# Ram Dhayan Singh v. The State of U.P. and others

- **Citation:** (2004) 1 ILRA 302
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2004-03-10
- **Case number:** Civil Misc. Writ Petition No. 33921 of 2003
- **Bench:** Anjani Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ram-dhayan-singh-v-the-state-of-u-p-and-others-40353
- **Pages:** 14

## Headnote

Sri V.K. Ojha
Sri Ramendra Asthana

Counsels for the Respondents:
Sri Suresh Singh
S.C.

Constitution of India-Arts 226, The Writ
Petition against order of cancellation of
termination of non-statutory agreement
arising out of Government orders for
appointments of agents/dealers in food
grains meant for public distribution
system Maintainability, no fundamental
on legal right- relationship of agent with
state
Government
contractual
Alternative
remedy
of
appeal
on
dismissed of appeal remedy of civil suit
available writ petition writ petition, held,
not maintainable-principles of natural
justice-Applicationlity -non-impalement
of complainants-since appeal lies only
against cancellation order, held, it was
not necessary to hear complaints, as
Government order does not prescribe
that complaints should also be heard.

Held: Paras 20 & 21

The case of the Respondents cannot be
said
to
be
either
arbitrary
or
discriminatory so as to attract the
provision of Article 14 of the Constitution
of India.

I am of the opinion that against the
action complained of, the present writ
petitions are not maintainable before
this Court under Article 226 of the
Constitution of India, as the contract of
the type as was in the present case is
purely non-statutory arising out of the
Government orders and the remedy open
to the person aggrieved by the action of
the authorities is under the Government
Order by filing an appeal. The appeal
filed
on
behalf
of
the
fair
price
holders/dealers/having been allowed/
dismissed, the remedy open to the writ
petitioners/dealers is not a writ petition
under Article 226 of the Constitution of
India, but ordinary civil remedy. So far
as the second category of the cases
wherein the dealership was cancelled/
suspended on the complaint made by the
complainants
and
on
appeal
the
Appellate Authority, according to the
relevant Government Order, has restored
the dealership without impleading these
complainants, as the authority was
affording
an
opportunity
to
the
complainants, as the authority was
affording
an
opportunity
to
the
complainants, is concerned. In view of
the
Government
Order,
referred
to
above, since appeal lies only against the
cancellation order, it was not necessary
to heard the complainants, as the
relevant Government Orders do not
prescribe that complainants should also
be heard, thus the authorities have not
committed any error in not hearing the
complainants.
Case Law Discussed:
C.M.W.P. No. 749 of 2003, decided on
2.5.2003 (All) (DB)
1991 (IT) ALR406: 1991 ALJ 498
http://www.allahabadhighcourt.nic.in
1 All] Ram Dhayan Singh V. The State of U.P. and others 303
1992(2) EFR.655 (All) (FB)
1992(2) EFR.669 (MP) (DB)
JT 1998 (3) SC S4
(1999) 7 SCC 89
JT 2001 (1) SC 426
AIR 1977 SC 1496
AIR 1977 SC 1504
AIR 1966 SC 334
AIR 1977 SC 2149
AIR 1977 SC 2155
AIR 1981 SC 1368
AIR 1989 SC 1076
2001 ACJ 1060
1993 (21) ALR 121
JT 1995 (3) SC1
AIR 1980 SC 738
AIR 2000 SC 2573
(2002) 1 SCC 217

## Text

_Characters 0–39,916 of 47,917. This is a partial read: ask again with offset=39916 for what follows._

302 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
the Courts below, I see no justification to
interfere in the findings of fact recorded
by the Courts below, namely that the sale
deed did not confer any right upon the
plaintiffs.

17. In view of the aforesaid, the
second appeal is dismissed. However, in
the circumstances, there shall be no order
as to costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED ALLAHABAD THE: 10.03.2004

BEFORE
THE HON'BLE ANJANI KUMAR, J.

Civil Misc. Writ Petition No. 33921 of 2003

Ram Dhayan Singh

...Petitioner
Versus
The State of U.P. & others ...Respondents

Counsel for the Petitioner:
Sri V.K. Ojha
Sri Ramendra Asthana

Counsels for the Respondents:
Sri Suresh Singh
S.C.

Constitution of India-Arts 226, The Writ
Petition against order of cancellation of
termination of non-statutory agreement
arising out of Government orders for
appointments of agents/dealers in food
grains meant for public distribution
system Maintainability, no fundamental
on legal right- relationship of agent with
state
Government
contractual
Alternative
remedy
of
appeal
on
dismissed of appeal remedy of civil suit
available writ petition writ petition, held,
not maintainable-principles of natural
justice-Applicationlity -non-impalement
of complainants-since appeal lies only
against cancellation order, held, it was
not necessary to hear complaints, as
Government order does not prescribe
that complaints should also be heard.

Held: Paras 20 & 21

The case of the Respondents cannot be
said
to
be
either
arbitrary
or
discriminatory so as to attract the
provision of Article 14 of the Constitution
of India.

I am of the opinion that against the
action complained of, the present writ
petitions are not maintainable before
this Court under Article 226 of the
Constitution of India, as the contract of
the type as was in the present case is
purely non-statutory arising out of the
Government orders and the remedy open
to the person aggrieved by the action of
the authorities is under the Government
Order by filing an appeal. The appeal
filed
on
behalf
of
the
fair
price
holders/dealers/having been allowed/
dismissed, the remedy open to the writ
petitioners/dealers is not a writ petition
under Article 226 of the Constitution of
India, but ordinary civil remedy. So far
as the second category of the cases
wherein the dealership was cancelled/
suspended on the complaint made by the
complainants
and
on
appeal
the
Appellate Authority, according to the
relevant Government Order, has restored
the dealership without impleading these
complainants, as the authority was
affording
an
opportunity
to
the
complainants, as the authority was
affording
an
opportunity
to
the
complainants, is concerned. In view of
the
Government
Order,
referred
to
above, since appeal lies only against the
cancellation order, it was not necessary
to heard the complainants, as the
relevant Government Orders do not
prescribe that complainants should also
be heard, thus the authorities have not
committed any error in not hearing the
complainants.
Case Law Discussed:
C.M.W.P. No. 749 of 2003, decided on
2.5.2003 (All) (DB)
1991 (IT) ALR406: 1991 ALJ 498
http://www.allahabadhighcourt.nic.in
1 All] Ram Dhayan Singh V. The State of U.P. and others 303
1992(2) EFR.655 (All) (FB)
1992(2) EFR.669 (MP) (DB)
JT 1998 (3) SC S4
(1999) 7 SCC 89
JT 2001 (1) SC 426
AIR 1977 SC 1496
AIR 1977 SC 1504
AIR 1966 SC 334
AIR 1977 SC 2149
AIR 1977 SC 2155
AIR 1981 SC 1368
AIR 1989 SC 1076
2001 ACJ 1060
1993 (21) ALR 121
JT 1995 (3) SC1
AIR 1980 SC 738
AIR 2000 SC 2573
(2002) 1 SCC 217

(Delivered by Hon'ble Anjani Kumar, J.)

1. These bunch of Writ Petitions, out
of which the present writ petition i.e. civil
misc. Writ petition No. 33921 of 2003
(Ram Dhyan Singh Versus the State of
U.P. & others) is the leading case, have
been filed under Article 226 of the
Constitution of India by the petitioners,
who can broadly be divided in the
following categories:

(i) Such petitioners, who entered
into an agreement with the concern
Authority as per relevant Government
Orders, whereby they were appointed to
deal with the food grains meant for
distribution under Public Distribution
System as an agent on behalf of the State
and their dealership (right to deal
exclusively in food grains meant for
Public Distribution System), have been
terminated, such persons who have
approached to the Appellate Authority in
terms of the relevant Government Orders
against the aforesaid termination and the
Appellate Authority has dismissed their
appeals.

(ii) Such petitioners, who were
granted dealership by virtue of an
agreement to exclusively deal with the
food grains meant for Public Distribution
System in the rural area and on being
complaints filed against such dealers, the
Authority acting upon the complaints
have terminated their agreement of
dealership; these dealers approached the
Appellate Authority and the Appellate
Authority; (a) has allowed their appeals
without hearing the complaints and
restored their respective dealership; or (b)
has
dismissed
their
appeals;
these
complainants have preferred writ petitions
on the ground that they were not heard by
the Appellate Authority before restoring
the dealership of the concern dealers; and
dears who have approached the Appellate
Authority against the cancellation of their
dealership and their appeal has been
dismissed by the Authority.

2. The State Government has issued
Government Order dated 3rd July' 1990
which provides the methodology of
appointing dealers and includes the
provision
of
appeal
against
suspension/cancellation/refusal to renew
the dealership to the Commissioner of the
division etc.

3. The another Government Order
dated 10th August, 1999 deals with the
subject. The next Government Order
dated 13th January, 2000, which deals
with
the
subject
and
the
latest
Government Order dated 22nd October,
2003, wherein relying upon the Division
Bench
decision
of
this
Court,
a
Government Order was issued on 30th
July, 2003 wherein it was stated that in
view of the decision of the Division
Bench of this Court in Civil Misc. Writ
Petition N. 749 of 2003 (Zila Panchayat,
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304 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
Ghaziabad) Vs. State of U.P. and others)
decided on 2nd May, 2003, the State
Government ahs issued a direction that
the Gram Panchayat has been conferred
with the powers of distribution etc. of the
food grains meant for Public Distribution
etc. of the food grains meant for Public
Distribution system. The Division bench
decision of this Court is subject matter of
Special Leave Petition No. 17369 of 2003
before the apex Court and the apex Court
vide its order dated 26th September, 2003
stayed the operation of the Judgment and
order of this Court, referred to above, and
consequently the Government Order was
issued reviving the Government Orders
dated 3rd July, 1990 and 13th January,
2000.

4. At the outset, Shri Suresh Singh,
learned Standing Counsel appearing on
behalf of the State of U.P. defending the
interest of the State relying upon the
aforesaid Government Orders raised a
preliminary
objection
regarding
the
maintainability of these writ petitions
before this Court, in as much as it is
submitted
by
the
learned
Standing
Counsel that in view of the decision of
Division Bench of this Court in the case
of Gopal Das Sahu and another Versus
State of U.P. and others reported in 1991
(17) A.L.R., page 406 (1991 ALJ, page
498) (Civil Misc. Writ Petition Nos.
20086 of 1990, 24834 of 1990 and 32131
of 1990), decided on April 15, 1991)
dealing with the similar controversy
arising
out
of
U.P.
Scheduled
Commodities (Regulation of Distribution
Order) 1989 (herein-in-after referred to as
"Distribution
Order
of
1989"),
the
Division bench of this Court has said that
the fair price shops dealers have no legal
right to obtain supply of schedule
commodities, neither the Government is
obliged to supply these commodities to
agents Paragraphs 16, 17, 18, 19 and 20
deal with the subject matter, which have
been referred to and relied upon by
learned Standing Counsel, are quoted as
hereunder:

"16. We have already noted the
relevant provisions of the distribution
Control Order of 1990. The Control Order
of 1990 does not contain any provision
for
cancellation
or
suspension
of
agreement and further the order does not
provide
the
manner
in
which
the
appointment of agent is to be made from
all these provision it is manifest that the
appointments of the petitions as agents to
run fair price shops are contractual and
their right to run the fair price shop
emanates from the agreements. The
Supreme Court as well as this Court on
various occasions considered the aspect of
the matter and held that the relationship of
an agent with the State Government is
contractual in the case of S.Chandra
Sekharan & Others Vs. Government of
Tamil Nadu & Others, reported in A.I.R.
1974, S.C. Page, 1543, the Supreme Court
had occasion to consider the validity of
the termination of agreement in respect of
sale of levy sugar do not have any
fundamental right or legal right to deal
with that commodity and as such they are
bound by the terms of the contract and
their termination being in pursuance of
the agreement cannot be assailed by
means of a writ petition under Article 226
of the Constitution. Similar view was
expressed by a Full Bench of this Court in
the cases of Shitla Prasad Vs. Mohd.
Saidullah & others, report in A.I.R. 1975,
Allahabad, Page 344 and M/s. Raj Kumar
Sheo Kumar & Another Vs. A.D.M.
(Civil Supplies and another, reported in
1981 (1) A.L.J., page 261 and Ram
http://www.allahabadhighcourt.nic.in
1 All] Ram Dhayan Singh V. The State of U.P. and others 305
Awadh Vs. State of U.P., reported in
1990-II, Essential Commodities Cases,
Page 490. IN all these cases it was held
that neither Article 14 of the Constitution
nor principles of natural Justice is
attracted
when
agreement
to
sell
Government's food grain through fair
price shop is terminated.

17. In the present case the petitioners
have no fundamental right or legal right to
deal with the scheduled commodities
distribution through the Government run
fair price shops. It is open to the
petitioners to carry on business of
foodgrain other than the foodgrains other
than the foodgrains supplied through
these fair price shops. Infact their right to
run fair price shops emanates from the
agreement. The agreement permits the
Collector to terminate or suspend the
agreement permits the Collector to
terminate or suspend the agreement and
this termination of suspension order will
not give a cause of action to the
petitioners to challenge the said order of
termination or suspension of agreement
by means of petition under Article 226 of
the Constitution.

18. Before we part with these cases we
propose to deal with the arguments
advanced on behalf of each of the
petitioners in connected with prayer for
supply of quota of scheduled commodities
by the respondents in their favour. The
argument is that the petitioners having
been appointed as authorized retail
distributors for running the Government
fair price shops or issued a license for
retail sale of kerosene oil, it is not open to
the respondents to abruptly stop supply of
scheduled
commodities
including
kerosene oil to them arbitrary and without
notice or intimation to them.
19. On the argument of the learned
counsel for the petitioners the question
which arises for consideration is as to
whether these petitioners have a right to
receive
the
quota
of
scheduled
commodities including kerosene oil and
in the event of non-supply of scheduled
commodities in their favour can this Court
compel the respondents to release the
quota of the said scheduled commotions
in favour of the petitioners for being
distributors through fair price shops.

20. We have gone through the Control
Order of 1990 and the Government Order
dated 3.7.90 issued in pursuance thereof
and we find that none of the petitioners
thereof and we find that none of the
petitioners has any legal right to obtain
supply
of
scheduled
commodities
including kerosene oil for distribution
through the fair price shops and furthers
there is no obligation on the part of the
Government to supply these commodities
in favour of the agents who have been
appointed to run the fair price shops.
However, there are several clauses
pertaining to method and manner of
supply of scheduled commodities to the
agents and the Government. The relevant
clauses are clauses 3, 4 and 5 of the
agreement Clause 3 of the agreement
stipulates that an agent shall receive of lift
quota of scheduled commodities in
accordance with the directions issued by
the authorities empowered in this behalf.
Thus the supply of quota of scheduled
commodities to the agents is subject to the
orders issued by the authorities concerned
and the agents cannot as a matter of right,
claims release of scheduled commodities
in their favour. We are, therefore, of
opinion the petitioners have neither any
fundamental right nor legal right as to
compel the Government to supply the
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306 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
scheduled
commodities
including
kerosene oil in their favour. Moreover in
the earlier part of the judgment we have
already held that the relationship of agents
who have been appointed for distribution
of the scheduled commodities through the
fair price shops with that of the State
Government is contractual and infact their
appointments as agents and determination
of the agreement are under the agreements
which is non-statutory in character, and,
therefore, the supply of release of quota of
scheduled commodities in favour of the
agents has to be governed by the
incidence of the contract or agreement
and this Court in exercise of powers under
Article 226 of the Constitution cannot
compel the Government to supply the
quota of scheduled commodities in favour
of the petitioners."

5. For the purposes of arriving its
conclusion, the Division Bench has relied
upon as observed in para 22 of Gopal Das
Sahu's Case, which runs as under:

"22. Moreover, controversy in the
present case is squarely covered by the
decisions of the Supreme Court and Full
Bench of this Court in the case of S.
Chandra Sekharan Vs. Government of
Tamil Nadu (Supra) and Shital Prasad Vs.
Mohd. Saibullah (Supra), respectively.
The decision of the Supreme Court in the
case
of
S.Chandra
Shekharan
Vs.
Government
of
Tamil
Nadu
is
a
constitution
bench
decision of
five
Hon'ble Judges whereas the decision of
the Supreme Court in Mahabir Auto
Stores (supra) is a decision by two
Hon'ble Judges of the Supreme Court. In
our opinion the decision in the case of S.
Chandra Shekharan Vs. Government of
Tamil Nadu (supra), is binding on the
High Court. We are, therefore, of the
opinion that the petitioner cannot derive
any assistance from the case of Mahabir
Auto Stores (Supra) as to compel the
respondents
to
supply
scheduled
commodities for distribution through
Government run fair price shops."

6. According to learned Standing
Counsel appearing on behalf of the State ,
the controversy stands concluded by a
Full Bench Judgment of this Court in the
case of U.P. State Gala Vikreta Parishad,
Allahabad Versus State of U.P and others,
reported in 1992 (2) E.F.R, Page 655,
wherein the Full Bench considered the
similar controversy and has held that the
agreement between the fair price agents
and District Magistrate / State for sale of
the scheduled commodities through fair
price shops and termination or suspension
of such dealership in that event this Court
will not interfere in exercise of power
under Article 226 of the Constitution in
paragraph 15 of the judgment, referred to
above, the Full Bench has considered the
decision of Division Bench of Gopal Das
Sahu (Supra) and held that it lay down
correct law and has given its conclusion
in paragraph 21, which is quoted below :
"21. Even through the petitioners and
other authorized agents cannot challenge
the breach of their contract on the ground
of violation of constitutional provisions
before this Court under Article 226 of the
Constitution but they are not remediless.
Government letter itself Provides for
appeal against some of the orders, which
may be passed by the authorities. That
part, the authorized agents like the
petitioners have remedy of civil suit
before the appropriate Civil Court, which
they can institute before filling of the
appeal as Well as after the appeal is
decided.

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1 All] Ram Dhayan Singh V. The State of U.P. and others 307
7. Learned counsel has further relied
upon a Division Bench decision of
Madhya Pradesh High Court, reported in
1992 (2) E.F.R. page 669 Bank of Baroda
Versus Collector, Indore and others in
support of his contention.

8. Learned counsel appearing on
behalf of the petitioners, on the other hand
submitted that after the amendment of the
Constitution
by
73rd
Constitutional
amendment, the so called contract or
appointment of the dealership cannot be
said to non-statutory, particularly, in view
of the observations made by the apex
Court in the case reported in J.T. 1998(3)
S.C., page 84 M/s. Hunderabad Vanaspati
Ltd.
Versus
Andhra
Pradesh
State
Electricity Board & Others and the case
reported in 1999(7) S.C.C., page 89 Style
(Dress Land) Versus Union Teritory,
Chandigarh and Another. It is further
submitted
on behalf
of
petitioner's
counsel that the appointments are under
respective Control Orders, which are
framed under the provisions of Essential
Commodities Act, as held by the apex
Court in the case reported in J.T. 2001 (1)
S.C., page 426.

9. Learned Standing Counsel in
support of his contention has further
relied upon a decision of the apex Court
reported in A.I.R. 1977 Supreme Court,
page 1496 M/s. Radhakrishna Agarwal
and others Versus State of Bihar and
others, on the question that the petitioners
cannot invoke the principles of natural
Justice and even if no opportunity was
given the order impugned cannot be said
to be void. Learned Standing Counsel has
relied upon paragraph nos. 10 and 11,
which are reproduced as under:-

"10. It is thus clear that the Erusian
Equipment Chemicals Ltd.'s case (AIR
1975
SC
226)
(supra)
invoked
discrimination at the very threshold of at
the time of entry into the field of
consideration of persons with whom the
government could contract at all. At this
stage, no doubt, the State Act purely in its
executive capacity and is bound by the
obligations which dealings of the State
with the individual citizens import into
every transaction entered into in exercise
of its constitutional powers. But, after the
State or its agents have entered into the
field of ordinary contract, the relations are
no longer governed by the constitutional
provisions but by the legally valid
contract, which determines rights and
obligations of the parties inter se. No
question arises of violation of Article 14
of any other constitutional provisions
when the State or its agents, purporting to
act within this filed, perform any act. In
this sphere, they can only claim right
conferred upon them by contract and are
bound by the terms of the contract only
unless some statute steps in an confers
some
special
statutory
power
or
obligation on the State in the contractual
field which is apart from contract.

11. In the cases before us the contracts
do not contain any statutory terms or
obligations and no statutory power or
obligation,
which
could
attract
the
application
of
Article
14
of
the
Constitutional is involved here. Even in
cases where the question is of choice or
consideration of competing claims before
an entry into the field of contract facts
have to be investigated and found before
the question of a violation of Article 14
counsel arise. If these facts are disputed
and require assessment of evidence the
correctness of which can only be tested
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308 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
satisfactorily by taking detained evidence,
involving
examination
and
crossexamination of witnesses, the case could
not be conveniently or satisfactorily
decided in proceedings under Article 226
of the Constitution. Such proceedings are
summary
proceedings
reserved
for
extraordinary cases where the exceptional
and what are described as, perhaps not
quit accurately, "prerogative" powers of
the Court are invoked. We are certain that
the cases before us are not such in which
powers
under
Article
226
of
the
Constitution could be invoked."

10. On the question of observation
of principle of natural Justice, learned
Standing Counsel has relied upon the
decisions
reported
in
A.I.R.
1977
Supreme
Court,
page
1504
Belde
Venkatesham
Versus
Chokkarapu
Lakshmi Narasian; and A.I.R. 1966
Supreme
Court,
page
334
Lekhraj
Sathramdas Dalvani Versus N.M. Shah,
Deputy Costodian cum Managing Officer,
Bombay and others. Learned Standing
Counsel has further relied upon the
decisions in support of his contention,
which are reported in A.I.R. 1977
Supreme Court, page 2149 The Bihar
Eastern Gangetic Fisherman Co-operative
Society Ltd. Versus Siphai Singh and
others; A.I.R. 1977 Supreme Curt, page
2155 All Party Hill Leader Conference,
Shillong Versus Captain W.A. Sangama
and others; A.I.R. 1981 Supreme Court,
page 1368 The Divisional Forest Officer
Versus Bishwanath Tea Co. Ltd. and
A.I.R. 1989 Supreme Court page 1076
Bareilly Development Authority and
another Versus Ajay Pal Singh and others.

11. These very arguments were
advanced, which have been repelled to by
learned single Judge of this Court in the
case reported in 2001 All. Civil Journal,
page 1960 Tareef Singh and others Versus
Commissioner Agra Division and others.
It has been stated at Bar that the judgment
of learned single Judge has become final,
as no Special Appeal or Special Leave
Petition was filed against the order or
learned single Judge in paragraph 12
learned single Judge has held, which
reads as under:

"12. The crucial question involved in
these writ petitions for consideration and
determination by this Court is whether the
appointment of the petitioners as agents
for running the fair price shops for
distribution of the essential commodities
to the assigned ration card holders in
pursuance of the agreements executed by
them in favour of the State or U.P.
through the Collector/Sub Divisional
Magistrate is the outcome of a statutory or
a non statutory contract. The fate of these
writ petitions obviously would turn out on
the answer of the above question
inasmuch as, the practice would swim or
sink with the finding on the point."

12. After coaxing the aforesaid
question,
learned
single
judge
has
answered the said question in paragraph
14, which runs as under:

"14. The learned Standing Counsel
pointed our that earlier a firm view had
been taken by this Court that the agency
to distribute the essential commodities is
the product of the non statutory contract
and, therefore, a writ petition under
Article 226 of the Constitution is not
maintainable. Obviously the reference
was to the decision of a Division Bench of
this Court in Gopal Das Sahu V. State of
U.P. 1991 (17) A.L.R., 406, which dealt
with the cancellation o contract executed
http://www.allahabadhighcourt.nic.in
1 All] Ram Dhayan Singh V. The State of U.P. and others 309
by an agent with the Collector for the sale
of scheduled commodity under the
Control Order. It was held that neither
Article 14 of the Constitution of India, nor
principles of natural Justice are attracted
when agreement to sell governing food
grains through fair price shops is
terminated. It was further laid down that
the relationship of the agents with
Government is contractual and nonstatutory in nature and, therefore, a writ
under Article 226 of the Constitution of
India is not maintainable to compel the
Government to supply the quota of
scheduled commodities to the petitioner
therein. Subsequently, a full Bench of this
Court in U.P. State Sasta Galla and
Vikreta Parishad, Allahabad V. State of
U.P. (1992 (2) EFR 655); and Shiv
Mohan Lal V. State of U.P. & other,
(1993 (21) A.L.R. 121 = (1992 All. C.J.
1139), approving the decision in Gopal
Das Sahu's case (Supra) held that the
order of termination or suspension of an
agreement entered into between the
petitioner and the District Magistrate for
sale of scheduled commodities through
fair
price
shop
pursuant
the
U.P.
Scheduled
commodities
Distribution
Order 1990 cannot be challenged in a writ
petition and the proper course, for the
agent or say the dealer, was to vindicate
his grievance by filing a civil suit. It was
canvassed before the Full Bench the in
view of the decision of the Apex Court in
Km. Krilekha Vidyarthi V. State of U.P.
AIR 1991 SC 537 and host of other
decision, the decision in Gopal Das
Sahu's
case
(supra)
required
reconsideration. The Full Bench retreated
the view taken Gopal Das Sahu's case
(supra) as laying down the correct law by
observing that the apex Court has
consistently taken the view that where the
contract which has been entered into
between the State and the person
aggrieved is non-statutory, the right of the
parties thereto are governed by the terms
of the contract and not by constitutional
provisions and no writ or order can be
issued
under
Article
226
of
the
Constitution of India by the High Court
for enforcing such a contract."

13. Learned counsel appearing on
behalf of the petitioners in those cases
which have been dealt with the learned
single Judge of this Court, as stated
above, also argued that the decision of the
Full Bench in U.P. Sasta Galla Vikreta
Parishad (E.F.R. 1992 (2), page 655) and
Shiv Mohan Lal (1993 (21) A.L.R. 121)
was primarily based on the observations
made by the apex Court in the case of
Bareilly Development Authority Vs. Ajay
Pal Singh, reported in AIR 1989 SC, page
1076,
which
was
subsequently
not
approved by the apex Court it its
subsequent decision in the case of Indore
Development Authority Versus Smt.
Sadhana Agrawal & Others, reported in
J.T. 1995 (3) S.C., page 1. Learned single
Judge has sum up his conclusion in the
para 17 of the said Judgment, which read
as under:

"17. In
Indore
Development
Authority (supra) the apex Court has not
deviated from its earlier view taken in
Bareilly Development Authority's case
(supra) but justified the interference in the
background
of
special
facts
and
circumstances
by
holding
that
the
Development Authority owned his duty to
explain and satisfy the Court the reason
for such high escalation. A cautions
approach was adopted by the Court by
making the observation that:

"We may add that this does not mean
that the High Court in such disputes while
exercising the writ jurisdiction has to
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310 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
examine every detail of the construction
with reference to the cost incurred, High
Court has to be satisfied on the materials
on record that the Authority has not acted
in an arbitrary and erratic manner."

14. The view taken in Bareilly
Development Authority's case (supra)
that the nature of the contract was nonstatutory has not been disturbed in the
decision in Indore Development Authority
(Supra). The law laid down in Bareilly
Development Authority's case, that the
Full Bench decision in U.P. Sasta Galla
Vikreta Parishad's case (supra) and Shiv
Mohan Lal's case (supra) are based on a
law, which has been subsequently held to
be not good."

15. the question of effect of the
changes
brought
in
by
the
73rd
constitutional amendment has also been
dealt with the learned single Judge in
paragraph 18 of the said Judgment, which
runs as under:

"18. A reference was made to
another decision of the apex Court in M/s
Hunderabad Banaspati V. Andhra Pradesh
State Electricity Board and other. JT
1998(3) SC 84 for determining whether a
contract is statutory nor non-statutory and
on the strength of this decision, Sri
Ramendra Asthana Strenuously argued
that the agreement executed by the
petitioners in favour of the District
Magistrate with a view to obtain license
to run fair price shop for distribution of
essential commodities would fall within
the ambit of statutory contract. He further
pointed out that a Division Bench of this
Court in a recent decision in Pappu V.
State of U.P. and others (supra) has held
that the contracts for running the fair price
shops have statutory flavour and a writ
petition for the enforcement of the right in
the event of their breach is maintainable
under Article 226 of the Constitution of
India. The law laid down by the Full
Bench in U.P. Sasta Galla Vikreta
Parishad (supra) and Shiv Mohan Lal
(supra) was held to have no application in
view of the fact that it came into being
prior to the insertion of Article 243-G of
the Constitution by means of Seventy
Third Constitutional Amendment and
substitution of Section 15 of U.P.
Panchayat Raj Act by Act No. IX of 1994.
It was pointed out that before the Full
Bench clause 4 of the U.P. Scheduled
Commodities Distribution Order. 1990
was under consideration. The Full Bench
visualized that fair price shops would be
run by such persons, in such a manner, a
manner, as the Collector, subject to the
direction of the State Government may
decide and the person authorized to run a
fair price shops would be treated as the
agent of the State Government. By a letter
dated 3.7.1990., the Government issued
instructions to all the District Magistrate
laying down therein the procedure for
selection of agents in rural areas and by
clause 6 thereof, the District Magistrate
had been directed to get the contracts
executed in the prescribed program by the
agents running the fair price shops.
Clause 11 of the said letter made
provision for appeal against the order of
appointment, suspension, cancellation, or
non-renewal of contracts. Under the new
system which was introduced as a result
of the amendment in the constitution and
incorporation of Section 15 in the U.P.
Panchayat Raj act and the issue of
Government order dated 10.8.1999, it was
pointed out that the allotment of fair price
shop is done pursuant to a resolution
passed in that regard by the concerned
Gram Sabha Certain qualifications have
been prescribed in the Government Order.
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1 All] Ram Dhayan Singh V. The State of U.P. and others 311
The status of the allottee it was held is not
that of an agent of the State Government.
The matter of allotment and the procedure
for cancellation as prescribed in the
Government Order have the force of law.
Once an allotment is made in favour of a
person he acquires a right to run the shop
in
the
manner
prescribed
in
the
Government Order. The allottee runs the
risk of cancellation only in the event of
committing
irregularities
in
the
distribution of scheduled commodities. A
Gaon Sabha is a legal authority within the
meaning of Article 12 of the Constitution
of India and its decision effecting the
rights of citizen cannot go beyond the
purview of Judicial review under Article
226 of the Constitution of India. To be
more precise, specific, and for the sake of
clarity, it would be proper to quote
paragraph 5 of the decision in Pappu's
case (supra) which reads as follows:
(All. C.J. at page 206).

"5. It would thus appear that the
selection and cancellation of fair price
shops are not longer a contractual matter.
It is now governed by the statutory
provision, namely, section 15 of the U.P.
Panchayat Raj Act, read with Government
order dated 10.8.1999, which has the
force of law being a provision having
statutory flavour.

In the instant case, the allotment of
fair price shops in favour of the
petitioner-appellant herein was cancelled
by the concerned Gram Panchyant but
without
following
the
procedure
prescribed in para 10 of the Government
Order referred to above, which provides
for an 'enquiry' by the Administrative
Committee of the Gram Panchyat into the
complaints regarding irregularities in the
distribution of scheduled commodities by
the allottee of the fair price shop. The
enquiry visualized by clause 10 of the
Government Order must, in the our
opinion, be held in a fair manner in tune
with the principles of natural Justice. The
fact
that
the
decision
regarding
cancellation is required to be taken by the
Gram Sabha in its open meeting would
suggest that there should be transparency
in the decision making process. A
decision regarding cancellation of fair
price shop taken by the Gaon Sabha sans
any enquiry in tune with the principles of
natural Justice cannot be sustained being
contrary to the procedure laid down in the
Government
Order
aforesaid
which
ensures procedural fairness in the matter
of cancellation of fair price shops."

16. Learned single Judge has further
dealt with the arguments advanced on
behalf
of
learned
counsel
for
the
petitioners in paragraphs 19 and 20 of the
aforesaid Judgment, which read thus.

"19. On the strength of the decision
in Pappu's cas (supra) Sri Ramendra
Asthana pointed out that the earlier view
taken in Gopal Das Sahu's case (supra) as
well as U.P. Sastha Galla Vikreta
Parishad (supra) and Shiv Mohan Lal
(supra) does not hold good and writ
petition is now maintainable under Article
226 to enforce the breach of the rights and
obligation arising out under the agreement
executed by the petitioners for obtaining
the essential commodities for distribution
to the ration card holders respectively
allocated to them. It was further urged
that there can be no enquiry without
observation of the principles of natural
Justice as has been laid down by the Apex
Court in Style (Dressland) V. Union
Territory
Chandigarh
and
another,
1997(7) SCC89; Vasant D. Bhavsar v.
Bar Council of India & others, 1999 (1)
SCC 45 and Sahi Ram V. Avtar Singh
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312 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
and others, (1999 (4) SCC 511 =1999 All.
C.J. 1482.)

17. In view of the Full Bench
decision in U.P. Sasta Galla Vikreta
Parishad (supra) as well as Division
Bench decision in Pappu, a reference to a
larger Bench was made by another
Division Bench in Chhokhe Singh V. Sub
Divisional Magistrate, Civil Misc. Writ
No. 51595 of 1999 posing as many as ten
specific question to be answered by the
larger Bench. The larger Bench did not
answer the question on merits by
observing that since the order dated
10.8.1999 (which was subject matter of
challenge in Pappu's case (supra) has
become redundant on account of its
withdrawal and revival of the old scheme
of
distribution
as
envisaged
in
Government Order dated 3.7.1990 there
was no need to answer the questions. The
larger Bench had the occasion to sift the
various legal points which have been
raised by Sri Ramendra Asthana in the
present writ petitioners, but since the
larger Bench declined to answer the
questions referred to it as the reference
was found to have become redundant the
judicial discipline demands that this Court
sitting
singly
has
to
take
into
consideration the scheme of distribution
of essential commodities as adumbrated
by the revived Government Order dated
3.7.1990 and to adhere to the decisions in
which said Government order came to be
tested. The law laid down in the Full
Bench decision in U.P. State Sasta Galla
Vikreta Parishad (supra) and Shiv Mohan
Lal (supra) hold good as regards the
scheme
propounded
under
the
Government Order dated 3.7.1990. The
agreements executed under the said
scheme shall be treated to be nonstatutory and the law laid down in
Pappu's case (supra) cannot be taken into
consideration as it proceeded on the
premises
of
the
new
scheme
as
contemplated
under
the Government
Order dated 10.8.1999 which came into
being on account f insertion of Article
243-G of the Constitution of India and
substitution of Section 15 of the U.P.
Panchayat Raj Act."

18. The learned single Judge in the
aforesaid judgment has summed up his
conclusion in paragraphs 23, 24 and 25,
which are as under:

"23. To, sum up, it may be printed
out that what has been canvassed,
discussed and decided by a Division
Bench of this Court in Pappu's case
(supra) in not applicable in the present
circumstances
as
in
that
case
the
Government order dated 10.8.1999 was
the subject matter of challenge which
came to be issued in the wage of insertion
of new article 243-G of the Constitution
of India and substitution of Section 15 of
the U.P. Panchyant Raj Act. After the
withdrawal of the said Government order
and reverting to the position as obtained
at the time when the Government order
dated 3.7.1990 was issued the decision in
Pappu's case (supra) has lost its relevance
and the cases on which reliance cannot be
ignored are Gopal Das Sahu (supra) and
Shiv Mohan Lal (supra) in which
agreements executed pursuant to the
Government order dated 3.7.1990 were
held to be non statutory contracts. After
the decision of the large Bench to which
the conflict was referred for resolution,
the legal position which emerges is that
the whole controversy is to be decided
with reference to the Government order
dated 3.7.1990 validity of which, as a
matter of fact, already stands concluded
by the decision aforesaid. Of necessity,
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1 All] Ram Dhayan Singh V. The State of U.P. and others 313
therefore, the agreements which are in
force pursuant to the Government Order
dated 3.7.1990, are to be treated as nonstatutory agreements. The law, as said
above is well settled that in case on non
statutory agreement, if there is a breach of
any term or condition, remedy of the
dealer/license holder is approach the Civil
Court for the redressal of his grievances.
For the remedial measures, the writ
jurisdiction under Article 226 of the
Constitution of India is not available. All
the writ petitions, therefore, turn out to be
devoid of any merits and substance.

24. Before parting, it maybe pointed
out that recently, the State Government
has issued at least three Government
orders on 4th January 2001 is with regard
to the issue of license for the sale of high
speed diesel oil by retail/petty diesel oil
dealers. The license is to be granted by a
committee
headed
by
the
District
Magistrate. The conditions of license
have
further
been
circulated
by
Government order No. 557/29.7.2001-D
(15)/2000
dated
3.2.2001,
Similarly
separate orders have been issued by the
State Government with regard to the
enforcement of reservation policy in the
public distribution system both for rural
and urban areas. The policy governing the
urban areas is contained in Government
order
No.
21/29
Kha-6-2001-53
(samanya)/99 dated 4.1.2001 and that of
rural area is No. VIP 169/29 Kha-6-200053 (Samanya)/99 of date. These two
Government orders are relevant for the
purposes
of
the
appointment
the
dealers/license holders for distribution of
the essential commodities through fair
price shops. In both the cases, i.e. urban
and rural, reservation in respect of
scheduled Caste, Scheduled Tribes and
other
Backward
Classes
has
been
provided besides horizontal reservation in
respect
of
women,
ex-serviceman,
members of the family of service-men
who laid their lives in war or were
injured, wife or widow of the freedom
fighters
and
physically
handicapped
persons.