THE HON'BLE SRI JUSTICE R. SUBHASH REDDY W.P.No.23908 of 2007 ORDER: 1 Petitioner is a fair price shop dealer for distribution of essential commodities in Timadam Village, Jalamuru Mandal, Srikakulam District. He filed this writ petition questioning the order of the Revenue Divisional Officer, Tekkali issued in R.C.No.3174/2004 A dated 22.11.2005 cancelling the authorisation of the petitioner on certain alleged irregularities and as confirmed by the appellate and revisional authorities. 2 The Enforcement staff of the Sub Collector’s office visited the village Timadam and enquired into the allegations levelled against the petitioner and submitted reports in R.C.No.523 of 2004 dated 19.12.2004, and further report on 13.12.2004. Based on such reports, the Revenue Divisional Officer, Tekkali issued a show cause notice dated 04.07.2005 in R.C.No.3174 of 2005 levelling three charges against the petitioner. The charges are that he is selling the essential commodities of rice, sugar and kerosene oil at higher prices than the prescribed rates, thus he has violated clause 4 and Condition No.7 of the authorisation; he is selling essential commodities only on one or two days in a month and by closing the shop on remaining days, and he entered the Mandal Level Stockist Point on 20.11.2004 and used filthy language against the in-charge of the Mandal Level Stockist Point and threatened him. The petitioner had submitted a detailed explanation on 17.8.2005 denying each of the charges. In the said explanation the petitioner submitted that he is selling the essential commodities at the prescribed rates as mentioned in the price board, which was displayed in the shop and that he is selling the commodities on all the days in a month and he has denied the allegation of abusing the in-charge of the Mandal Level Stockist Point on 20.11.2004 as alleged. While referring to the show cause notice and explanation offered by the petitioner, the Revenue Divisional Officer, Tekkali by order dated 22.11.2005 issued in R.C.No.3174 of 2004, by recording a finding that the petitioner has misused huge quantities of the essential commodities and diverted the same to the black market and thus committed irregularities, ordered cancellation of the authorisation of the petitioner as fair price shop dealer. 3 As against the said order of cancellation, the petitioner carried the matter by way of appeal before the Joint Collector as provided under the Control Order. But the appellate authority, while referring to the allegations of the villagers / cardholders and by recording a finding that the petitioner is not properly selling the essential commodities to the cardholders, rejected the appeal. Aggrieved by the same, the petitioner further carried the matter by way of revision before the Collector and the revisional authority has rejected the revision by recording a finding that the petitioner has not put forth any further evidence to rebut the charges. Hence the present writ petition. 4 Heard the learned counsel for the petitioner and also the learned Assistant Government Pleader for Civil Supplies appearing for the respondents. 5 In this writ petition, it is the argument of the learned counsel for the petitioner that the petitioner was issued a show cause notice and called upon to explain as to why his authorisation shall not be cancelled only on three charges. When the petitioner has submitted his explanation denying the same, the impugned order was passed traversing beyond the scope of the allegations in the show cause notice and the authorisation was cancelled alleging that he has misused huge quantities of essential commodities. It is submitted that in the absence of any allegation in the show cause notice itself, it is not open for the respondents to cancel the authorisation on such ground. It is further submitted that the findings recorded are vague and they do not constitute any valid ground to cancel the authorisation of the petitioner. It is further submitted that though much reliance is placed on the reports dated 19.12.2004 and 13.12.2004, which are mentioned as reference Nos.1 & 2 in the order of cancellation passed by the Revenue Divisional Officer, Tekkali, the copies of the said reports were not furnished to the petitioner and as such the impugned orders are passed in violation of the principles of natural justice. The learned counsel further placed reliance on a decision of a Division Bench of this court in the case of M.Kalyani Vs. District Collector, Prakasam District, Ongole and Others[1] in support of his argument that when the authority seeks to rely on the report of the Mandal Revenue Officer, failing to supply such report and passing an order of cancellation is held to be in violation of principles of natural justice. 6 On the other hand, the learned Assistant Government Pleader for Civil Supplies, appearing for the respondents in this case, contended that the allegations levelled against the petitioner are serious in nature and that the petitioner was selling the essential commodities of rice, sugar and kerosene oil at higher rates than the prescribed rates and that the statements of several cardholders were recorded and having regard to the enquiry conducted, the impugned order has been passed cancelling the authorisation of the petitioner as fair price shop dealer. It is further submitted that the petitioner has used abusive language against the in-charge of the Mandal Level Stockist Point and thus he has violated Condition No.11 of the authorisation. 7 Having heard the counsel, I have perused the show cause notice dated 04.07.2005 issued in R.C.No.3174 of 2005 and the explanation offered by the petitioner on 17.08.2005 and also the order of the primary authority cancelling the authorisation as well as the orders of the appellate and revisional authorities. From a perusal of the show cause notice, it is clear that there are only three charges framed against the petitioner, upon which, he was asked to offer his explanation as to why his authorisation as fair price shop dealer should not be cancelled. The allegations are - selling the essential commodities at higher rates than prescribed, not keeping the shop open in all the days in the month and not properly supplying the commodities to the cardholders by diverting the same to the black market. In spite of there being a specific allegation, there is no definite finding recorded by the primary authority i.e. Revenue Divisional Officer, while cancelling the authorisation, by giving a reference to the alleged diversion of stocks. He simply stated that the petitioner has diverted the commodities to the black market. By simply recording a finding that the petitioner has diverted the essential commodities to black market, without giving any particulars of supporting material on such allegation, it is not open to the Revenue Divisional Officer to pass the order of cancellation. Though the petitioner has filed his explanation on all other allegations, there is no finding recorded on any one of them. 8 The provisions of The Andhra Pradesh Scheduled Commodities (Regulation or Distribution by Card System) Order 2001 which was in force during the relevant point of time empowers the authorities to cancel the authorisation by recording valid reasons. In that view of the matter, by simply stating that the petitioner has diverted the stock to the black market without there being any basis, no order should have been passed against the petitioner cancelling his authorisation. I have also perused the orders of the appellate and the revisional authorities. The appellate authority simply rejected the appeal preferred by the petitioner without seriously considering the grounds raised in the appeal, and confirmed the order of the primary authority by recording a finding that the Deput Tahsildar, Civil Supplies, Enforcement Tekkali has conducted the enquiry. Event the revisional authority also rejected the revision by recording a finding that the petitioner has not put forth any further evidence to rebut the charges. When the primary authority cancelled the authorisation of the petitioner, it is for the appellate and revisional authorities to record a finding in support of the order of the primary authority stating that the charges are proved. But, instead, without examining in that context, the revisional authority has thrown burden on the petitioner to rebut the allegations made against him. For the aforesaid reason, the grounds, which are made basis for passing the impugned order, do not constitute a valid basis for passing the order of cancellation. 9 I also find force in the argument advanced by the learned counsel for the petitioner that without supplying copies of the reports, which are mentioned as Reference Nos.1 & 2 in the order of cancellation passed by the Revenue Divisional Officer, no order should have been passed cancelling the authorisation of the petitioner. When the proceedings were initiated basing on the reports, and when the enquiry conducted by the Deputy Tahsildar formed part of the report, which was made basis for depriving the authorisation of the petitioner, the respondent authorities should have supplied copies of the said reports before passing appropriate orders. 10 The judgment of the Division Bench of this court in M.Kalyani case, relied on by the learned counsel for the petitioner, also supports the case of the petitioner. In an identical circumstance, the Division Bench of this court held that when such reports are relied upon, it is obligatory on the part of the respondents to supply such reports before passing an order. It is apt to extract para No.11 of the said judgment. 11. In our opinion, the order passed by respondent No. 3 cancelling the authorization of the appellant suffers from patent violation of the rules of natural justice and the learned Single Judge gravely erred by refusing to annul the same. It is not in dispute that the report of the Mandal Revenue Officer, which formed the basis of the charges, was not supplied to the appellant. In K. Radha Krishna Naidu v. Director of Civil Supplies, Hyderabad and Ors. 1996 (1) ALD 473 : 1996 (1) LS 456 (AP), it was held that the primary report on the basis of which the charges were framed by the Licensing Authority against the dealer, being not furnished to the dealer, vitiates the proceedings due to violation of the principles of natural justice and absence of sufficient opportunity to the dealer to defend his case effectively. It was further held that the reasonable opportunity should be real and effective and simply because the petitioner submitted his explanation, it does not fulfil the requirement of reasonable opportunity, more so, when the show-cause notice would clearly indicate that the only basis is the report. In that case the petitioner therein had been given opportunity of personal hearing but even then the Court held that the opportunity was not real inasmuch as the basic document had not been supplied to the dealer. In S. Malla Reddy v . M. Vijayalakshmi and Ors. MANU/AP/0138/2005 : 2005(3)ALT100, this Court held that the authorization of fair price shop could not have been cancelled on the basis of vague notice. 11 From a reading of the aforesaid portion of the judgment, I am of the considered opinion that the view taken by the Division Bench squarely applies to the facts of the case on hand and as there is no denial of the allegation of the petitioner with regard to the non supply of the reports to the petitioner, the orders which are impugned in this writ petition are to be held that they are passed in violation of the principles of natural justice. 12 In view of the findings given by the Division Bench of this court in the aforesaid decision and for the reasons recorded in this writ petition, this writ petition deserves to be allowed by setting aside the order of the Revenue Divisional Officer dated 22.11.2005 cancelling the authorisation of the petitioner and as confirmed by the appellate and revisional authorities. 13 Accordingly, the order dated 22.11.2005 passed in proceedings R.C.No.3174/2004 A by the third respondent as confirmed by the appellate and revisional authorities is hereby set aside with a direction to the respondents to restore the authorisation of the petitioner by ensuring the supplies within a period of one month from today. 14 With the above direction, the writ petition is allowed. No costs. --------------------------- R. SUBHASH REDDY, J Date:13.10.2011 Kvsn [1] 2006 (5) ALD 796 (D.B)