Punjab-Haryana High Court
Nfsa Depot Holders Welfare Association vs Union Of India And Ors on 4 July, 2024
Neutral Citation No:=2024:PHHC:082832
CWP-12433
2433-2021 (O&M). -1-
and CWP-2190
2190-2021 (O&M).
IN THE PUNJAB AND HARYANA HIGH COURT AT
CHANDIGARH
211
Date of Decision: 04.07.2024.
(1) CWP--12433-2021
NFSA DEPOT HOLDERS WELFARE ASSOCIATION
... PETITIONER
VERSUS
UNION OF INDIA AND OTHERS
... RESPONDENTS
***
(2) CWP--2190-2021 (O&M)
ROSHAN LAL
... PETITIONER
VERSUS
UNION OF INDIA AND OTHERS
... RESPONDENTS
***
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Neutral Citation No:=2024:PHHC:082832
CWP-12433
2433-2021 (O&M). -2-
and CWP-2190
2190-2021 (O&M).
CORAM: HON'BLE MR. JUSTICE VINOD S. BHARDWAJ.
Present: Mr. Vijay K. Jindal, Advocate,
for the petitioners.
petitioner
Mr. Saurav Verma, Addl. A.G. Punjab.
Mr. Ashish Rawal, Advocate,
for the respondents/Union of India.
VINOD S. BHARDWAJ, J. (ORAL)
Both these writ petitions raise common question and are thus being decided by a common judgment.
2 For the facility of reference, facts are being extracted from CWP-12433 2433-2021, titled as NFSA DEPOT HOLDERS WELFARE ASSOCIATION V/S UNION OF INDIA AND OTHERS OTHERS.
3 Challenge in the said writ petition is to the decision taken by the State Cabinet Sub Committee communicated vide (Annexure P P-5)
5) Memo bearing No.NADS-GM(A)/2016--12/3174 12/3174 dated 19.08.2016 regarding the Costs Sheets (revised) of Wheat distributed under the National Food Security Security Act, 2013/New Atta Dal Scheme approved by the Government of Punjab. A further prayer has been made that the dealers are entitled to Additional Add margin money as well for distribution of Wheat under the Punjab Targeted Public Distribution System (Licensin (Licensing g and Control) Order 2016 as per the terms and conditions of the Food Security (Assistance to State Governments) Government Rules, 2015 (hereinafter referred to as the Rules of 2015). The petitioner association further has also sought a writ of mandamus to the effect that the petitioner association should be permitted to 2 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -3- and CWP-2190 2190-2021 (O&M).
purchase,, the 'Point of Sale Device' for installation at their fair price shop shops and to thereafter pay additional margin of Rs.17/ Rs.17/- per quintal as per Rule 7 of the Food Security Rules, 2015.
4 The petitioner is an association of the Depot Holders running fair price shops at various locations in the State of Punjab. The members of the petitioner association are authorized to sell essential commodities to the ration card holders attached to their fair price shop shops.. The Government of Punjab has fixed margin for selling/distributing essential commodities to the ration card holders. It is averred that the Cabinet Sub Committee of the Punjab State had ha prepared the cost sheet of wheat for distribution am amongst ongst the ration card holders earlier in the year 2015 and fixed fair price shop dealer's margin as Rs.0.25 per kg. The said margin was thereafter revised to Rs.0.50 per kg.
5 During the year 2020, the District Food and Supply Controller roller informed the members members of the petitioner association that the Government of Punjab has fixed Rs.0.50 per kg as the fair price shop dealer dealer'ss margin as per policy issued by the Government and that there was no further revision. The members of the petitioner association thereafter after met the District Food and Supply Controller, Controller Bathinda, for enhancing the margin from Rs.50/ Rs.50/- to Rs.70/- per quintal and for release of additional margin of Rs.17/ Rs.17/- per quintal as per the Food Security (Assistance to State Govt.) Rules, 2015.
The office ce of the District Food and Supply Controller informed that there was no provision for enhancement of margin of Rs.70 per quintal in the 3 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -4- and CWP-2190 2190-2021 (O&M).
policy made by the State Government and that there is also no provision in the State policy for any additional margin tto o be paid to fair price shop dealers on account of using the 'Point of Sale Device.' It was thus conveyed that the fair price shop dealers are entitled to a margin of Rs.50 per quintal only on account of the said supply. Claiming that denial of margin was inappropriate and contrary to the Rules, the present writ petition has been filed.
6 It has been claimed that the Act has specific provision for eligible household to claim food-grain food rain at subsidized price. The Government of India notified the above rules in exercise of the powers conferred under Section 39 (2) (e) read with Rule 22 (4) (d) of the National Food Security Act, 2013. The Rules provide for 50% of the expenditure to be sh shared ared by the Central Government under Rule 7. It is claimed that the Central Government fixed the margin @ Rs.70/-
Rs.70/ per quintal yet, a reduced rate is being released. It is also averred that the 'Point of Sale Device' are being made available by the State and and the margin money remains unpaid.
7 Learned counsel appearing on behalf of the petitioner association has strenuously argued that the Government of India, Ministry of Consumer Affairs, Food and Public Distribution had notified the Food Security (Assistance (Assistance to State Governments) Rules 2015 as per notification dated 17.08.2015. Rule 7 (1) of the Rules of 2015 provided the norms and pattern of Central entral assistance as per which the basic fair price shop dealers margin has been fixed at Rs.70/-
Rs.70/ per quintal (Rs (Rs.0.70 70 per kg.) and an 4 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -5- and CWP-2190 2190-2021 (O&M).
additional margin for sale through 'Point of Sale Device' was at Rs.
Rs.17 7 per quintal. The share of the Central Government was to the extent of 50% under the General Category (the relevant category in the present case). He thus submits that that as against the said basic fair price shop dealers margin of Rs.70/-, per quintal, the Government of Punjab has reduced the margin to Rs.50/- per quintal which is impermissible. It is alleged that the respondent Government nt of Punjab has already claimed an amount of Rs.70/ Rs.70/- per quintal towards the basic fair price shop dealers' dealers margin from the Union of India yet the same is not being disbursed to the petitioner association/fair price shop dealers.
8 It is further argued that an additional margin for sal salee through 'Point of Sale Device' @ Rs.17/-
Rs. per quintal has been prescribed, however, the State Government is not permitting the fair price shop dealers to purchase and install their equipment and to maintain the 'Point of Sale Device' as a result whereof the the dealers are being denied their entitlement to claim the additional margin as approved by the Government of India in its Notification dated 17.08.2015. A claim is thus made that the respondent authorities should defray the margins to the members of the ppetitioner etitioner association in terms of the Food Security Rules, 2015.
9 A short reply on behalf of respondent No.1/Union of India has been filed wherein it is stated as under:-
under:
6. That section 22(4) (d) of the Act obligates the Central Government to provide assistance to the State Government in meeting the expenditure incurred in accordance with such 5 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -6-
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norms and manner as may be prescribed by the Central Government. Section 22(1) and section 22(4)(d) are extracted hereunder for ready reference:-
22. (1) The Central entral Government shall, for ensuring the regular supply of foodgrains to persons belonging to eligible households, allocate from the central pool the required quantity of foodgrains to the State Governments under the Targeted Public Distribution System, aass per the entitlement under section 3 and at prices specified in Schedule I. (2) & (3) x x x x x x (4) Without prejudice to sub sub-section section (1), the Central Government shall, --
(a) to (c) x x x x x x
(d) provide assistance to the State Government in meeting the expenditure incurred by it towards intra intra-State State movement, handling of food-grains grains and margins paid to fair price shop dealers, in accordance with such norms and manner as may be prescribed by the Central Government: and
(e) x x x x x x
7. That in exercise of powers conferred by clause (e) of sub section (2) of Section 39 read with clause (d) of sub section sub-section (4) of Section 22 of the Act, the Central Government after consultation with State Governments notified rules, namely, Food Security (Assistance (Assistance to State Governments) Rules, 2015 (hereinafter referred to as 2015 Assistance Rules') for 6 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -7- and CWP-2190 2190-2021 (O&M).
providing assistance to State Government/UT. The Rules has been amended by the Central Government twice i.e. in 2021 vide notification dated 18.06.2021 and iin n 2022 vide notification dated 23.05.2022. Rule 6 and 7 of the aforesaid 2015 Assistance Rules (as amended from time to time) are 2015-Assistance extracted hereunder for ready reference:
reference:-
6. Assistance from Central Government Government.. The Central Government shall assist the Stat Statee Government to meet the expenditure incurred by it on intra intra-State State movement, handling of foodgrains and margins paid to fair price shop dealers, for distribution of foodgrains allocated for the entitled persons and households.
7. Norms and pattern of Central Assistance (1) The norms of Central assistance (in per quintal) to the State Government and Union territory and share of the Central Government (in percentage) shall be limited as under:-
From the date of implementation of NFSA upto March, 2022 Category Norms of expenditure Centre of States (Rate in * per quintal) Share and Union (in Territories percent) Intra-State Fair price shop movement dealers margin and handling Basic Additional margin for sale through point of sale device General 65 70 17 50
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Special 100 143 17 75From the date of implementation of NFSA upto March, 2022 Category Norms of expenditure Centre of States (Rate in * per quintal) Share and Union Intra-State Fair price shop (in Territories movement dealers margin percent) and Basic Additional handling margin for sale through point of sale device General 70 90 21 50 Special 105 180 26 75 Explanation - x x x x x x (2) The additional margin provided in sub sub-rule rule (1) is towards the cost of purchase, operation and maintenance of the point of sale device, its running expenses and incentive for its use and any savings if accrued could be utilized for purchase, operations and maintenance of electronic weighing scales and their integration with the Point ooff Sale device.
3) The additional margin shall be payable for the fair price shop which has installed a point of sale device and shall be limited to the transactions made through it it.
(4) The additional margin shall be released on the basis of a certificatee from the State Government, supported by the documents, indicating the following, namely:
namely:-
(a) the number of fair price shops at which the point of sale devices have been installed and are functional; and
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(b) the details of all transactions using the po point int of sale devices.
(5) The State Government shall furnish the details of all transactions made through the point of sale devices in public domain.
(6) The State Government shall have the flexibility in choosing any of the following models for the in installation stallation of point of sale device, namely :--
(a) the State Government may purchase, install and maintain the point of sale device.
(b) the State Government may select a system integrator to purchase, install and maintain the point of sale device device.
(c) the fair price shop dealer may purchase, install and maintain the point of sale device.
(7) The State Government shall determine the basis for apportioning the additional margin for sale through point of sale device among different stakeholders, depending upon the model chosen.
(8) The State Government shall have the flexibility to allow differential margins within the State taking into consideration the location of shops and number of ration cards attached to the shops:
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Provided that the Central assistance shall be limited to the rates specified in sub-rule rule (1) of rule 7 or the actual average rates for the State as a whole, at which the expenditure was actually incurred by the State Government, whichever is lower lower.
(9) For the expenditure on intra State movement and handling of foodgrains, Central assistance shall be limited to the rates specified in sub- rule (1) of rule 7 or the actual average rates for the State as a whole at which expenditure was incurred by the State Government, whichever is llower."
(emphasis supplied).
8. That it is evident from the bare reading of Rule 7(1), Rule 7(8) as well as proviso pr viso thereof of the aforesaid Rules that the State Government(s) concerned have the flexibility to fix fix/ determine the actual rate (norms of expenditure) but the central assistance is limited/restricted to the central share based on the actual rate or norms of expenditure mentioned in table of Rule 7(1), whichever is less. In other words, rates mentioned in table of Rule 7(1) are outer limit/maximum limit of central assistance, a fact which is evident from reading of Rule 7(1) and proviso to Rule 7(8) of aforesaid Rules Rules.
9. That the respondent-State respondent State Government in exercise of its powers under Act and rules framed framed thereunder has fixed the actual rate (i.e. basic margin) of Rs. 50 per quintal. In humble submission of answering respondent, the said decision/action is neither contrary to nor inconsistent with any of the provisions 10 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -11- and CWP-2190 2190-2021 (O&M).
of the Act or rules framed thereu thereunder nder by the answering respondent.
10. That as for petitioner's claim of Additional Margin is concerned, it is submitted that the additional margin as provided in Rule 7 (1) of aforesaid Rules is towards the cost of purchase, operation and maintenance of tthe he 'Point of Sale Device', its running expenses and incentive for its use and any savings if accrued could be utilized for purchase, operations and maintenance of electronic weighing scales and their integration with the Point of Sale device. Rule 7 (2) of Rules clearly and unambiguously provides the said additional margin shall be payable only for the fair price shop which has installed a point of sale device and shall only be limited to the transactions made through it. The claim of additional margin is thus dependent upon installation as well as transactions made thus through the Point of Sale Device.
It may not be out of place to point out and mention here that, for release of Additional margin as provided in Rule 7(1), rules mandatorily require furnishing of a Certificate as envisaged in Rule 7(4) as well as furnishing of details of all transactions made through the point point-of-sale sale devices in public domain by the State Government.
11. That in view of submissions made in foregoing reply, it is humbly submitted submitted that there is absolutely no merit in the writ petition, especially qua answering respondent and the same deserves to be dismissed accordingly.
accordingly."
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10 A separate reply by way of affidavit of Sartaj Singh Cheema, District Food and Supplies Controller, Bathinda on behalf of respondents No.2 to 4 has also been filed. The relevant extract of the reply reads thus:
thus:-
3. That it is submitted that the Government of India enacted the National Food Security Act, 2013 with the objective of providing subsidized food grains to the poor population of the country. Under the provisions of this Act, the food grains are distributed to the entitled beneficiaries with the ass assistance istance of fair price shop dealers. For this purpose, the fair price shop dealer is provided with over head charges. The Government of India further notified the Food Security (Assistance to State Governments) Rules, 2015, wherein, Rule 7(1) provides for norms and pattern of central assistance to State Governments norms and Union Territories, which reads as follows:
"7. Norms and pattern of Central assistance assistance.
(1) The norms of Central assistance (in per quintal) to the State Government and Union territory and share of the Central Government (in percentage) shall be limited.
As per above Rule, the basic rate of Rs. 70/ 70/- per quintal fixed as fair price shop dealer's margin by the central government, is the limit of the rate of margin money to be paid to the fair fair price shop dealer wherein 50% of the expenditure is to be shared by the central government. It is also submitted that the proviso to Rule 7(8) of the Food Security (Assistance to State Governments) Rules, 2015 provides as follows:
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"Provided that the Central tral assistance shall be limited to the rates specified in sub--rule rule (1) of rule 7 or the actual average rates for the State as a whole, at which the expenditure was actually incurred by the State Government, whichever is lower."
The joint reading of Rulee 7(1) and proviso to Rule 7(8) clarifies that maximum rate of margin money that can be paid to fair shop dealer is Rs. 70/-
70/ per quintal and the share of central assistance will be 50% of the actual average rate for the State as a whole at which the expend expenditure iture was actually incurred. The rate of margin money to be given to a fair price shop is determined by assessing the expenditure incurred оп various variables/activities involved in the process. It is pertinent to mention here that the matter related to tthe he margin money was deliberated in the meeting of Cabinet Sub Sub-
Committee held on 03.08.2016, wherein it was observed that the Ration Depot holders are demanding that the margin being paid to them is too meager whereas Govt Govt. of India has allowed Rs. 87 per quintal q as FPS dealers' margin. The Committee also observed that the FPS margin allowed by the Govt Govt. of India is the upper limit and not mandatory for the State government. Also Rs. 87 includes additional margin of Rs 17 in case of distribution through 'Point 'Point of Sale device'. Therefore, the FPS dealers can be paid maximum Rs 70 per quintal as ma margin.
gin.
However, as per the provision under National Food Security Act, 2013, the State government is now providing door step delivery of foodgrains, whereas earlier tthe he FPS dealer used to transport the foodgrains at their own cost. Thus, the Cabinet Sub Committee proposed to increase the FPS dealers' margin Sub-Committee 13 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -14- and CWP-2190 2190-2021 (O&M).
to Rs. 50 per quintal from then prevailing rate of Rs 25 per quintal, as per the revised costing sheet sheet.
Sr. Item Previously Proposed
No. approved amendment
(Rs./kg) (Rs./kg)
1 Cost of wheat 2.00 2.00
2 VAT 0.10 0.10
3 Loading and 0.35
Transportation* 0.40
4 Unloading 0.05
charges*
5 FPS Margin* 0.25 0.50
6 Total 2.75 3.00
7 Less recoverable 2.00 2.00
from beneficiary
8 Net amount to be 0.75 1.00
paid by the Govt.
*50% of the expenditure at Sr. no.3, 4 & 5 to be claimed from GOI as per "The Food Security (Assistance to State Governments) Rules Rules, 2015 notified by the Government of India on 17.08.2015. However However, the State Government has to bear these expenses first and then claim 50% from the GOI #Transportation Transportation charges to be paid on actual basis as per policy, depending on the distance. However, the average transportation ion charges for each district should not exceed Rs 0.35 per kg
4. That Rule 7(6) of the Food Security (Assistance to State Governments) Rules, 2015, provides various models for installation of point of sale device and allowed the State 14 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -15- and CWP-2190 2190-2021 (O&M).
Government to choose choose any of the models mentioned therein. The Rule 7(6) of the Food Security (Assistance to State Governments) Rules, 2015 reads as follows:
"7(6) The State Government shall have the flexibility in choosing any of the following models for the installation of point of sale device, namely:-
(a) the State Government may purchase, install and maintain the point of sale device.
(b) the State Government may select a system integrator to purchase, install and maintain the point of sale device:
(c) the fair price shop dealer may purchase, install and maintain the point of sale device."
It is respectfully submitted that it is the State who has to decide as to what model is to be implemented in the State for the installation of point of sale device. In the State of Punjab, the State has chosen the provision given under aforementioned Rule 7(6)(b) and has selected Broadcast Engineering Consultants India Limited (BECIL) to act as a system integrator to purchase, install and maintain the point of sale device. It is pertinent pertinent to mention here that the additional margin of Rs. 17/-
17/ per quintal is to be provided to fair price shop dealer, in case, point of sale device is owned by him which is not the case in the State of Punjab. Thus, no margin money is to be paid to the fair fair price shop dealers for point of sale device as being claimed by the petitioner.
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5. That the State has decided the rate of margin money to be paid to fair price shop dealers and the model of installation of the point of sale device, strictly as per rules provided under the Food Security (Assistance to State Governments) Rules, 2015. The said decision lies purely in the realm of Executive.
Reply on merit:
merit xxx xxx xxx
4. That in reply to the contents of para no. 4, it is respectfully submitted that rate of margin money is revised as per executive decision dated 3.08.2016. No revision of the rate of margin is to be done at the level of the respondent department. Further, the Cabinet Sub-
Sub Committee has already revised the Charges from Rs. 25 per Quintal Quintal to Rs. 50 per quintal with effect from April 2016 on distribution of Wheat.
xxx xxx xxx
7. That the contents of para no. 7 are admitted to the extent that it explains various provisions of the "The National Food Security Act, 2013" and Food Security Rules, 2015.
It is pertinent to mention here that rate of Rs 70/ 70/- per quintal as basic margin of fair price shop dealer is the upper limit. However, the State decides the rate of margin money assessing all variables and expenditure incurred by the State Government. It is respectfully submitted that the contents of Government.
para no. 3 of the preliminary submission may kindly be read as part and parcel of this para.
8. That the Contents of para 8 are admitted to the extent of reproduction of Rule 7 of the Food Secur Security ity (Assistance to 16 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -17- and CWP-2190 2190-2021 (O&M).
State Governments) Rules, 2015. In reply to the rest of the para, it is respectfully submitted that the FPS margin of Rs 70 per quintal allowed by the Govt of India in above mentioned Rule 7, is the upper limit and not mandatory for the State government. However, as per the provisions of the National Food Security Act, 2013, the State government is providing door step delivery of foodgrains, whereas earlier the FPS dealers used to transport the foodgrains at their own cost. Thus, the Cabinet Cabi Sub- Committee deliberated the issue in its meeting dated 03.08.2016 and proposed to increased the rate of FPS dealers' margin from Rs 25 to Rs 50 per quintal as per the revised costing sheet as already explained in the para no. 3 of the preliminary submission.
submission. It is further submitted that additional margin of Rs 17 per quintal is to be provided to FPS dealers, in case 'Point of Sale device' is owned by him which is not the case in the State of Punjab Punjab. The State of Punjab has chosen the provision given unde under Rule 7(6)(b) of the Food Security (Assistance to State Governments) Rules, 2015 and has selected the BECIL to act as a system integrator to purchase, install and maintain the 'Point Point of Sale device'. Thus, no additional margin money is to be paid to tthe he FPS dealers for point of Sale device' as being claimed by the petitioner.
xxx xxx xxx
10. That the contents of para 10 are admitted to the extent that the FPS dealers' margin was fixed at Rs 25 per quintal vide memo dated 18.11.2015 (Annexure P P-4).
4). However, it is respectfully submitted that as already explained in the foregoing paras, the margin margin of FPS dealers has been increased from Rs 25 to Rs 50 per quintal after the decision taken by the Cabinet Sub-
Sub Committee in its meeting dated 03.08.2016. It is also pertinent to mention here that above mentioned rate is 17 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -18- and CWP-2190 2190-2021 (O&M).
exclusive of transportation cost cost and the State government is now providing door step delivery of foodgrains, whereas earlier, the FPS dealers used to transport the foodgrains at their own cost."
11 No replication had been filed on behalf of the petitioner association to the written statements filed on behalf of Government of India as well as by the State of Punjab.
ARGUMENTS OF PETITIONER 12 The emphatic empha argument advanced by the counsel for the petitioner association is that the basic margins notified by the Government of India in the Notification dated 17.08.2015 @ Rs.70/ Rs.70/- per quintal has been reduced by the Cabinet Sub Committee to Rs.50 per quintal and that despite the Government Governm of Punjab claiming the said amount from the Union of India, the same is not being defrayed de by them. Hence, the Governm Government nt of Punjab is deriving benefit at the cost of dealers dealers' margin and retaining the said benefits to itself. He contends that such undue advantage an andd unjust enrichment could not have been drawn by the Governm Government of Punjab by way of seeking defrayment of the expenses fr from the Union of India to the extent of 50% under a false pretext so as to defray its share in the actual expenditure.
e. He further submits submits that the respondents have not permitted the petitioner association and/or its members to install their own 'Point of Sale Device' and as a result thereof, the additional benefits notified under the Notification otification of 2015 could c not be availed by the petitio petitioner ner association. He thus submits that the acts of the Government overnment of Punjab, as conveyed by the 18 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -19- and CWP-2190 2190-2021 (O&M).
Food and Supply Controller, Bathinda, Bathinda are arbitrary and illegal and amount to wrongful denial of the just and due payments to the petitioner association by arbitrary and illegal acts act on the part of the respondent State.
ARGUMENTS BY RESPONDENTS RESPONDENT 13 Cont Controverting ing the above, counsel for the respondents have contended that the present writ petition has been filed on the basis of misconceived interpretation of the Food Security (Assistance to State Governments) Rules 2015 and without taking note of Rule 7 (8) and the proviso thereto. It is contended by the counsel for the respondents that as per the margins notified by the Union of India in the Rules of 2015, th thee said margins are the outer limit and payable equally by the Central and the State Government.. The State Government is eligible to determine ne the actual expensess and to seek reimbursement of the Central share of the assessed expenditure under Rule 7 (8) of the Rules of 2015. The disbursement of margin in favour of the fair price shop dealers has to be done on the basis of actual expenses assessed by the Government of Punjab or the rate notified as the outer limit by the Central Government whichever is less. They submit that the rates notified under the Rules of 2015 are the outer limit and are not the minimum m rates prescribed for being paid paid. Hence, the Government of Punjab/State tate Government is entitled to determine the actual expenses incurred and to thereafter determine the margins admissible to the fair price shop dealers as a basic norm. He referred to the submissions made in the reply as reiterated and affirmed by the Government of India in its written 19 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -20- and CWP-2190 2190-2021 (O&M).
statement that price @ Rs.50 per quintal has been demanded by the Government of Punjab from the Government of India and Government of Punjab has not received the margins @ Rs.70 per quintal as has been argued by the counsel for the petitioner. It is submit submitted ted that notwithstanding the aforesaid specific stand taken by the respondents and duly corrobor corroborated ted in the reply filed by the Union Un of India, no replication/rejoin replication/rejoinder controverting overting the said factual aspect has been filed by the petitioner.
14 It is also submitted by the counsel for the respondent State tate of Punjab that so far as the issue as regards the additional margins for sale through 'Point of Sale Device' is concerned, the rules specifically provided for the Statee Government ent to opt for any of the three models prescribed thereunder. The dealer would be entitled to the additional margin for sale through 'Point of Sale Device' in case the equipment is installed by the dealer himself. As against the same, the State Government has opted for the other options that had been provided for in the Rules and as such, fair price shop dealers have not been permitted to purchase, install and maintain 'Point of Sale Device' in their fair price shop shops, hence, the additional margin cannot be claimed by them as a matter of right. The entitlement to claim such margin can enure in favour fa of fair price shop dealers only in the event the 'Point of Sale Device' is installed by such dealer dealer.. The State is fully empowered to adopt other methods of imploration of 'Point of Sale Device' so as to check pilferage of stocks.
stocks. It is contended that the petitioner association is claiming that it/its members should be permitted to install 20 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -21- and CWP-2190 2190-2021 (O&M).
their own 'Point 'Poi of Sale Device' clearly shows that there is no such authorization in their favour for doing the same and that in the absence of any such 'Point of Sale Device' having not been allowed to be installed by the members to the petitioner association,, the State te of Punjab cannot be said to be acting contrary to the Rules or to be in violation thereof.
15 It is also submitted that there is no rule rule; or guidelines or instructions brought before this Court on the basis whereof, it may be held that determination of actual expenses is inappropriate or is not based on valid considerations or is not sustainable in law and in the absence of any such data, the assessment done should not be interfered with in exercise of powers of judicial review.
rev 16 No other argument has been raised by any of the parties.
17 I have heard learned counsel appearing for the respective parties and have also gone through the documents appended along with the present petition with their able assistance.
18 Before proceeding further in the matter, it wil will be relevant to advert to the statutory provisions provis and the Rules that have already been extracted in the reply filed by the Union of India as well as the State of Punjab.
19 Rule 7 (1) of the Food Security (Assistance to State Governments) Rules 2015, prescribes the norm and patterns for the Central entral assistancee and "limits" the share of the Central Government to the extent of 50%.. It is evident from a reading thereof that the Central Government overnment does 21 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -22- and CWP-2190 2190-2021 (O&M).
not prescribe any minimum rate/margin and is rather prescribe prescribes the outer liit for the margin and the additional margin for sale through 'Point of Sale Device.' Rulle 7 (6) of the Rules ules of 2015 empowers the State Government and gives it flexibility flexibility in choosing any of the models for installation of 'Point of Sale Device' as has been specified thereunder. The he model of allowing the fair price shop dealers to purchase, install and maintain 'Point of Sale Device' is one amongst the three model models that have been prescribed in the Rules.. In the case ca e of the State of Punjab Punjab, they have opted for the model as provided provid for under Rule ule 7 (6) (b) and have selected a system integrator to purchase install and maintain mainta n the 'Point of Sale Device'.
Hence, the State St Government, being competent competent, chose one of the three models of 'Point of Sale Device.' Device The he fair price shop dealers cannot seek additional margins payable for installing 'Point of Sale Device' since the entitlement could accrue in their favour only in th thee event of the State Government chosing the model prescribed prescribe under Rule ule 7 (6) (c) of the Rules of 2015.
20 Further, the provision of Rule 7 (7) empowers the State Government to determine determin the basis for apportioning the additional margin amongst the different different stake holders depending upon the model chosen.
Thus, the right to claim additional margin is not a vested and accrued right in favour our of a dealer and the right is vested in the State Government to determine the basis for apportionment of the additional margin on the basis of model adopted by it.
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21 In the instant case, as the State Government has adopted a system integrator option and there is no investment made by the fair price shop dealers to purchase, install and maintain intain the 'Point of Sale Device'..
Hence,, it would not be entitled to plead that any additional particular cost has been incurred by it and expenses es are accordingly required to be incurred for maintaining the 'Point of Sale Device' for which the said additional margin is the means of compensating the additional revenue/capital expenditure that may have to be incurred by the fair price shop dealers dealers.
22 Further Rule 7 (8) of the Rules ules of 2015 provides flexibility to the State Gov overnment rnment to allow differential margin with within the State taking g into nto consideration the locations of the shops and the nu number of ration cards attached to the shops.
sh 23 The proviso to Rule 7 (1) is of significant importance since the said proviso provides that the assistance of the Central Government shall be 'limited' to the rates as specified in Rule ule 7 (1) or the actual average rates for the he State as a whole, whole at which the expenditure ture was actually incurred by the State Government 'whichever is lower.' Hence, the obligation of the Central Government to provide Central entral assistanc assistance is only to the extent as are notified under Rule 7 (1) of the Rules of 2015 or at the actual average rates determined by the State, whichever is lower. In the present case, the Government overnment determined the actual average rates for the State as a whole @ Rs.50 per quintal and has claimed the Central entral assistance on the basis of the said rate instead of @ Rs.70 per quintal. Since ince the claim has been raised at 23 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -24- and CWP-2190 2190-2021 (O&M).
the lower of the actual rates/Central rates/ assistancce notified under Rule 7 (1), the argument of the petitioner that the respondent State could not have reduced the rate is misconceived. The right, right if any, could have accrued in fa favour our of the petitioner only in case the respondent State would have claimed the rates at an equal or at a price higher than Rs.70 per quintal and would have released @ Rs.50/-
Rs.50/ per quintal and thus retained the differential margin money. However, the actual average rates communicated by the State to the Central Government is @ Rs.50 per quintal quintal, hence, the petitioner titioner cannot claim any rate higher than the actual lodged by the State. There is also no evidence on record on the basis whereof, whereof the argument advanced by the counsel for the petitioner can be said to be corroborated more more-so when hen the specific stand of the t Union of India in para no.
no.9
9 of its short reply is that the
State Government
overnment exercising
ex its powers un
under
er the Act and rules framed
thereunder, had fixed the actual rate (basic margin) of Rs.50 per quintal.
The said factual assertion of the Union of India as well as State Government has remained uncontroverted and undisputed. No inference to the contrary can thus be drawn in the absence of any challenge or pleading and/or evidence adduced on record.
24 In so far as the contention of the petitioner that the Cabinet Sub Committee has reduced the rate from Rs.70 to Rs.50 per quintal is concerned, the same, same I find, is fallacious cious and is liable to be rejected. The determination of actual expense by the Cabinet Sub Committee shows that there is in fact fa an increase in the rate from Rs.25 per quintal tal to Rs.50 per 24 of 26 ::: Downloaded on - 21-07-2024 20:59:18 ::: Neutral Citation No:=2024:PHHC:082832 CWP-12433 2433-2021 (O&M). -25- and CWP-2190 2190-2021 (O&M).
quintal in the year 2021. The Notification otification of the rate rates towards the outer/maximu limit @ Rs.70 per quintal by the Government outer/maximum nt of India was solely for defraying the Central entral assistance/ assistance/Central share towardss the margins to be defrayed to the fair price shop dealers and it was not a determination of actual actu expenses by the Government of India. Such determination was required to be undertaken by the State Government under the applicable rules. The said determin determination ation has been undertaken by the Cabinet Sub Committee and a detailed analysis with respect to the various enhancement/increase enhancement/increa has been mentioned thereun thereunder.
25 A perusal of the cost sheet shows that there has been an amendment in the costing sheet and that it is actually not a case of reduction of the margin money and is rather an increase of the fair price shop dealers' margin from Rs.25 per quintal to Rs.50 s.50 per quintal against as determined earlier in the Cabinet Sub Committee meeting held on 03.08.2016.
26 Considering it from any of the said perspectives, I find that the decision of the Cabinet Sub Committee in enhancing the dealers margin from Rs.25 to Rs.50 per quintal cannot be said to be illegal, non est, without jurisdiction or authority or to be in conflict flict with the provisions of Rule 7 of the Rules of 2015. The present writ petitions accordingly lack merit and the same are dismissed.
27 Pending, misc. application(s), if any shall also stand(s) disposed of accordingly.
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28 A photocopy of the order be placed on the file of connected writ petition.
July 04, 2024.
4. (VINOD VINOD S. BHARDWAJ) raj arora JUDGE Whether speaking/reasoned : Yes/No Whether reportable : Yes/No 26 of 26 ::: Downloaded on - 21-07-2024 20:59:18 :::