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2025 Supreme(Online)(KER) 7845
HIGH COURT OF KERALA
AMIT RAWAL, K. V. Jayakumar, JJ
STATE OF KERALA – Appellant
Versus
M/S.KSR ALANKAR HOTELS – Respondent
WA 2107/2024
SRI T K VIPINDAS, SR. GOVERNMENT PLEADER, SRI.M.G. KARTHIKEYAN
Prior approval is essential for reconstitution of a Board under the Abkari Act, validating fines for non-compliance while rejecting excessive charges.
Headnote:(A) Abkari Act, 1077 - Section 67(2) - Foreign Liquor Rules, 1953 - Rule 19 - Writ petitions challenging imposition of fines and fees for reconstitution of Board of Directors without prior approval - The learned Single Judge partially allowed the writ petitions, setting aside certain fines while upholding others. (Paras 11, 12)
(B) Legal sustainability - The court upheld the imposition of fine under Section 67(2) for unauthorized reconstitution, emphasizing the requirement of prior approval from the Excise Commissioner. (Paras 11, 12)
Facts of the case:
The respondent company, holder of a liquor license, reconstituted its Board without prior approval, leading to fines imposed by the Excise Commissioner. The respondent challenged these fines in writ petitions.
Findings of Court:
The court upheld the fine under Section 67(2) but set aside additional fees deemed unsustainable, ordering revised calculations for the amounts payable.
Issues: The main issues included the legality of the imposed fines for unauthorized Board changes and the necessity of prior approval under the relevant rules.
Ratio Decidendi: The court ruled that prior approval is mandatory for Board reconstitution under the Abkari Act, validating the imposition of fines for non-compliance while dismissing excessive charges.
Result: Writ Appeals dismissed.
J U D G M E N T
K. V. JAYAKUMAR, J M/s.KSR Alankar Hotels and Resorts Private Limited approached the writ court and filed four writ petitions bearing nos.4768/2019, 29520/2019, 12475/2019 and 8291/2019. Since the issue involved in all the four writ petitions are common, learned Single Judge as per the common order dated 11.06.2024 disposed of all the writ petitions together. Impugning the judgment in WP(C) No.8291/2019, State of Kerala and its officers preferred this writ appeal.
2. The respondent/writ petitioner is M/s.KSR Alankar Hotels and Resorts Private Limited. The respondent is the holder of FL-3 license under Rules 13(3) of the Foreign Liquor Rules . And on 31.08.2017, the Board of the respondent was reconstituted without prior approval from the 2nd petitioner, the Excise Commissioner and Smt.Shereena Roshy was appointed as the new Director instead of K.R.Roshy. At the same time, Sri.K.R.Suraj resigned from the Board of Directors.
3. Since the reconstitution of the Board of Directors was without the prior permission of the 2nd petitioner Excise Commissioner, the 2nd petitioner issued an order to remit Rs.20 lakhs as fee and Rs.3 lakhs as fine under Section 67 (2) of the Abkari Act as per order dated 13.03.2019. Challenging the order of the 2nd petitioner, the Excise Commissioner, the respondent M/s.KSR Alankar Hotels and Resorts preferred this Writ Petition.
4. The respondent company is conducting three hotels in the name and style M/s.KSR Alankar Hotels and Resorts Private Limited one at Vyttila, 2nd one at Angamaly and the 3rd one at Vadanappally.
5. Similar reconstitution of the Board of Directors was also done in all the four companies and therefore, four separate writ petitions were preferred. As per the impugned common judgment, learned Single Judge allowed all the writ petitions in part.
6. The learned counsel for the respondent submitted that the impugned judgment is legally sustainable and no interference from this Court is warranted.
8. Per contra, the Senior Government Pleader, Adv.T.K.Vipindas, would submit that the impugned judgment is illegal and unsustainable in law.
9. We have heard the rival submissions of the learned counsel for the parties and appraised the paper book.
10. Adv.T.K.Vipindas submitted that the learned Single Judge went wrong in validating the claim of the respondent/writ petitioner that the induction of Smt.Shereena Roshy and the resignation of Sri.K.R.Suraj did not result in the change of ownership.
11. Noticing the rival contentions of the parties, the learned Single Judge passed the impugned judgment. The relevant portion of the judgment with respect to WP(C) No.8291/2019 is extracted hereunder:
“43. In view of the above propositions of law laid down in this judgment, these writ petitions are allowed in part with the following directions.
1. the demands for payment of Rs.2,00,000/- and Rs.20,00,000/- as per the Second Proviso to Rule 19(4) of the Foreign Liquor Rules , 1953 in the impugned orders are declared unsustainable and hence the impugned orders are set aside to that extent.
2. The imposition of fine of Rs.3 lakh under Section 67 (2) of the Abkari Act , 1077 with respect to each of the licenses of the company is upheld.
3. The petitioners are liable pay the fee of Rs.1,00,000/- provided under Rule 19 (iii) the Foreign Liquor Rules , 1953 for the reconstitution on 31.08.2017 with respect to each of the licenses.
4. The petitioners are not liable to pay the fee of Rs.2,00,000/- provided under Rule 19 (iv) the Foreign Liquor Rules , 1953 for the reconstitution on 31.08.2017 and Ext.P9 impugned in W.P (C) No.29520/2019 is set aside to that extent.
5. The petitioner in W.P.(C)No. 12475/2019 is not liable for fine under S.67(2) of the Abkari Act , with respect to the reconstitution dated 31.08.2017 and hence Ext.P5 impugned therein is set aside to that extent.
6. The petitioner in WP(C) No. 29520/2019 is liable for a single fine of Rs.3,00,000/- for the reconstitution on 31/08/2017 with
