The main legal point established in the judgment is that the petitioners were entitled to have their licence renewed as a matter of right, by virtue of the 'sixth proviso' to Rule 13(3) of the Foreign Liquor Rules, notwithstanding the requirements under the amended Rule 19 brought into effect from 1-4-2007. The court also upheld the amendment to Rule 19 and ruled in favor of the Government/Department.

The common issue involved in almost all these cases is as to the right of the petitioners to get renewal of the FL3 licence which was valid and functional as on 31.03.2007, by virtue of the benefit provided under the 6th proviso to Rule 13(3) of the Foreign Liquor Rules (FLR in short), notwithstanding the requirements to be satisfied in view of the amendment to Rule 19 brought into effect from 1-4-2007.

2. The grievance of the petitioners is that the applications submitted for enabling them to continue the business, effecting necessary changes as to the 'death' or 'retirement' of some of the existing partners have been thrown down, stating that the petitioners do not satisfy the norms for approving the 'reconstitution' and to continue the business, for not having the mandatory requirement of 'two star' status brought into force w.e.f. 01/04/2007 by amending Rule 19 of the FLR. In some cases, imposition of the prescribed charges for granting permission in tune with the amended Rules which came into operation from 01/04/2007 is also under challenge on the ground that the applications in this regard had been preferred much prior to coming into force of the said amendment. Most of the petitioners have challenged the 'vires' of the Rules as well, stating that it is beyond the rule making powers conferred under Section 29 of the Kerala Abkari Act and further when the offence with regard to the reconstitution of the Firm/Board of Directors of the Company without "prior approval" of the Excise Commissioner is very much compoundable under Section 67(2) of the Kerala Abkari Act. It is also contended that the petitioners are entitled to have their licence renewed as a matter of right, by virtue of the 6th proviso to Rule 13 of the Foreign Liquor Rules which stipulates that such licensees who were doing the business on the basis of the licences which were valid and functional as on 31/03/2007, are entitled for renewal; i.e., without satisfying any requirements under the amended Rule 19, brought in w.e.f. 01/04/2007.

3. It is seen that the applications preferred by the concerned petitioners have been turned down by the Excise Commissioner, referring to the fact that the applicants do not satisfy the requirements under the amended Rules (Rule 19 of (ii) and 19(iv) of the FLR) for not having the "two star" status. In other cases, necessary sanction has been given, imposing the prescribed charges for effecting the reconstitution of the Partners of the Firm or that of the Board of Directors of the Company and also the amount prescribed for effecting the change in name of the licensee.

4. The impugned action on the part of the respondents is being defended by them stating that the Rules have been made well within their power and competence and hence intra vires to the Constitution. It is pointed out that the right to conduct trade in liquor, not being any fundamental right in view of the authoritative pronouncement of law by the Apex Court and further since the applications submitted by the petitioners are to be considered on the basis of the law as it exists on the date of consideration, the petitioners are not entitled to get any relief. It is also the contention of the State/Department, that the establishments of the petitioners were lying defunct for more than six months after 31.03.2007 and hence, by virtue of the 5th proviso to Rule 13 of the FLR, the licences are not liable to be renewed under any circumstances.

5. For ascertaining the scope and ambit of the relevant provisions of law, it is very much necessary to have a look at Rule 13(3) of the FLR, which is extracted below:

"13(3) Foreign Liquor 3 Hotel (Restaurant) licence: licence in this Form may be issued by the Excise Commissioner under the orders of Government in the interest of promotion of tourism in the State to Hotels which have obtained 3 star, 4 star, 5 star, 5 star deluxe, heritage, heritage grand or heritage classic classification from Ministry of Tourism, Govt