UNION TERRITORY OF PONDICHERRY Vs. P V SURESH

JUDGEMENT

(1.) The Union of India represented by the Union territory of Pondicherry is the appellant in these appeals which are directed against the judgment of a Division bench of Madras High court in a batch of writ petitions filed by the respondents, arrack licensees of Pondicherry and Mahe. Civil Nos. 1543-1630 of 1984 pertain to Pondicherry territory while Civil Nos. 693 to 695 and 695-A pertain to Mahe territory. In the Union territories of Pondicherry, Mahe and Karaikal, arrack licences are granted by way of auction. For the excise year 1981-82 (commencing from July 1, 198 1/06/1982 auctions were conducted in June 1981. The writ petitioners were the highest bidders in respect of respective shops. They made the necessary deposits and obtained permits to commence their business with effect from 1/07/1981. The arrack licensees from Pondicherry territory also deposited the three months' rental at the inception of the excise year as required by the rules. They drew supplies from the government depots and carried on their business for a period of three months. Thereafter they approached the High court at Madras by way of writ petitions for issuance of an appropriate writ order or direction directing the respondents in the writ petition to forbear from collecting the 'kist' amount in respect of each of the shops and for directing the respondents further to supply the quantity of arrack at the rate at which it was supplied during the previous excise year (i. e. 1980-81.

(2.) So far as the arrack licensees from Mahe area are concerned, they did not deposit the three months' rental as required by the rules. They drew the initial supply of arrack, did business for 15 days and thereafter abandoned the business. They too approached the Madras High court by way of writ petitions for a direction to the respondents therein to issue to the petitioners the full quantity of arrack as was being supplied to them during the previous excise year, failing which to reduce the 'kist' payable by the petitioners proportionately.

(3.) According to the law in force at the relevant time in the said Union territories, the arrack licensees were obliged to draw their supplies only and exclusively from the government source. They were prohibited from drawing their supplies from any other source. Further, they were also obliged to sell the arrack at the price fixed by the government. The government had its own factories where the arrack was manufactured, which was distributed among the several shops in the Union territories. For the previous excise year i. e. , for 1980-81, the supplies were made at the rate of one decalitre per day for an annual revenue of Rs. 18,000. 00. In other words, if the annual bid in respect of an arrack shop was Rs. 18,000. 00, such shop was entitled to and was supplied arrack at the rate of one decalitre per day. For the excise year 198081, however, the authorities prescribed the ratio of one decalitre for an annual bid of Rs. 40,000. 00, which meant that the quantum of supplies to which each arrack shop was entitled to went down for the year 1981-82 compared with the previous year i. e. , 1980-81. On the representation of the licensees,the said ratio was altered to one decalitre per day for an annual bid of Rs. 34,000. 00 on 27/10/1981. What is important to notice is that the government did not notify the said ratio at the time of conducting the auctions for the excise year 1981-82. It appears that it was not doing so during any of those years, which defect, if we can call it one, is said to have been remedied in the later years. It is this defect in the system of auction that has led to the crop of writ petitions in the Madras High court, from which these appeals arise. In many other States, the minimum guarantee quota which the government undertakes to supply and which the licensee is equally under an obligation to lift, is specified even at the time of the auctions. Where this is done, there is no room for the controversy of the type arising herein.