IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Harsh Bunger, J.
M/s Shree Ganesh Agro Foods through its Proprietor/Partner and others - Petitioners
Versus
Union of India and others - Respondents
CWP-792-2026 (O&M)
Decided On : 16-01-2026
JUDGMENT :
HARSH BUNGER, J.
1 Petition herein is, inter alia, seeking a writ in the nature of Certiorari, for quashing the action of the respondents in making recovery pertaining to “usage charges” in respect of crop year 2019-20 up to 2023-24 and/or making deductions/adjustments from the petitioners.
1.1 A further prayer has been made for quashing the letter dated 08.12.2025 (Annexure P-8) issued by Haryana State Cooperative Supply and Marketing Federation Limited (respondent No.9) on the strength of letter dated 28.08.2025 (Annexure P-7).
1.2 Another prayer has been made for quashing the letter dated 28.08.2025 (Annexure P-7) issued by Food Corporation of India, Regional Office, Haryana.
1.3 Yet another prayer has been made for issuance of appropriate directions to the respondents to withdraw the recovery imposed upon the petitioners and for not taking any coercive measures against them.
2. Briefly, for procurement of rice, the State of Haryana floats a custom milling policy for every crop year. The paddy, which is procured by the State/State Procurement Agency are allotted to the rice millers for its milling/shelling as per the custom milling policy and the resultant rice is delivered to the Food Corporation of India in the central pool by the concerned rice millers through the State/State Procurement Agency. The cost of rice and other charges are claimed by the concerned State Agency from the Food Corporation of India. The issue raised in the present writ petition is pertaining to kharif marketing season 2019-20 up to 2022-23, wherein, vide the impugned letters, the respondent authorities are seeking recoveries from the petitioners on account of “usage charges”, which are leviable in respect of bags which have been used once for storing paddy (hereinafter referred to as “once used bags”).
3. Concededly, under the custom milling policy for kharif marketing season 2019-20, clause 4(d) deals with packing material, which reads as under:-
“d) Packing Material
The State Govt. agencies have made arrangements of gunny bales of 50 kg. These bales will be used in 50:50 ratio policy of GOI, for filling of Paddy as well as delivery of CMR. FCI also has adequate stocks of gunny bales, which will be used for this purpose. The agencies also have sufficient quantity of polythene covers, tarpaulins and fumigants etc. The agencies will have to ensure the stocking of the packing material at the strategic points well before the commencement of the season so that no difficulty is experienced when the actual procurement starts. In case of any change in the packing material policy, the same would immediately be conveyed to all concerned.”
4. It is submitted that for the purposes of packing, the gunny bags are to be used, the procurement of which is regulated by way of instructions, which have been issued from time to time. The petitioners have referred to the instructions dated 13.12.2018 (Annexure P-6), providing for ‘usage charges’ for packing of procured paddy for kharif marketing season 2018-19 onwards. The relevant extract of the same reads as under:-
“Subject: Usage charges for packaging of procured paddy for KMS 2018-19 onwards as per existing guidelines
Sir/Madam,
I am directed to refer to this department letter no. 15-8/2004.Py.III (Pt.) dated 18.05.2017 wherein guidelines to provide usage charges for packaging of procured paddy were communicated.
2. Considering the requests made by States relating to practical problems faced by them w.r.t conditions specified in usage charge for KMS 2017-18 in letter dated 05.10.2017 and discussion held with the States, it is to inform that this Department has decided to fix the usage charges for packaging of paddy for KMS 2018-19 as Rs 7.32/bag or the actual cost incurred by the State Govt, if it is lower than Rs 7.32/bag subject to the following conditions:
a) The concerned Agency/State Government shall maintain a proper account of the number of used jute bags procured and used for packaging of paddy procured in a
The main legal point established in the judgment is that the decision of the Central Government to insist on the supply of fortified rice by rice millers was within the purview of the Custom Milling ....
Recovery of excess payments for Mandi Labour Charges requires concrete evidence; assumptions and conjectures are insufficient for legal demands.
Recovery proceedings under the Telangana Revenue Recovery Act cannot be initiated without a prior determination of the amount due, especially when disputes exist and an arbitration clause is present.
Recovery proceedings under the Telangana Revenue Recovery Act cannot be initiated without prior determination of the amount due, especially when an arbitration clause exists in the agreement.
The main legal point established in the judgment is the obligation of the State and FCI to directly procure paddy from farmers at the MSP to prevent distress sales and eliminate middlemen.
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