M. H. BEG, J. - (1.) THE appellants, before us by certification of the case, had filed a petition to quash revenue recovery proceedings started against them for realisation of the remainder of the amounts due on account of their bids at auction sales of some toddy shops for the period 1/04/1967, to 31/03/1968, by the Government of Kerala. THE amounts at which the shop were knocked down were: JUDGEMENT_61_3_1976Html1.htm
(2.) THE notified conditions of the auction sales made it incumbent upon the bidder to pay immediately 10% of the amount due and to provide personal security for the rest. THEre was no assurance or guarantee given there that prohibition will not be removed in future by the Government in any area in the State or about any other matter of future policy of the Government relating to intoxicants. According to notified conditions, the successful bidders had to deposit 30% of the total amount payable on demand by the Assistant Commissioner and also to execute agreements before getting the necessary licenses. THE petitioners had deposited the necessary amounts on demand. THEy were also allowed to start the business of running their toddy shops even before the licenses were issued in their favour. The petitioners' case is that at the time of bidding, there was an understanding that the respondent State will not remove prohibition so that they expected adequate profits. As observed above, there is nothing in the notified conditions to indicate this. It appears that in April, 1967, the respondent State announced removal of prohibition from 1st May, 1967. The appellants allege that they suffered heavy losses due to this policy of the State and were unable to make the remainder of the payments which were sought to be recovered under Section 28 of the Abkari Act (hereinafter referred to as 'the Act'). It is difficult to see what the removal of Prohibition had to do with alleged losses to the appellants. Abandonment of prohibition either totally or partially, should, ordinarily, not diminish sales of liquor. One should expect such a development to increase sales of liquor. The appellants contend that, as no agreement was executed between them and the Govt. in the manner prescribed by Article 299 of the Constitution, they are not liable to pay the amounts sought to be recovered. This is their main contention.
(3.) A learned Judge of the Kerala High Court who heard the petition held that the notification in pursuance of which the shops in question were auctioned provided that, if the contract could not be executed, the whole amount was to be forfeited and the shop itself was to be resold. Thus, non-execution of the contract due to the unwillingness or inability of a bidder to pay was not a contingency outside the notification for auction the validity of which is not challenged. The notification did not lay down that, in that case, the payment of the remainder will be remitted. On the other hand, the condition was that the whole amount due could, in such an event, be "forfeited." The Kerala High Court held that, despite the absence of a contract executed in accordance with the provisions of Article 299 of the Constitution, the amounts due could be recovered under Section 28 of the Act which reads as follows: "28. Recovery of duties. - All duties taxes, fines and fees payable to the Government direct under any of the foregoing provisions of this Act or of any licence or permit issued under it, and all amounts due to the Government by any grantee of a privilege or by any farmer under this Act or by any person on account of any contract relating to the Abkari Revenue may be recovered from the person primarily liable to pay the same or from his surety (if any) as if they were arrears of land revenue, and, in case of default made by a grantee of a privilege or by a farmer, the Commissioner may take grant or farm under management at the risk of the defaulter or may declare the grant or farm forfeited, and re-sell it at the risk and loss of the defaulter. When a grant or farm is under management under this section, the Commissioner may recover any moneys due to the defaulter by any lessee or assignee as if they were arrears of Land Revenue." ;