TMI Blog1972 (3) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... lling for tenders are done by subordinate officials. Further due publicity is necessary in adopting those methods. TOP require the Government to make an order that it is going to sell one or more of the privileges in question by negotiating with some one is to make a mockery of the law. If the Government can enter into negotiation with any person, as we think it can, it makes no sense to require it to first make an order that it is going to negotiate with that person. We must understand a provision of law reasonably. Section 29 (2) (a) does not speak of any order. It says that "the State Government may by general or special order direct". The direction contemplated by that provision is a direction to subordinate officials. It is meaningless to say that the Government should direct itself. In the result these appeals are allowed - C.A. 2024 OF 1971 - - - Dated:- 14-3-1972 - K.S. HEGDE AND P. JAGANMOHAN REDDY, JJ. For the Appellants (in both the appeals) : C. K. Daphtary, R. C. Misra, Advocate-General for the State of Orissa, Santosh Chatterjee and G. S. Chatterjee For Respondent No. 1 (in C.A. No. 2024 of 1971) : M. C. Setalvad and Vinoo Bhagat For Respondent No. 1 (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uided power and consequent by violative of Arts. 14 and 19 (1) (g) of the Constitution. The High Court was further of the opinion that monetary considerations were irrelevant for 'deciding the question whether the highest bid should be confirmed or not. Aggrieved by that decision, the State of Orissa has come up in appeal. Before proceeding to pronounce on the contentions advanced at the hearing, it is convenient to set out the relevant provisions of law as well as the orders passed by the Government under S. 29 of the Bihar and Orissa Excise Act, 1915 (as amended upto October 6, 1970) (to be hereinafter referred to as the Act). The preamble to the Act reads "Whereas it is expedient to amend and reenact the law in the Province of Bihar and Orissa relating to the import, export, transport, manufacture, possession, and sale of certain kinds of liquor and intoxicating drugs; And whereas the previous sanction of the Governor-General has been obtained,, under section 5 of the Indian Councils Act, 1892, to the passing of this Act; It is hereby enacted as follows Section 22 deals with the grant of exclusive privilege of manufacture and sale of country liquor or intoxicating drug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Excise Commissioner with the prior approval of Government and the Collector shall then issue notice for auction and give wide publicity to the same in such manner as' he considers necessary, 15 days before the date fixed for commencement of the auction; (ii) the auction shall determine the amount of monthly consideration money and shall ordinarily be conducted by the Collector and in his absence by the Additional District Magistrate; Provided that the State Government in by depute an officer from head-quarters to aid and advise the officer conducting such sales; (iii) the officer conducting the auction may satisfy himself as to the solvency of any bidder and may not allow a person of doubtful solvency or a person to whom grant of a licence for retail sale of any intoxicant is prohibited under Orissa Excise Rules, 1965 to offer bids in the auction; (iv) the officer conducting the auction shall be at liberty to close the auction if he is satisfied that, there has not been sufficient or fair competition in which case he may publicly adjourn the auction, to a specified hour on the following day or on' some other convenient day to be notified by him in the auction hall; (v) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o hereby direct that the procedure for determining the aforesaid sum in respect of the grant of exclusive privilege of manufacturing and selling by retail of country liquor in the local areas specified in the Schedules I for the year 1971-72 shall be as laid down in Schedule II hereof- SCHEDULE I . . . . . . . SCHEDULE II 1. The sum payable under sub-section (1) of Section 29 of the said Act for grant of exclusive privilege of manufacturing and selling by retail of country liquor in the aforesaid local areas shall be determined by the Excise Commissioner by calling tenders which may be for individual local area or for lots of such area as the Excise Commissioner may consider proper; 2. Tender notice shall be issued by the Excise Com- missioner and published in the Notice Board of his office the C uttack Collectorate and the offices of Sub Divisional Officers in that district and shall also be widely published in such manner as the Excise Commissioner considers necessary. 3. The tender notice shall, among other things,, mention that it is open to the State Government not to accept any tender or to order for calling fresh tenders or otherwise for such reason as they deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f selling in retail any country liquor. Section 29 empowers the Government to accept payment of a sum in consideration for the grant of any exclusive privilege under s. 22 either by calling tenders or by auction or otherwise as it may by general or special order direct. The, powers conferred on the State Government by s. 22 and s. 29 are absolute powers. As seen earlier, the validity of those provisions has not been challenged before us. Under s. 29(2) the Government had power to dispose of any of the exclusive privileges mentioned in s. 22 either by calling for tenders or by auction or otherwise as it may by general or special order direct. That being the amplitude of the power of the Government, we fail to see how the Government can be said to have conferred on itself arbitrary power under clause (6) of its order made on January 6, 1971, when it provided that : " No sale shall be deemed to be final unless confirmed by the State Government who shall be at liberty to accept or reject any bid without assigning any reason therefore." The power that the government reserved for itself under that clause is nothing more than what was conferred on it by the legislature under s. 22 and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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 Art. 19(1)(g) or Art. 14 can arise in these cases. The Government's power to sell the exclusive privileges set out in s. 22 was not denied. It was also not disputed that those privileges could be sold by public auction. Public actions 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 and ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls Ltd. and anr. v. Company Law Board and ors.( [1969] S.C.R. 311) and Rohtas Industries Ltd. v. S. T. Agarwal () [1969] 1 S.C.C. 325) . It was next urged that having had recourse to the auction method once, the Government was precluded from either calling for tenders or to sell by negotiation. The High Court has accepted that contention. We are unable to agree with the High Court in its conclusion. Neither the provisions of the Act nor the order issued by the Government lend any support to such a conclusion. Once the Government declines to accept the highest bid, the auction held became useless. Similar is the effect when the Government refused to accept the highest tender. That left the Government free to have recourse to other methods. The power given to the Government by the Act to sell the exclusive privilege in such other manner as it thinks fit is a very wide power. That power is unrestricted. It undoubtedly includes the power to sell the privileges in question by private negotiation. It was urged that before adopting the method of selling the privileges by private negotiation. The Government is required by S. 29 (2) (a) to make an order that the, privileges in question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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