{"id":111993,"date":"2010-01-13T00:00:00","date_gmt":"2010-01-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-kerala-anr-vs-ms-b-six-holiday-resorts-p-on-13-january-2010"},"modified":"2016-08-01T02:57:18","modified_gmt":"2016-07-31T21:27:18","slug":"state-of-kerala-anr-vs-ms-b-six-holiday-resorts-p-on-13-january-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-kerala-anr-vs-ms-b-six-holiday-resorts-p-on-13-january-2010","title":{"rendered":"State Of Kerala & Anr vs M\/S. B. Six Holiday Resorts (P) … on 13 January, 2010"},"content":{"rendered":"
Supreme Court of India<\/div>\n
State Of Kerala & Anr vs M\/S. B. Six Holiday Resorts (P) … on 13 January, 2010<\/div>\n
Author: R Raveendran<\/div>\n
Bench: R.V. Raveendran, Surinder Singh Nijjar<\/div>\n
                                                                 Reportable\n\n                 IN THE SUPREME COURT OF INDIA\n\n                 CIVIL APPELLATE JURISDICTION\n\n               CIVIL APPEAL NO. 983-990   OF 2003\n\nSTATE OF KERALA & ANR.                            ... APPELLANTS\n                               Vs.\n\nB. SIX HOLIDAY RESORTS (P) LTD. & ETC.            ... RESPONDENTS\n\n\nWITH\n\n\nCIVIL APPEAL NO. 998\/2003\n\nB. SIX HOLIDAY RESORTS (P) LTD.                   ... APPELLANT\n\n                               Vs.\nSTATE OF KERALA & ANR.                            ... RESPONDENTS\n\n\nWITH\n\n\nCIVIL APPEAL NOS. 999-1003\/2003\n\nKRISHNA REGENCY & ETC.                           ... APPELLANTS\n                               Vs.\nSTATE OF KERALA & ANR.                           ... RESPONDENTS\n\n\n\n                            O R D E R\n<\/pre>\n
R.V. Raveendran, J.\n<\/p>\n<\/p>\n
       The appeals relate to non-grant of FL-3 Licence under<\/p>\n
the Foreign Liquor Rules (`the rules’ for short) framed<\/p>\n
under the Akbari Act. The appeals arise from the common
\n                                                                                         2<\/span><\/p>\n
judgment      dated      16.7.2002      of    the    Kerala     High       Court    in    a<\/p>\n
batch of cases wherein the amendment dated 20.2.2002 to<\/p>\n
Rule   13(3)    of       the    Rules    and      consequential        rejection         of<\/p>\n
applications        for    FL-3    licences         were    challenged.       CA    Nos.<\/p>\n
983-990    of   2003       are    filed      by     the    State     and    the    other<\/p>\n
appeals are by the applicants for FL-3 licences.<\/p>\n
2.     For convenience, we will refer to the facts of the<\/p>\n
case of M\/s. B.Six Holiday Resorts (P) Ltd. (referred to as<\/p>\n
`the applicant’ for short), who is the respondent in C.A.<\/p>\n
No. 983 of 2003 and the appellant in C.A. No. 998 of 2003.<\/p>\n
3.     The applicant constructed a resort hotel at Munnar.<\/p>\n
The applicant’s restaurant therein was classified by the<\/p>\n
Ministry of Tourism, Government of India, as an approved<\/p>\n
restaurant.         On     11.12.2000,            the       applicant        made        an<\/p>\n
application for a FL-3 licence under the Rules. As the said<\/p>\n
application      was      not    considered,        the     applicant       approached<\/p>\n
the    High    Court.      The    High       Court,       disposed     of    the    writ<\/p>\n
petition (O.P.No.824\/2001) by order dated 9.1.2001 with a<\/p>\n
direction to the excise authorities to consider and dispose<\/p>\n
of the application within three weeks. The application was<\/p>\n
considered and rejected by order dated 19.5.2001 on the<\/p>\n
ground that the Managing Director of the applicant had been<\/p>\n
convicted      in    an    excise    offence.         The    said    rejection       was
\n                                                                              3<\/span><\/p>\n
challenged     in   O.P.    No.    17106\/2001    contending         that     the<\/p>\n
person convicted was not the Managing Director when the<\/p>\n
application was made. The second writ petition was allowed<\/p>\n
on     20.6.2001    with     a     direction     to     re-consider          the<\/p>\n
application and pass a fresh order, taking note of the fact<\/p>\n
that    the   convicted     Managing    Director      was    no     longer    in<\/p>\n
office and there was new Managing Director at the time of<\/p>\n
the application. The Special Secretary (Taxes), Government<\/p>\n
of Kerala, reconsidered the application and by order dated<\/p>\n
6.10.2001      rejected     the    application     on       following      four<\/p>\n
grounds: (i) the applicant was not a classified restaurant<\/p>\n
as contemplated under Rule 13(3) of the Rules; (ii) the<\/p>\n
facilities contemplated under Rule 13(3) were not available<\/p>\n
in the applicant’s hotel; (iii) only hotels run by Kerala<\/p>\n
Tourism       Development        Corporation     and        India     Tourism<\/p>\n
Development Corporation were entitled to FL-3 licences; and<\/p>\n
(iv) the current policy of the government was not to grant<\/p>\n
any fresh licences. The applicant filed yet another writ<\/p>\n
petition (O.P. No. 31993\/2001) challenging the rejection. A<\/p>\n
learned Single Judge dismissed it by order dated 6.11.2001.<\/p>\n
He held that though the first three grounds of rejection<\/p>\n
were not tenable, in view of policy of the Government not<\/p>\n
to grant FL-3 licences for the time being, a mandamus could<\/p>\n
not be issued to the State Government to grant a licence
\n                                                                               4<\/span><\/p>\n
contrary      to   its   policy.    The    writ      appeal    filed    by   the<\/p>\n
applicant was allowed on 14.12.2001. The Division Bench of<\/p>\n
the High Court agreed with the learned single Judge that<\/p>\n
the first three grounds of rejection were not tenable. In<\/p>\n
regard   to    the   fourth      ground   of    rejection,      the    division<\/p>\n
bench felt that the policy put forth, was rather vague and<\/p>\n
the Government cannot abdicate its function under the Rules<\/p>\n
to   consider      and   grant    licences,     by    alleging      some    vague<\/p>\n
policy. It therefore directed the Excise Commissioner to<\/p>\n
decide the applicant’s application for FL-3 licence within<\/p>\n
two weeks by a speaking order.\n<\/p>\n<\/p>\n
4.    Thereafter, the applicant gave a representation dated<\/p>\n
19.12.2001. The Excise Commissioner considered it and again<\/p>\n
rejected the application on 27.12.2001 on the ground that<\/p>\n
the applicant’s hotel was only a restaurant approved by<\/p>\n
Ministry of Tourism, Government of India, but it was not a<\/p>\n
classified      restaurant       (two   star    and    above)    as    required<\/p>\n
under    Rule      13(3).     Feeling      aggrieved,         the     applicant<\/p>\n
initiated     contempt      proceedings.       The    High    Court    on   being<\/p>\n
informed that a new Excise Commissioner had taken charge,<\/p>\n
granted an opportunity to the new incumbent to reconsider<\/p>\n
the matter and pass a fresh order by 22.2.2002. At that<\/p>\n
stage, by notification dated 20.2.2002, the Foreign Liquor
\n                                                                             5<\/span><\/p>\n
Rules   were    amended   by    foreign      Liquor   (Amendment)      Rules,<\/p>\n
2002, with retrospective effect from 1.7.2001. By the said<\/p>\n
amendment, the last proviso under sub-Rule (3) of Rule 13<\/p>\n
was substituted by the following proviso:<\/p>\n
             “Provided that no new            licences   under      this
\n             Rule shall be issued.”\n<\/p>\n
\nThe notification contained the following explanatory note<\/p>\n
to indicate the purpose of the amendment:\n<\/p>\n<\/p>\n
             “Government have decided as its policy not
\n             to grant any new FL-3 Hotel (Restaurant)
\n             Licences and also decided not to renew any
\n             defunct licences of the above category with
\n             effect from 1.7.2001 until further orders.
\n             In order to carry out the above decision,
\n             necessary amendments have to be made in the
\n             relevant rules”\n<\/p><\/blockquote>\n
On the same date, i.e. 20.2.2002, the Excise Commissioner<\/p>\n
considered      the   application     of     the   applicant     and    again<\/p>\n
rejected    the   request      for   grant    of   licence     in    view   of<\/p>\n
proviso    to   the   amended    rule,     prohibiting    grant        of   new<\/p>\n
licences.\n<\/p>\n<\/p>\n
5.   The applicant challenged the amendment to the Rule and<\/p>\n
the consequential rejection of its application in O.P. No.<\/p>\n
7112 of 2002. The said writ petition (along with other writ<\/p>\n
petitions and writ appeals involving similar issue) were
\n                                                                                        6<\/span><\/p>\n
disposed of by the impugned order dated 16.7.2002. The High<\/p>\n
Court considered the following four grounds of challenge:<\/p>\n
(a) that the repeated rejection of the application by the<\/p>\n
Excise       department         and       the    amendment      of    the   Rules       by<\/p>\n
notification dated 20.2.2002 were unreasonable, arbitrary<\/p>\n
and    was    in     bad      faith   and       was,   therefore,     liable      to   be<\/p>\n
interfered; (b) that the proviso to Rule 13(3) was invalid<\/p>\n
as    it     was    violative         of    the    main    Rule;      (c)   that       the<\/p>\n
amendment to the Rules by notification date 20.2.2002, was<\/p>\n
bad as it was made merely get over the judgment of the High<\/p>\n
Court directing fresh consideration; and (d) that giving<\/p>\n
retrospective            effect      to    the    Rules   was    beyond     the     rule<\/p>\n
making power of the State Government under the Act. The<\/p>\n
High Court rejected the ground (a),(b) and (c) and upheld<\/p>\n
the validity of the amendment. It however accepted ground<\/p>\n
(d) and declared that the retrospective effect given to the<\/p>\n
last    proviso          to   Rule    13(3)      added    by   notification        dated<\/p>\n
20.2.2002          was     illegal        and    unenforceable        and   that       the<\/p>\n
amendment would be effective only prospectively from the<\/p>\n
date of issue, that is with effect from 20.2.2002. As a<\/p>\n
consequence, the court directed the excise authorities to<\/p>\n
consider       the       application        dated      19.12.2001      (preceded        by<\/p>\n
application         dated      11.12.2000)        submitted      by   the   applicant<\/p>\n
(and reiterated on 19.12.2001) on the basis of the rules as
\n                                                                              7<\/span><\/p>\n
were operative as on 19.12.2001. In other words, the High<\/p>\n
Court held that the application had to be considered with<\/p>\n
reference     to    the    rules    as    they    existed   on   the   date   of<\/p>\n
application and not on the date of consideration of the<\/p>\n
application.\n<\/p>\n<\/p>\n
6.    The State has challenged the said judgment rendered in<\/p>\n
the case of the applicant and other similar matters in the<\/p>\n
first batch of appeals (CA Nos. 983 to 990 of 2003). The<\/p>\n
State has accepted the finding of the High Court that the<\/p>\n
retrospective operation of the rules is bad and that the<\/p>\n
amendment should be given effect only prospectively. But it<\/p>\n
is aggrieved by the direction that the applications filed<\/p>\n
by the applicants for FL-3 licences should be considered on<\/p>\n
the   basis    of    the    rules    as    they    stood    on   the   date   of<\/p>\n
application. It is submitted by the State that the Court<\/p>\n
ought to have directed the applications for FL-3 licences<\/p>\n
to be considered with reference to the rules in force when<\/p>\n
the application was considered.\n<\/p>\n<\/p>\n
7.    The     applicant,      as    also     other    restaurateurs      whose<\/p>\n
applications for FL-3 licences made in the years 2000 and<\/p>\n
2001 were also rejected, have challenged the decision of<\/p>\n
the High Court upholding the validity of the amendment and
\n                                                                   8<\/span><\/p>\n
non-grant of licence in CA No. 998 of 2003 and CA Nos. 999-<\/p>\n
1003 of 2003.\n<\/p>\n<\/p>\n
8.     Two issues arise for consideration on the contentions<\/p>\n
urged:\n<\/p>\n
     (i)    Whether an application for grant of FL-3 Licence
\n            should be considered with reference to the Rules
\n            as they existed when the application was made or
\n            in accordance with the Rules in force on the date
\n            of consideration?\n<\/p><\/blockquote>\n
     (ii)   Whether the amendment to Rule 13(3) of Foreign
\n            Liquor   Rules   substituting   the   last   proviso   is
\n            valid?\n<\/p><\/blockquote>\n
Re : Question (i)<\/p>\n
9.     This question is directly covered by the decision of<\/p>\n
this Court in Kuldeep Singh v. Govt. of NCT of Delhi<\/a> (2006)<\/p>\n
5 SCC 702 relating to grant of licences for sale of Indian<\/p>\n
made foreign liquor. This Court held:\n<\/p>\n<\/p>\n
            “It is not in dispute that the State
\n            received a large number of applications. It
\n            was    required     to     process    all     the
\n            applications.     While      processing      such
\n            applications, inspections of the proposed
\n            sites were to be carried out and the
\n            contents   thereof     were   required    to   be
\n            verified.   For    the    said    purpose,    the
\n            applications were required to be strictly
\n            scrutinized. Unless, therefore, an accrued
\n            or vested right had been derived by the
\n                                                                       9<\/span><\/p>\n
               Appellants, the policy decision could have
\n               been changed. What would be an acquired or
\n               accrued right in the present situation is
\n               the question.\n<\/p><\/blockquote>\n
                       x x x x                    x x x x<\/p>\n
               In case of this nature where the State has
\n               the exclusive privilege and the citizen has
\n               no fundamental right to carry on business in
\n               liquor, in our opinion the policy which
\n               would be applicable is the one which is
\n               prevalent on the date of grant and not the
\n               one, on which the application had been
\n               filed. If a policy decision had been taken
\n               on 16.9.2005 not to grant L-52 licence, no
\n               licence could have been granted after the
\n               said date.\n<\/p><\/blockquote>\n
10.   We may in this context refer to some earlier decision<\/p>\n
laying down the principle that applications for licences<\/p>\n
have to be considered with reference to the law prevailing<\/p>\n
on the date of consideration.\n<\/p>\n
10.1)     In State of Tamil Nadu v. Hind Stone & Ors.<\/a> (1981<\/p>\n
(2)     SCC    205),    this     Court   considered   the   validity   of<\/p>\n
government action in keeping applications pending for long<\/p>\n
and then rejecting them by applying a rule subsequently<\/p>\n
made. This Court while holding that such action is not open<\/p>\n
to challenge observed:\n<\/p>\n<\/p>\n
              “The submission was that it was not open to
\n              the Government to keep applications for the
\n              grant of leases and applications for renewal
\n              pending for a long time and then to reject
\n                                                                  10<\/span><\/p>\n
        them on the basis of Rule 8C notwithstanding
\n        the fact that the applications had been made
\n        long prior to the date on which Rule 8C came
\n        into force. While it is true that such
\n        applications should be dealt with within a
\n        reasonable time, it cannot on that account be
\n        said that the right to have an application
\n        disposed of in a reasonable time clothes an
\n        applicant for a lease with a right to have the
\n        application disposed of on the basis of the
\n        rules in force at the time of the making of
\n        the application. No one has a vested right to
\n        the grant or renewal of a lease and none can
\n        claim a vested right to have an application
\n        for the grant or renewal of a lease dealt with
\n        in a particular way, by applying particular
\n        provisions. In the absence of any vested
\n        rights in anyone, an application for a lease
\n        has necessarily to be dealt with according to
\n        the rules in force on the date of the disposal
\n        of the application despite the fact that there
\n        is a long delay since the making of the
\n        application”.\n<\/p><\/blockquote>\n
10.2)     We may next refer to the decision in Union of<\/p>\n
India & Ors. V. Indian Charge Chrome & Anr.<\/a> (1999) 7 SCC<\/p>\n
314 wherein this Court held:\n<\/p>\n<\/p>\n
          “Mere   making    of  an    application  for
\n          registration does not confer any vested
\n          right on the applicant. The application has
\n          to be decided in accordance with the law
\n          applicable   on   the  date   on   which the
\n          authority   granting  the   registration  is
\n          called upon to apply its mind to the prayer
\n          for registration.”\n<\/p>\n<\/p>\n
11.       The   applicant   contended   that   it   had   a   vested<\/p>\n
right because of the several time-bound orders of the High<\/p>\n
Court and those orders were deliberately floated by the
\n                                                                11<\/span><\/p>\n
Excise authorities. An identical contention was rejected by<\/p>\n
this Court while considering the issue    with   reference      to<\/p>\n
sanction of a licence under the Building Rules, in Howrah<\/p>\n
Municipal Corporation v. Ganges Rope Co.Ltd.<\/a> (2004 (1) SCC<\/p>\n
663). This Court held:\n<\/p>\n
          “Neither the provisions of the Act nor general
\n          law creates any vested right, as claimed by the
\n          applicant company for grant of sanction or for
\n          consideration of its application for grant of
\n          sanction, on the then existing Building Rules
\n          as were applicable on the date of application.
\n          Conceding or accepting such a so-called vested
\n          right of seeking sanction on the basis of
\n          unamended Building Rules, as in force on the
\n          date   of   application     for   sanction,   would
\n          militate against the very scheme of the Act
\n          contained in Chapter XII and the Building Rules
\n          which   intend     to    regulate    the   building
\n          activities in a local area for general public
\n          interest and convenience. It may be that the
\n          Corporation did not adhere to the time limit
\n          fixed by the court for deciding the pending
\n          applications of the company but we have no
\n          manner of doubt that the Building Rules with
\n          prohibition or restrictions on construction
\n          activities as applicable on the date of grant
\n          or refusal of sanction would govern the subject
\n          matter and not the Building Rules as they
\n          existed   on   the    date   of   application   for
\n          sanction. No discrimination can be made between
\n          a party which had approached the court for
\n          consideration of its application for sanction
\n          and obtained orders for decision of its
\n          application within a specified time and other
\n          applicants   whose     applications   are   pending
\n          without any intervention or order of the court.\n<\/p><\/blockquote>\n
               x x x x                    x x x x<\/p>\n
          The context in which the respondent Company
\n          claims a vested right for sanction and which
\n          has been accepted by the Division Bench of the
\n          High Court, is not a right in relation to
\n                                                                                        12<\/span><\/p>\n
            “ownership or possession of any property” for
\n            which the expression “vest” is generally used.
\n            What we can understand from the claim of a
\n            “vested right” set up by the respondent Company
\n            is that on the basis of the Building Rules, as
\n            applicable to their case on the date of making
\n            an application for sanction and the fixed
\n            period           allotted                   by    the   Court   for   its
\n            consideration,                           it   had   a   “legitimate”   or
\n            “settled expectation” to obtain the sanction.
\n            In   our            considered                 opinion,   such   “settled
\n            expectation”, if any, did not create any vested
\n            right to obtain sanction. True it is, that the
\n            respondent Company which can have no control
\n            over the manner of processing of application
\n            for sanction by the Corporation cannot be
\n            blamed for delay but during pendency of its
\n            application                     for         sanction,    if   the   State
\n            Government, in exercise of its rule-making
\n            power, amended the Building Rules and imposed
\n            restrictions on the heights of buildings on
\n            G.T. Road and other wards, such “settled
\n            expectation” has been rendered impossible of
\n            fulfilment due to change in law. The claim
\n            based on the alleged “vested right” or “settled
\n            expectation” cannot be set up against statutory
\n            provisions which were brought into force by the
\n            State Government by amending the Building
\n            Rules………………………………”\n<\/p><\/blockquote>\n
12.   Where the Rule require grant of a licence subject to<\/p>\n
fulfillment     of     certain       eligibility          criteria       either         to<\/p>\n
safeguard    public      interest       or    to    maintain       efficiency           in<\/p>\n
administration, it follows that the application for licence<\/p>\n
would require consideration and examination as to whether<\/p>\n
the eligibility conditions have been fulfilled or whether<\/p>\n
grant of further licences is in public interest. Where the<\/p>\n
applicant for licence does not have a vested interest for<\/p>\n
grant of    licence      and    where      grant     of    licence      depends         on
\n                                                                             13<\/span><\/p>\n
various    factors        or   eligibility        criteria       and    public<\/p>\n
interest, the consideration should be with reference to the<\/p>\n
law applicable on the date when the authority considers<\/p>\n
applications for grant of licences and not with reference<\/p>\n
to the date of application.\n<\/p>\n<\/p>\n
13.    The applicant submitted that it had originally filed<\/p>\n
an    application    on    11.12.2000       and    in    pursuance     of   the<\/p>\n
decision of the High Court on 14.12.2001, it submitted an<\/p>\n
application    on     19.12.2001        and       that    application       was<\/p>\n
considered    and   disposed     of   on    27.12.2001.        The   applicant<\/p>\n
contended that even if the principle laid down in Kuldeep<\/p>\n
Singh was applied, the application having been considered<\/p>\n
and disposed of by the concerned authority on 27.12.2001,<\/p>\n
the law in force on that day ought to have been applied.<\/p>\n
The applicant further contended that the amendment to the<\/p>\n
rules which came into effect only on 20.2.2002, was not<\/p>\n
applicable    on    27.12.2001    and      therefore     the    rejection    on<\/p>\n
27.12.2001 was bad and consequently the impugned order of<\/p>\n
the High Court may be construed as requiring the authority<\/p>\n
to decide the matter as on 27.12.2001. We find that the<\/p>\n
said contention does not have any merit. It is true that<\/p>\n
the application was given on 19.12.2001. It is true that<\/p>\n
the application was considered and rejected on 27.12.2001
\n                                                                                    14<\/span><\/p>\n
on a ground which may not be sound. It is also true that<\/p>\n
the     amendment      to    the    rules     which     was     introduced          by<\/p>\n
notification dated 20.2.2002 was not in force or effect on<\/p>\n
27.12.2001. But the said order dated 27.12.2001 was neither<\/p>\n
challenged nor set aside by the High Court. The applicant<\/p>\n
chose    to    file    a    contempt    application      alleging       that       the<\/p>\n
excise        authorities       had     disobeyed        the        order     dated<\/p>\n
14.12.2001. In the contempt case, the High Court made an<\/p>\n
order on 12.2.2002 that the new Excise Commissioner should<\/p>\n
pass    an     order   on     the     application.      Therefore       the       only<\/p>\n
question       is   whether     the     order     passed       by    the     Excise<\/p>\n
Commissioner on 20.2.2002 was in accordance with the Rules<\/p>\n
as they stood on 20.2.2002. Under the amended rules, no new<\/p>\n
FL-3 licence could be issued. Consequently, the rejection<\/p>\n
of     the    application      by     order     dated    20.2.2002          was     in<\/p>\n
accordance with the rules and cannot be faulted.<\/p>\n
14.    Learned      counsel     appearing       for     the    applicant          next<\/p>\n
contended that the decision in Kuldeep Singh was not with<\/p>\n
reference to any statutory rules, but with reference to a<\/p>\n
policy of the executive and therefore inapplicable. We find<\/p>\n
no force in this argument. It is true that in that case<\/p>\n
there were no statutory rules and what was considered was<\/p>\n
with reference to a policy. But the ratio of the decision<\/p>\n
is that where licence sought related to the business of
\n                                                                                15<\/span><\/p>\n
liquor,   as     the    State     has    exclusive      privilege       and    its<\/p>\n
citizens had no fundamental right to carry on business in<\/p>\n
liquor, there was no vested right in any applicant to claim<\/p>\n
a FL-3 licence and all applications should be considered<\/p>\n
with reference to the law prevailing as on the date of<\/p>\n
consideration      and     not    with    reference       to     the    date   of<\/p>\n
application.      Whether    the    issue       relates   to     amendment     to<\/p>\n
Rules or change in policy, there will be no difference in<\/p>\n
principle. Further the legal position is no different even<\/p>\n
where the matter is governed by statutory rules, is evident<\/p>\n
from    the    decisions     in    Hind    Stone       (supra)    and    Howrah<\/p>\n
Municipal Corporation (supra).\n<\/p>\n<\/p>\n
15.    Having regard to the fact that the State has exclusive<\/p>\n
privilege of manufacture and sale of liquor, and no citizen<\/p>\n
has a fundamental right to carry on trade or business in<\/p>\n
liquor, the applicant did not have a vested right to get a<\/p>\n
licence. Where there is no vested right, the application<\/p>\n
for     licence        requires     verification,          inspection          and<\/p>\n
processing. In such circumstances it has to be held that<\/p>\n
the consideration of application of FL-3 licence should be<\/p>\n
only with reference to the rules\/law prevailing or in force<\/p>\n
on the    date    of    consideration      of    the    application      by    the<\/p>\n
excise authorities, with reference to the law and not as on<\/p>\n
the date of application. Consequently the direction by the
\n                                                                              16<\/span><\/p>\n
High    Court    that    the   application    for      licence      should    be<\/p>\n
considered with reference to the Rules as they existed on<\/p>\n
the date of application cannot be sustained.<\/p>\n
Re: Question (ii)<\/p>\n
16.    The applicants for licence submitted that Rule 13(3)<\/p>\n
contemplates FL-3 licences being granted on fulfillment of<\/p>\n
the    conditions      stipulated    therein;     and    the    newly      added<\/p>\n
proviso, by barring grant of new licence had the effect of<\/p>\n
nullifying the main provision itself. It was contended that<\/p>\n
the proviso to Rule 13(3) added by way of amendment on<\/p>\n
20.2.2002 was null and void as it went beyond the main<\/p>\n
provision in Rule 13(3) and nullified the main provision<\/p>\n
contained in Rule 13(3).\n<\/p>\n<\/p>\n
17.    Rule    13(3)    provides    for   grant   of    licences      to    sell<\/p>\n
foreign liquor in Hotels (Restaurants). It contemplates the<\/p>\n
Excise Commissioner issuing licences under the orders of<\/p>\n
the    State    Government     in   the    interest     of     promotion      of<\/p>\n
tourism in the State, to hotels and restaurants conforming<\/p>\n
to standards specified therein. It also provides for the<\/p>\n
renewal   of    such    licences.    The   substitution        of    the    last<\/p>\n
proviso to Rule 13(3) by the notification dated 20.2.2002<\/p>\n
provided that no new licences under the said Rule shall be
\n                                                                               17<\/span><\/p>\n
issued. The proviso does not nullify the licences already<\/p>\n
granted. Nor does it interfere with renewal of the existing<\/p>\n
licences. It only prohibits grant of further licences. The<\/p>\n
issue of such licences was to promote tourism in the State.<\/p>\n
The   promotion     of   tourism        should     be     balanced   with     the<\/p>\n
general public interest. If on account of the fact that<\/p>\n
sufficient licences had already been granted or in public<\/p>\n
interest, the State takes a policy decision not to grant<\/p>\n
further licences, it cannot be said to defeat the Rules. It<\/p>\n
merely gives effect to the policy of the State not to grant<\/p>\n
fresh licences until further orders. This is evident from<\/p>\n
the explanatory note to the amendment dated 20.2.2002. The<\/p>\n
introduction of the proviso enabled the State to assess the<\/p>\n
situation and reframe the excise policy. It was submitted<\/p>\n
on behalf of the State Government that Rule 13(3) was again<\/p>\n
amended     with   effect    from       1.4.2002     to     implement    a    new<\/p>\n
policy. By the said amendment, the minimum eligibility for<\/p>\n
licence     was    increased      from    Two-star        categorization      to<\/p>\n
Three-Star categorization and the ban on issue of fresh<\/p>\n
licences    was    removed   by    deleting       the     proviso    which    was<\/p>\n
inserted by the amendment dated 20.2.2002. It was contended<\/p>\n
that the amendments merely implemented the policies of the<\/p>\n
government from time to time. There is considerable force<\/p>\n
in    the   contention      of    the    State.     If     the   State   on    a
\n                                                                                18<\/span><\/p>\n
periodical re-assessment of policy changed the policy, it<\/p>\n
may amend the Rules by adding, modifying or omitting any<\/p>\n
rule, to give effect to the policy. If the policy is not<\/p>\n
open to challenge, the amendments to implement the policy<\/p>\n
are also not open to challenge. When the amendment was made<\/p>\n
on 20.2.2002, the object of the newly added proviso was to<\/p>\n
stop    the     grant      of    fresh    licences    until     a     policy   was<\/p>\n
finalized. A proviso may either qualify or except certain<\/p>\n
provisions from the main provision; or it can change the<\/p>\n
very concept of the intendment of the main provision by<\/p>\n
incorporating certain mandatory conditions to be fulfilled;<\/p>\n
or it can temporarily suspend the operation of the main<\/p>\n
provision. Ultimately the proviso has to be construed upon<\/p>\n
its    terms.    Merely         because   it   suspends    or   stops    further<\/p>\n
operation       of   the    main     provision,      the   proviso      does   not<\/p>\n
become    invalid.         The    challenge     to   the    validity      of   the<\/p>\n
proviso is therefore rejected.\n<\/p>\n<\/p>\n
18.    In view of the above, the appeals filed by the State<\/p>\n
are allowed in part and the appeals filed by the applicants<\/p>\n
for    licences      are        dismissed,     subject     to   the    following<\/p>\n
clarifications:\n<\/p>\n
  (i)         If any licences have been granted or regularized<\/p>\n
              in the case of any of the applicants during the
\n                                                                 19<\/span><\/p>\n
          pendency of this litigation, on the basis of any<\/p>\n
          further amendments to the Rules, the same will<\/p>\n
          not be affected by this decision;\n<\/p>\n
  (ii)    If any licence has been granted in pursuance of<\/p>\n
          any   interim   order,   the   licence   shall   continue<\/p>\n
          till the expiry of the current excise year for<\/p>\n
          which the licence has been granted.\n<\/p>\n
  (iii)   This decision will not come in the way of any<\/p>\n
          fresh application being made in accordance with<\/p>\n
          law   or   consideration       thereof   by   the   State<\/p>\n
          Government.\n<\/p>\n<\/p>\n
                                     ______________________J.\n<\/p>\n
                                      (R. V. RAVEENDRAN)<\/p>\n
                                      _____________________J.\n<\/p>\n
                                     (SURINDER SINGH NIJJAR)
\nNew Delhi;\n<\/p>\n
January 13, 2010.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India State Of Kerala & Anr vs M\/S. B. Six Holiday Resorts (P) … on 13 January, 2010 Author: R Raveendran Bench: R.V. Raveendran, Surinder Singh Nijjar Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 983-990 OF 2003 STATE OF KERALA & ANR. … APPELLANTS Vs. B. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-111993","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nState Of Kerala & Anr vs M\/S. B. 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