Krishak Sewa Sahakari Samity Vs State of Chhattisgarh

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2026:CGHC:15875

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NAFR

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Digitally VISHAKHA signed by BEOHAR VISHAKHA BEOHAR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 704 of 2020

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1 - Krishak Sewa Sahakari Samity Maryadit Kohka , Through Its President - Anil Kumar Dewangan, S/o Rambharosa Dewangan, Aged About 55 Years , Krishak Sewa Sahakari Samity Maryadit Kohka, District Durg Chhattisgarh., District : Durg, Chhattisgarh

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--- Petitioner(s)

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versus

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1 - State Of Chhattisgarh Through Secretary, Department Of Food Supplies And Consumer Protection, Mahanadi Bhawan Mantralay Atal Nagar , District Raipur Chhattisgarh., District : Raipur, Chhattisgarh

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2 - The Director Of Food Civil Supplies And Consumer Protection, Block - 2 3rd Floor, Indrawati Bhawan , Mantralay Atal Nagar, District - Raipur Chhattisgarh., District : Raipur, Chhattisgarh

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3 - The Collector (Food) Collectorate Office Durg District - Durg Chhattisgarh., District : Durg, Chhattisgarh

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4 - The Commissioner Civil Supplies And Consumer Protection Department Directorate Civil Supplies And Consumer Protection Block - 2 3rd Floor, Indrawati Bhawan , Mantralay Atal Nagar , District - Raipur Chhattisgarh., District : Raipur, Chhattisgarh

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5 - Food Controller Durg District Durg Chhattisgarh., District : Durg, Chhattisgarh

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6 - The Sub Divisional Officer Durg District Durg Chhattisgarh., District : Durg, Chhattisgarh

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--- Respondent(s)

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WPC No. 843 of 2020

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1 - Durg Jila Thok Upbhokta Sahakari Bhandar Maryadit Through Its Chief Executive Officer, Nirmal Kumar Verma, S/o Late Shri Jhabbu Lal Verma, Aged About 60 Years, Residence Of Shubham Kunj, Surya Nagar Sikola Bhata Durg District- Durg Chhattisgarh., District : Durg, Chhattisgarh

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--- Petitioner(s)

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Versus

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1 - State Of Chhattisgarh Through Secretary, Department Of Food Supplies And Consumer Protection, Mahanadi Bhawan Mantralay Atal Nagar, District - Raipur Chhattisgarh., District : Raipur, Chhattisgarh

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2 - The Director Of Food Civil Supplies And Consumer Protection, Block-2 3rd Floor, Indrawati Bhawan, Mantralay Atal Nagar, District - Raipur Chhattisgarh., District : Raipur, Chhattisgarh

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3 - The Collector (Food) Collectorate Office Durg District - Durg Chhattisgarh., District : Durg, Chhattisgarh

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4 - The Commissioner Civil Supplies And Consumer Protection Department Directorate Civil Supplies And Consumer Protection Block-2 3rd Floor, Indrawati Bhawan Mantralay Atal Nagar, District - Raipur Chhattisgarh., District : Raipur, Chhattisgarh

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5 - Food Controller Durg District - Durg Chhattisgarh., District : Durg, Chhattisgarh

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6 - The Sub Divisional Officer Durg, District - Durg Chhattisgarh., District : Durg, Chhattisgarh

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--- Respondent(s)

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WPC No. 734 of 2020

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1 - Durg Vipnan Sahkari Samiti Maryadit Through Its Manager Shri Hemnath Dewangan S/o Late Shri Chandu Lal Dewangan, Aged About 57 Years, R/o Subhash Nagar, Durg District Durg Chhattisgarh, District : Durg, Chhattisgarh

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--- Petitioner(s)

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Versus

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1 - State Of Chhattisgarh Through The Secretary, Department Of Food Supplies And Consumer Protection, Mahanadi Bhawan, Mantralaya, Atal Nagar, Nawa Raipur District Raipur Chhattisgarh, District : Raipur, Chhattisgarh

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2 - The Director Of Food Civil Supplies And Consumer Protection, Block -2 3rd Floor, Indrawati Mantralaya, Atal Nagar, Nawa Raipur District Raipur Chhattisgarh, District : Raipur, Chhattisgarh

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3 - The Collector (Food) Collectorate Office Durg District Durg Chhattisgarh, District : Durg, Chhattisgarh

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4 - The Commissioner Civil Supplies And Consumer Protection Department Directorate Civil Supplies And Consumer Protection, Block -2 3rd Floor, Indrawati Mantralaya, Atal Nagar, Nawa Raipur District Raipur Chhattisgarh, District : Raipur, Chhattisgarh

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5 - Food Controller Durg District Durg Chhattisgarh, District : Durg, Chhattisgarh

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6 - The Sub Divisional Officer Durg District Durg Chhattisgarh, District : Durg, Chhattisgarh

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... Respondents

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(Cause-title taken from the Case Information System)

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For Petitioners :- Mr. Prakash Tiwari & Mr. B.P. Singh, Advocates For State :- Mr. Sangharsh Pandey, Govt. Advocate

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SB-Hon’ble Shri Justice Amitendra Kishore Prasad

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Order on Board

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07.04.2026

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Since common question of facts and law is involved in these cases, as such, all these petitions are being disposed of by this common order.

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By way of the present petitions, the petitioners are challenging the legality, validity and propriety of the impugned non-speaking order dated 24.12.2019 (Annexure P-1) passed by the office of Respondent No. 1, whereby the representation of the petitioners has been rejected without proper application of mind and without considering the rules and orders applicable at the time of allotment of the fair price shops. It is submitted that the respondent authority, while rejecting the representation, has relied upon the provisions of the Chhattisgarh Public Distribution System (Control) Order, 2016, particularly Chapter 9, Sub-

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Chapter 4, which provides that any agency/society is authorized to operate a maximum of three fair price shops. On that basis, it has been held that the petitioners’ society is operating more than three fair price shops in District Durg, in violation thereof. Pursuant to the said impugned order, the office of Respondent No. 6 has further directed the petitioners to surrender the remaining shops within a period of three days from the date of issuance of the order. However, the fair price shops in question were admittedly allotted to the petitioners’ society in the years 2000–2001, at which time no such restriction or formula limiting the number of shops existed, as the allotments were made under the Chhattisgarh Public Distribution System (Control) Order, 2001, which did not prescribe any such mandatory limitation. Therefore, the action of the respondent authorities in applying the provisions of the Control Order, 2016 retrospectively to the petitioners’ case is arbitrary, illegal and unsustainable in law, being violative of the vested rights accrued in favour of the petitioners’ society.

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The petitioners have prayed for certain reliefs in the writ petitions. Though there are some sort of differences in respect of prayer made by the petitioners in all the petitions, however, in sum and substance, the reliefs are altogether similar and identical. The reliefs prayed in WPC No. 704/2020 (Krishak Sewa Sahkari Samiti Maryadit, Kohka vs. State of Chhattisgarh and others) are

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quoted hereinbelow in order to consider these cases and to decide the same.

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“10.1 The Hon'ble Court may kindly be pleased to call for the entire records relates with the Instant Petition.

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10.2 The Hon'ble may kindly be pleased to quash the Order dated 24.12.2019 passed by the office of respondent no. 1 (ANNEXURE P-1) and Order / memo dated 17.01.2020 issued by the office of respondent no. 6 (ANNEXURE P-2)

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10.3 The Hon'ble may kindly be pleased to pass any other orders/direction that, this Hon'ble Court may deem fit and proper in the facts and circumstances of this case.”

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Facts of the case are that the petitioners’ society is a duly registered co-operative society since 10.02.1976 bearing Registration No. A.R./D.R.G./2135, and has been continuously operating fair price shops under the Public Distribution System in District Durg since 2001 without any complaint, strictly in accordance with its approved bye-laws. The petitioners’ society presently operates multiple fair price shops, has appointed employees for smooth functioning, and has executed agreements with the Food Department while incurring substantial expenditure on infrastructure and staff, sustaining itself through government commission. Although notifications dated 21.03.2006 and 2016 prescribe a general limit of three fair price shops per agency, the

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same was never implemented against the petitioners for more than 13 years, and no objection or action was taken by the authorities during this period. However, in 2019, the respondent authorities abruptly issued notices directing the petitioners to restrict operations to three shops and surrender the remaining within an unreasonably short period, applying the 2016 Control Order retrospectively despite the shops having been allotted under the 2001 Scheme, which contained no such restriction. The petitioners challenged the said action before the Hon’ble Court in W.P.(C) No. 3902/2019, pursuant to which a direction was issued to decide the representation, but the same was rejected by a nonspeaking order without proper consideration of applicable rules. The impugned action of the respondents is arbitrary, illegal, violative of principles of natural justice, and infringes the petitioners’ and their employees’ right to livelihood under Article 19(1)(g), particularly when the petitioners’ society has been functioning lawfully for decades and cannot be penalized for the inaction and delay on the part of the State in implementing its own policies.

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Learned counsel for the petitioners submit that the impugned order dated 24.12.2019 (Annexure P-1) and consequential order dated 17.01.2020 (Annexure P-2) are wholly illegal, arbitrary, unconstitutional and unsustainable in the eyes of law, and are therefore liable to be set aside. It is submitted that the fair price shops in question were duly allotted to the petitioners’ society in

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the year 2000–2001 under the then prevailing “Chhattisgarh (Food) Public Distribution Civil Supplies Scheme, 2001”, which did not prescribe any restriction on the number of shops to be operated by a society, and accordingly, the petitioners’ society was validly allotted five fair price shops. The respondent authorities have erroneously applied the provisions of the Chhattisgarh Public Distribution System (Control) Order, 2016, particularly the restriction limiting operation to three shops, retrospectively to the petitioners’ case, which is impermissible in law, as vested rights accrued under the earlier scheme cannot be taken away by subsequent policy changes. It is further submitted that the respondents have failed to appreciate the settled principle that allotments made under existing rules and schemes cannot be nullified by subsequent policies. The impugned order is a non-speaking order passed without proper consideration of the applicable Scheme of 2001 and without assigning cogent reasons, thereby violating the principles of natural justice. The action of the respondents is also contrary to the constitutional mandate under Article 19(1)(c) and 19(1)(g) of the Constitution of India, as amended by the 97th Constitutional Amendment, which recognizes and promotes the autonomy and functioning of cooperative societies. It is further contended that the Chhattisgarh Co-operative Societies Act is a statutory enactment, whereas the Public Distribution System (Control) Order is merely a delegated executive order issued under the Essential Commodities Act, and

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therefore, the same cannot override or curtail the rights of a duly registered co-operative society. The petitioners’ society, being registered since 1976 and operating continuously without any complaint, has been efficiently managing fair price shops for decades, providing essential commodities to beneficiaries under the public distribution system. The sudden enforcement of the restriction after nearly two decades, without any prior action or notice, is arbitrary, discriminatory and amounts to hostile treatment. It is also submitted that the petitioners’ society has made substantial investments in infrastructure and has employed several persons whose livelihood depends upon the functioning of these fair price shops. The impugned action, if allowed to stand, would not only deprive the petitioners but also their employees of their right to livelihood, thereby causing grave hardship. Moreover, such restriction would defeat the very object of the public distribution system, which is to ensure accessibility and availability of essential commodities to the public, particularly those below the poverty line. It is further submitted that the respondent authorities themselves failed to implement the alleged restriction since 2006 and remained silent till 2019, and therefore, the petitioners cannot be penalized for such inaction on the part of the State. The impugned action is thus hit by arbitrariness, delay, acquiescence and violation of legitimate expectation.

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Learned State counsel submits that the impugned orders have been passed in accordance with the provisions of the

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Chhattisgarh Public Distribution System (Control) Order, 2016, which limits the number of fair price shops that can be operated by one society. It is submitted that the petitioners have no absolute right to continue operating more shops contrary to the present rules, as allotment of fair price shops is always subject to government policy and regulatory control. It is further submitted that the competent authority has passed the orders in public interest for proper implementation of the public distribution system, therefore no interference is called for.

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I have heard learned counsel for the parties and perused the record carefully.

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Upon a careful perusal of the record and the rival submissions made by the parties, this Court finds that the petitioners’ society was initially allotted fair price shops under the Chhattisgarh Public Distribution System (Control) Order, 2001. At the relevant time, there was no restriction on the number of fair price shops that could be allotted to a single society, and accordingly, the petitioners’ society came to be allotted as many as 16 fair price shops in District Durg.

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Subsequently, the regulatory framework governing the public distribution system underwent several changes. The Control Order of 2004 introduced certain categories of eligible entities for allotment of fair price shops, and further amendments made in the year 2006 refined the criteria by restricting allotment primarily

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to co-operative societies and other specified entities such as Gram Panchayats, women self-help groups, forest protection committees, and similar bodies.

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Thereafter, in exercise of powers conferred under Section 3 of the Essential Commodities Act, 1955, the Central Government issued the Public Distribution System (Control) Order, 2015, pursuant to which the State Government framed the Chhattisgarh Public Distribution System (Control) Order, 2016 for ensuring effective distribution, availability and transparency in supply of essential commodities. Under the Control Order, 2016, particularly Clause 9, a clear restriction has been imposed that ordinarily only one fair price shop shall be allotted to an agency in a particular area, and in exceptional circumstances, a maximum of two or three shops may be allotted for valid reasons. However, in no case can more than three shops be allotted to a single society or agency.

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After the coming into force of the Control Order, 2016, the respondent authorities issued a memo dated 27.08.2019 to the petitioners’ society, informing them of the restriction and calling upon them to exercise an option for retaining only up to three fair price shops in accordance with the prevailing policy. It is not in dispute that the petitioners were operating 16 fair price shops, which is far in excess of the permissible limit prescribed under the Control Order, 2016.

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The principal contention of the petitioners is that the allotments were made under the Control Order, 2001, and therefore, the subsequent restriction under the Control Order, 2016 cannot be applied retrospectively so as to take away their vested rights. However, this Court is unable to accept the said contention. The allotment and operation of fair price shops is not a matter of absolute or vested right, but is always subject to regulatory control and policy decisions of the State, framed in public interest for ensuring equitable distribution of essential commodities.

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It is well settled that policy decisions relating to distribution of essential commodities, particularly under the public distribution system, fall within the domain of the executive, and unless such policy is shown to be arbitrary, unreasonable or contrary to statutory provisions, the Court would not interfere. The Control Order, 2016 has been framed in consonance with the provisions of the Essential Commodities Act, 1955 and the directions issued by the Central Government, with the object of streamlining the public distribution system and ensuring wider participation and equitable access.

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In the present case, the petitioners have neither challenged the validity of Clause 9 of the Control Order, 2016 nor the subsequent circular dated 26.02.2020, which forms the basis of the impugned action. In absence of any challenge to the statutory

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framework itself, the petitioners cannot seek to assail the consequential action taken in accordance with such provisions.

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Even otherwise, permitting the petitioners’ society to continue operating 16 fair price shops, despite the clear restriction under the Control Order, 2016, would defeat the very object of the policy and would result in concentration of distribution in the hands of a single entity, which is impermissible. The argument of the petitioners regarding long continuance or legitimate expectation cannot override the statutory mandate and policy decision taken in public interest.

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It is also pertinent to note that the petitioners were granted sufficient opportunity to comply with the new policy by exercising an option to retain the permissible number of shops. The action of the respondents, therefore, cannot be said to be arbitrary or in violation of principles of natural justice.

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In view of the aforesaid analysis, this Court is of the considered opinion that the impugned orders have been passed in accordance with the prevailing Control Order, 2016 and do not suffer from any illegality, arbitrariness or perversity warranting interference under Article 226 of the Constitution of India. The continuation of the petitioners in operating more than the permissible number of fair price shops would dehors the statutory framework.

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