PRAKASH T Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) PETITIONER in first case has challenged the validity of auction proceedings, dated 2 -5 -1986, of Deputy Commissioner (Excise), Bangalore, disposing of right of retail vend of toddy in Bangalore District and provisional acceptance of bid offered by fourth respondent. Petitioners in second case have challenged the validity of provisional acceptance of bid offered by twelfth respondent (who is no other than fourth -respondent in first Writ Petition) and for convenience, hereafter referred to as 'contesting respondent', in respect of retail vend of toddy and arrack at places mentioned in schedule to Petition including Bangalore District.

(2.) THOUGH attack is as against provisional acceptance of bid offered by contesting respondent, they vary in form.

(3.) /8/2014 Page 2 of 16 "1(a) Every intending bidder, shall deposit by way of earnest money a sum equal to one month's rent of the shop or group of shops of the Excise year 1985 -86 in the form of a Demand Draft on a scheduled Bank in favour of the Deputy Commissioner/Excise Commissioner. Provided that in the case of shops which were not in existence in the year 1985 -86 earnest money deposit shall be five hundred rupees for each such shop. (b) Persons who have not made such Earnest Money Deposit shall not be entitled to bid at the auction. (c) The officer receiving such deposits shall issue a receipt for the earnest money deposited. 2. A person disqualified under Rule 7 of the Karnataka Excise (Lease of the Right of Retail Vend of Liquors) Rules, 1969 is not entitled to bid. Intending bidders should produce valid Income Tax Clearance Certificate. 4(b) Names of the persons who have not deposited the earnest money required under condition l(a) above will not be included in the list. (c) After such list is prepared, bids in respect of each shop or group of shops shall be invited. 11. The earnest money or other deposits made under the Karnataka Excise (Lease of Right of Retail Vend of Liquors) Rules 1969, unless forfeited or adjusted shall be refunded to the depositor. 12. On consideration of the records and in the interest of revenue, the State Government may pass an order confirming the disposal of the right of retail vend of Toddy/Arrack or refuse to do so. The orders issued will be forthwith communicated to the person concerned." It is averred that petitioner and other intending bidders went to Sir Puttanna Chetty Town Hall where auction was proposed to be held, to participate and bid for toddy shops in Bangalore District ; petitioner offered demand drafts of Rs. 57,75,000/ - payable at Bangalore to Excise Commissioner drawn from Branches of scheduled Banks situate in Bangalore as well as outside Bangalore, particulars of which are mentioned in Annexure -E produced along with reply statement. But, third respondent refused to accept demand drafts as few of them were not obtained from Bangalore Branches as required by Commissioner's letter, dated 24 -4 -1980 (Annexure -B). Letter reads thus : " - -During the ensuing auction in order to avoid production of fictitious Demand Drafts to the authorities, it is proposed to accept the demand drafts drawn in favour of the Excise Commissioner issued from any of the scheduled Banks situated in Bangalore and wherever the Demand Drafts are drawn in favour of the Deputy Commissioner, such demand drafts should have been obtained from any of the scheduled Banks situated in the concerned Districts. The Deputy Commissioners are advised to check the authenticity of issue of such demand drafts from the concerned Banks in case of any doubt. The above instructions may be followed strictly, Yours faithfully, Sd/ - No. EXE. EXS. 158/85 -86. Office of the Deputy Commissioner (Excise), Bangalore District, Dated : 29 -4 -1986 MEMO Copy of the above is forwarded to the Inspectors of Excise of all the Ranges of Bangalore District, 4/8/2014 Page 3 of 16 for information and needful action. Sd/ - For Deputy Commissioner, (Excise) Bangalore District." 4. Referring to Writ Petitions filed by C.V. Subba Rao and others who made similar grievances, it is stated that apprehending Deputy Commissioners of various Districts are likely to reject demand drafts obtained from Branches other than places in respect of which auction was required to be held they moved this Court for redressal. This Court taking Writ Petition No. 7770 of 1986 out of turn, having regard to urgency, made an interim order, staying the operation of the above letter on 2 -5 -1986 during vacation which is communicated to respondents 2 and 3 through telegram at 10 -20 a.m. -vide order sheet of that case. Similar interim orders are made in Writ petitions Nos. 8064 of 1986 and 8068 to 8080 of 1986. This Court, in addition to staying the operation of said letter, directed respondents to accept demand drafts drawn in favour of Excise Commissioner/ Deputy Commissioner purchased in any of the scheduled Banks by petitioners whenever they participate in public auction of right of retail vend of liquors (toddy and arrack) to be held from 2 -5 -1986 and onwards, pending disposal of those Writ petitions; but, this interim order was not communicated to third respondent -Deputy Commissioner (Excise) before commencement of auction and he conducted auction in conformity with the direction contained in above letter. It is alleged that on production of earnest money deposit of Rs. 57,75,000/ - as three demand drafts worth Rs. 7,75,000/ -were drawn from outside Bangalore Branches, Deputy Commissioner declined to accept his offer pursuant to direction contained in Annexure -B. On exclusion of petitioner and others similarly situate, bid offered by fourth respondent offering to purchase right of vend of toddy for Rs. 52,31,000/ -has been provisionally accepted. Rejection of his offer has resulted in infringement of his right to participate and also loss of revenue to State.