WP/7853/2003 of Shaik Ramu, Vs Government of Andhra Pradesh, on 28 December 2007

ORDER :

The petitioner herein is the authorized dealer of the fair price shop ofPeddaboddepalli Village, Narsipatnam Mandal, Visakhapatnam District.His authorization was cancelled by the 1[st] respondent – RevenueDivisional Officer, Narsipatnam by order dated 20-7-2002 on the ground ofmisutilisation of the rice meant for distribution under Food For WorkScheme (for short, FFWS). The appeal preferred by the petitioner againstthe order of cancellation was dismissed by the Joint Collector,Visakhapatnam by order dated 5-10-2002 and the same was confirmed onRevision by the 3[rd] respondent – District Collector by order dated 29-3-2003. Hence, this writ petition seeking a declaration that the action of therespondents in cancelling the authorization of the petitioner is arbitrary andillegal.

I have heard the learned Counsel for the petitioner as well as thelearned Government Pleader and perused the material on record.

It is primarily contended by the learned Counsel for the petitioner thatsince the distribution of rice under FFWS is not governed by the provisionsof the Essential Commodities Act, 1955 (for short, ‘the Act’) much lessControl Orders made thereunder, the impugned action of the respondents isarbitrary, illegal and without jurisdiction. While placing reliance upon thedecisions in KAILASH PRASAD YADAV v. STATE OF JHARKHAND[[1]]and SRI SAI TRADERS, VIJAYAWADA v. ASSISTANT SUPPLYOFFICER, CIRCLE-I, VIJAYAWADA[[2]], the learned Counsel for thepetitioner further contended that by virtue of the order of the Government ofIndia dated 15-2-2002 followed by the order of the Government of A.P. inG.O.Ms.No.79, dated 29-6-2005 rescinding the Andhra Pradesh Paddy andRice (Requisitioning of Stocks) Order, 1966, there is absolutely norestriction on the movement of rice in the State of Andhra Pradesh and consequently the impugned cancellation of authorization for the allegeddiversion of rice meant for FFWS is arbitrary and illegal.

On the other hand, the learned Government Pleader whiledistinguishing the decisions cited by the learned Counsel for the petitioneron facts, contended that the concurrent findings recorded by therespondents do not warrant any interference.

A perusal of the order of cancellation dated 20-7-2002 passed by the1[st] respondent shows that on receipt of credible information that FFWS ricewas being diverted , the Mandal Revenue Officer, Narsipatnam surprisedthe fair price shop of the petitioner and found shortage of 274.75 quintals ofFFWS rice when compared to the coupons produced by the petitioner. Itwas also found that the petitioner sold 129 bags of rice each weighing 50kgs to one Babu Rao which was being diverted in the van bearing No.AP-16-Y-386. The petitioner was also found to be maintaining unauthorizedgodowns in contravention of the conditions of authorization.

The petitioner was issued a notice calling upon to explain the saidallegations and after considering his explanation, having found that all theallegations were established the authorization was cancelled and thesame was confirmed on Appeal and Revision.

Section 3 of the Essential Commodities Act, 1955 empowers theCentral Government to issue orders providing for regulating or prohibitingproduction, supply and distribution of the essential commodities. Thedefinition of Essential Commodity under Section 2(a) of the Act includesfood stuffs. In exercise of the power conferred under Section 3 of the E.C.Act., the Andhra Pradesh Scheduled Commodities (RDCS) Order, 1973 (forshort, ‘1973 Control Order’) was made for the purpose of controlling andensuring proper distribution of scheduled commodities owned by the Statethrough fair price shops. The word ‘scheduled commodity’ has beendefined under Section 2(g) of the 1973 Control Order as any commodityspecified in the Schedule to the order which is supplied by the StateGovernment or by an agency appointed by the State Government to anyauthorized fair price shop or establishment for issue to the consumers. Theschedule to the Control Order, 1973 included rice among othercommodities specified thereunder. The 1973 Control Order was subsequently superseded by the A.P. State Public Distribution SystemControl Order, 2001 (for short, ‘2001 Order’)which also contained anidentical definition of the scheduled commodity and the Schedule to the2001 Control Order also included rice.

Clause 3(4) of the 1973 Control Order empowered the appointingauthority to suspend or cancel the authorization after making such enquiryas may be deemed necessary and for reasons to be recorded in writing.Clause (16) provided for conditions to be observed by the authorized dealerof the fair price shop, one of the conditions being that the authorization shall be liable for suspension or cancellation for any contravention of theprovisions of the Control Order. The form of authorization prescribed inForm-2 further made it clear that the authorized dealer is bound to complywith any directions that may be given to him by the appointing authority withregard to purchase, sale or storage for sale of scheduled commodities.

On a combined reading of the above provisions, it is clear that the ricebeing a scheduled commodity as defined under the Control Order 1973 aswell as 2001Control Order is one of the items meant for distribution to theconsumers and the authorized dealers are bound to distribute the sameeither under PDS or FFWS in compliance with the instructions of theappointing authority. Hence, in the event of the authorized dealer indulging in misappropriation of such commodity, the authorization is liablefor suspension or cancellation. Precisely, the same was done by the 1[st]respondent after recording a finding that the petitioner had indulged indiversion of rice meant for FFWS. Admittedly, the said order was passedafter giving an opportunity of hearing to the petitioner and after conductingan enquiry following due process of law.

The decision of the Supreme Court in KAILASH PRASAD YADAV’Scase (1 supra) which was rendered while dealing with confiscationproceedings under Section 6-A of the E.C. Act has no application at all tothe facts of the present case. Similarly, in SRI SAI TRADERS,VIJAYAWADA (2 supra) the question whether the authorisation of the fairprice shop dealer is liable for cancellation for misappropriation of FFWSrice did not fall for consideration. Hence, both the decisions cited by thelearned Counsel for the petitioner are not applicable to the present case.

It is true that so far as the rice meant for distribution under FFWS concerned, the Commissioner of Civil Supplies by order dated 12-8-200clarified that confiscation proceedings under Section 6-A of E.C. Act are nmaintainable and it is permissible only to take action under the Code Criminal Procedure. However, in the said proceedings dated 12-8-2002 itse

it was made clear that insofar as fair price shop dealers are concerned the are governed by the conditions of the authorization issued under the A.

State Public Distribution System Control Order, 2001. Even clause (6) of th Order issued by the Central Government, dated 15-2-2002 rescinding th Andhra Pradesh Paddy and Rice (Requisitioning of Stocks) Order, 196

provided that nothing contained in the said order shall affect the operation the Public Distribution System (Control) Order, 2001. In the clarification, date 12.8.2002 issued by the Commissioner of Civil Supplies with regard to ric meant for Food for Work, it was further made clear as under :

“With reference to letter cited, it is clarified that Rice Millers whoindulge in purchase of rice like Food for Work rice, action has to betaken under Criminal Procedure Code as there is no licensingsystem.

Insofar as the Fair Price Shop dealers are concerned, they aregoverned by the conditions of the authorisation issued under theAndhra Pradesh State PDS Control Order, 2001.”

Admittedly, the petitioner is a fair price shop dealer and therefore impugned action of cancellation of authorization does not suffer from any infir For the aforesaid reasons, I do not find any justifiable reason to holdthat the impugned order of cancellation of authorization is arbitrary orillegal. All the contentions raised by the petitioner are untenable and theinterference by this Court is unwarranted. Accordingly the Writ Petition isdismissed. No costs.

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G. ROHINI, J.

Dt. 28-12-2007 gbs

Note:- CC in one week.

[1](2007)5 SCC 769[2]2006 (4) ALD 736