Rajasthan High Court - Jodhpur
Devi Lal vs State Of Rajasthan on 25 May, 2021
Author: Dinesh Mehta
Bench: Dinesh Mehta
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 6896/2021 Devi Lal S/o Shri Likhmi Chand, Aged About 41 Years, By Caste Jat, Resident Of Village Bhurawas, Tehsil Taranagar District Churu.
----Petitioner Versus
1. State Of Rajasthan, Through Excise Commissioner, Rajasthan, Jaipur.
2. The Addl. Commissioner Excise Zone, Bikaner.
3. The District Excise Officer, Churu.
4. Surendra Singh S/o Shri Hanuman Singh, Resident Of Ratana Mohalla, Bhaleri, Tehsil Taranagar District Churu.
----Respondents
For Petitioner(s) : Mr. R.S. Choudhary, through Cisco
Webex App
For Respondent(s) : Mr. Girish Sankhla ]
Mr. Sajjan Singh Rathore], through
Cisco Webex App
JUSTICE DINESH MEHTA
Order
25/05/2021
Reportable
(1) By way of the present writ petition, petitioner has challenged the action of the District Excise Officer, the respondent No.3, who granted license of composite liquor shop of Group Kohina & Sayaran to the respondent No.4.
(2) The facts appertain, are set out hereinfra:-
(2.1) The State issued Excise and Liquor Policy 2021-22 dated 06.02.2021 in relation to terms and conditions of the license for (Downloaded on 29/05/2021 at 08:18:23 PM) (2 of 13) [CW-6896/2021] sale and supply of Indian Made Foreign Liquor, Country Liquor, Beer and wine.
(2.2) In furtherance of the policy aforesaid, an invitation dated 06.04.2021 to take part in e-auction came to be published giving out relevant terms and conditions of e-auction for grant of license. (2.3) The controversy at hand relates to two groups/locations - (i) Tara Nagar and; (ii) Kohina and Sayaran of District Churu (hereinafter referred to as Location-I and Location-II respectively).
(2.4) For the purpose of clarity of facts, the relevant dates and amounts in relation to composite licence for both the locations are reproduced as under:-
Location-I Location-II
Tara Nagar Kohina & Sayaran
Date of NIT 06.04.2021 06.04.2021
Date of auction 11.04.2021 11.04.2021
Successful H1-Surendra Singh - H1-Nagendra Singh -
Bidders (Rs.6,15,19,440/-) (Rs.4,00,33,600/-)
H2-Dinesh Kumar - H2-Surendra Singh -
(Rs.4,16,14,440/-) (Rs.67,33,600/-)
H3-Vinit Kaswan - H3-Devi Lal -
(Rs.3,96,69,440/-) (Rs.67,28,600/-)
Date by which H- 16.04.2021 16.04.2021
1 was required to
make payment
(2.5) For the Location-I (Tara Nagar), respondent No.4, Surendra Singh offered the highest amount to the tune of Rs.6,15,19,440/-, whereas for Location-II (Kohina & Sayaran), he remained second highest bidder having offered a sum of Rs.67,33,600/-. (2.6) The petitioner herein was H-3 or third highest bidder for Location-II (Kohina & Sayaran) offering a bid of Rs.67,28,600/-. (2.7) The respondent No.3 issued a letter dated 11.04.2021 to respondent No.4, who was H-1 for Location-I asking him to (Downloaded on 29/05/2021 at 08:18:23 PM) (3 of 13) [CW-6896/2021] deposit an amount of Rs.6,15,195/- by 16.04.2021 and 5% of the bid amount to the tune of Rs.30,75,972/- by 20.04.2021. (2.8) The petitioner addressed a letter dated 12.04.2021 to the respondent No.3 that in case H-1 for Location-II (Kohina & Sayaran) does not turn up, the license be given to him after blacklisting H2-Suirendra Singh, who has showed his inability to take license of Location-I (Tara Nagar), despite being the highest bidder.
(2.9) By order dated 16.04.2021, respondent No.3 revoked the sanction in favour of Nagendra Singh, being the highest bidder for contentious location - Location-II, as he had given letter dated 15.04.2021 showing his disinclination to take the license. (2.10)Respondent No.3 also issued a letter dated 15.04.2021 to the petitioner asking whether he was ready to offer bid of Rs.67,33,600/- (equal to H-2), in case first two bidders (H-1 and H-2) for Location-II, backed out from their offer. (2.11)The petitioner, in turn, sent a communication dated 17.04.2021 to the respondent No.3 and stated that both H1- Nagendra Singh and H2-Surendra Singh (respondent No.4) are not interested in taking the license for Location-II, the license be awarded to him as he was the third highest bidder. (2.12)On 17.04.2021, the respondent No.3, however, proceeded to issue an offer letter to the respondent No.4-H2 (the second highest bidder) for Location-II, and asked him to deposit security amount of Rs.67,336/- and 5% of the amount to the tune of Rs.3,36,680/- by 16.04.2021 for grant of license to run composite shop at Location-II.
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(4 of 13) [CW-6896/2021] (2.13)On 18.04.2021 and 19.04.2021, the petitioner made
representations to the respondent No.3 requesting to grant him the license and also to black-list Surendra Singh, who having offered the highest bid, has backed out for Location-I. (2.14)Feeling aggrieved with the above, order/communication dated 17.04.2021 offering license or right to run composite liquor shop to the respondent No.3, petitioner has preferred the instant writ petition.
(3) Mr. Choudhary, learned counsel for the petitioner, submitted that the action of the respondent No.3 is illegal and contrary to the provisions contained in Rule 74(v) of the Rajasthan Excise Rules, 1956 (hereinafter referred to as 'the Rules of 1956'). (4) He argued that the respondent No.4 and Nagendra Singh, who are closely related to each other, have devised noval way and bidded exorbitant amount for both the locations, namely, Tara Nagar and Kohina-Sayaran (Rs.6.15 Crores and Rs.4.00 Crores respectively) and stood as H1 for Location-I and II respectively. He added that the same was done simply with a view to frustrate the auction proceedings, as they or their persons have also submitted lower bids, which were in commensuration with the actual prices for the locations.
(5) It was argued by Mr. Choudhary that once Surendra Singh, respondent No.4, had refused to take the license for Location-I, the respondent No.3 ought to have forfeited the amount and black-listed him because the provisions of Rules of 1956 are very clear making the black-listing automatic.
(6) It was contended by learned counsel for the petitioner that since the District Excise Officer was aware of the fact that respondent No.4 is not interested for Location-I, he ought not to (Downloaded on 29/05/2021 at 08:18:23 PM) (5 of 13) [CW-6896/2021] have issued him letter of offer though he was H-2 or second highest bidder for the subject location (Location-II), because his refusal to take licence for Location-I was to entail forfeiture of the security amount and his blacklisting.
(7) Learned counsel argued that instead of issuing the offer letter dated 17.04.2021 to respondent No.4, the license for Location-II ought to have been offered to the petitioner, who had offered just Rs.5,000/- less than the amount bidded by Surendra Singh (Rs.67,28,600/-), particularly when petitioner was willing to match the amount offered by H-2.
(8) Mr. Girish Sankhla, learned counsel for the respondent - Excise Department, submitted that petitioner has an efficacious alternative remedy in the form of appeal under Section 9A of the Rajasthan Excise Act, 1955 (hereinafter referred to as 'the Act of 1955'), thus, this Court should not interfere in the matter. He also submitted that respondent No.4 came to be black-listed for having backed out from his offer for Location-I on 21.04.2021, whereas the letter of offer dated 17.04.2021 had already been issued to him (respondent No.4) for Location-II.
(9) According to learned counsel for the respondents, as no formal order of black-listing was passed by then, the respondent No.3 had no other option but to offer the license to respondent No.4, as he was H-2 for Location-II and Nagendra Singh, H-1 for Location-II, had given a refusal letter. He pointed out that not only an offer letter to take licence had been issued to respondent No.4, he has even deposited the requisite amount in furtherance of the offer so made and consequently a license for Location-II has been issued in favour of respondent No.4.
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(6 of 13) [CW-6896/2021] (10) While inviting Court's attention towards Condition No.8 of the notice dated 06.04.2021, Mr. Sankhla submitted that a successful bidder was required to deposit the requisite 50% of advance annual guarantee fee by 20.04.2021 and since the respondent No.4, who was offered the license, had deposited the amount before such date, the respondent No.3 was justified in accepting the amount, particularly when he was black-listed/debarred for his failure to accept the license for Location-I, by an order of a subsequent date, i.e. 21.04.2021.
(11) Mr. Sajjan Singh Rathore, learned counsel appearing for respondent No.4, having filed preliminary reply submitted that the respondent No.4, after being awarded license, has got his shops approved and has even started running his business. Thus, any indulgence at this stage would affect not only his business rights but also State's interest.
(12) He nevertheless argued that in light of condition mentioned in the black-listing order dated 21.04.2021 his client has rightly been awarded license. Condition relied upon by Mr. Singh reads thus:-
"vr% mDr ifjizs{; esa mijksDr rkfydk esa of.kZr dz-la-01 ls 39 es mPpre cksyhnkrk }kjk okafNr /kjksgj jkf"k fu;r le;kof/k esa jktdks'k rd tekjkt ugha djk;s tkus ds dkj.k mudks jktLFkku vkcdkjh fu;e 1956 ds fu;e 74(V) esa fufgr izko/kkuqlkj izfrHkwfr ds fu{ksi ds fy, Lohd`r vafre fnu ls fnukad 21-04- 2021 rd rhu o'kksZa dh vof/k ds fy, vf/kfu;e ;k bu fu;eksa ds v/khu blacklist/debarred fd;k tkrk gSA vxj mDr fnukad ls iwoZ dksbZ vuqKfIr foHkkx }kjk tkjh dh xbZ gS, rks og debar dks izHkkfor ugha djsxhA"
(13) Referring to above condition of the order dated 21.04.2021, he argued that since the order of black-listing/debarment itself contained a condition that any license awarded prior to the date of (Downloaded on 29/05/2021 at 08:18:23 PM) (7 of 13) [CW-6896/2021] black-listing/debarment order would not be affected, it cannot be said that there was an illegality in grant of license to him. (14) It was also vehemently argued that since the petitioner has neither challenged the above stipulation in the order dated 21.04.2021, nor has he challenged the award of license to respondent No.4, the writ petition as filed by the petitioner is incompetent.
(15) Mr. Singh further pointed out that similar nature orders of black-listing, as has been passed in case of respondent No.4, were also passed qua similarly situated 38 bidders of the District Churu, including Nagendra Singh, the H-1 bidder for Location-II, hence no motives can be imputed upon respondent No.3. (16) Heard.
(17) Firstly, in relation to the preliminary objection regarding maintainability of writ petition on the count of existence of statutory remedy of appeal, this Court would, at the outset, observe that the same cannot take away petitioner's constitutional remedy as his fundamental right to carry on trade has been violated by the action of respondent No.3, which action is per se arbitrary and contrary to unambiguous provisions contained in the Rules.
(18) That apart, it has been indicated by the respondent No.3 in his letter dated 13.05.2021 (Annex.R/3), that he has protected the already granted licenses in light of direction given by the Commissioner in his letter dated 13.03.2021. In the opinion of this Court, when the contentious stipulation in the debarment order dated 21.04.2021 has been inscribed under the direction of the Commissioner, no fruitful purpose would be served if the petitioner (Downloaded on 29/05/2021 at 08:18:23 PM) (8 of 13) [CW-6896/2021] is relegated to avail appellate remedy, because the appeal lies to none, but the Commissioner.
(19) For the reasons stated in paras Nos.(17) and (18), the preliminary objection is overruled, writ petition is decided on merits.
(20) It is noteworthy that the respondent No.4 Surendra Singh was H-1, the highest bidder for Location-I having bidded an amount of Rs.6,15,19,440/- and he also took part in e-auction for Location-II held on the same day and offered a sum of Rs.67,33,600/- to become H2 (second highest bidder). (21) It is pertinent that as per the terms of the NIT dated 06.04.2021, the highest bidder was required to deposit the requisite amount by 16.04.2021. Both Nagendra Singh and respondent No.4, who happen to be H-1 for both locations also happen to be close relatives and intriguingly both desisted from honouring their commitments for their respective locations and dodged the State.
(22) Respondent No.3 had issued a letter to the petitioner on 15.04.2021 (Annex.8) asking him as to whether he would match the offer of H-1 or H-2, in case they (H-1 and H-2) backed out or would he stick to his own bid. In normal circumstances, he had no occasion to write such communication to petitioner (H3 for Location-II) and ask his willingness, unless after receiving a communication from H1, he had formed an opinion that Surendra Singh-H2 (respondent No.4) could not be awarded licence, for he had retracted from his offer.
(23) Respondent No.3, however, issued impugned letter of offer to the respondent No.4 on 17.04.2021 and awarded him the contract/licence. Such decision of the respondent No.3 is against (Downloaded on 29/05/2021 at 08:18:23 PM) (9 of 13) [CW-6896/2021] public policy and fair play besides being contrary to statutory provisions, especially Clause (v) of Rule 74 of the Rules of 1956, which reads thus:-
"74. Persons debarred from holding licences - Without the previous written sanction of the Excise Commissioner:-
(v) No person whose tender or bid at an auction for grant of licence under the Act or these Rules has been accepted but who fails to deposit within the time allowed, the security amount required to be deposited according to the conditions of tender or auction shall be entitled to hold any licence under the Act or these rules for a period of three years from the last date allowed for deposit of such security."
(24) A perusal of the provision aforequoted, leaves no room for ambiguity that once a successful bidder has failed to deposit the amount within time allowed, not only his security amount would be forfeited, even he would be disentitled to hold any license. (25) Learned counsel for respondent No.4, argued that black- listing is not automatic and unless a specific order of black-listing is passed, no bidder can be precluded from being given license for other location. Generally speaking, the position of law is trite that black-listing cannot be done without a prior notice. But, the provisions under consideration do not contemplate issuance of notice prior to blacklisting. Strictly speaking, it is not even blacklisting. As a matter of fact, the failure to deposit the amount renders a successful bidder ineligible to even hold a license. (26) In the opinion of this Court, a plain reading of Clause (v) of Rule 74 of the Rules of 1956 makes it crystal clear that on failure of a successful bidder to deposit the requisite amount within the time allowed, not only the amount which he has deposited is required to be forfeited, he is also not entitled to hold any license under the Act. Clause (v) of Rule 74 of the Rules of 1956 uses (Downloaded on 29/05/2021 at 08:18:23 PM) (10 of 13) [CW-6896/2021] expression "hold" and not "get", which makes the legislative intention apparent.
(27) Respondent No.3 can be said to be justified in issuing offer letter on 17.04.2021 to respondent No.4 as he was H-2 (second highest bidder) for Location-II but in any case, once a formal order of black-listing had been passed, the offer letter dated 17.04.2021 ought to have been revoked. The license at any cost, could not have been issued.
(28) Furthermore, as the license is said to have been issued prior to a formal order of black-listing, this Court is firmly of the opinion that in the teeth of Clause (v) of Rule 74 of the Rules of 1956, he could not have been allowed to hold license. Thus, the argument advanced by Mr. Sankhla that since the order of black-listing was passed on 21.04.2021 and the license had been issued prior thereto, the license granted to respondent No.4 cannot be faulted with, is liable to be rejected.
(29) As has been held in earlier part, if a person faulters in depositing the requisite amount, forfeiture of security and incurring a disqualification to hold a license is a natural corollary, fait accompli or foregone conclusion. As such, grant of license to the respondent No.4 was fundamentally void and contrary to statutory provision, particularly when according to the respondents themselves, respondent No.4 had declined to accept the license for Location-I, namely, Tara Nagar. (30) The fact that the respondent No.4 had given in writing on 15.04.2021 is not admitted, but still it is undisputed that by 16.04.2021, the respondent No.4 had not deposited the requisite amount. As such, he having defaulted, could not have been granted license, regardless of the fact that a letter of offer had (Downloaded on 29/05/2021 at 08:18:23 PM) (11 of 13) [CW-6896/2021] been issued to respondent No.4 on 17.04.2021. That apart, Clause
(v) of Rule 74 of the Rules of 1956 is very clear and categorical. Since the respondent No.4. being the highest bidder for Location- I, did not deposit the security amount and requisite advance annual license fee by 16.04.2021, he could not be issued license and even if the license had been issued, he could not hold the same, particularly after formal order of black-listing/debarment had been passed.
(31) On 21.04.2021, the license issued to the respondent No.4 (as informed, on 19.04.2021) stood annulled by virtue of Clause
(v) of Rule 74 of the Rules of 1956, regardless of the language used in the said order.
(32) The indulgence given in black-listing/debarment order dated 21.04.2021, protecting the licenses already granted, is clearly contrary to the statutory provision. Such stipulation is ex facie illegal and unsustainable and even in absence of specific challenge, the same is liable to be and is hereby quashed, however, qua respondent No.4 alone, as other 38 persons mentioned therein are not before this Court. (33) According to this Court, the stipulation contained in the order dated 21.04.2021, providing that license granted prior to the date of the order will not be affected, itself is contrary to statutory provision.
(34) It is rather shocking to note that order of black-listing/ debarment has been passed in relation to as many as 39 bidders of a small District like Churu. This fact unravels the modus operandi or dubious method deployed by the bidders to bid an exorbitant amount so as to scoop out the genuine bidders from (Downloaded on 29/05/2021 at 08:18:23 PM) (12 of 13) [CW-6896/2021] the race or bidding process and then getting the licence at a lesser price in the name of their ilk or in fictitious names. (35) Granting license to such bidders, who have back-pedaled to serve their own vested interest and hidden agenda is against the public policy and contrary to statutory mandate. The same is required to be appropriately dealt with by the respondent - State. Else, it would be like giving a premium for the misdeeds or encourage such practice.
(36) The writ petition is, therefore, allowed. The letter of offer dated 17.04.2021 so also the license granted to the respondent No.4 is hereby quashed and set aside.
(37) The Commissioner (Excise) is directed to take a conscious decision on or before 04.06.2021, either to award license to the present petitioner or to go for fresh bid/auction for Location-II (Kohina & Sayaran).
(38) Till 04.06.2021, the respondent No.4 shall be allowed to continue his business on the basis of the license issued to him. (39) Mr. Sajjan Singh Rathore has informed the Court that it is not only by the District Excise Officer, Churu, who has passed such order of black-listing protecting license granted prior to the date of black-listing but in many other districts of the State, similar orders have been passed.
(40) This Court would hasten to add that orders of other districts are not on record. As a matter of fact, the respondent - State has placed various orders of different District Excise Officers, which do not contain such stipulation. Even if similar stipulations have been stringed in the blacklisting orders, the same are contrary to the statutory provision and what has been held here. The Commissioner (Excise) would ensure that henceforth rights of (Downloaded on 29/05/2021 at 08:18:23 PM) (13 of 13) [CW-6896/2021] such defaulting bidders, who have been black-listed, be not protected.
(41) Needless to observe that present order will, however, not affect already crystallized rights of the parties who are not before this Court.
(42) The stay application also stands disposed of.
(DINESH MEHTA),J 8-skm/-
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