The penal consequences mentioned in rule 20 of the Andhra Pradesh Excise (Lease of Right to sell liquor in Retail) Rules, 1969, are not applicable to violations of rule 16.

CHENNAKESAV REDDY, J.

( 1 ) A question of considerable importance and general interest is raised in these writ petitions. The question is what are the penal consequences attendant on the auction-purchaser for infringment of the conditions imposed by rule 16 of the Andhra Pradesh Excise (Lease of Right to sell liquor in Retail) Rules, 1969, (hereinafter referred to as the rules )? when one of (he writ petitions viz. , W. P no. 2370 of 1978, came up for hearing before Jeevan Reddy, J. , he doubted the correctness of the earlier decision of this court on the question to the effect that "no penalty is visited" on the auction- purchaser for violation of the conditions imposed by rule 16. This view was expressed by Chinaappa Reddy, J. (as he then was) in Writ Petition No. 4747 of 1975 on 4th November, 1975 and by Jeevan reddy, J. himself in W. P. No. 4137 of 1978 affirming the view expressed by Chinnappa Reddy, I. So he referred the case to a Division Bench for an authoritative pronouncement having regard to the importance of the question involved in the case. Consequently, this writ petition (W. P. No. 2370 of 1978) and another writ petition, in which the same question is involved have been placed before us.

( 2 ) BEFORE proceeding to consider the question it would be advantageous to appreciate the question if the facts in one of the writ petitions are set out. We shall refer to the facts in W. P. No. 2370 of 1978. In the auctions held for the excise year 1970-71, the writ petitioner Veeramallu Chennakesavulu, was the highest bidder in respect of the Lingamgatta arrack shop at the auction held on 27th October, 1970. His bid in a sum of rs. 300 was accepted by the auctioning authority. Immediately, after the acceptance of the bid, he did not pay the earnest money on the day of the auction. The shop was therefore, put to re-auction. But no bidder turned up to take the shop. Treating the petitioner as a defaulter, a demand notice was issued for the realisation of a sum amounting to Rs. 3,000 and odd, which included the monthly rental and the cost of the Minimum guaranteed quota (M. G. O.) for the excise year 1970-1971. The petitioner has filed this writ petition seeking a writ of mandamus directing the excise authorities to forbear from seeking to collect the excite arrears in respect of the Lingamgutta arrack shop for the excise year 1970-1971.

( 3 ) THE principal and the main contention of the learned Counsel for the petitioner is that the only consequence of violation or non-compliance with the conditions laid down in rale 16 by an auction-purchaser immediately after the acceptance of the bid, is re-auction of the shop and nothing more and nothing less. According to the learned counsel, the consequences of re-auction at the risk of the original auction-purchaser, if the re-auction results in monetary loss, are the consequences under rule 20 of the rules for failure to comply with the conditions laid down in rule 18 and the consequences mentioned in rule 20 are aot attracted for violation of the conditions mentioned in rule 16. On the other hand, the learned Government Pleader pleads that rules 16, 18 and 20 must be read together and if they are so read, the risk of re-auction at the expense of the original auction- purchaser cannot be escaped even for non- compliance with the conditions laid down in rule 16. It, therefore, becomes necessary to read rules 16, 18 and 20 of the rules. Rules 16,18 and 20 of the rules read as follows:-"16. Payment of rental by the auction purchaser-The auction-purchaser shall pay 2 per cent of the annual rental as earnest money together with one month s rental on the day of the auction immediately after the acceptance of the tender or hid as the case may be. The earnest money and one month s rental shall be in addition to the rental deposit required in rule 18. In case of failure to remit the earnest money if any and one month s rental on that day, the shop or group of shops shall be re- auctioned. 17

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