Holding

The law applicable to a liquor licence application is the law in force on the date the competent authority takes the final decision; therefore the amended 200‑metre distance rule applies to the pending application.

Summary

The respondent, Mis. Palakkad Heritage Hotels, applied for a FL‑11 beer/wine bar licence under the Foreign Liquor Rules, 1974. The Excise Commissioner recommended grant of the licence on 28‑Mar‑2012, but before the State Government could give its final approval the Rules were amended on 18‑Apr‑2012 to increase the minimum distance from objectionable institutions to 200 metres. The hotel was only 70 metres from a temple, so the Excise Commissioner rejected the application on 5‑Jun‑2012. The hotel filed a writ petition claiming the amendment should not apply to its pending application and that the earlier High Court judgment, which relied on the pre‑amendment rule, was erroneous. The Supreme Court held that the relevant date for applying the law is the date on which the competent authority (the State Government) takes the final decision, not the date of the Excise Commissioner’s recommendation; consequently the amended 200‑metre rule governs the pending application. The Court set aside the High Court’s earlier orders and remanded the writ petition to the Single Judge for fresh consideration, partially allowing the appeal.

Issues considered

The appropriate date for determining which version of the Foreign Liquor Rules applies to a licence application – the date of the Excise Commissioner’s recommendation or the date of the final decision by the State Government.
Whether the amendment to the Foreign Liquor Rules (minimum 200‑metre distance) applies to applications pending at the time of amendment.
Whether the amendment introducing the 200‑metre restriction is void or discriminatory.
Whether the High Court’s reliance on the pre‑amendment rule and its grant of the licence was legally sustainable.

Legislation cited

Foreign Liquor Rules, 1974s. 13(3)

Subjects

Foreign Liquor RulesFL‑11 licencedistance restrictionpending applicationcompetent authorityamendment applicabilitywrit petitionSupreme Court interpretation

Judgment

[2017] 3 S.C.R. 239

STATE OF KERALA & ORS. A
v.
MIS. PALAKKAD HERITAGE HOTELS
(Civil Appeal No. 5204of2017)
APRIL 13, 2017 B

[DIPAK MISRA AND A. M. KllANWILKAR, JJ,)
ForeiJ?,11 Liquor Rules, 1974:
Application for grant of Beer/Wine Bar FL-11 Licence - For
its hotel which was 70 meters from the nearest objectionable c
institution - Excise Commissioner recommended grant of sanction
for the Licence as per the Rules '- While the said recommendation
was pending 'consideralion, Liquor Rules amended on 181" April,
2012 prescribing the minimum distanceji-uin objectionable institution·
as 200 meters - Jn view ofthe amendme/11 ofthe Rules, the application ·
0
was rejected - Writ pelition by the applicant cha/lengi11g the decisio11
as also the amendment of lhe Rules - Allowed by Single Judge of
High Court holding that since the order sanctioning the grant of
licence was prior to amendment, application could nol have been
rejected on the basis of the amended Rules - Jn writ appeal as well
as in Review, order of Single Judge was affirmed - On appeal, E
held: Since the final decision as to grant of the Licence was taken
after the Rule was amended, the applica1io11 was required to be
considered keeping in view the amended provision - Matter
remanded to the Single Judge of High Court to decide afresh on
other issues.
F
Partly allowing the appeal, the Court
HELD: 1.1 The 1>rocessi11g of the apj>licalion for grant of
licence commences from the dale of ap1>licalion. The final
decision 011 the 1>roposal is re11uired to be taken by the State
Government. The date 011 which a formal, final decisio11, is taken G
by the competent authority, alone, would be the relevant date.
The recommendation made by the subordinate authority, even if
significant for taking a formal decision by the competent authority,
will be of no avail. [Para 11J[248-F-G]

H
239
240 SUPREME COURT REPORTS [2017) 3 S.C.R.

A 1.2 In the present case, the Single Judge of High Court
has assumed the date on which recommendation was made by
the Excise Commissioner i.e. 28'h M3:rch, 2012, as the relevant
date. That assumption is untenable. ]<or, that was not the date on
which the final decision was t:tken by the competent authority.
Whereas, before a final decision could be taken by the competent
8
authority on the a1)plication submitted by the Respondent, the
Foreign Liquor Rules were amended on 181h April, 2012. The
ap1>lication submitted by the Respondent for grant of licence,
unquestionably, must be treated as pending and under
consideration on this date. [Para 12)1248-JI; 249-A-B]
c 1.3 The a1)plication for grant of J<'L-11 licence submitted by
the Respondent was required to be considered by the com11etent
authority keeping in mind the amended provisions which came
·into force w.e.f. 18'h April, 2012. That is precisely what has been
done by the Excise Commissioner, as can be discerned from his
D speaking order dated 5'h June, 2012, for invoking the restriction
of distance of 200 metres from the objectionable site. [Para
13](249-C-D)
2. Since the Single Judge of the High Court proceeded to
decide the writ petition filed by the Respondent merely by
E referring to the pronouncement of the Division Bench of the same ·
High Court in the case of *Ka/hula /lo/els mu/ Resorts, coupled
with the fact that the Respondent had asked for a wider relief to
declare the amendment of 18'h April, 2012 as void to the extent it
has introduced the restriction of distance of 200 meters from
objectionable institutions for getting J<'L-11 licence, it would be
F appropriate to relegate the parties before the Single Judge to
decide the writ petition afresh, keeping in mind the settled legal
position. [Para 14)(249-E-F)
*Kallada Hvlels and Resvrls vs. Slate of Kera/a 2012
(2) KLT 167; State vf Kera/a and Ors. v. MP. Shiju
G 2014 (2) KUC 343 (DB); The Kera/a Bar Hotels
Associalion & Am: V. State of Kera/a & Ors. [2015]
SCR 256: AIR 2016 SC 163 - referred to.
State of Keralp & Am: v. B.6 Holidays Resorts Pvt. Lid.
[20101 3 SCR 1 : 2010 (5) sec 186 - distinguished.
H
STATE OF KERALA & ORS. v. M/S. PALAKKAD HERITAGE 241
HOTELS

Case J,aw Reference A
2012(2) KLT 167 . referred to Para4
2014 (2) KBC 343 (Dll) referred to Para6
[2015) SCR 256 referred to Para7
[2010) 3 SCR 1 distinguished Para 10 B

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5204
of2017.
From the Judgment and Order dated 12.08.2014 of the High Court
of Kerala at Ernakulam in W. A. No. 950 of 2014.
c.
G. Prakash, Jishnu M. L., Mrs. Priyanka Prakash, Mrs. Beena
Prakash, Manu Srinath, Ad vs., for the Appellant.
Romy Chacko, Shubham Singh, Varun Mudgal, S. C. Jaidwal,
Advs., for the Respondents.
The Judgment of the Court was delivered by D

A. M. KllANWILKAR, J. 1. The Respondent constructed a
hotel which has been classified as Heritage (Basic) Category for five
years (w.e.f. I" March, 2012 till 28'h February, 2017). The Respondent
submitted an application for grant of a Beer/Wine Bar FL-11 Licence
under the Foreign Liquor Rules. That application was processed by the E
Deputy Commissioner of Excise, Palakkad. On the basis of the report
submitted by the said authority, the Excise Commissioner of
Thiruvananthapuram forwarded his recommendation to the· Secretary
to Government Taxes Department, Government of Kera la, vide a letter
dated 28'h March, 2012. The Excise Commissioner duly recommended F
grant of sanction fo.r FL-11 Licens'e to the Respondent as per the rules.
While the said recommendation was pending consideration before the
State Government, the Foreign Liquor Rules came to be amended on
l 8'h April, 2012. The amendment inter alia prescribes the minimum
distance of 200 metres from an objectionable institution. The report
submitted by the Deputy Commissioner· of Excise records the distance G
between the gate of the hotel of the Respondent and the nearest
objectionable institution (being Sree Bhagwati Ayappa Temple,
Karuvannurthara) as 70 metres only. Consequent to the amendment to
the Foreign Liquor Rules, the Government vide letter No. 8028/A2/2012/
H
242 SUPREME COURT REPORTS [2017] 3 S.C.R.

A TD dated 261h April, 2012, called upon the Excise Com1i1issioner,
Thiruvananthapuram to examine the proposal of the Respondent. The
Excise Commissioner, by a speaking order passed on 5'" Jm1e, 2012,
came to the conclusion that the application submitted by the Respondent
deserved to be rejected and directed it to be returned to the Deputy
Commissioner of Excise, Palakkad.
B
2. For answering the controversy at hand, we deem it apposite to
reproduce the said communication in its entirety:
''PROCEEDINGS OF THE EXCISE COMMISSIONER.
KERA LA
THIRUVANANTHAPURAM
c
(Present: Sri. A. Ajith Kumur IAS)
Sub:- Excise- Abkari-Application for FLcJJ licence to Palkkad
HeritageHotels, Koduvayo01; Palakkad rejected -orders
issued.
D Read:- (1) Govt. Letter No. 8028/A2/2012/TD dated 261041
2012
(2) Letter No: CZ3-577/12 duted 19.03.2012 of the Joint
Excise Co111missio11er, Central Zone, Emakulam.
(3) Letter No. P-6-1611112 dated 16103112 & 2110312012
E of Deputy Co111missioner of Excise, Palakkad.
(4) Application dated 0110312012 of Sri. MJ. Thomas
(5) GO (Ms) No. 107111/TD dated 17108111
(6) GO (P) No. 7212012/TD dated 18104112
F ORDER NO. XC6-7476/12/K. Dis Dated 05.06.2012
The Joint Excise Co111missio11er, Central Zone, Emakulam has
forwarded, vide letter read as ]" above, an application
submitted by Sri. M J. Tho111as, Managing Partner. Mis
Palakad Heritage Hotels, Eroor P 0. Ernakula11.1 requesting
G sanction for FL-JI licence in his name to the Palakkad ·
Heritage Hotels, Koduvayo01; Palakkad having a valid
heritage basic category classification certificate vide order
No. 27/HRACC (08)12011 dated 09.03.2012 ofthe Member
Secretary (HRACC) Ministry of Tourism, Government of India,
H
STATE OF KERALA & ORS. v. MIS. PALAKKAD HERITAGE 243
HOTELS [A. M. Kl-IANWILKAR, J.)

Chen11ai. The hotel is situated in Re. Sy. No. 67318-1 A
Koduvciyoor Village in Chillur Taluk bearing door No. XII
324 of Koduvayoor Grama Panchayat in Palakkad District.
The Deputy Co111111isisonerof Excise, Palakkad has reported
that the nearest o~jectionable institution is the Sree
Bhagavathy Ayyappu Temple, Karuvammrthara which is 70 B
meters mwy fi'om the gate 1if t/Je hotel.
Before the amendment made ride Government order read as
6'" above, as per rule 13 (3) of Forensic Liquor Rules, there
was a restriction that no FL-3 licence shull be issued to hotels
which· are locateij within 200 meters fi'om objectionable site c
(educational i11stitutio11; temple. church, mosque (Jr burial
ground, schedule caste/schedule tribe colony )but those hotels
other than in the privute sector hai·i11g fow; five stm; five
star deluxe classification will be exempted from the distance
· restrictions in the interest of promotion of tourism and a/so in
the case of hotels iii private sector of above categories and D
hotels having heritage, heritage grand and heritage classic
classijicatio11 is issued by Minisliy <~l Tourism, Government
of India, the distance limit was only 50 meters from
objectionable site .. Vide Govemment order read as 6'" above,
the said rule is modified by deleting the exemption of distance
restrictions in t/Je rnse 1~f hotels in private sector of above
categories, thereby at present tile distance limit to those hotels
in private sector of abore categories, thereby at present the
distance limit of those hotel:> in private sector of all categories
lrom the objectionable site is 200 meters.
F
In the above circumstances a11d us reported by the Joint Excise
Commissioner, Central Zone, Executive and Deputy
Co111111issio11er of Excise, Palakkud and since the nearest
objectionable institution viz. the Sree Blwgavathy Ayyappa
Temple, Kanvamwrthara is located only 70 metres away from
the gate of the hotel the application read as 4'" above is hereby G
rejected and returned to the Deputy Commissioner of Excise,
Palakkad.
Sdl-
Excise Commissioner"
1-1

•
244 SUPREME COURT REPORTS [2017] 3 S.C .R.

A 3. Against this decision, the Respondent filed a writ petition before
the High CourtofKerala, being Writ Petitioi1 (C) No.14220 of2012 for
the following reliefs: ·
"i) call for the records leading to Ext. P7 and quash the same
by issuing_ a. writ of certiorari or other appropriate writ,
·B order or'ilirection;
ii) declare that petitioner is entitled to get an FL-11 licence as·
per Ext. P-2 application.
iii) Declare that Ext. P6 amendment to !he extent it introduce
distance of 200 meters from objectionable institutions for
c getting FL-11 license is discriminalory and without any
basis;
iv) Declare thul if the hotels located within 200 meters from
objectionable institutions are permitted to conduct the
licenses, the petilioner is also entitled to ge1 license as per .
D Ext. P2 application;
v) Issue a writ of mandamus or other appropriate writ, order
or direction commanding the respondelll 1 to 5 to issue an
FL-11 license·1111der Rule 13 (J!) of the Foreign Liquor
Rules, beer/wine parlour license, vide Ext. P-2 application
E on the basis of the rule/law prevailed 011 the date of Ext. ·
P-5 (28.3.2012);
vi) Issue a writ of mandamus or other appropriate writ, order
or direction co1111111mding the respondents 1 to 5 not to
renew FL-3 and FL-11 licenses, which are conducting
F within 200 meters from the objectionable institutions, if
the petitioner is denied FL-11 license; and
vii) Grant such other and further relief as this Hon 'ble Court
·may deem fit and proper in the inlerest of justice. "
4. The learned Single Judge of the High Court vide Judgment
G dated 4111 February, 2014, allowed the said writ petition on the finding
that the Excise Commissioner had issued an order in favour of the
Respondent (writ petitioner) on 28 1h March, 2012, sanctioning FL-I I
licence. The Single Judge then placed reliance on the decision of the
Division Bench of the same High Court in the case of Kt11ltult1 Hotels
H
STATE OF KERALA & ORS. v. M/S. PALAKKAD HERITAGE 245
HOTELS [A. M. KHANWILKAR, J.]

amt Resorts vs. State 1Jf Kera/a', wherein it was held that the law to be A
applied for consideration of the application submitted by the Respondent
for grant of licence must be as on the date on which the Excise
·Commissioner made recommendation for grant of licence to the
Respondent, as was in force on that date. The appellant herein had
pointed out to the learned Single Judge that the said decision was
B
challenged before this Court by the Government and the same was
pending. The learned Single Judge, however, rejected that contention as
follows:
"6. However, ad111i1tedly. as per the decisions ofthis Court. ·
which stand 11ol1\ when the Excise Commissioner recommends
· the application for grant of licence on the basis of a Rule in
·c
force on that date, subsequent a111e11d111e11t should not be relied
on to assail the same. Viewed in that pro.file, the petitioner is
entitled to get the relief as sougl1t j(1r in this writ petition.
Therefore, the writ petition is allowed.
D
Ext. P7 is quashed and respondents I to 5 are directed to
issue FL-11 licence to the petitioner under Rule 13(11) of the
Foreign Liquor Rules. beer/wine parlour licence vide Ext. P2
applicati.011 on the basis of rule/law prevailed on the date of
Ext. P5, i.e., 28.03.2012.
E
This exercise shall be completed wi1hi11 a period of three
months from today. "
· 5. Against this decision, the appellant filed a Writ Appeal being
No.950of2014 before the Division Bench of the High Court. The same
has been dismissed on 12'h August, 2014, in the following ternis: F
"l. Heard the learned Senior Gover11111en1 Pleader and the
learned counsel appearing ji>r the respondent/writ petitioner.
2. The impugned judgment has been rendered by a learned
Single Judge re(ying 011 1/ie decision of a Division Bench in
Ka//(u/" llotel~ ""ti Rt'.mrl.~ 1' State of Kera/a [2012(2) KLT G
167]. That decision notwi1hsta11ding, the fact of the matter
remains that even as per the later bench decision in Sttile ti(
Kera/a mu/ Others " Jl,f. R Sliiju [201./(2) K.HC 343 {DB)},
the respo11de111/writ petitioner is entitled to succeed, in view
I 2012(2) KJ..,T 167 H
246 SUPREME COURT REPORTS [2017] 3 S.C.R.

A of the fact that the law has been succinctly slated to the effect
that the eligibility has to be considered applying the law as
on the date of consideration of the matter by the Excise
Commissioner. This being, pointedly, the legal issue involved
in this writ appeal, the question raised has, necessarily. to be
answered against the State. This appeal, therefore, fails.
B
In the result, this writ appeal is dismissed No costs."
6. The later decision adve11ed to by the Division Bench in the
case of M.P. Sbiju (supra), was challenged by the State Government
before this Court by way of SLP(C) No.25780 of 2014. The same was
c disposed of on 22"d .July, 2016 in the following terms:
"ORDER
Learned counsel for the parties are agreed that this petition
has become i11ji·ucwous in view of lhe position rendered to
this Court in Civil Appeal No. 4157 of 2015. titled as The
D Kera/a bar Hotels Association & Anr. V. State of Kera/a &
Ors. decided on 29.12.2015.
The special leave petition is accordingly disposed of as
i11.fructuous. "
7. Sii1ce the said relied upon decision in MP Shiju's case has
E
been affirmed by this Court, even this appeal must follow the same suit.
However, the said SLP has been disposed of by this court on the basis of
concession made by the counsel for the parties - that it had become
infructuous in view of the judgment of this Court in the case of The
. Kertila Bar Hotels Associt1lio11 & Anr. V. !;'lute of Kert1lt1 & Ors2•
F
·8. On a bare perusal of the decision in the Kerala liar Hotels
Association (supra), it is seen that the question examined by this Com1
was whether the policy to ban the consumption of alcohol in public or
exception carved out to the pol icy in favour ofFive Star Hotels violates
the rights of the Hotels of Four Star and below classification under
G Articles 14 and 19. The other decision considered by the High Court for
allowing the writ petition filed by the Respondent is the case of Kallada
llotel.s & Resorts (supra).· The correctness of the decision of the
Division Bench of the High Court was not in issue before this Court in
the case of Kerala Bar Hotels Association (supra).
2 AIR 2016 SC 163
H
STATE OF KERALA & ORS. v. M/S. PALAKKAD HERITAGE 247
HOTELS (A. M. Kl-IANWILKAR, J.]

9. Indeed, the decision of the Division Bench in Kallada Hotels A
& Resorts (supra) has been aftirmed by this Court by dismissal of
SLP(C) No: 18392 of2012 on 20'h June, 2012 in the following terms:

"ORDER
Heard Mr. Ramesh Babu M.R., learned counsel for the B
petitioners.
In the facts and circumstances of the case, we are not inclined
to interfere with the impugned judgment.
The Special Leave Petition is, according/y, dismissed. c
Question of law is kept open. "
Even the review petition filed by the State against the said decision,
being Review Pt:tition(C) No.1409 of 2012, came to. be dismissed on
I 41h August, 2012.
I 0. What is relevant to note is that, in the case of Kallada Hotels D
& Resorts (supra), the Division Bench of the High Court hadadve11ed
to the decision of this Cou11 in the case of State of Kerala & Am~ v. ·
B.6 Holidays Resorts Pvt. Lld. 3 , wherein it has been held that a1i
application for grant of liquor licence has to be considered with reference
to the rules/law prevailing or in force on the date of consideration of E
application by the Excise Authorities and not with reference to the law ·
as on the date of the application. After noticing the decision of this Court,
the Division Bench on the facts of the case before it allowed the Writ
Appeal. It will be u·seful to advert to the relevant portion of the Division
Bench decision:
F
•·4, ~ ......................................... ··' .................. Going by
the judgment of the Hon 'ble Supreme Court the la11i applicable
is the law that is in force when the Excise authorities at various.
levels consider an application for FLJ licence, as is evidenced
by the records produced in this case, the application submitted
before the Excise Commissioner goes for enquiry to the G
Deputy Commissioner who make his recommendations which
in turn is endorsed by the Joint Commissioner of Excise.
Thereajier the application goes to Government and with the
permission of the Government the Excise Co111111issio11er issues
'2010 (5) sec 1s6
H
248 . SUPREME COURT REPORTS [2017] 3 S.C.R.

A the licence. 111 this case the initial denial of licence to the
appellant was on account of the 111is1uke about the distance
from the temple which 11 us wro11gly reported as within the
prohibited distance. it is see11 1hu1 within one month of
issuance of the first report 11wlll!~l' Ex1. P6 da1ed 2510812011
the Joint Excise Co1i1111issioner corrected the mistake on 221
B
0912011 vide Ext. P9 recommending appellant :S case for
issuance of licence. Jf Ext. P6 was issued with cvrrect distance
without committing a mistake and at least if the correct report
namely Ext. P9 dated 2210912011 was ucted upon in time the
appellant would huve got licence even before /he new policy
c was introduced. Respondent hus not brought 10 the notice of
ihis Court any other objection against enti1le111e11t of the
appella11t for licence. We feel appellant ca1111ot be decli11ed
licence on accou11t of 1he mistuke commilled by the Excise
authorities in Exl. P6 report. Jn any case since by 221091
2011, correct report was submitted vide Ext. P9 we feel the
D
amended rule which came into force 011 0911212011 cannot
be applied to appellanl. So much so, we hold that appellant
is entitled to have their app/icutio11 ji11a/ly considered and
dfaposed of by the G(1vernment and Excise Commissioner with
reference to Rule 13 (3) as it stood prior to the a111end111e11t
E introduced to it with e,ffect from 0911212011. According~v the
Writ Appeal is allowed vacating the observation of the learned
Single Judge in this regard and with a direction to the
respondent to consider and pass orders on appellant :S
application at the earliest."

F 11. In our view, the question as to what date should be reckoned
as the date of consideration of licence has not been squarely dealt with
in this decision. Indubitably, the processing of the application for grant
oflicence commences from the date of application. The final decision
on the proposal is required to be taken by the State Government. The
date on which a formal, final decision is taken by the competent authority,
G alone, would be the relevant date. The recommendation made by the
subordinate authority, even if significant for taking a formal decision by
the competent authority, will be of no avail.
12. ln the present case, the learned Single Judge has assumed the

H
STATE OF KERALA & ORS. v. MIS. PALAKKAD HERITAGE 249
HOTELS [A. M. KHANWILKAR, J.]

date on which recommendation was made by the Excise Commissioner A
i.e. 28'h March, 2012, as the relevant date. That assumption is untenable.
For, that was not the date on which the final decision was taken by the
competent authority. Whereas, before a final decision could be taken by
the competent authority on the application submitted by the Respondent,
the Foreign Liquor Rules were amended on I 81h April, 2012. The
B
application submitted by the Respondent for grant of licence,
unquestionably, must be treated as pending and under consideration on .
this date.
13. A priori, no fault can be found with the State Authority for
calling upon the Excise Commissioner to examine the proposal and submit
his fresh recommendation keeping in mind the amended provisions of c
the Foreign Liquor Rules. In other words, the appl icatio1i for grant of
FL-11 licence submitted by the Respondent was required to be considered
by the competent authority keeping in mind the amended provisions which
came into force w. e.f. 18"' April, 2012. That is precisely what has been
done by the Excise Commissioner, as can be discerned from his speaking D
order dated S'h June, 2012, for invoking the restriction of distance of200
metres from the objectionable site.
14. Since the learned Single Judge of the High Cou11 proceeded
to decide the writ petition filed by the Respondent merely by referring to
the pronouncement of the Divis ion Bench of the same High Court in the E
case of Kallada Hotels and Resorts (supra), coupled with the fact
that the Respondent had asked for a wider relief to declare the amendment
of 18'" April, 2012 as void to the extent it has introduced the restriction
of distance of200 meters from objectionable institutions for getting FL-
11 licence, we deem it appropriate to relegate the parties before the
learned Single Judge to decide the writ petition afresh, keeping .in mind F
the settled legal position.
15.Accordingly, we set aside the impugned judgment of the Division
Bench dated 12'" August, 2014 in Writ Appeal No.950 of 2014 as also
the judgment of the Single Judge in Writ Petition (c) No.14220of2012
dated 4'h February, 2014. Further, we remand the Writ Petition(C) G
No.14220 of 2012 and restore it to the file of the Single Judge of the
High Court of Kerala for being decided afresh on other issues in
accordance with law.

1-1
250 SUPREME COURT REPORTS [2017) 3 S.C.R.

A 16. The appeal is partly allowed in the above terms with no order
as to costs.

Kallpana K. Tripathy Appeal partly allowed.