Dismissed

Sri. Huli Chamunda Nayaka v. State of Karnataka

Karnataka HC9 Feb 2021WP/22496/2019

Case brief

AI extract

What is this about?

A public interest litigation challenging the grant of a CL-7 liquor licence to a boarding house and restaurant in a residential area near a school and hospital. The Court examined whether Rule 5 prohibitions apply to hotel/boardings vs liquor shops and held the CL-7 grant was valid as it catered only to guests and visitors within the premise.

What did the court decide?

The writ petition questioning the grant of the CL-7 liquor licence was dismissed.

Sri. Huli Chamunda Nayaka Vs State of Karnataka — Banking and Recovery | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 9^TH DAY OF FEBRUARY, 2021

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PRESENT

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THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA

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AND

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THE HON’BLE MRS.JUSTICE M.G.UMA

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W.P.No.22496/2019 (EXCISE)

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BETWEEN:

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Sri. Huli Chamunda Nayaka, S/o. Late H.N. Linga Nayaka, Aged about 58 years, R/at: Nayaka Kalyana Mantapa Road, Hullahalli, Nanjangud Taluk, Mysuru District -571 314.

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Sri. Mahadevappa, S/o. Late K. Marappa, Aged about 58 years, R/at: Gowdara Hundi, Chatra Hobli, Nanjangud Taluk, Mysuru District -571 314.

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Sri. Nagaraj, S/o. Made Gowda, Aged about 35 years, R/at. Dr. Rajkumar Road, Hullahalli, Nanjangud Taluk, Mysuru District -571 314.

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Sri. Nayaz Ahmed, S/o. Sirajuddin, Aged about 31 years, R/at. Hullahalli, Nanjangud Taluk, Mysuru District -571 314. 5. Sri. Chamaraj, S/o. Rajanna, Aged about 27 years, R/at. Taraganahalli, Nanjangud Taluk, Mysuru District -571 314. … Petitioners (By Sri. Muniyappa, Advocate)

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AND:

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State of Karnataka, Excise Department, Vikasa Soudha, Dr. B.R. AMbedkar Veedhi, Bengaluru -560 001.

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The Deputy Commissioner of Excise, Mysuru District, Mysuru -570 001. 3. Inspector of Excise, Nanjangud Circle, Nanjangud -571 301. 4. Chief Executive Officer, Taluk Panchayath, Nanjangud Taluk, Mysuru District – 571 314.

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The Gram Panchayath, Hullahalli, Nanjangud Taluk, Mysuru District -571 314.

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M/s. Lakshmi Narayana Bar and Restaurant, Hullahalli, Nanjangud Taluk, Mysuru District -571 314. Represented by its Proprietor, Sri. G.T. Sridhar.

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Sri. Girish T., S/o. Thimme Gowda, Aged about 46 years, R/at: 8^th Cross, R.P. Road, Nanjangud Town, Mysuru District -571 314.

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The Deputy Commissioner, Mysuru District, Mysuru -570 001.

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… Respondents

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(By Smt. Vani H. AGA for R1 to R3 and R8; Sri. Mohan Bhat, Advocate for R6 and R7, Sri. B.J. Somayaji,Advocate for R.5) R.4 served.

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This Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash Resolution dated 16.10.2018 no objection issued by Respondent No.5 Gram Panchayath to proceed with granting licence to Respondent No.6 as per produced at Annexure –F and direct Respondent No.5 not to grant CL-9 licence to Respondent No.6.

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This Petition coming on for Preliminary Hearing this day, NAGARATHNA, J., made the following:

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ORDER

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Though, this writ petition is listed for preliminary hearing,

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we have, nevertheless, heard learned counsel for the respective parties on the merits of the matter with their consent.

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This writ petition is stated to be filed in public interest. The petitioners are stated to be the permanent residents of Hullahalli village, Hullahalli Gram Panchayat, Nanjangud Taluk, Mysuru District. They have sought the following reliefs in this writ petition:

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“(a) Issue a writ of Certiorari to quash the Resolution bearing No.HU.GAR.PAM…./01/2018-19 dated 16.10.2018 No objection issued by the respondent no.5 Gram Panchayat to proceed with granting License to the Respondent No.6 as per produced at ANNEXURE-“F” and;

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(b) Issue a writ of certiorari to quash the Licence dated 31.07.2019 issued by the Deputy Commissioner, Mysuru District, Mysuru bearing Register No.EXE:Mysore/Nanjangud/45/CL-7 2019-20 (produced at ANNEXURE-J) and;

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(c) Pass any other order or direction as this Hon’ble Court may deem fit to grant in the circumstances of the above case, in the interest of justice and equity.

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INTERIM PRAYER

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Pending disposal of the above writ petition, it is humbly prayed that this Hon’ble Court may be pleased to pass an order directing the Respondents not to grant any CL-7 License to the Respondent No.6, in the interest of justice and equity.”

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According to the petitioners, they had given a representation to respondents No.1 to 3 herein restraining them from issuance of licence to respondent No.6, who has proposed to open a liquor shop in the name and style of “Lakshmi Narayana Bar and Restaurant” in property bearing No.3227 and 3227/1 in Hullahalli village, coming under Hullahalli Gram Panchayat. That respondent No.6 is making efforts to seek CL-7 licence for the purpose of running the said Bar and Restaurant, stated to be in a residential area, which is opposed to the guidelines issued by the Excise Department. That the Inspector of Excise Department had inspected the premises and submitted a report on 20.11.2017. Respondent No.5 in a meeting held on

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16.10.2018 took a decision to issue ‘ No Objection Certificate’ to respondent No.6 to run a Bar and restaurant, which is against the wishes of the public and the petitioners. The petitioners have no personal interest in the matter, but their object is to ensure that no wine shop or Bar is commenced in the Town. The petitioners have further stated that about 50 meters from the place where the liquor outlet/Bar and restaurant is to be located there is JSS college and a hospital by name Daniya Hospital and there is a Kalyanamantap, which is situated opposite the premises and nearby there is a temple. It is further averred by the petitioners that earlier the Deputy Commissioner of Excise, Mysuru District had stated that the place was not suitable for opening a liquor outlet and the Inspector of Excise, Nanjangud Zone in his report dated 20.11.2017 had stated that the place was not suitable to run a Bar and Restaurant. The Gram Panchayat had also passed a resolution which was contrary to the representation given by the petitioners. In the circumstances, petitioners contended that frantic efforts made by respondent No.6 to secure CL-7 licence to run a Bar and

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Restaurant is opposed to the interests of the general public as it would cause inconvenience and nuisance to them, therefore, the prayers have been sought.

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It is also averred that sanction of any such CL-7 licnece to respondent No.6 would be contrary to the Karnataka Excise Act, 1965, (hereinafter referred to as ‘Act’ for the sake of brevity) and also the Karnataka Excise (General Conditions of Licences) Rules, 1967 (hereinafter referred to as “General Conditions Rules, 1967”), particularly, Rule 5. In the circumstances, petitioners have sought the aforesaid prayers.

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In response to the petition, respondent No.6 has filed statement of objections stating that M/s Lakshmi Narayana Bar and Restaurant is a partnership firm comprising of four partners. That an application was filed before the Excise Department for sanction of CL-7 licence for sale of Indian liquor or Foreign liquor for the purpose of consumption in the premises which is a hotel and boarding house bearing No.3227/1, Dr. Rajkumar Road, Huallahalli Grama Panchayat, Nanjangud Taluk for the year

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2018-19. On the said application, the inspector of Excise, Nanjangud Range has prepared a detailed report and submitted to the Department. It has been reported by the Inspector of Excise, Nanjangud Range that the proposed premises does not violate Rule 5 of the General Conditions Rules, 1967 and the applicants have complied with Rule 3(7) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 (hereinafter referred to as “Rules, 1968” for short). That the Deputy Commissioner, Excise Department, Mysore also inspected the premises and recommended for sanction of CL-7 licence in favour of the applicants for the year 2018-19. The Excise Commissioner, Karnataka by his proceedings dated 07.06.2019 accorded permission for issuance of CL-7 licence in favour of the applicants with effect from 30.06.2019. That the applicants obtained licence CL-7 for the years 2018-19 and 2019-20 on compliance of all the conditions mentioned under Rules, 1967, as well as Rules, 1968.

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It is also averred that M/s Mysore Sales International Limited (hereinafter referred to as ‘MSIL’ for brevity), a

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Government agency, had filed an application for sanction of CL11-C licence for the year 2018-19 with effect from 30.06.2019 for premises bearing No.3227/1, site No.10, Hullahalli Village, Nanjangud Taluk. That was only for the purpose of vending liquor in sealed bottles to the customers and the same is CL-2 licence. But, when it is issued to a Government agency, it is a CL-11-C licence. The proposal of MSIL has not been considered. That the issuance of CL-7 licence to respondent No.6 is not for a liquor outlet, as such, but for service of liquor in the Bar and restaurant, which is housed in a boarding house. Therefore, petitioners cannot have any grievance with regard to issuance of licence to respondent No.6. Hence, respondent No.6 sought for dismissal of the Writ petition.

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We have heard learned counsel for the petitioners and learned counsel for respondent No.6 as well as learned Additional Government Advocate appearing for respondents No.1 to 3 and 8 and perused the material on record.

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Leaned counsel for the petitioners drew our attention to Rule 5 of the General Conditions Rules, 1967 and contended that the issuance of CL-7 licence in the instant case violates the said Rule. That earlier M/s MSIL had sought for locating liquor outlet in the very same premises, but, respondent had not sanctioned the same. Insofar as respondent No.6 is concerned, CL-7 licence has been issued in close proximity of a school, also there is a Kalyana mantap and a hospital, therefore, there can be no sale of liquor in the vicinity of such places. There is violation of Rule 5 of the General Conditions Rules, 1967 and hence, this public interest litigation calls for interference by this Court so as to quash CL-7 licence issued to respondent No.6, that too during the pendency of this writ petition.

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In this regard, learned counsel for the petitioners drew our attention to the interim order dated 17.06.2019 passed by a co-ordinate Bench of this Court to the effect that, the application for grant of licence made by sixth respondent would be subject to further orders to be made in the writ petition.

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Learned counsel for the petitioners summed up his

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contention by contending that the issuance of CL-7 licence to respondent No.6 is not in the interest of general public and therefore, same may be quashed in the instant case.

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Per contra, learned counsel for respondent No.6 with reference to his statement of objections contended that the issuance of licence to MSIL, which is in the form of CL-11-C licence is totally distinct from issuance of CL-7 licence to respondent No.6 herein. He contended that respondent No.6 is not having a liquor outlet and that the sale of liquor is in a Bar and Restaurant, which is located in the boarding house, which has complied with all the conditions required under Rule 3(7) of Rules, 1968. That, unless the boarding house complies with all the conditions stipulated therein, CL-7 licence would not be issued for sale of liquor and intoxicants in a restaurant or in the boarding house. It was contended that the reasons for rejection of the establishment of liquor outlet by MSIL under CL-11-C licence in the said locality cannot be the reason for refusal to

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grant or cancel the licence already granted to respondent No.6 which is in the form of CL-7 licence.

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Learned counsel further submitted that the petition is also not filed in public interest, inasmuch as petitioner No.3 has let out his premises to a liquor outlet and respondent No.4 is working in a liquor outlet and therefore, they have not filed this petition in public interest. That this is only a private interest litigation. Learned counsel further submitted that already there are three liquor outlets in Hullanahalli village and petitioners have no grievance about the establishment of those three outlets, whereas CL-7 licence issued to respondent No.6 herein is not a shop which is located on any road side, but it is inside the building which is a boarding house and also has the facility of Bar and restaurant and that the persons who would be visiting the Bar and restaurant would be either staying in the boarding house or others, who would visit the bar and restaurant for the purpose of consumption of beverage, liquor and food. That, there can be no apprehension that school children or others would visit the Bar and Restaurant, which is located in a building for the purpose

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of consumption of liquor. It is not the same thing as locating a liquor outlet as per CL-2 licence on the roadside, therefore, the writ petition has to be dismissed as there is no merit in the same.

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Learned Additional Government Advocate appearing for the official respondents No.1 to 3, with reference to his statement of objections, submitted that there is no contravention of Rule 5 of the General Conditions Rules, 1967 or Rules, 1968 and there is no merit in the writ petition.

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We have narrated in detail the facts and contentions in

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the instant case and the same would not call for reiteration. Admittedly, in the instant case, licence issued is a CL-7 licence. Such a licence is granted under 1968 Rules. The said Rules deal with grant of licence for the sale of Indian made inter alia Foreign liquors. Rule 3 of the said Rules deals with licences for vend of Indian liquor (other than arrack) or foreign liquor or both subject to certain conditions and shall be of the following descriptions: Retail off shop licences for vend of Indian liquor or

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Foreign or both not to be drunk on the premises and then licence to Clubs, Occasional licences, Special licences, Star Hotel licences, Hotel and Boarding House licences, Tourist Hotel licences, Tourist Hotel Beer Bar licences, licence to supply liquor on Board of Train Engaged and run by Tourism Development Corporation of State Government or Central Government, Military canteen licences, Military Canteen Stores Bonded Warehouse Licences, Boarder Security Force or Para Military forces licences, Refreshment room (bar) licences, Auctioneers licences, Distributor licence, Distributor licence to sell foreign liquor, etc.

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In the instant case, CL-7 licence has been issued to respondent No.6, which is under Rule 3(7) of the Rules, 1968, which speaks of hotel and boarding house licence. The conditions for issuance of such licence are stipulated in the said provision which reads as under:

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“3. Licences – Licences for the vend of

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[Indian Liquour (other than arrack)] or Foreign

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liquor or both shall be of the following descriptions,

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namely.-

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(1) x x x x

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(7) Hotel and Boarding House Licences. –

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(a) A licence under this clause shall be applied for and obtained in Form CL-7 from the Deputy Commissioner.

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(b) No liquor under this licence shall be sold to persons other than those accommodated in the licenced hotel and boarding houses and their guests and casual visitors who take meals in such places.

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Provided that no licence under this clause shall be granted unless the hotel and boarding house is having a minimum of fifteen double rooms) in Corporation areas and ten double rooms) in other areas.

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Provided further that the licences grated under this clause for the excise year 2001-2002 shall be allowed to renew the licences under the rule existing prior to the commencement of the Karnataka Excise (Sale of Indian and Foreign Liquors)(First Amendment) Rules, 2002.

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Provided further more that in respect of Hotels and Boarding Houses leased by the Karnataka State Tourism Development Corporation to private persons, firm or companies on renovate, operate, maintain and transfer (ROMT) basis, while granting

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renewing the licences under this clause, the Excise Commissioner may relax the condition regarding the minimum requirement of fifteen double rooms in Corporation areas and ten double rooms in other areas.”

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It is noted from the record that respondent No.6 has complied with the conditions stipulated therein inasmuch as respondent No.6 must have a minimum of ten double rooms in the boarding house and the availability of the facility for vending liquor is not only for those who are guests in the said boarding house, but also for casual visitors, who may have their meal in the hotel, Bar and Restaurant or in the said boarding house.

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The conditions as per General Conditions Rules, 1967, under which Rule 5(1) is relevant, is also subject to certain regulations. Essentially sub-rule (1) of Rule-5 states that, no licence for sale of liquor shall be granted to liquor shops or premises located within a distance of 100 meters from any Religious or Educational institutions or Hospitals or any Office of the State Government or Central Government or Local authorities or in a residential locality, where the inhabitants are

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predominantly belonging to Scheduled Castes or Scheduled Tribes or within a distance of 220 meters from the middle of the State Highways or National Highways. As already noted, there are certain provisos to the said sub-rule, which are in the form of relaxation.

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Also the distinctions between Rule 5 of the General Conditions Rules, 1967 and Rules, 1968, would have to be noted. Rule 5 of the General Conditions Rules, 1967, is essentially applicable to liquor shop or premises, whereas Rules, 1968 are Special Rules with regard to sale of Indian liquor (other than arrack) or Foreign liquor in certain places described in Rule 3 of the said Rules, such as, hotels and boarding houses. Therefore, grant of CL-7 licence to respondent No.6 cannot be equated to grant of CL-2 licence to a liquor outlet .

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In the instant case, sale of liquor is in a boarding house, in a Bar and restaurant, which is housed in the boarding house to cater to the guests, who occupy the boarding house or to casual visitors. There can be no apprehension about school

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children or other such persons being tempted to visit the boarding house. This is in contrast to a case of grant of CL-2 licence to a liquor outlet, where the conditions of Rule 5 of the General Conditions Rules, 1967 would apply and have to be complied with.

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Thus, in the instant case, we find that the apprehension expressed by the petitioners is not well founded, inasmuch as the grant of licence in the instant case is in accordance with law. If, earlier, objection was raised with regard to the establishment of MSIL licence, i.e, in the form of CL-11-C licence in the village, the rejection of the same may be for the reasons as alleged therein. But, those reasons cannot be a good ground to grant of CL-7 licence in the instant case and the same cannot be imported to the instant case. Therefore, we do not find any merit in the petition.

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The writ petition is, hence, dismissed.

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Sd/JUDGE

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Sd/JUDGE

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psg*

Sri. Huli Chamunda Nayaka v. State of Karnataka

Case brief

What is this about?

What did the court decide?

Sri. Huli Chamunda Nayaka v. State of Karnataka

Case brief

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