Kerala Liqour Policy; Placing a moratorium on hotels other than Five Star is not a violation of Article 14 of the Constitution; SC [Read Judgment]

In a major setback to the bar owners in Kerala, the Supreme Court has upheld the controversial Abkari policy for the year 2014-2015 framed by the Kerala Government restricting the issuance of bar licenses (FL-3) to five-star hotels in the State to serve alcohol to the public, and not to renew the existing bar licences issued to any of the other hotels. Additionally, the Government had decided to close down 10% of outlets out of 338 FL-1 outlets of Kerala State Beverages Corporation and 46 outlets of Consumer Fed each year from 2nd October, 2014 onwards.The Abkari policy so formulated by the Kerala Government as well as the amendments to the Foreign Liquor Rules was assailed before a Single Judge of the Kerala High Court by the writ petitioners, which included hotels classified as Two Star, Three Star, Four Star and Heritage hotels. While dismissing the writ petitions, the Single Judge vide judgment dated 30.10.2014 carved out an exception vis-a-vis the eligibility of Four Star and Heritage category hotels to the grant of FL-3 licence, finding their exclusion to be arbitrary and violative of Article 14 of the Constitution. The Single Judge thereby allowed the writ petitions of the Four Star and Heritage category hotels, but dismissed the writ petitions of Two Star, and Three Star and unclassified hotels.The Single Judge discussed the position of Two Star and Three Star hotels separately from Four Star and Heritage hotels, and regarding the former, it was held that their contention that the classification is discriminatory is no longer res integra in view of the dictum of the Apex Court in B.Six Hotels and Surendra Das. So far as the Four Star hotels were concerned, the Single Judge noted that there are only 20 Five Star hotels in Kerala and only 33 hotels in the Four Star and Heritage categories. It was held that none of the material before the State Government proposed the exclusion of Four Star and Heritage hotels from the criterion of eligibility for bar licenses. The Single Judge held that while there is a presumption that the Government has full knowledge of the social aspects of the proposed controls, in the absence of any material on the record, this presumption cannot be pushed to the extent of presuming that the State could have possessed some undisclosed and unknown reason or material to justify its action. The One Man Commission and the Tax Secretary recommended the grant of licenses to hotels with sufficient facilities. The Single Judge noted that Three Star, Four Star and Five Star hotels constituted a distinct class and further that the Government did not even state the reasons for rejecting the recommendations in the Reports before it. The Single Judge accordingly held that the policy was violative of Article 14 and it was struck down inasmuch as it excluded Four Star and Heritage category hotels from being granted FL-3 licenses.Aggrieved by the verdict of the single judge to the limited extent that it found exclusion of four star and heritage hotels from grant of FL-3 licenses to be unconstitutional, the Kerala Government preferred an intra-court appeal to the Division Bench of the Kerala High Court. The writ petitioners which included two star, three star and unclassified hotels who did not get the relief they had sought from the single judge also carried the matter in appeal to the Division Bench.By judgment dated 31.03.2015, the Division Bench reversed the conclusion of the learned Single Judge finding the exclusion of Four Star and Heritage category hotels from the grant of FL-3 licence to be arbitrary, and upheld the abkari policy in toto as framed by the Government. Consequently only Five Star hotels in the State of Kerala are presently permitted to serve alcohol in their bars i.e. in public.The Division Bench opined that though the Government was bound to consider the recommendations of the One Man Commission, it was not bound to accept the Report in its entirety. The Report was simply a piece of evidence which the Government would have to take note of. It was for the State to evolve a policy taking into account the welfare of the people, and the Courts have a very narrow and limited scope to intervene in such policy decisions. It is also not for the Courts to find whether a more feasible view is possible or whether a better policy could be evolved, which intrinsically remains a subjective exercise. The Division Bench also noted that the impugned policy is in consonance with Article 47 of the Constitution which provides that the State shall regard the raising of nutrition and the standard of living of its people and the improvement of public health as among its primary duties, in particular endeavoring to bring about prohibition.The appeals filed by the Two Star, Three Star and unclassified hotels were accordingly dismissed, and the appeals filed by the State were allowed.It was against the judgment of the Division Bench that the appellants had preferred an appeal to the Supreme...

Kerala Liqour Policy; Placing a moratorium on hotels other than Five Star is not a violation of Article 14 of the Constitution; SC [Read Judgment]

Ajith.S

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