J.S. Verma, J.
1. By a notice (Annexure A) dt. 26-10-1981, applications were invited for appointment of agents for the fair price shops in the 19 wards of Tikamgarh town. There was one such shop in each of the 19 wards. In pursuance. of this notice, two shops were allotted to a Consumer Co-operative Society and two other shops to the Co-operative Marketing Society (respondent 3), The remaining 15 shops were allotted to private individuals including the 12 petitioners as they were not required by any Co-operative Society. The order of allotment in favour of the petitioners was made on 28-11-1981 and Annexure-B is one such order. Admittedly, the Cooperative Societies, including respondent 3 had expressed in writing their unwillingness to take more than two shops each and it was for this reason, that after allotting two shops each to the two Societies or in all four shops to the Co-operative Societies, the remaining 15 shops, which were not wanted by any Co-operative Society, were allotted to private individuals. Agreements were executed by the private individuals, including the petitioners, as a result of the allotment made to them.
2. The petitioners were running the fair price grain shops so allotted to them, when, on 6-3-1982, without any prior notice or intimation, the allotment made to them was cancelled by the Food Officer, Tikamgarh. Annexures D-1 to D-12 are identical orders cancelling allotment of the shops given earlier to the petitioners. Aggrieved by this cancellation of the allotment made earlier to them, the petitioners have filed this petition for quashing the cancellation orders, Annexures D-1 to D-12, dt. 6-3-1982.
3. In the return filed on behalf of respondents 1 and 2 , it is admitted that 15 shops were allotted to private individuals because the two Co-operative Societies, including respondent 3, had expressed in writing their inability to run more than two shops each. It is, however, alleged that the allotment of shops to private individuals including the petitioners was on a purely temporary basis, which, was liable to cancellation, at any time without any prior notice. It is contended that such a power to cancel the allotment without any prior notice was available under Clause 14 of the agreement (Annexure-C) and, therefore, no grievance can be made by the petitioners.
4. Clause 14 of the agreement (Annexure-C), executed by the petitioners empowers the State Government of the Collector to cancel the allotment in the event of breach of any of the conditions and further, authorises the Officer authorised by the Government to withdraw the nomination of the allottee at any time. It, is on this power retained in Clause 14 as well as mention of the fact in the allotment order that the allotment was made temporarily that the learned Deputy Advocate General has relied to support the impugned cancellation orders.
5. Shri R. N. Singh, learned counsel for the petitioners, contended that there being admittedly no breach of any condition by the petitioners, the power of cancellation could not be exercised arbitrarily and unreasonably as it had been done. He argued that there can be no 'ad hocism' in functioning of the Government and the power of cancellation implies that it would not be exercised arbitrarily or unreasonably in negation of the rule of law. It is contended that an arbitrary exercise of power violates Article 14 of the Constitution and must be struck down for that reason alone. It was also contended that no doubt preference was to be given to a Co-operative Society according to the scheme at the time of allotment of a shop but this does not mean that after a Co-operative Society indicates its unwillingness, resulting in allotment of the shop to a private individual, that allotment can subsequently be cancelled to enable a fresh allotment in favour of a Co-operative Society, which may have changed its mind since then. For all these reasons, learned counsel for the petitioners contended that the order of cancellation must be quashed.
6. The first question is whether it is open to the authority to cancel an allotment made to a private individual simply because the Co-operative Society having initially declined the offer subsequently changes its mind and expresses its willingness to take the shop. The learned Deputy Advocate General referred to the scheme framed in 1981, which is a scheme of the Government as defined in Clause 2 (d) of the M. P. Foodstuffs (Distribution) Control Order, 1960 (1981 M. P. Law Times Pt. II at page 74), and contended that the object of the scheme is to promote co-operative movement and, therefore, whenever a Co-operative Society expresses its willingness to run such a shop, it is open to the authority to invoke Clause 14 of the agreement executed by the private individual and to cancel the allotment made to him and give the shop to the Co-operative Society. He referred particularly to Clause 4 of the Scheme. We are unable to accept this contention of the learned Deputy Advocate General.
7. In the first place, the object of the Scheme is primarily to ensure distribution of the foodstuffs at fair price through the government agency and not primarily to promote the co-operative movement. No doubt, in appointing agents through whom such fair price grain shops are to be run, in the first instance, preference is to be given to the Co-operative Societies. Clause 4 merely says that the first preference in allotting such shops is to be given to the Co-operative Societies and in case of inability of the Co-operative Society in the area to run such a shop, the allotment may be made to others. The Co-operative Societies contemplated are Consumer Co-operative Societies, as held by this Court in Madhya Pradesh Ration Vikreta Sangh v. State of M. P., 1981 MPLJ 528; and by the Supreme Court in M. P. Ration Vikreta Sangh Society v. State of M. P., AIR 1981 SC 2001, while affirming the High Court's decision. This does not, however, mean that an allotment made to a private individual after the Cooperative Society expresses its inability to run the fair price grain shop, is merely and ad hoc arrangement liable to be terminated at any time by the allotting authority. There is no such indication in the scheme which governs the allotment. Clause 4 of the scheme only indicates preference at the time of making the allotment but it does not indicate that the allotment made to a private individual in such a situation is merely an ad hoc arrangement till a Co-operative Society, which has initially declined to run the shop, changes its mind. There being nothing expressly stated in the scheme to support the respondents' contention of an ad hoc allotment, there is no reason to construe Clause 4 of the scheme to permit making an ad hoc allotment which can provide the basis for an arbitrary action.
8. The learned Deputy Advocate-General contended that no period having been specified in the agreement executed by the allottee, unless such a power to cancel the allotment at any time is upheld, it will mean that the allotment once made must continue till the allottee commits breach of any condition permitting cancellation of the allotment. It is sufficient to say that it is open to the State Government to specify a fixed period for the validity of the allotment and to provide for renewal thereafter in the manner considered proper. The State Government not having done so while framing the scheme or prescribing the form of agreement to be executed by the allottee, there is no reason to make such a grievance.
9. Clause 5 of the scheme requires execution of an agreement in the prescribed form after the allotment has been made. The agreement (Annexure-C) in which Clause 14 is relied on by the respondents, does not appear to be in the form prescribed as appended to the scheme printed in the M. P. Essential Commodities Manual by N.P. Tamboli and C.N. Jha, 1983 Edition. The blanket power contained in Clause 14 of the agreement (Annexure-C) does not appear to have been prescribed. This also indicates that such a power is not available after the allotment has been made. The agreement (Annexure-C) executed by the petitioners to the extent it is not in accordance with the prescribed form, cannot, therefore, bind the petitioners.
10. Clauses 11 and 14 of the prescribed form are significant. Clause 11 requires a prior notice and opportunity to show cause before any action detrimental to the agent, including cancellation of the agreement, is taken. Clause 14 provides for termination of the agreement by either side giving 15 days written notice. These clauses indicate that the scheme does not contemplate any abrupt or arbitrary action to terminate the agreement made after the allotment. No doubt, there is no right in a person to be appointed an agent under this scheme made for distribution of foodstuffs to consumers at fair price through the government agency, except to be considered alone with equals. However, once a person is chosen for appointment and an allotment made to him, he does acquire at least some vestige of a right which excludes cancellation of allotment in an arbitrary manner. It is reasonable to expect that allotment once made will not be cancelled except in the manner prescribed and then too on a relevant ground and not arbitrarily.
11. Assuming, there is a power to cancel the allotment in situations other than breach of any condition by the allottee, the ground of cancellation should be relevant and not extraneous. In the present case, the only ground for cancelling the allotment is that the Co-operative Society (respondent No. 3), which had initially declined to run more than the two shops allotted to it has subsequently changed its mind after allotment made to the private individuals. Unless it be held that Clause 4 permits an ad hoc arrangement in case the allotment is to a private individual, this is not a relevant ground by itself to permit cancellation of the allotment after it is made. It is so because Clause 4 merely contemplates first preference to Co-operative Societies at the time of allotment and no more. If the intention was merely to make an ad hoc allotment to private individuals, then the scheme would have said so and not merely spoken of first preference only to the Co-operative Society at the time of making the allotment taking a certificate in writing from the Co-operative Society expressing its inability to run the shop to enable allotment to another person. In our opinion, the requirement of first preference to a Co-operative Society in Clause 4 comes to an end when the allotment has been made and it does not survive thereafter to permit cancellation en that ground. In the present case, cancellation has not been made in the prescribed manner and the only ground on which it is based is not relevant. The cancellation is, therefore, liable to be quashed.
12. It may be useful to refer also to Clause 13 of the Scheme which provides for penalties and lays down the requirements of a show cause notice to the allottee before cancellation of the allotment in case of breach of any condition or irregularity in running the shop. Clauses 11 and 14 in the prescribed form of agreement have already been referred. If the learned Deputy Advocate-General is right in his contention, then even in such a situation, the requirement of giving opportunity to the allottee to show cause can be easily circumvented by cancelling the allotment resorting to the blanket power claimed under Clause 14 of the agreement (Annexure-C), assuming it to be available. It would be illogical to take that view. This too indicates that the power in Clause 14 of the agreement, assuming it to be available, is not a blanket or unfettered power capable of being exercised arbitrarily or capriciously.
13. The learned Deputy Advocate also contended that the petition is merely against breach of a contractual right for which Article 226 of the Constitution cannot be invoked. We are unable to accept this contention. The petition is based on an arbitrary action of the State amounting to violation of petitioners' right under Article 14 of the Constitution. This alone is sufficient to reject the contention,
14. As a result of the aforesaid discussion, it must be held that the cancellation of the allotment by order (Annexures D-1 to D-12) dt. 6-3-1982 is invalid. These cancellation orders are, therefore, quashed. The petition is allowed with costs. Counsel's fee Rs. 100/-(Rupees One hundred) only. Security amount, if any, be refunded to the petitioners.