State Of Kerala & Anr vs M/S. B. Six Holiday Resorts (P) Ltd.&Ors

2. For convenience, we will refer to the facts of the case of M/s. B.Six Holiday Resorts (P) Ltd. (referred to as `the applicant' for short), who is the respondent in C.A. No. 983 of 2003 and the appellant in C.A. No. 998 of 2003.

3. The applicant constructed a resort hotel at Munnar. The applicant's restaurant therein was classified by the Ministry of Tourism, Government of India, as an approved restaurant. On 11.12.2000, the applicant made an application for a FL-3 licence under the Rules. As the said application was not considered, the applicant approached the High Court. The High Court, disposed of the writ petition (O.P.No.824/2001) by order dated 9.1.2001 with a direction to the excise authorities to consider and dispose of the application within three weeks. The application was considered and rejected by order dated 19.5.2001 on the ground that the Managing Director of the applicant had been convicted in an excise offence. The said rejection was 3 challenged in O.P. No. 17106/2001 contending that the person convicted was not the Managing Director when the application was made. The second writ petition was allowed on 20.6.2001 with a direction to re-consider the application and pass a fresh order, taking note of the fact that the convicted Managing Director was no longer in office and there was new Managing Director at the time of the application. The Special Secretary (Taxes), Government of Kerala, reconsidered the application and by order dated 6.10.2001 rejected the application on following four grounds: (i) the applicant was not a classified restaurant as contemplated under Rule 13(3) of the Rules; (ii) the facilities contemplated under Rule 13(3) were not available in the applicant's hotel; (iii) only hotels run by Kerala Tourism Development Corporation and India Tourism Development Corporation were entitled to FL-3 licences; and

(iv) the current policy of the government was not to grant any fresh licences. The applicant filed yet another writ petition (O.P. No. 31993/2001) challenging the rejection. A learned Single Judge dismissed it by order dated 6.11.2001. He held that though the first three grounds of rejection were not tenable, in view of policy of the Government not to grant FL-3 licences for the time being, a mandamus could not be issued to the State Government to grant a licence 4 contrary to its policy. The writ appeal filed by the applicant was allowed on 14.12.2001. The Division Bench of the High Court agreed with the learned single Judge that the first three grounds of rejection were not tenable. In regard to the fourth ground of rejection, the division bench felt that the policy put forth, was rather vague and the Government cannot abdicate its function under the Rules to consider and grant licences, by alleging some vague policy. It therefore directed the Excise Commissioner to decide the applicant's application for FL-3 licence within two weeks by a speaking order.

4. Thereafter, the applicant gave a representation dated 19.12.2001. The Excise Commissioner considered it and again rejected the application on 27.12.2001 on the ground that the applicant's hotel was only a restaurant approved by Ministry of Tourism, Government of India, but it was not a classified restaurant (two star and above) as required under Rule 13(3). Feeling aggrieved, the applicant initiated contempt proceedings. The High Court on being informed that a new Excise Commissioner had taken charge, granted an opportunity to the new incumbent to reconsider the matter and pass a fresh order by 22.2.2002. At that stage, by notification dated 20.2.2002, the Foreign Liquor 5 Rules were amended by foreign Liquor (Amendment) Rules, 2002, with retrospective effect from 1.7.2001. By the said amendment, the last proviso under sub-Rule (3) of Rule 13 was substituted by the following proviso:

7. The applicant, as also other restaurateurs whose applications for FL-3 licences made in the years 2000 and 2001 were also rejected, have challenged the decision of the High Court upholding the validity of the amendment and 8 non-grant of licence in CA No. 998 of 2003 and CA Nos. 999- 1003 of 2003.

18. In view of the above, the appeals filed by the State are allowed in part and the appeals filed by the applicants for licences are dismissed, subject to the following clarifications:

______________________J.

(R. V. RAVEENDRAN) _____________________J.

(SURINDER SINGH NIJJAR) New Delhi;

January 13, 2010.