Fair Price Shop licence cancellation and necessity of impleading interim allottee during pendency; licence reinstatement challenge succeeds.

Cancellation of a fair price shop licence without conducting a full-fledged inquiry was contested; the note emphasises the necessity of impleading a person appointed as a subsequent allottee during pendency because absence of a necessary party vitiates proceedings, and non-impleader can lead to dismissal. It records that appointment of a new dealer during appeal made that allottee a necessary party, and that failure to include that party in High Court proceedings justified quashing the impugned order and allowing the appeal on that ground.

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Issues: (i) Whether the subsequent allottee appointed during the pendency of proceedings was a necessary party to the writ petition and entitled to be heard; (ii) Whether suppression of the subsequent allotment by the earlier allottee in proceedings before the High Court amounted to fraud or material non-disclosure warranting quashing of the High Court's order.

Issue (i): Whether the subsequent allottee appointed during the pendency of proceedings was a necessary party to the writ petition and entitled to be heard.

Analysis: The Court considered precedents distinguishing necessary and proper parties and noted that a necessary party is one in whose absence no effective decree could be passed. The Court reviewed earlier decisions including the position that even where a subsequent allottee may not have an independent legal right, selection and regular appointment by competent authority during the pendency can affect rights and therefore the subsequent allottee has a right to be heard. The facts showed the appellant was selected by the Tehsil Level Selection Committee and regularly appointed by order dated 15th May 2018 during the pendency of the appellate proceedings.

Conclusion: The subsequent allottee (appellant) was a necessary party to the proceedings before the High Court and was entitled to be impleaded and heard.

Issue (ii): Whether suppression of the subsequent allotment by the earlier allottee in proceedings before the High Court amounted to fraud or material non-disclosure warranting quashing of the High Court's order.

Analysis: The Court found that respondent No.9 knowingly omitted to disclose the regular allotment to the appellant and affirmatively misrepresented that no third party allotment had been made and that the shop had been attached to another dealer. Relying on authority that non-disclosure of relevant material documents to obtain advantage constitutes fraud and renders the judgment or decree a nullity, the Court held that the earlier allottee's conduct amounted to suppression and misleading of the High Court.

Conclusion: The suppression of the subsequent allotment by respondent No.9 amounted to material non-disclosure/fraud and warranted setting aside the High Court's order restoring the licence.

Final Conclusion: The appeal is allowed on the grounds that the appellant was a necessary party not impleaded and that the earlier allottee suppressed material facts amounting to fraud; accordingly the High Court order is quashed and the original cancellation and appellate orders are affirmed.

Ratio Decidendi: Where a subsequent allottee has been regularly appointed during pendency and thereby acquires interests affected by the litigation, the subsequent allottee is a necessary party entitled to be heard; additionally, deliberate suppression of material facts or documents that misleads the court amounts to fraud and vitiates the order obtained thereby.

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