Notification for holding re-auction of shops not challenged.

V. Dhanapalan, J.

The respondents in W.P. No.12661 of 1993, aggrieved by the order dated 04.09.1997 passed by a learned Single Judge in the said writ petition, have preferred this writ appeal.

2. The facts, in brief, leading to the present writ appeal are, as under and the parties are referred to as per their ranking in this writ appeal.

The respondent was a licencee to run nine arrack shops and five toddy shops in Vilavancode Taluk. For the excise year 1982-83, on his failure to remit the monthly kist for November 1982 for five arrack shops and five toddy shops, the third appellant had sent a show-cause notice to the respondent asking as to why his licences should not be cancelled and also as to why re-auction should not be conducted. Since there was no reply from the respondent, the authorities cancelled the licences and notified resale of shops on 211. 1982. Meanwhile, the respondent filed O.S. No.605 of 1982 before the District Munsif, Kuzhithurai, seeking an order of injunction and got an order of interim injunction. However, the suit was dismissed subsequently with a direction to the respondent to remit the entire arrears of rent before 23.01.1983 and the third appellant sent a notice on 06.09.1983 directing the respondent to remit a sum of Rs.4,07,500/-before 23.01.1983 failing which the appellants could proceed as per Rules. When the matter was taken up by the respondent before this Court, by an order dated 11.09.1991 in W.P. No.1951 of 1983, this Court quashed the said notice issued by the third appellant. The writ appeal preferred by the appellants challenging the order in the said writ petition was also dismissed but with a direction to the first appellant to conduct an enquiry afresh as regards their claim and to decide the case of the respondent after affording him an opportunity of hearing. Accordingly, after complying with the said direction, the first appellant, by his order dated 06.05.1993, holding that the respondent is liable to make good the loss of Rs.4,07,500/-to the Government, directed the third appellant to recover the same from the respondent and this order of the first appellant was under challenge in the writ petition before the learned Single Judge.

3. The learned Single Judge, though admitted that the respondent had committed default in payment of kist, came to the conclusion that the appellants had not complied with the provisions contained in Rules 5 and 21 of the Tamil Nadu Toddy and Arrack Shops (Disposal in auction) Rules, 1981 (in short "the Rules") with regard to re-auction, and by relying on a judgment of the Supreme Court in the matter of State of Haryana vs. Jage Ram reported in (1983) 4 SCC 556, held that the respondent cannot be mulcted for the loss incurred by the Government because of non-compliance of relevant rules by the appellants and accordingly, allowed the writ petition.

4. Challenging the order passed by the learned Single Judge in the writ petition, the respondents in the writ petition have preferred this appeal.

5. Mr. G. Sankaran, learned Additional Government Pleader, has contended that the respondent was at default in making payment of kist and hence, attempts were made to conduct re-auction; but, when the respondent, had, time and again, thwarted the attempts made by the appellants in the collection of computed loss by resorting to various legal proceedings, the learned Single Judge ought not to have allowed the writ petition by holding that the appellants have not complied with the relevant rules in regard to re-auction, particularly when Notification on re-auction was not at all challenged in the writ petition. It is also his strenuous contention that the learned Single Judge has gone wrong in placing reliance on the judgment of the Supreme Court reported in (1983) 4 SCC 556 which is not applicable to the facts of the case on hand.

6. In support of his contention that the Government is not powerless to recover loss from the licensees in default on resa