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2018 DIGILAW 793 (MP)

Gwalior Alcobrew Pvt. Ltd. v. State of M. P.

2018-09-14

ASHOK KUMAR JOSHI, SANJAY YADAV

body2018
JUDGMENT : Sanjay Yadav, J. 1. Petitioner, a company registered under the Companies Act deals in manufacturing, bottling and sales/transfer of Indian made foreign liquor, Country Spirit under license F.L.9, F.L.9-A, C.S.I. and D-1 issued under the M.P. Foreign Liquor Rules, 1996, M.P. Country Spirit Rules, 1995 and the M.P. Distillery Rules, 1995; calls in question the validity of Rule 4 (4) of the M.P. Country Spirit Rules, 1995 and Rule 4 (4) of the Madhya Pradesh Distillery Rules, 1995. 2. The impugned Rules are: Rule 4 (4) of the M.P. Country Spirit Rules, 1995: “(4) (a) The licensee shall maintain at each “bottling unit” a minimum stock of bottled liquor and rectified spirit equivalent to average issues of five and seven days respectively of the preceding month. In addition, he shall maintain at each “storage warehouse” a minimum stock of bottled liquor equivalent to average issue of five days of the preceding month: Provided that in special circumstances, the Excise Commissioner may reduce the above requirement of maintenance of minimum stock of rectified spirit and/or sealed bottles in respect of any “bottling unit” or “storage warehouse”. (b) The C.S. 1 licensee shall maintain at each [bottling unit] such minimum stock of empty-bottles as may be fixed by the District Excise Officer of the concerned district.” Rule 4 (4) of the M.P. Distillery Rules, 1995: “(4) The licensee shall maintain at the distillery the minimum stock of spirit as prescribed by the Excise Commissioner from time to time. The Excise Commissioner shall prescribe the minimum stock of spirit on the basis of demand of country spirit from the distillery.” 3. Evidently, these Rules prescribes for maintenance of minimum stock and are framed by the State Government in exercise of its powers conferred in respect of Country Spirit Rules, 1995, vide sub-section (1) and clauses (d) and (h) of sub-section (2) of Section 62 of the Madhya Pradesh Excise Act, 1985 and in respect of Distillery Rules, 1995 vide powers conferred by sub-section (1) and clauses (d), (e), (f), (g) and (h) of sub-section (2) of Section 62 of the Madhya Pradesh Excise Act, 1915. 4. 4. It appears that the petitioner having failed to maintain minimum stock has been subjected to the proceedings under Rule 12 of the Country Spirit Rules, 1995 and Rule 8 of the Distillery Rules, 1995: Imposition of penalty after considering the reply to show cause notice and its affirmation by the Board of Revenue has led the petitioner to question the validity of the Rules. 5. It is contended that the impugned Rules are arbitrary, inequitable, unfair and erroneous. It is urged that they transgress their limits and provides for new duties/penalties not provided in the Parent Act of 1995. Thus are in direct conflict with the specific provisions thereof. Adhering to impugned Rules, it is urged, tantamount to creating of new offences not known to the substantive Act of 1915. Drawing parity with Rule 22 of the M.P. Breweries Rules, 1970 wherein new duty in the form of supervision charges was created, and therefore, was struck down in AIR 1992 SC 1393 , it is submitted by the learned counsel for the petitioner that by creating the concept of minimum stock, and the penalty in case of its non adherence, the delegated authority has acted beyond the delegation. It is submitted that levy of penalty has no sanction of law. It is further contended that State and its Functionaries are conferred with the power to change any kind of penalty under section 62 (2) (d) of 1915 Act or for that under any provision of the Act of 1915. It is also the submission on behalf of the petitioner that the creation of new contingency i.e. maintenance of minimum stock and the penalty for not adhering to the same is not supported by the legislation. It is argued that penalty without consequential loss of revenue is unlawful and unconstitutional. It is contended that these Rules violates guarantee conferred under Article 19 (1) (g) of the Constitution. 6. The State of Madhya Pradesh on their turn has opposed the challenge. It is urged that the supply of Country Liquor is maintained and supervised under the Madhya Pradesh Country Spirit Rules, 1995. Rule 4 whereof provides for manufacturing, bottling, storage and supervision by the State Excise Department. As per the Rule, it is urged that the licensee holding CS-1 license for the particular year is required to maintain minimum stock of packing materials, empty bottles, spirit and finished goods. Rule 4 whereof provides for manufacturing, bottling, storage and supervision by the State Excise Department. As per the Rule, it is urged that the licensee holding CS-1 license for the particular year is required to maintain minimum stock of packing materials, empty bottles, spirit and finished goods. The object being to maintain continuous supply of country spirit as per the demand of the retail vendors. Similarly it is urged that the breweries are required to maintain minimum stocks as determined by the Excise Commissioner. The condition stipulated in the Rules, it is urged, are neither arbitrary nor without authority as alleged. It is urged that the State is replenished with exhaustive power conferred upon it by Section 62 of the Act of 1915. It is urged that minimum stock is required to be maintained to meet out any contingency and a loss to the revenue. It is urged that the stipulation contained under Rule 4 (4) of the Rules of 1995 are neither excessive nor without any authority. Consequently, the State seeks dismissal of petition being sans merit. 7. Considered the rival submissions. 8. Chapter IV of the 1915 Act deals with the provisions regarding manufacture, possession and sale of intoxicants. Section 13 prohibits manufacturer on collection of intoxicants subject to the license issued by the State Government. Similarly, section 17 prohibits sale of intoxicant. subject to the terms and conditions of licence granted in that behalf. Section 14 empowers the Excise Commissioner: (a) establish a distillery in which spirit may be manufactured under a licence granted under Section 13 on such conditions as the State Government may impose; (b) discontinue any such distillery; (c) licence, on such conditions as the State Government may impose, the construction and working of a distillery or brewery; (d) establish or licence a warehouse, wherein an intoxicant may be deposited and kept without payment of duty, but subject to payment of such fee as the State Government may direct; and (e) discontinue any such warehouse. 9. Section 16 of 1915 Act stipulates that the State Government may by notification, prescribe a limit of quantity for the possession of any intoxicant, including different limits for different qualities of the same article. Furthermore, Chapter VII makes provision regarding offences and penalties. 9. Section 16 of 1915 Act stipulates that the State Government may by notification, prescribe a limit of quantity for the possession of any intoxicant, including different limits for different qualities of the same article. Furthermore, Chapter VII makes provision regarding offences and penalties. Section 37 whereunder stipulates that “Whoever, is guilty of any act or intentional omission in contravention of any of the provisions of this Act, or of any rule, notification or order made, issued or given thereunder and not otherwise provided for in this Act, shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or with both. 10. Evidently the petitioner has not questioned the validity of Section 37 of 1915 Act. 11. Furthermore, sub-section (1) of Section 62 of 1915 Act empowers, the State Government to make rules for the purpose of carrying out the provisions of this Act. That clause (h) of sub section (2) of Section 62 of 1995 Act empowers the State Government to make Rules: “(h) prescribing the authority by, the form in which, and terms and conditions on and subject to which any licence, permit or pass shall be granted, any by such rules, among other matters,- (i) fix the period for which any licence, permit or pass shall continue in force, (ii) prescribe the scale of fees or the manner of fixing the fees payable in respect of any such licence, permit or pass, (iii) prescribe the amount of security to be deposited by holders of any licence, permit or pass for the performance of the conditions of the same, (iv) prescribe the accounts to be maintained and the returns to be submitted by licence-holders, and (v) prohibit or regulate the partnership in, or the transfer of, licenses. 12. A Division Bench of this Court in Sharma & Company, Bilaspur Vs. State of Madhya Pradesh and others, 1981 M.P.L.J. 422 dwelling on the extent of powers the State have under clause (h) of sub-section (2) of Section 62 to frame Rules, their Lordships were please to observe: “4........ We have already quoted section 62 (2) (h) which empowers the Government to prescribe the terms and conditions on and subject to which any licence may be granted. We have already quoted section 62 (2) (h) which empowers the Government to prescribe the terms and conditions on and subject to which any licence may be granted. It is true that in clause (h) of section 62 (2) five matters are specifically enumerated but the enumeration of these matters does not take away the general power conferred on the Government to prescribe the terms and conditions not covered by these five enumerated matters. The words “among other matters” which precede the enumeration of five matters in clause (h) clearly postulate that the enumeration is not exhaustive and the general power of prescribing terms and conditions is not taken away. This was the view taken by the Division Bench of this Court in Suresh Chandra's case (supra) and we respectfully agree with it.” 13. Another Division Bench of this Court in R.K. Traders Vs. State of Madhya Pradesh and others, 1995 M.P.L.J. 728 dwelling on the following issues viz.: “(i) The provision for quota and penalty is really a provision for payment of excise duty on unlifted liquor and such a provision does not have statutory support. (ii) The decision in Pannalal's case, AIR 1975 SC 2008 has been distinguished in the decision in M/s Laisons Brewery Pvt. Ltd. v. State of M. P. and ors., AIR 1992 SC 1393 and cannot be followed. (iii) The decision in Sharma and Co. v. State of M. P., 1981 MPLJ 423 is per incuriam since it does not follow the decision in B. C. Banerjee v. State of M. P., AIR 1971 SC 517 . (iv) The decision in Sharma and Co. v. State of M. P., 1981 MPLJ 423 requires reconsideration in the light of decision in M/s Laisons Brewery Pvt. Ltd. v. State of M. P. and ors., AIR 1992 SC 1393 . (v) The decision in M. P. No. 48 of 1978 which has followed the decision in Pannalal's case, AIR 1975 SC 2008 has been reversed in M/s Laisons Brewery Pvt. Ltd. v. State of M. P. and ors., AIR 1992 SC 1393 and, therefore, the decision in Sharma and Co. v. State of M. P., 1981 MPLJ 423 requires reconsideration. (vi) Assuming the provision for quota is valid, since the Statute does not provide for penalty, the condition regarding penalty is ultra vires the Act. v. State of M. P., 1981 MPLJ 423 requires reconsideration. (vi) Assuming the provision for quota is valid, since the Statute does not provide for penalty, the condition regarding penalty is ultra vires the Act. (vii) The provision for penalty is mandatory and rate of penalty is inflexible and, therefore, arbitrary. (viii) The Statute and the Rules do not lay down any norms regarding fixation of quota and, therefore, the provision is arbitrary. (ix) The Statute and the Rules do not provide for delegation to the Collector of power to fix quota. (x) The provision for quota and for levy of penalty are contrary to Article 47 of the Constitution and Section 23-A of the Statute. has held: “10 The provision for quota and penalty consequential to failure to lift the quota is quite different from a provision for payment of excise duty on unlifted quantity of liquor for which, of course, there is no statutory support. In Bimal Chandra Banerjee's case, AIR 1971 SC 517 the Supreme Court held the then existing condition 2-C which provided that the licensee is liable to make good every month the deficit of monthly average of the total minimum duty to be clearly a provision for payment of excise duty on unlifted liquor. The Supreme Court pointed out that Sections 25, 26, 27, 62(1) or 62(2) (h) did not empower the State Government to levy tax on excisable articles which have not been imported, exported, transported, manufactured, cultivated or collected under any licence granted under Section 13 or manufactured in any distillery established or any distillery or brewery licensed under the Act. The Legislature has levied excise duty only on those articles which attract Section 25. Section 25 did not authorise the Government to levy duty on articles which do not fall within the scope of Section 25 such as quantity of unlifted liquor. The scheme of the amended condition 2-C presently under consideration is quite different in nature and content from the condition which was considered by the Supreme Court in Bimal Chandra Banerjee's case, AIR 1971 SC 571. The condition in its present form does not in form, substance or content levy excise duty at all. It only prescribes quota and penalty for failure to lift the quota. The penalty prescribed is not in quantum identical to the quantum of excise duty calculated on the quantity of unlifted liquor. The condition in its present form does not in form, substance or content levy excise duty at all. It only prescribes quota and penalty for failure to lift the quota. The penalty prescribed is not in quantum identical to the quantum of excise duty calculated on the quantity of unlifted liquor. Therefore, the contention that the decision in Sharma and Co. is per incuriam as it does not advert to or follow the decision of the Supreme Court in Bimal Chandra Banerjee's case, AIR 1971 SC 517 is unsustainable. 13. The position is quite different in regard to the condition impugned in these writ petitions. As amended, Condition 2-C has no nexus, direct or indirect, with excise duty or any shortfall in collection of excise duty. It prescribes that the licensee should lift stipulated quota and if he fails to do so, he is liable for penalty levied by the Collector. This is merely a contractual obligation created by the statutory Rule and accepted by the licensee voluntarily. This condition is announced and brought to the notice of the intending bidders before every auction and Sahmat Patra is taken from the bidders. Prescription of such a condition is a normal trade practice. 16. There is no fundamental right in a citizen to carry on trade or business in liquor. The State under its regulatory power can prohibit absolutely every form of activity in relation to intoxicants. The State may decide to grant the privilege of carrying on manufacture, storing, importing, exporting, selling and possessing liquor to others. Of course, if the State decides to do so, it can regulate the same consistently with Article 14 of the Constitution of India. These aspects are inherent in the various provisions of the Act prescribing the power to prohibit the import, export or transport of any intoxicant, the interdiction against import, export or transport without sanction, prohibition of sale except under authority and subject to terms and conditions of licence, provision for licensing distilleries and warehouses, payment of duty, conditions for possession of intoxicants, power to grant lease or right to manufacture, supply, sale of liquor, prohibition of employment of male persons under 21 years of age and women in sale of liquor, prohibition of sale of liquor to persons under the age of 21 years. Prohibition of advertisement relating to liquor, closure of shop for the sake of public peace etcetera. Prohibition of advertisement relating to liquor, closure of shop for the sake of public peace etcetera. The Act also provides for power to cancel or suspend licence in certain contingencies. Chapter VII deals with offences and penalties. Considering the dangerous nature of the subject matter of the Act in regard to which no citizen has a fundamental right, the Act has conferred on the State Government substantial regulatory powers. There is no price control for retail sale of liquor. There is tendency on the part of licensees to purchase illicit liquor of doubtful quality at a rate cheaper than that of liquor supplied by the State or bring such illicit liquor from outside the District or State. The legislature wanted to ensure that manufacture and trade in liquor is under State control with a view to ensure quality of liquor made available to consumers, to prevent manufacture or sale of illicit liquor which may effect the revenues of the State, health of the consumers and public interest. Bearing in mind these aspects and the provisions of Section 18 which refer to lease of the right to manufacture, sale etc. on such conditions as State Government thinks fit and the care taken by the Legislature while enumerating five matters in Section 62(2)(h) to insert the words 'AMONG OTHER MATTERS' and the power granted under these provisions to the State Government to prescribe terms and conditions, it must follow that Section 62(2)(h) enables the State Government to make a provision for condition of quota for licensees and to enforce the quota by prescribing penalty for not fulfilling the condition. Provisions of Chapter VII of the Act dealing with penal offences and penalties for such offences is of no significance in this context. We, therefore, hold that the power to frame rules for stipulating quota and penalty flows from Section 62(2)(h) of the Act, 1915. Point answered accordingly. 22. It is contended that there are no norms regarding fixation of quota required to be lifted and therefore, the provision is arbitrary. It is true that the Act and the Rules do not contain express norms regarding fixation of quota. Point answered accordingly. 22. It is contended that there are no norms regarding fixation of quota required to be lifted and therefore, the provision is arbitrary. It is true that the Act and the Rules do not contain express norms regarding fixation of quota. The return indicates that provision is made to stop illicit trade in liquor, to indirectly control selling rate in shops, to ensure that illicit liquor is not obtained by the licensee and sold in the shop, to ensure that no attempt is made to under-sell liquor and thereby encourage consumption and to ensure that the quality of liquor is wholesome. These factors are inherent in the exercise of power of fixation of quota required to be lifted. The Collector cannot fix a quantity in an individual case arbitrarily or without reference to the facts and circumstances relating to each area or each shop and the stock lifted in the previous years in respect of each shop. These are the broad guidelines which are inherent in the provision. The quota is announced before the public auction and the intending bidders are made aware of it. We reject the contention that there are no norms prescribed and therefore, the provision is arbitrary. 23. It is contented by the petitioners that the Act and the Rules do not provide for delegation on the Collector of the power to fix quota. Section 62(2) (h) of the Act enables the State Government to prescribe the authority by whom licence is to be granted, the form in which the licence is to be granted and the terms and conditions on which licence is to be granted. One of the conditions prescribed by the Rules relates to fixation of quota. The quota is announced before holding the public auction. In the very nature of things the quota would vary from one area to another and from one shop to another. It may also vary from year to year. It is explained by the learned Government Advocate appearing for the respondents that the quota is fixed by the Collector based on the quantity of liquor lifted during the preceding three years. The quota is incorporated in the licence issued to the licensee. Licence is issued by the Licensing Authority who is the Collector. Necessarily the quota has to be determined by the Collector. The quota is incorporated in the licence issued to the licensee. Licence is issued by the Licensing Authority who is the Collector. Necessarily the quota has to be determined by the Collector. The Rules clearly spell out delegation of such power to the Collector. Rules cannot lay down the quota in respect of each area or shop. Section 62(2)(h) of the Act contemplates conditions and the licensing authority to be prescribed by the Rules. Therefore, vesting of the power of fixing the quota in the Collector is not illegal or ultra vires. 25. Article 47 of the Constitution which occurs in Part-IV of the Constitution relating to Directive Principles of State Policy 'requires the State to regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and in particular to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and of drugs which are injurious to health. It is contended that the impugned provisions are contrary to the provisions of Article 14. This contention was considered and rejected in Suresh Chandra's case, M. P. No. 579 of 1990 and Sharma and Co., 1981 MPLJ 423. In the latter case, the Division Bench drew attention of the State Government to the observations of Krishna Iyer, J. In P. N. Kaushal v. Union of India, AIR 1978 SC 1457 explaining why alcohol business is dangerous and its injurious character and mischief potential legitimates active policing of the trade by any welfare State. It is true that in the process of interpretation, the principles enshrined in Part-IV of the Constitution may enter the soul of fundamental rights. As observed in M/s Kasturilal Laxmi Reddy v. State of Jammu and Kashmir and others, AIR 1980 SC 1992 , the Directive Principles of State policy concretise and give shape to the Constitutional concept of public interest. In considering the reasonableness of any action, regard may be had to the Directive Principles of State Policy. However, these criteria cannot help the petitioners to get over the impugned provisions. There is no room for enforcing doctrine of reasonableness or fairness in the realm of contract, even contracts which are statutory. In considering the reasonableness of any action, regard may be had to the Directive Principles of State Policy. However, these criteria cannot help the petitioners to get over the impugned provisions. There is no room for enforcing doctrine of reasonableness or fairness in the realm of contract, even contracts which are statutory. Scheme of quota is a well recognised trade practice as observed in Pannalal v. State, AIR 1975 SC 2008 and Assistant Excise Commissioner and Ors. v. Issac Peter and others, J.T. 1994 (2) SC 140. The petitioners were aware of the impugned conditions before they offered their bids. The necessary information was announced also before the auction. They offered the bids with their eyes open, and they were fully conscious of the impugned conditions and their responsibilities in the matter. They cannot now seek to go back on their commitment.” 14. Thus, the power of the State Government under section 62 (2) (h) of Act, 1915 to formulate the Rules governing the license condition as to maintenance of minimum stock has been upheld in Sharma & Company, Bilaspur (supra) and R.K. Traders (supra) and the decision therein having attained finality, we are not convinced and the petitioner fail to pursue us to take a different view. Consequently, the challenge to the validity of Rule 4 (4) of Rules, 1995 is negatived. 15. Trite it is that trade in liquor is not a fundamental right. It is a privilege of the State. The State parts with this privilege for revenue consideration. It is therefore within the powers of the State to adopt any mode with a view to maximize its revenue, of course, the method adopted must not be discriminatory (In the case at hand the discrimination is not the ground of challenge). 16. It is held in Khoday Distilleries Ltd. V. State of Karnataka: (1995) 1 SCC 574 : 60. We may now summarise the law on the subject as culled from the aforesaid decisions. (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 fundamenta l rights guaranteed in Article 19(1)(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. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamenta l rights guaranteed in Article 19(1)(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. (c) Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commerce being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. (d) ............. (e) ............. (f).............. (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 maximize its revenue so long as the method adopted is not discriminatory. (i) The State can carry on trade or business in potable liquor notwithstanding that it is an intoxicating drink and Article 47 enjoins it to prohibit its consumption. When the State carries on such business, it does so to restrict and regulate production, supply and consumption of liquor which is also an aspect of reasonable restriction in the interest of general public. The State cannot on that account be said to be carrying on an illegitimate business. When the State carries on such business, it does so to restrict and regulate production, supply and consumption of liquor which is also an aspect of reasonable restriction in the interest of general public. The State cannot on that account be said to be carrying on an illegitimate business. (j) The mere fact that the State levies taxes or fees on the production, sale and income derived from potable liquor whether the production, sale or income is legitimate or illegitimate, does not make the State a party to the said activities. The power of the State to raise revenue by levying taxes and fees should not be confused with the power of the State to prohibit or regulate the trade or business in question. The State exercises its two different powers on such occasions. Hence the mere fact that the State levies taxes and fees on trade or business in liquor or income derived from it, does not make the right to carry on trade or business in liquor a fundamental right, or even a legal right when such trade or business is completely prohibited. (k) ............. (l) .............. (m) ............ 17. In the case at hand the provisions of the Act of 1915 and Rules 1996 as we have already seen empowers the State to impose the conditions of minimum guarantee and to make provision for the penalty in case of infraction. There, thus being a power, the incorporation of the conditions as clauses 8,9,10 and 11 in the Excise Policy 2010-2011 and adopted in 2011-12 cannot be faulted with, as it is not the duty on undrawn liquor. 18. In the case at hand, the provision of Act of 1951 and the Rules of 1996 since empowers the State to impose the condition of maintenance of minimum stock, the impugned Rules does not infract any Constitutional provision. 19. There is another aspect of the matter. The petitioner admittedly did not raise any cavil or a dispute when the licence with the conditions under challenge was issued. It is only when the infraction is noticed and the action is proposed has led the petitioner to question the same which he cannot for the reasons that it is purely a contractual obligation which the petitioner is required to discharge. 20. In Har Shankar V.Dy. E & T Commissioner: AIR 1975 SC 1121 it is observed: "21. It is only when the infraction is noticed and the action is proposed has led the petitioner to question the same which he cannot for the reasons that it is purely a contractual obligation which the petitioner is required to discharge. 20. In Har Shankar V.Dy. E & T Commissioner: AIR 1975 SC 1121 it is observed: "21. On the preliminary objection it was fin-ally urged by the appellants that the objection was misconceived because there was, in fact, no contract between the parties and therefore they were not attempting to enforce any contractual rights or to wriggle out of contractual obligations. The short answer to this contention is that the bids given by the appellants constitute offers and upon their acceptance by the Government a binding agreement came into existence between the parties. The conditions of auction become the terms of the contract and it is on those terms that licences are granted to the successful bidders in Form L. 14A of the Rules. As stated in Chesbire and Fifoot's 'Law of Contract' (Eighth Ed., 1972; P. 24), "In order to determine whether, in any given case, it is reasonable to infer the existence of an agreement, it has long been usual to employ the language of offer and acceptance in other words, the court examines all the circumstances to see if the one party may be assumed to have made a firm, offer" and if the other may likewise be taken to have 'accepted" that offer. These complementary ideas present a convenient method of analysing a situation, provided that they are not applied too literally and that facts are not sacrificed to phrases." Analysing the situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations. 22......The licences, in a large measure, owe their existence and validity to the rule-making power of the Financial Commissioner. One of the reliefs which the appellants ask for is that Rules 27A, 30 and 31 be declared ultra vires and unconstitutional and consequently the respondents be directed to refund the assessed fees already recovered. 22......The licences, in a large measure, owe their existence and validity to the rule-making power of the Financial Commissioner. One of the reliefs which the appellants ask for is that Rules 27A, 30 and 31 be declared ultra vires and unconstitutional and consequently the respondents be directed to refund the assessed fees already recovered. By attempting to exploit the licences without the burden of assessed fees originally attaching to them under the rules framed by the Financial Commissioner, the appellants are seeking to work the licences on such terms as they find convenient. The writ jurisdiction of Hi gh Courts under Art. 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. 21. In Solomon Anthony V. State of Kerala: (2001) 3 SCC 694 it is held: "12. If the contractors have agreed to participate in the auction sale in terms of the notifications issued and the amended rules, it would make it clear that the kist amount would include excise duty on designated quantum of rectified spirit on the establishment. The argument put forth now is that the excise duty on designated quantum of rectified spirit is payable only in terms of the Act and the rules which is in the nature of a tax or a levy and the State Government is not competent to levy such excise duty on rectified spirit which is non-potable alcohol. This argument ignores the fact that the permit is granted to the contractors to import or purchase a designated quantum of duty paid rectified spirit and excise duty on the designated quantum of rectified spirit has to be paid each month which will be utilized for the purpose of manufacture of arrack and the kist amount payable would include the excise duty on the designated quantum of rectified spirit. It means that the consideration for parting with the privilege of vending arrack would include the consideration equivalent to excise duty on the rectified spirit. It means that the consideration for parting with the privilege of vending arrack would include the consideration equivalent to excise duty on the rectified spirit. Therefore, as is often said by this Court, if the contractors with their eyes wide open have accepted the terms of payment of consideration of the Kist inclusive of an amount equivalent to excise duty on rectified spirit, we find no substance in the argument advanced on behalf of the appellants that the excise duty payable even by way of Kist is in the nature of a tax or a levy and not leviable under law by the State." 22. In Assistant Excise Commissioner & others V. Issac Peter & others: (1994) 4 SCC 104 it is observed: "26. ........In short, the duty to act fairly is sought to be imported into the contract to modify and alter its terms and to create an obligation upon the State which is not there in the contract. We must confess, we are not aware of any such doctrine of fairness or reasonableness. Nor could the learned counsel bring to our notice any decision laying down such a proposition. Doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. Just as principles of natural justice ensure fair decision where the function is quasi-judicial, the doctrine of fairness is evolved to ensure fair action where the function is administrative. But it can certainly not be invoked to amend, alter or vary the express terms of the contract between the parties. This is so, even if the contract is governed by statutory provisions, i.e., where it is a statutory contract or rather more so. It is one thing to say that a contract every contract must be construed reasonably having regard to its language. But this is not what the licensees say. They seek to create an obligation on the other party to the contract, just because it happens to be the State. They are not prepared to apply the very same rule in converse case, i.e., where the State has abundant supplies and wants the licensees to lift all the stocks. The licensees will undertake no obligation to lift all those stocks even if the State suffers loss. They are not prepared to apply the very same rule in converse case, i.e., where the State has abundant supplies and wants the licensees to lift all the stocks. The licensees will undertake no obligation to lift all those stocks even if the State suffers loss. This one-sided obligation, in modification of express terms of the contract, in the name of duty to act fairly, is what we are unable to appreciate. The decisions cited by the learned counsel for the licensees do not support their proposition. In Dwarkadas Marfatia v. Board of Trustees of the Port of Bombay it Was held that where a public authority is exempted from the operation of a statute like Rent Control Act, it must be presumed that such exemption from the statute is coupled with the duty to act fairly and reasonably. The decision does not say that the terms and conditions of contract can be varied, added or altered by importing the said doctrine. It may be noted that though the said principle was affirmed, no relief was given to the appellant in that case. Shrilekha Vidyarthi v. State of U.P.8 was a case of mass termination of District Government Counsel in the State of U.P. It was a case of termination from a post involving public element. It was a case of nongovernment servant holding a public office, on account of which it was held to be a matter within the public law field. This decision too does not affirm the principle now canvassed by the learned counsel. We are, therefore, of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts. It must be remembered that these contracts are entered into pursuant to public auction, floating of tenders or by negotiation. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. It must be remembered that these contracts are entered into pursuant to public auction, floating of tenders or by negotiation. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. There can be no question of the State power being involved in such contracts. It bears repetition to say that the State does not guarantee profit to the licensees in such contracts. There is no warranty against incurring losses. It is a business for the licensees. Whether they make profit or incur loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more to the State in case they make substantial profits. We reiterate that what we have said hereinabove is in the context of contracts entered into between the State and its citizens pursuant to public auction, floating of tenders or by negotiation. It is not necessary to say more than this for the purpose of these cases. What would be the position in the case of contracts entered into otherwise than by public auction, floating of tenders or negotiation, we need not express any opinion herein." 23. In view whereof the impugned Rule 4 of M.P. Country Spirit Rules, 1995 and Rule 4 (4) of M.P. Distillery Rules, 1995 cannot be held to be ultra vires, the provisions of Act, 1915. Consequently, petition fails and is dismissed. There shall be no order as to costs.