Sreerag S S/O Sreekantan Nair v. State of Kerala Represented By The Sectetary, Department of Electronics And Information Technology
2026-04-10
P Krishna Kumar, Sathish Ninan
body2026
DailyLaw.ai
JUDGMENT : P.Krishna Kumar, J. 1. In this intra-court appeal, the appellant assails the judgment dated 25.02.2026 rendered by the learned Single Judge in W.P.(C) No.31134 of 2025, by which the Court declined to interfere with the cancellation of the licence to operate an Akshaya Centre and the rejection of the application seeking transfer of the said licence. 2. The appellant was a duly licensed Akshaya Centre Entrepreneur (ACE) and had been operating an Akshaya Centre at Karakkonam, Thiruvananthapuram, pursuant to Ext.P1 agreement dated 13.02.2014. The agreement was renewed periodically, the last of such renewals being the agreement dated 15.06.2022 (Annexure A1). The writ petition was instituted challenging Ext.P9 order, by which the third respondent cancelled the appellant’s licence and further rejected the application for its transfer to a third party. The brief facts leading to the issuance of Ext.P9 are as follows. The appellant was found absent during a surprise inspection conducted by the District Office of the Akshaya Project, and consequently, the fourth respondent/District Collector temporarily suspended his licence as per Ext.P2 order. In Ext.P2, the fourth respondent observed that, upon receipt of a complaint against the appellant, an opportunity of hearing had been afforded, but the appellant failed to appear. It was further noted that, during the surprise inspection, the appellant was found to be working at a mobile service centre without attending to the Akshaya Centre. The appellant challenged the suspension order before this Court by filing W.P.(C) No.19864/2024. 3. Pursuant to the directions of this Court in the said writ petition, the fourth respondent conducted a personal hearing of the appellant and issued Ext.P4 order, granting him a final opportunity to operate the Centre subject to certain conditions, namely: that he should be present in the Centre during its working hours; that he should not engage in any other employment that would adversely affect the functioning or goodwill of the Centre; and that, apart from the appellant, the prior licensee should not be involved in the operations of the Centre. Thereafter, as part of the State-wide lightning inspection conducted by the Vigilance Department under the title “Operation E-Seva”, a further surprise inspection was carried out at the Centre, during which also the appellant was found absent.
Thereafter, as part of the State-wide lightning inspection conducted by the Vigilance Department under the title “Operation E-Seva”, a further surprise inspection was carried out at the Centre, during which also the appellant was found absent. A follow-up inspection conducted by the Block Co-ordinator on 08.07.2024 revealed that the appellant was absent on that day as well and was continuing his work at the mobile servicing centre. Consequently, the District Collector recommended cancellation of the appellant’s entrepreneurship, and, accordingly, the third respondent issued Ext.P9 cancelling the same. Prior to that, the appellant had submitted Ext.P8 application seeking transfer of the Akshaya Centre licence in favour of Smt.Panchami R.J., one of the staff members of the Centre. By Ext.P9 order, the said request was also rejected. 4. Upon taking note of the conditions contained in Ext.P9/Annexure A1 agreement and various other aspects referred to in the impugned order, the learned Single Judge concluded that, despite being afforded opportunities to mend his conduct, the appellant continued to remain absent from the Centre. It was further found that the impugned order had been passed after affording an opportunity of hearing and upon due consideration of the materials on record. Consequently, it was held that no grounds were made out to warrant interference under Article 226 of the Constitution of India . It was also observed that the application for transfer of the licence could not be claimed as a matter of right, particularly in the circumstances in which the licence had been cancelled. 5. We have heard Sri Manas P. Hameed, learned counsel appearing for the appellant, and Sri K.P.Harish, learned Senior Government Pleader appearing for the respondents. 6. The learned counsel appearing for the appellant raised the following contentions to assail Ext.P9 order: (a) As per sub-clauses (iii) and (v) of Clause (F) of Ext.P1 original agreement executed between the appellant and the Government of Kerala, the agreement could be terminated by the District Collector only on the basis of a resolution of the Local Body, and the entrepreneur was entitled to prefer an appeal against such decision before the Director, Kerala State IT Mission within 30 days of termination. However, in the present case, the decision to terminate the entrepreneurship of the appellant was taken by the Director, Akshaya State Project Office, who is also the Director, IT Mission. Consequently, the appellant was deprived of the appellate remedy.
However, in the present case, the decision to terminate the entrepreneurship of the appellant was taken by the Director, Akshaya State Project Office, who is also the Director, IT Mission. Consequently, the appellant was deprived of the appellate remedy. Since the Director of the Akshaya Centre acted as the original authority, albeit on the recommendation of the District Collector, the appellant’s valuable right of appeal stood effectively extinguished, rendering Ext.P9 liable to be set aside on that ground. (b) Though an arbitration clause is incorporated in Annexure A1 contract, with the IT Secretary designated as the Arbitrator, the said clause is contended to be illegal and unsustainable. As such, the appellant is effectively precluded from invoking the arbitral mechanism. Further, the existence of the arbitration clause practically bars recourse to the civil court, thereby leaving the appellant without an efficacious alternative remedy. (c) Despite the submission of Ext.P6 reply to the allegations levelled against the appellant, the impugned order is conspicuously silent regarding the explanation offered. Relying on the law laid down in Jai Prakash Saini v. Managing Director, U.P. Co-operative Federation Ltd. & Ors. , (2026 SCC Online SC 505), it is contended that the appellant ought to have been afforded an opportunity to cross-examine the persons who made the allegations, as otherwise he is deprived of a meaningful opportunity to establish his factual defence. 7. It is true that Ext.P1, as well as the subsequent agreement Annexure A1, executed between the appellant and the Government, contains a provision enabling the District Collector to terminate the agreement on the basis of a resolution by the Local Body. However, by G.O. (K-AI) No.24/2021/ITD dated 30.07.2021, the Government has specifically prescribed a distinct procedure for cancellation of licence or agreement of an Akshaya Centre. It reads as follows :- The Chief Co-ordinator is the District Collector. The impugned action was taken by the Director on the basis of the recommendation of the District Collector. This constitutes due compliance with the procedure prescribed. 8. Though the learned counsel for the appellant contended that Annexure A1 agreement, having been executed subsequent to the aforesaid Government Order, still retains sub-clauses (iii) and (iv) of Clause (F), thereby indicating that the Government is bound to follow the contractual procedure rather than the one prescribed in the Government Order dated 30.07.2021, we are not persuaded to accept the said contention.
This is for the reason that Clause (G), sub-clause (ix) of Annexure A1 incorporates a specific stipulation, which was conspicuously absent in the original agreement, Ext.P1. Sub-clause (ix) reads as follows: “ix. The provisions of this agreement are subjected to notifications/Circulars and other relevant Government Orders issued in this regard.” By virtue of the aforesaid sub-clause, the terms of G.O. (K-AI) No.24/2021/ITD dated 30.07.2021 are liable to be read as forming part of the agreement itself, and the contractual provisions stand expressly made subject to the Government Orders issued in the field. Hence, when the Director, Akshaya Centre, cancelled the licence of the appellant on the basis of the recommendation of the District Collector, no illegality can be attributed to the said action. It is also significant that Ext.P9 order was passed by the Director on merits and upon consideration of the materials placed before him. 9. We also find no merit in the contention that the appellant was deprived of the opportunity to challenge Ext.P9 in appeal on the ground that it was passed by the appellate authority himself. The records reveal that the appellant had, in fact, preferred an appeal against Ext.P9 on 17.12.2024 before the Government, and was heard on merits by the Secretary, Electronics & Information Technology Department. The said order was passed after affording due opportunity of hearing. Therefore, it is not open to the appellant to contend that he was deprived of an appellate forum merely because Ext.P9 was issued by the Director, Akshaya Centre. The agreement does not contemplate any further appeal or revision before the Government. Significantly, as pointed out by the learned Senior Government Pleader, the appellant had not raised the above contention either in the appeal preferred by him before the Secretary or even in the writ petition filed before this Court. 10. There is also no substance in the contention that the appellant ought to have been afforded an opportunity to cross-examine the person who prepared the report forming the basis of the charges. The procedure governing cancellation of a licence or agreement relating to an Akshaya Centre cannot be equated with a departmental enquiry conducted under statutory service rules, wherein the delinquent is entitled to cross- examine witnesses. The contention that the arbitration clause is unworkable is equally devoid of merit.
The procedure governing cancellation of a licence or agreement relating to an Akshaya Centre cannot be equated with a departmental enquiry conducted under statutory service rules, wherein the delinquent is entitled to cross- examine witnesses. The contention that the arbitration clause is unworkable is equally devoid of merit. Even assuming that the named arbitrator lacks independence, it was always open to the aggrieved party to invoke appropriate legal remedies for the appointment of an independent arbitrator in accordance with law. 11. As noted above, the appellant was found to be continuously absent from the Akshaya Centre on all three occasions of inspection. As rightly pointed out by the learned Senior Government Pleader, the entrepreneur of an Akshaya Centre bears a heightened responsibility to ensure the accuracy and integrity of the data handled therein, particularly with respect to the identification of persons availing various services. Clause (6), sub- clause (viii) of Annexure A1 specifically mandates that the Akshaya E-Kendra shall be run and managed only by the person holding the valid allotment order, and that such person shall neither represent nor manage any other Akshaya E-Kendra as a benami, and shall remain personally liable for all actions undertaken therein. In the present case, as per Ext.P4 order passed by the District Collector pursuant to the directions of this Court, the appellant was granted a final opportunity to continue the service, subject to certain stringent conditions. One of the essential conditions stipulated therein was that the appellant shall mandatorily remain personally present in the Akshaya Centre during working hours, exercise complete supervision over its functioning, and refrain from permitting the previous entrepreneurs to participate in the running of the Centre. Admittedly, Ext.P4 has not been challenged by the appellant and has, therefore, attained finality, rendering the appellant bound by its terms. 12. However, even subsequent to the issuance of Ext.P4, during a surprise inspection, the appellant was again found absent from the Akshaya Centre. He was found to be engaged in the business of his mobile shop, leaving no room for any explanation for his absence. The learned Single Judge has duly adverted to all these aspects while upholding Ext.P9 order. In such circumstances, we find no merit in any of the contentions advanced by the learned counsel for the appellant in assailing the cancellation of the Akshaya Centre licence under Ext.P9, as affirmed by the appellate order, Ext.P13. 13.
The learned Single Judge has duly adverted to all these aspects while upholding Ext.P9 order. In such circumstances, we find no merit in any of the contentions advanced by the learned counsel for the appellant in assailing the cancellation of the Akshaya Centre licence under Ext.P9, as affirmed by the appellate order, Ext.P13. 13. Let us now consider the correctness of the order passed by Ext. P8 declining to accept the request for transfer of the license of the Centre. As per Annexure A1, the transfer of Akshaya Entrepreneurship is guided by the following terms:- “ D. TRANSFER OF AKSHAYA ENTREPRENEURSHIP i. The transfer of Akshaya e-Kendra can be done only as per the norms laid by AKSHAYA. ii. The transfer of Akshaya e-Kendra to any one of their immediate family members will be considered only on the following grounds. (i) Death of the ACE (ii) Permanent disability of the ACE. (iii) ACE getting an employment in India or abroad In the Case of transfer, the new ACE shall execute fresh agreement. iii. In case ACE wants to transfer his Akshaya e-Kendra due to getting a new job or on marriage or improvement of career or incapability of running Akshaya e-Kendra, he is permitted to do so as per the following norms. The goodwill generated by the Akshaya ACE over the years should not go vain, if he/she or his/her family members are not interested to continue operations further. In such cases, the transfer of Akshaya e-Kendra can only be done after 3 years to such new ACE.” 14. The learned Senior Government Pleader invited our attention to G.O. (K-AI) No.24/2021/ITD dated 30.07.2021, wherein it is provided that an Akshaya Centre may be transferred in the following circumstances:— 15. Ext.P8 application submitted by the appellant seeking transfer of the Akshaya Centre is required to be considered in the aforesaid background. According to the appellant, it was on account of the vindictive attitude of the Block Co-ordinator, Smt. Rejani P.V., that his entrepreneurship came to be cancelled, and, in such circumstances, he is no longer interested in continuing the Centre. It is in the said context that he requested for transfer of the licence in favour of one of his staff members, with a view to safeguarding the amounts expended by him for establishing the Centre as well as to protect the employment of the staff working therein.
It is in the said context that he requested for transfer of the licence in favour of one of his staff members, with a view to safeguarding the amounts expended by him for establishing the Centre as well as to protect the employment of the staff working therein. The relevant portion of the application reads as follows:— 16. As per the governing norms, transfer of an Akshaya Kendra is permissible only when such transfer is sought in the circumstances specifically enumerated therein. The norms contemplate transfer to any of the immediate family members in cases of death or permanent disability of the entrepreneur, or upon the entrepreneur securing employment in India or abroad. Transfer to a third party is permitted only where none of the family members is willing to take over. 17. In the present case, the appellant has not adverted to any of the aforesaid circumstances in Ext.P8 application. The request for transfer was not founded on the ground of obtaining employment or on account of any disability. Nor was it stated that any of his family members were unwilling to assume the licence. On the contrary, the appellant’s case is that he is not inclined to continue the Centre owing to the alleged vindictive attitude of the Block Co-ordinator. The scheme and the governing norms do not envisage transfer of licence on such a ground. The norms, in explicit terms, provide that “the transfer of Akshaya e-Kendra to any one of their immediate family members will be considered only on the following grounds”. None of the said grounds are satisfied in the case of the appellant. 18. Further, we find no justification to extend any indulgence or equity to the appellant, having regard to his conduct, as revealed through successive surprise inspections. Despite being afforded an opportunity to rectify his conduct, the appellant failed to mend his ways. He was repeatedly found to be engaged in his private business, leaving the Centre to be managed by third parties. 19. Sri Manas P. Hameed, learned counsel appearing for the appellant, further contended that the learned Single Judge fell into a factual error in holding that the application for transfer of licence was submitted subsequent to the cancellation of the entrepreneurship, and that on such erroneous premise the impugned judgment is liable to be set aside.
19. Sri Manas P. Hameed, learned counsel appearing for the appellant, further contended that the learned Single Judge fell into a factual error in holding that the application for transfer of licence was submitted subsequent to the cancellation of the entrepreneurship, and that on such erroneous premise the impugned judgment is liable to be set aside. It is also contended that this Court, while exercising its jurisdiction under Article 226 of the Constitution of India or while entertaining an intra-court appeal, ought not to independently re- appreciate the merits of the matter. However, the jurisdiction of this Court under Article 226 of the , whether exercised in its original or appellate capacity, needs to be invoked only when the court is convinced of manifest illegality, irregularity leading to arbitrary or unfair decision-making process. Interference with administrative action is not to be undertaken as a matter of course or for the sake of technicalities. The exercise of such jurisdiction is discretionary and is warranted only when the Court is satisfied that the impugned action is vitiated by illegality, irrationality, or procedural impropriety of the above magnitude. We do not find any such circumstances in this case. Where the materials on record unmistakably disclose that no substantive injustice has been occasioned and no case for interference on merits is made out, the Court would be loath to set aside the administrative action merely on account of minor or inconsequential irregularities. Thus, the learned Single Judge has rightly decided not to interfere with the orders under challenge. Therefore, it can be concluded that no interference is called for with the impugned judgment. The writ appeal fails and is dismissed.