# Shankar Prasad v. State of U.P. & Ors

- **Citation:** (2022) 4 ILRA 894
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-12-08
- **Case number:** Misc. Single No. 32679 of 2019
- **Bench:** Rajesh Bindal, C.J. Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/shankar-prasad-v-state-of-u-p-ors-47610
- **Pages:** 15

## Headnote

A. Civil Law - Cancellation of fair price
shop
license
-
U.P.
Scheduled
Commodities Distribution Order, 2004 -
Clause 21 and 22 - GO dated 29.07.2004 -
Essential Commodities Act, 1955 - Section
3 - Uttar Pradesh Scheduled Commodities
Distribution Order 1990 - Sub-clause (1)
of clause 4, Clause 22 - Uttar Pradesh food
grains
and
other
Essential
Articles
Distribution Order, 1977 - National Food
Security Act, 2013 framed the Uttar
Pradesh State Food Security Rules, 2015 -
Section 40 - Uttar Pradesh Essential
Commodities (Regulation of Sale and
Distribution Control) Order 2016: Subclause (4) of Clause-8.

Words
and
Phrases
-
"full
fledged
enquiry" - While dealing with an enquiry
regarding cancellation of fair price shop license
a full fledged enquiry is contemplated which
includes serving of the charge-sheet and
notifying the licensee of the place and date of
hearing during course of enquiry. Supply of
enquiry report has also been held to be sine qua
non. (Para 9)

It is held that the words "full fledged
enquiry" as used by the Full Bench of this
Court in the decision of Puran Singh
(infra) has to be read in context with
paras 4 and 5 of the GO of July 2004 and
scheme therein which merely requires
adherence to the principles of natural
justice and does not provide for a detailed
enquiry involving various stages and steps
as are required to be met in disciplinary
enquiry against a government servant.
(Para 47)

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

The requirement of entering into an
agreement between licensee and the
4 All. Shanker Prasad Vs. State of U.P. & Ors.
895
State is also provided in the Distribution
Order of 2004. Thus, the position of a licensee
remains that of an agent of the State who is
appointed to carry out the functions as
entrusted to him in terms of the Distribution
Order of 2004 and now under the Control Order
of 2016 and is governed by the said Control
Order and the terms of the agreement. Neither
the agreement nor the Distribution Order
of 2004 or the Control Order of 2016
envisage an elaborate enquiry nor the
same can be claimed by the licensee. (Para
46)

B. Rules of natural justice are not rigid or
immutable rules and they are not to be
applied in a straight-jacket formula rather
these are rules which are flexible to meet
the exigencies of a situation. (Para 44)

It is held that the parameters for an
enquiry to be conducted against the
licensee for the irregularities committed
by the licensee in terms

## Text

_Characters 0–39,969 of 51,179. This is a partial read: ask again with offset=39969 for what follows._

894 INDIAN LAW REPORTS ALLAHABAD SERIES
consent of the original tenure holder. As
such the judgments cited by learned
counsel for opposite party No.1 are of no
avail to him.

26. Since the impugned order passed
by the appellate authority has failed to
consider the fact that opposite party No.1
has not been able to make out a case of
adverse possession, the order dated 25th
July, 1998 clearly being unsustainable is
quashed by issuance of writ in the nature of
Certiorari. Consequential orders dated 13th
August, 1998 and 25th July, 2001 are also
quashed in consequence thereof.

27. A writ in the nature of Mandamus
is issued commanding the opposite parties
to correct records pertaining to entries over
the properties in question.

28. In the result petition succeeds and
is allowed. Parties to bear their own costs.
----------
(2022)04ILR A894
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 08.12.2021

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE JASPREET SINGH, J.

Misc. Single No. 32679 of 2019

Shankar Prasad ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Mr. Rajat Rajan Singh, Advocate

Counsel for the Respondents:
Mr. Manjive Shukla, Addl. C.S.C.

A. Civil Law - Cancellation of fair price
shop
license
-
U.P.
Scheduled
Commodities Distribution Order, 2004 -
Clause 21 and 22 - GO dated 29.07.2004 -
Essential Commodities Act, 1955 - Section
3 - Uttar Pradesh Scheduled Commodities
Distribution Order 1990 - Sub-clause (1)
of clause 4, Clause 22 - Uttar Pradesh food
grains
and
other
Essential
Articles
Distribution Order, 1977 - National Food
Security Act, 2013 framed the Uttar
Pradesh State Food Security Rules, 2015 -
Section 40 - Uttar Pradesh Essential
Commodities (Regulation of Sale and
Distribution Control) Order 2016: Subclause (4) of Clause-8.

Words
and
Phrases
-
"full
fledged
enquiry" - While dealing with an enquiry
regarding cancellation of fair price shop license
a full fledged enquiry is contemplated which
includes serving of the charge-sheet and
notifying the licensee of the place and date of
hearing during course of enquiry. Supply of
enquiry report has also been held to be sine qua
non. (Para 9)

It is held that the words "full fledged
enquiry" as used by the Full Bench of this
Court in the decision of Puran Singh
(infra) has to be read in context with
paras 4 and 5 of the GO of July 2004 and
scheme therein which merely requires
adherence to the principles of natural
justice and does not provide for a detailed
enquiry involving various stages and steps
as are required to be met in disciplinary
enquiry against a government servant.
(Para 47)

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

The requirement of entering into an
agreement between licensee and the
4 All. Shanker Prasad Vs. State of U.P. & Ors.
895
State is also provided in the Distribution
Order of 2004. Thus, the position of a licensee
remains that of an agent of the State who is
appointed to carry out the functions as
entrusted to him in terms of the Distribution
Order of 2004 and now under the Control Order
of 2016 and is governed by the said Control
Order and the terms of the agreement. Neither
the agreement nor the Distribution Order
of 2004 or the Control Order of 2016
envisage an elaborate enquiry nor the
same can be claimed by the licensee. (Para
46)

B. Rules of natural justice are not rigid or
immutable rules and they are not to be
applied in a straight-jacket formula rather
these are rules which are flexible to meet
the exigencies of a situation. (Para 44)

It is held that the parameters for an
enquiry to be conducted against the
licensee for the irregularities committed
by the licensee in terms of the Distribution
of Essential Commodities is on broad
principles of natural justice where the
competent authority shall provide a show cause
notice to the licensee indicating the violations
and irregularities committed by the licensee with
sufficient particularity to enable him to respond
to the same and after affording an opportunity
of hearing, the decision can be taken by the
competent
authority
by
a
reasoned
and
speaking order. The enquiry envisaged is
summary in nature and does not entail a
detailed hearing, akin to a departmental
enquiry. (Para 47)

The GO of July 2004, indicates the
suspension of a fair price shop license will
not be done merely on a complaint by a
person rather it provides that in case if
any complaint is received from any source
then first a preliminary enquiry be held.
The suspension order/a show cause notice
must be passed with a speaking order and
must also mention and refer to all such
irregularities and violations which have been
noticed in the preliminary enquiry to enable the
fair
price
shop
owner
to
respond
with
particularity. (Para 31)

Clause 4 of the GO of July 2004 also
provides that the enquiry in respect of the
suspended
fair
price
shop
must
be
completed by the competent authority
within a period of one month and the
decision to be given by a speaking order
after affording full opportunity of hearing
to the licensee concerned. It also envisages
that the licensee is under responsibility to
cooperate in the early hearing and conclusion of
the enquiry. (Para 32)

The efforts made by the Government from time
to time is clearly to establish an accepted
procedure and manner in which the enquiries
regarding suspension/cancellation of a fair price
shop is to proceed. (Para 42)

Matter to be placed before learned Single
Judge at the earliest to decide the same in
the light of the reference so answered. (E4)

Precedent referred:

1. Puran Singh & ors. Vs St. of U.P. & ors.,
(2010) 2 UPLBEC 947 (Para 1(b))

2. Santara Devi Vs St. of U.P. & ors., 2016 (2)
ADJ 70 (Para 9)

3. Ansar Khan Vs St. of U.P. & ors., 2018 (141)
RD 586 (Para 9)

4. Ashok Kumar Tiwari Vs St.of U.P. & ors., WritC No.12737 of 2013 (Para 9)

5. Vishwajeet Singh Vs St. of U.P. & ors., Writ
Petition No.26319 (M/S) of 2019 (Para 9)

6. Meena Devi Vs St. of U.P. & ors., 2018 (10)
ADJ 385 (Para 10)

7. Pramod Kumar Vs St. of U.P. & ors., 2007 (1)
ALJ 407 (Para 33)

8. Har Pal Vs St. of U.P. & ors., 2008 (4) ALJ 10
(Para 33)

9. A.S. Motors Pvt. Ltd. Vs U.O.I. & ors., (2013)
10 SCC 114 (Para 44)
896 INDIAN LAW REPORTS ALLAHABAD SERIES
(Delivered by Hon'ble Jaspreet Singh, J.)

1. A Single Judge of this Court vide
order dated November 29, 2019 passed in
Writ Petition No.32679 (M/S) of 2019
noticing a cleavage of opinion in various
decisions of Single Judges of this Court in
respect of the true import of the scope for
enquiry as required to be undertaken while
dealing with cancellation of fair price shop
license, referred, to a Larger Bench the
following two questions:

(a) What are the parameters of
principles of natural justice to be followed
in
inquiries
conducted
by
Licensing
Authority on complaints of irregularities in
the distribution of Essential Commodities?

(b) Whether the observation made
in Paragraph 35 of the Full Bench decision
in Puran Singh and others Vs. State of
U.P. and others (2010) 2 UPLBED 947
regarding holding of "full fledged enquiry"
after suspension of license can be read in
such a manner as would require the whole
gamut of steps required in disciplinary
proceedings of Government servants to be
followed?

2. The writ petition was filed by the
petitioner impugning the order dated
September 16, 2019 passed by Joint
Commissioner (Food), Lucknow Division,
Lucknow upholding the order dated April
4, 2019 passed District Supply Officer,
Lucknow cancelling fair price shop license
of the petitioner.

3. The grievance of the petitioner
raised before the appellate authority as well
as before this Court was that before
cancelling the fair price shop license of the
petitioner, no opportunity of hearing was
afforded.

4. Taking into consideration various
judgments cited by learned counsel for both
the parties, the Single Judge referred the
aforesaid questions for consideration by a
Larger Bench.

5. The facts, as have been recorded in
the reference order passed by learned
Single
Judge
are
being
noticed
hereinbelow, in brief.

6. The petitioner was a licensee of a
fair price shop of Alambagh in Lucknow
City. He distributed essential commodities
to various card-holders as per their
entitlement. On August 28, 2018, an F.I.R.
was registered against the petitioner under
Section 3/4 of Essential Commodities Act,
1955 at Police Station Alambagh, District
Lucknow. Immediately thereafter, District
Supply Officer vide order dated September
1, 2018 suspended the fair price shop
license of the petitioner and directed him to
submit
the
explanation.
The
F.I.R.
registered
against
the
petitioner
was
challenged by him by filing Writ Petition
No.25409 (MB) of 2018. The same was
dismissed as withdrawn but with certain
observations regarding investigation being
conducted in the matter.

7. The petitioner made a detailed
representation
against
the
order
of
suspension of his fair price shop license
dated September 1, 2018, on which
explanation was called for. It was alleged
that neither the reply of the petitioner was
considered nor any final order was passed.
The appeal was preferred before the
Commissioner challenging the suspension
of fair price shop license dated September
1, 2018. The same was disposed of vide
order dated January 31, 2019 directing
District Supply Officer to conduct an
4 All. Shanker Prasad Vs. State of U.P. & Ors.
897
enquiry in the matter and pass a speaking
order.

8. After the aforesaid order was
passed, a report was called from Regional
Food Officer, who vide his letter dated
February
25,
2019,
reported
certain
irregularities in the record of the petitioner.
The copy of the report was not given to
him. However, vide order dated April 4,
2019, fair price shop license of the
petitioner was cancelled. Against the
aforesaid order, the petitioner preferred an
appeal. The aforesaid appeal preferred by
the petitioner was dismissed by the
Appellate Authority, Joint Commissioner
(Food), Lucknow Division, Lucknow vide
order
dated
September
16,
2019.
Challenging the aforesaid orders, present
writ petition has been filed in this Court.

9. The issue has cropped up in view of
the fact that in quite a few decisions, the
learned Single Judges of this Court, have
opined that while dealing with an enquiry
regarding cancellation of fair price shop
license a full fledged enquiry is contemplated
which includes serving of the charge-sheet and
notifying the licensee of the place and date of
hearing during course of enquiry. Supply of
enquiry report has also been held to be sine
qua non. (See, Santara Devi Vs. State of U.P.
and others 2016 (2) ADJ 70) The aforesaid
decision of Santara Devi has been followed by
another Single Judge of this Court in Ansar
Khan Vs. State of U.P. & others 2018 (141)
RD 586. The other decisions which follow the
similar reasoning are Writ-C No.12737 of
2013 (Ashok Kumar Tiwari Vs. State of
U.P. and others) Writ Petition No.26319
(M/S) of 2019 (Vishwajeet Singh Vs. State
of U.P. and others)

10. On the other side is the decision
of another Single Judge of this Court in the
case of Meena Devi Vs. State of U.P. and
others 2018 (10) ADJ 385 wherein the
learned Single Judge considering the
challenge to an order by which fair price
shop license was cancelled, the Court
dismissed the writ petition, observing that a
fair price licensee is only an agent for
distribution of scheduled commodities
under public distribution system which has
been devised to help the poor and needy for
supply of subsidized food grains and since
such a licensee cannot claim any violation
of fundamental rights hence if a show cause
notice is given to the licensee and noticing
his reply and after affording an opportunity
of hearing if any order is passed, the same
would suffice and there is no violation of a
fundamental rights akin to Article 311 of
the Constitution of India.

11. Noticing the divide between the two
sets of opinions, the matter has been referred
as hereinabove noted for answering the two
questions as framed. Before answering the
aforesaid questions, it will be relevant to
notice the scheme as envisaged by help of the
relevant statutory provisions.

12. Since in the opinion of many
learned Single Judges, reference and reliance
has been placed on the Full Bench decision of
this Court in Puran Singh's case (supra),
thus, it will be apposite to notice the issue
before the Full Bench.

13. The question referred before the
Full Bench of Puran Singh's case (supra)
was whether before suspension of a fair price
shop licensee, an opportunity of hearing is
mandatory and on failure thereof, the
suspension order is liable to be set aside.

14.

Answering
the
aforesaid
reference, the Full Bench of this Court after
noticing the Scheme of the distribution of
898 INDIAN LAW REPORTS ALLAHABAD SERIES
essential commodities as well as the U.P.
Scheduled
Commodities
Distribution
Order, 2004 as well as the Government
Order dated 29.07.2004 in para 50 to 52 of
the said judgment held as under:-

"50. 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.

51. 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.

52. 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 v. State of U.P. reported in
2007 (1) ALJ 407 and Harpal v. State of
U.P. reported in 2008 (4) ALJ 10 holding
that opportunity is must does not lay down
the correct law."

15. Before proceeding further, it will
be relevant to note that Article 47 of the
Constitution of India contained in Part-IV
of
the
Constitution
under
Directive
Principles of State Policy provides that the
State shall regard the raising of the level of
nutrition and the standard of living of its
people and the improvement of public
health as among its primary duties and, in
particular, the State shall endeavour to
bring about prohibition of the consumption
except
for
medicinal
purposes
of
intoxicating drinks and of drugs which are
injurious to health.

16.
 After
the
country
gained
independence the Essential Commodities
Act, 1955 replaced the earlier legislation on
the subject i.e. Essential Commodities Act,
1915.

17. Section 3 of the Essential
Commodities Act, 1955 confers power to
control production, supply distribution etc.
of
essential
commodities.
It
is
in
furtherance thereof that the various State
Governments have been endevouring to
device
a
mechanism
for
effective
distribution of food grains and other
essential
articles
and
the
State
Governments in exercise of powers derived
from
Section
3
of
the
Essential
Commodities Act,
1955
have
issued
various distribution control orders which
have remained effective from time to time
in order to achieve the said object as
enshrined in Article 47 of the Constitution
of India.

18. In taking the Constitution
principles ahead the State of U.P. had
promulgated the Uttar Pradesh Scheduled
Commodities Distribution Order 1990
which rescinded the earlier Distribution
Order i.e. Uttar Pradesh food grains and
other Essential Articles Distribution Order,
1977. The Distribution Order 1990 in
Clause -3 envisaged the setting up of a fair
price shop and in Clause-4 it provided that
a fair price shop shall be run through such
4 All. Shanker Prasad Vs. State of U.P. & Ors.
899
person and in such manner as the Collector,
subject to the direction of the State
Government may order.

19. Significantly, it also clearly
provided that a person appointed to run a fair
price shop under sub-clause (1) of clause 4 of
the Distribution Order 1990 shall act as the
agent of the State Government. Clause 22 of
the Distribution Order 1990 also provided
that the agent shall observe such conditions
as the State Government or the Collector may
by an order in writing direct from time to
time in respect of opening of shop,
maintenance
of
stocks,
supply
and
distribution
of
scheduled
commodities,
maintenance
of
accounts,
keeping
of
accounts, filing returns and issue of receipts
to identity card holders and other matters.

20. This Distribution Order of 1990 was
superseded by the promulgation of Uttar
Pradesh Scheduled Commodities Distribution
Order 2004, which came into effect from
December 20, 2004. The instant Distribution
Order 2004 made qualitative changes to
ensure the effective maintenance of supplies
of
food
grains
and
other
essential
commodities and also securing their equitable
distribution and availability at fair prices.

21. Clause 4 which related to running
of a fair price shop was quite similar to the
Clause 4 of the Distribution Order of 1990.
However, it incorporated sub-clause (3) to
clause 4 and Clause 4 reads as under:-

"4. Running of fair price- (1) A
fair price shop shall be run through such
person and in such manner as the Collector,
subject to the directions of the State
Government may decide,

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

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

22. It also incorporated Clause 21
which related to monitoring in accordance
with the order issued by the State
Government amongst others. However, for
present matter at hand Clause 21 and 22 of
the said Distribution Order of 2004 are
relevant
and
are
being
reproduced
hereinafter for ready reference:-

21. Monitoring in accordance
with the order issued by the State
Government. -(1) A Food Officer shall
ensure regular inspection of fair price shop in
his area not less than once in a month in
urban area and not less than once in a month
in rural area by the supply inspector. The
State Government may issue order specifying
the inspection schedule, list of checkpoints
and authority responsible for ensuring
compliance of the said order.

(3)(i) Competent authority shall
ensure constitution of Vigilance Committees,
Administrative Committee (Gram Sabha
Level) at fair price shop which shall monitor
the functioning of the fair price shop.

(ii) Meeting of such Committees
shall be held on regular basis and in a manner
as directed by the State Government.

(4) Competent Authority shall
ensure a periodic system of reporting and the
complete information in this regard shall be
sent in the prescribed form as follows:

(i) By fair price shops to the
District Authorities by the 7th of the month
following the month for which allocation is
made in Form-A.
900 INDIAN LAW REPORTS ALLAHABAD SERIES

(ii) By the District Authorities to
State Government by 15th of the Month
following the month for which allocation is
made in Form-B.

(5) Competent authority shall
ensure that Scheduled Commodities are
made available to agents in accordance
with the roster prescribed by the State
Government in this regard.

(6) Monthly allocation of food
grains, sugar, kerosene and other Scheduled
commodities shall be supplied to the agent
only and that only on receipt of a
certificate,
issued
by
the
concerning
Vigilance
Committee,
Administrative
Committee duly countersigned by the
supply or Senior Supply Inspector or
Village Development Officer of the area
clearly mentioning that prior month's
allocations have been distributed by the
agent in accordance with the rules.

(7) Competent authority shall
ensure delivery of one copy of allocation
order
made
to
fair
price
shop
simultaneously to Gram Panchayat or
Nagar Palika or Nagar Nigam as the case
may be and Vigilance Committees or any
other body nominated for monitoring the
functioning of the fair price shops by the
State Government.

(8) Competent authority and Food
Officer
shall
check
the
diversion,
substitution or adulteration of Scheduled
Commodities.

22. Power of entry, search, seizure,
etc.-(1) The Food Officer, the Competent
Authority, the Senior Supply Inspector or
Supply
Inspector
may
within
his
jurisdiction with such assistance if any, as
he thinks fit

(a) Require the owner, occupier
or any other person in charge of any place,
premises, vehicles or vessels in which he
has reason to believe that any contravention
of the provisions of this order has been or is
being, or is about to be made, to produce
any book, account or other documents
showing transaction relating to such
contravention;

(b) Enter, inspect or break open
and search any place or premises, vehicle
or vessel in which he has reason to believe
that any contravention of the provisions of
this order has been or is being or is about to
be made,

(c) Examine and seize any books
of accounts and documents which in the
opinion of such officer may be useful for or
relevant to any proceeding under this order
and return such books of accounts and
documents to the person from whom they
were seized after copies thereof or extracts
therefrom as may be considered necessary
and certified by the person to be correct
have been taken:-

(d)
Seize
any
scheduled
commodities, if he is satisfied that there has
been in contravention of this order:

(e) Send a report as provided in
Section 6 (a) of the Act to the Collector of
the District in which such seizure is made
and the Collector may thereafter proceed to
confiscate the scheduled commodities,
animals,
vehicles,
vessels
or
other
conveyance so seized in accordance with
the provisions of the Act.

(2) The provisions of Section 100
of the Code of Criminal Procedure, 1973
(Act No 2 of 1974) relating to search shall
as far as may apply to search under this
clause.

23. It is in furtherance thereof the
State
Government
issued
various
Government
Order
for
effective
implementation of the scheme as well as to
ensure equitable distribution of the food
grains and essential commodities at fair
4 All. Shanker Prasad Vs. State of U.P. & Ors.
901
prices. In order to ensure effective checks
and balances one such Government Order
was issued on July 29, 2004.

24. The legal position relating to
licensee of fair price shop remained
covered by the aforesaid Distribution Order
of 2004 and the relevant Government
Orders issued from time to time. However,
then came the National Food Securities
Act, 2013. The said Act came into effect
from September 10, 2013 and was
introduced as an Act to provide for food
and nutritional security in human life cycle
approach, by ensuring access to adequate
quantity of quality food at affordable prices
to people to live a life with dignity and for
matters connected therewith or incidental
thereto.

25. This Act also envisaged running
of fair price shop but also introduced the
concept of identifying eligible house holds.
The State of U.P. in exercise of powers
under Section 40 of the National Food
Security Act, 2013 framed the Uttar
Pradesh State Food Security Rules, 2015.
This advent made by the State Government
led to the promulgation of the Uttar
Pradesh
Essential
Commodities
(Regulation of Sale and Distribution
Control) Order 2016 which came into effect
from August 10, 2016. Clause 19 of the
Control Order of 2016 repelled the
Distribution Order 2004.

26. In the Control Order of 2016 a
mechanism was deviced for appointment and
regulation of fair price shop. Clause-8
provides a detailed mechanism for operation
of fair price shops which also includes
conferring powers on the competent authority
to suspend or cancel their fair price shop
owner's license. Clause 8 of the Distribution
Order of 2016 is being reproduced herein
after for ready reference:-

8. Operation of fair price shop:-
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 entitlements of food grains in more
than one installment:-

(iii) the fair price shop owner shall
not retain the ration cards after the supply of
food grains.

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

(i) sale of food grains 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 food grains received during
the month, (f) opening and closing stock of
food grains, (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 number.

(iv) display of samples of food
grains being supplied through the fair price
shop,
902 INDIAN LAW REPORTS ALLAHABAD SERIES

(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 detail
description of receipt of food grain and
other
essential
commodities
actual
distribution
during
the
month
and
remaining balance of stock to designated
officer who will sent a compilation of all
each
certificates
under
his
area
of
appointment to the competent authority:

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

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

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

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

(7) The Competent authority shall
take prompt action in respect of violation of
any condition of license including any
irregularity committed by the fair price
shop owner, which any include suspension
or cancellation of the fair price shop
owner's license.

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

27. This Control Order of 2016 also
introduced a mechanism to monitor the
functioning of the fair price shops and
effective measure for transparency and
accountability.

28. From the perusal of the aforesaid
provisions, it would indicate that even
under the Control Order of 2016 a person
appointed to run a fair price shop under
clause-7 is required to enter into an
agreement with the State Government. It
would further indicate that sub-clause (4)
of Clause-8 of the Control Order, 2016 also
lays down the duties and responsibilities of
the fair price shop owner which includes
the duty to display information regarding
the entitlement of the food grains, sale of
4 All. Shanker Prasad Vs. State of U.P. & Ors.
903
issue, timings or opening and closing of the
fair price shop, stock of food grains
received during the month, opening and
closing stock of the food grains amongst
other. The record are required to be
maintained including in electronic format,
It has also cast a duty on the competent
authority to take action in respect of
violation made by the licensee including or
any irregularities committed and the power
to take action against such violation and
irregularities include empowers to suspend
or cancell the license. It also envisages that
an enquiry instituted for irregularities
committed by a fair price shop owner shall
be concluded maximum within a period of
two months. An order passed against the
appointment, suspension and cancellation
of a fair price shop by the competent
authority
is
appealable
before
the
Divisional Commissioner which is also
required to be disposed of within a period
of 60 days.

29. In the aforesaid backdrop, it will
be seen that prior to promulgation of the
Control Order of 2016 and while the
Distribution
Order
of
2004 was
in
operation primarily three
Government
Orders issued by the State Government; (i)
dated 29th of July, 2004; (ii) 16th of
October, 2014; and (iii) 15th/16th of
December, 2015 were holding the field.

30. The Government Order of 29th of
July, 2004 provided a procedure relating to
suspension and cancellation of the license
of a fair price shop owner and the relevant
Clause 2, 3, 4, 5, 6 and 7 are relevant which
reads as under:-

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

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

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

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

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

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

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

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

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

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

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

32. Clause 4 of the Government Order
of July 2004 also provides that the enquiry
in respect of suspended fair price shop must
be completed within a period of one month
after affording full opportunity of hearing
to the licensee concerned. It also envisages
that the licensee is under responsibility to
co-operate in the early hearing and
conclusion of the enquiry and in case the
licensee does not co-operate or attempts to
4 All. Shanker Prasad Vs. State of U.P. & Ors.
905
delay then he can also be issued with a
notice to the aforesaid effect by requiring
him to furnish his reply as a last
opportunity. The competent authority is
required to conclude the enquiry within a
period of one month and to give his
decision by a speaking order.

33. At this stage, it will be relevant to
notice that the aforesaid Government Order
of July 2004 came up for consideration
before a Full Bench of this Court in Puran
Singh and others Vs. State of U.P. and
others (2010) 2 UPLBEC 947. The Full
Bench was required to answer the question
before it: (i) 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?
(ii) Whether the Division Bench Judgment
in 2007 (1) ALJ 407 Pramod Kumar Vs.
State of U.P. and others and 2008 (4)
ALJ 10 Har Pal Vs. State of U.P. and
others lay down the correct law that
opportunity is must or whether the Division
Bench in Gopi's case lays down the correct
law.

34. In the aforesaid backdrop the Full
Bench noticed that the Distribution Order
of 2004 so also the Government Order
dated 29th of July, 2004 and in para 50 of
the said judgment, it answered the question
in the negative as already noticed in the
former part of this opinion.

35. From the perusal of the decision
of the Full Bench it is evident that it is not
mandatory to give an opportunity of
hearing before an order of suspension of
licensee is passed nor does its violation
affect the validity of the suspension order
simplicitor on the ground of having been
passed without granting an opportunity of
hearing. It also held that the Division
Bench Judgment of Pramod Kumar
(supra) and Harpal (supra) does not lay
down the correct law.

36. In para 45 of the Full Bench
decision it was held that the grant of fair
price shop license does not fall within the
category of fundamental right to carry on
business as provided in Article 19 (1)(g) of
the Constitution of India. Para 45 reads as
under:-

"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 Article
19(1)(g) of the Constitution of India."

37. Incidentally while considering the
questions as noticed above, the Full Bench
in para 35 has observed as under:-

"35.