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2015 DIGILAW 736 (GAU)

Tinsukia Wholesale Consumers Co-Operative Society Ltd. v. Food Corporation of India and Ors.

2015-06-11

N.CHAUDHURY

body2015
1. This First Appeal is directed against the judgment and decree dated 27.08.2008 passed by the learned Civil Judge, Tinsukia, in Title Suit No.37 of 2000. By that judgment the learned trial court dismissed the suit of the plaintiff in entirety. 2. The plaintiff is a wholesale consumer co-operative society in the District of Tinsukia. It is licensed by the State Government as wholesaler as well retailer of the State Government for dealing in essential commodities. The plaintiff is engaged in lifting essential commodities from the Food Corporation of India on being allotted by the State Government as its nominee for onward sale to the consumer cooperative societies. The plaintiff society is formed and organized at the initiative of the State Government as per State policy for public distribution of essential commodities and the State Government retains its majority share. Apart from dealing in various commodities, it also acts as an agent of the State Government under direct control of the Deputy Commissioner of the District. As licensed by the State Government to obtain supply of essential commodities like Rice, Wheat, Sugar etc from the FCI for the purpose of public distribution, it was allotted 'among other commodities' APL rice amounting to 4566 quintal for distribution among the Fair Price Shop owners of Tinsukia, Doom Dooma, Margherita and other places. By depositing the value of rice as per the rate prevailing at that time, the plaintiff got the release orders from the defendant No.2 on 20.01.1994 and thereafter, within next 10 days transferred the same to different Fair Price Shops and other bulk consumers as per allotment of the Deputy Commissioner vide his order dated 18.01.1994 and did not retain any balance stock. The whole transaction was overseen by an Inspector of the Food and Civil Supplies of the establishment of the Deputy Commissioner and records maintained by him are indicative of the fact that after the last day of January, 1994 the plaintiff did not have any stock whatsoever left for distribution. By such transaction of lifting the essential commodities from the FCI, the plaintiff transferred the same to various Consumer Co-operative Societies and Fair Price Shop dealers. The plaintiff was entitled to profit only 3.1% of the price as the agent of the State Government. By such transaction of lifting the essential commodities from the FCI, the plaintiff transferred the same to various Consumer Co-operative Societies and Fair Price Shop dealers. The plaintiff was entitled to profit only 3.1% of the price as the agent of the State Government. But after long 6 years of such transaction the plaintiff received a letter from the office of the Deputy Commissioner, Tinsukia on 28.03.2000 intimating that the plaintiff is required to make deposit of huge amount being margin of the retrospective enhancement of issue price by the Government with effect from 01.02.1994, 29.01.1999 & 01.04.2000. For enhancement cost in the year 1994 after sale of goods to the plaintiff, the plaintiff was charged for Rs.3,13,798.50, the same for the year 1999 was Rs.8,32,300/- and same for the year 2000 was projected as Rs.5,57,575/-. This direction was issued by the Assistant Director of Food and Civil Supplies of the District asking the plaintiff society to deposit the value of the price to the Food Corporation of India without further delay in the interest of the public distribution system. 3. By filing the instant suit with leave obtained from the learned trial court under Section 80(2) of the Code of Civil Procedure, the plaintiff prayed for a declaration that it is not liable to make payment of the aforesaid amount to the defendant No.2 on the basis of the letter dated 19.06.2000, and that demand of the amount was illegal, barred by limitation etc. 4. On being summoned the defendants No.1 & 2 representing the Food Corporation of India filed one written statement, while defendants No.3 to 5 filed a separate written statement. 5. The defendants No. 1 & 2 stated that the Union of India i.e. Ministry of Food & Consumer's Affairs issued directions from time to time by enhancing the price of the essential commodities and since the FCI is bound to follow the instructions and directions of the Union of India it is duty bound to make the demand. In Paragraph-4 of the written statement FCI has disclosed the particulars of the orders issued by the Union Ministry enhancing particulars of the essential commodities on various dates with retrospective effect. 6. On the other hand, the defendants No.3 to 5 in Paragraph-5 of their written statement stated that the Government of India allocates central rice to the State Governments for public distribution. 6. On the other hand, the defendants No.3 to 5 in Paragraph-5 of their written statement stated that the Government of India allocates central rice to the State Governments for public distribution. Accordingly, the State Governments make allocation to respective districts and sub-divisions. Deputy Commissioner on receipt of such allotment from the State Government sub-allocates the same to nominee wholesale co-operative societies for lifting the essential commodities on behalf of the Deputy Commissioner for distribution of the same to Fair Price Shops/ GPSS against the allotment of the ultimate distribution to the consumers. It was pleaded that upon increase of price of central rice as per decision of the Union of India, the differential value of central rice from the Deputy Commissionarate, Tinsukia was to the tune of Rs.7,13,587.42 in the year 1994, Rs.10,55,750/- in the year 1999 and Rs.11,20,467/- for the year 2000. Out of these allocation the share of the plaintiff was Rs.3,13,798.50 for the year 1994, Rs.8,32,300/- for the year 1999 and Rs.5,53,575/- for the year 2000. Since FCI claimed differential value for the years 1994, 1999 & 2000 by various letters after decision of the Hon'ble Gauhati High Court in Civil Rule No.1372/1994. The State Government was liable to make payment of the differential value. It was stated in the same paragraph that admittedly plaintiff was ready to pay Rs.6,74,655/- for the year 1999 & Rs.2,81,050/- for the year 2000. They are liable to make payment of these amount of Rs.9,55,705/- and upon such deposit being made FCI should be restrained from imposing any threat on the plaintiff or the defendants No.3 to 5. This reference was made in view of the fact that in the plaint itself it was pleaded that same stock of the year 1999 and of the year 2000 was not released instantaneously and the same was released only after the actual enhancement was made. In that view of the matter the plaintiff offered to make payment for the aforesaid amount. 7. Upon consideration of the rival contentions of the parties, the learned trial court framed as many as 6 (six) issues and subsequently 2 (two) more additional issues were also framed. All these issues both original and additional are quoted below: (1) Whether the suit is maintainable in law and in fact in the present form? (2) Whether the plaintiff has any right to file the present suit? All these issues both original and additional are quoted below: (1) Whether the suit is maintainable in law and in fact in the present form? (2) Whether the plaintiff has any right to file the present suit? (3) Whether there are causes of action for the suit (4) Whether the suit is bad for mis-joinder of the defendants No.3 to 5? (5) Whether the defendants No.3 to 5 are liable to be struck out? (6) To what reliefs, the parties are entitled? Additional Issues (7) Whether the demands of differential price amounting to Rs.17,01,673.50 by the defendants No.1 & 2 is illegal? (8) Is the suit bad for non-joinder of necessary party? 8. Plaintiff examined 2 (two) witnesses in course of trial including its Chairman and exhibited 8 (eight) documents as Exhibits-1 to 8. The defendants No.1 to 2 examined one Pradip Phukan, Area Manager of FCI as DW1 but did not exhibit any document. 9. After considering the evidence adduced by the parties the learned trial court passed the impugned judgment and decree dismissing the suit of the plaintiff in entirety. 10. Coming to additional issue No.8 as to non-joinder of parties, the learned trial court held that the Union of India is a necessary party as the suit has been instituted against the Food Corporation of India and so the entire suit is liable to be dismissed on that ground. While deciding issue No.1, the learned trial court held that the leave granted by the learned trial court under Section 80(2) of the Code of Civil Procedure was not warranted as there was no urgency at all for the purpose of granting leave. Accordingly the learned trial court held that since the plaintiff obtained leave of the Court without there being any urgency, the suit became bad for non compliance of Section 80(1) of the Code of Civil Procedure and accordingly, issue No.1 was decided against the plaintiff. 11. The learned trial court decided issue No.2 & 3 together and held that the plaintiff had right to file the suit and accordingly, both the issues were decided in favour of the plaintiff. 12. 11. The learned trial court decided issue No.2 & 3 together and held that the plaintiff had right to file the suit and accordingly, both the issues were decided in favour of the plaintiff. 12. Noticing the written statement filed by the defendants No.3 to 5 along with the plaint, the learned trial court was of the view that the plaintiff and the defendants No. 3 to 5 are in the same footing and so implanting the State of Assam and its parties as defendants No.3 to 5 amounted mis-joinder and consequently, the suit became bad. Thus, issue No.4 was decided against the plaintiff. However, issue No.5 was found to be redundant and then the learned trial court proceeded to decide issue No.7 which is the crux of the suit. The learned trial court noticed that the plaintiff by averments made in Paragraphs-19, 21 & 22 of the plaint, partially admitted the claim amounting to Rs.9,59,705.05 and these resulted in waiver of the objection of limitation. This is because in Paragraph-19 of the plaint, the plaintiff stated that it issued 3,291 quintal of remaining stock of January 1999 charging enhanced price of Rs.205/- per quintal out of whole amount lifted in the year 1999 and thus, it was holding the amount of Rs.6,74,655/- for the year 1999 and Rs.2,81,050/- for the year 2000. The learned trial court did not believe that the plaintiff was not aware about the retrospective enhancement of price. Since P.W.1 stated that the plaintiff is ready to pay Rs.9,59,705.50 plea of the defendants that the total Rs.17,01,673.50 is illegal and cannot be accepted. It is further held that the plaintiff being an agent under the State of Assam the claim of the defendant No.1 through the Deputy Commissioner cannot be termed as illegal. The learned trial court did not believe that the State of Assam was not aware about the move of enhancement of the price and accordingly, decided this issue in negative and against the plaintiff. Consequently, issue No.6 was also decided against the plaintiff and the suit was dismissed. This judgment has been brought under challenge in the present appeal by the plaintiff. 13. I have heard Mr. G.N. Sahewalla, learned Senior Counsel assisted by Mr. S. Murarka, learned counsel for the appellant. I have also heard Mr. G. Sarma, learned Government Advocate, Assam, on behalf of the respondents No.3 to 5. This judgment has been brought under challenge in the present appeal by the plaintiff. 13. I have heard Mr. G.N. Sahewalla, learned Senior Counsel assisted by Mr. S. Murarka, learned counsel for the appellant. I have also heard Mr. G. Sarma, learned Government Advocate, Assam, on behalf of the respondents No.3 to 5. No one has put up appearance on behalf of the respondents No.1 & 2 when the matter was called up for hearing, although name of the learned counsel for the respondents No.1 & 2 has been duly shown in the cause-list. 14. Mr. G.N. Sahewalla, learned Senior Counsel would argue that the learned trial court having granted leave under Section 80(2) of the Code of Civil Procedure on being satisfied that the plaintiff was so entitled, the learned trial court committed error in holding that the suit of the plaintiff is bad for non-compliance of section 80(1) that, too, after holding that granting of leave was unwarranted. According to Mr. Sahewalla since neither of the parties raised this issue in appropriate time, the matter attained finality after the suit entered the stage of trial to hold that granting leave under Section 80(2) of the Code of Civil Procedure was invalid. The finding of the learned trial court in regard to issue No.1, therefore, is untenable. He further argues that Food Corporation of India which is the defendant No1 herein is an independent entity, formed under the Food Corporation Act, 1964 and so, it is not a department of the Union of India. In support of his contention, the learned Senior Counsel has placed reliance the following cases: FCI Vs. Muncipal Committee, AIR 1999 SC 2573 State of Punjab and Others Vs. Raja Ram and Other, AIR 1981 SC 1694 FCI Vs. Angamali Municipality, AIR 1995 Kerala 94 15. Coming to issue No.4 the learned Senior Counsel would argue that the impugned letter dated 19.06.2000 (21.06.2000) was issued by none other than the Assistant Director of the Food and Civil Supplies, Tinsukia, who is an officer of a Deputy Commissionarate of the State of Assam. The plaintiff instituted the suit on being aggrieved at the issuance of such letter and so impleading defendants No.3 to 5 cannot be held to be mis-joinder in any stretch of imaginations. Finding of the learned trial court, therefore, in regard to issues No.4 & 5 is also liable to be reversed. 16. The plaintiff instituted the suit on being aggrieved at the issuance of such letter and so impleading defendants No.3 to 5 cannot be held to be mis-joinder in any stretch of imaginations. Finding of the learned trial court, therefore, in regard to issues No.4 & 5 is also liable to be reversed. 16. Mr. Sahewalla has produced a copy of the judgment of a Division Bench of this Court in the case of Assam Roller Flour Mills Association Vs. State of Assam reported in (2004) 1 GLR 223. In this Division Bench judgment the Single Bench judgment of this High Court in the Civil Rule No.1203 of 1994 has been reversed and it has been held by the Division Bench of this Court that the Food Corporation of India cannot make demand of the differential value by enhancing the price respectively. It was held that the products after lifting from the FCI were sold to buyers at a controlled price and the margin between the purchase and selling price is their profit. The moment they purchased the property they became the owner of the property at the price fixed by the Government at that time. That price cannot be increased or decreased artificially by the Government by issuance of orders fixing price at the retrospective dates. It was observed that in a similar nature of order issued by the Government in the year 1982, batch of writ petitions being Civil Rule No.1008, 1009, 1010, 1011, 1013 and 1014 of 1982 were filed challenging the validity of the orders and a Division Bench of this Court had allowed all those writ petitions by quashing the order of demands in regard to differential value of the old price and the revised price on retrospective effect. By citing this judgment the learned Senior Counsel argues that here in this case without preferring a writ petition the plaintiff proceeded to institute the suit before the learned trial court. The decision given by this Court as to legality or validity of the retrospective effect for the enhancement of the price continues to remain to binding on all concerned and in that view of the matter, the learned trial court ought to have considered that the defendants No.1 & 2 and/ or that anybody else were not entitled to demand the differential value. With these arguments the learned Senior Counsel submitted that the impugned judgment and decree be set aside and the suit be decreed in terms of the admission made by the defendants No.3 to 5 in Paragraph-5 of their written statement. According to the learned Senior Counsel, FCI directly has not made any demand to the plaintiff and it is the defendants No.3 to 5 who made the demand by impugned letter dated 19.06.2000(21.06.2000). The plaintiff having agreed to make payment of Rs.9,55,705/- for the amount of rice which was sold after enhancement at enhanced rate is liable and agreeable to make payment to the defendants No.1 & 2 but it cannot be saddled with liability for depositing any other amount in view of the fact that as per the judgment of the Hon'ble Division Bench of this Court such retrospective enhancement after sale is not binding on the parties concerned. Mr. G. Sarma, learned Government Advocate, Assam appearing for respondents No.3 to 5, in his usual fairness submits that the Hon'ble Division Bench in writ jurisdiction has already held that FCI or for that the Union of India cannot make demand for differential value of the goods already sold prior to the enhancement was ordered and that being the law holding the field, the defendants No.1 & 2 is liable to be restrained from posing any threat at all to the plaintiff or the defendants No.3 to 5 in demand of the enhanced value. He submits that the suit of the plaintiff is liable to be partly decreed and plaintiff be directed to make deposit Rs.9,55,705/- to the defendants No.1 & 2 as per their own admission. 17. Having heard the learned counsel for the parties and on perusal of the materials on record, this Court finds that the plaintiff instituted the suit being aggrieved at the letter dated 19.06.2000 (21.06.2000) issued by the Assistant Director of Food and Civil Supplies under the Deputy Commissioner, Tinsukia. By that letter the plaintiff was directed to make deposit of huge amount of Rs.17,01,673.50 for the years 1994 & 2000.This demand was made because FCI intimated the State of Assam about the retrospective enhancement of price on three different dates. FCI on turn had to make the deposit because Union of India took a decision for retrospective enhancement of the price. FCI on turn had to make the deposit because Union of India took a decision for retrospective enhancement of the price. Now, after lifting the PDS articles from the FCI on allotment by the State of Assam through Wholesale Co-operative Societies like the plaintiff had to distribute the same among various Fair Price Shops. They purchased the products at the price fixed by the Government at that time and sold the same to the consumers at the price fixed by the Government. They derived only agency commission @ 3.1% for such middlemanship. The plaintiff is a co-operative society, the majority share of which is held by the Government itself. It is not a profit making body or a business organisation. This is constituted under the State policy in the interest of the public distribution system. Now, once the products are purchased and thereafter, sold to the terminal Fair Price Shops, the consumers lift the articles by making the payment as per the fixed price and so if enhancement of price is made after such series of sale is complete in that event there will be undue realization of money from the Wholesale Co-operative Societies like the plaintiff. This ground reality was taken into consideration by the writ Court in the Case of Assam Roller Flour Mills Association (Supra) and so unless and until it is proved that the plaintiff did not disburse whole of the stocks prior to enhancement was declared, plaintiff cannot be charged for the differential value. Here in this case, the plaintiff has pleaded in Paragraphs-19, 20 & 21 of the plaint itself that some part of stocks lifted in the year 99 & 2000 was disbursed after declaration of the enhanced price and so that part of the stocks were sold to the Fair Price Shops on enhanced rate. The plaintiff, therefore, offered to make payment to the differential value to the defendant No.1 but refused to make payment for the stock which had been sold prior to declaration of the enhanced rate. The plaintiff, therefore, offered to make payment to the differential value to the defendant No.1 but refused to make payment for the stock which had been sold prior to declaration of the enhanced rate. But since it is a civil suit, the plaintiff is duty bound to prove quantum of products, lifted from the Food Corporation of India, date wise and by producing the stock registrar and other records the plaintiff was duty bound to show the dates on which the said products were distributed to various fair price dealers in the years 1994, 1999 & 2000 to substantiate its claim that it had distributed the products prior to the price was enhanced by the Food Corporation of India or the Union of India as the case may be. Exhibits-1 to 8 are the only documents produced and Exhibited by the plaintiff in this regard. So, on the basis of the materials available on record it is not possible to arrive at a finding that the whole of the products lifted by the plaintiff prior to enhancement was sold prior to 28.03.1994 and or any other date when the enhancement was made. Similarly, vide producing and exhibiting documents ought to have been proved the relevant dates on which the stocks of the year 1999 & 2000 were disbursed to the Faire Price Shops. 18. However, the finding of the learned trial court that the suit of the plaintiff is bad for non-joinder of the Union of India or mis-joinder of defendants No.3 to 5 cannot be countenanced. In view of the law laid down by the Hon'ble Supreme Court in the case of FCI Vs. Municipal Committee. (Supra) and the judgment of the Hon'ble Kerala High Court in the case of FCI Vs. Angamali Municipality (Supra), FCI being a separate entity constituted under Food Corporation of India Act, 1964, the Union of India is not a necessary party. In that view of the matter, the learned trial court without affording any opportunity to the plaintiff to add the Union of India as party could not have held the suit to be bad for non-joinder of the Union of India. Besides the learned trial court also committed error in sitting over appeal over the decision of the same Court in regard to giving of leave under Section 80 (2) of the Code of Civil Procedure. Besides the learned trial court also committed error in sitting over appeal over the decision of the same Court in regard to giving of leave under Section 80 (2) of the Code of Civil Procedure. It is established law that order passed by the Court in a proceeding at a particular time becomes resjudicata for the remaining part of the same proceeding. Learned trial court ought not to have reversed its own decision in regard to leave to the plaintiff for institution suit without serving notice under Section 80(1) of the Code of Civil Procedure. In the case of Hope Plantations Ltd. Vs. Taluk Land Board, Peermade and Another reported in (1999) 5 SCC 590 , the Hon'ble Supreme Court has held that a decision given at a sage of the suit which is allowed to become final becomes resjudicata for the remaining part of the proceeding. Here in this case the learned trial court granted leave to the plaintiff for institution of the suit without serving notice under Section 80 of the Code of Civil Procedure. This order granting leave attained finality and the learned trial court allowed the suit to be tried in regular course. That being the position after conclusion of the trial, the learned trial court committed error in holding that the granting of leave at the thresh hold was improper and that suit was bad for non service of the notice under Section 80 (1) of the Code of Civil Procedure. Moreover, the plaintiff having instituted suit aggrieved at the communication made by an officer of the State of Assam impleadment of defendants No.3 to 5 was just and proper and so the decision arrived at by the learned trial court that impleading defendants No. 3 to 5 is an incident of mis-joinder is not acceptable. The finding of the learned trial court in regard to issue No.4 to 5 are required to be reversed. They are accordingly reversed. Consequently, impugned judgment is set aside and the matter is remanded to the learned trial court for giving opportunity to the parties to lead evidence to prove dates of disbursement of the essential commodities made by the plaintiff to various Fair Price Shop dealers to establish that the price was enhanced after the products were sold by the plaintiff to the Fair Price Shops/ GPSS. The leaned trial court shall also consider the law laid down by this Court in the case of Assam Roller Flour Mills Association (Supra) in this regard and passs a judgment afresh on additional issue No.6 as well as issue No.7. The suit is of the year 2000 and so the learned trial court shall endeavour to dispose of the same expeditiously as per roster of its Court. Mr. Murarka and Mr. G. Sarma, learned Government Advocate submit that they are ready to appear before the learned trial court on 27.07.2015. Upon their appearance learned trial court shall send notice to the defendants No.1 & 2 a fresh and thereafter, the matter shall be decided in accordance with law. Send down the records immediately so that appropriate order can be passed on 27.07.2015 by the learned trial court. 19. No order as to costs.