The FOOD CORPORATION OF INDIA v. M/S ARYAN FOODS

: Mr. Prabhakar Tekriwar, Advocate : M/s S D Sanjay, Gautam Kejriwal, Sushila Agrawal, Advocates : Mr. Sanjay Prakash Verma, AC to GA V : Mr. Sunil Kumar Karn AC to AAG VI : M/s S D Sanjay, Gautam Kejriwal, Sushila Agrawal, Advocates : Mr. Pancham Lal Jaiswal, Advocate ********** P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE BIRENDRA PRASAD VERMA S K Katriar, J. The Food Corporation of India and the State of Bihar have 2 preferred these two appeals under clause 10 of the High Court of Judicature of Patna, and raise a grievance with respect to a common order dated 9.3.2006, passed by a learned single Judge of this Court in CWJC No.2860 of 2006 (M/s Arya Foods & Ors. Vs State of Bihar & Ors.), whereby the writ petition preferred by the common respondents in the two appeals has been allowed, and both the appellants herein have been directed to make payment of the compulsory supplies of foodgrains made to the appellants as per the Gazette Notification dated

8.12.2005. Both the appeals raise the same issues and grievance with respect to the order and are, therefore, being disposed of by a common judgment.

2. A brief statement of facts essential for the disposal of these appeals may be indicated. Section 3(3)(B) of the Essential Commodities Act 1955 (hereinafter referred to as `the Act’), read with 3(2)(f) of the Act, empowers the Central Government or the State Government to issue an Order making it compulsory for a person to supply foodgrains, edible oils, or edible seeds as per the quantity and the rates to be prescribed in the Order. In exercise of such powers, the Government of Bihar issued the Bihar Rice and Paddy Procurement (Levy) Order 2005 (hereinafter referred to as Levy Order), clause 3 of which reads as follows:- “3. Levy on Rice Produced in a Rice Mill (a) Every miller shall sell 40% of the quantity of rice produced or manufactured out of paddy received by him/her on Minimum Support Price to Food Corporation of India within the prescribed limit as per schedule-IV in any rice mill from the date of commencement of this order. (b) Every small Hallers & Sellers may sell 100 quintal rice to Food Corporation of India out of paddy purchased on Minimum Support Price from farmers during the Kharif Marketing Season. © Each variety of rice conforming to specification purchased or otherwise acquired and milled by him for the purpose of sale from persons other than a miller.”

3. It is evident that clause 3 of the Levy Order makes it compulsory for every miller to sell 40% of its quantity of rice produced or manufactured out of paddy received by him at the minimum support price prescribed in schedule –IV to the Order. Schedule – IV of the same is reproduced hereinbelow:- 3 SCHEDULE – IV Rates of Levy Rice (Kharif Marketing Season 2005-06) Sl. no. Commodity Common Raw Rice

1063.88 2. Par-Boiled Rice 1007.43 1054.89

1015.25

1. ( Rs. per quintal ) Grade “A” In view of the compulsion attached to clause 3 of the Levy Order, the respondents herein (the writ petitioners) supplied 40% of the quantity rice purchased or manufactured by them to the Food Corporation of India, an agent of the Government of India, being a public sector undertaking.

4. After the supplies were over, dispute arose about the rates at which payment shall be made to the respondents herein. Relying on a communication dated 31.10.2005, from the Government of India, Ministry of Consumers Affairs, Food & Public Distribution, to the Government of Bihar, Department of Food & Civil Supplies Corporation, the appellants made payment of the supplies as per the rates prescribed therein. On the other hand, the respondents claim payment as per the rates in Schedule –IV above, being the statutory minimum support price fixed by the Govt. of Bihar, and published in the Gazette Notification. The appellants made payment as per the said inter-departmental communication dated

31.10.2005, leading to the present CWJC No.2860 of 2006, which has been allowed, and the appellants herein have been directed to make payment as per Schedule –IV. Hence the two appeals at the instance of the Corporation and the State of Bihar.

6. Learned counsel for the appellants has supported the writ petition. Learned counsel for the respondents has supported the order, and placed reliance on the following:- (a) Motipur Padampath Vs. State of Bihar (AIR 1979 SC 621) (b) Assistant Commissioner vs. Dharmendra Trading Company (AIR 1988 SC 1247) © The appellants cannot approbate and reprobate at the same time. Paragraph 9.7, page 844 Vol. 16 of Halsburry’s Laws of England, the 4th Edition. 4

7. We have perused the materials on record and considered the submissions of learned counsel for the parties. It appears to us that that the Levy Order has been issued in exercise of the powers conferred by Section 3 of the Act. Therefore, the Levy Order has statutory force. On a perusal of clause 3, read with Schedule-IV, the following features are clearly discernible:- (i) Clause 3 has introduced compulsory element for the millers to make supplies. (ii) The quantity is prescribed in clause 3. (iii) Price is prescribed as per Schedule –IV. In such a situation, we are in no doubt that the Levy Order has statutory force, is enforceable at the instance of the aggrieved millers, and they are entitled to the minimum support price prescribed by Schedule –IV. Therefore, the supplies made by these respondents so long the Levy Order was in force has to be paid.

8. There is another aspect raised by learned counsel for the appellants needs consideration. The Central Government by its aforesaid inter-departmental communication dated 31.10.2005, to the Government of Bihar, fixed minimum support price at rates lower than fixed by Schedule –IV. The same is not statutory in nature, lay hidden in the files of the Govt. of Bihar, was not notified in the Bihar Gazette and, therefore, is unenforceable. The State Government, therefore, issued the notification which was published in the Bihar Gazette on 30.1.2006, was in the nature of amendment to the aforesaid Schedule –IV, reducing the minimum support price and putting it at par with the rates indicated in the aforesaid inter-departmental communication dated 31.10.2005. We are of the view that the amendment of 30.1.2006, in accordance with law, and validly amended Schedule-IV. Therefore, the respondents shall be entitled to the rates prescribed by Schedule-IV until 29.1.2006, and the rates amended by the Gazette notification of 30.1.2006 shall operate prospectively.

9. In the result, we dismiss the appeals though we rest our judgment on different grounds. The respondents shall be entitled to interest @ 6% on the differential amount from the date(s) the amounts became due till the date of 5 payment. In the facts and circumstances of the case, there shall be no order as to costs. ( S K Katriar, J.) Birendra Prasad Verma, J. I agree. ( Birendra Prasad Verma, J.) Patna High Court, Patna The 2nd of July 2010 NAFR/mrl