Suresh Chandra vs Joga Singh Bisht

1 | Page further orders. The Appellant filed an application to vacate

the interim order, which was dismissed. Aggrieved

thereby, the Appellant approached this Court by filing the

above appeals.

2. Sh. Balkar Singh was allotted the licence for a foreign

liquor shop at Pithoragarh on 23.03.2020 by the District

Level Allotment Committee for the period from01.04.2020

to 31.03.2021. As the shop was not being operated from

06.05.2020, Sh. Balkar Singh was directed to open the

shop. He submitted an application on 12.05.2020

requesting for cancellation of the allotment of the shop.

On receipt of the said application, the authorities directed

Sh. Balkar Singh to surrender the licence in accordance

with the provisions contained in Section 36 of the Excise

Act after depositing the amount for first and second

instalments along with cancellation charges prescribed for

the Month of May, 2020. Balkar Singh did not respond to

the letter written by the authorities. The amount

deposited by the licensee, Sh. Balkar Singh, was

confiscated and the allotment of the foreign liquor shop

license in his favour was cancelled under the provisions of

Section 34 of the Excise Act. Sh. Balkar Singh was

2 | Page informed on 28.05.2020 that the process for resettlement

of the shop shall be carried out according to the

Uttarakhand Excise Rules 2020-21 and the Uttarakhand

Excise (Administration of Licensees of Domestic/Foreign

Liquor and Beer Retail Sale) Rules, 2011and the loss that

the revenue may suffer after resettlement shall be

recovered from Sh. Balkar Singh.

3. An advertisement was issued by the District Excise

Officer, Pithoragarh on 02.06.2020 regarding resettlement

of the licence for foreign liquor shop Pithoragarh 1 B.

Applications were invited from interested persons for

issuance of a licence for the remaining period of the

financial year 2020-2021. The revenue fixed for the

remaining period of the financial year 2020-2021 was

Rs.7,70,62,471/-. As none responded to the said

advertisement, the District Excise Officer, Pithoragarh

issued another advertisement dated 06.06.2020. The

Appellant participated in the allotment process and he was

declared as the successful bidder and his bid for

Rs.3,46,78,112/- was accepted. The licence for foreign

liquor shop at Pithoragarh was allotted to him by an order

3 | Page dated 09.06.2020 subject to the conditions mentioned

therein.

4. The First Respondent filed a writ petition questioning

the allotment of the foreign liquor shop in favour of the

Appellant on the ground that the allotment in favour of the

Appellant resulted in loss of revenue. According to him,

the allotment of the foreign liquor shop in favour of the

Appellant for Rs.3,46,78,112/- could not have been made

when the total revenue was fixed in the advertisement was

Rs.7,70,62,471/-. By an order dated 06.08.2020, the High

Court dismissed the Writ Petition on the ground that the

First Respondent did not have locus standi to challenge the

allotment of the foreign liquor shop in favour of the

Appellant as he did not participate in the process of

resettlement of the liquor shop. In the appeal preferred by

the First Respondent against the judgment of the learned

Single Judge, a Division Bench of the High Court stayed the

operation and execution of the settlement of the foreign

liquor shop in favour of the Appellant until further orders

by an order dated 21.08.2020. It appears that the Division

Bench was prima facie satisfied that the First Respondent

offered a much higher amount in spite of which the licence

4 | Page was granted for a lesser amount in favour of the Appellant.

The Division Bench observed that locus standi cannot be a

ground for dismissal of the Writ Petition when there is an

allegation that the Government is losing revenue of a huge

amount of Rs.5 crores. The High Court was of the opinion

that the issue of loss of revenue is of immense public

interest. In view of the loss of revenue, the Division Bench

felt that the matter requires consideration.

5. The interim order dated 21.08.2020 was sought to be

vacated by the Appellant who filed an application which

was dismissed on 08.09.2020. The High Court recorded a

finding that it was aware about the proceedings that

were initiated for recovery of the deficient amount from

the original allottee, Sh. Balkar Singh. The High Court

observed that the State could not have allotted the shop

for an amount of Rs. 3.5 crores and there is a likelihood

of higher amount being offered in re-settlement.

6. Admittedly, the First Respondent was an

unsuccessful bidder at the time of original allotment in

favour of Sh. Balkar Singh. In the re-settlement of the

liquor shop after Sh. Balkar Singh expressed his inability

5 | Page to continue, the First Respondent did not participate in

the process. The Appellant was the highest bidder for

the allotment of the liquor shop and his offer of

Rs.3,46,78,112/- for the remaining period of the financial

year 2020-2021 was accepted.

7. The High Court committed an error in proceeding

on the premise that the First Respondent has offered a

much higher amount and that the State had wrongly

accepted a lesser amount offered by the Appellant. As

stated above, the First Respondent did not participate in

the resettlement process. The High Court was further

convinced with the contention of the First Respondent

that the State is suffering a loss of Rs. 5 crores. The

Government has brought to the notice of the Division

Bench that after re-settlement of the license in favor of

the Appellant, the shortfall of the annual revenue value

of Rs.7,70,62,471/- was being recovered from Sh. Balkar

Singh and that the recovery certificate to the effect of

Rs.4,08,70,998/- was issued to Sh. Balkar Singh. It is

clear from the above that there is no loss to the

Government. The liquor shops were closed for a short

6 | Page period of time in view of the Covid-19 pandemic. After

the permission was granted for reopening of the shops,

Sh. Balkar Singh expressed his inability to continue

running the shop. The resettlement of the foreign liquor

shop was for the remaining period of the financial year

2020-2021. The First Respondent filed a Writ Petition,

complaining about loss of revenue to the Government as

the resettlement of the foreign liquor shop was for a

lesser amount. In our opinion, the Writ petition was

rightly dismissed by the learned Single Judge on the

ground that the First Respondent has no locus standi to

maintain the Writ Petition. The Division Bench committed

an error in staying the operation of the resettlement in

favor of the Appellant, even after the compliance of the

conditions of the licence by the Appellant who deposited

the money as directed. In view of the order passed by

the Division Bench, the Appellant was restrained from

continuing his business activity. To examine the

bonafides of the First Respondent, we asked the learned

counsel appearing for him to get instructions as to

whether the First Respondent would be ready to offer a

7 | Page higher amount in view of the submission made on his

behalf before the Division Bench of the High Court. After

obtaining instructions, the learned counsel for the First

Respondent submitted that he is not willing to deposit

Rupees 8 crores, but would be willing to pay something

more than the offer made by the Appellant which was

accepted. A perusal of the pleadings would show that

there is no allegation of malafides on the part of the

Government. The only ground on which the High Court

interfered with the license is on the basis of the

purported loss caused to the revenue. In spite of the

Division Bench being informed that there is absolutely no

loss to the revenue in view of the recovery proceeding

initiated against Sh. Balkar Singh, the interim order was

not vacated. As a consequence, the Appellant was

prevented from continuing with his business in spite of

paying the amount of Rs.3 lakhs per day to the

Department. Interference with a valid license granted in

accordance with rules is unwarranted. The First

Respondent has misled the High Court by contending

that he is willing to offer a higher amount. Such an offer

8 | Page should not have been entertained as he did not

participate in the resettlement process. If such petitions

are encouraged, there will be no finality to any license or

permission granted by the Government, especially when

there is no complaint of any malafides, favoritism or

nepotism. In view of the above, the orders of the High

Court dated 21.08.2020 and 08.09.2020 are set aside.

8. The Appellant shall be permitted to continue with

the business activity of running the foreign liquor shop

forthwith, subject to compliance of the terms of

resettlement. It is needless to mention that in case of

non-compliance, suitable action may be taken by the

authorities. The Appellant could not run the foreign

liquor shop due to the interim order passed by the High

Court on 21.08.2020. The Writ Petition filed by the

Petitioner being frivolous in nature is, therefore,

dismissed with cost of Rs.1,00,000/- to be paid to the

Appellant within a period of four weeks from today.

9 | Page ...................................

J. [L. NAGESWARA RAO]

..................

................J. [HEMANT GUPTA]

..................

................J. [AJAY RASTOGI] New Delhi, October 26, 2020.

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