RISHI PAL AND CO. Vs. STATE OF H.P.

JUDGEMENT

(1.) The petitioner claims to be a wine -contractor engaged in the business of selling liquor in the State of Himachal Pradesh. He claims to have participated in the auction of vends of Rampur Bushar group for the year 1994 95 held on 16 -3 -1994 and further claim that his bid in the said auction -sale was highest, i.e. Rs. 190 crores. According to him, his bid was accepted and consequently he deposited 5% of the said amount as security which was accepted. He further claims that 8.5% of the said amount was required to be deposited within ten days of the auction or by 31 -3 -1994, whichever be earlier. He, therefore, deposited the said amount on 28 -3 -1994. He was also prepared to deposit the balance amount and got a bank draft prepared for the purpose and went with the said draft to the office of the respondent Excise and Taxation Commissioner on 25 -3 -1994. The said Commissioner refused to accept the deposit and instead informed him that his bid was rejected. The letter rejecting his bid is dated 28 -3 -1994 (Annexure P -9) and said to have been received by the petitioner on 30th March, 1994. Feeling aggrieved by the aforesaid, the petitioner has preferred this writ petition challenging legal validity thereof and praying that the aforesaid order Annexure P -9 be quashed by a writ of certiorari and further that the respondents be directed to allot vends to the petitioner. In the alternative, it is prayed that Rampur Bushar Group be re -auctioned in the interest of justice and fair play. The respondents No. 1 to 5 admit that the auction of Rampur Bushar Group of vends was held on 16 -3 -1994 and the bid of the petitioner of 1,90 crores was the highest. It is also admitted that the petitioner had deposited 5% of the said amount as security and further amount of 8 5% as per Clause 20 (i) (b) of the Auction Conditions. It is also admitted that the petitioners bid was not confirmed by the competent authority and the said decision was communicated to the petitioner by letter dated 28th March, 1994 (Annexure P -9). It is submitted that vends of not only Rampur Bushar but also Shimla -I, Shimla -II groups besides all other parts of the District were put to auction on 16th March 1994. Though there were purchasers of all groups but there was no purchaser of Shimla -I and Shimla -II groups. Consequently auction of Shimla -I and Shimla -II was postponed (Annexure R -4). Lateron the Financial Commissioner exercising his power under Rule 34 of the H P. Liquor Licence Rules, 1986 read with conditions No. 1 and 2 of the Auction Conditions, decided on 22 -3 -1994 to sell licences of Shimla I and Shimla -II group by negotiation (Annexure R -5). Pursuance to the aforesaid decision, notice for negotiations were sent to all the bidders including the petitioner, to appear before the Negotiating Committee on 25 -3 -1994 and participate in the negotiation for Shimla -I and Shimla -II. Pursuance to the aforesaid, several bidders including the petitioner appeared before the Negotiating Committee in the morning of 25 -3 -1994 and offered their bids. The petitioner also offered 6.15 crores as his bid for the aforesaid two groups. The two other participants, namely, respondent No. 6 and one Madan Lal and Co. offered their bids of 8.50 crores and 8 25 crores respectively, on the condition that their bid was composite for Shimla -I and Shimla -II and Rampur Bushar group and they are not prepared to offer any bid for Shimla -I and Shimla -II only. Proceedings Annexure R -10 indicate that these offers were not accepted The Negotiating Committee, however, suggested that since Shimla -I and Shimla II are not being sold, "it would be appropriate to obtain by negotiations composite offers from all the parties for Shimla Unit I, Shimla Unit II and Rampur Unit." For this purpose the negotiations were postponed and the parties were called for negotiation again at 3.30 p. m. These proceedings of the Negotiating Committee were brought to the notice of the competent authority who by his order dated 25 -3 -1994 (Annexure P -22) decided not to confirm the result of auction in respect of Rampur Bushar group and ordered negotiation of Rampur Bushar group alongwith Shimla -I and II. Bids of all other Units i.e., Chopal, Rohru, Jubbal and Kotkhai were confirmed. The Negotiating Committee again met at 3.30 p.m. and requested composite offers of all the participants to the three units now grouped as one. Respondent No. 6 maintained his morning offer of Rs. 8.50 crores. The other two, namely, Ashwani Kumar Joginder Pal and Co. offered Rs. 8 crores and Madan Lal and Company offered Rs 8.25 crores for the aforesaid. Since these offers were the same as offered in the morning, two bidders namely, respondent No. 6 and Madan Lal and Co. were individually called to improve their offers. Madan Lal and Co. did not improve his offer of Rs. 8.25 crores but respondent No 6 improved it to Rs. 8.55 crores. In this process the offer of respondent No. 6 was found to be highest and accepted and vends given to him. The submission of the respondent is that the aforesaid action was taken in the wider interest of the State revenue and is otherwise just and fair, needing no intervention of this Court.

(2.) The aforesaid narration of events would clearly establish that liquor vends in the State of Himachal Pradesh were divided into several identifiable groups and put to auction. It is also apparent that so far as Rampur Bushar group is concerned, the auction was fully participated and fetched a proper price of Rs. 1.90 crores. In this connection, it deserves notice that this grouping has existed even in 1993 -94 and Rampur Bushar Unit has fetched 1.50 crores during that year. The petitioner s bid of Rs l.90 crores was, therefore, a clear improvement m the last year s revenue. There is no illegality alleged in this auction sale. On the contrary report of the Deputy Commissioner (Annexure R -5) would indicate that a recommendation was made by him to pass further necessary orders in relation to the auction already held and to decide further course of action in relation to Shimla Unit I and II. As regards Shimla Units I and II it appears that it was decided to sell them by negotiations and hence invitation Annexure R -8 were sent to 32 parties whose names are a appearing in the above said annexure. Out of these 32, only seven parties appeared on 25 -3 -1994 and participated in the negotiations. It is also apparent that no order for re -grouping these vends was either made or published for general information of others. Indeed, the order was passed at the instance of respondent No. 6 who made his offer only if the three groups were integrated into one and sold as such. It is also clear that only seven invitees participated in the negotiations and only two offered their bids It is further clear that but for the suggestion of respondent No.6 the three groups would not have been combined into one and given to respondent No.6. The question requiring our consideration is whether the aforesaid procedure is in accordance with law ?

(3.) A perusal of auction notices Annexure R -2 and Annexure R -3 would indicate that the respondent Deputy Commissioner had before issuing a these notices grouped various vends and notified the same for information of air concerned. Entire Shimla District was divided into six groups namely, Chopal. Rohru, Jubbal, Kotkhai and Shimla Unit I and Shimla Unit II Auction conditions were notified at the time of auction as per Annexure P -l. Condition No. 1, (ii) provides that the Excise and Taxation Commissioner reserves the right to sell all or any of the licences by auction or by private contract or by allotment or by calling tenders or by any other arrangement which he may consider expedient in the interest f revenue Condition No. 2 provides that the highest bids shall be subject to confirmation by the Excise and Taxation Commissioner, Himachal Pradesh, who reserves the right to reject any bid without assigning any reasons for doing so. Condition No. 4 which deals with fee fixed h auction provides that the Financial Commissioner may, if no bid is forthcoming in respect of a vend or a group of vends or if the situation therwise warrants or if it is expedient to do so, grant these licenses by contract through negotiations. This document provides for detailed procure for holding auction, acceptance of bid, deposits of money etc. There is however, no specific provision in these conditions that groups once formed may be changed. We have, however, noticed Clause 4 of this auction condition which is said to be the source of authority of the respondent Financial Commissioner for re -grouping shops. This provison being important deserves re -production for convenience : "The competent authority may, if no bid is forthcoming in respect of a vend or a group of vends or if the situation otherwise warrants or if it is expedient to do so, grant these licenses by contract through negotiations".