- (1.)The auction with respect to the Madhira Taluk group of arrack shops for the excise-year 1983-84 was conducted only on 1-10-1983. The petitioner was the highest bidder, his offer being Rs. 8,23,000/-per month. He made the necessary deposits and obtained the licence on 10-10-1983. He executed a counter-part agreement as contemplated by the Rules, agreeing to pay the rental from 1-10-1983. He lifted the full minimum guaranteed quota of arrack for the month of October 1983. He also lifted the full MGO for the entire excise year. He filed the present writ petition contending that, in as much as licence to him was granted only on 10-10-1983, he is not liable to pay the rental for the period 1-10-1983 to 9-10-1983, notwitstanding the execution of the counterpart lease" by him agreeing to pay 'the rental from 1-10-1983. The contention of the petitioner is that inasmuch as, according to Rules, he cannot carry on the business nor can he lift Or sell the arrack untill a licence is granted, the lease given to him should be deemed to Have come into effect only on 10-10-1983, and hence the Government is net Entitled to Collect the proportionate rental for the previous nine days in October 1983. Reliance is placed upon the decision of a learned single Judge of this Court in Chitayya Vs. Collector. (Excise) 1980-(lI), ALT 216.
(2.)It would be appropriate to consider the relevant provisions of the Act and the Rules. They are the following:
"Sec 17: Power to grant lease : (1) The Government may, subject to such conditions as they may deem fit to impose, grant for a fixed period to any person, at any place, a lease jointly 'or severally for the supply, manufacture or sale of any intoxicant. Explanation : A lease shall not take effect until the Collector or any other competent Officer has issued a licence under this Act. (2) The Government may confer on any Officer the power mentioned in subjection (1)" 1980-(ll), ALT 216. Rule 15: Signature in the register:- Every parson whose bid or tender has been accepted shall sign his name or affix his thumb impression against the relevant entry in the register maintained for the purpose. The auctioning authority shall obtain the signature of the highest bidder in the register".

"Rule-16: Payment of rental by the auction Purchaser:- (1) The auction purchaser shall pay 2% of the annual rental as earnest money together with one month's rental on the day of the auction Immediately after the acceptance of the tender or bid as the case may be. The earnest money and one month's rental shall be in addition to the rental deposit required in Rule 18. In case of failure to remit the earnest money, if any and one month's rental on that day, the shoo or group of shops shall be reauctioned. (2) Where a shop is assigned to a Tapper's Co-operative Society, the Tapper's Co-operative Society shall pay 2 % of annual rentals as Earnest Money together with half months rental fixed by the Government on or before the date prescribed for completion of formalities".

"Rule. 17: xx xx xx Rule. 18: Other Requirements: (1) Within ten days from the date of auction the auction purchaser shall deposit two month's rental in cash or in fixed deposit certificates obtained from a scheduled bank or a District Co-operative Central Bank for the period of lease and in case a bank guarantee is offered, such guarantee shall be in force for such period till all proceedings or claims arising from the auction also are finally settled and disposed of. Provided that where the auction is conducted after the 20th September in any year, the deposit referred to shall be made within fifteen days of auction, or before the expiry of the said month whichever is earlier. (2) The auction purchaser shall also be required in all cases where the monthly bid is in excess of Rs. 10,000/- to furnish a non-encumbrance certificate in respect of properties shown in his affidavit with stipulation that during the currency of the relevant lease the the properties shown therein shall not be alienated. (3) Where a shop is assigned to a Tappers' Co-operative Society or Tribal Arrack Co-operative Society or under Tree for Tapper Scheme or is withdrawn from auction and allotted to Tappers Co-operative Society or Tribal Arrack Co-operative Society, the Society need not deposit two months rentals. It shall however pay the annual rentals in equal monthly instalments commencing from October. (4) All interest accruing on fixed deposit receipts shall vest in the Government and may be adjusted towards the government dues including interest, if any, outstanding against the auction purchaser, and if there be no such dues, it shall be refunded to the auction purchaser at the end of the lease period".

"19. Additional formality to be completed by auction purchaser of arrack shop :- (1) The auction purchaser in respect of arrack shop shall pay in advance an amount or furnish a Bank Guarantee of a Scheduled Bank or a Nationalised Bank or of the Andhra Pradesh State Co-operative Central Bank for a like amount, calculated at the rate of twenty five paise per litre in the case of 30 UP arrack and fifteen paise per litre in case of 60 UP arrack on the minimum quantity of arrack guaranteed for the year, within ten days of the acceptance of the bid or tender and if the auction takes place after the 20th September within ten days of auction or before the end of the same month whichever is earlier. (2) The amounts of advance money referred to in sub-rule (1) shall be adjusted towards any arrears outstanding against the defaulters."

"Rule 20 : x x x x "Rule 21: Counterpart agreement: - After tendering the deposit, earnest money and advance amount, it shall be the duty of the licensee to execute a counterpart agreement in conformity with the tender of his licence, in Form A-2 on the stamp paper of the value specified by the Government from time to time, before taking out a licence in respect of the lease granted to him for the sale of liquor. The counterpart agreement shall come into force with effect on the from the 1st October of the year to which the auction relates, and if the licensee executes the counterpart agreement or takes out the licence for sale after the said date, unless the auctioning authority otherwise directs it shall be deemed to have come into force on the 1st October : Provided that where the auction takes place after the 20th September, the counter-part agreement shall be executed before the end of the same month; or within fifteen days of auction whichever is earlier".
I must immediately point out that the Rules which were considered by Punnayya, J., In Chitteyya vs. Collector (Excise) (1) 1980-(ll), A.L.T. 216 are not the same as were obtaining for the excise year 1983-84. There have been certain amendments in the Rules. The proviso to Rule 18 which earlier stated "where the auction is conducted after the 15th September in any year, the deposit referred to shall be made within fifteen days of auction, or before the expiry of the same month whichever is earlier' now reads
"where the auction is conducted after the 20th September in any year, the deposit referred to shall be made within fifteen days of auction, or before the expiry of the said month, whichever is earlier".

(3.)Normally auctions are conducted well before the commencement of the excise year; (the excise year commences on 1st October, and ends with 30th September of the following year). On the day of auction, the highest bidder has to deposit one month's rental and an amount equivalent to 2% of the annual rental amount. Within ten days therefrom he has to deposit two months' rental in cash, or in the shape of Fixed Deposit Receipts, or in the shape of bank guarantee. Sometimes it does happen that the auction is adjourned from time to time for one or the other reason. Rule 18 says that where the auction is conducted after 20th September in any year, the deposits referred to in Rule 18 shall be made within fifteen days of the auction, or before the expiry of the said month, i.e., before the expiry of the month of September, whichever is earlier. In the case of arrack contracts, a further amount by way of call-deposit has also to be made within ten days of the acceptance of the bid, or tender. But, if the auction takes place after 20th September, then the said call money deposit has to be made within ten days of the auction, or befofe the end Of the same month. (In this Rule, however, the words "same month" are not substituted by the words" said month") Rule 21 says that a counterpart agreement has to ba executed by the highest bidder after making the necessary deposits, before taking out the licence, and that the counterpart agreement shall come into force with effect from 1st October of the year to which the auction relates. The Rule expressly says that, if the licensee executes the counterpart agreement or takes out the licence after the 1st October even in such a case the counterpart agreement shall coma into force on 1st October unless the auctioning authority otherwise directs. The proviso to Rule 21 says that where the auction takes place after the 20th September, the counterpart agreement shall be executed Before the end of the same month, or Within fifteen days of the auction, whichever is earlier.