Partly allowed

M/S Chchaya Rice Mills v. the State of Bihar and Ors.

Patna HC20 Jun 2013CWJC/3744/2012

Case brief

AI extract

What is this about?

This common order disposed of numerous writ petitions regarding rice supplied to the Food Corporation of India via State Warehousing Corporations. The court quashed an impugned confiscation order as the District Magistrate lacked jurisdiction under Section 6-A of the Essential Commodities Act. Petitioners were directed to file claims for the return of rice within a specific timeframe.

What did the court decide?

The confiscation order dated 20.6.2012 was quashed. Petitioners directed to file claims for return of rice within four weeks for disposal by the Managing Director of the Warehousing Corporation.

M/S Chchaya Rice Mills Vs the State of… — Constitutional and Fundamental Rights | Patna HC (2013)

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.5929 of 2012

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======================================================

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Asha Chawal Udyog, Harnatta, Bettiah through its Proprietor Surendra Prasad Son of Sri Gautam Mahto Resident of Chhatraul Harnatta, P.S.Loukaria, Distt.-West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through Principal Secretary, Department of Food and Civil Supplies

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The Chairman cum Managing Director, Food Corporation of India, New Delhi

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The General Manager, Food Corporation of India, Exhibition Road, Patna

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The Managing Director, State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of India, District Officer, Motihari 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.5811 of 2012

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======================================================

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M/s. Chhaya Rice Mill , Muzra, P.S. Ramnagar, District - West Champaran through its Proprietor Ramesh Kumar Son of Sri Gulab Sah Resident of Semra, P.S.- Semra, District- West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through the Principal Secretary, Department of Food and Civil Supplies, Government of Bihar, Patna

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The Chairman-cum-Managing Director, Food Corporation of India, New Delhi

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The General Manager, Food Corporation of India, Exhibition Road, Patna 4. The Managing Director, State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of India, District Office, Bettiah 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.22673 of 2011

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====================================================== Shiv Shakti Rice Mill Chankuhwa, P.S.- Piprasi, Bagha, West Champaran, through its Proprietor Dhananjay Pratap Sahi S/o Shri Devendra Bahadur Sahi R/o Rajpur, P.S.- Shikarpur, District- West Champaran

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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.... .... Petitioner/s

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Versus

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The State of Bihar through the Principal Secretary Department of Food and Civil Supplies, Government of Bihar, Patna

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The Chairman cum Managing Director Food Corporation of India, New Delhi

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The General Manager, Food Corporation of India, Exhibition Road, Patna 4. The Managing Director State Warehouse Corporation, Managing Director, State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of India, District Office - Motihari 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.3959 of 2012

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======================================================

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M/s. Sanjay Rice Mill, Domwalia, Bagaha 2, through its Proprietor Sanjay Kumar S/o Sri Awadh Bihari Prasad R/o Domwalia, Bagaha 2, P.S.Bagaha, District- West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through the Principal Secretary Department of Food and Civil Supplies, Government of Bihar, Patna

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The Chairman cum Managing Director Food Corporation of India, New Delhi

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The General Manager Food Corporation of India, Exhibition Road, Patna 4. The Managing Director State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager Food Corporation of India, District Office, Bettiah

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The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.5073 of 2012

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======================================================

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M/s. Priti Rice Mill, Ghusukpur, Harnatand, P.S.-Laukariya, Distt.-West Champaran through its Proprietor Suryadeo Choudhary, Son of Raj Kumar Choudhary, Resident of Semra, Ghusukpur, Harnatta, P.S.-Laukariya, Distt.-West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through Principal Secretary, Department of Food and Civil Cupplies

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The Chairman cum Managing Firector, Food Corporation of India, New Delhi

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The General Manager, Food Corporation of India, Exhibiion Road, Patna

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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The Managing Director, State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of India, District Officer, Motihari 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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====================================================== with

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Civil Writ Jurisdiction Case No.4903 of 2012

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======================================================

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M/s. Krishna Rice Mill, Satwariya, P.S.- Sikarpur, Distt.- Narkatiyaganj, Distt.- West Champaran, through its Proprietor Dinbandhu Prasad S/o Late Ram Khelawan Prasad R/o Bazar Samiti, Bettiah, P.S.- Bettiah, Distt.- West Champaran

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.... .... Petitioner/s

¶72

Versus

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The State of Bihar through Principal Secretary Department of Food and Civil Supplies

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The Chairman cum Managing Director Food Corporation of India, New Delhi

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The General Manager Food Corporation of India, Exhibition Road, Patna 4. The Managing Director State Warehouse Corporation, Mauryalok, Patna 5. The Area Manager, Food Corporation of India, District Officer, Motihari 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.22587 of 2011

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====================================================== M/s. Ridhi Sidhi, Chota Ramna, Bettiah through its Proprietor Shailesh Kumar, S/o Shri Vinod Prasad Gupta, R/o Nanjin Chowk, Ganj No. 2. P.S. - Town (Bettiah), District - West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through Principal Secretary, Department of Food and Civil Supplies

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The Chairman cum Managing Director, Food Corporation of India, New Delhi

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The General Manager, Food Corporation of Indian, Exhibition Road, Patna

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The Managing Director, State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of Indian, District Office, Motihari

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The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.3744 of 2012

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======================================================

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M/s. Chchaya Rice Mills, Satwariya, Muzra, P.S.- Ram Nagar, Distt.- West Champaran through its Proprietor Ramesh Kumar S/o Late Gulab Sah R/o Village- Semra, P.S.- Semra, Distt.- West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through Principal Secretary Department of Food and Civil Supplies

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The Chairman cum Managing Director Food Corporation of India, New Delhi

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The General Manager Food Corporation of India, Exhibition Road, Patna 4. The Managing Director State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager Food Corporation of India, District Officer, Motihari 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with Civil Writ Jurisdiction Case No.3858 of 2012

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======================================================

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M/s. Priti Rice Mill, Semra Ghusukpur, Harnatad, P.S.- Laukariya, DistrictWest Champaran through its Proprietor Suryadeo Chaudhary Son of Sri Rajkumar Chaudhary Resident of Semra Ghusukpur, Harnatad, P.S.Laukariya, District- West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through the Principal Secretary, Department of Food and Civil Supplies, Government of Bihar, Patna

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The Chairman-cum-Managing Director, Food Corporation of India, New Delhi

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The General Manager, Food Corporation of India, Exhibition Road, Patna 4. The Managing Director, State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of India, District Office, Bettiah 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.3973 of 2012

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====================================================== M/s. Asha Chawal Udyog, Harnatta Bettiah through its Proprietor Surendra Prasad S/o Sri Gautam Mahto R/o Chhatraul Harnatta, P.S.- Laukariya,

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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District- West Champaran

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.... .... Petitioner/s

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Versus

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The State of Bihar through the Principal Secretary Department of Food and Civil Supplies, Government of Bihar, Patna

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The Chairman-cum-Managing Director Food Corporation of India, New Delhi

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The General Manager Food Corporation of India, Exhibition Road, Patna 4. The Managing Director State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager Food Corporation of India, District Office, Bettiah 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.4003 of 2012

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====================================================== M/s. Krishna Rice Mill, Satwariya, P.S.- Sikarpur Narkatiyaganj, District - West Champaran through its Proprietor Dinbandhu Prasad S/o Late Ramkhelawan Prasad R/o Bazar Samiti, P.S.- Bettiah, District- West Champaran

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.... .... Petitioner/s

¶134

Versus

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The State of Bihar through the Principal Secretary Department of Food and Civil Supplies, Government of Bihar, Patna

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The Chairman-cum-Managing Director Food Corporation of India, New Delhi

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The General Manager Food Corporation of India, Exhibition Road, Patna 4. The Managing Director State Warehouse Corporation, Maurya Lok, Patna

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The Area Manager, Food Corporation of India, District Office, Bettiah 6. The Superintendent, State Warehouse Corporation, Bettiah, West Champaran

¶139

.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.4445 of 2013

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====================================================== M/s. Ridhi Siddhi Chota Ramna, Bettiah through its Proprietor Shailesh Kumar S/o Shri Vinod Prasad Gupta R/o Nanjin Chowk, Ganj No. 2, P.S Town (Bettiah), District- West Champaran.

¶144

.... .... Petitioner/s

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Versus

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The State of Bihar through Collector, West Champaran at Bettiah.

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The General Manager, Food Corporation of India, “Arunachal’, Exhibition Road, Patna

¶148

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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3. The Managing Director, Patna	State Warehouse Corporation, Maurya Lok,
	.... .... Respondent/s
===================== Appearance :	=================================
(In all the cases)
For the Petitioner/s :	M/S N.K.Agrawal, Sr.Advocate with D.N.Tiwari, Soket Tiwary & Sanjeev Kumar Dubey, Advocates
For the B.S.W.C. : (In all the cases)	M/S K.N.Choubey, Sr.Advocate with Nikesh Kumar, Advocate
For the F.C.I. :	Mr. Prabhakar Tekriwal, Advocate
(In all the cases)
For the State :	Mr. Amrendra Kumar, AC to AAG 3
(In CWJC No.4445 of 2013)
For the State :	Mr. Dr.Chandra Shekhar Azad, AC to G.A.9
(In CWJC No.5811 of 2012)
For the State :	Smt. Nilu Agrawal, G.A.6 with Mr. Avinash Kumar, AC to G.A.6
(In CWJC No.3744 of 2012
& CWJC No.4003 of 2012)
For the State :	Mr. Sandip Singh, AC to G.P.9
(In CWJC No.3973 of 2012) ====================	=================================
CORAM: HONOURABLE M ORAL ORDER	R. JUSTICE RAMESH KUMAR DATTA

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12 20-06-2013 Heard learned counsel for the petitioners and learned counsels for the Food Corporation of India, Bihar State Warehousing Corporation and the State.

¶152

All the writ applications pertain to supply of rice by the petitioners on the direction of the Food Corporation of India to the Bihar State Warehousing Corporation and raise common issues and accordingly they have been heard together and are being disposed of by a common order at the stage of admission itself with the consent of the parties.

¶153

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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CWJC Nos. 5811 of 2012, 22673 of 2011, 3959 of 2012, 3858 of 2012, 3973 of 2012 and 4003 of 2012 relate to Custom Milled Rice Scheme, whereas CWJC Nos. 5929 of 2012, 5073 of 2012, 4903 of 2012, 22587 of 2011 and 3744 of 2012 relate to Levy Scheme. CWJC No.4445 of 2013 has been filed for quashing the order dated 20.6.2012 passed by the District Magistrate, West Champaran, Bettiah confiscating 66,000 bags of rice stored in the godown of Bihar State Warehousing Corporation, Bettiah. In the six cases relating to Custom Milled Rice Scheme the petitioners seek direction upon the respondents to give paddy proportionate to the rice supplied to the Food Corporation of India. In the other five writ petitions the petitioners pray for release of the rice supplied by the petitioners or payment of the amount due against such rice supplied under the Levy Scheme to the respondent Food Corporation of India.

¶156

Under the Custom Milled Rice Scheme the petitioners had to deliver advance rise to the Food Corporation of India and thereafter the Food Corporation of India would give them paddy proportionate to the rice supplied by the petitioners. Under the Levy Control Order the petitioners were required to supply levy rice to the Food Corporation of India for the Crop Season 2009-

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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As per norms under the Levy Control Order 50% of the rice milled by the petitioners had to be supplied to the Food Corporation of India but the same was to be done after inspection by the District Supply Officer, West Champaran, Bettiah on the basis of the Enforcement Certificate issued by him for supply of the levy rice.

¶160

In terms of the letters issued by the Food Corporation of India through its Area Manager, Motihari the six petitioners were directed to deliver different quantities of advance rice at the Bihar State Warehousing Corporation, Bettiah for release of paddy to convert it into rice. The petitioners supplied different quantities of rice at different times at the godown of the Bihar State Warehousing Corporation and obtained receipt of the same from the godown In-charge of the said Warehousing Corporation, Bettiah. Similarly on the basis of Enforcement Certificates issued by the District Supply Officer the five petitioners delivered different quantities of rice at the godown of the Bihar State Warehousing Corporation, Bettiah and obtained receipts with respect to the same from the godown In-charge of the said Warehousing Corporation, Bettiah. However, on the supplies of different quantities of rice made only one of the petitioners, M/s. Ridhi Sidhi in CWJC No. 22587, received

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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payment with respect to 250 quintals of rice but no payment was made for the remaining 1250 quintals of rice which is claimed to have supplied by the said petitioner. The petitioner M/s. Chaya Rice Mill claims to have supplied 1000 quintals, M/s. Shiv Shakti Rice Mill claims to have supplied 2378 quintals, M/s. Sanjay Rice Mill claims to have supplied 1000 quintals, M/s. Ridhi Sidhi claims to have supplied 1250 quintals and M/s. Chhaya Rice Mill claims to have supplied 4530 quintals of rice under the Custom Milling Rice Scheme, whereas the five other petitioners, namely, M/s. Asha Chawal Udyog claims to have supplied 2580 quintals of rice, M/s. Priti Rice Mill claims to have supplied 1950 quintals of rice, M/s. Krishna Rice Mill claims to have supplied 4700 quintals of rice and M/s Chhaya Rice Mill claims to have supplied 4530 quintals of rice under the Levy Scheme. All the petitioners claim that the godown Incharge of the Bihar State Warehousing Corporation, Bettiah had given receipt of the supplies made by them but the payment for the same or supply of paddy in lieu thereof has been denied by the respondent Food Corporation of India on the plea that such rice has not been received by them since no acceptance note has been issued by the Food Corporation of India with respect to such rice except for 250 quintals of rice supplied by M/s. Ridhi

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

¶165

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Sidhi.

¶167

The stand of the petitioners is that the practice being followed since earlier years was that the supplies were being made at the State Warehousing Corporation on the direction of the Food Corporation of India which supply was treated as valid supply and, after verifying the same and testing the quality of rice, payments were being made by the Food Corporation of India but in the present matters a dispute has been raised by the Food Corporation of India that the receipt issued by the godown In-charge of the State Warehousing Corporation, Bettiah is not sufficient for the said purpose.

¶168

The stand of the Food Corporation of India is that the rice offered by the rice millers is thoroughly checked by the Quality Control Officer of the FCI to ensure that it conforms the quality as per the standardization made by the Government and other standards laid down and only thereafter payments are being made for the same under the Levy Scheme or proportionate quantity of paddy for the said quantity of rice supplied is released but there being no acceptance note by the officials of the FCI, mere supply of the same at the godown of the State Warehousing Corporation and receipt showing signature of the godown In-charge of the State Corporation is not sufficient to

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Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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consider it as a receipt of the FCI and thus no payment could be made with respect to the said rice nor any paddy released proportionate to the rice supplied under the CMR Scheme.

¶172

The dispute remained unresolved and the matter was thereafter taken up by the Vigilance Wing of the Food Corporation of India at its Headquarters, Delhi and at one time directions were also issued to the Bihar State Warehousing Corporation not to look into the claim of any person with respect to the said rice. However, in the court learned counsel for the Food Corporation of India submits that at present the Food Corporation of India is of the view that since there is no acceptance note with respect to the rice by the officials of the Food Corporation of India, the Food Corporation of India has nothing to do with the rice which may have been supplied by the petitioners and others and the receipt issued by the godown Incharge of the Bihar State Warehousing Corporation. It thus appears that the Food Corporation of India after intervening in the matter and causing the dispute to linger for such a long time has ultimately washed its hands off it and left the matter to be settled by the State Warehousing Corporation, delaying the whole process for more than two years.

¶173

Learned counsel for the Bihar State Warehousing

¶174

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

¶175

¶176

Corporation, on the other hand, submits that the Warehousing Corporation has suffered a huge loss as admittedly on the basis of checking of the godown carried out by the Food Corporation of India approximately 66,000 bags of milled rice have been found to be in excess in the said godown of the Warehousing Corporation which has been lying in the said godown.

¶177

On the other hand, learned counsel for the Food Corporation of India submits that the godown In-charge of the Warehousing Corporation had no authority to accept rice, which godown had been taken on lease by the Food Corporation of India, and unless the rice was handed over by the officials of the Food Corporation of India after accepting the same from the rice millers the same could not have been taken into the godowns of the Bihar State Warehousing Corporation by the godown Incharge of the Warehousing Corporation.

¶178

It appears that the Warehousing Corporation although it does not agree with the stand that FCI has taken, but it has instituted a criminal case against the godown In-charge who had accepted the rice supplied by the petitioners and others without any authority.

¶179

The factual matrix which appears from the entire case is that the petitioners claim to have supplied rice is according to

¶180

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

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them backed by the receipt of the said rice by the godown Incharge of the Warehousing Corporation, Bettiah and the receipts have also been filed by the petitioners in all the cases. The fact of supply having been made by the petitioners and other rice millers cannot be completely disputed as admittedly 66,000 bags of rice totaling to 33,000 quintals approximately are lying in the godown of the Bihar State Warehousing Corporation as excess rice. The issue therefore to be considered is as to how the claim of the petitioners is to be settled.

¶183

The Food Corporation of India has taken a stand that the rice has not been received by the officials of the Food Corporation of India but it cannot be denied that the rice was delivered on the direction of the Food Corporation of India and the same was stored in the godown of Bihar State Warehousing Corporation, Bettiah which has been taken by FCI on lease. Since the rice was supplied by the petitioners and the receipt was issued to them by its godown incharge it would be appropriate for the Warehousing Corporation to ensure that the claim regarding rice is examined and the rice is released to the genuine claimants, as the entire unfortunate episode has occurred due to the fault of the godown In-charge of the Warehousing Corporation.

¶184

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

¶185

¶186

The petitioners are accordingly directed to file their claims with respect to the rice supplied by them with all relevant documents within a period of four weeks from today before the Managing Director, Bihar State Warehousing Corporation who shall examine the same and dispose of the claim by a speaking order within a period of two months of the filing of the claims.

¶187

This Court is also of the view that since the Food Corporation of India had directed the State Warehousing Corporation by its letter dated 1.8.2011 not to entertain any claim received from any corner, i.e., rice mills/traders in respect of the unaccounted rice and ultimately washed its hands off by stating that no supply has been made to it, resulting in a huge loss caused to the respondent Bihar State Warehousing Corporation at least from 1.8.2011 till today, it is therefore left open to the Bihar State Warehousing Corporation to make the appropriate claims in appropriate proceedings against the Food Corporation of India with respect to the said loss caused to it.

¶188

So far as the order dated 20.6.2012 passed by the District Magistrate, West Champaran, Bettiah confiscating 66,000 bags of rice stored in the godown of the Bihar State Warehousing Corporation, Bettiah is concerned, the same has been passed in exercise of power under Section 6-A of the

¶189

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

¶190

¶191

Essential Commodities Act. Learned counsel for the petitioners has assailed the same stating that no such power has been vested in the District Magistrate under the said Section to confiscate the said rice in the circumstances of the present case. From a perusal of Section 6-A of the Act as per the Bihar Amendment it is evident that the said provision can come into play only when there is a seizure pursuant to an Order made under Section 3 and if the Collector is satisfied that there is a contravention of the Order and then he may confiscate the essential commodity so seized.

¶192

Learned counsel for the State is unable to show as to how the present case can be called as a seizure of essential commodity and there being any contravention of any provision of any Order under Section 3 of the Essential Commodities Act.

¶193

From a perusal of Section 6-A of the Act it is evident that the power can only be exercised in case the essential commodity has been seized in pursuance of an order made under Section 3 of the Act. No such seizure or contravention is to be found in the present matter, which is purely a case of supply of rice in terms of the Levy Control Order or Custom Milling Rice Scheme. The order dated 20.6.2012 of the District Magistrate, West Champaran, Bettiah is thus without jurisdiction. It is

¶194

Patna High Court CWJC No.5929 of 2012 (12) dt.20-06-2013

¶195

¶196

accordingly quashed.

¶197

In view of the aforesaid, in case and to the extent the claims of the petitioners are allowed by the Managing Director of the Warehousing Corporation the rice supplied by them should be returned to them forthwith.

¶198

It is made clear that the petitioners shall only be entitled to receive back the rice supplied by them and not to payment of any cost of the rice because when the Collector had proceeded for auction sale of the rice so that the payment could be made to the petitioners and other millers in case so ordered by the Court, the petitioners had approached this Court and obtained stay of the auction sale.

¶199

The writ applications are, accordingly, disposed of in

¶200

terms of the aforesaid observations and directions.

¶201

(Ramesh Kumar Datta, J)

¶202

spal/-

M/S Chchaya Rice Mills v. the State of Bihar and Ors.

Case brief

What is this about?

What did the court decide?

M/S Chchaya Rice Mills v. the State of Bihar and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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