[ High Court of Andhra Pradesh ]

Andhra Pradesh HC Sets Aside Fair Price Shop Dealer's Termination for Second Time, Cites Denial of Cross-Examination and Reasoned Findings

The High Court of Andhra Pradesh quashed a second termination order against a fair price shop dealer, finding the enquiry violated natural justice despite a prior court-directed remand.

Manaswi Singh — 27 July 2026 — 6 min read

The High Court of Andhra Pradesh, sitting at Amaravati, has set aside the termination of a fair price shop dealership for the second time in a matter of months, holding that the Revenue Divisional Officer, Penukonda, conducted the fresh enquiry in breach of the principles of natural justice. Justice Ravi Cheemalapati, sitting singly, found that the authority failed to furnish the cardholders' statements to the dealer in a meaningful manner, denied him the opportunity to cross-examine complainants, and issued a termination order without recording independent findings. The order, passed on 9 March 2026 in Writ Petition No. 6133 of 2026, remits the matter for a third enquiry with strict procedural safeguards.

The Dispute Before the High Court

The petitioner, M. Adinarayana, aged 53, was the temporary dealer of Fair Price Shop No. 1257060 at Kaggallu village, Hindupur Mandal, Sri Sathya Sai District. The Revenue Divisional Officer, Penukonda (respondent No. 2), first terminated his dealership by proceedings dated 29 November 2025 in Rc.No.2851/2025/C, on the ground of alleged irregularities.

Adinarayana challenged that termination before the same court. A coordinate bench allowed Writ Petition No. 34133 of 2025 on 8 December 2025, setting aside the November 2025 proceedings and directing respondent No. 2 to conduct a fresh enquiry within four weeks. The court specifically required the authority to consider the petitioner's explanation dated 10 November 2025 and the statements he had furnished regarding cardholders.

Respondent No. 2 issued a fresh show cause notice on 31 December 2025, received by Adinarayana on 2 January 2026. He submitted his detailed explanation on 20 January 2026 and attended the personal enquiry. Despite this, respondent No. 2 passed a fresh order on 30 January 2026, again terminating the dealership. That second termination is the order challenged in the present petition.

Grounds of Challenge

Sri N. Ranga Reddy, counsel for the petitioner, contended before the court that respondent No. 2 had not properly considered the explanation submitted on 20 January 2026. More specifically, the authority had not furnished the cardholders' statements to the petitioner in a manner that would allow him to disprove them, had not afforded him any opportunity to cross-examine the complainants, had not provided copies of all material relied upon, and had not recorded independent findings on the issues raised.

Counsel argued that the impugned order was passed contrary to law and in clear violation of the principles of natural justice, and that it failed to comply with the specific directions issued by the coordinate bench in the earlier writ petition.

The State, represented by Sri Vineeth Appasani, Assistant Government Pleader for Civil Supplies, placed on record a letter by the Revenue Divisional Officer dated 6 March 2026. The AGP contended that there was no illegality or procedural irregularity in the order. He pointed out that cardholders had appeared before respondent No. 2 on 7 January 2026 and submitted their statements, and that their earlier statements of 5 November 2025 were also considered. The authority found that the petitioner resided at Hindupur, approximately 6.5 km from the fair price shop, was not maintaining prescribed shop timings, and was not supplying essential commodities at the doorstep of cardholders above 65 years of age and those who are physically handicapped.

The AGP also raised an alternative remedy objection. He submitted that the petitioner had a right of appeal before the District Collector within 30 days under the APSTPDS (Control) Order, 2018, which had not been availed before approaching the High Court.

How the Bench Reasoned

Justice Cheemalapati first noted the undisputed baseline: the coordinate bench had already set aside the first termination and had imposed a specific obligation on respondent No. 2 to conduct a fair, proper and reasoned enquiry in compliance with its directions. That obligation was not merely directory.

On the procedural compliance question, the court found that the impugned order disclosed no indication of when the cardholders' statements were furnished to the petitioner. The material on record showed that those statements formed the basis of the termination, yet the petitioner was not given a meaningful opportunity to disprove them. No opportunity was afforded to cross-examine the complainants. The court held that when an adverse order is sought to be passed based on statements of third parties, the affected party must be afforded an opportunity to test the veracity of such statements by way of cross-examination, and that denial of such an opportunity amounts to violation of the principles of natural justice.

The court also found that the impugned order did not reflect proper consideration of the explanation submitted by the petitioner and appeared to have been passed in a mechanical manner, without recording independent findings on the issues raised and without demonstrating due application of mind.

Justice Cheemalapati drew support from the Division Bench decision in B. Manjula v. District Collector, reported at 2015(3) ALD 617, which laid down that an enquiry against a fair price shop dealer must include an opportunity of personal hearing, cross-examination of complainants in the presence of the dealer or counsel, and supply of all reports on which the authority proposes to rely. The Division Bench in that case had also cited Madhya Pradesh Industries Ltd. v. Union of India and Others, where the Supreme Court, while dealing with an order under Rule 55 of the A.P. Mineral Concession Rules 1960, held that the requirement to give reasons “introduces clarity and excludes or at any rate minimises arbitrariness.” The Division Bench further cited the Supreme Court's observation in G. Vallikumari v. Andhra Education Society and Others that recording and communicating reasons is a recognised facet of natural justice and that violation thereof vitiates the order concerned.

On the alternative remedy objection, the court held that existence of an alternative remedy is not an absolute bar to exercising jurisdiction under Article 226 of the Constitution of India, particularly where the impugned order is passed in violation of the principles of natural justice. Since the termination was vitiated on that ground, the court was inclined to exercise its writ jurisdiction.

The bench further observed that since the violation of natural justice was apparent on the face of the impugned proceedings, it was not necessary to call for a counter affidavit. Even if a counter were filed, the court noted, the outcome would remain the same. The court expressly reserved its opinion on the merits of the allegations against the petitioner.

Directions Issued

The court set aside the order dated 30 January 2026 passed by respondent No. 2 in Rc.No.2851/2025/C and remitted the matter for a fresh enquiry. The directions issued are specific:

The enquiry must be conducted strictly in accordance with law and in compliance with the principles of natural justice.
The petitioner shall be furnished with all material relied upon by the authority, including the statements of the cardholders.
The petitioner shall be afforded a reasonable opportunity of hearing.
If requested, the petitioner shall be given an opportunity to cross-examine the complainants.

No order as to costs was made. All pending interlocutory applications in the writ petition, including IA No. 1 of 2026 filed under Section 151 CPC, were closed as a consequence.

Outcome

Writ Petition No. 6133 of 2026 was allowed on 9 March 2026. The termination order dated 30 January 2026 passed by the Revenue Divisional Officer, Penukonda, is set aside. The matter is remitted to the Revenue Divisional Officer for a fresh enquiry with the safeguards specified above. The petitioner, M. Adinarayana, continues as temporary dealer of Fair Price Shop No. 1257060, Kaggallu village, pending the fresh enquiry.