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2025 Supreme(Cal) 374
IN THE HIGH COURT AT CALCUTTA
SUBHENDU SAMANTA, J.
Subrata Ghosh – Appellant
Versus
The State of West Bengal & Ors. –Respondent
WPA 15750 of 2025
Decided On : 16-07-2025
For the Appellants : Mr. Kalyan Bandopadhyay, Sr. Adv., Mr. Ramesh Dhara
For the Respondents: Mr. Vibekananda Bose, Mr. Tarak Nath Sarkar
The court ruled that the denial of execution of the agreement based on pending criminal proceedings must be substantiated and consistent with similar cases to ensure fair treatment.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Guidelines for empanelment of flour mills - The petitioner, owner of a newly empanelled flour mill, was denied execution of an agreement due to arrest in a PMLA case - Court directed State to decide on agreement execution post furnishing of a Bank Guarantee - Review of eligibility under the 2024 Guidelines concerning criminal proceedings leads to denial - Court found delegation of decision-making to a committee permissible. (Paras 4, 7, 18)
Facts of the case:
The petitioner, empanelled for flour distribution, was arrested under PMLA which hindered agreement execution. Despite obtaining a power of attorney for his wife to act, the agreement was not executed, prompting legal action.
Findings of Court:
The State is directed to assess the legitimacy of denying agreement execution based on the guidelines considering the petitioner’s criminal history. The authority must remain consistent with similar cases.
Issues: Was the denial of the agreement execution arbitrary? Is the sub-delegation of authority legal? Does the petitioner’s situation align with the provisions avoiding criminal proceedings?
Ratio Decidendi: The court elaborated that the authority's discretion should be exercised based on proper substantiation, examining the context of similar cases to ensure fairness in decision-making on contract execution.
Result: The court directed the State to provide an affidavit to clarify its position on similar cases pending against the petitioner.
| Table of Content |
|---|
| 1. details of the petitioner's empanelment process and challenges. (Para 1 , 2 , 3 , 4 , 5) |
| 2. petitioner's legal arguments against denial of agreement. (Para 6 , 7 , 8 , 9 , 10) |
| 3. state's response and procedural contentions regarding the empanelment. (Para 11 , 12 , 13 , 14 , 15) |
| 4. court's observations on the legality of committee decision-making. (Para 16 , 17 , 18) |
| 5. interpretation of guidelines on empanelment and criminal proceedings. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25) |
| 6. court's directive for further affidavits and future hearing date. (Para 26 , 27 , 28) |
Judgment :
Subhendu Samanta, J.
1. Petitioner is owner of G.K. Agro Food Products which was empanelled by the Government of West Bengal for functioning flour mill for conversion of wheat into F/Atta for distribution to the NFSA beneficiaries of District Nadia.
2. After empanelment, while petitioner was proceeding to execute an agreement with the department, the petitioner was arrested in connection with a case under Prevention of Money Laundering Act, 2002 (hereinafter referred to “PMLA”, 2002) and was in custody; consequent thereto he could not execute the agreement with the department which was fixed to be executed on 18th of February, 2025. While petitioner was in custody, he on the sanction of the learned Trial Court has executed a power of attorney in favour of her wife to execute agreement with the department. The wife of the petitioner though approached with the department but no such agreement was executed. Petitioner after releasing on bail has applied before the concerned District controller for giving an opportunity to execute the agreement; on such, the District Controller vide a memo dated 24th of April, 2025 has directed the petitioner to furnish relevant Bank Guarantee so that he may approached the department for execution of agreement as the last date of agreement has already been over on 18th of February, 2025.
3. At this juncture, the petitioner approached this Court in a writ petition being WPA No.11813 of 2025. This Court vide an order dated 23rd of May, 2025 has directed the concerned authority as follows:
“Having considered the materials on record, it appears the petitioner is aggrieved for non-execution of the agreement by the concerned authority, he has been empanelled. It further appears that the petitioner has failed to appear before the authority on May 18, 2025, when the date was fixed for execution of the agreement. However, the authority concerned has made it clear that the agreement can be executed on furnishing a bank guarantee. Since, the bank guarantee has already been furnished, the concerned department should have act according to the Memo dated April 24, 2025.
I make it clear that as the state authority has decided that they shall proceed to execute the agreement on furnishing Bank Guarantee, and as it appears petitioner has already furnished required Bank Guarantee, this Court feels necessary to relegate the matter to the Authority concerned for further decision”.
4. In pursuance to such direction the Director, DDP&S, Food and Supplies Department vide an order dated June 12, 2025 formed a committee to take decision on that matter. Such committee has considered the case and passed an order on June 25, 2025 thereby the committee by referring Sub Clause5 of Clause 8 of the concerned guideline of 2024, has observed that petitioner is not eligible for empanelment/renewal of flour mill. Accordingly, his representation was rejected; hence this writ.
5. It is the prayer of the petitioner in the writ that the impugned order dated June 25, 2025 may not be given effect to.
6. Mr. Kalyan Bandopadhyay, learned senior counsel appearing on behalf of the petitioner initially submits that Director, DDP&S has to take a decision on the direction of this Court but he sub delegate the matter to the committee which is illegal delegated power cannot be sub-delegated.
7. It is further contentions of Mr. Bandopadhyay that criminal proceeding as refer
