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2023 DIGILAW 1104 (PAT)

Ghuran Paswan Son of Late Mohit Paswan v. State of Bihar

2023-09-26

CHAKRADHARI SHARAN SINGH, MADHURESH PRASAD, NAWNEET KUMAR PANDEY

body2023
JUDGMENT : CHAKRADHARI SHARAN SINGH, J. The Bihar Targeted Public Distribution System (Control) Order, 2016 (hereinafter referred to as the ‘BTPDS Control Order-2016’) has been issued by the State Government in exercise of power conferred under Clause-3 of the Essential Commodities Act, 1955, and with reference to the various provisions under the Targeted Public Distribution System Control Order, 2015 (TPDS Control Order, 2015), issued by the Government of India. There is no gainsaying that the BTPDS Control Order-2016 is statutory in character, which regulates ration cards, licensing and regulation of fair price shops, operation of fair price shops, monitoring, transparency and accountability, penalty, powers of search and seizure, and appeal, other related matters. 2. Clause 25 of the said BTPDS Control Order-2016 specifies the circumstances in which an action is to be taken in the light of an order passed by the Supreme Court. For the benefit of quick reference, Clause-25 of the said BTPDS Control Order-2016 is being reproduced hereinbelow:- “25. Action against a licensee. -(i) Given the order passed by the Hon'ble Supreme Court in Civil Writ 196/01, action shall be taken against the licensees in the following circumstances:- Licensees who, (a) do not keep their shops open throughout the month during the stipulated period; (b) fail to provide food grains to BPL families strictly at BPL rates and no higher; (c) keep the ration cards of BPL household with them; (d) make false entries in the BPL ration cards; (e) engage in black marketing or siphoning away food grains to the open market and handover such ration shops to such other person/organizations shall make themselves liable for cancellation of their license. The concerned authorities will not show any laxity on the subject.” 3. Clause-27 of the BTPDS Control Order-2016, stipulates cancellation of a licence of a Fair Price Shop, in case a licencee violates any provision of the said Order or fails to comply with the duties and responsibilities assigned to the licensee. The said Clause-27 of the BTPDS Control Order-2016 reads as follows:- “27. Cancellation of License. -(i) If a licensee violates any provision of this Order or fails to comply duties and responsibilities assigned to the license, his license shall be cancelled by the licensing authority by a written order, and such a cancellation of license shall not affect other actions initiated/initiable under the Essential Commodity Act, 1955 (Central Act 10 of 1955). Cancellation of License. -(i) If a licensee violates any provision of this Order or fails to comply duties and responsibilities assigned to the license, his license shall be cancelled by the licensing authority by a written order, and such a cancellation of license shall not affect other actions initiated/initiable under the Essential Commodity Act, 1955 (Central Act 10 of 1955). (ii) No order of cancellation of a license shall be made until the licensee has been given sufficient opportunity to state his case against the proposal of cancellation of his license. (iii) The cases of violation of the provisions of this Order shall be disposed of within two months, as far as possible, after coming in cognizance as for. (underscored for emphasis) 4. It is manifest on a plain reading of Sub-clause (ii) of Clause-27 of the BTPDS Control Order-2016 that giving of sufficient opportunity to a licensee to state his case against the proposal for cancellation of his licence is an essential statutory requirement. Whether it is mandatory for licensing authority to state clearly in its notice under Sub-clause (ii) of Clause-27 of the BTPDS Control Order, 2016 that it is proposed to cancel the licence, is the sole question which has arisen before this Full Bench to answer, on a reference having been made by a Division Bench of this Court. 5. It is worthwhile mentioning that a Division Bench of this Court in the case of Ram Bachan Ram Vs the State of Bihar reported in 2018 (4) PLJR 516 , has held that in no uncertain terms the words, ‘proposal for cancellation’ appearing under Sub-clause (ii) of Clause-27 clearly contemplates that when the show cause notice is issued to the licensee, the licensee should be categorically informed that there is a proposal for cancellation of a licence. Paragraph no. 6 of the said decision in the case of Ram Bachan Ram (supra) read as under:- “Even though, the respondents have filed a counter affidavit and have tried to justify the action, we find that under sub-clause (ii) of Order 27 of the Control Order, 2016, it is clearly stipulated that no order of cancellation of a licence shall be made until the licensee has been given sufficient opportunity to state his case against the proposal of cancellation. The words, ‘proposal for cancellation’ appearing in the statutory provision clearly contemplates that when the show cause notice is issued, licensee should be categorically informed that there is ‘proposal for cancellation of licence’ and show cause notice issued as to why licence should not be cancelled. In the show cause notice issued to the petitioner, apart from the fact that there is no such proposal indicated asking him to show cause as to why licence should not be cancelled, we find that on the second ground also, the impugned action is not sustainable inasmuch as the petitioner gave a detailed explanation and justification against the proposed action, as is contained in Annexure-6, and in a cryptic manner, without considering the explanation and defence of the petitioner, his licence has been cancelled. This amounts to violation of principles of natural justice inasmuch as the non-application of mind and passing an order adverse to or prejudice to a person without considering his defence is also a facet and the requirement of principles of natural justice and this having not been followed, we are of the considered view that principle laid down in the case of Whirlpool Corporation (supra) squarely applies in this case. The order impugned suffers from material legal infirmity and on this count itself without relegating to the petitioner to take recourse to the statutory remedy available, the question could have been considered by the learned Writ Court as is apparent from the face of record that there is statutory violation or violation of the principles of natural justice.” 6. The correctness of the aforesaid opinion recorded by the Division Bench of this Court in the case of Ram Bachan Ram (supra) has been doubted by a Division Bench in its order dated 22.02.2022 passed in CWJC No. 21202 of 2021 (Ghuran Paswan Vs. the State of Bihar) on the reasoning that if a notice contains a clause that a licencee has to explain cause before any further action in this regard is taken, it is to be presumed that it is with respect to cancellation of licence and no other punitive action. Accordingly, by the aforesaid order dated 22.02.2022, differing with the view taken by the Division Bench in the case of Ram Bachan Ram (supra), the Division bench in the case of Ghuran Paswan (supra) has viewed that the matter required consideration by a Larger Bench. 7. Accordingly, by the aforesaid order dated 22.02.2022, differing with the view taken by the Division Bench in the case of Ram Bachan Ram (supra), the Division bench in the case of Ghuran Paswan (supra) has viewed that the matter required consideration by a Larger Bench. 7. In the aforesaid background, these matters have been placed before us for the final determination of the issue whether it is mandatory to mention the proposed action requisite under Sub-clause(ii) of Clause-27 of the BTPDS Control Order-2016. We deem it useful to reproduce the Order of Reference dated 22.02.2022 in verbatim. “1. Heard Mr. Sunil Kumar Karn, the learned counsel for the petitioner and Mr. Upendra Pratap Singh, the learned counsel for the State. 2. The petitioner, a licensee under the P.D.S. scheme, has challenged the order of the Licensing Authority cancelling the License of the petitioner on two grounds, namely, that the order is solely based on the opinion of the Block Supply Officer and that the show-cause notice issued to him is not in accordance with the provisions contained in Rule 27 (ii) of the Bihar Targeted Public Distribution System (Control) Order, 2016 (hereinafter referred to as “Control Order of 2016”). 3. On perusal of the order impugned, it appears that the opinion of the Block Supply Officer was not the sole ground for coming to the conclusion that the petitioner as licencee had violated the terms of the license and had not carried out the responsibilities of a P.D.S. dealer. 4. So far as the other contention is concerned, namely, the notice not being in tune with the requirement under Rule 27(ii) of the Control Order of 2016, the learned counsel for the petitioner has drawn the attention of this Court to a decision of a Bench coeval strength in L.P.A. No. 499 of 2018 reported in 2018 (4) PLJR 516 , wherein it was decided that the applicant / petitioner could not be relegated to the Appellate Authority when the notice for cancellation of license was itself defective. In that case, there was no specific mention in the show-cause notice that the petitioner was required to respond to the proposed cancellation of his license for the breach of the terms of the licence. 5. Several decisions of the Division Benches and Single Benches have been brought to the notice of this Court which has followed the aforesaid decision. 6. 5. Several decisions of the Division Benches and Single Benches have been brought to the notice of this Court which has followed the aforesaid decision. 6. Rule 27 of the Control Order of 2016 reads as follows:- “27. Cancellation of License. -(i) If a licensee violates any provision of this Order or fails to comply duties and responsibilities assigned to the license, his license shall be cancelled by the licensing authority by a written order, and such a cancellation of license shall not affect other actions initiated/initiable under the Essential Commodity Act, 1955 (Central Act 10 of 1955). (ii) No order of cancellation of a license shall be made until the licensee has been given sufficient opportunity to state his case against the proposal of cancellation of his license. (iii) The cases of violation of the provisions of this Order shall be disposed of within two months, as far as possible, after coming in cognizance as for”. (emphasis provided) 7. Sub-clause (ii) of Rule 27 clearly specifies that the license cannot be cancelled unless the licencee has been given sufficient opportunity to state his case against the proposal of cancellation of license. 8. We have found that in most of the show-cause notices, the licencees are made to understand that they need to respond to the charges for further contemplated action in that regard. 9. Mr. Upendra Pratap Singh, the learned counsel for the State has argued that the only sequel to the finding of breach of anyone of the terms of license or not carrying out the responsibility of a P.D.S. dealer, is the cancellation of license. There is no other action contemplated in the entire scheme of the order of 2016. He, therefore, submits that omitting the word “proposal of cancellation”, cannot be fatal and on that ground alone, the notice and the consequent order cannot be quashed. 10. Only in cases of a licencee being made accused in a criminal case concerning E.C. Act or any other offence or his being sent to jail or his becoming fugitive, is there a provision for immediate suspension of the license. 10. Only in cases of a licencee being made accused in a criminal case concerning E.C. Act or any other offence or his being sent to jail or his becoming fugitive, is there a provision for immediate suspension of the license. However, in that case also which is governed by the provision contained in Rule 28 of the Control Order of 2016, notice is required to be served upon him in accordance with the code of Civil Procedure, giving sufficient opportunity to the licencee to present his case before any lawful action could be taken within 180 days as far as possible. 11. This provision of suspension is there only under Rule 28 of the Control Order of 2016 and not in any other Rule. This is for a reason. If a case is lodged against a licencee, he would not normally be readily available as he would be apprehending his arrest. Therefore, it has been specified in the Rule 28 that in the event of an F.I.R. being lodged against a licencee or his being sent to jail or his not having surrendered to the process of law, his license would be suspended and notice shall be served upon him for any further action which would be nothing except cancellation of the license. This interim measure has been provided for the benefit of a licencee so that in case he has been wrongly made accused in a criminal case, he would at least get an opportunity of explaining his cause for saving his license. 12. But, the only action contemplated for breach of the conditions of license or of not carrying out the responsibilities of a P.D.S. dealer as provided under the Control Order of 2016, is the cancellation of the license. 13. Thus, if the notice contains a clause that a licencee has to explain cause before any further action in this regard is taken, it is to be presumed that it is with respect to cancellation of license and no other punitive action. It is as specific as clause “proposed cancellation”. 14. We are, therefore, of considered opinion that the matter requires consideration by a larger Bench with respect to the aforesaid requirement of notice under the Control Order of 2016. 15. Let this matter be placed before Hon’ble the Chief Justice for constituting a larger Bench for final determination of the issue referred to above.” 8. 14. We are, therefore, of considered opinion that the matter requires consideration by a larger Bench with respect to the aforesaid requirement of notice under the Control Order of 2016. 15. Let this matter be placed before Hon’ble the Chief Justice for constituting a larger Bench for final determination of the issue referred to above.” 8. The correctness of show cause notice, on the ground of the absence of proposed action as contemplated under Sub clause (ii) of Clause-27 of the BTPDS Control Order-2016 is under challenge in CWJC No. 1852 of 2022 (Mostt. Saraswati Kuer @ Saraswati Devi Vs. the State of Bihar). The Division Bench, by the following order dated 23.03.2022 has been pleased to direct the said matter to be listed along with CWJC No. 21202 of 2021(Ghuran Paswan Vs. the State of Bihar):- “Heard Mr. Awadhesh Kumar, learned advocate for the petitioner and Mr. Upendera Pratap Singh for the State. Subsequent to the petitioner having been made accused in a criminal case involving E.C. Act, his license was suspended and notice was issued to him to explain cause as to why his license be not cancelled. However, the notice did not specify that in the event of the explanation not being found to be satisfactory, the license shall be cancelled. Mr. Kumar therefore submits that the notice in itself was deficient as it did not state the action contemplated in the event of his explanation not being found to be satisfactory. We do not agree with the aforesaid submission. On the contrary, we find that the notice given to the petitioner was complete in all respects and if the explanation of the petitioner would not have been found to be satisfactory, the only proposed action under the order of 2016 is cancellation of the license and no other measure. Apart from this, we find that on the explanation offered by the petitioner, the Licensing Officer has applied his mind and has discussed the reasons for rejecting such explanation and cancelling the license of the petitioner. The petitioner has not exhausted the remedy of appeal provided to him under the Bihar Targeted Public Distribution System Control Order, 2016. Apart from this, we find that on the explanation offered by the petitioner, the Licensing Officer has applied his mind and has discussed the reasons for rejecting such explanation and cancelling the license of the petitioner. The petitioner has not exhausted the remedy of appeal provided to him under the Bihar Targeted Public Distribution System Control Order, 2016. However, since the petitioner contends that if the notice itself is bad for being deficient in material particulars with regard to the proposed action to be taken, the matter may be referred to the Full Bench as has been done in several other cases by this Court. Let this case be also listed listed along with C.W.J.C. No. 21202 of 2021.” 9. For the same reason, the other matters have been listed with the main case containing Order of Reference i.e. CWJC No. 21202 of 2021. 10. We have heard Mr. Sunil Kumar Karn, Mr. Manoj Kumar Pandey, Mr. Awadhesh Kumar and Mr. Sudhir Kumar Singh, learned counsel for the petitioners and Mr. P. K. Shahi learned A.G, Mr. S. Raza Ahmad, learned AAG-5 and Mr. Arvind Ujjwal, learned Standing Counsel, for the State. 11. We must mention at the very outset that Mr. P. K. Shahi, learned Advocate General has candidly expressed his views and has submitted that since the statute itself provides that the show cause notice, under Clause-27 of the BTPDS Control Order-2016, should contain a proposal for cancellation of licence, there is no reason why the licensing authority should be exempted from mentioning the proposed action in the notice itself. He has fairly argued that mentioning of the proposed action in the notice as contemplated in Sub-clause (ii) of Clause27 of the BTPDS Control Order-2016 not only satisfies the statutory requirement but is also in consonance with the principles of natural justice. 12. Learned counsel representing the petitioners have argued that if the statute prescribes a particular thing to be done in a particular manner, the same should be done in that manner alone or not at all. They have argued that it is one of the essential requirements of the principles of natural justice that the show cause notice must spell out clearly that there is intention on the part of the issuer of notice to cancel the licence of a licensee. They have argued that it is one of the essential requirements of the principles of natural justice that the show cause notice must spell out clearly that there is intention on the part of the issuer of notice to cancel the licence of a licensee. Such clear notice, they contend, is essential for ensuring that the person against whom the action of cancellation of licence is intended to be taken, is adequately, informed and meaningful opportunity is afforded to show cause against possible cancellation of his license. Reliance has been placed by them in support of their submissions on various decisions of the Supreme Court including in the case of Whirlpool Corporation Vs. Registrar of trade marks, Mumbai & Ors reported in (1998) 8 SCC 1 , which was relied on by the Division Bench of this Court in the case of Ram Bachan Ram (supra). They have also placed reliance on the Supreme Court’s decision in the case of Nasir Ahmad Vs. Assistant Custodian General, Evacuee Property, U.P. Lucknow and Anr reported in (1980) 3 SCC 1 , Oryx Fisheries Private Limited Vs. Union of India and Ors reported in (2010) 13 SCC 427 , Gorkha Security Services Vs. Government (NCT of Delhi) and Ors reported in (2014) 9 SCC 105 , UMC Technologies Private Limited Vs. Food Corporation of India and Anr reported in (2021) 2 SCC 551 and Daffodils Pharmaceuticals Ltd. Vs. State of U.P. and Anr reported in (2020) 18 SCC 550 , to contend that the mentioning of the proposed action in show cause notice for cancellation of licence is even otherwise an essential requirement of compliance of the principles of natural justice. 13. Given the clear language used in order 27(ii) of the BTPDS Control Order, 2016, in our opinion, we need not refer to various Supreme Court's decisions relied upon, on behalf of the petitioners. It is settled principle of law that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all [See Nazir Ahmad vs. King Emperor ( AIR 1936 PC 253 (2)]. 14. The aforesaid principle of law has been consistently followed by the Supreme Court and this Court. 14. The aforesaid principle of law has been consistently followed by the Supreme Court and this Court. To mention but a few, in case of Babu Verghese v. Bar Council of Kerala reported in (1999) 3 SCC 422 the Supreme Court held that if the manner of doing a particular act is prescribed under any statute and the same is not followed then the action suffers from nullity in the eye of law. Paragraphs 31 and 32 in the case of Babu Verghese (supra) are relevant and are being reproduced below:- "31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor [(1875) 1 Ch D 426 : 45 LJCh 373] which was followed by Lord Roche in Nazir Ahmad v. King Emperor [(1936) 63 IA 372 : AIR 1936 PC 253 ] who stated as under: “[W]here a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.” 32. This rule has since been approved by this Court in Rao Shiv Bahadur Singh v. State of V.P. [ AIR 1954 SC 322 : 1954 SCR 1098 ] and again in Deep Chand v. State of Rajasthan [ AIR 1961 SC 1527 : (1962) 1 SCR 662 ]. These cases were considered by a three-Judge Bench of this Court in State of U.P. v. Singhara Singh [ AIR 1964 SC 358 : (1964) 1 SCWR 57] and the rule laid down in Nazir Ahmad case [(1936) 63 IA 372 : AIR 1936 PC 253 ] was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and has also been recognised as a salutary principle of administrative law. 15. The view expressed in the case of Babu Verghese (supra) has been reiterated by the Supreme Court in the case of Mackinnon Mackenzie & Co. Ltd. v. Mackinnon Employees Union reported in (2015) 4 SCC 544 . 16. 15. The view expressed in the case of Babu Verghese (supra) has been reiterated by the Supreme Court in the case of Mackinnon Mackenzie & Co. Ltd. v. Mackinnon Employees Union reported in (2015) 4 SCC 544 . 16. In the case of State v. Sanjeev Nanda ( AIR 2012 SC 3104 ) also the Supreme Court has reiterated that it is a settled principle of law that if something is required to be done in a particular manner, then that has to be done in that way or not, at all. 17. In the present case, the statute itself requires the licensing authority to give the licensee an opportunity to state his case against the proposal of cancellation of his licence. Following the well settled dictum of law as reiterated in case of Babu Verghese (supra), Sanjeev Nanda (supra) and Mackinnon Mackenzie & Co. Ltd. (supra), we are of the considered opinion that in the present case, Clause 27(ii) clearly prescribes the manner required for giving sufficient opportunity to a licensee to state his case against 'proposal of cancellation of his licence'. 18. In our considered opinion, it is mandatory to mention the proposed action of cancellation of licence in a notice under order 27(ii), in the absence of which a notice cannot be said to be a valid notice under order 27(ii) of the BTPDS Control Order. We find no reason to take a different view than what has been taken by the Division Bench in the case of Ram Bachan Ram (supra) which lays down the correct law. 19. Accordingly, we answer the reference as under:- It is mandatory for a licensing authority issuing a notice under order 27(ii) to a licensee to mention that there is a proposal for cancellation of his licence, failing which such notice cannot be treated to be a valid notice of giving sufficient opportunity to the licensee to state his case under order 27(ii) of the BTPDS Control Order. 20. Let matters be placed before appropriate Bench for adjudication accordingly.