THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.29143 OF 2008 DATED MARCH, 2011 BETWEEN Kola Ramakrishna …Petitioner And The Joint Collector, East Godavari District At Kakinada and others. …Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.29143 OF 2008 O R D E R The Revenue Divisional Officer, Kakinada, East Godavari District, the second respondent, cancelled the authorization of the petitioner as the dealer of Fair Price Shop No.3-A of S.Atchutapuram Village, Kakinada (Rural) Mandal, East Godavari District, under proceeding dated 09.07.2008. Hence, this writ petition. This Court, by order dated 31.12.2008, suspended the impugned proceeding. Claiming to have been appointed as the dealer for the subject Fair Price Shop after the cancellation of the petitioner’s authorization, the third respondent got herself impleaded in the writ petition. It is the case of the petitioner that under Clause 5(4) of the Andhra Pradesh State Public Distribution System (Control) Order, 2001 (for brevity, ‘the Control Order of 2001’), the authorities had to conduct an independent enquiry before cancelling his authorization, which was not done. According to him, the second respondent merely relied upon the result of the Section 6-A case under the Essential Commodities Act, 1955 (for brevity, ‘the Act of 1955’) and cancelled his authorization. The Revenue Divisional Officer, Kakinada, East Godavari District, the second respondent, stated in his counter that the subject Fair Price Shop was inspected on 07.04.2007 in the presence of mediators and various irregularities were detected. A case was initiated against the petitioner under Section 6-A of the Act of 1955 and his authorization was suspended pending enquiry. The Section 6-A proceedings before the Joint Collector, East Godavari, culminated in the order dated 19.02.2008, directing confiscation of 60% of the value of the seized stock. Simultaneously, proceedings had been initiated for cancellation of the petitioner’s authorization, by issuing show cause notice dated 11.04.2007. The petitioner failed to give a reply to the show cause notice dated 11.04.2007 and his authorization was cancelled under the impugned proceeding dated 09.07.2008 duly following the procedure. The second respondent therefore prayed for vacating of the interim order dated 31.12.2008. The third respondent, in her counter, stated that after the cancellation of the petitioner’s authorization in respect of the subject Fair Price Shop, the Revenue Division Officer, Kakinada, called for applications for filling up the dealership of the said shop on a permanent basis and after following the due procedure, she was selected and appointed as the dealer for the subject Fair Price Shop under order dated 30.12.2008. She stated that the petitioner had failed to challenge the proceedings under Section 6-A of the Act of 1955 and did not choose to file an appeal against the cancellation of his authorization. According to her, it was only after coming to know of her appointment that the petitioner filed the present case. She supported the stand of the authorities that the petitioner’s authorization was liable for cancellation owing to the irregularities committed by him and sought vacating of the suspension granted by this Court, which had the effect of keeping her appointment in abeyance. Heard Sri A.S.C.Bose, learned counsel for the petitioner, Sri M.Lakshmana Sarma, learned counsel for the third respondent and the learned Government Pleader for Civil Supplies for the authorities. With the consent of the learned counsel, the main case is taken up for disposal. Sri A.S.C.Bose, learned counsel, placed reliance on case law to support his contention that cancellation of his client’s authorization, not being preceded by an independent enquiry, could not have been on the basis of the result of the Section 6-A case under the Act of 1955. I n M.SHASHIKALA V/s. THE COLLECTOR, CIVIL SUPPLIES, MAHABUBNAGAR DISTRICT[1], a Division Bench of this Court, while dealing with the Andhra Pradesh Scheduled Commodities Dealers (Licensing and Distribution) Order, 1982 and the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, held that the nature of proceedings under Section 6-A of the Act of 1955 and the proceedings for cancellation or suspension of the authorization under Clause 3(4) of the Control Order were different and distinct. The Division Bench was of the opinion that in so far as the Appointing Authority under Clause 3(4) of the Control Order is concerned, he has to take an independent decision in the matter instead of mechanically following the orders that may be passed under Section 6-A of the Act of 1955 or where no orders under Section 6-A have been passed and proceedings are still pending. The Bench further held that the Appointing Authority under the Control Order cannot pass interim orders of suspension of the authorization on the ground of mere pendency of an enquiry under Section 6-A of the Act of 1955 as there was no such empowering provision in the Control Order. In G.ANJANEYULU V/s. COLLECTOR (CIVIL SUPPLIES), MAHABOOBNAGAR[2], a learned Judge of this Court, in the context of the Control Order of 2001, held that mere confiscation of essential commodities under Section 6-A of the Act of 1955 cannot, by itself, result in cancellation of the dealership. The learned Judge observed that for that purpose separate and independent proceedings have to be initiated by the competent authority, the Revenue Divisional Officer concerned. The learned Judge referred to Clause 5(4) of the Control Order of 2001 which mandates that any such action should be preceded by a show cause notice and an enquiry. In that case, the cancellation of the authorization was consequent upon the direction to do so by the authority under the Act of 1955 who dealt with the Section 6-A case without any other independent proceedings. I n AZMEERA BOOPATHI NAYAK V/s. DISTRICT COLLECTOR (CIVIL SUPPLIES), KARIMNAGAR[3], a learned Judge of this Court observed thus: “7. ……… The authority exercising the power under the A.P. Scheduled Commodities Dealers (RDCS) Order shall take an independent decision after considering the relevant facts and after giving due opportunity of making representation to the petitioner and then only pass an order under Clause 3(4). That the principles of natural justice apply even though Clause 3(4) of the Control Order does not specifically say so, cannot be doubted. In the present case, no show-cause notice was issued to the petitioner framing charges and the petitioner was never called upon to submit his explanation. As already stated, the sole ground for the cancellation of authorization and for dismissal of the appeal is that confiscation of the seized goods was ordered under Section 6-A. This cannot form the sole basis for passing an order under Clause 3(4) of the Control Order. It may be the competent authority can take into account the relevant material as disclosed from Section 6-A proceedings, and propose to rely on them in the show-cause notice. But as I have already held it is the satisfaction of the authority exercising power under Clause 3(4) of the Control Order that is material but not the satisfaction reached in the course of the proceedings under Section 6-A of the Essential Commodities Act. The findings in the proceedings under the Essential Commodities Act may, at the most, be relevant but not binding on the authority exercising the power under Clause 3(4) of Control Order. ………” It may be noticed that reference was made by the learned Judge to the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973 and not the Control Order of 2001 which superceded it. The impugned proceeding dated 09.07.2008 to the extent relevant reads as under: “In this connection, the authorization of the above dealer was suspended in the ref.2nd read above and the dealer has been directed to submit his explanation on the above lapses in the ref.3rd read above. The dealer has failed to submit any explanation in this regard. In this connection, in the ref.4th read above, the Court of the Joint Collector, East Godavari, Kakinada disposed the case and issued orders that 60% (sixty percent) of the value of seized stock confiscated to the Government under 6A of Essential Commodities Act, 1955. The total value of the seized stock is Rs.18970/- . In view of the above circumstances, the authorization of the above dealer Sri Kolla Ramakrishna, F.P.Shop No.3A of S.Atchutapuram Village of Kakinada (Rural) Mandal is hereby cancelled and the dealer is hereby dismissed. The Tahsildar, Kakinada (Rural) is requested to take necessary action accordingly.” The crucial fact that needs to be noted is that though he was put on notice, the petitioner failed to submit his explanation with regard to the irregularities alleged against him. This fact becomes relevant in the context of the complaint now made by the petitioner that there was no independent enquiry prior to the cancellation of his authorization. Clause 5(4) of the Control Order of 2001 reads as under: “5. Issue of Authorization to Fair Price Shops and Establishment:–– (1) ……… (2) ……… (3) ……… (4) The appointing authority may, at any time where at the request of the authorized fair price shop or authorized establishment or suo motu after making such enquiry as may be deemed necessary and for reasons to be recorded in writing, add to, amend, vary, suspend or cancel the authorization issued or deemed to be issued to him under this clause. ………” Clause 19 of the Control Order of 2001 is also relevant: “19. Further conditions to be observed by the authorized Fair Price Shops: –– The authorized Fair Price Shop dealers should follow the conditions stipulated in paragraph 3 of the Annexure to this order. Paragraph 3, Clause (5) of the Annexure to the Control Order of 2001 reads as under: “(5) The authorization issued under this Order shall be liable for suspension or cancellation as the case be, if the Fair Price shop dealer is involved in any criminal case or when any case under Essential Commodities Act, 1955 or any other similar law is pending against him/her.” Thus, in the scheme of the Control Order of 2001, mere pendency of a criminal case or a case under the Act of 1955 may be sufficient for suspending or cancelling a Fair Price Shop dealership, as the case may be. This clause was not considered in G.ANJANEYULU2 and AZMEERA BOOPATHI NAYAK3. However, it may be noticed in G.ANJANEYULU2, the learned Judge was dealing with a case where the authority who dealt with the Section 6-A case under the Act of 1955 himself directed cancellation of the authorization and no separate and independent proceedings were initiated by the Appointing Authority. Such not being the situation in the case on hand, the said decision has no application. Similarly, in AZMEERA BOOPATHI NAYAK3, the learned Judge was considering the superceded Order of 1973 and did not take into consideration the relevant clauses of the Control Order of 2001. In any event, the learned Judge was also of the opinion that proceedings under Section 6-A of the Act of 1955 were not irrelevant for suspension/cancellation of the authorization of the Fair Price Shop dealer concerned. This Judgment, being distinguishable, is also of no avail to the petitioner. The Division Bench Judgment in M.SHASHIKALA1 was delivered in the context of Control Orders which no longer hold the field. The observations therein, which are at variance with the legal regime obtaining in the Control Order of 2001, therefore have no application to the present case. Thus, as matters stand, under the Control Order of 2001 the mere pendency of a Section 6-A case under the Act of 1955 would be sufficient reason for suspending/cancelling the authorization of the Fair Price Shop dealer concerned. Whether the discretion conferred by the said clause in the Control Order of 2001 has been correctly exercised in a given case would no doubt be subject to judicial review but there can be no dispute that the pendency/result of such a case is relevant for the purpose of suspension/cancellation of the authorization. The petitioner failed to respond to the show cause notice dated 11.04.2007 and having suffered an adverse order in the Section 6-A case under the Act of 1955, did not choose to file an appeal under Section 6-C thereof. In such circumstances, the failure on the part of the Revenue Divisional Officer, Kakinada, to hold further enquiry into the matter did not cause any prejudice to the petitioner. Clause 5(4) of the Control Order of 2001 speaks of ‘such enquiry as may be deemed necessary’. Given the facts and circumstances of the case, the action of the Revenue Divisional Officer, Kakinada, in opining that the material available on record was sufficient to sustain cancellation of the petitioner’s authorization, without further enquiry, cannot be said to be contrary to the provision. All the more so, in the context of Paragraph-3(5) of the Annexure to the Control Order of 2001 which permits suspension/cancellation of the authorization owing to mere pendency of a criminal case or a case under the Act of 1955. Towards the end of the hearing, Sri A.S.C.Bose, learned counsel, advanced the plea that his client may be permitted to withdraw the writ petition with liberty to avail the alternative remedy of an appeal against the impugned proceeding. However, as the petitioner himself chose to approach this Court against the impugned proceeding dated 09.07.2008 without availing the appellate remedy within time and allowed the authorities to conduct fresh selections and appoint the third respondent in his place, it is now too late in the day for him to seek to turn back the clock. The said plea is therefore rejected. For the reasons stated above, this Court is of the opinion that the impugned proceeding dated 09.07.2008 does not suffer from any illegality and is not in violation of the procedure prescribed under the Control Order of 2001. The Writ Petition is devoid of merit and is accordingly dismissed. The interim order dated 31.12.2008 shall stand vacated. No order as to costs. ____________________ SANJAY KUMAR, J. _______ MARCH, 2011. PGS/VGSR [1] 1997 (2) ALT 574 (DB) [2] 2005 (2) ALT 410 [3] 2008 (4) ALD 513