By means of this writ petition, the petitioner has prayed for quashing the impugned orders dated 04.03.2008 passed by the respondent no.1 and order dated :January,2007 passed by the respondent no.2 contained in Annexure nos. 1 and 2 in the writ petition and also for issuing a writ in the nature of mandamus commanding the respondents not to give effect the aforesaid impugned orders as well as not to initiate the process for fresh allotment of shop.
Heard learned Counsel for the parties.
The petitioner is a Fair Price Shop licensee and the question involved in this case is as to whether non-furnishing the copy of the complaint or preliminary enquiry report or the inspection report or any other document, which has been utilized against the Fair Price Shop licensee while cancelling the licence, amounts to violation of principle of natural justice or not. The assertion of the petitioner is that the plea of opportunity of hearing and non-supply of relevant documents, which were taken into consideration by the Licensing Authority, was raised before the appellate authority but the same has not been dealt with in its correct perspective.
According to State Counsel, to ensure proper distribution of essential commodities, which are bare need of the public they are to be distributed through the public distribution system for which Essential Commodities Act, 1955 was enacted by the Central Government. Pursuant to the powers conferred by the Public Distribution System (Control) Order, the State Government for maintaining the supplies of the food grains and other essential commodities and to secure equitable distribution and availability at fair price vide notification dated 20.12.2004, notified U.P. Schedule Commodities Distribution Order, 2004. This Distribution Order was notified by the State Government in exercise of the powers conferred under Section 3 of the Act of 1955 read with provisions contained in Public Distribution System (Control) Order, 2001. Apart from the U.P. Schedule Commodities Distribution Order, 2004 (in short referred to as the Distribution Order of 2004) which is w.e.f. 30.12.2004, the State Government issued a Government Order dated 29.7.2004 on the subject of monitoring/regulating various kind of procedures. Elaborating his arguments, State Counsel submitted that Clause-4 of the Distribution Order provides that a person granted fair price shop is to sign an agreement under sub-clause(3) for running the fair price shop before the competent authority prior to the coming into effect of the said appointment. Clause 25 provides observance of the conditions as the State Government stipulates whereas Clause 28(3) of the Order provides filing of appeal against the order of suspension or cancellation of the agreement. Thus a person appointed to run a fair price shop acts as an agent of the State Government, who is under an obligation to sign an agreement. The agent so appointed is under an obligation to maintain records of supply and distribution of scheduled commodities, maintenance of accounts, keeping of the registers filing returns and issue of receipt to Identity Card holder and other matters. In some of the writ petitions, it has been indicated in the counter affidavit that the cancellation of agreement relating to fair price shop is a non-statutory agreement and the orders regarding cancellation of non-statutory agreement are not amenable to writ jurisdiction before this Court. In this regard reliance has been placed on Gopal Das Sahu and another vs. State of U.P. and others; 1991 All.L.J.498 and Kallu Khan vs. State of U.P. and another [2008(6) ADJ 443 (DB)] and other cases. Sri Rakesh Srivastava, Standing Counsel also contended that when a fair price shop licence holder commits irregularities or is found to have indulged in the activities in contravention to the licence of Fair Price shop dealer, his agreement/licence is suspended. Before passing order of suspension of the licence, there is no contemplation of any notice and opportunity. Adverting to the present cases, he submitted that the order of cancellation was passed after providing the licence holder an opportunity of hearing which would tantamount to passing the order after observing the principles of natural justice and as such it cannot be said that there was any infirmity. He further submitted that the appeal has also been dealt with by the Appellate Authority in a proper manner and after recording cogent and plausible findings and only then, it was dismissed. Therefore, the writ petitions are liable to be dismissed on the aforesaid grounds. In Sri Pappu vs. State of U.P. and others [2000(18) LCD 321] the question for consideration before the Division Bench was as to whether the writ petition is maintainable against the order of cancellation of fair price shop in view of the Full Bench decision of the Court in the U.P. Sasta Galla Vikreta Parishad vs. State of U.P. and others 1993(1) ALR 121. The Division Bench presided over by Hon'ble N.K.Mitra, Chief Justice (as he then was) while examining the amended provisions of U.P. Panchayat Raj Act in view of the Article 243-G of the Constitution under which Gram Panchayat has been entrusted with the function of performing public distribution system, the Court while holding that writ petition is maintainable and observed in paragraph 9 of the report as under:-
?...Allotment of fair price shop or its cancellation is now a statutory function of the Gram Panchayat Exercise of statutory power by Gram Panchayat for collateral purposes is interdicted by Article 14 of the Constitution. Arbitrary grant or cancellation of fair price shop is open to judicial review under Article 226. The Full Bench decision, reliance on which has been placed by the learned Single Judge in dismissing the writ petition as not maintainable, in our opinion, has been rendered obsolete in view of the constitutional and statutory amendments referred to above.?
After issuance of various other Government Orders, the matter again gained attention of this Court inre:Kallu Khan vs. State of U.P. and another [supra] before the Division Bench of this Court an objection was raised by the Standing Counsel placing reliance on the Full Bench judgement in U.P. Sasta Galla Vikreta parishad (supra) that the right of petitioner being contractual in nature and not statutory, the remedy, if any lies, either by filing appeal before the appropriate authority as provided under the relevant Government Orders and for alleged breach of contract, the writ petition under Article 226 of the Constitution is not maintainable. The Division Bench after considering the Full Bench decision in U.P. Sasta Galla Vikreta Parishad, Sri Pappu vs. State of U.P. [supra], Harpal vs. State of U.P. and others 2008(3) ADJ 36 and various other cases, which has been relied by the State Counsel, observed in para 59 of the report as under:-
? In view of the above discussion even if we come to the conclusion that as such the petitioner may not be non-suited on the ground that the writ petition is not maintainable yet it cannot be said that the Writ Court must entertain the writ petition whenever there is any complaint of breach of certain contractual rights. The legal position is otherwise. As observed by the Apex Court in Swapan Kumar Pal (supra) the scope of judicial review is only limited to interfere when there is any error in decision-making process and not otherwise. Even if the writ petition, as such , may not be dismissed on the ground that it is not maintainable yet we are of the view that in such matters exercise of discretion under Article 226 of the Constitution by entertaining writ petition would not be prudent unless it is shown that there is any violation of statutory provisions particularly when alternative remedy is available to the petitioner.?
From the legal proposition reproduced herein above, it is evident that there is no blanket ban in entertaining the writ petitions. It is true that ordinarily the remedy for breach of contract is a suit for damages or for specific performance and not a writ petition under Article 226 of the Constitution. However, where the contractual dispute has a public law element, the power of judicial review under Article 226 may be invoked. In civil suit, emphasis is on the contractual right whereas the emphasis in writ petition is only the validity of the exercise of power by the authority.
It is pertinent to add that issue whether the writ petition is maintainable or the person aggrieved is entitled to invoke the writ jurisdiction was considered by the Apex Court in following cases:-
In Pratap Singh Keron v. State of Punjab AIR 1964 SC 72, the Supreme Court observed as under:-
? The Rule of law and Article 226 is designed to ensure that each and every authority in the State including Government of India acts bonafide and within the limits of its power and we consider that when the Court is satisfied that there is an abuse and misuse of power and its jurisdiction is invoked, it is incumbent on the Court to afford justice to the individual.?
In the case of U.P.State Co-operative Bank Limited v. Chandra Bhan Dubey (1999) 1 SCC 741, the Supreme Court has laid down the following proposition:-
?... The Constitution is not a statute. It is a fountainhead of all statutes. When the language of Article 226 is clear, we cannot put shackles on the High Courts to limit their jurisdiction by putting an interpretation on the words which would limit their jurisdiction. When any citizen or person is wronged, the High Court will step into to protect him, be that wrong be done by the State, an instrumentality of the State, a company or a co-operative society or association or body of individuals, whether incorporated or not, or even an individual. Right that is infringed may be under part Part III of the Constitution or any other right which the law validly made might confer upon him.?
A Division Bench of this Court in the case of Meena Srivastava v. State of U.P. 2009(1)ADJ 379(DB) held as under:-
? In the facts of the present case writ petition has been filed against an action of a Government Officer, who is public authority. The writ petition under Article 226 of the Constitution of India is maintainable against a public authority. The public authorities, who are State authorities and instrumentalities are not to act arbitrarily, irrationally or unreasonably. Any action of public authority can always be impugned in the writ petition and it cannot be said that the writ petition is not maintainable in such case.?
Thus the consistent view of the court is that actions and the orders of public officers are amenable to judicial review even if they may arise out of a contract or any scheme of the Government, and therefore, the writ petition cannot be thrown out simply on the technical ground that it is not maintainable.
In view of the above discussion, I am of the considered opinion that the order passed by the Sub Divisional Magistrate/District Magistrate cancelling the licence and the Commissioner, who rejected the appeal preferred against the order of cancellation are public servant and decision taken by them in the garb of a legislation cannot escape judicial review under Article 226 of the Constitution and, therefore, a writ against such an order would lie at the behest of the person aggrieved, irrespective of the nature of his service rendered by him. Moreover, by entering into an agreement, a civil right exists in favour of the petitioners which cannot be taken away on the whims of the authorities.
At this juncture, it would be relevant to point out that in Rajendra Prasad vs. State of U.P. and others [decided on 9th February, 2009 by the Apex Court] the grievance of the appellant before the High Court was that allotment of Fair Price shop at village Kanakpur, district Bhadohi was cancelled by the authority without giving him opportunity of hearing. The High Court summarily dismissed the writ petition. Hence, the appeal by Special leave was preferred by the appellant. The Apex Court after examining the matter and finding that the opportunity of hearing was not afforded, allowed the appeal and quashed the order cancelling the allotment of Fair Price Shop of the appellant and the order passed by the High Court in the writ petition.
This case has been referred to show that the Apex Court did not decline to interfere in the matter on the ground that allotment of fair price shop is a contractual agreement or said that it is not amenable to writ jurisdiction. On the other hand, from this judgement of the Apex Court, it clearly emanates that when there is violation of principles of natural justice, the court can very well interfere in exercise of its discretionary power under Article 226 of the Constitution.
Here, it is not in dispute that in all the aforesaid writ petitions, petitioners have complained that the order of cancellation has been passed in blatant disregard of the principles of natural justice as the copies of the documents utilized against them were not furnished.
Against the order of cancellation, the petitioner has approached the Commissioner by filing an appeal but the appellate authority also dismissed his appeal. Petitioner, after rejection of his appeal, has no other statutory remedy except to invoke the jurisdiction of this Court under Article 226 of the Constitution questioning the validity of the appellate order including the order of cancellation. It may be clarified that the appeal against the cancellation of allotment of fair price shop is creation of the statute. The order of Appellate Authority has also been assailed on various grounds. Therefore, the proceedings of an authority adjudicating upon question affecting the rights , are amenable to writ jurisdiction of the High Court under Article 226 of the Constitution.
To clarify further, it may be mentioned that it is a well recognised law that any authority or body of persons constituted by law or having legal authority to adjudicate upon question affecting the rights of a subject and enjoined with a duty to act judicially or quasi-judicially is amenable to the certiorari jurisdiction of the High Court.
In the backdrop of the aforesaid facts, the order of cancellation of license to run fair price shop under the public distribution system subject to appeal, is ultimately amenable to writ jurisdiction as statutory authority cannot claim immunity from judicial review in respect of its functions vis-a-vis public distribution system. Thus the argument advanced by the State Counsel regarding maintainability of writ petition is wholly misconceived and it is held that the writ petitions are maintainable.
Next, the precise ground though not taken in the counter affidavit but argued by the State Counsel is that it is not mandatory to furnish copy of the preliminary inquiry report or other material relied upon by the licensing authority for cancelling the licence of the fair price shop agreement/licence of the petitioner. Rules of natural justice are not applicable in the matter of cancellation of fair price shop agreement/licence as is required under the service jurisprudence and other matters. The authority concerned under law is not required to furnish copy of the preliminary enquiry report or other documents, therefore, as asserted by the petitioners, there is no violation of principles of natural justice. He clarified that the proceedings in question regarding inquiry, suspension and cancellation of fair price shop allotment of the petitioner have been conducted in consonance with the provisions contained in G.O. dated 29.7.2004, which is self contained and as such there was no question of providing copy of enquiry report to the petitioner.
Natural justice has a prime role to play in the matter where the justice has to be secured. Natural justice is another name for commonsense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense/ liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine its form.
The expressions ?natural justice? and ?legal justice? do not present a watertight classification. It is the substance of justice, which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, no form or procedure should ever be permitted to exclude the presentation of a litigant?s defence.
The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle.
It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. After all, it is an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the ?Magna Carta?. The classic exposition of Sir Edward Coke of natural justice requires to ?vocate, interrogate and adjudicate?. In the celebrated case of Cooper V. Wandsworth Board of Works (1863) 143 ER 414 the principle was thus stated: (ER p.420) ?[E]ven God himself did not pass sentence upon Adam before he was called upon to make his defence. ?Adam? (says God), ?where art thou? Hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat??
Principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice. Inquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than decision in a quasi-judicial enquiry. [emphasis supplied ] Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statue or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute.
What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. The expression ?civil rights but of civil liberties, material deprivations and non-pecuniary damages in its wide umbrella comes everything that affects a citizen in his civil life.
In D.K. Yadav Vs. J.M.A. Industries; (1993) 3 SCC 259 the Apex Court while laying emphasis on affording opportunity by the authority which has the power to take punitive or damaging action held that orders affecting the civil rights or resulting civil consequences would have to answer the requirement of Article 14. The Hon?ble Apex Court concluded as under: -
?The procedure prescribed for depriving a person of livelihood would be liable to be tested on the anvil of Article 14. The procedure prescribed by a statute or statutory rule or rules or orders affecting the civil rights or resulting in civil consequences would have to answer the requirement of Article 14. Article 14 has a pervasive procedural potency and versatile quality, equalitarian in its soul and principles of natural justice are part of Article 14 and the procedure prescribed by law must be just, fair and reasonable, and not arbitrary, fanciful or oppressive.?
In National Building Construction Corporation v. S. Raghunathan; (1998) 7 SCC 66, the Apex Court in unequivocal words held that a person is entitled to judicial review, if he is able to show that the decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to enjoy and which he legitimately expected to be permitted to continue to enjoy either until he is informed the reasons for withdrawal and the opportunity to comment on such reasons.
At this juncture, it would be relevant to produce relevant portion of paragraph 34 of the judgment rendered in State Bank of Patiala and others v. S.K.Sharma, JT 1996(3) SC 722. Though this decision was given in a service matter but the Hon?ble Apex Court has dealt with the principles of natural justice and the result, if it is not followed:-
(1) Where the enquiry is not governed by any rules/regulations/ statutory provisions and the only obligation is to observe the principles of natural justice ? or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action ? the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between ?no opportunity? and no adequate opportunity, i.e. between ?no notice?/?no hearing? and ?no fair hearing?. (a) In the case of former, the order passed would undoubtedly be invalid (one may call it ?void? or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e. in accordance with the said rule (audi alteram partem). (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice, in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. (It is made clear that this principle (No.5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.) (2) While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/Authority must always bear in mind the ultimate and over-riding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the rule to varying situations that arise before them.
In M/s Mahatma Gandhi Upbhokta Sahkari Samiti vs. State of U.P. and others 2001(19)LCD 513 the controversy involved was that the order of cancellation was passed on the basis of inquiry conducted by Sub Divisional Magistrate but the copy of the inquiry report on which reliance was placed was not furnished to the petitioner.
A Division Bench of this Court held that when report of inquiry has been relied upon, that report has to be furnished to the person, who is affected by the same.
The said legal position has been reiterated and followed in a number of decisions rendered by this Court in the case of Dori Lal vs. State of U.P. and others 2006(24)LCD 1521, it has been held that the order cancelling the licence passed without the petitioner being provided the copy of the resolution of the village Panchayat as well as the enquiry report, if any and without being afforded opportunity of submitting explanation and hearing amounts to gross violation of principle of natural justice and hence the order is liable to be quashed.
In Rajpal Singh vs. State of U.P. and others 2008(16) LCD 891, it has been held by this Court that non-furnishing of the inspection report of the Supply Inspector, which was relied upon for cancellation of the licence, amounts to violation of principle of natural justice, hence, the order of cancellation as well as the appellate order was not sustainable in the eyes of law.
Recently, a co-ordinate bench of this Court in Sita Devi vs. Commissioner, Lucknow & others [2011(29) LCD 626] held that the action of the authority in passing the order of cancellation without supplying the copy of the preliminary enquiry report while proving the charges against the petitioner on the basis of said enquiry report is hit by the grave legal infirmity and whole action of the authority is in great disregard of the principles of natural justice.
After peeping into the contentions of both the parties and the series of case laws, referred to above, I am of the considered opinion that the cancellation of a agreement/licence of a party is a serious business and cannot be taken lightly. In order to justify the action taken to cancel such an agreement/licence, the authority concerned has to act fairly and in complete adherence to the rules/guidelines framed for the said purposes including the principles of natural justice. The non-supply of a document utilized against the aggrieved person before the cancellation of his allotment of fair price shop licence/agreement offends the well-established principle that no person should be condemned unheard.
Thus from the series of decisions, referred to herein-above, it clearly comes out that the preliminary enquiry report, inspection report or complaint or any other document which is utilized by the authority while cancelling the licence of a fair price shop licence, same has to be supplied to the licence holder and personal hearing is also to be afforded otherwise the proceedings would be in blatant disregard of the principles of natural justice.
In view of the above, the impugned orders passed by the appellate authority and the order of cancellation are hereby quashed. Needless to say that this order shall not preclude the competent authority from passing appropriate order in accordance with law.
Accordingly, the writ petition stands allowed .
Order Date :- 22.11.2011 RK/*