Case Law Details
Spicy Beverage Private Limited Vs State of Bihar (Patna High Court)
Patna High Court allowed the writ and held that liquor manufacturer is permitted to payment for unsold stock which is destroyed on implementation of Bihar Government Prohibition policy effected in 2016. Accordingly, writ petition is allowed.
Facts- The petitioner is a Public Limited Company engaged in manufacturing and supply of country liquor in Polyethylene Terephthalate (PET) bottles. The Government of Bihar came with a policy decision whereunder tenders were invited from the eligible person/partnership firms/companies in terms of tender notice dated 31.01.2014 published in the Bihar Gazette. The petitioner was allotted Zone No. 9 (Vaishali Zone). The petitioner was granted exclusive privilege and consequential licence for supply to the Bihar State Beverage Corporation Limited, a Government of Bihar Undertaking.
The petitioner claimed that on award of contract for a period of five years ending on 31.03.2019, the petitioner made huge investment running into around Rs. Ten Crores in the establishment and manufacturing plant but immediately thereafter, the State Government notified its new Excise Policy on 21stDecember, 2015 providing inter alia that from 01 April, 2016, there will be a complete prohibition in manufactures and sale of country liquor in the State of Bihar. A gazette notification dated 04.02.2016 was issued whereunder it was provided that the remaining stocks of country liquor available at the manufacturer’s premises, corporation godown and retail shops shall be destroyed after the sale hour of 31.03.2016.
It is submitted that the Corporation failed to ensure sale of these quantities, hence, the unsold stock at the warehouses of the Corporation were destroyed on 31.03.2016 as per direction of the Government. The petitioner claims a sum of Rs.25,50,490.17/- against the supplies aforesaid. Demands were made by the petitioner but the said demand has been rejected by the impugned order dated 20.05.2024 issued under signature of the Managing Director of the Corporation. It is this impugned order which is under challenge in this writ application.
Conclusion- The Managing Director of the Corporation has completely erred in taking a view that the manufacturer/company has failed to regulate the sale. He is not correct in saying that the decision of this Court in CWJC No. 407 of 2017 would be of no help to the company/manufacturer. A mere difference in the period of supply cannot be a distinguishing feature of this case. The materials present on the record would clearly demonstrate that the scheme of tender notice and the licence made it clear that the supplies made by the manufacturer were a sale to the wholesaler on the rate determined by the Committee in terms of Clause 3 of the tender notice. The petitioners are not seeking compensation for loss of business because of the new excise policy. In fact, they are looking for the sale proceeds on account of supplies already made to the Corporation as per OFS. By no stretch of imagination, the Corporation can claim that it was working as a facilitator. The Corporation in this case was the sole wholesaler in the State of Bihar. The impugned order(s), therefore, suffer from the vice of irrelevant consideration. The reasoning and rationale provided in the impugned orders are not based on the terms of tender and the license.
Held that we set aside the impugned order dated 20.05.2024 in both the writ applications. The Bihar State Beverage Corporation Limited (Respondent No. 3) is directed to make payment of the amount due against the admitted supplies by the petitioners on the basis of the OFS and on the direction of the Excise Commissioner, Bihar, Patna together with interest at the rate of 6% per annum from 01.04.2016 till the date of payment. The entire payment shall be made available to the petitioners within a period of two months from the date of receipt/production of a copy of this judgment. Accordingly, these writ applications are allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
Heard Mr. Satyabir Bharti, learned Senior Counsel assisted by Ms. Kanupriya, learned counsel for the petitioner(s), Mr. P.K. Shahi, learned Senior Advocate assisted by Mr. Vikash Kumar, learned counsel for the Bihar State Beverage Corporation Limited and Mr. Anuj Kumar, learned AC to GP-24 for the State of Bihar.
2. Since both the writ applications involve common questions for consideration, on the request of learned counsel for the parties, these matters have been heard together and are being disposed of by this common judgment.
3. For sake of clarity, we will briefly take note of the facts of the two writ applications separately hereinafter.
CWJC No. 10011 of 2024
4. In this writ application, the petitioner is a Public Limited Company engaged in manufacturing and supply of country liquor in Polyethylene Terephthalate (in short ‘PET’) bottles. It is the case of the petitioner that the Government of Bihar came with a policy decision whereunder tenders were invited from the eligible person/partnership firms/companies in terms of tender notice dated 31.01.2014 published in the Bihar Gazette (Extraordinary) (Annexure ‘P/1’). For purpose of the allotments, the entire zones were divided into seventeen zones and the contract for manufacture and supply of country liquor was equally divided amongst seventeen contractors. The petitioner was allotted Zone No. 9 (Vaishali Zone). This firm had quoted the rate for supply at Rs. 4.14 per 200 ml. PET bottles and was granted exclusive privilege and consequential licence for supply to the Bihar State Beverage Corporation Limited, a Government of Bihar Undertaking (hereinafter referred to as the ‘Corporation’ or ‘BSBCL’), during the period 01.04.2015 and 31.03.2016. The exclusive privilege order dated 04.03.2014 and licence granted to the petitioner are Annexure ‘P/2’ and ‘P/2/1’ respectively.
5. It is the case of the petitioner that the petitioner was granted licence in Form 27 and under the licence, he was made liable to supply country liquor at the contracted rate to the wholesaler. The wholesaler was granted licence in Form 27(C). The wholesaler had to issue Orders For Supply (in short ‘OFS’) and the petitioner was obliged to supply the country liquor in PET bottles as per the requisition received from the wholesaler. In terms of the licence (Annexure ‘P/2/1’) Clause 8 (£) in case of failure on the part of the petitioner to make supplies, the petitioner would be liable to suffer penalty as per direction of the Excise Commissioner in the manner stated in Clause 8 (£) of the licence. There is a complete bar in selling the country liquor to any other person except the wholesaler.
6. It is the case of the petitioner that from a bare reading of the terms and conditions of tender which form part of the licence (Clause 23 of the tender document), it would appear that the terms of tender are also terms of licence and a joint reading of Annexure ‘P/2’ and Annexure ‘P/2/1’ would clearly show that in fact, the manufacturer having licence in Form 27 was selling the country liquor in PET bottles as per requisition (OFS) received from the Corporation. Once the supply is made to the Corporation and the invoices are drawn showing the Corporation as purchaser, the manufacturer was not liable for further sale of the country liquor in PET bottles to the retailers.
7. Learned Senior Counsel has submitted that on a bare perusal of the invoices, it would appear that the tax invoice is drawn showing the Corporation as purchaser, the description of goods, quantity in numbers, quantity in LPL, unit rate and total amount plus VAT is drawn. On receipt of the country liquor in its godown, the Corporation was issuing a material inward slip showing the receipt of the material/liquors, invoice number, invoice date, invoice amount and the arrival date. A certificate is also issued in the material inward slip that the goods have been delivered in good condition.
8. Learned Senior Counsel submits that in this manner, the petitioner was making payment of excise duty and VAT over and above the cost incurred for manufacturing of country liquor in PET bottles. The payments on account of licence fee, differential fee (i.e. the difference amount between the tendered rates and the base rate on the entire Minimum Guarantee Quota (MGQ) of the zone allotted to the manufacturer), excise duty and VAT are paid by the manufacturer in advance to the Government Exchequer.
9. The petitioner claimed that on award of contract for a period of five years ending on 31.03.2019, the petitioner made huge investment running into around Rs. Ten Crores in the establishment and manufacturing plant but immediately thereafter, the State Government notified its new Excise Policy on 21stDecember, 2015 providing inter alia that from 01 April, 2016, there will be a complete prohibition in manufactures and sale of country liquor in the State of Bihar. A gazette notification dated 04.02.2016 was issued whereunder it was provided that the remaining stocks of country liquor available at the manufacturer’s premises, corporation godown and retail shops shall be destroyed after the sale hour of 31.03.2016.
10. The petitioner has highlighted in course of hearing the fact that even after the gazette notification dated 04.02.2016, the Excise Commissioner, Bihar, Patna directed vide order dated 27.02.2016 (Annexure ‘P/4’) to supply country liquor to the Aurangabad and Gaya Depot of the Corporation with a clear stipulation that in case of failure of the petitioner to supply the country liquor, its licence shall be cancelled. The petitioner was, therefore, bound to supply country liquors as per the requisition of the Corporation. In the month of March, 2016, the Corporation issued OFS for 1 lakh LPL valued at Rs.1,45,87,500/- for supply to the Motihari Depot of the Corporation and OFS for 2,61,938 LPL valued at Rs.3,82,10,205.75/- for supply to the Chapra Depot of the Corporation. Copies of the OFS issued in the month of March, 2016 have been brought on record as Annexure ‘P/5’ (series).
11. In paragraphs ‘19’ and ‘20’ of the writ application, the petitioner has shown the total supplies made by the petitioner to the Corporation. It is stated that the Corporation is yet to make payment for the stocks of country liquor supplied to the Corporation in the following warehouses:-
1. Motihari 6929.68 LPL and;
2. Chapra 10554.40 LPL Total 17484.08 LPL.
12. It is submitted that the Corporation failed to ensure sale of these quantities, hence, the unsold stock at the warehouses of the Corporation were destroyed on 31.03.2016 as per direction of the Government. The petitioner claims a sum of Rs.25,50,490.17/- against the supplies aforesaid. Demands were made by the petitioner but the said demand has been rejected by the impugned order dated 20.05.2024 (Annexure ‘P/11’) issued under signature of the Managing Director of the Corporation. It is this impugned order which is under challenge in this writ application.
13. A prayer has been made to quash the impugned order and direct the respondent i.e. the State Government or the Bihar State Beverage Corporation Limited to make payment of the sale price of 17484.08 LPL valued at Rs.25,50,490/- supplied by the petitioner to the Chapra and Motihari Depot of the Bihar State Beverage Corporation Limited under statutory contract executed between the petitioner and the State Government. Petitioner has also prayed for interest at the rate of 18% on the aforesaid amount from March, 2016 till the date of its actual payment.
CWJC No. 10246 of 2024
14. Petitioner in this writ application is M/s Globus Spirits Limited which is a public limited company incorporated under the Companies Act, 1956.
15. The facts as revealed in the writ application are almost similar. This petitioner had also participated in the tender (Annexure ‘P/1’) and was allotted Zone No. 1 (Patna Urban). The petitioner had quoted the rate for supply at Rs. 4.54 per 200 ml PET bottles. It was granted exclusive privilege and consequential licence in Zone No. 1 for the period 01.04.2015 to 31.03.2016. After reiterating identical facts as stated in the case of M/s Spicy Beverage Private Limited, the petitioner has stated that, though this petitioner was conferred contract for supply of country liquor only in Zone No. 1 (Patna Urban), by order of the Excise Commissioner, Bihar, Patna dated 27.02.2016, the petitioner was also directed to supply country liquor to the Aurangabad and Gaya Depot of the Corporation failing which the licence shall be cancelled.
16. It is the case of the petitioner that in the month of March, 2016, the Corporation had issued the following OFS to the petitioner:-
(i) OFS for 790372 LPL valued at Rs. 11,45,35,651.80/-for supply to Patna Depot of the Corporation,
(ii) OFS for 125016.96 LPL valued at Rs. 1,82,36,849.04 for supply to the Aurangabad Depot of the Corporation and;
(iii) OFS for 160000 LPL valued at Rs. 2,33,40,000/-for supply to the Gaya Depot of the Corporation.
17. It is stated that the petitioner supplied altogether 571368.96 LPL, however, against the said supply to the Corporation, the petitioner is yet to be paid for the following stocks of country liquor supplied to the following warehouses:-
(i) Patna 96605.12 LPL,
(ii) Aurangabad 23060.64 LPL,
(iii) Gaya 1938.24 LPL,
(iv) Jamui 959.68 LPL, Total 122563.68 LPL.
18. The grievance of the petitioner is that it’s demand for the sale price of the aforementioned quantity of country liquor supplied by it amounting to Rs.1,78,62,779.52/- has been rejected by the Managing Director of the Corporation vide the impugned order dated 20.05.2024 (Annexure ‘P/11’). The petitioner has, therefore, prayed for setting aside of the order dated 20.05.2024 (Annexure ‘P/11’) and to direct the State Government or the Corporation to make payment of the sale price of the 122563.68 LPL of country liquor valued at Rs. 1,78,62,779.52/- and also to make payment of interest thereon at the rate of 18% from March, 2016 till the date of its actual payment.
Common submissions on behalf of the Petitioners
19. Satyabir Bharti, learned Senior Counsel representing the petitioners in both the writ applications has assailed the impugned order (Annexure ‘P/11’). It is submitted that the Managing Director of the Corporation has completely erred in agreeing with the submissions on behalf of the Corporation that it was the duty of the manufacturer to regulate the sale of the supplied quantity of country liquor. He has also erred in taking a view that the role of the Corporation was that of a facilitator only.
20. Learned Senior Counsel for the petitioners submits that the Managing Director has in fact failed to appreciate that the relevant clauses of the Liquor Sourcing Policy of the year 2008-09 had been struck down by Hon’ble Division Bench of this Court in CWJC No. 312 of 2009 (Trigger Goods Pvt. Ltd. vs. The Bihar State Beverage Corporation Ltd.). The said judgment of the Hon’ble Division Bench is under challenge in Civil Appeal No. 160 of 2013 before the Hon’ble Supreme Court but there is no stay on the judgment of the Hon’ble Division Bench. Moreover, it is submitted that the said Liquor Sourcing Policy of 2008-09 has nothing to do with the present case where a fresh tender notice came to be published on 4thFebruary, 2014 and Excise License in Form 27 was issued to the manufacturer (petitioner) for supply of country liquor in PET bottles to the wholesaler on the rates fixed by the competent committee.
21. Learned Senior Counsel submits that the Managing Director of the Corporation has further failed to appreciate the ratio of the judgment of the Hon’ble Division Bench in the case of Sanjay R. Kumar vs. The State of Bihar and Others (CWJC No. 407 of 2017) wherein the Hon’ble Division Bench held that the Corporation would be liable to pay for the entire supplies made by the petitioner even as those supplies became surplus and could not be sold/consumed. In the said case also, the payment was made to the petitioner for the quantity of his supply which were consumed/sold but the Corporation was not paying for the supplies which remained unsold. Thus, the reasoning and rationale provided in the judgment of the Hon’ble Division Bench in case of Sanjay R. Kumar would equally apply in case of these petitioners.
Submissions on behalf of the Corporation
22. On the other hand, Mr. P.K. Shahi, learned Senior Advocate assisted by Mr. Vikash Kumar, learned Advocate would rely upon the stand taken by Respondent Nos. 3 to 6 in the counter affidavit and the supplementary counter affidavit. Learned Senior Counsel submits that the petitioner was granted permission for manufacturing and supply of country-made liquor in PET bottles pursuant to the notice inviting tender dated 31.03.2014. The petitioner was granted permission under Memo No. 623 dated 04.03.2014. Clause 14 of the said Memo provided that the supplier will have to follow the terms and conditions of notice, excise laws and all orders issued from time to time by the Commissioner Excise, Bihar.
23. Learned Senior Counsel submits that the Corporation had no responsibility to sell the country-made liquor supplied by the petitioners. The Corporation was confined to be the distributor of the country-made liquor and the entire responsibility of selling its stocks was upon the petitioner. The Corporation was only a facilitator.
24. Learned Senior Counsel further submits that the new Excise Policy of the State was notified vide Notification No. 3893 dated 21.12.2015. The main objective of the new Excise Policy was to bring about total prohibition with respect to the liquor in the State of Bihar. The Bihar Excise (Amendment) Act, 2016 was enacted by the State Government which completely prohibited manufacturing, supply, sale, storage, consumption, etc., of the country-made liquor in the State of Bihar. The Gazette Notification dated 04.02.2016 was published and as a result thereof, the new Liquor Policy came into force with effect from 01.04.2016. Under this new policy, the stocks lying in the manufacturing units, godowns of the Corporation and the retail stores were liable to be destroyed on 31.03.2016 after sale hours. Learned Senior Counsel submits that the said notification does not lay responsibility upon the Corporation to sell stocks of country-made liquor by 31.03.2016.
25. It is submitted that the Corporation is liable to pay to the manufacturers only for the stocks sold and the unsold stocks were not eligible for any payment. The judgment of the Hon’ble Division Bench in case of M/s Sanjay R. Kumar has been sought to be distinguished on the ground that the said judgment relates to the supplies made prior to the promulgation of Bihar Prohibition and Excise Act, 2016. On these grounds, the learned Senior Counsel for the Corporation has defended the impugned order (Annexure ‘P/11’).
Stand of the State Government
26. A counter affidavit has been filed on behalf of the State. It appears that the respondent nos. 1 and 2 has not only defended themselves but have also defended the Corporation. It is stated in paragraph ‘17’ of the counter affidavit that neither the answering respondents nor the BSBCL had the responsibility to sell the country-made liquor supplied by the petitioners and the role of the BSBCL was confined to be the distributor of the country-made liquor. According to the State, the stocks which remained unsold on 31.03.2016 cannot be taken as outright sale by the petitioner to the BSBCL.
27. At this stage, learned Senior Counsel for the petitioners would submit that as back as in the year 2006, vide Memo No. 2456, the State Government had resolved to constitute a Corporation under the Companies Act, 1956 to deal in wholesale of country and foreign liquor to whom the privilege of wholesale of country liquor and foreign liquor shall be conferred. Under Clause 9 of the said Resolution, it was provided that separate licence for manufacturing and wholesale shall be provided. A copy of the said Resolution is Annexure ‘P/13’ attached to the supplementary affidavit on behalf of the petitioner in CWJC No. 10011 of 2024. In view of this decision of the State Government, the Board of Revenue in exercise of its powers conferred under Section 90 of the Bihar Excise Act amended the existing licence in Form No. 27 prescribed under the Bihar Excise Act for manufacture and wholesale supply of country liquor and provided licences in Form No. 27 and 27 (x) which was licence to manufacture of country liquor and supply it to the wholesale licencee in Form 27(x). The licences were also notified in the Official Gazette on 23.09.2006. Copy of the Gazette Notification is Annexure ‘P/14’. It is submitted that in such circumstance, the stand of the State as well as the Corporation that the Corporation is only a facilitator, is a wholly misconceived and misplaced submission which are liable to be rejected.
Consideration
28. Having heard the rival submissions, this Court has gone through the pleadings/materials available on the record. It appears that a tender notice dated 31stJanuary, 2014 was published in the Bihar Gazette (Extraordinary) issue on 03rd February, 2014 (Annexure ‘P/1’). The tender notice was issued inviting eligible persons/firms who are desirous of getting licence in Excise Form-27 for manufacturing of country liquor and supply thereof in PET bottles. Clause ‘2’ of the tender notice lays down the eligibility conditions. Clause 2 (£) (i) lays down a condition that the willing tenderers shall submit their tender together with a security deposit amount of Rs. One Crore. It provides that while the said amount shall be returned to the unsuccessful tenderers, the tenderers who shall be allotted the area on the given rate if fails to provide supplies then their security deposit shall be forfeited and for future they shall be blacklisted. It is, thus, submitted that a licencee in Excise Form 27 is obliged to make supplies as per the OFS. Failure in supply has serious consequences.
29. Clause ‘3’ of the tender notice provides the manner in which the rate of supply is to be determined. An authorized committee under the chairmanship of the Chairman-cum-Member Board of Revenue shall fix the base rate for 200 ml and 400 ml pack size. This base rate for 200 ml has been fixed at 5.78 and for 400 ml it is 9.76. The base rate includes the entire cost up to delivery in the godown of the Corporation but VAT etc. are to be added thereafter and on this rate, payment is to be made to the supplier. The difference between the base rate and the tender rate is to be paid to the Government in accordance with the procedures provided in the further paragraphs. We would produce paragraph 3(i) of the tender notice hereinbelow for a ready reference:-
30. It is evident from clause 3(vi)(vi) that the conditions of tender are to be taken as conditions of licence and breach of the condition is to be taken as violation and the licence would be liable to be cancelled under Section 42 and penalty may be imposed under Section 42(g), (h) of the Excise Act. We would reproduce the relevant clause (vi) hereunder:-
31. Excise Form ‘27’ is the licence issued to a manufacturer for supply of country liquor in PET bottles to the wholesaler who has got licence in Form 27(C). This licence is issued in terms of Sections 13 and 20 of the Bihar Excise Act, 1915. The form contains the conditions. For brevity sake, we reproduce condition nos. 7 and 8 hereunder:-
32. On perusal of the aforementioned conditions, it is crystal clear that the petitioner having obtained licence in Excise Form No. 27 was obliged to sale the country liquor in PET bottles only to those persons who were having wholesaler’s licence and on the basis of the OFS. The petitioner was also obliged to abide by the directions issued by the Excise Commissioner from time to time. A complete reading of the conditions mentioned in the tender notice and the licence in Form 27 would make it clear that everywhere it talks of ‘sale’ by the manufacturer to the wholesaler on the basis of OFS and on the rate determined in terms of clause ‘3’ of the tender notice. Neither the tender notice nor the licence anywhere talk of a responsibility on the part of the manufacturer to ensure sell of its supplies to the wholesaler by making arrangements for retail sale.
33. At this stage, we find that Clause ‘22’ of the conditions of licence reserves right of the Government to stop supply of country liquor in any area in accordance with its excise policy or for any other special reasons. In such condition, the supplier would be liable to abide by the directions of the Government in respect of supply, supply pattern or changes in respect of the bottling in PET bottles. For this reason, the manufacturer (licence holder) shall not be entitled for any compensation. Clause ‘22’ as standing in the licence form reads as under:-
34. We have noticed that vide resolution dated 27thJanuary, 2016, the new Excise Policy, 2016 was sought to be made effective from 01.04.2016. Under the new Excise Policy, sale of country liquor, spicy country liquor and manufacturing and consumption were fully prohibited. Vide Clause ‘4’ of the resolution dated 27thJanuary, 2016 notified in Gazette on 04th February, 2016, the decision of the Government was made clear. We reproduce Clause ‘4’ hereunder for a ready reference:-
35. It is an admitted fact that even after the aforesaid decision of the Government, the Excise Commissioner, Bihar issued Memo No. 901 dated 27.02.2016 calling upon some of the manufacturers like the present petitioners to make supplies of 200 ml country liquor in the various places. M/s Spicy Beverage Private Limited, Vaishali was asked to supply at Motihari whereas M/s Globus Beverage Private Limited was asked to make supplies at Aurangabad and Gaya. Memo No. 901 dated 27.02.2016 (Annexure ‘P/4’) clearly states that in case of non-compliance with the direction, the licence shall be cancelled and the manufacturing unit shall be closed. It is, therefore, apparent that on the direction of the Excise Commissioner, Bihar, the petitioners supplied the given quantity as per OFS in the various places of the Corporation. Copies of the OFS have been brought on record by the petitioners in both the writ applications as Annexure ‘P/5’ (series).
36. We have no iota of doubt that the petitioners being manufacturers and licencee under Excise Form 27 were obliged to abide by the terms and conditions of the licence. They were also obliged to abide by the command of the Excise Commissioner, Bihar, Patna. They did so and on receipt of the directions, supplies were made as per the OFS.
37. The Respondent Nos. 3 to 6 have relied upon Liquor Sourcing Policy 2008-09 by which the Corporation had during the relevant period laid down the terms and conditions for purchase of country made liquors and spiced country made liquor from its manufacturers. At the relevant time, the petitioner is said to have entered into an agreement dated 10.06.2008 with the Corporation in terms of the then Liquor Sourcing Policy, however, the said Liquor Sourcing Policy was under challenge in CWJC No. 312 of 2009. A Division Bench of this Court held that certain clauses such as clause 2(iv), 2.8, 5.2, 8.1, 9.1, 9.2, 9.3, 9.5, 9.6, 10.2, 10.3, 11, 12.1, 15.0, 15.1 and 15.2 of the Liquor Sourcing Policy of 2008-09 were against the provisions of the statutory rules and violative of the conditions of licence. A copy of the judgment of this Court rendered on 22.04.2009 in CWJC No. 312 of 2009 has been brought on record as Annexure ‘R/2’. It is stated that the Corporation has preferred Civil Appeal No. 160 of 2013 before the Hon’ble Supreme Court in which leave has been granted and the Civil Appeal No. 160 of 2013 is presently pending before the Hon’ble Supreme Court. There is no stay of the judgment of Hon’ble High Court.
38. Learned Senior Counsel for the Corporation has submitted that earlier under the Liquor Sourcing Policy 2008-09, Clause 11.1 provided that the Corporation shall pay the manufacturers only for the stocks sold. Unsold stock shall not be eligible for any payment by the Corporation. Further, Clause 11.2 provided that it is the responsibility of the manufacturers and not the Corporation to effect the sales. The role of the Corporation shall be that of a facilitator only. It is not disputed that this position was under the Liquor Sourcing Policy of 2008-09 but the entire Clause 11 was struck down by this Court.
38. To this Court, it appears that any reference of Liquor Sourcing Policy, 2008-09 in the present case would be wholly irrelevant. The fact is that in the year 2014 when the tender notice was published and the licence in Form ‘27’ was issued to the manufacturers, there was no mention of the Liquor Sourcing Policy and/or that of its binding nature upon the manufacturers. Unlike the earlier position, this time the manufacturer and the Corporation had no reason to enter into any agreement separately. The Corporation was conferred with a monopolistic status of wholesaler of all forms of liquor in the State of Bihar and the manufacturers were obliged to give supplies only to the Corporation as a wholesaler. The rate for supply was determined and the licence itself provided that it will be a sale by the manufacturer to the wholesaler for which the manufacturer will be paid as per the determined rate. In fact, our views get strengthened from the Hon’ble Division Bench judgment of this Court in the case of Sanjay R Kumar vs. The State of Bihar and Others (CWJC No. 407 of 2017) wherein vide judgment dated 27.04.2023, this Court directed the 3rd respondent to pay the petitioner an amount of Rs.7,12,941.60/- for the supplies made during the period 24.11.2011 to 30.12.2011. The Hon’ble Division Bench also awarded interest at the rate of 5% per annum from the date of supply till payment. We reproduce paragraphs ‘7’, ‘8’, ‘9’ and ‘10’ of the judgment hereunder for a ready reference:-
“7. Learned counsel, representing the 03rd Respondent, submits that petitioner had expressed his inability to supply liquor to the adjoining district (Muzaffarpur) as per communication of the Superintendent, Excise, Muzaffarpur dated 20.12.2011. The respondents were, thus, compelled to make alternative arrangement. The manufacturer/supplier of CML from adjoining district of Muzaffarpur, i e at Sheohar, was, thus, issued an OFS of 50,000 liters of CML to Muzaffarpur. The said supplier from Sheohar had supplied the CML. Therefore, the entire supply made by the petitioner became surplus and could not be sold /consumed. The petitioner has been made payment for the quantity of his supply which was consumed/sold.
8. This Court is not impressed by the submission made on behalf of 03rd Respondent. The petitioner’s alleged express inability is dated 20.12.2011. Thereafter, on 22.12.2011, OFS has been issued to the petitioner to supply CML in question. On the same date, the OFS has also been issued to the other contractor at Sheohar. As a result of such OFS, the quantum supplied by the petitioner is not in dispute. It is also nobody’s case that after placing an OFS to the contractor of Sheohar, the petitioner had been informed that he was not required to supply the liquor. In fact, non-supply of the CML would have entailed adverse consequence to the petitioner in terms of the licence.
9. This Court, therefore, finds that the petitioner had no option but to supply the CML. Subsequent non-consumption of the same, due to dual arrangement made by the Respondent Corporation, cannot be made a ground for depriving the petitioner from his dues for the supplies made.The reason assigned by the Respondents in the counter affidavit is clearly unsustainable and is rejected.
10. This Court directs that 03rd Respondent should pay the petitioner an amount of Rs 7,12,941.60. Since the petitioner has been deprived for the same for such a long time, for reasons which are arbitrary and unsustainable, this Court would consider it appropriate that the petitioner be paid interest at the rate of Rs 5% per annum from the date of supply till payment, which in any case must be made within four weeks from the date of receipt/production of a copy of this Court.”
(underline is mine)
40. At this stage, when we examine the impugned order passed by the Managing Director of the Corporation, we find that the Managing Director has agreed with the submissions advanced on behalf of the representative of the Corporation. We, therefore, reproduce the relevant part of the impugned order which would contain the submissions of the Corporation and the views expressed by the Managing Director of the Corporation hereunder:-
“It was submitted further that in view of aforesaid policy decision taken by the Government the remaining stocks were destroyed on 31.03.2016 after sale hour. The representative of BSBCL submits that the Company had ample opportunity from 4.2.2016 till sale hour of 31.3.2016 to ensure sale but the company failed to regulate sale. It is important to mention here that it is the responsibility of the manufacture/supplier and not the corporation to affect the sale. The role of corporation shall be that of a facilitator only. It was next submitted that in the processes of mass destruction of country made liquor, resources and Manpower of the State Government was utilized which could have been minimized if the Company would have adhered to the Notification dated 4.2.2016 issued by the Government.
After having heard the Parties I find force in the submission of the representative of BSBCL that after issuance of notification no. 3893 dated 21.12.2015 and Policy decision taken by the Government duly published on 4.2.2016, the Company as such had ample opportunity to regulate sale in which the Company failed.
The order dated 27.4.2023 passed by the Hon’ble High Court, Patna in C.W.J.C. No.407 of 2017 upon which representative of the company has placed reliance is of no help to the company since the facts of C.W.J.C. No.407 of 2017 are quite distinct and different to the facts of the case in hand. The said case bearing C.W.J.C. No. 407 of 2017 relates to cause of action which has arisen prior to enactment of New Excise Policy.
In view of discussions madeherein above the representation dated 13.12.2023 made by the Company is hereby rejected.”
41. In both the writ applications, the impugned order contains the same reasoning and rationale, therefore, we are not reproducing the extracts from the impugned order in case of M/s Globus Spirits Private Ltd.
42. A bare reading of the impugned order(s) would show that the representative of the Corporation has taken a baseless plea. A factually wrong and misconceived submission seems to have been made before the Managing Director of the Corporation. It appears that the submissions were on the line of Clause ‘11’ of the Liquor Sourcing Policy, 2008-09 which had already been struck down and those conditions were neither part of the tender notice nor of the statutory licence in Excise Form 27. The State Government was conscious while floating the tender notice and putting conditions in Form 27 that those struck down conditions of the Liquor Policy cannot be reiterated. The Managing Director of the Corporation has completely erred in taking a view that the manufacturer/company has failed to regulate the sale. He is not correct in saying that the decision of this Court in CWJC No. 407 of 2017 would be of no help to the company/manufacturer. A mere difference in the period of supply cannot be a distinguishing feature of this case. The materials present on the record would clearly demonstrate that the scheme of tender notice and the licence made it clear that the supplies made by the manufacturer were a sale to the wholesaler on the rate determined by the Committee in terms of Clause 3 of the tender notice. The petitioners are not seeking compensation for loss of business because of the new excise policy. In fact, they are looking for the sale proceeds on account of supplies already made to the Corporation as per OFS. By no stretch of imagination, the Corporation can claim that it was working as a facilitator. The Corporation in this case was the sole wholesaler in the State of Bihar. The impugned order(s), therefore, suffer from the vice of irrelevant consideration. The reasoning and rationale provided in the impugned orders are not based on the terms of tender and the license.
43. We, therefore, set aside the impugned order dated 20.05.2024 (Annexure ‘P/11’) in both the writ applications. The Bihar State Beverage Corporation Limited (Respondent No. 3) is directed to make payment of the amount due against the admitted supplies by the petitioners on the basis of the OFS and on the direction of the Excise Commissioner, Bihar, Patna together with interest at the rate of 6% per annum from 01.04.2016 till the date of payment. The entire payment shall be made available to the petitioners within a period of two months from the date of receipt/production of a copy of this judgment.
44. Accordingly, these writ applications are allowed.
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