THE HON'BLE SRI JUSTICE M.GANGA RAO
Writ Petition No. 166 of 2021
ORDER:
The petitioner, who is a Fair Price Shop dealer, filed this writ petition challenging the proceedings No.C1/48/2020 dated 24.09.2020 issued by the 3rd respondent, whereby the petitioner's authorization is cancelled on the ground that the petitioner committed certain irregularities in distribution of the rice and other essential commodities to the card holders and thereby contravened the provisions of the Andhra Pradesh State Targeted Public Distribution System (Control) Order, 2018 (for short 'Control Order, 2018) and against the CCS Memo No.21/100/2015-AD.1 PP&CCS dated 28.09.2015 issued by the Civil Supplies Department and against the judgment passed in the case of Smt. B.Manjula Vs. District Collector, Civil Supplies, Kurnool and others1, on the ground that the impugned cancellation order is not preceded by any enquiry as per the provisions of Clause 8(4) of the Control Order, 2018 and is in violation of principles of natural justice as no opportunity is given to the petitioner to put forth his case in his defence.
2. The case of the petitioner is that he was appointed as a permanent Fair Price Shop dealer of Shop No.1033019, Chinthaparthy Village, Valmikipuram Mandal, Chittoor 1 2015(4) ALT 572 2 District on 21.08.2015 on compassionate grounds and authorization was issued on 05.01.2016. His authorization was renewed from time to time and it was valid upto 31.03.2020. He made an application for renewal of the authorization by paying necessary fee through a challan. As the renewal application is pending as per the provisions of Control Order, 2018, the authorization is deemed to have been renewed. Since his appointment, he has been distributing the essential commodities to the card holders without any complaint. The 7th respondent conducted inspection on 26.07.2019 at 7.15 a.m. and submitted report to the 3rd respondent, without conducting panchanama and without mediators report in compliance of Clause 20(n) of the Control Order, 2018. Based on the said report, the 3rd respondent, without any show-cause notice and calling for explanation as required under law, suspended the petitioner's authorization by proceedings dated 30.07.2019. Questioning the suspension order, the petitioner filed W.P.No.12436 of 2019 before this Court. This Court disposed of the said writ petition on 03.09.2019 following the orders passed in W.P.No.11446 of 2019, directing the 3rd respondent to pass final orders in the matter within a period of four weeks from the date of receipt of a copy of the order. In the meanwhile, the respondents are directed to supply essential commodities to the petitioner until finalization of the enquiry. Accordingly, the 3rd respondent issued orders in File No.C1/448/2019 3 dated 21.12.2019 directing the 6th respondent to allow the petitioner to lift and distribute the essential commodities until finalization of the case or further orders. Accordingly, the petitioner was allowed to draw the essential commodities and distribute the same to the card holders. The petitioner was supplied essential commodities for the month of January, 2020 by Release order dated 25.12.2019 and on 01.01.2020, he received the instruments viz., 1) e-POS machine; 2) Weighing scale; 3) Irish machine; 4) Charges; and 5) Verification certificate only from Smt. Y.Vasundara, temporarily arranged dealer, but no stocks were handed over by the temporary dealer. A show-cause notice dated 16.10.2019 was issued to the petitioner as to why the seized stock should not be confiscated to the Government and asked for his explanation to be submitted within two days from the date of receipt of a copy of the order.
While things stood thus, again the Vigilance & Enforcement Department inspected the petitioner's shop on 07.01.2020 along with Civil Supplies Deputy Tahsildar, Valmikipuram Mandal and alleged certain irregularities in the distribution of essential commodities to the card holders by the petitioner and a case was registered under Section 6A of the Essential Commodities Act, 1955 (for short 'the Act') and seized the stock in the presence of Panchayatdars under the cover of Panchanama.
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Further, a show-cause notice dated 27.06.2020 was issued to the petitioner to submit his explanation within 14 days from the date of receipt of a copy of the notice as to why his authorization should not be cancelled and forfeited the entire security deposit to Government, enumerating the charges framed against the petitioner. The petitioner submitted his explanation on 13.07.2020 to the show-cause notice. The 3rd respondent without considering the explanation in its proper perspective and without conducting proper enquiry as per the provisions of Clause 8(4) of the Control Order, 2018 and the CCS Memo dated 28.09.2015 and as per the law laid down by this Court in the case of Smt. B.Manjula (1 supra), passed the impugned cancellation order dated 24.09.2020. Being aggrieved by the same, the present writ petition is filed.
3. The 3rd respondent filed counter stating that the petitioner was appointed as Fair Price Shop dealer on compassionate grounds on 21.08.2015 and the authorization was also issued, which was valid upto 31.03.2020. The petitioner had committed certain irregularities in distributing the essential commodities, for which his authorization was suspended. As per the orders passed by this Court in W.P.No.12436 of 2019, pending finalization of the enquiry proceedings and final order, the petitioner was supplied essential commodities to distribute the same to the card holders. Again, on inspection of the petitioner's shop on 5 07.01.2020, found certain irregularities and variations in the stocks, and thereby a case was registered under Section 6A of the Act and also seized the stock in the presence of Panchayatdars under the cover of Panchanama and submitted a detailed report for initiation of disciplinary proceedings against the petitioner. Accordingly, a show- cause notice dated 27.06.2020 was issued as to why his authorization shall not be cancelled and forfeited the entire security deposit to the Government, calling for explanation within a period of 14 days from the date of receipt of a copy of said notice. The petitioner submitted explanation on 13.07.2020 and an Intimation notice dated 28.08.2020 was issued to the petitioner to attend the enquiry on 31.08.2020. The petitioner has attended the enquiry and he was given opportunity to defend his case, but the petitioner has not availed the same and moreover he has not opted for recording a sworn statement and simply requested to drop action in this case. The 3rd respondent, by considering the material on record and the explanation submitted by the petitioner and as the charges framed against the petitioner were proved beyond doubt, finally passed orders on 24.09.2020 cancelling the petitioner's authorization duly informing the petitioner that against the said cancellation order, an appeal lies to the District Collector, Chittoor. Hence, there are no procedural irregularities in passing the impugned order of cancellation. 6
4. Sri Y.N.Anjaneyacharyulu, learned counsel for the petitioner, would contend that the impugned order was passed in utter violation of principles of natural justice and without conducting enquiry as contemplated under the provisions of Clause 8(4) of the Control Order, 2018 and CCS Memo dated 28.09.2015 issued by the Civil Supplies Department and as per the law laid down by this Court in the case of Smt. B.Manjula (1 supra). In the show-cause notice dated 27.06.2020, it was stated that the petitioner's shop was inspected on 07.01.2019 by the Vigilance & Enforcement officials and Civil Supplies Deputy Tahsildar and found variations in the stock. It was also stated that the inspecting officials had conducted physical verification of the stocks on ground with the e-pos machine and found variations for the month of January, 2020 viz., 1) Variation of less quantity of 2.38 qtls. of PDS rice; 2) Variation of excess quantity of 0.12 ½ qtls. of Sugar; and 3) Variation of less quantity of 0.5 lts. of ICDS P.Oil. The petitioner submitted explanation to the show-cause notice denying the charges. However, the 3rd respondent, while passing the impugned order of cancellation, has only considered the explanation submitted to the earlier show-cause notice issued in respect of the inspection conducted on 26.07.2019 and not considered the explanation submitted on 13.07.2020 in respect of the show-cause notice dated 27.06.2020 and passed a laconic order without any cogent reasons much less valid reasons for cancellation of 7 petitioner's authorization. He would further contend that as per the procedure contemplated under the provisions of Clause 8(4) of the Control Order, 2018 and the law laid down in the case of Smt. B.Manjula (1 supra), the 3rd respondent based on the report submitted by the Tahsildar has to initiate the disciplinary proceedings against the petitioner for the irregularities committed in the distribution of essential commodities only but not based on the report under Section 6A of the Act submitted by the Tahsildar, Valmikipuram and basing on the report to initiate disciplinary proceedings, a show-cause notice has to be given to the petitioner calling for his explanation. After receipt of explanation, the 3rd respondent has to conduct a detailed enquiry to prove the charges by examining the complainant and panchayatdars (mediatiors) by giving opportunity to the petitioner to cross- examine them. Thereafter only, the 3rd respondent by discussing the evidence available on record, has to pass reasoned order for cancellation of authorization as the said order is appealable and also subjected to judicial review under Article 226 of the Constitution of India by this Court. In support of his contention, the petitioner relied on the decision of the Hon'ble Supreme Court of India in the case of State of H.P. and others Vs. Gujarat Ambuja Cement Ltd. and another2.
2 (2005) 6 SCC 499 8
5. Per contra, learned Assistant Government Pleader for Civil Supplies, while reiterating the averments of the counter, submits that the petitioner is habituated to commit irregularities in distribution of essential commodities for personal gain. Earlier also, an inspection was conducted on 26.07.2019 and found certain irregularities in distribution of essential commodities and variations in stocks and at that time, stocks were seized and a show-cause notice dated 27.06.2020 was issued to the petitioner and his authorization was suspended on 30.07.2019. As per the orders of this Court passed in W.P.No.13436 of 2019, the petitioner was allowed to draw the essential commodities and supply the same to the card holders pending finalization of enquiry and passing of final orders. Pending proceedings, on inspection of the petitioner's Fair Price shop on 07.01.2020, it was found that the petitioner has committed again certain irregularities in distributing the essential commodities and also found variations in stocks, for which a show-cause notice was issued, explanation was called for and Intimation notice was also issued to participate in the enquiry. The petitioner has participated in the enquiry conducted by the 3rd respondent and the 3rd respondent passed the impugned cancellation order considering the explanation of the petitioner and also the evidence available on record. He further submits that the 3rd respondent being an administrative authority passed the cancellation order giving sufficient reasons for cancellation of 9 petitioner's authorization. The administrative authority need not give detailed reasons like that of the judicial authority. Hence, there is no irregularity or illegality in passing the impugned order.
6. The point that arises for consideration before this Court is that - Whether the impugned order of cancellation of petitioner's authorization is passed validly as per the provisions of Clause 8(4) of Control Order, 2018 and the law laid down by this Court in the case of Smt. B.Manjula (1 supra)?
7. The petitioner was appointed as dealer of Fair Price Shop No.1033019 of Chinthaparthy Village, Valmikipuram Mandal, Chittoor District on compassionate grounds vide proceedings date 21.08.2015. On 05.01.2016, authorization was also issued to the petitioner and the same was extended from time to time. By proceedings dated 20.03.2018, the petitioner authorization was renewed and it was valid till 31.03.2020. He submitted application for renewal of the authorization along with necessary fee and it is a deemed to have been renewed. While the petitioner was distributing the essential commodities to the card holders without any complaint, on 26.07.2019, the petitioner's shop was inspected by Civil Supplies Deputy Tahsildar, but no mediators report was prepared as required under Clause 20(n) of the Control Order, 2018. The 3rd respondent issued show-cause notice 10 calling for explanation and pending disciplinary proceedings, the petitioner's authorization was suspended and an alternative arrangement for distributing the essential commodities was made. Questioning the suspension order dated 30.07.2019, the petitioner filed W.P.No.12436 of 2019 before this Court. This Court disposed of the said writ petition by order dated 03.09.2019 directing the 3rd respondent to pass final orders within a period of four weeks and also directed the respondents to supply the essential commodities to the petitioner until finalization of the enquiry. As per the said orders, the petitioner was supplied the essential commodities for the month of January, 2020 by Release order dated 25.12.2019. On 01.01.2020, he received the instruments viz., 1) e_PoS machine, 2) Weighing Scale, 3) Irish machine, 4) Charges and 5) Verification certificate only from Smt. Y.Vasundara, temporary arranged dealer, but no stocks were handed over by the temporary dealer.
8. However, on 16.10.2019, a show-cause notice of confiscation was issued and the petitioner submitted explanation on 02.11.2019 and by proceedings dated 25.09.2020, confiscation order confiscating 100% of seized stock to the Government was passed. Along with the said confiscation order, the impugned cancellation order dated 24.09.2020 was issued. In respect of subsequent inspection of petitioner's shop on 07.01.2020 by the Vigilance & Enforcement officials, based on the said inspection, a show- 11 cause notice dated 27.06.2020 was issued framing the following charges:
"Charge-1: The FP Shop dealer has not maintained accounts properly thus variation in PDS rice to 2.38 quintals was found to the Inspecting Officials and thus contravened 12(p)(3) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018.
Charge-2: The FP Shop dealer could not produce the authorization to the Inspecting Officials hence they suspected that the dealer is running the shop without authorization and thus contravened clause 8(12) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018.
Charge-3: The FP Shop dealer has not maintained the timings as prescribed by the Government and opening the FP shop by 10.00 AM., and the card holders and waiting for hours together to draw the ECs and causing more inconvenience to the and thus contravened clause 8(12) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018.
Charge-4: The F.P.Shop dealer is issuing less quantity of Rice and collecting Rs.15/- per ½ Kg Sugar as against Rs.10/- and collecting Rs.20/- per Atta packet as against Rs.16.50ps. and for Redgram for Rs.50/- per Kg as against Rs.40/- fixed by the Government and collecting higher rate from the card holder for the ECs and thus contravened clause 12(n) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018."
The petitioner submitted explanation on 13.07.2020 denying the charges. But, the mediators report reveals the 12 variation of rice as (-) 2.38 qtl., sugar as 0.12 1/2 qtl., PDS Dal as 0.05 qtl. and Wheat atta as 0.01 qtl. And ICDS P.Oil as (-)0.5 lts.
9. This Court found that without considering the petitioner's explanation in its proper perspective with reference to the charges and variations found in the shop, the 3rd respondent without conducting any enquiry as contemplated under the provisions of Clause 8(4) of the Control Order, 2018 and the law laid down by this Court in the case of Smt. B.Manjula (1 supra), passed the order laconically without giving any reasons, which amounts to violation of principles of natural justice. It is further stated that against the order, an appeal lies to the District & Sessions Judge, Chittoor, within a period of 30 days.
10. This Court, after elaborate discussion, in the cases of 1) Smt. B.Manjula (1 supra), 2) Pidikiti Sailaja Vs. State of A.P.3 and 3) C.Durga Srinivasa Rao and others Vs. The State of Andhra Pradesh and others4, held that the disciplinary authority has to prove the charges by conducting enquiry and examining the witnesses by giving opportunity to the dealer to cross-examine the witnesses and to submit his detailed explanation. The disciplinary authority is under statutory obligation to pass reasoned order while cancelling the Fair Price Shop dealership of the petitioner and the impugned 3 2015(2) ALT 667 4 2015(6) ALD 359 13 order is bereft of any reasons and not preceded by any enquiry as contemplated under Clause 8(4) of the Control Order, 2018 and the law laid down by this Court in the case of Smt. B.Manjula (1 supra) and a separate report has to be submitted by the Tahsildar to take disciplinary action as required under Clause 20(i) of the Control Order, 2018. This Court also found that instead of conducting final enquiry as directed by this Court in W.P.No.12436 of 2019 dated 03.09.2019, the 3rd respondent hatched up a plan and again inspected the petitioner's Fair Price shop on 07.01.2020 even before handing over the stocks by the temporary dealer, thereby the respondent authorities are not acted fairly. The said impugned action is motivated and it is only to circumvent the earlier order of this Court passed in W.P.No.12436 of 2019.
11. Hence, the contention of the learned Assistant Government Pleader that against the impugned order, an appeal lies to the District Collector, Chittoor and without exhausting the same, the petitioner approached this Court straightaway and the writ petition is not maintainable, is unsustainable in the facts and circumstances of the case. As the impugned order is passed without conducting any enquiry and against the principles of natural justice, the impugned order is liable to be set aside.
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12. Accordingly, the Writ Petition is allowed setting aside the impugned order dated 24.09.2020. The respondent authorities are directed to supply the essential commodities to the petitioner forthwith to distribute the same to the card holders. However, liberty is given to the 3rd respondent, who is the competent disciplinary authority, to conduct fresh enquiry as per the law laid down by this Court in the cases 1, 3 and 4 referred supra and pass appropriate reasoned order and communicate the same to the petitioner. No order as to costs.
13. Miscellaneous Petitions, if any, pending in this writ petition shall stand closed.
___________________________ JUSTICE M.GANGA RAO 05-05-2022 anr 15 THE HON'BLE SRI JUSTICE M.GANGA RAO Writ Petition No. 166 of 2021 05-05-2022 Anr