Licensees are not entitled to fee remission for periods of non-operation when allowed to sell if the decision not to operate was voluntary.

JUDGMENT

K.Vinod Chandran, J.

The appeals are filed by FL3 licensees under the Foreign Liquor Rules . The appellants, who are the petitioners before the learned Single Judge, sought remission of the license fees, for the period they were not able to sell liquor, allegedly for extraneous reasons, over and above the periods on which a moratorium was granted by the Government. The appellants alleged that the judgment of the learned Single Judge was in conflict with the declaration of law in Chitra v. State of Kerala [2015 (3) KLT 956 (SC)].

2. Heard Mr.M.G.Karthikeyan, learned Counsel for the appellants and Sri.Sreejith V.S, learned Government Pleader for the State.

3. Suffice it to note the brief facts, which intertwined with the pandemic situation gave rise to the claim. The appellants were all FL3 licensees, who had valid licenses for the years 1999-2020, 2020-2021 and subsequently. Due to the pandemic situation, there was a lock-down of the entire country, effective from 24.03.2020, which remained up to 21.05.2020. On 14.05.2020, the State Government permitted the FL3 licensees to sell liquor that remained in stock, across the counter, without opening the restaurants. Even the restriction to open the restaurant was lifted on 21.12.2020. Later, again there was an embargo imposed on running bars between 24.04.2021 to 14.06.2021. The Government excluded the periods between 24.03.2020 to 21.05.2020 and between 24.04.2021 to 14.06.2021, as against all FL3, FL11 and FL4A licensees, totaling 111 days. The Government also, in January, 2021, extended the period in the proviso under Rule 13(3) from six months to ten months; being the period which disentitled a licensee from seeking renewal, if, despite a valid licence, the Bar remained defunct. The appellants, being five star hotels, could not make the counter sales as could the other licensees, since their clientele was in the higher financial bracket and they thought it best not to make, over the counter sales; which could damage their reputation of exclusivity.

4. We are unable to accede to the request made by the appellants before this Court. It is admitted that the period in which there was a complete lock- down was excluded and proportionate reduction was granted in the license fee for the subsequent years. The appellants' claim is for the periods in which the Government had permitted sale of liquor, without opening the restaurants. The license essentially is for sale of liquor and there being no embargo for such sale, during the said period, necessarily the licensee cannot claim benefit of refund or adjustment of the license fee paid for the specified period. In fact though there was permission to effect sale of liquor, the appellants refused to sell liquor over the counters for reason of the appellants being five star hotels. Admittedly, it was the decision of the appellants to not sell liquor across the counter and whatever be the reason, it is not an extraneous reason or one caused by third party intervention as held in Chitra [supra].

5. Chitra [supra] considered two appeals, which had distinctive facts, but both were granted the benefit of refund, for the period in which the license could not be operated. In the first case, though the Bar hotel had applied and obtained a license for the year 1990-1991, for reason only of an injunction issued by a Munsiff's Court, the Excise Commissioner was restrained from issuing the said license. The license was eventually granted only for the period 21.12.1999 to 31.03.2000, after the injunction stood vacated. It was held that the licensee was entitled to seek remission of license fee, to the extent it was 'precluded from transacting business on the strength of that license' (sic) for reasons extraneous to itself. Likewise in the other appeal, the license expired on 31.03.2001 and a renewal could not be applied for the next year, ie:2001-2002, for reason of a dispute with the landlord, forcing the hotel to vacate the premises. Even then,