Fair-price-shop licence cancellation is invalid where mandatory enquiry and effective hearing are denied.

The petitioner-Society operated a Fair Price Shop for the distribution and supply of food grains.

By order dated 6 November 2024, the Sub-Divisional Officer (Revenue), Nawagarh, cancelled the petitioner’s licence on the basis of alleged irregularities.

The petitioner challenged the cancellation, contending that the allegations were vague and that the procedure prescribed under the Chhattisgarh Public Distribution System (Control) Order, 2016 was not followed, particularly the requirement of a proper hearing.

The State defended the order, asserting that a show-cause notice had been issued, that the petitioner had submitted a reply, and that the reply, Panchnama and other materials had been duly considered before cancellation of the licence.

Whether the cancellation of the petitioner’s Fair Price Shop licence was valid when the procedure prescribed under the Chhattisgarh Public Distribution System (Control) Order, 2016, including a proper and effective opportunity of hearing, had allegedly not been followed?

Whether the matter should be remanded for fresh proceedings after setting aside the impugned cancellation order?

The Court applied the Chhattisgarh Public Distribution System (Control) Order, 2016, which requires a detailed enquiry and mandates that the affected licence-holder be afforded a proper and effective opportunity of hearing before an adverse order, such as cancellation of a Fair Price Shop licence, is passed.

The Court also applied the principles of natural justice, particularly the requirement of a meaningful hearing and a reasoned decision before taking an adverse administrative action.

No judicial precedent was cited in the judgment.

Although the State maintained that a show-cause notice and reply were sufficient, the Court examined the record and found that the mandatory procedure under the Control Order, 2016 had not been followed in accordance with law.

In particular, the petitioner had not been afforded a proper and effective opportunity of hearing before cancellation of its licence.

Since the impugned order was passed without compliance with the prescribed enquiry and natural justice requirements, the Court held that it was arbitrary and legally unsustainable.

The Court therefore set aside the cancellation but preserved the authority’s power to undertake fresh proceedings in accordance with law.

Liberty was granted to the concerned SDO (Revenue), Nawagarh, to initiate fresh proceedings on the basis of the suspension order dated 16 October 2024.

The SDO was directed to provide the petitioner a due opportunity of hearing, consider its reply and supporting documents, and pass a reasoned order under the Control Order, 2016 within 30 days from receipt of a certified copy of the judgment.

The interim order dated 21 November 2024 was directed to remain in force until the fresh enquiry was finally decided.

The writ petition was accordingly disposed of.