STATE OF ORISSA AND ORS. versus HARINARAYAN JAISWAL AND ORS.

Citation: [1972] 3 S.C.R. 784 · Decided: 14-03-1972 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Appeal(s) allowed

Cited by 11 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

784 
STATE OF ORISSA AND ORS. 
v. 
HARINARAYAN JAISWAL AND ORS. 
March 14, 1972 
(l(. S. HEGDE AND P. JAGANMOHAN REDDY, JJ.] 
Bihar and Orissa Excise Act, 1915 "" amended upto October 6; 1970, 
Ss. 22 and 29-Scope of--Order made under s. 29 giving 
power to 
Governmen~ to accept or reject bid without assigning any retJSon-1/ 
violative of Arts. 14 and 19(1) (g)-Power of Government lo sell 
the 
privi'fege of selling country liquor by private negotiation-Scope of.-
The first respondellt was carrying on business of selling country liquor. 
In exercise of the powers conferred by s. 29(2) of the Bihar and Orissa 
Excise Act, 1915, the appellant issued an Order and in pursuance of 
that Order a date was notified for selling by public auction the exclusive 
privilege of <oiling by retail,. country liqudr in 8 ~hops. The respon. 
dent was tl1' highest bidder but his bid was rejected because the Gov· 
ernment was of the view that inadequate prices had been offered as 
a 
result of collusion between the bidders. 
Thereafter, tenddrs were called 
for and the appellant accepted the tender in respect of one shop and 
rej!cted the others a• it was o.gain of the opinion that the price offered 
was inadquate. Thereafter, the remaining 7 shops were sold by private 
negotiation for substantially higher prices. 
A writ petition filed by .the respondent in tho High Court was allowed 
mainly on the ground that the power confered on the Goveirnment by 
cl. (vi) of the Order, that no sale sh"11 be deemed to be !Ina! unless 
confirmed by tho State who shall be at liberty to accept or rejjoct without 
assigning any reason, was an unguided power violative of Arts. 14 and 
19(1) (g). 
Allowing the apP''"l to this Court, 
HELD : (I) Section 22 of tht Act confers power on thi: Govern· 
ment to grant to any person on such cpnditions and for such period 
as it J11ay think fit the exclusive privilege of selling in retail country 
liquor; afld s. 29 empowers the Govemi:nent to accept payment in consi-
jeration of the grant either by calling. teiiders or by auction or other-
,vise as it may by general order direct. 
The powers conf,erred on the 
State Governmen.t by ss. 22 and 29 are absolute. 
The Government 
Cannot be said to have conferred on itself arbitmry power under cl. (vi) 
of its Order,/assed under s. 29(2), because, the power that the Govern-
ment ·reserve for itself under th.at clause is nothing more than what was 
conferred on it by the Legislature under the sections. Since the validity 
of the sections was not challenged the validity of the Order could not 
also be challenged. [792 B·FJ 
(2) Even otherwise, one of the important purposes of selling the 
exclusive right to §ell liquor in wholesale or ~tail· is to raise revenue; 
and excise revenue forms an important part of every State's reVenue. 
The Government is a guardian of the finances of the Stale and is expected 
to protect its financial interests. 
The fact that the prices fetched by the 
sale of the privilege to sell country liquor is an· excise revenue does not 
change the nature of the right in the G<>Vemment. 
Therefore, 
the 
A 
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H 
ORISSA v. HARi NARAYAN (Hegde, J.) 
785 
legislature has empowered the Government to se~ that there is no leakage 
in the revenue. It was for the Government to OOcide whether the price 
offered in an auction is a<k!quate and the conclusion readhed by ihe 
Government does not affect anyone's rights. [793 D-F; 794 F-0] 
(3) Public auctions are held to get the best possible price and there 
is no completed contract till the bid is 
accepted. 
There is, 
therefore, 
no basis for contending that the owner of the privileges who 
had 
offered to sell them cannot decline to accept the highest bid if he thinks 
that the price offered' is inadequate, and, it makes no difference that the 
Government was the seller. [.793 G-H; 794 AJ 
( 4) If the Government is exclusive owner of the privileges, the res-
pondent could not rely on Art. 14 and 19{1)(g), because; citizens can-
not have any fundamental right to trade or carry on business in the 
properties or rights belonging to Government, nor can there be any in-
fringement of Aft. 14 if Oovernment tries to ~t the best available price 
for its valuable rights. 
Further there is no inherent right in a citizen to 
sell intoxicating liquor by retail. [793 A; 794 A-Bl 
Coverjee B. Bharucha v. The Excise Commissioner and the Chief 
Commissioner, Ajmer and Ors., .[1954] S.C.R. 

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