APHC010498652022 IN THE HIGH COURT OF ANDHRA PRADESH THURSDAY, TWO THOUSAND AND TWENTY SIX THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION NO: 30746/2022 Between: 1. SMT. BIKKI SRILATHA, S/O VENU, AGED 34 YEARS, OCC FAIR PRICE SHOP DEALER, R/O IRLAPADU VILLAGE, SAVALYAPURAM MANDAL, GUNTUR DISTRICT. 1. THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPAL SECRETARY, CIVIL SUPPLIES AMARAVATHI, GUNTUR DISTRICT. 2. THE JOINT COLLECTOR AND ADDL DISTRICT MAGISTRATE, GUNTUR, GUNTUR DISTRICT. 3. THE REVENUE DIVISIONAL OFFICER, NARASARAOPET, GUNTUR DISTRICT. 4. THE TAHSILDAR, SAVALYAPURAM MANDAL, GUNTUR DISTRI Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ Order or direction, declaring the imp 08-2022 on the file of the Revenue Divisional Officer, Narasaraopet, as illegal, arbitrary and also violative of natural justice and pass IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) THURSDAY, THE FIFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION NO: 30746/2022 SMT. BIKKI SRILATHA, S/O VENU, AGED 34 YEARS, OCC FAIR PRICE SHOP DEALER, R/O IRLAPADU VILLAGE, SAVALYAPURAM MANDAL, GUNTUR DISTRICT. ...PETITIONER AND THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPAL SECRETARY, CIVIL SUPPLIES DEPARTMENT, VELAGAPUDI, AMARAVATHI, GUNTUR DISTRICT. THE JOINT COLLECTOR AND ADDL DISTRICT MAGISTRATE, GUNTUR, GUNTUR DISTRICT. THE REVENUE DIVISIONAL OFFICER, NARASARAOPET, GUNTUR THE TAHSILDAR, SAVALYAPURAM MANDAL, GUNTUR DISTRI ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ Order or direction, declaring the impugned proceedings Rc.No.2203/2022 2022 on the file of the Revenue Divisional Officer, Narasaraopet, as illegal, arbitrary and also violative of natural justice and pass IN THE HIGH COURT OF ANDHRA PRADESH [3332] THE FIFTH DAY OF FEBRUARY THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI SMT. BIKKI SRILATHA, S/O VENU, AGED 34 YEARS, OCC FAIR PRICE SHOP DEALER, R/O IRLAPADU VILLAGE, SAVALYAPURAM ...PETITIONER THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPAL DEPARTMENT, VELAGAPUDI, THE JOINT COLLECTOR AND ADDL DISTRICT MAGISTRATE, THE REVENUE DIVISIONAL OFFICER, NARASARAOPET, GUNTUR THE TAHSILDAR, SAVALYAPURAM MANDAL, GUNTUR DISTRICT. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ Order or ugned proceedings Rc.No.2203/2022-G dated 30- 2022 on the file of the Revenue Divisional Officer, Narasaraopet, as illegal, 2 IA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the impugned proceeding Rc.No.2203/2022-G dated 30-08-2022 on the file of the Revenue Divisional Officer, Narasaraopet, pending disposal of the above writ petition and pass such other orders as deemed fit and proper in the facts and circumstances of the case. Amaravathi Counsel for the Petitioner: 1. D KRISHNA MURTHY Counsel for the Respondent(S): 1. GP FOR CIVIL SUPPLIES 3 The Court made the following order: Challenging the proceedings of the Revenue Divisional Officer in Rc.No.2203/2022-G dated 30.08.2022, by which the authorization of the petitioner’s Fair Price Shop bearing No.074205A of Irlapadu Village, Ipuru Mandal, Guntur District, was cancelled, the present Writ Petition is preferred. 2. Heard Sri S.Sri Harsha, learned counsel, representing Sri D.Krishna Murthy, learned counsel for the petitioner and Sri Vineeth Appasani, learned Assistant Government Pleader for Civil Supplies appearing for the respondents. 3. Learned counsel for the petitioner, in elaboration to what has been stated in the affidavit, contended that the petitioner was duly appointed as Fair Price shop dealer on permanent basis for the subject shop. However, based on false and incorrect reports submitted by the Deputy Tahsildar, proceedings were initiated despite there being no actual stock variation or irregularities in the shop. The alleged stock variation of 46.47 kgs of sugar was wrongly reflected in the inspection report dated 06.01.2020. The Mediator reports prepared on 21.05.2020 and 2.05.2020 did not disclose any stock variation. Though a criminal case in C.C.No.226 of 2020 was registered against the petitioner under Section 420 of Indian Penal Code and Section 7 of Essential Commodities Act, 1955, the petitioner was acquitted of all charges by judgment dated 06.04.2022. He further submitted that the entire case is based 4 on the statements allegedly recorded from the cardholders, however, none of the cardholders were examined. He further contended that unless and until the cardholders are examined and an opportunity of cross examination is afforded to the petitioner, the true facts will not come. He further contended that without conducting any enquiry, without furnishing the inspection report to the petitioner, without considering the explanation submitted by the petitioner and without assigning any valid reasons, the impugned cancellation order was passed and thereby violating the principles of natural justice. Hence, prayed to allow the Writ Petition by setting aside the impugned order. 4. On the other hand, learned Assistant Government Pleader, while justifying the impugned order, contended that there is neither illegality nor procedural irregularity in issuing the impugned proceedings. The petitioner was involved in proceedings under Section 6-A of the Essential Commodities Act and accordingly his authorization was suspended. Thereafter the petitioner approached this Court and obtained interim orders, however, even subsequent thereto, he continued to divert the stock and sell the same in the black market. He further submitted that the statements of the cardholders were recorded and only thereafter authorization was cancelled. In the said circumstances, the petitioner cannot be permitted to question the impugned proceedings. He further submitted that the contention of the petitioner that the cardholders were not examined was never pleaded in the affidavit filed in support of the petition and is being urged for the first time across the Bench. He further submitted that in the event this Court is inclined to interfere, liberty 5 may be granted to the authorities to conduct fresh enquiry in accordance with law. 5. Perused the material available on record and considered the submissions made by learned counsel for the parties. 6. Perusal of the impugned proceedings shows that the Joint Collector issued show cause notice framing the following two charges 1) that the dealer failed to distribute the stocks to the cardholders properly diverted the stocks into black market and has been selling at higher rates for personal gain 2) that while diverting the PDS rice into Black market, the Sub-Inspector of police, Saalyapuram booked a case in F.I.R.No.59/2020. In response to the said show cause notice, the petitioner submitted her explanation, however respondent No.3 stated that the explanation submitted by the petitioner is not convincing. 7. Perusal of record shows that based on the report submitted by the Deputy Tahsildar, Vinukonda, respondent No.3 initiated proceedings under Section 6-A of the Essential Commodities Act and recommended to the Joint Collector that disciplinary action be taken against the petitioner. The record further shows that Criminal Case vide C.C.No.226 of 2020 filed against the petitioner was ended in acquittal. 8. It is the contention of learned Assistant Government Pleader that on credible information, the inspecting authority conducted inspection and found 6 that the petitioner was selling PDS rice in the black market. He further contended that the cardholders were examined in that regard and their statements substantiate the said allegations. 9. Once the statements of the cardholders were recorded and proceedings initiated, the authorities have to examine them in the presence of the petitioner and to provide her an opportunity of cross examination. However, the same was not done, which constitutes a clear violation of the principles of natural justice. 10. The Division Bench of this Court in B.Manjula Vs. District Collector1, observed as follows:- “10. An enquiry pre-supposes an opportunity of personal hearing to the dealer to explain his/her case based on the records such as sales and stock registers. If need be, such enquiry must also include recording the sworn statement of the dealer and witnesses, if any, from his/her side. In cases where either card holders or other persons sent any complaint, they must also be examined in the presence of the dealer or his/her lawyer and the dealer shall be given an opportunity of cross- examining such persons. The licencing /disciplinary authority shall also supply to the dealer all the reports on which he is likely to place reliance to the detriment of the dealer. Unless the dealer has no explanation at all to offer, the licensing/disciplinary authority is bound to hold a detailed enquiry. 11. The experience of this Court reveals that the appointing authorities of fair price shop dealers are dispensing with the requirement of making personal enquiry by summoning the dealers. They are merely relying upon the reports sent by their subordinates i.e., Deputy Tahsildars and Tahsildars, behind the back of the dealers and resting their decisions solely upon those reports. This procedure is anathema to the concept of 1 2015(3) ALD 617 7 enquiry which otherwise means affording the dealer an opportunity of a fair hearing. 12. The experience of this Court reveals that the appointing authorities of fair price shop dealers are dispensing with the requirement of making personal enquiry by summoning the dealers. They are merely relying upon the reports sent by their subordinates i.e., Deputy Tahsildars and Tahsildars, behind the back of the dealers and resting their decisions solely upon those reports. This procedure is anathema to the concept of enquiry which otherwise means affording the dealer an opportunity of a fair hearing. As regards the second mandatory requirement under sub-clause (5) of Clause 5, namely; reasons to be recorded in writing, reasons constitute the heart and soul of a decision. In Madhya Pradesh Industries Ltd. Vs. Union of India and others , the Supreme Court, while dealing with an order passed by the Central Government under Rule 55 of the A.P. Mineral Concession Rules 1960, emphasized on the need for giving reasons in support of the order. The Supreme Court inter alia held that the condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory Court to keep the Tribunals within bounds. 13. In G. Vallikumari Vs. Andhra Education Society and others, the Supreme Court, at para-19, held: The requirement of recording reasons by every quasi- judicial or even an administrative authority entrusted with the task of passing an order adversely affecting an individual and communication thereof to the affected person is one of the recognized facets of the rules of natural justice and violation thereof has the effect of vitiating the order passed by the authority concerned. 15. Unfortunately, a perusal of the impugned order shows that respondent No.3 has not even attempted to hold an enquiry and he has allowed himself to be swayed away by the report of the Tahsildar, Gonegandla without trying to test the veracity of the explanation offered by the petitioner. Unless the petitioner is given an opportunity of substantiating 8 her explanation, it would be a grave travesty of justice to reject her explanation without holding an enquiry. As respondent No.3 has not followed this procedure, the impugned order cannot be sustained and the same is accordingly set-aside. The orders of respondent Nos.2 and 1, which confirmed the order of respondent No.3 are also set-aside. The fair price shop authorization of the petitioner stands restored and she shall be permitted to function as the fair price shop dealer. This order, however, will not prevent respondent No.3 from holding a detailed enquiry in the light of the observations made hereinbefore and pass a fresh order. 11. The Division Bench of this Court in M.Kalyani v. District Collector, Prakasam District, Ongole and Others2, held that:- “In our opinion, the order passed by respondent No. 3 cancelling the authorization of the appellant suffers from patent violation of the rules of natural justice and the learned Single Judge gravely erred by refusing to annul the same. It is not in dispute that the report of the Mandal Revenue Officer, which formed the basis of the charges, was not supplied to the appellant. In K. Radha Krishna Naidu v. Director of Civil Supplies, Hyderabad and Ors. 1996 (1) ALD 473 : 1996 (1) LS 456 (AP), it was held that the primary report on the basis of which the charges were framed by the Licensing Authority against the dealer, being not furnished to the dealer, vitiates the proceedings due to violation of the principles of natural justice and absence of sufficient opportunity to the dealer to defend his case effectively. It was further held that the reasonable opportunity should be real and effective and simply because the petitioner submitted his explanation, it does not fulfill the requirement of reasonable opportunity, more so, when the show-cause notice would clearly indicate that the only basis is the report. In that case the petitioner therein had been given opportunity of personal hearing but even then the Court held that the opportunity was not real inasmuch as the basic document had not been supplied to the dealer. In S. Malla Reddy v. M. Vijayalakshmi and Others, 2005 (3) ALT 100=2005 (5) ALD (NOC) 174, this Court held that the 2 2006 (5) ALD 796 9 authorization of fair price shop could not have been cancelled on the basis of vague notice.” 12. In view of the foregoing discussion and applying the principles in the law laid down supra to the present facts of the case, Since violation of principles of natural justice is apparent on the face of the impugned proceedings, this Court, without expressing any opinion on the merits, is of the view that the matter requires fresh consideration by respondent No.3 after strictly adhering to the principles of natural justice. 13. Accordingly, the writ petition is allowed by setting aside the proceedings of respondent No.3-Revenue Divisional Officer, Narasaraopet in Rc.No.2203/2022-G dated 30.08.2022. The matter is remanded to respondent No.3 for fresh consideration and for passing a reasoned order in accordance with law, after affording the petitioner an opportunity of personal hearing and also allowing her to cross examine the cardholders. Till such time, the interim order granted by this Court dated 21.09.2022 shall continue. There shall be no order as to costs. As a sequel thereto, interlocutory applications pending, if any in the Writ Petition, shall also stand closed. ____________________________ JUSTICE RAVI CHEEMALAPATI 05.02.2026 MP 10 247 THE HON’BLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION NO.30746 of 2022 05.02.2026 MP