M/S Dilip Rice Udhyog Main Road Lingiyadih, Vs Union of India

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2025:CGHC:27618

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AFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 2626 of 2025

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1 - M/s Dilip Rice Udhyog Main Road Lingiyadih, Bilaspur, Chhattisgarh. Through Its Partner Trilokchand Sidara, Aged About 55 Years, S/o Mr. Atalram Sidara, R/o Ward No. 26/25, Behind Manohar Talkies, District Bilaspur, Chhattisgarh.

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2 - Trilokchand Sidara S/o Mr. Atalram Sidara Aged About 55 Years R/o Ward No. 26/25, Behind Manohar Talkies, District Bilaspur, Chhattisgarh.

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... Petitioners

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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, Distt. Raipur Chhattisgarh.

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

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5 - Collector (Food Department) Bilaspur, District - Bilaspur (C.G.)

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

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Digitally signed byASHUTOSH ASHUTOSH MISHRA MISHRA Date: 2025.06.28 13:25:13 +0530

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2

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

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... Respondents

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For Petitioner :	Mr. Raza Ali, Advocate
For Respondent No.1/UOI :	Mr. Ramakant Dubey, Advocate
For Respondent /State :	Ms. Akanksha Verma Dabhadker, PL
For Respondents No.3 & 6 :	Mr. Shreyansh Mehta, Advocate
For Respondent No.7	Mr. R.S. Patel, Advocate

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Hon’ble Shri Justice Arvind Kumar Verma, Judge

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Order on Board

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25/06/2025

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With the consent of the parties, the present petition is heard finally.

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The present writ petition has been filed by the petitioner praying for the following relief(s):

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“A. A writ and/or an order in the nature of appropriate

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writ do issue calling for the records of the case pertaining the petitioners’ case from the respondent concerned if this Hon’ble Court may 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

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writ do issue directing the respondent authorities to facilitate access to the petitioner to online portal of respondents i.e. cgpaddyonline.co.in, so that the petitioner may be able to comply with the obligation undertaken under the agreement entered for the Kharif year 2024-25 and further pleased to permit the petitioner

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to lift the paddy and deposit the rice as per the agreement for the year 2024-25 in the facts and circumstances of the case.

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C. Any other relief which this Hon’ble Court may deem

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fit in the facts & circumstances of case.

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D. Cost of the petition may also be awarded.”

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Brief facts of the case are that the petitioner seeks to challenge the action of the respondent authorities in not permitting the petitioner to lift the paddy in accordance with the agreement entered by and between the parties for the KMS 2024-25 and also not permitting deposit of milled rice in respect of paddy obtained by not permitting access to online portal i.e. cgpaddyonline.co.in meant for the said purpose as after filling the requisite information i.e. login ID and password, in case of petitioner the website reflects “vkidks ‘kklu }kjk Mh-vks vkosnu ij /kku mBko ,o a pkoy tek gsrq izfrc a f/kr fd;k x;k gS vr% Mh-vks vkosnu Lohdkj ugh a fd;k tk ldrk** , which amounts to denial of petitioner’s right under the agreement entered between the parties and further, for the non-compliance of the obligation undertaken under the agreement, penalties are provided and thus the petitioner becomes sufferers of double jeopardy as the petitioner is desirous of the complying with the obligation undertaken under the agreement but for the acts of omission and commission of the respondent authorities, the petitioner is finding it difficult to comply with the undertaken obligation and since the acts of omission and commission on the part of respondents is in violation of reciprocal obligation undertaken by respondents and amounts to unreasonableness, arbitrariness which is also

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in violation of petitioner’s fundamental and constitutional rights, and the matter incidental thereto.

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Learned counsel for the petitioner submits that the petitioner has entered into two agreements with respondents concerned for custom milling of paddy regarding which a direction has been issued by the State Government acting in the premises through its department i.e. respondent no. 4 for the Kharif Season 2024-25 in respect of procured paddy. In case of present petitioner rice mill the agreement is with respect to Arwa Rice as well as Usna Rice. Under the agreements, both the parties have undertaken respective obligations against each other and bound to comply with the same. For lifting the paddy from the Procurement Center, the petitioner has to apply by making application through electronic means i.e. computer, for issuance of delivery order and the same will be issued to the petitioners in the manner as mentioned in Clause 5.1. He further contended that for the purpose of complying with the obligation undertaken under the agreement of obtaining paddy and thereafter to supply milled rice, the petitioner is required to access the online portal meant for the purpose i.e. cgpaddyonline.co.in, and only after entering into online portal after completion of formalities in this regard i.e. of filling of login ID and password provided by respondent authorities, the petitioner may be able to access to online portal and thereafter only the petitioner could get requisite documents i.e. delivery order and gate pass, but on filling the login ID and password, the petitioner is getting non-access report. Thus, it is clear that the due to above restriction the petitioner is finding it difficult to comply with the

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obligation undertaken under the said agreement. In this regard, the petitioner has made various representations to the respondent authorities. For the present the petitioner is only claiming the relief from this Hon’ble Court that the petitioner be provided access to online portal which has been denied by respondent’s impugned action.

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Learned counsel for Union of India, at the outset, submits that the petitioner has misconstrued the communication 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 of 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.

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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 of 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.

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Learned counsel for the Markfed submits that the Markfed functions

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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.

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I have heard learned counsel for the respective parties at length and perused the record with utmost circumspection.

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The question involved in the present petition is that whether one State authority executing the agreement can deny performance of the agreement by blocking in NIC issuance of gate pass and DO request, and in such cases when the acts of omission and commission on the part of respondent authorities is illegal, arbitrary and not sustainable in law?

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10.Clause 5.1 of the agreement states as under:

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5-1- vikktZu [email protected] dsUnz ls /kku mBkus gsrq i{k dzekad 02 }kjk dEI;wVj ds ek/;e ls fMyhojh vkMZj ¼Mh-vks-½ gsrq vkosnu djsxkA ftl i{k dzekad 01 dh vksj ls lacaf/kr jktLo ftys ds ftyk foi.ku vf/kdjh ds }kjk vuqeksfnr dj tkjh fd;k tkosxk] tks vgLrkarj.kh gksxkA foHkkxh; lkQVos;j vuqlkj miktZu [email protected] dsUnz }kjk Mh-vks- dk lR;kiu fd, tkus ds mijkar tkjh fd;s x;s fMyhojh ds vuqlkj gh i{k dzekad 02 dks lacaf/kr miktZu [email protected] dsUnz ls fMyhojh vkMZj tkjh gksus dh frfFk ls 10 fnol ds vUbnj Mh-vks- esa mYysf[kr lEiw.kZ /kku dk ifjnku izkIr djus ds fy;s ck?; gSA ;fn i{k dzekad 02 }kjk 10 fnol ds Hkhrj /kku dk mBko ugha rks fu;ekuqlkj n.M vf/kjksifr fd;k tkosxkA fo”ks”k ifjfLFkfr;ksa es xq.k nks”k ds vk/kkj ij ijh{k.k mijkar i{k dzekad 02 dks vFkZn.M esa -----------

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11.Clause 14.1 of the agreement states as under:

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14-1 bl lafonk djh fdlh Hkh dafMdk ls lacaf?kr fookn mRuUu gksus dh fLFkfr esa mHk;i{kksa }kjk fookn ds lkSgknZiw.kZ lek/kku ds fy, ftyk dysDVj dks vH;kosnu izLrqr fd;k tk ldsxkA ftyk dysDVj }kjk mDr vH;kosnu esa fd;k x;k fu.kZ; mHk;i{kksa dks ekU; gksxkA

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12.Clause 15.1 and 15.2 of the agreement states as under:

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15-1 vuqc/k dh dafMdk 14-1 ds varxZr lacaf/kr ftyk dysDVj }kjk fd;s x;s fu.kZ; ds fo:) mHk;i{kksa }kjk fookn ds fu.kZ; gsrq 60 fnol ds Hkhrj vkchVs’ku gsrq N-x- e/;L;re vf/kdj.k jk;iqj ¼N-x-½ ds le{k vkosnu izLrqr fd;k tk ldsxk] ftldk fu.kZ; vafre gksxk tks vHk;i{kksa dks ekU; gksxkA 15-2 vkchZVªs’ku esa fd;s x;s fu.kZ; ls ;fn mHk; i{k esa ls dksbZ vlarq”V gksrk gS] rks og vU; fof/kd izko/kkuksa dk mi;ksx dj ldsxkA

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The petitioners claim that despite no shortage being found during subsequent Joint Physical Verifications (JPVs), they have been unjustly denied permission to lift paddy and fulfill their contractual obligations. From the record, it is clear that the original JPV findings during KMS 2024-25 identified shortages in the stock held by the petitioners. Subsequent communications from the Government of India (letter dated 02.01.2025, 23.01.2025, 24.01.2025) 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.

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While the petitioners rely on a recommendation of the Collector 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 C.G. Madhyastham Adhikaran. This Court notes that the

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issues raised, particularly the validity of JPV findings and compliance history, are factual in nature and not amenable to resolution under writ jurisdiction.

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Hon’ble Supreme Court in the matter of Goyal Rice Industries Vs. State of Punjab (2016) SCC Online P&H 9853 is apt in underscoring the principle that disputes under such agreements are better resolved through arbitration and has held as under:

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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.

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10.1 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 2015-16, which read as under:

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“All the disputes and differences arising out of or in any manner touching or concerning the agreement whatsoever shall be reered to the sole arbitration of the Managing Director of the concerned agency or any person appointed y 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

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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 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 state where it was left by his predecessor. Provided that any demand for arbitration in respect of any claim(s)/dispute between both the 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 re-enactment on modifications thereof shall apply to the arbitration provided under this clause. However,

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the cases of fraud, theft or misappropriation etc. on the part of the miller are 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.”

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

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From the above decision in similar circumstances it has been held that

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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.

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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.

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