STATE OF BIHAR AND ORS.versusM/S SHEO NARAIN JAISWAL PVT. LTD. AND ORS.

A                          STATE OF BIHAR AND ORS.
                                 v.
             M/S SHEO NARAIN JAISWAL PVT. LTD. AND ORS.

                                OCTOBER 24, 1997

B             (SUJATA V. MANOHARANDD.P. WADHWA, JJ.]


          Excise Law:

           Bihar Excise Act, 1915: Sections 22,29,43(5)-Manufacturer and
C    supplier of country liquor-Gran/ of exclusive privilege-Imposition of licence
    fee-More than one contractor/licensee in one zone-Ful/ licence fees charged
    from each r:rmtraclor-Held, tender conditions and conditions of the licence
    do not provide for collection offull licence fees from each contractor-Each
     licensee in one zone liable to pay total licence fee in equal proportion.
D         Words & Phrases :

          'Equal Proportion '-Meaning of

          The respondents were contractors engaged in manufacture and supply
E in wholesale of country liquor. Section 22 of the Bihar Excise Aet 1915
    empowers the State Government to grant exclusive privilege, inter alia of
    manufacturing and supplying wholesale country liquor within any specified
    local area. Tenders were invited for grating exclusi"e privilege. Initially the
    exclusive privilege was granted to only one contractor1per zone. Notice inviting
    tenders was published in the Gazette and exclusive p~ivilege was granted to
F   more than one contractor in each zone. A dispute relating to payment oflicence
    fee by each of the contractors within one zone arose. The State Government
    charged from each of the contractor in one zone full licence fee. On challenge,
    the High Court held that each of the licensees in one zone will have to pay the
    total licence fee in equal proportions. Hence the present petition for special
G   leave to appeal by the State Government.

          The contention of the State Govt. was that the word "equal proportion"
    has a reference to a proportionate reduction in the licence fee if the period
    for which the licence fee was to be paid was less than one year. It was also
H   contended that since the licence fee was in the nature of consideration for
    the sale of exclusive privilege to supply liquor in wholesale, it was open to the
                                          724
                            STATE v.S.N.JAJSWAL                               725
state to charge from each contractor in a zone the full licence fee.                 A
      Dismissing the appeal, this Court

      HELD: 1.1. The High Court has rightly come to the conclusion that
what is provided in the tender conditions as also under the licence is collection
of the total licence fee for the zone from each of the contractors in that zone      B
in equal proportions. (729-A]

       1.2. The words "in equal proportion" occur in the first part of conditions
2(b) of the tender notice and condition 6 of the licence. In the first part, there
is no reference to the proportionate reduction in licence fee on account of the
shorter period involved. The first part merely says that each of the contractors     C
or licensee will have to pay in equal proportion the licence fee in advance.
There is no reference to the period of the licence at all. For the excess sales
during the period, the second half of each of these clauses expressly provides
for increase to the same extent in the licence fee. There is no reference in
either of these clauses to a period of less than a financial year being covered
by the licence fee. Section 43(5) expressly provides in the statute itself for       D
such proportionate reduction. (728-G-H)
      2. lfthe tender conditions and the condition of the licence do not provide·
for charging full licence fee from each contract or in a zone, the State will
not be able to collect the full licence fee from each of the licensee/contractor.
Attention was also drawn to the minutes of the Cabinet meeting as indicating         E
the purpose of giving the exclusive privilege to more than one contractor being
to collect more licence fee. But if this intention is not conveyed in the terms
and conditions of the tender and the licence, such an intention, even if
expressed in the minutes of the cabinet meeting, would not be of any avail.
                                                                         1729-CJ     p
     CIVIL APPELLATE JURISDICTION: Special Leave Petition (C) Nos.
20173-74of1996.

      From the Judgment and Order dated 20.5.96 of the Patna High Court in
C. W.J.C. No 920/96 (R) and 927of1996 (R)                                            G
      Rakesh Dwivedi, Y,V. Giri, Yogeshwar Prasad, V.A. Motha, Dr. Shankar
Ghosh and Shanti Bhushan, B.B Singh, Kumar Rajesh Singh, Praveen Kumar,
Ranjit Kumar, S.P. Sinha, Chandra Bh;.ishan, Ms. Anu Mohla, G.P. Bimal, M.K.
Choudhary, P.K. Bajaj, S.K. Verma, Ms. Rachna Gupta, Ranbir Yadav and
Munish Mishra for the appearing parties.                                             H ,
    726                       SUPREME COURT REPORTS (1997] SUPP. 4 S.C.R.

A         The Judgment of the Court was delivered by

           MRS. SUJATAV. MANO HAR, J. The State of Bihar is petitioner no.
     I before us. Under the Bihar Excise Act, 1915, Section 22 provides that the
    State Government may grant to any person, on such conditions and for such
    period as it may think fit the exclusive privilege, inter alia, of manufacturing
B   and supplying wholesale any country liquor within any specified local area.
    Under sub-section (2) no grantee of any privilege under sub-section (I) shall
    exercise the same unless and until he has received a licence in that behalf from
    the Collector or the Excise Commissioner. Under Section 29 instead of or in
    addition to any duty leviable under this Act, the State Government may
C   accept payment of a sum of consideration for the grant of any exclusive
    privilege u9der Section 22. Section 43 which deals with the power to withdraw
    licences provides in sub-section (5) as follows:

            "43(5) : For the purpose of calculating the amount due to the State
            Government... ......... the amount offee payable on account of the licence
D           for the period during which it was in force shall be taken to be the
            sum bearing the same proportion to the total fee for the whole period
            for which the licence was settled as the period during which the
            licence was actually in force bears to the full period for which the
            licence was settled."

E          For the purpose of grant of exclusive privilege for wholesale manufacture
    and supply of country liquor, the State of Bihar has been divided into nine
    zones. The Board of Revenue invites tenders for the grant of the privilege of
    manufacture and wholesale supply of country liquor in sachets/bottles for
    each zone. Prior to 1995 the exclusive privilege was granted pursuant to the
    tenders received only to one supplier per zone. However, for the period I st
F   of July, 1995 to 31st of March, 1999, a notice inviting tenders was published
    in the Bihar Gazette on 3rd of June, 1995 in which it was stated in Clause 3(c)
    that in one zone more than one contractor may be granted the privilege of
    setting up sacheting plant and supplying of country liquor in sachets/bottles
    in the districts falling within the zone. Pursuant to the tenders which were
G   invited petitioner no. I-State has granted this exclusive privilege to more than
    one contractor in each of the zones. The dispute relates to the licence fee
    which is payable by each of the contractors within one zone. The respondents
    are some of these contractors.

          It is common ground that for the purpose of determining the minimum
H   licence fee payable in respect of each zone, the State arrived at the figures
            STATE v. S.N. JAISWAL [SUJATA V. MANOHAR,J.)                     727

of gross sale of country liquor in each zone during the previous financial year     A
1994-95. The annual licence fee for the subsequent financial year is determined
at the rate of Re. I per L.P. litre of liquor supplied in the previous financial
year. Schedule l to the tender notice gives the name of the zone, the
consumption of country spirit in 1994-95 and other particulars. For example,
in zone l, that is to say Patna Zone, consumption of country spirit in 1994-        B
95 was 31.66 lacs ofL.P. litres. The licence fee for Patna zone for 1995-96 is
accordingly worked out at Rs. 31.66 lacs. In zone 2, Gaya zone, the consumption
of country spirit in l 994-95 is 23.29 lacs L.P. litres. The licence fee for Gaya
zone is accordingly worked out at the rate of Re. l per L.P. litre.

     Clause 2(b) of the tender notice which was in Hindi has been translated        C
in English by the High Court as follows:

        "From each contractor of special privilege, the licenc~ fee calculated
        on the basis of Re. l per L.P. Litre on the annual guaranteed quantity
        in the particular zone in which they have to supply country liquor,
        shall be payable in equal proportion in advance in one lumpsum. If          D
        in the financial year the supply of liquor is in excess of the annual
        guaranteed quantity, the licence fee shall be enhanced to the same
        extent."

      The same term is incorporated in the licence which has been granted
to each of the contractors; but in somewhat more explicit language. It is           E
contained in condition no. 6 of the licence. The English translation of condition
no. 6 {the original is in Hindi) as rendered by the High Court is as follows:

        "6. In one zone, country liquor shall be supplied by more than one
        wholesaler. Every licensee shall have to deposit through challan in the
        Secretariat Treasury at Patna the advance licence fee in equal              F
        proportion in one lumpsum at the rate of Re. l per L.P. litre on the
        basis of consumption in the year 1994-95 as shown in Schedule I to
        the tender in respect of the zone in which country liquor is to be
        supplied. If in the financial year the supply is in excess of the
        guaranteed quantity, then the licence fee enhanced to that extent shall     G
        be payable by all the contractors. The licence fee is payable annually,
        and shall be payable in advance in each financial year, otherwise, the
        licence shall not be effective."

      Petitioner No. I has charged from each of the contractors in one zone
the full licence fee calculated at the rate of Re. I per L.P. litre based on        H
    728                      SUPREME COURT REPORTS (1997] SUPP. 4 S.C.R.

A   consumption for the year 1994-95 in that zone. But according to the
    respondents, the licence fee so calculated is for each zone. The grantees of
    exclusive privilege/contractors in each zone have to pay this total licence fee
    in equal proportinns.

            Condition No. 6 of the licence requires each of the licensees in one zone
B to deposit the advance licence fee in equal proportions. Clause 2(b) of the
    tender conditions also requires each ~ontractor to pay the licence fee in equal
    proportion" in advance. The Hindi word used for "in equal proportion" is
    "Samanupatic." The High Court has correctly translated the word
    "Samanupatic" as "in equal proportion." Looking to condition 2(b) of the
C tender conditions and condition 6 of the licence, the High Court has held that
    each of the licensees in one zone will have to pay the total licence fee in equal
    proportions. For example, the licence fee for the Patna zone is Rs. 31,66,000.
    If there are five licensees for the Patna Zone, each licensee will pay ! /5th of
    this amount in advance. According to petitioner no. I, this interpretation is
    incorrect. What is intended is that each of the licensees in one zone will pay
D the full amount of the licence fee. The words "in equal proportion" according
  . to petitioner no.I are referable to (I) the second halves of clause 2(b) of the
    tender notice and condition 6 of the licence which deal with a proportionate
    increase in the licence fee if, in the financial year in question, the supply of
    liquor is in excess of the previous years' quantities. (2) They also contend
E that the word "equal proportion" has a reference to a proportionate reduction
    in the licence fee if the period for which the licence fee is to be paid is less
    then one financial year. They contend that the tender notice in question
    related to the period I st July, 1995 to 3 Ist of March, 1999. Therefore, for the
    first financial year the period involved is !st of July, 1995 to 31st of March,
    1996. Hence the licence fee payable by each licensee will have to be
F proportionately reduced to cover the period only of nine months instead of
    twelve months.

           This contention has been rightly rejected by the High Court. The words
    "in equal proportion" occur in the first part of condition 2(b) of the tender
G   notice and condition 6 of the licence. In the first part, there is no reference
    to the proportionate reduction in licence fee on account of the shorte: period
    involved. The first part merely says that each of the contractors or licensees
    will have to pay in equal proportion the licence fee in advance. There is no
    reference to the period of the licence at all. The words "in equal proportion"
    in this sentence will have to be ignored if the interpretation of the State is
H   to be accepted. For the excess sales during the period, the second half of each
            STATE v. S.N. JAISWAL [SUJATA V. MANOHAR, J.]                     729
of these clauses expressly provides for increase to the same extent in the           A
licence fee. There is no reference in either of these clauses to a period of less
than a financial year being covered by the licence fee. Section 43(5) expressly
provides in the statute itself for such proportionate reduction. The High Court
has, therefore, rightly come to the conclusion that what is provided in the
tender conditions as also under the licence is collection of the total licence
fee for the zone from each of the contractors in that zone in equal proportions.     B

       It was pointed out by learned counsel for the State of Bihar that since
the licence fee is in the nature of consideration for the sale of exclusive
privilege to supply liquor in wholesale, it is open to the State to charge from
each contractor in a zone the full licence fee. But if the tender conditions and     C
the conditions of the licence do not so provide, the State will not be able to
collect the full licence fee from each of the licensees/contractors. Our attention
was also drawn to the minutes of the Cabinet Meeting as indicating the
purpose of giving the exclusive privilege to more than one contractor being
to collect more iicence fees. But if this intention is not conveyed in the terms
and conditions of the tender and the licence, such an intention , even if            D
expressed in the minutes of the Cabinet Meeting, would not be of any avail.

      The petitions are, therefore, dismissed.

S.V.KI                                                      Petitions dismissed.