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Madhya Pradesh High Court · body

2011 DIGILAW 1434 (MP)

Sai Kripa Gramin Prathmik Sahkari Upbhokta Bhandar Maryadit, Nainpur v. State of M. P.

2011-12-16

ALOK ARADHE, SUSHIL HARKAULI

body2011
JUDGMENT : Alok Aradhe, J.:- In this petition the petitioner has challenged the validity of clauses 4,5(3) and 6 of Annexure-II appended to Madhya Pradesh Public Distribution System (Control) Order, 2009 (hereinafter referred to as the "Control Order 2009"). In order to appreciate the petitioners' challenge to the aforesaid clauses of the Control Order 2009, reference to few facts need mention. 2. The petitioner is a Cooperative Society registered under the provisions of M.P Cooperative Societies Act? 1960 (for short 1960 Act'). The petitioner is classified under section 10 of the 1960 Act as consumer society. The petitioner is engaged in the business of distribution of food stuff under the Public Distribution System. The petitioner has been granted licence to run the fair price shops in urban as well as rural areas. In exercise of powers under Section 3 read with Section 5 of the Essential Commodities Act, 1955 the State Government has framed M.P. Public Distribution System (Control) Order, 2009 Clause 4 of the aforesaid Control Order 2009 provides that in urban areas no cooperative society shall be allotted more than one fair price shop Clause 5(3) thereof provides that in rural area marketing societies or the primary agricultural cooperative societies shall be appointed as the leading societies. Clause 6 of the Control Order 2009 provide that fair price shops in rural areas shall be allotted to primary agricultural cooperative societies and Laghu Vanopaj Sahakari Samiti, a society registered under the provisions of 1960 Act 3. Learned counsel for the petitioners submitted that the action of the State Government in grouping the societies, namely, Primary Agricultural Cooperative Societies and Laghu Vanopaj Sahakari Samiti together to exclusion of other societies for running the fair price shops in the rural areas is arbitrary and discriminatory. The classification has no reasonable nexus with the object which is sought to be achieved. The exclusion of other cooperative societies to run fair price shops in rural areas offends constitutional guarantee contained in Articles 14 and 19(1)(g) of the Constitution of India. The validity of the impugned clauses of the Control Order 2009 has also been assailed on the ground that same are in direct conflict with the Public Distribution System, 2001 framed by the Central Government. The validity of the impugned clauses of the Control Order 2009 has also been assailed on the ground that same are in direct conflict with the Public Distribution System, 2001 framed by the Central Government. It is urged that action of the State Government in discontinuing the fair price shops which are being run by the societies for past several years is not justified. It is further urged that acting on the assurance given by the State Government the petitioners got themselves registered as cooperative societies. The State Government is bound by the doctrine of estoppel. Our attention has been invited to the order passed by this Court in W.P. No.8810/2005. In support of aforesaid submissions reliance has been placed on the cases of Vij Resins Pvt. Ltd. v. State of J and K, (1989) 3 SCC115 and State of Madhya Pradesh and Others v Orient Paper Mills Ltd., (1990) 1 SCC 176 . 4. On the other hand learned counsel for the respondents has submitted that the State Government is under a constitutional obligation to protect the poor persons against malnutrition and hunger. In the light of orders passed by the Supreme Court in Writ Civil Case No. 196/2001 dated 28.11.2001, 08.5.2002 and 02.5.2003 and to ensure compliance of Directive Principles of State Policy, the State Government has framed Control Order 2009. The classification of the societies to run the fair price shops is valid classification and the same is based on intelligible differentia. It cannot be termed either arbitrary or discriminatory. In fact, the classification of the societies to run the fair price shops in rural areas has been done in public interest. It is further submitted that primary agriculture cooperative societies and Laghu Vanopaj Sahkari Societies are the cooperative societies which are basically controlled and operated through organized structure and they have sufficient financial viability to ensure compliance of the Control Order, 2009. The petitioners are not registered merely for the purposes of running fair price shops and are registered for many other objects and the petitioners are at liberty to pursue other objects for which it have been constituted. The provisions of Control Order 2009 do not contravene the provisions of Public Distribution System Control Order, 2001 framed by the Central Government in any manner. The provisions of Control Order 2009 do not contravene the provisions of Public Distribution System Control Order, 2001 framed by the Central Government in any manner. In support of his submissions learned counsel for the respondents has placed reliance in the case of Ambika Prasad Rajwade and Others v State of Chhattisgarh and Others, AIR 2006 Chhattisgarh 107. 5. We have considered the submissions made on both sides. The Central Government in exercise of powers under Section 3 of the Essential Commodities Act, 1955 (for brevity 1955 Act') has framed Public Distribution System (Control), 2001. Clause 2(k) defines the expressions "fair price shop owner" to mean a person and includes a Co-operative society or a a Corporation or a Company of a State Government or a Gram Panchayat or any other body in whose name a shop has been licencsed to.distribute essential commodities under the Public Distribution System. Clause 7 of the Order provides that the procedure for issue of licences or authorization to the fair price shops for distribution of essential commodities under the public distribution system and duties and responsibility of fair price shop owners shall be as per paragraph 5 of the annexe to the Order. Paragraph 5 of the annexe to the Order provides that the State Government shall issue an order under Section 3 of the Act for regulating the sale and distribution of the essential commodities and licence to the lair price shop owners shall be issued under the said Order. Such licence shall lay down the duties and responsibilities of fair price shop owners. Thus, from perusal of provisions of the Public Distribution System (Control) Order 2001 the Central Government has left it to the State Government to make an order under Section 3 of the Act for regulating the sale and distribution of essential commodities through public distribution system to vulnerable section of the society and to provide the issue of licence under such Order made under Section 3 of the Act to the persons. The Central Government left it to the State Government to decide as to persons in whose the licence is to be issued to run the fair price shop. 6. The Central Government left it to the State Government to decide as to persons in whose the licence is to be issued to run the fair price shop. 6. The State Government in exercise of powers conferred by Sections 3 read with Section 5 of the 1955 Act has framed the Order for control of Public Distribution System in the State of Madhya Pradesh, namely, M P Public Distribution System (Control) Order, 2009. The aforesaid Control Order has been framed with an object to secure availability of essential commodities at the controlled price to the ration card holders of the State of Madhya Pradesh. Clause 3 of the Order deals with issuance of ration card. The basic entitlement of issuance of ration cards has been prescribed in such manner so as to ensure that members of Below Poverty Line family, Above Poverty families and Antodaya Families get the ration cards. Clause 4 of the Order provides that the establishment of fair price shops allotment thereof, issuance of authority letter for operationalization of fairprice shops and suspension/cancellation thereof as per Annexure-II appended to this Order. Annexure-II of the Order makes it clear that total number of fair price shops and their location in the district shall be decided by the Collector of the concerned district. Clause 2 of Annexure-II of the Order provides that Collector in so far as it is possible shall bear in mind while deciding the location and number of fair price shops in each district, that there shall be one fair price shop for population of 5000 members in urban areas. The fair price shops are set up at a place which is convenient to the card holders. Clause 2 of Annexure-II further provides that the Collector shall ensure that there should be one fair price shop for every Gram Panchayat Proviso to Clause 2 of Annexure-II provides that there shall be minimum of 200 ration cards of Below Poverty Line and Antyodaya Anna Yojna categories in a fair price shop. Clause 5 of Annexure-II provides that Cooperative Society identity for fair price shop shall have a credit margin of 200% of the amount required to purchase the monthly allocation i.e. food grain, kerosene, sugar, etc. under this order and shall have sufficient storage space and computer for date entry and accounting purposes. Clause 5 of Annexure-II provides that Cooperative Society identity for fair price shop shall have a credit margin of 200% of the amount required to purchase the monthly allocation i.e. food grain, kerosene, sugar, etc. under this order and shall have sufficient storage space and computer for date entry and accounting purposes. Clause (7) of Annexure - II empowers the State Government to utilize, the fair price shop for installing computer with Bio-metric facilities and other electronic identification equipment. Thus, from perusal of various clauses of Annexure-II it is apparent that various provisions have been made to make available the essential commodities at a controlled price on ration card issued to card holders of the State of Madhya Pradesh. 7. After having noticed the relevant provisions of Control Order 2009, at this stage we may reproduce the clauses which have been impugned in the instant writ petition which read as under: "(4) In the urban area, no co-operative society shall be allotted more than one fair price shop. 5(3) In rural areas, marketing societies or primary agricultural co­operative societies shall be appointed as lead societies in case of more than one application received from the societies, the lead society shall be appointed on the basis of recommendation made by District Registrar Co-operation Society and District Supply Controller/District Supply Officer and the identified lead society shall make arrangement in Information Technology enabled devices like computers and electronic data base management. (6) Fair price shops in rural areas shall be allotted to primary agricultural cooperative societies and laghu variopaj sahakari societies registered under the Madhya Pradesh Cooperative Societies Act, 1960. The societies should have a credit limit amounting to 2002% more than purchasing amount or credit needed for monthly allocation (foodgrain, kerosene, sugar) alongwith sufficient storage space and computer for data entry and accounting purposes. The societies shall run the shops themselves and not operate through any agent or any private person." 8. It is well sealed in-law that Article 14 of the Constitution of India forbids class legislation but does not forbid reasonable classification. The classification in order to be reasonable must be founded on intelligible differentia and that differentia must have rational relation to the object soughB to be achieved [See AIR 1958 SC 958]. The wider concept of equality beforJ the law and equal protection of law is that there shall be equality amongst equals. The classification in order to be reasonable must be founded on intelligible differentia and that differentia must have rational relation to the object soughB to be achieved [See AIR 1958 SC 958]. The wider concept of equality beforJ the law and equal protection of law is that there shall be equality amongst equals. Even amongst equal there can be unequal treatment based on intelligible differentia having rational relation to the object sought to be achieved. [M.P. Ration Vikreta Sangh Society v State of M.P., AIR 1981 SC 2001 ]. The Division Bench of this Court in M.P. Ration Vikreta Sangh Society v. State of M.P., 1981 MPLJ 528 while dealing with the nature of right to run the fair price shops has held that fair price shops are established by the Government. The Government can operate them by appointing their own agents. No person has fundamental right to be appointed as agent of the Government for running fair price shop. It is open to the Government to devise the reasonable policy for appointment of agent. It is only necessary that in making the appointment of agents there should be no discrimination or violation of Article 14 of the Constitution. The aforesaid decision of the Division Bench of this Court was upheld by the Supreme Court in M P Ration Vikreta Sangh Society v. State of M.P., AIR 1981 SC 2001 (supra)] 9. In the context of aforesaid well settled legal principles so far as challenge to Clause (4) of the Control Order 2009 is concerned it is worth mentioning that under Control Order 2009 strictly requires advance lifting of the commodities and 200% of credit margin of the amount required to purchase monthly allocation. The distribution of food stuff in time can better be ensured through different societies in urban areas. The time availability of food stuff to card holders appears to be the primary object of Control Order 2009. The object of clause 4 is to ensure that essential commodities are distributed to public in general by a fair price shop and the economic restraint and financial condition of the society does not become the impediment in timely distribution of the fair price shops. Thus, clause (4) of Annexure-II has a reasonable nexus with the object sought to be achieved i.e. timely distribution of essential commodities to the card holders. Thus, clause (4) of Annexure-II has a reasonable nexus with the object sought to be achieved i.e. timely distribution of essential commodities to the card holders. Thus, clause (4) cannot be said to be either arbitrary or discriminatory. Clause (4) appears to have been enacted in the interest of public in general. 10. The petitioners have assailed the validity of clause 5(3) of the Control Order 2009 as discriminatory and arbitrary. From perusal of clause 5(3) and, clause 2(j) of Control Order 2009 it is apparent that the work of lead society is to lift and transport the controlled essential commodities from the issue centre to the designated fair price shop. In other words the distribution of controlled essential commodities from issue centre to fair price shop is to be regulated by the lead society. The State Government purchases various commodities on storage prices and makes provision for its storage at the godowns owned by the agencies of the Sate Government for the purpose of storage of the said commodities. From godowns, the distribution takes place as per the demand of essential commodities and the distribution is essentially required to be controlled and regulated by the lead society. Considering the nature of work to be performed by the lead society, clause 5(3) of the Control Order 2009 provides that in rural area, marketing societies or primary agricultural cooperative societies shall be appointed as lead societies. The constitution and functioning of Primary Agricultural Credit Facilities Societies and is different from other societies. Besides that, in the instant writ petitions the petitioners do not have any locus to assail the validity of clause 5(3) of the Control Order 2009 as none of them is running the lead society and none of them have been entrusted with the functioning of operating as lead society. Therefore, challenge to clause 5(3) of the Control Order 2009 must fail. 11. We may now deal with the challenge to clause 6 of Annexure - II of the Control Order 2009. The Primary Agricultural Cooperative Society and Laghu Vanopaj Sahakari Societies registered under the 1960 Act are the cooperative societies which are basically controlled and operated through the organized structure and they have sufficient financial viability so as to ensure full compliance of the provisions of Control Order 2009. The Primary Agricultural Cooperative Society and Laghu Vanopaj Sahakari Societies registered under the 1960 Act are the cooperative societies which are basically controlled and operated through the organized structure and they have sufficient financial viability so as to ensure full compliance of the provisions of Control Order 2009. A chart has been mentioned in paragraph 25 of the return to show that Primary Agricultural Cooperative Societies and Laghu Vanopaj Cooperative Societies are different classes of the Societies than the societies which have been excluded from the purview of Clause (6) of Annexure- II are different kind of societies and, therefore, they form a separate classes. The Primary Agricultural Cooperative Societies are the members of District Central Cooperative Banks. Similarly, Laghu Vanopaj Sahakari Samiti are the members of Jila Vanopaj Sahakari Sangh. The Primary Agricultural Cooperative Societies and Laghu Vanopaj Sahakari Samiti are functioning in rural and forest villages. The aforesaid societies have better financial viability and organized structure in rural areas and, therefore, the have been chosen for allotment of fair price shops in comparison to other societies in rural areas. The chart is reproduced here for facility of reference: . No. Pacs (Primary Agriculture Cooperative Societies Laghu Vanopaj Sahkari Samiti Other Societies 1. Compulsory membership of District Central Cooperative Bank. Compulsory membership of Jila Vanopaj Sahkari Sangh Membership of other societies is not mandatory. 2. Cash Credit Limit is obtained by them from DCCB and DCCB in turn get from Apex Bank. Financial assistance from Jila Vanopaj Sahkari Sangh and from Rajya Vanopaj Sangh. No facility of cash credit limit is available. 3. Control of D.CCB over the PACS and control over the DCCB by Apex Bank. Laghu Vanopaj Sahkari Samitiare controlled by Jila Vanopaj �Sahkari Sangh and Jila Vanopaj Sahkari Sangh are controlled by Rajya Vanopaj Sangh. No direct control of any other Apex Societies. 4. Compensation in lieu of losses incurred in PDS services to the FPS as well as to lead societies. Financial assistance by the District and State level Society. No compulsory compensation or financial assistance from any District and State agency or from any other society. 5. Multipurpose work like credit, extension of loan for various purposes like for fertilizer, seeds, pesticides, etc. Income of interest which is a significant mode of revenue generation. Multipurpose function like collection and sale of forest produce and its sale, like Tendupatta, Aawla, Chironji, Mahuya, etc. 5. Multipurpose work like credit, extension of loan for various purposes like for fertilizer, seeds, pesticides, etc. Income of interest which is a significant mode of revenue generation. Multipurpose function like collection and sale of forest produce and its sale, like Tendupatta, Aawla, Chironji, Mahuya, etc. No multipurpose function but only to run PDS shops, however, various other objects are included in by-laws. 6. Saving Movability Scheme in the name of 'Bachat Bank'. Nil Nil Features with regard to organized structure S. No Pacs (Primary Agriculture Cooperative Societies Laghu Vanopaj Sahkari Samiti Other Societies 1. 3 Tier Structure a. PACS at Primary level b. District Central Cooperative Bank at District level c. Apex Bank of State level 3 Tier Structure a. Laghu Vanopaj Sahkari Samiti at Primary level b. Jila Sahkari Samiti at District level c. Rajya Vanopaj Sangh at State level No such organised structure 2. Situated at Villate/ Panchayat level number of PACS 4526, 99 percent PACS are situated in Rural areas. Exclusively situated in Rural and forest are number of societies is 1066 Maximum society situated in Urban area. Number of societies including Mahila Bahu Udasye and Prathmik Upbhokta Bhandar are 5116 and 97 percent are situated in Urban areas. 3. Society Manager are the employees of DCCB Society Manager are the employees of Jila Sahkari Sangh. Self employed. 4. Administrative and Disciplinary control by DCCB Administrative and Disciplinary control by Jila Vanopaj Sahkari Sangh and Forestdepartment. No administrative and Disciplinary control. Self run society. 5. Availability of godown for the food grain storage no. of available godown is 5442 Availability of godown for the food grain storage 353 and 232 with Laghu Vanopaj Sangh total 353+232=585 Not necessary. Few societies, have their private godown. 6. Availability of manpower Sahayak Samiti Prabhandhak and Salesman total No. are 13932 Availability of manpower. Manager, total no. are 1066 Self appointed employees. 12. Thus, the classification of the cooperative societies for the purpose of running fair price shops in rural areas is based on intelligible differentia and has a reasonable nexus with the object i.e. availability of essential commodities at controlled prices to public in general. Thus, the provisions of clause (6) can neither be said to be arbitrary nor discriminatory. 13. 12. Thus, the classification of the cooperative societies for the purpose of running fair price shops in rural areas is based on intelligible differentia and has a reasonable nexus with the object i.e. availability of essential commodities at controlled prices to public in general. Thus, the provisions of clause (6) can neither be said to be arbitrary nor discriminatory. 13. So far the submission made on behalf of the petitioners that the rule of estoppel would bind the State Government, as the petitioners acting on the representation made by the State Government have formed the cooperative societies, is concerned the same need mention only to be rejected. It is well settled in law that principle of estopple does not operate against the law. [See (2008) 14 SCC 228]. The reliance placed by learned counsel for the petitioners on the decision of the Supreme court in Vij Resins Pvt. Ltd. (supra) is of no assistance to the petitioners as in that case the impugned Act was struck down on the ground that the same was hit by Article 31 (2) of the Constitution of India as it took away the right to hold the property which is not the case here. Similarly the case of Orient Paper Mills Ltd. (supra) is also distinguishable. Under an executive order the State Government had granted assurance that industries would be granted exemption from payment of electricity duty. In the aforesaid context, it was held by the Supreme Court that the State Government is bound by the doctrine of promissory estoppel. Besides that no assurance was given by the State Government to the petitioners that the policy of allotment of fair price shops would never be changed. 14. So far as the submission made by the learned counsel for the petitioners that the provisions of Control Order 2009 are in contravention of the Order framed by the Central Government is concerned, it is clear from perusal of the provision of Public Distribution System (Control) Order, 2001 that the Central Government has left it to the State Government to decide the person in whose favour the licence should be issued to run fair price shops and it is for the State Government to decide as to who should be granted the licence to run fair price shop. There is no provision in Public Distribution System (Control) Order 2001 directing that a particular individual or a cooperative society has to be granted licence to distribute the essential commodities through fair price shop. Therefore, the submission that the provisions of Control Order 2009 are in contravention of the Control Order 2001 does not deserve acceptance and accordingly, the same is rejected. 15. In view of the preceding analysis the impugned provisions of the Control Order 2009 neither offend Article 14 not Article 19(1) (g) of the Constitution of India. However, in the cases where the petitioners have challenged the order of cancellation of fair price licence of shops on merits, such petitioners would be at liberty to challenge the order of cancellation of licence of fair price shop in accordance with law. In the result, we do not find any merit in the writ petitions. The same are accordingly dismissed.