Arif Memon Vs Union of India

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2025:CGHC:16283 NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 1356 of 2025

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1 - Arif Memon S/o Mr. Ayyub Memon Aged About 45 Years Proprietor Of M/s Gayatri Udhyog 162 Chhotapara Raipur District - Raipur (C.G.) And R/o Village Jhakhrapara Tehsil Deobhog District - Gariyaband (C.G.)

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--- Petitioner(s)

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versus

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1 - Union Of India Through Secretary Ministry Of Consumer Affairs Food And Pulice Distribution Department Krishi Bhawan New Delhi

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2 - State Of Chhattisgarh Through Secretary Department Of Food Civil Supplies And Consumer Protection Mahanadi Bhawan Mantralaya Nawa Raipur Atal Nagar District - Raipur (C.G.)

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3 - Managing Director Chhattisgarh State Co- Operative Marketing Federation Maryadit Atal Nagar Nawa Raipur District - Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited Gariyaband District - Gariyaband (C.G.)

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5 - Collector (Food Department Gariyaband District - Gariyaband (C.G.) 6 - District Marketing Officer Chhattisgarh State Co- Operative Marketing Federation Maryadit Gariyaband District - Gariyaband (C.G.)

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7 - Food Corporation Of India Through Its General Manager Mowa Raipur District - Raipur (C.G.)

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--- Respondent(s)

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WPC No. 1499 of 2025

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1 - Rizwan Memon S/o Shri Abdul Razzak Memon Aged About 39 Years Proprietor Of M/s Rajju Bhai Memon Rice Industries, Ward No. 4, Dongarigaon, District Gariyaband, R/o R.K. Medical Stores, Main Road, Bindranawagarh, District Gariyaband (C.G.)

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--- Petitioner(s)

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Versus

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1 - Union Of India Through - Secretary, Ministry Of Consumer Affairs, Food And Public Distribution Department, Krishi Bhawan, New Delhi.

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2 - State Of Chhattisgarh Through - Secretary Department Of Food, Civil Supplies And Consumer Protection, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, Dist. Raipur (C.G.)

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3 - Managing Director, Chhattisgarh State Co-Operative Marketing Federation Maryadit, Atal Nagar, Nawa Raipur, Dist. Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited, Gariyaband, Dist. Gariyaband (C.G.)

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5 - Collector, (Food Department) Gariyaband, Dist. Gariyaband (C.G.)

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Digitally signed by SHAYNA KADRI

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6 - District Marketing Officer Chhattisgarh State Co-Operative Marketing Federation Maryadit, Gariyaband, Dist. Gariyaband (C.G.)

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7 - Food Corporation Of India Through Its General Manager, Mowa, Raipur, Dist. Raipur (C.G.)

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--- Respondent(s)

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WPC No. 1548 of 2025

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1 - M/s Shriram Rice Industries, A Partnership Firm Through Its Partner Shri Rajesh Pandey Son Of Shri Baldev Pandey, Village Kochbay, Gariyanband, District Gariyaband (C.G.)

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2 - Rajesh Pandey S/o Shri Baldev Prasad Pandey Aged About 54 Years Resident Of Village Kochbay, Gariyanband, District Gariyaband (C.G.)

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--- Petitioner(s)

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Versus

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1 - Union Of India Through- Secretary, Ministry Of Consumer Affairs, Food And Public Distribution Department, Krishi Bhawan, New Delhi

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2 - State Of Chhattisgarh Through Secretary Department Of Food, Civil Supplies And Consumer Protection, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, Distt. Raipur (C.G.)

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3 - Managing Director Chhattisgarh State Co-Operative Marketing Federation Maryadit, Atal Nagar, Nawa Raipur, Distt. Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited Gariyaband, Distt. Gariyaband (C.G.)

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5 - Collector (Food Department) Gariyaband, Distt. Gariyaband (C.G.)

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6 - District Marketing Officer Chhattisgarh State Co-Operative Marketing Federation Maryadit, Gariyaband, Distt. Gariyaband (C.G.)

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7 - Food Corporation Of India Through Its General Manager, Mowa, Raipur, Distt. Raipur (C.G.)

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--- Respondent(s)

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WPC No. 1540 of 2025

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1 - Asif Memon S/o Mr. Ayub Memon Aged About 46 Years Proprietor Of M/s Datar Rice Industries (Unit Ii), Jhakhar Para, Khutgaon, Devbhog, Gariyabandh, District Gariyaband Chhattisgarh.

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--- Petitioner(s)

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Versus

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1 - Union Of India Through Secretary, Ministry Of Consumer Affairs, Food And Public Distribution Department, Krishi Bhawan, New Delhi.

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2 - State Of Chhattisgarh Through Secretary, Department Of Food, Civil Supplies, And Consumer Protection, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar District Raipur Chhattisgarh.

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3 - Managing Director Chhattisgarh State Co-Operative Marketing Federation Maryadit, Atal Nagar, Nawa Raipur, District Raipur Chhattisgarh.

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4 - Chhattisgarh State Civil Supplies Corporation Limited Gariyaband, District Gariyaband Chhattisgarh.

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5 - Collector (Food Department) Gariyaband, District Gariyaband Chhattisgarh.

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6 - District Markieting Officer Chhattisgarh State Co-Operative Marketing Federation Maryadit, Gariyaband, District Gariyaband Chhattisgarh.

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7 - Food Corporation Of India Through Its General Manager, Mowa, Raipur, District Raipur Chhattisgarh.

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--- Respondent(s)

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WPC No. 1362 of 2025

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1 - Asif Memon S/o Mr. Ayub Memon Aged About 46 Years Proprietor Of M/s Datar Rice Industries, Jhakhar Para, Khutgaon, Devbhog, Gariyabandh, District Gariyaband (Cg)

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--- Petitioner(s)

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Versus

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1 - Union Of India Through- Secretary, Ministry Of Consumer Affairs, Food And Public Distribution Department, Krishi Bhawan, New Delhi

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2 - State Of Chhattisgarh Through - Secretary Department Of Food, Civil Supplies And Consumer Protection, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, Dist. Raipur (C.G.)

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3 - Managing Director Chhattisgarh State Co-Operative Marketing Federation Maryadit Atal Nagar, Nawa Raipur, Dist. Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited Gariyaband, Dist. Gariyaband (C.G.)

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5 - Collector (Food Department) Gariyaband Dist. Gariyaband (C.G.)

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6 - District Marketing Officer Chhattisgarh State Co-Operative Marketing Federation Maryadit Gariyaband, Dist. Gariyaband (Cg)

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7 - Food Corporation Of India Through Its General Manager, Mowa, Raipur, Dist. Raipur (C.G.)

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--- Respondent(s)

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WPC No. 1386 of 2025

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1 - Abid Memon S/o Shri Mohd. Ishaque Memon Aged About 44 Years Proprietor Of M/s Ajmeri Industries, Gariyanband And R/o Ambedkar Chowk, Gariyabandh District Gariyaband (C.G.)

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--- Petitioner(s)

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Versus

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1 - Union Of India Through Secretary, Ministry Of Consumer Affairs, Food And Public Distribution Department, Krishi Bhawan, New Delhi.

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2 - State Of Chhattisgarh Through Secretary Department Of Food, Civil Supplies And Consumer Protection, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, Dist. Raipur (C.G.)

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3 - Managing Director, Chhattisgarh State Co-Operative Marketing Federation Maryadit, Atal Nagar, Nawa Raipur, Dist. Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited, Gariyaband, Dist. Gariyaband (C.G.)

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5 - Collector, (Food Department) Gariyaband, Dist. Gariyaband (C.G.)

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6 - District Marketing Officer Chhattisgarh State Co-Operative Marketing Federation Maryadit, Gariyaband, Dist. Gariyaband (C.G.)

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7 - Food Corporation Of India Through Its General Manager, Mowa, Raipur, Dist. Raipur (C.G.)

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--- Respondent(s)

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WPC No. 1370 of 2025

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1 - Shreyansh Parakh S/o Shri Lalit Parakh Aged About 30 Years Proprietor Of M/s Arihant Agri Foods, Gariyaband, R/o Ward No. 9, Sabji Mandi, Gariyaband, DistrictGariyaband (C.G.)

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--- Petitioner(s)

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Versus

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1 - Union Of India Through- Secretary, Ministry Of Consumer Affairs, Food And Public Distribution Department, Krishi Bhawan, New Delhi.

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2 - State Of Chhattisgarh Through- Secretary Department Of Food, Civil Supplies And Consumer Protection, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, Distt.- Raipur (C.G.)

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3 - Managing Director Chhattisgarh State Co-Operative Marketing Federation Maryadit Atal Nagar, Nawa Raipur, Distt.- Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited Gariyaband, Distt.Gariyaband (C.G.)

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5 - Collector (Food Department) Gariyaband Distt.- Gariyaband (C.G.)

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6 - District Marketing Officer Chhattigarh State Co-Operative Marketing Federation Maryadit Gariyaband, Distt.- Gariyaband (C.G.)

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7 - Food Corporation Of India Through Its General Manager, Mowa, Raipur, Distt.Raipur (C.G.)

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--- Respondent(s)

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WPC No. 1382 of 2025

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1 - Afroz Memon S/o Shri Ishaque Memon Aged About 44 Years Proprietor Of M/s Sunrisee Rice Industries Gariyaband R/o Ward No. 3 Santoshi Para Gariyaband District - Gariyaband (C.G.)

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--- Petitioner(s)

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Versus

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1 - Union Of India Through Secretary Ministry Of Consumer Affairs Food And Public Distribution Department Krishi Bhawan New Delhi

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2 - State Of Chhattisgarh Through Secretary Department Of Food Civil Supplies And Consumer Protection Mahanadi Bhawan Mantralaya Nawa Raipur Atal Nagar District - Raipur (C.G.)

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3 - Managing Director Chhattisgarh State Co- Operative Marketing Federation Maryadit Atal Nagar Nawa Raipur District - Raipur (C.G.)

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4 - Chhattisgarh State Civil Supplies Corporation Limited Gariyaband District - Gariyaband (C.G.)

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5 - Collector (Food Department) Gariyaband District - Gariyaband (C.G.)

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6 - District Marketing Officer Chhattisgarh State Co- Operative Marketing Federation Maryadit Gariyaband District - Gariyaband (C.G.)

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7 - Food Corporation Of India Through Its General Manager Mowa Raipur District - Raipur (C.G.)

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--- Respondent(s)

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(Cause-title is taken from Case Information System)

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For Petitioner :	Mr. B. P. Sharma, Advocate and Mr. Raza Ali, Advocate
For State :	Mr. Khulesh Sahu, Panel Lawyer
For Union of India :	Mr. Tushar Dhar Diwan, Advocate and Ms. Anmol Sharma, Advocate
For Respondent -Markfed :	Mr. Shreyansh Mehta, Advocate
For Respondent - FCI	Mr. R. S. Patel, Advocate

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SB- Hon'ble Shri Justice Amitendra Kishore Prasad

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Order on Board

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07/04/2025

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The contents and factual matrix involved in all the writ petitions would revel that the bone of contention in them is one and the same, as such, all these writ petitions are clubbed together, heard together and are being decided by this common order.

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The present batch of writ petitions assails the acts of respondents authorities restraining whether one State authority executing the agreement can deny performance of the agreement by blocking NIC issuance of gate-pass and delivery order request, and whether the aforesaid acts on the parts of respondent authorities is illegal, arbitrary and not sustainable in the eye of law, and if yes, the interference of this Court exercising extraordinary jurisdiction under Article 226 of the Constitution of India is essentially called for.

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Writ petition No. 1356 of 2025 has been taken as lead case in order to decide the issues involved in this matter. The petitioner in the said writ petitioner has prayed for following reliefs :-

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“A. A writ and/or an order in the nature of appropriate writ do issue calling for the records of the case pertaining the petitioners' case from the respondent concerned if this Hon'ble Court may

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deem fit in the facts and circumstances of the case.

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B. A writ and/or an order in the nature of appropriate writ do issue calling upon the respondent authorities to obtain rice in respect of the paddy supplied to the petitioner in accordance with the agreement by removing the block created in NIC and to facilitate issuance of gate pass and DO request for the Kharif year 2024-25 and in substance, quash the order/letter dated 18.2.2025 (Annexure P-1) issued by respondent No.3 being illegal, arbitrary and in violation of petitioner's fundamental and constitutional rights in the facts and circumstances of the case.

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C. Any other relief which this Hon’ble Court may deem fit in the facts and circumstances of the case.

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D. Cost of petition may also be awarded.”

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Facts of the case, in a nutshell, are that the petitioner has entered into an agreement dated 21.12.2024 (valid until April 20, 2025) with respondent No. 6, acting on behalf of respondent No. 3, for custom milling of paddy. This agreement was pursuant to a direction issued by the State Government through respondent No. 4, vide letter dated 24.10.2024, for the Kharif Season 2024-25. According to Clause 5 of the agreement, the petitioner was required to apply online for a Delivery Order (D.O.) to lift paddy from the Procurement Center of Markfed. However, the petitioner was denied access, and upon inquiry, it was revealed that the gate pass and D.O. request had been blocked by NIC. The petitioner obtained screenshots of the computer showing the blockage and approached the authorities to raise his grievance. When his grievance was not considered, the petitioner filed W.P.S. No. 915 of 2025, which led to the following order being passed by this Court:

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“4. I have heard counsels for all the parties and perused the communication dated 23.01.2025 by which District Marketing Officer, Gariyaband has requested the MD to remove the blockage of gate pass and D.O. request and by which the District Marketing Officer has requested to permit the eptiioner to do custom milling hence, the MD Markfed is directed to take a decision on the request made by the District Marketing Officer dated 23.01.2025 in accordance with law.”

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Based on the order dated 17.02.2025, a physical verification was conducted at the Paddy Procurement Centre, which revealed no shortage of paddy. However, it was informed that the petitioner is not permitted to uplift paddy for custom milling due to a policy decision regarding the previous season (2023-24). According to this policy, entities that had paddy shortages in the previous season are not allowed to lift paddy. A letter to this effect has been issued.

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Learned counsel for the petitioner submits that in the previous season, the petitioner faced delays in lifting paddy due to official instructions, resulting in a shortage. However, an extension was granted by the Central Government vide letter dated 23.01.2025, allowing the petitioner to lift the paddy. The counsel draws attention to a letter dated 24.01.2025, issued to the Government of Odisha, which clarifies that the Government of India has permitted delivery of Custom Milled Rice (CMR) for the Kharif Marketing Season (KMS) 2024-25 to millers who have addressed discrepancies identified during joint physical verification and have successfully delivered 100% of CMR. Given these directions, the petitioner argues that similar discrepancies can be addressed and rice millers can be allowed to undertake custom milling.

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Since the Government of India's directions are binding, the petitioner has filed a writ petition seeking extension of the milling period for paddy in Chhattisgarh for the year 2023-24, and this Court has passed the following orders.:-

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“8. Perusal of communication dated 23/01/2025 shows that the period for milling of paddy and delivery of CMR in C.G. for KMS 2023 – 24 (Kharif Crop) has been extended till 22.02.2025. Considering the same, it is directed that the custom milling rice for KMS 2023 – 24 (Kharif Crop) of the petitioners be accepted subject to joint physical verification of the balanced paddy by the State Government, Food Corporation of India and MARKFED in accordance with communication dated 23.01.2025 issued by the Government of India.”

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In compliance with the order dated 04.02.2024, passed by this Court in W.P.S. No. 6384 of 2024, a physical verification was conducted, which revealed no shortage of paddy. Notably, as per the agreement, the petitioner was only required to deliver a minimum of 67% custom milled rice after milling paddy. Since no shortage was found, the blockage imposed due to alleged shortages in the previous year is unfounded. The concerned Collector has also requested, vide letter dated 27.01.2025, that the petitioner be permitted to lift paddy and deposit rice as per the agreement for the year 2024-25, and that the blockage be removed. As the Collector's order dated 27.01.2025, is a decision of the Dispute Resolution Machinery under Clause 14.1 of the agreement, it is binding on the parties. However, despite this, the petitioner is still not being permitted to lift paddy and deposit the same. A letter dated 13.12.2024, issued by the State Government to all Collectors and

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Managing Directors of Markfed, allows millers who have deposited 70% of custom milled rice for the Kharif year 2023-24 to enter into agreements for the year 2024-25. Given this, the petitioner argues that they should be allowed to lift paddy and fulfill their obligations under the agreement. He placed reliance on the decision of Hon’ble Supreme Court in the matter of Ssangyong Engineering and Construction Company Limited vs. National Highway Authority of India and Others , reported in (2019) 15 SCC 131, while submitting that once an agreement has been executed way back on 19.12.2024 and circular was issued on 02.01.2025, as such, it cannot be on retrospective effect.

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Learned counsel for Union of India, at the outset, submits that the petitioner has misconstrued the communication dated 23.01.2025 issued by the Government of India, which is being relied upon to seek removal of the NIC blockade and permission to lift paddy. The said communication was issued only to extend the milling and delivery period for millers who had complied with the stipulated conditions, including joint physical verification and 100% delivery of Custom Milled Rice (CMR). It does not grant any general exemption to defaulters or to those who had shortages in the previous marketing season. The petitioner has failed to demonstrate compliance with these essential preconditions. The extension granted by the Union of India cannot be interpreted as a blanket directive overriding the eligibility criteria or the operational framework prescribed by the State Government and implementing agencies. It is further submitted that the Decentralized Procurement System (DCP), as applicable in the State of Chhattisgarh,

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requires close coordination between the Union and the State Governments. While the Union of India lays down broad policy directions, the execution and monitoring of compliance is primarily the domain of the State Government. The directions of the Union of India cannot be invoked in isolation to claim relief unless the petitioner satisfies the conditions prescribed therein. In the present case, the record of petitioner from the KMS 2023–24 indicates deficiencies which disqualify him from further participation unless specifically regularized by competent authority.

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Learned State counsel submits that the petitioner has been disqualified from lifting paddy for KMS 2024–25 as a result of a policy decision taken by the State Government, which is grounded in the need to ensure accountability in the custom milling process. This decision bars millers who were found to be in default or who had shortages during KMS 2023–24. The NIC blockade of the gate pass and D.O. request is a direct consequence of this policy and is applicable uniformly. The record of petitioner from the previous season reflects non-compliance with the agreed delivery of CMR, and as such, he falls within the category of entities rightly disallowed from further participation. The reliance placed by the petitioner on physical verification reports conducted pursuant to court orders is misplaced, as those reports do not undo the past non-compliance. The verification only shows that there is presently no physical shortage but does not nullify the policydriven consequences of the earlier breach. The argument as raised by learned counsel for petitioner that the letter of Collector dated 27.01.2025 constitutes a binding decision under Clause 14.1 of the agreement is also without merit. The recommendation of the Collector

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is not final and is subject to approval by the higher authorities, including MARKFED and the Food Department. Furthermore, Clause 14.1 cannot override a State-wide policy applicable to all millers equally. The petitioner has also failed to deliver the minimum required quantity of 67% CMR as per the agreement. The 70% threshold prescribed in the circular dated 13.12.2024 of State Government for eligibility in the 2024–25 season has not been met by the petitioner. It is submitted that permitting the petitioner to lift paddy despite previous defaults would defeat the purpose of the policy, compromise the integrity of the procurement system, and create an undesirable precedent. Compliance with performance-based eligibility criteria is essential to ensure proper delivery and accountability. In view of the above facts and legal position, the claims of petitioner are devoid of merit. The decision of State to block the petitioner from participating in KMS 2024–25 is well within its jurisdiction, in consonance with public interest and policy objectives.

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Learned counsel for the Markfed submits that the Markfed functions purely as a facilitator and intermediary in the execution of custom milling agreements. It operates strictly in accordance with the directions issued from time to time by the Central Government, the State Government, and the Food Corporation of India (FCI). Markfed has no independent authority to take policy decisions or deviate from binding directives. The denial of allotment of paddy to the petitioner for KMS 2024–25 is a direct result of binding communications and instructions issued by the Central Government and the FCI, in particular, letter dated 02.01.2025 from the Ministry of Consumer Affairs, Food and Public Distribution instructing that millers found to

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have paddy shortages or unaccounted stock in the previous KMS shall not be permitted to deliver CMR for KMS 2024–25. Subsequent letters dated 13.01.2025, 10.02.2025, 17.02.2025 and 02.04.2025 from FCI reiterated that Original Joint Physical Verification (JPV) findings are final, shortages once found must be deducted and rectified and no CMR shall be accepted from millers with deficiencies in earlier JPVs, regardless of excess or balance stock found later. Crucially, the petitioner has not challenged any of the above-referred binding directives or policy letters issued by the Central Government or FCI. Instead, the petitioner seeks relief against Markfed, which is merely a nodal implementing agency acting under express instructions. Such an approach amounts to circumventing the binding policy decisions of superior authorities, rendering the writ petition legally untenable. While the petitioner relies on the letter dated 27.01.2025 (Annexure P/10) issued by the Collector, it is submitted that no consequential action has been taken by the State Government on this recommendation. In the absence of express directions from the State or Central Government, Markfed cannot act unilaterally to allow paddy allotment in contravention of higher-level policy mandates. In response to the specific query regarding notice to the petitioner, it is submitted that the JPV was conducted in the presence of the petitioner and the resulting reports bear the signature of petitioner. Furthermore, notice dated 02.01.2025 was issued to the petitioner regarding monetary recovery for the identified shortages. Hence, the petitioner was duly notified and afforded an opportunity to respond. It is further contention of learned counsel for the respondent – Markfed that as per Clause 14.1 and Clause 15 of the Custom Milling Agreement, any disputes arising

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thereunder are to be, first, resolved through representation to the District Collector; and subsequently, if unresolved, adjudicated by the Chhattisgarh Madhyastham Adhikaran (Arbitration Tribunal) within 60 days. In light of this agreed mechanism, the present writ petition is not maintainable, as it circumvents the contractual remedy and seeks judicial intervention in a matter involving disputed facts, which are not amenable to adjudication under Article 226 of the Constitution. He places reliance on the decision of the Hon’ble Punjab & Haryana High Court in the matter of Goyal Rice Industries v. State of Punjab , reported in (2016) SCC OnLine P&H 9853 , where similarly situated millers were directed to invoke arbitration under the policy rather than seek writ relief for non-allotment of paddy. The plea of petitioner hinges on the assertion that no shortage was found in a subsequent JPV, which is not recognized by the FCI as per its communication dated 10.02.2025. Since the petition involves the interpretation of JPV results, compliance history, and factual discrepancies, such matters cannot be decided in writ jurisdiction. In light of the foregoing submissions, it is submitted that the present writ petition is not maintainable either in form or in substance; the petitioner has not challenged the binding policy communications that form the basis for denial of relief and the petitioner has an adequate and efficacious alternative remedy under the dispute resolution mechanism laid out in the Custom Milling Agreement. Accordingly, it is prayed that the writ petition be dismissed.

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Learned counsel for the respondent – FCI submits that the present writ petition, as filed by the petitioner, is not maintainable either in law or on facts and deserves to be dismissed in limine. The petitioner seeks relief

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primarily on the ground that no illegality or irregularity was found during the Joint Physical Verification (JPV), and therefore the subsequent denial of permission to lift paddy and perform obligations under the Custom Milling Agreement is unjustified. The said submission, however, is grossly misplaced, misconceived, and contrary to the record and governing policy. At the outset, it is submitted that there is no direct contractual privity between the petitioner and the respondent - Food Corporation of India (FCI). The agreement in question has been executed solely between the petitioner and respondent No. 3, namely the Chhattisgarh State Co-operative Marketing Federation Limited (MARKFED). As such, no relief can be claimed against FCI, which acts as a central coordinating and monitoring agency under the Decentralized Procurement Scheme and not as a contracting party in the said transaction. The petition suffers from a fundamental defect of non-challenge to the governing policy framework. If the petitioner is aggrieved by the JPV findings or the resultant policy action, he ought to have specifically challenged the relevant circulars, policy directives, and orders issued by the Ministry of Consumer Affairs, Food and Public Distribution, Government of India. In the absence of any such challenge, the present writ petition is premature and legally untenable. It is further submitted that the petitioner has erroneously conflated two distinct issues, namely, the contractual obligations under the milling agreement, and the JPV-based policy disqualification, whereas both stand on separate footings. Any grievance related to the milling agreement is governed by Clause 14 (Dispute Resolution by the Collector) and Clauses 15.1 and 15.2 (Arbitration) of the agreement dated 21.12.2024. Conversely, any challenge to the findings of JPV or

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the resulting disqualification can only be made by assailing the binding policy communications of the Union of India, which the petitioner has conspicuously failed to do. With respect to the factual position, it is submitted that the rice mill of petitioner was subjected to Joint Physical Verification conducted in the months of October, November, and December 2024 by a team comprising officials of FCI, District Marketing Office, and the Food Department. During the said JPV, a shortage of paddy was found in the Central Pool stock lying at the premises of petitioner. This shortage was duly recorded and documented by the verification team. It is clarified that Central Pool stock is delivered to both the State (NAN) and FCI, and any shortage identified in such stock during JPV cannot be replenished from any other source, as per standing instructions. The Government of India, vide its communication dated 14.01.2025, addressed to the Secretary, Government of Chhattisgarh, clearly directed the State to furnish millwise action taken reports against defaulting mills, where shortages or unaccountable stock were found, or mills were closed during JPV. It further advised exemplary action against such millers. In compliance, the State Government informed the Union, vide letter dated 17.01.2025, that a total of 142 mills, including that of the petitioner, where shortages were found during JPV, had been banned from participating in KMS 2024–25. Further, vide Policy Circular No. 3(20)/2024-Py.I dated 02.01.2025, the Ministry of Consumer Affairs, Food and Public Distribution has unequivocally mandated only those mills that have successfully delivered 100% CMR for KMS 2023–24 shall be allowed to deliver CMR for KMS 2024–25, mills where shortages or unaccountable stock were found during JPV shall not be

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allowed to deliver CMR under any circumstance and FCI shall ensure that delivery of CMR from two seasons does not occur simultaneously. In light of the above, it is respectfully submitted that the disqualification of the petitioner from participating in KMS 2024–25 is not an arbitrary action by the respondent agencies, but a consequence of binding and uniform policy directions issued by the Government of India, which have been duly adopted and implemented by the State authorities. The FCI, acting in its monitoring capacity, has no discretion to deviate from these mandatory instructions. It is thus submitted that the present writ petition is devoid of any legal merit, suffers from non-maintainability due to non-challenge of binding policy instruments, and seeks to circumvent the consequences of a duly conducted and accepted JPV which found substantial shortages in the stock of petitioner. Accordingly, the petitioner is not entitled to any relief as claimed in the writ petition.

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I have heard the learned counsel for the parties at length and carefully perused the documents placed on record with utmost circumspection.

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Upon consideration of the facts, submissions, and legal framework involved in the present batch of writ petitions, the core issue revolves around whether the action of the respondent authorities, particularly the blocking of the NIC system for issuance of Gate Pass and Delivery Orders, is arbitrary, illegal, and violative of rights of petitioners under the custom milling agreement for Kharif Marketing Season (KMS) 2024–25.

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The petitioners claim that despite no shortage being found during subsequent Joint Physical Verifications (JPVs), they have been

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unjustly denied permission to lift paddy and fulfill their contractual obligations. From the record, it is clear that the original JPV findings during KMS 2023–24 identified shortages in the stock held by the petitioners. Subsequent communications from the Government of India (letter dated 02.01.2025) and the Food Corporation of India (letters dated 13.01.2025, 10.02.2025, 17.02.2025, and 02.04.2025) uniformly directed that rice millers with such deficiencies shall not be permitted to participate in KMS 2024–25, and explicitly rejected the validity of any re-verification exercises. These policy directions are binding on the implementing agency, Markfed, which has no discretion to act contrary to them. Moreover, the petitioners have not challenged the validity of these binding central communications and have instead limited their challenge to actions taken by Markfed and State authorities.

¶153

While the petitioners rely on a recommendation of the Collector dated 27.01.2025 and on fresh JPV reports, these do not override or nullify the binding policy decisions of the Central Government or the FCI. Furthermore, Clause 14.1 and 15 of the Custom Milling Agreement provide a structured dispute resolution mechanism involving the District Collector and ultimately the Chhattisgarh Madhyastham Adhikaran. This Court notes that the issues raised, particularly the validity of JPV findings and compliance history, are factual in nature and not amenable to resolution under writ jurisdiction.

¶154

Hon’ble Supreme Court in the matter of Goyal Rice Industries (Supra) is apt in underscoring the principle that disputes under such agreements are better resolved through arbitration and has held as under :

¶155

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“9. It is argued by learned counsel for the respondents that the petitioners are claiming paddy out of release order from outside his district. It is further argued that the petitioner has a right of Arbitration as per the Policy, which may be invoked in order to decide the interpretation of the provisions of the Policy of KMS 2015-16 on the basis of which the petitioners may set up their claim for the alleged losses, if any.

¶157

I have heard learned counsel for the parties in detail and also perused the available record. Once, it is not disputed by the respondents that the petitioner has right of seeking arbitration, it would be in the interest of parties to avail the remedy, which is so provided in clause 19 of Custom Milling Policy of 2015-2016, which read as under:

¶158

“All the disputes and differences arising out of or in any manner touching or concerning the agreement whatsoever shall be referred to the sole arbitration of the Managing Director of the concerned agency or any person appointed by him in this behalf. There will be no objection to any such appointment that the person appointed is or was an employee of the Food and Supplies Department, Punjab or the concerned agency or that he had to deal with the matter to which the contract relates and that in the course of his duties such an employee of the Food and Supplies Department, Punjab or the concerned agency had expressed views on all or any of

¶159

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the matter in dispute or difference. The award of such arbitration shall be final and binding on the parties to this contract. It is a term of this contract that in the event of the Arbitrator being transferred or vacating his office or being unable to act for any reason, the Managing Director concerned at the time of such transfer, vacation of office, death or inability shall appoint another person to act as Arbitrator. Such a person shall be entitled to proceed with reference from and the stage where it was left by his predecessor. Provided that any demand for arbitration in respect of any claim(s)/dispute between both theh parties, under the contract shall be in writing and made within one year of the date of completion or expiry of the period of contract. If the demand is not made within the period, the claim(s) of the Miller shall be deemed to have been waived off and the agency shall be released of all liabilities under the contract in respect of these claims. The cost for and in connection with arbitration shall be the discretion of the arbitrator who may make suitable orders in his award. Subject as aforesaid, the Arbitration and Conciliation Act, 1996 or any statutory reenactment on modifications thereof shall apply to the arbitration provided under this clause. However, the cases of fraud, theft or misappropriation etc. on the part of the miller are

¶161

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not covered under this clause and in such cases legal proceedings as deemed fit shall be initiated by the agency against the miller as well as against the sureties.”

¶163

In view of the aforesaid, the parties are relegated to the remedy of arbitration and hence the present petitions are hereby disposed of accordingly.”

¶164

From the above decision in similar circumstances it has beeen held that when contractual remedy by way of arbitration is available and the dispute pertains to interpretation of policy or contract terms, parties must avail such remedy rather than invoking the writ jurisdiction.

¶165

In view of the above, this Court does not find any good ground to grant the reliefs as prayed for in these writ petitions. The action of the respondent authorities, based on valid policy decisions, does not call for interference in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India.

¶166

Accordingly, all the writ petitions are dismissed.

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Sd/-

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( Amitendra Kishore Prasad )

¶169

Shayna

¶170

JUDGE

Arif Memon v. Union of India

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Arif Memon v. Union of India

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