High Court of KeralaSingle JudgeWrit petition allowed conducted by the Single J...

Nila Residency v. State of Kerala

Case / Petition Number:WP(C).No. 34096 of 2014 (J)

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • K. Surendra Mohan
Judgment Date
2014-12-17
Court Decision / Holding
Writ petition allowed. Excise Commissioner and State of Kerala directed to accept the FL-3 licence application submitted by the petitioner, provided the Four Star classification subsists and all other eligibility conditions are satisfied, and to pass appropriate orders in accordance with law, within two months from the date of judgment.
Final Disposition
Writ petition allowed conducted by the Single Judge

Parties to the Case

Appellants / Petitioners

  • Nila Residency

Respondents

  • State of Kerala represented by Secretary, Taxes (A) Department, Govt. Secretariat, Thiruvananthapuram 695 001
  • The Excise Commissioner, Commissionerate of Excise, Thiruvananthapuram 695 001
  • The Deputy Commissioner of Excise, Palakkad 678 001
  • The Circle Inspector of Excise, Ottapalam, Palakkad District 678 001

Legal Representation & Advocates

Counsels for Petitioners

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

Counsels for Respondents

  • • Spl. Government Pleader Shri.Tom K.Thomas

Case Synopsis & Summary

Nila Residency, a hotel operator classified as four-star by the Ministry of Tourism, challenged the Abkari Policy 2014-2015 which barred four-star/heritage hotels from eligibility for FL-3 licences under the Foreign Liquor Rules. The petitioner’s application for an FL-3 licence was rejected on the ground of ineligibility under the policy. The petitioner argued that a four-star classification is a material indicator of suitability for serving foreign liquor and that excluding such hotels is arbitrary and violates Article 14 of the Constitution. Reliance was placed on Xavier’s Residency v. State of Kerala (2014 (4) KLT 419), where the High Court struck down the exclusion of four-star hotels from FL-3 eligibility as arbitrary and unconstitutional, setting aside related amendments and licence cancellations. The respondents defended the policy as a legitimate exercise of state power to regulate licensing. The Kerala High Court, applying the Xavier’s Residency dictum, held that excluding four-star hotels from eligibility is arbitrary and that four-star hotels are eligible for FL-3 licences if they meet all other conditions. The court directed the Excise Commissioner and the State to accept the petitioner’s FL-3 application, provided the four-star classification subsists and all other eligibility criteria are satisfied, and to pass orders within two months. The writ petition was allowed, clarifying the statutory interpretation of the 2014-2015 Abkari policy.

Provisions of Law Cited

Abkari Act, 1077Foreign Liquor RulesAbkari Policy 2014-2015GO(P) No. 141/2014/TDConstitution of India, Article 14

Legal Doctrines & Maxims

  • Art.14 of the Constitution (Equality before law)
  • Arbitrariness doctrine
  • Xaviers Residency v. State of Kerala (2014 (4) KLT 419)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that having a four-star classification should render an FL-3 licence eligible under the Abkari Act and Foreign Liquor Rules, and that excluding four-star hotels under Abkari Policy 2014-2015 is arbitrary and violates Article 14. Reliance is placed on Xavier's Residency v. State of Kerala to challenge the policy and seek acceptance of the application.

Contentions of Respondents

The respondents defend the policy as a valid exercise of the state's licensing power, arguing the Abkari Policy 2014-2015 excludes Four Star and Heritage hotels from FL-3 eligibility and that the state, through GO and policy, may determine eligibility criteria; the policy’s exclusions are to be upheld unless struck down by higher authority.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
Xaviers Residency v. State of Kerala2014 (4) KLT 419PositiveThe judgment relied on the Xavier's Residency precedent to hold that excluding Four Star hotels from FL-3 eligibility is arbitrary and violates Art.14, and applied this rationale to grant relief.

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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 K.SURENDRA MOHAN WEDNESDAY, THE 17TH DAY OF DECEMBER 2014/26TH AGRAHAYANA, 1936 WP(C).No. 34096 of 2014 (J) ---------------------------- PETITIONER: ------------ NILA RESIDENCY AGED 50 YEARS SMP JUNCTION SHORNUR, PALAKKAD DISTRICT REPRESENTED BY ITS MANAGING PARTNER, BASIL PAUL S/O.PAULOSE BY ADVS.SRI.M.G.KARTHIKEYAN SRI.C.C.THOMAS (SR.) RESPONDENTS: --------------------- 1. STATE OF KERALA REPRESENTED BY SECRETARY, TAXES (A) DEPARTMENT GOVT.SECRETARIAT, THIRUVANANTHAPURAM 695 001. 2. THE EXCISE COMMISSIONER COMMISSIONERATE OF EXCISE THIRUVANANTHAPURAM 6954 001. 3. THE DEPUTY COMMISSIONER OF EXCISE, PALAKKAD 678 001. 4. THE CIRCLE INSPECTOR OF EXCISE OTTAPALAM, PALAKKAD DISTRICT 678 001 R BY SPL. GOVERNMENT PLEADER SHRI.TOM K.THOMAS THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 34096 of 2014 (J) ---------------------------- ## APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT P1 COPY OF THE FOUR STAR CLASSIFICATION CERTIFICATE DATED 7//2/2013 ISSUED BY THE GOVT.OF INDIA, MINISTRY OF TOURISM,NEW DELHI EXHIBIT P2 COPY OF THE APPLICATION DATED 8/2/2013 SUBMITTED BEFORE THE 2ND RESPONDENT THROUGH PROPER CHANNEL EXHIBIT P3 COPY OF THE ORDER DATED 11//3/2013 ISSUED BY THE 3RD RESPONDENT TO THE 4TH RESPONDENT EXHIBIT P4 COPY OF THE RULE , GO(P) NO. 141/2014/TD DATED 27/8/2014 ISSUED BY THE GOVT.OF KERALA EXHIBIT P5 COPY OF THE APPLICATION DATED 20/3/2014 SENT TO THE 2ND RESPONDENT RESPONDENT(S)' EXHIBITS NIL ------------------------ JJ /TRUE COPY/ P.S.TO JUDGE ## K. SURENDRA MOHAN,J. ------------------------------W.P(C) NO. 34096 OF 2014 ---------------------------------Dated this the 17[th] December, 2014. ## JUDGMENT The petitioner firm is conducting a hotel with Four Star classification issued by the Ministry of Tourism, Government of India. He has not been granted licence to conduct a Bar for the reason that, Four Star hotels are not eligible to apply for the grant of Bar licences as per the Abkari Policy, 2014-2015 of the State. Though the petitioner submitted an application for the grant of a Bar licence (FL-3 licence), his application was rejected. 2. As already noticed above, the petitioner has a hotel classified as four star by the Ministry of Tourism, Government of India. He has obtained all the other necessary certificates from the concerned authorities and has acquired eligibility for WPC 34096/2014 2 the grant of an FL-3 licence. It is the contention that, he satisfies all the necessary conditions and parameters stipulated by the Abkari Act,1077 as well as the Foreign Liquor Rules, for the purpose of being granted the privilege of conducting a Bar in her hotel. His application has not been granted for the sole reason that, he is ineligible to apply for such licence by the Abkari Policy, 2014-2015. The counsel places reliance on the decision in Xaviers Residency v. State of Kerala [2014(4) KLT 419] where a batch of writ petitions challenging the Abkari Policy 2014-2015 were disposed of with the following directions:- “In the result, it is ordered as follows:- 1. The challenge against the Abkari Policy 2014-2015, by the hotels classified as two star, three star and by hotels having no classification fails. The writ petitions filed by them are therefore dismissed. 2) The Abkari Policy 2014-2015, to the extent, it excludes hotels having Four Star and Heritage category hotels from the eligibility to be WPC 34096/2014 3 granted FL-3 licences under the Foreign Liquor Rules is set aside, being arbitrary and violative of Art.14 of the Constitution. The consequential amendments to the Foreign Liquor Rules as well as the proceedings of the Excise Commissioner cancelling the licences of such hotels are also set aside. The writ petitions filed by them are allowed as above. 3) The Abkari Policy 2014-2015 is sustained in all other respects, except to the extent indicated above.” Appeals have been filed against the said judgment by the State as well as petitioners in the said writ petitions. All the appeals are pending consideration of the Division Bench. It is submitted by the learned Counsel Sri.M.G.Karthikeyan, who appears for the petitioner that though the appeal of the State has been admitted, the prayer for stay of operation of the judgment has been declined by the Division Bench, after hearing. Therefore, according to the counsel appearing for the petitioner in this case, the petitioner is entitled to the benefit of the dictum in the judgment referred to above. In WPC 34096/2014 4 view of the above, she seeks the issue of a direction to the State as well as the Excise Commissioner to accept his application and to consider it in accordance with law, within a stipulated time. 3. I have heard the counsel appearing for the petitioner as well as the learned Govt. Pleader who represents the State. 4. In view of the dictum laid down by the judgment in Xaviers Residency v. State of Kerala (supra) that exclusion of Four Star hotels from the category of hotels eligible to seek the issue of FL-3 licences by the Abkari Policy 2014-2015 is bad, the petitioner is justified in his contentions. The petitioner is certainly entitled to seek the benefit of the dictum laid down by this Court, the operative portion of which I have already extracted above. In the light of the finding that hotels with Four Star classification are also eligible to be granted FL3 licences, it is only appropriate that the application submitted by the petitioner herein is accepted by the Excise Authorities and considered in accordance with law. WPC 34096/2014 5 In view of the above, this writ petition is allowed. The Excise Commissioner as well as the State of Kerala are directed to accept the application for FL-3 licence submitted by the petitioner provided, he has a subsisting four star classification, subject to his satisfying all other prescribed conditions of eligibility. The application shall be considered and appropriate orders shall be passed thereon in accordance with law, as expeditiously as possible and at any rate, within a period of two months from today. Sd/K. SURENDRA MOHAN Judge jj /True copy/ WPC 34096/2014 6