Section 368 in Rules under the United Provinces Excise Act, 1910
368. Description and application of the system.
- [The licence fees for the wholesale vend of foreign liquor to wholesale and retail vendors and for the retail vend of the following commodities under the auction system shall be fixed by public auction periodically, but the Excise Commissioner reserves the right to grant any licence on payment of a fixed fee or fee determined in accordance with the graduated or uniform scale or by tender or by tender-cum-auction system-] [Substituted by Notification No. 5354/Licence/Anubhag-3, dated March 3, 1994, published in the U.P. Gazette, Part I (ka), dated 5th May, 1994.](a)Country spirit;(b)Tari in areas other than those under the Tree Tax System;(c)Foreign liquor for consumption 'off' the premises in Form F. L. 5; and(d)Bhang .Note - The settlement of Tari shops under the auction-cum-tree tax system is also made by public auction.(2)The settlement shall ordinarily be made on such date or dates as may by published by the Excise Commissioner in the sale proclamation issued by him in Form G-35A, G-35B and G-35C, as the case may be.(3)The sale proclamation shall announce the date or dates of sales for all the districts concerned.(4)[1] The date or dates fixed for various districts shall be notified by the Excise Commissioner in permanent national State and regional Dailies. The Collector shall also give timely and effective publicity to the date or dates of sale as proclaimed by the Excise Commissioner. Unless prevented by unavoidable circumstances, the Collector shall proceed with the sale on the date or dates appointed leaving any unsold shops to be settled at a subsequent sale or as opportunity offers. Should a general postponement become necessary for any reason immediate intimation shall be given by the Collector to the Excise Commissioner about the postponed date with a brief statement of the reasons for the respondent.[2] No dates should be fixed for a postponed sale which will not permit of the reports of such sale to reach the Excise Commissioner by March 31, in the case of country spirit or bhang and by September 30 in the case of tari.[3] The provisions of sub-rule (2) shall not apply to the settlements of isolated shops for which no bids or inadequate bids have been made at the regular sales; these may be disposed of subsequently.(5)List of licences to be disposed of shall be prepared and exhibited both at the time of the auction and for some time before at the Collector's office. No shops other than those thus specified shall except under very special circumstances, be auctioned.(6)The following conditions shall apply to all sales under the auction system and will be inserted at the foot of the sale proclamation to be issued by the Excise Commissioner :(1)No person shall be allowed to bid at any auction sale unless-(a)he produces a solvency certificate in Form G-39 granted by the Tahsildar of the Tahsil in which he resides. It should be duly counter-signed by the Collector or the Additional Collector authorised by the Collector in this behalf; and(b)his name is included in the consolidated list of solvency certificate holders circulated by the Excise Commissioner,Uttar Pradesh :Provided that the Officer conducting the sales may in exigent circumstances and for reasons to be recorded in writing permit or allow a person who does not produce a solvency certificate or whose name does not appear in the consolidated list of solvency certificate holders to bid at the auction if such person pays such amount in cash or furnishes Bank Drafts of such amount from a Scheduled Bank which is at least half of his bid.Note. - In case of any doubt about the genuineness of the solvency certificate the decision of the Officer conducting the sales shall be final.(2)(a)A defaulter of the Excise revenue shall not be allowed to participate in the auction.(b)Any person who has been debarred from bidding under the rules elsewhere shall not be allowed to participate in the auction.(3)(a)An intending bidder shall apply by 31st January or such extended date, as may be indicated by the Excise Commissioner through publication in the prominent daily newspapers, to the Tahsildar of the Tahsil in which he resides or holds immovable property for granting a solvency certificate and should state in his application the details of his immovable and movable properties, with all particulars of the encumbrances, if any, thereon. The Tahsildar should verify after careful enquiry, whether particulars given by the applicant are true, and if satisfied, shall forward the solvency certificate in the prescribed Form (G-39), in duplicate, to the Collector or the Additional Collector authorised by the Collector to countersign the same. Before countersigning the certificate, the countersigning authority shall check that the property has been correctly valued. After counter-signature, the original copy will be handed over to the applicant. A consolidated list of all the solvency certificates issued by the countersigning authority, indicating the details regarding the applicant's name, address, the date and amount of the solvency certificate issued to him, shall be prepared and authenticated by the countersigning authority. One hundred cyclostyled copies of this list shall be forwarded to the Excise Commissioner by 21st February or such other date as may be indicated by the Excise Commissioner.(b)In case of bidders residing outside the State the original copy of the solvency certificate shall be sent by the issuing authority directly to the Excise Commissioner and a copy thereof shall be given to the applicant.The Excise Commissioner will get prepared a consolidated list of all such solvency certificates received in respect of bidders residing outside the State.(c)The Excise Commissioner shall circulate to all the Collectors of the State the consolidated list of all solvency certificate holders received from the districts and the list prepared in his office under sub-clause (b).(4)A prospective bidder from outside the State will be allowed to participate in the auction subject to his production of a certificate from the Collector of the district in which he resides specifying that he is not a person convicted by a criminal court of a non-bailable offence, that he is not in arrears of Government revenues and that his conduct has been found to be satisfactory.(5)The Officer conducting the sales is not bound to accept the highest or any bid. In case the highest bid is not proposed to be accepted the next highest bid should be reported to the Excise Commissioner along with reasons for not accepting the highest bid. The Excise Commissioner may either accept the next highest bid or order re-auction.(6)The final acceptance of any bid is subject to the sanction of the Excise Commissioner which in its turn subject to the decision of the State Government in appeal or revision, if any.(7)Every person bidding will be held to his bid whether it be highest or not and all such bids shall remain valid till the final decision of the Excise Commissioner or for a period of sixty days whichever is earlier.(8)A sum equal to one-fourth of the bid offered by the highest bidder shall be paid in advance as security for due performance of the contract out of which two-third shall be paid immediately on the fall of the hammer in cash. If the Collector recommends the second highest bid for sanction by the Excise Commissioner, the second highest bidder will also be required to deposit the security amount as mentioned above.(9)The balance one-third amount of the security shall be paid by the auction-purchaser within ten days of the auction either in cash or in Fixed Deposit receipts obtained from a Scheduled Bank for the period of licence duly pledged to the Collector or in the form of Bank guarantee valid till the final settlement of all claims and dues of the Government in respect of the auctioned shop.(10)The licence fees shall be payable in such equal instalments as are specified in the licence. In case the payment of due instalment is not made by 20th day of the month the same shall be recovered from the security deposit of the licensee.The licensee will have to make good the shortfall in the security deposit within ten days of the receipt of notice of such recovery. Any failure to make good the shortfall will render the licence liable to re-auction at the risk of the licensee and any shortfall shall be recoverable from his remaining security and the balance, if any, shall be recovered from him as arrears of land revenue. If a licensee is in arrears of licence fee he shall not be issued intoxicant for sale for which he holds licence.(11)In case of default to pay the security to pay the security deposit as mentioned in sub-rules (8) to (10) within the time specified the auction and in case a licence has been issued the licence shall stand cancelled and the deposit, if any, shall be forfeited to the Government. Re-auction or alternative arrangements shall be made at the risk of the original auction-purchaser. All monetary losses resulting from re-auction or alternative arrangement or from the licence remaining unsold for want of bidders shall be recoverable from the original auction purchaser as arrears of land revenue.(12)The security mentioned in sub-rule (8) above, unless it is forfeited, shall be refunded at the end of the year.All interest accruing on fixed deposit receipts shall vest in the Government and may be adjusted towards the Government dues against the auction-purchaser.(13)Every bidder in whose favour the licence is settled shall execute a counterpart agreement in conformity with the terms of the licence on a Stamp Paper of the specified value before a licence in respect of shops settled in his favour is granted. The counterpart agreement shall come into force with effect from 1st April of the year to which auction relates and if the licence executes the counterpart agreement or takes a licence after the said date, it shall be deemed to have come into force on 1st April unless the licensing authority otherwise directs.(14)The licence in favour of an auction purchaser shall be effective from 1st April of the year unless the licensing authority otherwise directs. The auction-purchaser shall be responsible to pay the licence fees from such date although he may not have actually received the licence.(15)A bidder from another district in whose favour a licence is to be granted, shall, besides the security referred to above, also furnish within ten days of the date of auction, a surety bond executed by a respectable resident of the district where the licence is granted for the amount of the licence fee and for due performance of the conditions of the licence. In case of bidders from outside the State two such sureties from the district where the licence is granted shall be necessary. The sureties shall be to the satisfaction of the licensing authority. No shop shall be allowed to be open by the licensing authority unless the required surety bond has been furnished. If the required surety bond is not produced within the time allowed the licence shall be re-auctioned at the risk of the auction-purchaser and any loss to the State Government shall be recoverable from him as arrears of land revenue.(7)(1) The auction shall be held at the headquarters of the district and shall be presided over by the Collector. In cases where the Collector for unavoidable reasons cannot personally preside over the auctions he may authorise an Additional Collector or District Excise Officer to preside over the same. The bids received by the Additional Collector or District Excise Officer shall be subject to confirmation by the Collector. The Collector may, in the like manner, also authorise a Sub-Divisional Officer to conduct the auction of his Sub-Division or a part of his Sub-Division.(2)The auction sales shall be attended by the Excise Inspectors on Preventive Duty and by Tahsildars who will assist the Officer conducting the auction in securing adequate bids and in eliminating bidders of unsatisfactory character or doubtful solvency.(3)The licence shall ordinarily be auctioned shop-wise. In case of country spirit and bhang, however, the shops may be auctioned in such groups as may be decided by the Officer conducting the sales. No group shall, however, be formed except for the shops of one Tahsil.(4)The Officer conducting the sales may withdraw any licence or licences from the auction before the auction is commenced under instructions of the Excise Commissioner along with reasons for such action.(5)(a)As a rule bids should not be taken in amounts smaller than multiples of Rs. 5 up to Rs. 100 in multiples of Rs. 10 from Rs. 100 to Rs. 300 in multiples of Rs. 25 to Rs. 300 to Rs. 500 in multiplier of Rs. 50 from Rs. 500 to Rs. 1,000 and in multiples of Rs. 100 from Rs. 1,000 to Rs. 10,000. All bids above Rs. ten thousand should be in even sums of Rs. 1,000.(b)Where no reason to the contrary exists, the highest bid, if adequate, should be accepted. But this provision is subject to two important considerations. Firstly, care should be taken to exclude bids obviously in excess of fair market value of the licence or farm or which are the results of speculation or rivalry. The acceptance of such bids, even if the bidders fulfil their engagement, is immediately injurious to the interests of the consumer and ultimately to the Excise revenue. This precaution is particularly necessary in the case of farming contracts which are worked by means of sub-settlements made by the farmer. Secondly, it is necessary to guard against the acceptance of bids which may have the effect of constituting an overt or covert monopoly and against the acceptance of licence-holders of undesirable persons of doubtful solvency. No person whose name appears upon the district of State defaulter's list shall be allowed to bid.(c)The officer conducting the sales shall record the name of each person making a bid and the amounts of his bids.(d)The signature of the highest bidder and the next two lower bidders shall be taken on the bid sheet.(e)At the time of sale the persons accepted as auction-purchaser shall be required to sign his name or affix his thumb-impression against the relevant entry of the licence in record C-14 it being explained at that time that the deposit paid in advance will be returned in the event of the licence being subsequently refused. The final bid-accepted shall invariably be recorded with his own hand by the officer conducting the sales.(6)The Treasurer of the district or one of his recognised assistants, shall be required to attend the sales to receive the advance fees paid by bidders provisionally accepted. All sums received by the Treasurer or his assistant up to 2.00 p.m. must be credited in that day's account and the amounts paid subsequently on the same day should be kept in sealed bags in the treasury and brought to account the next day. At the close of each day's sales the District Excise Officer shall satisfy himself in personal communication with the Treasury Officer, that the remittances to and the receipts in the Treasury on account of that day agree. A person whose bid has been provisionally accepted by the Collector shall be granted a receipt in Form G-19.(7)When advance security deposits are provisionally received from two or more rival bidders or when they are received in cases requiring further consideration or reference to higher authority, such advances should be held in revenue deposit and not finally credited to Government. When a final decision is arrived at, the amount so held in deposit shall be at once credited or refunded, as the case may be. The officer conducting the sales should intimate to the Treasury Officer the name of the depositors and the amounts of their advance security payments which are to be held in deposit under this paragraph.(8)(a)If any person whose bid has been accepted at the auction fails to furnish the requisite security deposit or fails to complete within stipulated time the required formalities, the Collector may sell the contract immediately or on any subsequent date fixed by him.(b)The defaulting purchaser shall be debarred from bidding for the same or any other licence within the period of 5 years from the date of default and may with the prior sanction of the Collector be prosecuted under Section 185 of the Indian Penal Code but in every case the defaulter shall be called upon to show-cause why he should not be prosecuted for the said offence before he is actually prosecuted thereunder. A consolidated list of defaulting purchasers alongwith their addresses, debarred under the sub-rule from participating in auction, shall be circulated by Excise Commissioner to all the Collector before the date of auction every year.(9)Where no reason to the contrary exists, the highest bid, if adequate, should be accepted. The officer conducting the sales shall, however, record the reasons for not accepting the highest bid if he accepts the second highest bid. All such bids shall, however, be reported to the Excise Commissioner's decision whether a bid is adequate or not, shall be final.(10)When after due weight has given to the foregoing considerations, a bid has been finally or provisionally accepted at an auction, no subsequent offers in respect of the same engagement should be considered. The practice of nominally accepting a bid at the auction and then negotiating privately with other competitors for higher offers is legally indefensible and in all respects objectionable. If an adequate price is offered by the highest suitable bidder it should be accepted otherwise the licence should be withdrawn for resale at a subsequent date or for settlement by tender. Competitors must be given to understand that when a bid is once accepted the matter cannot be accepted, reopened and that they must be prepared to go to the full extent they propose to offer before that close of the auction.(11)A list of all sanctioned shops of which it has not been found possible to effect a settlement should be submitted in Form G-33 for orders to the Excise Commissioner by April 1 each year with a brief statement of the action proposed in each case.(12)Whenever for any reason it has not been possible to settle any licence by auction by 1st April it shall be open to the Collector to settle the shop provisionally by calling tenders till it is finally settled by auction.(13)A statement of all the settled shops in Form G-12 or G-13, as applicable shall be sent to the Excise Commissioner immediately after the auction for final acceptance.
