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2017 DIGILAW 1163 (KAR)

HOTEL ROYAL INN v. STATE OF KARNATAKA

2017-08-22

VINEET KOTHARI

body2017
ORDER : Mr. Narendra D.V.Gowda, for Mr.R.S.Ravi, Adv., for Petitioner in WP No.38772/2016 Mr.Venkatesh Murthy G.R, Adv., for Petitioner in WP Nos.30503/2016, 32412/2016 Mr.B.N.Shetty, Adv., for the Petitioner in WP Nos.32366/2016, 32367/2016, 36932/2016, 37244/2016 Mr.Vishwajith Shetty S, Adv., for Petitioner in WP Nos.39556/2016 Mr.Satish K, for Mr.M.S.Bhagwat, Adv., for Petitioner in WP No.39609/2016 Mr.M.K.Girish,Advocate for Petitioner in WP No.49685/2016 Mr.A.M.Suresh Reddy, AGA., for R1, R4 & R5 Mr.I.Gopala Krishna, Advocate for R2 & R3 in WP Nos.38772/2016, 30503/2015, 32412/2016 Mr.A.M.Suresh Reddy, AGA., for R1, R3 & R4 Mr.P.V.Chandrashekar, Advocate for R2 in WP Nos.32366/2016 Mr.A.M.Suresh Reddy, AGA., for R1, R3 & R4 Mr. I.Gopala Krishna, Advocate for R2 in WP Nos.32367/2016, 36932/2016, 37244/2016 Mr.A.M.Suresh Reddy, AGA., for R1 to R3 Mr.I.Gopala Krishna, Advocate for R4 in WP No.39556/2016 Mr.A.M.Suresh Reddy, AGA., for R2 to R4 Mr.I.Gopala Krishna, Advocate for R1 in WP No.39609/2016 Mr.A.M.Suresh Reddy, AGA., for R1 to R4 Mr.P.V.Chandrashekar, Advocate for R5 in WP No.49685/2016 1. This batch of cases giving rise to a common question are disposed of by this common order. 2. The facts illustratively are taken from WP No.38772/2016, M/s. Hotel Royal Inn Vs. State of Karnataka and others. 3. The grievance made in the present writ petition is that the respondent – Karnataka Industrial Area Development Board (‘KIADB’ for short), by its communication dated 31.01.2015 addressed to the Excise Commissioner, Bengaluru, objected to the grant of Excise Licences to the Bars and Restaurants in the Hotels constructed and developed in the industrial sites allotted by KIADB to them and upon such communication being made to them, the Deputy Commissioner of Excise, Mysuru issued the impugned Endorsement Annexure-F, dated 30.06.2016, refused to renew the Excise licence to the petitioner for the year 2016-17. The said refusal of the Deputy Commissioner has been challenged in the present petition. 4. The petitioner in this case has also challenged Annexure-H, order of KIADB dated 18.05.2016, imposing annual maintenance charges of Rs.70,106/- demanded by the respondent – KIADB for the year 2015-16, even though no mention of any statutory provisions with regard to the levy of such annual maintenance charges is referred in the communication, it is stated therein that as the hotel being constructed illegally at Site No.435-P of Hebbal Industrial Area, Mysuru, the petitioner is not only directed to close down the said Hotel, but is also directed to pay the annual maintenance charges. 5. 5. Aggrieved by the same, the petitioner has approached this Court by way of a representation. 6. Upon issuance of notice, Sri. Gopala Krishna, learned counsel has entered appearance on behalf of the respondent – KIADB. 7. Learned counsel appearing for the KIADB has urged before the Court that as per the definition of “Amenity” as given in Section 2(1) of the KIADB Act, 1966, the ‘Hotel’ is included in the definition of ‘Amenity’. It is submitted by the learned counsel that vide Notification dated 09.05.1991, it includes “Hospitals, Dispensaries, Hotels, Motels, Health and Holiday Resorts and Cinema Theatres” in the said definition. The same is quoted below for ready reference; “THE KARNATAKA INDUSTRIAL AREAS DEVELOPMENT ACT, 1966 NOTIFICATION No.CI 86 SPQ 90, Bangalore, dated 13th March, 1991 Karnataka Gazette, dated 9-5-1991 In exercise of the powers conferred by sub-section (1) of Section 2 of the Karnataka Industrial Areas Development Act, 1966 (Karnataka Act 18 of 1966), the Government of Karnataka hereby specified the following as amenities for the purpose of the said Act: They shall come into force from the date of their publication in the Official Gazette. Banks, Post Offices, Telephone and Telex Exchanges, Canteens, Fire Brigade and other service facilities including Xerox Facilities. xxxxxx xxxxxxx Hospitals, dispensaries, Hotels, Motels and Health and Holiday Resorts, Cinema Theatres.” 8. The relevant extract of the impugned communication dated 31.01.2015 addressed by the KIADB to the Commissioner of Excise Department is also quoted below for ready reference. “No.Ka.Kai.PraMam./Kaem.Ka /Hanchike /14398/2014-15 dated : 31.01.2015 COMMISSIONER, DEPARTMENT OF EXCISE, B.M.T.C BUS STAND, SHANTHINAGAR, BANGALORE RESPECTED, Sub: Regarding submission of report with regard to assurance given by Hon’ble Chief Minister on 03.07.2014, while making reply to the question marked at dot bearing No.128(583) raised by Hon’ble Member of Legislative Council Sri.Ramachandra Gowda (Graduation Block) and regarding cancellation of license obtained from Department of Excise for operating bar in Industrial Area. With reference to above subject, the Hon’ble Chief Minister, while making his reply in the Legislative Council, to the question marked at dot bearing No.128(583), raised by the Hon’ble Member of the Legislative Council Sri.Ramachandra Gowda (Graduation Block), gave an assurance to verify and initiate action against the concerned unit who are running liquor shops after obtaining license from the Department of Excise, in plot meant for Industry, which is allotted by the Karnataka Industrial Area Development Board of different districts. In furtherance to the above, it is hereby informed in the Letter of the Government that the Additional Chief Secretary to the Government, Department of Commerce and Industry, shall conduct an enquiry in this regard as per the assurance given by the Hon’ble Chief Minister in the Legislative Council and shall submit the report to the Government on 24-11-2014 by taking immediate steps. In the Industrial Area, developed by the Board, it is found that the following businessmen are operating bars in industrial area by obtaining license in violation of law. xxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxx 10. Mysore District (A) Hebbal Industrial Area Sl. No. Name of the Businessmen Industrial Plot Number 1 M/s. Sri Hotel Annapurneshwari, Owner Sri.M.S.Revanna 438-F-Part 2 Sri.C.Basavegowda 435-P 3 M/s. Chetan Gas Point Bottling Pvt.Ltd., 345-A (C) Hootagalli Industrial Area (D) Sl. No. Name of the Businessmen Industrial Plot Number 1 M/s. Hotel Keynes Pvt.Ltd., 85 & 87 xxxx It is hereby respectfully requested to cancel the license given to the Bar in light of non-availability of provision for running Bar or other than industrial activity in industrial area. Yours faithfully Sd/- Chief Executive Officer & Executive Member” 9. The respondent – Excise Department in its statement of objections filed in WP No.30503/2016 in the present batch has relied upon the stand taken by the KIADB and in view of their communication dated 31.01.2015 quoted above and they have thus justified their action of refusal to renew the Excise Licence. 10. On the other hand, learned counsel for the petitioners has submitted that there is no such requirement in the relevant Excise Rules namely, Karnataka Excise (General Conditions of Licences) Rules, 1967 of which, only Rule 5 is relevant for the present purposes, which prescribes restrictions in regulation of liquor shops which is quoted below for ready reference; “Rule 5. 10. On the other hand, learned counsel for the petitioners has submitted that there is no such requirement in the relevant Excise Rules namely, Karnataka Excise (General Conditions of Licences) Rules, 1967 of which, only Rule 5 is relevant for the present purposes, which prescribes restrictions in regulation of liquor shops which is quoted below for ready reference; “Rule 5. Restriction in respect of location of shops:- (1) No licence for sale of liquor shall be granted to a liquor shop or premises selected within a distance of 100 metres from any religious or educational institution or Hospital or any Office of the State Government or Central Government or Local Authorities or in a residential locality, where the inhabitants are predominantly belong to Scheduled Castes or Scheduled Tribes or within a distance of 220 metres from the middle of the State Highways or National Highways: [Provided that where a shop is sanctioned to a village the population of which is less than two thousand five hundred, such shop shall be located outside the residential locality of the village] [Explanation:- [(1) For the purpose of this rule “National Highway” or “State Highway” shall not include such pats of the National Highway or State Highway as are situated within the limits of a Municipal Corporation, City or Town Municipal Council, or such other authority having a population of twenty thousand or more] [Explanation:- (2) For the purpose of this rule, the expression “Hospital” means any Government Hospital, Primary Health Centre or Primary Health Unit and includes a Private Hospital or a Private Nursing Home which has the facility of a minimum of thirty beds of treatment of inpatients. [Explanation:(3) For the purpose of this rule the expression “Office of the State Government or Central Government or Local Authority” means and includes any State or Central Government Office headed by Group ‘A’ or ‘B’ grade officers and the main Administrative Offices of Local Bodies like City Corporation, City Municipal Council, Town Municipal Council, Town Panchayat, Zilla Panchayat, Taluk Panchayat and Grama Panchayat and such other offices of the State Government, Central Government or Local Authorities as may be specified by the Government from time to time.] (2) The Deputy Commissioner or Excise shall after making such enquiry as he deems fit approve the premises of liquor shop so selected and thereafter the description of the premises of liquor shop shall be entered in the Licence to be issued: Provided that the Deputy Commissioner of Excise may, with the prior approval of the Excise Commissioner and for reasons to be recorded in writing, permit the location of any shop within a distance of 100 metres, but not less than 50 metres from the institutions, hospital, office or locality specified in sub-rule (1) within the City Municipality or City Corporation limits. [Provided further that the Deputy Commissioner of Excise may grant licence to locate any liquor shop in a premises situated within a distance of 220 metres form the middle of a State Highway or a National highway if such premises is located in a predominantly inhabited area, or extension of a town, village, or area the population of which is more than two thousand five hundred and where a licence to locate shop in such premises was granted or was existing during the period commencing from 1st July, 1992 and ending on [30th June, 1994]] [(2-A) Notwithstanding anything, contained in sub-rules (1) and (2) the Deputy Commissioner of Excise may with a view to secure, convenience, morality, tranquility, decency or safety of the public or for any other reason, reject the application for licence to a liquor shop or premises after recording the reasons therefor.] (3) For the purpose of this rule while measuring the distance specified in this rule, the distance shall be measured along the nearest path by which the pedestrian ordinarily reaches, adopting the mid-point of the entrance of the shop and the mid-point of the nearest gate of the institution, hospital or office if there is a compound wall and if there is no compound wall, the mid-point of the nearest entrance of the institution of the office. (4) The Deputy Commissioner may, by order after giving the licence an opportunity of being heard, direct such licence to shift the location of any shop,- (a) With a view to secure the convenience, morality, tranquility, decency or safety of the public [or compliance] of the provisions of these rules; or (b) where after the issue of a licence any religious institution or educational institution is established [ or any office of the State Government or Central Government or Local Authorities or a Hospital is opened] within the limits specified in this rule; to any other suitable place, within such period, not exceeding three months as he may specify] [(5) The Excise Commissioner may at his discretion and for reasons to be recorded in writing exempt from the application of these rules in the case of distributor licences referred to in clause (11) of Rule 3 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968]” 11. Learned counsel for the petitioner, therefore, submitted that the respondent – KIADB has no jurisdiction to intervene in the matter and object to the grant / renewal of the licence to the Bars and Restaurants situated within the industrial area developed and allotted by the KIADB to Hotel, which is undoubtedly an ‘industry’ and there is no dispute on this from the side of State. 12. Learned counsel for the respondents has also drawn the attention of the Court towards Annexure-E dated 07.04.2015 from the Additional Chief Secretary to Government, Chief executive Officer and Member of KIADB. Paragraph 2 of the said communication is quoted below for ready reference; “As per recommendations of the committee constituted for initiation of action as per the assurances of the Hon’ble Chief Minister while replying to the pointed question No.128 (583) of Sri.Ramachandra Gowda, Hon’ble Member of Legislative Council (Graduates’ constituency) on 03/07/2014 in the Legislative council, permission is granted to initiate the following action: 1. Details of the officers failure to furnish details of hotels, bars being run illegally other than the purposes for which is allotted and violations and in preventing violations, is prepared. Direction to the Administration branch of the Board to initiate action against the said officers as per rules; 2. To address letters to the Excise Department of district administration for canceling the license of the allottees running hotels and bars illegally in the industrial areas;” 13. I have heard the learned counsels and perused the records. 14. Learned counsel for the respondents – KIADB as well as Excise Department were unable to point out any specific statutory provisions either in the Karnataka Excise Act or the Karnataka Excise (General Conditions of Licences) Rules, 1967, except Rule 5, under which “no objection” or a clearance from the KIADB was required for considering the cases for grant / renewal of Excise licence under the Excise Act. Rule 5 of the Karnataka Excise Rules, 1967 quoted above, does not permit any such intervention of KIADB. The case in hand is not the one of any violation of the conditions of lease deed / sale deed for the industrial site in question, in which the Hotel of the petitioner is constructed. Rule 5 of the Karnataka Excise Rules, 1967 quoted above, does not permit any such intervention of KIADB. The case in hand is not the one of any violation of the conditions of lease deed / sale deed for the industrial site in question, in which the Hotel of the petitioner is constructed. If there is any such violation of any such condition of such sale deed / lease deed, the respondent – KIADB can proceed under the provisions governing them namely, the Karnataka Industrial Areas Development Act, 1966 (Karnataka Act No.18/1966) or Rules framed thereunder. But, there appears to be no statutory requirement for either Excise authority to take any such clearance from KIADB or any provision in the KIADB Act, 1966 or Rules framed under KIADB Act to put any such restrictions for consideration of the Excise Licence or Renewal thereof. The question answer on the floor of Legislative Assembly referred in the impugned communication do not amount to legislation. 15. In the absence of any legislative sanction in the concerned Rules or the enactments, the impugned communication dated 31.01.2015 of KIADB addressed to the Excise Commissioner is found to be wholly without jurisdiction and an unnecessary interference in the discretion of the Excise Authorities to consider the case for renewal of Excise licences, in the present case. 16. In view of the lack of jurisdiction of KIADB for issue of the communication dated 07.04.2015 at Annexure-E, from the Additional Chief Secretary to the Government addressed to the Chief Executive Officer of KIADB is also without jurisdiction and in the absence of any statutory provisions, no such communication could have been addressed by the State Government to KIADB to raise such objections. Therefore, alleged illegality pointed out by the KIADB is without any jurisdiction. Therefore, both the communications dated 07.04.2015 and 31.01.2015 of the State Government and KIADB to the extent it affects the case of the petitioners before this Court are liable to be quashed and the same are hereby quashed accordingly. 17. Inclusion of ‘Hotel’ within the definition of “Amenity” under Section 2(1) of the KIADB Act, 1966, is of a little help to the respondent – KIADB and inclusion of ‘Hotels’ within the definition of “Amenity” will at best extend the provision of KIADB Act, 1966 to them. 17. Inclusion of ‘Hotel’ within the definition of “Amenity” under Section 2(1) of the KIADB Act, 1966, is of a little help to the respondent – KIADB and inclusion of ‘Hotels’ within the definition of “Amenity” will at best extend the provision of KIADB Act, 1966 to them. But, it can not interfere with the powers conferred upon the respondent Excise authorities under the provisions of Karnataka State Excise Act, 1965. Even on a harmonious reading of these two Acts, such an interference is not supported by any legal provisions in this respect. In the absence of any clear provisions in this regard, the communications dated 07.04.2015 and 31.01.2015 of the State Government and KIADB are liable to be quashed and as they have been quashed above by this Court, there remains no legal basis for sustaining the impugned Endorsement Annexure-F dated 30.06.2016. The same is also therefore liable to be quashed and the same is accordingly quashed. 18. These writ petitions therefore deserve to be allowed. The same are allowed with costs of Rs.5,000/- to be paid by respondent – KIADB to each of the petitioners before this Court for their unnecessary and illegal interference in the matter against exercising the powers of the Excise Authorities governed by the State Excise Act, 1967 and because of which the petitioners were deprived of their right to seek their Excise Licences renewed so far. 19. The similar Annexures under challenge refusing to consider the request for renewal of their Excise Licences in different cases and the demand of maintenance charges by the respondent – KIADB are also liable to be quashed and they are also quashed. The Respondent Excise Authorities shall decide the renewal application expeditiously now.