# Mohd. Mustkeem v. State of U.P. & Ors

- **Citation:** (2025) 5 ILRA 610
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-05-30
- **Case number:** Writ C No. 1000337 of 2015
- **Bench:** Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/mohd-mustkeem-v-state-of-u-p-ors-53422
- **Pages:** 17

## Headnote

(A) Administrative Law - Fair Price Shop
License - Cancellation of license and
principles of natural justice - Essential
Commodities Act, 1955 - Uttar Pradesh
Schedule
Essential
Commodities
Distribution Order, 2004 - Section 28(3) -
Control Order, 2016 - Government Order
dated 29.07.2004 - Doctrine of audi
alteram partem - A fair price shop license
is not a fundamental right under Article
19(1)(g) - Relationship between the State
and a licensee is that of a principal and an
agent - Inquiry for cancellation is
summary
in
nature
and
requires
adherence to the broad principles of
natural justice, not a detailed, full-fledged
inquiry akin to a departmental inquiry -
State as principal may terminate agency
contract
subject
to
non-arbitrariness.
(Para - 22, 28, 31, 44 to 47, 52, 53, 58)

A fair price shop licensee's license was initially
cancelled by the Sub Divisional Magistrate -
which was later set aside on appeal for being ex
parte - After a remand, the license was again
cancelled - subsequent appeal was dismissed -
leading to the instant writ petition. (Para - 2 to
14)

HELD: - Adequate opportunity was granted to
the petitioner, and there was no violation of the
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
611
principles of natural justice. Inquiry was
summary in nature and did not require a fullfledged departmental-style hearing. Petitioner
was merely a licensee and did not have a
fundamental right. Court found no reason to
interfere with the orders of the Sub Divisional
Magistrate and the appellate authority. State
being the principal has the right to terminate
the contract. (Para - 49,52,53,58,59)

Petition dismissed. (E-7)

List of Cases cited:

## Text

_Characters 0–39,686 of 58,451. This is a partial read: ask again with offset=39686 for what follows._

610 INDIAN LAW REPORTS ALLAHABAD SERIES
in recording no finding in regard to service
of
notice
upon
the
petitioners.
In
paragraph-4 of the writ petition, it is
specifically stated that no notice was
received by the petitioners in order to
contest their claim, but the respondent No.2
without considering the material as well as
the provision of law, ordered that the land
purchased by the petitioners is barred by
fragmentation as provided under Sections
167/168 of the U.P. Zamindari Abolition
and Land Reforms Act, 1950 and has
ordered that the said land be vested in
favour of the State.

9. As no counter affidavit has been
filed controverting the statement made in
paragraph-4 of the writ petition, meaning
thereby, it is admission of the respondents
that prior to passing of the order, no notice
was issued to the petitioners nor it was
served upon them.

10. In view of the above, in the
opinion of the Court there is no finding
recorded in the order that how the notice
was served upon the petitioners, the orders
being illegal and ex-parte in nature, are
liable to be set aside by this Court.

11. Accordingly, the order dated
31.3.1997, passed by the respondent No.2
and order dated 4.1.2001, passed by the
respondent No.1 are quashed. The writ
petition succeeds and is allowed.

12. The respondent No.2 is directed
to pass a fresh order, recording reasons of
service of notice upon the petitioners
within a period of six months from the date
of production of a certified copy of this
order.
----------
(2025) 5 ILRA 610
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 30.05.2025

BEFORE

THE HON'BLE JASPREET SINGH, J.

Writ C No. 1000337 of 2015

Mohd. Mustkeem ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Satish Kumar Sharma, Manjusa, Mohan
Singh, Rupesh Kumar Gupta

Counsel for the Respondents:
C.S.C., Nishant Shukla

(A) Administrative Law - Fair Price Shop
License - Cancellation of license and
principles of natural justice - Essential
Commodities Act, 1955 - Uttar Pradesh
Schedule
Essential
Commodities
Distribution Order, 2004 - Section 28(3) -
Control Order, 2016 - Government Order
dated 29.07.2004 - Doctrine of audi
alteram partem - A fair price shop license
is not a fundamental right under Article
19(1)(g) - Relationship between the State
and a licensee is that of a principal and an
agent - Inquiry for cancellation is
summary
in
nature
and
requires
adherence to the broad principles of
natural justice, not a detailed, full-fledged
inquiry akin to a departmental inquiry -
State as principal may terminate agency
contract
subject
to
non-arbitrariness.
(Para - 22, 28, 31, 44 to 47, 52, 53, 58)

A fair price shop licensee's license was initially
cancelled by the Sub Divisional Magistrate -
which was later set aside on appeal for being ex
parte - After a remand, the license was again
cancelled - subsequent appeal was dismissed -
leading to the instant writ petition. (Para - 2 to
14)

HELD: - Adequate opportunity was granted to
the petitioner, and there was no violation of the
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
611
principles of natural justice. Inquiry was
summary in nature and did not require a fullfledged departmental-style hearing. Petitioner
was merely a licensee and did not have a
fundamental right. Court found no reason to
interfere with the orders of the Sub Divisional
Magistrate and the appellate authority. State
being the principal has the right to terminate
the contract. (Para - 49,52,53,58,59)

Petition dismissed. (E-7)

List of Cases cited:

1. Noor Jahan Vs St. of U.P. & ors., Writ Petition
No.31272 (M/S) of 2017

2. Prem Narain Vs St. of U.P. & ors., Writ-C
No.61612 of 2013

3. Shatrohan Lal Vs St. of U.P. & ors., Writ-C
No.18768 of 2020

4. Rajneesh Kumar Tyagi Vs St. of U.P. & ors.,
C.M.W.P. No.30912 of 2009

5. Jagannath Upadhyaya Vs St. of U.P. & ors.,
Writ-C No.18135 of 2021

6. Ram Kumar Vs St. of U.P. & ors., (2023) 16,
SCC 691

7. Smt. Meena Devi Vs St. of U.P. & ors., Writ-C
No.58035 of 2017

8. Shankar Prasad Vs St. of U.P. & ors., 2021
SCC OnLine All 1852

9. Puran Singh Vs St. of U.P., 2010 2 UPLBEC 947

10. A. S. Motors Pvt. Ltd. Vs U.O.I., (2013) 10
SCC 114

(Delivered by Hon'ble Jaspreet Singh, J.)

1. The present dispute emanated in the
year 2007 and it has a checkered
background.

2. The petitioner was accorded a
license on 19.11.2005 for distribution of
essential commodities through a fair price
shop in village Panchayat Dilawarpur,
Tahsil Mohammadi, District Kheri.

3.
On
15.10.2007,
the
Sub
Divisional Magistrate Mohammadi Kheri
noticing certain discrepancies regarding the
distribution
of
essential
commodities
suspended the license of the petitioner and
required him to show cause within a week
as to why further proceedings may not be
taken against the petitioner.

4. As per the suspension order cum
show cause notice, it was alleged that the
petitioner had lifted the requisite quota of
the food and essential commodities for the
month of October 2007 on 26.09.2007.
However, it was alleged that the appointed
supervising
officer
on
07.10.2007
submitted his report and informed that he
had visited the fair price shop of the
petitioner where he was not available nor
there was the necessary stocks of the grains
and essential commodities for distribution.

5. Acting upon the said report, the
matter
was
enquired
through
the
distribution inspector Mohammadi who
submitted his report dated 11.10.2007 and
confirmed that the petitioner did not have
the necessary stocks for distribution of the
grains and the essential commodities for
the month of October 2007. It also reported
that the petitioner was required to produce
the necessary documents which could not
be
presented.
Statements
of
certain
beneficiaries
which
included
persons
having B.P.L. Cards (below poverty line)
and 13 Antyodoya Card holders whose
cards did not indicate any endorsement
regarding distribution of the grain and
essential commodities or its receiving.
Certain cards holders gave their statements
that they had received the essential
612 INDIAN LAW REPORTS ALLAHABAD SERIES
commodities but even their ration cards did
not have the necessary endorsement and
there were certain other card holders who
stated that they have not received the grains
and the essential commodities.

6. The Sub Divisional Magistrate,
Kheri taking note of the fact that in
pursuance
of
the
show
cause
cum
suspension notice dated 15.10.2007 the
petitioner did not respond nor submitted
any evidence or explanation hence by
means of order dated 17.11.2007 it
cancelled the license of the petitioner.

7. An important event occurred
when the Sub Divisional Magistrate,
Mohammadi Kheri on 22.01.2008 made a
fresh allotment in favour of Smt. Anwari
(who after intervention of the Apex Court
was impleaded as private respondent no.4
in the instant petition.)

8. In the meantime, the petitioner
being aggrieved against the order dated
17.11.2007 had preferred an appeal before
the Commissioner, Lucknow Division in
terms of Section 28(3) of the Uttar Pradesh
Schedule
Essential
Commodities
Distribution Order 2004. This appeal came
to be allowed on 16.12.2013 holding that
the order dated 17.11.2007 was ex parte
and had been passed without affording
reasonable opportunity to the petitioner. It
further directed that the petitioner would
submit his reply within one month and
thereafter the Sub Divisional Magistrate
concerned shall decide the matter afresh.

9. In furtherance of the aforesaid
remand order, the petitioner furnished his
reply,
however,
the
Sub
Divisional
Magistrate,
Mohammadi
once
again
considering the reply did not find any
reason to doffer from the earlier decision
and for the reason as mentioned in the
order dated 17.02.2014, he cancelled the
license of the petitioner including the
agreement entered between the petitioner
and the State and also forfeited the security.

10. Once again the petitioner being
aggrieved
against
the
order
dated
17.02.2014 preferred an appeal. While this
appeal was admitted by the Additional
Commissioner (Administration), Lucknow
Division, but it did not entertain the request
of the petitioner for grant of an interim
relief.
At
this
stage,
the
petitioner
approached this Court by means of Writ
Petition
No.4248
(M/S)
of
2014
(
Mustakeem Vs. State of U.P. & others)
wherein a Co-ordinate Bench of this Court
by means of order dated 31.07.2014
granted limited protection to the petitioner
that till his disposal of his appeal or for a
period of six months whichever is earlier
the operation of the order of the Sub
Divisional Magistrate dated 17.02.2014
shall be kept in abeyance and supply of his
essential commodities shall not be stopped.

11. Once the said order was passed
by the High Court, the Sub Divisional
Magistrate, Mohammadi taking note of the
aforesaid permitted the petitioner to lift the
quota vide order dated 19.08.2014. It also
noticed that in light of the order passed by
the High Court it was necessary to give due
deference and the same was to be complied
with, and since two licensee could not
subsist, the other licensee namely Smt.
Anwari cannot be permitted to lift the
quota, hence her supplies were stopped.

12. At this stage, Smt. Anwari who
had been granted a fresh allotment on
01.02.2008
and
who
had
not
been
impleaded as a party in Writ Petition
No.4248 (M/S) of 2014, she preferred
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
613
review petition bearing N0.631 of 2014 (in
re: 4248 (M/S) of 2014). The Court
concerned taking note of the submissions
of Smt. Anwari entertained the review
petition and noticed that the order dated
31.07.2014
was
passed
under
some
confusion and permitted the petitioner
herein (Mohd. Mustakeem) to file his
counter-affidavit to the review petition
within two weeks. As an interim order, it
was ordered by the Court that till the
disposal of the review petition, the order
dated 31.07.2014 will be kept in abeyance,
and in case of compliance of the order
dated 31.07.2014 the Sub Divisional
Magistrate if passed any order restoring the
supply
of
essential
commodities
to
Mustakeem then that order too shall also be
kept in abeyance.

13. As a consequence of the said
order, the Sub Divisional Magistrate,
Mohammadi Kheri passed a fresh order on
05.09.2014 staying its earlier order dated
19.08.2014 and stopped the supply to
Mustakeem and restored the supplies in
favour of Smt. Anwari.

14. In the aforesaid backdrop, once
again the appeal preferred by the petitioner
against the order of cancellation dated
17.02.2014 was considered on merits and
vide order dated 31.01.2015 it was
dismissed. The petitioner being aggrieved
by the order dated 17.11.2007 and the order
dated 31.01.2015 filed the instant writ
petition.

15. At this stage, it will be relevant
to mention that in the instant petition also
the petitioner did not implead Smt. Anwari
as a party. However, the counsel for Smt.
Anwari was also heard who had sought the
intervention but it did not find favour with
the Court and ultimately vide judgment and
order dated 21.01.2021 the writ petition
was allowed and the order of cancellation
of license was set aside and by the same
order the license was restored and it was
observed that any third party rights created
shall not come in the way of the restoration
of the allotment and supply of essential
commodities to the petitioner i.e. Mohd.
Mustakeem. In furtherance of the order
passed by the High Court dated 21.01.2021
the Sub Divisional Magistrate vide its order
dated 11.02.2021 restored the license of the
petitioner and also cancelled the license of
Smt. Anwari.

16. Now in the aforesaid situation,
it was time for Smt. Anwari, whose license
had been cancelled, to escalate the matter
and she approached the Hon'ble Apex
Court against the judgment of the High
Court dated 21.01.2021. The Apex Court
by means of order dated 05.04.2021 as an
interim measure stayed the operation of the
order passed by the High Court. The Sub
Divisional Magistrate, Mohammadi Kheri
once again taking note of the order passed
by the Apex Court again restored the
license and supplies to Smt. Anwari and
stopped the same in respect of the present
petitioner.

17. Considering the appeal of Smt.
Anwari The Apex Court allowed the same
vide judgment and order dated 26.11.2024
and after setting aside the order passed by
the High Court dated 21.01.2021 remanded
the matter to the High Court with a specific
direction that the writ petition would stand
revived. Smt. Anwari would be impleaded
as respondent no.4 in the writ petition and
she will have the liberty of filing her
counter-affidavit within four weeks and the
High Court was requested to provide
adequate opportunity of hearing to the
parties to place their respective versions
614 INDIAN LAW REPORTS ALLAHABAD SERIES
and whereafter the writ petition would be
considered and be decided in accordance
with law preferably within a period of four
months. It also observed that the license
issued in favour of Smt. Anwari to run fair
price shop shall continue but would be
subject to the result of the writ petition. The
Apex
Court
also
observed
that
all
contentions on merit are kept open to be
agitated by the parties before the High
Court.

18. It is in the aforesaid backdrop
that this matter was placed before this
Court and vide its order dated 03.04.2025,
11.04.2025 and 07.05.2025 had been
goaded the counsel for the parties to
comply with the procedural requirement of
impleading the respondent no.4 herein
(Smt. Anwari), serving her and also granted
time to furnish her version, so that this
matter could be heard finally.

19. The Court has heard Shri Satish
Kumar Shama, learned counsel for the
petitioner, Shri Rahul Shukla, learned
Additional Chief Standing Counsel for the
State and Shri Shreyash Agarwal, learned
counsel
appearing
for
the
private
respondent no.4 who also filed his counteraffidavit placing his version on record
which has also been considered by this
Court.

20. Shri Sharma has structured his
submissions on three pillars:-

(i) The petitioner was not given
adequate opportunity to contest and to
establish that the cancellation of the license
was bad in law. The petitioner had filed a
detailed reply but the same was not taken
note of appropriately rather it was incorrectly
observed that the documents furnished by the
petitioner were not appropriate. The entire
burden was placed on the petitioner whereas
in order to rebut the case alleged against the
petitioner his defence ought to have been
considered which has not been done which
has resulted sheer miscarriage of justice.
 (ii)
The
petitioner
had
been
handicapped in contesting the allegation
levelled against him as the entire case set up
by the State was based on an inspection
report which was never furnished to the
petitioner and in the absence thereof the
petitioner could not give an adequate reply as
he had no idea of what case he had to meet
which has also resulted in miscarriage of
justice and per se is in violation of principles
of natural justice.

(iii) It is also urged that there has
been a diversion in the allegations and the
case initially set up by the State; inasmuch as
new grounds were taken for which the
petitioner ought to have been given an
opportunity to respond and without providing
such an opportunity the action of the
authorities in relying upon the said new
grounds also violated the principle of natural
justice. The petitioner was not given an
adequate opportunity to contest and cross
examine such card holders whose statements
were allegedly recorded by the authorities
and moreover the petitioner had submitted
affidavits of the very same persons who
allegedly had given a statement to the
authorities. In the affidavit given by the said
persons it was stated that they were all
illiterate. Their statements have been taken
without informing them of their import and
content and further that the petitioner herein
was a scrupulous licensee and they had no
complaint against him and his affidavits
were also not considered which has also
vitiated the decision making process as
adopted by the respondent authorities. Thus
for all the aforesaid reasons, the impugned
order is bad and the writ petition deserves to
be allowed.
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
615
21. In support of his submissions,
the learned counsel for the petitioner has
relied upon the decisions of this Court in
Noor Jahan Vs. State of U.P. & others,
Writ Petition No.31272 (M/S) of 2017,
decided on 11.12.2014, Prem Narain Vs.
State of U.P. & others, Writ-C No.61612
of
2013,
decided
on
11.12.2014,
Shatrohan Lal Vs. State of U.P. & others,
Writ-C No.18768 of 2020, decided on
2.4.2024, Rajneesh Kumar Tyagi Vs. State
of U.P. & others, Civil Misc. Writ Petition
No.30912 of 2009, decided on 19.01.2001
and Jagannath Upadhyaya Vs. State of
U.P. & others, Writ-C No.18135 of 2021,
decided on 14.02.2022.

22. Shri Shukla, learned Additional
Chief Standing Counsel for the State has
urged that the petitioner is merely a
licensee and he does not have any
fundamental right to do the business of
distribution of food grains and essential
commodities.
It
is
urged
that
the
relationship between the State and the
license holder is that of a principal and an
agent. The State from time to time have
issued the government orders to regulate
the distribution of food grains and essential
commodities and in order to take an action
against an erring licensee the State has to
comply with the principles of natural
justice by affording him an adequate
opportunity and once the same has been
done, it cannot be said that the view taken
by the authorities is against the principle of
natural justice or is bad in the eyes of law.

23. It was also urged that the
cancellation of license of the petitioner was
done on 17.11.2007 and about 18 years
have lapsed and for the last 18 years, it is
respondent no.4 who has been distributing
the essential commodities and food grains
and nevertheless a licensee does not have
any vested rights rather his right to
continue is subject to the confidence and
pleasure of the principal and in this case
once
the
principal
found
certain
discrepancies and it proceeded to take
action which was done in accordance with
law then in such circumstances neither the
plea of violation of principle of natural
justice can be taken and moreover it is
primarily the decision making process
which is under the scope of judicial review
by this Court and not the merit of the
decision itself. Thus, for the aforesaid
reason, the writ petition deserves to be
dismissed. In his support of his submission,
he has relied upon a decision of the Apex
Court in Ram Kumar Vs. State of Uttar
Pradesh and others (2023) 16, SCC 691.

24. Shri Shreyash Agarwal, learned
counsel for the respondent no.4 has raised
similar submissions as urged by Shri
Shukla for the State and thus for the sake of
brevity, the same is not duplicated herein.
In support of his submission, he has relied
upon a decision of this Court in Smt.
Meena Devi Vs. State of U.P. and others,
Writ-C No.58035 of 2017, decided on
30.07.2018.

25. The Court has heard the learned
counsel for the parties and also perused the
material on record.

26. In light of the submissions of
the respective parties, this Court is required
to examine whether the petitioner has been
deprived of an opportunity of hearing or
not. An ancillary issue that further requires
examination
is
whether
not
having
provided an opportunity to cross examine
or not being given an inspection report
would also amount to depriving the
petitioner of an opportunity to contest the
proceedings and whether this aspect in
616 INDIAN LAW REPORTS ALLAHABAD SERIES
itself can be considered as a handicap that
may vitiate the decision making process.

27. Where both the petitioner and
the respondent no.4 are licensee. What is
the scope of the right which is conferred
through a license for distribution of food
grains and essential commodities and
whether such right can be contested vis-avis the rights of a subsequent allottee.

28. At the outset, it may be noticed
that from the perusal of the decision cited
by Shri Shreyash Agarwal in Smt. Meena
Devi (supra), it would reveal that a Coordinate Bench of this Court after taking
note of several decisions of this Court as
well as the Apex Court noted that the
privilege of license conferred for the
distribution
of
grains
and
essential
commodities is a merely right that can be
taken away by the principal in case of
irregularities in distribution. It also notices
that by taking away such privilege or
cancelling the license for some valid reason
must be informed and some opportunity of
hearing is required to be granted to be
licensee. However, there is no fundamental
right or any constitutional right to such a
lincesee and once the aforesaid twin
conditions are adhered to, and complied
with the writ court is not required to
interfere in such orders especially where
the licensee has already availed the
statutory right of appeal.

29. It will be appropriate at this
stage to record that there was a divide
between two sets of opinion regarding the
scope of applicability of principle of
natural justice in an inquiry conducted in
cases relating to the distribution in cases
where a license for distribution of essential
commodities was cancelled. One view
favoured
a
full
fleged
inquiry
as
contemplated which includes serving of
notice, charge-sheet as well as informing
the licensee of the date of hearing. The
other view was that a licensee was not
entitled to a detailed inquiry as he was
merely a licensee and a licensee does not
have any fundamental rights to carry on
with the license.

30. This controversy between the
two set of opinions rendered by the
respective learned Single Judge of this
Court was referred to a Larger Bench vide
order dated 29.11.2019 passed in Writ
Petition No.32679 (M/S) of 2019, Shankar
Prasad Vs. State of U.P. & others, 2021
SCC OnLine All 1852.

31. The Larger Bench (which had
Justice Jaspreet Singh as a member) had the
occasion to consider the aforesaid issue and
after noticing the entire scheme of the Act
which commenced from the Essential
Commodities
Act
1955,
several
Government Orders holding the field in this
regard including Government Order issued
from
time
to
time
regulating
and
supervising the distribution of grains and
essential commodities, noticing the scope
of
applicability
and
the
extent
of
applicability of natural justice the Court in
paragraph 42 to 47 held as under:-

"42. The efforts made by the
Government from time to time is clearly to
establish an accepted procedure and
manner in which the enquiries regarding
suspension/cancellation of a fair price shop
is to proceed. In the aforesaid context, it
would be seem that the Full Bench in
Puran Singh (supra) has clearly held that
the fair price shop licenses are not akin to
the right by doing business as protected
under Article 19 (1)(g) of the Constitution
of India and noticing the provisions of the
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
617
Government Order of July 2004 where
there is an elaboration regarding issuance
of a show cause notice which must contain
the material and findings surfaced in the
preliminary enquiry to enable the licensee
to know the charge against him so that he
can reply to the same which sufficient
particularity. It also contemplates the
conclusion of the enquiry within a period of
one month and it is incumbent upon the
competent authority to give its decision by
a speaking order. It is in this context that
the Full Bench used the word full fledged
enquiry specifically relating to Clause 4
and 5 of the Government Order of July
2004.
 43. The process of grant of
opportunity of hearing and holding a fair
and just enquiry is inbuilt in the provision
of Government Order dated 29th of July,
2004. With the advent of the Government
Order of October 2014 and December
2015 as noticed above. It further clarifies
the position that the licensee must be made
aware of the violation and irregularities
which have been found, upon which it is
proposed to move against the licensee,
either for suspension or cancellation so
that he can place his reply with sufficient
particularity which must be decided by a
speaking order and order-sheet of the
proceeding is also to be maintained
scrupulously to bring in transparency and
fairness in the enquiry so held.

 44. Rules of natural justice are
not rigid or immutable rules and they are
not to be applied in a straight-jacket
formula rather these are rules which are
flexible to meet the exigencies of a
situation. The Apex Court in the case of
A.S. Motors Private Limited v. Union of
India and others, (2013) 10 SCC 114 in
Paragraphs 7 and 8 in reference to
cancellation of contract viz-a-viz violation
of principles of natural justice has held as
under:-

"7. It was argued on behalf of the
appellant that the termination of the
contract between the parties was legally
bad not only because the principles of
natural justice requiring a fair hearing to
the appellant were not complied with but
also because there was no real basis for the
respondent Authority to hold that the
appellant had committed any breach of the
terms and conditions of the contract
warranting its termination. We find no
merit in either one of the contentions. The
reasons are not far to see.

8. Rules of natural justice, it is by
now fairly well settled, are not rigid,
immutable or embodied rules that may be
capable of being put in straitjacket nor
have the same been so evolved as to apply
universally to all kind of domestic tribunals
and enquiries. What the courts in essence
look for in every case where violation of
the principles of natural justice is alleged is
whether the affected party was given
reasonable opportunity to present its case
and whether the administrative authority
had
acted
fairly,
impartially
and
reasonably. The doctrine of audi alteram
partem is thus aimed at striking at
arbitrariness and want of fair play. Judicial
pronouncements on the subject have,
therefore, recognised that the demands of
natural justice may be different in different
situations depending upon not only the
facts and circumstances of each case but
also on the powers and composition of the
tribunal and the rules and regulations
under which it functions. A court examining
a complaint based on violation of rules of
natural justice is entitled to see whether the
aggrieved party had indeed suffered any
prejudice on account of such violation. To
that extent there has been a shift from the
earlier thought that even a technical
618 INDIAN LAW REPORTS ALLAHABAD SERIES
infringement of the rules is sufficient to
vitiate the action. Judicial pronouncements
on the subject are legion. We may refer to
only some of the decisions on the subject
which should in our opinion suffice."

45. At this stage, it will be
relevant
to
notice
that
after
the
promulgation of the Control Order 2016,
the matter is governed by the said control
order which also notices the agreement
which is signed between the parties i.e. the
licensee and the State Government which
partakes the nature of a statutory contract
and is nothing but a contract of agency
where the licensee conduct activities on
behalf of the State, distributing food grains
and in return is entitled to a commission
and it is clearly a contract of agency, as
known in law.

46. The requirement of entering
into an agreement between licensee and the
State is also provided in the Distribution
Order of 2004. Thus, the position of a
licensee remains that of an agent of the
State who is appointed to carry out the
functions as entrusted to him in terms of the
Distribution Order of 2004 and now under
the Control Order of 2016 and is governed
by the said Control Order and the terms of
the agreement. Accordingly, it cannot be
said that the enquiry as required to be held
against the licensee for suspension or
cancellation is akin to a disciplinary
enquiry which is against a government
servant. Neither the agreement nor the
Distribution Order of 2004 or the Control
Order of 2016 envisage an elaborate
enquiry nor the same can be claimed by the
licensee.

47.
Thus,
we
answer
the
reference as under:-

(i) It is held that the parameters
for an enquiry to be conducted against the
licensee for the irregularities committed by
the licensee in terms of the Distribution of
Essential
Commodities
is
on
broad
principles of natural justice where the
competent authority shall provide a show
cause notice to the licensee indicating the
violations and irregularities committed by
the licensee with sufficient particularity to
enable him to respond to the same and
after affording an opportunity of hearing,
the decision can be taken by the competent
authority by a reasoned and a speaking
order. The enquiry envisaged is summary
in nature and does not entail a detailed
hearing, akin to a departmental enquiry;

(ii) It is held that the words "full
fledged enquiry" as used by the Full Bench
of this Court in the decision of Puran Singh
(supra) has to be read in context with paras
4 and 5 of the Government Order of July
2004 and the scheme therein which merely
requires adherence to the principles of
natural justice and does not provide for a
detailed enquiry involving various stages
and steps as are required to be met in
disciplinary enquiry against a government
servant. "

32. Having considered the aforesaid
propositions laid down by the Larger
Bench, it would reveal that action can be
initiated against the licensee for the alleged
irregularities committed by the licensee and
such enquiry is to be done on the broad
principles of natural justice where the
authority is required to issue a show cause
notice to the licensee indicating with
sufficient particularity the grounds and
complaint received against him so that he
can respond knowing well what case he has
to meet. The inquiry envisaged is of
summary nature and does not entails a
detailed enquiry.

33. It is in this context, this Court
finds that in the instant case, the order of
cancellation against the petitioner was
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
619
passed in two stages; (i) the cancellation
order came to be passed on 17.11.2007,
however, the same was set aside in appeal
by means of an order dated 16.12.2013
after holding that the petitioner was not
afforded a reasonable opportunity and it
was practically ex parte thus after the
appeal was allowed (ii) Thereafter the
petitioner submitted his detailed reply and
the same was duly considered and the
license again came to be cancelled on
17.02.2014 and the agreement entered
between the petitioner and the State was
also cancelled. The petitioner availed his
right of appeal against the order dated
17.02.2014
which
also
came
to
be
dismissed on 31.01.2015 affirming the
order dated 17.02.2014.

34. The submission of the learned
counsel for the petitioner that he was not
provided with the copy of the inspection
report
and
he
was
handicapped
in
contesting the proceedings as he was not
aware of the case he had to meet. This
submission does not impress this Court for
the reason that it has not been specifically
pleaded in the writ petition or even in the
rejoinder-affidavit
that
the
petitioner
suffered any prejudice for not being
provided with the copy of the inquiry
report. No material has been brought on
record to indicate that at any point of time
i.e. from the commencement, by issuance
show cause notice dated 15.10.2007 till
passing of the order by the appellate
authority on 31.01.2015 i.e. for about 8
years the petitioner had made any effort or
filed any application to any authority
seeking such a document.

35. It is to be noticed that this writ
petition arises out of the second round of
litigation. In the first round as already
noticed in the preceding paragraph that the
order of cancellation was set aside as it was
found to be ex parte and that the
opportunity of hearing was not granted to
the petitioner. Once the petitioner had
furnished his detailed reply, which was
taken note of and the order of cancellation
was passed which was affirmed in appeal.
Now at this stage, it is not open for the
petitioner to make submissions that he was
deprived and handicapped in contesting the
proceedings for want of inspection report
especially when the petitioner could not
establish that he had made any attempt to
seek the said document nor a ground to the
aforesaid effect was taken in this writ
petition or even in appeal. Hence this
submissions is turned down.

36. The submission of the learned
counsel for the petitioner that he was not
granted an opportunity to cross examine the
persons who allegedly had given statement
to the authority against the petitioner. This
submission also pales into insignificance as
the petitioner could not demonstrate that he
had moved any application or made any
request to the Sub Divisional Magistrate
concerned or before any authority that he
wanted to cross examine any witness who
had allegedly made a statement against the
petitioner.

37. It also could not be indicated what
was the discrepancy and what was the
gravity
of
such
discrepancy,
which
necessitated the petitioner to cross examine
such a complainant. It will be relevant to
notice that when the cancellation of the
license took place in the yea r 2007 at the
relevant time the Government Order 2004
was in operation. The Government Order
dated 29.07.2004 provided for a procedure
relating to suspension and cancellation of
the license of a fair price shop and relevant
620 INDIAN LAW REPORTS ALLAHABAD SERIES
clauses 2 to 7 are important which reads as
under:-

"2. mDr i`"BHkwfe esa eq>s ;g dgus dk
funs'k gqvk gS fd xzkeh.k ,oa 'kgjh {ks=ksa dh mfpr nj
dh nqdkuksa ds fuyEcu@fujLrhdj.k ds lEcU/k eas
fuEu izfdz;k dk ikyu fd;k tk,A

(i) mfpr nj dh nqdku dk fuyEcu
ek= fdlh O;fDr dh f'kdk;r ds vk/kkj ij ugha
fd;k tk;sA ;fn fdlh nqdkunku ds fo:) fdlh
lzksr ls f'kdk;r izkIr gksrh gS rks igys mldh
izkjfEHkd tkWap djk;h tk;sA ;fn izkjfEHkd tkWap esa
nqdkunkj ds fo+:) ,slh xEHkhj vfu;ferrk,a izFke
n`"V;k fl) gks jgha gksa ftuds vk/kkj ij nqdkunkj
dh nqdku fujLr gksus dh lEHkkouk gks rHkh nqdku dks
fuyfEcr fd;k tk;s vkSj lkFk gh lkFk nqdkunkj dks
dkj.k crkvks uksfVl tkjh fd;k tk;s fd mldh
nqdku D;ksa u fujLr dj nh tk;sA ;fn izkjfEHkd tkWap
esa ik;k tk;s fd vfu;ferrk bruh xEHkhj ugha gS fd
nqdku ds fujLrhdj.k dh lEHkkouk gks rks dsoy
dkj.k crkvks uksfVl tkjh fd;k tk;sA fuyEcu
vkns'k@ dkj.k crkvks uksfVl ,d ^^Lihfdax vkMZj^^
gksuk pkfg, rFkk mlesa izkjfEHkd tkWap esa ik;h x;h
mu lHkh vfu;ferrkvksa dk fooj.k gksuk pkfg,
ftudk mRrj nqdkunku ls visf{kr gksA

(ii) 1⁄4d1⁄2 [kk| foHkkx ds vf/kdkfj;ksa@
ftyk iz'kklu ds vf/kdkfj;ksa@ vU; izkf/kd`r O;fDr;ksa
}kjk mfpr nj dh nqdku ds vkdfLed fujh{k.k ds
nkSjku ;fn ik;k tkrk gS fd nqdkunkj }kjk dksbZ
xEHkhj vfu;ferrk dh x;h gS rks Hkh nqdku dks
fu;qfDr vf/kdkjh }kjk vius foosd dk iz;ksx djrs
gq, fuyfEcr fd;k tk ldrk gSA

1⁄4[k1⁄2 [kk| foHkkx ds vf/kdkfj;ksa@ ftyk
iz'kklu ds vf/kdkfj;ksa@ vU; izkf/kd`r O;fDr;ksa }kjk
;fn nqdkunkj dksbZ vfu;fer dk;Z] forj.k esa xM+cM+h
;k vuqlwfpr oLrqvksa dh dkykcktkjh djrs gq, idM+k
tkrk gS rks Hkh fu;qfDr vf/kdkjh }kjk vius foosd dk
iz;ksx djrs gq, nqdku dks fuyfEcr fd;k tk ldrk
gSA

mDr ifjfLFkfr;ksa esa nqdku ds fuyEcu dh
fLFkfr esa Hkh ^^Lihfdax vkMZj^^ ls fuyEcu vkns'k tkjh
fd;k tk;sxk ftlesa lHkh vfu;ferrkvksa dk mYys[k
gksxk rFkk nqdkunkj dks dkj.k crkvks uksfVl tkjh
fd;k tk;sXk fd D;ksa u mldh nqdku fujLr dj nh
tk;sA

3- mDr izdkj ls ;fn mfpr nj dh dksbZ
nqdku fuyfEcr dh tkrh gS rks mldk lEc)hdj.k
xkao@ 'kgj dh 1⁄4tSlh Hkh fLFkfr gks1⁄2 lcls fudV dh
mfpr nj dh nqdku ls fd;k tk;sxkA fdlh Hkh ,d
nqdku ls vf/kdre ,d gh fuyfEcr nqdku dk
lEc)hdj.k fd;k tk ldrk gS vkSj fdlh Hkh
ifjfLFkfr esa ,d nqdku ls ,d ls vf/kd fuyfEcr
nqdku dk lEc)hdj.k ugha fd;k tk;sxkA

4- fuyfEcr dh x;h nqdku ds fo:)
tkWap dh dk;Zokgh vf/kdre ,d ekg esa vfuok;Z :i
ls iwjh dh tk;sxh rFkk TkkWap esa lEcfU/kr nqdkunkj
dks lquokbZ dk iwjk ekSdk fn;k tk;sxkA lEcfU/kr
nqdkunkj dk ;g nkf;Ro gksxk fd og tkWap esa viuk
iwjk lg;ksx ns rkfd tkWap dk dk;Z tYnh ls tYnh
iwjk fd;k tk lds rFkk fu;qfDr izkf/kdkjh }kjk izdj.k
esa xq.k&nks"k ds vk/kkj ij vfUre fu.kZ; fy;k tk
ldsA ;fn nqdkunkj }kjk tkWap esa lg;ksx ugh fn;k
tk jgk gks vkSj tkWap esa foyEc djus dk iz;kl fd;k
tk jgk gks rks nqdkunkj dks bl vk'k; dk Hkh uksfVl
tkjh fd;k tk;sxk vkSj viuk i{k j[kus dk vfUre
volj iznku fd;k tk;sxkA

5- tkWap dh dk;Zokgh vf/kdre ,d ekg
esa iw.kZ djds fu;qfDr izkf/kdkjh }kjk izdj.k esa vfUre
fu.kZ; fy;k tk;sxk vkSj xq.k&nks"k ds vk/kkj ij ,d
^^Lihfdax vkMZj^^ tkjh fd;k tk;sxkA bl vkns'k esa
;g Li"V mYys[k gksuk pkfg, fd lEcfU/kr nqdkunkj
dks lquokbZ dk volj fn;k x;k vkSj mls lquk x;kA
;fn nqdkunkj us tkWap esa lg;ksx ugha fd;k gks vkSj
lquokbZ ds volj dk tkucw>dj mi;ksx u fd;k gks
rks vfUre vkns'k esa bl ckr dk Hkh iwjk mYys[k gksuk
pkfg, fd nqdkunkj dks volj iznku fd;k x;k rFkk
vfUre uksfVl fn;k x;k ijUrq mlus tkucw>dj
volj dk mi;ksx fd;k vkSj tkWap esa lg;ksx ugha
fd;kA

6- tkWap dh dk;Zokgh ds mijkUr nqdkunkj
ds nks"k dh xEHkhjrk ns[krs gq, mls n.M fn;k tk;sA
;fn n.M Lo:i nqdkunkj dh fuyfEcr nqdku fujLr
dh tkrh gS tks fujLrhdj.k vkns'k dh frfFk ls
vf/kdre ,d ekg ds vUrxZr u;s mfpr nj ds
nqdkunkj dh fu;qfDr vfuok;Z :i ls gks tkuh pkfg,
rkfd nqdku dh lEc)rk tYnh ls tYnh lekIr gks
ldsA

7- fu;qfDr izkf/kdkjh mijksDr vkns'kksa dk
dM+kbZ ls ikyu djsaxs vkSj dk;Zokgh ds fy, Åij nh
x;h le; lkfj.kh dks lqfuf'pr djsaxsA le; lkfj.kh
ds vuqlkj tkWap dh dk;Zokgh ,d ekg esa rFkk nqdku
ds fujLrhdj.k dh fLFkfr esa ,d vkSj ekg u;h
fu;qfDr ds fy, fu/kkZfjr gSA vr% fuyfEcr@ fujLr
nqdku dk fdlh vU; nqdku ls lEc)hdj.k vf/kdre
nks ekg ds fy, gksxkA"

38. This was also noticed by the
Larger Bench in Shanker Prasad (supra)
5 All. Mohd. Mustkeem Vs. State of U.P. & Ors.
621
and in paragraph 31 to 35, it was noticed as
under:-

"31From the perusal of the
Government Order of July 2004, it
indicates that the suspension of a fair price
shop license will not be done merely on a
complaint by a person rather it provides
that in case if any complaint is received
from any source then first a preliminary
enquiry be held. In case if during the
preliminary
enquiry
certain
serious
violations and irregularities came to the
fore which prima facie may give rise to
such grounds which may possibly lead to
cancellation of the license, if established,
then the license can be suspended and
simultaneously the fair price shop owner
shall be issued with a show cause notice as
to why his license may not be cancelled. In
case, in the preliminary enquiry the
violations are not found to be serious then
merely a show cause notice can be issued.
However, the suspension order/a show
cause notice must be passed with a
speaking order and must also mention and
refer to all such irregularities and
violations which have been noticed in the
preliminary enquiry to enable the fair price
shop owner to respond with particularity.

32. Clause 4 of the Government
Order of July 2004 also provides that the
enquiry in respect of suspended fair price
shop must be completed within a period of
one month after affording full opportunity
of hearing to the licensee concerned.