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Andhra Pradesh High Court
Judges : CHANDRASEKHARA SASTRI, JAGMOHAN REDDY
Raghunandhan Reddy - Appellant
Versus
State of Hyderabad through Secy.of Government, Revenue Dept. - Respondent
Decided On : 01-17-62
AUCTION - CONTRACT - WITHDRAWAL OF OFFER - LIMITATION - HYDERABAD ABKARI ACT, 1316 F. - SECTIONS 3, 4, 15 - HYDERABAD INTOXICATING DRUGS ACT, 1333 F. - SECTION 5 - INDIAN OPIUM ACT, 1878 - SECTION 5 - SUITS AGAINST GOVERNMENT ACT, V OF 1320 F. - REPEALED BY ACT V OF 1955.
Fact of the Case:
The appellant, the highest bidder in an auction for the lease of country liquor shops, sought to withdraw his offer after the auction was adjourned due to objections raised by intending bidders regarding the imposition of Sabucha tax on toddy brought into the city. The Excise Commissioner, acting under Clause 10 of the proclamation of auction sales, set aside the auction and directed its reauction without the imposition of Sabucha tax. The appellant filed a suit for a perpetual injunction against the Government and for the return of the deposit amount, contending that the auction was not final and that he was entitled to withdraw his offer. The lower court dismissed the suit, holding that the auction was complete and that the appellant was liable for the loss sustained in the reauction.
Finding of the Court:
The court held that the auction was not final and that the appellant was entitled to withdraw his offer. The court found that Clause 10 of the proclamation of auction sales, which reserved the right of the Excise Commissioner to suspend or revoke the approval of the auction within one month from the date of approval, made the acceptance of the bid provisional and not final. The court also held that the suit was within the period of limitation prescribed under Section 41 of the Hyderabad Abkari Act, 1316 F., as the period spent in agitating the matter before the Revenue Minister could be taken into account.
Issues: 1. Whether the auction was final and binding on the appellant. 2. Whether the appellant was entitled to withdraw his offer. 3. Whether the suit was barred by limitation under Section 41 of the Hyderabad Abkari Act, 1316 F.
Ratio Decidendi: 1. The court held that the auction was not final and that the appellant was entitled to withdraw his offer, relying on the following principles: - An offer can be withdrawn at any time before its acceptance is complete. - An acceptance is not final if it is conditional or provisional. - Clause 10 of the proclamation of auction sales, which reserved the right of the Excise Commissioner to suspend or revoke the approval of the auction within one month from the date of approval, made the acceptance of the bid provisional and not final. 2. The court held that the suit was within the period of limitation prescribed under Section 41 of the Hyderabad Abkari Act, 1316 F., as the period spent in agitating the matter before the Revenue Minister could be taken into account.
Final Decision: The appeal was allowed, the judgment and decree of the lower court were set aside, and the appellant's suit for a perpetual injunction and for the recovery of the deposit amount paid by him was decreed with costs.
( 1 ) IN this appeal, the appellant seeks to challenge the Judgment and decree of the lower Court dismissing the suit filed by him for a perpetual injunction against the Government and for the return of the deposit amount of Rupees 2,949/- as earnest money.
( 2 ) IT appears that the Government in the Excise Department notified the sale by auction of the leasehold rights for 1364 F. of country liquor shops at Akbarjah Bazaar, Malakunta and Sultan Bazar localities in Hyderabad City to be held on 18-8-1954. The toddy or sendhi auctions for the same year were fixed for 23-8-1954. On the date fixed for the auction of country liquor, objections were raised by the intending bidders before the Deputy Excise Commissioner who was the auctioning Officer authorised under the rules that the auction notifications for the country liquor do not specify whether the Sabucha tax is leviable on the toddy brought into the city or not. It may be stated that Sabucha tax is a tax of Rs. 7-8-0 imposed by the Government on each pot of toddy or sendhi of 40 seers on its entry into the City of Hyderabad. The bidders stated that they sought this clarification from the Deputy Commissioner before the auction started, because the imposition or otherwise of this tax is bound to affect the liquor sales. It is alleged that the Deputy Commissioner accepted this objection and adjourned the liquor auctions to 24-8-1954 by which date the sale of sendhi shops would have been held and the matter would have been by then clarified. Thereafter on 23-8-1954, the sendhi shop leases were auctioned subject to the sendhi contractors paying Sabucha tax and the next day, the country-liquor shops were auctioned on the basis of the Sabucha tax being levied on Sendhi. Plaintiff being the highest bidder, his bid was accepted and he deposited an amount of Rupees 2,949/ -. Thereafter on 4-9-1954, the Excise Commissioner, purporting to act under Clause 10 of the proclamation of auction sales, set aside the auction held on 23-8-1954 an directed their reauction on 15-9-1954 without the imposition of Sabucha lax. Immediately thereafter on 7-9-1954, the plaintiff filed a petition before the Excise Commissioner saying that the auctions for toddy now directed to be held not subject to Sabucha tax are likely to affect, the liquor sales, inasmuch as Sendhi would be sold at a cheaper rate and the demand for liquor would correspondingly be decreased. He accordingly prayed that the shop rentals may be scaled down, but if the Excise Commissioner was not prepared to this, his offer must be deemed to be with drawn and the auction revoked. The Excise Commissioner did not accept this stand taken by the appellant and by his letter Ex. P. 1 dated I5-9-1954 informed the appellant with reference to his application dated 7-9-1954 that his petition is not acceptable and in case of his failure to rent the shops in accordance with the rules and regulations and to pay to the Government amounts in time, proceedings will be taken against him. By Ex. P. 6, dated 17-9-1954, he further informed the Deputy Commissioner that the petitioners prayer was incorrect and as such he was directed to take action as per rules. Pursuant to these directions, the shops were re-auctioned at a loss of Rs. 31,9837- and the appellant was required by a notice dated 13-10-1954 to pay this amount within two weeks, which notice, according to the appellant, was received by him on 17-11-1954. Immediately thereafter a petition was filed before the Honble Minister for Excise on the same day praying for the cancellation of that order and for directing the Excise Commissioner not TO collect any moneys as claimed. The Minister gave a stay order, but the matter was finally disposed of only on 23-8-1955 rejecting the appellants contention. The Minister by the said order gave three months time from that date staying the demand made on the petitioner at his request that if that time was given for filing a civil suit, he win file a suit
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