# Lakhan Singh v. State of U.P. & Ors

- **Citation:** (2019) 3 ILRA 1444
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2017-11-24
- **Case number:** Writ C. No. 61939 of 2015
- **Bench:** Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/lakhan-singh-v-state-of-u-p-ors-44770
- **Pages:** 14

## Headnote

A. Civil Law-Essential Commodities Act,
1955
-
U.P.
Essential
Commodities
(Regulation of Sale and Distribution
Control) Order, 2016 - Principle of
Natural Justice - The original authority
as well as to the appellate authority
created under the Control Order exercise
powers of administrative and quasi
judicial nature - Principles of natural
justice and the duty to record reasons
would get attracted to the orders passed
by an such authorities - Duty to record
reasons and due application of mind
would also be required in case of the
orders
passed
by
the
authorities
exercising appellate power. - Recording
of reasons for its decisions - should be
clear and explicit, though not necessarily
detailed and elaborate. (Para 30)
B. Constitution of India - Part IX
Eleventh Schedule - Importance of the
public distribution system - Panchayats
may be entrusted the powers and
responsibilities for implementation of
schemes for economic development and
social
justice
including
'public
distribution system' - Avowed object of
the public distribution system is to
ensure the distribution of essential
commodities in a fair and equitable
manner, to the public at large - Creation
of the licensing system, the mechanism
for distribution of food grains through
fair price shop dealers and agents is only
ancillary to the same. (Para 28)
C. Essential Commodities Act, 1955 - Aim
and Object - An enactment made in the
interest of the general public for control
of production, supply and distribution of,
and trade and commerce, in certain
commodities - Basic aim is to make
available essential commodities to the
public at large at fair price as a measure
of public welfare - Object of the scheme
that the Control Order, 2016 provides for
an elaborate procedure for monitoring
and
ensuring
transparency
and
accountability so as to ensure the
delivery of the stocks of food grains
under the targeted Public Distribution
System to the ration card holders -
Authorities are enjoined to take prompt
action in respect of violation of any
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1445
condition
of
licence
including
any
irregularity committed by the fair price
shop owner. (Para 27 and 29)
Writ Petition dismissed (E-1)
Case law relied: -

## Text

_Characters 0–39,997 of 45,515. This is a partial read: ask again with offset=39997 for what follows._

1444 INDIAN LAW REPORTS ALLAHABAD SERIES
manner.
The
Appellate
Court
also
confirmed the order of the Sub Divisional
Officer
without
considering
the
submissions of the appellant.

8. It is, thus, in the considered view
of the Court that the impugned orders
dated
24.11.2017
passed
by
the
Commissioner
Moradabad,
Mandal
Moradabad and the order dated 18.8.2017
passed by the Sub Divisional Magistrate,
Sambhal, District - Sambhal cannot be
sustained in the eyes of law and,
therefore, they are quashed.

9. The writ petition is allowed.

10. The licence of the petitioner to
run the Fair Price Shop shall be restored
and she shall be given the essential
commodities for supplying to the public
----------

(2019)11ILR A1444

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.10.2019

BEFORE
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ C. No. 61939 of 2015

Lakhan Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Dharmendra Pratap Singh

Counsel for the Respondents:
C.S.C.

A. Civil Law-Essential Commodities Act,
1955
-
U.P.
Essential
Commodities
(Regulation of Sale and Distribution
Control) Order, 2016 - Principle of
Natural Justice - The original authority
as well as to the appellate authority
created under the Control Order exercise
powers of administrative and quasi
judicial nature - Principles of natural
justice and the duty to record reasons
would get attracted to the orders passed
by an such authorities - Duty to record
reasons and due application of mind
would also be required in case of the
orders
passed
by
the
authorities
exercising appellate power. - Recording
of reasons for its decisions - should be
clear and explicit, though not necessarily
detailed and elaborate. (Para 30)
B. Constitution of India - Part IX
Eleventh Schedule - Importance of the
public distribution system - Panchayats
may be entrusted the powers and
responsibilities for implementation of
schemes for economic development and
social
justice
including
'public
distribution system' - Avowed object of
the public distribution system is to
ensure the distribution of essential
commodities in a fair and equitable
manner, to the public at large - Creation
of the licensing system, the mechanism
for distribution of food grains through
fair price shop dealers and agents is only
ancillary to the same. (Para 28)
C. Essential Commodities Act, 1955 - Aim
and Object - An enactment made in the
interest of the general public for control
of production, supply and distribution of,
and trade and commerce, in certain
commodities - Basic aim is to make
available essential commodities to the
public at large at fair price as a measure
of public welfare - Object of the scheme
that the Control Order, 2016 provides for
an elaborate procedure for monitoring
and
ensuring
transparency
and
accountability so as to ensure the
delivery of the stocks of food grains
under the targeted Public Distribution
System to the ration card holders -
Authorities are enjoined to take prompt
action in respect of violation of any
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1445
condition
of
licence
including
any
irregularity committed by the fair price
shop owner. (Para 27 and 29)
Writ Petition dismissed (E-1)
Case law relied: -
1. Kallu Khan Vs St of U.P. & anr. 2008 (6)
ADJ 453 (DB).
2. Gopi Vs St. of U.P. & ors. 2007 (6) ADJ 231
(DB).
3. Puran Singh Vs St. of U.P. & ors. 2010 (3)
ADJ 659 (FB).
4. MP Industries Ltd. Vs Union of India & ors.
AIR 1966 SC 671.
5. Tara Chand Khatri Vs Municipal Corp. of
Delhi & ors. (1977) 1 SCC 472.
6. S.N. Mukherjee Vs Union of India (1990) 4
SCC 594.
(Delivered by Hon'ble Dr. Yogendra
Kumar Srivastava, J.)

1. Heard Sri Dharmendra Pratap
Singh, learned counsel for the petitioner
and Sri Mata Prasad, learned Standing
Counsel
appearing
for
the
State
respondents.

2. The present petition seeks to
challenge the order dated 15.12.2014
passed by the respondent no.2 whereby
the fair price shop agreement of the
petitioner was cancelled and also the
order dated 08.10.2015 passed by the
respondent no.3 in terms of which the
appeal filed by the petitioner there against
under the provisions of U.P. Essential
Commodities (Regulation of Sale and
Distribution Control) Order, 20161 has
also been rejected.

3. The only argument which has
been raised by the petitioner is that the
order passed by the respondent no.2
cancelling his fair price shop agreement
has been passed without considering his
case and that the respondent no.3 has also
rejected his appeal without assigning any
reasons or considering the grounds taken
by the petitioner in the appeal.

4. Per contra, learned Standing
Counsel
appearing
for
the
State
respondents
submits
that
the
order
cancelling the fair price shop agreement
of the petitioner has been passed after
issuance of a show cause notice to the
petitioner and due consideration of his
reply. It has been pointed out that the
respondent no.2 in the order dated
15.12.2014 has recorded its conclusion
that the petitioner had indulged in large
scale irregularities and in view thereof his
fair
price
shop
licence
had
been
cancelled. It is also pointed out that the
grounds taken by the petitioner in the
appeal have been duly considered by
respondent no.3 and the appeal has been
rejected by a reasoned order.

5. Learned Standing Counsel further
submits that the appellate order being an
order of affirmation is not required to
contain detailed and elaborate reasons and
the requirement was only to give some
reasons showing due application of mind
by the appellate authority.

6. In order to appreciate the rival
contentions it would be necessary to
advert to the provisions contained under
the Control Order, 2016 notified by the
State Government in exercise of powers
conferred under Section 3 of the Essential
Commodities Act, 19552 read with the
notification of the Government of India,
Ministry of Consumer Affairs, Food and
Public Distribution for the purposes of
maintaining the supplies of foodgrains
1446 INDIAN LAW REPORTS ALLAHABAD SERIES
and other essential commodities and for
securing their equitable distribution and
availability at fair prices under the
targeted public distribution system.

7. The aforementioned Control Order,
2016 provides for identification of eligible
households, issuance of ration cards to the
eligible households, lifting of foodgrains by
the
authorized
agents
of
the
State
Government from the designated depots of
the Food Corporation of India (constituted
under the Food Corporation of India Act,
1964), and the mechanism for distribution
of the foodgrains allocated under the
targeted public distribution system.

8. The "Fair Price Shop Owner" has
been defined under clause 2(o) of the
Control Order, 2016 to mean a person,
including
a
co-operative
society,
authorized to run a fair price shop under
the provisions of this order.

9. The appointment and regulation
of fair price shops is provided for under
clause 7 of the Control Order, 2016 and
the guidelines for the operation of the fair
price shops have been provided for under
clause 8 thereof.

10. For ease of reference clause 7
and clause 8 of the Control Order, 2016
are being extracted below:-

"7.
Appointment
and
regulation of fair price shops--(1) With
a view to affecting fair distribution of
foodgrains and scheduled commodities
the
State
Government
may
issue
directions under Section 3 of the Act to
such number of fair price shops in an area
and in the manner as it deems fit.

(2) (i) A fair price shop shall be
run through such person and in such
manner as the Collector, subject to the
directions of the State Government may
decide.

(ii) A person appointed to run a
fair price shop under sub-clause (1) shall
act as the agent of the State Government.

(iii) A person appointed to run a
fair price shop under sub-clause (1) shall
sign an agreement, as directed by the
State Government regarding running of
the fair price shop as per the draft
appended to this order before the
competent authority prior to the coming
with effect of the said appointment.

(3) The Food Commissioner
shall ensure that the number of ration card
holders attached to a fair price shop are
reasonable, the fair price shop is so
located that the consumer or ration card
holder does not have to face difficulty to
reach the fair price shop and that proper
coverage is ensured in hilly, desert, tribal
and such other areas difficult to access.

(4) The State Government shall
fix an amount as the fair price shop
owner's
margin,
which
shall
be
periodically
reviewed
for
ensuring
sustained viability of the fair price shop
operations.

(5) The Food Commissioner
shall put in place a mechanism to ensure
the release of fair price shop owner's
margin without any delay.

(6) The State Government shall
allow sale of commodities other than the
foodgrains
and
other
scheduled
commodities
distributed
under
the
Targeted Public Distribution System at
the fair price shop to improve the viability
of the fair price shop operations.

8. Operation of fair price
shops--(1) The fair price shop owner shall
disburse foodgrains to the ration card
holders as per his entitlement under the
Targeted Public Distribution System.
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1447

(2) A ration card holder may
draw his full entitlement of food grains in
more than one installment.

(3) The fair price shop owner
shall not retain the ration cards after the
supply of the foodgrains.

(4) The license issued by the
State Government to the fair price shop
owner shall lay down the duties and
responsibilities of the fair price shop
owner, which shall include, inter alia, --

(i) Sale of foodgrains as per the
entitlement of ration card holders under
the Targeted Public Distribution System
at the prescribed retail issue price;

(ii) display of information on a
notice board at a prominent place in the
shop on daily basis regarding

(a) entitlement of food grains,

(b) scale of issue,

(c) retail issue prices,

(d) timings of opening and
closing of the fair price shop including
lunch break, if any,

(e) stock of foodgrains received
during the month,

(f) opening and closing stock of
foodgrains,

(g) the mechanism including
authority for redressal of grievances with
respect to quality and quantity of food
grains
under
the
Targeted
Public
Distribution System and

(h) toll-free helpline number;

(iii) maintenance of the records
of ration card holders, e.g. stock register,
issue or sale register shall be in the form
prescribed by the State Government
including in the electronic format in a
progressive manner;

(iv) display of samples of food
grains being supplied through the fair
price shop;

(v) production of books and
records relating to the allotment and
distribution
of
food grains
to
the
inspecting agency and furnishing of such
information as may be called for by the
designated authority;

(vi) the shop keeper shall in the
end of each month submit a detailed
description of receipt of foodgrain and
other
essential
commodities,
actual
distribution
during
the
month
and
remaining balance of stock to designated
officer who will send a compilation of all
such certificates under his area of
appointment to the competent authority;

(vii) opening and closing of the
fair price shop as per the prescribed
timings displayed on the notice board.

(5) Any ration card holder
desirous of obtaining extracts from the
records of a fair price shop owner may
make a written request to the owner along
with the deposit of the fees specified by
order by the State Government. The fair
price shop owner shall provide such
extracts of records to the ration card
holder within fourteen days from the date
of receipt of a request and the said fee:

Provided
that
the
State
Government may prescribe the period for
which the records are to be kept for
providing the ration card holder by the
fair price shop owner.

(6) The State Government shall
prescribe the procedure to be followed by
the designated authority in cases where
the fair price shop owner does not provide
the records in the manner referred in subclause (5) to the ration card holder in the
stipulated period and the designated
authority in each case shall ensure that the
records are provided to the ration card
holder without any undue delay.

(7) The Competent Authority
shall take prompt action in respect of
violation of any condition of license
including any irregularity committed by
1448 INDIAN LAW REPORTS ALLAHABAD SERIES
the fair price shop owner, which may
include suspension or cancellation of the
fair price shop owner's license.

(8) The maximum period within
which proceedings relating to enquiry
into irregularities committed by the fair
price shop owner shall be concluded,
resulting in any action as under subclause (7) shall be two months.

(9) In case of suspension or
cancellation
of
the
agreement,
the
Competent
Authority
shall
make
alternative arrangements for ensuring
uninterrupted supply of food grains to the
eligible households:

Provided
that
in
case
of
cancellation of the agreement of the fair
price shop owner, new agreement shall be
issued within a month of cancellation.

(10) The State Government
shall furnish complete information on
action taken against a fair price shop
owner under this clause annually to the
Central Government in the format at
Annexure-V."

11. The Control Order, 2016
provides for an elaborate mechanism for
monitoring and ensuring transparency and
accountability so as to ensure that the
stocks of foodgrains under the Targeted
Public Distribution System are not
replaced or tampered with during storage,
transit or any other stage till delivery to
the ration card holder. The provisions
relating to monitoring transparency and
accountability are provided for under
clause 9 and clause 10 of the Control
Order, 2016 and the same are being
extracted below:-

"9. Monitoring--(1) The Food
Commissioner
shall
ensure
regular
inspections of fair price shops not less
than once in a week by the designated
authority in urban area and twice in a
month in rural area by the designated
authority concerned.

(2) The Food Commissioner
shall ensure that stocks of foodgrains
under the Targeted Public Distribution
System, as issued from the Corporation
godowns, are not replaced or tampered
with during storage, transit or any other
stage till delivery to the ration card
holder.

(3) Any authority or any person
authorized by The Food Commissioner in
this behalf or any other person, who is
engaged in the distribution and handling
of foodgrains under the Targeted Public
Distribution System, shall not indulge in
substitution or adulteration or diversion or
theft of stocks at any stage till delivery to
the ration card holder.

Explanation.--For the purpose
of this clause,--

(a)
"diversion"
means
unauthorised movement or delivery of
food grains released from godowns but
not reaching the intended beneficiaries
under the Targeted Public Distribution
System.

(b)
"substitution"
means
replacement of food grains released from
godowns with the same articles of inferior
quality for distribution to the intended
beneficiaries under the Targeted Public
Distribution System.

(4) The State Government shall
set up vigilance committees for the
Targeted Public Distribution System at
the State, District, Block and fair price
shop levels as per the provisions of the
Food Security Act to perform functions as
specified in the said Act as already
specified in Section 9 of Uttar Pradesh
Food Security Rules, 2015.

(5) Meetings of the vigilance
committees shall be held at least once in
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1449
every quarter of calendar year as specified
in Section 9(3) of Uttar Predesh Food
Security Rules, 2015.

(6) The Food Commissioner
through State Government shall send a
report annually to the Central Government
on the functioning of vigilance committees
in the format at Annexure-VI.

(7) The number of meetings
held by the vigilance committees shall be
displayed on the State web portal and the
action taken on issues discussed in
meetings of vigilance committees shall be
reviewed in the next meeting.

(8) The State Government shall
notify an internal grievance redressal
mechanism which shall include toll free
call centres and use of State web portal.

(9) The Food Commissioner
shall give wide publicity to the up-to-date
details of the Grievance Redressal Officer
such
as
name,
telephone
number
including mobile number, office address
and the grievance redressal mechanism.

(10) The State Government may
appoint or designate, officers as the
District Grievance Redressal Officer; as
provided in the Uttar Pradesh State Food
Security Rules, 2015.

(11) An appeal against the order
of the District Grievance Redressal
Officer shall be preferred before the State
Food
Commission
constituted
under
section 16 of the Uttar Pradesh State Food
Commission Rules, 2015.

(12) The Food Commissioner
shall furnish a report on quarterly basis to
the State Government regarding the
handling of grievances in the format at
Annexure-VII.

(13) The Food Commissioner
shall issue and adopt a Citizen's Charter
as stipulated under law or based on the
model Citizen's Charter issued by the
Central Government.

(14) The Food Commissioner
shall prescribe a system of periodic
reporting, including through electronic
platform, at various levels within the
State regarding the functioning of fair
price shops.

(15) The Food Commissioner
shall ensure monitoring of the end-to-end
operations
of
the
Targeted
Public
Distribution
System
through
the
electronic platform.

Explanation.--For the purpose
of this sub-clause "end-to-end operations"
shall
include
activities
relating
to
digitization of beneficiary, ration cards,
and other databases; computerization of
supply chain management; setting up of
transparency portal, grievance redressal
mechanism
and
fair
price
shop
automation.

(16) The Food Commissioner
shall take necessary steps to educate the
ration card holders regarding their rights
and privileges by the use of electronic and
print media as well as display boards
outside the fair price shops.

10.
Transparency
and
accountability--(1) All Targeted Public
Distribution System related records shall
be placed in the public domain and kept
open for inspection to the public in the
manner as may be prescribed by the State
Government.

(2) Every local authority or any
other authority authorized by the State
Government which shall conduct or cause
to be conducted periodic, social audits on
the functioning of fair price shops of
Targeted Pubic Distribution System and
other welfare schemes after giving fifteen
days notice to the said shops or schemes
and concerned authorities in accordance
with such guidelines as may be notified
from
time
to
time
by
the
State
Government.
1450 INDIAN LAW REPORTS ALLAHABAD SERIES

(3) The State Government may,
if it considers necessary, conduct or cause
to be conducted social audit through
independent agencies having experience
in conduct of such audits."

12. In terms of clause 8(7) of the
Control Order, 2016 the "Competent
Authority" defined under clause 2(j) is
enjoined to take prompt action in respect
of violation of any condition of licence
including any irregularity committed by
the fair price shop owner, which may
include suspension or cancellation of the
fair price shop owner's license. Clause
2(j) defines "Competent Authority" as
meaning
Collector
and
including
Additional District Magistrate (Civil
supplies), District Supply Officer and
Sub-Divisional
Magistrate
or
Area
Rationing Officer.

13. In terms of clause 13(3) any
person aggrieved by an order of the
Competent
Authority
suspending
or
cancelling the fair price shop agreement
may file an appeal to the Appellate
Authority
namely
the
Divisional
Commissioner,
the
Joint
Commissioner/Deputy
Commissioner
(Food) authorized by him in writing to
hear and dispose the appeal within thirty
days of the date of receipt of the order
and the Appellate Authority shall, as far
as practicable, dispose the appeal within a
period of sixty days.

14. It may also be taken note of that
the
commodities
which
are
being
distributed through the public distribution
system are essential commodities within
the meaning of Section 2(a) of the Act,
1955. The 1955 Act was enacted in the
interest of general public for control of
the production, supply and distribution of,
and trade and commerce, in certain
commodities. It was enacted by the
Parliament in exercise of concurrent
jurisdiction under Entry 33, List III,
Schedule VII of the Constitution which
reads as under:-

"33. Trade and commerce in,
and
the
production,
supply
and
distribution of,--

(a) the products of any industry
where the control of such industry by the
Union is declared by Parliament by law to
be expedient in the public interest, and
imported goods of the same kind as such
products;

(b) foodstuffs, including edible
oilseeds and oils;

(c)
cattle
fodder,
including
oilcakes and other concentrates;

(d) raw cotton, whether ginned
or unginned, and cotton seed; and

(e) raw jute."

15. The objectives of the scheme of
distribution of essential commodities in
terms of the Control Orders issued under
the Act, 1955 were succinctly laid down
in the case of Kallu Khan Vs. State of
U.P. & Anr.3 in the following terms:-

"19. It would be appropriate to
consider the basic idea of distribution of
essential commodities under the 1955 Act
and the system of appointment of agents
in furtherance of discharge of the
aforesaid function. It cannot be disputed
that even before 73rd Amendment of the
Constitution
the
Government
has
undertaken
the
responsibility
of
distribution of essential commodities to
public at large at controlled or fair price.
The purpose of the said responsibility is
obvious. The majority of the citizens in
the country live either below poverty live
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1451
or almost at par or little above thereof.
They are not able to meet their two times
meals by the meagre income they earn
and, therefore, the market forces, if are
allowed to operate freely without any
protection to such persons, probably
majority of such people would be forced
to die of starvation and they may not be
able to survive at all. This experience we
had even before independence and
immediately after independence when the
hoarders created a situation of scarcity of
food items causing virtual revolution in
different parts of the country at times.
Various social and welfare measure were
taken by the then Government and one of
the major decision taken with the
intervention of Parliament is enactment of
1955 Act conferring power upon the
Government to control production, supply
and distribution of, and trade and
commerce
in
certain
commodities,
namely, essential commodities as defined
under
Section
2(1)
of
1955
Act.
Therefore, the basic idea and intention of
the legislature under the Act is to make
available essential commodities to the
public at large at fair price except of the
cases where the availability and equitable
distribution would be necessary for
defence of India or for any efficient
conduct of military operations. The Act
intends to provide welfare measure for
availability of essential commodities to
public at large at fair price and rest of the
machinery or mechanism is incidental for
achieving
the
aforesaid
goal.
The
appointment of fair price shop dealers,
therefore, as such, is not the primary
objective of 1955 Act but it is a channel
by which the objective of making
essential commodities available to public
at large at fair price is to be achieved. It is
always permissible and open to the
Government
to
make
the
essential
commodities available to public at large
at fair price through the agencies or
instrumentalities of its own namely, its
own officers or officials or by creating a
department or alike. Simultaneously,
instead of undertaking the said job on its
own it can discharge the aforesaid
obligation through private persons or
bodies by appointing them as its agents.
Bereft of the authority conferred upon
such agents by the Government for
distribution of essential commodities at
fair
price,
such
persons
had
no
fundamental or legal right of dealing with
such essential commodities on behalf of
the Government to distribute to public at
large the essential commodities at fair
prices, though on their own, in their
private capacity, it is always open to them
to make the commodities which are
essential commodities under the Act
available to public at large at fair price
without having any corresponding burden
upon the Government if there is no
otherwise prohibition under any other law
and the statutory provisions otherwise
controlling the production, storage etc. of
such essential commodities are observed
by them..."

16. It may be apposite to refer to the
provisions of Part IX of the Constitution
introduced in terms of 73rd Constitutional
Amendment
whereunder
provisions
pertaining to "Panchayat" were inserted
providing
for
its
constitution,
composition,
reservation
of
seats,
duration of Panchayats, disqualification
for membership, powers, authority and
responsibilities of Panchayats, elections
to the Panchayats etc. The aforesaid 73rd
Amendment of the Constitution came into
force on 24.04.1993. For the purpose of
present case it would be appropriate to
refer Article 243-G which reads as under:-
1452 INDIAN LAW REPORTS ALLAHABAD SERIES

"243G. Powers, authority and
responsibilities of Panchayats.--Subject
to the provisions of the Constitution, the
Legislature of a State may, by law, endow
the Panchayats with such powers and
authority as may be necessary to enable
them to function as institutions of selfgovernment and such law may contain
provisions for the devolution of powers
and responsibilities upon Panchayats at
the appropriate level, subject to such
conditions as may be specified therein,
with respect to--

(a) the preparation of plans for
economic development and social justice;

(b)
the
implementation
of
schemes for economic development and
social justice as may be entrusted to them
including those in relation to the matters
listed in the Eleventh Schedule."

17. The Eleventh Schedule as referred to
in Article 243G contains a list of the matters
which may be entrusted to the Panchayats and
item 28 thereof reads as under:-

"28. Public distribution system."

18. It would be important to notice
at this stage that even prior to 73rd
Amendment, Village Panchayat system
was
already
recognised
and
well
established in the State of Uttar Pradesh
and was governed by U.P. Panchayat Raj
Act,
1947.
Consistent
with
the
amendment made in the Constitution, the
Act of 1947 was also amended and
Section 15 which provides for functions
of Gram Panchayat was also substituted
by U.P. Act No.9 of 1994. It would be
appropriate to reproduce the relevant part
of Section 15 as under:-

"15(xxix) Public distribution
system:

(a)
Promotion
of
public
awareness with regard to the distribution
of essential commodities.

(b)
Monitoring
the
public
distribution system."

19. The objectives of the public
distribution system and its importance in
the scheme of distribution of essential
commodities to the public at large was
emphasized in Gopi Vs. State of U.P. &
Ors.4 in the following terms:-

"25. Realising the importance of
the
Public
Distribution
System,
Parliament while bringing about the 73rd
constitutional amendment included the
Public Distribution System as one of the
primary functions of the Gram Panchayat
and it has been incorporated in Article
243-G of Part 9 of the Constitution. The
Public Distribution System is obviously a
avowed function of the State in order to
ensure
the
distribution
of
essential
commodities fairly. The object is clearly
to provide benefit to the public at large in
order to ensure supply of essential
commodities which is necessary for the
sustenance of daily life. The aforesaid
object, therefore, has to be fulfilled
keeping in view the intention of the
legislature which is to promote public
awareness and ensure distribution of
essential commodities. In essence, the
object is to provide benefit to the public at
large. As a necessary corollary to the
same, the object is not to set up any trade
for the benefit of any individual. It may
be that by virtue of this licensing system,
an individual also gets the opportunity to
benefit himself by setting up a fair price
distribution unit. However, such a licence
does not fall within the category of a
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1453
fundamental right to carry on trade and
business as understood under Article
19(1)(g) of the Constitution of India. The
Government Order which has been issued
under the provisions of the Essential
Commodities Act, is to regulate the
supply and distribution of essential
commodities fairly. The suspension of
such a licence, pending inquiry is a step
in the process of eliminating any such
discrepancy which affects the public at
large. The authorities while proceeding to
suspend a licence, have the authority to
attach a fair price shop to another Agency,
in order to ensure that the public at large
does not suffer on account of such
suspension. Thus, viewed from any
dimension, the power of suspension if
exercised bonafidely in public interest
does not by itself cause prejudice to a
licensee inasmuch as he has a remedy by
filing an appeal against such an order and
even otherwise upon the satisfaction of
the authority after hearing the objections,
the authority can still restore the licence
subject to a satisfactory reply being
submitted by the licensee.

20. The aforementioned judgments
in the case of Kallu Khan Vs. State of
U.P. & Anr. and Gopi Vs. State of U.P.
& Ors. were subsequently approved by a
Full Bench of this Court in Puran Singh
Vs. State of U.P. & Ors.5.

21. The records of the present case
reflect that the proceedings against the
petitioner were initiated with the issuance
of a show cause notice dated 25.11.2014
in terms of which the petitioner was given
a list of charges, in response to which the
petitioner furnished his explanation on
01.12.2014 and upon a detailed and pointwise consideration of the reply submitted
by the petitioner the respondent no.2
came to the conclusion that serious
irregularities had been committed by the
petitioner in running the fair price shop
allotted to him which amounted to
violation of the guidelines issued by the
Government and from a consideration of
the material on record the charges against
the
petitioner
stood
proved
and
accordingly the fair price shop agreement
was
cancelled
vide
order
dated
15.12.2014.

22. The appeal filed there against
was taken up before the respondent no.3
and the grounds raised by the petitioner
were
considered
and
thereafter
the
records of the case from the respondent
no.2 were also called for and upon due
consideration of the material on record
and after grant of opportunity of hearing
to the petitioner including the explanation
furnished
before
the
respondent
no.2/licensing authority and the order
cancelling the fair price shop agreement
the appellate authority has recorded its
conclusion that the licensing authority
had discussed the material evidence in
respect of each of the charge and in view
of the same there was no error in the
order passed by the licensing authority
nor any material facts were brought up in
the appeal so as to indicate that the
charges against the petitioner were not
proved and in view of the entirety of the
circumstances the appellate authority held
that there was no occasion to interfere in
the order passed by the licensing authority
and
accordingly
the
appeal
was
dismissed.

23. The question with regard to the
requirement of assigning elaborate and
detailed reasons by administrative/quasi
judicial authorities exercising appellate or
revisional
powers
came
up
for
1454 INDIAN LAW REPORTS ALLAHABAD SERIES
consideration in the case of Madhya
Pradesh Industries Ltd. Vs. Union of
India & Ors.6, and it was held that the
appellate or revisional authorities are
required to give reasons succinctly but in
a case of affirmance where the original
tribunal has given adequate reasons the
appellate tribunal may dismiss the appeal
or the revision simply by agreeing with
those reasons. It was stated that what is
essential is that reasons shall be given by
the
revisional
or
appellate
tribunal
expressly or by reference to those given
by the original tribunal and the nature and
the elaboration of the reasons would
depend upon the facts of each case. The
relevant
observations
made
in
the
judgment are as follows:-

"9. ...That apart, when we insist
upon reasons, we do not prescribe any
particular form or scale of the reasons.
The extent and the nature of the reasons
depend upon each case. Ordinarily, the
appellate or revisional tribunal shall give
its own reasons succinctly; but in a case
of affirmance where the original tribunal
gives adequate reasons, the appellate
tribunal may dismiss the appeal or the
revision, as the case may be, agreeing
with those reasons. What is essential is
that reasons shall be given by an appellate
or revisional tribunal expressly or by
reference to those given by the original
tribunal. The nature and the elaboration of
the reasons necessarily depend upon the
facts of each case..."

24. The nature and extent of the
duty to assign reasons by a quasi judicial
authority and the requirement to pass a
speaking order in issuing an order of
affirmance was considered in the case of
Tara Chand Khatri Vs. Municipal
Corporation of Delhi & Ors.7, and it
was stated that while it may be necessary
for a disciplinary or administrative
authority
exercising
quasi
judicial
functions to state the reasons in support of
its order if it differs from the conclusions
arrived at by the authority passing an
original order; however it would be laying
down the proposition a little too broadly
to say that even an order of concurrence
was required to be supported by elaborate
reasons. The observations made in the
judgment are being extracted below:-

"20. ...we would like to make it
clear that while it may be necessary for a
disciplinary or administrative authority
exercising quasi-judicial functions to state
the reasons in support of its order if it
differs from the conclusions arrived at
and the recommendations made by the
enquiring officer in view of the scheme of
a particular enactment or the rules made
thereunder, it would be laying down the
proposition a little too broadly to say that
even an order of concurrence must be
supported by reasons. It cannot also, in
our opinion, be laid down as a general
rule that an order is a non-speaking order
simply because it is brief and not
elaborate. Every case, we think, has to be
judged in the light of its own facts and
circumstances.."

25. The application of principles of
natural justice and recording of reasons
by an authority exercising quasi judicial
functions again came up for consideration
in the case of S.N. Mukherjee Vs. Union
of India8, and it was held that an
authority
exercising
quasi
judicial
functions must record reasons for its
decisions which should be clear and
explicit though not necessarily elaborate;
however it was reiterated that this
requirement is greater at the original stage
3 All. Lakhan Singh Vs. State of U.P. And Ors.
1455
and at the appellate or revisional stage
while affirming the original decision the
authority need not give separate reasons if
it agrees with the reasons in the original
order. The observations in this regard
made in the judgment are being extracted
below:-

"36. Reasons, when recorded by
an administrative authority in an order
passed by it while exercising quasijudicial
functions,
would
no
doubt
facilitate the exercise of its jurisdiction by
the appellate or supervisory authority. But
the other considerations, referred to
above, which have also weighed with this
Court in holding that an administrative
authority must record reasons for its
decision, are of no less significance.
These considerations show that the
recording of reasons by an administrative
authority serves a salutary purpose,
namely,
it
excludes
chances
of
arbitrariness and ensures a degree of
fairness in the process of decisionmaking. The said purpose would apply
equally to all decisions and its application
cannot be confined to decisions which are
subject to appeal, revision or judicial
review. In our opinion, therefore, the
requirement that reasons be recorded
should govern the decisions of an
administrative authority exercising quasijudicial functions irrespective of the fact
whether the decision is subject to appeal,
revision or judicial review. It may,
however, be added that it is not required
that the reasons should be as elaborate as
in the decision of a court of law. The
extent and nature of the reasons would
depend
on
particular
facts
and
circumstances. What is necessary is that
the reasons are clear and explicit so as to
indicate that the authority has given due
consideration to the points in controversy.
The need for recording of reasons is
greater in a case where the order is passed
at the original stage. The appellate or
revisional authority, if it affirms such an
order, need not give separate reasons if
the appellate or revisional authority
agrees with the reasons contained in the
order under challenge."

26. It is thus seen that the Control
Order, 2016 was notified by the State
Government
for
the
purposes
of
maintaining the supplies of foodgrains
and other essential commodities and for
securing their equitable distribution and
availability at fair prices under the
targeted public distribution system. The
provisions under the Control Order for
identification of eligible households,
issuance of ration cards, lifting of
foodgrains by the authorized agents from
the designated depots, are aimed at
creating a mechanism for distribution of
the
foodgrains
allocated
under
the
targeted public distribution system.

27. It may also be taken note of that the
Control Order, 2016 was notified in exercise
of powers under Section 3 of the Essential
Commodities Act, 1955, an enactment made
in the interest of the general public for control
of production, supply and distribution of, and
trade and commerce, in certain commodities.
The basic aim of the enactment is to make
available essential commodities to the public
at large at fair price as a measure of public
welfare. The machinery and the mechanism
provided for the purpose by way of
appointment of fair price shop dealers is only
incidental for achieving the aforementioned
goal of making the essential commodities
available to public at large at fair price.

28. The importance of the public
distribution system has been emphasized
1456 INDIAN LAW REPORTS ALLAHABAD SERIES
with the introduction of Part IX of the
Constitution in terms of 73rd Amendment
and the matters listed under the Eleventh
Schedule in relation to which the
Panchayats may be entrusted the powers
and responsibilities for implementation of
schemes for economic development and
social justice includes 'public distribution
system' as one of the items. It may be
essential to reiterate that the avowed
object of the public distribution system is
to ensure the distribution of essential
commodities in a fair and equitable
manner to the public at large. The
creation of the licensing system and the
mechanism for distribution of foodgrains
through dealers and agents is only
ancillary to the same.