Om Prakash Garg, J. - (1.) THERE has been a spate of litigation with regard to the grant, suspension and cancellation and non -renewal of the licence/permit to run the fair price shop meant for distribution of essential commodities as well as release of the assigned quota for the purpose. No sooner the agreement to sell essential commodities is suspended or cancelled or the supplies are stopped and the appeal against the offending order is dismissed, the dealer rushes to this Court. In some cases, the rival claimants who have not been successful in getting the agency or dealership in their favour, make complaints against the existing dealers and when they fail to achieve the desired goal at the hands of the executive authorities, they, in their litigative zeal, come before this Court. The matter has dwelt upon the waded through in number of decisions of this Court including that of the Division Benches, Full Benches and larger Bench. With a view to clear the mist and in an attempt to settle the law on the point, it is considered appropriate to survey the background which has prompted the State Government to pass the Control Orders with a view to regulate the supply and distribution of the essential or scheduled commodities and which generated litigation. In its historical retrospect, it may be stated that an urgent need was felt to ensure the availability of essential goods to the community at the proper price and to curb the malaise of monopoly, hoarding and black marketing by the traders and their allies. The Essential Commodities Act, 1955 (Act No. X of 1955) (hereinafter referred to as 'the Act') came to be enacted by the Parliament with a view to provide, in the interest of general public, for the control of the production, supply and distribution of, and trade and commerce, in certain commodities. Under Section 3 of the Act, the Central Government has been conferred powers to issue orders to control production, supply, and for securing their equitable distribution and availability at fair price etc., of the essential commodities. Section 4 of the Act provides for imposition of duties on State Government etc., by making the provision that an order under Section 3 may confer powers and impose duties upon the Central or State Government or officers or authorities of the Central or State Government, and may contain directions to any State Government or to officers and authorities thereof as to exercise of any such powers or to discharge any such duties. The State Government issues the various distribution and control orders under Section 4 of the Act. The expression 'essential commodity' has been defined in clause (a) of Section 2 which expression takes within its sweep cattle folder, coal, cotton and woolen textiles, drugs, food stuffs including edible oil seeds and oils, petroleum and petroleum products, paper, iron and steel, raw cotton, raw jute and any other class of commodity which the Central Government may by notified order declare to be an essential commodity for the purpose of the Act. In Section 5 of the Act, it has been provided that the power of the Central Government in respect of making of the Control Orders may be delegated by a notified order in favour of the State Government. In exercise of the power under Section 3 read with Section 5 of the Act, the State Government had issued an umpteen number of Distribution Control Orders, inter alia. The U.P. Foodgrains Dealers (Licensing and Restriction on Hoardings) Order, 1975. The U.P. Oilseeds and Oilseeds Products Control Order, 1966; The U.P. Pulses (Licensing and Storage) Control Order, 1979 and the U.P. Sugar and Gur Dealers 'Licensing Order, 1962. Pursuant to the aforesaid Orders, Licenses/permits were granted to the individuals carrying on business activities with regard to the different types of scheduled commodities. The system of trial and error went on for about a quarter of the century. The distribution and control mechanism under the aforesaid Control Orders did not work to the satisfaction of the consumers and certain malpractices came to be adopted. Therefore, to be more specific in the matter of distribution and punishment, two new Control Orders, namely. The U.P. Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Orders, 1989 and The U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989 came into being. Earlier Control Orders were superseded. The U.P. Scheduled Commodities (Regulation of Distribution) Order, 1989 was found to be unworkable and, therefore, it was rescinded and substituted by another Control Order, namely, U.P, Scheduled Commodities Distribution Order, 1990. With a view to propel the scheme of distribution and control of the essential commodities/scheduled commodities, the State Government had issued an order on 3rd July, 1990. Paragraph 2 of the Control Order, 1990 defines the meaning of certain expressions. 'Agent' means a person authorised to run a fair price shop; 'Fair price shop' has been defined to mean a shop set up under the order of the State Government for distribution of scheduled commodities. The expression 'scheduled commodity' for the purposes of the Control Order of 1990 means a commodity specified in the Schedule appended to the Order, products thereof and include such other commodities which the State Government may direct to be sold through a fair price shop. The Control Order, 1990 came into being on 3.7.1990. Looking to the urgency of the matter and concern of the State Government to ensure fair and even distribution of the essential or scheduled commodities, simultaneously with the commencement of the Order, 1990 a Government order dated 3.7.1990 was issued. Since the entire controversy in the present petitions centers round the Government order dated 3.7.1990, it is being reproduced, as below, for the sake of clarify and ready reference: The provisions of the aforesaid Government Order for the sake of clarity may be summarised as follows: (1) S.D.M. executes an agreement in favour of the person selected to run a fair price shop and for execution of this agreement the S.D.M. will Act within clause 2(d) of the Distribution Control Order, 1990. (2) The District Magistrate on receipt of complaints from Gram Sabha can suspend or cancel this agreement. (3) An appeal shall lie before the Divisional Commissioner against orders passed by the District Magistrate for appointment, suspension, cancellation or renewal of agreements to run a fair price shop. (4) Last but not the least, is the provision that the agreement to run fair price shop will be in pursuance of powers under para 4 of the Distribution Control Order, 1990. The fair price shops which were charged with the duty and responsibility to distribute the scheduled commodities continued to function in a limping manner till a new scheme was enforced. The earlier scheme of distribution of the essential commodities as prevalent under the Government order dated 3.7.1990 was said a good bye by the subsequent order dated 10.8.1999 with regard to the establishment of fair price shops in rural areas in the background of decentralization of powers in view of the Seventy Third Constitution Amendment by which Part IX In re "The Panchayats" and "the Eleventh Schedule" were added in the Constitution. Part IX consists of Articles 243 to 243ZG. Article 243G is relevant for the controversy in hand and is quoted below; 243G. Subject to the provisions of this Constitution the legislature of a State may, by law, endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self -Government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to - - (a) the preparation of plans for economic development and social justice. (b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule. Matters listed in the Eleventh Scheduled include 'public distribution system' at item No. 28. With a view to accentuate and achieve the object of decentralization of power as visualized in Article 243G of the Constitution of India, the U.P. Panchayat Raj Act, 1947 was suitably amended with respect to the preparation of plans for economic development and social justice etc. and the implementation of the schemes for economic development in relation to matters listed in Eleventh Schedule. Section 15 of the U.P. Panchayat Raj Act as it stands substituted by U.P. Act No. 9 of 1994 in the light of the constitutional mandate envisaged under Part IX of the Constitution of India enlists the functions that are to be performed by a Gram Panchayat. The section, insofar as it is relevant reads as under: 15. Functions of Gram Panchayat - -Subject to such conditions as may be specified by the State Government from time to time a Gram Panchayat shall perform the following functions, namely; (xxix) Public Distribution System: (a) Promotion of public awareness with regard to the distribution of essential commodities. (b) Monitoring the public distribution system.
(2.) IT is, thus, clear that so for as the matter relevant to the public distribution system is concerned, the State Legislature has amended the U.P. Panchayat Raj Act by substituting Section 15 in the light of the constitutional mandate contemplated by Article 243G. The Government order dated 10.8.1999 and the other orders which have been referred to therein had been issued in exercise of power under Section 15 of the U.P. Panchayat Raj Act specifying therein conditions of allotment of fair price shops and their cancellation under the public distribution scheme. The Hindi version of the Government Order dated 10.8.1999 runs as follows: The Government Order dated 10.8.1999 inter alia, provided, as under: (i) That the fair price shops established earlier shall continue to operate but the dealers/licence holders were required to execute the fresh agreements; (ii) That the concerned Gram Sabha will have power to appoint new dealers or licence holders to run fair price shops, and to suspend or cancel the agreements, and (iii) That the orders passed by the concerned Gaon Sabha to cancel or suspend agreements shall be final and no appeal shall lie against the said order, though it would be subject to the approval of the Sub -Divisional Officer concerned. It was urged that selection and cancellation of fair price shops were, therefore, no longer a contractual matter but came to be governed by the statutory provisions of Section 15 of the U.P. Panchayat Raj Act as has been held by a Division Bench of this Court in the case of Pappu v. State of U.P, and others : 2000 (91) RD 62. The Gram Panchayats came to be vested with the power of selecting persons to run the fair price shops. On account of party factions, local politics, inexperience and other extraneous considerations, the public distribution system under the Government Order dated 10.8.1999 came to be criticized and challenged before this Court and a thousand of writ petitions poured in. A Division Bench of this Court in Chokka Singh v. Sub -Divisional Magistrate Thakurdioara, Moradabad and others, (Civil Misc. Writ No. 51595 of 1999) by order dated 10.12.1999 referred the matter for decision to a larger Bench on the ten specific formulated questions as Pappu's case (supra) was found to be in direct conflict with Full Bench decisions of this Court in Shiv Mohan Lal v. State of U.P. and others, : 1993 (21) ALR 121 (FB); U.P. State Galla Vikreta Parishad v. State of U.P. and others,, 1992 (2) EFR 655, Gopal Das Sahu v. State of U.P. and others,, 1991 (17) ALR 406. A Bench of five Hon'ble Judges of this Court, was constituted to answer the questions framed in Chokka Singh's case (supra). Before the larger Bench could answer the reference, the State Government passed an order on 13.1.2000 whereby the Government order dated 10.8.1999 had been withdrawn and the original Government order dated 3.7.1990 was restored. The order dated 13.1.2000 reads as below:
(3.) IN view of the fact that the Government order dated 10.8.1999 impugned before this Court had been withdrawn the larger Bench of this Court comprising Hon'ble Mr.S.K. Sen, Chief Justice, Hon'ble Mr. D.S. Sinha, J., Hon'ble Palok Basu, J., Hon'ble Mr. G.P. Mathur, J. and Hon'ble S.R. Singh, J. declined to answer the question referred to it by observing: Since the said order dated 10.8.1999 has become redundant even according to the contention of the learned Advocate for the petitioner, it appears to us that no useful purpose shall be served by answering the questions referred to larger Bench as the reference was based upon the contents of the said Government Order dated 10.8.1999. Accordingly, we decline to answer the questions.;