PDS licence cancellation requires an explicit proposal and meaningful consideration of the licensee’s response.

The petitioner held P.D.S. Licence No. 123 of 2016.

The Sub-Divisional Officer, Gopalganj, passed an order dated 17 June 2017, communicated through Memo No. 1806 dated 19 June 2017, cancelling the petitioner’s licence in Supply Case No. 19 of 2017.

The petitioner’s statutory appeal was dismissed by the Collector, Gopalganj, on 15 September 2017 in Supply Appeal Case No. 11 of 2017.

The petitioner challenged both orders before the Patna High Court and sought restoration of his licence.

During hearing, both parties agreed that the matter was covered by the Division Bench decision in Ram Bachan Ram v. State of Bihar, L.P.A. No. 499 of 2018, decided on 10 July 2018.

Whether the cancellation of the petitioner’s P.D.S. licence was legally sustainable when the show-cause notice did not specifically disclose a proposal to cancel the licence under Order 27(ii) of the Control Order, 2016.

Whether the cancellation order violated the principles of natural justice because the petitioner’s explanation and defence were not properly considered.

Whether the High Court could exercise writ jurisdiction despite the availability of a statutory appellate remedy where there was alleged statutory non-compliance and violation of natural justice.

Order 27(ii) of the Control Order, 2016 requires that no order cancelling a licence be made until the licensee has been given sufficient opportunity to state his case against the proposal for cancellation; consequently, a show-cause notice must clearly inform the licensee that cancellation of the licence is proposed.

The principles of natural justice require meaningful consideration of the affected party’s explanation and defence before an adverse order is passed.

Relying on Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1, and the Division Bench decision in Ram Bachan Ram v. State of Bihar, the Court held that the existence of an alternative statutory remedy does not bar writ jurisdiction where the impugned action suffers from jurisdictional error, statutory violation, or breach of natural justice.

The Court found the present case to be squarely governed by Ram Bachan Ram.

Applying Order 27(ii), it held that the petitioner ought to have been expressly informed that cancellation of his licence was proposed and given an opportunity to respond to that specific proposed action.

In addition, the petitioner had submitted a detailed explanation, but the licensing authority cancelled the licence in a cryptic manner without addressing his defence, demonstrating non-application of mind and denial of procedural fairness.

These defects constituted statutory violation and breach of natural justice, thereby attracting the exception recognised in Whirlpool to the rule requiring exhaustion of alternative remedies.

The matter was remitted to the Sub-Divisional Officer, Gopalganj, as the licensing authority, for fresh proceedings in accordance with law.

The entire exercise was directed to be completed within three months from receipt or production of a copy of the order.

Interlocutory applications, if any, were disposed of.