Vidya Devi Chauhan vs. State Of Chhattisgarh

Facts

The petitioner, Vidya Devi Chauhan, participated in a tender process and was awarded the contract for operating an 'Ahata' (an establishment associated with liquor shops) for country-made and foreign liquor shops in Takhatpur, District Bilaspur, for the excise year 2025-26 (08.07.2025 to 31.03.2026). She deposited the license fee and furnished a bank guarantee, commencing operations. However, she was unable to continue operations due to the non-availability of suitable premises, a situation beyond her control. She sought to surrender the license under Section 33 of the Chhattisgarh Excise Act, 1915, and requested the adjustment of her security deposit towards outstanding license fees. Despite depositing the license fee for April 2026, the respondents did not consider her surrender request or release the bank guarantee. The State contended that the petitioner failed to pay the requisite monthly license fees for the last three months of her tenure and that the bank guarantee cannot be released without clearing all dues.

Held

The Court held that the petitioner's prayer for the release of her security deposit/bank guarantee was not maintainable. While the reasons cited by the petitioner for her inability to continue the business might be relevant for seeking surrender of the license, they do not absolve her of her contractual and statutory liability to pay the license fee as per the terms of the license. The Court noted that in terms of the license conditions, the security deposit or bank guarantee cannot be released unless all outstanding license dues are cleared. It was undisputed that the petitioner failed to deposit the license fee for the relevant period, and the outstanding dues remained unpaid. Therefore, the petition was dismissed as devoid of merit. The petitioner was, however, granted liberty to avail appropriate remedies available under the law.

Key Issues

1. Whether the petitioner is entitled to the release of her bank guarantee and security deposit, despite outstanding license fee dues, considering her inability to operate the Ahata due to circumstances beyond her control? Petitioner's arguments: The petitioner argued that she was the highest bidder and fulfilled her obligations until a show cause notice was issued. She contended that her inability to operate was due to the non-availability of suitable premises, which was beyond her control. She sought surrender of the license under Section 33 of the Chhattisgarh Excise Act, 1915, and requested the adjustment of her security deposit towards outstanding license fees. She also highlighted her bona fides by depositing the license fee for April 2026. Revenue/State's arguments: The State argued that the petitioner was granted the license under specific terms and conditions, including payment of license fees and furnishing a bank guarantee. They contended that the petitioner failed to pay the requisite monthly license fees for the last three months of her tenure. The State asserted that the bank guarantee and security deposit cannot be released unless all outstanding license fee dues are cleared, and therefore, no relief can be granted.