SIR SHADILAL DISTILLERY AND CHEMICALS WORKSversusTHE STATE OF U.P. AND OTHERS.
- Citation
- 1996 INSC 1390
- Decided
- 26 November 1996
- Disposal
- Appeal(s) allowed
Holding
Cancellation of the licence allotment without notice is invalid; the government must issue notice and afford a hearing before deciding on the grant or refusal of the licence.
Summary
The Commissioner invited tenders for supply of country‑made liquor in Uttar Pradesh for 1996‑97 and on 27 Feb 1996 allotted the districts of Saharanpur and Haridwar to Co‑operative Distillery Co. Ltd. (the third respondent). On 27 Mar 1996 the Commissioner revoked that allotment and re‑allotted Haridwar to Sir Shadial Distillery (the appellant). The third respondent filed a writ petition challenging the cancellation and re‑allocation, and the Allahabad High Court quashed the cancellation and restored the earlier position. On appeal, the Supreme Court examined whether the cancellation without prior notice violated the principles of natural justice and whether the third respondent’s factory was situated in Haridwar, as required by the tender conditions. The Court held that the Government had failed to issue any notice before cancelling the allotment, depriving the third respondent of a hearing, and therefore set aside the High Court’s order directing restoration. The Court directed the Government to issue notice to both parties, consider their objections and pass a speaking order on the grant or refusal of the licence for Haridwar within six weeks. The appeal was allowed.
Issues considered
- Whether the cancellation and re‑allocation of the liquor‑supply licence to the appellant without prior notice violated the principles of natural justice.
- Whether the third respondent was entitled to the Haridwar district under the tender conditions, considering the location of its factory and the bifurcation of districts.
- Whether the High Court’s order restoring the earlier allotment was legally sustainable.
Subjects
Judgment
SIR SHADILAL DISTILLERY AND CHEMICALS WORKS .A
v.
THE STATE OF U.P. AND OTHERS.
NOVEMBER 26, 1996
[K. RAMASWAMY AND G.T. NANAVATl;JJ.) B
Liquor Shops-Licence fo1-Cancellation o~Validity'-Licence for dis-
tricts of Haridwar and Saharanpur granted to third respondent'-Subsequently
order passed by Commissioner-Licence granted for district of Haridwar can-
celled and allotted to appellant-Writ challenging cancellation and reallotment C
to appellant-Commissioner's order quashed by High .Court-Appeal-Held,
the Govemment did not issue any notice before cancellation of the allotment
made to the third respondent and the third respondent had no opportunity to
have his say in that behalf-Under these circumstances, the direction issued
by the High Court stands set aside-Direction to Government to consider D
objections of appellant and third respondent-Thereafter speaking order
should be passed for refusal or grant of licence in respect of District of Haridc
war.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 15398 of
• 1996. E.
. From the Judgment and Order dated 18.9.96 of the Allahabad High
· Court in W.P. No. 995 of 1996.
Salish Chandra, H.K. Pur~ Ujjwal Banerjee and Rajesh Srivastava
for the Appellant. F
U.R. Lalit, Gaurav Jain, G.E. Alam, Mrs. Abha Jain, Ms. Richa
Goyal and A.K. Goel for the Respondent Nos. 3-4.
The following Order of the Court was delivered :
G
Leave granted.
We have heard learned Counsel on both sides.
The admitted position is that the Commissioner had invited tenders
on December 2.1, 1996 for supply of country made liquor in various districts H
213
214 SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R.
A of U.P. for the year 1996-97. Pursuant thereto, parties had submitted their
tenders. The Commissioner by his proceedings dated February 27, 1996
allotted to the Co-operative Distillery Co. Ltd., the third respondent, the .
Districts of Saharanpur and Haridwar. He, however, revoked the same by
his proceedings dated March 27, 1996 and alloited the district of Haridwar
B to the appellant. Consequently, the third respondent filed writ petition
challenging the cancellation and reallotment to the appellant of Haridwar
District. The High Court in the impugned order has directed in the
operative part as under:
"In the result, the writ petition is allowed and orders dated
c 26.3.1996 and 27.3.1996 contained in Annexures 6 and 6-A to the
writ petition so far as it pertains to the allotment of district
Haridwar to respondent No. 3 are quashed. A mandamus is also
issued commanding the respondents 1 and 2 to restore the positfon
as it was obtained on 27.2.1996 and the opp. parties are also .
restrained from interfering in the rights of the petitioners to make
D supply to the district Haridwar."
Calling this order in question, the present appeal has been filed.
Clause 18(c) of the Tender Conditions indicates that "[I]f all the
E aforesaid conditions are fulfilled the distillery situated in the district would
be given preference in respect of supplies to the same. If there are two
distilleries situated in the same district and if there is no material difference
in the rates quoted by the said two distilleries, the distillery which was
granted the district earlier, shall be given preference."
F It is an admitted position that prior to bifurcation of districts
Saharanpur and Haridwar, Haridwar was part of Saharanpur. It is also an
admitted position that on the earlier occasion, the third respondent was
granted licence for Saharanpur and Haridwar. The question remains :
whether the factory of the third respondent is situated in Haridwar district?
G It' is an admitted position that the third respondent's factory is not situated
. in Haridwar District. It is also an admitted position that the respondent
No. 3 had not executed the agreement for the purpose of issuance of the
licence. As a result, no licence had been issued as on date.
On these facts, the question arises : whether the allotment to the
H . third respondent is correct in law? We need not express any opiniOn on
SIRSHADILALDISTILLERY ANDCHEMICALSv. STATE 215
"' the facts since,. admittedly, the Government did not issue any notice before A
cancellation of the allotment made to the third respondent on February 27,
1996 and the third respondent had no opportunity to have his say in that
behalf.
Under these circumstances, the direction issued by the High Court
stands set aside. The Government is directed to issue notice to the third B
respondent as well as the appellant, consider their objections and pass
appropriate speaking order in that behalf for grant or refusal of licence .in·
respect of district of Haridwar in accordance with the Rules to the 3rd
Respondent.
The appeal is accordingly allowed. The Government is directed to
c
issue the notice and complete the exercise within a period of six weeks
from the date of the receipt of this order. Till then status quo as on today
shall continue.
·T.N.A. Appeal allowed. D
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