STATE OF HARYANA AND ORS. versus JAGE RAM AND ORS.

Citation: [1980] 3 S.C.R. 746 · Decided: 21-04-1980 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Case Partly allowed
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Judgment (excerpt)

A 
746 
STATE OF HARYANA AND ORS. 
JAGE RAM AND ORS. 
April 21, 1980' 
[Y. V. CHANDRACHUD, C.J., P. N. SHINGHAL 
AND 0. CHINNAPPA ;REDDY, JJ.] 
Writ Jurisdiction-Article 226 of the Constitution of India, 19SOc-
Petition under reciprocal rights and obligations arising out of Contract cannot 
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be enforced-Excise duty, Fees, and Price for parting with the Privirege by 
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Sttile, explained-Punfab Excise Act (Act 1 of 1974) and Pun/ab Iiftlor 
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O Licence Rules, 1956 as amended upto 22-3-68-Whether notice of reauction 
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necessary under Rule 36(3) of the Liquor Licence Rules. 
In the auction for the financial year 1967-68 held on March 27, 1967 for 
the .retail vend known as "Biswan Mee!" Sooepat, the respondents offered the 
highest bid for a quota of Rs. 62, 100 proof litres for which they became liablo 
under condition 14(iii) of the auction to pay an amount calculated at the rate 
of Rs. 17.60 per litre that is to say, Rs. 10,92,960-00. On the bid being lrnoU-
ed in their favour, respondents deposited a •nm of Rs. 45,527-50 being 1/24th 
of the total amount payable by them by way of security for the due performance 
of the terms of the auction, as required by conditii>n No. 15(1) 0f the auction 
and Rule 36 (22A) of the Punjab Liquor Licence Rule<, 1956 as amended. 
They started operating the vend from April I, 1967. 
The successful bidder who is granted licence for retail sale of country liquor 
is required by condition No. 15(ii) of the auction read with rule 26(23):(2), 
to pay the licence fee in 22 equal instalments, each instalment being PllY•ble 
before the 10th and 25th of every month, commencing on April 10. On the 
failure of the respondents to pay the instalments due for the periods ending 
with April 10 and 25 1967, the Excise and Taxation Officer, Rohtak, gave them 
notices dated 15th and 25th April, 1967 calling upon them to make good the 
short-fall of Rs. 33,827.20 and Rs. 5,898.80 respectively, before April 20 and 
April 30, 1967. Since the respondents did not pay the amount, the Deputy 
Excise and Taxation COmmissioner, Headquarters, Haryana, gave them a notice 
calling upon them to show cause, within two days of the receipt of the notice, 
why their licence should not be cancelled under section 36(c) of the Punjab 
Excise Act, for their failure to comply with the terms of the auction in the 
matter of payment 0£ the two instalments. By their reply dated May 12, 1967, 
the respondents stated that they were illiterate villagers, that the terms of auction 
were not expl-ained to them, that the district of Rohtakl was in the grip of a 
severe drought leading to a fall in the sale of li(J,uor, that April being a sum ... 
mer month, the consumption of liquor was less as compared with the consump-
tion during winter months and that, there· was in fact no default on their part 
as alleged in the notice sent to them. On May 17, 1967, the Collector and 
Deputy Excise & Taxation CommissiOner, Haryana, passed· an order, after hear· 
ing the respondents, cancelling their licence under section 36 (b) and ( c) of the 
Punjab Excise Act with immediate effect and stating that the vend will be 
resold on May 23, 1967 at 10.00 AM. in the office of the Excise and Taxatioo 
Officer Rohtak, at the risk of the respomfen!S. 
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lli&YANA V, .JAGll MM 
747 
tOa May 22, 1967 respondents filed a Writ Petition (No. 900 of 1967) w~h 
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was ~ 
by the High Court of Punjab and Haryana on May 26, on the 
i:r<lllMI lbat it was premature. 
Jn pirsuance of the order dated May 17, the "Biswan Meel" vend, Sonepat, 
was rauctioned on May 23, 1967, the highest bid received being of 15000 
litres, ..tiich in terms 0£ money comes to Rs. 
2,46,000.00. The dilfen:nce 
between the amount which the respondents were· liable to pay under their bid 
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and tile, amount realised in the reauction comes to Rs. 7,41,577.40. 
On July 11, 1967 respondents were served with a notice dated July 7 by 
whi<lh they were called upon to pay the aforesaid amoont, failing which, they 
were warned, the amount was liable to be recovered 
as 
arrears of land 
revenue. On July 18, respondents filed a Writ Petition in the High Court chal-
lenging 1be legality of the aforesaid notice. 
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an earlier decision in Bhajan Lal Saran Singh & Co. v. State of 
PunjMI. '""' Ors., [1967] Current Law Journal, p. 460, which was affirmed by 
this G>urt in CA 1042 and 1043/()8 dt. 21-8-72, the High Court allowed the 
writ petition and quashe
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