HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION No.3741 of 2026 DATE OF ORDER: 10.02.2026 BETWEEN:

M/s.Sri Prathima Agro Industries and another … Petitioners AND The State of Telangana, Rep. by its Ex-Officio Secretary to Government, Consumer Affairs, Food & Civil Supplies Department and others.

… Respondents : ORDER :

This writ petition is filed to declare the action of respondents in initiating recovery proceedings under the Telangana Revenue Recovery Act, 1864 (for short ‘R.R.Act, 1864’), without adjudication/crystallization of debt of the petitioners and in issuing Form-1 Distraint Order No.B/330/2025, dated 30.01.2026 (received on 02.02.2026), as illegal, arbitrary and contrary to the R.R.Act, 1864, and consequently direct respondent authorities not to interfere with the possession, enjoyment and the business activities of the 1st petitioner Rice Mill.

2. Heard Sri Pasham Mohith, learned counsel for the petitioners, Sri K.Devender, learned Standing Counsel for respondent Nos.3, 7 & 9, learned Assistant Government Pleader for Civil Supplies representing Respondent Nos.1,2,4, 5, 6, 8 and

9.

3. Learned counsel for the petitioners would submit that the petitioner No.2 is the Proprietor of petitioner No.1 which was engaged in the business of custom milling of rice and supplying the same to the respondent authorities; that the petitioner was allocated 4761.160 MTs of paddy during Kharif season of 2023- 2024 upon which the petitioner delivered 2947.283 MTs of custom milled rice to the respondents; that during Rabi Season 2023- 2024, the petitioner was allocated 1985.840 MTs of paddy upon which the petitioner delivered 657.535 MTs. custom milled rice to the respondent authorities.

4. Learned counsel for the petitioners would further submitted that the respondent authorities have allocated paddy much beyond the milling capacity of the petitioners’ rice mill due to which some amount of paddy was damaged on account of rains; and that the respondents have dumped Non-FAQ paddy which is not fit for custom milling. Learned counsel for the petitioners further submitted that respondent No.8 had inspected the petitioners’ rice mill on 10.02.2025 and drawn up Inspection Report wherein the respondent No.8 had alleged shortfall in respect of paddy allocated to the petitioner during Kharif and Rabi seasons 2023-2024. On the same day i.e. 10.02.2025, the respondent No.8 had given complaint against the petitioner alleging that there is a shortfall of paddy allocated to the petitioner during Kharif and Rabi Seasons 2023-2024; that pursuant thereto FIR No.27 of 2025 was registered against the petitioner. While so, the respondent No.6 issued Show-cause notice dated 21.02.2025 alleging that there was short fall in respect of paddy allocated to the petitioner during Kharif and Rabi Seasons 2023-2024 and the petitioner submitted reply on 11.03.2025. However, without considering the said explanation submitted by the petitioners, the respondent No.11 has issued Form-I Distraint Order No.B/330/2025, dated 30.01.2026, calling upon the petitioners to discharge an amount of Rs.6,64,89,984/- on or before 07.02.2026, failing which the distrained property would be brought to public sale.

5. Learned counsel for the petitioners further submitted that the impugned distraint order is bereft of details regarding the amount payable by the petitioners and was issued without following the procedure as contemplated under R.R.Act,1864, under which the distraint order must be preceded by Form-I and Form-2 and as such the impugned distraint order is liable to be set aside.

6. In support of his contention, learned counsel for the petitioners relied upon the Common Order dated 28.08.2024 passed by this Court in WP.No.17985 of 2024 and batch, wherein in similar circumstances, this Court set aside the distraint order by observing that the respondents therein did not follow the procedure laid down under the Act, 1864 w