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2017 DIGILAW 1316 (GAU)

LAHOWAL SAMABAY SAMITY v. STATE OF ASSAM

2017-09-21

SUMAN SHYAM

body2017
JUDGMENT : Suman Shyam, J. Heard Mr. N. Dutta, learned senior counsel as well as Mr. K.N. Choudhury, learned senior counsel assisted by Mr. G.Z. Ahmed and Mr. H. Buragohain, learned counsel appearing for the writ petitioners. I have also heard Mr. T.C. Chutia, learned Additional Senior Govt. Advocate, Assam, appearing for the respondents. 2. The core question that arises for decision in this group of writ petitions is - whether or not the decision of the State Government to engage private parties as Transporters for transportation of the PDS articles for door step delivery to the Fair Price Shops is in consonance with the Targeted Public Distribution System (Control) Order, 2015 issued under section 3 of the Essential Commodities Act, 1955? Since a common question of law arises for decision in all the writ petitions, I propose to dispose of this batch of writ petitions by this common judgment and order. 3. For the purpose of better appreciation of the controversy involved in this group of writ petitions, the facts in WP(C) No.6647/2015 are briefly referred to, treating the same as the lead case. W.P.(C) No. 6647/2015 has been preferred by the Chairmen, Secretaries and shareholders of several cooperative societies from the district of Dibrugarh, Assam, assailing the NIT dated 24.01.2014 inviting bids to issue transportation contract for carrying food grains from the FCI depot as well as the order dated 07.10.2015 issued by the Deputy Commissioner, Dibrugarh notifying the transporters appointed the respondent nos. 5 and 6 for lifting the food grains in the district under the PDS network for the month of November 2015. It is the case of the writ petitioners they are running the Whole Sale Co-operative Societies (WSCS)/Gaon Panchayat Samabay Samity Ltd (GPSS) engaged in the business of operating the Public Distribution System (PDS) networks by lifting food grains from the depot of the FCI and ensuring their distribution to the beneficiaries through the Fair Price Shop (FPS) attached to them. Some of the GPSS run by the petitioners have their own transportation facilities and by using the same they have been lifting and transporting the PDS articles. It is the specifically pleaded case of the petitioners that the price of the grains is fixed by the government which cannot be altered by the GPSS/FPS. Under the prevailing system, the Government pays only an amount of Rs. It is the specifically pleaded case of the petitioners that the price of the grains is fixed by the government which cannot be altered by the GPSS/FPS. Under the prevailing system, the Government pays only an amount of Rs. 30/- per quintal to the GPSS for the AAY rice which also includes the commission of Rs. 7/- per quintal payable to the respective FPS. Similarly, In case of the Below Poverty Line ("BPL") Scheme, the margin money provided to the GPSS is only Rs. 36/- per quintal and in case of Above Poverty Line ("APL") Scheme the procurement price is Rs. 830/- per quintal whereas the selling price is fixed by the Government at Rs. 926/- per quintal. By operating on a thin margin of profit the respective WSCS and GPSS have been surviving for decades. However, in the garb of implementation of the National Food Security Act, 2013 (for short "NFSA") an attempt is being made by the State Government to engage Transporters/Contractors for transporting the food grains from the FCI depot for direct delivery to the FPS in a manner which is impermissible under the Targeted Public Distribution System (Control) Order, 2015 (For short "Order of 2015"). 4. The State respondents have not filed any counter-affidavit but by filing I.A.(Civil) No.2795/2017 a prayer has been made for vacating the interim order dated 28.10.2015 passed by this Court directing maintenance of status quo as regards the existing system of distribution of the PDS commodities insofar as the transportation is concerned. The learned State Counsel submits that the Government would rely upon the averments made in the said application for the purpose of contesting the writ petitions. 5. Mr. N. Dutta, learned senior counsel for the petitioners, submit that the PDS network in Assam is operating under the Order of 2015 issued under section 3 of the Essential Commodities Act, 1955. He has invited the attention of this Court to the clauses contained in the Order of 2015 to contend that as per clause 2(g) of the order, it is only the authorised agency named therein that would be entitled to lift the food grains from the designated FCI depot. He has invited the attention of this Court to the clauses contained in the Order of 2015 to contend that as per clause 2(g) of the order, it is only the authorised agency named therein that would be entitled to lift the food grains from the designated FCI depot. Since the Order of 2015 does not permit a private operator to play any role in the process of lifting and distribution of the PDS articles, the impugned NIT dated 24.01.2014 issued by the respondent No.4 inviting bids for engaging private transporters is ex-facie illegal and liable to be set aside by this court. 6. By referring to the materials available on record, Mr. Dutta further submits that at present the WSCS/GPSS are operating on a very thin margin of profit and with such meagre income, the GPSS are also required to bear the transportation cost from their own resources. Therefore, if private transporters are allowed to participate in the process of distribution of the food grains than it would escalate the price of the grains thereby imposing additional financial burden on the public, besides creating a middlemen in PDS system. The learned senior counsel submits that the decision to introduce private contractor as transporters will practically displace the existing WSCS/GPSS from the operation sphere substantially diminishing the profitability of their business ultimately leading to closure of these institutions. According to the learned senior counsel, implementation of the NFSA need not displace the existing PDS system, which is in existence in the State of Assam since several decades and if the State Government is in need of a transporter the respective GPSS can be engaged to execute the work of transportation as well. Mr. Dutta, therefore, contends that the proposed move on the part of the State Government to engage private transporters for lifting and transportation of the food grains is a step which runs counter to the very essence of the co-operative movement in India and hence, should be negated by this court. 7. Repelling the contention advanced by the petitioner's counsel, Mr. Dutta, therefore, contends that the proposed move on the part of the State Government to engage private transporters for lifting and transportation of the food grains is a step which runs counter to the very essence of the co-operative movement in India and hence, should be negated by this court. 7. Repelling the contention advanced by the petitioner's counsel, Mr. T.C. Chutia, learned Additional Senior Government Advocate, Assam, submits that the decision to engage transporters by floating tenders is aimed at effective implementation of the provisions of the NFSA, 2013 which is being implemented as per the instructions received from the Government of India vide Notification dated 13.08.2014 addressed to the Principal Secretary, Food & Civil Supplies and Consumer Affairs Department, Government of Assam, whereby the State has been asked to expedite the implementation of doorstep delivery of food grains within 01.09.2014 by engaging transporters. Mr. Chutia submits that the steps initiated by the State for establishing a centralised system of transportation for door step delivery of the PDS articles to the FPS is aimed at fulfilling the objective of the NFSA and the same does not in any way intend to take away any privilege enjoyed by the cooperative societies engaged in PDS business. 8. Referring to the documents available on record, the learned State Counsel has emphatically argued that the existing PDS system has practically failed in the country due to pilferage of food articles and various mal-practices indulged at the stage of lifting of the articles from the FCI depot as a result of which, the targeted category of people have been deprived of the benefit of the scheme. In order to correct the systemic lacuna and with a view to revamp the distribution system, the Government of India has come up with the concept of Targeted Public Distribution System and accordingly, the Order of 2015 has been issued by the concerned Ministry permitting the recourse adopted by the State. Mr. Chutia further submitted that it would be open for the respective co-operative societies to take part in the tender process, if they so desire, subject to fulfilment of tender conditions. 9. I have considered the submissions made by the learned counsel for the parties and have also gone through the materials available on record. 10. Mr. Chutia further submitted that it would be open for the respective co-operative societies to take part in the tender process, if they so desire, subject to fulfilment of tender conditions. 9. I have considered the submissions made by the learned counsel for the parties and have also gone through the materials available on record. 10. Before making an attempt to deal with the controversy raised in these group petitions, it may be useful to briefly refer to the evolution of the Public Distribution System (PDS) and Food Security programmes in India. The Public Distribution System (PDS) was originally established by the Government of India, Ministry of Consumer Affairs, Food and Public Distribution with the objective of distributing food and non-food items at a subsidized rate to the poor in the country. The PDS Scheme was to operate on a synergy between the Central and the State Governments whereby the responsibility to make the grains available through the FCI depots was with the Central Government while the State Governments were entrusted with the responsibility of ensuring proper lifting and distribution of the same through the network of the FPS. 11. It appears that on a review of the existing system of distribution of food grains, several anomalies had been detected by the Government in the working of the PDS system and therefore, a need was felt to revamp the distribution system with special focus on the poor people of the country. Consequently, the Government of India had launched the Targeted Public Distribution System (TPDS) in the year 1997, thereby requiring the States to formulate and implement fool proof arrangements for proper identification of the poor and for delivery and distribution of the food grains in a transparent and accountable manner through the FPS. 12. It would be important to note herein that the Essential Commodities Act, 1955 (for short "Act of 1955") was enacted with the object of protecting the interest of the general public by providing for control of production, supply and distribution thereof and trade and commerce in certain commodities. As per Section 3 of the Act of 1955, the Central Government would have the power to issue licences regulating or prohibiting the production, supply and distribution thereof and trade and commerce of such essential commodities. As per Section 3 of the Act of 1955, the Central Government would have the power to issue licences regulating or prohibiting the production, supply and distribution thereof and trade and commerce of such essential commodities. Sub-section 2(d) of section 3 of the Act of 1955 confers powers upon the Central and the State Government or an official or agent of such governments to regulate by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity. 13. In exercise of powers conferred under section 3 of the Act of 1955, the Governor of Assam had framed the Assam Public Distribution of Articles Order, 1982 (for short "Order of 1982"). The Order of 1982 provides for issuing sub-whole seller and retailer licences permitting them to deal with the "Notified Articles" viz. (1) Rice (2) Levy Sugar (3) Salt (4) Kerosene Oil (5) Imported Edible Oil (6) Controlled Cloth and (7) Wheat Products (Atta, Maida, Suji and Bran). The proviso to section 3 of the Order of 1982 makes it clear that those organizations and Co-operative Societies performing any or all of the functions of PDS immediately before commencement of the Order shall continue to function as such until specific instructions to the contrary are issued to them under this Order. It is not in dispute that the Co-operative Societies run by the writ petitioners are also operating the PDS business under the provisions of the Order of 1982. 14. Under Section 3(1) of the Act of 1955, the Government of India, Ministry of Consumer Affairs, Food and Public Distribution had published the Public Distribution System (Control) Order, 2001 (for short "order of 2001")laying down the parameters for implementation of the provisions of the Act. As per the Order of 2001, the Food Corporation of India (FCI) or any other agency designated by the Central Government for the purpose shall ensure physical delivery of food grains to the State Government for distribution under the Public Distribution System and on getting the allocation of the food grains the State Government was required to issue district wise allocation orders authorising their agencies or nominees to draw food grains from the FCI. The designated authority of the State Governments was to ensure that the allocation was made available to the FPS. The designated authority of the State Governments was to ensure that the allocation was made available to the FPS. The Order of 2001 also made provisions for the State Government to issue an order under Section 3 of the Act of 1955 for regulating the sale and distribution of the essential commodities as well as to issue licences to the Fair Price Shop owners laying down the duties and responsibilities of the Fair Price Shop owners. 15. The Parliament had enacted the National Food Security Act, 2013 with the object of providing food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable price to the people to lead a life with dignity and for dealing with other matters incidental thereto. The Act of 2013 is the outcome, not only of the States obligation under Article 47 of the Constitution to provide raising level of nutrition and standard of living of its people but also the commitment of India towards implementation of the Universal Declaration of Human Rights and International Covenant on Economic, Social and Cultural Rights, to which India is a signatory. The Declaration casts a responsibility on all state parties to recognise the right of everyone to adequate food. A bare reading of the statement of objects and reasons of the Act of 2013 goes to show that the paramount object of the Act is to provide nutritional security to the poor by implementing the Targeted Public Distribution System (TPDS) by making available, subsidized food grains to the people living Below Poverty Line including Antyodaya Anna Yojna (AAY) and also the Above Poverty Line households. From the scheme of the NFSA, 2013, it is apparent that what was hitherto considered as a mere welfare measure for the poor in this country has now been given the shape of legal right under the NFSA 2013 ensuring food security to all the eligible beneficiaries. 16. The NFSA contains specific provisions laying down the specific role and responsibilities of the Central Government, State Government and the Local authorities. Section 22 of the Act of 2013, inter alia, provides that the Central Government shall be duty bound to allocate the required quantity of food grains from Central pool to State Governments. 17. Section 24 of the Act lays down the obligations of the State Government towards ensuring food security. Section 22 of the Act of 2013, inter alia, provides that the Central Government shall be duty bound to allocate the required quantity of food grains from Central pool to State Governments. 17. Section 24 of the Act lays down the obligations of the State Government towards ensuring food security. Section 24 is extracted herein below for ready reference - "24. Implementation and monitoring of schemes for ensuring food security.- (1) The State Government shall be responsible for implementation and monitoring of the schemes of various Ministries and Departments of the Central Government in accordance with guidelines issued by the Central Government for each scheme, and their own schemes, for ensuring food security to the targeted beneficiaries in their State. (2) Under the Targeted Public Distribution System, it shall be the duty of the State Government to- (a) take delivery of food-grains from the designated depots of the Central Government in the State, at the prices specified in Schedule I, organise intra-State allocations for delivery of the allocated food-grains through their authorised agencies at the door-step of each fair price shop; and (b) ensure actual delivery or supply of the food-grains to the entitled persons at the prices specified in Schedule I. (3) For food-grain requirements in respect of entitlements under sections 4, 5 and section 6, it shall be the responsibility of the State Government to take delivery of food-grains from the designated depots of the Central Government in the State, at the prices specified in Schedule I for persons belonging to eligible households and ensure actual delivery of entitled benefits, as specified in the aforesaid sections. (4) In case of non-supply of the entitled quantities of food-grains or meals to entitled persons under Chapter II, the State Government shall be responsible for payment of food security allowance specified in section 8. (4) In case of non-supply of the entitled quantities of food-grains or meals to entitled persons under Chapter II, the State Government shall be responsible for payment of food security allowance specified in section 8. (5) For efficient operations of the Targeted Public Distribution System, every State Government shall,- (a) create and maintain scientific storage facilities at the State, District and Block levels, being sufficient to accommodate food-grains required under the Targeted Public Distribution System and other food based welfare schemes; (b) suitably strengthen capacities of their Food and Civil Supplies Corporations and other designated agencies; (c) establish institutionalised licensing arrangements for fair price shops in accordance with the relevant provisions of the Public Distribution System (Control) Order, 2001 made under the Essential Commodities Act, 1955, (10 of 1955) as amended from time to time." 18. In order to give an impetus to the process of implementation of the provisions of the NFSA, in exercise of power conferred under section 3 of the Act of 1955, the Central Government had issued the Targeted Public Distribution System (Control) Order, 2015 which replaces the Order of 2001. Clause 2(g) of the Order of 2015 defines authorised agency which reads as follows - "2(g) "authorised agency" means the concerned Department of State Government or a body corporate or a company owned by it or a co-operative;" 19. Clause 7(1) of the Order of 2015 reads as follows - "7. lifting of food-grains by States.- (1) The State Government shall lift food-grains from the designated depots of the Corporation through its authorised agency." 20. Further, Clause 8 of the Order of 2015 deals with the mechanism of distribution of food grains. Clause 8(3) reads as follows - "8.(3) The State Government shall ensure, through the authorised agency, physical delivery of food-grains to the fair price shop by end of the month preceding the allocation month and in any case not later than the first week of the allocation month." 21. Clauses 7(11) and 7 (12) of the Order of 2015 goes to show that the State Government has been given the liberty to devise suitable mechanism for transportation of food-grains from the Corporation's godown to the intermediate godown and make door-step delivery of the food-grains to the fair price shops. Clauses 7(11) and 7 (12) of the Order of 2015 goes to show that the State Government has been given the liberty to devise suitable mechanism for transportation of food-grains from the Corporation's godown to the intermediate godown and make door-step delivery of the food-grains to the fair price shops. Sub clauses (11) and (12) of Clause 7 will be relevant for the purpose of this case and therefore, are quoted herein below for ready reference - "(11) The State Government shall devise suitable mechanism for transportation of food-grains from the Corporation godown to the intermediate godown and the door-steps delivery of the food-grains to the fair price shop Provided that the State Government may also transport food-grains directly to the fair price shop from the Corporation godown and ensure its door-step delivery to the fair price shop." (12) The State Government shall furnish a report on quarterly basis to the Central Government regarding the door-step delivery in the format at Annex-III." 22. A combined reading of section 24(2) of the NFSA 2013, section 3(2)(d) of the Act of 1955 as well as clauses 8(3) of the Order of 2015 leaves no manner of doubt that it is State Governments that have been exclusively vested with the authority and jurisdiction for lifting and delivery of the food-grains to the FPS. Clauses 7(11) and (12) have been inserted in the Order of 2015 so as to permit the State Government to devise appropriate mechanism of transportation for ensuring door-step delivery of the food grains to each of the FPS so as to fulfil the obligation cast under section 24(2) of NFSA. It will be significant to note here-in that there was no provision such as clause 7(11) and (12) in the Order of 2001, which has been replaced by the Order of 2015. It is thus distinctively clear that clauses 7(11) and (12) have been incorporated in the Order of 2015 so as to permit the State Governments to bring the operation of the existing PDS networks in alignment with the NFSA. Accordingly, by issuing the impugned NIT, the respondent No 4 has sought to appoint transporters for lifting and transportation of food grains in a two Tier system i.e. from the FCI depot to the WSCS/GPSS godown and from such godowns to the assigned FPSs. 23. Accordingly, by issuing the impugned NIT, the respondent No 4 has sought to appoint transporters for lifting and transportation of food grains in a two Tier system i.e. from the FCI depot to the WSCS/GPSS godown and from such godowns to the assigned FPSs. 23. In the light of the facts alluded above, let me now deal with the contentious issues involved in this batch of writ petitions. As noted above, the petitioners are seeking to enforce a right to handle the transportation of the food grain under the PDS network to the exclusion of any private operator. It is not in dispute that the writ petitioner's societies are operating their business as per the privilege/licences granted under the Order of 1982. Section 2(a) of the Order of 1982 provides that "appointed dealers" would mean such category of persons, which includes the Co-operative Society, engaged in the business of purchase, sale or storage for sale of any of the notified article but the same does not include transportation of such articles. The order of 1982 further makes it apparent that the "whole-seller" "sub-whole-seller" or the "retailer" would only have the right to sell such notified articles at the price stipulated by the Government. Therefore, it cannot be said that the Order of 1982 confers any indefeasible right upon the co-operative societies/GPSS to execute the work of lifting and/or transportation of the PDS articles from the FCI depot and generate any income therefrom. 24. It is not doubt true that clause 2(g) of the Order of 2015 does not envisage any private party in the matter of lifting of food grains. But what must be borne in mind is that under the NFSA, the Act of 1955 as well as the Order of 2015, it is the State Government which is the repository of the powers and authority to lift and distribute the food grains through the PDS networks. Therefore, the role of the Co-operative Societies/GPSS and the FPS in the entire PDS scheme, in the State of Assam, has to essentially remain confined to the scope and ambit of the licences issued under the Order of 1982. Since the Order of 1982 does not confer any right upon the WSCS/GPSS to transport the food grains hence, such a right cannot be recognised by this Court in favour of the petitioners. 25. Since the Order of 1982 does not confer any right upon the WSCS/GPSS to transport the food grains hence, such a right cannot be recognised by this Court in favour of the petitioners. 25. Coming to the next question pertaining to the interpretation of clause 2(g) of the Order of 2015, there can be no dispute about the fact that the definition of "authorised agency" does not include any private contractor. But, as has been mentioned above, it must be borne in mind that the ultimate authority and responsibility to lift the food grain and ensure its proper distribution though the FPS lies with the State Government and the WSCW/GPSS are such agencies of the state through which the operation can be carried out. Therefore, the State Government must be given the freedom to adopt all such measures at its disposal so as to discharge its statutory obligations so long as they adopt a fair and transparent process. 26. In the present case also, the duty of the State to take delivery of the food grains from the designated depots of the central government (FCI) in the state and ensuring their door-step delivery to the FPS through the authorised agencies has been enjoined under section 24 (2)(a) of NFSA. The NFSA is an enactment with a clear objective and the usage of expressions such as "ensure actual delivery or supply of food grains to the entitled persons at the price specified in the Schedule-I " in section 24(2)(b) indicates in un-equivocal terms that the statute has very focused and well set out priorities. That apart, section 24(4) of the NFSA spells out the consequences in case of non-supply of entitled quantities of food grains. Therefore, if the State Government does not have its own infrastructure to independently carry out the responsibilities specifically entrusted upon it either under the NFSA or the Act of 1955, there is nothing in the law preventing it from employing external agencies for the purpose of carrying out its statutory obligations. Rather, having regard to the scale and intensity of the task cut out under NFSA, it is axiomatic that taking the aide of external agencies having the requisite capacity to undertake the task, where necessary by inviting public contract, would be a permissible mode of enhancing the capacity of the State so as to implement the provisions of the Act in a time bound manner. 27. Since the decision of the State Government to issue the impugned NIT for engaging transporters is a step initiated in terms of clause 7(11) of the Order of 2015 for the purpose of increasing its capacity towards implementation of the NFSA, such transporters would have to be treated as an integral part of the state machinery both for the purpose of the Order of 2015 as well as the NFSA. Therefore, the petitioners' contention to the effect that employing private parties as transportation contractors would be beyond the scope of clause 2(g) of the Order of 2015, in the opinion of this court, does not merit acceptance. 28. From the submissions advanced by the learned counsels for the parties it appears to this court that prior to the implementation of the NFSA many of the WSCS/GPSS used to make their own transportation arrangements for operating the PDS networks. Since it is not the case of the writ petitioners that their PDS licence under the Order of 1982 has been withdrawn or varied in any manner, hence, it is not clear from the materials on record as to how the new system has interdicted with their legitimate sources of income in the PDS business. Rather, from the materials on record, this court is of the view that the new system of transportation would bring more transparency to the whole process besides ensuring that the WSCS/GPSS do not end up incurring any additional expenditure on account of transportation cost. 29. Having regard to the materials placed on record, it is apparent that the WSCS/GPSS/FPS are operating on a very narrow profit margin but that is an issue which will have to be addressed by the concerned government on the basis of facts and figures brought before it by the aggrieved parties and the said issue cannot be the subject matter of the present proceeding. It may be the case that the introduction of the new transport system has in some way diminished the profitability of the business from the writ petitioners point of view but unless a clear case of violation of any statutory right is made out, this court would not interfere in the matter in exercise of powers of judicial review under Article 226 of the Constitution, more so, when there is no specific challenge to clauses 7(11) and (12) of the Order of 2015 based on pleaded facts and particulars. 30. For the reasons stated herein above, this Court is of the opinion that there is no merit in these writ petitions and the same are accordingly dismissed. 31. There would be no order as to cost.