Licenses for fair price shops cannot be cancelled solely based on the lodging of an FIR against the licensee; due process and inquiry must be followed.

JUDGMENT :

1. Following questions of law are referred by learned single Judge, by order dated 8.2.2017, for consideration before the Larger Bench and, hence, same are placed before this Court:-

"1. Whether the fair price shop licence can be cancelled merely on lodging of a criminal case against the licencee?; and

2. Whether, while passing any such order the Government Order dated 17.8.2002, particularly para-10 of said Government Order would be applicable/considered or not?"

2. Learned Single Judge in the Reference Order found, that by judgment passed in Writ-C No.1766 of 2011 ( Smt. Raj Kumari Singh. Vs. State of U.P. and others .) the High Court held that merely upon lodging of First Information Report, licence of fair price shop cannot be cancelled, while in civil Misc. Writ Petition No.38723 of 2008 (Ranjit Singh. Vs. State of U.P. and others.) the Division Bench has found that even after allotment of shop, the same can be suspended/cancelled on filing of a First Information Report against the licencee.

3. The facts of the present case are that petitioner was granted and holding a licence for running of fair price shop in his village since long. On 3.5.2011, some villagers made a complaint against the petitioner with regard to irregularities, in distribution of the essential commodities, in his shop. On the basis of the said complaint, an ex parte inquiry was conducted, by the Senior Supply Inspector, Sadar, Gonda, on 14.6.2011 and licence of the petitioner was suspended. On 29.7.2011, the said licence of petitioner was cancelled on the ground that the petitioner was involved in a case crime No.267/2011 under Section 147 / 148/ 149/ 504/ 324/ 307 IPC read with Section 3 (ii) (v) of SC/ST Act. The sole ground for cancellation of licence of the petitioner is that the act for which the FIR is lodged, is a criminal act and hence, it is not appropriate to maintain the licence of a fair price shop in favour of a criminal. Against said order, petitioner had filed an appeal and the same was also rejected. Hence he filed the present writ petition.

4. While hearing the matter, since the Court found a difference of opinion between the two judgments of this Court hence, this Reference is made.

5. There are two Government orders which are relevant for the purpose of present Reference.

6. First Government order is dated 17.8.2002, regarding allotment of fair price shop under the Public Distribution System. The same provides the manner in which the licences are to be granted and shops are to be provided. Clause 10 of the said Government order relevant for our purposes, provides mandatory conditions required to be taken into consideration while granting licences. Sub- clause (d) of Clause 10 of the said Government order provides that there should not be any criminal case registered against the applicant and he should not have been punished in any criminal cases. Clause 12 of the said Government order empowers the District Supply Officer to inspect the shops in the rural area and on finding any irregularity, to take action against the shop owners. Clause 13 of the said Government order provides that on finding irregularities, distribution would be attached to the fair price shop of the nearest Gaon Sabha. Relevant extracts of the said Clause 10 (d) of the Government order dated 17.8.2002, are as follows:-

7. Second Government order is dated 29.7.2014. The same provides procedure with regard to suspension/ cancellation of a fair price shop.