Strict Compliance with Reasonable Opportunity Rule Mandatory for Cancellation of Public Distribution System Licenses

The petitioner, a PDS dealer since 2007, challenged the cancellation of his license (No. 44/2007) by the Sub-Divisional Officer (SDO), Belsand

Following an inspection on 17.10.2022, a show-cause notice was issued on 21.10.2022 alleging irregularities such as non-display of price lists, stock mismatches in e-POS machines, and non-maintenance of registers

The petitioner was given only two days to reply to the first notice and twenty-four hours for a subsequent notice dated 26.10.2022

Despite the petitioner’s explanations regarding cleaning for Diwali and manual distribution during server downtime, the Licensing Authority cancelled the license via Memo No. 1518 on 04.11.2022

1. Whether providing only twenty-four to forty-eight hours to respond to a show-cause notice constitutes "reasonable opportunity" under the statutory rules

2. Whether the cancellation order was passed in violation of the principles of natural justice and the Bihar Targeted Public Distribution System (Control) Order, 2016

Rule 27(ii) of the Bihar Targeted Public Distribution System (Control) Order, 2016, which mandates a reasonable opportunity for a licensee to state their case before cancellation

The Division Bench precedent in Md. Muzaffar Alam @ Muzaffar v. The State of Bihar (CWJC No. 10315 of 2020), which established that extremely short notice periods (e.g., three days) are insufficient and violate natural justice

2013 (2) PLJR 706 regarding the necessity of supplying inspection reports to the noticee

The court found that the Licensing Authority acted in "utter haste" by requiring explanations within twenty-four to forty-eight hours

Following the ratio in Md. Muzaffar Alam, the court reasoned that such truncated timelines do not satisfy the legal requirement of "sufficient opportunity" as contemplated under Sub-clause (ii) of Clause 27 of the Control Order, 2016

The court noted that the respondents did not dispute the applicability of the cited precedent

Consequently, the failure to provide adequate time to reply rendered the decision-making process arbitrary and procedurally flawed, regardless of the merits of the alleged stock discrepancies

The Licensing Authority was granted liberty to pass a fresh order after considering the petitioner’s representation within three months; failing this, the license shall be deemed restored. In the interregnum, the license remains under suspension. All pending interlocutory applications were disposed of