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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K. LAKSHMAN, J.
Rudramamba Agro Industries – Petitioner
Versus
The State of Telangana – Respondent
Writ Petition Nos. 1974, 17872, 18688, 28007, 45916 of 2022, Writ Petition No. 11484 of 2023, Writ Petition Nos. 18867, 20288 of 2024
Decided On : 28-08-2024
(A) Telangana Revenue Recovery Act, 1864 – Sections 4, 5, 8, 25, and 27 – Custom milling agreements – The court found that the initiation of recovery proceedings under the R.R. Act without determining the amount due is illegal and violates the principles of natural justice. The respondents failed to follow the required procedure, leading to the quashing of distraint orders and notices of attachment. (Paras 30, 31, 32)
(B) Arbitration – The court held that where an arbitration clause exists in an agreement, recovery proceedings under the R.R. Act cannot be initiated without first determining the liability through arbitration. (Paras 22, 23)
Facts of the case: The petitioners challenged the legality of distraint orders and notices of attachment issued by the respondents under the R.R. Act, claiming that the amounts sought to be recovered were disputed and not properly determined. (Paras 7, 11)
Findings of Court: The court ruled that the respondents did not follow the procedure laid down under the R.R. Act, and the distraint orders and notices of attachment were set aside. (Paras 30, 31)
Issues: The main issues included whether the respondents followed the proper procedure for recovery under the R.R. Act and the applicability of the arbitration clause in the agreements. (Paras 11, 12)
Ratio Decidendi: The court emphasized that recovery proceedings cannot be initiated without a proper determination of the amount due and that disputes must be resolved through arbitration if an arbitration clause exists. (Paras 21, 22)
Result: Writ Petition Nos. 17872, 18688, 28007 & 45916 of 2022, 11484 of 2023, 18867 and 20288 of 2024 are allowed; W.P. No. 1974 of 2022 is disposed of.
ORDER :
1. Heard Mr. J. Prabhakar, learned Senior Counsel representing Ms. Kanumuri Kalyani, learned counsel for the petitioners, Mr. S. Rahul Reddy, learned Special Government Pleader and Mr. Pasham Mohith, learned counsel representing Ms. Hamsini Mohith, learned counsel for respondent No. 12 in W.P. Nos. 20288 and 18867 of 2024.
2. W.P. No. 1974 of 2022 is filed declaring G.O.Ms. No. 22, dated 06.12.2021 in not extending the time for supply of custom milling in six (06) installments, as illegal, and for a consequential direction to the respondents to receive the CMR paddy in six (06) installments from the petitioner firms.
3. W.P. Nos. 17872, 18688, 28007 and 45916 of 2022 are filed by the respective petitioners challenging issuance of Demand Prior to Attachment of Land proceedings, dated 29.03.2022, 26.03.2022, 25.06.2022 and 14.12.2022, issued by the respective Tahsildars in Form No. 4 (U/S - 25 of the Telangana Revenue Recovery Act, 1864).
4. W.P. No. 11484 of 2023 is filed by the petitioner challenging issuance of Notice of Attachment proceedings, dated 06.04.2023 issued by the Tahsildar, Mulugu Mandal and District in Form No. 5 (under Section-27 of the Telangana Revenue Recovery Act, 1864).
5. W.P. No. 18867 of 2024 is filed by petitioner Nos. 8 and 9 in W.P. No. 1974 of 2022 challenging the action of respondents in sealing their rice mill in premises No. 9-385, 9-386 in Survey No. 1257/A, 1257/AA and 1257/E, situated at Jeevanth Rao Palli Road, Mulugu Town and District and also seizure of 27,614 bags of paddy and 4420 quintals of rice and also the notice dated 14.03.2024 issued by respondent No. 5 and the notice dated 20.07.2024 issued by the Collector (CS), Mulugu.
6. W.P. No. 20288 of 2024 is filed by the very same petitioner Nos. 8 and 9 along with petitioner in W.P. No. 45916 of 2022 challenging the issuance of notice of attachment proceedings, dated 25.07.2023 issued by the Tahsildar, Mulugu Mandal and District in Form No. 5 (under Section-27 of the Telangana Revenue Recovery Act, 1864) and also Notification dated 25.07.2024 published in Mulugu District, extraordinarily, Government of Telangana in Form No. 5, Notice of assumption in Form No. 6, dated 25.07.2024 issued by respondent No. 2 and the notice issued by the Dist. Manager, TGSCL, Mulugu on 26.07.2024.
7. Thus, the challenge is with regard to the initiation of proceedings under the Telangana Revenue Recovery Act, 1864 (for short ‘R.R. Act’) and the allegation of the petitioners is that the respondents issued impugned notices without following the procedure laid down under the R.R. Act. Therefore, there is no need to delve into the facts of the case in detail.
8. However, the gist of the contentions in the aforesaid writ petitions is necessary and the same are mentioned below:
(a) The Telangana State Civil Supplies Corporation Limited (TSCSCL) delivered 64.16 LMTS of paddy during the Rabi Season 2019-20, which is more than milling capacity of the petitioner mills.
(b) In the absence of any obstacles, the TSCSCL extended time vide G.O.Ms. No. 13, dated 25.07.2019 to clear their dues from 2013-19.
(c) But, due to COVID in March, 2021, imposition of Lock Down leading to shortage of labour and transportation and huge rains, which were beyond the control of the petitioners, they could not process custom milling. Without considering the same, the respondents issued G.O.Ms. No. 22, dated 06.12.2021 stating that they are not extending time for supply of custom milling.
(ii) W.P. Nos. 17872, 18688, 28007 & 45916 of 2022:
(a) Owing to COVID in March, 2021, imposition of Lock Down leading to shortage of labour and transportation and huge rains, which were beyond the control of the petitioners, they could not process custom milling. Without considering the same, the respondents issued G.O.Ms. No. 22, dated 06.12.2021 informing that they are not extending time for supply of custom milling.
(b) The petitioners made representation to the TSCSCL for extension of
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.
(1) Public demand – Term ‘public demand’ is of wide amplitude and encompasses all arrears or dues.(2) Jurisdictional facts consist of a sequence of events or a bundle of circumstances – Relevant circ....
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