Nafr High Court
Case Details
1 2025:CGHC:34665 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 3756 of 2025 1 - M/s. Aayush Traders (Mill Registration No. Ma704792) Raigarh Road, Tenganapali, Sarangarh Tahsil Sarangarh, District Sarangarh- Bilaigarh (C.G.) Through Its Proprietor- Jeewan Ram Ratre S/o Shri J.R. Ratre, Aged About 44 Years, R/o Ward No. 3 Subhash Chandra Bosh, Tenganapali P.O. Kotari, Sarangarh Tahsil Sarangarh, District Sarangarh- Bilaigarh (C.G.) ... Petitioner(s) versus 1 - Union Of India Through Secretary Department Of Food, Civil Supply And Consumer Protection, Krishi Bhawan, New Delhi 2 - State Of Chhattisgarh Through Secretary, Department Of Food, Civil Supply And Consumer Protection, Mahanadi Bhawan, Mantralaya, Atal Nagar, Nawa Raipur, District Raipur (C.G.) 3 - Managing Director C.G. State Marketing Federation Limited, Atal Nagar, Nawa Raipur, District Raipur (C.G.) 4 - Collector (Food Cell) District Sarangarh- Bilaigarh (C.G.) 5 - General Manager C.G. State Cooperative Marketing Federation Limited, Head Quarter Atal Nagar, Nawa Raipur, District Raipur (C.G.) SUGUNA DUBEY Digitally signed by SUGUNA DUBEY Date: 2025.07.23 11:39:43 +0530 2 6 - District Marketing Officer Office Of District Marketing Office, Chhattisgarh State Cooperative Marketing Federation Limited, District Sarangarh-Bilaigarh (C.G.) 7 - Branch Manager Central Bank Of India, Sarangarh, District Sarangarh-Bilaigarh (C.G.) ... Respondent(s) For Petitioner(s)
Legal Reasoning
: Shri Syed Afaque Hussain Rizvi, Advocate For Respondent No.1/UOI For Respondents No.3,5 &6 : : Shri Tushar Dhar Diwan, Advocate Shri Animesh Tiwari, Advocate (HON’BLE SHRI JUSTICE ARVIND KUMAR VERMA) Order on Board 21/07/2025 Challenge in the present petition is against the illegal action initiated by the respondent No.6 directing the respondent No.7 to proceed with the encashment of the petitioner’s Bank Guarantees/FDSs amounting to Rs. 3.00 Crores vide order dated 09.07.2025 (Annexure P/2) in lieu of custom milling of paddy in the Kharif Marketing year 2023-24. The petitioner, therefore by way of the instant petition is seeking for the following reliefs: 10.1. This Hon’ble Court may kindly be pleased to issue a Writ of Certiorari or any other appropriate Writ, order or direction, quashing the impugned letter dated 09.07.2025 (Annexure P/2) issued by the respondent No.6 to respondent No.7 directing the encashment of the petitioner’s Bank Guarantees/FDSs amounting to Rs. 3 crores. 10.2 This Hon’ble Court may kindly issue a Writ of Mandamus or any other appropriate Writ, order or direction, directing the Respondents particularly, respondent No.6 to decide the 3 pending representation dated 24.06.2025 (Annexure P/1) andto immediately reopen the online portal for the conversion/transfer of the remaining 8497.68 quintals of rice from FCI to Civil Supplies Corporation for the Kharif Marketing year 2023-24 and to allow the petitioner to deposit the same within a reasonable time frame to be fixed by this Hon’ble Court. 10.3. This Hon’ble Court may be pleased to pass any other and further orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice and equity.” 2. Brief facts of the case are that the petitioner is a registered Custom Miller operating in Chhattsigarh, who had entered into an agreement with the Chhattisgarh State Cooperative Marketing Federation Limited for the custom milling of paddy and as per the agreement for the purpose of lifting paddy, the petitioner had furnished Bank Guarantees/FDRs totaling to Rs. 3.00 Crores with its Bank, CBI, Sarangarh. By letter dated 02.05.2025, the petitioner was informed by the District Marketing Officer, Sarangarh-Bilaigarh (respondent No.6) that 8497.68 quintals of paddy from the Khariff Marketing Year 2023-24 which was initially meant for deposit with the FCL was required to be transferred to the Civil Supplies Corporation and the petitioner was directed to provide its consent or disagreement for this transfer by 10.05.2025. Subsequently, a letter dated 19.06.2025 was issued by the District Marketing Officer, Janjgir-Champa to the proprietor Madhu Enterprises, District Janjgir-Champa. In compliance with the directive and being desirous of fulfilling its contractual obligations and depositing the remaining rice,t he petitioner promptly communicated its consent 4 and willingness vide letter dated 24.06.2025 (Annexure P/1) to convert the remaining rice from FCI to Civil Supplies Corporation. 3. On 24.06.2025, the petitioner through its letter addressed to the Managing Director, CG State Cooperative Marketing Federation Limited, Raipur (Respondent No.3) had brought this impediment to their attention. The petitioner is seeking for restarting of the online portal to enable the transfer of the remaining 8497.68 quintals of rice. Despite of the prompt communication by the petitioner, without any prior notice or opportunity to address the issue of the closed portal, respondent No.6 vide impugned letter dated 09.07.2025 arbitrarily proceeded to initiate the encashment of the Petitioner’s Bank Guarantees/FDRs amounting to Rs.3.00 Crores. 4. Counsel for the petitioner submits that due to the arbitrary and wrongful approach of the respondents, the petitioner was prevented from depositing the rice due to the prolonged closure of the online portal. He submits that the respondents failed to provide an effective and operational mechanism to comply with the extended deadline of 30.06.2025 vide letter dated 19.,06.2025 issued by the DMO, Janjgir- Champa despite explicitly instructing the millers to utilize the online module for depositing the rice with the Civil Supplies Corporation. He submits that the respondents may be directed to decide the pending representation dated 24.06.2025 (Annexure P/1) and to open the online portal for transfer of the remaining 8497.68 quintals of rice from FCI to Civil Supplies Corporation for the Khariff Marketing Year 2023-24 and to allow the petitioner to deposit the same within a reasonable time frame. 5. Learned counsel for the respondents No. 3,5 & 6/MARKFED submits that the function of the MARKFED is purely as a facilitator and 5 intermediary in the execution of custom milling agreements. It operates strictly in accordance with the directions issued from time to time by the Central Government, the State Government and the Food Corporation of India (FCI). MARKFED has no independent authority to take policy decisions or deviate from binding directives. It is submitted that in case of any dispute, the petitioner may take recourse to the arbitration clause as provided in the agreement. 6. Heard learned counsel for the respective parties at length and perused the record with utmost circumspection. 10.Clause 5.1 of the agreement states as under: 5-1- vikktZu [email protected] dsUnz ls /kku mBkus gsrq i{k dzekad 02 }kjk dEI;wVj ds ek/;e ls fMyhojh vkMZj ¼Mh-vks-½ gsrq vkosnu djsxkA ftl i{k dzekad 01 dh vksj ls lacaf/kr jktLo ftys ds ftyk foi.ku vf/kdjh ds }kjk vuqeksfnr dj tkjh fd;k tkosxk] tks vgLrkarj.kh gksxkA foHkkxh; lkQVos;j vuqlkj miktZu [email protected] dsUnz }kjk Mh-vks- dk lR;kiu fd, tkus ds mijkar tkjh fd;s x;s fMyhojh ds vuqlkj gh i{k dzekad 02 dks lacaf/kr miktZu [email protected] dsUnz ls fMyhojh vkMZj tkjh gksus dh frfFk ls 10 fnol ds vUnj Mh-vks- esa mYysf[kr lEiw.kZ /kku dk ifjnku izkIr djus ds fy;s ck?; gSA ;fn i{k dzekad 02 }kjk 10 fnol ds Hkhrj /kku dk mBko ugha rks fu;ekuqlkj n.M vf/kjksifr fd;k tkosxkA fo’ks"k ifjfLFkfr;ksa es xq.k nks"k ds vk/kkj ij ijh{k.k mijkar i{k dzekad 02 dks vFkZn.M esa ----------- 11. Clause 14.1 of the agreement states as under: 14-1 bl lafonk djh fdlh Hkh dafMdk ls lacaf?kr fookn mRuUu gksus dh fLFkfr esa mHk;i{kksa }kjk fookn ds lkSgknZiw.kZ lek/kku ds fy, ftyk dysDVj dks vH;kosnu izLrqr fd;k tk ldsxkA ftyk dysDVj }kjk mDr vH;kosnu esa fd;k x;k fu.kZ; mHk;i{kksa dks ekU; gksxkA 12.Clause 15.1 and 15.2 of the agreement states as under: 15-1 vuqc/k dh dafMdk 14-1 ds varxZr lacaf/kr ftyk dysDVj }kjk fd;s x;s fu.kZ; ds fo:) mHk;i{kksa }kjk fookn ds fu.kZ; gsrq 60 fnol ds Hkhrj vkchVs’ku gsrq N-x- e/;L;re vf/kdj.k jk;iqj ¼N-x-½ ds le{k vkosnu izLrqr fd;k tk ldsxk] ftldk fu.kZ; vafre gksxk tks vHk;i{kksa dks ekU; gksxkA 15-2 vkchZVªs’ku esa fd;s x;s fu.kZ; ls ;fn mHk; i{k esa ls dksbZ vlarq"V gksrk gS] rks og vU; fof/kd izko/kkuksa dk mi;ksx dj 6 ldsxkA 7. The petitioner claims that he is ready and willing for depositing the remaining balance Custom milled rice from his end but the concerned respondent is not accepting the balance of CMR of 8497.68 Quintals of Kharif Year 2023-24 despite the fact that the last date for depositing the CMR of 2023-24 has been extended. 8. Hon’ble Supreme Court in the matter of Goyal Rice Industries Vs. State of Punjab (2016) SCC Online P&H 9853 is apt in underscoring the principle that disputes under such agreements are better resolved through arbitration and has held as under: “9. It is argued by learned counsel for the respondents that the petitioners are claiming paddy out of release order from outside his district. It is further argued that the petitioner has a right of Arbitration as per the Policy, which may be invoked in order to decide the interpretation of the provisions of the Policy of KMS 2015-16 on the basis of which the petitioners may set up their claim for the alleged losses, if any. 10.1 I have heard learned counsel for the parties in detail and also perused the available record. Once, it is not disputed by the respondents that the petitioner has right of seeking arbitration, it would be in the interest of parties to avail the remedy, which is so provided in clause 19 of Custom Milling Policy of 2015-16, which read as under: “All the disputes and differences arising out of or in any manner touching or concerning the agreement whatsoever shall be reered to the sole arbitration of the Managing Director of the concerned agency or any person appointed by him in this behalf. There will be no objection to any such appointment that the person appointed is or was an employee of the Food and Supplies Department, Punjab or the concerned agency or that he had to deal with the matter to which the contract relates and that in the course of his duties such an employee of the Food and Supplies 7 Department, Punjab or the concerned agency had expressed views on all or any of the matter in dispute or difference. The award of such arbitration shall be final and binding on the parties to this contract. It is a term of this contract that in the event of the Arbitrator being transferred or vacating his office or being unable to act for any reason, the Managing Director concerned at the time of such transfer, vacation of office, death or inability shall appoint another person to act as Arbitrator. Such a person shall be entitled to proceed with reference from and the state where it was left by his predecessor. Provided that any demand for arbitration in respect of any claim(s)/dispute between both the parties, under the contract shall be in writing and made within one year of the date of completion or expiry of the period of contract. If the demand is not made within the period, the claim(s) of the Miller shall be deemed to have been waived off and the agency shall be released of all liabilities under the contract in respect of these claims. The cost for and in connection with arbitration shall be the discretion of the arbitrator who may make suitable orders in his award. Subject as aforesaid, the Arbitration and Conciliation Act, 1996 or any statutory re-enactment on modifications thereof shall apply to the arbitration provided under this clause. However, the cases of fraud, theft or misappropriation etc. on the part of the miller are not covered under this clause and in such cases legal proceedings as deemed fit shall be initiated by the agency against the miller as well as against the sureties.” 11. In view of the aforesaid, the parties are relegated to the remedy of arbitration and hence the present petitions are hereby disposed of accordingly.” 9. From the above decision in similar circumstances it has been held that when contractual remedy by way of arbitration is available and the dispute pertains to interpretation of policy or contract terms, parties 8 must avail such remedy rather than invoking the writ jurisdiction. It is ordered accordingly.
Decision
10. In view of the above, this Court does not find any good ground to grant the reliefs as prayed for in this writ petition and the same does not call for interference in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India. 11. Accordingly, the present writ petition is disposed of with the aforesaid observation. Sd/- (Arvind Kumar Verma) Judge