Saturday, January 12, 2013

Supreme Court of India | People's Union of Civil Liberties Vs.Union of India & Ors.

People's Union of Civil Liberties
Union of India &Ors.
... Petitioner
... Respondents
(In pursuance to Order dated 17.09.2012 of the Hon'ble Court)1
ITEM NO.205               COURT NO.10             SECTION PIL
            S U P R E M E   C O U R T   O F   I N D I A
                         RECORD OF PROCEEDINGS
PEOPLE'S UNION FOR CIVIL LIBERTIES                Petitioner(s)
UNION OF INDIA & ORS.                             Respondent(s)
CONMT. PETITION (CIVIL) NO. 99/2009 IN W.P. (C) No. 196/2001
W.P. (C) No. 277/2010
SLP(C) NO. 17453 of 2006
SLP(C) NO. 10654 of 2012
Date: 07/01/2013  This Petition was called on for hearing today.
For Petitioner(s) Mr. Colin Gonsalves, Sr. Adv.
Mr. Amit Shukla,Adv.
                     Ms. Jyoti Mendiratta, Adv.
                     Mr. Nasushad Ahmad Khan,Adv.
Mr. Nakibur Rahman,Adv.
Mr. R.C. Kaushik ,Adv
For Respondent(s) Mr. P.P. Malhotra,ASG
Mr. A Deb Kumar,Adv.
Mr. R.K. Rathore,Adv.
Mr. Chetan Chawla,Adv.
Mr. Chetan Choudhry,Adv.
Mr. A Deb Kumar,Adv.
Mr. Neeraj K Sharma,Adv.
Mrs. Anil Katiyar,Adv.
Mr. M.S. Doabia,Adv.
Ms. Sushma Suri, Adv.
MS. Sunita Sharma, Adv.
Mr. W.A.Qadri, Adv.
Mr. Gaurav Sharma, Adv.
MR. Gaurav Dhingra, Adv.
Mr. T.A.Khan, Adv.
Mr. Nizam Pasha,Adv.
Mr. Anil Gaur,Adv.
MS. Supriya Jain, Adv.
Mr. D.S.Mahra, Adv.
Ms. Rashmi Malhotra, Adv.
Mr. M.S.Doabia, Adv.
Mr. S.S. Rawat, Adv.
Ms. Gunwant Dara, Adv.
MS. Supriya Jain, Adv.
Mr. B.V.Balramdas, Adv.
Mr. Zaid Ali,Adv.
Mr. MDN Pasha,Adv.
Mr.Goorav Sharma,Adv.
Mr. D.S.Mahra, Adv.
                     Ms. A. Subhashini ,Adv
                     Mr. Gopal Singh ,Adv
Mr. Ritu Raj Biswas, Adv.
Mr. Gopal Singh, Adv.
Mr. Manish Kumar, Adv.
Mr. Soumitra G Chaudhuri,Adv.
Mr. Abhijit Sengupta,Adv.3
Ms. Faisal M.,Adv.
                     Mr. Ranjit Kumar,Sr.Adv.
Ms. Hemantika Wahi ,Adv
Ms. Jesal,Adv.
Mr. Shubhada Deshpande,Adv.
                     Ms. Indra Sawhney ,Adv
                     Ms. Kamini Jaiswal ,Adv
                     Mr. Vishnu B Saharya,Adv.
M/S Saharya & Co. ,Adv
                     Mr. Naresh K. Sharma ,Adv
                     MR. Sanjit Sen, Adv.
Mr. Anirudh Gupta,Adv.
Mr. Prashant Kumar, Adv.
Mr. P. Parmeswaran ,Adv
                    Mr. Pramod Swarup,SR.Adv.
Mr. Modh. Fuzail Khan,Adv.
Mr. Gaurav Dhingra, Adv.
Mr. D.Mahesh Babu, Adv.
Mr. Mayur R Shah,Adv.
Ms. Savita Devi,Adv.
Mr. Amit K Nain,Adv.
Mr. MB Shivudu,Adv.
Mr. Amjid Maqbool,Adv.
Mr. K.N.Madhusoodhanan, Adv.
Mr. R.Satish, Adv.
Ms. K.Enatoli Sema, Adv.
MR. Amit Kumar Singh, Adv.
                     Mr. Tara Chandra Sharma ,Adv
                     Mr. K.V.Mohan ,Adv                  
                     Dr. Manish Singhvi,AAG, Raj.
Mr. Amit Lubhaya,Adv.
Mr. Irshad Ahmad ,Adv
                     Mr. Ranjan Mukherjee ,Adv
Mr. S.Bhowmick, Adv.
Mr. S.C.Ghosh, Adv.
Mr. R.P. Yadav,Adv.4
Mr. Rakesh K.Sharma, Adv.
Mr. Gopal Prasad, Adv.
                     Mr. V.G. Pragasam ,Adv
Mr. S.J.Aristotle, Adv.
Mr. Praburamasubramanian, Adv.
                     Mrs. D. Bharathi Reddy ,Adv
                     Mr. Shivaji M. Jadhav ,Adv
                     Mr. Anil Kumar Jha ,Adv
Ms. Priyanka,Adv.
                     Mr. Chander Shekhar Ashri ,Adv
Mr. Vikas Upadhyay,Adv.
Mr. B.S. Banthia ,Adv
                     Mr. Ramesh Babu M.R. ,Adv
                     Mr. Khawairakpam Nobin Singh ,Adv
Mr. Sapam Biswajit Meiti, Adv.
                     Mr. Prashant Kumar ,Adv.
                     Mr. Anil Shrivastav ,Adv
Mr. Rituraj Biswas, Adv.
                     Mr. Sanjay R. Hegde ,Adv
Mr. Sanjay V Kharde,Adv.
                     Mr. Sunil Fernades, Adv.
Ms. Insha Mir,Adv.
MS. Vernika Tomar, Adv.
Ms. Astha Sharma,Adv.
                     Mr. Vishwajit Singh ,Adv
                     Mr. Manjit Singh, Adv.
Mrs. Vivekta Singh,Adv.
Mr. Tarjit Singh,Adv.
Mr. Kamal Mohan Gupta ,Adv
Mr. Mukesh Verma,Adv.
Ms. Rachana Srivastava ,Adv5
                     Mr. Suresh Chandra Tripathy ,Adv
Mr. Dilip Kumar Sharma,Adv.
                     Ms. Bina Madhavan ,Adv
Ms. St. Kesala,Adv.
                     Mr. Riku Sharma, Adv.
Mr. Navnit Kumar, Adv.
M/S Corporate Law Group ,Adv
                     Mr. Rajesh Srivastava ,Adv
Mr. Utkarsh Sharma,Adv.
                     Mr. Jatinder Kumar Bhatia ,Adv
                     Mr. Ravi Prakash Mehrotra ,Adv
                     Ms. Sumita Hazarika ,Adv
                     Mr. Pragyan P.Sharma, Adv.
Mr. Heshu Kayina,Adv.
Miss Sagarika Moitra,Adv.
Ms. Mandakini Sharma,Adv.
Mr. P.V. Yogeswaran,Adv.
Ms. Indra Sawhney,Adv.
Mr. P.V. Yogeswaran ,Adv
Mr. A Mariarputham,Adv.Gen
MS. Aruna Mathur, Adv.
Ms. Movita,Adv
Mr. Yusuf Khan,Adv. for
M/s. Arputham Aruna & Co.,Advs.
                     Mr. Ravindra Keshavrao Adsure ,Adv
                     Mr. Ajay Bansal,AAG, Pb
Mr. Devendra Singh,Adv.
Mr. Dheeraj Gupta,Adv.
Mr. Rajiv Kumar,Adv.
Mr. Gaurav Yadav,Adv.
Mr. Pardaman Singh,Adv.
Mr. Kuldip Singh ,Adv
Mr. B Balaji,Adv.
Mr. R Rakesh Sharma,Adv.
                     Mr. S. Thananjayan ,Adv6
                     Mr. Vikas Mehta ,Adv
Mr. Avijit Bhattacharjee,Adv.
Mr. Bikas Kargupta,Adv.
Mrs. Sarbani Kar,Adv.
Ms. Debjani Das Purkayastha,Adv.
                     Mr.T.V.George ,Adv
Mr. Atul Jha, Adv.
Mr. Sandeep Jha, Adv.
Mr. Dharmendra Kumar Sinha, Adv.
                     Ms. Anjana Chandrashekar ,Adv
                     Mr. Anuvrat Sharma ,Adv
                     Mr. Chandra Bhushan Prasad ,Adv
Mr. Naveen R Nath,Adv.
Mr. G Prakash,Adv.
Mr. Venkateshwara Rao Anumolu,Adv.
Mr. Milind Kumar,Adv.
Mr. B.Balaji, Adv.
Mr. R.Rakesh Sharma, Adv.
Mr. P Krishnamoorthy,Adv.
Mr. Ashok Kumar Sharma, Adv.
Mr. Avinash Kumar Jain, Adv.
Mr. T.S. Duabia,Sr.Adv.
Mr. Manpreet Singh Doabia, Adv.
Mr. S.S. Rawat, Adv.
                     Dr. Kailash Chand, Adv.
                     Mr. Aruneshwar Gupta ,Adv
Mr. GN Reddy,Adv.
Mr. M Rambabu,Adv.
Mr. S Nagarajan,Adv.
Mr. V.N. Raghupathy,Adv.7
Mr. Vipin Kumar Sharma,Adv.
Mr. Raghuveer Sharma,Adv.
Ms. Priya Hingorani,Adv.
Dr. Aman Hingorani,Adv.
Ms. Swati Sumbly,Adv.
M/s. Hingorani & Associates,Advs.
Mr. A.K. Singh Tarun,Adv.
Mr. Debasis Misra,Adv.
Mr. Kumar Rajeev,Adv.
Mr. Anil Srivastav,Adv.
Mr. Pradeep Misra,Adv.
Mr. C.U. Singh,Sr.Adv.
Mr. Sanjay V Kharde,Adv.
Ms. Asha Gopalan Nair,Adv.
Mr. D.M. Nargolkar,Adv.
Mr. Suresh Chandra Tripathi,Adv.
Mr. Dilip Kumar Sharma,Adv.
Mr. M.N. Krishnamani,SR.Adv.
Mr. Gaurav Dhingra,Adv.
Dr. Dhavan,Sr.Adv.
Mr. P.S. Patwalia,Sr.Adv.
Mr. Viraj Kadam,Adv.
Mr. Rohit Shetty,Adv.
           UPON hearing counsel the Court made the following
                               O R D E R
A final report summarising the recommendations of the
Committee has been received from Justice D.P. Wadhwa, pursuant
to  our  order  dated  17.09.2012.   Learned  counsel  for  the
parties submit that they did not have the advantage of going
through the final report.  They pray for issue of copies to
them  or  at  least  uploading  of  the  recommendations  on  the8
Website of the Supreme Court of India to enable each one of
them to download a copy of the report and file their response.
We accordingly direct the Registry to either prepare
copies for delivery to the counsel appearing in these cases or
if  it  is  otherwise  permissible  upload  the  report  on  the
Website of the  Supreme Court of India so as to enable each
one  of  the  counsel  to  get  a  copy  of  the  same  for  its  use.
Learned counsel for the State Governments concerned shall also
respond  to  the  report  and  recommendations  summarised  by
Justice Wadhwa.
Mr.  PP  Malhotra,  ASG,  assures  the  Court  that  the
learned Attorney General for India, who is not available today
will appear and assist the Court on the next date of hearing.
Post on 8.2.2013 at 2.00 PM.
We are at this stage informed that two reports have
been  received  from  the  office  of  Mr.  N.C.  Saxena  -
Commissioner.  Learned  counsel  apearing  for  the  State
Governments  seeks  time  to  file  their  objections  to  the  said
reports.  They are free to do so on or before the next date of
hearing.  Advance copies of the same be furnished to Mr. Colin
Gonsalves, Sr. Adv., appearing for the petitioner.
As  prayed  by  Mr.  PP  Malhotra,  ASG,  list  IA  No.
98/2010 in WP (C) No. 196 of 2001 also on the next date of
(N.K. Goel)
Court Master
(Veena Khera)
People's Union of Civil Liberties
Union of India & Drs.
... Petitioner
... Respondents
(In pursuance to Order dated 17.09.2012 of the Honble Court)
Public Distribution System (PDS) is the largest food distribution network of its
kind in the world. Yet it has acquired notoriety of being the most corrupt system in the
country. There is undoubtedly nexus between the Fair Price Shop (FPS) owners,
transporters, bureaucrats and politicians. Diversion of PDS food grain occurs, both in
the supply chain as well as at the FPS. Information technology can be used to curb
this menace of food grain diversion. Modern technology will help in ensuring that the
beneficiary regularly receives his / her entitlement of food grains of same quality as
has been issued by the Fe!.
2. Honble Court by its Order dated 17.9.2012 calied upon the Central Vigilance
Committee (CVC) to sum up its final recommendations in two streams - (i) those which
could be dealt at the national level so as to be applicable to all the States in the
country and (ii) those which would be specific to any region or State. As far as latter
part of the directions is concerned, Ole has already submitted separate report for each
State giving specific recommendations and applicability thereto. To illustrate,
functioning of PDS in Tea Estates in West Bengal and Assam; law and order problems
in Manipur, Jharkhand and Odisha; relating to militancy and inaccessible areas of the
States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand during winter and
rainy seasons when certain areas are cut-off, are some of the issues on which
1Committee has made specific recommendation in the relevant reports. Hon'ble Court
has also desired that the recommendations of the Committee could be on short term /
immediate measures to be taken by the Central and / or State Governments as also
long tenm objectives to be pursued by them over the years.
3. The Committee has, therefore, bifurcated recommendations into long term and short
term so that these could be implemented in a proper manner. As to long term
objectives two Important steps would be (I) consttution of Civil Supply Corporation In
every State I Union Territory and (2) Computerization of whole PDS operations. For
short term measures, recommendations could be (i) Identification of beneficiaries I
Inclusion and Exclusion errors (ii) Storage capacity (iii) Transportation of PDS
foodgralns (IV) Viability of Fair Price Shop (v) Accountability and monitoring (vi)
Allocation of foodgrain on per unit basis (Vii) Vigilance Committee (Viii) Complaint
Mechanism (ix) Allotment of FPS (x) Awareness of beneficiaries (xi) Vigilance and
Enforcement (Xii) Functioning of FPS (Xiii) Supply of Fortified alta (XiV) Elimination of
Bogus and Fake ration cards (xv) Electronic Weightment (XVi) Issuance of ration cards
(xvii) Implementation of Honble Supreme Court's Order' dated 08.05.2002 and
02.05.2003 (XViii) Allocation of PDS foodgrain from Centre to States / UTs on the basis
of projected population, 2012 (xvii) Joint Sampling and (xviii) Abolition of APL category
(XiX) Special measures for poorest districts In the Country.
4. Public Distribution System evolved as a system of management of scarcity and for
distribution of food grains at affordable prices. Over the years, PDS has become an
important part of the Govemment's policy for management of food economy in the
1 1. The Hon'ble Supreme Court by the Order dated 02.05.2003 directed as follows:
i. That the licence 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 blackmarketing or siphoning away of grains to the open market and hand over such ration shops to such
other person/organisations, will be liable to be cancelled.
ii. The Government of India was directed to place the under mentioned classes of persons in the MY
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 9agedm60 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.
2. By the order dated 08.05.2002 the Hon'ble Supreme Court has directed that shops will remain open during
fixed hours.
2country. There ane over five lakh Fair Price Shops in the country which distribute food
grains under the PDS. Currently aliocation of food grains under TPDS is made by the
Government of India to Slates/Union Territories for APL and BPL including Antyodaya
Anna Yojana (MY) families.
5. PDS is operated under the joint responsibility of the Central and the Slate
Governments. The Central Government has taken the responsibility for procurement,
storage, transportation and bulk allocation of food grains etc. The responsibility for
distributing the same to the consumers through the network of Fair Price Shops (FPSs)
rests with the State Governments. The operational responsibilities induding allocation
within the State, identification of families below poverty line, issue of ration cards,
supervision and monitoring the functioning of FPSs, rests with the State Government.
To streamline the system, Central Government has issued Public Distribution System
(Control) Order 2001. Regrettably, Slates are not giving fuli effect to the Order.
6. PDS has not yielded benefits to the extent intended. This is on account of various
reasons viz. collusion between persons involved in the PDS Supply Chain
resulting in leakage and large scale diversion of food grains; flawed system
of appoinbnent of FPS dealers; errors of inclusion and exdusion which deny
targeted beneficiaries of their entitlement and resulting in faulty
identification of target groups; virtually non-existent vigilance machinery at
the grass root level; too many categories for entitlement resulting in dilution
of targeting of deserving beneficiaries; long drawn and ineffective
procedure for dealing with malpractices that allows the guilty to get away;
too many functionaries involved in the process resulting in dilution of
acc::ountability and fixing of responsibility; lack of adequate supervision over
PDS operations at the field level and laxity which often does not result in
any punishment to persons found negligent at the supervisory and higher
levels for negligence in supervision when in the nonnal course the
supervisors should also be held responsible as any diversion results in
wastage of public resources; undue political interference; and lastly a
corrupt implementing machinery and all in all a sleepy and sloppy
programme where there is freedom to play with its great objectives with
impunity to derive unlawful pecuniary benefits.
37. Everyone from the Prime Minister down the line is seized of the need for revamping,
overhauling or restructuring the PDS. To revamp the system drastic steps are required
to be taken. Patchwork wili not do. Two important steps would be (1) constitution of a
Civil Supply Corporation in every State I Union Territory and (2) Computerization of
whoie PDS operations.
On Civil Supplies Corporation
i. It is a known fact that FPS is epicentre of corruption where FPS owner, transporter,
corrupt officials and politicians are hand in gloves to cheat the public. Statistics show
that standMalone FPS is not viable. FPS owner has to indulge in diversion of PDS food
grain into black·market and earn illegal gain which he shares with his collaborators.
FPS owner is corrupt. Yet States have made categories of persons whom FPS can be
aliotted. When there is no profit why should State invite persons in whatever category,
when he is bound to indulge in corruption. State cannot be seen sponsoring corruption
or tum a blind eye to corruption. Diversion of PDS food grain in black-market deprives
the genuine beneficiary to get his aliotted quantity of foodgrain. Choice is thus
between a corrupt FPS functioning and State itself taking over the functioning of FPS.
For this purpose it becomes essential that a Civil Supplies Corporation in the State is
constituted to work as an independent body to distribute PDS food grain at FPS level
and take over existing FPS.
Ii. Constitution of Civil Supplies Corporation in every State which will lift food grain from
Fe! and distribute to the FPS, as it is not possible, especially in larger States for FPS
dealer to lift food grain directly from Fa godowns. The State level Corporation can
also take up intermediate storage before delivery to FPS. Where the States are
following the decentralized procurement scheme, the supply can be made direct from
State godown to FPS, thus cutting I shortening the supply chain. In 13 States' there
are Corporations but all are not necessarily dealing wholly or partially in PDS.
2 l.West Bengal Essential Commodities Supply Corporation ltd.
2. Bihar State Food & Civil Supplies Corporation ltd.
3. Gujarat State Civil Supplies Corporation ltd.
4. H.P. State Civil Supplies Corporation ltd.
5. Punjab State Civil Supplies Corporation ltd.
6. Tamil Nadu Civil Supplies Corporation ltd.
7. Kerala State Civil Supplies Corporation ltd.
8. Andhra Pradesh State Civil Supplies Corporation ltd.
4iii. Ideally FPS should be run by State level Corporations, Panchayat Raj Institutions,
Cooperatives and registered Women self-Help Groups. FPS should not be run by
private individual. Wherever FPS is operated by private individuals, they should be
phased out gradually and their place be taken over by Corporation run FPSs or
Cooperatives or Women Self-help Groups. Where the State is having a large size of
area, there could be even two Corporations, which will also be good for competition.
There are other distinct advantages of FPS being operated by the State level
Corporation. FPS will abide by various rules and regulations/directions. There will be
less than usual complaints relating to non-opening of FPS on time or opening on a day
or so in a week, maintenance of record, weighment (quality and quantity), charging of
high price, attitude of salesman and like. salesman will be under the control of
Corporation subject to its rules and regulations. Corporation could itself have a
number of trucks fitted with Global Positioning System (GPS) which can also serve as
mobile FPS at times. Mobile vans can be pressed into service by the Corporation
where certain areas are inaccessible. Or in the alternative it should hire dedicated
trucks with appropriate tracking tools like GPS.
iv. Corporation should be made self-suffident. Corporation should be able to absorb the
loss, if any suffered by FPS run by it, from its other arovities. Commission now payable
to FPS will be payable to Corporation and it should be appropriately fixed. Attempts
however, should be made that no burden be placed on the beneficiaries belonging to
BPl/AAY categories. Any loss in the operation of Corporation should be compensated
by the State by making budgetary provisions. Where no infrastructure like shop and
godown exists for operating FPS it should be built by State / Corporation on the lines of
Mother Dairy outlet or ATM or Post Office. Land can be proVided to the Corporation by
the State or by the Panchayat for the purpose. Not much funds are required to build
infrastructure. Panchayats have also sufficient resources to build infrastructure.
v. State Govt. is entrusted with the distribution of food grain under PDS and should act
only as a regulator and the distribution should be left with the Corporation, an
independent body. Corporation should be headed by a senior lAS officer.
9. Mdhva Pradesh State Civil Supplies Corporation ltd.
10. Orissa State Civil Supplies Corporation ltd.
11. Chandigarh State Civil Supplies Corporation
12. Karnataka Food & Civil Supplies Corporation
13. Delhi State Civil Supplies Corporation.
5vi. Since diversion of food grains occurs in the supply chain it should be shortened. Once
Corporation is established, supply chain would be from FeI to Corporation to FPS. It
will be for the Corporation either to take food grain from FeI and make door step
delivery to FPS or keep the same in its own godown and property distribute. Once
Corporation is established all intenmediaries like wholesalers in some States must be
vii. TIll Corporation is established, FPS wherever established should be allotted either to
mUltipurpose cooperative or to a registered women self help group. It is assumed that
Cooperative would be viable. For woman self help group, FPS should be like kiranas I
grocery shops, so that it absorb the loss suffered by operating FPS or add to the
nominal income it earns from the FPS operation.
viii. It must be understood that FPS is basically for the benett of benefidaries. There
cannot be hereditary allotment of FPS. FPS licence has to be renewed after verification
and at that time FPS can be allotted to Cooperative or self woman help group.
Wherever it is not possible I practicable it should take over by the Corporation or even
attached to a neighbouring FPS or even put into operation by mobile vans.
On Computerization
i. Modem technology can help checking of diversion of PDS food grain.
ii. Public Distribution System (Control) Order 2001 provides that the State Government is
to ensure monitoring of the functioning of the PDS at the Fair Price Shop level through
the computerization network of NIC installed in the NIC centres. Control Order
further provides that for this purpose computerized codes shall be issued to each FPS
in the District. No State took notice of these provisions and took no steps towards
computerization of PDS.
iii. Central Vigilance Committee (CVC) in its report on Delhi submitted in August 2007,
pointed to these provisions of the Control Order and recommended for the
computerization of PDS in the State. After visiting some more States OIC submitted a
comprehensive Report on Computerization in February 2009. Central Government in
2009 approved a scheme on computerization of PDS on pilot basis in three districts in
each of the four States viz. Andhra Pradesh, Assam, Chhattisgarh and Delhi. There
was no positive response from the States.
6iv. Central Government in 2008 invited Union Territory of Chandigarh and Haryana State
to take up computerization of PDS in their respective areas and even provided funds
for the purpose. Accordingly, a scheme on Smart card based delivery of essential
commodities under TPDS was sanctioned during 2008-09. Administrative approval of
this scheme was made on 18.12.2008 with an expenditure of Rs.142.29 crore.
Unfortunately nothin9 appears to have been done towards full computerization of PDS
in Chandigarh and Haryana and there exists only a blame game between Nrc and
private vendors.
v. Since all this period no visible initiative was taken and States did not show any
inclination towards computerization. The Central Government appeared helpless and
there was large scale diversion of PDS food grain both at supply chain and at FPS
level. Hon'ble Supreme Court was approached on the basis of the report submitted by
OIC for appropriate directions.
vi. 1n its Order date 27.7.2010 Hon'ble Supreme Court said that to avoid pilferage and
corruption, there must be total computerization of the PDS on top priority basis and
that Union Govemment "must prepare a software and the same software should be
used by all the States". The Court further observed that Union Government may
consider computerization in consultation with the specialized agency like UIDAI or any
other agency. Accordingly, on 9.8.2010 Union Govemment set up a Task Force
headed by Director General, National Informatics Centre (NIC). The Task Force was
constituted of Representative of Department of 1nformation Technology;
Representative of Unique 1dentification Authority of India (UlDAI); Representative of
Department of Food & Public Distribution; Representative of Food Corporation of 1ndia
and Secretary of select States (Andhra Pradesh, Assam, Chandigarh (U1),
Chhattisgarh, Deihi, Haryana Uttar Pradesh and Tamil Nadu) as members. The Task
force submitted its report on 1.11.2010.
vii. In its Order dated 29.3.2011, Hon'ble Supreme Court observed that the matter was
pending for several years but no real progress had been made in computerization
programme and that it was absolutely imperative that computerization be put in
place as expeditiously as possible. Directions were issued to the Central Govemment
to take appropriate steps to have a High Powered Committee (HPC) which can take
assistance of all concerned to ensure computerization of PDS. The Committee so
constituted was to monitor the programme of computerization on regular basis.
7viii. High Powered Committee (HPC) was thereafter constituted with the Chairman, OIC
and Director General, NIC; Director General, UIDAI; secretary Department of Food &
Public Distribution, Govt. of India and Supreme Court Commissioner or his
representative, as members. This Committee was formally constituted by Govemment
Order dated 3.5.2011. HPC submitted its report to the Hon'ble Supreme Court in
August 2011. On 14.9.2011 Hon'ble Supreme Court passed a detailed Order as to the
steps to be taken towards computerization.
Thereafter meetings have been held and some States submitted action plans. In its
Order dated 23.2.2012 Hon'ble Supreme Court observed that there appears to be no
coordination between the Central Government and the State Governments and that
"this long outstanding problem can be sorted out if the secretary, Consumer Affairs,
Food and Public Distribution, Government of India, is made in-charge of the
computerization Pl1l9ramme in PDS". Hon'ble Court nominated secretary, Department
of Food & Public Distribution as the Chief Coordinator of computerization programme
and directed to coordinate with all the Chief secretaries of the States and
Administrators of Union Territories.
ix. In spite of all these directions it is apparent that the process of computerization is
distressingly slow and urgency is not being shown by the States. As the things stand,
it may take even five years towards computerization.
x. Immediate steps are required to be taken by the States. States should follow the
steps on priority basis as directed in the order dated 14.9.2011. First and foremost is
the collection of digital data. The States must complete the process of digitization of
data within the prescribed time period. It has been reported that 11 States/Union
Territories have completed the process of digitization of data which is yet to be
cleaned as it has been done with the help of FPS dealers. Now the data must be
cleaned with the help of UIDAI or RGI (Registrar General of India) data. The process
of computerization may take time, meanwhile the States should introduce IVR based
toll free number for redressal of complaints, SMS alert system for social audit and
information on distribution of food grain be uploaded regularly on the national web
portal. Chhattisgarh model be put in place to check diversion of food grain in supply
a. IdentiFIcation of beneficiaries {Indusion and Exdusion ErTOrs
There is great deal of inclusion and exclusion errors in identification of BPL families.
There are no fixed criteria for identification of BPL families under TPDS. For BPL
identification some States like Tripura adopted 'income' and 'expenditure' approach
based on the BPL Census, 1992 and 1997 respectively. Other States like Punjab follow
"SCore Based, Ranking" criteria based on 13 cardinal indicators as laid down in BPL
Census 2002 while some other States have their own criteria for identifying BPL
families. For example in State of Uttakhand any family having monthly income more
than Rs.7S0{- is not a BPL.
The first and foremost thing for the central Government is to lay down criteria for BPL
category. Thereafter, steps should be taken for identification of BPL families. 1n that
case, there should be no cap on the number of BPL families. Usts of BPL and MY
families should be reviewed every year for the purpose of deletion and indusion of
b. Storage capacity
There is an acute storage of covered storage capacity with FeI as well as State
Govemments. It is found that the States where procurement is being done do not have
sufficient storage space and the food grains was lying on the roads. Proper
infrastructure must be developed by Fe1 and the States for storage of food grains. 1n
the HlIIs and inaccessible areas, there is need to have storage capacity for storing food
grains supplies for 3 to 6 months.
In some States like State of Odisha, Assam, West Bengal etc. there are storage agents,
which lift PDS food grain from FCI and store it in its own godown and thereafter
distribute PDS food grain to FPS dealers. These intermediate { storage agents should
be eliminated.
The construction of covered storage capacity by the FCI as well as State Govemment
with a proper boundary wall and parking space for vehicles meant for transportation of
PDS foodgrain should be taken up on priority. Some States are facing difficulty in
providing land for construction of storage base for food grains due to high cost of land.
9Rail Land Development Authority has identified about 43000 hec. of vacant land
available with the railways, which can be utilized for constructing storage for food
grains by FCI and the States/Corporation which will fadlitate moving the food grains
through rail to State/Corporation godowns and from godowns to the FPS.
c. Transportation of PDS food grains
The Civil Supplies Corporation or Department where Corporation is not formed should
lift the stock from the FeI godowns and deliver it to the FPS for distribution. The States
which have decentralized procurement scheme, supply of food grain can be made
directly from the state godown to the FPS. There should be door step delivery at FPS
Level. As far as possible, there should be no intermediately storage by the corporation
after lifting the stock from FCI godown. This will help in reducing the cost incurred on
multiple handling as well as reduce the pilferage and diversion of PDS food grain.
Wherever possible, corporation can also have their own trucks for carrying of stocks
from the FCI /State godowns to the FPS. The Corporation can also provide Mobile vans
for distribution of PDS items in the inaccessible areas.
Further, induction of Global Positioning System (GPS) technoiogy keep a track on the
movement of trucks carrying food grains from the FCI to Fair Price Shops. This will
also enable the authority to fix responsibility on the transporter if the stock does not
reach the FPS at the scheduled time. Steps should also be taken to make the trucks
carrying PDS food grain identifiable either by painting them with a specific colour or by
putting banners stating that they are carrying PDS commodities.
d. Viability of Fair Price Shop
The FPS nun by the Corporation can sell other grocery items in addition to the PDS
items and can nun as a Departmental Store instead of FPS. This will help in cutting
down the losses which are incurred by the FPS while seliing only PDS items. If at all,
FPS incurs loss that loss will be of the Corporation and the direct responsibility of the
State. salesman appointed by the Corporation will be paid uniform salary and will be
under the rules and regulations of the corporation.
In some States like Delhi, it was found that State Civil Supplies Corporation is earning
profit from distributing / transporting PDS commodities to FPS. The Corporation may
make nominal increase in the saie price of PDS commodities to adjust losses suffered
10due to running of FPS. FPS allotted to the Co-operative/ Multi-purpose Societies must
do other work apart from running FPS, so that the losses, if any, incurred from the FPS
might be adjusted in the earning of Co-operative from other sources.
e. Accountability and Monitoring
i. State Government should ensure strict monitoring of PDS. Inspection of Fair Price
Shops and Godowns should be done regularly/frequently.
ii. The allocation of PDS food grain to the FPS dealer should be made taking into
consideration the dosing balance of PDS food grain stock with the FPS in the
previous month. It was found by this Committee that 100% allocation is done to
FPS without checking utilization certificate. Hence allocations be made strictiy on the
basis of closing balance shown in the Utilization certificate.
iii. It should be ensured that the stock reaches the FPS during the first week of the
month positively, as it is seen that in most of the States the FPS dealer is receiving
the stock in the last week of the month and distribute it within 2-3 days.
iv. Modem technology should be used for dtizen participation in monitoring PDS, like
registering of mobile numbers by the citizens on the website of the department so
that whenever PDS commodities are dispatched to an FPS from the warehouse, an
SMS/email alert service about foodgrains availability at FPS is sent to all the mobile
numbers registered for that FPS, For instance in the State of Chhattisgarh, citizens
can register their mobile numbers on the web·site of the Department by selecting
one or more FPSs. Whenever POS commodities are dispatched to an FPS from the
warehouse/State Godown, an SMS is sent to all the mobile numbers registered for
that FPS.
v. Social audit of FPS functioning, developing a "transparency partaiN to proVide
information and data about POS, setting up a toll·free call centre to monitor
complaints, and digitization of PDS beneficiary database and putting it public
domain etc. are some of the measures which the states should introduce
vi. The State Government should involve the Gram Panchayat, Gram sabha, NGOs,
resident welfare, in monitoring distribution of foodgrains under POS.
11f. Allocation should be made on unit basis
In many states distribution of PD5 food grain is on tile basis of ration card irrespective
of tile number of units (members) in tile family. This appears to be ratller incongruous.
A single person holding ration card will get 35 Kgs. of food grain every month while a
family of 7 to 8 persons holding a ration card will also get 35 Kgs. of food grain. This
system has to be rationalized. Ration should be allotted on the basis of units or
members per ration card and not on the basis of family. Generally speaking a family of
3 members is given 21 Kg., a family of 6 members be given (35 + 7 kg.), 7 members
(35+7+7 kg.) and so on.
g. Vigilance Committees
On paper there are many vigilance committees to monitor the distribution of food
grains. But on ground these Committees are non-functional and almost defunct. There
is no check on tile food grains brought by tile FPS dealer or supplied to tile State by
Fa and distribution tIlereof to tile beneficiaries.
Urgent action may be taken by the concerned State authorities to reactivate or
reconstitute FPS Level Vigilance Committees. The process of selection and
appointment of members of such committees should be transparent and should involve
ration card holders, particularly, the household women in the area. The non-political
persons should be appointed in the Committee. Deputy Commissioner / Collector of a
district concerned should be responsible for conducting the meeting of Vigilance
Committees regularly. The Vigilance Committee should meet at least once in two
montlls at the Coilectorate on a fixed day and time. The date of such meetings should
be notified for information of general public. The minutes of meeting of the committee
should be prepared and a copy of tile same along witll tile action taken report should
be sent to the Department and put into public domain. To ensure that the members of
the Vigilance Committees regularly attend the meetings, a token fee or remuneration
should be paid to them for participation in the meeting. If Vigilance Committees
receive any complaint from beneficiaries, the same shall be forwarded / reported to the
Department and follow up the action taken on the complaints received.
12h. Complaint mechanism
i) Lok Adalat
In view of the large number of oomplaints received by the general public, a
separate Lok Adalat on lines of Telephone/Electricity Lok Adalats should be
established for PDS issues for every district of the country. The collector I
additional oollector of ooncerned district should oonduct the Lok Adalat to be
associated with the officer heading the district or Taluk level Legal services
Authority. Matters raised in the Lok Adalats must be decided in a time bound
ii) Ombudsman I Regulator
A post of Ombudsman/Regulator should be set up to regulate the working of PDS at
Central level. They may be authorized to issue directions suo-motu or on
complaints for improvement of the PDS. At the Central level the regulator can call
for the reports from the States on various issues brought to the notice of the
Ombudsman/Regulator. The State Government may also create such type of
institutions as regulator to oversee the functioning of PDS in the State.
iii) Toll free complaint number
A Toll free number based on IVR and a separate call center should be established to
register the complaints and redressal thereof to the beneficiary.
i. Allotment of Fair Price Shop
State Civil SUpplies Corporation should open and operate the Fair Price Shop. The
advantage of FPS being run by the State level Corporation is that they have to abide by
various rules and directions issued by the Department from time to time. FPS will open
and close on time, maintain proper record, charging the correct price etc. As sales man
is an employee of the corporation, he has to abide by the rules and regulations of the
FPS may also be allotted to Co-operative Societies, registered Women self-help Group
and Upbhokta Bhandar/Kiryana/Grocery shop subject to the financial viability such
units. The necessary condition is thpt the Co-operative must be doing other work apart
from running FPS. Wherever shop is given to a Cooperative, it should be under the
control of two Departments viz. Civil SUpplies Department and the Cooperative Dept!.
13Role of both the Departments should be clearly specified. Co-operative Department
should rej. Awareness of Beneficiaries
To create awareness among the people at the lowest level following steps can be
taken -
L A press release, in vernacular, should be issued at the beginning of the month
indicating the quantity of PDS items released to the various FPS dealers in the
District also indicating entitlement of various categories along with the price Irate of
the commodities which the FPS dealer is to charge from the beneficiaries.
ii. Local TV channels may also be requested to show the details as mentioned at (a)
above on their scroll to create the awareness among the people.
iii. Hoardings be dispiayed at prominent piaces and Pamphlets may be distributed in
the schools I colleges and in general public giving the above information to make
people aware of their entitlement.
iv. The monthly entitlement of the beneficiary along with the rates of the commodities
must also be stamped I printed on the ration cards so that the beneficiaries are not
cheated by the FPS dealers.
v. Toll free complaint / enquiry number along with the address of Ombudsman shouid
be stamped on each ration card.
k. Vigilance and Enforcement
These should be Zero Tolerance Approach in the matter of enforcement of various
provisions of Essential Commodities Act, 1955; Public Distribution (Control) Order,
2001 and the Prevention of Black Marketing and maintenance of Supplies of Essential
Commodities Act, 1980. There are certain areas in the country where residents depend
exclusively on PDS fDodgrain. It is therefore essential that proper supply of PDS
foodgrain is maintained. Provisions of these the Prevention of Black Marketing and
maintenance of Supplies of Essential Commodities Act, 1980 be invoked whenever
there is any threat to disrupt supply of PDS fDodgrain. Oistrict Magistrate / Collector
has to be made responsible for maintaining regular supply of PDS fDodgrain. The cases
14of diversion or black marketing of PDS foodgralns either by FPS or by transporter or by
the offioals of the department should be tried under these Acts. Fast track courts
should be set up to try offences under these Acts.
There is need to strengthen the prosecution machinery. Often it was observed that
once AR is lodged then department never follows same. They just appear in court if
court summon for witness. In many cases when officers get transferred or retired other
officers hardly know about matter and file is just kept as record. In every district there
should be some designated department officer who should be responsible to follow the
prosecution matters. Special squads be set up by the state consisting of persons from
the Administration and the police and should be placed directly under the District
Magistrate / Collector. These squads should carry out surprise checks and responsible
for launching criminal prosecution against officials of the Deparnnent, FPSs, etc.
I. Functioning of FPS
PDS food gain should reach the FPS in the first week in a month and FPS should be
open daily. FPS opening and ciosing timings should be fixed and followed by FPS
deaier. Provisions of PDS Control Order, 2001 should be strictly followed in the State.
sale Centers/ Fair Price Shop must display information regarding number of APL, BPL
and MY ration cards attached with FPS, scale of food grains for the month, rate list,
stock received dUring the month, opening I dosing balance on each day, time of
opening and closing of sale center I FPS and Authority for redressal of grievances or
lodging of complaints etc. The FPS dealer should also maintain the stock register, issue
register list of BPL / MY beneficiaries, toll free number/name and telephone number of
designated officer for lodging the complaint by the publiC, display sample of foodgrain
m. Supply of Fortified Attil
In order to check the diversion of PDS wheat, fortified wheat flour be supplied under
PDS instead of wheat. Since the shelf life of wheat flour is limited to 45-60 days only,
safeguards should be taken to maintain the quality of wheat flour Opposition to supply
of wheat flour instead of wheat comes from FPS only. In many states visited by the
Committee, beneficiaries want wheat flour and not wheat due to non-availability of
Atta chakkis in the neighbour-hood and also saving of time on getting wheat grinded
15from the Chakkis. Distribution of Atta under TPDs also keeps a check on inftationary
trend in the market. Various brands of Atta in the market are sold @Rs.18-20/- per kg.
Many state like State of Himachal Pradesh, Rajasthan, West-Bengal etc., are issuing
wheat fiour under PDs to the beneficiaries @Rs.9-10 per Kg. The states/lITs have to
ensure that modern dedicated mills should be engaged for grinding wheat into fortified
atta. The dedicated mills and the atta produced should have Agmark [Agricultural
Produce (Grinding and Marketing Act 1937)]. Atta should be packed in small packs of
5 Kg. or 10 kg poly to poly bag. The details like date of packing, expiry, etc., should be
dearly printed on the Atta bags. It should always be consumed within 45 days of
The provisions of Prevention of Food Adulteration Act and Packaging and Measurement
Act should be strictly observed. It must be understood that an adulterator can cause
great harm to the health of the public and the responsibility in the case will have to be
n. Elimination of Bogus and Fake ration cards
Bogus I fake / ghost ration cards are in drculation in almost every State and it is a
major source of diversion of precious PDS food grain. This fact is well known to the
FPS owner and the officials of the Department. A strong drive has to be undertaken to
weed out such cards. To check this menace, an amnesty scheme may be adopted.
Under this scheme, one month's time will be given for surrender of bogus/fake ration
cards. After this period, a door to door verification should be conducted by utilizing
the services of Legal Aid service Authority. Any bogus card found during survey should
be cancelled and punitive action be taken including filing of FIR against the card
holder, FPS dealer and the concerned ration card issuing authority / official of the
department. Record of the FPS will be checked and in case it is found that any
particular ration card has not been used, it may stand cancelled. Any application
received for restoration of ration cards will be considered by a Committee of lawyers
appointed by the Legal Aid services Authority of Tehsil or district. If it is found that
absence of card holders to draw ration was on bona-fide ground, the card may be
16o. Electronic Weighment
There must be an electronic weighment system connected to the online computerized
system at every FCI and block godown of the State. At the FPS level the same may be
integrated to the point of sale device as suggested in the separate report on
computerization. Only computer generated weight check memos and truck chit should
be issued.
p. Issuance of ration cards
In many districts the ration cards had been issued more than 10 years ago and are in
extremely poor and unusable conditions. This gives the FPS dealer an excuse to avoid
making entries in the card. At many places the Committee found that the ration cards
of the beneficiaries had been deposited at the Tehsil office/FPS for renewal but had
not been issued to the beneficiaries for months. The beneficiaries are left without cards
for months together and cannot claim their PDS entitlement. The drive to issue fresh
ration cards should be accelerated. Ration cards should be renewed regularly after due
verifications. Any Addition / deletion or any alteration in the ration card should be done
in a time bound manner.
q. Implementation of Supreme Court Orders
Hon'ble Supreme Court has issued various orders pertaining to transparency and
proper functioning of Public Distribution System. These orders should be properly
implemented in the Country.
r. Allocation of PDS food grain from Centre to States/UTs should be done on
the basis of projected population, 2012
Under TPDS, Central Government is allocating food grain to the States/UTs on the
basis of projected population of 2000. In the year 2000 the projected population of
India was 99 crore. In 2012, the population of India is estimated as 122 crore.
Government of India claims that it provides additionaljAdhoc allocation from time to
time which covers this population gap. But the reality is this additionaljadhoc food
grain seldom reaches the beneficiaries. No advertisement is given for this
additionaljadhoc food grain and most of the time this additional/adhoc food grain is
diverted into the black market with the nexus of FPS dealers and corrupt officials.
Allocation of PDS food grain from Centre to States/UTs should be done on the basis of
2012 projected population. Additional/adhoc food grain under TPDS should be stopped.
17s. Joint sampling
The system of supply of sealed sample packets by FCI to the State godowns and
thereafter to the FPS should be rigorously followed to ensure that PDS foodgrain Is not
substituted by inferior quality foodgrains.
t. Abolition of APL category
Many APl families do not lift their PDS ration from FPS. This food grain is diverted into
black mar1APl families. Allocations are made to APl families at subsidised rates of Rs.6.IO per Kg
and Rs.8.30 per Kg for Wheat and R;ce respectively. It involves subsidy of more than
Rs.9 per Kg on Wheat and Rs.12 per Kg. on Rice.
Committee has recommended in its various reports that APL category should be
abolished as it is a source of diversion of foodgrains into the black market. While
suggesting abolition of APL category, Committee also mentioned that if the Court was
of the view that it may not be possible or desirable to abolish the APl category
altogether, it may consider limiting the APl category to households whose annual
income is Rs. One lakh. This category may be called "Marginally Above Poverty Une
(MAPl)". During the course of hearing of this petition it was suggested that this figure
of Rs. one lakh could be considered to be enhanced to Rs. two to three lakh. On the
recommendation of the Committee, a notice was issued to Central Government on
abolition of APl to which Central Government filed an affidavit through Ms. Alka Sirohi,
the then secretary, Department of Food & Public Distribution, Government of India. It
is apparent from the affidavit of Central Govemment that "allocation for APl category
may be continued till the finalization of the proposed law on food security".
u. Special Measures for Poorest Districts &. Vulnerable sections of the Society
in the Country
L. Additional Adhoc allocation
Hon'ble Supreme Court by Order dated 14th May, 2011 while considering various
problems affecting the distribution of PDS food grains directed the Central Government
to reserve 5 million tonnes of food grains for distribution to 150 poorest districts and
vulnerable sections of the society in the country. This task was given to the central
Vigilance Committee. This 5 Million Tonnes of food grains was to be distributed to 150
18poorest districts or small pockets in our country where majority of people of that
district live in penury on the recommendation of the Committee.
In order to comply with the directions of the Hon'ble Court, Committee requested
Planning Commission to provide list of 150 poorest districts in the country. Planning
Commission provided two lists viz., a list of 150 most backward districts identified for
implementation of National Food for Work Programme and another list of 147 districts
for launching Rashtriya Sam Vikas Yojana. Committee combined both the lists and
identified 174 poorest districts. Thereafter requests were received from some States to
include some more districts as poorest districts in their respective states. Accordingly,
205 districts were identified as poorest. Allocation of food grains was to be made to
these districts out of 5 million tonnes food grain placed at the disposal of the
Parameters for allotment were arrived at a meeting with the Officers of the central
Government and representatives of the Petitioner. Out of SO lakh tonnes, 43.11 lakh
tonnes of food grain has so far been allocated to these 205 districts during 2011-12
and 2012-13. The period of this additional allocation shall be extended keeping in view
the lifting position and request received from the states/lITs.
ii. Community Kitchen I Dal Bhat Kendra
Considering the need of vulnerable sections of the society who do not have enough
money even to buy subsidised food grains or are too weak to get the allotment and to
buy food grains, Committee has devised a scheme for prOViding cooked food to the
poorer segments of our society at nominal cost or free in the backward districts of the
country with the help of Corporates/PSUs working in those areas under Corporate
Social Responsibility (CSR) Pr09ramme. The scheme envisages that community
kitchens would be run at selected areas, both urban and rural, in the District
Headquarters like Coliectorates, City Hospitals, Bus Stops or provide cooked food
through vans which will take cooked food to pockets inhabited by poor and
vulnerable people. The scheme is being implemented with the active participation of
District Magistrates.
To begin with, Community Kitchen have been set-up under CSR in the States of
Andhra Pradesh, Bihar, Himachal Pradesh, Odisha and Uttarakhand near District
Hospitals for providing cooked food on nominal cost or free to the attendants of the
19poor patients admitted in these hospitals. These attendants accompany the poor
patients from distant places with scarce resources to fend themselves against hunger.
While the District Administration will create necessary infrastructure for these kitchens,
the Government will provide food grains on highly subsidised rates. However, to meet
the administrative expenditure for running these kitchens like expenditure on
vegetables, pulses, fuel, etc., financial help of PSUs in various States may be seek. It
can be run with the help of NGO working in the area with proven track record The
District Magistrate/Collector of district concerned should be made incharged for
running these kitchens smoothly and effectively.
iii. Free Food Coupons
During visits to the poorest districts in various States Committee found that there are
many families who are living in penury. For the persons who hold cards under the MY
scheme but are unable to purchase food grains even at subsidized rate; or those
persons who do not fall under MY scheme/Annapurna Anna Yojna Scheme or any
similar scheme implemented by the State Government but are living in state of pen \ry
and are unable to obtain food grains by their own means, 10 food cards/coupons
should be given to each Gram Panchayat in all the poorest and backward districts to
meet any emergency situation. In an emergent situation, the Gram
Panchayat/Tehsildar/S.D.M may issue food cards/coupons to such affected persons
entitling them to receive 10 Kg food grains per card/coupon per month free of cost on
presenting/tendering of card or coupon, as the case may be, to the FPS dealer. At the
end of the month, number of cards/coupons distributed by the Gram
PanchayatjTehsiidar/S.D.M will be replenished and the FPS dealer shall be prOVided
additional food grains accordingly.
:v ',-
(Justice (Retd.) D.P. Wadhwa)
New Delhi
Dated: 29
December, 2012

No comments:

Post a Comment