High Court of KeralaSingle Judge2022-08-03Writ petitions dismissed

Writ Petition (Civil) Nos. 18920/2020, 20536/2020, 20563/2020 and 20567/2020

Case / Petition Number:WP(C) Nos. 18920/2020; 20536/2020; 20563/2020; 20567/2020

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Amit Rawal
Judgment Date: 2022-08-03
Court Decision / Holding: Writ Petitions are accordingly dismissed. The court held that while the Supreme Court’s Chitra v. State of Kerala provides a basis for remission in exceptional circumstances, the present petitions fail due to lack of availing government relaxations during the first lockdown and due to moratoriums already granted, and the court refused to compel the government to charge proportionate licence fees or write off fees.
Final Disposition: Writ petitions dismissed

Parties to the Case

Appellants / Petitioners

M/s. MPG Hotels and Infrastructure Ventures Pvt. Ltd. (Hilton Grade Inn)
M/s Avenue Hotels & Resorts
M/s Muthoot Hotels (P) Ltd (Taj Green Resort)
M/S MPG Hotels and Infrastructure Ventures Pvt Ltd (Hotel Novotel Kochi Info-Park)

Respondents

State of Kerala rep. by Secretary, Taxes (A) Department, Govt. Secretariat, Thiruvananthapuram – 695033
The Excise Commissioner, Commissionerate of Excise, Excis e Head Quarters, Nandavanam, Thiruvananthapuram – 695033
The Deputy Commissioner of Excise, Thiruvananthapuram – 695023
The Circle Inspector of Excise, Ernakulam – 682018 (only for some petitions)

Legal Representation & Advocates

Counsels for Petitioners

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

Counsels for Respondents

• Sri. Jimmy George, Government Pleader

Case Synopsis & Summary

This judgment consolidates four Writ Petitions challenging the renewal of FL-3 foreign liquor licences (bar-hotel licences) in the wake of the Covid-19 lockdown. Petitioners, three hotel/restaurant entities and their related groups, sought renewal of their FL-3 licences for 2020-21 on a proportionate licence fee basis from the date of permission to permit liquor sale until 31 March 2021, arguing that pandemic-induced closures prevented normal business and that the government’s amendments to the Foreign Liquor Rules and subsequent moratorium directions should allow remission or proportionate charging. The petitions rely on the Supreme Court’s decision in Chitra v. State of Kerala to press for recalculation of licence fees in light of force majeure-like disruptions and contended that Rule 14 and the amendments to Rule 3 permit proportionate charges for periods when business could not be conducted. The Government Countered that moratoriums already granted (59 days from 24.3.2020–21.5.2020 and 52 days from 24.4.2021–14.6.2021) and earlier relaxations did not require the state to write off or proportionately reduce the fees for all licences; the petitions were dismissed, with the court emphasizing caution against inviting interference in policy decisions and distinguishing the Chitra ruling on fact pattern.

Provisions of Law Cited

Foreign Liquor Rules, 1953 - Rule 13(3) (Proviso)Foreign Liquor Rules, 1953 - Rule 14Rule 3 (amendment to extend period from six months to ten months)Constitution of India - Article 14

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contended they are entitled to renewal of the FL-3 licence for 2020-21 on payment of proportionate licence fee from the date of permission to conduct the bar licence/FL-3 licences up to 31.3.2021. They argued that lockdown restrictions prevented sales, and that the amendments to Rule 3 extended the six-month renewal window to ten months, with Rule 14 permitting remission where the licenceholder could not transact. They relied on Chitra v. State of Kerala (SC) to support remission of a portion of licence fees. They asserted the moratorium orders (59 days and 52 days) should be taken into account, and that the government’s refusal to remit or proportionately adjust the fees would be unjust and violate Article 14.

Contentions of Respondents

The respondents argued that the petitions survive no longer after the moratoriums dated 25.2.2021 (59 days) and 1.4.2022 (52 days) were issued granting 111 days in total. They contended the petitioners did not avail the 14 May 2020 liberalization to sell liquor through a counter and hence cannot approbate and reprobate. They further argued that the ratio in Chitra is distinguishable on the facts since the present case involved lockdown during which the remedy of proportional charging was already subject to moratorium and that the court should refrain from directing the government how to fix licence fees."},

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Chitra v. State of Kerala	2015 (3) KLT 956 (SC)	Distinguished	The Kerala High Court acknowledged Chitra’s principle of recalculating licence fees for periods when business was precluded but held the present case distinguishable due to the execution of specific moratoriums and the petitioners’ failure to avail government relaxations, thus not applying Chitra to compel remission.

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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 AMIT RAWAL** **WEDNESDAY, THE 3[RD] DAY OF AUGUST 2022 / 12TH SRAVANA, 1944** ## **WP(C) NO. 20563 OF 2020** ## **PETITIONER:** M/s.MPG HOTELS AND INFRASTRUCTURE VENTURES PVT. LTD. (HILTON GRADE INN) PUNNEN ROAD, THIRUVANANTHAPURAM - 695 034, REPRESENTED BY ITS MANAGING DIRECTOR, THOMAS JOHN MUTHOOT, AGED 57 YEARS, S/O. MATHEW MUTHOOT THOMAS. BY ADVS. M.G.KARTHIKEYAN SRI.NIREESH MATHEW SRI.C.C.THOMAS (SR.) ## **RESPONDENTS:** 1 STATE OF KERALA REP. BY SECRETARY, TAXES (A) DEPARTMENT, GOVT. SECRETARIAT, THIRUVANANTHAPURAM - 695 033. 2 THE EXCISE COMMISSIONER COMMISSIONERATE OF EXCISE, EXCISE HEAD QUARTERS, NANDAVANAM, THIRUVANANTHAPURAM - 695 033. 3 THE DEPUTY COMMISSIONER OF EXCISE THIRUVANANTHAPURAM - 695 023. By ADV.SRI.JIMMY GEORGE, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.08.2022, ALONG WITH WP(C).20567/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.20563/2020 & conn. 2 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **WEDNESDAY, THE 3[RD] DAY OF AUGUST 2022 / 12TH SRAVANA, 1944 WP(C) NO. 18920 OF 2020** ## **PETITIONER:** M/S.AVENUE HOTELS & RESORTS M.G.ROAD, KOCHI-682016, REPRESENTED BY ITS PARTNER, SRI.ISSAC ALEXANDER, AGED 39 YEARS, S/O. O.T.ALEXANDER. BY ADVS. M.G.KARTHIKEYAN SRI.NIREESH MATHEW ## **RESPONDENTS:** 1 STATE OF KERALA REP. BY SECRETARY, TAXES (A) DEPARTMENT, GOVT. SECRETARIAT, THIRUVANANTHAPURAM-695033. 2 THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, EXCISE HEAD QUARTERS, NANDAVANAM, THIRUVANANTHAPURAM-695033. 3 THE DEPUTY COMMISSIONER OF EXCISE, KACHERIPADY, ERNAKULAM, PIN-682018. 4 THE CIRCLE INSPECTOR OF EXCISE, ERNAKULAM, PIN-682018. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.08.2022, ALONG WITH WP(C).20563/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.20563/2020 & conn. 3 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **WEDNESDAY, THE 3[RD] DAY OF AUGUST 2022 / 12TH SRAVANA, 1944 WP(C) NO. 20536 OF 2020** ## **PETITIONER:** M/S.MUTHOOT HOTELS (P) LTD (TAJ GREEN RESORT),KOVALAM, THIRUVANANTHAPURAM-695527, REPRESENTED BY ITS MANAGING DIRECTOR, THOMAS JOHN MUTHOOT, AGED 57 YEARS, S/O MATHEW MUTHOOT THOMAS BY ADVS. M.G.KARTHIKEYAN SRI.NIREESH MATHEW ## **RESPONDENTS:** 1 STATE OF KERALA REPRESENTED BY SECRETARY, TAXES (A) DEPARTMENT, GOVT. SECRETARIAT, THIRUVANANTHAPURAM-695033. 2 TEH EXCISE COMMISSIONER COMMISSIONERATE OF EXCISE, EXCISE HEAD QUARTERS, NANDAVANAM, THIRUVANANTHAPURAM-695033. 3 THE DEPUTY COMMISSIONER OF EXCISE THIRUVANANTHAPURAM-695023. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.08.2022, ALONG WITH WP(C).20563/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.20563/2020 & conn. 4 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **WEDNESDAY, THE 3[RD] DAY OF AUGUST 2022 / 12TH SRAVANA, 1944 WP(C) NO. 20567 OF 2020** ## **PETITIONER:** M/S.MPG HOTELS AND INFRASTRUCTURE VENTURES PVT LTD (HOTEL NOVOTEL KOCHI INFO-PARK), PUNNEN ROAD,THIRUVANANTHAPURAM-695034, REPRESENTED BY ITS MANAGING DIRECTOR, THOMAS JOHN MUTHOOT, AGED 57 YEARS,S/O.MATHEW MUTHOOT THOMAS. BY ADVS. M.G.KARTHIKEYAN SRI.NIREESH MATHEW SRI.C.C.THOMAS (SR.) ## **RESPONDENTS:** 1 STATE OF KERALA REP.BY SECRETARY,TAXES(A)DEPARTMENT, GOVT.SECRETARIAT,THIRUVANANTHAPURAM-695033. 2 THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, EXCISE HEAD QUARTERS,NANDAVANAM, THIRUVANANTHAPURAM-695033. 3 THE DEPUTY COMMISSIONER OF EXCISE, ERNAKULAM-692018. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.08.2022, ALONG WITH WP(C).20563/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.20563/2020 & conn. 5 ## **JUDGMENT** This order of mine shall dispose of a bunch of four Writ Petitions bearing Nos.18920/2020, 20536/2020, 20563/2020 and 20567/2020, wherein the following identical reliefs have been sought : “(i) declare that the petitioner company is entitled to get the renewal of the FL-3 licence, Ext.P2, for the year 2020-21 as per Ext.P4 application on payment of proportionate licence fee from the date of permission to conduct the bar licence/FL-3 licence till 31.3.2021 ; (ii) declare that the 5[th] proviso to Rule 13(3) of the Foreign Liquor Rules “provided also that the licences of any bar hotel that remain defunct for more than 6 months either during the period of validity of the licence or after its expiry, shall not be renewed” has no application in the light of the admitted fact that Ext.P2 licence is closed from 25.3.2020 due to lockdown declared by the Union of India and not yet open ; (iii) declare that Rule 14 of the Foreign Liquor Rules to the extent it enables the respondents to collect the entire licence fee even in respect of licenses issued/renewed belatedly of the financial year only due to the fault of the respondents is unreasonable, unjust against equity, good conscience, arbitrary and violative of Article 14 of the Constitution of India ; WP(C) No.20563/2020 & conn. 6 (iv) issue a writ of mandamus or other appropriate writ, order or direction commanding respondents 1 to 3 to renew Ext.P2 FL-3 license as per Ext.P4 application on payment of proportionate rental from the date of permission to conduct the bar licence/FL-3 licence, Ext.P2 till 31.3.2021 and (v) grant such other and further relief as this Hon'ble Court may deem fit and proper in the interest of justice.” 2. All the petitioners are holders of FL3 foreign liquor licence having bar hotel cum restaurants. Proviso to Rule 13(3) of the erstwhile Foreign Liquor Rules provide that in case a licence holder does not seek the renewal of the licence for a period of six months the licence shall be deemed to have been cancelled whereas in the amended rules, it is ten months. The case of the petitioners in all the aforementioned cases revolve around for issuance of directions to the respondents to charge proportionate licence fee owing to the covid pandemic and lockdown. The lockdown of the country was effected from 24.3.2020 and was open in the month of May 2020. The grievance of the petitioners are that for the period after the opening of the lockdown, the bars were closed and they could not sell the liquor along with food in the restaurants. The WP(C) No.20563/2020 & conn. 7 Government vide order dated 14.5.2020 though given liberty to the petitioners to set up a counter inside the premises i.e., without opening the restaurants, to sell the liquor that is in stock which they were holding as per the licence already issued, some of the petitioners did not opt for that. However, on 21.12.2020, the aforementioned restriction was also lifted and all the bars with different licence holders were permitted to run their business. The Government considering the fact that the licence holders were prevented to sell the liquor and the financial position had been seriously affected, came out with the following two orders ; (i) order dated 25.2.2021 whereby a moratorium of 59 days from 24.3.2020 to 21.5.2020, the actual period of closure by the Government restriction in Covid 19 pandemic and (ii) subsequently order dated 1.4.2022 giving the benefit for 52 days from 24.4.2021 to 14.6.2021 against all FL3, FL11 and FL4 A licencees, for total 111 days. 3. In the interregnum, the Government had also passed an amendment in Rule 3 by inserting Rule 3 in the foreign liquor licence by extending the period of six months to ten months. Though all the petitioners have obtained the renewal of the WP(C) No.20563/2020 & conn. 8 licence by depositing the actual licence fee, but through the instant petitions are seeking the interference of this Court for issuance of directions to the respondents to charge proportionate licence fee or adjustment in future licence fee. 4. In support of the contention Mr.M.G.Karthikeyan, learned counsel representing the petitioners relied upon the judgment of the Supreme Court in **Chitra v. State of Kerala** _[2015 (3) KLT 956 (SC)]_ whereby by referring to the provisions of Rule 14 of the Foreign Liquor Rules, 1953, a direction was issued to the Excise Department for remission in the payment of the licence fee on the ground and premise in case the party is precluded from transacting business on the strength of the licence because of the factors and reasons beyond his control, the respondents were directed to recalculate the proportionate amount of licence fee due and payable for the period from 25.3.2003 to 31.3.2003. In other words, the controversy is pertaining to the year 2003. 5. On the other hand, Sri.Jimmy George, the learned Government Pleader opposed the aforementioned prayer and submitted that the Writ Petitions no longer survive as there is no WP(C) No.20563/2020 & conn. 9 challenge to the order dated 25.2.2021 and 1.4.2022 giving the moratorium for a period of 59 days and 52 days, in all 111 days, and in the absence of that, cannot be permitted to seek reliefs as sought for. The Government in wisdom by considering all the orders passed from time to time, noticed that the moratorium had to be given for those licence holders who were actually prevented to dispense liquor at the dedicated cases. By virtue of the order dated 14.5.2020, permission was granted, but the petitioner did not avail and therefore, they cannot be permitted to approbate and reprobate for claiming the said concession of remission. 6. I have heard the counsel for the parties and appraised the paper books and of the view that there is no force or merit. 7. It is settled law that the High Court should be cautious in dealing with the prayers as sought for as it cannot sit in the arm chair of the decision making authority by directing the Government to charge the licence fee as sought for. There is no dispute with the ratio decidendi culled out by the Supreme Court considering Rule 14, but that was owing to certain attenuating and exceptional circumstances whereby the licence holder was WP(C) No.20563/2020 & conn. 10 prevented not to dispense liquor for the period referred to above. In the instant case, the lockdown was with effect from 24.3.2020 and vide order dated 14.5.2020, FL3 licence holders were permitted to vend foreign liquor to eligible persons, the quantity not exceeding the prescribed limit by opening separate counters in the licenced premises for removal outside the hotel, in such manner, number and for such periods specified by the Government from time to time, on such emergency situations when the premises could not be opened for serving liquor. The petitioners did not avail the aforementioned opportunity and remained as a mute spectator, but when the period for six months was about to expire for renewal submitted an application. According to the submission of Mr.Karthikeyan, learned counsel for the petitioners, were impelled to pay the entire licence fee without any remission for the period they could not dispense liquor. 8. It is a conceded position on record, vide order dated 25.2.2021 moratorium with effect from 24.3.2020 to 21.5.2020, for a period of 59 days, was granted to licence holders. Subsequently vide order dated 1.4.2022 moratorium with effect WP(C) No.20563/2020 & conn. 11 from 24.4.2021 to 14.6.2021 during the second lock down for a period of 52 days, total 111 days, was granted to all licence holders (FL3, FL11 and FL4 A). There is no challenge to the aforementioned orders. In the facts and circumstances of the case, the petitioners were not precluded to dispense the liquor as per the ratio decidendi culled out in the judgment in _**Chitra v. State of Kerala**_ (supra). Writ Petitions are accordingly dismissed. **Sd/AMIT RAWAL JUDGE** csl WP(C) No.20563/2020 & conn. 12 ## **APPENDIX OF WP(C) 18920/2020** PETITIONER'S EXHIBITS EXHIBIT P1 PHOTOCOPY OF THE FL-3 LICENSE RENEWAL CERTIFICATE DATED 30.3.2019. EXHIBIT P2 PHOTOCOPY OF THE APPLICATION ACKNOWLEDGMENT DATED 23.3.2020. EXHIBIT P3 PHOTOCOPY OF THE SRO NO.325/2020 DATED 14.5.2020 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P4 PHOTOCOPY OF THE APPLICATION DATED 9.9.2020 SUBMITTED TO THE RESPONDENTS. EXHIBIT P5 PHOTOCOPY OF THE CITATION, CHITRA VS. STATE OF KERALA REPORTED IN 2015(3) KLT 969 (SC). EXHIBIT P6 PHOTOCOPY OF THE JUDGMENT DATED 4.11.2015 IN WP(C) NO.7626/2013 PASSED BY THIS HON'BLE COURT. WP(C) No.20563/2020 & conn. 13 ## **APPENDIX OF WP(C) 20536/2020** PETITIONER'S EXHIBITS EXHIBIT P1 PHOTOCOPY OF THE CLASSIFICATION CERTIFICATE DATED 04.12.2018 ISSUED BY THE ASST. DIRECTOR GENERAL (H & R), GOVT OF INDIA, MINISTRY OF TOURISM, NEW DELHI. - EXHIBIT P2 PHOTOCOPY OF THE FL-3 LICENSE OF THE PETITIONER COMPANY. EXHIBIT P3 PHOTOCOPY OF FL-3 LICENSE RENEWAL CERTIFICATE DATED 28.03.2019. - EXHIBIT P4 PHOTOCOPY OF THE APPLICATION ACKNOWLEDGMENT DATED 28.04.2020. - EXHIBIT P5 PHOTOCOPY OF THE SRO.NO.325/2020 DATED 14.05.2020 ISSUED BY THE 1ST RESPONDENT. - EXHIBIT P6 PHOTOCOPY OF THE CITATION, CHITRA Vs. STATE OF KERALA REPORTED IN 2015 (3) KLT 956 (SC). WP(C) No.20563/2020 & conn. 14 ## **APPENDIX OF WP(C) 20567/2020** PETITIONER'S EXHIBITS EXHIBIT P1 PHOTOCOPY OF THE CLASSIFICATION CERTIFICATE DATED 29.05.2018 ISSUED BY THE ASST.DIRECTOR GENERAL AND MEMBER SECRETARY(H&R),GOVT.OF INDIA,MINISTRY OF TOURISM,NEW DELHI. EXHIBIT P2 PHOTOCOPY OF THE FL-3 LICENSE OF THE PETITIONER COMPANY. EXHIBIT P3 PHOTCOPY OF THE FL-3 LICENSE RENEWAL CERTIFICATE DATED 30.03.2019. EXHIBIT P4 PHOTOCOPY OF THE APPLICATON ACKNOWLEDGMENT DATED 26.03.2020 EXHIBIT P5 PHOTOCOPY OF THE SRO.NO.325/2020 DATED 14.05.2020 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P6 PHOTOCOPY OF THE CITATION,CHITRA VS.STATE OF KERALA REPORTED IN 2015(3) KLT 956(SC). WP(C) No.20563/2020 & conn. 15 ## **APPENDIX OF WP(C) 20563/2020** PETITIONER'S EXHIBITS EXHIBIT P1 PHOTOCOPY OF THE CLASSIFICATION CERTIFICATE DATED 05.11.2015 ISSUED BY THE ASST. DIRECTOR GENERAL (H&R), GOVT. OF INDIA, MINISTRY OF TOURISM, NEW DELHI. EXHIBIT P2 PHOTOCOPY OF THE FL-3 LICENSE OF THE PETITIONER COMPANY. - EXHIBIT P3 PHOTOCOPY OF THE FL-3 LICENSE RENEWAL CERTIFICATE DATED 30.03.2019. - EXHIBIT P4 PHOTOCOPY OF THE APPLICATION ACKNOWLEDGMENT DATED 28.04.2020. - EXHIBIT P5 - PHOTOCOPY OF THE SRO NO.325/2020 DATED 14.05.2020 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P6 PHOTOCOPY OF THE CITATION, CHITRA VS. STATE OF KERALA REPORTED IN 2015(3) KLT 956 (SC).