{"id":4369,"date":"1997-10-24T00:00:00","date_gmt":"1997-10-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-and-ors-vs-sheo-narain-jafswal-pvt-ltd-and-on-24-october-1997"},"modified":"2018-09-24T12:09:04","modified_gmt":"2018-09-24T06:39:04","slug":"state-of-bihar-and-ors-vs-sheo-narain-jafswal-pvt-ltd-and-on-24-october-1997","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-and-ors-vs-sheo-narain-jafswal-pvt-ltd-and-on-24-october-1997","title":{"rendered":"State Of Bihar And Ors vs Sheo Narain Jafswal Pvt. Ltd. And &#8230; on 24 October, 1997"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">State Of Bihar And Ors vs Sheo Narain Jafswal Pvt. Ltd. And &#8230; on 24 October, 1997<\/div>\n<div class=\"doc_bench\">Bench: Sujata V. Manohar, D.P. Wadhwa<\/div>\n<pre>           CASE NO.:\nSpecial Leave Petition (civil)  20173-74 of 1996\n\nPETITIONER:\nSTATE OF BIHAR AND ORS.\n\nRESPONDENT:\nSHEO NARAIN JAFSWAL PVT. LTD. AND ORS.\n\nDATE OF JUDGMENT: 24\/10\/1997\n\nBENCH:\nSUJATA V. MANOHAR &amp; D.P. WADHWA\n\nJUDGMENT:\n<\/pre>\n<p>JUDGMENT<\/p>\n<p>1997 Supp(4) SCR 724<\/p>\n<p>The Judgment of the Court was delivered by<\/p>\n<p>MRS. SUJATA V. MANOHAR, J. The State of Bihar is petitioner no. 1 before<br \/>\nus. Under the Bihar Excise Act, 1915, Section 22 provides that the State<br \/>\nGovernment may grant to any person, on such conditions and for such period<br \/>\nas it may think fit the exclusive privilege, inter alia, of manufacturing<br \/>\nand supplying wholesale any country liquor within any specified local area.<br \/>\nUnder sub-section (2) no grantee of any privilege under sub-section (1)<br \/>\nshall exercise the same unless and until he has received a licence in that<br \/>\nbehalf from the Collector or the Excise Commissioner. Under Section 29<br \/>\ninstead of or in addition to any duty leviable under this Act, the State<br \/>\nGovernment may accept payment of a sum of consideration for the grant of<br \/>\nany exclusive privilege under Section 22. Section 43 which deals with the<br \/>\npower to withdraw licences provides in sub-section (5) as follows:\n<\/p>\n<p>&#8220;43(5) : For the purpose of calculating the amount due to the State<br \/>\nGovernment&#8230;&#8230;&#8230;&#8230;the amount of fee payable on account of the licence<br \/>\nfor the period during which it was in force shall be taken to be the sum<br \/>\nbearing the same proportion to the total fee for the whole period for which<br \/>\nthe licence was settled as the period during which the licence was actually<br \/>\nin force bears to the full period for which the licence was settled.&#8221;\n<\/p>\n<p>For the purpose of grant of exclusive privilege for wholesale manufacture<br \/>\nand supply of country liquor, the State of Bihar has been divided into nine<br \/>\nzones. The Board of Revenue invites tenders for the grant of the privilege<br \/>\nof manufacture and wholesale supply of country liquor in sachets\/bottles<br \/>\nfor each zone. Prior to 1995 the exclusive privilege was granted pursuant<br \/>\nto the tenders received only to one supplier per zone. However, for the<br \/>\nperiod 1st of July, 1995 to 31st of March, 1999, a notice inviting tenders<br \/>\nwas published in the Bihar Gazette on 3rd of June, 1995 in which it was<br \/>\nstated in Clause 3(c) that in one zone more than one contractor may be<br \/>\ngranted the privilege of setting up sacheting plant and supplying of<br \/>\ncountry liquor in sachets\/bottles in the districts falling within the zone.<br \/>\nPursuant to the tenders which were invited petitioner no. 1-State has<br \/>\ngranted this exclusive privilege to more than one contractor in each of the<br \/>\nzones. The dispute relates to the licence fee which is payable by each of<br \/>\nthe contractors within one zone. The respondents are some of these<br \/>\ncontractors.\n<\/p>\n<p>It is common ground that for the purpose of determining the minimum licence<br \/>\nfee payable in respect of each zone, the State arrived at the figures of<br \/>\ngross sale of country liquor in each zone during the previous financial<br \/>\nyear 1994-95. The annual licence fee for the subsequent financial year is<br \/>\ndetermined at the rate of Re. 1 per L.P. litre of liquor supplied in the<br \/>\nprevious financial year. Schedule 1 to the tender notice gives the name of<br \/>\nthe zone, the consumption of country spirit in 1994-95 and other<br \/>\nparticulars. For example, in zone 1, that is to say Patna Zone, consumption<br \/>\nof country spirit in 1994-95 was 31.66 lacs of L.P. litres. The licence fee<br \/>\nfor Patna zone for 1995-96 is accordingly worked out at Rs. 31.66 lacs. In<br \/>\nzone 2, Gaya zone, the consumption of country spirit in 1994-95 is 23.29<br \/>\nlacs L.P. litres. The licence fee for Gaya zone is accordingly worked out<br \/>\nat the rate of Re. 1 per L.P. litre.\n<\/p>\n<p>Clause 2(b) of the tender notice which was in Hindi has been translated in<br \/>\nEnglish by the High Court as follows:\n<\/p>\n<p>&#8220;From each contractor of special privilege, the licence fee calculated on<br \/>\nthe basis of Re. 1 per L.P. Litre on the annual guaranteed quantity in the<br \/>\nparticular zone in which they have to supply country liquor, shall be<br \/>\npayable in equal proportion in advance in one lumpsum. If in the financial<br \/>\nyear the supply of liquor is in excess of the annual guaranteed quantity,<br \/>\nthe licence fee shall be enhanced to the same extent.&#8221;\n<\/p>\n<p>The same term is incorporated in the licence which has been granted to each<br \/>\nof the contractors; but in somewhat more explicit language. It is contained<br \/>\nin condition no. 6 of the licence. The English translation of condition no.<br \/>\n6 (the original is in Hindi) as rendered by the High Court is as follows:\n<\/p>\n<p>&#8220;6. In one zone, country liquor shall be supplied by more than one<br \/>\nwholesaler. Every licensee shall have to deposit through challan in the<br \/>\nSecretariat Treasury at Patna the advance licence fee in equal proportion<br \/>\nin one lumpsum at the rate of Re. I per L.P. litre on the basis of<br \/>\nconsumption in the year 1994-95 as shown in Schedule 1 to the tender in<br \/>\nrespect of the zone in which country liquor is to be supplied. If in the<br \/>\nfinancial year the supply is in excess of the guaranteed quantity, then the<br \/>\nlicence fee enhanced to that extent shall be payable by all the<br \/>\ncontractors. The licence fee is payable annually, and shall be payable in<br \/>\nadvance in each financial year, otherwise, the licence shall not be<br \/>\neffective.&#8221;\n<\/p>\n<p>Petitioner No.l has charged from each of the contractors in one zone the<br \/>\nfull licence fee calculated at the rate of Re. 1 per L.P. litre based on<br \/>\nconsumption for the year 1994-95 in that zone. But according to the<br \/>\nrespondents, the licence fee so calculated is for each zone. The grantees<br \/>\nof exclusive privilege\/contractors in each zone have to pay this total<br \/>\nlicence fee in equal proportions.\n<\/p>\n<p>Condition No. 6 of the licence requires each of the licensees in one zone<br \/>\nto deposit the advance licence fee in equal proportions. Clause 2(b) of the<br \/>\ntender conditions also requires each contractor to pay the licence fee in<br \/>\nequal proportion&#8221; in advance. The Hindi word used for &#8220;in equal proportion&#8221;<br \/>\nis &#8220;Samanupatic.&#8221; The High Court has correctly translated the word<br \/>\n&#8220;Sarnanupatic&#8221; as &#8220;in equal proportion.&#8221; Looking to condition 2(b) of the<br \/>\ntender conditions and condition 6 of the licence, the High Court has held<br \/>\nthat each of the licensees in one zone will have to pay the total licence<br \/>\nfee in equal proportions. For example, the licence fee for the Patna zone<br \/>\nis Rs. 31,66,000. If there are five licensees for the Patna Zone, each<br \/>\nlicensee will pay l\/5th of this amount in advance. According to petitioner<br \/>\nno. 1, this interpretation is incorrect. What is intended is that each of<br \/>\nthe licensees in one zone will pay the full amount of the licence fee. The<br \/>\nwords &#8220;in equal proportion&#8221; according to petitioner no.l are referable to<br \/>\n(I) the second halves of clause 2(b) of the tender notice and condition 6<br \/>\nof the licence which deal with a proportionate increase in the licence fee<br \/>\nif, in the financial year in question, the supply of liquor is in excess of<br \/>\nthe previous years&#8217; quantities. (2) They also contend that the word &#8220;equal<br \/>\nproportion&#8221; has a reference to a proportionate reduction in the licence fee<br \/>\nif the period for which the licence fee is to be paid is less then one<br \/>\nfinancial year. They contend that the tender notice in question related to<br \/>\nthe period 1st July, 1995 to 3 1st of March, 1999. Therefore, for the first<br \/>\nfinancial year the period involved is 1st of July, 1995 to 31st of March,<br \/>\n1996. Hence the licence fee payable by each licensee will have to be<br \/>\nproportionately reduced to cover the period only of nine months instead of<br \/>\ntwelve months.\n<\/p>\n<p>This contention has been rightly rejected by the High Court. The words &#8220;in<br \/>\nequal proportion&#8221; occur in the first part of condition 2(b) of the tender<br \/>\nnotice and condition 6 of the licence. In the first part, there is no<br \/>\nreference to the proportionate reduction in licence fee on account of the<br \/>\nshorter period involved. The first part merely says that each of the<br \/>\ncontractors or licensees will have to pay in equal proportion the licence<br \/>\nfee in advance. There is no reference to the period of the licence at all.<br \/>\nThe words &#8220;in equal proportion&#8221; in this sentence will have to be ignored if<br \/>\nthe interpretation of the State is to be accepted. For the excess sales<br \/>\nduring the period, the second half of each of these clauses expressly<br \/>\nprovides for increase to the same extent in the A licence fee. There is no<br \/>\nreference in either of these clauses to a period of less than a financial<br \/>\nyear being covered by the licence fee. Section 43(5) expressly provides in<br \/>\nthe statute itself for such proportionate reduction. The High Court has,<br \/>\ntherefore, rightly come to the conclusion that what is provided in the<br \/>\ntender conditions as also under the licence is collection of the total<br \/>\nlicence fee for the zone from each of the contractors in that zone in equal<br \/>\nproportions.\n<\/p>\n<p>It was pointed out by learned counsel for the State of Bihar that since the<br \/>\nlicence fee is in the nature of consideration for the sale of exclusive<br \/>\nprivilege to supply liquor in wholesale, it is open to the State to charge<br \/>\nfrom each contractor in a zone the full licence fee. But if the tender<br \/>\nconditions and the conditions of the licence do not so provide, the State<br \/>\nwill not be able to collect the full licence fee from each of the<br \/>\nlicensees\/contractors. Our attention was also drawn to the minutes of the<br \/>\nCabinet Meeting as indicating the purpose of giving the exclusive privilege<br \/>\nto more than one contractor being to collect more licence fees. But if this<br \/>\nintention is not conveyed in the terms and conditions of the tender and the<br \/>\nlicence, such an intention , even if D expressed in the minutes of the<br \/>\nCabinet Meeting, would not be of any avail.\n<\/p>\n<p>The petitions are, therefore, dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India State Of Bihar And Ors vs Sheo Narain Jafswal Pvt. Ltd. And &#8230; on 24 October, 1997 Bench: Sujata V. Manohar, D.P. Wadhwa 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: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-4369","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Of Bihar And Ors vs Sheo Narain Jafswal Pvt. Ltd. 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