Suspension Cannot Continue Indefinitely Without Concluding Inquiry Within 90 Days: Andhra Pradesh High Court Quashes Action Against Fair Price Shop Dealer

"Failure To Conduct Mandatory Inquiry Renders Suspension Arbitrary And Violative Of Natural Justice" – Andhra Pradesh High Court, presided by Justice Sumathi Jagada, setting aside the suspension of a Fair Price Shop dealer on the ground that the authorities failed to complete the inquiry within the 90-day period mandated by the Andhra Pradesh State Targeted Public Distribution System (Control) Order, 2018. Terming the action arbitrary, unlawful, and violative of natural justice, the Court directed the resumption of essential commodities to the petitioner’s shop and reinforced the legal sanctity of procedural timelines under the Control Order.

The petitioner, Menda Varada Rajulu, a permanent dealer of Fair Price Shop No. 0119013 located in Naira Village, Srikakulam District, challenged the suspension order dated 13.09.2024, which was issued following a surprise inspection on 09.07.2024. Authorities alleged a shortfall of 2,195 kg of rice and 30 kg of ragi, prompting a show-cause notice on 29.07.2024.

In his explanation dated 21.08.2024, the petitioner asserted that the shortages were due to previous mismanagement by another member of a Self-Help Group and reduced stock received from the Godown. Despite this explanation, the authorization was suspended without a hearing or inquiry, prompting the petitioner to invoke the writ jurisdiction of the High Court under Article 226 of the Constitution.

The Court was called upon to decide whether the suspension of a Fair Price Shop without holding and completing an inquiry within the statutory period is legally sustainable, and whether such suspension violates the principles of natural justice and the binding provisions under the 2018 Control Order.

Justice Sumathi Jagadam noted that: "Clause (vi) of the Control Order places a duty upon the appointing authority to hold an inquiry where the dealer denies the charges. The burden lies on the authority to prove the charges, and such an inquiry cannot be delegated."

Referring to Clause (vii), the Court emphasized: "The enquiry shall be completed as soon as possible but not later than ninety days from the date of suspension. After completion of enquiry, the appointing authority shall record reasons in respect of each charge and pass appropriate orders."

The Court found that although the suspension order was issued on 13.09.2024, no inquiry was completed even by 3rd July 2025, far beyond the 90-day outer limit, which expired on 12.12.2024. This failure, the Court held, vitiated the entire suspension action.

Relying on established precedent, the Court reiterated the principle laid down in Joint Collector, Kurnool and Others v. A. Neelima that: “Suspension cannot be allowed to continue indefinitely in the absence of a completed inquiry. The authority is under a strict obligation to conclude proceedings within the 90-day statutory period.”

The High Court categorically held that the suspension order was unsustainable in law, stating:

“From a review of the decision in C. Durga Srinivas Rao and others, it is clear that the respondents herein did not follow the mandatory provisions of the Control Order before issuing the suspension order.”

It further observed: “The impugned suspension order, dated 13.09.2024, clearly shows that the 90-day period had elapsed by 12.12.2024 without any conclusion of inquiry. Therefore, it must be set aside in terms of the Division Bench ruling in A. Neelima.”

The Court thus allowed the writ petition and issued the following direction: “The respondents are directed to supply the essential commodities to the petitioner’s Fair Price Shop No.0119013 on payment of necessary fees by him.”

The Court also closed all pending miscellaneous petitions and imposed no costs, focusing solely on the procedural illegality of the suspension.

This judgment marks a clear affirmation of procedural rigor under the Public Distribution regulatory framework. By striking down the suspension order for failure to adhere to mandatory inquiry timelines, the Andhra Pradesh High Court has underscored that administrative authorities cannot act arbitrarily, especially where livelihoods and essential service delivery are at stake.

The ruling affirms that “fairness in procedure is not a formality but a fundamental right”, and serves as a binding precedent for enforcing accountability under Clause (vi) and (vii) of the 2018 Control Order.

Date of Decision: 03 July 2025