IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC TUESDAY, THE 14TH SEPTEMBER 2010 / 23RD BHADRA 1932 WP(C).No. 15505 of 2010(K) ---------------------------------------- PETITIONER(S): ------------------------ JOSE P.K., S/O. CHACKO, PATHIYIL HOUSE, PADIMARUTHU P.O., ANANDASRAMAM (VIA) KASARGOD DISTRICT. BY ADV. SRI.G.MOHAN RESPONDENT(S): ------------------------- 1. REGIONAL DIRECTOR, INDIA TOURISM, SOUTHERN REGION, 154-ANNA SALAI, CHENNAI – 600 002. 2. DIRECTOR, DEPARTMENT OF TOURISM, GOVERNMENT OF INDIA, C-1, HUTMENTS, DALHOUSIE ROAD, NEW DELHI -110 011. 3. K.T. MATHEW, KATTIVEETTIL HOUSE, P.O. IRITTY, KANNUR DISTRICT. 4. VYSHAK INTERNATIONAL HOTELS (P) LTD. HOSPITAL ROAD, PAYYANNUR – 670 307. R1 & R2 BY ADV. MR.T.P.M. IBRAHIM KHAN, ASST. SG OF INDIA. R3& R4 BY ADV. SRI.A.MOHAMED MUSTAQUE, SRI.T.PRAVEEN, SMT.LAKSHMI RAJAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14/09/2010, ALONG WITH WPC NO. 25700 OF 2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 15505/2010-K APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE RELEVANT EXTRACT OF THE HOTEL CLASSIFICATION GUIDELINE AND MARKS. EXT.P2: COPY OF THE APPLICATION DATED 05/04/2010. EXT.P3: COPY OF THE REPLY DATED 28/04/2010. EXT.P4: COPY OF THE LETTER ADDRESSED TO THE 1ST RESPONDENT DATED 05/04/2010. EXT.P5: COPY OF THE REPLY DATED 06/05/2010. EXT.P6: COPY OF THE LETTER DATED 12/05/2010. RESPONDENT'S EXHIBITS: EXT.R4(a): COPY OF THE CHANGE OF ENTRY REGARDING CHANGE OF MANAGING DIRECTOR OF 4TH RESPONDENT COMPANY DATED 06/08/2010 ISSUED BY PAYYANNUR MUNICIPALITY. //TRUE COPY// P.S. TO JUDGE rs. ANTONY DOMINIC, J. -------------------------------------------------- W.P.(C) NOs.15505/2010 & 25700/2010 -------------------------------------------------- Dated this the 14th day of September, 2010 J U D G M E N T Among those two writ petitions which are connected, WP(c). No.25700/2010 is taken as the leading case. 2. Petitioner is a company incorporated under the provisions of the Companies Act, 1956 and is represented by its Managing Director. It is stated that the 3rd respondent herein, who has filed WP(c).No.15505/2010, was having shares in the company and was also its Director. According to the company, the 3rd respondent transferred his shares and the transfer of which was approved by the Board of Directors of the Company as per Ext.P4 proceedings and is no longer interested in the company. 3. It is stated that the company owns a building where it has established a hotel, which was classified by respondents 1 and 2 as a three star hotel. The company had also obtained FL-3 licence issued under the Foreign Liquor Rules. It is stated that on expiry of the three star classification, an application was made to the first respondent for reclassification. Accordingly, the Hotel and Restaurant Approval and Classification Committee (HRACC) WPC.No. 15505/201 & anor. :2 : inspected the hotel and the infrastructure provided on 26.3.2010 and recommended for classification of the hotel under three star category. Thereafter the first respondent issued Ext.P1 certificate dated 30.3.2010 stating that the committee has recommended for classification of the hotel under three star category and that a formal classification order will be issued in due course. 4. At that stage, the 3rd respondent, the petitioner in WP(c). NO.15505/2010 filed Ext.P2 complaint dated 5.4.2010 to the first respondent stating that he “was one of the share holders and Directors of the company”. According to him, the application for classification was submitted by the present Managing Director, was incompetent for the reason that he had no manner of right to apply for classification as he did not have ownership right or lease hold right over the hotel building. Various other allegations were also raised. 5. It would appear that on receipt of Ext.P2 complaint, the first respondent sought clarifications from the petitioner and accordingly, the clarification sought was submitted. Thereafter the first respondent issued Ext.P3 communication dated 6.5.2010 WPC.No. 15505/201 & anor. :3 : informing the 3rd respondent that from the clarifications offered, the present Managing Director Sri.K.T. Mathew substantiated his claim that he was the Managing Director of the Company. It is also stated that the promoters have informed that the 3rd respondent did not have any interest/right in the company. On this basis the Ext.P2 complaint was rejected. It is producing the said communication dated 6.5.2010 as Ext.P5 that WP(c). No.15505/2010 was filed by Sri. P.K. Jose, who is the 3d respondent in WP(c).No.25700/2010 seeking to challenge the said order. 6. Apparently in view of the pendency of the complaint made and despite its rejection by Ext.P5 referred to above, which is Ext.P5 in WP(c).No.25700/2010, there was no progress on the application made by the company for reclassification. According to the company, for want of reclassification, their FL-3 licence issued under the Foreign Liquor Rules was not renewed from 1.4.2010. They state that in view of the provisions contained in Foreign Liquor Rules, if a licence remains without renewal for more than 6 months, it will be deemed as defunct and the licensee will not be entitled to its renewal. It is with this WPC.No. 15505/201 & anor. :4 : complaint, the company filed WP().No.25700/2010 seeking a direction to the first respondent, the Regional Director to issue the reclassification sought for by them based on the recommendation of HRACC(South). It is in the above factual background both these writ petitions are coming up for final hearing. 7. In the nature of the controversy that is raised, what is required to be considered first is whether there is any merit in the complaint of Sri. P.K. Jose, the petitioner in WP(c). No.15505/2010. If there is no merit in his case, necessarily, the first respondent is liable to be directed to act upon the recommendations made by the HRACC(South) and issue formal classification as mentioned in Ext.P1 communication in WP(c). No.25700/2010. 8. The complaint made by Sri P.K. Jose is Ext.P2 in WP(c) No.25700/2010. The substance of the complaint is that Sri. K.T. Mathew has no manner of to apply for classification as he did not have ownership right or lease hold right over the building where the hotel is functioning. This contention of Sri. P.K. Jose is sought to be substantiated by the learned counsel by referring to Ext.P1 WPC.No. 15505/201 & anor. :5 : in WP(c).No.15505/2010, which is stated to be the guidelines governing grant of classification. According to him, applications for classification can be made only by a person who owns a building or holds the property on lease and that Managing Director of the company Sri. K.T.Mathew, who made the application, does not satisfy these requirements and therefore his application ought to be rejected. It is this contention which was urged by the learned counsel before this court also. 9. It is not in dispute that the building in respect of which the classification is sought is one belonging to M/s. Vyshak International Hotels Pvt. Ltd., a company incorporated under the Companies Act, 1956. If that be so, the owner of the building can only be that of the company and Sri. K.T. Mathew is admittedly its Managing Director. Sri. K.T. Mathew made the application in his capacity as Managing Director and his capacity has to be accepted as the representative of the company. In view of the provisions contained in the Companies Act, 1956 and the Articles of Association, the Managing Director is entitled to represent the Company also and nothing to the contrary has been shown to me. That apart, a juristic person like a company can be represented WPC.No. 15505/201 & anor. :6 : only by an individual. For the aforesaid reason, it has to be held that the owner of the hotel building is the company and Sri. K.T. Mathew being its Managing Director, was only its representative. If so, the contention of the petitioner that since Sri.K.T Mathew was not the owner or the lessee of the hotel building in question, application made by the Sri. K.T. Mathew should not have been considered by the first respondent is absolutely without any substance. Therefore, the contention of the petitioner in WP(c).No.15505/2010 has been rightly rejected by the first respondent as per Ex.P5 in WP(c).No.15505/2010, which is Ext.P3 in WP(c).No.25700/2010. 10. In this context I should also deal with another contention raised by the counsel for the petitioner in WP(c). No.15505/2010 that at any rate, before the grant of reclassification certificate he should be heard by the respondents. Even going by the complaint made by him, he no longer holds any share in the company. Ext.P4 in WP(c). No.25700/2010, the proceedings of the Board of Directors, also show that his shares were transferred and the transfer of shares is an admitted factual position. The fact that Registrar of WPC.No. 15505/201 & anor. :7 : Companies, has issued a notice for defunct. Ext.R2(f) in WP(c). No.25700/2010 will also not improve his case in any manner. On the materials available in this case I am of the view that he lacks locus standi to seek an opportunity of hearing and therefore, there is no basis for the request as well. 11. It is on record that on inspection by HRACC(South), the committee recommended the hotel for grant of three star classification. Even now, respondents 1 and 2 in WP(c). NO.25700/2010 do not have by dispute on this issue. Now that the complaint made against the grant of classification has been found to be without merit, necessarily, the first respondent shall take further action based on the recommendation made by the HRACC(South) and issue final order of classification. Having regard to the fact that if order of classification is not issued and the FL-3 licence is not got renewed before 30th September, 2010, the licence will be treated as a defunct one and this rendered ineligible for renewal, necessarily, the first respondent should issue classification order immediately. This the first respondent shall do as expeditiously as possible and at any rate within 7 days from the date of production of a copy of the judgment. WPC.No. 15505/201 & anor. :8 : Accordingly WP(c).No.15505/2010 is dismissed and WP(c). No.25700/2010 is allowed of directing the first respondent to issue reclassification certificate based on the recommendations of HRACC (South) within seven days from the date of production of a copy of this judgment. There will be no order as to costs. (ANTONY DOMINIC) JUDGE vi/