Rabindra Nath Mandal vs State Of Jharkhand And Ors

This writ petition has been filed under Article 226 of the Constitution of India, whereby and whereunder order dated 31.03.2017 passed in R.M.P. No. 02/2015-16 passed by Deputy Commissioner, Jamtara, by which, the order passed by the Sub-Divisional Officer,Jamtara, as contained in Memo No. 12 dated 11.01.2016 has been declined to be interfered with.

It is the case of the petitioner that under the scheme of Public Distribution System license was provided to run a shop being License No. 23/1987 and since the date of issuance of license, the petitioner is carrying out his business but on a complaint made by the local villagers, an enquiry was conducted, in which, the petitioner has participated but before passing the order of cancellation of license, no opportunity of hearing was given and this aspect of the matter has been raised in appeal by the petitioner but the same has not been answered by the appellate authority, therefore, the order passed by the Deputy Commissioner, Jamtara, who has declined to interfere with the original order passed by S.D.O., Jamtara, has been challenged before this Court on the ground of violation of principles of natural justice.

This Court after hearing the learned counsel for the petitioner on 23.04.2018 has passed order directing the respondent-State to file counter affidavit by specifically making a statement to the effect as to whether before cancellation of P.D.S license, the opportunity of hearing was provided to the petitioner or not.

Counter affidavit has been filed by the respondent-State wherein the issue has been discussed in detail, so far as legality and propriety of the order is concerned, but so far question of providing opportunity of hearing to the petitioner is concerned, statement has been made that the petitioner was noticed and heard on 28.12.2016/31.03.2017 and as such according to respondents there is sufficient compliance of principles of natural justice.

Mr. Subham Mishra, learned counsel for the petitioner in response has submitted (oral) that the opportunity of hearing was to be provided to him before cancellation of the license and it is not that no notice is required to be issued if the petitioner preferred appeal before the appellate authority against order of cancellation. His further submission is that following of principles of natural justice at the appellate stage will not rectify the defect already crept up at the time of passing of the original order of cancellation by the licensing authority.

Mr. Navin Kumar, learned counsel for the respondent-State by referring to original order of cancellation of license dated 11.01.2016 has submitted that the petitioner has been provided with an opportunity of hearing in course of enquiry and as such it can be said to be sufficient compliance of principles of natural justice.

Having heard learned counsel for the parties and on appreciation of the rival submissions, the undisputed fact in this case is that the license has been issued in favour of the petitioner under the provisions of Public Distribution System (Control) Order, 2001 (herein after referred to as "Order, 2001") being License No. 23/1987. Some villagers have complained about certain irregularities in distribution of food-grains and other products, upon which, an enquiry was conducted, in which, certain documents have been sought for from the petitioner as would appear from order dated 11.01.2016 wherein reference of Stock Register, Distribution Register and list of Card Holders have been demanded but the petitioner has not provided the copy of Stock Register. The licensing authority accepting the enquiry report cancelled the license of the petitioner, against which, an appeal was preferred by the petitioner before the appellate authority under Order 15 of the Order, 2001 by raising the point before the appellate authority that before cancelling the license no opportunity of hearing was provided to the petitioner. The appellate authority has passed the order declining to interfere with the order passed by the licensing authority as contained in Memo No. 12 dated 11.01.2016, against which this writ petition has been filed.

This Court before looking into the legality and propriety of the impugned order first thinks to refer herein that the original order dated 11.01.2016 has not been challenged but that will not prejudice the case of the petitioner in view of the principle that since the original order dated 11.01.2016 has been appealed before the appellate authority, the appellate authority has either to concur or disagree with the original order, as such the original order will merge with the order of higher forum and, therefore, even if the petitioner has not challenged the original order passed by licensing authority, since appellate order is under challenge, the original order would not come in the way for adjudication of the writ petition.

So far question of providing of opportunity as to whether it is required to be provided at the stage of the original order or before the appellate stage, this Court is of the view that since after having license been given in favour of the petitioner by the competent authority a right has been accrued in his favour. The petitioner has started carrying out the distribution as per the condition of the license but on some complaint being made by the local villagers an enquiry was conducted. Although, in the enquiry he has participated but the question is only due to participation in the enquiry, the petitioner can be denied the opportunity of hearing before passing the order of cancellation of license and if it has been done so can it not be said to be in violation of principles of natural justice.

It is not in dispute that enquiry has been conducted by the authority on the complaint made by the local villagers, which will be said to be a fact finding enquiry. Meaning thereby, it has been initiated to look into the veracity of the complaint made against the petitioner by the local villagers. Although in the said enquiry, the petitioner has appeared and participated by disputing the allegation made against him by the complainants.

The provisions of Order 7 of the Order, 2001, which is applicable in the instant case, is quoted herein below:

"7.Suspension and Cancellation of the Licence:-

(i) In the light of Hon'ble Supreme Court order in Civil Writ Petition 196/2001, action will be taken against the licensee in following situation:-

Lincensees, who

(a) do not keep their shops open through out the month during the stipulated period,

(b) fail to provide grain to BPL families strictly at BPL rates and no higher,

(c) keep the cards BPL household with them, (d)make false entries in the BPL cards,

(e) engage in black marketing siphoning away grains to the open market and hand over such ration shops to such other person/organisations shall make themselves liable for cancellation of their license. The concerned authorities/functionaries would not show any laxity on the subject.

(ii).If any licensee contravenes any provision or any terms and conditions of license or any of his duties and responsibilities of any order of State Government then without prejudice to any other action that may be taken against him under the Essential Commodities Act, 1955 (Central Act 10 of 1955), his license may be cancelled by the Licensing Authority by written order.

No other of cancellation shall be made under this clause unless the licensee has been given a reasonable opportunity starting its case against the proposed cancellation." The similar matter shall be disposed by the Licensing Authority within a month.

(iii) omitted

(iv) omitted

(v) omitted

(vi) Allocation to PDS dealers shall not be discontinued under any circumstance. In case of cancellation of licence allocation to a PDS dealer should tagged to the nearest PDS dealer.

(vii) After cancellation of licence of the of the Licensee the consumers shall be tagged to the nearest PDS shops by the respective Block Supply Officer/In charge Block Supply Officer/Supply Inspector.

(viii) In general circumstances the tagging of consumers shall not be changed.

(ix) All Consumers of APL, BPL and Antoyodaya living within the area earmarked for a PDS dealer should be tagged to such a PDS dealer."

Order 7 (ii) pertains to the decision to be taken by the licensing authority as enshrined under Essential Commodities Act, 1955 for cancellation of license by licensing authority by a written order but no such cancellation shall be made under this clause unless licensee has been given a reasonable opportunity stating its case against the proposed cancellation.

It is evident from the provisions made under Order 7(ii) that the notice is required to be given at the stage of cancellation of licence and not only that even in case of proposal to cancellation of license.

Therefore, the stand which has been taken by the respondent that in the enquiry the petitioner has been provided opportunity is contrary to statutory provision, as contained in Order 7 (ii) of the Order, 2001.

The further contention of learned counsel for the respondent is that in the appeal, the opportunity of hearing has been given but that stand has also not to any aid to the State authority in justifying the order passed by the licensing authority, so far as it relates to providing opportunity of hearing/reasonable opportunity, since, as already referred above, before cancellation of licence, it is incumbent upon the licensing authority to provide reasonable opportunity against the proposed cancellation meaning thereby before taking any decision for cancellation of the license, a show cause notice is to be issued by specifically reflecting therein the proposed cancellation of license in the show cause by asking reply and by making reference of its cancellation on the ground which has been crept up against the petitioner after the fact finding enquiry.

The said issue has been raised by the petitioner before the appellate authority but the appellate authority has not taken into consideration and hence this Court is not in any difficulty in holding that the appellate authority while denying to interfere with the order passed by the licensing authority has committed gross illegality by forgoing the statutory provision as contained in Order 7 (ii) of Order, 2001.

It is settled position of law that if any statute has been made, the authority who has conferred power to act in pursuance to said statutory provision, he is supposed to act in consonance with that statute and if any of the part of the statute is being flouted in taking any decision it would be said to be not in consonance with the Statue.

In view thereof, order dated 31.03.2017 passed in R.M.P. No. 02/2015-16 is quashed.

This Court at this stage needs to refer that since the question of providing an opportunity is to be at the stage of cancellation of license, as being reflected from the provision of Order 7(ii) of Order, 2001, therefore, the matter needs to be remitted from the stage of the cancellation of the license, as has been done vide order dated 11.01.2016 by directing the licensing authority i.e. Sub-Divisional Officer, Jamtara to take a fresh decision by issuing show cause notice in favour of the petitioner within a period of three weeks from the date of receipt/production of copy of this order by making specific stipulation with respect to the alleged commission of irregularities.

The petitioner is directed to give reply to the said show cause notice as would be directed by the licensing authority, upon which the licensing authority is directed to pass order within a period of three weeks thereafter.

It is clarified that the petitioner would co-operate with the proceeding, and if the petitioner does not co-operates, the licensing authority will be at liberty to take decision in accordance with law.

It further needs to make it clear that further continuation of the license of the petitioner will be subject to final outcome of the order passed by the licensing authority.

Accordingly, the writ petition stands disposed of.