Karnataka HC Orders Lodge Licence Renewal If Requirements Are Met, Says Pending Case Over Alleged Rape At Owner’s Home, Not Lodge, Was No Bar

The petitioner held a 12-month licence issued by Mavalli Grama Panchayat to operate “Netrani Residency” and applied for its renewal.

The Assistant Commissioner rejected the application because a criminal case against the petitioner under Sections 376, 376(2)(n) and 506 IPC was pending before the Sessions Court.

The petitioner challenged that endorsement, contending that the law did not make the pendency of a criminal case a ground for refusing renewal.

The State relied on condition 8 of the licence, which permitted action for illegal or unlawful activity at the licensed premises.

The charge sheet indicated that the alleged offence occurred at the petitioner’s residence, not at the licensed premises.

Sections 67 and 68 of the Karnataka (Gram Swaraj and Panchayat Raj) Act, 1993 require licences for specified trades and lodging houses, respectively, and permit them to be made subject to conditions.

Section 70(2) permits the Grama Panchayat, for reasons recorded in writing, to refuse or renew a licence, or to suspend or cancel it for default of a condition on which it was granted; Section 70(3) provides an appeal against such decisions.

The Court held that these provisions do not identify the mere pendency of a criminal case against a licensee as a ground for refusing renewal.

A licence condition concerning unlawful activity at the licensed premises must be assessed by reference to whether the alleged activity occurred there.

The Assistant Commissioner relied on the pending criminal case, but the Court found no statutory basis for refusing renewal on that ground alone.

Although the State invoked condition 8, the charge sheet placed the alleged offence at the petitioner’s residence, not at Netrani Residency; accordingly, the condition concerning unlawful activity at the licensed premises did not support the refusal.

The endorsement was therefore arbitrary and not traceable to the governing provisions.

It remitted the renewal application to the Assistant Commissioner, directing that renewal be granted within 30 days of receipt of the certified copy of the order, subject to the petitioner satisfying the other applicable statutory requirements.