Andhra Pradesh High Court - Amravati

Smt B M Kondamma vs The State Of Ap on 12 January, 2024

     THE HON'BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA

                    WRIT PETITION No.1397 OF 2023
ORDER:

The present Writ Petition is filed under Article 226 of the

Constitution of India, seeking the following relief:

"... to issue a writ order or direction more particularly one in the nature of Writ of Mandamus, declaring the action of the 4th Respondent in suspending the authorization of the petitioner FP ShopNo.1112015, Rachayapeta Village, Gopavaram Mandal, Y.S.R. Kadapa District in Case Ref.No.C/509/2022 dated 30.11.2022, is illegal, arbitrary, violation of Andhra Pradesh State Targeted Public Distribution System (Control) Order, 2018 and violation of the principles of natural justice and consequently set aside the same and pass such other order or orders ..."

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

shop dealer in respect of Fair Price Shop No.1112015, Rachayapeta

Village, Gopavaram Mandal, Y.S.R. Kadapa District in the year 1993.

The authorization of the petitioner has been renewed from time to time

and it is still subsisting. The petitioner is continuting as fair price shop

dealer for the above said shop and distributing essential commodities to

the card holders in the village without any remarks and complaints.

While so, the Respondent authorities inspected the petitioner's shop on

28.10.2022 and found some variations in the PDS commodities.

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3. The Joint Collector / Respondent No.3 issued show cause notice

dated 11.11.2022 framing single charge alleging that the petitioner has

committed certain irregularties and seized the stock. The petitioner

submitted his explanation on 26.11.2022. However, Respondent No.4

issued impugned proceedings in Ref.No.C/509/2022 dated 30.11.2022

cancelling the authorization of the petitioner without conducting proper

enquiry and without considering explanation of the petitioner dated

26.11.2022. Hence the writ petition.

4. Respondent No.4 / RDO, Badvel, YSR Kadapa District filed

counter affidavit wherein it is stated that the Enforcement Deputy

Tahsildar, Badvel and the Mandal Revenue Inspector, Gopavaram

Mandal inspected the subject shop and found certain variations in the

stock. Further he submitted report to the Respondent No.3 to take

action under Section 6 (A) of the Essential Commodities Act, 1955 (for

short "the EC Act, 1955"). Later, Show Cause notice dated 11.11.2022

was issued to the petitioner and opportunity of personal hearing was

afforded. As the explanation of the petitioner was not satisfactory, the

impugned proceedings were issued cancelling the authorization of the

petitioner and prayed to dismiss the writ petition.

5. It is contended by the learned counsel for the petitioner that the

fair price shop of the petitioner was inspected by Enforecement Deputy

Tahsildar, Badvel and the Mandal Revenue Inspector, Gopavaram

Mandal, alleging variation in the stock, they seized the stock available

in the shop, pursuant to panchanama dated 28.10.2022. Basing on the NV,J

panchanama submitted by the inspecting officials, 6A proceedings were

initiated by the Respondent No.3 and Respondent No.4 also issued

show cause notice dated 11.11.2022 to the petitioner by framing a

single charge and called for explanation. Charge No.1 is that the

petitioner has violated condition 21(c) of Andhra Pradesh State Targeted

Public Distribution System (Control) Order, 2018 (for short "the Control

Order, 2018") by diverting the stock of Essential Commodities to black

market due to which shortage i.e. (-) 6350 Kgs occurred in the stocks of

PDS Rice, when compared the statement of ePoS device with ground

stock. Thus the petitioner contravene the provisions of the Control

Order, 2018 and submitted detailed explanation, narrating the real

ground stock at shop at the time of inspection.

6. In the explanation, the petitioner / dealer denied the charge and

submitted that the Government had notified 7585 qunitals and 2230

quintals of backlog rice for the month of October, 2022 for the

petitioner Shop No.1112015. Total is 9815 qunitals, but the rice

distributed to the people is 6490 quintals, but 3325 quintals are

remaining at stock in the Fair Price Shop being orgainised by the

petitioner. The Respondent Nos.5 and 6 inspected the shop on

28.10.2022 and during the enquiry, there were found 1699 qunitals in

the shop. But, Respondents stated that 1424 qunitals should be

remaining as ground stock. During March, 2021, 1699 qunitals have

been allotted to the petitioner.

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7. The learned counsel for the petitioner submits that, the petitioner

denied the charge and submitted that he had never directly or indirectly

committed irregularities whatsoever. The above charge is framed

against the petitioner without any basis. Hence, the petitioner

submitted that he has not contravened any provisions under the

Control Order, 2018.

8. Learned counsel for the petitioner submits that Respondent No.4

came to conclusion that the explanation submitted by the petitioner is

not convincing and the charge framed against the petitioner was held

proved and passed orders cancelling the authorization of the petitioner

without assigning any reasons and without considering the contents at

explanation is contrary to the laid down by this Court in M. Kalyani

vs. District Collector, Prakasam District, Ongole and others.

9. Heard learned counsel for the petitioner, learned Government

Pleader for Civil Supplies and perused the material on record.

10. On perusal of the impugned order, it appears that though

Respondent No.3 had issued show cause notice dated 11.11.2022 and

considered the explanation of the petitioner, Respondent No.4 did not

explain any reasons for coming to such conclusion that the explanation

of the petitioner is not convincing for suspension of authorization.

Moreover, Respondent No.3 also did not conduct proper enquiry as

contemplated under Clause 8(4) of the Control Order, 2018 in respect of NV,J

any delay contended in explanation of the petitioner. Clause 8(4) of the

Control Order, 2018 is extracted as under:

8. Lifting of commodities by fair price shop dealers and

Security Deposit:

(4) The appointing authority may, at any time in the public

interest or on suomotu or on receipt of complaint, after

making such enquiry as may be deemed necessary and for

reasons to be recorded in writing, suspend or cancel the

authorization issued or deemed to be issued to him / her

under this clause.

11. Therefore, the Respondent No.4 neither conducted enquiry as

required under 8(4) of the Control Order, 2018 nor assigned any

reasons for the explanation. Hence, the action and issuance of

impugned proceedings of suspension of authorization is against the

principles laid down by this Court and this Court in B. Manjula vs.

District Collector, Civil Supplies, Kurnool and others1, observed as

extracted hereunder:

"9. This Court is conscious of the fact that the law discussed above was laid down by the Courts in the context of disciplinary proceedings against Government servants and it may not be possible to adhere to the same rigors of procedure in an enquiry against a fair price shop dealer. However, this Court is of the considered opinion that since an order of cancellation of fair price shop visits the dealer with adverse consequences, the appointing authority must adhere to

1 2015 (4) ALT 572 NV,J

the fundamental ingredients of an enquiry. The enquiry need not be too elaborate as in the case of a disciplinary proceeding against a Government servant, but it shall follow the basic requirement of an enquiry which in my view must be as described infra.

10. An „enquiry‟ pre-supposes an opportunity of personal hearing to the dealer to explain his/her case based on the records such as sales and stock registers. If need be, such enquiry must also include recording the sworn statement of the dealer and witnesses, if any, from his/her side. In cases where either card holders or other persons sent any complaint, they must also be examined in the presence of the dealer or his/her lawyer and the dealer shall be given an opportunity of cross- examining such persons. The licencing /disciplinary authority shall also supply to the dealer all the reports on which he is likely to place reliance to the detriment of the dealer. Unless the dealer has no explanation at all to offer, the licensing/disciplinary authority is bound to hold a detailed enquiry.

11. The experience of this Court reveals that the appointing authorities of fair price shop dealers are dispensing with the requirement of making personal enquiry by summoning the dealers. They are merely relying upon the reports sent by their subordinates i.e., Deputy Tahsildars and Tahsildars, behind the back of the dealers and resting their decisions solely upon those reports. This procedure is anathema to the concept of enquiry which otherwise means affording the dealer an opportunity of a fair hearing."

12. It is settled law that before passing any final order which effects

the interest of any party, the authorities have record reasons by

conducting proper enquiry.

13. Admittedly, in the present case proper enquiry was not conducted

and no reasons were recorded in the impugned order which is in

violation of principles of natural justice. In view of the same as

Respondent No.3 has not followed the proper procedure. In the NV,J

considered opinion of this Court, the impugned order unsustainable

under law and liable to be set-aside in view of the ratio laid down in the

High Court of Judicature, Andhra Pradesh at Hyderabad in M. Kalyani

vs. District Collector, Prakasam District, Ongole and others2,

observed as extracted hereunder:

12. We are further of the view that the failure of respondent No.3 to consider the explanation of the appellant in a correct perspective and failure to assign reason for holding that the allegations leveled against her have been proved, has the effect of vitiating the order of cancellation.

14. This Court in Gondu Chinnammadu vs. State of Andhra

Pradesh and others3, observed as extracted hereunder:

16. Thus, the finding recorded by the respondents that the explanation submitted by the petitioner is not at all satisfactory, but no reason was assigned for not accepting the explanation except concluding that it was not at all satisfactory.

17. Similarly, in K.Nirmala‟s case (referred (2) above) the learned Single Judge of this Court held as follows:-

"the order does not contain any reasons whatsoever for rejecting the stay application and secondly, the allegations on which the petitioner‟s authorization was suspended are too trivial. This Court has time and again held that an order of suspension of fair price shop authorization being punitive in nature cannot be resorted to on trivial and flimsy grounds and that

2006 (5) ALD 796 (DB)

W.P.No.5800 of 2020, dated 06.04.2021 NV,J

unless the appointing authority or the disciplinary authority has the reason to believe that the fair price shop dealer has been indulging in serious irregularities and that his further continuance pending enquiry as a dealer will cause serious prejudice to the public interest, suspension cannot be resorted to. An order of suspension of fair price shop authorization being punitive in nature cannot be resorted to on trivial and flimsy grounds and that unless the appointing authority or the disciplinary authority has the reason to believe that the fair price shop dealer has been indulging in serious irregularities and that his further continuance pending enquiry as a dealer will cause serious prejudice to the public interest, suspension cannot be resorted to. The respondents are directed to continue the petitioner as the fair price shop dealer till conclusion of the enquiry and passing of final orders by respondent in W.P.No.34264 to 2012 filed by the petitioner for interim relief shall stand disposed of as infructuous."

18. Same is reiterated in another judgment in Thyrumala Setty‟s case (referred (3) above) wherein it is held as follows:-

"Therefore, only when serious allegations of commissions and omissions in distribution of the essential commodities in the fair price shop are made and a prima facie case is established against the dealer, the power of suspension of authorization has to be exercised.

Any order of suspension, even if the same is passed pending enquiry, results in serious adverse consequences to the fair price shop dealer. While exercising this power, the appointing authority needs to NV,J

use a proper sense of proportion. The power of suspension cannot be exercised as a matter of course. The main purpose of keeping dealership under suspension pending enquiry is to prevent the dealer from tampering of the record. Therefore, 9 only when serious allegations of commissions and omissions in distribution of the essential commodities in the fair price shop are made and a prima facie case is established against the dealer, the power of suspension of authorization has to be exercised. There may be certain allegations which may not warrant immediate suspension. The case on hand falls in this category where, no suspension is warranted as, it is a matter of verification with reference to evidence whether the petitioner has permitted a benami to run the fair price shop or not. Considering the fact that the petitioner‟s fair price shop is run without any variations between the stock register and the ground stock and without there being any complaints, from any cardholders, of improper distribution of commodities and in the absence of any allegation that the petitioner or the person who is allegedly running the fair price shop is indulging in acts, such as diversion of the essential commodities into black market, the hasty action of respondent No.2 in suspending the petitioner‟s authorization cannot be sustained.

19. Even otherwise in one of the judgments of this Court in W.P.No.19266 of 2019, dated 02.12.2019 an identical question was considered by this Court and held in Para 7 of the judgment as follows:-

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"7. 2nd respondent is a quasi judicial authority and required to adjudicate the disputes under Control Order, 2018. 2nd respondent being a quasi judicial authority has to pass a reasoned order, strictly adhering to the requirements under Control Order, 2018. Time and again the Courts held that though the administrative authorities exercising quasi judicial powers, are bound to record its reasons. In exercise of power of judicial review, the Apex Court in Assistant Commissioner, Commercial Tax Department, works contract and Leasing, Kota v. Shukla and brothers [(2010) 4 SCC 785] had an occasion to deal with an unreasoned order and made certain observations. In exercise of power of judicial review, the concept of reasoned orders/actions has been enforced equally by foreign courts as by the courts in India. The administrative authority and tribunals are obliged to give reasons, absence whereof could render the order liable to judicial chastise. Thus, it will not be far from absolute principle of law that the Courts should record reasons for its conclusions to enable the appellate or higher courts to exercise their jurisdiction appropriately 10 and in accordance with law. It is the reasoning alone, that can enable a higher or an appellate court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the Court whose order is impugned, is sustainable in law and whether it has adopted the correct legal approach. To subserve the purpose of justice delivery system, therefore, it is essential that the Courts should record reasons for its conclusions, whether disposing of the case at admission stage or after regular hearing. The Apex Court also NV,J

referred various judgments in Siemens Engineering and Manufacturing Co., of India Ltd. v. Union of India and another [AIR 1976 SC 1785], Gurdial Singh Fijji v. State of Punjab [(1979) 2 SCC 368] and other judgments in Jawahar Lal Singh v. Naresh Singh and others [(1987) 2 SCC 222], Chabungbambohal Singh v. Union of India [1995 (Suppl.) 2 SCC 83] and Hindustan Times Limited v. Union of India [(1998) 2 SCC 242], concluded that the absence of reasoning as to the mandatory requirement of provision which conferred jurisdiction on the quasi judicial authority or a Court or administrative authority is mandatory. In the absence of reasons, the Court while exercising power of judicial review under Article 226 of Constitution of India can set aside the order impugned in the writ petition."

15. Applying the principle laid down in the above judements to the

present case, the order of suspension is liable to be set-aside. In view

of the foregoing discussion and on perusal of the ratio laid down by this

Court, the impugned order of suspension dated 30.11.2022 is contrary

to the principles of natural justice and also law laid down by this Court

as stated supra.

16. Accordingly, the writ petition is allowed with the following

directions:

i. Impugned order in Ref.No.C/509/22, dated 30.11.2022 is

set-aside.

ii. Respondent No.4 / the Revenue Divisional Officer, Badvel,

Y.S.R. Kadapa District is directed to restore the authorization of NV,J

the petitioner and continue the petitioner as Fair Price Shop

dealer in respect of Shop No.1112015, Rachayapeta Village,

Gopavaram Mandal, Y.S.R.Kadapa District. It is needless to

observe that the Respondents are at liberty to proceed further by

conducting enquiry afresh inaccordance with law.