Allahabad High Court
Najakat Ali vs State Of U.P. And 4 Others on 22 October, 2021
Bench: Rohit Ranjan Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD
AFR
Reserved on 22.09.2021
Delivered on 22.10.2021
Court No. - 32
1. Case :- WRIT - C No. - 15420 of 2020
Petitioner :- Najakat Ali
Respondent :- State Of U.P. And 4 Others
Counsel for Petitioner :- Vishal Tandon
Counsel for Respondent :- C.S.C.,Subhash Chandra Pandey
Alongwith
2. Case :- WRIT - C No. - 28966 of 2018
Petitioner :- M/S Mohd. Saleem
Respondent :- State of U.P. And 5 Others
Counsel for Petitioner :- Rajesh Kumar Pandey,Anjali,Jaichandra Singh,Pramod Kumar Singh
Counsel for Respondent :- C.S.C.,Mahesh Narain Singh
3. Case :- WRIT - C No. - 1464 of 2019
Petitioner :- Sri Nisar Ahmad
Respondent :- State of U.P. And 3 Others
Counsel for Petitioner :- Bharat Singh
Counsel for Respondent :- C.S.C.,Arun Kumar Srivastava,Ishan Deo Giri
4. Case :- WRIT - C No. - 5430 of 2019
Petitioner :- Guddo Devi
Respondent :- State of U.P. And 3 Others
Counsel for Petitioner :- Arvind Prabodh Dubey,Naushad Alam
Counsel for Respondent :- C.S.C.,Lal Prabhakar Singh
5. Case :- WRIT - C No. - 8204 of 2019
Petitioner :- Ram Chandra Yadav
Respondent :- State of U.P. And 6 Others
Counsel for Petitioner :- Dev Narayan Tiwari,Anil Kumar Dubey,Raj Kumar Ojha
Counsel for Respondent :- C.S.C.,Jadu Nandan Yadav,Rajiv Kumar Yadav,Tariq Maqbool Khan
6. Case :- WRIT - C No. - 24220 of 2019
Petitioner :- Jaichandra
Respondent :- Additional Commissioner (Administrative) Kanpur And Another
Counsel for Petitioner :- Ashok Kumar Singh,Anoop Singh
Counsel for Respondent :- C.S.C.
7. Case :- WRIT - C No. - 40982 of 2019
Petitioner :- Manju Sharma
Respondent :- State of U.P. And 4 Others
Counsel for Petitioner :- Devendra Pratap Yadav,Sanjay Kumar Mishra,Suresh Chandra Pandey
Counsel for Respondent :- C.S.C.
8. Case :- WRIT - C No. - 1212 of 2020
Petitioner :- Udayveer Singh
Respondent :- Deputy Commissioner (Food And Civil Supply) And 3 Others
Counsel for Petitioner :- Arvind Kumar Mishra
Counsel for Respondent :- C.S.C.,Ashutosh Upadhyay,Kaushal Kishore Mani
9. Case :- WRIT - C No. - 12376 of 2020
Petitioner :- Hargyan Singh
Respondent :- State of U.P. And 4 Others
Counsel for Petitioner :- Pradeep Kumar,Mahesh Kumar Yadav
Counsel for Respondent :- C.S.C.,Ajay Kumar Srivastava,Kaushal Kishore Mani,Krishna Kumar Singh
10. Case :- WRIT - C No. - 13484 of 2020
Petitioner :- Vijay Kumar
Respondent :- State of U.P. And 2 Others
Counsel for Petitioner :- Shravan Kumar Srivastava,Mahesh Kumar Dubey
Counsel for Respondent :- C.S.C.
11. Case :- WRIT - C No. - 18436 of 2020
Petitioner :- Reena Devi
Respondent :- State of U.P. And 3 Others
Counsel for Petitioner :- Dhanbeer Mishra
Counsel for Respondent :- C.S.C.,Bhupendra Kumar Tripathi,Satyendra Singh
Hon'ble Rohit Ranjan Agarwal,J.
1. ''Right to food' emanates from ''right to life' guaranteed under Article 21 of the Constitution of India. Moving forward Central Government enacted National Food Security Act, 2013 (hereinafter called as "Act of 2013") keeping in mind Article 47 of the Constitution, which mandates the States with duty to raise the level of nutrition and standard of living and to improve public health.
2. Act of 2013 was implemented with the object of providing food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of food at affordable price to people to live a life with dignity and for matters connected therewith. The Government implemented Targeted Public Distribution System under which foodgrains is provided to the "eligible household" at subsidised rates which includes people Below Poverty Line, including Antyodaya Anna Yojana, and Above Poverty Line households. Section 2(23) of Act of 2013 provides for "Targeted Public Distribution System", which means the system for distribution of essential commodities to the ration card holders through fair price shops.
3. Following the implementation of Act of 2013, the State Government framed Uttar Pradesh State Food Security Rules, 2015 (hereinafter called as "Rules of 2015") exercising powers under Section 40 of Act of 2013.
4. The Central Government thereafter enacted "The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (hereinafter called as "Act of 2016") for providing good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals and for matters connected therewith or incidental thereto. The validity of said Act was challenged before Supreme Court of India in case of K.S.Puttaswamy (Retired) and Another (AADHAAR) vs. Union of India and Another (2019) 1 SCC 1, and Apex Court upheld the validity of Act of 2016.
5. As the country had become self sufficient in the production of foodgrains, the necessity arose for distribution of foodgrains through Targeted Public Distribution System to the last person (Antyodaya). Act of 2013 was the step towards fulfilment of object of the Government creating a system so that the foodgrains reaches the most vulnerable section of society. Enactment of the Aadhaar Act in year 2016 was with the aim that subsidy granted from the Consolidated Fund of India reach to the most deserving and needy person, further capping the pilferage which existed in the delivery system.
6. Section 40 of Act of 2013 mandated the State Government by notification, and subject to the condition of previous publication, and consistent with the Act and rules framed by the Central Government to make rules to carry out provisions of Act of 2013.
7. Rules of 2015 was the first step by the State Government towards the achievement of fulfilment of dreams for foodgrains reaching to most vulnerable section of the society through Targeted Public Distribution System. Prior to enactment of Act of 2013, the State Governments were issuing various Government Orders from time to time exercising power under Section 3 of the Essential Commodities Act, 1955 (hereinafter called as "Act of 1955"), which was enacted for the control of production, supply and distribution of essential commodities.
8. Section 3 of Act of 1955 provided power to the State Government to issue order for controlling and regulating the production, supply and distribution of the essential commodities. It was in exercise of this power under Section 3 of Act of 1955 that U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989 was issued.
9. Thereafter came the U.P. Scheduled Commodities Distribution Order 1990 and Clause 24 of the Order provided for ''rescission' of earlier Uttar Pradesh Foodgrains and Other Essential Articles Distribution Order, 1977 and Uttar Pradesh Scheduled Commodities (Regulation of Distribution) Order, 1989.
10. The U.P. Scheduled Commodities Distribution Order 1990 occupied the field for regulating and controlling the distribution of essential commodities in the State till it was superseded by Uttar Pradesh Scheduled Commodities Distribution Order, 2004 (hereinafter called as "Order of 2004").
11. The Order of 2004, for the first time, provided for the benefit of distribution of foodgrains to the "Antyodaya families" and a classification was made between the families living Below Poverty Line (BPL) and those Above Poverty Line (APL). This Order was also issued in exercise of the power under Section 3 of Act of 1955. Clause 2(c) of Order of 2004 defined "Agent", which means, a person or a cooperative society or a Corporation of the State Government authorised to run a fair price shop under the provisions of the Order. Similarly, Clause 2(l) defined "Fair Price Shop", which means a shop set up under the orders of the State Government for the distribution of Scheduled Commodities. Clause 4 envisaged provision for ''running of fair price shop' which shall be run through such person and in such manner as the Collector, subject to the directions of the State Government may decide. Sub- clause (2) of Clause 4 provided that a person appointed to run a fair price shop under sub-clause (1) shall act as the agent of the State. Further sub-clause (3) of Clause 4 provided that a person appointed to run a fair price shop under sub-clause (1) shall sign an agreement, as directed by the State Government regarding running of fair price shop as per the draft appended to the Order.
12. The Order of 2004 further provided for various provisions for identification of families living Below the Poverty Line, ration card, quantity per unit to be prescribed, quantities that may be purchased on ration card, etc. Clause 21 provided for monitoring in accordance with the order issued by the State Government. Clause 27 was in regard to ''Penalty' for contravening any of the provisions of the Order and the punishment shall be in accordance with the orders issued by the State Government from time to time. Clause 28 provided for the ''Appeal' against the order of penalty.
13. Pursuant to enforcement of Order of 2004, various dispute arose in regard to the procedure to be followed in case of penalty being imposed upon the fair price shop dealers, contravening the provisions.
14. As there were conflicting views of various benches of this Court, the matter was referred to Full Bench in case of Puran Singh vs. State of U.P. and others 2010(3) ADJ 659, "whether an opportunity of hearing is mandatory to be given to a fair price shop agent before suspension of fair price shop agreement?" The Full Bench, after noticing the Order of 2004 as well as Government Order dated 29.7.2004, which was issued for monitoring/regulating various kind of procedure, found that proviso to the Government Order dated 29.7.2004 provided for an opportunity to the fair price shop owner before his licence was suspended. Relevant para 35 of the judgment is extracted hereas under :
"Power of suspension is centrally there but while exercising care is to be taken to the mandate of the proviso which states that the order is to be speaking one. Thus so far the power of suspension while proceeding to call upon the licencee about cancellation of the shop is concerned it is always there. It will be incorrect to hold that without preliminary enquiry in respect to a fact finding and without any opportunity the shop is not to be suspended."
15. After the decision of the Full Bench, the State Government came out with the Government Order dated 16.10.2014, which was in continuation with the earlier Government Order dated 29.7.2004, providing for the entries of ration cards to be examined besides the stock register, sale register and distribution certificate issued by the village level vigilance committee and official observer appointed for supervising distribution. Further duty was cast upon the licencing authority to examine the explanation furnished alongwith the documentary evidence by the licensee and then pass a reasoned and speaking order.
16. After the enactment of Act of 2013, and Act of 2016, the State Government having already framed the Rules of 2015, came out with the Uttar Pradesh Essential Commodities (Regulation of Sale and Distribution Control) Order, 2016 (hereinafter called as "Control Order 2016") superseding the earlier Government Order of 20.12.2004 as well as all the Government Orders issued prior to coming of this Order.
17. Control Order 2016 was issued in the light of Act of 2013 and provided for the complete mechanism for the distribution of foodgrains allotted by the Central and the State Government for distribution under the Targeted Public Distribution System. It not only provides for the identification of eligible households ration cards, lifting and distribution of foodgrains by the State, procedure for appointment of agent for fair price shop but, for the first time, system was introduced for operation of fair price shops.
18. It included the mechanism wherein competent authority is required to take prompt action in respect of any violation of condition of licence including any irregularity committed by the fair price shop owner, which may include suspension or cancellation of fair price shop licence.
19. Sub-clause (7) of Clause 8 provides for the inquiry in irregularity of distribution by a fair price shop owner, and in case licence is suspended, after inquiry, a show cause notice has to be issued by the competent authority and it is only after the reply/explanation, by the dealer is given, the same shall be examined by the officer concerned and the order is passed. Relevant Clause 8 of Order of 2016 is extracted hereas under :
"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 license 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 foodgrains received during the month, (f) opening and closing stock of foodgrains, (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 detailed description of receipt of foodgrain and other essential commodities, actual distribution during the month and remaining balance of stock to designated officer who will send 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 order 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 license including any irregularity committed by the fair price shop owner, which may include suspension or cancellation of the fair price shop owner's license.
An inquiry regarding irregularities in distribution by a fair price shop owner shall be conducted by the Designated officer or by the District Magistrate. After inquiry, if the license of fair price shop owner is suspended along with a show cause notice by the competent authority, then the reply/explanation of show cause notice by fair price shop owners will be examined by an officer at least one rank above the inquiry officer. If the preliminary enquiry had been conducted by a district level officer, then the explanation by fair price shop owners shall be examined by another district level officer.
(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.
(9) In case of suspension or cancellation of the agreement, the Competent Authority shall make alternative arrangements for ensuring uninterrupted supply of food grains 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."
20. Similarly, Clause 9 provides for monitoring by the Food Commissioner. Clause 13 of the Control Order 2016 provides for appeal against the action taken by authorities.
21. Bunch of these petitions mostly raise common grounds that the Licensing Authority and also the Appellate Authority did not afford opportunity of hearing before cancelling the license. Further, no opportunity for cross examining the witnesses, inspection of documents, non supply of inquiry report to the dealer by the Licensing Authority in proceedings for cancellation of license. Moreover, subsequent affidavits filed by the complainant in favour of the dealer is also not taken into account by the authorities.
22. In almost all the petitions ground taken is that District Licensing Authorities do not follow the procedure prescribed under Government Order dated 29.07.2004 and 16.10.2014, which requires the authorities to grant opportunity to the licensee in strict terms before proceeding to cancel the license, and various coordinate benches of this Court, relying upon the said Government Orders had proceeded to quash the order of cancellation.
23. The questions, which emerge for consideration by this Court are:
"(i) Whether after issuance of Control Order 2016, having been issued in the light of Act of 2013 and Act of 2016, the earlier Government Order of 2004 stood superseded and repealed?
(ii) Whether any benefit can be extended to the dealers/licensee of the Government Orders dated 29.7.2004 and 16.10.2014, when their license has been cancelled under the new scheme of 2016, which provides for complete mechanism in itself?"
24. I have heard S/Sri Vishal Tandon, Saurabh Pandey, Pradeep Kumar, T.Islam Arvind Prabodh Dubey, Ashok Kumar Singh, Suresh Chandra Pandey and Sri Danbeer Mishra, learned counsel for the petitioner in their respective case, Sri Manish Goyal, learned Additional Advocate General, assisted by Sri Shri Prakash Singh and Sri Shashi Kant Upadhyay, learned Standing Counsel for the respondents-State.
25. Sri Vishal Tandon, learned counsel appearing in Writ Petition No. 15420 of 2020 submitted that the State Government had issued Government Order dated 29.07.2004 for monitoring/regulating various kinds of procedure, while Order of 2004 contained the provisions of maintenance, supplies of foodgrains and other essential commodities in the State. Both these Government Orders were considered by the Full Bench of this Court in Puran Singh (supra), and the Court found that Government Order dated 29.07.2004 provided for full-fledged inquiry pursuant to show-cause notice for cancellation.
26. The State Government, thereafter, had issued Government Order on 16.10.2014 modifying the earlier Government Order dated 29.07.2004, providing that while conducting inquiry with respect to alleged irregularities committed by fair price dealer, the competent authority was required to verify entries made in distribution register with the ration cards of the card holders.
27. Secondly, recording statement of complainant/card holder and providing opportunity to cross-examine such witness was to be given for ensuring fairness and transparency. According to him, Government Order of 29.07.2004 was further modified on 16.12.2015, directing all Sub Divisional Officers and District Supply Officers to maintain a order-sheet in proceedings of suspension/cancellation of fair price shop for maintaining transparency.
28. Repealing of Order of 2004, by promulgating the Control Order 2016 would not render otiose the earlier Government Orders dated 29.07.2004, 16.10.2014 and 16.12.2015 as the Control Order 2016 did not provide any procedure/mechanism to be followed while suspending/cancelling any license.
29. State Government on 05.08.2019 had issued another Government Order wherein complete procedure for suspension/cancellation has been prescribed and earlier Government Orders occupying the field have been repealed. The said Government Order provides for recording statement of complainants/card holders and the competent authority being obliged to provide opportunity of cross-examination to license holder. Reliance has been placed upon a decision of Division Bench of this Court in case of Ranjeet vs. State of U.P. and others, (2019) 9 ADJ 704 (DB). Reliance has also been placed upon decision of co-ordinate Bench of this Court in Misc. Single No. 21538 of 2018 (Shakeel Ahamad vs. The State of U.P. through Additional Commissioner (Food), Lucknow and another, wherein this Court on 16.12.2020 had observed that district administration had not proceeded against any of the observers who failed to discharge their duty of ensuring the proper distribution of essential commodities amongst the beneficiaries.
30. He further contended that once the mechanism has been provided in the Control Order 2016 for the appointment of vigilance committee which is constituted under Rule 9 of Rules of 2015 for supervising the functioning of targeted public distribution system in the State, no action is being taken by the State authorities against such members of the vigilance committee which is under direct control of the Food Commissioner and is required to monitor the entire distribution of foodgrains under Clause 9 of Control Order 2016.
31. According to him, if the licensee is held liable for the shortfall in distribution, then he alone cannot be penalised for such action because the Control Order 2016 as well as Rules of 2015 provide for monitoring of such licensee through the mechanism provided by appointment of vigilance committee.
32. Elaborating further he contended that the observer so appointed, after completion of distribution by the licensee, issues a distribution certificate under his signature which forms the basis of lifting of foodgrains from the godown for the next month. Once such certificate is issued by the observer and the quota for the next month is lifted by the dealer, the question of short distribution of foodgrains or any irregularity does not arise.
33. Emphasis has been laid that the entire public distribution system is being monitored and observed by the designated officers of the State Government, who at every step ensure that the foodgrains which are lifted by the dealer reach the ultimate beneficiary and necessary check and balance has been provided at every stage so as to only blame dealer and not the officials of the State Government who are entrusted with the duty of overseeing and managing the entire distribution system would be unfair and is only to harass the dealers as has been done in the present case.
34. Sri Tandon next contended that Section 24 of the U.P. General Clauses Act, 1904 saved the Government Orders dated 29.07.2004, 16.10.2014 and 16.12.2015 after repeal of the Order 2004 as there was nothing inconsistent in the said Order with the Control Order 2016. Relevant provision of Section 24 runs as under:-
"24. Continuation of appointments, notifications, orders etc. issued under enactments repealed and re-enacted:--Where any enactment is repealed and re-enacted by an ( Uttar Pradesh ) Act, with or without modification, then, unless it is otherwise expressly provided, any appointment, ( or statutory instrument or form) made or issued under the repealed enactment shall, so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment, ( or statutory instrument or form) made or issued under the provisions so re-enacted."
35. He also referred to definition of the term 'Enactment' as defined in section 2(14) of the above Act, which runs as under:
"Enactment"--"Enactment" shall include a regulation (as hereinafter defined ) and any Regulation of the Bengal, Madras or Bombay Code, and shall also include any provisions contained in any Act or in any such Regulation as aforesaid."
36. He submitted that the term 'Enactment' as used in section 24 includes regulation issued by the Government in exercise of the powers conferred under the enactment and so the aforesaid G.Os. issued under the Control Order of 1990 which are not inconsistent with the provisions of re-enacted Control Order of 2004 shall continue in force and shall be deemed to have been made and issued under the re-enacted Order.
37. He relied upon decision of Division Bench in case of Ram Murat vs. Commissioner, Azamgarh Division, (2006) 5 ADJ 396 and also Full Bench decision in case of Indrapal Singh vs. State of U.P., 2013 (10) ADJ 612 (F.B.).
38. Learned counsel has also relied upon decision of co-ordinate Bench in case of Ram Prakash vs. State of U.P. (2017) 7 ADJ 126, Rajneesh Kumar Tyagi vs. State of U.P. and others, Writ Petition No. 30912 of 2009, decided on 19.01.2010, Ashok Kumar Tiwari vs. State of U.P. and others, Writ-C No. 12737 of 2013, decided on 28.11.2014, Ajay Pal Singh vs. State of U.P. and others, (2018) 7 ADJ 301, Aajad Kumar vs. State of U.P. and others, Writ-C No. 46648 of 2017, decided on 23.10.2017, Shakeel Ahamad vs. State of U.P. and another, Misc. Single No. 21538 of 2018, decided on 16.12.2020 and Smt. Santara Devi vs. State of U.P. and others (2016) 2 ADJ 70.
39. Sri Saurabh Pandey, learned counsel appearing in Civil Misc. Writ Petition No. 40982 of 2019 submitted that aim and object of the Act of 2013 is similar to the Essential Commodities Act, 1955 with the only change that now right of an individual has been solidified. According to him, an individual has a right to receive his entitlement but there needs to be a mechanism for realisation of the same, and thus comes the importance of fair price dealer without whom the dream of food security cannot be fulfilled. He stressed that it is very imperative for the State that fair price dealers play quintessential role in furtherance of the aim and objective of the Act of 2013 to ensure access to adequate quantity of food at affordable prices to people to live with dignity. According to him, without active participation of the fair price dealers, the aim and objective cannot be achieved, and thus in case both individual as well as dealer are aligned, the problem of providing food can be achieved.
40. According to him, Government Order of 29.07.2004 provided a comprehensive procedure with respect to suspension/cancellation of the license. It was considered by the Full Bench in Puran Singh (supra), where Court mandated full-fledged inquiry after issuance of show-cause notice and the said decision guided various subsequent decisions of this Court. This led to the issuance of Government Order dated 16.10.2014 modifying the Government Order of 29.07.2004 providing further for tallying the register of dealer with the ration card of the individual making the allegation of irregularity in distribution of the foodgrains and further providing cross-examination of the person alleging such irregularity.
41. Subsequently, State Government on 05.08.2019 after enactment of Act of 2013 and Control Order 2016 had issued a Government Order providing for complete procedure for suspension/cancellation which was issued keeping in mind the said Act. According to him, Control Order of 2016 does not provide for any procedure for suspension and cancellation.
42. He next submitted that the decision of co-ordinate Bench in case of Meena Devi vs. State of U.P. and others, (2018 ) 10 ADJ 385 had taken note of the fact that after the enactment of Act of 2013 and Control Order 2016, the decisions rendered are per incuriam but not the subsequent decisions.
43. Adding to the argument made by Sri Tandon, learned counsel submitted that that distribution certificate issued by the observer (vigilance committee) is a presumption in favour of the dealer regarding distribution of foodgrains until and unless some material is brought to rebut such presumption based on Section 114(e) of the Indian Evidence Act, 1872.
44. According to him, principles of natural justice require that a proper opportunity of hearing should be accorded to licensee before his license is put under suspension or cancelled. The authorities while suspending/cancelling, act as a quasi judicial authority and should act in a transparent manner affording opportunity of hearing providing the documents relied upon, providing opportunity to question or cross-examine the complainant and thereby holding a full-fledged inquiry before the license is suspended or cancelled.
45. According to him, model/draft agreement executed by dealer with the State also provides for procedure to be adopted for cancellation of the dealership/license which includes opportunity to see the evidence against him and permit him to present his case. The opportunity which is to be given includes the opportunity to examine the witnesses and cross-examine them. Reliance has been placed upon decision of the Apex Court in case of State of Kerala vs. K.T. Shaduli Yusuf and others, (1977) 2 SCC 777 (Paragraph No. 4). He also relied upon the decision in case of Smt. Kaushar Jahan vs. State of U.P., Writ-C No. 16372 of 2018, decided on 23.05.2018.
46. Learned counsel emphasized that principles of natural justice is applicable by implication in administrative and quasi judicial matter, and its execution should be express and clearly provided for as held by Apex Court in case of Maneka Gandhi vs. Union of India and others, (1978) 1 SCC 248 (Paragraph Nos. 9, 10, 11, 12, 14 and 93), A.K. Kraipak vs. Union of India, (1969) 2 SCC 262 (Paragraph Nos. 13 and 19). According to him, right accrues in favour of the person to whom license is granted, and deprivation of such right without a hearing is violation of principles of natural justice and thus a vested right having accrued in favour of the dealer cannot be taken a way in such a casual manner.
47. Reliance has been placed upon decision of the Apex Court in case of Baraka Overseas Traders vs. Director General of Foreign (2006) 8 SCC 103 (Paragraph Nos. 9 and 10). He next contended that as agreement provides for duties of a dealer, then there are also the corresponding rights, and the fairness demands that procedure adopted with respect to suspension and cancellation should be fair and transparent.
48. It was lastly contended that action of State authorities and its officials has been very arbitrary and casual while dealing with matters of suspension and cancellation. Simply on frivolous complaints of few card holders, the authorities act in an arbitrary manner and license is immediately suspended without any opportunity of hearing or providing any preliminary report or the documents relied by such authorities in dealing with the license of the dealer. According to Sri Pandey, authorities proceed on vague allegations and where there are hundreds of card holders attached with a fair price shop only on a complaint of a few card holders, the authorities proceed to suspend and cancel the license.
49. Neither any inquiry report is given nor the complaint on which the action is initiated is supplied nor such complainants are confronted for cross-examination so as to arrive at conclusion and cancel the license which was granted pursuance to the agreement executed between the dealer and the State. According to him, Act of 2013 has taken care of the card holder who has a right of foodgrains, but the said right does not curtail the protection granted under the agreement before any action is taken by the State authorities. The State cannot blindly on the complaint assuming the complaint to be gospel truth without adhering to the principles of natural justice cancel the license.
50. Sri Manish Goyal, Additional Advocate General submitted that the entire bunch of cases and the argument raised by petitioners' counsels is confined to the fact that opportunity of hearing, cross examination, non supply of inquiry report and affidavits filed by the complainants having not been given to the dealer in proceedings for cancellation of licence vitiates the entire procedure being in violation of different Government Orders such as of 29.07.2004, 16.10.2014 and 16.12.2015.
51. Further, issuance of Control Order 2016 though deriving its power under Section 3 of the Act of 1955 was issued to fulfil the object of the Act of 2013 as well as Act of 2016. The State Government in furtherance of Article 47 of the Constitution of India which are the directive principle, had tried to create a system through Targeted Pubic Distribution System so that the foodgrains/essential commodities reaches the last person/Antyodaya and the object and scheme of the Central Government is fulfilled capping the pilferage and the loophole in the distribution system.
52. He pointed out that the Control Order 2016 has its root from the Act of 2013 which was enacted with the object of distribution of foodgrains at subsidised rate to the household living Below the Poverty Line as well as Above the Poverty Line. He invited the attention of the Court to definition of "eligible household" under Section 2(3); "fair price shop" under Section 2(4); "priority households" under Section 2(14); "ration card" under Section 2(16); "social audit" under Section 2(20); "Targeted Public Distribution System" under Section 2(23); and "Vigilance Committee" under Section 2(24) of the Act of 2013.
53. He next contended that Section 3 of the Act of 2013 provides for right to receive foodgrains at subsidised rates by persons belonging to eligible households under Targeted Public Distribution System. Section 7 envisages for the implementation of schemes for realisation of entitlements by the State Government. Section 10 provides for the State Government to prepare guidelines and to identify priority households. Section 15 provides for District Grievance Redressal Officer and the appointment has to be made by State Government for appointing such officers at the District Level.
54. He then contended that the State Government thereafter framed U.P. State Food Security Rules, 2015 which were issued in exercise of power under Section 40 of the Act of 2013. Chapter III of the Rules of 2015 provides for ''Grievance Redressal System' and sub-rule (4) of Rule 5 provides the procedure how the District Grievance Redressal officer shall deal with the complaint made to him. Sub-rule (4)(c) of Rule 5 provides that in case the officer is satisfied that if prima facie ground exist, he shall proceed by issuing notice and fixing date, time and place. Sub-rule (4)(d) of Rule 5 provides that after taking evidence as adduced before him, he shall hear the party and proceed with the complaint. Rule 7 provides for an appeal against the order of District Grievance Redressal Officer. Rule 9 provides for Vigilance Committee that has to be constituted by the State Government at Fair Price Shop, Block, District and State level. Vigilance Committee has to meet once in ever quarter of a calendar year. Rule 10 further provides for ''Social Audit' by a local authority authorised by the State Government.
55. He then contended that Central Government enacted Act of 2016, which came for good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Funds of India or by the Consolidated Funds of the State.
56. The subsidies, which were granted by the Central Government and the State Government is now being sent directly to the individual after creation of Aadhaar System and every individual was provided with a unique number or the Aadhaar number. Section 7 of the Act of 2016 made it mandatory for the receipt of certain subsidies, benefits and services that a person should have a Aadhaar number. Thus the twin effect of the Act of 2013 and 2016 created a system whereby subsidy given by the respective Governments in form of foodgrains and other essential commodities was to reach the individual/household/persons standing at the last.
57. The State Government therefore issued the Control Order 2016 keeping in mind the Act of 2013 and 2016 with the object and motive of providing the foodgrains and essential commodities to every eligible household/individual who has been given right to receive foodgrains at a subsidised price under Section 3 of the Act of 2013.
58. The definition clause of Control Order 2016, Clauses 2(d), 2(e), 2(m), 2(r), 2(w) define the term "Antyodaya Anna Yojna", "Antyodaya Households", "Eligible Households", "Food Security Act" and "Social Audit", which are extracted hereas under :
(d) "Antyodaya Anna Yojana" means the scheme by the said name launched by the Central Government on the 25th day of December, 2000 and modified from time to time."
(e) "Antyodaya Households" means those households identified by the State Government to receive food grains under the Antyodays Anna Yojana."
(m) "Eligible Households" means all those households who have been identified for the purpose under the National Food Security Act of 2013."
(r) "Food Security Act" means the National Food Security Act, 2013 (20 of 2013).
(w) "Social Audit" means the process in which people collectively monitor and evaluate the planning and implementation of Targeted public Distribution System in accordance with Section 10 of Uttar Pradesh Food Security Rules, 2015."
59. He next invited attention of the Court to Clause 6 of the Control Order, 2016, which is in regard to ''Distribution of food grains by States'. Clause 7, which is in regard to appointment and regulation of fair price shops and how a person is appointed to run a fair price shop, and sub-clause 2(iii) of Clause 7 provide that after an execution of an agreement between the dealer and State Government, the said appointment was to come in force.
60. Clause 8 of Control Order 2016, according to Sri Goyal is the most relevant clause wherein a complete mechanism has been provided for appointment of fair price shop and sub-clause (7) of Clause 8 provides action taken by competent authority in case of any violation of condition of licence including any irregularity committed by the dealer which includes suspension or cancellation of the licence. The said clause provides for an inquiry into irregularity in distribution by the dealer which is conducted by a designated officer or by District Magistrate and after inquiry, if some irregularity is found, the licence of fair price shop shall be suspended along with a show cause notice, and, the dealer is required to submit a reply/explanation to the show cause notice and it is only after examination of reply by the officer concerned that any order is passed. He then contended that the earlier order of 2004 did not contain such a provision and the external aid of Government of 29.7.2004 and 16.10.2014 was taken where a licence was suspended or cancelled.
61. Reliance placed upon decision of Puran Singh (supra) is not applicable in the present case as Control Order 2016 provides complete mechanism against situation arising out of, in case of suspension or cancellation.
62. As the Order of 2004 was silent as to the inquiry or show cause notice or submission of any reply/examination by the designated officer, the Full Bench relying upon another Government Order dated 29.07.2004 had held that an opportunity of hearing was mandatory before licence being suspended. But in the present scenario, Control Order 2016 is a complete solution.
63. Accordingly to Sri Goyal, as the Control Order of 2004 was silent, the Government Order dated 16.10.2014 was issued pursuant to the decision of Full Bench as well as direction of this Court in the year 2012, but the present Control Order 2016 takes care of all these facts and the repeal clause providing for repeal of all earlier Government Orders, the argument of petitioner's counsel cannot be sustained.
64. He next contended that the Act of 2013 mandated that right to food is the vested right of an individual as well as eligible household, and the dealers do not have any vested right, as their existence, is under an agreement, and they are acting as an agent of the State.
65. The Central Act has been enacted with the motive of providing subsidised foodgrains to the last person of the society so as to eliminate hunger and poverty, and the State with the help of its agent/dealer is trying to realise its goal. Any violation of terms of agreement has to be dealt with the provision of the Control Order 2016. He then contended that the inquiry is limited to the violation of condition of licence and the irregularity.
66. An agreement executed between the petitioner and the State Authorities was placed before the Court and Clause 19 of agreement reads as under :
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67. He then contended that a mechanism for monitoring has been provided in clause 9 where the Food Commissioner shall ensure the regular inspection of fair price shop. Clause 13 provides for an appeal in case any person is aggrieved by the order of designated authority or competent authority or in relation to action or subject covered under the Act of 2013. Clause 19 is the validation clause. Clause 20 is the repealing provision, which is extracted hereas under :
"20. Provisions of the order to prevail over previous orders of State Government- The provisions of this order shall have effect not withstanding anything to the contrary contained in any order made by the State Government before the commencement of this order except as respects anything done, or omitted to be done thereunder before such commencement."
68. Sri Goyal then placed before the Court the judgment of Apex Court in K.S.Puttaswamy (supra) i.e. Aadhaar case wherein the Apex Court while upholding the validity of Act of 2016 had held that there is a paradigm shift in addressing the problem of security and eradicating extreme poverty and hunger. The shift is from the welfare approach to a right based approach. As a consequence, right of everyone to adequate food no more remains based on Directive Principles of State Policy (Article 47), though the said principles remain a source of inspiration. He also contended that in the Aadhaar judgment, the Court also observed that there are rampant corruption at various levels in implementation of benevolent and welfare schemes which has deprived the actual beneficiaries in receiving subsidies, benefits and services which get frittered away though on papers, it is shown that they are received by the persons for whom they are meant. There have been cases of duplicate and bogus ration cards, BPL cards, LPG connections etc. Reliance has been placed upon paragraphs 19, 62, 63, 64, 314, 315, 318, 330, 333, 361, 362, 466, 467 and 468 of the judgment.
69. Learned Additional Advocate General, also placed before the Court notification dated 17th August, 2015 issued by Ministry of Consumer Affairs, Food and Public Distribution, exercising power under Clause (e) of sub-section (2) of Section 39 read with Clause (d) of sub-section (4) of Section 22 of the Act of 2013, called "The Food Security (Assistance to State Governments) Rules, 2015.
70. Rule 2(a) thereof defines ''Aadhaar Number', 2(b) defines ''Act' means, National Food Security Act, 2013, Section 2(g) ''Point of sale device', means a device to be installed and operated at fair price shops for identification of entitled persons and households for delivery of foodgrains, based on ''Aadhaar number' or other authentication tools, specified by Central Government from time to time.
71. According to him, the Central Rules of 2015 having been framed after consultation with the State Government, under the Act of 2013 for providing the foodgrains and essential commodities directly under the supervision of Central and the State Government. Help of E Pos Machine was taken so that maximum pilferage can be capped, and distribution be monitored.
72. However, according to him, the fair price shop dealers started getting the thumb authentication of the card holders, but the entire foodgrains was not being provided to them, which has resulted in many of the complaints coming with the district authorities. He further invited attention to Rule 3, which is the time limit prescribed for allocation of foodgrains. Rule 5 thereof provides ''duty of the State Governments' and Rule 7, which is the ''Norm and pattern of Central assistance', provides for 50% as the Central share to the State of U.P. and rest 50% by the State Government. Rule 8 provides for ''advance payment of margins to fair price shop dealers'.
73. Reliance has also been placed upon decision of Apex Court in case of State of West Bengal and others vs. R.K.B.K. Limited and Another (2015) 10 SCC 369. Relevant paras 24 and 25 of the judgment are extracted hereas under :
"24. We have referred to the said passage of Peerless case, for the Control Order was brought into force for maintenance of supplies and for securing the equitable distribution and availability of kerosene at fair prices in West Bengal. It has controlling measures and it subserves the public purpose. The intent of the Control Order is to totally prohibit creation of any kind of situation which will frustrate the proper distribution of kerosene oil. The purpose of any Act or Rule or Order has its own sanctity. While interpreting the same, the text and context have to be kept in mind. In this regard, we may usefully refer to an authority in Workmen v. Dimakuchi Tea Estate, AIR 1958 SC 353, wherein the three-Judge Bench while interpreting the expression "any person" occurring in Section 2(k) of the Industrial Disputes Act, 1947 observed that the definition clause must be read in the context of the subject matter and scheme of the Act, and consistently with the objects and other provisions of the Act. Elaborating further, the Court proceeded to state: (Workmen vs. Dimakuchi Tea Estate, AIR 1958 SC 353 p. 356, para 9)
"9. .... It is well settled that:
"the words of a statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained". (Maxwell, Interpretation of Statutes, 9th Edn., p. 55).
25. Keeping in view the aforesaid rule of interpretation, we are constrained to think that it would be incongruous to hold that even when the licence of an agent at the State level is granted and issued by the Director, a District Magistrate, as defined in paragraph 3(e) of the Control Order, in exercise of concurrent jurisdiction can suspend or cancel the State level licence. Be it noted, as per Section 21 of the General Clauses Act, power to issue notification/ order/rules/bye-laws, etc. includes the power to amend/ vary or rescind. Though the said provision is not applicable, yet it is indicative that generally unless the statute or rule provides to the contrary, either expressly or impliedly, issuing or appointing authority would also exercise the right to cancel or suspend the licence. As has been stated earlier, on a cursory reading it may appear that paragraph 9 confers concurrent jurisdiction. The said paragraph deals with suspension or cancellation of licence and is a composite paragraph, which applies to licence granted to an agent as well as the dealer. It refers to the power of a Director and District Magistrate having jurisdiction. The words "District Magistrate having jurisdiction" are also used in paragraph 6. The expression "District Magistrate having jurisdiction" reflects the legislative intent that District Magistrate having jurisdiction under paragraph 9 would be the same District Magistrate or authority which has the power to grant licence to a dealer in Form B under paragraph 6. Read in this manner, we have no hesitation in holding that it is the Director alone who could have issued the show cause notice under paragraph 9 and has the authority and jurisdiction to pass an order in terms of paragraph 9 of the Control Order. The earlier notice issued by SCFS has to be regarded at best a show cause notice to ascertain and affirm facts alleged and it ensured a response and reply from the first Respondent. The said notice by SCFS could not have culminated in the order under paragraph 9, for he has no authority and jurisdiction to pass an order suspending or cancelling the licence. Therefore, the matter was rightly referred to the Director for action, if required, in terms of paragraph 9 of the Control Order.
74. He also referred to the decision of coordinate bench of this Court dated 18.10.2019 in Writ -C No.61939 of 2015 (Lakhan Singh vs. State of U.P. and others) and relied upon paras 14 to 20 thereof, which are extracted hereas under :
"14. It may also be taken note of that the commodities which are being distributed through the public distribution system are essential commodities within the meaning of Section 2(a) of the Act, 1955. The 1955 Act was enacted in the interest of general public for control of the production, supply and distribution of, and trade and commerce, in certain commodities. It was enacted by the Parliament in exercise of concurrent jurisdiction under Entry 33, List III, Schedule VII of the Constitution which reads as under:-
"33. Trade and commerce in, and the production, supply and distribution of,--
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(b) foodstuffs, including edible oilseeds and oils;
(c) cattle fodder, including oilcakes and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute."
15. The objectives of the scheme of distribution of essential commodities in terms of the Control Orders issued under the Act, 1955 were succinctly laid down in the case of Kallu Khan Vs. State of U.P. & Anr. 2008 (6) ADJ 453 (DB) in the following terms:-
"19. It would be appropriate to consider the basic idea of distribution of essential commodities under the 1955 Act and the system of appointment of agents in furtherance of discharge of the aforesaid function. It cannot be disputed that even before 73rd Amendment of the Constitution the Government has undertaken the responsibility of distribution of essential commodities to public at large at controlled or fair price. The purpose of the said responsibility is obvious. The majority of the citizens in the country live either below poverty live or almost at par or little above thereof. They are not able to meet their two times meals by the meagre income they earn and, therefore, the market forces, if are allowed to operate freely without any protection to such persons, probably majority of such people would be forced to die of starvation and they may not be able to survive at all. This experience we had even before independence and immediately after independence when the hoarders created a situation of scarcity of food items causing virtual revolution in different parts of the country at times. Various social and welfare measure were taken by the then Government and one of the major decision taken with the intervention of Parliament is enactment of 1955 Act conferring power upon the Government to control production, supply and distribution of, and trade and commerce in certain commodities, namely, essential commodities as defined under Section 2(1) of 1955 Act. Therefore, the basic idea and intention of the legislature under the Act is to make available essential commodities to the public at large at fair price except of the cases where the availability and equitable distribution would be necessary for defence of India or for any efficient conduct of military operations. The Act intends to provide welfare measure for availability of essential commodities to public at large at fair price and rest of the machinery or mechanism is incidental for achieving the aforesaid goal. The appointment of fair price shop dealers, therefore, as such, is not the primary objective of 1955 Act but it is a channel by which the objective of making essential commodities available to public at large at fair price is to be achieved. It is always permissible and open to the Government to make the essential commodities available to public at large at fair price through the agencies or instrumentalities of its own namely, its own officers or officials or by creating a department or alike. Simultaneously, instead of undertaking the said job on its own it can discharge the aforesaid obligation through private persons or bodies by appointing them as its agents. Bereft of the authority conferred upon such agents by the Government for distribution of essential commodities at fair price, such persons had no fundamental or legal right of dealing with such essential commodities on behalf of the Government to distribute to public at large the essential commodities at fair prices, though on their own, in their private capacity, it is always open to them to make the commodities which are essential commodities under the Act available to public at large at fair price without having any corresponding burden upon the Government if there is no otherwise prohibition under any other law and the statutory provisions otherwise controlling the production, storage etc. of such essential commodities are observed by them..."
16. It may be apposite to refer to the provisions of Part IX of the Constitution introduced in terms of 73rd Constitutional Amendment whereunder provisions pertaining to "Panchayat" were inserted providing for its constitution, composition, reservation of seats, duration of Panchayats, disqualification for membership, powers, authority and responsibilities of Panchayats, elections to the Panchayats etc. The aforesaid 73rd Amendment of the Constitution came into force on 24.04.1993. For the purpose of present case it would be appropriate to refer Article 243-G which reads as under:-
"243G. Powers, authority and responsibilities of Panchayats.--Subject to the provisions of the Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to--
(a) the preparation of plans for economic development and social justice;
(b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule."
17. The Eleventh Schedule as referred to in Article 243G contains a list of the matters which may be entrusted to the Panchayats and item 28 thereof reads as under:-
"28. Public distribution system."
18. It would be important to notice at this stage that even prior to 73rd Amendment, Village Panchayat system was already recognised and well established in the State of Uttar Pradesh and was governed by U.P. Panchayat Raj Act, 1947. Consistent with the amendment made in the Constitution, the Act of 1947 was also amended and Section 15 which provides for functions of Gram Panchayat was also substituted by U.P. Act No.9 of 1994. It would be appropriate to reproduce the relevant part of Section 15 as under:-
"15(xxix) Public distribution system:
(a) Promotion of public awareness with regard to the distribution of essential commodities.
(b) Monitoring the public distribution system."
19. The objectives of the public distribution system and its importance in the scheme of distribution of essential commodities to the public at large was emphasized in Gopi Vs. State of U.P. & Ors. 2007(6) ADJ 231 (DB) in the following terms:-
"25. Realising the importance of the Public Distribution System, Parliament while bringing about the 73rd constitutional amendment included the Public Distribution System as one of the primary functions of the Gram Panchayat and it has been incorporated in Article 243-G of Part 9 of the Constitution. The Public Distribution System is obviously a avowed function of the State in order to ensure the distribution of essential commodities fairly. The object is clearly to provide benefit to the public at large in order to ensure supply of essential commodities which is necessary for the sustenance of daily life. The aforesaid object, therefore, has to be fulfilled keeping in view the intention of the legislature which is to promote public awareness and ensure distribution of essential commodities. In essence, the object is to provide benefit to the public at large. As a necessary corollary to the same, the object is not to set up any trade for the benefit of any individual. It may be that by virtue of this licensing system, an individual also gets the opportunity to benefit himself by setting up a fair price distribution unit. However, such a licence does not fall within the category of a fundamental right to carry on trade and business as understood under Article 19(1)(g) of the Constitution of India. The Government Order which has been issued under the provisions of the Essential Commodities Act, is to regulate the supply and distribution of essential commodities fairly. The suspension of such a licence, pending inquiry is a step in the process of eliminating any such discrepancy which affects the public at large. The authorities while proceeding to suspend a licence, have the authority to attach a fair price shop to another Agency, in order to ensure that the public at large does not suffer on account of such suspension. Thus, viewed from any dimension, the power of suspension if exercised bonafidely in public interest does not by itself cause prejudice to a licensee inasmuch as he has a remedy by filing an appeal against such an order and even otherwise upon the satisfaction of the authority after hearing the objections, the authority can still restore the licence subject to a satisfactory reply being submitted by the licensee.
20. The aforementioned judgments in the case of Kallu Khan Vs. State of U.P. & Anr. and Gopi Vs. State of U.P. & Ors. were subsequently approved by a Full Bench of this Court in Puran Singh Vs. State of U.P. & Ors. 2010 (3) ADJ 659 (FB)."
75. Lastly it was contended that the petitioner had not taken any such ground for cross-examination in his appeal and no vested right accrues in favour of the petitioner as his case rests on the agreement executed between the parties. Moreover, the petitioner was provided sufficient opportunity to submit his reply and it was only after the consideration of his reply that the authorities had proceeded to cancel his licence. The grounds taken in appeal has been addressed by the appellant authority, and writ petition under Article 226 of the Constitution of India is not maintainable.
76. I have heard the rival submissions and perused the material on record.
77. In this 21st Century, the Government recognised the importance of food for eliminating poverty and hunger from the Society and enacted Act of 2013 recognising ''right to food' of an individual and household.
78. The focus shifted, and right of an individual was recognised for the first time for getting the foodgrains from the central pool distributed through State Government. The Government then in order to ensure that it reaches the last person through Targeted Delivery System, enacted Act of 2016, making Aadhaar number mandatory for getting the foodgrains.
79. It was on this central theme that State Government came out with a new Control Order, 2016 superseding and repealing all the earlier Government Orders issued in exercise of power under Section 3 of Act of 1955, providing a complete mechanism for fulfilling the dream of eliminating hunger and poverty.
80. The Act of 2016 was approved by the Apex Court in K.S.Puttaswamy's case (supra) holding that it empower the marginalised Section of the Society, particularly those who are illiterate and living in abject poverty or without any shelter. The Hon'ble Court recognised that there is a paradigm shift in addressing the problem of security and eradicating extreme poverty and hunger. The shift is from the welfare approach to a rights-based approach. As a consequence, right of everyone to adequate food no more remains based on directive principles of State policy (Article 47), though the said principle remain source of inspiration. Relevant paras 314 and 315 of the judgment are extracted hereas under :
"314. It may be highlighted at this stage that the Petitioners are making their claim on the basis of dignity as a facet of right to privacy. On the other hand, Section 7 of the Aadhaar Act is aimed at offering subsidies, benefits or services to the marginalised Section of the society for whom such welfare schemes have been formulated from time to time. That also becomes an aspect of social justice, which is the obligation of the State stipulated in Para IV of the Constitution. The rationale behind Section 7 lies in ensuring targeted delivery of services, benefits and subsidies which are funded from the Consolidated Fund of India. In discharge of its solemn Constitutional obligation to enliven the Fundamental Rights of life and personal liberty (Article 21) to ensure Justice, Social, Political and Economic and to eliminate inequality (Article 14) with a view to ameliorate the lot of the poor and the Dalits, the Central Government has launched several welfare schemes. Some such schemes are PDS, scholarships, mid day meals, LPG subsidies, etc. These schemes involve 3% percentage of the GDP and involve a huge amount of public money. Right to receive these benefits, from the point of view of those who deserve the same, has now attained the status of fundamental right based on the same concept of human dignity, which the Petitioners seek to bank upon.
315. The Constitution does not exist for a few or minority of the people of India, but "We the people". The goals set out in the Preamble of the Constitution do not contemplate statism and do not seek to preserve justice, liberty, equality an fraternity for those who have the means and opportunity to ensure the exercise of inalienable rights for themselves. These goals are predominantly or at least equally geared to "secure to all its citizens", especially, to the downtrodden, poor and exploited, justice, liberty, equality and "to promote" fraternity assuring dignity. Interestingly, the State has come forward in recognising the rights of deprived Section of the society to receive such benefits on the premise that it is their fundamental right to claim such benefits. It is acknowledged by the Respondents that there is a paradigm shift in addressing the problem of security and eradicating extreme poverty and hunger. The shift is from the welfare approach to a right based approach. As a consequence, right of everyone to adequate food no more remains based on Directive Principles of State Policy (Article 47), though the said principles remain a source of inspiration. This entitlement has turned into a Constitutional fundamental right. This Constitutional obligation is reinforced by obligations under International Convention. The Universal Declaration of Human Rights (Preamble, Article 22 & 23) and International Covenant on Economic, Social and Cultural Rights to which India is a signatory, also casts responsibilities on all State parties to recognize the right of everyone to adequate food. Eradicating extreme poverty and hunger is one of the goals under the Millennium Development Goals of the United Nations. The Parliament enacted the National Security Food Act, 2013 to address the issue of food security at the household level. The scheme of the Act designs a targeted public distribution system for providing food grains to those below BPL. The object is to ensure to the people adequate food at affordable prices so that people may live a life with dignity. The reforms contemplated Under Section 12 of the Act include, application of information and communication technology tools with end to end computerization to ensure transparency and to prevent diversion, and leveraging Aadhaar for unique biometric identification of entitled beneficiaries. The Act imposes obligations on the Central Government, State Government and local authorities vide Chapter VIII, IX and X. Section 32 contemplates other welfare schemes. It provides for nutritional standards in Schedule II and the undertaking of further steps to progressively realize the objectives specified in Schedule III."
81. The Apex Court further recognised that State in order to fulfil its duty as per the Charter of Directive Principles contained in Part IV of the Constitution, the Aadhaar Act recognises various socio-economic rights of poor and marginalised section of the Society. Relevant paras 330 and 333 of the judgment are extracted hereas under :
"330. The purpose of citing aforesaid judgments is to highlight that this Court expanded the scope of Articles 14 and 21 of the Constitution by recognising various socio-economic rights of the poor and marginalised Section of the society and, in the process, transforming the constitutional jurisprudence by putting a positive obligation on the State to fulfill its duty as per the Charter of Directive Principles of the State Policy, contained in Part IV of the Constitution. It is to be kept in mind that while acknowledging that economic considerations would play a role in determining the full content of the right to life, the Court also held that right included the protection of human dignity and all that is attached to it, 'namely, the bare necessities of life such as adequate nutrition, clothing and shelter and facilities for reading, writing and expressing oneself in diverse forms' (See Francis Coralie Mullin v. The Administrator, UT of Delhi (1981) 1 SCC 608). It is, thus, of some significance to remark that it is this Court which has been repeatedly insisting that benefits to reach the most deserving and should not get frittered mid-way. We are of the opinion that purpose of Aadhaar Act, as captured in the Statement of Objects and Reasons and sought to be implemented by Section 7 of the Aadhaar Act, is to achieve the stated objectives. This Court is convinced by its conscience that the Act is aimed at a proper purpose, which is of sufficient importance."
279. Section 7, which provides for necessity of authentication for receipt of certain subsidies, benefits and services has a definite purpose and this authentication is to achieve the objectives for which Aadhaar Act is enacted, namely, to ensure that such subsidies, benefits and services reach only the intended beneficiaries. We have seen rampant corruption at various levels in implementation of benevolent and welfare schemes meant for different classes of persons. It has resulted in depriving the actual beneficiaries to receive those subsidies, benefits and services which get frittered away though on papers, it is shown that they are received by the persons for whom they are meant. There have been cases of duplicate and bogus ration cards, BPL cards, LPG connections etc. Some persons with multiple identities getting those benefits manifold. Aadhaar scheme has been successful, to a great extent, in curbing the aforesaid malpractices. By providing that the benefits for various welfare schemes shall be given to those who possess Aadhaar number and after undergoing the authentication as provided in Section 8 of the Aadhaar Act, the purpose is to ensure that only rightful persons receive these benefits. Non-action is not costly. It's the affirmative action which costs the Government. And that money comes from exchequer. So, it becomes the duty of the Government to ensure that it goes to deserving persons. Therefore, second component also stands fulfilled.
82. The Apex Court while upholding the validity of the Act of 2016 had laid emphasis on the benefit and welfare measures which were going to be extended to the marginalised section of the Society, considering the benefit extended by the State reaching the poor, held as under :
"466. As all these three kinds of welfare measures are sought to be extended to the marginalised Section of society, a collective reading thereof would show that the purpose is to expand the coverage of all kinds of aid, support, grant, advantage, relief provisions, facility, utility or assistance which may be extended with the support of the Consolidated Fund of India with the objective of targeted delivery. It is also clear that various schemes which can be contemplated by the aforesaid provisions, relate to vulnerable and weaker Section of the society. Whether the social justice scheme would involve a subsidy or a benefit or a service is merely a matter of the nature and extent of assistance and would depend upon the economic capacity of the State. Even where the state subsidizes in part, whether in cash or kind, the objective of emancipation of the poor remains the goal.
467. The Respondents are right in their submission that the expression subsidy, benefit or service ought to be understood in the context of targeted delivery to poorer and weaker Sections of society. Its connotation ought not to be determined in the abstract. For as an abstraction one can visualize a subsidy being extended by Parliament to the King; by Government to the Corporations or Banks; etc. The nature of subsidy or benefit would not be the same when extended to the poor and downtrodden for producing those conditions without which they cannot live a life with dignity. That is the main function behind the Aadhaar Act and for this purpose, enrolment for Aadhaar number is prescribed in Chapter II which covers Sections 3 to 6. Residents are, thus, held entitled to obtain Aadhaar number. We may record here that such an enrolment is of voluntary nature. However, it becomes compulsory for those who seeks to receive any subsidy, benefit or service under the welfare scheme of the Government expenditure whereof is to be met from the Consolidated Fund of India. It follows that authentication Under Section 7 would be required as a condition for receipt of a subsidy, benefit or service only when such a subsidy, benefit or service is taken care of by Consolidated Fund of India. Therefore, Section 7 is the core provision of the Aadhaar Act and this provision satisfies the conditions of Article 110 of the Constitution. Upto this stage, there is no quarrel between the parties.
468. In this context, let us examine provisions of Sections 23(2)(h), 54(2)(m) and 57 of the Aadhaar Act. Insofar as Section 23 is concerned, it deals with powers and functions of the Authority. Sub-section (1) thereof says that the Authority shall develop the policy, procedure and systems for issuing Aadhaar numbers to individuals and perform authentication thereof under this Act. As mentioned above, Under Section 3 of the Aadhaar Act, Aadhaar number is to be issued and authentication is performed Under Section 8 of the Aadhaar Act. Sub-section (2) stipulates certain specified powers and functions which the Authority may perform and Sub-section (h) thereof reads as under:
23(2)(h) specifying the manner of use of Aadhaar numbers for the purposes of providing or availing of various subsidies, benefits, services and other purposes for which Aadhaar numbers may be used.
This provision, thus, enables the Authority to specify the manner of use of Aadhaar with specific purpose in mind, namely, for providing or availing of various subsidies, benefits and services. These are relatable to Section 7. However, it uses the expression 'other purposes' as well. The expression 'other purposes' can be read ejusdem generis which would have its relation to subsidies, benefits and services as mentioned in Section 7 and it can be confined only to that purpose i.e. scheme of targeted delivery for giving any grant, relief etc. when it is chargeable to Consolidated Fund of India. Therefore, this provision, according to us, can be read as incidental to the main provision and would be covered by Article 110(g) of the Constitution."
83. The combining effect of Act of 2016 (Aadhaar) and Act of 2013 led to a transformational change in the Society and the delivery system of the Government, as now the subsidy, which was given under the various scheme of the Central and state Government, started reaching to whom it was meant for.
84. The Government had recognised that there was huge pilferage in the distribution system, not only in the Public Distribution System for foodgrains, but over other areas also where subsidy was being given from the consolidated fund of India or the fund of the State that it never reached the person for whom it was released. The Control Order, 2016 was promulgated with the idea of combining the two central Act with the object of giving better result, eliminating and capping the pilferage from the earlier system, which existed having its sources under Section 3 of the Act of 1955. The earlier Order of 2004, which had its root from the Act of 1955, did not provide a complete mechanism. Thus, with the external aid of Government Orders, issued from time to time, that matter relating to suspension and cancellation (penalty) was being proceeded with.
85. The Full Bench of Puran Singh (supra) was also a case where the matter was referred, on there being difference of opinion as to whether any opportunity of hearing was required prior to suspension.
86. As no mechanism was provided under the Order of 2004, and the Government Order dated 29.7.2004, supplanting the said order of 2004 provided for certain opportunity of hearing which was explained by the Full Bench in Puran Singh (supra). The State on 16.10.2014 and 16.12.2015 had to issue another clarificatory Government Orders as the problem was creeping day by day as there was no fixed procedure laid down to address the problem in regard to suspension and cancellation of licence of a dealer.
87. It was in the year 2016, that a complete mechanism was provided by the State Government in the form of Control Order, 2016 having its roots from Act of 2013 and 2016. The State Government repealed all its earlier Government Orders issued in the year 2004, 2014 and 2015. Clause 8 of the Control Order, 2016 provides for operation of the fair price shop. Sub-clause (7) of Clause 8 provides for detailed procedure to be followed by the competent authority in case there is any violation of any condition of a licence including any irregularity committed by the dealer. The inquiry is to be conducted by the Designated officer or District Magistrate, and after inquiry, if the license of fair price shop is suspended along with a show cause notice, then reply/ explanation of show cause notice by dealer has to be examined by an officer one rank above the inquiry officer. This provision was not there in the Order of 2004, and the Full Bench in Puran Singh (supra) held that opportunity of hearing was necessary before suspending the licence taking help of another Government Order dated 29.7.2004.
88. As it has been noted above that the Act of 2013 and the Aadhaar judgment had recognized the right to food of an individual and household, the dealer or fair price show owner, who are an agent of State cannot claim parity with the right of an individual. The obligation of providing foodgrains to an individual or household is upon the State. In order to fulfill its obligation envisaged under Article 47 of the Constitution of India, being directive principle, the State Government carries out its obligation through appointing agents in the form of fair price shop dealer, and entering into an agreement with them and granting licence. The agent/dealer is bound by the terms and conditions of licence.
89. The term "licence", as defined in Advanced Law Lexican IIIrd Edition means, "an authority to do something which would otherwise be inoperative, wrongful or illegal; a formal permission from a Cinstituted authority to do something".
90. Similarly, term "licencee" means person who is in occupation, a subsisting agreement for licence. Thus, the entire claim of a dealer/agent rests upon the agreement executed by him with the State.
91. There is a marked difference between right of an individual or household claiming food under the Control Order, 2016 and the claim of a dealer/agent whose very existence rest upon the terms of an agreement.
92. The argument raised at the bar that right of the petitioner/dealer/agent are being infringed upon by the State/District Authorities in suspending or cancelling the license without following the principles of natural justice or adhering to the various procedures laid down in the various Government Orders issued from time to time from 2004 to 2015, does not hold ground, as it is vested right of an individual to receive foodgrains and not the vested right of the agent/dealer.
93. The Hon'ble Apex Court has also recognized the right to food of an individual under Article 21, dealing the Aadhaar case, and noticed that there being a paradigm shift in addressing problem of security and eradicating extreme poverty and hunger. The shift is from the welfare approach to a rights-based approach.
94. As the existence of agent/dealer arise from the agreement executed between them and the State, any failure on their part or term of license being violated, the matter has to be dealt with by the authority within the scope and ambit of the Act/Control Order under which the same has been executed. The argument advanced that the petitioners have vested right is not correct as the license granted to a dealer/agent does not fall within the ambit of fundamental right to carry on their business, as provided under Article 19(1)(g) of the Constitution.
95. While dealing with the matter of suspension or cancellation of a license, the authority have to confine themselves to the violation of the condition of license and sub-clause (7) of Clause 8 of Control Order, 2016 protects the interest of agent/dealer by affording an opportunity once an inquiry is conducted and any material coming on record against the term of condition of license, the same being suspended and a show cause notice is to be issued seeking reply/explanation.
96. The principle of audi alteram partem is complied once the notice is issued and an opportunity is provided to a dealer/agent to submit his reply and the same being considered by the authorities. The claim that a full fledged inquiry be conducted providing opportunity of cross-examination of witness, copy of documents, complaint and consideration of subsequent affidavits, if filed in favour of the dealer, by the authorities cannot be accepted, as it is not a departmental or regular inquiry under Article 311 of the Constitution of India and is only a inquiry of summary nature where in case of violation of terms of conditions of license, action is initiated and opportunity, as provided under the Control Order, 2016, is given before the license is cancelled.
97. A coordinate Bench of this Court while dealing with the issue of nature of inquiry in case of Meena Devi vs. State of U.P. and 4 others Writ C No.58035 of 2017, in its judgment dated 30.07.2018, held as under :
"51. This Court is of the considered opinion that a fair price shop licence is only an agent for distribution of scheduled commodities under the Public Distribution System. Such a licensee being only an agent acts for the principal i.e. the Government with a fixed rate of commission on the amount of allocation of essential commodities and their distribution by weight. The Public Distribution System has been envisaged by the government only to help the poor and needy. It is honest tax-payer's money which is used to subsidize the price of such essential commodities so that they come within the reach of poor and needy and they are able to feed themselves and their family in a respectable fashion and are not led to mendicancy and starvation. The principal remaining the State Government, and the licensee being only an agent, the principal is entitled to take away the licence in case of irregularity in distribution. Of course, there should exist valid reasons for taking away of such licence and some opportunity of hearing is required to be given to the agent in case of complaints being received against him. However, there is no fundamental right nor any Constitutional right for such a licensee akin to Article 311 of the Constitution of India. Even in the case of government servants protected under Article 311 of the Constitution of India the degree of proof required for establishment of guilt is that of "preponderance of probability".
98. The Court also took note of the decision of Apex Court in case of A.S.Motor Pvt. Ltd. vs. Union of India (2013)10 SCC 114 wherein the Apex Court had dealt with the principles of natural justice and their applicability in the realm of contract/license/agreement entered between the Government and agent. The Apex Court held as under :
"8. Rules of natural justice, it is by now fairly well settled, are not rigid, immutable or embodied rules that may be capable of being put in straitjacket nor have the same been so evolved as to apply universally to all kind of domestic tribunals and enquiries. What the Courts in essence look for in every case where violation of the principles of natural justice is alleged is whether the affected party was given reasonable opportunity to present its case and whether the administrative authority had acted fairly, impartially and reasonably. The doctrine of audi alteram partem is thus aimed at striking at arbitrariness and want of fair play. Judicial pronouncements on the subject have, therefore, recognised that the demands of natural justice may be different in different situations depending upon not only the facts and circumstances of each case but also on the powers and composition of the Tribunal and the rules and Regulations under which it functions. A Court examining a complaint based on violation of rules of natural justice is entitled to see whether the aggrieved party had indeed suffered any prejudice on account of such violation. To that extent there has been a shift from the earlier thought that even a technical infringement of the rules is sufficient to vitiate the action. Judicial pronouncements on the subject are a legion. We may refer to only some of the decisions on the subject which should in our opinion suffice."
99. As regards an opportunity to cross-examine the persons whose statements had been recorded, the Apex Court held as under :
"16. The contention that the Appellant should have been given an opportunity to cross-examine the persons whose statements had been recorded by the agency in the course of its inquiry and verification was rightly rejected by the High Court keeping in view the nature of the inquiry which was primarily in the realm of contract, aimed at finding out whether the Appellant had committed any violation of the contractual stipulations between the parties. Issue of a show-cause notice and disclosure of material on the basis of which action was proposed to be taken against the Appellant was in compliance with the requirement of fairness to the Appellant who was likely to be affected by the proposed termination. Absence of any allegation of mala fides against those taking action as also the failure of the Appellant to disclose any prejudice, all indicated that the procedure was fair and in substantial, if not strict, compliance with the requirements of Audi Alteram Partem. The first limb of the challenge mounted by the Appellant, therefore, fails and is hereby rejected."
100. Thus, under the Control Order, 2016, specific provision having been made for consideration of reply/explanation pursuant to the suspension, the requirement of audi alteram partem having been afforded to a dealer appointed under an agreement, cannot claim that a regular inquiry to be conduced giving opportunity for examination of documents, cross examination of witnesses, providing copy of inquiry report and taking of affidavits, as provided under the departmental proceedings.
101. Clauses 19 and 20 of the Control Order, 2016, providing for validation and provisions for prevailing of the present control orders over the previous orders issued by the State Government, is clear enough to hold that the earlier Government Orders of 2004, 2014 and 2015 having stood repealed, do not occupy the field for laying down the procedure in respect of dealing with the matter of suspension and cancellation of a license. The entire procedure has been provided under the new Control Order, 2016.
102. Now coming to the argument raised in regard to Section 24 of the General Clauses Act, saving the earlier Order of 2004, Government Order dated 29.7.2004 and 16.10.2014 is of no avail to him as the Control Order 2016 came into force in the light of Central Act of 2013 and Act of 2016 and all earlier Government Orders having stood repealed. Section 24 is a saving clause only when any enactment is repealed or re-enacted with or without modification, then, any act done under the repealed enactment, so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been issued under the provisions so re-enacted.
103. The Government Orders of 2004 and 2014 were only supplementing the Order of 2004 which was issued under Section 3 of Act of 1955, as there being no provision for dealing with suspension and cancellation of license, while Control Order, 2016 deriving its sources from the Act of 2013 and 2016 recognising right of an individual provided for the complete mechanism while dealing with the suspension/ cancellation of a license.
104. Section 24 of General Clauses Act would not be applicable in the present scenario as the effect of earlier Government Orders came to an end, after complete procedure having been promulgated by the State Government. The Government Orders of 29.7.2004 and 16.10.2014 were there to fill up the lacuna of Order of 2004, which did not provide for procedure in case of penalty (suspension/cancellation).
105. Reliance placed upon Division Bench decision in Ram Murat (supra) and Full Bench judgment in the case of Indrapal Singh (supra) are not applicable in the present case as Control Order, 2016 provides entire mechanism and the earlier orders of 2004 and 2014 are of no help as the re-enacted provision needs no external help. Relevant paras 38 and 39 of Indrapal Singh's judgment (supra) is extracted hereas under :
"38. Once the State Government who otherwise is empowered to issue Government Order controlling the subject of way and manner in which fair price shop dealer is to be appointed and the fair price shops are to be run and the State Government in its wisdom has proceeded to pose restriction and disqualification on an incumbent and his family members as defined in Paragraph 4.7 from being appointed as agent on Pradhan/Up-pradhan being there or being elected subsequently as Pradhan or Up-pradhan, then in said context the provision of U.P. Scheduled Commodities Distribution Order, 2004, containing the definition of household cannot be pressed into the services as by virtue of the provision of Section 24 of the U.P. General Clauses Act, 1904, the aforementioned Government Orders dated 3rd July, 1990 and 18th June, 2002 stands saved and are operating with full force as no inconsistent provision has been re-enacted. Relevant extract of Section 24 reads as follows;
"24. Constitution of appointments, notifications, orders etc issued under enactments repealed and re-enacted.--Where any enactment is repealed and re-enacted by an (Uttar Pradesh) Act, with or without modification, then, unless it is otherwise expressly provided, any appointment, (or statutory instrument or form) made or issued under the repealed enactment shall, so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment, (or statutory instrument or form) made or issued under the provisions so re-enacted."
39. Apex Court in the case of State of Punjab v. Harnek Singh 2002 (3) SCC 481, has proceeded to mention that Section 24 of the General Clauses Act deals with the effect of repeal and re-enactment of an Act and the object of the section is to preserve the continuity of the notifications, orders, schemes, rules or bye-laws made or issued under the repealed Act unless they are shown to be inconsistent with the provisions of the re-enacted statute. Anything duly done or suffered thereunder, are used by legislature and saving clause, is intended with the object that unless different intention appears, the repeal of an Act would not effect. The General Clauses Act has been enacted to avoid superfluity and repetition of language in various enactments. The object of this Act is to shorten the language of Central Acts, to provide as far as possible, for uniformity of expression in Central Acts, by giving definition of series of terms in common use, to state explicitly certain convenient rules for the construction and interpretation of Central Acts, and to guard against slips and oversights by importing into every Act certain common form clauses, which otherwise ought to be inserted expressly in every Central Act. In other words the General Clauses Act is a part of every Central Act and has to be read in such Act unless specifically excluded. Even in cases where the provisions of the Act do not apply, Courts in the country have applied its principles keeping in mind the inconvenience that is likely to arise otherwise, particularly when the provision made in the Act are based upon the principles of equity, justice and good conscience."
106. Once the complete procedure was there, the State withdrew all its Government Orders bringing to rest the controversy raised due to incomplete regulations.
107. Coming to the next argument raised from petitioners' side, relying upon the decision of Menka Gandhi's case (supra) that right accrues in favour of a person to whom a license is granted and deprivation of such right without hearing is violation of principles of natural justice and a vested right having been accrued in favour of a dealer cannot be taken away in a casual manner, has no force, as in case of Menka Gandhi (supra), the passport was impounded without affording opportunity of hearing but in the present case the licensee/agent/dealer was given a show cause notice and his reply was considered before cancellation of his license.
108. Likewise, in A.K.Kraipak and Ors. (supra), the Court held that the principles of natural justice requires hearing before an order is passed to prevent miscarriage of justice. Similarly, reliance placed on K.T.Shaduli Yusuff and others (supra) also takes note of providing opportunity before an assessment is made under the Taxing Statute. In Baraka Overseas Traders (supra), the Apex Court while considering the effect of withdrawal of license granted under Duty Exemption Scheme requires opportunity of hearing.
109. However, these cases are of no help to the petitioners, as they have already been served with a notice seeking reply and action taken pursuant to the consideration of reply by the Licensing Authority.
110. The principle of audi alteram partem has been complied with as a clear procedure has been envisaged in sub-clause (7) of clause 8 of Control Order, 2016. The argument as to the vested right of a dealer cannot be accepted as his claim arises from the agreement and a dealer is bound by terms and conditions of a license. Any violation of a condition would result in proceeding for suspension or revocation of such license. The authorities had to consider and proceed under the procedure prescribed in the Control Order, 2016.
111. Reliance placed upon decisions of co-ordinate Benches of this Court are of no help, as in none of the cases Act of 2013 and 2016 was considered, nor the judgment of Apex Court in Aadhaar case was brought to notice.
112. It was for the first time that Sri Goyal brought to the notice the above facts and pointed to the complete mechanism provided under the Control Order, 2016. None of the decisions placed before the Court had taken note of the said fact except in Meena Devi (supra) where the Court had considered the Control Order 2016.
113. Clause 1(2)(kha) of Government Order dated 05.08.2019 only provides for a preliminary inquiry in case of a complaint by a card holder. During investigation, the distribution done by dealer has to be seen/verified from the portal, while it is optional that the entries may be verified from the card of the card holders. It further provides for cross-examination of the complainant and other witnesses during investigation, but does not provide for cross-examination by the dealer.
114. This Government Order does not in any way override the statutory provisions of Control Order, 2016 or dilute sub-clause (7) of Clause 8, but only provides for a caution during an inquiry.
115. The grant of a license is not a right, as claimed by the petitioner. Moreover, the argument that a dealer has been roped in by the State to achieve its object of providing food to every individual and household and thus this duty entrusted also entails a right of a dealer does not hold ground as the dealer is duty bound and tied to conditions of license. Any violation will invite the penal action of the State as it amounts to blocking the aim and object of the State.
116. The burden of duty is very heavily cast upon a dealer, who has to strictly comply with the conditions of license, and cannot travel beyond the agreement executed by him, which lays various restriction upon him. The agreement is not executed blindly, but with an open eye by the licensee with the State. Once the action is taken, upon any violation, the dealer cannot turn around and blame the system on mere technicalities, as the agreement binds him to comply the conditions.
117. It has been a constant effort of both the Central and State Governments post independence that the distribution of foodgrains and other essential commodities reach to the various section of the Society. With every advancement of technology, new methods are put into system for better channelization and utilization of the resources so as to reach its ultimate goal.
118. The unique number, (Aadhaar Act) is one such novel method and with the technical advancement, the effort of the Government had been reduced to quite number of times in making the subsidy reach to its ultimate beneficiaries. Still, after capping the pilferage in the system, the Public Distribution System sometimes finds itself at crossroads, due to dishonest intention of the people involved in the system, such as, dealer/agent and also some of the officials of State Government.
119. Though, Control Order, 2016 takes care for the appointment of Vigilance Committee and Observers and their submitting report to the authorities, then too cases are coming up where the poor are not getting the foodgrains meant for them, and the same being siphoned off by unscrupulous.
120. The State Government was earlier directed by this Court on 19.07.2017 in Writ-C No.15723 of 2017 to come up with a policy as to action to be taken against such defaulting agent of the State Government but till date no such policy of the State Government has been framed. This Court finds that though the Control Order 2016 insulates the entire procedural system of distribution of foodgrains to individuals and households, and penalises (suspension/cancellation) the dealers, but no mechanism has been provided in dealing with the defaulting officials of the State Government.
121. If the State recognizes a right of a individual in regard to foodgrains and essential commodities for solving hunger and poverty, it also has to deal with its corrupt and defaulting officials who are also denting and creating obstruction in the passage of flowing of subsidies and other benefits to the deserving.
122. This Court feels that once the State starts taking action against such defaulting officials, a considerable improvement will be reflected in the entire Public Distribution System and the Government can truly achieve its object in enacting the National Food Security Act.
123. The argument that only on complaint of few, results in proceeding for suspension and cancellation of license needs examination, does not appeal to the Court, as the recipient of the Public Distribution System are the people living Below Poverty Line, Antyodaya and Above Poverty Line households. It cannot be expected that people, who are getting subsidized ration, can muster enough courage to come up and report to the authorities against a dealer/agent. It is only when there is constant shortfall of supply at the end of dealer or the poor being harassed to such an extent, then, few muster courage to report the matter to the system.
124. We, people in India, are well aware that complaint falls on deaf ears on the Government authorities, especially coming from the people from vulnerable section of Society. One can imagine the plight of a poor man, not getting the foodgrains meant for him, and harsh treatment at the dealer end. It is only in few and exceptional cases that action are initiated.
125. The Courts cannot turn blind eye towards the plight of poor and miserable section of the Society, and grant leverage to dealers and agents restoring license in the garb of technicalities of not supplying inquiry report, opportunity of cross examination, affidavits submitted subsequently etc. It is not a case where no opportunity to file reply, as mandated under sub-clause (7) of Clause 8, was not given. It was only after the consideration of reply and show cause notice that license was cancelled.
126. The dealer/agent thereafter has a remedy of appeal under Clause 13 of Control Order, 2016 wherein he can take all the grounds available to him. Once the grounds are taken by him, and the Appellate Authority records finding, nothing remains to be considered by this Court exercising power under Article 226 of the Constitution of India, as the proceedings are summary in nature.
127. This Court can look into and grant indulgence only when the procedure laid down under the Control Order, 2016 having not been complied with or the opportunity, as envisaged under sub-clause (7) of Clause 8, has not been provided to an agent/dealer. Once the entire exercise has been completed and appeal has been filed with all the grounds available, and finding having being recorded by the Appellate Authority, then nothing remains to be seen and considered by this Court, exercising extra ordinary jurisdiction under Article 226 of the Constitution.
128. Thus, both the questions (i) and (ii) stand answered i.e. pursuant to the promulgation of Control Order 2016, the earlier Government Order of 2004 stood superseded and repealed. Further no benefit of Government Orders dated 29.07.2004 and 16.10.2014 can be extended while dealing with matters relating to suspension and cancellation of license under new regime of 2016.
129. Now I proceed to take up cases individually:-
(i) Writ-C No.15420 of 2020
130. In this case, license of petitioner stood cancelled after his reply was considered. The ground taken is that notary affidavits of various cardholders submitted in favour of the dealer was not considered by the licensing authority. Further the inquiry report was not supplied and under political pressure, the license was cancelled.
131. From perusal of cancellation order it appears that all the grounds raised in the reply to show cause notice was considered in detail before the license was cancelled. In the appeal, no ground was taken as to non supply of enquiry report or for cross examination. The Appellate Authority on 02.7.2020 had dismissed the appeal.
(ii) Writ-C No.28966 of 2018
132. In the instant writ petition, against a show cause notice a reply was submitted but the licensing authority cancelled the license. The grounds taken in the writ petition are that neither the enquiry report nor the affidavits of the complainant were ever given/supplied to the petitioner and it was due to enmity with the Village Pradhan that cancellation proceedings were launched. Further ground has been taken that the distribution of essential commodities is verified every month by the observer and a certificate is issued. Thus the charges appears to be incorrect.
(iii) Writ C No.1464 of 2019
133. This writ petition arises out of cancellation order dated 26.12.2017 and appellate order dated 26.11.2018. The grounds taken are that some of the relatives of earlier fair price shop dealer had made frivolous complaint and the local member of Parliament had written letter to the Sub Divisional Magistrate and thus action for cancellation took place within 10 days. Secondly, no opportunity of hearing was given to the petitioner and the documents filed were not considered.
(iv) Writ-C No.5430 of 2019
134. In this writ petition cancellation as well as appellate orders have been challenged on the ground that as the husband of petitioner was suffering from ailment and an application was filed for extension of time but no further time having been provided by the Licensing Authority, and by an ex parte order the license was cancelled. The grounds taken in the writ petition are that at the time of issuance of charge sheet, enquiry report as well as statement of card holders were provided and further no opportunity of hearing was given.
(v) Writ-C No.8204 of 2019
135. In this writ petition proceedings for cancellation was initiated on a complaint. After enquiry, the license was suspended on 14.8.2017 and opportunity for filing objection was granted. A reply was filed on 11.10.2017 denying the charges. However, on 23.12.2017 the license was cancelled. The appeal filed against the cancellation order was also dismissed. The ground taken is that opportunity of hearing was not given and in the enquiry, no opportunity was given for examining the witnesses and cross examining the complainant.
(vi) Writ-C No.24220 of 2019
136. In this writ petition, license was cancelled pursuant to the show cause notice issued to the petitioner and reply having been considered on 5.11.2018. Appeal against the cancellation order has also been dismissed. The grounds taken in the petition is that no opportunity was granted to cross examine the Tehsildar report and Inquiry Officer had not appeared before the Licensing Authority.
(vii) Writ-C No.40982 of 2019
137. In this case, spot inspection was conducted and certain deficiency being found, show cause notice was issued to which reply having been submitted on 23.2.2019 and the license was cancelled on 28.6.2019. The grounds taken are that neither opportunity of hearing was provided, nor the enquiry report was supplied. In the appeal, none of the grounds were taken by the petitioner and the Appellate Authority dismissed the appeal.
(viii) Writ-C No.1212 of 2020
138. In this case a complaint having been made on 21.3.2017 with respect to non distribution of essential commodities to the card holders. An enquiry was conducted, and on report being submitted, action was initiated and license was put under suspension on 30.3.2017. After reply being submitted and considered, the license was cancelled. The ground taken is that the Order of 2004 was repealed on 10.08.2016 and new Control Order, 2016 came into existence on the same day, thus cancellation order dated 30.3.2017 has no legs to stand alongwith all the other consequential orders as the said exercise has been done in violation of Government Orders. Reliance has been placed upon Full Bench judgment in the case of Puran Singh (supra) and the provisions of the Government Order dated 29.7.2004 having not been adhered to and non affording of opportunity to cross examine the complainant and non supply of enquiry report has been taken.
(ix) Writ C No.12376 of 2019
139. This writ petition has been filed on the ground that on the basis of false complaint of not supplying the essential commodities and misbehaviour with the card holders, the license was cancelled by an ex parte order on 24.5.2017. The appeal against the cancellation order has also been rejected.
(x) Writ-C No.13484 of 2019
140. In this case, on complaint made by some of the villagers, an inquiry was conducted and report being submitted on 3.5.2019. The Sub-Divisional Magistrate issued show cause notice to the petitioner and license was kept under suspension. A detailed reply was submitted on 26.7.2019 alongwith affidavits of complainants but the license was cancelled on 16.9.2019. Appeal against the said order was also dismissed. The ground taken is that without recording any reasoning, appeal has been rejected. Apart from this ground, no other ground has been taken in the writ petition.
(xi) Writ-C No.18436 of 2020
141. In this case proceedings were initiated on the complaint of card holders and an inspection was made, wherein deficiency in the stock was found. A first information report was also lodged against the petitioner on 11.5.2018. Against the show cause notice, a reply was submitted and by order dated 25.7.2018 the license was cancelled. The appeal against the cancellation order has also been dismissed, and ground taken is that the card holders have submitted affidavits in favour of the dealer before the Superintendent of Police, Basti but the authorities, without considering the evidence, had proceeded to cancel the license.
142. All the writ petitions more or less raise similar and common ground(s) for consideration which are as under:-
(i.) Non supply of complaint and affidavits of cardholders before enquiry officer.
(ii) Non supply of enquiry report
(iii) Non affording of opportunity to examine the witnesses/card holders and cross examine the complainant/enquiry officer
iv) Non supply of documents and material relied upon by the enquiry officer/complainant mentioned in the show cause notice/suspension order
(v) Non providing of opportunity of hearing
(vi) Non consideration of affidavits filed in favour of dealer/licensee post complaints
143. The dispute between the dealer/licensee and the State has been going on since inception of Control Order in the State pursuant to the enforcement of Act of 1955.
144. Effort of State Government from time to time has been to reduce and curtail the litigation between the licensee and licensor. Control Orders of 1990 and 2004 did not provide for any mechanism for redressal of such dispute, nor any procedure was provided in these control orders. State had to supplement/supplant by various Government Orders such as 29.07.2004, 16.10.2014 and 16.12.2015. Decision of Full bench in the case of Puran Singh (supra) was only to harmonize Government Order dated 29.07.2004 with the order of 2004.
145. When the Act of 2013 was enforced with certain objects followed by Act of 2016, the State Government, in order to ensure targeted delivery of essential commodities to the last person of the society, promulgated Control Order 2016 providing a complete procedure to cut short the dispute arising between the licensee and the licensor.
146. Earlier no such provision existed under Order of 2004 which found place under sub-Clause (7) of Clause 8 of Control Order 2016. Mechanism provided for action against a licensee only when, on an enquiry, any adverse material is on record, show cause notice is mandated and after consideration of reply, the license can be cancelled.
147. Thus, requirement of hearing a licensee before his license is cancelled, is protected under the new regime. It is not a unilateral action which the authorities can take by cancelling the license at their whims. Further, safeguard has been provided under Clause 13 by providing a right to appeal against the action of the licensor. These actions were missing under the previous Control Orders and time to time external aid was taken when it was found that action of the State Authorities cannot be left at their mercy.
148. It has to be kept in mind that proceedings before these administrative authorities are summary in nature and ground taken that full-fledged departmental inquiry should be held and the procedure, as provided under the departmental inquiry should be followed, cannot be accepted. In the case of Meena Devi (supra), this Court had in clear terms relying upon the decision of Apex Court in case of A.S. Motors (supra) rightly held that Article 311 of the Constitution is not attracted and no such inquiry can be held.
149. This Court finds that once earlier Government Orders were repealed and Control Order 2016, providing for procedure, the Government Order dated 29.07.2004 being inconsistent with the Control Order 2016 cannot be taken into account and is not saved under Section 24 of the General Clauses Act.
150. Principle of audi alteram partem is fully adhered to once the opportunity is granted by the licensor for giving reply/explanation. The argument that no opportunity of hearing was provided cannot be accepted.
151. It has already been discussed above that a dealer is bound by the license/agreement and violation of any of the conditions of the agreement leads to suspension/revocation of his license. His license is subservient to right of an individual card holder given under Section 3 of the Act of 2013, and thus no question arises to grant him leverage for benefit of procedure of a departmental inquiry.
152. In view of the above, this Court finds that the ground raised in this bunch of petitions for non supply of complaint and affidavits of cardholders before enquiry officer; non supply of inquiry report; non affording of opportunity to examine the witnesses/card holders and cross examine the complainant/Inquiry Officer; non supply of documents and material relied upon by the enquiry officer/complainant mentioned in the show cause notice/suspension order; non providing of opportunity of hearing; and, non consideration of affidavits filed in favour of dealer/licensee post complaints, do not hold good in the light of Control Order, 2016, providing for complete mechanism under sub-clause (7) of Clause 8.
153. Considering the facts and circumstances of the case, I find that no interference is required in the orders impugned in this bunch of writ petitions passed by Licensing and the Appellate Authority cancelling the license of the dealer/agent.
154. All the writ petitions stand dismissed.
Order Date :- 22.10.2021
V.S.Singh/Kushal
