SATYANARAYANA GUPTA Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) It is said that history repeats itself; so unfortunately do, it seems from the facts of the present case, certain Governmental activities which though known and admitted to be productive of nothing but great mischief and though condemned are again revived. We are concerned in this writ petition with the policy of the Government in the matter of granting contracts for ' transportation of State Liquor', a policy recognised bvthe Government to be pernicious but which is nonetheless pursued. Dealing with certain writ petitions which arose out of the grant of contracts for ' transportation of State Liquor' for the year 1967-68, I had described the procedure followed by the Government and commented upon it in the following terms : " These writ petitions tell quite an extraordinary tale, that of businessmen vying with one another to give something for nothing in the course of their business. Every year the Excise Commissioner invites tenders for transporting the ' State Liquor manufactured by indigenous methods' in the Government Distilleries at Narayanaguda and Kamareddy to the licensed depots, storing it therein and issuing it therefrom to the licensed liquor shops in all the Telangana Districts. Separte tenders are invited for each District. The persons securing the contracts have to provide the necessary wooden barreles and equipment, and transport the liquor from the distilleries to the depots at various places in the districts at their costs to arrange for the storage of liquor at the depots and the issue from the depots, of the liquor, to licensed liquor shops, at the costs of the contractors themselves. The contractor for each district has to transport a minimum guaranteed quantity the minimum varying from district to district. The tenders are invariably of a fantastic nature. They always mention that the tenderers are prepared to transport the liquor and do all the other onerous tasks if they are paid at the rate of one paisa or a fraction of a paisa for several thousands of litres of liquor. The persons securing the contracts receive no other lawful remuneration for their work except at this fantastic rate of a paisa for some thousands of litres of liquor. Since the contractors are not in this business with the charitable object of supplying liquor to those that are thirsty for it in the districts, it follows that such gains as they make must only be by employing illegitimate means. When I questioned the Government Pleader and the learned Counsel for the petitioners in these Writ Petitions, none of them was able to suggest any legitimate method by which the contractors could earn more than the paisa mentioned in the tender. That the contractors must of necessity be employing illegitimate methods must be apparent to every one connected with the liquor transport contracts including the Excise Commissioner and the Government. What is distressing is that this combination of a huge joke and colossal fraud is carried on under the auspices of the Government and its officers. On the very first day of the hearing of these writ petitions I desired the Government Pleader to communicate and explain matters to the Government and I was glad to be told towards the end of the hearing that the Government is examining the position with a vitw to put an end to the present practice." The tale of fantasy has not reached its end yet. In this madness and chaos of incredible offers, the Excise Commissioner and the Government have tried to evolve a method and a rule if it can be so called, since it is just as fantastic. Logic is not the strong point of the rule, but nonetheless it is a rule which the authorities are apparently following and it has the merit that it prevents any arbitrary exercise of discretion. The rule is thus :- "All tenders which if accepted would require the Government to make a payment of less than one paisa are rejected. Out of the remaining tenders, that of the person who offers to transport the maximum amount for one paisa will be accepted. I may explain this by an illustration. Thirty thousand litres is the minimum guaranteed quantity for a district. A offers to transport 40 thousand litres for one paisa. B offers to transport 20 thousand litres for one paisa and G offers to transport 25 thousand litres for one paisa. A's offer if accepted will require the Governmcnt to pay him 30/40 paisa, that is, less than a paisa for transporting the minimum guaranteed quantity. His offer will therefore be rejected. .B'soffer and C's offer will require the Government to pay them 30/20 paisa and 30/25 paisa respectively. Since C's offer is more advantageous it will be accepted."

(2.) The Abkari year 1968-69 is to commence on 1st October, 1968. Tenders have once more been invited and tenders have once more been accepted following the same fantastic and objectionable procedure as before. The 3rd respondent in W.P. No. 3402 of 1968 whose bid has been accepted for Warangal District has agreed to transport the whole ration of 6,30,789 litres for one paisa. The 3rd respondent in W.P.No. 3404 of 1968 whose bid has been accepted for Khammam District has agreed to transport the entire ration of 8,38,723 litres for one paisa. The 3rd respondent in W.P.No. 3405 of 1968 whose bid has been accepted for Nizamabad District has agreed to transport the whole ration of 5,70,143 litres for one paisa. The 3rd respondent in W.P.No. 3403 of 1968 whose bid has been accepted for Nalgonda District has agreed to transport at the rate of one paisa for one litre, the total ration to be transported being 5,71,795, litres. The 3rd respondent in W.P. No. 3406 of 1968 whose bid has been accepted for Karimnagar District has agreed to transport at the rate of one litre for two paise, the whole ration of liquor to be transported being 1,77,016 litres. It is stated in the Affidavits filed in support of the writ petitions and it is not contradicted, that every intending bidder at the auction held by the Excise Commissioner of the right to transport liquor has to deposit a sum of Rs. 11,000 in order to obtain a single tender form. He has to deposit an additional sum of Rs. 9,000 if it is accepted. Thereafter he has to equip himself with the necessary galvanised barrels and arrange for lorries for transportation of the liquor. He has also to arrange for the distribution of liquor at the depots by employing suitable staff. The paraphernalia required to transport liquor is estimated by the petitioners to cost about fifty to sixty thousand rupees. The depots in each district are distributed throughout the district and the number of depots varies from seven being the lowest in the case of Nizamabad District to 16 being the highest in the case of Mahabubnagar District. The average rent for each depot is estimated at Rs. 50 per month and the salary of each depot manager is also estimated at Rs. 50 per month. In addition licence fee at the rate of Rs. 15 per depot per year has to be paid. The cost of transportation naturally varies according to the distance and in the case of Nalgonda it is estimated at Rs. 24,000 for six lakhs litres. Having regard to the large investment to be made, the huge cost of transportation and the additional cost of maintenance of depots, there can be little doubt that even the bids of one and two paise per litre are mere makebelieve bids and just as incredible as others.

(3.) Each of the petitioners in the Writ Petitions has, in his bid, offered to transport liquor at the rate of 7 paise per litre, attempt being to make the bid appear as reasonable as possible having regard to the cost involved, so that he may not be accused of trying to make illegal gains. In each of the writ petitions it is prayed that the order of the Excise Commissioner accepting the tenders mentioned above may be quashed and that the Excise Commissioner may be directed to consider ' reasonable tenders' only. Sri M.K. Nambiar who led the argument for the petitioners contends that the action of the Excise Commissioner in considering and accepting unreasonable bids which must inevitably lead to unlawful activites on the part of those whose bids bave been accepted must be considered to be ultra vires of the powers of the Commissioner since none vested with a statutory power can exercise the power in a manner so as to ' further an illegal adventure.' He contends that the acceptance of these bids has reduced the statute, the rule? and the whole process of awarding contracts to a mockery. On the other hand the learned Government Pleader submits that the Government like other persons has the right to accept the bid which is to the best advantage of the Government and the fact that such acceptance of bids is likely to lead to evil consequences is not the concern of the Government. He also submits that the petitioners have no right which they can enforce in an application under Article 226. He further submits that interference of this Court at this stage when the entire process has been gone through will result in chaos since the Government is still considering what other method may conveniently be adopted and it may take some time for the Government to arrive at a decision as it is awaiting information from other States. It is also submitted that the petitioners have an alternate remedy by way of a revision to the Government and the writ petitions should therefore be dismissed.