Kerala High Court backs govt’s bar ban; top-end hotels can continue to serve liquor

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The single bench of Justice Surendra Mohan was hearing 80-odd petitions of bar hotel owners challenging the new liquor policy of the Congress government. The bar hotel owners had argued that there was discrimination in the government policy mainly on two grounds; that five-star hotels were allowed to function and the government was still continuing with the retail business of liquor through Kerala State Beverages Corporation. Around 80 per cent of the liquor business in Kerala is handled by the Corporation.

Citing a Supreme Court verdict of 2012, the high court said there was discrimination in preventing liquor license to four star hotels. It said the four and five star hotels should be considered equally while granting liquor licence. The court also evoked the Article 14 of the Constitution (equality before the law) while referring to the discrimination in denying liquor licence to four star hotels.

The verdict has not put any deadline for closure of the now functioning hotels, except 62 bars (four, five and heritage categories).

Congress state president V M Sudheeran and Chief Minister Oommen Chandy welcomed the high court verdict. But aggrieved owners of two and three category bars said they would appeal against the verdict as a major chunk of the bar business is handled in these two categories.

It was on August 21 that the Congress-led United Democratic Front announced its new liquor policy which had closure of all bar hotels, except those in five-start category and bring down retail outlets in every year in a manner to go for total prohibition in next one decade.

Already 418 bars, many of them below three-star category, have been remained closed since April this year following a Supreme Court directive to decide on renewing the licenses of hotels identified as sub-standard years back. As the general elections were round the corner, the Congress government delayed the decision.

Later, the issue emerged as a matter of discord between Chief Minister Oommen Chandy and party state chief V M Sudheeran, who was against reopening of the bar. Chandy wanted to take a pragmatic approach – allow quality hotels to run bars. Sudheeran alleged that a section in the government was acting for the liquor lobby. As charges and counter-charges for one-upmanship were traded, Chandy unexpectedly took the decision to close down all bar hotels in Kerala and go for total prohibition in next one decade.

Accordingly, the government fixed September 12 as the deadline for the closure of 312 bars functioning in the non-five star category. But, the bar hotel owners approached the Supreme Court, which asked the Kerala High Court to consider the petitions and decide before September 30. However, the court could not meet the deadline of September 30 and in effect the 312 bars got an extended life.

Since October 2, the government had declared Sundays as dry days apart from closing down 39 retail outlets, 10 per cent of the total retail outlets, in tune with its new policy to close down all outlets within a decade.

Various quarters have already raised concern over whether the closure of bars would bring down the sale of foreign liquor in Kerala. While hearing the bar hotel owners, the State Beverages Corporation had submitted an affidavit saying the sale of Indian made foreign liquor and beer have recorded robust growth even after the closure of 418 bar hotels.

As per the statistics furnished in the high court, the income of Beverages Corporation has increased by Rs 517 crore in the period from April to August this year, which has been marked by the closure of 418 bars out of 750-odd ones. From April to August in last year, the corporation had registered a sale of Rs 2720 crore, whereas in the corresponding period in this year, the business has gone up to Rs 3237 crore.

Also the sale of liquor in now functioning 312 bars has also increased. If the sale of liquor in these bars was of Rs 221 crore from April to August last year, the figure has gone up to Rs 403 crore. The sale of beer in the bars in the first five months of last year was Rs 47 crore. This has increased to Rs 87 crore in the corresponding period this year.