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TMI Blog1972 (3) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ct for the period from April 1, 1971 to March 31, 1972 will be sold by public auction on February 15, 1971 and on the following days. The auction was accordingly held on the notified day. The 1st respondent was the highest bidder for those eight shops. His bids were provisionally accepted by the Collector subject to confirmation by the Government. The Government rejected those bids being of the view that inadequate price had been offered as a result of collusion between the bidders. It ordered the Excise Commissioner to call for tenders in respect of those shops. After the tenders were duly received, the Government accepted the tender in respect of one shop and rejected the other tenders as it was again of the opinion that the price offered was inadequate. Thereafter it sold the seven shops by negotiating with some of the tenderers. The price ultimately fetched was substantially more than that offered either at the auction or as per tenders. Thereafter the 1st respondent moved the, High Court of Orissa under Art. 226 of the Constitution for a direction to the Government to confirm his bids and cause the necessary licences to be issued to him. Various pleas were taken in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered before an exclusive privilege is granted." Sub-s. (2) says : "No grantee of any privilege under sub-s. (1) shall exercise the same unless or until he has received a license in that behalf from the Collector or the Excise Commissioner." Section 29 deals with payment for grant of exclusive privilege. It reads : "(1) Instead of or in addition to, any duty leviable under this Act, the State Government may accept payment of a sum in consideration of the grant. of any exclusive privilege under section 22. (2) The sum payable under sub-s. (1) shall be determined as follows : (a) by calling tenders or by auction or otherwise as the State Government may, by general or special order direct;- and (b) by such authority and subject to such control as may be specified in such order." Excise revenue is defined in s. 2(9) : " "Excise-revenue" means revenue derived or derivable from any duty, fee, tax, payment other than a fine imposed by a Criminal Court or confiscation imposed or ordered under this Act or any other law for the time being in force relating to liquor or intoxicating drugs and includes any payment to be made to the State Government under s. 29." In exercise of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed by the State Government. 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 assig ning any reason therefore; (vii) no licence for any exclusive privilege shall be granted until acceptance of the bid is confirmed by the State Government; (viii) when any bid in an auction for any exclusive privilege is provisionally accepted but the advance deposit is not paid, the exclusive privilege shall be put to reauction as soon as possible at the risk and loss of the defaulter; (ix) all bids in an Auction shall be offered by the bidder in person or by his agent legally authorised for the purpose." As mentioned earlier in pursuance of the above order, the Collector held an auction in respect of the shops mentioned earlier. The highest bidder had made the necessary deposits. But. the Government did not accept his bids. On March 7, 1971, the Government issued the following order "Whereas for determining the sums payable for the grant of exclusive privilege of manufacturing and selling by retail of country liquor auction had been held in the district of Cuttack in accordance with the procedure laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y liquor in other shops by negotiation. Before us the writ petitioners did not challenge the validity of any of the provisions in the Act; possibly in their own interest. They are not interested in raising any contention which might vitiate the auctions held. The contentions urged on behalf of the writ petitioners have to be examined, in the background that the provisions of the Act are not contended to be invalid. One of the contentions taken on behalf of the writ petitioners was that the power retained by the Government "to accept or to reject any bid without assigning any reason therefore" in cl. (6) of the order made by the Government on January 6, 1971 in exercise of its powers under s. 29(2) of the Act was an arbitrary power and therefore it is violative of Arts. 14 and 1 9 ( 1 (g). This contention has been upheld by the High Court. It was urged on behalf of the writ petitioners that they have a fundamental right to carry on trade or business in country liquor. That right can be regulated only by imposing reasonable restrictions in the interest of the general public. Restrictions imposed by the order in question cannot be considered as reasonable restrictions in the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of the business and the conditions prevailing in a particular trade; State has power to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public and there is no inherent right in a citizen to sell intoxicating liquors by retail. In that case the court held that the provisions in the Excise Regulation 1 of 1915 purporting to regulate trade in liquor in all its different spheres are not invalid. It was further held in that case that the charge of licence fee by public auction is more in the nature of a tax than a licence fee though it is described as a licence fee. One of the purposes of the Regulation is to raise revenue. Revenue is collected by the grant of contracts to carry on trade in liquor and these contracts are sold by auction. The grantee is given a licence on payment of the auction price. The Regulation specially authorises this. The decision in Lala Harichand Sarda v. Mizo District Council and anr. ([1967] 1 S.C.R. 1012) relied on by the writ petitioner does not bear on the point under consideration. it deals with power to grant or refuse to grant licence to trade in some ordinary commodity under Lushai Hill Distt. Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 22 and 29 of the Act was not to raise revenue. Raising revenue as held by this Court in Cooverjee Bharucha's case (supra) was one of the important purposes of such provisions. The fact that the price fetched by the sale of country liquor is an excise revenue does not change the nature of the right. The sale in question is but a mode of raising revenue. Assuming that the question of arbitrary or unguided power can arise in a case of this nature, it should not be forgotten that the power to accept or reject the highest bid is given to the highest authority in the State i.e. the Government which is expected to safeguard the finances of the State. Such a power cannot be considered as an arbitrary power. If that power is exercised for any collateral purposes, the exercise of the power will be struck down. It may also be remembered that herein we are not dealing with a delegated power but with a power conferred by the legislature. The High Court erroneously thought that the Government was bound to satisfy the Court that there was collusion between the bidders. The High Court was not sitting on appeal against the order made by the Government. The inference of the Government that there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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