G.Seshaphani v. The Joint Collector, Kurnool

THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NOs.25011 and 25031 of 2007 COMMON ORDER: Heard Sri K.V.Raghuveer, learned counsel representing the writ petitioners in both these Writ Petitions and the learned Government Pleader for Civil Supplies representing respondents.

2. This Court ordered Notice Before Admission in both these Writ Petitions.

3. The learned Government Pleader for Civil Supplies placed strong reliance on the decision in AZAM SHARIEF vs. REVENUE DIVISIONAL OFFICER AND OTHERS1 and had also further drawn the attention of this Court in Clause 5(4) of A.P. Public Distribution System Control Order, 2001, hereinafter in short referred to as Order for the purpose of convenience, and also further pointed out the relevant portion of the annex to the order in general and clause 5 in particular and further pointed out Form-II, form of authorization, and in particular pointed out to conditions 11 and 13 and would maintain that when a crime had been registered, an order of suspension can be made and hence it cannot be said that the said order is either without authority or without jurisdiction.

4. Per contra, Sri Raghuveer would point out that the relevant clauses of the order and also the annex being not clear, such power cannot be inferred. The counsel also pointed out that in particular to clause 5(4) and would maintain that may be that the said clause may be attracted if confirmed by a Court of law and if merely for the reason that a crime had been registered and an order of suspension made for sufficiently a long time and the criminal proceeding may be pending, in such cases the Fair Price Shop Dealers would be seriously prejudiced. Incidentally the learned counsel also had drawn the attention of this Court to the language employed in the relevant clauses specified above.

5. Heard both the learned counsel.

6. Writ Petition No.25011 of 2007 is filed praying for a Writ of Mandamus declaring the action of the 2nd respondent in issuing the proceedings in Rc.B.1818/2007, dated 5.11.2007 as illegal, arbitrary and against the principles of natural justice and consequently set aside the same and pass such other suitable orders.

7. Likewise Writ Petition No.25031 of 2007 is filed praying for a Writ of Mandamus declaring the action of the 2nd respondent in issuing the proceedings in Rc.B.1818/2007, dated 5.11.2007 as illegal, arbitrary and against the principles of natural justice and consequently set aside the same and pass such other suitable orders.

8. Inasmuch as the questions involved in both these Writ Petitions being common, both these Writ Petitions are being disposed of by this common order.

9. In Writ Petition No.25011 of 2007 it is averred that the Inspector of Police had submitted a brief note to the 2nd respondent stating that the petitioner had been remanded in crime No.179/2007 under Section 409 read with Section 109 of IPC of Kurnool III Town P.S. Kurnool. It is stated that Crime No.179/2007 was lodged by District Manager (FAC) against one V.Rajendra Prasad who was incharge of the MLS point, Kurnool, and the petitioner is in no way concerned with the complaint and there is no allegation against him in the complaint. The complaint was lodged against the incharge of MLS-Point as there was variation of stocks in MLS-point for which the incharge was responsible. The petitioner being a dealer supplied commodities to the card holders on getting the commodities from the MLS point. Further it is averred that the petitioner’s name was falsely included and he was remanded by the police on the alleged that he had transported the rice bags from the incharge of the MLS-point to the private traders. It is stated that the officers who are responsible for the shortage are unnecessarily involving him in the false case without any evidence. It is also stated that the 2nd respondent stating that the petitioner has been remanded in crime No.179 of 2007, had suspended his authorization without any enquiry. It is further stated that the Control Order itself says that only if a dealer is convicted under any offence, he shall be suspended or removed, but mere involvement in a case cannot be a ground for suspension of his authorization. Further it is stated that the 2nd respondent had passed the suspension order in a routine and mechanical way without looking into the Control Order and without making any basic enquiry.

10. The impugned order in the Writ Petition reads as hereunder: “PROCEEDINGS OF THE REVENUE DIVISIONAL OFFICER, KURNOOL PRESENT: Smt. S.Sasi Deivi, M.A., Rc.B 1818/2007 Dated 05.11.2007 Sub: Civil Supplies – Kurnool City – Sri G.Seshapani, F.P. Shop Dealer – Diverting the Essential Commodities into black Market with the help of Godown Incharge, MLS Point, Kurnool – Authorisation suspended pending enquiry –Orders – Issued. Ref: Inspector of Police, Kurnool Town Circle, Brief Note in Cr.No. 179/2007, under Section 409 R/W.109 IPC of Kurnool III Town P.S. Kurnool. ---------- ORDER: The Inspector of Police, Kurnool Town Circle, Kurnool, vide reference read above has reported that Sri G.Seshaphani, F.P. Fhop Dealer, Kurnool, is doing rice business, that he is connived with the accused Rajendra Prasad in charge of MLS Point, Kurnool, and used to purchase rice stock from him at Rs.700/- per quintal as against the government rate of Rs.525/- per quintal and transporting the same to other States, that the incharge of MLS point connived with the F.P. Shop Dealer and private traders and diverted the stocks in piece-meal manner over a period of time, that Sri G.Seshaphani was arrested on 30.11.2007 and sent for remand. Sri G.Seshaphani, F.P. Shop Dealer, Shop No.102, Kurnool City, being a F.P. Shop Dealer, connived with the in charge MLS Point, Kurnool, and doing clandestine business, which is against the provisions of A.P. State Public Distribution System Control Order, 2001. He was also sent for remand on 30.10.2007 as accused in Cr.No.179/2007 under Section 409 R/W 109 IPC of Kurnool III Town P.S. Kurnool. In view of the above, the authorization of Sri G.Seshaphani, F.P. Shop Dealer, Shop No.102, Kurnool City, is hereby suspended pending enquiry into the case. Smt.K.Umadevi, F.P. Shop Dealer, Shop No.105, Kurnool City, is kept in charge of the F.P. Shop No.102. The Assistant Supply Officer, Kurnool, is directed to take necessary action in allotting the essential commodities relating to the F.P. Shop No.102 to Smt.K.Umadevi, F.P. Shop Dealer, Shop No.105, Kurnool City. (An appeal lies before the Joint Collector, Kurnool, within 30 (Thirty) days from the date of receipt of this order). Sd/p S.Sasi Deivi, Revenue Divisional Officer, Kurnool”.

11. Likewise in Writ Petition No.25031 of 2007 it is stated the Inspector of Police had submitted a brief note to the 2nd respondent stating that the petitioner had been remanded in crime No.179/2007 under Section 409 read with Section 109 of IPC of Kurnool III Town P.S. Kurnool. It is stated that Crime No.179/2007 was lodged by District Manager (FAC) against one V.Rajendra Prasad who was incharge of the MLS point, Kurnool, and the petitioner is in no way concerned with the complaint and there is no allegation against him in the complaint. The complaint was lodged against the incharge of MLS-Point as there was variation of stocks in MLS-point for which the incharge was responsible. The petitioner being a dealer supplied commodities to the card holders on getting the commodities from the MLS point. Further it is averred that the petitioner’s name was falsely included and he was remanded by the police on the alleged that he had transported the rice bags from the incharge of the MLS-point to the private traders. It is stated that the officers who are responsible for the shortage are unnecessarily involving him in the false case without any evidence. It is also stated that the 2nd respondent stating that the petitioner has been remanded in crime No.179 of 2007, had suspended his authorization without any enquiry. It is further stated that the Control Order itself says that only if a dealer is convicted under any offence, he shall be suspended or removed, but mere involvement in a case cannot be a ground for suspension of his authorization. It is further averred that the Deputy Tahsildar (CS) on instructions given by the District Supply Officer, came along with the Food Inspector visited the petitioner’s F.P. Shop on 19.10.2007 and they checked the stock register and the coupons and the physical stock available in his shop and he had given statement stating that everything is correct. They had also taken the Xerox copies of sales register, coupons, stock register from his shop and even on their enquiry with 5 (five) cardholders, who were present at that time, have also expressed their satisfaction about his distribution of essential commodities and the said statement was recorded by themselves and a Xerox copy of the same was given to the petitioner duly signing the same. Further it is stated that the 2nd respondent had passed the suspension order in a routine and mechanical way without looking into the Control Order and without making any basic enquiry.

12. The impugned order in the Writ Petition reads as hereunder: “PROCEEDINGS OF THE REVENUE DIVISIONAL OFFICER, KURNOOL PRESENT: Smt. S.Sasi Deivi, M.A., Rc.B 1818/2007 Dated 05.11.2007 Sub: Civil Supplies – Kurnool City – Sri S.Hanumanthaiah, F.P. Shop Dealer – Diverting the Essential Commodities into black Market with the help of Godown Incharge, MLS Point, Kurnool – Authorisation suspended pending enquiry –Orders – Issued. Ref: Inspector of Police, Kurnool Town Circle, Brief Note in Cr.No. 179/2007, under Section 409 R/W.109 IPC of Kurnool III Town P.S. Kurnool. ---------- ORDER: The Inspector of Police, Kurnool Town Circle, Kurnool, vide reference read above has reported that Sri G.Seshaphani, F.P. Fhop Dealer, Kurnool, is doing rice business, that he is connived with the accused Rajendra Prasad in charge of MLS Point, Kurnool, and used to purchase rice stock from him at Rs.700/- per quintal as against the government rate of Rs.525/- per quintal and transporting the same to other States, that the incharge of MLS point connived with the F.P. Shop Dealer and private traders and diverted the stocks in piece-meal manner over a period of time, that Sri G.Seshaphani was arrested on 30.11.2007 and sent for remand. Sri S.Hanumanthaiah, F.P. Shop Dealer, Shop No.73, Kurnool City, being a F.P. Shop Dealer, connived with the in charge MLS Point, Kurnool, and doing clandestine business, which is against the provisions of A.P. State Public Distribution System Control Order, 2001. He was also sent for remand on 30.10.2007 as accused in Cr.No.179/2007 under Section 409 R/W 109 IPC of Kurnool III Town P.S. Kurnool. In view of the above, the authorization of Sri S.Hanumanthaiah, F.P. Shop Dealer, Shop No.73, Kurnool City, is hereby suspended pending enquiry. Sri A.Venugopal, F.P. Shop Dealer, Shop No.74, Kurnool City, is kept in charge of the F.P. Shop No.73. The Assistant Supply Officer, Kurnool, is directed to take necessary action in allotting the essential commodities relating to the F.P. Shop No.73 to Sri A.Venugopal, F.P. Shop Dealer, Shop No.74, Kurnool City. (An appeal lies before the Joint Collector, Kurnool, within 30 (Thirty) days from the date of receipt of this order). Sd/p S.Sasi Deivi, Revenue Divisional Officer, Kurnool”.

13. As can be seen from the impugned orders specified above, the suspension pending enquiry had been made in the light of the fact that a crime had been registered. Clause 5 of the Order deals Issue of Authorisation to Fair Price Shops and Establishments. Clause 5(4) of the Order reads as hereunder: “The appointing authority may, at any time where at the request of the authorized fair price shop or authorized establishment or suo motu after making such enquiry as may be deemed necessary and for reasons to be recorded in writing, add to, amend, vary, suspend or cancel the authorization issued or deemed to be issued to him under this clause. Notwithstanding anything contained in sub-clauses (3) and (4) above, where a fair price shop dealer has been convicted by a Court of law in respect of contravention of any order made Section 3 of the Essential Commodities Act, 1955 (Central Act 10 of 1955) relating to any of the Commodities mentioned in the schedule to this order, the appointing authority, shall, by order in writing, cancel his authorization. Provided that such conviction is set aside in any appeal or revision, the appointing authority may, on application in Form-I made by the person whose authorization has been cancelled, authorization to such person”. reissue

14. No doubt emphasis had been laid by the counsel representing the writ petitioners on the words ‘notwithstanding anything contained in sub-clauses (3) and (4) above, where a fair price shop dealer has been convicted by a Court of law in respect of contravention of any order made in Section 3 of the Essential Commodities Act, 1955 relating to any of the Commodities mentioned in the schedule to this order, the appointing authority, shall, by order in writing, cancel his authorisation’. However, the learned Government Pleader for Civil Supplies had pointed out to the relevant portion of the annex to clause (5) of the said annex which specifies as hereunder: “The authorization issued under this order shall be liable for suspension or cancellation, as the case may, if the fair price shop dealer is involved in any criminal case or when any case under Essential Commodities Act, 1955 or any other similar law is pending against him/her”. Clause 6 of the annex deals with appeal. Form-II dealing with Form of Authorisation specifies several conditions. Conditions 11 and 13 read as hereunder: “The said person shall comply with any directions that appointing authority/Collector/Revenue Divisional Officer/Mandal Revenue Officer/Assistant Supply Officer in regard to purchase, sale or storage for sale of Scheduled Commodities and in regard to the maintenance of accounts, keeping of the registers, returns and issue of receipts and such other matters. The holder of this Authorisation shall not contravene the provisions of the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973 or violate any conditions of the authorization issued under the Order or any other Order relating to food stuffs, sugar or edible oils or edible oil seeds or petroleum products issued under the Essential Commodities Act, 1955 (Central Act of 10 of 1955) or any instructions, directions or orders issued under any such provisions”.

15. The learned Government Pleader for Civil Supplies also placed strong reliance on Azam Sharief’s case (1 supra) and B.VENKATESWARA RAO vs. REVENUE DIVISIONAL OFFICER, BHADRACHALAM, KHAMMAM DISTRICT AND ANOTHER2. The decision in Azam Sharief’s case (1 supra) is a case dealing with the provisions of A.P. Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, but it is stated that the language employed being substantially the same or in pari-materia the ratio laid down in the case may have to be followed. In the said decision, the learned Judge at paragraphs 6 to 9 observed as hereunder: “It is required to notice the nature of the appointment of authorized dealers under the control orders and the rights, if any, conferred upon them. This Court in Writ Petition No.20151/96 had an occasion consider the nature and scope of the rights conferred upon the dealers under the control orders and held as follows: ‘The Government in discharge of its constitutional obligations as a welfare State had undertaken the task of supplying of essential commodities to its citizens through public distribution system. The Government has decided to distribute the essential commodities through the medium of fair price shops established by the Government for which necessary individuals, authorization societies and other institutions from time to time factors and depending upon circumstances. Such authorization in respect of the fair price shop created and established by the Government is granted under the provisions of the A.P. Scheduled Commodities Distribution by Card System) Order, 1973, for short ‘the Control orders’. The scheduled commodities have to be distributed through the said fair price shop to the cardholders. The authorization itself is issued with a view to control the distribution of scheduled commodities to the cardholders and to make the the variety of is granted to various (Regulation itself or supplies available at pre-determined price. The authorised dealer cannot sell or supply even the scheduled commodities to any person except for household consumption and at such price as may be prescribed by the State Government in this behalf. The supply is restricted would automatically come to an end and shall cease to be invalid when the Government undertakes the running of the authorized through a fair price shops either by Government undertaking or a Corporation wholly owned by the Government under a Government scheme. The Government is also at liberty to replace all or any of the fair price shops and entrust the distribution of essential commodities through a shop set by the State Government, State Government undertaking or a Corporation wholly owned by the State Government under a Government Scheme. The policy decision and the guidelines framed by the Government from time to time and the control orders would undoubtedly the paramount reveal consideration in creating or establishing fair price shops is for the convenient of the card holders. The purpose is to supply the essential commodities to the consumers in a convenient and speedy manner avoiding inconvenience to the people and to supply all the essential commodities at a pre-determined cost. the authorities The authorization granted by concerned does not create any right as such in a dealer except such rights which are given by the authorization itself. No person can claim dealership of a fair price shop as a matter of right. No person has any such legal right and much less a fundamental right’. The Supreme Court in Sarkari Sasta Anaj Vikreta Sangh v. State of Madhya Pradesh (1981)4 SCC 471 held that ‘no one can claim a right to run a fair price shop as an agent of the Government. All that he can a Division Bench claim the right to be considered for appointment as an agent of the Government to run a fair price shop’. Similar is the principle laid down by the Court in M.P. Ration Vikreta Sangh Society v. State of Madhya Pradesh (1981) 4 SCC 535. In a slightly different Jagarlamudi context, Lakshminarayana v. District Collector, Ongole (1996) 4 ALD 972 observed that ‘A person, who distributes essential commodities to the cardholders, comes into contact with large number of people who approach him for purchase of essential commodities. Unless the distributor is a man of good character, the image the Government would be subjected inconveniences and also hardships. It is thus clear that no authorized dealer can claim any legal or fundamental right as such except the right which is conferred upon him by the very authorization granted under the control orders. The dealer has no fundamental right to insist that he should be continued as the authorized dealer. The ultimate responsibility for providing a mechanism to distribute the essential commodities in an efficient and speedy manner to its citizens is that of the Government. The authorized dealer appointed under the control orders Government and bound by Government and Government from time to time. The guidelines issued by the Government stipulate that the candidate to be appointed as an authorized dealer should have no adverse antecedents such as criminal cases or any punishment under the Essential Commodities Act, 1955 or pendency of cases under the Essential Commodities Act or pending charges under any criminal law such as legal metrology laws, marketing laws, labour laws etc. or bad conduct on record as a dealer or as an individual. is merely an agent of the decision of issued by the guidelines G.O.Ms.No.198, It is however, urged by the learned counsel for the petitioner that the guidelines issued by the Government from time to time including the one FCS&CA(CS.IV) issued Department, dated 5.2.1996 relate to the appointment of the dealer and they are relevant only for the purpose of appointing the candidates and once appointment is made an action can be taken against the dealer only under the only under the control orders and not in accordance with the guidelines issued for the purpose of regulating the appointment. I express my inability to accede to the submissions. The guidelines issued by the Government do not run counter to the control orders and they can always supplement the control order. There is nothing wrong in the appointing authority taking the fact of the petitioner’s involvement in a serious criminal case and keeping his authorization under suspension pending enquiry. It is required to notice that the petitioner herein remained absent and could not distribute the essential commodities for a period of more than 20 days during his remand in judicial custody and such absence would amount to stopping the working of the shop abruptly without reasonable cause during working hours of working days and without the prior approval of the concerned authorities. Such absence is definitely in violation of Clause 16(2) of the said Control Orders. Such unauthorized absence would give rise to cause for initiating appropriate action for keeping exercise of the power conferred upon under sub- clause (4) of Clause 3 of the control orders, as contravention of any of the provisions of the control orders or for violation of any of the conditions of any of the authorization issued is a ground for keeping the authorization under suspension. It is however, urged, the authorization under suspension that this aspect of the matter is not stated as a ground for suspending the authorization and the reason stated in the counter affidavit in support of the impugned order cannot be taken into consideration. Since it is an order of suspension pending enquiry it need not give an elaborate reason as no rights as such are adjudicated by the impugned order, as the enquiry is yet to be initiated against the petitioner. The fact that the petitioner was remanded to judicial custody on 21.8.1996 is within the knowledge of the Authorised Officer and the impugned proceedings dated 21.9.1996 speaks about the same. It is not as if the Authorised Officer was not aware of the petitioner being remanded to judicial custody on 21.8.1996 and consequently his absence without any reasonable cause and closure of the fair price shop. The impugned order is not one in the nature which adjudicate any of the rights of the petitioner as such, but only a preliminary step taken by the competent authority The petitioner is always entitled to submit his explanation which shall be considered by the respondents before passing order for cancellation of the authorization. Having regard to the facts and circumstances of the case and having regard to the nature of the impugned order which does not substantially affect the rights of the petitioner, if any, I am not inclined to interfere in the matter and set aside the order as prayed for by the petitioner”. for making necessary enquiry.

16. The learned Government Pleader for Civil Supplies also had pointed out that though the decision in B.Venkateswara Rao’s case (2 supra) and also in A.NEELIMA vs. THE JOINT COLLECTOR, KURNOOL3 had been rendered under the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, the scope and ambit of the power had been dealt with in the said decisions. In B.Venkateswara Rao’s case (2 supra), the learned Judge at paragraph 4 observed as hereunder: to suspend “In A.Neelima v. The Joint Collector, Kurnool (1996(1) APLJ 266, the question as to the exercise of the power by the Revenue Divisional Officer suspending the authorization of a fair price shop dealer was considered. It was held therein that though there is the Andhra Pradesh no specific provision Scheduled Commodities (Regulation of Distribution by card System) Order, 1973, with regard to conferment the authorization pending of power enquiry, the power of suspension is a necessary concomitant of the power to grant a privilege or a license and that by virtue of Clause 3(1) of the Control Orders, the appointing authority has been conferred the power to issue authorizations to fair price shop dealers and by Clause 3(4), power is conferred on the appointing authority to suspend or cancel the authorization and therefore the power to suspend the authorization pending the enquiry into cancellation or suspension of the authorization was held to be a power incidental or ancillary and therefore suspend the authorization pending enquiry. It was further held that the rules of principles of natural justice though not completely to be given a go by, non-compliance with the said principles of natural justice or issue of show cause notice is not be insisted upon at this stage”. the appointing authority has power

17. In A.Neelima’s case (3 supra) at paragraphs 7, 8 and 10, the learned Judge observed as hereunder: “It is evident from the above that the Appointing Authority has been invested with the power to interalia suspend or cancel the authorization suo motu after making such enquiry as may be deemed necessary and for reasons to be recorded in writing record reasons this provision, is by way of the exercise of power under by virtue of sub clause (4) of Clause 3. While exercising powers under Appointing Authority (Revenue Divisional Officer) has to make such enquiries as he may consider necessary and must also It is suspending or canceling the authorization. evident provision imposing substantive punishment and it necessarily implies that before exercising the powers under this provision, enquiry has to be conducted and as a necessary corollary thereof, the fair price shop dealer has to be afforded an opportunity of being heard to comply with the requirements of principles of natural justice and also because Clause 3(4) itself speaks of an enquiry. Any order passed under this provision would entail Civil consequences and being in the nature of imposition of penalty, the orders passed in exercise of the powers vested under sub-clause (4) of Clause 3 would necessarily have to be after due enquiry and based on reasons to be recorded therein. Though there is no specific provision in the Control Orders with regard to conferment of power to suspend the authorization pending enquiry, it is fairly settled that the power of suspension is a necessary concomitant of the power to grant a privilege or a license. By virtue of Clause 3(1) of the Control Orders, the appointing authority has been conferred the power to issue authorizations to fair price shop dealers and by Clause 3(4) power is conferred on the appointing authority authorization. It has therefore to be held that the power to suspend the authorization pending the enquiry authorization is a power incidental or ancillary to the aforesaid power and therefore the appointing authority has the power to suspend the authorization pending into cancellation or suspension of to suspend or cancel the appointing authority enquiry. In the light of the above dicta, it must therefore be held that pending the enquiry, the orders of suspension which empowered to pass cannot be passed in a routine way or as a matter of course. The appointing authority (Revenue Divisional Officer) is bound to exercise the discretion reasonably, bona fide and without negligence considering the circumstances of the case whether such suspension pending enquiry is necessary”.

18. In the light of the specific language employed in Clause 5(4) of the Order referred to supra and also in Clause 5 of the annex specified above, the power of the competent authority to make an order of suspension pending enquiry on the ground that a crime had been registered cannot be doubted. It may be that depending upon the facts and circumstances or in a particular given case the authority may consider whether it is a fit matter to keep the fair price shop dealer under suspension. It may be that certain cases may be only technical offences or trivial offences and in such circumstances, the discretion is left to the concerned authority or the competent authority and this Court need not express any further opinion relating to this aspect of the matter. Even otherwise, the writ petitioners are having a remedy even by way of appeal as against these orders. Hence, viewed from any angle, this Court is not inclined to interfere with the order impugned in these Writ Petitions.

19. The Writ Petitions are accordingly dismissed subject to the above observations. There shall be no order as to costs. --------------------- 31.01.2008 SSR LR COPY TO BE MARKED:YES/NO 11997(1) ALD 747. 21996(3) ALD 885. 31996(1) A.P.L.J. 266 (HC)