STATE Vs. BOARD OF REVENUE

JUDGEMENT

(1.) L . This is an application under Articles 226 and 227 of the Constitution by the State of Madhya Pradesh for quashing a decision, dated 27th April 1963 of the Board of Revenue setting aside an order of the Excise Commissioner by which he refused to confirm the bid of Rs. 35,001 offered by the respondent No.2, Mishrilal, at an auction sale of a liquor shop at Shivpuri, and directed a re auction of the shop. While setting aside the order of the Excise Commissioner, the Board of Revenue directed the Commissioner to give an opportunity of hearing to the respondent - Mishrilal before taking any decision whether the sale in favour of the respondent -Mishrilal should or should not be confirmed,

(2.) THE material facts are that the auction of liquor shops of Shivpuri city was held by the Collector and the District Excise Officer on 4th and 5th February 1963. The auction sale was subject to the conditions which were actually read out at the time of the auction and made known to all the bidders present at the auction. In the notification, which was issued by the Excise Commissioner publicising the dates of the auction of the shops for the year 1963 -64 at Shivpuri, it was specifically mentioned that the auction would be subject to the sanction of the Excise Commissioner if the bid offered in respect of a shop exceeded Rs.30,000 or if a shop fetched in the previous year a licence fee exceeding that amount. As the bid made by Mishrilal exceeded Rs. 30,000, the auction -sale papers were submitted to the Excise Commissioner by the District Excise Officer, Shivpuri, along with the recommendation of the Collector. The Collector gave the opinion that the respondent -Mishrilal's bid should not be accepted as his conduct as excise contractor in 1962 -63 was not satisfactory and his bid, though highest at the auction held on 4th 5th February 1963, was low and that if the liquor shop were to be re -auctioned it was bound to fetch a higher price. The Excise Commissioner, in the light of the report made by the Collector and after comparing the sale price obtained for the shop in question during the previous years, came to the conclusion that the respondent -Mishrilal's bid should not be accepted and that the shop should be re -auctioned. Mishrilal then preferred an appeal before the Board of Revenue against the order of the Excise Commissioner refusing to confirm the sale in his favour. 3. The learned President of the Board of Revenue, relying on Nanhibai Vs. Excise Commr., AIR 1963 M.P. 352, held that the auction sale was subject to the sanction of the Excise Commissioner when the petitioner's bid exceeded Rs. 30,000, and that it was no doubt within the power of the Excise Commissioner to accept or refuse to accept the bid offered by Mishrilal. He, however, held that the order of the Excise Commissioner refusing to confirm the sale in favour of the respondent No.2 and directing a fresh auction was vitiated for the reason that the said respondent had not been heard by the Excise Commissioner before making the order that he did. In support of this conclusion, the learned President relied on the decisions of the Supreme Court in Board of High School Vs. Ghanshyam, AIR 1962 S.C. 1110, and Union of India Vs. T.R. Verma. AIR 1957 S.C. 882 and a decision of this Court in Dattatraya Vs. J.S. Burhanpur. 1961 MPLJ 915. 4. Shri Bhave, learned Government Advocate for the State, contended that in considering the question whether an excise auction sale which required sanction should or should not he confirmed, the Excise Commissioner was not under any obligation to act judicially or quasi. judicially at any stage; that the question of confirmation of sale or refusal to confirm an order of suction of a liquor shop was purely an administrative matter; that the order of the Excise Commissioner refusing to accept the bid offered by the respondent Mishrilal and directing re -auction of the liquor shop was thus an administrative order; and that being so, the Excise Commissioner was not bound to give a hearing to the respondent No.2 before passing an order rejecting his bid and directing a reauction of the excise shop. On the other hand, Shri Deoras, learned counsel appearing for the respondent Mishrilal, relying on certain observations of the Supreme Court in Roshanlal Vs. Ishwar Dass, AIR 1962 SC 646; Udit Narain Singh Vs. Board of Revenue, AIR 1963 SC 786, and the decision in Board of High School Vs. Ghanshyam, AIR 1962 SC 1110, submitted that in deciding the question of acceptance or refusal of a bid made at an auction, exceeding the limit of Rs 30,000 the Excise Commissioner discharged a quasi -judicial function and that, therefore, on the principles of natural justice the respondent Mishrilal was entitled to be heard before the Excise Commissioner made the order of rejecting his bid. 5. In our judgment, the contention advanced on behalf of the petitioner -State must be given effect to. It is well settled that the rule of natural justice that a person whose rights are sought to be affected by any action is entitled to a notice and a hearing is attracted only where the authority making the order act, judicially or quasi -judicially. There is no obligation to hear the party unless the function is first held to be judicial or quasi -judicial. Again, this rule about hearing does not apply where the power to make the order is exercised subjectively. In Kishan Chand Vs. Commr. of Police, AIR 1961 SC 705, the Supreme Court referred to Express Newspaper Ltd. Vs. Union of India, AIR 1958 SC 578, and pointed out that: -