A. I.A. 41 of 2004
In this Application Petitioner has raised the issue relating to corruption in the PDS system and
has suggested certain measures that are needed to reform the system. Petitioner has relied on a
report prepared by a Delhi NGO ‗Parivartan‘ that carried out a survey in East Delhi of the
functioning of the ration shops and the grievances of the public. After the survey was done a
public hearing was conducted which was attended by members of the public, officials of the food
department, the police and the commissioner appointed by the Hon‘ble Supreme Court. In the
public hearing records obtained by the public taking recourse to the Right to Information Act
showed, according to the Petitioner that a very large percentage of grain meant for the poor was
being siphoned away. The survey was conducted after the NDTV news channel followed trucks
carrying rations from the FCI godowns ostensibly for the ration shops but in reality these grains
were taken directly to the black market.
The basic allegation set out in the report is that though the members of the public and ration card
holders are given to believe that rations are not available or have not come on time, in reality the
rations are indeed available but are being sold on the black market. By way of evidence
numerous complaints set out the different ways in which the people are cheated of their quota of
grain and kerosene.
Though the ration cards in the possession of the holders show that the grain or kerosene has not
been lifted, the records of the ration shop/kerosene depot indicate that the full quota has been
lifted. In short the allegation is that the persons in-charge of the shops/depots while informing the
public that the grain/kerosene has not come, makes false entries in the registers maintained by
them so as to indicate that the entire quota has been disbursed. To do this on the cash memos
false signatures or thumb impressions have been put, it is alleged. It is also complained that false
entries are made in the daily sales register. An inspection of the record shows that there are
duplicate ration cards in the possession of the shop/depot keeper. The shop/depots apparently
keeps the ration cards with them instead of handing them over to the holders despite the order of
this court, thus facilitating the making of false entries. It is also alleged that the officials of the food
department are hand in glove with the shops/depots and handover the new ration cards directly to
the shops/depots instead of to the holders to facilitate the siphoning away of grain. It is said that
the shop/depot managers sometimes take bribes from the applicants to handover the card to
them. Details are also given in the report of deficiencies of the keeping of the stocks and
In reply the commissioner to the department of the Food and Supplies and consumer affairs, thgovernment of NCT of Delhi has filed two affidavits dated 5 January 2005 wherein he has set
out a chart of the complaints recorded by the NGO ‗Parivartan‘ and made to the authorities from
time to time and the action taken. It is clear from the chart that the allegations set out in the
Parivartan report are generally accurate because it can be seen that the chart sets out the action
taken by the authorities on the basis of these complaints. But most of the punishment meted out
by the department appears to have come after the ‗Parivartan‘ report and the authorities have not
been able to say what action has been taken to curb corruption in the past.
In the reply the commissioner has admitted that the NDTV expose was basically accurate but has
not pointed out specifically what punishment have been imposed.
By order dated 18.11.2004 in I.A. 41 of 2004 this court made the following order :
―Notice for the present is issued to Union of India and Delhi Government.
Learned Counsel representing them accepts notice. Reply affidavits shall be
filed within four weeks, as prayed by learned counsel. The Delhi
Government shall also state in its affidavit as to when the Vigilance
Committees stipulated under Public Distribution System (Control) Order 2001
were set up, there are how may such Committees and the details of work
undertaken by those Committees in last one year. The Petitioner may file
rejoinder within two weeks after filing of the reply affidavits.‖
In the counter of the Commissioner to the Department of Food and Supplies and Consumer
Affairs, Government of NCT of Delhi, the Commissioner has stated that the Vigilance Committees
are constituted in every circle and that in 69 out of 70 circles in Delhi, the MLA is the Chairman of
the Vigilance Committee and the Food Supply Officer is the Member Secretary. In the affidavit he
has enclosed almost identical reports dated 7.06.2005 of 11 circles in Delhi (West), 8 circles in
Delhi (North), the circles in Delhi (North-East), the circles in Delhi (East) and 8 circles of Delhi
(Central) and it is reported that during the last one year ―there is no major issue decided by these
committees‖ or ―discussed in the meetings‖. He has further stated that apart from the Vigilance
Committees there is a Task Force that is authorized to co-opt an NGO as a member.
B. The Essential Commodities Act, 1955
The essential commodity is defined in Section 2 (v) as ―foodstuffs, including edible oilseeds and
Section 3 is as under :
―Powers to control production, supply, distribution, etc., of essential commodities.—(1) If
the Central Government is of opinion that it is necessary or expedient so to do for
maintaining or increasing supplies of any essential commodity or for securing their
equitable distribution and availability at fair prices, [or for securing any essential
commodity for the defence of India or the efficient conduct of military operations], it may,
by order, provide for regulating or prohibiting the production, supply and distribution
thereof and trade and commerce therein.
(2) Without prejudice to the generality of the powers conferred by sub-section (1), an
order made thereunder may provide –
(a) for regulating by licences, permits or otherwise the production or
manufacture of any essential commodity;
(c) for controlling the price at which essential commodity may be bought or
(d) for regulating by licences, permits or otherwise the storage, transport,
distribution, disposal, acquisition, use or consumption of, any essential
Section 7 provides for penalties of imprisonment and fine for contravention of any order made
under Section 3.
Section 10 (A) makes all offences cognizable and non-bailable.
Section 11 is as under :
―Cognizance of offences. – No Court shall take cognizance of any offence punishable
under this Act except on a repot in writing of the facts constituting such offence made by
a person who is a public servant as defined in section 21 of the Indian Penal Code (45 of
1860) [or any person aggrieved or any recognized consumer association, whether such
person is a member of that association or not].‖
Section 10AA is as under :
―Power to arrest.- Notwithstanding anything contained in the Code of Criminal Procedure,
1973 (2 of 1974), no officer below the rank of an officer incharge of a police station or any
police officer authorized by him in this behalf in writing shall arrest any person accused of
committing an offence punishable under this Act.‖
C. Public Distribution System (Control) Order, 2001
(1) Fair price shop owners shall take delivery of stocks from authorized nominees of the
State Governments to ensure that essential commodities are available at the fair price
shop within first week of the month for which the allotment is made.
(2) The district authority entrusted with the responsibility of implementing the Public
Distribution System shall ensure that the stocks allocated to the fair price shops are
physically delivered to them by the authorized nominee within the stipulated time.
(3) The authority or person, who is engaged in the distribution and handling of essential
commodities under the Public Distribution system, shall not willfully indulge in substitution
or adulteration or diversion or theft of stocks from central godowns to fair price shop
premises or at the premises of their fair price shop.
(1) The ration card holder shall not be denied the supply as per entitlement of the essential
commodities, lying in stock, by the fair price shop owner under the Public Distribution
(2) The fair price shop owner shall not retain ration cards after the supply of the essential
(3) A fair price shop owner shall provide the relevant extracts of the records maintaining by
him to the beneficiary on payment of the prescribed fee.
If any person contravenes any provisions of this Order under clause 3, 4, 6, and 7, he shall be
liable to punishment under Section 7 of the Act.
Power of search and seizure :
(1) An authority authorized by State Government, shall be competent to inspect or summon
such records or documents as may be considered by him necessary for examination and
take extracts or copies of any records or documents produced before him.
(2) If the said authority has reason to believe that there has been any contravention of the
provisions of this Order or with a view to securing compliance with this Order, he may
enter, inspect or search the fair price shop or any premises relevant to transactions of
business of the fair price shop.
(3) The said authority may also search, seize or remove such books of accounts or stocks of
essential commodities where such authority has reason to believe that these have been
used or will be used in contravention of the provisions of this Order.
(4) The provisions of section 100 of the Code of Criminal Procedure 1973, relating to search
and seizure shall so far as may be, apply to search and seizure under this Order.
Any person aggrieved by an order of the designated authority denying the issue or renewal of a
ration card or cancellation of the ration card may appeal to the Appellate Authority within thirty
days of the date of receipt of the order.
Annexure to the Public Distribution System Control Order, 2001
[See clauses 3, 4, 5, 6, 7, 8, 10 & 12]
1. Identification of families living below the Poverty line :
1. Gram Sabhas shall finalise the list of beneficiaries belonging to BPL and Antyodaya
categories drawn up by the designated authority in respect of the area under their
2. Where there are no Gram Sabhas, the local representative bodies shall finalise the list of
beneficiaries belonging to BPL and Antyodaya categories within their respective
2. Ration Cards :
1. State Governments shall ensure that no eligible applicant is denied a ration card under the
Public Distribution System.
2. The ration card holder shall be entitled to draw essential commodities from a fair price
shop on weekly basis.
3. The designated authority shall issue a ration card within one month of the date of receipt
of the application after necessary checks and verification.
3. Distribution :
1. The Food Corporation of India (FCI) or any other agency designated for the purpose by
the Central Government shall ensure physical delivery of foodgrains of fair average quality
to State Governments for distribution under the Public Distribution System, as per the
allocations made by the Central Government, within two weeks of the receipt of payment
from the State Governments and issue of release orders.
2. State Governments shall make arrangements for taking delivery of essential commodities
issued by the Central Government by their designated agencies or nominees from the FCI
depots/godowns and ensure further delivery to the fair price shop within the first week of
the month for which allocation is made.
3. State Governments shall exercise necessary checks to ensure that full quantity lifted by
them reaches their godowns and in turn the fair price shops.
4. State Governments shall ensure that stocks of essential commodities under the Public
Distribution system, as issued from the FCI godowns, are not replaced by stocks of
inferior quality during storage, transit or any other stage till delivery to the ration card
4. Monitoring :
1. State Governments shall ensure a proper system of monitoring of fair price shops and
prescribe model sale register, stock register and ration card register.
2. State Governments shall ensure monitoring of the functioning of the Public Distribution
System at the fair price shop level through the computer network of the NIC installed in
the District NIC centers. For this purpose computerized codes shall be issued to each FPS
in the district.
3. State Governments shall educate the ration card holders regarding their rights and
privileges under the Public Distribution System by use of electronic and print media as
well as display boards outside fair price shops.
4. State Governments shall issue and adopt the Citizens‘ Charter based on the model
Citizens‘ Charter issued by the Central Government.
Direct the Respondents, the authorities named in the Essential Commodities Act, 1955 and the
Public Distribution System (Control) Orders, and the police wherever necessary to :
1. Incorporate in the Public Distribution System (Control) Orders wherever necessary
relevant provisions of the Chhattisgarh Public Distribution System (Control) Order 2004
and the directions given in this order.
2. Take disciplinary action and initiate criminal prosecutions wherever appropriate for
violation of the provisions of the Essential Commodities Act, the Public Distribution
System (Control) orders and the Indian Penal Code.
3. Ensure that fair price shops/Kerosene Oil Depots keep the records namely stock register,
sale register, master register, cash memos, open for free public audit on any one day of
the month which is publicly notified.
4. Maintain and regularly update a website containing the details as set out at Annexure A
5. Provide zerox copies of the records referred to in paragraph 3 above be provided to any
person applying at the rate of Rs. 50 paise per page only.
6. Ensure that an application for a ration card is dealt with expeditiously and, where the
application is allowed, the ration card shall be directly delivered to the applicant promptly
and in no case shall be handed over to the fair price shops/Kerosene Oil Depots.
7. Ensure that in cases where the application for a ration card is rejected, for a direction that
the order be made in writing and communicated to the applicant promptly.
8. Ensure that an appellate authority be formed which is independent of the original decision
making body to decide appeals from rejection of an application for a ration card.
9. Conduct extensive trainings of officials concerned with the implementation of the orders
of the Supreme Court in this case in consultation with the commissioner appointed by this
Court and his assistants.
10. Establish a grievance redressal mechanism which is easily accessible to the public to
handle complaints made by members of the public in respect of the public distribution
11. Establish vigilance committees to carefully monitor the functioning of the fair price
shops/kerosene Oil Depots with the powers to conduct surprise visits and inspect records
and with NGOs and other public-spirited members who are independent of government
12. Forthwith consider whether a revision in the commission paid to the fair price
shops/kerosene oil depots is inadequate and if so to revise the commission and to report
to this Hon‘ble Court within eight weeks.
13. Ensure that, in cases where new fair price shops/kerosene oil depots are being
established, or licenses have been cancelled and new licenses are to be issued that
priority for running the fair price shops/kerosene oil depots be given to elected local
bodies, gram panchayats, urban municipal bodies, dalit and tribal self help groups,
women self help groups, large adim jati multi purpose cooperative societies and primary
credit cooperative societies. In all such cases where the licence is granted to any of the
above social entities the central government shall make separate budgetary provisions
for the working capital requirements of the shops/depots.
14. Godowns for stocking foodgrains and kerosene depots shall be constructed at every
district head quarters by the end of 2005 where such godowns/depots do not exist, and at
the block level by end 2006.
15. Ensure that a scheme is drafted for the provision of foodgrains and kerosene to migrant