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TMI Blog1993 (9) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 1981. The writ petitioners were the highest bidders in respect of respective shops. They made the necessary deposits and obtained permits to commence their business with effect from July 1, 1981. The arrack licencees from Pondicherry territory also deposited the three months' rental at the inception of the excise year as required by the rules. They drew supplies from the Government depots and carried on their business for a period of three months. Thereafter they approached the High Court at Madras by way of writ petitions for issuance of an appropriate writ order or direction directing the respondents in the writ petition to forbear from collecting the 'kist' amount in respect of the each of the shops and for directing the respondents further to supply the quantity of arrack at the rate at which it was supplied during the previous excise year (i.e., 1980-81). 2. So far as the arrack licencees from Mahe area are concerned, they did not deposit the three months rental as required by the rules. They drew the initial supply of arrack, did business for 15 days and thereafter abandoned the business. They too approached the Madras High Court by way of writ petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducting the auctions that the rate of supply is being altered, the writ petitioners assumed that arrack will be supplied at the same rate it was supplied for the previous excise year i.e., 1980-81. For the previous excise year, arrack was supplied at the rate of one decalitre for an annual bid of ₹ 18,000/-. It is on the said basis and assumption that the petitioners had given their bids which were far in excess of the bids received for the previous excise year. Only after they paid the mounts and commenced the business that they were apprised of the change in the rate of supply which came as a shock to them. Since the licencees have no other source of supply, and because they are obliged to sell at the price fixed by the Government, they were not able to realise even the 'kist' amount (monthly installments) by the sale of arrack supplied to them. Even at the rate of one decalitre for an annual bid of ₹ 34,000/-, the licencees were bound to and were incurring losses. There cannot be a contract which is so constituted that it can result only in loss to the licencee. At the said rates of supply, no licencee can ever meet even the monthly 'kist', let al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said rate of one decalitre for an annual bid of ₹ 18,000/-. Indeed, all these arguments are nothing but mere afterthoughts. The writ petitioners of Pondicherry area paid the deposits, took permits and licences and did business without any complaint for a period of three months. Only when auctions in the neighbouring State of Tamil Nadu were conducted wherein the bids went up exceedingly high as compared to the previous year's bids, on account of which arrack became dearer in Tamil Nadu shops, driving the consumers to Pondicherry shops that the writ petitioners started asking for more supplies to meet the said heightened demand. When the Administration did not supply such excessive supplies, they came forward with the writ petitions. The story put forward in the writ petitions is one fabricated to buttress their case in the writ petitions. Indeed, when the licencees made representation for alteration of the rate of supply, the Administration reduced it from one decalitre for an annual bid of ₹ 40,000/- to one decalitre for an annual bid of ₹ 34,000/-. There is no question of the writ petitioners suffering any loss in the circumstances. It was also submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be no order as to costs. 8. In these appeals, it is submitted by Shri A.S. Nambiar, learned Counsel for the Administration (Union of India) that the High Court has exceeded its jurisdiction in granting the relief it did. The High Court, it is complained, has actually re-made the contract between the parties. It has specifically altered the terms and conditions of the agreement and licences prescribed by law. No writ can be issued contrary to the provisions of law. Indeed, the writ petitions ought to have been dismissed on the ground that the writ petitioners were seeking to enforce contractual rights. The writ petitions raised a purely contractual dispute. There was no violation of any statutory provision on the part of the Administration. The Administration did not violate any of the obligations under the contract. There was no statutory right inhering in the writ petitioners to demand the supply of arrack at a particular rate. The only obligation of the Administration was to make an equitable distribution of the available supplies among the several licencees. The theory that the writ petitioners are bound to suffer losses at the rate of supply prescribed by the Administratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m one decalitre per day for an annual bid of ₹ 40,000/- to one decalitre per day for an annual bid of ₹ 34,000/- was with effect from October 27, 1981, by which date again about four months' period (out of 12 months' licence period) had expired. In the above state of facts, the High Court was perhaps justified in holding that the contracts entered into between the licencees and the Administration require to be modified in the peculiar facts and circumstances of this case. In our opinion, the main vitiating factor was the omission to mention the rate of supply at the time of conducting the auction itself even where the Administration had the right to revise it during the licence period. It is, however, not necessary for us go into the question - what effect the said omission had upon the contracts. The licencees - writ petitioners did their business for the entire excise year under the interim orders of the High Court. They were allowed to draw supplies and pay 'kist' calculated on the basis of ₹ 18,000/- per annum for supply of one decalitre per day. The contract period is over long ago. At this stage all that remains to be done is to devise a form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and also include profit. Since this formula cannot satisfactorily be evolved by us for lack of relevant material before us, we remit the matter to the Government. The Government shall, after hearing the writ petitioners, evolve a formula which ensures the above margin. While evolving the formula, the Government shall take into account the change in the sale price and the change in the rate of supply referred to hereinabove. On such determination, if the licencees are found liable to pay any further amounts, the same shall be paid by them and recovered in accordance with law. If, on the other hand, the Administration is found liable to refund any amounts, the same shall be refunded to the licencees. We must reiterate that the formula evolved by us is peculiar to the facts of this case and has been evolved in view of the exceptional facts and circumstances of this case, and shall not be treated a precedent. The writ appeals are accordingly allowed with the above directions. The judgment of the High Court under appeal is modified accordingly in so far as it pertains to the licencees of Pondicherry area/territory. No costs in these appeals. 13. Now coming to the licencees of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feel disturbed that the High Court chose to pass an order of interim injunction restraining the authorities from taking any action by way of cancelling the licence of forfeiting the earnest money deposit, without simultaneously calling upon the petitioners to deposit the 'kist' amount and other deposits according to the Rules. The result of the said order was that the licensees-writ petitioners neither paid any deposits or 'kist' amounts nor did they do any business in the shops. They just kept quiet. They continued to abandon the shops; meanwhile the excise year was over. When the writ petitions came up for final hearing, the licencees of these four shops argued that inasmuch as they have not drawn any supplies and have not done any business in the respective shops, they should not be made liable for paying the 'kist' amount or deposits in accordance with the rules. This plea has been rejected by the High Court - in our opinion rightly. The petitioners having abandoned the shops and thereafter having obtained an interim injunction of the nature indicated above - thereby restraining the authorities from taking any action against the licencees for recovery of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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