Allahabad High Court
Jhakari Gupta vs State Of U.P. And 5 Others on 9 April, 2018
Equivalent citations: AIRONLINE 2018 ALL 4241
Author: Ajay Bhanot
Bench: Ajay Bhanot
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. - 27 Case :- WRIT - C No. - 12772 of 2018 Petitioner :- Jhakari Gupta Respondent :- State Of U.P. And 5 Others Counsel for Petitioner :- Nagendra Nath Mishra Counsel for Respondent :- C.S.C.,Dharam Deo Chauhan Hon'ble Ajay Bhanot,J.
1. Learned counsel for the petitioner is permitted to amend the prayer clause and correct the date of the impugned order by scoring of the date 2.2.2018 and inserting the correct date which is 27.1.2018.
2. Heard Shri Nagendra Nath Mishra, learned counsel for the petitioner and Shri Dalvir Singh, learned Standing Counsel for the State-respondents.
3. The petitioner, is a fair price shop dealer of village panchayat Birdpur N-11, District Siddharth Nagar.
4. The petitioner has assailed the order dated 27.1.2018 appointing respondent No. 6 as the fair price shop dealer of the aforesaid village panchayat. The respondent No. 6 is the third fair price shop dealer of the aforesaid village panchayat.
5. Shri Nagendra Nath Mishra, learned counsel for the petitioner contends that the appointment of respondent No. 6 as the third fair price shop dealer is in the teeth of the Government Order dated 17.8.2002. There are less than 8000 units village panchayat. The requirement of more than 8000 unis is not satisfied. The appointment of the third fair price shop dealer is not lawful.
6. Shri Moti Lal, learned Standing Counsel, refutes the aforesaid submissions. He contests the locus standi of the petitioner. Learned Standing Counsel further submits that there is credible material in the record to demonstrate that more than 8000 units were in existence at all relevant points in time. He relies upon a Division Bench judgment of this Court passed in case of Suman Yadav versus State of U.P. 2017 (5) ADJ 344 (DB).
7. I have heard the learned counsel for the petitioner and learned Standing Counsel and perused the record.
8. The locus standi of petitioner to challenge the appointment of respondent No. 6 as the fair price dealer of village panchayat Birdpur N11 shall be considered first.
9. From the facts in the record and submissions of the counsels, it is clear that petitioner wants to forestall the appointment of a rival fair price shop dealer. The desire of the petitioner is to protect his profit margin by preventing the appointment of the third fair price shop dealer. On the contrary the village panchayat in its wisdom found that there was a requirement of a third fair price shop dealer to ensure smooth distribution of essential commodities amongst the card holders and beneficiaries of the scheme. The rights of such individuals were duly considered by this court in the case of Suman Yadav (supra). It was held, in line with the settled position of law, that a rival cannot challenge the appointment of another dealer to ward off competition. It would be apposite to reproduce the relevant extracts of the said judgment, which will guide the decision in this case.
"2. The grant of a license to run a fair price shop is admittedly governed by the provisions of the U.P. Scheduled Commodities Distribution Order 2004 (2004 Order). No provision of the 2004 Order grants an exclusive right of operation to a dealer. Neither the 2004 Order nor any provision of the license issued to a dealer guarantees or ensures a particular level of revenue or profit. Despite repeated queries, counsel for the fifth respondent was unable to bring to our notice or refer to any provision of either the license or the 2004 Order which granted him an exclusive right to operate a fair price shop in the area concerned to the exclusion of all others. Learned counsel for the respondent, we may note, candidly admitted that the license did not guarantee either an exclusive area of operation or level of revenue. The issue primarily which therefore, arises for consideration is whether an existing licensee has a legal right to object to the establishment of an additional fair price shop.
3. The answer to this question in our view, has to be in the negative based on the age old principle of damnum sine injuria. A person engaged in a particular trade or business fundamentally does not have a right to oppose the establishment of a competing business unless it fall foul of some statutory prohibition. This essentially because what the law protects is a legal wrong. Article 19(1)(g) of the Constitution does not confer a right on a person to carry on a trade or business without competition. The coming into existence of a competitor in business may result in the trade or business of the existing person being adversely affected. This however, does not result in creation of a locus standi in favour of the existing trader to challenge such establishment in view of the fact that no legal right vested in him stands infringed. This issue was dealt with by the Supreme Court as far back as in Nagar Rice and Flour Mills Vs. N. Teekappa Gowda & Bros 1970(1) SCC 575. A challenge of a similar nature as raised before the Supreme Court was answered thus:
"Section 8 (3) (c) is merely regulatory, if it is not complied with the appellants may probably be exposed to a penalty, but a competitor in the business cannot seek to prevent the appellants from exercising their right to carry on business, because of the default, nor can the rice mill of the appellants be regard as a new rice mill. Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Art. 19 (6), but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely. The appellants complied with the statutory requirements for carrying on rice milling operations in the building on the new site. Even assuming that no previous permission was obtained, the respondents would have no locus standi for challenging the grant of the permission, because no right vested in the respondents was infringed." (emphasis supplied)
4. In Hans Raj Kehar v. State of U.P., MANU/SC/0386/1974 : (1975) 1 SCC 40, the right of existing bus operators to seek exclusion of additional permit holders was negatived with the following observations:
"The contention that the impugned notification is violative of the rights of the appellants under article 19(1)(f) or (g) of the Constitution is equally devoid of force. There is nothing in the notification which prevents the appellants from acquiring, holding and disposing of their property or prevents them from practising any profession or from carrying on any occupation. trade or business. The fact that some others have also been enabled to obtain permits for running buses cannot constitute a violation of the appellants, rights under the above two clauses of article 19 of the Constitution. The above provisions are not intended to grant a kind of monopoly to a few bus operators to the exclusion of other eligible persons. No right is guaranteed to any private party by article 19 of the Constitution of carrying on trade and business without competition from other eligible persons. Clause (g) of article 19(1) gives a right to all citizens subject to article 19(6) to practise any profession or to carry on any occupation, trade or business. It is an enabling provision and does not confer a right on those already practising a profession or carrying on any occupation, trade or business to exclude and debar fresh eligible entrants from practising that profession or from carrying on that occupation, trade or business. The said provision is not intended to make any profession, business or trade the exclusive preserve of a few persons. We, therefore, find no valid basis for holding that the impugned provisions are violative of article 19."
(emphasis supplied) The same view was reiterated by the Supreme Court in Jasbhai Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed, MANU/SC/0011/1975 : (1976) 1 SCC 671, where it held as under:
"Thus, in substance, the appellant's stand is that the setting up of a rival cinema house in the town will adversely affect his monopolistic commercial interest, causing pecuniary harm and loss of business from competition. Such harm or loss is not wrongful in the eye of law, because it does not result in injury, to a legal right or a legally protected interest, the business competition causing it being a lawful activity. Juridically, harm of this description is called demnum sine injuria, the term injuria being here used in its true sense of an act contrary to law. The reason why the law suffers a person knowingly to inflict harm of this description on another, without holding him accountable for it, is that such harm done to an individual is a gain to society at large.
In the light of the above discussion, it is demonstrably clear that the appellant has not been denied or deprived of a legal right. He has not sustained injury to any legally protected interest. In fact, the impugned order does not operate as a decision against him, much less does it wrongfully affect his title to something. He has not been subjected to a legal wrong. He has suffered no legal grievance. He 'has no legal peg for' a justiciable claim to hang on. Therefore he is not a 'person aggrieved' and has no locus standi to challenge the grant of the No-objection Certificate."
(emphasis supplied)
5. The above judgments were duly noted and the principles elucidated therein reaffirmed in Mithilesh Garg v. Union of India, .
6. It is in light of the aforementioned legal principles enunciated by the Supreme Court that the judgment of the learned Single Judge then needs to be tested. As is evident from the judgment impugned, the order dated 17/26 May 2016 has been set aside only on the short ground of a breach of the principles of natural justice. The said conclusion arrived at by the learned Single Judge, in our view, proceeds on an assumption that a legal right conferred upon the original petitioner had been infringed. A right of hearing would stand attracted to a case only where a legal right of a person is infringed or a legal wrong is inflicted. However, as noted above, we have already found that no legal right of the original petitioner stood infringed. In view of the above, the question of an opportunity of hearing being afforded to the original petitioner before formulation of a resolution clearly did not arise. We are therefore, unable to sustain the judgment of the learned Single Judge on this ground."
10. The attempt of the petitioner to protect his monopoly and preclude competition, cannot be countenanced by this Court. In view of the aforesaid admitted position of facts and settled position of law the petitioner does not have the locus standi to question the appointment of the third fair price shop dealer by the impugned order. The writ petition is liable to be dismissed on this ground alone.
11. It would now be appropriate to turn my attention to other submissions made at the bar.
12. Some other facts stand established and are beyond the pale of dispute. A resolution was passed on 02.05.2017 by the Gaon Sabha proposing the appointment of a third fair price shop dealer. The said resolution contains a recital that there are 8400 units in existence in the village panchayat. The requirement for appointment of the third fair price shop dealer as laid down in the Government Order is satisfied.
13. On 17.10.2017, some complaints were made against the proposed appointment of the third fair price shop dealer. The complaints were investigated. The enquiry report submitted on 13.12.2017 by the Block Development Officer, Birdpur records that currently there are 8056 units in village panchayat Birdpur N-11. It further opined that there was no illegality in the proposal of the village panchayat to appoint the third fair price shop dealer.
14. The records of figures in official documents are findings of facts returned by respondent authorities. The number of units as recorded in resolution of the village panchayat Birdpur N11 dated 2.5.2017 and in the report of the Block Development Officer, Birdpur dated 13.12.2017 appear credible and attract a presumption of correctness. The burden to rebut the same was on the petitioner. Nothing has been shown in the record by the petitioner to dispel the credibility of the process in arriving at the figures or to dispute the correctness of the figures. The petitioner has failed to discharge the burden.
15. The number of units, i.e. 8400 and 8056, as recorded in the resolution of the village panchayat Birdpur N11 District Siddharth Nagar dated 2.5.2017 and the report of the Block Development Officer, Birdpur, District Siddharth Nagar dated 13.12.2017, respectively, are correct. The appointment of the respondent No. 6, as the third fair price shop dealer of village panchayat Birdpur N11, District Siddharth Nagar by the order impugned is founded on the aforesaid reports. The aforesaid appointment is consistent with the requirement of the Government Order and it is valid and lawful.
16. When faced with these facts, the learned counsel for the petitioner tried to save the situation. He called attention to the figures purportedly put out by the NFSA at its website. The figures disclosed by the said NFSA website puts the number of units in village panchayat Birdpur N11 as on 2.2.2018 at 7933. While on 25.3.2018, the number of units is 7890. The last stand of the petitioner does not fare any better.
17. This data was purportedly downloaded from the website of NFSA. The data does not inspire confidence. There is no certified copy issued by the competent authority in the record. The data is not authenticated by any authorized officer. The data is subsequent to the date of the resolution of the village panchayat, which was passed on 19.6.2017 and also after the date of appointment of the respondent no.3 on 14.7.2017. The units are liable to increase or decrease with time. The units will not standstill. The village panchayat is the basic unit of local self government. It has its ears to the ground. It is first to be alerted to the needs of the people and has the autonomy to propose new dealerships to satisfy such needs. The relevant date for consideration of number of units is the date on which the village panchayat passes its resolution. Nothing has been brought in the record to demonstrate that on the date of passing of the resolution for the second shop by the village panchayat on 19.6.2017, or the appointment of respondent no.6 there existed less then 4000 units in the village panchayat on the said dates.
18. This argument can be viewed from another perspective but with the same result. The Government Order dated 17.8.2002 posits the requirement of more than 4000 units to establish an additional shop. The Government Order dated 17.8.2002 is extracted here-in-under for ease of reference:
";fn vH;fFkZ;ksa dh la[;k rhu ls de gS rks iSuy esa nks vFkok ,d dk uke Hkh Hkstk tk ldrk gSA xzkeh.k {ks=ksa esa ;FkklEHko izR;sd xzkelHkk esa ,d jk'ku dh nqdku gksxh vkSj ;fn xzke lHkk esa pkj gtkj ;wfuV ls vf/kd gks rks ,d ls vf/kd nqdku fu;qDr fd;s tkus ij fopkj fd;k tk ldrk gSA""
19. The said standard can be relaxed or deviated from, in case the village panchayat is of the opinion that public interest requires additional shops. The requirement of the welfare of the villagers has primacy over the consideration of profit of the dealers. The interests of the card holders are paramount. The gram panchayat is the best judge of that. The autonomy of the gram panchayat cannot be diluted, by a restrictive interpretation of the government order dated 17.8.2002. The requirement of 4000 units passed by the government order is of a permissive nature and not of prohibitory character. The standard of one shop per 4000 units is not cast in iron.
20. The predecessor of the said Government Order was Government Order dated 10.8.1999. The Government Order of 1999 was cast in similar terms to the Government Order of 2002. The Government Order dated 17.8.2002 is almost pari materia with the Government Order dated 10.8.1999. The latter fell for consideration in the case of Suman Yadav (supra).
21. A learned Division Bench of this Court in the case of Suman Yadav (supra) construed the Government Order of 10.08.1999.
22. This court in the case of Suman Yadav (supra) held thus
8. The Government order dated 10 August 1999, as is evident from its plain language seeks to consolidate guidelines framed and issued by the State Government for the purposes of establishment of fair price shops on 3 May 1999, 18 May 1999 and 30 July 1999. The clause upon which much stress is laid by Sri Singh is in the following terms:
"ग्रामीण क्षेत्र में उचित दर की दुकानों का चयन अब अंतिम रूप से ग्राम सभाओं द्वारा ही किया जायेगा. प्रत्येक ग्राम सभा में उचित दर की एक दुकान खोली जाएगी. जिन ग्राम सभाओं में ४००० से अधिक यूनिट है वहां यदि ग्राम सभा यह महसूस कराती है की एक से अधिक दुकाने खोलने में लोगों को सुविधा होगी तो गांव सभा एक से अधिक दुकान खोलने की कार्यवाही कर सकती है. उचित दर की दुकानों का चयन ग्राम सभा की खुली बैठक में बहुमत से प्रस्ताब पारित कर किया जायेगा."
9. To buttress his submission, Sri Singh has further relied upon a decision rendered by a Division Bench of this Court in Ram Dulare Prajapati v. State of U. P., MANU/UP/0956/2012: 2012(4) ADJ 11.
10. At the outset we may note that Ram Dulare is a judgment which is clearly distinguishable on facts. Firstly, it related to a fact situation where two shops were to be established in the same Gram panchayat. Additionally, the Division Bench found that the subsequent licensee could not have been permitted to establish a fair price shop as he was the real brother of the Gram Pradhan and therefore, an appointment in his favour would violate an express prohibition contained in the Government Order dated 10 August 1999.
11. We have already noted and deem it fit to reiterate that in the facts of the present case, the resolution for the establishment of an additional shop came to be passed on the back of a prayer made by the villagers themselves who expressed difficulty in traversing a distance of 3.5 Kms. to obtain food items and articles meant for daily sustenance. The resolution made in light of the above facts clearly, in our opinion, subserves the public interest which of course must be conferred paramount importance and obviously must guide all State action.
12. Additionally, we find upon a plain reading of the clause on which much reliance was placed, is really not a prohibition for the establishment of an additional fair price shop. As is evident from the plain terms of the said clause all that it makes provision for is to the effect that in those Gram Sabhas where units be more than 4000, in such cases and upon the Gram Sabha being of the opinion that the opening of an additional shop would be necessitated for the convenience of the villagers, a proposal may be processed for the establishment of an additional fair price shop. On a plain reading of the said provision, we are of the view that the same is merely an enabling provision and is not liable to be viewed as a prohibition against the establishment of an additional fair price shop where public interest so mandates. For all the aforesaid reasons, we are unable to sustain the judgment of the learned Single Judge. We accordingly allow this special appeal, set aside the judgment and order of the learned Single Judge dated 18 July 2016 and consequently dismiss the writ petition preferred by the original petitioner. The Sub Divisional Magistrate may proceed in the matter on the basis of the resolution passed by the Gram Sabha and take such further steps as may be mandated in accordance with law."
23. The appointment of the additional fresh price shop dealer is consistent with the above said proposition of the law laid down in Suman Yadav (supra).
24. In view of the aforesaid facts and the position of law narrated in the preceding paragraphs, the writ petition is devoid of merit and is dismissed.
Order Date :- 9.4.2018 Ravi Prakash