Cancellation of PDS License without considering show cause explanations violates principles of natural justice.

The petitioner, a Public Distribution System (P.D.S.) dealer since 1987, challenged the cancellation of his license (No. 15/1987)

The Sub-divisional Officer (SDO), Naugachia, issued show-cause notices on 16.08.2022 and 01.11.2022, alleging that certain ration card holders linked to his shop were family members with suspicious, non-Aadhaar-linked cards

The petitioner submitted replies explaining that these individuals lived separately, had surrendered cards, or were not connected to his shop

On 16.11.2022, the SDO cancelled the license without considering the replies

Both the Appellate authority (Collector) and Revisional authority (Divisional Commissioner) subsequently upheld the cancellation

1. Whether the licensing authority’s failure to consider the petitioner’s written explanations and the subsequent summary dismissal of his defense violated the principles of natural justice

2. Whether the orders passed by the appellate and revisional authorities were legally sustainable given they were non-speaking and mechanically affirmed the original cancellation

The court applied the principles of natural justice, which mandate that quasi-judicial authorities must provide an effective opportunity of hearing and pass "reasoned and speaking orders"

It heavily relied on a Coordinate Bench precedent in Ajgarwa Sisahani Primary Agriculture Co-operative Credit Society (PACS) v. The State of Bihar Ors. (C.W.J.C. No. 14563 of 2023), which established that authorities are obligated to substantively consider explanations submitted in response to show-cause notices rather than acting mechanically

The Court observed that while the petitioner had filed detailed explanations to both show-cause notices, the SDO failed to engage with the merits of these replies before cancelling the license

The Court noted that the subsequent appellate and revisional orders were passed mechanically, merely affirming the SDO’s order without internalizing the petitioner's defense or providing independent reasons for dismissal

Following the precedent in Ajgarwa Sisahani, the Court determined that the failure to address the dealer's specific justifications regarding the ration cards rendered the decision-making process arbitrary and violative of procedural fairness

It quashed the Revisional order (05.09.2023), the Appellate order (13.03.2023), and the SDO’s cancellation order (16.11.2022); the matter was remanded to the SDO, Naugachia, with directions to pass a fresh, reasoned, and speaking order within three months after duly considering the petitioner’s explanations and affording him a personal hearing.

The Writ petition was allowed