Harish Singh vs State Of Uttarakhand And Others

Pankaj Purohit, J

In view of the reasons stated, Delay Condonation Application (IA/2/2025) is allowed. Delay in filing the counter affidavit is condoned. Counter affidavit filed by respondent no.4 is taken on record.

Learned Counsel for the petitioner submits that petitioner's father participated in the lottery process for allotment of 'Indian made Foreign Liquor Shop' Roorkee, District Haridwar for the Financial Year 2020- 2021. Petitioner's father was declared successful in the lottery process and he was asked to complete certain formalities, as required, but his father did not accept the lottery and he even did not complete the formality of depositing licence fee. Consequently, Earnest Money Deposit (EMD) of Rs.11.25 lakh deposited by petitioner's father was forfeited. Subsequently, the shop was allotted to a third person and the loss of revenue was sought to be recovered from the petitioner's father. The order to this effect was passed on 16.07.2020 by the District Magistrate, Haridwar. Feeling aggrieved, petitioner's father preferred an appeal under Section 11(1) of the Uttarakhand Excise Act, 1910 (to be referred to as the 'Act') before the Excise Commissioner, Uttarakhand who too dismissed the appeal vide order dated 06.08.2024. Thereafter, father of petitioner died on 18.09.2024 and petitioner stepped into his shoes. Subsequent thereto, petitioner challenged both the orders in revision preferred under Section 11(2) of the Act. The revision was also dismissed vide order dated 19.02.2025 by the Revisional Authority. Feeling aggrieved, petitioner is before this Court challenging all the aforesaid orders.

It is contended by learned Counsel for petitioner that the offer of State was not accepted by the petitioner's father and he did not complete the requisite formality to constitute a contract between him and the State. Therefore, the order of recovering the loss of revenue from petitioner's father is bad in law and cannot sustain. He further submits that loss of difference can only be recovered from petitioner's father if he became a licensee of the State and not from a person who is mere an allottee. It is also submitted that the Earnest Money Deposit (EMD) amounting to Rs.11.25 lakh was already forfeited for not completing formalities by petitioner's father and petitioner has also been blacklisted for future.

Per contra, learned Standing Counsel appearing for the State vehemently argued that the action of respondent-State is right in recovering the dues of loss of revenue from petitioner. Apart from the averments made in the counter affidavit, it is the submission of learned State Counsel that as per the 'Explanation' to Section 36 of the Act, petitioner is a holder of licence. He also relied upon the Rule 18 of Uttaranchal Excise (Settlement of Licenses for Retail Sale of Foreign Liquor and Beer) Rules, 2001.

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

For ready reference, the 'explanation' appended to Section 36 of the Act is quoted below: -

"36. Surrender of licence to sell by retail-............

Provided that..............

Explanation- The words 'holder of a licence' as used in this section includes a person whose tender or bid for a licence has been accepted although he may not actually have received the licence.'

From a perusal of aforesaid explanation, it is reflected that the said explanation speaks about the 'holder of licence'. The petitioner cannot be termed to be holder of licence in view of the fact that he has not completed the formalities. Mere being successful bidder in the lottery process cannot make him holder of licence. He could become a licensee only when he completed the requisite formalities and after depositing the licence fees, and finally when the licence is issued in his favor. In the case in hand, nothing like that has happened. Therefore, the explanation appended to Section 36 of the Act is not attracted in this case.

The next submission made by learned State Counsel is regarding Rule 18 of the Rules of 2001. For the sake of convenience, Rule 18 is also quoted below: -

18- Surrender of licence - A licensee may surrender his licence after giving at least one months notice in writing to the licensing authority under provisions of section - 36 of the Act. On receipt of such application the licensing authority will take steps for recovering all outstanding excise dues from his security deposit. The licensing authorty shall also proceed for resettlement of the shop without delay for the remaining period of the excise year. Any shortfall in government revenue shall be recoverable from the outgoing licensee as arrears of land revenue.

So far as Rule 18 is concerned, the same is attracted where a person has been given a licence and subsequently, he surrenders the licence which causes loss in getting allotment to a new person. However, it is not so in the present case.

In such view of the matter, both the arguments advanced by learned State Counsel are bereft of merit and the same are rejected. It can safely be observed that mere selection in the lottery process under law is an offer, and until and unless it is accepted, the contract is not executed between the parties. It is further clarified that for not completing the requisite formalities resulted into forfeiture of the Earnest Money Deposit of Rs.11.25 lakhs made the petitioner and declaring him blacklisted.

In view of the above, the writ petition is allowed. The orders dated 16.07.2020, 06.08.2024 and 19.02.2025, impugned in this writ petition, are hereby set aside.

Pending application, if any, stands disposed of.