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1. This appeal by special leave is directed against a judgment, dated August 23, 1979, of the High Court of Assam at Gauhati.
2. The material facts are that the Deputy Commissioner, Sibsagar Invited tenders for settlement of the Meleng Country Spirit Shop No. 3 of Jorhat Sub-Division for the period June 1, 1979 to March 31, 1980 Fourteen other persons, including respondent 1, also submitted tenders for settlement of the said shop.
3. The Deputy Commissioner (hereinafter called the Primary Authoriry) on the advice of the Advisory Committee constituted under Rule 208 of the Assam Excise Rules, by an Order dated April 30, 1979, settled the shop with the appellant for the aforesaid period.
4. Mukunda Bore, respondent I, preferred an appeal under Section 9 of the Assam Excise Act before the Assam Board of Revenue. The Board on the application of respondent 1 herein, by an order dated May 31, 1979, stayed the operation of the aforesaid settlement order, dated April 30, 1979, observing that the appellant (respondent 1 herein) was a sitting lessee and had alleged that the financial position of the appellant is not good and that the latter had supressed facts in the tender. With this reasoning, the Board passed an interim order staying the operation of the settlement during the pendency of the appeal.
5. Against the Board's interim order, dated May 31, 1979, Mukanda Bore filed a writ petition in the High Court which, by an interim order dated June 1, 1979, stayed the operation of the interim order, dated May 31, 1979, passed by the Board.
6. The appellant thereafter on June 6, 1979 took possession of the shop on the payment of Rs. 6,905.07 which included the cost of liquor, bottles, boxes, carrying charges, vend fee and duty etc. to the former lessee, that is, respondent 1.
7. Subsequently, by a judgment dated August 22, 1979, the Board allowed the appeal of respondent 1, set aside the settlement order of the Primary Authority that had been made in favour of the Appellant, and settled the shop with respondent 1 for the remainder of the term.
8. Against this judgment, dated August 22, 1979, the appellant filed a writ petition under Article 226 of the Constitution before the Gauhat High Court, which, by an order, dated August 23, 1979, dismissed the petition in limine.
9. It may be observed that Mukunda Bore, appellant herein had passed B.Sc. Part I Examiuation. He was an un-employed youth of about 32 years and belonged to Chuita Community which falls in the'more backward community' and was entitled to preferential treatment in the matter of settlement of C.S. Shop as provided under Rule 223(2) of the Assam Excise Rules, 1945. Respondent 1, Bangshidhar Buragohain, is an Ahom and is recognised by the Rules as ''other backward class'.
10. In the information on his financial capacity submitted by Mukanda Bora in the Form prescribed under the Assam Excise Rules, he mentioned that his 'father will finance him with Rs. 25,900/- or more' and in support filed an affidavit of his father, Mukta Ram Bore. Particulars of the funds held by the father were given by him in his affidavit as under:
(1) Rs. 20.000/- held under Account No. 9774 lying in deposit at Jorhat Post Office
(2) A balance of Rs. 902.50 in Savings Bank Account No. 8648 of the United Bank of India, Jorhat Branch.
The information supplied by Mukanda Bore or his father in the affidavit did not disclose any other financial source. The Inquiry Officer endorsed the same information in his report regarding the appellant's tender.
11. As against this, Bangshidhar Buragohain, respondent herein filed an affidavit, dated June 26, 1979, pointing out that the deposit of Rs. 20,000/- in the Johart Post Office held by the father of Mukunda Bore was a term deposit which would mature for encashment only by the middle of 1983 and consequently, this deposit was not readily available for investment in the business. This was countered by a certificate, dated June 19, 1979, issued by the Assistant Post Master, Jorhat, saying that the term deposit of Rs. 20,000/- in the name of Mukta Ram Bore was available at any time,
12. The Board held that the financial capacity of Mukunda Bore (appellant) 'to run the shop is not satisfactory'. It further observed:' Though he had a better claim as an educated unemployed youth belonging to the community recognised as more back ward amongst the notified backward classes, we cannot agree to the settlement given to him by the Primary Authority. On the other hand, the appellant (Bangshidhar Buragohain, respondent 1 herein) who was the lessee for term expiring on May 31, 1979, has got the financial capacity to undertake the lease of the Meleing Country Spirit shop'.
13. In arriving at the conclusion the Mukunda Bore did not have the necessary financial capacity, the Board give these reasons:
(a) When on June 6, 1979, he took over charge of the shop on payment of Rs. 6,905-07, no amount was withdrawn from the term deposit of Rs. 20,000/ or from Account No. 8648 having a credit balance of Rs. 5.902.50. The Board observed ''that it was not shown to the Court (Board) how the amount which was required at the time of taking the charge of shop was obtained by the respondent (Mukanda Bore).'
(b) Even if it be assumed that a part of this amount of Rs. 6,905.07 came out of Account No. 8648 which on April 19,1979 had a credit balance of Rs. 3,5,902.50, then also, no explanation was coming forth about the source of the shortfall of about Rs. 1,000/-.
(c) It was apparent that part of the source required by the respondent, Mukunda Bore did not come from bona fide source.
14. Learned Counsel for the appellant contends that the Board should, not have lightly set aside the Order of the Primary Authority by which the shop had been settled in favour of the appellant after that Authority had satisfied from the inquiry report of the Inquiry Officer with regard to the financial solvency of the appellant. It is further contended that there was a third account of the father of the appellant with the State Bank of India, Jorhat, which had been overdrawn for Rs. 5, 900/-, and this money constituted the bulk of the amount of Rs. 6,905,07 which Mukunda Bore had paid to the former lessee for taking possession of the shop. In this connection, reference has been made to a letter, dated June 11,1979, from the Agent of the State Bank of India, Jorhat to the appellant's father. This letter, it is submitted, was produced before the Board in rebuttal of the allegations of the respondent. The Board never applied its mind to this letter which substantially explained the source of the money which was paid to the former lessee by the appellant. It is further contended that the entries in the Pass Book issued by the Bank in favour of appellant's father would fully bear out that a sum of Rs. 5, 900/- was overdrawn from this account just before making payment to the former lessee. Winding up his arguments, Counsel submits settlement in favour of the appellant was that the appellant a mere benamidar for somebody else behind the scenes. It is emphasised that the Board did not record any finding that the transaction was benami or that the appellant was otherwise an undesirable person. The Board, it is argued, has proceeded merely on suspicion and conjectures about the source of the finance and recorded a finding which is based on no evidence. In so doing the Board has committed errors of law which the High Court could set right in the exercise of its writ jurisdiction.
15. On the other hand, learned Counsel for the respondents submits that it could not be said that the Board had proceeded merely on conjectures and surmises. It is stressed that no information was disclosed either at the time of tender or at any stage before the Inquiry Officer that there was a third account of the appellant's father with the State Bank of India, Jorhat, which had been overdrawn to the extent of Rs. 5,900/-, and that this money was utilised towards the amount which was paid to the former lessee at the time of taking possession by the appellant. It is further pointed out that at the time of arguments before the Board, the position taken by Mukunda Bore was that this amount came from Savings Bank Account No. 8648, which was evidently false. The Board pronounced its judgment about three weeks after the hearing of arguments. Even during this interval, it is emphasised, Mukunda Bore did not produce the Pass Book issued by the State Bank of India, Jor