Decided on March 10,1981

SHESH RAM Appellant
STATE Respondents


H.S.THAKUR,J. - (1.)The appellant filed a writ petition in this Court praying for the cancellation of the auction of excise licences, held on 28 -3 -1980, pertaining to Mandi district, for the financial year 1980 -81. The writ petition was, however, dismissed by the learned Single Judge on 24 -12 -1980. Aggrieved by the said decision the appellant has preferred this Letters Patent Appeal.
(2.)The relevant facts may be stated. In pursuance to the announcement made by respondents 1 to 3, excise licences of various categories pertaining to Mandi district were to be auctioned unit -wise for the financial year 1980 -81, that is, for the period 1 -4 -1980 to 31 -3 -1981. The auction of such licences were originally held on 19 -3 -1980. The appellant also took part in this auction and was the highest bidder for as many as 24 units. The bids as given in the said auction were submitted to the Financial Commissioner (Excise) for his approval. The Financial Commissioner, however, refused to confirm the bids, except for tehsil Karsog, being of the view that the revenue fetched was inadequate. Consequently, the excise licences for the remaining tehsils were ordered to be re -auctioned on 28 -3 -1980. The respondents 1 to 3 believed that there had been some pooling amongst the various bidders and on that account the bids remained on the lower side, except for Karsog tehsil. Accordingly decision was taken by the Financial Commissioner (Excise) on 27 -3 -1980 and formal sanction was accorded under Rule 5.38 (5) of the Punjab Liquor Licences Rules, 1932 (as applicable to Himachal Pradesh) that in case exigency arose the auction of licences could be held on 28 -3 -1980. on tehsil -wise basis. As such, initially bids were taken unit -wise, but due to pooling device of the excise licencees, the bids were again not only inadequate, but in majority of cases no bids at all were given. Consequently the auction had to be held on tehsil -wise basis.
(3.)It is contended by Shri M. L. Sharma that the learned Single Judge has gravely erred in dismissing the writ petition. It is vehemently argued by him that the tehsil -wise auction of the licences is not only contrary to the announcements made but also against the excise rules. He has also contended that the auction of the authorities smacks of mala fides and was a device to throw out the appellant from the business. He has drawn our attention to the announcement made for holding auctions on 28 -3 -1980 and has stressed that the auction could only be held unit -wise and not tehsil -wise. He has pointed out that the appellant and other small contractors like him, were taken by surprise when the bids were invited on tehsil -wise basis. At any rate, according to the appellant, they had not come prepared to bid on that basis and believed that they could bid for the units of their choice. It is further contended that according to Rule 5.38 of the Punjab Liquor Licences Rules, 1932 (Excise Rules in short) the Collector had to give a timely notice of the date and place of the auction and had also to specify the conditions to which the auction will be subject. However, in the auction to held no timely notice was so given that the auction would be held on tehsil -wise basis. He has specifically referred to sub -rule (5) of Rule 5.38 of the Excise Rules. It is convenient to reproduce the same : "He will then proceed to put up each shot to auction after carefully explaining its locality. The auction of two or more shops at one time requires the sanction of the Financial Commissioner in each case." Relying on this sub -rule, it is strenuously contended by the learned counsel that each shop bad to be auctioned separately and not all the shops together within a tehsil. It is further contended that even if it is assumed that the auction of two or more shops could be held at one time in terms of the orders of the Financial Commissioner, separate sanction had to be obtained in each case. It is also contended that in any event licences for L -l and L -10 vends could not be auctioned with other units but had to be auctioned separately in terms of the announcement made.

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