Reasons In Show-Cause Notice Must Clearly Outline Grounds On Which Action Under Rules Is Proposed: Patna High Court Restores PDS License

The Patna High Court recently has quashed and set-aside the impugned orders cancelling the petitioner's PDS licence, citing violation of principles of natural justice

A bench comprising Justice Sanjeev Prakash Sharma observed,

“The reasons must be set forth in the show-cause notice clearly outlining the various grounds on which the action under the Rules is proposed. In the absence of the grounds, the concerned licensee would be deprived of meting out with the allegations as he would not be in a position to defend himself.”

The petitioner's counsel made several submissions challenging the cancellation of the petitioner's license under the Public Distribution System Control Order, 2016, in light of which the quashing of the cancellation order and restoration of the license was sought:

1. The show-cause notice only mentioned five discrepancies found during inspection, but the SDO took into consideration additional allegations made by the Block Supply Officer without providing a fair opportunity for the petitioner to respond.
2. The lack of a fair opportunity violates Rule 27(2) of the PDS Control Order, which is similar to the earlier provision under the 2001 Control Order.
3. The cancellation of the license based on undisclosed allegations is a violation of principles of natural justice.

While disposing of the application, the bench opined,

"The reasons must be set forth in the show-cause notice clearly outlining the various grounds on which the action under the Rules is proposed. In the absence of the grounds, the concerned licensee would be deprived of meting out with the allegations as he would not be in a position to defend himself. The action would, therefore, be in violation of principles of natural justice apart from being in violation of Rule 27(2) of the Rules (supra)."

Justice Sharma further held, “Keeping in view thereto, the orders impugned are not sustainable in law and are, accordingly, quashed and set aside. The licence cancelled by the SDO Sadar, Darbhanga, stands restored, however, it would not preclude the concerned SDO to conduct a fresh inspection and pass orders, if so required. The writ petition is disposed of with the above observations and directions.”

Case Title: Shyam Kumar Jha and Ors vs. The State Of Bihar and Ors Civil Writ Jurisdiction Case No.11389 of 2017

Citation: 2023 LiveLaw (Pat) 21

Click Here To Read/Download Order