ORDER Gopi Nath and M.P. Mehrotra, J. - This petition under Article 226 of the Constitution of India has been filed by a Rice Miller, who carries on business of milling the paddy and producing rice therefrom at Bisalpur in the district of Pilibhit. The business activities of the petitioner are regulated by the provisions of the U.P. Foodgrains Dealars' Licensing Order. 1976 and by the provisions of the U.P. Rice and Paddy Levy Order, 1981. The petitioner claims that he is a licensed miller as defined in sub-cl. (d) of Cl. 2 of the U.P. Rice and Paddy Levy Order, 1981. 2. It seems that the petitioner supplied levy rice to the State Government and submitted its bills to the Regional Accounts Officer, Bareilly, being the price of the levy rice so supplied to the State Government. The payment of the said bills has been with- held by the respondents on the ground that the petitioner did not supply the full quantity of rice in respect of the paddy which had been given to it by the State Government for hulling and converting the same into rice. 3. The second grievance of the petitioner is that the respondents are not issuing the release certificate to the petitioner in respect of the released share of the petitioner on which it has already given due levy to the State Government. The reason why the State Government is not issuing such certificate is again the same viz., the alleged failure of the petitioner to supply the full quantity of rice in respect of the paddy which had been given to the petitioner by the State Government for hulling and converting the same into rice. It seems that during the Kharif season 1981-82 the petitioner was supplied Government paddy for being hulled and converted into rice. Some dispute arose between the parties regarding the percentage of recovery of rice and also regarding the quality of rice supplied by the petitioner to the State Government in reference to the paddy supplied to it by the Government. The petitioner earlier filed Civil Misc. Writ Petition No. 397 of 1983, which is still pending. The said petition arose out of the dispute between the petitioner and the Government in regard to the custom hulling of the paddy which the petitioner did for the Government during the Kharif season 1981-82. 4. The petitioner earlier filed Civil Misc. Writ Petition No. 397 of 1983, which is still pending. The said petition arose out of the dispute between the petitioner and the Government in regard to the custom hulling of the paddy which the petitioner did for the Government during the Kharif season 1981-82. 4. It may be stated that a counter- affidavit was filed by Sri Amar Singh, Senior Marketing Inspector, Bisalpur, district Pilibhit, on behalf of respondents Nos. 1, 2 and 3. It has been alleged in the counter affidavit that there was an agreement between the parties. A true copy of the same is alleged to be Annexure C.A.1 to the counter-affidavit. 5. Learned counsel for the petitioner contends that even if for the sake of argument it be accepted that there was any failure on the part of the petitioner to supply the full quantity of rice in respect of the paddy which had been given to the petitioner by the State Government for hulling and converting the same into rice, still, the State Government and its officers were not entitled in law to withhold the payment of the petitioner's levy rice bills or to withhold the release certificates. For this contention, reliance has been placed upon certain provisions of the aforesaid the U.P. Rice and Paddy Levy Order, 1981. Cl. 3 of the said Order provides for the levy on rice produced or in stock of a licensed miller. A certain percentage of such rice had to be sold to the State Government at the notified price by every licensed miller. Such percentage varied in the case of different divisions and districts. Cl. 3(4) lays down as follows :- "3. Levy on rice produced or in stock x x x (4) No licensed miller or licensed dealer shall sell or otherwise dispose of or remove to any place other than his usual place of business or storage in a particular locality his stocks of rice or paddy unless he has sold the prescribed percentage to the State Government and has obtained a release certificate in token thereof in respect of stocks left in balance with him." 6. Cl. 5 provides for a similar levy on paddy. Cl. 5 provides for a similar levy on paddy. There is a provision for obtaining a release certificate in respect of the released paddy in the same manner as there is a provision for obtaining a release certificate in respect of the released rice under Cl. 3(4) quoted above. 7. Cl. 7 of the said Order lays down as under : "7. Price and specifications, for the paddy or rice delivered as levy, payment shall, be made at the notified price in accordance with the specifications to be notified by the State Government from time to time." 8. Cl. 8 provides for adjustment in notified price and settlement of quality disputes. 9. Cl. 9 of the Order lays down as under :- "9. Power to direct a rice mill to convert paddy into rice. The State Government may direct a licensed rice mill to convert any stocks of paddy into rice held by the State Government or its agencies on such terms and conditions as may be agreed upon." 10. Cl. 12 of the Order lays down as follows :- "12. Duty to comply with order - Every licensed miller or licensed dealer to whom an order or direction is issued under any power conferred by or under this order shall comply with such order or direction." 11. Learned counsel for the petitioner mainly placed reliance on Cl. 3(4) and Cl. 7 quoted above. On the basis of Cl. 3(4) it has been contended that the respondents are bound to issue the release certificate to the petitioner once it is shown that the latter has sold and supplied the prescribed percentage of rice (or paddy as the case may be) to the State Government. 12. On the basis of Cl. 7 it has been contended that the State Government is bound to make payment to the petitioner in respect of the levy rice which has been supplied to the State Government by the petitioner. Learned counsel further submitted that only the adjustment in notified prices could be done under Cl. 8 of the said Order and there was no authority in the State Government or its officers to make any deduction from the price payable to the petitioner under Cl. Learned counsel further submitted that only the adjustment in notified prices could be done under Cl. 8 of the said Order and there was no authority in the State Government or its officers to make any deduction from the price payable to the petitioner under Cl. 7 on the alleged ground that there had been a failure on the part of the petitioner to carry out its contractual obligation in regard to the custom hulling of paddy done by the petitioner for the State Government during the Kharif season 1981-82. 13. Learned Standing Counsel, however, contended that the State Government was justified in withholding both the price payable to the petitioner and the release certificate claimed by the petitioner if it could be shown that the petitioner had failed to perform its obligation under the agreement between the parties. Learned Standing Counsel placed reliance upon Cl. 9 of the said Order which has been quoted above. In our opinion, this contention of the learned Standing Counsel is not tenable. Cl. 9 itself shows that even though the State Government has a statutory authority to direct a rice miller to convert State Government's paddy into rice, still, the, terms and conditions on which the Government paddy will be converted into rice by the licensed rice miller will be `such terms and conditions as may be agreed upon'. The agreement itself containing the terms and conditions cannot be said to be a statutory contract merely because the State Government has a right under Cl. 9 to direct a rice mill to convert paddy into rice. It has been stated above that along with the counter-affidavit annexure C. A.1 has been annexed, which is said to be the agreement between the parties. In Cl. 11 of the said agreement there is a provision for arbitration in case of dispute, difference, or question touching or arising out of the agreement or the subject-matter thereof. In our view, if the State Government has any grievance that the licensed miller has failed to fulfill the terms and conditions of the said agreement between the parties, it is not open to the State Government to seek its redress in respect of such grievance by with- holding the release certificate under Cl. 3(4) or by withholding or by making any deduction from the price which is payable by the State Government to the petitioner under Cl. 3(4) or by withholding or by making any deduction from the price which is payable by the State Government to the petitioner under Cl. 7 of the said Order. 14. In this connection, a reference may be made to certain cases upon which reliance has been placed by the learned counsel for the petitioner. In the unreported decision of a Bench of this Court in Civil Misc. Writ Petn. No. 11831 of 1983 since reported in 1984 All LJ 272, Sri Ganesh Rice Mills v. State of U.P., it has been clearly laid down that no deduction can be made from the price payable to the petitioner under the U.P. Rice and Paddy Levy Order, which is not claimable under the provisions of the said Order. The Division Bench placed reliance on an earlier decision of this Court reported in 1979 All LJ 574, R. K. Industries, Kashipur v. State of U.P. 15. Learned counsel for the petitioner contended that the claim of the State Government against the petitioner in respect of the alleged shortage of supply of rice in reference to custom hulling of paddy during the Kharif season 1981-82 was in the nature of a claim for compensation or un-liquidated damages and until such claim was determined and quantified, the Government could not claim to recover any amount from the petitioner. It is really not necessary to go into this contention because the petition succeeds on the first ground itself which we have considered above namely, that as the aforesaid U.P. Rice and Paddy (Levy and Regulation of Trade) Order, 1981 stands, the State Government is bound to carry out the mandate which is contained in Cl. 3(4) and Cl. 7 thereof and it is not entitled to withhold either the release certificate or the price payable to the petitioner on the ground of the alleged default of the petitioner to make the full supply of rice in.respect of the paddy which had been given to the petitioner by the State Government for being hulled. 16. It may be stated that on this second contention the `learned counsel for the petitioner placed reliance on the following cases :- (i) Union of India v. Raman Iron Foundry, AIR 1974 SC 1265 (ii) Mirza laved Murtaza v. U.P. Financial Corpn., Kanpur, AIR 1983 All 234 . 17. 16. It may be stated that on this second contention the `learned counsel for the petitioner placed reliance on the following cases :- (i) Union of India v. Raman Iron Foundry, AIR 1974 SC 1265 (ii) Mirza laved Murtaza v. U.P. Financial Corpn., Kanpur, AIR 1983 All 234 . 17. However, as stated above, it is really not necessary for us to pursue this aspect of the matter as the petition succeeds on the first ground urged by the learned counsel for the petitioner. 18. Accordingly, we allow this petition and issue a direction to the respondents to pay to the petitioner the amount payable to it in respect of the levy rice sold by the petitioner to the State Government and such payment shall be made without making any deduction on account of the alleged shortage, in delivery of the custom hulled rice by the petitioner to the State Government. We further issue a direction that the petitioner shall be issued a release certificate in respect of the levy rice or levy paddy sold by it to the State Government. Such release certificate shall be issued without making any deduction or adjustment in respect of the alleged non- supply of custom hulled rice by the petitioner to the State Government. 19. In the circumstances, there will be no order as to costs.