*THE HON’BLE SRI JUSTICE NOUSHAD ALI +WRIT PETITION No.52 of 2007 % 20-01-2011 # Smt. Kamala Kumari … Petitioner Vs. $ The Sub-Collector, Vijayawada and others. … Respondents ! Counsel for the petitioner : Sri V.H.V.R.R. Swamy Counsel for the Respondents: G.P. for Civil Supplies < Gist: > Head Note: ? Cases referred: 1. 2006 (1) ALT 273 (D.B.) THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.52 of 2007 Date: 20.01.2011 Between : Smt. Kamala Kumari … Petitioner and The Sub-Collector, Vijayawada and others. … Respondents THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.52 of 2007 ORDER : Heard learned counsel appearing for the petitioner as well as the learned Government Pleader for Civil Supplies appearing for the respondents. 2. The petitioner, who has suffered cancellation of authorization to run a Fair Price Shop, has filed this writ petition challenging the order dated 29.9.2006 in Rc.B1/RP/02/2006, passed by the 3rd respondent-District Collector, Krishna District, confirming the order dated 21.10.2005 in Rc.B1/SRA/35/2004, passed by the 2nd respondent-Joint Collector, Krishna District, and the order dated 27.10.2004 in Rc.A7/2099/03, passed by the 1st respondent-Sub-Collector, Vijayawada. 3. The petitioner was an authorized Fair Price Shop dealer of Prasadampadu village, Vijayawada (Rural) Mandal, Krishna District. The Special Deputy Tahsildar (PDS), Vijayawada (Rural), submitted a report to the 1st respondent complaining that the petitioner has diverted 94.80 quintals of rice meant for free distribution under Food for Work (FFW) programme. Based on the said report, a show cause notice dated 20.10.2004 was issued calling for the explanation of the petitioner as to why her authorization should not be cancelled. The following is the charge enumerated in the said show cause notice: “The dealer has diverted 94.80 qtls of Food For Work Rice contravening clause 17 (C) and conditions 11 & 13 of authorization under A.P. State Public Distribution System Control Order, 2001.” 4. Pursuant to the said show cause notice, the petitioner offered explanation on 01.11.2004, inter alia explaining the reasons for such shortage in the stock, the relevant portion of which reads as follows: (a) According to Government Memo No.26776/91, dated 07.05.1991, the F.P. Shop dealers are allowed marginal allowance of 1.5% on the quantity of all commodities supplied to them for distribution. At this rate I am eligible for a shortage of Q 17.08 on the quantity of Q. 1139.32 supplied to me. (b) As submitted above a major portion of the quantity of Q.1139.32 was dumped into my F.P. shop by arranging nets. On account of heavy weight the ground under the bags sunk to a depth of 12 ft. resulting in several bags being broken and the rice mixed with the earth. Further since the rice was kept in the shop for 1 ½ years, it was reduced to powder due to dehydration. The quantity damaged for these reasons is 12 Q. due to pressure from the house owner, the rice was removed and the damaged quantity was proposed to repair. But since it was unfit human consumption, it was thrown into the nearby irrigation canal with the consent of the house owner and the Panchayat Members. A statement given by the house owner and the Panchayat Member confirming this fact is enclosed for kind perusal. (c) The remaining quantity of Q. 65.72 (94.80 minus 17.08 plus 12.00) was distributed to the beneficiaries on the coupons received from the Panchayat Raj Department officers. I enclose a detailed statement showing the coupon numbers and the quantity distributed to the beneficiaries for the quantity of Q. 65.72 for your kind perusal. 5. While so explaining, the petitioner further explained the legal position stating that the contravention alleged was only in respect of the rice meant for Food for Work (FFW), but not the Public Distribution System (PDS) rice, therefore, the seizure was not tenable under law and hence sought for exoneration from the said charge. However, without considering the said explanation of the petitioner, the 1st respondent, who is the original authority, has passed order dated 27.10.2004 cancelling the authorization of the petitioner. The same has been confirmed by the 2nd respondent and the 3rd respondent, who are the appellate authority and the revisional authority, respectively, through orders dated 21.10.2005 and 29.9.2006. Hence the present writ petition. 6. Admittedly, 1st respondent is the competent and original authority to initiate disciplinary proceedings regarding the alleged irregularities committed by the authorized Fair Price Shop dealers. While dealing with the matters for imposition of punishment, as contemplated under the Control Order, either by way of suspension or cancellation of authorization, the 1st respondent has to discharge his duties as a quasi-judicial authority. A quasi- judicial authority, in discharge of its duties, should not only act in the prescribed manner, but also should act in conformity with the principles of natural justice. 7. Clause 5 (4) of the A.P. State Public Distribution System Control Order, 2001 empowers the authority to add, amend, vary, suspend or cancel the authorization issued under the provisions of the said Control Order only after making such enquiry as may be deemed necessary and for the reasons to be recorded in writing. Inasmuch as, the exercise of such power would result in serious consequences, the principles of natural justice would require that the delinquent be put on notice and only thereafter appropriate orders should be passed considering the case of the delinquent. Needless to say, when the Statute contemplates that reasons should be recorded in writing, the competent authority is expected to consider the explanation of the delinquent and when such explanation is not acceptable, it should record reasons as to why such explanation is not acceptable. 8. Giving reasons is sine qua non for exercise of the quasi-judicial power. If reasons are not assigned, the order, however laudable in its result, cannot be commended. 9. In AMBATI SRINIVASULU v. DISTRICT COLLECTOR, NELLORE[1] a Division Bench of this Court, while considering the similar case of cancellation of authorization of a Fair Price Shop dealer by a non-speaking order, observed as follows: “Rules of natural justice are multi faceted and multi dimensional. Different facets of these rules have been applied by the Courts in India to invalidate administrative as well as judicial, quasi-judicial actions and orders. One of the facets of the rules of natural justice is that all judicial, quasi-judicial and even administrative authorities who are entrusted with the task of deciding lis between the parties or passing order which affects the rights, interest or status of a person must record reasons in support of their findings and conclusions and such reasons should be communicated to the person concerned. The requirement of recording reasons by judicial, quasi-judicial and even administrative authorities and communication thereof to the affected persons has been highlighted and reiterated in various judgments of the Supreme Court including the often referred decisions in Harinagar Sugar Mills v. Shyam Sundar, M.P.Industries Limited v. Union of India, Bhagat Raja v. Union of India, Mahavir Prasad Santoshkumar v. State of U.P., Travancore Rayons v. UOI, Messrs Ajanta Industries v. Central Board of Direct Taxes, New Delhi, Messrs Siemens Engineering & Manufacturing Company v. Union of India, S.N. Mukherjee v. Union of India, Charan Singh v. Healing Touch Hospital State of Punjab v. Bagh Singh, State of Orissa v. Dhaniram Luhar, State of Rajasthan v. Sohan Lal, Cyril Lasrado v. Juliana Maria Lasrado, Mangalore Ganesh Beedi Works v. CIT a n d Manorama Sachan v. Lucknow Development Authority. In S.N. Mukherjee v. Union of India (8 supra) the Constitution Bench of the Supreme Court noticed the legal position obtaining in Australia, England, United States of America, referred to a large number of judicial precedents on the subject and laid down the following proposition: “… Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act, 1946 of U. S. A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case.” 10. Applying the aforesaid principle to the instant case, a perusal of the orders passed by the respondents – original, appellate and revisional authorities as well, would show that the said orders do not comply with the principles of natural justice. 11. In this regard, it is to be noted that— firstly; the 1st respondent, who is the original authority, in his order, dated 27.10.2004, did not deal with the explanation offered by the petitioner, except stating that the explanation offered by the petitioner is not convincing. He has not assigned any reasons as to why the explanation of the petitioner is not convincing. As noted above, the explanation offered by the petitioner contained some details and the circumstances that led to such shortage. If the 1st respondent is not satisfied with the explanation offered by the petitioner, it is expected of him to assign reasons as to why such explanation is not acceptable, and secondly; in the show cause notice, the petitioner was confronted with a solitary allegation of diversion of certain quantity of rice meant for FFW, whereas the 1st respondent has passed order on other charges enumerated in the said order, which is beyond the scope of the show cause notice. 12. The 2nd respondent, who is the appellate authority, while dismissing the appeal through his order dated 21.10.2005 has merely repeated the ultimate result, the relevant portion of which reads as under: “I have gone through the entire case record and found that the reasons putforth by the appellant for the shortfall of quantity of 94.80 qtls. of Food for Work rice are not satisfactory and justified. There is no reason to interfere with the orders of the cancellation of authorization issued by the Sub-Collector, Vijayawada.” 13. Even the 3rd respondent, who is the revisional authority, though sought to justify the order passed by the original authority as well as the appellate authority, the standards of principles of natural justice, which is required at the revisional stage, does not appear to have been adhered to. The revisional authority is expected to adjudicate the matter before him and cannot supplement his own reasons at the revisional stage. 14. It is well settled that at the primary stage, a duty is cast on the competent authority to pass a speaking order in accordance with law and the defects, if any, committed at the primary stage is not liable to be cured at the appellate stage or at the revisional stage to the detriment and interest of a party. 15. For the foregoing reasons, the orders impugned in this writ petition cannot stand the scrutiny of law and hence they are liable to be quashed. 16. In the result, the writ petition is allowed quashing the impugned orders, dated 29.9.2006, 21.10.2005 and 27.10.2004. Inasmuch as the impugned orders are quashed on the ground of violation of the principles of natural justice for not considering the explanation of the petitioner and passing the speaking orders, the matter is remanded to the 1st respondent-Sub-Collector, Vijayawada, with a direction to consider the matter afresh and pass orders in accordance with law, after putting the petitioner on notice, as early as possible, preferably within a period of eight weeks from the date of receipt of a copy of this order. Till final disposal of the matter, no dealer should be appointed on permanent basis. There shall be no order as to costs. _________________________ JUSTICE NOUSHAD ALI 20.01.2011. NOTE:- 1. Issue C.C. in one week. 2. L.R. Copy be marked. (B/O) Msr THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.52 of 2007 20.01.2011 (Msr) [1] 2006 (1) ALT 273 (D.B.)