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1990 DIGILAW 519 (ALL)

Ram Awadh v. State of U. P

1990-05-10

R.A.SHARMA, V.K.KHANNA

body1990
JUDGMENT V.K. Khanna, J. - These are connected writ petitions raising similar questions of law. Learned counsel appearing for the petitioners in these writ petitions and Sri N.L. Ganguley, Standing Counsel appearing for the State have stated that these writ petitions be heard together. These writ petitions are, therefore, being disposed of by a common judgment. 2. Brief facts for the purposes of adjudicating the questions raised in these writ petitions are that for the purposes of distribution and sale of food grains and other essential commodities the State Government had authorised the District Magistrate/District Supply Officers/Town Rationing Officers to appoint agents called the Authorised Retail Distributors. It is not being disputed that the appointment is made by means of a written agreement executed by one or the other officers mentioned above as well as the authorised agents appointed by the aforesaid officer. The terms and conditions of the appointment of these authorised agents have not been provided by any statutory order and is solely governed by the terms and conditions incorporated in the agreement. All the petitioners in the writ petitions before us are such authorised retail distributors who are running fair price shops in the State of Uttar Pradesh under written agreements which had been executed as stated above. 3. According to the counter-affidavit which has been filed by Sri Tej Bahadur Khare in leading writ petition No. 24832 of 1989 it has been stated that the State Government to improve the system of distribution of essential commodities at fair price shops passed Uttar Pradesh Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989 in exercise of the powers under Section 3 of the Essential Commodities Act, 1955. The aforesaid order has been passed forgiving one composite licence of foodstuffs i.e. oil, sugar, food grains etc. However, in this order under Section 1(4) it has been provided that the order shall not apply to the clauses as enumerated therein and under clause 1(4) (g) it has been provided that this order shall also not apply to any authorised retail distributor appointed under the U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989. The State Government on the same day in exercise of the powers under Section 3 of the Essential Commodities Act passed U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989. This Order was also passed for equitable distribution and availability of essential commodities at fair prices. The State Government on the same day in exercise of the powers under Section 3 of the Essential Commodities Act passed U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989. This Order was also passed for equitable distribution and availability of essential commodities at fair prices. In clause 2(d) the 'Authorised Retail Distributor has been defined to be a person appointed by the District Magistrate, City Magistrate or Sub-Divisional Magistrate for selling scheduled commodities. Under Clause 2(d) `scheduled commodity' has been defined under Schedule I to mean wheat, rice, pulses, sugar, edible oils, kerosene oil, soft coke and controlled cloth. From a perusal of the aforesaid order it is clear that fair price shops for the equitable distribution of the essential commodities shall be given only to authorised persons in respect of scheduled commodities which are given in Schedule I and are not required to have licences for selling scheduled commodities which are covered under the U.P. Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989 in view of the provisions of Clause 1(4) (g) of the aforesaid Order. 4. In the counter affidavit it has also been alleged that the Government Order dated 23-9-1989 has only been passed to provide guidelines to the Collectors for selecting the authorised retail distributors. However, it is stated that the Government Order does not take away the power of the District Magistrate to exercise the powers under Section 2(b) of the U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989. 5. The District Magistrate of various districts of the State in exercise of this power under these two new Control Orders have authorised several persons in the rural areas for equitable distribution of the essential commodities and have stopped supply of monthly quota to the petitioners in all these writ petitions who had been appointed authorised dealers in pursuance of the agreement which had been executed between them and the authorised as mentioned above. The petitioners feeling aggrieved by the action of the respondents in stopping monthly quota of the essential commodities have filed the present writ petitions challenging the action of the respondents being illegal and arbitrary. 6. The petitioners feeling aggrieved by the action of the respondents in stopping monthly quota of the essential commodities have filed the present writ petitions challenging the action of the respondents being illegal and arbitrary. 6. It may be mentioned that at the time of the presentation of the writ petitions the stand of the State Government was not clear as to whether the contracts under which the various petitioners have been appointed as authorised agents to run the fair price shop have been terminated or not. It was for this reason that in practically all the cases interim orders were granted by this Court that the respondents shall not withhold the quota of the petitioners for distributing the essential commodities in the fair price shops, on the basis of the Government Order dated 23rd September, 1989 provided the petitioners had subsisting contracts in their favour. The idea was that in case the contracts have not been terminated by the respondents the fair price shop dealers may get the quota and the public may not suffer due to closure of fair price shops. It may be mentioned that in some of the cases the applications for renewal/extension of the contracts were pending in those cases the court had passed interim orders that the applications for renewal if made in terms and in accordance with law be considered on merits ignoring the notification dated 28th September, 1989 issued by the State Government. As stated above, the State Government in the counter- affidavit filed in leading writ petition has taken up the stand that the State Government in exercise of the powers under Section 3 of the Essential Commodities Act, 1955 has passed Uttar Pradesh Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989 and the Uttar Pradesh Scheduled Commodities (Regulation of Distribution) Order, 1989 and now no person other than the authorised retail distributor shall sell any of the scheduled commodities supplied by the Government for distribution under this Order. It has also been urged that now there is no question of taking any licence in view of the specific provisions of the Uttar Pradesh Scheduled Commodities Dealers (Licensing and Restriction of Hoarding) Order, 1989 inasmuch as in view of the Clause 1(g) of the aforesaid Order, the provisions of the aforesaid Order for having a licence would not apply to any authorised retail distributor appointed under the Uttar Pradesh Scheduled Commodities (Regulation of Distribution) Order, 1989. It has thus been urged that there was no question of now renewing any licence in so far as the running of the fair price shops are concerned. 7. Learned counsel appearing for the respondents has raised a preliminary objection that the petitioners have no legal right to maintain these writ petitions under Article 226 of the Constitution in view of the Full Bench decision of this Court in the case of Shital Prasad v. M. Saidullah, AIR 1975 All 344 and also of the Supreme Court decision in the case of S. Chandra Shekharan v. Govt. of Tamil Nadu, AIR 1974 SC 1543 and the latest pronouncement of the Supreme Court in the case of Bareilly Development Authority v. Ajay Pal Singh, AIR 1989 SC 1076 . 8. As far as the appointment of the petitioners as authorised retail distributors is concerned, the same is regulated entirely by the terms and conditions incorporated in the agreements and as has been held consistently by this Court and also by the Supreme Court, the agreement entitles the District Magistrate and other authorities to terminate the agreement at any time without assigning any reason therefor. The Supreme Court in the case of S. Chandara Shekharan (supra) in a similar matter ruled that the relationship between the State and the petitioner was purely contractual and that the contracts having itself provided for termination of the agency, the termination was perfectly valid. It was also held that the infringement, if any, of the petitioners right was merely that of a contractual right and consequently there was no question of following the principles of natural justice. It was also held that the petitioner has no legal right to trade in levy sugar. 9. It may also be noticed that the matter came up for consideration before a Division Bench of this Court in the case of M/s. Raj Kumar Sheo Kumar v. Addl. It was also held that the petitioner has no legal right to trade in levy sugar. 9. It may also be noticed that the matter came up for consideration before a Division Bench of this Court in the case of M/s. Raj Kumar Sheo Kumar v. Addl. District Magistrate (Civil Supplies), 1981 All LJ 261. The Bench after relying on the decisions referred to above' held that the rights of the authorised retailers were purely contractual and that they had no right to maintain the writ petition. The Collector could unilaterally terminate the contract without assigning any reason and there was no question of breach of principles of natural justice. This decision was challenged before the Supreme Court which dismissed the special leave petition by upholding the judgment of this court and the impugned orders passed by the Government of Uttar Pradesh in respect of termination of agreements of fair price shops was upheld. 10. In all the writ petitions the petitioners have come with the case that they have a concluded contract under which they have been appointed authorised retail distributors to run the fair price shops. In case the arguments raised by the petitioners is accepted that the Government is now not giving them monthly quota, the action of the Government may at best be said to be breach of the terms of the contract. Recently the Supreme Court had the occasion of dealing with a similar situation in the case of Bareilly Development Authority (supra). In this case it was held as follows (Para 19) :- "Thus the factual position in this case clearly and unambiguously reveals that the respondents after voluntarily accepting the conditions imposed by the BDA have entered into realm of concluded contract pure and simple with the BDA and hence the respondents can only claim the right conferred upon them by the said contract and are bound by the terms of the contract unless some statute steps in and confers of some special statutory obligations on the part of the BDA in the contractual field. In the case before, us, the contract between the respondents and the BDA does not contain any statutory terms and/or conditions. When the factual position is so. In the case before, us, the contract between the respondents and the BDA does not contain any statutory terms and/or conditions. When the factual position is so. the High Court placing reliance on the decision in Ramana Dayaram Shetty's case, AIR 1979 SC 1628 has erroneously held : "It has not been disputed that the contesting opposite party is included within the term `other authority' mentioned under Article 12 of the Constitution. Therefore, the contesting opposite parties cannot be permitted, to act arbitrarily with the relevance. When an authority appears acting unreasonably this Court is not powerless and a writ of mandamus can be issued for performing its duty free from arbitrariness of unreasonableness." This finding, in our view, is not correct in the light of the facts and circumstances of this case because in Ramana Dayaram Shetty's case there was no concluded contract as in this case. Even conceding that the BDA has the trappings of a State or would be comprehended in `other authority' for the purpose of Article 12 of the Constitution, while determining price of the houses/flats constructed by it and the rate of monthly instalments to be paid, the authority or its agent after entering into the field of ordinary contract acts purely in its executive capacity. Thereafter the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se. In this sphere, they can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the authority (i.e. BDA in this case) in the said contractual field." It has not been disputed that the contracts which have been entered into between the petitioners in these writ petitions and the authorities are purely non-statutory concluded contracts. The rights of the petitioners are purely governed by the terms of the contract which gives the District Magistrate/other competent authority to terminate the contracts without assigning any reason unilaterally. In view of the law laid down by the Supreme Court in the case of Bareilly Development Authority (supra) in case the complaint of the petitioners is that there has been a breach of the terms of the contract entered into between the petitioners and the authority, the remedy is not a petition under Article 226 of the Constitution as ruled by the Supreme Court. The aggrieved party in such case has only that remedy which is available to any person complaining of breach of contract i.e. by instituting a civil suit for the appropriate relief. It is thus clear that on the basis of the contracts which have been entered into between the petitioners and the District Magistrate/other authorities none of the petitioners have a right to file the present writ petition. 11. We have heard learned counsel for the petitioners also on the question as to whether the Government Order dated 28th September, 1989 suffers from the vice of being arbitrary and thus being violative of Article 14 of the Constitution of India. A careful reading of the aforesaid Government Order would show that the Government was receiving complaints regarding the working of the fair price shops in the rural areas. The Government therefore, decided that the elected body i.e. the Gaon Sabha should be given a right to recommend the person who should run the fair price shop in the rural areas concerned and also that they should have a control on their working. One can possibly find nothing had in the aforesaid policy of the Government inasmuch as the elected representative of the persons who were going to be served through the fair price shops were being made responsible for recommending the name of the person who should run the fair price shop and the elected persons were also being given the authority to control the working of the fair price shops. The policy, in our opinion, far from being arbitrary is reasonable and has been devised so that the elected representatives of the persons who were going to be served through the fair price shops may have a full control over the working of the fair price shops. 12. In some writ petitions a grievance has been raised that the licences are not being renewed. 12. In some writ petitions a grievance has been raised that the licences are not being renewed. As has been stated above there is now no question of taking any licence under any of the Order issued under Section 3 of the Essential Commodities Act as from 31st August, 1989 the State Government for maintaining the supplies of food grains and other essential commodities and for securing their equitable distribution and availability at a fair price will be appointing authorised retail distributors and such an authorised retail distributor shall not be required to draw licence in view of the provisions of clause (1)(g) of the U.P. Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989. The petitioners, thus, in our opinion, have no legal right even for renewal of their licences and extension of their contracts as the authorised retail distributors will now be appointed under the New Orders, 1989 i.e. Uttar Pradesh Scheduled Commodities (Regulation of the Distribution) Order, 1989. As has been stated above, the State Government had issued a notification providing a guideline to the District Magistrates for appointment of the authorised retail distributors as has been laid down in the Government policy which has been discussed in the forgoing paragraphs. We have already held that we can not find any thing wrong with the aforesaid policy laid down by the Government. 13. Before parting it may he observed that some of the petitioners have raised arguments in connection with supply of only one of the scheduled commodities i.e. kerosene oil. It has been urged that even after the coming of the two orders in 1989 an authorised dealer appointed under the Order 1989 will have to draw a licence under the U.P. Kerosene Control Order, 1962 inasmuch as Kerosene oil is not a commodity which has been mentioned in Schedule 1 of the U.P. Schedule Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989. The precise argument is that under clause 1(g) the authorised retail distributor appointed under the U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989 is not required to draw the licence under the U.P. Essential Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989 if he is a dealer with scheduled commodities as indicated in Schedule 1. The precise argument is that under clause 1(g) the authorised retail distributor appointed under the U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989 is not required to draw the licence under the U.P. Essential Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989 if he is a dealer with scheduled commodities as indicated in Schedule 1. It is correct that in Schedule I to the aforesaid Order kerosene oil has not been mentioned as one of the commodities and thus no licence is required for a dealer to deal in kerosene oil, and the licence will have to be drawn under Kerosene Control Order, 1962. Some of the petitioners having been appointed authorised retail distributors in respect of kerosene oil have on the basis of the aforesaid arguments urged that they have got subsisting licences under the Kerosene Control Order, 1962 and thus they are entitled to get the supply of monthly quota of kerosene oil in order to run their fair price shops in so far as it concerns with their dealerships of the kerosene oil. Under the New Order 1989 i.e. U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989 Kerosene oil is one of the scheduled commodities. It has been mentioned in Schedule 1 at item 6. It is thus clear that under the aforesaid Order, 1989 the District Magistrate and other authorities can appoint an authorised retail distributor for sale of scheduled commodities including kerosene oil. The Order 1989 i.e. U.P. Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1989 has no application to an authorised retail distributor in kerosene oil inasmuch as the schedule of the aforesaid order does not mention kerosene oil as one of the scheduled commodities under that Order. It is, therefore, clear that a person who has been appointed as an authorised retail distributor for the sale of the kerosene oil will have to obtain the licence for selling kerosene oil under the Kerosene Oil Control Order, 1962. However, a person in whose favour authorised dealership has been created under a non-statutory contract and who had also obtained a licence under the Kerosene Control Order, 1962 which was subsisting can have no legal right that monthly quota of kerosene oil should he given to him. However, a person in whose favour authorised dealership has been created under a non-statutory contract and who had also obtained a licence under the Kerosene Control Order, 1962 which was subsisting can have no legal right that monthly quota of kerosene oil should he given to him. The reason being, as has been held earlier, that non-statutory contract can he unilaterally terminated without giving any reason and that may bring to an end his authorised dealership for the sale of kerosene oil at the fair price shop. The question now remains is that a petitioner who has in his possession a subsisting kerosene oil Licence under the Kerosene Control Order, 1962 has got any legal right under which he can force the respondents to make the supply of kerosene oil. A bare perusal of the Kerosene Oil Control Order, 1962 shows that the aforesaid Order does not confer any right on the dealers to obtain supplies of Kerosene oil from the Government. The obtaining of the licence under the aforesaid Order only entitles the petitioner to carry on the trade in kerosene oil. The supply of the kerosene oil is made to the petitioner under a non-statutory contract which could be terminated unilaterally by the Collector and other authorities. It may be observed that it is the State Government which gets the quota of the kerosene oil from the manufacturers and the position of the petitioners was only that of an agent of the State Government which used to supply kerosene oil in pursuance of the orders of the State Government to the various holders of the ration cards in the State of Uttar Pradesh. The petitioners in such a situation are not entitled to get supplies of the kerosene oil from the State Government only on the basis that they have a subsisting licence under the kerosene Control Order, 1962. 14. In the end the learned counsel for some of the petitioners have made a statement that their applications for renewal extension of the contract are pending with the concerned authorities and a direction be issued that they may consider those applications. In view of what we have stated the question of renewal now does not arise in view of the new Distribution Order i.e. U.P. Essential Commodities (Regulation of Distribution) Order, 1989 issued under Section 3 of the Essential Commodities Act. In view of what we have stated the question of renewal now does not arise in view of the new Distribution Order i.e. U.P. Essential Commodities (Regulation of Distribution) Order, 1989 issued under Section 3 of the Essential Commodities Act. The authorised retail Distributors will now be appointed by the District Magistrates for selling the scheduled commodities under the aforesaid Order in accordance with law. 15. In the result, the petitioners are not entitled to any relief in the above noted writ petitions and the writ petitions are dismissed. The stay orders granted by this court are discharged. There shall, however, be no order as to costs.