THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition Nos.13156, 13218 and 13259 of 2010 %15.06.2010 # N.Ramanaiah Naidu S/o Venkataiah R/o Rajampet Mandal, Kadapa District (Petitioner in W.P.No.13156 of 2010) R.Venkata Subba Reddy S/o Subba Reddy and 8 others R/o Rajampet Mandal, Kadapa District (Petitioners in W.P.No.13218 of 2010) Beemu Venkat Reddy S/o Gangi Reddy Akula Street, Rajampet, Kadapa District And 2 others (Petitioners in W.P.No.13259 of 2010) …Petitioners A n d $ The Collector and District Magistrate, Kadapa, Kadapa District and others …Respondents < GIST: > HEAD NOTE: !Counsel for Petitioners : Sri M.P.Chandramouli, S.Srinivas Reddy & Ch.Janardhan Reddy ^Counsel for Respondent: G.P for Prohibition & Excise ? Cases referred THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition Nos.13156, 13218 and 13259 of 2010 (Dated : 15-06-2010) Between: N.Ramanaiah Naidu S/o Venkataiah R/o Rajampet Mandal, Kadapa District (Petitioner in W.P.No.13156 of 2010) R.Venkata Subba Reddy S/o Subba Reddy and 8 others R/o Rajampet Mandal, Kadapa District (Petitioners in W.P.No.13218 of 2010) Beemu Venkat Reddy S/o Gangi Reddy Akula Street, Rajampet, Kadapa District And 2 others (Petitioners in W.P.No.13259 of 2010) …Petitioners A n d 1. The Collector and District Magistrate, Kadapa, Kadapa District 2. The Commissioner, Prohibition & Excise, Andhra Pradesh and others …Respondents THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition Nos.13156, 13218 & 13259 of 2010 COMMON ORDER: The issue involved in these three writ petitions is one and the same, and therefore, they are heard together and are being disposed of by this common order. 2. The District Collector/Auctioning Authority, (Prohibition & Excise), Kadapa issued notification dated 27.5.2010 calling for tenders for the shops indicated therein in Kadapa District. There are 33 shops coming within the jurisdiction of Rajampet Prohibition and Excise station. The petitioners responded to the said tender notification and submitted their tenders to the various shops. The details of the shops for which the petitioners offered their tenders are not relevant for the purpose of the disposal of these writ petitions. The petitioners submitted challans for Rs.10,000/- towards Participation Fee (Non-refundable application fee) apart from 5% Earnest Money Deposit (EMD). The date fixed for opening of the tenders was 07.6.2010 at ZP New Conference Hall, Kadapa. But the respondents did not open the tenders on 7.6.2010, instead, they issued a fresh notification dated 8.6.2010 for 27 shops. Of these 27 shops, one shop is situated in Kadapa within the jurisdiction of Prohibition and Excise Station, Kadapa, two shops are situated within the jurisdiction of Prohibition and Excise Station, Rayachoty and other shops are situated within the jurisdiction of Prohibition and Excise Station, Rajampet. The notification dated 8.6.2010 issued by the District Collector, Kadapa is assailed in these writ petitions. 3. The respondents filed counter affidavit in W.P.No.13156 of 2010. A request has been made by the learned Government Pleader for Prohibition & Excise appearing for the respondents to treat the said counter as common counter in all the three writ petitions. 4. Heard Sri M.P.Chandramouli, learned counsel appearing for the petitioner in W.P.No.13156 of 2010, Sri Ch.Janardhan Reddy, learned counsel appearing for the petitioners in W.P.No.13218 of 2010 and Sri S.Srinivas Reddy, learned counsel appearing for the petitioners in W.P.No.13259 of 2010 and the learned Government Pleader for Prohibition & Excise appearing for the respondents. 5. Sri M.P.Chandramouli, learned counsel appearing for the petitioner in W.P.No.13156 of 2010 contends that the tender conditions mandate opening of tenders on the notified date itself, and without opening the tenders, the respondents cannot form any opinion as to the collusion among the tenderers or otherwise. Learned counsel copiously referred the tender conditions in support of his submission that the respondents are bound to open the tenders on the notified date before taking any decision as to accept or reject. In a way, his submission is that without opening the tenders on the notified date, the authorities cannot form any opinion as to the collusion or otherwise among the tenderers. 6. Sri S.Srinivas Reddy, learned counsel appearing for the petitioners in W.P.No.13259 of 2010, while adopting the contentions advanced by Sri M.P.Chandramouli, submits that there are various shops for which single tender has been accepted by the Auctioning Authority and non-acceptance of the tenders submitted by the petitioners amounts to discrimination. He would also contend that the rules do not empower the respondents to reject the tender without opening the same on the notified date. 7. Sri Ch.Janardhan Reddy, learned counsel appearing for the petitioners in W.P.No.13218 of 2010 adopted the arguments of Sri M.P.Chandramouli. 8. Learned Government Pleader for Prohibition & Excise appearing for the respondents submits that the 2nd respondent is competent to reject the tenders without opening and it is permissible under A.P.Excise (Lease of Right of Selling by shop and Conditions of Licence) Rules, 2005 (for brevity, “the Rules”). A further submission has been made that the reasons have been recorded on the file and the Auctioning Authority has announced the same in the auction hall itself by way of public address system on 7.6.2010, and therefore, re-notification of some of the shops is in accordance with the Rules. 9. Since the learned counsel appearing for the parties made copious reference to Rule 14 of the Rules, I deem it appropriate to extract the same, which reads as hereunder:- “14. Submission and finalisation of tenders:- (1) The tenders shall be submitted by the tenderer in a sealed envelope addressed to the auctioning authority on or before the last date and time notified for receipt of tenders along with the following particulars; (i) Name of the tenderer and his father’s name and tenderer’s address; (ii) Serial number in the Gazette, Name of the area/locality of the shop for which he has offered his tender (iii) Lease amount offered for the lease period in figures as well as in words (iv) Challan for Rs.10,000/- (Rupees Ten thousand only) being non-refundable participation fee. (v) Two recent passport size photographs. (vi) Demand Draft(s) towards EMD equal to 5% of the upset price of the A-4 shop as required under proviso to Rule-12. (2) The tenders not accompanies by A-1 declaration, A-2 affidavit, A-3 declaration, challan for participation fee, two recent passport size photographs and EMD, shall be forthwith rejected by the auctioning authority (3) The closed envelope containing the tender shall be Superscribed with the words “Tender for the lease of right for the lease period 20….. to 20…. To sell Indian Made foreign Liquor and foreign Liquor by shop at ….. (Sl.No. of the Gazette. Name of the locality/area). The tenderer may obtain acknowledgment for the envelope presented. (4) Every tender shall be taken into consideration if it is presented on or before the prescribed date and time and no tender shall be received after the prescribed date and time notified by the auctioning authority. (5) The auctioning authority may if he so desired first announce at the commencement of the auction, the names of persons and the number of persons who had sent tenders for a particular shop. (6) The tenderer shall be present at the place of auction at the time of opening of the tenders, but his absence shall not affect his tender or the auction proceedings. (7) The auctioning authority shall open sealed tenders for each shop notified for auction. The highest tender may be accepted if the lease amount offered is higher than the upset price notified by way of announcement by the auctioning authority at the place of public auction of the name of the highest tenderer and the lease amount offered and the rest of the tenders shall be rejected. Not withstanding the absence of the tenderer, the acceptance of the highest tender by the auctioning authority shall be binding on the tenderer. Provided that when on the opening of the sealed tenders it is found that two or more tenderers have quoted the same higherst amount, the successful auction purchaser among such tenderers shall be selected by drawl of lots. Provided further that if the highest tender is less than the upset price notified, the auctioning authority may provide an opportunity to the highest tenderer to increase his offer to an amount higher than the upset price and accept the offer. If the highest tenderer is not willing to increase his offer to an amount higher than the upset price, the second highest tenderer may be given a similar opportunity. If both the tenders are not willing to increase the offer to an amount higher than the upset price, all the tenders in respect of that shop shall be rejected and it shall be put to re-auction. Provided also that if the auctioning authority considers that the auction should be postponed for a future time and date for any reason he may do so without opening the tenders. Provided also that it shall be open to the auctioning authority to refuse to knock down the auction in favour of the highest tenderer if such authority is satisfied after a perusal of the affidavit or on the basis of any other information that such tenderer cannot reasonably be expected to discharge his/her liabilities in terms of the lease: Provided also that where the highest tender is not accepted the auctioning authority shall record the reasons thereof. (8) The auctioning authority, may by order reject any tender on the ground that the tender is of benami in nature or that there is collusion among the tenderers who participated in the auction for the lease of any shop. (9) After rejecting, the highest tender the auctioning authority may either accept the next highest tender if it is higher than the upset price or dispose off the shop afresh at any subsequent notified auction as the case may be (10) No person shall be entitled to obtain the lease of more than one shop. In the event of a person being successful auction purchaser of a shop, all other tenders filed by him in respect of any other shop/shops shall automatically becomes invalid]”. 10. The issue that calls for adjudication in these writ petitions is: Whether the District Collector/Auctioning Authority is competent to cancel the tenders without opening the same on the notified date? 11. It is not in dispute that the petitioners in these writ petitions submitted their tenders in respect of each of the shops, details of which have been furnished in the respective writ petitions. They were also present on 7.6.2010 at the place of venue. It is the contention of the petitioners that the reasons for cancellation of the tenders were not announced on 7.6.2010. Whereas, it is the case of the respondents that reasons have been recorded on the file and they were also announced in the auction hall itself by way of public address system. 12. The counter affidavit has been sworn to by Mr. Shashi Bhushan kumar, I.A.S., Collector and District Magistrate, Kadapa. The relevant portion of the counter affidavit need to be noted and it reads as hereunder:- “ The reasons for rejection of all (37) tenders filed for (17) shops in respect of Rajampeta Municipality for G.Sl.Nos.63, 64,65,67,69,70,72,73,74,76,78,79,80,81,82,83 and 85 are formation of syndicate and deliberate collusion on the part of the syndicate resulting in loss to the Government Exchequer. The reasons have been recorded on the file and were also announced in the auction hall itself by way of public address system. Therefore it is not true to allege that no reasons were given for not opening the tenders.” 13. It is contended by Sri M.P.Chandramouli, learned counsel appearing for the petitioner in W.P.No.13156 of 2010 that no endorsement with regard to rejection has been made on the respective tenders submitted by the petitioners. Be that as it may, under sub-rule (8) of Rule 14 of the Rules, the auctioning authority, may by order reject any tender on the ground that the tender is of benami in nature or that there is collusion among the tenderers who participated in the auction for the lease of any shop. The contention of the petitioners is that without opening the tenders, it is impermissible for the Auctioning Authority to draw an inference with regard to collusion or otherwise among the tenderers. 14. I have gone through sub-rules (8) and (9) of Rule 14 of the Rules. Sub-rules (8) and (9) are independent rules and they are not dependent on each other. They have to be read independently and not conjunctively. Under sub-rule (8), the Auctioning Authority, may by order reject any tender on the ground that the tender is of benami in nature or that there is collusion among the tenderers who participated in the auction for the lease of any shop. Sub-rule (9) of Rule 14 comes into operation after opening of the tenders. Therefore, I am of the view that the competent authority can reject the tenders without opening, if it comes to the conclusion that there is collusion among the tenderers who participated in the auction for lease of any shop. The respondents have specifically sated in the counter affidavit that reasons have been announced by way of public address system. The deponent, who has sworn to the counter affidavit, is of the cadre of Collector and District Magistrate. I do not see any reason to doubt the statement made by him. Hence, I am of the considered view that these writ petitions are liable to be dismissed. 15. All these three writ petitions are devoid of merits and they are accordingly hereby dismissed. No order as to costs. ______________________ B.SESHASAYANA REDDY, J Dt.15-06-2010 Note:- L.R. Copy to be marked (B/o) RAR THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition Nos.13156, 13218 and 13259 of 2010 (Dated : 15-06-2010)