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1998 DIGILAW 989 (MAD)

A. Kenchiah v. State of Tamil Nadu represented by Secretary, Home Department, Chennai

1998-07-27

S.S.SUBRAMANI

body1998
Judgment :- 1. Petitioner seeks issuance of a writ of mandamus, forbearing the respondents from in any manner changing any/or shifting shop No. 101 from Block No. 6 or 7 as notified in the notice of auction on any ground and issue licence for shops only in the blocks as provided for in the notice of auction, pass such further or other orders as this Court may deem fit and proper in the ircumstances of the case. 2. Petitioner is the successful bidder in respect of Shop No. 100 in Block No. 9 of Jegathala Town Panchayat. It is his case that the main consideration of the petitioner to bid for an amount of Rs. 20,07,000/- was for the vending of arrack in and around Jegathala Urban Town Panchayat. The auction in his favour was confirmed and licence was also issued for a period of one year from 1.6.1998 to 31.5.1999. While petitioner was taking steps to commence business another successful bidder, i.e. , 4th respondent herein, in respect of Shop No. 101 in Block No. 6 or 7 in Jegathala Town Panchayat has now applied for a licence from 3rd respondent to open a shop in Block No. 8. or 10. It is the case of the petitioner that such a request for shifting of shop after conclusion of the auction and after confirmation of the sale is contrary to the provisions contained in Tamilnadu Prohibition Act and Retail Vending Rules. If such a request of the 4th respondent is allowed, petitioner will be put to heavy loss in as much as he will lose a large portion of the area in which he alone is entitled to carry on retail vending of the liquor pursuant to successful bidding for shop No. 100. Shop No. 100 is more valuable than Shop No. 101, and even the upset price fixed for shops evidences the same. The upset price for Shop No. 100 is 9 lakhs whereas the upset price for Shop No. 101 is 3 lakhs. Shop No. 100 is more valuable than Shop No. 101, and even the upset price fixed for shops evidences the same. The upset price for Shop No. 100 is 9 lakhs whereas the upset price for Shop No. 101 is 3 lakhs. Petitioner has bit Arrack Shop No. 100 on the expectation that the Authorities will not permit the shifting of shops of other bidders and the petitioner was also induced to believe by the conduct of respondents 1 to 3 that he will be allowed to do business exclusively in the area where Shop No. 100 is located, i.e. , in and around Block No. 9 of Jegathala Village Town Panchayat. When the fourth respondent moved a representation for shifting Shop No. 101 from Block 6 to 7, to Block No. 8 or 10, petitioner wanted the Authorities not to permit change of Block, and he also insisted that the excise Authorities must strictly adhere to the auction notification. Personal appearance was also made before the Authorities. But the petitioner apprehends that the Authorities may permit the fourth respondent to locate his shop in Block No. 8 or 10 and not in Block No. 6 or 7, for which the bid was made. 3. When the writ petition came for admission, I ordered notice of motion, and the learned Additional Government Pleader was also directed to take notice. I directed the petitioner to take private notice to the fourth respondent. Interim injunction was also granted till 31.7.1998. 4. On receipt of notice; the fourth respondent has filed a counter affidavit. According to him, the writ petition is premature and as on date, the petitioner has no cause of action. It is admitted in the counter-affidavit that he has moved the Authorities for shifting the location. No orders have been passed by the Authorities and the same is pending consideration. After confirmation of the bid in his favour, he has set up a shop in Hohahatty Village in Jegathala Town Panchayat. Though the same was certified to be an unobjectionable one under the Rules, and the fourth respondent wanted to start the liquor shop in that building, there was an agitation by the public against the starting of liquor shop in that locahty. Therefore, the fourth respondent was constrained to search for another convenient shop. Though the same was certified to be an unobjectionable one under the Rules, and the fourth respondent wanted to start the liquor shop in that building, there was an agitation by the public against the starting of liquor shop in that locahty. Therefore, the fourth respondent was constrained to search for another convenient shop. When he tried to get a nearby shop also, there had been violent protest from the public and rowdy elements had taken over the shop and it was uprooted and destroyed. Block No. 6 and 7 consist only of residential area, mostly of Muslims and Christians, and there is a temple close by and a Girls School which are beyond the prohibited distance prescribed under the Tamil Nadu Liquor (Retail Vending) Rules. Since the petitioner also objected to the locating of the shop in that area, fourth, respondent thought of shifting from that place, and asked for suitable area, which is farther away from the petitioners shop. His intention is only to do business peacefully within the area where petitioners right will not be affected. Application was made requesting for a shift to some other block. It is stated that even the petitioner has shifted the shop which was taken in his wifes name last year and the practice has been well-recognised. It is further said that when the Revision is pending consideration by the Authorities, petitioner can very well move the authorities and raise objections before them. According to the 4th respondent, without resorting to that remedy, petitioner should not have come to this Court under Article 226 of the Constitution of India. 5. It is further said that the Licensing Authority who has demarcated the area is well within his powers to direct the shifting also, without prejudice to the interest of the petitioner. As a person who has invested huge amount for running a shop, he can also expect a reasonable return from the investments and the Licensing Authority is also bound in law to protect the interest of 4th respondent by issuing necessary direction for suitable location for conducting a shop peacefully. He prays for dismissal of the writ petition. 6. Learned Additional Government Pleader was also heard. 7. Under the Tamil Nadu Liquor (Retail Vending) Rules, 1989, ‘area’ has been defined as the locality determined by the Collector within which a retail vending shop shall be opened. He prays for dismissal of the writ petition. 6. Learned Additional Government Pleader was also heard. 7. Under the Tamil Nadu Liquor (Retail Vending) Rules, 1989, ‘area’ has been defined as the locality determined by the Collector within which a retail vending shop shall be opened. Rule 4 provides for fixation of number of shops. According to the said Rule, the maximum number of shops to be located in the State shall be determined by the Government and the Commissioner, in consultation with the District Collector and after taking into consideration the needs of the District, fix the number of shops for ea ch district. Sub-rule (3) of Rule 4 further provides that the area in which the shops are to be opened can be determined by the Collector. It is after fixing these number of shops in the State and in the District and the areas in which the shops are to be opened, notice of auction is issued. Tenders are invited asking the bidders to submit their tender in regard to the areas. Form No. I, which is statutory in nature provides for conditions of tender. In fact the sale is conducted only in the area for which the bid is made and even at the time of submitting the tender, the intending bidder has to identify the area within which he intends to locate his shop. After depositing the earnest money, under Rule 7, the auction is conducted. Rule 9 provides the procedure for bidding. After the confirmation of the sale, the sale officer issues a letter of confirmation wherein also he has to state the shop in respect of which the bid is confirmed and the area where the shop is to be located. Form V provides for the same. In this connection, it may also be noted that in spite of confirmation by the Sale Officer under Rule 11, the District Collector either suo motu or an appeal or Revision, is entitled to set aside the same and the District Collector is further empowered to reauction the shop. The reauction must also conform to all the earlier proceedings. After sale is confirmed, and if the District Collector is not setting aside the auction and confirms the sale, the successful bidder has to apply for the grant of licence under Rule 13. The reauction must also conform to all the earlier proceedings. After sale is confirmed, and if the District Collector is not setting aside the auction and confirms the sale, the successful bidder has to apply for the grant of licence under Rule 13. In the meanwhile, the successful bidder also will have to locate the shop as provided in Rule 18. A reading of Rules 13 and 18 makes it clear that after the sale is confirmed, it is the exclusive responsibility of the successful bidder to locate the shop. The authorities are not choosing the shop. After locating the shop, it has to satisfy the conditions provided under Rules 13 and 18. It is inspected and the Authorities will certify that its location is suitable or conducting the business. If the successful bidder finds any difficulty in locating a shop, it is not the concern pi either the State or the excise officials to show him any sympathy and find out some other shop for him. Once the bid is confirmed, there is a concluded contract between the Government and the successful bidder. 8. In a sale of liquor vending, all the shops are sold one after the other in the District. Every successful bidder is, therefore, entitled to know the area in which he has is establish his shop and how far he will be in a position to do the business. While choosing the area also, the Excise officials are not giving any preference to one area or the other, and it is for the bidder to choose the area also. Except for the difference in the upset price, all the shops are sold in Public auction. The area is also notified under Rule 4. The purpose of fixation of shops even before auction is that every successful bidder must be in a position to know whether he will be in a position to get a reasonable return for his investment. Rule 17 also prohibits the successful bidder from shifting the shop from that area. He can locate his shop within the area for which he has bid, and even the Authorities are not competent to locate the shop outside the area for which the bid was made. Rule 17 which is statutory in form provides for the same. Rule 17 also prohibits the successful bidder from shifting the shop from that area. He can locate his shop within the area for which he has bid, and even the Authorities are not competent to locate the shop outside the area for which the bid was made. Rule 17 which is statutory in form provides for the same. While fixing the area before the auction, the Government makes a representation to all the bidders that they will act in accordance with notifications and they will not withdraw from the commitment already made which will prejudice a competitor in the business. When a successful bidder chooses the area, he is also expecting that the customers from that locality will be his consumers. Whether profit or loss, Government cannot by itself take any action which will affect the business of another bidder. When the areas are determined by the Collector, any change thereafter in the location of shops beyond that area is an act detriment to another successful bidder, and the Authorities under the Act cannot withdraw from the representation. It must also be understood that while fixing the area and issuing licence for a particular area, the Excise Authorities are discharged from statutory functions. They will have to obey the Act and Rules strictly, and they cannot deviate on any ground, either on the ground of hardship to a bidder or on the ground of sympathy towards him. 9. I had occasion to consider a similar matter in W.P. No. 8308 of 1998 ( R. Madhavan v. State of Tamil Nadu rep. by Secretary, Home, Fort St. George, Chennai-9 and others - Order dated 14.7.1998) wherein I have considered the scope of excise contract. Following the decision reported in (1994) 4 SCC 104 ( Assistant Excise Commissioner and others v. Issac Peter and others ), I said that there is no question of sympathy on the ground of hardship in such cases, and, merely because the Government happens to be one of the parties, it does not change the nature of relationship between the parties. The successful bidder participated in the auction without any compulsion, and it is voluntary in nature. The successful bidder participated in the auction without any compulsion, and it is voluntary in nature. If the successful bidder ultimately is not in a position to locate a shop, the Excise Authorities are not expected to either find a suitable shop for him, or for that purpose change the location of the area to his convenience. It is the lookout of the bidder alone and he takes the risk. Any indulgence shown on the ground of sympathy will prejudice another successful bidder who has also acted on the representation of the State. 10. In view of this position, let us consider how far the fourth respondent is entitled to locate his shop in any other area. The licence was granted for the period from 1.6,1998 to 31.5.1999. The case of the fourth respondent is that even though he located the shop within that area, there was agitation by public and he was not in a position to open the shop. He, therefore, requested the third respondent to locate a shop in another area or block. Such application was filed on 1.6.1998 itself. Why I am stre ssing on the date is that before 1.6.1998, he cannot do any business. When, even on 1.6.1998, he has given such a representation, it cannot be said that he made earnest attempts to locate a shop where he can do business peacefully. Even though he has made mention of various reasons, the last portion of his request reads thus:— This fact is also admitted in paragraph 5 of his counter affidavit, wherein it is stated thus:— “I applied to the third respondent licensing authority by my application dated 1.6.1998 requesting for a shift from Blocks 6 and 7 to some other block“ This, according to me, is something which is prohibited by the Statute and the Liquor Vending Rules. The fourth respondent is not entitled to any business outside me area of Block Nos. 6 and 7. Whether he conducts business or not, or whether he gets profits or loss, that must be on the business conducted in that block. Since he has voluntarily participated in the auction, it is his lookout to get a convenient building to do business in that area. 6 and 7. Whether he conducts business or not, or whether he gets profits or loss, that must be on the business conducted in that block. Since he has voluntarily participated in the auction, it is his lookout to get a convenient building to do business in that area. Merely because there is agitation by public against locating a shop or it is purely a residential area, etc., that may not be a reason to give him some other area after the sale is confirmed and licence has been issued to other persons. The fact that it is residential area was brought to the notice of the fourth respondent even at the time when he choose the area to bid at the auction. 11. No other point was raised before me. 12. In the result, there will be a direction to respondents 1 to 3 to issue licence to the fourth respondent to conduct business only in Block No. 101, which is situated in Block Nos. 6 or 7, and the Authorities are prohibited from giving licence beyond that area. The fourth respondent is also directed to do business only in Block No. 6 or 7, and he has to locate his Shop No. 101 within that area, and not beyond the same. The writ petition is disposed of as indicated above. No costs. W.M.P. No. 11901 of 1998 for injunction is dismissed as unnecessary.