TMI Blog2017 (11) TMI 1692X X X X Extracts X X X X X X X X Extracts X X X X ..... ppur District from the year 2014-15 and in how many shops there were successful bidders for the bar and the remaining shops though had a bar attached were illegally run by TASMAC themselves as there were no bidders. Irrationality - It was argued that the method of fixation of the upset price was irrational, since the volume of sales in the bar has to be considered and not the volume of sales in the retail vending shops - Held that:- Admittedly, the exclusive right to vend liquor vest with TASMAC. The licence to be granted by TASMAC for which the impugned notification has been issued, is to sell eatables and collect empty bottles in the bar attached to the shop. The normal concept of a bar cannot be adopted in the present batch of cases, unlike the bars, which are functioning in hotels where licence is granted in form FL-II and FL-III. Though the respondent/TASMAC states that the eatables ought to be sold in the “bar” attached to the shop to term the premises as a “bar” in the general sense, as it is popularly understood as incorrect. This is so because, the licensee is not permitted to vend liquor in the premises termed as “bar” attached to the shop. TASMAC does not vend liquor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Ganapatheeswaran (W.P.Nos.29869 to 29889/2017 (W.P.Nos.29893 to 29913/2017 (W.P.Nos.30193 30213 of 2017) Mr.AR.L.Sundaresan, Senior Counsel for M/s.AL.Ganthimathi (in W.P.No.29855, 29954 to 29962 /2017) Mr.Gnanadesikan Senior Counsel for M/s.Gnanadesikan Asso., (in W.P.Nos.29856 of 2017 30927 to 30929, 30193 30194/2017) Mr.R.Thirugnanam (in W.P.Nos.29863, 30119 to 30131, 30181 to 30183, 30004 to 30011/2017) Mr. M. Saravanakumar ( W.P.Nos.30112 to 30117/2017) Mr.N.Umapathi (in W.P.No.30279, 30359 to 30363/2017 For Respondents : Mr.P.Arumugarajan Standing counsel (in W.P.Nos.29727 to 29746, 30027 to 30029, 30099 to 30109, 30112 to 30117, 30119 to 30131, 30181 to 30183, 30190 to 30203, 29869 to 29889, 29954 to 29962, 29979 to 29987, 30004 to 30011, 30043 to 30056/2017, 29855 29856 29863, 30027 to 30029, 30216 to 30230 30254 30255, 30260 30261/2017) Mr.K.Satish Kumar (in W.P.Nos.29779 to 29808, 29853 29854, 29893 to 29913, 30204 to 30213/2017) W.P.Nos.29727 to 29746 of 2017, 29779 to 29808 of 2017, 29853 to 29856 of 2017, 29863, 29864 of 2017, 29869 to 29889, 29893 to 29913, 29954 to 29962, 29979 to 29987, 30004 to 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises is sublet to TASMAC for which the licensees are paid a meagre amount; (v) In terms of the clarificatory order passed by the Hon ble Supreme Court with regard to relocation of the shops which were hither to on the National Highways, the process is yet to be completed and there is no urgency in issuing the impugned tender without finalizing the relocation; (vi) By way of illustration, it is stated that in Tiruvallur, there were totally 204 retail vending shops, out of which only about 130 are functioning and the remaining have to be relocated, which is yet to be done. Similar statistics were given in respect of Kancheepuram and Chennai Districts; (vii) The volume of sales in the retail vending shop cannot be the basis for fixing the upset price as the entire stock, which is sold in the retail vending shop is not consumed in the bar attached to the shop and therefore, it is necessary that the upset price must be based on the consumption in the bar; (viii) There are other issues such as payment of GST and compelling the intending bidder to register under the Goods and Service Tax is not tenable; (ix) In Nilgiris District alone the sales figures for the past ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 445 and Kerala Samsthana Chethu Thozhilali Union vs. State of Kerala Ors., reported in (2006) 4 SCC 327. 4. Mr.P.Arumugarajan, learned Standing Counsel and Mr.K.Sathiskumar, learned counsel appearing for the respondents/TASMAC submitted that the petitioners are attempting to create a monopoly by holding over the licences by repeatedly challenging the notification issued by the TASMAC and the impugned notifications have been issued strictly in accordance with the directions issued by the Court in the earlier round of litigation. The learned counsel circulated a note containing certain details about the procedure which was adopted by TASMAC during the previous period. It is submitted that the formula adopted by TASMAC with effect from 01.03.2005, was by adopting 2.5% of the actual sale of the concerned shops as the upset price. In so far as the upset price for the Nilgiris District was fixed as 2% for urban areas and 1% for rural areas and 1.5% for Grade-III Panchayats and Special Grade Panchayats. Subsequently, with effect from 01.08.2006, the TASMAC decided that the highest monthly sale amount in the concerned shop during the previous 12 months period will be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at on account of the directions issued by the Hon ble Supreme Court, the shops on Highways had to be relocated and there was difficulty in securing suitable buildings for such relocation and when shops are relocated, the expected sales will be less when compared to the sale in the original location and in such cases, if the licence fee is fixed based on the sale in the original location, it will be high and there will not be any takers and therefore, the respondent came to the conclusion that there is need to revise the formula for fixation of the upset price and the monthly fees for the bar. Therefore, a decision was taken to be implemented for a period of one year and to be reviewed thereafter, by keeping 2.5% of the actual sale of the concerned shop as upset price and whenever shops are relocated, since the sale in the new location would not be known at the time of calling for tender. For the purpose of security deposit of two months and one month advance, the sale of the original shop may be considered; In respect of Nilgris District, the upset price for bars may be fixed at 1.5% for urban areas and 1% for rural areas of the actual sale of the concerned shops. Subsequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Heard the learned counsels appearing for the parties and carefully perused the materials placed on record. 9. The scope of interference by this Court in exercise of its jurisdiction under Article 226, while testing the correctness of the terms and conditions of a tender are fairly well settled. If the tender inviting authority is found to have taken into account the relevant facts and excluded the irrelevant facts, the Court would not interfere with the decision arrived at by the tender inviting authority. This is so because, the Court does not sit as an appellate authority against the decision and does not examine the merits of the decision. Thus, interference would be possible, if the action of the tender inviting authority is actuated by bias, his conditions of selection is mala fide or his action is irrational or arbitrary. The petitioners have placed their challenge to the impugned tender notification on the ground that it is irrational. According to the petitioners, the irrationality has occurred on account of the fact that the turnover of the retail vending shop has been taken as the basis for arriving at the security deposit/monthly fee to be offered by the intending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o inference of legal mala fides could be drawn. There is also no allegation of bias made against TASMAC by any of the petitioners. Thus, the only ground of challenge to the impugned notification is on the ground of irrationality. It was argued that the method of fixation of the upset price was irrational, since the volume of sales in the bar has to be considered and not the volume of sales in the retail vending shops. Admittedly, the exclusive right to vend liquor vest with TASMAC. The licence to be granted by TASMAC for which the impugned notification has been issued, is to sell eatables and collect empty bottles in the bar attached to the shop. The normal concept of a bar cannot be adopted in the present batch of cases, unlike the bars, which are functioning in hotels where licence is granted in form FL-II and FL-III. Though the respondent/TASMAC states that the eatables ought to be sold in the bar attached to the shop to term the premises as a bar in the general sense, as it is popularly understood as incorrect. This is so because, the licensee is not permitted to vend liquor in the premises termed as bar attached to the shop. TASMAC does not vend liquor in the premises te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary or irrational, as such conditions are contained in other agreements including the Security Deposit payable to the Electricity Board by a consumer, which is required to be increased, if the level of consumption of electricity increases. 13. The fixation of a different percentage for Nilgiris District cannot be a sole reason to strike down the impugned notification, as the respondent seeks to justify their action by stating that such was the basis ever since 2003 onwards and considering the ground realities prevailing to that District 2006 onwards, a different percentage was fixed. Above all none has a fundamental right to trade in liquor. The licence, which is proposed to be offered pursuant to the impugned tender is an adjunct to the right to trade liquor, as it is intended as a facility to the consumers who consume liquor purchased from the retail vending shop adjacent to the premises. Therefore, it has to be observed that the petitioner cannot equate the licence, which will be granted to them as any other licence issued by the Government or Government Corporations. But for the permission granted by TASMAC to create a faclity for permitting customers to consume liquor in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court holding that there is no irrationality or unreasonableness in the impugned tender notification, the decision in the case of LIC of India (supra), International Airport Authority of India (supra) would have no application to the facts of the present case. Equally, the decision in the case of Style (Dress Land) (supra) also would not be applicable to the cases on hand, as this Court was found that there is no arbitrariness or irrationality in the conditions of tender. In the case of Kerala Samsthana Chethu Thozhilali Union (supra), the challenge was to the Kerala Abkari Shops Disposal Rules, 2002 as ultra vires the Abkari Act and on the contentions raised with regard to the Constitutional validity of the Rules, a decision was rendered holding that the State while parting with exclusive privilege cannot take recourse to a doctrine take it or leave it having regard to the equity clause enshrined under Article 14 of the Constitution of India and State in its dealings must act fairly and reasonably and the bargaining power of the State does not entitle it to impose any condition it desires. The said decision can have no application to the cases on hand in the State of Tamil Na ..... X X X X Extracts X X X X X X X X Extracts X X X X
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