ISSAC v. ASSISTANT EXCISE COMMISSIONER — 1983 DIGILAW 287 (KER)

Judgment :- 1. In this writ petition, the question of law that arises for consideration relates to the interpretation to be given to sub-rules (1) and (3) of R.8 of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974, (the Rules). 2. The petitioner was the successful bidder of arrack shop Nos. 4, 7 to 12, 15, 19, 20 to 24 and 26 to 28 in Sultan's Battery Range in Wynad District for the financial year 1981-82 in the auction held on 27-3-1981 pursuant to the sale notification in accordance with S.18A of the Abkari Act 1 of 1077 (the Act) and R.3 (1) of the Rules, the bid amount being Rs. 50,43,000/-; he was also the successful bidder in respect of 15 arrack shops in Kalpetta Range in Wynad District in the auction held on 27-3-1981, the bid amount being Rs. 51,11,000/-. The first respondent, the Assistant Excise Commissioner, Kozhikode, who was the auctioning officer, had announced 1350 litres of arrack to be the monthly quota allowed for the above shops put up to auction in Sultan's Battery Range and 2353 litres to be the monthly quota for the shops in Kalpetta Range. For the month of April 1981 for the arrack shops in the Sultan's Battery Range this monthly quota was supplied (800 litres on 3-4-1981, 300 litres on 9-4-1981 and 250 litres on 17-4-1981 vide: Ext. P16 at page 85 of the Paper Book). Though as per order No. D3-2994/81 dated 20-4-1981, a true copy of which is Ext. P4 (page 83 of the Paper Book), on the recommendation of the Excise Inspector, Sultan's Battery, the first respondent Assistant Excise Commissioner accorded sanction for the issue of 25,000 litres of arrack on commission basis for the shops in Sultan's Battery Range for the month of April 1981 in excess of the announced monthly quota, out of this, the petitioner was able to draw only 1000 litres; and that was on 27-4-1981; he had remitted the commission and duty for 2000 litres on 27-4-1981: but he was not able to draw that, as arrack was not available for supply. This was the position in contrast with that of April 1980 during which month the petitioner had received for sale in the above shops 19,000 litres of arrack in excess of the announced monthly quota. This was the position in contrast with that of April 1980 during which month the petitioner had received for sale in the above shops 19,000 litres of arrack in excess of the announced monthly quota. Pointing out these facts the petitioner had sent a representation dated 29-4-1981 to the 1st respondent Assistant Excise Commissioner praying for the remission of kist for the month of April 1981; and the copy of that representation is Ext. P-16 Ext. P-15 is the copy of order No. D3-2994/81 dated 11-5-1981 passed by the 1st respondent Assistant Excise Commissioner whereunder, referring to the application dated 11-5-1981 made by the petitioner, and Ext P-14 order passed by him earlier on 20-4-1981, sanction was accorded for the issue of 20001itres of arrack for which duty and commission (which came to Rs. 7000/-) were remitted by the petitioner as per TR. No. 1005 dated 27-4-1981. subject to availability of stock of arrack. The total quantity of arrack supplied to the petitioner for bis 18 shops in Sultan's Battery Range is shown in Ext. P-24 which reveals that as against a total additional quota of 4,10.000 litres applied for, the additional quota granted was only f or 77 240 litres, whereas the corresponding figures for 1979-80 for 9 shops in Sultan's Battery Range was 1,52,700 litres applied for and 1,52,700 litres granted. In 1980-81 for the same 9 shops in Sultan's Battery Range the additional quota granted was 1,51,400 litres for the period April 1980 to January 1981 (no supply having been made in the months of February and March 1981 for want of stock). In 1980-81 for the same 9 shops in Sultan's Battery Range the additional quota granted was 1,51,400 litres for the period April 1980 to January 1981 (no supply having been made in the months of February and March 1981 for want of stock). By the middle of May 1981, the petitioner approached this Court with this Writ Petition seeking the following reliefs: (1) to declare that R.5(2) of the Rules is ultra vires; (2) to issue a writ of mandamus directing the 1st respondent Assistant Excise Commissioner to supply the petitioner with additional quantity of arrack as requested for by him, on payment of commission to be fixed by the Board of Revenue and quota quantity of arrack as announced at the time of auction on payment of its price; (3) to issue a direction to the 3rd respondent State of Kerala not to enforce monthly payments due, calculated on the basis of the bid amount, except those amounts payable on the basis of arrack supplied viz., on the basis of statement to be filed in that behalf; (4) to issue an order preventing the Government from conducting any reauction and from terminating the supply of not only the arrack quota fixed but also the additional quantity of arrack in accordance with the rules and the contract executed with the Government; (5) to issue a direction to the 3rd respondent not to appropriate the advance paid by the petitioner towards any amount of kist alleged to be due from the petitioner concerning Abkari Auction for Sultan's Battery Range conducted on 27-3-1981; (6) to issue a writ of mandamus restraining the respondents from collecting the petitioner kist other than in proportion to the arrack actually supplied to the petitioner as against the total quantity of arrack requisitioned or demanded by the petitioner from the Government; and (7) to issue appropriate order as is deemed fit and proper in the circumstances of the case. The writ petition has subsequently been amended incorporating a prayer for quashing the revenue recovery proceedings initiated against the petitioner for recovery of the abkari dues for the year 1981-82. 3. The writ petition has subsequently been amended incorporating a prayer for quashing the revenue recovery proceedings initiated against the petitioner for recovery of the abkari dues for the year 1981-82. 3. Sri K. K. Venugopal, the counsel for the petitioner, submitted that the petitioner approached this Court very soon after the commencement of the abkari year, as early as on 11-5-J981, for the issue of a writ of mandamus directing the concerned respondents to supply arrack in excess of the announced monthly quota which the petitioner was entitled to receive to meet the local requirement. The writ petition, as it was at the time of its filing, was for the enforcement of his legal rights and for compelling the respondents to discharge their statutory obligations. He submitted that the period during which the respondent ought to have supplied, and the petitioner was ready and willing to receive the supply of arrack, having expired, this Court ought to mould the reliefs in such a way as to do substantial justice between the parties. 4. S.18A of the Act provides: "(1) it shall be lawful for the Government to grant to any person or persons, on such conditions and for such period as they may deem fit, the exclusive or other privilege (i) of manufacturing or supplying by whole-sale; or (ii) of selling by retail; or (iii) of manufacturing or supplying by whole-sale and selling by retail, any liquor or intoxicating drugs within any local area on his or their payment to the Government of an amount as rental in consideration of the grant of such privilege. The amount of rental may be settled by auction, negotiation or by any other method as may be determined by the Government, from time to time and may be collected to the exclusion of, or in addition to, the duty of tax leviable under S.17 and 18. (2) no grantee of any privilege under sub-s. (1) shall exercise the same until he has received a licence in that behalf from the Commissioner. (3) In such cases, if the Government shall by notification so direct, the provisions of S.12 relating to toddy and toddy producing trees shall not apply." (emphasis supplied) Chapter VI relates to licences and S.24 provides forms and conditions of licences, etc. (3) In such cases, if the Government shall by notification so direct, the provisions of S.12 relating to toddy and toddy producing trees shall not apply." (emphasis supplied) Chapter VI relates to licences and S.24 provides forms and conditions of licences, etc. It reads: "Every licence or permit granted under this Act shall be granted: (a) on payment of such fees, if any; (b) for such period; (c) subject to such restrictions and on such conditions; (d) shall be in such form and contain such particulars, as the Government may direct either generally, or in any particular instance in this behalf." S. 29 empowers the Government to make rules for the purpose of carrying out the provisions of the Act. Sub-s. (2) of that section enumerates the various subjects with respect to which rules could be framed by the Government; but the form in which the licence is to be granted is not one of the subjects enumerated thereunder. S.69 under Chapter X provides: "Al! rules made and notifications issued under this Act shall be made and issued by publication in the Gazette. All such rules and notifications shall thereupon have the force of law and read as part of this Act and may in like manner be varied, suspended or anulled." S. 28 lays down: "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." The general conditions applicable to licences of toddy, arrack or foreign liquor retail, and foreign liquor wholesale shops are found in Chapter V; and special conditions applicable to licences for the privilege of the sate of arrack in independent shops are found in Chapter VII. R.6(5) of the rules in Chapter V lays down: "The possession or sale at any licensed premises of any liquor other than that to which the licence relates is prohibited." Rule 6(10) provides: "The Assistant Excise Commissioner may fix the working hours of shops in each area according to his discretion subject to the conditions that the total working hours shall not exceed 12 hours in a day and no shop shall remain open earlier than 9 a.m. or later than 10 p. m. except on special occasions like fairs and festivals. But the Assistant Excise Commissioner may relax the above condition when found necessary." Rule 6(14) requires: "Subject to the provision of the above condition every shop shall be kept open as prescribed in sub-rule (10) unless its temporary or permanent closure is authorised or ordered by the Board of Revenue. In every shop such supply of toddy, arrack or foreign liquor including coco-brandy as the Board of Revenue, or the Deputy Commissioners of Excise or Assistant Excise Commissioner may consider sufficient to meet the local requirement shall be maintained. Shops not opened before the 1st May of the year and shops once opened but in which the sales have been discontinued for more than 30 days consecutively shall be liable to be resold at the risk of the licencees." Rule 8(6) reads: "The licensee shall purchase arrack only from a Distillery or wharehouse established by the contract suppliers. Special licences shall be issued by the Assistant Excise Commissioner to contractors of arrack shop who have taken all the Arrack shops of a Range enblock or more or to their agents, for opening Depots where necessary to store duty paid arrack on payment of a fee of Rs. 50 and on such conditions as may be prescribed by the Board of Revenue. Not more than one Arrack Depot will be sanctioned in a Range." 5. It is abundantly clear from the material available on record that during the last two months in 1980-81 (about which period we are not directly concerned in these writ petitions) and practically during the whole of 1981-82 there was acute scarcity of arrack in the State of Kerala. Ext. It is abundantly clear from the material available on record that during the last two months in 1980-81 (about which period we are not directly concerned in these writ petitions) and practically during the whole of 1981-82 there was acute scarcity of arrack in the State of Kerala. Ext. P-8 is an extract from the Mathrubhoomi dated 9-7-1981 in which the Excise Minister is stated to have told the Kerala Legislative Assembly that Kerala produced only 14 percent of the total requirement of arrack for consumption in the State; and that 86 percent had to be brought from outside. Therein it is also seen stated that though the Government of Tamilnadu had agreed to supply ten thousand tons of molasses with which ten lakhs litres of spirit could have been produced, not even one litre was supplied by that Government; and that was the main reason for the scarcity of arrack in the State. The same report contained the further information that in that year (1981-82) the auction of arrack shops fetched only 43 crores against 45.27 crores in 1979-80. and Rs. 51.17 crores in 1980-81. Ext. P-7 is an extract from the Malayala Manorama dated 15-7-1981 under the caption "Arrack to be produced from tapioca". It was reported inter alia that the Excise Minister told the Assembly that it was decided to produce arrack from tapioca to meet the acute scarcity of arrack in the State According to the report the Minister had told the Assembly that it would be in the Chittoor Co-operative Sugar Mills that the production of arrack from tapioca would be begun; that the process would be later extended to the Mills at Thiruvalla and Pandalam; and that, if necessary, new distilleries would be established for the purpose. Ext. P7 is stated to be extract from the report in the Deepika dated 30-5-1981 of the disclosure stated to have been made by the Excise Minister Sri M. K. Krishnan at a Press conference at Trivandrum that out of 1845 arrack shops in the State 765 shops remained without being auctioned for want of bidders mainly on account of the scarcity of arrack in the State, for, whereas as against 60 lakhs litres during the previous year, not a drop of rectified spirit was received in Kerala from outside; and what was allotted by the Centre was not also received. He is stated to have added that to remove this scarcity, steps were being taken to produce arrack in the distilleries in Kerala; arrangements were being made in the Chittoor Mills for that purpose; however, for that Mill to go into production, it might take one year. Ext. P6 is an extract from the Mathrubhoomi dated 24-4-1981. Under the caption "Arrack distillation would be entrusted with private distilleries also" it was reported that distillation of arrack by private distilleries to remove scarcity of arrack was an important decision taken at the meeting of the Council of Ministers on Wednesday. It also added that because of the scarcity of arrack in the State as a result of the "Spirit Scandal", as many as 35 per cent of the arrack shops remained without being auctioned. The report went on to say that even the successful bidders did not open the shops as arrack was not available. According to the report 1,75,000 litres of arrack was the monthly requirement of the State whereas the production capacity of the State came to 45,000 litres only a month. If the ten lakhs litres spirit and 5000 tons of molasses allotted by the Central Government were made available, it might have been possible to meet the requirements. It was only if it could be assured that arrack would be available, the auction in respect of the remaining shops could take place. The private distillerates would produce arrack from jaggery or from spirit that might be obtained. Ext. P5 is an extract from Malayala Manorama dated 18-4-1981. Therein it was stated that to tide over the scarcity of arrack, the Government had decided to entrust the production of arrack to private distilleries through Mannam Sugar Mills, Travancore Sugar Mills and Chittoor Sugar Mills which were public sector concerns. It was stated therein that because of the scarcity, and there being no prospect of the situation improving immediately, nearly half the number of arrack shops could not be auctioned; though auctions were conducted several times, there were no bidders; remission of kist was demanded by those who had bid in auction, but to whom arrack could not be supplied; and the Government was anticipating a loss of half the revenue which it was expecting from that source. This was the position that was stated to have been explained by Sri M.K. Krishnan, the Excise Minister, at the meeting of Liaison Committee of the ruling party in the light of the decision taken by the Cabinet the previous day. Ext. P11 is the copy of G. O. Rt. 122/81/TD dated 25-2-1981. The material portion of that order made as follows: "The present supply position of arrack in the State is very precarious. To tide over the situation the existing arrangements for the supply of arrack within the State has to be reviewed for making available adequate quantity of arrack from alternative sources. Government have therefore considered the question in all its aspects and are pleased to issue the following orders: (i) Alternative arrangements will be made with the public sector unit within the State to distill spirit out of jaggery. (ii) Fifty lakhs litres of jaggery spirit arrack will be produced by the above distilleries. (iii) The issue price of arrack to contractors will be fixed at Rs. 6/- per litre. (iv) The existing rate of commission of Rs. 2/- charged on arrack supply in excess of the prescribed quota will be completely waived in respect of jaggery spirit arrack." Ext. PI is an extract from the report dated 18-3-1981 in the Desabhimani dated 19-3-1981 under the caption "Spirit would be supplied to arrack shops": therein it has been stated inter alia that the Excise Minister Sri M. K. Krishnan at a Press Conference had stated that steps were being taken to ensure the supply of spirit required by the arrack shops in the State; other methods also would be adopted besides producing arrack through the three Sugar Mills in the State with the molasses allotted by the Centre; the intention is to produce arrack from jaggery; the cost of production of arrack from molasses per litre would be Rs. 1.10, whereas it would be Rs. 12/- if produced from jaggery; even then, in order to remove the scarcity of arrack it was decided to adopt that method; it was possible to produce spirit from tapioca: the cost of production of arrack from tapioca would be Rs. 5/- only per litre; for production of spirit from tapioca separate distilleries were necessary; for producing arrack from jaggery the distilleries in existence in Kerala would be sufficient. Ext. 5/- only per litre; for production of spirit from tapioca separate distilleries were necessary; for producing arrack from jaggery the distilleries in existence in Kerala would be sufficient. Ext. P10 is a statement showing the quantity of arrack supplied to the petitioner for the shops in Sultan's Battery Range during 1979-80 and 1980-81; and Ext. P24 is the statement showing the bid amount, the monthly quota applied for, the additional quota applied for, additional quota granted, and the total quantity granted in respect of the Kalpetta Range for the years 1975-76,1976-77,1977-78 and 1978-79; and separately for Kalpetta and Sultan Battery Ranges after the former Kalpetta Range was bifurcated into two for the years 1979-80,1980-81,1981-82 and 1982-83. Ext.P-25 is an extract from the profit and loss account for the year ended 31st March 1982 in respect of the petitioner's arrack shops at Kalpetta and Sultan's Battery Ranges. It showed a net loss of Rs. 78,29,876.15. 6. We do not give any weight to the argument attempted to be advanced by the respondents that the responsibility of the respondents to supply arrack in excess of the announced monthly quota could arise only when the petitioner fulfilled his part of the obligation by remitting the amount to the Treasury; and though under Ext. P-14, 25,000 litres was sanctioned for the petitioner's shops in Sultan's Battery Range for the month of April 1981, there was no proof of the duty and the commission having been remitted to the Treasury for the said 23,000 litres of arrack. This contention has no factual basis. Admittedly the amount equal to the duty on 2000 litres (besides for 1000 litres already supplied) has been remitted by the petitioner. It was only for the amount representing the commission on such quantity of liquor as for which chalan was issued, the petitioner could have remitted the amount. While one could appreciate the predicament in which the State was placed, it was too much for them to attempt to get over the consequences, if any, flowing from the failure or inability to supply the additional quota of arrack under such pretext. Though sanction was accorded under Ext. P-14 dated 20-4-1981 for the issue of 25,000 litres of arrack to the petitioner, chalan was issued only for Rs.7000/- representing the commission on 2000 litres; and the petitioner promptly remitted the amount on 27-4-1981, as evidenced by TR. Though sanction was accorded under Ext. P-14 dated 20-4-1981 for the issue of 25,000 litres of arrack to the petitioner, chalan was issued only for Rs.7000/- representing the commission on 2000 litres; and the petitioner promptly remitted the amount on 27-4-1981, as evidenced by TR. No. 1005, but the truth was, even as late as 11-5-1981, as is evident from Ext. P15 proceedings of the 1st respondent Assistant Excise Commissioner dated 11-5-1981, that quantity could not be supplied to the petitioner. In fact the position appeared to be so precarious that in its letter dated 13-5-81, a true-copy of which is Ext. P12, the Co-operative Sugar Mills at Chittoor had informed the 1st respondent Assistant Excise Commissioner as follows: "We write to inform you that we have been informed by the Board of Revenue that the additional quota to be given should be equal to the monthly quota fixed for such shop. We have accordingly advised our Aminas to restrict the issue of additional quota to the extent of monthly quota. It Following Ext. P12, the 1st respondent Assistant Excise Commissioner by his letter dated 22-5-1981, a true-copy of which is Ext. P13, had informed all Excise Inspectors under his control as follows: "Copy of the reference cited is herewith forwarded for information. You are requested not to recommend additional quota in excess of the monthly quota." 7.Having already found that the petitioner was not allowed sufficient quantity of arrack in excess of the announced monthly quota to meet the local demands, the question is whether there was any violation of the statutory obligation by the respondents; and if so, the petitioner was entitled to invoke the extraordinary jurisdiction of this Court under Art.226 of the Constitution for enforcement of his legal rights without resort to action in Civil Court to secure the relief, if any, to which he is entitled. Sub-rule (1) of R.8 of the Rules provides for two things: (1) a monthly quota of arrack for the shop put up for auction to be announced by the auctioning officer; and (2) the issue of arrack as might be permitted by the Assistant Excise Commissioner in excess of the announced monthly quota on realisation of commission at a rate to be fixed by the Board of Revenue. The contention put forward by the respondents, stressed in his argument by Dr. The contention put forward by the respondents, stressed in his argument by Dr. George Mathew, the Additional Advocate General, is that while the announcement of the monthly quota of arrack by the auctioning officer was a must, the permission for the issue of arrack in excess of the announced monthly quota was dependent on the discretion of the Assistant Excise Commissioner. The stand taken by the respondents, in other words, was that the Assistant Excise Commissioner's discretion to allow or not to allow additional quota, and the quantum, if any, thereof, was absolute; and, therefore, it was not open to the petitioner to insist that the first respondent Assistant Excise Commissioner should supply arrack in excess of the announced monthly quota. In support of this contention Dr. George Mathew drew our attention to the expression "shall" in relation to the requirement in regard to the announcement of monthly quota on the one hand and the expression "may" used in relation to the power of the Assistant Excise Commissioner to permit the issue of arrack in excess of the announced monthly quota on the other. No doubt, the expression used in relation to the power of the Assistant Excise Commissioner to permit issue of arrack in excess of the announced monthly quota is "may"; that does not, however, mean that he has an unfettered power to permit or not to permit in the matter. Let us assume that the Assistant Excise Commissioner has a discretion in the matter. Even then, that discretion cannot be exercised arbitrarily or capriciously but only reasonably and fairly on an objective assessment of all the aspects of the matter, with particular reference to the statutory duty, if any, and the obligation undertaken by the Assistant Excise Commissioner under the Licence Ext. P31 that he would permit issue of arrack in excess of the announced monthly quota granted to the petitioner in accordance with the provisions contained in S.18A and 24 of the Act. 8. Maxwell on 'Interpretation of Statutes', 12th Edition, at page 234, under the heading 'May' and 'Must', states: "In ordinary usage, 'may' is permissive and 'must' is imperative, and, in accordance with such usage, the word 'may' in a statute will not generally be held to be mandatory. 8. Maxwell on 'Interpretation of Statutes', 12th Edition, at page 234, under the heading 'May' and 'Must', states: "In ordinary usage, 'may' is permissive and 'must' is imperative, and, in accordance with such usage, the word 'may' in a statute will not generally be held to be mandatory. In some cases, however, it has been held that expressions such as 'may' or 'shall have power' or 'shall be lawful' have to say the least a compulsory force, and so their meaning has been modified by judicial exposition." It would not always be safe to decide whether a particular direction in a statutory provision is mandatory or directory on the sole basis of the expression'may' or 'shall' used in the statute. 9. Craies on Statute Law, Seventh Edition, at page 229, under the heading 'shall' and 'may', states: "This distinction is reflected in the use of the words 'shall' or 'may' in a statute. The meaning of these words in statutes conferring a power is the subject of constant and conflicting interpretation. 'May' does not mean'must', 'may' always means 'may' 'May' is a permissive or enabling expression but there are cases in which for various reasons as soon as the person who is within the statute is entrusted with the power, it becomes his duty to exercise it." The same author at page 285 under the heading: "may', sometimes equivalent to "shall" states: "It is, however, a well-recognised canon of construction, as Lord Cairns said in Julius v. Bishop of Oxford ((1880) 5 App. Cases 114), that "where a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised and the Court will require it to be exercised." And Lord Blackburn said "The enabling words are construed as compulsory whenever the subject of the power is to effectuate a legal right." In R. v. Bishop of Oxford, Cockburn C.J., said: "So long ago as the year 1693, it was decided in the case of R. v. Burlaw, that when a statute authorises the doing of a thing for the sake of justice or the public good, the word 'may' means 'shall', and that rule has been acted upon to the present time and of course the same rule will apply to the words 'it shall be lawful. For these reasons, we are of opinion that the word 'may' is not used to give a discretion, but to confer a power upon the Court and judge, and that the exercise of such power depends, not upon the discretion of the Court or judges, but upon the proof of the particular case out of which such power arises" 10. In The Municipal Corporation of Greater Bombay v. The BEST Workers' Union (AIR. 1973 SC. 883) interpreting the expression 'shall' used in S.78(1)(D) of the Bombay Industrial Relations Act, 1946, Vaidialingam J , speaking for the Bench in Para.20 of the decision at page 891 of the report stated as follows: "Having due regard to the various aspects discussed above, we are of the opinion that the provisions contained in S.78(1)(D)(1) are not mandatory but only directory." In that judgment, there is a lucid discussion about the manner in which the expression 'shall' is to be interpreted, in the context in which it is used to give effect to the legislative intent in the scheme of the statute without being carried away by the literal meaning of the word 'shall'. The reasoning would apply equally to the expression 'may' also. In that context, the decision of the Supreme Court in State of Uttar Pradesh v. Jogendra Singh (AIR. 1963 SC. 1619) is a pointer. The reasoning would apply equally to the expression 'may' also. In that context, the decision of the Supreme Court in State of Uttar Pradesh v. Jogendra Singh (AIR. 1963 SC. 1619) is a pointer. Gajendragadkar J., as he then was, speaking for the Bench, in Para.8 at page 1620 of the report, construing the expression used in R.4 (2) of the U. P. Disciplinary Proceedings (Administrative Tribunal) Rules, 1947, stated as follows: "Rule 4 (2) deals with the class of gazetted government servants and gives them the right to make a request to the Governor that their cases should be referred to the Tribunal in respect of matters specified in cls. (a) to (b) of sub-r. (1). The question for our decision is, whether like the word 'may' in R.4 (1) which confers the discretion on the Governor, the word 'may' in sub-r. (2) confers the discretion on him, or does the word 'may' in sub-rule (2) really mean'shall' or 'must'? There is no doubt that the word 'may' generally does not mean 'must' or 'shall'. But it is well-settled that the word 'may' is capable of meaning 'must' or 'shall' in the light of the context. It is also clear that where a discretion is conferred upon a public authority coupled with an obligation, the word 'may' which denotes discretion should be construed to mean a command. Sometimes, the Legislature uses the word 'may' out of deference to the high status of the authority on whom the power and the obligation are intended to be conferred and imposed". 11. Ext. P31 is the licence, No. 269, for the year 1981-82 granted to the petitioner; and special condition No.1 under Clause.40 is to the effect that the auctioning officer would declare the monthly quota sanctioned for the shop put up for auction, adding that the Assistant Excise Commissioner would permit AIp¶XmWv arrack in excess of the announced monthly quota on payment of such commission as may be determined by the Board of Revenue, subject to the condition that it would not be less than Rs. 3.50 per litre. This licence, as already noticed, is in the form prescribed under S.24 of the Act. Ext. P-29 is the Government order dated 21-12-1981 in regard to the Abkari Policy for the year 1981-82; and Ext. P30 is the notice of sale of the privilege of vending arrack etc. 3.50 per litre. This licence, as already noticed, is in the form prescribed under S.24 of the Act. Ext. P-29 is the Government order dated 21-12-1981 in regard to the Abkari Policy for the year 1981-82; and Ext. P30 is the notice of sale of the privilege of vending arrack etc. in independent retail shops and foreign liquor in wholesale shops during the period from 1-4-1981 to 31-3-1982; and the last paragraph thereof states as follows: 'The auction sale will be held subject to the conditions set up under the Abkari Shops (Disposal in Auction) Rules, 1974". which means that the successful bidder would have the right to claim, and the excise authorities have a duty to permit, issue of arrack in excess of the announced monthly quota as contemplated in the latter part of the sub-rule (1) of R.8 of the Rules. A reasonable interpretation of the Rule coupled with the special condition in Ext. P31 licence that the Assistant Excise Commissioner would permit issue of arrack in excess of the announced monthly quota can hardly give room for doubting the right of the petitioner or the duty of the excise authorities in the matter. Even where such rights and obligations are not specifically mentioned in the contract, in the context in which the contract was entered into, such rights and obligations could be inferred. 12. In Har Prasad Choubey v. Union of India (AIR. 1973 SC. 2380), the Supreme Court had granted relief to the appellant before that Court. In that case, pursuant to an auction notice for the purchase of slack coal lying at Kumhari station of the Bengal Nagpur Railway, the appellant offered to purchase 852 tonnes of such slack coal; and that offer was accepted by the Chief Engineer of the Bengal Nagpur Railway. But, thereafter on account of the uphelpful attitude of the Coal Commissioner, the railway authorities did not allot the wagons necessary for transporting the coal (which had no local use at Kumhari) to Ferozabad, where it was to be used. But, thereafter on account of the uphelpful attitude of the Coal Commissioner, the railway authorities did not allot the wagons necessary for transporting the coal (which had no local use at Kumhari) to Ferozabad, where it was to be used. In Para.9 of the judgment, at page 2384 of the report, Alagiriswami J. who spoke for the Bench stated as follows: "This elaborate narration would make it clear that the appellant had bid for the coal under the honest and reasonable impression that he would be allowed to transport the coal to Ferozabad, that this was thwarted by the attitude of the Coal Commissioner, that later on the parties proceeded on the basis that the auction sale was to be cancelled and the appellant refunded his money. But apparently, because by that time much of the coal had been lost and the Railways would have been in difficulty to explain the loss they chose to deny the appellant's claim. We can see no justification on facts for such a denial and the defendants cannot refuse to refund the plaintiff's amount. The contract had become clearly frustrated. We must make it clear that we are not referring to the refusal to supply wagons but the refusal of the Coal Commissioner to allow the movement of coal to Ferozabad in spite of the fact that it was not one of the conditions of the auction. The appellant is, therefore, clearly entitled to the refund of his money. Furthermore, the contract itself not being in accordance with S.175 of the Government of India Act, is void and the appellant is entitled to the refund of his money...." 13. It is argued on behalf of the State that the dispute is in the realm of contract; and, therefore, the relief, if any, to which the petitioners are entitled has to be agitated in a civil Court without resorting to proceedings under Art.226 of the Constitution. This argument, no doubt, would have been attractive had the writ petition been merely for the enforcement of contractual obligations without reference to statutory duties. In this context, it has to be remembered that the petitioner approached this Court within about 11/2 months from the commencement of the Abkari (Financial) Year, having not succeeded in spite of repeated requests to the Assistant Excise Commissioner to permit the issue of arrack in excess of the announced monthly quota. In this context, it has to be remembered that the petitioner approached this Court within about 11/2 months from the commencement of the Abkari (Financial) Year, having not succeeded in spite of repeated requests to the Assistant Excise Commissioner to permit the issue of arrack in excess of the announced monthly quota. The position was that even in the month of April, as evidenced by Ext. P16. We have already noticed, that on a proper and reasonable interpretation of the provisions contained in S.18A and 24 of the Act, and R.6, sub-rule (1) and (3) of R.8 and R.10 and 14 of the Rules, the Assistant Excise Commissioner had a statutory obligation to permit the issue of arrack to the petitioner in excess of the announced monthly quota to meet the local demand bearing in mind also that the upset price fixed had real relevance to the quantity of arrack to be sold from the shop to enable the vendee of the privilege to realise such amount by sale of liquor as would be sufficient to meet the kist liability after meeting the running expenses, besides having a margin for making a reasonable profit. 14. The decisions of the Supreme Court in Har Shankar v. Dy. E. & T. Commissioner (AIR. 1975 SC. 1121) and in Sham Lal v. State of Punjab (AIR. 1976 SC. 2045) could be clearly distinguished on the facts of the case. In Har Shankar's case (1975 SC. 1121), the appellants,' bid was accepted in auction held in March, 1968 as they were the highest bidders for the country liquor vends at various places. The appellants paid the security deposit, but were unable to meet their financial obligations under the conditions of the auction, which fell in arrears. When the State demanded payment and threatened to cancel the bid and declared its intention to resell the vends, the appellants filed writ petitions in the High Court of Punjab and Haryana for the issue -of a writ of certiorari quashing the steps taken for the re-auction of the shops, and for the issue of a writ of mandamus restraining the respondents from enforcing the obligations of the appellant arising under the terms, of the auction. In Sham Lal's case, the appellants were the highest bidders in an auction for the sale of country liquor vends at various places in the State of Punjab and Haryana. In Sham Lal's case, the appellants were the highest bidders in an auction for the sale of country liquor vends at various places in the State of Punjab and Haryana. The appellants were called upon to pay the amount, which they were liable to. pay under the terms and conditions of the auction, whereupon they filed writ petitions in the High Court to challenge the demand. It was in the above background and on the facts of those cases, that the Supreme Court held that the licensees could not be permitted to avoid contractual obligations voluntarily incurred and to work the licences on terms as they find convenient. The Supreme Court therefore held that the High Court was right in refusing to exercise jurisdiction under Art.226 of the Constitution. 15. The petitioner in this case approached this Court almost immediately after the licence became operative and in violation of the special conditions contained in Clause.40 of the Licence granted, under the provisions of the Act, the excise authorities failed to permit issue of arrack in excels of the announced monthly quota. In effect, the attempt of the respondents, according to the petitioner, is to enforce their statutory obligation, without fulfilling their part of the statutory duties. As rightly contended by Shri Venugopal where there is unreasonableness and arbitrariness, the action of the authority in exercise of the statutory power or in fulfilment of statutory obligation could be questioned in a writ petition. In support of this contention, Shri Venugopal relied on the decision of the Supreme Court in D. F.O, South Kheri v. Ram Sanghi Singh (AIR. 1973 SC. 205), which was followed in a later decision, Radhakrishna Agarwal v. State of Bihar (AIR. 1977 SC. 1496). 16. In State of Haryana v Jage Ram (AIR. 1980 SC 2018) on March 16,1967, the Excise and Taxation Commissioner, Haryana, announced by publication of a notice that excise auctions for the financial year 1967-68 would be held on March 27,1967. The terms and conditions in regard to the auction of retail vends of country spirits were set out in a pamphlet issued along with the notice. Those terms and conditions did not accord with the rules then prevailing, but were evidently made so as to comply with the requirement of the new rules which were being brought into force. The terms and conditions in regard to the auction of retail vends of country spirits were set out in a pamphlet issued along with the notice. Those terms and conditions did not accord with the rules then prevailing, but were evidently made so as to comply with the requirement of the new rules which were being brought into force. The amended rules issued by the Excise & Taxation Commissioner (Financial Commissioner) were published in the Government Gazette dated March 31, 1967 and came into effect on April 1, 1967. In the auction held on March 27, 1967 for the retail vend known as "Biswan Meel", Sonepat, respondents offered the highest bid for a quota of 62,100 proof litres for which they became liable under condition 14 (iii) of the auction, to pay an amount calculated at the rate of Rs. 17.60 per litre, that is to say, Rs. 10,92,960/-. On the bid being knocked in their favour, respondents deposited a sum of Rs. 45,527.50 being 1/24th of the total amount payable by them, by way of security for the due performance of the terms of the auction, as required by condition No. 15 (1) of the auction and R.36(22A) of the Punjab Liquor Licence Rules, 1956 as amended. They started operating the vend from 1st April, 1967. The successful bidder who is granted licence for retail sale of country liquor is required by condition No. 15 (ii) of the auction read with R.36(23)(2), to pay the licence fee in 22 equal instalments, each instalment being payable before the 10th and 25th of every month, commencing on April 10. On the failure of the respondents to pay the instalments due for the periods ending with April 10 and 25,1967, the Excise and Taxation Officer, Rohtak, gave them notices dated 15th and 25th April, 1967 calling upon them to make good the shortfall of Rs. 33,827.20 and Rs. 5898.80 respectively before April 20 and April 30,1967. Since the respondents did not pay the amount, the Deputy Excise and Taxation Commissioners, Headquarters, Haryana, gave them a notice, why their licence should not be cancelled under S.36(e) of the Punjab Excise Act, for their failure to comply with the terms of the auction in the matter of the payment of the two instalments. Since the respondents did not pay the amount, the Deputy Excise and Taxation Commissioners, Headquarters, Haryana, gave them a notice, why their licence should not be cancelled under S.36(e) of the Punjab Excise Act, for their failure to comply with the terms of the auction in the matter of the payment of the two instalments. By their reply dated May 12,1967, the respondents stated that they were illiterate villagers, that the terms of the auction were not explained to them, that the district of Rohtak was in the grip of a severe drought leading to a fall in the sale of liquor, that April being a summer month, the consumption of liquor was less as compared with the consumption during winter months and that there was, in fact, no default on their part as alleged in the notice sent to them. On May 17,1967, the Collector and Deputy Excise and Taxation Commissioner, Haryana passed an order, after hearing the respondents, cancelling their Licence under S.36(b) and (c) of the Punjab Excise Act with immediate effect and stating that the vend would be resold on May 23,1967 at 10.00 A.M. in the office of the Excise and Taxation Officer, Rohtak, at the risk of the respondents. It is to challenge the cancellation of the licence and the demand for amount due from the respondents that the writ petition was filed. Though the High Court allowed the writ petition and quashed the order cancelling the licence and calling upon them to pay the difference between the amount payable by them under the bid and the amount realised on re-auction of the vend, the Supreme Court reversed the judgment of the High Court except to the extent it related to the two questions mentioned in para 27 of the judgment, which have no bearing on the issue in question in this writ petition. In coming to the conclusion that the writ petition was not maintainable, in Para.19 of the judgment, the Supreme Court said: "The amount which the respondents agreed to pay to the State Government under the terms of the auction is neither a fee properly so-called which would require the existence of a quid pro quo, nor indeed is the amount in the nature of excise duty, which by reason of the constitutional constraints has to be primarily a duty on the production or manufacture of goods produced or manufactured within the country. The respondent cannot, therefore, complain that they are being asked to pay 'excise duty' or 'still-head duty' on quota of liquor not taken, lifted or purchased by them. The respondents agreed to pay a certain sum under the terms of the auction and the Rules only prescribe a convenient mode whereby their liability was spread over the entire year by splitting it up into fortnightly instalments. The rules might as well have provided for payment of a lump sum and the very issuance of the licence could have been made to depend on the payment of such sum. If it could not be argued in that event that the lumpsum payment represented excise duty, it cannot be so argued in the present event merely because the quota for which the respondents gave their bid is required to be multiplied by a certain figure per proof litre and further because the respondents were given the facility of paying the amount by instalments while lifting the quota from time to time. What the respondents agreed to pay was the price of a privilege which the State parted with in their favour. They cannot, therefore, avoid their liability by contending that the payment which they were called upon to make is truly in the nature of excise duty and that no such duty can be imposed on liquor not lifted or purchased by them.". In this case, no attempt is made by the petitioner to wriggle out of the contract. Actually, his action as it was brought originally was, for enforcement of a statutory right commanding the respondents to fulfil their statutory obligations in terms of the Licence, Ext. P-31. Whatever is stated in Jage Ram's case (AIR. 1980 SC. 2018) on the facts of the case, briefly stated above, it is not. Actually, his action as it was brought originally was, for enforcement of a statutory right commanding the respondents to fulfil their statutory obligations in terms of the Licence, Ext. P-31. Whatever is stated in Jage Ram's case (AIR. 1980 SC. 2018) on the facts of the case, briefly stated above, it is not. applicable to the case on hand in the very nature of the pleadings and contentions put forward. 17. Shri Venugopal also raised a plea based on the principles of promissory estoppel. He contended that not only in terms of the provisions contained in sub-rules (1) and (3) of R.8 of the Rules but also because of the promise held out by the Government and the Excise Minister, the petitioner was induced to bid at the auction at a high stake. In particular, it was submitted that Ext. P11 Government order dated 25-2-1981, which while admitting that the supply position of arrack in the State was precarious, also stated that the steps to tide over the situation were being taken. This was prior to the sale notification dated 11-3--1981. There were, however, no bidders on 18-3-1981, on which date the shops in Sultan's Battery and Kalpetta were put up for auction. Ext. P1 is stated to be the report of the Press Statement made by the Excise Minister, Sri. M. K. Krishnan, on the very day, namely, 18-3-1981 emphasising that steps were being taken to ensure that adequate supply of arrack would be available. On the 18th, for want of bidders auction was postponed to 26-3-1981; even on that date, the auction did not take place for want of bidders. Thereafter, on 27-3-1981 the bid took place and was knocked down in favour of the petitioner. 18. Dr. George Mathew, the Additional Advocate General, pointed out that if Ext. P11 really afforded inducement, that should have resulted in the petitioner bidding in the auction on 18-34981 itself because the inducement was already there; the very fact that the bidding did not take place on 18-3-1981, was, according to him, proof positive that it had no effect at all on the petitioner. He also submitted that if Ext. P1 had any effect, that would have resulted in the petitioner bidding at the auction on 26-3-1981, the date to which the auction was postponed on 18-3-1981. He also submitted that if Ext. P1 had any effect, that would have resulted in the petitioner bidding at the auction on 26-3-1981, the date to which the auction was postponed on 18-3-1981. The petitioner has a case that at the time of the auction, on 27-3-1981, the Auctioning Officer, namely, the District Collector and the Assistant Excise Commissioner who were present on the spot, had assured that the successful bidders would be getting sufficient quantity of arrack in excess of the announced monthly quota to meet the local demands. 19. Shri Venugopal submitted that the allegation that the Auctioning Officer (District Collector; and the Assistant Excise Commissioner, who were on the spot, had given such an assurance is not seen to have been properly denied by either of them swearing to an affidavit for that purpose. Of course, the Collector (Auctioning Officer) is not a party to the writ petition; all the same in the nature of the allegations made in the writ petition, an affidavit sworn to by the Collector ought to have been produced in view of the categorical pleading in the writ petition with respect to the assurance stated to have been, given by him, as the Auctioning Officer, at the time of the auction. 20. The decision in C.S. Rowjee v. State of Andhra Pradesh (AIR. 1964 SC. 962) was relied on by Shri Venugopal in this connection. Reliance was also placed by him on the decision in Gujarat State Financial Corporation v. M/s. Lotus Hotels (AIR. 1983 SC. 848), where the Supreme Court took the view that where the Financial Corporation held out a promise to grant certain amount of loan for the starting of a hotel and where there was a failure on the part of the Corporation to advance the full amount, according to the schedule, the Corporation was not entitled to recover the amount they advanced and it was open to the petitioner to challenge the proceedings initiated for recovery under the Revenue Recovery Act. The Court observed, at page 851, in Para.8 of the judgment as follows: "It is too late in the day to contend that the instrumentality of the State which would be 'other authority' under Art.12 of the Constitution can commit breach of a solemn undertaking on which other side has acted and then contended that the party suffering by the breach of contract may sue for damages but cannot compel specific performance of the contract. It was not disputed and in fairness to Mr. Bhatt, it must be said that he did not dispute that the Corporation which is set up under S.3 of the State Financial Corporations Act, 1951 is an instrumentality of the State and would be'other authority' under Art.12 of the Constitution. By its letter of offer dated July 24. 1978 and the subsequent agreement dated February 1,1979, the appellant entered into a solemn agreement in preference of its statutory duty to advance the loan of Rupees 30 lakhs to the respondent. Acting on the solemn undertaking, the respondent proceeded to undertake and execute the project of setting up a 4 Star Hotel at Baroda. The agreement to advance the loan was entered into in performance of the statutory duty cast on the Corporation by the statute under which it was created and set up. On its solemn promise evidenced by the aforementioned two documents, the respondent incurred expenses, suffered liabilities to set up a hotel. Presumably, if the loan was not forthcoming, the respondent may not have undertaken such a huge project. Acting on the promise of the appellant evidenced by documents, the respondent proceeded to suffer further liabilities to implement and execute the project. In the backdrop of this incontrovertible fact situation, the principle of promissory estoppel would come into play. Thus, the principle of promissory estoppel would certain estop the Corporation from backing out of its obligation arising from a solemn promise made by it to the respondent. The respondent acting upon the solemn promise made by the appellant incurred huge expenditure and if the appellant is not held to its promise, the respondent would be put in a very disadvantageous position and, therefore, also the principle of promissory estoppel can be invoked in this case." 21. The respondent acting upon the solemn promise made by the appellant incurred huge expenditure and if the appellant is not held to its promise, the respondent would be put in a very disadvantageous position and, therefore, also the principle of promissory estoppel can be invoked in this case." 21. It was next contended by Sri Venugopal that once the contention of the petitioner that the respondents were under a statutory obligation to permit such quantity of arrack in excess of the notified monthly quota as was necessary to meet the local demand, is accepted, and the Court is satisfied that there was a shortfall or failure on the part of the respondents in fulfilling that obligation, and the attempt of the petitioner to have a writ of mandamus issued to compel the respondents to perform their part of the obligation did not fructify due to the delay in the disposal of the writ petition, the respondents had no legal right to invoke the provisions of S.28 of the Act to recover the balance bid amount by coercive steps under the Revenue Recovery Act, without taking into account the impact on the rights of the Government to recover such amount on account of the failure to fulfil their statutory obligations to the petitioner. It was submitted by Sri Venugopal that it is now settled law that the provisions of the Revenue Recovery Act could not be made use for the recovery of amounts which are in dispute or which have not been properly assessed or quantified. He pointed out that the admitted case was that the supply of arrack in excess of the notified monthly quota to meet the local demand fell far shorter than the real need, and, therefore, without ascertaining or adjudicating upon the exact liability, if any, it was illegal on the part of the respondents to have initiated action under the Revenue Recovery Act. The position, therefore, is that we find on a proper consideration of the contentions raised by the parties, the respondents were under a statutory obligation to permit the issue of such quantity of arrack in excess of the announced monthly quota as was demanded by the petitioner to meet the local requirements; the respondents having failed to fulfil partially, if not fully, that obligation, the respondents are estopped from demanding the payment of the full bid amount, and that they are not entitled to invoke the provisions of the Revenue Recovery Act for realisation of the amounts alleged to be in default, without a proper adjudication or quantification of the actual amount that might be found due to the respondents from the petitioner on account of the alleged default in payment of the kists; and that a writ petition would lie at the instance of the petitioner to prohibit the respondents from proceeding with coercive steps under the Revenue Recovery Act for the recovery of the amount representing the balance of the bid amount. 22. We do not consider it necessary to give directions as to the exact manner in which the liability of the petitioner is to be determined in the light of the admitted facts that supply of arrack was far shorter than what was required for meeting the local requirement during the material time. All the same, we should like to add, one of the methods that could be adopted would be to find out the ratio between the quantum of arrack supplied (in terms of litre) and the bid amount (in terms of rupees) in the previous year, i.e., 1980-81, or that of the average supply of arrack and kist amount for the three years immediately prior to the year in question (1981-82) and treat that ratio as the ratio between the arrack supplied and the kist amount to be paid by the respective petitioners during the year 1981-82. For that matter, any other method which would ensure reasonableness, fair-play and equal justice between the parties could as well be adopted. All that we stress is that it is only after such an assessment or adjudication that the respondents would be entitled to proceed against the respective petitioners to recover the amount by coercive steps under the Revenue Recovery Act. 23. All that we stress is that it is only after such an assessment or adjudication that the respondents would be entitled to proceed against the respective petitioners to recover the amount by coercive steps under the Revenue Recovery Act. 23. Along with this writ petition a large number of other writ petitions invoking the same question of law were heard and, therefore, we have had the advantage of hearing the arguments advanced by the counsel appearing in these petitions besides Sri K.K.Venugopal, the counsel in this petition'who led the argument. Sri Anil Diwan, the counsel for the petitioners in O. P. Nos 916, 919,1057,1335,1991,1992, 2097, 2806, 2818, 3764, 4330, 5814, 6249, 6410, 6421, 6426, 6637, 6797, 6804, 6955 and 8344 of 1981, 1262, 1269, 2319, 2320, and 5260 of 1982 and 1605 of 1983, while adopting the arguments advanced by Sri K. K. Venugopal, laid great emphasis on the aspect of arbitrariness in fixing the quantum of kist amount. He submitted that apart from the f act that on a proper reading of S.18A, 24 and 29 of the Act and sub-rules (1) and (3) of R.8 and other relevant rules of the Rules to which reference had already been made by Sri Venugopal, the claim for the kist amount by the respondents could not be enforced also for the reason that it is vitiated by arbitrariness. He pointed out that the scope of intervention under Art.226 of the Constitution on the grounds of unreasonableness and unfairness has considerably increased with the decisions of the Supreme Court in Royappa's case (AIR. 1974 SC 555), Maneka Gandhi v. Union of India (1978 (1) SCC. 248), Ajay Hasia v. Khalid Mujib (AIR 1981. SC. 497), S. P. Gupta & others v. Union of India (1982 SC. 149). He also referred to the decision of the Supreme Court in M/s. Lotus Hotel's case (AIR 1983 SC. 648); We find considerable force in his reasoning. 24. For the foregoing reasons, we allow the writ petitions; and a writ of prohibition would issue restraining the respondents from recovering by coercive steps the kist amounts alleged to be due from the petitioner until and unless the quantum thereof is properly determined at a reasonable and fair basis, according to law, and in the light of the observations contained in this judgment. Revenue recovery proceedings, if any, initiated shall stand quashed in the light of the above directions and observations. In the circumstances, there will be no order as to costs. Allowed.