Andhra Pradesh HC Sets Aside FP Shop Dealership Termination Done Without Inquiry or Hearing
The Andhra Pradesh High Court found a flagrant violation of natural justice where a temporary Fair Price shop dealer's authorisation was cancelled without any inquiry or opportunity of hearing, and restored the petitioner's dealership pending a lawful inquiry.
Justice Ravi Cheemalapati, sitting singly at the High Court of Andhra Pradesh at Amaravati, disposed of Writ Petition No. 19099 of 2024 on 12 March 2026, quashing an order dated 3 August 2024 that abruptly terminated the dealership of a temporary Fair Price shop operator in Gopalapatnam, Visakhapatnam City. The District Civil Supply Officer had transferred the distribution work of Fair Price Shop No. 0386103 to a permanent dealer—respondent No. 5, Mr. Jeevan Kumar—without conducting any inquiry or affording the petitioner an opportunity of hearing. The court held that this amounted to a flagrant violation of the principles of natural justice and was inconsistent with the procedure mandated by the Andhra Pradesh State Targeted Public Distribution System (Control) Order, 2018.
The Dispute Before the Court
The petitioner, Sri Durga Mahila Podupu Sangam Self Help Group, represented by its President Smt. D.V.L. Bhavani, held the dealership of Fair Price Shop No. 0386103 at Gopalapatnam, Visakhapatnam City. The group had been appointed as a temporary dealer by the then Collector, Visakhapatnam, vide proceedings dated 27 October 2020, following the demise of the permanent dealer of the subject shop.
The petitioner's counsel, Sri M.M.M. Srinivasarao, placed before the court that after a change in the political scenario, the MLA of Visakhapatnam West Constituency wrote to the District Civil Supply Officer, respondent No. 3, alleging that during a field visit to Wards 90 and 92, cardholders had complained of improper ration distribution. The MLA requested termination of the dealership and tagging of the shop to the nearest Fair Price shop. The petitioner's counsel contended that the entire ration for July 2024 had in fact been delivered to cardholders through an MDU operator.
Acting on this representation, respondent No. 3 issued order Rc.No.171/2024/S4 dated 3 August 2024, terminating the petitioner's dealership and entrusting the distribution work to respondent No. 5. No inquiry was conducted before this order was passed, and the petitioner was not heard. The order was served on the petitioner on 20 August 2024. The petitioner challenged it under Article 226 of the Constitution of India, seeking a writ of mandamus to declare the termination illegal and to direct respondents to release essential commodities in favour of the petitioner.
The Legal Issue: Does Temporary Status Affect the Right to a Hearing?
The central legal question was whether a temporary dealer at a Fair Price shop can be removed without following the procedure for inquiry prescribed under the AP State Targeted Public Distribution System (Control) Order, 2018, simply because the dealer holds temporary status rather than permanent status.
The petitioner's counsel relied upon the decision in K. Bharath v. The Collector (Civil Supplies), where the Andhra Pradesh High Court held that <“whether a dealer is permanent or temporary will not make any difference in deciding these questions.” The court in that case further observed that if charges framed against a petitioner are not proved, the dealer cannot be displaced on the mere ground of being a temporary dealer.
The Government Pleader for Civil Supplies, Sri Vineeth Appasani, acknowledged that the MLA had the authority to recommend action against a dealer where a cardholder complains of malpractice. However, he fairly conceded that if the court were inclined to interfere, liberty could be given to the respondent authorities to take steps in accordance with law.
How the Court Reasoned
Justice Cheemalapati noted that it was undisputed that the petitioner was a temporary dealer. He also noted that, by an interim order passed on 11 September 2024, the court had already suspended the impugned proceedings and the petitioner had continued to operate the shop pursuant to that order.
The court stated plainly: for cancellation of the authorisation of a permanent dealer or even a temporary dealer, an inquiry must be conducted as contemplated under law. No such inquiry had been conducted here. The order of termination was therefore found to be in flagrant violation of the principles of natural justice on its face.
Significantly, the court disposed of the matter without calling for a counter-affidavit from the respondents and without expressing any opinion on the merits of the underlying allegations against the petitioner. This approach reflected that the procedural infirmity was self-evident from the face of the impugned order itself, making a full merits examination unnecessary at this stage.
The court's reliance on K. Bharath reinforces that the AP TPDS framework does not permit a two-tier regime where temporary dealers may be removed informally while permanent dealers enjoy procedural protections. The Control Order 2018 applies uniformly, and the nature of the dealer's appointment—temporary or permanent—does not dilute the right to be heard before removal.
Directions Issued
The court disposed of the writ petition and directed that the petitioner shall continue to operate Fair Price Shop No. 0386103 in accordance with the court's earlier order dated 10 September 2024.
The respondent authorities were expressly not precluded from taking appropriate action, if warranted, strictly in accordance with law and the procedure under the Andhra Pradesh State Targeted Public Distribution System (Control) Order, 2018, after affording due opportunity of hearing to the petitioner. The court made clear that any such action must be taken independently, without being influenced by any observations made in the present order.
No order as to costs was made. All pending interlocutory applications in the writ petition, including IA No. 1 of 2024 filed under Section 151 CPC seeking suspension of the impugned order, were closed as a consequence.
Order
Writ Petition No. 19099 of 2024 was disposed of by Justice Ravi Cheemalapati of the High Court of Andhra Pradesh at Amaravati on 12 March 2026. The impugned order dated 3 August 2024 terminating the petitioner's dealership was set aside. The petitioner, Sri Durga Mahila Podupu Sangam Self Help Group, is to continue operating Fair Price Shop No. 0386103 at Gopalapatnam, Visakhapatnam City, in accordance with the interim order of 10 September 2024. The District Civil Supply Officer and other respondent authorities remain free to initiate fresh proceedings in conformity with the AP State Targeted Public Distribution System (Control) Order, 2018, after giving the petitioner a proper hearing.