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1997 DIGILAW 277 (KER)

All Kerala Retail Dealers Association v. Taluk Supply Officer

1997-07-24

K.A.ABDUL GAFOOR

body1997
Judgment :- K.A. Abdul Gafoor, J. The first petitioner in each of these Original Petitions is the Association of Ration Retail Dealers, and other petitioners are authorised ration retail distributors. They have approached this court seeking a direction restraining the respondents from initiating any action against the petitioners or other retail dealers to suspend or cancel their authorisation solely on the reason that the off take by the card holders during the last week of May, 1997 was high. The petitioners in O.P. 10539 of 1997 belongs to Thodupuzha Taluk and in O.P. 10768/1997 belong to Peerumedu Taluk. 2. The petitioners submit that there was advanced announcement of increase in price of ration articles to be effective from 1.6.1997. Therefore, there was a high rate of off take during the last week of May, 1997 by the consumers. Therefore, the petitioners had to intend more goods than they had intended during the earlier weeks. Consequently, the week ending balance as on 31.5.1997 was comparatively less than the earlier weekends. Thus, taking it as an irregularity or malpractice, there was investigation with reference to the stock of all the ration retail dealers. The petitioners submit that they are not responsible for this small balance at the weekending 31.5.1997, because the consumers were aware of the price increase to be effective from 1.6.1997. So, all the card holders had purchased their ration quota during the said week. This resulted in the closing stock as on 31.5.1997 at a lesser rate than the week ending earlier than 31.5.1997. The petitioners submit that no action shall be taken on its basis. 3. A statement filed in O.P. 105 39/97 discloses that there was verification of the relevant records in the shops of the concerned A.R.Ds. and the stock register, issue register and counter foil bill books did not reflect as in the ration card kept by the consumers and that there were large scale irregularities. Therefore, steps were taken to suspend the licences of 12 ration retailers in Thodupuzha Taluk, and few of the petitioners were also suspended. The same was the case relating to Peerumedu Taluk also. 4. At this juncture, the contention of the petitioners is that the suspension cannot be ordered without giving an opportunity of being heard to the petitioners. Therefore, steps were taken to suspend the licences of 12 ration retailers in Thodupuzha Taluk, and few of the petitioners were also suspended. The same was the case relating to Peerumedu Taluk also. 4. At this juncture, the contention of the petitioners is that the suspension cannot be ordered without giving an opportunity of being heard to the petitioners. The petitioners submit that the concerned supply officer is empowered to suspend the A.R.D. as per the clause 45(8) of the Kerala Rationing Order. If the Taluk supply Officer finds that the authorised ration retail distributor had contravened any of the provisions of the Order or any direction issued in terms of the said Order or on receipt of a report from subordinate officers or on his own inspection any shortage or excess in the quantity of the ration articles or any irregularity in the accounts is detected or detects non-compliance of the directions issued by the competent authority, he may "after giving the Authorised Retail Distributor an opportunity of stating his case and for reasons to be recorded in writing; "amend, vary, suspend or cancel his appointment". Thus, it is submitted that before placing an A.R.D. under suspension, an opportunity of being heard shall be rendered to him. It is submitted that though a suspension pending enquiry is also provided in clause 45(8), that shall also be after affording an opportunity as it is not expressly excluded. In this case, the suspension orders had been issued by the Taluk Supply Officer concerned pending enquiry. Even then, it is contended that an opportunity shall be rendered as there is no exclusion of the principles of natural justice, which is made mandatory in respect of the suspension in the first part of clause 45(8), when suspension pending enquiry is dealt with. 5. In support of these contentions, the petitioner had referred to few decisions. Relying on the decision in S.1. Kapoor v. Jagmohan & Ors. (1980 (4) SCC 379), the petitioners contend that "it is- not always a necessary inference that if opportunity is expressly provided in one provision and not so provided in another, opportunity is to be considered as excluded from that provision. It may be a weighty consideration to be taken into account but the weightier consideration is whether the administrative action entails civil consequences". 6. The case dealt with by Supreme Court in S.1. It may be a weighty consideration to be taken into account but the weightier consideration is whether the administrative action entails civil consequences". 6. The case dealt with by Supreme Court in S.1. Kapoor v. Jagmohan & Ors. (1980 (4) SCC 379) was disqualification of certain members of Municipal Council in exercise of the powers conferred by Punjab Municipal Act. That qualification was a final order to be passed. Of course, when a final order is being passed which visits the incumbent with adverse civil consequences, necessarily, compliance with the principles of natural justice is always treated as a fair principle to be adopted in such cases. It is based on that, before passing an order resulting in civil consequences, in order to avert arbitrariness, an opportunity should be rendered to the incumbent concerned and that is an inbuilt safeguard under Art.14 itself. But, in this case, as is admitted, the suspension of the petitioner is pending enquiry. That means, some enquiry is being contemplated with the participation of the petitioners. Thus, the petitioners would get sufficient opportunity to prove their case. There arises no adverse civil consequences at present. So, the decision in S.1. Kapoor v. Jagmohan and Ors. cannot be applied to the facts and circumstances of this case. 7. Referring to Olga Tellis & Ors. v. Bombay Municipal Corporation & Ors. (AIR 1986 (1) SC 180), the counsel for the petitioners submits that "A departure from Audi alter am partem may be presumed to have been intended by the Legislature only in circumstances which warrant it. Such circumstances must be shown to exist, when so required, the burden being upon those who affirm their existence". This pronouncement of the Supreme Court is in respect of eviction of the pavement dwellers which is a final act by the Administrative authority or the civic body. After eviction, there was no question of repairing the prejudices. Even if the pavement dwellers are continued for the minimum period of time to comply with the formalities of natural justice, much public prejudice may not be caused. That is not the case so far as the petitioners are concerned. The petitioners are given licences by the State to run its public distribution system and to bring the daily food grain to the people. Therefore, the petitioners are invested with a more honorary function to distribute food articles on subsidized prices. That is not the case so far as the petitioners are concerned. The petitioners are given licences by the State to run its public distribution system and to bring the daily food grain to the people. Therefore, the petitioners are invested with a more honorary function to distribute food articles on subsidized prices. In such circumstances, even a minor irregularity has to be viewed more seriously as the chain of public distribution system may be adversely affected. Therefore, in such circumstances, the situational modification to the application of audi alteram partem rule may be necessary. It is in such circumstances, second part of clause 45(8) of Rules enables the Supply Officer to suspend the licence pending enquiry, as otherwise, the public distribution system itself may be endangered. 8. In answer to this, the petitioner contends that there is no whisper in any of the suspension order or in the counter affidavit that the suspension is absolutely necessary and it has to be implemented because of the exigencies of situation. Rather the petitioner's counsel submits that no exigency of situation of the suspension to be implemented is either pleaded or born out by records. It is true that there is no such pleading or even there is no whisper in the counter affidavit. But, the reasons stated in the suspension orders to take action against the petitioners are the discrepancy that had been noticed by the Rationing Inspectors when they compared the issue register of the petitioners with the card possessed by the individual consumer. In all these cases, it is found out that the issue registers disclosed that there was issue of food grains to a particular card holder whereas the respective ration card did not disclose receipt of such articles. That is a matter to be probed into. When such discrepancy is found out in the case of authorised retail dealer, necessarily, that has to be viewed seriously and any time given to them to continue the ration dealing till the principles of natural justice is complied with, may again lead to more and more irregularities. In such circumstances, what is contemplated in the second part of clause 45(8) is exclusion of audi alteram partem rule. 9. It is also apparent from the structure of the said clause itself. In such circumstances, what is contemplated in the second part of clause 45(8) is exclusion of audi alteram partem rule. 9. It is also apparent from the structure of the said clause itself. Because the suspension dealt with in the first part of the clause is suspension as a punishment and whereas suspension dealt within the second part, beginning with 'non obstante' clause, is a suspension pending enquiry. Therefore, the contention with reference to Olga Tellis case in which a final order of eviction was made by the civic authority is not applicable to the case on hand. 10. The petitioner again relied on the decision in Smt. Maneka Gandhi v. Union of India & anr. (AIR 1978 SC 597). That was also a case of final order of impounding passport. The court also felt that "A fair opportunity of being heard following immediately upon the order impounding the passport would satisfy the mandate of natural justice and a provision requiring giving of such opportunity to the person concerned can and should be read by implication in the Passports Act, 1967". Here also as mentioned above, there is a likely hood of committing irregular action as was detected in the investigation which preceeded in the suspension order. 11. The counsel for the petitioner relied on the decision reported in Management of M/s. M.S. Natty Bharat Engineering Co. Ltd, v. State of Bihar & Ors. (1990 (2) SCC 48). It had been held that "were the statute is silent about the observance of principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The implication of natural justice being presumptive, it should be followed by the authorities unless it is excluded by express words of statute or by necessary implication. The petitioner on its strength contends that when the first part of clause 45(8) expressly provided for the observance of principles of natural justice and when there is no express exclusion in the second part, naturally observance of the principles of natural justice is mandatory as the statutory silence does not imply the avoidance of principles of natural justice. The petitioner on its strength contends that when the first part of clause 45(8) expressly provided for the observance of principles of natural justice and when there is no express exclusion in the second part, naturally observance of the principles of natural justice is mandatory as the statutory silence does not imply the avoidance of principles of natural justice. But, the construction of S.45(8) makes it clear that the suspension where principles of natural justice are mandatory directed to be complied with is a suspension which is imposed as a punishment; because the clause provides that the Taluk Supply Officer shall "for reasons to be recorded in writing, amend, vary, suspend or cancel his appointment/or order forfeiture of the whole or any part of the amount deposited by the authorised retail distributor as security. So, it is a final order affecting adversely, the licencee. That is why the compliance of the principles of natural justice is expressly provided in that part of sub clause 8 of clause 45. The second part is commencing with the word "notwithstanding'. Therefore, it has an independent existence from the first part and it is further provided that "If considered necessary he (Taluk Supply Officer) may suspend the appointment of the authorised retail distributor temporarily pending enquiry". The 'non obstante clause' and the suspension specifically provided "pending enquiry" are sufficient enough to exclude the application of audi alteram partem rule "by necessary implication." 12. The learned Addl. Advocate General appearing for the respondents invited my attention to the ruling reported in M/s. Sukhwinder Pal Bipan Kumar & Ors. v. State of Punjab & Ors. (1982 (1) SCC 31), which had arisen out of suspension of licence of a food grain dealer. In the Punjab Food grains Dealers Licensing and Price Control Order, 1978, there was provision for cancellation or suspension of licence. The main clause provided that without prejudice to any action that may be taken against him, the licencing authority may, by an order in writing cancel or suspend licence in so far as relates to food grains in respect of which contravention has been made. By a proviso, it was made clear that such an order shall not be made unless the licencee has been given a reasonable opportunity of being heard. This is almost equal to the first part of clause 45(8) of Kerala Rationing Order. By a proviso, it was made clear that such an order shall not be made unless the licencee has been given a reasonable opportunity of being heard. This is almost equal to the first part of clause 45(8) of Kerala Rationing Order. The Punjab order contained a second proviso that the licencing authority may suspend the licence without giving a reasonable opportunity to the licencee of stating his case. This is almost equal to the second part of clause 45(8) of the Kerala Rationing Order which commences with a'non obstante' clause. The said ruling justifies the suspension without giving a reasonable opportunity. Of course, there is a difference in the structure of the rule. Proviso always carve out exception from the main rule. Here there is no proviso as in Punjab Rule. But, as I have already pointed out, it commences with a 'non obstante' clause. Therefore, it has to be read independently from thefirst part. Therefore,!! is permissible that an order of suspension 'pending enquiry' can be issued without affording an opportunity. 13. The petitioners further contend that they had invested large amount to procure rationing articles for their shops and on the basis of suspension order, the entire shops have to be closed and all the cards attached to their shops will be allotted to another nearby shop and the entire stock procured after payment will be given to the nearby shop. Therefore, it prejudices the petitioner's right visiting with civil consequences. Therefore, there is prejudice and even in suspension pending enquiry, an opportunity should have been given to the petitioners before implementing the suspension order. As I have already found that in the nature of the business entrusted with the petitioners by the State and the nature of the irregularities found out during the investigation, it will not be advisable to wait any more for an opportunity being given to the petitioners. At the same time, in order to minimise the prejudice alleged to be caused to the petitioners, it is made clear that the stock shall be verified by the concerned Rationing Inspector with the participation of the petitioners or his agent by giving notice to the licensee and the price thereof shall be given to the petitioners within 30 days from the date of implementation of suspension. In case there is any delay in paying the price, naturally, the respondents shall pay 20% interest on the price money commencing from the completion of such 30 days. 14. As already mentioned above, the suspension is pending enquiry. On any account the enquiry shall not be delayed. Suspension have been made after investigation and report from the concerned Rationing Officer. The necessary details are now before the Taluk Supply Officer to proceed against the petitioners. Accordingly, enquiry contemplated shall be concluded, at any rate within three months from the date of receipt of a copy of this judgment by the Taluk Supply Officer. In case there is delay, the Taluk Supply Officer shall cancel the suspension orders and restore the licences to the petitioners. The Original Petition is disposed of as above.