M. Palanisamy vs The Special Commissioner and Commissioner (Prohibition and Excise), The District Collector, Revenue Divisional Officer-cum-Sales Officer and A. Mohamed Yusuf

Shivappa, J.—The Petitioner has challenged the order dated 9.6.1995 passed by Respondent No. 1 in K. Dis. No. (L) 22113/95.

The brief facts to decide the question involved in this case are as follows: The District Collector of Coimbatore, in exercise of the powers

conferred under the Tamil Nadu Liquor (Retail Vending) Rules, 1989, hereinafter referred to as the Rules for short, notified for auction-sale of the

IMFL in Coimbatore District for the excise year 1995-96 (1.6.1995 to 31.5.1996). Notice of auction was published as per Rule 5 of the ''Rules'',

and Sale Officer conducted the auction. The Petitioner gave the highest bid for shop No. 33, located in Ward No. 24 of Tiruppur Municipal area.

The bid amount was Rs. 4,75,000/-. The sale was provisionally confirmed by the Sale Officer. On 21.5.1995 show cause notice was issued by

Respondent No. 2 herein and the same was served on 22.5.1995. The Petitioner herein submitted his explanation. Respondent No. 2 on hearing

and on consideration of the explanation, ordered for re-auction and the re-auction was conducted on 26.5.1995. Respondent No. 4 was the

highest bidder and the bid amount was Rs. 10,75,000/- and he paid the said amount on that date.

The Petitioner herein filed an appeal before Respondent No. 1. Respondent No. 1 directed the auction to continue and he stayed the

confirmation until further orders. The appeal was dismissed on 9.6.1995. The re-auction held on 26.5.1995 was confirmed on 13.6.1995. After

confirmation, licence was issued on 14.6.1995. The Petitioner preferred a revision before the Government under Rule 32(2) of the Rules (Vide

Government letter No. 222987, P & E-VI, dated 14.6.1995). He also approached this Court and this Court granted an interim order.

Respondent No. 2 submitted in his counter statement that in the previous year, the sale price was more than Rs. 6,50,000/- in other similarly

placed shops in the locality. Since the bid was very low, compared to the previous years, under Rule 11(2) of the Rules, a show cause notice was

issued and the same was served, Petitioner was heard, enquiry was conducted and later ordered for re-auction on 26.5.1995 at 11 a.m., and five

persons were present and took part in the auction and two persons submitted their offers through tender. The privilege amount fetched in the re-

auction was Rs. 10,35,000/-, as bidded by Respondent No. 4 herein. The auction was confirmed. It is also stated that re-auction was conducted

after due publication, following the rules.

Respondent No. 4, who is the successful bidder in the re-auction, contended casting serious aspersions on those who participated in the auction

inter alia saying that the bidders at the auctions have formed a syndicate and want to monopolise the business by not outbidding each other so that

the State gets uneconomical revenue. It was further alleged threats were administered to successful pushing out a party like Respondent No. 4

from participation in the auction. In spite of threats, he participated and paid the highest bid and remitted the amount and on such remittance,

confirmation was made. After confirmation, he started the business on 15.6.1995 and 16.5.1995 and thereafter he was directed to close the shop

until further orders. It is further submitted that the Petition is not maintainable and there is no non-compliance with any of the provisions in the

Rules, he was provided with an opportunity of being heard'' and further he has availed the remedy of revision before the Government.

On these pleadings, the question for consideration in this Writ Petition is whether the re-auction held on 26.5.1995 is valid in law?

The grievance of the Petitioner is that there is infraction of Rules 5, 11(2) and 12 of the Rules. He complained of violation of the principles of

natural justice and contended that Respondent No. 2 has not applied his mind to the requirements of Sub-clause (2) of Rule 11 of the Rules. Show

cause notice was in cyclostyled form and he has not applied his mind to invoke Rule 11(2) and contended the order for re-auction is arbitrary. The

Petitioner urged similar contentions in the appeal before Respondent No. 1 To appreciate the contention of the Petitioner regarding the Rules, Rule

11(2) is extracted and it is thus:

The Collector may, either suo motu or on appeal, review any case of confirmation by the sale officer. If he is satisfied, he may set aside the order

of confirmation after recording his reasons, in writing and after providing opportunity of being heard to the auction purchaser. If on review, the

Collector cancels the order of confirmation of sale of the privilege by sale officer, the Collector shall order the re-auction of the shop and shall also

direct the refund of the privilege amount to the auction purchaser.

Rule 5 contemplates publication of notice of auction in form No. 1 in leading Tamil and English dailies at least 21 days in advance of the date of

auction specifying the place, date and time of auction and such notice shall also be placed on the notice-board of the Taluk Office and the Revenue

Divisional Officer concerned in the Collector''s office. Then comes the Rule regarding earnest money deposit, followed by the Rule regarding

conduct of auction. Rule 8 relates to receipt of tender, while Rule 9 is about bidding. Rule 10 contemplates the remittance of privilege amount by

auction purchaser. The three requirements of Rule 11(2) are that, first the Collector must satisfy himself that the auction requires reconsideration.

Such satisfaction has to be by recording reasons in writing and that has to be done after providing an opportunity of being heard. In the show cause

notice, the Collector has reflected the price fetched in the previous years and there is a reference that the amount quoted for the present excise

year is very low and he called upon the Petitioner to show cause in writing with necessary document as to why confirmation order should not be

cancelled under Rule 11(2) of the Rules. Time was granted to file explanation upto 23.5.1995 and also directed him to appear in person. The

Petitioner filed his reply to the show cause notice, a portion of which reads thus:

The shop mentioned above was located at ward No. 25. In the previous years, no Indian made foreign liquor shop was located in ward No. 24.

Only during this year a shop has been established in ward No. 24. Near the above said ward No. 24 two shops were located at ward No. 34 and

two shops at Vellur Panchayat Union, and since 5 shops were located very nearby in the same road, I hereby inform that we are not in a position

to bid higher amount.

The District Collector passed an order on 23.5.1995 and in paragraph 2 therein, he has referred that he examined the offer with reference to

previous years and in the year 1992-93 the shop was sold for Rs. 6,50,000/- and since the present bid is very low, compared to the previous

year, decided to exercise the power under Rule 11(2), after considering the explanation and holding that the explanation was not acceptable,

ordered re-auction and directed to refund the amount deposited towards the bid amount and the earnest money deposit of Rs. 10,000/- in favour

of the Petitioner and to issue necessary bill for the said amount.

Respondent No. 4 has placed the figures relating to revenue due to re-auction, as follows:

Sl. Shop Original Re- auction Difference

NoNo. auction

15 3,56,000.007,11,000.00 3,55,000.00

25 5,15,000.008,65,000.00 3,50,000.00

33 5,76,000.0010,35,000.005,60,000.00

39 4,25,000.008,19,000.00 3,94,000.00

64 5,25,000.0022,00,000.0016,75,000.00

67 3,00,000.0011,00,000.008,00,000.00

68 2,45,000.008,50,000.00 6,05,000.00

73 2,39,000.007,20,000.00 4,81,000.00

74 3,25,000.007,50,000.00 4,25,000.00

10.75 3,25,000.008,50,000.00 5,25,000.00

61,70,000.00

The above figures show that the State has realised a sum of Rs. 61,70,000/- as the difference in revenue, due to re-auction.

Learned Counsel contended in view of the decision in Sukkeswar Phukan v. Emperor ILR 38 CS 789 that the stereotyped printed form is

indication of non-application of mind and also invited my attention to a decision in Kasim Peer and Company v. Deputy Transport Commissioner,

Shimoga Division 1988(2) Kar. L.J. 411 to support his contention that there is violation of the principles of natural justice. 38 CS 789 is a case,

where the Court deprecated the adoption of stereotyped printed form on the ground they are intended for information to the person whom it is

sought to arrest, but when the statute contemplates recording of reasoning, that implies application of mind independently. In the instant case, the

situation is not the same. It is not the form that matters, whether it is in printed form or in stereo-styled form. But, the fact is whether the show

cause notice reflected the reason as to why the authority is re-considering for further auction. In 1988(2) Kar. L.J. 411, the Court held that natural

justice cannot be presumed unless on receipt of the explanation from the Petitioner. In the instant case, there is an explanation, the reason why re-

auction should be held has been reflected, taking into consideration the auction amount in the previous year. Therefore, the two decisions have no

application.

Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund.

Inadequacy of the price offered in the highest tender would be a cogent ground for negotiating with the tenderers giving them equal opportunity to

revise their bids with a view to obtain the highest available price. Since reason was indicated in the show cause notice, explanation was called for,

time was granted to file explanation, directed to appear in person, opportunity was provided, that opportunity was availed of and the Petitioner

indicated in the reply that we are not in a position to bid higher amount. On this stand, in order to get higher revenue, the Respondent ordered for

re-auction. The Respondent, who possessed the power under Rule 11(2) used it for public benefit and he has acted fairly and adopted the

procedure, which indicates fairplay in action, namely, explanation heard and considered. After ordering re-auction, he also directed refund. There

is also proper publication, as required in law. Thus, I see no infirmity or non-compliance with any provision of the Rules, as contended by the

Learned Counsel for the Petitioner.

Respondent No. 1 in his order has considered that the powers given to the Collector under Rule 11(2) are wide and they are essentially to

safeguard the revenue interests of the Government. He has taken into consideration the number of factors which go into determining whether a

shop should be brought for re-auction; such as competitiveness of the bidding, amount fetched by other similarly placed shops, reports of collusion

among bidders, etc. Ultimately, it is the subjective assessment of the Collector whether the commercial potential of the shop has been reached or

not, is a determining question for re-auction. He held that these are contractual matters between the Government and the auction-purchaser and it

is always open to the Government to realise the best possible revenue by resorting-to procedures contemplated in rules governing such auctioning.

He has also observed that the right of the Appellant was in no way affected by such an action inasmuch as he had the liberty to participate in such

re-auction. He has noted if the commercial potential of the shop is, in fact higher, it has to be tested in the re-auction. In the instant case, re-auction

fetched Rs. 10,25,000/- as against Rs. 4,75,000/- in the original auction. Vindicating the decision for re-auction was just and it was in the interests

of fetching more revenue to the State and I see no infirmity in the order of Respondent No. 1. The Commissioner has also considered the entire

circumstances that led to re-auction, keeping in view the relevant rules.

Learned Counsel for the Petitioner has invited my attention to Food Corporation of India Vs. M/s. Kamdhenu Cattle Feed Industries, where

the Supreme Court has held that power to reject the highest tender should not be exercised arbitrarily. So also, he invited my attention to Ram and

Shyam Company Vs. State of Haryana and Others, in support of his contention mat he was not given an opportunity, while ordering for re-auction

and contended that the re-auction is invalid in law. In view of the stand taken in the reply notice that he was unable to offer more price than the

amount bid at the first auction and in view of the fact that he was provided with an opportunity and the re-auction was for more amount than the

earlier bid, Respondent No. 2, has kept in view the revenue of the State, while parting with its largess, and after affording an opportunity,

considered the explanation and ordered for re-auction. Hence, there is no violation of the principles of natural justice and also there is no

arbitrariness as alleged, in ordering for re-auction.

Learned Counsel for Respondent No. 4 contended that this Court cannot sit as an appellate authority over the decisions and orders of quasi-

judicial authorities; equally, it cannot do so in the case of orders of administrative authorities. In the matter of administrative action it is well known

that they have certain amount of discretion evolved in them in the interests of revenue. He further contended that the Petitioner did not raise a

contention offering a lakh of rupee more, as has been done before this Court and such a conduct of the Petitioner does not deserve consideration

because it is a subsequent event, after termination of the appeal. In Shreemati Indumati Singh Vs. The State of Bihar and Others , the Court has

held that a plea not raised before the Court below cannot be raised for the first time before a writ-Court. He also relied on a decision in Giridhari

Prusty Vs. The House Rent Controller-cum-S.D.J.M., Puri and Others, , where the Court held that it would not be permissible to examine the

correctness of the finding with reference to the subsequent events, in the sense the correctness of an order of an authority cannot be determined on

the basis of subsequent events. In Kalyani Spinning Mills Ltd. and others Vs. Smt. Sudha Sashikant Shroff and another, , a Division Bench of the

Calcutta High Court has held, at paragraph 31, thus:

Mr. Mitra relied upon an old decision reported in Dwijendra Narain Roy Vs. Joges Chandra De and Others, for the proposition that no party can

blow hot and cold at the same time and reprobate and approbate simultaneously and take a contrary stand on different occasions. It is indeed true

mat what was actually held in Dwijendra Narain Roy v. Joges Chandra De (ibid) is that inconsistent pleas cannot be allowed even in a subsequent

suit if such suit grows out of first judgment and a new defence can be ruled out mainly on two grounds (i) if it contradicts the prior decision and (ii)

if the party cannot be allowed to take up in the subsequent proceeding a position entirely inconsistent with that adopted in the previous one. It is an

elementary rule that a party litigant cannot be permitted to assume inconsistent positions in court to play fast and loose, to blow hot and cold, to

approbate and reprobate to the detriment of his opponent. This wholesome doctrine applies not only to the successive stages of the same suit, but

also to another suit than the one in which the position was taken up provided mat the second suit grows out of the judgment in the first.

Keeping in view these decisions, it is not appropriate to take into consideration an event, which is subsequent and a plea, which was never raised

by the Petitioner before the Collector or Commissioner, offering more than the bid of Respondent No. 4. Every case has to be judged from the

fact situation which emerged at the point of time when the order was passed. If subsequent event is taken into consideration, it amounts to allowing

an unsuccessful bidder to surreptitiously unsettle the settled matters and there will be no sanctity to the action taken by the authorities under the

relevant rules and amounts to converting this Court as a Sale-Hall, opening flood-gates of litigation. No doubt, revenue is a paramount

consideration. If the Petitioner, at least, had submitted before the Appellate Court that he is prepared to offer, what he offered before this Court,

there would have been some justification in the contention of the Petitioner and the Commissioner certainly would have ordered for further re-

auction in the interests of revenue. In view of the stand taken by the Petitioner, having participated in the enquiry after show cause notice, when the

authorities have acted in the interests of revenue, keeping in view the stand of the Petitioner, I see no unjustness or arbitrariness in the action of

Respondents Nos. 1 and 2.

Before parting with this case, it is better to place the feet that the Petitioner offered Rs. 1,00,000/- more than the highest bidder when the

matter, came up for admission and since the full foots were not before Court this Court directed me Petitioner to give a demand draft and informed

the teamed Government Advocate tint in the event of hanky-panky in the re-auction, in the interests of revenue, whether he would be agreeable for

re-auction, giving opportunity to all concerned, for which he filed a memorandum; but, that does not mean that is the stand of the State. After

pleading, since I am convinced that the action of Respondents Nos. 1 and 2 is bona fide and there is no arbitrariness, the draft placed before Court

shall be returned to the Petitioner.

Further, when the Petitioner has availed the statutory remedy of revision, it is not proper to allow him to have parallel remedy by invoking

Article 226 of the Constitution of India. On the ground of having availed this alternative remedy, the petition is not maintainable.

The Court issuing a writ of certiorari acts in exercise of supervisory and not appellate jurisdiction. One significance of this is that the Court will

not review finding of fact reached by the inferior Court or Tribunal, unless such finding is illegal or without affording an opportunity. The error of

law must manifest on the face of the record and a writ will not issue as a cloak of an appeal in disguise. It does not lie in order to bring an order or

decision for re-bearing of the issue raised in the proceeding. In the instant case, since I see no illegality, and the order was passed after

opportunity, and no error of law manifest on the face of the record, reconsidering the decision of Respondent No. 1 does not arise.

In the result, I make the following order; I see no ground to entertain the Writ Petition and the same is rejected. Parties to bear their respective

costs.