Revenue recovery proceedings initiated without prior notice, proper adjudication of liability, or an opportunity for a personal hearing violate the principles of natural justice and are liable to be set aside.

ORDER:

Heard Smt.B.Rachna Reddy, learned senior designated counsel representing Sri Mohd Baseer Riyaz, learned counsel appearing on behalf of the petitioner on record and learned Government Pleader for Civil Supplies appearing on behalf of the respondents.

2. The petitioner approached the Court seeking prayer as under:

“….to issue all appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the proceedings issued by the 2nd Respondent in Letter Lr.No.D2/196/2026, dated 06.03.2025 whereby the 2nd Respondent initiated revenue recovery proceedings against the petitioner without proper adjudication or determination of liability and without following due process of law as illegal, arbitrary, contrary to law and violative of the principles of natural justice Consequently to suspend the 2nd respondent Letter Lr.No.D2/196/2026, dated 06.03.2025, whereby the 2nd Respondent initiated revenue recovery proceedings against the petitioner without proper adjudication or determination of liability and without following due process of law by considering the petitioner’s request letters Dated 19.07.2025, 11.09.2025 along with Bank Guarantee, Request Letter, Dated 17.10.2025 along with Bank Guarantee and Common Order in WP. No. 1974 of 2024 and batch Dated 28.08.2024 Order in WP. No. 24236 of 2024 Dated 03.09.2024 Order in WP. No. 25931 of 2024 Dated 20.09.2024 Order in WP. No. 24993 of 2024 Dated 10.09.2024 and pass…”

3. The case of the petitioner in brief as per the averments made in the affidavit filed by the petitioner in support of the present writ petition is as under:

The petitioner’s company had participated in Custom Milling Rice (CMR) operations for several years and successfully fulfilled all obligations relating to Rabi 2020-21, Rabi 2021-22 and Kharif 2022-23 seasons. Disputes arose only with respect to the Rabi 2022-23 season, wherein the Civil Supplies Corporation auctioned the allotted paddy without permitting delivery of resultant CMR. On 10.07.2024, the Civil Supplies Department had conducted a surprise inspection of the petitioner’s rice mill in petitioner’s absence while the petitioner was undergoing pregnancy-related treatment, and allegedly prepared a panchanama at the District Civil Supplies Office without independent witnesses.

Based on the said inspection, Crime No.163 of 2024 was registered, which was challenged in Criminal Petition No.11513 of 2024, wherein this Court had directed compliance with Section 35(3) of BNSS, 2023. Thereafter, the petitioner submitted representations dated 19.07.2025, 11.09.2025 and 17.10.2025 along with Draft Bank Guarantees for ₹5 crores and ₹17 crores from Euro Exim Bank requesting determination of final liability and sought permission to pay in installments. However, without considering the explanations, bank guarantees and representations, the 2nd respondent issued proceedings vide Lr.No.D2/196/2026 dated 06.03.2025 initiating coercive revenue recovery proceedings without adjudication, personal hearing or proper determination of liability. Aggrieved by the same, the petitioner had approached this court by filing the present writ petition.

4. PERUSED THE RECORD

The order impugned vide Lr. No.D2/196/2026, dated 06.03.2026 issued by the respondent No.2 is extracted hereunder:-

An inspection was conducted on 10.07.2024 at M/s Rilik Agro Farm Rice Mill, Nachahalli Village, Wanaparthy Mandal. During verification, a discrepancy of 2,62,825 paddy bags was noticed in the mill premises. After verification