State of Kerala and Others vs Raghavan, P.K.

V. Girl, J.—The State has come up in appeal challenging the judgment of the learned Single Judge, in which a direction has been issued to the Respondents in the writ petition to consider the writ Petitioner''s eligibility for an FL3 licence for the year 2001-02 and for renewal for subsequent years, inter alia, with reference to the law laid down by a Bench of this Court in B. Six Holiday Resorts (P) Ltd. Vs. State of Kerala, . The Appellants contend that there is no warrant to direct the writ Petitioner''s eligibility to be considered with reference to the rules prevailing in 2001 i.e. 14-12-2001, when the writ Petitioner had filed Ext. P-l application for an FL 3 licence. It is contended that since admittedly the rules were amended with effect from 20-2-2002 and the Petitioner would not be eligible under the amended rules, the application was considered and rejected as per Ext. P-4 finding that only hotels with 3 star classification are currently eligible for FL 3 licence. But since the Petitioner''s hotel did not have 3 star classification, his application was rightly rejected.

It is the contention of the writ Petitioner that he had submitted an application for FL 3 licence through the Assistant Excise Commissioner, Kollam on 14-12-2001 that had the application been considered with reference to the law prevailing then, he would have been issued an FL 3 licence. Reference is made to Annexure R1(a) a communication issued by the Assistant Director of the India Tourism (Kollam), Government of India, to the Director, Department of Tourism, Government of Kerala, on 7-3-2002, to contend that the Government of Kerala had deliberately requested the Tourism Department of Government of India, to delay the inspection of the hotels, which had sought for Star classification. Had there not been any delay in considering the request in according star classification, the Petitioner would have obtained two star classification for his hotel in 2001 itself. As a matter of fact, as evidenced by Ext. P-2, the Tourism Department of the Government of India had issued a Restaurant Approval Order with effect from 11-1-2001. But, this was pursuant to an interim order issued by this Court, consistent with the law declared by the Division Bench in a similarly situated case, in W. A. No. 2097/03. It was contended that dealing with the Petitioner''s application for FL 3 licence, cannot be in derogation of the Petitioner''s right to be considered with reference to the law prevailing on the date of the application. The writ Petitioner relied on the decision of a Bench of this Court in B. Six Holiday Resorts'' case.

We heard Counsel on both sides.

The learned Judge took note of the fact that Ext. P-1 application for bar licence was filed on 14-2-2001 and the Restaurant Approval Order was itself issued with effect from 11-1-2001 pursuant to the order issued in W.P. (C) No. 17520/05. The learned Single Judge took note of the law laid down by the Division Bench in B. Six Holiday Resort''s case and proceeded to issue an order directing the Petitioner''s application to be considered in the light of Ext. P-2 Restaurant Approval Order and in the light of B. Six Holiday Resort''s case. We are bound by the law laid down in B. Six Holiday Resort''s case. We also take note of the fact that the said dictum has been followed in several other cases thereafter. We further take note of the fact that the Excise Commissioner himself had, as evidenced by Ext. R-1 (o), given his opinion that the Petitioner''s case is similar to the case of Hotel Mahabali, Irinjalakuda. This fact is relevant in as much as that FL3 licence came to be issued in relation to Hotel Mahabali.

Learned Government Pleader referred to a decision of this Court in Radhamani Vs. State of Kerala, and also a decision of the Supreme Court in Kuldeep Singh Vs. Govt. of NCT of Delhi, . Radhamani''s case had considered the case where a hotel owner had filed an application for FL 3 licence on 4-3-1992. It was considered pursuant to a direction of this Court issued on 19-10-1992. The policy was changed in the meanwhile and the Government rejected the application on the basis of the changed policy. The applicant was quiet for a period of 10 years and thereafter had filed an application on 24-10-2002 for consideration of the application filed in 1992. This was then rejected by the Government and the matter was again taken up before this Court. It was found that the Petitioner had gone into a dreamlike phase with the rejection of an application as early as in 1992 and had woken up only after a period of 10 years. No doubt the declaration made by this Court in B. Six Holiday Resort''s case does not create any legal right. This Court only declared the law. It was found that the Petitioner could have and should have re-agitated the claim.

The distinguishing feature in Radhamani''s case was noted by Anr. Division Bench in Sijomon Chacko''s Case in W. P. (C) No. 1136/06 wherein a licence issued applying the dictum in B. Six Holiday Resorts Private Limited was declined to be interfered with by a Bench of this Court.

Learned Government Pleader placed considerable reliance on the decision of the Surpeme Court in Kuldeep Singh''s Case. It is appropriate that we consider the contention of the State in this regard; in fact, it is contended that the view taken B. Six Holiday Resort''s Case is no longer good law and warrants a reconsideration. It is the true that in Kuldeep Singh''s Case though the Supreme Court reiterated the principle that since trade in liquor lies within the exclusive domain of the State and no person can claim a fundamental right to carry on trade in liquor. A change in the policy effected by the Government cannot be assailed by any person on the ground that the change had affected his vested rights, which he had derived under the earlier policy. In Kuldeep Singh''s Case, the Supreme Court was dealing with a case where the Government had invited applications for fresh L 52 licences. Several applications were received. The State then issued a public notice notifying closure of the scheme, but wherein it was clarified that pending applications would be considered as per the Rules and terms and conditions of the scheme, but further making it clear that no new applications would be accepted. The application filed by Appellant-Kuldeep Singh was rejected and in appeal, the appellate authority directed that his application be considered after a fresh inspection. A fresh inspection was also conducted. In the meanwhile, paying heed to a protest against the excise policy of the State, the cabinet sub committee took a decision not to grant any more L 52 licences. This was challenged in a batch of writ petitions before the Delhi High Court, inter alia, contending that those persons, who had applied under the earlier policy, had a vested right to get their applications considered under the then existing rules and that this cannot be diluted by a change in policy. Though the learned Single Judge of the High Court had allowed the writ petitions, the Division Bench, in appeal, reversed the same and dismissed the writ petitions. The view taken by the Delhi High Court was affirmed by the Apex Court.

The Supreme Court in Kuldeep Singh''s case was dealing with the change in the excise policy adopted by the Government which, inter alia, provided for stoppage in the grant of a fresh L 52 licences in the private sector. The earlier policy provided for the grant of a limited number of licences, subject to certain conditions and it is accordingly that several applications were received. When the applications were under process, the policy underwent a change, apparently, in response to a huge public outcry in regard to the excise policy of the State. It is in this context the Supreme Court held that the applicants cannot rest their claim on any vested right to be considered for liquor vending licences on the basis of a policy that had been changed. Kuldeep Singh''s case is a case whereunder a changed policy, the Government decided not to grant any further licences as such.

But, as pointed out by the learned Counsel for the Petitioner, in the present case, the Government has not taken a decision to stop the grant of fresh FL 3 licences. The amendment brought about in 2002 did not provide for a prohibition on the grant of licences. It only provided for changed conditions to be made applicable in the matter of grant of fresh licences. In B. Six Holiday Resorts'' case, this Court held that the amendment to the Rules should not be given retrospective effect, consequently applied the principle that it is only fair and reasonable on the part of the State to deal with the fresh applications for licences, applying the Rules as it stood on the date of the application. The State cannot be compelled to grant any licence to any applicant at a point of time when the State has decided not to grant any licences to any person. This was what was held by the Supreme Court in Kuldeep Singh''s case. The present case is one where the State has not decided to impose a moratorium on the grant of fresh licences. The dictum laid down in Kuldeep Singh''s case cannot be applied to the present case.

It is also significant to take note of the fact that the Supreme Court had, in Kuldeep Singh''s case, specifically upheld the application of Article 14 of the Constitution even in dealing with the applications for licences. Paragraphs 20, 21 and 22 of the judgment read as follows:

Here, however, the State had made a change in its policy decision of opening the doors to the private entrepreneurs evidently with a view to earn more revenue. It represented to the applicants that their cases would be considered on their own merits. Such consideration was, thus, required to be fair and reasonable. Although dealing in liquor as has rightly been submitted by the learned Additional Solicitor General is not a fundamental right, but indisputably the equality clause contained in Article 14 of the Constitution of India would apply.

In State of M.P. and Others Vs. Nandlal Jaiswal and Others, whereupon the learned Additional Solicitor General himself relied upon, this Court stated:

''...No one can claim as against the state the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor. But when the State decides to grant such right or privilege to Ors. the State cannot escape the rigour of Article 14...'' [See also Ashok Lenka Vs. Rishi Dikshit and Others, .]

Moreover, if the equality clause applied, the State could not have adopted different procedures for different applicants. [See Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, .

For any decision by the State in dealing with the applications for fresh licence to be fair and reasonable, it would be necessary that such fresh applications for licences should be dealt with in accordance with the law prevailing on the date of the application. This, as stated above, is in circumstances where even under the amended law, grant of a fresh liquor vending licence is not prohibited. We hasten to make it clear that this principle would apply subject to any supervening plenary legislation providing to the contra and brought into force with retrospective effect.

For all these reasons, we are of the view that the judgment of the learned Single Judge directing a consideration of the writ Petitioner''s application for an FL 3 licence, in accordance with the dictum laid down in B. Six Holiday Resorts case does not warrant any interference in the writ appeal. Accordingly, the writ appeal is dismissed.