Forgery Finding Without Expert Opinion Cannot Cancel Fair Price Shop, Rules Uttarakhand High Court

The Uttarakhand High Court quashed the cancellation of a fair price shop dealer's agreement, holding that a forgery finding based solely on the Panchayat Secretary's denial, without any handwriting expert opinion, is unsustainable.

The High Court of Uttarakhand at Nainital has quashed the cancellation of a fair price shop dealer's agreement and directed restoration of his shop, after finding that the authorities recorded a finding of forgery without obtaining any handwriting expert opinion or conducting any objective verification of the disputed signatures. Justice Pankaj Purohit, sitting singly, allowed Writ Petition Misc. Single No. 1165 of 2022 filed by Vinod Kumar, a fair price shop dealer from Village Naitwala Saidabad, Block Laksar, District Haridwar. The court held that a forgery finding carries serious civil and criminal consequences and cannot rest on the unilateral denial of signatures by the Panchayat Secretary alone, particularly when the dealer had specifically contested the allegation and produced supporting documents.

The Dispute Before the Court

Vinod Kumar operated a fair price shop in Village Naitwala Saidabad, Block Laksar, District Haridwar. Proceedings against him began when an Administrative Committee meeting was convened on 22 October 2020, where allegations were considered that he had not been properly maintaining the stock register and consumption certificates and that signatures on those documents were forged. The Committee recommended cancellation of his dealership and suspension of his fair price shop.

A Gram Sabha open meeting was then held on 24 November 2020, which passed Resolution No. 4 recommending cancellation of the petitioner's fair price shop agreement. The proposal was forwarded to the District Magistrate, Haridwar. A show-cause notice followed on 9 February 2021. Kumar replied on 30 July 2021, denying all allegations and asserting that the signatures on the stock registers and consumption certificates were genuine. He also produced consumption certificates bearing the signatures of the Panchayat Secretary and the Village Pradhan in support of his defence.

An inquiry was conducted through the Block Development Officer/Assistant Development Officer (Panchayat), Laksar. The inquiry report dated 25 March 2021 found discrepancies in the signatures and concluded that irregularities had been committed. Relying on that report, the District Magistrate, Haridwar passed an order on 6 September 2021 cancelling the fair price shop agreement with immediate effect.

Kumar preferred Appeal No. 1 of 2021-22 before the Commissioner, Garhwal Division, Dehradun. The appellate authority dismissed the appeal by order dated 21 March 2022 and affirmed the cancellation. He then filed the present writ petition challenging the Gram Sabha resolution, the cancellation order, and the appellate order.

Arguments Raised by the Petitioner

Counsel for the petitioner, Mr. Tapan Singh, advanced several grounds. He argued that the proceedings were illegal and contrary to the procedure prescribed under the Government Order dated 15 October 2005. He pointed out that no ration card holder had ever complained about the distribution of essential commodities and that the proceedings were initiated solely on the allegations of the Panchayat Secretary.

On the Gram Sabha resolution, counsel referred to Section 3(E) of the Uttarakhand Panchayati Raj Act, 2016, contending that the proceedings did not disclose fulfilment of the statutory quorum, and therefore the recommendation for cancellation could not have been acted upon. He also questioned the composition of the Administrative Committee and the manner in which the recommendation was made.

A central argument was that the authorities concluded the signatures were forged without obtaining any handwriting expert opinion or conducting any scientific examination. Counsel submitted that the mere denial of signatures by the Panchayat Secretary could not constitute sufficient proof of forgery, especially when the petitioner had produced consumption certificates bearing the signatures of both the Panchayat Secretary and the Village Pradhan.

It was also contended that the inquiry was conducted by an authority not competent under the Government Order dated 15 October 2005, as the Block Development Officer/Assistant Development Officer (Panchayat) lacked jurisdiction to conduct such an inquiry. Counsel further argued that reliance on earlier instances of suspension was misconceived, as those orders had either been revoked or set aside by competent authorities.

The State's Defence

Mr. B.S. Koranga, Brief Holder for the State, submitted that the proceedings were undertaken strictly in accordance with law after affording adequate opportunity of hearing. He contended that complaints regarding irregularities were received in the village, the Administrative Committee conducted an inquiry, and the Gram Sabha unanimously resolved in its open meeting on 24 November 2020 to recommend cancellation.

On the forgery question, the State submitted that the signatures on the stock register and consumption certificates differed from the admitted signatures of the Panchayat Secretary, who specifically denied the disputed signatures. The inquiry report recorded findings of irregularities on that basis, and the District Magistrate rightly concluded that the petitioner had violated the conditions governing operation of the fair price shop.

The State denied any lack of quorum or procedural irregularity in the Gram Sabha proceedings and disputed the petitioner's objection regarding the competence of the inquiry officer, submitting that the inquiry was conducted through departmental machinery under the directions of the competent authority. It was also argued that the petitioner had a history of irregularities, having faced suspension proceedings on earlier occasions. Accordingly, the State submitted that no ground for interference under Article 226 of the Constitution of India was made out.

How the Court Reasoned

Justice Pankaj Purohit identified the principal allegation as the alleged use of forged signatures on the stock registers and consumption certificates. On examining the impugned orders, the court found that the finding of forgery had essentially been recorded on the basis of the Panchayat Secretary's denial of the signatures. Neither the inquiry officer nor the authorities concerned undertook any objective verification of the disputed signatures, nor was any expert opinion obtained before arriving at the conclusion of forgery.

The court observed that a finding of forgery carries serious civil consequences as well as criminal implications and therefore cannot be sustained merely on the basis of assumptions or unilateral assertions. This was particularly so when the petitioner had specifically disputed the allegation and asserted the genuineness of the signatures. In the absence of any cogent material establishing the allegation of forgery, the court held that the very foundation of the impugned action became unsustainable.

The court also noted that the appellate authority had failed to address this fundamental infirmity while affirming the District Magistrate's order. The Commissioner, Garhwal Division, had an opportunity to correct the error but did not engage with the absence of any expert or objective verification before upholding the cancellation.

On that basis, the court concluded that the cancellation order dated 6 September 2021 and the appellate order dated 21 March 2022 could not be sustained in law. The court did not separately address the quorum challenge under Section 3(E) of the Uttarakhand Panchayati Raj Act, 2016, or the competence of the inquiry officer, as the forgery finding alone was sufficient to render the impugned action unsustainable.

Order

The writ petition was allowed. The order dated 6 September 2021 passed by the District Magistrate, Haridwar, and the order dated 21 March 2022 passed by the Commissioner, Garhwal Division, Dehradun, were quashed. The respondents were directed to restore the fair price shop of the petitioner and permit him to operate it, subject to there being no other legal impediment. Pending applications, if any, were disposed of.