Research › Search › Judgment

Calcutta High Court · body

2008 DIGILAW 591 (CAL)

Stephen Mondal v. STATE OF WEST BENGAL

2008-06-16

ANIRUDDHA BOSE

body2008
Judgment : ANIRUDDHA BOSE, J. (1) THE petitioner in the present application challenges the order of termination of his dealership of public distribution commodities. The impugned order was passed on 20th November 2007. The text of the order is reproduced below: it appears from the record that irregularities of serious nature were detected on inspection of the F. P. Shop on 8. 01. 2005 by a competent officer. On the basis of inspection report he was directed to show cause why departmental action will not be initiated against him (F. P. S. dealer). Mr. Stephen Mondal gave replies to show cause notice and he was also offered scope of hearing on 7. 3. 05. Both replies against show cause notice and deposition of hearing by the F. P. S. dealer was duly considered and it was held by the then Sub-Divisional Controller that the statement of the alleged dealer were far from the truth, concocted and not convincing at all. He decided that such Dealership be cancelled with the approval of competent authority. In view of the above context, I being the Sub-Divisional Controller (Fands) Krishnanagar, being the licensing authority do hereby cancel the licence under West Bengal Public Distribution System (Maintenance and control) Order, 2003 and terminate the Dealership in terms of paragraph 21 of the said order for willful violation of Clauses vide paragraph 17 of the West Bengal Public Distribution (Maintenance and control) 2003 and exclusively breach of trust. This order will take immediate effect and is issued in modification of the memo. No. 514/sc/w dt. 18. 05. 2005. (2) THE petitioner was granted license for running the business of dealership under the prevailing control order in pursuance of an agreement dated 18th november 1980 made between the state government and the petitioner, which appears to have been modified subsequently. The licence was granted to the petitioner in respect of such dealership for sale of ration commodities and this position continued till about 8th January 2005. At that time it appears that the assistant District Controller (Food and Supplies) had inspected the shop of the petitioner and submitted a report to the Sub-divisional Controller (Food and supplies), Krishnanagar on his inspection. At that time it appears that the assistant District Controller (Food and Supplies) had inspected the shop of the petitioner and submitted a report to the Sub-divisional Controller (Food and supplies), Krishnanagar on his inspection. (3) ON the basis of such report, which appears to have had gone against the petitioner, a notice to show cause was issued to him by the said Sub-divisional controller alleging certain irregularities in running of his business. The allegations included charging of excess price, non-issuance of cash memo, failure to display any signboard indicating the existence of the M. R. shop, non-display of bpl and AAI lists etc. There was also allegation of adopting malpractices by recordal of false entries in the stock register and sale register. This notice was issued on 8th February 2005. This was replied to by the petitioner, denying the allegations. Thereafter, by a communication dated on 28th February 2005 he was informed that his reply was neither specific nor convincing and also not based on facts, and he was requested to appear before the Sub-divisional Controller at his office chamber at 2 p. m. on 7th March 2005 with all documentary evidence in support of his reply. The petitioner claims to have attended the office of the said authority on the appointed date, and it is his case that the matter was heard on that date, but hearing was not concluded, and the particular individual who was holding that post had subsequently retired. (4) ON 18th May 2005, the petitioner was informed by a communication, a copy of which has been made Annexure p4 to the writ petition, that his dealership was being placed under suspension. It was inter-alia observed in the memorandum, issued by the Sub-Divisional Controller,- from the statements submitted by the petitioner in the Show Cause Notice reply and during hearing it is made clear to me that those are far from the truth and concocted and not convincing at all. the Sub-divisional controller in this memorandum indicated that the case records were being forwarded to the Director District Distribution Procurement and Supplies, West Bengal. The petitioner was placed under suspension till disposal of the proceeding on the allegation of violation of terms and conditions enumerated in paragraph 17 (ii) (4) of the West Bengal Public Distribution System (Maintenance and Control) Order 2003, (2003 Order, in short) and other irregularities and misconduct. The petitioner was placed under suspension till disposal of the proceeding on the allegation of violation of terms and conditions enumerated in paragraph 17 (ii) (4) of the West Bengal Public Distribution System (Maintenance and Control) Order 2003, (2003 Order, in short) and other irregularities and misconduct. (5) IT appears from the pleadings that no further intimation was given to the petitioner subsequent to such hearing but the petitioner had come to learn that his dealership had been cancelled by the Director, District Distribution, procurement and Supply. The petitioner had by written communication requested for supply of the order of termination of his dealership. When such request failed to yield any result, the petitioner filed a writ petition before this court being W. P. No. 2275 (W) of 2007. This writ petition was taken up for hearing by an Honble Single Judge of this Court and was disposed of by an order passed on 22nd November 2007. The said order is reproduced below: the subject matter of challenge in this writ application is the order of suspension dated May 18, 2005 of the M. R. dealership of the petitioner. Appearing on behalf of the State respondents, Mrs. Kanika Gupta, learned advocate submits on instruction that in connection with the proceeding initiated against the petitioner a final order of cancellation of the above dealership has already been passed by the respondent no. 6 on November 20, 2007. A copy of the above order is handed over to the learned advocate appearing for the petitioner. Since the final order of punishment has already been passed in connection with the proceeding initiated against the M. R. dealership of the petitioner a fresh cause of action has arisen. On the prayer of the petitioner this writ application stands dismissed as withdrawn. However, this will not prevent the petitioner to take steps in accordance with law with regard to the above final order passed in connection with the above proceeding. (6) IT is this order of cancellation, which was handed over to the learned advocate of the petitioner in course of hearing of W. P. No. 22756 (W) of 2007, and is under challenge in the present writ petition. The text of this order has been reproduced in the earlier part of this judgment. (6) IT is this order of cancellation, which was handed over to the learned advocate of the petitioner in course of hearing of W. P. No. 22756 (W) of 2007, and is under challenge in the present writ petition. The text of this order has been reproduced in the earlier part of this judgment. (7) THE case of the petitioner is primarily founded on lack of disclosure of reasons in the order of cancellation, and it has been argued on his behalf that since this is a nonspeaking order, the same ought to be quashed. Additional argument has also been advanced on procedural infirmities on the part of the respondents in conducting the proceeding which resulted in cancellation of the petitioners dealership. On this count it has been argued that the enquiry report on the basis of which the proceeding against the petitioner was initiated was not made available to him and the petitioner was kept in the dark on the specific irregularities alleged against him. The allegations of irregularities has been broadly denied in the writ petition. This writ petition has been contested by the food and supplies authorities by filing affidavit-in-opposition. In this affidavit, it has been pleaded that the reply of the petitioner to the show cause notice was neither convincing nor satisfactory. (8) ON behalf of the petitioner, two authorities have been cited to sustain his case that the impugned order ought to be quashed for non-disclosure of reason. The first one is the decision of the Honble Supreme Court in the case of Mahabir prasad Vs. State of U. P. reported in AIR 1970 SC 1302 , and the other authority is a decision of an Honble Single Judge of this Court in the case of Md. Zazmul ahasen Vs. State of West Bengal and Ors. reported in AIR 1982 Calcutta 546. (9) I have been taken through the impugned order, and from a plain reading of the order, I do not find that any reason has been indicated as to why the extreme punishment of cancellation of license of the petitioner was imposed on him. No reason has been disclosed therein as to why the petitioners reply was not convincing. (9) I have been taken through the impugned order, and from a plain reading of the order, I do not find that any reason has been indicated as to why the extreme punishment of cancellation of license of the petitioner was imposed on him. No reason has been disclosed therein as to why the petitioners reply was not convincing. Cancelling the license of a dealer under the 2003 Order in substance deprives him of his right to carry on business, which is his fundamental right under Article 19 (1) (g) of the Constitution of India. A proceeding under the 2003 order which results in cancellation of such license is a quasi-judicial proceeding, which has to be disposed of by a speaking order. A speaking order requires textual representation of the mental process of the authority through which he comes to a finding as to why the reply of the delinquent person (a dealer in the instant case) to the charges brought against him is not being accepted. This has to be arrived at by way of a mental exercise, which must be reflected in the order. In the present case, the charges against the petitioner has been broadly indicated in the impugned order and then there is finding of the authority that the reply given by the petitioner is not convincing. But there is no indication as to why such reply is not convincing, or far from truth. This vital link is missing from the impugned order. The impugned order appears to have been passed solely on the basis of the finding of the Sub-divisional controller, who passed the order of suspension, and the order of suspension in my opinion also suffered from the same deficiency. In the case of Mahabir Prasad (supra), it has been held: opportunity to a party interested in the dispute to present his case on questions of law as well as fact, ascertainment of facts from materials before the Tribunal after disclosing the materials to the party against whom it is intended to use them, and adjudication by a reasoned judgment upon a finding of the facts in controversy and application of the law to the facts found, are attributes of even a quasi-judicial determination. It must appear not merely that the authority entrusted with quasi-judicial authority has reached a conclusion on the problem before him; it must appear that he has reached a conclusion which is according to law and just, and for ensuring that end he must record the ultimate mental process leading from the dispute to its solution. Satisfactory decision of a disputed claim may be reached only if it be supported by the most cogent reasons that appeal to the authority. Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just. (10) IN the impugned order, the concerned authority has referred to the reply of the petitioner and his deposition at the time of hearing and heavy reliance has been placed on the opinion of the Sub-divisional controller in the order of suspension. In the order of suspension, the Sub-divisional controller had recorded that the concerned file was being forwarded to the authority for taking proper action. In the affidavit-in-opposition of the respondents, it has been stated that the file was forwarded to the Director, District Distribution Procurement and supply, Calcutta. There is no indication, however, in the impugned order or in the affidavit as to whether he took any decision in this matter. However, in paragraph 15 of the affidavit-in-opposition, it has been pleaded that the Regional deputy Director had taken no decision in the matter, and he was not empowered to take any decision in the matter without the approval of the Director. What transpired within the hierarchy of the civil supplies department has not been clearly pleaded, but it has been stated in the affidavit-in-opposition that eventually the Sub-divisional controller acted in accordance with the guidelines framed by the Government and with the approval of the higher authority. What transpired within the hierarchy of the civil supplies department has not been clearly pleaded, but it has been stated in the affidavit-in-opposition that eventually the Sub-divisional controller acted in accordance with the guidelines framed by the Government and with the approval of the higher authority. Neither the guideline, nor the particulars of such approval, however, has been disclosed. (11) UNDER the 2003 Order, the power to suspend the license of dealership is derived from paragraph 21 thereof, which is reproduced below:- 21. Penalty. (i) If on examination of the documents and or stocks of public distribution commodities or weighing devices, any discrepancy is detected, the Sub-Divisional Controller, Department of food and Supplies, shall issue a notice to the concerned Dealer asking for explanation in writing for such discrepancy and may also place the dealership under suspension till the disposal of the proceedings by the sub-Divisional Controller, Department of Food and Supplies. (ii) On receiving the reply from the dealer, the Sub-Divisional Controller, department of Food and Supplies shall give an opportunity of hearing to the Dealer and on recording the reasons, the Sub-Divisional controller, Department of Food and Supplies may terminate the license and appointment issued to the Dealer, forfeit the security deposit of the Dealer or may pass an order for deduction of ration cards tagged with the said Dealer. The departmental proceedings drawn against the dealer shall have to be completed by the concerned Sub-Divisional controller, Department of Food and Supplies within three months from the date of serving notices asking for explanation. (12) AS is evident from the aforesaid provision, the Sub-divisional controller, upon being satisfied about irregularity in running of the business of dealership can call for explanation from the concerned dealer. He is also empowered to place such dealer under suspension and simultaneously call for explanation. After considering the explanation, various penalties can be imposed by him on conclusion of the proceeding, including an order of termination of dealership. In the instant case, the petitioner was initially issued a notice to show cause, and on considering his reply, he was placed under suspension. I am not entering into the question as to whether such suspension in the midstream of the proceeding is permissible or not under the 2003 Order as the dealership of the petitioner has already been cancelled. In the instant case, the petitioner was initially issued a notice to show cause, and on considering his reply, he was placed under suspension. I am not entering into the question as to whether such suspension in the midstream of the proceeding is permissible or not under the 2003 Order as the dealership of the petitioner has already been cancelled. But suspension under the said Order is an interim measure, and for concluding the proceeding after an order of suspension is passed, it is incumbent upon the authorities to further afford a dealer opportunity of hearing in the event the final order in the proceeding goes against him. (13) AS I have already observed, the order of suspension against the petitioner does not qualify for being a speaking order. As per the scheme of the 2003 Order, a dealer charged with irregularities can be asked to respond to the charges by issuing a show cause notice, and his license can also be placed under suspension. In the case of suspension also, a dealer is required to be given opportunity to explain the irregularities alleged against him after the passing of the order of suspension. There is no provision under the 2003 Order for issuing an order of suspension after considering the reply of a dealer. Even if it is assumed that the departmental authority has an option to consider the reply of a dealer before taking a decision as to whether to suspend his license or not, the opinion formed by such authority, on the basis of reply would only be a prima facie opinion. In that event also, a more detailed consideration of the dealers defence would be necessary before the final order is passed. Thus, if the order of suspension does not disclose sufficient reasons, the final order must. And for effective compliance of the principles of natural justice, the concerned dealer must be given an opportunity to participate in the proceeding undertaken after the issuance of the order of suspension, to present his case in order to prevent passing of any adverse order upon conclusion of the proceeding. In the case of md. Zazmul Ahasen (supra), while considering a case under the West Bengal food Grains Control Order 1951, this Court examined a similar order of cancellation and observed:- 8. The petitioner has also urged that the impugned order is not a speaking order. In the case of md. Zazmul Ahasen (supra), while considering a case under the West Bengal food Grains Control Order 1951, this Court examined a similar order of cancellation and observed:- 8. The petitioner has also urged that the impugned order is not a speaking order. Although the charges have been dealt with in detail by the petitioner, the respondents had merely held but after careful consideration of your written explanation it appears that your reply to the aforesaid charges are fully unsatisfactory. Also at the time of personal hearing you failed to refute any of the charges framed against you. Although the charges have been set out in detail, the petitioners reply to the said charges have not been set out nor dealt with anywhere in the order. considering that aspect of the controversy, an Honble Single Judge of this Court held in the case of Md. Zazmul Ahasen: - 11. In this case serious allegations have been made against the petitioner in the show cause notice. The petitioner has answered the allegations point by point. The respondent no. 5 should have given some reasons in his order for coming to the conclusion that the petitioners explanation was not acceptable. (14) IN the instant case, the order of suspension was issued on 18th May 2005, after considering the petitioners reply. In the affidavit-in-opposition, it has been stated that in course of hearing in response to the show cause notice, the authority had recorded the deposition of the petitioner. On the basis of such hearing the order of suspension was passed. The same authority, who issued the order of suspension had passed the order of cancellation after more than two years. No proper explanation has been given for this delay, though a proceeding under the 2003 Order is required to be concluded within three months from the date of service of the notice asking for explanation, in terms of paragraph 21 (ii)thereof. The only explanation given is pendency of W. P. 12465 (W) of 2005 before this Court, but the learned Advocates for none of the parties have addressed me on implication or impact of that writ petition over the present proceeding. (15) ANOTHER authority, being the judgment of a Constitution Bench of the honble Supreme Court of India, in the case of Om Prakash Gupta Vs. (15) ANOTHER authority, being the judgment of a Constitution Bench of the honble Supreme Court of India, in the case of Om Prakash Gupta Vs. State of Uttar Pradesh reported in AIR 1955 SC 600 was relied upon by the learned advocate for the petitioner, to contend that the order of suspension in the instant case had lapsed when the order of cancellation was passed. As such in the instant case, the order of suspension has not been challenged independently. Though the judgment in the case of Om Prakash Gupta (supra) was delivered in a case arising out of dismissal of an employee, the proposition of law laid down in that case would apply in a case of cancellation of dealership also. I accept the argument of the learned Advocate for the petitioner that the order of suspension has lapsed in the instant case. In fact, in paragraph 21 (i) of the 2003 Order itself, it has been specified that the dealership may be placed under suspension till disposal of the proceeding. Thus, once the proceeding is concluded and final order is passed the order of suspension automatically lapses. (16) FOR the reasons indicated above, I am satisfied that the impugned order cannot be sustained, as adequate opportunity for hearing was not given to the petitioner before issuing the order of cancellation, and also for non-disclosure of reason. This offends the principles of natural justice. The ratio of both the authorities referred to in the preceding paragraphs, applies in the case of the petitioner. Moreover, the concerned authority while passing the order of cancellation has not, in my opinion, independently applied his mind and merely relied on the observations made in the order of suspension. In my opinion this factor also renders the impugned order of cancellation unsustainable. The order of suspension itself records that the same was being done pending disposal of the proceeding. From the impugned order of cancellation, or from the pleadings, it does not appear that any further proceeding took place. (17) THE impugned order of cancellation is accordingly quashed. I direct the respondents to resume supply of ration articles to the petitioners within a period of three weeks from the date of communication of this order. There shall be no order as to costs.