India, High Court of Bombay, 29 March 2022, Writ Petition No. 2873 of 2021
Deciding body (English)
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Outcome of the decision
The Petitioners are hotels selling foreign liquor and request that the license fee for 2021-2022 be adjusted according to the conditions in which the business operated during the pandemic. The Petitioners asked for a reduction of fees given the fact that they were allowed to operate only at 50% of their capacity due to COVID-19. The Court rejected their claim stating that it was irrational for foreign liquor vending hotels to put themselves on the same level as the true victims who fell to the onslaught of the COVID-19 pandemic.
Facts of the case
The Petitioners are hotels selling foreign liquor, who are unwilling to pay the license renewal fees prescribed by the State Government. They have paid 50% of the fees for 2021–2022. They are unwilling to pay more. They demand concessions. They complain of discrimination at the hands of the Respondents.
Under Rule 45 of the Maharashtra Foreign Liquor Rules 1953 (“the MFL Rules”) and Rules 3 and 4 of the Maharashtra Potable Liquor (Periodicity and Fees for Grant, Renewal or Continuance of a Licenses) Rules 1996 (“the Periodicity Rules”), a FL-III license is valid from the 1st of April to the 31st of March. Rule 3 of the Periodicity Rules requires that revised license fees be published in the Official Gazette.
On 28th of January 2021, the Respondent issued the impugned notification prescribing the license fees for 2021–2022. The Petitioners made two representations on the 25th of March 2021 and the 27th of March 2021 against this notification. The Petitioners sought a time extension or an instalment payment facility. They also demanded a reduction because they were being allowed to operate only at 50% capacity due to COVID-19 restrictions. They also sought that those who had already paid 100% for the previous year should be allowed to ‘adjust’ 50% for the 2021–2022 period.
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Reasoning of the deciding body
The Court stated that it was irrational for foreign liquor vending hotels to put themselves on the same level as the true victims who fell to the onslaught of the COVID-19 pandemic. There is no legal or fundamental right established to have a FL-III license and it is not compulsory. It was held that there was no legal or enforceable right to have a FL-III license on terms dictated by the licensee.
As every vendor of liquor is a licensee of the State Government, it was held to be incomprehensible how a licensee could claim a legally enforceable or constitutional right to dictate the terms and conditions- including fees of the license without demonstrating a clear transgression of Article 14. No other point of contention remains if a violation of Article 14 is not established. There is no inherent legal or fundamental right to foreign liquor license.
Additionally, the Court dismissed the Petitioners’ contention noting that the various steps and concessions taken by the State Government to assist the Petitioners such as the provision for making payment of license fees in 3 installments, allowing concession of 15% to those licensees who paid the entire license the previous year and extension of the time frame for payment of license fees and the like. It was held that for the year prior to that of the impugned notification (2021–2022), there was a rebate or a reduction on account of the pandemic. This was not a ‘normal’ change. The Petitioners cannot demand a reduction and then take the reduction given as a baseline to protest a reversion to the pre-COVID-19 lockdown levels. The comparison must be of the rates between 2021–2022 and 2019–2020 . Those rates are exactly the same. The intervening periods saw a reduction as a one-off concession precisely to mitigate business losses — the very demand the Petitioners make. Therefore, no substance at all regarding the Periodicity Rules, the rebates under the Prohibition Act or of any discrimination under Article 14.
Lastly, it was held that the government had a mammoth responsibility, far beyond the narrow commercial concerns of the Petitioners and their foreign liquor vending business. The needs of the many will always outweigh the needs of the few. The State was fully entitled to order the shut-down of Petitioners’ establishments in the public interest amidst the pandemic. Such power is also conferred by Rule 9A(2)(c) of the Cash Register Rules.
It was stated that the pandemic could not be cited time and again by businessmen to get extraordinary concessions. All businesses suffered due to the pandemic and no exceptional prejudice was caused to the present Petitioners. The Petitioners’ right to conduct business is not absolute in a time of global distress. The Petitioners cannot have it both ways. They demand a reduction (and would complain if there is none) and then they take the reduction given as a baseline to protest a reversion to the pre-COVID-19 lockdown levels. The comparison has to be of the rates between 2021–2022 and 2019–2020. Those rates “are exactly the same”. The intervening periods saw a reduction “as a one-off concession precisely to mitigate business losses — the very demand the Petitioners make”.
Conclusions of the deciding body
All claims were rejected and interim orders were vacated. The Petitioners case was deemed to be without merit and an order of costs against the Petitioners for an amount of 1 lakh each was directed to be paid to the Chief Minister’s Relief Fund for wasting the Court’s time on frivolous matters. Court stated that the ad-interim order to fulfill the 50% deposit obligation shall continue and that no extension shall be granted to the Petitioners. Petitioner’s submissions were dismissed on the grounds of having no substance and for being entirely speculative.
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General principle applied