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PETITIONER: THAKUR PRASAD SAO ETC.

       Vs.

RESPONDENT: THE MEMBER, BOARD OF REVENUE & ORS.

DATE OF JUDGMENT18/12/1975

BENCH: SHINGAL, P.N. BENCH: SHINGAL, P.N. RAY, A.N. (CJ) BEG, M. HAMEEDULLAH SARKARIA, RANJIT SINGH

CITATION:  1976 AIR 1913            1976 SCR  (3)  34  1976 SCC  (2) 850  CITATOR INFO :  R          1977 SC 722  (17,19)

ACT:      Bihar &  Orissa Excise  Act 1915-Ss.  22 and 30-Licence granted under  s. 22  all exclusive  privilege-Inability  to open liquor  shop-If entitled  to refund  of fees.-Incurring loss-If a  ground for  reduction of fees-If refund should be granted if quid pro quo is absent.

HEADNOTE:      Under the  Bihar &  Orissa Excise  Act the holder of an outstill licence  for country  liquor pays a certain sum per mensem for  manufacturing country spirit in his outstill and selling it  by retail  in his  premises. No definite area is fixed within  which each outstill has the monopoly to supply country spirit  but their  number is  regulated according to rules and  five miles  is  taken  as  the  minimum  distance between one outstill and another.      The appellants  in all  the appeals were the holders of licences for  the manufacturing  and sale of country liquor. In the first batch of cases the appellant could not open the outsill even after more than six months of its grant despite his best  efforts. The approval for opening the outstill was withdrawn and  he   was asked to pay the monthly licence fee according to the terms of licence. The appellant’s claim for refund  of   the  money  deposited  by  him,  together  with compensation for  loss of  anticipated profits  and damages, was rejected.  Despite this  the appellant  continued to bid for licences  during the  subsequent three years and claimed refund  and   damages,  which  claim  was  rejected  by  the authorities. In  the second  batch of appeals the appellants claimed reduction  of the  licence fee  for outstill  liquor shops on the ground that they incurred losses because of the speculative bids  at the  auction should have been prevented by  the  authorities.  In  the  third  batch  of  cases  the appellants claimed  refund of sums realised from them on the ground that  there was  no quid pro quo for the fees. In all the cases the High Court dismissed their writ petitions.      On appeal  it was  contended that  the High  Court  was wrong in  holding that  exclusive privilege had been granted

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under s.  22 of the Bihar & Orissa Excise Act, 1915 but that the licences fell within the purview of s. 30 of the Act.      Dismissing the appeals, ^      HELD: (1)  It is  futile to  contend that  the licences were merely  licences for  the retail  sale  of  spirit  for consumption on  the vendor’s  premises within the meaning of s. 30  of the  Act. The  essential feature  of the  outstill system is that the holder of a licence acquires the right to manufacture country  spirit in  his outstill  and sell it by retail "in  his premises"  without any  ’restriction on  the strength or  prices at  which the  spirit is manufactured or sold. He  has a  monopoly  of  manufacturing  and  supplying country liquor  within his area. The right is, therefore, an exclusive privilege within the meaning of s. 22(1)(d) of the Act. [38A-C]      (2) The  licences of  the appellants  remained in force for the  purposes for  which they were granted and by virtue of the  express provisions of s. 45 they could have no claim to compensation. [38 G]      (3) Even  though the  High Court has held that what was granted was  an exclusive  privilege under s. 22, it did not notice s.  44(2) while  taking the  view that the petitioner was at  liberty to  surrender  the  licence.  Section  44(2) clearly provides  that sub-s.  (1) of that section shall not apply in  the case  of a licence for the sale of any country liquor in  exercise of  an exclusive privilege granted under s. 22(c). [38 F-G]      (4) There  is nothing  wrong in  the view  taken by the High Court  that the  responsibility for  finding a suitable site was that of the appellant. There is no 35 justification for  the argument  that nothing was payable by the appellant because  he could not locate the shop in spite of his best efforts. The appellants retained the licence all through and  continued to make higher bids at the subsequent public auctions  thereby preventing  others from undertaking the responsibility of establishing the outstills. [40 B-D]      (5) It was permissible for the State to frame rules for the grant  of licences  on payment of fees fixed by auction, for that was only a mode or medium for ascertaining the best price for  the grant of exclusive privilege of manufacturing and selling liquor. [41 A-13]      Nashirwar etc. v. State of Madhya Pradesh & Ors. [1975] 2 SCR 861 and Har Shankar & ors. etc. v. The Deputy Excise & Taxation  Commissioner   &  Ors.   etc.  [1975]  3  SCR  254 explained.      (6) In the second group of appeals, there is nothing in the rules  which could  be said  to give  rise to a right in favour of  the  appellants  for  reduction  of  the  amounts demanded from them. [43 A-B]      (7) Id  the third  group of  appeals the High Court was right in  holding that  the amounts in question were payable for the  licence which  had been  granted for  the exclusive privilege. The  argument that there should be refund of fees because there  was no quid pro quo is no longer available to the  appellants   in  view   of  this  Court’s  decision  in Nashirwar’s case and Har Shankar’s case.                                                     [43 C-D]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeals Nos. 819- 823 of 1975.

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    From the  Judgment and  order dated  15-3-1975  of  the Patna High Court in Civil Writ Nos. 1184 of 1974.                             AND         CIVIL APPEALS Nos. 824-827 and 1105 of 1975.      From the Judgment and order dated 2-1-1973 of the Patna High Court  in Civil Writ P.C. Nos. 1239 to 1242 of 1971 and 1532/73 respectively.      Basudeo Prasad  (In CAs. 819-827/75) for the Appellants (in all the appeals).      Balbhadra Prasad,  A. G. Bihar (In Cas. 819-823), U. P. Singh for Respondents (In all the appeals)      The Judgment of the Court was delivered by-      SHINGHAL, J.,-  These ten appeals against two judgments of the  High Court  of Judicature at Patna raise some common questions of  law. They  have been  argued together,  and we shall examine  them in  this common  judgment. Civil Appeals Nos 824-827  of 1975  arise out  of a  common judgment dated January 2,  1975 in  a bunch  of civil writ petitions; Civil Appeals Nos.  819-823 of 1975 arise out of a common judgment dated  March  15,  1975  in  another  bunch  of  civil  writ petitions; while  Civil Appeal  No. 1105 of 1975 is directed against the  aforesaid judgment  dated January  2,  1975  by which the  civil writ  petition giving  rise to  it was also disposed  of   by  the  High  Court  along  with  the  other petitions. Certificates of fitness have been granted for all the appeals.  There is  no controversy  in regard to some of the basic  facts and  they  are  quite  sufficient  for  the disposal of the appeals. 36      A  sale   notice  was   published  by  the  authorities concerned for the auction of licences to open country liquor shops in  Singhbhum district with effect from April 1, 1966, including an  outstill shop at Bhirbhania. Appellant Ayodhya Prasad gave  the highest  bid which was knock ed down in his favour, and  he deposited two months’ licence fee in advance at the  rate of  Rs. 3,650/-  per month. He applied on March 22, 1966 to the Kolhan Superintendent of Singhbhum to settle a piece  of  land  for  establishing  an  outstill  shop  at Bharbharia, but  the application  was rejected  on September 27, 1966  because of the objection raised by some members of the  District   Consultative  Committee.  The  villagers  of Bharbharia also  opposed the  opening of  the outstill shop. The shop  could not  therefore be  established  there.  ‘The appellant how  ever obtained  a piece  of  land  in  village Chittimitti and  applied on  July 30, 1966 for permission to open the  outstill shop  there. This  was  allowed  and  the appellant claimed  that he  began to  collect the  necessary material but  a mob  forcibly removed  the building  and the distillation material.  He filed  a report  with the  Police about the  incident. The  approval for  opening the outstill shop at Chittimitti was however withdrawn on October 6, 1966 and the  appellant was  asked to pay the monthly licence fee for the period April 1, 1966 to January, 1967. He denied his liability to  pay the  fee and claimed a refund of the money which had been deposited by him. His case was recommended by the Collector for remittance of the licence fee amounting to Rs. 43,800/-  for the  entire year  1966-67. He also made an application to  the Commissioner of Excise for refund of the deposit of  Rs. 7,300/-  and for payment of compensation for loss  of   anticipated  profits   and  dam   ages,  but  the application was rejected. It appears that the appellant went on bidding  at the  bids for the subsequent three years, and laid similar claims for refund and damages, but to no avail. He then  filed the bunch of writ petitions referred to above for  quashing   the  demand  notices,  but  they  have  been

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dismissed as  aforesaid by  the High  Court’s judgment dated January 2, 1975. Civil Appeal No. 825 relates to the bid for 1966-67, Civil  Appeal No.  824 relates to the bid for 1967- 68, while  Civil Appeals Nos. 826 and 827 relate to the bids for 1968-69  and 1969-70.  These may be said to be group ’A’ appeals.      Civil Appeals  Nos.  819-823  of  1975  relate  to  the applications of  appellants Thakur Prasad Sao and others for reduction of  the licence  fees for outstill liquor shops at Gua, Noamandi,  Kiriburu,  Andheri,  Goiekara,  Patajai  and Dangusposi for 1974-75. In these cases the licensees were T. P. Sao or his relations or employees. They claimed that they incurred a loss of Rs. 55,874.79 at Gua, of Rs. 26,651.45 at Noamandi, of  Rs. 39,389.53  at Kiriburu of Rs. 35,169.40 at Andheri, of  Rs. 11,649.87  at Goekera,  of Rs. 11,705.95 at Patajai and of Rs. 11,657.21 at Dengusposi.      The appellants  claimed  that  there  was  rivalry  and enmity with  Bishwanath Prasad  and  his  brother  who  made speculative bids  at the  auction, as  a result of which the outstill shops  were settled  for uneconomic  amounts. Their grievance was that the Deputy Commissioner did not discharge his duty  of refusing  to allow  the manifestly  speculative bids although the percentage of increase in the licence fees ranged between 37 24 to  130 per  cent when  for other  shops the increase was below 12  percent. The  appellants filed  application  under section 39  of  the  Bihar  and  Orissa  Excise  Act,  1915, hereinafter referred  to as  the Act,  for reduction  of the fees for  the year  1974-75, but  they were  rejected by  he Board  of  Revenue.  They  then  filed  the  aforesaid  writ petitions in  the High  Court and have now filed the present appeals because  the petitions  have been  dismissed by  the High Court’s  impugned judgment  dated March 15, 1975. These will be referred to as group ’B’ appeals.      As has been stated, the remaining Civil Appeal No. 1105 of 1975  is also  directed against  the High  Court’s common judgment dated January 2, 1975. It relates to the grant of a licence to  the appellant for establishing outstill shops at Mahuadom,  Barahi,   Asnair,  Aksi  and  Kabri,  in  Palamau district. The  appellant applied  for a  direction  for  the refund of  Rs. 2,71,340/-  which had  already been  realised from him,  and for  restraining the realisation of a further sum of  Rs. 1,40,680/-  on the ground that there was no quid pro quo for the fee, but without success. The High Court has taken the  view that the amounts in question were not due on account  of  fees,  but  were  payable  for  leases  of  the exclusive privileges which had been granted to the appellant in respect of the outstills.      It is  in these  circumstances that  these appeals have come up for consideration before us.      As has  been stated,  the controversy  in these appeals relates to  the grant  of licences for establishing outstill shops which  are also  known as "jalti bhattis". That system has been  described in paragraph 253 of the Bihar and Orissa Excise Manual,  Volume III,  hereinafter refer red to as the Manual, as follows:-           "By this system a certain number of stills for the      manufacture of  country spirit  are  allowed  within  a      certain area.  The holder of an outstill licence pays a      certain sum  per  men  sem  for  manufacturing  country      spirit in  his outstill and selling it by retail on his      premises. No  attempt is made to regulate the strengths      or the prices at which spirit is manufactured or It has  been stated  in paragraphs 254 and 255 of the Manual

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that no  . definite area is fixed within which each outstill has the  "monopoly of  supply of  country spirit", but their number is  regulated according  to rules,  and five miles is taken roughly  as the  minimum distance of one outstill from another.      It has  been argued  on behalf  of the appellants, that what was  granted to them was not the exclusive privilege of manufacturing and  selling country  liquor in retail, in the areas for which the licences were granted, and that the High Court erred in holding that such an exclusive  privilege had been granted  under section 22 of the Act. It has been urged that the  licences in  question fell  within the  purview of section 30 of the Act 38      We  have   described  the  essential  features  of  the outstill system,  and there  can be no doubt that the holder of  a  licence  under  the  system  acquires  the  right  to manufacture country  spirit in  his outstill  and sell it by retail "in  his premises"  without any  restriction  on  the strength or  price at  which the  spirit is  manufactured or sold. Moreover  he has  the monopoly  of  manufacturing  and supplying country  liquor within  his  area.  The  right  is therefore clearly  an exclusive privilege within the meaning of section  22(1) (d) of the Act and it is futile to contend that the  licences in  question were merely licences for the retail sale  o f  spirit for  consumption  on  the  vendor’s premises within  the meaning  of section  30 of the Act. The High Court was therefore quite correct in taking that view.      It may  be  mentioned  that  the  appellants  have  not produced their  licences in  support of  the contention that exclusive privilege  of the nature referred to above was not granted  to   them  even   though  the   licences  were  for establishing outstills  in the  area covered  by them. It is however not  disputed that the licences were granted in Form 30 (Volume  II, Part  I, Bihar and Orissa, Excise Manual) on the  condition   that  the   appellants  would  pay  to  the government, in  advance. the  monthly fee mentioned therein. It is  nobody’s case  that the  licences were  cancelled  or suspended under section 42 of the Act for any of the reasons mentioned  in   the  section,  or  that  the  licences  were withdrawn under  section 43  so as to entitle the appellants to remission  of the  fee payable  in respect  of them or to payment of compensation in addition to such remission, or to refund of  the fee  paid in advance. It is also not the case of the  appellants  that  they  surrendered  their  licences within the meaning of sub-section (1) of section 44 so as to justify the  remittance of  the fee payable by them, or paid by them  in advance. In fact it has clearly been provided in sub-section (2)  of section  44 that  the provisions of sub- section (1)  ’shall not  apply in  the case of a licence for the sale  of any  country  liquor  in  the  exercise  of  an exclusive privilege  granted under  section 22.  It is  true that in  its judgment  under appeal  (in Civil  Appeals Nos. 824-827 of  1975) the  High  Court  has  observed  that  the petitioner  before  it  was  at  liberty  to  surrender  the license, but  it appears that in taking that view it did not notice sub-section (2) of section 44 even though it had held that what  was granted  was  an  exclusive  privilege  under section  22.   The  licences  of  the  appellants  therefore remained in  force for  the  periods  for  which  they  were granted and,  by virtue of the express provisions of section 45, they could have no claim to compensation.      In such  a situation,  counsel for  the appellants have placed considerable  reliance on paragraph 121 of the Manual and have argued that the High Court erred in taking the view

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that the  instructions contained   in  it had  no  statutory force and  its benefit  was not available to the appellants. Reliance in this connection has been placed on Sukhdev Singh and  others   v.  Bhagatram  Sardar  Singh  Raghuvanshi  and another(1), Laljee  Dubey and  others v.  Union of India and others(2) Union of India v. K. P. Joseph and others(3).      (1) [1975] 3 S.C.R 619.        (2) [1974] 2 S.C.R. 249.                   (3) [1973] 2 S.C.R. 75. 39      Paragraph 121  of the Manual states, inter alia, that a person whose  bid has been accepted by the presiding officer at the  auction must  pay the  sum required  on  account  of advance  fee   immediately.  It   states  further  that  the purchaser would  be liable  for any  loss that may accrue to government in  case it becomes necessary to resell the shops for a lower sum in consequence of his failure to pay the sum at the  time of  the  sale.  Then  there  is  the  following subparagraph on  which reliance   has been placed by counsel for the appellants:           "Deposits will  be returned  to a person to whom a      licence  may   be  subsequently   refused  because  the      Magistrate declines  to grant  him  a  certificate,  or      because he  is unable  to obtain  suitable premises and      satisfies the  Collector that  he has  made  bona  fide      endeavor to  secure such or if a licence be refused for      any other adequate reason." It would  thus appear  that the sub-paragraph deals with the "deposits" made  immediately on account of advance fees, the consequences of  the failures  to make  such payment and the return of those "deposits" to the person to whom the licence may subsequently  be  refused  because  (1)  the  Magistrate declines to  grant him a certificate or because he is unable to obtain  suitable premises  in  spite  of  his  bona  fide endeavors  or (ii) for any other adequate reason. But it was not the  case of  the  appellants  that  the  licences  were "subsequently refused" to them for any reason whatsoever. So even if  it were assumed, for the sake of argument, that the instructions contained  in paragraph 121 were binding on the authorities concerned, that would not matter for purposes of the present  controversy as  it does not relate to refund of the deposits  referred to  in paragraph 121. In this view of the matter,  it is  not necessary for us to examine here the larger question  whether the  instructions contained  in the Manual were  made under any provision of the law and created any rights  in favour of persons whose bids were accepted at public auctions  of the  shops. It  may  be  mentioned  that counsel for  the appellants  have not  been able to refer to any other  - provision of the law under which the appellants could claim  remission ,  of the  price or the consideration for the  exclusive privilege  of manufacturing  and  selling country liquor.      It has  however. been  argued that as appellant Ayodhya Prasad did  not succeed  in locating  the outstill  shop  at Bharbharia in spite of his best efforts, and he was also not successful in  locating it at Chittimitti, he was not liable to pay  the fee.  It has been pointed that even the approval for locating  the   shop at  Chitimitti was withdrawn by the Superintendent of  Excise on  October 6,  1966, and  Ayodhya Prasad’s case  for remitting  the sum  of Rs.  43,800/-  was recommended by  the  Deputy Commissioner of Singhbhum on May 3, 1967  on the  ground that  he could not open the shop for reasons beyond his-control. It has therefore been urged that there was no lack of bona fides on the part of the appellant and it  was a  matter of  no consequence  that  he  did  not surrender his licence.

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    It will  be recalled  that it  was an  incident of  the outstill system  that the  holder of an outstill licence was allowed to manufacture country      4-390SCI/76 40 spirit within  a "certain area" and he paid a certain sum of money per  mensem for  manufacturing country  spirit in  his outstill and  "selling it by retail on his premises". It was therefore permissible for appellant Ayodhya Prasad to locate the shop  at Bharbharia  or at  some  other  suitable  place within his  area, with  the permission of the Collector. The notice which  had been  issued for  the public auction is on the record and condition No. 5 thereof expressly states that the department  would not  be responsible  for providing the place for  the location  of the  outstill. Moreover  it  was expressly stated  that the  outstill at  Bharbharia would be settled purely  as a  temporary measure on condition that an undisputed  site   was  made  available  for  it.  There  is therefore nothing  wrong with  the view  taken by  the  High Court that  the responsibility  for finding  a suitable site was of  the appellant, and there is no justification for the argument that  nothing was  payable by  him because he could not locate  the shop in spite of his best efforts. It may be that  the  Deputy  Commissioner  recommended  his  case  for remission, but  that I  would not  matter when the appellant was liable  to pay  the money  under the  law governing  his licence. The  appellant in  fact retained  the 1 licence all through and  continued to  make  the  highest  bids  at  the subsequent public  auctions for  the years  1967-68, 1968-69 and 1969-70  and thereby  prevented others  from undertaking the responsibility  of establishing  the outstill and paying the price  admissible to the department. As has been stated, the approval  for opening  the outstill shop at Chittimitti, was withdrawn  on October  6, 1966,  and the  demand for the licence fee  was made  on January  9,  1967.  Even  so,  the appellant did  not take  any action to save himself from any such liability in the future and, on the other hand, went on making  the   highest  bids  in  the  subsequent  years  and incurring similar  liability to pay the price even though he was not able to establish his outstill anywhere in any year. It is  therefore difficult  to reject  the contention in the affidavit of  the respondents that there must have been some other reason  for him to do so, particularly as the location of his shop was to be on the border of l the State.      It has also been contended that the High Court erred in holding that  the State  Government had the power to require the appellants  to pay  the amounts  under  demand  as  they represented consideration  for the  contracts. It  has  been argued that this Court’s decision in Nashirvar etc. v. State of Madhya  Pradesh and  others(1) and Har Shankar and others etc. v.  The Deputy  Excise and  Taxation  Commissioner  and others etc.(2)  related to  the Excise  laws of other States and did not bear on the present controversy. The argument is however futile  for we  have given  our reasons  for holding that what  was granted  to the  appellants was the exclusive privilege of manufacturing and selling country liquor within the meaning of section 22(1) (d) of the Act, and it has been expressly  provided   in  section   29  that   it  would  be permissible for  the State Government to accept payment of a sum in  "consideration" of  the  exclusive  privilege  under section 22.  The decisions of this Court in Nashirwar’s case and Har Shankar’s case have set any controversy in      (1) [1975] 2 S.C.R. 861.       (2) [1975] 3 S.C.R. 254. 41 this respect at rest, so that it is well settled that as the

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State has the exclusive right and privilege of manufacturing and selling  liquor, it  has the  power  to  hold  a  public auction for  the grant  of such  a right or privilege and to accept the  payment of  a sum  therefor.  It  was  therefore permissible for  the State  to frame  rules for the grant of licences on  payment of  fees fixed by auction, for that was only a  mode or  medium for  ascertaining the best price for the grant  of the  exclusive privilege  of manufacturing and selling liquor.      As has  been stated,  Group ’B’  appeals relate  to the claim for reduction of the licence fees for the liquor shops concerned. It  has been argued by counsel for the appellants that as  the Collector  did not discharge his duty under the instructions contained  in paragraph 130 read with paragraph 93 of  the  Regulations,  the  Board  acted  arbitrarily  in refusing the  order reduction  of the  amounts of  the  fees which  were   the  subject-matter   of  the   demands  under challenge. It  has been  urged that  the  bids  were  highly speculative and should have been reduced.      It  has  been  strenuously  argued  on  behalf  of  the respondent State of Bihar that the instructions contained in the Regulations  were not  issued under any provision of the law and  could not  give rise  to any right in favour of the appellants. Reference  in this  connection has  been made to M/s Raman  and  Raman  Ltd.  v.  The  State  of  Madras  and others(1) and  R. Abdulla  Rowther v.  The  State  Transport Appellate  Tribunal,  Madras  and  others(2).  It  has  been pointed out  that there  are three  volumes of the Bihar and Orissa Excise  Manual, 1919.  It  has  been  stated  in  the preface to  Volume I  that it  is  complete  in  itself  and contains the  whole of  the law and the rules which have the force of  law "relating to excise opium." Volume II contains the "whole  of the law and the rules which have the force of law relating to excisable articles other than opium." It has been stated in the preface to Volume III that it consists of the Board’s  "instructions with regard to excisable articles other than  opium" and that references have been made to the Government Rules  and the  Board’s Rules having the force of law. There  is however  no such  reference to  any  rule  in regard to instructions Nos. 130 and 93. But quite apart from the  question   whether  these   instructions  were  legally enforceable, we  have examined  the  question  whether  they could justify the argument that the appellants were entitled to reduction of the amounts of the fees payable by them.      Instruction No.  93 mentions  the circumstances when it would be advisable to accept bids other than the highest. It states that it is not an absolute rule that the highest bids must, on every occasion, be accepted. It states further that the presiding  officer at  an auction  "may also refuse bids which he considers to be purely speculative or which are the outcome of  private enmity", and that what is desired is not the highest  fee obtainable,  but a  fee that  can fairly be paid out  of the  profits of  a  shop  without  recourse  to malpractices. There  is there-fore nothing in the rule which could be  said to  give rise  to a  right in  favour of  the appellants for  reduction of the amounts demanded from them. Instruction No. 130 merely states that reduction of licence      (1) [1959] Supp. (2) S.C.R. 227.   (2) A.I.R. 1959 S.C.                                                         896. 42 fees, during  the currency  of a licence, can be made by the Board under  section 39  of the  Act. It  does not therefore advance the  case of the appellants for, under that section, the Board  has been given that power, "if it thinks fit", to order a  reduction of  the amount of fees payable in respect

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of a  licence, "during  the unexpired  portion of the grant" which is  not the  case of  the appellants. In fact all that has been  argued on  behalf of the appellants is that as the instructions contained in the note appended to paragraph 130 of the  Regulations have not been complied with, their legal right to  claim the  benefit of  the note  has wrongly  been denied to them. The note reads as follows,-           "Note-ordinarily  it   is  not   the   policy   of      Government to  allow reduction  in excise  settlements.      The licensees  to a  large extent, have only themselves      to thank  if they  exceed in  their bidding  the figure      which should  return them  a  reasonable  profit  under      normal conditions,  and they are not therefore entitled      to any reduction of fees as of right. The observance of      this principle is the more important because it must be      remembered that  each remission  is likely to aggravate      the evil  and encourage speculative bidding in the hope      that  should   the  speculation  turn  out  a  failure,      Government will not insist on full payment. A remission      should not  be granted merely because working at a dead      loss has  -. been  actually proved. Each case should be      dealt with on its own merits. Where, for example, it is      proved that the Collector has not fulfilled his duty in      refusing to  allow manifestly  speculative bids and has      failed to  stop the  bidding when  a  figure  has  been      reached  which,   under  normal  conditions,  might  be      expected to  return a  reasonable rate of profit to the      vendor, the question would be whether the action of the      Collector was  so flagrantly  opposed to the principles      enunciated from  time  to  time  by  Government  as  to      necessitate remedial  action. Such  action  should  not      take the  form of  any promise of resettlement with the      existing licensees.  It can  only take  the form  of  a      reduction in the amount of the existing licensees.           It should  not be very difficult for an officer in      a contract  supply area  to realise  the stage at which      bidding becomes purely speculative. He knows the issues      of spirit  during the previous year and the cost to the      vendor including  duty, carriage, establishment charges      and the  like, and  should thus be able to estimate the      figure beyond  which a  prudent man  would not  bid. If      after warning  the bidder,  that this  point  has  been      reached, the  latter still  wishes to  take the risk no      case for  remission can  arise. The  case is,  however,      different where  exceptional reasons which would not at      the  time   be.  foreseen,  operate  adversely  to  the      interest of the licensee but at the same time it is not      the duty of Government to safe guard licensees from the      effects of their own imprudence or ignorance." 43 It would appear that there is nothing in the note to justify the argument  that it  gave rise to a right in favour of the appellants to  obtain a  reduction of  the fees. As has been pointed out, that was clearly a matter within the discretion of the  Board of  Revenue under section 39, and the wordings of the  note appended  to paragraph  130 could not overreach that provision  of the  law. Moreover,  the question whether the circumstances  mentioned in  the note  were  at  all  in existence in  the case  of the  appeals under consideration, was a  question of  fact which  could not  be tried in these proceedings. The decision in Rohtas Industries Ltd. v. S. D. Agarwal and  another(1) to  which  our  attention  has  been invited on  behalf of  the appellants, can be of no avail to them.      As has  been stated,  the writ petition which has given

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rise to  Civil Appeal  No. 1105  of 1975 raised the question whether the  refund of  fees claimed  by the  appellant  was permissible on the ground that there was no quid pro quo for the  same.   The  High   Court  has  rightly  rejected  that contention for  the reason that the amounts in question were payable for  the licences  which had  been granted  for  the exclusive privilege in question and, as has been shown, that argument is  no longer available to the appellant in view of this Court’s  decisions in  Nashirwar’s case (supra) and Har Shankar’s case (supra).      There is  thus no  force in  all these appeals and they are hereby dismissed with costs. It is however ordered that, as has  been agreed  by the Advocate-General the authorities concerned  would   recover  the   amounts  in   question  in instalments spreading  over a  period of three years in case of those  appellants who  are able  to furnish  security for payment within that period. P.B.R.                                    Appeals dismissed.      (1) [1968] 3 S.C.R. 108. 44