Kab Food Agency & Anr vs State Of West Bengal & Ors
2023 Latest Caselaw 1692 Cal

                     IN THE HIGH COURT AT CALCUTTA
                      Constitutional Writ Jurisdiction
                                  Appellate Side



Present:

The Hon'ble Justice Jay Sengupta



                            WPA 19416 of 2022

                         KAB Food Agency & Anr.

                                    Versus

                        State of West Bengal & Ors.



For the petitioner            :       Mr. Shyamal Sarkar
                                      Mr. Ramesh Dhara
                                      Ms. Mousumi Chowdhury
                                                             .....Advocates
For the State                 :       Mr. Susovan Sengupta
                                      Mr. Subir Pal
                                                             .....Advocates


Heard lastly on               :       02.12.2022

Judgment on                   :       15.03.2023

Jay Sengupta, J.:

1.    This is an application under Article 226 of the Constitution of India

praying for directions upon the respondents to rescind, recall and withdraw

the impugned notification published in the Website and vacancy notification

dated July 29th 2022.

2. On 01.12.2009, the respondent authority issued a public notice

inviting offers for appointment of authorised wholesalers for the areas

Asansol, Burnpur and Kulti. On 29.01.2010 the petitioner firm, being a

successful candidate, was appointed as an authorised wholesaler at the

location and the petitioners was granted relevant licences including licence

under the West Bengal Urban Public Distribution System (Maintenance and

Control) Order, 2013. The petitioner has been carrying on this business by

investing substantial sums of money. The firm was being issued advice list

every month for supply of articles to the Ration Cards, through tagged

dealers. Even in August 2022, the petitioner firm was issued an advice list.

However, thereafter the State Government published in its Website that they

are going to notify vacancy in respect of 25 areas under the 2013 Control

Order. On 29.07.2022, the State Government published a vacancy

notification inviting application for appointment of wholesalers for the area

Kulti-Burnpur.

3. Mr. Shyamal Sarkar, learned senior counsel appearing on behalf of

the petitioner submitted as follows. First, no action could be taken under

the Control Order of 2013 as the Control Order of 2015 had already come

into force. The petitioners had invested a lot in the project. They employed

about 42 persons and were even paying for their provident fund and

gratuity. If at this stage the area of operation was curtailed, then the same

would cause severe prejudice to them. Besides, the process of declaring

vacancy was not clear. In fact, there was no need to declare vacancy in the

particular area and for this declaration of vacancy. The conditions of para

17 of the 2013 Control Order were not satisfied. The approach of the

respondent authorities had been absolutely wrong. Number of Ration Cards

was an absolutely fortuitous circumstance. Ration Cards were not tagged

with the wholesaler, those were tagged with dealers. It were the dealers that

a wholesaler dealt with. The power to promulgate a Control Order came from

Section 3 of the Essential Commodities Act. Only the Central Government

could do so under Section 3 of the said Act. 2001 Control Order delegated

certain powers to the States pursuant to which the State Control Order of

2013 was introduced. Thereafter, 2001 Control Order was superseded by

the Central Control Order of 2015. There was a big difference in the two

control orders. The concept of delegation of powers differed in the two. Here,

the hands of the statute were more tied. Even if one went by the 2013

Control Order, para 29 of it could be referred to. This dealt with actions in

case of irregularity. Without anything of this sort having happened, the

petitioner's volume of business was reduced. An issue was raised regarding

transport of goods. In fact, there was a rebate available for transport beyond

8 kilometers. Therefore, the wholesaler need not be of the nearby place. For

a place beyond 20 kilometers, an undertaking was to be given not to claim

rebate. The State was duty bound to show under which provision it was

curtailing the petitioner's business. Reliance was placed on a decision

reported at 79 CWN 883. Article 19(1) (g) of the Constitution was higher

than Article 14. A reference might be made to the decision reported at (2007)

3 CHN 476. In the instant case, the proposal in question was not disclosed.

It was settled law that if a document was not disclosed in the writ petition,

the persons supposed to disclose the same would be estopped from relying

on it. Reliance was placed on the decisions reported at (1988) 4 SCC 534

and (1994) 1 SCC 1. There were, however, inconsistencies in the opposition

where it was claimed that creation of vacancy was an administrative

decision. There was no allegation whatsoever that the petitioner was not

acting in public interest or was not being able to cater to anyone. On the

question of promissory estoppel and vested interest, reliance was placed on

the decisions reported at (2004) 6 SCC 465 and (2011) 6 SCC 570. The

word 'supersedes' meant 'repeals' (Blacks Law Dictionary). The 2015 Control

Order came after the NFS Act. Therefore, 2001 Control Order mentioned

therein should be read as the Control Order of 2015. On this, reference

might be made to Section 8 of the General Clauses Act. Reliance was placed

on the decision reported at (2017) 11 SCC 62. Even the Control Order of

2015 did not have any provision for reducing business. Section 24 was not

applicable. There was indeed inconsistency between provisions regarding

licensing in the Control Orders of 2001 and 2015. On the question of vested

right, reliance was placed on a decision reported at (2011) 6 SCC 570. While

reading a judgment one had to remember that what was decided in a case

was not to be treated as statue. Reliance was placed on (2006) 1 SCC 368.

The decision in Gour Chandra Gorai (supra) was distinguishable in as much

as the Control Order of 2013 did not come by then. In Gitashri Dutta's Case,

Civil Appeal No. 4254 of 2022, the facts were completely different in as

much as they were only selected and therefore, there was no vested right.

The averments of facts made in this regard could not be sufficiently dealt

with by the petitioner.

4. Mr. Susovan Sengupta, learned counsel appearing on behalf of the

State, submitted as follows. Section 3 (1) of the Essential Commodities Act

was indeed the fountain head of all powers. In 2013, National Food Security

Act was propounded. Section 24 referred to the obligation of the State

Government for food security. In this Act the Control Order of 2001 was

referred to. Therefore, even if the Control Order of 2001 went, 2013 Control

Order would still remain. In fact, if renewal of licence under the 2000

Control Order was found invalid then the petitioner's licence would also go.

Neither the Central Act nor the Central Control Orders or the State Control

Orders, 2013 gave the right of getting minimum number of dealers. Likewise

in case of dealers, there was no right to have minimum number of

consumers to be tagged with them. Vested right as claimed by the writ

petitioners was not at all available. The writ petitioners herein were licensees

only. Even if any de-tagging of such number of FPS dealers within the

subject area pursuant to vacancy notice dated July 29, 2022 be made, such

course of action regarding de-tagging could not be held to be arbitrary as the

process was being initiated at the behest of the State respondents

culminating in the issuance of notice of vacancy. Such course of action did

not offend either any constitutional provision or any statutory provisions

with regard to declaration of vacancy of wholesaler for those two subject

areas i.e. Kulti and Burnpur. The wholesaler vacancy was purely within the

domain of the administrative discretion of the Department. There were two

existing plenary legislations i.e. Essential Commodities Act, 1995 and the

National Food Security Act, 2013. Both the Acts in question as stated above

empowered the States including the State of West Bengal to act with regard

to maintaining or increasing supply of any essential commodities or for

securing their distribution and availability at fair prices. Sub-section(1) of

Section 3 of the Essential Commodities Act, 1955 was the fountain of all the

powers regarding maintaining or increasing supplies of any essential

commodities or for securing their distribution and availability at fair prices

and Section 5 of the said Act was with regard to delegation of powers in

favour of the State Government or such officer or authority sub-ordinate to

the State Government. Even if the Central Control Order 2001 were not

there at that point of time that did not debar the State of West Bengal to

promulgate State Control Order of 2003 (since repealed). Likewise, the State

Control Orders, 2013 being promulgated by the State of West Bengal and

not being contrary to either the provisions incorporated in the E.C. Act,

1955 or the provisions incorporated in the NFSA, 2013, the same were still

subsisting. The Central Control Order, 2001 and the State Control Orders,

i.e. 2013 Control Orders were treated to be sub-ordinate legislations. The

Central Government issued the Targeted Public Distribution System

(Control) Order, 2015 on 20.02.2015 empowering the State Government to

act in terms of the provisions of the said Control Order and such provisions

incorporated in the Central Control Order could not be an exhaustive one

and such Control Order was also a sub-ordinate legislation. As per the

provisions incorporated in the National Food Security Act (NFSA), the State

Government had been bestowed upon with all the powers as envisaged in

sub-section (1) of Section 3 of the Essential Commodities Act. The State

Control Orders, 2013 were very much in existence in view of Section 24 of

the Central Clauses Act, 1897 and there was no subsequent notification

superseding the provisions incorporated in the State Control Order, 2013.

Even if no State Control Order had been promulgated in terms of TPDS

Control Order, 2015, the existing State Control Orders, 2013 were still in

force in view of the fact that certain provisions of NFSA were yet to be

implemented fully till date and as such, there was no scope of supersession

of Central Control Order, 2001 in view of the proviso to sub-clause (2) of

Clause 1 of the TPDS Control Order 2015. Reliance was placed on the

decision dated 08.11.2016 passed in the matter of 31930(W) of 2013 (Gour

Chandra Gorai & Ors. Vs. The State of West Bengal).

5. I heard the submissions of learned counsels appearing on behalf of

the parties and perused the writ petition, the affidavits and the written notes

of submissions.

6. The NFS Act, 2013 referred to the Central Control Order of 2001

because by the time the former was promulgated, the subsequent Targeted

Public Distribution System Act of 2015 had not come into force. Therefore,

the reference does not amount to a post-2015 revalidation of the Central

Control Order of 2001.

7. The West Bengal Urban Public Distribution System (Maintenance and

Control) of 2013 has, thus, spent its force as the same had been brought in

pursuance of the said Control Order. The State Government is indeed yet to

formulate a Control Order in terms of the Central Control Order of 2015.

8. However, this does not mean that the entire Public Distribution

System would have to come to a grinding halt.

9. An Hon'ble Division Bench of this Court, in Sekh Abdul Majed vs.

State of West Bengal & Ors., 2022 SCC Online Cal 3030, laid down as

follows - "54. When learned Advocate General being the highest officer of the

State and supposed to be in know of the facts is submitting that 'NFS Act'

has not yet been implemented in full in the State, in absence of positive

averments in the pleadings in the writ petition by the petitioner-appellant,

we cannot simply deny the assertion made by learned Advocate General.

Clause 2 of 'Central Control Order, 2015' clearly negated the contention

raised by Mr. Kar, learned senior counsel appearing for the appellant and it

cannot be held that 'Rural Control Order, 2013 and 'Urban Control Order,

2013' are non-existent in view of supersession of 'Central Control Order,

2001'. In view of such fact the amendment carried out by the State

Government in both the aforesaid Control Order of 2013 cannot be held to

be invalid.'"

10. Therefore, till the NFS Act is fully implemented in the State, one may

fairly continue to take steps in terms of the State Control Orders of 2013.

11. Thus, it cannot be said that the impugned vacancy notification is bad

simply because it was passed in terms of the State Control Order of 2013.

12. Next comes the question of whether the petitioner firm could hold on

to its wholesale business for the larger area simply because it was engaged

to do so at a particular point of time. It appears that the petitioner firm was

engaged in such capacity to operate in three different sub-areas of the

Asansol sub control, namely Asansol, Kulti and Burnpur. There is also no

difficulty in accepting that the petitioner must have spent a substantial sum

of money to build the infrastructure and operate the business. The

petitioner firm has carried on such business since 2010 and must have

earned returns from the same keeping in mind the risks involved in any

such business. However, it is also true that the petitioner is a licensee

engaged by the State for a particular purpose subject to certain terms and

for a particular period of time, the licence being renewable from time to time.

But, there is no law which grants the petitioner an absolute right to hold on

to such business in perpetuity. Such business would obviously be subject to

the reasonable policy decisions made by the State.

13. It is also quite acceptable that the number of cards or, for that matter,

the volume of business attached to a particular entity is a fortuitous

circumstance. It may go up or it may come down for a varied number of

reasons. However, the averments of the State at paragraph 13 of its

Opposition cannot be overlooked either. The State claimed that at the time

of initiation of the proposal for creation of wholesaler vacancy at Burnpur

and Kulti sub areas, the ration card population tagged with the petitioner

firm was 45,2145/- and even after detagging of the ration card population of

Burnpur and Kulti sub areas, the ration card position of the petitioner firm

would be to 2,55,002/-, which was more than the ration card position of

other wholesalers operating in the Asansol sub control. But, the factual

aspect referred to above could not be disputed by the petitioner firmly in

Reply.

14. The present action of the respondents was not a penal one. However,

if a periodic assessment of ration card position of the wholesalers and

rationalisation of ration cards is found necessary for the smooth functioning

of the Public Distribution System, it shall be well within the administrative

discretion of the department to do so as a matter of policy. Thus, the State

would also retain the discretion whether to engage another wholesaler for

the sub areas or not. After all, a particular entity cannot claim a monopoly

over the ration card population of a particular area.

15. The policy of State to encourage to different entities to cater to the

needs of the people under the Public Distribution System, thus preventing

monopolies in this, is quite sound and well tested. This Court does not find

any procedural flaw or arbitrariness in such policy decision or in issuing the

impugned vacancy notification. This Court would, thus, desist from

interfering with such fair and reasonable policy decisions of the Executive.

16. In view of the above discussions, I do not find any merit in this

application.

17. Accordingly, the writ petition is dismissed.

18. However, there shall be no order as to costs.

19. Urgent photostat certified copies of this judgment may be delivered to

the learned Advocates for the parties, if applied for, upon compliance of all

formalities.

(Jay Sengupta, J.)

Later

After delivery of the judgment, Mr. Dhara, learned counsel for the

petitioner, prays for a stay of this order.

The prayer is considered and is rejected.

Let this order be treated to be a part of the judgment delivered earlier

today.

(Jay Sengupta, J.)

S.M