IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 14TH DECEMBER 2011 / 23RD AGRAHAYANA 1933 WP(C).No. 6858 of 2011(F) ---------------------------------- PETITIONER(S): ----------------------- REGHU.R. @ REGHU MADATHIL, S/O.PARUKKUTTY AMMA, MADATHIL HOUSE, PARIMANAM, NEENDAKARA, KOLLAM, REP.BY ITS POWER OF ATTORNEY HOLDER K.P.JAYAKUMAR. BY SRI.M.K.DAMODARAN, SENIOR ADVOCATE ADVS. SMT.A.PARVATHI MENON SRI.BIJU MEENATTOOR SRI.P.SANJAY RESPONDENT(S): ------------------------- 1. STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, EXCISE DEPARTMENT, SECRETARIAT, TRIVANDRUM, PIN 695001. 2. THE EXCISE COMMISSIONER,TRIVANDRUM, PIN 695 001. 3. VIKRAMA KUMAR, NEENDAKARA, ATHAM, KOLLAM, PIN 691002. R1 & R2 BY SR. GP. SRI. MATHEW GEORGE VADAKKEL R3 BY ADVS. SRI.N.SUBRAMANIAM, SRI.M.S.NARAYANAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/04/2011, THE COURT ON 14/12/11 DELIVERED THE FOLLOWING: DCS WP(C).No. 6858 of 2011(F) APPENDIX PETITIONER'S EXHIBITS:- P1 : COPY OF THE CLASSIFICATION CERTIFICATE DATED 25.02.2010 ISSUED BY THE GOVT. OF INDIA P2 : COPY OF THE APPLICATION FOR FORIEGN LIQUOR LICENCE P3 : COPY OF THE JUDGEMENT IN W.P(C) NO. 31778/10 DATED 18.10.2010 P4 : COPY OF THE ORDER DATED 08.02.2011 P5 : COPY OF THE ORDER DATED 05.02.2011 P6 : COPY OF THE RETURNED POSTAL COVER P7 : COPY OF THE FORWARDING LETTER DATED 29.11.2010 P8 : COPY OF THE REPLY MADE BY THE PETITIONER P9 : COPY OF THE SETTLEMENT AGREEMENT DATED 29.01.2008 P10: COPY OF REPLY P11: COPY OF THE ACKNOWLEDGEMENT CARD P12: COPY OF THE FIRST PAGE OF AFFIDAVIT FILED BY THE 3RD RESPONDENT IN WP(C) 12968/08 RESPONDENT'S EXHIBITS:- R2 (a) : COPY OF THE LETTER DATED 14.01.2011 R2 (b) : COPY OF NOTICE DATED 18.02.2011 R2 (c) : COPY OF THE UNDERTAKING DATED 05.10.2007 R2 (d) : COPY OF THE ORDER DATED 29.07.2010 IN I.A.NO. 12428/09 IN W.P. (C) 26887/07 R2 (e) : COPY OF THE GOVERNMENT ORDER DATED 17.03.2008 R2 (f) : COPY OF THE GOVERNMENT ORDER DATED 21.03.2009 R3 (a) : PHOTO COPY OF THE UNDERTAKING GIVEN BY SHRI. RAGHU MADATHIL ON 05.10.2007 DCS WP(C).No. 6858 of 2011(F) R3 (b) : PHOTO COPY OF THE ORDER DATED 30.11.2007 IN W.P.(C) NO. 26887/2007 R3 (c) : PHOTO COPY OF THE G.O. (RT) NO. 29/08/S&TD THIRUVANATHAPURAM PASSED BY THE KCZMA ON 17.03.2008 R3 (d) : PHOTO COPY OF THE G.O. (Rt) NO. 33/09/S&TD DTD. 21.03.2009 PASSED BY THE KCZMA R3 (e) : PHOTO COPY OF THE ORDER NO.INDTOUR/CHENNAI/HRACC/2009 (KER) DATED 31.07.2009 BY THE CHENNAI OFFICE OF THE MINISTRY OF TOURISM GOVERNMENT OF INDIA R3(f) : PHOTO COPY OF THE COMPLAINT DATED 12.06.2010 SUBMITTED BY THE 3RD RESPONDENT TO THE HON'BLE MINISTER FOR EXCISE AND LABOUR, GOVERNMENT OF KERALA (WITHOUT ANNEXURES R3(g) : PHOTO COPY OF THE COMPLAINT DATED 22.06.2010 SUBMITTED BY THEERADESA SAMRAKSHANA SAMITHY BEFORE THE 2ND RESPONDENT R3(h) : PHOTO COPY OF THE NEWS ITEM APPEARED IN MALAYALA MANORAMA NEWS DAILY PUBLICATION ON 13.07.2010 R3(i) : PHOTO COPY OF THE LETTER DATED 01.07.2010 SENT BY THE 3RD RESPONDENT TO DIRECTOR, MINISTRY OF TOURISM, NEW DELHI (WITHOUT ANNEXURES) R3(j) : PHOTO COPY OF THE ORDER DTD. 29.07.2010 IN 1.A. 12428/2009 IN W.P.(c) NO: 26887/2007 R3(k) : PHOTO COPY OF THE REPLY NOTICE DATED 02.02.2011 SENT BY 3RD RESPONDENT /TRUE COPY/ P.S. TO JUDGE DCS C.K.ABDUL REHIM,J. ------------------------------- WP(C).NO. 6858 of 2011 --------------------------------- Dated this the 14th day of December, 2011 JUDGMENT The petitioner is challenging Ext.P4 order of the 2nd respondent through which an application for grant of FL3 licence for his hotel, 'Regent Lake Palace', Neendakara, is rejected. Since the rejection is on the basis of Ext.P5 letter of the 1st respondent, the petitioner is also challenging Ext.P5. Inter alia the petitioner is seeking direction for grant of the Foreign Liquor Licence to the Hotel in question. 2. The Hotel constructed by the petitioner was classified at 4 star rating, by the Central Government, as evidenced from Ext.P1. Ext.P2 application for FL3 licence was submitted on the basis of such classification. When there occurred delay in considering Ext.P2, the petitioner approached this court in WPC.No.31778/10. Through Ext.P3 judgment this court directed the 2nd respondent to consider the application and to take a decision thereon, in accordance with law, within a period of one month from the date of receipt of a copy of the judgment. In WPC.6858/2011 2 Ext.P4 the application was rejected for the reason that the Government of India had informed that 4 star classification given to the petitioner is under reconsideration, and on the basis of a direction issued to the 2nd respondent to consider grant of FL3 licence only after confirmation of the 4 star classification by Government of India. The decision in this regard is under challenge. 3. Contention of the petitioner is that the reason on which the application was rejected, is totally extraneous and it is outside the purview of Rule 13 (3) of the Foreign Liquor Rules. Referring to Ext.P4 it is contended that, the 2nd respondent had no authority to seek for a re-examination of the allotment of 4 star classification, that too on the basis of any complaint received from the 3rd respondent. It is further contended that as long as the classification granted by Government of India remains valid, there is no justification in denying FL3 licence, merely basing upon an intimation that the grant of classification is under re-examination. The petitioner also assails the direction issued by the 1st respondent in Ext.P5 instructing the 2nd respondent to WPC.6858/2011 3 consider the application only if the classification granted by the Government of India is confirmed. 4. In the counter affidavit filed on behalf of the 2nd respondent it is contended that a complaint was received from the 3rd respondent alleging that the petitioner had constructed the Hotel building without obtaining a prior approval from the Kerala Coastal Zone Management Authority and the construction is made in a “no development zone” of CRZ III. It is further alleged in the complaint that the construction was made after giving an undertaking to the Panchayat that the petitioner will start only a 'Hotel Management College' in the said building. It is further alleged that the Coastal Zone Management Authority had already issued orders declaring that the building is constructed in violation of the regulation. The District Collector and the Secretary of the Grama Panchayat were already issued with directions to take action against the unauthorised construction. In the complaint it is also stated that, on an earlier occasion, an application submitted by the petitioner for getting 3 star classification was rejected by Government of India. According to WPC.6858/2011 4 the 2nd respondent, on receipt of the complaint, a letter was send to the department of Tourism, Government of India for re- examining the classification already granted. It is evident from Ext.R2(a) and R2(b) show cause notices issued from the Government of India, Ministry of Tourism, that the matter is under reconsideration. It is also stated that, the petitioner had submitted Ext.R2(c) affidavit before the Secretary of the Grama Panchayat to the effect that the building will be used only for the purpose of a Hotel Management school. According to the 2nd respondent it is imperative to examine all aspects before granting FL3 licence, especially in the event of some complaint pending. It is mentioned that the 1st respondent had issued Ext.P5 letter to the effect that the grant of FL3 licence can be considered only after the 4 star classification is confirmed by the Government of India. 5. In the counter affidavit filed by the 3rd respondent it is pointed out that the petitioner had obtained Building Permit on the basis of an application submitted for construction of the 3 storied building in the Neendakara Grama Panchayat. The said WPC.6858/2011 5 application was submitted without revealing that the site is within 160 meters from the sea, within the coastal zone area. When the above fact was realised the Grama Panchayat revoked the Permit and the petitioner had challenged the revocation before this court in WPC.No.28867/07. This court had issued an interim direction to number the building provisionally on the basis of an undertaking that the petitioner will use the building only for a “Hotel Management School”. Accordingly an undertaking in the form of an affidavit was submitted. But WPC.No.28867/07 was finally disposed of directing the Kerala Coastal Zone Authority to take a decision regarding the alleged violation, as per Ext.R3(b) judgment. It is also pointed out that this court observed that the numbering of the building will be subject to decision which will be taken by the Coastal Zone Management Authority. Subsequently the said authority had passed Ext.R3(c) order holding that the building is constructed in violation of the Coastal Zone Regulation and the District Collector as well as the Panchayat was directed to take action in accordance with such regulations. It is pointed out that the said authority had also WPC.6858/2011 6 taken a further decision as per Ext.R3(d) in compliance with the direction of this court, confirming Ext.R3(c). The petitioner had challenged the decision of the Coastal Zone Management Authority in another writ petition, WP(C).12968/08, and this court had passed an interim stay against demolition of the building. It is also contended by the 3rd respondent that an application filed by the petitioner for grant of three star classification was rejected on an earlier occasion as per Ext.R3 (e). According to the 3rd respondent, it is suppressing all the above materials that Ext.P1 classification was obtained by the petitioner . Since the construction of the building in question is not valid and since the building has not been validly numbered by the Grama Panchayat, FL3 licence could not be granted, is the contention. The 3rd respondent also contended that since the petitioner had violated provisions of all relevant statute, there is no legal right vested on him to claim grant of FL3 licence . 6. In reply the petitioner contended that the alleged violation of 'Coastal Zone Regulations' is not an aspect which can be considered for the purpose of granting FL3 licence. The WPC.6858/2011 7 petitioner contended that the application for FL3 licence ought to have been considered based on the requirements stipulated in Rule 13(3) of the Foreign Liquor Rules. As long as there is a valid 4 star classification of the Hotel in question, respondents 1 and 2 are not justified in refusing FL3 licence. It is contended that the 3rd respondent has no locus standi in objecting the grant of FL3 licence. The 2nd respondent has no authority to request the Government of India for cancellation of the classification approval. Per contra, on behalf of respondents 2 and 3, it is contended that, when there is illegality and violation in the construction of the building in question which was ordered to be demolished, it is not at all justified to grant FL3 licence to function a Bar hotel in such a building. It is contended that eventhough the order of demolition has been stayed by this court, it remains a fact that the building is an unauthorised construction and the building number provisionally allotted by the Grama Panchyayat now stands revoked by virtue of the judgment of this court in Ext.R3(b). 7. While considering the rival contentions, it is evident WPC.6858/2011 8 that the competent authority under the Coastal Zone Regulations had declared the construction as illegal. Rule 13(3) of the Foreign Liquor Rules prescribe authority on the Excise Commissioner to grant FL3 licence under orders of Government, in the interest of promotion of Tourism in the State, to Hotels which have obtained requisite classification from the Ministry of Tourism, Government of India. The question arises as to whether an application for grant of licence can be refused if the building in question is remaining as an illegal construction. Referring to judgment of a learned judge of this court in WP(C).No.20609/11, the petitioner contended that, if the application satisfies condition stipulated in Rule 13(3), then the respondents are duty bound to issue licence. In that case it is held that so long as the applicant satisfies the condition stipulated under Rule 13(3) the only course open to the authority is to issue licence, under the Rules. It is held that the question as to whether the construction of the applicant is violative of the provisions of the CRZ notification is not a matter to be considered while disposing the application for FL3 licence. But in the case at hand the competent WPC.6858/2011 9 authority which is the Kerala Coastal Zone Management Authority had declared that the construction is in violation of CRZ Regulations and had ordered demolition of the building in question. Further it is evident that the Grama Panchayat had allotted the number to the building only on a provisional basis subject to an undertaking furnished. From Ext.R3(b) it is evident that this court had clarified that the provisional numbering given will be subject to the ultimate decision of the Coastal Zone Management Authority. Therefore it is clear that when the said authority had taken a final decision ordering demolition of the building, the position remains that the building in question is an unauthorised construction in which occupancy cannot be permitted. 8. A further question arises as to whether the respondents 1 and 2 are bound by the classification issued by the Government of India, Ministry of Tourism. In the case at hand, eventhough it is evident that the Government of India had issued a show cause notice to the petitioner with respect to a proposal for cancellation of the classification, there is no evidence to the WPC.6858/2011 10 effect that any further steps has been taken pursuant to such notice. With respect to the question of classification, I am of the view that the contention of the petitioner deserves merit that, as long as the classification remains valid FL3 licence could not be rejected merely because any proceedings has been initiated for reconsideration of the classification. 9. In view of the observations as above, I am of the view that the matter requires reconsideration at the hands of the 1st respondent. The petitioner will be at liberty to pursue challenges against the decision of the Coastal Zone Management Authority and to get it reversed. If the petitioner succeeds in his challenges and get any declaration that the building is a regular construction and gets permission for occupancy, then he will be entitled for grant of FL3 licence. On such event the 1st respondent is directed to reconsider the application notwithstanding the decision taken under Exts.P4 and P5 and to grant FL3 licence, as long as the classification awarded to the petitioner's Hotel under Ext.P1 remains not cancelled or revoked. WPC.6858/2011 11 10. In the result the writ petition is disposed of reserving liberty to the petitioner to approach the 1st respondent seeking reconstruction of the matter, as observed above, and also directing the first respondent for reconsideration of the matter in view of the directions contained hereinabove. C.K.ABDUL REHIM,JUDGE pmn/ WPC.6858/2011 12