STATE OF HARYANA versus JAGE RAM

Citation: [1983] 3 S.C.R. 917 · Decided: 12-09-1983 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Disposed off

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Judgment (excerpt)

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STATE OF HARYANA . 
v. 
JAGERAM 
September 12, 1983 
[Y. V. CHANDRACHUD, C.J., R. S. PATHAK AND 
SABYASACHI MUKHARJI, JJ.) 
917 
Punjab Liquor Licence Rules, 1956-Rs. 36(3) and 36(24)-Sale of /iquor-
Vends by re-auc'tion or by private negotidtions--Whether. vitiated by faUure to 
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giva due publicity ? · 
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The respondellts in this batch of appeals had obtained licences to sell 
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liquor by offering highest bids at auctions held for sale of liquor·vends. On 
their failure to -'inake payn1ents due under the terms of auction •. the State 
Government resold the liquor-vends in some cases; either by re-auction or by 
private negotiations and called upon the respondents to pay. the difference 
between the an1ount which they we~e liable to pay and the amount realised by 
the resale of the vends.' In other cases, the respondents were called upon to 
pay the amounts due·under the terms of the original auction. The respondents 
filed writ petitions contesting the State·· dovernmCnt's power to demand the 
various amounts which they had defaulted in paying and the High Court 
allowed the petitions. In ;ippeals filed by the State Government, this Court 
held that since the rights in regard to manufacture and sale of intoxicants 
were vested in the State as a privilege, it was open to the State to part with 
those rights for consideration, and remanded the matter to the High Court 
calling for its. findings on whether in cases in which th~ liquor-vends had been 
resold by re-auction it waS necessary to give .. Pu~licity to the same; ~nd, if so 
whether such publicity had in fact been given. The High Court found that 
r. 36(3) of the Punjab Liquor Licence Rules, 1956, which was applicable in 
these cases, required publicity to be· given to an auction-sale and this rule 
had been substantially complied with in all cases in which re-auction had 
been held. 
Disn;issing the appeals i~ which liquor-vends· had been resold either by 
re.;auction or by private negotiations and allowing the appeals in which liquor-
vends had not been resold. 
HELD:- 1. When a rule requires •publicity• to be given to an auction-
sale, what is necessarily implied is that due steps must be taken to give suffi-
ciently advance intimation _of the intended sale and its material tCrms .to the 
members of the public or, at least, to that section of the public whicti normally 
engage in the kind of business which is the subject matter of the auctioll-sale. 
[924 BJ 
In the instant case, no notice as required by r. 36(3) was given to the 
public at all. ·Neither the time nor the date of the re·auction, nor the location 
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SUPREME COURT il.EPORfS . 
11983] 3 s.c.R. 
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or description of th(~ vend which was to be put to re-auctio.n, nor the conditions 
of the re-auction w1!re ever published by the Excise' authorities prior to the 
re-auction. What was done by the concerned authOrities was to send telegran1s 
to· Excise Officers of five districts with a request that !hey should give publicity 
to the re-auction and those officers did not take any steps to publicise ihe 
re-auction._ Since the re-auctions were not held _in accordance with the rules, 
and since, especially, due publicity was not given to' the re-auctions, the res-
pondents cannot be held liable to make good the difference between the 
amount which was payable by them and the amount which was fetched at the 
re-auction. [923 F-H, 924 A] 
2. By r. 36(24) power has been conferred to re-sell a vend by public 
auction or by private contract. But this latter power has to' be exercised with 
great care and circumspection. Public auction has to be the.,normal inode of 
selling public property. It is open to public gaze and CsChews many tempta· 
tions to which private contracts are subject. lt ~_iS.:~<i_h"}y when a public auction 
is not feasible or.has failed to attract bidders aff~t;di.t~· publicity, that a private 
contract can be negotiated for disposing of public Property or rights in such 
property. [927 B-C] 
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In cases in which re-auctions though comn1enced as scheduled were 
withdrawn and licences were granted by private negotiations on the spot even 
if there wer(' valid reasons were for revoking the decision to hold the reauctions, 
the re-auctions ~hould have been postponed and due publicity given to the 
decision to grant licences by private negotiations. 1 he Excise authorities 
could not have abruptly decided to jettison the original intention

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