SUPREME COURT OF INDIA
A.N.Ray : M.H.Beg : P.N. Shinghal : R.S.Sarkaria
Thakur Prasad Sao: Ayodhya Prasad: Rajendra Prasad
Versus
Member, Board Of Revenue: State Of Bihar: State Of Bihar
Case No. : 819 , 823 of 1975
Date of Decision : 12/18/75
Advocates Appeared: Bihar A.G. : Parsad S.N. : Prasad Basudev : Singh Balbhadra Prasad : Singh Udaipratap
Excise Act, 1915 – Sections 22, 39, 30, 42, 43, 44, 45 and 29 - Auction Of Licenses – Bidding - These ten appeals against two judgments of high court of judicature raise some common questions of law - They have been argued together and we shall examine them in this common judgment - Civil arise out of a common judgment in a bunch of civil writ petition - Civil Appeals arise out of a common judgment in another bunch of civil writ petition while civil appeal is directed against aforesaid judgment by which civil writ petition giving rise to it was also disposed of by high court along with other petitions - Certificates of fitness have been granted for all appeals - There is no controversy in regard to some of basic facts and they are quite sufficient for disposal of appeals - A sale notice was published by authorities concerned for auction of licenses to open country liquor shops with effect including an out still shop - Appellant gave highest bid which was knocked down in his favour and he deposited two months license fee in advance at rate – Held, Where for example it is proved that collector has not fulfilled his duty in refusing to allow manifestly speculative bids and has failed to stop bidding when a figure has been reached which under normal conditions might be expected to return a reasonable rate of profit to vendor question would be whether action of collector was so flagrantly opposed to principles enunciated from time to time by government as to necessitate remedial action - Such action should not take form of any promise of resettlement with existing licensees - It can only take form of a reduction in amount of existing licensees - It should not be very difficult for an officer in a contract supply area to realize stage at which bidding becomes purely speculative - He knows issues of spirit during previous year and cost to vendor including duty carriage establishment charges and like and should thus be able to estimate figure beyond which a prudent man would not bid - If after warning bidder that this point has been reached latter still wishes to take risk no case for remission can arise - Appeals are dismissed.
P.N.SHINGHAL, J.
(1) THESE ten appeals against two judgments of the High court of Judicature at Patna raise some common questions of law. They have been argued together, and we shall examine them in this common judgment. Civil Nos. 824-827 of 1975 arise out of a common judgment dated 2/01/1975 in a bunch of civil Writ Petition; Civil Appeals Nos. 819-823 of 1975 arise out of a common judgment dated 15/03/1975 in another bunch of civil Writ Petition; while Civil Appeal No. 1105 of 1975 is directed against the aforesaid judgment dated 2/01/1975 by which the civil writ petition giving rise to it was also disposed of by the High court along with the other petitions. Certificates of fitness have been granted for all the appeals. There is no controversy in regard to some of the basic facts and they are quite sufficient for the disposal of the appeals.
(2) A sale notice was published by the authorities concerned for the auction of licenses to open country liquor shops in Singhbhum district with effect from 1/04/1966, including an outstill shop at Bharbharia. Appellant Ayodhya Prasad gave the highest bid which was knocked down in his favour, and he deposited two months license fee in advance at the rate of Rs. 3,650.00 per month. He applied on 22/03/1966 to the Kolhan Superintendent of Singhbhum to settle a piece of land for establishing an outstill shop at Bharbharia, but the application was rejected on 27/09/1966 because of the objection raised by some members of the District Consultative Committee. The villagers of Bharbharia also opposed the opening of the outstill shop. The shop could not therefore be established there. The appellant however obtained a piece of land in village Chittimitti and applied on 30/07/1966 for permission to open the outstill shop there. This was allowed and the appellant claimed that he began to collect the necessary material but a mob forcibly removed the building and the distillation material. He filed a report with the police about the incident. The approval for opening the outstill shop at Chittimitti was however withdrawn on 6/10/1966 and the appellant was asked to pay the monthly license fee for the period April 1, 196 6/01/1967. He denied his liability to pay the fee and claimed a refund of the money which had been deposited by him. His case was recommended by the Collector for remittance of the licence fee amounting to Rs. 43,800.00 for the entire year 1966-67. He also made an application to the Commissioner of Excise for refund of the deposit of Rs. 7,300.00 and for payment of compensation for loss of anticipated profits and damages, but the application was rejected. It appears that the appellant went on bidding at the bids for the subsequent three years, and laid similar claims for refund and damages, but to no avail. He then filed the bunch of writ petitions referred to above, for quashing the demand notices, but they have been dismissed as aforesaid by the High courts judgment dated 2/01/1975. Civil No. 825 relates to the bid for 1966-67, Civil No. 824 relates to the bid for 1967-68, while Civil Nos. 826 and 827 relate to the bids for 1968-69 and 1969-70. These may be said to be Group A appeals.
(3) CIVIL Nos. 819-823 of 1975 relate to the applications of appellants Thakur Prasad Sao and others for reduction of~the license fees for outstill liquor shops at Gua, Noamandi, Kiriburu, Andhari, Goiekera, Patajai and Dangusposi for 1974-75. In these cases the licensees were T. P. Sao or his relations or employees. They claimed that they incurred a loss of Rs. 55,874.79 at Gua, of Rs. 2,66,651.45 at Noamandi, of Rs. 39,389.53 at Kiriburu, of Rs. 35,169.40 at Andhari, of Rs. 11,649.87 at Goiekera, of Rs. 11,705.95 at Patajai and of Rs. 11,657.21 at Dangusposi.
(4) THE appellants claimed that there was rivalry and enmity with Bishwanath Prasad and his brother who made speculative bids at the auction, as a result of which the outstill shops were settled for uneconomic amounts
followed on : Nashirwar v. State of M. P.
Har Shankar v. Deputy Excise and Taxation Commr.
distinguished : Rohtas Industries Ltd. v. S. D. Agarwal
REFERRED TO : Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi
Laljee Dubey v. Union of India
Union of India v. K. P. Joseph
Raman And Raman Ltd. v. State of Madras
R. Abdulla Rowther v. S. T. A. T.
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