Judgment

O. CHINNAPPA REDDY, J :- Special leave granted

2. On March 17. 1983, there was an auction of the exclusive privilege of selling country liquor in a group of twenty four shops in Allahabad City known as the Chail group of shops. The respondents were the highest bidders in fact, they were the only bidders, a circumstance which should arouse anyones curiosity and suspicion. However, nothing turns on the circumstance in this case. The bid was for a sum of Rupees 1,19,00,000. Auctions for the privilege of selling foreign liquor and bhang and of the privilege of selling country liquor in rural areas were separately held on other days. The Deputy Commissioner of Excise. Allahabad submitted a report dated March 26. 1983 to the Collector. Allahabad stating that the bids were low and would result in a loss of revenue to the Government, if accepted and suggesting that it might be recommended to the Excise Commissioner that the auctions might be cancelled and re-auctions held with a new strategy which he also suggested in the letter. On March 28. 1983. the Commissioner of Excise passed an order setting aside the auction of all the shops and directing a re-auction. The order may be usefully extracted here in full. It is as follows :

"It became evident after the analysis of the results of auction of the shops of country liquor, bhang and foreign liatior held on 17th, 18th and 24th March 1983 of Allahabad district that the final bids of the shops accepted by the Collector and the bids received of the auction of the shops still postponed all taking together is comparatively less by (90-87) lacs to that of the license fees of the last year. Such a heavy loss does not stand to reason in view of the trend of the results of auction received from other districts. The results of the auction held in the neighbouring districts of Allahabad are as follows :-

Name of the District Rate of Increment

1. Mirzapur 36-8 percent

2. Benaras 24-3 percent

3. Pratapgarh 15-8 percent

4. Fatehpur 13-6 percent

5. Rai Bareilly 20-8 percent

Allahabad is a developed District in comparison with the aforesaid districts and I see no reason of such a heavy loss in the license fees of the excise shops of these districts.

The District Excise Officer of Allahabad has submitted report regarding the auction in which he has suggested only one alternative to save the heavy fall in the total revenue of the district that ways to receive more revenue pertaining to the shops of country liquor of Tehsil Chyal (City group) should be adopted as there is margin of gain of Revenue in this group only. The District Excise Officer has recommended that all the bids of auction of all the shops of country liquor. Bhang and foreign liquor which accepted provisionally should be rejected and the auction be held again. The Collector Allahabad has not thought it reasonable to put any emphasis on the fact that re-auction should be held after inviting tender (applications) for the same.

I considered all the aspects of this matter. The bids received at the auction of all these shops of Tehsil Chayal. Tehsil Phulpur, Tehsil Sirathu and Tehsil Sorab accepted by the District, Collector are not sufficient. The details of the result of the auction given above held in neighbouring districts go to support this opinion of mine. There had been no considerable increase in the licence fees of excise shops of Allahabad District last year on the basis of which it could have been inferred that this is the reason of receiving bids of less amounts for the year 1983-84. The numbers of the licence fees of the last 5 years are as follows :-

Year Increment Percentage

1978-79 1,52,84,988 -

1979-80 1,70,40,100 11-1 percent

1980-81 2,23,67,107 31-3 percent

1981-82 2,76,72,550 23-7 percent

1982-83 3,30,34,950 19-4 percent

I am fully satisfied on the basis of the above information that bids of sufficient amounts have not been received pertaining to the shops in question. Therefore, I disapprove all the bids received at the