Chhattisgarh HC Sets Aside ₹15.8 Lakh Recovery From Fair-Price Shop-Managing Sarpanch, Orders Fresh Enquiry Over Hearing Gaps

The petitioner, who managed Government Fair Price Shop Chirmi, challenged orders dated 27 March 2023 and 24 April 2023 directing recovery of ₹15,80,763.56 for an alleged food-grain shortage.

She contended that the shortage was determined without a proper enquiry and that the physical-verification report and Panchnama were not supplied to her.

The State relied on the availability of an appeal under Clause 18 of the Chhattisgarh Public Distribution System (Control) Order, 2016, and submitted that a show-cause notice had been issued and answered before the recovery order was made.

The writ petition had been admitted and recovery stayed after the Court recorded a prima facie concern about the opportunity of hearing and absence of a preliminary enquiry.

Clause 16 of the Chhattisgarh Public Distribution System (Control) Order, 2016 requires the competent authority to conduct an enquiry in accordance with its prescribed procedure before determining liability.

Principles of natural justice require a fair and meaningful opportunity before a decision with civil consequences, including disclosure of the material relied upon and a chance to controvert the allegations and present relevant evidence.

The Court relied on Aureliano Fernandes v. State of Goa, (2024) 1 SCC 632, on the constitutional importance of natural justice and its connection to Article 14.

The Court relied on State of Uttar Pradesh through Principal Secretary, Department of Panchayati Raj, Lucknow v. Ram Prakash Singh, 2025 SCC OnLine SC 891, on furnishing an enquiry report as an element of a reasonable opportunity to defend.

The Court relied on Sabitri Dey alias Swasthi Dey v. Union of India, 2026 SCC OnLine SC 1312, on the requirement of fair notice and an opportunity to be heard where civil consequences may follow.

The Court found that, despite the State’s reliance on the physical-verification report, Panchnama and show-cause notice, the record did not satisfactorily demonstrate that a comprehensive enquiry complying with Clause 16 had taken place or that the petitioner could effectively rebut the alleged shortage and the material relied upon.

Because the procedural deficiency went to the fairness of the decision-making process, the Court set aside the recovery orders and remitted the matter for fresh adjudication, without determining the actual shortage or the petitioner’s liability.

It remitted the matter to the Sub-Divisional Officer (Revenue), Baikunthpur, for a fresh enquiry under Clause 16, with an effective hearing, an opportunity to produce defence documents, consideration of relevant witness evidence and a reasoned order.

The authority was directed to endeavour to conclude the proceedings within 30 days of production of the certified order; the merits of the allegations were left open.