SAVEEN KUMAR SHETTY Vs. STATE OFR KARNATAKA

JUDGEMENT

(1.) THE appellant participated in the auction for the retail vend of arrack for the year 1999-2000 in respect of 272 shops of Mangalore Taluk. At the auction, he was the highest bidder. On acceptance of the bid, one month's rental was deposited partly by way of adjustment of Earnest money Deposit. However, after the bid was confirmed, he failed to furnish security for an amount equivalent to 3 l/10th of monthly rent in the form of cash deposit or Government securities or irrevocable guarantee of a schedule bank as contemplated by Rule 17 (l) (b ). The time for furnishing security was 15 days from the date of confirmation and under the rules he was required to enter into an agreement simultaneously. But, as already stated, the appellant failed to furnish such security. Nevertheless, by virtue of the general instructions issued by the Excise commissioner, temporary licences were issued to the appellant from 1-7-1999 to 15-8-1999. Even thereafter, the appellant was permitted to run the shops on payment of kist amount daily. While so, by an order dated 14-10-1999, the Government on the basis of the report of the excise commissioner, in exercise of power under Rule 18 of the Karnataka Excise (Lease of the Right of Retail Vend of Liquors) Rules, cancelled the order of confirmation. By the same order, the deposit equivalent to one month's rental made by the appellant was forfeited to the State. The Government directed re-auction of the right to vend arrack for Mangalore Taluk and further directed recovery of the loss if any, sustained on account of such re-auction. It is common ground that in the re-auction, the State did not suffer any loss inasmuch as much more amount had been realised. The said order inter alia forfeiting the deposit was challenged by the appellant by filing W. P. No. 3242 of 2000. Learned Single Judge having noted the contention that the Government did not suffer any financial loss on account of the appellant's default, observed as follows:

(2.) THE said writ petition was accordingly disposed of. Pursuant to the order of this Court, the appellant made a representation to the Government. The Government by an endorsement dated 1-6-2000, refused to refund the deposit. After referring to Rule 18, it is merely stated in the said 'endorsement' that the petitioner failed to perform his part of the obligation as required by statutory rules. The additional reason given is that Rule 20 does not provide for refund/adjustment of the forfeited deposit. This endorsement has been challenged in W. P. No. 19077 of 2000 and the relief of refund of deposit was sought for. Learned Single judge held that on account of the continued default on the part of the appellant to furnish security as per Rule 17-B, the Government was justified in forfeiting the deposit under the rules as a result of cancellation of confirmation of bid. Learned Single Judge remarked that the

(3.) RULE 18 which is the provision under which the forfeiture has been effected reads as follows: