Prateek Agro Industries Vs Union of India

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1

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2025:CGHC:39135

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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(Order reserved on 02/07 /2025) (Order Delivered on 06/08/2025)

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WPC No. 3322 of 2025

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Prateek Agro Industries Through Proprietor- Shivendra Singh, S/o- Late Shri N.K. Rai, Aged- 66 Years, R/o- Village- Raka, Post- Murmunda, Dongargarh, District- Rajnandgaon (C.G.)

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... Petitioner

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versus

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1 - Union of India Through- Secretary, Department of Food, Civil Supplies And Consumer Protection, 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, New Raipur, Atal Nagar District- Raipur (C.G.)

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3 - Managing Director- Chhattisgarh State Market Federation Maryadit Atal Nagar, Naya Raipur, Distt. Raipur (C.G.)

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4 - C.G. State Civil Supplies Corporation Limited, Rajnandgaon DistrictRajnandgaon (C.G.)

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5 - Collector (Food Department), Rajnandgaon District- Rajnandgaon (C.G.) 6 - District Marketing Officer Department of Food, Civil Supplies And Consumer Protection, Rajnandgaon District- Rajnandgaon (C.G.)

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7 - Food Corporation of India (FCI) Regional Office- Mova, Vidhan Sabha Marg, Raipur, District- Raipur (C.G.)

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... Respondents

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For Petitioner :	Ms. Reena Singh, Advocate
For Union of India :	Mr. Ramakant Mishra, Dy. Solicitor General with Ms. Sweta Rai, Advocate
For State/Respondents No.2 & 5 :	Mr. Satish Gupta, GA
For Respondents No.3 & 6 :	Mr. Shreyansh Mehta, Advocate
For Respondent No.7 :	Mr. R.S. Patel, Advocate

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Digitally signed byASHUTOSH ASHUTOSH MISHRA MISHRA Date: 2025.08.07 11:06:37 +0530

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2

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Hon'ble Shri Justice Arvind Kumar Verma

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CAV Order

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Heard.

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The petitioner has filed the instant writ petition challenging the inaction on the part of concerned respondent, whereby the concerned respondent is not accepting the balance of Custom Milled Rice (CMR) 3155.11 Quintals of the petitioner, even after the notification dated 29.05.2025 issued by the respondent no.3 whereby the respondents have been directed to accept the CMR of Kharif year 2023-24 from the rice miller till 30.06.2025.

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By way of the instant petition, the petitioner is praying for the following relies:-

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I) That, this Hon’ble Court may kindly be pleased to direct the concerned respondent to open the on-line portal/activate Wings App and Miller Id of the petitioner and accept the remaining balance of CMR of 3155.11 Quintals of Kharif year 2023-24 in the light of notification dated 29.05.2025 issued by respondent no.3 and further protect the petitioner from confiscation of the bank guarantee /FDR and Post Dated Cheques of the petitioner deposited as security with the bank for this Kharif year 2023-24.

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II) This Hon’ble Court may kindly be pleased to grant any other relief(s)/ writ(s), order(s) in favor of the petitioner, which the Hon’ble Court deemed fit & just in the facts & circumstances of the case.

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The brief facts of the case are that the petitioner for the purpose of

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Custom Milling Policy in the Kharif Marketing Year 2023-24, entered into a contract with the government and contract letter has been executed between District Marketing Officer, District Rajnandgaon i.e.

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respondent no. 6 on behalf of Chhattisgarh State Co-Operation Association Limited as First party and the petitioner i.e. Second Party Proprietor -Pratik Agro Industries, functioning at Khasra No.651/3, Badhiyatola, Tahsil Dongargarh, District Rajnandgaon, CG with Mill registration no. MA429704, under Chhattisgarh Custom Milling Instructions of the Government, C.G. Government, Department of Food, Civil Supplies and Consumer Protection, Ministry of Raipur Nava Raipur, under the instructions issued regarding custom milling of paddy procured in the year 2023-24.

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As per the agreement, executed in accordance with the Chhattisgarh Government’s Custom Milling Instructions, the petitioner has uplifted Total 29490 Quintals of FCI paddy and 22260 Quintals of Naan Paddy and as per contract agreement clause between the parties the petitioner has to deposit 67% of custom milled rice i.e. of total 19955.883 Quintals of FCI and 15063.342 Quintals of CMR of Naan and with regard to which PDC cheques and Bank guarantee has already been taken from the petitioner.

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The petitioner has already started depositing/submitting the custom milling rice day by day and till date he has completely deposited CMR of Naan and for remaining balance 3155.11 Quintals, the petitioner was and is ready and willing to deposit/submit the same within the extended time.

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The grievance of the petitioner is that due to closure of On-line portal, the petitioner is unable to deposit the CMR and thus this manner of denial in accepting the balance of CMR from the petitioner since

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December, 2024 to till date is against the principles of natural justice.

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Learned counsel for the petitioner would submit that due to arbitrary and wrongful approach of the respondents, the petitioner has been debarred from depositing the balance of 3155.11 Quintals of Custom Milled Rice of the year 2023-24 till date even after his sincere efforts and on the contrary the concerned respondents are in process of recovery to the said sum of amount of the CMR 2023-24 from the petitioner by forfeiting the Bank Guarantee/FDR/PDC cheques deposited by him as security in order to harass the petitioner mentally and financially. She would next contend that the petitioner has made several representations to unlock the online portal/miller ID and to accept the remaining balance of CMR of 3155.11 Quintals.

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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. They would further submit that in case of any dispute the petitioner may take recourse to the arbitration clause as provided in the agreement. He further contended that as per the policy the respondents are not bound to accept the balance quantity of the CMR of Kharif Year 2023-24 and there is a shortage in the quantity of the CMR.

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Learned counsel for Respondents No.1, 2, 5 & 7 contended that in the agreement there is a specific clause in agreement to resolve the dispute

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through arbitration, therefore, the instant writ petition is not maintainable.

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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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11.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 ¼Mhvks-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 NwV iznku djus dk vf/kdkj izca/k lapkyd ekdZQsM dks gskxkA

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12.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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13.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

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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 petitioner claims that she is ready and willing for depositing the remaining balance Custom milled rice from his end but the concerned respondent is not accepting the balance of CMR of 3155.11 Quintals of Kharif Year 2023-24 despite the fact that the last date for depositing the CMR of 2023-24 has been extended.

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Government of India has issued a communication dated 23/01/2025 which is reproduced hereinbelow:-

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No.3(7)/2023-Py.I-Part(1)(386071)

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Government of India

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Ministry of Consumer Affairs, Food and Public Distribution

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Department of Food and Public Distribution

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Krishi Bhawan, New Delhi.

Dated 23-01-2025

To,

The Secretary

Department of Food, Civil Supplies & Consumer Protection,

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Government of Chhattisgarh,

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Mahanadi Bhawan, Mantralaya,

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Naya Raipur-492002

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Subject: Extension of period for milling of paddy and delivery of CMR in Chhattisgarh for KMS 2023-24 (Kharif)-reg.

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Ref:

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Govt. of Chhattisgarh's letter No. 4-9/Food/2023/29-1/P2(P) dated 23.12.2024

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Govt. of Chhattisgarh's letter No. 4-9/Food/2023/29-1 dated 07.01.2025

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Govt. of Chhattisgarh's letter No. एफ 4-9/2023/29-1/पार्ट�-1 dated 17.01.2025

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Govt. of Chhattisgarh's letter No. एफ 4-9/2023/29-1/पार्ट�-1 dated 22.01.2025

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Sir,

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I am directed to refer to Government of Chhattisgarh's letters under reference, on the above subject and to convey the approval of Government of India for extension of period for milling and delivery of Custom Milled Rice (CMR) into the Gentral Pool for KMS 2023-24 (Kharif crop) up to 22.02.2025 for Chhattisgarh, subject to Joint Physical Verification of the balance paddy by State Govt. and FCI.

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The delivery of CMR will be as per the cost sheet and FAQ specifications prescribed for KMS 2023-24. Government of Chhattisgarh must ensure that the delivery of CMR of Kharif Crop

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during KMS 2023-24 is completed by 22.02.2025, as no further extension will be granted.

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Further, State Government and FCI are requested to take necessary steps to check recycling of rice, if any. A system of monitoring may be instituted at field level by FCI to monitor the delivery of balance CMR, mill wise as per planned schedule to be obtained from State Government Agencies in writing. Age test may also be conducted at the time of rice delivery as per the protocol to be devised by FCI.

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This issues with the approval of Secretary, F&PD.

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Yours faithfully,

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Signed by Gokul Nagarkoti Date: 23-01-2025 18:57:29 (Gokul Nagarkoti) Deputy Secretary to Govt. of India

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This Court in WPC No.697 of 2025 disposed of the said writ petition and held thus in para 6:-

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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 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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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

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

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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 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. It is ordered accordingly.

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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 this writ petition and the same does not call for interference in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India.

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Accordingly, the present writ petition is disposed of with the aforesaid observation.

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SD/-

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( Arvind Kumar Verma)

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Judge

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Ashu

Prateek Agro Industries v. Union of India

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Prateek Agro Industries v. Union of India

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