Government of India v. Nataraj Raw and Para Boiled Rice Mill
2002-01-21
A.R.LAKSHMANAN, Y.V.NARAYANA
body2002
DigiLaw.ai
AR. LAKSHMANAN, C. J. ( 1 ) THIS writ appeal is directed against a judgment dated 24/08/2001 passed by a learned single Judge of this Court in WP No. 26615 of 1998 allowing the writ petition. ( 2 ) THE respondents in the writ petition are the appellants herein. The writ petition was filed seeking a Writ of Mandamus declaring the action of the appellants-respondents in disallowing the price stipulated for Grade-A rice in respect of the levy rice supplied by the writ petitioners for the period from 18-3-1998 to 31-3-1998 basing on the instructions issued by the 2nd respondent-appellant in his letter dated 9-3-1998 as arbitrary and illegal and for issuance of a consequential direction directing the respondents- appellants to fix the price of Grade-A for all the consignments of rice which were supplied by the writ petitioners for the period from 18-3-1998 to 31-3-1998. ( 3 ) THE learned single Judge, as already stated by us above, has allowed the writ petition and directed the respondents- appellants to pay the writ petitioners the differential price between A-Grade and Common Grade of rice in respect of the levy rice supplied by them for the period from 18-3-1998 to 1-4-1998 as confirmed by the respondents-appellants. He also gave a further direction that the differential amount shall be paid within three months from the date of receipt of the impugned judgment. Aggrieved by the said judgment, the present writ appeal is preferred. ( 4 ) FOR the purpose of disposing of this appeal we feel it necessary to state briefly a few facts of the matter which are as follows: The writ petitioners were engaged in the business of rice mill. In the course of their business, they would be converting paddy into rice of various kinds. The Government of India, the first respondent-appellant would be fixing the price of paddy and rice insofar as the levy rice is concerned for every agricultural year that commences from October and continues upto September of the succeeding year. While so, the second respondent-appellant issued Circular dated 16-9-1997 by which categorisation of rice into common and grade-A varieties is prescribed. The Food Corporation of India (for short FCI), the third respondent in the writ petition is the procuring agent as far as the levy rice is concerned.
While so, the second respondent-appellant issued Circular dated 16-9-1997 by which categorisation of rice into common and grade-A varieties is prescribed. The Food Corporation of India (for short FCI), the third respondent in the writ petition is the procuring agent as far as the levy rice is concerned. All the writ petitioners would have to supply specified quantity of levy rice to the FCI before they can proceed to trade with the balance of the rice produced by them. Thus, by the operation of law, the writ petitioners are under obligation to supply the prescribed quantity of rice as levy rice to the procuring agent viz. , the FCI. ( 5 ) BY Circular dated 16-9-1997, the second respondent-appellant had stipulated that in order to get over the difficulties due to change in the length/breadth (L/b ratio because of climatic) factors or due to genetic factors over a period of few years, a tolerance limit would be allowed upto 40% grains having L/b ratio upto 2. 4 for acceptance under Grade-A Group. The effect of the said Circular is that a rice miller who is supplying levy rice to the F. C. I, would be entitled to receive the price on the basis of categorisation, viz. , Grade-A or common. The cost difference between Common and Grade-A rice is to the tune of Rs. 50. 00 per quintal or Rs. 500. 00 per metric tone approximately. Identification as to whether the rice is Grade-A or Common has to be made while giving scope to the tolerance limit of 40% in the L/b ratio. The State Government had imposed a levy of about 4,01,400 metric tonnes for the agricultural year 1997-98 for Krishna District and the rice millers all over the District would have to supply the levy rice accordingly to meet the said target. If the variety of rice supplied is of Grade-A, the rice millers would be entitled to the price of Grade-A rice as notified by the Government of India. FCI has been accepting levy rice from the rice millers giving the tolerance limit of 40% as regards L/b ratio from the date of commencement of the agricultural year i. e. , 1-10-1997 upto 18. 3. 1998 basing on the Circular issued by the second respondent dated 16-9-1-1997.
FCI has been accepting levy rice from the rice millers giving the tolerance limit of 40% as regards L/b ratio from the date of commencement of the agricultural year i. e. , 1-10-1997 upto 18. 3. 1998 basing on the Circular issued by the second respondent dated 16-9-1-1997. ( 6 ) WHILE so, the second respondent-appellant had issued a classificatory Circular dated 9-3-1998 addressed to the third respondent-FCI stating that tolerance limit of 40% grains having L/b ratio upto 2. 4 in classification of paddy/rice varieties shall not be taken into consideration for determination of groups of paddy/rice at the time of procurement. According to the said communication, the allowance has to be given only for determination of group of pure and authenticated samples. The effect of the letter of the 2nd respondent-appellant dated 9-3-3998 is that the tolerance limit of 40% grains having L/b ratio upto 2. 4 could not be allowed at the time of procurement. ( 7 ) QUESTIONING the validity of the change of policy contained in the letter dated 9-3-1998, the Millers Association had filed WP No. 7805 of 1998 in this Court, which was admitted on 30-3-1998. The said writ petition was however, dismissed as withdrawn in view of the instructions issued by the 3rd respondent in its communication dated 1-4-1998 keeping the contents of letter dated 9-3-1998 in abeyance. ( 8 ) THUS due to the fact that the Ministry had passed orders keeping the contents of the letter dated 9-3-1998 in abeyance and also due to the fact that this Court has suspended the contents of the said letter dated 9-3-1998, the FCI has again commenced accepting rice with the tolerance limit of 40% grains having L/b ratio upto 2. 4 treating the same as Grade-A variety. However, for the period from 18-3-1998 to 31-3-1998, the FCI did not allow the tolerance limit and hence, the writ petitioners were compelled to supply the levy rice of Grade-A variety as common variety during that period and that they were denied the price of Grade-A variety rice though the rice actually supplied by them was of Grade-A variety. ( 9 ) IN this context, it is relevant to note that the Government of India has issued another Circular dated 9-1-1998 providing some relaxation in specification regarding procurement of paddy/rice affected by rains for the Kharif season 1997-98.
( 9 ) IN this context, it is relevant to note that the Government of India has issued another Circular dated 9-1-1998 providing some relaxation in specification regarding procurement of paddy/rice affected by rains for the Kharif season 1997-98. Under the said Circular, damaged/slightly damaged, discoloured and broken grains were given certain relaxation for being treated as Grade-A or Common varieties. However, the relaxations were made operative only upto 31-3-1998. The writ petitioners were having rain affected rice which could have been supplied to the FCI without any monetary loss subject to the relaxations provided but it should be done before the specified dated i. e. , 31-3-1998. As the FCI avoided to accept Grade-A rice in view of the letter of the 2nd respondent dated 9-3-1998, and as the rain affected/discoloured, damaged grains were to be supplied before 31-3-1998 only, the writ petitioners, in order to avoid higher loss were compelled to supply Grade-A rice. But the FCI has accepted the same as Common variety rice in view of the clarification issued by the second respondent on 9-3-1998 by which the tolerance limit of 40% was withdrawn. Along with the writ petition, the writ petitioners had filed a statement showing the quantum of Grade-A rice which was supplied by them to the fifth respondent in the writ petition for the period from 18-3-1998 to 31-3-1998 which was accepted as Common variety. ( 10 ) SHRI Vedula Venkata Ramana, learned Counsel for the writ petitioners vehemently contends that at the time of receipt of rice, the FCI maintains samples of rice supplied under each consignment and if those samples are analysed, it would be established that the rice supplied by the writ petitioners was actually Grade-A variety rice but it was accepted as Common variety rice in view of the letter of the 2nd respondent dated 9-3-1998. Realising the situation, the second respondent had issued a classificatory order keeping the earlier letter dated 9-3-1998 in abeyance. As this Court has also suspended the operation and effect of the letter dated 9-3-1998, learned Counsel further submits, that it would be highly inequitable to deny the writ petitioners the price of Grade-A rice.
Realising the situation, the second respondent had issued a classificatory order keeping the earlier letter dated 9-3-1998 in abeyance. As this Court has also suspended the operation and effect of the letter dated 9-3-1998, learned Counsel further submits, that it would be highly inequitable to deny the writ petitioners the price of Grade-A rice. It is categorically mentioned in the affidavit filed along with the writ petition that the FCI maintains samples of rice for each consignment and the samples relating to levy rice received for the period from 18-3-1998 to 31-3-1998, if analysed, would disclose that the rice actually supplied by the writ petitioners is entitled to be categorised as Grade-A and hence, the writ petitioners are entitled to the differential cost. It is also contended that unless the samples relating to these consignments are kept in Court custody, the writ petitioners would suffer irreparable loss. ( 11 ) THE respondent-appellant No. 1 herein, Government of India, filed a counter-affidavit through the 2nd appellant-Joint Commissioner denying the allegations contained in the writ petition. Our attention was drawn to the averments made in the counter-affidavit and particularly to those that were made at paragraph 6. It is stated therein that:"the effect of the Circular is also not properly projected by the petitioner. It is obvious that the 40% discount is given only to see that for more than 40% of rice given by the millers is of the fine variety thus de horse the fact that about 40% of quantity is Common variety. The said quantity of rice would be treated as fine variety. Whether, however, the entire quantities admittedly of common variety either prior to or consequent upon the rectification, the said benefit is not available and hence, where the L/b Ratio is of below 2. 4 the question of giving 40% does not arise. It is also necessary in this context to reiterate that as per the position reported by the FCI, a quantity of 6,983 metric tonnes of Common rice was accepted in district from 18-3-1998 to 31-3-1998 and the said stock has been disposed of as Common only; the pensioners have offered a stock as "common" only and FCI accepted the stock as "common". It is not that petitioners had offered Grade-A rice and FCI accepted it as Common downgrading.
It is not that petitioners had offered Grade-A rice and FCI accepted it as Common downgrading. The contention that the cost difference between common and "grade-A "rice is to the tune of Rs. 50. 00 per quintal i. e. , Rs. 500. 00per MT will bear no relevance to the case where the rice given was admittedly was where the LB Ratio was 2. 4. As such, the 40% tolerance limit would not apply to the supplied quantity. " ( 12 ) IT is pertinent to note here the admission made by the respondents-appellants in paragraph 6 of the counter-affidavit, which reads thus:"it is true that if rice supplied is "grade-A" i. e. , above 2. 4 L/b Ratio then the rice millers may be entitled to 40% cushion in furtherance of the Circular dated 16-9-1997. As such, the hypothesis does not apply to the facts of the present case where the rice quantity given by all the petitioners was less than 2. 4 L/b Ratio. " ( 13 ) OUR attention was also drawn to the counter-affidavit filed by the FCI through its Regional Manager and in particular, the averments made in paragraphs 5 and 6 of the counter-affidavit which read thus:5. "i submit that the Association of Krishna District Rice Millers have filed WP No. 7805 of 1998 before this Honourable Court questioning the clarification issued by the Government of India dated 9-3-1998. The Government of India on its own issued instructions keeping the clarification orders in abeyance vide orders dated 1-4-1998. In view of the abeyance orders issued by the Government of India, tolerance limit up to 40% grains having L/b Ratio up to 2. 4 for accepting under Grade-A has been continued as per the earlier letter of Government of India dated 16-9-1997 with effect from 1-4-1998. During the period from 18-3-1998 to 31-3-1998, the FCI has not allowed the 40% allowance while purchasing levy rice. FCI has not forced any miller/supplier to deliver rice under common grade during this period. 6. I submit that a total quantity of 6,983 metric tonnes of common rice was accepted in the district by FCI from 18-3-1998 to 31-3-1998, out of this 4,887 metric tonnes common rice was delivered by the petitioners and the entire quantity was disposed as common only.
6. I submit that a total quantity of 6,983 metric tonnes of common rice was accepted in the district by FCI from 18-3-1998 to 31-3-1998, out of this 4,887 metric tonnes common rice was delivered by the petitioners and the entire quantity was disposed as common only. As seen from the acceptance note signed by the party, they have offered the stocks as common and FCI accepted the same as common. The samples also have been discarded since the samples have to be preserved only 3 months, as per the instructions. In the absence of any instructions/directions, the samples have already been discarded and hence there is no possibility of re-examining the samples. " ( 14 ) IT is thus seen from the counter-affidavit filed by the FCI that in view of the abeyance order issued by the Government, tolerance limit upto 40% grains having L/b Ratio upto 2. 4 for accepting under Grade-A has been continued as per the earlier letter of the Government of India dated 16-9-1997 with effete from 1-4-1998 and for the period from 18-3-1998 to 31-3-1998, the FCI had not allowed the 40% allowance white purchasing levy rice. It is strenuously contended in this connection by Shri C. V. Ramulu, the learned Standing Counsel for the Central Government that the respondents-writ petitioners themselves have supplied the entire quantity as common rice and the said quantity was disposed of as common only and as could be seen from the acceptance note signed by the party, they have offered the stocks as common and FCI accepted the same as common and the samples have also been destroyed since the same have to be preserved only for 3 months. ( 15 ) IT is the specific case of the writ petitioners that rice supplied by them is that of Grade-A variety. There is also not dispute in regard to the quantity supplied during the period in question. As already noticed, it has been clearly stated in the affidavit filed in support of the writ petition that the FCI maintains samples of rice for each consignment and if the samples relating to the receipt of levy rice for the period from 18-3-1998 to 31-3-1998 are analysed it would disclose that the variety of rice actually supplied by the writ petitioners is entitled to be categorised as Grade-A and hence, the writ petitioners are entitled to the differential cost.
It is also contended on behalf of the writ petitioners that unless samples relating to these consignments are kept in Court s custody, the writ petitioners would suffer irreparable loss. But in the counter-affidavit filed by the FCI through its Regional Manager, it is categorically stated that the samples could be preserved only for 3 months and as there were no instructions/ directions as regards preserving the samples, the same have already been destroyed and hence there is no possibility of re-examining the samples. ( 16 ) MR. Vedula Venkata Ramana, learned Counsel for the respondents-writ petitioners vehemently contended that the action of the appellants is per se illegal and that they cannot change the policy during the middle of the agricultural year and that too for a very small fraction of 10 or 12 days and that even the change of the policy was not spelt out. ( 17 ) MR. C. K Ramulu, learned Central Government Standing Counsel on the other hand submitted that it is always open for the Government to change the policy and such a policy is immune from attack. We are unable to agree with the submission made by the learned Counsel Shri C. V. Ramulu. As per the Circular dated 16-9-1997, certain benefits were conferred on the rice millers keeping in view the genetic conditions and the climatic changes from region to region and a cushioning was provided in this regard and for removing such a cushioning no explanation was given either in the Circular dated 9-3-1998 or letter dated 1-4-1998, except using the phrase "variety of reasons". The writ petitioners, therefore, were subjected to less payment for the very same rice which they had supplied from October, 1997 to 17-3-1998 and from 1-4-1998 onwards. We have already noticed the clarification issued in letter dated 9-3-1998 contents of which were kept in abeyance by order dated 1-4-1998. In our considered view, the effect of abeyance comes into operation with effect from 9-3-1998 and it cannot be applied prospectively. Moreover, when once the policy was issued, such a policy cannot be kept in abeyance for a short period of only 10 days. No plausible reasons were assigned as to why the Circular was kept in abeyance. Even the counter-affidavits are silent as to what are the reasons that prompted the Government of India for keeping the policy in abeyance.
Moreover, when once the policy was issued, such a policy cannot be kept in abeyance for a short period of only 10 days. No plausible reasons were assigned as to why the Circular was kept in abeyance. Even the counter-affidavits are silent as to what are the reasons that prompted the Government of India for keeping the policy in abeyance. Courts normally do not entertain the petitions wherein policy of the Government is challenged but if the policy affects the fundamental rights of citizens and offends Article 14, we are of the considered opinion that this Court certainly interferes with such innocuous action. Therefore, we have no hesitation to reject the contention of Mr. C. V. Ramulu, the Central Government Standing Counsel that that writ petitioners are not entitled to the benefit of price of Grade-A in respect of the levy rice supplied by them. As it is admitted by the FCI, that a total quantity of 4,887 metric tonnes of rice was supplied but that was treated as Common rice instead of Grade-A rice in view of the letter dated 9-3-1998, it cannot also be said that the matter involves disputed questions of fact requiring adduction of further evidence in consideration thereof. ( 18 ) IT is well settled principle of law that the action of the State should not be arbitrary and that it should be fair and reasonable. The yardstick for categorisation office in a particular year with the tolerance limit should have to be uniform at least for the agricultural year in question. Therefore, the letter of the 2nd respondent dated 9-3-1998 had resulted in a very anomalous situation causing serious hardship to the writ petitioners as well as farmers since it has categorised Grade-A rice into Common variety of rice without any principle behind it. When the second respondent-appellant has realised the consequence of the letter dated 9-3-1998, by orders dated 1-4-1998 the 2nd respondent has kept the contents of the same in abeyance and, therefore, the rice which was supplied after 1-4-1998 was treated as Grade-A. In other words, for the period from 18-3-1998 to 31-3-1998 due to the arbitrary action of the Government, Grade-A rice was accepted and treated as Common variety of rice.
We are, therefore of the opinion that there is no justification for disallowing the price stipulated for Grade-A rice in respect of the levy rice supplied by the writ petitioners for the period from 18-3-1998 to 31-3-1998. ( 19 ) FOR the reasons stated above, we do not see any merit in the writ appeal. It is accordingly dismissed. The impugned judgment passed by the learned single Judge is confirmed. There shall be no order as to costs.