IN THE HIGH COURT OF KERALA
DAMA SESHADRI NAIDU, J.
George Joseph - Petitioner
v.
Commissioner of Excise - Respondent
W.P.(C) Nos.19121 and 30282 of 2015
Decided On : 09-10-2015
Kerala Foreign Liquor Rules 1953 - Rule 13(3) - Partnership Act, 1932 - Representation of Firm - Managing partner - Held, instead of one, two managing partners started representing the firm. The Excise Commissioner has treated this as amounting to transfer of licence as well as the reconstitution of the firm. In that factual background, the learned Division Bench has held that the licence has, in fact, been in favour of the partnership firm - neither the partnership is reconstituted nor the name of the licensee is changed. So, sub-rule (iii) of R.19 and the main part of sub-rule (iv) under R.19 of the Rules have no application to the facts of the case
1. A partnership firm, having a hotel, was given Ext.P5 provisional FL-11 licence to have a Beer & Wine Parlour. One of the partners, whose claim to be the Managing Partner is contested, filed W.P. (C) No.19121 of 2015 assailing Ext.P5 provisional licence. He obtained an order of status quo. The Commissioner of Excise, pending the said writ petition, in compliance with the direction of this Court in a writ appeal arising out of another writ petition, heard the rival claimants and recalled Ext.P5 provisional licence through Ext.P8.
2. Impugning Ext.P8 order of the Excise Commissioner, the partnership firm, represented by another Managing Partner, filed W.P. (C) No.30282 of 2015 arraying the petitioner in W.P. (C) No.19121 of 2014 as the 4th respondent. Since both the writ petitions raise the same issue involving the same parties on either side, this Court-disposes of both the writ petitions through a common judgment. For the narrative purpose, the facts and the documents from W.P. (C) No.30282 of 2015 are taken as the basis.
3. Briefly stated, as pleaded in W.P.(C) No. 30282 of 2015, the petitioner firm initially had a bar licence beginning from 1986 under Rule 13(3) of the Foreign Liquor Rules ('the Rules' for brevity). Until 2006, the firm was headed by one Mr K. A. George, the managing partner, in whose name ostensibly the licence stood. When the said managing partner took ill in 2006, the firm comprising six partners nominated the 4th respondent, holding 30% share, to be the managing partner. In 2010, as Mr K.A. George, the then managing partner, had died, the remaining partners reconstituted the partnership firm.
4. Under the stewardship of the 4th respondent, the petitioner firm continued to have FL-3 licence until 31.03.2014, when the Government had a change of policy leading to the non-renewal of all FL-3 licences for all establishments other than five star hotels.
5. In the light of the incorporation of sub-Rule 11(b) under Rule13A of the Rules with effect from 30.12.214, all hotels which had been denied FL-3 licences were given FL-11 licences to have Beer & Wine Parlours. Taking advantage of the said provision, the petitioner firm as well, through the 4th respondent, applied and obtained Ext.P1 licence on 02.01.2015, with its validity up to 31.03.2015.
6. Once Ext.P1 licence came to an end, the 4th respondent did not show any inclination to have it renewed. In the meanwhile, the Kerala Financial Corporation (KFC) also issued Ext.P7 notice initiating revenue recovery proceedings against the defaulting petitioner firm to recover an amount of Rs.2.46 crores.
7. In the light of the 4th respondent’s disinclination to apply for the renewal of the licence, the remaining five partners, having 70% stake, came together and passed Ext.P2 resolution on 21.04.2015 nominating Mr. Jacob Joseph, one of the partners, to be the Managing Partner in the place of the 4th respondent. It seems that through the same resolution the partners authorised the newly nominated Managing Partner to apply for the renewal of the FL-11 licence, which he did through Ext.P3.
8. Soon after submitting the Ext.P3 application, as the record reveals, the petitioner approached this Court questioning what is said to be the delay on the part of the Commissioner of Excise in considering its Ext.P3 application. This Court, in turn, through Ext.P4 judgment directed the Excise Commissioner to take an expeditious decision. Aggrieved, the 4th respondent, not originally being a party to W.P.(C) No. 13720 of 2015, took the matter in appeal in W.A. No. 1206 of 2015; resultantly, a learned Division Bench through its judgment dated 11.06.2015 directed the Excise Commissioner to hear the 4th respondent as well before taking any decision on the petitioner's Ext.P3 application.
9. Chronologically viewed, before the directive in writ appeal could be communicated, the Excise Commissioner issued Ext.P5 proceedings granting an FL-11 licence to the petitioner provisionally, howev
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