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11. A Division Bench of the High Court, by interim order dated 19.04.2004, directed the State Government to take a decision on the claim of first respondent after giving hearing within 10 days. Pending such decision, the High Court permitted the first respondent to lift upto 20,000 quintals of molasses. The High Court also directed that the writ petition be listed on 29.04.2004 for final hearing and disposal.

12. By order dated 20.04.2004, the State Government dissolved the earlier Molasses Sale Committee and in its place reconstituted a fresh Molasses Sale Committee. The Secretary, Sugar vide letter dated 20.04.2004 sought certain information/clarifications from the first respondent as also from Patiala Distillers and Chandigarh Distillers, and on 22.04.2004 afforded personal hearing to the Proprietor and representative of first respondent and representatives of Patiala Distillers and Chandigarh Distillers. Thereafter, on due and proper consideration of the material on record, the Secretary (Sugar), passed a detailed order dated 24.04.2004, holding that there was no valid contract for supply of molasses to first respondent and therefore the allotment letter dated 26.3.2004 was without any authority and consequently cancelled the said allotment letter issued by the Assistant Cane Commissioner allotting 85,000 quintals of molasses to the first respondent. The findings on the basis of which he cancelled the allotment letter dated 26.3.2004 are extracted below :

Moreover, on 1.3.2004 at the time of tender submission and on 3.3.2004 at the time of negotiation there were no authorization letters in favour of M/s Vardan Linkers of these two distillers from which it is very clear that M/s Vardan Linkers is not a bona fide purchaser.

(v) That in condition no.9 of the tender form it is clearly mentioned that no person will transport the molasses in Uttaranchal and Uttar Pradesh and out of these States without the prior permission of Controller of Molasses M/s Vardan Linkers has enclosed with its writ petition as Annexure No.1 and 2 which are the No Objection Certificate of Excise and Taxation Commissioner, Patiala dated 16.3.2004 issued in favour of M/s Patiala Distiller and Manufacturer and 'No Objection Certificate' dated 12.3.2004 issued in favour of Chandigarh Distillers and Bottlers, from which it is clearly evident that on 1.3.2004 on the date of submission of tenders and on 3.3.2004 at the time of negotiation they have no such certificate. No document has been produced about the approval of Controller of Molasses. From this it is clear that even on compliance of this condition the tender was not acceptable.

24. In this case, the first allotment by the Assistant Cane Commissioner was on 15.3.2004 permitting the first respondent to lift 5000 quintals from Nadehi Mills at Rs.127/- per quintals. This was wholly illegal as it was not in pursuance of any concluded contract and as first respondent was not a bona fide consumer. The first respondent submitted the authorization letter from the Patiala Distillers and the Chandigarh Distillers only on 14.3.2004. If there was already a concluded contract with the first respondent on 3.3.2004, there could not have been any change in the contract by submitting an authorization letter from Patiala Distillers and Chandigarh Distillers on 14.3.2004. There was also no correspondence or negotiations subsequent to 3.3.2004 to show that any contract was concluded in favour of Patiala Distillers or Chandigarh Distillers. Therefore, when the letter dated 26.3.2004 was issued by the Assistant Cane Commissioner authorizing the first respondent to lift 85,000 quintals of molasses it was not in pursuance of any concluded contract but was unilateral unauthorized act on the part of the Assistant Cane Commissioner which would not bind the State Government.

31. The tender notice made it clear that only bona fide consumers of molasses could make offers. The first respondent is a proprietary concern carrying on transport business at Bijnor in the State of Uttar Pradesh but the tender was submitted by the first respondent in the name and style of "Vardan Linkers, Bijnor being bona fide consumer registered industrial unit." The note added at the end of the tender stated that "we shall lift molasses in favour of distillery of UP, Punjab and Haryana". If first respondent was to lift the molasses for other units, it was admittedly not a bona fide consumer. Only on 14.3.2004, the first respondent produced authorization letters showing him as authorized agent of Patiala Distillers and Manufacturers Ltd., Patiala and Chandigarh Distillers and Bottlers Ltd., Patiala. On the basis of those letters, the first respondent requested for delivery of 45000 quintals (that is 15000 quintals each from Nadehi, Gadarpur and Doiwala Sugar Mills) to Patiala Distillers and 40,000 quintals (15,000 quintals from Sitarganj Mills and 25,000 quintals from Kiccha Mills) to Chandigarh Distillers. Though the tender was opened on 1.3.2004, the first respondent did not disclose till 14.3.2004 that he was submitting the tender on behalf of the above said two distillers in the State of Punjab. Thus, it was clear that the offer was made not by first respondent as a bona fide consumer but as a non-consumer trader. Therefore, there was no valid offer at all by the first respondent. The Assistant Cane Commissioner was fully aware that first respondent was not a bona fide consumer, he was also aware of the prevailing sale prices in regard to molasses to be sold to bona fide consumers outside the State at much higher prices than what was offered by first respondent, and also of the fact that the price for the sale of molasses to consumers within the State was much less than the rate for sale of molasses to bona fide consumers outside the State, he proceeded to negotiate with the first respondent taking only one more member (District Magistrate) into confidence. The manner in which the entire matter was proceeded with, showed collusion between the first respondent on one hand and the District Magistrate, Udham Singh Nagar and the Assistant Cane Commissioner, Udham Singh Nagar on the other hand, to dispose of large quantities of valuable molasses at a throw-away price without proper negotiations and without valid authority from the Molasses Sales Committee to a party who was not entitled to purchase molasses as a bona fide purchaser.