Mahabir Rice Mills vs State of U.P. and Others

Ashok Bhushan, J.—These two writ petitions have been filed by the same Petitioners raising similar issues and have been heard together and are being disposed of by this common judgment.

We have heard Shri Rakesh Pandey, learned Counsel for the Petitioner in the first writ petition, Shri U.B. Singh for the Respondent No. 6 and the learned Standing Counsel for the State Respondents. Shri Ravi Kant, learned Senior Advocate has appeared for the Petitioner in the second writ petition and the learned Standing Counsel has been heard for the State Respondents.

Writ Petition No. 74056/2010, has been filed by the Petitioner praying for quashing the order dated 07/12/2010, Annexure-17 and 18 to the writ petition, by which orders the Petitioner''s representation was rejected and Petitioner was debarred for 5 years.

In Writ Petition No. 10642/2011, the recovery certificate dated 07/12/2010, issued by the Regional Food Controller, Azamgarh, Division, Azamgarh for recovery of Rs. 37,20,507.32/- has been challenged as well as the order dated 31/1/2011, issued by the Sub Divisional Officer issuing warrant of attachment for recovery of the aforesaid amount.

For deciding both the writ petitions, it is sufficient to refer to the pleadings in Writ Petition No. 74056/2010, in which writ petition counter affidavit has been filed by the State as well as by the Respondent No. 6.

Brief facts of the case giving rise to this writ petition are: The Petitioner is a proprietorship firm engaged in hulling paddy into Custom Milled Rice (CMR). The State Government vide Government Order dated 05/10/2009, has issued Government Order regulating paddy purchase policy for the year 2009-2010 (Kharif Marketing). Under the aforesaid Government Order, the paddy was to be purchased from the farmers from different purchase centres. The paddy was thereafter to be given to various rice mills for hulling. The Rice Millers were to be give certain percentage of paddy as rice. The paddy was to be delivered to the millers after test and weighment. An agreement between the Petitioner as well as the Governor of the State was entered on 18/11/2009, laying down various terms and conditions for hulling the paddy and for delivery of custom milled rice (CMR). The Petitioner during the period 05/12/2009 to 04/2/2010, was delivered paddy for hulling into rice. The Petitioner received the said paddy through transporters engaged by the Respondents. Transporters delivered the paddy at the premises of the miller. Under the agreement between the parties, the mill was to hull the paddy and return the custom milled rice (CMR) within 20 days from delivery of paddy stocks. After 28/2/2010, the Respondents were required to realise all the custom milled rice (CMR) and give it to the miller within one month. A show cause notice dated 17/6/2010, was issued to the Petitioner by the Regional Food Controller, stating that the Petitioner was given paddy of 5595.20 quintals for hulling and according to 67 percent 3742.08 quintals of custom milled rice (CMR) was to be delivered, whereas the Petitioner has delivered only 2040 quintals of custom milled rice, hence the rice weighing 1702.08 quintals is still due. The Petitioner was asked to get verified his rice mill and to give the balance custom milled rice (CMR) within 20 days.

Petitioner submitted his reply on 01/7/2010, giving details of the paddy received with details of vehicles and bags including the quantity to the effect that during the period 05/12/2009, to 04/2/2010, Petitioner has been given paddy of only 2815.60 quintals and according to 67%, he has already supplied the custom milled rice (CMR) of 1886.50 quintals and no rice is due on the Petitioner. A notice was issued to the Petitioner on 02/8/2010, by which the Petitioner was asked as to why he be not debarred for 5 years. An F.I.R. was also lodged by the Regional Food Marketing Officer on 19/8/2010, u/s 409 IPC. Case Crime No. 815/2010 against the Petitioner and two other rice millers and the Respondent No. 6 who was Centre Incharge, Food Marketing, Jahanganj. An order was also passed on 20/8/2010, to the Petitioner for recovery of the value of the balanced rice of Rs. 37,20,507.32/-.

A Writ Petition No. 59273/2010, was filed by the Petitioner challenging the recovery of Rs. 37,20,507.32/- and the citation dated 15/9/2010, which was allowed on 08/11/2010, by this Court on the ground that the orders were passed in violation of the principles of natural justice and the Petitioner was permitted to submit his reply within two weeks and the Respondent No. 2, was directed to pass a fresh order in accordance with law. After the order of this Court dated 08/11/2010, Petitioner submitted a detailed reply to the Regional Food Controller on 18/11/2010.

Petitioner''s case is that the paddy was sent by Movement Challan meant for transport thekedar and one for Senior Marketing Inspector on which the Petitioner has put his endorsement of receipt and returned the Movement Challans to the Transport Thekedar and had kept a photo copy of the same. It was stated that the Petitioner has not received the paddy as claimed by the Respondents and the total paddy received was 2815.60 quintals only. Petitioner again submitted a detailed representation for personal hearing along with which he submitted the copy of the challans and the extract of the register of Transport Thekedar. The order dated 07/12/2010, has been passed rejecting the representation of the Petitioner holding that the Petitioner did receive 5585.20 quintals of paddy and the Petitioner''s signature are there on the movement challan and the paddy receipt register. By a separate order dated 07/12/2010, Petitioner was debarred for 5 years. Another order dated 07/12/2010, was passed issuing recovery certificate to the Collector for recovery of Rs. 37,20,507/- from the Petitioner.

Learned Counsel for the Petitioner challenging the orders contended that paddy was sent by movement challan to the Petitioner''s premises. Movement Challan is prepared in four copies. First copy of the movement challan is meant for Transporter, second copy of the movement challan is meant for the rice mill owner, third copy of the movement challan is sent through the transporter to the mill and after endorsement of the receipt from the mill was to be returned to the Centre Incharge and the fourth copy of the movement challan was to be kept as office copy. The Petitioner was sent paddy and along with the transporter only first and third copy of the movement challan was sent and the second copy which was meant for the mill owner was not sent. Petitioner had made endorsement on the third copy of the receipt, photo copy of which was kept by the Petitioner. It is submitted that the Respondent No. 6, who was Centre Incharge at Jahanganj has in fact made manipulation and removed the third copy of the movement challan from the records and has prepared the paddy receipt register which was not required under the rules. It is submitted that in the F.I.R. which was lodged by the Regional Food Marketing Officer against the Respondent No. 6 as well as against other rice millers. It was stated that Respondent No. 6, has not handed over relevant records in the office and relevant records are not available. It is submitted that the Petitioner has submitted a detailed reply on 18/11/2010, giving details and relevant documents including the copies of the challan, but while passing the impugned orders, specific issues raised by the Petitioner have not been considered. It is submitted that in fact the Petitioner has submitted before the Regional Food Controller that in fact the procurement of paddy was not to the extent as shown by the Respondent No. 6 and he made excess payment and to shift the responsibility has put the blame on the Petitioner.

Learned Standing Counsel appearing for the Respondents submitted that under the agreement there is Clause 12, which provides for arbitration clause, hence the remedy of the Petitioner is to approach for arbitration to the Principal Secretary/Secretary Food and Civil Supplies, since the amount is more than Rs. 10 lacs. It is submitted that the Petitioner''s mill has received the quantity as claimed by the Respondents and the orders impugned have rightly been passed.

Learned Counsel appearing for the Respondent No. 6 has also supported the impugned orders and submitted that the Petitioner did receive the quantity of paddy, and the order for debarring the Petitioner for 5 years and directing for recovery has rightly been passed.

We have heard the learned Counsel for the parties and have perused the record.

The case before us raises a very serious issue with regard to the implementation of the scheme of the State Government for procurement of paddy and for obtaining custom milled rice (CMR) from the millers. Allegations made in the orders impugned are to the extent that 1886.50 quintals of rice has not been supplied by the Petitioner to the Respondents, whereas the miller has come up with the case that the quantity of 5585.20 quintals of paddy as claimed by the Respondents was never supplied to the Petitioner and he has supplied the quantity of paddy to the extent of only 2815.60 quintals.

The facts and the issues which have arisen in the writ petition discloses a serious lapse in the implementation of the scheme and serious lapse on the part of either of the parties. Although, the Petitioner in paragraphs 9 and 10 of the writ petition has come up with a specific case claiming about the details of four copies of movement challan and has categorically submitted that the second copy of the movement challan which was for the miller was being retained with the Centre Incharge, Jahanganj and has been filed along with the counter affidavit which was never given to the Petitioner. It has been specifically claimed by the Petitioner that the third copy of the movement challan which is sent through transporter and after receipt of endorsement is returned to the Centre Incharge is necessary which has been deliberately removed. He categorically states that the said third copy of the movement challan contains endorsement of the receipt of the Petitioner.

In the counter affidavit, the State Respondents have filed the paddy receipt register as Annexure CA-3. According to the terms and conditions of the contract and the materials brought on the record, the delivery of rice was made at the millers premises through the transport contractor of the Respondents by movement challans. When the transport contractor is delivering the paddy at the millers premises by movement challan, there is no occasion of paddy receipt register containing any endorsement of receipt of the miller. The paddy receipt register which has been filed as Annexure CA-3, does not inspire any confidence and a bare look of the said register gives an impression that the same has been prepared in one day.

The learned Standing Counsel has referred to para 12 of the Contract which is to the following effect:

Every dispute, difference or question touching out of this agreement or the subject matter thereof shall be referred to the arbitration of the following authorities as per value of the government property involved.

S.No. Level of Arbitration Value of the disputed property 1. District Magistrate upto Rs. 2.00 lacs. 2. Divisional Commissioner above Rs. 2.00lacs and upto Rs. 10.00 Lacs. 3. Principal Secretary/ Secretary, Above Rs. 10.00 lacs. Food Civil Supplies. The decision of the arbitrators shall be final and binding on the parties.

The arbitrator shall give an award which shall be binding on both the parties.

The provision for arbitration by an officer of the Government up to the level of Principal Secretary/Secretary Food and Civil Supplies has been provided for looking to the importance of the scheme and looking to the magnitude of the government property involved. For an amount of above Rs. 10 lacs arbitration is to be made by Principal Secretary/Secretary Food and Civil Supplies.

From the materials brought on the record, it is clear that the Regional Food Marketing Officer himself has lodged an F.I.R. against the Respondent No. 6 who was the Centre Incharge, Jahanganj from where the paddy is claimed to have been supplied to the Petitioner. It has also come on record that the Respondent No. 6 was placed under suspension.

From the provisions of the Government Order dated 05/10/2009, Clause 25, it is clear that the Regional Food Controller/Regional Food Marketing Officer/District Food Marketing Inspector had to ensure that after receiving two lots of CMR a further lot of levy be taken from such miller. However, the miller was under obligation to give back the rice after 20 days. According to the contract the entire (CMR) was to be realised from the miller within one month from the closure of the scheme i.e. 28/2/2010.

From the materials brought on the record it is clear that the first notice was issued to the Petitioner on 17/6/2010. The facts which have come on record clearly demonstrate that there has been lapse on the part of the Food and Civil Supply Officers of the District in not implementing the scheme properly. The District Authorities were under obligation to take steps within the reasonable time. Although the learned Counsel for the parties have addressed their submission elaborately, but since the issues which have arisen in the writ petition require looking into the relevant document, challans and other registers, it is appropriate that the said issues be examined and decided by the authority as has been provided for under Clause 12 of the Agreement, but apart from the determination by the Principal Secretary/Secretary Food and Civil Supplies under Clause 12, the present case also calls for thorough inquiry at the level of Principal Secretary Food and Civil Supplies to find out the responsibilities and liability of various officials at the district level in implementation of the scheme, specially in the context of allegations which have come on the record with regard to the Petitioner and the Respondent No. 6.

In the facts and circumstances of the present case, ends of justice be served in disposing of the writ petitions with a direction to the Respondent No. 1 to take cognizance of the matter under Clause 12 of the Agreement and determine the issues raised by the parties and the liability of the Petitioner, if any. The Respondent No. 1 for determining the aforesaid issues shall also take following steps:

(1) All relevant movement challans by which the paddy was send to the Petitioner''s premises be summoned and looked into. A detailed report from the District Authorities of Food and Civil Supplies be called for. Copy of the movement challan and other documents submitted by the Petitioner before the Regional Food Controller in the proceedings be also looked into including the documents/movement challans submitted by the Transport Contractor. If it is deemed fit and necessary personal hearing be also given to the Petitioner.

(2) The Respondent No. 1, shall endeavour to decide the matter expeditiously. The Petitioner is permitted to file a detailed representation along with all materials relied by the Petitioner before the Respondent No. 1, within one month from today after receipt of the relevant reports and documents to be called for by the Respondent No. 1, an appropriate decision be taken expeditiously.

In view of the facts of the case as noticed above, we are of the view that till a decision is taken by the Respondent No. 1, as directed above, recovery against the Petitioner in pursuance of the order dated 07/12/2010, shall be kept in abeyance. It goes without saying that debarment of the Petitioner for a period of 5 years as directed by order dated 07/12/2010, shall abide and be subject to the decision taken by the Respondent No. 1 hereinafter.

Both the writ petitions are disposed of accordingly.