IMPORTANT POINT
Settlement and issue of licence - Distinction.

JUDGMENT

Dipak Misra, J.:-Leave granted.

2. The pivotal issue that emerges for consideration in this appeal is whether the Division Bench of the High Court of Judicature at Patna has correctly interpreted the effect and impact of the Bihar Excise (Settlement of Licences for retail sale of country/spiced country liquor) Rules, 2004 (for short “the Rules”) and the sale notification published by the Collector of Kishanganj in Excise Form 127 for various excise shops in groups in the said district for the year 2006- 07 and the terms of licence.

3. As the factual matrix would exposit, the Collector, Kishanganj, got the sale notification in Excise Form 127 issued for settlement of various excise shops in various groups in the district of Kishanganj for the financial year 2006-07 which stipulated that the settlement shall be made on 23rd March, 2006 on auction-cum-tender basis and, accordingly, applications were invited from interested persons. As the settlement could not be effected in respect of group ‘ka’ shops in the said district, the Collector issued a second notification on 17th May, 2006 for the said group ‘ka’ which consisted of six country spirit shops and three spiced country spirit shops. On 5th June, 2006, the group ‘ka’ excise shops were settled in favour of the respondent at a monthly licence fee of Rs.8,29,600/-. The respondent deposited the advance security of Rs.8,29,594/- on 7th June, 2006 and further Rs.8,29,600/- on 22nd June, 2006. The Collector, Kishanganj moved the Commissioner for his approval and the same was granted on 1st July, 2006 in the office of the Collector on 5th July, 2006 and on that day itself, the licence was issued in favour of the respondent- licencee. It is the case of the appellant that as the respondent did not deposit the requisite 1/4th amount of the annual licence fee as advance security as prescribed under the Rules but did so in three instalments, there was delay in obtaining the approval from the Excise Commissioner in terms of Rule 17(kha) of the Rules. Despite the delay in the payment of the advance deposit, the Collector had recommended his case for approval and, eventually, the Commissioner approved the grant of licence in respect of group ‘ka’ shops and, ultimately, the licence was issued, as stated earlier, on 5th July, 2006.

4. As there was breach of the conditions of the licence, a demand was raised for the period commencing 5th June, 2006 to 5th July, 2006 by the Excise Superintendent, Araria-cum-Kishanganj on 27th March, 2007. On receipt of the demand notice, the respondent moved the Excise Superintendent on 29th April, 2007 asking him to withdraw the demand on the ground that he had not utilized the privilege during that period. Thereafter, he challenged the demand notice before the Excise Commissioner, who rejected the application vide order dated 18th September, 2008. Being grieved by the said order he moved the High Court invoking the writ jurisdiction in CWJC No. 16577 of 2008.

5. The High Court referred to Rules 16, 17, 20, 22 and 24 and recorded its opinion in the following manner: -

“That group of shops have been settled in favour of the petitioner in the midst of excise year, is not in dispute. It is also a fact that on 5th June, 2006, the bid made by the petitioner for group ‘ka’ excise shops of Kishanganj District was highest and accepted by the auctioning authority by such acceptance is subject to approval of the Excise Commissioner. There also does not seem to be any dispute that there was some default on the part of the petitioner in payment of the advance security amount. However, the default seems to have been condoned as despite the said default, his bid dated 5th June, 2006 was not cancelled and licence was issued in Form 26C of the Rules on 5th July, 2006. Rules 16 and 17 of the Rules, when read together, would show that the final acceptance of the bid by the auctioning authority, by itself, does not entitle the bidder to get the licence as the said bid h