HC okays bar licence to three-star hotels

High Court quashes amendments to Kerala foreign liquor rules

Published: 28th July 2012 09:14 AM  |   Last Updated: 28th July 2012 10:06 AM   |  A+A-

In a setback to the state’s attempts to restrict bar licences, the Kerala High Court on Friday quashed the amendments brought to the Kerala foreign liquor rules under the Kerala Abkari Act deleting three-star hotels from the category entitled for bar licence for retail sale of liquor in the hotels. With this, three-star hotels can also have bar licences.

The court also struck down the distance norm which prohibited four-star and above category hotels to have another hotel with bar licence within a radius of three km in grama panchayat and one km in municipality/corporation limits. The court declared that the amendment  brought in 2011 to the foreign liquor rule which denies bar licence to new three-star hotels is discriminatory and arbitrary and  also  observed that the distance regulation is completely destructive of the tourism projects of the state.

A Division Bench comprising Justice C N Ramachandran Nair and Justice K Vinod Chandran passed the order while considering petitions  filed by various three-star hoteliers challenging a Single Bench order which upheld the  amendments.

The petitioners contended that the amendment was discriminatory as it was not applicable to the existing three-star hotels.

The court directed the state to consider granting bar licences to all eligible hotels with three-star facilities.

Appearing for the state, Additional Advocate- General P C Iype mentioned a Supreme Court order and said that the right to carry on business was not a fundamental right and the new amendments were introduced to reduce the consumption of liquor in the state.

The court said that it would not be possible for the state to achieve any reduction in consumption of liquor by delaying licence for three-star hotels which are not set up to cater to the needs of local people. “The state government is monopolising the liquor sales and state government’s 30 per cent annual revenue is from liquor sale. Annual collection of sales tax, excise duty and bar licence fee account for around Rs 7,000 crore.  In fact, when liquor was available in 384 retail shops of the State Beverages Corporation and the State Cooperative Consumer Marketing Federation and 708 bar hotels, the government could not bring down consumption of liquor by refusing licence to one class of star hotels,” the court pointed out.

The court further observed that issuing bar licences to three-star hotels is to promote tourism and to earn foreign exchange to encourage flow of foreigners.


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