JUDGMENT

Kirpal, J.-Special leave granted.

2. On 4th May, 1999, auction for retail vend of arrack for the year 1999-2000 in respect of 272 shops in Mangalore Taluka took place. The respondent was declared successful bidder on 12th May, 1999 and thereafter this bid was confirmed.

3. Pursuant to the confirmation of the bid on 12th May, 1999, a temporary licence was given to the respondent on 28th June, 1999 and the licence was extended upto 15th August, 1999. According to the Karnataka Excise (Lease of Right of Retail Vend of Liquors) Rules, 1969 (hereinafter referred to as "Rules"), when the bid is made it is provisionally accepted and thereafter the confirmation takes place. On the provisional acceptance of bid certain money is required to be deposited and thereafter under Rule 17 security has to be furnished and a lease deed executed. In the instant case, the respondent admittedly failed to furnish the security amount under Rule 17 and also did not execute the lease deed. As a consequence thereof, on 14th October, 1999, the Government passed an order cancelling the confirmation of the bid and forfeited the deposit of Rs. 1,25,10,000/- which had been made by the respondent under Rule