Judgment 1. Rule. Mr. Vikas Kumar, Junior Counsel to the Advocate General waives service for the respondents. 2. Looking to the short controversy involved in the writ petition, we propose to dispose of the rule at this stage itself. We proceed accordingly. 3. The brief facts are thus:- For the year 2006-07, a notification was published for settlement of Excise shops in Kishanganj district. The date of settlement was fixed on 23rd March, 2006. In so far as Group ka shops comprising of six country spirit and three spiced country liquor shops in Kishanganj district were concerned, the settlement could not be effected on that date. Consequently, the Collector, Kishanganj issued a second notification on 17th May, 2006 for settlement of Kishanganj Group ka shops. On 5th June, 2006, Group ka shops of Kishanganj district consisting of six country spirit shops and three spiced country spirit shops, the highest of the petitioner at a monthly licence fee of Rs. 8,29,600/- was accepted. The petitioner claims to have deposited advance security amount of Rs. 8,29,594/- on 7th June, 2006 and Rs. 8,29,600/- on 22nd June, 2006. On 30th June, 2006, the Collector, Kishanganj moved the Commissioner of Excise, Bihar, for approval of the settlement. The Excise Commissioner sent his approval on 1st July, 2006 which was received in the office of the Collector, Kishanganj on 5th July, 2006 and on that day, the licence was issued in favour of the petitioner with regard to Kishanganj Group ka shops. 4. The dispute in the writ petition relates to demand of licence fee for the period from 5th June, 2006 to 5th July, 2006 which was made by the Excise Superintendent, Araria-cum-Kishanganj on 27th March, 2007. Upon having received the demand notice, the petitioner made an application before the Excise Superintendent, Araria-cum-Kishanganj on 29th April, 2007 asking him to withdraw the demand as according to the petitioner, he did not utilize the privilege during that period. The petitioner then challenged the demand notice dated 27th March, 2007, by filing a petition before the Excise Commissioner. The Excise Commissioner has rejected the petition vide order dated 18th September, 2008 and, hence, the present writ petition. 5. The petitioner then challenged the demand notice dated 27th March, 2007, by filing a petition before the Excise Commissioner. The Excise Commissioner has rejected the petition vide order dated 18th September, 2008 and, hence, the present writ petition. 5. In exercise of the powers conferred under sub-section (1) and sub-section (3) of Section 89 of the Bihar Excise Act, 1915, the Rules called Bihar Excise (Settlement of Licences for retail sale of country/spiced country liquor) Rules, 2004 (for short, the Rules) have been framed by the State Government. The said Rules have come into force from 1st January, 2005. These Rules are applicable to the grant of licence for exclusive privilege of retail sale of country liquor and spiced country liquor through auction-cum-tender system. 6. After following the procedure of auction, the auctioning authority may either accept the highest bid or tender or any bid or refuse to accept such bid. Once the bid amount is finally accepted, no further negotiation can be entertained by the licencing authority. Rule 16 with regard to acceptance of bid or lender provides thus:- "16. Acceptance of bid or tenders- (1) The Auctioning Authority shall not be bound to accept the highest bid or tender or any bid. If the highest bid or tender is not accepted, the licensing officer shall instantaneously declare the date of fresh auction, mentioning the reasons. In such a circumstances, the entire deposited advance money will be refunded to those applications who do not want to participate in subsequent auction. (2) If the bid amount in any auction is finally accepted, any subsequent offer with regard to that bid shall not be considered. No further negotiation shall be entertained by the Licensing Authority or the officer conducting the auction." 7. Rule 17 provides that licence will be issued after the bid accepted under Rule 16 of the Rules is accepted by the Commissioner. Rule 17 is as follows:- "Final acceptance of bid.- (a) The recommendation to grant exclusive privilege of retail sale for the shop or group of shops to the person bidding highest, and accepted under Rule 16, shall be sent to the Commissioner of Excise by the Licensing Officer, and after his acceptance a licence will be issued. (b) The amount of highest bid, accepted will be the annual amount of licence fee." 8. Rule 19 provides for payment of advance security in the manner provided therein. (b) The amount of highest bid, accepted will be the annual amount of licence fee." 8. Rule 19 provides for payment of advance security in the manner provided therein. Rule 20 provides for the consequences of default in payment of advance security, which reads thus:- "20. Default in Advance security. In case of failure to deposit the amount of advance security, as mentioned in Rule 19, within the prescribed time, the settlement and the licence, if issued, shall stand cancelled and the deposited amount, if any, shall be forfeited to the Government. In such circumstances, a reauction or alternative arrangement shall be made by the Licensing Authority." 9. According to Rule 22, payment of bid money payable by the licensee of the shop or a group of shops for a whole excise year is to be made in twelve equal instalments or as specified in the licence by the licencing authority at the time of issue of the licence. Rule 22 is thus:- "22. Payment of bid money in monthly instalments. (1) Payment of the bid money payable by the licensee of the shop or a group of shops for a whole excise year, shall be made in twelve equal instalments or as specified in the licence by the Licensing Authority at the time of issued of the licence. (2) The Monthly instalment of the bid-money, specified in the licence and determined under the above sub-rule (1), shall be deposited by the Licensee in the Government treasury of that district where the shop or group of shops is situated by 20th day of every month or when the 20th day is a holiday, be next working day. In case of failure to do so, the amount of instalment due shall be adjusted from the security amount paid by the licensee and the licensee shall have to recoup this adjusted amount within the next ten days. (3) Where any licensee fails to deposit the full monthly instalment of licence fee of any month within the prescribed time also fails to recoup the amount adjusted from the security amount under sub-rule (2) within the specified time, his licence shall stand cancelled unless otherwise is ordered by the Licensing Authority and the entire deposited security amount shall be forfeited. Where a licence is cancelled under this Rule, a fresh settlement shall be made through auction-cum-tender system under these Rules." 10. Where a licence is cancelled under this Rule, a fresh settlement shall be made through auction-cum-tender system under these Rules." 10. Rule 24 provides for commencement of the period of licence. It reads thus:- "24. Commencement of the period of licence. A licence issued in favour of any auction-purchaser shall be effective from 1st April of the excise year unless the licensing authority orders otherwise. The auction-purchaser shall be liable to pay the bid money from the first day of the licence period, even if the licence has been issued thereafter: Provided that if any shop or a group of shops is settled in the midst of the an excise year, the licence shall commence from the date of settlement of the shop or the group of shops. The licensing authority shall mention details of the shops/licences to be settled and annual minimum guaranteed quantity to be lifted under those licences and the reserved fee thereof, in the sale notification for every excise year." 11. That group of shops have been settled in favour of the petitioner in the midst of excise year, is not in dispute. lt is also a fact that on 5th June, 2006, the bid made by the petitioner for group ka excise shops of Kishanganj district was highest and accepted by the auctioning authority but such acceptance is subject to approval of the Excise Commissioner. There also does not seem to be any dispute that there was some default on the part of the petitioner in payment of the advance security amount. However, the default seems to have been condoned as despite the said default, his bid dated 5th June, 2006 was not cancelled and licence was issued in Form 26C of the Rules on 5th July, 2006. Rules 16 and 17 of the Rules, when read together, would show that the final acceptance of the bid by the auctioning authority, by itself, does not entitle the bidder to get the license as the said bid has to be accepted by the Commissioner of Excise and only after it is accepted by the Commissioner, then the licence is issued. In the backdrop of the aforesaid legal position, when we turn to the facts of the present case, it would be seen that although highest bid of the petitioner was accepted on 5th June, 2006 but it was only on 30th June, 2006, that the licencing authority recommended to the Commissioner of Excise for approval of settlement and it was approved by the Excise Commissioner, Bihar on 1st July, 2006 and after receipt of the approval from the Excise Commissioner on 5th July, 2006, the licence was issued by the licencing authority on that date. Surely, in the backdrop of the facts that the licence was issued on 5th July, 2006, the petitioner could not have been fastened with the liability to pay licence fee from 5th June, 2006. It is important to bear in mind that until the licence was issued in favour of the petitioner, the State cannot be said to have parted with exclusive privilege of retail sale in favour of the petitioner. 12. Mr. Vikas Kumar, Junior Counsel to the Advocate General would contend that proviso to Rule 24 makes a provision that if any shop or group of shops is/are settled in the midst of excise year, the liability to pay licence fee accrues upon the settlee from the date of settlement. We are afraid, the contention of the junior counsel cannot be accepted. A licensee cannot be fastened with the liability of paying licence fee from a date prior to the date of issuance of licence, particularly in a case where the excise shops are settled in the midst of the year. it is true that proviso appended to Rule 24 provides that if any shop or a group of shops is settled in the midst of the year, the licence shall commence from the date of settlement of the shop or group of shops, in our view, the expression date of settlement is the date when the Excise Commissioner approves the highest bid accepted by the licencing authority. Seen thus, the demand dated 27th March, 2007 for payment of licence fee for the period from 5th June, 2006 to 5th July, 2006 cannot be said to be justified. 13. Seen thus, the demand dated 27th March, 2007 for payment of licence fee for the period from 5th June, 2006 to 5th July, 2006 cannot be said to be justified. 13. In view of the foregoing discussion, the order dated 18th September, 2008 passed by the Commissioner of Excise, Bihar has to be set aside and is set aside and it is declared that the demand of licence fee for the period 5th June, 2006 to 5th July, 2006 from the petitioner is bad in law and cannot be enforced. 14. Rule is made absolute in the aforesaid terms with no order as to costs.