Rajasthan High Court - Jodhpur
Jagdish Anjana vs State Of Rajasthan (2023/Rjjd/014029) on 8 May, 2023
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2023/RJJD/014029] (1 of 16) [CW-4433/2022]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 4433/2022
Jagdish Anjana S/o Shri Balaram Ji Anjana, Aged About 42
Years, R/o Village Jethana, Post Pancheva, Tehsil Piploda, District
Ratlam, Madhya Pradesh At Present Proprietor Of Shop Code
3502010, Village Chakoonda, Tehsil Arnod, District Pratapgarh
(Raj.).
----Petitioner
Versus
1. State Of Rajasthan, Through Chief Secretary, Government
Of Rajasthan, Jaipur
2. Principal Secretary, Finance Department, Secretariat,
Jaipur.
3. Secretary, Finance (Revenue) Department, Secretariat,
Jaipur.
4. The Excise Commissioner, Government Of Rajasthan,
Udaipur.
5. The District Excise Officer, Pratapgarh.
----Respondents
For Petitioner(s) : Mr. Ramdev Rajpurohit
Mr. Vijay Kumar Gaur
For Respondent(s) : Mr. M.S. Singhvi, Sr. Adv. & A.G.
assisted by
Mr. K.S. Lodha
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Order 08/05/2023
1. This Civil Writ Petition has been preferred claiming the following reliefs:-
"i. the respondents may kindly be directed to renew the license of the Petitioner for composite liquor Shop Code- 3502010 located at Village Chakoonda, Tehsil Arnod, District Pratapgarh (Raj.) for further financial year 2022- (Downloaded on 12/11/2023 at 12:19:31 AM)
[2023/RJJD/014029] (2 of 16) [CW-4433/2022] 2023 and 2023-24 after taking the increased amount as fixed under the point No. 2.5.3 of Excise and Temperance Policy for year 2022-2023 and 2023-2024 on the annual guarantee amount of Rs.68,75,680/- of year 2021-2022 and ii. hold the Respondents are bound by principle of promissory estoppel and cannot change or turnaround from the assurance made by them in the Excise Policy of the year 2021-22.
iii. the additional Composite fee taken by the Respondent from the Petitioner for year 2021-22 be adjusted in the renewed license of 2022-23 or in alternate refunded back to the petitioner."
2. Learned counsel for the petitioner has raised the issue of composite fee having been charged for the purpose of license for allotment of particular shop, in accordance with the Rajasthan Excise Policy for the year 2021-22.
2.1 Learned counsel submits that the Rajasthan Excise Department conducted e-auction in which, the license was granted for a particular shop. The highest bidder failed to deposit money in time due to which, his license was cancelled and subsequently, the present petitioner being the next highest bidder, had furnished e-bid of Rs.68,75,680/- as an Annual Guarantee.
2.2 Learned counsel for the petitioner further submits that the e-
auction for issuing license for the shop was conducted but the auction could not succeed, therefore, it was re-auctioned in which, H1 did not appear and H2, who is the present petitioner was given the shop.
2.3 Learned counsel also submits that vide letter dated 27.09.2021 (Annex.2) issued by Office of District Excise Officer, Pratapgarh, it was informed that since the petitioner did not (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (3 of 16) [CW-4433/2022] accept the condition to deposit the H1 bid amount of Rs.2,35,75,680/-, therefore, he was issued temporary approval to run the liquor shop by depositing the H2 bid amount to the tune of Rs.68,75,680/-; the composite fee, therefore, was decided as Rs.3,97,863/- which was to be deposited in two equal installments; the first installment was to be paid on 02.10.2020 and the remaining 50% of the installment was to be paid on 15.10.2021.
2.4 Learned counsel further submits that, however, under protest, the petitioner had deposited composite fee, but it is in contravention to the condition No.4.4 of the Rajasthan Excise Policy. He thus, submits that the respondent-State was under an obligation to revisit the issue regarding composite fee.
3. Mr. M.S. Singhvi, learned Senior Advocate & Advocate General, assisted by Mr. K.S. Lodha, appearing on behalf of the respondents, however, accepts the factual matrix of the case and submits that in re-auction, H2, who is the present petitioner, was offered the shop vide Annex.2 dated 27.09.2021, after a situation arose in which, the petitioner accepted to deposit the composite fee of Rs.3,97,863/-, to be deposited in two equal installments;
the notice is for the second installment, as the first installment has already been paid and that the second installment has also been paid.
3.1. He has further drawn the attention of this Court to the Rajasthan Excise Policy, particularly, condition No.4.4 and submits that in accordance with the same, re-visitation of the composite fee was made in accordance with law and that is why, a specific composite fee was imposed upon the present petitioner in the (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (4 of 16) [CW-4433/2022] given circumstances, and thus, the petitioner now cannot claim to have been prejudiced by the composite fee. He refers to the conditions Nos.4.4 and 4.5 of the policy, which read as follows:-
"4-4 foRrh; o"kZ ds nkSjku fdlh nqdku dk iqu% cUnkscLr fd;s tkus dh fLFkfr esa lEcfU/kr nqdku dh dEiksftV Qhl dk iqu%fu/kkZj.k fd;k tk;sxkA 4-5 dEiksftV Qhl dk vuqikfrd vk/kkj ij cUnkscLr djus rFkk mldh Lohd`fr jkT; ljdkj nsxhA "
3.2. He also submits that the highest bidder No.2, the present petitioner applied for auction and while the highest bidder No.1, did not turn up, as a consequence of which, the petitioner being the highest bidder No.2, was offered the composite fee as per the terms and conditions agreed upon by him, and thus, once agreeing upon the composite fee, the petitioner cannot step back.
3.3. In support of his submissions, he relied upon the judgment rendered by Hon'ble Apex Court in the case of Assistant Excise Commissioner & Ors. Vs. Issac Peter & ORs. reported in (1994) 4 SCC 104; relevant paras of which are reproduced as hereunder:-
"14. The contract between the parties is governed by statutory provisions, i.e., provisions of the Act, the rules, the conditions of licence and the counterpart agreement. They constitute the terms and conditions of the contract. They are binding both upon the Government and the licensee. Neither of them can depart from them. It is not open to any officer of the Government to either modify, amend or alter the said terms and conditions, not even to the Minister for Excise. It is, therefore, not really necessary for our purpose to examine what precisely was the statement made by the Minister for Excise on March 19, 1981 or by the auctioning authorities at the time of auction. Even according to the licensee, the Minister merely stated that steps will be taken in the coming days to supply requisite quantities. The statement is sought to be proved by producing a newspaper report, Deshabhimani, dated March 19, 1981. On the basis of this newspaper report, it is (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (5 of 16) [CW-4433/2022] difficult to record a finding as to what exactly did the Minister say. In any event, even the newspaper report does not say that he held out an assurance to supply all such additional quantities as may be demanded by the licensees or additional quantities equal to previous year's supply. All he said was that "steps will be taken" to supply requisite quantities to arrack shops a general declaration of intent and no more. Similarly we do not know what precisely was the assurance held out by the auctioning authorities, namely, the District Collector and the Assistant Excise Commissioner who conducted the auction relating to Sultan Battery and Kalpetta ranges. According to the respondent (para 5 of WP), they "assured that necessary excess quantity of arrack should be supplied as in the previous year". The Respondents in the writ petition (appellants) have denied the said averment. The High Court has accepted the respondents' averment in the writ petition on the ground that neither the Collector nor the Assistant Excise Commissioner filed affidavits denying the said averments. Learned Additional Solicitor General criticized the High Court's view on the ground that the Collector was not obliged to file his affidavit unless he was impleaded as a respondent's nominee. In any event, he says, it was not competent to any of the authorities to make any promise or give any assurance over and above those contained in the statutory provisions including the rules and conditions of licence. We agree with the latter part of the submission of the teamed Solicitor General. We do not wish to go into the disputed question whether any such statement was indeed made by the said officials. It is enough to note that they were not competent to hold out any such promise nor any such promise can clothe the licensees with any legally enforceable rights. We shall, therefore, go strictly by what is contained in the statutory provisions.
23. Maybe these are cases where the licensees took a calculated risk. Maybe they were not wise in offering their bids. But in law there is no basis upon which they can be relieved of the obligations undertaken by them under the contract. It is well known that in such contracts which may be called executory contracts there is always an element of risk. Many an unexpected development may occur which may either cause loss to the contractor or result in large profit. Take the very case of arrack contractors. In one year, there may be abundance of supplies accompanied by good crops induced by favourable weather conditions; the contractor will make substantial profits during the (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (6 of 16) [CW-4433/2022] year. In another year, the conditions may be unfavourable and supplies scarce. He may incur loss. Such contracts do not imply a warranty or a guarantee of profit to the contractor. It is a business for him profit and loss being normal incidents of a business. There is no room for invoking the doctrine of unjust enrichment in such a situation. The said doctrine has never been invoked in such business transactions. The remedy provided by Article 226, or for that matter, suits, cannot be resorted to wriggle out of the contractual obligations entered into by the licensees.
24. Learned counsel for the respondents sought to invoke the rule of promissory estoppel and estoppel by conduct. The attempt is a weak one for the said rules cannot be invoked to alter or amend specific terms of contract nor can they avail against statutory provisions. Here, all the terms and conditions of contract, being contained in the statutory rules, prevail.
25. Learned counsel for the respondents also sought to rely upon the rule of legitimate expectation which the licensees entertained in view of the practice during previous years. Firstly, the rule cannot be invoked to modify or vary the express terms of contract, more so when they are statutory in nature. No decision has been brought to our notice supporting the said proposition. Secondly, in view of the scarcity that had developed during the last two months of the previous excise year (i.e., during February and March, 1981), the plea of legitimate expectation sounds quite weak. That the bidders were apprehensive and highly sceptical of alleged official assurances is proved by the repeated adjournment of auction and the fact pleaded by the licensees themselves that during the said excise year (1981-82) half the shops in the State remained unsold. It is inconceivable that the licensees yet expected legitimately that additional supplies equal to the previous year's additional supplies would be supplied during this year. The plea is unacceptable.
26. Learned counsel for respondents then submitted that doctrine of fairness and reasonableness must be read into contracts to which State is a party. It is submitted that the State cannot act unreasonably or unfairly even while acting under a contract involving State power. Now, let us see, what is the purpose for which this argument is addressed and what is the implication? The purpose, as we can see, is that though the contract says that supply of additional quota is discretionary, it must be read as obligatory at least to the extent of previous year's supplies by (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (7 of 16) [CW-4433/2022] applying the said doctrine. It is submitted that if this is not done, the licensees would suffer monetarily. The other purpose is to say that if the State is not able to so supply, it would be unreasonable on its part to demand the full amount due to it under the contract. In short, the duty to act fairly is sought to be imported into the contract to modify and alter its terms and to create an obligation upon the State which is not there in the contract. We must confess, we are not aware of any such doctrine of fairness or reasonableness. Nor could the learned counsel bring to our notice any decision laying down such a proposition. Doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. Just as principles of natural justice ensure fair decision where the function is quasi- judicial, the doctrine of fairness is evolved to ensure fair action where the function is administrative. But it can certainly not be invoked to amend, alter or vary the express terms of the contract between the parties. This is so, even if the contract is governed by statutory provisions, i.e., where it is a statutory contract or rather more so. It is one thing to say that a contract every contract must be construed reasonably having regard to its language. But this is not what the licensees say. They seek to create an obligation on the other party to the contract, just because it happens to be the State. They are not prepared to apply the very same rule in converse case, i.e., where the State has abundant supplies and wants the licensees to lift all the stocks. The licensees will undertake no obligation to lift all those stocks even if the State suffers loss. This one-sided obligation, in modification of express terms of the contract, in the name of duty to act fairly, is what we are unable to appreciate. The decisions cited by the learned counsel for the licensees do not support their proposition. In Dwarkadas Marfatia v. Board of Trustees of the Port of Bombay 7 it Was held that where a public authority is exempted from the operation of a statute like Rent Control Act, it must be presumed that such exemption from the statute is coupled with the duty to act fairly and reasonably. The decision does not say that the terms and conditions of contract can be varied, added or altered by importing the said doctrine. It may be noted that though the said principle was affirmed, no relief was given to the appellant in that case. Shrilekha Vidyarthi v. State of U.P.8 was a case of mass termination of District Government Counsel in the State of U.P. It (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (8 of 16) [CW-4433/2022] was a case of termination from a post involving public element. It was a case of non-government servant holding a public office, on account of which it was held to be a matter within the public law field. This decision too does not affirm the principle now canvassed by the learned counsel. We are, therefore, of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts. It must be remembered that these contracts are entered into pursuant to public auction, floating of tenders or by negotiation. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. There can be no question of the State power being involved in such contracts. It bears repetition to say that the State does not guarantee profit to the licensees in such contracts. There is no warranty against incurring losses. It is a business for the licensees. Whether they make profit or incur loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more to the State in case they make substantial profits. We reiterate that what we have said hereinabove is in the context of contracts entered into between the State and its citizens pursuant to public auction, floating of tenders or by negotiation. It is not necessary to say more than this for the purpose of these cases. What would be the position in the case of contracts entered into otherwise than by public auction, floating of tenders or negotiation, we need not express any opinion herein."
3.4. He also relied upon the judgment rendered by Hon'ble Apex Court in the case of Union of India Vs. Association of Unified Telecom Service Providers of India & Ors. reported in (2020) 3 SCC 525; Relevant paras of which are reproduced as hereunder:-
(Downloaded on 12/11/2023 at 12:19:31 AM)[2023/RJJD/014029] (9 of 16) [CW-4433/2022] "19. While answering second substantial question of law, namely, whether TRAI and the Tribunal have the jurisdiction to decide the validity of the terms and conditions of the licence including the definition of adjusted gross revenue finalised by the Central Government and incorporated in the licence, this Court observed and held as under:
"37. A bare perusal of subsection (1) of Section 4 of the Telegraph Act shows that the Central Government has the exclusive privilege of establishing, maintaining, and working telegraphs. This would mean that only the Central Government, and no other person, has the right to carry on telecommunication activities.
39. The proviso to subsection (1) of Section 4 of the Telegraph Act, however, enables the Central Government to part with this exclusive privilege in favour of any other person by granting a licence in his favour on such conditions and in consideration of such payments as it thinks fit. As the Central Government owns the exclusive privilege of carrying on telecommunication activities and as the Central Government alone has the right to part with this privilege in favour of any person by granting a licence in his favour on such conditions and in consideration of such terms as it thinks fit, a licence granted under the proviso to subsection (1) of Section 4 of the Telegraph Act is in the nature of a contract between the Central Government and the licensee.
40. A Constitution Bench of this Court in State of Punjab v.
Devans Modern Breweries Ltd. [(2004) 11 SCC 26] relying on Har Shankar case [(1975) 1 SCC 737] and Panna Lal v. State of Rajasthan [(1975) 2 SCC 633] has held in para 121 at p. 106 that issuance of liquor licence constitutes a contract between the parties. Thus, once a licence is issued under the proviso to subsection (1) of Section 4 of the Telegraph Act, the licence becomes a contract between the licensor and the licensee. Consequently, the terms and conditions of the licence, including the definition of adjusted gross revenue in the licence agreement are part of a contract between the licensor and the licensee. We have to, however, consider whether the enactment of the TRAI Act in 1997 has in any way affected the exclusive privilege of the Central Government in respect of the telecommunication activities and altered the contractual nature of the licence granted to the licensee under the proviso to subsection (1) of Section 4 of the Telegraph Act.
41. Section 2(e) of the TRAI Act quoted above defines "licensee" to mean any person licensed under subsection (1) of Section 4 of the Telegraph Act for providing specified public telecommunication services and Section 2(ea) defines "licensor" to mean the Central Government or the telegraph authority who grants a licence under Section 4 of the Telegraph Act. Subsection 2(k) defines "telecommunication service" very widely so as to include all kinds (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (10 of 16) [CW-4433/2022] of telecommunication activities. These provisions under the TRAI Act do not affect the exclusive privilege of the Central Government to carry on telecommunication activities nor do they alter the contractual nature of the licence granted under the proviso to subsection (1) of Section 4 of the Telegraph Act.
43. These provisions in the TRAI Act show that notwithstanding subsection (1) of Section 4 of the Telegraph Act vesting exclusive privilege in the Central Government in respect of telecommunication activities and notwithstanding the proviso to subsection (1) of Section 4 of the Telegraph Act vesting in the Central Government the power to decide on the conditions of licence including the payment to be paid by the licensee for the licence, TRAI has been conferred with the statutory authority to make recommendations on the terms and conditions of the licence to a service provider and the Central Government was bound to seek the recommendations of TRAI on such terms and conditions at different stages, but the recommendations of TRAI are not binding on the Central Government, and the final decision on the terms and conditions of a licence to a service provider rested with the Central Government. The legal consequence is that if there is a difference between TRAI and the Central Government with regard to a particular term or condition of a licence, as in the present case, the recommendations of TRAI will not prevail and instead the decision of the Central Government will be final and binding.
44. In contrast to this recommendatory nature of the functions of TRAI under clause (a) of subsection (1) of Section 11 of the TRAI Act, the functions of TRAI under clause (b) of subsection (1) of Section 11 of the TRAI Act are not recommendatory. This will be clear from the very language of clause (b) of subsection (1) of Section 11 of the TRAI Act which states that TRAI shall discharge the functions enumerated under subclauses (i), (ii) and (ix) under clause (b) of subsection (1) of Section 11 of the TRAI Act. Under clause (c) of subsection (1) of Section 11 of the TRAI Act, TRAI performs the function of levying fees and other charges in respect of different services and under clause
(d) of subsection (1) of Section 11, the Central Government can entrust to TRAI other functions. These functions of TRAI under clauses (c) and (d) of subsection (1) of Section 11 of the TRAI Act are also not recommendatory in nature. That the functions of TRAI under clause (a) are recommendatory while the functions of TRAI under clauses (b), (c) and (d) are not recommendatory will also be clear from provisos first to fifth which refer to the recommendations of TRAI under clause (a) of subsection (1) of Section 11 of the TRAI Act and not to clauses (b), (c) and (d) of subsection (1) of Section 11 of the TRAI Act.
45. The scheme of the TRAI Act therefore is that TRAI being an expert body discharges recommendatory functions under clause
(a) of subsection (1) of Section 11 of the TRAI Act and discharges regulatory and other functions under clauses (b),
(c) and (d) of subsection (1) of Section 11 of the TRAI Act. TRAI being an expert body, the recommendations of TRAI under clause
(a) of subsection (1) of Section 11 of the TRAI Act have to be (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (11 of 16) [CW-4433/2022] given due weightage by the Central Government, but the recommendations of TRAI are not binding on the Central Government. On the other hand, the regulatory and other functions under clauses (b), (c) and (d) of subsection (1) of Section 11 of the TRAI Act have to be performed independent of the Central Government and are binding on the licensee subject to only appeal in accordance with the provisions of the TRAI Act.
46. A reading of Section 14(a)(i) of the TRAI Act would show that the Tribunal has the power to adjudicate any dispute between a licensor and a licensee. A licensor, as we have seen, has been defined under Section 2(ea) of the TRAI Act to mean the Central Government or the Telegraph Authority who grants a licence under Section 4 of the Telegraph Act and a licensee has been defined in Section 2(e) of the TRAI Act to mean any person licensed under subsection (1) of Section 4 of the Telegraph Act providing specified telecommunication services. The word "means" in Sections 2(e) and 2(ea) of the TRAI Act indicates that the definitions of licensee and licensor in Sections 2(e) and 2(ea) of the TRAI Act are exhaustive and therefore would not have any other meaning. As Justice G.P. Singh puts it in his book Principles of Statutory Interpretation, 12th Edn., at pp. 17980:
"... When a word is defined to 'mean' such and such, the definition is prima facie restrictive and exhaustive;"
47. A dispute between a licensor and a licensee referred to in Section 14(a)(i) of the TRAI Act, therefore, is a dispute after a person has been granted a licence by the Central Government or the Telegraph Authority under subsection (1) of Section 4 of the Telegraph Act and has become a licensee and not a dispute before a person becomes a licensee under the proviso to subsection (1) of Section 4 of the Telegraph Act. In other words, the Tribunal can adjudicate the dispute between a licensor and a licensee only after a person had entered into a licence agreement and become a licensee and the word "any" in Section 14(a) of the TRAI Act cannot widen the jurisdiction of the Tribunal to decide a dispute between a licensor and a person who had not become a licensee. The result is that the Tribunal has no jurisdiction to decide upon the validity of the terms and conditions incorporated in the licence of a service provider, but it will have the jurisdiction to decide "any" dispute between the licensor and the licensee on the interpretation of the terms and conditions of the licence.
48. Coming now to the facts of the cases before us, Clause (iii) of the Letter dated 2271999 of the Government of India, Ministry of Communications, Department of Telecommunications, to the licensees quoted above made it clear that the licence fee was payable with effect from 18 1999 as a percentage of gross revenue under the licence and the gross revenue for this purpose would be total revenue of the licensee company excluding the PSTN related call charges paid to DoT/MTNL and service tax calculated by the licensee on behalf of the Government from the subscribers. It was also made clear in the aforesaid Clause (iii) that the Government was to take a final decision after receipt of TRAI's recommendation on not only the percentage of revenue share but also the definition of revenue. In accordance with this (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (12 of 16) [CW-4433/2022] Clause (iii), the Government took the final decision on the definition of adjusted gross revenue and incorporated the same in the licence agreement. Once the licensee had accepted Clause
(iii) of the Letter dated 2271999 that the licence fee would be a percentage of the gross revenue which would be the total revenue of the licensee company and had also accepted that the Government would take a final decision not only with regard to the percentage of revenue share but also the definition of revenue for this purpose, the licensee could not have approached the Tribunal questioning the validity of the definition of adjusted gross revenue in the licence agreement on the ground that adjusted gross revenue cannot include revenue from activities beyond the licence.
49. If the wide definition of adjusted gross revenue so as to include revenue beyond the licence was in any way going to affect the licensee, it was open for the licensees not to undertake activities for which they do not require licence under Section 4 of the Telegraph Act and transfer these activities to any other person or firm or company. The incorporation of the definition of adjusted gross revenue in the licence agreement was part of the terms regarding payment which had been decided upon by the Central Government as a consideration for parting with its rights of exclusive privilege in respect of telecommunication activities and having accepted the licence and availed the exclusive privilege of the Central Government to carry on telecommunication activities, the licensees could not have approached the Tribunal for an alteration of the definition of adjusted gross revenue in the licence agreement.
50. Regarding the recommendations of TRAI under Section 11(1)
(a)(i) of the TRAI Act, we find that the Tribunal in its order dated 772006 has held that the opinion of the renowned expert on Accountancy that any other definition of adjusted gross revenue would lead to reduction of licence fee liability by way of accounting jugglery was not placed before TRAI and as a result there was no proper and effective consultation with TRAI and the weightage that was due to the recommendations of TRAI was not given effect to. In our considered opinion, if the Tribunal found that there was no effective consultation with TRAI on the opinion of the expert on accountancy, the Tribunal could have at best, if it had the jurisdiction to decide the dispute, directed TRAI to consider the opinion of the expert on accountancy and send its recommendations to the Central Government and directed the Central Government to consider such fresh recommendations of TRAI as provided in the provisos to Section 11(1) of the TRAI Act. Instead, the Tribunal has considered the recommendations of TRAI and passed the impugned fresh order dated 3082007 contrary to the very provisions of Section 11(1)(a) of the TRAI Act and the provisos thereto. At any rate, as the Central Government has already considered the fresh recommendations of TRAI and has not accepted the same and is not agreeable to alter the definition of adjusted gross revenue, the decision of the Central Government on the point was final under the first proviso and the fifth proviso to Section 11(1) of the TRAI Act, 1997.
(Downloaded on 12/11/2023 at 12:19:31 AM)[2023/RJJD/014029] (13 of 16) [CW-4433/2022]
53. In State of U.P. v. Devi Dayal Singh [(2000) 3 SCC 5] a truck owner, Devi Dayal Singh, challenged the right of the State Government to recover by way of toll under Section 2 of the Tolls Act, 1851, an amount for the actual construction of the bridge. This Court held that Section 2 of the Tolls Act, 1851 which enables the State Government to levy toll at such rates "as it thinks fit" and the only restriction is latent in the word "toll" itself. This was therefore not a case of a dispute between the Government and the contractor where the contractor had challenged a stipulation of the contract. In the present case, on the other hand, the licensees had accepted the terms of the licence and after having taken the benefits of the licence are now trying to wriggle out from the terms of the licence and in particular the definition of the adjusted gross revenue.
55. On the other hand, we find from the long line of decisions in Har Shankar v. Excise & Taxation Commr. [(1975) 1 SCC 737], Govt. of A.P. v. Anabeshahi Wine & Distilleries (P) Ltd. [(1988) 2 SCC 25 : 1988 SCC (Tax) 147], Excise Commr. v. Issac Peter [(1994) 4 SCC 104], State of Orissa v. Narain Prasad [(1996) 5 SCC 740], State of M.P. v. KCT Drinks Ltd. [(2003) 4 SCC 748], State of Punjab v. Devans Modern Breweries Ltd. [(2004) 11 SCC 26], Shyam Telelink Ltd. v. Union of India [(2010) 10 SCC 165 :
(2010) 4 SCC (Civ) 99] and in Bharti Cellular Ltd. v. Union of India [(2010) 10 SCC 174 : (2010) 4 SCC (Civ) 108], that this Court has consistently taken a view that once a licensee has accepted the terms and conditions of a licence, he cannot question the validity of the terms and conditions of the licence before the court. We, therefore, hold that TRAI and the Tribunal had no jurisdiction to decide on the validity of the definition of adjusted gross revenue in the licence agreement and to exclude certain items of revenue which were included in the definition of adjusted gross revenue in the licence agreement between the licensor and the licensee."
86. DOT has urged that the Central Government has exclusive privilege under section 4 of the Telegraph Act; thus, it is bound to get the best price for natural resources. To part with the exclusive privilege under the revenue sharing regime is extremely beneficial to the licensees. Thus, the State must get the price for its valuable right as mandated under Article 14. In our opinion, there is no doubt that the State is a trustee of the natural resources and is obliged to hold it for the benefit of the citizens but also to ensure equal distribution to subserve the common good as observed under Article 39 of the Constitution of India in Re : Natural Resources Allocation, 2012 (10) SCC 1. The Government being the sole repository of all the resources in the country, also has the exclusive power to determine the licence conditions at which it parts with the exclusive right to the resources. Government has to make an effort to get the best price for its valuable rights and cannot throw them away, and there would be no (Downloaded on 12/11/2023 at 12:19:31 AM) [2023/RJJD/014029] (14 of 16) [CW-4433/2022] arbitrariness in the same as observed in State of Orissa & Ors. v. Harinarayan Jaiswal & Ors., (1972) 2 SCC 36, thus:
"13. Even apart from the power conferred on the Government under Sections 22 and 29, we fail to see how the power retained by the Government under clause (6) of its order, dated January 6, 1971, can be considered as unconstitutional. As held by this Court in Cooverjee B. Bharucha case, one of the important purpose of selling the exclusive right to sell liquor in wholesale or retail is to raise revenue. Excise revenue forms an important part of every State's revenue. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. Hence quite naturally, the Legislature has empowered the Government to see that there is no leakage in its revenue. It is for the Government to decide whether the price offered in an auction sale is adequate. While accepting or rejecting a bid, it is merely performing an executive function. The correctness of its conclusion is not open to judicial review. We fail to see how the plea of contravention of Article 19(1)(g) or Article 14 can arise in these cases. The Government's power to sell the exclusive privileges set out in Section 22 was not denied. It was also not disputed that those privileges could be sold by public auction. Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate. There is no concluded contract till the bid is accepted. Before there was a concluded contract, it was open to the bidders to withdraw their bids -- see Union of India v. Bhimsen Walaiti Ram, (1970) 2 SCR 594. By merely giving bids, the bidders had not acquired any vested rights. The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is conceded. If the Government is the exclusive owner of those privileges, reliance on Article 19(1)(g) or Article 14 becomes irrelevant. Citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to the Government--nor can there be any infringement of Article 14, if the Government tries to get the best available price for its valuable rights. ...."
(emphasis supplied)
87. Similar is the case law laid down in Har Shankar v. Excise & Taxation Commissioner, 1975 (1) SCC 737; Government of A.P. v. Anabeshahi Wine & Distilleries (P) Ltd., (1988) 2 SCC 25; Excise Commissioner v. Issac Peter, (1994) 4 SCC 104; State of Orissa v. Narain Prasad (1996) 5 SCC 740, State of M.P. v. KCT Drinks Ltd., (2003) 4 SCC 748 and State of Punjab v. Devans Modern Breweries Ltd., (2004) 11 SCC 26.
(Downloaded on 12/11/2023 at 12:19:31 AM)[2023/RJJD/014029] (15 of 16) [CW-4433/2022]
88. A licence granted under section 4(1) is in the nature of a contract. DOT has relied upon Khardah Company Ltd. v. Raymond & Co. (India) Pvt. Ltd., 1963 (3) SCR 183 in which it has been observed that once a contract has been reduced to writing, terms have to be ascertained from the agreement. It may be relevant to look into the circumstances in case need arises, which resulted in the inclusion of the definition of AGR in the licence agreement. The deliberations were held with the licensees, experts, and then finally migration package, revenue sharing regime is being consented to, was worked out in which the definition of adjusted gross revenue as a part of the financial condition of the licence is mentioned. As to the provisions of gross revenue there had been consensus ad idem between the parties. The licensees are bound by it as they have executed the licence agreement. A party is free to enter into a contract with a State, there is no compulsion, it is voluntary on both sides and binding and cannot be termed to be unfair as observed in Assistant Excise Commissioner & Ors. v. Issac Peters & Ors. (1994) 4 SCC 104, thus:
"26. .....We are, therefore, of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts. It must be remembered that these contracts are entered into pursuant to public auction, floating of tenders or by negotiation. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. There can be no question of the State power being involved in such contracts. It bears repetition to say that the State does not guarantee profit to the licensees in such contracts. There is no warranty against incurring losses. It is a business for the licensees. Whether they make a profit or incur a loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more to the State in case they make substantial profits. We reiterate that what we have said hereinabove is in the context of contracts entered into between the State and its citizens pursuant to public auction, floating of tenders or by negotiation. It is not necessary to say more than this for the purpose of these cases. What would be the position in the case of contracts entered into otherwise than by public auction, floating of tenders or negotiation, we need not express any opinion herein."(Downloaded on 12/11/2023 at 12:19:31 AM)
[2023/RJJD/014029] (16 of 16) [CW-4433/2022]
4. After hearing learned counsel for the parties, as well as perusing the record of the case alongwith the judgments cited at the Bar, this Court is of the firm opinion that the petitioner, who was the highest bidder No.2 in the e-auction is the logical beneficiary of the auction and virtually agreed upon the contract, which is Annex.2, and the terms and conditions thereof, meaning thereby, the petitioner agreed to pay the composite fee of Rs.3,97,863/- in two equal installments, which as informed, has been duly paid.
5. On a conjoint reading of conditions Nos.4.4 and 4.5 of the Rajasthan Excise Policy, as reproduced hereinabove, this Court finds that the composite fee was not applicable to the earlier auction bidders, but was specifically arrived at for the present petitioner, after due calculation, in accordance with the aforementioned conditions.
6. Thus, in light of the aforesaid observations, no cause of interference is made out in the present writ petition.
7. Consequently, the present petition is dismissed.
(DR.PUSHPENDRA SINGH BHATI), J.
176-nirmala/-
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