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2016 DIGILAW 873 (KER)

Hotel Elegance v. State of Kerala

2016-10-18

P.B.SURESH KUMAR

body2016
JUDGMENT : P.B. Suresh Kumar, J. The petitioner is a firm engaged in running a hotel. The petitioner firm holds a Beer and Wine Parlour licence in Form No. FL-11 of the Foreign Liquor Rules ("the Rules"), framed under the Abkari Act ("the Act"). Exhibit P1 is the licence in favour the petitioner. During June 2016, a crime was registered against the partners of the petitioner firm and others under Section 56(b) of the Act alleging that the petitioner firm had sold three bottles of beer to a person for consumption outside the hotel contrary to the condition imposed on them in that connection as per the terms of the licence. Exhibit P3 is the occurrence report in respect of the said crime. According to the petitioner, there is no prohibition in selling beer under the said licence for consumption outside the premises of the hotel and therefore, the authorities under the Act cannot interdict the same. The petitioner, therefore, seeks directions to the respondents to refrain from interdicting the petitioner from selling beer for consumption outside the premises of their hotel. 2. A statement has been filed on behalf of respondents. The stand taken in the statement is that a person holding licence in Form No.FL-11 of the Rules is not entitled to sell beer for consumption outside the premises of his hotel. 3. Heard the learned Senior Counsel for the petitioner as also the learned Senior Government Pleader. 4. The learned Senior Counsel for the petitioner asserted that the petitioner is not prohibited from selling beer for consumption outside the premises of their hotel under the licence issued to them. Per contra, the learned Senior Government Pleader asserted that condition No.2 in Form No. FL-11 licence prohibits such sale. 5. It is beyond dispute that the conditions imposed on the licensees as per the terms of the licence issued to them under the Rules are statutory in nature and its breach would invite penal consequences. It is fundamental that penal statutes must be strictly construed and if there is a reasonable interpretation which will avoid the penalty in a particular case, the courts are bound to adopt that construction. Licence in Form No.FL-11 is issued as provided for under Rule 13 (11) of the Rules. It is fundamental that penal statutes must be strictly construed and if there is a reasonable interpretation which will avoid the penalty in a particular case, the courts are bound to adopt that construction. Licence in Form No.FL-11 is issued as provided for under Rule 13 (11) of the Rules. The said Rule reads thus; "13(11) Foreign Liquor 11 Beer/Wine Parlour Licence - Beer/Wine Parlour licences in Form FL 11 shall be issued by the Commissioner of Excise under orders of Government to the hotels, motels, resorts and catering establishments owned and/or run by Kerala Tourism Development Corporation limited and to hotels having classification of three star, four star, five star and five star deluxe, heritage, heritage grand or heritage classic in such places where FL3 licence can be granted. FL-11 licence shall also be granted to the restaurants classified by Department of Tourism Government of Kerala, restaurants approved by Ministry of Tourism Government of India and hotels having one and two star classification of Ministry of Tourism, Government of India, in tourist centres approved by the Government in Taxes Department. The annual rental shall be Rs.4,00,000/- (rupees four lakhs only) for each Beer/Wine Parlour. The licensee shall procure Beer/Wine only from the FL9 licensee in the State. Beer/Wine shall be served to the public only in a separate room meant for the purpose. The maximum strength at which Beer/Wine shall be sold are at 6% v/v and 12% v/v respectively. Distance limit subscribed under sub-rule (1) and sub-rule (3) shall apply to this licenses. Provided that the holder of an FL11 licence may serve beer/wine along with meals by the side of swimming pools and in the lawns and roof gardens of the hotel if he obtains a special permit for the purpose, from the Commissioner of Excise, on payment of an additional annual rental of Rs.50,000/- (Rupees fifty thousand only) or such additional annual rental as may be prescribed by the Government from time to time. Provided further that the holder of an FL11 licence may serve beer or wine in another room within the premises specified in the licence, in addition to the separate room meant for the purpose, if he obtains a special permit for the said purpose from the Commissioner of Excise, on payment of an additional annual rental of Rs.20,000 (Rupees twenty thousand only), subject to the condition that the licensee shall maintain a separate room exclusively for the use of families and others where no beer or wine shall be served." Rule 13 (11) prohibits the licensees from serving beer for consumption outside the separate room meant for the said purpose. The rule, however, permits the licensees to serve beer along with meals by the side of swimming pools and in the lawns and roof gardens of the hotel, if the licensees obtain a special permit for said the purpose on payment of an additional annual rental. The rule also permits the licensees to serve beer in another room within the premises specified in the licence, in addition to the separate room meant for the purpose, if the licensees obtain a special permit for the said purpose also on payment of an additional annual rental. In other words, beer sold under the licence can be served for consumption only in the separate room meant for the purpose and other places referred to in the rules on payment of additional annual rental. Exhibit P1 is the licence issued to the petitioner. Exhibit P1 licence specifies the boundaries of the room meant for serving beer for consumption. Condition No.2 in Ext.P1 licence issued in Form No. FL-11 reads thus: "2. The sale of beer in quantity less than one bottle at a time to a person is prohibited. The beer/wine sold under this licence shall be permitted to be consumed only within the premises specified in the licence." The second part of the said condition is that the beer sold under the licence shall be permitted to be consumed only within the premises specified in the licence. In other words, the beer sold under the licence shall not be permitted to be consumed outside the premises specified in the licence. In other words, the beer sold under the licence shall not be permitted to be consumed outside the premises specified in the licence. If the said condition is understood in the light of Rule 11, it is evident that the expression "premises specified in the licence" refers to the premises where the licensee is permitted to serve beer. In other words, the condition prohibits the licensees from permitting consumption of beer in any premises other than the premises where the licensees are permitted to serve beer. The emphasis in the condition is not on the sale, but on the permission for consumption. The said condition, according to me, cannot be construed as one intended to prohibit sale of beer for consumption outside the premises of the hotel, for, permission of the licensee is not required for consumption of beer outside the premises of the hotel. I take this view also for the reason that Rule 13 (3B) of the Rules dealing with Foreign Liquor 3 Hotel (Restaurant) Licence (Licence in Form No.FL-3) provides categorically that no liquor shall be sold under the said licence for removal outside the hotel. The said Rule reads thus; "13(3B) : No liquor shall be sold under FL3 licences for removal outside the hotel to anyone including residents of the hotel : Provided that the liquor may be sold and served to residents of the hotels in the rooms where they reside or in the restaurants wherein they partake food, if such hotels have restaurants exclusively for the use of families and others where no liquor shall be served : Provided further that the holder of an FL3 licence may serve liquor along with meals by the side of swimming pools and in the lawns and roof gardens of the hotel if he obtains a special permit for the purpose from the Commissioner of Excise, on payment of additional annual rental of Rs.50,000 (Rupees fifty thousand only) Provided also that for serving liquor at restaurants to persons other than residents, the licensee shall pay an additional annual fee of Rs.30,000 (Rupees Thirty thousand only)" A corresponding condition is also incorporated in Form No.FL-3 to give effect to the said provision contained in Rule 13(3B), which reads thus: "2. No liquor shall be sold under this licence for removal outside the hotel to anyone including residents of the hotel. No liquor shall be sold under this licence for removal outside the hotel to anyone including residents of the hotel. Provided that liquor may be sold and served to resident of the hotel in the rooms wherein they reside or in the restaurants where they partake food, by the employees of the bar. Provided that the hotel can serve liquor along with meals by the side of Swimming Pools, lawns and the roof gardens of the hotel on obtaining special annual permit from Excise Commissioner. Provided further that such hotels should have an exclusive restaurant for the use of families and others where no liquor shall be served. Provided also that the licensee can serve liquor at restaurants to persons other than residents on payment of Rs.25,000/- (Rupees twenty five thousand only) per year. Provided also that the licensee can serve liquor at restaurants to persons other than residents on payment of Rs.30,000 (Rupees thirty thousand only) per year." When the Rules contain a specific provision prohibiting the licensees from permitting removal of liquor outside the Hotel, with corresponding condition in the form of licence in relation to the licence issued in Form No. FL-3, in the absence of such a provision in relation to licences issued in Form No. FL-11, it is only reasonable to think that the rule makers have not intended to prohibit sale of beer under the said licence for consumption outside the hotel. 6. The learned Senior Government Pleader, relying on Rule 13 (12) of the Rules contended that the privilege for sale of beer in bottles, without permission for consumption in the premises, is reserved by the Government only to the Kerala State Co-operative Consumer Federation and an interpretation of the Rules as contended by the petitioner would make the said grant meaningless. True, the licensee in Form No. FL-12 is entitled to sell beer in bottles without permission for consumption in the premises. Merely for the reason that the Rules provide for a separate licence for sale of beer in bottles for consumption outside the premises of the licensee, it cannot be said that the licensees in Form No. FL-11 are not entitled to sell beer in bottles for consumption outside the premises of their hotel. 7. Merely for the reason that the Rules provide for a separate licence for sale of beer in bottles for consumption outside the premises of the licensee, it cannot be said that the licensees in Form No. FL-11 are not entitled to sell beer in bottles for consumption outside the premises of their hotel. 7. For the foregoing reasons, the writ petition is allowed and it is declared that there is no prohibition in selling beer for consumption outside the premises of the licensees under licence issued in Form No. FL-11 of the Rules. Consequently, the respondents are directed to refrain from interfering with the sale of beer in bottles by the petitioner for consumption outside the hotel. It is, however, made clear that this judgment will not preclude the State from introducing by way of amendment to the Rules a provision similar to Rule 13 (3B) in relation to licence issued in Form No. FL-11 also.