Judgment :- 1. Prior to the enactment of the Tamil Nadu Abkari Act, 1886 (Act No. I of 1886) hereinafter referred to as the Abkari Act, there were four statutes in force in the then Madras Presidency dealing with intoxicating liquor and intoxicating drugs. They were Act XIX of 1852 enacted for better securing the Abkari revenue of the town and suburbs of Madras, Act III of 1856, an act to amend Act XIX of 1852, Act III of) 864, an act for amending the Abkari laws of the Madras Presidency beyond the limits of the Madras Abkari as prescribed by Act XIX of 1852 and Act V of 1879, the Madras Abkari Laws Amendment Act, 1879. In reviewing the results of the administration of the Abkari Revenue for Fasli 1290 (1879 80), the Government of Madras remarked that the low rate of consumption of country spirits in the Districts in which the excise system bad been introduced, as well as the fact that the duty of maintaining preventive establishments left to Abkari renters whose interest, it was hoped, would induce them to organise an adequate staff, was much neglected, afforded a very strong presumption of the extensive prevalence of illicit distillation and smuggling of liquor in those districts. The Board of Revenue were therefore requested to give their careful attention to the subject. 2. In November 1883, the Board submitted to Government a report embodying their views and suggestions. In the meantime, certain radical changes in the Abkari Administration has suggested themselves to Government; such, for instance, as the placing of the Abkari Administration under the control of Commissioner, and the organisation under him of a preventive establishment for the protection of the Abkari Revenue. About this time, a minute by Mr. W. Wilson, then Director of Revenue Settlement and agriculture and an Additional Member of the Board, also came under consideration, in which be traversed the position held by Government, in reference to the Abkari Administration He advocated a system of free excise and licence and the elimination of contractor. 3. The Government in March 1884 appointed a committee consisting of Messrs. Garstin, H. E Stokes, Wilson and Bliss, to advise on the whole subject. 3. The Government in March 1884 appointed a committee consisting of Messrs. Garstin, H. E Stokes, Wilson and Bliss, to advise on the whole subject. At the same time, the Government announced their decision to transfer the duty of maintaining a preventive Establishment from the contractors to the State, and considered the Salt Department as peculiarly fitted for the work. 4. The Committee presented its report in April 1884 along with an Abkari Bill. By that time the Bombay Abkari Act, 1878 (Bombay Act V of 1878) had been enacted repealing as many as seven statutes in force in that Presidency. Consequently, the Abkari Bill submitted by the Committee was largely modelled on the Bombay Act V of 1878. It is this Bill that ultimately matured as the Abkari Act, repealing the four enactments referred to already. 5. Though the Abkari Act itself is based in a great measure on the Bombay Abkari Act of 1878, it differed from the Bombay Act in certain respects, where the experience gained in the Madras Presidency suggested a different provision. This Abkari Act has in its preamble itself stated that it was enacted to consolidate and amend the law relating to the import, export, transport, manufacture, sale, and possession of intoxicating liquor and of intoxicating drugs in the Presidency of Madras.” Chapter II of this Act dealt with Establisment and control and S. 4 provided that notwithstanding anything contained in the Madras Board of Revenue Regulation 1803 and the Madras Collectors Regulations 1803, the State Government may, from time to time, by notification appoint an officer, who shall exercise all the powers of a Collector in respect of the Abkari revenue and who shall, either as a member of the Board of Revenue or subject to the orders of the Board of Revenue or independently of the Board of Revenue, as the State Government may direct, have the control of the administration of the Abkari Department or of the collection of the Abkari revenue or both; and may direct that the control exercised by the Board of Revenue over Collectors in respect of the Abkari revenue shall be exercised by such officer. This section also enabled the Government to appoint special Collectors for Abkari revenue and withdraw from the Board of Revenue or the Collector of Land Revenue any or all of their powers in respect of Abkari Revenue. This section also enabled the Government to appoint special Collectors for Abkari revenue and withdraw from the Board of Revenue or the Collector of Land Revenue any or all of their powers in respect of Abkari Revenue. S. 5 conferred on the Government power from time to time to make rules prescribing the powers and duties under the Act to be exercised and performed by the officers of several classes and regulating the delegation by the Board of Revenue, by the Commissioner or by the Collectors of any powers conferred by this Act or exercised in respect of Abkari revenue under any Act for the time being in force. 6. Chapter III dealt with import, export and transport of liquor or intoxicating drug and in substance provided that no such import export or transport would be made without a permit issued by the Collector. 7. Chapter IV dealt with manufacture, possession and sale of liquor or intoxicating drug. S. 12, among others, provided that no liquor or intoxicating drug shall be manufactured; no toddy producing tree shall be tapped; no toddy shall be drawn from any tree; no distillery or brewery shall be constructed or worked; and no liquor shall be bottled for sale, except under the authority and subject to the terms and conditions of a licence granted by the Collector in that behalf. Similarly, S. 13 prohibited possession of liquor or intoxicating drugs in excess of the quantity prescribed by the Government except by a licensed manufacturer or vendor. S. 14 conferred on the Commissioner power to establish distilleries and warehouses. S. 15 enacted that no liquor or intoxicating drug shall be sold without a licence from the Collector. Section 16 was important and it was: “16. It shall be lawful for the State Government to grant to any person or persons on such conditions and for such period as may seem fit the exclusive or other privilege: (1) of manufacturing or supplying by wholesale or (2) of selling by retail, or (3) of manufacturing or supplying by wholesale and selling by retail any country liquor or intoxication drugs within any local area. No grantee of any privilege under this Section shall exercise the same until he has received a licence in that behalf from the Collector. No grantee of any privilege under this Section shall exercise the same until he has received a licence in that behalf from the Collector. In such cases, if the State Government shall by notification so direct, the provisions of S. 12 relating to toddy and toddy-producing trees shall not apply.” Chapter V dealt with the imposition of exercise duty or countervailing duty. S. 18 dealt with the ways in which such duty may be imposed. S. 19 dealt, with the person on whom the tax for tapping unlicensed trees, should be levied. S. 20 enabled the State Government to farm all or any of the duties liable under this Act in any local area and provided that such farmers shall take out licences as such from the Collector. S. 21 dealt with the power of the toddy farmer to grant licence to toddy tapper. S. 22 enable the former to let or assign the exclusive or other privilege granted to him. S. 23 dealt with recovery by such farmer of the rents due to him. S 23-A was enacted after the Constitution of India came into force, and it saved the levy of duty which was being levied immediately before the commencement of the Constitution. 8. Chapter VI dealt with licences, etc. S 24 prescribed the forms and conditions of a licence. S. 29 stated that every person taking out a licence under the Act may be required to execute a counterpart agreement in conformity with the tenor of his licence and to give such security for the performance of his agreement as the Collector may require. S. 26 enabled the Collector to cancel or suspend a licence or permit granted under the Act under certain circumstances. 9. Chapter VII contained certain general provisions. S. 28 is one such section found in this Chapter and it is as follows: “28. S. 26 enabled the Collector to cancel or suspend a licence or permit granted under the Act under certain circumstances. 9. Chapter VII contained certain general provisions. S. 28 is one such section found in this Chapter and it is as follows: “28. All duties, taxes, fines and fees payable to the State 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 State 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 fault made by a grantee of a privilege or by a farmer, the Collector may take the grant or farm under management at the risk of the defaulter or may declare the grant or farm forfeited and resell it at the risk and loss of the defaulter. When a grant or farm is under management under this Section the Collector may recover any moneys due to the defaulter by any lessee or assignee as if they were arrears of land revenue.” S. 29 is the rule-making section. 10. Chapter VIII containing Ss. 30 to 54 dealt with powers and duties of officers. 11. Chapter IX containing Ss. 55 to 68 dealt with penalties that can be imposed under the Act and Chapter X containing Ss. 69 to 72 constituted miscellaneous provisions. It is unnecessary to make a detailed reference to the provisions contained in the last three chapters for the purpose of the present cases. 12. After the enactment of the Abkari Act as referred to above, the Government took steps for creation of an Abkari establishment and for appointment of the various officers such as the Commissioner of Excise, Assistant Commissioners of Excise and Inspectors of Excise and conferment of powers on them as well as on the officers of the Revenue Department. What Is relevant in this context is a notification issued by the Government, namely, the Notification No. 112 dated 26th February, 1908 published in the Fo rt St. George Gazette, dated 3rd March 1908. What Is relevant in this context is a notification issued by the Government, namely, the Notification No. 112 dated 26th February, 1908 published in the Fo rt St. George Gazette, dated 3rd March 1908. By this notification, the Government authorised the officers mentioned below, subject to such general orders as may from time to time be issued in this behalf; to exercise powers under S. 16 of the Abkari Act in respect of the grant to any person or persons of the exclusive or other privilege—(i) of manufacturing or supplying by wholesale, or (ii) of selling by retail, or (iii) of manufacturing or supplying by wholesale and selling by retail any country liquor in the local areas entered opposite to them. Officers to whom power delegated Jurisdiction within which to be exercised. Commissioner of Excise. Throughout the Presidency. All Collectors. Within their respective jurisdiction as officers of Land Revenue. This notification also provided that the powers exercised by Collectors under the abovesaid authorisation shall be subjected to revision by the Commissioner of Excise—vide: The Madras Excise Manual, Vol. I fourth edition, pages 46-47. 13. In exercise of the above power, the Commissioner of Excise laid down elaborate conditions relating to the sale of Abkari and opium privileges and they are contained in Part IV of the Madras Excise Manual, Vol. I, fourth edition, from page 181 onwards. 14. After the Government of India Act, 1935 came into force the Madras Legislature passed the Madras Prohibition Act, 1937 (Act X of 1937). It was enacted to bring about the prohibition except for medicinal, scientific, industrial or such like purposes: of the production, manufacture, possession, export, import, transport, purchase, sale and consumption of intoxicating liquors and drugs in the Province of Madras. Consequently, that Act enabled the Government to apply the same to any local area, and once that Act was brought into force in any local area, it provided for the cessation of the applicability of the Abkari Act and the amendments in that area, and accordingly, pursuant to the provisions contained in that Act, prohibition was introduced in the then Madras Province in stages. However, the Governor of Madras, who bad assumed the powers of the provincial Legislature pursuant to the proclamation made under S 93 of the Government of India Act, 1935, during the Second World War, enacted the Madras Prohibition (Suspension) Act, 1943 and pursuant to that Act prohibition was suspended in the areas in which it was in force. After the termination of the war and the restoration of the popular Government in the province, prohibition was re-introduced, in stages commencing from 1st October 1946 and ending with 2nd October 1948. However in 1971, prohibition was again suspended and that led to the enactment of the Tamil Nadu Prohibition (Suspension of Operation) Act, 1971 (Act XXXIII of 1971) repealing the Tamil Nadu Ordinance No. 7 of 1971 promulgated earlier for the same purpose Though this Act received the assent of the Governor on 9th November 1971 and was published in the Tamil Nadu Government Gazette Extraordinary on 10th November 1971, it was deemed to have come into force on 30th August 1971. Simultaneously, the Tamil Nadu Excise Act, 1971 (Act No. XXXIV of 1971) hereinafter referred to as the Excise Act was enacted repealing the Tamil Nadu Ordinanee No. 8 of 1971 promulgated earlier, and though this also received the assent of the Governor on 9th November 1971 and was published in the Tamil Nadu Government Gazette Extraordinary, dated 10th November 1971, it was deemed to have come into force on 30th August 1971. This Excise Act is practically a re-enactment of the Abkari Act except for verbal changes, the principal verbal change being the replacement of the word “Abkari” by the word “Excise” in the Act. S. 84(1) of this Act repealed the Tamil Nadu Abkari Act 1886. Sub-(2) of this Section is: “All rules made and notifications issued under the said Act as in force immediately before the 2nd October 1948. S. 84(1) of this Act repealed the Tamil Nadu Abkari Act 1886. Sub-(2) of this Section is: “All rules made and notifications issued under the said Act as in force immediately before the 2nd October 1948. shall be deemed to bare been issued under the corresponding provisions of the Act in so far as they are not inconsistent with the provisions of this Act, and accordingly the said rules and notifications shall revive and court into force with effect from the date of the commencement of this Act unless and until superseded by anything done or any action taken under this Act.” The legal consequence of this provision is that all the notifications issued under the Abkari Act and all the rules made under that Act must be deemed to have revived and come into force on 30th August 1971. As a matter of fact, the State Government itself re-issued the notification No. 112 dated 26th February 1908 already exacted as a Notification under S. 3(g) of the Excise Act, 1971 with effect from 30th August 1971 under G.O.Ms. No. 227, Excise and Prohibition Department, dated 17th August 1972 by w ay of suberceding the earlier notification, by changing the expression, “Throughout the Presidency” into “Throughout the State of Tamil Nadu”. 15. Meanwhile, once the Government took a decision to suspend prohibtion in the State, it took immediate steps for the sale of exclusive privilege of selling arrack and toddy in different areas of the State. The Commissioner of Excise issued a notification No. 1, dated 12th July 1971, presctibing the conditions for the sale of Abkari (arrack and toddy) shops. These conditions were published in the Tamil Nadu Government Gazette Extraordinary, dated 14th July 1971. Simultaneously, the Collectors of the Districts also published the same conditions in respect of the districts relating to the sales in the areas under their jurisdiction. I may immediately mention that these conditions also are verbatim reproduction except for minor changes of the conditions laid down by the Commissioner of Excise under the Abkari Act found in Par IV of the Madras Excise Manual Vol. I, already referred to. 16. Based on these conditions, auctions took place for the twelve month period, 30th August 1971 to 31st August 1972. Similarly, for the subsequent year commencing from 1st September, 1972 to 31st August, 1973, auctions were held. I, already referred to. 16. Based on these conditions, auctions took place for the twelve month period, 30th August 1971 to 31st August 1972. Similarly, for the subsequent year commencing from 1st September, 1972 to 31st August, 1973, auctions were held. A vast majority of the petitioners in these writ petitions were persons who happened to be the highest bidders in respect of different areas in those auctions. Some of the petitioners are sureties who gave security for the performance of the obligations of the said highest bidders. The petitioners herein having committed default in one manner or other, the Government and its officers took steps for the recovery of certain amounts from the petitioners under the Tamil Nadu Revenue Recovery Act, 1864, hereinafter referred to as the Revenue Recovery Act. Challenging the said recovery proceedings, the petitioners herein have filed the above writ petitions. 17. Before I refer to the grounds on which the petitioners challenge the proceedings under the Revenue Recovery Act, it is desirable to refer to some of the provisions of the Excise Act and the relevant conditions of the sale of the exclusive privilege conducted by the Government. I nave already referred to S. 16 of the Abkari Act dealing with the grant of exclusive privilege to sell liquor and S. 17 of the Excise Act corresponds to that section. Similarly, I have referred to S. 15 of the Abkari Act providing that no liquor or intoxicating drug shall be sold without a licence from the Collector and S. 16 of the Excise Act corresponds to that provision. Since no liquor could be sold without a licence, logically the statute required that no grantee of any privilege under the Act shall exercise the same until he bad received a licence in that behalf from the Collector. Consequently, the highest bidder at an auction for the sale of any privilege has to obtain a licence in that behalf for exercising that privilege, and that licence, therefore, necessarily depends upon the grant of the privilege. S. 30 of the Excise Act deals with the power of the Collector to cancel or suspend any licence or permit granted under that Act, and it enumerates five contingencies in which such licence or permit can be suspended or cancelled. S. 30 of the Excise Act deals with the power of the Collector to cancel or suspend any licence or permit granted under that Act, and it enumerates five contingencies in which such licence or permit can be suspended or cancelled. The contingency contemplated in Cl (d) of S. 30 is, where a licence or permit has been granted on the application of the holder of an exclusive or other privilege or of a farmer of duties under the Excise Act, it can be suspended or cancelled on the requisition in writing of such person. S. 31 states: “Any holder of licence granted under this Act to sell any liquor may surrender his licence on the expiration of one months notice in writing given by him to the Collector of his intention to surrender the same, but the licence fee proportionate to the unexpired portion of the term of the licence for which it would have been current but for such surrender shall not be refunded.” S. 33 of the Excise Act corresponds to S. 28 of the Abkari Act, and if is a verbatim reproduction of that Section except for the substitution of the word, “excise” for the word “Abkari” in the expression, “Abkari revenue” occurring in that section. 18. Coming to the published conditions of the auction (the references are to the conditions prescribed for auction of the privilege for the year 1971-1972 and since there is no change in the conditions for the subsequent year, I am not referring to them separately), condition No. I requires every person desiring to bid, to make an initial deposit which varies depending upon whether the auction is in respect of a right in the City of Madras or outside. Condition No. II enables the selling Officer to refuse to accept a bid at his discretion under certain circumstances. According to condition No. V, the highest bid will be provisionally accepted by the selling officer, subject to confirmation by the Collector and the confirmation of the Collector is necessary even if the Collector himself happens to be the selling officer. A Collector has been given power to accept or reject any bid at his discretion. If the selling officer himself rejects a bid under condition No. II, he can at his discretion accept the next highest bid or re-sell the right either immediately or subsequently. A Collector has been given power to accept or reject any bid at his discretion. If the selling officer himself rejects a bid under condition No. II, he can at his discretion accept the next highest bid or re-sell the right either immediately or subsequently. Condition No. VI (a) requires every person whose bid is provisionally accepted to deposit half a months rent for each shop knocked down to him, at once to apply in writing for licence for each shop knocked down to him and within seven days from the date of sale, to deposit such further sum as with the deposits already made will make up two months rent for all shops knocked down to him. Condition No. VI (b) enables the Tahsildar, if he is satisfied that the highest bidder can be trusted to pay his rent punctually and fully, to call upon such bidder either to deposit additional two months rent of all shops knocked down or to execute a mortgage of his immovable property or to produce surety. Under this condition, he is also required to execute a counterpart-agreement which is the requirement of the statute itself under S. 25 of the Abkari Act, corresponding to S. 29 of the Excise Act. Condition IX (a) deals with the Collectors confirmation of the bid and states that such confirmation is final unless it is revised by the Commissioner for special reasons. However, condition IX (b) gives power to the Collector to postpone passing orders confirming or refusing to confirm, if he considers such bid to be inadequate and to immediately direct that the sale shall be continued from the point at which it was left on such date and at such time and place as may be fixed by him. 19. However, condition IX (b) gives power to the Collector to postpone passing orders confirming or refusing to confirm, if he considers such bid to be inadequate and to immediately direct that the sale shall be continued from the point at which it was left on such date and at such time and place as may be fixed by him. 19. Condition No. X is as follows: “On the failure of any person to make a deposit or apply for a licence under condition VI or to comply with any requisition or to execute any agreement under condition VI, the shop may be resold under the orders of the Divisional Officer or on a report from the Divisional Officer may be otherwise disposed of by the Collector Resales under this condition will be at the risk of the defaulting bidder, who will forfeit all gain and, in the event of a loss, will be required to make good the deficiency between the total amount payable for the whole period under the terms of the original sale and the total amount payable by the successful bidder at the resale In the latter case, the deposits already made by the defaulting bidder will be forfeited and deducted from the loss arising from the resale, and the balance of the loss, if any will be recoverable in the same manner as if it were an arrear of land revenue. Should however the deposits be greater than the loss by resale, only such part of the deposit as i s necessary to cover loss by resale will be forfeited and the balance refunded to the defaulter. The defaulting bidder will be similarly liable if the shop is disposed of otherwise than by re-sale and such disposal results in loss to government as compared with the original sale. Disposal otherwise than by re-sale includes closure.” 20. Part B of these conditions deals with issue of licence for the wholesale vend of arrack. One condition that is relevant for the purpose of these cases is condition No. 16 according to which, “No liquor shall be sold either below or above such minimum or maximum prices as fixed by the Commissioner from time to time for sale of the same.” Condition No. 23(1) dealing with payments to be made by the highest bidder states as follows: “23 (1). Except in the case of licences, issued on fixed fees the amount for which the privilege of sale has been purchased shall be payable in advance in twelve equal monthly instalments kists) into a Government Treasury of the taluk where the shop is situated on or before the 1st treasury day of each month beginning with September, 1971. In the case of toddy shops, tree-tax should also be paid into Government treasury of the taluk where the shop is situated. In addition to the kists, the amount fixed for each shop subject to the payment of which the privilege of sale of toddy has been purchased shall be payable into a Government treasury of the taluk concerned. Fines will be levied on any amounts not so paid; interest “will also be levied on any amounts not paid before the end of the month for which they are due, Shops are liable to be sold for failure to pay kists, on the 25th of the month or the date of closing of accounts in the sub-treasury whichever is earlier; if the 25th happens to be a Sunda y or a holiday, the sale will be held on the last working day immediately preceding. Toddy shops may also be resold for failure to pay tree-tax. Fees for depot licensees must be prepaid.” Condition No. 25 is as follows: “Power is reserved to Revenue Officers to suspend licences in case of failure of payment on the due date of kists or of tree-tax. In the case of arrack and toddy shops, this power will be exercised by Tahsildars or Deputy Tabsildars in independent charge. In the event of suspension of a licence for failure to pay arrears, the privilege of sale will be resold with effect from the date of issue of the licence to the new purchaser or otherwise disposed of at the Collectors discretion. Disposal of the priv ilege of sale otherwise than by resale includes also closure of the shop. All losses on account of suspension and resale or other disposed of privilege shall be borne by the defaulting licensee and shall become due immediately on resale or other disposal of the shop; but the defaulting licensee shall have no right to any gain which may accrue. The whole of the deposit, if any, made by the licensee shall be liable to forfeiture. The whole of the deposit, if any, made by the licensee shall be liable to forfeiture. The officer who has power to suspend the licence may at his discretion allow sales “to continue pending resale or other disposal of the privilege.” Condition No. 36 (1) gives power to the Collector to cancel the privilege and re-sell the same. Condition No. 36 (2) is as follows: “Infraction of any of the conditions of the licence by a licensee or by any person in his employment or contravention of the undertaking in the declaration made by the licensee in his statement of property filed by him under conditions No. VI (a)(ii) of the auction sale condition will render the licensee liable either to be prosecuted and en conviction dealt with under Cl. (1) or to fine not exceeding kg. 250/-or to cancellation of licence and resale or other disposal of the privilege at the risk of the licensee and if considered necessary by the Collector to forfeiture of deposits.” Condition No. 37 says: “Any sum due by a licensee may be adjusted from the deposit, if any, made by him or collected under the Revenue Recovery Act as an arrear of land Revenue. The licensee shall be bound to replace any sum adjusted from his deposit within fifteen days of receipt of notice from the Tahsildar or Deputy Tahsildar in independent charge.” Condition No. 38 states that interest on all monies due shall be payable at the rate of 9 per cent per annum. 21. Thus, it will be seen that Condition No. X of Part “A” deals with the stage at which the highest bidder has failed to make deposit or apply for a licence under Condition No. VI or to comply with any requisition or to execute any agreement under condition No. VI. Similarly, condition No. 25 of Part “B” deals with the stage at which a person to whom a licence has been issued commits default. Condition No. XI of Part “A” also provides that the purchaser of any Abksrf privilege is liable to the penalties p rescribed for breaches of the conditions, though a formal licence may not have been issued to him. Condition No. XI of Part “A” also provides that the purchaser of any Abksrf privilege is liable to the penalties p rescribed for breaches of the conditions, though a formal licence may not have been issued to him. Thus, every type of default, whether occurring before the issue of licence or after the issue of licence, has been provided for in the conditions, and the conditions state that the person at default will be responsible for payment of loss to the Government. 22. In all these cases, different types of default have been committed by the various petitioners. Some of them have committed default in making the deposit as contemplated, and therefore under condition No. X of Part “A” the privilege has been resold; and In view of the fact that the subsequent bid happened to be lower than the original bid of the petitioner concerned, loss for the entire period is claimed from such petitioners. Some others have committed default in payment of the subsequent rent, and therefore, under condition No. 25 of Pan “B” the privilege has been resold and the difference between the amount fetched at the re-auction and the original bid made by the petitioners is sought to be recovered from them. Since condition No. X of Part “A” and condition No. 25 of Part “B” exhaust almost all possible defaults that can be committed, I am not considering the nature of the default in each case separately, having regard to the scope of the arguments advanced before me. 23. A reference to not only the condition for 1971-1972 but also the conditions found in Part IV of the Madras Excise Manual Vol 1, will show that different words have been indiscriminately used to denote the relationship between the parties. A person who happens to be the highest bidder at an auction and in whose favour the privilege has been granted has been variously described as a purchaser, renter, lessee and even a licensee. As a matter of fact, in some places, he is described as a purchaser of abkari privilege and the conditions go to the extent of describing such persons as purchasers of shops and renters of shops and the resale also is described as resale of shops. Similarly, the amount payable by such persons is variously described as kist and rent. As a matter of fact, in some places, he is described as a purchaser of abkari privilege and the conditions go to the extent of describing such persons as purchasers of shops and renters of shops and the resale also is described as resale of shops. Similarly, the amount payable by such persons is variously described as kist and rent. However, the essence of the matter is that such highest bidder at an auction whose bid has been accepted is granted the privilege as contemplated by S. 17 of the Excise Act, and the amount payable by him, whether it is called rent, kist or by any other name, is the consideration which he has undertaken to pay to the Government for the grant of such privilege to him. 24. Before I proceed with the arguments advanced on behalf of the petitioners, it is necessary to refer to the Tamil Nadu Revenue Recovery Act, (Act No. II of 1864). That Act was enacted for consolidating and simplifying the laws relating to collection of the public revenue. As per S. 1 of that Act, public revenue due on land for the purposes of that Act shall be taken to include cesses or other dues payable to the Government on account of water supplied for irrigation. Elaborate provisions have been made for the collection of the revenue due to the Government under the provisions of the said Act. Ss. and 6 of the Act enable the Collector or other officer empowered by the Collector to realise the arrear with all costs by sale of either movable or immovable property of the defaulter or both at his discretion. Ss. 8 to 21 set forth the rules to be observed in respect of distraint of movable property. Ss. 22 to 24 prescribe the rules to be observed in the sale of distrained properties. Ss. 25 to 35 prescribe the rules for attachment and management of land Ss. 36 to 45 deal with the procedure for the sale of the land and consequences of such sale. Ss. 48 and 49 cofer power an the Collector even to arrest defaulter in the case of wilful default or fraudulent non-payment of arrears. Ss. 25 to 35 prescribe the rules for attachment and management of land Ss. 36 to 45 deal with the procedure for the sale of the land and consequences of such sale. Ss. 48 and 49 cofer power an the Collector even to arrest defaulter in the case of wilful default or fraudulent non-payment of arrears. S. 52 is as follows: “All arrears of revenue other than land revenue due to the State Government all advances made by the State Government for cultivation or other purposes connected With the revenue, and all fees or other dues payable by any person to or on behalf of the village servants employed in revenue or police duties, and all cesses lawfully imposed upon land and all sums due to the State Government, including compensation for any loss or damage sustained by them in consequence of a breach of contract, may be recovered in the same manner as arrears of land-revenue under the provision of this Act, unless the recovery thereof shall have been or may hereafter be otherwise specially provided for.” According to S. 58. “No Court of Civil Judicature shall have authority to take into consideration or decide any question as to rate of land-revenue payable to the State Government, or as to the amount of assessment fixed, or to be hereafter fixed on the portion of a divided estate.” S. 59 states: “Nothing contained in this Act shall be held to prevent parties deeming themselves aggrieved by any proceedings under this Act, except as here in before provided, from applying to the Civil Courts for redress; provided from applying to the Civil Court for redress; provided that Civil Courts shall not take cognizance of any suit instituted by such parties for any such cause of action, unless such suit shall be instituted within six months from the time at which the cause of action arose.” 25. The principal contention of the petitioners in these cases is that resort to the provisions of the Revenue Recovery Act has been made by the Government in the present cases without giving an opportunity to the petitioners herein to put forward their respective cases with reference to the claim made by the Government. Some of the petitioners contend that even before the resale of the privilege notice should be given to the petitioners asking them to show cause why such resale should not be made. Some of the petitioners contend that even before the resale of the privilege notice should be given to the petitioners asking them to show cause why such resale should not be made. It is also contended on behalf of the petitioners that when they are disputing their liability to pay any loss whatever to the Government, the Government without giving an opportunity to them to substantiate their case that no money whatever was due by them to the Government, cannot resort to the drastic and summary procedure provided for in the Revenue Recovery Act. I shall have occasion to deal with the latter part of the contention later in the course of this judgment. 26. As far as the former contention is concerned, in my opinion there is no substance whatever in the same. The conditions clearly contemplate that in the event of a default committed by the highest bidder or licensee, the Collector can re-sell that right. It is not in dispute that one or the other of the defaults contemplated by condition No. X or Part “A” or condition No. 25 of Part “B” has been committed by the petitioners in these cases. Consequently, the right of the Government to re-sell the privilege is indisputable and there is absolutely nothing either in law or on principle to give an opportunity to the petitioners before resorting to such resale. It is not the case of the petitioners that there has been no proper re-sale at all. Only in one case namely, W.P. No. 1864 of 1972, the petitioner, who is a surety, has contended that when he went to participate in the resale, be was told that no such resale would take place. However, in the counter-affidavit filed on behalf of the respondents, it is pointed out that the resale was announced and persons including the petitioner were present, but none made even the initial deposit of Rs. 200, and that consequently, there were no bidders. Therefore, in all these cases, to complaint can be made against the re-auction conducted by the authorities, and even if there had been any defect of irregularity in the conduct of the re-auction, that is a matter which has to be represented by the affected petitioners to the authorities concerned. 27. 200, and that consequently, there were no bidders. Therefore, in all these cases, to complaint can be made against the re-auction conducted by the authorities, and even if there had been any defect of irregularity in the conduct of the re-auction, that is a matter which has to be represented by the affected petitioners to the authorities concerned. 27. A faint attempt was made to contend that S. 52 of the Revenue Recovery Act, in so far as it enables the Government to recover any sum due to it in the same manner as if it were an arrear of land revenue under the provisions of that Act is unconstitutional as violating Art. 14 of the Constitution of India. As for as this Courts is concerned, this question has been considered and decided against that constitution in R. Kuppuswamy Gramani v. State of Madras and another A.I.R. 1957 Mad. 23; 69 L.W. 678. 28. Yet another attempt that was made by Mr. M. Kalyanasundaram, learned counsel for the petitioner in W.P. No. 2884 of 1973, was to contend that the said S. 52 of the Revenue Recovery Act is ultra vires of the State Legislature, being outside its legislative competence. This question also has been decided against the said contention by this Court (Ramaprasada Rao, J.) in its judgment d. 19th July 1973 in Hajee M.N.A.S. Mohamed Ibrahim v. The Regional Deputy Director of Industries and Commerce, Trichy and others W.P. No. 3121 of 1971. Consequently, the plea that S 52 of the Revenue Recovery Act is unconstitutional as offending Art. 14 of the Constitution of India, and is ultra vires the powers of the State Legislature fails. 29. Mr. V.P. Raman appearing for some of the petitioners contended that under S. 33 of the Excise Act, the claim made against the petitioners cannot be recovered as arrears of land revenue. According to the learned counsel, the claim made against the petitioners consists of three components, viz., (1) the difference between the original bid of the petitioners and the subsequent bid at the re-auction; (2) interest on the amount; and (3) penalty. According to the learned counsel, the claim made against the petitioners consists of three components, viz., (1) the difference between the original bid of the petitioners and the subsequent bid at the re-auction; (2) interest on the amount; and (3) penalty. The argument is that the first will not fall within the scope of the expression, “duties, taxes, fines and fees”; that if what is sought to be recovered is arrears of rent payable by the petitioners, it may come within the scope of the expression, “duties” or “taxes”, and therefore, the Section may apply; but, what is sought to be claimed is not arrears of rent or kist as such, but the difference between rent or kist which the petitioners originally agreed to pay and the rent or kist fetched at the subsequent re-auctions; and that consequently, it is only the compensation or loss that is sought to be recovered and not duties or fees. With regard to the second component, the argument of the learned counsel is that no expression occurring in S. 33 of the Excise Act will comprehend such interest. With regard to the third component, his argument is that no provision in the Excise Act preceding S. 33 has provided for levy or payment of any fine, and it is only the provisions contained in Chapter X commencing from S. 61which provided for the imposition of fine, and therefore, such fine cannot fall within the scope of the expression, “all fines payable to the Government direct under any of the foregoing provisions of this Act” occurring in S. 33. 30. In my opinion, this argument is misconceived. 30. In my opinion, this argument is misconceived. In addition to referring to “all duties, taxes, fines and fees payable to the Government direct under any of the foregoing provisions of this Act”, the Section (S. 33) also covers “all amounts due to the Government by any grantee of a privilege or by any farmer under this Act.” Consequently, if all the three components referred to above represent the amounts due to the Government by the petitioners as grantees of the privilege, certainly, they will be recoverable as arrears of land revenue under S. 33 of the Excise Act itself, I have already referred to the conditions of the auction which provided for recovery of the loss sustained by the Government as a result of the default committed by the original bidders and the consequential re-auction as well as the provisions tor payment of interest and also fine. Therefore, if under the conditions of the auction, the petitioners are liable to pay those amounts, they will fall within the scope of the expression, “all amounts due to the Government by any grantee of a privilege or by any farmer under this Act”, and therefore, can be recovered as arrears of land revenue. 31. Alternatively, the amount can be recovered under S. 32 of the Revenue Recovery Act, as sums due to the Government, since on the contention of the learned counsel, the amount in question will not be coveted by S. 33 of the Excise Act. 32. As a matter of fact, with reference to the recovery of fine provided for in Chapter X of the Excise Act, there is no need for an independent provision, because those fines are imposed by criminal courts and they can be recovered under the provisions applicable for recovery of such fines. Yet another argument of Mr. V.P. Raman is that the amount can be due to the Government either under a statute or a contract, that in the present cases, the amounts are not due to the Government under any statute, that the conditions of the auction are not statutory and they constitute merely administrative instructions, that there is no valid, enforceable contract between the Government and the petitioners and that therefore the amounts cannot be recovered from the petitioners. The basis of this contention that there is no valid contract between the petitioners and the Government is that there had been no contract in writing as required by Art. 299 of the Constitution of India, corresponding to S. 175(3) of the Government of India Act, 1935, entered into by the petitioners with the Government in the name of the Governor, that a mere execution of a counterpart-agreement as contemplated by the conditions of sale as well as the Excise Act is not enough and that the contract contemplated is a bilateral contract and not a mere counterpart agreement. In support of this contention, the learned Counsel relied on a decision of the Supreme Court in K.P. Chowdhry v. State of Madhya Pradesh and others A.I.R. 1967 S.C. 203 and a decision of this Court in T. Linga Gowder v. State of Madras, represented by the District Forest Officer, Ootacamund and others 1970 (1) M.L.J. 503 . Since I am of the opinion that the liability of petitioners in the present cases is statutory, it is unnecessary to consider the argument based upon Art. 299 of the Constitution of India. As I have pointed out already, by virtue of S. 84(2) of the Excise Act, all rules made and notifications issued under the Abkari Act were revived and brought into force as if they were made under the corresponding provisions of the Excise Act. It has been respect held by this Court that the conditions of sale promulgated by the Commissioner of Excise as found in Part IV of the Madras Excise Manual Vol.1 are statutory. With reference to condition No. 27, which had been referred to as Rule 27 in the decisions of this Court, which provides that no privilege of supply or vend shall be sold, transferred or sub-rented without the Collectors previous permission, this Court has held that a partnership agreement entered into between a licensee and a non-licensee was illegal. Therefore, if the argument of Mr. V.P. Raman that the conditions prescribed for the auctions for 1971-1972 and 1972-1973 were merely administrative instructions is to be accepted, it will only mean that the conditions originally prescribed under the Abkari Act were in force as Rules, and I have already pointed out, those conditions imposed identical liability on a person like the petitioners. V.P. Raman that the conditions prescribed for the auctions for 1971-1972 and 1972-1973 were merely administrative instructions is to be accepted, it will only mean that the conditions originally prescribed under the Abkari Act were in force as Rules, and I have already pointed out, those conditions imposed identical liability on a person like the petitioners. Alternately, it has been held by a Bench of this Court in the judgment dated 21st November, 1972 in Lakshmanan v. Tahsildar (Excise) Ginjee, South Arcot and others W.A. No. 298 of 1972 that these conditions are statutory having been made with reference to the grant of privilege contemplated under S. 17 of the Excise Act. Hence, the argument of Mr. V.P. Raman in this behalf also fails. 33. Mr. B.T. Sesbadri, appearing for the petitioner in W. P. No. 2122 of 1973, and counsel for certain other petitioners contended that the petitioners have surrendered their licences as contemplated by S. 31 of the Excise Act, and that therefore, they cannot be compelled to pay any loss to the Government. I have already extracted S 31 of the Excise Act. The argument is that once a licence has been surrendered, the fee proportionate to the unexpired portion of the term of the licence for which it would have been current but for such surrender, shall not be refunded, but there is no power to collect the licence fee if the same had not been paid in advance. In my opinion, this argument has to fail. The amount that is sought to be collected from the petitioners concerned is not the fees as contemplated by S. 31 of the Excise Act. What is sought to be recovered is the amount of loss which the Government has suffered as a result of the default committed by the petitioners concerned, who had made the highest bid and bad obtained the exclusive privilege of selling. Therefore, when the petitioners merely surrendered their licences, they disabled themselves from exercising the privilege which had been granted to them under S. 17 of this Act, and by this unilateral action, they cannot absolve themselves from their obligation to compensate the Government for the loss which it has suffered, which obligation they had incurred by the terms of the grant applied for and obtained by them. Consequently, S. 31 of the Excise Act is not of any assistance to these petitioners. 34. Consequently, S. 31 of the Excise Act is not of any assistance to these petitioners. 34. The last question that has to be considered in all these matters is, whether the provisions of the Revenue Recovery Act can be set in motion for recovery of the amounts alleged to be due from the petitioners herein, when the petitioners themselves dispute either their liability or the extent of their liability. In support of the contention that without giving an opportunity to the petitioners to establish their case that they were either not liable or that they were liable in a smaller amount, the Government cannot take action under the Revenue Recovery Act, the learned Counsel for the petitioners relied on a few decisions. 35. The first decision is that of the High Court of Andhra Pradesh in B.C. Mulajkar v. Government of Andhra Pradesh represented by its Secretary, Industries and Commerce Department and others A.I.R. 1971 A.P 169 and that case directly dealt with S. 52 of the Tamil Nadu Revenue Recovery Act. In that case, amounts were claimed by the Government under the loans advanced by the Industrial Trust Fund. Dealing with the question, with reference to S. 52 of the Revenue Recovery Act, the Bench pointed out: “But the section itself does not expressly provide for an enquiry or determination of the sums due to the Government. According to the Dictionary the word ‘due’ means that which is owed; What one has a right to fee, toll charge or tribute How much sum is owed by the appellant or what amounts the respondents have a right to recover has first to be arrived at before the same could be recovered as a sum due to the Government. When there are disputes between the alleged debtor and the Government with regard to the liability itself or as to the quantum of said liability it is but proper that the alleged debtor should be furnished with the material or data on which the liability is sought to be fixed. Cases where the amount due is admitted or is determined by a competent authority under a special enactment providing for an enquiry in that behalf, are different and would not present much difficulty. Cases where the amount due is admitted or is determined by a competent authority under a special enactment providing for an enquiry in that behalf, are different and would not present much difficulty. In other cases where no enquiry is an all held and the Government seeks to recover the amount, the question arises whether such a liability could be fastened upon the alleged debtor without first determining the liability and the quantum of the said liability It is an elementary principle that principles o f natural justice require that the person Who is sought to be fastened with a liability should first be apprised of the facts on which the liability is sought to be based and be should be given an opportunity to make his representations in that behalf. In our view, the expression ‘sums due’ does imply an obligation on the part of the State Government when the liability is disputed, to hold a proper enquiry and furnish the person from whom the amount is sought to be recovered, the full particulars or facts, hold an enquiry, consider the representations and first determine the liability or otherwise for the sum said to be due. Normally, in all cases where the amounts are due under a loan or contract or by way of compensation for breach of a contract, the party aggrieved has to proceed by way of a suit in a Civil Court and the party sought to be made liable will then have an ample opportunity of contesting the claim. But, S. 52 of the Act which is a special provision and which enables the Government to recover the amounts as arrears of land revenue, is a drastic provision, and presumably, this provision is made in the interests of expeditious collection of the amounts due to the Government Even so, the provisions of S 52 of Act have to be interpreted in such a manner so as to accord with the principles of national justice and the party sought to be proceeded against should at least have the minimum safeguard of having an opportunity to know the basis and the material on which the liability is sought to be imposed upon him and to rebut the same by placing the necessary material in that behalf before the appropriate authority of the Government. Whether the proceedings taken under S. 52 of the Act are quasi-judicial or administrative in character it is incumbent upon the Government to observe the basic principle of natural justice, viz, that the party affected should have a reasonable notice of the case he has to meet and reasonable opportunity of making his representations against the same by producing the relevant material on which be relied. Justice and fair play demand that such a notice should be given even by an administrative authority. In our opinion, therefore, before the Government could recover the sums due under S. 52 of the Act, the appellant should be furnished with the relevant material on which the amount is said to be due, and give an opportunity to the appellant is make his representations and produce the relevant material to substantiate his representations, and thereafter, determine the liability Only on such determination of the liability aid the amount due thereunder, the Government can take proceedings under of the Act for recovering the amount. An other words, the recovery proceeding Under S. 52 of the Act should be preceded by an anterior determination of the liability and the amount due towards such liability”. 36. The next decision relied on by the petitioners is that of the Punjab High Court in Custodian General of Evacuee Property, New Delhi and others v. Harnam Singh A.I.R. 1957 Pun. 58, dealing with S. 48 of the Administration of Evacuee Property Act, 1950, which provided that any sum due to the State Government or to the Custodian under the provisions of that Act may be recovered as if it were an arrear of land revenue. The Court in that case pointed out: “The expression ‘due’ is defined by Webster to mean that which is owed; that which custom, statute or law requires to be paid and by Worcester that which any one has a right to demand, claim or possess, that which can justly be required A debt or other obligation is due when it is legally enforceable, i.e., when the creditor has a right to demand payment and to enforce collection ( Etz. v. Perlman 143 A 548 at p 549: 13 Words and Phrases 442. v. Perlman 143 A 548 at p 549: 13 Words and Phrases 442. The summary remedy provided by S. 48 for the recovery of sums due to the State Government or to the Custodian must, in my opinion, be restricted to sums legally recoverable, i.e., sums which are admitted or proved to be due and cannot be extended to sums which are alleged or claimed to be due.” Let me now take the decisions of this Court relied on by the learned Counsel on behalf of the petitioners. As I have pointed out already, in R. Kuppuswami Gramani v. State of Madras and another A.I.R. 1957 Mad. 23: 69 L.W. 678, the constitutional validity of S. 52 of the Revenue Recovery Act came to be considered. But, in that case, the Court had no occasion to consider the matter further, since there was no dispute about either the existence of the liability or the extent thereof. 37. Alagiriswami, J., had to consider the question in K. Isac v. State of Tamilnadu and another W.P. Nos. 1216, 1217 and 1239 of 1969. Before the learned Judge also, there was no dispute about the amount due, and consequently, the learned Judge had no occasion to consider this question and that is why the learned Judge stated: “But where there are disputes about the amount due, the question whether S. 52 could be resorted to is not free from difficulty. But it is unnecessary to go into that question in the present proceedings”. 38. Palaniswamy, J., had to consider the question in his judgment dated 7th July, 1970 in Sri Balakrishna Rice Mill v. State of Tamil Nadu and another W.P. No. 1639 of 1969. The learned Judge pointed out: “On the allegations contained in the counter affidavit itself, it is seen that the amount due from the petitioner is not yet ascertained. The uncertainty is not only due to the fact that the exact quantity of rice said to have been short supplied is unknown, but also the price is uncertain. Therefore, it is rightly contended on behalf of the petitioner that the proceeding under the Revenue Recovery Act for the recovery of an amount, which is yet to be ascertained is incompetent. The provisions of the Act cannot be invoked where the amount due by the alleged defaulter is uncertain. Therefore, it is rightly contended on behalf of the petitioner that the proceeding under the Revenue Recovery Act for the recovery of an amount, which is yet to be ascertained is incompetent. The provisions of the Act cannot be invoked where the amount due by the alleged defaulter is uncertain. The same view Was taken by Alagiriswami, J., in Writ Petition No. 1216 of 1969”. 39. The same learned Judge had to consider the question again in his judgment, dated 21st October, 1970 in S. Rajanarayananv. Revenue Divisional Officer, Koilpatri and others W.P. No. 2199 of 1969. There, the learned Judge pointed out: “If the amount itself has not been ascertained, it would be a case where the provisions of the Revenue Recovery Act could not be properly invoked. That view was taken by Alagiriswami, J. in a batch of Writ Petition Nos. 1216 of 1969 etc. with which I concurred in my judgment in W.P. No. 1639 of 1969. But the point here is not about the quantum of the amount due from the Village Munsif. The point of controversy raised by the petitioner is about his liability under the security bond. The petitioner admits his signature in the security bond. The learned Government Pleader produced before me the bond containing the signature of the petitioner written by the Revenue Inspector. In as much as the petitioner admits his signature, but pleads that his signature was taken on a blank paper and that such a blank paper has been made use of for the preparation of the security bond, the burden lies upon him to establish that fact From the mere fact that he raises the controversy about his liability under the security bond, it does not mean that provisions of the Revenue Recovery Act have become inapplicable If a mere contest about the liability were to exclude the applicability of the provisions of the Revenue Recovery Act, the provisions of the Act would be set at naught by the person liable by merely raising the controversy about his liability . I do not think such a result should be allowed to follow. In as much as the petitioner admits his signature in the security bond, it is for him to show that the bondis unenforceable for the reasons urged by him. I do not think such a result should be allowed to follow. In as much as the petitioner admits his signature in the security bond, it is for him to show that the bondis unenforceable for the reasons urged by him. I do not, therefore, find anything standing in the way of the respondents from taking action against the petitioner under the Revenue Recovery Act in enforcement of the security bond.” 40. Ramaprasada Rao, J., considered this question in A.R.A. Karuppiah Nador and others v. The Commissioner of Civil Supplies, Madras and another 1972 I, M.L.J. 99; 85 L.W. 887. The learned Judge observed: “The Revenue Recovery Act is a law intended to enable the State to recover with utmost expedition and without undue expense, amounts payable by the defaulters, whose default cannot be challenged in any manner known to law in any Court of law. In fact, there must be consensus ad idem between the State and the defaulter as regards the nature and quantum of default if the State intends to set the provisions of the Revenue Recovery Act into motion for recovery of such arrears found and payable by the defaulters. As s matter of fact, there are innumerable instances in which statutes have adopted the process specifically enumerated in the Revenue Recovery Act as part and parcel of their own, for the easy recovery of the amount due to the State in the circumstances mentioned in each of those statutes. Thus, the Revenue Recovery Act being enabling it must also satisfy certain acid tests, the most important of which is that the arrears sought to be recovered under that Act are indisputable and cannot be challenged under law. This seems to be the sine qua non for the State to invoke the provisions of the Revenue Recovery Act. This is absent in the instant case As a matter of fact, I have stated that the gravamen of the charge is that no opportunity was given to the petitioners to associate themselves with the authorities at the crucial moment when the shortage was being found and reckoned at the station of destination. The first notice given to the procuring agent on this matter is when a demand notice is raised against him. The first notice given to the procuring agent on this matter is when a demand notice is raised against him. Thus, the process adopted for the purpose of reckoning the so-called arrears violates the principles of natural justice, since no notice has been given to the procuring agent at the material point of time when such shortage is discovered or attempted to be discovered I am, therefore, of the view that whatever remedies the State may have in the matter of the recovery of the various amounts payable by the procuring agents (the writ petitioners) it cannot summarily invoke the provisions of the Revenue Recovery Act on the foot that there is a clause to that effect in the agreement between the parties in cases where such an agreement has been entered into In the other cases, where there is no such agreement between the procuring agent and the State to pay for the shortage, it follows afortiori that the provisions of the Revenue Recovery Act cannot be invoked at all. In the result, the writ petitions are allowed. But, the only direction that could be given in the circumstances is that the respondents in the absence of consensus between the Department and the procuring agents as regards the value of the shortages cannot invoke the provisions of the Revenue Recovery Act.” 41. At this stage, let me consider the effect of the above decisions. None of the above decisions holds that if there is a dispute about either the existence of the liability or the extent of the liability, the provisions of the Revenue Recovery Act cannot be invoked, pursuant to S. 52 of that Act. Though the observations of Ramaprasada Rao, J., in the judgment extracted above may appear to be wide, in my view, the learned Judge did not go to the extent of excluding the applicability of the provisions of the Revenue Recovery Act itself in the event of there being a dispute about either of the two elements mentioned above. As a matter of fact, the sentences extracted from the judgment of Palaniswamy. As a matter of fact, the sentences extracted from the judgment of Palaniswamy. J., underlined above will clearly show that if it is to be held that a mere existence of a dispute will exclude the applicability of the provisions of the Revenue Recovery Act, then the provisions of the Revenue Recovery Act itself can be set at naught by every person by simply raising a dispute about his liability or the extent of his liability. 42. The use of the expressions, “ consensus ad idem ” and the arrears sought to be recovered under that Act are indisputable and cannot be challenged under law” in the judgment of Ramaprasada Rao, J., may give an impression that the learned Judge contemplated a complete agreement between the State and the alleged defaulter with regard to the existence as well as the extent of the liability which cannot be challenged in a Court of law, before the invocation of the provisions of the Revenue Recovery Act. However, I do not understand the judgment of the lea rned Judge in that light. As a matter of fact, the learned Judge has not laid down anything different from what the Bench of the High Court of Andhra Pradesh has laid down in the reference cited already. 43. Therefore, in my opinion, the result of the above decisions is that in a case where the amount is recoverable only as “sum due to the State Government” falling within the scope of S. 52 of the Revenue Recovery Act and where a person from whom the said amounts is sought to be recovered disputes either the existence of his liability or the extent of his liability, before resort to the provisions of the Revenue Recovery Act can be had, there must be an enquiry by the State in which the alleged defaulter i s entitled to participate and wherein the basis of the liability as well as the amount claimed by the State must be made known to the alleged defaulter who is given an opportunity to place all the materials and circumstances which, in his opinion, go to exclude or eliminate his liability itself or to reduce the liability, and a determination based on such enquiry should be arrived at with reference to the existence or the extent of the liability of the defaulter. That is exactly what Ramaprasada Rao, J., himself meant is made clear by two of his subsequent judgments. 44. In his judgment, dated 4th August 1972 in D. Venugopal v. District Revenue Officer Koncheepuram etc. , W.P. Nos. 3101, 3310 to 3322 and 3671 of 1971, 26 and 37 of 1972 and and 3403 of 1970 the learned Judge referred to the judgment of this Court in Kuppuswamy Gramani v. State of Madras W.P. Nos. 2474 and 2505 of 1971, judgment of Alagiriswami, J., in W.P. Nos. 1216, 1217 and 1239 of 1969, and that of Palaniswamy, J. in W.P. No. 1639 of 1969, and also his own judgment referred to above and held that in the case in which he was dealing, the shortage in the outrun could be ascertained only after a fuller enquiry into the subject matter and after the party affected was given a full opportunity to defend himself and that defaulters could not be assumed on self-serving hypothesis. 45. In the latest judgment of his (Rama, prasada Rao, J.), dated 21st June 1973 in R.R.P.M Murugalan Chettiar v. State of Tamil Nadu W.P. Nos. 2474 and 2505 of 1971, the learned Judge pointed out: “It is no doubt true that recourse to proceedings under the Revenue Recovery Act cannot be resorted to by the State when the basis for the proceedings, namely, the demand raised is uncertain, disputed and not accepted by the person against whom such proceedings are initiated. This position is well settled. Also, in a case where the affected person is not given an opportunity to state his objections to a given demand and if action under the Revenue Recovery Act is taken capriciously and arbitrarily in vi olation of the principles of fair play and fair bearing, then the element of suspicion enters into the claim and courts ordinarily would doubt its enforceability without further elucidation or proof. But in a case where the principles of natural justice are remembered and the person against whom the demand is raised is called upon to state his objections to such a levy and after a reasonable investigation and mutual discussion between the State and the citizen, the amount is arrived at or revised, then it cannot be said that the affected party would still be entitled to invoke the doctrine of natural justice so as to avoid the liability to respect the demand raised, which demand has been quantified after discussion and negotiation The position in Karuppiah Nadar v. Commissioner of Civil Supplies 1972 M.L.J. 99; 85 L.W. 887 was one in which the affected party was never given any opportunity, but on the other hand, a one sided demand was raised by the State without any reference to the addressee, and when so confronted, the aggrieved person came to court and sought rightly for a reilef under Art. 226. This is not the case here. In the instant case, the petitioner himself admits that he made representations to the revenue officials, the pool price differential cost directed to be collected by him was collected, and was also remitted and that be should not be required to remit the cost that was not specified in the permits given to him. This is a matter which was considered by the revenue officials after notice to the petitioner, and ultimately it was decided, having regard to the practice available and the conditions of the contract between the parties and other circumstances, that the demand raised was legitimate legal and enforce able. If still the petitioner feels that the record would not justify the raising of the demand or the enforceability of the demand, then it is for him to work out his rights in a civil court, but it is not for him to interdict the State from having recourse to the provisions of the Revenue Recovery Act which is available to it in a case where a liquidated demand arises and such a demand has been quantified and computed in the presence of the aggrieved party.” 46. Having regard to the above decisions of Ramaprasada Rao, J., himself, I am clearly of the opinion that the learned Judge did not intend to lay down anything other than what I have already indicated above. Having regard to the above decisions of Ramaprasada Rao, J., himself, I am clearly of the opinion that the learned Judge did not intend to lay down anything other than what I have already indicated above. I may also point out that the determination and adjudication which I contemplate as a preliminary to invocation of the provisions of the Revenue Recovery Act cannot take the place of an adjudication or determination in a Court of law which can be bad either by the State itself filing a suit in a Civil Court instead of having recourse to the provisions of the Revenue Recovery Act or by the citizen himself instituting a suit to question the action of the State under the provisions of the Revenue Recovery Act. The determination and adjudicatior contemplated by me above is more or less in the nature of preliminary ascertainment of the existence or extent of the liability of a citizen, as a condition precedent to invocation provision of the Revenue Recovery Act. To hold that such a determination and adjudication should be a substitute for an adjudication and determination by a regularly constituted civil court will be to take away the right of an aggrieved citizen to question the action of the State under the Act in a Civil Court. Equally to insist that the State should venture upon such adjudication and determination as if it were in the nature of a regular trial in a civil Court will tend to defeat the very object of the Revenue Recovery Act and set at naught the provisions of the said Act. 47. I shall now illustrate the necessity for ascertainment of such amounts after giving an opportunity to the petitioners herein, with reference to some of the conditions of the auction themselves and the complaint of the petitioners. I have already extracted condition No. 23(1) as well as condition No. 36 (2) in Part “B”. Condition No. 23(1) merely states, “Fines will be levied on any amounts not so paid.” Condition No. 36(2) dealing with infraction of any of the conditions of the licence by a licensee or by any person in his employment provided for levy of a fine not exceeding Rs. 250. Condition No. 23(1) merely states, “Fines will be levied on any amounts not so paid.” Condition No. 36(2) dealing with infraction of any of the conditions of the licence by a licensee or by any person in his employment provided for levy of a fine not exceeding Rs. 250. There Is absolutely nothing in condition No. 23(1) as to the amount of fine and the circumstances under which it can be levied, and equally, there is nothing in condition No. 36(2) also as to the amount of fine subject to the maximum of Rs. 250/- that can be levied, From the very nature of the case, whether fine should be levied at all, and if so, what is the quantum thereof will depend upon the circumstances of each case. 48. In this context, it is interesting to note the provisions contained in the Excise Standing Orders found in the Madras Excise Manual Vol. II. Standing Order 34(3) states: “It is not always advisable to issue coercive process immediately on default, but a fine may be levied under the conditions of the licence in order to enforce punctuality in the payment of kists. The following scale may be published with a warning that it will be rigidly enforced in every case of delay. It is not however meant that the scale should be arbitrarily enforced and officers empowered to impose fines can exercise their discretion in the matter.— Fine; Rs. Kists below Rs. 20 1 Kists from Rs. 20 and below Rs. 50 2 do. 50 do 100 3 do. 100 do 200 6 do. 200 do 400 12 do. 400 do 800 24 do. 800 do 1500 40 do. 1500 do 2500 50 do. 2500 do 4000 75 do. 4000 do 6000 100 do. 6000 and above 150 A separate fine may be levied for each licence in respect of which there has been default.” 49. Unfortunately, when the Commissioner of Excise published his notification with regard to the conduct of auctions for the year 1971-1972 on 14th July 1971 in the Tamil Nadu Government Gazette Extraordinary, he bad not obtained the approval of the Government for the scale of fine to be levied, and therefore, the said scale was not incorporated in the notification. However, in the instructions issued by him to the Collectors and other officers (vide Ref. S. Spl. However, in the instructions issued by him to the Collectors and other officers (vide Ref. S. Spl. 1-9/71-1, dated 22nd June 1971) he bad practically incorporated the above Standing Order, with a different scale of fine, but a citizen had no opportunity of knowing the same. It would appear that by the time the notice for auction for the period from 1st September 1973 to 31st August 1974 was issued, he had obtained the approval of the Government, and that is the reason why the following table is given in Condition No. 22 in Part ‘B’ in relation to the auctions for the year 1st September 1973 to 31st August 1974, published in the supplement to P art III of the Tamil Nadu Government Gazette dated 13th June 1973. Fines shall be levied on any amounts not so paid according to the following slab system Monthly rentals Fine amount Rs. (i) Upto Rs. 100 1 (ii) Above Rs. 100 and upto Rs. 200 2 (iii) Above Rs. 200 and upto Rs. 400 3 (iv) Above Rs. 400/ and upto Rs. 800 5 (v) Above Rs. 800 and upto Rs. 1500 10 (vi) Above Rs. 1500 and upto Rs. 2500 15 (vii) Above Rs. 2500 and upto Rs. 4000 30 (viii) Above Rs. 4000 and upto Rs. 6000 45 (ix) Above Rs. 6000 60 Rs. 10 for each slab of Rs. 1000 above Rs. 7000 50. I have already referred to condition No. 16 under Part ‘B’ providing that no liquor shall be sold either below or above such minimum or maximum prices as fixed by the Commissioner from time to time for sale of the same. The petitioners in W.Ps. Nos. 3399 of 1973, 4635 of 1973 and 4656 of 1973 complain that no such maximum o minimum price was fixed and that consequently, there was an unhealthy competition with the result the petitioners had to suffer a loss. Their further contention is that the State it self, having violated the condition prescribed by it, is not entitled to take advantage of its own illegal action and claim damages or loss from the petitioners. 51. The petitioners in W.P. Nos. Their further contention is that the State it self, having violated the condition prescribed by it, is not entitled to take advantage of its own illegal action and claim damages or loss from the petitioners. 51. The petitioners in W.P. Nos. 2216 of 1972 and 3498 of 1973 complain that there had been a mistaken identity of the persons who bid at the auction and that they themselves never bid at the auction, never applied for a licence and never ran the business, and still a demand has been made on them. 52. The petitioners in W.P. Nos. 2884 of 1973, 2167 of 1973, 5012 of 1973 and 1954 of 1973 complain that no licence was issued to them, notwithstanding their complying with the requirements of all the conditions and that the officers of the Government themselves not having issued a licence, and thereby having disabled the petitioners from carrying on business, it is not opened to them to claim any amount from the petitioners by way of alleged loss. 53. Yet another complaint of some of the petitioners is that there had been undue delay in confirming the bids in their favour and in issuing licences to them and that this delayed the commencement of their business; that similarly there had been delay in confirming the highest bids in the re-auctions and in issuing licences to the highest bidders therein, which prevented them from commencing their business promptly; and that all these factors should be taken into account in assessing the alleged losses claimed from them. 54. A large number of petitioners complain that they bid at the auction for such high amounts because of the assurance given to them that they would be able to open a branch shop, but their applications for the opening of a branch shop were not granted, and that caused loss to them. On the other had, some of the petitioners complain that because of neighbouring shop-owners being allowed to open branch shops very near their shops, they suffered loss and that consequently, they should not be made liable for any loss. 55. Certain other petitioners, namely, the petitioners in W. P. Nos 2377 and 3447 of 1973 complain that there had been no adequate supply of liquor to them, and that therefore, they bad suffered a loss. 56. 55. Certain other petitioners, namely, the petitioners in W. P. Nos 2377 and 3447 of 1973 complain that there had been no adequate supply of liquor to them, and that therefore, they bad suffered a loss. 56. Yet, another group of petitioners complain that illicit manufacture and sale of toddy were not prevented, and that consequently, such sub-standard toddy was sold at a low price which competed with their business, with the result trey bad to suffer loss. Their complaint is that having sold the exclusive privilege of selling toddy and arrack to them, it was the duty of the State to prevent illicit manufacture and sale of those drinks and the State having failed in its duty, the petitioners venture was really frustrated, and that consequently, the petitioners should not be made liable to pay any compensation, to the Government. 57. The petitioners in W.P. Nos. 5554 to 5563 of 1973 further contended that they were issued licence only for month to month and that it was illegal; that because of the power cut in force, their hours of business were curtailed; that consequently they bad suffered loss; and that since the loss was due to the conduct of the State itself, the State cannot compel the petitioners concerned to pay any loss to the Government. 58. Yet another complaint of some of the petitioners is that other persons were allowed to open their shops within the vicinity of their shops; that in view of this competition, the petitioners concerned suffered loss; and that the State having illegally allowed others to open their shops in the vicinity of the petitioners shops, it cannot seek to recover any loss from the petitioners concerned. This objection is strikingly present in the case of the petitioner in W.P. No. 5602 of 1973. In that case, one Palani Gounder, opened his shop very near the petitioners shop and the petitioner filed W.P. No. 3135 of 1972, K. Palaniappa Nadar v. Palani Gounder and others , on the file of this Court challenging the action of the authorities in permitting the opening of that shop and that writ petition was allowed. Against that decision, the said Palani Gounder preferred W.A. No. 28 of 1973, and obtained an interim order of stay, and ultimately, that writ appeal was also dismissed. Against that decision, the said Palani Gounder preferred W.A. No. 28 of 1973, and obtained an interim order of stay, and ultimately, that writ appeal was also dismissed. The case of the petitioner is that the proceedings of this Court established that the action of the authorities in permitting the said Palani Gounder to open his shop in the vicinity of the petitioners shop was illegal: that because of this illegal action of the State, there was a heavy competition from the nearby shop and that resulted in a loss to the petitioner: and that in such circumstances, the State itself raving committed an illegality, cannot claim any alleged loss from the petitioner. 59. Another case in this behalf is that of the petitioner in W P No. 5485 of 1973. In that case another person filed O.S. No. 737 of 1972 on the file of the Court of the District Munsif of Arni, and in I.A. No. 1108 of 1972, obtained an interim injunction preventing the petitioner in the writ petition from carrying on business. The case of the petitioner is that the petitioner was prevented by an injunction of the Court from carrying on business with the result he suffered loss and that the State cannot claim any less from him as if by his default, the petitioner did not carry on the business. 60. In W.P. No. 5511 of 1973, the petitioner has contended that he Hood as a surety for payment of only two months rent by the highest bidder, and that therefore, the entire loss cannot be sought to be recovered from him. Similarity, in W P. No. 5707 of 1973, the petitioner contends that be offered to stand as surety, that the security offered by him was not accepted, that consequently no mortgage deed was executed and registered by him, with the result no permanent licence was issued to the highest bidder, and that in such circumstances, not mount can be claimed from him. 61. Several petitioners complain that the amount demanded from them is not correct, even on the basis of the alleged loss suffered by the Government being the difference between the amount for which each of the petitioners bid at the original auction and the amount fetched at the subsequent auction, and they seek to establish this from the very figures mentioned in the demand notices them-selves. The cases of the petitioners in W.P. Nos. 5435, 5436, 5545 and 5549 of 1973 are in point. 62. The petitioners may be right or may be wrong on the facts alleged by them or c n the inferences sought to be drawn by them from the said facts. But, it cannot be denied that they have a bearing on the question whatever the petitioners ate liable at all, and if liable, in whit amount. Without considering these objections of the petitioners, after giving an opportunity to them to substantiate their respective contentions and arriving at a conclusion as to whether the petitioners are liable at all, and if so, in what amount, based in materials produced by the State as well as the persons concerned, it will not be appropriate on the part of the State to proceed to recover any amount from the petitioners under the Revenue Recovery Act, Such an enquiry and datermination are necessary from the very nature of the case and the nature of the controversy as well as from the basic requirement of the principles of natural justice, namely, that no person should be visited with any penalty or forfeiture without his being given an opportunity to plead and put forward his case against such penalty or forfeiture. I reiterate that such determination is necessary only in cases where there is scope for reasonable dispute or doubt, and not where the existence or the extent of the liability has already been determined or agreed to or obvious or patent. Such a determination even in cases of reasonable dispute or doubt is one arrived at, in an enquiry in the nature of a preliminary investigaton, constituting a condition precedent to the invocation of the provisions of the Revenue Recovery Act and is not a substitute for a judicial adjudication and determination by a civil court, either at the instance of the State as an alterantive to the proceedings under the Revenue Recovery Act or at the instance of the affected party questioning the action taken by the State under the Revenue Recovery Act. 63. Consequently, all these writ petitions are allowed. 63. Consequently, all these writ petitions are allowed. In each one of them, there will be a direction to the respondents not to proceed with the recovery of the amounts alleged to be due from the petitioners under the provisions of the Revenue Recovery Act, 1564, without first holding an enquiry, after communicating to the petitioners concerned the particulars of the amount claimed from them and how the same is arrived at, and giving them an opportunity to place all the materials in their possession to substantiate their case, if they dispute either their liability or the extent of their liability and considering the materials so placed and ascertaining the amount due from them on the basis of such enquiry. There will be no order as to costs.