"Mind-numbing insensitivity:" Bombay High Court junks plea by hotels seeking concession on liquor license fees claiming to be 'victims' of COVID

The Bombay High Court on Tuesday dismissed petitions by individuals hotels and restaurants, and associations representing such establishments seeking concessions on license renewal fees for vending foreign liquor [HRAI v Commissioner, State Excise & Ors].A bench of Justices GS Patel and Madhav J Jamdar said that the argument by the petitioners that they were also victims of COVID-19 since their businesses had suffered, was thoroughly irresponsible and amounted to mind-numbing insensitivity."We find it a submission of mind-numbing insensitivity for these 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 — let alone fundamental — right established to have a FL-III license at all. It is not compulsory. There is certainly no legal or enforceable right to have a FL-III license on terms dictated by the licensee," the Court said. It, therefore, proceeded to impose costs of ₹1 lakh on nine petitioner-associations to be paid into the Chief Minister's relief fund..The petitioners had challenged the State government's January 2021 announcement modifying the licensing fees for the years 2021-2022 and restoring it to the fees levied during pre-COVID period. The petitioners had contended that they were allowed to operate only at 50 percent capacity during the relevant period due to pandemic and had, therefore, sought reduction in fees. .The Court opined that pandemic cannot be a ground to seek such reduction since the same was not the fault of the government.“The pandemic was not the fault of the government either. The government had a mammoth responsibility, far beyond the narrow commercial concerns of the Petitioners and their foreign liquor vending business. The Government was struggling with essential services and commodities; a class that emphatically excludes the Petitioners — even if the name of one of its vendible products is from the Gaelic translation of a Latin phrase for ‘water of life’. The needs of the many will always outweigh the needs of the few,” the Court said..Arguments by parties.The petitioners were unwilling to pay the license renewal fees prescribed by the State Government. They had paid 50% of the revised fees for 2021–2022 and were unwilling to pay more as they were allowed to operate only at 50% capacity. They also prayed that those who had paid 100% for the previous year should be allowed to ‘adjust’ 50% for the 2021-2022 period..Senior Advocate Virag Tulzapurkar, for the petitioners, opposed the notification on various grounds. Firstly, he submitted that no reasons were disclosed for changing of the license fees. He stated that Rule 2 of the Periodicity Rules requires that if there is change (decrease or increase) of more than 10% from the previous year’s fees, the changed rates can only be notified after a prior direction from the State Government but there was no such direction.He further contended that the State government wrongfully refused to extend the payment deadline or to grant installment payment facilities and also failed to consider the impact that the Covid-19 pandemic restrictions had on the petitioners and their businesses. Therefore, he submitted that the notification was unreasonable, irrational, arbitrary and liable to be struck down.Tulzapurkar also argued that the Bombay Prohibition Act, 1949 entitles the petitioners to a refund in cases where the license is cancelled by the granting authority for reasons which are not the licensee’s fault or due to a breach on the part of the licensee.He further drew the court’s attention the Disaster Management Act, submitting that Section 38 of the same casts a duty upon the State to mitigate losses and also to provide rehabilitation to victims of such disasters. The foreign-liquor vending hotels are, he claimed, were ‘victims’ of the ‘Covid-19 disaster’ and they are entitled to be ‘rehabilitated’..Advocate General Ashutosh Kumbhakoni submitted that the State government had already bent over backwards to grant concessions to foreign liquor licensees to ameliorate the losses caused by the pandemic.He informed the court that for 2020-2021, the government had allowed the license fee to be paid in three installments and had even allowed a 15 percent concession to those who paid the full fee before April 30, 2020. The government had later even reduced the payable fees by 50 percent.He submitted that the notification does not increase the license fee ‘by even a paisa’ when compared to fees prescribed in 2019-20. He stated that the fees for the year 2020-21 were reduced on account of the pandemic.He therefore argued that the petitioners cannot have it both ways: demand a reduction (and would complain if there is none) and then take the reduction given as a baseline to protest a reversion to the pre-Covid lockdown levels. According to him, the comparison has to be of the rates between 2021–2022 and 2019–2020 and those rates are exactly the same. The intervening periods, he stated, saw a reduction as a one-off concession precisely to mitigate business losses — the very demand the petitioners made..Judgment.The Court found the petitions to be ‘worthless from start to finish’ and ‘thoroughly irresponsible’.“There is certainly no legal or enforceable right to have a FL-III license on terms dictated by the licensee. We do not believe the pandemic can be cited time and again by businessmen to get extraordinary concessions. The pandemic affected everyone. All businesses suffered. 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 Court said..We find it a submission of mind-numbing insensitivity for these foreign liquor vending hotels to put themselves on the same level as the true victims of the Covid-19 pandemic.Bombay High Court .The Court also found a fatal flaw in Tulzapurkar’s argument that whenever there is a curtailment of his clients’ liquor-vending business hours, his clients are entitled to compensation, irrespective of the conditions and circumstances in which those hours were curtailed.“It assumes that there were lines of people waiting to be served foreign liquor by the petitioners and their ilk, but the government restricted the petitioners from going about their business. It hardly needs to be pointed that this is the stuff of fantasy”, it pointed out..The petitions were found to have no merit and the Court expressed its displeasure at the manner in which they were pressed.“There are hundreds of petitions by individuals, societies and so on pending. They have waited their turn. Their cases are now delayed by this self-indulgent and self-serving foreign liquor vending hotels, in whose petition there is not a shred of merit, and some of whose contentions border on the outrageous. Relevant material has been suppressed from the Petition, including the various concessions granted by the State Government and the fact of the number of similarly placed licensees who have paid,“ it bemoaned.It therefore, rejected the petition and further sent a firm signal that the time of the court should not be taken for granted, nor should there be any attempt to gamble on litigation.“When a court’s time is squandered on frivolous matters, there will be consequences”, it said proceeding to impose costs on the petitioner-associations.[Read Judgment]

"Mind-numbing insensitivity:" Bombay High Court junks plea by hotels seeking concession on liquor license fees claiming to be 'victims' of COVID

Satyendra Wankhade

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