PDS License Cannot Be Cancelled Unless Show Cause Notice Explicitly Intimates Licensee Of Prospective Cancellation: Gauhati High Court

The Gauhati High Court has made it clear that a show cause notice issued to a license holder under the Assam Public Distribution of Articles Order, 1982 would be insufficient to cancel the license if the notice does not explicitly mention cancellation as a consequence to failure to submit an adequate reply.

The single judge bench of Justice Devashis Baruah observed:

“A perusal of Clause 15(2) of the Order of 1982 clearly stipulates that the licensee has to be intimated with a notice as regards the proposed cancellation. This Court had duly perused the said notice which was issued on 23.02.2017 wherein there was no mention that the said notice was issued against the proposed cancellation rather it only stated that legal action would be initiated. Secondly, this Court had also perused the impugned order dated 17.03.2017 wherein the Respondent Authorities did not deal with the reply by giving reasons as to why the said reply was not satisfactory.”

The petitioner was issued a license under the provisions of the Assam Public Distribution of Articles Order, 1982 (PDA Order). On February 14, 2017 the Deputy Commissioner, Sivasagar had made an inspection and found the shop of the petitioner to be closed and there was also no display board showing the present stock.

Thereafter, a notice was issued on February 23, 2017 asking the petitioner to show cause for the violation mentioned in the said notice and to submit a reply within three days before the Deputy Director-cum-Issuing Authority, Food, Civil Supplies and Consumer Affairs, Sivasagar (Deputy Director) failing which legal action would be taken.

The petitioner submitted a reply to the said notice on February 27, 2017 stating that he had to go Demow Hospital for the treatment of his wife on that day when the inspection was carried out for which the shop was kept closed. The petitioner also submitted the medical certificate as well as the prescription dated February 12, 2017 of the Demow Primary Health Centre cum Community Health Centre.

However, vide impugned order dated March 17, 2017, the Deputy Director passed an order holding that the reply submitted by the petitioner was not satisfactory for which, the license of the petitioner was cancelled.

The petitioner filed the present writ petition before the High Court challenging the impugned order passed by Deputy Director.

The Counsel appearing for the petitioner submitted that as per Clause 15(2) of the PDA Order of 1982, there can be no cancellation of the license without granting an opportunity to the licensee to state his case against the proposed cancellation.

It was further submitted that in the impugned order dated March 17, 2017, there is no reason so assigned in the said order to the effect that as to why the petitioner's reply was not satisfactory.

On the other hand, the Counsel appearing for the respondents submitted that the petitioner had not replied to the various other violations which were clearly pointed out in the notice except assigning the reasons why the petitioner's shop was closed.

The Court observed that a perusal of Clause 15(2) of the Order of 1982 clearly stipulates that the licensee has to be intimated with a notice as regards the proposed cancellation. It was further observed by the Court that the impugned order only mentions that the reply so submitted by the petitioner was found to have been made in a routine manner for which the Show Cause reply was not satisfactory.

Thus, the set aside the impugned order dated March 17, 2017 by which the petitioner's license was cancelled on the ground of violation of the principles of natural justice as well as on the ground that the impugned order is not a reasoned order.

“The Respondent Authorities are granted the liberty to issue a fresh Show Cause Notice in terms with Clause 15(2) of the Order of 1982 and thereby calling upon the Petitioner to submit the reply. Upon such reply being submitted, the Respondent Authorities would be at liberty to take such action as deem fit in accordance with law. However, in doing so, the Respondent Authorities have to pass a reasoned order,” the Court said.

Citation: 2024 LiveLaw 7

Case Title: Khagen Sensua v. The State of Assam & 3 Ors.

Case No.: WP(C)/5885/2017

Click Here To Read/Download Order