O. Chinnappa Reddy, J. - (1.) Apparently there is big money in the liquor business. When, at the close of the hearing on Friday 18th April, 1980, we asked M/s. Kacker and Mridul whether their clients were prepared to deposit or furnish security in a sum of Rs. 35 lakhs in order to guarantee that the bids at a re-auction, if so ordered, would so start that their aggregate would be not less than Rs. 35 lakhs, they agreed with alacrity. We asked the question as we wanted to satisfy ourselves about their bona fides. On a request made on April 20, 1980, we have given them a week's time to give security to the satisfaction of the Commissioner of Excise, Hyderabad.
(2.) On August 20, 1979, a notification was published in the District Gazette, Hyderabad, by the Commissioner of Excise, Andhra Pradesh, giving notice of a proposal to hold an auction, from September 1, 1979 to Sept. 3, 1979, of the right to sell arrack in retail in respect of 78 arrack shops in the twin cities of Hyderabad and Secunderabad during the Abkari year, October 1, 1979 to Sept. 30, 1980. The notification was published under R. 4 of the Andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail) Rules, 1969, made in exercise of the powers conferred upon the Government by S. 72 read with Ss. 17, 29, 31 and 64 of the Andhra Pradesh Excise Act, 1968. The notification mentioned that 22 out of the 78 shops would be auctioned in ten groups of two and three shops, while the remaining 56 shops would be auctioned individually. This was according to the pattern which obtained for the year 1978-79 for which year the auction fetched, an aggregated monthly rental of Rs. 32,99,537.72 ps. On account of some representations made by excise contractors in regard to some conditions regarding the bottling of arrack, the auction was postponed to September 7, 1979. The first auction was held on September 7, 1979, when no bids were received for the arrack shops. A second auction was held on Sept. 12, 1979 and again there were no bids. On Sept. 19, 1979, no auction could be held as all the bidders walked out. On September 21, 1979, the Collector (the auctioning authority) followed a peculiar procedure. First he auctioned 34 arrack shops in Hyderabad city individually and the bids fetched an aggregate of Rupees 6, 49, 700 (monthly rental). Then he put the 34 shops to auction as a single lot but there was no bid. Similarly he auctioned the arrak shops of Secunderabad city individually and they fetched an aggregate bid of Rs. 6,02,2100 (monthly rental). He then put the 44 shops to auction as a single lot but there was no bid. Thereafter he put the entire lot of 78 arrack shops to auction as a single lot. There was no bid. There was a tender but the tender had to be rejected as the tenderer was not present in the auction hall even after an announcement was made on the microphone and the auctioning authority waited for a considerable time. The auction was then postponed to Sept. 22, 1979 and on that day, the same peculiar procedure was repeated. The 34 shops of Hyderabad city when auctioned individually fetched bids aggregating to Rs. 6,75,000. There were also tenders. The aggregate of the highest bid or tender for the different shops came of Rs. 7,70,060/55 ps. The 44 shops in Secunderabad city were then auctioned individually. The aggregate of the bids came to Rs. 8,30,000. There were tenders also. The aggregate of the highest bid or tender for the different shops came to Rs. 10,82,885,27. Thereafter 34 shops of Hyderabad city were auctioned as one lot and there was a bid for Rupees 8,00,000 and a tender for Rupees 10,55,229. Similarly the 44 shops in Secunderabad city were auctioned as one lot and the maximum bid was Rupees 13,50,000 while two tenders were received, the highest of which was Rs. 14,11,111. The Collector then auctioned all the 78 shops as one lot. The highest bid was Rs. 24,00,000 while there were two tenders for Rs. 15,11,111/11 and Rupees 25,55,555/55. The tender for Rupees 25,55,555/55 for all 78 shops was accepted.
(3.) 17 persons who were lessees of the arrack shops in the twin cities during the year 1978-79 filed two Writ Petitions in the High court of Andhra Pradesh questioning the auction held on Sept. 21, 1979, and Sept. 22, 1979 on the ground that the Collector had no jurisdiction to auction the 78 shops as one lot, thereby altering the entire pattern of the auction as notified earlier. It was pleaded that the action of the Collector was contrary to R. 12 of the Andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail) Rules, 1969, and the administrative instructions issued by the Excise Commissioner by which the Collector was bound.;