1. The State of Andhra Pradesh represented by the Collector, East Godavari, Kakinada, the defendant in the lower Court, is the appellant in this appeal. The plaintiff is the respondent. The plaintiff was the licensed renter for the toddy shops in the villages of Palacherla and Kolamuru for the year 01-10-1947 to 30-09-1948. According to the terms of the auction, the toddy shops had to be located on an unobjectionable site in the 'gram kantam' of the respective villages. But as the plaintiff was not able to obtain a suitable site in the 'grama kantam' of the village of Palacherla, he located the shop of that village at a place outside the 'grama kantam'. Therefore, his licence for the Palacherla shop was withdrawn by the Collector of Abkari on 24-06-1948, further, purporting to act under clause 37 of the licence, the Collector