IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4157 OF 2015THE KERALA BAR HOTELS ASSOCIATION & ANR. .. APPELLANTS VERSUSSTATE OF KERALA & ORS. .. RESPONDENTS WITH[C.A. NO. 4119/2015, C.A. NO. 4120/2015,C.A. NO. 4121/2015, C.A. NO. 4122/2015,C.A. NO. 4123/2015, C.A. NO. 4124/2015,C.A. NO. 4125/2015, C.A. NO. 4126-4136/2015,C.A. NO. 4137-4156/2015, C.A. NO. 4158-4159/2015, C.A. NO. 4160/2015, C.A.NO. 4161-4165/2015,C.A. NO. 4166/2015, C.A. NO. 4167/2015,C.A. NO. 4168/2015, C.A. NO. 4169/2015,C.A. NO. 4170/2015, C.A. NO. 4171/2015,C.A. NO. 4172/2015, C.A. NO. 4173/2015,C.A. NO. 4174/2015, C.A. NO. 4175/2015,C.A. NO. 4999/2015, C.A. NO. 5000/2015,C.A. NO. 5374/2015, C.A. NO. 4998/2015,C.A. NO. 5375/2015, C.A. NO. 5032/2015,C.A. NO. 5373/2015, C.A. NO. 6268/2015,C.A. NO. 5791/2015, C.A. NO. 5372/2015,C.A. NO. 5792/2015, C.A. NO. 5793/2015,C.A. NO. 5797/2015, C.A. NO. 5799/2015,C.A. NO. 5800/2015, C.A. NO. 5801-5803/2015,C.A. NO. 6271/2015, C.A. NO. 6272/2015,C.A. NO. 6269/2015, C.A. NO. 5790/2015,C.A. NO. 4118/2015, C.A. NO. 6273-6274/2015 and C.A. NO. 6324/2015] J U D G M E N TVikramajit Sen, J.1 These Appeals call into question the legal correctness of theJudgment of the Division Bench of the High Court of Kerala dated 31.3.2015by which several Writ Appeals filed by some of the Writ Petitionersassailing the Judgment of the learned Single Judge came to be dismissed andthe Writ Appeals filed by the State came to be allowed. The writpetitioners, which include hotels which have been classified as Two Star,Three Star, Four Star and Heritage hotels, challenged the Abkari Policy forthe year 2014-15 as well as the amendments to the Foreign Liquor Rules.While dismissing the writ petitions, the learned Single Judge carved out anexception vis-a-vis the eligibility of Four Star and Heritage categoryhotels to the grant of FL-3 licence, finding their exclusion to bearbitrary and violative of Article 14 of the Constitution. This holdingresulted in the filing of appeals on behalf of the State. The impugnedJudgment has reversed this conclusion of the learned Single Judge andconsequently only Five Star hotels in the State of Kerala are presentlypermitted to serve alcohol in their bars i.e. in public.2 The Abkari Act, 1077 was introduced in the erstwhile State of Cochinin 1902 and came to be extended throughout the State of Kerala in 1967.The Foreign Liquor Rules were promulgated by virtue of Sections 10 and 24to 29 of the Abkari Act, relating to the sale of Indian Made Foreign Liquor(IMFL). As at present, the private sector is not permitted to manufactureIMFL and there is only one State owned distillery. Previous to the extantpolicy, FL-1 licences i.e. retail of licence sale of foreign liquor, wereauctioned by the State to private parties, which practice, as is obvious,has been discontinued. It may also be relevant to mention that the Stateof Kerala made a futile foray into prohibition, but this was withdrawn in1967. The existence of a Union Territory, Mahe, within the State ofKerala, and boundaries with the States of Karnataka and Tamil Nadu wherethe sale or consumption of liquor is not prohibited indubitably makes italmost impossible for the State to venture into prohibition.3 It has not been disputed that the State of Kerala is facing an acutesocial problem because of the widespread and excessive consumption ofalcohol. It appears that almost 14 per cent of the national consumption ofalcohol occurs in this comparatively territorially small State (indeed adubious distinction), which also justifiably boasts of 100 per centliteracy. Faced with this social malaise, the State Government appears tohave considered that banning the consumption of hard alcohol in public mayhave the effect of bringing down and arresting the ever escalatingaddiction to liquor. But we must immediately record our reservationinasmuch as FL-11 licences for the sale of consumption of beer and wine arerampantly issued. If the addiction to alcohol or introduction into thispernicious habit is to be combated, there seems to us to be nojustification to allow beer or wine to be publically consumed. Therecannot be any caveat to the opinion that permitting the consumption of beerand wine is a gateway to the consumption of hard liquor, and indeed is asocial malaise in itself. In 1992, the grant of FL-3 licence wasrestricted to hotels having Two Star and above classification. This wasfollowed in 1996 by the banning of sale of arrack. In 2002, Rule 13(3) wasamended thereby restricting grant of FL-3 licences to hotels possessingThree Star and above ratings; existing Two Star hotels possessing FL-3licences were however renewed on the understanding that this was theirbounden right. This policy was taken to the courts and was eventuallysettled by the decision of this Court in State of Kerala v. B.Six HotelsResort Private Ltd. 2010 (5) SCC 186 which had upheld that policy.Obviously encouraged by this success, the State of Kerala in 2011introduced further amendments to Rule 13(3) whereby only hotels with FourStar and above classifications were eligible for fresh FL-3 licenses.Again, on the predication that existing FL-3 licence holders were legallyentitled to their renewal, this exception was recognised in the Rules.“Distance criteria” was raised and rejected and we are now no longerconcerned therewith. In State of Kerala v. Surendra Das 2014 (3) SCALE421; AIR 2014 SC 2762, this Court upheld the policy challenged by severalwrit petitioners insofar as it declined issuance of fresh FL-3 to ThreeStar hotels; the “distance criteria” was struck down. In the duration ofthis litigation the State Government had also made it known that itintended to extend the discontinuance of FL-3 licences to Four Star hotels,but this Court thought it appropriate to interdict that proposal till suchtime as the Report of the One-man Commission was published and consideredand till the State took action against non-standard hotels. In whatavowedly is the anticipated and logical progression, the State Governmenthas now restricted FL-3 licences to Five Star hotels alone, and has alsodecided not to renew all existing FL-3 licences to any of the other hotels.4 We think it expedient to reproduce the relevant portion of said Orderdated 22.8.2014:The Government being convinced the fact that in order to achieve the goalof “Liquor-Free Kerala”, strict and urgent measures are to be adopted, theAbkari Policy 2014-15 is hereby declared subject to the following criteria.Hereinafter Bar licenses will be issued only to 5 star hotels. Thelicenses of existing bar hotels which are functioning on the basis ofprovisional renewal of licenses except the licenses of 5 star hotels willbe cancelled. The Government has decided not to renew the licenses of 418non standard bar hotels mentioned in the Judgment of the Supreme Court.10% of outlets out of 338 FL-1 outlets of Kerala State BeveragesCorporation and 46 outlets of Consumer Fed will be closed each year from2nd October, 2014 onwards.The sale of high strength alcoholic liquor through Beverages Corporationwill be gradually reduced.In order to rehabilitate the employees who lose their job due to theclosing of bar and to rehabilitate the persons who are alcoholicallyaddicted a special plan namely “Punarjani 2030” will be commenced. Forthat purpose, 5% Cess will be imposed on the liquor which selling throughthe K.S.B.C.The Liquor-Free propaganda program will be strengthened in the society atlarge and especially in educational institutions.All Sundays will be declared as dry-day. This will implement from theSunday of 5th October, 2014.The traditional toddy tapping business will be protected and job securitywill be ensured for toddy tappers.In order to rehabilitate the employees of closing bars and employeesengaged in the job of affixing stickers, measures will be adopted. KeralaAlcohol Education Research, Rehabilitation & Compensation Fund (KAERCF)Fund will be formed in order to protect the retrenched employees. Thesaid fund will be utilized for the following purposes such as makingpropaganda against drinking of alcohol, for collection of data regardingthis matter, to protect those who destroyed themselves by alcoholconsumption, rehabilitation of the persons who lost job. The fund for thispurpose will also be found out from public.To implement the order urgently, the Excise Commissioner, K.S.B.C. ManagingDirector have to take measures to submit the recommendations urgently tothe Government. By order of Governor A. Ajithkumar Secretary5 The first paragraph of sub-rule (3) of Rule 13 was substituted by wayof G.O.(P) No. 141/2014 and now reads as follows:“(3) Foreign Liquor 3 Hotel (Restaurant) license. – License in this formmay be issued by the Excise Commissioner under orders of Government, in theinterest of promotion of tourism in the State, to hotels which haveobtained Five Star, Five Star Deluxe classifications from the Ministry ofTourism, Government of India, where the privilege of sale of foreignliquor in such hotels has been purchased on payment of an annual rental of[pic]23,00,000 (Rupees Twenty-three lakhs only). However, no such licenseshall be issued to hotels if located within 200 (two Hundred) metres fromany educational institution, temple, church, mosque, burial ground orscheduled caste/scheduled tribe colony. The applicant shall produce fromthe Abkari Workers’ Welfare Fund Inspector, a Certificate to the effectthat he has remitted before the date of application for license/renewal oflicense, the arrears of contributions if any payable up to the 31st day ofDecember of the preceding year.”The sixth proviso to the Rule was amended to read as follows:“Provided also that the licences which have been renewed temporarily from1st April, 2014, other than those of the hotels having Five Starclassifications shall be cancelled.”6 Litigation pertaining to or challenging liquor policies is legion inour land. In his inimitable style Justice V.R. Krishna Iyer commenced theJudgment of the Three-Judge Bench in P.N. Kaushal v. Union of India 1978(3) SCC 558 thus: A raging rain of writ petitions by hundreds of merchants ofintoxicants hit by a recently amended rule declaring a break of two “dry”days in every “wet” week for licensed liquor shops and other institutionsof inebriation in the private sector, puts in issue the constitutionalityof Section 59(f)(v) and Rule 37 of the Punjab Excise Act and Liquor Licence(Second Amendment) Rules, (hereinafter, for short, the Act and the Rules).The tragic irony of the legal plea is that Articles 14 and 19 of the veryConstitution, which, in Article 47, makes it a fundamental obligation ofthe State to bring about prohibition of intoxicating drinks, is pressedinto service to thwart the State’s half-hearted prohibitionist gesture. Ofcourse, it is on the cards that the end may be good but the means may bebad, constitutionally speaking. And there is a mystique about legalesebeyond the layman’s ken!2. To set the record straight, we must state, right here, that no frontalattack is made on the power of the State to regulate any trade (even atrade where the turn-over turns on tempting the customer to take reelingroiling trips into the realm of the jocose, belliocose, lachrymose andcomatose).7 A plethora of precedents on the subject in which we are presentlyconcerned compels us, in order to avoid prolixity, to refer to only a fewdecisions of this Court. We have already a mentioned two of these – B.SixHotels and Surendra Das to which we will revert later. The ConstitutionBench decision in Krishan Kumar Narula v. State of Jammu and Kashmir AIR1967 SC 1368 concerned the challenge to the refusal to renew licences forthe year 1966-67 in respect of the liquor shop of that petitioner. ThisCourt observed that “dealing in liquor is business and a citizen has aright to do business in that commodity, but the State can make a lawimposing reasonable restrictions on the said right, in public interest”.8 This very conundrum once again received the attention of theConstitution Bench in Khoday Distilleries Ltd. v. State of Karnatka 1995(1) SCC 574, where the constitutional provisions pertinent to transactingbusiness in liquor were considered in minute detail, along with decisionswhich had already been rendered by this Court. The paragraph extractedbelow contains a precis and commends reading: “60. We may now summarise the law on the subject as culled from theaforesaid decisions.(a) The rights protected by Article 19(1) are not absolute but qualified.The qualifications are stated in clauses (2) to (6) of Article 19. Thefundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, tobe read along with the said qualifications. Even the rights guaranteedunder the Constitutions of the other civilized countries are not absolutebut are read subject to the implied limitations on them. Those impliedlimitations are made explicit by clauses (2) to (6) of Article 19 of ourConstitution.(b) The right to practise any profession or to carry on any occupation,trade or business does not extend to practising a profession or carrying onan occupation, trade or business which is inherently vicious andpernicious, and is condemned by all civilised societies. It does notentitle citizens to carry on trade or business in activities which areimmoral and criminal and in articles or goods which are obnoxious andinjurious to health, safety and welfare of the general public, i.e., resextra commercium, (outside commerce). There cannot be business in crime.(c) Potable liquor as a beverage is an intoxicating and depressant drinkwhich is dangerous and injurious to health and is, therefore, an articlewhich is res extra commercium being inherently harmful. A citizen has,therefore, no fundamental right to do trade or business in liquor. Hencethe trade or business in liquor can be completely prohibited. (d) Article 47 of the Constitution considers intoxicating drinks and drugsas injurious to health and impeding the raising of level of nutrition andthe standard of living of the people and improvement of the public health.It, therefore, ordains the State to bring about prohibition of theconsumption of intoxicating drinks which obviously include liquor, exceptfor medicinal purposes. Article 47 is one of the directive principles whichis fundamental in the governance of the country. The State has, therefore,the power to completely prohibit the manufacture, sale, possession,distribution and consumption of potable liquor as a beverage, both becauseit is inherently a dangerous article of consumption and also because of thedirective principle contained in Article 47, except when it is used andconsumed for medicinal purposes.(e) For the same reason, the State can create a monopoly either in itselfor in the agency created by it for the manufacture, possession, sale anddistribution of the liquor as a beverage and also sell the licences to thecitizens for the said purpose by charging fees. This can be done underArticle 19(6) or even otherwise.(f) For the same reason, again, the State can impose limitations andrestrictions on the trade or business in potable liquor as a beverage whichrestrictions are in nature different from those imposed on the trade orbusiness in legitimate activities and goods and articles which are rescommercium. The restrictions and limitations on the trade or business inpotable liquor can again be both under Article 19(6) or otherwise. Therestrictions and limitations can extend to the State carrying on the tradeor business itself to the exclusion of and elimination of others and/or topreserving to itself the right to sell licences to do trade or business inthe same, to others.(g) When the State permits trade or business in the potable liquor with orwithout limitation, the citizen has the right to carry on trade or businesssubject to the limitations, if any, and the State cannot makediscrimination between the citizens who are qualified to carry on the tradeor business.(h) The State can adopt any mode of selling the licences for trade orbusiness with a view to maximise its revenue so long as the method adoptedis not discriminatory.(i) The State can carry on trade or business in potable liquornotwithstanding that it is an intoxicating drink and Article 47 enjoins itto prohibit its consumption. When the State carries on such business, itdoes so to restrict and regulate production, supply and consumption ofliquor which is also an aspect of reasonable restriction in the interest ofgeneral public. The State cannot on that account be said to be carrying onan illegitimate business.9 So far as the essential concomitants of Article 14 are concerned, weneed not, nay, cannot travel beyond the decision of the Seven-Judge Benchof this Court in In Re: The Special Courts Bill, 1978, 1979 (1) SCC 380.We shall reproduce the first 11 propositions carved out in that judgment:(1) The first part of Article 14, which was adopted from the IrishConstitution, is a declaration of equality of the civil rights of allpersons within the territories of India. It enshrines a basic principle ofrepublicanism. The second part, which is a corollary of the first and isbased on the last clause of the first section of the Fourteenth Amendmentof the American Constitution, enjoins that equal protection shall besecured to all such persons in the enjoyment of their rights and libertieswithout discrimination of favouritism. It is a pledge of the protection ofequal laws, that is, laws that operate alike on all persons under likecircumstances. (2) The State, in the exercise of its governmental power, has of necessityto make laws operating differently on different groups or classes ofpersons within its territory to attain particular ends in giving effect toits policies, and it must possess for that purpose large powers ofdistinguishing and classifying persons or things to be subjected to suchlaws.(3) The constitutional command to the State to afford equal protection ofits laws sets a goal not attainable by the invention and application of aprecise formula. Therefore, classification need not be constituted by anexact or scientific exclusion or inclusion of persons or things. The courtsshould not insist on delusive exactness or apply doctrinaire tests fordetermining the validity of classification in any given case.Classification is justified if it is not palpably arbitrary.(4) The principle underlying the guarantee of Article 14 is not that thesame rules of law should be applicable to all persons within the Indianterritory or that the same remedies should be made available to themirrespective of differences of circumstances. It only means that allpersons similarly circumstanced shall be treated alike both in privilegesconferred and liabilities imposed. Equal laws would have to be applied toall in the same situation, and there should be no discrimination betweenone person and another if as regards the subject-matter of the legislationtheir position is substantially the same.(5) By the process of classification, the State has the power ofdetermining who should be regarded as a class for purposes of legislationand in relation to a law enacted on a particular subject. This power, nodoubt, in some degree is likely to produce some inequality; but if a lawdeals with the liberties of a number of well defined classes, it is notopen to the charge of denial of equal protection on the ground that it hasno application to other persons. Classification thus means segregation inclasses which have a systematic relation, usually found in commonproperties and characteristics. It postulates a rational basis and does notmean herding together of certain persons and classes arbitrarily.(6) The law can make and set apart the classes according to the needs andexigencies of the society and as suggested by experience. It can recogniseeven degree of evil, but the classification should never be arbitrary,artificial or evasive.(7) The classification must not be arbitrary but must be rational, that isto say, it must not only be based on some qualities or characteristicswhich are to be found in all the persons grouped together and not in otherswho are left out but those qualities or characteristics must have areasonable relation to the object of the legislation. In order to pass thetest, two conditions must be fulfilled, namely, (1) that the classificationmust be founded on an intelligible differentia which distinguishes thosethat are grouped together from others and (2) that that differentia musthave a rational relation to the object sought to be achieved by the Act.(8) The differentia which is the basis of the classification and the objectof the Act are distinct things and what is necessary is that there must bea nexus between them. In short, while Article 14 forbids classdiscrimination by conferring privileges or imposing liabilities uponpersons arbitrarily selected out of a large number of other personssimilarly situated in relation to the privileges sought to be conferred orthe liabilities proposed to be imposed, it does not forbid classificationfor the purpose of legislation, provided such classification is notarbitrary in the sense abovementioned.(9) If the legislative policy is clear and definite and as an effectivemethod of carrying out that policy a discretion is vested by the statuteupon a body of administrators or officers to make selective application ofthe law to certain classes or groups of persons, the statute itself cannotbe condemned as a piece of discriminatory legislation. In such cases, thepower given to the executive body would import a duty on it to classify thesubject-matter of legislation in accordance with the objective indicated inthe statute. If the administrative body proceeds to classify persons orthings on a basis which has no rational relation to the objective of thelegislature, its action can be annulled as offending against the equalprotection clause. On the other hand, if the statute itself does notdisclose a definite policy or objective a nd it confers authority onanother to make selection at its pleasure, the statute would be held on theface of it to be discriminatory, irrespective of the way in which it isapplied.(10) Whether a law conferring discretionary powers on an administrativeauthority is constitutionally valid or not should not be determined on theassumption that such authority will act in an arbitrary manner inexercising the discretion committed to it. Abuse of power given by law doesoccur; but the validity of the law cannot be contested because of such anapprehension. Discretionary power is not necessarily a discriminatorypower.(11) Classification necessarily implies the making of a distinction ordiscrimination between persons classified and those who are not members ofthat class. It is the essence of a classification that upon the class arecast duties and burdens different from those resting upon the generalpublic. Indeed, the very idea of classification is that of inequality, sothat it goes without saying that the mere fact of inequality in no mannerdetermines the matter of constitutionality.10 It would now be apposite to discuss both B.Six Hotels and SurendraDas in some detail. In B.Six Hotels, the Applicant’s application for an FL-3 license was rejected by the Excise Authorities resulting in the filing ofa writ petition before the High Court, pursuant to which the ExciseCommissioner was directed to decide the matter afresh. During the ensuinglitigation, Rule 13(3) was amended and a proviso was added stating that “nonew licenses under this Rule shall be issued”. This was the 2002 amendmentwhereby fresh FL-3 licenses were to be allowed only for Three Star hotelsand above. Consequently, the Excise Commissioner rejected the Applicant’slicense in view of the abovementioned proviso. The High Court upheld theamendment but found that the application had to be considered withreference to the Rules as they existed on the date of the application andnot the date of consideration of the application. When the matter reachedthis Court, we held that the Rules had to be considered as extant on thedate of consideration of the application. This Court opined that since “theState has exclusive privilege of manufacture and sale of liquor, and nocitizen has a fundamental right to carry on trade or business in liquor,the applicant did not have a vested right to get a licence. Where there isno vested right, the application for licence requires verification,inspection and processing. In such circumstances it has to be held that theconsideration of application of FL-3 licence should be only with referenceto the rules/law prevailing or in force on the date of consideration of theapplication by the excise authorities, with reference to the law and not ason the date of application.” It was also noted that the promotion oftourism is to be balanced with general public interest. If the State findsthat sufficient licenses have already been granted or that no more shouldbe granted in the public interest, it can take a policy decision not togrant any further licenses. “If the policy is not open to challenge, theamendments to implement the policy are also not open to challenge.” It wason this dialectic that the proviso was upheld.11. In Surendra Das, the Writ Petitioner had challenged the denial of anFL-3 license to his Three Star hotel on the basis of the 2011 amendment toRule 13(3) which restricted fresh licenses to hotels of Four Star and aboveclassifications. The newly introduced ‘Distance Rule’ was also challenged.The Single Judge therein dismissed the writ petition, finding no vestedright to get a license, no element of discrimination and no legitimateexpectation. The Division Bench, however, found no distinction betweenexisting Three Star hotels and new ones, and held that the decision to setup hotels should be left to hoteliers. It found both the amendments bad inlaw. This Court again reaffirmed that there is no fundamental right totrade in liquor. Since the deletion of Two Star hotels was upheld in B.SixHotels, the deletion of Three Star hotels was upheld on the ground that itfalls in the same genre. This Court dismissed the contention of the WritPetitioner that the plea under Article 14 was not specifically consideredin B.Six Hotels, inasmuch as B.Six Hotels allowed for a periodic assessmentof government policy and for the promotion of tourism to be balanced withthe general public interest. It has been pointed out by the Appellantsherein that this Court went on to find that Two Star and Three Star hotelsstand on a different footing than those of Four Star and Five Starclassifications, as per the classification of the Ministry of Tourism andthe fact that only the latter is required to have a bar license. However,this finding was clearly obiter and must be treated as such. The DistanceRule was struck down, with a finding that “although we do not dispute thepower of the State Government to bring about the necessary reform, bymodifying the rules, it has got to be justified on the cornerstone of thecorrelation between the provision and the objective to be achieved. If thatcorrelation is not established, surely the rule will suffer from the viceof arbitrariness and therefore will be hit by Art. 14.” This Court alsonoted that if the State is genuinely serious about reducing liquorconsumption, it should take steps to reduce its own shops and depots andbehave in conformity with the mandate of Article 47. The limitation offresh licenses to Four Star hotels and above was upheld, but the StateGovernment was directed not to deny FL-3 licenses to hotels with Four Starand above classifications until the receipt of the report of the One ManCommission, and until action is taken against non-standard restaurants whohave been permitted under the sixth and seventh proviso of Rule 13(3).12 As we have already delineated, it is in the wake of these twojudgments that the further restriction of FL-3 licenses to Five Star hotelsalone was prescribed. As previously mentioned, the learned Single Judge inthe detailed judgment dated 30.10.2014, upheld the petitions of the FourStar and Heritage category hotels, but declined those of Two Star and ThreeStar and unclassified hotels. Upon a detailed discussion of the judgment inKhoday, it was found that a citizen has no fundamental right to conducttrade or business in potable liquor. However, in the event of the Statepermitting of trade or business in potable liquor with or withoutlimitation, the citizen has the right not to be discriminated against. Anyregulatory measure would thus have to satisfy the test of Article 14. Itrejected the arguments of the Appellants that the field of prohibition isoccupied by the Prohibition Act, 1950 and that the present policy isoutside the scope of the object of the Abkari Act as it aims at bringingabout prohibition. It was also held that where a change of policy is validin law, any action taken pursuant to it cannot be attacked or invalidatedon the ground of legitimate expectations. Regarding the challenge on thebasis of Article 14, the Single Judge discussed the position of Two Starand Three Star hotels separately from Four Star and Heritage hotels.Regarding the former, it was held that their contention that theclassification is discriminatory is no longer res integra in view of thedictum of this Court in B.Six Hotels and Surendra Das. So far as the FourStar hotels are concerned, the Single Judge noted that there are only 20Five Star hotels in Kerala and only 33 hotels in the Four Star and Heritagecategories. It was held that none of the material before the StateGovernment proposed the exclusion of Four Star and Heritage hotels from thecriterion of eligibility for bar licenses. While there is a presumptionthat the Government has full knowledge of the social aspects of theproposed controls, in the absence of any material on the record, thispresumption cannot be pushed to the extent of presuming that the Statecould have possessed some undisclosed and unknown reason or material tojustify its action. The One Man Commission and the Tax Secretaryrecommended the grant of licenses to hotels with sufficient facilities.The learned Single Judge in Surendra Das noted that Three Star, Four Starand Five Star hotels constituted a distinct class. Even Rule 13(3) of theForeign Liquor Rules maintained a distinction between Four and Five Starhotels and those of Three Stars and below, by prescribing that the formerhave to maintain a distance of only 50 meters from educational andreligious institutions. The Government did not even state the reasons forrejecting the recommendations in the Reports before it. The learned SingleJudge accordingly held that the policy was violative of Article 14 and itwas struck down inasmuch as it excluded Four Star and Heritage categoryhotels from being granted FL-3 licenses.13 This decision was set aside by the Division Bench in an equallydetailed judgment dated 31.3.2015. The Division Bench opined that thoughthe Government was bound to consider the recommendations of the One ManCommission, it was not bound to accept the Report in its entirety. TheReport was simply a piece of evidence which the Government would have totake note of. It was for the State to evolve a policy taking into accountthe welfare of the people, and the Courts have a very narrow and limitedscope to intervene in such policy decisions. It is also not for the Courtsto find whether a more feasible view is possible or whether a better policycould be evolved, which intrinsically remains a subjective exercise. TheDivision Bench also differentiated the factual matrix obtaining before itfrom that in State of Maharashtra v. Indian Hotel and RestaurantsAssociation (2013) 8 SCC 519, commonly referred to as the Dance Bar case,on the premise that in the latter the fundamental rights of thousands ofdancing girls was also in issue, and dancing in itself is not harmful tothe health, although it could affect the morality of people and the dignityof women based on the manner in which the dance was performed. The DivisionBench noted that the impugned policy is in consonance with Article 47 ofthe Constitution which provides that the State shall regard the raising ofnutrition and the standard of living of its people and the improvement ofpublic health as among its primary duties, in particular endeavoring tobring about prohibition. All the relevant documents and Reports wereavailable to the Government at the time it made the impugned policy, ergoit should be assumed that the Government duly deliberated on them. It washeld that Four Star, Five Star and Heritage category hotels cannot be saidto form a single class by themselves, as different yardsticks are providedfor each of these categories. The Division Bench noted that the object ofthe policy is the reduction of consumption of alcoholic beverages in publicplaces and the protection of the youth from the adverse consequences ofconsumption of alcohol. Additionally, it was an ongoing policy, so thedeclaration that FL-3 licenses were being restricted to only Five Starhotels could not have come as a surprise. It was found that the One ManCommission Report was considered by the Government, as evidenced by variousterms in the policy, and it was not necessary for the Government to acceptthe recommendations in their entirety. The appeals filed by the Two Star,Three Star and unclassified hotels were therefore dismissed, and theappeals filed by the State were allowed.14 In the interest of avoiding prolixity, we shall refrain fromrecording the arguments before us in unnecessary detail. Instead, we shallbegin our analysis by laying out the crux of the arguments of learnedSenior Counsel for the Respondent, who has submitted that the Governmenthas the right to devise whatever policy it thinks expedient, and the Courtshould only interfere if the policy is mala fide or the measures proposedare ex facie so extraneous to the object of the policy that no reasonableperson would have resorted to the same. Furthermore, since trade in andsale of liquor is the exclusive privilege and preserve of the Government,it has the freedom to decide whether to part with its privilege and to whatextent it should do so. It has also been submitted that the end goal of theimpugned policy is for Kerala to become liquor-free. This does not have tobe achieved in one fell swoop, but can be introduced in whatever piecemealmanner the Government reasonably sees fit. In fact, the State has beentaking steps to this effect for decades, and has been endeavouring toreduce the consumption of alcohol in public since 1992. The State should beallowed to experiment to see which version and variation of its policiesachieves the best result. It may well choose to revoke an unsuccessfulpolicy at some later date. To make such policies is within the power of theState, and in the face of the current ground reality, even a policy whichachieves only a partial reduction in the amount of alcohol consumed in theState would be considered a success for the State.15 The State’s policy to achieve a liquor-free Kerala has threeconstituents. The first is regarding manufacture. Manufacture is no longerin private hands, and no licenses have been given since 1999. There is onlyone Government distillery in the State, thus giving the State the necessarycontrol. Secondly, wholesale and retail supply has been under the controlof the State since 1984. The Government has taken steps to curb consumptionby reducing the number of FL-1 shops by over 10 per cent, from 384 to 332,between 2014 and 2015. The third element, which is pertinent on the factsbefore us, is regarding consumption which is in alarming proportion inKerala especially when compared to other States. The Table produced belowis relevant in understanding the consumption trends in the State. As muchas 80 per cent of the sale of alcohol is through the State monopoly outletspossessing FL-1 licences, aggregating Rs.6260/- crores in 2012-13. In starkcontrast, the smallest percentage of sales is in Five Star hotels. 2010-2011 2011-2012 2012-2013|Category |Value |% |Value in|% |Value in|% || |in | |Crores | |Crores | || |Crores | | | | | ||5 Star |2.25 |0.04 |9.18 |0.13 |6.32 |0.08 ||4 Star |13.58 |0.21 |15.81 |0.22 |33.26 |0.4 ||3 Star |448.71 |7.09 |539.12 |7.35 |644.19 |7.76 ||2 Star |150.31 |2.38 |171.63 |2.34 |195.73 |2.36 ||UN STARRED |854.8 |13.5 |955.39 |13.03 |1126.23 |13.56 ||FL-1 SHOPS |4823 |76.21 |5612 |76.53 |6260 |75.39 ||HERITAGE |4.93 |0.08 |8.04 | 0.11 |12.34 |0.15 ||CLASSIFIED |29.89 |0.47 |19.77 |0.27 |24.55 |0.29 ||TOTAL |6328.75|100 |7332.13 |100 |8303.65 |100 |16 In its attempt to reduce the consumption of alcohol in Kerala, theGovernment has decided to curb public drinking. This is enshrined inSection 15C of the Abkari Act, which is laid out below for the facility ofreference:15C. Consumption in public places. – No person shall consume liquor in anypublic place unless consumption of liquor in any such place is permittedunder a license granted by the Commissioner.Explanation I. – For the purpose of this section, “public place” means anystreet, Court, Police Station [or other public office or any club] or anyplace of public amusement or resort or on board any passenger boat orvessel or any [“public passenger or goods vehicle”] or dining orrefreshment room in a restaurant, hotel, rest-house, travellers bungalow ortourist bungalow where different individuals or groups of persons consumefood but shall not include any private residential room.”Rule 13(3) of the Abkari Rules is thus an exception to Section 15C, for thepurpose of tourism. The situation before us, then, is not as simple as theConstitutional rights of hotels of Four Star and below classificationsbeing violated because of a policy granting FL-3 licenses only to Five Starhotels. The question is whether the policy to ban consumption of alcohol inpublic or the exception carved out of this policy in favour of Five Starhotels is violative of the rights under Article 14 and Article 19 of hotelsof Four Star and below classifications.17 The Appellants have submitted that their rights under Article 14 havebeen violated. It is trite law that Article 14 allows for reasonableclassifications, where the classification fulfils the dual criteria ofbeing based on a reasonable differentia which has a nexus with the objectsough to be achieved. The Appellants have submitted that there is nointelligible differentia in the creation of classes, on their predicationthat Four Star and Five Star hotels form one homogenous class. It has beenargued that this Court in Surendra Das came to a finding that Four Star andFive Star hotels are in a different category than those with a lowerclassification; that the Tourism Department imposes an obligation on bothFour Star and Five Star hotels to have a bar; that the requirements forclassification as Four Star and Five Star are very similar. It has alsobeen submitted that no empirical evidence has been adduced by the State toshow that the degree of harm caused by Four Star and Heritage hotels isdifferent from that of a Five Star, thereby justifying the disparate anddifferential treatment between them. Reliance has been placed on thedecision on the Nine-judge bench in In Re: The Special Courts Bill, 1978which held that “all persons similarly circumstanced shall be treated alikeboth in privileges conferred and liabilities imposed. Equal laws would haveto be applied to all in the same situation, and there should be nodiscrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same.” Wehave already discussed this landmark exposition of Constitutional lawabove. It has also been argued that since the object of the policy pertainsto the situs of drinking, the State can distinguish between public andprivate places, but not between public places. Furthermore, the Explanationto Section 15C of the Abkari Act, in its clarification of what constitutesa public place, makes a class of all the public places listed therein.Hotels are thus included in the category of public places. In making anexception for only Five Star hotels, the Government is engaging in sub-sub-classification, which amounts to hostile discrimination. Additionally, theclass created under Section 15C was created by an Act, and cannot bealtered under a rule making power. The classification at hand is based onsocial and economic class, as there is a clear distinction between theexpense and resultantly the clientele of the hotels that have been allowedFL-3 licenses and those that have not. Therefore, a strict scrutiny testmust be applied, and the Government must be asked to provide a rigorous,detailed explanation in this classification. As was elucidated in AshokKumar Thakur v. Union of India (2011) 12 SCC 787, when discrimination isbased on class, it is more pernicious and needs careful judicial enquiry.18 The Appellants before us have also argued that the subjectcategorization has no reasonable nexus with the object sought to beachieved. Since the purpose is to achieve prohibition albeit in a staggeredand piecemeal process, this cannot be achieved while there are no limits onthe number of FL-1 shops or the number of Five Star Hotels. The intentionof the Government is facially financially driven, as while it is denying FL-3 licenses to hotels with Four Star and below classifications, it isimproving the infrastructure in FL-1 shops, all of which are State owned.The previous clientele of the hotels that lost their FL-3 licenses are nowfrequenting these shops.19 The Appellants have further contended that the policy suffers fromthe vice of arbitrariness, which is antithetical to equality. The One ManCommission Report and the Tax Secretary’s Report have not been taken intoconsideration, as is evident from the fact that the suggestions thereinhave not been incorporated and no explanation has been given for this. Merelip service was paid to the One Man Commission Report. As was held inReliance Airport Developers Pvt. Ltd. v. Airports Authority of India andOrs. (2006) 10 SCC 1, if a policy maker leaves out important factors, thisis a ground to contend unreasonableness. The failure to consider the OneMan Commission Report before passing the impugned policy also went againstthe instructions of this Court in Surendra Das. Thus the impugned policywas arbitrary, unreasoned and procedurally unsound. Furthermore, it wascontended that reissuance is a matter of right. At the time of applying fora license, the chance of reissuance is a consideration. The procedure for arenewal and for a fresh application are different. More significantly, theState, before this Court in Surendra Das, submitted that renewal is amatter of right, and it was held in B.Six Hotels that license holders havea vested right. Finally, it has been argued that the burden of proof is onthe person seeking to deviate from equality, i.e. the Respondent State,since a prima facie case of discrimination is made out.20 The Respondent, on the other hand, has contended that theclassification has been based on a reasonable differentia. In both B.SixHotels and Surendra Das, classification based on Star gradation has beenaccepted by this Court. This classification was not created by theRespondent State, but is a clear classification process with specificallylaid out requirements. In response to the arguments of the Appellants, itwas contended that in Surendra Das, the differentia or absence of it in thecase of Four Star and Five Star hotels was not in issue and therefore thisissue is at large. In fact, in the course of submissions in Surendra Das,the Respondent had made bold that it intended to prohibit the grant of FL-3licenses even to Four Star hotels. According to Khoday, the State cannotdiscriminate between people who are qualified to carry on trade in liquoronce it is allowed by the State. Since only Five Star hotels are qualified,the State would be at fault if it discriminated between different FiveStars hotels, and this would amount to a classification without reasonabledifferentia. However, the facts at hand are entirely different. Regardingthe argument that in light of Section 15C, the classification hereinamounts to sub-sub-classification, the Respondent has argued that theExplanation was a definition clause and merely listed the places that comeunder the umbrella of “public place”. It did not create a class in any way.21 It was contended that the policy did have a reasonable nexus with theobject sought to be achieved, as the object of the policy, as enshrined inSection 15C, was to reduce the public consumption of liquor. An exceptionwas made in the interest of tourism under Rule 13(3) in favour of Five Starhotels. By making liquor less easily and readily available for consumptionin public, and by making it prohibitively expensive, this object would nodoubt be achieved. Additionally, the sections of society who wereparticularly at risk, such as the youth, would practically be compelled toabstain from public consumption of alcohol. The argument that liquor isstill available for consumption in private was, it was argued, irrelevant,but nonetheless it was submitted that the State has reduced the number ofFL-1 shops by over 10 per cent in the past year.22 The Respondent contended that the policy is not arbitrary. The reasonfor refusing to grant FL-3 licenses to Four Star hotels is the fear thatall the Three Star establishments in the State will try to get upgraded toFour Stars. Furthermore, all relevant documents were taken intoconsideration. There was no obligation on the State to accept thesubmissions of the One Man Commission or the Tax Secretary. It simply hadto take their reports into consideration, which it did. This is evidencedby the fact that a number of the suggestions in the One Man Commission wereimplemented. The contention that renewal is matter of right was rejected.It was argued that it is, in fact, a privilege, since there can be nolegitimate expectation in the business of liquor, which is res extracommercium. It was argued that the footprint of Article 14 would benarrower because of the pernicious nature of the activity than it wouldhave been for a legitimate trade. Finally, it was submitted thatconstitutionality is presumed, so the burden of proof is on the personalleging that their rights under Article 14 have been violated.23 The next ground for challenge has been under Article 19. LearnedSenior Counsel for the Appellants, Mr. Aryaman Sundaram, has sought toargue that a right under Article 19(1)(g) exists in the business of liquor.In his detailed elucidation of the decision in Khoday, he has contendedthat the State is given three options. The first is prohibition, the secondis a State monopoly in manufacture or trade or both in potable liquor, andthe third, which is similar to the case at hand, is that the State allowsprivate individuals into this business, in which event everyone would havea right to partake in it. Reliance was placed on the following paragraphsof Khoday:55. The contention that if a citizen has no fundamental right to carry ontrade or business in potable liquor, the State is also injuncted fromcarrying on such trade, particularly in view of the provisions of Article47, though apparently attractive, is fallacious. The State’s power toregulate and to restrict the business in potable liquor impliedly includesthe power to carry on such trade to the exclusion of others. Prohibition isnot the only way to restrict and regulate the consumption of intoxicatingliquor. The abuse of drinking intoxicants can be prevented also by limitingand controlling its production, supply and consumption. The State can do soalso by creating in itself the monopoly of the production and supply of theliquor. When the State does so, it does not carry on business in illegalproducts. It carries on business in products which are not declared illegalby completely prohibiting their production but in products the manufacture,possession and supply of which is regulated in the interests of the health,morals and welfare of the people. It does so also in the interests of thegeneral public under Article19(6) of the Constitution.56. The contention further that till prohibition is introduced, a citizenhas a fundamental right to carry on trade or business in potable liquor hasalso no merit. All that the citizen can claim in such a situation is anequal right to carry on trade or business in potable liquor as against theother citizens. He cannot claim equal right to carry on the businessagainst the State when the State reserves to itself the exclusive right tocarry on such trade or business. When the State neither prohibits normonopolises the said business, the citizens cannot be discriminated againstwhile granting licenses to carry on such business. But the said equal rightcannot be elevated to the status of a fundamental right.Khoday also held that all rights under Article 19(1) of the Constitutionare not absolute, as they are qualified by the respective clauses (2) to(6) of Article 19. Business in liquor is further regulated by the rigoursof Article 47. However, the categorization of dealing in liquor as a“qualified fundamental right” cannot be interpreted to indicate that aright under Article 19(1)(g) does not arise. This is in line with theprevious Five-Judge bench decision in Krishan Kumar Narula, which, as wepreviously discussed, returned the opinion that a citizen can have a rightto deal in liquor, subject to reasonable restrictions in the publicinterest. Thus since Five Star hotels are given a right to deal in liquor,all other categories of hotels can claim on the grounds of Article19(1)(g), subject to the reasonable restrictions allowed by Article 19(6).It has been contended that the restrictions imposed herein are notreasonable, for various reasons, including that the relevant material hasnot been considered so the restriction was arbitrary and unreasoned. TheDivision Bench, while overturning the finding of the Single Judge that therelevant materials were not considered, held that “we cannot assume thatthe Government did not consider the report at all.” The Appellants contendthat an assumption that the materials were considered merely becausenothing on the record definitively says that they were not is erroneous.24 We disagree with the submissions of the Respondents that there is noright to trade in liquor because it is res extra commercium. Theinterpretation of Khoday put forward by Mr. Sundaram is, in our opinion,more acceptable. A right under Article 19(1)(g) to trade in liquor doesexist provided the State permits any person to undertake this business. Itis further qualified by Article 19(6) and Article 47. The question, then,is whether the restrictions imposed on the Appellants are reasonable.25 We have had the privilege and indeed the pleasure hearing theextremely erudite arguments of a galaxy of senior counsel on bothpropositions on the interpretation of our Constitution and the lawspertaining to the right to carry on trade or business in potable liquor bythis Court. In Krishan Kumar Narula, the Constitution Bench was of theopinion that dealing in liquor is a legitimate business, although the Statecan impose reasonable restrictions. A few years later, however, in Khoday,the concept of res extra commercium came to be accepted and applied to thebusiness of manufacture and trade in potable liquor. This Court, however,did not place any embargo or constraints on the State to transact thisbusiness. History has painstakingly made it abundantly clear thatprohibition has not succeeded. Therefore strict state regulation isimperative. The State of Kerala had in the past forayed into prohibition,but found it to be unimplementable. Thereafter, keeping in mind the heavyconsumption of alcohol within the territory, it has experimented with othermeasures to user temperance if not abstemiousness. So far as this tradeis concerned, Article 47 of the Constitution places a responsibility onevery State Government to at least contain if not curtail consumption ofalcohol. The impugned Policy, therefore, is to be encouraged and iscertainly not to be struck down or discouraged by the Courts. How thispolicy is to be implemented, modified, adapted or restructured is theprovince of the State Government and not of the Judiciary. Theconsumption of tobacco as well as liquor is now undeniably deleterious tothe health of humankind. Advertising either of these intoxicants has beenbanned in most parts of the world, the avowed purpose being to insulatepersons who may not have partaken of this habit from being seduced tostart. Banning pubic consumption of either of these inebriants cannot beconstrained as not being connected in any manner with the effort to controlconsumption of tobacco, or as we are presently concerned, with alcohol.Vulnerable persons, either because of age or proclivity towardsintoxication or as a feature of peer pressure, more often than not, succumbto this temptation. Banning public consumption of alcohol, therefore, inour considered opinion, cannot but be seen as a positive step towardsbringing down the consumption of alcohol, or as preparatory to prohibition.26 A concerted effort has been made before us, as has been done severaltimes before in this Court, to assail and attack the impugned State policyon the anvil of Article 14 of the Constitution. To meet the tests of thisArticle, i.e. the right to equality, there has to be intelligibledifferentia in the classification or the categorisation that has beencarved out either by the Legislation or by the State policy has to bediscernable. So far as the State of Kerala is concerned, steadyprogression in this regard is perceptible inasmuch as it had started byplacing a ban on the consumption of alcohol firstly on un-starred hotels,followed by Two Star hotels, which received the unqualified imprimatur ofthis Court in B.Six Hotels. Encouraged and emboldened by this decision,the Government thereafter placed a ban on Three Stars hotels, which wasagain assailed in Court on the predication that a ban exempting Four Star,Five Star and Heritage hotels created a hostile and unfair discrimination.There was another element in this litigation, namely that those who hadreceived licences were found to possess vested rights towards theirrenewal. There was also a challenge to the distance criteria prescribed bythe State. All these grounds of assailment did not find favour yet againwith the Co-ordinate Bench in Surendra Das. We are not impressed by theargument that this Court had reached a specific finding to the effect thatFour Star and Five Star hotels formed a homogeneous class which brooked nofurther segregation therein. That was not an issue which fell to bedecided in Surendra Das. An observation made in passing or obiter haspersuasive value but is not binding on us. We appreciate that even at thisstage it has been clarified on behalf of the State of Kerala that theyintend to prohibit public consumption of alcohol even in Four Star andHeritage hotels. We cannot also lose sight of the fact that it is not theState which has imposed the classification of Star gradation of hotels.This is done by the Ministry of Tourism, which in turn is further guided bythe criteria established in the hospitality trade. Placing a moratoriumon all hotels other than Five Star hotels, therefore, is not a violation ofArticle 14 of the Constitution. The argument on behalf of the Appellantspertaining to impermissibility of sub-classification on the grounds thatSection 15C of the Abkari Act creates a composite class of public places isnot acceptable to us. The Explanation to this Section endeavours toinclude through iteration all public places. Its intent and purport is notto exclude some places; it cannot be read as a comprehensive definition; itis more of an illustration. At this juncture, it is nobody’s case that somehotels ought to have been granted Five Star grade or that the State hasprohibited anyone from endeavouring to upgrade their hotels from Four Starto Five Star. We have already noted that the least amount of sale ofalcohol (0.08 per cent) occurs in Five Star hotels, which sale indubitablyincludes guest orders in room-service. We cannot therefore detect anyarbitrariness or capriciousness either in the classification, nay theunique treatment given by the State to hotels possessing Five Star rating. The immediately succeeding question that arises is whether thisclassification has a reasonable nexus to the object sought to be achievedby the policy. In this regard, there can be no gainsaying that theprices/tariff of alcohol in Five Star hotels is usually prohibitively high,which acts as a deterrent to individuals going in for binge or even casualdrinking. There is also little scope for cavil that the guests in FiveStar hotels are of a mature age; they do not visit these hotels with thesole purpose of consuming alcohol. Learned Senior Counsel for the StateMr. Sibal has taken us at great length through the One Man CommissionReport to establish that the State duly considered the recommendationstherein and incorporated a number of them. It is trite that since theobligation on the State was to consider the Report, not to incorporate itin its entirety, no legal requirement has been transgressed. We agree withthese submissions. The policy cannot, therefore, be written off asarbitrary or procedurally unsound.27 We now move to the arguments predicated on Article 19 of theConstitution. We have already noted that the business in potable liquor isin the nature of res extra commercium and would therefore be subject tomore stringent restrictions than any other trade or business. Thus whilethe ground of Article 19(1)(g) can be raised, in light of the argumentsdiscussed with regard to Article 14, it cannot be said that thequalification on that right is unreasonable.28 We have already expressed our view that it is not the State thatmakes classification of Star Rating so far as hotels are concerned. Thisis intrinsically modulated by the Tourism Industry and not by the StateGovernment. It seems to us that the impugned policy of eradicatingconsumption of alcohol in public applies to all stakeholders withoutexception. However, thereafter a relaxation or exception, in the interestof tourism, has been forged in favour of Five Star hotels alone so far asthe drive against public consumption of liquor is concerned. In otherwords, were it not for considerations of tourism, this exception in favourof Five Star Hotels may have been struck down. As already noted, Courtsshould be chary from interfering in policy matters, by infusing or imposingits assessment of the policy. The Court may well opine that there is closesimilarity between Five Star and Four Star and Heritage Hotels with regardto foreign clientele; but that segregation or selection is the preserve ofthe State Government. This is altogether different from viewing theposition from the stand point of creating a classification in favour ofFive Star hotels. The State can draw support from Rule 13(3) whichpostulates that special measures for the promotion of tourism can beordained by the State. We cannot subscribe to the view that this Ruleviolates Section 15C of the Abkari Act.29 We also note what is certainly a strong criticism to the State policyon alcohol, namely, that FL-1 sales are a State monopoly and result inalmost 80 per cent of the sales in the State of Kerala. The State hasasserted that in keeping with its objective of bringing down alcohol saleit has devised and implemented a 10 per cent cut in the number of FL shops. This assertion of the State has been contested on the grounds that thesales have not reduced as a result, but we find no reason to disagree ordoubt the bona fides of the State. The Court cannot be blind to the factthat a social stigma at least as far as the family unit is concerned stillattaches to the consumption of alcohol. Free trade in alcohol denudesfamily resources and reserves and leaves women and children as its mostvulnerable victims. Purchasing alcohol from a FL-1 shop would entailconsuming it under the reproachful gaze of the dependants, especially thefemale members of the family. This is certainly a discouragement toregular and excessive consumption of alcohol. We must accept that that thepossibility exists that rooms may be rented in Three and Four Star hotels,where alcohol can be brought from FL-1 shops and then consumed. However,this does not constitute public consumption, and therefore is not fatal tothe besieged State’s policy. We must not lose sight of the fact that thechallenge to this policy in respect of Three Star hotels and below has beenrepulsed by this Court and we see no reason to depart from the pathtraversed by this Court in B.Six Hotels and thereafter in Surendra Das.30 There has been abundance of litigation on the question of the Courts’interference in State policy. Judicial review is justified only if thepolicy is arbitrary, unfair or violative of fundamental rights. Courtsmust be loathe to venture into an evaluation of State policy. It must begiven a reasonable time to pan out. If a policy proves to be unwise,oppressive or mindless, the electorate has been quick to make theGovernment aware of its folly. As was recently held by a Three-judge benchof this Court in Census Commissioner v. R. Krishnamurthy (2015) 2 SCC 796:From the aforesaid pronouncement of law, it is clear as noon day that it isnot within the domain of the courts to embark upon an enquiry as to whethera particular public policy is wise and acceptable or whether abetter policy could be evolved. The court can only interfere if the policyframed is absolutely capricious or not informed by reasons or totallyarbitrary and founded ipse dixit offending the basic requirement ofArticle 14 of the Constitution. In certain matters, as often said, therecan be opinions and opinions but the Court is not expected to sit as anappellate authority on an opinion.We find no illegality or irrationality with the intention of the State toclamp down on public consumption of alcohol. The One Man Commission Reporthas been considered, so the policy does not suffer from the vice ofarbitrariness. In these circumstances, it is not for the Appellants toargue or for us to hold that the goal of prohibition would be more likelyto be met by reducing the number of FL-1 shops or by introducing any othermeasure. As was held in Balco Employees' Union (Regd.) v. Union of Indiaand Ors. (2002) 2 SCC 333, in a democracy, it is the prerogative of theelected Government to implement and follow its own policy, even if thisadversely affects some vested interests, and the Court may not strike downa policy “at the behest of a Petitioner merely because it has been urgedthat a different policy would have been fairer or wiser or more scientificor more logical.”31 Nonetheless, we must express our distress at the allegations made,not without some substance, that Five Star hotels have opened out some oftheir premises for consumption of liquor not only at depressed rates butalso in surroundings which are not commensurate to their Five Star ratings. This may be a good and sufficient reason to denude these Hotels of theirFive Star gradation. Such malpractice will have to be immediately erased bythe State, as its failure to do so it will only invite further litigationon the grounds that the policy to prohibit public consumption of alcohol isonly cosmetic and partisan. As in the case of Five Star hotels violatingthe ambiance which they portray by enabling drinking in specially createdbars at lower prices, the unregulated permission to consume beer and winethroughout the State by freely granting FL-11 licenses also is extremelydifficult to appreciate. This is particularly problematic in light of thefinding of the One Man Commission that beer is the preferred drink amongthe youth. The argument of the Respondent State is that allowing publicconsumption of liquor of a lower alcohol content is acceptable as suchliquor is less likely to lead to intoxication or addiction and less harmfulto the health of the consumer. This assessment may be misplaced. If thesale of beer and wine as a consequence of grant of FL-11 licenses disclosesan increase or if there is a trend towards serving beer of a higher alcoholcontent, the State will have to review its stand, failing which it wouldinexorably invite further litigation. This curial warning also applies toany laxity in policing or ensuring that no person below the permissible ageis allowed to consume alcohol in public. Additionally, we must note thatthousands of workers at bars that lost their FL-3 licenses have beenrendered unemployed as a result of the impugned policy, leading to over adozen suicides. The State has imposed a 5 per cent cess on liquor sold inFL-1 shops for the purpose of rehabilitation of these workers. However, ithas been argued before us that the amount mobalised by this cess is notbeing properly implemented. If this is indeed the case, the High Court maybe approached to address this grievance. It does not affect the legalityof the policy impugned before us, but there is no doubt that these workersdo have a right to be rehabilitated. The State may be sanguine in itsassessment of the success of the impugned policy, but it must be given achance to combat the rise in alcohol.32 In this analysis we are unable to find reason or justification inaccepting these Appeals. The impugned Judgment is founded on the strengthof previous decisions of this Court. As we have already recorded, we hadthe great pleasure of hearing extremely erudite arguments from the learnedSenior Advocates for the Appellants. The Appeals are dismissed and theimpugned Judgment is upheld. The parties shall bear their respectivecosts. …………………………J [VIKRAMAJIT SEN] …………………………J [SHIVA KIRTI SINGH]New Delhi;December 29, 2015.

Original author: Mohit Singh