Patna High Court
Lodipur Panchayat PACS (Primary Agriculture Credit Society)versusThe State of Bihar
- Decided
- Disposal
- DISPOSED
- Bench
- A ABHISHEK REDDY
Holding
The Court set aside the SDO’s order cancelling the license and directed its restoration to the PACS, barring the previous operator from running the shop.
Summary
The Lodipur Panchayat Primary Agriculture Credit Society (PACS) challenged the cancellation of its operating license by the Sub‑Divisional Officer (SDO) of Rajgir, which was done without verifying the license and relied only on an "unsatisfactory" explanation. The petitioner relied on Government Memo No. 2565 dated 26‑03‑2015, which clarified that a license issued to a PACS cannot be cancelled and that a new chairman may represent the society. The respondents did not dispute the memo but argued that the individual who was in charge during alleged irregularities should not be allowed to run the shop even if the license is restored. The Court held that the SDO’s order was illegal, set it aside, and directed the restoration of the license to the PACS within four weeks, subject to the condition that a different person be appointed to run the shop. The judgment also directed the authorities to resume supplies to the PACS promptly. Consequently, the writ petition was allowed in favour of the petitioner.
Issues considered
- Whether the Sub‑Divisional Officer could lawfully cancel a license issued to a PACS in contravention of Government Memo No. 2565.
- Whether the petitioner is entitled to a writ of mandamus directing restoration of the cancelled license.
- Whether the individual who was in charge at the time of alleged irregularities may continue to operate the shop after license restoration.
Subjects
- license cancellation
- primary agriculture credit society
- mandamus
- government memo
- administrative law
- public authority
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.15893 of 2025
======================================================
Lodipur Panchayat PACS (Primary Agriculture Credit Society) through its
President Ajit Kumar Verma, aged about 52 years (Male), S/o Ajab Narayan
Singh, Resident of Village-Lodipur, P.O. Mokhtarganj, P.S.-Chhabilapur,
District-Nalanda.
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Food and Consumer
Protection Department, Government of Bihar, Patna.
2. The District Magistrate cum Collector, Nalanda.
3. The Sub-Divisional Officer, Rajgi-cum-Licensing Authority.
4. The Block Supply Officer, Rajgir, Nalanda.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Dhananjaya Nath Tiwari, Adv.
For the Respondent/s : Mr. Government Advocate (2)
======================================================
CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
ORAL ORDER
3 22-01-2026 Heard learned counsel for the parties.
2. The present writ petition has been filed for the
following relief(s):-
“(i) For quashing the order
contained in Memo No. 626 dated 02.07.2022
passed by the S.D.O. Rajgir-cum-Licensing
authority whereby and whereunder the license
granted to the Lodipur Panchayat PACS has
been cancelled by Licensing authority in
contravention of Memo issued by Government
vide Memo No. 2565 dated 26.3.2015 clarifying
Patna High Court CWJC No.15893 of 2025(3) dt.22-01-2026
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the legal position and reiterating the license
issued to the PACS cannot be cancelled and as
such the order impugned is bad and illegal in
the eye of law and fit to be set aside.
(ii) to issue writ in the nature of
mandamus for commanding the respondents to
immediately restore the license and allotment of
the petitioner’s society.”
3. Learned counsel appearing on behalf of the
petitioner has stated that the Sub-Divisional Officer without
verifying that the license has been granted to the PACS has
cancelled the same. Though, a clarification has been issued by
the department clarifying the legal position that the license
issued in favour of PACS cannot be cancelled and that in case
the new Chairman is elected, the PACS shall be represented by
the new Chairman. Further it is stated that the Government has
also issued Memo No. 2565 dated 26.03.2015 clarifying above
the legal position and reiterating that the license issued to the
PACS cannot be cancelled. Learned counsel has further stated
that except using the word “unsatisfactory” to the explanation
submitted by the petitioner the Sub-Divisional Officer has not
given other reason for cancelling the license of the petitioner.
4. The learned counsel appearing on behalf of the
respondents has not disputed the above legal position and also
Patna High Court CWJC No.15893 of 2025(3) dt.22-01-2026
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the Memo No. 2565 dated 26.03.2015 issued by the State
Government. However, learned counsel has stated that in case a
direction is given to the authorities to restore the license to the
PACS, the shop cannot be run by the person who was at the
helm of the affairs when the irregularities were committed.
5. The fact that the Government has issued the Memo
No. 2565 dated 26.03.2015 has not been denied by the
authorities. Further, it is also not denied that the license is
granted in favour of the PACS and not in favour of any
individual. As per the Government Memo No. 2565 dated
26.03.2015, the license which is issued in favour of PACS
cannot be cancelled.
6. Having regard to the above, the impugned order
dated 02.07.2022 passed by the Sub-Divisional Officer, Rajgir is
set aside. The Respondent No. 3 is directed to restore the license
in favour of the PACS and further directed to resume the
supplies to the PACS as expeditiously as possible preferably
within a period of four weeks from the date of receipt of a copy
of this order. However is made clear that in case the license is
restored to the PACS the person who was running the shop at
the time of inspection any irregularities were found cannot run
the shop. The PACS is directed to nominate any other person to
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run the shop.
7. With the above directions, this Writ Petition is
allowed to the extent indicated above.
(A. Abhishek Reddy , J)
Gauravkr/-
U
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