Allowed

Chithra Ramesh v. Excise Commissioner

Kerala HC11 Mar 2013WP(C)/12283/2011

Case brief

AI extract

What is this about?

The High Court of Kerala allowed the writ petition against an order rejecting the petitioner's application to transfer an FL3 liquor license from herself to Rajadhani Hotel (P) Ltd. The Court held that the requirement for a three-star classification did not apply as the term 'incumbent' referred to the person. The order was set aside with directions to reconsider. Preliminary acts: S. 226 Constitu

What did the court decide?

Exts.P7 and P8 set aside. Direction to the 1st respondent to reconsider Ext.P5 within one month and pass appropriate orders.

Chithra Ramesh Vs Excise Commissioner — Consumer Protection | Kerala HC (2013)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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MONDAY, THE 11TH DAY OF MARCH 2013/20TH PHALGUNA 1934

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WP(C).No. 12283 of 2011 (I)

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PETITIONER :

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CHITHRA RAMESH, PROPRIETRESS, HOTEL CHANAKYA, ULOOR, THIRUVANANTHAPURAM.

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BY ADVS.SRI.A.SUDHI VASUDEVAN SMT.K.PUSHPAVATHI

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RESPONDENT(S):

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1. THE EXCISE COMMISSIONER

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COMMISSIONERATE OF EXCISE,

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THIRUVANANTHAPURAM - 695 001.

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2. THE DEPUTY COMMISSIONER OF EXCISE,

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THIRUVANANTHAPURAM-695 001.

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3. RAJADHANI HOTEL (P) LTD.,

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RAJADHANI BUILDINGS, EAST FORT

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THIRUVANANTHAPURAM - 695 025,

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REPRESENTED BY ITS MANAGING DIRECTOR DR.BIJU RAMESH.

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4. STATE OF KERALA

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REP. BY UNDER SECRETARY TO GOVERNMENT

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TAXES (A) DEPARTMENT, GOVERNMENT OF KERALA

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THIRUVANANTHAPURAM - 695 001.

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R1, R2 & R4 BY GOVT. PLEADER SRI. NOUSHAD THOTTATHIL

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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...2/-

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WP(C).No. 12283 of 2011 (I)

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APPENDIX

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PETITIONER'S EXHIBITS :

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EXT.P1	: COPY OF THE FL3 LICENSE ISSUED TO THE PETITIONER BY THE 1ST RESPONDENT WHICH IS RENEWED UP TO 31.3.2012.
EXT.P2	COPY OF THE SEARCH REPORT DATED 25.9.2010 OF THE COMPANY SECRETARY.
EXT.P3	COPY OF THE ORDER DATED 21.11.2007 OF THE 1ST RESPONDENT.
EXT.P4	COPY OF THE CLASSIFICATION CERTIFICATE DATED 19.7.2010 ISSUED BY INDIA TOURISM (CHENNAI) GOVERNMENT OF INDIA TO THE HOTEL OF THE PETITIONER CLASSIFYING IT AS TWO STAR.
EXT.P5	COPY OF THE APPLICATION DATED 01.10.2010 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT THROUGH THE 2ND RESPONDENT.
EXT.P6	COPY OF THE JOINT APPLICATION SUBMITTED BY THE PETITIONER AND THE 3RD RESPONDENT BEFORE THE 1ST RESPONDENT.
EXT.P7	COPY OF THE ORDER DATED 4.3.2011 PASSED BY THE 1ST RESPONDENT.
EXT.P8	COPY OF THE ORDER 3.9.2011 ISSUED BY THE SECRETARY TAXES (A) DEPARTMENT, GOVERNMENT OF KERALA.
EXT.P9	NIL
EXT.P10	COPY OF THE PROCEEDINGS DATED 14.12.2010 ISSUED BY THE 2ND RESPONDENT IS PRODUCED HEREWITH AND MARKED AS
EXT.P11	COPY OF THE PROCEEDINGS DATED 12.1.2011 ISSUED BY THE JOINT COMMISSIONER OF EXCISE.

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RESPONDENT'S EXHIBITS : NIL

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A.M.SHAFFIQUE, J

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*** * * * * * * * * * * * *** W.P.C.No.12283 of 2011

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Dated this the 11^th day of March 2013

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J U D G M E N T

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The petitioner challenges Exts.P7 and P8. Ext.P7 is an order issued by the Excise Commissioner rejecting an application of the petitioner for transfer of a licence in the name of the petitioner to the 3^rd respondent. The relevant provision relating to transfer of licence is Rule 19 of the Foreign Liquor Rules (hereinafter referred as 'the Rules') which as it stood then reads as under:

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19. (i) under no circumstances shall any licence obtained under this notification be sold, transferred or sub rented without the previous sanction of the Excise Commissioner.

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(ii) Reconstitution of partnership by addition or deletion of members or reconstitution of Directors in a Company resulting in change of ownership which owns/manages or operates any licence issued

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W.P.C.No.12283/2011

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under this rule shall be deemed to be transfer of licence.

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(iii) Reconstitution of partnership / Directors of a company may be allowed on payment of [Rs.50,000 (rupees fifty thousand only)]

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(iv) Change of name of licensee may be allowed on payment of [Rs.2 Lakhs (Rupees two lakhs only)]

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Provided that such change shall be allowed only if the incumbent in whose name the licence is to be granted is eligible otherwise for obtaining a licence under these rules.

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Provided further that, constitution / reconstitution of partnership deed/Director Board of a Company will be allowed only if the hotel is having two star classification certificate issued by Ministry of Tourism, Government of India.

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The provision that applies in this case is Rule 19(i),

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(iv) and the first proviso. The request of the petitioner was rejected on the ground that the applicant's hotel, viz. Hotel

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W.P.C.No.12283/2011

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Chanakya, Ulloor, Thiruvnanthapuram is not having the minimum status of three star classification. The question is whether such a three star classification is required or not. Revision is filed before the Government against Ext.P7 and the Government dismissed the revision confirming the order passed by the Excise Commissioner.

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The main contention urged by the learned counsel for the petitioner is that Rule 19 does not anywhere indicate that the classification of the hotel should be changed from one category to another category. If it is a case where a new licence is being issued, the classification as on the date of issuance of licence matters, whereas in a case where the petitioner is only seeking transfer of licence from one person to another the classification of the hotel does not arise at all. In an earlier occasion it seems that the petitioner requested for a transfer of licence. The Excise department insisted that unless it is a two star facility hotel, no transfer is permissible. The petitioner therefore converted the hotel

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W.P.C.No.12283/2011

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into one having two star facility. But the application of the petitioner is rejected now mentioning that the hotel should have a three star classification.

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Learned Government Pleader based on the averment in the counter affidavit submits that as per Rule 13(3) of the Rules, as on the date of Ext.P7 FL3 licence will be granted only to hotels having three star facilities. Since the hotel did not have three star facilities, the Excise Commissioner was justified in having rejected the transfer of licence. According to the Government, the first proviso would clearly indicate that the hotel should have three star classification. Even the petitioner is aware of the fact that unless there is a star classification, a licence cannot be transferred. The star classification as on the date of application is considered for permitting transfer. That is why even on an earlier occasion when the petitioner sought for transfer, they accepted the principle that the hotel should have two star classification which was the rule position as on

W.P.C.No.12283/2011

that date.

Having regard to the aforesaid contentions, the question to be decided is whether the proviso to Rule 19 would indicate that the hotel should have three star classification or not. Rule 13 will not have any application as it relates to granting fresh licenses. Rule 19 contemplates a different situation which is independent of Rule 13.

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Therefore the question to be considered is the meaning of the word 'incumbent' in the proviso to Rule 19. In fact, a reading of Rule 19 and the various provisos would clearly indicate that the incumbent means the person in whose name the licence is issued. When the proviso indicates that the change will be allowed only if the incumbent in whose name the licence is to be granted is “eligible otherwise” for obtaining the licence under the Rules, it clearly relates to the person in whose name the licence is issued. In fact, the licence is always issued in the name of a person even if the licencee is a company,

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W.P.C.No.12283/2011

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partnership or any other form of association. Rule 13A(4) indicates that no licence of any of the descriptions shall be issued if the applicant has been convicted of any cognizable offence under various provisions of the Acts mentioned therein and that sub Rule 5 indicates that no licence of any of the descriptions shall be issued if the applicant is not financially solvent and incapable of discharging the responsibilities in the matter. Therefore, it could be seen that the personal details of the person in whose name the licence is to be issued also are factors to be taken into consideration before transferring the licence in favour of the company.

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In the present case, the request was to transfer the licence in the name of a proprietor/individual to that in the name of the company represented by a Managing Director in which the petitioner/applicant is also a Shareholder/Director. That being the situation, under the present circumstances, on a consideration of the Rule

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W.P.C.No.12283/2011

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position, I am of the view that the word 'incumbent' can only mean a person and cannot mean a hotel.

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That being the position, I am of the view that

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Exts.P7 and P8 are liable to be set aside. There shall be a direction to the 1^st respondent to consider Ext.P5 application in the light of the observations made above and pass appropriate orders within a period of one month from the date of receipt of a copy of this judgment.

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(sd/-)

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(A.M.SHAFFIQUE, JUDGE)

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jsr

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W.P.C.No.12283/2011 8

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W.P.C.No.12283/2011 9

Chithra Ramesh v. Excise Commissioner

Case brief

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Chithra Ramesh v. Excise Commissioner

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