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Judgment
The present Writ Petition along with all connected applications challenges inter alia, the legality and the validity of the Order of Penalty dated 20.07.2026 imposing a penalty of Rs. 8,02,345.84/- upon the petitioner, who are Fair Price Shop dealers.
The core issue involved herein is whether the said Penalty Order is sustainable in law when the earlier Order of Suspension dated 21.05.2026 and the Tagging Order dated 22.05.2026 were stayed by this Court, and a direction was issued to restore the dealership within 48 hours.
The Learned Counsel appearing for the petitioner submits that despite the order of stay passed by this Court, respondent No. 5 issued a communication dated 31.07.2026 imposing a penalty pursuant to the show cause notice dated 10.04.2025.
It is further submitted that the order of penalty dated 20.07.2026 which was posted by the respondent on 06.08.2026 and received by the petitioners on 08.08.2026 is illegal, and unsustainable in the eye of law as the proceeding had attained finality in view of the earlier order.
Upon receipt of the said penalty communication, the petitioner issued a legal notice to respondent No. 5 on 10.08.2026. Pursuant thereto, the respondent No. 5 withdrew the suspension order dated 20.05.2026 on 10.08.2026 and restored the allotment of ration articles to the petitioners dealership.
The petitioners thereafter resumed distribution of ration articles to tagged beneficiaries on and from 11.08.2026.
It is further submitted by the petitioner that the action of the respondent No. 5 is arbitrary, illegal and in excess of jurisdiction and amounts to willful disobedience of the orders of this Court.
Learned Counsel appearing for the State respondents has taken a fair stand and submits that this Court may pass an appropriate order in accordance with law.
Having heard the parties and upon perusing the materials available on records, this Court finds that the entire procedure of tagging, suspension and imposition of penalty is de hors the statutory mandate.
Despite there being a specific order of stay till 31st August 2026, respondent No. 5 proceeded to impose penalty. Such conduct amounts to willful disobedience of the order of this court and is condemnable. It reflects abdication of duty on the part of Respondent No.5.
Although the suspension has now been withdrawn and the dealership is made functional, the penalty being consequential in nature automatically loses its force and is liable to be set aside.
When the underlying penal proceeding has already attained finality, the consequential orders of suspension, tagged and penalty cannot be sustained in law.
In view of the above, the show cause notice dated 10.04.2026 along with all consequential orders and notices including the penalty order dated 20.07.2026 are hereby quashed and set aside.
It is however, made clear that respondent No. 5 shall be at liberty to take necessary steps in accordance with law upon strict compliance with all statutory procedures prescribed under the statute.
With the above observations and direction, this Writ Petition is allowed and stands disposed of.
Urgent Photostat certified copy of this order be supplied to the parties, if applied for, as early as possible.