Supreme Court Grants Appeals, Dismisses Writ Petition, Orders Enforcement of Undertaking

The Supreme Court allowed the appeals, set aside the impugned orders, and dismissed Writ Petition No.711 of 1995. It directed the High Court to enforce the respondent's undertaking to meet financial commitments and initiate appropriate proceedings against the respondent-firm and its partners for contempt of court. The Supreme Court refrained from imposing penal costs due to the respondent's absence.

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Issues Involved:
1. Compliance with auction rules and conditions.
2. Issuance of permits and forms.
3. Payment of arrears and financial commitments.
4. Judicial review and exercise of writ jurisdiction.

Summary:

Compliance with Auction Rules and Conditions:
The respondent-firm was the highest bidder for liquor licenses in Gwalior Township Group No.2 for the year 1995-96, with a bid of Rs. 8.52 crores. According to the auction rules, the firm had to deposit 1/6th of the total bid amount immediately and furnish a bank guarantee for 1/12th of the bid amount. The respondent deposited Rs. 1.42 crores but failed to provide the required bank guarantee and did not pay the monthly rental for May 1995. Notices were issued for these defaults, proposing cancellation of the licenses.

Issuance of Permits and Forms:
The respondent filed Writ Petition No.711 of 1995 in the Madhya Pradesh High Court, alleging non-issuance of permits and forms by the authorities, which led to the closure of their shops. The High Court directed the authorities not to re-auction the shops and to supply the requisite liquor to the petitioner based on an undertaking to meet all financial commitments.

Payment of Arrears and Financial Commitments:
Despite multiple orders from the High Court, the respondent-firm continued to default on payments. Interim orders allowed the firm to sell seized liquor and deposit sale proceeds with the State. The firm admitted arrears but attributed them to the authorities' actions. The Supreme Court noted that the High Court's orders resulted in a significant revenue loss to the State, amounting to Rs. 2,88,54,431/-.

Judicial Review and Exercise of Writ Jurisdiction:
The Supreme Court emphasized that the High Court's power u/s Article 226 of the Constitution is supervisory, not appellate. The High Court should ensure decisions are made according to law and natural justice, without delving into disputed facts. The High Court's repeated interim orders, allowing liquor supply and partial payments, disregarded the norms of writ jurisdiction and resulted in substantial revenue loss. The Supreme Court criticized the High Court for not safeguarding the State's interests and for failing to record any findings of statutory violations by the authorities or compliance by the respondent.

Conclusion:
The Supreme Court allowed the appeals, set aside the impugned orders, and dismissed Writ Petition No.711 of 1995. It directed the High Court to enforce the respondent's undertaking to meet financial commitments and initiate appropriate proceedings against the respondent-firm and its partners for contempt of court. The Supreme Court refrained from imposing penal costs due to the respondent's absence.

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