1970 INSC 0245
                                                  Ram Chandra Rai

                                                           Vs

                                      State of Madhya Pradesh and Others

                                          Civil Appeal No. 429 of 1970

                                   (J. C. Shah, K. S. Hegde, A. N. Grover JJ)

                                                      12.08.1970

                                                     JUDGMENT

SHAH, J. -

1. The appellant who is a licensee of a liquor shop applied to the High Court of Madhya Pradesh for
a writ of mandamus directing the excise department of the State not to recover licence fee for those
days in respect of which liquor was not supplied to the appellant. The High Court summarily
rejected the petition observing that the supply of liquor to the appellant was under a contract to the
Government and "if the Government had committed a breach of the contract the remedy is
elsewhere". It cannot without further investigation, be said that the rights and obligations arising
under a licence issued under a statutory authority are purely contractual. In our judgment the High
Court was in error in summarily rejecting the petition.

2. We set aside the order of the High Court and direct that the High Court do issue rule to the State
and decide the case on the merits.

3. In this Court appellant has filed copies of certain correspondence relating to the payment of
compensation in respect of those days on which liquor was not supplied. It appears from a perusal
of that correspondence that the State had not adopted the attitude that they will insist upon
recovering or retaining the licence fee notwithstanding that they had not supplied the liquor to the
liquor shop-keepers.

The appeal is allowed. There will be no order as to costs.

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