Case Background
The case arose from a dispute over a PDS shop licence in Munger district, Bihar.
The licence had been issued in the name of the Chairman of a cooperative/self-help type body called Mahadeo Jan Seva Sansthan Samiti. The person holding that post was Kamal Kumar @ Kamal Kishore.
After some time, Kamal Kumar @ Kamal Kishore resigned from the post of Chairman. Because of this resignation, the society wanted the licence to be changed in the name of another office bearer.
A request was made before the licensing authority for change of name of the licensee. On 17.12.2020, the Sub-Divisional Officer (Sadar), Munger, rejected this request. The authority relied on Rule 16 of the Bihar Targeted P.D.S. (Control) Order, 2016, stating that the licence under the PDS scheme is non-transferable.
Aggrieved by this decision, the petitioner approached the Patna High Court in Civil Writ Jurisdiction Case No. 5591 of 2021, challenging the S.D.O.’s order dated 17.12.2020.
What the Court Examined and Decided
The Division Bench of the Patna High Court, consisting of Hon’ble Mr. Justice Ashutosh Kumar and Hon’ble Mr. Justice Anjani Kumar Sharan, heard the matter on 21.02.2022.
The Court first noted that the challenge was specifically to the order dated 17.12.2020 passed by the Sub-Divisional Officer, Sadar, Munger, refusing to change the name on the PDS licence.
The reason given by the authority was that the licence under the PDS scheme is non-transferable as per Rule 16 of the Bihar Targeted P.D.S. (Control) Order, 2016.
On behalf of the petitioner, Senior Advocate Mr. N.K. Agarwal argued that Rule 16 itself deals with transfer of licence. According to him, the rule prohibits transfer of licence in the name of any member of a family or any other person and also prohibits induction of partners in such licence.
His submission was that this restriction is aimed at individual licensees and private arrangements. Therefore, according to him, it should not be applied in the same way to licences issued in the name of self-help groups or cooperative societies.
In simple terms, the petitioner’s side said: Rule 16 prevents one individual licensee from passing on the licence to another individual or adding partners. But when the licence is linked to a society or group, and the office bearer changes within that group, it should not be treated as a “transfer” in the sense prohibited by Rule 16.
The Court then examined what material was available on record to show how the cooperative society had structured its internal functioning, especially regarding change in the post of Chairman.
The Bench clearly recorded that nothing had been brought on record to indicate the procedure by which the post of Chairman of the cooperative society would be filled up in case of his resignation or in case the post fell vacant for any other reason.
In other words, there was no document before the Court explaining what would happen within the society when its Chairman resigns: who takes charge, whether any particular office bearer (like Treasurer or Secretary) automatically becomes in-charge, or whether a new Chairman is elected.
The Court then referred to the requirements under the Bihar Targeted P.D.S. (Control) Order, 2016 for cooperative societies applying for PDS licences. Under that framework, any cooperative society or self-help group desirous of obtaining a licence must apply under Schedule 2 to the Control Order of 2016.
Schedule 2 requires certain details to be provided at the time of application. One of these required inputs is the details of the members of the Managing Committee of the society. This would include who are its office bearers.
Another important requirement is that the society must state, in advance, that in case the Managing Committee is superseded, who would be named and designated as an Administrator.
This means that when applying for a licence, a cooperative society has to be clear and transparent about who is running it and who will manage its affairs if the existing managing body is removed or becomes non-functional.
The Court then linked these conditions to the present situation of a Chairman’s resignation and the request to shift the licence to another office bearer.
The Bench observed that perhaps the petitioner did not specify before the licensing authority, while making the request for transfer of licence in the name of the Treasurer of the cooperative society, that in the absence of the Chairman—either due to resignation or vacancy for some other reason—the Treasurer would act as in-charge Administrator in the interregnum.
This observation is important. It shows that, in the Court’s view, the licensing authority needs a clear basis on record to recognise another office bearer as the person authorised to hold the licence on behalf of the society, especially when the Chairman has resigned.
If the original application or later communication from the society does not clearly say that the Treasurer (or some other office bearer) will automatically be in charge upon vacancy of the Chairman’s post, the authority has no formal foundation to accept such a change.
Because this information was apparently not provided, the Court held that the only order the licensing authority could pass, applying Rule 16, was to reject the request. In other words, given the incomplete information, the S.D.O.’s rejection could not be termed illegal on the material then available.
At the same time, the Court took note of another submission made by Mr. Agarwal. He stated that, at present, he was not aware whether such information regarding future in-charge arrangements had been provided by the cooperative society at the time of obtaining the licence in its name.
In view of this uncertainty, the Bench chose not to continue with a strict upholding or quashing of the impugned order. Instead, it adopted a practical approach that would allow the cooperative society to correct the record and provide all necessary details.
The Court disposed of the writ petition with a specific direction.
It directed that if a fresh application is filed before the licensing authority, along with the necessary inputs mentioned in the judgment—namely, the details required under Schedule 2 and clear indication of who would act as Administrator or in-charge if the Chairman resigns or the Managing Committee is superseded—then the authority must consider that application.
The Court further directed that such a fresh application, once made, should be decided without delay, preferably within eight weeks of filing of the representation.
The authority must pass a speaking order, meaning an order that clearly gives reasons for accepting or rejecting the request, and the decision must be communicated to the petitioner.
With these directions and observations, the writ petition was disposed of. The impugned order of 17.12.2020 was not formally quashed, but the door was kept open for a fresh, reasoned decision based on complete information.
Why This Judgment Matters
This judgment is important for cooperative societies and self-help groups running PDS shops in Bihar.
First, it shows that simply asking to change the name on a PDS licence, after an office bearer resigns, may not succeed unless the society has already given full details of its internal management structure to the licensing authority.
Second, the judgment underlines the importance of Schedule 2 of the Bihar Targeted P.D.S. (Control) Order, 2016. Societies must clearly state who are their committee members and who will act as Administrator if the Managing Committee is superseded or if key posts fall vacant.
Third, even when an authority rejects a request relying on Rule 16 (non-transferability of licence), there is scope to approach the Patna High Court. However, the Court will look at whether the society itself had supplied all required information. If not, the remedy is usually to make a fresh, complete application.
For shop operators and beneficiaries, the decision highlights that continuity of PDS operations depends on having proper documentation and clear succession plans within the society managing the shop.
Legal Issues and Answers
Issue: Whether the Sub-Divisional Officer was wrong in rejecting the request to change the name on a PDS licence, treating it as a prohibited transfer under Rule 16 of the Bihar Targeted P.D.S. (Control) Order, 2016.
Answer: On the existing record, the rejection could not be faulted, as the cooperative society had not clearly informed the authority who would be in-charge on the Chairman’s resignation. However, the society is permitted to file a fresh application with full details, which the authority must decide by a reasoned order within about eight weeks.
Issue: What should cooperative societies or self-help groups do when internal changes occur regarding their office bearers who hold PDS licences.
Answer: They must provide all necessary inputs required by the Bihar Targeted P.D.S. (Control) Order, 2016, including details of committee members and who will act as Administrator in case of supersession or vacancy, and seek a fresh, reasoned decision from the licensing authority.
Cases Cited by the Court
- No prior judgments or case law have been cited or relied upon in the text of this decision.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 5591 of 2021
Case Title: Dharmendra Sharma v. The State of Bihar & Ors.
Coram: Hon’ble Mr. Justice Ashutosh Kumar; Hon’ble Mr. Justice Anjani Kumar Sharan
Date of Judgment: 21.02.2022
Citation: 2022 (1) PLJR 676
Advocates: Mr. N.K. Agarwal, Senior Advocate for the petitioner; Mr. Upendra Pratap Singh, AC to SC-4 for the State-respondents
Nature of the Case: Writ petition under civil writ jurisdiction challenging the order of the Sub-Divisional Officer (Sadar), Munger, refusing change of name in PDS licence.
Impugned Order: Order dated 17.12.2020 passed by the S.D.O., Sadar, Munger
Link to Judgment: Patna High Court Judgment in CWJC No. 5591 of 2021
If you found this explanation helpful and wish to stay informed about
how legal developments may affect your rights in Bihar,
you may consider following Samvida Law Associates for more updates.
