Rajendra Singh vs State Of U.P. And 3 Others
2018 Latest Caselaw 3524 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

		      A.F.R.
 

 
Court No. - 38 				                    Reserved
 

 
Case :- WRIT - C No. - 17164 of 2018
 

 
Petitioner :- Rajendra Singh 
 
Respondent :- State of U.P. And 3 others
 
Counsel for Petitioner :- Jay Singh Yadav
 
Counsel for Respondent :- C.S.C. Arun Kumar Srivastava
 

 
Hon'ble Ajay Bhanot,J.

1. The petitioner is a fair price shop licensee of Gram Panchayat Sutari, Tehsil Hasanpur, District Amroha. Certain allegations of malpractices and irregularities committed by the petitioner in distribution of essential commodities caused the lodgement of a F.I.R. against the petitioner. The F.I.R. was lodged on 17.03.2018 as Case Crime No. 0089 of 2018 under Section 3/7 of the Essential Commodities Act, at P.S. Said Nagli, District Jyotiba Phule Nagar. Subsequent to the lodgement of the F.I.R., an order was passed on 28.03.2018 suspending the license of the petitioner. The order dated 28.03.2018 also directed the petitioner to show cause on the said allegations of malpractices in distribution of essential commodities within a week. The petitioner submitted an application dated 05.05.2018 stating therein that he is not able to submit his explanation within the time specified due to an illness and requested for ten days further time to give his reply.

2. The petitioner has assailed the order dated 28.03.2018 suspending his license and asking him to show cause on the allegations of malpractices, in the instant writ petition.

3. Sri Jai Singh Yadav, learned counsel for the petitioner submits that the licence of the petitioner could not be suspended merely on the lodgement of the F.I.R.. He relies upon the Full Bench judgment of this Court in the case of Bajrangi Tiwari Vs. Commissioner, Devi Patan Mandal Gonda and another, reported at 2018 AIR (Allahabad) 115. He also contends that both civil and criminal proceedings cannot continue simultaneously.

4. Sri Devesh Vikram, learned Standing Counsel in opposition to the submissions made on behalf of the petitioner, contends that the license of the petitioner has not been suspended solely on the ground of lodgment of FIR. The law laid down by the Full Bench of this Court in the case of Bajrangi Tiwari (supra) is not applicable to the facts of this case. Learned Standing Counsel further submits that civil and criminal proceedings can be prosecuted simultaneously.

5. Heard learned counsel for the parties.

6. A perusal of the show cause notice dated 28.03.2018 discloses that on receipt of complaints of black marketing of essential commodities and consequent orders of the competent authority, a surprise on site inspection was made by the Supply Inspector, Hasanpur on 14.03.2018. The Supply Inspector reached the fair price shop in village Sutari and found the shop locked up. Enquiries from family members of the dealer (petitioner) revealed that the petitioner had gone out. A demand for keys of the lock was made to the family of the petitioner. The demand was declined by the wife of the petitioner stating that the keys were not in her possession. A large number of card holders had gathered at the site. Seeing the card holders, the Supply Inspector asked them to be present on 15.03.2018 for a more detailed enquiry. On 15.03.2018 at 10.30 a.m., the Supply Inspector, Hasanpur, accompanied by police constables Vikrant and Akshay from Police Station-Saidangali reached the site of the shop. The petitioner was not present at the shop. The members of the family disclosed that the petitioner was not available as he had gone out. A demand was again made for the stock and sale registers and the keys of the shop. The family members informed the Supply Inspector that the key and the registers were not with them. Consequently, in the presence of police constables Vikrant Singh and Akshay Kumar and various members of the village panchayat, Sutari including Ompal, Veer Singh, Kunwar Pal, Jaipal, Gajram, Jogendra and others the lock of the shop was broken open. The shop was inspected. In the physical inspection of the shop certain essential commodities in different quantities were found. The commodities so found were made over to the custody of Rajveer Singh, fair price shop dealer of village panchayat, Sakatpur, Karanpur. The complaints of the villagers/card holders were then recorded. A large number of villagers complained that essential commodities were not provided to them. The enquiry primafacie revealed large scale irregularities and malpractices in the distribution of essential commodities. It also came to light that the petitioner had indulged in black marketing of the essential commodities. The card holders and other beneficiaries were denied their entitlements.

7. The aforesaid irregularities disclosed in the course of enquiry by the Supply Inspector necessitated a full fledged enquiry. Consequently, the show cause notice dated 28.03.2018 was taken out against the petitioner requiring him to tender his reply to the charges laid out against him in the show cause notice. The show cause notice dated 28.03.2018 also records that FIR has been registered against the petitioner under Section 3/7 of the Essential Commodities Act.

8. Clearly the fair price shop license has not been suspended solely on the footing of the first information report. On the contrary, in the light of the narrative in the preceding paragraphs, the proceedings taken out under the show cause notice are independent of the criminal proceedings. The proceedings under the show cause notice have been taken out to investigate the complaints of violation of the covenants of the contract of fair price shop dealership. The purpose of the proceedings under the show cause notice, is also to ascertain, whether there has been transgression of provisions of Uttar Pradesh Essential Commodities (Regulation of Sale and Distribution Control) Order, 2016 (hereinafter referred to as "Control Order 2016") by the petitioner. The result of the enquiry would determine, whether the dealership contract of the petitioner is liable to be terminated or any penalty on that score is liable to be imposed upon the petitioner.

9. In the light of the said facts as enumerated in the show cause notice-cum-suspension order dated 28.03.2018, the applicability of the Full Bench decision of this Court in Bajrangi Tiwari (supra) shall be seen.

10. The following questions were posed to the Full Bench of this Court in the case of Bajrangi Tiwari (supra);

"1. Whether the fair price shop licence can be cancelled merely on lodging of a criminal case against the licencee?; and

2. Whether, while passing any such order the Government Order dated 17.8.2002, particularly para-10 of said Government Order would be applicable/considered or not?"

11. The Full Bench answered the reference and laid down the law in the following terms:

"(i) The answer is No. Licence of a fair price shop cannot be cancelled merely on lodging of FIR against the licencee.

(ii) The answer is no. The Government order dated 17.8.2002 relates to allotment of a fair price shop and hence the same cannot be referred to in suspension/cancellation of licence. It is the Government order dated 29.7.2014 according to which the suspension/cancellation of a fair price shop licence can take place."

12. The narrative in the preceding paragraphs clearly shows that the suspension of the fair price shop license was not merely in consequence to the lodgement of the first information report. The primary purpose of the suspension in this case was to aid an enquiry into allegations of malpractices in distribution of essential commodities. Moreover, the prohibition imposed by the Full Bench judgment in Bajrangi Tiwari (supra) is against the cancellation of license merely on lodgement of F.I.R. against the licensee. In such view of the facts narrated in the preceding part of the judgment the law laid down by Full Bench judgment of this Court in the case of Bajrangi Tiwari (supra) is not applicable to the facts of this case.

13. The second argument is now required to be considered. The question is whether criminal prosecution and civil proceedings on the same cause of action can be instituted and prosecuted simultaneously. There is good authority to hold that civil and criminal proceedings on the same cause of action can be instituted and prosecuted simultaneously. The authority rests on sound principles of judicial policy. The purpose of criminal prosecution and the object of civil proceedings are entirely distinct. The criminal prosecution is instituted to check crime against the society at large and is intended to bring the offenders to justice. Criminal proceedings ensure that the society is purged of crime. At any rate crime against the society cannot go unpunished.

14. The civil proceedings are brought for actions like breach of contractual obligations violation of statutory provisions and so on. The civil proceedings fix the extent of liability for such breach. The purpose of bringing civil proceedings against an individual is thus distinct from the institution of criminal proceedings.

15. The sources of law vesting the power to institute criminal prosecution and bring civil action are also separate and independent. Criminal proceedings arise out of statutory provisions, which clearly define the crime and the punishment. Criminal offences as well as punishment are defined by statutes. The cause on which civil proceedings are founded include contractual covenants, property matters, departmental action and so on.

16. The consequences of criminal prosecution and the result of civil proceedings too stand in complete variance. Conviction of accused in criminal proceedings may result in imprisonment or jail terms for the offender. Civil proceedings or indictment in enquiry proceedings culminate in fixing civil liability which could be in the nature of damages or termination of contract and the like, depending upon the nature of the civil litigation.

17. The rules of evidence which are applicable to civil proceedings as well as criminal proceedings are also different. The person being prosecuted for a criminal offence can be proved guilty in criminal proceedings only if the offence is proved beyond reasonable doubt. The standard of evidence in criminal proceedings is thus proof "beyond reasonable doubt".

18. In civil proceedings the standard of evidence required to establish a fact is "preponderance as liability". The standard of evidence thus required to establish liability in civil proceedings is only "preponderance of probability".

19. The legal narrative can now be fortified by reference to some judicial authorities in point.

20. In Iqbal Singh Marwah and others Vs Meenakshi Marwah and others reported at 2005 (4) SCC 370, the Hon'ble Supreme Court while considering the different standards of evidence applicable to civil and criminal proceedings stated the position of law in the following terms:-

"32. Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal Courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given.

There is neither any statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein. "

21. In the case of P. Swaroopa Rani Vs M. Hari Narayana , 2008 (5) SCC 765 the Hon'ble Supreme Court emphasized that there is no embargo against continuance of civil proceedings merely on account of pendency of criminal proceedings and categorically held;

"11. It is, however, well-settled that in a given case, civil proceedings and criminal proceedings can proceed simultaneously. Whether civil proceedings or criminal proceedings shall be stayed depends upon the fact and circumstances of each case."

22. In the case of Ajit Kumar Nag Vs General Manager (PJ), Indian Oil Corporation Ltd. Haldia and others, reported at (2005) 7 SCC 764, the Hon'ble Supreme Court held that the simultaneous continuance of civil and criminal proceedings was permissible in law. The Hon'ble Supreme Court rested the aforesaid proposition of law by delineating the purposes, object and the procedures of criminal and departmental proceedings. The Hon'ble Supreme Court held thus;

"........The two proceedings - criminal and departmental - are entirely different. They operate in different fields and have different objectives. Whereas the object of criminal trial is to inflict appropriate punishment on offender, the purpose of enquiry proceedings is to deal with the delinquent departmentally and to impose penalty in accordance with service Rules. In a criminal trial, incriminating statement made by the accused in certain circumstances or before certain officers is totally inadmissible in evidence. Such strict rules of evidence and procedure would not apply to departmental proceedings. The degree of proof which is necessary to order a conviction is different from the degree of proof necessary to record the commission of delinquency. The rule relating to appreciation of evidence in the two proceedings is also not similar. In criminal law, burden of proof is on the prosecution and unless the prosecution is able to prove the guilt of the accused 'beyond reasonable doubt', he cannot be convicted by a court of law. In departmental enquiry, on the other hand, penalty can be imposed on the delinquent officer on a finding recorded on the basis of 'preponderance of probability'.

Acquittal of the appellant by a Judicial Magistrate, therefore, does not ipso facto absolve him from the liability under the disciplinary jurisdiction of the Corporation. We are, therefore, unable to uphold the contention of the appellant that since he was acquitted by a criminal court, the impugned order dismissing him from service deserves to be quashed and set aside."

23. The proceedings taken out by the show cause notice are analogous to departmental proceedings in many ways.

24. In State Bank of India and others Vs Neelam Nag and Another, reported at (2016) 9 SCC 491, the Hon'ble Supreme Court adopted an approach which was consistent with the above mentioned authorities. The Hon'ble Supreme Court re-emphasized that there was no blanket legal bar on continuing civil and criminal proceedings simultaneous. The imperative to consider every case on its peculiar facts was restated. The Hon'ble Supreme Court in State Bank of India Vs Neelam Nag (supra) held thus:

"We have heard the learned Counsel for the parties at some length. The only question that arises for consideration, is no more res-integra. It is well-settled that there is no legal bar to the conduct of the disciplinary proceedings and criminal trial simultaneously. However, no straightjacket formula can be spelt out and the Court has to keep in mind the broad approach to be adopted in such matters on case to case basis. The contour of the approach to be adopted by the Court has been delineated in series of decisions. "

25. In the light of such settled judicial authority, the scope of criminal and civil proceedings in the facts of the case may be examined.

26. The criminal proceedings against the petitioner have been instituted as Case Crime No. 0089 of 2018, Police Station, Said Nagali, District Jyotiba Phule Nagar under Section 3/7 Essential Commodities Act, 1955 (hereinafter referred to as "Act of 1955") . The scope and the consequence of such criminal proceedings can be prised out from a perusal of the aforesaid provisions of law. The relevant provisions of Act of 1955 are being extracted hereunder for ease of reference;

Powers to Control Production, Supply, Distribution, Etc. of Essential Commodities.

Section 3: (1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, [ 12 or for securing any essential commodity for the defense of India or the efficient conduct of military operations 12 ], it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

(2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide, -

(a) for regulating by licenses, permits or otherwise the production or manufacture of any essential commodity;

(b) for bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food-crops generally or of specified food-crops, and for otherwise maintaining or increasing the cultivation of food-crops generally, or of specified foods-crops;

(c) for controlling the price at which any essential commodity may be bought or sold;

(d) for regulating by licenses, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity;

(e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale;

(f) [ 13 for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity, -

(a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or

(b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him, to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the other.

Explanation 1 : An order made under this clause in relation to food grains, edible oilseeds or edible oils, may, having regard to the estimated production, in the concerned area, of such food grains, edible oilseeds and edible oils, fix the quantity to be sold by the producers in such area may also fix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate of the area held by, or under the cultivation of the producers.

Explanation 2 : For the purpose of this clause, "production" with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar; 13 ]

(g) for regulating or prohibiting any class of commercial or financial transactions relating to foodstuffs or cotton textiles which, in the opinion of the authority making the order, are, or, if unregulated, are likely to be, detrimental to the public interest;

(h) for collecting any information or statistic with a view to regulating or prohibiting any of the aforesaid matters;

(i) for requiring persons engaged in the production, supply or distribution of, or trade and commerce in, any essential commodity to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be specified in the order;

[ 14 (ii) for the grant or issue of licenses, permits or other documents, the charging of fees therefor, the deposit of such sum, if any, as may be specified in the order as security for the due performance of the conditions of any such license, permit or other documents, the forfeiture of the sum so deposited or any part thereof for contravention of any such conditions, and the adjudication of such forfeiture by such authority as may be specified in the order 14 ];

(j) [ 15 for any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveyances and animals, and the seizure by a person authorized to make such entry, search or examination, -

(i) of any articles in respect of which such person has reason to believe that a contravention of the order has been, is being, or is about to be, committed and any packages, coverings or receptacles in which such articles are found;

(ii) of any aircraft, vessel, vehicle or other conveyance or animal used in carrying such articles, if such person has reason to believe that such aircraft, vessels, vehicle or other conveyance or animal is liable to be forfeited under the provisions of this Act;

(iii) [ 16 of any books of accounts and documents which in the opinion of such person, may be useful for, or relevant to, any proceeding under this Act and the person from whose custody such books of accounts or documents are seized shall be entitled to make copies thereof or to take extracts there from in the presence of an officer having the custody of such books of accounts or documents. 16 ] 15 ]

(3) Where any person sells any essential commodity in compliance with an order made with reference to Cl. (f) of sub-section (2), there shall be paid to him the price therefor as hereinafter provided :-

(a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price;

(b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any;

(c) where neither Cl. (a) nor Cl. (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale.

[17 (3-A) (i) If the Central Government is of opinion that it is necessary so to do for controlling the rise in prices or preventing the hoarding, of any foodstuff in any locality, it may, by notification in the Official Gazette, direct that notwithstanding anything contained in sub-section (3), the price at which the foodstuff shall be sold in the locality in compliance with an order made with reference to Cl. (f) of sub-section (2) shall be regulated in accordance with the provisions of this sub-section.

(ii) Any notification issued under this sub-section shall remain in force for such period not exceeding three months as may be specified in the notification.

(iii) Where, after the issue of a notification under this sub-section, any person sells foodstuffs of the kind specified therein and in the locality so specified, in compliance with an order made with reference to Cl.(f) of sub-section (2), there shall be paid to the seller as the price therefor, -

(a) where the price can, consistently with the controlled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price ;

(b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any;

(c) where neither Cl.(a) nor Cl.(b) applies, the price calculated with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification.

(iv) For the purposes of sub-clause (c) of Cl.(iii), the average market rate prevailing in the locality shall be determined by an officer authorized by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighboring locality; and the average market rate so determined shall be final and shall not be called in question in any Court 17 ].

[18 (3-B) Where any person is required, by an order made with reference to Cl.(f) of sub-section (2), to sell to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government, any grade or variety of food grains, edible oilseeds or edible oils in relation to which no notification has been issued under sub-section (3-A), or such notification having been issued, has ceased to be in force, there shall be paid to the person concerned, notwithstanding anything to the contrary contained in sub-section (3), an amount equal to the procurement price of such food grains, edible oilseeds or edible oils, as the case may be, specified by the State Government, with the previous approval of the Central Government having regard to, -

(a) the controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of food grains, edible oilseeds or edible oils;

(b) the general crop prospects;

(c) the need for making such grade or variety of food grains, edible oilseeds or edible oils available at reasonable prices to the consumers, particularly the vulnerable sections of the consumers; and

(d) the recommendations, if any, of the Agricultural Prices Commission with regard to the price of the concerned grade or variety of food grains, edible oilseeds or edible oils. 18 ]

[19 (3-C) Where any producer is required by an order made with reference to Cl.(f) of sub-section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Government or any other person or class of persons) and either no notification in respect of such sugar has been issued under sub-section (3-A) or any such notification, having been issued, has ceased to remain in force by efflux of time, then, notwithstanding anything contained in sub-section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to, -

(a) the minimum price, if any, fixed for sugarcane by the Central Government under this section;

(b) the manufacturing cost of sugar;

(c) the duty or tax, if any, paid or payable thereon; and

(d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined, from time to time, for different areas or for different factories or for different kinds of sugar.

Explanation : For the purposes of this sub-section, "producer" means a person carrying on the business of manufacturing sugar. 19 ]

(4) If the Central Government is of opinion that it is necessary so to do for maintaining or increasing the production and supply of an essential commodity, it may, by order, authorize any person (hereinafter referred to as an authorized controller) to exercise, with respect to the whole or any part of any such undertaking engaged in the production and supply of the commodity as may be specified in the order such functions of control as may be provided therein and so long as such order is in force with respect to any undertaking or part thereof, -

(a) the authorized controller shall exercise his functions in accordance with any instructions given to him by the Central Government, so, however, that he shall not have any power to give any direction inconsistent with the provisions of any enactment or any instrument determining the functions of the persons in-charge of the management of the undertaking, except in so far as may be specifically provided by the order; and

(b) the undertaking or part shall be carried on in accordance with any directions given by the authorized controller under the provisions of the order, and any person having any functions of management in relation to the undertaking or part shall comply with any such directions.

(5) An order made under this section shall, -

(a) in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette; and

(b) in the case of an order directed to a specified individual be served on such individual, -

(i) by delivering or tendering it to that individual, or

(ii) if it cannot be so delivered or tendered, by affixing it on the outer door or some other conspicuous part of the premises in which that individual lives, and a written report thereof shall be prepared and witnessed by two persons living in the neighborhood.

(6) Every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made.

Section 7:

PENALTIES.(1) If any person contravenes any order made under Sec. 3, - (a) he shall be punishable, -

(i) in the case of an order made with reference to Cl.(h) or Cl.(i) of sub-section (2) of that section, with imprisonment for a term which may extend to one year and shall also be liable to fine, and

(ii) in the case of any other order, with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine;

[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three months;]

(b) any property in respect of which the order has been contravened shall be forfeited to the Government;

(c) any packing, covering or receptacle in which the property is found and any animal, vehicle, vessel or other conveyance used in carrying the property shall, if the Court so orders, be forfeited to the Government.

(2) If any person to whom a direction is given under Cl. (b) of sub-section (4) of Sec. 3 fails to comply with the direction, he shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine.

[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three months.]

(2-A) If any person convicted of an offence under sub-clause(ii) of Cl. (a) of sub-section (1) or under sub-section (2) is again convicted of an offence under the same provision, he shall be punishable with imprisonment for the second and for every subsequent offence for a term which shall not be less than six months but which may extend to seven years and shall also be liable to fine :

[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment impose a sentence of imprisonment for a term of less than six months.]

[(2B) For the purposes of sub-sections (1), (2) and (2A), the fact that an offence under sub-clause (ii) of clause (a) of sub-section (1) or under sub-section (2) has caused no substantial harm to the general public or to any individual, shall be an adequate and special reason for awarding a sentence of imprisonment for a term of less than three months, or six months, as the case may be.]]

(3) Where a person having been convicted of an offence under sub-section (1) is again convicted of an offence under that sub-section for contravention of an order in respect of an essential commodity, the Court by which such person is convicted shall, in addition to any penalty which may be imposed on him under that sub-section, by order, direct that person shall not carry on any business in that essential commodity for such period, not being less than six months, as may be specified by the Court in the order.]

27. A conviction under Section 7 of Act 1955 may entail a term of imprisonment from not less than three months to seven years in addition to fine. There are other penal consequences which are provided in Section 7 of Act 1955.

28. The relevant provisions of the Control Order 2016, under which the operation of fair price shops is regulated are extracted hereunder:-

"8. Operation of fair price shops.-

1. The fair price shop owner shall disburse foodgrains to the ration card holders as per his entitlement under the Targeted Public Distribution System.

2. A ration card holder may draw his full entitlement of food grains in more than one installment.

3. The fair price shop owner shall not retain the ration cards after the supply of the foodgrains.

4. The licence issued by the State Government to the fair price shop owner shall lay down the duties and responsibilities of the fair price shop owner, which shall include, inter alia, -

i. Sale of foodgrains as per the entitlement of ration card holders under the Targeted Public Distribution System at the prescribed retail issue price;

ii. display of information on a notice board at a prominent place in the shop on daily basis regarding,-

a. entitlement of food grains,

b. scale of issue,

c. retail issue prices,

d. timings of opening and closing of the fair price shop including lunch break, if any,

e. stock of food grains received during the month,

f. opening and closing stock of food grains,

g. the mechanism including authority for redressal of grievances with respect to quality and quantity of food grains under the Targeted Public Distribution System, and

h. toll-free helpline number;

iii. maintenance of the records of ration card holders, e.g. stock register, issue or sale register shall be in the form prescribed by the State Government including in the electronic format in a progressive manner;

iv. display of samples of food grains being supplied through the fair price shop;

v. production of books and records relating to the allotment and distribution of food grains to the inspecting agency and furnishing of such information as may be called for by the designated authority;

vi. the shop keeper shall in the end of each month submit a detail description of receipt of foodgrain and other essential commodities, actual distribution during the month and remaining balance of stock to designated officer who will sent a compilation of all such certificates under his area of appointment to the Competent Authority;

vii. opening and closing of the fair price shop as per the prescribed timings displayed on the notice board.

5. Any ration card holder desirous of obtaining extracts from the records of a fair price shop owner may make a written request to the owner along with the deposit of the fees specified by the State Government. The fair price shop owner shall provide such extracts of records to the ration card holder within fourteen days from the date of receipt of a request and the said fee:

Provided that the State Government may prescribe the period for which the records are to be kept for providing the ration card holder by the fair price shop owner.

6. The State Government shall prescribe the procedure to be followed by the designated authority in cases where the fair price shop owner does not provide the records in the manner referred in sub clause (5) to the ration card holder in the stipulated period and the designated authority in each case shall ensure that the records are provided to the ration card holder without any undue delay.

7. The Competent Authority shall take prompt action in respect of violation of any condition of licence including any irregularity committed by the fair price shop owner, which may include suspension or cancellation of the fair price shop owner's licence. (emphasis supplied)

8. The maximum period within which proceedings relating to enquiry into irregularities committed by the fair price shop owner shall be concluded, resulting in any action as under sub-clause (7) shall be two months. (emphasis supplied)

9. In case of suspension or cancellation of the agreement, the Competent Authority shall make alternative arrangements for ensuring uninterrupted supply of foodgrains to the eligible households:

Provided that in case of cancellation of the agreement of the fair price shop owner, new agreement shall be issued within a month of cancellation.

10. The State Government shall furnish complete information on action taken against a fair price shop owner under this clause annually to the Central Government in the format at Annexure-V." (emphasis supplied)

29. The proceedings taken out under the show cause notice are relateable to the The Uttar Pradesh Essential Commodities (Regulation of Sale and Distribution Control) Order, 2016, various Government Orders holding the field and also to the contract between the State Government and the petitioner. An indictment in the said enquiry pursuant to the show cause notice may entail imposition of fine or termination of contract of the dealership or both.

30. The scope and the purpose of proceedings arising out of the show cause notice shall now be considered, in the light of the role of fair price dealer.

31. The public distribution system caters to the needs of most deprived sections of the society.

32. The fair price shop dealer is a pivot in the public distribution system. The essential commodities are distributed to the card holders through the agency of the fair price shop dealer. The rights of eligible persons under the National Food Security Act, 2013 are brought to fruition through the medium of the fair price shop dealer.

33. The fair price shop dealership is a contractual agreement between the State Government and the dealer. The privity of such contract is between the fair price shop dealer and the State Government. The high public purpose served by the agency of a fair price shop dealer means that the covenants of the contract are more a charter of obligations than a bill of rights.

34. The allegations of malpractices in distribution of essential commodities to the ration card holders constitutes a breach of contractual terms between the State Government and the fair price shop dealer. Such malpractices also lead to denial of entitlements of the ration card holders vested by various beneficial schemes and also by the National Food Security Act, 2013 (hereinafter referred to as "Act 2013"). These malpractices in the distribution of sale of essential commodities also entail violation of the provisions of the Control Order, 2016 and the relevant government orders controlling the machinery of the public distribution.

35. In case, such allegations are brought to the notice of the authorities, an enquiry has to be conducted. The investigation undertaken on the foot of show cause notice is one such enquiry.

36. It is well known that criminal proceedings take long years to attain finality. In case, the proceedings under the Uttar Pradesh Essential Commodities (Regulation of Sale and Distribution Control) Order, 2016 to investigate the breach of the contract are held in abeyance on account of pendency of a criminal case, it would have serious and far reaching consequences.

37. The contractual rights of the State to investigate the breaches of contract would be fettered. The power of State Government to investigate violations of Control Order, 2016 and denial of the entitlements to the card holders would be stymied and the contractual obligations of the dealer would become unenforceable. In such a situation contract cannot be terminated even if the fair price shop dealer is in breach of the terms of the contract. Further, the responsibility for violation of Control Order, 2016 and liability for denial of entitlements under the Act of 2013 to the eligible recipients would not be determined. This inability of the State Government will give immunity to the dealer committing malpractices in storage, sale and distribution of essential commodities and perpetuate the denial of entitlements to the ration card holders. The criminal trial would continue almost indefinitely and consequently the proceedings under the Control Order, 2016 would be postponed interminably. The fair price shop dealer will not remain accountable to the system created by the Control Order, 2016.

38. In fact the proceedings taken out in pursuance of the show cause notice, ensure transparency and probity in the functioning of the fair price dealer dealer. The proceedings assure fair distribution of essential commodities to the card holders by creating accountability in the functioning of the fair price dealer. These proceedings under Control Order, 2016 are independent of the criminal proceedings under Section 3/7 of the Essential Commodities Act, 1955.

39. In these circumstances stalling the proceedings taken out in pursuance of the show cause notice dated 28.03.2018 on the ground of pendency of the criminal proceedings, would derail the public distribution system.

40. In such facts of the matter it is not in the interest of justice to stay the proceedings initiated on the footing of the show cause notice, till the conclusion of the criminal trial. The proceedings of the enquiry on the footing of show cause notice are hence within the jurisdiction of the authorities and have been initiated in accordance with law.

41. There is no infirmity in the show cause notice-cum-suspension order dated 23.08.2018 and the consequent proceedings. The show cause notice-cum-suspension order and the proceedings undertaken in consequence thereof are upheld as lawful and valid.

42. The writ petition is dismissed.

Order Date :- 02.11.2018

Pravin