JUDGMENT : U.Durga Prasad Rao, J. The petitioner prays for Writ of Mandamus declaring the proceedings in SR.No.52/2019, S5, dated 07.12.2019 passed by the 3rd respondent cancelling authorization of the petitioner's fair price shop No.0123030 situated in Syrigam Village, Jalumuru Mandal, Srikakulam District without issuing notice for cancellation, without considering the petitioner's explanation and without conducting due enquiry and recording reasons for cancellation of authorization, as illegal, arbitrary and violative of principles of natural justice and the provisions of the A.P State Targeted Public Distribution System (Control) Order, 2018 (for short "Control Order, 2018") and for a consequential order to set aside the order of the 3rd respondent. 2. The petitioner's case in nutshell is thus: The petitioner is the dealer of fair price shop No.0123030 situated in Syrigam Village, Jalumuru Mandal, Srikakulam District. On 20.08.2019, the Vigilance authorities conducted inspection in his shop and allegedly found certain variations in essential commodities i.e. PDS Rice and PDS sugar etc. and submitted a report to the 3rd respondent recommending to initiate proceedings under Section 6-A of Essential Commodities Act, 1955 (for short "EC Act") against the petitioner. Basing on the said report, 3rd respondent issued a show cause notice dated 22.08.2019, wherein four charges were framed and the petitioner was directed to submit his written explanation within seven days as to why the stock seized from the shop should not be confiscated to the Government. The petitioner submitted his explanation to the aforesaid notice denying all the allegations made against him under different charges. However, to his surprise, the 3rd respondent issued proceedings in Rc.No.332/1019/S4, dated 31.08.2019 suspending the authorization of the petitioner's fair price shop. Aggrieved the petitioner filed W.P.No.13150 of 2019 seeking writ of Mandamus to declare the order passed by 3rd respondent as illegal. The said writ petition was allowed on 23.09.2019 setting aside the proceedings dated 31.08.2019 passed by 3rd respondent. Thereafter the 3rd respondent issued notice directing the petitioner to appear for personal hearing and the petitioner's counsel appeared and submitted written explanation dated 10.10.2019 denying the charges leveled against the petitioner and prayed to drop proceedings against the petitioner. However, to the utter surprise and dismay of the petitioner, the 3rd respondent issued proceedings in SR.No.52/2019/S5, dated 07.12.2019 cancelling the authorization of the petitioner's fair price shop.
However, to the utter surprise and dismay of the petitioner, the 3rd respondent issued proceedings in SR.No.52/2019/S5, dated 07.12.2019 cancelling the authorization of the petitioner's fair price shop. The petitioner's grievance is that no prior show cause notice was issued directing the petitioner to show cause as to why his authorization shall not be cancelled and no explanation was received and no enquiry was conducted and the petitioner was not afforded an opportunity to produce the evidence in support of his stand. Therefore, the proceedings dated 07.12.2019 were totally violative of principles of natural justice and provisions of the Control Order, 2018. Hence, the writ petition. 3. Heard learned counsel for the petitioner and learned Government Pleader for Civil Supplies, representing the respondents. 4. The crux of the argument of learned counsel for the petitioner is that the show cause notice in SR.No.52/2019,S5 dated 22.08.2019 was issued altogether for different purpose i.e. directing him to submit written explanation for the charges as to why the stock seized by the inspection authorities should not be confiscated to the Government. He would vehemently argue that except directing so, the 3rd respondent has neither mentioned in the notice nor issued another show cause notice calling for his explanation as to why his authorization shall not be cancelled. In expatiation, learned counsel would argue that confiscation of the seized stock will be done in the proceedings initiated under Section 6-A of EC Act, whereas cancellation of authorization will be done after completion of disciplinary enquiry. However, in this case single notice was issued to the petitioner directing him to submit his explanation as to why stock seized from his shop shall not be confiscated. Therefore, the petitioner was given to understanding that in case he fails to submit his explanation or his explanation was found not satisfactory, at the worst, the stock seized from the shop would be confiscated and no further action would be initiated. Learned counsel would further submit that in this case, the petitioner has promptly submitted his explanation against all the four charges framed against him and therefore, if at all the 3rd respondent found his explanation to be false or not satisfactory, he should have passed order only confiscating the seized stock, but should not have cancelled the authorization.
Learned counsel would further submit that in this case, the petitioner has promptly submitted his explanation against all the four charges framed against him and therefore, if at all the 3rd respondent found his explanation to be false or not satisfactory, he should have passed order only confiscating the seized stock, but should not have cancelled the authorization. However, in gross infraction of established principles of natural justice and provisions of the Control Order, 2018, the 3rd respondent passed order cancelling authorization, which is a severe punishment not backed up by proper show cause notice, not conducting due enquiry and affording an opportunity to the petitioner to adduce evidence in support of his explanation. Therefore, the impugned order fell foul of law. 5. On the other hand, in oppugnation, learned Government Pleader for Civil Supplies while supporting the impugned order would strenuously argue that having regard to the mismanagement of fair price shop by the petitioner, the 3rd respondent framed as many as four charges and directed him to submit his explanation and accordingly, the petitioner submitted his explanation through his counsel, who submitted his arguments in tune with his explanation. Having found no substance in the explanation offered by the petitioner as against the charges, the 3rd respondent had no other go except cancelling his authorization. Therefore, the impugned order is well within the parameters of law, which does not require any judicial review. He thus prayed to dismiss the writ petition. 6. Now, the point for consideration is: Whether there are merits in this writ petition to allow? 7. Point: I gave my anxious consideration to the above arguments of learned counsel and perused the record. I find force in the argument of learned counsel for the petitioner. Admittedly, the 3rd respondent issued show cause notice in SR.No.52/2019,S5 dated 22.08.2019, wherein he mentioned following four charges and issued direction to the petitioner as follows: "Charges are framed against Sri Kornu Raminaidu, S/o Appalaswamy, aged 22 years, by caste Polinativelama, F.P Shop Dealer, Depot No.0123030, Syrigam Village of Jalumuru Mandal in Srikakulam District. Charge : 1 Being an authorized dealer has to supply E.Cs to the cardholders with correct weighment but the inspection officials found variations PDS rice 16.01 qutls, sugar (-) 0.526 qtls, thus the respondent contravened the Cl.11 of AP State Targeted Public Distribution System (Control) Order, 2018 under Cl.8 (11) (c) of the conditions of authorization.
Charge : 1 Being an authorized dealer has to supply E.Cs to the cardholders with correct weighment but the inspection officials found variations PDS rice 16.01 qutls, sugar (-) 0.526 qtls, thus the respondent contravened the Cl.11 of AP State Targeted Public Distribution System (Control) Order, 2018 under Cl.8 (11) (c) of the conditions of authorization. Charge : 2 The Fair Price Shop Dealer shall display the following information on a notice board at a prominent place in the shop on daily basis, thus the respondent contravened Cl.12 (n) of AP State Targeted Public Distribution System (Control) Order, 2018. Charge : 3 Make available stock register by filing electronically generated slips from electronic point of sale/manual registers for a minimum period of one year in case of non electronic point of sale Fair Price Shops, thus the respondent contravened Cl.12 (p) (1) of AP State Targeted Public Distribution System (Control) Order, 2018. Charge : 4 The Fair Price Shop Dealer shall display the following information on a notice board at a prominent place in the shop on daily basis, thus the respondent contravened Cl.12 (n) of AP State Targeted Public Distribution System (Control) Order, 2018. Therefore, the respondent is hereby directed to submit written explanation for the above charges within 7 days from the date of receipt of this notice as to why the stock seized in this case should not be confiscated to the Government. If the respondent fails to submit his explanation within the stipulated period, it will be construed that the respondent has no explanation to offer and the case will be decided on the material available on record." 8. Thus, in the show cause notice the 3rd respondent pellucidly mentioned that the petitioner should submit written explanation within 7 days from the date of receipt of the notice as to why the stock seized in this case should not be confiscated to the Government. There was no further direction in the said notice that if the petitioner failed to submit explanation or his explanation was found to be false or unsatisfactory, his authorization would be cancelled. Therefore, this Court agrees with the argument of the petitioner that he was given to the understanding that in the event of his failure to submit explanation or his explanation was found to be not satisfactory, the seized stock would be confiscated and nothing more.
Therefore, this Court agrees with the argument of the petitioner that he was given to the understanding that in the event of his failure to submit explanation or his explanation was found to be not satisfactory, the seized stock would be confiscated and nothing more. Here, it should be mentioned that 3rd respondent issued show cause notice as a quasi judicial authority and the proceedings conducted by him are also quasi judicial proceedings. Therefore, the entire proceedings i.e. from issuing notice to conducting enquiry and passing order, should meet the legal requirement. 9. Then come to the impugned order dated 07.12.2019, the 3rd respondent having narrated each charge and corresponding explanation of the petitioner, only stated in one sentence about the fate of the explanation as follows: "The explanation submitted by the FP Shop dealer Sri Kornu Raminaidu, S/o Appalaswamy was not at all satisfactory." As rightly argued by the learned counsel for the petitioner, there was no discussion as to the nature of charges and the explanation submitted against each charge and why explanation was not satisfactory i.e. Whether it was false one, bereft of logic and not acceptable by a man of ordinary prudence or whether explanation was against any established statute or Control Order framed by the Government. As already stated supra, the proceedings conducted by 3 rd respondent are quasi judicial in nature and therefore, the 3rd respondent is bound to give cogent reasons for every finding he arrived at. Unfortunately, except recording his subjective as non-satisfaction of the explanation, no objective analysis was made and no reasons were mentioned by the 3rd respondent. This is one of the major lacunae in the impugned order. 10. Another shortcoming in the order is that it appears that the 3rd respondent has not given any opportunity to the petitioner to adduce evidence in support of his explanation. Thus the impugned order is vitiated by the law for the following reasons: (1) Show cause notice in SR.No.52/2019,S5 dated 22.08.2019 was issued only as to why the stock seized from his shop should not be confiscated, but no separate show cause notice was issued as to why the authorization of the petitioner should not be cancelled. (2) No opportunity was given to the petitioner to adduce evidence in support of his written explanation.
(2) No opportunity was given to the petitioner to adduce evidence in support of his written explanation. (3) No cogent reasons are mentioned by the 3rd respondent for arriving at finding that the explanation is not satisfactory. Therefore, the impugned order is factually and legally not sustainable. 11. Therefore, this writ petition is allowed and the impugned order in SR.No.52/2019, S5, dated 07.12.2019 passed by the 3rd respondent is set aside and the matter is remitted back to the 3rd respondent to issue a fresh show cause notice to the petitioner to show cause as to why his authorization shall not be cancelled and on submission of explanation by the petitioner, conduct full-fledged enquiry and afford an opportunity to the petitioner to adduce evidence in support of his explanation and after hearing both sides, pass an appropriate order on merits in accordance with governing law and Rules as expeditiously as possible. Till such exercise is completed, the petitioner shall be permitted to operate fair price shop No.0123030 situated in Syrigam Village, Jalumuru Mandal, Srikakulam District. No costs. As a sequel, miscellaneous petitions, if any pending, shall stand closed.