Judgment :- 1. The privilege of vending toddy, arrack and foreign liquor, during the period from 1st April 1968 to 31st March 1969 in independent retail shops, was sold in public auction by the Government under the provisions of S.18- A of the Abkari Act I of 1077. The petitioner is stated to be a joint bidder in respect of the toddy shop No. 6/68-69 of Ottapalam Range, his co-bidder or his partner, being the 4th respondent. The 'petitioner disputes his having participated In the auction, but the allegation in the counter-affidavit is that the petitioner and the 4th respondent jointly signed the sale list on 5 31968- I shall assume, without deciding at this stage, that the petitioner is a joint bidder, as the main argument was, that even if he was, the liability now sought to be enforced was not attracted. Three-tenth of the bid amount as required by the conditions of auction was not deposited; nor was any agreement executed as contemplated by the same, A notice of reauction was issued in November 1968, and the shop was resold. For damages incurred by the Government consequent on the re-auction of the shop, Ex. P1 notice dated 19-9-1969 was issued to the petitioner and the 4th respondent, intimating that a sum of Rs. 13,070.73 together with interest at 9% was due towards Abkari arrears in respect of toddy shop No. 6/68-69, and requiring remittance of the same within the specified time; on default of which, revenue recovery proceedings were threatened. Ex.P2 dated 29-9-1969 is a copy of the petitioner's reply. It stated that the petitioner had not bid in auction any toddy shop in Ottappalam Range in 1968-69 and no amount was due from him, and that he had, in answer to an earlier notice, denied having signed the sale list. Ex. P3 dated 29-12-1969 is yet another notice by the 2nd respondent in similar terms as Ex. P1. The petitioner has prayed to quash Exs. P1 and P3 and to direct respondents 1 to 3 by a writ of mandamus or other appropriate writ or direction to conduct an enquiry about the liability of the petitioner for arrears shown in Exs. P1 and P3 before proceeding to recover the same. 2. P1. The petitioner has prayed to quash Exs. P1 and P3 and to direct respondents 1 to 3 by a writ of mandamus or other appropriate writ or direction to conduct an enquiry about the liability of the petitioner for arrears shown in Exs. P1 and P3 before proceeding to recover the same. 2. The main contention was that in the absence of any confirmation of the sale and the execution of any agreement in conformity with Art.299 of the Constitution of India, the petitioner is not liable to be proceeded against under the Revenue Recovery Act, in respect of the Abkari arrears specified in Exs. P1 and P3. For the State, reliance has been placed on S.28 of the Abkari Act 1077 to fasten liability on the petitioner. The said section reads: "28. Recovery of duties: All duties, taxes, fines and fees payable :to the Government direct under any of the foregoing provisions of this Act or of any licence or permit issued under it, and all amounts due to the Government by any grantee of a privilege or by any farmer under this Act or by any person on account of any contract relating to the Abkari Revenue may be recovered from the person primarily liable to pay the same or from his surety (if any) as if they were arrears of land revenue, and, in case of default made by a grantee of a privilege or by a farmer, the Commissioner may take grantor farm under management at the risk of the, defaulter or may declare the grant or farm forfeited, and re-sell it at the risk and loss of the defaulter. When a grant or farm is under management under this section, the Commissioner may recover any moneys due to the defaulter by any lessee or assignee as if they were arrears of Land Revenue." It is plain from the section that the petitioner would fall within its ambit if he is either the "grantee of a privilege"' or "any person" from whom the amounts are due "on account of any contract" relating to Abkari revenues. I shall first consider whether the petitioner can be regarded as the "grantee of a privilege". I shall first consider whether the petitioner can be regarded as the "grantee of a privilege". The extreme argument was, that he cannot be regarded as such, unless after the confirmation of the auction and the execution of the agreement, a licence had been issued to him as required by S.18-A of the Act. A look at that section itself is sufficient to dispel this contention. Clause (I) of the section provides that it shall be lawful for the Government to grant to any person on such conditions and for such period as they may deem fit, the exclusive privilege, inter alia, of selling by retail any liquor within a local area on payment of an amount as rental in consideration of the grant of such privilege. The amount of rental may be settled by auction, negotiation or other method and collected to the exclusion of. or in addition to, the duty of excise leviable under S.17 and 18. Clause (2) of S.18-A reads: "18-A;(2). No grantee of any privilege under sub section (1) shall exercise the same until be has received a licence in that behalf from the Commissioner." The clause itself seems to make a distinction between the grant of the privilege and the exercise thereof, and a licence is required only for the latter- By implication, the grant is complete even without the aid of the licence. S.18-A (1) again, draws a distinction between the grantee of a privilege and a person from whom amounts are due on account;of contract. This assumes, that to fall under the former category there need not be a concluded contract stricto sensu. That clause states that the Government can grant the privilege to any person "on such conditions" as they may deem fit. To a question by me whether the Government could not stipulate that the grant of a privilege would be complete the moment the hammer fell as the bid was knocked down in favour of the highest bidder, the petitioner's Counsel had perforce to answer is the affirmative. Further indications are also afforded by the notification published in the gazette regarding the terms and conditions of the sale, under S.18-A and S.29 of the Act. Clause (10) of the notification reads: "10. Further indications are also afforded by the notification published in the gazette regarding the terms and conditions of the sale, under S.18-A and S.29 of the Act. Clause (10) of the notification reads: "10. No person declared to be the auction purchaser by the officer conducting the sale shall withdraw from the offer and he shall at once execute a temporary agreement on such forms as may be prescribed by Government. He shall make a deposit in cash before the close of the auction for the day equivalent to not less than five per cent of the amount of his bid or such other higher amount as the officer conducting the sale prescribes and shall also if demanded furnish personal surety. Should be fail to do so, the earnest money paid by him under condition (1) will be forfeited and the right to vend again put to auction by the officer conducting the sale either immediately or on a future date to be notified or. otherwise disposed of at the discretion of the Board of Revenue. The re-auction will be at the risk of the (defaulter) 1st auction purchaser who cannot lay claim to any gain accruing from the re-auction, but in the event of loss he will be required to make good the deficiency between the total amount payable by him for the whole period under the terms of the original sale and the total amount payable by the re-auction purchaser. In the event of loss, the loss amount with interest thereon will be recoverable from the first auction purchaser in the same manner as if it were an arrear of land revenue. Disposal otherwise includes closure or departmental management. The defaulter will be debarred from bidding again for the same or any other Abkari privilege during the contract period and the shop shall be resold or otherwise disposed of at the defaulter's risk." Clause 13 provides that no sale shall be final as against the Government unless confirmed by Board of Revenue. And Clause (17) provides: "17. The purchaser of the privilege is liable to the penalties prescribed for breaches of the conditions under these rules, though a formal licence may not have been issued to him. And Clause (17) provides: "17. The purchaser of the privilege is liable to the penalties prescribed for breaches of the conditions under these rules, though a formal licence may not have been issued to him. In the event of the purchaser's death after issue of the licence, his heirs and nominees shall be responsible for all the moneys that may become due to Government under the terms of the licence. They shall also be liable for the proper observance of all the conditions of the licence unless the Assistant Excise Commissioner cancels the contract." The inability to withdraw from the bid, and the incidence of liability do hors the issue of a licence are significant. In view of these provisions, I am unable to accept the contention of the petitioner that the grant of a privilege is complete only if the auction has been confirmed and/or, the agreement has been duly executed by the purchaser, and/or, the licence had been issued to him a contemplated by S.18-A (2) of the Act. The passages cited from page 338 of the 12th Edition of Salmond's Jurisprudence on the jurisprudential concept of licences and privileges and as to whether they are rights in rem or rights is personam, do not detract from this conclusion. 3. If, as I hold, the petitioner is the "grantee of a privilege" by reason of bis having bid jointly or individually at the auction and the bid having been knocked down in bis favour, the liability for abkari dues is attracted by S.28 of the Act. That was the view taken by my learned brother, Mathew J., in Madhavan v. The Assistant Commissioner, Palghat (ILR.1969 (2) Kerala 95). Although the Division Bench did not expressly advert to this part of the reasoning of Mathew J., it did not demur to it, and sustained liability on the ground that there was a concluded contract, the moment the hammer fell. 4. In O. P. No. 5076 of 1968, I held that the petitioners in that writ petition who bad defaulted payment of part of the bid amount and had not executed any agreements in favour of the Government, were covered by S.28 of the Act, as they were grantees of the privilege of vending toddy. Writ Appeal No. 126 of 1971 preferred against the same was summarily dismissed in admission. Writ Appeal No. 126 of 1971 preferred against the same was summarily dismissed in admission. Counsel for the petitioner admitted that the decision, in so far as it went, was directly against him. But be argued that the question as to whether a person in whose favour the auction had not even been confirmed, can be regarded as the grantee of a privilege was never specifically or pointedly argued in O.P. No. 5076 of 1968. I therefore heard full arguments de novo, and have no regrets for having done so. 5. Being the "grantee of a privilege", it is unnecessary to consider whether the petitioner can also be made liable as a person from whom amounts are due "on account of a contract". As the matter was elaborately argued, I may briefly express myself. It was stressed that the "contract" here contemplated was only a lawful and valid contract, and where, as here, the contract does not conform to Art.299 of the Constitution, the same was outside the purview of the section. It was also Said that a claim for damages for breach of contract could not be said to be for amounts due "on account of a contract". The ruling of the Division Bench tin Damodaran v. State of Kerala 1969 KLT. 587, is directly against the petitioner. Adverting to the argument based on Art.299 of the Constitution, and to the ruling of the Supreme Court in K. P. Chowdhuri v. State of Madhya Pradesh (AIR. 1967 SC. 203), the Division Bench ruled that even if no contract in writing is entered into in pursuance of the auction, as soon as the hammer fell, there was a concluded contract between the highest bidder and the State. In O. P. No. 5076 of 1968, adverting to the decision of Mathew J., and of the Division Bench which confirmed it, and to the different strands of reasoning on which liability was sustained by these decisions, I observed: "Whether on the basis of S.28 of the Abkari Act accepted by the Single Judge, or on the basis of the reasoning of the Division Bench ruling, which affirmed it, the petitioners cannot contend that Exs. P1(a) and P1(b) are bad in law." As noticed, Writ Appeal No. 126 of 1971 against the decision was dismissed in limine. 6. P1(a) and P1(b) are bad in law." As noticed, Writ Appeal No. 126 of 1971 against the decision was dismissed in limine. 6. Certain decisions were cited by counsel for the petitioner to escape liability, to which I shall now refer. The decision in Somasundaram Pillai v. Government of Madras (AIR. 1947 Mad. 366) has no application, and is distinguishable on facts and on principle. There, licences in respect of certain arrack shops were put up for sale by public auction by the Sub Collector, Tindi-vanam who provisionally accepted the bid of the aggrieved suitor. But there was no final acceptance of the bid by the Collector, who was the lawful authority to do so. The aggrieved party withdrew his bid and claimed back his deposit. As noticed in the judgment, it was conceded that the publication of the conditions of sale did not amount to a statutory notification under S.69 of the Madras Abkari Act. The only question which fell for decision was whether a bid, made at such an auction and provisionally accepted, can be enforced notwithstanding that the bidder withdrew before final acceptance by the Collector; and this, the Division Bench noted, had to be decided in the light of the law of contracts. It answered the question in favour of the aggrieved suitor. The principle of the decision was followed in Linga Gounder v. State of Madras (AIR. 1971 Madras 28). 7. The position here disclosed is fundamentally different. For the one thing, the notification under which the auction is conducted is a statutory one under S.18-A and 29 of the Abkari Act (vide Chandy Pillai v. State of Kerala 1959 KLT. 1278). The later Madras decision itself (AIR. 1971 Mad. 28), recognises that a statutory provision precluding withdrawal of a bid before acceptance, may make a difference to the conclusion. As noticed, S.18-A of the Act and the conditions of the notification constitute such statutory provisions. 8. The decision of the Full Bench in Joseph Abraham v. Tahsildar, Meenachil (ILR.19711 Kerala 618) has again no application. The case was decided on the short and the only ground that there was no evidence to snow that the petitioner (who was sought to be proceeded 'against for failure of the auction purchaser of abkari shops to deposit 10% of the bid amount) has actually stood surety for the purchaser. The case was decided on the short and the only ground that there was no evidence to snow that the petitioner (who was sought to be proceeded 'against for failure of the auction purchaser of abkari shops to deposit 10% of the bid amount) has actually stood surety for the purchaser. None of the other questions that arose for decision were decided. Although the Full Bench made certain observations as to the similarity in wording between Clause.10 and 15 of the sale notification in the case before it, and the two parts of clause (21) of the notification considered by the Supreme Court in Union of India v. Bhim Sen Walaiti Ram (19711 SCWR.111), it did not finally pronounce on the question. The head-note of the ILR. Report of the Full Bench decision,1 find, has been quite liberal in its contribution as to the actual decision. In any event, the construction placed upon the wording of the clauses in that particular sale notification has no bearing on the instant case. 9. It was said that the decision of the Division Bench in Damodaran's case (1969 KLT. 587), required reconsideration in the light of the decisions of the Supreme Court in K. P. Chowdhuri's case (AIR. 1967 S.C. 203) and in Moolam Chand v. State of Madhya Pradesh (AIR. 1968 S.C.1218). These decisions may, at best help the petitioner only to contend that he is not a person from whom amounts are due "on account of any contract", and do not touch the question of his liability as the "grantee of a privilege". Besides, the Division Bench in Damodaran's case, by which I am bound, ruled after considering K. P. Chowdhuri's case (AIR. 1967 SC. 203) that there was a concluded contract, the moment the hammer fell. 10. I am therefore of the opinion that the petitioner is liable for arrears of abkari dues as the "grantee of a privilege" and even as a person from whom amounts are due "on account of a contract", provided he had bid at the auction of the shops, and the bid bad been knocked down in his favour. But was this done? On this, the petitioner has sharply joined issue with the respondent. He denies having signed the sale list or participated in the auction. He denies his liability, but has not specifically disputed as such, in answer to Exs. But was this done? On this, the petitioner has sharply joined issue with the respondent. He denies having signed the sale list or participated in the auction. He denies his liability, but has not specifically disputed as such, in answer to Exs. P1 and P2, that if he was liable at all the quantum of damages shown in these notices is not correct. But having regard to the nature of the contentions, the magnitude of the interests involved, and the fact that the matter is still at a preparatory stage to revenue recovery proceedings, I think it just and desirable that the objections of the petitioner that he had not participated in the auction or signed the sale list should be investigated and decided before revenue recovery proceedings are launched against him. I think it proper too, that the quantification of damage suffered by the Government as a result of the petitioner's default and the re-auction, be also decided after affording the petitioner an opportunity for explanation. I direct that these be done. 11. The O. P is allowed to the limited extent indicated in the preceding paragraph, and dismissed otherwise. There will be do order as to costs.