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2024 DIGILAW 941 (AP)

K. Naga Bhuvaneswari v. State Of A. P.

2024-08-02

B.S.BHANUMATHI

body2024
ORDER : B.S. Bhanumathi, J. This writ petition is filed under Article 226 of the Constitution of India to issue a writ of mandamus declaring the action of the 4th respondent in cancelling the authorization of the petitioner vide proceedings in Rc.No.5995/2015-L, dated 18.07.2016 as confirmed by the 3rd respondent in A.C.D.Dis No.22/2016-S7 dated 17.06.2017 and the orders of the second respondent in Revision Case No.2/2017-S7, dated 25.04.2018 is arbitrary, illegal, contrary to law and to pass such other orders. 2. The facts led to filing of the petition are as follows: The petitioner was appointed as fair price shop dealer of Shop No.29, Dammalapadu village, Muppalla Mandal, Guntur District and since the date of appointment, she distributed the essential commodities regularly. On 11.06.2015, the shop of the petitioner was inspected and the authorities stated that the following variations were found in the stock. Sl.No. Commodity O.B. Receipts Total Salts Book Balance Ground Stocks Variations Variation percentage 1 PDS Rice 0.15 44.70 44.85 43.65 1.20 1.00 (1) 0.20 2 AAY Rice -- 7.70 7.70 7.70 -- -- NIL Total: 0.15 52.40 52.55 51.35 1.20 1.00 (-) 0.20 0.39% 3 Sugar 0.01 1.66 1.67 1.63 0.04 0.05 (+)0.01 0.61% 4 K.Oil (in lts.) -- 237 237 237 -- 10 (+) 10 4.22% The following irregularities in the maintenance of the FP shop were found:- 1) Not maintained the records properly which lead to variations in stocks. Thus, she violated Cl.22(viii) of APSPDS (Control) Order, 2008. 2) The F.P.shop dealer has not maintained the dates and timings of the F.P.shop, as prescribed by the Government. Thus, she violated Cl.22(vii) of APSPDS (Control) Order, 2008. 3) The F.P. shop dealer has not maintained the stock-cum-price board properly. Thus, she violated Cl.22(v) of APSPDS (Control) Order, 2008. Hence, the Mandal Revenue Inspector, Muppalla seized the stocks and handed over them to the Village Revenue Officer, Dammalapadu village. The Tahsildar, Muppalla filed a report under Section 6A of E.C.Act, 1955 before the Joint Collector, Guntur and requested to confiscate the entire seized stock to the Government and also informed to the Revenue Divisional Officer, Guntur to initiate necessary disciplinary action against the dealer. The Tahsildar, Muppalla filed a report under Section 6A of E.C.Act, 1955 before the Joint Collector, Guntur and requested to confiscate the entire seized stock to the Government and also informed to the Revenue Divisional Officer, Guntur to initiate necessary disciplinary action against the dealer. Accordingly, the Revenue Divisional Officer, Guntur issued a show cause notice to the dealer vide Rc.No.5995/2015 dated 01.07.2015 calling for explanation for the following charges: Charge No.1: That the F.P.shop dealer has failed to maintain the records properly which lead 20 kgs shortage in Rice, 1 Kg excess in sugar and 10 lts. Excess in K.Oil stocks. Thus, she violated Cl.22(viii) of APSPDS (Control) Order, 2008. Charge No.2: The variations found in the stocks discloses that the dealer has not maintained the records properly. Thus, she violated Cl.22(viii) of APSPDS (Control) Order, 2008. Charge No.3: The F.P.shop dealer has not maintained the dates and timings of the F.P.shop, as prescribed by the Government. Thus, she violated Cl.22(vii) of APSPDS (Control) Order, 2008. Charge No.4: That the F.P.shop dealer has not maintained the stock-cum-price board properly. Thus, she violated Cl.22(v) of APSPDS (Control) Order, 2008. So, the petitioner submitted explanation on 07.07.2015. At that juncture, the petitioner filed a W.P.No.18386 of 2015 before this High Court at Hyderabad which was disposed of on 13.07.2015 directing the Revenue Divisional Officer, Guntur and the Tahsildar/R-5 Muppalla to release the stocks to the dealer as the authorization was in force. Accordingly, the stock was released. The RDO/R-4, Guntur heard the petitioner on 06.01.2016 on submission of written explanation. Again on 16.07.2016, the petitioner was heard stating that the written explanation submitted on 06.01.2016 holds good. Then, the RDO, Guntur held that the charges against the petitioner were proved and cancelled the authorization vide proceedings Rc.No.5995/2015-L dated 18.07.2016. Aggrieved by the orders, the petitioner filed appeal before the Joint Collector, Guntur/R-3 who dismissed the appeal vide proceedings ACD Dis No.22/2016-S7 dated 17.06.2017 confirming the orders of the 4th respondent. Then, the RDO, Guntur held that the charges against the petitioner were proved and cancelled the authorization vide proceedings Rc.No.5995/2015-L dated 18.07.2016. Aggrieved by the orders, the petitioner filed appeal before the Joint Collector, Guntur/R-3 who dismissed the appeal vide proceedings ACD Dis No.22/2016-S7 dated 17.06.2017 confirming the orders of the 4th respondent. Aggrieved by those orders, the petitioner preferred revision before the District Collector, Guntur/R-2 who by the orders dated 25.04.2018 impugned in this writ petition held that charges no.3 and 4 are not proved since the panchnama does not contain the irregularities pointed out in these charges as contended by the dealer, however held that charges no.1 and 2 were proved beyond doubt as the variations in K.Oil stock is 4.22 percent which is beyond the permissible variation of 1.5% of transactions for one month under Clause 24 of APSPDS (Control), Order, 2008. 3. Aggrieved by the order of the second respondent, this writ petition is filed stating that the enquiry held is illegal as it was based merely on the report of the 5th respondent under Section 6A of the E.C.Act and no independent enquiry was conducted by the 4th respondent as required under law and that no opportunity was given to the petitioner to participate in the enquiry. In this regard, the petitioner placed reliance on the decisions of this High Court 1) In P. Hanumantha Rao v. Chief Rationing Officer, Twin cities 1993(3) ALT page, 442 , at paras 5 & 6 held as follows: “5. Though the exact Control Order under which the power of suspension has been invoked is not mentioned, it is obviously the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973. Cl. 3(4) of the said Order provides for amendment, variation, suspension or cancellation of the authorisation issued to the dealer. The suspension contemplated thereunder is a final order of suspension passed after due enquiry. Indisputably it does not take within its fold the suspension pending enquiry as an interim measure. Suspension pending enquiry is not specifically provided for. However, it can be taken as an implied or ancillary power vested in the authority empowered to exercise the power of cancellation or suspension as envisaged by sub-clause (4) of Clause 3. 6. Indisputably it does not take within its fold the suspension pending enquiry as an interim measure. Suspension pending enquiry is not specifically provided for. However, it can be taken as an implied or ancillary power vested in the authority empowered to exercise the power of cancellation or suspension as envisaged by sub-clause (4) of Clause 3. 6. If the order in question is construed to be a final order under Clause 3(4), the same cannot be sustained having regard to the fact that the impugned suspension was made exparte without giving any opportunity of showing cause against the proposed 1 suspension. Apart from the principles of natural justice, sub-clause (4) of Clause 3 itself speaks of an enquiry. Thus, the impugned order is liable to be set aside as being violative of the principles of natural justice and the mandatory requisite of enquiry as contemplated by Clause 3(4), if the impugned order is treated as an order passed under Clause 3(4). On the other hand, notwithstanding the incorrect mention of the source of power, the order in question can be said to have been passed as an interim measure pending enquiry or investigation, against the petitioner the impugned order still suffers from certain legal informities. Except referring to the report of the Asst. Supply Officer and the filing of the case against the petitioner by the Vigilance Cell for certain irregularities nothing is stated in the impugned order regarding the prima facie violations of the Control Order or the conditions of the authorisation. The mere fact that the Vigilance Cell officials registered a case against the petitioner and arrested him, was perhaps found sufficient to direct immediate suspension of the licence and there is no other indication in the impugned order. It is axiomatic that an authority to whom statutory power is vested has to apply his mind independently and to reach a conclusion-prima facie or otherwise whether any order is to be passed in exercise of that power. The prima facie satisfaction must be that of the 2nd respondent but not that of the Vigilance Officials. It may be that while exercising the power of suspension pending further enquiry, the adverse material which has come to light in the course of investigation by the Vigilance Officials can be taken into account. The prima facie satisfaction must be that of the 2nd respondent but not that of the Vigilance Officials. It may be that while exercising the power of suspension pending further enquiry, the adverse material which has come to light in the course of investigation by the Vigilance Officials can be taken into account. But there should not be mechanical exercise of power based merely on a report that a vigilance case has been filed against the petitioner. Secondly interim suspension of the authorisation cannot be made on the ground of mere pendency of 6-A enquiry. There is no such provision in the Control Order. In the very nature of things, interim suspension is meant only to facilitate further enquiry under the provisions of the Control Order and it would only be a prelude to take final action under Clause 3(4) by way of suspension for a specific period or cancellation of the authorisation. The 2nd respondent obviously fell into error in assuming that so long as proceedings under Sec. 6-A were pending against the petitioner, the suspension of the dealer's licence should be an automatic consequence. In the present case, though nearly two months have elapsed since the date of passing the suspension order, no steps have been taken so far to initiate the enquiry as a step-in-aid to pass final orders under Clause 3(4). Obviously the 2nd respondent does not want to do anything more than suspending the licence until and unless the case under Section 6-A is disposed of. Such an action cannot be countenanced in law. Suspension of the authorisation cannot go on for an indefinite length of time linking it up with the outcome of the proceedings under Sec. 6-A. No doubt the material which formed the basis for initiating action under Sec. 6-A of the Essential Commodities Act by the Vigilance Cell can also form the basis for initiation of the proceedings under Clause 3(4) of the Control Order. But, without contemplating to take any such proceedings, it is not open to the 2nd respondent to pass a blanket order allowing the suspension to remain in force until Sec. 6-A proceedings are finalized.” 2) M. Sadasiva Sekhar vs. District Collector and Ors 2003(3) ALT 68 at para 24 held as follows: “24. The above sub-clause confers power on the appointing authority to suspend or cancel the authorization subject to conducting enquiry and recording reasons. The above sub-clause confers power on the appointing authority to suspend or cancel the authorization subject to conducting enquiry and recording reasons. The phrase "after making such enquiry as may be deemed necessary" makes it plain that discretion is vested in the appointing authority as to the nature, method and manner of conducting enquiry as is deemed necessary. There can be no hard and fast rule that in every case of suspension or cancellation, the appointing authority should afford an opportunity of being heard to the fair price shop dealer (M.P.Jndustries Ltd. v. Union of India). No doubt, the word "enquiry" into the allegations against a dealer has a broad connotation and takes in its fold an opportunity of filing explanation to the parties and/or affording a right of hearing. Because the legislature used the words "such enquiry as may be deemed necessary", we have to give a restricted meaning to the phrase and leave it to the appointing authority whether or not the fair price shop dealer should be heard. It is not possible to accept the submission of the learned Counsel for the petitioner and supply the words so as to make Sub-clause (4) of Clause 3 read providing opportunity of being heard'. This conclusion also derives support from the various principles laid down by the Supreme Court in the cases discussed hereinabove and the same may be stated thus: 1. 'Personal hearing' is not considered as an incident of rule of audi alteram partem. A person is entitled to an opportunity of making a representation even if delegated legislation is silent on the same. The same is not, however, true with regard to affording a personal hearing to an aggrieved party. The law treats an opportunity to make a representation also as a personal hearing. (M.P. Industries Ltd. v. Union of India and Indru Ramchand Bharvani v. Union of India). 2. When delegated legislation excludes 'personal hearing' it is not permissible for the Court to read into the rule 'an opportunity of being heard by the authority'; 3. When the rule itself says that an authority is vested with the power to conduct "such enquiry as deemed fit", the discretion is left to the authority as to what is the nature of enquiry. When the rule itself says that an authority is vested with the power to conduct "such enquiry as deemed fit", the discretion is left to the authority as to what is the nature of enquiry. If the authority, as a part of such enquiry, intends to give an opportunity of being heard, it must be treated as a manifestation of exercise of discretion in the facts of a particular case and not as a general rule. 4. Clause 3(4) of the A.P. Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973 does not require the appointing authority to afford an opportunity of being heard to the fair price shop dealer. However, if proposed action is both for cancellation/suspension as well as forfeiture of the deposit under Clause 3(2) of the Control Order, it is a case where the appointing authority compulsorily is required to afford an opportunity of making a representation as well as an opportunity of being heard; 5. In all cases where an enquiry is conducted under Clause 3(4) of the Control Order and where an opportunity of personal hearing is not given, the burden is on the dealer to plead and prove the prejudice caused to him by not giving a personal hearing. Illegality of the order cannot be readily presumed wherever no personal hearing was given (State Bank of Patiala v. S.K.Sharma, M.C.Mehta v. Union of India and Aligarh Muslim University v. Mansoor Ali Khan); 6(a) In a case where a show cause notice is issued requiring submission of explanation and also affording personal hearing, if desired, and the authority fails to afford such opportunity, the impugned order has to be scrutinized by applying the test of prejudice; and (b) In a case where a show cause notice is issued requiring submission of explanation and also affording personal hearing, if desired, and the aggrieved party fails to exercise such option for personal hearing, it should be deemed that he has waived such right of being heard (State Bank of Patiala v. S.K.Sharma).” 3) In B. Manjula Vs. District Collector, Civil Supplies and Ors. 2015 (4) ALT 572 10 & 11 paras at paras 10 & 11 held as follows: “10. An 'enquiry' pre-supposes an opportunity of personal hearing to the dealer to explain his/her case based on the records such as sales and stock registers. District Collector, Civil Supplies and Ors. 2015 (4) ALT 572 10 & 11 paras at paras 10 & 11 held as follows: “10. An 'enquiry' pre-supposes an opportunity of personal hearing to the dealer to explain his/her case based on the records such as sales and stock registers. If need be, such 'enquiry' must also include recording the sworn statement of the dealer and witnesses, if any, from his/her side. In cases where either card holders or other persons sent any complaint, they must also be examined in the presence of the dealer or his/her lawyer and the dealer shall be given an opportunity of cross-examining such persons. The licencing/disciplinary authority shall also supply to the dealer all the reports on which he is likely to place reliance to the detriment of the dealer. Unless the dealer has no explanation at all to offer, the licensing/disciplinary authority is bound to hold a detailed enquiry. 11. The experience of this Court reveals that the appointing authorities of fair price shop dealers are dispensing with the requirement of making personal enquiry by summoning the dealers. They are merely relying upon the reports sent by their subordinates i.e., Deputy Tahsildars and Tahsildars, behind the back of the dealers and resting their decisions solely upon those reports. This procedure is anathema to the concept of 'enquiry' which otherwise means affording the dealer an opportunity of a fair hearing.” 4) In C.Durga Srinivas Rao and others Vs The State of Andhra Pradesh W.P.No.30126 of 2015 at para 26 held as follows: “26. From a conjoined reading of the provisions of the Control Order, more particularly clause 5 and 24 read with the decisions of this Court, the following conclusions can be drawn. From a conjoined reading of the provisions of the Control Order, more particularly clause 5 and 24 read with the decisions of this Court, the following conclusions can be drawn. "(i) The appointing authority can suspend the authorisation under clause 5(5) of the Control Order, if grave charges exist and the case warrants suspension, but should not be exercised in a routine manner without applying mind; (ii) The power of suspension under clause 5(5) of the Control Order includes the power to suspend the authorisation pending enquiry and no show cause notice is necessary before exercising such power; (iii) The order of suspension should be followed by a show cause notice immediately by specifying the charges in clear terms and giving sufficient time to the dealer to submit his/her explanation; (iv) The charges so levelled may contain two parts viz., one, containing serious charges, which may attract the cancellation of authorisation and another containing marginal variations and minor irregularities at fair price shops as indicated in clause 24 of the Control Order. (v) While issuing the show cause notice, the appointing authority shall enclose a copy of the report of any subordinate officer or a copy of the complaints received, which prompted him to take action; (vi) After receiving the explanation from the dealer, in case of denial by him, the appointing authority shall hold an enquiry and prove the charges levelled against the dealer. Such enquiry should be fair by placing the material before the dealer but cannot be elevated to the level of a regular court trial. The burden lies on the appointing authority to prove charges. The responsibility to hold enquiry shall not be delegated; (vii) The enquiry shall be completed as soon as possible but not later than ninety days from the date of suspension. After completion of enquiry, the appointing authority shall record reasons in respect of each charge and pass appropriate orders in accordance with the Control Order. (viii) The order so passed should be communicated to the dealer immediately and shall not be implemented till the expiry of 30 days, the period for preferring appeal. (ix) It has to be noted that in all cases of proven charges, it is not necessary for the appointing authority to cancel the authorisation and in appropriate cases, he/she can pass suitable orders imposing penalty or let off with a warning." 4. (ix) It has to be noted that in all cases of proven charges, it is not necessary for the appointing authority to cancel the authorisation and in appropriate cases, he/she can pass suitable orders imposing penalty or let off with a warning." 4. On the other hand, the learned Assistant Government Pleader for Civil Supplies submitted that due procedure has been followed and enough opportunity was given to the petitioner to participate in the enquiry and that the impugned order is valid as the variation in K-Oil is beyond the permissible limit. 5. In reply, the learned counsel submitted that even if it is considered that the variation is beyond permissible limit, the harsh action of cancellation of the dealership ought not to have been passed by the respondent authorities and a lenient action ought to have been adopted. 6. As can be seen from the above stated facts, the only variation found by the authorities is 10 liters excess K-Oil after distribution of 237 liters of K-Oil as per the record. The explanation given by the petitioner that variation of 10 liters of the oil is nothing but dead stock which could not be taken out was rejected on the ground that it is not an underground tank, but is kept in a barrier and can be easily taken out by titling as is a common practice by the dealers. The explanation of the petitioner is not considered in a proper perspective and just by assuming a common practice, the second respondent has erroneously upheld the finding and a harsh decision of cancelling the dealership was taken. The other minor variations in other stock would also indicate that the dealer is not diverting the stock to the black market as is suspected by the other authorities below the second respondent. 7. Therefore, the view of the second respondent in upholding the charges no.1 and 2 cannot sustain and are liable to be set aside. 8. In the result, the writ petition is allowed. There shall be no order as to costs. As a sequel, miscellaneous petitions, if any pending, shall stand closed.