Fair price shop authorization cannot be cancelled without notice and hearing under Clause 16.

The petitioners were societies operating fair price shops under allotment orders issued by the competent authorities.

Pursuant to an order dated 20.11.2025 passed by the Collector, District Shivpuri, departmental officials inspected the petitioners’ fair price shops and submitted inspection reports. Relying on those reports, the Sub-Divisional Officer, Revenue, Sub-Division Pohari, passed a common order dated 16.01.2026 withdrawing the fair price shops from the petitioners and temporarily attaching them to societies of adjoining villages.

The petitioners challenged the order on the ground that it was passed without notice or an effective opportunity of hearing, contrary to Clause 16 of the Madhya Pradesh Public Distribution System (Control) Order, 2015.

The State contended that the petitioners’ representatives were present during inspection and had therefore been afforded an opportunity of hearing.

1. Whether the respondents could withdraw or cancel the petitioners’ authorization to operate fair price shops without issuing notice and providing an opportunity of hearing under Clause 16 of the Madhya Pradesh Public Distribution System (Control) Order, 2015?

2. Whether the presence of the petitioners’ representatives during the inspection satisfied the requirement of a proper hearing before passing the order dated 16.01.2026?

3. Whether the order dated 16.01.2026, withdrawing the fair price shops and temporarily attaching them to other societies, was legally sustainable?

The Court applied Clause 16 of the Madhya Pradesh Public Distribution System (Control) Order, 2015, particularly sub-clause (4), which requires compliance with the principles of natural justice, including notice and a proper opportunity of hearing, before cancellation or withdrawal of authorization to operate a fair price shop.

The Court also relied on its earlier decision in Shri Janki Swa Sahayata Samooh Satanpura, Guna through its President Ram Dulari v. State of Madhya Pradesh & Others, decided on 21.08.2024 in W.P. No. 24360 of 2024, which required adherence to Clause 16 and the principles of natural justice before taking adverse action against a fair price shop operator.

The Court found that, despite notice issued in the writ proceedings, the respondents failed to produce any material establishing that the procedure mandated by Clause 16 of the Control Order, 2015 had been followed before passing the impugned order.

In particular, there was no evidence that any statutory notice had been issued to the petitioners or that they had been granted a proper opportunity to respond to the allegations.

The Court rejected the State’s position that mere presence of the societies’ representatives during inspection constituted the requisite hearing; an inspection could not substitute for the procedurally mandated notice and opportunity of hearing before cancellation or withdrawal of authorization.

The earlier decision in Shri Janki Swa Sahayata Samooh Satanpura was held to squarely cover the dispute.

The directions issued in paragraph 7 of the earlier Shri Janki Swa Sahayata Samooh Satanpura decision were directed to apply mutatis mutandis to the present cases.

The respondents were further directed to restore operation of the petitioners’ fair price shops until conclusion of the proceedings undertaken in accordance with law.

The petitions were disposed of without expressing any opinion on the merits of the allegations against the petitioners.