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Subash Soman, Managing Director, M/s.Maramon Hotel & Resort Pvt. Ltd. v/s State of Kerala Rep. by The Secretary to the Government, Taxes Department & Others

    WP(C).No. 33842 of 2015 (E)
    Decided On, 16 February 2016
    At, High Court of Kerala
    By, THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU
    For the Petitioner: N. Dharmadan Senior, D.P. Renu, Advocate. For the Respondents: R4, V. Santharam, R1 & R 2, T.R. Rajesh, Government Pleader, R3, N. Nandakumara Menon, Advocates.


Judgment Text
1. Do the Abkari Act and the Rules made there under draw a distinction between a domestic terminal and an international terminal of an International Airport for the purpose of establishing an Executive Lounge where liquor is served to transiting passengers?

2. The petitioner, a Private Limited Company, represented by its Managing Director, has Hotels and Resorts. In the writ petition, however, the Managing Director projected himself as the petitioner instead of representing the Company-a minor, curable discrepancy. In the course of time, the Company obtained Exhibit P1 licence from the fourth respondent, the Airport Authority of India, to establish an Executive Lounge in the domestic terminal of the International Airport at Thiruvananthapuram. In terms of clause 4 of Exhibit P1 licence, the Company is entitled to sell Beer and Liquor at the Executive Lounge on the production of licence from the State Excise Department and also subject to payment of certain amounts to the Airport Authority of India.

3. The petitioner has applied to the Excise authorities through Exhibit P2 for an FL-7 licence as per the Foreign Liquor Rules ('the Rules'), especially sub-rule (7) of Rule 13. Apart from submitting Exhibit P2 application before the Excise officials, the petitioner has also submitted Exhibit P4 application to the third respondent seeking a No- Objection Certificate (NOC). For the Joint Commissioner of Excise, through Exhibit P5, has insisted on the petitioner's obtaining an NOC from the third respondent, the local authority.

4. When the petitioner had applied for another NOC from the Commissioner of Central Excise and Customs, the said authority, through Exhibit P6, made it clear that the petitioner would not require any NOC from them since it was not dealing with any foreign liquor. At any rate, as can be seen from the record, the Commissioner of Central Excise and Customs, at a later point in time, i.e. on 07.01.2016, issued Exhibit P8 order reiterating what was stated in Exhibit P6. And it was treated as an NOC, anyway.

5. Having come to realise that it need not obtain any NOC from the third respondent, the petitioner once again approached the second respondent for FL-7 licence, but could not succeed as the said authority insisted that the petitioner should produce an NOC from the third respondent. Aggrieved, the petitioner has filed the present writ petition.

6. Smt.Renu, the learned counsel for the petitioner, has strenuously contended that the petitioner need not obtain any NOC from the third respondent in terms of subrule (7) of Rule 13 of the Rules and also sub-section (7) of Section 447 of the Kerala Municipality Act ('the Act'). According to her, the second respondent's insistence that

the petitioner should obtain an NOC from the third respondent is totally illegal and unsustainable. Drawing my attention to Exhibit P7 interim order in W.P.(C)No. 5923/2015, the learned counsel has contended that this Court, under identical circumstances, has issued an interim direction to another person. The said person, in the course of time, was granted an FL-7 licence by the second respondent. According to her, the same authority ought not to have discriminated against the petitioner.

7. The learned counsel has also taken me through the provisions of the Airports Authority of India Act, 1994, especially Sections 2, 3 and 13 thereof.

8. Summing up her submissions, the learned counsel has contended that the Airport Authority in terms of Act 55 of 1994 is an autonomous entity having all the properties of Airports vested in it. She has, in the end, contended that in the absence of any statutory mandate, the second respondent cannot insist that the petitioner should obtain an NOC from the third respondent, which according to her, is an extra-legal requirement. Thus the learned counsel urges this Court to allow the writ petition: by directing the second respondent to issue to the petitioner an FL-7 licence.

9. Sri.V.Santharam, the learned counsel for the fourth respondent, has submitted that it is the Excise officials that had insisted on the petitioner's obtaining an NOC from the third respondent. According to him, the third respondent has no role to play in the issue of the petitioner's establishing an Executive Lounge in the domestic terminal of an International Airport. Thus, he has entirely endorsed the petitioner's stand on the issue of its not obtaining an NOC from the third respondent.

10. Sri.Rajesh, the learned Government Pleader, has tried to put up a spirited defence against the petitioner's claim. To begin with, he has taken me through the amended sub-rule (7) of Rule 13 of the Rules and also sub-section (7) of Section 447 of the Act. Making a threadbare analysis of these two provisions, the learned Government Pleader would contend that the spirit of the legislature is quite evident from the provisions. According to him, exemption from obtaining an NOC from the local authority applies only in the case of establishing an Executive Lounge in the International Terminal, but not in the domestic terminal. Though the expression employed is 'the International Airport', the question of passengers transiting arises only in the case of International Terminals, but not domestic ones, contends the learned Government Pleader.

11. The learned Government Pleader, in furtherance of his submissions, has contended that if at all the domestic terminals are permitted to have liquor parlours in the name of Executive Lounges, it would throw open the gates by providing access to all and sundry, who are not bona fide passengers. According to him, the spirit of the legislation, as can be gathered from sub-rule (7) of Rule 13, admits of no ambiguity that the petitioner has to obtain an NOC from the third respondent.

12. Laying specific emphasis on the explanation appended to Section 447 of the Act, the learned Government Pleader would contend that the Abkari Shop, as per the Act and the Rules, means a toddy shop, a foreign liquor retail shop, an establishment having an FL-9 licence, or a bar hotel. In elaboration, he has submitted that the definition of Abkari Shop is very comprehensive to take into its fold even the Bars and Hotels. Under the said exclusive definition falls even the Executive Lounge sought to be established by the petitioner, contends the learned Government Pleader.

13. Referring to Exhibits P6 and P8 communications from the Central Excise and Customs Department of the Union of India, the learned Government Pleader would contend that the said authority had correctly understood the import of Rule 13(7) of the Rules: The issue of the petitioner obtaining an NOC from the local authority arises if it were to establish an International Transit Lounge. In other words, as the Executive Lounge is to be established in the security hold area of the domestic terminal, the Excise and Customs Department has no role to play, but the local authority, i.e. the Municipal Corporation, does have.

14. Sri.N.Nandakumara Menon, the learned Senior Counsel for the third respondent, has submitted that the petitioner has no statutory obligation to obtain an NOC from the Municipal Corporation. According to him, the second respondent's direction that the petitioner should obtain an NOC from the third respondent is at best an extra-legal requirement, which cannot be insisted upon. He has made efforts to refute the learned Government Pleader's contention: That the Corporation has not come out with its defence in the matter, but the learned Senior Counsel has been making only oral submissions.

15. The learned Senior Counsel, in response, has emphatically submitted that in an identical writ petition, i.e. W.P.(C)No.5923/2015, the respondent Corporation has already filed its defence making it clear that for establishing an Executive Lounge in an International Airport, a licencee needs no NOC from the respondent Corporation, the local authority.

16. In reply, the learned counsel for the petitioner has submitted that the fourth respondent has already issued Exhibit P1(a) NOC declaring that it has already granted the necessary licence. And the petitioner is at liberty to establish its Executive Lounge after obtaining necessary FL- 7 licence from the authority concerned. When this Court has queried about the significance of Exhibit P1(a), the learned counsel for the fourth respondent has submitted that on numerous occasions the authorities of various departments in the state enquired with the Airport Authority whether a particular person had been granted the necessary permission to establish an Executive Lounge so that they could further process that petitioner's application. Thus, most of the times, in an anticipation of a favourable reply, the fourth respondent would issue an NOC in the form of Exhibit P1(a).

17. The learned counsel for the petitioner has further submitted that ever since the grant of Exhibit P1 licence by the fourth respondent, the petitioner has been paying `50,000/- per month, though he could not establish the Executive Lounge in view of the second respondent's insistence that the petitioner should obtain an NOC from the third respondent.

18. Heard the learned counsel for the parties on either side, apart from perusing the record.

19. The twin provisions on which the edifice of this case stands are Rule 13(7) of the Rules and Section 447(7) of the Act. Thus, it is apposite for us to examine those two provisions in detail. As can be seen from Exhibit P3, Rule 13 (7) mandates that FL-7 Airport Transit Lounge Licence shall be issued by the Commissioner of Excise to Air and Flight Service Operators maintaining a lounge bar in the International Airport in the State under the permission of the Commissioner of Customs. It should be on payment of an annual rental of Rupees One lakh.

20. Form FL-7, as has been incorporated in Rule 13 (7) of the Rules, among other things, contains a condition: The privilege conferred by this licence is restricted to the possession and sale of Indian Made Foreign Liquor to the bona fide international air passengers who are required to wait at the Airport transit lounge before resuming their journey.

21. Further, the explanatory note appended to Rule 13(7) makes it clear that Government have decided to introduce a new Foreign Liquor Airport Transit Lounge licence for Air Caterers and Flight Service Operators maintaining a lounge bar in the International Airports in the State only to cater to the needs of the passengers transiting the airports. That is how the legislature has underlined the need and necessity of amending Rule 13, which it has done through G.O.(P)No.87/2011/TD dated 19.07.2011.

22. If we further examine the amended Section 447 of the Act, sub-section (7) of the said provision is to the following effect:

'Notwithstanding anything contained in the Abkari Act, 1077 (1 of 1077) or in any other law for the time being in force, no person shall, without previous permission in writing of the Municipality and otherwise than in accordance with the conditions specified in the permission, establish an Abkari shop within a municipal area.'

23. Indeed, the explanation appended to the amended provision defines Abkari Shop as being a toddy shop or a foreign liquor shop or any other establishment having FL-9 licence. Since the learned Government Pleader has laid much emphasis on the said explanation, it is further appropriate to examine it, which reads as follows:

'Abkari shop' means a toddy shop or a foreign liquor shop or a foreign liquor retail shop or an establishment having FL-9 licence or a bar hotel, under the Abkari Act 1077 and the rules made there under.'

24. In the light of the above statutory provisions, the issues to be resolved are: (i) Whether sub-rule (7) of Rule 13 of the Rules makes any distinction between domestic terminal and international terminal in an International Airport; and (ii) Whether, in terms of the amended Section 447 of the Act, especially going by the definition of Abkari shop, the petitioner is mandated to obtain an NOC from the Municipal Corporation, as has been insisted upon by the second respondent.

25. To his credit, the learned Government Pleader has made herculean efforts to impress upon this Court that sub-rule (7) of Rule 13 read along with other provisions, such as sub-rule (9) of the Rules, makes the legislative intent crystal clear: There is a distinction between international terminal and domestic terminal; once the licencee has sought to establish any Executive Lounge in the domestic terminal, it is essential that the licencee should obtain an NOC from the Municipal Corporation. He has, as a matter of statutory interpretation, further contended that the provision calls for a purposive construction, lest the very statutory purpose would be defeated.

26. It is too well established to be caviled about that any legislation of whatever hue initially requires a literal interpretation. It is said to be the golden rule. If any such interpretation leads to an ambiguity and if it further lends to frustrating the legislative intent, only under those circumstances should the court indulge in purposive construction. This cannon of construction is of vintage value for it has stood the test of time since Heydon's Case reported by Lord Coke as far back as in 15841.

27. In the present instance, a close scrutiny of subrule (7) of Rule 13 of the Rules and also the explanatory 1 (1584) 3 Co. Rep. 7a, p. 7b (as mentioned at P.124 of G.P. Singh’s Principles of Statutory Interpretation note appended thereto, read with the conditions incorporated under Form FL-7, do not give rise to any ambiguity. The provision clearly establishes that the Executive while exercising its delegated legislative power has not sought to make any distinction between a domestic terminal and an international terminal when it comes to granting FL-7 licence.

28. All through the expression used is 'International Airport', which the fourth respondent is. Though the learned Government Pleader has contended that the question of transiting the passengers would come into the picture only in the case of international passengers, I am afraid it is incorrect. Even domestic passengers do transit and wait in the Airport for their flights. The further contention of the learned Government Pleader is that if an Executive Parlour is to be established in a domestic terminal without an NOC from the Municipal Corporation, it would provide access to all and sundry. It, too, cannot be countenanced.

29. Indeed, access to the international lounge or terminal will be available only to those passengers who have already taken boarding passes, thus being the bona fide passengers. I am therefore constrained to conclude that the learned Government Pleader's twin contentions are unsustainable despite his impassioned plea to the contrary.

30. We may, now, examine the learned Government Pleader's alternative submission. According to him, Section 447 of the Act also mandates that NOC from the Municipal Corporation is required in terms of the explanation added to the said provision-especially the definition of the term 'Abkari Shop'. We shall revisit the said provision.

31. Indeed, sub-section (7) of Section 447 makes it mandatory that notwithstanding anything contained in the Abkari Act, no person shall establish an abkari shop within a municipal area without the previous permission in writing of the Municipality and otherwise than in accordance with the conditions specified in the provision.

32. To hammer home his contention that the International Airport is also situated within the municipal area, the learned Government Pleader has placed reliance on Municipal Commissioner of Dum Dum Municipality v. Indian Tourism Development Corporation2 ('Dum Dum Municipality Case').

33. Once we examine the definition of Abkari shop, it is quite expansive. What is inescapable is that an establishment having an FL-9 licence, or a Bar, or a hotel established under the Abkari Act or the Rules made there under is required to have prior permission of the Municipal Corporation. Indisputably, the Executive Lounge can be called neither a hotel nor a bar so as to term it an Abkari shop. If it is to be treated as an establishment, that expression has had a qualifier added to it: FL-9 licence as the distinguishing factor of the said establishment. In other words, the statutory mandate affects not all the establishments but only those that have an FL-9 licence.

34. The learned Government Pleader has also referred to sub-rule (9) of Rule 13 of the Rules. He has emphasised that if both the provisions are read together, it gives rise to, according to him, an impression that even subrule (7) also intends to take into its fold not only FL-9 but also all other licences, including FL-7 licence. Regrettably, even this contention cannot be countenanced.

35. Once a particular species is mentioned, it is, by implication, clear that the rest have been excluded. This principle applies with more vigour to the

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interpretation of the provisions of the same enactment. In this case, the provision has comprehensively included various categories. Those that have not been mentioned should be taken to have been consciously omitted. It is, indeed, not in the province of a Court to read into a legislation things that are not to be found explicitly or even implicitly. 36. Thus, it is very clear that whatever be the condition imposed under Section 447(7), it could apply only to FL-9 licence. Given the definitive pronouncement of the Hon'ble Supreme Court in Dum Dum Municipality Case (supra), it need not be disputed that even the international lounge would fall within the jurisdiction of the Municipal Corporation. Nevertheless, the present adjudication will not have a different conclusion even if one is to accept that the Municipal Corporation does have the jurisdiction over an International Airport for the purpose of collecting the tax or even granting the licences. 37. In elaboration, I may observe that it is one thing to say that an entity has jurisdiction over an issue; it is another to say that the said jurisdiction is all encompassing. Jurisdiction of a local body over an area is an enabling feature. It is for the legislature to determine which aspect of administration the jurisdiction should extend to. 38. In the facts and circumstances, this Court is of the view that the second respondent's communication in Exhibit P5 that the petitioner should obtain an NOC from the third respondent is unsustainable and is accordingly set aside to the said extent. As a result, this Court further directs the second respondent to process the petitioner's application for FL-7 licence and pass appropriate orders thereon as expeditiously as possible, at any rate within one month from the date of receipt of a copy of this judgment. The writ petition stands disposed of. No order as to costs.