JUDGMENT

GUPTA, J. (On behalf of Tulzapurkar J. and himself):- This appeal by certificate is from a judgment of the Allahabad High Court, Lucknow Bench, dismissing the suit instituted by the appellant, State of Uttar Pradesh, for recovery of a sum of Rs. 20,100 from the respondent. The facts stated in the plaint on which the claim is based are these. The annual excise auctions; for the year 1951-52 for Faizabad district were held at Faizabad on February 22, 1951 under the Excise Rules. The respondent offered the highest bid of Rs. 73,000 and Rs. 48,000 respectively as fees for two groups of country liquor shops but as he did not deposit 1/6th of the aforesaid sum on conclusion of the sales as required under the Excise Rules, the two groups of shops had to be sold again on March 30, 1951. The resale fetched respectively Rs. 65,700 and Rs. 35,200 for these two groups of country liquor shops. According to the State of Uttar Pradesh it suffered a total loss of Rs. 20,100, which is the difference between what the respondent had offered and the sum for which the shops were later sold, and the respondent was liable to compensate the loss. The suit was decreed by the trial court. On appeal the High Court dismissed the suit on the view that there was no valid contract which could be enforced by the plaintiff as the requirements of Article 299 (1) of the Constitution had not been complied with. We are also of the view that the suit must be dismissed but for a slightly different reason, in our opinion there was no concluded contract between the parties, nor was there any statutory rule permitting recovery of the deficiency on re-sale from the respondent.

2. The sale proclamation which is said to have contained the conditions of sale was not produced. The Assistant Excise Commissioner (P. W. 1) in his testimony referred to Rule 357 of the Excise Manual. The relevant part of the rule is an follows.:

"The following conditions shall apply to all sales under the auction system, and will be inserted at the foot of the sale proclamation if such proclamation is issued by the Excise Commissioner.

(1) The officer conducting the sales is not bound to accept the highest or any bid. In any case when the highest or any bid is not proposed to be accepted, the next highest bid should also be reported to the Excise Commissioner.

(2) The final acceptance of any bid is subject to the sanction of the Excise Commissioner.

(3) Every person bidding will be held to his bid, whether it be the highest or not.

(4) .............

(5) A sum equal to one-sixth of the annual fees shall be payable immediately on the conclusion of the sales for the day, and the balance by such installments as are specified in the licence to be granted. If default be made in the payment of the advance installments, the shop on farm will be resold, and if the price finally bid at the re-sale be less than that bid at the first sale, the difference will be recovered from the defaulter." Section 77 of the U. P. Excise Act, 1910 states:

All rules made and notifications issued under the Act shall be published in the Official Gazette and shall have effect as if enacted in this Act from the date of such publication or from such other date as may be specified in that behalf." The High Court found that the conditions mentioned in Rule 357 had never been published as required and they did not, therefore, have the force of law. The High Court held that Part II of the Excise Manual which includes Rule 357 contained provisions which were commonly referred to as rules but were not really statutory rules and that it was a sort of book of guidance. Before us it was claimed on behalf of the appellant that some of the conditions contained in Rule 357 bad been published in the Official Gazette, our the learned counsel for the appellant, State of Uttar Pradesh, was not in a position to dispute that at least the last part of the 5th condition providing that a case of default, if the price fetched at the re-sale was l