As a bleak year drew to a close, the Supreme Court delivered another distinctly underwhelming judgment, in The Kerala Bar Hotels Association & Anr. v. State of Kerala & Ors.
This judgment is disappointing not so much for its outcome, but mainly because of a glaring omission.
This case was about whether the State of Kerala’s statutory amendment restricting the grant of bar licences, that allow the sale of Indian Made Foreign Liquor to the public, to five star hotels alone was constitutional.
Many may feel that in upholding this measure, the court has justifiably approved the State government’s legitimate attempt to curb alcoholism, which has statistically been shown to be an “acute social problem”.
The most important issue, however, is unrelated to the legitimacy of the government’s ultimate objective, or whether there is a right to trade in liquor (which the court dwells on at length). The key question relates to the exception that has been made in favour of (20 or so) five star hotels in the State, and, consequently, those who can access such hotels, and whether this amounts to discrimination based on wealth and social class, violating the right to equality guaranteed by Article 14 of the Constitution.
In fact, this issue was specifically raised, and is recorded in Paragraph 17 of the judgment:
The classification at hand is based on social and economic class, as there is a clear distinction between the expense and resultantly the clientele of the hotels that have been allowed FL-3 licenses and those that have not. Therefore, a strict scrutiny test must be applied, and the Government must be asked to provide a rigorous, detailed explanation in this classification… [W]hen discrimination is based on class, it is more pernicious and needs careful judicial enquiry.”
Unfortunately, this argument is not dealt with at all. Instead, the Court quickly accepted the explanation that this exception was directed at encouraging tourism. This omission represents a lost opportunity for the Supreme Court to re-examine fundamental questions about equality and discrimination.
Pernicious discrimination
Most fundamentally, the court should have entered into whether certain classifications are inherently suspect, justifying closer scrutiny compared to other more benign cases of differentiation.
We believe that this analysis, on discrimination based on social class, should have gone something like the following:
- Given that both the Preamble and Article 38(2), have woven equality of status into the Constitution, there is a constitutional justification for treating discrimination based on status and social class as a “suspect classification”, warranting a higher degree of scrutiny, as opposed to cases where an underlying constitutional norm is not violated.
- Further, the court ought to have looked at the additional question of whether the poor in India constitute what Tarunabh Khaitan calls a “vulnerable group”. In our opinion, poverty is about more that the lack of money or assets. It is characterised by a lack of social membership, meaningful citizenship, and dignity. Such a structural conception of poverty helps explain why the poor, as a separate class – independent of their caste or religious identities – are marginalised actors with little influence in the political process, deserving of judicial protection by means of a more rigorous standard of scrutiny.
- Had it been scrutinised strictly, we believe the Kerala amendment ought to have been struck down. This is because even a universal ban on public drinking would have been a more even-handed and narrowly tailored approach to the State’s objective of reducing alcoholism, since alcoholism afflicts rich and poor alike.
We must remember here that the Kerala amendment is about more than the price of alcohol. It is fundamentally different from a law raising the maximum retail price of liquor, or imposing a tax on liquor across the board. What makes the Kerala amendment “pernicious” is that it singles out only those with the means to purchase liquor in a five star hotel, as also the status to enter and access such a hotel, thereby giving them the exclusive privilege of drinking in public. At the same time, poorer sections of the population, who do not have the status to access such elite establishments (let alone afford the prices), are deprived of this privilege. Surely, the rich are not immune to alcoholism? However, this is almost exactly what the Court seems to suggest, when it says:
“There is also little scope for cavil [sic] that the guests in Five Star hotels are of a mature age; they do not visit these hotels with the sole purpose of consuming alcohol.”
The Supreme Court has, previously, in the Maharashtra dance-bars case, frowned on such logic, stating:
“Our judicial conscience would not permit us to presume that the class to which an individual or the audience belongs brings with him as a necessary concomitant a particular kind of morality or decency.”
The Supreme Court itself is not blind to fact that the five star hotel rating implies both a higher price and higher status for access. In dealing with allegations that some five star hotels in Kerala have opened out some of their premises for consumption of liquor at depressed rates in less salubrious surroundings, the court encourages the State to end such “malpractice”, because, according to it, five star hotels are “violating the ambience which they portray by enabling drinking in specially created bars at lower prices.”
We believe that gradualism and experimentation cannot be used as arguments to defer to legislative judgment (as the Court has done in this case), when groups are singled out based on social class and status. Unfortunately, our Supreme Court has chosen to steer clear of such debate – a strange choice for an institution in a democratic polity, given that conversation and debate lie at the heart of democracy.
The right to trade in liquor
As mentioned earlier, the Court also dwells at length on whether the amendment infringes the rights of bar owners under Article 19(1)(g) of the Constitution of India to carry on their trade or business, ultimately holding that the restriction is reasonable. This argument by the bar owners is easy to counter, because our law holds on to the archaic notion that trade in liquor is “outside commerce” (with its own dusty Latin phrase – “res extra commercium”). This is because it is injurious to health and, in law, is not a legitimate trade covered by Article 19(1)(g).
The Court has, somehow, managed to get this simple issue wrong as well. Because of a contradiction between two earlier decisions, the Court, in reconciling those decisions, somehow concluded that while “business in potable liquor is in the nature of res extra commercium” (and can, therefore, be completely prohibited), a “right under Article 19(1)(g) to trade in liquor does exist provided the State permits any person to undertake this business.”
What the Court seems to indicate is that there is no fundamental right to trade in liquor as long as there is a complete ban, but a fundamental right to trade in liquor kicks in if even one person is allowed to trade in it. This completely defies logic because if trade in liquor is, inherently, not a legitimate trade and if, therefore, there is no right under Article 19(1)(g) to carry on this trade, that fundamental right cannot suddenly be switched on if the State allows someone to trade in liquor. To clarify – on our reading of the law, trade in liquor is labeled as inherently not legitimate, and this inherent characteristic cannot suddenly change if the State allows trade in it. The State allowing sale in liquor can, at best, make it an economic activity that is allowed to exist by law, but not one that is constitutionally protected.
In conclusion, therefore, the judgment in the Kerala Bar Hotels Association case not only ignored the most crucial issue, but also failed to correctly decide the principal question that it did examine. Faced with two earlier judgments contradicting one another, what the Court should have done was to kick the matter up to a larger bench.
Karan Lahiri and Vrinda Bhandari are both practicing lawyers. Karan Lahiri assisted in representing one set of Appellants in the Kerala liquor ban case before the Supreme Court.
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