State of Kerala v. Sahadevan — 1999 DIGILAW 560 (KER)

Judgment :- A.R. Lakshmanan, J. The State is the appellant in this Writ Appeal. The appeal is directed against the judgment in O.P. No. 13827 of 1999 dated 12.8.1999 by which the learned single judge set aside Ext. P5 order and directed the Government to reconsider the matter treating the respondent's restaurant as approved, which, according to the learned judge, will come within the category of classified restaurant. 2. The first respondent herein filed the Original Petition seeking to quash Ext. P5 order and to declare that the intention of the legislature in amending R.13 sub-clause (3) of the Foreign Liquor Rules as per S.R.O. No. 218/97 published in Kerala Gazette Extraordinary No. 389 dated 31.3.1997 is to include 'approved restaurant' as approved restaurant is eligible to get Bar licence and insertion of the word 'classified restaurant' can only be a mistake. 3.The first respondent started a restaurant under the name and style 'Govardhana Restaurant' at Malampuzhain Palaghat District with the prime intention of catering the needs of tourists, as Malampuzha is one of the important tourists centres in Kerala. With this object in view, he has made available all the required facilities for the restaurant. He made an application before the Commissioner of Excise, requesting to issue a Bar licence to his restaurant as the customers in the restaurant are mostly people coming from outside Kerala and from foreign countries. The application is marked as Ext. PI in the Original Petition. On the basis of Ext. PI, the Commissioner of Excise made enquiries and submitted a report to the Government stating that the restaurant is having facilities to cater the needs of tourists coming from different parts of India and foreign countries, that such a restaurant is necessary for the development of tourism and that it is necessary to start a Bar, which is necessary to cater the needs of tourists. It is also the case of the first respondent that the restaurant satisfied all the guidelines formulated by the Government of India for promoting tourism. The guidelines provides for, approving restaurants if such restaurants are having the standards prescribed under the guidelines. As per the Scheme, an application has to be made before the Regional Director if a particular restaurant wishes to get approval. The application so made will be enquired into through the machinery set up for that purpose. The guidelines provides for, approving restaurants if such restaurants are having the standards prescribed under the guidelines. As per the Scheme, an application has to be made before the Regional Director if a particular restaurant wishes to get approval. The application so made will be enquired into through the machinery set up for that purpose. A classification committee is also formed in several regions to conduct necessary inspection, consisting of the representatives of the Government, such as the Director of Tourism, the Principal, Catering Institute, Thiruvananthapuram, representative of Hotel & Restaurant Association of the region concerned, representative of travel agencies, etc., and with the Regional Director as Chairman. According to the first respondent, there are only two restaurants in Kerala approved by the Regional Director, viz., Go vardhana Restaurant, of which the first respondent is the Managing Director, and Pandal Restaurant, Ernakulam. Copy of the approval order issued by the Chairman, HRACC (SOUTH) and Regional Director, Regional Tourist Office, Chennai, is produced and marked as Ext. P2. Counsel for the first respondent submitted that in fact the first respondent submitted a copy of Ext. P2 along with his application, Ext. PI. It appears that the Commissioner of Excise had also sought a clarification in the matter from the Regional Director, Regional Tourist Office Chennai, who, in turn, sent a reply dated 31.12.1998 stating that star classifications are issued only for hotels and not for restaurants as per the guidelines formulated by the Government of India and as such, the question does not arise for any restaurant to be classified within the existing guidelines of the Government of India. It is further stated that approved restaurants recommended by the Ministry of Tourism, Government of India may be treated as restaurant recommended for the tourists. The said communication is marked as Ext. P3 and the guidelines issued by the Government of India is marked as Ext. P4 in the Original Petition. However the first respondent received an order dated 2.6.1999 from the State of Kerala stating that since Govardhana Restaurant is not a 'classified restaurant'. but only an' approved restaurant'. bar licence cannot be issued to the restaurant as per the existing rules and hence the application was rejected. The first respondent, thereupon, filed the Writ Petition before this Court stating that the only objection raised in Ext. but only an' approved restaurant'. bar licence cannot be issued to the restaurant as per the existing rules and hence the application was rejected. The first respondent, thereupon, filed the Writ Petition before this Court stating that the only objection raised in Ext. P5 is that Go vardhana Restaurant is not a classified restaurant, but only an approved restaurant and that Ext. P3 is a complete answer to the aforesaid objection, since there cannot be any classified restaurant as per the guidelines formulated either by the Government of India or the Government of Kerala and that the effect of R.13(3) is to provide such facility to approved restaurants. 4. A counter affidavit was filed by the State in the Original Petition. According to them, under R.13(3) of the Foreign Liquor Rules, an FL3 licence may be issued by the Excise Commissioner under orders of Government in the interest of promotion of tourism in the State to Hotels having 3 star rating or above, heritage or resort hotels as well as classified restaurants and hotels run by the Kerala Tourism Development Corporation having two star or higher classification and only when these conditions are satisfied, a hotel or restaurant become entitled to an FL3 licence. It is submitted that the approval obtained by the first respondent's restaurant from the Regional Tourist Office of the Government of India is not the same as classification of the hotel and that Ext. P2 approval order itself shows that the first respondent's restaurant has not been classified and it is also not a three star hotel. It is stated further that under the existing rules only hotels having three star or higher classification, heritage and resort hotels as well as classified restaurants can be granted FL3 licence apart from hotels owned or run by K.T.D.C. or I.T.D.C. having two star and higher classifications and since the first respondent's restaurant is not classified, it is not entitled to an FL3 licence. 5. The first respondent filed C.M.P. No. 26705 of 1999 to implead the Regional Director, Government of India, Tourist Office, Chennai and the Assistant Director, Government of India Tourist Office, Willingdon Island, Kochi as additional 3rd and 4th respondents, which was allowed on 1.7.1999. 5. The first respondent filed C.M.P. No. 26705 of 1999 to implead the Regional Director, Government of India, Tourist Office, Chennai and the Assistant Director, Government of India Tourist Office, Willingdon Island, Kochi as additional 3rd and 4th respondents, which was allowed on 1.7.1999. A statement was also filed by Counsel for the impleaded parties and as per the statement, there are only two restaurants approved by the Ministry of Tourism in Kerala and they are Pandal Restaurant, Ernakulam and Govardhana Restaurant in Malampuzha. 6. A reply affidavit was filed by the petitioner in the Writ Petition denying allegations contained in the counter affidavit filed by the State. 7. J.B. Koshy,J. by judgment dated 12.8.1999 disposed of the Original Pctition. The learned single judge held as follows: "The word used is 'classified' restaurants. There is no restaurant as classified restaurant. Ext. 13 issued by the Government of India, Regional Tourist Office states that the Star Classifications are issued only for the hotels and not for restaurants as per the guidelines. So the question whether one restaurant is classified or not is not existing under the guidelines of the Government of India. R.13(3) states that classified restaurants can be given bar licence. That is, apart from three star hotels or heritage or resort hotels run by the Kerala Tourism Development Corporation and India Tourism Development Corporation having two star or higher classification, there will be some restaurants coming under that part. In this connection Ext. P4 also may be looked into. Ext. P4 is the guidelines for approval of restaurants. That shows that that is issued by the Ministry of Tourism & Civil Aviation, Department of Tourism. Very strict control is made by the Tourism Department regarding approved hotels to facilitate tourism. In the counter affidavit it is stated by the respondents that it is the exclusive right of the Government to grant bar licence. There is no dispute to the above proposition. It is also stated that licence is given to hotels and restaurants as mentioned in R.13(3) to promote tourism and classified restaurants are entitled to get licence. Though it is very clearly stated that there is no classified restaurant in India, the Tourism Department also furnished the details regarding restaurants approved by the Ministry of Tourism in Kerala. It is also stated that licence is given to hotels and restaurants as mentioned in R.13(3) to promote tourism and classified restaurants are entitled to get licence. Though it is very clearly stated that there is no classified restaurant in India, the Tourism Department also furnished the details regarding restaurants approved by the Ministry of Tourism in Kerala. In the statement filed by the Tourism Department it is also stated that in the whole of Kerala there are two approved restaurants, one is Pandal Restaurant in Ernakulam and the other is petitioner's Govardhana Restaurant if Malampuzha. Therefore, if exemption is given for promotion of tourism, one can infer that petitioner's restaurant is one which will come under R.13(3) group of restaurants wherein a bar licence can be granted." The learned judge further held thus : "It is a sell settled rule of construction that a rule should be construed in such a way that it will facilitate the object of the same and in interpreting statutes the Court shall always presume that every work in the statute has a purpose and legislative intention is that every part of the statute has an effect. If 'classified' restaurants by the Tourism Department means anything otherwise than'approved restaurants' by Tourism Department, no restaurants in India will be qualified and it will end in absurd results making the words ineffective for all practical purposes." 8. Being aggrieved by the judgment of the learned single judge, the State has preferred the above appeal. We have heard Government Pleader Mr. Alexander Thomas, who reiterated the arguments advanced before the learned single judge and submitted that under R.13(3) of the Foreign Liquor Rules, licence can be granted only to classified restaurants, that the restaurant in question has not been classified by the Excise Commissioner or by the Government, that even if all the allegations of the petitioner (first respondent herein) in the Original Petition are assumed to be true, in the light of the present structure of R.13(3) of the Foreign Liquor Rules the petitioner's restaurant cannot be granted FL3 licence, that approval and classification are not one and the same, and that approval by the Government of India does not amount to classification by the Government of India or the State Government or even the Excise Commissioner. Therefore, it is submitted that the Original Petition is liable to be rejected. Therefore, it is submitted that the Original Petition is liable to be rejected. He would further submit that the reasoning of the learned single judge is faulty and incorrect According to Mr. Alexander Thomas, the expression "classified" qualifies both hotels and restaurants and when the rules envisage classified hotels and restaurants, the fact that there are no classified restaurants at present would not render the words in the statutory Rules superfluous and would not produce absurd results as pointed out by the learned single judge and it is submitted that the interpretation of R.13(3) made by the learned single judge is erroneous. 8. We have carefully considered the entire materials pi aced before us and also the judgment impugned in this appeal. We have already referred to the contention put forward by the State with regard to R.13(3) of the Foreign Liquor Rules. Under the said rule 113 licence may be issued by the Excise Commissioner under orders of Government in the interests of promotion of tourism in the State to Hotels or Restaurants conforming to me standard of 'Two Star, and higher Classifications, owned or run by the Kerala Tourism Development Corporation Ltd. and India Tourisrn Development Corporation and also to hotels having rating Three Stars and higher classifications, Heritage and Resort hotels as well as classified restaurants. Only when the above condition are satisfied, a hotel or restaurant will become eligible to get FL3 licence. 9. The very same contentions were put forward by the State in the case leading to the decision of a Division Bench of this Court, comprising of AR. Lakshmanan and S. Marimuthu, JJ., reported in State of Kerala v. Abdulla Kunhl (1998(2) KLJ 620). The learned Advocate General, who appeared in that case put forward a similar contention, that to get a licence under R.13(3) of the Rules, the applicant hotel in the private sector should necessarily have three star status and since the hotel in question was not that of three star status, it was not entitled for renewal of licence as a matter of right. Per contra, counsel for the restaurant in that appeal submitted that a Division Bench in O.P. 18951 of 1997 and batch has, after considering Rr. Band 14 of the Rules, came to the conclusion that the statutory stipulation regarding payment and collection of additional rental at the rate of Rs. Per contra, counsel for the restaurant in that appeal submitted that a Division Bench in O.P. 18951 of 1997 and batch has, after considering Rr. Band 14 of the Rules, came to the conclusion that the statutory stipulation regarding payment and collection of additional rental at the rate of Rs. 25,000/- for each year of defunction, without fixing any maximum number of years for which additional rental may be received, would show that renewal can be had without any regarding year of deduction. Counsel also referred to paragraphs 26 and 27 of the judgment in O.P. 18951 of 1997. The argument of the Advocate General under R.14 was also considered by the Division Benchin paragraphs 17,18 and 19 of the said judgment. The Advocate General submitted that under R.14, a defunct licence given to a two star hotel cannot be renewed since as per R.13, the said concession can be extended under orders of Government in the interest of promotion of tourism in the State to hotels and restaurants conforming to the standard two star and higher classification owned or run by the Kerala Tourism Development Corporation and India Tourism Development Corporation and also to hotels and restaurants having rating of three star and higher classification in the private sector, and therefore, the respondent licensee was not entitled to get his licence renewed as per R.14. While rejecting the arguments advanced by the learned Advocate General, the Bench held as follows: "18. Incur opinion, the interpretation made by learned Advocate General of the relevant Rules is not correct. The rule of literal interpretation requires that the words of a statute are first understood in their natural meaning or popular sense and phrases and sentences are considered according to their grammatical meaning, unless that leads to some absurdity or unless there is something in the context or in the object of the statute to suggest the contrary. The golden rule, according to various judgments of this Court and also of the Supreme Court, is that the words of a statute must be given their ordinary meaning. Acceptance of the argument of the learned Advocate General would amount to rewrite the proviso itself. It may not be proper for the Government now to take the view that the renewal can be had only for three star hotels. Acceptance of the argument of the learned Advocate General would amount to rewrite the proviso itself. It may not be proper for the Government now to take the view that the renewal can be had only for three star hotels. It is difficult to accept the view that under the proviso, no renewal can be had to a two star hotel and that the defunct licensees are not entitled for rearrange at all." The Bench also considered the real scope of the rules in paragraph 19 of the judgment which reads thus: "It is settled law that a licence issued earlier or renewed earlier can be cancelled only in accordance with law. It is also not correct to state that on the expiry of the period of licence, it automatically gets extinguished and it cannot be renewed later. In our view, even a time expired licence can be renewed as per the provisions contained in the proviso to R.14 and such a power to renew time expired licence is specifically conferred on the authorities as per the proviso to R.14 subject only to conditions contained therein. A plain reading of the provisions contained in the proviso to R.13(3) and R.14 would, in our view, clearly indicate that even after the expiry of the period of licence, it can be renewed by the appropriate authorities if that authority is satisfied that the conditions mentioned in the said clause as such have been complied with by the applicant. In the instant case, the respondent is ready and willing to pay the additional rental of Rs. 25,000/- for each year of defunction. As in the other cases, it is not a case of transfer. It is only a case of renewal of a defunct licence. As pointed out by us earlier, similar licences have been not only transferred but also renewed even for the current year (1998-99). as such, none of the grounds alleged in Ext P3 order refusing to renew the licence are sustainable in law. Since the licence was granted to the respondent after complying with all the legal formalities and requirements, he is entitled to get renewal of the same after complying with the conditions mentioned in the proviso to R.14." 10. as such, none of the grounds alleged in Ext P3 order refusing to renew the licence are sustainable in law. Since the licence was granted to the respondent after complying with all the legal formalities and requirements, he is entitled to get renewal of the same after complying with the conditions mentioned in the proviso to R.14." 10. It is submitted that the appeal filed by the State against the above judgment as SLP (Civil) No. 19338 of 1998 was also dismissed by the Hon'ble Supreme Court on 2.9.1999 and consequent on the dismissal of the SLP the Supreme Court has also vacated the status quo order issued earlier. 11. In our opinion the interpretation now attempted by the Government Pleader is not correct. A Court can merely interpret a provision. It cannot rewrite, recast or redesign the provision. In interpreting the provision, the exercise undertaken by the Court is to make explicit the intention of the legislature which enacted the legislation. It is not for the Court to re-frame the legislation for the very good reason that the powers to 'legislate' have to been conferred on the Court. The interpretation attempted by the State is not correct for the following reasons as well. As already noticed, the Government of India have formulated guidelines for the development of tourism in India and in compliance with that guidelines, the first respondent i n the Writ Petition has also formulated guidelines for advancement of tourism in Kerala. As a matter of fact, the Kerala Tourism Development Corporation is conducting beer parlour, etc. with the main object to cater the needs of tourists and thereby attracting tourists to Kerala. It is with the above object of promoting tourism and to attract tourists to India, which will help economical progress of the country, the Government of India formulated the guidelines with a view to take a liberal attitude in the grant of licences to start bar in important tourist centres, which is essential for the development of tourism, which is also one of the avowed objects of the State of Kerala. As already seen, the only objection raised in Ext. P5 is that the Govardhana Restaurant is not a classified restaurant, but only an approved restaurant. Ext. P3, in our view, is a complete answer to the above objection. Ext. As already seen, the only objection raised in Ext. P5 is that the Govardhana Restaurant is not a classified restaurant, but only an approved restaurant. Ext. P3, in our view, is a complete answer to the above objection. Ext. P3 certificate issued by the Regional Director, Government of India Regional Tourist Office, Chennai dated 31.12.1998 is reproduced herein: TO WHOM IT MAY CONCERN This is to certify that the Govardhana Restaurant, Rock Garden Road, Malampuzha Dam Post, Palakkad has been issued Restaurant approval vide order dated 6.11.1998 on the recommendation of the Hotels and Restaurants Classificatior committee. Southern Region under the Chairmanship of the undersigned. This is also to be noted that the Star Classifications are issued onlv for the Hotels and not for Restaurants as per the enclosed guidelines which may be seen for reference. As such, the question does not arise for any Restaurant to be classified within the existing guidelines of. Govt. of India. In view of the above, the approved Restaurants recommended by Ministry of Tourism, Govt. of India may be treated as a Restaurant recommended for the tourists. Sd/ (SHAHIR MUSTAFA NAQVI) GOVERNMENT OF INDIA REGIONAL TOURIST OFFICE 154, ANNA SALAI, CHENNAI 600002." 12. In view of the above, the approval granted by the Government of India Tourist Office, Chennai, in our opinion can only mean that the respondent is having the particular standards prescribed under the guidelines issued by the Government of India in order to cater the needs of tourists, which will certainly help attracting tourists. Therefore, the absence of "classification" to the restaurant of the first respondent cannot be taken as a ground for rejecting the bar licence. This apart, the inclusion of the words "classification" in respect of restaurants in R.13(3) of the Foreign Liquor Rules, can only be an inadvertent mistake. The word must have been "approval" because the very amendment has been inserted in terms of the guidelines issued by the Government of India was to promote tourism. Since there cannot be any classified restaurant as per the guidelines formulated either by the Government of India or by the Government of Kerala, the intention of the legislature in effecting the amendment by inserting the words "classified restaurants" can only be to grant licence to "approved restaurants". 14. Since there cannot be any classified restaurant as per the guidelines formulated either by the Government of India or by the Government of Kerala, the intention of the legislature in effecting the amendment by inserting the words "classified restaurants" can only be to grant licence to "approved restaurants". 14. As already seen, there are only two restaurants in Kerala which have approval of the Goverment of India Regional Tourist Office and that the approval has been given after conducting an inspection by a competent body as can be seen from Ext. P4. The very purpose of approval, in our view, will be defeated by giving a wrong and incorrect interpretation to the rule that bar licence can be granted on! v if the restaurant comes under the category of classified restaurant solely for the reason that such a mistake has been committed when the relevant rule was amended. It is, therefore, the duty of the authorities concerned to give effect to the real intention of the legislature in amending the rules and that can only be done by granting bar licence to approved restaurants. 15. A Division Bench comprising of AR. Lakshmanan and D. Sreedevi, JJ. in the judgment in O.P. No. 718 of 1998 has also taken the same view as in the decision reported in 1999(2) KLT 620, which was also affirmed by the Supreme Court rejecting SLP No. 17681/1998 filed against the said judgment. 16. In our opinion, there cannot be any dispute as to the eligibility of hotels and restaurants to get bar licence, provided they conform to the standards prescribed under the rules. The policy of the Goverment Js also to issue bar licence to hotels and restaurants having prescribed standards in the interest of promoting tourism. As already seen, there are no classified restaurant either in Kerala or anywhere in India. There is also no dispute that there are only two restaurants which have got approval of the Government of India Regional Tourism Office, Chennai. R.13(3) of the Foreign Liquor Rules should be read in the light of the facts stated above and in the light of the Division Bench rulings referred to above, which have been confirmed by the Supreme Court. it is fallacious to think that the legislature will mention a nonexistent category of restaurants in R.13(3) of the Rules. It is. therefore, necessary to give a meaningful interpretation. it is fallacious to think that the legislature will mention a nonexistent category of restaurants in R.13(3) of the Rules. It is. therefore, necessary to give a meaningful interpretation. When the rules says that "classified restaurants" are eligible to get bar licence and when there can be no classified restaurants anywhere in India, but only "approved restaurants" as per the guidelines issued by the Government of India, in our opinion, the words "classified" has to be read as "approved" as the rules and regulations are framed for implementing the Government policy. The authorities concerned are expected to bear this in mind while interpreting the rules. We are of the opinion that the rejection of the application of the first respondent for grant of bar licence for the sole reason that the restaurant is not a classified restaurant is not only illegal and arbitrary, but it also goes against the declared policy of the Government of India and of the Government of Kerala. 17. It is argued by the Goverment Pleader that the first respondent has no fundamental right to trade in liquor. But trade in liquor is permitted by the Government subject to the Act. Rules and regulations. Therefore, every citizen has a right to be considered for grant of licence if he complies with the statutory requirements. The question here is whether, because of an error committed in framing the rules, which also goes against the declared policy of the Government, the right of a person to be considered for grant of licence can be denied. As already stated, there is no classification as far as restaurants are concerned. In Ext. P3 it is specifically stated that star classifications are issued only for hotels and not for restaurants. That does not meant that approved restaurants are not having the facilities of hotels having star classification. The first respondent/ petitioner in the Original Petition, has furnished in Ext. P1 all the necessary details regarding the facilities available in his restaurant. On a perusal of the impugned 'order it is evident that the authorities did not even look into Ext. P1 in its proper perspective. It is also to be noted that approved restaurants are being given bar licence in all other States in India subject to the rules framed by the concerned States in that behalf. On a perusal of the impugned 'order it is evident that the authorities did not even look into Ext. P1 in its proper perspective. It is also to be noted that approved restaurants are being given bar licence in all other States in India subject to the rules framed by the concerned States in that behalf. As far as our State is concerned, there are only two approved restaurants, of which one only has applied for bar licence. 18. For the forgoing reasons, the appeal is liable to be and is hereby dismissed and the authorities, viz. the State of Kerala and the Commissioner of Excise, Thiruvananthapuram are hereby directed to consider the entire matter afresh and grant FL3 licence to Govardhana Restaurant, Malampuzha in the light of the discussion in the foregoing paragraphs. Ext. P1 application was made on 23.11.1998. Even though the petitioner in the Original Petition has made all arrangements in terms of the guidelines formulated by the Government of India and the Government of Kerala, spending nearly Rs. 1.5 crores, with a legitimate hope that the petitioner will be able to secure a bar licence, he has not been granted the licence. We see bona fides in the attempt of the petitioner/ first respondent herein and his intention to cater the needs of tourists. Therefore, respondents 1 and 2 are directed to consider the application, Ext. P1 and pass orders in accordance with law and in the light off the observations made by us in this judgment, within one month from the date of receipt of a copy of this judgment. No costs.