JUDGMENT

SEN, J.:— These appeals on certificate are directed against the judgment and orders of the Punjab High Court dated November 19, 1969 allowing the writ petitions filed by the respondents and quashing the impugned notices of demand for recovery of the difference between the amount which they had agreed to pay under the terms of auction of a liquor vend and the amount realized on re-auction of the vend, as also the defaulted instalments of the licence fee payable in respect of a liquor vend issued under Sec. 60 of the Punjab Excise Act, 1914 (Act for short).

2. Put very shortly, the essential facts are these. On March 11, 1969, the Deputy Excise & Taxation Commissioner, Hissar held an auction for granting the right to sell country liquor for Mandi Dabwali for the year 1969-70 at the Collecterate. At the commencement of the auction, the Deputy Excise & Taxation Commissioner had read out the auction announcements and conditions of auction as required under R. 36 (4) of the Punjab Liquor Licence Rules, 1956 (Rules for short). The respondents M/s. Lal Chand Bal Raj etc., offered the highest bid of Rs. 10,11,000 and their bid was provisionally accepted by the Deputy Excise & Taxation Commissioner and they were declared to be the highest bidder as required under R. 36 (2) of the Rules. Subsequently, the bid was accepted by the Excise & Taxation Commissioner exercising the powers of the Financial Commissioner on March 21, 1969 as required under R. 36 (22) of the Rules. The respondents however failed to deposit Rs. 50,550 as security amount as required under R. 36 (22A) and thereby contravened condition No. 15 (i) of the condition of auction and R. 36 (23) of the Rules. They were accordingly served with a notice dated April 9, 1969 by the Deputy Excise & Taxation Commissioner requiring them to show cause why the licence for country liquor vend, Mandi Dabwali should not be put to re-auction under R. 36 (23A) of the Rules and the deficiency in price and all expenses of such re-auction recovered from them in the manner laid down in Section 60 of the Act. In response to the same, the respondents by their letter dated April 12, 1969 tried to wriggle out of their contractual obligations by saying that before the auction it was announced that no wine shop shall be opened within a radius of three miles of liquor vend, Mandi Dabwali, but across the border the State Government of Punjab had sanctioned the establishment of a liquor shop at village Killianwali which was hardly 21/2 miles from the State border and this would mean that there would be two country liquor shops - one at Mandi Dabwali in the Stare of Haryana and the other at village Killianwali in the State of Punjab and this was in breach of condition No. 13 (iii) read with R. 37 (8B) of the Rules, as applicable to the State of Haryana. Upon this basis the respondents represented that before requiring them to deposit the security amount, they should be given an assurance that no other liquor shop would be opened.

3. Although in the show-cause notice, the respondents were intimated that in case they desired to be heard in person, they should appear before the Deputy Excise & Taxation Commissioner at Chandigarh on April 14, 1969, but none of them turned up on that date. On the same day, the Deputy Excise & Taxation Commissioner rejected the representation of the respondents and directed re-sale of the licence for retail vend of the country liquor shop at Mandi Dabwali for the year 1969-70 under R. 36 (23) of the Rules. The respondents have purposely kept back the reply that they received from the Deputy Excise & Taxation Commissioner conveying the rejection of their representation which intimated to them that the licence for retail vend of country liquor shop at Mandi Dabwali would be re-auctioned on April 23, 1969 at the Collectorate, Hissar. By his letter dated April 15, 1969 addressed to all the Excise & Taxation Officers in the State, the Deputy Excise & Taxation Commissioner fo