IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY TUESDAY, THE 25TH JANUARY 2011 / 5TH MAGHA 1932 WA.No. 1312 of 2010() --------------------- AGAINST THE JUDGEMENT IN WPC.21143/2009 .................... APPELLANT/PETITIONER: ------------------------------------ KALARIKKAL HOTELS PRIVATE LIMITED, REGISTERED OFFICE, SKYLINE PEEVEES TRITON, MARINE DRIVE, KOCHI : 682 031, REPRESENTED BY ITS DIRECTOR. BY ADV. SRI.C.C.THOMAS, SENIOR ADVOCATE SRI.K.JAJU BABU SMT.M.U.VIJAYALAKSHMI SRI.BRIJESH MOHAN SRI.T.S.SHYAM PRASANTH RESPONDENTS/RESPONDENTS & ADDL.4TH RESPONDENT: ------------------------------------------------------------------------------------ 1. STATE OF KERALA, REP: BY ITS SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE EXCISE COMMISSIONER, THIRUVANANTHAPURAM. 3. THE DEPUTY COMMISSIONER OF EXCISE, THRISSUR. 4. GURUVAYUR DEVASWOM, REP: BY ITS COMMISSIONER. (*) ADDL.5. GURUVAYUR BRAHMIN SAMOOHAM, REG.NO.109/79, GURUVAYUR, REP: BY ITS SECRETARY, G.K.HARIHARA KRISHNA. (CONTD.........) -: 2 :- (**) ADDL.6. GURUVAYUR JANAKEEYA SAMITHI, GURUVAYUR-680 101, REP: BY ITS CONVENOR, T.V.VASUDEVAN, RESIDING AT THELAMPATTA MANA, NORTH NADA, GURUVAYUR-680 101. (*) (ADDL.R5 IMPLEADED AS PER ORDER IN IA.NO.1005/2010 DTD.22.12.2010) (**) (ADDL.R6 IMPLEADED AS PER ORDER IN IA.NO.18/2011 DTD.13.1.2011) ADV. SRI.V.KRISHNA MENON FOR R4 SRI.D.SREEKUMAR FOR ADV.COMMNR. GOVERNMENT PLEADER FOR R1-3 SRI.K.P.DANDAPANI, SENIOR ADVOCATE FOR ADDL.R5 SRI.MILLU DANDAPANI FOR ADDL.R5 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 25/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.Ramachandran Nair & Bhabani Prasad Ray, JJ. ==================================== W.A.1312 of 2010 ==================================== Dated this the 25th day of January, 2011. JUDGMENT Ramachandran Nair, J. The appellant established a three star hotel in the temple town of Guruvayur and applied for a Bar licence, which, according to the appellant, basically is for catering to the needs of the tourists. Under Rule 13(3) of the Foreign Liquor Rules framed under the Abkari Act, Government, in the interest of promotion of tourism in the State, can order the Excise Commissioner to grant FL-3 Hotel (Restaurant) licence to hotels which have star classification above 3. The field officers of the Excise Department starting from the Circle Inspector of police, the Assistant Commissioner of Excise and Deputy Commissioner of Excise and even the Excise Commissioner recommended the issue of bar licence to the appellant as the appellant's hotel is located 350 metres away from the temple, the restriction being within 200 metres from the temple. However, in WA1312/10 -:2:- spite of the favourable reports from subordinate officers and even the Excise Commissioner, the State Government declined approval of grant of licence in exercise of powers conferred under Rule 39 of the Rules for the reason that public interest does not justify issue of liquor licence to appellant's hotel. The brief order produced as Ext.P3 and which was challenged by the appellant before the learned single Judge reads as follows: “Inviting attention to the reference cited, I am to inform you that the request for grant of FL-3 licence to Hotel Mayura Residency, Guruvayur cannot be acceded as Guruvayur is a prominent pilgrim centre in South India and the Guruvayur Devaswom authorities had already objected to the grant of FL-3 licence. Also, it cannot be stated that local needs justify the grant of licence. Hence the proposal for grant of FL-3 licence o Hotel Mayura Residency, Guruvayoor is rejected.” 2. The appellant filed writ petition challenging the above order of the Government on many grounds, the most important of which is discrimination and violation of Article 14 of the Constitution for the WA1312/10 -:3:- reason that from year to year, Government is renewing FL-3 licence issued to three hotels and FL-1 licence issued to the retail liquor shop maintained by the Government of Kerala company, namely the Kerala State Beverages Corporation Limited, which are similarly located like appellant's hotel, that is not very far from the temple but outside the prohibited distance. The learned single Judge, however considered the matter in detail and held that the Government is free to deny licence under Rule 39 if it is of the opinion that granting of licence is against public interest. The learned single Judge, therefore upheld the Government's order issued based on objections raised by the Guruvayur Devaswom Administration and other objectors. Before the learned single Judge Guruvayur Devaswom got impleaded which supported the impugned order of the Government. In the writ appeal filed before us, two additional respondents are also impleaded, one Guruvayur Brahmin Samooham and the other Guruvayur Janakiya Samithy, both objecting to the grant of FL-3 licence to appellant's hotel. We have heard senior counsel Sri.C.C.Thomas appearing for the appellant, Government Pleader WA1312/10 -:4:- appearing for the State and its agencies, standing counsel for Guruvayur Devaswom and Senior Advocate Sri.K.P.Dandapani appearing for additional respondents impleaded. 3. The senior counsel appearing for the appellant referred to the Constitution Bench of the Supreme Court in Khoday Distilleries Ltd. and others v. State of Karnataka and others [(1995) 1 S.C.C. 574] where the Supreme Court, after holding that citizens have no fundamental right to trade or do business in liquor as a beverage, held that when the State permits trade or business in potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. Before considering the question whether there is discrimination against the appellant in regard to the grant of licence, we called for the particulars of the details of the liquor business in the Guruvayur municipality which is essentially a town formed around the famous Sree Krishna Temple. The details WA1312/10 -:5:- furnished show annual turnover of business in liquor in the three bar hotels and the one liquor shop maintained by the Kerala Government Company as follows: Sales Turnover of Kerala State Beverages Corporation shop at Guruvayur Name of institution 2009-10 2010-11 (upto 30.11.10) Sreekrishna Regency 1.898 crores 2.978 crores Guruvayur Hotels (P) Ltd. 2.949 crores 2.261 crores Dhanya Tourist Home 2.074 crores 3.537 crores FL-1 shop Guruvayur 17.164 crores 12.978 crores Total 24.085 crores 21.754 crores 4. The above figures indicate that this financial year the local liquor sales turnover will go above Rs.30 crores. The figures furnished pertaining to the sales achieved by the shop run by the Beverages Corporation show an average over 20% increase every year in the sales. The statistics furnished by the Government indicate that the temple town is not next to any other town in Kerala so far as liquor WA1312/10 -:6:- sales are concerned. The case of the appellant is that if other hotels are granted an year to year renewal of FL-3 licence for retail sale of liquor in the Bar hotels and Government is permitting retail sale of liquor through the shop run by it's own company in Guruvayur on regular basis, the denial of licence to the appellant, which has established a 3 star hotel is discriminatory and violative of Article 14 of the Constitution. The contention of the objectors, on the other hand, is that liquor sale should not be permitted in Guruvayur town as most of the visitors are pilgrims coming for worship. Though we are in complete agreement with the contention of the Devaswom and objectors that liquor sale should not be encouraged in a holy place, we still feel, under the present dispensation, denial of licence to the appellant alone cannot be termed as anything other than discrimination. The Constitution Bench of the Supreme Court in the decision referred above specifically held that abkari policy of the State should not be discriminatory. In other words, a level playing field should be offered to qualified persons. Counsel for the respondents have relied on the judgment of this Court in WA1312/10 -:7:- Sambamoorthy v. Excise Inspector (1985 K.L.T. 1150) which pertains to the grant of Bar licence in the very same place. Rule 39 of the Foreign Liquor Rules based on which licence is declined to the appellant is as follows: “Rule 39. No licence will be issued for a shop which is situated or which is intended to be opened in a place where on grounds of public interest or expediency it is objectionable to permit any traffic in liquor.” On the face of it, the above Rule relates to the issue of licence to shops which are mostly on road side and not to star hotels which are insulated from outside and the public. However, this Court has already held that this Rule gives ample power to the Government to take a decision on an application and if the Government is of the view that public interest does not justify issue of Bar licence, it can be declined. We do not think there can be any controversy on the legal proposition that the Government can decline a Bar licence considering public interest. However, the question to be considered WA1312/10 -:8:- is whether public interest will be protected on denial of Bar licence to appellant's hotel alone when others are left to carry on business in liquor in the very same area and in similar hotels. 5. The Government obviously has not given the reason for denial of licence under the impugned order issued under Rule 39 and what is stated is that the grant of licence is against public interest. Basically licence was opposed by the Guruvayur Devaswom. The Devaswom and the other respondents, though so far has not objected against the renewal of licence for the existing hotels and the shop run by the Beverages Corporation, before us they contended that they are not in favour of renewal of licence to those licence holders also. We are of the view that public interest is a matter which has various aspects. In the first place, in our view, if public interest does not justify issue of licence for carrying on liquor business in the town on account of the existence of temple then the licence issued to other three hotels and the one run by the Beverages Corporation should not also be renewed. However, before taking such a radical and drastic step, WA1312/10 -:9:- Government should first consider whether the objective of prevention of consumption of liquor could be achieved by denial of licence to the hotels and to the Government company's shop. Data available proves beyond doubt that liquor sale and consumption is rather even all over the State whether Government grants licence or not. In other words, if licences for trade are withdrawn, illicit liquor will take over the market completely. Massive deaths take place occasionally on account of use of illicit liquor in the State. It is therefore for the Government to consider whether one way of controlling and preventing production and sale of illicit liquor is to make available quality liquor at moderate cost at licensed hotels and shops. If this is done, certainly Government will also be able to protect the revenue collections. State revenue is one important matter which cannot be overlooked by the State and prevention of loss of revenue is also a matter of serious concern for the State. The annual revenue collection both by way of excise and sales tax from liquor alone in the State is around 4500 crores. This is besides the huge profit made by the Government from the Beverages WA1312/10 -:10:- Corporation from liquor trade which again goes to the Government as dividend. From the sales in the three bar hotels and the one run by the Beverages Corporation annual collection of revenue will be around Rs.15 crores. The Government while considering public interest in the renewal of licence to the three bar hotels and to the Beverages Corporation and the entitlement of FL-3 licence to the appellant's three star hotel should keep in mind the revenue impact in denying licence which is annual loss of Rs.15 crores. 6. Rule 13(3) of the Foreign Liquor Rules specifically authorizes the Government to grant FL-3 licence for retail sale of liquor in the hotels with star classification 3 and above and which is for the purpose of tourism promotion. Senior counsel Sri.C.C.Thomas appearing for the appellant highlighted the nature of business and tourism in Guruvayur temple. He pointed out that thousands of marriages take place in front of Guruvayur temple which is outside the temple compound where besides relatives, friends and guests from various communities also participate in the marriages and feast. WA1312/10 -:11:- Besides this he pointed out that pilgrimage is actually combined by a large number of people with sight seeing and so much so, lot of pilgrims are on a combined expedition of pilgrimage and sight seeing. According to him, star hotel is constructed by the appellant keeping in mind the large number of tourists and pilgrims reaching Guruvayur both for pilgrimage as well as for sight seeing in Kerala and even for participation in marriages and other functions. Therefore, according to him, the hotel helps to promote tourism industry and the same is approved by the hotel classification and approval committee of the tourism department of the Government of India which granted star classification to appellant's hotel. It is common knowledge that Guruvayur temple attracts a lot of people to the town and the growth of the town itself which is now under a municipality is mainly attributable to the temple. Besides the visiting pilgrims the town has a big business community and large number of people are permanently residing there. In fact, Guruvayur temple itself has 65 elephants stationed in one compound and nowhere else in the world tourists can have a glimpse of 65 WA1312/10 -:12:- domesticated elephants found together. Therefore, in our view, apart from the functioning of the temple, the town functions as a big tourist centre and it is for the State to provide all modern facilities and the availability of liquor in the star hotel is certainly a facility which is required for tourism promotion. So much so, we feel Government should take into account the interest of the revenue and of the tourists while considering renewal of licence to the bar hotels and to the Government company's shop run at Guruvayur. If the existing licence holders are entitled for renewal, we have no doubt in our mind that appellant also is entitled to have licence because, if the Government considers prohibition of trafficking liquor as the only way to achieve public interest in the area then liquor trade should be prohibited in the area as a whole. 7. One aspect that came to our notice is that inspite of the fact that three bar hotels and one liquor shop are run in Guruvayur and all these hotels and shops are within two kilometres from the temple compound, no untoward incident or disturbance on account of WA1312/10 -:13:- alcohol consumption is reported by the Devaswom authorities. Therefore, what is clear is that those who come to the temple on a pilgrimage are not involved in liquor consumption and liquor is probably consumed by the local residents or the visiting tourists other than the pilgrims. So much so, when there is no disturbance or discomfort to the temple or to the devotees on account of the existing bar hotels and the shop run at Guruvayur for sale of liquor, then certainly opening of one more bar hotel cannot create any new problem. Therefore if licence is declined, it should be denied to all. If Bar hotels and temple can co-exist in the town without any problem whatsoever, we do not know why Government should decline licence which will lead to flow of illicit liquor to the town. 8. Brahmin Samooham which got impleaded as additional respondent have produced some photographs and sketch showing that their temple is within 150 metres from the appellant's hotel, that is within the prohibited distance covered by Rule 13(3) and so much so appellant is not entitled to bar licence. Appellant's counsel WA1312/10 -:14:- objected contending that the building in the photographs produced does not satisfy the definition of temple under Rule 13(3) wherein structures on the road side pavement or in a compound of a private building with or without deity are excluded from the definition of temple, church and mosque. In spite of the details collected by the field excise officers, nobody has noticed the so called temple. In the normal course, nowhere is a photograph installed in a temple in the place of deity. However, the respondents have produced photographs which show mainly the photograph of Goddess Saraswathi and in front of that a metal portable idol is kept. On the face of it, we do not think this building satisfy the definition of temple because no deity is seen installed there and it is obviously a private prayer place which cannot be called a place of public worship. Further, if at all it is a temple it is that of a brahmin community for their own purpose. It is very common that those who have faith maintains a place of worship in every place of residence and such temples are specifically excluded under the definition of temples. Regarding the entitlement of licence for the appellant's WA1312/10 -:15:- hotel for the next financial year, we direct the Government and the Excise Commissioner to consider this objection as well with reference to their claim that it is a temple. It is for the appellant to take note of the photographs and other materials placed by the additional respondents so that if any more modifications or additions are made to the temple just for the sake of objecting the bar licence it is for the appellant to bring it to the notice of the authorities and it is for the authorities to take note of these while considering the maintainability of the said respondents' objections. So far as the objections of others are concerned, we have only discussed the objections in a general manner and of course the Government and the Excise Commissioner shall consider the objections of the said additional respondents also. Senior counsel appearing for the appellant brought to our notice the counter affidavit filed by the Government and read over the same wherein the objection of the brahmin samooham was considered and rejected by the Excise Commissioner. The point highlighted by the counsel is that when the objection was raised earlier, the Brahmin Samooham did not have WA1312/10 -:16:- the case of existence of the temple and thereafter they created something called a temple. This is certainly a matter to be considered by the concerned authorities while considering the status of the temple projected by the Samooham with reference to the definition clause. In view of our above findings, we allow the appeal by setting aside the judgment of the learned single Judge and by vacating Ext.P3 order issued by the Government and restore the matter to the Government for re-consideration after hearing the appellant, the present licence holders and the objectors for the purpose of grant of FL-3 licence to the appellant's hotel for the financial year 2011-12 and for renewal of licence for others. We make it clear that if the Government, after considering public interest, decides not to renew the licence issued to other three bar hotels and the liquor shop run by the Government company, appellant can also be declined licence. The Government will decide the matter sufficiently before commencement of the next financial year. It is also worthwhile to WA1312/10 -:17:- mention that a big liquor manufacturing company has spent a huge amount of money for gold plating in the front portion of the Guruvayur temple and therefore the temple also appears to be beneficiary of liquor trade in the town. C.N.Ramachandran Nair, Judge. Bhabani Prasad Ray, Judge. sl.