JUDGMENT : Ajay Mohan Goel, J. 1. By way of present writ petition, the petitioner has prayed for the following reliefs: “(i) Issue a writ of mandamus directing the respondent-authorities to grant license to the petitioner with respect to Unit No. 98 Gumma in which the petitioner succeeded so that selling of liquor may be started without any further delay. (ii) That the selling of liquor from the vends is to be started from 1st April, 2018 and as such, the respondent-authorities may kindly be directed not to impose any penalty/recover any amount for the period for which sale could not be undertaken by the petitioner and further the loss incurred by the petitioner on day to day basis may kindly be ordered to be recovered/adjusted from the private respondents. (iii) That issue a writ of mandamus directing the respondent-authorities to place on record the allotment letter issued in favour of the private respondent with respect to the liquor vend at Gumma. (iv) That issue a writ of certiorari to quash the allotment letter issued in favour of the private respondent with respect to the liquor vend at Gumma. (v) Call for the records pertaining to the case at hand. (vi) Direct the respondent authorities to pay the cost of the petition. (vii) Such other order, which this Hon’ble Court deems fit and proper, may also be passed in favour of the petitioner, in the interest of justice and fair play.” 2. Facts necessary for the adjudication of this petition are as under: Government of Himachal Pradesh has come out with “Announcements For The Allotment Of Retail Excise Vends By Draw Of Lots For The Year 201819”. The process of allotment of Liquor Units in the State of Himachal Pradesh for the year 2018-19 was initiated as per said Announcements. Petitioner applied for allotment of liquor vend in Gumma, District Shimla, H.P. amongst others in the name of Gulshan Chauhan Rajinder Singh & Company on 15th March, 2018. Draw of lots was held on the same day. Petitioner was highest bidder for Unit No. 98. He was asked by the respondent-authorities to deposit 5% of the total value of the bid amount of Rs.1,68,52,690/-. Petitioner deposited 5% of the same, i.e., Rs.8,50,000/- vide receipt/DD No. 949515. This was done on 16th March, 2018. 3.
Draw of lots was held on the same day. Petitioner was highest bidder for Unit No. 98. He was asked by the respondent-authorities to deposit 5% of the total value of the bid amount of Rs.1,68,52,690/-. Petitioner deposited 5% of the same, i.e., Rs.8,50,000/- vide receipt/DD No. 949515. This was done on 16th March, 2018. 3. Thereafter, as per the petitioner, he made arrangements to provide for a liquor vend by hiring premises on rent, for which he invested huge amount. This was followed by issuance of a public notice dated 22.03.2018 by the respondent-authorities, which pertained to un-allotted vends. This was followed by issuance of Annexure P4 dated 26.03.2018, vide which, respondent-authorities announced a schedule for allotment of un-allotted vends. The date fixed for this purpose was 27th March, 2017 and the same was to be done at 3:00 p.m. in the office of Additional Excise and Taxation Commissioner (South Zone), Shimla. This was followed by issuance of another public notice (Annexure P5) by the respondents-authorities on 29.03.2018, in which it was categorically mentioned that the said notice pertained to left over excise vends, which were now to be allotted by way of negotiations. 4. Further as per the petitioner, on 29th March, 2018, respondent-authorities contacted him telephonically and informed him that negotiations with regard to unsold liquor vends were to take place on 30th March, 2018 and that the petitioner could also participate in the same. Accordingly, petitioner attended the negotiations, which were so held on 30th March, 2018. The private respondent at the time of negotiations, in breach of laid down norms, made a bid, wherein he of his own, collectively put forth a bid for both sold and unsold liquor vends. The offer, which was so made by the private respondent, included Gumma liquor vend, qua which the petitioner was the highest bidder. According to the petitioner, the said collective bid was made by the private respondent of his own and there was no provision for making any such bid in the ‘Announcements’ Annexure P1. According to the petitioner, in these circumstances, he also agreed to take unsold liquor vends at Jubbal and Kuthera and made a communication in this regard to the respondents-authorities on 31.03.2018. As per the petitioner, respondents-authorities coerced him to take all seven Units for which bid stood made by the private respondent.
According to the petitioner, in these circumstances, he also agreed to take unsold liquor vends at Jubbal and Kuthera and made a communication in this regard to the respondents-authorities on 31.03.2018. As per the petitioner, respondents-authorities coerced him to take all seven Units for which bid stood made by the private respondent. According to the petitioner, respondents-authorities could auction the liquor vends in consonance with any of the methods prescribed in Clause 1.2 of the Announcements. 5. The grievance which thus stood raised by the petitioner in the petition was that the act of the private respondent of offering a bid by including the “already sold vends” and the act of the respondents-authorities accepting such an illegal offer of the private respondent was per se bad in law and also in violation of the ‘Announcements’ so made by the respondent-State. 6. The stand of the respondents-authorities in the reply so filed on the affidavit of the Excise and Taxation Commissioner, Government of Himachal Pradesh was that though Unit No. 98, i.e., Gumma, District Simla was allotted to the petitioner for a total value of Rs.1,68,52,690/-, however, in the said District, Summer Kot, Kuthara, Jubbal, Chailla and Sainj, Khara Pathar and Deori Ghat Units remained unallotted. Further as per the respondents-authorities, it had become impossible to allot these unsold Units and revenue loss to the State exchequer appeared inevitable. Under these circumstances, after taking into consideration the factors of viability of each pending Unit and possibility of their allotment in combination with other Units, process of negotiation was resorted and Unit No. 98, i.e., Gumma was clubbed with un-allotted Units as also Unit No. 71, i.e., BatarGallu. Further as per the respondents-authorities, original value of these Units was Rs. 13,08,07,918/- and after clubbing the above mentioned Units, the total value of clubbed Units was Rs. 14,76,60,608/- and the private respondent offered a bid of Rs. 10,91,25,073/- in the process of negotiation and it is in this background that all Units stood allotted to respondent No. 4. According to the State, this entire exercise was undertaken to prevent any loss of revenue to the exchequer and in fact the allotment which had been made in favour of the petitioner was not yet confirmed.
10,91,25,073/- in the process of negotiation and it is in this background that all Units stood allotted to respondent No. 4. According to the State, this entire exercise was undertaken to prevent any loss of revenue to the exchequer and in fact the allotment which had been made in favour of the petitioner was not yet confirmed. Further, the stand of the State was that mode of negotiation to allot/sell the vends/Units was required to be resorted exclusively by the Financial Commissioner in the revenue interest of the State, which Financial Commissioner was legally authorized and competent. On these basis, respondent-State justified its action. 7. In its reply filed by respondent No. 4, besides defending the act of the respondent-State, it also assailed the locus of the petitioner in maintaining the writ petition, on the ground that the petitioner had participated in the process of allotment of unsold liquor vend in issue even during the stage of negotiations, allotment made pursuant to which stood assailed by way of present petition. 8. We have heard the learned counsel for the parties, as also learned Advocate General. We have also gone through the entire contemporaneous record, which has been so produced before the Court by the State from time to time. 9. Before proceeding any further, it is relevant to take note of the “Announcements”, which have been so made by the Excise and Taxation Department for allotment of retail vends of country liquor, foreign liquor and country fermented liquor in Himachal Pradesh for the financial year 2018-2019. A copy of the “Announcements” is appended with the petition as Annexure P1. We will refer to few relevant Clauses of the said “Announcements”, which in our considered view, are relevant for the purposes of adjudication of this petition. The Introductory Chapter of the said “Announcements” contains that liquor licences shall be granted subject to the provisions of the Himachal Pradesh Excise Act, 2011 and the Rules framed thereunder. 10.
We will refer to few relevant Clauses of the said “Announcements”, which in our considered view, are relevant for the purposes of adjudication of this petition. The Introductory Chapter of the said “Announcements” contains that liquor licences shall be granted subject to the provisions of the Himachal Pradesh Excise Act, 2011 and the Rules framed thereunder. 10. Clause 1.2 of the said Chapter provides as under: “1.2 The Excise and Taxation Commissioner-cum-Financial -Financial Commissioner (Excise), Himachal Pradesh, reserves the right to sell all or any of the licenses by allotment or by auction or by private contract or by calling tenders or by negotiations or by draw of lots or by renewal or by any other arrangement (including combination of the foregoing modes), which he may consider expedient in the interest of revenue. For this purpose, the mode of grant of these licenses may be changed by the Excise and Taxation Commissioner, whenever necessary before the actual grant of the license. The excise & Taxation Commissioner may also modify the procedure contained in these terms and conditions to give effect to such mode of grant of license after determining Registration fee, Excise duties or any other levy, in such manner as he may deem fit.” 11. Clause 1.3 of the said Chapter provides that all the allotments of the vends/units or renewal of licences of the vends/units shall be subject to the confirmation by the Excise & Taxation Commissioner-cum-Financial -Financial Commissioner (Excise), Himachal Pradesh, who reserves the right to reject any allotment/renewal without assigning any reason for doing so. For ready reference, said Clause is also being quoted herein under: “1.3 All the allotments of the vends/units or renewal of licences of the vends/units shall be subject to the confirmation by the Excise & Taxation Commissioner-cum-Financial -Financial Commissioner (Excise), Himachal Pradesh, who reserves the right to reject any allotment/renewal without assigning any reason for doing so.” 12. Chapter-II of the said Announcements deals with the provisions of the procedure for allotment on application and by draw of lots. Clause 2.19 of the same provides as under: “In case there is no applicant for a particular vend/unit, the Collector (Excise) shall take necessary steps for the resettlement of such vend/unit. Firstly, the applicants present shall be informed of all those vend in respect of which no application has been received.
Clause 2.19 of the same provides as under: “In case there is no applicant for a particular vend/unit, the Collector (Excise) shall take necessary steps for the resettlement of such vend/unit. Firstly, the applicants present shall be informed of all those vend in respect of which no application has been received. The Collector (Excise) shall invite offers from all the present applicants for such vends on the prescribed application form and on receipt of the same, the process of allotment in respect of these vends shall be resorted to as per the procedure. In case there still remain some vends in respect of which no application is received, the Excise and Taxation Commissioner-cum-Financial -Financial Commissioner (Excise) shall decide the mode or manner of allotting such vends/units as per Para 1.2.” (Emphasis supplied) 13. Clause 2.27 of the same provides as under: “2.27 If the confirmation from the Excise & taxation Commissioner-cum-Financial -Financial Commissioner (Excise) is not received by 31st March, the Collector (Excise) may assume that the Financial Commissioner (Excise) has accorded confirmation for allotment. (Emphasis supplied) 14. Clause 2.40 of the same provides as under: “2.40 The complete process of draw of lots shall be video-graphed.” 15. Coming to the facts of the present case, it is not in dispute that petitioner was the highest bidder qua liquor vend Unit No. 98 at Gumma and in lieu of his having been found as such, the said petitioner had deposited the requisite amount, i.e., 5% of the bid amount on 16th March, 2018. There is on record as Annexure P4 a public notice which was issued by the Excise & Taxation Commissioner, Government of Himachal Pradesh, vide which, said authority invited applications for allotment of left over retail units/vend of country liquor as also foreign liquor for the year 2018-2019 in the State of Himachal Pradesh. The date and time of allotment of vend/draw of lots as per Annexure P4 was 27.03.2018 at 3:00 p.m. at the venue which so stood mentioned in the Public Notice. 16.
The date and time of allotment of vend/draw of lots as per Annexure P4 was 27.03.2018 at 3:00 p.m. at the venue which so stood mentioned in the Public Notice. 16. There is also on record another Public Notice Annexure P5, again issued by the Excise and Taxation Commissioner dated 29.03.2018 under the following heading: “NOTICE FOR THE NEGOTIATION OF LEFT OVER EXCISE VENDS OF COUNTRY LIQUOR (L14/L14A) AND FOREIGN LIQUOR (L2) FOR THE YEAR 201819 IN THE STATE OF HIMACHAL PRADESH” It was mentioned in the said Public Notice that in continuation of Public Notice dated 26.03.2018 (Annexure P-4), it is further notified for the information of general public that remaining liquor licences in form L2, L14 and L14A in the Districts so mentioned in the Public Notice shall be allotted by the mode of negotiation as per schedule prescribed in the said Public Notice for the year 2018-2019. Further perusal of the Public Notice demonstrates that for the purposes of Shimla District, negotiations were to be held on 30.03.2018 at 11:30 a.m. in the office of Excise and Taxation Commissioner, Block No. 30 SDA Complex Kasumpti, Shimla, Himachal Pradesh. 17. It is a matter of record that when said negotiations took place on 30.03.2018, petitioner was not only present, but he also participated in the course of negotiation. 18. The proceedings of the meeting which was held on 30.03.2018 are on record along with the reply filed by respondent No. 4 as Annexure R4/E. The same are being reproduced herein under for ready reference: “PROCEEDINGS OF ALLOTMENT OF UN-ALLOTTED EXCISE UNITS THROUGH NEGOTIATION IN RESPECT OF DISTRICT SHIMLA HELD ON 30.03.2018” In pursuance to the Public Notice number 7765/2017EXN1037710407 dated 20.03.2018 of the Excise and Taxation Commissioner, Himachal Pradesh, Shimla, process of negotiation of allotment of un-allotted excise units in respect of District Shimla Himachal Pradesh was undertaken on 30.03.2018 by the Committee in the office of the Excise and Taxation Commissioner, Himachal Pradesh which was headed by the Excise and Taxation Commissioner, Himachal Pradesh. The Negotiation process of 25 units remaining unsold after 1st, 2nd, 3rd and 4th rounds of the allotment was started at around 5.30 p.m. The AETC, Shimla read out the details of the left-out units. These units are shown in the Annexure-A (Colum 3). Initially 83 bids were received for 19 single units.
The Negotiation process of 25 units remaining unsold after 1st, 2nd, 3rd and 4th rounds of the allotment was started at around 5.30 p.m. The AETC, Shimla read out the details of the left-out units. These units are shown in the Annexure-A (Colum 3). Initially 83 bids were received for 19 single units. Thereafter clubbing of un-allotted units was done with certain allotted units the detail of which is annexed at Annexure B. Proposals were invited and the same were recorded as per details given in Annexure B.31 bids were received for 14 clubbed units. Un-allotted units worth Rs.34,16,02,405/- were clubbed with 9 allotted units worth Rs.15,26,90,431/-. Against the total RED of Rs.49,42,92,836/-, Rs.40,19,20,779/- was received in the aforesaid bid. The highest bids have been recorded at Col. No. 8 of Annexure A. Against the total RED of Rs. 163,50,75,000/-, Rs.151,39,54,272/- has been received which is 7.38% short. Sh. Hem Pal Kalta offered his bids for 7 units out of which two are allotted units namely Gumma and Batargalu and rrest 5 un-allotted units namely Chhaila, Kharapathar, Jubbal, Kuthara and Summerkot. The bid money offered was Rs.10,34,25,072/- against the original RED of 147660608. The original allottee of Gumma unit was asked to give his bid for the aforesaid combination. But he offered his bid only for Chhaila and Gumma for an amount of Rs.5,18,00,000/- against the original RED of Rs.5,74,50,187/-. Today dated 31.03.2018 the original allottee of Gumma unit Sh. Gulshan Chauhan, appeared before the E.T.c. and offered to buy Kutara and Jubbal (both un-alloted units) at an RED of Rs.1,85,00,000/- against the original RED of 36728525. The comparison offered by the aforesaid licences is as below: Name of the Bidder Hem Kalta Unit Bid Offered RED Gumma 16852690 16852690 Chhaila 26023194 40597497 Kutara 10286300 16047148 Jubbal 13256864 20681377 Total 66419048 94178712 Name of the Bidder Gulshan Chauhan Unit Bid Offered RED Gumma 16852690 16852690 Chhaila 34947310 40597497 Kutara 18500000 16047148 Jubbal 20681377 Total 70300000 94178712 However the bid offered by Sh. Gulshan Chauhan is higher as compared to the bid offered by Sh. Hem Pal Kalta but he offered to buy two more units namely Summerkot and Kharapathar @Rs.29428222/- (Original RED 25909514). No bid has been received in case of Kharapathar Unit, whereas in case Summerkot a bid of Rs.1,24,22,127/- has been offered.
Gulshan Chauhan is higher as compared to the bid offered by Sh. Hem Pal Kalta but he offered to buy two more units namely Summerkot and Kharapathar @Rs.29428222/- (Original RED 25909514). No bid has been received in case of Kharapathar Unit, whereas in case Summerkot a bid of Rs.1,24,22,127/- has been offered. Both the aforesaid bidders appeared in person before the E.T.C. and in the interest of justice and Government revenue both bidders were asked to revise their bids in writing for the aforesaid 4 units. Sh. Inder Kalta submitted revised bid for Rs.8,47,00,000/- on behalf of Sh. Hem Pal Kalta & Co. Sh. Gulshan Chauhan refused to submit any bid for the aforesaid units despite being given ample time. Revised Bids Name of the Bidder Hem Kalta Unit Bid Offered RED Gumma 16852690 16852690 Chhaila 34947310 40597497 Kutara 10286300 16047148 Jubbal 14056864 20681377 Total 76143164 94178712 Name of the Bidder Gulshan Chauhan Unit Bid Offered RED Gumma 16852690 16852690 Chhaila 34947310 40597497 Kutara 18500000 16047148 Jubbal 20681377 Total 70300000 94178712 It is pertinent to mention here that bid offered by Sh. Hem Kalta in respect of 7 units namely Gumma, Chhaila, Kutara, Jubbal, Batargalu, Kharapathar & Summerkot amount of Rs.10,91,25,072/- whereas the bid for the aforesaid units given by Sh. Gulshan Chauhan amount to Rs.10,83,90,428/-. The bid given by Sh. Hem Pal Kalta is higher by Rs.7,34,644/-. The original RED of these units is Rs.14,76,60,608/-. The original allottee of Badiara unit Sh. Hans Raj appeared before the E.T.C. today and he showed ignorance about the negotiation. He offered the bid of Rs.3,25,00,000/- for the clubbed units Badiara, Thana & Batwari against total RED of Rs.3,79,05,767/-. The earlier offer for the unit was Rs.3, 20,00,000/- given by Sh. Rakesh Negi. A bid of Rs.45,00,000/- was offered by Sh. Manohar Singh for Kharkujubbar Unit against the RED of Rs.84,87,857/-. However today requested in writing that his bid may not be considered. The second highest bid of Rs.41,00,000/- was revised by sh. Vinod Kumar, today to Rs.45,00,000/- and he conveyed his willingness to run the unit. Yesterday, a bid was received for Kufri and Raighat (Clubbed unit) @Rs.3,90,00,000/-from Sh. Rakesh Kumar. But today he gave a written request to withdraw his offer. The above observations are summed up in the table given below:- Sr. No No. of Units RED RED realised Remarks 1. 99 1635075000 2.
Yesterday, a bid was received for Kufri and Raighat (Clubbed unit) @Rs.3,90,00,000/-from Sh. Rakesh Kumar. But today he gave a written request to withdraw his offer. The above observations are summed up in the table given below:- Sr. No No. of Units RED RED realised Remarks 1. 99 1635075000 2. 68 Units Allotted in First Round 1112033393 1112033393 Nil 3. 31 Un allotted units Regrouped to 25 units 523041507 402742906 -120298701 93 1635075000 1514776299 -120298701 Thus the highest revenue which can be generated through RED for the year, 2018-19 for District Shimla is Rs.151,47,76,299/- which is Rs.12,02,98,701/- (7.35%) short of the total value of Rs.163,50,75,000/-” 19. A perusal of the said proceedings demonstrates that during the process of negotiation of allotment of un-allotted excise units in respect of District Shimla, which was so undertaken on 30.03.2018 by a Committee so constituted by the Excise and Taxation Commissioner, which Committee was headed by the said authority, private respondent offered his bid for seven units out of which, two were allotted units, namely, Gumma and Batargalu. The bid amount, which was so offered by the private respondent for these seven units was Rs.10,34,25,072/- against the original RED of 147660608. Proceedings also demonstrate that the original allottee of Gumma unit, i.e., the present petitioner was asked to give his bid for the aforesaid combination, but he offered his bid only for Chhaila and Guma for an amount of Rs. 5,18,00,000/- against the original RED of Rs. 57450187/-. Proceedings also demonstrate that on 31.03.2018, the petitioner again appeared before the Excise & Taxation Commissioner and offered to buy Kutara and Jubbal, both un-allotted units by offering an amount of Rs. 1,80,00,00/- against the original RED of Rs.3,67,28,525/-. It is apparent from the perusal of the said proceedings that whereas on one hand, respondent No. 7 made a bid of an amount of Rs.10,91,25,072/- in respect of seven units, the bid given by the present petitioner for the same units was Rs.10,83,90,428/-, i.e., less by Rs.7,34,644/- as compared to respondent No. 7. 20.
It is apparent from the perusal of the said proceedings that whereas on one hand, respondent No. 7 made a bid of an amount of Rs.10,91,25,072/- in respect of seven units, the bid given by the present petitioner for the same units was Rs.10,83,90,428/-, i.e., less by Rs.7,34,644/- as compared to respondent No. 7. 20. The point which has been raised for the purpose of adjudication by the petitioner in the present writ petition is as to whether an already successfully bidded liquor vend could have been permitted to be put for the purpose of negotiation at the time of auctioning “left over excise vends” without there being any express mentioning in the Public Notices concerned that during the course of negotiation, if need so arises, such like liquor vends could also be considered for the purpose of fresh allotment along with unsold vends. 21. Before proceeding further, it is pertinent to point out at this stage that though as on the date when negotiations took place, which are subject matter of the present writ petition dated 30.03.2018, the petitioner was the successful bidder as far as liquor vend No. 98 for Gumma is concerned, but his bid had not yet been accepted by the Excise and Taxation Commissioner in terms of Announcements Annexure P-1. 22. In State of Orissa and others Vs. Harinarayan Jaiswal and others, (1972) 2 SCC 36 , the Hon’ble Supreme Court has held that the Government is the guardian of the State’s revenue and is expected to protect the financial interests of the State. Relevant portion of the said judgment is extracted hereinbelow: “... It was next urged that having had recourse to the auction method once, the Government was precluded from either calling for tenders or to sell by negotiation. The High Court has accepted that contention. We are unable to agree with the High Court in its conclusion. Neither the provisions of the Act nor the order issued by the Government lend any support to such a conclusion. Once the Government declines to accept the highest bid, the auction held became useless. Similar is the effect when the Government refused to accept the highest tender. That left the Government free to have recourse to other methods. The power given to the Government by the Act to sell the exclusive privilege in such other manner as it thinks fit is a very wide power.
Similar is the effect when the Government refused to accept the highest tender. That left the Government free to have recourse to other methods. The power given to the Government by the Act to sell the exclusive privilege in such other manner as it thinks fit is a very wide power. That power is unrestricted. It undoubtedly includes the power to sell the privileges in question by private negotiation. It was urged that before adopting the method of selling the privileges by private negotiation. The Government is required by S. 29 (2) (a) to make an order that the, privileges in question will be sold by private negotiation. The Government has failed to make such an order. Hence the sales effected are invalid. We, are, unable to accept these contentions. In the cases of public auctions or in the case of calling for tenders, orders from the Government directing its subordinates to notify or hold the auctions or call for tenders is understandable. Public auctions as well as calling for tenders are done by subordinate officials. Further due publicity is necessary in adopting those methods. TOP require the Government to make an order that it is going to sell one or more of the privileges in question by negotiating with some one is to make a mockery of the law. If the Government can enter into negotiation with any person, as we think it can, it makes no sense to require it to first make an order that it is going to negotiate with that person. We must understand a provision of law reasonably. Section 29 (2) (a) does not speak of any order. It says that "the State Government may by general or special order direct". The direction contemplated by that provision is a direction to subordinate officials. It is meaningless to say that the Government should direct itself.” 23. In State of M.P. Vs. Nandlal Jaiswal, (1986) 4 Supreme Court Cases 566, Hon’ble Supreme Court has held that no one can claim against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor, but when the State decides to grant such right or privilege to others, the State cannot escape the rigour of Article 14. 24. In Kuldeep Singh Vs. Govt.
24. In Kuldeep Singh Vs. Govt. of NCT of Delhi, (2006) 5 Supreme Court Cases 702, the Hon’ble Supreme Court has reiterated that the citizen has no fundamental right to carry on business in liquor and it is the State that has the exclusive privilege in a case of this nature. Hon’ble Supreme Court further went on to hold that though it was true that some licences had been granted, but the same cannot by itself be a ground to issue a writ of mandamus, particularly in view of the fact that the party has no legal right in respect thereof. While referring to the advertisement in question in the same very case, Hon’ble Supreme Court also held that appellants therein could not have had any legitimate expectation that they would invariably be grated a licence to deal in liquor. 25. A Division Bench of this Court in Sarita Devi Vs. Secretary, Excise and Taxation Department & others, CWP No. 1673 of 2017, decided on 16th August, 2017, while dealing with the history of alcoholism and the paradox in right of the State to deal in the trade of liquor has held as under: “22. History, social and legislative, dealing with the issue of alcoholism, best stands traced by Hon’ble the Supreme Court of India in P.N. Kaushal & others vs. Union of India & others, (1978) 3 SCC 558 . The Court viewed the impact of alcohol on temperance on a given society. The paradox in the State indulging in the trade of liquor stands reiterated in the following terms: “42. … … Further, Article 47 charges the State with promotion of prohibition as a fundamental policy and it is indefensible for Government to enforce prohibitionist restraints on others and itself practice the opposite and betray the constitutional mandate. It suggests dubious dealing by State power. Such hollow homage to Article 47 and the Father of the nation gives diminishing credibility mileage in a democratic polity.” 23. By culling out the principles of law laid down by the Apex Court in its several decisions, more so, in earlier Constitution Bench (Five Judges) in Har Shankar and others v. The Dy. Excise ad Taxation Commr.
Such hollow homage to Article 47 and the Father of the nation gives diminishing credibility mileage in a democratic polity.” 23. By culling out the principles of law laid down by the Apex Court in its several decisions, more so, in earlier Constitution Bench (Five Judges) in Har Shankar and others v. The Dy. Excise ad Taxation Commr. and others, (1975) 1 SCC 737 , the Constitution Bench (Five Judges) in Khodey Distilleries Ltd. & others vs. State of Karnataka & others, (1995) 1 SCC 574 summarized the law relevant for the issue as under: “(a) The rights protected by Article 19 (1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19 (l) (a) to (g) are, therefore, to be read along with the said qualifications. Even the rights guaranteed under the Constitutions of the other civilized countries are not absolute but are read subject to the implied limitations on them. Those implied limitations are made explicit by clauses (2) to (6) of Article 19 of our Constitution. (b) The right to practise any profession or to carry on any occupation, trade or business does not extend to practising a profession or carrying on an occupation, trade or business which is inherently vicious and pernicious, and is condemned by all civilised societies. It does not entitle citizens to carry on trade or business in activities which are immoral and criminal and in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public, i. e. , res extra commercium, (outside commerce). There cannot be business in crime. … … (d) Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country.
It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the governance of the country. The State has, therefore, the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage, both because it is inherently a dangerous article of consumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purposes. (e) For the same reason, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19 (6) or even otherwise. … ... (g) When the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, and the State cannot make discrimination between the citizens who are qualified to carry on the trade or business. (h) The State can adopt any mode of selling the licences for trade or business with a view to maximise its revenue so long as the method adopted is not discriminatory. … …” 26. Further, while dealing with the State’s right to contract in the trade of liquor and fairness in dealing with the same, this Court held as under: “25. In Ramana Dayaram Shetty vs. International Airport Authority of India & others, (1979) 3 SCC 489 , the Apex Court held that it is a well settled principle of administrative law that an executive authority must rigorously be held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. The Government, in a welfare State is the regulator and dispenser of special services and provider of a large number of benefits, including licences, but they all share one characteristic. The Court further held that “The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.
The Court further held that “The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure. This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, in granting largesse or licences, it cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. 26. It is a settled principle of law that if the Government departs from standards, which are structured by rational, relevant and nondiscriminatory factors, unless it is shown that the departure is not arbitrary, in fact based on some valid principle, which in itself was not irrational, unreasonable or discriminatory, the action is liable to be struck down. 27. The Apex Court in Raunaq International Ltd. vs. I.V.R. Construction Ltd. & others, (1999) 1 SCC 492 observed as under: “9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be: (1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services.
Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction. 10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work thus involving larger outlays of public money and delaying the availability of services, facilities or goods. e.g. A delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation.” 28. In Food Corporation of India vs. M/s Kamdhenu Cattle Feed Industries (1993) 1 SCC 71 , the Court observed as under: “7. In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Art, 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law: A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fair play in action'. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions.
Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.” 29. In State of M.P. & others vs. Nandlal Jailwal & others, (1986) 4 SCC 566 , it is held that when State decides to grant right of privilege, it cannot escape the rigors of Article 14 of the Constitution. It cannot act arbitrarily and on its own will. It must comply with equality clause while granting exclusive grant of privilege for selling liquor. Further grant of sale of liquor would essentially be a matter of economic policy.” 27. While dealing with the rights of bidder, this Court has held as under: “33. What are rights of a bidder stands reiterated by the Apex Court in Meerut Development Authority vs. Association of Management Studies & another, (2009) 6 SCC 171 in the following terms: “27. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.” 28.
No bidder is entitled as a matter of right to insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.” 28. It is so well-settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process. 29. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favoritism.” 34. It is a settled principle of law that with the submission of the highest bid, no right is conferred upon the bidder. [Uttar Pradesh Avas evam Vikas Parishad & others vs. Om Prakash Sharma, (2013) 5 SCC 182 ]. 35. In Tata Cellular vs. Union of India, (1994) 6 SCC 651 the Court observed as under: “70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness of favoritism. However, it must be clearly stated that there are inherent limitation in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.” 36.
There can be no question of infringement of Article 14 if the government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.” 36. In Haji T.M. Hassan Rawther (supra), the Apex Court clarified that the State owned or public owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles ‘have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest when it is considered necessary to dispose of a property is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism.” 28. Case laws referred to hereinabove demonstrate that it is well settled law that as against the State, no one can claim the right to carry on trade or business in liquor and further that the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liqour, subject to the rider that when the State decides to grant such right or privilege to others, the State cannot escape the rigour of Article 14 of the Constitution of India, meaning thereby that when the State decides to grant such right to others, the State has to act in a fair manner and it can not be permitted to act arbitrarily. 29. Coming to the facts of this case, it is a matter of record that there were certain un-allotted vends, for the allotment of which by way of negotiation, Public Notices stood issued inviting public at large that said un-allotted vends shall be allotted by way of negotiations on 30.03.2018.
29. Coming to the facts of this case, it is a matter of record that there were certain un-allotted vends, for the allotment of which by way of negotiation, Public Notices stood issued inviting public at large that said un-allotted vends shall be allotted by way of negotiations on 30.03.2018. It is also a matter of record that in the process of the said negotiations, the private respondent while bidding for five un-allotted vends also made a bid for two vends, including Unit No. 98 vis-a-vis which earlier successful bids stood made, though the said bids were not yet confirmed. It was in the course of said negotiations in which the petitioner as also respondent No. 7 participated that respondent No. 7 out-bidded the petitioner. This Court is not oblivious to the fact that as far as Unit No. 98 is concerned, the petitioner had already made a successful bid for the same on 15.03.2018 and his bid was pending acceptance of the Excise and Taxation Commissioner. This Court is also not oblivious of the fact that Public Notices Annexures P4 and P5 were only for “allotment of un-allotted vends” and there was no mention in the said Public Notices that the vends qua which successful bids were already pending approval of Excise and Taxation Commissioner, such vends could also be taken into consideration in the course of negotiations to be so undertaken for the allotment of unsold vends. Be that as it may, the fact of the matter still remains that the bid of the successful bidder had not been accepted by the competent authority, i.e., the Excise and Taxation Commissioner, who as per Announcements Annexure P1 was having the right to reject the bid without assigning any reason. It is but obvious that in the course of negotiations, which so took place on 30.03.2018 for allotment of un-allotted vends, respondent No. 7 while putting forth his bid for five un-allotted Units, simultaneously also made his bid with regard to two already successfully bidded Units, which includes Unit No. 98 for amount of Rs.10,34,25,072/-.
It is but obvious that in the course of negotiations, which so took place on 30.03.2018 for allotment of un-allotted vends, respondent No. 7 while putting forth his bid for five un-allotted Units, simultaneously also made his bid with regard to two already successfully bidded Units, which includes Unit No. 98 for amount of Rs.10,34,25,072/-. In our considered view, respondent No. 7 did so taking into consideration his business prospects and probably what weighed with the said respondent was the fact that in case the Department allotted him two already bidded vends, then it would make business sense for him to make a bid for at least five of the un-allotted vends. 30. We do not find from the contemporaneous record that at the time when the negotiations were so going on any objection in this regard was raised by the petitioner. We say so for the reason that even as per the petitioner, the first objection in this regard which was so raised, was raised vide Annexure P6, dated 31.03.2018. 31. Though an objection has also been taken with regard to the maintainability of the petition on the ground that as the petitioner unsuccessfully participated in the negotiations, he cannot be now permitted to assail the same, however, we are not detaining ourselves with this issue and we are proceeding to decide the larger issue itself. 32. Proceedings of the meeting which took place on 30.03.2018 demonstrate that for the five un-allotted vends and two already bidded vends, whereas respondent No. 7 made a bid for an amount of Rs. 10,91,25,672/-, the petitioner made a bid of Rs. 10,83,90,428/-, though the same did not include the vend at Jubbal. Thus, in all, by accepting the bid of respondent No. 7, respondent-State successfully allotted five un-allotted Units along with two already bidded for Units and in return gained an exchequer of Rs. 10,91,25,072/- as against an offer of `10,83,90,428/in this regard from the petitioner. 33. We have already referred to the judgment of Hon’ble Supreme Court in State of Orissa and others Vs. Harinarayan Jaiswal and others (supra), wherein Hon’ble Supreme Court has held that the Government is the guardian of the State’s revenue and is expected to protect the financial interests of the State. Now, incidentally in the present case, there is no allegation of colourable exercise of powers or malafides, substantiated by any record against the respondent-State.
Harinarayan Jaiswal and others (supra), wherein Hon’ble Supreme Court has held that the Government is the guardian of the State’s revenue and is expected to protect the financial interests of the State. Now, incidentally in the present case, there is no allegation of colourable exercise of powers or malafides, substantiated by any record against the respondent-State. All that the petitioner has argued is this that when the already bidded for vends were not mentioned in the Public Notices Annexures P4 and P5, then the act of the respondent-State of grouping said vends also for the purpose of negotiations along with un-allotted vends is an arbitrary act and an act in violation of the Announcements for the year 2018-2019. Though it is matter of record that Annexures P4 and P5 only referred to “un-allotted vends”, however, it is also a matter of record that vends qua which petitioner was the highest bidder had yet not been allotted in favour of the petitioner, in view of the fact that the bid of the petitioner had yet not been accepted in terms of the Announcements by the respondent No. 2. Therefore, taking into consideration the fact that petitioner has no fundamental right in the trade of liquor and that it is the State that has the exclusive privilege to carry on business in liquor, we do not find the act of respondent No. 2 of allowing already bidded vends to be a part of negotiations which took place on 30.03.2018, to be an arbitrary act for the reason that this exercise was undertaken by the said respondent in the interest of the State, as by permitting the said vends to be renegotiated along with un-allotted vends, respondent-authority was able to garner more revenue in favour of the State. 34. No other point has been urged. 35. In view of the discussion held hereinabove, as we do not find any merit in the present petition, the same is accordingly dismissed. No order as to costs.