2015 (10) TMI 2278 - HC - Indian Laws

Court deems FL-3 license granted if not processed timely; upholds legal fiction.

Joys Enterprises Private Limited Versus The Commissioner of Excise And Others

The court interpreted Section 447(6) of the Kerala Municipality Act, ruling that the failure to consider the petitioner's application for an FL-3 license ... Cancellation of FL-3 License - Abkari Policy - Held that:- In the facts and circumstances, essentially going by the ratio laid down by this Court in [2015 (10) TMI 2146 - KERALA HIGH COURT], I declare that the petitioner, for all practical purposes, is deemed to have had a 'No-objection Certificate' from the third respondent. Once this legal fiction is treated as a fact, all the consequences that flow in its wake shall enure to the benefit of the applicant. It is, therefore, essential for the first respondent to consider the petitioner's application as soon as it is represented for the purpose of granting an FL-3 licence. It is, thus, declared that the petitioner has the 'No-Objection Certificate', as the third respondent has failed to consider the petitioner's application within thirty days. - first respondent shall consider the petitioner's application as expeditiously as possible, at any rate, within one month from the date of its re-presentation and pass appropriate orders thereon as regards granting FL-3 licence, subject, of course, to the petitioner's fulfilling all other statutory formalities. - Petition disposed of. Issues:1. Interpretation of Section 447(6) of the Kerala Municipality Act regarding the granting of a No-Objection Certificate for an FL-3 licence.2. Consideration of the petitioner's application for an FL-3 licence based on the legal fiction of having a No-Objection Certificate.3. The impact of the expiry of the present Council's term on the issuance of a No-Objection Certificate.Analysis:Issue 1: Interpretation of Section 447(6) of the Kerala Municipality ActThe petitioner, a three-star hotel, had its FL-3 licence replaced with an FL-11 licence due to a change in abkari policy. Subsequently, upon upgrading to a five-star classification, the petitioner sought to revert to an FL-3 licence. The petitioner contended that as per Section 447(6) of the Act, the failure of the third respondent Corporation to consider their application within thirty days should result in the deemed granting of a No-Objection Certificate. The court referred to a previous judgment emphasizing the deeming provision under the statute, which necessitates granting the benefit to the applicant once the stipulated time lapses.Issue 2: Consideration of the petitioner's application based on legal fictionThe petitioner argued that the failure of the third respondent Corporation to act on their application within the statutory period should be construed as the automatic grant of a No-Objection Certificate. The court upheld this argument, declaring that the petitioner is deemed to possess the required certificate. Consequently, the first respondent was directed to process the petitioner's application for the FL-3 licence promptly upon its re-submission, subject to fulfilling other legal obligations.Issue 3: Impact of the Council's term expiry on the No-Objection CertificateThe standing counsel for the third respondent Corporation raised concerns about the impending end of the Council's tenure affecting the decision on issuing the No-Objection Certificate. However, the court dismissed this argument, emphasizing that the Council retains its authority until the end of its term and should have acted within the prescribed timeframe. The court's decision to deem the petitioner as having the necessary certificate nullified the need for further discussion on the sustainability of the rejection directive issued to the petitioner.In conclusion, the court's judgment clarified the statutory obligations regarding the issuance of a No-Objection Certificate for an FL-3 licence, upheld the legal fiction benefiting the petitioner, and directed expedited processing of the petitioner's application by the first respondent.