Smt. Busireddy Deepthi, vs The State Of Andhra Pradesh
2021 Latest Caselaw 1697 AP

 THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY


               WRIT PETITION NO.14834 OF 2019

ORDER:

This Writ Petition is filed under Article 226 of the

Constitution of India to declare the proceedings in

Ref.No.I(4)/1011/2019, dated 07.09.2019 issued by the 2nd

respondent placing the Fair Price shop authorization issued in

favour of the petitioner under suspension, for the Fair Price

shop No.1124012 of Thippaluru village, Yerraguntla Mandal,

YSR District as arbitrary, illegal and contrary to the provisions

of the Andhra Pradesh Targeted Public Distribution System

(Control) Order, 2018 and violative of the Fundamental rights

guaranteed to the petitioner under Articles 14, 19 and 21 of the

Constitution of India.

2. The petitioner was appointed as Fair Price shop dealer for

shop No.1124012 of Thippaluru village, Yerraguntla Mandal,

YSR District on permanent basis vide proceedings, dated

27.04.2018. Thereafter, the petitioner was issued authorization

and the same was valid till 31.03.2020. From the date of

appointment as Fair Price shop dealer, he is distributing the

essential commodities to the card holders allotted to the Fair

Price shop, without any complaints whatsoever. While so, the

4th respondent visited the Fair Price shop of the petitioner on

28.08.2019 and found variation between ground balance and

balance as per E-PoS machine during inspection and prepared a

panchanama as well as the proceedings, where under the

variation is noted in PDS rice, sugar and kerosene as follows.

Sl.    Name of      Starting   Purchased   Total        Selling     Closing      Stock at    Difference
No     the stock    stock      stock                    stock       as    per    the time
                                                                    the          of
                                                                    records      checking
1.     PDS          279.000    6654.999    6933.999     6665.715    268.283                  --
       Rice

2.     MDM            0.900        62.00     62.90          62.10     0.799                  --
       Rice
       Total        279.900    6716.999    6996.899     6727.815    269.082      269         --
       Rice
3.     Sugar         15        224.5        239.5       223.744     16.465       16.5        --

4.     ECDS         0.5        4.0           04.5           4       0.5          0.5         --
       Oil
5.     K.Oil        213        -           213          -           213          213         --

3. The main contention of the petitioner is that the variation

in PDS rice and sugar is within permissible limits, whereas

kerosene oil is not being supplied to the petitioner since 2016,

thereby, question of maintaining opening balance and closing

balance does not arise and there is every possibility of

evaporation of kerosene due to climatic changes and thereby

placing this petitioner's authorization under suspension is

illegal and contrary to law laid down by the Judgment of the

High Court of Judicature for the State of Telangana and for the

State of Andhra Pradesh in G. Durga Srinivasa Rao v. State

of Andhra Pradesh and others1 and violative of Articles 19

and 21 of the Constitution of India and requested to set aside

the same.

4. During hearing, the learned counsel for the petitioner

reiterated the contents raised in the Writ Petition, whereas the

learned Assistant Government Pleader for Civil Supplies

submitted that the proceedings under Section 6-A of the

2015(6)ALD 359

Essential Commodities Act, 1955 (for short 'the E.C Act') are

initiated for taking appropriate action for violation of conditions

of the Control Order, 2018, a show cause notice was already

issued calling for explanation of the petitioner, but till date, no

explanation was submitted. However, the proceedings are

pending before the Joint Collector under Section 6-A of the E.C

Act, therefore, at this stage the order impugned in the Writ

petition cannot be set aside and requested to dismiss the Writ

petition.

5. The whole dispute is revolving around the variation in PDS

rice and sugar and it is within permissible limits as per clause

under Clause 29 (a) of the Control Order, 2018.

6. The respondent is competent to exercise power under

Clause 8(4) of the Control Order, 2018. By exercising power

under Clause 8(4) of the Control Order, the impugned order is

passed. However, it is the contention of the learned counsel for

the petitioner that the variation is within permissible limits in

terms of clause 29(a) of the Control Order, 2018, it is not

repetitive lapse or violation, thereby, passing the order,

cancelling the authorization of the petitioner, exercising power

under Clause 8(4) of the Control Order, 2018 is illegal, arbitrary

and violative of principles of natural justice. In case of G. Durga

Srinivasa Rao, the Court held that the when variation is within

permissible limits and proceedings under Section 6-A of the E.C

Act were initiated before passing the order under Clause 8(4) of

the Control Order, 2018.

7. Whereas the learned Assistant Government Pleader for

Civil Supplies supported the order in all respects, since such

power under Clause 8(4) of the Control Order, 2018 is conferred

on the appointing authority to suspend or cancel the

authorization, during pendency of disciplinary proceedings or

proceedings under Section 6-A of the E.C Act.

8. Undisputedly, the petitioner is a permanent dealer for Fair

Price Shop No.1124012 of Thippaluru village, Yerraguntla

Mandal, YSR District, inspection was conducted by the 4th

respondent and found certain variations as shown in the table

in the earlier paras. The variation according to clause 29(a) of

the Control Order, 2018, the shortage in ground balance and

balance as per E-PoS machine is not repetitive lapse or

irregularity committed by the petitioner, hence suspension of

authorization of the petitioner is not warranted.

9. According to Clause 29 of the Control Order, 2018:

No prosecution shall be launched in certain mistakes/lapses/omission/irregularities indicated below (which are illustrative and not exhaustive) against the Fair Price Shop dealers.

(a) Minor variation in respect of single commodity up to 1.5% may be allowed taking into consideration of transactions of one month.

(b) Mistake in mathematical totalling, clerical or error on account of device and accounting errors in the maintenance of prescribed registers.

For the above irregularities, disciplinary action under the provisions of the Order shall be initiated under this Order. In case, these mistakes/lapses/omissions/irregularities are found to be repetitive and there are reasons to believe that they are

deliberate, appropriate action including launching of prosecution shall be initiated at the discretion of the competent authority.

10. On analysis of the clause, unless the lapse is repetitive,

the authorities cannot initiate prosecution or other disciplinary

action against the petitioner. Moreover, the variation is within

permissible limit and minimum. In such case, taking such

drastic step to cancel authorization, during pendency of enquiry

under Section 6-A of the E.C. Act, is a serious irregularity and

contrary to law declared by this Court in G. Durga Srinivasa

Rao, where the learned Single Judge of this Court enumerated

the circumstances under which the power under Clause 8 (4) of

the Control Order, 2018 can be exercised. Moreover, in the

earlier judgment, the Full Bench of High Court of Judicature at

Hyderabad, while considering suspension of license under

Excise Act in Tappers Co-operative Society, Maddur v.

Superintendent of Excise, Mahaboobnagar2,the Court

clarified that the incidental or ancillary powers cannot be

exercised in a routine way or as a matter of course. The

licensing authority is bound to exercise the discretion

reasonably, bona fide and, without negligence considering the

circumstances of the case when such interim suspension is

necessary. If it is possible to give an opportunity to the

petitioner and the circumstances do not warrant such a drastic

step, the licensing authority is bound to afford an opportunity

and the power of suspension pending enquiry should not be

exercised as an invariable rule or mode of making an enquiry.

1984(2) APLJ (HC) 1

Further the suspension pending the enquiry should not be

allowed to continue for an unduly long period. The Full Bench

of High Court in V. Manesham v. State of A.P3 and K.

Venkataratnam v. District Revenue Officer4, held that

suspension order can be passed as an interim measure, which

does not in any way perspective or whether in the event of

found not guilty. In another judgment in M/s. Sukhwinder Pal

Bipan Kumar vs. State of Punjab5, the Court held that, power

of suspension which is concomitant or adjunct is no doubt

restricted by the statutory provision under the proviso in

question to pass final orders of suspension, but that power

cannot be said to have been taken away to pass an interim

order of suspension not intended to be a penalty but only

interim measure to pass effective orders. Though the said power

is conferred under Clause 8 (4) of the Control Order, 2018, such

power has to be exercised judiciously recording reasons, if it is

not possible to pass an effective order or that the petitioner will

indulge in further malpractices or commit irregularities, the

authorities may suspend the authorization, but passing such an

order, without recording any reason is illegal under law.

11. In view of law declared by learned Single Judge and Full

Bench of High Court of Judicature at Hyderabad referred supra,

the order passed by Joint Collector, cancelling the authorization

of the petitioner by exercising power under Clause 8(4) of the

Control Order, 2018 during pendency of proceedings under

AP 1974(2) APLJ 366

AIR 1975 AP 359

AIR 1982 SC 65

Section 6-A of the E.C.Act is illegal and arbitrary and

consequently the same is liable to be set aside. Moreover,

cancellation or suspension order as per Clause 8(4) of the

Control Order, 2018 can be passed in disciplinary proceedings

initiated under Section 20 (i) of the Control Order, 2018, but not

in proceedings under Section 6-A of the E.C Act, since the

enquiry in proceedings under Section 6-A of the E.C Act is only

for confiscation of seized stock.

12. In the result, the Writ Petition is allowed setting aside the

proceedings in Ref.No.I(4)/1011/2019, dated 07.09.2019, while

directing 2nd respondent to continue the authorization of the

petitioner for Fair Price Shop No.1124012 of Thippaluru village,

Yerraguntla Mandal, YSR District, till passing final order in

proceedings initiated under Clause 20(i) of the Andhra Pradesh

Targeted Public Distribution System (Control) Order, 2018 or

any other disciplinary proceedings. There shall be no order as to

costs of the Writ Petition.

Consequently, miscellaneous petitions, pending if any in

the Writ Petition, shall stand closed.

_________________________________________ JUSTICE M.SATYANARAYANA MURTHY

Date: 23.03.2021 Mp