FIR-based fair-price licence suspension is invalid unless the order discloses arrest or fugitive status.

The petitioner, a fair-price shop licensee holding Licence No. 01/16, challenged the order dated 24 February 2018 passed by the Sub-Divisional Officer, Danapur, whereby his licence was cancelled.

He sought quashing of the cancellation order, restoration of his licence, and resumption of allotment and supplies to his shop.

During hearing, both parties submitted that the issue was covered by the Division Bench decision in Parvati Kumari v. The State of Bihar & Ors., C.W.J.C. No. 15267 of 2021, decided on 6 September 2022.

Whether the cancellation of the petitioner’s fair-price shop licence was legally sustainable when the order did not disclose the statutory grounds necessary for action under Clause 28 of the Control Order

Whether the petitioner was entitled to restoration of his licence and supplies following the quashing of the impugned order

The Court applied Clause 28 of the relevant Control Order governing suspension or cancellation-related action against a fair-price shop licence.

Relying on the Division Bench judgment in Parvati Kumari v. The State of Bihar & Ors., the Court held that registration of an FIR, by itself, does not justify exercise of power under Clause 28; the licensing authority must disclose whether the licensee was arrested or had gone fugitive, either of which constitutes the condition precedent for exercising the power.

An administrative order affecting a licence must therefore disclose the essential jurisdictional facts and statutory reasons supporting the action.

The Court found that the issue in the present case was identical to that decided in Parvati Kumari and accordingly applied the precedent.

Under Clause 28, the authority was required to record the legally necessary circumstance—namely, the petitioner’s arrest or his having gone fugitive—if the action was based on registration of a criminal case.

Since the impugned order dated 24 February 2018 was unsustainable on the same legal basis, the Court set it aside and directed restoration of supplies without delay.

The Court nevertheless preserved the authorities’ power to take fresh action in accordance with law if the petitioner was subsequently convicted in the criminal case.

The order dated 24 February 2018 cancelling the petitioner’s fair-price shop licence was quashed, and the petitioner’s supplies were directed to be restored forthwith.

The authorities were left free to take appropriate action in accordance with law if the petitioner was subsequently convicted in the criminal case.

Any pending interlocutory application was disposed of.