CASE NO.: Special Leave Petition (civil) 20173-74 of 1996 PETITIONER: STATE OF BIHAR AND ORS. RESPONDENT: SHEO NARAIN JAFSWAL PVT. LTD. AND ORS. DATE OF JUDGMENT: 24/10/1997 BENCH: SUJATA V. MANOHAR & D.P. WADHWA JUDGMENT:
JUDGMENT
1997 Supp(4) SCR 724
The Judgment of the Court was delivered by
MRS. SUJATA V. MANOHAR, J. The State of Bihar is petitioner no. 1 before
us. Under the Bihar Excise Act, 1915, Section 22 provides that the State
Government may grant to any person, on such conditions and for such period
as it may think fit the exclusive privilege, inter alia, of manufacturing
and supplying wholesale any country liquor within any specified local area.
Under sub-section (2) no grantee of any privilege under sub-section (1)
shall exercise the same unless and until he has received a licence in that
behalf from the Collector or the Excise Commissioner. Under Section 29
instead of or in addition to any duty leviable under this Act, the State
Government may accept payment of a sum of consideration for the grant of
any exclusive privilege under Section 22. Section 43 which deals with the
power to withdraw licences provides in sub-section (5) as follows:
“43(5) : For the purpose of calculating the amount due to the State
Government…………the amount of fee payable on account of the licence
for the period during which it was in force shall be taken to be the sum
bearing the same proportion to the total fee for the whole period for which
the licence was settled as the period during which the licence was actually
in force bears to the full period for which the licence was settled.”
For the purpose of grant of exclusive privilege for wholesale manufacture
and supply of country liquor, the State of Bihar has been divided into nine
zones. The Board of Revenue invites tenders for the grant of the privilege
of manufacture and wholesale supply of country liquor in sachets/bottles
for each zone. Prior to 1995 the exclusive privilege was granted pursuant
to the tenders received only to one supplier per zone. However, for the
period 1st of July, 1995 to 31st of March, 1999, a notice inviting tenders
was published in the Bihar Gazette on 3rd of June, 1995 in which it was
stated in Clause 3(c) that in one zone more than one contractor may be
granted the privilege of setting up sacheting plant and supplying of
country liquor in sachets/bottles in the districts falling within the zone.
Pursuant to the tenders which were invited petitioner no. 1-State has
granted this exclusive privilege to more than one contractor in each of the
zones. The dispute relates to the licence fee which is payable by each of
the contractors within one zone. The respondents are some of these
contractors.
It is common ground that for the purpose of determining the minimum licence
fee payable in respect of each zone, the State arrived at the figures of
gross sale of country liquor in each zone during the previous financial
year 1994-95. The annual licence fee for the subsequent financial year is
determined at the rate of Re. 1 per L.P. litre of liquor supplied in the
previous financial year. Schedule 1 to the tender notice gives the name of
the zone, the consumption of country spirit in 1994-95 and other
particulars. For example, in zone 1, that is to say Patna Zone, consumption
of country spirit in 1994-95 was 31.66 lacs of L.P. litres. The licence fee
for Patna zone for 1995-96 is accordingly worked out at Rs. 31.66 lacs. In
zone 2, Gaya zone, the consumption of country spirit in 1994-95 is 23.29
lacs L.P. litres. The licence fee for Gaya zone is accordingly worked out
at the rate of Re. 1 per L.P. litre.
Clause 2(b) of the tender notice which was in Hindi has been translated in
English by the High Court as follows:
“From each contractor of special privilege, the licence fee calculated on
the basis of Re. 1 per L.P. Litre on the annual guaranteed quantity in the
particular zone in which they have to supply country liquor, shall be
payable in equal proportion in advance in one lumpsum. If in the financial
year the supply of liquor is in excess of the annual guaranteed quantity,
the licence fee shall be enhanced to the same extent.”
The same term is incorporated in the licence which has been granted to each
of the contractors; but in somewhat more explicit language. It is contained
in condition no. 6 of the licence. The English translation of condition no.
6 (the original is in Hindi) as rendered by the High Court is as follows:
“6. In one zone, country liquor shall be supplied by more than one
wholesaler. Every licensee shall have to deposit through challan in the
Secretariat Treasury at Patna the advance licence fee in equal proportion
in one lumpsum at the rate of Re. I per L.P. litre on the basis of
consumption in the year 1994-95 as shown in Schedule 1 to the tender in
respect of the zone in which country liquor is to be supplied. If in the
financial year the supply is in excess of the guaranteed quantity, then the
licence fee enhanced to that extent shall be payable by all the
contractors. The licence fee is payable annually, and shall be payable in
advance in each financial year, otherwise, the licence shall not be
effective.”
Petitioner No.l has charged from each of the contractors in one zone the
full licence fee calculated at the rate of Re. 1 per L.P. litre based on
consumption for the year 1994-95 in that zone. But according to the
respondents, the licence fee so calculated is for each zone. The grantees
of exclusive privilege/contractors in each zone have to pay this total
licence fee in equal proportions.
Condition No. 6 of the licence requires each of the licensees in one zone
to deposit the advance licence fee in equal proportions. Clause 2(b) of the
tender conditions also requires each contractor to pay the licence fee in
equal proportion” in advance. The Hindi word used for “in equal proportion”
is “Samanupatic.” The High Court has correctly translated the word
“Sarnanupatic” as “in equal proportion.” Looking to condition 2(b) of the
tender conditions and condition 6 of the licence, the High Court has held
that each of the licensees in one zone will have to pay the total licence
fee in equal proportions. For example, the licence fee for the Patna zone
is Rs. 31,66,000. If there are five licensees for the Patna Zone, each
licensee will pay l/5th of this amount in advance. According to petitioner
no. 1, this interpretation is incorrect. What is intended is that each of
the licensees in one zone will pay the full amount of the licence fee. The
words “in equal proportion” according to petitioner no.l are referable to
(I) the second halves of clause 2(b) of the tender notice and condition 6
of the licence which deal with a proportionate increase in the licence fee
if, in the financial year in question, the supply of liquor is in excess of
the previous years’ quantities. (2) They also contend that the word “equal
proportion” has a reference to a proportionate reduction in the licence fee
if the period for which the licence fee is to be paid is less then one
financial year. They contend that the tender notice in question related to
the period 1st July, 1995 to 3 1st of March, 1999. Therefore, for the first
financial year the period involved is 1st of July, 1995 to 31st of March,
1996. Hence the licence fee payable by each licensee will have to be
proportionately reduced to cover the period only of nine months instead of
twelve months.
This contention has been rightly rejected by the High Court. The words “in
equal proportion” occur in the first part of condition 2(b) of the tender
notice and condition 6 of the licence. In the first part, there is no
reference to the proportionate reduction in licence fee on account of the
shorter period involved. The first part merely says that each of the
contractors or licensees will have to pay in equal proportion the licence
fee in advance. There is no reference to the period of the licence at all.
The words “in equal proportion” in this sentence will have to be ignored if
the interpretation of the State is to be accepted. For the excess sales
during the period, the second half of each of these clauses expressly
provides for increase to the same extent in the A licence fee. There is no
reference in either of these clauses to a period of less than a financial
year being covered by the licence fee. Section 43(5) expressly provides in
the statute itself for such proportionate reduction. The High Court has,
therefore, rightly come to the conclusion that what is provided in the
tender conditions as also under the licence is collection of the total
licence fee for the zone from each of the contractors in that zone in equal
proportions.
It was pointed out by learned counsel for the State of Bihar that since the
licence fee is in the nature of consideration for the sale of exclusive
privilege to supply liquor in wholesale, it is open to the State to charge
from each contractor in a zone the full licence fee. But if the tender
conditions and the conditions of the licence do not so provide, the State
will not be able to collect the full licence fee from each of the
licensees/contractors. Our attention was also drawn to the minutes of the
Cabinet Meeting as indicating the purpose of giving the exclusive privilege
to more than one contractor being to collect more licence fees. But if this
intention is not conveyed in the terms and conditions of the tender and the
licence, such an intention , even if D expressed in the minutes of the
Cabinet Meeting, would not be of any avail.
The petitions are, therefore, dismissed.
