Introduction:
The case of Hotel Soorya Swagath v State of Kerala and Connected Matter came before the Kerala High Court, raising significant questions about the limits of State power in regulating liquor sales during elections, especially when such regulation extends beyond its territorial electoral jurisdiction. The matter was heard by the Vacation Bench of Justice S. Manu, who was tasked with determining the legality of a government order declaring a “dry day” within a 5-kilometre radius of the Kerala–Tamil Nadu border.
The State Government had issued the impugned order in anticipation of the Tamil Nadu Assembly Elections scheduled for April 23, 2026. The order imposed a ban on the sale of liquor from 10 a.m. on April 21 until midnight on April 23 in certain border areas of Kerala, purportedly to ensure free and fair elections in the neighbouring State. This decision directly affected several licensed hotels and establishments operating in the Palakkad district, many of which held valid FL-3 bar licences for the excise year 2026–27.
Aggrieved by this restriction, a group of three-star hotels approached the High Court, contending that the State had exceeded its statutory authority and imposed an arbitrary restriction on their right to carry on trade. The petition thus brought into focus the interplay between election-related restrictions, statutory authority under excise laws, and the fundamental right to conduct business under Article 19(1)(g) of the Constitution.
The High Court’s interim order staying the government’s notification marked an important development in administrative and constitutional law, particularly concerning the scope of State power in election-related regulatory measures.
Arguments by the Petitioners (Hotels):
The petitioners, comprising several three-star hotels located within a 3 to 5-kilometre radius of the Kerala–Tamil Nadu border, mounted a strong challenge against the State’s order. Represented by senior counsel, they argued that the impugned notification was wholly without jurisdiction and lacked any statutory backing under the existing legal framework.
At the outset, the petitioners emphasized that they were lawful license holders under the relevant excise laws, possessing valid FL-3 bar licences duly renewed for the excise year 2026–27. They contended that their business operations were legitimate and fully compliant with all regulatory requirements. Therefore, any restriction imposed on their functioning must have a clear legal basis, which, according to them, was absent in the present case.
A central plank of their argument was that the State Government could not rely on election-related considerations to impose restrictions beyond what is expressly provided under the Representation of the People Act, 1951. They specifically referred to Section 135C of the Act, which provides for a prohibition on the sale of liquor during elections, but only within the polling areas. The petitioners argued that the statutory scheme does not contemplate or authorize the imposition of such restrictions in areas outside the concerned State or beyond designated polling zones.
They further contended that the impugned order extended the prohibition to areas in Kerala solely because of elections taking place in Tamil Nadu. According to them, this amounted to an extraterritorial application of election law principles, which is neither permissible nor contemplated under Indian law.
The petitioners also challenged the order on constitutional grounds, asserting that it violated their fundamental right to carry on trade and business under Article 19(1)(g) of the Constitution. They argued that while reasonable restrictions can be imposed in the interest of public order or morality, such restrictions must satisfy the test of proportionality and must be backed by statutory authority. In the present case, they claimed that the order was arbitrary, excessive, and not supported by any concrete evidence of potential law and order issues.
Another significant argument raised by the petitioners was the lack of precedent or necessity for such a measure. They pointed out that during previous elections in Kerala, liquor outlets in neighbouring Tamil Nadu had remained operational without any reported incidents affecting the electoral process. This, they argued, demonstrated that there was no real or imminent threat justifying the imposition of a blanket ban in border areas.
The petitioners also highlighted the severe economic impact of the order, particularly on the hospitality sector. The restriction coincided with a period of high business activity, and the sudden imposition of a dry day led to substantial financial losses. They argued that such an economic burden could not be justified in the absence of a clear legal mandate.
In conclusion, the petitioners urged the Court to strike down or stay the impugned order, emphasizing that administrative convenience or speculative concerns cannot override statutory limitations and constitutional guarantees.
Arguments by the Respondent (State of Kerala):
The State of Kerala, represented by its counsel, defended the impugned order as a necessary and precautionary measure aimed at ensuring the integrity of the electoral process in the neighbouring State of Tamil Nadu.
The State argued that maintaining free and fair elections is a matter of paramount importance, and governments are duty-bound to take all necessary steps to prevent undue influence, including the misuse of liquor to influence voters. It contended that border areas are particularly sensitive during elections, as they can be used as channels for illegal transportation and distribution of liquor into polling regions.
According to the State, the decision to impose a dry day within a 5-kilometre radius of the border was a preventive measure designed to curb such activities. It argued that the proximity of these establishments to the Tamil Nadu border created a real possibility of liquor being transported across the border and used for electoral malpractices.
The State further submitted that it possesses inherent powers under its excise laws, including the Abkari Act and related rules, to regulate the sale and distribution of liquor in the interest of public order and welfare. It argued that these powers are broad enough to encompass temporary restrictions such as the one imposed in the present case.
Additionally, the State contended that the impugned order was issued in coordination with election authorities and was part of a larger framework of measures aimed at ensuring a fair electoral process. It argued that the Court should adopt a deferential approach in matters involving policy decisions taken in public interest.
The State also attempted to justify the proportionality of the measure, arguing that the restriction was limited in duration (from April 21 to April 23) and scope (within a specified radius of the border). It claimed that the temporary inconvenience caused to the petitioners was outweighed by the larger public interest in maintaining electoral integrity.
However, the State was unable to point to any specific statutory provision that explicitly authorized the imposition of such a restriction in relation to elections in another State. This gap in legal authority became a crucial factor in the Court’s consideration.
Court’s Judgment:
The Kerala High Court, after considering the submissions of both parties, granted an interim stay on the operation of the State Government’s order. The Court’s reasoning reflects a careful balance between the need for electoral integrity and the requirement that administrative actions must be grounded in law.
At the outset, the Court examined the statutory framework governing election-related restrictions on liquor sales. It referred to Section 135C of the Representation of the People Act, 1951, which provides for the prohibition of liquor sales during elections. The Court noted that this provision is specifically limited to polling areas and does not extend to regions outside the electoral jurisdiction.
The Court observed that the State had failed to demonstrate any provision in the Abkari Act or related rules that would empower it to impose a dry day in connection with elections taking place in another State. This lack of statutory backing was a significant deficiency in the State’s case.
In a key observation, the Court held that administrative actions, particularly those that restrict fundamental rights, must have a clear legal basis. The absence of such authority renders the action prima facie unsustainable.
The Court also considered the petitioners’ argument regarding the violation of their fundamental right to carry on trade under Article 19(1)(g). While acknowledging that this right is subject to reasonable restrictions, the Court emphasized that such restrictions must be lawful, proportionate, and justified.
The Court found that the impugned order, at least at the prima facie stage, did not meet these requirements. It noted that the State had not provided sufficient material to demonstrate that the restriction was necessary or that it was based on any concrete assessment of risk.
Further, the Court took note of the fact that similar restrictions had not been imposed in reciprocal situations, such as when elections were held in Kerala and liquor outlets in neighbouring States remained open. This raised questions about the consistency and necessity of the impugned measure.
In light of these considerations, the Court stayed the operation of the order, thereby allowing the petitioners to continue their business operations. However, it clarified that the matter required a detailed examination and listed it for further hearing on June 08.
The judgment underscores the principle that even in matters involving public interest, the State must act within the confines of law and cannot exercise powers that are not expressly or implicitly conferred upon it.