THE HON’BLE SRI JUSTICE V.V.S. RAO WRIT PETITION No.26029 of 2009 11.3.2010 Between: Kumpati Ramaiah, S/o.Polaiah … Petitioner AND The Collector and District Magistrate, Ongole, Prakasam District And others … Respondents THE HON’BLE SRI JUSTICE V.V.S. RAO WRIT PETITION No.26029 of 2009 ORDER: The petitioner assails the order dated 18.11.2009 of first respondent confirming the order of second respondent, who in turn confirmed the order dated 25.3.2006 of third respondent cancelling Fair Price Shop (FPS) dealership of petitioner. The interlocutory application for extension of interim orders as well as application for vacating interim order are listed. With the consent of respective counsel, the matter is heard finally and is being disposed of by this order. The case of petitioner, who belongs to scheduled caste community, is as follows. He was appointed as FPS dealer of P.Venkatapuram in 1983. Third respondent suspended the dealership by proceedings dated 11.8.2004 on an allegation that he contravened conditions of dealership and committed irregularities in distribution of essential commodities. The petitioner approached the appellate authority – second respondent herein. By an order dated 18.1.2005, appeal was allowed and the matter was remanded to third respondent for completing enquiry and passing final order after giving show cause notice to petitioner. Thereafter, after giving show cause notice, third respondent passed orders on 29.6.2005 cancelling authorization of petitioner as FPS dealer. Petitioner filed writ petition being W.P.No.16826 of 2005 assailing the same. By an order dated 05.12.2005, this Court set aside the same and remanded the matter to third respondent with a direction to pass appropriate orders after affording an opportunity to petitioner. In obedience thereto, notice was issued on 27.1.2006 and on 04.2.2006. Again on 25.3.2006 third respondent passed orders cancelling the authorization of petitioner. He then preferred appeal before the second respondent, which was dismissed on 16.7.2007. As noticed supra, petitioner was unsuccessful before the revisional authority, namely, first respondent. In this writ petition, the impugned order is challenged mainly on the ground of violation of principles of natural justice, mala fide exercise of power and non-application of mind. Fourth respondent filed counter affidavit on behalf of respondents 1 to 4. While supporting the impugned order, it is stated that on 06.8.2004, Ramachandra Reddy and others of the P.Venkatapuram village submitted a petition to fourth respondent alleging that petitioner was not properly distributing essential commodities to cardholders and that he was charging higher price than fixed by the Government. Fourth respondent got conducted enquiry by the Deputy Tahsildar (Enforcement), Giddaluru, and submitted a report to third respondent pointing out the irregularities. Petitioner was suspended and fifth respondent herein was appointed as temporary FPS dealer of P.Venkatapuram to facilitate distribution of essential commodities to cardholders. Subsequently after following the procedure, third respondent cancelled the authorisation of petitioner, which is confirmed by appellate authority as well as revisional authority. The other aspects of history of case remain uncontraverted. Fifth respondent filed a separate counter affidavit with the following allegations and averments. Petitioner is involved in S.C.No.383 of 2006 under Sections 147, 148, 324, 307, 427 read with 149 of Indian Penal Code, 1860 and Sections 3 and 4 of Explosives Substances Act, 1908, on the file of the Court of Additional District and Sessions Court (Fast Track Court), Markapuram, besides other criminal cases. Petitioner is also President of MRPS (Mandal Level). Taking advantage of this, he threatened cardholders. Therefore they did not complain against irregularities in distribution of essential commodities. Petitioner supplied lesser quantity of rice than prescribed and at higher price to Antodaya cardholders, weighed less and did not maintain records. Several representations were made by cardholders. Therefore, third respondent initiated necessary action and cancelled the authorization of petitioner. While denying the allegation that the petitioner is continuing as FPS dealer from 04.8.2007, it is stated that fifth respondent was appointed as temporary dealer from 11.8.2004 but charge was not handed over and FPS dealer, Gantapuram village, supplied essential commodities from 11.8.2004 till 06.8.2009. Pursuant to the interim order dated 04.8.2007 of revisional authority, petitioner was allowed to supply essential commodities. By impugned order dated 18.11.2009, District Collector vacated the interim order dated 04.8.2007. Petitioner has not chosen to file reply affidavit denying allegations made in the separate counter affidavits filed by fourth respondent and fifth respondent. The counsel for petitioner made the following submissions. The charges framed by third respondent are vague. There was no inspection done nor any evidence was available to prove the allegations of contravention of control order or conditions of authorisation. Secondly petitioner was not given adequate opportunity and the material, which was relied on by third respondent, was not supplied to petitioner. Thirdly, appellate authority did not conduct any enquiry and that the order passed by appellate authority is vitiated by non-application of mind. Lastly, revisional authority also took into consideration the allegation, which was not considered by the appellate authority. Reliance is placed on S.Malla Reddy v M.Vijayalakshmi[1], M.Kalyani v District Collector, Ongole[2] and N.Santha Kumari v Government of Andhra Pradesh[3]. The Assistant Government Pleader for Civil Supplies and Counsel for fifth respondent submit that adequate opportunity was given to petitioner, that he never complained about the same and that the orders passed by original, appellate and revisional authorities are legal and valid. They also submit that based on the evidence on record, original authority came to the conclusion that charges are proved and petitioner did not produce any material to disprove the charges. Enquiry by the disciplinary authority There is no dispute that the Revenue Divisional Officer is appointing authority as well as disciplinary authority. There is also no denial that the appointing authority is empowered to cancel authorisation under clause 5(5) of the Andhra Pradesh State Public Distribution System (Control) Order 2008 (2008 Control Order). The said clause reads as under. 5. Issue of Authorisation to Fair Price Shops, Nominated Retailers, Hawkers and Establishment:- (5) The appointing authority may, at any time whether at the request of the authorized fair price shop dealer/nominated retailer/hawker or authorized establishment on 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. (emphasis supplied) The relevant provision does not specifically contemplate the method and manner of conducting enquiry. The discretion is given to competent authority “to make such enquiry as may be deemed necessary.” It is to be considered as to what is the nature of enquiry when FPS dealership/authorisation is to be cancelled. Does it contemplate enquiry like a trial in the Court or does it contemplate summary enquiry with or without opportunity of being heard. The Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973 (1973 Control Order) contained clause ipsissima verba to clause 5(5) extracted hereinabove. The Andhra Pradesh State Public Distribution System (Control) Order, 2001, which was preceded by 1973 Control Order also contained similar provision. I n M.Sadasiva Sekhar v District Collector, Kurnool[4], this Court considered the question whether RDO while passing order of cancellation as required to afford an opportunity of being heard to FPS dealer. This Court also considered the question of nature of enquiry to be conducted by RDO as contemplated under clause 3(4) of 1973 Control Order. After referring to relevant case law, this Court explained the scope of relevant clause as under. The above sub-clause confers power on the appointing authority to suspend or cancel the authorization subject to conducting enquiry and recording reasons. The phrase “after making such enquiry as may be deemed necessary” makes it plain that discretion is vested in the appointing authority as to the nature, method and manner of conducting enquiry as is deemed necessary. There can be no hard and fast rule that in every case of suspension or cancellation, the appointing authority should afford an opportunity of being heard to the fair price shop dealer. No doubt, the word “enquiry” into the allegations against a dealer has a broad connotation and provides for an opportunity of filing explanation to the parties and/or affording a right of hearing, because the legislature used the words “such enquiry as may be deemed necessary”, we have to give a restricted meaning to the phrase and leave it to the appointing authority whether or not the fair price shop dealer should be heard. It is not possible to accept the submission of the learned counsel for the petitioner and supply the words so as to make sub-clause (4) of Clause 3 read ‘providing opportunity of being heard’. (emphasis supplied) The undisputed factual position from perusal of the order passed by original authority and the affidavits filed in this case is the following. Kancharla Subba Reddy, ward member and ration cardholder, and 20 others submitted representation dated 23.7.2004 to Deputy Tahsildar (Enforcement), Giddaluru. They complained that petitioner distributed essential commodities for first five days only, that he is in the habit of informing cardholders that there is no stock, that he is diverting the stock to black-market and also threatening cardholders that he would lodge complaint under Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989. They also complained that he distributed only 25 Kg rice against entitlement of 35 Kg to Antodaya cardholders. In addition, one Srinivasa Reddy and 31 others also submitted a complaint on 20.7.2004. The Tahsildar ordered inspection. After obtaining the report, Tahsildar sent a communication dated 09.8.2004 to third respondent to cancel FPS dealership for committing irregularities in distribution of essential commodities. A show cause notice was issued framing two charges that petitioner contravened condition 4(1)(2) of authorisation and did not distribute essential commodities to cardholders, that he failed to supply 35 Kg and supplied only 25 Kg to Antodaya cardholders and that petitioner kept coupons with him without returning to cardholders. The second charge is that petitioner distributed essential commodities at higher prices, did not weight commodities properly and failed to maintain records and that he is threatening the cardholders and thereby violated condition 7 of the authorisation. There is no dispute that petitioner submitted explanation on 27.8.2004 denying the charges. He also alleged that all the allegations are concocted at the instance of Srinivasa Reddy and his followers, who are bent upon removing petitioner as FPS dealer. After receiving explanation, third respondent gave opportunity vide notices dated 27.1.2006 and 04.2.2006, verified the registers and recorded findings on each of the charge with reference to registers and records. The issue of notice, opportunity of being heard, verification of registers and records – form part of enquiry and, therefore, allegation that no enquiry was conducted is unsustainable. The counsel for petitioner made a faint submission that there was no inspection conducted by the fourth respondent. It is nobody’s case. As seen from the record, after receiving complaints from cardholders, Tahsildar got the matter enquired by Deputy Tahsildar (Enforcement) and after conducting enquiry he submitted a report dated 09.8.2004 to the Tahsildar. Therefore, the contention that no enquiry was conducted is baseless and there is no merit in the submission that the charges are vague. The charges are precise, with reference to record and there cannot be any vagueness about the same. Adequate opportunity The petitioner does not dispute that he received show cause notice and notice of hearing before passing of the order dated 29.6.2005 cancelling FPS and after the matter was remanded by this Court in WP No.16826 of 2005. Indeed the disciplinary authority also gave notices of hearing, which is ordinarily not done. In the enquiry conducted by quasi-judicial authorities, mostly revenue authorities, lawyers represent and whenever the case is adjourned, hearing dates are informed to lawyers themselves. Presumably for the reason that the petitioner went to High Court complaining want of adequate opportunity the third respondent appears to have taken extra precaution of sending notices of hearing. The petitioner however contends that the basis of disciplinary action being the inspection report of Deputy Tahsildar and the consequential report of the Tahsildar, were not supplied to the petitioner, in spite of request being made by the petitioner. It is also grievance of the petitioner that the reports/complaints given by the above named persons and the statements recorded by the Deputy Tahsildar/Tahsildar are not furnished and, therefore, there is denial of opportunity. The submission cannot be accepted. In S.Malla Reddy (supra), the order of cancellation of dealership appears to have been made without issue of show cause notice. When the matter was brought before this Court a learned Single Judge stayed the cancellation order. The Division Bench which heard the appeal set aside the order of cancellation itself on the ground of non- compliance with the procedure established in law and remitted the matter to the licensing authority. I n M.Kalyani (supra), FPS authorization was cancelled and the writ petition was dismissed by learned Single Judge. In appeal, the Division Bench recorded a finding that the report of MRO alone was the basis for cancellation and the same not having been supplied to the FPS dealer, any cancellation without supplying only piece of evidence of contravention would be vitiated. I n M.Santha Kumari (supra), a learned Single Judge of this Court while canceling the FPS authorization of petitioner therein held that before ordering cancellation of authorization the competent authority must apply mind considering all the factual aspects and that orders cannot be passed in a routine manner. These decisions are of no assistance to the petitioner. Indisputably the petitioner’s authorization as FPS dealer was cancelled on 29.6.2005. The same was assailed in WP No.16826 of 2005 contending that notice of hearing was not given, that the petitioner could not be present before the third respondent on 27.5.2005, on 30.5.2005 and therefore the same is unsustainable. Considering this, in its order dated 05.12.2005, this Court set aside first cancellation order observing as follows. A perusal of the impugned order shows that in spite of the fact that the enquiry was adjourned to 31.5.2005 as requested by the dealer, neither he nor his counsel was present on that day. However, the specific case of the petitioner is that he was never informed about the adjourned date and the enquiry was concluded hastily without hearing him. Though in the counter-affidavit filed by the 2nd respondent while reiterating the allegations made in the show-cause notice it was pleaded that the petitioner had indulged in several irregularities in violation of conditions of authorization, the fact that the petitioner was not heard before passing the order of cancellation has not been disputed. In the circumstances and particularly keeping in view that the enquiry was adjourned earlier to enable the counsel for the petitioner to appear and produce the supporting material, I am of the opinion that the matter requires reconsideration after hearing the petitioner. In view of the above, it is very clear that in the first round of litigation the petitioner never complained about non-furnishing of reports of lower authorities and statements of complainants. Indeed as pointed out by the Assistant Government Pleader the petitioner never made any specific request either before original authority or appellate authority for furnishing these copies. A perusal of the grounds of appeal and grounds of revision would belie any submission that such request for copies of documents was made by the petitioner (written arguments contain such a plea). The petitioner did not raise any such plea in the earlier round of litigation and therefore, applying the doctrine of constructive res judicata the petitioner is barred from raising such plea in proceedings under Article 226 of Constitution of India. The submission that petitioner was denied adequate opportunity cannot be accepted. The petitioner was given opportunity to submit explanation, he was given opportunity of being heard and the order was passed based on the records and registers maintained by petitioner himself and therefore, the plea is misconceived. Test of prejudice It is well settled that any adverse order cannot be set aside on a mere complaint of procedural violations. In case of violation of natural justice, the plea has to be examined applying the test of prejudice. Mere perceived lack of opportunity does not render an impugned order illegal and invalid, unless the complainant pleads and proves prejudice caused by reason of such non-compliance with rule of audi alteram partem (see State Bank of Patiala v S.K.Sharma[5]). This principle is equally applicable to the cases of cancellation of FPS authorization. This Court in M.Sadasiva Sekhar considered this aspect and held that unless and until the FPS dealer alleges and demonstrates the prejudice by reason of procedural non-compliance including want of notice or adequate opportunity, an order of cancellation ought not to have set aside. On considering S.K.Sharma, M.C.Mehta v Union of India[6] and Aligarh Muslim University v Mansoor Ali Khan[7], this Court explained the effect of phrase, “after making such enquiry as may be deemed necessary”, on enquiries leading to cancellation by the following principles. This conclusion also derives support from the various principles laid down by the Supreme Court in the cases discussed hereinabove and the same may be stated thus: 1. 'Personal hearing' is not considered as an incident of rule of audi alteram partem. A person is entitled to an opportunity of making a representation even if delegated legislation is silent on the same. The same is not, however, true with regard to affording a personal hearing to an aggrieved party. The law treats an opportunity to make a representation also as a personal hearing. 2. When delegated legislation excludes 'personal hearing' it is not permissible for the Court to read into the rule 'an opportunity of being heard by the authority'; 3. When the rule itself says that an authority is vested with the power to conduct "such enquiry as deemed fit", the discretion is left to the authority as to what is the nature of enquiry. If the authority, as a part of such enquiry, intends to give an opportunity of being heard, it must be treated as a manifestation of exercise of discretion in the facts of a particular case and not as a general rule; 4. Clause 3(4) of the A.P. Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973 does not require the appointing authority to afford an opportunity of being heard to the fair price shop dealer. However, if proposed action is both for cancellation/suspension as well as forfeiture of the deposit under Clause 3(2) of the Control Order, it is a case where the appointing authority compulsorily is required to afford an opportunity of making a representation as well as an opportunity of being heard; 5. In all cases where an enquiry is conducted under Clause 3(4) of the Control Order and where an opportunity of personal hearing is not given, the burden is on the dealer to plead and prove the prejudice caused to him by not giving a personal hearing. Illegality of the order cannot be readily presumed wherever no personal hearing was given. Alteration of sales register and stock register Before the appellate authority the petitioner raised a peculiar ground: that the third respondent wantonly changed Xerox copy of sales register and stocks register for the months of July 2004 … … and inserted fabricated copies of the said register prepared by enemies. Such a plea was however not taken in the revision grounds. Even in the writ affidavit the petitioner has not taken such a ground. The counsel however urged the ground before this Court. It is to be stated only for the purpose of rejection. The petitioner has not filed the photocopies of sales/stock registers, which were allegedly submitted by him along with the explanation. This Court has perused the second cancellation order dated 25.3.2006 (out of which these proceedings arise). The third respondent devoted considerable time in referring to distribution register for July 2004 and came to conclusion that the petitioner supplied PDS rice twice to 21 cardholders and for cardholder No.08000, he distributed rice thrice. Similarly to arrive at a finding that the petitioner distributed kerosene twice or thrice to 17 cardholders, the third respondent referred to kerosene distribution register. There are no discrepancies in any of these registers’ entries and the allegation that the third respondent fabricated these copies is an argument made in desperation. On Court direction, learned Government Pleader has placed before this Court relevant files bearing Rc.H/1536/2004 and Rc.H/1225/2005 from the Office of the Revenue Divisional Officer, Markapuram. After perusing the files especially photocopies of sales registers for rice and kerosene, it must be held that there is not even an iota of truth in the wild allegations made by petitioner. Such frivolous allegations against public officials poison purity of public administration and ought to be discouraged by the Court by imposing deterrent costs. Conduct of the petitioner Allegations are made by the fifth respondent about pendency of Sessions Case against the petitioner. The said case is pending. Though the revisional authority mentioned about this, the said authority considered various aspects of the case before confirming the orders passed by the RDO and Joint Collector. By no stretch of imagination, it can be argued that the revisional authority rejected only on the ground that criminal case is pending against the petitioner. Therefore the submission that different considerations weighed with revisional authority cannot be countenanced. In the result, for the above reasons, the writ petition fails and is accordingly dismissed with exemplary costs set at Rs.5,000/- (Rupees Five thousand only). _______________ (V.V.S.RAO,J) March 11, 2010 YS [1] 2005(3) ALT 100 (DB) : 2005(2) L.S. 119 (DB) [2] 2006(5) ALD 796 (DB) : 2006(3) L.S. 191 (DB) [3] 2008(1) ALT 330 : 2007(3) L.S. 345 [4] 2003(3) ALT 68 [5] AIR 1996 SC 1669 [6] AIR 1999 SC 2583 [7] AIR 2000 SC 2783