Judgment 1. By this judgment we would dispose of Civil Writ Petition Nos. 13447, 18696, 19432, 19424, 18692, 13224, 18092 of 2003, 4327 of 2004, 19612, 14212 of 2003, 2351 of 2004, 13863, 19354, 19357, 18888, 14237, 18697, 18693, 19422, 18128, 18889, 13237, 14250, 19760 of 2003, 2684 of 2004, 19806, 18703, 18695, 18114, 18535, 18369, 19424, 18394, 19355, 19610-13, 18717, 13851, 13469, 13299, 18723, 18956 of 2003, 2780 of 2004, 18722, 18780, 18937, 19585, 19351, 19352, 19353, 19056, 14235, 19345, 17480, 18129 of 2003, 1524 of 2004, 19876 of 2003, 2786 of 2004, 17377 of 2003, 3739 of 2004, 19074, 17414 of 2003, 4000, 2319 of 2004, 19356 of 2003, 18073 and 18376 of 2003, as common question of law and facts arise for consideration of the Court in all these petitions. 2. The controversy in all these petitions in a very narrow compass. In order to appreciate the controversy in its correct perspective, reference to basic facts would be necessary. (For the purpose of brevity we would be referring to the facts of Civil Writ Petition No. 12682 of 2003 and C.W.P. No. 13447 of 2003). The petitioners are running their Rice Mills and most of them in District Ferozepur. Their liabilities and obligations are controlled by the Punjab Rice Procure-ment (Levy) Order, 1983 (for short "Order"). The petitioners delivered the levy rice in terms of the Order at the central pool to the Food Corporation of India. The total quantity delivered by the petitioner in Amrik Singhs case was 28,427.50 quintals while in the case of Modern Food it was 21,432 quintals, respectively, valued at Rs. 2,99,08030.00 and 22,20,59,531. The respondent-State received the payments from Food Corporation of India, Fazilka well in time but utilised the same for more than two months or so causing financial loss to the petitioners. Earlier a writ petition was filed in this Court being Civil Writ Petition No. 6515 of 2002 M/s. Atwal Rice and General Mills, Mallian Road, Kartarpur V/s. State of Punjab and others. During the pendency of the said petition, amounts were released by the respondents but did not release the interest due on the delayed payments which were illegally retained by the respondents. According to the petitioners, they are entitled to recover an amount of Rs. 6,09,156-00 on account of interest and Rs. During the pendency of the said petition, amounts were released by the respondents but did not release the interest due on the delayed payments which were illegally retained by the respondents. According to the petitioners, they are entitled to recover an amount of Rs. 6,09,156-00 on account of interest and Rs. 12,88,000/- respectively on account of payments illegally detained by the respondents-Food Corporation of India, in excess of 24 hours. According to the petitioners the Court while deciding the Civil Writ Petition No. 6515 of 2002 awarded 16% interest per annum for the period of delay in payments later on the said rate of interest was reduced to 12% per annum in other writ petitions. Special Leave Petition filed by the State was dismissed by the Hon ble Supreme Court of India on February 22, 2003. Thus the petitioners in these writ petitions under Article 226/227 of the Constitution of India pray for the issuance of a writ of mandamus directing the respondents to release the amount of Rs. 6,09,156-00, on account of interest on delayed payment of levy rice for the year 2001-02. 3. Upon notice written statement has been filed on behalf of the respondents. The facts are really not in controversy. It is stated that as per the procedure, after delivery of the rice to the Food Corporation of India, the millers submit their levy bills through the concerned Inspector, Food and Supplies for payment. Thereafter, the bill is forwarded to the District Manager, Food Corporation of India for arranging its payments. When the payment is received from the Food Corporation of India, the same is deposited immediately in the Government treasury by the respondent-department. Thereafter on receiving letter of credit from the District Treasury Officer due payment is made to the firm. Thus, it is stated that the respondents have not cmmitted any delay in making the payments to the petitioners. The respondents further claimed that the various departments are involved and as such there is no intentional delay on the part of any of the departments and thus the petitions filed by the petitioners should be dismissed as they are not entitled to claim any interest on the alleged delayed payment. 4. The respondents further claimed that the various departments are involved and as such there is no intentional delay on the part of any of the departments and thus the petitions filed by the petitioners should be dismissed as they are not entitled to claim any interest on the alleged delayed payment. 4. At this stage we may also notice that during the course of arguments and as per the averments made in some of the petitions, the money deposited by the Food Corporation of India had to be utilized keeping in view the financial status of the State for other urgent need. As such, the delay that has occurred in payment was inevitable and for good reasons. Before we proceed to engage ourselves in discussing the merits of the pleas raised in some elaboration, it would be appropriate to refer to the decisions of this Court on this subject. A Division Bench of this Court in Civil Writ Petition No. 2299 of 2002 and Writ Petition No. 6515 of 2002 had allowed similar writ petitions and directed the respondents to pay interest at the rate of 15 per cent per annum for the period of delay during which the amount received through Food Corporation of India had not been released to the petitioners. However, in subsequent judgment, the Court awarded 12 per cent interest on the delayed payments for the delayed period. In Civil Writ Petition No. 7392 of 2002 the State had filed an application for review of the order dated July 22, 2003 passed in M/s. K. V. Rice Mills Pvt. Limited. The State inter alia had also raised the plea that the amount which has now been paid by the Food Corporation of India, was used for disbursement of salaries and unavoidable expenses of the State and as such the same should not be treated as delayed payment and the petitions should be dismissed. However, the Bench while rejecting the application for review vide its order dated 30-1-2004 held as under :- "We have heard Shri R. K. Joshi, learned Additional Advocate General, Punjab and carefully gone through the entire record. In our opinion, the order of which review has been sought does not suffer from any error apparent requiring interference under Order 47, Rule 1 of the Code of Civil Procedure. In our opinion, the order of which review has been sought does not suffer from any error apparent requiring interference under Order 47, Rule 1 of the Code of Civil Procedure. The justification offered by the applicant for delay in releasing the amount received from the Corporation is wholly unsatisfactory and unacceptable. Admittedly, the amount received from the Corporation was the price of the rice supplied by the writ petitioner to the former in accordance with the provisions of the Punjab Rice Procurement (Levy) Order, 1983 (for short, the Levy Order). The State Government had received the amount from the Corporation on as a trustee and was required to immediately transfer the same to the rice millers in terms of Clause 7(3) of the Levy Order. It had no right to utilise the amount for discharging its other liabilities. However, the fact of the matter is that the State Government did utilise the amount received from the Corporation for meeting its other liabilities. In our opinion, by doing so, the State Government had temporarily misappropriated the amount received from the Corporation. Therefore, it cannot be heard to make a grievance that the interest awarded by the Court is excessive." 5 Besides that there are no specific averments to support this bald submission on behalf of the State that it was essential for the State to disburse the payments to the millers within the stipulated time and in any case within a reasonable time from the date of receipt of the payments in terms of Order 1983. The State of Punjab was holding the money as the trustee for the millers and had no right under the law to utilise such funds for its own benefits. 6. The respondents had even filed a Special Leave Petition before the Hon ble Apex Court against the decision of this Court in Civil Writ Petition No. 6515 of 2002 which was dismissed by the Supreme Court vide order dated 21-2-2003, thus, attaching finality to the orders passed by this Court in different cases. Clause 7 of the Punjab Rice Procurement (Levy) Order 1983 deals with the procurement and payments of the levy rice. The licensed miller is supposed to discharge his obligation and deliver the milled rice to the authorised person at the time and place so determined by the Director or a person duly authorised by him. Clause 7 of the Punjab Rice Procurement (Levy) Order 1983 deals with the procurement and payments of the levy rice. The licensed miller is supposed to discharge his obligation and deliver the milled rice to the authorised person at the time and place so determined by the Director or a person duly authorised by him. Under Clause 7(3) of the said Ordinance full payment shall be made within 24 hours of the delivery of the rice after making such adjustments in the total price and the rice assessed on the basis of analysis as provided in sub-clause (4) of the said Clause 7 of the Order. There is no dispute to the fact that in compliance of the provisions of Clause 7 of the Order, the petitioners had delivered the rice and had earned payments of the delivered rice in terms of Clause 7(3) of the Order. The payments were admittedly released by FCI to the Govt. of Punjab. The delay in payments has occurred with the State Govt. In the written statement filed before us hardly no reason much less substantial cause has been shown for such delay in making the payments which the petitioners had a right to receive from the Govt. as afore-noticed. The Govt. in terms of the order has imposed certain obligations upon the licensed millers on the one hand and on the other on itself or its instrumentality. It is legitimate expectancy on the part of the millers that Govt. shall pay to them in terms of the order and without default. Withholding of amounts legally payable to the millers would an arbitrary use of right of the State and can hardly be permissible even on commercial price. Action of the State to avoid to discharge its obligation in terms of the contract would not be an act in consonance with the obligation of the State. 7. In exercise of powers conferred under Clauses D, F, H. I and J of the Act, 1955, the Govt. of India through Ministry of Agriculture in the name of President has issued Punjab Rice Procurement (Levy) Order, 1983. Clause 7 of the Order gets a recognisation of legislation. The liability to pay on the part of the State thus does not remain to be commercial obligation simplicitor but also emerges from the law of the land. of India through Ministry of Agriculture in the name of President has issued Punjab Rice Procurement (Levy) Order, 1983. Clause 7 of the Order gets a recognisation of legislation. The liability to pay on the part of the State thus does not remain to be commercial obligation simplicitor but also emerges from the law of the land. The action of the State in such transactions ought to be founded on rectitual principle rather sophistry. The State action must be fair. The power vested in the executive authority should essentially be acted bona fidely and for the purpose for which they are conferred. No provision permits mala fide use of power and its misuse for in bad faith Express Newspapers Pvt. Ltd. V/s. Union of India, AIR 1986 SC 872. At this stage it may be appropriate to refer to the decision of the Supreme Court in the case of Lucknow Development Authority V/s. M. K. Gupta, (1993 (6) JT (SC) 307 : (AIR 1994 SC 787) where the Court held as under Para 8; of AIR:- "No functionary in exercise of statutory power can claim immunity, except to the extent protected by the statute itself. Public authorities acting in violation of constitutional or statutory provisions oppressively are accountable for their behaviour before authorities created under the statute like the Commission or the Courts entrusted with responsibility of maintaining the rule of law. Each hierarchy in the Act is empowered to entertain a complaint by the consumer for value of the goods or services and compensation." In discharging this duty honestly and bona fide loss may accrue to any person. And he may claim compensation which may in circumstances be payable. But where the duty is performed capriciously or the exercise of power results in harassment and agony then the responsibility to pay the loss determined should be whose? In a modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention linger on and the man in the street is made to run from one end to other with no result. The culture of window clearance appears to be totally dead. In a modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention linger on and the man in the street is made to run from one end to other with no result. The culture of window clearance appears to be totally dead. Even in ordinary matters a common man who has neither the political backing nor the financial strength to match the inaction in public oriented departments gets frustrated and it erodes the credibility in the system. Public administration, no doubt involves a vast amount of administrative discretion which shields the action of administrative authority." 8 Still in another case of Consolidated Coffee Limited V/s. The Coffee Board, 1995 (1) JT (SC) 1, Supreme Court of India directed payment of interest to the growers of the coffee as the authorities had procured the coffee from the growers but did not pay the price to the registered owners on the pretext of deduction of purchase tax. The Court held as under :- "Accordingly the appeals are disposed of with a direction to the respondent-Board to perform its statutory duty in respect of payment for the coffee delivered to them by the registered owners in accordance with the provisions of the Act and to make payment to the growers at a rate which in the facts and circumstances prevailing in any particular year can be held to be just and reasonable and which should cover cost of production of the concerned coffee and reasonable percentage of profit thereon. In the facts and circumstances of the case, there shall be no orders as to costs." 9 Reference can also be made to the judgment of Rabindra Nath Ghosal V/s. University of Calcutta, 2002 (7) JT (SC) 490 : AIR 2002 SC 3560. 10. The above enunciated principle of law clearly indicate the responsibility of the State to act fairly in all fields including commercial. Wider the field of its operation greater would be the obligations to act in consonance with the provisions of the statute as well as the terms of the contract. There is no dispute before us in the present cases that the millers have supplied the rice milled in terms of Clause 3 of the Order to the destination and authorities stipulated. There is no dispute before us in the present cases that the millers have supplied the rice milled in terms of Clause 3 of the Order to the destination and authorities stipulated. Their right to receive payments in that regard is the legal protected right. The failure on the part of the State to discharge such an obligation would give rise to avoidable litigation. The relationship of the parties does not exclusively fall in the realm of contract but also in the field of executive action. The Govt. has contracted with the millers and again are issued licences in terms of the rules and regulations framed by the State to carry out the object of the Essential Commodities Act. The statutory powers carry corresponding obligation with them. Thus rule of law regulates the operation of different departments and instrumentalities of Govt. functioning. The judgment of this Court where interest was allowed for delayed payments has been upheld by the Supreme Court. However, we must consider whether awarding of 12% interest would be a justified direction in the facts and circumstances of the case. It is a matter of common knowledge that there has been considerable fall in the rate of interest payable by the financial institutions including the Nationalised Institutions even on fixed deposit receipts. The rate of interest which the Court awards are normally comparable to the rate of interest payable on investment by the Banks to the Financial institutions. The petitioners obviously cannot claim exorbitant rate of interest on the amounts payable to them which in any case as alleged was utilised. The Court must balance the equities between the claim of the petitioners and the liability of the respondents to pay interest. Award of such interest is not based upon the principle of enrichment of a kind of compensation which is awarded to the petitioners against the State functionaries for their delayed action particularly unsupported by any plausible cause. Keeping in view the current bank rates, the facts and circumstances of the present case, we are of the considered view that the petitioners could be awarded interest for the period in excess of one week from the date the amounts were paid by the Food Corporation of India to the State of Punjab, till that payments were actually made to the petitioners, at the simple rate of 6 per cent per annum. We make it clear that this payment of interest shall be disbursed to the petitioners within one month from the date of pronouncement of the order and without fail. 11. Inthe above referred cases the Court had directed the departments to take steps including recovering amounts from the erring officers/officials. In support of such view reference can also be made to the judgment of the Court in the case of Lucknow Development Authority V/s. M. K. Gupta 1993 (6) JT (SC) 307 : (AIR 1994 SC 787). Thus we further direct that the amount of interest paid to the millers on account of interest as over-directed, by the State of Punjab shall be recovered from the erring officers/officials dehors their status and designation in the State Govt. after granting them an opportunity in consonance with the principle of natural justice and the rules, within three months from the date of pronouncement of this judgment. A compliance report shall be submitted to the registry of this Court. Order accordingly