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Union of India and ors. Vs. Gangadharan Mohandas and anr. - Court Judgment

SooperKanoon Citation
SubjectConstitution;Contract
CourtKolkata High Court
Decided On
Case NumberCivil Appeallate Jurisdiction F.M.A.T. No. 2118 of 1996, F.M.A.T. No. 2119 of 1996
Judge
Reported in(1998)1CALLT229(HC)
Acts Constitution of India, 1950 - Articles 14 and 226;; Andaman Excise Rules, 1934 - Rule 9;; Bombay Prohibition Act, 1949;; Indian Contract Act, 1872 - Sections 4 and 5
AppellantUnion of India and ors.
RespondentGangadharan Mohandas and anr.
Appellant Advocate Mr. P.K. Mallick, ;Mr. P.K. Ray and ;Mr. B.K. Ray, Advs.
Respondent Advocate Mr. Sakti Nath Mukherjee, ;Mr. S. Pal, ;Mr. A. Roy, ;Mr. T. Mukherjee and ;Mr. Dipankar Ghosh, Advs.
Cases ReferredLtd. v. State of W.B..
Excerpt:
- g.r. bhattercharjee, j.1. this is an appeal being fmat no. 2119/96 directed against the order dated 24.6.1996 passed by b.p. banerjee, j. in c. o. no. 9850(w) of 1996. by which the learned trial judge allowed the writ application filed by the respondent herein (g. mohandas) and cancelled the impugned order dated the 15th april, 1996 by which the auction in question was cancelled and also directed the respondent who are appellants herein to take steps pursuant to the order passed by the lieutenant governor, andaman and nicobar islands dated the 12th march, 1996 within a specified period.2. on the 7th february, 1996 the deputy commission at port blair. andaman published an auction notice notifying that the right to vend beer, wines and other foreign liquor including indian made foreign.....
Judgment:

G.R. Bhattercharjee, J.

1. This is an appeal being FMAT No. 2119/96 directed against the order dated 24.6.1996 passed by B.P. Banerjee, J. in C. O. No. 9850(W) of 1996. by which the learned trial Judge allowed the writ application filed by the respondent herein (G. Mohandas) and cancelled the impugned order dated the 15th April, 1996 by which the auction in question was cancelled and also directed the respondent who are appellants herein to take steps pursuant to the order passed by the Lieutenant Governor, Andaman and Nicobar Islands dated the 12th March, 1996 within a specified period.

2. On the 7th February, 1996 the Deputy Commission at Port Blair. Andaman published an auction notice notifying that the right to vend beer, wines and other foreign liquor including Indian made Foreign Liquor PMFL) in the shops at 13 specified locations at different places as mentioned therein for the period from the 1st April, 1996 to 31st March, 1997 would be sold by auction in one lot as a single auction to be held on 22.2.1996 at the Conference Hall of the Deputy Commissioner's Office at Port Blalr. It was mentioned in the said auction notice that the presiding officer reserved the right to accept or reject the highest bid without any reason (annexure-F to the Writ petition). The terms and conditions subject to which bids were invited at the said auction and the license would be granted, were referred to in that notice. It was menUoned in the terms and conditions that a licence would be issued under Rule 9 of the Andaman Excise Rules, 1934 in accordance with the contract of sale. Clause 6(n) of the terms and conditions provides inter alia that the highest bidder shall deposit 50% of the money minus Rs. 75,00,000 of earnest money already deposited by him on the fall of the hammer and the remaining bid money would be deposited by him in five equal monthly instalments on or before 10th .of every month starting with April 1996, falling which interest would be charged at the Bank's rate. It was also menUoned therein that acceptance of 50% of the bid money on the date of bid would not however be construed as acceptance of the bid. In clause 6(s) it was mentioned that the successful bidder would enter into an agreement with the licensing authority to bind himself to the terms and conditions of the auction.

3. After the publication of the aforesaid auction notice one Krishna Rao filed a writ petition being C.O. No. 12(W) of 1996 against the Deputy Commissioner and Others raising grievance against the single lot of auction for all the 13 shops. By order dated the 19th November, 1996 in the said C.O. No. 12(W) of 1996. N. K. Mltra, J. directed the matter to come up in the list for hearing on 29th February, 1996 and alsorecorded that in the meantime, if any auction took place that would abide by the result of the writ petition. In that writ petition the respondent herein was also added as a respondent. Auction was held, as per the publication of auction notice, on 22nd February, 1996. The respondent herein offered bid in that auction and he was the highest bidder, his bid amount Rs. 3,09,20,000. As per the terms of the auction notice the respondent herein, who is the writ petitioner in the writ case from which this appeal arises, then deposited a sum of Rs. 1,54,60.000 on the spot. The respondent herein was thereafter awaiting invitation from the Deputy Commissioner for entering into an agreement for vending liquor for the year 1996-1997 as the successful bidder in the auction and for grant of necessary licence for the said year. On 15th March, 1996 he had been to the office of the Deputy Commissioner at Port Blair and there he was arrested by the police pursuant to a warrant of arrest issued by the Chief Judicial Magistrate, Nagpur in connection with one FIR lodged at Nagpur, being crime No. 53/96. at the instance of the State Excise (Departmental Flying Squad). Nagpur Division. Nagpur. Certain Excise officers from Nagpur were also present when the petitioner was arrested on 15th March, 1996 in the office of the Deputy Commissioner at Port Blair. On that very day he was produced before the Chief Judicial Magistrate, Port Blair who ordered for his production before the Chief Judicial Magistrate at Nagpur and on 16th March. 1996 the writ petitioner was taken away from Port Blalr and was ultimately produced before the Chief Judicial Magistrate, Nagpur on 18th March, 1996 in connection with the said crime No. 53/ 96 and he was granted ad-interim bail on condition that he would not leave Nagpur for a period of 10 days and would make himself available at Nagpur for the purpose of interrogation by the investigating Officer. In course of time the Deputy Commissioner, Andaman issued order No.336 dated the 15th April, 1996 regarding cancellation of the entire auction proceedings held on 22nd February, 1996 and also issued on the same date a public notice being No. 7-143/LS/95/1289 for the information of all concerned that the auction held on 22.2.1996 stood cancelled due to administrative reasons (vide annexure-JJ to the writ petition). Being aggrieved by the said order No. 336 and the said public notice, both dated the 15th April, 1996 the writ petitioner G. Mahandas filed the writ petition, giving rise to the present appeal, for quashing the same and for direction upon the respondent authorities to allow the writ petitioner to run the business of vending IMFL at Andaman and Nicobar Islands on the basis of the auction held on 22nd February, 1996 and to take steps for execution of agreement in terms of the said auction. As already mentioned, the learned trial judge by the impugned order dated the 24th June, 1996 allowed the writ petition quashing the said order and public notice, both dated the 15th March. 1996 and virtually directed the respondents to enter into an agreement with the writ petitioner on the basis of auction held on the 22nd February, 1996. Being aggrieved by the said order the appellants who are the Union of India and the authorities of the Andaman Administration have preferred the present appeal. Apart from the incidents described above a lot of events, having bearing on the question involved in the matter took place in the months of February, and March 1996 and even thereafter which also we will have to take stock of for appreciating the turn of events leading the matter to the position where ultimately it found itself to be.

4. While the matters relating to the auction and the processes connected therewith were proceeding in the normal course of things, certain events were developing elsewhere in a different arena in February, March, 1996. The Divisional Deputy Commissioner of Slate Excise, Nagpur sent a fax message together with xerox copies of five import permits bearing Nos. 4299 to 4303 purportingly issued from the office of the Deputy Commissioner, Andaman in the name of G. Mohandas and in that fax message the Andaman administration was requested to ascertain the genuineness of the said permits and the revalldallon entries thereon. Since the said fax message was not tn the official letter pad, the office of the Deputy Commissioner, Andaman advised the Nagpur authorities to send the concerned message on their official letter pad through the collector of Nagpur. Subsequently, after cross-checking of records the office of the Deputy Commissioner came to the conclusion that the said permits were all fake and fake forms were used, fake despatch numbers had been incorporated and the signatures of Deputy Commissioner and the dealing Assistant were forged. This was also communicated to the State Excise Authorities at Nagpur by fax message on or about 23.3.96. Sri B. S. Talang. Inspector of State Excise, Nagpur informed the Andaman administration by letter dated 27.2.96 that 3,250 boxes of IMFL items against fake import permits while being sent to the G. Mohandas, had been seized by them and crime No. 53/96 under the Bombay Prohibition Act. 1949 had been duly registered. It may be mentioned here that the said crime No. 53/96 was registered on 23.2.96 at Nagpur implicating one Acchelal, one B. S. Puwlya who are officers of the Kedia Castle Dellon Industries Ltd., G. Mahandas and others. Involvement of Excise officer was also suspected. It will appear that the said crime case was registered by lodging FIR with police under the Bombay Prohibition Act, 1949 as it was detected that huge quantity of IMFL/worth about Rs. 65,00,000 was being taken in five trucks under the fake import permits in the name of G. Mohandas purporting to have been granted by the Andaman administration. The revaluation of the permits were also found to be fake. The Inspector of State Excise Nagpur, B.S. Talang addressed a letter dated the 27th February, 1996 to G. Mohandas informing about the seizure of IMFL items being exported to him (G.Mohandas) by Kedfa Castle Dellon industries Ltd. Kedla Nagar, Kumhari, Dist. Durg, Madhya Pradesh and registration of crime No. 53/96 under the provisions of the Bombay Prohibition Act, 1949. In that letter G. Mahandas was requested to appear before the Inspector of State Excise, Nagpur along with necessary document of previous import from Kedla Castle Dellon Industries Ltd. which company was exporting the seized IMFL items. It was also mentioned in the said letter of the said Inspector of State Excise that the presence of G. Mohandas was required as an accused person in the said crime No. 53/96. That letter was served on Sri Gangadharon, the power-of attorney-holder of G. Mahandas at Port Blair by Andaman administration. The Divisional Deputy Commissioner of State Excise, Nagpur by his letter dated 28.2.96 informed the Andaman administration that one B. S. Poovalah, Deputy General Manager, Bangalore and one Acchelal Maji, Supervisor of Kumhari liquor manufacturing unit of Kedla Castle Dellon Industries Ltd. had been arrested at Nagpur and crime No. 53/96 hadbeen registered against them and others, being Kedia Castle Dellon Industries Ltd., the Chairman of the Company and others, Ramgopal Sharma (Vice President), Anand Mishra (General Manager), G. M. Rao (Production Manager), Sumlt Modak (Sales Magager) and G. Mohandas. Attested copies of certain documents were also forwarded to the Andaman administration such as statement dated 22.2.96 of Sri Poovaiah, Permit Sales Register, Andaman and Nlcobar Islands maintained in the office of Kedia Castle Dellon Industries Ltd. at Bangalore etc. and on examination of the said register and the despatch register maintained in the District office at Port Blair, it was detected again by the Andaman administration that import permits bearing Nos. 4274 to 4303 dated 14.9.95 (30 in number) were fake and forged. Thereafter, as we have seen, two officers of the State Excise, Nagpur came to Port Blair with warrant of arrest issued against G. Mahandas by the Chief Judicial Magistrate Nagpur and G. Mohandas was accordingly arrested on 15.3.96 at the office of the Deputy Commissioner, Port Blalr and was then produced before the Chief Judicial Magistrate, Port Blalr and was ultimately transported and produced before the Chief Judicial Magistrate, Nagpur.

5. On the other hand, as we hove seen the auction matter was proceeding in its own way and G. Mohandas on 22.2.96 offered the highest bid in the auction and also made the necessary deposit and thereafter the same was being considered separately regarding the question of finally accepting the bid and of finalising the matter. In that connection the effect of the pendency of the said C.O. 12(W) of 1996 and the interim order passed therein was also being considered by the Andaman Administration. The opinion of the Judicial Secretary Andaman was also obtained in the matter. On 11.3.96 the Secretary (Excise), Andaman in his note observed that the D.C. Andaman might enter into an agreement with the successful bidder of the liquor auction and issue a license to the said successful bidder of vending IMFL in the Union Territory for the year 1996-97 after incorporating a condition that the agreement thus entered into and the license thus issued would be subject to the outcome of the said writ petition. He also proposed an alternative course of action to request the High Court to clarify as to whether the administration could enter into an agreement with the successful bidder of the liquor auction and issue license to the said bidder during the pendency of the writ petition. The file was then placed before the Chief Secretary Narendra Prasad who endorsed the view of the Secretary (Excise) on 11.3.96 and thereafter the file was placed before the Lieutenant Governor of Andaman and Nicobar Islands. The Lieutenant Governor on 12.3.96 observed that if they did not confirm the auction, then the contractor would not get time to bring the materials from the mainland before 1st April, which could also lead to another litigation and that the Government Pleader who appeared before the court in the case also said that the court had not stopped the Authority from taking follow up action In the meantime. Accordingly the Lieutenant Governor on 12.3.96 approved the proposal of the Secretary (Excise) for formal acceptance of the highest bid of G. Mahandas and for entering into an agreement with him and also for granting him license to vend IMFL subject to the decision in the writ petition which was then pending. The learned trial Judge has in his impugned Judgment noted these facts.However, after the order of the Lieutenant Governor the file was placed before the Chief Secretary who signed the same and thereafter a note was given that since the file was belonging to the District Office the same might therefore be marked to the D.C., Andaman for taking necessary action as per order of the Lieutenant Governor. This fact that the Lieutenant Governor on 12.3.96 directed the administration to accept the bid of G. Mahandas and enter into an agreement with and also to issue license in his favour for 1996-97 as the successful bidder was not stated in the affidavit-in-opposition filed in the writ proceeding out of which the present appeal arises, but the learned trial Judge came to know of this fact during the hearing of the writ petition when the concerned file was produced by the administration for perusals of the court. The learned trial Judge is of the view that since the Lieutenant Governor on 12.3.96 directed the officers of the administration in the file to accept the bid and enter into agreement regarding vending of IMFL etc. with G. Mohandas for the year 1996-97 and also to issue license to him accordingly it was incumbent upon the officers of the administration to carry out the direction, but instead of doing that the administration by the impugned order dated 15.4.96 improperly cancelled the entire auction proceeding thereby frustrating the order of the Lieutenant Governor dated 12.3.96. The learned Judge also found fault with the officers of the administration including the Chief Secretary and characterised their conduct in the matter as fraudulent and subversive of good administration, and liberally used harsh epithets in respect of them which in our opinion were not really warranted. It is to be mentioned here that Sri V. Purushottam, the Lieutenant Governor who directed in the file on 12.3.96 for grant of license for 1996-97 to G. Mohandas, vacated the office thereafter and Sm. R. Bajpayee who was the Lieutenant Governor of Pandlcherry took additional charge as the Lieutenant Governor of Andaman and Nicobar Islands. The new Lieutenant Governor on 25.3.96 accepted the proposal of the Chief Secretary in the file to inter alia cancel the result of the auction held on 22.2.96 and this direction for cancellation of the result of auction was reflected in the impugned order of the Deputy Commissioner dated 15.4.96 by which the auction proceeding was cancelled. The learned trial Judge was very caustic in his remarks about the officers of the Andaman Administration including the Chief Secretary. The learned Judge was of the view the concerned officers including the Chief Secretary obtained the order for cancellation of the auction proceeding from the new Lieutenant Governor on 25.3.96 by exercising fraud and by suppressing the fact from her that the earlier Lieutenant Governor had already finalised the matter on 12.3.96 by directing that the bid be accepted and agreement for vending IMFL etc. be entered with G. Mohandas as successful bidder and a license for 1996-97 be issued in his favour accordingly. Of the lengthy and revetitive invectives recorded by the learned Judge the following is a random illustration :-

'The most surprising part of it was that the said Narendra Prasad, Chief Secretary, suppressing the fact that earlier L.G. by his order dated 12.3.96 accepted the bid and directed the Department to enter into an agreement of which Narendra Prasad was a party and placed a proposal before Sm. Rajendra Bajpayee, the L.G., who was in dual charge of Pondlcherry and Andaman and in the note a proposal wasgiven for cancellation of the auction held on 22.2.96 as also to blacklist the petitioner and Smt. Bajpayee approved the proposal given by the Chief Secretary. It is clear that the Chief Secretary is guilty of suppression of the order passed earlier by the earlier L.G. and by misrepresentation and playing trick obtained approval from the new L.G. as designed by them. II is a clear case whether Sm. Bajpayee the new L.G. who was in dual charge had acted on the machination motive of the officers who are all subordinates to the L. G. * ' * In this case before notes placed before Sm. Bajpayee the new L. G. was kept in dark that the earlier L.G. has considered the matter looking into all pros and cons and passed the order which is a speaking order in his own hand writing. The earlier L.G. had not simply agreed and/or disagreed but he has considered the note given by the Chief Secretary on the basis of the facts as revealed from the file and on the basis whereof he passed the order. This order was not made known to the new L.G. and it is a case where a clear fraud was practised upon the new L.G. It is unthinkable that the Chief Secretary could be a party to a machlnatlous and ultra virus motive contrary to the final decision taken by the earlier L.G. It ts a clear case where the Bureaucrats started playing a sinister game after departure of the earlier L. G, may come and L.G. may go but the order passed by the L. G. remains which is binding on all his subordinates and it is their duty to carry it out. Unfortunately, in this case, the order of the L.G. dated 12.3.96 was kept under the shoes of the Bureaucrats showing disrespect to the order passed by the earlier L.G. It is a clear case of gross misconduct on the part of the Chief Secretary and Law Officers subordinate to him in dealing with the matter, in the manner indicated above. This is a subversive for a good administration at least it is expected from I.A.S. Officers that they should act fairly reasonably and maintain discipline. *** It is outside the scope of the writ jurisdiction to take action against these Officers but it is for the L.G. or the appropriate authority to initiate proceedings against these Officers who had played a sinister game and who had shown highest disrespect fan disregard to the order of the L.G. and with the change of L.G. the colour of these Officers also changed and they started moving in the matter to nullify the order passed by the L.G. which they are not competent to do so. The order passed by L.G. could not be allowed to be thrown into the waste paper busket or keep it under the shoes of the bureaucrats which has exactly been done in this case.'

6. The learned trial Judge observed in the impugned Judgment that it appeared that the then Lieutenant Governor V. Purushottam. had resigned after March 12, 1996 and after his departure from the island a game was started by the bureaucrats'. We would now examine how far the learned trial Judge was Justified in observing that the bureaucrats including the Chief Secretary obtained on 25.3.96 the order of cancellation of the result of auction held on 22.2.96 from the new Lieutenant Governor by concealing the fact that the matter had already been finalised by the earlier Lieutenant Governor on 12.3.96 in the file for entering into an agreement with G. Mohandas.

7. There is no doubt that the outgoing Lieutenant Governor immediately before he relinquished the office of the Lieutenant Governor directedin the office note on 12.3.96 for accepting the bid as also for entering into an agreement for the year 1996-97 with G. Mohandas and for issuing license accordingly. The question is whether this fact was concealed to the new Lieutenant Governor by the bureaucrats including the Chief Secretary. The file that went to the new Lieutenant Governor contained a note of the Assistant Commissioner (HQ) dated 22.3.96 which is annexure-I to the stay application. At the very beginning of that note reference was made by the said Assistant Commissioner (HQ) to the 'notes of the Secretary (Excise) from para 49-n to 51-n on pre-page and notes of the Hon'ble Lieutenant Governor at para 53-n of pre-page'. In this context he also attracted attention to the enclosed linked file. It may be mentioned here that the para 49-n to para 51-n and para 53-n as referred to therein are the office notes and the note of the earlier Lieutenant Governor whereby he approved the proposal for accepting the bid of G. Mahandas as also for entering into agreement with G. Mahandas and for granting license to him for 1996-97. When the Assistant Commissioner (HQ) at the very beginning of his note clearly and expressly referred to the file and the note regarding approval of the earlier Lieutenant Governor for entering into an agreement with G. Mohandas for 1996-97, there cannot be any question of suppression of that fact. Far from suppressing the approval and order of the earlier Lieutenant Governor, pointed attention was rather drawn to the same by the Assistant Commissioner (HQ) at the very beginning of his note dated 22.3.96 and even the linked file containing the notes in that connection and the order of the earlier Lieutenant Governor was also enclosed with the office note dated 22.3.96. We wonder, how therefore, there can be a charge of suppression of the order of the earlier Lieutenant Governor.

8. In the said note dated 22.3.96 the Assistant Commissioner (HQ) recorded about the messages and communications received from the State Excise Department, Nagpur and how in view of such messages and intimation it was found on varification of the office records at Andaman that a large number of import permits (5+30=35) purporting to have been issued by the Andaman Administration and the purported revalidatlon of some permits, all purportingly standing in the name of G. Mohandas, were fake and forged and even the signatures of the Deputy Commissioner and the dealing assistant were forged. In the said note the Assistant Commissioner (HQ) also recorded that the State Excise, Nagpur informed Andaman administration about the lodging of crime case no. 53/96 at Nagpur under the Bombay Prohibition Act, 1949 against a number of persons including G. Mohandas for export of IMFL by the manufacturer Kedia Castle Dellon Industries Ltd under fake permits. It was also mentioned in the said note inter alia that a non-bailable warrant was issued by the C.J.M. Nagpur to the Superintendent of Police, Port Blair for arresting G. Mohandas and the said warrant was executed and Mohandas was arrested on 15.3.96 and that S.P. Mooley, the Sub-Inspector, State Excise (Nagpur) requested the D.C. Andaman to seize all relevant records of fake permits and seal IMFL stocks in various shops and godowns of G. Mohandas and further that prior to this requisition the Andaman administration had given an opportunity to G. Mohandas to furnish all pending monthly stock statements, monthly volume of salesand the advice notes accompanying all consignments brought agatnst the import permits, to the office at the Deputy Commissioner, Port Blair By 5 p.m. on 15.3.96 but G. Mohandas failed to submit the required statements. It is also recorded in the said note that in view of the letter of Sri S. P. Mooley Sub-Inspector (State Excise, Nagpur) to D.C. Andaman and in view of the persistent evasion of Sri Mohan Das to submit relevant records and documents D. C. Andaman authorised various officers to seize all relevant records and documents and seal all his shops and godowns until production of required records and documents to facilitate physical stock verification of his business premises. It may be recalled that in the year 1995-96 the license was granted to this very G. Mohandas as he was the highest bidder for that year. As a matter of fact even in 1994-95 as well as for broken period in 1993-94 G. Mohandas was granted license. The fake and forged permits by reason of which the crime case No. 53/ 96 was started against G. Mohandas and others related to the year 1995-96 for which Mohandas was granted license. In the said note of the Assistant Commissioner dated 22.3.96 reference was made to the compliance report in respect of seizure of documents and sealing of shops and godowns of Mohandas. It is also mentioned in that notice was given to G. Mohandas on 16.3.96 directing him to produce all relevant records and documents by 5 p.m. on 20.3.96, but the requisite information was not furnished by G. Mohandas before the stipulated deadline. Accordingly the Assistant Commissioner (HQ) in his said note dated 22.3.96 recorded a proposal that the license of G. Mohandas for the year 1995-96 should be cancelled forth with and he should be black-listed from participation in all future auctions. It was also proposed in the said note that the auction for the year 1996-97 in which G. Mohandas was the highest bidder might be cancelled as he had committed clear and comprehensive breach of license conditions during the current year, that is, 1995-96. This note was also endorsed by the Deputy Commissioner on 22.3.96 and the file then went to the Excise Secretary who referred to the said note and recorded on that very date that G. Mohandas had failed to comply with the orders of the Deputy Commissioner to furnish all pending monthly stock statements', monthly volume of sales even though he was given adequate notice to do so by the Deputy Commissioner and he had violated the terms and conditions of the license issued to him. He also referred in that connection to clause 2(g) of the terms and conditions of the license which required submission of monthly statements of import, sales and stock position. He also referred to clause 2(L) of the terms and conditions which provides that the license issued to an auction purchaser shall be liable to be revoked in case of persistent and serious violation of the terms of the contract of the sale or violation of law. He also recorded that it appeared from the concerned note of the Assistant Commissioner, (HQ)/ D.C. that prima facie the licence G. Mohandas had used fake import permits and a criminal case had been registered against him under the Bombay Prohibition Act, 1949 and 3,250 boxes of IMFL items against fake imports were seized by the Excise Authorities in Nagpur and the licencee G. Mohandas was arrested in connection with crime case No.53/96 on 15.3.96 on the basis of non-bailable warrant issued by the C.J.M. Nagpur and there were therefore strong grounds to believe that G. Mohandas wasinvolved in serious violation of law. As such it was recommended by the Excise Secretary also that the license issued to G. Mahandas for the year 1995-96 might be revoked forthwith. As regards the auction conducted on 22.2.96 for the year 1996-97 the Excise Secretary specifically recorded that the bid of G. Mohandas was accepted by the then Lieutenant Governor, vide minutes at page 53/n'. He then recorded that 'however, in view of the fact that Sri G. Mohandas is involved in the criminal case as mentioned above, we may now review the decision'. The Excise Secretary accordingly proposed cancellation of the result of the auction held on 22.2.96. Therefore we see that even the Excise Secretary also in his note dated 22.3.96 expressly recorded, far from suppressing or concealing the fact, that the bid of G. Mohandas was accepted by the previous Lieutenant Governor, but in view of the prima facie and circumstances regarding the involvement of G. Mohandas in the criminal case the earlier decision might be reviewed. The express reference to the earlier approval of the bid of G. Mohandas by the earlier Lieutenant Governor and the necessary of reviewing the same in view of the facts and circumstances stated in the note, all found place in paragraph 64 of the note of the Excise Secretary and the earlier paragraph 63 contained the factual background about the involvement of G. Mohandas in crime No. 53/96. He also proposed for blacklisting him. in paragraphs 65 of his note dated 22.3.96 the Exercise Secretary suggested that the matter might be referred to the CBI for investigation as the State exchequer had been deprived of its rightful dues and meanwhile pending the result of the enquiry no license to vend beer, wine, foreign liquer including IMFL might be issued and a fresh look at the liquor policy might be taken. The file then went to the Judicial Secretary and on that very day, that is, on 22.3.96 the Judicial Secretary in his note referred to the earlier notes including the decision of the earlier Lieutenant Governor dated 12.3.96 regarding the approval of the bid. Thus we find that the Judicial Secretary also specifically referred to the earlier decision of the Lieutenant Governor dated 12.3.96 by which the Lieutenant Governor had accepted the bid and directed for entering into an agreement with G. Mohandas and for issuing license in his favour for the year 1996-97. We fall to understand how therefore it could be said that the bureaucrats suppressed the earlier decision of the earstwhlle Lieutenant Governor. As a matter of fact in every note, as we have seen, attention to the earlier decision of the earstwhlle Lieutenant Governor dated 12.3.96 was drawn.

9. The file then went to the Chief Secretary. The Chief Secretary in his hand-written note expressly referred to the earlier notes. He recorded that D.C.(AJ had recommended cancellation of the license of G. Mohandas for the year 1995-96 forthwith and for black-listing him and on the same ground (D.C. and others) had proposed cancellation of auction for 1996-97 in which G. Mohandas had emerged as the highest bidder. The Chief Secretary then recorded that the 'Secretary (Excise) in his note in paras 63 and 64 for the reasons stated therein' had also supported the proposal and recommended revocation of the license of G. Mohandas for 1995-96 and cancellation of the result of auction held on 22.2.96 and also for black-listing him from further dealing with the administration. The Chief Secretary also referred to the opinion expressed by the Secretary (Judicial). Then the Chief Secretary recorded that if the above proposal metthe approval of Lieutenant Governor (L.G.) then she might approve cancellation of G. Mohandas license for the current year forthwith, blacklist him for further dealings with the administration, cancel the result of auction hold on 22.2.96 and inform the court accordingly and await further order of the court. He also placed for consideration whether the matter might be referred to the CBI as recommended by the Excise Secretary. This note was made by the Chief Secretary on 22.3.96. The Lieutenant Governor R. Bajpayee then on 25.3.96 endorsed her approval thereto. It has been submitted by the learned Advocate for the appellants that the new Lieutenant Governor who was the Lieutenant Governor of Pondicherry and was holding additional charge of the Lieutenant Governor of Andaman and Nicobar Islands was functioning from Pondicherry and the relevant file and all connected flies and papers with notes of the officers including the Chief Secretary dated 22.3.96 were sent from Port Blair to the new Lieutenant at Pondicherry and the new Lieutenant Governor approved the proposal of the Chief Secretary in the file at Pondicherry and thereafter the file came back to Andaman and the file was dealt with at Andaman on 29.3.96 as would appear from the note of that date which is at page 532 of the paper book. In that note it was recorded that the file might be returned to D. C. (Andaman) for further necessary action. The learned trial Judge found fault with the notes dated 22.3.96 on the assumption that the Chief Secretary and other officers deliberately suppressed and concealed that the earlier Lieutenant Governor had already taken decision to accept the bid of G. Mohandas for the year 1996-97. In our opinion the view taken by the learned trial Judge is not only uncharitable to the Chief Secretary and other officers but is also not sustained by the facts. The note of the Chief Secretary cannot also be stated to be misleading by any means. The Chief Secretary in this case, recommended certain steps for the approval of the Lieutenant Governor on the basis of recommendations made by certain other officers in the continuing note. It cannot escape notice that in making these recommendations the Chief Secretary approved the recommendations which were made by the other officers in their notes in the file. It is also a glaring fact that in his note the Chief Secretary while placing his proposals, did not independently record any reason in support of the proposed steps. There is no doubt that for the suggested steps there must be reason. It is not a case that in suggesting or proposing the steps noted by him for the approval of the Lieutenant Governor, the Chief Secretary independently or expressly recorded some reason of his own while suppressing some facts. In support of the proposed steps the Chief Secretary did not give a single reason of his own. All that he did was that he first referred to the note of the Deputy Commissioner wherein the Deputy Commissioner, by endorsing the note of Assistant Commissioner (H.Q) recommended certain steps in respect of G. Mohandas. The Chief Secretary referred to the note of the D. C. (A) wherein the D.C., by endorsement, recommended cancellation of the license of G. Mohandas for 1995-96 forthwith. The said note endorsed by the D.C. contained the reasons in support of the recommendation for cancellation of the license for 1995-96. The Chief Secretary did not give any independent reason of his own. He only referred to the recommendation of the D. C. containing reasons for such recommendation about the cancellation of the license for the year 1995-96. The Chief Secretary thereafter expressly noted that'on the same ground they have proposed cancellation of auction for 1996-97.....' Here also, regarding the proposal for cancellation of the auction for 1996-97 the Chief Secretary did not record any independent reason of his own and he rather referred to the ground assigned in the note endorsed by the Deputy Commissioner. In that note, we have seen, the note of the earlier Lieutenant Governor was specifically referred to. Then again the Chief Secretary in his note dated 22.3.96 expressly referred to the fact that the Excise Secretary in his note in paras 63 and 64' for the reasons therein' had also supported the proposal and recommended revocation of the license of G. Mohandas for 1995-96 and cancellation of the result of auction held on 22.2.96. Therefore here also the Chief Secretary while referring to the proposal for cancellation of the result of the auction held on 22.2.96 did not give any reason whatsoever of his own in support of such proposal but expressly referred to the reasons recorded by the Excise Secretary in paragraphs 63 and 64 of his note. As we have also seen, the Excise Secretary tn paragraphs 63 and 64 elaborately recorded the reasons in support of his proposals. In paragraph 64 the Excise Secretary expressly recorded, as we have seen, that the bid of G. Mohandas had been accepted by the then Lieutenant Governor vide minutes at 53/n, but however in view of the fact that G. Mohandas had been involved in the criminal case the said decision might be reviewed and accordingly he proposed cancellation of the result of the auction held on 22.2.96. Where then is the question of suppression of fact by the Chief Secretary while proposing cancellation of the result of the auction held on 22.3.96 The Chief Secretary in his note dated 22.2.96 expressly referred to the reasons assigned by the Excise Secretary in his note of the same date for cancellation of the auction for 1996-97. In that note the Excise Secretary expressly recorded the necessity of reviewing the decision of the earlier Lieutenant Governor on the grounds stated in the note and the Chief Secretary in his note also, instead of giving any reason of his own, expressly referred to that portion of the note of the Excise Secretary and the grounds stated therein regarding the proposed cancellation of the result of the auction for 1996-97 after reviewing the decision of the earlier Lieutenant Governor. The new Lieutenant Governor while reading the note of the Chief Secretary or for that matter any one reading the said of the Chief Secretary will find that the Chief Secretary on the basis of the notes of the other officers are recommending certain things including cancellation of the result of the auction for 1996-97. The new Lieutenant Governor or for that matter any one reading that note of the Chief Secretary will also find on a simple perusal of the note of the Chief Secretary that the Chief Secretary himself is not expressly recording any reason for the proposed steps. It is only natural that the Lieutenant Governor reading the note of the Chief Secretary proposing certain steps including cancellation of the result of the auction will naturally pose a question to himself or herself as to why the cancellation of the result of the auction is being proposed. The Lieutenant Governor or for that matter any one going through the note of the Chief Secretary is expected to search for the reasons in support of the proposed steps. The Chief Secretary does not record any independent reason of his own in his note. For reasons in support of the proposed steps the Chief Secretary in his note expressly refers to the note endorsed by the Deputy Commissioner and also expressly refers to certain specified paragraphs in the note of the ExciseSecretary where the Excise Secretary for reasons stated therein supported the proposals including the proposal to cancel the result of auction after reviewing the decision of the earlier Lieutenant Governor. The Chief Secretary therefore, instead of assigning any independent reason whatsoever by expressly spelling out such reason, only adopts the reasons assigned by the other officers in their concerned notes including the reasons assigned by the Excise Secretary for cancellation of the result of the auction after reviewing the decision of the earlier Lt. Governor. The Lieutenant Governor therefore in order to know the reasons which prompted the Chief Secretary to recommend the proposed steps must refer to the relevant paragraphs of the note of the Excise Secretary to which her attention has been drawn by the Chief Secretary by express reference to those paragraphs for finding out the reasons in support of the proposal. And once the new Lieutenant Governor peruses those paragraphs in the note of the Excise Secretary to which the Chief Secretary his specifically referred for appreciating the reasons in support of the proposed steps including the cancellation of result of auction, the new Lieutenant Governor will at once come to know that earlier the out-going Lieutenant Governor had taken a decision for accepting the bid of G. Mohandas but for reasons stated in the note of the Excise Secretary a review of that decision of the earlier Governor was proposed and the cancellation of the result of the auction for 1996-97 was proposed as a direct sequel to such review of the decision of the earlier Lieutenant Governor in the matter. The new Lieutenant Governor is presumed to have made the exercise before approving the proposals of the Chief Secretary because the Chief Secretary in his note did not say that there was no reason to make the proposals nor did he independently record any reasons and he rather only attracted the attention of the Lieutenant Governor by expressly referring to certain portions of the note of the Excise Secretary for finding out the reasons in support of the suggested steps. There is therefore absolutely no scope of holding that there was any suppression, far less any deliberate or fraudulent suppression of facts from the new Lieutenant Governor while inviting her to consider the proposals including the proposal to cancel the result of the auction for 1996-97. The observations of the learned trial Judge against the Chief Secretary and other officers condemning them in the manner in which it has been done for wrongly assumed suppression of facts from the new Lieutenant Governor is patently ill-founded and is not borne out by records. The records rather show that everything was placed before the new Lieutenant Governor including the decision of the earlier Lieutenant Governor and the reasons that necessitated a review of such decision. The charge of suppression of facts by bureaucrats from the new Lieutenant Governor is rather misconceived and unwarranted.

10. As we have already seen a warrant of arrest against G. Mohandas was issued in connection with crime No. 53/96 by the Chief Judicial Magistrate, Nagpur and in execution of the said warrant G. Mohandas was arrested on 15.3.96 in the office of the Deputy Commissioner, Port Blair when two officers of the State Excise Department, Nagpur were present there. It is also to be noted here that on 15.3.96 in the forenoon the Deputy Commissioner, Port Blair wrote a letter to G. Mohandas stating that on perusal of office records it was found that he had not submitted the monthly stock statement of liquor and the monthly volume of salessince September, 1995; it was further stated in that letter that such lapse on the part of G. Mohandas occurred despite repeated reminders from the end of the Deputy Commissioner. It is also mentioned therein that even the dealing assistant had been sent to him several times for personally obtaining the returns but to no effect. It was pointed out that lapse in the matter constituted clear breach of license conditions. It may be mentioned here that the clause 6(1) of the terms and conditions subject to which bids were invited and subject to which the agreement was made with G. Mohandas for 1995-96 and the clause 2(g) of the license granted of him for the year 1995-96, in express terms, required the auction purchaser licensee to furnish to the Deputy Commissioner monthly statements of imports, sale and stock position by the 5th of the succeeding calender month. Since G. Mohandas was the licensee for the year 1995-96 it was therefore incumbent upon him in view of the terms and conditions of the agreement and the license issued for the said year to regularly submit monthly statements of imports, sale and stock position to the office of the Deputy Commissioner by the 5th of the succeeding month. in the letter dated the 15th March, 1996 issued to G. Mohandas the Deputy Commissioner was pointing out that in breach of such license conditions G. Mohandas did not submit the monthly stock statement of liquor and the monthly volume of sales for the past period mentioned therein inspite of repeated requests and accordingly G. Mohandas was once again directed finally to submit the pending monthly stock statements, monthly volume of sales and the advice notes accompanying all consignments brought against Import permits, by 5 p.m. 15.3.96. He was reminded that failure to do so would entail stringent action as deemed appropriate. The said letter was served at 11 a.m. on 15.3.96. it may be mentioned here that the condition 2(1) of the license granted to the G. Mohandas for the year 1995-96 stipulated that the license would be liable to be revoked in case of persistent or serious violation of the terms of the contract of sale or violation of law. The statements required to be submitted in view of the letter dated 15.3.96 were however not submitted within the stipulated time and in view of the FIR lodged at Nagpur by the Slate Excise Nagpur and on the request of the State Excise Authorities of Nagpur, under the direction of the Deputy Commissioner, Port Blair, the officers of Andaman administration inspected the places of business of G. Mohandas in the night of 15th March, 1996 and made seizure of documents and sealed his shops and godowns. On 16.3.96 the Deputy Commissioner, Andaman again issued a notice requiring G. Mohandas to produce the monthly stock statements, the monthly sales position and the advice notes on or before 5 p.m. on 20.3.96 and it was also mentioned that till then the shops and godowns would remain sealed. To the said letter of the Deputy Commissioner dated 16.3,96 a reply was sent on behalf of G. Mohandas on 18.3.96 requesting the Deputy Commissioner that the office copies of the monthly sales and stock statements and permit register which were at that time in the office of the Deputy Commissioner might be returned so as to enable preparation and submission of the required statements. In that letter dated 18.3.96 request was also made for physical verification of the stocks in the shops and godown without delay and allow opening of the shops and godown immediately. In reply to the said letter dated 18.3.96 issued on behalf of G. Mohandas the Deputy Commissioner with his letter dated 19.3.96 furnished xerox copies of monthly sales register, stock register andpermits register in 13 items as mentioned in the said letter and G. Mohandas was directed also to submit (further) certain additional documents and records mentioned therein so as to facilitate expeditions physical verification of shops and godowns. Although the said letter was issued by the office of the Deputy Commissioner on 19.3.96 along with xerox copies of 13 items of documents, yet the same was received in the office of G. Mohandas not earlier to 11 a.m. on 21.3.96. The Deputy Commissioner's subsequent letter dated the 21st March, 1996 addressed to G. Mohandas shows that the said letter dated 19.3.96 issued by the Deputy Commissioner's officer was not accepted by Yusuf (who wrote the earlier letter on behalf of G. Mohandas) or any one else in the office of C. Mohandas on the ground that they were not authorised to accept the communication on behalf of the license, and the reply was ultimately accepted at 11 a.m. on 21.3.96 after inordinate delay. It thus prima facie appears that although the administration in reply to the letters issued on behalf of the licencee dated 18.3.96 promptly supplied copies of documents numbering 13 items along with their letter dated 19.3.96 yet the same were not accepted in the office of the llcencee till 21.3.96 whereas the dead-line fixed by the letter dated 16.3.96 issued by the administration for receiving reply from the licensee expired at 5 p.m. on 20.3.96. if anybody has to be blamed for not receiving the documents sent by the administration on 19.3.96 it is licensee or his agents and employees who refused to accept the same even on tender till 21.3.96 and the administration cannot be blamed for this. However on 21.3.96 a letter was written on behalf of the liceiicee asking for certain documents from the Deputy Commissioner with reference to the letter dated 19.3.96 issued by the Deputy Commissioner. A letter was also written on 21.3.96 from the Deputy Commissioner's Office to G. Mohandas that since the required records and documents were not submitted by the llcencee insplte of the expiry of the deadline, the administration was constrained to keep his shops and godowns sealed. By that letter the licencee was further directed to explain as to why his license for the year 1995-96 should not be cancelled in view of his persistent default and intentional avoidance which constituted a clear and comprehensive breath of license conditions and why the auction for 1996-97 also should not be cancelled. The reply was wanted by 5 p.m. on 22.3.96. That letter of the administration dated 21.3.96 was also not complied with.

11. As we have already seen, a note was then initiated on 22.3.96 by the administration recording therein the Nagpur incident, the detection of fake and forged IMFL permits.in the name of G. Mohandas, the lodging of FIR and starling of crime No. 53/96 against him and others at Nagpur and also about his failure to submit the required statements thereby exposing him to action for violation of the license conditions and also for violation of law. Accordingly it was proposed that his license for 1995-96 might be cancelled, he might be black-listed, the result of the auction for 1996-97 might also be cancelled and the matter might be referred to CBI for investigation. The note of the Excise Secretary not only referred to the earlier decision of the outgoing Lieutenant Governor to accept the bid of G. Mohandas, but also specifically recommended for review of that decision and taking of the proposed actions. That was also endorsed by the Chief Secretary on 22.3.96. The file then went to Pondlcherry andthere the new Lieutenant Governer approved the proposals in the flle on 25.3.96. Then file came back from Pondicherry to Port Blair and after such return of the file it was dealt with first on 29.3.96 by a note in which the file was directed to returned to the D.C. (A) for further ncecessry action.

12. However in the meantime G. Mohandas filed two writ petitions one being C.O. No. 26(W) of 1996 and the other being C.O. No. 27(W) of 1996. Both these writ petitions, it appears, were moved on behalf of G. Mohandas on 26.3.96 before U.C. Banerjee, J. The writ petition 26(W) of 1996 was mainly against the sealing of shops and godowns of the licencee G. Mohandas by the Andaman Administration in the night of 15.3.96. We have already seen that the Andaman Administration in that night inspected the shops and godowns of the licencee G. Mohandas. sealed the same and also seized documents. That was done in the background of the Nagpur incidents and on the request of the State Excise authorities, Nagpur. The learned Judge was of the opinion that even assuming that the proceeding had been initiated against the petitioner at Nagpur by reason of user of forged permits, yet the matter was still at the stage of investigation and it could not be said to be in consonance with the concept of Justice that only by reason of a pending investigation and without any further materials on record, the petitioner should be deprived of his right to carry on his trade or business. The learned Advocate for the writ petitioner. G. Mohandas who is the respondent herein wanted to argue that in view of such observation of the learned Judge it was not open any more to the administration to take any further steps even regarding the cancellation of the auction for 1996-97 on the ground which was not found sufficient by the learned Judge to deprive the licencee of his right to carry on his trade or business. The learned Advocate for the respondent herein in this connection also tried to import the principle of res-Judicate on the basis of the above observation. In our considered view there cannot be any question of res judicata by reason of anything stated by the learned Judge in the order dated 26.3.96 which was concerned with the question of depriving the licencee of his right to carry on his trade or business in respect of which he was already holding a license for a specified period. In the said writ petition C.O. 26(W)/96 no question of cancellation of the auction for 1996-97 was at all involved nor did the orders passed in that case say anything about the legality or propriety of any possible or anticipated action for cancellation of the auction for 1996-97. However it must not be missed that even whatever observation was made by the learned Judge in that connection in C.O. 26(W)/96, It was made in the perspective that 'by reason of a pending investigation and without any further materials on record', the licensee should not be deprived of his right to cany on his trade or business '. Now as we will see from a perusal of the impugned order dt. 15.4.96 by which the auction proceeding for the year 1996-97 was cancelled, such cancellation of the auction was based not only on the ground of pending criminal investigation against G. Mohandas but also on the further ground of detected discrepancies as mentioned in the annexures-A and C, to the administration's letter dated 29.3.96 and which discrepancies could not,in the opinion of the administration, be satisfactorily explained by G. Mohandas. Therefore the factual matrix was also not the same when the impugned order dated 15.4.96 passed as it was when the learned Judge considered the matter involved in C.O.26(W) of 1996. Consequently when the matters for consideration were altogether different--one being against deprivation of existing right under a continuing license and the other being cancellation of auction for the succeeding year when no right under any license for that year had yet accused in favour of any one--and the factual matrix was also not the same in the two situations by reason of the discrepancies subsequently detected, there cannot be any question of res judlcata. it has also to be noted here that by order dt. 26.3.96 the learned Judge permitted the administration to make an inventory of the goods lying in the shops and godowns of C. Mohandas, Then after the inventory was made, the learned Judge in the order dated 27.3.96 expressly granted liberty to the Dy. Commissioner to take steps in accordance with law if there had been any infringement of the terms of license. The administration was therefore within its right and liberty to lake action in accordance with law for the discrepancies detected on the basis of inventory where such discrepancies indicated violation of the terms and conditions of the license. Such detected and unexplained discrepancies thus furnished an additional ground for the administration to cancel the auction for 1996-97 as recorded in the impugned order No.336 dated. 15.4.96. There is nothing out of track in it.

13. it has been argued before us on behalf of G. Mohandas that on 27.3.96 when his learned Advocate submitted before U.C. Banerjee, J. in C.O.26(W) of 1996 that inventory had been made but nothing objectionable was found, the same was not controverted at that time by the learned Advocate appearing for the administration. In our opinion there is nothing unusual or wrong in it as the stage for controverting the same was not yet ripe. Whether the stocks found on inventory contain anything contrary to the terms of the license obviously cannot be detected on the spot and this can be detected only after verification of the inventory items with reference to the office records and other relevant documents which obviously has to be done not at the time of making the inventory but subsequently. On the basis of such inventory the administration made verification of the stocks found on inventory with reference to the relevant records and documents is the office of the Dy. Commissioner and on 29.3.96 informed licencee about the discrepancies detected by such verification and awaited explanation.

14. The other writ petition, namely, C.O. No. 27(W) of 1996 which was also moved on 26.3.96 was disposed of by the same learned Judge, namely, U.C. Banerjee, J. by order dated 28.3.96. The same and the resultant developments and correspondence between the parties however need not detain us because the impugned order No.336 dated 15.4.96 is not based on factor involved in that writ petition, namely non-compliance of administration's letter dt. 16.3.96

15. Now going back to the administration's letter dt.29.3.96, it is to be noted that the stocks found on inventory were verified with reference to the records maintained by the administration and several discrepancies were detected by such verification. The nature of the detected discrepancies was that stocks were found in shops and godowns bearingmanufacturing dates which were subsequent to the date of arrival of consignment as per records. This prima facie indicated import of stock on fake permits. As many as 36 instances of this nature were catalogued in annexure-A to the administration's letter dated 29.3.96. Then again, stocks were found in different shops although no permits for such stocks were issued in respect of these shops. As many as 54 instances of this nature were catalogued in annexure-C to the said letter. The licencee G. Mohandas was asked to produce on 1.4.96 all documents relating to the import of the listed items. The discrepancies noted in annexure-B to the said letter are however not mentioned here because the explanation subsequently offered by the licensee G. Mohandas in respect of the same was found satisfactory by the administration as communication by their letter dated 1.4.96. In reply to the administration's letter dated 29.3.96, the licensee's office wrote a letter dt. 31.3.96 in which it was stated inter alia that the books of accounts were lying with their auditors in mainland and it would take time to give the particulars of the previous year. It was also stated in that letter of the licencee that the administration was asking for same documents which (In the opinion of the licensee) were neither relevant nor required to be filed by the licensee. He even threatened to open his shop from 1st April pending execution of agreement and issuance of license. He however also tried to explain in his own way. as far as he could, the discrepancies pointed out to him and also stated that further details would be submitted within 15 days. No such further details were however submitted. It appears that as regards the discrepancies mentioned in annexure-A to the administration's letter dt. 29.3.96, the licensee could not virtually offers any explanation in his reply dated 31.3.96. However what in substance is stated by the licensee in his said reply in respect of discrepancies pointed out in annexures-A & C to the administration's letter dated 29.3.96 is that the licensee imports consignments from mainland through Madras Port and it docs not became possible to segregate the goods brought against different permits in respect of different shops and they are stored in the Central godown at Andaman from which they are supplied to the different shops according to requirement of the respective shops irrespective of whether such supply conforms to the permits issued for the respective shops. This reply of the licensee dated the 31st March, 1996 prfma/acte shows two things. One is that the consignments of liquor for the licensee were being transported through Madras Port. The other is that there were goods in different shops which were not meant for such shops as per the permits issued for the particular shops. The discrepancies pointed out in the Administration's letter dated 29.3.96 that the manufacturing dates of a number of items of goods were found to be later in point of time than the date of arrival of the consignments under permits issued by the administration has not been practically sought to be explained by the licensee in his reply dated 31.3.96. The question whether the explanation offered by the licensee in respect of the detected discrepancies are acceptable or not is a matter primarily for the administrative authorities to consider and decide. On consideration of the said reply of licensee dated the 31st March, 1996 the administration wrote a letter to the G. Mohandas on 1st April, 1996 wherein they clearly stated that the reply to annexure-B to the administration's notice dated 29.3.96 was found satisfactory and the same was accepted, but the reply to annexure-A and C was howeverfound not satisfactory and specific instances were again mentioned where the manufacturing date was found to be latter in point of time with reference to date of arrival of consignment as per records. in this background it was staled in the said letter of the administration dated 1.4.96 that there was no plausible reason as to how a consignment with manufacturing date later than the date of last arrival could reach Port Blair except with the help of fake/forged permit. The inference drawn by the administration from the facts and circumstances cannot be said to be arbitrary or unreasonable, at least prima facie. Ultimately by the impugned order No.336 dated the 15th April, 1996 the entire auction proceeding held on 22nd February. 1996 was cancelled and a public notice to that effect was also issued by the impugned public notice dated 15th April, 1996.

16. Now let us examine whether any interference by the writ court with the impugned order of cancellation of the auction is warranted. We have seen that the steps taken by the administration in this regard are mainly based on two factors. One is the existence and use of fake and forged permits in the name of G. Mohandas for transporting huge quantity of IMFL and starting of criminal case No. 53/96 in that connection at Nagpur against G. Mohandas and others leading to his arrest. The other is the detected discrepancies in the stocks of IMFL found in the shops and godowns of G. Mohandas at Andamans which could not be explained by him inspite of opportunity given for the purpose and the inference drawn by the Andaman administration from such unexplained discrepancies that stocks were brought with the help of fake permits or by other illegal means, which in ference has been recorded in the impugned order No.336 dated 15.4.96. The fact what G. Mohandas was the highest bidder for 1996-97 and had deposited 50% of the bid money did not by itself give any contractual right to him to ask for a license from the Administration. Clause 6(11) of the terms and conditions of the auction clearly stipulates that acceptance of 50% of bid money on the date of bidding will not be construed as acceptance of the bid. The bid was an offer under the Indian Contract Act, 1872. Such offer does not give any contractual right. in order to give any contractual right the offer has to be accepted by the other side and such acceptance has to be communicated to the person making the offer. Under section 4 of the Indian Contract Act the communication of acceptance is complete, as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor, and as against the acceptor, when such communication comes to the knowledge of the proposer. We have seen, in the present case, by reason of the order of the earlier Lieutenant Governor in file on 12.3.96, there was only a decision--obviously an administrative decision--to accept the offer of G. Mohandas. That decision to accept the offer was however not communicated to G. Mohandas and was virtually revoked by the subsequent order of the learned Governor dated 25.3.96 and the impugned order dated 15.4.96. Therefore there was no enforceable agreement or contract between the parties in the matter. It may be noted here that section 5 of the Contract Act inter alia provides that an acceptance may be revoked at any time before communication of the acceptance is complete as against the acceptor. Therefore G. Mohandas has no contractual right in the matter.

17. It has been argued on behalf of G. Mohandas that even in matters pertaining to auction the State authorities cannot act arbitrarily in violation of Article 14. A number of decisions also have been cited on behalf of G. Mohandas in support of the argument that State action should not be arbitrary or unfair (viz. S.L. Kapoor v. Jagmohan, : [1981]1SCR746 , Olga Tellis v. Bombay Municipal Corpn., : AIR1986SC180 , Erusian Equipment v. State of West Bengal, : [1975]2SCR674 , Ramana v. I.A. Authority of India, : (1979)IILLJ217SC , Jonaky Ganguly v. Union of India, 1994(2) CLJ 320. etc.). It is however not necessary here to discuss all these decisions because the law is now well settled that state action even in respect of matters relating to auction must not be arbitrary or offensively discriminatory,--in other words, must not be violatlve of Article 14. The decision to accept the bid of G. Mohandas as taken by the then Lieutenant Governor as recorded by him In file on 12.3.96 is indeed an administrative decision. As we have seen, this decision was subsequently reviewed by the administration upto the level of the new Lt. Governor for recorded reasons. There is no denying of the fact that an administrative decision can be reviewed by the administrative authority if the situation so demands. Of course, such review must not be for whimsical or arbitrary reasons. In the present case can it be said that the review of the earlier decision was made on whimsical or arbitrary reasons? In our considered view, definitely it cannot be said so. Not only that a criminal case was started at Nagpur against some persons including G. Mohandas for transportation of IMFL by using fake and forged permits standing in the name of G. Mohandas, but even on subsequent inventory of stocks found in the shops and godowns of G. Mohandas at Andamans it was prima facie detected on verification of the records maintained by the administration that there were discrepancies--unexplained discrepancies at that--suggesting that stocks had been brought to Andamans in the shops and godowns of G. Mohandas by using fake permits or by other illegal means. The entire panorama of all these facts were evidently not there before the administration on 12.3.96 when the earlier Lieutenant Governor directed for accepting the bid of G. Mohandas. It was only on 15.3.96 that G. Mohandas was arrested at Port Blair in execution of a warrant of arrest issued by CJM Nagpur in connection with a case for illegal importation of IMFL. Although earlier the Andman administration was replying to the quarfes coming from the State Excise, Nagpur relating to G. Mohandas, yet understandably the matter precipitated for the Andaman administration when an Excise team from Nagpur arrived at Port Blalr with a warrant for arrest of G. Mohandas and he was arrested at Port Blalr in execution of that warrant in connection with the Nagpur case regarding illegal transportation of IMFL. In view of such subsequently developed situation of a precipitative nature, the Andaman administration had to be circumspect at that stage and had to think of taking a second look before finalising the IMFL trade matter with G. Mohandas for the succeeding year. Such circumspection, in view of the developing situation, was rather only a natural and prudent reaction for any responsible state authority amenable to administrative accountability. The subsequent developments leading to detection of discrepancies by inventory, suggesting importation of IMFL by G. Mohandas by using fake permits or by illegal means rather prime facie added a corroborative dimension to the culpable situation that involved him in the Nagpur crime case. In our consideredview, in view of the back-grounds and the developments mentioned in the impugned order No.336 dated 15.4.96 it would have been an irresponsible act on the part of any administration worth the name to enter into an agreement with the same person for 1996-97 and issue license to him when tangible facts were thrown up prima facie showing culpable violation of the terms and conditions of the license for the current year, namely, 1995-96 in respect of the same subject-matter, namely, trading in IMFL.

18. The question is not whether the guilt of the licensee or his culpable involvement in IMFL-related crime has been proved beyond doubt. Rather the question is whether in view of the facts and circumstances appearing in the scene it can be said that the subsequent decision of the administration to review its earlier decision regarding the auction can be said to be arbitrary or discriminatory. We have seen how the subsequent inventory when compared with the records of the administration rather prima facie indicated the involvement of the licensee in illegal importation of stocks at Andaman, and the same also has been projected in the impugned order No.336 dated 15.4.96. The ultimate decision taken by the administration to cancel the auction proceeding itself in the background of the facts and circumstances obtaining in the matter, far from being arbitrary or discriminatory, is rather a very reasonable course adopted by the administration by way of reviewing its earlier decision to accept the bid before the said decision was communicated to G. Mohandas or was put to effect in any way. No question of discrimination in the matter arises because it is not that the administration has chosen to given the license to another bidder of a lower bid in preference to G. Mohandas. Such decision also cannot be termed as arbitrary, because the decision, as we have seen, has been taken by circumspection based on facts and factors which cannot be said to be irrelevant. In this case, as we have noticed, G. Mohandas was also given opportunity to explain the discrepancies detected by the administration but the explanation furnished by him was found to be unsatisfactory by the administration for reasons stated in their letter dated 1.4.96, so far as the discrepancies mentioned in annexures-A and C of the administration's letter dated 29.3.96 were concerned while the explanation relating to annexure-B was found satisfactory. That being so there is no scope of arguing that the G. Mohandas was not given any opportunity to explain the discrepancies which were indicative of illegal importation of IMFL to Andamans beyond permits actually issued by the administration for the year 1995-96. The decisions of the Supreme Court in S.L. Kapoor v. Jagmohan, AIR 1981 SC 134 and Olga Tellis v. Bombay Municipal Corpn., : AIR1986SC180 as cited by the learned Advocated for G. Mohandas are not applicable to the facts of our present case. In the case of S.L. Kapoor (supra) the Municipal Committee was superseded during its tenure without giving any opportunity to offer explanation. In our present case, as we have seen, G. Mohandas had no accured right yet in his favour to have the license for 1996-97. His only right with regard to auction was that the administration in dealing with the same must not act discriminatorily or arbitrarily in Violation of Article 14 and we have seen that the steps taken by the administration in the matter can not be said to be vlolative of article 14 by any means. In the case of Olga Tellis (supra), the matter involved was eviction of payment dwellers. The Supreme Court in that case, it seems,(vide paragraph 49 of the decision) was of the view that the payment dwellers, even if they were trespassers, were not criminal trespassers but were trespassers in tort and such trespassers should be given a reasonable opportunity to depart before force is used to expel them. it need not be said that the facts of our present case are totally different. In this connection we would also like to refer to paragraph 51 of the decision in Olga Tellis (supra) wherein the Supreme Court observed that normally their Lordships would have directed the Municipal Commissioner to afford an opportunity to the peiltioners to show why the encroachments committed by them on the pavements or footpaths should not be removed, but that was not done in view of fact that both sides made their contentions elaborately on facts as well as on law before the Supreme Court and having considered the same the Supreme Court was of the opinion that the Commissioner was justified in directing the removal of the encroachments. As we have seen, in our present case the Andaman administration gave opportunity to G. Mohandas to explain the discrepancies mentioned in the annexures to the administration's letter dated 29.3.96 and G. Mohandas also submitted elaborate explanation in writing on a consideration of which the administration accepted the explanation offered in respect of annexure-B as satisfactory but found that no satisfactory explanation was given in respect of discrepancies catalogued in annexure-A and C and which discrepancies indicated importation of IMFL to Andamans by illegal means or by fake permits. The fact that a portion of the explanation was accepted as satisfactory rather clearly indicates an unbiased and bona fide approach on the part of the administration.

19. The learned Advocate for G. Mohandas argued that the decision of the Supreme Court in Tata Cellular v. Union of India : AIR1996SC11 would show that even pendency of CBI investigation is no bar for granting license in favour of the person against whom the investigation is pending. in our opinion, on this score the decision in Tata Cellular has not been correctly read on behalf of G. Mohandas. In that decision the selected bidders were notified of their provisional selection. There Starling Cellular which was a bidder was rejected at certain earlier stage on the ground that some investigation was then pending before the CBI. However the Minister reversed that decision as to the exclusion of Starling Cellular and accordingly the Starling Cellular also found place in the list of finally approved bidders. When the matter went to the High Court in writ petition the High Court in upholding the selection noted that there was nothing on record to suggest that any CBI enquiry was pending against the company (when the decision for inclusion in the list was taken). There was no FIR and no preliminary report adverse to the company and it was felt by the High Court that the ghost of CBI had been unnecessarily brought into play and the company appeared to have been punished for no sin of Us. It was only thereafter an FIR was filed by CBI. The pendency of such subsequent CBI enquiry, it seems, was considered inconsequential in respect of the earlier decision. In our present case the facts are different. The Nagpur crime case was there at all material times and the police investigation was also very much there which was however not taken into consideration at the earlier stage but was subsequently considered leading to review of the earlier decision when the earlierdecision was not yet communicated or made known to the person concerned. In our opinion, there is nothing in the case of Tafa Cellular which warrant a conclusion that the pendency of a criminal investigation is not matter for consideration in the decision-making process relating to an administrative decision on a subject closely associated with the subject involved in the criminal investigation. As we have seen, Jn our present case, there was not only pendency of criminal investigation but certain discrepancies were also detected suggesting prima facie illegal activity in respect of IMFL trade at Andamans by G. Mohandas and a cumulative consideration of those circumstances prompted the administration to abandon the auction itself before any right had accrued in favour of G. Mohandas except the right to have a decision of the administration in the matter free from any arbitrariness or discrimination. It has to be noted here that the decision of the Supreme Court in Tata Cellular (supra) rather supports the proposition that in respect of Government contracts and tenders while the decision and action of the Stale must be in consonance with Article 14. It is only the decision-making process and not the merits of the decision itself which is amenable to Jud(cla) review and the court does not sit as appellate court while exercising the power of judicial review.

20. The learned Advocate for G. Mohandas also cited certain decisions relating to legitimate expectation. The principle enunciated in those decisions are not in dispute. If G. Mohandas as the highest bidder had any legitimate expectation that his case would be considered by the administration with due regard to his legitimate expectation in the matter, we cannot say that the same was ignored by the administration in taking their impugned decision. That G. Mohandas was the highest bidder and was entitled to contract in normal circumstances was all through in the consideration of the administration as reflected in the impugned order and also in the relevant notes but they thought it fit to cancel the auction proceeding itself for overriding reasons recorded in the impugned order itself. The contention of the learned Advocate of G. Mohandas on the score of legitimate expectation is therefore of no avail in this case. The learned Advocate for the appellants however relied on the Supreme Court decision in Madras City Wine Merchants' Assn. v. State of T.N., : 1992(60)ELT674(SC) where it was held that the doctrine of legitimate expectation was not tnvocable by the bar licensees as there was no expectation, not any promise by Government.

21. The learned Advocate for the appellants also referred to the Supreme Court decisions in Hari Sankar v. Dy E.&T.; Commissioner, : [1975]3SCR254 and Khoday Distilleries Ltd. v. State of Karnataka, : (1995)1SCC574 in support of his contention that a citizen has no fundamental right to trade or business in liquor. The learned Advocate for the appellants also relied on the decision of the Supreme Court in State of U.P. v. Vijay Bahadur Singh, : AIR1982SC1234 in support of his contention that the administration had the right to revise its decision to grant license to the highest bidder in auction and to cancel the entire auction proceeding.

22. It has to be noted here that of the two grounds mentioned in the impugned order No.336 dated 15.4.96, for one, namely the prima/ocle involvement of G. Mohandas in the Nagpur case relating to user of fake and forged permits for importing IMFL there was the approval of the new Lieutenant Governor for cancellation of the result of the auction for 1996-97 tn the file recorded on 25.3.96 and as we have seen that was done by way of a review of the earlier decision of the previous Lieutenant Governor in the matter. That aspect of the order of the new Lieutenant Governor has been reflected in the impugned order No.336 dated 15.4.96. The other aspect of the grounds mentioned in the impugned order No.336, namely, the unexplained discrepancies regarding the stocks found on inventory no specific order of the Lieutenant Governor is, however forth coming, but the approval of the Lieutenant Governor has been attributed to that ground also in the impugned order No.336. This in our opinion is of no material consequence or significance, firstly because the discrepancy-aspect only prima facie lends support, as mentioned in the impugned order itself, to the prima facie involvement of G. Mohandas in the importation of IMFL by illegal means which is a prominent aspect of the criminal case started at Nagpur and secondly because by the order of U.C. Banerjee, J. dated 27,3.96 the Deputy Commissioner was granted liberty by the learned Judge to take action in accordance with law if any infringement of the license conditions were detected. Therefore the Deputy Commissioner himself was entitled to take action for the infringement of license conditions which was projected by the discrepancies detected on verification of the stocks found on inventory with reference to the office records. Consequently, in our opinion even if there has been any imperfection in the language used in the impugned order that by itself is not a sufficient ground for the court to interfere with the said order particularly in the back-ground of the facts and circumstances obtaining in the case. It has also to be mentioned here that subsequently it was also detected by the administration that fake permits standing in the name of G. Mohandas were also used for importation of iMFL from two other separate distilleries at different times. For that two other FIRs were also lodged by the Andaman administration with the CB1. Having regard to all the facts and circumstances we are of the opinion that this was not at all a fit case for the interference of the writ court as the impugned action of the administration cannot by any means be said to be arbitrary, discriminatory, unfair, irrational or illegal so as to mark such action as an infringement of Article 14 or otherwise bad in law. The decision taken by the administration to cancel the auction proceeding itself in the background of the projected facts and circumstances is nothing but a decision taken for administrative reason and therefore there is nothing wrong also in describing such action as an action taken for administrative reasons. We are therefore of the opinion that the learned trial Judge was not justified in allowing the writ petition and in directing the administration to enter into an agreement with G. Mohandas for the year 1996-97 and also to issue license to him for the said year on the basis of the decision of the earlier Lieutenant Governor recorded in the file on 12.3.96

23. In the impugned order the learned trial Judge has also imposed a cost of Rs.7500 to be paid personally by Sri Vlkram Dev Dutt who is the Assistant Commissioner (HQ) of Andaman District being respondent No.8 tn the writ petition. The cost has been imposed personally on the officer concerned by the learned trial Judge on the ground that the affidavit affirmed by him in the writ petition was misleading and false inasmuch as he did not disclose in his affidavit the decision of the earlier Lieutenant Governor dated 12.3.96. In our considered opinion the imposition of such cost is also not Justified. In paragraph 45 of the said affldavit-in-opposltlon the deponent has stated that the affidavit had to be prepared and settled within a period of four days only and that too after the court was closed for summer holidays. Even then in the said paragraph of the affidavit-in-opposition it was expressly stated that in view of the shortness of the time liberty might be given to the answering respondents to produce other or further materials at the time of hearing. We have seen, records were produced at the time of hearing. At any rate when we find that the decision of the previous Lieutenant Governor dated 12.3.96 was reviewed and a fresh decision was taken by the new Lieutenant Governor and when we find in that back-ground that even if the earlier decision of the previous Lieutenant Governor is brought into the picture, the same does not, in the factual matrix of the case, help the writ petitioner G. Mohadas for reasons we have elaborately discussed, the imposition of a fine of Rs. 7,500 upon the officer concerned on that score is not Justified. In view of the decision we have already taken it is not necessary for us to consider further regarding change of policy decision and return of deposit money and the impact of the same as argued at the bar.

24. It is true that in the impugned order No.336 the writ petitioner has been stated to be an unfit person for liquor business under license and it is argued on behalf of G. Mohandas that this amounts to blacklisting him which cannot be done without giving him an opportunity to represent his case before he is put on the black list. The learned Advocate also refers to certain decisions of on this aspect, such as, E.E. & c. Ltd. v. State of W.B.. : [1975]2SCR674 , etc. The principle is however not in dispute. But in our present case the impugned order really does not blacklist the writ petitioner nor has it any such effect. The operative part of the impugned order No. 336 only cancelled the entire auction proceeding reserving at the same time the right to take necessary legal action against G. Mohandas under law as may be required from time to time. This is really not a blacklisting order. If in future the administration again wants to take recourse to the process of auction regarding vending of IMFL etc and they want to debar G. Mohandas from participating in such auction, in that case they will have to take a prior formal decision in accordance with law after giving him opportunity to represent his case before he is put on the blacklist The impugned order of cancellation of auction is however not a blacklisting order.

25. It has been contended on behalf of G. Mohandas that in the C.O. No. 26(W) of 1996 and C.O. No. 27(W) of 1996 it was not disclosed before the court that the new Lieutenant Governor had already accepted on 25.3.96 the proposal of the Chief Secretary inter alia to cancel the license for 1995-96 and also the result of the auction for 1996-97. As we have seen, both the said C.O. No. 26(W) of 1996 and C.O. No. 27(W) of 1996 were dealt with and disposed of during the period from 26th to 28th March, 1996. The reason for not bringing the decision of the new Lieutenant Governor to the notice of the court when the aforesaid two writ petitions were dealt with and disposed of is quite understandable inasmuch as the concerned file was dealt with by the new Lieutenant Governor on 25.3.96 at Pondlcherry and not at Andaman and obviously there must have been a time gap thereafter before the file came back to Andaman from Pondlcherry. We have also seen that even on 29th March, 1996 the file did not come back to the office of the Deputy Commissioner. Evidently when the file came back to the office of the Deputy Commissioner at Andaman and the decision of the new Lieutenant Governor became known to the Deputy Commissioner the aforesaid two writ petitions were no more alive or pending before the court.

26. The argument advanced on behalf of G. Mohandas that the FIR in Crime case No. 53/96 does not implicate G. Mohandas as an accused is not correct. In paragraph 15 of that FIR he has been specifically named as an accused. The learned Advocate also argued that in the said FIR it was indicated that some one else was putting black money for converting it into white money. Even then, that does not necessarily exculpate G. Mohandas. The entire matter was under investigation and Mohandas was also arrested in that connection. In this background the administration did not do anything unreasonable or arbitrary by cancelling the auction proceeding itself instead of issuing license in favour of Mohandas or any other bidder of a lower bid. The learned Advocate for G. Mohandas also attracted our attention to the recommendations made by the Chief Secretary in his note dt. 22.3.96 including the recommendation to cancel the result of the auction and inform the court accordingly and await further order of the court. It is however to he noted in this connection that the court referred to therein was the court dealing with C.O. 12fW) of 1996 and obviously it had no reference to the subsequent writ petitions filed by G. Mohandas. Moreover the Chief Secretary did not say that the cancellation of the result of the auction required the rectification of the court. The import of the Chief Secretary's note was that further order of the court was to be awaited for action in the post-cancellation situation with which we are not concerned in the present writ petition. Here the grievance of the writ petitioner is against the cancellation of auction and once we find, as we do. that there is no reason to interfere with the cancellation of auction, the matter ends there and we are not required here to concern ourselves with the post-cancellation situation or development.

27. During the hearing of this appeal the learned Advocate for G. Mohandas produced before us a copy of an order of the Nagpur Bench of the Bombay High Court in relation to certain other accused of the crime case in which G. Mohandas has been involved. In our opinion in the said proceeding (Cr. writ 85/96) the matter was considered from the angle of view relating to the petitioner therein and this can not have any bearing on this appeal, far less on the impugned order.

28. In the result this appeal is allowed and the impugned Judgment and order of the learned trial court including the order imposing cost on Vikram Dev Dutt is hereby set aside and the writ petition itself stands dismissed. All adverse remarks in the Judgment of the learned trial Judge against bureaucrats in general and against particular officers also stand expunged. No cost is however ordered. In view of our above order in FMAT 2119/96 the other appeal, namely. PMAT 2118/96 also stands disposed of accordingly

D.K. Jain, J.

I agree

29. Appeal allowed




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