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2025 DIGILAW 954 (KER)

Parays Holiday Hotels Pvt. Ltd v. State Of Kerala

2025-04-10

MOHAMMED NIAS C.P.

body2025
JUDGMENT : WP(C) No. 34398/2017 is filed by Parays Holiday Hotels Pvt. Ltd., WP(C) No. 10234/2018 by Broad Bean Hotel, WP(C) No. 10263/2018 by Chola Huts, WP(C) No. 22084/2018 by Hotel Cloud-9 and WP(C) No. 254/2019 by N.Satheeshkumar, seeking refund of an amount of Rs. 4,20,000/- each, paid on 31.3.2017, 28.3.2017, 29.3.2017, 28.3.2017, and 29.3.2017 respectively, towards the renewal of the FL-11 licence issued for the privilege of possession and vending of Beer/Wine for consumption in the premises, for the licensing year 2017-2018. WP(C) No. 10308/2018 is filed by Rojan Chacko, who paid Rs.4,70,000/- for the renewal of the FL-11 licence for the year 2017-2018. 2. The refund is claimed on the ground that the said licences were neither renewed nor rendered operational in the Abkari Year 2017-2018, owing to the embargo imposed by the Hon’ble Supreme Court in The State of Tamil Nadu & Ors. v. K.Balu & Anr. [ (2017) 2 SCC 281 ], wherein a nationwide prohibition was placed on the issuance and renewal of liquor licences— including FL-11 licences—for establishments situated within 500 metres of National or State Highways. 3. Subsequently, the Hon’ble Supreme Court, in Arrive Safe Society of Chandigarh v. Union Territory of Chandigarh & Anr. [ (2018) 13 SCC 133 ] clarified that such prohibition would not apply to establishments located within municipal or urban limits, even if the roads abutting such establishments were technically classified as highways. Pursuant to the said clarification, and in light of the policy revision introduced by the Government of Kerala vide G.O. (MS) No.43/2017/TD dated 13.6.2017, whereby 3-star and 4-star classified hotels were permitted to obtain FL-3 licences. The petitioners availed the benefit of the revised policy and remitted an amount around Rs.28,80,000/- towards FL-3 licence fees, which were duly accepted by the authorities and corresponding licences were issued. 4. The petitioners contend that the respondents, even after accepting the licence fee, neither renewed the FL-11 licence nor permitted the petitioner to conduct the FL-11 licence (vending of beer/wine) even for a day during the Abkari Year 2017-2018. The petitioners contended that the respondents are duty-bound to give back the amount or transfer the licence fee accepted from the petitioners. It is also contended that the respondents ought to have refunded the FL-11 licence amount to the petitioners immediately on the date when the petitioners remitted the licence fee for renewing the petitioners' FL-3 licence. The petitioners contended that the respondents are duty-bound to give back the amount or transfer the licence fee accepted from the petitioners. It is also contended that the respondents ought to have refunded the FL-11 licence amount to the petitioners immediately on the date when the petitioners remitted the licence fee for renewing the petitioners' FL-3 licence. Despite repeated requests and representations made to the 3rd respondent, to refund/adjust the said amount paid for the FL-11 licence renewal, the same was not allowed. It is argued that it is not on account of any fault of the petitioners that they were disabled from conducting the FL-11 licence beer/wine parlour. The petitioners were precluded from conducting the same because of the judgment of the Apex Court, and in the said circumstances, the respondents are not justified in refusing a refund/adjustment of the amounts. 5. The petitioner in WP(C) No. 3150/2021 contends that she had remitted an amount of Rs. 32,30,000/- towards renewal of the FL-3 licence for the Abkari Year 2020-2021, which included Rs.30,00,000/- as licence fee and Rs. 2,30,000/- towards service charges in special areas. However, due to the outbreak of the COVID-19 pandemic and the consequent lockdown imposed across the State with effect from 31.3.2020, the petitioner was unable to operate the Bar till 22.12.2020. It is the specific grievance of the petitioner that although the licence was renewed on 31.5.2020, she was effectively deprived of the right to conduct business for a substantial portion of the licence period. The petitioner further submits that she was made to believe that, pursuant to the amendment to the FL Rules dated 14.5.2020 introducing Rule 3(3E), the retail sale of liquor would be permitted through separate counters within the licensed premises. In the above circumstances, the petitioner claims a refund of the excess amount of the FL-3 licence fee collected from the petitioner for the period from 1.6.2020 to 21.12.2020 or adjust it towards the licence fee payable in the event of the FL-3 licence is being renewed. It is also contended that the respondents have no right to retain the licence fee collected from the petitioner for the period from 1.6.2020 to 22.12.2020 without allowing her to open the Bar. 6. It is also contended that the respondents have no right to retain the licence fee collected from the petitioner for the period from 1.6.2020 to 22.12.2020 without allowing her to open the Bar. 6. The respondents submit that pursuant to the directions issued by the Hon’ble Supreme Court in the order dated 11.7.2017 in Arrive Safe Society of Chandigarh's case supra, the applications of the petitioners for renewal of FL-11 licences were duly considered and allowed, with appropriate orders issued, as evidenced by Annexure R1(a) and similar documents. It is submitted that the amounts remitted by the petitioners towards renewal, even where initially found defective, were credited to the Government Exchequer, and the renewal certificates were accordingly issued. Thereafter, based on the change in Abkari Policy vide G.O. (Ms) No. 43/2017/TD dated 13.6.2017, which permitted the grant of FL-3 licences to hotels having 3-star and 4-star classifications, the petitioners submitted applications for FL-3 licences. 7. The respondents also contend that under Rule 15 of the Foreign Liquor Rules, it is legally permissible for the same person to hold two or more licences under the FL Rules within the same locality, and accordingly, the petitioners were eligible for both FL-11 and FL-3 licences. The respondents further submitted that the actions taken were strictly in accordance with the prevailing statutory framework, Government policy, and applicable rules. In G.O.(Rt)No. 967/2022/TAXES dated 16.12.2022, it is provided that, as per Rule 14A of Foreign Liquor Rules, the licences under Rule 13B are granted for a financial year, and the full annual fee of the licence shall be paid and the licence shall expire at the end of that financial year. There is no provision in the Foreign Liquor Rules or the Abkari Act for the refund of the amount remitted as a licence fee. The petitioner is also aware of the provisions of the FL Rules while applying for the licence. Since the licences under Rule 13B are granted for a financial year, and full annual fee of the licence shall be paid, and the licence shall expire at the end of the financial year, no refund is possible as there is no such provision stipulated in the rules. 8. Heard the learned counsel appearing on both sides. 9. It is not in dispute that the Government had collected the licence fee from the petitioners for the Abkari Year in question. 8. Heard the learned counsel appearing on both sides. 9. It is not in dispute that the Government had collected the licence fee from the petitioners for the Abkari Year in question. It is also not in dispute that the petitioners could not use the licence or function even for a single day for no fault of theirs. In the absence of a case for the respondents that the petitioners did not do business of their own volition, but admittedly for reasons beyond their control, the rejection of their request seeking a refund is unjustifiable. 10. The Hon'ble Supreme Court, while considering a similar issue in Chitra v. State of Kerala ( 2015 (3) KLT 956 (SC) ) held as follows: “5. ..............We hold that a party is entitled to seek a remission in the payment of license fee if it is precluded from transacting business on the strength of that license because of factors and reasons extraneous to it and/or if it granted the license on the direction of a Court for only a portion of the financial year. xxxx xxxx xxxx xxxx 8. …..............there was no third-party interference or intervention which led to the non-utilization of that license for the previous portion of that year; it may be reiterated that the Appellant cannot be held responsible in any way for the non- utilization of the license up to the date it was eventually renewed.” 11. This was again followed by the Division Bench of this Court in State of Kerala v. M/A.Yesar Regency ( W.A.No. 328/2016 ) as follows: “11. …............ a party would be entitled to seek remission in payment of license fee if he was precluded from transacting business on the strength of the license due to factors and reasons extraneous to it and also in cases where the license was granted on the direction of the Court for the only a portion of the financial year.” 12. …............ a party would be entitled to seek remission in payment of license fee if he was precluded from transacting business on the strength of the license due to factors and reasons extraneous to it and also in cases where the license was granted on the direction of the Court for the only a portion of the financial year.” 12. In view of the above facts, the State while dealing with a citizen, should not ordinarily rely on technicalities and when it finds the case of the citizen is a just one, even though legal defences may be open to it, it must act, as has been said by eminent judges “as an honest person” [Please see in this connection the judgment of the High Court of Bombay in Firm Kaluram Sitaram v. The Dominion of India , 1953 SCC OnLine Bom 39 ]. It is also to be noted that the argument of the respondent, that, in the absence of a statutory provision, a person cannot claim a refund or that the State can retain an undue benefit, also cannot be accepted. [Please see in this connection the judgment of Hon'ble Supreme Court in Sahakari Khand Udyog Mandal Ltd. v. Commissioner of Central Excise & Customs, (2005) 3 SCC 738 ] 13. In the result, the writ petitions are allowed. There will be a direction to the competent among the respondents to consider the request for refund of the licence fee paid for the Abkari Year 2017-2018 by the petitioners in WP(C) Nos. 34398 of 2017, 10234, 10263, 10308, 22084 of 2018, 254 of 2019 and for the Abkari Year 2020-2021 by the petitioner in WP(C). No. 3150 of 2021, or adjust towards the future licence fee payable by the petitioners, in the light of the above-mentioned observations. Appropriate decisions/orders shall be passed within three months from the date of receipt of a copy of this judgment. The writ petitions are allowed as above.