Gurpreet Singh Sidhu vs State of Punjab

M.L. Singhal, J.

This is a Criminal Miscellaneous whereby Gurpreet Singh Sidhu (Petitioner herein) is seeking anticipatory bail in case FIR No. 39 dated March 20, 1998 of Police Station Sadar Moga registered under Sections 406/408 of the Indian Penal Code and 7 of the Essential Commodities Act, 1955.

District Manager, PUNSUP, got this case registered at Police Station Sadar, Moga. According to the version put forth by him, for the purposes of procurement of rice for Central Pool, PUNSUP purchases paddy from the market and gets it shelled from various rice millers and the rice millers supply rice to the Food Corporation of India on behalf of PUNSUP. In this manner, rice millers act as agents of PUNSUP. Paddy purchased and rice obtained after shelling belongs to the Central Government. Neither PUNSUP nor rice millers can shell paddy or supply rice without the permission of the Central Government and the safe custody of the paddy is the first and foremost responsibility of the rice millers. As per terms of the agreement, in the year 199495, M/s Sidhu Rice and General Mills, District Moga, agreed to shell paddy belonging to PUNSUP and entrusted to them (M/s Sidhu Rice and General Mills, Moga) and to deliver the Rice after shelling to the Food Corporation of India. Agreement to this effect was written between District Manager, PUNSUP Faridkot and M/s Sidhu Rice and General Mills through their partner C.P.S Sidhu. In October/November, 1994, M/s Sidhu Rice and General Mills was entrusted 1,66,422 bags weighing 1,08,174.3 quintals of Super fine PR106 variety of paddy and 530 bags weighing 344.58 quintals of IR8 quality of paddy. In this manner, the total quantity of paddy entrusted was 1,66,952 bags containing 1,08,518.80 quintals of paddy. Shri G.S. Sidhu, partner of M/s Sidhu Rice and General Mills received this paddy and issued receipt dated November 10, 1994 in favour of PUNSUP. The yield of rice from PR106 quality of paddy was 67% as conversion factor. M/s Sidhu Rice and General Mills, Moga was to deliver 71,027.24 quintals of rice and 2,32,195 quintals of IR8 rice to the Food Corporation of India till February 28, 1995 on behalf of PUNSUP of specification laid down under the Punjab Rice Procurement Control JUDGMENT 1983 as amended from time to time and other orders and notifications issued by the Punjab Government. M/s Sidhu Rice and General Mills Moga did not delivery any rice to the Food Corporation of India. On May 29, 1996, the stocks of paddy entrusted and lying in the premises of M/s Sidhu Rice and General Mills, Moga were physically verified by a team. A representative of the firm available at the time of physical verification was asked by the team members to assist them but he did not respond. As per physical verification conducted by that team, a shortage of 61,265 bags of paddy was found. M/s Sidhu Rice and General Mills was called upon either to accept this shortage and respond to their letter and if they wanted the physical verification could be conducted over again. Partner of the firm took notice delivered to him personally by the official of the Corporation but he refused to acknowledge its receipt. Again the physical verification of the stock was conducted by a team from the head office on August 12, 1986 jointly with the District Food and Supplies Controller, Moga and a shortage of 52,816 bags weighing 84,349.90 quintals was found. In this manner M/s Sidhu Rice and General Mills, Moga embezzled 52,846 bags weighing 34,349.90 quintals of rice.

The learned counsel for the petitioner submitted that agreement was executed by the petitioner on behalf of M/s Sidhu Rice and General Mills with the PUNSUP through the District Manager, PUNSUP. In that agreement, there is a specific clause laying down that in case of nondelivery of rice, the millers will be liable to certain penalties and interest and also the security given by them would be liable to be forfeited. It is also provided in the agreement that in case of any dispute, the matter will be referred to Arbitration. This is provided in clause 17 of the alleged agreement. Shri S.P.S. Puri was appointed as Arbitrator to settle the dispute. It was submitted that in pursuance of clause 17 of the agreement, the matter was referred to Arbitration and the PUNSUP, through its SecretarycumManager and District Manager, Faridkot Punjab filed statements of fact and claims before the Arbitrator on July 27, 1998. It was submitted that it was the duty of the PUNSUP to take care of the stocks lying in the mill premises which were under the control of the PUNSUP Inspectors and the other officials of the PUNSUP and the PUNSUP was required to supply wooden crates which were required to be placed on the ground before the bags were stocked. PUNSUP was also required to supply Polythene covers and ropes to cover the bags to save the paddy from damage by weather, birds etc. When the stock became wet because of rain and got damaged, the local officials reminded the authorities to take care of the stock. Earlier, there had been an enquiry and physical verification was got done through the PUNSUP officials by the Deputy Superintendent of Police, Moga on June 27, 1997 and he submitted report photostat copy of which is Annexure P.2. He found that this firm had not committed any fraud with the PUNSUP. The stock belonging to the PUNSUP had been lying in the premises. It was submitted by Shri I.P.S. Sidhu, AAG Punjab that in order to cover up the shortage, the millers brought inferior paddy and on checking by the team, substandard paddy was found lying there.

Arbitration proceedings are pending. In view of clause 17 of the agreement entered into between PUNSUP and the firm, I think that the petitioner should be allowed anticipatory bail. The Arbitrator is directed to finalise the arbitration proceedings as early as these could be finalised. In the event of arrest, the Investigating Officer will call upon the petitioner to furnish bail. The stay of arrest is made absolute but if the Arbitrator makes an award in favour of the PUNSUP, the awarded amount will be paid by the petitioner without any demur forthwith and if the petitioner fails to pay the awarded amount to the PUNSUP, the stay of arrest will become inoperative and the Investigating Officer will be free to arrest him and also the security amount will be liable right now to be adjusted towards the amount of shortages. In addition, petitioner shall deposit Rs. 10 lacs with the PUNSUP till 25th of April, 1999.

This Criminal Miscellaneous is disposed of in the above terms.