Fair price shop cancellation without opportunity to lead evidence and cross-examine witnesses violates Rule 16(3).

The petitioner’s self-help group operated a fair price shop at Village Piparsatti, District Janjgir-Champa, under the Chhattisgarh Public Distribution System (Control) Order, 2016.

Complaints were made alleging irregularities in distribution, including distribution of commodities in the names of deceased persons.

Following a show-cause notice, the petitioner submitted its reply; however, the Sub-Divisional Officer (Revenue) cancelled the petitioner’s fair price shop allocation by order dated 24 August 2021.

The Collector dismissed the petitioner’s appeal by order dated 25 July 2022.

The petitioner also challenged a subsequent newspaper advertisement issued for re-allotment of the shop.

The petitioner contended that no proper inquiry was conducted and that it was not given an opportunity to lead evidence or cross-examine witnesses before cancellation.

Whether the cancellation of the petitioner’s fair price shop allocation was lawful when, despite issuance of a show-cause notice and submission of a reply, the petitioner was not afforded an effective opportunity of hearing, including an opportunity to lead evidence and cross-examine witnesses, as required by Rule 16(3) of the Control Order, 2016?

Whether the Collector’s appellate order dated 25 July 2022 could be sustained in the absence of compliance with the mandatory procedural safeguards under Rule 16(3)?

The Court applied Rule 16(3) of the Chhattisgarh Public Distribution System (Control) Order, 2016, framed under Section 3 of the Essential Commodities Act, 1955 and the Chhattisgarh Food and Nutritional Security Act, 2012.

The Rule requires the Food Controller, District Food Officer, or Sub-Divisional Officer to issue a show-cause notice and provide the fair price shopkeeper an appropriate opportunity of hearing before cancelling the shop authority or forfeiting security; the matter must ordinarily be decided within one month of issuance of the notice.

The Court relied on Smt. Mamta Devi v. State of Chhattisgarh & Others, WP(C) No. 1903 of 2020, decided on 21 January 2021, which held that a fair price shopkeeper must be given an effective opportunity of hearing after issuance of a show-cause notice and that failure to do so violates Rule 16(3).

The Court held that merely issuing a show-cause notice and receiving the petitioner’s written reply did not satisfy the requirement of an “appropriate opportunity of being heard” under Rule 16(3).

The record showed that no proper inquiry or proceeding was conducted and that the petitioner was denied the opportunity to lead evidence and cross-examine witnesses before cancellation of the shop allocation.

This procedural failure rendered the cancellation contrary to Rule 16(3), and consequently undermined the Collector’s appellate order affirming that cancellation.

The petitioner was directed to approach the concerned SDO, who was required to reconsider the matter afresh on its merits under the Control Order, 2016, after providing the petitioner due opportunity of hearing and permitting it to lead evidence.

The SDO was directed to pass an appropriate order within 90 days from receipt of the Court’s order.

The writ petition was accordingly disposed of.