Goverdhan Prasad vs State of Bihar and Others

Dr. Ravi Ranjan, J.—In view of joint submissions made at the Bar, this writ application is also being disposed of in terms of judgment dated 23.07.2014 passed in C.W.J.C. No. 8172 of 2014 which is noted as under:

"Heard learned counsel for the parties.

The prayer of the petitioner in this writ application initially when it was filed, reads as follows:

"1. (i) For issuance of writ in the nature of Mandamus for direction to the respondents to lift the remaining quantity of the paddy which is supply by respondent No. 7 from Daniyawa Procurement Centre for milling. (ii) For issuance of writ of Mandamus for direction to the respondents to pay the milling charge to the petitioner including the carriage charge which is provided by the petitioner for carrying the CMR (Rice) from mill to the Godown of the F.C.I. as per instruction of respondents where as in the agreement itself the responsibility of carry CMR from the mill to the Godown was on B.S.F.C." 3. At a subsequent stage, an interlocutory application being I.A. No. 4224 of 2014 was filed wherein additional relief was sought by way of quashing of demand notice dated 02.05.2014, Annexure-8 to the interlocutory application, which reads as follows:

Let it be noted that similar writ applications, with almost the same grievance as in the present case, have already been disposed of by this Court yesterday by an order dated 22.07.2014 in CWJC No. 9133 of 2014, CWJC No. 12355 of 2014 and CWJC No. 12356 of 2014 and, therefore, this writ application also is squarely covered by the observations, findings and the directions given in the aforementioned three cases.

Mr. Shashi Bhushan Kumar, learned counsel appearing on behalf of the petitioner, has however sought to impress that the petitioner is still ready and, in fact, willing to explain his defence as against the impugned demand notice before the authorities of the Corporation, but the difficulty for the petitioner is that the authorities of the Corporation are bent upon in taking coercive steps against the rice mills including the petitioner either by way of lodging of criminal case or by way of launching certificate proceeding.

Mr. R.S. Pradhan, leaner senior counsel appearing on behalf of the Corporation, has, however, submitted that since the petitioner has not even filed his representation before the authorities of the Corporation as against the impugned demand notice issued by the District Manager, he cannot be allowed to make speculation.

In the considered opinion of this Court, there being an inter-party agreement between the petitioner in capacity of owner and proprietor of M/s. Krishna Rice Mill dated 03.04.2013, he cannot avoid the payment of price of Custom Mill Rice (CMR) and consequently the impugned demand notice dated 02.05.2014 based on the terms and conditions of an inter-party agreement between the petitioner and Corporation can not be interfered by this Court specially when there is also remedy proscribed in the same agreement, relevant part whereof reads as follows:

"3. The second party is at liberty to take paddy for milling as much as the quantity he desires during the said procurement season in accordance with his monthly milling capacity but, he has to furnish bank guarantee for the value of paddy, which he takes for milling or in case, he is not capable of furnishing bank guarantee, he has to pledge immovable property in the form of mortgage bond for the rest amount or he can pledge immovable property for the entire value of paddy which he takes for milling. The property details so mortgage must be certified to be in his one name by the competent authorities either by the circle officer of the block or SDO of the concerned sub-division so that in case of default of second party or any deviation of paddy may be recovered.

Out turn ratio for boiled rice is 68% and for raw rice 67% on ''As where is basis and by-product like husk, broken etc. obtain from milling shall be property of the second party.

After receipt paddy second party will deliver proportionate percentage of rice within a month of the date of paddy and only than, any further paddy as desire according to monthly milling capacity will be issued to the second party by the first party. In case of delay in delivery of proportionate percentage of rice, appropriate penalty in terms of money will be charged by competent authorities with interest at Bank lending rate.

Rice will be accepted in the same gunny bags in which the paddy delivered by first party. For the first consignment/Lot, rice will be delivered by the second party in new SBT gunny bags. The excess gunny bags will be return by the second party and if retained by the second party, then cost of excess gunny bags (in which paddy is supplied to second party) will be deducted by the first party @ 60% of new gunny bags at the purchase rate from DGS and D, Kolkata for KMS 2012-13 and will be adjusted from the bills submitted by the second party.

The second party will provide godowns at their mill premises as per milling capacity for storage of paddy, CMR, so that the authorized representative of first party or Food and Consumer Protection Department can inspect the stock quantity and quality of CMR ready for delivery to first party.

The second party will store paddy at the mill premises only Storage of paddy shall not be store at any other place.

Rs. 20/- per quintal as paddy milling charges will be paid for par boiled rice and Rs. 10/- per quintal milling charges will be paid for raw rice to the second party after getting the proper bill from the second party.

Rice shall be bagged in standard weight of 50kg. and all bags are to be double machine stitched in red thread and bags should be duly stencilled with blue colour showing name of the mill and station, crop year, net weight, commodity, variety and lot No.

The second party will supply CMR to the first party. CMR received from second party will be transported by the first party to the tagged depot of Food Corporation of India, proportionate paddy will be actually released by the Bihar State Food and Civil Supplies Corporation Ltd. Patna to the second party from different Procurement Centres.

The second party will submit daily/weekly/monthly report of ready CMR for delivery and status of paddy lying in mill to the concerned District Manager and District authority.

In case of any deviation from above agreed terms and conditions or any default on the part of the second party, bank guarantee submitted by the second party will be forfeited by the first party and Legal action against the second party shall be taken including recovery of amount from the mortgaged immovable property by way of attachment and sale.

It has also been agreed that payment of milling charge will be made only after delivery of due rice as per specification and acceptance of CMR by Food Corporation of India.

The second party also agrees to abide by the instructions issued by State Government from time to time, and the terms of agreement.

The second party agrees that in case, any amount found recoverable on account of default, loss, damage on the part of the second party, the said recoverable amount with interest will be recovered as Land Revenue under Bihar and Orissa Public Demands Recovery Act, 1914, by instituting Certificate case before the concerned District Certificate Officer.

In case of disputes both parties agree to settle the issue(s) on mutual discussion. Failure to reach agreement the matter will be referred to arbitrator. It has been also agrees that the arbitrator will be District Collector of the concerned District whose decision shall be final, concerning the dispute referred to him.

(underlining for emphasis)

It has to be noted that the Corporation, in the event of non-supply of CMR under Clause-12 of the agreement was entitled to take any legal action which would definitely include lodging of FIR. or even launching of a certificate proceeding as is contemplated under Clause 15 of the agreement quoted above.

This Court, however, is not aware as to whether any criminal case and/or certificate proceeding has been launched in the case of the petitioner and, therefore, when the petitioner himself wants to get the dispute settled by approaching the authorities of the Corporation by way of conciliation in terms of Clause-16 of the agreement all that this Court can observe is that if the petitioner would file his representation, as against the impugned demand notice before the Chairman-cum-Managing Director of the Corporation, efforts will be made to settle the dispute by the competent authority of the Corporation and in the event on failure of such settlement by way of conciliation between the petitioner and the Corporation, it would be always open for the petitioner to take recourse to arbitration in terms of Clause 16 of the agreement, which is a compact clause in the agreement for both conciliation followed by arbitration.

Mr. Pradhan has, in fact, assured that if the petitioner would file his representation against the demand notice, the same shall also be disposed of expeditiously so that if the petitioner becomes aggrieved on account of refusal of settlement of dispute by the Corporation, he can take recourse to arbitration proceedings. He has also assured that till disposal of the representation, no further coercive action will be taken against the petitioner beyond what has already been taken against him in terms of the agreement.

In that view of the matter, this Court would give liberty to the petitioner to avail the remedy given in Clause 16 of his agreement provided for resolution of dispute to be raised by him initially by way of conciliation before the authorities of the Corporation and in the event on failure of such settlement of dispute in course of such conciliation, it will be always open for the petitioner to take recourse to arbitration proceeding before the named arbitrator namely Collector of the District.

With the aforementioned observation and direction, this writ application is disposed of."

Accordingly, the petitioner would be at liberty to avail the remedy given in the agreement concerned for resolution of dispute to be raised by him initially by way of conciliation before the authorities of the Corporation and in the event on failure of such settlement of dispute in course of conciliation, it would always be open for the petitioner to take recourse to arbitration proceeding.

It is further made clear that Mr. Pradhan, learned Senior Counsel appearing for the respondent Nos. 4 and 5 assures that till disposal of the such representation, if filed within three weeks before the Managing Director of the Corporation, no further coercive action will be taken against the petitioner other than what has already been taken.