Guest Post – Difficult Conversations: On why the Supreme Court’s judgment in the Kerala Liquor Ban Case represents a lost opportunity to examine tough questions on discrimination

(This is a guest post by Karan Lahiri and Vrinda Bhandari. A condensed version of this piece appeared previously on Scroll.)

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 because of a glaring omission.

 This case was about whether the State of Kerala’s statutory amendment restricting the grant of FL-3 licenses (i.e. bar licenses that allow the sale of Indian Made Foreign Liquor or IMFL to the public) to Five Star Hotels 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.

One Size Fits All

Are there certain kinds of discrimination that are worse than others, demanding a more searching judicial examination? As of now, when a law differentiates or discriminates between two sets or “classes” of persons, the constitutionality of this line-drawing process is examined on the basis of a two-step test. First, a Court looks at whether there is an “intelligible differentia”. In other words, the line dividing two or more groups must be clear, based on discernible characteristics shared by members of each group. Second, it examines whether this “differentia” bears a rational relation to what the impugned law seeks to achieve.

The problem is that this is a one-size-fits-all test. All laws, essentially, differentiate between two or more groups of individuals. The Delhi Government’s odd-even formula to curb pollution differentiates between different groups (by exempting CNG vehicles, for instance), but it is, intuitively, different from a law that, let us say, penalizes begging on the road by the indigent. Can the same test be used for both sets of cases?

The “strict scrutiny test”, referred to in the judgment, is a concept that is making inroads into our jurisprudence, and is based on a concept we have borrowed from the U.S. When a law in the U.S. is tested on the anvil of equality, the default rule is that it will be upheld if it is rationally related to a legitimate government purpose. However, where the law makes a suspect classification (i.e. discrimination on the basis of race, religion, nationality etc., or analogous “discrete and insular minorities”), the more rigorous “strict scrutiny” test is applied. To survive strict scrutiny: –

  1. A law must be narrowly tailored to achieve a compelling government interest.
  2. It must be the least restrictive means for achieving that interest.

Notice that this test weighs in the importance of the State’s ultimate objective, and ensures that the means used to reach that objective are closely fitted to the ends, and that these are the least onerous means. Further, the fact that “suspect classifications” triggers strict scrutiny signals that the nature of the rights being affected by a discriminatory law are factored in, where some kinds of discrimination (i.e. on the basis of race, nationality etc.) are worse than others (e.g. a law exempting CNG vehicles from Delhi’s odd-even rule).

Just to clarify, this is not about whether the “strict scrutiny” test is the best test out there. What we are saying is that this was an opportunity for the Court to re-examine what goes into making a robust litmus test in equality cases.

Conversations on Equality and Class Discrimination

First, the Court should have begun a useful conversation on whether the dominant two-step test used in India is adequate to analyze all equality-related cases. As Dr. Tarunabh Khaitan points out, the test used in India is inadequate, because it is blind to the impact on, and the nature of the group being affected, as it does not “balance” the State’s interests against the rights of affected persons. Further, it does not look at the importance of the State interest involved, or whether there is a less onerous alternative. Putting it simply, as per the dominant two-step test, described above, if measure “X” is challenged on the basis that it is discriminatory, it is, simply put, based on whether it is reasonable and suitable to achieve objective “Y”, namely the Government’s end goal. The law in India, as it exists looks only at whether X and Y are reasonably connected, without looking at who measure X is impacting, or looking closely at the nature of objective Y.

Secondly, the Court should have entered into whether certain classifications are inherently “suspect”, justifying closer scrutiny compared to other more benign cases of differentiation. A good textual starting point would have been Article 15(1), which enjoins the State from discriminating on the basis of religion, race, caste, sex and place of birth. It could then have gone on to examine whether discriminating on the basis of wealth and social class is analogous.

We believe that this analysis, on discrimination based on social class, should have gone something like this.

  1. 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.
  2. Further, the Court ought to have looked at the additional question of whether the poor in India constitute what Dr. Khaitan calls a “vulnerable group”. In our opinion, poverty is about more that the lack of money or assets. It is characterized 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 marginalized actors with little influence in the political process,[1] deserving of judicial protection by means of more rigorous standard of scrutiny.
  • Applying strict scrutiny standard, 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 narrowly tailored solution 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 MRP 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 a Five Star 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 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 Five Star hotels 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 Stars are “violating the ambiance which they portray by enabling drinking in specially created bars at lower prices.”

What we have outlined above is what we believe to be the correct line of reasoning. 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. You may not agree either with the reasoning or the result we have proposed. That’s what makes Constitutional Law exciting – the fact that it inspires healthy and vibrant debate. 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.

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.

[1] There is empirical evidence to suggest that the poor, India, rarely come together as a class in a way that makes democratic institutions respond to their preferences. This ties is with the writings of certain American Constitutional scholars, who speak of the poor as an “anonymous and diffuse” group that cannot organize itself effectively.

Blog Editor’s Note: Previously, I’ve made the case for a higher threshold of Article 14 scrutiny in election cases here (unfortunately, we know how that turned out!), and Mihir wrote a guest post examining how the arbitrariness doctrine serves an alternative to the unsatisfactory one-size-fits-all nature of the rational review standard. To the persuasive arguments made in this post, I have a quick addition: a higher threshold of scrutiny would insist not only on the showing of a compelling State interest and a narrowly-tailored law, but would also place the evidentiary burden upon the State to demonstrate the connection. For instance, in this case, instead of making the State’s case for it by the blanket observation that people going to 5-Star Hotels are “more mature”, the Court would require the State to bring hard evidence forward showing that drinkers in 5-Star Hotels are less prone to be alcoholics, or indulge in violence, or something of that sort. Needless to say, it’s rather unlikely that there would be evidence of this sort forthcoming, and the law would have to fail. The purpose of this imposing this evidentiary burden is precisely to forestall the State from relying upon gross and invidious stereotypes about people (“uneducated persons can’t distinguish between right and wrong”, “5-Star alcohol drinkers are mature”) which, in itself, is a profound denial of the principle of equal concern and respect.



Filed under Article 14, Equality

9 responses to “Guest Post – Difficult Conversations: On why the Supreme Court’s judgment in the Kerala Liquor Ban Case represents a lost opportunity to examine tough questions on discrimination

  1. Justice Vivian Bose had made this exact argument in his dissent in Anwar Ali Sarkar, back in 1952, with his excellent size-of-the-skull example.

    On the point that all laws differentiate between two or more groups of individuals:
    “82. Take first the words ‘equality before the law’. It is to be observed that equality in the abstract is not guaranteed but only equality before the law. That at once leads to the question, what is the law, and whether “the law” does not draw distinctions between man and man and make for inequalities in the sense of differentiation? One has only to look to the differing personal laws which are applied daily to see that it does; to trusts and foundations from which only one particular race or community may benefit, to places of worship from which all but members of particular faith are excluded, to cemeteries and towers of silence which none but the faithful may use, to the laws of property, marriage and divorce. All that is part and parcel of the law of the land and equality before it in any literal sense is impossible unless these laws are swept away, but that is not what the Constitution says, for these very laws are preserved and along with equality before the law is also guaranteed the right to the practice of one’s faith.
    84. What, after all, is classification? It is merely a systematic arrangement of things into groups or classes, usually in accordance with some definite scheme. But the scheme can be anything and the laws which are laid down to govern the grouping must necessarily be arbitrarily selected; also granted the right to select, the classification can be as broad-based as one pleases, or it can be broken down and down until finally just one solitary unit is divided off from the rest. Even those who propound this theory are driven to making qualifications. …”

    And on the point that the impact of measure X being potentially discriminatory even if it has a rational nexus to objective Y:

    84. ….Thus, it is not enough merely to classify but the classification must not be “discriminatory”, it must not amount to “hostile action”, there must be “reasonable grounds for distinction”, it must be “rational” and there must be no “substantial discrimination”. But what then becomes of the classification? and who are to be the judges of the reasonableness and the substantiality or otherwise of the discrimination? And, much more important, whose standards of reasonableness are to be applied? — the judges’? — the government’s? — or that of the mythical ordinary reasonable man of law which is no single man but a composite of many men whose reasonableness can be measured and gauged even though he can neither be seen nor heard nor felt? With the utmost respect I cannot see how these vague generalisations serve to clarify the position. To my mind they do not carry us one whit beyond the original words and are no more satisfactory than saying that all men are equal before the law and that all shall be equally treated and be given equal protection. The problem is not solved by sub-stituting one generalisation for another.
    85. To say that the law shall not be discriminatory carries us nowhere for unless the law is discriminatory the question cannot arise. The whole problem is to pick out from among the laws which make for differentiation the ones which do not offend Article 14 and separate them from those which do. It is true the word can also be used in the sense of showing favouritism, but insofar as it means that it suffers from the same defect as the “hostile action” test. We are then compelled to import into the question the element of motive and delve into the minds of those who make the differentiation or pass the discriminatory law and thus at once substitute a subjective test for an objective analysis.
    87. I can conceive of cases where there is the utmost good faith and where the classification is scientific and rational and yet which would offend this law. Let us take an imaginary case in which a State legislature considers that all accused persons whose skull measurements are below a certain standard, or who cannot pass a given series of intelligence tests, shall be tried summarily whatever the offence on the ground that the less complicated the trial the fairer it is to their sub-standard of intelligence. Here is classification. It is scientific and systematic. The intention and motive are good. There is no question of favouritism, and yet I can hardly believe that such a law would be allowed to stand. But what would be the true basis of the decision? Surely simply this that the judges would not consider that fair and proper. “

  2. Karan Lahiri

    Taking off from the Blog Editor’s note above, one more aspect which needs to be factored in while introducing tiered scrutiny is India is accounting for cases where there is disproportionate impact on a particular group flowing from a facially neutral legislation, as opposed to where a statute is facially discriminatory. A law like the one in Kerala, which is facially discriminatory, should be more rigorously scrutinized in comparison to a facially neutral law (e.g. a law imposing tax on liquor across the board, which merely has a disproportionate impact). At the same time, I’m not crazy about the way American law treated facially neutral law (e.g. Arlington Heights v. Metropolitan Housing Corp.). I think disproportionate impact on vulnerable groups, as a category of discrimination, needs to be thought about more carefully in evolving a schema for tiered scrutiny, because while I believe that these cases should not be subjected to the highest level of scrutiny, mere rational basis review is not enough. So intermediate scrutiny, maybe??

    As you can see, my thoughts on a consistent, coherent scheme for tiered scrutiny in India are hardly organized, because evolving such a scheme (which is philosophically rigorous, constitutionally correct as also workable in individual cases) is, by any standard, a tough task. However, because it is a hard framework to evolve, it needs to be thought about carefully (by academics, lawyers and judges alike), instead of being discarded on the basis that it is a inapplicable, being somehow foreign to our jurisprudence. The nature of scrutiny in equality review is linked to the idea of equality itself, which exists independent of the Indian Constitution or the US Constitution or Estonian Constitution or what have you!!! Evolving tiered scrutiny or proportionality review or any other standard which is more effective that the current “intelligible differentia – rational nexus” test is about perfecting our conception of equality, and not about whether or not “American decision are… strictly applicable to us (à la Justice Balakrishnan in Ashok Kumar Thakur). This is why having this conversation is critical for us, if we want our constitutional jurisprudence to evolve.

    • Karan – I think there’s enough in Indian jurisprudence to support that argument. Consider Section 298(1) of the Government of India Act, 1935, which stated that:

      “298. (1) No subject of His Majesty domiciled in India shall on grounds only of religion, place of birth, descent, colour or any of them be ineligible for office under the Crown in India, or be prohibited on any such grounds from acquiring, holding or disposing of property or carrying on any occupation, trade, business or profession in British India.”

      In Punjab Province v Daulat Singh, (1946) 48 BOMLR 443 (, Thankerton J. held that:

      “Beaumont J. holds that in applying the terms of Sub-section (1) of Section 298, it is necessary for the Court to consider the scope and object of the Act which is impugned, so as to determine the ground upon which such Act is based. Their Lordships are unable to accept this as the correct test. In their view, it is not a question of whether the impugned Act is based only on one or more of the grounds specified in Section 298(1), but **whether its operation may result in a prohibition only on these grounds**. The proper test as to whether there is a contravention of the sub-section is to ascertain the reaction of the impugned Act on the personal right conferred by the sub-section, and, while the scope and object of the Act may be of assistance in determining the effect of the **operation of the Act on a proper construction of its provisions**, if the effect of the Act so determined involves an infringement of such personal right, the object of the Act, however laudable, will not obviate the prohibition of Sub-section (2).”

      Then, in Anwar Ali Sarkar, it was held:

      “The question which falls to be considered under article 14 is whether the legislation is discriminatory in its nature, and this has to be determined not so much by its purpose or objects but by its effects.”

      And then of course, Anuj Garg endorses this position.

      More recently, Justice Bhat in the Delhi High Court applied an effects-based test in assessing a pregnancy-based disability. I blogged about it here:

      • Thanks for this. Wasn’t aware of the Daulat Singh judgment.

        Just to elaborate on factoring in impact while looking at tiers of scrutiny, I think I should just put down the questions that I’ve been thinking about, because I don’t think it’s clear enough in my first comment: –

        1. First, is it correct to say that facially neutral laws that discriminate are less bad, in comparison to those where the intent to discriminate is writ large on the fact of the statute?

        2. Second, if the answer to Q. 1 is yes, then should that be factored into tiers of scrutiny analysis, bringing down the level of scrutiny?

        3. If we are reducing the level of scrutiny for facially neutral laws, then what is the appropriate level of scrutiny for disproportionate impact on vulnerable groups, as opposed to disproportionate impact cases where vulnerable groups are not involved?

  3. I’d answer your first question in the negative, and I think that would make the questions 2 and 3 irrelevant. 🙂

    John Gardner has an article called “On the Ground of Her Sex(uality)”, where he argues that direct discrimination is the paradigmatic form of discrimination, and indirect discrimination is, in some way, secondary or parasitic upon it. Khaitan responds to him in his book, and argues that it’s actually indirect discrimination that’s paradigmatic (if I understood him correctly). Now if that’s the case, there’s no reason why we’d have a more relaxed scrutiny of facially neutral laws.

    Also, the Canadian Supreme Court has merged the intent and effect tests in a recent judgment (I can’t remember its name :/). My recollection of the reasoning was that there’s basically no difference – both forms of discrimination tend to endorse and perpetuate existing disadvantage and indignity. Indeed, if you think of discrimination as being the result of structures and systems (as opposed to discrete, intentional, individual acts), then the same set of tests and scrutiny should apply whether its direct or indirect.

    • I actually agree with you. That’s the progressive view. However, the challenge here is to also frame arguments in a way that Courts in India will accept tiers of scrutiny, while at the same time classifying the poor as a vulnerable group. As you may have gathered from our discussions, I’ve been thinking about this issue precisely because our Supreme Court would not subject a tax (on liquor or any other commodity X) to the same scrutiny as a ban on public consumption (of liquor or commodity X) in five star hotels.

      This is the issue as I see it from a practical point of view. EU style proportionality allows for some play in the joints. Tiers of scrutiny brings in rigidity within each tier. Our Courts will find it difficult (given entrenched views) to treat commercial or pricing or tax laws (which impact the poor disproportionately) as equivalent to those where discriminatory intent is apparent, because of all the law that exists regarding deferring to the elected branches on policy questions (especially economic policy). Also, I expect the Courts to shy away from any line of argument that would allow the poor to move Courts for substantively equal access to resources/services (even essential ones), which is the logical end point of your line of argument [where high fees in State run schools, or a high tax on a commodity, is treated at par with a case where anti-poor discrimination is apparent from the text of the statute].

      There are two ways out of this: –
      a. The trigger for strict scrutiny is relocated from the grouping to the nature of the constitutional right/norm affected (e.g. status). [This is similar to what happened in Harper v. Virginia State Board of Elections.]
      b. Lowering the standard of scrutiny in cases where there is no discriminatory intent (or something that looks like discriminatory intent) while retaining the vulnerable grouping as the relevant trigger. [One way is to segregate those cases where intent is inferred from a facially neutral law, and treat those cases at par with facially discriminatory laws. For example, this can be done by deploying a foreseeability test – See . ]

      However, on the progressive view, you may be interested in an article called “On Protecting the Poor Through the Fourteenth Amendment” by Frank Michelman. There’s one bit that I particularly like, where he says: –
      “If the relevant insight concerning payment requirements must be given a doctrinal form of statement, the appropriate construction would seem to be something like: “It is no justification for deprivation of a fundamental right (i.e., involuntary nonfulfillment of a just want) that the deprivation results from a general practice of re- quiring persons to pay for what they get.” Such a construction focuses the inquiry on the crucial variable — the nature and quality of the deprivation — and thereby avoids the distractions, false stirring of hopes, and tunneling of vision which results from a rhetorical emphasis on acts of “discrimination” that consist of nothing more than charging a price.”

  4. Such excitement in the comment section! Bhatia, tum bhi toh Last word! Good Good!

    Dont worry! I wont trouble your erudite comment section, always!

    Sen J. trait:

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