State's Authority to Order Resettlement of Liquor License Upheld Where Fresh Bids Yield Higher Revenue

The dispute concerns the allotment of an Indian-made foreign liquor shop in Didihat, District Pithoragarh. Petitioner Vimla Gururani submitted the highest bid (Rs. 4.84 crores), but the shop was instead allotted to the second-highest bidder (L-2), Anil Mahar (Rs. 3.84 crores), on the grounds that Gururani’s power of attorney had withdrawn her offer.

Gururani challenged the authenticity of the withdrawal letter, leading the State (Respondent No. 1) to order a fresh allotment process on 15.05.2026.

Both parties filed writ petitions—Gururani against the initial bypass of her bid and Mahar against the cancellation of his allotment. On 22.05.2026, the High Court directed the District Magistrate to conduct a fresh re-settlement exercise under the supervision of the State.

1. Whether the fresh allotment process initiated by the State was valid and resolved the grievances of the competing bidders.

2. Whether the security deposit and license fees paid by the initial successful bidder (Anil Mahar) are liable to be refunded following the fresh auction.

The court applied the principle of administrative fairness in public auctions and the doctrine of restitution regarding security deposits and license fees when a tender process is superseded by fresh proceedings.

It further relied on the discretionary power of the High Court under Article 226 to monitor and direct a fair re-settlement exercise to ensure maximum revenue for the State while protecting the interim financial interests of the litigants.

The court analyzed the results of the fresh bidding exercise conducted under its supervision. It noted that the new bids (from Vimla Gururani and one Dinesh Chandra Pant) were "substantially higher" than those in the previous round, thereby serving the State's financial interest.

Since Gururani participated in the new process and expressed no further grievance, and the State confirmed it would refund Mahar's security deposit and license fees, the court determined that the substantive legal disputes regarding the power of attorney and the initial allotment had become moot.

The court focused on the equitable resolution of the parties' positions rather than adjudicating on the merits of the previous disputed withdrawal.

The Court directed the District Excise Officer, Pithoragarh, to refund the security deposit and license fees to Anil Mahar within two weeks of him providing his bank account details. The fresh bids were allowed to stand, and all pending applications were closed.