Judgment

HEGDE, J.:- In this appeal by special leave the appellant challenges the decision of the High Court of Assam, and Nagaland in refusing to set aside the order by the Assam Government dated June 16, 1970 granting a contract to Respondent No.5 for wholesale supply of country spirit to Tinsukia and North Lakhimpur warehouses for three years from July 1, 1970 to June 30, 1973.

2. The appellant is a Public Limited Company. Under a contract entered into between it and the Government of Assam, it had the exclusive privilege of supplying country spirit to the two warehouses in the District of Lakhimpur for the period from July 1, 1967 to March 3, 1970. Sometime before that contract came to an end, the Commissioner of Excise, Assam invited tenders in sealed covers for the privilege of supplying the country spirit to retail vendors in the Upper Assam area comprising of the District of Lakhimpur and Sibsagar including Mikir Sub-Division of the United Mikir and North Cachar Hills for the period of three years commencing from April 1, 1970. In the notification issued by the Commissioner, it was stated that preference will be given to the manufacturers of the spirit. In pursuance of the tender notice, the appellant the 5th respondent and several others submitted tenders for the grant of the contract in question followed up by necessary licences. The appellant offered to supply the spirit at 74 P.per London proof litre. Respondent No.5 quoted the price at 95 P. per London proof litre. Another tenderer namely Rampur Distillery and Chemicals Company Ltd. offered the lowest rate of 60 P. per London proof litre. The tender of Rampur Distillery and Chemicals Co. Ltd., was found to be defective and therefore it was rejected. The Government was not satisfied with any of the tenders. Thereafter by a letter dated February 28, 1970, it called upon all the tenderers to intimate to the Government whether they were willing to reduce their rate and if so to what extent. They were required to send their replies by March 10, 1970. None of the tenderers excepting the 5th respondent were willing to reduce the rate quoted by them. The Managing Director of Respondent No.5, by his letter dated March 4, 1970 informed the Government that his concern was willing to reduce the rate and he left it to the Government to fix any rate which it considered reasonable. He agreed to accept the rate fixed by the Government. The Government reduced the rate fixed by the Respondent No.5 to 74 P. per London proof litre and accepted its tender. Aggrieved by this decision, the appellant moved the High Court of Assam and Nagaland under Article 226 of the Constitution to quash the Government Order granting the contract to the 5th respondent and for issuing a direction to the concerned respondents not to give effect to the impugned order. The High Court rejected that application. Hence this appeal.

3. At the very outset, it is necessary to mention that no allegation of mala fides is made against the Government. The only question that we have to consider in this appeal is whether the impugned order was made in violation of any statutory provisions.

4. It was urged on behalf of the appellant that the impugned order violates Rule 93 of the Rules framed under the Eastern Bengal and Assam Act No.1 of 1910 (Eastern Bengal and Assam Excise Act, 1910) (to be hereinafter referred to as the Act). Before reading Rule 93, it is necessary first to refer to the relevant provisions in the Act i.e. Section 19. That section reads:

"The Provincial Government may grant to any person, on such conditions and for such period as it may think fit, the exclusive privilege of manufacturing or of supplying to licensed vendors or of manufacturing and supplying to licensed vendors any country liquor or intoxicating drug within any specified local area.

No guarantee of any exclusive privilege under this Section shall exercise the same until he has received a license in that behalf from the Excise Commissioner".

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