PDS licence cancellation based solely on FIR registration is invalid without Rule 28 compliance and proper show-cause notice.

The petitioner held a licence to operate a Public Distribution System (PDS) shop in Muzaffarpur.

Following a joint inspection by the Block Supply Officers of Sakra and Gayghat on 2 November 2024, eleven alleged irregularities were reported and an FIR was registered against her under Section 7 of the Essential Commodities Act, 1955.

Her licence was suspended by memo dated 22 November 2024 under Rule 28 of the Bihar Targeted PDS (Control) Order, 2016, and she submitted her reply to the show-cause notice on 24 December 2024.

The Sub-Divisional Officer-cum-Licensing Officer subsequently cancelled her licence by Letter No. 98 dated 29 January 2026.

The petitioner contended that she had never been arrested or declared a fugitive, that she had obtained bail in the criminal case, that her reply had not been considered, and that the licence had remained suspended for more than 180 days.

The State raised a preliminary objection that the writ petition was not maintainable because the petitioner had an alternative appellate remedy under Rule 32 of the 2016 Order.

Whether the writ petition was maintainable under Article 226 of the Constitution despite the alternative appellate remedy under Rule 32 of the Bihar Targeted PDS (Control) Order, 2016?

Whether the suspension and subsequent cancellation of the petitioner’s PDS licence complied with Rule 28 of the Bihar Targeted PDS (Control) Order, 2016?

Whether the show-cause notice was legally valid when it did not specifically communicate the proposed action of cancellation of the licence?

The Court applied Rule 28 of the Bihar Targeted PDS (Control) Order, 2016, which permits immediate suspension where an FIR is lodged against a licensee and the licensee is sent to jail or becomes a fugitive, subject to service of a proper show-cause notice, sufficient opportunity of hearing, and lawful action within 180 days, as far as possible.

It also applied Rule 27(ii), requiring a valid notice containing the proposal for cancellation, as held by the Full Bench in C.W.J.C. No. 21202 of 2021.

On alternative remedies, the Court relied on Radha Krishan Industries v. State of H.P., as approved in T.N. Cements Corporation Ltd. v. Unicon Engineers, holding that the existence of an alternative remedy does not bar writ jurisdiction, particularly in cases involving breach of natural justice, lack of jurisdiction, or violation of fundamental rights.

The Court further relied on Gorkha Security Services v. State (NCT of Delhi) and UMC Technologies Pvt. Ltd. v. Food Corporation of India, which require a show-cause notice to specify both the grounds of action and the particular penalty or action proposed.

The Division Bench decision in C.W.J.C. No. 21179 of 2021 was relied upon for the proposition that mere pendency of a criminal case cannot by itself justify cancellation of a PDS licence and that the 180-day period prevents prolonged “animated suspension”.

The Court held that the writ petition was maintainable because the petitioner alleged violations of statutory procedure and principles of natural justice, which justified exercise of jurisdiction under Article 226 despite the alternative remedy.

On the merits, the Court found that the petitioner had neither been sent to jail nor declared a fugitive and had, in fact, obtained bail; therefore, mere registration of the FIR did not authorise cancellation of her licence under Rule 28.

The Court also found that the licence had remained suspended from 22 November 2024 until cancellation on 29 January 2026, substantially beyond the 180-day period contemplated by Rule 28.

Further, the show-cause notice did not contain a clear proposal for cancellation, making it defective under Rule 27(ii) and contrary to the requirements of natural justice laid down in Gorkha Security Services and UMC Technologies.

Accordingly, both the suspension and cancellation were held to be arbitrary and legally unsustainable.

The respondent authorities were directed to restore the petitioner’s licence immediately and supply the commodities necessary for lawful distribution.

The writ petition was accordingly allowed, while leaving it open to the Sub-Divisional Officer to take any appropriate action in accordance with law.