Lalit Mohan Sharma, J.:— In all these four writ applications, the petitioners have challenged the order as contained in letter No. B/C5-206/76E-1981 dated 1-4-1977 reducing the price of country spirit to be supplied by the petitioners to Government warehouses during the period 1-4-1977 to 31-3-1980. The letter has been annexed to the writ application in C.W.J.C no. 892/77 as Annexure 4, in C.W.J.C no. 698/77 as Annexure 2, in C.W.J.C no. 909/77 as Annexure 3 and in C.W.J.C no. 945/77 as Annexure 2. As suggested by the parties, all the four applications have been heard together and are being disposed of by this common judgment. The parties have addressed arguments with reference to C.W.J.C no. 892/77 and accordingly, in this judgment reference will be made to the records of that case.

2. By the section 22 of the Bihar and Orissa Excise Act, 1915 (hereinafter referred to as ‘the Act’) the State Government has been given the power to grant to any person the exclusive privilege of supplying wholesale country liquor within the specified areas on such conditions and for such period as it may think fit. Section 7(2)(e) of the Act permits the State Government to delegate to the Board of Revenue any of its power conferred by the Act (excepting the rule making power) and by clause III(4) of the Notification 470E dated 15-1-1919, the State delegated its power under section 22, to the Board of Revenue, the respondent no. 2. Tenders were invited for supply of liquor during the period 1-4-1977 to 31-3-1980 in terms of the instructions issued by the Board under section 91 of the Act. A number of persons including the four petitioners submitted their tenders with reference to different areas within the State of Bihar mentioning their respective rates for supply. It has been jointly stated by both sides before us that there was a negotiation in regard to the rate between the authorities on the one hand and the petitioners on the other and it was agreed that cost price might be fixed at 72 paise per L.P litre. They are as in respect of which the privilege had to be granted in favour of the different petitioners were, however, fixed independently by the Board of Revenue and by the letter no. B/C5-206/76E-1852 dated 28-3-1977, the Commissioner of Excise, Respondent no. 3 communicated to the petitioners formal orders passed by the Board of Revenue in these regards. The petitioners communicated their acceptance of the grants and on 31-3-1977, offered by way of security deposits, promissory notes which were lying with the department from before. They claim that the entire transaction was fully acted upon. On 1-4-1977 they were surprised to receive the impugned letter no. B/C5-206/76E-1981 reducing the price of the liquor by 7 paise per L.P litre. This was done ex parte and illegally. They want to have the order in the letter quashed.

3. In C.W.J.C no. 698 of 1977, the petitioner, besides praying for quashing of the aforementioned letter, has also prayed that the respondents should be directed to allot those areas to the petitioner which were mentioned in his application. After some argument on this point, Mr. Basudeva Prasad, learned counsel for the petitioner stated that the petitioner did not want to press this claim and the prayer in this regard may be rejected as no pressed. The result is that the only question which now remains to be decided in all the four writ applications is whether the subsequent order reducing the price of the liquor is illegal and fit to be quashed.

4. A copy of the notice issued by the Excise Department inviting tenders has been attached to the writ application as Annexure 1 and it was mentioned therein that the contractors would be required to construct 9 new warehouses and renovate the existing warehouses. Certain other duties of the contractors were also mentioned like maintenance of well furnished quarters to house inspecting officers. It was further provided that an amount equivalent to 5 per cent of the price would be held up to ensure proper compliance of the terms and if and when the contractors fulfilled all the conditions, they would be paid this amount. In case of non-compliance, the amount would be spent over the removal of the defects. The petitioners filed their tenders mentioning higher rates of price payable for the liquor, but as jointly stated by both sides, the price was fixed at the rate of 72 paise per litre. Letters were thereafter sent to the petitioners formally conveying to them the grant of the privilege at the above mentioned rate. These letters are dated 28th March, 1977 and the three years period mentioned therein was to commence on 1-4-1977. Attention was drawn to the provisions for obtaining formal licences and it was mentioned that the applications for issuing licences must be filed within 15 days in proper forms. The petitioners thereafter promptly offered their security deposits. By the impugned letter dated 1-4-1977, the Excise Commissioner communicated to the petitioners the decision of the Board that it had been decided that no new warehouses would be constructed and special renovation of the existing warehouses was also postponed and as a result of this decision, the price of the liquor was reduced by 7 paise per litre. It was mentioned that a sum of 4 paise per litre had been reserved for the construction of new warehouses and a sum of another 3 paise was earmarked for the renovation of the existing warehouses. To wards the end of the letter, it was indicated that final decision in regard to the construction of new warehouses and renovation of new ones were to be passed later on and, at that stage, further direction in regard to payment of the amount by which reduction was to be made would be passed.

5. Mr. Rajeshwari Prasad, appearing for the petitioners in C.W.J.C nos. 892 of 1977 and 909 of 1977, contended that the Board of Revenue had no power to review its order and he could not by an unilateral act prejudice the petitioners by reducing the price fixed after negotiation. The reason in support of the impugned order has been characterised as extraneous and it has further been argued that the petitioners had already acted upon the order granting the privilege on the settled terms and the respondents were estopped from varying the terms. Alternatively, it was argued that the rate had been revised to the prejudice of the petitioner without giving them any opportunity to be heard in violation of the principles of natural justice. There was no question of spending at the rate of 7 paise per litre over the construction and renovation of warehouse and an assumption to that effect had been illegally and erroneously made. Although a formal licence is to be issued later on, but the duty to supply adequate quantity of liquor arose as soon as the period of three years commenced i.e in the early hours of 1-4-1977 and the petitioners had actually made supplies at the rate of 72 paise before they received the impugned letter. The petitioners in the other cases adopted the argument made by Mr. Prasad.

6. Mr. Rambalak Mahto, learned Government Pleader appearing for the State took a preliminary objection that the writ applications are not maintainable as they relate to matters covered by contracts. It was further argued by him that the Board of Revenue was fully authorised to modify its earlier orders. Although it has not been stated as a matter of fact that the petitioners have been granted licences mentioning the lower rate of price, but it was assumed by Mr. Mahto that such licences must have been issued and as a consequence the petitioners must be held to be estopped from objecting to the lower rate of price. In reply to the argument of promissory estoppel addressed on behalf of the petitioners, it was contended that the petitioners have failed to state the relevant facts on the basis of which the plea could arise.

7. In support of the preliminary objection, Mr. Mahto argued that in substance, the writ petitioners are relying upon the agreement between the State authorities on the one hand and the petitioners on the other in regard to the price of the liquor to be supplied and they are, therefore, trying to enforce the terms of a contract. Pointing out the scope of a writ application, it was suggested that the remedy, if any, was by way of a suit to enforce the contract and no relief can be granted under Article 226 of the Constitution. The fallacy in the argument lies in the assumption that the petitioners are attempting to enforce a contract. The order as contained in the letter of the 20th March, 1977 granting the exclusive privilege was passed under the provisions of section 22 of the Act. The fact that a bilateral negotiation precedes a statutory order does not affect the nature of the order. The price is also fixed under statutory power and it must, therefore, be held that the second order as contained in the letter dated 1-4-1977 reducing the price has also teen passed in exercise of the statutory authority. The view expressed in paragraph 14 of the judgment in S.K.G Sugar Mills Ltd. v. The State . A.I.R 1975 Patna 123., supports the conclusion. It follows, therefore, that, subject to the decision of the merits of the contentions, the High Court can certainly issue appropriate writs in the present cases.

8. The learned Government Pleader next contended that grant of a privilege under section 22 of the Act is made in exercise of the executive power and in view of the provisions of the General Clauses Act, the power to grant such a privilege would include the power to recall it or to modify its terms. It is streneously urged that an order under section 22 of the Act does not amount to a judicial or a quasi-judicial order and the power to modify its order cannot be denied to the authority concerned. Reliance was placed on the decision in the Purtabpore Company Ltd. v. The Cane Commissioner, Bihar, Patna . 1968 P.L.J.R 344.. The learned counsel, it appears, failed to notice that the appellant-company in the cited case went up in appeal to the Supreme Court and the decision of the High Court was set aside by the judgment reported in the Purtabpore Company Ltd. v. The Cane Commissioner, Bihar, Patna . 1969 1 SCC 308. In that case, a question in regard to the power of the Cane Commissioner, Bihar to pass order making reservation of area in favour of sugar factories arose for decision. An order of reservation of area passed earlier in favour of the appellant Purtabpore Company was later modified by orders which were impugned. The nature of the power to pass orders reserving areas was executive and was held by the Supreme Court to be similar to orders granting licence. It was held that it would not be proper to equate an order revoking or modifying a licence with a decision not to grant a licence. Referring to the case of Shivji Nathubhai v. Union of India . A.I.R 1960 S.C 606., it was pointed out that even if the act of the State Government in granting a mining lease was an administrative act, it was not correct to say that no right of any kind passed to the lessee until the review was decided by the Central Government where a review had been applied for and in such a case the Central Government was required to act judicially. The Supreme Court finally held that when it came to a re-consideration by the Cane Commissioner of his earlier order, the proceeding before him assumed the character of a quasi-judicial proceeding vide the Purtabpore Company Ltd. v. The Cane Commissioner, Bihar Patna. Applying this principle, it follows that if the petitioners are able to establish that some right was created in their favour which was being adversely affected by the impugned order of 1-4-1977, they can resist the infringement if their right and the impugned order cannot be sustained on the ground of unlimited power of the authority to modify its order. Besides, the petitioners were not given an opportunity to place their point of view before the impugned order was passed. It is well established that even an administrative order has to be made in the manner in consonance with the rule of natural justice when it affected rights (See State of Orissa v. Miss Binapani . A.I.R 1967 S.C 1269., A.K Kraipap v. Union of India . 1969 2 SCC 262, and the D.F.O South Khari v. Ram Sanehi Sak . 1971 3 SCC 864. The second argument addressed on behalf of the respondents must also, therefore, be rejected.

9. On merits, it was urged on behalf of the State that no rights were created at any point of time in favour of any of the petitioners since there is no fundamental right to carry on trade or business in intoxicants. Reliance was placed on the observation of the Supreme Court in Har Shankar v. The Deputy Excise and Taxation Commissioner . 1975 1 SCC 737, alternatively it was said that, a right, if at all could arise only after a formal licence was issued and if it be assumed that a licence was actually issued in favour of any of the petitioners, it should further be presumed that the price must have been mentioned at the lower rate. In substance, the contention is that no right can be said to have arisen merely on the basis of the letter of the 28th March, 1977. The argument of promissory estoppel attempted on behalf of the petitioners was opposed on the ground that sufficient materials to sustain the plea were not included in the writ applications. Referring to the language of section 22 of the Act, Mr. Rajeshwari Prasad contended that the liability of a grantee of a privilege under section 22(1) to supply the liquor starts immediately after the grant and if the grantee makes a default in carrying out his duties, he can be subject to the recourse of section 46(1). The opening words of the sub-section indicate that the responsibility is attached both to a holder of a licence and to a person to whom a privilege is granted under section 22 of the Act. It is, therefore, suggested that even before formal licence is granted, the responsibility of supplying liquor arose with effect from 1-4-77. What sub-section (2) of Section 22 of the Act intends to lay down is that the grantee cannot exercise his rights before obtaining a licence. This provision does not relieve him of his responsibilities. In the present case, the authority concerned has not recalled the order granting the exclusive privilege, but has merely modified the term relating to the price of the liquor. The obligation under the order, therefore, continues. The result is that the petitioners are bound to make the supply but at a price fixed unilaterally by the Board of Revenue, modifying the earlier rate which had been accepted by the contractors. It appears that there is sufficient force in this argument addressed on behalf of the petitioners. On the question whether a right for making supply of the country spirit arises under section 22(1) of the Act or not, the following observations made in paragraph 15 of the judgment in S.K.G Sugar Mills v. The State (supra), are relevant.

“The right for making supply of the country spirit flows from sub-section (1) of section 22, sub-section (2) only fixes a restriction as to since then such rights shall be exercised.”

10. The decision given by a Division Bench of this Court is binding on us and holds that a right accrued in favour of the petitioners immediately after they accepted the grant made in their favour on the 28th March, 1977. The observations of the Supreme Court in Hari Shankar's case are not applicable to the present writ applications, as the petitioners in these cases are not asking for grant of exclusive privilege of supplying liquor, but are objecting to an ex parte revision of the price after such a grant. Another decision of the Supreme Court in Lakhanlal v. State of Orissa, 9 relied upon by the State is also not applicable. In that case, the exclusive privilege which was proposed to be given, was put in auction and it was held that until the bid at the auction was accepted by the State Government, no question of right arose in favour of the highest bidder. It was an express term of the action that the money tendered was deemed to be deposited tentatively pending acceptance of the bid. Several bids were made which amounted to mere offers and which were subject expressly to acceptance or rejection by the State Government. In that background, the Supreme Court held that:—

“The basic condition for the emergence of rights through offers or conditions made and accepted, and acted upon, by paying any specified or agreed price as consideration were thus wanting in this case.”

11. In the present case, final orders were made by the State authorities on 28th March, 1977 and accepted by the petitioners involving in the language of the Supreme Court, the essentials of an agreement and mutuality of obligation. This decision so far as it goes helps the petitioners.

12. Besides, the principle of promissory estoppel as recognised by the decision in Union of India v. Anglo-Afghan . A.I.R 1968 S.C 718., is applicable to the present cases. It has been mentioned in the writ applications and not denied on behalf of the State, that the grant of the privilege by the authority, as communicated by the letter of the 28th March, 1977, was accepted by the petitioners; they thereafter furnished security; and then applied for issuing the formal licences, Before the impugned letter dated 1-4-1977 was served on the petitioners, some business had already been transacted on the basis of the earlier letter mentioning the price at 72 paise per litre. By an application under section 151 of the Code of Civil Procedure filed on 10-10-1977 during the course of the argument, this fact was asserted. To the application, which was supported by an affidavit of the Commercial Manager of the petitioner, were attached true copies of Government challans marked Annexures 11 and 12 showing collection of cost price at 72 paise per litre. It has been asserted by an affidavit sworn by the dealing assistant in the Excise Department of the Government of Bihar on 13-10-1977 that the earlier order had never been acted upon. But the fact that on 1-4-1977 the sale price was deposited by challans (Annexures 11 and 12) at the rate of 72 paise has not been denied and the explanation is that the second order revising the rate had not reached the retailer. The fact however, is established that actually some business has transacted through Government servants who were authorised to receive the money from the retailers by way of price of the liquor before the impugned letter became effective. On behalf of the State, it has been strongly urged that since the letter dated 1-4-1977 was received by the petitioners, they have been supplying liquor at the rate of 65 paise per litre. In several affidavits filed by the petitioners, the matter has been clarified that they are doing so under protest and they have not accepted the new terms. They are under a bona fide belief that under section 46 of the Act, they are under a duty to continue to make the supply and they cannot stop it and under duress they have accepted whatever licences have been issued. They have stated that they have made their stand clear to the authorities not only verbally but by recording their stand. I was satisfied from the materials produced before this court that the petitioners have not waived their right at any point of time and before the impugned letter dated 1-4-1977 was served on the petitioners, they had started supplying liquor at the rate of 72 paise per L.P litre to the retailers through Government agency.

13. It has not been contended before us that the petitioners were given an opportunity to put their case before the revision of the rate took place. By reducing the price, the petitioners are certainly going to lose a lot of money. They should have, in the circumstances, been heard before passing any order. The manner in which the order has been made violates the principle of natural justice and this is an additional reason for quashing the impugned order.

14. There was serious controversy at the bar about the wisdom and reasonableness of the order reducing the rate of the liquor. The case on behalf of the State is that the petitioners were under a duty to spend an amount equivalent to 7 paise per litre recoverable from total supply on the construction of new warehouses and renovation of old ones and if the petitioners were relieved of that duty, they cannot make any complaint. I have examined the tender notice as also the letter dated 28th March, 1977 in great detail with the counsel for both sides and have not been able to discover that the sum of 7 paise per litre was earmarked for this purpose. Instead, it appears that the proposal to build new warehouses referred only to some of the districts. That means that no warehouses were to be constructed at all in many districts. As I have mentioned above, there was a term regarding withholding a portion of the price at the rate of 5 paise per litre for enforcing the terms, but this did not mean that the cost was going to work out at the rate of 5 paise per litre. The figure of 7 paise is not explained by any document except by the impugned letter dated 1-4-1977. If the present case of the State be assumed to be correct the price of the liquor to be sold in the different districts would be irrational and inconsistent. I therefore, agree with the petitioners that no acceptable explanation of the rate of reduction has been placed by the State in this case.

15. Before concluding I would like to mention that in reply to a query, it was expressly stated on behalf of the petitioners that the petitioners are ready to carry out all the terms on which exclusive privilege was settled with them originally, including the term regarding construction and renovation of warehouses and the respondents will be entitled to enforce them.

16. In the result, the relief in regard to the allocation of the area in C.W.J.C no. 698 of 1977 is rejected but subject to that all the four writ applications are allowed and the order as contained in letter no. B/C5-206/76E-1981 dated 1-4-1977 is quashed. Parties are directed to bear their own costs.

17. Govind Mohan Misra, J.:— I agree.