ERA PDS Nominee Carriage Agency v. State of Arunachal Pradesh
2005-12-22
H.N.SARMA
body2005
DigiLaw.ai
JUDGMENT H.N. Sarma, J. 1. This batch of writ petitions necessitating analogous decision due to involvement of common question of law almost of similar and identical facts, were heard analogously and is disposed of by a common judgment and order. Facts in W.P. (C) No. 2005 2 APLJ 384 2. The Petitioner M/s Era PDS Nominee and Carriage Agency is a proprietorial concern represented by its proprietor, the Petitioner No. 2 who was granted a licence on 18.6.1999 vide No. DR/CS/134/99-2000/57 under the provisions of Arunachal Pradesh Public Distribution of Articles order, 1992, appointing as Carriage Contractor/PDS nominee for procurement and distribution of PDS items through the PDS retailers for the Dibang valley district of the State of Arunachal Pradesh. The said licence was renewed from time to time and vide endorsement on the licence dated 15.1.2003 the same was renewed up to 31.3.2006. A deed of agreement dated 31.5.2005 was also executed between the Petitioner and the Deputy Commissioner, Lower Dibang Valley district on 31.5.2005 incorporating the necessary terms and conditions. In view of the aforesaid extension of the licence of the Petitioner and execution of the agreement dated 31.5.2005, appointing the Petitioner as wholesale nominee of PDS articles for the Dibang Valley district, the Petitioner was entitled to be continued the same till 31.3.2006. There is a set of guidelines for appointment of district nominee of PDS items in the State which was issued by the Govt. and forwarded to the concerned Deputy Commissioner by the Secretary (Civil Supplies), Government of Arunachal Pradesh vide letter No. SUP (AQ/IA/95 dated 18.4.1996. As per the said guidelines, a licence should be granted with validity of one year from April to March and it should be renewed before expiry of the validity period of appointment with necessary renewal fees. The Director of Civil Supplies issued a circular No. DCS/MON-90 (A) PP/02 dated 25.11.1994 with the approval of the Govt. to the effect that the PDS wholesale nominees licence are renewed by the district authority without obtaining prior approval of the Govt., which is in violation of the existing Govt. guidelines as in terms of the said guidelines, the licence is to be granted initially for the period of two months and will be renewed with the approval of the Govt. and accordingly, a direction was issued for renewal of such PDS wholesale nominee licence strictly in accordance with the existing guidelines.
guidelines as in terms of the said guidelines, the licence is to be granted initially for the period of two months and will be renewed with the approval of the Govt. and accordingly, a direction was issued for renewal of such PDS wholesale nominee licence strictly in accordance with the existing guidelines. Again vide letter No. DR/CS-193 (Contract)/2005-06/110-15 dated 26.4.2005, the Petitioner was conveyed with the decision of the Govt., to allow to continue the existing PDS wholesale nominee licences on the existing terms and conditions till finalization of the new guidelines for appointment of PDS wholesale nominees. The Director of Civil Supplies again vide letter No. DCS/PDC-1/R/2002 Pt. dated 26.5.2005 intimated the Deputy Commissioner, Lower Dibang Valley district that the licence in respect of the Petitioner had the validity of which up to 31.3.2005 was extended to 31.3.2006 without any Govt. approval. In the said letter, it is further stated that renewal of the wholesale licence in respect of the Petitioner should be cancelled immediately as it was not done as per the laid down procedure. 3. By another letter No. DR/CS/49/2005- 06/944 dated 16.6.2005, further instruction was issued by the Director of Civil Supplies to the Deputy Commissioner, Lower Dibang Valley district for taking appropriate action against the concerned officer for renewing the licence without proper authority of the Govt. In the said letter, it is also mentioned that Govt. has decided to terminate all the existing nominees appointed without open tenders to both the carriage contracts and transportation and necessary instructions issued by the Secretary (Civil Supplies) to the concerned Deputy Commissioners to that effect. Thereafter a show-cause notice was issued to the Petitioner by the Deputy Commissioner vide No. DR/CS/405 dated 17.6.2005 referring therein that the renewal of the licence of the Petitioner in terms of his application dated 13.1.2003 was done for a period of three years in violation of the normal practices of renewal for one year and was issued by the in-charge District Supply Officer (DSO) in violation of the existing guidelines and without having any authority and asked the Petitioner to show case as to why the said licence should not be immediately cancelled.
In reply to the aforesaid show cause notice, the Petitioner vide his reply dated 13.6.2005, inter alia, stated that the Petitioner applied or renewal of licence for three years, i.e. up to 31.3.2006 and on the basis of satisfactory performance certificate issued by the Deputy Commissioner the same was renewed and to his effect an agreement was also executed on 31.5.2005. Referring to the investment made by the Petitioner regarding the establishment of godown in the district headquarter and other infrastructures such as staff, manpower, vehicles, labour etc., the Petitioner submitted that if the licence is cancelled at that stage, he would suffer both mental and financial loss and the consumer will also face hardship and accordingly requested to allow him to continue with the business. 4. On perusal and consideration of the reply submitted by the Petitioner, the Deputy Commissioner, vide impugned order No. DR/CS/49/2005-06/971 dated 22.6.2005 cancelled the licence of the Petitioner with immediate effect and also stating that consequently, the agreement between the Petitioner and the district administration and the undertaking signed by them would also become void. In the said order it is also stated that although the application for renewal was addressed to the Deputy Commissioner, the same was submitted before the in-charge District Supply Officer and the licence was renewed by the District Supply Officer without having such power and even assuming that there was such power vested upon him, the same could not have been renewed for three years. 5. In passing the said order the reply submitted by the Petitioner was also considered by the authority. In this writ petition, the Petitioner has challenged the impugned order dated 22.6.2005. Facts in W.P (C) 367 (AP) 2005 6. The Petitioner is a registered co-operative society situated at Palin in the Kurung Kumey district of Arunachal Pradesh and represented by its Secretary. The Petitioner is a multipurpose co-operative society and was issued a licence being licence No. SUP-4/KKLAMP/2000 by the Deputy Commissioner, Kurung Khumey district as wholesale nominee in respect of PDS articles for distribution within the Kurung Kumey district as per sub-allocation and instruction of the Deputy Commissioner which was issued as per PDS orders issued under the provisions of the Essential Commodities Act, 1955. Initially the licence was issued for one year and it was renewed on 08.8.2003 upto 31.3.2004.
Initially the licence was issued for one year and it was renewed on 08.8.2003 upto 31.3.2004. The licence was further renewed up to 31.3.2005 by way of necessary endorsement in the licence. Before expiry of the period of licence, vide another order No. SCS-59/2003 (Pt) dated 06.4.2004, approval was given for extension of contracts in respect of the Petitioner for further period of two years with effect from the date of the respective agreement cease to exist, at the existing rate and terms and conditions, from 01.4.2005 to 31.3.2007 and to that effect, an agreement was also executed on 08.4.2004 between the Petitioner and the Deputy Commissioner of the district. The Secretary (Civil Supplies) vide Fax message No. SCS-7/2005 dated 05.4.2005 informed the concerned Deputy Commissioner about the decisions of the State Cabinet dated 09.3.2005 for appointment of fresh contractors for supply of PDS items through the open tenders (district wise) only. It is also directed that an immediate action should be taken to terminate/cancel such carriage contracts and PDS wholesale nominee of the Petitioner which were awarded in irregular manner, in the interest of efficiency and accountability and directed for taking immediate action for termination of all the carriage contracts and PDS wholesale nominee ship in respect of certain firms including the Petitioner granted in irregular manner. Thereafter a show cause notice being notice No. SUP/KK-01/11 dated 18.4.2005 was issued to the Petitioner by the Deputy Commissioner directing to show cause as to why the PDS wholesale nominee licence of the Petitioner should not be cancelled/terminated. In the said show cause notice, it is alleged that the order No. SUP/KK-02/02 dated 05.3.2005 directing for setting up of Godown in the district headquarter had not been complied with by the Petitioner within stipulated period thereby causing food crisis and the Govt. vide order dated 05.4.2005 has directed to terminate all the irregular PDS wholesale nominees. 7. In response to the aforesaid show cause notice, the Petitioner submitted his reply on 16.5.2005 showing the cause for delay in lifting the PDS items. However, no reasons have been stated for non-compliance of the direction issued to the Petitioner dated 05.3.2005 for setting up of the godown at the district headquarter. The other allegations made in the said notice are also denied.
However, no reasons have been stated for non-compliance of the direction issued to the Petitioner dated 05.3.2005 for setting up of the godown at the district headquarter. The other allegations made in the said notice are also denied. On receipt of the aforesaid reply, the Deputy Commissioner vide order No. SUP/KK-01/11/04 dated 23.6.2005 intimated the Petitioner that the appointment of wholesale nominee of the Petitioner was not in conformity with the present PDS licensing policy of the Govt. and accordingly, the same was terminated with effect from the date of issue of the order. By another order issued on the same day vide No. SUP/KK-01/26, the Petitioner was authorized to continue as PDS wholesale nominee/carriage contract till finalization of the fresh carriage contractors through open tenders. Challenging the aforesaid cancellation of the contract of the Petitioner, the present writ petition has been filed. Facts in W.P. (C) No. 297 (AP) 2005 8. On the basis of representation filed by the Petitioner before the Chief Minister of the State, the Petitioner was authorized to operate as state miller-cum-carriage contractor in respect of wheat with effect from 01.4.2003 and to that effect, an agreement dated 06.11.2002 was also executed between the Director of Civil Supplies and the Petitioner. Thereafter the Director of Civil Supplies, Arunachal Pradesh vide letter dated 08.11.2002 asked the Deputy Commissioner to initiate necessary action for implementation of the said orders. A licence being Licence No. DCS/PDA-8/95/001 was also issued by the Director of Civil Supplies authorizing the Petitioner to operate as state miller-cum-carriage contract operator with validity period of the said licence upto 31.3.2004. The said licence was further renewed upto 31.3.2005 and necessary endorsement to that effect was made on 22.10.2003. The licence of the Petitioner having expired, an application was made to the Director of Civil Supplies on 04.3.2005 for renewal of the same.
The said licence was further renewed upto 31.3.2005 and necessary endorsement to that effect was made on 22.10.2003. The licence of the Petitioner having expired, an application was made to the Director of Civil Supplies on 04.3.2005 for renewal of the same. No such action having been taken for renewal of the aforesaid licence of the Petitioner, the Petitioner having filed WP(C) 142 (AP) 2005, this Court disposing the same on 24.3.2005 directed the Director of Civil Supplies to dispose of the representation of the Petitioner dated 04.3.2005 regarding renewal of licence and in the event of not disposing the same on or before the expiry i.e. on or before 31.3.2005, the direction was issued to allow the Petitioners to continue till disposal of the said prayer of the Petitioner for renewal of the said licence. 9. The Director of Civil Supplies thereafter, vide letter No. DCS/PDA-8/85 dated 27.5.2005 allowed the Petitioner to continue till 31.5.2005. It was also stated therein that after the said date, there would be no state level nominee-cum-carriage contractor-cum- miller operator in respect of wheat. Challenging the aforesaid decision not to renew the licence of the Petitioner beyond 31.5.2005, the present writ petition has been filed. 10. In this case there is no existing licence in favour of the Petitioner to operate the contract after 31.5.2005. Facts in W.P. (c) No. 386 (AP) 2005 W.P. (C) No. 368 (AP) 2005 and W.P. (C) No. 281 (A.P.) 2005. 11. In these writ petitions, the contentions of the Petitioners are inter alia that in pursuance to the Arunachal Pradesh Public Distribution Articles Control Order, 1992, the Petitioners were appointed as carriage contractors and wholesale nominees for distribution of PDS items in the respective districts, which was extended from time to time. In respect of the Petitioner in W.P. (C) No. 386 (AP) 2005, the same was extended upto 31.3.2007, in respect of Petitioner in W.P. (C) No. 281 (AP) 2005 up to 31.3.2006 and upto 31.3.2007 in respect of the Petitioner in W.P. (C) No. 368 (AP) 2005. 12. The common allegations of the Petitioners is that in spite of renewal of their licences extending up to 31.3.2006 and 31.3.2007 respectively, the Govt.
12. The common allegations of the Petitioners is that in spite of renewal of their licences extending up to 31.3.2006 and 31.3.2007 respectively, the Govt. by taking a Cabinet decision decided to cancel the respective licences of the Petitioners and such other firms who were allotted the contracts without issuing any tenders and allegedly issued on irregular manner in violation of the Arunachal Pradesh Public Distribution of Articles Control Order, 1992. In pursuance to the aforesaid decision, the licences of the Petitioners were cancelled after giving an opportunity to state their cases in defence by issuing necessary show cause notice to them. Challenging the aforesaid Cabinet decision and the resultant cancellation of the licences of the Petitioners, these writ petitions have been filed. 13. The Respondents have contested the case by filing the affidavit-in-opposition controverting the allegations made by the Petitioners. The case of the Respondents, inter alia, is that the Petitioners were engaged as licences initially for the period of one year which was subsequently extended by unauthorized person in violation of the provisions of the Arunachal Pradesh Public Distribution of Articles Control Order, 1992, the control order having authorized to issue such licences for one year only and the subsequent renewal being for more than one year i.e. for two to three years at a time, is illegal, violative of control order and against public interest. It is the further case of the Respondents that the State largesse were distributed in favour of the Petitioners by awarding the carriage contracts by issuing licences without inviting open tenders and on pick and choose basis. With a view to streamline the entire process by giving a concrete and definite shape and to regularize the same, the State Cabinet took a decision to do away with all these irregular contracts and to distribute the same by inviting fresh/open tenders and to cancel such irregular licences by affording necessary opportunities. Pursuant to such decision, show cause notices were issued to the Petitioners and the concerned authority ultimately on consideration of the reply received from the Petitioners and other relevant facts, cancelled the licences and decided to allow the contracts on the basis of the result of the open tender process. 14.
Pursuant to such decision, show cause notices were issued to the Petitioners and the concerned authority ultimately on consideration of the reply received from the Petitioners and other relevant facts, cancelled the licences and decided to allow the contracts on the basis of the result of the open tender process. 14. In affidavit-in-opposition of the State Respondents filed in W.P. (C) 384 (AP) 2005, it is inter alia stated that the renewal of licence of the Petitioner for three years at a time was irregular and against the existing norms. According to the guidelines holding the field pertaining to the issue of renewal of licence, such renewal can be granted with validity period of one year only and the order renewing the licence for more than one year is ipso facto void ab initio being contrary to the guidelines issued by the Govt. However, in terms of the necessary clause in the agreement executed between the Deputy Commissioner and the Petitioner, a nominee would continue to renew his licence every year from the office of the Deputy Commissioner and the renewal of the licence for more than one year which is in contrary to the guidelines as well as the terms of the agreement is illegal and the Petitioner is not entitled to get the benefit of such extension for three years. 15. It is also pleaded that the State Cabinet discussed the issue relating to illegal granting of such contracts by issuing licence and found that in many cases, licences for the wholesale nominee ship and carriage contracts were extended without following the norms and guidelines of the Govt. leading to number of litigations and complaints, the State Cabinet taking a decision on 29.3.2005 directed to terminate/cancel all the carriage contractors which were finalized in the irregular manner and to appoint fresh contractors by calling open tenders with a view to streamline and exhibit transparency in the process. It was also decided that till such fresh appointment, the existing carriage contractors would continue for lifting of the PDS items. Accordingly, the Petitioners having been granted necessary opportunities by issuing the show cause notices to them and on consideration of the replies furnished by the Petitioners and it having been found that the renewal of the licences of the Petitioners were in violation of the norms and existing guidelines and taking note of the policy decision adopted by the Govt.
Accordingly, the Petitioners having been granted necessary opportunities by issuing the show cause notices to them and on consideration of the replies furnished by the Petitioners and it having been found that the renewal of the licences of the Petitioners were in violation of the norms and existing guidelines and taking note of the policy decision adopted by the Govt. the licences, in question, were cancelled and/or not extended after its expiry. 16. It is the further case of the State Respondents that the Petitioners in some cases although extended the period of licences for three years and it continues up to 31.3.2007, such renewal/extension of licence is bad in law and on obtaining such an order without following the norms and existing guidelines holding in the field, such Petitioners do not have any enforceable right to continue with the business, more particularly, when open tenders were invited for such licence as per the policy decision adopted by the Govt. in the State Cabinet and opportunity having been given to the Petitioners to apply with the same and accordingly the impugned action requires no interference. 17. In W.P. (C) No. 384 (AP) 2005, the private Respondent No. 5 who was allowed to run the business for a period of three months, has also filed an affidavit-in-opposition supporting the case of the State Respondents. In W.P. (C) No. 297 (AP) 2005, the State Respondents in their affidavit-in-opposition, further alleged that the performance of the Petitioner was unsatisfactory and the Petitioners are irregular in lifting the PDS items and was also responsible for short supply of wheat/atta causing inconvenience to consumers, apart from violation of the conditions of the agreement/licence. The State Respondents however, having considered the order passed by the High Court in W.P. (C) 142 (AP) 2005 extended the licence of the Petitioner up to 31.5.2005 only. It is the further case of the State Respondents that in view of the existing policy decision of the Govt. to issue necessary licences by inviting open tenders and in view of the poor performance of the Petitioner in violation of the conditions of licence and agreement, the Govt. did not extend the period of the validity of the licence beyond 31.5.2005. 18. In the background of the aforesaid facts, Mr. B.C. Das, learned senior counsel, Mr. A. Choudhury and Mr.
did not extend the period of the validity of the licence beyond 31.5.2005. 18. In the background of the aforesaid facts, Mr. B.C. Das, learned senior counsel, Mr. A. Choudhury and Mr. K. Ete, learned Counsels made their respective submissions in support of the respective Petitioners. On behalf of the State Respondents, Mr. C.K. Sharma Baruah, learned Advocate General assisted by Mr. B.L. Singh, learned Senior Govt. Advocate and Mr. A. Apang, learned Additional Senior Govt. Advocate and Mr. P.K. Tiwari, learned Counsel appearing for the private Respondent No. 5 in W.P. (C) No. 384 (AP) 2005 made their respective submissions. The learned Counsel for the parties cited the following decisions in support of their cases 1. AIR 1955 SC 549 , 2. (2001) 4 SCC 309 , 3. AIR 1952 SC 16 , 4. AIR 1966 SC 1081 , 5. AIR 1969 SC 48 , 6. (1995) 1 SCC 652 , 7. (1978) SCC 416, 8. (1979) 3 SCC 439, 9. (1992) 1 Suppl. SCC 692 and 10. AIR 1988 SC 157 . 19. I have heard the learned Counsel for the parties and considered their rival submissions. The relevant record has also been produced by the learned State Counsel. I have perused the same and also perused the respective pleadings of the parties. 20. Respective pleadings of the parties disclose that the licences in question were issued to the Petitioners without following any norms and without inviting any open tender. The Arunachal Pradesh Public Distribution of Articles Control Order, 1992 regulating the field provides for issuance of licences for one year only. 21. In exercise of the powers conferred under Section 3 of the Essential Commodities Act, the State Government promulgamated control order vide memo No. SUP (C) 33/92 dated 16.10.1992, known as "Arunachal Pradesh Public Distribution of Articles Control Order, 1992". Under the said order, Rice, Levy sugar, iodized salt, imported oil, SKO, Control clothes, Wheat/Atta are notified by the Govt. as notified articles. Clause-3 of the order empowers the Deputy Commissioner/Additional Deputy Commissioner to appoint FPS dealers/wholesalers in respect of the PDS items/articles for the purpose, on the basis of which, the FPS/wholesalers are entitled to supply the PDS items in accordance with the provisions of the order within the specified area. The validity of such appointment is to continue till 31st December of the next following date of fresh appointments.
The validity of such appointment is to continue till 31st December of the next following date of fresh appointments. Under Clause-3 prescribed licence fees/renewal fees are to be paid by the PDS wholesalers. Under Clause 3(IV), the authority reserves the right to amend, to suspend/revoke the appointment orders whenever in the opinion of the Deputy Commissioner/Additional Deputy Commissioner in the interest of the general public it is necessary to do so, after giving an opportunity to state his case and of being heard and/or for reasons to be recorded in writing. 22. It is pertinent to mention here that in the aforesaid order, no procedure has been laid down for issuance of licences for PDS dealers and wholesalers. So far the renewal is concerned, although renewal fee prescribed under Clause-3 and although no specific provision and the period for which a licence may be renewed is provided in the order, none the less the licence in question is to be remained valid for one year only i.e. till 31st December of the next following date of appointments. 23. Admittedly, the Petitioners were initially issued the respective licences for one year as can be seen from the licences issued to them. However, it is submitted by Mr. Das, the learned Senior Counsel that although the licence, were renewed for more than one year i.e. beyond the period of 31st December, in view of the subsequent acceptance of the same by the Government, the licences in question, got the validity for such period. 24. In W.P. (C) No. 384 (AP) 2005, the renewal of licence in question, was approved by the Govt. on 24.7.2003 renewing the same from 01.4.2004 to 31.3.2006. It is submitted on behalf of the Petitioner that the cancellation, in question, of the licence of the Petitioner by the impugned order dated 22.6.2005 was done at the behest of the Director of Civil Supplies and during the continuance of the validity of the licence and hence, it is illegal and arbitrary. The learned Advocate General referring to the clauses of the control order and the policy decision adopted by the Govt.
The learned Advocate General referring to the clauses of the control order and the policy decision adopted by the Govt. regarding the allotment of such licences by issuing necessary tender notice, has submitted that the extension of licences for a period more than one year is beyond the scope of the control order and the Petitioner having been granted the licence without following any tender process and/or on pick and choose basis lacking transparency in the matter and the Govt. having taken a Cabinet decision to allot such contracts on the basis of open tenders, the impugned orders were passed cancelling the licence of the Petitioner affording necessary opportunity and in doing so the Govt. has not done any illegality more so when it is done on public interest to avoid arbitrariness. As per the control order such renewal can be made only upto the month of December of the year. Extension/renewal of the licence beyond one year at a time is not envisaged by the control order. Before cancelling the licence of the Petitioners, a show cause notice, dated 18.6.2005 was issued to the Petitioner, to which, the Petitioner duly replied on 18.6.2005. Thereafter, vide impugned order dated 22.6.2005 directed the authority to cancel the licence of the Petitioner with immediate effect declaring the agreement entered between the parties to be void. Consequent upon the cancellation of licences of the Petitioners the private Respondents were appointed as PDS wholesale nominee for the concerned districts for a period of three months till a regular nominee is appointed, selecting as per the tender process. 25. Facts of W.P. (C) 367 (AP) 2005 discloses that before expiry of 31.3.2005 i.e. the extended period of licence, the licence was further renewed on 08.4.2005 for a period of 2 years from 1.4.2005 to 31.3.2007 as disclosed from agreement vide Annexure-4. This extension was made even 1 year prior to the expiry of the earlier extended terms. 26. As per the Control Order the Petitioner is not entitled to get his extension for more than one year at a time and the licence would deem to be expired with effect from 31.3.2005. 27. In W.P. (C) 297 (AP) 2005, the licence of the Petitioner was extended upto 31.5.2005 on the basis of the order dated 24.3.2005 passed in W.P.(C) 142 (AP) 2005.
27. In W.P. (C) 297 (AP) 2005, the licence of the Petitioner was extended upto 31.5.2005 on the basis of the order dated 24.3.2005 passed in W.P.(C) 142 (AP) 2005. Thereafter the licence not having been extended, there is no existing licence in favour of the Petitioner to run his business. The Govt. having decided by taking necessary Cabinet decision to allot such licence by calling for open tenders, the same cannot be found faulted with. Accordingly, no relief can be granted to the Petitioner in the instant petition. 28. In W.P. (C) 386 and W.P. (C) 368 (AP) 2005, the licences of the Petitioners were extended up to 31.3.2007. In respect of Petitioners in WP (C) 281 (AP) 2005, the same was extended up to 31.3.2006. 29. The Petitioners in both these two petitions were granted extension upto 31.3.2007 vide order dated 6.4.2004, although, the validity of the licences was continued during the relevant time, up to 31.3.2005. Similarly, licence of the Petitioner in W.P. (C) 281 (AP) 2005, was extended vide order dated 09.7.2004 upto 31.3.2006 from 01.7.2004. 30. In all these cases, the licences were extended for more than one year at a time. As per the control order holding the field, such licences issued under Clause-3 of the order shall remain valid till 31st December of next following date of appointment i.e. such licences can be issued only for one calendar year at the most. Although, there is no specific mention in the distribution order, the period for which such licences issued under Clause-3 can be extended at any rate the same is not permissible to be extended beyond the original period for which such licences are issued i.e. beyond one calendar year inasmuch as, a renewal clause shall not be allowed to be operated beyond the period fixed by the original clause. 31. In view of the above discussions, it is seen that the extension beyond the calendar year is not permissible. Any subsequent agreement on the basis of such enhanced period of renewal will not confer any right upon the licences the extension it self being contrary to the provisions holding the field. The State Govt.
31. In view of the above discussions, it is seen that the extension beyond the calendar year is not permissible. Any subsequent agreement on the basis of such enhanced period of renewal will not confer any right upon the licences the extension it self being contrary to the provisions holding the field. The State Govt. by taking decision in its Cabinet meeting held on 29.3.2005, noted with concern that essential food items under Public Distribution System (PDS) are not reaching the consumers because of variety of reasons including non-performance and undesirable acts on the part of the contractors. The Cabinet also noticed that a number of contracts have been given without following proper tendering process and in some cases for an abnormally long period and accordingly inter alia decided to appoint fresh Contractors through open tenders (district-wise). 32. Although, there is no adequate pleading in the writ petitions on which the said Cabinet decision is assailed to be bad, at the time of arguments, it was submitted by the learned Counsel appearing for the Petitioners that the said Cabinet decision cannot extinguish the right of the Petitioners to operate the contract for the period it was so extended. The Cabinet took the aforesaid decision as a policy matter. Challenge of such policy decision can be made on very limited grounds of violation of fundamental rights and/or malafide exercise of such power. But in this batch of writ petitions, no such violation could be effectively pointed out justifying for quashing of the said policy decision. It appears that the said Cabinet decision to allot contract by open tenders was made to show more transparency in the matter and to avoid arbitrariness in the allotment of the contracts by adopting pick and choose policy and on public interest. Accordingly, I do not find any merit on the submissions made by the learned Counsel for the Petitioners challenging the said policy decision. 33. Mr. D. Choudhury, learned Counsel, referring to a notification No. GSR 800 dated 09.6.1978 has submitted that in view of the mandate of the said circular, the State Govt. is not authorized under Section 3(1) of the Essential Commodities Act to make order relating to any matter specified in Clauses (a), (c) or (f) of Sub-section 2 or in regard to distribution of disposal of foodstuffs to places outside the State etc.
is not authorized under Section 3(1) of the Essential Commodities Act to make order relating to any matter specified in Clauses (a), (c) or (f) of Sub-section 2 or in regard to distribution of disposal of foodstuffs to places outside the State etc. under the Clause (d), without obtaining prior approval of the Central Government. For our ready reference, the said circular is quoted hereinbelow: GSR 800-In exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (10 of 1955) and in super session of the order of the Government of India in the Ministry of Agriculture (Department of Food) No. GSR. 315 (E) dated June, 20,1972, the Central Government hereby directs that the powers conferred on it by Sub-section (1) of Section 3 of the said Act to make orders to provide for the matters specified in Clauses (a), (b), (c), (d), (e), (f), (h), (i), (j) of Sub-Section 2 there of shall in relation to foodstuffs be exercisable also by the State Government subject to the conditions: (1) That such powers shall be exercised by a State Government subject to such direction, if any, as may be issued by the Central Government in this behalf. (2) That before making order relating to any matter specified in the said Clause (a), (c) or (f) or in regard to distribution of disposal of foodstuffs to places outside the State or in regard to regulations of transport of any foodstuff, under the said Clause (d), the State Government shall also obtain the prior concurrence of the Central Government; and (3) That in the making an order relating any of the matters specified in the said Clause (i), the State Government shall authorize only an officer of the Government. 34. On a close scrutiny of the aforesaid circular discloses that such restriction as contained therein pertains to Clauses (a), (c) or (f) or in regard to distribution of disposal foodstuffs to places outside the State or in regard to regulations of transport of any foodstuff, under the Clause (d) of Sub-section 2 of Section 3 of the Essential Commodities Act, 1955.
Clauses (a), (c) and (f) are quoted herein below: (a) For regulating by licences, permits or otherwise the production or manufacture of any essential commodity; (c) For controlling the price at which essential commodity may be brought or sold; (f) For requiring any person holding in stock, or engaged in the produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order. 35. What is intended to be done by the Cabinet decision of the State Government is inter alia to appoint fresh contractors through open tenders (district-wise) and to cancel of such contracts, which were finalized in irregular manner. 36. Clause (a) referred to above relates to regulation by licences, permits etc. the production or manufacture of any essential commodity, Clause (c) provides for controlling the price of the essential commodity and Clause (f) provides for certain directions to any person or persons holding in stock or engaged in production or buying or selling of essential commodity etc. The decision taken by the Cabinet Committee do not pertains to any of the aforesaid contingencies as mentioned in Clauses (a), (c) or (f) of Section 3(2) of the Essential Commodities Act. In that view of the matter, I do not find that the rigour of the circular No. GSR 800 dated 09.6.1978 is applicable in the instant cases as submitted by Mr. Choudhury. 37. Under the distribution order, the Respondent authorities have reserved their right to cancel the contracts/licences, the said right have been exercised by issuing necessary show cause notice to the Petitioners to which they replied. In their replies, the Petitioners have not raised these points, which are now argued before this Court. Nonetheless, the impugned orders have been passed considering and taking note of the replies submitted by the Petitioners, thus the provisions of Natural Justice have also been complied with.
In their replies, the Petitioners have not raised these points, which are now argued before this Court. Nonetheless, the impugned orders have been passed considering and taking note of the replies submitted by the Petitioners, thus the provisions of Natural Justice have also been complied with. The action has been taken by the authorities to streamline the Public Distribution System and to avoid arbitrariness in getting the licences and to provide transparency in the matter and in the interest of the general consumers of the State consisting of high hilly inaccessible areas by ordinary communication and the same cannot be held to be illegal, unjust or improper. 38. In view of the foregoing discussions, I do not find any justifiable reason to judicially review the impugned action of the State Govt. as projected in this batch of writ petitions. Consequently, this batch of petitions are devoid of merit and accordingly the same are dismissed. 39. No costs. Petition dismissed.