Disposed

Rema Mani Amma v. State of Kerala and Others

Kerala HC28 Sept 2016WP(C)/18078/2006

Case brief

AI extract

What is this about?

Petitioner sought direction to function as an Authorized Retail Distributor by substituting a solvency certificate with cash security. Court directed Government to consider the claim after hearing, maintaining status quo pending decision.

What did the court decide?

Directing the Government to consider the petitioner's claim for substituting solvency certificate with cash security/bank guarantee after hearing; maintaining status quo.

Rema Mani Amma Vs State of Kerala and Others — Consumer Protection | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE SMT. JUSTICE P.V.ASHA

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WEDNESDAY, THE 28TH DAY OF SEPTEMBER 2016/6TH ASWINA, 1938

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WP(C).No. 18078 of 2006 (B)

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PETITIONER:

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REMA MANI AMMA, SREERANGAM, VALATHUNGAL P.O., KOLLAM.

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BY ADV. SRI.LEO GEORGE

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RESPONDENT(S):

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1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT,

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GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.

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2. DISTRICT SUPPLY OFFICER, OFFICE OF THE DISTRICT SUPPLY OFFICER, KOLLAM.

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3. TALUK SUPPLY OFFICER, TALUK SUPPLY OFFICE, KOLLAM.

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BY GOVERNMENT PLEADER SMT PRINCY XAVIER

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28-09-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WPC.NO.18078 OF 2006:

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APPENDIX

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PETITIONERS EXHIBITS:

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P1: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE RESPONDENTS 2 AND 3 DATED 18/9/2004.

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P2: COPY OF THE NOTICE ISSUED BY THE SECOND RESPONDENT DATED 9/11/2005.

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P3: COPY OF THE NOTICE ISSUED BY THE SECOND RESPONDENT DATED 21/6/2006.

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P4: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT DATED 7/7/2006.

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RESPONDENTS EXHIBITS: NIL

/TRUE COPY/

P.A.TO JUDGE

K.V.

P.V.ASHA, J.

W.P(C) No.18078 of 2006-B

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Dated this the 28^th day of September, 2016

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JUDGMENT

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The petitioner approached this court seeking a direction to the respondent to permit her to furnish cash security for conducting ARD No.187 of Kollam taluk.

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Petitioner's uncle late Parameswaran Pillai was the Authorised Retail Distributor (`ARD' for short) for conducting ARD No.187 of Kollam taluk. Consequent to his death, the petitioner had submitted an application to appoint her as an ARD. In the meanwhile, another person was appointed as ARD provisionally; thereafter the petitioner was appointed as ARD 187 of Kollam taluk as permanent substitute licensee under first proviso to clause 45(2) of the Kerala Rationing Order,1966 as per proceedings No.CS.6.415/92 dated 8.8.1996. But that order was challenged by one Sri A.Sherief and ultimately the Government dismissed the petition filed by him against her appointment, as per G.O.(Rt) No.342/2001/SES dated 13.11.2001. The petitioner submits that she was not aware of

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W.P(C) No.18078 of 2006-B 2

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this order of appointment, and therefore provisional appointee was continuing as ARD. On coming to know about the Government order she submitted Ext.P1 representation before respondents 2 and 3 requesting for implementation of the said order and to allow her to function as ARD, after granting her licence. Thereupon, the District Supply Officer issued Ext.P2 notice dated 9.11.2005 directing the petitioner to inform her willingness to run the ARD No.187, within a period of 15 days. This was followed by Ext.P3 notice dated 21.6.2006, again informing the petitioner that in case she does not execute the requisite agreements to run the ARD, her appointment would be cancelled and another licensee would be appointed in her place. The petitioner thereupon submitted Ext.P4 representation dated 7.7.2006 before the District Supply Officer requesting that, the requirement for furnishing security by way of solvency certificate may be dispensed with in her case as she has no immovable property and she was willing to deposit cash in place of solvency certificate and to allow her to run the ARD. The petitioner approached this court immediately after submitting this representation Ext.P4.

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This court by order dated 11.07.2006 stayed further

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W.P(C) No.18078 of 2006-B 3

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proceedings pursuant to Ext.P7 notice. It is submitted by the learned counsel for the petitioner that provisional appointee is continuing as such and a permanent appointment is yet to be made on account of the interim order passed.

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The case of the petitioner is that she is not in a position to furnish the solvency certificate as demanded by the respondents. The learned counsel for the petitioner submits that the petitioner is willing to furnish bank guarantee to the tune of Rs.30,000/- which is the requirement specified in circular No.3/1995 as provided in Order 45 of the Kerala Rationing Order. The contention of the petitioner is that the relevant provision for appointment of an ARD provides only for furnishing to the Government an amount fixed as security for the due performance of ARD. Therefore, it is contended that there is no provision in the rationing order which insists a solvency certificate. Under these circumstances, the petitioner who offered to furnish cash security should have been allowed to function as ARD accepting the security in cash or by way of bank guarantee.

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The respondents have filed a counter affidavit stating in paragraph 6 as follows:

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W.P(C) No.18078 of 2006-B

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“It is pertinent to note that in Board's Circular No.3/95, it is clearly states that “One of the important pre-requisites for appointment as dealer under the KRO 1966, is the financial capacity to lift the allotted stock from the FCI godown or Wholesale depot as the case may be, arrange transportation, keep it in ideal storage condition and distribute it to the Ration Card holders promptly and effectively and for that reason the dealer must be financially sound and stable. Although instruction are already in force as to ensure the financial stability of the applicants seeking appointment of dealers under KRO 1966. Of later these instructions are not strictly and properly enforced by the appointing authority before selection is made. As a result several instances of failure of the dealers in lifting the allotted stock and distribute it to the card holders have come to the notice of the Board feels that the dealers appointed under KRO 1966 should be financially sound and capable of lifting the allotted stock in time and distribute the same to the cardholders as per the instructions issued by the Departmental authorities.” Hence it is clear that the financial stability of the applicant is a must.”

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It is also stated that, the rule insists for a cash deposit of Rs.5,000/- as bank guarantee for a period of one year for due performance of her work and a cash security of Rs.2,000/- for grant of licence. It is further stated that, as per the existing rule, cash security cannot be accepted instead of the solvency certificate and there is an option available for the applicant to furnish a third party solvency, which is to be registered in favour of the appointing authority. Since the petitioner did not utilise this opportunity, she cannot allow to function as an ARD unless and until she furnishes the solvency certificate.

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According to the petitioner, she had furnished a solvency certificate by a third party at the initial stage. On account of her subsequent financial conditions, she is unable to

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W.P(C) No.18078 of 2006-B 5

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furnish a solvency certificate since she does not have any immovable property. The third party whose solvency certificate was furnished has withdrawn support to her. Therefore, her request is that she may be permitted to function as ARD accepting the bank guarantee.

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Heard the learned counsel for the petitioner as well as the learned Government Pleader.

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Clause 45 of the Kerala Rationing Order provides for appointment of authorised retail distributors. The learned Government Pleader points out that, as per sub clause 2 of clause 45 of the Kerala Rationing Order, the application for appointment as ARD shall be made in the form prescribed by the commissioner by notification issued in the gazette. Sl.No.6 in the form of application provides for furnishing the details regarding the solvency of the applicant and the extent of solvency certificate obtained from the Tahsildar. Therefore, the learned Government Pleader submits that there cannot be any exemption from production of solvency certificate and it cannot be substituted by furnishing a bank guarantee.

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On the other hand, the learned counsel for the petitioner submits that the purpose of insisting a solvency

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W.P(C) No.18078 of 2006-B 6

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certificate, is to safeguard the interest of the public and to ensure timely transportation and proper storage and prompt distribution to the card holders. According to the petitioner, such safeguards would be available even if the security is by way of bank guarantee for the amount shown in circular No.3/1995, which is the relevant order for the purpose of furnishing security.

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A reading of the circular would show that the Board started insisting financial stability as a condition precedent for appointment as licensee of an ARD, seeing several instances of failure on the part of dealers in lifting the stock in time and distribute the same to the cardholders. The Board also found the requirement of laying down the parameters to determine the financial status of applicants seeking dealership under KRO 1966. Whether the purpose behind insisting the solvency certificate can be achieved by way of bank guarantee is a question to be examined.

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In view of the fact that the application form itself provides for furnishing of the details regarding the solvency certificate, the question whether the solvency certificate can be substituted by furnishing bank guarantee is a matter to be

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W.P(C) No.18078 of 2006-B

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decided by the Govt.

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Therefore, I direct the Government to consider the claim of the petitioner. For the purpose of such consideration, the petitioner shall submit a representation along with a copy of this judgment. On receipt of the same, the Government shall, after affording an opportunity of hearing to the petitioner, consider and pass appropriate orders on the same. The status quo as on today with respect to ARD No.187 of Kollam taluk shall continue, till a decision is taken by the Government on the representation to be submitted by the petitioner.

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With the above observations, the Writ Petition is disposed

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of.

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Sd/- (P.V.ASHA, JUDGE)

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rtr/

Rema Mani Amma v. State of Kerala and Others

Case brief

What is this about?

What did the court decide?

Rema Mani Amma v. State of Kerala and Others

Case brief

What is this about?

What did the court decide?

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