STATE OF KERALA & ANR.versusB. SIX HOLIDAY RESORTS (P) LTD. & ETC.

                      [2010] 3 S.C.R. 1


                STATE OF KERALA & ANR.                           A
                               v.
       B. SIX HOLIDAY RESORTS (P) LTD. & ETC.
          (C.A. Nos. 983-990 of 2003 & Ors. Etc.)
                     JANUARY 13, 2010
                                                                 B
          [R.V. RAVEENDRAN AND SURINDER
                  SINGH NIJJAR, JJ.]

     Foreign Liquor Rules: (Kera/a)
                                                                 c
        r. 13(3), last proviso (as substituted on 20.2.2002 w.e.f.
.1. 7. 2001) - Effect of on pending applications for FL-3 Licence
 - Applications for grant of licence made in the years 2000 and
 2001 - Rejected on 20.2.2002, keeping in view the Rules as
 in force on 20. 2. 2002 -c.JfELD: Having regard to the fact that D
 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 - The application for licence requires
 verification, inspection and processing - In such
 circumstances, · the application for FL-3 licence should be E
 decided only with reference to the rules/law prevailing or in
 force on the date of consideration of the application and not
 as on the date of application - Consequently, the direction
 by the High Court that the application for licence should be
considered with reference to the Rules as they existed on the F
date of application cannot be sustained and is set aside -
Abkari Act 61 of 1977 (Kera/a) - Liquor. [Para 15-16]

      r. 13(3), last proviso (as substituted on 20.2.2002) -
Proviso challenged as being beyond the main provision in G
r. 13(3) - HELD: A proviso may either qualify or except certain
provisions from the main provision or it can change the very
concept of the intendment of the main provision by
incorporating certain mandatory conditions to be fulfilled or it
                              1                                  H
    2        SUPREME COURT REPORTS                 [2010] 3 S.C.R.


A    can temporarily suspend operation of the main provision -
     Ultimately, the proviso has to be construed upon its terms -
     Merely because it suspends or stops further operation of the
     main provision, the proviso does not become invalid - If the
    policy is not open to challenge, the amendments to
s    implement the policy are also not open to challenge - In the
     instant case, when the amendment was made on 20.2.2002,
     the object of the newly added proviso was to stop the grant of
     fresh licences until a policy was finalized - Rule 13(3)
    provides for grant of licences to sell foreign liquor in Hotels
c    (Restaurants) - It contemplates the Excise Commissioner
     issuing licences under the orders of the State Government in
     the interest of promotion of tourism in the State, to hotels and
    restaurants conforming to standards specified therein - It also
    provides for the renewal of such licences - The substitution
     of the last proviso tor. 13(3) by Notification dated 20.2.2002
0
    providing that no new licences under the said Rule shall be
    issued, does not nullify the licences already granted -Nor
    does it interfere with renewal of the existing licences - If on
    account of the fact that sufficient licences had already been
E   granted or in public interest, the State takes a policy decision
    not to grant further licences, it cannot be said that the same
     would defeat the Rules - It merely gives effect to the policy
    of the State not to grant fresh licences until further orders -
     The challenge to the validity of the proviso is therefore
    rejected - It is clarified that (i) if any licences have been
F   granted or regularized in the case of any of the applicants
    during the pendency of this litigation, on the basis of any
    further amendments to the Rules, the same will not be
    affected by this decision; (ii) if any licence has been granted
    in pursuance of any interim order, the licence shall continue
G   till the expiry of the current excise year for which the licence
    has been granted and (iii) this decision will not come in the
    way of any fresh application being made in accordance with
    law or consideration thereof by the State Government. [Para
    17-18]
H
    STATE OF KERALA & ANR. v. B. SIX HOLIDAY                  3
            RESORTS (P) LTD. & ETC.
     Ku/deep Singh v. Govt. of NCT of Delhi 2006 (3) Suppl.       A
SCR 335 = (2006) 5 SCC 702; State of Tamil Nadu v. Hind
                                 =
Stone & Ors. 1981 (2) SCR 742 1981 (2) SCC 205; Union
of India & Ors. v. Indian Charge Chrome & Anr. (1999) 7 SCC
314; Municipal Corporation v. Ganges Rope Co.Ltd. 2003 (6)
                    =
Suppl. SCR 1212 (2004 (1)        sec  663, relied on.             s
                   Case Law Reference:
  2006 (3) Suppl. SCR 335        relied on       para 9
  1981 (2) SCR 742               relied on       para 10.1
                                                                  c
  (1999) 1   sec 314             relied on        para 10.2
  2003 (6) Suppl. SCR 1212 relied on             para 11

    CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
983-990 of 2003.                                                  D

     From the Judgment & Order dated 16.07.2002 of the High
Court of Kerala at Ernakulam in O.P. Nos. 7112, 7868 & 9963
of 2002 and W.A. Nos. 910, 951, 962, 1423 & 1444 of 200~.

                            WllH                                  E

    C.A. Nos. 999-1003 of 2003 & 998 of 2003.

     P.P. Rao, Jaydeep Gupta, G. Prakash, B. Anand,
Pratheek Viswanathan, Beena Prakash, Roy Abraham, Seema           F
Jain, Himinder Lal, E. M. S. Anam, Sunil Kumar Jain for the
appearing parties.

    The Judgment of the Court was delivered by:

                         ORDER                                    G
     R.V. RAVEENDRAN, J. 1. The appeals relate to non-grant
of FL-3 Licence under the Foreign Liquor Rules ('the rules' for
short) framed under the Akbari Act. The appeals arise from the
common judgment dated 16.7.2002 of the Kerala High Court          H
    4       SUPREME COURT REPORTS                  [2010] 3 S.C.R.


A   in a batch of cases wherein the amendment dated 20.2.2002
    to Rule 13(3) of the Rules and consequential rejection of
    applications for FL-3 licences were challenged. CA Nos. 983-
    990 of 2003 are filed by the State and the other appeals are
    by the applicants for FL-3 licences.
B
         2. For convenience, we will refer to the facts of the case
    of Mis. B.Six Holiday Resorts (P) Ltd. (referred to as 'the
    applicant' for short), who is the respondent in C.A. No. 983 of
    2003 and the appellant in C.A. No. 998 of 2003.

C       3, The applicant constructed a resort hotel at Munnar. The
  applicant's restaurant therein was classified by the Ministry of
  Tourism, Government of India, as an approved restaurant. On
  11.12.2000, the applicant made an application for a FL-3
  licence under the Rules. As the said application was not
D considered, the applicant approached the High Court. The High
  Court, disposed of the writ petition (O.P.No.824/2001) by order
  dated 9.1.2001 with a direction to the excise authorities to
  consider and dispose of the application within three weeks. The
  application was considered and rejected by order dated
E 19.5.2001 on the ground that the Managing Director of the
  applicant had been convicted in an excise offence. The said
  rejection was challenged in O.P. No. 17106/2001 contending
  that the person convicted was not the Managing Director when
  the application was made. The second writ petition was allowed
F on 20.6.2001 with a direction to re-consider the application and
  pass a fresh order, taking note of the fact that the convicted
  Managing Director was no longer in office and there was new
  Managing Director at the time of the application. The Special
  Secretary (T-axes), Government of Kerala, reconsidered the
  applicc:ition and by order dated 6. 10.2001 rejected the
G application on following four grounds: (I) the applicant was not
  a classified restaurant as contemplated under Rule 13(3) of the
  Rules; (ii) the facilities contemplated under Rule 13(3) were not
  available in the applicant's hotel; (iii) only hotels run by Kerala
  Tourism Development Corporation and India Tourism
H
    STATE OF KERALA & ANR. v. B. SIX HOLIDAY                  5
  RESORTS (P) LTD. & ETC. [R.V. RAVEENDRAN, J.]

  Development Corporation were entitled to FL-3 licences; and A
  (iv) the current policy of the government was not to grant any
 fresh licences. The applicant filed yet another writ petition (O.P.
  No. 31993/2001) challenging the rejection. A learned Single
 Judge dismissed it by order dated 6.11.2001. He held that
 though the first three grounds of rejection were not tenable, in B
 view of policy of the Government not to grant FL-3 licences for
 the time being, a mandamus could not be issued to the State
 Government to grant a licence contrary to its policy. The writ
 appeal filed by the applicant was allowed on 14.12.2001. The
 Division Bench of the High Court agreed with the learned single C
 Judge that the first three grounds of rejection were not tenable.
 In regard to the fourth ground of rejection, the division bench
 felt that the policy put forth, was rather vague and the
 Government cannot abdicate its function under the Rules to
·consider and grant licences, by alleging some vague policy. It D
 therefore directed the Excise Commissioner to decide the
 applicant's application for FL-3 licence within two weeks by a
 speaking order.

      4. Thereafter, the applicant gave a representation dated
 19.12.2001. The Excise Commissioner considered it and again E
 rejected the application on 27 .12.2001 on the ground that the
applicant's hotel was only a restaurant approved by Ministry of
Tourism, Government of India, but it was not a classified
restaurant (two star and above) as required under Rule 13(3).
Feeling aggrieved, the applicant initiated contempt F
proceedings. The High Court on being informed that a new
Excise Commissioner had taken charge, granted an opportunity
to the new incumbent to reconsider the matter and pass a fresh
order by 22.2.2002. At that stage, by notification dated
20.2.2002, the Foreign Liquor Rules were amended by foreign G
Liquor (Amendment) Rules, 2002, with retrospective effect from
1.7.2001. By the said amendment, the last proviso under sub-
Rule (3) of Rule 13 was substituted by the following proviso:

     "Provided that no new licence$ under this Rule shall be
     issued."                                                     H
    6        SUPREME COURT REPORTS                 [2010] 3 S.C.R.


A   The notification contained the following explanatory note to
    indicate the purpose of the amendment:
                                                                   •
         "Government have decided as its policy not to grant any
         new FL-3 Hotel (Restaurant) Licences and also decided
         not to renew any defunct licences of the above category
8
         with effect from 1.7.2001 until further orders. In order to
         carry out the above decision, necessary amendments have
         to be made in the relevant rules"

    On the same date, i.e. 20.2.2002, the Excise Commissioner
C   considered the application of the applicant and again. rejected
    the request for grant of licence in view of proviso to the
    amended rule, prohibiting grant of new licences.

        5. The applicant challenged the amendment to the Rule
  and the consequential ·" rejection of its application in O.P. No.
0
  7112 of 2002. The said writ petition (along with other writ
  petitions and writ appeals involving similar issue) were
  disposed of by the impugned order dated 16.7.2002. The High
  Court considered the following four grounds of challenge: (a)
E that the repeated rejection of the application by the Excise
  department and the amendment of the Rules by notification
  dated 20.2.2002 were unreasonable, arbitrary and was in bad
  faith and was, therefore, liable to be interfered; (b) that the
  proviso to Rule 13(3) was invalid as it was violative of the main
  Rule; (c) that the amendment to the Rules by notification date
F 20.2.2002, was bad as it was made merely get over the
  judgment of the High Court directing fresh consideration; and
  (d) that giving retrospective effect to the Rules was beyond tt:le
  rule making power of the State Government under the Act. The
  High Court rejected the ground (a),(b) and (c) and upheld the
G validity of the amendment. It however accepted ground (d) and
  declared that the retrospective effect given to the last proviso
  to Rule 13(3) added by notification dated 20.2.2002 was illegal
  and unenforceable and that the amendment would be effective
  only prospectively from the date of issue, that is with effect from
H
\

       STATE OF KERALA & ANR. v. B. SIX HOlJDAY                      7
     RESORTS (P) LTD. & ETC. [R.V. RAVEENDRAN, J.]
    20.2.2002. As a consequence, the court directed the excise            A
    authorities to consider the application dated 19.12.2001
    (.preceded by application dated 11.1,2.2000) submitted by the
    applicant (and reiterated on 19.12.2001) on the basis of the
    rules as were operative as on 19.12.2001. In other words, the
    High Court held that the application had to be considered with        B
    reference to the rules as they existed on the date of application
    and not on the date of consideration of the application.

         6. The State has cl1allenged the said judgment rendered
    in the case of the applicant and other similar matters in the first
    batch of appeals (CA Nos. 983 to 990 of 2003). The State has          C
    accepted the finding of the High Court that the retrospective
    operation of the rules is bad and that the amendment should
    be given effect only prospectively. But it is aggrieved by the
    direction that the applications filed by the applicants for FL-3
    licences should be considered on the basis of the rules as they       D
    stood on the date of application. It is submitted by the State
    that the Court ought to have directed the applications for FL-3
    licences to be considered with reference to the rules in force
    when the application was considered.
                                                                          E
         7. The applicant, as also other restaurateurs whose
    applications for FL-3 licences made in the years 2000 and
    2001 were also rejected, have challenged the decision of the
    High Court upholding the validity of the amendment and non-
    grant of licence in CA No. 998 of 2003 and CA Nos. 999-1003
                                                                          F
    of 2003.

        8. Two issues arise for consideration on the contentions
    urged:

          (i)   Whether an application for grant of FL-3 Licence          G
                should be considered with reference to the Rules
                as they existed when the application was made or
                in accordance with the Rules in force on the date
                of consideration?
                                                                          H
                   •


     8           SUPREME COURT REPORTS                [2010] 3 S.C.R.

A         (ii)     Whether the amendment to Rule 13(3) of Foreign
                   Liquor Rules substituting the last proviso is valid?
    Re : Question (i)

       9. This question is directly covered by the decision of this
B Court in Ku/deep Singh v. Govt. of NCT of Delhi (2006) 5 SCC
  702 relating to grant of licences for sale of Indian made foreign
  liquor. This Court held:

         "It is not in dispute that the State received a large number
c        of applications. It was required to process all the
         applications. While processing such applications,
         inspections of the proposed sites were to be carried out
         and the contents thereof were required to be verified. For
         the said purpose, the applications were required to be
         strictly scrutinized. Unless, therefore, an accrued or vested
D
         right had been derived by the Appellants, the policy
         decision could have been changed. What would be an
         acquired or accrued right in the present situation is the
         question.
E                 xx xx                 xx xx

         In case of this nature where the State has the exclusive
         privilege and the citizen has no fundamental right to carry
         on business in liquor, in our opinion the policy which would
F        be applicable is the one which is prevalent on the date of
         grant and not the one, on which the application had been
         filed. If a policy decision had been taken on 16.9.2005 not
         to grant L-52 licence, no licence could have been granted
         after the said date.
G        10. We may in this context refer to some earlier decision
    laying down the principle that applications for licences have to
    be considered with reference to the law prevailing on the date
    of consideration.

H        (10.1) In State of Tamil Nadu v. Hind Stone & Ors. (1981
   STATE OF KERALA & ANR. v. B. SIX HOLIDAY                    9
 RESORTS {P) LTD. & ETC. [R.V. RAVEENDRAN, J.]

(2) sec 205), this, Court considered the validity of government     A
action in keeping applications pending for long and then
rejecting them by applying a rule subsequently made. This Court
while holding that such action is not open to challenge observed:

    "The submission was that it was not open to the
                                                                    8
    Government to keep applications for the grant of leases
    and applications for renewal pending for a long time and
    then to reject them on the basis of Rule 8C notwithstanding
    the fact that the applications had been made long prior to
    the date on which Rule 8C came into force. While it is true
    that such applications should be dealt with within a            C
    reasonable time, it cannot on that account be said that the
    right to have an application disposed of in a reasonable
    time clothes an applicant for a lease with a right to have
    the application disposed of on the basis of the rules in
    force at the time of the making of the application. No one      D
    has a vested right to the grant or renewal of a lease and
    none can claim a vested right to have an application for
    the grant or renewal of a lease dealt with in a particular
    way, by applying particular provisions. In the absence of
    any vested rights in anyone, an application for a lease has     E
    necessarily to be dealt with according to the rules in force
    on the date of the disposal of the application despite the
    fact that there is a long delay since the making of the
    application".
                                                                    F
    (10.2) We may next refer to the decision in Union of India
& Ors.- V. Indian Charge Chrome & Anr. (1999) 7 SCC 314
wherein this Court held:

    "Mere making of an application for registration does not
    confer any vested right on the applicant. The application       G
    has to be decided in accordance with the law applicable
    on the date on which the authority granting the registration
    is called upon to apply its mind to the prayer for
    registration."
                                                                    H
    10       SUPREME COURT REPORTS                    [2010] 3 S.C.R.


A      11. The applicant contended that it had a vested right
  because of the several time-bound orders of the High Court and
  those orders were deliberately floated by the Excise authorities.
  An identical contention was rejected by this Court while
  considering the issue with reference to sanction of a licence
B under the Building R_ules, in Howrah Municipal Corporation v.
  Ganges Rope Co.Ltd. (2004 (1) SCC 663). This Court held:

         "Neither the provisions of the Act nor general law creates
         any vested right, as claimed by the applicant company for
         grant of sanction or for consideration of its application for
c        grant of sanction, on the then existing Building Rules as
         were applicable on the date of application. Conceding or
         accepting such a so-called vested right of seeking sanction
         on the basis of unamended Building Rules, as in force on
         the date of application for sanction, would militate against
D        the very scheme of the Act contained in Chapter XII and
         the Building Rules which intend to regulate the building
         activities in a local area for general public interest and
         convenience. It may be that the Corporation did not adhere
         to the time limit fixed by the court for deciding the pending
E        applications of the co91pany but we have no manner of
         doubt that the Building Rules with prohibition or restrictions
         on construction activities as applicable on the date of grant
         or refusal of sanction would govern the subject matter and
         not the Building Rules as they existed on the date of
F        application for sanction. No discrimination can be made
         between a party which had approached the court for
         consideration of its application for sanction and obtained
         orders for decision 'of its application within a specified time
         and other applicants whose applications are pending
G        without any intervention or order of the court.

               xx xx                   xx xx

         The context in which the respondent Company claims a
         vested right for sanction and which has been accepted by
H        the Division Bench of the High Court, is not a right in
    STATE OF KERALA & ANR. v. B. SIX HOLIDAY                          11
  RESORTS (P) LTD. & ETC. [R.V. RAVEENDRAN, J.]
       relation to "ownership or possession of any property" for            A
     . which the expression "vest" is generally used. What we can
       understand from the claim of a "vested right" set up by the
       respondent Company is that on the basis of the Building
       Rules, as applicable to their case on the date of making
       an application for sanction and the fixed period allotted by         B
       the Court for its consideration, it had a "legitimate" or
       "settled expectation" to obtain the sanction. In our
       considered opinion, such "settled expectation", if any, did
        not create any vested right to obtain sanction. True it is,
       that the respondent Company which can have no control                c
       over the manner of processing of application for sanction
        by the Corporation cannot be blamed for delay but during
       pendency of its application for sanction, if the State
       Government, in exercise of its rule-making power,
       amended the Building Rules and imposed restrictions on
                                                                            D
       the heights of buildings on G.T. Road and other wards,
       such "settled expectation" has been rendered impossible
       of fulfilment due to change in law. The claim based on the
       alleged "vested right" or "settled expectation" cannot be
       set up against statutory provisions which were brought into
       force by the State Government by amending the Building               E
       Rules .................................... "

          12. Where the Rule require grant of a licence subject to
   fulfillment of certain eligibility criteria either to safeguard public
   interest or to maintain efficiency in administration, it follows that    F
   the application for licence would require consideration and
   examination as to whether the eligibility conditions have been
   fulfilled or whether grant of further licences is in public interest.
   Where the applicant for licence does not have a vested interest
   for grant of licence and where grant of licence depends on               G
.. •ious factors or eligibility criteria and public interest, the
   consideration should be with reference to the law applicable
   on the date when the authority considers applications for grant
   of licences and not with reference to the date of application.
                                                                            H
    12      SUPREME COURT REPORTS                   [2010] 3 S.C.R.


A         13. The applicant submitted that it had originally filed an
    application on 11.12.2000 and in pursuance of the decision of
    the High Court on 14.12.2001, it submitted an application on
    19.12.2001 and that application was considered and disposed
    of on 27.12.2001. The applicant contended that even if the
B   principle laid down in Ku/deep Singh was applied, the
    application having been considered and disposed of by the
    concerned authority on 27.12.2001, the law in force on that day
    ought to have been applied. The applicant further contended
    that the amendment to the rules which came into effect only on
c   20.2.2002, was not applicable on 27.12.2001 and therefore the
    rejection on 27.12.2001 was bad and consequently the
    impugned order of the High Court may be construed as
    requiring the authority to decide the matter as on 27.12.2001.
    We find that the said contention does not have any merit. It is
    true that the application was given on 19.12.2001. It is true that
0
    the application was considered and rejected on 27.12.2001 on
    a ground which may', not be sound. It is also true that the
    amendment to the rules which was introduced by notification
    dated 20.2.2002 was not in force or effect on 27.12.2001. But
E   the said order dated 27.12.2001 was neither challenged nor
    set aside by the High Court. The applicant chose to file a
    contempt application alleging that the excise authorities had
    disobeyed the order dated 14.12.2001. In the contempt case,
    the High Court made an order on 12.2.2002 that the new Excise
    Commissioner should pass an order on the application.
F   Therefore the only question is whether the order passed by the
    Excise Commissioner on 20.2.2002 was in accordance with
    the Rules as they stood on 20.2.2002. Under the amended
    rules, no new FL-3 licence could be issued. Consequently, the
    rejection of the application by order dated 20.2.2002 was in
G   accordance with the rules and cannot be faulted.

       14. Learned counsel appearing for the applicant next
  contended that the decision in Ku/deep Singh was not with
  reference to any statutory rules, but with reference to a policy
H of the executive and therefore inapplicable. We find no force
   STATE OF KERALA & ANR. v. B. SIX HOLIDAY                    13
 RESORTS (P) LTD. & ETC. [R.V. RAVEENDRAN, J.]
in this argument. It is true that in that case there were no         A
statutory rules and what was considered was with reference to
a policy. But the ratio of the decision is that where licence
sought related to the business of liquor, as the State has
exclusive privilege and its citizens had no fundamental right to
carry on business in liquor, there was no vested right in any        B
applicant to claim a FL-3 licence and all applications should
be considered with reference to the law prevailing as on the
date of consideration and not with reference to the date of
application. Whether the issue relates to amendment to Rules
or change in policy, there will be no difference in principle.       c
Further the legal position is no different even where the matter
is governed by statutory rules, is evident from the decisions in
Hind Stone (supra) and Howrah Municipal Corporation (supra).

      15. Having regard to the fact that the State has exclusive
privilege of manufacture and sale of liquor, and no citizen has      D
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      E
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. Consequently the direction by the High
Court that the application for licence should be considered with     F
reference to the Rules as they existed on the date of application
cannot be sustained.

Re: Question (ii)

     16. The applicants for licence submitted that Rule 13(3)        G
contemplates FL-3 licences being granted on fulfillment of the
conditions stipulated therein; and the newly added proviso, by
barring grant of new licence had the effect of nullifying the main
provision itself. It was contended that the proviso to Rule 13(3)
added by way of amendment on 20.2.2002 was null and void             H
    14       SUPREME COURT REPORTS                   [2010] 3 S.C.R.


A   as it went beyond the main provision in Rule 13(3) and nullified
    the main provision contained in Rule 13(3).

          17. Rule 13(3) provides for grant of licences to sell foreign
    liquor in Hotels (Restaurants). It contemplates the Excise
     Commissioner issuing licences under the orders of the State
8
     Government in the interest of promotion of tourism in the State,
    to hotels and restaurants conforming to standards specified
    therein. It also provides for the renewal of such. licences. The
     substitution of the last proviso to Rule 13(3) by the notification
    dated 20.2.2002 provided that no new licences under the said
C    Rule shall be issued. The proviso does not nullify the licences
     already granted. Nor does it interfere with renewal of the existing
     licences. It only prohibits grant of further licences. The issue of
    such licences was to promote tourism in the State. The
    promotion of tourism should be balanced with the general
D   public interest. If on account of the fact that sufficient licences
    had already been granted or rn public interest, the State takes
    a policy decision not to grant further licences, it cannot be said
    to defeat the Rules. It merely gives effect to the policy of the
    State not to grant fresh licences until further orders. This is
E   evident from the explanatory note to the amendment dated
    20.2.2002. The introduction of the proviso enabled the State
    to assess the situation and reframe the excise policy. It was
    submitted on behalf of the State Government that Rule 13(3)
    was again amended with effect from 1.4.2002 to implement a
F   new policy. By the said amendment, the minimum eligibility for
    licence was increased from Two-star categorization to Three-
    Star categorization and the ban on issue of fresh licences was
    removed by deleting the proviso which was inserted by the
    amendment dated 20.2.2002. It was contended that the
G   amendments merely implemented the policies of the
    government from time to time. There is considerable force in
    the contention of the State. If the State on a periodical re-
    assessment of policy changed the policy, it may amend the
    Rules by adding, modifying or omitting any rule, to give effect
H   to the policy. If the policy is not open to challenge, the
  STATE OF KERALA & ANR. v. B. SIX HOLIDAY                           15
RESORTS (P) LTD. & ETC. [R.V. RAVEENDRAN, J.]
amendments to implement the policy are also not open to                    A
challenge. When the amendment was made on 20.2.2002, the
object of the newly added proviso was to stop the grant of fresh
licences until a policy was finalized. A proviso may either qualify
or except certain provisions from the main provision; or it can
change the very concept of the intendment of the main provision            B
by incorporating certain mandatory conditions 'o be fulfilled; or
it can temporarily suspend the operation of the main provision.
Ultimately the proviso has to be construed upon its terms.
Merely because it suspends or stops further operation of the
main provision, the proviso does not become invalid. The                   c
challenge to the validity of the proviso is therefore rejected.

     18. In view of the above, the appeals filed by the State are
allowed in part and the appeals filed by the applicants for
licences are dismissed, subject to the following clarifications:
                                                                           D
       (i)     If any licences have been granted or regularized in
               the case of any of the applicants during the
               pendency of this litigation, on the basis of any further
               amendments to the Rules, the same will not be
               affected by this decision;                                  E
       (ii)    If any licence has been granted in pursuance of any
               interim order, the licence shall continue till the expiry
               of the current excise year for which the licence has
               been granted.
                                                                           F
       (iii)   This decision will not come in the way of any fresh
               application being made in accordance with law or
               consideration thereof by the State Government.

R.P.                                          Appeals disposed of.         G