License To Run 'Fair Price Shop' Under Public Distribution Scheme Not Fundamental Right To Carry Business Under Art. 19(1)(g): Allahabad High Court

The petitioner was a license holder to run the fair price shop where he was required to distribute the scheduled commodities to the card holders (Antyodaya and Patra Grahasti Yojana) regularly at the rate prescribed by the State Government.

One day, upon receiving a complaint, an inquiry was conducted where certain discrepancies were found in the distribution of essential committees in stock register and the details recorded in E-Pos machine for distribution of the food grains. An FIR was lodged against the petitioner under Section 3/7 of Essential Commodities Act and the licence of the fair price shop was eventually cancelled.

The counsel for the Petitioner pleaded that whole basis of suspension of the license of the fair price shop is due to the FIR registered against the petitioner. The counsel relied on the judgement of Bajrangi Tiwari Vs. Commissioner Devi Patan Mandal, Gonda and others, where it was held that fair price shop agreement should not be suspended/cancelled simply on the basis of the FIR registered against the fair price shop holder. The counsel also stated that the petitioner was given no opportunity for cross-examining the witnesses nor oral hearing was given to the petitioner during the course of inquiry.

The counsel for the respondent stated that the petitioner breached the terms and conditions of the license and provisions of the Control Order, 2016 as he did not distribute the essential commodities properly from the fair price shop. The counsel also contended that the present petition is liable to dismissed as this Court in exercise of its jurisdiction under Article 226 of the Constitution of India, may not interfere with the concurrent finding of fact recorded by the two competent authorities.

Findings

While dealing with the instant matter, the bench stated that the license of the fair price shop is liable to be canceled if the license holder fails to comply with the terms and conditions to own the fair price shop, which has happened in the present matter.

Right to get a license of a Fair Price Shop is not covered Article19(1)(g)

The bench stated that the object of the PDS is clearly to provide benefit to the public at large in order to ensure supply of essential commodities which is necessary for the sustenance of daily life. As a necessary corollary to the same, the object is not to set up any trade for the benefit of any individual. Thus, "such a license does not fall within the category of a fundamental right to carry on trade and business as understood under Article 19 (1)(g) of the Constitution of India."

Reliance was placed on Puran Singh v. State of UP, 2010 (3) ADJ 659 (FB), where it was held that by virtue of the licensing system, an individual may get an opportunity to benefit himself by setting up a fair price distribution unit. However, such a licence does not fall within the category of a fundamental right to carry on trade and business as understood under Article 19 (1)(g) of the Constitution of India.

Accordingly, the Court in this case held,

"The dealer does not have a vested right to carry on the license of fair price shop. The licensee is an agent of the Government and the distribution of the essential commodities from the fair price shop should be strictly in accordance with the terms and conditions of the license. Any violation of conditions, would result in proceedings for suspension and revocation of such license."

Mandatory to give an opportunity of hearing

The court negated the argument of the counsel of the petitioner for mandatory hearing before suspension of the shop license and observed,

"under the Control Order, 2016, specific provision having been made for consideration of reply/explanation pursuant to the suspension, the requirement of audi alteram partem having been afforded to a dealer appointed under an agreement, can not claim that a regular inquiry to be conducted giving opportunity for examination of documents, cross-examination of witnesses, providing copy of the inquiry report and taking of affidavits, as provided under the departmental inquiry."

In the light of the facts and circumstances of the case, the bench pointed out that since there exist a serious allegations against the petitioner which have been proved during the course of inquiry, the petitioner cannot be allowed to run the fair price shop.

"Two competent authorities have found that petitioner was wanting in running the fair price shop and he was not carrying out the terms and conditions of the license properly, therefore, the petitioner's license has been cancelled. This Court while exercising the powers under Article 226 of the Constitution of India, can not re-appreciate the evidence, which has been considered by the two competent authorities and, therefore, this Court does not find any ground for interfering with the impugned orders."

Hence, the petition was dismissed.

Case Title: Radhey Shyam v. State of U.P. Thru. Prin. Secy. Food And Civil Supplies Lucknow

Citation: 2022 LiveLaw (AB) 79

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