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*EM = Earnest Money, BG = Bank Guarantee, PDC = Post-dated cheques In the backdrop of the contention that the petitioners have already started operating the liquor shops granted to them, the respondents have denied that any of the relief prayed for in the writ petition can be granted to them.

WP-7373-2020 & connected matters

13. It is further averred in the return that due to outbreak of contagion various economic activities in the country have been disrupted and the State of Madhya Pradesh is also not aloof from the same. Apart from tackling Covid-19 outbreak, the State Government is putting various measures in place to provide financial support to the economy on all fronts. Considering the hardships and difficulties being faced by the liquor licence holders/petitioners due to Covid-19 pandemic and subsequent lockdown, the State vide order dated 31.03.2020 (Annexure R-4) has decided to waive off the licence fee for the period in financial year 2019-20 and 2020-21 during which they were unable to run their shops due to lockdown. The contractors will get waiver for the minimum guarantee amount after adjusting four dry days, which are available at the discretion of the Collector (to the extent available) for the lockdown period in financial years 2019-20 and 2020-21. The contractors who have pending annual licence fee or any other government dues for the financial year 2019-20 can extend their bank guarantees until 30th June, 2020 and can pay the amount due by 30th April, 2020. Liberty has been given to the district level committee to give a further extension in the payment date up to 31st May, 2020 on the request of the Collector. The contractors have been permitted to deposit 20% of the total prescribed bank guarantee within seven days of issue of license, another 20% within 15 days of issue of licence and the remaining 60% within 45 days of issue of licence. As many liquor shops were required to be closed due to lockdown restrictions despite issue of licences, a further relaxation in the conditions has been provided by counting the start of the period 7/15/45 days from the date the shop was legally permitted to be opened rather than from the date of issue of licence. For the year 2020-21, for renewal of the FL-2/FL-3/FL-4 and similar licences, which were in operation in 2019-20, it has been decided to allow submission of such proposals on deposit of only 50% of the prescribed licence fees. The remaining 50% of licence fees can be deposited within 30 days of issue of licence to them. The order dated 31.03.2020 (Annexure R-4) was issued by the Department of Commercial Tax, State of M.P. to the Commissioner Excise, M.P., Gwalior, who in turn has communicated such instructions to all the Collectors in the State vide separate order of even date. The relevant WP-7373-2020 & connected matters extract of the order dated 31.03.2020 (Annexure R-4) issued by the State, is reproduced as under:-

5). The contention that due to spread of the disease and extended lockdown the financial capacity of the people to buy liquor would be severely affected and the contract has become impossible to perform, has been termed as mere apprehension of the petitioners looking to the trends of sale of liquor received on the first day of opening of the liquor shops after lockdown. If the petitioners violate any terms of the licence or the Excise policy 2020-21, the respondents reserve their right to cancel the licence, forfeit the bank guarantee and deposits and re-auction the liquor shops.

(B) Mandatory conditions of the Excise Policy and Excise Act were not completed before issuing the licence. Therefore, the licence is not valid and there is no concluded contract:

iii. Section 17 of the Excise Act clearly mandates and makes a bar that there shall be no sale of intoxicant without the licence. As per the Excise Policy 2020-21, the licence period is to commence from 01.04.2020 to 31.03.2021. Thus, the licence to operate the liquor vends was to be issued on or before 01.04.2020 but admittedly it had not been issued due to lockdown imposed w.e.f. 25.03.2020. Similarly, there were certain other mandatory requirements of the Excise Policy 2020-21 i.e. security deposit in the form of bank guarantee in terms of Clause 10 and post-dated cheques towards additional security deposit (1/12th of the value of 95% in terms of Clause 20 of the policy) were also to be deposited by the successful bidders before 31.03.2020. Deposit of security is the pre-requisite for grant of licence. After acceptance of offer, the counterpart agreement was also to be executed in terms of Clause 21 of the policy. An affidavit as per clause 18.3, which was uploaded at the time of the bid by the bidders, was to be submitted in original. All these conditions could not be fulfilled owing to lockdown declared on 24.03.2020. The documentation and the payment taken together as such shall alone constitute entitlement for licence but the respondents themselves were not in a position to complete these mandatory requirements for issue of a licence within the timeline stipulated under the Excise policy. This, in itself, shows that there was no concluded or valid contract between the parties, WP-7373-2020 & connected matters therefore, question of wriggling out of the same does not arise. It was argued with vehemence that if a statutory contract requires the contract to be made in a particular manner then it has to be made in that manner only and not in any other manner. To bolster this submission, learned counsel relied upon the judgment of the Privy Council in Nazir Ahmad vs. King Emperor (AIR 1936 PC 253).

28. Mr. Nagrath, learned senior counsel for the petitioners submitted that the status of the petitioners as on 1st April, 2020 is to be adjudicated. It is to be seen whether the petitioners assumed the status of a licensee or a prospective licensee as on 1st April, 2020 i.e. the date on which the licence period was to be commenced but due to lockdown imposed by the Government it could not WP-7373-2020 & connected matters commence. The status of the petitioners is not that of a licensee, therefore, there was no concluded contract and even the subsequent amendment is not binding upon the petitioners. Clause 9.4 of the Excise policy stipulates that if the remaining amount of the earnest money is not deposited within the prescribed period of three days from the date of execution or before 31 st March, 2020 as the case may be, the offer made by the group/individual group of the liquor shop would stand cancelled and the same will be reauctioned. Thus, the petitioners cannot be unilaterally compelled to complete the contract. Learned counsel further argued that the State Government was insisting upon the cancellation of the bids of the petitioners. The State has not uttered that they shall cancel the licence of the petitioners. Therefore, by no stretch of imagination it can be said that the process was continuing and the contract itself was concluded. Only the bidding process was complete. After acceptance of the bids no further steps were taken by the respondents, as from 20th March, 2020, Section 144 of CrPC was imposed and w.e.f. 25th March, 2020 onwards lockdown was imposed. After acceptance of the offers, the steps which were required to be taken were not ministerial and miscellaneous. It had the penal consequences and non-compliance of the same would have entailed cancellation of the bids. Once the non-fulfillment of the requirements, which were to be completed by the contractors, was to result in cancellation of bids then they cannot be said to be mere ministerial formalities and that the process was complete or the contract was concluded. Sections 3 to 9 of the Contract Act deal with acceptance and counteroffer. The amendment in the Excise Policy is nothing but a counteroffer made by the State Government as it has imposed new conditions and fixed new licence fee with new time schedule etc.