1983 Supreme(Ker) 243

Judges : K.BHASKARAN,PARIPOORNAN
ISSAC - Appellant
Versus
ASSISTANT EXCISE COMMISSIONER - Respondent
Case No : O.A. No. 2325 of 1981-I
Decided On : 11/14/1983
Advocates Appeared :
K.K. Venugopal; P.C. Chacko; Anil Diwan; S.A. Nagendran; For Petitioners Dr. George Mathew Kalapurackal; For Respondents

Headnote:

Kerala Abkari Shops (Disposal in Auction) Rules, 1974 - Interpretation of sub-rules (1) and (3) of R.8 - Monthly quota of arrack announced at the time of auction - Additional quantity of arrack to be supplied on payment of commission - Discretion of Assistant Excise Commissioner - Statutory obligation to permit issue of arrack in excess of announced monthly quota - Conditions in the Licence granted to the petitioner - Petitioner's right to claim and duty of excise authorities to permit issue of arrack in excess of announced monthly quota - Unreasonableness and arbitrariness in action of authorities - Maintainability of writ petition - Principles of promissory estoppel - Prohibition against recovery of kist amounts by coercive steps until proper determination of quantum thereof.

Fact of the Case:

The petitioner, a successful bidder of arrack shops in Sultan's Battery Range and Kalpetta Range in Wynad District for the financial year 1981-82, challenged the interpretation of sub-rules (1) and (3) of R.8 of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974, by the respondents. The petitioner contended that the respondents had a statutory obligation to permit the issue of arrack in excess of the announced monthly quota to meet the local demand, and that their failure to do so amounted to a breach of contract. The respondents, on the other hand, argued that the Assistant Excise Commissioner had the discretion to determine the quantum of additional arrack to be supplied, and that the petitioner could not insist on a specific quantity. The petitioner also raised the plea of promissory estoppel, arguing that the respondents' promise to supply sufficient arrack had induced him to bid at the auction.

Finding of the Court:

The Court held that the Assistant Excise Commissioner had a statutory obligation to permit the issue of arrack in excess of the announced monthly quota, and that this obligation was not subject to his discretion. The Court also found that the respondents had failed to fulfil their statutory obligations, and that the petitioner was entitled to invoke the extraordinary jurisdiction of the Court under Art.226 of the Constitution for enforcement of his legal rights. The Court further held that the petitioner's claim was not barred by the principle of promissory estoppel, as the respondents had not made any specific promise to supply a particular quantity of arrack.

Issues: 1. Whether the Assistant Excise Commissioner had the discretion to determine the quantum of additional arrack to be supplied, or whether he had a statutory obligation to permit the issue of arrack in excess of the announced monthly quota to meet the local demand. 2. Whether the petitioner could insist on a specific quantity of additional arrack. 3. Whether the respondents' failure to supply sufficient arrack amounted to a breach of contract. 4. Whether the petitioner was entitled to invoke the extraordinary jurisdiction of the Court under Art.226 of the Constitution for enforcement of his legal rights. 5. Whether the petitioner's claim was barred by the principle of promissory estoppel.

Ratio Decidendi: 1. The Court held that the Assistant Excise Commissioner had a statutory obligation to permit the issue of arrack in excess of the announced monthly quota, and that this obligation was not subject to his discretion. The Court relied on the provisions of S.18A and 24 of the Abkari Act, 1 of 1077, and R.6, sub-rule (1) and (3) of R.8 and R.10 and 14 of the Rules, which, when read together, gave the petitioner the right to claim, and the excise authorities the duty to permit, issue of arrack in excess of the announced monthly quota as contemplated in the latter part of the sub-rule (1) of R.8 of the Rules. 2. The Court held that the petitioner could insist on a specific quantity of additional arrack, as the special condition No.1 under Clause.40 of the Licence granted to him stated that the Assistant Excise Commissioner would permit issue of arrack in excess of the announced monthly quota on payment of such commission as may be determined by the Board of Revenue, subject to the condition that it would not be less than Rs. 3.50 per litre. 3. The Court held that the respondents' failure to supply sufficient arrack amounted to a breach of contract, as the petitioner had a contractual right to receive the additional quantity of arrack, and the respondents had failed to fulfil their part of the obligation. 4. The Court held that the petitioner was entitled to invoke the extraordinary jurisdiction of the Court under Art.226 of the Constitution for enforcement of his legal rights, as the respondents' failure to supply sufficient arrack was a violation of his statutory rights, and the petitioner had no other adequate remedy to enforce those rights. 5. The Court held that the petitioner's claim was not barred by the principle of promissory estoppel, as the respondents had not made any specific promise to supply a particular quantity of arrack. The Court noted that the respondents' promise to supply sufficient arrack was too vague and uncertain to create a legally enforceable obligation.

Final Decision: The Court allowed the writ petitions and issued a writ of prohibition restraining the respondents from recovering by coercive steps the kist amounts alleged to be due from the petitioner until and unless the quantum thereof is properly determined at a reasonable and fair basis, according to law, and in the light of the observations contained in the judgment. Revenue recovery proceedings, if any, initiated shall stand quashed in the light of the above directions and observations.