R. VIJAY KUMAR AND ORS. versus THE COMMISSIONER OF EXCISE AND ORS.

Citation: [1993] SUPP. 3 S.C.R. 607 · Decided: 05-11-1993 · Supreme Court of India · Bench: S. RATNAVEL PANDIAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

... 
R.VIJA Y KUMAR AND ORS. 
v. 
THE COMMISSIONER OF EXCISE AND ORS. 
NOVEMBER 5, 1993. 
B 
[S.RATNAVEL PANDIAN AND R.M. SAHAI, JJ.J 
kerala Excise Act, 1944/Kerala Foreign Liquor Rules, 1974-Rule 
13(3)-Renewal of licences and grant or fresh licences-Distinction be-
twee1t-Held-Kerala State Government policy issued on November 9, 1992, C 
for cancellation/non-grant of Foreign liquor licences after 1.4.1993, was con-
trary to rules without any valid justification. 
Practice and procedure-Affidavit-Contents of Avennents should be 
clear and specific. 
D 
The appellants were owners or proprietors of hotels and restaurants. 
they were granted FL-3 licences under Rule 13(3) of Kerala Foreign Liquor 
Rules, 1974, in October 1992 for the year 1992-93, but these licences were 
cancelled soon thereafter, in view of . the policy decision taken by the 
Government to cancel all Foreign Liquor (Hotel/Restaura~t) Licences E 
granted to hotels/Restaurant/tourist homes during·the nnanclal year 1992· 
92. Writ Petitions filed by the appellants challenging the cancellation order 
were dismissed by the High Court. 
In the Special Leave petitions ftled before this Court against the 
High Court Orders, this Court granted interim stay to enure only upto F 
31.3.93, with liberty to the petitioners to approach the concerned 
authorities for renewal of the licence, for the year 1993-94 and a direction 
to the concerned authorities to dispose of the applications in accordance 
with law and on merits. However, on the basis of an alleged statement made 
on behalf of the State to the Press that the licences of the appellants would G 
not be renewed, the appellants approached the High Court for issue of 
directions to the respondents to renew their licences for the year 1993-94. 
The High Court directed the respondents to dispose of the appellants' 
applications for renewal of licences, as directed by this Court. The Excise 
Commissioner rejected the applications in the light of G.O. dated 9th H 
607 
608 
SUPREME COURT REPORTS (1993] SUPP. 3 S.C.R. 
A November, 1992. 
B 
In the appeal, before this Court, on behalf of the appellants it was 
contended that the Government's policy of prohibition was .iot in con-
sonance with practice, and it was denying the right to carry on business to 
the appellants for extraneous reasons, and that renewal of 381 licences, of 
the Iicencees who were similarly situated as the appellants, was contrary 
both to the policy decision of the Government and directive principles of 
the Constitution. It was also urged that the State being in contemp~, for 
making statement to the Press, in direct conflict with the earlier order of 
this Court and for rejecting the appellants applications, without examining 
C it on merits, it was not entitled to be heard. 
The respondents contended that the appellants formed a separate 
class inasmuch as they were issued licences in 1992-93 and, therefore, they 
could not claim to be in the same group as other licensees who were 
D operating from before. It was also urged that normally renewal and fresh 
grant were not dealt with by the same yardstick. 
E 
F 
Allowing the appeal, this Court 
HELD : 1.1. Classification which can be sustained must have a 
reasonable nexus with objective sought to be achieved by the impugned 
action. Except for the appellants, who are 21 in number, the State could 
not point out any circumstance which could establish that the policy of 
prohibition was being enforced or implemented. The validity of the State 
action has to be judged on positive steps taken by the State. for enforcing 
the policy. The appellants, who were granted licence in 1992-93 and those 
who are granted licences and are operating, from before are hoteliers and 
are required under rules to conform to two star hotel standard. Both are 
required to promote tourism. [613-C-F, 614-B] 
G 
1.2. The State is not following consistent and uniform policy. First, 
it announced its intention not to issue any licence. 'afresh' from 18th 
September 1991 but it did not adhere to it and within a month it issued 
another order in February 1992 deciding to grant the privilege of selling 
liquor promotion of tourism. In November 1992 it decided to cancel all 
H licence issued in current year. If the licences issued in 1993-94 to 
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VIJAYAKUMAR v. COMMR. OF EXCISE (SAHAI,J.] 
609 
licensees operating from before and to the appellants were issued afresh A 
as the rules do not making distinction betwee

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