STATE OF KERALA Vs. V NARAYANA PILLAI

JUDGEMENT

(1.) The respondents are the legal representatives of one Narayana Pillai who was the successful bidder for privilege of vending 12 arrack shops in Kunnathur Range. The auction for the year, commencing 1-4-1981 to 31-3-1982, was conducted by the Assistant Excise Commissioner on 27th March, 1981 in accordance with Section 18-A of the Abkari Act read with The Kerala Abkari Shops (Disposal in Auction) Rules, 1974. The predecessor-in-interest of the respondents on 27-3-1981 itself deposited 30% of the auction money, amounting to Rs. 8,70,300/-. He also furnished a Solvency Certificate to the extent of 20% amounting to Rs. 5,80,200/-. The temporary agreement, as envisaged by Rule 5(10) of the 1974 Rules, was executed between the parties. The successful bidder then waited for receiving confirmation of the sale from the Board of Revenue. He is reported to have sent a notice on 6-4-1981 informing the appellants that since the auction not been confirmed till then, he would not be, now interested in running the arrack shops for which he had bid on 27-3-1981. The auction sale appears to have been confirmed by the Board of Revenue on 7-5-1981 and an intimation of the same (not personally served on the bidder) is alleged to have been affixed at the place of his residence on 11-5-1981. Since, no agreement was executed by the highest bidder, whose offer had been confirmed on 7-5-1981, the shops in question were re-auctioned on 18-2-1982 by the appellants. A sale notice was issued on 12-10-1982 for sale of the immovable property of the predecessor-in-interest of the respondents, for recovery of the alleged loss suffered by the appellants on re-sale of the shops. The respondent at this stage filed a writ petition before the High Court challenging the sale notice. He also prayed for a declaration that the appellants were not entitled to enforce the penal provisions against him and had no right to appropriate the security deposit made by him. A specific prayer for refund of the security amount and return of the Solvency Certificate was made, though, challenge was also laid to the validity of certain Rules of The Kerala Abkari Shops (Disposal in Auction) Rules, 1974 in the petition. The writ petition was allowed by a Division Bench of the High Court of Kerala on 27-11-1992. By special leave the appellant-State of Kerala is before us.

(2.) Rule 5(13) of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 provides that no sale shall be deemed final as against the Government unless confirmed by the Board of Revenue, who shall be at liberty to accept or reject any bid for valid reason to be recorded in writing. Rule 5(14) provides that every confirmation or rejection with reasons therefore of the sale shall be communicated to the auction purchaser in writing as soon as possible.

(3.) Admittedly, in the present case the auction period commenced on 1st April, 1981. The auction sale had taken place on 27th March, 1981 but confirmation of sale, however, was not made by the Board of Revenue till 7-5-1981. It was not communicated to the successful bidder till 11-5-1981. The mandate of Rule 5(14) to the effect that the rejection or confirmation shall be conveyed "as soon as possible" was obviously respected in its breach. The respondent, pleaded justification, in the admitted facts of the case to withdraw because of the delay in confirmation of the sale. Before the High Court it was, however, pleaded on behalf of the appellants that confirmation of sale had been made 'without any delay.' The High Court wanted the file relating to confirmation of sale to be produced before it to satisfy itself about the cause of delay in confirming the sale. The High Court observes:-