CHAPTER 1

 

ORDERS DATED 12.07.2006 AND 17.04.2007 PASSED BY THE HON'BLE SUPREME COURT PASSED IN W.P.(C) NO. 196 OF 2001

 

ITEM NO.4                                COURT NO.5                   SECTION PIL/XVI

 

S U P R E M E   C O U R T    O F   I N D I A

RECORD OF PROCEEDINGS

WRIT PETITION (C) No.(C).196 OF 2001

 

PEOPLE’S UNION FOR CIVIL LIBERTIES                      ….      Petitioner(s)

VERSUS

UNION OF INDIA & ORS.                                           ….  Respondent(s)

 

(With appln(s) for interim directions and directions and permission and permission to place addl. Documents on record and intervention and c/delay and  modification of Court’s order dated 7.10.2004 and ex-parte stay and necessary directions)

WITH SLP(C) NO.17906 OF 2003

(With application for c/delay in filing SLP and permission to place addl. Documents on record and exemption from filing OT and directions and office report)

Date: 12/07/2006 This Petition was called on for hearing today.

 

CORAM:

          HON’BLE MR. JUSTICE ARIJIT PASAYAT

          HON’BLE MR. JUSTICE S.H. KAPADIA

For Petitioner (s)     Mr. Colin Gonsalves, Sr. Adv.

                             Mr. Vipin M. Benjamin, Adv.

                             Ms. Pooja Sharma, Adv.

                             Anup Srivastava, Adv.

                             Ms. Jyoti Mendiratta, Adv.

                             Mr. Praveen Jain, Adv.

For Respondent(s)   Mr. T.S. Doabia, Sr. Adv.

                             Ms. Sunita Sharma, Adv.

                             Ms. Sandhya Goswami, Adv.

                             Mr. V.K. Verma, Adv.

                             Ms. Sushma Suri, Adv.

                             Mr. D.S. Mahra, Adv.

                            

Dr. R.G. Padia, Sr. Adv.

                             Mr. T. Mahiptal Adv.

                             Mr. Pradeep Misra, Adv.

Mr. R.F.Nariman, Sr. Adv.

                             Mr. Ravindra K. Adsure, Adv.

                            

 Mr. Prabha Shankar, Mistra, Sr. Adv.

                             Mr. Amit Pawan, Adv.

                             Mr.. Irshad Ahmad, Adv.

 

                             Mr. Manjit Singh, Adv.

                             Mr. Harikesh Singh, Adv.

                             Mr. T.V. George, Adv.

                             Mr. Anil Shrivastav, Adv.

                            

                             Ms. Hemantika Wahi, Adv.

                             Ms. Sadhana Sandhu, Adv.

 

                             Mr. Ashok Bhan, Adv.

                             Mr. S. Wasim A. Qadri, Adv .

                             Mrs. Anil Katiyar, Adv.

 

                             Ms. U. Hazarika, Adv.

                             Ms. Sumita Hazarika, Adv.

 

                             Ms. Pinky Anand, Adv.

                             Mr. Gopal Prasad, Adv.

         

                             Mr. Sarup Singh, Adv.

                             Mr. R.K. Pandey, Adv.

                             Mr. Arun K. Sinha, Adv.

 

                             Ms. A. Subhashini, Adv.

 

                             Ms. Sunita Sharma, Adv.

                             Mr. D.S. Mahra, Adv.

 

                             Mr. Tara Chandra Sharma, Adv.

                             Ms. Neelam Sharma, Adv.

         

                             Mr. Gopal Singh, Adv.

                             Mr. Ritu Raj Biswas, Adv.

 

                             Mr. Riku Sharma, Adv.

                            

                             Mr. J.S. Attri, Adv.

                             Ms. Shivani Thakur, Adv.

                            

                             Mr. A  Mariarputham, Adv.

                             Mrs. Aruna Mathur, Adv.

                             Ms. Mini N. Nair, Adv.

                             For M/s Arputhan Aruna  & Co

 

                             Mr. K.N. Madhusoodhanan, Adv.

                             Mr. R. Sathish, Adv.

 

                             Mr. Uday B. Dubey, Adv.

                             Mr. Anand Grover, Adv.

                             Mr. Kuldip Singh, Adv.

 

                             Ms. Rachana Srivastava, Adv.

                            

                             Ms. Suparna Srivastava,  Adv.

                             Ms. Pooja Mattani, Adv.

                             Mr. Rajesh Srivastava, Adv.

 

                              Ms. Kamini Jaiswal, Adv.

                             Mrs. Shomila Bakshi, Adv.

                             Mrs. Rani Mishra, Adv.

 

                             Mr. Rajesh Tyagi, Adv.

                             Dr. Aparna Bhardwaj, Adv.

 

                             Mr. KH Nobin Singh, Adv.

         

                             Mr. V.G. Pargasam,  Adv..

                             Mr. S. Vallignayagam, Adv.

                            

                             Mr. Jana Kalyan Das, Adv.

 

                             Mr. Aruneshwar Gupta, Adv.

                             Mr. Anis Suhrawardy, Adv.

                             Mr. B.B. Singh, Adv.

 

                             Ms. Indra Sawhney, Adv.

                             Mr. R.K. Maheshwari, Adv.

                             Mr. R. Sathish, Adv.

                             Mr. S.V. Deshpande, Adv.

                             Mr. K.V. Mohan, Adv.

                             Mr. Ranjan Mukherjee, Adv.

                             Mr. V.G. Pragasam, Adv.

                             Mrs. D. Bharathi Reddy, Adv.

                             Mr. B.S. Banthia, Adv.

                             Mr. Mukesh K. Giri, Adv.

                             Mr. Ramesh Babu M.R. Adv.

                             Mr. Prakash Shrivastava, Adv.

                             Mr. Prashant Kumar, Adv.

                             Mr. Sanjay R. Hegde, Adv.

                             Mr. Vishwaji Singh, Adv.

                             Mr. Gopal Singh, Adv.

 

UPON hearing counsel the Court made the following

O R D E R

W.P.(C) No.196 of 2001

 

Delay condoned.

 

Application for intervention is allowed.

After having heard learned counsel for the parties, we find that there is practically no monitoring over the sums allotted for the Public Distribution System (in short PDS) by the Central Government, and its utilization.  The amount involved, we are told, is in the neighborhood of Rupees Thirty Thousand Crores annually.  Certain suggestions have been given by Mr. Colin Gonsalves, learned senior counsel, as to the modalities to be adopted in such cases. At the present stage, we feel it would be necessary to constitute a Central Vigilance Committee, headed by a retired Judge of this Court to be assisted by Dr. N.C. Saxena, the Commissioner earlier appointed by this Court.  We request Mr. Justice D.P. Wadhwa to head the Committee. 

 

The Committee shall look into the maladies which are affecting the proper functioning of the system and also suggest remedial measures.  For this purpose, the Committee shall, amongst other things, focus on:-

 

a)                 The mode of appointment of the dealers,

b)                 The ideal commission or the rates payable to the dealers, and

c)                  Modalities as to how the Committees already in place, can function better.

d)                 Modes as to how there can be transparency in allotment of the food stock to be sold at the shops.

 

While dealing with the question of the mode of appointment, the Committee shall also suggest as to a transparent mode in the selection of the dealers.  The Committee shall also indicate as to how more effective action can be taken on the report of the Vigilance Committees already appointed.  It goes without saying that the same shall be in addition to the legal remedies available to any citizen in setting law into motion.  We request the Committee to give its report within a period of four months so that further instructions/directions can be given.

 

The Committee would invite suggestions from general public, organizations and would consider the suggestions, if any received, in the proper perspective.

 

We are giving this unusual direction in view of the almost accepted fact that large-scale corruption is involved and there is hardly any remedial step taken to put an end to this.  The ultimate victim is the poor citizen who is deprived of his legitimate entitlement of food grains.  The Public Distribution System is intended to ensure that a citizen gets the food grains at a reasonable price keeping in view the economic standards.

 

The expenses including honorarium to the Chairman and the Member Convener and other financial involvements of the Committee shall be borne by the Food Ministry of the Central Government.  The honorarium shall be same as the pay and allowances of a sitting Judge of this Court and a Joint Secretary of the Union of India.     The necessary infrastructure shall be provided by the concerned Ministry within three weeks from today.  This direction is initially given for the Government of Delhi to be followed on All India basis.

 

List of matter after the Report is filed.

 

I..A.. NOS. 34, 35,40 AND 49

List on 27th July, 2006.

 

I..A..NOS. 58 AND 59

Mr. Ravindra K. Adsure, learned counsel accepts notice on behalf of the State of Maharashtra,  Response, if any, shall be filed before the next date of hearing, i.e. 27th July, 2006.

 

I.A. NOS. 60 AND 61

 

Learned counsel for the State of Maharashtra waives notice.  However, it is stated that an affidavit indicating the factual position shall be placed on record before the next day, i.e. 27th July, 2006.

 

S.L.P. (C) NO.17906 OF 2003

Delay condoned.

 

We find that the grievance made in this petition can be considered by the authorities in the light of orders to be passed in the connected matters, if occasion so arises.  This special leave petition is, accordingly, disposed of.

 

 

Sd/-                                                                                Sd/-

(Neena Verma)                                                (Vijay Aggarwal)

 Court Master                                                  Court Master

 


 

ITEM NO. 1                                  COURT NO. 4         SECTION PIL

 

S U P R E M E   C O U R T   O F   I N D I A

RECORD OF PROCEEDINGS

WRIT PETITION(C) No. 196 of 2001

 

PEOPLE’S UNION FOR CIVIL LIBERTIES                            Petitioner(s)

 

                                      VERSUS

 

UNION OF INDIA &ORS.                                               Respondent(s)

 

(Office report for direction)

 

Date: 17/04/2007 This position was called on for hearing today.

 

CORAM:       HON’BLE DR. JUSTICE ARIJIT PASAYAT

 

                   HON’BLE MR. JUSTICE S.H. KAPADIA

 

For Petitioner(s)

Mr. Colin Gonsalves, Sr. Adv.

Mr.Anup K. Srivastava, Adv.

Ms. Jyoti Mendiratta, Adv.

 

For Respondent(s)

Mr. R. Mohan, A.S.G.

 

Union of India

Mr. Mohan Parasaran, A.S.G.

Mr. Rajiv Dutta, Sr. Adv.

Mr. T.S. Doabia, Sr. Adv.

Ms. Sunita Sharma, Adv.

Mr. R.C. Kathiya, Adv.

Ms. Rajni Singh, Adv.

Mr. V.K. Verma, Adv.

Ms. Sushma Suri, Adv.

 

For NCT of Delhi

Mr. Ashok Bhan, Adv.

Mr. S. Wasim A. Qadri, Adv.

Mr. D.S. Mahra, Adv.

 

St. of UP

Mr. Dinesh Dwivedi, Sr. Adv.

Dr. R.G. Padia, Sr. Adv.

Ms. Vimla Sinha, Adv.

Mr. Rajeev Dubey, Adv.

Mr. Gaurav Bhatia, Adv.

Mr. Kamlendra Mishra, Adv.

Mr. T. Mahipal, Adv.

Mr. Pradeep Misra, Adv.

 

St. of Maharashtra

Mr. Ravindra K. Adsure, Adv.

 

St. of Haryana

Mr. Manjit Singh, Adv.

Mr. T.V. George, Adv.

 

St. of Arunachal Pradesh

Mr. Anil Shrivastav, Adv.

Mr. Ritu Raj, Adv.

 

St. of Gujarat

Ms. Hemantika Wahi, Adv.

Ms. Pinky Behera, Adv.

 

St. of Nagaland

Mr. U. Hazarika, Adv.

Mr. Satya Mitra, Adv.

Ms. Sumita Hazarika, Adv.

 

St. of Punjab

Mr. Ajay Pal, Adv.

Ms. Preeti Singh, Adv.

 

St. of Goa

Ms. A. Subhashini, Adv.

 

St. of West Bengal

Mr. Tara Chandra Sharma, Adv.

Ms. Neelam Sharma, Adv.

Mr. Rajiv Sharma, Adv.

 

St. of Bihar

Mr. Gopal Singh, Adv.

Mr. Anukul Raj, Adv.

 

St. of Tripura

Mr. Gopal Singh, Adv.

Mr. Rituraj Biswas, Adv.

 

St. of Assam

Mr. Riku Sharma, Adv.

For M/s Corporate Law Group

 

St. of  H.P.

Mr. J.S. Attri, Adv.

 

St. of Sikkim

Mr. A. Mariarputham, Adv.

Mrs. Aruna Mathur, Adv.

For M/s Arputham Aruna & Co.

 

St. of Mizoram

Mr. K.N. Madhusoodhanan, Adv.

Mr. R. Sathish, Adv.

 

St. of AP

Mr. Manoj Saxena, Adv.

Mr. Rajnish Singh, Adv.

Mr. T.V. George, Adv.

 

St. of Nagaland

Mr. S. Balaji, Adv.

Ms. Madhusmita Bora, Adv.

 

St. of Chhatisgarh

 

Ms. Suparna Srivastava, Adv. Ms.Nidhi Minocha, Adv.

Mr. Rajesh Srivastava, Adv.

 

St. of Manipur

Mr. KH Nobin Singh, Adv.

Mr. S. Biswajit Meitei, Adv.

Mr. David Rao, Adv.

 

St. of Meghalya

Mr. Ranjan Mukherjee, Adv.

Mr. S.C. Ghosh, Adv.

 

State of Tamilnadu/U.T. of Pondichery

Mr. V.G. Pragasam, Adv.

Mr. S. Vallinayagam, Adv.

Mr. S. Prabhu Ramasubramanian,            Adv.

              

St. of Orissa

Mr. Sibo Shankar Mishra, Adv.

 

St. of Kerala

Mr. G. Prakash, Adv.

Mr. Beena Prakash, Adv.

 

St. of Uttrakhand

Ms. Rachana Srivastava, Adv.

 

St. of Rajasthan

Mr. Aruneshwar, Gupta, Adv.

Mr. Naveen Kumar Singh, Adv.

Mr. Mukul Sood, Adv.

 

U.Ts. of Andaman & Nicobar, Daman & Diu, D & NH and

Lakshadweep

Ms. Sunita Sharma, Adv.

Mr. D.S. Mahra, Adv.

Ms. Kamini Jaiswal, Adv.

Ms. Pinky Anand, Adv.

Mr. Gopal Prasad, Adv.

Mrs. D. Bharathi Reddy, Adv.

Mr. Rajesh Tyagi, Adv.

Dr. Aparna Bhardwaj, Adv.

Mr. Jana Kalyan Das, Adv.

Mr. Anis Suhrawardy, Adv.

Mr. B.B. Singh, Adv.

Ms. Indra Sawhney, Adv.

Mr. R.K. Maheshwari, Adv.

Mr. Prashant Kumar, Adv.

Mr. S.V. Deshpande, Adv.

Mr. K.V. Mohan, Adv.

Mr. B.S. Banthia, Adv.

Mr. Mukesh K. Giri, Adv.

Mr. Ramesh Babu, M.R., Adv.

Mr. Prakash Shrivastava, Adv.

Mr. Sanjay R. Hegde, Adv.

Mr. Vishwajit Singh, Adv.

Mr. Gopal Singh, Adv.                             

 

 

                   UPON hearing counsel the court made the following

 

                                                ORDER

 

Perused the letter of Mr. Justice D.P. Wadhwa.  The time for submission of Report is extended till 31st August, 2007.

 

(Neena Verma)                                                       (Madhu Saxena)

Court Master                                                           Court Master.

 

 

 


CHAPTER 2

 

LEGAL REGIME GOVERNING THE PUBLIC DISTRIBUTION SYSTEM

 

 

I.       ENTITIES INVOLVED IN THE SUPPLY OF FOOD GRAINS TO CONSUMERS: Various entities are involved in the process of distribution of food grains. The role and functions are set out in brief.

1.1     The Food Corporation of India (‘FCI’)- The FCI was set up under the Food Corporations Act, 1964, inter alia for the purpose of distribution of food grains throughout the country under the Public Distribution System. The FCI is responsible for making food grains available to the State Governments in terms of the allocations fixed by the Central Government.

1.2     The Department of Food and Supplies, Government of Delhi: The Department manages the Public Distribution System in Delhi. It is engaged in issuing/renewing/canceling licenses/authorizations to set up Fair Price Shops, Identification of families which fall below the poverty line, Issuing/renewing/canceling ration cards, enforcing the provisions of the Essential Commodities Act and the various Control Orders issued there under and taking punitive action against persons found to be violating the provisions of the same.

1.3     The Delhi State Civil Supplies Corporation (‘DSCSC’): The DSCSC is a company registered under the Companies Act, 1956 which was incorporated by the Government of Delhi on 14.02.1980. The DSCSC is inter-alia chargedy with the responsibility of transporting food grains from the FCI to the various Fair Price Shops.

1.4     Fair Price Shops(‘FPS’):The Fair Price Shops are the final link in the chain of distribution of food grains to the consumers. The National Capital Territory of Delhi has been divided into 70 Circles and there are 2772 functional FPS shops in these 70 Circles.

 

II.      The statutory framework governing and regulating the different aspects of the Public Distribution System is contained in the Essential Commodities Act 1955, Public Distribution System (Control) Order 2001 as amended in 2004 and Circulars issued by the Department of Food & Public Distribution in the Ministry of Consumer Affairs, Government of India and the Delhi Specified Articles (Regulation of Distribution) Order 1981 as well as various Circulars, Orders and Notifications issued by the Department of Food Supplies and Consumer Affairs, Government of the National Capital Territory of Delhi.

 

III.     BROAD OVERVIEW OF THE STATUTORY REGIME

 

3.1     ESSENTIAL COMMODITIES ACT, 1955: The Essential Commodities Act 1955 (Act) is an Act to provide, in the interest of general public, for the control of the production, supply and distribution of, and   trade and commerce, in certain commodities.

 

i.        Section 3 of the Act confers powers on the Central Government to control production, supply, and distribution etc. of essential commodities.  Central Government has issued an order called Public Distribution System (Control) Order 2001 (Order), which was amended in 2004.

 

ii.       Stringent provisions have been provided in the Act and the Order, to deal with any infringement of the provisions of the Act or the Order.

 

iii.      Section 7 provides for penalties.  Any person contravening the Order is liable to be sentenced to imprisonment, which may extend upto 7 years and shall also be liable to fine.  Sentence of imprisonment cannot be less than 3 months unless there are adequate and special reasons.  The property in respect of which contravention of the Order has taken place, is liable to be forfeited to the Government and so also any vehicle used in carrying such commodity.  If a person commits offence a second time then imprisonment cannot be less than 6 months subject to, adequate and special reasons.

 

iv.      A person who attempts to contravene or abets any contravention of the Control Order is similarly liable (Section 8).

 

v.       Section 9 provides for punishment upto 5 years or fine or both, if the record is not maintained in terms of the Control Order or any statement or information furnished, which is not true.

 

vi.      Section 10 deals with offences by Companies.

 

vii.     Section 10A has made any offence punishable under the Act cognizable.

 

viii.     Section 10C provides that Court may presume the existence of such mental state where an offence under the Act requires culpable mental state on the part of the accused.  “Culpable mental state” includes intention, motive, knowledge or reason to believe a fact.

 

ix.      Under Section 11, a Court can take cognizance of an offence under the Act not only on a complaint made by a public servant but also by any person aggrieved or any recognized consumer organisation. 

 

x.       An offence for contravention of the Control Order is to be tried summarily (Section 12A).

 

xi.      If an accused is sentenced to imprisonment for a period not exceeding one month and of a fine not exceeding Rupees two thousand, no appeal can be filed.

 

xii.     Section 14 provides that when a person is prosecuted for contravention of any order which prohibits him from doing any act or being in possession of a thing without lawful authority or without a permit, license or other document, the burden of proving that he has such an authority, permit, license or other document, shall be on him.

 

3.2             The Public Distribution System (Control) Order, 2001: The Public Distribution System (Control) Order, 2001 (hereinafter referred to as the ‘PDS Order 2001’) has been issued by the Central Government in exercise of powers conferred by Section 3 of the Essential Commodities Act, 1955 for maintaining supplies and securing availability and distribution of essential commodities under the Public Distribution System. The said Order has been amended in 2004.

 

3.3     The Delhi Specified Articles (Regulation of Distribution) Order, 1981:The Delhi Specified Articles (Regulation of Distribution) Order, 1981 has been issued by the Administrator of Delhi in exercise of the powers conferred by Section 3(2)(d) of the Essential Commodities Act, 1955, for the purpose of maintaining supplies and securing equitable distribution of essential commodities in Delhi.

 

3.4     Circulars/Orders/Instructions:

(i)      Section 5 of the Essential Commodities Act, 1955 provides that the Central Government may, by notified order, direct that the power to make orders or issue notifications under Section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by­,

(a)      such officer or authority subordinate to the Central Government, or

(b)     such State Government or such officer or such authority subordinate to a State Government, as may be specified in the direction.

ii.       Clause 24(1) of the Delhi Specified Articles Order, 1981 provides that the Administrator/Commissioner may by a notification in the Official Gazette issue general directions for the purpose of giving effect to the provisions of the Order. Clause 24(2) provides that any contravention of such directions will be deemed to be a contravention of the Order. The Circulars/Orders/Instructions etc. which have been issued by the Office of the Commissioner Food Supplies and Consumer Affairs for the purpose of regulating different aspects of the Public Distribution System are issued in exercise of the power conferred under the aforementioned provision of the Delhi Specified Articles Order.

 

3.5     Distribution Machinery

 

A.      Allotment of licenses/authorizations to set up a Fair Price Shop.

 

i.        Instruction No. F.28 (4)/97–F&S(P&G)/1008 dated 29.08.1997 by the Office of the Commissioner, Food Supplies and Consumer Affairs, Government of National Capital Territory of Delhi

 

a.       A Fair Price Shop must normally have a minimum of 1000 food cards/ration cards. In terms of the guidelines a vacancy for opening a new PDS outlet is normally notified for 1000 Food cards/units.  However, in areas inhabited by the poorer sections of society, in special cases relaxation of this norm is permissible.  When the number of cards/units exceed 1000 therefore necessitating a new outlet, the FSO (Food and Supply Officer) makes an assessment of the units registered at all the fair price shops (hereinafter referred to as ‘FPS’) in the area and submits a proposal to the District Assistant Commissioner containing a sketch plan of the locality, location of existing shops and details of the number of units attached with each FPS, details of the number of units and its economic viability along with his recommendations. The District Assistant Commissioner, thereafter assesses the situation and submits his recommendations to the Area Deputy Commissioner who submits the case to the Commissioner Food & Supplies for the creation of the new vacancy. After the Commissioner approves the creation of the vacancy, it is communicated to the distribution branch for assigning the category of the vacancy in terms of the roster register.  Thereafter, the vacancy is notified on the 1st day of the month and applications are invited.  The applications are then scrutinized and verified.  The area inspector visits the premises of the applicants and conducts a detailed inquiry and submits his report.  The Circle FSO also examines the report and prepares a comprehensive statement.  Thereafter, the District Assistant Commissioner after examining the reports submitted by the Area Inspector and the FSO fixes a meeting of the screening committee to determine the suitability and eligibility of each applicant. The screening committee submits its report in a sealed cover to the selection board, which then makes its recommendations.  The minutes of the meeting of the selection board are then communicated to the area District Assistant Commissioner for issuing the letter in terms of the recommendation of the board.

 

ii.       Instruction No. F.28 (4)/97–F&S(P&G)/99 dated 08.03.2001 issued by the office of the Commissioner Food Supplies and Consumer Affairs, Government of National Capital Territory of Delhi.

 

a.       The licensing authority is empowered to alter the number of vacancies in accordance with the number of vacancies required in the area on the date of the final decision and if no vacancy is found to exist on the date of the final decision owing to subsequent developments, all applications can be rejected. In partial modification of the Order dated 29.08.1997 it was prescribed that amongst candidates from the preferential categories, selection would be made on the basis of an interview to be conducted by the Selection Board. A similar procedure would be followed in respect of candidates from the general category.

 

iii.      Instruction No. F.28 (4)/97–F&S(P&G)/667 dated 28.06.2000 issued by the office of the Commissioner Food Supplies and Consumer Affairs, Government of National Capital Territory of Delhi.

 

a.       The proposal for creation of vacancies should apart from the requirements set out in the instructions dated 28.09.1997, include also the following information,

Ø      the number of ration cards held by the residents.

Ø      the number of ration cards in respect of which local inquiries have been made since submission of the proposal by the FSO leading to the creation of the previous vacancy and the number of cards which have been found to be non-genuine.

Ø      the number of new ration cards in respect of which local inquiries have been made since submission of the proposal by the FSO leading to the creation of the previous vacancy.

Ø      number of FPS serving the ration cards holders residing in the area to be notified setting out the no. of FPS located in the area, no. of FPS located outside the area but within the circle, number . of FOS located outside the Circle.

Ø      no. of rations cards attached to each FPS as well as the no of ration cards estimated to be non-genuine owing to discontinuity of residence.

 

iv.      Instruction No. F.28 (4)/97–F&S(P&G)/104 dated 16.03.2001 by the office of the Commissioner, Food Supplies and Consumer Affairs, Government of National Capital Territory of Delhi.

 

a.       The terms and conditions of eligibility were amended by the Department in 2001 and it was provided that, an applicant must have valid possession over the premises, in the area for which the vacancy has been notified.

b.       The premises must be permanent in nature and it should not have a back door/ side door or more than 1 door or shutter.

c.       The premises should be located at a central point and should be accessible to heavy traffic. The premises should preferably be located in a commercial area on a road which is at least 15 feet wide. There should not be an atta chakki adjoining the premises.

d.       The area of the premises should be at least 15 m². (the length, breadth and height of the premises should not be less than 3m. These dimensions may however be relaxed by the Commissioner in the interest of the smooth functioning of the public distribution system.)

e.       The applicant must be a resident of the area in which the vacancy has been notified, for atleast 1 year and he should attach a copy of the ration card, driving license, passport or Election I-Card as proof of residence.  The applicant must have a bank balance of Rs. 50,000/-.  The applicant must be a 10th Class pass from a recognized board and must attach proof in support of educational qualifications. The applicant should not be a proprietor/partner of a cancelled or current FPS.  The applicant must be between 18-60 years of age on the date of submitting the application. None of the family members of the applicant must be running a PDS outlet. 

v.       Instructions No. F.3(34)/2005/F&S/P&C/1330-1430 dated 20.03.2006 issued by the Office of the Commissioner Food Supplies and Consumer Affairs, Government of National Capital Territory of Delhi.

a.       This instruction contains the procedure to be followed while renewing the license granted to an FPS. An application in the prescribed form along with the prescribed fee is required to be submitted to the Circle Office, which is then verified by the Area Inspector/Circle FSO. The FSO is required to certify that the FPS has been physically inspected and is displaying all the required information. The FSO must also ensure that the FOS is submitting periodic returns for Antyodya Anna Yojana (AAY) commission. The FSO must confirm whether the license has been suspended/cancelled at any time within the last 3 years.

b.       The proprietor must be a local resident of the Circle and if not then reasons for the same must be set out.

c.       Details of the lifting position of the stock of the FPS in the previous 6 months must be checked.

d.       It must be checked whether the business premises of the FPS was shifted in the last 3 years.

e.       The size of the FPS must be checked.

f.        It must be confirmed whether any departmental action is pending against the licensee.

g.       If the licensee in a partnership firm there should not have been any change in the constitution without informing the competent authority.

h.       The licensee should not have been convicted under the Essential Commodities Act, 1955.

i.        The licensee should have a bank account in his/her name. Information regarding appointment of a salesman should have been furnished to the Circle Office. It should be ensured that the FPS licensee is maintaining the daily sales register. Details of any raid at the premises in the last 3 years and violations noticed must be set out.

vi.      Clause 11(3) of the PDS Order, 2001 confers on a person who is aggrieved by an order of the designated authority denying the issue or renewal of the license to the fair price shop owner, or cancellation of the license, the right to appeal to the Appellate Authority within thirty days of the date of receipt of the order and the Appellate Authority shall, as far as practicable, dispose off the appeal within a period of sixty days.

B.       Duties and Obligations of a Fair Price Shop Licensee:

 

i.        The PDS Order, 2001, under Clause 7 read with paragraph 5 of the Annexure to the Order lays down the procedure for issue of licenses or authorization to the fair price shops for the distribution of essential commodities under Public Distribution System. And duties and responsibilities of the fair price shop owners are provided.

a.       Para 5(i) provides that the essential commodities must be sold as per the entitlement of ration card holders and at the retail issue prices fixed by the concerned State Government.

b.       Para 5(ii) of the Annexure provides that each FPS will display the following information on a notice board which is to be put up at a prominent place in the Shop on a daily basis:-

(i)      List of BPL and Antodaya beneficiaries,

(ii)      Entitlement of essential commodities,

(iii)     Scale of issue,

(iv)     Retail issue prices,

(v)      Timings of opening and closing of the fair price shop,

(vi)     Stock of essential commodities received during the month,

(vii)    Opening and closing stock of essential commodities and

(viii)   The authority for redressal of grievances/lodging complaints with respect to quality and quantity of essential commodities under the Public Distribution System.

c.       This information is also required to be displayed in terms of the Order dated 06.04.2005 issued by the Commissioner, Food Supplies and Consumer Affairs. An additional detail required to be displayed in terms of the said order is the weekly off day for the shop.

d.       Under Para 5(iii) of the Annexure, a FPS owner is required to maintain records of ration card holders (APL, BPL and Antyodaya), stock register, issue or sale register.

 

e.       Para 5 (iv) requires the FPS owner to furnish copies of specified documents such as the ration card register, stock register, sale register to the office of the Gram Panchayat or Nagar Palika or Vigilance Committee or any other body authorized by State Governments for the purpose.

 

f.        In terms of Para 5 (v) the FPS owner is obliged to display samples of foodgrains being supplied through the fair price shop.

 

g.       Para 5(vi) provides for the production of books and records relating to the allotment and distribution of essential commodities to the inspecting agency and furnishing of such information as may be called for by the designated authority.

h.       Para 5(vi) deals with the accounting of the actual distribution of essential commodities and the balance stock at the end of the month to the designated authority of the concerned State Government with a copy to the Gram Panchayat.

i.        Para 5(vii) requires the Fair Price Shop to be opened and closed as per the prescribed timings displayed on the notice board.

j.        Clause 7(2) lays down that fair price shop owner shall not refuse to supply the essential commodities, lying in stock, to the ration card holders, as per their entitlement. Clause 7(3) provided that the fair price shop owner shall not retain ration cards after the supply of the essential commodities.

ii.       The Delhi Specified Articles Order, 1981, under Clause 9 imposes an obligation upon the FPS owner to sell SFA’s only against Consumer Cards registered with him and at the price fixed by the Central Government/Administrator. Para 12 of the Terms and Conditions for issuance of authorisation/licence in respect of FPS (which are annexed to the Order) requires that the FPS owner will not charge prices in excess of those fixed by the government.

 

a.       An FPS owner is required by Clause 19 (3) of the Order to maintain counter foils and such other records as may be prescribed by the Commissioner from time to time. Clause 19 (2) imposes an obligation upon the FPS owner to register consumer cards only after the holder of consumer card has signed or put his/her thumb impression in the space provided for the purpose on it and counter foil. While registering the card the fair price shop holder is required to put his number and serial number of registration on the consumer cards. Clause 19 (5) (a) and Clause 9 require the Shop owner to make sales only against ration cards.

 

b.       Clause 19 (6) of the Delhi Specified Articles Order, 1981 provides that the Commissioner / Deputy Commissioner may from time to time prescribe the manner in which the FPS owners are required to maintain records of purchase, distribution and sale of specified articles, registration of consumer cards and other documents. It is to be noted that Clause 4 of the order dated 06.04.2005 issued by the Commissioner confers on the consumers the right to inspect free of cost the registers and the cash memos free of cost.

 

c.       Clause 4(1) of the Delhi Specified Articles Order, 1981 empowers the Administrator or the Deputy Commissioner to suspend or rescind the authorisation issued under this Order to the FPS Owner, whether at the request of the person to whom an authorisation has been issued or on his contravention or attempt to contravene any of the provisions of the said order or directions issued thereunder from time to time in this behalf or any term or condition of the authorisation or any directions issued thereunder, after making such enquiry as may be deemed necessary without prejudice to any other action that may be taken against him. Without prejudice to such suspension/recession the security deposit of the FPS owner may also be forfeited under Clause 4(2). Clause 5 provides for the termination of the authorization under this Order to the FPS Owner. Clause 7 provides that where a FPS owner is convicted by a Court of law for contravention of any of the provisions of the DSA Order or any other order made under Section 3 of the Essential Commodities Act (10 of 1955) the Deputy Commissioner may by an order in writing cancel the authorisation of the FPS. However, if the conviction is set aside subsequently Clause 7(2) empowers the Deputy Commissioner to reissue the authorization upon an application made to him in this regard.

 

C.       Ration Cards

i.        The Government has for the purpose of issuing ration cards divided the target population into 3 broad categories, Above Poverty Line (‘APL’), Below Poverty Line (‘BPL’) and Antodaya Anna Yojana (‘AAY). Clause 2(d) of the Public Distribution System Order, 2001 defines 'Above Poverty Line Families' as those families which have been issued Above Poverty Line (APL) ration cards by the State Governments for issue of foodgrains under the Public Distribution System, Clause 2(g) defines 'Below Poverty Line families' as those families which have been identified by the State Government for issue of foodgrains at specially subsidized rates adopting the estimates of poverty given by the Central Government Clause 2(e) defines 'Antyodaya families' as the poorest families from amongst the Below Poverty Line (BPL) families identified by the State Governments. Such families are entitled to receive foodgrains under the Antyodaya Anna Yojana.

ii.       Clause 3 of the PDS Order states that State Governments shall identify families living Below Poverty Line as per paragraph 1 of the Order. Para 1(1) requires State Governments to formulate suitable guidelines for the purpose of identification of families living Below the Poverty Line (BPL), including the Antyodaya families, as per the estimates adopted by the Central Government. It is further provided that care be taken to ensure that the families so identified are really the poorest. Para 1(2) requires the State Governments to get the lists of BPL and Antyodaya families reviewed every year for the purpose of deletion of ineligible families and inclusion of eligible families.

iii.      Clause 4 of the Public Distribution Order 2001 requires the State Governments to issue distinctive ration cards to Above Poverty Line, Below Poverty Line and Antyodaya families and further mandate that a periodical review and checking of the ration cards be conducted as per paragraph 2 of the Annexure to the Order. Para 2(3) provides that State Government shall issue distinctive ration cards to APL, BPL and Antyodaya families.

iv.      Para 2(4) provides that the designated authority shall issue a ration card within one month of the date of receipt of the application after necessary checks and verification.

v.       Para 2(6) requires the State Government to conduct periodical checking of ration cards to weed out ineligible and bogus ration cards and bogus units in ration cards.

vi.      Para 2(8) lays down that elimination of bogus ration cards as well as bogus units in the ration cards shall be a continuous exercise by the State Governments to check diversion of essential commodities.

vii.     Circulars issued by the Department of Food Supplies and Consumer Affairs pertaining to the procedure for issuing ration cards.

a.       Circular No. F.3 (1)/2001/F&S/PPC/2001/276 dated 07.07.2001 states that from amongst the BPL families (i.e. those with an annual income of less than Rs. 24,200/- per annum) the poorest of the poor households i.e. those which are unable to secure two square meals a day at normal prices and are at the threshold of starvation are identifies as Antyodaya households. This Circular deals with the procedure for distribution of application forms, receipt of application forms and the disposal of the same.

b.       By a letter dated 16.03.2004, the Ministry of Consumer Affairs, Food and Public Distribution, Government of India, addressed to the Food and Civil Supplies and Consumer Affairs Department of all States and Union Territories, certain non-economic parameters (for e.g. living condition, education level, type of employment, status of children in the house etc.) for inclusion of families in the AAY category were laid down.  Each of these criteria were given different weightage and families were graded accordingly.

c.       By Order No. F.13(22)/2001/CFS(D)/Vol.III/1033 dated 19.08.2005 the coverage of the Antyodaya Anna Yojana was expanded to landless agricultural labourers, Marginal Farmers, rural artisans/craftsmen, slum dwellers and persons earning their livelihood on a daily basis in the informal sector, in both rural and urban areas, households headed by widows or terminally ill persons/disabled persons/persons aged 60 or more having no assured means of sustenance or societal support, widows or terminally ill persons or disabled persons or persons aged 60 or more, single women or single men with no family or societal support or assured means of sustenance, all primitive tribal households.

d.       Circular No. F.3 (1)/CFS(D)/Pt.File-III/2005/877 dated 10.08.2006 which deals with the procedure for issuing duplicate BPL cards lays down that the economic criteria for eligibility to a BPL card is that the income of the applicant must be below Rs. 24,200/- per annum.

e.       By Order No.F.13(25)/CFS(D)/2005293 dated 26.03.2007 the Office of the Commissioner Food Supplies and Consumer Affairs has directed all Assistant Commissioners to ensure that food grains are available at the Fair Price Shops till such time as all card holders have their allotted quota.

viii.     Clause 11 (2) of the PDS Order 2001 provides that 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.

 

D.      Bank Demand Drafts

 

i.        At present a Fair Price Shop owner is required to submit two drafts, every month. The first draft is submitted to the Department of Food Supplies and Consumer Affairs, Government of the National Capital Territory of Delhi for obtaining supplies of the Specified Food Articles and the second to the Delhi State Civil Supplies Corporation for transport of the Food Articles from the Food Corporation of India to the Shop.

 

ii.       With regard to the draft for the Specified Food Articles the Department vide Circular No. F.6(1)/CFS(D)/Misc/2005/1430 dated 16.11.2005 has directed all the Assistant Commissioners to divide the date of submission of drafts amongst the different Circles and that the 25th of each month will be the default date for submission of the drafts. It has also directed that all Food Supply Officers maintain records pertaining to the deposit of drafts in a Register, category-wise, i.e. APL/BPL/AAY on a monthly basis. A consolidated copy of the drafts submitted by the shop owners is required to be sent to the Headquarters of the Department by the 27th of each month in respect of the 1st fortnight and by the 12th of each month in respect of the 2nd fortnight.

 

iii.      By Circular No. F.6(1)/CFS(D)/Misc/2005/68 dated 19.01.2006, it was directed that the drafts should be drawn only from the savings/current account of the licensee and that the drafts should be submitted by an authorized Inspector of the Circle who will take a proper acknowledgment of having submitted the drafts to the FCI/DSCSC and submit the acknowledgment to the concerned Assistant Commissioner. The FSO is also required to ensure that quantity for which the draft is being submitted by the FPS is within its allocation.

 

iv.      By Circular No. F.6(1)/CFS(D)/Misc/2005/150 dated 13.02.2006 all Assistant Commissioners have been directed to ensure that 80% of the drafts are submitted within the first fortnight. The 25th of each month is the default date for the 1st fortnight and the 10th of each month is the default date for the second fortnight.

 

3.6     TRANSPORTATION

 

i.        Clause 21A of the Delhi Specified Articles Order, 1981 provides that the Owner or a person in charge of a goods vehicle shall carry with him a trip sheet in the prescribed Form-D and cash memo/Bill of sale in respect of such specified articles carried in the goods vehicle and produce the same for inspection on demand before the person(s) authorised under Clause 25 of the Order.

ii.       Vide Circular No. F.6(1)/CFS(D)/Misc/2005/1430 dated 16.11.2005 and Circular No. 6(1)/Misc./CFS(D)/2005/370 dated 27.03.2006 the Office of the Commissioner Food Supplies and Consumer Affairs has directed that Specified Food Articles must be made available in each FPS in the first week of each month.

 

iii.      In order to ensure that the delivery of the SFA’s at the Fair Price Shops is transparent, efficient and is made in a time bound manner, the Office of the Commissioner Food Supplies and Consumer Affairs by Circular F.6(1)/Misc/CFS(D)/398 dated 04.04.2006  has laid down that the DSCSC and the FCI should issue release orders immediately on the receipt of the drafts so that the SFA’s  for the next month reach the FPS within the next three days or at the latest by the 30th of the preceding month.  It has further been laid down that if the SFA’S are not delivered by the 30th of the preceding month the DSCSC should fix responsibility on the transporters concerned and forward an action taken report to the Office of the Commissioner during the 1st week of the month. Further, all Food Supply Officers are required to direct the Fair Price Shop Owners in their jurisdiction to put their authenticated signatures on the receipt as acknowledgement of having received the food grains i.e. on the weighment cum challan memo alongwith their rubber stamp containing the name of the FPS, license number and complete address of the FPS.

 

iv.      By Order No.F.13(25)/CFS(D)/2005293 dated 26.03.2007 the Office of the Commissioner, Food Supplies and Consumer Affairs has directed the FCI and the DSCSC to ensure that food grains are delivered to the Fair Price Shops within 7 days of the receipt of the draft.

v.       By Instructions bearing no. F. 15 (164) /2003 /PDSH.Q /Pt. File /DSCSC /3347 dated 26.02.2007 issued by the DSCSC to the godown incharges and transporters:-

 

·        The transporters are required to obtain the schedule of lifting and delivery of SFA’s from the officers of the Corporation.

·        The delivery of SFA’s is required to be made to the FPS by the transporters within three days of receipt of the release orders from the FCI.

·        The delivery of the SFA’s is required to be made at the FPS within 3 hours on the same day after departure from the FCI godowns.  The transporters have been directed to avoid delivery of the food grains during late hours.

·        Except in case of the prior written permission of the Corporation the transporters are required to unload the food grains only at the license premises of the FPS.

·        The transporters are required to collect from the Corporation the FPS’s copy of the release orders, samples of wheat and rice, given at the time of issue of the SFA’s and carry the same along with the stock to the FPS owner’s premises. A receipt is required to be taken from the FPS owner acknowledging the receipt of the Release Order and the sample on the back of the Weighment check memo.

 

IV.     DISBURSEMENT OF FOOD GRAINS TO THE CONSUMER

4.1     Opening of Sale

i.        Prior to commencement of distribution of the Specified Food Articles to the ration card holders the Officers of the Department are required to open the sale at the Fair price Shop. The procedure for opening of sale at the Fair Price Shop level, once the Specified Food Articles have been delivered to the FPS from the FCI, is laid down in Order No. PS/CFS/F&S/2005/128 dated 06.04.2005 issued by the Office of the Commissioner, Food Supplies and Consumer Affairs.

ii.       The Fair Price Shop owner is required to report the arrival of the food articles to the Food Supply Officer within three hours of the receipt of the stock indicating the quantity received and the time of receipt. The Circle FSO is then required to diarise the said information in a a register. The Area Inspector is then required to inspect the FPS within 3 hours of receipt of information and thereafter to record his visit in the receipt column of the Stock Register.

iii.      Vide Circular No. F.6(1)/CFS(D)/Misc/2005/1430 dated 16.11.2005 the Office of the Commissioner Food Supplies and Consumer Affairs has directed all Food Supply Officers to maintain details relating to opening of sale in the Fair Price Shops.

iv.      The Office of the Commissioner Food Supplies and Consumer Affairs by Circular F.6(1)/Misc/CFS(D)/398 dated 04.04.2006 has directed that Inspector Food and Supplies Department should open the sale after the 1st of the month after verifying the availability of stock.

 

4.2.    Entitlement of different categories of Consumers and Price Payable

 

i.        Clause 5 of the PDS Order 2001 lays down that the Central Government shall make available to the State Governments foodgrains for distribution under the Public Distribution System at such scales and prices as may be specified from time to time provided in terms of paragraph 3 of the Annexure to the Order.    

 

ii.       In terms of Order No. F.13(22)/CFS/(D)/2001/4 dated 01.01.2002 issued by the Department, an Antyodaya Anna Yojana cardholder is entitled to 20 kg of Wheat and 5kg of rice per month.  However, w.e.f. 01.04.2002 the entitlement has been raised to 35 kgs per family per month. Wheat is made available to AAY families at Rs. 2/kg while Rice is sold to them at Rs. 3/kg. By Order No. F.13(12)/2000/CFS(D)/25 dated 01.07.2002 it was laid down that an Annapooorna card holder is entitled to 10 kg of wheat per month free of cost.

 

iii.      An APL card holder is entitled to 25 kgs of Wheat at Rs. 6.80/kg and 10 kgs of Rice at Rs. 9 kg.

 

iv.      A BPL card holder is entitled to 25 kgs of Wheat at Rs. 4.65/kg and 10 kgs of Rice at Rs.6.15/kg.

 

V.       MONITORING THE FUNCTIONING OF THE PUBLIC DISTRIBUTION SYSTEM AND OTHER PROCEDURAL ASPECTS

 

5.1     Public Audit

 

i.        Para 6(9) of the PDS Order, 2001 states that the designated authority shall direct the concerned fair price shop owner to provide relevant extracts of the documents maintained by him on an application made by a beneficiary, on payment of a prescribed fee.

ii.       It is pertinent to note that Clause 7(4) of the PDS Order, 2001, confers on any ration card holder desirous of obtaining extracts from the records of a fair price shop owner, the right  to obtain the same by making a written request to such owner along with deposit of the fee specified by the State Government. Clause 7(4A) imposes an obligation upon the fair price shop owner to provide extracts of records to the ration card holder within fourteen days from the date of receipt of a request and the specified fee under sub-clause (4).

iii.      Para 6 (7) of the Order requires State Governments to 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.

iv.      Order No. 3(10)/2005/F&S/P&C/2368-2467 dated 15.06.2006 issued by the Commissioner, Food Supplies and Consumer Affairs lays down that Public Audit in all Circles would be conducted on all Saturdays except second Saturdays and gazetted holidays.

5.2     Inspections

 

i.        By order No. PS/CFS/F&S/2005/128 dated 06.04.2005 the Office of the Commissioner Food Supplies has directed the Officers of the Department to conduct monthly random inspections of Fair Price Shops in the following manner,

·        Area Inspector                  - 15

·        FSO                                 - 10

·        Assistant Commissioner     - 7

·        Additional Commissioner   - 5

 

ii.       By Circular No. 6(1)/Misc./CFS(D)/2005/370 dated 27.03.2006 the Office of the Commissioner, Food Supplies and Consumer Affairs has made it mandatory for all Food Supply Officers to conduct surprise checks on the opening of Sales of about 10% of the sales opened by the Inspectors on a random basis and submit a monthly report to the Assistant Commissioner. The Assistant Commissioners are required to conduct surprise checks/inspections of atleast 5% of the sales opened by the Inspector and send a report to the Commissioner.

 

VI.     COMPUTERISATION

 

i.        Para 6(6) of the Order requires State Governments to 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 and to issue for this purpose computerized codes to each FPS in the district.

 

VII.    VIGILANCE FRAMEWORK

 

a.       Clause 8 of the PDS Order 2001 provides that the procedure for monitoring of the Public Distribution System including the functioning of the fair price shops by the State Governments shall be as per paragraph 6 of the Annexure to the Order.

b.       Para 6 (1) of the Annexure to the PDS Order requires State Governments to ensure a proper system of monitoring of fair price shops and prescribes model sale register, stock register and ration card register. Para 6(2) requires State Governments to ensure regular inspections of fair price shops, not less than once in six months by the designated authority. State Governments may issue orders specifying the inspection schedule, list of check points and the authority responsible for ensuring compliance with the said orders. Para 6 (3) provides that meetings of the Vigilance Committees on the Public Distribution System at the State, District, Block and FPS level shall be held on a regular basis at such dates and periodicity as notified by State Governments. However, it is stated that the periodicity shall not be less than one meeting a quarter at all levels. Para 6(4) imposes upon State Governments the duty to ensure a periodic system of reporting and it further lays down that the complete information in this regard is be sent in the prescribed form as follows:

(i)      By fair price shops to the District Authorities by the 7th of the month following the month for which allocation is made in Form ‘A’.

(ii)      By the District Authorities to State Government by the 15th of the month following the month for which allocation is made in Form ‘B’.

(iii)     By the State Government to the Central Government by the end of the month following the month for which allocation is made in Form ‘C’.

 c.      Clause 6(8) lays down that State Governments shall issue and adopt the Citizen’s Charter based on the model Citizens Charter issued by the Central Government.

d.       By Order No. F.15(63)/CFS/D/2003/1050 dated 27.09.2006 the Commissioner Food Supplies and Consumer Affairs has on the recommendations of the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution, constituted a State Level Vigilance Committee consisting of 9 MLA’s , under the Chairmanship of the Minister food Supplies. The Commissioner, Food Supplies, Chairperson of the DSCSC and the Senior Regional Manager of the FCI are also part of the Committee. The main objectives of the Committee are to prevent black marketing and diversion of SFA’s, to attend to complaints regarding non-availability of food grains to the FPS, to suggest measures for the proper distribution of SFA’s by the FPS and to monitor cases of short supply, less weighment and distribution of sub-standard quantity of SFA’s by the FPS.

 

e.       By Letter No. PA/AS(E)/2007/F&S/72 dated 28.02.2007 it has been stated by the Additional Director (Enforcement) that at the District Level there is no Vigilance Committee.

 

f.        The Model Citizens Charter on the Targeted Public Distribution System requires the State Governments to constitute Vigilance Committees at the Shop/Panchayat, Block, District/Area and State/Union Territory level, associating persons from the Government, Social Organisations, Consumer Organisations and local bodies to review the functioning of the schemes and Fair Price Shops under the PDS.

 

g.       The National Capital Territory of Delhi has been divided into 70 Circles. In terms of Circular No. F.3(13)/94/CFS(D)/1399-1598 dated 19/20.04.1995, for each Circle an Advisory Committee is required to be set up consisting of 11 members under the Chairmanship of the area M.L.A with the Food Supply Officer as its Member Secretary. The objectives of the Committee include giving advise regarding streamlining of the PDS outlets, redressal of grievances of card holders, suggesting measures for deletion of inflated and ineligible units and suggesting ways and means to prevent diversion of SFA’s. This Committee is required to meet once a month and a copy of the minutes of the meeting is required to be circulated to all the members, Zonal Assistant Commissioners and the Assistant Commissioner(Distribution). The action taken on issues decided at the meetings is required to be reported to the Department.

         

h.       Circular No. F.3(13)/94/CFS(D)/1399-1598 dated 19/20.04.1995 also provides for the setting up of Vigilance Committees consisting of 5 members all of whom must be card holders attached to the particular FPS. (2 women members, 1 member from the SC/ST community, 1 social worker and 1 member from amongst consumers). The primary objectives of the Vigilance Committees include, attending to complaints regarding non-availability of food articles, preventing black-marketing, monitoring cases of short supply, sub-standard supply of food articles and suggesting measures for proper distribution of SFA’s. This Committee is required to meet once a month and a copy of the minutes of the meeting is required to be circulated to all the members, Zonal Assistant Commissioners and the Assistant Commissioner (Distribution) for monitoring the functioning of the Public Distribution System in the respective Circles. Letter No. F. 3(13)/94/CFS (D)/Pt. File/199 dated 25.02.2005 reminded all Assistant Commissioners that it is mandatory for all Circles to hold a meeting of the Vigilance Committee every month and to forward the action taken report to the Office of the Commissioner by the 5th of each month.

i.        However, in practice the Vigilance Committee and the Circle Advisory Committee meet jointly and issue joint minutes.

 

VIII.   SEARCH AND SEIZURE

 

i.        The Essential Commodities Act, 1955 provides that any essential commodity and any package, covering or receptacle in which the essential commodity is stored and any animal, vehicle, vessel or conveyance used for transporting the essential commodity may be seized and confiscated under Section 6A pursuant to an order passed under Section 3. However, prior to confiscating any essential commodity, package or vehicle, Section 6B requires that a show cause notice be issued to the person from whom it is seized.

ii.       The PDS Order 2001, under Clause 10 (1) empowers the authority authorised by State Government, to inspect or summon such records or documents as may be considered necessary for examination and take extracts or copies of any records or documents produced before it. Clause 10(2) lays down that if the authority has reasons to believe, on receipt of a complaint or otherwise that there has been any contravention of the provisions of the Order or with a view to securing compliance with the Order, it may enter, inspect or search the fair price shop or any premises relevant to transactions of business of the fair price shop. Clause 10(3) empowers the said authority to 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. Clause 10(3A) lays down that the authority conducting search and seizure under sub-clause (3) shall inform the State Government or an officer authorised by it in this behalf, about the details of the search conducted and the stocks of essential commodities so seized under that clause. Clause 10(4) lays down that the provisions of Section 100 of the Code of Criminal Procedure 1973, relating to search and seizure shall so far as may, apply to search and seizure under the Order.

iii.      Clause 25(1) of the Delhi Specified Articles Order, 1981 empowers the Commissioner or the Deputy Commissioner or any Magistrate or any officer of the Food and Supplies Department not below the rank of Sub Inspector or person or body of persons authorised by the Commissioner in this behalf to inter-alia inspect stocks, books, accounts or other documents pertaining to dealing in specified articles and for the purpose of such inspection enter to break- open or seal if necessary any premises used or believed to be used for the sale or distribution or storage of any specified articles on the premises of an establishment.

iv.      Clause 25(2) provides that the provisions of Section 100 Cr.P.C. will be applicable to searches and seizures made under this Clause.

IX.      APPEAL

i.        The Essential Commodities Act, 1955 under Section 6C provides that a person who is aggrieved by the confiscation of any essential commodity, package or vessel may file an appeal to any judicial authority appointed by the State Government concerned and the judicial authority shall, after giving an opportunity to the appellant to be heard, pass such order as it may think fit, confirming, modifying or annulling the order appealed against.

ii.       The PDS Order 2001, under Clause 11(1) provides that appeals (arising out of the denial of issue/renewal of ration cards, denial of issue/renewal of license to run a FPS) may be filed before the Appellate Authority appointed under Para 7 of the Annexure to the Order. Clause 11(4) provides that the appeal shall not be disposed off without providing the person aggrieved a reasonable opportunity of being heard. Clause 11(5) provides that the Appellate Authority may stay the operation of the order appealed against, pending disposal of the appeal or till such time as the person aggrieved is given a hearing as provided under Clause 11(4). Para 7 of the Annexure to the Order lays down that the State Governments shall appoint an officer of that Government not below the rank of Additional District Magistrate of a District as “Appellate Authority” for exercising the powers conferred upon and discharging the functions assigned under the PDS Order, 2001.

iii.      The Delhi Specified Articles Order, 1981 provides under Clause 6(1) that a person who is aggrieved by the cancellation/recession of the license/authorization in respect of an FPS or the forfeiture of his/her security deposit by the Deputy Commissioner under Clause 4(1) or (2) may prefer an appeal before the Commissioner within 30 days of receipt of the order. Clauses 6(2) to 6(6) deal with the procedure for filing and disposal of the appeal. Clause 6(7) provides that any person who is aggrieved by an order passed suo moto by the Commissioner revising an order passed by the Deputy Commissioner may file an appeal to the Financial Commissioner, Delhi. Clause 6(8) empowers the Administrator to call for and examine the records of any proceeding before the Deputy Commissioner, Commissioner or any other Officer and pass such orders as he may deem fit.

 

X.       IMPORTANT ORDERS PASSED BY THE HON’BLE SUPREME COURT IN W.P. (C) NO. 196/2001.

 

10.1        The Hon’ble Supreme Court by the order dated 02.05.2003 directed as follows,

i.        That the licenses of those fair price shop owners who do not keep their shops open throughout the month during the stipulated period, fail to provide grain to BPL families strictly at BPL rates, keep the cards of BPL households with them, make false entries in the BPL cards, engage in black-marketing or siphoning away of grains to the open market and hand over such ration shops to such other person/organizations, will be liable to be cancelled.

ii.       The Government of India was directed to place the under mentioned classes of persons in the AAY category,

a.                  Aged, infirm, disabled, destitute men and women, pregnant and lactating women,

b.                 Widows and other single women with no regular support,

c.                  Old persons (aged 60 years above) with no regular support and no assured means of support,

d.                 Households with a disabled adult and assured means of subsistence,

e.                  Households where due to old age, lack of physical or mental fitness, social customs, need to care for a disabled, or other persons no adult member is available to engage in gainful employment outside the house.

f.                   Primitive tribes

 

10.2   By the order dated 08.05.2002 the Hon’ble Supreme Court has directed that Shops will remain open during fixed hours.

* * *


CHAPTER 3

I.       PROCEDURE FOLLOWED FOR APPOINTMENT OF FAIR PRICE SHOP DEALERS/ LICENCEES

1.1             Guidelines for allotment of PDS outlet No.F.28(4)/97-F&S(P&G) dated 29.8.1997 stipulate as follows:

1.1.1      The norms for notification of a vacancy for setting up a FPS provide that there must be around 1000 food cards in case of fair price shop and in case of a KOD there must be about 1400 cards.  Relaxation of this norm is permissible in case of jhugi jhopri clusters and other areas inhabited by poorer sections of the society.

1.1.2      Whenever a new FPS/KOD outlet is required the Circle Food and Supply Inspector is required to submit a proposal containing a sketch plan of the entire locality, location of the existing fair price shop/kerosene oil depot along with clearly marked area and the number of units attached with each fair price shop or kerosene oil depot and detail of the proposed units to be linked with the new fair price shop and kerosene oil depot along with its economic viability.  The proposal is to be submitted to the District Assistant Commissioner with the recommendations of the Food and Supply Officer (‘FSO’).

1.1.3      The District Assistant Commissioner is to thereafter submit a proposal with his specific recommendation to the area Deputy Commissioner who in turn keeping in view the overall policy and the interest of consumer will submit the proposal to Commissioner, Food & Civil Supplies for the creation of a new vacancy.

1.1.4      On receiving the approval of the Commissioner, Food & Civil Supplies the vacancy will be assigned a category as per the roster to indicate whether the vacancy falls in the reserved category or the general category.  Thereafter, the Circle FSO will notify the vacancy on the first day of the month as per the prescribed Proforma and circulate it to all concerned.

1.1.5      The Circle FSO in the presence of the applicants who wish to be present at that time scrutinizes the applications received from the parties in the prescribed proforma.  After this, preliminary scrutiny accepted applications are to be entered into a register as Annexure – A and the rejected applications are to be entered into a register along with the reasons for rejection, which are to be recorded and authenticated by the FSO.  The Applications are thereafter sent to the Area Inspector for scrutiny and verification with reference to the terms and conditions of the eligibility indicated in Annexure B. 

1.1.6      The applicants are also given an opportunity to rectify deficiencies as per the deficiency memo given to them within the next 5 days.

1.1.7      The area inspector thereafter undertakes physical verification of the premises of each applicant, obtains the applicants’ comments on nature of action taken on the deficiency memos and also verifies the facts relating to the eligibility conditions and thereafter submits his report to the Circle FSO who is supposed to examine the bonafides of each applicant, his eligibility in terms of the departmental guidelines.  Thereafter, the proforma indicating the eligibility and bonafides of each of the applications is required to displayed on the notice board of the Circle Office on the 35th day from the date of notification or on the following day in case the 35th day happens to be holiday.  5 days time is given to the applicant or any person, for filing any objection/representation regarding the information to be displayed on the notice board.  The objections received are required to be examined by the Circle FSO who is required to place the complete report along with relevant documents including the comments on the objections before the Screening Committee comprising of the District Assistant Commissioner or the SDM and the Circle Food & Supply Officer.

1.1.8      This Committee is required to verify and determine the suitability and eligibility of each applicant and submit its report in a sealed cover within 10 days to the Selection Board which consists of:

i)                   Deputy Commissioner of Food & Civil Supply Department of the concerned area.

ii)       The area Deputy Commissioner of the concerned Revenue Department, and

iii)      Any one of the Deputy Commissioners from the Food and Civil Supplies Department nominated by the Commissioner, Food and Civil Supplies.

1.1.9      Thereafter, the Selection Board considers the report of the Screening Committee and submits its recommendations regarding the selection of the most suitable applicant by draw of lots amongst all applicants in case there is more than one applicant falling under the preferential category. A similar process is followed if there are more than one applicant in the general category.

1.1.10 These guidelines dated 28.8.1997 have undergone some changes with respect to the mode of selection of FPS dealers, composition of the Screening Committee and terms and conditions of eligibility for allotment of PDS outlets.  The Commissioner, Food & Civil Supplies and Consumer Affairs Govt. of NCT of Delhi vide No.F.28(4)/97-F&S(P&C)/99 dated 8th March, 2001 substituted the provision for selection of applicants  by draw of lots with assessing performance of applicants in case there is more than one application falling under  preferential categories through interview mechanism to be conducted by the Selection Board.  This interview mechanism would also be prescribed in case there was no eligible applicant from the preferential categories and if there is more than one eligible applicant.

1.1.11 The terms and conditions of the eligibility of the allotment of PDS outlets were further amended by order No. F.28(4)/97/F&S/F&C/104 dated 16th March, 2001.  This order further refines the eligibility conditions such as valid possession of the premises in the area where vacancy has been notified, location of the premises at a central point with floor area measuring 50 sq.m.  for FPS and 12 sq.m. for KOD, requirement of residence for at least one year in the concerned locality along with documentary evidence in support thereof, bank balance of Rs.50,000/- as evidence of financial soundness.  Other conditions of eligibility included education upto 10th class pass from a recognized board, ability to maintain book of accounts and non-association in any way with any FPS/KOD.  Other terms and eligibility conditions envisaged in 1997 orders such as requirements of not having been convicted under the Essential Commodities Act 1955, location of Atta Chakki not to be in the adjoining premises of FPS etc. have been retained in the Order dated 16th March, 2001.

1.1.12  The composition of the Screening Committee was also modified and made more specific vide Order No.F-28(4)/97-F&S/P&C/440 dated 17th July, 2003 of the Commissioner Food & Supplies and Consumer Affairs, to include area SDM, Assistant Commissioner of the Zone, Circle FSO and Area Inspector.  The Screening Committee was given the responsibility to inspect each and every premises of the applicants whose applications on the basis of documents furnished, have been found prima facie correct. Site inspection is required to be done in the presence of the applicant his or her authorized representative.  The site inspection report along with the photograph of the premise was required to be signed by all the members of the Inspecting Team including the applicant concerned.

1.2             To put it in a nutshell, the eligibility conditions as prescribed in these above referred guidelines are as follows:

A.      In respect of the Applicant:

 

1.                 The applicant must be a resident for at least one year in the circle in which the vacancy has been notified.  He should attach a copy of consumer card / driving licence / passport / election photo Identity card as proof of residence.

 

2.                 The applicant should be financially sound and must have a bank balance of Rs.50,000/- for allotment of FPS and also in the case of KOD, for which a bank certificate to this effect must be attached with an undertaking that the deposit amount shall not be withdrawn till finalisation of allotment.

 

3.                 The applicant should be a 10th class pass from a recognized board and should be able to maintain books of accounts.  A proof in support of the Educational Qualification should be attached with the application form.

 

4.                 The applicant should not be a proprietor or partner of a cancelled FPS/KOD nor should he/she be connected in any way with any FPS/KOD.  The applicant should also not be proprietor / partner of any FPS/KOD being run at present.  This condition, however, does not apply to the agencies run by the Government.

 

5.                 None of the family members, as defined by the Department of Food and Supplies from time to time, should have another licence under Essential Commodities Act, 1955.  An affidavit should be given by the applicant that none of his / her family member is running any PDS outlet, duly attested by a Magistrate or Gazetted Officer or Notary Public or Oath Commissioner or any officer authorized by the Head of State under the Oath Act.

 

6.                 The applicant should not have been convicted under the Essential Commodities Act, 1955.  He should enclose a Character Certificate from two reputed persons of the locality.

 

7.                 The applicant should be between 18 years and 60 years of age on the date of submitting the application.  In case of an ex-serviceman, age limit shall be 65 years.  The applicant should also attach a copy of an authentic document issued by the Govt./Govt. agency, as proof of age.

 

B.       In respect of Proposed Shop Premises:

 

1.                 The applicant should have valid possession over the premises in the area for which the vacancy has been notified.  The premises offered by the applicant should be of a permanent nature and should not have a back door/side door or more than one door/shutter.

 

2.                 The premises should be located at a central point and should be accessible to heavy traffic and should preferably be in a commercial area on a minimum 15 feet wide road.  The minimum floor area of the premises should be 15 square meter for Fair Price Shop (FPS) and 12 square meter for Kerosene Oil Depot.  The length, breadth and height of the premises in either case should not be less than 3 meters each.  The Commissioner, Food & Supplies may, however, relax these dimensions / sizes in the interest of smooth functioning of Public Distribution System (PDS) for reasons to be recorded in writing.  A sketch plan of proposed business premises indicating doors and road with setting out the dimensions should be attached.

 

3.                 In case of an FPS, there should not be a Atta Chakki in the adjoining premises and should the applicant be a licencee of food grains, wheat or edible oils, and in case of KOD there should not be any Halwai shop, Dhaba or any such fire hazard establishment in the immediate proximity.

 

C.       In respect of Partnership Firm

 

1.       If the applicant is a partnership concern, for a vacancy belonging to reserved category, then all the partners should also be from the reserved category and a certificate to this effect should be enclosed as proof.

 

D.      Other Misc. Conditions

 

1.       Preference shall be given to applicants belonging to nominated agencies of Government like Super Bazar / Kendriya Bhandar / DSCSC / DCCWS etc.  and the applicants belonging to the following categories:

 

(i)                Widows with dependent children

(ii)              Physically handicapped

(iii)            Freedom Fighters and their sons / daughters

(iv)            Co-operative societies

 

2.                 The applicant is required to abide by the conditions laid down under the Delhi Specified Articles (Regulation of Distribution) Order, 1981 / Delhi Kerosene Oil (Export & Price) Control Order, 1962 as amended from time to time as the case may be.

 

3.                 Applications should be submitted in the prescribed form obtainable from the Reception Counter of the Office of the Commissioner, Food & Supplies at ‘K’ Block, Vikas Bhawan, New Delhi against payment of Rs.5/- (Rupees Five only), in the form of TR-5 issued by the cashier of this department.

 

4.                 An affidavit that the applicant has read the terms and conditions for grant of the licence and undertakes to abide by them should be attached with the application.

 

1.3             Time period for completing the process of allotment of a PDS outlet. The Commissioner is required to review the vacancy every fortnight and the vacancy is required to be notified on 1st and 16th of every month. It is further stipulated that the vacancy would be re-notified in case there is no response for the earlier vacancy. The time frame prescribed for completion of the selection process is:-

                   Time                                                 Cumulative  

 

1.

Submission of the applications

15 days

15 days

2.

Visit of the area inspector and issue of deficiency memo plus submission of his report to FSO

 

 

10 days

 

 

25 days

2A

 

 

 

3

Removal of the deficiencies by the applicants to whom deficiency memo has been issued

 

Visit /examination by FSO

 

 

5 days

 

5 days

 

 

30 days

 

35 days

4

Display of the eligibility on the notice board of the Circle

35 days from the date of notification.

 

5.

Filing of objections

5 days

40 days

6.

Examination of the objections by the FSO

 

5 days

 

45 days

7

Submission of the report to the Assistant Commissioner

 

1 day

 

46 days

8.

Examination by the screening Committee and submission of Report to the Selection Board

 

 

10 days

 

 

56 days

9.

Report of the Select ion Board and Allotment of the outlet

 

10 days

 

56 days.

 

1.4             It would be seen from the above that the time period prescribed for the completion of the Selection Process needs to be substantial reduced to make it more efficient. The Committee is unable to appreciate why there should be a provision for issue of a deficiency memo when the parameters of eligibility are already known and only such applications are supposed to be short listed for consideration, which meet all the eligibility requirements. Again allowance of more time than necessary has been made in respect of visits of the area inspector and examination of the case by FSO as also consideration of the cases by the screening committee and the selection board. The committee is of the view that the following time schedule if strictly adhered with will serve the purpose of reducing wastage of time in various stages involved in the Selection Process.   

 

 Submission of Applications

10 days

Physical Verification of the premises and report                 by Area Inspector

3   days

Visit and examination by the Area FSO                     

3    days

Display of the eligibility on the notice board of the Circle Office.      

5    days

Filing of Objections                           

 

5    days

Examination of Objections by the FSO

3    days

Submission of the report by the FSO to the Assistant Commissioner

1     day

Examination by the Screening Committee and the submission of the report to the Selection Board

5    days

Report of the Selection Board and allotment of the outlet

7     days

Total days

42    days

 

 

1.5             This schedule compresses the selection process to 42 days as against 56 days as per the extant orders. The Committee is of the view that by reducing the present time frame prescribed for the selection process will make it more efficient and transparent.

 

1.6             The Committee had the occasion to interact closely with FPS dealers and FPS Associations, prominent NGO's working in the field as well as with the officials of the Food Supplies Department. Various view points were expressed on the specific issues relating to eligibility criteria particularly with regard to the number of food cards, whether applications should be restricted to the locality instead of the circle as at present and security deposit required from successful applicants.

 

1.7             On the question of number of food cards it is seen from the data provided by the Department of Food and Consumer Affairs that there is an unequal distribution of cards as is evident from the following table:

 

 

 

 

SL. No.

No. of Cards

No. of FPS

 

1

0

 

15[1]

2

1-100

 

61

3

101-200

 

33

4

201-500

 

353

5

501-1000

 

1251

6

1001-1500

657

7

1501-2000

 

238

8

2001-2500

 

105

9

2501-3000

 

49

10

3001-4000

 

16

11

4001-5000

 

4

12

Above 5000

4

 

1.8             The issue of number of food cards as also off take of food grains are directly related to viability of the FPS.   The Committee is quite concerned to notice that a majority of the FPS are having less than 1000 cards which also impacts their capacity to draw the prescribed quantum of food grains. The Committee appreciates that there may be exigencies warranting opening of an FPS even in a situation occasions when the number of 1000 food cards as per the guidelines is not fulfilled. The Committee however cannot fail to express its deep concern that violation of the prescribed norms for opening a FPS has become a rule rather than an exception. The Committee was informed that in a case of a fair price shop i.e. number 7148 in Circle 39 in East Zone, when the licensee surrendered his license in the year 2004-05, there were 4 fair price shops functioning in the area. The Department instead of attaching the cards originally attached to FPS No. 7148 equally to each of these 4 shops or giving more to the shop having lesser cards attached maximum cards to two shops (FPS Nos.5058 & 4099).  One shop out of the four was completely ignored (FPS No. 5802)[2]. It was one Kiran Pal Tyagi who had surrendered his FPS No. 7148. Tyagi in a meeting with the Committee alleged that it was on the recommendation of the higher officials of the Department that such selective attachment was done. In order to verify this statement of Tyagi the Committee on 23.4.2007 sent a letter to the Department of Food Supplies and Consumer Affairs seeking information on the above mentioned fair price shop. However no response has been received from the department in respect of the above mentioned query. The statement of Tyagi thus stands unrebutted. The question as to the number of cards, which an FPS should have to make it viable, and other issues connected with the viability of a FPS are discussed in detail in the chapter on viability.

 

1.9     On the limited issue of restricting the applicant base to locality rather than the circle, at present the Committee feels that it would better serve the interest of consumers if applicants are drawn from the respective localities. The advantage of introducing this change in the existing procedure would be to have someone who is familiar with the locality to run the FPS rather than to get some one from a distant locality, which is also a part of the same circle to come over and run the FPS. This may also help to reduce instances of a sort cartelization where one influential person manages to get hold of more than one shop within the same circle and run the same under different names.

 

1.9             As per the Office memorandum dated 21.1.1999 it was decided that whenever a vacancy would be notified the copy of the same would be sent to the area MLA along with the other department officials, therefore reflecting that the area MLA is not involved in the selection process directly but is kept informed about the notification of vacancies etc. It is not understood as to why it is necessary to intimate the area MLA when he is not involved in selection process and guidelines exist governing the process of allotment of a fair price shop.

 

II.      RENEWAL OF FPS LICENSE

 

2.1             Prior to 2006 all the licenses for the PDS outlets that were issued were for life. There was no procedure for renewal till 2006. In 2006 the Office of the Commissioner Food Supplies and Consumer Affairs, Government of National Capital Territory of Delhi issued instructions No. F.3(34)/2005/F&S/P&C/1330-1430 dated 20.03.2006 introducing the renewal procedure of FPS license which would be valid for a period of three years.

 

2.2             The procedure to be followed while renewing the license granted to an FPS is as follows a) An application in the prescribed form along with the prescribed fee is required to be submitted to the Circle Office, which is then verified by the Area Inspector/Circle FSO, b) The FSO is required to certify that the FPS has been physically inspected and is displaying all the required information, c) The FSO must also ensure that the FPS is submitting periodic returns for AAY commission, d) The FSO must confirm whether the license has been suspended/cancelled at any time within the last 3 years, e) The proprietor must be a local resident of the Circle and if not then reasons for the same must be set out, f) Details of the lifting position of the stock of the FPS in the previous 6 months must be checked, g) It must be checked whether the business premises of the FPS was shifted in the last 3 years, h) The size of the FPS must be checked, i) It must be confirmed whether any departmental action is pending against the licensee, j) If the licensee is a partnership firm there should not have been any change in the constitution without informing the competent authority, k) The licensee should not have been convicted under the Essential Commodities Act, 1955, l) The licensee should have a bank account in his/her name. Information regarding appointment of a salesman should have been furnished to the Circle Office. It should be ensured that the licensee is maintaining the daily sales register. Details of any raid at the premises in the last 3 years and violations noticed must be set out.

 

2.3             It is observed that the licenses of all the FPSs in Delhi were renewed during the year 2006 and currently the licenses are valid for a period of three years at the time. 

 

2.4             The Committee suggests that at the time of renewal of the license of the fair price shop, the department must also verify as to whether the fair price shop had defaulted in depositing the drafts as per the schedule laid down. If it is found that the fair price shop is a regular defaulter then the license of the said shop should not be renewed. Moreover the inspection reports of the FPS must be kept in view while considering the case of renewal. 

 

 

III.     COMMITTEE’S FINDINGS/ OBSERVATIONS

 

3.1             The Committee had the occasion to peruse some allotment files of fair price shops.  Upon examination of these files it was observed that there been blatant violation of norms and the allotments appear to be made on extraneous considerations: -

 

3.1.1      In case M/s Bhatti Ration Shop licensee of fair price shop no.  8998 located at Gali No.8 Village Gopalpur, Delhi it was found that a vacancy was notified on four different occasions but the department on all the four occassions received no response. Thereafter one Shri Jagdish Anand, MLA of Timarpur requested the Commissioner of Food and Civil Supplies vide his letter dated 24th April, 1999 that the category of vacancy may be changed since the residents of Gopalpur Village were facing great difficulties in getting ration as they have to cover long distance.  Subsequently, the Food & Supply Officer changed the category of the vacancy to general category on 15.5.1999 and the 5th notification was issued under the general category on 13.06.1999.  Three applications were received in response to this vacancy.  All the three applications were rejected by the Screening Committee, as these did not meet the prescribed norms.  However, it is seen from the file that the local MLA wrote a letter on 19.7.1999 recommending the case of the third applicant, Shri Devendra Kumar, proprietor of M/s Bhatti Ration Shop. The said shop owner did challenge the decision of the Screening Committee, which rejected his applications. It is observed that the Commissioner of Food and Civil Supplies finally allotted the fair price shop to Shri Devendra Kumar in February 2000. There is no indication in the file to suggest how the premises found unsuitable by the Screening Committee where subsequently found suitable for opening a ration shop.  There is also no indication on the file as to what guidelines were followed for converting an SC/ST category into a general category and the authority competent to take this decision. The role played by the local MLA in ensuring allotment of FPS to his nominee Shri Devendra Kumar requires to be noted.

 

3.1.2      In case of a fair price shop namely M/s Beer Store bearing FPS No. 8949, situated at 56, Village Gharvali Delhi the Screening Committee had rejected this application and the reasons were also communicated to the applicant.  However, it is seen that on the representation of the proprietor of M/s Beer Store a fair price shop was allotted to him by relaxing the norms.

 

3.1.3      In case of M/s Deepak Khadya Bhandar bearing FPS No. 8857 the perusal of the file shows that the applicant’s case was rejected initially by the Screening Committee.  The applicant in this case was M/s Deepak Khadya Bhandar.  This vacancy was again notified on 16.06.1997 and the only application received was from M/s Deepak Khadya Bhandar.  The Screening Committee in its meeting on 12.9.1997 this time observed that the applicant met all eligiblity requirements and a relaxation is required only in respect of the size of the shop.  It recommended this case to the Selection Board which in its meeting on 24.9.1997 also endorsed the recommendation of the Committee. This case illustrates how cases for allotment of fair price shops are examined and the decision taken in initially and how the decisions are reversed subsequently.

 

3.2             Perusal of the records in some cases like those of M/s Balaji Stores, M/s Rama Stores and M/s Goel Stores shows that the Screening Committee had rejected the application of Shri Rajpal Sharma of M/s Balaji Stores and of Smt. Rama of M/s Rama Stores for allotment of a fair price shop.  However, when the papers were put up to Deputy Commissioner he called for a discussion and thereafter these cases were submitted for approval without assigning reasons for a change in the stand.  In another case of Shri Ram Bhaj Goel of M/s Ankit Store, the Assistant Commissioner (Enforcement) has put on record how the area MLA is pressurizing for issue of a license to this person.  Subsequently, however, this person had withdrawn his application for allotment of a fair price shop.  Similar deficiencies were also found while perusing records pertaining to creation of vacancy in a number of cases and the files made available for inspection did not contain the particulars pertaining to the Screening Committee-cum-Selection Board and the proceedings held by the said Committees and the Boards.

 

3.3             The existing norm as regards the number of food cards per ration shop is 1000 food cards.  The off-take of foodgrains by a particular shop depends upon the number of food cards.  However, it is seen from records that a large number of shops are having food cards in excess of 1000 food cards.  For example, M/s Goel Stores, FPS No.8461 has 2525 APL and 28 BPL cards and M/s Sama Ram Store has 1969 APL cards. The rationale for exceeding the norms is not clear in such cases. It is therefore clear that there is no scientific basis for allotting more cards beyond the prescribed norm. This obviously impacts adversely on the viability of those fair price shops whose share of food cards is below the prescribed norm. The inescapable inference is that that the allotment of the fair price shops are made in violation of the guidelines and according to the whims of the officers and on extraneous considerations.

 

3.4             The Committee also visited a large number of fair price shops 23 fair price shops in Circles 1,5,9,33,35,36,37,55 and 56 between 10.2.2007 and 20.4.2007.  In order to verify whether the provisions of PDS Control Order 2001 as amended are being followed in letter and spirit.  As per the said Order each fair price shop is required to display the following information on a notice board which is to be put up at a prominent place in the shop on daily basis a) List of BPL and Antodaya beneficiaries, b) Entitlement of Essential commodities, c) Scale of issue, d) Retail issue prices, e) Timings of opening and closing of the fair price shop, f) Stock of essential commodities received during the month, g) Opening and closing stock of essential commodities and, h) The authority for redressal of grievances/lodging complaints with respect to quality and quantity of essential commodities under the PDS.

 

3.5             These instructions are not being generally complied with fully by the fair price shop owners.  The general deficiencies observed include non-maintenance of ration card registers and stocks registers in proper manner, non display of information on boards in a prominent place as required under PDS Control Order 2001, Non-adherence to of opening time and closing time as prescribed, existence of atta chaki in close proximity to the fair price shops in a number of cases, diversion of specified food articles, non return of ration cards to the consumers in number of cases, selling of special food articles at a price higher than that fixed by the Government, laxity on the part of the officials in not ensuring opening of the sale in their presence as required and running of the shops by persons other than the allottees etc. 

 

IV.     Broad Recommendations:

 

4.1             Streamlining the time to Dispose the Application: The Committee is unable to appreciate why there should be a provision for issue of deficiency memo when the parameters of eligibility are already known and only such applications are supposed to be short listed for consideration, which meet all the eligibility requirements. Further the time prescribed in respect of visit of the area inspector and examination of case by FSO as also consideration of the cases by the screening committee and the selection board is excessive.  The proposed schedule mentioned in Para 2.3 compresses the selection process to 42 days as against 56 days as per the extant orders. The Committee is of the view that by reducing the present time frame prescribed for the selection process will make it more efficient and transparent.

 

4.2     Under the current eligibility conditions in respect of residence as per Order No. F.28(4)/97/F&S/F&C/104 dated 16th March, 2001 issued by the Department of Food and Civil Supplies the applicant should be a resident of the Circle in which one of the areas has been notified for vacancy.  The Committee is of the view that the same should be amended and instead of the applicant being a resident of the circle, he should be a resident of the locality, for which the vacancy is notified. The advantage of introducing this change would be to have someone who is familiar with the locality to run the FPS rather than to get some one from a distant locality, which is also a part of the same circle to come over and run the FPS. This may also help in eliminating instances of a cartelization by influential persons who hold of more than one shop within the same circle and run the same under different names.

 

4.3     It has been observed that the Department has been unable to implement the guideline dated 29.8.1997 which clearly states that a vacancy should only be created when there is an excess of around 1000 cards in an area. The Committee suggests that the Department should follow the criterion for checking of a vacancy strictly else the viability of the shop might get affected. The issues pertaining to the minimum number of cards and other related issues has been discussed in the chapter on viability of FPS as the fixation of minimum number of cards is related more to viability of FPS. 

 

4.4             It is submitted that the Department a new vacancy for a fair price shop should only be allotted to cooperative societies or Women Self Help Groups.

 

4.5             The Appellate Authority under the PDS Control Order must be manned by a judicial authority who is independent of the Department.

 

4.6             The card position in all the FPS must be rationalised in a time bound manner so that each FPS has no more and no less than 1000 cards. If there is any departure from this criteria reasons must be recorded on the file.


CHAPTER 4

 

VIABILITY OF FAIR PRICE SHOPS

 

I.       INTRODUCTION

 

1.1             The Hon’ble Supreme Court of India by its order dated 12.07.2006 while constituting the Central Vigilance Committee directed the Committee to focus on the ideal rate of commission to be paid to the licencees of the Fair Price Shops.  The Committee in this respect invited suggestions from the general public including licencees of fair price shops.  The Committee held several many meetings with various Fair Price Shop Owners Associations was to ascertain from them the income they earn from the sale of Specified Food Articles as also the expenditure incurred by them in this respect.

 

1.2             Before setting out the various suggestions received by the Central Vigilance Committee and giving its findings recommendations. it is pertinent to explain how commission is paid to licencees of fair price shops. 

 

2.       EXISTING SYSTEM

 

2.1             In terms of Para 3 (1) of the Annexure read with Clause 5 of the PDS (Control) Order, 2001[3], the Central Government is to make food grains available to the State Governments at a particular price that is specified from time to time.

 

2.2             The State Government further allocates these food grains to the fair price shops at the prescribed prices.  The fair price shop then sells the Specified Food Articles at the rate prescribed by the State Government.

 

2.3             At present the rates at which SFAs are dispensed to cardholders is as follows[4]:

Retail Prices for card holders (as on 31.12.2006) (In Rs.)

 

Commodity

APL

BPL

Antyodaya

Wheat (per kg.)

6.80

4.65

2.00

Rice (per kg.)

9.00

6.15

3.00

Sugar (per kg.)

Not entitled

13.50

13.50

Kerosene (per litre)

9.09

9.09

9.09

 

 

2.4             Under the current system a fair price shop buys APL Wheat at the rate of Rs. 610/- per quintal from the Government and sells the same at Rs. 680/- per quintal to the cardholders. As a result a fair price shop owner earns Rs. 70/- per quintal. Out of this amount the fair price shop has to pay Rs. 35/- per quintal to the Delhi State Civil Supplies Corporation (DSCSC) towards cost of transportation of the Specified Food Articles. Similarly in case of Rice under APL category the fair price shop buys it at Rs. 830/- per quintal and sells it Rs. 900/- per quintal. Therefore the fair price shop owner has a balance of Rs. 70/- per quintal out of which Rs. 35/- per quintal is to be paid towards transportation cost. The balance amount of Rs. 35/- per quintal becomes the commission on the sale of the Specified Food Articles in respect of APL category[5].

 

2.5             In respect of the BPL category the fair price shop buys Wheat at the rate of Rs. 415/- per quintal and sells the same at Rs 465/- per quintal. Therefore the fair price shop gets Rs 50/- per quintal from the sale of Wheat.  Out of this Rs. 15/- per quintal is paid to DSCSC as transportation charges.  Similar is the case in respect of BPL Rice where the fair price shop buys it at Rs. 565/- per quintal and sells the same at Rs. 615/- per quintal and a transportation cost of Rs. 15/- per quintal is paid to the DSCSC. Therefore the fair price shop in case of BPL earns a commission of Rs. 35/- per quintal[6].

 

2.6             In case of AAY the Delhi Government bears the cost of transportation and also pays the commission to the fair price shop licencee. The fair price shop gets a commission of Rs. 35/- per quintal from the government under this category as well[7].

 

2.7             Therefore a fair price shop owner gets a commission of Rs. 35 on the sale of Wheat and Rice in respect all three categories. In case of sugar that is supplied only to the BPL and AAY categories, a fair price shop earns a commission of 10p per Kilo[8]. The following table reflects the existing system as stated in the above paragraphs.

(Please See Table Overleaf)

 


 

TABLE SHOWING THE COMMISSION EARNED BYFAIR PRICE SHOP

(CATEGORY WISE)

 

Category

Cost Price per Quintal

Selling Price   per Quintal

Difference B/w Cost Price and Selling Price

Cartage paid to DSCSC per quintal

Commission per quintal paid to FPS

APL Wheat

Rs. 610/-

Rs. 680

Rs. 70/-

Rs. 35/-

Rs. 35/-

 

APL Rice

Rs. 830/-

RS. 900

Rs. 70/-

Rs. 35/-

Rs. 35/-

BPL Wheat

Rs. 415/-

Rs. 465

Rs. 50/-

Rs. 15/-

Rs 35/-

 

BPL Rice

Rs. 565/-

Rs. 615/-

Rs. 50/-

Rs 15/-

Rs. 35/-

 

AAY Wheat

Rs. 200/-

Rs. 200/-

Nil

Rs. 15/- paid to DSCSC by Delhi Government

Rs. 35/-

paid to FPS by Delhi Government

AAY Rice

Rs. 300/-

Rs. 300/-

Nil

Rs. 15/- paid to DSCSC by Delhi Government

Rs. 35/-

paid to FPS by Delhi Government

 

 

III      INCOME ON THE BASIS OF THE EXISTING RATE OF COMMISSION PAYABLE TO THE FAIR PRICE SHOP LICENCEES

 

 

3.1             As per the circular dated 29/8/1997 issued by the Department of Food and Civil Supplies a vacancy for a fair price shop would ordinarily be notified for about 1000 cards. Therefore normally a fair price shop must have a minimum of 1000 cards attached to it. However, it has been observed that there are about 1600 fair price shops which have less than 1000 cards as indicated in the table in Para 5.6 of this said chapter.

3.2             Every cardholder irrespective of the category is entitled to 25 Kgs of Wheat and 10 Kgs of Rice every month. Therefore a fair price shop having 1000 cards will be entitled for 250Qtls of Wheat and 100Qtls. of Rice.

 

3.3             Apart from the income earned through the commission the fair price shop sells empty gunny bags in the open market, which is sold at Rs. 5/- per bag.

 

3.4             Therefore if a fair price shop having 1000 cards attached to it gets its full allocation as per the entitlement then following would be the income that the fair price shop would earn:

 

1.

Total No. of cards:

1000

 

2.

Total Allocation (Both Wheat and Rice)

350Qtls.

(250 Qtls of Wheat and 100 Qtls of Rice)

 

3.

Commission per Quintal

Rs. 35/-

 

4.

Total Income generated from commission

350 Qtls X Rs. 35 =  Rs. 12250/-

 

5.

Total Number of Gunny Bags

700 bags (Each bag has a capacity of 50 Kgs. of grains)

 

6.

Income from Sale of Gunny Bags (Rs. 5/- per bag)

 700 x Rs 5/- = Rs. 3500/-

 

7.

Total Income (4 + 6)

Rs. 15750/- per month

 

 

3.5             However it has been found that the Central Government is not releasing full allocation in respect of APL cardholders. Presently only 35% of the total entitlement is released in respect of the APL cards or in other words Government is releasing around 8.28 Kgs per APL Card in respect of Wheat whereas in case of Rice it is releasing 5Kg per APL Card. In case of BPL Card holders, there is a 100% allocation done by the government[9].

 

3.6             As per the information available on Department’s website, as on 31.12.2006 it has issued a total number 22, 85,513 APL cards 3, 78,947 BPL cards and 57, 336 AAY cards. However in the data provided by the Department to the Committee in their letter dated 5/6/2007 in respect of card wise position of all the fair price shops the total APL cards is shown as 23,27,804 cards, BPL cards as 3,75,523 and AAY cards as 53,789. The proportion of APL cards to BPL cards after comparing both the provided above is 6:1. Assuming that the BPL and APL cardholders are equally distributed then out of the 1000 cards the proportion of APL and BPL cards in a fair price shop should be around 857 and 143 respectively on an average.

 

3.7             Therefore as per the present allocation given by the Central Government mentioned in Para 3.4, a fair price shop having the assumed card position would have the following income:

 

1.

Total Allocation of Wheat (APL)

(857 cards x 8.28 Kg) =7095.96 Kgs OR 70.95 Qtls.

 

2.

Total Allocation of Rice (APL)

(857 cards x 5kgs) =4285 Kgs Or 42.85 Qtls

 

3.

Total Allocation of Wheat (BPL)

(143 cards x 25Kgs)   = 3575 Kgs Or35.75 Qtls

 

4.

Total Allocation of Rice (BPL)

(143 cards x 10Kgs) = 1430 Kgs Or 14.3Qtls

 

5.

Total Allocation of 1000 cards = (1+2+3+4)

 

163.85 Qtls

6.

Total Gunny Bags (One bag has 50Kgs.)

 

327 bags

7.

Income (Rs. 35 per Quintal)

163.85 Qtls x 35 = Rs. 5734.75/-

 

8.

Income from sale 327 bags (at the rate of Rs.5 per bag)

 

Rs. 1635

9.

Total income from (S.No. 7 + S.No. 8)

Rs. 7369.75/-

 

 

3.8             The above calculation shows that the income reduces by more than 50% due to the low allocation by the Central Government in the APL category. A perusal of the department’s letter dated 5/6/2007, pertaining to the card position fair price shop wise, would show that there are many fair price shops having only APL cards and no BPL and AAY cards. Therefore, in case a fair price shop has 1000 APL cards then the income generated would be as follows:

 

1

Total No of Cards

1000

 

2

Total Allocation of Wheat (8.28 Kgs per card

8280Kgs or 82.80 Qtls

 

3

Total Allocation of Rice (5 Kgs per card)

 

5000 Kgs. Or 50 Qtls

4

Total Income Allocation (2+3)

132.80 Qtls.

 

5

Total Income on the Specified Food Articles (Rs. 35 per quintal)

 

Rs. 4648/-

6

Total No of Gunny bags

264/-

 

7

Income from sale of Gunny Bags (5 per bag)

 

Rs. 1320/-

8

Total Income earned (S.No. 5 + S.No. 7)

Rs. 5968/- per month

 

 

3.9             It is observed that the number of food cards attached to a shop and the allocation of foodgrains have a direct bearing on the income of the fair price shop. The fair price shop manages to save only Rs. 35 per quintal after paying the cartage charges to the DSCSC. Therefore the Commission of the fair price shop is Rs. 35 per quintal. This is the only figure in the above calculations that is constant.

 

3.10        Apart from the payment of cartage charges to DSCSC, a fair price shop incurs other expenses to maintain the shop. The estimated expenditure of an fair price shop in a month which is based on interactions with various interest groups is as follows:

 

i.                    Rent of the Shop                                                     = Rs. 1500/-

(most of fair price shop operate from rented premises)          

ii.                  Draft Commission payable to bank once in a month    = Rs.   250/-

iii.                Electricity Charges                                                   = Rs.   400/-

iv.                Stationery (cash memo, receipt Books etc)                  = Rs.   200/-

v.                  Salary paid                                                              =Rs  2500/-

vi.                Labour Charges (Jhunga) that has to paid to the

labours who unload Specified Food Articles                =Rs.1000/-           ___________

vii.              Total                                                                     = Rs. 5850/-

  ___________        

 

3.11        The above expenditure indicates that a fair price shop does not earn more than Rs 2000/- to Rs. 3000/- per month after deducting all the expenditure thus making it financially uneconomical/ unviable.

 

IV      SUGGESTIONS RECEIVED BY THE CENTRAL VIGILANCE COMMITTEE

 

4.1             A common strain of opinion that emerged in the meetings held by the committee and representations received from the fair price shop licencees was the need to increase the commission rate on the ground that the allocation of Specified Food Articles’ is lower than actual entitlement as a result the fair price shop licencees earn after meeting all the expenditure for running the shop.

 

4.2             In a meeting with the Delhi Fair Price Shop Dealers and Consumers Association held on 6.4.2007, Shri D.C. Kataria President of the Association stated that currently the fair price shop owners are paid a commission is too low and thus it needs to be increased.

 

4.3             Shri B.M. Gupta, President of the Ration Dealers Association in meetings held on 23.5.2007 and 31.07.2007 and through his representation dated 24.5.2007 also expressed the view that the Commission of the fair price shop is far too low in comparison to the expenditure the fair price shop incurs every month. Shri Gupta further in his written representation gave a Statement of Income and Expenditure of a fair price shop in a month. 

 

4.4             In the said statement Shri. Gupta has shown an income of Rs. 6,995/-. The said income is calculated on the basis of 120 Qtls of Wheat and 35 Qtls of Rice. The Commission rate is Rs. 35 per quintal, whereas he has shown an expenditure of Rs. 19,571/-, showing a loss of 12,576/-. In his representation he suggested that the commission of the fair price shop should be increased to Rs. 70/- per quintal to ensure that the fair price shop becomes financially viable. In order to increase this commission Shri Gupta stated that the transportation cost should be reduced from Rs. 35/- per quintal to Rs. 15/- per quintal and the difference would increase the commission of the fair price shop. He further stated that the State Government could then grant an additional amount of Rs 20/- to the fair price shop as commission that would be borne by the consumers. In other words he stated that the commission of the fair price shops should be increased by Rs. 35/-. Therefore the total commission that the fair price shop would get in a month would be around Rs. 70/- per quintal. 

 

4.5             Mr. B.K. Taimni, former Secretary Food, Government of India check a meeting held on 28.02.2007 suggested that the fair price shop owners should lift their stock directly from the FCI. He further stated if the said alternative is implemented then not only can responsibility be fixed on the fair price shop for any malpractice but also the expenditure of the fair price shop would get reduced.

 

4.6             Dr. N.C. Saxena, Commissioner appointed by the Hon’ble Supreme Court in Writ Petition No. 196 of 2001 to assist the Hon’ble Chairman of the Committee in a meeting on 3.3.2007 with the Hon’ble Chairman stated that instead of allowing a fair price shop to sell other commodities to increase its viability it would be better if the distribution of Specified Food Articles’ were handed over to a person who is already in business. According to him it would be better for a person already in business to carry out PDS activities rather than asking already a financially unviable fair price shop owner to add more commodities to this business. However he stated that the said person already in business should not be involved in selling of Wheat and Rice.

 

4.7             Ms. Aruna Roy and Mr. Nikhil Dey in a meeting with the Hon’ble Chairman held on 13.4.2007 stated that the viability of a FPS depends on the number of persons purchasing ration from it and not sell of additional commodities by the shop.

 

4.8             Mr. Kirpal Singh Tyagi, Member of Delhi Ration Union (An Association of fair price shop owners) in a meeting with the Hon’ble Chairman on 23.4.2007 stated that it is to be ensured that a Fair Price Shop owner earns at least Rs. 10,000/- after meeting the expenses incurred by him in running the shop. He was of the opinion that it was due the losses that the fair price shop owners suffer that most of the owners of fair price shops to divert the Specified Food Articles to the open market.

 

4.9             In a meeting held on 30.4.2007, Mr. Kejriwal from Parivartan stated that the commission given to the fair price shop should be such that it generates an income of Rs. 12,000/- to 15,000/- per month. He further stated that consumers should have the option to buy Specified Food Articles’ from any fair price shop they want. He also stated that the fair price shop should get allocation on the basis of the sale done by it in the previous month. According to Mr. Kejriwal this system would encourage competition among the fair price shop owners leading to better quality of service to consumers, which will contribute towards viability of the fair price shop that delivers better service. He further handed over a rough calculation of the income and expenditure of a fair price shop.  The said statement deals with income and expenditure of 48 fair price shops functioning in Delhi, highlighting certain features such as a fair price shop does earn a profit at the end of the month after incurring expenses on running of the shop but the profit margin varies from shop to shop. The statement alludes to bribe that a fair price shop owner pays to police and department officials. This increases the expenditure of the fair price shop and reduces its viability.  The statement alleges that there is a fixed bribe Rs. 1200/- paid every month to police inspector, whereas Rs. 1000/- is paid every month to circle inspector. 

 

V.       FINDINGS OF CENTRAL VIGILANCE COMMITTEE

 

5.1             There are systemic factors plaguing the prevailing system owing to which the profitability and the viability of the fair price shops is being eroded.

 

5.1.1      Prevailing Regime:

 

A.      Supply of stock at the Fair Price Shops

 

i.                    Clause 4(5) of the Annexure to the PDS Control Order, 2001 provides that the government would make monthly allocations to a fair price shop taking into consideration balance stock if any lying undistributed with the fair price shop for the subsequent allocations. The data for the same is collected in terms of Para 6(4) of the annexure to the PDS Control Order, 2001 read with Clause 8 of the PDS Control Order, 2001.

ii.                  Clause 6(2) of the PDS Order, 2001 read with Para 6(4) of the Annexure imposes the obligation on the State Governments to ensure that the stocks of essential commodities must reach the Fair Price Shops in the first week of the month for which the allocation is being made.

iii.                The Office of the Commissioner Food Supplies and Consumer Affairs has by Circulars dated 16.11.2005 and 27.03.2006 mandated that all Assistant Commissioners must ensure that the stocks of the Specified Food Articles are available at the fair price shops in the first week of the month and has further required that they shall give a certificate to that effect.

iv.                By Circular dated 04.04.2006 the Office of the Commissioner Food Supplies and Consumer Affairs has stated that the DSCSC and the FCI should issue release orders immediately on receipt of the drafts so that the Specified Food Articles’ reach the fair price shop’s within 3 days or latest by the 30th of the preceding month. This Circular further provides that if the Specified Food Articles’ are not delivered at the fair price shop by the 30th of the preceding month the DSCSC should fix the responsibility on the transporter concerned.

 

B.       Deposit of Demand Drafts

 

i.        The Office of the Commissioner Food Supplies and Consumer Affairs by Circulars dated 16.11.2005 and 27.03.2006 has provided that all Assistant Commissioners must ensure that the quantity for which drafts were submitted does not exceed the allocation of the Specified Food Articles’ to a shop.

ii.       By Circular dated 19.01.2006 the Office of the Commissioner Food Supplies and Consumer Affairs has provided that the Assistant Commissioners must ensure that all drafts received be properly diarised and also that the amount for which the draft has been made is within the allocation of the fair price shop.

 

5.2             After considering the existing set up and the suggestions that have been received from the various sections of the society it is observed that the fair price shops are not financially viable. On the basis of the inputs received by the Committee, this is attributable to factors such as:

a)                 Delay in supply of Specified Food Articles

b)                 Losses suffered by fair price shop owners due to blockage of capital.

c)                  Losses on account of short supply

d)                 Unequal Distribution of Cards

e)                 High Transportation Cost 

f)                   Commission too low to generate a moderate income.

g)                 Unforeseen Expenses like bribe paid to police and Department officials

 

5.3             Delay in supply of Specified Food Articles: The primary problem confronting the fair price shop’s licensees today is that despite deposit of demand drafts, the Specified Food Articles’ do not reach the shops within the prescribed time period. This delay may be caused by any one or all of the following reasons,

 

i.        After drafts are collected from the different fair price shops in a circle, time is consumed by the officers (area inspector, FSO, Assistant Commissioner) in collating them and forwarding them to the FCI,

ii.       The FCI takes time in issuing the release order,

iii.      The DSCSC delays giving the clearance to the transporters to load the stock into the trucks and deliver them to the fair price shop.

 

5.4             Losses caused as a result of blockage of capital: Owing to the delayed delivery of stock the fair price shop licensees suffer losses,

 

i.        The working capital invested by them for the payment towards the cost of stock and cost transport gets blocked for long periods, resulting in loss of interest on this capital. In many cases, the licensees may have obtained loans for this purpose. The licensees have to pay the interest at market rate on the loans obtained by them.

ii.       The licensees also have to pay commission charges to the Bank for having the drafts prepared. Apart from the said commission charges there are other hidden expense such as the time, effort and money consumed in going to the Bank, getting the draft made and thereafter taking the draft and submitting it with the Circle Office.

 

5.5             Losses on account of short supply: The fair price shop owners allege that very often there is short supply of SFAs and in some cases inferior quality is supplied to them. As far as the quantity is concerned an automated computerized system, which eliminates the present weight, check memo system may be a possible solution. The automated system would indicate as to the exact amount sent from the FCI to the shop, which can in turn be confirmed, online by the shopkeeper.

 

5.6             Unequal distribution of cards: The data provided by the department by its letter dated 5/6/2007 indicates there is unequal distribution of Food Cards.  Therefore the viability of a fair price shop also differs from shop to shop. The following table brings forth the unequal distribution of Cards[10] as obtaining in Delhi. 

 


SL.

No.

Range of Cards

No. of FPS

 

1

0

 

15

2

1-100

 

 

61

3

101-200

 

33

4

201-500

 

353

5

501-1000

 

1251

6

1001-1500

 

657

7

1501-2000

 

238

8

2001-2500

 

105

9

2501-3000

 

49

10

3001-4000

16

11

4001-5000

 

4

12

Above 5000

4

 

5.6.1      After perusing the above table it is clear that majority of the fair price shops have a card position between 500-1000 cards. However at the same time there are fair price shops having more than 5000 cards, and there are fair price shops having no cards at all.  Therefore, this unequal distribution of cards is one of the main causes contributing to the viability of a fair price shop. This unequal distribution of cards also results in unequal income among the fair price shops.

 

5.6.2      The Commissioner of the Department of Food and Consumer Affairs, Government of NCT in a meeting with the Hon’ble Chairman of Central Vigilance Committee on 25.4.2007 stated that the unequal distribution of Cards attached to the fair price shop is caused by a variety of factors like density of the population, considerations of convenience of the public in an area etc.  The Committee during its visits to fair price shops observed that there are instances of shops in close proximity to one and another and such having average number of cards less than 1000 cards.[11] As mentioned in the chapter dealing with mode of appointment of dealers of fair price shops it appears that when a fair price shop licensee gets suspended or resigns then the Department officials link ration cards of that shop to other existing shops manipulating the procedure that is to be followed at the time of such linking.  The Committee could not find any justification for the stand taken by the Commissioner, Food, Supplies and Consumer Affairs, Government of NCT that this depends on density of population in the area, convenience of the beneficiary and location of the shop, as to why 657 fair price shops were having cards between 1001- 1500; 238 between 2001-2500; 49 between 2501 – 3000: 16 between 3001 – 4000; and 4 between 4001-5000. All this is against the norm of 1000 cards for fair price shop.  

 

5.7             High transportation cost: One of the main factors affecting the viability that the fair price shop owners have indicated before the Committee is the high cost of transportation. It has been observed above that the DSCSC is charging Rs. 35/- per quintal in respect of APL and Rs. 15/- per quintal in case of BPL. In case of the AAY category the Delhi Government pays the transportation charges. As discussed in detail in the chapter on transportation it is noticed that the largest element of cost of transportation charged by DSCSC is the administrative expenses of DSCSC and big profit, which the DSCSC earns from the transportation of PDS goods. There is no reason why fair price shops should be asked to contribute towards the establishment cost of DSCSC, which, in fact, is eroding the profitability of the fair price shops. It has also been observed that DSCSC awards contract to private transporters through tenders. The DSCSC[12] stated that the rate at which the contracts have been awarded, varies from Rs.6.22/- Rs. 25.50/-. It further stated that in most cases the cartage rate is higher than Rs. 15/- in case of BPL and AAY category as a result it has to bear loss in these categories. However, according to DSCSC it compensates this loss with the profit it earns in APL category.  It is also stated in the letter that sometimes when the transporters are not able to cope with the additional demand/ allocation then the DSCSC itself hires truck at higher rates and supplies the Specified Food Articles to fair price shops.

 

5.7.1      A perusal of the PDS Control Order, 2001 more particularly clause 4(6) of the Annexe to the PDS Control Order requires the State Government to provide door delivery of food grains to the FPS. In the light of this statutory scheme there is no justification for the government especially in case of BPL to charge any transportation cost from the fair price shop. 

 

5.8             Low rates of commission: It has been observed that all the fair price shop owners have stated that the commission they are getting is far too low for them to meet their daily requirements. It is found that this low rate of commission acts as a compulsion for diversion of the Specified Food Articles. It is been seen from the calculations made above in the chapter that the present rate of commission is Rs. 35/- per quintal. This rate is sufficient to make a fair price shop viable provided there are 1000 cards attached with the fair price shop and there is full allocation. When the above two conditions are fulfilled then a fair price shop has a reasonable income above Rs. 10,000/- not only to meet his expenses of the shop even thereafter. However, it has been observed that both these conditions are not fulfilled and that has resulted into unequal distribution of income and on an average income of fair price shop is less than 10,000/-. Therefore, it can be said that majority of the fair price shops do not earn sufficient income to make themselves viable. 

5.9             As far as unforeseen expenses mentioned above in Para 5.2(g) is concerned the Committee states that this is on account of the existing ground realities.

 

VI.     FINDINGS AND SUGGESTIONS MADE IN OTHER REPORTS

 

6.1             Programme Evaluation Organisation

 

A.      The Planning Commission through the Programme Evaluation Organisation (PEO) conducted a study on the Targeted Public Distribution System in March 2005[13]. In its report the PEO took viability of a fair price shop as one of the subjects for evaluating the performance of the Targeted Public Distribution System. The PEO for the purpose of analysis collected data of 240 fair price shops from 18 states in the country. It is pertinent to mention that Delhi was not a part of the sample study.

 

B.       The PEO during its qualitative analysis of the profitability of the fair shops reported that 75.88% of the owners of the fair price shops felt that running the shop was not at all profitable. Some of the reasons for the non-profitability of the shops were as follows:

 

(i)      Low Commission (93.33%)

(ii)      High Cost of Overheads (38.46%)

(iii)     Under Weighment at the supply point (25.13%)

(iv)     Poor Quality of PDS items (13.85%)

 

C.       The PEO considered the following determinants to evaluate the viability of a fair price shop:

 

(i)                Number of ration cards attached to the shop

(ii)              Margins on the commodity

(iii)            Cost incurred on transport and handling of goods, rents etc.

 

D.      The PEO in its report also stated that the term viability would mean that a fair price shop should have at least a turn over of 12% from the sale of the grains. It further stated that ensuring viability of the fair price shops was critical to the sustenance of public distribution system retail trade and minimising leakages/diversions of the grains.

         

E.       Following are the measures suggested by the PEO in its study to improve the viability:

 

i.                    Licensing of the fair price shops needs to be rationalised. According to PEO a fair price shop only becomes viable if it has certain minimum turnover. The PEO suggested that each state must draw its region/district wise policy for making the fair price shop viable.

ii.                  The fair price shop level’s margin should be fixed at 2% of economic cost.

iii.                Reduction of the issue price of the APL households by at least unit cost of holding buffer stock as to induce them to lift the food grains.

iv.                To allow BPL cardholders to lift additional grains apart from there entitled quota at APL rates.

v.                  Opening of fair price shops in public buildings. According to PEO this would help in reducing one of the major overhead costs of a fair price shop.

vi.                The PEO suggested that the level margin of the fair price shop should be fixed in relation to their economic cost to ensure uniformity in the margin structure and to improve their viability.

vii.              The PEO in its suggestions further stated that simulation exercises on the profits of the shops suggested that policy package of pegging fair price shop’s level margin at 2% of the economic cost of food grains, providing for doorstep delivery of food grains, full rental subsidy and removing supply constraints so that a fair price shop could handle 122 tonnes of grains every year would ensure that 89% of the shop on the country would be viable in the sense that the fair price shops would be able to earn 12% on their capital.

viii.            The PEO also suggests that in order to ensure that shop owners’ sustenance as a full time PDS dealer it is necessary to give the freedom to the owners of the fair price shops to trade in non-PDS items under strict surveillance.   

 

6.2     India Corruption Study 2005 to Improve Governance Vol II:

Corruption in Public Distribution System (PDS)

 

i.        An organisation called the Centre for Media Studies conducted a study on corruption in the country in June 2005. One of the sectors covered under the study was the Public Distribution System. Apart from discussing the various aspects on the problems of in the system, the study also reflected the view of the service providers i.e. fair price shop owners.  The organisation claims that their survey is the largest survey ever undertaken in the country. A sample of 14,405 respondents spread across 20 states was taken and from each state 525-950 persons were interviewed. During the study around 141 cities and 306 villages were covered.  They also contend that their survey is based on a unique methodology. Firstly, it aims at both perception and experience and secondly, outlook of service provider is taken into account.

 

ii.       Following are the problems indicated in the study that a fair price shop owner faces:

a.                  The margins of the fair price shop are too low and with the introduction of the Targeted Public distribution System the volumes of grains have also fallen.

b.                 The credit provided is too low and sometimes it is very difficult for the fair shop owners to lift their quota.

c.                  The fair price shop receives poor quality grains from the government and they have to bear all the blame.

d.                 The supply of the food grains to the fair price shops is never on time and thus affects their viability.

e.                  The fair price shops have to pay bribes to the officials to get their allocation for the month.

 

VII     SUGGESTIONS ON COMMISSION RATES/ VIABILITY OF FAIR PRICE SHOP

 

7.1             It is submitted any suggestion to improve the viability of the fair price shop or increase in the commission rates has to take into account two factors namely, it should not place additional burden on the Government requiring it to increase the subsidy or on the cardholders requiring them to pay higher prices. Therefore the following suggestions are submitted keeping the above two factors in view.

 

7.2             E-Banking: By utilizing the ECS facility offered by Banks, the delays in depositing money with the FCI could be tackled and delay involved in obtaining demand drafts could be avoided. This process can be implemented in the manner as stated in the chapter on computerisation.

 

7.3     Computerisation: It is submitted that an automated system as discussed in the chapter on computerisation needs to be implemented in the PDS, which would have healthy impact on the viability of the shops and also minimise corruption.

i.                    Fair Price Shop: The figures of daily sales made by all fair price shops can be uploaded on a daily/weekly basis on to a web site. On the basis of these figures, the officers at the Circle office can determine the amount of stock available with the fair price shop at the end of the month and accordingly the entitlement of the fair price shop for the following month can be fixed without the FSO/Area Inspector having to physically visit each shop and verify the stock position. This will save the time consumed in this process

ii.                  Transportation: The trucks transporting the stock from the FCI to the fair price shop’s can be tracked using the Global Positioning System (GPS). This will enable the authorities in fixing responsibility on the transporters if the stock does not reach the fair price shop the same day.

iii.                The automated system would indicate as to the exact amount of SFAs sent from the FCI to the shop, which can in turn be confirmed, online by the shopkeeper.

iv.                As far as quality certification is concerned a possible solution could be that a representative nominated by the fair price shop dealers association or some such recognized body can be present at the time of loading of the goods who would have a right to stop loading if the goods do not match the sample.

 

7.4             Fixing of responsibility for delayed delivery:

 

i.                        If there is a delay in delivery of stock, the stage at which the delay has occurred must be identified and responsibility must be fixed.

 

ii.                        The loss caused due to the delayed delivery must be paid in the 1st instance by the Government to the fair price shop licensee and thereafter recovered from the salary of the official who is responsible for the delay (whether he is working with the FCI, DSCSC or the Department of Food supplies). If delay has occurred on part of the transporter, the loss must be recovered from him and if it occurs more than twice in a year, the security deposit may be forfeited or the contract should be terminated.

 

7.5     Additional source of income:  It is observed that under the current norms a fair price shop is allowed to sell restricted items. The department by its circular dated 13.5.2005 has allowed the fair price shops to sell a restricted list of items which are like Edible Oils, Vanaspati Ghee, Iodised Salt, all kinds of pulses, Candles, Spices, Soaps, Detergent Powder, Tooth Paste and Tea Leaves.   During the visits to many fair price shops the Committee found that most of the fair price shops are not engaged selling those commodities. During the course of the committee’s meeting with shop owners associations, one suggestion, which emerged, was that they should be allowed to sell fruits and vegetables. The Committee also feels that there should be no restriction on fair price shop dealers to sell any other items except commodities, which are supplied under the Public Distribution System.  The Government can consider allotting them PCO and STD booths to the FPS licensees. The Government can grant them loans at very low interest to establish some business in the premises. The fair price shop may be given permission/ license to collect the payment of bills in respect of the amenities like the electricity on behalf of the Government authorities against which they can be given some commission. These are some of the ways that would help the fair price shop to have additional income thus improving the viability of the fair price shop.  These suggestions if implemented, would improve the viability of fair price shop by not putting any extra burden either on the Government or the Consumers. This will also give an incentive to the fair price shop to keep the shop open through out the month.  It is relevant to point out that the said experiment has been successful in the State of Gujarat.

 

7.6             Increasing the rate of commission: As observed a fair price shop owner gets Rs. 35/- per quintal as commission from the sale of Specified Food Articles. It has been observed that unless the fair price shops get full allocation it would not earn enough commission to maintain it viability. Another factor that the Committee has observed is that there is unequal distribution of cards and therefore the income varies from one shop to another. The suggestion of increasing the rate of commission under the prevailing circumstances in a manner that the income of the fair price shop should be around Rs 10,000/- to Rs15,000/- per month may not be possible as it has been observed there is unequal distribution of cards which thus would lead to a situation where some fair price shop would have a higher income whereas some will earn lesser income.

 

7.7             If the rate of commission is to be increased then the question that would arise is as to who would bear the burden of this additional increase in cost. If the cost price i.e. the price at which the Government sells to fair price shop owners is decreased then the subsidy granted by the government would increase. If the selling price is increased i.e. the rate at which the Specified Food Articles are sold to the consumers then it is a direct burden on the poor people, which again is not acceptable. The Commissioner of the Department of Food and Consumer Affairs, Government of NCT and the Chairman of DSCSC both on many occasions have stated that the consumers should not be burdened with any additional cost.  Therefore the Central Vigilance Committee suggests that increasing the rate of commission should not be looked upon as the only option for making the fair price shop viable.

 

7.8             Reduce Transportation Costs: The committee recommends that a FPS owner should not be asked to contribute towards the establishment cost of DSCSC. The Committee further recommends as far as BPL is concerned the government must bear the responsibility to provide door delivery of food grains to the FPS at its own cost. This obligation arises from the PDS Control Order itself where in clause 6(3) read with clause 4(6) of the annexe to the PDS Control Order 2001, a duty is cast on the authorities to ensure physical deliveries of SFA’s to the fair price shops. Further in the 9 point action plan formulated by the Government of India door step delivery has been highlighted as one of the urgent measures to prevent diversion. Once the State Government undertakes this obligation the FPS owner is relieved of the burden of paying a sum of Rs. 15/- per quintal towards transport for BPL which amount automatically increases his profit.  As far as APL is concerned, since the committee is recommending its elimination there is no need to make any comment.  It is relevant to point out that by letter dated 10th December 2002 the Government of India removed the then existing restriction that the difference between retail issue price and central issue price should not be more than 50 paise. Therefore the States can rationalize their price structure keeping in view the actual transportation expenses and incidental charges. 

 

7.9             Rationalisation Of Cards: It is submitted that the one of the primary reasons affecting the viability of the fair price shop is the unequal distribution of the ration cards. It is submitted that the department should make an attempt that the card position of the fair price shops should be rationalised and an attempt should be made to ensure that the each FPS should have at least 1000 cards as prescribed in its norms.

 

7.10        Amalgamation of kerosene oil depots and fair price shops: During the visit to Mumbai it was observed by the Committee that the Fair Price Shops functioning in Mumbai are also allowed to sell kerosene oil. The owners fair price shops in Mumbai stated that they were satisfied with the income they are getting from the sale of both the oil and grains. Therefore it is suggested that the department may examine to amalgamate the Kerosene Oil depot and fair price shop as one unit, in other words allow the fair price shop to sell kerosene oil as well.  The Committee is however conscious of the fact that distribution of kerosene (KOD) is an equally discredited and corrupt system.

 

VIII.   Conclusion

 

8.1     The Committee is of the view that it is food grain meant for APL, which is diverted. As we have seen, many fair price shops manage to get only APL cards attached to the shop. These fair price shops do not want additional cards namely BPL/AAY for the obvious reason that they indulge in diversion of foodgrains and not in sale to the beneficiaries. This is borne out by the fact when the committee visited a fair price shop in Karbala Area[14] and asked the owner who had only 374 APL cards and 34 BPL cards if he would like to have more cards, however he declined saying that they were adequate. It is obvious that he cannot run a viable shop with such limited number of cards. 

8.2     A fair price shop must remain open during the whole of the month with or without supply. In order to ensure that the fair price shop remains open during the entire month it would be more appropriate for a fair price shop to sell articles of daily consumption other than wheat and rice. The Committee recommends that a FPS owner should not be asked to contribute towards the establishment cost of DSCSC. The State Government under the Control Order, 2001 is obliged to provide for door step delivery which necessarily means that it would bear the burden of transportation, especially for the BPL category. It is said that old habits diehard.  One wonders whether the resultant extra earning by the fair price shop owners would discourage them from diverting the food grains and sell the same in the black market?     

 


CHAPTER 5

 
VIGILANCE AND COMPLAINT MECHANISM

 

1.                 Although the Public Distribution System (Control) Order, 2001 (as amended in 2004) provides for Monitoring and Vigilance over the Public Distribution System, inquiries made by the Central Vigilance Committee reveal that transportation and distribution of Specified Food Articles i.e. Wheat and Rice (“Food grains”) the functioning of Fair Price Shops (“FPS” or “FPSs”) in the Public Distribution System in Delhi is afflicted by rampant corruption and malpractices.

 

1.1.          The Central Vigilance Committee visited 28 FPSs in different areas of Delhi. The discrepancies/irregularities noticed with regard to the functioning of the said FPSs included FPSs remaining closed during working hours i.e. 11:00 AM to 1:00 PM and 3:00 PM to 7:00 PM; absence/improper maintenance of statutory Registers like Ration Card Holder Register, Stock Register and Daily Sale Register; absence of samples of Food grains at the FPSs; presence of unaccounted quantity of Food grains at the FPS; the FPS being actually run by a person other than the allottee thereof; fabrication of records; denial of Food grains to Ration Card Holders; non-compliance with various instructions of the Department; unauthorised possession of Ration Cards; and diversion of Food grains. It may also be noted that these discrepancies are also in clear violation of the guidelines laid down by the Supreme Court of India.[15]

 

1.2.          According to a status report received from the Department of Food Supplies & Consumer Affairs (“Department”), Government of National Capital Territory of Delhi (“Delhi Government”) on 26/04/2007[16], departmental action has been or is proposed to be taken against the following FPSs for various discrepancies and irregularities that were noticed by the Central Vigilance Committee during visits to these Shops:

 

(i)      FPS No. 9097 (M/s Mohit Store).

(ii)      FPS No. 2133 (M/s Banarsi Dass Ram Kumar)

(iii)     FPS No. 8740 (M/s Madan Lal Suresh Kumar)

(iv)     FPS No. 7572 (M/s Ashok Kumar)

(v)      FPS No. 7849 (M/s Mahalaxmi Store)

(vi)     FPS No. 3013 (M/s Narayan Lal)

(vii)    FPS No.  3415 (M/s Duli Chand Mittal)

(viii)   FPS No.  7387 (M/s Anil Kumar)

(ix)     FPS No. 5284 (M/s Gori Shanker)

(x)      FPS No. 5691 (M/s Anand Prakash Bansal)

(xi)     FPS No. 5099 (M/s Ishwar Dass Kanhiya Lal)

(xii)    FPS No. 8915 (M/s Thakur Store)

(xiii)   FPS No. 1118 (M/s Fazaluddin)

(xiv)   FPS No. 1142 (M/s Jagdish Prasad Aggarwal)

(xv)    FPS No. 7235 (M/s Mohar Singh)

           

1.3.          The owner of a FPS made several disclosures regarding the actual practices adopted by FPSs in Delhi during a Meeting held on 11/05/2007[17] at the office of Central Vigilance Committee. His allegations pertained to illegal gratification, sale of Food grains in open market, false entries in Sale Registers towards concealment of malpractices and nexus between FPSs, transporters and officials.

 

2.       EXISTING GRIEVANCE REDRESSAL MECHANISM IN  PUBLIC DISTRIBUTION SYSTEM IN DELHI   

 

2.1.    Before dealing with specific aspects pertaining to Vigilance and Monitoring including Vigilance Committees and examining modalities for improving their functioning and maximizing the effectiveness of action that can be taken on the reports of such Vigilance Committees, it would be appropriate to briefly state the existing grievance redressal mechanisms in Delhi that pertain to Public Distribution System.

 

2.2.    The grievance redressal mechanisms in Delhi pertaining to the Public Distribution System may be dealt with under two heads:

 

(A)     Statutory/Departmental Remedies

 

(B)     Other Remedies

 

2.3.    Statutory/Departmental Remedies

 

          These are the remedies that are incorporated in the Public Distribution System (Control) Order, 2001 (as amended in 2004) issued under the Essential Commodities Act, 1955 and various Departmental Circulars / instructions and guidelines.

 

2.3.1.    Public Distribution System (Control) Order, 2001

 

2.3.1.1.   Clause 8 and Para 6 of the Annexe to the Public Distribution System (Control) Order, 2001 specifically provide for monitoring and vigilance including constitution of Vigilance Committees. This aspect has been dealt with in greater detail subsequently in this Chapter. It is pertinent to mention here that the Delhi Specified Articles (Regulation of Distribution) Order, 1981 does not make any specific provision for such Vigilance Committees.

 

2.3.2.    Vigilance Committees under the Public Distribution System (Control) Order, 2001

 

2.3.2.1.   The Public Distribution System (Control) Order, 2001 makes a specific provision in respect of Vigilance Committees under Public Distribution System. Para 6 (3) of the Annexe to the Public Distribution System (Control) Order, 2001 provides for regular meetings of Vigilance Committees at the State, District, Block and FPS levels on a regular basis. The relevant provisions in this regard are set out in greater detail hereinafter for easy reference.

 

2.3.2.2.   Clause 6 of the Public Distribution System (Control) Order, 2001,  deals with distribution of Food grains by Food Corporation of India to the State Governments or their nominated Agencies. The procedural aspects in respect thereof have been dealt with in Para 4 of the Annexe to the Public Distribution System (Control) Order, 2001.

 

2.3.2.3.   In Para 4 of the Annexe to the Public Distribution System (Control) Order, 2001, the following provisions are relevant for the purposes of this Chapter:

“(3)    The designated authority of the State Government shall ensure delivery of one copy of allocation order made to the fair price shop simultaneously to Gram Panchayats or Nagar Palikas or Vigilance Committees or any other body nominated for monitoring the functioning of the fair price shops by the concerned State Government and such order shall specify:-

(i)      Number of cards and units;

(ii)      Balance in hand; and

(iii)     Allocation made for each month in respect of a fair price shop.

(4)     Gram Panchayats or Nagar Palikas or Vigilance Committees or any other body nominated for monitoring the functioning of the fair price shop by State Governments shall display the stocks of essential commodities allotted during the month to the fair price shops on a notice board outside their office.”

 

2.3.2.4. Clause 8 of the Public Distribution System (Control) Order, 2001 provides as follows:                               

         

“The procedure for monitoring of the Public Distribution System including the functioning of the fair price shops by the State Governments shall be as per paragraph 6 of the Annexe to this Order.”

 

2.3.2.5.   Para 6 (3) of the Annexe to the Public Distribution System (Control) Order, 2001 makes a specific provision in respect of Vigilance Committee and provides as follows:

“(3) Meetings of the Vigilance Committees on the Public Distribution System at the State, District, Block and Fair Price Shop level shall be held on a regular basis. The date and periodicity shall be notified by State Governments However, the periodicity shall not be less than one meeting a quarter at all levels.”

 

2.3.3.    Public Audit, Public Hearings etc.

2.3.3.1. Order No.PS/CFS/F&S/2005/128 dated 06/04/2005 issued by the Commissioner, Food & Supplies, Department contains several instructions to the concerned officials of the Circles and Districts in Delhi.  These instructions, provide for:

(i)                            Public Hearings by the Food & Supplies Officers twice a month on the first and third Saturdays of the month between 2 to 5 P.M.

(ii)                          Disposal of all complaints in a time bound manner.

(iii)                        Installation of Complaint Box by the Assistant Commissioners / Food & Supplies Officers in their respective office complex and proper registration of the complaints found therein in the Complaint Register.

(iv)                        Facilitating easy access to the ration cardholders to records of FPSs. 

(v)                          “Public Audit” in the Northeast and East District of Delhi, to be subsequently extended to all FPSs in all the District of Delhi in a phased manner.

 

2.3.3.2.   Order No.3(10)2005/F&S/P&C/759 – 846 dated 26/05/2005, issued by  Commissioner: Food Supplies & Consumer Affairs, extends “Public Audit” to all the Districts of Delhi. The Order,  details the methodology/manner in which Public Audit shall be conducted including, deposit of records by FPSs, supervision and follow up action that may be required to be taken pursuant to such Public Audits. The Order also encloses therewith a set of guidelines for conducting Public Audits. 

 

2.3.3.3.   Order No.3(10)2005/F&S/P&C/2368-2467 dated 15/06/2006 of the Department,  directs that Public Audit would be conducted in all the Circles on all Saturdays except 2nd Saturday and Gazetted Holidays in terms of the guidelines already issued.

 

2.3.4.      Circle Advisory Committee

 

2.3.4.1    Circular No.F.3(13)/94/CFS(D)/1399-1598 dated 19-20/04/1995 of the Department (“Circular”) comprehensively deals with the constitution of Circle advisory Committees. The Circular, provides that:

 

(a)      Circle Advisory Committees shall be reconstituted due to reorganization of the various Circles in Delhi by the Delhi Government. The reconstitution shall be completed in consultation with the area MLAs by 15/05/1995.

 

(b)     The main objectives and functions of the Circle Advisory Committee shall be as follows:-

Ø      To advise about streamlining the functioning of the Public Distribution System outlets.

Ø      Redressal of grievances of the cardholders as well as Public Distribution System outlet holders.

Ø      To suggest objective methods for deletion of inflated and ineligible units.

Ø      Suggest ways and means to prevent diversion of Food grains and Kerosene Oil.

 

(c)      The Circle Advisory Committee would comprise of Eleven members, with the area MLA and the Circle Food & Supplies Officer acting as the Chairman and Member Secretary, respectively. The remaining members would be chosen from amongst the residents of the area and the representatives of the FPSs Association, if any.

 

(d)     Meetings of the Circle Advisory Committee would be ordinarily convened once in a month by the Member Secretary in consultation with the Chairman.

 

(e)      The minutes of the meetings would be formally drawn and circulated to all the members.

 

(f)      The action taken on the issues decided in the meeting will be reported to the Department.

 

2.3.4.2. It is manifest from Order No. F.3(13)/94/CFS(D)/Pt.File/732 dated 08/10/2004 issued by the office of the Commissioner: Food Supplies & Consumer Affairs to all Additional Secretaries, F&S that Circle Advisory Committees were not constituted in all the Circles as the Order directs all the  Assistant Commissioners to identify the Circles where Circle Advisory Committees have not been constituted and do the needful.

 

2.3.5. Citizens Watch Committees for all FPSs

 

2.3.5.1. Order bearing F.No.3(1)/FSO(D)/2006/PT/1133 dated 13/10/2006 issued by the Commissioner: Food Supplies & Consumer Affairs, comprehensively deals with the constitution of a Citizen’s Watch Committee for each FPS and Kerosene Oil Depot functioning from the notified areas of Circle; composition thereof; minimum qualifications of the members thereof; the manner of nomination of the members to the Committee and their training; and duties of the Committee.

 

2.3.5.2. In terms of the aforesaid Order, every Citizen’s Watch Committee shall consist of five prominent members of the concerned locality and one member shall be a woman. Preference would be given to social workers/volunteers. The members should represent APL, BPL and AAY category Ration Card Holders. Further, each member of such a Committee shall be at least a Matriculate and shall have a food card (Ration Card) attached to the concerned FPS.

 

2.3.5.3. The duties of these Committees, includes monitoring distribution of Food grains, availability of Food grains, quality and quantity, lodging complaints, visiting FPSs and participating in Public Audits.

 

2.3.5.4. However, according to the Commissioner: Food Supplies & Consumer Affairs[18], the initiative taken by the Department in respect of Citizen’s Watch Committees has not been a success.

 

 2.3.6.   Enforcement Branch of the Department Of Food Supplies & Consumer Affairs

 

2.3.6.1. According to a Note received by the Central Vigilance Committee from the office of Commissioner: Food Supplies & Consumer Affairs on 20/04/2007 titled as “Enforcement Branch: An overview”, the prime responsibility of the Enforcement Branch is to enforce the various control orders issued by the State Government under the Delhi Specified Articles (Regulation of Distribution) Order, 1981 apart from enforcing the specific duties and obligations under the Public Distribution System (Control) Order, 2001 and Delhi Specified Articles (Regulation of Distribution) Order, 1981. The powers and duties of Food & Supplies Officer (Enforcement) and Inspector (Enforcement) have been detailed in letter No. F.21/F&S/Enf/2007 dated 04/05/2007 of the Enforcement Branch.  

 

2.3.6.2. According to the aforesaid Note dated 20/04/2007, the Enforcement Branch, inter-alia, consists of 10 Inspectors as against the sanctioned strength of 20 to 25 Inspectors. An Officer of the rank of Food & Supplies Officer heads this Branch. However, in a later meeting, the Commissioner: Food Supplies & Consumer Affairs[19] stated that all the vacant posts in the Enforcement Branch have since been filled up.  

 

2.3.6.3. According to the aforesaid Note, the functions of the Enforcement Branch are primarily based upon public complaints that are received, inter-alia, from the Control Room and/or referred from Ministers’ Offices, Office of Commissioner: Food and Supplies or some other Government/private agency (telephonically or in writing). The complaints so received are segregated on the basis of the gravity of allegation contained therein before appropriate action is initiated thereon at the level of the Enforcement Branch or the concerned Assistant Commissioner.  Teams consisting of two Inspectors each are deployed to inspect FPSs against whom there are complaints. The Inspectors are assigned this task with a proper deployment slip duly signed by the competent authority and entries to this effect are also made in the movement register maintained in the Enforcement Branch. At times, when the volume of complaints is excessive, the Food & Supplies Officers/Inspectors from various Circles are deputed as parallel Enforcement Team to investigate.   The complaints, which are of the general nature, are periodically referred to the concerned Assistant Commissioners for appropriate action under intimation to the Enforcement Branch. 

 

2.3.6.4. According to the Note titled as “Enforcement Branch: An overview”, an Anti-Hoarding Cell also forms a part of the Enforcement Branch. This Cell consists of one Sub Inspector, one Head Constable and One Constable. It is pertinent to mention here that at present, the personnel of the Anti Hoarding Cell are deputed from the Delhi Police.

 

2.3.6.5. According to the aforesaid Note, the functions of the Anti Hoarding Cell are to:

Ø                                    Collect intelligence about diversion of essential commodities.

Ø                                    Organise surprise checks/raids wherever and whenever deemed necessary.

Ø                                    Conduct investigation of cases registered as a result of such checks and raids.

Ø                                    File charge sheets against those found guilty during investigation.

 

2.3.6.6. In Order No. F&S/Enf/2001/1651 – 53 dated 09/11/2001 issued by Deputy Commissioner (Enforcement), it is stated that the staff of Anti Hoarding Cell was frequently going out in the field without the prior permission/knowledge of the Competent Authority, due to which the Order directs the Incharge of Anti Hoarding Cell to deploy the staff for surveillance/raids etc. only after the prior approval of the Deputy Commissioner (Enforcement) or Food Supply Officer (Enforcement) has been obtained. 

 

  2.4.  Other Remedies

              These include remedies whereby an aggrieved person can approach the Department through telephone and e-mail.

 

2.4.1. According to the website (http://delhigovt.nic.in/dept/food/fcomp1.asp)  of the Department, a Central Control Room has been set up to deal with any complaint pertaining to this Department.  The Complaint Room can be contacted by Tel.No.011-2337084 or through e-mail at cfood@nic.in.

 

2.4.2. Upon receipt of a complaint, the inspectors of the Enforcement Branch are deputed to verify the complaint for taking suitable action under law.

 

2.4.3. The website further informs that any aggrieved person can also register his complaint with the Circle Food & Supplies Officer;  Assistant Commissioner of the concerned Circle; Additional Commissioner (Vigilance); Commissioner (F&S); Anti-Corruption Branch, Directorate of Vigilance, Delhi Government; and  Public Grievances Cell, Delhi Government. The addresses & contact numbers of the aforesaid officials have been provided in the “Directory” under “About Us” section on the website.

 

2.4.4. An internet oriented complaint/grievance redressal mechanism has been provided by the Delhi Government under the “Public Grievance Redressal System” on the Delhi Government website (http://www.delhigovt.nic.in/griev_red.asp). This website contains a provision for lodging complaints subject to a maximum limit of 4,000 characters.  The website makes provision for checking the status of a complaint as well as for submitting reminders in respect of a pending complaint.

 

2.4.5. A toll free telephone Helpline service has been launched by the office of Lieutenant Governor of Delhi. The toll free number being 1555355. The Helpline has 30 lines and is operative twenty four hours a day and seven days a week throughout the year. Apart from this complaints can also be lodged through internet at lggov@nic.in

 

2.5.    Task Force for each Revenue District in Delhi            

 

2.5.1. It has been stated in the Reply Affidavit filed by the Delhi Government on 05/01/2005 before the Hon’ble Supreme Court of India in Interlocutory Application No. 41/2004 in Writ Petition (Civil) No. 196/2001 that a Task Force has been constituted on 01/12/2004 vide Circular/Order No. F.3/1/CS/04/2348 – 53 dated 01/12/2004, for each Revenue District in Delhi under each Deputy Commissioner (Revenue). Copy of the said circular has been annexed thereto as Annexure – RII. According to the aforesaid Circular, the Task Force shall:

 

(a)      Conduct surprise checks, raids in a set of identified Public Distribution System/KODs outlets in their district and collect samples of SFAs supplied by them.

 

(b)     If the samples are not found to be of good quality/acceptable quality, it shall recommend action against the licencee/official responsible for it.

 

(c)      The task force shall conduct as many raids as possible but not less than three raids per week.

 

(d)     A weekly statement of the details of raids conducted by the Task Force shall be sent to the Commissioner (F&S) and Chief Secretary of the Delhi Government.

 

2.5.2. Vide DO No. Secy/CVC/4/2007 dated 30/04/2007 a request was made to the Department to provide copies of reports/minutes of meetings held from time to time by the Task Force. However, no response was received in respect of this request.

 

2.5.3. Thereafter, during the course of a meeting held at the office of the Central Vigilance Committee on 12/07/2007, the Commissioner: Food Supplies & Consumer Affairs stated that the Task Force was dysfunctional.[20] Pursuant to the meeting held on 12/07/2007, letter bearing DO No. PS/CFS/F&S/07/121 was received from the office of the Commissioner: Food Supplies & Consumer Affairs enclosing therewith a copy of the minutes of the meeting held with all nine DC(Revenue) regarding setting up of a special task force and copy of Circular No. PA/DC/NE/2006/743-747 dated 15/11/2006 issued by the Deputy Commissioner (North East) regarding constitution of a special task force for each sub-division.

2.6.    Position of Government of India on Vigilance Committees

2.6.1. It has been, stated in D.O. letter No.9-3/2005-PD.II dated 18/07/2005 issued by the Joint Secretary, Government of India, Ministry of Consumer Affairs, Food  & Public Distribution  to the Food Secretaries  of all the States and Union Territories  that:

(a)      Para 17 of the Model Citizens’ Charter on Targeted Public Distribution System stipulates constitution of Vigilance Committees by the States/Union Territories at Panchayat, Block, District and the State/Union Territory level by drawing members from Government, Social and Consumer Organisations and Local Bodies to periodically review the functions of the schemes/FPSs under Public Distribution System.

(b)     The Parliamentary Standing Committee on Food, Consumer Affairs & Public Distribution had emphasized the need for smooth functioning of Targeted Public Distribution System and stressed the need for constitution of Vigilance Committees at all levels in every State/Union Territory.

(c)      From time to time the Government of India has formulated guidelines for constitution of Vigilance Committees   and also  for participation of Panchayati Raj institutions for smooth functioning  of  Public Distribution System.  The Chairman of the Committees may be Sarpanchas, Pradhans and Zila Pramukhs in the case of Panchayats, Blocks and District levels respectively. At the State Level the Chairman may be the Food Minister/Food Secretary and their counterparts of the relative ministries as the members in additions the other members mentioned in the guidelines.

(d)     The Vigilance Committees should be made aware of their responsibilities and be made to meet regularly to review the system to ensure successful distribution of Food grains to the beneficiaries. Further, the State Government may formulate training programmes at District level for the members of such Vigilance Committees.

(e)      The short-comings pointed out by FPS/Taluk level Vigilance Committees should be sorted out at the District level. A system of grievance redressal should be introduced for this purpose.

 

2.7.          Position of the Delhi Government on Vigilance Committees

2.7.1. It is seen from Circular No.F.3(13)/94/CFS(D)/1399-1598 dated 19 – 20/04/1995 (“Circular”), the FPS Vigilance Committees in Delhi were  reconstituted. The Circular, provides as follows:

 

(a)      The FPS Vigilance Committees will have five members comprising of two women members, one member from SC/ST, one among the social workers and one from other consumers in consultation with the Chairman of the Circle Advisory Committee.

(b)     The FPS Vigilance Committee shall be constituted by the Circle Food & Supplies Officer.

(c)      The minimum eligibility criterion for the members of the FPS Vigilance Committees is that they shall be ration card holders whose ration cards shall be attached with the particular FPS.

(d)     The main objectives and functions of the FPS Vigilance Committees shall be:

Ø                  To attend to complaints regarding non-availability of Food grains etc. to FPS/Kerosene Oil Depot.

Ø                  Prevent black marketing and diversion of Food grains.

Ø                  Watch the cases of short supply, less weighment and distribution of sub – standard quality of Food grains by the FPS/Kerosene Oil Depot holder and report.

Ø                  To suggest measures for proper distribution of Food grains by the FPS/Kerosene Oil Depot holder.

Ø                  Ordinarily the meeting of the Vigilance Committee would be convened once in a month.

Ø                  Copy of the minutes will be drawn formally and circulated to all the members, zonal Assistant Commissioners and Assistant Commissioner (Distribution) for monitoring of the Public Distribution System of the Circle.

 

2.7.2.   Order No. F.15(63)/CFS/D/2003/1050 dated 27/09/2006 issued by the Commissioner: Food Supplies & Consumer Affairs, inter-alia, states that in furtherance of Model  Citizens’ Charter on Targeted Public Distribution System and on recommendations of  Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution  for effective implementation  and monitoring of the Targeted Public Distribution System Schemes, a State Vigilance Committee has been constituted. According to the aforesaid Order, the main objectives and functions of the State level Vigilance Committee include:

 

(a).            Prevention of black-marketing and diversion of SFAs at all levels.

 

(b).           Attending to complaints regarding non-availability of wheat, rice, sugar, kerosene oil etc. to the FPS/KODs….

 

(c).            Suggesting measures for proper distribution of SFAs by the FPS/KOD holders.

 

(d).           Watching all cases of short supply, less weighment and distribution of substandard quality of SFAs by the FPS/KOD holders and reporting the same.

 

(e).            Ensuring that stock of SFAs are kept at least three months in Delhi to make the exigencies in case of epidemic situation etc.      

      

2.7.3.   Vide letter No.TA/AS(E)/2007/F&S/72 dated 28/02/2007 the office of Additional Commissioner (Enforcement) has informed that the Vigilance Committees meet once in a month and deliberate on various issues pertaining to  the problems in the area under the jurisdiction of the concerned Circle.  It has been categorically stated that there is no Vigilance Committee at the District level.  The letter also encloses therewith by way of sample, reports submitted by the Vigilance Committees of five Districts of Delhi.

 

2.7.4. Vide letter No.PA/AS(E)/2007/F&S/257 dated 30/05/2007 the office of the Additional Commissioner (Enforcement) has, inter-alia, informed as follows:

 

Ø                  Although there are two Committees i.e. Circle Advisory Committee and Vigilance Committee, the meetings of both these Committees are jointly held and minutes are also issued in a similar manner.

Ø                  It would be difficult to provide information as to how many times in a year these Committees actually met because there are cases where due to transfer of Food & Supplies Officers and Assistant Commissioners, these Committees could not meet regularly. 

Ø                  The Circle Advisory Committees and Vigilance Committees are in the process of being reconstituted and the concerned Hon’ble Minister has written to all the seventy MLAs of Delhi to suggest names for this purpose. Information regarding subsequent development in this regard would be furnished in due course. 

 

3.       Findings of the Central Vigilance Committee regarding       functioning of Vigilance Committees in Delhi

 

3.1.          It has been fairly admitted by an authority no less than the Commissioner: Food Supplies & Consumer Affairs that the Vigilance Committees in Delhi are defunct and ineffective[21]. This has also been the general feedback that has been received from various quarters during numerous meetings and public hearings that were held by the Central Vigilance Committee. The reasons that have been attributed for the prevailing situation are political interference and corruption. 

 

3.2.          FPS Vigilance Committee meetings are not being held every month, in all Circles and action taken reports are not being sent by 5th of every month.[22] 

 

3.3.          Minutes of meetings of FPS Vigilance Committees are not being sent by Food & Supplies Officers to their Assistant Commissioners, as required, for onward transmission to Headquarters. The Assistant Commissioners in turn were not compiling the reports and were instead merely forwarding the minutes of the meetings to the Headquarters.[23]  

 

3.4.          Vigilance Committees have not been constituted at the District level despite instructions of the Government of India to the contrary. 

 

3.5.          The ongoing practice of holding joint meetings of Circle Advisory Committees and FPS Vigilance Committees, preparing joint minutes of meetings and the area MLA, who is the Chairman of Circle Advisory Committee, chairing the meetings of the FPS Vigilance Committees as well[24], is not envisaged under the Circular No.F.3(13)/94/CFS(D)/1399-1598 dated 19 – 20/4/1995 and has resulted in the FPS Vigilance Committees losing their independent character and not meeting the objectives for which these were constituted.

 

3.6.          Despite a specific query from the Central Vigilance Committee regarding information about the background of members of the FPS Vigilance Committees in Delhi, the information has not been provided till date. Consequently, it cannot be ascertained whether the composition of the FPS Vigilance Committees is in terms of the Circular No.F.3(13)/94/CFS(D)/1399-1598 dated 19 – 20/4/1995 at all or not.

 

3.7.          There is absence of transparency in existing framework pertaining to FPS Vigilance Committees in Delhi. There is absence of accountability. The Vigilance Committees are not easily accessible to the public at large. The existing guidelines contained in the Circular No.F.3(13)/94/CFS(D)/1399-1598 dated 19 – 20/4/1995 leave ample scope for arbitrariness and extraneous considerations with regard to the constitution and functioning of FPS Vigilance Committees. The Circular fails to address the following crucial aspects:

 

(a).            The mode and manner of selection and appointment of the members of FPS Vigilance Committees has not been specified. 

 

(b).            There is absence of accountability in the functioning of the FPS Vigilance Committees. For instance, it has been observed from the sample minutes of meetings that have been furnished by the Department that on numerous occasions the meetings of the FPS Vigilance Committees could not be conducted solely on account of non-availability of the area MLA and/or members of the FPS Vigilance Committee. It is also not possible to ascertain from the sample joint minutes of Circle Advisory Committee cum Vigilance Committee meetings as to whether the attending persons are members of the FPS Vigilance Committees at all or not.

 

(c).There is no provision for removal of members of a FPS Vigilance Committee. As such, other connected issues like circumstances warranting removal, procedure to be followed for removal and authority competent to deal with such matters, have, obviously not been specified.

 

(d).           Other deficiencies observed in the functioning of FPS Vigilance Committees include as follows:

 

(i).     The manner in which the members of the FPS Vigilance Committees shall discharge their functions and duties has not been specified. 

 

(ii).     While functions/duties have been assigned to FPS Vigilance Committees, the powers to carry out the same have not been specified.

 

(iii).    No provision has been made with regard to the time frame within which action shall be taken upon a report that may be submitted by a FPS Vigilance Committee. 

 

(iv).    The Authority who shall act upon the report submitted by a FPS Vigilance Committee has not been specified.

 

(v).     Although the obligation/duty to constitute a FPS Vigilance Committee has been cast upon the Circle  Food & Supplies Officer, the same has been made subject to consultation with the Chairman of the  Circle Advisory Committee i.e. the area MLA, thereby, leaving scope for politicization of the FPS Vigilance Committees and political interference in their functioning.

 

(vi).    Last but not the least, there is overlapping between the objectives and functions of the Citizens Watch Committees, Circle Advisory Committee and FPS Vigilance Committees. This results in duplication of work as also avoidable situations where these bodies may work at cross purposes.  

 

4.       Suggestions received from public responses and public hearings

 

          During the course of various public hearings and meetings / discussions held by the Central Vigilance Committee, several suggestions were received with regard to Vigilance Committees and measures that may be taken to strengthen the Vigilance Committees.

 

(a).            Members of Vigilance Committees should be paid remuneration. For this purpose funds could be allocated to voluntary organizations. 

 

(b).           Members of Vigilance Committees should be made accountable for discharge of their duties.

 

(c).            Members of the Vigilance Committees should be chosen from the general public including reputed persons, educated persons particularly women, welfare associations, NGOs etc.

 

(d).           The Vigilance Committees should be made free from political interference.

 

(e).            There should be one strong effective Vigilance Committee instead of defunct Vigilance Committees at different levels.

 

(f).             According to the Magsasay award winner Shri Arvind Kejriwal of Parivartan (A Non governmental organisation), the Department should be brought within the purview of the Lokayukta.

 

(g).           A toll free Helpline should be provided where a person could call and register his complaint. Each complaint would be given an identification number. These complaints should be connected to a database from where the concerned person could ascertain the status of his complaint and also the manner in which they have been dealt with. With regard to a toll free Helpline service, Prof. Shriram Khanna from the Delhi School of Economics, Delhi University and National Consumer Helpline submitted a note dated 11/06/2007 containing a proposal for Public Distribution System Helpline and also the estimated cost for establishing such a Helpline.

5.       Recommendations

 

5.1.    Strengthening the Enforcement Branch and Anti Hoarding Cell

 

5.1.1.   In view of the magnitude of the Public Distribution System operations in Delhi involving 2,772 functional FPSs as on March 2007[25] and the extent of continuous vigil that is required to be maintained to prevent malpractices in Public Distribution System operations, it is necessary that no post is left vacant in the Enforcement Branch at any point in time. The strength of Anti Hoarding Cell should also be commensurately augmented for effective discharge of duties. 

 

5.1.2.   Presently the Anti-Hoarding Cell is headed by Shri Arun Kumar, Sub Inspector.  He is on deputation from Delhi Police and has been on deputation with the Anti Hoarding Cell for last six years. The Head Constable and the Constable in the Anti Hoarding Cell are also from Delhi Police and have been there for more than three years. 

 

5.1.3.   The Anti Hoarding Cell headed by Sub Inspector Shri Arun Kumar has lost complete confidence with the Department which has resulted in issue of Order No. F&S/Enf/2001/1651 – 53 dated 09/11/2001. The efforts/requests of the Commissioner Food Supplies & Consumer Affairs and the Department to repatriate Shri Arun Kumar and his team to Delhi Police have not been successful.[26] It is stated that in pursuance of Court Order, a Departmental Enquiry is pending against Shri. Arun Kumar for faulty investigation.

 

5.1.4.   An instance which has come to the notice of the Central Vigilance Committee shows that Shri Arun Kumar, Sub Inspector is thoroughly incompetent to head the important Anti Hoarding Cell.  On the basis of a sting operation by a TV channel “S1”, a truck carrying SFAs was intercepted on Delhi – Saharanpur border. The driver of the truck was apprehended and his statements recorded by the Enforcement Wing of the Department.  FIR No.341 dated 26/04/2007 was lodged at the Police Station Nand Nagri. The FIR pertained to the seizure of truck that was in the process of diverting PDS food grains which pertained to five FPSs.  It was a clear case where offence u/s 7/10 of the Essential Commodities Act 1955 was made out for contravention of Public Distribution System (Control) Order 2001 and Delhi Specified Articles (Regulation of Distribution) Order 1981.  Sub Inspector Arun Kumar arrested the truck driver and produced him before the Court on 26/04/2007.  Instead of seeking Police remand for further investigation, he himself moved an application requesting the Court to send the driver to judicial custody.[27]  By such an act Sub Inspector Arun Kumar literally stifled investigations and the prosecution at the very threshold. Serious offences had been committed by the transporter, officials of the Department and that of Delhi State Civil Supplies Corporation and the FPSs.  This conduct of Sub Inspector Arun Kumar was enough to place him under suspension. It is difficult to appreciate as to why Sub Inspector Arun Kumar and his team should not have been repatriated immediately. It is also difficult to appreciate the stand of the Commissioner of Police in not repatriating concerned officers and replacing them with competent officers keeping in mind the importance of the Public Distribution System.

 

5.1.5.   During the course of enquiries made by the Central Vigilance Committee, the general perception of the public appears to be that personnel of the Enforcement Department, Anti Hoarding Cell and the local Police are all extremely corrupt and susceptible to corrupt practices. This aspect is well borne out by order No. F&S/Enf/2001/1651 – 53 dated 09/11/2001 whereby the Anti Hoarding Cell has been directed to function only after obtaining the prior approval of the Deputy Commissioner (Enforcement) or Food & Supplies Officer (Enforcement). Obviously, this order was passed to prevent the Anti Hoarding Cell from indulging in corrupt practices by harassing FPS owners. 

 

5.1.6.   In the light of the above, the following measures to strengthen the Anti Hoarding Cell are suggested:

 

(a).     The Anti Hoarding Cell should be independent of the Enforcement Branch. The Anti Hoarding Cell should be headed by an officer holding the rank of not less than Deputy Commissioner of Police who will also select the other personnel of the Cell. A “Special Flying Squad” would also be constituted into the Anti Hoarding Cell for taking prompt and immediate action, as and when the need arises. This Squad shall be functional round the clock without exception. The Anti Hoarding Cell should directly report to the Commissioner: Food Supplies & Consumer Affairs.

 

(b).    Officers of the Anti Hoarding Cell should be given proper pre – deployment training/briefing about their duties and should be fully apprised of the law, Public Distribution System (Control) Order, 2001 and the governing circulars issued there under.

 

(c).     The officers/personnel of the Enforcement Branch and Anti Hoarding Cell should be given specific duties/responsibilities and made personally accountable for discharge of the same.

 

5.2.    Measures to ensure supply of Food grains to Ration Card Holders when a FPS is sealed

 

5.2.1. The Central Vigilance Committee noticed in one case that when a FPS was sealed on account of a complaint by a Ration Card Holder, the Ration Cards of that FPS were attached to another FPS that was situated at a far away distance from the sealed FPS.[28] In no eventuality, should a situation be allowed to arise where the Ration Card Holders of a sealed FPS are constrained to go to a FPS that is farther away from the sealed FPS. Such a situation invariably acts as a disincentive against lodgement of complaints by aggrieved consumers and results in perpetuation of malpractices by the FPS owners. In the event of a Fair Price Shop being sealed by the Enforcement Branch of the Department for any irregularity, either of the following two alternatives should essentially be made available for the benefit of the Ration Card Holders of the affected FPS:

 

(i).     A mobile van be pressed into service.

 

(ii).     Department may make a list of about 2 – 3 eligible Kirana Merchants (General Merchants) (by inviting applications) and one of them could be entrusted with the functions of FPS temporarily, provided that the Kirana Merchant does not deal in wheat, rice and sugar.

 

It is pertinent to mention here that the Planning Commission has allocated funds for the purposes of providing mobile vans.[29]  

 

5.3.    On Circle Advisory Committees and Vigilance Committees

 

5.3.1. It is manifest from the foregoing discussions that although there are ample provisions under the existing system to deal with the issue of complaints and vigilance pertaining to operation of Public Distribution System in Delhi, what appears to be lacking is absence of proper implementation strategy. Instead of strengthening the set up of Vigilance Committees that have been envisaged under the Public Distribution System (Control) Order, 2001, there is multiplicity of bodies like Circle Advisory Committee and Citizens Watch Committee performing the tasks which ought to have been exclusively dealt with by a properly constituted Vigilance Committee.  This lack of focus on vigilance issue has gravely undermined the proper functioning of Public Distribution System. As such, the Central Vigilance Committee would like to make the following recommendations for strengthening the monitoring and vigilance mechanism so that they become effective, purposeful and accountable:

 

(a).            It is further evident that the existing Vigilance Committees are dysfunctional in Delhi and instead there are three more entities viz.  Circle Advisory Committee, Citizens Watch Committee and Task Force that are supposed to perform functions similar to that of Vigilance Committees. Further, the Central Vigilance Committee has not come across any document or information furnished by the Department that may reveal the extent to which the inputs given, if any, by these committees have been utilised for streamlining or improving the functioning of Public Distribution System. Therefore, it is recommended that both the Circle Advisory Committee and Citizens Watch Committee, in their present form, may be scrapped and in their place, district wise Vigilance Committees may be constituted, vesting them with appropriate powers, functions and responsibilities. 

 

(b).           The State level Vigilance Committee should be reconstituted by retaining the existing composition thereof as provided under the Public Distribution System (Control) Order 2001 with the only change that the Commissioner: Food Supplies & Consumer Affairs be made the member/Convenor of such reconstituted committee. This committee should invariably meet once in a quarter and review the functioning of the District level Vigilance Committees and initiate action wherever any deficiency is noticed. Further, this committee may continue to look into other items spelt out in Order No. F.15(63)/CFS/D/2003/1050 dated 27/09/2006 and the Circular No.F.3(13)/94/CFS(D)/1399-1598 dated 19 – 20/4/1995. 

 

(c).            As far as the District level Vigilance Committees are concerned, no change has been made to the existing system of appointment except that no meeting will be postponed on account of non-availability of an area MLA. In the absence of area MLA, the meetings will be chaired by the Assistant Commissioner of the concerned District.

 

(d).           The process of selection and appointment of members of the FPS Vigilance Committees should be made more transparent with more involvement of the affected public. At the time of selection/appointment of members of Vigilance Committees, greater weightage or preference should be given to the stake holders i.e. ration card holders attached to a given FPS, particularly the household women in the area. The majority of members would be women who are Ration Card Holders of the concerned FPS. As far as possible, the member from SC/ST should also be a woman.

 

(e).             It shall be compulsory for the Vigilance Committees to draw minutes of such meetings and send copy thereof along with an action taken report to the Department and Ombudsman/ Regulator. (This aspect has been dealt with in greater detail under the heading “Ombudsman/ Regulator”.)

 

(f).             The Vigilance Committees should meet once in a month, on every third Saturday, without any exception.

 

(g).           The Ombudsman/Regulator would continuously review the functioning of Vigilance Committees and if any Vigilance Committee is not performing its functions properly, the Ombudsman/Regulator would immediately recommend to the Department the reconstitution of such Vigilance Committees. The Department will be duty bound to act upon such recommendations of the Ombudsman/ Regulator unless there are cogent reasons, recorded in writing, for acting to the contrary. These reasons shall be forwarded to the Ombudsman/Regulator who may after examining the same either recall, modify or affirm this order.

 

(h).           The Vigilance Committees should also be authorised to receive complaints from Ration Card Holders of the area and enquire into the same and submit a report to the Assistant Commissioner for further action. The grievance(s)/complaint(s) of a Ration Card Holder should be submitted/filed with the Vigilance Committee concerned at least a week before the scheduled date of meeting. It should be made mandatory to display the exact date of meeting of a Vigilance Committee at the FPS at least three weeks before such meeting. The responsibility for ensuring compliance with regard to display of such information should be placed upon the Circle Food & Supplies Officer. Such information should also be disseminated through distribution of hand bills and public announcement.  

 

(i).              The grievance(s)/complaint(s) should among other things form the agenda for the meeting of the Vigilance Committees. The nature of action taken upon such grievance(s)/complaint(s) should be properly reflected in the minutes of meeting of the Vigilance Committees. Further, such an item on the agenda should continue to remain on the agenda until resolved.

 

(j).             The authority that shall act upon the reports submitted by Vigilance Committees should be specified. This should be preferably an official not below the rank of an Assistant Commissioner. The time frame within which and manner in which action shall be taken by such authority upon a report submitted by a Vigilance Committee should also be specified. In the event of failure of the concerned authority to act upon the report of a Vigilance Committee, action should be taken against such authority in a time bound manner. The Ombudsman/ Regulator will be the monitoring authority to oversee this entire exercise. The powers of Ombudsman/ Regulator have been dealt with separately in this Chapter.

 

5.4.          HELPLINE

 

During the course of enquiries of the Central Vigilance Committee two different models of Helpline mechanism were noticed viz.:

 

 

 

(a)      National Consumer Helpline,

 

Here, all aspects relating to the Helpline including call centre are ‘in house’. The Helpline is connected with six workstations located in the premises of National Consumer Helpline. When a call is received on the Helpline, all the relevant details are collected by the personnel attending such call. Thereafter, the same is forwarded to the respective sector incharges for analysing the grievance and giving appropriate solution to the complainant. All conversations on the Helpline are recorded in a computer.

 

(b)     Lieutenant Governor Helpline

 

This is a toll free telephone Helpline that has been recently activated by the office of the Lieutenant Governor of Delhi. Here, the call centre has been outsourced. This Helpline caters to all the Departments of the Delhi Government. Public Distribution System in Delhi comprises of 70 Circles and 2772 FPSs and also the ever-increasing population of Delhi. Moreover, when the operation of the Helpline was demonstrated by the concerned authority before the Central Vigilance Committee, it was found that there was a great time lag in redressing the Public Distribution System related grievances. This also reinforces the view of the Central Vigilance Committee that a dedicated Helpline is required for Public Distribution System related grievances in Delhi.

 

5.4.1. Either model of Helpline may be adopted for setting up a dedicated Helpline for the Public Distribution System in Delhi. In order to ensure efficiency and optimise effectiveness of the Helpline services, the following recommendations are made:

 

(a).            The toll free telephone Helpline facility should preferably be operative twenty-four hours a day and seven days a week.

 

(b).           It shall be the responsibility of Ombudsman/ Regulator to catalogue the complaints/grievances received on the Helpline and to continuously monitor these grievances/complaints to ensure their ultimate resolution. 

 

(c).            The consumer/user interface aspect of the Helpline should broadly have the following basic features viz.:

(i).          Providing information related services.

(ii).         Registration of complaints.

(iii).    Issuance of a unique identification/token number to the caller upon registration of complaints.

(iv).    Mechanism to ascertain status of action taken on such registered complaints.

(d)      The Department, the FCI and the DSCSC will be obliged to inform the Helpline as to when the particular FPS will get its stock. The DSCSC will also inform the Helpline about the movement of trucks to the particular shop so that any caller will be able to ascertain from the Helpline as to when stock would be available at the shop.  

 

5.4.2. In order to make the Helpline effective, it is necessary:

 

(a).     To give adequate publicity of Public Distribution System service benchmarks.

 

(b).    Adequate publicity should be given to this toll free Helpline and the category of services that would be available to the consumers on this Helpline.

 

(c).     Complaints received through the Helpline should be forwarded to the concerned officer in the Department not later than 24 hours from the time of receipt of the complaint.

 

(d).    For the purposes of ensuring accountability of the official(s) who has/have been entrusted with a given complaint, it is necessary that a time bound complaint redressal mechanism is created and there should be an independent agency to periodically monitor the working of the system. This aspect has been dealt with in greater detail under a separate heading Ombudsman/ Regulator”.

 

(e).     In case of delay in redressal of complaints, the concerned official shall be liable for action in case of dereliction of duty, including penalty, for each day of such delay. This penalty would be paid by the State Government to the complainant at the first instance and thereafter, recovered from the concerned official.

 

 5.5.   OMBUDSMAN/ REGULATOR

 

5.5.1. According to the website of the Department (http://delhigovt.nic.in/dept/food/fpds4.asp) as on 31/12/2006, there are 3,78,947 and 57,336 Ration Card Holders in BPL and AAY category, respectively and 22,85,513 Ration Card Holders in APL category, in the National Capital Territory of Delhi. The Ration Card Holders have been given certain entitlements under Public Distribution System.  It is the responsibility of the state apparatus to ensure that these beneficiaries enjoy access to these entitlements smoothly, without let or hindrance. Public satisfaction in this field would strengthen the democratic system and reinforce public confidence. Widespread discontent will naturally provoke disruption and affect social stability adversely. Hence, it is imperative to take urgent action for suitably strengthening the vigilance and monitoring system in the existing Public Distribution System framework. This can be done by the appointment of an independent Ombudsman/Regulator  

 

5.5.2. During the course of meetings held at the Central Vigilance Committee a suggestion had emerged that the existing problems in Public Distribution System could be taken care of to a large extent by making appropriate changes to the Delhi Lokayukta and Upalokayukta Act, 1995 (“Act of 1995”) and vesting the Lokayukta thereunder, with the role of a regulator in respect of Public Distribution System in Delhi.  Under the existing provisions of the Act of 1995, it would not be possible to invest the Lokayukta with the role of a Regulator as:

Ø      Section 7 thereof confines the jurisdiction of Lokayukta and Upalokayukta to “Public Functionaries” as defined in Section 2(m) thereof. Thereby excluding FPSs from the ambit of Lokayukta.

Ø      Further, Section 17 (b) thereof excludes “any person who is a member of a Civil Service of the Union or an All India Service or Civil Service of a State or holds a Civil Post under the Union or a State in connection with the affairs of Delhi.” Thereby excluding officials of the Department. 

 

5.5.3. While the Central Vigilance Committee is of the considered view that an independent monitoring mechanism for addressing consumer complaints along with a host of other related issues needs to be set up on priority. However, vesting the Lokayukta with the role of a Regulator in Public Distribution System in Delhi would entail an overhaul of the Act of 1995. A better alternative would be to provide alternate grievance redressal machinery. Such grievance redressal machinery would be in addition to the already existing legal remedies that may be available to an aggrieved person under Clause 11 of the Public Distribution System (Control) Order, 2001. This alternative mechanism may be in the form of “Ombudsman/ Regulator” that may be created under Para 6(1) of the Annexe to Clause 8 of the Public Distribution System (Control) Order, 2001[30]. Para 6(1) of the Annexe to Clause 8 of the Public Distribution System (Control) Order, 2001 casts an obligation upon the State Government to provide a proper system of monitoring FPS. This clause provides the statutory basis for setting up an independent monitoring mechanism such as an “Ombudsman/ Regulator”.

 

5.5.4. The objective of Ombudsman/ Regulator would be that he/she would act as ‘Watch Dog’ to ensure effective compliance of the PDS Control Order, 2001, The Delhi Specified Article (Regulation of Distribution) Order, 1981 and the Citizens Charter. The Ombudsman/ Regulator will also provide free, fair, independent mechanism for speedy resolution of complaints with reference to the benchmark set out in the governing statute, order and circulars by the authorities. Ombudsman/ Regulator should focus on investigating and resolving individual complaints and also address systemic issues. The Ombudsman/ Regulator provides consumers an easily accessible system, which would be just and speedy in redressal of their complaints and grievances. This should not become a procedure bound system or be driven by dilatory reports. Investigation will be resorted to wherever considered necessary by the Ombudsman/ Regulator. The Ombudsman/Regulator shall oversee the functioning of the Enforcement Branch including the Anti Hoarding Cell.   

 

5.5.5. Ombudsman/ Regulator should be appointed by the Lieutenant Governor of Delhi in concurrence with the Chief Justice of Delhi High Court. He or she will not be eligible for re-appointment.

 

5.5.6. Eligibility conditions

 

(i).     The Ombudsman/Regulator should be a sitting/retired member of the Delhi Higher Judicial Services who is or has been in the super time scale i.e. of Rs. 22,850 - 500 - 24850;

 

5.5.7. If the Ombudsman/Regulator is a retired member of the Delhi Higher Judicial Services, he/she will remain in office for a term of three years or upon reaching the age of Sixty five, whichever is earlier. 

 

5.5.8. Terms and conditions of service

 

The salary and allowances payable to the Ombudsman/ Regulator shall be the same as payable to a member of the Delhi Higher Judicial Service in the super time scale.

 

5.5.9. Removal and Resignation from office

 

Whereas a sitting member of the Delhi Higher Judicial Services will be governed by the service rules applicable to him. In the case of a retired member of the Delhi Higher Judicial Services being appointed, the following will apply: -

 

(a).     The Ombudsman/ Regulator may be removed from office by the Government any time after appointment if Ombudsman/ Regulator has:

 

(i).     Been adjudged an insolvent; or

(ii).     Been convicted of an offence involving moral turpitude; or

(iii).    Become physically or mentally incapable of acting as Ombudsman/ Regulator; or

(iv).    Acquired such interest as is likely to prejudicially affect his functions as Ombudsman/ Regulator; or

(v).     So abused his position as to render his or her continuance in office prejudicial to the public interest.

 

(b).    However, the removal on the grounds specified in clauses (iv) and (v) can be done only in concurrence with the Chief Justice of Delhi High Court, after following the principles of natural justice.

 

5.5.10.    Functions and Responsibilities of Ombudsman/ Regulator

 

Ombudsman/ Regulator would be that he/she would act as ‘Watch Dog’ to ensure effective compliance of the PDS Control Order, 2001, The Delhi Specified Article (Regulation of Distribution) Order, 1981 and the Citizens Charter. The Ombudsman/Regulator will constantly monitor each facet of the distribution process detailed in the governing control orders and circulars to ensure inter alia that the correct quantities of SFAs reach the intented beneficiaries.

In addition the Ombusman/ Regulator will deal with Consumers’ complaints and grievances which may broadly be classified into two groups:

 

Ø      Basic

Ø      Complex. 

 

Basic complaints would mainly relate to non-provision of Public Distribution System items benchmarked to quality/quantity, delays, harassment etc. Complex complaints would relate to matters involving laws, enforcement deficiencies and widespread discontent. Basic complaints may require summary disposal without undertaking any detailed investigation. Complex complaints may involve proper investigation.

 

Having regard to the class of complaints, whether basic or complex, the functions and responsibilities of the Ombudsman/ Regulator will be as follows:

 

(i).     To act as the repository of complaints/grievances received upon the Helpline. Ombudsman/ Regulator shall also monitor the functioning of GPS technology that may be used in the Transportation of Food grains and deal with all matters relating to consumer complaints arising from deficiencies in various stages of Public Distribution System operation;

 

(ii).     To act as the monitoring authority in respect of functioning of the Vigilance Committees and follow up action taken by the Department on the reports/recommendations of the Vigilance Committees.

 

(ii).     To investigate, where necessary in the judgment of the Ombudsman/ Regulator, complaints on case-by-case basis after seeking the perspectives of parties involved and making an independent assessment of complaints;

 

(iii).    To seek resolution of complaints through application of extant law, rules and orders in complex cases based on his or her personal assessment of what is reasonable and fair;

 

(iv).    The Ombudsman/ Regulator will have jurisdiction to address and investigate, where necessary, complaints about, inter-alia, the following matters:

 

(a)      non-observance of the PDS Control Order by  FPS  owner.

(b)     short supply of Food grains/sugar/kerosene oil below entitlement;

(c)      supply of poor quality Food grains not matching the sample on display; and

(d)     diversion of Food grains to shops other than FPS. .

(e)      the manner in which complaints received from the consumers/complainants including those on the toll free Helpline, have been dealt with by the concerned officials of the Department.

(f)      Action taken by officials of the Department on reports of Vigilance Committees.

 

 (v)     It will be the responsibility of Ombudsman/ Regulator to devise and implement communication strategy to educate consumers as well as FPS owners about their rights and entitlements as well as various dos and don’ts of  Public Distribution System.

 

(vi)     It is made clear that the remedy to approach the Ombudsman/ Regulator would be in addition to and not in derogation of other remedies available in law.

 

5.5.11.         Powers of Ombudsman/ Regulator

 

The powers of the Ombudsman/ Regulator, inter-alia, would include:

 

(i)      Public functionaries in the Department/Delhi State Civil Supplies Corporation Limited/Food Corporation of India, in charge of, or dealing with  Public Distribution System, must function with “due diligence”; that is, they must ensure that within the framework of the system, the consumers’ entitlements of Food grains etc., are made available to them on time through the distribution network.  Any deficiency or shortcoming on their part, with reference to the benchmarks, will render the functionary personally liable to action. The Ombudsman/Regulator will have the power to recommend and monitor departmental action in respect of errant officers keeping in mind the governing disciplinary rules.   In cases of violation of any laws in the matter of Public Distribution System, the Ombudsman/ Regulator can direct the concerned authorities to take action against the person/party. There cannot be any corruption in Public Distribution System unless there is complicity between FPSs, Department Officials and the Transporter. While the FPS owner and the Transporter can be prosecuted under Section 7 of the Essential Commodities Act, 1955 for violation of the provisions of law including the Public Distribution System (Control) Order, 2001, it is incongruous that the Department officials who are fully involved in the crime should be proceeded against only departmentally in the absence of sanction under Section 15A of the Essential Commodities Act, 1955. The Committee therefore recommends that Section 15A be suitably amended by deleting clause (b), which deals with public servants belonging to the State Governments. The Committee also recommends that till the legislature makes such an amendment as proposed, the State Government shall delegate the power of sanction for prosecution to the Ombudsman/Regulator. 

 

(ii)      The Ombudsman/ Regulator can recommend payment of compensation to a complainant upto a maximum amount of Rs. 5,000/-, and/or supply of goods and services as required for resolving the complaint or/and issue cease and desist order. In case of complaints of a frivolous nature, the complainant will also be liable for similar action.   The amount mentioned above would be paid by the Department to the beneficiary at the first instance and would be recovered from the concerned officer.

 

(iii)     The complaints received by the Ombudsman/ Regulator may be referred by him for a report from the District Vigilance Committee or FPS Vigilance Committee, as the case may be. It is clarified that this power of the Ombudsman/ Regulator to make a reference shall be in addition to and not in derogation of the powers of the Ombudsman/ Regulator to conduct an independent enquiry into complaints. While, the reports so received, will assist the Ombudsman/ Regulator in providing solution, these reports will not be binding upon the Ombudsman/ Regulator.

 

(iv)     The Ombudsman/ Regulator also may not entertain a complaint if the complaint is more than  90 days old which can, however, be relaxed by Ombudsman/ Regulator in his discretion in deserving cases and final  resolution of complaints will need to be prescribed for ensuring speedy and efficacious handling of complaints.

 

(v)      Time limits for addressing complaints, various stages involved in completion of investigation and final resolution of complaints will need to be prescribed by the Ombudsman/ Regulator for ensuring speedy and efficacious handling of complaints.

 

(vi)     The Ombudsman/ Regulator will ensure that all codes/orders/regulations etc., are put on the website for the convenience of the consumers.

 

(vii)    The Ombudsman/ Regulator will have authority to suggest/recommend changes in operational matters to smoothen and simplify the operation of the system.

 

5.5.12.         Structure

 

The Ombudsman/ Regulator would need to be given a nucleus of staff to examine issues from both reactive and pro-active approaches.

 

5.5.13.         Funding

 

It will be the responsibility of the Government to provide funds for implementation of the aforegoing recommendations including meeting administrative and operational expenses of the office of Ombudsman/ Regulator including the staff thereof. In this context it is relevant to point out that the Planning Commission provides funds under its plan programmes for monitoring and improvement in the management of supplies.[31]

 

6        CONCLUSION

 

6.1             The Committee has observed that the Department has failed to fulfil  all the obligations that are laid down by the PDS (Control) Order, 2001.The Committee has also found total non-compliance of the Citizens Charter issued by the Department 2007 which is based on the Model Citizens Charter of the Government of India (it may be noted that the Government of India has issued a revised charter on 30th July, 2007). Detailed charts showing the violations and omissions by the Department have been enclosed in Part III of this report.     

6.2             It is said that the consumer is the King. However this applies to a vigilant consumer. The need of the hour is an empowered consumer who is made aware of his rights through a sustained campaign creating awareness of his various entitlements. This should be done through electronic and print media, handbill, street and nukkad meetings, street plays organized by NGOs and other interest groups. 


CHAPTER 6

 

TRANSPORTATION

 

1.       INTRODUCTION

 

1.1.          The Public Distribution System primarily involves two activities viz. procurement of Specified Food Articles i.e. Wheat and Rice (“SFAs”) and distribution of SFAs to the Ration Card Holders. An essential component of distribution is transportation of SFAs. In the State of Delhi, the responsibility of transportation of SFAs from the six Godowns of the Food Corporation of India (“FCI”) to the numerous Fair Price Shops has been entrusted to the Delhi State Civil Supplies Corporation Limited (“DSCSC”) since 1984. The DSCSC is a company incorporated in 1980 under the Companies Act, 1956 by the Government of National Capital Territory of Delhi (“Delhi Government”). The DSCSC functions under the administrative control of the Food & Supplies Department, Delhi Government (“Department”). As per information available on the website of the DSCSC (www.dscsc.delhigovt.nic.in), the Commissioner, Food Supplies & Consumer Affairs is a Director on the Board of Directors of DSCSC.

 

1.2.          During the course of enquiries made by the Central Vigilance Committee, subversion of the existing mechanism for transportation of SFAs has emerged as one of the main factors of diversion. While there could be delay in issuance of Release Orders by the FCI, manual weighing of SFAs at the time of loading etc. are interconnected issues and have been dealt with in the chapter on inferences formed during visits to the FCI. The present Chapter reviews the existing transportation system and makes necessary recommendations in this regard.

 

2.       EXISTING TRANSPORTATION SYSTEM OF THE DSCSC FOR PUBLIC DISTRIBUTION SYSTEM IN DELHI        

 

2.1.          According to Letter No. PA/AS(E)/2007/F&S/260 dated 30/05/2007 of the Department, as on March 2007, there are 2,772 functional Fair Price Shops in Delhi. These Fair Price Shops are positioned among 70 Circles i.e. equivalent to the number of legislative constituencies in Delhi. The Circles in turn are located in the nine Districts of Delhi and assigned to different FCI Godowns. From the perspective of transportation, DSCSC has divided these Circles into Groups A, B, C etc. based on their location vis-à-vis each FCI Godown. Separate Transportation Contracts are awarded for each Group.

 

2.2.          The different stages involved in the process of transportation of SFAs may be graphically explained in following manner: 

 

 

 

 

 

 

 

 

 

 


 

 

 

2.3.          The six FCI Godowns from where SFAs are issued are located at Mayapuri, CTO Pusa (Rajendra Place), Okhla, Ghevra, Narela and Shakti Nagar which are indicated in the map.

 

 

2.4.          DSCSC engages the services of Transporters for transporting SFAs from the FCI Godowns to the Fair Price Shops. This is done through an open tender process and on an annual contractual basis, although the contracts make a provision for further extension of the contract by another year by mutual consent of the contracting parties. The tender process and contractual aspects are dealt with in greater detail subsequently in this Chapter.

3.                 PREVAILING CARTAGE RATES AND PROFITABILITY OF DSCSC IN TRANSPORTATION OF SFAS IN PUBLIC DISTRIBUTION SYSTEM

 

3.1.          It is pertinent to mention here that according to DO No. F.15 (54)/99/DSCSC/PDS/262 dated 26/04/2007, received from DSCSC, the transportation cost for Wheat & Rice under APL category was increased from Rs.15/- to Rs.35/- per Qtl. by Delhi Government vide order No.F.14 (24)/CFS/D/2005/19 dated 07/01/2005. The Government had increased the transportation charges based on a detailed analysis taking into consideration the increase of diesel prices, increase in the salary and wages of employees and other expenditure like electricity, telephone charges etc.  Based on this analysis, Delhi Government on the request of DSCSC increased the transportation charges to Rs.35/- from Rs.15/- per Qtl. for the SFAs under APL Category only.

 

3.2.          On the aspect of profitability of Public Distribution System operations, Letter No. PA/GM/DSCSC/5 dated 01/03/2007 issued by Manager (PDS), DSCSC informs that:

 

(a)      Delhi Government fixes the cartage rates. Presently, DSCSC receives cartage @ Rs. 35/- per Qtl for APL category and Rs. 15/- per Qtl. in case of BPL, AAY, and APS. It is pertinent to mention here that cartage for AAY and APS category SFAs is paid to DSCSC by the Delhi Government.

 

(b)     DSCSC engages transport Contractors for different Godowns through open tender system on yearly basis for delivering SFAs from FCI Godowns to Fair Price Shops. The transportation charges differ from Godown to Godown and Circle-to-Circle within a Godown and at present the rates vary in the range of Rs. 6.22 to Rs. 25.50 per Qtl. In most of the cases, transportation charges are higher than the cartage rate of Rs. 15/- per Qtl. received in case of BPL, AAY and APS category and DSCSC has to bear the loss under these categories. However, this loss is compensated by the profit in APL category. The extent to which the deficit in BPL/AAY/APS is made good by the surplus in APL depends upon the allocation/lifting of quantity in each category. At present the ratio of APL and BPL/AAY/APS is 62% and 38%, respectively. Hence, DSCSC is making a net gain from Public Distribution System operations for the last two years. (As per the above mentioned letter, the net income for financial year 2005 – 2006 being Rs. 1.59 Crores even after meeting administrative expenses).  We are informed that this profit is also attributable to sale of liquor by DSCSC. However there is no doubt that DSCSC profits from its PDS operations as well.

 

(c)      Transporters sometimes are not able to provide sufficient number of Trucks due to unprecedented increase in demand for SFAs, to cope up with the additional demand/allocation. So, DSCSC has to make its own arrangements for hiring Trucks from outside at higher rates, which though reduces the profitability of Public Distribution System operations.

 

3.3.          In the above context, it appears from the “Statement of Income and Expenditure of Public Distribution System (Wheat and Rice) for the Financial Year 2005 – 06” attached to the letter dated 01/03/2007 that Transportation receipts amount to Rs. 12,85,50,388/- while Transportation charges account for Rs. 5,72,70,571/- and Administrative expenses account for Rs. 5,53,09,273/- leaving a net income of Rs. 1,59,70,544/-. In the Administrative expenses, Rs. 3,84,22,518/- account for “HQ overheads”.

 

3.4.          It appears that the rate of cartage being charged by DSCSC is disproportionate, excessive and avoidable. Representatives of the associations/bodies representing the Transporters of DSCSC and Fair Price Shops, respectively, have corroborated this.[32] It has also been stated by Shri Asit Singh, General Manager, FCI[33] that running a Truck in Delhi normally entails an expense of Rs.2,000/- per day. Further, FCI normally pays Rs.28/- to Rs.30/- per Qtl. to its Transporters for covering roughly a distance of 30 kilometres. A Facsimile Exchange dated 05/10/2004 issued by FCI to a successful bidder in transportation tender corroborates this. By this Facsimile Exchange, FCI has communicated its acceptance of the rates quoted by the successful bidder @ Rs. 23.50 per Qtl and Rs. 24.50 per Qtl. for transporting SFAs from its Mayapuri Godown to Ghevra Godown and Mayapuri Godown to Narela Godown, respectively.

 

3.5.          Further, a large portion of income derived from excessive cartage charges is used for administrative overheads. While the excessive cartage charged by DSCSC may result in accrual of profits for DSCSC, in actual terms it also diminishes the profit margin of Fair Price Shops, thereby, rendering Fair Price Shop operations unviable.  

 

4.                 CIRCULARS/INSTRUCTIONS PERTAINING TO PUBLIC DISTRIBUTION SYSTEM OPERATIONS OF DSCSC

 

From time to time several Circulars/Instructions have been issued by the DSCSC and also the Department with view to streamlining and making the transportation process transparent. This also includes measures to ensure timely delivery of SFAs and to avoid diversion of SFAs by incorporating stipulations within the contracts that are awarded to the Transporters. A brief outline of these Circulars/Instructions is as under.

 

4.1.          On timely delivery of SFAs

 

4.1.1.   Circular No. F.6(1)/CFS(D)/Misc/2005/1430 dated 16/11/2005 issued by the office of Commissioner: Food Supplies & Consumer Affairs, inter-alia, directs all the Assistant Commissioners to abide by the following directions in respect of submission of drafts and monitoring of lifting of SFAs by the Fair Price Shops:

 

(i)      Personally ensure that the quantity for which the Demand Drafts are submitted does not exceed the allocation of SFAs.

(ii)      Ensure that SFAs are available at the Fair Price Shops in the first week of every month and issue a certificate to this affect.

(iii)     Direct all Food and Supplies Officers to maintain details relating to deposit of Demand Drafts for SFAs and opening of sales of Fair Price Shops/Kerosene Oil Depots etc. The details should be maintained at each Circle in a register category wise i.e. APL/BPL/AAY on monthly basis. The register should be available with the Food & Supplies Officers and shall be maintained on a regular basis.

(iv)     A consolidated copy of Demand Drafts that are submitted should be sent to the Headquarters by 27th in respect of first fortnight and by 12th date of the month in respect of the Demand Drafts for second fortnight positively.      

 

4.1.2.   The contents of the above mentioned Circular have been reiterated in subsequent Circular No. 6(1)/Misc/CFS (D)/2005/370 dated 27/03/2006 of the Department, inter-alia, calls upon the Assistant Commissioners to submit monthly certificates to the affect that:

 

(a)      SFAs are available in each  Fair Price Shop in the first week of the month.

(b)     The quantity of drafts submitted during the month does not exceed the total monthly allocation of the Circle/ Fair Price Shops.

(c)      Proper registers are being maintained to record the arrival of SFAs and opening of sale.

 

4.1.3.   Circular No. F.6 (1)/Misc/CFS (D)/398 dated 04/04/2006 of the Commissioner: Food Supplies & Consumer Affairs, Department, inter-alia, stipulates that:

 

(a)      If the SFAs meant for a month are not delivered by 30th of the preceding month, DSCSC should fix responsibility on the Transporters and send the action taken report to the Commissioner, Food Supplies & Consumer Affairs during the first week of the month.

(b)     All the Food & Supplies Officers should direct the Fair Price Shops to put their authenticated signatures on the receipt for having received the SFAs i.e. on Weighment cum Challan Memo along with rubber stamp containing the name of Fair Price Shop holder; license number, complete address of Fair Price Shop.

 

4.1.4.   Order No. F13 (25)/CFS (D)/2005/292 dated 26/03/2007 of the Commissioner: Food Supplies & Consumer Affairs, Department makes it obligatory upon FCI and DSCSC to ensure that SFAs are delivered to Fair Price Shops within 07 days of receipt of Demand Drafts towards allocation of SFAs.  

 

4.2.          On Lifting and Delivery of SFAs to Fair Price Shops

 

4.2.1.   Instructions dated 04/05/2006 issued by the General Manager,  DSCSC to all “Godown In charges” of DSCSC, inter-alia, directs that:

 

(i).              Route maps should be prepared in respect of supply of SFAs from FCI Godowns to Fair Price Shops.

(ii).            Further, it should be ensured that sufficient number of Trucks is deployed on a day-to-day basis at the Godowns to liquidate pendency and priority is given to BPL/AAY category.

(iii).          SFAs of BPL/AAY categories should be lifted one week before the completion of total supplies.

(iv).          In the event of non-cooperation by FCI in this regard, the “Godown Incharges” are directed to take up the issue with senior authorities of FCI or DSCSC.

 

4.2.2.   Instructions No.F.15 (164)/2003/PDSH.Q/Pt.file/DSCSC/3347 dated 26/02/2007 of DSCSC contains several instructions to Public Distribution System “Godown In charges” of DSCSC and Transporters. The Public Distribution System “Godown In charges” are directed to liquidate the pendency in lifting of BPL/AAY category SFAs on priority basis and in case of non cooperation by FCI in timely issue of Release Orders of BPL/AAY category SFAs, the matter should brought to the notice of higher authorities of DSCSC for taking up the matter with authorities of FCI.

 

The Instructions further direct the “Godown in charges” to ensure that terms and conditions of the transportation contracts are followed strictly. Several other further instructions are also given viz.:

 

a.                  The Transporters shall obtain the schedule of lifting and delivery of SFAs every day from officials of DSCSC.

b.                 The Transporters should make the delivery of SFAs to Fair Price Shops within a period of three working days after the receipt of Release Orders from the FCI.

c.                  The delivery of SFAs should be made at the concerned Fair Price Shops within three hours on the same day after issue and departure from FCI Godown.  The Transporter should avoid delivery of SFAs during late hours and their staff should behave properly with the Fair Price Shops. 

d.                 The Transporter shall unload the goods only at the licensed premises of the concerned Fair Price Shop and is no case the goods shall be unloaded at any other place without the prior written permission of the authorized representative of the DSCSC.

e.                  In case the Trucks/vehicles loaded with stocks of SFAs fails to reach premises of the concerned Fair Price Shop within the stipulated time and date or the premises of the concerned Fair Price Shop are found closed at the time of arrival of the said Trucks/vehicles the Contractor shall keep the stock at DSCSC Godown.

f.                   No Transporter will be allowed to dump the SFAs outside the Godown and in case of non-compliance of the instructions, strict action as per the agreed terms will be taken against the Transporter.

g.                 No Transporter will shift the SFAs from one Truck to another Truck in and outside the Godown.  In this regard the “Godown in charges” are advised to inform the Competent Authority in the Headquarters about the non-compliance of any instructions issued for the Transporter.

h.                 The “Godown in charges” should ensure that the Transporters as per agreed terms provide sufficient number of Trucks.  In case the Transporter is not providing the required number of Trucks, the “Godown in charges” may hire the Trucks from the local market after giving intimation to the Transporter and approval from the Competent Authority. Pendency should not be allowed to accumulate in any case.

i.                    The Transporter shall also collect from DSCSC, the Fair Price Shop Holder’s copy of the Release Orders and the samples of wheat and rice given at the time of issue of SFAs by the FCI and carry the same along with the issued stock at the time of delivery to the Fair Price Shop holder’s premises.  The Contractor shall obtain receipt of the Release Order copy and the sample together with the receipt against delivery of SFAs on the back side of the Weighment Cum Challan Memo duly signed and affixed with rubber stamp by the Fair Price Shop holder in token of receipt thereof. The Transporter shall submit these receipts in receipt of delivery of said articles, copy of the Release Order and samples to the concerned “Godown in charges” of the DSCSC on the next working day positively.

j.                   The Transporter shall ensure that lifting is done in the early working hours of the day as far as possible to avoid late hours supply by Transporters.

k.