# Najakat Ali v. State of U.P. & Ors. 472 INDIAN LAW REPORTS ALLAHABAD SERIES

- **Citation:** (2021) 10 ILRA 471
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-10-22
- **Case number:** Writ C No. 15420 of 2020
- **Bench:** Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/najakat-ali-v-state-of-u-p-ors-472-indian-law-reports-allahabad-series-46354
- **Pages:** 37

## Headnote

A. Civil Law - National Food Security Act,
2013 - Control Order, 2016 - Fair Price
Shop Licence
- Cancellation
- Audi
alteram partem - No regular enquiry
conducted, though opportunity to file
reply was given - It's effect - Applicability
of GO dated 29.07.2004 and 16.10.2014 -
Held, the principle of audi alteram partem
is complied once the notice is issued and
an
opportunity
is
provided
to
a
dealer/agent to submit his reply and the
same being considered by the authorities
- Held, the opportunity, as provided under
the Control Order, 2016, is given before
the license is cancelled - High Court
rejected the claim that a full fledged
inquiry
be
conducted
providing
opportunity
of
cross-examination
of
witness, copy of documents, complaint
and
consideration
of
subsequent
affidavits, if filed in favour of the dealer,
by the authorities. (Para 96 and 125)
B. Civil Law - Fair price Shop Licence -
Cancellation process - Nature - It is not a
departmental or regular inquiry under
Article 311 of the Constitution of India -
It is only a inquiry of summary nature
where in case of violation of terms of
conditions of license, action is initiated.
(Para 96)
C. Civil Law - Fair price Shop Licence -
Terms and Condition of Agreement - Noncompliance by the Dealer - Effect - Grant
of a license is not a right - The burden of
duty is very heavily cast upon a dealer,
who has to strictly comply with the
conditions of license, and cannot travel
beyond the agreement executed by him,
which lays various restriction upon him.
Agreement is not executed blindly, but
with an open eye by the licensee with the
State - Once the action is taken, upon any
violation, the dealer cannot turn around
and
blame
the
system
on
mere
technicalities, as the agreement binds him
to comply the conditions. (Para 115 and
116)
Writ petition dismissed. (E-1)
Cases relied on :-

## Text

_Characters 0–39,716 of 123,068. This is a partial read: ask again with offset=39716 for what follows._

10 All. Najakat Ali Vs. State of U.P. & Ors.
471
aforesaid procedure has not been observed.
Since no oral evidence has been examined the
documents have not been proved, and could not
have been taken into consideration to conclude
that the charges have been proved against the
respondents.

29. Apart from the above by virtue of
Article 311(2) of the Constitution of India the
departmental inquiry had to be conducted in
accordance with rules of natural justice. It is a
basic requirement of rules of natural justice that
an employee be given a reasonable opportunity
of being heard in any proceeding which may
culminate in a punishment being imposed on
the employee.

30. When a department enquiry is
conducted against the Government servant it
cannot be treated as a casual exercise. The
enquiry proceedings also cannot be conducted
with a closed mind. The enquiry officer has to
be wholly unbiased. The rules of natural justice
are required to be observed to ensure not only
that justice is done but is manifestly seen to be
done. The object of rules of natural justice is to
ensure that a government servant is treated
fairly in proceedings which may culminate in
imposition
of
punishment
including
dismissal/removal from service."
 (emphasis supplied)

14. It is otherwise on record that in respect
of the house allotted to petitioner a dispute was
raised before the Civil Court and an injunction
infavour of petitioner was operating. His
defence on merits in that regard does not appear
to have been examined in correct perspective.
In such circumstances, this court finds that the
disciplinary inquiry conducted against the
petitioner lacks fairness and objectivity and the
bias of inquiry officer was apparent on record.
In such circumstances, inquiry report as well as
consequential
orders
of
punishment,
as
confirmed in appeal and in revision, are found
to be violative of principles of natural justice
and are otherwise unsustainable for the reasons
recorded above.

15. Consequently, writ petition succeeds
and is allowed. Orders impugned dated
5.5.2011, 1.5.2012 and 15.7.2014 (Annexures-
21,25 and 28 to the writ petition) stands
quashed. Ordinarily this Court would have
remitted the matter for conducting fresh inquiry
from the stage it has gone bad, but this course is
not followed in the facts of the present case
since the petitioner has already attained the age
of superannuation in the year 2011 and a period
of more than 10 years have gone by. He has
been sufficiently punished even without
establishing his guilt. Any direction now for his
participation in the inquiry would amount to
further harassment of petitioner and would
otherwise be impermissible in law.

16. Consequently, a writ of mandamus is
issued to the respondents to correctly fix
petitioner's salary as also his retiral benefits as
per his entitlement and release all monetary
benefits to him within a period of four months
from the date of presentation of a copy of this
order.

17. Costs are made easy.
----------

(2021)10ILR A471
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 22.10.2021

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ C No. 15420 of 2020
Alongwith other cases

Najakat Ali ...Petitioner
Versus
State of U.P. & Ors. ...Respondents
472 INDIAN LAW REPORTS ALLAHABAD SERIES
Counsel for the Petitioner:
Sri Vishal Tandon

Counsel for the Respondents:
C.S.C., Sri Subhash Chandra Pandey

A. Civil Law - National Food Security Act,
2013 - Control Order, 2016 - Fair Price
Shop Licence
- Cancellation
- Audi
alteram partem - No regular enquiry
conducted, though opportunity to file
reply was given - It's effect - Applicability
of GO dated 29.07.2004 and 16.10.2014 -
Held, the principle of audi alteram partem
is complied once the notice is issued and
an
opportunity
is
provided
to
a
dealer/agent to submit his reply and the
same being considered by the authorities
- Held, the opportunity, as provided under
the Control Order, 2016, is given before
the license is cancelled - High Court
rejected the claim that a full fledged
inquiry
be
conducted
providing
opportunity
of
cross-examination
of
witness, copy of documents, complaint
and
consideration
of
subsequent
affidavits, if filed in favour of the dealer,
by the authorities. (Para 96 and 125)
B. Civil Law - Fair price Shop Licence -
Cancellation process - Nature - It is not a
departmental or regular inquiry under
Article 311 of the Constitution of India -
It is only a inquiry of summary nature
where in case of violation of terms of
conditions of license, action is initiated.
(Para 96)
C. Civil Law - Fair price Shop Licence -
Terms and Condition of Agreement - Noncompliance by the Dealer - Effect - Grant
of a license is not a right - The burden of
duty is very heavily cast upon a dealer,
who has to strictly comply with the
conditions of license, and cannot travel
beyond the agreement executed by him,
which lays various restriction upon him.
Agreement is not executed blindly, but
with an open eye by the licensee with the
State - Once the action is taken, upon any
violation, the dealer cannot turn around
and
blame
the
system
on
mere
technicalities, as the agreement binds him
to comply the conditions. (Para 115 and
116)
Writ petition dismissed. (E-1)
Cases relied on :-
1. K.S. Puttaswamy (Retired) & anr. (AADHAAR)
Vs U.O.I. & anr.; (2019) 1 SCC 1
2. Puran Singh Vs St. of U.P. & ors.; 2010(3)
ADJ 659
3. Ranjeet Vs St. of U.P. & ors.; (2019) 9 ADJ
704 (DB)
4. Misc. Single No. 21538 of 2018; Shakeel
Ahamad Vs The St. of U.P. & anr. decided on
16.12.2020
4. Ram Murat Vs Commissioner, Azamgarh
Division; (2006) 5 ADJ 396
5. Indrapal Singh Vs St. of U.P.; 2013 (10) ADJ
612 (F.B.)
6. Ram Prakash Vs St. of U.P.; (2017) 7 ADJ
126
7. Writ Petition No. 30912 of 2009; Rajneesh
Kumar Tyagi Vs St. of U.P. & ors. decided on
19.01.2010
8. Writ C No. 12737 of 2013; Ashok Kumar
Tiwari Vs St. of U.P. & ors. decided on
28.11.2014
9. Ajay Pal Singh Vs St. of U.P. & ors.; (2018) 7
ADJ 301
10. Writ C No. 46648 of 2017; Aajad Kumar Vs
St. of U.P. & ors. decided on 23.10.2017
11. Smt. Santara Devi Vs St. of U.P. & ors.;
(2016) 2 ADJ 70
12. Meena Devi Vs St.of U.P. & ors.; (2018 ) 10
ADJ 385
13. St. of Kerala Vs K.T. Shaduli Yusuf & ors.;
(1977) 2 SCC 777
14. Writ C No. 16372 of 2018; Smt. Kaushar
Jahan Vs St. of U.P. decided on 23.05.2018
15. Maneka Gandhi Vs U.O.I. & ors.; (1978) 1
SCC 248
16. A.K. Kraipak Vs U.O.I., (1969) 2 SCC 262
10 All. Najakat Ali Vs. State of U.P. & Ors.
473
17. Baraka Overseas Traders Vs Director
General of Foreign; (2006) 8 SCC 103
18. St. of W.B. & ors. Vs R.K.B.K. Limited &
anr.; (2015) 10 SCC 369
19. Writ C No. 61939 of 2015; Lakhan Singh Vs
St. of U.P. & ors. decided on 18.10.2019
20. Kallu Khan Vs St. of U.P. & anr.; 2008 (6)
ADJ 453 (DB)
21. Writ C No. 58035 of 2017; Meena Devi Vs
St. of U.P. & 4 ors. decided on 30.07.2018
22. A.S. Motor Pvt. Ltd. Vs U.O.I.; (2013)10 SCC
114
(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. ''Right to food' emanates from
''right to life' guaranteed under Article 21 of
the Constitution of India. Moving forward
Central Government enacted National Food
Security Act, 2013 (hereinafter called as
"Act of 2013") keeping in mind Article 47
of the Constitution, which mandates the
States with duty to raise the level of
nutrition and standard of living and to
improve public health.

2. Act of 2013 was implemented with
the object of providing food and nutritional
security in human life cycle approach, by
ensuring access to adequate quantity of
food at affordable price to people to live a
life with dignity and for matters connected
therewith. The Government implemented
Targeted Public Distribution System under
which foodgrains is provided to the
"eligible household" at subsidised rates
which includes people Below Poverty Line,
including Antyodaya Anna Yojana, and
Above Poverty Line households. Section
2(23) of Act of 2013 provides for "Targeted
Public Distribution System", which means
the system for distribution of essential
commodities to the ration card holders
through fair price shops.

3. Following the implementation of
Act of 2013, the State Government framed
Uttar Pradesh State Food Security Rules,
2015 (hereinafter called as "Rules of
2015") exercising powers under Section 40
of Act of 2013.

4. The Central Government thereafter
enacted "The Aadhaar (Targeted Delivery
of Financial and Other Subsidies, Benefits
and Services) Act, 2016 (hereinafter called
as "Act of 2016") for providing good
governance, efficient, transparent, and
targeted delivery of subsidies, benefits and
services, the expenditure for which is
incurred from the Consolidated Fund of
India, to individuals residing in India
through assigning of unique identity
numbers to such individuals and for matters
connected therewith or incidental thereto.
The validity of said Act was challenged
before Supreme Court of India in case of
K.S.Puttaswamy (Retired) and Another
(AADHAAR) vs. Union of India and
Another (2019) 1 SCC 1, and Apex Court
upheld the validity of Act of 2016.

5. As the country had become self
sufficient in the production of foodgrains, the
necessity arose for distribution of foodgrains
through Targeted Public Distribution System
to the last person (Antyodaya). Act of 2013
was the step towards fulfilment of object of
the Government creating a system so that the
foodgrains reaches the most vulnerable
section of society. Enactment of the Aadhaar
Act in year 2016 was with the aim that
subsidy granted from the Consolidated Fund
of India reach to the most deserving and
needy person, further capping the pilferage
which existed in the delivery system.

6. Section 40 of Act of 2013
mandated
the
State
Government
by
notification, and subject to the condition of
474 INDIAN LAW REPORTS ALLAHABAD SERIES
previous publication, and consistent with
the Act and rules framed by the Central
Government to make rules to carry out
provisions of Act of 2013.

7. Rules of 2015 was the first step by
the
State
Government
towards
the
achievement of fulfilment of dreams for
foodgrains reaching to most vulnerable
section of the society through Targeted
Public
Distribution
System.
Prior
to
enactment of Act of 2013, the State
Governments
were
issuing
various
Government Orders from time to time
exercising power under Section 3 of the
Essential
Commodities
Act,
1955
(hereinafter called as "Act of 1955"), which
was enacted for the control of production,
supply
and
distribution
of
essential
commodities.

8. Section 3 of Act of 1955 provided
power to the State Government to issue
order for controlling and regulating the
production, supply and distribution of the
essential commodities. It was in exercise of
this power under Section 3 of Act of 1955
that
U.P.
Scheduled
Commodities
(Regulation of Distribution) Order, 1989
was issued.

9.

Thereafter
came
the
U.P.
Scheduled Commodities Distribution Order
1990 and Clause 24 of the Order provided
for ''rescission' of earlier Uttar Pradesh
Foodgrains and Other Essential Articles
Distribution Order, 1977 and Uttar Pradesh
Scheduled Commodities (Regulation of
Distribution) Order, 1989.

10. The U.P. Scheduled Commodities
Distribution Order 1990 occupied the field
for
regulating
and
controlling
the
distribution of essential commodities in the
State till it was superseded by Uttar
Pradesh
Scheduled
Commodities
Distribution
Order,
2004
(hereinafter
called as "Order of 2004").

11. The Order of 2004, for the first
time,
provided
for
the
benefit
of
distribution
of
foodgrains
to
the
"Antyodaya families" and a classification
was made between the families living
Below Poverty Line (BPL) and those
Above Poverty Line (APL). This Order was
also issued in exercise of the power under
Section 3 of Act of 1955. Clause 2(c) of
Order of 2004 defined "Agent", which
means, a person or a cooperative society or
a Corporation of the State Government
authorised to run a fair price shop under the
provisions of the Order. Similarly, Clause
2(l) defined "Fair Price Shop", which
means a shop set up under the orders of the
State Government for the distribution of
Scheduled
Commodities.
Clause
4
envisaged provision for ''running of fair
price shop' which shall be run through such
person and in such manner as the Collector,
subject to the directions of the State
Government may decide. Sub- clause (2) of
Clause 4 provided that a person appointed
to run a fair price shop under sub-clause (1)
shall act as the agent of the State. Further
sub-clause (3) of Clause 4 provided that 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 fair price
shop as per the draft appended to the Order.

12. The Order of 2004 further
provided
for
various
provisions
for
identification of families living Below the
Poverty Line, ration card, quantity per unit
to be prescribed, quantities that may be
purchased on ration card, etc. Clause 21
provided for monitoring in accordance with
the order issued by the State Government.
10 All. Najakat Ali Vs. State of U.P. & Ors.
475
Clause 27 was in regard to ''Penalty' for
contravening any of the provisions of the
Order and the punishment shall be in
accordance with the orders issued by the
State Government from time to time.
Clause 28 provided for the ''Appeal' against
the order of penalty.

13. Pursuant to enforcement of Order of
2004, various dispute arose in regard to the
procedure to be followed in case of penalty
being imposed upon the fair price shop dealers,
contravening the provisions.

14. As there were conflicting views of
various benches of this Court, the matter was
referred to Full Bench in case of Puran Singh
vs. State of U.P. and others 2010(3) ADJ 659,
"whether an opportunity of hearing is
mandatory to be given to a fair price shop agent
before
suspension
of
fair
price
shop
agreement?" The Full Bench, after noticing the
Order of 2004 as well as Government Order
dated 29.7.2004, which was issued for
monitoring/regulating
various
kind
of
procedure,
found
that
proviso
to
the
Government Order dated 29.7.2004 provided
for an opportunity to the fair price shop owner
before his licence was suspended. Relevant para
35 of the judgment is extracted hereas under :

"Power of suspension is centrally
there but while exercising care is to be taken to
the mandate of the proviso which states that the
order is to be speaking one. Thus so far the
power of suspension while proceeding to call
upon the licencee about cancellation of the
shop is concerned it is always there. It will be
incorrect to hold that without preliminary
enquiry in respect to a fact finding and without
any opportunity the shop is not to be
suspended."

15. After the decision of the Full
Bench, the State Government came out
with
the
Government
Order
dated
16.10.2014, which was in continuation with
the
earlier
Government
Order
dated
29.7.2004, providing for the entries of
ration cards to be examined besides the
stock register, sale register and distribution
certificate issued by the village level
vigilance committee and official observer
appointed for supervising distribution.
Further duty was cast upon the licencing
authority to examine the explanation
furnished
alongwith
the
documentary
evidence by the licensee and then pass a
reasoned and speaking order.

16. After the enactment of Act of
2013, and Act of 2016, the State
Government having already framed the
Rules of 2015, came out with the Uttar
Pradesh
Essential
Commodities
(Regulation of Sale and Distribution
Control) Order, 2016 (hereinafter called as
"Control Order 2016") superseding the
earlier Government Order of 20.12.2004 as
well as all the Government Orders issued
prior to coming of this Order.

17. Control Order 2016 was issued in
the light of Act of 2013 and provided for
the
complete
mechanism
for
the
distribution of foodgrains allotted by the
Central and the State Government for
distribution under the Targeted Public
Distribution System. It not only provides
for the identification of eligible households
ration cards, lifting and distribution of
foodgrains by the State, procedure for
appointment of agent for fair price shop
but, for the first time, system was
introduced for operation of fair price shops.

18. It included the mechanism
wherein competent authority is required to
take prompt action in respect of any
violation of condition of licence including
476 INDIAN LAW REPORTS ALLAHABAD SERIES
any irregularity committed by the fair price
shop owner, which may include suspension
or cancellation of fair price shop licence.

19. Sub-clause (7) of Clause 8
provides for the inquiry in irregularity of
distribution by a fair price shop owner, and
in case licence is suspended, after inquiry, a
show cause notice has to be issued by the
competent authority and it is only after the
reply/explanation, by the dealer is given,
the same shall be examined by the officer
concerned and the order is passed. Relevant
Clause 8 of Order of 2016 is extracted
hereas under :

"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.

(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
10 All. Najakat Ali Vs. State of U.P. & Ors.
477
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 the
fair price shop owner, which may include
suspension or cancellation of the fair price
shop owner's license.

An
inquiry
regarding
irregularities in distribution by a fair price
shop owner shall be conducted by the
Designated officer or by the District
Magistrate. After inquiry, if the license of
fair price shop owner is suspended along
with a show cause notice by the competent
authority, then the reply/explanation of
show cause notice by fair price shop
owners will be examined by an officer at
least one rank above the inquiry officer. If
the
preliminary
enquiry
had
been
conducted by a district level officer, then
the explanation by fair price shop owners
shall be examined by another district level
officer.
(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 sub-clause (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."

20. Similarly, Clause 9 provides for
monitoring by the Food Commissioner.
Clause 13 of the Control Order 2016
provides for appeal against the action taken
by authorities.

21. Bunch of these petitions mostly
raise common grounds that the Licensing
Authority and also the Appellate Authority
did not afford opportunity of hearing before
cancelling
the
license.
Further,
no
opportunity
for
cross
examining
the
witnesses, inspection of documents, non
supply of inquiry report to the dealer by the
Licensing Authority in proceedings for
cancellation
of
license.
Moreover,
478 INDIAN LAW REPORTS ALLAHABAD SERIES
subsequent
affidavits
filed
by
the
complainant in favour of the dealer is also
not taken into account by the authorities.

22. In almost all the petitions ground
taken is that District Licensing Authorities do
not follow the procedure prescribed under
Government Order dated 29.07.2004 and
16.10.2014, which requires the authorities to
grant opportunity to the licensee in strict
terms before proceeding to cancel the license,
and various coordinate benches of this Court,
relying upon the said Government Orders had
proceeded to quash the order of cancellation.

23. The questions, which emerge for
consideration by this Court are:

"(i) Whether after issuance of
Control Order 2016, having been issued in
the light of Act of 2013 and Act of 2016, the
earlier Government Order of 2004 stood
superseded and repealed?

(ii) Whether any benefit can be
extended to the dealers/licensee of the
Government Orders dated 29.7.2004 and
16.10.2014, when their license has been
cancelled under the new scheme of 2016,
which provides for complete mechanism in
itself?"

24. I have heard S/Sri Vishal Tandon,
Saurabh Pandey, Pradeep Kumar, T.Islam
Arvind Prabodh Dubey, Ashok Kumar Singh,
Suresh Chandra Pandey and Sri Danbeer
Mishra, learned counsel for the petitioner in
their respective case, Sri Manish Goyal,
learned
Additional
Advocate
General,
assisted by Sri Shri Prakash Singh and Sri
Shashi Kant Upadhyay, learned Standing
Counsel for the respondents-State.

25. Sri Vishal Tandon, learned
counsel appearing in Writ Petition No.
15420 of 2020 submitted that the State
Government had issued Government Order
dated 29.07.2004 for monitoring/regulating
various kinds of procedure, while Order of
2004
contained
the
provisions
of
maintenance, supplies of foodgrains and
other essential commodities in the State.
Both these Government Orders were
considered by the Full Bench of this Court
in Puran Singh (supra), and the Court
found
that
Government
Order
dated
29.07.2004
provided
for
full-fledged
inquiry pursuant to show-cause notice for
cancellation.

26. The State Government, thereafter,
had
issued
Government
Order
on
16.10.2014
modifying
the
earlier
Government
Order
dated
29.07.2004,
providing that while conducting inquiry
with
respect
to
alleged
irregularities
committed by fair price dealer, the
competent authority was required to verify
entries made in distribution register with
the ration cards of the card holders.

27. Secondly, recording statement of
complainant/card holder and providing
opportunity to cross-examine such witness
was to be given for ensuring fairness and
transparency.
According
to
him,
Government Order of 29.07.2004 was
further modified on 16.12.2015, directing
all Sub Divisional Officers and District
Supply Officers to maintain a order-sheet
in proceedings of suspension/cancellation
of
fair
price
shop
for
maintaining
transparency.

28. Repealing of Order of 2004, by
promulgating the Control Order 2016
would not render otiose the earlier
Government Orders dated 29.07.2004,
16.10.2014 and 16.12.2015 as the Control
Order
2016
did
not
provide
any
10 All. Najakat Ali Vs. State of U.P. & Ors.
479
procedure/mechanism to be followed while
suspending/cancelling any license.

29. State Government on 05.08.2019
had issued another Government Order
wherein
complete
procedure
for
suspension/cancellation
has
been
prescribed and earlier Government Orders
occupying the field have been repealed.
The said Government Order provides for
recording statement of complainants/card
holders and the competent authority being
obliged to provide opportunity of crossexamination to license holder. Reliance has
been placed upon a decision of Division
Bench of this Court in case of Ranjeet vs.
State of U.P. and others, (2019) 9 ADJ
704 (DB). Reliance has also been placed
upon decision of co-ordinate Bench of this
Court in Misc. Single No. 21538 of 2018
(Shakeel Ahamad vs. The State of U.P.
through
Additional
Commissioner
(Food), Lucknow and another, wherein
this Court on 16.12.2020 had observed that
district administration had not proceeded
against any of the observers who failed to
discharge their duty of ensuring the proper
distribution
of
essential
commodities
amongst the beneficiaries.

30. He further contended that once the
mechanism has been provided in the
Control Order 2016 for the appointment of
vigilance committee which is constituted
under Rule 9 of Rules of 2015 for
supervising the functioning of targeted
public distribution system in the State, no
action is being taken by the State
authorities against such members of the
vigilance committee which is under direct
control of the Food Commissioner and is
required to monitor the entire distribution
of foodgrains under Clause 9 of Control
Order 2016.

31. According to him, if the licensee
is
held
liable
for
the
shortfall
in
distribution, then he alone cannot be
penalised for such action because the
Control Order 2016 as well as Rules of
2015 provide for monitoring of such
licensee through the mechanism provided
by appointment of vigilance committee.

32. Elaborating further he contended
that the observer so appointed, after
completion of distribution by the licensee,
issues a distribution certificate under his
signature which forms the basis of lifting of
foodgrains from the godown for the next
month. Once such certificate is issued by
the observer and the quota for the next
month is lifted by the dealer, the question
of short distribution of foodgrains or any
irregularity does not arise.

33. Emphasis has been laid that the
entire public distribution system is being
monitored and observed by the designated
officers of the State Government, who at
every step ensure that the foodgrains which
are lifted by the dealer reach the ultimate
beneficiary and necessary check and
balance has been provided at every stage so
as to only blame dealer and not the officials
of the State Government who are entrusted
with the duty of overseeing and managing
the entire distribution system would be
unfair and is only to harass the dealers as
has been done in the present case.

34. Sri Tandon next contended that
Section 24 of the U.P. General Clauses Act,
1904 saved the Government Orders dated
29.07.2004, 16.10.2014 and 16.12.2015
after repeal of the Order 2004 as there was
nothing inconsistent in the said Order with
the Control Order 2016. Relevant provision
of Section 24 runs as under:-
480 INDIAN LAW REPORTS ALLAHABAD SERIES

"24.
Continuation
of
appointments, notifications, orders etc.
issued under enactments repealed and reenacted:--Where any enactment is repealed
and re-enacted by an ( Uttar Pradesh ) Act,
with or without modification, then, unless it
is otherwise expressly provided, any
appointment, ( or statutory instrument or
form) made or issued under the repealed
enactment shall, so far as it is not
inconsistent with the provisions re-enacted,
continue in force, and be deemed to have
been made or issued under the provisions
so re-enacted, unless and until it is
superseded by any appointment, ( or
statutory instrument or form) made or
issued under the provisions so re-enacted."

35. He also referred to definition of
the term 'Enactment' as defined in section
2(14) of the above Act, which runs as
under:

"Enactment"--"Enactment" shall
include a regulation (as hereinafter defined
) and any Regulation of the Bengal,
Madras or Bombay Code, and shall also
include any provisions contained in any Act
or in any such Regulation as aforesaid."

36. He submitted that the term
'Enactment' as used in section 24 includes
regulation issued by the Government in
exercise of the powers conferred under the
enactment and so the aforesaid G.Os.
issued under the Control Order of 1990
which are not inconsistent with the
provisions of re-enacted Control Order of
2004 shall continue in force and shall be
deemed to have been made and issued
under the re-enacted Order.

37. He relied upon decision of
Division Bench in case of Ram Murat vs.
Commissioner,
Azamgarh
Division,
(2006) 5 ADJ 396 and also Full Bench
decision in case of Indrapal Singh vs.
State of U.P., 2013 (10) ADJ 612 (F.B.).

38. Learned counsel has also relied
upon decision of co-ordinate Bench in case
of Ram Prakash vs. State of U.P. (2017) 7
ADJ 126, Rajneesh Kumar Tyagi vs.
State of U.P. and others, Writ Petition
No.
30912
of
2009,
decided
on
19.01.2010, Ashok Kumar Tiwari vs.
State of U.P. and others, Writ-C No.
12737 of 2013, decided on 28.11.2014,
Ajay Pal Singh vs. State of U.P. and
others, (2018) 7 ADJ 301, Aajad Kumar
vs. State of U.P. and others, Writ-C No.
46648 of 2017, decided on 23.10.2017,
Shakeel Ahamad vs. State of U.P. and
another, Misc. Single No. 21538 of 2018,
decided on 16.12.2020 and Smt. Santara
Devi vs. State of U.P. and others (2016) 2
ADJ 70.

39. Sri Saurabh Pandey, learned
counsel appearing in Civil Misc. Writ
Petition No. 40982 of 2019 submitted that
aim and object of the Act of 2013 is similar
to the Essential Commodities Act, 1955
with the only change that now right of an
individual has been solidified. According to
him, an individual has a right to receive his
entitlement but there needs to be a
mechanism for realisation of the same, and
thus comes the importance of fair price
dealer without whom the dream of food
security cannot be fulfilled. He stressed that
it is very imperative for the State that fair
price dealers play quintessential role in
furtherance of the aim and objective of the
Act of 2013 to ensure access to adequate
quantity of food at affordable prices to
people to live with dignity. According to
him, without active participation of the fair
price dealers, the aim and objective cannot
be achieved, and thus in case both
10 All. Najakat Ali Vs. State of U.P. & Ors.
481
individual as well as dealer are aligned, the
problem of providing food can be achieved.

40. According to him, Government
Order
of
29.07.2004
provided
a
comprehensive procedure with respect to
suspension/cancellation of the license. It
was considered by the Full Bench in Puran
Singh (supra), where Court mandated fullfledged inquiry after issuance of showcause notice and the said decision guided
various subsequent decisions of this Court.
This led to the issuance of Government
Order dated 16.10.2014 modifying the
Government Order of 29.07.2004 providing
further for tallying the register of dealer
with the ration card of the individual
making the allegation of irregularity in
distribution of the foodgrains and further
providing cross-examination of the person
alleging such irregularity.

41. Subsequently, State Government
on 05.08.2019 after enactment of Act of
2013 and Control Order 2016 had issued a
Government Order providing for complete
procedure
for
suspension/cancellation
which was issued keeping in mind the said
Act. According to him, Control Order of
2016 does not provide for any procedure
for suspension and cancellation.

42. He next submitted that the
decision of co-ordinate Bench in case of
Meena Devi vs. State of U.P. and others,
(2018 ) 10 ADJ 385 had taken note of the
fact that after the enactment of Act of 2013
and Control Order 2016, the decisions
rendered are per incuriam but not the
subsequent decisions.

43. Adding to the argument made by
Sri Tandon, learned counsel submitted that
that distribution certificate issued by the
observer
(vigilance
committee)
is
a
presumption in favour of the dealer
regarding distribution of foodgrains until
and unless some material is brought to
rebut such presumption based on Section
114(e) of the Indian Evidence Act, 1872.

44. According to him, principles of
natural justice require that a proper
opportunity of hearing should be accorded
to licensee before his license is put under
suspension or cancelled. The authorities
while suspending/cancelling, act as a quasi
judicial authority and should act in a
transparent manner affording opportunity
of hearing providing the documents relied
upon, providing opportunity to question or
cross-examine the complainant and thereby
holding a full-fledged inquiry before the
license is suspended or cancelled.

45. According to him, model/draft
agreement executed by dealer with the
State also provides for procedure to be
adopted
for
cancellation
of
the
dealership/license
which
includes
opportunity to see the evidence against him
and permit him to present his case. The
opportunity which is to be given includes
the opportunity to examine the witnesses
and cross-examine them. Reliance has been
placed upon decision of the Apex Court in
case of State of Kerala vs. K.T. Shaduli
Yusuf and others, (1977) 2 SCC 777
(Paragraph No. 4). He also relied upon the
decision in case of Smt. Kaushar Jahan
vs. State of U.P., Writ-C No. 16372 of
2018, decided on 23.05.2018.

46. Learned counsel emphasized that
principles of natural justice is applicable by
implication in administrative and quasi
judicial matter, and its execution should be
express and clearly provided for as held by
Apex Court in case of Maneka Gandhi vs.
Union of India and others, (1978) 1 SCC
482 INDIAN LAW REPORTS ALLAHABAD SERIES
248 (Paragraph Nos. 9, 10, 11, 12, 14 and
93), A.K. Kraipak vs. Union of India,
(1969) 2 SCC 262 (Paragraph Nos. 13 and
19). According to him, right accrues in
favour of the person to whom license is
granted, and deprivation of such right
without a hearing is violation of principles
of natural justice and thus a vested right
having accrued in favour of the dealer
cannot be taken a way in such a casual
manner.

47. Reliance has been placed upon
decision of the Apex Court in case of
Baraka Overseas Traders vs. Director
General of Foreign (2006) 8 SCC 103
(Paragraph Nos. 9 and 10). He next
contended that as agreement provides for
duties of a dealer, then there are also the
corresponding rights, and the fairness
demands that procedure adopted with
respect to suspension and cancellation
should be fair and transparent.

48. It was lastly contended that action
of State authorities and its officials has
been very arbitrary and casual while
dealing with matters of suspension and
cancellation.
Simply
on
frivolous
complaints of few card holders, the
authorities act in an arbitrary manner and
license is immediately suspended without
any opportunity of hearing or providing
any preliminary report or the documents
relied by such authorities in dealing with
the license of the dealer. According to Sri
Pandey, authorities proceed on vague
allegations and where there are hundreds of
card holders attached with a fair price shop
only on a complaint of a few card holders,
the authorities proceed to suspend and
cancel the license.

49. Neither any inquiry report is given
nor the complaint on which the action is
initiated is supplied nor such complainants
are confronted for cross-examination so as
to arrive at conclusion and cancel the
license which was granted pursuance to the
agreement executed between the dealer and
the State. According to him, Act of 2013
has taken care of the card holder who has a
right of foodgrains, but the said right does
not curtail the protection granted under the
agreement before any action is taken by the
State authorities. The State cannot blindly
on the complaint assuming the complaint to
be gospel truth without adhering to the
principles of natural justice cancel the
license.

50. Sri Manish Goyal, Additional
Advocate General submitted that the entire
bunch of cases and the argument raised by
petitioners' counsels is confined to the fact
that
opportunity
of
hearing,
cross
examination, non supply of inquiry report
and affidavits filed by the complainants
having not been given to the dealer in
proceedings for cancellation of licence
vitiates the entire procedure being in
violation of different Government Orders
such as of 29.07.2004, 16.10.2014 and
16.12.2015.

51. Further, issuance of Control Order
2016 though deriving its power under
Section 3 of the Act of 1955 was issued to
fulfil the object of the Act of 2013 as well
as Act of 2016. The State Government in
furtherance
of
Article
47
of
the
Constitution of India which are the
directive principle, had tried to create a
system through Targeted Pubic Distribution
System so that the foodgrains/essential
commodities
reaches
the
last
person/Antyodaya and the object and
scheme of the Central Government is
fulfilled capping the pilferage and the
loophole in the distribution system.
10 All. Najakat Ali Vs. State of U.P. & Ors.
483

52. He pointed out that the Control
Order 2016 has its root from the Act of
2013 which was enacted with the object of
distribution of foodgrains at subsidised rate
to the household living Below the Poverty
Line as well as Above the Poverty Line.