http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7  

PETITIONER: STATE OF RAJASTHAN & ORS.

       Vs.

RESPONDENT: ANIL KUMAR SUNIL KUMAR & PARTY & ANR.

DATE OF JUDGMENT:       03/04/2000

BENCH: S.R.Babu, R.C.Lahoti

JUDGMENT:

     R.C.  Lahoti, J.

     M/s  Anil  Kumar Sunil Kumar & Party,  the  respondent no.1  in these appeals had filed a writ petition before  the High  Court of Rajasthan impleading the State of  Rajasthan, the Excise Commissioner and the other officers of the Excise Department  as  respondent nos.1 to 4, also  M/s  Ganganagar Sugar  Mills  Ltd.   as respondent no.5.  For  the  sake  of convenience  the  parties shall be referred to as they  were arrayed in the writ petition before the High Court.

     The  Excise  Commissioner,   Rajasthan,  Udaipur  vide tender  notice  dated 6.2.1991 invited tenders for grant  of exclusive  privilege licences (E.P.L.) under Rules 67(I) and 67  (K) of the Rajasthan Excise Rules, 1956 read with Rule 3 of  the  Rajasthan Foreign Liquor (Grant of Wholesale  Trade and  Retail Licence) Rules, 1982 for sale of country  liquor for  the whole of Rajasthan (excluding tribal area),  retail sale  of  beer,  retail and wholesale  sale  of  Indian-Made Foreign  Liquor  for shops and group of shops/sub-shops  for financial  years 1991-92 and 1992- 93.  One of the group  of shops  forming  subject  matter  of the  tender  notice  was designated  as  Sirohi  group of shops falling  in  excise district  of  Jalore  for  the   sale  of  country   liquor. Thereunder  fell 35 main shops and 48 sub-shops as notified. The  total amount of reserve price for the group of shops as notified   was   as   under:-   Rs.   1.    Country   Liquor 2,42,94,800/-   2.   I.M.F.L.    (Retain)  2,39,29,200/-  3. Retain  sale  of beer 21,72,900/- 4.  Wholesale of  I.M.F.L. 3,87,900/-         ------------------          5,17,84,800/- ------------------

     The  petitioners  submitted tenders for the  grant  of exclusive  privilege licences of all the aforesaid heads  as under  :-  1.   Country Liquor  2,42,94,800/-  2.   I.M.F.L. (Retail)  3,42,55,511/- 3.  Retail sale of beer  21,72,900/- 4.   Wholesale sale of I.M.F.L.  3,87,900/  ---------------- 6,11,11,111/-  ----------------  The   petitioners  tenders being  the highest were accepted.  They were granted licence for  the retail sale of country liquor for Sirohi group  of shops  amongst  other licences.  We are concerned  in  this appeal  with the abovesaid licence relating to Sirohi  group of shops.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7  

     According to the petitioners they were grantees of the exclusive  privilege  licence  of shops for the  local  area comprising  of Sirohi Revenue District excluding the Janjati (tribal)  area.   Abu  Road and Mount Abu  Municipal  areas, including  the Janjati area as notified by the  Presidential Order  known as the Scheduled Areas (Rajasthan State) Order, 1981,  formed part of Sirohi Revenue District.  The District Excise  Officer,  Sirohi  did  not   allow  or  permit   the petitioners to open their sub-shops of country liquor in the municipal areas of Abu Road and Mount Abu on the ground that those two areas were included in the Janjati area.  This led to the shortfall in the sale of country liquor as they could not  fulfil  the  minimum demand by lifting the  quantum  of exclusive  privilege  for  the   fiscal  years  1991-92  and 1992-93.   Instead  M/s Ganganagar Sugar Mills Limited,  the respondent  no.5 (hereinafter referred as the Sugar Mills, for  short)  which were holding the licence for  selling  by retail  the  country  liquor through their  five  shops  and sub-shops  in the Abu Road and Mount Abu municipal areas for and  upto the year ending 31.3.1991 were renewed the licence for  the  fiscal  years 1991-92 and 1992-93  whereunder  the Sugar Mills continued to operate their shops in those areas. The  petitioners  sought for the following reliefs :- (i)  a declaration  that the renewal of the licences granted by the District Excise Officer, Sirohi in favour of the Sugar Mills for  the financial years 1991-92 and 1992-93 for the  retail sale  of country liquor in the municipal areas of Mount  Abu and Abu Road was illegal and void;  (ii) the policy decision of  the State, if any, which prohibited the sale of  country liquor in the above-said areas by any private licensee other than  the Sugar Mills was illegal and void;  and (iii)  that the  petitioners be held entitled to vend country liquor  by retail sale in the municipal areas of Mount Abu and Abu Road for  the  said years and the amount of due price and  margin money  paid by the Sugar Mills, respondent no.5 to the State Government  be  adjusted  towards  the  exclusive  privilege amount payable by the petitioners.

     According  to  respondent nos.1 to 4, the  petitioners had  submitted tender for 35 shops and 48 sub-shops included in  the  Sirohi  group of shops.  The petitioners  were  not granted  exclusive  privilege  licence for  vending  country liquor  for the entire Sirohi Revenue District.  The  tender notice  clearly  specified  the  group of 35  shops  and  48 sub-shops  designated  as Sirohi group of shops  which  is tried to be confused with shops in the entire Sirohi Revenue District.   The  petitioners  knew  it well  from  the  very beginning  that  in  so  far  as the  areas  of  Abu  tehsil including Abu Road and Mount Abu were concerned licences for selling   country  liquor  by   retail  were  being  granted invariably  over  a number of years in favour of  the  Sugar Mills  which was a Government of Rajasthan undertaking.   No private  party  was ever allowed such a privilege by way  of licence.   It  was the policy of the State, well within  the knowledge  of  the petitioners, that to protect the  tribals from  exploitation  at the hands of the  private  licensees, sale  by  private  licensees was not allowed in  the  tribal areas.   The licences which were held by the Sugar Mills for the  period expiring on 31.3.1991 were renewed for the  next two  financial  years  consistently with the policy  of  the State.   Exclusive  privilege for vending country liquor  by licence  in  the municipal areas of Abu Road and  Mount  Abu neither  formed the subject-matter of the tender notice  nor could  it have been.  The petitioners did not submit tenders

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7  

for  Mount  Abu  and Abu Road.  The licences issued  to  the petitioners  did not relate to any shop at Mount Abu or  Abu Road  insofar as vending of country liquor by retail sale is concerned;   on  the  contrary the licences granted  to  the petitioners for sale by retail of IMFL included shops in the towns  of  Mount Abu and Abu Road.  The petitioners  made  a default in payment of the fee for exclusive privilege grant. On  31.12.1991  an  amount of Rs.98,30,468  was  outstanding against  the  petitioners.   The petition is an  attempt  to wriggle out of the petitioners obligation to pay the amount by pleading a false and imaginary ground.

     It  is  not disputed nor could it have been  that  the declared  policy  of the State Government consistently  with the  directives  issued  by the Central Government  in  this regard  was  not to allow private parties as  licensees  for vending  country  liquor  by  retail in  the  tribal  areas. Eversince  1.4.1982 Abu road and Mount Abu were not  allowed to  have  any private contractor and retail sale of  country liquor  in  the  said areas was being arranged  through  the licences   granted   to  the   Sugar  Mills,  a   Government undertaking.

     The   respondents  also  raised   a  few   preliminary objections  to  the  maintainbility  of  the  writ  petition submiting  that  the petition raised disputed  questions  of fact  and  the  relief sought for arose out  of  contractual obligations voluntarily incurred by the petitioners and so a writ petition was not an appropriate remedy for the grant of the reliefs asked for.

     A  few relevant dates which are not in dispute may  be noticed  as  they  will  have  a  material  bearing  on  the adjudication of the dispute.  The writ petition was filed on 16.3.1992 initially before the Jaipur Bench of the Rajasthan High  Court.   On  27.4.1992  the  respondents  filed  their counter-affidavits  contesting  that pettion.  On  28.8.1992 the  writ petition filed by the petitioners was allowed by a learned  Single Judge.  The decision was put in issue by the respondents  before  the  Division Bench of  Rajasthan  High Court  by filing a writ appeal.  On 15.1.1993 the appeal was allowed  upholding  the  plea of the  respondents  that  the Jaipur   Bench  of  Rajasthan  High   Court  did  not   have territorial  jurisdiction  to entertain the  writ  petition. The  writ  petition  was  directed to  be  returned  to  the petitioners  for  being presented at Jodhpur, the  principal seat  of  the  Rajasthan High Court.  Accordingly  the  writ petition  was  returned to the petitioners and  re-filed  on 21.1.1993 at Jodhpur.

     After  hearing  the parties, the learned Single  Judge directed  the petition to be dismissed.  Briefly stated, the learned  Single  Judge upon evaluation of several  documents brought  on record by the parties upheld the pleas raised by the  respondents.   The learned Single Judge found that  the notice  inviting  tenders  and the tender submitted  by  the petitioners  were both for the grant of exclusive  privilege for a group of shops termed as Sirohi group of shops which comprised   of  35  main  shops   and  48  sub-shops.    The petitioners  were trying to confuse Sirohi group of  shops with  shops in the revenue district of Sirohi.  The notice inviting  tenders, the tenders submitted by the  petitioners and  the licence issued to the petitioners  all related  to Sirohi group of shops.  The 35 main shops and 48 sub-shops were situated only in four tehsils of District Sirohi namely

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7  

Revdar,  Pinvara,  Sirohi  and Sheoganj.  None of  the  said shops  or  sub-shops was situated in Mount Abu and Abu  Road which  formed  part  of  Abu   Road  tehsil.   This  was  in conformity with the State policy of 1981 adopted in response to Central Government directives.  The petitioners have been in  the liquor trade since long.  At the time of  submitting their  tenders  they knew it well that in Mount Abu and  Abu Road  licences  had  never  been   granted  to  any  private contractors  for  vending country liquor.  Such licences  in Mount  Abu and Abu Road were invariably issued in favour  of the  Sugar  Mills, a Government undertaking,  eversince  1st April, 1982.  The entire Abu Road tehsil including the areas of  Abu  Road  and Mount Abu was declared a  scheduled  area under  the  Presidential notification.  Merely  because  Abu Road  and  Mount Abu were constituted as municipality  under the  Rajasthan  Municipality Act, it could not be held  that these  local  areas  were excluded from the  scheduled  area declared  by the President of India.  On these findings  the learned  Single  Judge held the petitioners not entitled  to any relief and directed the petition to be dismissed.

     The  petitioners  preferred  an   appeal  before   the Division  Bench.   The  only   question  raised  before  the Division  Bench was as to the interpretation of local area for  which the petitioners were granted the licence.  Having made  an  evaluation for itself of the documents brought  on record  the Division Bench held that Mount Abu and Abu  Road were  included in the area to which the licences granted  to the  petitioners  related  and  the conduct  of  the  excise department  treating Mount Abu and Abu Road to be  scheduled areas was a mistake of law under which both the parties were belabouring.   The Division Bench further opined that though the petitioners did not apply for opening any sub-shops for the  sale  of country liquor at Mount Abu and Abu Road  from April 1991 till February 1992, but merely from that omission it  could  not be inferred that they had voluntarily  waived their  right  to open sub-shops in those areas.  They had  a legal  right and consequences flowing from the denial of the legal  right of the petitioners must follow.   Consequently, the  appeal  filed  by the petitioners was allowed  and  the demand raised against the petitioners was quashed.

     Aggrieved  by the judgment of the Division Bench,  the State  of Rajasthan have come up in appeal by special  leave to this Court.

     Having  heard the learned counsel for the parties,  we are  of  the opinion that the appeal deserves to be  allowed and  the  judgment of the Division Bench of the  High  Court deserves to be set aside.

     The  policy decision of the State Government contained in  its  G.Os.   dated  18.9.1981 and  7.2.1991  is  not  in dispute.   No  fault  can  be found  with  the  said  policy decision  whereby  in  the  interest of  tribals  the  State Government  had, consistently with the directives issued  by the  Central  Government,  taken a policy  decision  not  to permit  sale  by  private licensees in such  areas  as  were populated  by the tribals so as to protect them from  likely exploitation  at  the  hands  of  private  liquor   vendors. Licence  to sale country liquor by retail was given only  to the  Sugar  Mills which was a Government  undertaking.   The price  of  the country liquor to be sold by the Sugar  Mills was  fixed while the private licensees were free to sell the liquor  at whatever price they liked.  Such policy protected

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7  

the  tribals  and weaker sections of the population  in  the scheduled  areas.   The controversy which was sought  to  be raised  by  the petitioners before the High Court by  filing the  writ petition related to the interpretation of  several documents  so as to find out whether Mount Abu and Abu  Road areas  were  intended  to be put to auction  by  the  tender notice  and  whether  the petitioners  had  submitted  their tenders so as to include those areas and whether the licence issued  to  them  covered those areas or not.   The  learned Single Judge by carefully analysing the documents brought on record  held  against  the   petitioners.   In  appeal,  the Division  Bench by evaluating the same set of documents drew factual  inferences  in  favour  of  the  petitioners.   The petitioners had raised highly disputed questions of fact and had also sought for a relief against a contractual liability which  was sought by the State to be enforced against  them. However,  we are of the opinion that it is not necessary for us  to enter into the abovesaid disputed questions of  fact, re-appreciate  and  re-evaluate   the  documentary  evidence brought on record and to record a finding on the correctness or  otherwise of the inferences drawn by the learned  Single Judge  and the Division Bench.  We are unhesitatingly of the opinion that the conduct of the petitioners disentitled them to  the grant of any reief in exercise of discretionary writ jurisdiction of the High Court.

     It  cannot  be denied nor has it been  that  eversince 1.4.1982  continuously  and uninterruptedly the Sugar  Mills only  were having the licence for sale of country liquor  by retail  in Mount Abu and Abu Road tehsils.  Even on 6.2.1991 when   the   tender  notice  was   issued  by   the   Excise Commissioner,  the  licence granted in favour of  the  Sugar Mills  was already in operation.  The petitioners were  well aware  of the policy of the State Government having been  in this  trade  for long.  Right from April 1991 till  February 1992 the petitioners never applied for opening any sub-shops of theirs for the sale of country liquor at Mount Abu and/or Abu  Road,  though they had submitted  several  applications from  time to time for obtaining permission of the  District Excise Officer for opening shops/sub- shops in various areas covered  by  their licences.  They were seeking approval  of the  location of the shops/sub-shops at the places  situated in  4 tehsils of Sirohi District excluding Abu Road  tehsil. For  a period of about 11 months, the petitioners  exploited their  licences  and  enjoyed  the  exclusive  privilege  of selling  by  retail  the country liquor in  Sirohi  District excluding  Mount Abu and Abu Road tehsils.  It is only  when they  fell into arrears of the licence fee and a demand  was raised  against them that on 4.3.1992 they raised a plea  of having   been  wrongfully  excluded   from  exercising   the exclusive  privilege for sale by retail of country liquor in Mount  Abu and Abu Road areas and for that purpose served  a notice  seeking  the withdrawal of the demand raised by  the State  and  demanding  permission  in  future  for   opening sub-shops  in  Mount Abu and Abu Road Municipal areas.   The plea   raised  in  the  notice   dated  4.3.1992  that   the petitioners  had  become  aware of the correct  factual  and legal  position  by  making enquiries in the  last  week  of February  1992 was apparently false and highly belated.  The plea  that on further enquiries being made and legal advice being  sought it has transpired that Mount Abu and Abu  Road were  not included in the Janjati Kshetra (tribal area) was raised  by  the  petitioners by making an averment  in  that regard  in the rejoinder which they had filed on  15.2.1993. The  plea was not raised in the writ petition as  originally

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7  

filed.   Yet  another very material fact which  exposes  the falsity  of the petitioners plea is that the reserve  price fixed  by  the  State for exclusive  privilege  for  vending country  liquor  for Sirohi group of shops was based on  the previous  years  figures of sales of the notified  35  main shops  and  48  sub-shops, wherein the figures of  sales  of shops  at  Mount Abu and Abu road were not  included.   This plea  raised  by  the  respondents   was  supported  by  the documents  of  unimpeachable veracity brought on record  and duly supported by affidavit.

     In  State  of Orissa Vs.  Nayaran Prasad 1996 (5)  SCC 740  this Court has, in the backdrop of similar facts,  held :- A person who enters into certain contractual obligations with  his eyes open and works the entire contract, cannot be allowed  to  turn round and question the validity  of  those obligations  or  the validity of the Rules which  constitute the  terms of the contract.  The extraordinary  jurisdiction of  the  High  Court  under  Article  226,  which  is  of  a discretionary  nature  and is exercised only to advance  the interests of justice, cannot certainly be employed in aid of such  persons.   Neither  justice  nor equity  is  in  their favour.

     In  the case at hand we find that the petitioners  are trying to wriggle out of a contractual obligation by raising a plea which was highly belated and clearly an afterthought. They  knew  it  very well that they were not bidding  for  a privilege by way of licence to sell country liquor by retail in the areas of Abu Road tehsil nor could they have had that privilege  in view of the States policy decision whereunder a  Government  undertaking only was allowed to  operate  its licence  in  those  areas.  They having been  faced  with  a demand  raised  against  them  appear to  have  looked  into several  documents  and found out scope for raising plea  on the  phraseology  employed by the State or its  officers  in different  documents  which were brought on record.  Such  a plea  could  not be allowed to be entertained.  The  learned Single  Judge  was right in turning down the plea raised  by the  petitioners  and thereby dismissing the writ  petition. In  our  opinion,  the  Division Bench  ought  not  to  have interfered with the judgment of the learned Single Judge.

     The  learned  counsel for the writ-petitioners  lastly submitted  that the principal amount due and payable by them on  account of issue price and margin money has been paid by them  but a demand of Rs.8 lakhs is stated to be outstanding against  them, which amount consists of interest only  which if  insisted  on  being  paid,   would  be  ruinous  to  the petitioners.  The amount outstanding against the petitioners as  per  details  contained  in the  letter  of  the  Excise Commissioner,  Rajasthan,  Udaipur dated 26.11.1994  was  as under:-

     Principal amount outstanding for Deshi Madira (Country Liquor) Rs.75,55,355-00

     Interest on outstanding dues Rs.10,81,323-00

     Bha.Ni.Vi.M.   Rs.    3,91,455-00  ------------------- Total :  Rs.90,28,133-00 -------------------

     Pursuant  to the judgment passed by the Division Bench of  the High Court on 23.2.1994, the petitioners had made an

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7  

application  before  the Excise Commissioner and the  latter had  vide order dated 25.5.1994, after adjusting the  amount of  issue  price and margin money paid by Sugar  Mills  from 29.8.1982 to 5.2.1993, computed the above-said amount, which amount  of  Rs.90,28,133-00 has since been realised  by  the Department.   Upon operation of the judgment of the Division Bench  of the High Court of Rajasthan having been stayed  by this  Court, the Excise Commissioner withdrew the relief  of rebate   of  Rs.29,81,159-00  which   was  allowed  to   the petitioners  pursuant to the Division Bench judgment of  the High Court.  Thereafter the petitioners have deposited under protest   a  further  amount  of  Rs.21,81,159-00  (out   of Rs.29,81,159-00)  between 10.9.1997 and 23.9.1997.  Thus, it is  only  an  amount of Rs.8 lakhs on  account  of  interest calculated  at the rate of 12% per annum which still remains to  be paid by the petitioners.  In our opinion, looking  to the  nature of the controversy raised and the stages through which  the  litigation has travelled up to this Court,  i.e. the  petitioners  having succeeded before the  single  Judge earlier,  which judgment was set aside on the ground of want of territorial jurisdiction only and again from the Division Bench  of  the High Court which judgment was stayed by  this Court  and further keeping in view the payments made by  the petitioners  to the Excise Department during the pendency of the  litigation, we deem it proper to direct that no further amount  should now be realised from the petitioners.  It may be placed on record that on behalf of the State of Rajasthan the  factual position as to the amount of dues and the heads under  which it has been demanded and substantially paid, as stated in this para, specially the fact that the outstanding amount  is only Rs.8 lakhs and is attributable to demand  on account of interest has not been disputed.

     The appeals are allowed.  The judgment of the Division Bench  of the High Court dated 23.2.1994 is set aside.   The judgment  of  the  learned single Judge dated  26.5.1993  is restored.   However, for the reasons stated in the preceding para, it is directed that the amount of Rs.8 lakhs, which is on  account of interest, shall not be realised from the writ petitioners.  No order as to the costs.