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2026 Supreme(Online)(Ker) 12044

IN THE HIGH COURT OF KERALA AT ERNAKULAM
SUSHRUT ARVIND DHARMADHIKARI, SYAM KUMAR V.M., JJ
THE MANAGING DIRECTOR KERALA STATE CIVIL SUPPLIES CORPORATION LTD. – Appellant
Versus
M/S.T.O.VARGHESE RICE & PADDY DEALERS – Respondent
WA NO.839 OF 2013 | WA NO.898 OF 2013 | WA NO.933 OF 2013 | WA NO.938 OF 2013



Advocates:
For the Appellants/Petitioners: SRI.N.D.PREMACHANDRAN, SC, SUPPLYCO
For the Respondents: SRI.B.K.GOPALAKRISHNAN, SRI.M.R.ANISON, SMT.K.P.GEETHA MANI, SMT.S.KARTHIKA, SRI.N.N.SUGUNAPALAN (SR.), SRI.S.SUJIN, SRI.K.P.HARISH, SR.GOVERNMENT PLEADER

Writ jurisdiction under Article 226 cannot adjudicate disputes arising from contracts or address complex questions of fact needing evidence.

Headnote:(A) Constitution of India - Article 226 - Writ jurisdiction - The High Court in the exercise of writ jurisdiction under Article 226 cannot adjudicate disputes arising from contractual obligations and must refrain from engaging in the interpretation of contractual terms and resolving disputes requiring evidence - It was determined that the Corporation is entitled to recover amounts due under the agreements. (Paras 19, 23)

(B) Jurisdiction - The court clarified that the jurisdiction under Article 226 does not extend to resolving disputes involving complex questions of fact that require oral evidence - The High Court erred in issuing directives beyond its jurisdiction. (Paras 19, 20)

Facts of the case:
Disputes arose from contracts awarded for procurement of paddy and milling, involving multiple parties with claims for recovery and penalties applicable for non-compliance with agreements. The learned Single Judge had issued rulings concerning recovery amounts and penalties without adequate basis in law. (Paras 2, 6, 22)

Findings of Court:
The judgment of the learned Single Judge was flawed due to the inappropriate exercise of jurisdiction in contractual matters, leading to unsustainable conclusions regarding penalties and dues owed to the Corporation. (Paras 21, 23)

Issues: Whether the High Court rightly exercised its jurisdiction to determine contractual disputes and the appropriateness of penalties imposed by the Corporation for non-compliance with agreements. (Paras 20, 23)

Ratio Decidendi: The court emphasized that writ jurisdiction does not extend to contractual disputes requiring detailed evidence and that the learned Single Judge's conclusions lacked legal grounding. (Paras 18, 23)

Result: Writ Appeals allowed; judgment of the learned Single Judge set aside.

Table of Content
1. disputes on contracts for paddy procurement (Para 1 , 2 , 3 , 4 , 5 , 6)
2. arguments on legitimacy of the learned single judge's judgment (Para 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. jurisdictional limitations regarding contractual disputes (Para 18 , 19 , 20 , 21)
4. contractual obligations and recovery rights (Para 22 , 23 , 24)

Syam Kumar V.M., J.

These Writ Appeals raise common questions for consideration and are filed challenging the common judgment of the learned Single Judge dated 28.02.2013 in three connected Writ Petitions. They were heard and disposed of together vide this common judgment. W.A.No.898 of 2013 is treated as the lead case for the sake of easy reference to the parties and exhibits.

2. The subject matter of these litigations are disputes arising from contracts awarded by the Kerala State Civil Supplies Corporation (hereinafter referred to as the ‘Corporation’) to rice mills for procurement of paddy from farmers and societies, for milling and supply to ration dealers.

3. W.P.(C) No.31143 of 2007 was filed by two rice mill owners contending that there had been illegal rejection of certain consignments of paddy and rice supplied by them. They had in the W.P.(C) inter alia sought to quash the proposed action/demand notice initiated/issued to them by the Corporation and sought issuance of a writ of mandamus directing the Corporation to pay them the amounts due under the relevant contract. A prayer for issuance of a writ of mandamus directing the Corporation to decide the quantity rejected on the ground that the same was not in conformity with the PFA standard and to relieve the petitioners from all liabilities up to a specified date and to pay them the amount due as hulling charges, was also made in the said Writ Petition.

4. W.P.(C) No.36841 of 2009 was filed by a mother and son duo contending that they had purchased two mills involved in W.P(C) No.31143 of 2007 which have outstanding dues to the Corporation and that the revenue recovery proceedings initiated against the relevant mill properties will put them to irreparable loss and prejudice. They thus sought to quash the revenue recovery proceedings and a direction not to proceed against the properties now owned by them, pending disposal of W.P.(C)No.31143 of 2007.

5. Another W.P.(C) numbered as W.P.(C) No.33822 of 2010 had also been filed by K.C.Abraham claiming to be the bonafide purchaser for value challenging the orders passed by the Revenue Authorities and seeking a direction that the relevant property cannot be attached and proceeded for non-payment of dues payable to the Corporation by the petitioners in W.P.(C) No.31143 of 2007.

6. After admitting the W.Ps., certain interim orders were passed based on which certain amounts were remitted by the 1st petitioner in W.P.(C) No.31143 of 2007 towards the amounts claimed by the Corporation. The revenue recovery proceedings were stayed on the basis of the amounts thus remitted. The relevant property changed hands in the meanwhile and an agreement was entered into between the Corporation and the subsequent purchasers which envisaged making deduction of certain amounts from the amounts due to them from the Corporation. The legal heirs of the deceased 1st petitioner in W.P.(C) No.31143 of 2007 were impleaded as additional respondents and the subsequent purchasers too got impleaded. The separate Writ Petition filed by them were also tagged along with the main litigation viz., W.P.(C) No.31143 of 2007. Finally, the learned Single Judge vide common judgment dated 28.02.2013 disposed of the W.P.(C)s inter alia holding as follows:

"(i) In WP (C) No.31143/2007, it is declared that the Corporation is not entitled to recover from the legal heirs of the first petitioner, the delay cut of ₹10/- per day per M/T rice amounting to ₹59,86,649/- and no further amount is payable by them to the Corporation.

(ii) WP (C) No.36841/2009 is allowed quashing the revenue recovery proceedings against the property purchased by the

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