APHC010573332023 IN THE HIGH COURT OF ANDHRA PRADESH TUESDAY, THE TWENTY FOURTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION NO: Between: 1. DARLA BRAHMHANDA RAO, S/O THIRUPAL, AGED ABOUT 53 YEARS, PENUMAKA VILLAGE TADEPALLI MANDAL, GUNTUR DISTRICT. 1. THE STATE OF AP, REP. BY ITS SECRETARY, CONSUMER.AFFAIRS AND CIVIL SUPPLIES DEPARTMENT, SECRETARIAT BUILDINGS, VELAGAPUDI, AMARAVATHI, GUNTUR DISTRICT. 2. THE COLLECTOR CS, GUNTUR, GUNTUR DISTRICT 3. THE SUBCOLLECTOR, TENALI, GUNTUR DISTRICT 4. THE TAHSILDAR, TADEPALLI, GUNTUR DISTRICT 5. THE DEPUTY TAHSILDAR PDS, , MANGALAGIRI, GUNT DISTRICT 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 order or direction, more particularly one in writ of Mandamus, declaring the action of the 3rd Respondent in imposing penalty of Rs. 1,00,000/- 2023 without conducting any enquiry is illegal, arbitrary and violation of IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) THE TWENTY FOURTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION NO: 29643/2023 DARLA BRAHMHANDA RAO, S/O THIRUPAL, AGED ABOUT 53 YEARS, PENUMAKA VILLAGE TADEPALLI MANDAL, GUNTUR ...PETITIONER AND THE STATE OF AP, REP. BY ITS SECRETARY, CONSUMER.AFFAIRS AND CIVIL SUPPLIES DEPARTMENT, SECRETARIAT BUILDINGS, VELAGAPUDI, AMARAVATHI, GUNTUR THE COLLECTOR CS, GUNTUR, GUNTUR DISTRICT THE SUBCOLLECTOR, TENALI, GUNTUR DISTRICT THE TAHSILDAR, TADEPALLI, GUNTUR DISTRICT THE DEPUTY TAHSILDAR PDS, , MANGALAGIRI, GUNT ...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 order or direction, more particularly one in writ of Mandamus, declaring the action of the 3rd Respondent in imposing - rupees by his proceeding RC. 594/2023 2023 without conducting any enquiry is illegal, arbitrary and violation of IN THE HIGH COURT OF ANDHRA PRADESH [3332] THE TWENTY FOURTH DAY OF FEBRUARY THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI DARLA BRAHMHANDA RAO, S/O THIRUPAL, AGED ABOUT 53 YEARS, PENUMAKA VILLAGE TADEPALLI MANDAL, GUNTUR ...PETITIONER THE STATE OF AP, REP. BY ITS SECRETARY, CONSUMER.AFFAIRS AND CIVIL SUPPLIES DEPARTMENT, SECRETARIAT BUILDINGS, VELAGAPUDI, AMARAVATHI, GUNTUR THE DEPUTY TAHSILDAR PDS, , MANGALAGIRI, GUNTUR ...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 order or direction, more particularly one in the nature of writ of Mandamus, declaring the action of the 3rd Respondent in imposing rupees by his proceeding RC. 594/2023-A dt.12-05- 2023 without conducting any enquiry is illegal, arbitrary and violation of 2 principals of natural justice and consequently set aside the same and to pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case and to pass IA NO: 1 OF 2023 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 suspend RC. 594/2023-A dt.12-05-2023 issued by N-P the 3rd respondent by continuing the petitioner as FP Shop Dealer of Shop 0711001 of Penumaka Village, Krishna District, pending disposal of the writ petition, and pass IA NO: 1 OF 2024 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 vacate the Interim order dated 16.11.2023 passed in lA.No.1 of 2023 in W.P.No. 29643 of 2023 and pass Counsel for the Petitioner: 1. K SRINIVAS Counsel for the Respondent(S): 1. GP FOR CIVIL SUPPLIES 3 The Court made the following order: The grievance of the petitioner is that without conducting any enquiry, respondent No.3-Sub-Collector & Sub-Divisional Magistrate, Tenali vide Rc.594/2023-A dated 12.05.2023 imposed a penalty of Rs.1,00,000/- on the petitioner for the alleged irregularities said to have been committed by him in distribution of Essential Commodities to the cardholders of Fair Price shop No.0711001. 2. Heard Sri K.Srinivas, 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 respondent No.3 issued a show cause notice dated 20.03.2023 to the petitioner alleging irregularities with regard to variation of stock, for which the petitioner submitted his explanation denying all allegations in the said show cause notice and stating that he was lacking adequate accommodation to take delivery of the regularly allotted stock to his shop, therefore, he kept the stock temporarily in a nearby house and subsequently the said stock (i.e., supplied under PMGKY) were converted into regular allotment of sortex by naming it as fortified rice and the stock being distributed for the month of March 2003 was allotted after deducting the quantity available with petitioner under fortified rice. However, without considering the said explanation, a criminal case was filed against the 4 petitioner and the Civil Supplies Deputy Tahsildar was directed to conduct a personal inspection to verify whether additional rice bags were available in the nearby house as stated by the petitioner. He further submitted that the petitioner filed Writ Petition No.6800 of 2023, wherein respondent No.4 was instructed to take appropriate action with a direction to continue the supply of essential commodities to the petitioner and report compliance. He further submitted that respondent No.5-Deputy Tahsildar submitted a report stating that respondent No.4 had personally inspected the petitioner’s Fair Price shop and identified 52 bags of rice in an unauthorized old building located at a distance of about 20 feet from the shop. He further submitted that respondent No.3 directed the petitioner to attend personal hearing on 12.05.2023 and on the same date, the petitioner attended for hearing before respondent No.3, however, no opportunity was given to him and the impugned order was passed after merely receiving his written explanation. He further submitted that without considering the explanation given by the petitioner, without conducting any enquiry except recording the statement of the house owner and without waiting for the result of the proceedings under Section 6-A by respondent No.2, respondent No.3 imposed a penalty of Rs.1,00,000/- by framing charges under clause 22(1) of Control Order 2018. Hence, the impugned proceedings are illegal, unsustainable and in violation of principles of natural justice. 4. On the other hand, learned Assistant Government Pleader, while justifying the impugned order, on counter, contended that the inspecting 5 officers did not accept the statement given by the petitioner at the time of inspection and came to the conclusion that the petitioner had failed to distribute the stocks to the cardholders properly through MDU operator which lead to variation in stock and that the petitioner had diverted the stock into black market for his personal gain. Taking into consideration the above lapses, respondent No.3 levied a penalty of Rs.1,00,000/- on the petitioner with a warning to be more careful in future while distributing the stocks to the cardholders. He further submitted that by virtue of 21 (c) of the Control Order, 2018, the authority is empowered to impose a penalty to ten times the difference between the market rate and Targeted Public Distribution System (TPDS) rate of the commodity thus diverted. In view of the said clause, the petitioner cannot find fault with the impugned order. He further submitted that a notice dated 20.03.2023 was issued to the petitioner and in response thereto, the petitioner submitted his written explanation on 28.03.2023. On 05.04.2023, the Civil Supplies Deputy Tahsildar was directed to conduct a personal inspection and accordingly, inspection was conducted, during which it was noticed that 52 rice bags were kept in an unauthorized house. He further submitted that, pursuant to the orders of this Court dated 11.04.2023 in Writ Petition No.6800 of 2023, the commodities and the ePOS machine were handed over to the petitioner under proper acknowledgment. He further submitted that the petitioner was directed to attend personal hearing on 12.05.2023 and accordingly he attended the hearing and submitted his written explanation, wherein he admitted that he sold 5 - 10 bags of PDS rice 6 frequently to labourers and others who have no ration cards and requested that as he belongs to below poverty line, the omission may be treated as his first mistake and further action may be dropped. He further submitted that ample opportunity of hearing was given to the petitioner and taking into consideration the above lapses and as per Clause 21 (c) APSTPDS (Control) Order 2018, a penalty of Rs.1,00,000/- was levied on the petitioner towards the irregularities committed by him. However, the petitioner has not paid the said penalty till date and is continuing as a Fair Price shop dealer. He further submitted that without preferring an appeal before the Joint Collector, Guntur, the petitioner filed the present Writ Petition with unclean hands. Hence, prayed to dismiss the Writ Petition. 5. Perused the material available on record and considered the submissions made by learned counsel for the parties. 6. As culled out from the material available on record and the submissions made by learned counsel for the parties, a show cause notice was issued by respondent No.3 asking the petitioner to submit his explanation as to why the authorization of the petitioner should not be suspended. Perusal of the show cause notice indicates that the authorities noticed certain variations in the stock and consequently a case under Section 6-A of the Essential Commodities Act was initiated against the petitioner and the stock was seized from the petitioner’s Fair Price shop. In the said show cause notice, it is also mentioned that the Civil Supplies Deputy Tahsidlar recommended initiation of 7 necessary disciplinary action against the petitioner and upon prima facie evidence of irregularities in the Fair Price shop and shortage in the quantity of commodities and on finding that the explanation of the dealer was not satisfactory, the said show cause notice came to be issued. Admittedly, no notice has been issued for cancellation of petitioner’s authorization. To the said show cause, the petitioner submitted his explanation dated 12.05.2023. After considering the explanation and the material on record, respondent No.3 invoking clause 21 (c) of APSTPDS (Control Order), 2018 imposed a penalty of Rs.1,00,000/- 7. In this regard, Clause 21(c) of APSTPDS (Control Order), 2018 is extracted hereunder for quick reference: 21. Penalties for possessing cards, making false entries or diverting stock: Notwithstanding anything contained in this Order:- (a) xxx (b) xxx (c) If any fair price shop dealer diverts PDS stock either wholly or partly, the dealer shall be liable for cancellation of authorization besides penalty ten times the difference between the market rate and Targeted Public Distribution System rate of the commodity thus diverted. 8. Perusal of the said Control Order, 2018 indicates that Clause 21 (c) applies where the dealer diverts the stock, either, wholly or partly, in which case the dealer is liable for cancellation of authorization in addition to the penalty. However, that is not the case on hand. When the authority has not 8 proceeded with the cancellation of the petitioner’s authorization, it cannot invoke Clause 21 (c) of the Control order to impose penalty. 9. In view of the above facts and circumstances of the case and taking into consideration the submissions made by learned counsel for the parties, imposing penalty of Rs.1,00,000/- upon issuance of show cause notice for suspension of petitioner’s authorization is unsustainable and contrary to the provisions of the A.P. State TPDS (Control) Order, 2018, and, therefore, the same is liable to be set aside. 10. Accordingly, the Writ Petition is disposed of setting aside the proceedings of respondent No.3 vide Rc.No.594/2023-A dated 12.05.2023. However, this order shall not preclude the respondent authorities from taking appropriate steps in accordance with law. 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 24.02.2026 MP 9 250 THE HON’BLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION NO.29643 of 2023 24.02.2026 MP