Kapur, J.
1. This is an appeal by the Union of India against an appellate judgment and decree of the Senior Subordinate Judge affirming the decree of the trial Court granting a declaration and issuing an injunction against the Union of India. The plaintiff is a licensed vendor of country liquor in the Province of Delhi and in the Punjab and has been one for Several years.
2. By a document, Exhibit P. I, notice was given for the auction of a country liquor shop situate in Katra Barian for the year beginning from 1-4-1946, to 31-3-1947. The public auction was to be held on 20-3-1946, and it was so held by the Collector. It is admitted that the conditions of auction were read out to the intending bidders at the time of the auction on 20-3-1946 and they are marked as Exhibit D. W. 1/1 and only two of the conditions are relevant to the dispute :
'32. The Collector will not be bound to accept the highest bid. If in the opinion of the said officer the bid for any particular shop is excessive he will have the power to announce at that very time that if anybody exceeds the bid which is already too high, then the whole or a part of the bid shall be payable at once,'
'34. The person whose bid is accepted will have to deposit one-sixth of the fee or such share which the Collector will decide within seven days and if such person does not so deposit the fee, the sale in his favour will be set aside and his Rs. 25/- fee for making a bid will be forfeited and there will be a resale by auction and if there is any short-fall in the fee, the liability will be of the person who had made the bid.'
3. A bid was made by the plaintiff Narain Singh. It is admitted that it was announced at the time that half the fee will have to be paid. The final bid of Narain Singh was raised to Rs. 3,72,000/- and under the orders of the Collector he was asked to deposit Rs. 1,86,000/-. Reference at this stage may be made to another condition of the auction that all bids were to be subject to the sanction of the Chief Commissioner of Delhi Province and he had the authority to reject any bid without giving any reasons and to convey this in any manner he liked.
4. On 22-3-1946, by a letter, Exhibit P-2, an offer was made by the plaintiff to deposit Rs. 62,000/- (which is one-sixth of his bid) which is an application to the Deputy Commissioner, Delhi, wherein the plaintiff stated that he had made a foolish bid of Rs. 3,72,000/-, that he had lost sight of the fact that half the amount of the total bid was required to be paid in advance, that the opposite party who pushed up the bid only wanted to ruin him, that he was finding it impossible to arrange for the payment of this huge sum of money, that he was prepared to deposit licence fee of two months in advance and a further Bum of Rs. 31,000/- every month and that he was throwing himself at the mercy of the Deputy Commissioner and in the end he prayed that he may be allowed to deposit two months' license fee Rs. 62,000/- instead of half of the 'annual fee.' On 29-3-1946, treasury challans for a sum of Rs. 62,000/- were prepared at the instance of Narain Singh. They are Exhibits P-3 and P-3(a). Along with this was a cheque for Rs. 62,000/- dated 30-3-1946, on Grindlays Bank Limited in favour of the Reserve Bank of India, Delhi. Evidently the payment of this was stopped and the endorsement 'received payment' has been scored out. On 25-3-1946, the Excise Officer directed the plaintiff to deposit Rs. 1,86,000/- on account of advance of the license fee. On 3-4-1946, the Collector gave notice to the plaintiff to pay half the amount of the fee and also that unless that was paid there would be a resale at his risk and account. There is on the file an application, Exhibit P-5, of April 1946, the exact date is not given in which the plaintiff says that on 29-3-1946, he was ordered to deposit Rs. 62,000/- as advance for two months' fee and to take charge of the shop, but that morning (i.e. the date on which the application is made) he was stopped from making sales in the shop unless the deposit of Rs. 1,86,000/- was made. He again said that he was unable to pay the whole sum but was prepared to pay in advance two months' fee as was always done in the past and promised to pay regular monthly instalments. He added that there was a loss of a thousand rupees per day on account of the shop being closed and he asked that his application be considered favourably.
5. On 12-4-1946, he gave a notice under Section 80, Civil P C. and on 16-4-1946, the resale took place and the highest bid was of Rs. 2,50,000/- thus leaving a difference of Rs. 1,22,000/-. Nothing seems to have been done till 16-6-1947, when the plaintiff brought a suit for a declaration to the effect that (I) the terms of the auction regarding the deposit of more than one-sixth of the fees were 'ultra vires', (II) the resale was not binding, (III) the action of the Government in trying to recover the amount of money is illegal and he prayed for a permanent injunction against the defendant restraining them from realizing Rs. 1,62,000/- He valued the suit at Rs. 130/-. The defendant denied the allegations of the plaintiff and also pleaded that a suit of this kind did not lie.
6. The trial Court decreed the suit and held (1) that the Collector was not authorised to add to or change the rules and thus prescribe further or change the old conditions and therefore the term regarding the deposit of more than one-sixth was 'ultra vires', (2) that the bids were speculative, (3) that there was no completed contract between the parties and therefore the withdrawal of the offer made by the plaintiff' before it was finally accepted by the Chief Commissioner was legal, (4) that even if there was a completed contract the defendant was guilty of breach of contract as they refused to accept, Rs. 62,000/- which was offered by the plaintiff, (5) that the resale was not binding on the plaintiff as there was not sufficient advertisement and on the basis of the resale damages were not claimable and (6) that the suit as framed was competent.
7. On an appeal being taken to the Senior Subordinate Judge these findings were affirmed excepting that no finding was given on the question of the maintainability of the suit which I am informed was on the ground that it was not pressed.
8. In appeal, counsel for the appellant submits that the findings of the learned appellate Judge are in law erroneous. The learned Senior Subordinate Judge had held that the conditions contained in D. W. 171 which were announced at the time of the auction were different from those given in the rules contained in the Delhi Excise Manual Volume II in the Bid Rules at least in 2 particulars. (1) The conditions announced empowered the Collector to demand a deposit of more than one-sixth of the amount of the bid which was not provided for in the rules and (2) the Collector had not the power under the rules in the case of an extraordinary high bid to require any person to deposit the whole or any part of the amount of the bid at once. Terms contained in conditions Nos. 32 and 34 in Exhibit D. W. 171 were according to the learned Judge in excess of the powers of the Collector and therefore 'ultra vires'.
8a. The following sections of the PunjabExcise Act (hereinafter termed the Act) whichapplied to the Province of Delhi may now bequoted 'in extenso':
'34. Fees for terms, conditions and form of, and duration of, licenses, permits and passes.'
'35(1). Subject to the rules made by the Financial Commissioner under the powers conferred by this Act, the Collector may grant licenses for the sale of any intoxicant within his district.'
'36. Power to cancel or suspend licenses, etc. Subject to such restrictions as the Provincial Government may prescribe, the authority granting any license, permit or pass under this Act may cancel or suspend it -- (b) If any duty or fee payable by the holder thereof be not duly paid; or
'58. Powers of Provincial Government to make rules -
'(1) The Provincial Government may, by notification, make rules for the purpose of carrying out the provisions of this Act or any other law for the time being in force relating to excise revenue.
'(2) In particular, and without prejudice to the generality of the foregoing provision, the Provincial Government may make rules -- (e) regulating the periods and localities for which, and the persons, or classes of persons, to whom, licenses, permits and passes for the vend by wholesale or by retail of any intoxicant may be granted and regulating the number of such licenses which may be granted in any local area; (f) prescribing the procedure to be followed and the matters to be ascertained before any license is granted for the retail vend of liquor for consumption on the premises;' ' 58(3). Previous publication of rules. The power conferred by this section of making rules is subject to the condition that the rules be made after previous publication :
Provided that any such rules may be made without previous publication if the Provincial Government consider that they should be brought into force at once.'
Under Section 58 rules have been made and Rules 5.34 deal with the procedure prescribed for grant of licenses by auction and bids. The rules which are relevant for the purposes of the appeal are the following :
'(4) Before the auction begins the presiding officer will read out the notice prescribed by the preceding rules.
12. The presiding officer may refuse any bid which he considers to be merely speculative or dictated by private enmity, or which if accepted would tend to create an undesirable monopoly of interest.
16. All bids accepted by an officer subordinate to the Collector require the Collector's sanction. All sales are open to revision by the Chief Commissioner.
17. If the Collector refuses to sanction a sale or if a sale is set aside by the Chief Commissioner on revision, the Collector may resell the license by auction or by tender; if the resale is by tender, these rules, shall apply as far as may be.
21. A person to whom a shop has been sold shall pay one-sixth of the annual fee within seven days of the auction (any deposits already made shall be credited to this sum, and any excess shall be either returned to him or credited to future payments .............. If any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one-sixth of the annual fee, or if he re-fuses to accept the license, the Collector may resell the license, either by public auction or by private contract, and any deficiency in price and all expenses of such resale or attempted resale shall be recoverable from the defaulting bidder in the manner laid down in Section 60, Punjab Excise Act 1 of 1914, as applied to the Delhi Province.'
The dispute centres round Rule 21 of these Rules, which provides that a person to whom a shop has been sold shall pay one-sixth of the annual fee within seven days; the conditions of the auction which were announced at the time of the auction gave to the Collector the right to demand any amount from one-sixth to the whole in accordance with his discretion.
9. It appears that before the auction the Collector proposed certain conditions for the auction of excise shops and for this particular sale, by his letter dated 12-3-1946, he sent them for the approval of the Chief Commissioner and on 18-3-1946, by Exhibit D. W. 1/3 the Chief Commissioner gave his approval to these conditions with very minor modification which are not relevant to the issue. In these draft conditions there are two conditions which concern the case now before me :
'25. If the Collector considers that there is reckless biddings, he may require the persons bidding to deposit the whole sum in one instalment or any portion of the bid money on the spot.'
'26. All 'final bids will be made subject to the confirmation by the Chief Commissioner who may reject any bid without assigning any reasons. If no bid is accepted for any shop, the Chief Commissioner reserves the right to dispose it (?) of by tender or otherwise as he thinks fit.'
10. The first question which requires determination in this connection is whether these variations in the rules for the auction of liquor shops could be made by the Chief Commissioner. Counsel for the appellant contends that Section 34 gives power to the Chief Commissioner in Delhi to give directions in regard to the terms, conditions and duration of licences, and particularly relied on Clause (b) of the section which deals with restrictions and conditions on which permits shall be granted. I am unable to agree that this section deals with the question now in dispute before me. The rule-making power for purposes of carrying out the auction of Excise shops is contained in Section 58 of the Act and this power is exercisable by the Provincial Governments. Sections 34 and 59 deal with the power of the Financial Commissioner in the Punjab and Chief Commissioner in Delhi but these sections do not concern the power of making 'rules for auction. The two powers are exercised by two different authorities though it may be that in Delhi it is the Chief Commissioner who may have combined in him the powers of the Provincial Government and the Financial Commissioner. Besides the rules made have to be notified in the Official Gazette and the modified conditions of sale which were announced at the time of the auction in the present case even if they could be said to have received the approval of the Chief Commissioner cannot have the force of statutory rules as they were never notified in the official Gazette. Therefore if there is any inconsistency between the conditions announced and the rules contained in Rule 5.34 of the Rules made under Section 58 of the Act the latter must prevail. Under Rule 21 of the Rules contained in Rule 5.34 of the Rules the payment required from a person offering the highest bid is one-sixth of the whole of the annual fee. This rule could not be changed by the Chief Commissioner because even he had the authority vested in him of making rules under Section 58 of the Excise Act, the modification to be effective, had to be notified in the Official Gazette.
11. It is then submitted by counsel for the appellant that the conditions of sale announced at the auction even though inconsistent with the rules made under the Act are binding on the plaintiff who knowing everything made the bid. I shall for the purpose of this Submission accept the argument that the conditions contained in paras 32 and 34 of Exhibit _D. W. 1/1 are in accordance or reconcilable with conditions 25 and 26 contained in Exhibit D. W. 1/2 to which approval had been given by the Chief Commissioner by his letter dated 18-3-1946.
12. Powers for issuing conditions of sale are given in the rules and it is not open to an authority acting under a statute to vary these rules unless the statute gives it the power to do so. As I have said before the power has been given under the rules and statutory authority must act within the statute or not at all. Merely because the plaintiff after hearing the conditions of sale gave the highest bid would not estop him from challenging the validity of the power of the Collector or the Chief Commissioner of varying the condition as to payment as laid down by the statutory rules. There cannot be an estoppel against statute. If rules made under a statute or bye-laws framed under the rules are in excess of the provisions of the statute or are inconsistent with such provisions then these rules or bye-laws must be regarded as 'ultra vires' of the statute and they cannot be given effect to. In -- 'Barisal Co-operative Central Bank Ltd. v. Benoy Bhusan Gupta', AIR 1934 Cal 537 (A), it was held that there can be no estoppel against statute and therefore a person, who made an application for allotment of shares on terms of a certain bye-law which was 'ultra vires', was not estopped from contending subsequently or challenging the legality of the bye-laws. The rule laid down in this case applies to the facts of this case and therefore in my opinion the plaintiff is not estopped from challenging the legality of the conditions announced at the time of the auction in spite of his making a bid knowing that they were different from those contained in Rule 5.34 of the Rules.
13. In a somewhat similar case, -- 'Soma-sundaram Pillai v. Provincial Govt. of Madras', AIR 1947 Mad 366 (B), certain conditions of sale were approved of by the Board of Revenue and were published in a Government notification and it was held that these conditions drawn up by the Board had no statutory force as they were not Settled by the Board under any particular provision of the Abkari Act.
14. The next point submitted on behalf of the appellant was that the sale was complete as soon as the bid was accepted by the Collector. In condition No. 24 of the conditions of sale, Exhibit D. W. 1/1, it is provided that all bids would be subject to the sanction of the Chief Commissioner and it would be open to him without giving any reasons to reject the auction of any shop. Counsel submitted that acceptance of the bid by the Collector was analogous to the sales which took place under the Civil Procedure Code and he referred to Order 21, Rule 84 under which an auction is complete as soon as the bid is accepted by the auctioneer. He also referred in support of his contention to--'Rajendra Prosad v. Upendra Nath', AIR 1915 Ca! 815 CC). where it was held that a bid given after full knowledge of the conditions of sale and accepted by the Court auctioneer cannot subsequently be withdrawn merely because the Court has subsequently the discretion to confirm or annul the auction. He also relied on several other cases but I do not think they apply to the facts of the present case, in which the conditions of sale definitely make the acceptance of the bids subject to the confirmation of the Chief Commissioner and unless that is done there is no completed contract. The offer was therefore revocable till the final acceptance of the bid and as there was no final acceptance of the bid the. plaintiff could withdraw his offer. By Exhibit P-2 dated 22-3-1946, this offer was withdrawn and on the contrary on 29-3-1946, the plaintiff gave a cheque for Rs. 62,000/- which was one-sixth of the amount which he was bound to pay under the rules made by the Provincial Government.
15. In para 9 of the plaint the plaintiff has stated that on 31-3-1946, after he had made an offer of Rs. 62,000/- the possession of the shop was delivered to him. In reply the defendant did not admit the allegations made in this paragraph apparently on the ground that it is unduly lengthy. In his statement as a witness the plaintiff stated that he was given possession of this shop and even stored certain number of liquor bottles but this statement of his was not challenged in cross-examination. Again, according to the plaint, on the 1st of 'April the Sub-Inspector of Excise brought an order to the plaintiff at 10 A.M. demanding Rs. 1,86,000/- as the Deputy Commissioner was not agreeable to the deposit of one-sixth. The order of demand is admitted in the plaint. In support of this statement contained in the plaint, the plaintiff has made a statement on oath to the same effect and although the defendants led their evidence after the plaintiff's evidence had concluded there was no denial of these two facts. I hold therefore that the plaintiff did get possession and it must have been because the offer of his one-sixth was accepted. It is not shown that the possession was given by a person who was net authorised to do so. In view of this the Collector had not the power to demand half of the amount of the bid.
16. The plaintiff in support of his submission has relied on ILR (1947) Mad 837: (AIR 1947 Mad 366) (B). In that case a liquor licence was put up for public auction by a Sub-Inspector of Tindivanam. The conditions of a sale had been prescribed by the Board of Revenue. The Sub-Inspector was authorised to give provisional acceptance, but the actual acceptance rested with the Collector and the Board of Revenue had the power to revise for special reasons. The appellant Somasundaram Pillai was the highest bidder for four shops but the Collector accepted only two of them and refused to confirm the bids made in respect, of the other two shops. The appellant thereupon withdrew his two bids with regard to unconfirmed shops and asked for the return of his deposit money. This was refused and his bids were accepted. As he refused to take out the license there was a resale which resulted in a loss to Government of Rs. 1,148/-. The appellant then filed a suit for the recovery of Rs. 105/- the amount of his deposit and an injunction restraining the Provincial Government from taking, action to recover the short-fall. It was held that the plaintiff had the right to withdraw his bids before acceptance and the mere fact that' there was a provisional acceptance by the special Collector made no difference, Leach C. J., at p. 338 said:
'To have an enforceable contract, there must be a definite acceptance or the fulfilment of the condition on which a provisional acceptance is made.'
17. In another case, -- 'Muthu Pillai v. Secy. of State', AIR 1923 Mad 582 (D), a house was put up for sale by Government and the auction was held oy the Tahsildar. The defendant was the highest bidder and a report of the sale was forwarded to the Collector for confirmation. Before the sale was confirmed the defendant at his own request was allowed to occupy the house on the condition that he would quit it whenever required. The sale was not confirmed and when a suit was brought against the defendant for the recovery of possession be contended that he was entitled to possession as the sale was completed. It was held that there was no completed contract.
18. After going through the evidence and the cases which have been cited I am of the opinion that there was no completed sale and until the bid was finally accepted by the Chief Commissioner the plaintiff had the right to withdraw his bid and as a matter of fact he did withdraw and therefore he is not liable on account of any breach of contract or for the short-fall on the resale.
19. The respondent submitted that he was not liable on the resale because there was no proper advertisement and no proper bids given and the Collector had no power to resell. In support of this last point counsel for the respondent relied upon Section 39 of the Excise Act. But that is a section which gives to the Collector the power to resell when a lessee makes a default in complying with the conditions imposed upon him under the license. If the default is by the plaintiff, then under the conditions of sale contained in the 34th condition in Exhibit D. W. 1/1 there was the power in the Collector to order the resale. Even in the conditions contained in the rules which I have given 'in extenso' at another place the power of resale on the failure of a bidder is given in condition No. 21 of the rules. I am therefore of the opinion that the Collector had the power of resale,
20. As to the question that the sale was bad for want of sufficiency of notice, advertisement and bidders I am unable to agree with the contention of the respondent. D. W. 1 Sub-Inspector of shops has appeared as a witness and has stated that all the contractors were present excepting the p'ai tiff but the bid was only given by Sohan Lal. According to the plaintiff as a witness the proper price of the Shop was only Rs. 2,00,000/- and as it was sold for Rs. 2,50,000/- the plaintiff cannot say that there was any loss due to want of advertisement or that sufficient bidders were not there. The evidence shows, as I have said, that all the contractors were there and in the circumstances of this case, in my opinion, there was no lack or insufficiency of notice which is proved by the presence of the contractors there.
21. It was then submitted by counsel for the respondent that the short-fall cannot be recovered from him as arrears of land revenue. Section 60, Punjab Excise Act provides for the recovery of all excise revenue by means of distress or sale as if it were arrears of land revenue -- Section 3(9) of the Excise Act defines what 'excise revenue' means :
'3(9). 'excise revenue' means revenue derived or derivable from any payment, duty, fee, tax, confiscation or fine, imposed or ordered under the provisions of this Act, or of any other law for the time being in force relating to liquor or intoxicating drugs, but does not include a fine imposed by a Court of Law;'
Under this section if there is a liability to pay for the short-fall, the recovery can be made by means of distress and sale under Section 60 of the Act. I, therefore, overrule this contention.
22. I hold therefore :
(1) that the conditions contained in D. W. 1/2 and D. W. 1/3 are not binding on the plaintiff in so far as they are inconsistent with the rules made under Section 58 of the Excise Act;
(2) rules made by the Chief Commissioner under Sections 32 and 34 of Punjab Excise Act cannot vary those made by the Provincial Government under Section 58 of the Act;
(3) the plaintiff is not bound by the condition calling upon him to pay one-half of the ] amount of the bid offered by him;
(4) merely because the conditions of sale were read out at the time of the auction and the plaintiff made the bid knowing the conditions, would not estop him from challenging the legality of the conditions;
(5) the auction sale was not complete until the bid was accepted by the Collector and finally approved of by the Chief Commissioner.
As in this case the bid was withdrawn before the Chief Commissioner gave his assent there was no completed contract between the parties and the plaintiff is therefore not liable on the resale; and
(6) the Collector had the power of ordering resale and the resale in this case was a Proper one and if there had been a completed binding contract the plaintiff would have been liable to pay the short-fall of Rs. 1,22,000/- and the Collector could recover the money by means of distress or sale.
23. In the result this appeal fails and is dismissed with costs.
24. I certify this case for leave to appeal under the Letters Patent.