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TMI Blog2016 (1) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... nfusing 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. - Civil Appeal No. 4157 of 2015 - - - Dated:- 29-12-2015 - Vikramajit Sen And Shiva Kirti Singh, JJ. [C.A. NO. 4119/2015, C.A. NO. 4120/2015, C.A. NO. 4121/2015, C.A. NO. 4122/2015, C.A. NO. 4123/2015, C.A. NO. 4124/2015, C.A. NO. 4125/2015, C.A. NO. 4126-4136/2015, C.A. NO. 4137-4156/2015, C.A. NO. 4158-4159/2015, C.A. NO. 4160/2015, C.A. NO. 4161-4165/2015, C.A. NO. 4166/2015, C.A. NO. 4167/2015, C.A. NO. 4168/2015, C.A. NO. 4169/2015, C.A. NO. 4170/2015, C.A. NO. 4171/2015, C.A. NO. 4172/2015, C.A. NO. 4173/2015, C.A. NO. 4174/2015, C.A. NO. 4175/2015, C.A. NO. 4999/2015, C.A. NO. 5000/2015, C.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Kerala, and boundaries with the States of Karnataka and Tamil Nadu where the sale or consumption of liquor is not prohibited indubitably makes it almost impossible for the State to venture into prohibition. 3. It has not been disputed that the State of Kerala is facing an acute social problem because of the widespread and excessive consumption of alcohol. It appears that almost 14 per cent of the national consumption of alcohol occurs in this comparatively territorially small State (indeed a dubious distinction), which also justifiably boasts of 100 per cent literacy. Faced with this social malaise, the State Government appears to have considered that banning the consumption of hard alcohol in public may have the effect of bringing down and arresting the ever escalating addiction to liquor. But we must immediately record our reservation inasmuch as FL-11 licences for the sale of consumption of beer and wine are rampantly issued. If the addiction to alcohol or introduction into this pernicious habit is to be combated, there seems to us to be no justification to allow beer or wine to be publically consumed. There cannot be any caveat to the opinion that permitting the consumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tar hotels. The licenses of existing bar hotels which are functioning on the basis of provisional renewal of licenses except the licenses of 5 star hotels will be cancelled. The Government has decided not to renew the licenses of 418 non standard bar hotels mentioned in the Judgment of the Supreme Court. 2. 10% of outlets out of 338 FL-1 outlets of Kerala State Beverages Corporation and 46 outlets of Consumer Fed will be closed each year from 2nd October, 2014 onwards. 3. The sale of high strength alcoholic liquor through Beverages Corporation will be gradually reduced. 4. In order to rehabilitate the employees who lose their job due to the closing of bar and to rehabilitate the persons who are alcoholically addicted a special plan namely Punarjani 2030 will be commenced. For that purpose, 5% Cess will be imposed on the liquor which selling through the K.S.B.C. 5. The Liquor-Free propaganda program will be strengthened in the society at large and especially in educational institutions. 6. All Sundays will be declared as dry-day. This will implement from the Sunday of 5th October, 2014. 7. The traditional toddy tapping business will be protected and job security wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Judge Bench in P.N. Kaushal v. Union of India 1978 (3) SCC 558 thus: A raging rain of writ petitions by hundreds of merchants of intoxicants hit by a recently amended rule declaring a break of two dry days in every wet week for licensed liquor shops and other institutions of inebriation in the private sector, puts in issue the constitutionality of Section 59(f)(v) and Rule 37 of the Punjab Excise Act and Liquor Licence (Second Amendment) Rules, (hereinafter, for short, the Act and the Rules). The tragic irony of the legal plea is that Articles 14 and 19 of the very Constitution, which, in Article 47, makes it a fundamental obligation of the State to bring about prohibition of intoxicating drinks, is pressed into service to thwart the State s half-hearted prohibitionist gesture. Of course, it is on the cards that the end may be good but the means may be bad, constitutionally speaking. And there is a mystique about legalese beyond the layman s ken! 2. To set the record straight, we must state, right here, that no frontal attack is made on the power of the State to regulate any trade (even a trade where the turn-over turns on tempting the customer to take reeling roiling tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. (d) Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country. The State has, therefore, the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage, both because it is inherently a dangerous article of consumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l persons within the territories of India. It enshrines a basic principle of republicanism. The second part, which is a corollary of the first and is based on the last clause of the first section of the Fourteenth Amendment of the American Constitution, enjoins that equal protection shall be secured to all such persons in the enjoyment of their rights and liberties without discrimination of favouritism. It is a pledge of the protection of equal laws, that is, laws that operate alike on all persons under like circumstances. (2) The State, in the exercise of its governmental power, has of necessity to make laws operating differently on different groups or classes of persons within its territory to attain particular ends in giving effect to its policies, and it must possess for that purpose large powers of distinguishing and classifying persons or things to be subjected to such laws. (3) The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The courts sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object sought to be achieved by the Act. (8) The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short, while Article 14 forbids class discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legislation, provided such classification is not arbitrary in the sense abovementioned. (9) If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administrators or officers to make selective application of the law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. In such cases, the power given to the executive body would import a duty on it to classify the subject-matter of legislation in accordance with the objective indicated in the statute. If the admin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es had to be considered as extant on the date of consideration of the application. This Court opined that since the State has exclusive privilege of manufacture and sale of liquor, and no citizen has a fundamental right to carry on trade or business in liquor, the applicant did not have a vested right to get a licence. Where there is no vested right, the application for licence requires verification, inspection and processing. In such circumstances it has to be held that the consideration of application of FL-3 licence should be only with reference to the rules/law prevailing or in force on the date of consideration of the application by the excise authorities, with reference to the law and not as on the date of application. It was also noted that the promotion of tourism is to be balanced with general public interest. If the State finds that sufficient licenses have already been granted or that no more should be granted in the public interest, it can take a policy decision not to grant any further licenses. If the policy is not open to challenge, the amendments to implement the policy are also not open to challenge. It was on this dialectic that the proviso was upheld. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our Star and above classifications until the receipt of the report of the One Man Commission, and until action is taken against non-standard restaurants who have been permitted under the sixth and seventh proviso of Rule 13(3). 12. As we have already delineated, it is in the wake of these two judgments that the further restriction of FL-3 licenses to Five Star hotels alone was prescribed. As previously mentioned, the learned Single Judge in the detailed judgment dated 30.10.2014, upheld the petitions of the Four Star and Heritage category hotels, but declined those of Two Star and Three Star and unclassified hotels. Upon a detailed discussion of the judgment in Khoday, it was found that a citizen has no fundamental right to conduct trade or business in potable liquor. However, in the event of the State permitting of trade or business in potable liquor with or without limitation, the citizen has the right not to be discriminated against. Any regulatory measure would thus have to satisfy the test of Article 14. It rejected the arguments of the Appellants that the field of prohibition is occupied by the Prohibition Act, 1950 and that the present policy is outside the scope of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simply a piece of evidence which the Government would have to take note of. It was for the State to evolve a policy taking into account the welfare of the people, and the Courts have a very narrow and limited scope to intervene in such policy decisions. It is also not for the Courts to find whether a more feasible view is possible or whether a better policy could be evolved, which intrinsically remains a subjective exercise. The Division Bench also differentiated the factual matrix obtaining before it from that in State of Maharashtra v. Indian Hotel and Restaurants Association (2013) 8 SCC 519, commonly referred to as the Dance Bar case, on the premise that in the latter the fundamental rights of thousands of dancing girls was also in issue, and dancing in itself is not harmful to the health, although it could affect the morality of people and the dignity of women based on the manner in which the dance was performed. The Division Bench noted that the impugned policy is in consonance with Article 47 of the Constitution which provides that the State shall regard the raising of nutrition and the standard of living of its people and the improvement of public health as among its prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ariation of its policies achieves the best result. It may well choose to revoke an unsuccessful policy at some later date. To make such policies is within the power of the State, and in the face of the current ground reality, even a policy which achieves only a partial reduction in the amount of alcohol consumed in the State would be considered a success for the State. 15. The State s policy to achieve a liquor-free Kerala has three constituents. The first is regarding manufacture. Manufacture is no longer in private hands, and no licenses have been given since 1999. There is only one Government distillery in the State, thus giving the State the necessary control. Secondly, wholesale and retail supply has been under the control of the State since 1984. The Government has taken steps to curb consumption by reducing the number of FL-1 shops by over 10 per cent, from 384 to 332, between 2014 and 2015. The third element, which is pertinent on the facts before us, is regarding consumption which is in alarming proportion in Kerala especially when compared to other States. The Table produced below is relevant in understanding the consumption trends in the State. As much as 80 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Station [or other public office or any club] or any place of public amusement or resort or on board any passenger boat or vessel or any [ public passenger or goods vehicle ] or dining or refreshment room in a restaurant, hotel, rest-house, travellers bungalow or tourist bungalow where different individuals or groups of persons consume food but shall not include any private residential room. Rule 13(3) of the Abkari Rules is thus an exception to Section 15C, for the purpose of tourism. The situation before us, then, is not as simple as the Constitutional rights of hotels of Four Star and below classifications being violated because of a policy granting FL-3 licenses only to Five Star hotels. The question is whether the policy to ban consumption of alcohol in public or the exception carved out of this policy in favour of Five Star hotels is violative of the rights under Article 14 and Article 19 of hotels of Four Star and below classifications. 17. The Appellants have submitted that their rights under Article 14 have been violated. It is trite law that Article 14 allows for reasonable classifications, where the classification fulfils the dual criteria of being based on a rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Government must be asked to provide a rigorous, detailed explanation in this classification. As was elucidated in Ashok Kumar Thakur v. Union of India (2011) 12 SCC 787, when discrimination is based on class, it is more pernicious and needs careful judicial enquiry. 18. The Appellants before us have also argued that the subject categorization has no reasonable nexus with the object sought to be achieved. Since the purpose is to achieve prohibition albeit in a staggered and piecemeal process, this cannot be achieved while there are no limits on the number of FL-1 shops or the number of Five Star Hotels. The intention of the Government is facially financially driven, as while it is denying FL-3 licenses to hotels with Four Star and below classifications, it is improving the infrastructure in FL-1 shops, all of which are State owned. The previous clientele of the hotels that lost their FL-3 licenses are now frequenting these shops. 19. The Appellants have further contended that the policy suffers from the vice of arbitrariness, which is antithetical to equality. The One Man Commission Report and the Tax Secretary s Report have not been taken into consideration, as is evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of Section 15C, the classification herein amounts to sub-sub-classification, the Respondent has argued that the Explanation was a definition clause and merely listed the places that come under the umbrella of public place . It did not create a class in any way. 21. It was contended that the policy did have a reasonable nexus with the object sought to be achieved, as the object of the policy, as enshrined in Section 15C, was to reduce the public consumption of liquor. An exception was made in the interest of tourism under Rule 13(3) in favour of Five Star hotels. By making liquor less easily and readily available for consumption in public, and by making it prohibitively expensive, this object would no doubt be achieved. Additionally, the sections of society who were particularly at risk, such as the youth, would practically be compelled to abstain from public consumption of alcohol. The argument that liquor is still available for consumption in private was, it was argued, irrelevant, but nonetheless it was submitted that the State has reduced the number of FL-1 shops by over 10 per cent in the past year. 22. The Respondent contended that the policy is not arbitrary. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n do so also by creating in itself the monopoly of the production and supply of the liquor. When the State does so, it does not carry on business in illegal products. It carries on business in products which are not declared illegal by completely prohibiting their production but in products the manufacture, possession and supply of which is regulated in the interests of the health, morals and welfare of the people. It does so also in the interests of the general public under Article19(6) of the Constitution. 56. The contention further that till prohibition is introduced, a citizen has a fundamental right to carry on trade or business in potable liquor has also no merit. All that the citizen can claim in such a situation is an equal right to carry on trade or business in potable liquor as against the other citizens. He cannot claim equal right to carry on the business against the State when the State reserves to itself the exclusive right to carry on such trade or business. When the State neither prohibits nor monopolises the said business, the citizens cannot be discriminated against while granting licenses to carry on such business. But the said equal right cannot be elevated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the State can impose reasonable restrictions. A few years later, however, in Khoday, the concept of res extra commercium came to be accepted and applied to the business of manufacture and trade in potable liquor. This Court, however, did not place any embargo or constraints on the State to transact this business. History has painstakingly made it abundantly clear that prohibition has not succeeded. Therefore strict state regulation is imperative. The State of Kerala had in the past forayed into prohibition, but found it to be unimplementable. Thereafter, keeping in mind the heavy consumption of alcohol within the territory, it has experimented with other measures to user temperance if not abstemiousness. So far as this trade is concerned, Article 47 of the Constitution places a responsibility on every State Government to at least contain if not curtail consumption of alcohol. The impugned Policy, therefore, is to be encouraged and is certainly not to be struck down or discouraged by the Courts. How this policy is to be implemented, modified, adapted or restructured is the province of the State Government and not of the Judiciary. The consumption of tobacco as well as liquor is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fell to be decided in Surendra Das. An observation made in passing or obiter has persuasive value but is not binding on us. We appreciate that even at this stage it has been clarified on behalf of the State of Kerala that they intend to prohibit public consumption of alcohol even in Four Star and Heritage hotels. We cannot also lose sight of the fact that it is not the State which has imposed the classification of Star gradation of hotels. This is done by the Ministry of Tourism, which in turn is further guided by the criteria established in the hospitality trade. Placing a moratorium on all hotels other than Five Star hotels, therefore, is not a violation of Article 14 of the Constitution. The argument on behalf of the Appellants pertaining to impermissibility of sub-classification on the grounds that Section 15C of the Abkari Act creates a composite class of public places is not acceptable to us. The Explanation to this Section endeavours to include through iteration all public places. Its intent and purport is not to exclude some places; it cannot be read as a comprehensive definition; it is more of an illustration. At this juncture, it is nobody s case that some hotels ought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, 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. 29. We also note 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 Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Article 14 of the Constitution. In certain matters, as often said, there can be opinions and opinions but the Court is not expected to sit as an appellate authority on an opinion. We find 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. (2002) 2 SCC 333, 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. 31. Nonetheless, we must express our distress at the allegations made, not without some substance, that Five ..... X X X X Extracts X X X X X X X X Extracts X X X X
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