ANJANAPPA AND CO Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) These batches of Writ Petitions are disposed of by the following common order. The petitioners are all Excise Contractors. They are aggrieved by the amendment made to Rule 15 of the Karnataka Excise Licences(General Conditions) Rules, 1967, (hereinafter referred to as the General Conditions Rules). The amendment is effected by a Notification gazetted on 25 6 1983 which came into effect from 1-7-1983. The petitioners, in the meanwhile, had become successful bidders at the auctions held in various parts of the State of Karnataka in May or June, 1983. Prior to the coming into force of the amendment to Rule 15 of the General Conditions Rules, 1967, the rale of interest payable for rent not paid before the stipulated date namely, 10th of a month was liable to be charged with interest at 6 per cent. By the amendment effected, the rate of interest in Rule 15 of the General Conditions Rules has been raised to 18 per cent per annum. Therefore, the grievance of the petitioners that they are adversely hit by the amendment brought about; the raising of the rate of interest from 6 1/4 to 18 per cent is arbitrary, excessive and without any reason. It. is also contended that the Government under the Rules and the terms of the agreement entered into with each of the contractors has substantially large deposits with it which do not carry interest and therefore it is arbitrary and unfair as well as discriminatory to charge interest on the rents that may become due and payable beyond dates specified in Rule 15 of the General Conditions Rules.

(2.) A further contention pleaded and urged is that the Rule is made in violation of the mandatory requirements of Sub-sections (3) and (4) of Section 71 of the Karnataka Excise Act, 1965 (hereinafter referred to as the Act).

(3.) A number of Counsel have addressed arguments. The above contentions expanded by them may be summarised in the following manner. The excise year under the General Conditions Rules is 1st July of a given calendar year to 30th June of the succeeding calendar year. The auctions are generally held in the month of May or even earlier, but generally before the commencement of the new excise year. In accordance with the relevant rules, the auctions held in various places require confirmation by the Government and it is only after confirmation that a lease is executed incorporating certain statutory conditions, one of which is the payment of rent in accordance with Rule 15 of the General Conditions Rules. In this background, it is urged that the petitioners are all excise contractors having been successful bidders at the auctions held prior to 1st July 1983. They were led to believe that in the event of any one of them committing default in the payment of rent in accordance with Rule 15 of the General Conditions Rules, he was liable to pay interest on the rent due only at the rate of 6 1/4 per cent per annum and therefore the Government is estopped in making a rule which came into force only on 1st July 1983 enhancing the rate of interest to 18 per cent that came into force well after the auctions which as contended by them is arbitrary, excessive and almost assumes the character of being expropriatory. It is further urged, therefore, the Rule may be applicable despite having come into force on 1st July, 1983 only to leases executed in respect of excise contracts for the year 1984-85 and not for the excise year 1983-84.