Quasi-judicial authorities must provide adequate reasons for rejecting replies or explanations and conduct proper enquiries and stock verifications before taking drastic actions.

JUDGMENT :

1. Heard Sri K.N. Rai learned counsel holding brief of Sri Sanjay Singh learned counsel for the petitioner and the learned Standing Counsel for the State respondents.

2. Present writ petition has been filed by the fair price shop agent to assail the order dated 26.6.2012 passed by the licensing authority cancelling his fair price shop agreement at village Tola Rishal Rai, Police Station Bairia, Post Chand Diara, Block Murli Chhapra, Tehsil Bairia, District Ballia as affirmed by the order of the appeal authority dated 17.3.2016 in Appeal No. 417 (Harendra Vs. SDM, Ballia).

3. Short submission advanced by learned counsel for the petitioner is, the proceedings for suspension and cancellation of the fair price shop agreement were undertaken on a third party seizure. In that, a vehicle bearing registration No. UP60-B-2283 was seized by the State authorities on 30.5.2011 at about 10.00 p.m. Twenty quintals of wheat and three quintals of sugar were found loaded. It further transpires that on query made the purchaser Chhatti Lal son of Rajeshwar Saah informed the State authorities that the aforesaid goods had been purchased by him from the present petitioner and that the goods were essential commodities meant for public distribution system.

4. Acting solely on the aforesaid information, the petitioner's fair price shop agreement was first suspended by order dated 06.6.2011 and later a show cause notice was issued to the petitioner on 27.10.2011. The petitioner claims to have submitted a written reply thereto on 08.11.2011. He also claimed to have refuted the charges in the course of oral enquiry proceedings.

5. No other evidence in the shape of stock verification of the petitioner's existing stock was carried out at the relevant time and no statement of any of the beneficiaries/card holders were recorded to ascertain if the petitioner had ever made short supplies to them as may have given rise to availability of any stock having been sold by the petitioner in black market.

6. Acting solely on the fact disclosed by the said Chhatti Lal, the petitioner's fair price shop agency was cancelled by the impugned order dated 26.6.2012. That has been affirmed in appeal.

7. Having heard learned counsel for parties and having perused the record, in the first place there does not appear to exist any independent exercise conducted by the State authorities to establish the correctness or otherwise of the fact allegations made by Chhatti Lal. Unless the exercise of stock verification had been carried out by the respondent authorities at the relevant time and/or unless full and proper enquiry had been conducted involving the beneficiaries to whom the petitioner was meant to have supplied goods with respect to which proceedings have been initiated and further unless as a result of such enquiries or other evidence it had been established that the petitioner had misappropriated stocks of essential commodities entrusted to him to be supplied to the beneficiaries, the conclusions drawn both by the licensing authorities and the appeal authority are based on no material or evidence. They are only conjectures or possibilities that may have existed.

8. Cancellation of fair price shop agency has serious consequences both for the agent as also the beneficiaries. Unless cogent material exists warranting such strong action, the approach taken by the respondent authorities cannot be appreciated. To offer a knee-jerk reaction on a mere suspicion and consequently to cancel the agreement is not desirable.

9. In the present facts, other than a mere suspicion arising from the statement of Chhatti Lal, no credible material existed which may warrant such harsh step of cancellation of fair price shop agreement.

10. Further it cannot be appreciated how the licensing authority has recorded self conflicted observations with respect to the reply submitted by the petitioner. First, he referred to the statement of the petitioner denying correctness of the statement of