Liquor licence classification upheld for Five Star hotels under reasonable restriction and non-arbitrariness principles.

Restricting FL-3 bar licences to Five Star hotels was upheld because the classification had an intelligible differentia and a rational nexus with reducing alcohol consumption and protecting public health. The business of liquor, though regulated under the State's temperance power, was held to attract Article 19(1)(g) where private participation is permitted, but the restriction was a reasonable regulatory measure under Article 19(6). The policy and amended Rule 13(3) were also sustained as non-arbitrary and not inconsistent with Section 15C of the Abkari Act, since the State had considered relevant materials and could create a narrower tourism-linked exception.

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Issues: (i) Whether restricting FL-3 bar licences to Five Star hotels and excluding Four Star, Heritage and lower-category hotels offends Article 14; (ii) whether the impugned restriction unreasonably curtails the freedom to carry on business under Article 19(1)(g) read with Article 19(6); (iii) whether the policy and the amended Rule 13(3) are invalid for being arbitrary, unsupported by relevant material, or inconsistent with Section 15C of the Abkari Act.

Issue (i): Whether restricting FL-3 bar licences to Five Star hotels and excluding Four Star, Heritage and lower-category hotels offends Article 14.

Analysis: The classification was tested on the touchstone of reasonable classification, requiring an intelligible differentia with a rational nexus to the object of reducing public consumption of alcohol. Star gradation was treated as a legally relevant and externally determined classification, not one created by the State for the purpose of the policy. The Court held that the State could validly carve out a tourism-based exception for Five Star hotels while applying a general prohibition on public consumption elsewhere.

Conclusion: The restriction does not violate Article 14.

Issue (ii): Whether the impugned restriction unreasonably curtails the freedom to carry on business under Article 19(1)(g) read with Article 19(6).

Analysis: The business of liquor, though heavily regulated and subject to the State's power under Article 47, was held to attract the protection of Article 19(1)(g) where the State permits private participation. That right, however, remains subject to reasonable restrictions under Article 19(6). In the context of a policy aimed at curbing alcohol consumption and protecting public health, the restriction to Five Star hotels was treated as a permissible regulatory measure rather than an unreasonable deprivation of the right.

Conclusion: The restriction is a reasonable one and is not invalid under Article 19.

Issue (iii): Whether the policy and the amended Rule 13(3) are invalid for being arbitrary, unsupported by relevant material, or inconsistent with Section 15C of the Abkari Act.

Analysis: The Court accepted that the State had considered the relevant reports and materials and was not bound to accept them in full. Section 15C was read as prohibiting consumption in public places subject to a limited tourism-linked exception under Rule 13(3), not as disabling the State from creating a narrower exception for Five Star hotels. The policy was treated as part of a gradual anti-liquor strategy and not as arbitrary or procedurally unsound.

Conclusion: The policy and Rule 13(3) are valid and are not inconsistent with Section 15C.

Final Conclusion: The State's policy restricting FL-3 licences to Five Star hotels was upheld as a valid regulatory measure in furtherance of public health and temperance, and the challenge to the exclusion of other hotel categories failed.

Ratio Decidendi: Where the State permits private trade in liquor, it may impose reasonable, policy-based restrictions supported by intelligible differentia and a rational nexus to public health and public interest, and courts will not strike down such regulation absent arbitrariness or constitutional infirmity.

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