NEEL KANTH AND CO Vs. STATE OF HARYANA

JUDGEMENT

(1.) Challenge in this petition under Articles 226/227 of the Constitution of India is to the grant of Country Liquor Licence L-14-A and Indian Made Foreign Liquor Licence L-2 to respondent No. 4 in the auction that took place on 8.3.1999, in the sum of Rs. 12.25 crores for the year 1999-2000 in respect of liquor vends of Kundli Group, District Sonepat.

(2.) Case of the petitioner is that the liquor vends of Sonepat district were auctioned on 8.3.1999 at Panipat by respondent No. 3. Prior to commencement of auction on that date, terms and conditions of auction were announced. Regarding security and instalments, it was stipulated that during 1999-2000, the successful bidder shall have to deposit 16-2/3% of the bid money by way of security. Out of this amount 5% shall be payable at the fall of the hammer and remaining 11-2/3% within 10 days from the date of auction, or 31.3.1999, whichever is earlier. In order to check speculative bidding, the Presiding Officer was authorised to demand 1/3rd of the total bid money in cash or by the bank draft as security at the time of the auction in case the bid exceeds 35% of the reserve price. The petitioner was interested to bid at the auction for Kundli Group. Reserve price for Kundli Group was fixed at 9.90 crores. M/s G.R.K. and Co. also participated in auction of vends of Kundli Group. Its last bid was Rs. 12.20 crores. Thereafter respondent No. 4, Bhagirath Lal and Co. gave a bid of 12.25 crores. The petitioner raised the amount and gave the bid of Rs. 12.26 crores. As soon as the petitioner gave the bid of 12.26 crores, respondent No. 3 intervened and announced that the bidder giving the bid above Rs. 12.35 crores will have to deposit 1/3rd of the total bid money in cash/bank draft or by way of pay order as security. This announcement was followed by protests by many bidders, as imposition of the condition to deposit 1/3rd of the total bid money beyond the bid of Rs. 12.25 crores was contrary to the policy of the Government and the condition had been imposed arbitrarily. Respondent No. 3 could impose conditions in terms of the announcement as noticed above only, if the bid had gone beyond 35% of the reserve price fixed by the Government for the Kundli Group which, as already noticed, was Rs. 9.90 crores. Case of the petitioner is that the condition of 1/3rd deposit could be imposed in case the bid amount had exceeded Rs. 13,36,50,000/-, Rs. 9.90 crores being the reserve price. Respondent No. 3 imposed the condition arbitrarily when the bid reached Rs. 12.25 crores. Since the petitioner was not in a position to deposit the entire amount as announced, it was not allowed to bid and respondent No. 4 was declared as successful bidder in haste with ulterior motive. Further case of the petitioner is that respondent No. 3 did hot watch the interest of the State and he in fact caused loss to the State exchequer by imposing the condition at a point of time which was not the appropriate stage and in fact was against the terms and conditions announced at the time of the auction and the excise policy of the State Government. The petitioner has, therefore, been prejudiced and respondent No. 4 has been favoured.

(3.) Respondent No. 3 ultimately declared respondent No. 4 as the successful bidder and recommended its case for the grant of licence in its favour, which was ultimately granted on 18.3.1999. A legal notice was served upon respondent No. 2 by a partner of M/s G.R.K. and Co. Hissar. A similar notice dated 12.3.1999 was also served upon respondent No. 2 by the petitioner seeking the necessary relief but the same has not been considered by the said respondent. Copies' of notices dated 8.3.1999 and 12.3.1999 are annexed as Annexure P-1 and P-2 respectively, with the writ petition. Not only this, the petitioner gave a telegram dated 17.3.1999 to respondent No. 2 but it has not been duly considered. The petitioner offered to pay 10% over and above the bid of respondent No. 4, i.e., 10% over and above Rs. 12.25 crores. A fax message was also sent in that behalf. The petitioner was ready with 10% of the amount of the proposed offer. He in anticipation got prepared bank drafts also. The respondents have acted in violation of the policy of the State Government in not only imposing the condition of deposit of 1/3rd in cash after the bid of 12.25 crores but they have also erred in grouping the vends as well. The action of respondent No. 3 to declare respondent No. 4 as successful bidder of the country liquor and Indian Made Foreign Liquor vends of the group titled as "Kundli Group" of Sonepat is illegal and liable to be set aside, the condition imposed by respondent No. 3 that the person bidding above Rs. 12.25 crores would have to deposit 1/3rd of the total amount, being illegal and the bid of the petitioner of Rs. 12.26 crores having not been accepted. The condition imposed was against the terms of auction as this condition could be imposed only if the bid exceeded 35% of the reserve price. It is also brought out that in respect of certain other groups, the condition of 1/3rd deposit was not imposed though the increase in auction in respect of those groups was as high as 82%, 53% and 42%. Hence this petition challenging the action of the official respondents in granting licence in favour of respondent No. 4, and refusing to consider the offer of the petitioner of 10% over and above the amount for which the licence has been granted in favour of respondent No. 4.