Cancellation of PDS license based on inadequate notice period and grounds beyond show cause is unsustainable.

The petitioner, a PDS (Public Distribution System) dealer, challenged the cancellation of her license (No. 02-MUS-01-14) by the Sub-Divisional Officer (SDO) via order dated 26.09.2016.

The action followed a surprise inspection where cardholders alleged non-supply of foodgrains for two months.

A show-cause notice dated 15.09.2016 was issued, giving the petitioner only three days to respond.

Despite the petitioner’s detailed reply and submission of registers, the Licensing Authority cancelled the license, a decision later affirmed by the Collector-cum-District Magistrate on 10.09.2021.

The petitioner alleged the cancellation was based on grounds not mentioned in the show-cause notice and that the inspection report was never provided.

1. Whether the grant of only three days to respond to a show-cause notice constitutes "sufficient opportunity" under the Bihar Targeted Public Distribution System (Control) Order.

2. Whether the cancellation of a PDS license based on grounds not disclosed in the show-cause notice and without providing the inspection report violates the principles of natural justice.

Sub-clause (ii) of Clause 27 of the Bihar Targeted Public Distribution System (Control) Order, which mandates "sufficient opportunity" to be heard before cancellation.

Md. Muzaffar Alam @ Muzaffar v. The State of Bihar & Ors. (CWJC No. 10315 of 2020), which established that a three-day notice period is inadequate.

A license cannot be cancelled on grounds alien to the show-cause notice and that failure to supply an inquiry report vitiates the proceedings, as held in 2013 (2) PLJR 706 and 2013 (2) PLJR 636.

The Court found that the Licensing Authority acted in "utter haste" by providing an insufficient three-day window for the petitioner to state her case, thereby violating statutory requirements of natural justice.

The Court noted that the matter was squarely covered by the Md. Muzaffar Alam case, where the Division Bench held that such a short duration does not satisfy the legal threshold of "sufficient opportunity".

The court acknowledged the petitioner's argument that the impugned order relied on discrepancies in records for which no prior notice was given, and the non-supply of the inspection report deprived the petitioner of an effective defense.

Since the original cancellation order was procedurally flawed, the appellate order affirming it was also unsustainable.

The Licensing Authority was granted liberty to pass a fresh order after considering the petitioner’s representation within three months; failing this, the license shall be deemed restored. During this interregnum, the license remains under suspension.