S. Sreenivasulu Srinivasulu, vs The State Of Andhra Pradesh,
2022 Latest Caselaw 2355 AP

             THE HON'BLE SRI JUSTICE M.GANGA RAO

                      Writ Petition No. 166 of 2021

ORDER:

The petitioner, who is a Fair Price Shop dealer, filed this

writ petition challenging the proceedings No.C1/48/2020

dated 24.09.2020 issued by the 3rd respondent, whereby the

petitioner's authorization is cancelled on the ground that the

petitioner committed certain irregularities in distribution of

the rice and other essential commodities to the card holders

and thereby contravened the provisions of the Andhra

Pradesh State Targeted Public Distribution System (Control)

Order, 2018 (for short 'Control Order, 2018) and against the

CCS Memo No.21/100/2015-AD.1 PP&CCS dated 28.09.2015

issued by the Civil Supplies Department and against the

judgment passed in the case of Smt. B.Manjula Vs. District

Collector, Civil Supplies, Kurnool and others1, on the ground

that the impugned cancellation order is not preceded by any

enquiry as per the provisions of Clause 8(4) of the Control

Order, 2018 and is in violation of principles of natural justice

as no opportunity is given to the petitioner to put forth his

case in his defence.

2. The case of the petitioner is that he was appointed as a

permanent Fair Price Shop dealer of Shop No.1033019,

Chinthaparthy Village, Valmikipuram Mandal, Chittoor

2015(4) ALT 572

District on 21.08.2015 on compassionate grounds and

authorization was issued on 05.01.2016. His authorization

was renewed from time to time and it was valid upto

31.03.2020. He made an application for renewal of the

authorization by paying necessary fee through a challan. As

the renewal application is pending as per the provisions of

Control Order, 2018, the authorization is deemed to have

been renewed. Since his appointment, he has been

distributing the essential commodities to the card holders

without any complaint. The 7th respondent conducted

inspection on 26.07.2019 at 7.15 a.m. and submitted report

to the 3rd respondent, without conducting panchanama and

without mediators report in compliance of Clause 20(n) of the

Control Order, 2018. Based on the said report, the 3rd

respondent, without any show-cause notice and calling for

explanation as required under law, suspended the petitioner's

authorization by proceedings dated 30.07.2019. Questioning

the suspension order, the petitioner filed W.P.No.12436 of

2019 before this Court. This Court disposed of the said writ

petition on 03.09.2019 following the orders passed in

W.P.No.11446 of 2019, directing the 3rd respondent to pass

final orders in the matter within a period of four weeks from

the date of receipt of a copy of the order. In the meanwhile,

the respondents are directed to supply essential commodities

to the petitioner until finalization of the enquiry. Accordingly,

the 3rd respondent issued orders in File No.C1/448/2019

dated 21.12.2019 directing the 6th respondent to allow the

petitioner to lift and distribute the essential commodities until

finalization of the case or further orders. Accordingly, the

petitioner was allowed to draw the essential commodities and

distribute the same to the card holders. The petitioner was

supplied essential commodities for the month of January,

2020 by Release order dated 25.12.2019 and on 01.01.2020,

he received the instruments viz., 1) e-POS machine; 2)

Weighing scale; 3) Irish machine; 4) Charges; and 5)

Verification certificate only from Smt. Y.Vasundara,

temporarily arranged dealer, but no stocks were handed over

by the temporary dealer. A show-cause notice dated

16.10.2019 was issued to the petitioner as to why the seized

stock should not be confiscated to the Government and asked

for his explanation to be submitted within two days from the

date of receipt of a copy of the order.

While things stood thus, again the Vigilance &

Enforcement Department inspected the petitioner's shop on

07.01.2020 along with Civil Supplies Deputy Tahsildar,

Valmikipuram Mandal and alleged certain irregularities in the

distribution of essential commodities to the card holders by

the petitioner and a case was registered under Section 6A of

the Essential Commodities Act, 1955 (for short 'the Act') and

seized the stock in the presence of Panchayatdars under the

cover of Panchanama.

Further, a show-cause notice dated 27.06.2020 was

issued to the petitioner to submit his explanation within 14

days from the date of receipt of a copy of the notice as to why

his authorization should not be cancelled and forfeited the

entire security deposit to Government, enumerating the

charges framed against the petitioner. The petitioner

submitted his explanation on 13.07.2020 to the show-cause

notice. The 3rd respondent without considering the

explanation in its proper perspective and without conducting

proper enquiry as per the provisions of Clause 8(4) of the

Control Order, 2018 and the CCS Memo dated 28.09.2015

and as per the law laid down by this Court in the case of Smt.

B.Manjula (1 supra), passed the impugned cancellation order

dated 24.09.2020. Being aggrieved by the same, the present

writ petition is filed.

3. The 3rd respondent filed counter stating that the

petitioner was appointed as Fair Price Shop dealer on

compassionate grounds on 21.08.2015 and the authorization

was also issued, which was valid upto 31.03.2020. The

petitioner had committed certain irregularities in distributing

the essential commodities, for which his authorization was

suspended. As per the orders passed by this Court in

W.P.No.12436 of 2019, pending finalization of the enquiry

proceedings and final order, the petitioner was supplied

essential commodities to distribute the same to the card

holders. Again, on inspection of the petitioner's shop on

07.01.2020, found certain irregularities and variations in the

stocks, and thereby a case was registered under Section 6A of

the Act and also seized the stock in the presence of

Panchayatdars under the cover of Panchanama and

submitted a detailed report for initiation of disciplinary

proceedings against the petitioner. Accordingly, a show-

cause notice dated 27.06.2020 was issued as to why his

authorization shall not be cancelled and forfeited the entire

security deposit to the Government, calling for explanation

within a period of 14 days from the date of receipt of a copy of

said notice. The petitioner submitted explanation on

13.07.2020 and an Intimation notice dated 28.08.2020 was

issued to the petitioner to attend the enquiry on 31.08.2020.

The petitioner has attended the enquiry and he was given

opportunity to defend his case, but the petitioner has not

availed the same and moreover he has not opted for recording

a sworn statement and simply requested to drop action in

this case. The 3rd respondent, by considering the material on

record and the explanation submitted by the petitioner and as

the charges framed against the petitioner were proved beyond

doubt, finally passed orders on 24.09.2020 cancelling the

petitioner's authorization duly informing the petitioner that

against the said cancellation order, an appeal lies to the

District Collector, Chittoor. Hence, there are no procedural

irregularities in passing the impugned order of cancellation.

4. Sri Y.N.Anjaneyacharyulu, learned counsel for the

petitioner, would contend that the impugned order was

passed in utter violation of principles of natural justice and

without conducting enquiry as contemplated under the

provisions of Clause 8(4) of the Control Order, 2018 and CCS

Memo dated 28.09.2015 issued by the Civil Supplies

Department and as per the law laid down by this Court in the

case of Smt. B.Manjula (1 supra). In the show-cause notice

dated 27.06.2020, it was stated that the petitioner's shop was

inspected on 07.01.2019 by the Vigilance & Enforcement

officials and Civil Supplies Deputy Tahsildar and found

variations in the stock. It was also stated that the inspecting

officials had conducted physical verification of the stocks on

ground with the e-pos machine and found variations for the

month of January, 2020 viz., 1) Variation of less quantity of

2.38 qtls. of PDS rice; 2) Variation of excess quantity of 0.12

½ qtls. of Sugar; and 3) Variation of less quantity of 0.5 lts. of

ICDS P.Oil. The petitioner submitted explanation to the

show-cause notice denying the charges. However, the 3rd

respondent, while passing the impugned order of cancellation,

has only considered the explanation submitted to the earlier

show-cause notice issued in respect of the inspection

conducted on 26.07.2019 and not considered the explanation

submitted on 13.07.2020 in respect of the show-cause notice

dated 27.06.2020 and passed a laconic order without any

cogent reasons much less valid reasons for cancellation of

petitioner's authorization. He would further contend that as

per the procedure contemplated under the provisions of

Clause 8(4) of the Control Order, 2018 and the law laid down

in the case of Smt. B.Manjula (1 supra), the 3rd respondent

based on the report submitted by the Tahsildar has to initiate

the disciplinary proceedings against the petitioner for the

irregularities committed in the distribution of essential

commodities only but not based on the report under Section

6A of the Act submitted by the Tahsildar, Valmikipuram and

basing on the report to initiate disciplinary proceedings, a

show-cause notice has to be given to the petitioner calling for

his explanation. After receipt of explanation, the 3rd

respondent has to conduct a detailed enquiry to prove the

charges by examining the complainant and panchayatdars

(mediatiors) by giving opportunity to the petitioner to cross-

examine them. Thereafter only, the 3rd respondent by

discussing the evidence available on record, has to pass

reasoned order for cancellation of authorization as the said

order is appealable and also subjected to judicial review

under Article 226 of the Constitution of India by this Court.

In support of his contention, the petitioner relied on the

decision of the Hon'ble Supreme Court of India in the case of

State of H.P. and others Vs. Gujarat Ambuja Cement Ltd. and

another2.

(2005) 6 SCC 499

5. Per contra, learned Assistant Government Pleader for

Civil Supplies, while reiterating the averments of the counter,

submits that the petitioner is habituated to commit

irregularities in distribution of essential commodities for

personal gain. Earlier also, an inspection was conducted on

26.07.2019 and found certain irregularities in distribution of

essential commodities and variations in stocks and at that

time, stocks were seized and a show-cause notice dated

27.06.2020 was issued to the petitioner and his authorization

was suspended on 30.07.2019. As per the orders of this

Court passed in W.P.No.13436 of 2019, the petitioner was

allowed to draw the essential commodities and supply the

same to the card holders pending finalization of enquiry and

passing of final orders. Pending proceedings, on inspection of

the petitioner's Fair Price shop on 07.01.2020, it was found

that the petitioner has committed again certain irregularities

in distributing the essential commodities and also found

variations in stocks, for which a show-cause notice was

issued, explanation was called for and Intimation notice was

also issued to participate in the enquiry. The petitioner has

participated in the enquiry conducted by the 3rd respondent

and the 3rd respondent passed the impugned cancellation

order considering the explanation of the petitioner and also

the evidence available on record. He further submits that the

3rd respondent being an administrative authority passed the

cancellation order giving sufficient reasons for cancellation of

petitioner's authorization. The administrative authority need

not give detailed reasons like that of the judicial authority.

Hence, there is no irregularity or illegality in passing the

impugned order.

6. The point that arises for consideration before this Court

is that - Whether the impugned order of cancellation of

petitioner's authorization is passed validly as per the

provisions of Clause 8(4) of Control Order, 2018 and the law

laid down by this Court in the case of Smt. B.Manjula

(1 supra)?

7. The petitioner was appointed as dealer of Fair Price

Shop No.1033019 of Chinthaparthy Village, Valmikipuram

Mandal, Chittoor District on compassionate grounds vide

proceedings date 21.08.2015. On 05.01.2016, authorization

was also issued to the petitioner and the same was extended

from time to time. By proceedings dated 20.03.2018, the

petitioner authorization was renewed and it was valid till

31.03.2020. He submitted application for renewal of the

authorization along with necessary fee and it is a deemed to

have been renewed. While the petitioner was distributing the

essential commodities to the card holders without any

complaint, on 26.07.2019, the petitioner's shop was inspected

by Civil Supplies Deputy Tahsildar, but no mediators report

was prepared as required under Clause 20(n) of the Control

Order, 2018. The 3rd respondent issued show-cause notice

calling for explanation and pending disciplinary proceedings,

the petitioner's authorization was suspended and an

alternative arrangement for distributing the essential

commodities was made. Questioning the suspension order

dated 30.07.2019, the petitioner filed W.P.No.12436 of 2019

before this Court. This Court disposed of the said writ

petition by order dated 03.09.2019 directing the 3rd

respondent to pass final orders within a period of four weeks

and also directed the respondents to supply the essential

commodities to the petitioner until finalization of the enquiry.

As per the said orders, the petitioner was supplied the

essential commodities for the month of January, 2020 by

Release order dated 25.12.2019. On 01.01.2020, he received

the instruments viz., 1) e_PoS machine, 2) Weighing Scale, 3)

Irish machine, 4) Charges and 5) Verification certificate only

from Smt. Y.Vasundara, temporary arranged dealer, but no

stocks were handed over by the temporary dealer.

8. However, on 16.10.2019, a show-cause notice of

confiscation was issued and the petitioner submitted

explanation on 02.11.2019 and by proceedings dated

25.09.2020, confiscation order confiscating 100% of seized

stock to the Government was passed. Along with the said

confiscation order, the impugned cancellation order dated

24.09.2020 was issued. In respect of subsequent inspection

of petitioner's shop on 07.01.2020 by the Vigilance &

Enforcement officials, based on the said inspection, a show-

cause notice dated 27.06.2020 was issued framing the

following charges:

"Charge-1: The FP Shop dealer has not maintained accounts properly thus variation in PDS rice to 2.38 quintals was found to the Inspecting Officials and thus contravened 12(p)(3) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018.

Charge-2: The FP Shop dealer could not produce the authorization to the Inspecting Officials hence they suspected that the dealer is running the shop without authorization and thus contravened clause 8(12) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018.

Charge-3: The FP Shop dealer has not maintained the timings as prescribed by the Government and opening the FP shop by 10.00 AM., and the card holders and waiting for hours together to draw the ECs and causing more inconvenience to the and thus contravened clause 8(12) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018.

Charge-4: The F.P.Shop dealer is issuing less quantity of Rice and collecting Rs.15/- per ½ Kg Sugar as against Rs.10/- and collecting Rs.20/- per Atta packet as against Rs.16.50ps. and for Redgram for Rs.50/- per Kg as against Rs.40/- fixed by the Government and collecting higher rate from the card holder for the ECs and thus contravened clause 12(n) of the Andhra Pradesh Targeted Public Distribution System (Control) Order, 2018."

The petitioner submitted explanation on 13.07.2020

denying the charges. But, the mediators report reveals the

variation of rice as (-) 2.38 qtl., sugar as 0.12 1/2 qtl., PDS

Dal as 0.05 qtl. and Wheat atta as 0.01 qtl. And ICDS P.Oil as

(-)0.5 lts.

9. This Court found that without considering the

petitioner's explanation in its proper perspective with

reference to the charges and variations found in the shop, the

3rd respondent without conducting any enquiry as

contemplated under the provisions of Clause 8(4) of the

Control Order, 2018 and the law laid down by this Court in

the case of Smt. B.Manjula (1 supra), passed the order

laconically without giving any reasons, which amounts to

violation of principles of natural justice. It is further stated

that against the order, an appeal lies to the District &

Sessions Judge, Chittoor, within a period of 30 days.

10. This Court, after elaborate discussion, in the cases of 1)

Smt. B.Manjula (1 supra), 2) Pidikiti Sailaja Vs. State of A.P.3

and 3) C.Durga Srinivasa Rao and others Vs. The State of

Andhra Pradesh and others4, held that the disciplinary

authority has to prove the charges by conducting enquiry and

examining the witnesses by giving opportunity to the dealer to

cross-examine the witnesses and to submit his detailed

explanation. The disciplinary authority is under statutory

obligation to pass reasoned order while cancelling the Fair

Price Shop dealership of the petitioner and the impugned

2015(2) ALT 667

2015(6) ALD 359

order is bereft of any reasons and not preceded by any

enquiry as contemplated under Clause 8(4) of the Control

Order, 2018 and the law laid down by this Court in the case

of Smt. B.Manjula (1 supra) and a separate report has to be

submitted by the Tahsildar to take disciplinary action as

required under Clause 20(i) of the Control Order, 2018. This

Court also found that instead of conducting final enquiry as

directed by this Court in W.P.No.12436 of 2019 dated

03.09.2019, the 3rd respondent hatched up a plan and again

inspected the petitioner's Fair Price shop on 07.01.2020 even

before handing over the stocks by the temporary dealer,

thereby the respondent authorities are not acted fairly. The

said impugned action is motivated and it is only to

circumvent the earlier order of this Court passed in

W.P.No.12436 of 2019.

11. Hence, the contention of the learned Assistant

Government Pleader that against the impugned order, an

appeal lies to the District Collector, Chittoor and without

exhausting the same, the petitioner approached this Court

straightaway and the writ petition is not maintainable, is

unsustainable in the facts and circumstances of the case. As

the impugned order is passed without conducting any enquiry

and against the principles of natural justice, the impugned

order is liable to be set aside.

12. Accordingly, the Writ Petition is allowed setting aside

the impugned order dated 24.09.2020. The respondent

authorities are directed to supply the essential commodities

to the petitioner forthwith to distribute the same to the card

holders. However, liberty is given to the 3rd respondent, who

is the competent disciplinary authority, to conduct fresh

enquiry as per the law laid down by this Court in the cases 1,

3 and 4 referred supra and pass appropriate reasoned order

and communicate the same to the petitioner. No order as to

costs.

13. Miscellaneous Petitions, if any, pending in this writ

petition shall stand closed.

___________________________ JUSTICE M.GANGA RAO

05-05-2022 anr

THE HON'BLE SRI JUSTICE M.GANGA RAO

Writ Petition No. 166 of 2021

05-05-2022

Anr