Janatha Trading Company AWD 3, Oottara, Kollengode, Palakkad - 678506 v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **FRIDAY ,THE 08TH DAY OF FEBRUARY 2019 / 19TH MAGHA, 1940** ## **WP(C).No. 40406 of 2017** ## **PETITIONER:** **JANATHA TRADING COMPANY AWD 3, OOTTARA, KOLLENGODE,PALAKKAD - 678 506,REPRESENTED BY ITS MANAGING PARTNER,M.ABDULLAKUTTY.** **BY ADVS.** **SMT.SUMATHY DANDAPANI (SR.) SRI.MILLU DANDAPANI** ## **RESPONDENTS:** - **1 STATE OF KERALA REPRESENTED BY FOOD SECRETARY OF KERALA,GOVERNMENT SECRETARIAT, SECRETARIAT P.O.,THIRUVANANTHAPURAM - 675 001.** - **2 DISTRICT COLLECTOR OFFICE OF THE DISTRICT COLLECTOR,CIVIL STATION, PALAKKAD - 678 001.** - **3 COMMISSIONER OF CIVIL SUPPLIES COMMISSIONERATE OF CIVIL SUPPLIES,PUBLIC OFFICE BUILDING, MUSEUM,VIKAS BHAVAN P.O.,THIRUVANANTHAPURAM - 695 033.** - **4 DISTRICT SUPPLY OFFICER CIVIL STATION BUILDING,COLLECTORATE P.O.,PALAKKAD - 678 001.** - **5 TALUK SUPPLY OFFICER TALUK SUPPLY OFFICE,MUNICIPAL COMPLEX,FATHIMA JUNCTION,CHITTUR, PALAKKAD - 678 101.** ## **BY ADV. GOVERNMENT PLEADER** ## **OTHER PRESENT:** ## **GP JAFAR KHAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25.01.2019, THE COURT ON 08.02.2019 DELIVERED THE FOLLOWING:** W.P.(C).No.40406/17 2 ## **JUDGMENT** - 1.This writ petition is filed with the following prayers:- - “i.Issue a writ of mandamus or any other appropriate writ, order or direction calling for the records leading to Ext.P10, P12 and P15 and quash the same by issuance of a writ of certiorari or any other appropriate writ, order or direction. - ii.Issue a writ of mandamus or any other appropriate writ, order or direction commanding the 4[th] respondent to disburse the Handling fee and stock value due to the petitioner from the 4[th] respondent.” - 2.Heard learned Senior Counsel appearing for the petitioner and the learned Government Pleader. 3.It is submitted that the petitioner was an Authorised Wholesale Dealer (AWD for short) of ration in Chittoor Taluk, Kollengode of Palakkad District, since 1980. It is submitted that on 30.12.2015, at the instance of the DYSP of Palakkad, respondents 4 and 5 along with other rationing inspectors made a surprise inspection at the AWD and Exhibit P1 inspection report was prepared. It is submitted that further inspections were held on 31.12.2015, 1.1.2016 and 4.1.2016 and found that the petitioner has misappropriated ration stock and the stock available in the AWD was not in tally with the W.P.(C).No.40406/17 3 stock register. The petitioner contends that the findings of respondents 4 and 5 are erroneous and the manner in which the inspection was carried out is in gross violation of Kerala Rationing Act and Rules and Inspection Manual. It is contended that the respondents did not take the actual physical weighment of the stock available in the AWD and has held the petitioner liable to pay Rs.8,57,018/- as fine for misappropriation of ration stock by Exhibits P10, P12 and Exhibit P15 orders. 4.The specific case of the learned Senior Counsel appearing for the petitioner is that Exhibit P10 order of cancellation is completely vitiated inasmuch as the stock verification was conducted without physically weighing the articles. It is contended that a perusal of Exhibit P1 Mahazar would itself show that apart from the stock of raw rice, which was subjected to a physical weighing and no variation was found, the stock of boiled rice, custom milled rice and wheat was calculated, counting the number of bags and fixing average weight per bag. It is contended that since Exhibit P10 order of cancellation of licence also entailed the fixation of penalty on W.P.(C).No.40406/17 4 the basis of the stock found in deficit/excess. Allegations are raised with regard to the actual date on which the godown had been sealed by the authorities. It is stated that though the ground of approximation of stock was clearly taken in Exhibit P11 appeal and Exhibit P13 revision petition preferred by the petitioner, the same have not been considered either in Exhibit P12 appellate order or Exhibit P14 revisional order. 5.Relying on Clause 7.01.02 of Chapter 7 of the Kerala Civil Supplies Manual, the learned Senior Counsel would contend that for an order in the nature of Exhibit P10 to be issued, a physical verification is absolutely essential. The learned counsel would also place reliance on a decision of this Court in **Sarojini v. District Collector, Thiruvananthapuram** [AIR 1999 Ker 119] to contend that cancellation and the fixation of liability on the basis of excess/deficit stock found in an approximate calculation without carrying out physical verification is absolutely vitiated. 6.Detailed counter affidavits have been placed on record by respondents. It is contended therein that an inspection had W.P.(C).No.40406/17 5 been held in the petitioner's go-down on 30.12.2015. The inspection team detected grave irregularities, including deficit/excess of stock in respect of several items. It is stated that the authorisation to run the wholesale depot was suspended temporarily on 31.12.2015. It is further stated in paragraph 4 of the counter affidavit filed by the 4[th] respondent as follows:- “4.To implement the District Collector's order No.C.S.5-7538/15 dated 31.12.2015 a team headed by Taluk Supply Officer, Chittur and Rationing Inspectors went to the go-down at 3 pm on 31.12.2015 and seen that the stock is entirely different from the stock of the godown as on 30.12.2015. It is clearly understand that there is some misappropriation taken place. Moreover, the wholesale dealer to which the suspended dept will have to attach expressed his dislike to assess the stock in the existing stacked position. Due to above said reason, the implementation process extended upto 4.01.2016. However, the wholesaler to get an additional responsibilities of the suspended AWDs agreed to take the stock. For the above said misappropriation and mal practices a crime was registered in Kollengode Police Station.(sic) 7. It is further submitted that there were several serious allegations as against the licencee, apart from the shortfall found in the inspection. It is, therefore, contended that the orders are W.P.(C).No.40406/17 6 completely in tune with the provisions of the Rationing Order and are justified. Relying on a decision of this Court in **Remadevi C v.Secretary to Government Food and Civil Supplies, Thiruvananthapuram and others** [2016 KHC 334] it is contended that the fact that the order of cancellation contained more charges than the show cause notice is not a reason to invalidate the order. It is further contended that the orders passed by Administrative Authorities cannot be interfered with under Article 226, unless there is a finding entered that the order is not based on any relevant material or is perverse. It is contended that physical verification had been carried out and the contention of the petitioner on the said aspect has been considered in the impugned orders. 8. I have considered the contentions advanced. It is clear from the documents produced that the specific case of the petitioner was that no physical verification had been conducted in respect of any of the articles except raw rice either on 30.12.2015 or on any day thereafter. It appears from Exhibit P6 produced by the petitioner that in respect of boiled rice, custom milled rice and wheat, the method adopted was the average weight ## W.P.(C).No.40406/17 7 approximation method. A Division Bench of this Court in **Sarojini's** case (supra) has clearly held that the order of recovery of value of missing quantity of rice from dealer can be made only if the procedure for physical weighment had been carried out as provided in Clause 7.01.2 of the Civil Supplies Manual. If the mahazar is prepared based on average weight, the order of cancellation may well be in order. However, if no physical measurement is conducted, the order to realise the value of the materials found in excess or deficient in the stock on the basis of such appropriation cannot be held to be a fair practice. 9. The Division Bench of this Court has clearly held that the authorities are duty bound to comply with the instructions laid down in the Civil Supplies Manual. When the Manual prescribes a particular method for assessment of the stock, the said method has to be scrupulously followed. On the ground that physical weighment had not been carried out, the impugned orders had been set aside and the matter was remanded to the District Collector for a fresh consideration by the Division Bench. W.P.(C).No.40406/17 8 10.In the instant case what is essentially under challenge before me at this point in time is only with regard to the fixation of the amounts as found due from the petitioner in the impugned orders. The question of legal validity of the order of cancellation of AWD would not arise for consideration now, since all AWD licences have been cancelled and the Civil Supplies Corporation has been entrusted as the sole wholesale dealer of rationed articles. What, therefore, remains for consideration is the legality of the order imposing financial liability on the petitioner by relying on the approximate weight of articles as estimated, counting the number of sacks and fixing an average weight for the same. The petitioner has taken a specific ground that no physical weighment had been made and the weight of the articles, except raw rice, was fixed only by approximation. If that be so, the fixation of the price and the action to recover the same from the petitioner on the basis of such approximation is unjustifiable in view of the decision of the Division Bench of this Court in **Sarojini's** case (supra). 9 ## W.P.(C).No.40406/17 - 11.In the above view of the matter, I am of the opinion that the issue requires a fresh consideration. The petitioner specifically raised the ground that no physical weighment has been made in respect of boiled rice, custom milled rice or wheat on 31.12.2015 or on any day thereafter. These aspects are stated in the appeal and the revision filed by the petitioner. Apart from negating the contentions, this aspect has not been considered either by the appellate or the revisional authority in the proper perspective. In the above view of the matter, I am of the opinion that the issue requires a reconsideration at the hands of the Director of Civil Supplies, which is a statutory appellate authority in terms of the Rationing Order. - 12.Exhibits P12 and P15 orders are, therefore, set aside. There will be a direction to the Commissioner of Civil Supplies to take up the appeal preferred by the petitioner and pass a speaking order on the same, taking note of the specific contention of the petitioner that no physical weighment of three of the rationed articles had taken place pursuant to the inspection conducted on 30.12.2015. Orders shall be passed within a period of two months from the date of receipt of a copy of this judgment. W.P.(C).No.40406/17 10 13.The request of the petitioner for disbursal of the handling fee and stock value amounting to Rs.18,79,986/- and Rs.18,75,187/respectively shall also be considered by the competent among the respondents without delay. All amounts found due shall be disbursed to the petitioner without delay, at any rate, within four months from the date of receipt of a copy of this judgment. The writ petition is ordered accordingly. Sd/- **Anu Sivaraman, Judge** sj 11 W.P.(C).No.40406/17 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1. TRUE COPY OF THE VISIT NOTE DATED 30.10.2017.** - **EXHIBIT P2. TRUE COPY OF THE RELEVANT PORTION OF THE MANUAL.** **EXHIBIT P3. TRUE COPY OF THE ORDER NO.C.S 5-7538/15 DATED 31.12.2015.** **EXHIBIT P4. TRUE COPY OF THE MAHAZAR DATED 31.12.2015.** **EXHIBIT P5. TRUE COPY OF THE MAHAZAR DATED 04.01.2016.** - **EXHIBIT P6. TRUE COPY OF THE RELEVANT EXTRACTS OF THE CALCULATION STATEMENT.** **EXHIBIT P7. TRUE COPY OF THE CHARGE SHEET BEARING NO.CS5-7538/2015 ISSUED BY THE 2ND RESPONDENT DATED 08.01.2016. EXHIBIT P8. TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER DATED 18.01.2016. EXHIBIT P9. TRUE COPY OF THE ARGUMENT NOTE DATED 12.02.2016.** - **EXHIBIT P10. TRUE COPY OF THE ORDER NO.CS5-7538/2015 DATED 05.03.2016.** - **EXHIBIT P11. TRUE COPY OF THE APPEAL DATED 30.03.2016.** **EXHIBIT P12. THE TRUE COPY OF THE ORDER NO.(CS) A87566/16 OF THE 3RD RESPONDENT 15.06.2016.** **EXHIBIT P13. THE TRUE COPY OF THIS REVISION PETITION DATED 20.09.2016.** W.P.(C).No.40406/17 12 **EXHIBIT P14. TRUE COPY OF THIS ORDER DATED 05.04.2017. EXHIBIT P15. TRUE COPY OF THE ORDER NO.CS A8-7566 DATED 26.08.2017 OF 3RD RESPONDENT.** True copy PS to Judge