Judgment

BOSE, J. : We are concerned in this appeal with the sale of a liquor contract for the year 1953-54 in the State of Mysore.

2. The appellant Guruswamy and the fourth respondent Thimmappa are rival liquor contractors. The contract for the City and Taluka of Bangalore was auctioned by the third respondent, the Deputy Commissioner on 27th April, 1953. The appellants bid of Rs.1,80,000 a month was the highest, so the contract was knocked down in his favour subject to formal confirmation by the Deputy Commissioner. On the same day the appellant deposited, Rs. 1,99,618-12-0.

3. The fourth respondent Thimmappa was present at the auction but did not bid, Instead of that he went direct to the Excise Commissioner behind the appellant s back and made an offer of Rs. 1,85,000.

4. On 11th May, 1953, the Excise Commissioner passed the following order :

"The highest bid received in the recent auction sale is Rs. 1,80,000 per mensem. As Sri Thimmappa has now offered Rs. 1,85,000 per mensem the sale held by the Deputy Commissioner is cancelled. The Deputy Commissioner, Bangalore District, is requested to take further action under the Rule 10 of the Rules regulating the sales of Excise Privileges.

The tender given by Thimmappa is herein enclosed".

The same day the Deputy Commissioner informed the appellant that the sale had been cancelled by the Excise Commissioner and on 16th May 1953, he was given a copy of the Excise Commissioner s order.

5. On 12th May, 1953, the Deputy Commissioner made the following order:

"The Toddy sale ....... Held on the 27th April, 1953, in which a bid of Rs. 1,80,000 per month was secured. This sale has been cancelled by the Excise Commissioner in view of the fact that a higher tender of Rs. 1,85,000 per month has been received from Sri T. Thimmappa.

2. In these circumstances, the tender of Sri. T. Thimmappa .... Is accepted".

6. Protests and appeals were made to various authorities but they proved infructuous; so, on 19th June 1953, the appellant applied to the State High Court at Mysore for a writ of mandamus . The petition was dismissed but the appellant was granted a certificate under Article 133(1) of the Constitution and so has come here.

7. The matter is governed by the Mysore Excise Act of 1901 and the Rules made under it, Section 15 of the Act prohibits the sale of liquor without a licence from the Deputy Commissioner. Section 16 provides that -

"It shall be lawful for the Governor to grant to any person or persons on such conditions and for such period as may seem fit the exclusive or other privilage-

.............

(2) of selling by retail

.............

Any country liquor................ within any local area.

No grantee of any privilege under this section shall exercise the same until he has received a licence in this behalf from the Deputy Commissioner."

8. Section 29 authorises Government to make rules for the purpose of carrying out the provisions of the act.

9. The notification containing the Rules is headed -

".................. the Government of His Highness the Maharaja of Mysore are pleased to frame the following rules to regulate the disposal of the privilege of retail vend of intoxicating liquors........ ........"

Then comes Rule I. 1. It runs-

"The privilege of retail vend of excisable articles shall be disposed of either by auction or by such other method as may be notified by Government."

Rule I. 2 is also relevant. It says -

"In cases where the right of retail vend is permitted by Government to be disposed of by calling for tenders, a notification calling for the same shall be published by the Excise Commissioner in three successive issues of the Mysore Gazette, after obtaining the previous approval of the Government therefor."

Then follows a series of rules about auctions. Out of them Rules II. 8 is all we need note. It runs -

"The shops will be knocked down to the highest bidder, but the sale will be subject to formal confirmation by the Deputy Commissioner who shall be at liberty to accept or reject any b