RAM KUMAR VERSUS STATE OF UTTAR PRADESH AND ORS

RAM KUMAR  VERSUS STATE OF UTTAR PRADESH AND ORS

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4258 OF 2022
RAM KUMAR ...APPELLANT(S)
VERSUS
STATE OF UTTAR PRADESH
AND ORS. ...RESPONDENT(S)
J U D G M E N T
B.R. GAVAI, J.
1. This appeal challenges the judgment and order of the High
Court of Judicature at Allahabad dated 21st February 2019
thereby allowing the writ petition filed by respondent No. 9
herein, setting aside the order dated 18th November 2017
passed by the Deputy Collector, Rasoolabad cancelling the fair
price shop licence of respondent No. 9 and the order dated 20th
July 2018 passed by the Additional Commissioner (Judicial),
2
Kanpur Division, Kanpur, (hereinafter referred to as “the
Appellate Authority”) dismissing the appeal of respondent No.9
and restoring the Fair Price Shop licence to the respondent
No.9 forthwith.
2. The facts, in brief, giving rise to the present appeal are as
under:
2.1 Respondent No.9 herein-Kiran Devi (the original writ
petitioner) was granted a licence for running a fair price shop at
Gram Panchayat Anta, Tehsil Rasoolabad, District Kanpur
Dehat. Various complaints were received by the Sub-Divisional
Officer, Rasoolabad, District Kanpur Dehat (hereinafter referred
to as “the SDO”), with regard to malpractices committed by the
said fair price shop dealer. As such, a site inspection of the fair
price shop was done on 3rd June 2017 through the Regional
Supply Inspector. In the site inspection also, various
irregularities and malpractices were found in the running of the
said fair price shop. As such, a show cause notice came to be
issued to respondent No.9 by the SDO on 7th July 2017.
Initially, on the date fixed, respondent No.9 did not file her
3
explanation. Subsequently, she submitted her explanation on
16th August 2017.
2.2 Thereafter, an inquiry was conducted by the SDO.
Various statements were recorded. At the conclusion of the
inquiry, the SDO found the charges to be proved and as such,
vide order dated 18th November 2017, cancelled the Fair Price
Shop licence of respondent No.9.
2.3 Being aggrieved by the order passed by the SDO,
respondent No.9 carried an appeal to the Appellate Authority.
The said appeal also came to be dismissed by the Appellate
Authority vide order dated 20th July 2018.
2.4 It is to be noted that, in the meantime, licence to run the
said fair price shop was granted in favour of the present
appellant-Ram Kumar vide order dated 15th May 2018. This
was done on the basis of the decision taken by the Tehsil Level
Selection Committee dated 19th April 2018. This fact was
specifically noted in the order of the Appellate Authority dated
20th July 2018.
4
2.5 Being aggrieved by the aforesaid order passed by the
Appellate Authority, respondent No.9 preferred a writ petition
before the High Court of Judicature at Allahabad being Civil
Misc. Writ Petition No. 29832 of 2018.
2.6 The High Court came to a finding that the cancellation of
the Fair Price Shop licence of respondent No.9 was done
without following the full-fledged inquiry process and, therefore,
relying on the Full Bench decision of the Allahabad High Court
in the case of Puran Singh vs. State of U.P. and others1,
allowed the writ petition as aforesaid.
2.7 Being aggrieved thereby, the present appeal.
3. We have heard Mr. Udayaditya Banerjee, learned counsel
appearing on behalf of the appellant and Mr. S.R. Singh,
learned Senior Counsel appearing on behalf of respondents
Nos. 1 to 7, Mr. Abhinav Agrawal, learned counsel appearing on
behalf of respondent No.8 and Mr. Irshad Ahmad, learned
counsel appearing on behalf of respondent No.9.

1
(2010) 2 UPLBEC 947 = 2010 SCC OnLine All 2707
5
4. Mr. Udayaditya Banerjee, learned counsel, submits that
though respondent No.9 was very well aware that during the
pendency of the appeal before the Appellate Authority, the
licence to run the fair price shop was allotted to the present
appellant, she has not only suppressed the said fact in the writ
petition but has also made a statement which is totally false to
her knowledge. It is submitted that, on this short ground of
non-joinder of the appellant in the proceedings before the High
Court, the present appeal deserves to be allowed. He relies on
the judgment of this Court in the case of Pawan Chaubey vs.
The State of Uttar Pradesh & Ors.2 in support of his
submission that the appellant being the subsequent allottee
was a necessary party and as such, the impugned judgment
and order of the High Court, without impleading him as a
party, is not sustainable in law.
5. Mr. Irshad Ahmad, learned counsel, on the contrary,
submits that this Court in the case of Poonam vs. State of

2 Civil Appeal No.3668 of 2022, decided on May 6, 2022
6
Uttar Pradesh and others3 has held that an allottee during
the pendency of the legal proceedings at the instance of the
earlier allottee is not a necessary party and as such, the
impugned judgment and order, which is passed without
impleading the appellant cannot be assailed on that ground.
6. He also relies on the judgment of this Court in the case of
Mumbai International Airport Private Limited vs. Regency
Convention Centre and Hotels Private Limited and others4
in support of the proposition that the relief could have been
granted in the absence of the appellant and as such, he was not
a necessary party before the High Court.
7. Mr. Irshad Ahmad, learned counsel, also submits that the
proceedings against respondent No.9 were initiated on account
of political rivalry. He submits that in view of this, no
interference is warranted in the present matter.
8. This Court in the case of Mumbai International Airport
Private Limited (supra) had an occasion to consider as to who

3
(2016) 2 SCC 779
4
(2010) 7 SCC 417
7
is a necessary party to the proceedings. It will be relevant to
refer to paragraph 15 of the said judgment, which reads thus:
“15. A “necessary party” is a person who
ought to have been joined as a party and
in whose absence no effective decree
could be passed at all by the court. If a
“necessary party” is not impleaded, the
suit itself is liable to be dismissed. A
“proper party” is a party who, though not
a necessary party, is a person whose
presence would enable the court to
completely, effectively and adequately
adjudicate upon all matters in dispute in
the suit, though he need not be a person
in favour of or against whom the decree is
to be made. If a person is not found to be
a proper or necessary party, the court
has no jurisdiction to implead him,
against the wishes of the plaintiff. The
fact that a person is likely to secure a
right/interest in a suit property, after the
suit is decided against the plaintiff, will
not make such person a necessary party
or a proper party to the suit for specific
performance.”
9. It could thus be seen that a necessary party is a person in
whose absence no effective decree could be passed by the
Court. It has been held that if a “necessary party” is not
impleaded, the suit itself is liable to be dismissed.
8
10. Another aspect that needs to be taken into consideration
is that, a Full Bench of the Allahabad High Court in the case of
Smt. Urmila Devi vs. State of U.P. & 6 others5, had an
occasion to consider an issue as to whether, upon suspension
or cancellation of a licence of a Fair Price Shop, it was
permissible for the State to make an interim or temporary
arrangement by the appointment of a new fair price shop
holder. The Full Bench of the Allahabad High Court held that
the view taken by the Division Bench of the said High Court in
the case of Jagannath Upadhyay vs. State of U.P., through
Principal Secretary, Food & Civil Suppies6 that till a
statutory appeal is decided, the fair price shop should not be
allotted on an ad hoc basis and should be attached only to
some other neighbouring fair price shop, did not lay down a
correct position of law. It has been held that the State
Government was empowered to make a regular allotment
during the pendency of the appeal filed by the earlier allottee
against the cancellation or suspension of the licence.

5 2015 SCC OnLine All 3910
6 Misc. Bench No.10373 of 2011
9
11. It is to be noticed that in the present case, during the
pendency of the appeal before the Appellate Authority, on a
recommendation of the Tehsil Level Selection Committee dated
19th April 2018, the present appellant, through regular
allotment, was appointed as Fair Price Dealer on 15th May
2018.
12. Insofar as the judgment of this Court in the case of
Poonam (supra), on which strong reliance is placed by Mr.
Irshad Ahmad, learned counsel, is concerned, this Court in the
case of Pawan Chaubey (supra) had an occasion to consider
the aforesaid judgment in the case of Poonam (supra). This
Court in the case of Pawan Chaubey (supra) also noticed its
earlier decision in the case of Sumitra Devi vs. State of U.P.
& Ors.
7 Noticing both these judgments, this Court observed
thus:
“Our attention has been drawn to
the judgment of this Court in Poonam vs.
State of Uttar Pradesh & Ors. reported in
(2016) 2 SCC 779. Relying on the
aforesaid judgment, learned counsel

7 Civil appeal Nos. 9363-9364 of 2014, decided on 8th October 2014.
10
appearing 3 on behalf of the Respondent
No.4 contended that the appellant need
not be heard. She had no right or locus to
be impleaded.
In Poonam (supra), the subsequent
allottee had actually been heard at all
stages. What the Court held was that the
subsequent allottee had been trying to
establish her right independently. She
contended that she had an independent
legal right. This Court found that it was
extremely difficult to hold that she had
an independent legal right.
In Sumitra Devi vs. State of UP &
Ors. (Civil Appeal Nos. 9363-9364 of
2014), a Bench of coordinate strength of
this Court comprising Hon’ble Ms.
Justice Ranjana Prakash Desai and
Hon’ble Mr. Justice N.V. Ramana (As His
Lordship then was) passed an order dated
08.10.2014, the relevant parts whereof
are extracted hereinbelow:
“The appellant being the
subsequent allottee filed an
application for impleadment in
the writ petition on
17.10.2008. That application
was neither entertained nor
allowed.
xxx xxx xxx
Learned counsel for the
appellant urged and, in our
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opinion, rightly that the High
Court should have heard the
appellant before restoring the
licence of respondent no.6 as
the appellant was the
subsequent allottee and his
rights were affected by the
restoration of licence of
respondent no.6. We are
entirely in agreement with
learned counsel for the
appellant. In our opinion, the
High Court could not have
restored the licence of
respondent no.6 without
hearing the appellant as his
rights were certainly affected
by such order.”
Even if a subsequent allottee does
not have an independent right, he/she
still has a right to be heard and to make
submissions defending the order of
cancellation.
It is true that the order of
appointment of the appellant reads that
the order is subject to the outcome of the
proceedings pending in court. This does
not disqualify the appellant from
appearing and contesting the proceedings
by trying to show that the order of
cancellation had correctly been passed
against the Respondent No.4.”
12
13. It could thus be seen that this Court had held that, even if
a subsequent allottee does not have an independent right,
he/she still has a right to be heard and to make submissions
defending the order of cancellation.
14. It is further to be noticed that in the said case, i.e., Pawan
Chaubey (supra), the order of appointment of the appellant
therein was subject to the outcome of the proceedings pending
in court. The case at hand stands on a much better footing.
The appellant herein had been selected by the Tehsil Level
Selection Committee in its meeting dated 19th April 2018 and
thereafter, he was appointed as Fair Price Dealer vide order of
the Competent Authority dated 15th May 2018, on a regular
basis.
15. In this background, we find that the appellant was a
necessary party to the proceedings before the High Court. The
present appeal deserves to be allowed on this short ground.
However, there is another more serious ground on which the
present appeal deserves to be allowed.
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16. The Appellate Authority in its order dated 20th July 2018
has categorically observed thus:
“At present, new dealer Sh. Ram Kumar
Singh s/o Chhote Singh has been
approved as Fair Price Dealer, village
Anta Tehsil Rasoolabad, Kanpur Dehat
vide District Magistrate’s order dated
15.05.2018. In the end, prayer has been
made that the appeal being devoid of
merits, may be dismissed.”
17. It has further been observed thus:
“As per the proposal made by Block
Development Officer in the public
interest, an open meeting was called on
………2018 for the selection of Fair Price
Dealer at Gram Panchayat, Anta, in
which the name of Sh. Ram Kumar Singh
s/o Sh. Chhote Singh, resident of Gram
Panchayat Anta, Tehsil Rasoolabad,
Kanpur Dehat was taken into
consideration and after discussion, in
view of the decision taken by the Tehsil
Level Selection Committee, dated 19th
April 2018, as per the order of District
Magistrate, Rasoolabad, Kanpur Dehat
dated 15.05.2018, Sh. Ram Kumar Singh
S/o Sh. Chhote Singh, resident of Gram
Panchayat Anta, Tehsil Rasoolabad,
Kanpur, Dehat has been appointed as
new Kotedar in accordance with the
orders issued by the Dy. Commissioner
(Food) Kanpur Division and Hon’ble High
Court, Allahabad.”
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18. It could thus be seen that respondent No. 9 was very well
aware that during the pendency of the proceedings, the
appellant was appointed as a Fair Price Dealer on 15th May
2018. The order of the Appellate Authority has been passed on
20th July 2018. Even this being the position, respondent No.9
has been bold enough to aver thus in the memo of the writ
petition:
“33. That it is also noteworthy to
mention here that during the pendency of
the Fair Price Shop, no third party
allotment was made and as per the
direction of this Hon’ble Court, the shop
of the petitioner was attached to another
Fair Price Shop Holder.”
19. It could thus be seen that, though respondent No.9 was
very well aware that during the pendency of the proceedings
before the Appellate Authority, an allotment was done in favour
of the present appellant, she has averred in her writ petition
that no third party allotment was made. She has further gone
on to state that, as per the directions of the High Court, the fair
price shop of respondent No.9 was attached to another fair
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price shop holder. The statement is factually incorrect to the
knowledge of respondent No.9. The same has been reiterated
in the Ground thus:
“N. Because during the pendency of the
Fair Price Shop, no third party allotment
was made as per the direction of this
Hon’ble Court, the shop of the petitioner
was attached to another Fair Price Shop
Holder.”
20. It is thus clear that respondent No.9 has not only
suppressed the fact about the subsequent allotment of the fair
price shop to the appellant herein but has also tried to mislead
the High Court that the fair price shop of respondent No.9 (the
writ petitioner before the High Court) was attached to another
fair price shop holder.
21. This Court, in the case of S.P. Chengalvaraya Naidu
(Dead) By LRs. Vs. Jagannath (Dead) by LRs and others8
has held that non-disclosure of the relevant and material
documents with a view to obtain an undue advantage would
amount to fraud. It has been held that the judgment or decree

8
(1994) 1 SCC 1
16
obtained by fraud is to be treated as a nullity. We find that
respondent No.9 has not only suppressed a material fact but
has also tried to mislead the High Court. On this ground also,
the present appeal deserves to be allowed.
22. In the result, the appeal is allowed. The impugned order
of the High Court dated 21st February 2019 is quashed and set
aside. The order dated 18th November 2017 passed by the
Deputy Collector, Rasoolabad cancelling the Fair Price Shop
licence of respondent No. 9 and order dated 20th July 2018
passed by the Additional Commissioner (Judicial), Kanpur
Division, Kanpur dismissing the appeal of respondent No.9 are
affirmed.
23. Pending applications, if any, shall stand disposed of. No
order as to costs.
....................J.
[B.R. GAVAI]
..........................J.
[C.T. RAVIKUMAR]
NEW DELHI;
SEPTEMBER 28, 2022.

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