Allowed

Rabindra Kumar Swain v. State of Odisha

Orissa HC10 Sept 2024WP(C)/1369/2024

Case brief

AI extract

What is this about?

The High Court of Orissa quashed orders refusing to renew a Public Distribution System license. It held that the Control Order does not impose a duty on licensees to report beneficiary deaths, and the authorities acted unlawfully without proof of mens rea or embezzlement.

What did the court decide?

Orders dated 23.12.2022 and 20.07.2023 were set aside; the Sub-Collector directed to renew the PDS license within four weeks.

Rabindra Kumar Swain Vs State of Odisha — Specific Performance | Orissa HC (2024)

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IN THE HIGH COURT OF ORISSA, CUTTACK

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W.P.(C) No.1369 of 2024

Rabindra Kumar Swain

Petitioner

-Versus-

State of Odisha and others ....... Opp. Parties

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For Petitioner : Mr. J. PAL, Advocate For Opp. Parties : Mr. P.K. Rout, AGA

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CORAM: JUSTICE SANJAY KUMAR MISHRA

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------------------------------------------------------------------------------- Date of Hearing: 11.07.2024 Date of Judgment: 10.09.2024

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-------------------------------------------------------------------------------

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S.K. Mishra, J.

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1. The writ petition has been preferred

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challenging the order dated 20.07.2023 passed in PDS Appeal Case No.2 of 2023 by the Appellate Authority i.e.

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the Collector and District Magistrate, Jagatsinghpur, vide

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which the prayer of the Appellant for renewal of his PDS

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license in respect of village Bagoi under Kujang Block

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stood rejected.

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2. The brief background facts, which led to the filing of the writ petition, are that the Petitioner applied for the grant of license for Retailor/ Wholesaler as per the guidelines envisaged under Odisha Public Distribution System (Control) Order, 2016, in short, “Control Order, 2016”, and being duly selected, was granted license. Since then he was discharging his duties diligently and distributing the PDS items to the Ration Card Holders of Village Bagoi having no objection from any quarter whatsoever.

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As per Clause 6 of the Control Order, 2016, the Petitioner has to apply for renewal of the license before the Office of the Licensing Authority i.e. the SubCollector, Jagatsinghpur (O.P.3). When the Petitioner has applied for renewal of the PDS license and money has also been deposited for PDS items for the year 2023-24, instead of renewing his PDS license for Fair Price Shop (FPS), his quota has been tagged with a Retailer namely, Chita Swain. The Petitioner, finding no other way, preferred W.P.(C) No. 24702/2022 for renewal of his PDS

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license. The Petitioner was directed by this Court to approach the Opposite Party No.3-Sub-Collector, Jagatsinghpur, who is the Licensing Authority, for consideration and disposal of his renewal application within a period of four weeks. As per the said direction, when the Petitioner approached to the Opposite Party No.3, without going into merits of the case, the Opposite Party No.3 passed an order dated 23.12.2022 in absence of the Petitioner, thereby rejecting the renewal application of license on the sole ground that the Petitioner has not reported about the death of certain ration card holders. Being aggrieved by the said order, the Petitioner approached this Court vide W.P.(C) No.9107/2022, which was disposed of giving liberty to the Petitioner to prefer an Appeal before the Appellate Authority under clause 19(1) of the Control Order, 2016.

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The Petitioner preferred an Appeal before the Collector & District Magistrate, Jagatsinghpur, who is the Appellate Authority (O.P.2) vide OPDS Appeal No.2 of 2023. After hearing the matter on 20.07.2023, the

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Appellate Authority dismissed the Appeal and passed an order rejecting the prayer of the Petitioner for renewal of the license for the year 2023-24. Hence, this writ petition.

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3. The grounds on which the writ petition has been preferred is that, the order dated 20.07.2023 passed by the Appellate Authority under Annexure-6 is not as per law. The Appellate Authority has not considered the case of the Petitioner on the materials available on record and rejected the application of the Petitioner whimsically.

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The order dated 23.12.2022 passed by the

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Sub-Collector, Jagatsinghpur, refusing to renew the license of the Petitioner, has also been challenged by the Petitioner. The sole ground for refusal for renewal of license of the Petitioner is that, the Petitioner has issued ration in the name of some deceased persons, though it is the responsibility of Fair Price Shop, shortly, ‘FPS’, to inform the competent Authority about the death cases and erroneous entries, if any, in the ration cards. As the Petitioner failed to do so intentionally, he violated the provisions of the Control Order, 2016. Hence, the Block

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Development Officer (BDO), Kujanga, did not recommend the name of the Petitioner for renewal of his PDS license. It is the case of the Petitioner that, since the said ground for refusal for renewal of license of the Petitioner has not been specified in Clause 9 of the Control Order, 2016, the finding of the Licensing Authority is palpably wrong.

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It is also the case of the Petitioner that, when

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the Appellate Authority admitted the fact that the PDS materials were distributed through e-PoS device, it is not understood, how financial loss occurred in distributing the PDS materials in favour of the beneficiaries of the ration card holders. When out of 7 deceased, only 2 died during the validity period of the license of the Petitioner, how the Petitioner can be blamed for the financial loss allegedly caused, when the materials have been received by the beneficiaries as mentioned in the said order. Thus, it is a clear case of non-application of mind by the Appellate Authority and the said order is liable to be set aside.

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It is also the case of the Petitioner that as per sub-clause (e) of clause 10 of the Control Order, 2016, the PDS materials can be given to the ration card holder or his authorized representatives. Thus, a licensee of the FPS can distribute the PDS materials through e-PoS device by taking signature or thumb impression of the ration card holder or his/her authorized representative. It is further case of the Petitioner that he has distributed the PDS materials to the representatives of the ration card holders by taking finger print through e-PoS device and the same has not been denied or disputed by the Opposite Parties. It has further been stated that seven ration card holders, who died; their materials were being received by the authorized representatives as per subclause (e) of clause 10 of the Control Order, 2016, so also the number of beneficiaries under each ration card, who are alive and receiving PDS materials, has also been mentioned by the Petitioner.

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It is further case of the Petitioner that the reason of non-renewal of PDS license, as stated by the

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Appellate Authority vide order dated 20.07.2023, is that the performance of the Petitioner is not satisfactory due to disbursement of the ration in favour of the deceased beneficiaries, is a new ground, not being mentioned by Sub-Collector, Jagatsinghpur in the Order dated 23.12.2022.

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4. Opposing to the said prayer made in the Writ Petition, State-Opposite Party Nos.2, 3 & 5 have filed a common Counter Affidavit stating therein that the Petitioner was found to have committed irregularities by issuing commodities to the dead beneficiaries for which BDO, Kujang had recommended for withholding his license and not to consider renewal of his license in the subsequent year. Accordingly, his license was put on hold and not renewed in the year 2022-23. Being aggrieved, the Petitioner preferred W.P.(C) No.24702/2022, wherein

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this Court directed the Sub-Collector, Jagatsinghpur, vide order dated 01.11.2022, to consider and dispose of the renewal application of the Petitioner within four weeks.

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The Opposite Party No.3, thereafter, took up the matter

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and got it enquired through CSO, whose report discloses about the distribution of PDS commodities to the dead beneficiaries for many period causing a huge loss to Govt. revenue. Although notice was issued and duly served on the Petitioner vide Letter No.16747 dated 22.11.2022 for hearing/disposal of his application, scheduled on 02.12.2022, the Petitioner willfully remained absent. Hence, the application was disposed of on merit basing upon the Report of CSO, Jagatsinghpur.

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It is the stand of the State-Opposite Parties

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that the Petitioner has already availed all the forums i.e. the Licensing Authority as well as the Appellate Authority, so also has approached this Court thrice in different writ petitions challenging the order/action of the Opposite Parties, wherein both the Courts observed that the prayer of renewal of license of the Petitioner does not merit any consideration. It is also the stand of the Opposite Parties that the Petitioner submitted an application for renewal of his license for the year 2022-23 on dated 23.03.2022 to BDO, Kujang through online

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mode. As per the provision under clause 9 (a) of the Control Order, 2016, the Licensing Authority can refuse or cancel the license, if the performance report of the FPS is not satisfactory.

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It is further stand of the Opposite Parties that the Petitioner has issued PDS commodities through e-PoS device against some deceased beneficiaries for months together. Though it is the responsibility of FPS to inform the Competent Authority about the death cases and erroneous entry, if any, in the ration cards, the Petitioner failed to do so intentionally, for which a huge financial loss was incurred. Thus, the prayer of the Petitioner for renewal of his license holds no merit and should be rejected.

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5. In response to the Counter Affidavit filed by the State-Opposite Parties, the Petitioner has filed a Rejoinder stating therein that he has not received any show-cause notice from the Licensing Authority regarding any allegation made against him. However, the settled position of law is that if any allegation is received against

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any one, then the person, against whom the allegations have been made, has to be given a chance to show cause to refute the allegations and/or to put forth his case. When the allegations were not served on the Petitioner, giving him a chance to show cause, the Authority cannot act upon the said allegation unilaterally, which is a clear case of violation of principle of natural justice. Further, there is no such clause in the Control Order, 2016 empowering the BDO as the recommending authority, before renewal of the PDS license.

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It has also been stated in the Rejoinder that the Petitioner has not received any notice vide letter No. 16747 dated 22.11.2022 to appear before the Licensing Authority on 02.12.2022. In fact, the matter was not decided on 02.12.2022, rather it was decided on 23.12.2022. No further notice was ever served on the Petitioner by the Licensing Authority (O.P.3).

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6. Learned Counsel for the Petitioner, apart from reiterating the facts detailed in the Writ Petition so also Rejoinder filed in response to the Counter filed by the

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State-Opposite Parties, submitted that the Report dated 30.11.2022 submitted by the Addl. Civil Supplies Officer is highly objectionable, as the alleged Enquiry was conducted on 05.05.2022, whereas the Report was submitted on 20.11.2022 without mentioning therein as to its genuineness at the relevant point of time.

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Learned Counsel for the Petitioner further

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submitted that the issue of PDS stocks through e-PoS device cannot be assumed as a fake issue and the issue is absolutely legal and genuine, as without thumb impression of the card holder or beneficiary, stock cannot be issued. The stock is being issued in favour of the card holders, beneficiaries, family members of the card holders as per the prevailing practice and norms under the Control Order, 2016.

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Learned Counsel for the Petitioner, drawing attention of this Court to sub-clause-(e) of Clause-10 of the Control Order, 2016, submitted that the said provision permits the beneficiaries and family members of

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the card holders to receive the stock. Hence, the

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Petitioner issued stock in favour of the family members of the deceased card holders through e-PoS device, in absence of information regarding the death of the beneficiaries. It is the family members of the deceased card holders, who is to inform the FPS Owners/Retailers regarding the death of the beneficiary. In absence of any intimation regarding such death, it would be difficult on the part of FPS Dealer/Retailer to know about the death of a beneficiary. However, as regards the death of the beneficiaries, soon after receiving such information, the Petitioner has reported the said fact to the Block Office, Kujanga subsequently, in the specified format, for deletion of the name of the deceased beneficiaries so also to stop the allotment of quota and delete the name of the dead persons from the beneficiary list.

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After intimation of the said fact to the Block Office, it is the sole responsibility of the Authority concerned at Block level to do the needful for deletion of the names of the dead persons from the beneficiary list. The Licensing Authority has failed to take note of the said

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fact into consideration while passing the order dated 23.12.2022.

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Learned Counsel for the Petitioner further

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submitted that, the Petitioner has not deliberately issued PDS stocks in favour of the dead persons at any point of time. Rather, it is done due to ignorance of the Petitioner. Soon after knowing about the death of some of beneficiaries, the Petitioner has reported the said fact to the BDO, Kujanga, which facts cannot be ignored. Thus, the Petitioner has not violated any clause of the Control Order, 2016.

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Learned Counsel for the Petitioner further

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submitted that Clause-9(a) of the Control Order, 2016 permits the Licensing Authority to refuse or cancel the license, if the performance report of the FPS is not satisfactory. Non-disclosure of the fact as to death of some of the beneficiaries, the same being beyond the knowledge of the Petitioner, cannot be a ground to bring the said unintentional act of the Petitioner to be “Not Satisfactory”. The Licensing Authority can only refuse to

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grant or renew or reissue a license or suspend or cancel a license for contravention of conditions of license or Control Orders.

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To substantiate his submissions, learned Counsel for the Petitioner relied on the decisions in Taylor Vs.Tailor reported in (1875) LR I Ch D 426 and Babu Verghese Vs. Bar Council of Kerala reported in (1999) 3 SCC 422.

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7. Per contra, learned State Counsel, referring to the finding of the Appellate Authority, vide impugned order dated 20.07.2023, submitted that the Appellate Authority, while passing the said order, thereby confirming the order passed by the Licensing Authority, took note of the report of the ACSO, Jagatsinghpur, wherefrom it is well revealed that the Petitioner/Appellant had issued PDS Commodities through e-PoS device against some deceased beneficiaries causing financial loss to the State.

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Learned State Counsel further submitted that the Sub-Collector, Jagatsinghpur, who is the Licensing

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Authority, has rightly passed the order dated 23.12.2022, declining to allow the prayer of the Petitioner for renewal of his license and such prayer for renewal of the license for the year 2023-24 in respect of Village-Bagoi under Kujanga Block holds no merit for consideration and the Writ Petition deserves to be dismissed.

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8. In view of the pleadings on record so also submissions made by the learned Counsel for the parties and the legal provisions under the Control Order, 2016, the points emerge to be answered by this Court are:

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I) Whether, the Sub-Collector, Jagatsinghpur was justified to reject the application of the Petitioner for renewal of his PDS License for the year 2023-24 vide the impugned order dated 23.12.2022?

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II) Whether the Appellate Authority (Collector, Jagatsinghpur) was justified to reject the Appeal of the Petitioner vide the order dated 20.07.2023, relying on the report of the ACSO, Jagatsinghpur, wherein it was indicated that the Petitioner-Appellant issued PDS Commodities through e-PoS device against

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some of the deceased beneficiaries causing financial loss to the State?

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9. Both the points, being interrelated, are taken

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up together for the sake of brevity and clarity.

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Before dealing with the points, as detailed

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above, it would be apt to reproduce below Clause-9, Clause-10, Clause-17, Clause-27(1) & Clause-29 of the Control Order, 2016.

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“9. Power to cancel / Refuse License. - (1) The Licensing Authority may cancel or refuse to renew any license , if,-

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(a) it is of the opinion that the performance of the licensee is not satisfactory;

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(b) the licensee has acted in contravention of any provision of the Act or any order issued thereunder or terms and conditions of license;

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(c) the licensee has other commercial interest, which may be detrimental to the smooth functioning of the Targeted Public Distribution System;

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(d) the expected size of operation of the dealer is not economically viable;

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(e) the renewal of license would otherwise be not in the interest of efficient functioning of the Targeted Public Distribution System.

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(2) The Licensing Authority may refuse to grant or renew the license of a private Dealer, if another applicant from the categories mentioned in Sub-clause 3 of Clause 4 is available to be appointed as a dealer in the locality or area served or proposed to be served by the applicant.

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(Emphasis Supplied)

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10. Duties and Responsibilities of Fair Price Shop Licensees .-(1) Every licensee of a Fair Price Shop shall have following duties, namely,-

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(a) to deposit the cost of the PDS commodities with the OSCSC Limited or kerosene wholesalers, as the case may be, within the time stipulated by the Government in shape of Demand Draft/ Cheque, or through NEFT;

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(b) to receive the PDS commodities from H&T contractors, Level-II or kerosene wholesalers with proper acknowledgements in shape of Acceptance Note or Tally register, as the case may be;

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(c) to make available the whole allotment of the essential commodities, after taking delivery, from the first day of the month;

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(d) to sell the essential commodities to Ration Card Holders as per his entitlement strictly at the retail issue price fixed by the Government and personally conduct or supervise such transactions;

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(e) to enter the date of issue and quantity of the commodities under the PDS issued and take the signature/left thumb impression of Ration Card Holder/authorized representative of Ration Card Holder in the relevant sale register; (f) to be responsible to enter the sale details of the commodities under the PDS in the Ration Distribution Book in Form C of each Ration Card Holder;

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(g) to return the Ration Card and Ration Distribution book to the Ration Card Holder after the transaction is over;

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(h) to store and sell essential commodities only at the place specified in the license and take adequate measures to ensure that the essential commodities are stored in proper scientific condition,

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(i) to inform the consumers tagged to him about the arrival of the stocks at his center;

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(j) to behave with consumers cordially and with due courtesy;

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(k) to obtain, in tally register, utilization certificate of the members of GP level or, as the case may be, Ward level Advisory Committee before subsequent issue of stocks;

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(l) to obtain prior written permission from the local Inspector of Supplies or Authorized Officer for closing the Fair Price Shop in business hours;

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(m) to display the following information on a Notice Board at a prominent place in the shop namely:-

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(i) list of all Ration Cards attached to the shop;

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(ii) entitlement of essential commodities;

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(iii) retail issue price of each of the essential commodities;

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(iv) scale of issue;

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(v) timing of opening and closing of the Fair Price Shop;

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(vi) stocks of each of the essential commodities received during the month on daily basis;

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(vii) opening and closing stock of each of the essential commodities on daily basis; and

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(viii) the name and address of the authority before whom grievance may be made or complaint petition can be filed with respect to quantity, quality and price of essential commodities.

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(n) to maintain updated records of Ration Card Holders including priority households and Antyodaya Anna Yojana households, Stock Register, Sale Register, Tally Register, Complaint Book and such other records as may be prescribed by the Government or the Licensing Authority;

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(o) to furnish copies of specified documents, namely, Ration Card Register, Stock Register, Sale Register to the concerned Gram Panchayat,

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or Municipalities, or as the case may be, or Advisory Committees and to anybody authorized by the Government for the purpose as and when so required by such authorities;

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(p) to produce books of accounts and records relating to allotment and distribution of essential commodities to the inspecting agency and furnishing such information as may be called for;

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(q) to display samples of food grains being supplied through the Fair Price Shop;

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(r) to keep the Fair Price Shop open throughout the month during the stipulated working days and business hours;

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(s) to provide the relevant extracts of the records maintained by him to the beneficiaries on payment of such fee as may be decided from time to time;

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(t) to permit the Ration Card Holder to buy essential commodities in instalments as per his entitlement;

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(u) to keep certified Weights and Measures for distribution of essential commodities to consumers and get Weights and Measures renewed timely and keep verification Certificate in the business premises;

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(v) to ensure that he or his agents and employees kept by him in charge of stock and sale of PDS commodities on his behalf comply with the terms and conditions of the license and the provisions of this Order, and

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(w) to intimate to the Ration Card Holder, in writing, the reasons for denial or non-supply of quota.

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(2)Without prejudice to the forgoing duties, the Licensee of the Fair Price Shop or his agent or employees shall not, under any circumstances ,-

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(a) deny the Ration Card Holder the supply as per his entitlement of the PDS commodities, if the commodity is in stock ;

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(b) retain the Ration Card with him after the transaction is over or obtain Ration Cards from the consumers prior to such transaction;

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(c) make false entry in the Ration Distribution book or sale/stock/tally register or any other official record;

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(d) engage in black marketing or diversion of essential commodities under the Public Distribution System to the open market;

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(e) handover or sublet such fair price shops to other unauthorized person or organization;

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(f) close the ration shop during working hours without prior written permission of the Inspector of Supplies or other Officer Authorized by the Licensing Authority; and

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(g) keep the records relating to the fair price shop at any place other than the licensed business premises.

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(Emphasis Supplied)

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17. Contravention of Conditions of License or

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Control Orders. - (1) No holder of a license issued under this Order, or his agent or servant or any other person acting on his behalf or placed by him in physical charge of stock Shall contravene any of the terms or conditions of the license or of any control Order issued under the Act.

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(2)If any such person contravenes any of the said terms or conditions, without prejudice to any other action that may be taken against him, the license shall be cancelled and security deposit shall be forfeited in full or in part:

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Provided that no such order shall be made under this clause unless the licensee has been given a reasonable opportunity of stating his case and if he desires of personal hearing against the proposed cancellation and forfeiture.

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(3) Upon compliance with all obligations under the license by the licensee, the amount of security deposit or such part thereof, which is not forfeited as aforesaid,

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shall be refunded to the licensee after termination of the license by the Licensing Authority.

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(4) The Licensing Authority may, by order, without giving prior notice to the Dealer, suspend the license of a Dealer, if a proceeding under Sub-clause (1) has been initiated against the dealer, and the said Licensing Authority is satisfied that it is not in the interest of the smooth operation of the Public Distribution System to allow the Dealer to handle the PDS stocks.

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Explanation -For the purpose of this sub-clause, the proceedings under sub clause (1) shall be deemed to have been initiated on the date of issue of the showcause notice by the Licensing Authority.

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(5) No prior show cause notice would be required for withholding the allocation of quota to any licensee for a period not exceeding sixty days pending enquiry or investigation against the licensee, if the Licensing Authority has reasons to believe that the licensee has not maintained proper and correct accounts in respect of the quota allocated to him earlier or has diverted the Public Distribution System stocks or committed any other irregularities.

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27. Ration Card Management System.- (1) A dynamic Ration Card Management System (RCMS) shall be maintained for management and updation of the ration card on the following circumstances, namely, -

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(a) Beneficiaries who have been left out but otherwise eligible to get the ration card shall have to apply for issue of new ration card in the Form-G at the RCMS centre;

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(b) In case of loss, mutilation or damage, etc. the beneficiary has to apply in the manner as may be specified by the Government along with fee as may be decided by the Government, from time to time, for issue of duplicate ration card. The applicant has to give an undertaking in support of loss of old ration card or has to submit the mutilated or damaged ration card before receipt of the duplicate ration card in lieu of it;

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(c) If the beneficiary needs to undertake any correction or change in any entry in the ration card with respect to information such as aadhaar number, EPIC number, change in relationship of the HoH, address, assigned Fair Price Shop, members, entitlements and such other matters, the beneficiary has to apply in Form-G along with fee as may be decided by the Government, from time to time and the beneficiary has to give the requisite information clearly along with documentary support for the request made;

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(d) The beneficiary can be deleted from the RCMS database on voluntary withdrawal by the beneficiary or on being detected as ineligible as per the exclusion criteria or due to demise of the beneficiary;

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(e) In case of marriage and birth, if such beneficiary is otherwise eligible, the beneficiary shall have to apply in Form-G along with fee as may be decided by the Government, from time to time at the RCMS centre for issue of modified ration card;

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(f) In case of migration of the beneficiary family, the beneficiary shall have to apply for transfer of the ration card from the PDS system under the local RCMS centre by surrendering the old ration card which shall be cancelled by the RCMS centre and an acknowledgement slip for the same shall be given to the beneficiary enabling him to submit fresh application at the RCMS centre in the new place of residence for issue of new ration card on payment of such fee as may be decided by the Government, from time to time; (g) In case of splitting of the beneficiary family, the beneficiary shall have to apply in Form-G for splitting of the old ration card into two or more ration cards and accordingly, the RCMS centre shall issue the new ration card keeping the original ration card number intact in one ration card and with new ration card number(s) in the

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additional ration cards to the beneficiary family on receipt of such fee as may be decided by the Government, from time to time for numbers of ration cards issued;

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(h) In case of change in the status of the beneficiary family from Antyodaya Household to Priority Household, the beneficiary shall have to apply in the Form-F along with such fee as may be decided by the Government, from time to time for modifications in the ration card status at the concerned RCMS centre and accordingly, new ration card shall be issued as per the request;

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(i) In case the beneficiary family want to add requisite additional information with respect to entry of new mobile number, email id, date of birth, bank account details, entry or correction of LPG consumer number and agency, entry or correction of electricity consumer number and company, the same shall be done at the local RCMS Centre.

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(Emphasis Supplied)

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29. Penal Provisions for Fraud by Ineligible

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Beneficiaries: - (1) If any person coming under the exclusion criteria notified by the State Government obtains a ration card by providing false information, the following action shall be initiated against such person, namely,-

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(a) Criminal proceeding will be initiated;

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(b) The market cost of the foodgrains taken by such person shall be recovered from him/her as an arrear of land revenue with 10% rate of interest per annum from the date of receipt of the subsidized foodgrain;

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(c) In case of employees of Government or Corporation or PSU, departmental proceeding shall be initiated against such employees”.

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Clause 9 of the Control Order, 2016 deals with the provisions regarding power to cancel or refuse to renew any license on the grounds, as detailed under the said clause.

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Similarly, Clause-10 of the Control Order, 2016 details the duties and responsibilities of a FPS Licensee. None of the duties detailed under sub-clause-(1) of Clause-10 of the Control Order, 2016 casts a duty and responsibility on the part of the FPS Licensees to inform the Authority concerned regarding the death of a beneficiary. Rather, sub-clause-(1)(e) of Clause-10 of the Control Order, 2016 casts a duty on the licensee to enter the date of issue and quantity of the commodities under the PDS issued and take the signature and left thumb impression of the Ration Card Holder or the authorized representative of the Ration Card Holder, in the Sale Register.

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In addition to the same, to check fraud, the State has introduced the e-PoS device for ensuring distribution of PDS in favour of the Real Card Holders

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and authorized representatives of the Ration Card Holders.

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Similarly, Clause-17 of the Control Order, 2016

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empowers the Licensing Authority to suspend and cancel the license of a PDS Retailer/Dealer so also forfeit the security deposit made by the Retailer. But, before doing so, the said Clause mandates that the Licensee has to be given a reasonable opportunity of stating his case and if he so desires, he should be heard in person. So far as the action of the Licensing Authority in refusing to renew or re-issue the license in favour of the Petitioner, does not come under the ambit of Clause-17 or Clause-18 of the Control Order, 2016. However, if the Licensing Authority refuses to renew or re-issue a license in favour of a Retailer/Dealer, the said action of the Licensing Authority, being appealable under Clause-19 of the Control Order, 2016, the Petitioner had rightly approached the Collector of the concerned district, he being the Appellate Authority.

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10. As is revealed from the communication dated 28.05.2022, as at Annexure-A/4 of the Counter filed by the State-Opposite Parties, the BDO, Kujanga requested for withholding of renewal of license in favour of some of Retailers, including the present Petitioner, on the ground that there are some allegations against those Retailers, which are under investigation. Hence, their names were not recommended for renewal of license. It was further recommended vide the said communication to tag the quota of those Retailers to some other Retailers.

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11. As is further revealed from records, the SubCollector, Jagatsinghpur passed the impugned order dated 23.12.2022, declining to allow the Application of the Petitioner for renewal of his license on the ground

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that it is the responsibility of FPS to inform the competent Authority about the death cases and erroneous entry, if any, in the Ration Card. But the Petitioner failed to do so intentionally, which violates the provisions of Control Order, 2016, the license condition and order of the higher Authority. However, it has not

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been specifically mentioned in the impugned order dated 23.12.2022 as to what was the basis to come to such a conclusion that the Petitioner failed to bring to the notice of the Authority concerned regarding death of some of the beneficiaries intentionally, though he had alleged knowledge about such death cases.

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That apart, it has not been indicated in the said order as to which provision of the Control Order, 2016 so also which license condition and order of the higher Authority was violated by the Petitioner, thereby not recommending his name for renewal of his PDS License.

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12. That apart, on perusal of other impugned order dated 20.07.2023, as at Annexure-6, passed by the Appellate Authority in PDS Appeal Case No.02 of 2023, it is ascertained that though the Appellate Authority took note of the stand taken by the present Petitioner/Appellant in his Rejoinder Petition filed in response to the para-wise comments submitted by the Licensing Authority before the Appellate Authority, but

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did not deal with the said stand of the Petitioner/Appellant, while confirming the order dated 23.12.2022 of the Licensing Authority, vide which the prayer of the Petitioner/Appellant for renewal of his License was declined and the Appeal stood rejected. It would be apt to reproduce below, the relevant portions from the impugned order passed by the Appellate Authority, for ready reference.

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“XXXX During hearing the appellant has filed one rejoinder petition stating therein that, as regard the report dtd 30.11.2022 submitted by the Add. Civil Supplies Officer, Jagatsinghpur on the verification of retail centre of the petitioner on 05.05.2022 at about 3.30 P.M., the same is highly objectionable that, although the authority verified the retail centre of the petitioner on 05.05.2022 and reported the date up to which the stock has been issued i.e. 26.05.2022, 16.07.2022 and 18.07.2022 even in e-PoS device to the dead beneficiaries. It is astonished that, while the authority conducted enquiry on 05.05.2022 but submit report on 20.11.2022 and the genuineness thereon have not mentioned at any point of time. Thus, the report appears on surmises only and being devoid of any merits. The issue of PDS stocks in/through e-PoS device cannot be assumed as fake issue and the issue is

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absolutely genuine since without thumb impression of the Card Holder or beneficiary stock cannot be issued. Hence, it can be construed that, the stock has been issued in favour of the Card holders / beneficiaries / family members of the Card holders as per prevailing practice & as per norm. As regards death of any family member of the Card holder/Card holders, it is practically difficult on the part of the petitioner retailer to ascertain and without informing the retailer, the family members of the Card holders have been received the stock of dead persons, for which the petitioner retailer cannot be held responsible as well as guilty.”

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“XXXXX It is not reported to establish at any point of time that, the PDS commodities against the reported dead beneficiaries have been embezzled or misappropriated by the Appellant at any point of time, rather the same have been issued in favour of the family members of the dead persons without knowledge in absence of information of the death by the recipient of the PDS stocks to the retailer. The appellant has not deliberately issued stocks of the dead persons at any point of time and it is done due to ignorance of the Retailer and soon after knowing about the death, the retailer has reported to the Block office, Kujanga which cannot be ignored while considering the present appeal . In view of the above vibes and since the Appellant-petitioner-retailer have not violated any Clauses of the OPDS Control Order, 2016 and offence thereon have not been established in term Govt. of

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India’s Letter No.28(12)/86-ECR Dt. 9.2.1988 covers the observation of the Supreme Court of India that,

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Xxxxx “if any person contravenes any order made under Section-3 held that mens rea which is an essential ingredient of an offence was required to be proved. The Supreme Court took a view that before an accused can held to be guilty for having contravened any provisions of the Act /Order, it must be established that he had the necessary mens rea and if on

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the other hand, it is found that the contraventions was unintentional and unknowingly made, he cannot be held guilty for the contravention.”

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(Emphasis Supplied)

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13. Despite recording the said stand of the Petitioner/Appellant, as it reveals from the concluding paragraph of the impugned order dated 20.07.2023 passed in PDS Appeal Case No.02 of 2023, the Appellate Authority has simply recorded the stand of the respective parties and no reason has been assigned in the said order dealing with and giving detailed reasons to negate the said points agitated by the Petitioner/Appellant before the Appellate Authority so also to disbelieve such a stand and

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reason for disagreeing with such stand of the Petitioner/Appellant, so also reason for agreeing with the views of the Licensing Authority.

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That apart, though the impugned order dated 23.12.2022 passed by the Sub-Collector, Jagatsinghpur,

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as at Annexure-3, indicates that CSO, Jagatsinghpur submitted an Enquiry Report vide letter dated 13.12.2022, but in the impugned order dated 23.12.2022 passed by the Appellate Authority, in the concluding paragraph, there is a reference to so called report of the ACSO, Jagatsinghpur, without indicating the date of such report, thereby creating a confusion in the mind of this Court as to which report was referred to by the Authority. However, on being directed by this Court vide order dated 22.04.2024, an Affidavit was filed by the Opposite Parties-State enclosing thereto a Report dated 30.11.2022 of the Addl. C.S.O, Jagatsinghpur. As the said Report pertains to three Retailers, relevant portion of the said Report, pertaining to the Petitioner, is extracted below:-

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“ 2. Rabindra Kumar Swain

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The retail Centre of Sri Rabindra Kumar Swain of Bagoi village was verified on 05.05.2022 and the detail verification is enclosed for your kind referene.

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During our enquiry we interacted with some beneficiaries tagged to Sri Rabindra Kumar Swain and the consumer feedback is enclosed for your kind perusal.

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On further enquiry it was found that Sri Rabindra Kumar Swain issued PDS Commodities in name of some dead beneficiaries in e-PoS device. The details are as follows.

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Sl No	*Ration Card* *No.*	*Name of Death* *person*	*Date of* *Death*	*Date upto* *which the* *stock has* *been issued*
1	_12050311420 _	*Bipin Bihari Swain*	_12.02.2021 _	*18.07.2022*
2	_12050310564 _	Jayakrushana Rout	14.09.2019	09.04.2022
3	_12050310753 _	Rangalata Das	18-Sep	09.04.2022
4	_12050311106 _	Ahalya Rath	21.01.2018	10.04.2022
_5 _	_12050311108 _	_Purnachandra Rath _	_02.09.2015 _	*26.05.2022*
6	_12050310669 _	Pahali Barik	03.07.2019	10.04.2022
7	_12050310140 _	*Kuntala Rout*	_04.11.2021 _	*16.07.2022*

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Observation: Since it is the responsibility of the FPS to inform the competent authority about the death cases and shifted case if any. But in both case Sri Swain failed, for which some financial loss occurred”.

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(Emphasis Supplied)

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From the said Report, it is well revealed that

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though the concerned Officer conducted field enquiry on

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05.05.2022, but submitted the said Report much thereafter i.e. on 30.11.2022, indicating therein the Ration Card No, name of the death person, date of death and date up to which the stock has been issued in favour

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of the beneficiaries of the dead persons. This Court is

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unable to understand how the concerned ACSO could be able to ascertain the last date of issue of stock in favour of Bipin Bihari Swain to be “18.07.2022”, in case of Kuntala Rout to be “16.07.2022” and in case of Purna Chandra Rath to be “26.05.2022”, which dates are admittedly after the date of field verification , which was held on 05.05.2022.

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That apart, the stand of the

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Petitioner/Appellant regarding absence of knowledge regarding death of some of the beneficiaries so also issuance of PDS Commodities through e-PoS device in favour of the authorized representatives of the Ration Card Holders, being so permissible through e-PoS device in terms of the Clause-10-(1)(e) of the Control Order, 2016, has also not been dealt either by the Sub-Collector, Jagatsinghpur (Licensing Authority) or by the Collector and District Magistrate, Jagatsinghpur (Appellate Authority).

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14. This Court is also of the view that where there

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is a specific provision under clause-10(e) for issuance of

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PDS commodities in favour of the authorized

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representatives of the Card Holders, in case of death of a Ration Card Holder, unless an authorized representative volunteers to disclose before the FPS Licensee regarding death of the Ration Card Holder, it is almost impossible and impracticable on the part of the FPS Licensee to know about the death of the Ration Card Holder and inform the authority concerned regarding such death in time .

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15. This Court is of further view that in absence of any allegation as to embezzling or misappropriating the PDS Commodities and rather, release of such benefits in favour of the Authorized Persons/Family Members through e-PoS device and subsequently, after knowing about the death of those beneficiaries, giving due intimation to the Block Officer, should not have been a ground for rejection of the prayer of the Petitioner for renewal of the PDS License in his favour for the year 2023-24.

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16. As is evident from clause-10 of the Control Order, 2016, under the said clause, the duties and responsibilities of a Fair Price Shop Licensee has been detailed exhaustively. However, under the said clause, no duty is casted on the Fair Price Shop Licensee, shortly, FPS Licensee, to give information to the Authority concerned regarding the death of Ration Card Holders. Rather sub-clause (e) of clause-10 mandates the FPS Licensee to issue PDS commodities in favour of the authorized representatives of the Card Holders in his absence to receive the PDS commodities by putting their signature or left thumb impression in the relevant Sale Register.

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17 . Clause-27(1) of the Control Order, 2016 regarding “Ration Card Management System”, details about various provisions for deletion of name of beneficiary from the date base in case of voluntary withdrawal by the beneficiary or on being detected as ineligible as per exclusion criteria or due to demise of the beneficiary , correction or change in any entry in the

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ration card, in case of marriage and birth, if such beneficiary is otherwise eligible, issuance of modified ration card , in case of migration of the beneficiary family, for transfer of ration card , for splitting up the beneficiary family in to two or more ration cards by applying in Form-G , in case of change in the status of the beneficiary family from “Antyodaya Household” to “Priority Household” card , to apply in Form-F . But, in case of demise of the beneficiary/card holder, there is no such specific provision under the said Clause for giving intimation by authorized representative to the authority concerned or to the FPS Licensee regarding death of the beneficiary within a time frame and for regularization of the Ration Card in favour of one of the legal heirs, who is the head of the family, if he or she is otherwise eligible for a ration card, after the demise of the original beneficiary/Ration Card Holder.

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18. Clause 29 of the Control Order, 2016 prescribes various penal provisions for fraud committed by an ineligible beneficiary, if any person, coming under the

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exclusion criteria notified by the State Government, obtains a Ration Card by providing false information. Such penal provisions are initiation of criminal

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proceeding, recovery of market cost of food grain taken by such person with 10% interest per annum there on from the date of receipt of the subsidized food grain, as an arrear of land revenue under the Odisha Public Demand Recovery Act, 1962. In addition to the same, if the offender is found to be an employee of Government or Corporation or PSU, initiation of departmental proceeding against such employee for committing such fraud. But there is no such penal provision under the Control Order, 2016 to take action against the authorized representative of a deceased Ration Card Holder, who suppresses the fact of death of a Card Holder and continues to receive PDS commodities from the FPS licensee.

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19. The legal maxim “ Expressio Unius Est Exclusion Alterius” means, if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and any other manner is barred.

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The origin of this rule is traceable from the decision in

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Taylor Vs. Tailor (Supra) which was subsequently followed by Lord Roche in Nazir Ahmad Vs. King Emperor reported in AIR 1936 PC 253(2). The said principle has been well recognized and holds the field till date, as held in Babu Verghese Vs. Bar Council of Kerala (Supra) and Zuari Cement Limited Vs. Regional Director, Employees State Insurance Corporation, Hyderabad and Others reported in (2015) 7 SCC 690. 20. In the present case, the Licensing Authority as well as the Appellate Authority acted in absence of any provision to the said effect for cancellation/ non-renewal of license of the Petitioner on the ground of nondisclosure of fact regarding death of some of the Ration Card Holders, which is unspecified under clause 10 the Control Order, 2016 to be one of the duties and responsibilities of FPS Licensee. Also there is no such provision under Clause 17 of the Control Order, 2016, which can be treated as contravention of conditions of

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license or Control Order, permitting the Licensing

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Authority to take a decision to not to renew the license of a FPS Licensee.

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21. Law is well settled that before an accused can held to be guilty for having contravened any provisions of the Act/ Order, it must be established that he had the necessary mens rea and if, on the other hand, it is found that the contravention was unintentional and unknowingly made, he cannot be held guilty for the contravention. In absence of any proof or finding of the Addl. C.S.O, Jagatsinghpur in his Report dated 30.11.2022 regarding knowledge of the said fact of death of the Card Holders and non-disclosure of the same by the Petitioner before the authority concerned, this Court is of the view that the said findings of the Licensing Authority so also the confirming order passed by the Appellate Authority are perverse and deserve interference. Both the points, as detailed above, are answered accordingly.

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22. In view of the observations made above, so also relevant provisions under the Control Order, 2016, as

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extracted above, and settled position of law, this Court is of the view that the Licensing Authority so also Appellate Authority have not acted in terms of the provisions in the Control Order, 2016, while passing the impugned orders and both the said orders are liable to be set aside.

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23. Accordingly, the order dated 23.12.2022 of the Sub-Collector, Jagatsinghpur, as at Annexure-3, so also the confirming order dated 20.07.2023 passed by the Appellate Authority in PDS Appeal Case No.02 of 2023, as at Annexure-6, are hereby set aside and quashed.

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24. The Sub-Collector, Jagatsinghpur, who is the Licensing Authority, is directed to renew the PDS License of the Petitioner at the earliest, preferably within a period of four weeks from the date of production of certified copy of this order.

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25. It is made clear that while implementing this order, the Licensing Authority shall ensure smooth and uninterrupted supply of PDS articles in favour of the beneficiaries for the interregnum period.

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26. The present case is a glaring instance of fraud committed by the authorized representatives of the Card Holders, who died long before i.e. in between 2015 to 2021. Admittedly, such fraud has been committed taking advantage of the lacunae in the Control Order, 2016, as detailed above. Hence, this Court is hopeful that the State Government shall do well and bring in necessary provisions in the Odisha Public Distribution System (Control) Order, 2016, by way of amendment in the “Ration Card Management System” under clause-27(1) of the Control Order, 2016, fixing responsibility on the authorized representative of a Ration Card Holder to inform the FPS Licensee and/or the concerned Officer of the State Government regarding the death of Card Holder. In case of failure to do so and receiving PDS commodities by suppressing such fact, penal provisions should also be inserted in the Control Order, 2016, alike clause 29 of the Control Order, 2016, to check this kind of fraud, often committed by the authorized representatives of the deceased ration card holders.

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27. With the said observation/direction, the Writ Petition stands allowed and disposed of. No order as to cost.

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….….……………………

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S.K. MISHRA, J.

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Orissa High Court, Cuttack Dated, 10^th September, 2024/Kanhu