Facts of the Case

  • Petitioner’s Business Identity: The Petitioner, Habeeb Ahmed Al-Saqaf, is the owner of "Chill on Hill Lounge," located at Sanali Mall, Abids, Hyderabad. He holds valid licenses from various statutory departments, including trade licenses from the competent municipal authorities, registration with the Labour Department, and food licenses from the Food Safety and Standards Authority of India (FSSAI).
  • Nature of Commercial Activity: As an extension of his standard restaurant and coffee shop operations, the petitioner serves flavoured hookah pots to visiting customers.
  • Age Verification Protocol: To ensure complete legal compliance, the petitioner establishes a policy of serving hookah only to individuals over 18 years of age by collecting and keeping physical photocopies of official identity/age proof documents.
  • Infrastructure for Smokers: Operating under the mandate of Section 4 of the COTPA Act, 2003, which requires separate facilities for establishments with a seating capacity of 30 or more persons, the petitioner earmarked and created an exclusive, designated smoking enclosure within the restaurant premises solely for hookah consumption.
  • Cause of Action: The petitioner approached the High Court because officials from the local Abids Police Station (Respondents No. 3 and 4) repeatedly raided, inspected, and interfered with his restaurant business, preventing him from operating his lawful trade despite his compliance with all relevant regulatory frameworks.

Issues Involved

  1. Whether the regular and unprompted interference by the police authorities in a licensed restaurant serving flavoured hookah within an earmarked smoking zone constitutes a violation of the petitioner’s fundamental right to carry on trade and business under the Constitution of India.
  2. What is the scope and boundary of the police’s power to enter, search, monitor, and regulate hookah lounges under Section 4 and Section 12 of the COTPA Act, 2003, vis-à-vis protecting owners from arbitrary administrative harassment.
  3. Whether a valid municipal trade license for running a cafeteria or restaurant automatically authorizes the business owner to run a dedicated hookah center, and under what conditions such activities can be lawfully sustained or restricted.

Petitioner’s Arguments

  • Strict Regulatory Compliance: The learned counsel for the petitioner, Sri A.L. Raju, argued that his client is running a perfectly legal business backed by all mandatory statutory registrations, such as GST, Sales Tax, Food Safety, Trade, and Labour licenses.
  • Adherence to Judicial Precedents: The petitioner relied closely on the landmark Apex Court judgment in Narinder S. Chadha v. Municipal Corporation of Greater Mumbai (Civil Appeal No. 10836 of 2014), arguing that so long as tobacco products (including hookah tobacco) are consumed in designated smoking zones by individuals above 18, the state cannot prohibit the trade unless an explicit law bans it.
  • Absence of Unlawful Conduct: It was stressed that the petitioner maintains strict age verifications via photo ID collections and does not violate any rule. Therefore, the continuous, high-handed police actions and threats to dismantle the business signboards cause irreparable damage to his commercial reputation and constitute direct harassment.
  • Consistent Position of the High Court: The petitioner noted that from 2014 onward, the Telangana High Court has consistently held that the police cannot disrupt lawful trade or cause unneeded inconvenience to business owners or customers under the guise of executing regulatory provisions.

Respondent’s Arguments

  • Public Health Concerns and Drug Menace: The learned Government Pleader for Home, Sri Srikanth Reddy, counter-argued that tobacco is a massive public health hazard causing roughly 8 lakh deaths annually in India, heavily draining public resources. He expressed deep worry that these setups act as gateways for school- and college-going youth to fall prey to serious drug addictions.
  • Unauthorized Conversion of Business Nature: The state pointed out that several establishments obtain standard restaurant or cafeteria licenses but then covertly modify the venue into full-scale hookah parlors where no other primary restaurant service is actively provided. They contended that such unauthorized conversions give the police ample right to step in and initiate license cancellations.
  • Statutory Search Powers: The respondents emphasized that Section 12 of the COTPA Act explicitly empowers police officers not below the rank of Sub-Inspector to enter, inspect, and search any business building if there is reason to suspect that the statutory provisions are being compromised.
  • Right to Inspect and Regulate: Citing the High Court order in Writ Petition No. 14192 of 2011 (dated 01.07.2015), the state asserted that police authorities retain the complete liberty to inspect commercial setups to secure absolute compliance with statutory warnings, pictorial representations, and evolving guidelines.

Court Order / Findings

  • Acknowledgment of Police Regulatory Power: The Hon’ble High Court, presided by Smt. Justice Lalitha Kanneganti, ruled that the police undeniably possess the statutory power under Section 4 and Section 12 of the COTPA Act to monitor, inspect, and regulate smoking in public and commercial venues. Having a municipal trade license does not insulate an owner from police oversight.
  • Conditional Operational Rights: The Court noted that while Section 4 permits a separate smoking space in restaurants seating 30 or more people, this provision does not give an absolute right to run an exclusive hookah parlor. Within the designated smoking area, no services other than smoking can be legally allowed. If an establishment operates purely as a hookah hub under a regular restaurant license, the licensing authorities are fully authorized to cancel it.
  • The Strike of a Fine Balance: The Court ordered that there must be a fine balance maintained by the law enforcement machinery. Police can only intervene in business operations when there is a clear, documentable statutory breach or illegal activity taking place on the premises. They cannot use their powers to arbitrarily harass business owners or patrons without following proper legal channels.
  • Surveillance for Narcotics Prevention: Recognizing reports that some hookah lounges serve as facilitation points for narcotic drugs, the Court validated the need for continuous police surveillance and checks, declaring that it cannot issue a blanket direction preventing competent officers from visiting these centers.
  • Final Directions for Disposal: The Court disposed of the Writ Petition by ordering the petitioner to strictly isolate the hookah smoking enclosure within the hotel premises, ensuring no other area is utilized for smoking. It also directed the petitioner to officially inform the local Station House Officer (SHO) about the location of this smoking zone to facilitate hassle-free monitoring. The court added that any high-handed behavior by police officers must be brought to the notice of higher police authorities for inquiries and necessary actions.

Important Clarification

  • No Explicit Licensing under COTPA: The Court clarified that though the COTPA Act itself does not map out a specific licensing protocol for hookah setups, the overarching principles of public health (Article 47 of the Constitution) mandate strict spatial segregation.
  • Jurisdictional Competence for Inspections: Only officers explicitly authorized under the Act (not below the rank of Sub-Inspector) are permitted to enter the premises for searches.
  • Duty of Intimation: Restaurant owners running a separate space for hookah consumption must formally intimate the respective Station House Officer (SHO) regarding the designated zone to allow legitimate state surveillance while keeping arbitrary harassment at bay.

Section Involved

  • Section 4 of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (COTPA).
  • Section 6 of the COTPA Act, 2003 (Prohibition on sale of tobacco products to minors).
  • Section 7 of the COTPA Act, 2003 (Restrictions on trade, commerce, production, supply, and distribution).
  • Section 12 & Section 13 of the COTPA Act, 2003 (Power of the police to enter, search, and seize items).
  • Section 29 of the COTPA Act, 2003 (Protection of action taken in good faith).
  • Section 151 of the Code of Civil Procedure (CPC), 1908.
  • Article 226 of the Constitution of India (Power of High Courts to issue certain writs).
  • Article 47 of the Constitution of India (Duty of the State to raise the level of nutrition and the standard of living and to improve public health).
  • Sections 21 & 76 of the City Police Act.

Link to download the order -https://mytaxexpert.co.in/uploads/1782894520_37compressed.pdf

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