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2016 (1) TMI 464 - SC - Indian LawsChallenge to Abkari Policy 2014-15 - Judge carved out an exception vis-a-vis the eligibility of Four Star and Heritage category hotels to the grant of FL-3 licence, finding their exclusion to be arbitrary and violative of Article 14 of the Constitution - Held that - It is not the State that makes classification of Star Rating so far as hotels are concerned. This is intrinsically modulated by the Tourism Industry and not by the State Government. It seems to us that the impugned policy of eradicating consumption of alcohol in public applies to all stakeholders without exception. However, thereafter a relaxation or exception, in the interest of tourism, has been forged in favour of Five Star hotels alone so far as the drive against public consumption of liquor is concerned. In other words, were it not for considerations of tourism, this exception in favour of Five Star Hotels may have been struck down. As already noted, Courts should be chary from interfering in policy matters, by infusing or imposing its assessment of the policy. The Court may well opine that there is close similarity between Five Star and Four Star and Heritage Hotels with regard to foreign clientele; but that segregation or selection is the preserve of the State Government. This is altogether different from viewing the position from the stand point of creating a classification in favour of Five Star hotels. The State can draw support from Rule 13(3) which postulates that special measures for the promotion of tourism can be ordained by the State. We cannot subscribe to the view that this Rule violates Section 15C of the Abkari Act. What is certainly a strong criticism to the State policy on alcohol, namely, that FL-1 sales are a State monopoly and result in almost 80 per cent of the sales in the State of Kerala. The State has asserted that in keeping with its objective of bringing down alcohol sale it has devised and implemented a 10 per cent cut in the number of FL shops. This assertion of the State has been contested on the grounds that the sales have not reduced as a result, but we find no reason to disagree or doubt the bona fides of the State. The Court cannot be blind to the fact that a social stigma at least as far as the family unit is concerned still attaches to the consumption of alcohol. Free trade in alcohol denudes family resources and reserves and leaves women and children as its most vulnerable victims. Purchasing alcohol from a FL-1 shop would entail consuming it under the reproachful gaze of the dependants, especially the female members of the family. This is certainly a discouragement to regular and excessive consumption of alcohol. We must accept that that the possibility exists that rooms may be rented in Three and Four Star hotels, where alcohol can be brought from FL-1 shops and then consumed. However, this does not constitute public consumption, and therefore is not fatal to the besieged State s policy. No illegality or irrationality with the intention of the State to clamp down on public consumption of alcohol. The One Man Commission Report has been considered, so the policy does not suffer from the vice of arbitrariness. In these circumstances, it is not for the Appellants to argue or for us to hold that the goal of prohibition would be more likely to be met by reducing the number of FL-1 shops or by introducing any other measure. As was held in Balco Employees Union (Regd.) v. Union of India and Ors. 2001 (12) TMI 808 - SUPREME COURT OF INDIA , in a democracy, it is the prerogative of the elected Government to implement and follow its own policy, even if this adversely affects some vested interests, and the Court may not strike down a policy at the behest of a Petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. If the sale of beer and wine as a consequence of grant of FL-11 licenses discloses an increase or if there is a trend towards serving beer of a higher alcohol content, the State will have to review its stand, failing which it would inexorably invite further litigation. This curial warning also applies to any laxity in policing or ensuring that no person below the permissible age is allowed to consume alcohol in public. Additionally, we must note that thousands of workers at bars that lost their FL-3 licenses have been rendered unemployed as a result of the impugned policy, leading to over a dozen suicides. The State has imposed a 5 per cent cess on liquor sold in FL-1 shops for the purpose of rehabilitation of these workers. However, it has been argued before us that the amount mobalised by this cess is not being properly implemented. If this is indeed the case, the High Court may be approached to address this grievance. It does not affect the legality of the policy impugned before us, but there is no doubt that these workers do have a right to be rehabilitated. The State may be sanguine in its assessment of the success of the impugned policy, but it must be given a chance to combat the rise in alcohol. - No reason or justification in accepting these Appeals - Decided against appellants.
Issues Involved:
1. Legal correctness of the Kerala High Court's decision on the Abkari Policy 2014-15 and amendments to the Foreign Liquor Rules. 2. Violation of Article 14 (Equality before law) and Article 19 (Right to practice any profession or to carry on any occupation, trade, or business) of the Constitution. 3. Classification and discrimination between different categories of hotels. 4. State's policy on public consumption of alcohol and its implications. Issue-wise Detailed Analysis: 1. Legal Correctness of the Kerala High Court's Decision: The appeals questioned the High Court's judgment, which dismissed writ petitions challenging the Abkari Policy 2014-15 and amendments to the Foreign Liquor Rules. The policy restricted FL-3 licenses to Five Star hotels, excluding Two Star, Three Star, Four Star, and Heritage hotels. The Single Judge had found the exclusion of Four Star and Heritage hotels arbitrary and violative of Article 14, but this was reversed by the Division Bench, allowing only Five Star hotels to serve alcohol. 2. Violation of Article 14: The appellants argued that the policy violated Article 14 by creating unreasonable classifications among hotels. They contended that Four Star and Five Star hotels form a homogenous class and should not be treated differently. The Court, however, upheld the policy, stating that the classification was based on reasonable differentia and had a nexus with the objective of reducing public alcohol consumption. The Court noted that the policy aimed to curb public drinking, which was a social malaise in Kerala, and that the State's steps were in line with Article 47 of the Constitution, which mandates the State to endeavor to bring about prohibition. 3. Classification and Discrimination: The appellants argued that the classification between Five Star hotels and others was arbitrary and lacked empirical evidence. They claimed that the policy was financially driven, favoring State-owned FL-1 shops. The Court rejected these arguments, stating that the classification was not arbitrary and was justified in the interest of promoting tourism. The Court emphasized that the State had the right to experiment with policies to achieve the best results in reducing alcohol consumption and that the classification had a reasonable nexus with the policy's objective. 4. State's Policy on Public Consumption of Alcohol: The policy aimed to reduce public alcohol consumption by restricting FL-3 licenses to Five Star hotels. The Court noted that the State had the power to regulate trade in liquor, which is considered res extra commercium (outside commerce). The Court found that the policy was not arbitrary or procedurally unsound and that the State had considered relevant reports and recommendations. The Court also highlighted the State's efforts to reduce the number of FL-1 shops and its commitment to achieving a liquor-free Kerala. Conclusion: The Court upheld the Kerala High Court's decision, dismissing the appeals and affirming the policy restricting FL-3 licenses to Five Star hotels. The Court found no violation of Articles 14 and 19, stating that the policy was reasonable, non-arbitrary, and aimed at reducing public alcohol consumption in line with the State's constitutional obligations. The Court also emphasized the importance of giving the State the freedom to experiment with policies to address social issues like alcohol consumption.
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