STATE OF BIHAR AND ORS. versus M/S SHEO NARAIN JAISWAL PVT. LTD. AND ORS.

Citation: [1997] SUPP. 4 S.C.R. 724 · Decided: 24-10-1997 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Dismissed
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Judgment (excerpt)

A 
STATE OF BIHAR AND ORS. 
v. 
M/S SHEO NARAIN JAISWAL PVT. LTD. AND ORS. 
OCTOBER 24, 1997 
B 
(SUJATA V. MANOHARANDD.P. WADHWA, JJ.] 
Excise Law: 
Bihar Excise Act, 1915: Sections 22,29,43(5)-Manufacturer and 
C supplier of country liquor-Gran/ of exclusive privilege-Imposition of licence 
fee-More than one contractor/licensee in one zone-F ul/ licence fees charged 
from each r:rmtraclor-Held, tender conditions and conditions of the licence 
do not provide for collection of full licence fees from each contractor-Each 
licensee in one zone liable to pay total licence fee in equal proportion. 
D 
Words & Phrases : 
'Equal Proportion '-Meaning of 
The respondents were contractors engaged in manufacture and supply 
E in wholesale of country liquor. Section 22 of the Bihar Excise Aet 1915 
empowers the State Government to grant exclusive privilege, inter alia of 
manufacturing and supplying wholesale country liquor within any specified 
local area. Tenders were invited for grating exclusi"e privilege. Initially the 
exclusive privilege was granted to only one contractor1 per zone. Notice inviting 
tenders was published in the Gazette and exclusive p~ivilege was granted to 
F more than one contractor in each zone. A dispute relating to payment oflicence 
fee by each of the contractors within one zone arose. The State Government 
charged from each of the contractor in one zone full licence fee. On challenge, 
the High Court held that each of the licensees in one zone will have to pay the 
total licence fee in equal proportions. Hence the present petition for special 
G leave to appeal by the State Government. 
The contention of the State Govt. was that the word "equal proportion" 
has a reference to a proportionate reduction in the licence fee if the period 
for which the licence fee was to be paid was less than one year. It was also 
H contended that since the licence fee was in the nature of consideration for 
the sale of exclusive privilege to supply liquor in wholesale, it was open to the 
724 
STATE v.S.N.JAJSWAL 
725 
state to charge from each contractor in a zone the full licence fee. 
Dismissing the appeal, this Court 
HELD: 1.1. The High Court has rightly come to the conclusion that 
what is provided in the tender conditions as also under the licence is collection 
A 
of the total licence fee for the zone from each of the contractors in that zone B 
in equal proportions. (729-A] 
1.2. The words "in equal proportion" occur in the first part of conditions 
2(b) of the tender notice and condition 6 of the licence. In the first part, there 
is no reference to the proportionate reduction in licence fee on account of the 
shorter period involved. The first part merely says that each of the contractors C 
or licensee will have to pay in equal proportion the licence fee in advance. 
There is no reference to the period of the licence at all. For the excess sales 
during the period, the second half of each of these clauses expressly provides 
for increase to the same extent in the licence fee. There is no reference in 
either of these clauses to a period of less than a financial year being covered 
by the licence fee. Section 43(5) expressly provides in the statute itself for D 
such proportionate reduction. (728-G-H) 
2. lfthe tender conditions and the condition of the licence do not provide· 
for charging full licence fee from each contract or in a zone, the State will 
not be able to collect the full licence fee from each of the licensee/contractor. 
Attention was also drawn to the minutes of the Cabinet meeting as indicating 
the purpose of giving the exclusive privilege to more than one contractor being 
to collect more licence fee. But if this intention is not conveyed in the terms 
and conditions of the tender and the licence, such an intention, even if 
expressed in the minutes of the cabinet meeting, would not be of any avail. 
E 
1729-CJ p 
CIVIL APPELLATE JURISDICTION: Special Leave Petition (C) Nos. 
20173-74of1996. 
From the Judgment and Order dated 20.5.96 of the Patna High Court in 
C. W.J.C. No 920/96 (R) and 927of1996 (R) 
G 
Rakesh Dwivedi, Y,V. Giri, Yogeshwar Prasad, V.A. Motha, Dr. Shankar 
Ghosh and Shanti Bhushan, B.B Singh, Kumar Rajesh Singh, Praveen Kumar, 
Ranjit Kumar, S.P. Sinha, Chandra Bh;.ishan, Ms. Anu Mohla, G.P. Bimal, M.K. 
Choudhary, P.K. Bajaj, S.K. Verma, Ms. Rachna Gupta, Ranbir Yadav and 
Munish Mishra for the appearing parties. 
H , 
726 
SUPREME COURT REPORTS (1997] SUPP. 4 S.C.R
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