Facts of the Case
In this case, various writ petitions were filed by the Petitioners challenging the UP-Government’s Order dated 07.07.2020. This order mandated to give preference to self-help groups in the allotment of fair price shops thereby excluding all other categories of persons. In view of this, three types of issues were raised in various petitions before the Court. The first issue pertained to whether for the grant of licenses for carrying out the objects of Public Distribution System, it was the government order dated 5.8.2019 which was to operate or the so-called supplementary government order dated 7.7.2020 running in conflict with the earlier government order occupying the field and as to whether the impugned government order stood the tests of Article 14 of the Constitution of India and did not offend the mandate of Section 12 (2)(e) of the Food Security Act, 2013. Secondly, whether the contemplation and enforcement of exclusive preference in favour of self-help groups utilizing the impugned government order that too by side-tracking the role of Gaon Sabhas for passing a resolution on the principle of majority vote was not in violation of the mandate of Article 14 read with Article 19(1)(c) of the Constitution of India as well as the relevant statute. Thirdly, whether a Self-help group without having a juristic character would nevertheless be eligible and would fall within the scope of a public body or public institution for allotment of fair price shops in the State of U.P.
Arguments raised before the Court
Mr Sudhir Pandey, the Learned Counsel of the Petitioner submitted that the Public Distribution System in the rural areas falls within the domain of U.P. Panchayat Raj Act, 1947, and insofar as the establishment of fair price shops in the rural areas was concerned, the Central and the State Government both in the exercise of the powers conferred under Section 3 of Essential Commodities Act, have issued Control Order in the year 2015 and 2016. The Control Orders were augmented by the Government order issued on 5.8.2019. The Control Orders laid down a complete mechanism for assessing the eligibility of persons and carrying out the selection process for allotment of fair price shops. Further, he added that once the State Government, by undertaking its composite legislative exercise, devolved the selection process of dealers upon the Gaon Sabhas to strengthen the Public Distribution System, it was thereafter impermissible for the executive authority of the State to act contrary to the object of local self-governance. He said that the Government Order dated 7.7.2020 seeking to oust the role of Gram Sabhas defeated the purpose of the 73rd Amendment made in the Constitution of India apart from conflicting with the Government Order dated 5.8.2019 occupying the field. He further submitted that whatever was decentralized by the State in the spirit of Article 243-A and 243-G read with Part-IV of the Constitution of India cannot be frustrated without providing for a stronger reform executable by the third tier of governance itself. It was also submitted that by the introduction of a self-help group in this system the entire reservation has been completely removed.
Learned counsel for the State asserted that any Self-help group comprising a larger number of individuals belonging to Scheduled Caste would qualify the group as ‘Scheduled Caste Group’ for implementation of reservation policy.
Justice AR Masoodi observed that the impugned Government order dated 07.07.2020 defeated the very object and purpose of Article 243-A together with Article 243-G of the Constitution of India when read with Section-15(xxix) of the U.P. Panchayat Raj Act, 1947. Further, Articles 14 and 19(1)(c) of the Constitution of India were referred to. Accordingly, the Court observed that the reformation of the selection process utilizing the impugned government order was not only contrary to the own policy of the State but was wholly violative of Article 14 and 19(1(c) of the Constitution of India. The Court further took note of the government order dated 14.1.2021 whereby the State Government while reiterating the enforcement of government order dated 5.8.2019 clarified that self-help groups would also be eligible for participation in the selection process of fair price shop dealership but to apply the rule of preference exclusively in terms of government order dated 7.7.2020 was certainly unconstitutional. Moreover, the Court stated that the right to food is a fundamental right and no one should die of hunger and thus, the Court would be failing in its duty if it failed to notice the predicament of underprivileged people during the pandemic. Therefore, the Court held that the operation of the impugned Government order standing in conflict with the subsisting government order dated 5.8.2019 was not only inconsistent but also violative of Article 14 of the Constitution of India, hence liable to be struck down.
Coming to the next issue, the Court noted that the State Government in the counter-affidavits filed has nowhere stated as to how restricting the zone of eligibility to the self-help groups alone would be just, reasonable or fair and would not offend the mandate of equality embodied under Article 14 of the Constitution of India which again was a fundamental rule of governance. In view of this, the Court observed that the court was dealing with a controversy that involved the welfare of people at the village level. Raising the standard of nutrition cum living of rural population through the distribution of food grains was the duty for which the monetary support was owned by the State out of taxpayers’ money and was thus a state largesse. The Court further said that the supply of food grains at the subsidized rates to alleviate poverty was a lofty object but the same cannot be achieved unless there was the decentralization of the primary functions to the third tier of governance at the grass-root level. An effective and prompt mechanism of redressal of grievances at the local level coupled with legal service was also a condition precedent to actualize the purpose of the law.
Further, the Court observed that the reservation for various categories of persons being applicable in the matter of allotment of fair price shops further emphasized individual identity within the local limits of the village. The impugned Government order, surprisingly, brought altogether a novel identity to the ‘Self-help groups’. As such the Court held that the impugned government order undoubtedly was violative of Article 14 of the Constitution of India, once it excluded the participation of eligible village residents and other juristic persons such as cooperative societies or Gram Panchayats at par with the Self-help Groups.
Further, the third issue was raised in which the Court observed that the constitution of Self-help Groups as postulated in Section 12(2)(e) was not ordinary. A Self-help Group must qualify the standards of a juristic person for its existence and identity both so that there was no difficulty to fix accountability in the matter of irregularities or dereliction of duty coming to the notice of the State. This did not suggest that the Self-help Groups are ineligible but what the law aimed at was an accountable Self-help Group that had a legal existence in the eye of the law, i.e., a body, which can sue and be sued besides having a functional identity above that of an individual.
The Court declared the impugned government order as null and void being ultra vires to Article 14 of the Constitution of India and beyond the scope of Section 12(2)(e) of the National Food Security Act, 2013. Any action in pursuance thereof was declared illegal and subject to reconsideration in terms of the government order dated 5.8.2019 and other supplementary government orders for finalizing the establishment of fair price shops in accordance with the law. It was further directed that the preference, if any, to the public bodies or public institutions shall be admissible only in a situation of deadlock i.e., equal voting by the villagers partaking in the Gaon Sabha meeting scheduled as per the procedure prescribed under the government order dated 5.8.2019 or the law applicable in this behalf.
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