SURENDRA DAS B Vs. STATE OF KERALA

JUDGEMENT

(1.) The appellants in the Writ Appeals and the petitioners in the Writ Petitions are all star hotels with categorization above "Three star" given by the Ministry of Tourism, Government of India. All star hotels above three star classification were entitled to get bar licence for retail sale of liquor in the hotels under Rule 13(3) of the Foreign Liquor Rules (hereinafter referred to as "the Rules" for short) prescribed under the Kerala Abkari Act (hereinafter referred to as "the Act" for short). However, an amendment was introduced in the year 2011 by SRO No. 779/2011 dated 09/12/2011 [GO (P) No. 192/2011/TD] deleting "three star" from the category of hotels entitled for bar licence under the above Rules. Later through another amendment by SRO No. 202/2012 dated 27-03-2012 [GO (P) No. 48/2012/TD] another prohibition was introduced by inserting sub-rule (3E) to Rule 13 whereunder even four star and above category hotels constructed within a radius of 3 Kms. in Grama Panchayats and 1 Km. in Municipal/Corporation limits, from another hotel/Restaurant with FL-3 licence, were declared disentitled for the grant of new FL-3 licence. The appellants/petitioners contend that they have in the course of last 1-2 years constructed star hotels spending more than Rs. 10 crores for each Hotel, mostly with borrowed funds obtained from public sector financial institutions like Kerala Financial Corporation, Kerala State Industrial Development Corporation and from Nationalized Banks, and all these three star and above category hotels cannot be run viably without Bar licence. The Hotels of all appellants/petitioners are all having classification of "Three Star" and above. The petitioners in W.P. (C). Nos. 8878 of 2012, 9518 of 2012, 8152 of 2012 and 8840 of 2012 have "Four Star" classification and the petitioners in W.P. (C). Nos. 11555 of 2012 and 14225 of 2012 respectively have "Five Star" or "Heritage" classification. While the 4-Star and above and Heritage classified hotels are challenging the prohibition through distance Rule introduced by sub-rule (3E) to Rule 13, the 3-Star hotels are challenging the general prohibition introduced against grant of FL-3 licence to such Hotels which is done by deleting "3-Star" from Sub Rule (3) of Rule 13 of the Rules. All the appellants/petitioners are challenging the above amendments as arbitrary, discriminatory and violative of Article 14 of the Constitution and against the very objective of Rule 13(3) which is tourism promotion in the State. Besides this they are also challenging the 4th, 6th and 7th proviso under which existing FL-3 licensees are entitled to regularisation and renewal of Bar licence every year, though most of these licensees are only Restaurants and Hotels which do not even have Star classification which according to the appellants/petitioners is plain discrimination violative of Article 14 of the Constitution.

(2.) We have heard Senior counsel Shri. C.C. Thomas, Shri. K. Ramakumar, Shri. P. Ravindran and Shri. S. Sreekumar, and Advocates Shri. George Poonthottam and Shri. K.B. Pradeep, appearing for the appellants/petitioners, Shri. P.C. Iype, learned Additional Advocate General and Shri. George Mecheril, learned Senior Government Pleader appearing for the State and the official respondents; and also Senior counsel Shri. K. Gopalakrishna Kurup, and Advocates Shri. Sudhi Vasudevan, Shri. N. Reghuraj, Shri. Babu Karukappadath and Smt. Preetha C.G., appearing for the additional respondents impleaded in the cases.

(3.) At the outset the learned Additional Advocate General brought to our notice the decision of the Supreme Court in Kuldeep Singh v. Govt. of NCT of Delhi, 2006 5 SCC 702 wherein the Supreme Court held that the right to carry on business in liquor is not a fundamental right and that the policy decisions of the Government in abkari matters, introduced through amendments should not be easily interfered with unless the amendment is motivated by mala fides, arbitrariness and discrimination. Another principle settled though the above decision of the Supreme Court brought to our notice is that investments made by parties in hotels should not weigh with the Court to direct grant of bar licence in violation of Government Policy. To further fortify the stand, the learned Additional Advocate General took us through the decision in Ugar Sugar Works Ltd. v. Delhi Administration, 2001 3 SCC 635, which held that mere business interests of a party cannot justify interference in the policy matters if the same is not touched by mala fides and is not unfair, unreasonable or arbitrary. Reliance was also placed on the decision in State of M.P. v. Narmada Bachao Andolan, 2011 7 SCC 639, by which the Hon'ble Supreme Court held that the High Court cannot strike down a policy decision merely because another decision would have been fairer, more logical or wiser.