Writ Petition No.303 of 2008

15th June, 2009

Petitioner Counsel: Mr. FIRDOZ MIRZA
Respondent Counsel: Mr. N. W. SAMBRE,Ms. BHARTI DANGRE

JUDGMENT

JUDGMENT :- Heard Mr. Firdoz Mirza, learned counsel for petitioners and Mr. N. W. Sambre, learned Government Pleader for respondent.

2. Learned counsel for the petitioners has submitted that the petitioners, are challenging validity of the Government Resolution dated 3.11.2007 which lays down the new procedure for issuing fresh Fair Price Shop and Kerosene Retail Licences, whereby only self-help groups are eligible to apply for such licences and are competent to get the said licences.

3. Mr. F. T. Mirza, learned counsel has submitted that Peoples Union for Civil Liberties filed Writ Petition No.196 of 2001 before the Apex Court raising various grievances about the Public Distribution System in our country which includes the policy of grant of fresh licences of fair price shops as well as kerosene retail dealership. It is contended that the Apex Court constituted Central Vigilance Commission to be headed by Justice D. P. Wadhwa (retired Judge of the Supreme) assisted by Dr. N. C. Saxena, the Commissioner of the Commission earlier appointed by the Supreme Court. The said Commission was directed by the Supreme Court to submit its report within a period of four months from the date of order of the Supreme Court dated 12.7.2006. The Commission submitted its comprehensive report before the Apex Court and there was an unanimity at the Bar in respect acceptance of the said report of the Commission. Hence, the Apex Court has accepted the said report vide order dated 10.1.2008. The Apex Court vide order dated 10.1.2008 directed the Commission to undertake similar exercise in terms of the first order of the Apex Court dated 12.7.2006 for the entire country since the report submitted by the Commission to the Apex Court was accepted by the Apex Court for implementation thereof only in respect of Delhi. Mr. F. T. Mirza, learned counsel for the petitioners has submitted that the Central Government vide notification dated 18th July, 2008 in view of the order dated 11th July, 2008 passed by the Supreme Court extended time for submission of report (II) by the Central Vigilance Commission upto April, 2009. Learned counsel for the petitioners has submitted that the new item published in newspapers recently shows that such report was submitted by the Central Vigilance Commission to the Apex Court and the decision in respect of acceptance of report has not yet been taken by the Apex Court.

4. Mr. F. T. Mirza, learned counsel for the petitioners has submitted that the State of Maharashtra is a party to Writ Petition No.196 of 2001 and Mr. Ravindra K. Adsure, learned counsel accepted notice on behalf of the State of Maharashtra. It is contended that the State of Maharashtra is well aware that the Apex Court is seized of the issue pertaining to various problems faced and shortcomings noticed in the Public Distribution System throughout the country. The State of Maharashtra is also aware that the Apex Court is monitoring the issue of Public Distribution System in our country and for proper, fair and just implementation of Public Distribution System, the Central Vigilance Committee headed by Justice D. P. Wadhwa has been constituted by the Supreme Court to consider the mode of appointment of dealers, ideal commission or rate payable to the dealers, modalities as to how the Committee already in place can function better and modes as to how there can be transparency in allotment of food stock to be sold at the shops etc. It is contended that the Commission, after considering these aspects, submitted its first report which was accepted by the Supreme Court and has been implemented in respect of Delhi. It is contended that the State of Maharashtra was in know of the fact that the second report was required to be submitted by the Commission in respect of the whole country and it is for the Apex Court to consider the same and issue necessary directions to the State Governments for proper and effective implementation of the Public Distribution System. It is submitted that since the issue is pending before the Apex Court and is also monitored by the Apex Court since 2001 and the Central Vigilance Commission is constituted by the Apex Court for the purpose of submitting its report, it was not proper for the State of Maharashtra to issue Government Resolution dated 3.11.2007 in hurry and evolve a procedure of issuance of fresh fair price shops and kerosene retail licences in the mean-time. Learned counsel for the petitioners has submitted that the State of Maharashtra ought to have waited till submission of second report by the Central Vigilance Commission. It is submitted that the State of Maharashtra though is a party to Writ Petition No.196 of 2001 pending before the Apex Court and was fully aware that the Apex Court wants to evolve just, proper and fair procedure for effective implementation of Public Distribution System, on the basis of the recommendations of Justice Wadhwa Commission, without waiting for such decision by the Apex Court, in a great hurry formulated a procedure for issuance of fresh fair price shop and kerosene retail licences by giving complete go-bye to the proceedings initiated by the Peoples Union for Civil Liberties as well as orders passed by the Apex Court and, therefore, action of the State Government has frustrated the marathon exercise undertaken by the Apex Court.

5. Learned counsel for the petitioners has submitted that though the petitioners at this stage are not affected by the impugned Government Resolution dated 3.11.2007. However, since the State Government is a party to Writ Petition No.196 of 2001 which is pending before the Apex Court, the State Government ought to have sought permission of the Apex Court for evolving the procedure in respect of issuance of fresh fair price shops and kerosene retail licences. Learned counsel for the petitioners has brought to our notice the statement made in paragraph 9 of the affidavit dated 25.4.2008 filed on behalf of respondent wherein it is stated that Chief Secretary, Government of Maharashtra received communication dated 8th April, 2008 from the Secretary, Central Vigilance Commission, whereby information is sought about the Public Distribution System operating in the State of Maharashtra as well as its functioning. Suggestions on the other aspects of the Public Distribution System prevalent in the State of Maharashtra are also invited. From the above communication, it appears that the Commission has sought information as well as invited suggestions from the State of Maharashtra for the purpose of finding out the factors affecting the Public Distribution System in the State of Maharashtra.

6. Learned counsel for the petitioners has submitted that though the petitioners have challenged Government Resolution dated 3.11.2007 also on other grounds, however, at this stage, the petitioners do not want to press those grounds and prayed that same may be kept open.

7. Mr. N. W. Sambre, learned Government Pleader has not disputed the factual aspects of the matter, however, has submitted that the policy evolved vide Government Resolution dated 3.11.2007 is just, fair, transparent and serves the public purpose. Learned Government Pleader has further submitted that while issuing Government Resolution dated 3.11.2007, the State Government has taken into consideration the report submitted by the Planning Commission, report of National Council of Applied Economic Research and on the basis thereof, evolved the new procedure for issuing fresh fair price shops and kerosene retail licences to self-help groups. It is contended that the State Government is aware about the pendency of public interest litigation i.e. Writ Petition No.196 of 2001 before the Apex Court.

8. Learned Government Pleader has submitted that though Writ Petition No.196 of 2001 is pending before the Apex Court, wherein the Supreme Court has passed various orders and it is also monitoring the issues pertaining to shortcomings in the Public Distribution System. However, that does not prohibit the State Government from evolving its own procedure/policy for issuing fresh fair price shops and kerosene retail licences. It is further contended that Planning and Evaluation Organization of Government of India independently studied the working of the Targeted Public Distribution System and submitted its recommendations. The Planning Commission has painted a bleak picture on the working of the Targeted Public Distribution System and has suggested that the Public Distribution System outlets be handed over to the Self Help Groups wherever possible in order to bring transparency in the Public Distribution System. The Cabinet of the State of Maharashtra, in view of this aspect, has taken a decision in this regard and issued Government Resolution dated 3.11.2007. It is further contended that pursuant to the issuance of the Government Resolution dated 3.11.2007, in all 993 retail kerosene licences are already issued by the Competent Authority upto December, 2008.

9. We have considered the contentions canvassed by the respective parties. In the present writ petition, petitioners have challenged validity and propriety of the Government Resolution dated 3.11.2007 on various grounds including the ground of legislative competence of the State Government to issue such Government Resolution, however, the grounds raised in this regard at this stage are not pressed by the petitioners.

10. In order to consider the other grievance of the petitioners, it was appropriate to consider the issue involved in Writ Petition No.196 of 2001 filed by the Peoples Union for Civil Liberty in the Apex Court as well as orders passed by the Apex Court from time to time in the said petition. Relevant portion of the order dated 12.7.2006 passed by the Apex Court reads thus :

"UPON hearing counsel the Court made the following order -

W.P. (C) No.196 of 2001

Delay condoned.

Application for intervention is allowed.

After having heard learned counsel for the parties, we find that there is practically no monitoring over the sums allotted for the Public Distribution System (in short PDS) by the Central Government, and its utilization. The amount involved, we are told, is in the neighbourhood of Rupees Thirty Thousand Crores annually. Certain suggestions have been given by Mr. Colin Gonsalves, learned senior Counsel, as to the modalities to be adopted in such cases. At the present state, we feel it would be necessary to constitute a Central Vigilance Committee, headed by a retired Judge of this court to be assisted by Dr. M. C. Saxena, the Commissioner earlier appointed by this court. We request Mr. Justice D. P. Wadhwa to head the Committee.

The Committee shall look into the maladies which are affecting the present functioning of the system and also suggest remedial measures. For this purpose, the Committee shall, amongst other things, focus on :

a) The mode of appointment of the dealers,

b) The ideal commission or the rates payable to the dealers, and

c) Modalities as to how the Committees already in place, can function better,

d) Modes as to how there can be transparency in allotment of the food stock to be sold at the shops.

While dealing with the question on the mode of appointment, the Committee shall also suggest as to a transparent mode in the selection of the dealers. The Committee shall also indicate as to how more effective action can be taken on the report of Vigilance Committee already appointed. It goes without saying that the same shall be in addition to the legal remedies available to any citizen in setting law into motion. We request the Committee give its report within a period of four months so that further instructions/directions can be given.

The Committee would invite suggestions from general public, organizations and would consider the suggestions, if any received, in the proper perspective.

We are giving this unusual directions in view of the almost accepted fact that large scale corruption is involved and there is hardly any remedial step taken to put an end to this. The ultimate victim is the poor citizen who is deprived of his legitimate entitlement of food grains. The Public Distribution System is intended to ensure that a citizen gets the good grains at a reasonable price keeping in view of his economic standards.

The expenses including honorarium to the Chairman and the member Convener and other financial involvements of the Committee shall be borne by the Food Ministry of the Central Government. The honorarium shall be same as the pay and allowances of the sitting Judge of this Court and a Joint Secretary of the Union of India. The necessary infrastructures shall be provided by the concerned Ministry within three weeks from today. This direction is initially given for the Government of Delhi to be followed on All India basis."

11. A plain reading of the order passed by the Apex Court referred to hereinabove clearly shows that the unusual direction given by the Apex Court was in view of the almost accepted fact that large scale corruption is involved and there is dire need to evolve just, fair and transparent procedure in Public Distribution System in order to ensure that the citizen gets food grains at a reasonable price keeping in view of his economic standard. Order of the Supreme Court makes it evident that the Apex Court is wholly unhappy and seriously concerned about the existing procedure prevalent in Public Distribution System and, therefore, constituted Central Vigilance Committee headed by Justice D. P. Wadhwa. The Committee was asked to look into factors which are affecting the proper functioning of the Public Distribution System and was also asked to suggest remedial measures such as mode of appointment of dealers; procedure which will bring transparency in selection of dealers etc..

12. The scope and ambit of Central Vigilance Commission was initially limited to finding out the factors affecting Public Distribution System pertaining to Delhi and was required to give its report accordingly. The Apex Court passed another order dated 10.1.2008 in the said writ petition which reads thus :

"Upon hearing Counsel, the Court made the following order.

We have perused the Report submitted by the Commission headed by Justice D. P. Wadhwa. The Report is comprehensive and gives a detailed analysis of various aspects which needed to be addressed. There is unanimity at the Bar that the Report deserves acceptance. Therefore, we direct acceptance of the Report. In terms of the earlier order, 1st similar exercise be undertaken by the Commission for the entire country, because the factors highlighted by the Commission are not restricted to Delhi alone and appear to be prevalent throughout the country. The Commission is requested to submit its Report within a period of six months. The earlier modalities relating to salary etc. shall be continued. The various suggestions given and shortfalls noticed by the Commission shall be addressed after the subsequent Report is received.

The order dated 28.11.2001 is modified to the extent that the allotment shall be 35 kg. in view of the increase, subsequent to the order."

13. The above-referred order of the Apex Court shows that the report submitted by the Commission and the suggestions given therein were accepted by the Supreme Court. However, implementation thereof was restricted to Delhi alone. The Commission was requested to undertake similar exercise in respect of whole of India and was asked to submit its report within six months. It is brought to the notice of this Court that second report of the Commission is submitted to the Supreme Court, but the same has not yet been considered by the Supreme Court and, therefore, pending for consideration and decision. In the backdrop of the above-referred circumstances as well as order passed by the Apex Court, it is evident that the public interest litigation filed by the Peoples Union for Civil Liberties was entertained by the Apex Court to bring about uniformity, transparency in the existing Public Distribution System. The above-referred orders in no uncertain terms show the great concern of the Apex Court and, therefore, Central Vigilance Commission was constituted and was asked to submit its report so that appropriate uniform and transparent policy can be evolved to bring about fairness in the Public Distribution system for making it just and proper. The above-referred facts and circumstances as well as orders passed by the Apex Court indicate that new policy or procedure in the Public Distribution System will be evolved by the Apex Court on the basis of recommendations and suggestions given in the second report of the Central Vigilance Commission and, therefore, by necessary implication, all the States in general and the State of Maharashtra in particular which is party to the said writ petition, ought to have waited till such orders are passed by the Apex Court based on the second report of the Central Vigilance Commission. In the present writ petition, since the petitioners have not pressed the issue regarding Legislative competence of the State of Maharashtra in issuing Government Resolution dated 3.11.2007, it is not necessary for us to adjudicate upon the same in the present writ petition and the said issue is kept open.

14. We want to observe that Public Distribution System has been set up in our country with the following objectives :

(a). To provide food grains to the poor at affordable prices;

(b). To support farmers by purchasing food from them at reasonable prices; and

(c). To maintain national food security by holding stockpiles of food.

As observed by the Supreme Court, the Public Distribution System suffers from chronic management shortcomings concerning; the extent and timing of procurement, poor forecasting capacity, antiquated logistical systems to support storage and delivery functions, inappropriate product mix, cost inefficiencies, poor quality food grain, harassment of consumers at the point of client interface and exclusion of large numbers of the poor from the system entirely. Various difficulties are faced in the process of distribution of grains as well as kerosene. Similarly, because of large-scale corruption, just, proper and transparent procedure is required to be evolved in distribution of food grains as well as allotment of kerosene quota. It is also necessary to identify the criteria for allotment of fair price shops as well as kerosene retail dealership. The Indian Public Distribution System (PDS) is a national food security system that distributes subsidized food to India's poor. Major commodities distributed include wheat, rice, sugar and kerosene. As per recent survey of Ministry of Consumer Affairs, Food and Public Distribution System (in India), the Public Distribution System has a network of about 4,78,000 Fair Price Shops, perhaps the largest distribution network of its type in the world. The Supreme Court has already expressed its total dissatisfaction in respect of function of the Public Distribution System in our country and is very much concerned about the proper functional aspects of the system. In order to overcome the short-comings as well as difficulties faced by the Public Distribution System, the Supreme Court has constituted Central Vigilance Commission to give suggestions and formulate proper modalities not only for eradicating and eliminating the shortcomings and difficulties, but also asked the Committee to give suggestions for effective functioning of the Public Distribution System.

15. In view of these peculiar facts and circumstances as well as in view of the orders passed by the Apex Court in Writ Petition No.196 of 2001, it was expedient for the State of Maharashtra to wait till the decision is taken by the Apex Court and appropriate policy or procedure is evolved by the Apex Court for streamlining the Public Distribution System in order to make it just, fair and transparent. It is brought to the notice of this Court by learned Government Pleader that since last December, no fresh fair price shop licence or kerosene retail dealership is issued/allotted in view of the Government Resolution dated 3.11.2007 and, therefore, we are of the view that the State Government being a party to the said writ petition which is pending before the Apex Court should seek clarification from the Apex Court as to whether the procedure evolved by the State Government vide Government Resolution dated 3.11.2007 in respect of grant of fair price shop licences as well as allotment of kerosene retail dealership should be continued till the decision is taken by the Apex Court on the basis of second report submitted by the Central Vigilance Commission. The need to seek such clarification by the State Government from the Apex Court is, once such licences or dealerships are given, legal rights would be created in favour of such licensees-allottees and if the Apex Court, on the basis of second report of the Central Vigilance Commission formulates or evolves a new methodology in Public Distribution System to streamline the same and make it more transparent, just and fair, it will have bearing on the rights of such allottees.

16. In view of the above-referred facts and circumstances, it is evident that serious and marathon exercise is undertaken by the Apex Court for the purposes of streamlining all the facets of Public Distribution System in this country for making it more effective and efficient. All the State Governments including the State of Maharashtra are party to the said petition. Though the second report appears to be submitted by the Central Vigilance Commission headed by Justice Wadhwa (retired), this Court is not aware whether the Apex Court has finally taken any decision thereon by issuing directions to the various States in this country. It is in such circumstances, we are of the view that it will be appropriate for the State Government to seek necessary clarification within a period of two months from today whether the procedure of issuance of fresh fair price shop licences as well as kerosene retail dealerships evolved by the State Government vide Government Resolution dated 3.11.2007 can be continued till such time the Apex Court takes appropriate decision. We expect the State Government not to issue any fresh fair price shop licence or kerosene retail dealership in the meantime.

17. For the reasons stated hereinabove, writ petition is disposed of.

Ordered accordingly.