* THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN +WRIT APPEAL No.307 of 2010 % Dated: 19.07.2010 Shaik Ramu, S/o.Appa Rao, R/o.Peddabodeepalli Village, Narsipatnam Mandal, Visakhapatnam District .. Appellant And The Government of Andhra Pradesh, represented By its Revenue Divisional Officer, Narsipatnam, Visakhapatnam and others .. Respondents ! Counsel for the Appellant: Mr. V.V.N.Narayana Rao ^Counsel for the Respondents: The Government Pleader for Civil Supplies <Gist: >Head Note: ? Citations: (2007) 5 SCC 769 THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT APPEAL No.307 of 2010 Dated:19.07.2010 Between: Shaik Ramu .. Appellant And The Government of Andhra Pradesh, represented by its Revenue Divisional Officer, Narsipatnam, Visakhapatnam And others .. Respondents THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT APPEAL No.307 of 2010 JUDGMENT: (per Hon’ble Sri Justice V.V.S.Rao) The appellant was appointed as a Fair Price Shop (FPS) dealer. The competent authority, namely, the Revenue Divisional Officer (RDO) initiated action under Clause 5(1) of the Andhra Pradesh State Public Distribution System (Control), Order 2001 (hereafter called the Control Order, 2001). A show cause notice dated 01.07.2002 was issued alleging the following contraventions. Charge No.1: Sri Shaik Ramu fair price shop dealer received 3454.00 qunts. of rice towards food for work and out of the said stock 2505.07 kts. was distributed and at that time of inspection there is only stock of 674.75 kgs. out of rice and there is shortgage of 275.74 kgs. rice. Charge No.2: That at the time of check, 129 bags each weighing 50 Kgs. (129.50) 6450 kgs. of rice has been sold to one Sri A.Babu Rao, son of Nook Raju of Pedaboddepali village. Charge No.3:- The fair price shop dealer running 3 godown unauthorisedly and without any valid permission from the competent authority. Therefore, he has committed serious wrong. Simultaneously, the proceedings under Section 6-A of the Essential Commodities Act, 1955 (hereafter called the E.C. Act) were initiated by the Joint Collector. The main allegation against the appellant was that he was found indulging in black marketing of large quantity of rice meant for Food For Work (FFW) Programme and that he was maintaining three godowns unauthorisedly. The appellant submitted his explanation on 18.07.2002. Considering the same, by order dated 20.07.2002, the RDO cancelled the authorization for contravention of the Control Order, 2001. Feeling aggrieved, the appellant preferred an appeal under Clause 20 of the Control Order, 2001 unsuccessfully. The appeal was dismissed on 05.10.2002. The appellant then preferred a revision to the District Collector, which was also dismissed on 29.03.2003. The writ petition is filed thereafter assailing the order of the RDO dated 20.07.2002 cancelling the authorization. Though specifically the orders of the District Collector were not challenged, as the original order as well as the appellate order merged in the revisional order, the writ petition is one, which is against the revisional order. Learned single Judge by impugned judgment dismissed the writ petition. It was contended before the learned single Judge that any alleged contravention in dealing with FFW Programme rice is not governed by either the provisions of the E.C. Act or the Control Order, 2001 and, therefore, Clause 5(1) of the Control Order, 2001 is not attracted and the impugned order of the RDO as confirmed by the appellate authority and revisional authority suffers from error in exercise of the jurisdiction. Making a reference to the provisions in the E.C. Act and the Control Order, 2001, the learned single Judge concluded as follows. On a combined reading of the above provisions, it is clear that the rice being a scheduled commodity as defined under the Control Order 1973 as well as 2001 Control order is one of the items meant for distribution to the consumers and the authorized dealers are bound to distribute the same either under PDS or FFWS in compliance with the instructions of the appointing authority. Hence, in the event of the authorized dealer indulging in misappropriation of such commodity, the authorization is liable for suspension or cancellation. Precisely, the same was done by the 1st respondent after recording a finding that the petitioner had indulged in diversion of rice meant for FFWS. Admittedly, the said order was passed after giving an opportunity of hearing to the petitioner and after conducting an enquiry following due process of law. In this appeal, the counsel for the appellant and the Government Pleader for Civil Supplies reiterated their respective submissions. The counsel for the appellant also relied on Kailash Prasad Yadav v State of Jharkhand[1]. The short point for consideration, which has some significance, is whether a FPS dealer, subject to regulations under the E.C. Act and the Control Order, 2001, can be proceeded for contravention of the FFW Programme formulated by the Government of India. The distribution of essential commodities to card (ration card) holders was regulated by Clause 3(1) of the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order 1973. In 2001, the same was superceded by yet another Control Order, namely, the Andhra Pradesh State Public Distribution System (Control) Order, 2001. A cursory perusal of both would not show any drastic changes that were brought out new legal regime. Be that as it is, there is no dispute that a FPS deader is appointed by way of authorization under Clause 5(1) read with relevant guidelines issued by the Government under Clause (9) of the Control Order, 2001. There is also no dispute that the authorization given to a person to be FPS dealer is subject to the provisions of the E.C. Act, the Control Order, 2001 and the Conditions of Authorization. Condition No.13 is relevant and is quoted below. The holder of this Authorization shall not contravene the provisions of the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 2001 or violate any conditions of the authorization issued under the order or any other order relating to foodstuffs, sugar or edible oils or edible oilseeds or petroleum products issued under the Essential Commodities Act, 1955 (Central Act 10 of 1955) or any instructions, directions of orders issued under any such provisions. Reading the above condition in conjunction with Clause 5(4) of the Control Order, 2001 would show that the authorization of any FPS dealer is liable for cancellation, if such dealer contravenes the provisions of the E.C. Act, the Control Order or any instructions or directions or orders issued thereunder. Clause 23 of the Control Order, 2001 contemplates Monitoring/Inspections by the hierarchy of officials named therein. All these authorities impliedly have power to give directions from time to time. Therefore, as per Condition No.13 of the authorization in Form II, if any FPS dealer disobeys the orders, directions or circulars issued by the authority like the Commissioner and the Director of Civil Supplies, the Joint Collector (Civil Supplies), the RDO or the Tahsildar, necessary disciplinary action can be initiated. The Government of India and Government of Andhra Pradesh implement number of welfare schemes probably to ensure food security to a large number of people, who entirely depend on the Public Distributon System for their essential commodities. Some of those are: Below Poverty Line (BPL) Scheme, Antyodaya Anna Yojana (AAY) Scheme, Annapurna Scheme, Supply of Rice to Social Welfare Institutions, National Programme of Nutrition Support to Primary Education (NPNSPE), Andhra Pradesh Wage Employment Generation and Poverty Alleviation Programme (EGP), Society for Elimination of Rural Poverty (SERP), Sampoorna Grameena Rojgar Yojana (SGRY), and Food For Work Programme (FFWP). Under these schemes, the Government of India allots rice and other essential commodities, which are to be lifted from the Food Corporation of India (FCI) and distributed through the network of FPSs. Therefore, a dealer cannot be allowed to say that he is under no obligation to distribute FFW Programme rice. Indeed as pointed out by the Government Pleader, the FPS dealers are also allowed to have certain margins with reference to stocks released by the Andhra Pradesh Civil Supplies Corporation under various schemes. Under FFW Programme an amount of Rs.7/- is allowed for every quintal of rice distributed to be paid to FPS dealer. Thus, any contravention in the distribution of FFW rice squarely comes within the ambit of Condition No.13. If the argument is to be accepted, many FPS dealers who are entrusted with the distribution of rice under a scheme of the Government of Andhra Pradesh cannot be proceeded against even if they are involved in black marketing. There is yet another reason for our conclusion. Rice is an essential commodity as per Section 2(a) of the E.C. Act and any contravention in relation thereto, attracts Section 6-A thereof. When once a FPS dealer is involved in contravention of Section 6-A of the E.C. Act entailing in confiscation of the essential commodity, such a dealer must be held to have contravened Condition No.13 of the Form II authorization. The submission of the learned counsel, therefore, cannot be accepted. In Kailash Prasad Yadav the appellants’ truck was hired for transportation of food grains. When it was found carrying wheat belonging to FCI, it was seized and proceedings under Section 6-A of the E.C. Act were initiated. The confiscation order was confirmed by the appellate Court as well as the writ Court. The submission before the Supreme Court was that when there was no prohibition either on trading or possession of wheat, initiation of proceedings under Section 6-A of the E.C. Act is unsustainable. Accepting the plea, the Supreme Court allowed the appeal observing as follows. The order of confiscation is not passed only because it would be lawful to do so. The authorities must arrive at a clear finding in regard to the violation made under Section 3 of the Act. The issues which have been raised before us have not been considered either by the Deputy Commissioner or by the learned Sessions Judge as also by the High Court. The matter is pending before the criminal Court. We, therefore, do not intend to delve further into the matter. Keeping in view the facts and circumstances of this case, we are of the opinion that it was not a fit case where an order of confiscation could have been passed. The above precedent is an authority for the proposition that if there is a contravention of any Control Order made under Section 3, Section 6-A of the E.C. Act is attracted. It is nobody’s case before this Court that the black-marketing in rice, even it is meant for distribution for FFW Programme, is not contravention of the Control Order. It is certainly a contravention and, therefore, we do not find any error in the exercise of jurisdiction under various Clauses of the Control Order. For the above reasons, the Writ Appeal fails, and is, accordingly, dismissed with costs. _____________ V.V.S. RAO, J ___________________________ RAMESH RANGANATHAN, J 19.07.2010 NOTE: L.R. Copy be marked. (By order) KH [1] (2007) 5 SCC 769