WP/27397/2006 of Pasagadugula Veeraiah Vs The District Collector, East Godavari District, on 27 December 2007

ORAL ORDER:

Heard Sri P. Durga Prasad, the learned counselrepresenting the petitioner and the learned AssistantGovernment Pleader for Civil Supplies representing therespondents.

2. The petitioner filed the present Writ Petition prayingfor a Writ of Mandamus or any other appropriate writ, orderor direction declaring the proceedings of the firstrespondent in D.Dis No. V3/CS/450/2002 dated 19.3.2003confirming the order passed by the 2[nd] respondent hereinin proceedings D.Dis No. V3/CS/340/2002 dated29.7.2002, confirming the order passed by the 3[rd]respondent herein in Ref. C.No. 463/2002 dated25.4.2002 as illegal, arbitrary, unreasonable, void andviolative of Articles 14, 21 and 19(1)(g) of the Constitutionof India and consequently direct the respondent herein torestore the authorization of Fair Price Shop No. 31situated at Mulagapudi Village, Kotananduru Mandal, EastGodavari District to the petitioner herein and pass suchother order or orders.

3. Sri P.Durga Prasad, the learned counselrepresenting the Writ Petitioner had taken this courtthrough the contents of the order made by the thirdrespondent, the Revenue Divisional Officer –cum- DeputyTahsildar, Civil Supplies, Peddapuram dated 25.4.2002and also the order made by the second respondent, theJoint Collector and Additional District Magistrate, EastGodavari District, Kakinada dated 29.7.2002 and also the order made by the first respondent dated 19.3.2003,confirming the said orders and would maintain that thereasons recorded by these quasi judicial authorities in thehierarchy are totally unsustainable reasons especially inthe light of the findings recorded by the Principle SessionsJudge, East Godavari in Criminal Appeal No. 141 of2002. The learned counsel also would maintain that thelearned Principal Sessions Judge observed that exceptcontravention No. 5, noted by the prosecution, thepetitioner is not guilty of any of contravention numbers 1 to4 mentioned in page 3 of the order of the Joint Collector.The learned counsel also pointed out that the appeal waspartly allowed directing the percentage of confiscation ofthe seized stocks from 100% to 25% though it cannot besaid to be a clear acquittal and the observations madeand the modification made by the Principle SessionsJudge, East Godavri would definitely go to show that thereasons recorded by the Joint Collector are unsustainablereasons, and when that being so, the reasons recordedby the quasi judicial authority, the District Collectorconfirming the same also to be taken as unsustainable. Hence, the orders impugned in the present Writ Petitionare to be quashed and the restoration of authorization tothe writ petitioner to be directed in the facts andcircumstances of the case.4. Per contra, the learned Assistant GovernmentPleader for Civil Supplies had taken this Court through thecontents of the counter affidavit filed by the respondentsand would maintain that though an interim order had

been granted nothing further in pursuance thereof hadbeen dealt with for the reason that W.V.M.P.No. 667 of2007 was moved immediately. The learned AssistantGovernment Pleader for Civil Supplies also wouldmaintain that the quasi judicial authorities in the hierarchyby dealing with the proceedings relating to cancellation ofauthorization would stand on a different footing and theseauthorities are not bound by observations made, if any, inthe proceeding concern with Section 6-A of the EssentialCommodities Act, 1955. The learned AssistantGovernment Pleader for Civil Supplies also would contendthat even otherwise it is not a case of clear acquittalrecorded in the criminal appeal and hence it cannot besaid that when at least one of the charges had beenconfirmed even by the competent criminal court that wouldbe sufficient to sustain the order of cancellation especiallyin the light of the reasons recorded by the primaryauthority, appellate authority and also the revisionalauthority as well. While further elaborating hersubmissions, the learned Assistant Government Pleaderfor Civil Supplies had pointed out to Form-II, ConditionNos. 11 and 13 and Condition No. 4 annexed to A.P.D.S.Control Order 2001 (hereinafter referred to as “an order”for the purpose of convenience) and also further reliedupon Clause 2(6) and Clause 22(vii) of the said order andwould maintain in the light of the same, since it cannot besaid that the observations made in the Criminal Appeal tobe binding on these authorities and in view of the fact thatthese authorities had recorded independent findings concurrently at all stages, this Court not to exercisejurisdiction under Article 226 of the Constitution of India.5. Heard the counsel and perused the records.

6. This court issued Rule Nisi on 2.1.2007 and inWPMP No. 35177 of 2006 this court made the followingorder:

“The petitioner is directed to file an applicationas required under Proviso to Clause 5(4) of theAndhra Pradesh State Public DistributionSystem Control Order, 2001 before the thirdrespondent-RDO. On filing such application,the third respondent shall consider the sameand pass orders within a period of four weeksfrom the date of receiving such application fromthe petitioner.”

7. As can be seen from the respective stands taken bythe parties in the affidavit filed in support of the WritPetition and also the counter affidavit, several of the factsare not in serious controversy. It is averred in paragraph 3of the affidavit filed in support of the Writ Petition that thepetitioner is the dealer of Fair Price Shop at MulagapudiVillage , Kotananduru Mandal, East Godavari District. It isstated that the petitioner herein was appointed as a dealerof Fair Price Shop 20 years back and ever since the dateof his initial appointment as Fair Price Shop Dealer, thepetitioner herein lifting the stock in time and supplying thestock to the card holders in time and absolutely there areno complaints from any quarter particularly from the cardholders at any point of time against the petitioner hereinregarding non-availability of the Commodities or distribution. The petitioner has been dischargingfunctions entrusted to the petitioner by the Government inan effective and systematic manner and up to the entiresatisfaction of the card holders.

8. Further it is stated that while the matters stood thusto the utter surprise and dismay, the respondentauthorities conducted surprise visit and checked thestocks pertaining to the petitioner’s fair price shop on27.1.2002 and found some alleged irregularities and ashow cause notice was issued by the 2[nd] respondentherein on 7.2.2002 under Section 6-B of the EssentialCommodities Act, calling for explanation with regard to thealleged irregularities committed by the petitioner herein. The petitioner herein filed a detailed explanation. It ishumbly submitted that without considering the explanationsubmitted by the petitioner herein the 2[nd] respondentpassed an order of confiscation and imposed a fine forequivalent value of 7 quintals of Food for Work, rice stockunder Section 6-A of the Essential Commodities Act, 1958by proceedings reference V3/CS/55/2002 dated3.5.2002. It is stated that aggrieved by the said orderpassed by the second respondent herein the petitionerherein filed an appeal on the file of the Court of the Districtand Sessions Judge, East Godavari District, beingCriminal Appeal No. 141 of 2002 and also stay of theimpugned orders passed by the 2[nd] respondent herein. Itis submitted that the District Court was pleased to grantinterim stay initially by an order dated 18.6.2002 in Criminal M.P.No. 645 of 2002 in Criminal Appeal No. 141of 2002 and on hearing finally the Court of the PrincipalSessions Judge, East Godavari District was pleased toallow the Appeal filed by the petitioner by an order dated3.2.2006 not finding guilty of the charges levelled againstthe petitioner herein.

9. Further it is averred that while the matter is pendingsimultaneously the respondent authorities initiatedproceedings against the petitioner herein under the A.P.Scheduled Commodities (Regulation of Distribution byCard System) Act, 1973 on the same ground asmentioned in the 6-A proceedings directing the petitionerherein to show cause to give an explanation by referenceC.No. 306/2002 dated 25.4.2002 by the 3[rd] respondentherein. It is submitted that the petitioner herein submitteda detailed explanation and without considering theexplanation given by the petitioner herein by proceedingsRef.C/463/2002 dated 25.4.2002 the third respondentherein had cancelled the authorization of the petitioner’sdealership of fair price shop.

10. Further it is averred that aggrieved by the saidorder passed by the third respondent herein dated25.4.2002 the petitioner filed an appeal before the JointCollector, East Godavari District, Kakinada and the samewas dismissed by proceedings D.Dis.V3/CS/340/2002dated 29.7.2002. Aggrieved by the said orders passed bythe 2[nd] respondent dated 29.7.2002 the petitioner hereinfiled a revision before the Collector, East Godavari District and the same was dismissed by an order dated 19.3.2002in D.Dis No. V3/CS/450/2002. Further it is averred thatwhile things being so proceedings initiated against thepetitioner herein under the Essential Commodities Act andA.P. Scheduled Commodities Act and A.P. ScheduledCommodities (Regulation of Distribution of Card System)Order, 1973, virtually being one and the same, theCriminal Appeal filed by the petitioner as against theproceedings under Section 6-A of the EssentialCommodities Act has ended in acquittal. Thesesimultaneous proceedings relating to cancellation cannotbe sustained in the eye of law and prays the revisionpetitioner is bound to succeed. Several other furtheraverments also been made in the affidavit filed in supportof the Writ Petition.

11. In the counter affidavit filed, it is averred in paragraph2, basing on the report of the C.S.D.T, Tuni and afterthorough examination of the explanation offered by thepetitioner, keeping in view the irregularities committed byhim orders were passed cancelling the authorization onthe appeal filed before the Joint Collector against the saidorders. The Joint Collector, after perusing the records hasconfirmed the order passed by the 3[rd] respondent. Again,the petitioner has filed a revision petition before the DistrictCollector against the orders of the Joint Collector and theDistrict Collector after examining the reports, held that thelower authorities had held that the irregularities committedby the Revision Petitioner herein in running the Fair PriceShop at Mulagapudi Village were serious enough and hence appointing authority cancelled authorization heldby the revision petitioner. The Revisional authority alsoheld that the lower authorities had considered all aspectsand gave a speaking order for the irregularities committedby the revision petitioner and the orders passed by themare just and proper.

12. It is also further averred that it is not correct to saythat the dealer is supplying the stock to the cardholders intime and absolutely there are no complaints from anyquarter particularly from the cardholders. It is submittedthat on receipt of credible information, the C.S.D.T, Tuniand Prathipadu have inspected the F.P Shop maintainedby Sri P. Veeraiah of Mulagapudi Village and noticed certain irregularities committed by the dealer and filed acase under Section 6 A of the E.C. Act. If the petitionerhad happened to supply the commodities to thecardholders properly as contended, there would not beany scope for variation in the stocks of commodities,which were noticed during inspection. It is therefore,submitted that the contention of the petitioner in thisregard are untenable.

13. Further the averments in the paragraph four isalso been denied. It is averred that after perusal of theinspection report filed by the CSDT, Tuni, an opportunitywas given to the petitioner by issuing a show cause noticeto offer his explanation and on perusal of the explanationand other material papers the above order was passed bythe second respondent. It is further stated that it is true a Criminal Appeal No. 141 of 2002 has been filed in thecourt of District and Sessions Judge, Rajahmundry by thepetitioner and obtained stay on the orders passed by theJoint Collector in the Ref. V3/CS/55/2002. As the matterstood thus, he again filed a revision petition before theDistrict Collector, against the orders of Joint Collectorwithout waiting for the outcome of the judgment in CriminalAppeal No. 141 of 2002.

14. It is also stated that it is not correct to say that withoutconsidering the explanation offered by the petitioner forthe Show Cause Notice issued by the third respondent,the authorization was cancelled. After issuance of showcause notice and on perusal of the explanation, theauthorization of the petitioner was cancelled in view of thegravity of irregularities committed by him in maintaining theF.P. Shop.

15. The petitioner has committed the following charges.

(1) The petitioner has misused a quantity of 8.60

qtls of PDS Rice intended for distributionto the card holders. It is clear from theinspection report submitted by theC.S.D.T., Tuni on 27.1.2007.to the card holders. It is clear from theinspection report submitted by theC.S.D.T., Tuni on 27.1.2007.

(2) At the time of inspection by the CSDT, Tunithere is a shortage of 1.20 qtls of Sugarand thereby the petitioner misused theabove quantity.there is a shortage of 1.20 qtls of Sugarand thereby the petitioner misused theabove quantity.

(3) The petitioner has shown the Kerosenebalance as NIL, but as per the recordsthere should be a balance of 141 Ltrsbalance as NIL, but as per the recordsthere should be a balance of 141 Ltrs Kerosene. Therefore the petitionermisused a quantity of 141 Ltrs Kerosenefor distribution to the card holders.

16. Further in paras 6 and 7 of the counter affidavit ,the appeal preferred before the Joint Collector and therevision preferred before the District Collector and theorders made there on had been referred. Specific standhad been taken that it is not correct to say that theCriminal Appeal filed by the petitioner against Section 6-Aof the proceedings of the Essential Commodities Act,1955 had ended in acquittal. The learned District andSessions Judge, Rajahmundry partly allowed the appealand ordered for confiscation of the seized stock from100% to 25% and thus the court only reduced thepercentage of the confiscation but not acquitted thepetitioner as contended by him. More over, the reductionin percentage of confiscation does not confer any right onthe appellant to seek for restoration of the authorization.

17. As already referred to supra, the counsel on recordwould made elaborate submissions in relations to thenature of the orders made on the strength of the chargesand also the findings which had been recorded in thecriminal appeal by the District and Sessions Judge,Rajahmundry. Incidentally, submissions at length weremade in relation to Clause 2(6) and Clause 22(vii) of theorder and also condition No. 4 and Form-II, Conditions 11and 13 are all annexed to the said order.

18. On a careful reading of the stocks referred to supra,there cannot be any doubt whatsoever that the proceedings under Section 6-A of the EssentialCommodities Act, 1955 stand on a different footing takenwhen compared to the proceedings relating to thesuspension or cancellation of the authorization under theOrder referred to supra. However, it is pertinent to notethat when the charges framed and the findings recordedby a competent criminal court also cannot be totallyignored while considering the provisions relating to thecancellation of the authorization.

19. Be that as it may, it may be appropriate to have aglance at the charges leveled against the Writ Petitioner inthe order made by the third respondent Ref. © 463/2002dated 25.4.2002, the report of the Mandal Supply Officer,Tuni dated 29.1.2002, further reference dated 6.2.2002and dated 2.4.2002 and the explanation of Sri P.Veeraiah, Mulagapudi Fair Price Shop Dealer, the WritPetitioner had been referred to. The charges and theexplanations also had been referred to and it wasrecorded that the explanation offered being notsatisfactory, the authorization had been cancelled. Thesaid charges are extracted hereunder:

“Charge-1: That there should be reserve ofQuintals 9.10 kilograms of rice as on27.1.2002, but there is only 0.50 k.gms ofground balance as such misappropriatedquintals 8.60 k.gms.

Charge-2: That there should be reserve ofQuintals 1.41 kilograms of sugar as on27.1.2002, but there is only 1.20 k.gms onground balance as such misappropriated 0.21

k.gms.

Charge -3: That there should be reserve of 141litres of kerosene as on 27.1.2002, but there isno ground balance as such misappropriated141 litres of kerosene.”

20. The second respondent in the order dated 29.7.2002in proceedings D.Dis. V3/340/2002, after referring to thebrief facts and also the grounds of appeal observed asunder:

“The show cause notice was issued bythe Revenue Divisional Officer, Peddapuramwas examined. The Revenue DivisionalOfficer, Peddapuram has issued a show causenotice on 2.4.2002 with a direction to attendbefore the Revenue Divisional Officer on20.4.2002 at 12.00 Noon and to fileexplanation before the court. The show causenotice was also served to the petitioner. Afterreceiving the show cause notice the petitionerSri. Pasagodugula Veeraiah has attendedbefore the Revenue Divisional Officer,Peddapuram on 20.4.2002 and filed his writtenexplanation stating that due to his illness andlight Paralysis stroke to his handsconsequently, the entries could not be madeand though the stocks were issued andcoupons were received. Before issuingcancellation orders of authorization, theR.D.O., Peddapuram has discussed the issuein detail in Ref.C/463/2002, dated 25.4.2002.

The petitioner has misused 8.60 Qtls ofP.D.S Rice, 0.21 Qtls of Sugar 141 Ltrs ofK.Oil for his illegal benefits. The dealer hasalso failed to maintain true and correct accounts.

I opined that the Revenue DivisionalOfficer, Peddapuram who is a appointingauthority of the dealer has taken proper actionagainst the said order. In the abovecircumstances, I do not see any reason tointerfere the impugned order. Therefore, theaction taken by the Respondent 1 is up-hold. Accordingly, the appeal is not allowed.”

21. The first respondent in D.Dis.V3/CS/450/2002 dated19.3.2003, as revisional authority after referring to thegrounds while dismissing the revision observed as under:“Heard the arguments and perused therecords.

Lower court examined carefully and therevision petition averments are examinedthoroughly. Lower court felt that irregularitiescommitted by revision petitioner herein inrunning the Fair Price Shop at MulagapudiVilalge were serious enough and henceappointing authority cancelled authorizationheld by revision petitioner herein. I alsoexamined the lower court judgment whetherthere was application of fact and speakingorder. I feel lower court considered all aspectsand gave a speaking order. For theirregularities committed by Revision Petitioner, Ifeel the orders passed earlier are just andproper.

Revision Petition fails accordingly.”

22. On a careful analysis of the observations made bythe primary authority, appellate authority and therevisional authority on the ground that the charges leveled

against and irregularities committed being serious, it is a fitmatter where cancellation to be ordered. The show causenotice issued under Section 6-B of the EssentialCommodities Act, 1955, the explanation submitted andthe order made by the Joint Collector dated 3.5.2002 inreference V3/CS/55/2002 also had been placed beforethis Court in Criminal Appeal No. 141 of 2002 on the file ofPrincipal Sessions Judge, East Godavari District,preferred as against the order dated 3.5.2002 made bythe Joint Collector, East Godavari District, Kakinada, inV3/CS/55/2002, wherein confiscation of 100% of theseized stocks had been ordered under Section 6-A of theEssential Commodities Act, 1955. It was observed atparagraphs 4 and 5 as here under:

“ There is no dispute about inspection of theappellant’s shop on 27.1.2002 at 12.10 PM bythe officers in the presence of mediators andfinding deficits in stocks as noted in themediators’ report. Admittedly, the appellantwas not writing registers and records promptly. According to the appellant, he was not able towrite accounts and registers daily because ofillness. When compared to the ground stockswith book balance, initially huge variationswere found to the extent of deficit of 29.75quintals of PDS rice. O.55 quintals of sugar,600 liters of kerosene oil and 202.70 quintalsof FFW rice. But, when all the coupons weregathered and which coupons were not shownin the sales register, the final variation wasfound to be deficit of 8.60 quintals of PDSrice, 0.21 quintals of sugar, 141 liters ofkerosene oil; and no variation was found withregard to FFW rice. Along with the explanation, the appellant filed medicalcertificate issued by Suresh OrthopedicHospital , and x-ray film. Along with theexplanation, the appellant filed coupons of rice,sugar and kerosene oil which are stated tohave been keep it in cash box and which werenot taken into account at the time of checkingof the stocks. If the said coupons are takeninto consideration, then virtually there is novariation in stocks of PDS rice, sugar andkerosene oil. When there is no variationpractically in either PDS commodities or FFWrice, the order passed by the Joint Collectorconfiscating 100% of the seized stocks is notjustified. As the matter now stands, theappellant is guilty of improper maintenance ofregisters and non-completion of accounts onthe same day. Except contravention No. 5noted by the prosecution, the petitioner is notguilty of any of contravention Nos. 1 to 4mentioned in page 3 o the order of the JointCollector. I am of the opinion that for the saidtechnical contravention of not maintainingregisters and accounts properly ends of justicewill be met if 25% of the seized stock isconfiscated instead of 100%.

In the result, the appeal is partly allowedmodifying percentage of confiscation of theseized stocks from 100% to 25%.”

23. As can be seen from the order made by the primaryauthority, the Revenue Divisional Officer concerned whileordering cancellation only three charges had beenreferred to. It is pertinent to note that in the CriminalAppeal referred to supra, specifically it was observed thatthe appellant was guilty for improperly maintaining the

Conclusion

registers and non-completion of accounts on the sameday. Further it was observed that except contraventionNo. 5 noted by the prosecution, the petitioner is not guiltyof any of the contravention Nos. 1 to 4 mentioned in page3 of the order of the Joint Collector. It may be pertinent tonote the contraventions referred to by the concerned JointCollector and the said contraventions 1 to 5 are as under:

1. Diversion of PDS Rice and Sugar other APSC (RDCS) Clause -4 Than house hold supply cards Order, 1973 2. Selling Scheduled Commodities not APSC (RDCS) Proviso-3 Supplied through the Government Order, 1973 of Cl.3(1) Without permission3. Not adhering to direction of Con.11 of Cl.16(4) Collector/RDO Authorization4. Selling, Distribution or supply The K.Oil Cl.2(2) Kerosene under PDS to any person restriction on use Other than the person to whom the on fixation of ceiling Supplier on meant for price Order, 19935. Improper maintenance of registers APSRDCS (L&D) Con.3(vi) Non completion of accounts on the Order, 1982 License Day etc., A.P. Petroleum Products.

24. It is needless to say that contravention No. 5 is onlywith regard to the improper Maintenance of registers andthe other serious contraventions pointed out by the JointCollector 1, 2, 3 and 4 had been specifically negatived bythe learned Principle Sessions Judge in the CriminalAppeal referred to supra. Though these proceedingsrelating to cancellation and the proceedings under Section6-A of the Essential Commodities Act , 1955 stand slightly on different footing as far as several factual findings areconcerned there may be over lap and there cannot be anytwo opinions regarding these aspects. Hence, in the lightof the nature of the order and the charges referred to bythe Primary authority as confirmed by the appellantauthority and the revisional authority and in the light of thenature of the findings recorded by the concerned Jointcollector who is incidentally the appellate authority and thefindings recorded in the criminal appeal by the learnedPrinciple Sessions Judge, East Godavari District, thiscourt is of the considered opinion that inasmuch as the leftover charge being not serious, the cancellation ofauthorization affected as against the Writ Petitioner, would require re-consideration in the light of the viewexpressed by the learned Principal Sessions Judge, EastGodavari District in the Criminal Appeal specified above.25. Accordingly, the orders impugned in the presentWrit Petition are hereby quashed and the matter isremitted to the primary authority to the concernedRevenue Divisional Officer, to take into consideration theobservations made by the learned Principal SessionsJudge, in Criminal Appeal No. 141 of 2002 and makeappropriate orders in accordance with law, if necessary bygiving due opportunity to the Writ Petitioner and afterhearing the petitioner also in this regard, within a period offour weeks from the date of receipt of a copy of this order.

26. Accordingly, the Writ Petition is allowed to theextent indicated above. No order as to costs.