IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SEVENTEENTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE C.V.RAMULU WRIT PETITION NO : 27076 of 2008 Between: Nagtesh S/o. Mallaiah Paidigummal, Koheer Mandal, Medak District. ..... PETITIONER AND 1 Government of Andhra Pradesh Consumer Affairs, Food and Civil Supplies (CS.I) Department, Rep. by its Ex-Officio Secretary, Secretariat, Hyderabad. 2 Commissioner of Civil Supplies, Civil Supplies Bhavan, Somajiguda, Hyderabad. 3 Collector (CS) Medak District at Sanga Reddy. 4 Revenue Divisional Officer, Sanga Reddy Medak District. 5 Tahsildar, Koheer Mandal, Medak District. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ order or direction more particularly one in the nature of writ of Mandamus declaring the action of the 4th Respondent in issuing Notification NO. B2/6409/2008 dt. 29-11-2008 calling for application to fill up the dealership of F.P. Shop of Paidigummal Village, of Koheer Mandal, Medak District during the pendency of application for renewal of my authorization before him is illegal, arbitrary and contrary to the provisions of the A.P. State Public Distribution System Control Orders 2001 and also para 16 of the Authorization dt. 1-3-2004 in proceedings No. B2/27234/2003 issued by the 4th respondent and also violative of principles of natural justice and set aside the same and consequently direct the 4th Respondent to renew my authorization forthwith. Counsel for the Petitioner: MR.K.RAJI REDDY Counsel for the Respondents: GP FOR CIVIL SUPPLIES The Court made the following : THE HON’BLE SRI JUSTICE C.V. RAMULU W.P. No. 27076 of 2008 O R D E R: This writ petition is filed seeking a Mandamus declaring the action of 4th respondent in issuing Notification No.B2/6409/2008 dated 29.11.2008 calling for applications to fill up the dealership of Fair-Price Shop of Paidigummal village, Koheer Mandal, Medak District, during the pendency of application for renewal of authorization, as arbitrary, illegal, contrary to the provisions of the A.P. State Public Distribution System Control Order,2001 and also para 16 of authorization dated 1.3.2004 in proceedings No.B2/27234/2003 issued by 1st respondent as also violative of principles of natural justice. According to the petitioner, he belongs to S.C. Community and was appointed as Fair-Price shop dealer of Paidigummal village of Kohir Mandal of Medak District vide authorization No.82/2724/2003 dated 1.3.2004 of 4th respondent. The said authorization was valid initially for a period of two years. Subsequently, it was renewed for a further period of two years. Clause 16 of the said authorization contemplates and provides that the holder of authorization shall work for a minimum period of 5 years, unless the authorization is suspended or cancelled by the competent authority, resignation etc. While that being so, 1st respondent issued G.O.Ms.No. 35, Consumer Affairs, Food and Civil Supplies (CS.I) Department dated 17.9.2007 framing guidelines for rationalization of F.P. Shops in the Districts due to increase of Iris based ration cards. As per Para 4 of the said G.O., paramount consideration in creating new fair price shop should be the convenience of the card holders. To strengthen the public distribution network it was decided by the Government to open 2850 F.P. Shops additionally on account of rationalization. This is only an indication of possible number of F.P. Shops approximately to be opened, but the number may be more or less depending on the need. The Collectors were requested to examine the requirement of F.P. Shops for each and every village/ward keeping in view the said guidelines, create new shops and intimate the number of shops finally opened in the district to the Government within 45 days. All cardholders of the newly created shops shall be intimated on the creation of new shops, locality where they can draw the commodities. Further, para 5 of the said G.O. contemplates that the Government after careful consideration of the matter ordered ratonalisation of existing shops in the State by attaching the required number of cards to each shop for convenience of the cardholder in the locality and keeping in view the economic viability of F.P. Shop and issued the following instructions: “ (a). Rural areas: The number of Iris based ration cards to be attached to each of fair price shop is 400 to 450 BPL and 50 pink cards. (b) .. (c) .. ”. In pursuance to the said G.O., 5th respondent addressed a letter to 4th respondent proposing bifurcation of F.P. Shop No. 24 situated at Paidigummal village and creation of new F.P. Shop at Paidigummal for the convenience of card holders. As per the existing population of 3040, there are 620 white cards, 63 AAY cards and 14 pink cards, totaling 697. A proposal was sent for bifurcation of F.P. Shop No.24/1 (new) for the population of 3040, 310 white cards, 32 AAY cards and 7 pink cards, totaling 349. For the existing fair price shop, nothing was mentioned in the population column, but it is stated that the said F.P. shop has to distribute commodities to 310 white cards, 31 AAY cards and pink cards 7, totaling 348. The said proposal of bifurcation by 5th respondent itself is contrary to para 5 of G.O.Ms.No.35, wherein it is stated that for the Rural areas, the number of Iris based ration cards to be attached to each of fair price shop is 400 to 450 BPL and 50 pink cards. Immediately after coming to know about the same, the petitioner filed a representation to the respondents 3 and 4 stating, inter alia, that there is no need for creation of another F.P. shop, as the existing F.P. shop is enough to cater the needs of the cardholders and requested to drop the said proposal. According to the petitioner, he was allotted F.P.Shop dealership to distribute commodities to 621 white cards and 60 AAY cards, but to his surprise, contrary to the guidelines contained in G.O.Ms.No.35 dated 17.9.2007, without passing any orders on the representation filed by the petitioner and contrary to Clause 16 of Authorisation, 4th respondent has issued a Notification dated 29.11.2008 vide Proceedings No. B2/6409/2008 calling applications from the eligible candidates to be appointed as F.P. Shop dealer of Paidigummal village as if it is vacant and the last date for receiving applications was 18.12.2008. The petitioner also submitted his application for renewal of Authorisation, in terms of Clause 5(5)(iii) of A.P. State Public Distribution System Control Order, 2001, which was acknowledged by the office of 4th respondent and the same is pending. Clause 5(5)(iii) reads as under: “The authorization may be renewed if the application for renewal is received within one month after expiry period of its validity, subject to payment of fees prescribed therefor. However, if an application for renewal of authorization is not made within one month, after the expiry of its validity, the entire security deposit under sub- clause (2) of Clause 3 shall be forfeited. (iv) authorization is not transferable. Provided that the validity of authorization shall not be deemed to have expired if an application for renewal as required under sub-clause is pending before the Disciplinary authority as the case may be”. According to the petitioner, if the application for renewal is pending, after paying prescribed fee, unless that is disposed of, it cannot be said that the authorization of the petitioner is ceased to exist. As long as the authorization is not seized, issuance of fresh notification calling for applications to appoint fair price shop dealer of Paidigummal village by 4th respondent does not arise. Further, as per Clause 5(4) of the Control Order, 2001, the appointing authority may, at any time, at the request of authorized F.P. Shop or authorized establishment or suo motu, after making such enquiry as may be deemed necessary and for the reasons recorded in writing, add, amend, vary, suspend or cancel the authorization issued or deemed to have been issued under the said clause. In the instant case, since the petitioner opposed the proposal of bifurcation, his application for authorization was kept pending and further respondents 3 and 4 have not passed orders on the same. As such, the procedure adopted by respondents 4 and 5 is in violation of principles of natural justice. Further, a fresh notification was issued without any notice or without any enquiry under Clause 5(4) of the Control Orders, 2001 and issuance of such fresh notification during the pendency of the application for renewal of authorization amounts to suspension of authorization without issuing show-cause notice. Therefore, the impugned notification issued by 4th respondent is arbitrary, illegal and liable to be set aside. A detailed counter affidavit has been filed on behalf of respondents stating that the Government has issued G.O.Ms.No. 35 dated 17.9.2007 and the statement of existing cards under circulation and a copy of the above G.O. was placed before the Mandal Level Food Advisory Committee of Koheer Mandal on 3.1.2008 and the committee, after examination of the proposal in terms of G.O.Ms.No. 35 dated 17.9.2007 have taken a decision and passed resolution on 3.1.2008 proposing for the bifurcation of existing F.P. Shop Paidigummal village into two. As such, keeping in view the necessity of bifurcation of existing F.P. Shop Paidigummal village in the light of the above G.O.Ms.No. 35 and as per the above resolution dated 3.1.2008, the required proposals were submitted to the Revenue Divisional Officer, Sangareddy for placing it before the Collector (CS), Medak vide Lr.No.A/740/2007 dated 15.12.2007 for its approval. After examination of proposals of the Tahsildar, Koheer Mandal, the Revenue Divisional Officer, Sangareddy has submitted proposals to the Collector (CS), Medak vide Lr.No.B2/6296/2007 dated 7.2.2008 for the bifurcation of existing F.P. Shop, Paidigummal village into two equal F.P. Shops, in response of G.O.Ms.No.35 dated 17.9.2007. It is further stated in the counter affidavit that the issue of notification and filling up of vacant F.P. Shop is a regular process. The R.D.O. Sangareddy never issued any order to the existing F.P. Shop dealer, Paidigummal village, namely, the petitioner, saying that his authorization is cancelled or his F.P. Shop is being notified. The bifurcation was made as per the guidelines issued by the Government in G.O.Ms.No. 35 dated 17.9.2007 and as per the orders of the Collector (CS), Medak at Sangareddy vide Lr.No.CSB/644/2007 dated 14.3.2008. The cards were allotted to existing F.P. Shop Dealer, Paidigummal village as per the guidelines issued by the Government in G.O.Ms.No.35 dated 17.9.2007. The bifurcation of F.P. Shops is an administrative policy of Government; as such, there was no necessity to hear the objections of F.P. Shop Dealers and there is no necessity to call for objections. Further, the petitioner himself filed application for renewal of his existing authorization before the Revenue Divisional Officer, Sangareddy and the same authorization was renewed by the R.D.O. Sangareddy vide Lr.No.B2/1670/2008 dated /4/2008, renewing up to 31.3.2010. Therefore, the contention of the petitioner is totally incorrect and the bifurcation orders passed by the Collector (CS), Medak are in accordance with G.O.Ms.No. 35 dated 17.9.2007. As such, the present notification is issued for the newly created F.P. Shop in Paidigummal village but not for the existing F.P. Shop of the petitioner at Paidigummal village. The writ petition is devoid of merit and liable to be dismissed. Apart from the contentions raised in the affidavit filed in support of the writ petition, learned counsel for the petitioner strenuously contended that the policy envisaged vide G.O.Ms.No.35 dated 17.9.2007 is altogether different from bifurcating a shop into two or three without giving notice to the affected parties. G.O.Ms.No.35 dated 17.9.2007 lays down policy of the Government for the purpose of bifurcation of the shops wherever it is necessary in the larger public interest and certain guidelines were also laid down therein, but, when the guidelines are sought to be implemented, it is necessary that the affected parties must be given notice so that they can file objections, more particularly, when the bifurcation sought to be made is contrary to the guidelines issued by the Government. Such a course is not followed. Further, no notice of any kind was issued before passing bifurcation orders and also the notification. Therefore, the same is liable to be quashed. Whereas, learned Government Pleader appearing for the respondents strenuously contended that the policy made under G.O.Ms.No. 35 dated 17.9.2007 was already upheld by the Supreme Court. Therefore, there is no necessity of issuing any notice either before bifurcation or before issuing notification to fill up the bifurcated shop. The Rules are statutory in nature. Further, G.O.Ms.No.35 itself is not under challenge and the said G.O. was upheld by this Court in many number of cases. Neither any promise was made to the petitioner nor the doctrine of legitimate expectation is applicable in a case of this nature. It is purely a policy decision and it was upheld by the Supreme Court; therefore, no interference can be made by this Court under Article 226 of the Constitution of India. In support of his contention, the learned Government Pleader relied upon the following decisions: (1). W.P. No. 22586 of 2007 and batch dated 12.3.2008, wherein a single Judge of this Court held: “The minimum number of cards and the economic viability of such fair price shops always to be kept in mind though the public interest involved may have to be given due weight. Inasmuch as this is a policy decision taken by the State Government, this Court is not inclined to disturb the same. But at the same time even in the light of the specific stand taken in the counter- affidavits this Court does again emphasize that the economic viability to be kept in mind while adjusting or arranging the fair price shops. Except emphasizing and making this observation the impugned G.O. cannot be found fault and especially in the light of the limitations imposed on this Court while interfering with policy matters while exercising power under Article 226 of the Constitution of India these writ petitions are liable to be dismissed and accordingly hereby dismissed subject to the above observations. No costs”. (2). District Collector and another v. B. Suresh and others[1] wherein the Supreme Court held: “Under the provisions of the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, which order has been framed under the provisions of the Essential Commodities Act, 1955 a Fair Price Shop Dealer has no right to be appointed as such dealer. The licence which such dealer has obtained under the provisions of the Act to deal with the commodities has not been cancelled. The right to trade under Article 19(1)(g) of the Constitution of India is not being affected in any manner. The Government, as a policy decision, decided to reduce the number of cards per dealer. Such decision does not affect the rights, if any, of the Fair Price Shop Dealers and as such the High Court was in error to hold that they were to be given any notice prior to the impugned decision of the State Government”. (3). W.P. No. 12110 of 2004 dated 20.6.2005, wherein a learned single Judge of this Court held: “It is now well settled that a FPS dealer, appointed under Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, which is now stands replaced by Andhra Pradesh State Public Distribution System Control Order 2001, has no right to be appointed as such dealer. Therefore, if the Government has decided to reduce number of cards to a dealer, the FPS dealer cannot question the same. Learned Assistant Government Pleader for Civil Supplies, however, submits that as per G.O.Ms.No. 25 dated 18.3.1998, any person aggrieved by the orders passed by the District Collector ordering bifurcation, has right of appeal before the Director of Civil Supplies. In view of the remedy of appeal, liberty is reserved to petitioner to file appeal before the Director of Civil Supplies within one week from the date of receipt of a copy of this order. As and when such appeal is filed, the same may be entertained and decided by the Director of Civil Supplies on its own merits regarding viability of petitioner’s FPS”. (4). W.P. No. 3619 of 1991 dated 19.3.1991 wherein a learned single Judge of this Court held: “The State cannot confer monopoly only on one person. Distribution of commodities is made for distribution of commodities to the needy persons under card system. When the authorities considered that the commodities can be distributed for 695 card holders by two persons instead of one person, it cannot be interfered with under Article 226 of the Constitution. When a reasonable classification has been made dividing 370 cards and 325 cards, it cannot be said that the petitioner’s right to distribute has been taken away. It is for the authorities to decide whether one person or two persons can distribute the commodities to the card holders and it is not for this Court to decide whether there is any justification for opening another shop or not”. (5). W.P. No. 454 of 1991 dated 26.4.1991 wherein a Division Bench of this Court held: “We do not see any reason to interfere with the order under appeal. Out of 695 cards, originally allotted to the Fair Price Shop of the appellant, 370 cards were allotted to another shop and 325 were retained with the appellant. The order passed by the District Collector on 22.2.1991 effecting the bifurcation has taken into account all the relevant aspects. The learned single Judge has, therefore, rightly declined to interfere with an administrative order which does not suffer from any legal infirmity. We, therefore, confirm the view taken by the learned single Judge and dismiss the writ appeal”. (6). K. Sreenivasulu Naidu v. The District Collector, Chittoor and Others[2], wherein it is held: “Suffice to say that the Supreme Court has elaborately considered the position of administrative decisions in the administrative law in various decisions. The principle can be summarized thus: 1. The Rule audi alteram partem is one of the basic principles of natural justice. 2. The principle is not only held to be applicable to quasi-judicial proceedings but also administrative proceedings involving civil consequences. 3. The dividing line between quasi- judicial power and administrative power is not totally eclipsed and obliterated. 4. Principles of natural justice is not embodied rule, but it is flexible, mallable and adoptable. 5. The application of the rule depends upon facts and circumstances of each case. 6. The rule operates in areas not covered by any law validly made. 7. They do not supplant the law, but supplement the law”. It was further held therein as follows: “The Government is the best master to decide ways-and-means of distribution of the essential commodities to the public so that every citizen should be able to receive the essential commodities with least convenience. Further, in the authorization it is no where mentioned that he shall have the right of distribution to 794 card holders. The Government have been issuing instructions from time to time for establishing Fair Price Shop basing on the population and also basing on the cards. As per the Memo issued by the Government bearing No.40829/CS-IV-I/91-1 dated 26.7.1991, there shall be at least one Fair Price Shop for 1650 persons or about 330 cards. Keeping this in view the authorities have been directed to create a new Fair Price Shop in the public interest”. It was also held therein: “Further, the issue can also be considered on merits. On account of deletion of the cards, still the petitioner is having 387 cards which is above the minimum fixed by the Government. By virtue of possessing authorization the petitioner would have only right to distribute the essential commodities, but he cannot have a right to claim that the cards attached to his shop cannot be reduced. However, this cannot be construed as conferring of power on the State to reduce the cards far below the economic viability level”. I have given my earnest consideration to the respective submissions made by the learned counsel on either side and perused the impugned order and other material made available on record. Though several judgments have been cited by the learned Government Pleader appearing for the respondents as noticed above, no judgment which has considered Clause 5(4) of the Control Orders, 2001 has been brought to the notice of this Court. Clause 5(4) of the Control Order, 2001 clearly says that “the appointing authority may at any time at the request of authorized F.P. Shop or authorized establishment or suo motu, after making such enquiry as may be deemed necessary and for the reasons recorded in writing, add, amend, vary, suspend or cancel the authorization issued or deemed to have been issued”. In the instant case, the proposed bifurcation is nothing but varying the authorization by reducing the cards and creating a new shop. Therefore, I am of the opinion that the petitioner is entitled for a notice before varying the authorization. In this case, admittedly, no such notice has been issued even at the time of bifurcation or, much less, at the time of issuing impugned notification. In T. Ramanjaneyulu v. State of A.P. and others[3], this Court held: “There can be no dispute about the ratio laid down in District Collector and another v. B. Suresh and others (referred (1) supra) that a fair price shop dealer has no right to be appointed as such dealer and the right to trade under Article 19(1)(g) of the Constitution of India is not being affected in any manner. However, it is relevant to note that under G.O.Ms.No. 35 dated 17.9.2007 the Government have fixed the minimum number of cards to be maintained with each fair price shop, keeping in view not only the convenience of the card holders but also the viability of the fair price shop. Notwithstanding the minimum cards so prescribed, the District Collector, who is the competent authority for sanctioning new F.P. Shop, may, in appropriate cases, to avoid inconvenience to the cardholders or to avoid any law and order problem in the village, effect bifurcation of the existing shops. Since the convenience and interest of the consumers is paramount consideration in the Public Distribution System, such discretion exercised by the District Collector cannot be held to be bad merely on the ground that the existing dealer is left with less than the minimum number of cards prescribed under G.O.Ms.No. 35 dated 17.9.2007. However, before effecting bifurcation on such grounds, the principles of natural justice require giving an opportunity to the existing dealer to make his representation with regard to the ground on which the bifurcation is proposed”. In the instant case, admittedly, there was no notice to the petitioner before effecting bifurcation and even a copy of the order of bifurcation was not served on him. It is also not in dispute that the cards attached to the petitioner’s shop are less than the minimum number of cards prescribed under G.O.Ms.No. 35 dated 17.9.2007. According to the respondents, bifurcation was effected in the public interest and in the interest of the consumers. Be that as it may, this Court is of the considered view that since the allotment of cards in favour of the petitioner is part of the conditions of authorization held by the petitioner, as and when the same is varied, petitioner is entitled to a notice under Clause 5(4) of the Control Orders, 2001. Therefore, the contention of the learned Government Pleader that Clause 5(4) of the Control Orders, 2001 contemplates issuance of notice in case of disciplinary proceedings initiated against F.P. Shop dealer in case of irregularities attributed to him and not in a case of this nature and Clause 5(4) has no application to the case of the petitioner, cannot be accepted. The principles of natural justice and the provisions of Clause 5(4) of the Control Orders, 2001 command issuance of notice before effecting bifurcation of a Fair Price Shop. In this case, admittedly, no such notice