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2016 Supreme(Pat) 404
IN THE HIGH COURT OF JUDICATURE AT PATNA
HEMANT GUPTA And AHSANUDDIN AMANULLAH, JJ.
The Bihar State Food and Civil Supplies Corporation - Appellants
Versus
Sone Valley Rice Mill – Respondent
Letters Patent Appeal No.1576 of 2014 with Civil Writ Jurisdiction Case No. 13746 of 2013
Decided On : 20-05-2016
For the Appellants :Mr. Anjani Kumar, Senior Advocate Mr. Shailendra Kr Singh, Advocate
For the Respondent No.1-:Mr. Y. V. Giri, Senior Advocate Rice Millers Mr. Jitendra Singh, Senior Advocate Mr. Sumit Kumar Singh, Advocate Mr. K. M. Mishra, Advocate
Mr. Shashi Bhushan Prasad, Advocate
For the Respondents–State: Mr. M. K. Singh, A.C. to S.C.-6
For the Food Corporation of India :Mr. Prabhakar Tekriwal, Advocate
The main legal point established in the judgment is that the amount claimed by the appellant is a public demand, recoverable under the provisions of the Act, as the paddy was entrusted to the Millers for custom milling, which they failed to deliver to the FCI as part of the Public Distribution System.
Headnote:
PUBLIC DEMAND - Recovery of dues under the Act - 8-A, 15 - The court examined the nature of the transaction between the appellant and the Miller and found that the paddy was entrusted to the Millers for custom milling, which they failed to deliver to the FCI as part of the Public Distribution System. The appellant, acting as an agent of the State, was entrusted with the task of procurement, milling, and subsequent distribution. The court held that the amount claimed by the appellant is a public demand, recoverable under the provisions of the Act.
Fact of the Case:
The appellant, Bihar State Food and Civil Supplies Corporation Limited, initiated recovery proceedings against the Miller for failing to deliver the required quantity of rice to the Food Corporation of India (FCI) after custom milling of paddy. The Miller argued that the paddy was not lifted by the respondent authorities and remained in their godown, placing the default on the authorities.
Finding of the Court:
The court found that the paddy was entrusted to the Millers for custom milling, which they failed to deliver to the FCI as part of the Public Distribution System. The appellant, acting as an agent of the State, was entrusted with the task of procurement, milling, and subsequent distribution. The court held that the amount claimed by the appellant is a public demand, recoverable under the provisions of the Act.
Issues: The issues revolved around the failure of the Miller to deliver the required quantity of rice to the FCI after custom milling of paddy, and the appellant's initiation of recovery proceedings under the Act.
Ratio Decidendi: The court held that the amount claimed by the appellant is a public demand, recoverable under the provisions of the Act, as the paddy was entrusted to the Millers for custom milling, which they failed to deliver to the FCI as part of the Public Distribution System.
Final Decision: The court allowed the Letters Patent Appeal, set aside the order passed by the learned Single Judge, and dismissed the writ application, with no order as to costs.
HEMANT GUPTA, J.
This order shall dispose of 40 analogous cases arising out of an order passed by the learned Single Judge on 22nd July, 2014 setting aside the recovery certificate issued by the Certificate Officer.
2. Since the issues raised are identical, for brevity, the facts are taken from CWJC No.13746 of 2013 giving rise to L.P.A. No.1576 of 2014.
3. The writ petitioner-respondent no.1 herein (for short, hereinafter referred to as the Miller) entered into an agreement with the appellant Bihar State Food and Civil Supplies Corporation Limited (for short, hereinafter referred to as the appellant) on 22.12.2011 regarding lifting of paddy and delivery of rice after custom milling of paddy. Since the entire claim is based upon interpretation of the agreement, the same is extracted in its entirety after correction of spelling mistakes:
“Execution of bond framed under terms and conditions with the District Manager, Bihar State Food & Civil supplies Corporation Ltd. District Office, Bhabua regarding lifting of Paddy and delivering of advance Rice against paddy lying in the godowns/procurement Centres under District Office of Bihar State Food & Civil Supplies Corporation Ltd. Bhabua under custom milling of paddy.
I, the proprietor of M/s Sone Valley Rice Mill declared that I am willing to mill, Bihar State Food & Civil Supplies Corporation Ltd. Paddy lying at the Ramgarh centre under, Bihar State Food & Civil Supplies Corporation Ltd. District Office Bhabua on delivery of Rice RBC/RRC in advance as per Govt. of India specification and as per terms and conditions of Bihar State Food & Civil Supplies Corporation Ltd. In vogue.
1. M/s Sone Valley Rice Mill Registration No. 100311100565 dated 05/06/2009 valid upto ………… issued by Directors of Industry, Govt. of Bihar, (VAT No. 10181599084) will deliver advance rice raw/par boiled confirming to Govt. of India uniform specification for KMS 2011-12 in 50 Kg. net packing.
2. After delivery of advance rice proportionate paddy will be issued to the miller by Bihar State Food & Civil Supplies Corporation Ltd. Bhabua.
3. Rice will be accepted in the same Gunny Bags in which the paddy is delivered by the corporation. For the First consignment/ lot, rice will be delivered by the miller in new SBT gunnies. The excess gunny will be paid by the miller or deducted from the bills submitted by the miller.
4. The miller has already deposited Rs. 50,000/- as security money through DD No. 368252 dt. 21.12.2011 Rs. 50,000/- in favour of District Manager Bihar State Food & Civil Supplies Corporation Ltd. Bhabua.
5. Out turn ratio for par boiled rice is 68% and for raw rice in 67% on “As is where is basis” and by product, broken etc. obtained from milling shall be property of miller.
6. Rs. 25/- per quintal of paddy milling charge will be paid for par boiled rice and Rs. 15/- per quintal milling charge will be paid for raw to the miller after getting the proper bill from the miller.
7. Rice shall be bagged in standard weight of 50 Kg. and all bags are to be double machine stitched in green thread and bags should be duly stenciled with green colour showing name of the miller and station, crop year, net weight commodity, variety and lot no.
8. Price of Excess Gunny bags (in which paddy supply to miller) will be deducted by the Corporation at the rate of 60% of new gunny bags price.
9. This miller will supply rice to be tagged depot of Food Corporation of India in advance within 7 (seven) days on getting release order from Bihar State Food & Civil Supplies Corporation of receipt of rice at F.C.I. and proportionate paddy will be actually released by Bihar State Food & Civil Supplies Corporation Ltd. Bhabua to the miller from different procurement Center.
10. Transportation charge @ 17 paise per quintal per kilometer for distance upto 100 Kms excluding 8 K.M. is admissible for milling of paddy. Transportation charges in respect of delivery of rice will be restricted to the nearest F.C.I. rice receipt centre.
11. In
