1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4258 OF 2022

RAM KUMAR ...APPELLANT(S)

VERSUS

STATE OF UTTAR PRADESH

AND ORS. ...RESPONDENT(S)

J U D G M E N T

B.R. GAVAI, J.

1. This appeal challenges the judgment and order of the High

Court of Judicature at Allahabad dated 21

st February 2019

thereby allowing the writ petition filed by respondent No. 9

herein, setting aside the order dated 18

th November 2017

passed by the Deputy Collector, Rasoolabad cancelling the fair

price shop licence of respondent No. 9 and the order dated 20

th

July 2018 passed by the Additional Commissioner (Judicial),

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Kanpur Division, Kanpur, (hereinafter referred to as “the

Appellate Authority”) dismissing the appeal of respondent No.9

and restoring the Fair Price Shop licence to the respondent

No.9 forthwith.

2. The facts, in brief, giving rise to the present appeal are as

under:

2.1 Respondent No.9 herein-Kiran Devi (the original writ

petitioner) was granted a licence for running a fair price shop at

Gram Panchayat Anta, Tehsil Rasoolabad, District Kanpur

Dehat. Various complaints were received by the Sub-Divisional

Officer, Rasoolabad, District Kanpur Dehat (hereinafter referred

to as “the SDO”), with regard to malpractices committed by the

said fair price shop dealer. As such, a site inspection of the fair

price shop was done on 3

rd June 2017 through the Regional

Supply Inspector. In the site inspection also, various

irregularities and malpractices were found in the running of the

said fair price shop. As such, a show cause notice came to be

issued to respondent No.9 by the SDO on 7

th July 2017.

Initially, on the date fixed, respondent No.9 did not file her

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explanation. Subsequently, she submitted her explanation on

16

th August 2017.

2.2 Thereafter, an inquiry was conducted by the SDO.

Various statements were recorded. At the conclusion of the

inquiry, the SDO found the charges to be proved and as such,

vide order dated 18

th November 2017, cancelled the Fair Price

Shop licence of respondent No.9.

2.3 Being aggrieved by the order passed by the SDO,

respondent No.9 carried an appeal to the Appellate Authority.

The said appeal also came to be dismissed by the Appellate

Authority vide order dated 20

th July 2018.

2.4 It is to be noted that, in the meantime, licence to run the

said fair price shop was granted in favour of the present

appellant-Ram Kumar vide order dated 15

th May 2018. This

was done on the basis of the decision taken by the Tehsil Level

Selection Committee dated 19

th April 2018. This fact was

specifically noted in the order of the Appellate Authority dated

20

th July 2018.

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2.5 Being aggrieved by the aforesaid order passed by the

Appellate Authority, respondent No.9 preferred a writ petition

before the High Court of Judicature at Allahabad being Civil

Misc. Writ Petition No. 29832 of 2018.

2.6 The High Court came to a finding that the cancellation of

the Fair Price Shop licence of respondent No.9 was done

without following the full-fledged inquiry process and, therefore,

relying on the Full Bench decision of the Allahabad High Court

in the case of Puran Singh vs. State of U.P. and others

1,

allowed the writ petition as aforesaid.

2.7 Being aggrieved thereby, the present appeal.

3. We have heard Mr. Udayaditya Banerjee, learned counsel

appearing on behalf of the appellant and Mr. S.R. Singh,

learned Senior Counsel appearing on behalf of respondents

Nos. 1 to 7, Mr. Abhinav Agrawal, learned counsel appearing on

behalf of respondent No.8 and Mr. Irshad Ahmad, learned

counsel appearing on behalf of respondent No.9.

1

(2010) 2 UPLBEC 947 = 2010 SCC OnLine All 2707

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4. Mr. Udayaditya Banerjee, learned counsel, submits that

though respondent No.9 was very well aware that during the

pendency of the appeal before the Appellate Authority, the

licence to run the fair price shop was allotted to the present

appellant, she has not only suppressed the said fact in the writ

petition but has also made a statement which is totally false to

her knowledge. It is submitted that, on this short ground of

non-joinder of the appellant in the proceedings before the High

Court, the present appeal deserves to be allowed. He relies on

the judgment of this Court in the case of Pawan Chaubey vs.

The State of Uttar Pradesh & Ors.

2 in support of his

submission that the appellant being the subsequent allottee

was a necessary party and as such, the impugned judgment

and order of the High Court, without impleading him as a

party, is not sustainable in law.

5. Mr. Irshad Ahmad, learned counsel, on the contrary,

submits that this Court in the case of Poonam vs. State of

2

Civil Appeal No.3668 of 2022, decided on May 6, 2022

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Uttar Pradesh and others

3 has held that an allottee during

the pendency of the legal proceedings at the instance of the

earlier allottee is not a necessary party and as such, the

impugned judgment and order, which is passed without

impleading the appellant cannot be assailed on that ground.

6. He also relies on the judgment of this Court in the case of

Mumbai International Airport Private Limited vs. Regency

Convention Centre and Hotels Private Limited and others

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in support of the proposition that the relief could have been

granted in the absence of the appellant and as such, he was not

a necessary party before the High Court.

7. Mr. Irshad Ahmad, learned counsel, also submits that the

proceedings against respondent No.9 were initiated on account

of political rivalry. He submits that in view of this, no

interference is warranted in the present matter.

8. This Court in the case of Mumbai International Airport

Private Limited (supra) had an occasion to consider as to who

3

(2016) 2 SCC 779

4

(2010) 7 SCC 417

7

is a necessary party to the proceedings. It will be relevant to

refer to paragraph 15 of the said judgment, which reads thus:

“15. A “necessary party” is a person who

ought to have been joined as a party and

in whose absence no effective decree

could be passed at all by the court. If a

“necessary party” is not impleaded, the

suit itself is liable to be dismissed. A

“proper party” is a party who, though not

a necessary party, is a person whose

presence would enable the court to

completely, effectively and adequately

adjudicate upon all matters in dispute in

the suit, though he need not be a person

in favour of or against whom the decree is

to be made. If a person is not found to be

a proper or necessary party, the court

has no jurisdiction to implead him,

against the wishes of the plaintiff. The

fact that a person is likely to secure a

right/interest in a suit property, after the

suit is decided against the plaintiff, will

not make such person a necessary party

or a proper party to the suit for specific

performance.”

9. It could thus be seen that a necessary party is a person in

whose absence no effective decree could be passed by the

Court. It has been held that if a “necessary party” is not

impleaded, the suit itself is liable to be dismissed.

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10. Another aspect that needs to be taken into consideration

is that, a Full Bench of the Allahabad High Court in the case of

Smt. Urmila Devi vs. State of U.P. & 6 others

5, had an

occasion to consider an issue as to whether, upon suspension

or cancellation of a licence of a Fair Price Shop, it was

permissible for the State to make an interim or temporary

arrangement by the appointment of a new fair price shop

holder. The Full Bench of the Allahabad High Court held that

the view taken by the Division Bench of the said High Court in

the case of Jagannath Upadhyay vs. State of U. P., through

Principal Secretary, Food & Civil Suppies

6 that till a

statutory appeal is decided, the fair price shop should not be

allotted on an ad hoc basis and should be attached only to

some other neighbouring fair price shop, did not lay down a

correct position of law. It has been held that the State

Government was empowered to make a regular allotment

during the pendency of the appeal filed by the earlier allottee

against the cancellation or suspension of the licence.

5

2015 SCC OnLine All 3910

6

Misc. Bench No.10373 of 2011

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11. It is to be noticed that in the present case, during the

pendency of the appeal before the Appellate Authority, on a

recommendation of the Tehsil Level Selection Committee dated

19

th April 2018, the present appellant, through regular

allotment, was appointed as Fair Price Dealer on 15

th May

2018.

12. Insofar as the judgment of this Court in the case of

Poonam (supra), on which strong reliance is placed by Mr.

Irshad Ahmad, learned counsel, is concerned, this Court in the

case of Pawan Chaubey (supra) had an occasion to consider

the aforesaid judgment in the case of Poonam (supra). This

Court in the case of Pawan Chaubey (supra) also noticed its

earlier decision in the case of Sumitra Devi vs. State of U.P.

& Ors.

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Noticing both these judgments, this Court observed

thus:

“Our attention has been drawn to

the judgment of this Court in Poonam vs.

State of Uttar Pradesh & Ors. reported in

(2016) 2 SCC 779. Relying on the

aforesaid judgment, learned counsel

7

Civil appeal Nos. 9363-9364 of 2014, decided on 8

th

October 2014.

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appearing 3 on behalf of the Respondent

No.4 contended that the appellant need

not be heard. She had no right or locus to

be impleaded.

In Poonam (supra), the subsequent

allottee had actually been heard at all

stages. What the Court held was that the

subsequent allottee had been trying to

establish her right independently. She

contended that she had an independent

legal right. This Court found that it was

extremely difficult to hold that she had

an independent legal right.

In Sumitra Devi vs. State of UP &

Ors. (Civil Appeal Nos. 9363-9364 of

2014), a Bench of coordinate strength of

this Court comprising Hon’ble Ms.

Justice Ranjana Prakas h Desai and

Hon’ble Mr. Justice N.V. Ramana (As His

Lordship then was) passed an order dated

08.10.2014, the relevant parts whereof

are extracted hereinbelow:

“The appellant being the

subsequent allottee filed an

application for impleadment in

the writ p etition on

17.10.2008. That application

was neither entertained nor

allowed.

xxx xxx xxx

Learned counsel for the

appellant urged and, in our

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opinion, rightly that the High

Court should have heard the

appellant before restoring the

licence of respondent no.6 as

the appellant was the

subsequent allottee and his

rights were affected by the

restoration of licence of

respondent no.6. We are

entirely in agreement with

learned counsel for the

appellant. In our opinion, the

High Court could not have

restored the licence of

respondent no.6 without

hearing the appellant as his

rights were certainly affected

by such order.”

Even if a subsequent allottee does

not have an independent right, he/she

still has a right to be heard and to make

submissions defending the o rder of

cancellation.

It is true that the order of

appointment of the appellant reads that

the order is subject to the outcome of the

proceedings pending in court. This does

not disqualify the appellant from

appearing and contesting the proceedings

by trying to show that the order of

cancellation had correctly been passed

against the Respondent No.4.”

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13. It could thus be seen that this Court had held that, even if

a subsequent allottee does not have an independent right,

he/she still has a right to be heard and to make submissions

defending the order of cancellation.

14. It is further to be noticed that in the said case, i.e., Pawan

Chaubey (supra), the order of appointment of the appellant

therein was subject to the outcome of the proceedings pending

in court. The case at hand stands on a much better footing.

The appellant herein had been selected by the Tehsil Level

Selection Committee in its meeting dated 19

th April 2018 and

thereafter, he was appointed as Fair Price Dealer vide order of

the Competent Authority dated 15

th May 2018, on a regular

basis.

15. In this background, we find that the appellant was a

necessary party to the proceedings before the High Court. The

present appeal deserves to be allowed on this short ground.

However, there is another more serious ground on which the

present appeal deserves to be allowed.

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16. The Appellate Authority in its order dated 20

th July 2018

has categorically observed thus:

“At present, new dealer Sh. Ram Kumar

Singh s/o Chhote Singh has been

approved as Fair Price Dealer, village

Anta Tehsil Rasoolabad, Kanpur Dehat

vide District Magistrate’s order dated

15.05.2018. In the end, prayer has been

made that the appeal being devoid of

merits, may be dismissed.”

17. It has further been observed thus:

“As per the proposal made by Block

Development Officer in the public

interest, an open meeting was called on

………2018 for the selection of Fair Price

Dealer at Gram Panchayat , Anta, in

which the name of Sh. Ram Kumar Singh

s/o Sh. Chhote Singh, resident of Gram

Panchayat Anta, Tehsil Rasoolabad,

Kanpur Dehat was taken into

consideration and after discussion, in

view of the decision taken by the Tehsil

Level Selection Committee, dated 19

th

April 2018, as per the order of District

Magistrate, Rasoolabad, Kanpur Dehat

dated 15.05.2018, Sh. Ram Kumar Singh

S/o Sh. Chhote Singh, resident of Gram

Panchayat Anta, Tehsil Rasoolabad,

Kanpur, Dehat has been appointed as

new Kotedar in ac cordance with the

orders issued by the Dy. Commissioner

(Food) Kanpur Division and Hon’ble High

Court, Allahabad.”

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18. It could thus be seen that respondent No. 9 was very well

aware that during the pendency of the proceedings, the

appellant was appointed as a Fair Price Dealer on 15

th May

2018. The order of the Appellate Authority has been passed on

20

th July 2018. Even this being the position, respondent No.9

has been bold enough to aver thus in the memo of the writ

petition:

“33. That it is also notew orthy to

mention here that during the pendency of

the Fair Price Shop, no third party

allotment was made and as per the

direction of this Hon’ble Court, the shop

of the petitioner was attached to another

Fair Price Shop Holder.”

19. It could thus be seen that, though respondent No.9 was

very well aware that during the pendency of the proceedings

before the Appellate Authority, an allotment was done in favour

of the present appellant, she has averred in her writ petition

that no third party allotment was made. She has further gone

on to state that, as per the directions of the High Court, the fair

price shop of respondent No.9 was attached to another fair

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price shop holder. The statement is factually incorrect to the

knowledge of respondent No.9. The same has been reiterated

in the Ground thus:

“N. Because during the pendency of the

Fair Price Shop, no third party allotment

was made as per the direction of this

Hon’ble Court, the shop of the petitioner

was attached to another Fair Price Shop

Holder.”

20. It is thus clear that respondent No.9 has not only

suppressed the fact about the subsequent allotment of the fair

price shop to the appellant herein but has also tried to mislead

the High Court that the fair price shop of respondent No.9 (the

writ petitioner before the High Court) was attached to another

fair price shop holder.

21. This Court, in the case of S.P. Chengalvaraya Naidu

(Dead) By LRs. Vs. Jagannath (Dead) by LRs and others

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has held that non-disclosure of the relevant and material

documents with a view to obtain an undue advantage would

amount to fraud. It has been held that the judgment or decree

8

(1994) 1 SCC 1

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obtained by fraud is to be treated as a nullity. We find that

respondent No.9 has not only suppressed a material fact but

has also tried to mislead the High Court. On this ground also,

the present appeal deserves to be allowed.

22. In the result, the appeal is allowed. The impugned order

of the High Court dated 21

st February 2019 is quashed and set

aside. The order dated 18

th November 2017 passed by the

Deputy Collector, Rasoolabad cancelling the Fair Price Shop

licence of respondent No. 9 and order dated 20

th July 2018

passed by the Additional Commissioner (Judicial), Kanpur

Division, Kanpur dismissing the appeal of respondent No.9 are

affirmed.

23. Pending applications, if any, shall stand disposed of. No

order as to costs.

....................J.

[B.R. GAVAI]

..........................J.

[C.T. RAVIKUMAR ]

NEW DELHI;

SEPTEMBER 28, 2022.