2013 (12) TMI 227 - HC - Indian Laws

Validity of Re-auction Notification Arrears of arrack licensees - Petitioner contended that she has fulfilled all the conditions of the confirmation order with respect to the Arrack Shops Held that - The petitioner has paid the entire amount Rupees thirty nine lakhs seventy seven thousand three hundred and eight after adjusting the Earnest Money Deposit - The petitioner agreed to produce documents relating to immovable properties from third parties without producing the documents of those licencees who are in arrears to the Excise Department. Those who are producing documents of defaulters would not be permitted to run the arrack shops, unless the entire amount due from such licencees are paid - In case, such a drastic action is not taken, it would not be possible for the Excise Department to recover the arrears - The chronic defaulters would continue to bid through their Benami, notwithstanding the non-payment of kist amount to the Excise Department - Such practice should be put an end - The petitioner is directed to produce the documents before the respondent to offer as security for due payment of balance amount Re-auction notification dated 14.11.2013 quashed decided in favour of Petitioner.

Summary

Issues:
Challenge to re-auction notification for arrack shops in Puducherry due to non-adjustment of Earnest Money Deposit, Allegation of petitioner being Benami of a chronic defaulter, Settlement of arrears by the petitioner to continue running arrack shops, Validity of producing security documents for balance payment.

Analysis:
The petitioner contested the re-auction notification issued by the Excise Department in Puducherry, claiming compliance with conditions for arrack shop leases. The petitioner had the highest bid for two arrack shops, with confirmation orders issued for both. A dispute arose regarding adjusting the Earnest Money Deposit towards lease payments, leading to the proposal of a re-auction. The Deputy Commissioner alleged the petitioner was a Benami of a chronic defaulter, requiring full payment of arrears for permission to operate the arrack shops.

Upon court proceedings, the petitioner agreed to settle the balance amount to continue the arrack business. The Government agreed to allow operation until a specified date upon full payment. The petitioner promptly paid the outstanding sum, also agreeing to provide security documents. The court emphasized the necessity of recovering arrears to prevent defaulters from operating through proxies, supporting the Excise Department's actions for public money protection.

The court directed the petitioner to submit security documents promptly for approval to resume arrack shop operations as per confirmation orders. Subsequently, the court quashed the re-auction notification based on the resolved issues. The writ petitions were disposed of without costs, and related miscellaneous petitions were closed, concluding the legal proceedings.