammad Ali, S/o Abdu Ullamppuza House, Santipuram P.O., Sreenarayanapuram Village, Kodungalloor Taluk, Thrissur District (Addl.R5 impleaded as per order dated 7.12.2011 in I.A.No.12745 of 2011)

Legal Representation & Advocates

Counsels for Petitioners

  • • Sri C.C. Thomas (Sr.)
  • • Sri M.G. Karthikeyan
  • • Sri Nireesh Mathew

Counsels for Respondents

  • • Sri Babu Karukapadath (for Addl.R5)
  • • Government Pleader SMT. Lilly.K.T.

Case Synopsis & Summary

The petitioner, Kallada Residency Kodungallur, a registered hotel partnership firm, sought a renewal or issuance of a Foreign Liquor FL-3 licence to operate a bar attached to its hotel (Ext.P3). The application was initially rejected (Ext.P5) by the Commissioner of Excise and later upheld in revision by the Government (Ext.P9). The writ petition challenges these orders under Article 226, asserting illegality in the grounds for refusal. The authorities’ reasons were threefold: (i) the husband of two partners had a prior Abkari conviction, (ii) two female partners had no independent income, and (iii) the father of four partners was a defaulter in Abkari matters. The court notes that married individuals are separate legal entities and that a husband’s conviction cannot automatically bar a wife from holding a licence; similarly, the lack of independent income for some partners does not automatically disqualify, especially where the firm’s reconstitution (Ext.P17) and prior licences (Ext.P20) demonstrate the women's compliance and capability. The court also finds that the “shadow” of a relative’s default cannot eclipse valid claims, citing State of Kerala v. P.A. Radhakrishnan (2010) for the proposition. The court emphasizes public need (based on Exts.P12–P14) and notes that the grounds rely on Rule 39 and public sentiment, which cannot override lawful licensing principles. It quashes the challenged orders and directs the Excise Department to reconsider Ext.P3 afresh, incorporating amendments to Rule 13(3) and ensuring due process within a month, with hearing opportunities for both sides. No costs.

Provisions of Law Cited

Article 226 of the Constitution of IndiaRule 13A(5) of the Foreign Liquor RulesRule 13A(1) of the Foreign Liquor RulesRule 39 of the Foreign Liquor RulesRule 13(3) of the Foreign Liquor Rules

Legal Doctrines & Maxims

  • Husband and wife are separate legal entities.
  • No fundamental right to conduct business in foreign liquor; privilege cannot be denied arbitrarily.
  • Shadow of a relative's default cannot eclipse legitimate claims of the sons.
  • Public need must be established in licensing decisions.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that the grounds relied upon for rejecting the FL-3 licence are untenable and violative of established law. They argue that the husband’s Abkari conviction does not automatically bar the wife’s eligibility; reconstitution of the partnership (Ext.P17) and the partner’s prior FL-3 licence (Ext.P20) demonstrate financial competence and compliance. They assert that two women partners having no independent income should not be fatal where the licensing entity is the firm, and any deficits are cured by the firm’s assets and income. The ground regarding a defaulter father is misapplied, as jurisprudence holds that familial defaults do not eclipse legitimate claims of the sons or heirs. They rely on the evidence of public need (Exts.P12–P14) and argue that the department ought to act consistently with Exts.P10, P11 and P19 judgments addressing public need assessment. They urge quashing Ext.P5 and Ext.P9 and directing fresh consideration under fair procedure, with due regard to amendments to Rule 13(3).

Contentions of Respondents

Respondents maintain that licence denial was grounded in public interest and the partners’ credentials, including potential risk factors linked to Abkari history and financial independence, which justify caution. They rely on Rule 39 and the public need principle, supported by ward resolutions (Ext.R5(b), Ext.R5(c)) and communications (Exts.P12–P14). They argue there is no fundamental right to foreign liquor; licensing falls within discretion subject to public interest, and the department acted in accordance with Rule 13A(5) and Rule 13A(1). They urge against automatic grant due to perceived social resentment and potential impact on the local economy and safety. They contend that reassessment must balance law, policy, and public sentiment, and caution against arbitrary grant.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
State of Kerala and Others v. P.A.Radhakrishnan and Others2010 (2) KHC 231 (DB)PositiveThe court cites this decision to support the proposition that the shadow of a relative's default cannot eclipse legitimate claims of sons.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH TUESDAY, THE 21ST DAY OF FEBRUARY 2012/2ND PHALGUNA 1933 WP(C).No. 19489 of 2010 (I) --------------------------- PETITIONER(S): ------------- KALLADA RESIDENCY KODUNGALLUR, THRISSUR DISTRICT, REPRESENTED BY ITS MANAGING PARTNER, SRI.K.R.SYLESKUMAR AGED 45 YEARS, S/O.K.V.RAMAKRISHANAN (LATE). BY ADVS.SRI.C.C.THOMAS (SR.) SRI.M.G.KARTHIKEYAN SRI.NIREESH MATHEW RESPONDENT(S): -------------- 1. STATE OF KERALA TAXES (A) DEPARTMENT, GOVT.SECRETARIAT THIRUVANANTHAPURAM. 2. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM. 3. THE DEPUTY COMMISSIONER OF EXCISE, THRISSUR. 4. THE CIRCLE INSPECTOR OF EXCISE, EXCISE, CIRCLE OFFICE, KODUNGALLUR THRISSUR DISTRICT. ADDL. 5. MOHAMMADALI, S/O.ABDU ULLAMPUZHA HOUSE, SANTHIPURAM P.O. SREENARAYANAPURAM VILLAGE KODUNGALLOOR TALUK, THRISSUR DISTRICT. (ADDL.R5 IS IMPLEADED AS PER ORDER DATED 7.12.2011 IN I.A.NO.12745 OF 2011) R,ADDL.R5. BY SRI.BABU KARUKAPADATH R,R1-R4 BY GOVERNMENT PLEADER SMT.LILLY.K.T. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN W.P.(C) NO.19489 OF 2010 - EXT.P1 PHOTOCOPY OF THE PARTNERSHIP DEED DATED 1.4.2009 EXECUTED BETWEEN THE PARTNERS OF THE PETITIONER FIRM. - EXT.P2 PHOTOCOPY OF THE STAR CLASSIFICATION ORDER DATED 3.9.2009 ISSUED BY THE INDIA TOURISM, CHENNAI. - EXT.P3 PHOTOCOPY OF THE APPLICATION DATED 14.9.2009 SUBMITTED BEFORE THE SECOND RESPONDENT. - EXT.P4 PHOTOCOPY OF THE APPLICATION DATED 8.12.2009 SUBMITTED BEFORE THE 2ND RESPONDENT. - EXT.P5 PHOTOCOPY OF THE ORDER NO.XC6-29466/09 DATED 22.3.2010 PASSED BY THE SECOND RESPONDENT. - EXT.P6 PHOTOCOPY OF THE REVISION PETITION DATED 29.3.2010 SUBMITTED BEFORE THE 1ST RESPONDENT. - EXT.P7 PHOTOCOPY OF THE JUDGMENT DATED 6.4.2010 IN W.P.(C) NO. 12018/2010 PASSED BY THIS HON'BLE COURT. - EXT.P8 PHOTOCOPY OF THE COVERING LETTER DATED 17.4.2010 SENT TO THE FIRST RESPONDENT. - EXT.P9 PHOTOCOPY OF THE ORDER, G.O.(RT) NO.505/10/TD DATED 11.6.2010 PASSED BY THE 1ST RESPONDENT. - EXT.P10 PHOTOCOPY OF THE JUDGMENT DATED 14.9.1998 IN O.P.NO. 11291 OF 1998 PASSED BY THIS HON'BLE COURT. - EXT.P11 PHOTOCOPY OF THE JUDGMENT DATED 1.2.2002 IN O.P.NO. 24368 OF 2002 PASSED BY THIS HON'BLE COURT. - EXT.P12 PHOTOCOPY OF THE LETTER DATED 1.12.2009 SENT BY THE JOINT COMMISSIONER OF EXCISE TO THE EXCISE COMMISSIONER. - EXT.P13 PHOTOCOPY OF THE LETTER DATED 18.1.2010 SENT BY THE JOINT EXCISE COMMISSIONER TO THE EXCISE COMMISSIONER. - EXT.P14 PHOTOCOPY OF THE LETTER DATED 17.2.2010 SENT BY THE JOINT COMMISSIONER OF EXCISE TO THE EXCISE COMMISSIONER. - EXT.P15 PHOTOCOPY OF THE LETTER DATED 22.10.2010 ISSUED BY SMT.RAJITHA ASHOKAN TO THE PETITIONER FIRM. - EXT.P16 PHOTOCOPY OF THE DEED OF RETIREMENT DATED 3.11.2010 OF SMT.RAJITHA ASHOKAN FROM THE PETITIONER FIRM. - EXT.P17 PHOTOCOPY OF THE DEED OF RECONSTITUTED PARTNERSHIP DATED 3.11.2010 EXECUTED BETWEEN THE PARTNERS OF THE PETITIONER FIRM. W.P.(C) No.19489 of 2010 : 2 : EXT.P18 PHOTOCOPY OF THE FORM-V NOTICE DATED 3.11.2010 SENT TO THE REGISTRAR OF FIRMS. EXT.P19 PHOTOCOPY OF THE JUDGMENT DATED 25.1.2011 IN W.A.NO. 1312/2010 PASSED BY THE HON'BLE HIGH COURT OF KERALA. - EXT.P20 PHOTOCOPY OF THE FL-3 LICENCE NO.113/2011-12 ISSUED TO ONE OF THE PARTNERS OF THE PETITIONER FIRM. ## RESPONDENTS EXHIBITS: - EXT.R1(a) TRUE COPY OF THE REPORT BY THE 3RD RESPONDENT. - EXT.R5(a) A TRUE COPY OF THE RESOLUTION DATED 13.1.2007 PASSED BY GRAMA SABHA OF WARD NO.7 OF SREE NARAYANA PURAM GRAMA PANCHAYAT. - EXT.R5(b) A TRUE COPY OF THE RESOLUTION DATED 13.1.2007 PASSED BY GRAMA SABHA OF WARD NO.8 OF SREE NARAYANA PURAM GRAMA PANCHAYAT. - EXT.R5(c) A TRUE COPY OF THE RELEVANT NOTIFICATION OF INDIA TOURISM-CHENNAI, GOVERNMENT OF INDIA. - EXT.R5(d) TRUE COPIES OF SOME OF THE PHOTOGRAPHS RELATING TO THE SATYAGRAHA. - EXT.R5(e) A TRUE PHOTOSTAT COPY OF THE MADHYAMAM SUPPLEMENT DATED 7.8.2010 ISSUED BY THE SAID DAILY ON THE SUCCESSFUL COMPLETION OF THE SATYAGRAHA. - EXT.R5(f) TRUE COPY OF THE REPORT DATED 23.7.2007 SUBMITTED BY THE DEPUTY COLLECTOR, VIGILANCE TO COMMISSIONER, LAND REVENUE REGARDING THE FRAUDULENT SALE OF THE PROPERTY OF LATER SRI. K.V. RAMAKRISHNAN. //TRUE COPY// P.S. TO JUDGE. ## **V.CHITAMBARESH, J.** ------------------------------- ## **W.P.(C) No. 19489 of 2010** ------------------------------- ## **Dated this the 21[st] day of February, 2012** ## **J U D G M E N T** The petitioner is a registered partnership firm which runs a hotel on the side of National Highway 17. Ext.P2 Star Classification order reflects that the hotel has been awarded three star category by the Tourism Department. Ext.P3 is the application put in by the firm for FL-3 licence to conduct a bar attached to the hotel. The firm constituted under Ext.P1 partnership deed has since been reconstituted by Ext.P17 partnership deed. The application for FL-3 licence was rejected by Ext.P5 order of the Commissioner of Excise. The same has been confirmed in revision by Ext.P9 order of the Government. Exts.P5 and P9 orders are challenged in this writ petition under Article 226 of the Constitution of India. 2. Primarily, three reasons have been stated for declining licence by the authorities. They are: i) The husband of two of the partners have been convicted in an Abkari case. ii) Two of the partners who are ladies have no W.P.(C) No.19489 of 2010 2 independent income. iii) The father of four of the partners was a defaulter in an Abkari case. It is trite law that the husband and wife are separate legal entities. The fact that the husband has been convicted is no bar for the wife to apply for licence. The disqualification so alleged against Mrs.Rajitha and Mrs.Nisha Shelly are hence untenable. 3. The ground that two of the ladies have no independent income is also not tenable. One of the partners by name Mrs.Rajitha has since retired from partnership as evident by Ext.P17 deed. Even otherwise the applicant is the partnership firm and not an individual partner and the reconstitution has no much significance. Another partner Mrs.Nisha Shelly has herself been given FL-3 licence in respect of another premises as evident by Ext.P20. Moreover there is no finding that these two ladies are not financially sound in terms of Rule 13A(5) of the Foreign Liquor Rules. It is one thing to state that they have no independent income and another to state that they are not W.P.(C) No.19489 of 2010 3 financially sound. This ground stated in Exts.P5 and P9 orders are also unsustainable. 4. The last of the grounds stated is that the father of four of the partners was a defaulter in Abkari business. This Court in **State of Kerala and Others v. P.A.Radhakrishnan and Others** (2010 (2) KHC 231 (DB) has held that the shadow of father's default cannot eclipse the legitimate claims of sons. It is also submitted that the dues of the father has since been cleared by the legal heirs. Therefore that ground stated in Exts.P5 and P9 orders also falls to the ground. 5. What remains to be seen is as to whether there is a public need in terms of Rule 13A(1) of the Foreign Liquor Rules. Exts. P12, P13 and P14 communications of the Joint Commissioner of Excise unequivocally show that there is public need. No better data is available to the Department to hold otherwise as far as this grant is concerned. The petitioner has averred that there are 10 bar attached hotels in and around Kodungallur and none has any star classification. Exts.P10, P11 W.P.(C) No.19489 of 2010 4 and P19 judgments of this Court indicate as to how a public need has to be assessed. It can safely be concluded that the observations in Exts.P5 and P9 orders that there is no public need militate against the dictum in Exts.P10, P11 and P19 judgments. 6. The fifth respondent who got himself impleaded in the writ petition relies on Rule 39 of the Foreign Liquor Rules. He contends that licence can legitimately be refused on grounds of public interest or expediency. Reliance is placed on Ext.R5(b) and Ext.R5(c) resolutions of the ward to highlight that there is public resentment over the opening of bar hotel. Such a ground is unavailable to him or the Department when admittedly the place is dotted with bars and hotels. The Government Pleader contends that there is no fundamental right to conduct business in foreign liquor. But the privilege to conduct trade in foreign liquor cannot be denied arbitrarily. The petitioner is entitled to be treated in the same manner as any other privileged licence of the same class. It necessary follows that Exts.P5 and P9 orders W.P.(C) No.19489 of 2010 5 deserve to be quashed and I do so. 7. I direct the second respondent to reconsider Ext.P3 application for licence afresh in accordance with law. The impact of amendment to Rule 13(3) of the Foreign Liquor Rules with effect from 9.12.2011 may also be considered by him. The question as to whether the grant is governed by the law as on the date of the application or as on the date of consideration is left open. Fresh orders on Ext.P3 application for licence will be passed within a period of one month from the date of receipt of a copy of this judgment. Needless to say that the petitioner as well as the fifth respondent shall be afforded an opportunity of being heard in the exercise. The writ petition is disposed of as above. No costs. **V.CHITAMBARESH, Judge.** nj. ## **V.CHITAMBARESH, J.** -------------------------------------- W.P.(C) No. 19489 of 2010 ## **JUDGMENT** Dated:- 21[st] February, 2012 --------------------------------------