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Sowcar T. Thimmappa and Sons and ors. Vs. the State of Karnataka and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Constitution
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. Nos. 5093, 5239 and 5240 of 1977
Judge
Reported inAIR1978Kant17; 1977(2)KarLJ416
ActsConstitution of India - Articles 14, 19(1), 32, 226, 226(1), 261 and 320(3); Karnataka Excise (Lease of the Right of Retail Vend of Liquors) Rules, 1969 - Rules 3, 16, 17, 18 and 18(2); Constitution of India (42nd Amendment) - Article 226(1); Karnataka Excise Act; Karnataka Excise Rules
AppellantSowcar T. Thimmappa and Sons and ors.
RespondentThe State of Karnataka and ors.
Appellant AdvocateH.B. Datar, Adv. for ;K.S. Desai, Adv. and ;K.A. Swami, Adv.
Respondent AdvocateR.N. Byra Reddy, Adv.-General, ;A.M. Farooq and ;T.S. Pai, Advs.
Excerpt:
- section 24: [anand byrareddy, j] application under section 24 for maintenance - marriage performed as per the provisions of the portuguese civil code application filed under section 24 of the hindu marriage act for maintenance by wife before the family court at belgaum objections by the petitioner/husband with regard to jurisdiction of the family court at belgaum to entertain the application - rejection of objections - challenge to question whether the portuguese family law or hindu law would be applicable to the parties and if the portuguese family law is applicable, which is the court having jurisdiction to decide the matter - held, there is no dispute that the parties were married according to the portuguese family law, that is applicable within the state of goa, and had set up.....order1. these three writ petitions under article 226(1)(b) and (c) of the constitution of india (42nd amendment) are by the petitioners who are excise contractors and who had been given lease of right of retail vend of arrack and toddy for the year 1976-77 in different taluks in shimoga, chickmagalur and chitradurga districts, seeking a writ of certiorari for quashing the order passed by the 1st respondent in h.d. 65 edc 77 dated 24th june, 1977 and also for the issue of a writ of mandamus in w. p. nos. 5239 and 5240 of 1977 regarding the disposal of the lease of right of vend of arrak and toddy afresh in those taluks.2. these writ petitions raise common questions of facts and law and, therefore, they are heard together and disposed of by a common order.3. in w. p. no. 5093/1977 the case.....
Judgment:
ORDER

1. These three writ petitions under Article 226(1)(b) and (c) of the Constitution of India (42nd Amendment) are by the petitioners who are excise contractors and who had been given lease of right of retail vend of Arrack and Toddy for the year 1976-77 in different taluks in Shimoga, Chickmagalur and Chitradurga Districts, seeking a writ of certiorari for quashing the order passed by the 1st respondent in H.D. 65 EDC 77 dated 24th June, 1977 and also for the issue of a writ of mandamus in W. P. Nos. 5239 and 5240 of 1977 regarding the disposal of the lease of right of vend of Arrak and Toddy afresh in those taluks.

2. These writ petitions raise common questions of facts and law and, therefore, they are heard together and disposed of by a common order.

3. In W. P. No. 5093/1977 the case of the petitioner is that he had been given the lease of right of retail vend of Arrak in the year 1976-77 by the Deputy Commissioner, Shimoga, for Rs. 95,100/- towards the monthly rent of lease to vend arrak in the shops located in Thirthiahally taluk, Shimoga District. For the year 1977-78 auction was held in respect of arrak shops in Thirthahally taluk and the 6th respondent was the highest bidder. The State Government confirmed the disposal of retail vend of liquors by him by its order No. 65 EDC 77 dated 26-3-1977. But the 6th respondent failed to comply with the provisions of Rules 16 and 17 of the Karnataka Excise (Lease of the Right of Retail Vend of Liquors) Rules, 1969 (to be hereinafter called the Rules of 1969). Therefore, the 1st respondent passed an order in HD 65 EDC '77 dated 16-6-1977 under Rule 18 of the 1969 Rules, cancelling the disposal of the right of retail vend of liquor by the 6th respondent and the confirmation thereof, ordering that the deposit made be forfeited and directed the said right of retail vend of liquors be disposed of afresh as per rules and making liable the 6th respondent for the loss if any sustained by the 1st respondent on account of the fresh disposal. As a consequence it is necessary under the Rule that the right of retail vend of liquors is required to be disposed of afresh in such manner as the State Government directs and till such disposal is made and fresh licences are granted the petitioner has a right to continue, being a previous licensee in respect of the same shops and under proviso to Rule 18 of 1969 Rules he could also participate in the bid and that he has every chance of becoming a licensee. The 1st respondent amended the Rule 18 of 1969 Rules by incorporating the words 'may be cancelled by Government at its discretion and if it is so cancelled the deposit made by such person' shall be and shall be deemed to have been substituted with effect from 1st Jan. 1977, It is pleaded that the amended Rule 18, has no application to the facts of this case and the petitioner has got right to continue as lessee under the proviso to Rule 18 of 1969 Rules and that the impugned order was passed without the petitioner being heard. Therefore, he has sought for the issue of a writ of certiorari quashing the order passed by the 1st respondent in HD 65 EDC '77 dated 24-6-1977 at Exhibit 'E' and also for issue of a writ of mandamus restraining the 1st respondent from proceeding any further in pursuance of the above order with regard to the disposal of the lease of the right of retail vend of arrack in Thirthahally in Shimoga District.

4. In W. P. Nos. 5239 and 5240 of 1977, the case of the petitioners is that they were the highest bidders in the auction sale held for the year 1976-77 for the lease of retail vend of toddy and their bids as accepted and confirmed by the 1st respondent. Auction was held for the year 1977-78 in respect of toddy shops in Kadur taluk and Davanagere, Harihar and Holalkere taluks. The 4th respondent was the highest bidder. The 4th respondent's bid was accepted and confirmed by the 1st respondent. The 4th respondent failed to comply with the requirements of Rules 16 and 17 of 1969 Rules and, therefore, the disposal of the right of retail vend of liquor in favour of the 4th respondent was required to be cancelled by the 1st respondent. But the 1st respondent did not act under Rule 18 of 1969 Rules, but amended Rule No. 18, and by virtue of provisions of Rule 18 ratified the belated acceptance of 1 month's deposit of the bid amount and Bank guarantee for 3 months.

5. The plea of the petitioners is that their right to continue the vend of toddy under the old license until a fresh disposal of that right under the proviso to Rule 18 has been violated by the amendment of Rule 18 promulgated by the 1st respondent. Therefore, the petitioners have sought for the issue of a writ in the nature of mandamus to the 1st respondent to cancel the lease in favour of the 4th respondent end to hold fresh auction of right of retail vend of toddy in the taluks of Kadur, Davanagere, Harihar and Holalkere.

6. The contentions urged on behalf of the petitioners are:

(1) That they had e legal right under the proviso to unamended Rule 18 of 1969 Rules for continuance of their previous licence of the right of retail vend of liquors till fresh disposal of such right is made and fresh licenses are granted.

(2) When the bidders viz., 6th and the 4th respondents failed to comply with the provisions of Rules 16 and 17 of 3969 Rules, the 1st respondent was bound under unamended Rule 18 to cancel the disposal of the right of retail vend of liquors.

(3) In that event the petitioners had every chance to bid in the auction sale and secure the right to vend liquor.

(4) The amended Rule 18, is not applicable when once the Government acted under unamended Rule 18 and cancelled the acceptance and confirmation of the right in favour of the 6th respondent in W. P. No. 5093 of 1977.

7. The main contentions urged on behalf of the respondents are: (1) that the petitioners had no legal right under the proviso to Rule 18 to continue to vend liquors and it was within the discretion of the Deputy Commissioner, whether or not to continue license of the petitioners in respect of the same shop or shops.

(2) That the petitioners have no locus standi to file these writ petitions under Article 226(1)(b) and (c) of the Constitution of India, since there is no contravention of any Rule resulting in injury of a substantial nature or substantial failure of justice.

(3) That the Government is empowered under the amended Rule 18 of 1969 Rules to accept the belated deposits and the Bank guarantee furnished, and without cancelling the disposal of the right of retail vend of liquors.

8. From these contentions, the questions that arise for decision are:

(1) Whether the petitioners have any legal right to continue to vend liquor, under the proviso to unamended Rule 18, when there is non-compliance with the provisions of Rules 16 and 17 of 1969 Rules.

(2) Whether the Rules 16, 17 and 18 as they stood before amendment are directory or mandatory.

(3) Whether the unamended Rule 18 of 1969 Rules is attracted in W. P. No. 5093/1977 and the deemed deposit and acceptance of Bank Guarantee is valid in law.

(4) Whether the 1st respondent is legally bound to cancel the acceptance and confirmation of the bid of 4th respondents in W. P. Nos. 5239 and 5240 of 1977 and order fresh disposal of the right to retail vend.

9. The contention of Mr. H. B. Datar, on behalf of the petitioner in W. P. No. 5093/1977 is that when the Rules 16 and 17 are not amended the amended Rule 18 does not empower the 1st respondent to extend time by directing the Dy. Commissioner and the Commissioner of Excise to accept the belated deposit of money and Bank guarantee furnished by the 6th respondent. Alternatively, he, contended that even though the amended Rule 18 of the Rules empower the Government to direct the belated acceptance of deposit and Bank guarantee, it was illegal to cancel the order passed on 16-6-1977, cancelling the acceptance and confirmation of the hid, since the amended Rule was made on 22-6-1977. He argued that by virtue of the cancellation of the acceptance and confirmation of the bid on 16-6-1977 the petitioner has got a vested right under the proviso to unamended Rule 18 of the 1969 Rules, to continue the vend of arrack.

10. Now therefore, the crucial question for determination is whether the petitioners have any legal right to continue their previous license in respect of the same shop or shops under the proviso to the unamended Rule 18 of 1969 Rules. The proviso to Rule 18 of 1969 Rules reads thus :

'Provided that till such disposal is made and fresh licenses ere granted, the Deputy Commissioner may continue the licence of the previous licensee in respect of the same shop or shops.

It is undisputed that in all these three writ petitions the petitioners did not comply with the provisions of Rules 16 and 17 of the 1969 Rules. In Writ Petition No. 5093 of 1977 the 1st respondent passed orders of cancellation of acceptance and confirmation of 6th respondent as required under unamended Rule 18 of 1969 Rules. But in respect of the petitioners in Writ Petitions Nos. 5239 and 5240 of 1977 no such order of cancellation was passed by the 1st respondent.

11. Mr. Advocate General, strongly urged that the petitioners have no legal right, requiring the Deputy Commissioner (2nd respondent) to continue their previous licence in respect of the same shop or shops to attract the application of the provisions of Article 226(1)(b) and (c) of the Constitution. He contended, that the High Court shall have power to issue writs of the nature specified in Article 226(1) of the Constitution, for the redress of any injury of a substantial nature by reason of the contravention of any other provision of this Constitution or any provision of any enactment, ordinance, or any other order, rule, regulation, bye-law or other instruments made therein, is required under Article 226(1)(b) or by reason of any illegality in any proceedings by or before any authority under any provision referred to in Sub-clause (b), where such illegality has resulted in substantial failure of justice. He urged that the petitioners have not suffered any injury by reason of the impugned orders in W. P. No. 5093/1977 and also by the omission on the part of the 1st respondent to pass orders as required under the unamended Rule 18 of the 1969 Rules in W. P. Nos. 5239 and 5240 of 1977, He further urged that injury as well understood is a legal concept, which results from violation of any legal right vested in any person. Reference was made to Section 2 of Part II relating to Cause of Action in Halsbury's Laws of England III Edition Volume I- At para 10, it reads :

'The general rule is that wherever there exists a 'right' recognised by the law, there exists also a remedy.'

12. Reliance was pieced upon the decision of the Supreme Court in Kalyan Singh v. State of Uttar Pradesh (AIR 1932 SC 1183). In para 14 of the judgment the Supreme Court has observed thus (at page 1188 of AIR) :

'After cancellation of his permit, he could not maintain a petition for a writ under Article 226 because a right to maintain such a petition postulates a subsisting personal right in the claim which the petitioner makes end in the protection of which he is personally interested. It is true that the appellant did at the date of the petition filed in the High Court hold a permit which was to enure till the 27th Nov. 1960. But if the permit was validly terminated from the date specified, he will not be entitled to relief even if he had on the date of the petition a subsisting right. Ground No. 2 must therefore fail.'

13. In the decision in State of Orissa v. Ramaehandra Dev : AIR1964SC685 the same view has been reiterated. At para No. 8 of the judgment the Supreme Court has observed thus:

'But though the jurisdiction of the High Court under Article 226 is wide in that sense, the concluding words of the article clearly indicate that before a writ or an appropriate order can be issued in favour of a parly, it must be established that the party has a right and the said right is illegally invaded or threatened. The existence of a right is thus the foundation of a petition under Article 226. The narrow question which falls for decision in the present appeals is whether the respondents can be said to have proved any legal right in respect of the properties of which they apprehended they would be dispossessed by the appellant.''

In the light of the enunciation of law by the Supreme Court the existence of a legal right is the foundation for a petition under Article 226 of the Constitution for the enforcement of rights, even after the 42nd Amendment of the Constitution. Therefore, as rightly contended by the learned Advocate General, the petitioners are required to demonstrate that there existed a legal right which has been infringed by the failure on the part of the 1st respondent to take action as required under unamended Rule 18 of 1969 Rules.

14. The learned Advocate General next urged that there is no right conferred on any citizen under the Constitution to trade in liquor. Reliance is placed upon the decision of the Supreme Court in State of Orissa v. Harinarayan Jaiswal : [1972]3SCR784 wherein the Supreme Court has observed in Para 17 of the judgment thus:

'The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is concerned. If the Government is the exclusive owner of those privileges, reliance on Article 19(1)(g) or Article 14 becomes irrelevant. Citizens cannot have any fundamental right to trade or carry on business in the property or rights belonging to the Government, nor can there be any infringement of Article 14, if the Government tries to get the best available price for its valuable rights.'

The same view has been reiterated by the Supreme Court in its decision in Har Shankar v. Deputy Excise and Taxation Commr : [1975]3SCR254 of the judgment the Supreme Court observed thus:

'There is no fundamental right to do trade or business in intoxicants. The State under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants--its 'manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants.'

In the light of the decision cited above, no citizen can claim a right to trade in liquor as a fundamental right. Further there exists a remedy wherever there exists a right.

15. It is not necessary to decide the question whether Rules 16, 17 and 18 of 1969 Rules are mandatory or directory since the limited and crucial question for determination for the disposal of these writ petitions is whether the proviso to unamended Rule 18 of 1969 Rules conferred any legal right on the petitioners to continue their previous license, if action has been taken as contemplated under unamended Rule 18. A plain reading of the proviso, makes it clear that discretion is given to the Deputy Commissioner (2nd Respondent) to continue the license of the previous licensee in respect of the same shop or shops till a fresh disposal of the right of retail vend of liquors is made end fresh licenses are granted. It is manifest in the words 'the Deputy Commissioner may continue the license of the previous licensee' that a discretion is vested in the Deputy Commissioner (2nd Respondent). The mandate given to the Deputy Commissioner, from the plain meaning of those words is not in my opinion mandatory, but directory. The object to be achieved by this proviso was to see that revenues to the Government do not suffer till the disposal of the right is made and fresh licenses are granted before 1st July of every year when the right of retail vend of liquors is disposed of. If as provided in the proviso to the unamended Rule 18 of 1969 Rules, the Deputy Commissioner declined to continue the license of the previous licensee in respect of the same shop or shops, there is no apprehension of loss of revenue to Government, in view of the provisions of Sub-rule (2) of unamended Rule 18 of 1969 Rules. Sub-rule (2) says:

'The disposal under Sub-rule (1) shall be at the risk of the defaulter, who shall, however, be not entitled to any excess amount realised from such disposal but shall be liable for the losses sustained by the State Government. The State Government shall be entitled to assess such loss and recover it as if it were an arrear of land revenue.'

This position in law clearly supports the view that the Deputy Commissioner may or may not exercise his discretion to act under the proviso to unamended Rule 18 of 1969 Rules. This view is further supported by the decision of the Supreme Court in State of U. P. v. Manbhodhan Lal Srivasteva : (1958)IILLJ273SC . While interpreting the word 'may' in Article 320(3)(c) of the Constitution of India, the Supreme Court observed thus: (at pp. 917, 918 of AIR).

'On the other hand, it is not always correct to say that where the word 'may' has been used, the statute is only permissive or directory in the sense that non-compliance with those provisions will not render the proceeding invalid, in that connection, the following quotation from Crawford on 'Statutory Construction' -- Article 261 at p. 516 is pertinent:

'The question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design and the consequences which would follow from construing it the one way or the other.' ' 12. We have already indicated that Article 320(3)(c) of the Constitution does not confer any rights on a public servant so that the absence of consultation or any irregularity in consultation should not afford him e cause of action in a Court of law, or entitle him to relief under the special powers of a High Court under Article 226 of the Constitution or of this Court under Article 32. It is not a right which could be recognized and enforced by a Writ.'

It is clear, therefore, that the proviso to Rule 18 of 1969 Rules, did not confer upon the petitioners a cause of action under the special powers of the High Court under Article 226 of the Constitution of India. It is not a right which could be recognised and enforced by writ.

16. The learned advocate for the petitioners' placed reliance upon a decision of the Supreme Court in K. M. Guruswamy v. State of Mysore : [1955]1SCR305 and emphasized the binding nature of the 1969 Rules on the State Government and its officers and further urged that all actions on the part of the State Government and its officers are strictly controlled by the Karnataka Excise Act and the Rules, framed thereunder. Therefore they contended that the proviso to unamended Rule 18 of 1969 Rules, confer right on the petitioners to have their previous license continued for the succeeding year until the right in question is disposed of in any one of the modes prescribed in Rule 3. In the above decision at Paras 10 and 11 of the judgment, the Supreme Court has observed thus:

'10. This Court had occasion to observe in State of Assam v. Keshab Prasad Singh : [1953]4SCR865 a fisheries case -- that the sale of these licenses forms such a lucrative source of revenue that State legislatures have deemed it wise not to leave the matter to unfettered executive discretion; accordingly legislation has been enacted in most parts of India to regulate and control the licensing of these trades; Acts are passed and elaborate Rules are drawn up under them. It is evident that there is a policy and a purpose behind it all and it is equally evident that the fetters imposed by legislation cannot be brushed aside at the pleasure of either Government or its officers. The Rules bind State and subject alike.

11. The Act and the Rules make it plain that liquor licensing in the State of Mysore can only be done in certain specified ways and such discretion as is left to the authorities is strictly controlled by Statute and Rule.''

The enunciation of the principle of law by the Supreme Court in the above decision does not speak of any conferment of right on the licensee nor any right on the licensee to demand the continuance of his previous license, if any default is committed by the highest bidder by failure to comply with the provisions of Rules 16 and 17. The Supreme Court has laid down that the liquor licensing in the State can only be done in certain specified ways and such discretion as is left to the authorities is strictly controlled by the statute and Rule.

17. As already pointed out, the discretion is conferred on the Deputy Commissioner, whether or not to continue the previous licensee in the event of default committed by the highest bidder. Therefore, viewed from any angle it is not possible to accede to the contention that the petitioners have got legal right to continue their previous license in respect of the shop or shops which entitled them to enforce it under Article 226. On this ground alone, Writ Petitions 5239 and 5240 of 1977 are liable to be dismissed. I will presently deal with the question whether the petitioners in these two writ petitions have sustained any injury of a substantial nature or whether there is any substantial failure of justice.

18. In Writ Petition No. 5093 of 1977 Mr. Datar, learned counsel for the petitioner, contended that when the Government cancelled the acceptance and confirmation of the bid of the 6th respondent as per Exhibit 'D' the mode of disposal should have been by any one of the modes enumerated in Rule 3 of 1969 Rules. He further urged that the 1st respondent having acted under the unamended Rule 18, had no power to cancel the sale purporting to act under the amended Rule 18 of 1969 Rules. He further urged that when the 1st respondent acted under unamended Rule 18 and cancelled the acceptance and confirmation, the petitioner got a vested right to continue his previous license in respect of those shops. He argued that amended Rule 18 of 1969 Rules, does not take away the right since the amended Rule came into force subsequent to the passing of the order at Exhibit 'D'. The Unamended as well as amended Rule 18 reads thus:

UNAMENDED RULE 18.

Failure to execute lease agreement etc. :--

(1) Where the person in whose favour the disposal is confirmed fails to comply with the provisions of Rules 16 and 17, the disposal of the right of retail vend of liquors shall be cancelled by the State Government. The deposits made_ by such person shall be liable to be forfeited to the State Government and the right of retail vend of liquors shall be disposed of afresh in such manner as the State Government may direct.

(Underlining is mine)

AMENDED RULE 18.

In Rule 18 of the Karnataka Excise (Lease of the Right of Retail Vend of Liquors) Rules, 1969 for the words 'shall be cancelled by the State Government. The deposit made by such person' the words 'may be cancelled by the Government at its discretion and if it is so cancelled the deposit made by such person' shall be and shall be deemed to have been substituted with effect from 1st January 1977.

(Underlining is mine)

19. The power of the Government to amend the Rules is not assailed in these writ petitions. The 1st respondent is therefore competent to emend the Rule even retrospectively. The amended Rule 18, deleted the words 'shall be cancelled by the State Government' and the words 'may be cancelled by the Government at its discretion' were substituted. Further, 'If it is so cancelled, the deposit made by such a person' shall be and shall be deemed to have been substituted with effect from 1st Jan. 1977. The plain meaning of the amended Rule 18 is that the Government has now been conferred with discretion either to cancel licenses of the retail vend of liquors for non-compliance of Rules 16, 17 (and when the licenses are so cancelled only the deposit made by such person shall be forfeited to the Government) or confirm in its discretion licenses of the retail vend of liquors in spite of there being belated compliance of Rules 16 and 17. In the latter case, it is obvious when the licenses are confirmed even if there were to be delay either in making deposits or in complying with conditions specified in Rules 16 and 17 by such persons in whose favour the licenses are confirmed, they become regularised and to that extent they are deemed to have been validly made or complied. This discretionary power could be exercised by the Government retrospectively from 1st Jan. 1977, in view of the concluding wordings inserted under the amended Rule 18, that the words 'shall be and shall be deemed to have been substituted with effect from 1st Jan. 1977,' Thus the amended Rule 18, validates the belated deposit end the Bank guarantee furnished by the 6th and the 4th respondents respectively in these writ petitions.

19-A. But the contention of Mr. Datar is that when the 1st respondent exercised the discretion under the un-amended Rule 18 of 1969 Rules, it has no power to cancel the cancellation of acceptance and confirmation made under Exhibit-D, in W. P. No. 5093 of 1977. This contention ignores the position that the unamended Rule 18 of 1969 Rules has been amended retrospectively and anything done under the unamended Rule 18 nullifies the previous order unless there is a vested right in a citizen. As already held the petitioner in W. P. No. 5093 of 1977 had no such vested right under the proviso to unamended Rule 18 of 1969 Rules. Therefore, there is no force in the contention of Mr. Datar. Similarly, there is no force in the contention of the learned counsel for the petitioners in W. P. Nos. 5239 and 5240 of 1977 that the 1st respondent was bound to cancel the acceptance and confirmation of the highest bid made by the 4th respondent in these two writ petitions.

19-B. Assuming for the sake of argument, but not conceding that the impugned orders are violative of the Rules 16 and 17 and the unamended Rule 18 of 1969 Rules, the question which arises for determination is whether these petitioners sustained injury of a substantial nature or whether there is substantial failure of justice as required under Article 226(1)(b) end (c) of the Constitution of India.

20. The learned Advocate General, contended that there is neither injury of a substantial nature nor any substantial failure of justice occasioned to the petitioners by reason of the impugned order at Exhibit-D, and also by reason of non-compliance with the provisions of unamended Rule 18 of 1969 Rules.

21. The counsel for the petitioners contended that they had invested monies to set up their shops under the previous license and that they continued the establishment till the end of June 1977 with the expectation of orders being passed by the Deputy Commissioner as required under the proviso to unamended Rule 18 of 1969 Rules, in view of the de-fault committed by the 6th and the 4th respondents in these writ petitions. By continuing the establishment they were likely to suffer financial loss which is according to them an injury of a substantial nature as laid down in Sub-clause (b) of Clause (1) of Article 226 of the Constitution. There is no substance in this contention. The petitioners knew that their license period would be over by the end of June 30, 1977 and they had also failed to get their bids accepted for the year 1977-78 (as they were low) it is now not open to them to contend that they would suffer any financial loss on account of continuing the highest bidders viz., respondents 6 and 4, by virtue of the amendment of Rule 18, Further, as rightly contended by the learned Advocate General that substantial justice is done to respondents 6 and 4 who are the highest bidders and who would have suffered the forfeiture of the deposits made by them and also were liable for the losses that may be sustained by the 1st respondent, which was to be recovered as if it were the arrears of land revenue. If the amended Rule 18 of 1960 Rules had not come into force the 6th and the 4th respondents would have incurred heavy financial loss which was of a substantial nature. Therefore, there is no force in the contention on behalf of the petitioners that there is injury of a substantial nature or that there is substantial failure of justice to grant relief in these writ petitions.

22. Thus, it is clear that the petitioners have not made out any case to invoke the provisions of Article 226(1)(b) and (c) of the Constitution, to grant reliefs sought for by them.

23. For the reasons stated above all the three writ petitions fail and they are dismissed.

24. Before parting with this case, it is necessary to consider I. A. No. 2 filed by the petitioner in Writ Petition No, 5240 of 1977. His grievance in this application is that the Deputy Commissioner has issued a notice to him informing him that this Court had ordered that the security if furnished shall relate back to 1-7-1977 and hence the petitioner who has furnished Bank guarantee to deposit one month's rental in accordance with the bid for the previous year shall have to deposit the dues of Rs. 44,561-37 ps in respect of the period from 1-7-1977 to 19-7-1977 as per Exhibit G. It is contended that the Deputy Commissioner had wrongly understood the order of this Hon'ble Court in making this demand. This Court while issuing the Rule, granted an interim order sought for by the petitioners in W. P. Nos. 5239 and 5240 of 1977. The 1st respondent on entering appearance asked for vacation of the interim order granted to the petitioner in W. P. No. 5240/1977 on the ground that the petitioner had not paid the highest bid amount for the current year and has not complied with the other terms of agreement. The petitioner was directed to comply with them and if he failed to do so the interim order granted on 30-6-1977 stood vacated without prejudice to his rights.

25. The petitioner sought for modification of the impugned order passed on 13-7-1977 on the ground that he is not liable to furnish Bank guarantee and deposit the rental amount in accordance with the bid of the 4th respondent as in law he is not entitled to continue on finishing the Bank guarantee in accordance with the bid for the previous year. But the Court on 15-7-1977 passed a conditional order. If the petitioner fails to deposit the balance of the highest bid amount for the current year and also furnish the balance of Bank guarantee for three months in the like amount the modified order of July l3, 1977 stands cancelled and the maintenance of status quo granted in his favour stood dissolved. Further, if the petitioner made such deposit and gave such Bank guarantee as ordered above, the same shall be deemed to have been made from 1st July 1977 and the status quo shall continue. The petitioner did not comply with the conditions stipulated in the order dated 15-7-1977 and hence his license to continue as a retail vendor of toddy was stopped. It was thereafter the impugned demand was made by the Deputy Commissioner of Chitradurga.

26. Now the question for determination is whether the petitioner is liable to pay the difference between the previous bid amount and the highest bid for the year 1977-78.

27. What the proviso to unamended Rule 18 of 1969 Rules says is that the Deputy Commissioner may continue the license of the previous licensee in respect of the same shop or shops till a fresh disposal is made and fresh licenses are granted. It is not possible to read this proviso as contended by the learned Advocate General that the previous license should be continued on the terms and conditions of the fresh licenses viz., depositing and giving Bank guarantee at the highest bid amount. Continuing the previous license would mean that the license should be continued on the same terms and conditions on which it was issued in the previous year. On 15-7-1977 the Court directed the petitioner on the objection raised by the Advocate General that the Government sustained loss of revenue therefore option was given to the petitioner to continue his previous license on payment of the highest bid amount. But the petitioner was not agreeable to continue the previous license on the terms of the new license to be granted to the 4th respondent and he stopped the retail vend of toddy in respect of the shops taken by him on lease. Therefore, the order of July 15, 1977 did not bind him to make deposit and give bank guarantee of the highest bid amount of the 4th respondent. Therefore, the Deputy Commissioner, is not justified in issuing a demand notice as per Exhibit 'G' and the petitioner is not liable to comply with it. If the 1st respondent had sustained any loss on this account it is open to it to take action under Sub-rule (2) of Rule 18 of 1969 Rules. In that way no loss of revenue will be sustained by the 1st respondent. Therefore, Exhibit 'G' has become inoperative and shall not be enforced against the petitioner in W. P. No. 5240 of 1977.

28. I. A. No. 2 is allowed.

29. Order accordingly.


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