# Radhey Shyam v. State of U.P

- **Citation:** (2022) 2 ILRA 453
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-02-16
- **Case number:** Writ-C No. 22891 of 2019
- **Bench:** Dinesh Kumar Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/radhey-shyam-v-state-of-u-p-48128
- **Pages:** 15

## Headnote

of Sale and Distribution Control) Order,
2016 - Clause 13(3) - Fair Price Shop
licence - Cancellation - Violation of term
and condition of licence - Inquiry - Audi
alteram partem - Non-compliance of full
opportunity of hearing - Effect - Claim to
hold the enquiry as being held in case of
disciplinary inquiry against government
servants, how far acceptable - Held, fullfledged
inquiry
in
the
matter
of
misconduct of a licensee in distribution of
scheduled commodities should be held,
does
not
mean
that
full-fledged
opportunity to the licensee to crossexamine the witnesses fixing, date, time
and place of the inquiry etc. as provided in
respect of disciplinary inquiry against
Government servants - Puran Singh's case
relied upon. (Para 27 and 34)
Writ petition dismissed. (E-1)
List of Cases cited:

## Text

_Characters 0–39,951 of 51,296. This is a partial read: ask again with offset=39951 for what follows._

2 All. Radhey Shyam Vs. State of U.P.
453
23.2.2010 are set aside and the writ petition
is allowed.

19. Parties are directed to bear their
own costs.
----------
(2022)02ILR A453
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 16.02.2022

BEFORE

THE HON'BLE DINESH KUMAR SINGH, J.

Writ-C No. 22891 of 2019

Radhey Shyam ...Petitioner
Versus
State of U.P. ...Respondent

Counsel for the Petitioner:
Rakesh Kumar Srivastava, Veerendra Kumar
Tiwari

Counsel for the Respondent:
C.S.C.

A. U.P. Essential Commodities (Regulation
of Sale and Distribution Control) Order,
2016 - Clause 13(3) - Fair Price Shop
licence - Cancellation - Violation of term
and condition of licence - Inquiry - Audi
alteram partem - Non-compliance of full
opportunity of hearing - Effect - Claim to
hold the enquiry as being held in case of
disciplinary inquiry against government
servants, how far acceptable - Held, fullfledged
inquiry
in
the
matter
of
misconduct of a licensee in distribution of
scheduled commodities should be held,
does
not
mean
that
full-fledged
opportunity to the licensee to crossexamine the witnesses fixing, date, time
and place of the inquiry etc. as provided in
respect of disciplinary inquiry against
Government servants - Puran Singh's case
relied upon. (Para 27 and 34)
Writ petition dismissed. (E-1)
List of Cases cited:
1. Arnesh Kumar Vs St. of Bihar; (2014) 8 SCC
273
2. Puran Singh Vs St. of U.P. & ors.; 2010 (3)
ADJ 659 (FB);
3. Writ C No. 12737 of 2013; Ashok Kumar
Tiwari Vs St. of U.P. & ors., decided on
28.11.2014
4. Writ C No. 3611 of 2014; Sanjay Kumar Vs
St. of U.P. & ors., decided on 5.2.2016
5. Writ C No. 15420 of 2020; Najakat Ali Vs St.
of U.P. & ors. decided on 22.10.2021
6. Writ C No. 58035 of 2017; Smt. Meena Devi
Vs St. of U.P. & ors., decided on 30.7.2018
(Delivered by Hon'ble Dinesh Kumar
Singh, J.)

1. The present writ petition has been
filed seeking quashing of the order dated
29.7.2019
passed
by
the
Joint
Commissioner (Food), Lucknow Division,
Lucknow in Appeal No.01512 of 2019,
which was preferred by the petitioner
against the order dated 27.5.2019 passed by
the District Supply Officer, Lakhimpur
Kheri cancelling the license of the fair price
shop of the petitioner situated in Nagar
Panchayat, Dhauraha. District Lakhimpur
Kheri. The order dated 27.5.2019 is also
impugned in the present writ petition.

2. The petitioner was given the
license to run the fair price shop relating to
Nagar Panchayat, Dhauraha. The petitioner
was required to distribute the scheduled
commodities and Kerosene Oil to the card
holders (Antyodaya and Patra Grahasti
Yojana) regularly at the rate prescribed by
the State Government.

3. On 6.4.2019, upon receiving
information, local police caught seven bags
of wheat being carried away in Nagar
Panchayat, Dhauraha for black marketing.
Sub-Divisional Magistrate, Dhauraha got
454 INDIAN LAW REPORTS ALLAHABAD SERIES
the inquiry conducted by the Regional
Supply Inspector, who made inspection on
the same day in presence of Sri Ram
Narayan, local resident, Sri Anil Kumar
Pandey,
Sub-Inspector,
Police
Station
Dhauraha, Sri Krishna Dutt, another local
resident and Sri Suraj Gupta, son of the
petitioner.

4. During the inquiry, certain
discrepancies were found in the distribution
of essential committees in stock register
and the details recorded in E-Pos machine
for distribution of the food grains. Upon
comparing, the details of the food grains
received by the petitioner and distributed to
the card holders, shortage of 3.27 Quintals
of wheat and excess of 1.27 Quintals of rice
was found. Statements of 38 Antyodaya
and Patra Grahasti Yojana card holders
were recorded, who alleged irregularities in
distribution of the essential commodities by
the petitioner from the fair price shop. An
FIR dated 9.4.2019 came to be registered
against the petitioner under Section 3/7 of
Essential Commodities Act being FIR
No.0204 of 2019 after taking approval of
the District Magistrate, Lakhimpur Kheri.

5. Petitioner filed Writ Petition
No.10652 (MB) of 2019 before this Court
challenging the FIR No.0204 of 2019
against him. The said writ petition was
disposed of vide order dated 16.4.2019
granting protection to the petitioner in light
of the judgment of the Supreme Court in
the case of Arnesh Kumar Vs. State of
Bihar, (2014) 8 SCC 273.

6. On 19.4.2019, suspension order
dated 15.4.2019 suspending the license of
the fair price shop of the petitioner passed
by the District Supply Officer, Lakhimpur
Kheri was served upon the petitioner. The
petitioner was issued show cause notice
requiring him to submit his explanation
within one week along with records
relating to the distribution of the essential
commodities from the fair price shop. On
30.4.2019
petitioner
submitted
his
explanation to the show cause notice before
the District Supply Officer, Lakhimpur
Kheri along with relevant records and
requested for revocation of the suspension
order dated 15.4.2019. He also requested
for
distribution
of
the
essential
commodities and Kerosene Oil to the
petitioner's fair price shop.

7. Thereafter, the petitioner filed Writ
Petition No.14195 (MS) of 2019 assailing
the suspension order dated 15.4.2019.
During the pendency of the said writ
petition, the District Supply Officer,
Lakhimpur Kheri cancelled the license of
the fair price shop of the petitioner vide
order dated 27.5.2019. The aforesaid writ
petition was also dismissed vide order
dated 28.5.2019 granting liberty to the
petitioner
to
assail
the
order
dated
27.5.2019 before the appropriate authority.

8. The petitioner, thereafter, filed Writ
Petition
No.16885
(MS)
of
2019
impugning the order dated 27.5.2019.
However, the said writ petition was
disposed of vide order dated 4.6.2019 with
liberty to the petitioner to prefer a statutory
appeal under Clause 13(3) of the U.P.
Essential Commodities (Regulation of Sale
and Distribution Control) Order, 2016 (for
short ''Control Order, 2016') with direction
to the appellate authority to decide the
appeal by a reasoned and speaking order. In
pursuance to the liberty granted by this
Court vide order dated 4.6.2019, petitioner
filed an appeal before the appellate
authority
on
12.6.2019,
which
was
dismissed by the appellate authority vide
order dated 29.7.2019.
2 All. Radhey Shyam Vs. State of U.P.
455

9. Sri R.K. Srivastava, learned
counsel for the petitioner has submitted that
along with the suspension order dated
15.4.2019, copy of the complaint and the
alleged inquiry report was not furnished to
the petitioner although it was mandatory
and obligatory to provide copies of the
same. He has further submitted that the
whole basis of suspension of the license of
the fair price shop vide order dated
15.4.2019 and thereafter cancellation of the
license vide order dated 27.5.2019 is FIR
dated 9.4.2019 registered against the
petitioner under Section 3/7 of Essential
Commodities Act. He has submitted that
Full Bench of this Court in Writ Petition
No.8033 of 2013, Bajrangi Tiwari Vs.
Commissioner Devi Patan Mandal, Gonda
and others, has held that fair price shop
agreement
should
not
be
suspended/cancelled simply on the basis of
the FIR registered against the fair price
shop holder. The order cancelling the
license of the fair price shop as well as
appellate order have been passed contrary
to the dictum of this Court in the case of
Bajrangi Tiwari (supra).

10. Learned counsel for the petitioner
has placed reliance on the Government
Order dated 29.7.2004 and submitted that
inquiry proceedings of the suspended fair
price shop should be concluded within a
period of one month by giving opportunity
of hearing to the concerned fair priced shop
holder. The said Government Order also
provides that after completion of such
inquiry proceedings within a maximum
period of one month, the competent
authority should take a final decision on
merits by passing a speaking order. In the
present case, the inquiry could not be
concluded within the time span as provided
in the above Government Order from the
date of suspension of the license of the fair
price shop i.e. on 15.4.2019. He has,
therefore, submitted that on this ground
also, the suspension order is liable to be
quashed.

11. Learned counsel for the petitioner
has also placed reliance on the Government
Order dated 16.10.2014, which was issued
in compliance of the order dated 15.9.2014
passed by this Court in Writ Petition No.
56415 (MS) of 2012, Smt. Lalita Devi Vs.
State of U.P. and others. The said
Government Order provides that in addition
to the conditions as laid down in the
Government Order dated 29.7.2004, while
conducting inquiry, the entries made in the
ration cards by the fair price shop holder
are to be taken into consideration by
verifying the same with the entries made in
the relevant regular register. In order to
ensure that the inquiry is made in a
transparent manner, opportunity of crossexamination
should
be
given
while
recording the statements of the concerned
persons. He has also submitted that in the
present case no opportunity was given to
the petitioner for cross-examining the
witnesses nor oral hearing was given to the
petitioner during the course of inquiry.

12. Learned counsel for the petitioner
has also submitted that no opportunity of
hearing was given to the petitioner before
cancellation order dated 27.5.2019 was
passed. It is, therefore, submitted that the
impugned order cancelling the fair price
shop license of the petitioner is de hors the
provisions of the Government Orders dated
29.7.2004 and 16.10.2014 and the same is
liable to be set aside. It is further submitted
that the appellate authority has not recorded
reasons and all grounds and pleas taken by
the petitioner and the written arguments
submitted by the petitioner have not been
considered. The appellate authority has not
456 INDIAN LAW REPORTS ALLAHABAD SERIES
given cogent and convincing reasons while
passing the impugned order.

13. In support of his contention,
learned counsel for the petitioner has
placed
reliance
on
the
following
judgments:-

"Puran Singh Vs. State of U.P. and
others, 2010 (3) ADJ 659 (FB);

Writ-C No.12737 of 2013, Ashok
Kumar Tiwari Vs. State of U.P. and others,
decided on 28.11.2014;

Writ-C No.3611 of 2014, Sanjay
Kumar Vs. State of U.P. and two others,
decided on 5.2.2016"

14. On the other hand, Sri Saharsha,
learned counsel representing the State
authorities has submitted that on receiving
information on 6.4.2019, local police
seized seven bags of wheat being carried
away in Nagar Panchayat, Dhauraha meant
for distribution among the card holders
from the fair price shop of the petitioner.
The Sub-Divisional Magistrate, Dhauraha
got the inquiry conducted by the Regional
Supply Inspector, who made inspection in
presence of the two local residents, SubInspector of the police station concerned
and the son of the petitioner. Certain
discrepancies were found in the details of
distribution of the essential commodities
and the stock register and the details
recorded in E-Pos machine. He has also
submitted that 38 card holders had given
statements alleging serious irregularities in
distribution of the food items. The
petitioner did not cross-examine any of the
said witnesses, who made statements
against him. He has further submitted that
after
the
inspection
was
made
and
preliminary inquiry report was submitted
regarding the irregularities, an FIR came to
be registered against the petitioner on
9.4.2019 with approval of the District
Magistrate,
Lakhimpur
Kheri.
The
petitioner was given full opportunity to
show cause within one week against the
irregularities found in the inquiry. The
petitioner was also given full opportunity
before cancelling the license of fair price
shop vide order dated 27.5.2019. It has
further been submitted that cancellation of
the license of the fair price shop was in
accordance with law, which was also
affirmed by the appellate authority vide
impugned order dated 29.7.2019.

15. Sri Saharsha has also submitted
that inquiry against the petitioner started on
6.4.2019 and the same got culminated with
cancellation order dated 27.5.2019. The
inquiry
was
concluded
strictly
in
accordance with Paragraph 8(8) of the
Control Order, 2016. Under the said
provision, the inquiry related to irregularity
in distribution of scheduled commodities
by the licensee of the fair price shop is to
be concluded within a maximum period of
two months.

16. Sri Saharsha has, therefore,
submitted that two competent authorities on
the basis of the facts, evidence and relevant
provisions of the Control Order, 2016 have
concluded that the petitioner had not
carried out the terms and conditions of the
license and he has not distributed the
essential commodities properly from the
fair price shop in accordance with the
provisions of the terms and conditions of
the license and provisions of the Control
Order, 2016. It is, therefore, submitted that
this Court in exercise of its jurisdiction
under Article 226 of the Constitution of
India, may not interfere with the concurrent
finding of fact recorded by the two
competent authorities and, therefore, the
writ petition is liable to be dismissed.
2 All. Radhey Shyam Vs. State of U.P.
457

17. In support of his contention, Sri
Saharsha, learned counsel representing the
State authorities has placed reliance on the
following judgments:-

"Writ-C No.15420 of 2020, Najakat
Ali Vs. State of U.P. and four others, and
other connected writ petitions, decided on
22.10.2021;

Writ-C No.58035 of 2017, Smt. Meena
Devi Vs. State of U.P. and four others,
decided on 30.7.2018."

18. I have heard the submissions
advanced on behalf of the learned counsel
for the petitioner as well as by the learned
counsel for the opposite parties.

19. There can be no manner of doubt
that a licensee of fair price shop is required
to distribute the essential commodities
strictly in accordance with the terms and
conditions of the license and the provisions
of the Control Order, 2016. If during the
course of inquiry, it is found that the
licensee has violated the terms and
conditions of the license or the provisions
of the Control Order, 2016, his license is
liable to be cancelled. If in the inquiry, it is
established that the licensee was not
carrying out the obligations under the
license as per the terms and conditions, this
Court in exercising the Writ jurisdiction
could be slow to interfere in the orders
passed by the competent authority and the
appellate authority.

20. In the case of Puran Singh
(supra),
the
questions
which
were
referred for decision by the Full Bench,
are as under :-

"1. Whether before suspension of
fair price agreement an opportunity of
hearing is mandatory to be given to the
fair price shop agent in violation of
which the suspension order is liable to be
set aside.

2. Whether the Division Bench
judgments in Pramod Kumar v. State of
U.P. and others, 2006 (10) ADJ 610 (DB)
and Harpal v. State of U. P. and another,
2008 (3) ADJ 36 (DB) lay down the
correct law that opportunity is must; or

3. Whether the Division Bench in
Gopi's case lays down the correct law ?"

21. The Full Bench in the case of
Puran Singh (supra) held that power of
suspension is certainly vested with the
licensing authority, but while exercising
the power to suspend the license of fair
price shop, care is to be taken that the
order is speaking one. The Full Bench has
specifically
held
that
it
would
be
incorrect to hold that when preliminary
inquiry of fact finding is held without
giving any opportunity, the fair price
shop is not to be suspended. It was
further held that if the opportunity before
passing the order of suspension is held to
be mandatory, then the very purpose for
which the authorities have been given
power i.e. to ensure the fair and smooth
distribution of the food grains would
stand diluted and immediate public
interest would suffer. Paragraphs 35 to 50
of the aforesaid judgment are extracted
herein-below:-

"35. Para 4 and 5 of the Government
Order clearly permits full-fledged enquiry
pursuant to the show cause notice for
cancellation and then final decision in the
matter. So far the order of suspension is
concerned Government Order do not
provide any appeal and at the same time
there was no contemplation of signing an
agreement
as
was
made
obligatory
pursuant to Distribution Order of 2004.
458 INDIAN LAW REPORTS ALLAHABAD SERIES

36. Thus on an overall view in the
matter it is clear that apart from the
powers
so
conferred
even
in
the
Government Order dated 29.7.2004 for
suspension of the license, now in terms of
the agreement between the parties (para 22
of the draft agreement) and on the basis of
the provisions as contained in Clause 22 of
the Distribution Order, 2004 ,the safe
interpretation is that authority can exercise
the powers of suspension of the license,
pending
proceedings
for
cancellation
which is subject to the result of the
appellate authority i.e. Commissioner of
the Division.

37. Besides taking the aforesaid view,
this can also be added that if the grievance
is about the exercise of powers on some
wrong fact/premises then apart from the
procedure of approaching the appellate
authority as the proceedings pursuant to
the action of suspension remains pending
before the licensing authority, aggrieved
can
straightaway
approach
to
that
authority
also
for
redressal
of
his
grievance.

38. It is not to be emphasised that in all
kind of exercise/orders on the pretext of civil
consequence and effect on the rights of a
claimant,affording of the opportunity is not
a matter of rule, but can be a matter of need
and fairness in given set of facts if the facts
so warrant. Although courts are not to work
on the basis of some personal knowledge
about various factors but at the same time
we are not to keep our eyes closed to what is
happening in the society and thus to accept
or
to
promote
the
technical
aspect/submission unless the court is
satisfied about
the
serious prejudice,
indulgence is not required as that is to result
into more injustice to the society and that
too a particular class in context of which we
are considering the issue.

39. These are not those kind of cases
where the applicant is to claim violation of
any of his rights and the exercise not
permitted under the relevant provisions.
Here is the case where applicant himself
has signed draft agreement permitting the
authority to exercise power of suspension.
The suspension of license is just as interim
measure,subject to final satisfaction of the
licensing
authority.
Petitioner
if
is
aggrieved of wrong facts/grounds on which
order is passed and on that basis if he can
come to this Court then why he can not
approach the same authority apprising him
about the mistake committed by him r
immediately to the appellate authority. This
Court cannot be expected and cannot be
requested by the petitioner to be the fact
finding enquiry/court and thus if the order
of suspension is founded on incorrect facts
then it is all the more reason for the
applicant
to
apprise
the
concerned
authority to have a fresh look into the
matter in the light of the facts and details
so supplied by him who can be in a better
position to analyse the details so as to take
the correct decision.

40. Certainly the order of the licensing
authority has to be reasoned,and speaking
and the charges/ground on which the order
of suspension is to be passed are to be
mentioned.
A
non
speaking
order,
sometimes may speak of arbitrary exercise.
Unless
the
facts/grounds
and
the
irregularities/charges on which the order
of suspension is based is mentioned in the
order one may not be in a position to form
any opinion and that may be argued to be
unjust exercise. It is to rule out this element
even
the
Government
Order
dated
29.7.2004 which has been referred in
decisions relied upon by the petitioner side
there is requirement as noted in proviso to
clause 2(Kha).
2 All. Radhey Shyam Vs. State of U.P.
459

41. If the argument of learned counsel
for
the
petitioner
of
providing
an
opportunity
before
passing
order
of
suspension is accepted to be mandatory
then the very purpose for which the
authorities have been given power i.e. to
ensure the fair and smooth distribution of
commodities
will
stand
diluted
and
immediate public interest will suffer.

42. If a serious charge of malpractice,
non supply, overcharging of the price,
closer of the shop or the complaint of like
nature having an adverse effect on the
smooth and fair distribution is received and
at the surprise inspection serious kind of
charges are prima facie found then it will
give an immediate cause/need to the
authority to take action as temporary
measure, with a simultaneous arrangement
of distribution through another fair price
shop dealer. If for a small duration
applicant claim discomfort then as the
interest of an individual qua public at large
is to be weighed, the court will ask the
applicant to wait and meet the charges with
promptness. Certainly the authority can be
expected to deal with the issue within
shortest
possible
time
so
that
on
acceptance/non acceptance of the charges
the result may take a final shape.

43. At this place we are to hurriedly
refer to the cases on which reliance has
been placed by the learned Government
side.

44. So far the decision given by the
Bench of this Court in the case of Gopi
(Supra) we are to observe that the Bench
has taken note of the provisions of the
Distribution Order of 2004. By referring to
various clauses of this order, Court noted
the need of setting fair price shop, its
running, monitoring, the condition to be
observed by an agent,penalty and the
provisions of the appeal. It is by referring
to various provisions, this Court took the
view that it will be wrong to add or read
the principles of natural justice by
implication at the stage of suspension of the
fair price shop.

45. It has been further held by the
Bench that power of suspension if exercised
in public interest does not by itself cause
prejudice to the licensee. These kind of
licenses does not fall within a category of
fundamental right to carry on their
business as provided in Article19(1)(g) of
the Constitution of India.

46. Observation made by the Bench in
the case of Gopi (Supra) in para 25 and 26
of the judgment is quoted below:

"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 fundamental right
460 INDIAN LAW REPORTS ALLAHABAD SERIES
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
essential
commodities Act, is to regulate the supply
and distribution of essential commodities
fairly. The suspension of such a license,
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 licencee in as much 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.

26. In this view of the matter, the
contention
raised
on
behalf
of
the
petitioner that suspension order without
providing opportunity curtails the right of a
licensee
cannot
be
accepted.
Even
otherwise, since there is a remedy by way
of appeal and the petitioner has aright to
object to the charges on which the licence
has been suspended, it is not necessary to
read the principles of natural justice by
implication at the stage of suspension. The
order of suspension is not a final order of
termination and therefore, there is no
permanent cessation of the licence. The
petitioner has an opportunity to contest the
matter and get his licence restored in the
event he is able to establish that the
grounds of suspension cannot be sustained
in law."

47. Similar is the position of the
decision given by this Court in the case of
Kallu Khan (Supra).

48. In the aforesaid decision the Bench
took into account the public distribution
system and its importance for which the
arrangement was brought in. It was finally
held that respondents cannot be held to be
under an obligation to provide opportunity
of hearing before passing the order of
suspension.

49. In view of the aforesaid it is clear
that in the Government Order dated
29.7.2004 there is no contemplation of any
notice and opportunity before suspending
the fair price shop, rather there is a clear
stipulation that the authority can pass the
order of suspension at the time of surprise
inspection and otherwise also if complaint
of
serious
irregularity
is
received.
Opportunity will be required only before
order of cancellation. This is also clearly
provided in the Distribution Order, 2004,
the provisions of which has an overriding
effect on the Government Order dated
29.7.2004. In terms of the Distribution
Order of 2004 parties are to sign
draft/agreement with a clear stipulation of
the power of the authority to pass the order
of suspension.

50. On the basis of the above analysis
we answer both the questions so referred as
below :

(I) Before suspension of fair price
agreement it is not mandatory to give an
opportunity of hearing and thus on the plea
of its violation, the order of suspension is
not liable to be set aside.

(ii) Division Bench judgments in
Pramod Kumar Vs. State of U.P. and
others reported in 2007 (1) ALJ 407 and
Harpal Vs. State of U.P. and another
reported in 2008 (4) ALJ 10 holding that
2 All. Radhey Shyam Vs. State of U.P.
461
opportunity is must does not lay down the
correct law.
Division Bench judgment in the case of
Gopi Vs. State reported in 2007 (5) ALJ
367 lays down the correct law that grant of
opportunity is not necessary."

22. Thus, in view of the aforesaid, this
Court does not find any substance in the
contention raised by the learned counsel for
the petitioner that before suspension of the
fair price shop agreement, the petitioner
was not given opportunity of hearing and
thus, the suspension order dated 15.4.2019
was bad in law and is hereby rejected.

23. In the case of Ashok Kumar
Tiwari (supra), this Court while relying on
the judgment of this Court in the Puran
Singh (supra) has held that full-fledged
inquiry is mandatory for cancelling the fair
price shop license. Relevant paragraph of
the said judgment is extracted hereinbelow:-

"Learned counsel for the petitioner
has placed reliance upon paragraph 35 of
the judgment of the Full Bench of this
Court in the case of Puran Singh vs. State
of U.P. and others (2010 (3) ADJ 659
(FB)) which reads as under:

"35. Para 4 and 5 of the Government
Order clearly permits full-fledged enquiry
pursuant to the show cause notice for
cancellation and then final decision in the
matter. So far the order of suspension is
concerned Government Order do not
provide any appeal and at the same time
there was no contemplation of signing an
agreement
as
was
made
obligatory
pursuant to Distribution Order of 2004."

In view of the decision in Puran Singh
(supra) a full-fledged enquiry is necessary
before cancelling the agreement and in my
view it would require service of the
charges, along with material in support of
each charge,upon the delinquent. The
information about the place and date of
enquiry to the delinquent. Recording of
statements of persons on whose complaint
enquiry has started or in a case of sue motu
enquiry, recording of statements of the
required persons as per wisdom of the
enquiry officer in the presence of the
delinquent. Thereafter, each charge has to
be discussed and proved separately."

24. In the case of Sanjay Kumar
(supra), a coordinate Bench of this Court
by placing reliance on the Government
Order dated 29.7.2004 has held that it is
obligatory upon the authority to hold a fullfledged inquiry against the fair price shop
dealer, after serving of the charge sheet
with regard to the date and place where the
hearing should take place and to give an
opportunity of hearing. It was further held
that this would be in addition to the show
cause notice issued for the purposes of
suspension of the license of the fair price
shop. It was also held that in view of the
Full Bench decision of this Court in the
case of Puran Singh (supra), if such
procedure is not followed, then it would be
held that full-fledged inquiry was not
conducted as provided in paragraphs 4 and
5 of the Government Order dated 29.7.2004
and the order would be bad in law.

25. It would not be out of place to
mention here that the judgment in the case
of Ashok Kumar Tiwari (supra) and Sanjay
Kumar (supra) were rendered taking into
consideration the Government Orders dated
29.7.2004 and 16.10.2014 and the latest
Control Order, 2016 was not considered.

26. In the case of Smt. Meena Devi
(supra), a coordinate Bench of this Court
specifically held after considering the Full
462 INDIAN LAW REPORTS ALLAHABAD SERIES
Bench decision of this Court in the case of
Puran Singh (supra) that the licensee of a
fair price shop is only an agent of the
Government engaged for ensuring the
equitable distribution and availability of the
essential commodities at fair prices. The
agent having signed the license/agreement
is bound by the conditions mentioned
therein including all such conditions which
the Government chooses to impose during
the currency of such license. A need for
fairness
in
procedure
adopted
for
suspension
and
cancellation
of
such
license/agreement would not mean that
these licenses fall within the category of a
fundamental right to carry on the business
as provided under Article 19(i)(g) of the
Constitution of India. In the said judgment,
judgments passed in the case of Ashok
Kumari Tiwari (supra) and Sanjay Kumar
(supra)
have
been
distinguished
in
paragraphs 19 to 21, which read as under:-

"19. It is this observation of the
Hon'ble
Full
Bench
regarding
the
"fullfledged inquiry" after suspension order
and show cause notice is issued, which has
been
interpreted
by
the
Co-ordinate
Benches of this Court to include giving a
copy of inquiry report, copies of the
statements of witnesses/villagers fixing
date, time and place of hearing for such
cross-examination as the licensee wishes to
carryout
of
such
villagers,
besides
examination of
documentary
evidence
submitted by him, before the Licensing
Authority
can
pass
the
order
of
cancellation.

20. The judgment rendered by the Full
Bench of this Court was in reference to the
questions referred to it. All observations
made by the Full Bench in the aforecited
judgments in Puran Singh (supra) are
therefore to be taken into consideration in
the context in which the reference was
made and decided. The Full Bench decision
of this Court had examined paragraphs-4
and 5 of the government order dated
29.07.2004 in the context of the reference
made to it. The language of paragraph - 4
refers to full opportunity of hearing being
given to the licensee in the inquiry to be
conducted after suspension order is passed.
The inquiry is to be completed within a
maximum period of one month necessarily.
The final order was to be passed by the
Licensing Authority on merits after making
a clear mention therein that the concerned
licensee had been given opportunity of
hearing and in case he did not co-operate
in the inquiry, a mention was to be made of
the notices served upon him including the
notice giving the final opportunity in case
he avoided the inquiry.

21. The Hon'ble Full Bench had
referred to the object of issuing affair price
shop license and appointing agents for
distribution of essential commodities and
had emphasized that a license is given for
the benefit of ordinary citizens, the
beneficiaries of the Public Distribution
System."

27. In the aforesaid case, this Court
has held that observation in paragraph 35 of
the judgment in the case of Puran Singh
(supra) that a full-fledged inquiry in the
matter of misconduct of a licensee in
distribution of scheduled commodities
should be held, does not mean that fullfledged opportunity to the licensee to crossexamine the witnesses fixing, date, time
and place of the inquiry etc. as provided in
respect of disciplinary inquiry against
Government servants.

28.

Learned
Single
Judge
in
paragraph 50 of the aforesaid judgment had
held
that
judgments
rendered
by
a
coordinate Bench of this Court in the case
2 All. Radhey Shyam Vs. State of U.P.
463
of Gyan Singh Vs. State of U.P. and others,
decided on 12.9.2012, Ashok Kumar
Pandey Vs. State of U.P. and others,
decided on 13.12.2012 and Abu Baker Vs.
State of U.P. and others, 2010 (6) ADJ 339
were clearly per incuriam as no such
provision exists in the Government Order
dated 29.7.2004 for fixing date, place and
time for inquiry/oral hearing and giving
opportunity to the licensee to crossexamine the witnesses. Paragraphs 50 and
51 of the said judgment are extracted
herein-below:-

"50.
The
judgment
rendered
by
Coordinate Benches before the issuance of
this order dated 16th October, 2014 Viz.
Gyan Singh Vs. State of U.P. and others
decided on 12.09.2012, in Ashok Kumar
Pandey Vs. State of U.P. and others
decided on 13.12.2012 on the basis of the
judgment in Abu Baker Vs. State of U.P.
and others, reported in 2010 (6) ADJ 339
decided on 23rd of February, 2010,which
is the first judgment wherein relying upon
D.K. Yadav Vs. J.M.A. Industries, (1999)
3 SCC 259 and National Building
Construction
Corporation
Vs.
S.
Raghunathan: (1998) 7 SCC 66, the
observation was made that the inquiry was
vitiated
because
the
statements
of
Cardholders were recorded behind the
back of licensee and neither copies of the
statements of the aforesaid witnesses was
furnished to the petitioner nor he was given
any opportunity to cross-examine the
witness so examined, were clearly per
incuriam as no such provision existed in
the government order dated 29.07.2004 at
the time for fixing date, place and time of
inquiry/oral
hearing
and
giving
opportunity for the licensee to cross
examine the witnesses/ complainants.

51. This Court is of the considered
opinion that a fair price shop licence is
only an agent for distribution of scheduled
commodities under the Public Distribution
System. Such a licensee being only an
agent acts for the principal i.e. the
Government
with
a
fixed
rate
of
commission on the amount of allocation of
essential
commodities
and
their
distribution
by
weight.
The
Public
Distribution System has been envisaged by
the government only to help the poor and
needy. It is honest tax-payer's money
which is used to subsidize the price of
such essential commodities so that they
come within the reach of poor and needy
and they are able to feed themselves and
their family in a respectable fashion and
are not led to mendicancy and starvation.
The
principal
remaining
the
State
Government, and the licensee being only
an agent, the principal is entitled to take
away the licence in case of irregularity in
distribution. Of course, there should exist
valid reasons for taking away of such
licence and some opportunity of hearing is
required to be given to the agent in case of
complaints being received against him.
However, there is no fundamental right
nor any Constitutional right for such a
licensee akin to Article 311 of the
Constitution of India. Even in the case of
government
servants protected under
Article 311 of the Constitution of India the
degree of proof required for establishment
of guilt is that of "preponderance of
probability."

29. In the case of Najakat Ali (supra),
a
coordinate
Bench
of
this
Court
considered and decided the following two
questions as mentioned in paragraph 23,
which read as under :-

"(I) Whether after issuance of Control
Order 2016, having been issued in the light
of Act of 2013 and Act of 2016, the earlier
464 INDIAN LAW REPORTS ALLAHABAD SERIES
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?"

30. Central Government has enacted
National Food Security Act, 2013 (for short ''the
Act of 2013') keeping in mind Article 47 of the
Constitution of India, which mandates the
States with duty to raise the level of nutrition
and standard of living and to improve public
health. Act of 2013 has been implemented with
the object of providing food and nutritional
security to the citizens by ensuring access to
adequate quantity of food at affordable price in
order to ensure life with dignity. The
Government has implemented Targeted Public
Distribution System under which the foodgrains are provided to the "eligible household"
at subsidized rates which includes people
Below Poverty Line, including Antyodaya
Anna Yojana and Above Poverty Line
households.
The
State
Government
to
implement the provisions of the Act of 2013,
has framed Uttar Pradesh State Food Security
Rules,
2015.
The
Central
Government
thereafter has enacted The Aadhar (Targeted
Delivery of Financial and Other Subsidies,
Benefits and Services) Act, 2016.

31. After the enactment of Act of
2013
and
the
Rules
by
the
State
Government in 2015, the State Government
has issued Control Order, 2016 superseding
the
earlier
Government
Order
dated
20.12.2004 as well as other Government
Orders.

32. Sub-clause (7) of Clause 8 of the
Control Order, 2016 provides mechanism
for inquiry in case of irregularity of
distribution by a fair price shop owner
including the provision of suspension etc.,
which reads as under :-

"8. Operation of fair price shops-- (1)
The fair price shop owner shall disburse
food grains 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.