STATE OF UTTAR PRADESH Vs. KISHORI LAL MINOCHA

JUDGEMENT

(1.) ):- This appeal by certificate is from a judgment of the Allahabad High Court, Lucknow Bench, dismissing the suit instituted by the appellant, State of Uttar Pradesh, for recovery of a sum of Rs. 20,100 from the respondent. The facts stated in the plaint on which the claim is based are these. The annual 'excise auctions; for the year 1951-52 for Faizabad district were held at Faizabad on February 22, 1951 'under the Excise Rules'. The respondent offered the highest bid of Rs. 73,000 and Rs. 48,000 respectively as fees for two groups of country liquor shops but as he did not deposit 1/6th of the aforesaid sum on conclusion of the sales as required under the Excise Rules, the two groups of shops had to be sold again on March 30, 1951. The resale fetched respectively Rs. 65,700 and Rs. 35,200 for these two groups of country liquor shops. According to the State of Uttar Pradesh it suffered a total loss of Rs. 20,100, which is the difference between what the respondent had offered and the sum for which the shops were later sold, and the respondent was liable to compensate the loss. The suit was decreed by the trial court. On appeal the High Court dismissed the suit on the view that there was no valid contract which could be enforced by the plaintiff as the requirements of Article 299 (1) of the Constitution had not been complied with. We are also of the view that the suit must be dismissed but for a slightly different reason, in our opinion there was no concluded contract between the parties, nor was there any statutory rule permitting recovery of the deficiency on re-sale from the respondent.

(2.) The sale proclamation which is said to have contained the conditions of sale was not produced. The Assistant Excise Commissioner (P. W. 1) in his testimony referred to Rule 357 of the Excise Manual. The relevant part of the rule is an follows.:

(3.) The question that remains to be answered is, even if there was no statutory provision, whether there was a conceded contract between the appellant and the respondent under which the respondent was liable to pay Rs. 20,100 which represents the difference between the highest bid at the first sale and the price fetched at the re-sale. The sale proclamation containing the conditions of sale has not been produced. Assuming that the different clauses of Rule 357 barring the last part of the 5th clause embody the conditions of sale, it is clear from the 2nd clause that in the absence of the final sanction of the Excise Commissioner, the bid cannot be said to have been finally accepted. It is not claimed by the appellant that the bid offered by the respondent was sanctioned by the Excise Commissioner. There was thus no concluded contract between the parties to make the respondent liable for the alleged loss. The point appears to have been decided by this court in Union of India v. Bhimsen Walaiti Ram, (1970) 2 SCR 594. This was a case of an auction for the sale of licence for a country liquor shop in Delhi for the year 1949-50. Clause 33 of the conditions of sale provided inter alia : 'All final bids will be made subject to the confirmation by the Chief Commissioner who may reject any bid without assigning any reasons'. This condition is similar to cl. 2 of Rule 357 in the instant case. Ramaswami J. speaking for the court in Bhimsen's case observed: