LexASSISTANT EXCISE COMMISSIONER AND ORS. versus ISSAC PETER AND ORS. ETC. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
ASSISTANf EXCISE COMMISSIONER AND ORS. ETC. ETC.
A
v.
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ISSAC PETER AND ORS. ETC. ETC.
FEBRUARY 22, 1994
[J.S. VERMA, YOGESHWAR DAYAL AND
B
B.P. JEEVAN REDDY, JJ.]
Excise: Kera/a Abkari Act/Kera/a Abkari Shop (Disposal in Auction)
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Rules, 1974-SectionslS-A, 21, 25, 28, 29,./Rules 6(26), (39), 8(1), (3)-Liquor
vend-Supply of a"ack to licensees l1y State-State's obligation-Contract be- c
tween State and licensees governed by statutory rules and conditions of
lice11ce-Supply of additional quantities demanded by licensees not obligatory
on State-Obligation only in respect of monthly quota-Rebate/remission or
adjustment cannot be claimed for non-supply/short supply of additional qua11-
tity-Executory contract'-Sections 55, 56 of Contract Act can11ot be invoked- D
Doctrines of unjust enrichment,. promissiory estoppel, estoppel by conduct,
legitimate expectation, fairness and reasonableness-Not attracted.
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Contract Ac4 1872: Sections 55 and 56-Frustation of contract-Con-
tract between State and contractor-Minimum guarantee quota of
goods-Supplied by State to Contractor-State unable to supply additional E
quantity demanded by Contractor-Suoh supply being discretionary, contrac-
tor cannot invoke the provisions of Ss.55 and 56.
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Administrative law: Doctrines--Unjust-f'romissory estoppel-Estoppel
by conduct-Legitimate expectation-Fairness and reasonableness under
Natural justice-Applir:ability of in contracts between State and contractors F
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for supply of additional quantity of goods which is discretionary and governed
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by statutory prol'isions.
In Kerala the anction for the arrack shops for the excise year 1981-82
was held on 27.3.1981. The successful bidders commenced their business
after obtaining the necessary licences. The monthly quota of arrack an· G
nounced for the shops was regularly supplied by the Government. How-
ever, the Government could not supp!Y in full the additional quantities
applied for by the licensees from time to time. They tiled writ petitions
.,.
before the High Court alleging that the authorities could not supply the
additional quantities requested by them and were at the same time, H
67
68
SUPREME COURT REPORTS
[1994] 2S.C.R.
A demanding the instalments due. The Writ Petitions were allowed by a
Division Bench of the High Court. However, another Division Bench ef the
High Court took a diferent view mainly on the basis of Rule 6(26) and held
that the licensees cannot claim any remission or abatement In the amount
payable by them nor can they claim any damages for non-supply of
B additional quantitiesdemanded. The present appeals were preferred both
by the State of Kerala and the licensees.
On behalf of the State it was contended that under the Auction Rules
the Government was obiged to supply the monthly quota and the supply
of additional quantities was in the discretion of the authorities; that Rule
C 6(26) was a total bar to the claim for remission/abatement by the licesees;
that whatever additional quantities were available with the Government
had been issued to the licensees according to Rules; and that there was no
promissory estoppel on the part of the Government.
D Kerala Abkari Shops(Disposal iu Audion) Rules, 1974 read with the
On behalf of the licensees it was contended that Rule 8(1) of the
conditions or licences created a statutory obligation upon tile Government
to supply the additional quantities to meet the requirements of the con-
suming public; that the Government was estopped from contending that
its obligation was only to supply the monthly quota and nothing more, that
E the monthly quota fixed was unrealistic and insufficient; that there was
legi\imale expedion on the part of the licensees; that the doctrine or
fairness was applicable; and that since the failure to supply additional
quantities resulted in partial frustration or the contract, the licensees were
entitled to claim abatement/remission of the amounts payable by them.
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Allowing appeals by the State and dismissing the appeals preferred
by the licensees, this Court
HELD: 1. According to sub-rule(l) of Rule 8 of the Kerala Abkari
Shops (Disposal in Auction) Rules, 1974, supply of monthly quota Is
G obligatory upon the government while the supply of additional quan-
tity/q,uota is discretionary. The condition of licence Is however of am·
blguous nature. While the first Division Bench of the High Court
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understood the said condition as sExcerpt shown. Read the full judgment & AI analysis in Lexace.