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2019 Supreme(Mad) 254
IN THE HIGH COURT OF JUDICATURE AT MADRAS
T. RAJA, J.
M/s. Krishna Modern Rice Mill - Petitioners
Versus
Puducherry Agro Products & Ors. - Respondents
W.P.No.17444 of 2016 and WMP.No.14913 of 2016
Decided On : 03-01-2019
For the Petitioner: Mr. V. Raghavachari.
For the Respondents: Mr. T.M. Naveen, Mr. Gandhiraj, Govt. Pleader (Pondy) Mr. C.T. Ramesh, Additional Govt. Pleader (Pondy).
Headnote:
Supply Of Rice - Fair Price Shops - Tender was invited so as to provide over 2,50,000 family card holders and 57,000 family card holders with rice as under Government schemes and cost price shops - Learned Counsel for Petitioner further submitted that petitioner has submitted a bid of Rs.25.95 per kilo - Therefore, he was declared as a successful bidder and subsequently, he was directed to supply variety of White Colour Single Boiled Rice in 50 kg polypropylene bags with an assurance that he would be paid Rs.25.95/- per Kg - He was also directed to make a Security Deposit of Rs.38,92,500/ - After compiling with said conditions promptly, he was awarded with a tender - When payments were regularly being made until September, respondents, all of a sudden, stopped further payments – Held, Condition No.20 says that payment of cost at rate accepted will be made to supplier for a net quantity of White Colour Single Boiled Rice supplied within 30 days on submission of bills in triplicate along with acknowledgment from official in charge at fair price shops - As against said terms and conditions, for more than three years, 1st respondent has neglected to pay costs of rice supplied, as a result, petitioner has been put to huge financial loss and unnecessary interest accrued which are payable to banks - Therefore, this Court is inclined to impose an exemplary cost of Rs.5,00,000/- for non-payment of balance amount because one of letters issued by State Bank of India, Pondicherry also speaks that loan amount of petitioner has become irregular - Therefore, even in year 2016, State Bank of India cautioned petitioner to face SARFAESI Proceedings against properties mortgaged to them - That also shows that petitioner has been put to huge financial loss - In view of all above, while allowing this Writ Petition, Court has no hesitation to direct 1st respondent to release a sum of Rs.4,49,71,153.75p towards arrears of balance amount to petitioner for rice supplied by them along with an exemplary cost of Rs.5,00,000/- and also with usual rate of interest thereon, within a period of two weeks from date of receipt of a copy of this Order – Appeal Disposed Of.
1. This Writ Petition has been filed seeking to issue a Writ of Mandamus, directing the 1st respondent herein, namely, the Managing Director, Puducherry Agro Products, Food and Civil Supplies Corporation Ltd., Puducherry to pay the pending dues as on 26.06.2016 amounting to Rs.5,30,45,271/- with interest thereon to the petitioner.
2. Learned Counsel appearing for the petitioner submitted that the Puducherry Agro Products, Food and Civil Supplies Corporation Limited (PAPSCO), one of the Government of Puducherry Undertakings had floated an e-tender on 28.05.2015 for supply of white single boiled rice in Puducherry and Karaikal regions of the Union Territory of Puducherry. The tender was invited so as to provide over 2,50,000 family card holders in Puducherry and 57,000 family card holders in Karaikal with rice as under Government schemes and cost price shops.
3. The learned Counsel for the Petitioner further submitted that the petitioner has submitted a bid of Rs.25.95 per kilo. Therefore, he was declared as a successful bidder and subsequently, he was directed to supply variety of White Colour Single Boiled Rice in 50 kg polypropylene bags with an assurance that he would be paid Rs.25.95/- per Kg. He was also directed to make a Security Deposit of Rs.38,92,500/-. After compiling with the said conditions promptly, he was awarded with a tender. When the payments were regularly being made until September, 2015, the respondents, all of a sudden, stopped further payments.
4. The learned Counsel for the petitioner also submitted that as per Clause 20 of the tender agreement, payment of cost at the accepted rate at the net quantity supplied was to be made within 30 days on submission of bills in triplicate along with acknowledgment from the official in charge at fair price shops. As against the said Clause 20 of the tender agreement, the first respondent has not come forward to make the payment. Therefore, the petitioner has given a letter on 11.01.2015 to the Managing Director of the 1st respondent to release the EMD amount, but there was no response forthcoming. Again the petitioner brought to the notice of the 2nd respondent on 01.04.2016 mentioning that the 1st respondent has not cleared the dues. But the 1st respondent has confirmed the outstanding of Rs.3,87,27,956/-. The petitioner also has given a representation to the Chief Secretary of Puducherry and the Secretary, Civil Supplies Department on 14.04.2016 stating that the 1st respondent had issued a false Utilization Certificate to the 2nd respondent.
5. The learned Counsel for the petitioner further submitted that again on 16.04.2016, one more representation was given to the Managing Director of the 1st respondent to disburse the outstanding amount and it was also informed that the petitioner would be able to supply part of the order made by the Cost price shop on 08.04.2016 subject to the clearance of the outstanding. In the mean while, the petitioner's bank also started charging the penal interest. Later on, the 1st respondent issued yet another confirmation of balance admitting the further outstanding of Rs.1,22,53,950/- on 19.4.2016. In the mean while, the bank also issued an Ultimatum that the loan should be completely paid by the petitioner on or before 10.05.2016.
6. The learned Counsel for the petitioner also submitted that when it is an admitted case of the petitioner that the outstanding liability accrued against the 1st respondent has to be cleared, they kept quite, while the petitioner is facing dire consequences from their bank. At any time, they can take action under SARFEASI Proceedings. Therefore, the prayer made in the Writ Petition be allowed, thereby directing the 1st respondent to pay the entire amount of Rs.5,30,45,271 with interest thereon.
7. A detailed Counter Affidavit has been filed by the 1st respondent.
8. Learned Counsel appearing for the 1st respondent reinstating the stand taken in the counter affidavit submitted that as stated in Paragraph 7 o
