'No Respect For Law': Patna High Court Orders FIR & SIT Probe Over Irregularities In Excise Vehicle Auctions, Awards ₹12 Lakh Compensation

The Patna High Court recently directed the Economic Offences Unit (EOU) to register an FIR into the affairs of the Excise Department, Muzaffarpur, in connection with the arbitrary auctioning of seized vehicles.A Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Sourendra Pandey was hearing a writ petition seeking a writ of certiorari to quash and set aside the auction sale of a Mahindra Scorpio vehicle, or in the alternative, to grant compensation of ₹12 lakh, being the insured value of the vehicle. The petitioner was the owner of the Scorpio vehicle, which had been seized in connection with a case registered under the Bihar Prohibition and Excise Act, 2016. The petitioner specifically prayed for the constitution of an enquiry into the functioning of the Excise Department, Muzaffarpur, alleging that a racket was operating in the auction of seized vehicles, whereby only a limited group of individuals were able to participate, and underhand dealings were rampant. The High Court noted several serious discrepancies in the auction process. Inter alia, it observed that no bids were invited through public advertisement in any newspaper, constituting a blatant violation of the applicable statutory rules. The Court ultimately reached an “irresistible conclusion” that the authorities involved in the confiscation and auction of vehicles had shown complete disregard for the rule of law. It observed that whether the conduct stemmed from negligence, incompetence, or extraneous considerations was a matter requiring investigation, noting that any of these possibilities could reasonably arise on the facts.The Court held that it was difficult to accept that officers holding such high positions in the Government Department were unaware of the applicable legal provisions, or that they could violate the law with such impunity in the absence of extraneous considerations. What had transpired in the present case, the Court observed, was writ large on the face of the record. Despite the existence of clear statutory mandates under Rules 13A and 14 of the Bihar Prohibition and Excise Rules, 2021 (as amended), the authorities displayed a complete lack of regard for the prescribed procedures.The Court further noted that, at the very threshold, there was a complete violation of sub-rules (2) and (3) of Rule 13A, as no show-cause notice was ever served upon the petitioner. It found that the competent authority and the officers involved in the auction process appeared to have acted with a pre-concerted intent to auction all seized vehicles in one go, while carrying out procedural requirements as mere empty formalities for the sake of appearances. The Court directed the Economic Offences Unit (EOU) to register an FIR and investigate the fixation of vehicle valuations and the manner in which the auction sales were conducted in the present case. It further directed the EOU to constitute a Special Investigation Team to carry out the investigation in a time-bound manner. The Court noted:“38…The role of authorities involved and the connections of the auction purchasers are required to be verified and gone into. The manner in which subsequent transfers have taken place and to whom such transfers have taken place are also required to be noticed by the investigating agency.”The Court ultimately held in favour of the petitioner and awarded compensation of ₹12,12,517, along with interest at the rate of 6% per annum. It noted:“42. As we have discussed the entire matter and found that the order of confiscation and auction sale of the vehicle has been done in complete violation of law and at this stage the vehicle has already been auction sold and the auction sold vehicle has been further transferred to a third party while setting aside the order of confiscation and holding that the auction sale was bad in law, in the changed circumstances we think it just and proper to grant the alternative prayer of the petitioner”Cause Title: Sushil Kumar Singh v. State of Bihar and OthersCase Number: Civil Writ Jurisdiction Case No. 13123 of 2025Appearance: Mr. Hari Kishore Thakur and Mr. Aditya Dev appeared for the Petitioner. Mr. Sumant Kumar Singh, Mr. Alok Kumar Alok, Mr. Vivek Kumar Pandey, Mr. V.N.P. Sinha, and Mr. Vijay Anand appeared for the Respondents.Click Here To Read/Download OrderCitation: 2025 LiveLaw (Pat) 103

'No Respect For Law': Patna High Court Orders FIR & SIT Probe Over Irregularities In Excise Vehicle Auctions, Awards ₹12 Lakh Compensation

Rushil Batra

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