CHITRA versus STATE OF KERALA & ORS.

Citation: [2015] 9 S.C.R. 752 · Decided: 21-08-2015 · Supreme Court of India · Bench: VIKRAMAJIT SEN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2015] 9 S.C.R. ?52 
CHITRA 
v. 
STATE OF KERALA & ORS. 
(Civil Appeal No.2246 of 2006) 
AUGUST21, 2015 
[VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.] 
Foreign Liquor Rules: 
C 
rr. 13, 14 - Entitlement to pay proportionate annual rental 
instead of full annual rent applicable for the year in respect 
of FL3 licence granted to appellant-licencee - Due to third 
party suit, injunction granted restraining excise 
commissioner from issuing the said licence to the appellant 
D for use at her hotel- Claim of appellant that she was disabled 
from utilising the licence ,tor the full period because of third 
party intervention - Legality of demand to pay the fee for the 
entire year despite the truncated period of use by the appellant 
for no fault attributed to appellant- Held: A party is entitled to 
E seek a remission in the payment of licence fee if it is 
precluded from transacting business on the strength of that 
licence because offactors and reasons extraneous to it and! 
or if it is granted the licence on the direction of a Court for 
F 
only a portion of the financial year - Respondent State to 
refund the excess amount paid by the appellant. 
rr.13, 14 - Renewal of licence -Appellant-licencee was 
holder of FL3 licence for the period ending on 31.3.2001 -
Due to a dispute with its landlord it had to vacate the premises 
G and on relocating it to another place, it applied for renewal of 
licence on 26.2.2002 - Litigation - High Court directed 
appellant to pay licence amount and after such payment, 
licence renewed on 25.3.2003 - In these circumstances, 
H 
752 
CHITRAv. STATE OF KERALA& ORS. 
753 
appellant could conduct its business only for less than a A 
fortnight in that licence year- Liability to pay licence fee for 
the year 2002-03....: Held: Appellant is only liable to pay the 
proportionate licence fee for the period in which it could avail 
of the licence, that is 25.3.2003 to 31.3.2003- Respondent 
State to refund the excess amount paid by the appellant. 
B 
Allowing the appeals, the Court 
HELD: 1. CIVIL APPEAL N0.2246 OF 2006 
No person can be prejudiced because of an act of a C 
Court. Although the Appellant had applied for the FL3 
licence which would ordinarily run the course of one 
financial year, due to interim orders passed by the 
Courts, the Appellant could only utilize it for a fraction of 0 
that period. The Appellant's application was not made in 
the duration of that year and was thus initially not for a 
fraction of the financial year. Rule 14 does not impede 
or inhibit the charging of annual proportionate fee so 
long as no failure is placed on the licensee or it is E . 
blameworthy itself. In the event that a party applies for a 
period which is obviously not effective for the entire 
financial year, such as applying for a licence mid-way 
that financial year, the full fee for that year may be 
claimable or chargeable and, therefore, would have to F 
be paid. In other words, had the Appellant applied for 
the licence even with the knowledge that because of 
external factors such as a pre-existing injunction order 
etc., she would not have been able to exploit it for the 
entire year, she may not have been liable to pay the G 
licence fee for the entire year. This is not the factual 
matrix which obtains in the case at hand; the licence 
could only be granted for part of the period owing to 
unforeseeable circumstances beyond the ken and 
control of the parties. A party is entitled to seek a H 
754 
SUPREME COURT REPORTS 
[2015] 9 S.C.R. 
A remission in the.payment of licence fee if it is precluded 
from transacting business on the strength of that licence 
because of factors and reasons extraneous to it and/or 
if it is granted the licence on the direction of a Court for 
only a portion of the financial year. [Para 5] [757-H; 758-
B B-H] 
2. CIVIL APPEAL N0.4900 OF 2006 
The Appellant is only liable to pay the proportionate 
licence fee for the period in which it could avail of the 
C licence, that is 25.3.2003 to 31.3.2003. It would be fair to 
cogitate upon whether the Appellant should have 
declined the licence for virtually a week in that year, and 
since it failed to exercise that option, whether it should 
0 
be burdened with the fee for the full year. Any person 
placed i.n the position of the Appellant would not be in a 
position to decline to accept the renewal of the licence 
even though it was for less than a fortnight, since that 
would have led to the licence being re

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