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2005 DIGILAW 3232 (RAJ)

Bhimsen Garg v. State of Raj.

2005-12-06

R.S.CHAUHAN, V.K.BALI

body2005
Honble BALI, J.—Bhimsen Garg through present civil special appeal filed by him, calls in question order dated 3.8.1990 passed by a learned Single Judge of this Court in S.B. Civil Writ Petition No.3373/1988 as also order dated 19.10.1994, also passed by the learned Single Judge of this Court in S.B. Civil Review Petition No.70/1990 in S.B. Civil Writ Petition No.3373/1988. (2). Brief facts in so far as the same are relevant for disposing of the present special appeal reveal than the appellant filed S.B. Civil Writ Petition No.3373/1988 wherein he sought the following reliefs:- (i) issue an appropriate writ, direction or order in the nature of certiorari to quash the notice Annexure 5, attachment and auction notice dated 1.10.1988 Annexure-5C on the grounds mentioned in the writ petition: (ii) issue an appropriate writ, direction or order declaring Annexure-5, attachment and auction notice dated 1.10.1988 Annexure-5C as wholly illegal being in violation of the principles of natural justice. (iii) The respondents No.l to 3 may be directed to take steps for the recovery of the amount found to be due after all permissible adjustment as per Schedule A not only from the petitioner but by apportionment corresponding to the percentage of the share from respondents No.4 to 17 out of the properties for which the solvency certificate has been given in case any particular party is not prepared to deposit the amount of his share in cash and all properties of the petitioner which have been attached and notified for auction may be directed to be released forthwith by taking the due amount of 8% from the petitioner out of the net amount found to be due after making all permissible adjustments as per Schedule A. (3). For the reliefs as mentioned above, it was inter alia pleaded that the petitioner along with fourteen other persons, arrayed as respondents, was partner of the firm known as Vimal Kumar and Party. The formed a group and submitted tender for securing exclusive monopoly for the sale of Indian Made Foreign Liquor (I.M.F.L.) and Deshi Madira (Indigenous Liquor) in the excise circles of Suratgarh, Raisinghnagar and Padampur of Sri Ganganagar District and applied to the Excise Department by submitting a tender in the name of Vimal Kumar and Party for the year 1987 and 1988-89. Their tender was accepted by the Excise Department. Their tender was accepted by the Excise Department. After acceptance of their tender, the petitioner and group of fourteen persons executed a partnership deed in the name of M/s. Bhimsen and Party, Raisinghnagar and filed the same in the office of District Excise Officer, Sri Ganganagar. The partnership deed would show that the petitioner had only 8% share in the business of exclusive monopoly for sale of IMFL and indigenous liquor. Individual shares of all the partners have been detailed in Para 4 of the petition. District Excise officer issued licence to the petitioner and his group for the period from 1.4.1987 to 31.3.1989 in the name and style of M/s. Vimal Kumar Bhimsen and Party for IMFL and as regards indigenous liquor in the name and style of Bhimsen and Party. The petitioners firm was required to deposit 12-1/2 percent of the total amount of tender as security money. The petitioner firm accordingly deposited an amount of Rs. 63,09,833/- in the department. Other conditions, reference whereof has been given Para 6(a) in the case of the petitioner, were also complied. State Government cancelled the petitioners exclusive monopoly licence for sale of IMFL and indigenous liquor in the excise circle of Sri Ganganagar and Raisinghnagar w.e.f. 13.8.1988 and re-auctioned the exclusive monopoly for the above excise circles to other persons. After cancellation of the petitioners licence, the State Government issued a notice to the petitioner and his partners under Section 129 of the Rajasthan Land Revenue Act, 1956 for recovery of Rs.67,64,490.76. The sum, it was stated, was towards excise duty amount due for fulfilling the guarantee. The notice called upon the petitioner to deposit the amount in the office of the District Excise Officer on 29.9.1988. Notice for recovery of the amount mentioned above was given to each of the fifteen partners and each of 21 guarantors. On 8.9.1988, five partners i.e. Respondent Nos.4 to 8 obtained an ex parte ad interim order of status quo against the aforesaid notice from the Court of Additional District Judge Raisinghnagar preventing attachment of their properties mortgaged worth Rs.25,10,000/-. On 9.9.1988, the mortgaged properties of other eight partners i.e. Respondents No.10 to 17 worth Rs.30,70,000/- and personal back account of Respondent No.12 having Rs.60,000/- were attached. On 30.9.1988, properties of the petitioner mentioned in later part of Para 8(a) were attached. On 9.9.1988, the mortgaged properties of other eight partners i.e. Respondents No.10 to 17 worth Rs.30,70,000/- and personal back account of Respondent No.12 having Rs.60,000/- were attached. On 30.9.1988, properties of the petitioner mentioned in later part of Para 8(a) were attached. Auction notice was then issued on 1.1.1988 which was served upon the petitioner on 6.10.1988 according to which properties were to be put to auction on 21/22.10.1988. The petitioner is stated to have furnished bank guarantee of Rs.28 lacs as directed by the Supreme Court in SLP (Civil) No.12491/1988 dated 14,10.1998 filed by the petitioner against interim orders of this Court dated 7.10.1988. It was then pleaded that the petitioners property situated in 20, Transport Nagar, could not be subjected to auction. Auction notices with regard to the properties of eight partners was issued on 10.10.1988 but their properties were attached on 9.9.1988. In their case, date of auction notice (Annexure-5C) were challenged on various grounds detailed in the writ petition and in the ultimate analysis, prayer was made to grant reliefs, as enumerated above. (4). This writ petition appears to have been disposed of by order dated 3.8.1990. The short order passed by the learned Single Judge disposing of the petition reads as follows:- "The present writ petition was filed by the petitioner seeking to quash the attachment orders and the auction notices issued by the State Government, for recovery of amount due from the petitioner as well as Respondent Nos. 4 to 17, who were licensees of the Excise contract. The matter had gone upto the Supreme Court and the Honble Supreme Court while disposing of the special leave petition had given some directions and on 16.11.1989 had ordered that "the subsisting attachment of the properties of the defaulters shall continue". Thereafter, this Court on an application by the petitioner and the Respondent Nos. 4 to 8 had passed a detailed order in terms of the directions of the Supreme court and that has been complied with. It is not necessary to go into the merits of the writ petition. It will be open for the parties to agitate these points before the appropriate forum, if necessary. 4 to 8 had passed a detailed order in terms of the directions of the Supreme court and that has been complied with. It is not necessary to go into the merits of the writ petition. It will be open for the parties to agitate these points before the appropriate forum, if necessary. It will be open to the State Government to recover the balance amount, if any, from the persons other than petitioner bhimsen and Respondent No.4 to 8 namely Shri Vimal Kumar Chadha, Smt. Pushpa Rani, Hansraj Chawla, Kashmiri Lal and Pawan Kumar Chawla. The writ petition stands disposed of accordingly. Parties are left to bear their own costs." (5). The order reproduced above was sought to be set aside in review filed by both, the State Government and appellant. In so far as the application for review filed by the State is concerned, the same was dismissed but application for review filed by the appellant that under the contract, the amount could be realised from any of the co-licensees whereas in the order dated 3.8.1990 it was observed that it will be open to be State Government to recover the balance amount, if any, from persons other than petitioner Bhimsen and Respondent Nos. 4 to 8 namely Vimal Kumar Chadha, Smt. Pushpa Rani, Hansraj chawla, Kashmiri Lal and Pawan Kumar Chawla, learned Single Judge after making a mention of the observations made by the Honble Supreme Court in SLP No.4680/99 decided on 16.11.1989 held that it was clear from the said observations that liability of the co-licensee under the contract was joint and several and, therefore, observations made in the order dated 3.8.1990 that it will be open to the State Government to recover balance amount, if any, from the persons other than petitioner Bhimsen and Respondent Nos. 4 to 8 namely Shri Vimal Kumar Chadha, Smt. Pushpa Rani, Hansraj Chawla, Kashmiri Lal and Pawan Kumar Chawla, shall be deleted. Learned Single Judge further directed that it will be open to the State Government to recover the balance amount in accordance with law from the licensees. It is to the extent as mentioned above that the review petition filed by the k was allowed. Learned Single Judge further directed that it will be open to the State Government to recover the balance amount in accordance with law from the licensees. It is to the extent as mentioned above that the review petition filed by the k was allowed. The contention raised jointly by the learned counsel appearing for the parties that matter has not been decided on merits while disposing of the writ petition vide orders dated 3.8.1990 was repelled by observing that since there was already an observation in the order dated 3.8.1990 it Was not necessary to go into the merits of the case. (6). Learned counsel appearing for the appellant vehemently contends that while disposing of the petition vide orders dated 3.8.1990, learned Single Judge did not take into consideration that the order passed by the Honble Supreme Court was interim clearly making mention therein that the arrangement so made was to lasl till such time the writ petition was disposed of on merits and not on the basis of interim arrangement ordered by the Honble Supreme Court. (7). With a view to appreciate contention of the learned counsel, it will be relevant to reproduce observations made by the Honble Supreme Court in its order dated 16.11.1989. Before, however, we may do that, we may mention that special leave to appeal was filed by Raj Kumar and others, which was against the order dated 21.8.1989 passed by this Court in S.B. civil Misc. Appeal No.196/1988. But that order, High Court reversed the interlocutory order dated 27.10.1988 made by the learned Additional District Judge, Raisinghnagar in Civil Case No.55/1988 filed by Raj Kumar and others, the State Government had initiated recovery proceedings against the appellant Raj Kumar and others by sale of immovable properties. The recovery was with regard to the amount due in respect of liquor contract entered into by an association of persons carrying on business as excise contractors under the name and style Bhim Sen and Party. High Court had vacated the stay granted by the learned trial Judge and it is against this order that the appeal was filed before the Supreme Court. High Court had vacated the stay granted by the learned trial Judge and it is against this order that the appeal was filed before the Supreme Court. While considering facts of the case, Honble Supreme Court also noted that the present appellant had filed a writ petition in this court in which interlocutory order dated 7.10.1988 was passed staying, on terms, the auction of the properties belonging to the aid respondent i.e. appellant herein. High Court, on its own calculations, had taken the view that amount of Rs.24,70,471.76 plus interest should be paid as a condition precedent for granting of stay. Against that order, appellant (Respondent No.3 before the Supreme court) came up in appeal before the Supreme Court being C.A. No.3960/1989 in which on 15.9.1989 the following order was passed:- Special Leave is granted. The High Court in the impugned order directed the appellant to pay a sum of Rs.24.70 lakhs, plus interest to the State as a condition for postponing the auction of the attached property in question. We modify the order and direct the appellant to deposit the aforesaid amount in Court, which will not be withdrawn by the State during the pendency of the writ petition in the High Court. We also allow one months time to the appellant to make the deposit in the High Court. The Registrar of the High Court may invest the deposited amount in interest bearing short deposit with any nationalised bank. On the aforesaid amount being deposited by the appellant the Bank Guarantee which has been furnished by him in pursuance of this Courts order, shall stand discharged." (8). Supreme Court then made a mention of facts of the appeal in hand filed by Raj Kumar and others. While referring to the impugned order passed by the High Court, it was observed that the said Court rejected the appellants claim in view of the circumstance that another partner of the firm namely Bhimsen and Party (appellant herein) had deposited the entire sum and that compliance by one of the co-licensees would ensure to the benefit of the other co-licensees and that, therefore, independent proceedings to recover the same dues by recourse to the sale of properties of the appellant was not justified. Supreme Court then noted that effect of the order dated 21.8.1989 was that notwithstanding the pendency of their suit, the State was free to proceed against the appellants properties for the recovery of sum due. It is in the context of the facts as mentioned above that it was observed that payment by Bhimsen did not constitute extinguishment by discharge of the liability. The liability of the licensees, being joint and several, the deposit by itself could not be held to ensure to the benefit of the appellants also, entitling them to contend that the State, ought not to proceed against their properties also. Supreme Court then noted contention of the learned counsel for the appellant that as was done by the High Court in the writ petition of Bhimsen Garg, an order of stay of sale of appellants properties also be made on similar terms. Supreme Court accepted the contention as aforesaid. The observations of the Supreme Court in so far as the same are relevant are as under:- "Having regard to all the circumstances relevant to the interlocutory stage and as a tentative estimate, without prejudice to the claims, rights and contentions of all the parties and subject further to final accounting, the liability of Bhim Sen & Party in favour of the State could be estimated at about Rs.36 lakhs. This, we make it clear, is a purely tentative estimate. The State claims that it is entitled to recover Rs.50 lakhs or there abouts. At this stage if the appellants deposit, within four weeks, from today, a sum of Rs.18 lakhs in the High Court, in D.B. Civil Writ No.3373/1988, the State shall not proceed against the properties of the appellants also for recovery of the dues. Out of the sum of Rupees Forty Six lakhs and Fifty Thousand comprising of Rupees Twenty-eight Lakhs and fifty thousand already deposited by Respondent No.3 and rupees Eighteen lakhs to be deposited by appellants in pursuance of this order a sum of Rs.36 lakhs shall be paid over to the State on account, without prejudice to all its rights and contentions. The balance of Rs. 10,50,000/- (Rupees Ten lakhs and fifty thousand) be refunded to the respondent No.3, Sri Bhim Sen Garg, within one week of the appellants depositing the sum of Rs. 18 lakhs. The resultant position is that, by way of an interlocutory arrangement, out of Rs. The balance of Rs. 10,50,000/- (Rupees Ten lakhs and fifty thousand) be refunded to the respondent No.3, Sri Bhim Sen Garg, within one week of the appellants depositing the sum of Rs. 18 lakhs. The resultant position is that, by way of an interlocutory arrangement, out of Rs. 36 lakhs tentatively estimated as the liability of Bhim Sen Garg & Party, a sum of Rs. 18 lakhs each would have been contributed by the appellants on the one hand and Sri Bhim Sen Gag on the other. 7. If respondent No.3 succeeds in the writ petition, then the High Court will take into account the deposit of Rs. 18 lakhs contributed by respondent No.3 and having regard to the nature of the relief that High Court may grant in the writ petition issue appropriate directions. In the event respondent No.3 is held entitled to the reimbursement of Rs. 18 lakhs or any part thereof, it will be open to the High Court to direct the State to repay the same with interest at 15% per annum calculated from the date of payment of Rs.36 lakhs to the State. If any refund is so ordered by the High Court, it shall direct the refund to be made within one month of the date of disposal of the writ petition. 8. Similarly, the High Court will issue appropriate directions at the State of the final disposal of the writ petition in the case of the appellants also who are stated to be parties to the writ petition. For this purpose the deposit by appellants shall be treated as if made pursuant to directions in the writ petition of Bhim Sen Garg. Whether, in the case of either of both the parties, any such directions for refund are at all necessary or justified would depend upon the nature of relief, if any, the High Court might think fit to grant at the stage of final disposal of the writ petition. 9. However, if the appellants fail to make the deposit of Rs.18 lakhs as directed, the consequential directions in that behalf become infructuous and it will be unnecessary for the High Court to examine and implement the consequential directions which are dependent on and flow from the deposit by appellants as envisaged in this order. 10. 9. However, if the appellants fail to make the deposit of Rs.18 lakhs as directed, the consequential directions in that behalf become infructuous and it will be unnecessary for the High Court to examine and implement the consequential directions which are dependent on and flow from the deposit by appellants as envisaged in this order. 10. This order disposes of the interlocutory wrangles between the parties, both in the suit and in the writ petition. Nothing that we have said shall affect the merits of the said proceedings. This order would not also affect the right of the State to proceed against the order co-licensees." (9). A reading of the observations/directions as extracted above and in particular those which have been underlined would clearly suggest that it was only an interim arrangement to last till pendency of the suit filed by Raj Kumar and others/writ petition filed by the appellant. By no means, interlocutory directions which were to last only till pendency of the lis, could be taken to be final Writ petition, in our considered view could not be disposed of on the basis of these interim directions and that it what precisely has been done by order dated 3.8.1990 passed by the learned Single Judge of this Court. This order was sought to be reviewed and despite mentioning joint contentions raised by the learned counsel appearing for the parties that the writ petition had to be disposed of finally on merits, the review application was dismissed. It has been, indeed, mentioned while rejecting the contention aforesaid that there was already observation in the order dated 3.8.1990 but what observation had been made in the order dated 3.8.1990 that might pertain to decision of controversy on merits has not been shown to us nor we find the same in the said order. (10). In view of the discussion made above, the appeal is allowed, order dated 3.8.1990 passed in S.B.C.W.P. 3373/1988 Bhim Sen Garg vs. The State of Rajasthan, and order dated 19.10.1994 passed in S.B. Civil Revision Petition No.70/1990 are set aside and the case is remitted to the learned Single Judge for deciding the controversy on merits. Parties are, however, left to bear their own costs.