Court says State cannot recall a justification certificate without reasons and must reconsider rent afresh for Sudha Agarwal’s godowns with a speaking order.
The Allahabad High Court has set aside orders fixing the rent of two private godowns used for the Public Distribution System (PDS) at Rs. 350 per 100 bags, holding that the State authorities acted arbitrarily, inconsistently, and without proper reasoning.
A division bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary was hearing a writ petition filed by Sudha Agarwal, owner of two godowns in Pratapgarh district. The petitioner challenged the rejection of her demand for enhanced rent and the recall of an earlier justification certificate dated 27.12.2017, which had recommended rent at Rs. 1,200 per 100 bags based on an official inquiry.
According to the court, the petitioner’s godowns had been taken on rent in 2003 and 2006, long before the cut-off date of 14.07.2015 mentioned in the Government Order dated 02.05.2018. The bench noted that in an earlier round of litigation, it had already directed the competent authority to first decide whether Clause 14 of the 2018 Government Order applied to the petitioner at all.
In the impugned order, the authority itself recorded that Clause 14 and Clause 15 were not applicable to the petitioner. However, the court found that despite this finding, the authority still relied on fresh justification certificates that were themselves based on the very same inapplicable policy to reduce the rent to Rs. 350 per 100 bags. The bench held that the State could not do indirectly what it had accepted it could not do directly.
The court also took serious exception to the recall of the 2017 justification certificate. It observed that the certificate had been issued after a proper administrative exercise, including a Tehsildar’s inquiry, an SDM report noting a rise in circle rates by up to 4.75 times, and a recommendation by the District Magistrate. The respondents, the bench said, failed to show any concrete factual or jurisdictional error justifying the withdrawal of that certificate.
Calling the impugned order non-speaking, the court said it contained no comparative data, market analysis, or reasoned basis for fixing rent at Rs. 350 per 100 bags, especially when the earlier official inquiry had found a steep rise in property values. The bench reiterated that reasons are the heartbeat of every administrative conclusion and that an order must stand or fall on the reasons recorded in it.
The court also accepted the petitioner’s contention that similarly situated godowns at Babaganj, Belkharnath, Sangipur and Kalakankar had allegedly received higher rent enhancement. Since this claim was not specifically rebutted by the State, the bench held that such differential treatment required examination under Article 14 of the Constitution, which prohibits arbitrary State action.
While quashing the orders, the High Court clarified that it would not itself determine the fair rent, as that task falls within the administrative domain. Instead, it remitted the matter to the Regional Food Controller/competent authority for fresh determination. The authority has been directed to decide the rent independently, without relying on Clause 14 of the 2018 Government Order, to consider the 2017 justification certificate and SDM report, to examine the petitioner’s claim of parity with similarly situated godowns, and to pass a reasoned speaking order within 12 weeks.
The court also left open the issues of GST and interest, allowing both sides to raise those points before the competent authority.
Bottom Line :
Rent fixation for private godowns hired by State for PDS - Where godowns were taken on rent prior to 14.07.2015, ceiling under Clause 14 of Government Order dated 02.05.2018 could not be applied - Authority having held said clause inapplicable could not indirectly rely upon same to reduce rent by recalling earlier justification certificate - Impugned orders fixing rent at Rs. 350 per 100 bags held self-contradictory, arbitrary and non-speaking - Matter remitted for fresh determination by reasoned order.
Statutory provision(s): Article 14, Article 226, Government Order dated 02.05.2018 (Clause 14, Clause 15, Clause 16, Clause 20)
Sudha Agarwal v. State of U.P., (Allahabad)(DB)(Lucknow) : Law Finder Doc id # 2985096
