Kerala State Beverages (Manufacturing & Marketing) Corporation Limited v. State of Kerala & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **FRIDAY, THE 28TH DAY OF JULY 2017/6TH SRAVANA, 1939** ## **WP(C).No. 4439 of 2017 (D)** **----------------------------------------** **PETITIONER(S) : -------------------------** **KERALA STATE BEVERAGES (MANUFACTURING & MARKETING), CORPORATION LIMITED, BEVCO TOWER, VIKAS BHAVAN P.O., PALAYAM, THIRUVANANTHAPURAM-33, REPRESENTED BY ITS REGIONAL MANAGER, CENTRAL ZONE-II, ERNAKULAM, SRI.K.N RAJATH.** ## **BY ADV. SRI.NAVEEN.T** - **RESPONDENT(S) : -----------------------------** **1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, LOCAL SELF GOVERNMENT SECRETARIAT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.** **2. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM-695 001.** **3. KOTHAMANGALAM MUNICIPALITY, KOTHAMANGALAM, REPRESENTED BY ITS SECRETARY, KOTHAMANGALAM-686 691.** **4. THE SECRETARY, KOTHAMANGALAM MUNICIPALITY, OFFICE OF THE KOTHAMANGALAM MUNICIPALITY, KOTHAMANGALAM-686 691.** **..2/-** **..2..** ## **WP(C).No. 4439 of 2017 (D)** **----------------------------------------** ## *** ADDITIONAL R5 IMPLEADED** **5. MATHRUKA NAGAR RESIDENTS ASSOCIATION, REP. BY SECRETARY, MILLUPADY, KOTHAMANGALAM TALUK, ERNAKULAM DISTRICT.** - **ADDITIONAL R5 IS IMPLEADED AS PER ORDER DATED 22.02.2017** **IN I.A.NO. 2762 OF 2017.** **R1 & R2 BY SR. GOVERNMENT PLEADER SRI. P.M.MANOJ R3 & R4 BY ADV. SRI.PEEYUS A.KOTTAM ADDL.R5 BY ADV. SRI.JOBY JACOB PULICKEKUDY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26-07-2017, ALONG WITH W.P(C).NO. 14001 OF 2017, THE COURT ON 28-07-2017 DELIVERED THE FOLLOWING:** Msd. ## **WP(C).No. 4439 of 2017 (D) ----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** - **EXHIBIT P1 TRUE COPY OF THE EXCISE LICENCE ISSUED BY THE EXCISE DEPARTMENT ALONG WITH THE PRESENT SCHEDULE.** - **EXHIBIT P2 TRUE COPY OF THE PROCEEDINGS DATED 23-01-2017 ISSUED BY THE DEPUTY COMMISSIONER OF EXCISE ERNAKULAM.** - **EXHIBIT P3 TRUE COPY OF THE APPLICATION FOR D & O LICENCE SUBMITTED BY THE PETITIONER CORPORATION BEFORE THE KOTHAMANGALAM MUNICIPALITY.** - **EXHIBIT P4 TRUE COPY OF THE COMMUNICATION DATED 07-02-2017 ISSUED BY THE KOTHAMANGALAM MUNICIPALITY.** **EXHIBIT P5 TRUE COPY OF THE JUDGMENT DATED 25-10-2011 IN WA NO.628 OF 2010 OF THIS HON'BLE COURT.** - **EXHIBIT P6 TRUE COPY OF THE JUDGMENT DATED 21-06-2012 IN WA NO.1143 OF 2012 OF THIS HON'BLE COURT.** ## **RESPONDENT(S)' EXHIBITS :** **EXHIBIT R5(A): PHOTOGRAPH OF KARINGAZHA SREE NARAYANA GURUDEVA TEMPLE.** **EXHIBIT R5(B): TRUE PHOTOCOPY OF NOTICE IN RESPECT OF THE FESTIVAL CONDUCTED IN THE YEAR 2012.** **EXHIBIT R5(C): TRUE PHOTOCOPY OF NOTICE OF 162ND SREE NARAYANA GURU JAYANTHI CELEBRATION CONDUCTED DURING SEPTEMBER 2016. EXHIBIT R5(D): TRUE PHOTOCOPY OF RECEIPT DATED 01.06.2013 ISSUED TO MR. SIVADAS. EXHIBIT R5(E): TRUE PHOTOCOPY OF REPRESENTATION DATED 10.02.2017 SUBMITTED BY THE RESIDENTS ASSOCIATION TO EXCISE CIRCLE INSPECTOR. EXHIBIT R5(F): TRUE PHOTOCOPY OF REPRESENTATION SUBMITTED TO THE CHIEF MINISTER DATED 02.02.2017. EXHIBIT R5(G): TRUE PHOTOCOPY OF REPRESENTATION SUBMITTED TO THE DISTRICT COLLECTOR DATED 31.01.2017. EXHIBIT R5(H): TRUE PHOTOCOPY OF ORDER DATED 31.01.2017 BY THE DISTRICT COLLECTOR OF DEPUTY COMMISSIONER OF EXCISE.** **WP(C).No. 4439 of 2017 (D)** **----------------------------------------** **EXHIBIT R5(I): TRUE PHOTOCOPY OF REPRESENTATION GIVEN TO THE MUNICIPALITY AGAINST THE UNAUTHORISED CONSTRUCTION DATED 08.03.2017.** **//TRUE COPY//** **P.S.TO JUDGE.** Msd. ## **SHAJI P. CHALY, J.** -------------------------------------------------- ## **W.P.(C) Nos.4439 & 14001 of 2017 ----------------------------------------------Dated this the 28[th] day of July, 2017** ## **JUDGMENT** The aforesaid writ petitions are filed in respect of operation of FL-1 shop No.7054 in Kothamangalam Municipality, as per the provisions of the Foreign Liquor Rules, 1953, and the Kerala Abkari Shops Disposal Rules, 2002. W.P.(C) No.4439 of 2017 is filed by the Kerala State Beverages (Manufacturing & Marketing) Corporation Ltd., the licensee, seeking to quash Ext.P4 communication issued by the Kothamangalam Municipality dated 07.02.2017, whereby the license sought for to run the foreign liquor shop was declined. Whereas, the other writ petition is field by a Residents' Association, objecting to the license provided to the Corporation to run the FL-1 shop in the residential area, in the building bearing Door No.IV/90 and 91, situated within the 3rd respondent Municipality, contending it is situated in a residential area, and within the prohibited distance of a Hindu worship centre owned by the SNDP Karingazha Branch No.209, situated within 100 metres from the building in question. **W.P.(C) Nos.4439 & 14001/17** 2 Facts in common for the disposal of the writ petitions are as follows: 2. Kerala State Beverages (Manufacturing & Marketing) Corporation Ltd., a company owned by the State Government, was granted with the privilege to run FL-9 license for wholesale distribution and FL-1 license for retail sale. The said Corporation has initially established a FL-1 shop No.7054 at Kothamangalam Municipality in the year 2001, and the shop was being carried on by securing requisite licenses from the appropriate statutory authorities. While so, consequent to the directives contained in the judgment of the apex court in ' _**State of Tamil Nadu and others v. K. Balu and another**_ ' [2017 (1) KHC 26 (SC)], the shop had to be shifted, since it violates the distance rule prescribed thereunder. 3. Thereupon, the Corporation has identified the new building specified above and moved the Excise Department for permission to shift the shop to the new building. The Excise Department accorded sanction to shift the shop, evident from Ext.P2 proceedings dated 23.01.2017 of the Deputy Commissioner of Excise, Ernakulam. According to the Corporation, thereupon it commenced its operation after **W.P.(C) Nos.4439 & 14001/17** 3 submitting an application before the Kothamangalam Municipality for securing the Trade License under Sec.447 of the Kerala Municipality Act, 1994, evident from Ext.P3. It is the contention of the Corporation, no permission is required from the Municipality in order to re-establish a licensed shop within the scheduled limit, if the same was originally established before 25.11.2012, in the light of the provisions contained under Sec.447(10) of the Municipality Act, which stipulates that the provisions of sub-sections (7) to (9) shall not be applicable to any Abkari Shop existing on 25.11.2012, i.e. the date of commencement of the Kerala Municipality (Second Amendment) Ordinance, 2012 or subject to all existing legal provisions for re-establishing the toddy shops existing on the said date, in the area within the boundaries allotted for establishing them. Therefore, according to the Corporation, no approval from the Municipality is required. 4. However, Ext.P4 communication dated 07.02.2017 was issued by the Municipality, declining D & O license, consequent to the alleged public protest against the shifting of FL-1 shop to the above mentioned building. According to the Beverages Corporation, merely because a public agitation is **W.P.(C) Nos.4439 & 14001/17** 4 launched against the Corporation, that is not a ground for the Municipality to decline D & O license, if the Corporation is satisfying other parameters as per the Rules in vogue, in order to establish a Foreign Liquor shop. Therefore, it is contended, Ext.P4 cannot stand the test of law being arbitrary, illegal and unfair. 5. Additional respondent No.5 in the writ petition field by the Corporation is the petitioner in the other writ petition captioned above. The contentions raised in the counter affidavit as well as the writ petition filed by the Residents' Association are similar in nature. The formidable contention advanced is that, the proceedings issued to shift the FL-1 shop to the new building specified above is against the distance rule provided under the 2nd proviso to Rule 13(1) of the Foreign Liquor Rules, 1953, since a temple is situated within 100 metres from the proposed shop. According to the petitioner therein, the Excise authorities have not carried out requisite inspection and enquiry so as to identify whether the building in question suffers from any disqualification from establishing a Foreign Liquor shop. That apart, it is contended that, several residential buildings are situated in the close vicinity of the **W.P.(C) Nos.4439 & 14001/17** 5 proposed shop, and if the shop is allowed to function, it will cause irreparable loss and injury to the people residing therein, especially the students going to the schools and colleges. Moreover, it is contended, experience shows that if the shop is opened, long queue will be formed, vehicles will be parked by the customers arriving at the shop, and thereby there would be traffic congestion, and pedestrians also will find it difficult to walk through the area. 6. Moreover, it is submitted that daily _poojas_ are conducted in the Karingazha Sree Narayana Guru Temple, attended by the public at large. According to the petitioner therein, a stop memo is issued by the Municipality, evident from Ext.P4, even though the Beverages Corporation claims that application for license at that point of time was pending consideration. It is also contended that, though representations were filed before the Excise authorities and at the ministerial level, evident from Exts.R5(c) to R5(g), no manner of action was initiated by the responsible authorities in order to eliminate the apprehension of the members of the Residents' Association. It is also submitted that Exts.R5(b) and R5(c) leaflets issued by the Temple authorities would show **W.P.(C) Nos.4439 & 14001/17** 6 that regular _poojas_ are held in the temple in question. Therefore, the petitioner seeks appropriate direction to the respondents not to permit the Corporation to function the FL-1 shop in question in the proposed building of the 3rd respondent Municipality viz., Building No.IV/90 and 91 of Kothamangalam Municipality. 7. Heard learned counsel for the petitioner in the writ petitions and the respective counsel appearing for the respondents. Perused the documents on record and the pleadings put forth by the respective parties. 8. The fact discussion made above makes it clear that the issue, so far as the Beverages Corporation is concerned, is in respect of the attitude of the Municipality in declining license to the Corporation to function its FL-1 shop in the specified building. It has submitted a license application before the Municipality, however, no orders are passed on the same. Ext.P4 is issued apparently on the basis of a decision taken by the Municipal Council on 07.02.2017. Therefore, the formidable contention is that, the license application submitted by the Corporation remained there, which was not considered within 30 days from the date of submission of the same before **W.P.(C) Nos.4439 & 14001/17** 7 the Municipality, and therefore, a deemed license is accrued to the Corporation to function the shop. True, as provided under the Kerala Municipality Act, if the application is not considered and passed orders within the time frame provided under the Act, the applicant is entitled to secure a deemed license. However, the Beverages Corporation has also a case that it does not require a D & O license since the shop was already in existence from the year 2001, and presently they are only required to shift the shop to the building in question. 9. Be that as it may, in my considered opinion, the Municipal Council has decided not to issue license to the Corporation since there is public protest. However, the reason assigned in Ext.P4 cannot be sustained under law, since there is no prohibition created in any of the Rules for the functioning of a shop consequent to any public protest. Therefore, it cannot be said that Ext.P4 issued by the Municipality is in accordance with law, and the attempt of the Municipality evidently was, only to douse the public agitation. 10. When a statutory authority is vested with powers to consider any application submitted for issuance of a license, the authority is duty bound to appreciate the issue by relying **W.P.(C) Nos.4439 & 14001/17** 8 on the relevant provisions of law and then consider the application. In my considered opinion, Ext.P4 order of the Municipality reveals that it has not undertaken such a course of action. At the same time, the Residents' Association has a case that the proposed building is situated within 100 metres of a temple conducted by S.N.D.P Branch No.209, Karingazha, and therefore, it is hit by the 2nd proviso to Rule 13(1) of the Foreign Liquor Rules, 1953, since a minimum distance of 200 metres from any such institution is to be maintained. However, with respect to the said contention, the Beverages Corporation has a case that it is not a Temple at all, since no deity is installed in the temple, and therefore, there is no prohibition created under the Foreign Liquor Rules. 11. Learned counsel for the Corporation has invited my attention to Note (1)(b) of Rule 13 of the Foreign Liquor Rules, wherein “Temple” is defined to mean; a place of public, religious worship by Hindus where the deity is installed under a building and includes a mutt also. However, the Residents' Association has a case that there is a deity in the Temple and regular _poojas_ are being held by the public. Two leaflets are produced by the Residents' Association to establish that **W.P.(C) Nos.4439 & 14001/17** 9 regular _poojas_ are being performed in the Temple and public attends the worship. The said contention would make it clear that there is a dispute existing with respect to a factual aspect regarding the existence of a deity in the Temple in question. 12. Therefore, I think it is only appropriate that the statutory authority viz., the Deputy Commissioner of Excise, Ernakulam, who is the 4th respondent in the writ petition filed by the Residents' Association, is directed to take a decision in the said issue. Accordingly, there will be a direction to the Deputy Commissioner of Excise, Ernakulam to ascertain whether a deity is installed in the Temple specified above, so as to create a prohibition as provided under the 2nd proviso to Rule 13(1) of the Foreign Liquor Rules. Such an inspection shall be carried out in accordance with law, within two weeks from the date of receipt of a copy of this judgment, and the parties will be guided by the decision taken accordingly. 13. Since the reasons assigned in Ext.P4 issued by the Secretary of the Municipality dated 07.02.2017 are not in accordance with law, the same suffers from the vice of arbitrariness and illegality, especially for the reason that, none of the provisions of the law in vogue was taken into **W.P.(C) Nos.4439 & 14001/17** 10 consideration by the 3rd and 4th respondents. 14. Therefore, I quash the same and direct the Municipality to re-consider the issue by taking into account Ext.P3 license application submitted by the Corporation and attain finality to the same within 30 days from the date of receipt of a copy of this judgment. 15. Even though the shop was not opened at the time when the writ petition was filed by the Residents' Association, it is informed that, on 21.07.2017, the shop was opened, which, according to the Residents' Association, is in violation of the submission made before this Court and recorded on 26.05.2017 that the FL-1 shop is not functioning in the premises in question. But, I make it clear that, if a temple of the nature as provided under the Foreign Liquor Rules is situated, as is contended by the Residents' Association in its writ petition and counter affidavit filed in the other writ petition, appropriate action shall be initiated by the Excise authorities. So also, it cannot be said that the foreign liquor shop can be functioned by the Beverages Corporation without securing D & O license from the Municipality, especially in view of the proposition of law laid down by two Division Benches of **W.P.(C) Nos.4439 & 14001/17** 11 this Court in ' _**Bosco Antony v. State of Kerala and Others**_ ' [2007 (4) KHC 116] and in ' _**Sivadasan A. v. Mattannur Muncipality and Others'**_ [2008 (4) KHC 522]. Viewed in that circumstances, the functioning of the shop will be guided by the directives contained above. The writ petitions are disposed of with the above specified directions. Sd/- **SHAJI P. CHALY JUDGE** St/27.07.2017