The Kerala Bar Hotels Association & Anr. v. State of Kerala & Ors.
Background
Kerala's Abkari Policy 2014-15 allowed bar licences (FL-3) only for five-star hotels and cancelled the licences of most other bar hotels. Two-star, three-star, four-star, heritage and unclassified hotels challenged the policy. A single judge of the Kerala High Court struck down the exclusion of four-star and heritage hotels, but a Division Bench reversed that decision, and the hotels appealed to the Supreme Court.
Decision Breakdown
The Supreme Court dismissed the appeals and upheld the High Court's judgment. It held that a business in liquor is not a fundamental right in itself, but once the State allows private businesses to sell liquor, the right to do so exists and is subject to reasonable restrictions in public interest. It held that the star classification is set by the Ministry of Tourism, that restricting bar licences to five-star hotels is a rational classification tied to the policy's public health goal of reducing public drinking, and that the government had considered the One Man Commission report. The Court said it would not judge whether the policy was wise, and it also warned the State about misuse by some five-star hotels and about the rise in beer and wine licences, and urged rehabilitation of job losers.
Lesson Learnt
Courts review government policy only for arbitrariness, unfairness or violation of rights, and generally will not replace the government's judgment on whether a policy is wise. A policy affecting businesses and workers can still be upheld when it has rational reasons and a classification that serves its stated purpose.