United Breweries Limited Vs State of Kerala (Kerala High Court)
The Kerala High Court considered a batch of writ petitions filed by breweries, distilleries, hotels, resorts, a partnership firm and a limited liability partnership challenging penalties imposed by the Excise Commissioner under Sections 67(1) and (2) of the Abkari Act for alleged reconstitution of Boards of Directors, partnerships or related arrangements without prior permission. The petitioners included United Breweries Limited, which had been subjected to a penalty of Rs.30 lakhs for alleged reconstitution of its Board of Directors without prior permission.
The petitioners manufacturing beer or liquor contended that they were licensed under the Brewery Rules, 1967 or the Kerala Distillery and Warehouse Rules, 1968, neither of which required prior permission for changes in the Board of Directors. They further submitted that a change in Directors did not alter the Memorandum of Association or Articles of Association and did not amount to alteration or modification of the “deed” contemplated by Section 67(2) of the Abkari Act. The hotel and resort petitioners similarly contended that there was no change in ownership and therefore the jurisdictional fact required for imposing the penalty was absent.
The State submitted that Section 67(2) applied to all licence holders and that “deed” could include documents or arrangements on the strength of which a licence was granted. It contended that reconstitution of partnerships or Boards of Directors could attract the provision and relied upon Rule 19 of the Foreign Liquor Rules and judicial precedents.
