Bijender Singh vs State of Haryana and Others

Alok Singh, J.—Present writ petition has been filed challenging the show cause notice dated 7.6.2007 (Annexure P-5), order dated 15.2.2008 (Annexure P-6) both passed by respondent No. 3 and order dated 8.10.2009 (Annexure P-7) passed by respondent No. 4 whereby the respondents are effecting recovery of an amount of Rs. 19,90,000/- from the petitioner.

Brief facts of the present case are that the petitioner applied for grant of outlet of country liquor (L-14A) for Kila Jafargarh for the financial year 2006-07. As per Clause 14(i) of the conditions and Procedure, to be followed for the allotment of licences in the auction, the successful allottee has to deposit a security of 20% of the annual licence fee of the respective licensed outlet, out of which 5% of the licence fee shall have to be deposited on the day of the draw of lots and 5% of the licence fee within seven days of the allotment/draw of lots on or before 31.3.2006. As per the above terms, an amount of Rs. 50,000/- was deposited in cash by the petitioner with the respondents immediately on 17.3.2006 and a further amount of Rs. 1,00,000/- was deposited with the respondent on 20.3.2006. The petitioner could not deposited next installment of security amount within the stipulated time; the petitioner made an application to the Assistant Excise and Taxation Commissioner, Jind dated 1.4.2006 requesting to cancel allotment of the vend and to refund the security amount. Application was duly received. Thereafter, vend was re-allotted in favour of Wazir Singh on 25.9.2006 after a delay of about six months. The Department issued show cause notice dated 7.6.2007 to the petitioner for recovery of Rs. 19,90,000/-and thereafter, passed an order dated 15.2.2008 for recovery of Rs. 19,90,000/- from the petitioner for losses suffered by the Department for about six months. This action of the Department is in question in the present writ petition.

We have heard learned Counsel for the parties and perused the record.

It is not a matter of dispute that as per Rule 14(ii) of the General Conditions and Procedure, if a person whose allotment has been accepted, fails to deposit the amount in time, his license shall be deemed to have been cancelled automatically and the competent authority may re-allot the vend and shall recover the deficiency in license fee and all expenses of necessary allotment from the licencee. Condition 14(ii) is reproduced hereunder:

Section 14(ii):- If any person, whose allotment has been accepted, fails to deposit the amount of security in time or refuses to accept the licence, his licence shall be deemed to have been cancelled automatically and security deposited if any, shall be forfeited and the licence may be re-allotted by draw of lot or private contract by the competent authority and any deficiency in the licence fee and all expenses of such re-allotment or attempted re-allotment shall be recoverable from the said person in the same manner as laid down in Section 60 of Punjab Excise Act, 1914.

Undisputedly, the petitioner has made an application on 1.4.2006 requesting the Department to cancel the allotment showing his inability to run the vend and to deposit the amount. Now the question is if either security is not deposited within the time or licensee makes a request for cancellation of the vend, within what time the Department should re-allot the vend?

In the present case, application was submitted on 1.4.2006. Department was so slow on the application of the petitioner that re-auction took place after six months i.e. on 25.2.2006. It is expected from the government department to act promptly for re-allotment of the vend keeping in view the financial interest of the government. The Department cannot say that whenever re-auction would take place, previous licencee would be liable to pay deficiency of the licence fee for the lapse of the Department.

Had the Department been prompt, huge deficiency in licence fee would not have accrued recoverable from the petitioner - licencee. We are of the firm view that in such matters prompt action is required from the government machinery. Six months time taken in the present case cannot be appreciated. Of course, licencee is bound to make good the deficiency in licence fee for the period the vend remained closed. However, that period should be reasonable. We are of the view that ordinarily the Department should re-allot vend within 60 days from the date of failing of the previous licencee in making payments as per the time schedule. In the present case, the petitioner has requested the Department vide application dated 1.4.2006 to cancel his allotment/license. Hence, re-auction should have been within two months therefrom i.e. by 31.5.2006. For the lapse on the part of the Department, the petitioner cannot be blamed and burdened for the deficiency in licence fee. The petitioner has already deposited Rs. 7 lacs pursuant to our direction dated 21.2.2009. In the peculiar facts and circumstances of this case, we find that penalty of Rs. 19,90,000/- is not justified and amount of Rs. 7 lacs deposited by the petitioner should be accepted towards the deficiency in licence fee.

Petition is disposed of with the direction that Rs. 7 lacs deposited by the petitioner shall be accepted towards the deficiency in licence fee and no further demand shall be made from the petitioner.