Telangana High Court
Sri Keshavarao Cheedella vs The State Of Telangana on 28 August, 2024
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION Nos.17985, 17993 AND 18357 OF 2024
COMMON ORDER:
Heard Mr. R.N. Hemendranath Reddy, learned Senior Counsel representing Mr. Sannapaneni Lohit, learned counsel for the petitioners in W.P. No.18357 of 2024, Mr. Pasham Mohith, learned counsel for the petitioners in W.P. Nos.17985 and 17993 of 2024, Mr. A. Jagan, learned Government Pleader for Civil Supplies and Mr. T.P. Acharya, learned Standing Counsel for the Telangana State Civil Supplies Corporation Limited (TSCSCL).
2. These writ petitions challenge the initiation of proceedings under the Telangana Revenue Recovery Act, 1864 (hereinafter referred to as 'R.R. Act'). The allegation of the petitioners is that the respondents issued impugned notices without following procedure laid down under the R.R. Act. Therefore, there is no need to delve into the facts of the case in detail.
3. However, brief facts in W.P. No.18357 of 2024 are as follows:
i) Petitioner Nos.9 and 10 are Partnership Firms. Family Members of some of the petitioners have floated petitioner Nos.9 and 10 2 KL,J W.P. No.17985 of 2024 & batch firms with an object and purpose of carrying business of manufacturing and selling of rice, its allied products, co-products and by-products from the activity of parboiling, steam boiling and milling of paddy. The said firms have been procuring paddy from the farmers, effectively milling the procured paddy to ensure high quality rice and selling the resultant rice in the market and paddy exporters.
ii) The Telangana Government has announced its Paddy Procurement Policy in the year 2015. As per the said Policy and the Government Orders (GOs) issued by the State Government, Rice Millers have to purchase paddy from farmers at a Minimum Support Price (MSP) predetermined by the State Government and has to deliver 75% of the rice milled as levy to the Food Corporation of India (FCI), and the State Civil Supplies Corporation at a predetermined price. The rice millers were entitled to sell and move the remaining 25% levy free rice within and outside the State and also export the rice as per the then prevailing orders of the State Government from time to time. It was called Levy System which was abolished by the Central Government in 2015 and was duly followed by the State Governments.
iii) The newly formed State of Telangana traded the levy system for the custom milling system in order to provide more support to the 3 KL,J W.P. No.17985 of 2024 & batch farmers. The FCI was replaced by the Telangana State Civil Supplies Corporation Limited (TSCSCL), respondent No.4 in W.P. Nos.17985 and 17993 of 2024 and respondent No.3 in W.P. No.18357 of 2024.
Under the said custom milling system, the State directly purchases paddy from the farmers through different procurement centers at Village or Mandal levels and distributes the paddy to rice millers for custom milling. The rice millers mill the paddy and supply to the State and receive predetermined custom milling charges.
iv) Vide G.O.Ms.No.18, CA, F&CS (CS.I-CCS), dated 30.10.2015, the Government of Telangana has issued Telangana Rice (Custom Milling) Order, 2015 (for short 'Order, 2015'), which makes it mandatory for all rice millers to whom paddy is delivered by the TSCSCL or its Agencies for custom milling of paddy and deliver rice on such terms and conditions stipulated from time to time by the State Government. The new policy coupled with increase in MSP of paddy, policy support in the form of farmers' input incentives and improvements in irrigation led to drastic increase in the production of paddy across the State of Telangana. Thereafter, petitioner Nos.9 and 10 firms entered into custom milling agreement with TSCSCL for each milling season on the specific terms and conditions mentioned therein. 4
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v) It is further contended by the petitioners that Rabi 2022-23 and Kharif 2023-24 have presented a unique set of challenges to the rice millers across the entire State. Due to torrential rains in 2022-23, most of the paddy crop across the State was damaged. As per the Policy, purchase of those Non-Fair Average Quality (Non-FAQ) paddy in large quantities and transported them to the millers for custom milling. Petitioner Nos.9 and 10 mills were allotted paddy stocks of three (03) times their milling capacity in Rabi 2022-23. They have represented the TSCSCL about their inability to stock/store the already drenched paddy in their mill premises. Even then, they were forced by TSCSCL to unload all the paddy trucks sent by PPCs. On war footing and the stocks overlapped with already stored stocks of paddy from previous seasons that were yet to be milled. They were forced to keep the paddy stocks outside and the same was deteriorated due to heavy rains. The TSCSCL has not paid custom milling charges, transportation charges etc., for last several seasons promptly leading to arrears running into Crores of Rupees.
vi) Respondent No.4 - District Collector, Suryapet, has constituted teams to conduct inspections at the defaulted millers, who failed to deliver custom milled rice within the stipulated time and such 5 KL,J W.P. No.17985 of 2024 & batch inspections have been carried out at petitioner Nos.9 and 10 mills premises. During the said inspections, it was alleged by the Authorities that there is variation in quantity of paddy of 27,458.625 Metric Tons for the Rabi 2022-23 Season and variation in quantity of paddy of 7,542.675 Metric Tons for the Kharif 2023-24 Season, which is a total quantity of 35,001.300 Metric Tons of paddy amounting to Rs.77.10 Crores for both the seasons in respect of petitioner No.10 plus there is variation in quantity of paddy of 24,974.919 Metric Tons for the Rabi 2022-23 Season and variation in quantity of paddy of 16,390.447 Metric Tons for the Kharif 2023-24 Season, which is a total quantity of 41,365.366 Metri Tons of paddy amounting to Rs.91.13 Crores for both the seasons in respect of petitioner No.9 firm.
vii) The State's pool of paddy which was allotted to petitioner Nos.9 and 10 mills for Rabi 2022-23 Season was already placed under auction by the TSCSCL vide e-tender Notification dated 25.01.2024, and the same was sold on 'as is where is basis'. Sale Certificate dated 23.02.2024 was issued in favour of M/s. National Federation of Farmers Procurement Processing and Retailing Cooperative of India Limited. As per the proceedings, dated 05.03.2024 of respondent No.1, mill-wise quantity of paddy finalized through tenders and allotted successful 6 KL,J W.P. No.17985 of 2024 & batch bidders should not be delivered as CMR. The last date for delivery of the CMR is 30.09.2024 as far as paddy allotted for the Kharif 2023-24, as per the G.O.Ms. No.26, dated 07.10.2023. Therefore, there is no default/failure on the part of petitioner Nos.9 and 10 mills in delivering custom milled rice in respect of the paddy allotted for the Kharif 2023- 24 Season.
viii) Respondent No.1 has been extending the date of delivery of custom milled rice by the rice millers across the State for the Season of Rabi 2019-20, Kharif 2021-22 and Kharif 2022-23 from time to time, and vide G.O.Ms.No.12, dated 27.06.2024, the same was extended by 90 days from 27.06.2024, which is set to expire by 30.09.2024. Therefore, there is no default/failure on the part of petitioner Nos.9 and 10 with regard to delivery of custom milled rice or variation in quantity of paddy at their premises.
ix) Even then, respondent authorities have registered criminal cases against petitioner Nos.9 and 10, its partners, also seized paddy, attached the accounts of the petitioners and initiated proceedings under R.R. Act. They have filed petitions under Section - 482 of Cr.P.C. and also writ petitions challenging said seizures and the same are pending, and this Court has granted interim orders.
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x) The respondent authorities have attached the properties of the petitioners in exercise of their powers under R.R. Act without following due procedure laid down under law. They are taking steps to bring the properties of the petitioners for sale. Notice of attachment under Sections - 25 and 27 of R.R. Act attaching all the properties of petitioners is illegal and without following due procedure laid down under the R.R. Act. There is no determination of amount. There is an Arbitration Clause in the agreement. Therefore, they cannot initiate procedure laid down under the R.R. Act.
xi) In Form Nos.4 and 5 i.e., demand prior to attachment of land (Under Section - 25) and notice of attachment (Under Section - 27) and also the distraint order, the details of properties were not mentioned. Therefore, the said notices are defective.
W.P. Nos.17993 AND 17985 OF 2024:
4. M/s. Sri Venkateshwara Rice Industries Pvt. Ltd., petitioner No.1 in W.P. No.17993 of 2024, is a Company registered under the Companies Act, 2013, while petitioner Nos.2 and 3 are its Managing Director and Director, whereas the petitioners in W.P. No.17985 of 2024 are shareholders of the said Rice Mill.8
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i) The petitioners further contended that respondent No.4 - TSCSCL had allotted 23325.84 Metric Tons of paddy for the Kharif Season 2022-23 in a belated manner. There was inordinate delay in the allotment of paddy by TSCSCL. They have allocated paddy of 15535.52 Metric Tons for 2022-23 Rabi Season and 4102.64 Metric Tons for 2023-24 Kharif Season to petitioner No.1 Mill belatedly. Petitioner No.1 has submitted a representation dated 08.05.2023 to the respondents about the said inordinate delay. It has also submitted multiple representations on the said aspects. Even then, on the complaint lodged by respondent No.3, FIR was registered against the petitioners. They have filed a petition under Section - 482 of Cr.P.C. to quash the said proceedings in the said FIR.
ii) The State Government auctioned the paddy to third parties and issued lifting orders without accounting for expenses incurred by various rice millers including petitioner No.1 herein. Therefore, certain rice mills have filed a writ petition vide W.P. No.6564 of 2024 seeking reimbursement of expenses incurred for safely storing paddy and the said writ petition is pending.
iii) It is further contended that though petitioner No.1 Company/Mill entered into an agreement with TSCSCL, they have not 9 KL,J W.P. No.17985 of 2024 & batch furnished copies of the said agreements. They have not even furnished copy of the same on the application submitted by petitioner No.1 under Right to Information Act, 2005, on the ground that investigation is pending.
iv) Respondent No.9 has served distraint order No. D/446/2024, dated 27.05.2024 upon the petitioners initiating proceedings under Section - 8 of the R.R. Act in attaching and conducting sale of the properties belonging to the petitioners mentioning the total arrears to a tune of Rs.64,09,39,079/- along with interest. It was alleged that the same was on account of default of petitioner No.1 in delivering 2903.921 Metric Tons of CMR rice for Khariff 2022-23, Rabhi 2022-23 and Khariff 2023-24. The details are not mentioned in the said destraint order and it is defective one. A writ petition vide W.P. No.16167 of 2024 is filed challenging the said destraint order. Thereafter, the same was withdrawn in view of issuance of demand prior to attachment dated 12.06.2024 in Form No.4 and notice of attachment, dated 27.06.2024. The same were issued in violation of the procedure laid down under the R.R. Act. The said notices are defective since the same were issued without determination of amount. Thus, the said notices are illegal apart from defective. The procedure laid down under the R.R. Act was not 10 KL,J W.P. No.17985 of 2024 & batch followed. The petitioners in W.P. No.17985 of 2024 are only shareholders and are liable to pay to the extent of their share value. Therefore, without considering the said legal aspects, the respondents issued the aforesaid destraint order in Form No.1 under Section - 8 of the R.R. Act; Form No.4 - demand prior to attachment of land under Section -25 of the R.R. Act and Form No.5 - Notice of attachment under Section - 27 of the R.R. Act. Therefore, the said action of the respondents is illegal, arbitrary and in violation of procedure laid down under the R.R. Act.
5. The District Collector has filed counter contending as follows:
i) It is Civil Supply Officer i.e., respondent No.6 in W.P. No.18357 of 2024, who submitted a report before the District Collector against the Rice Millers including petitioner No.1 in W.P. No.17993 of 2024 and petitioner Nos.9 and 10 in W.P. No.18357 of 2024 stating that the Millers are not delivering Custom Milling Rice (CMR) for the paddy received during 'Vanakalam' i.e., Kharif 2022-
23, Yasangi i.e., Rabi 2022-23 and Kharif 2023-24. The Authority conducted inspection and found shortages of paddy.
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ii) As per the report submitted by the District Manager, Civil Supply (DMCS), the aforesaid mills neither delivered CMR to the Government, nor did they have paddy stock in their rice mills. They have diverted CMR paddy to black market. Therefore, show-cause notices were issued, explanations were called for as per the procedure laid down in the Agreements and also Clauses of the Order, 2015, issued vide G.O.Ms.No.18, dated 30.10.2015. Criminal Cases were also registered against them.
iii) During inspection conducted under cover of panchanama found shortfall of huge quantity of rice. DMCS also found transportation of 89 Lorries of CMR to Kakinada Port between the period from 20.04.2024 to 27.05.2024 by petitioner Nos.9 and 10 in W.P. No.18357 of 2024. Thus, they have diverted CMR paddy for their illegal gain and, thus, they have misappropriated paddy amount of Rs.89,07,95,166/- as per paddy MSP. Therefore, they have contravened Clauses - 4, 7 and 9 of the said Order, 2015. Notices including final notice dated 16.05.2024 were issued. Thereafter, show-cause notices were also issued and on 12 KL,J W.P. No.17985 of 2024 & batch calling for explanation only, the respondents' authority have issued destraint order, demand prior to attachment of land and notice of attachment strictly in accordance with law, and there is no error in it.
iv) There are serious allegations against the petitioners. They have misappropriated paddy amount. Therefore, the respondents have initiated auction the said mills for recovery of the said amount strictly in accordance with law and there is no error in it.
6. Mr. R.N. Hemendranath Reddy, learned Senior Counsel appearing for the petitioners in W.P. No.18357 of 2024, Mr. Pasham Mohith, learned counsel for the petitioners in W.P. Nos.17985 and 17993 of 2024 and Mr. A. Jagan, learned Government Pleader for Civil Supplies made their submissions extensively.
7. The petitioners in all the said writ petitions challenged the destraint order, demand prior to attachment in Form No.4 and notice of attachment in Form No.5 on the following grounds:
i. Amounts sought to be recovered by the respondents are disputed and they have not crystallized. Therefore, initiation of proceedings under the R.R. Act without determination of the amount is illegal 13 KL,J W.P. No.17985 of 2024 & batch and violation of the principle laid down by the Hon'ble Supreme Court in State of Karnataka v. Shree Rameshwara Rice Mills 1;
Shriram Engineering Constructions Company Limited v.
Kerala State Industrial Development 2 and Taherunnisa Begum v. District Collector, Cuddapah District 3.
ii. Proceedings under the R.R. Act cannot be resorted when there exists an arbitration clause in the subject agreement. Reliance was placed on the principle laid down in Sanjay Kumar v. The Managing Director, BSFCSC 4 and Arvind Kumar v. State of Bihar 5.
iii. Company is a separate Juristic entity whose liability cannot be fastened on the Shareholders/Directors. Reliance was placed on the decisions in R.K. Chaddha v. State of U.P. 6 and Chamundeeswari v. The Commercial Tax Officer7.
iv. Property of third parties, who are not revenue defaulters, cannot be attached. Reliance was placed on Taherunnisa Begum3.
v. There is procedural violation as contemplated under the R.R. Act.1
. (1987) 2 SCC 160 2 . 2007 SCC OnLine Ker. 196 3 . 2007 SCC OnLine AP 527 4 . 2020 SCC OnLine Pat.924 5 . 2014 SCC OnLine Pat. 1495 6 . 2014 SCC OnLine All.6248 7 . 2007 (2) CTC 149 14 KL,J W.P. No.17985 of 2024 & batch vi. Destraint order in Form No.1 is defective since details of movable and immovable properties to be attached were not mentioned.
vii. Properties of the petitioners cannot be placed in the list of prohibited properties and the same is in violation of procedure laid down under the R.R. Act, including Section - 22A of the Registration Act, 1908. Reliance was placed on the principle laid down by this Court vide order dated 25.03.2022 in W.P. No.16787 of 2021 and batch.
viii. Petitioner Nos.6 to 8 in W.P. No.18357 of 2024 are not partners of petitioner Nos.9 and 10 Mills therein. Therefore, recovery proceedings initiated against them are illegal.
ix. Notice to petitioner No.1 i.e., M/s. Sri Venkateshwara Rice Industries Pvt. Ltd. in W.P. No.17993 of 2024 was not served.
x. No show-cause notice was issued to petitioner No.1 in W.P. No.17993 of 2024. The proceedings initiated by the respondents under the R.R. Act are contrary to the Order, 2015. Time extended up to 30.09.2024 for delivery of CMR and, therefore, the respondents cannot initiate proceedings under R.R. Act.15
KL,J W.P. No.17985 of 2024 & batch xi. Rice was sold in respect of Rabi 2022-23 as is where is basis by issuing e-tender notice dated 25.01.2024 and sale certificates were also issued on 23.02.2024 to the successful bidder.
xii. The Government is due and liable to pay huge amount towards milling charges and transport charges. Reliance was placed on the principle laid down by the Apex Court in S.K. Bhargava v. The Collector, Chandigarh8, Shree Rameshwara Rice Mills1 and Shriram Engineering Construction Company Limited2.
8. Whereas, Mr. A. Jagan, learned Government Pleader for Civil Supplies, contended that the petitioners' mills have diverted the paddy to black market. They have misappropriated huge extent of paddy and, therefore, show-cause notices were issued to the petitioners' mills, and on calling for explanation only, impugned destraint order, demand prior to attachment of land and notice of attachment were issued. Criminal cases were also initiated against them. There is huge shortfall in rice quantity. Shareholders and Directors are also responsible for the same. Therefore, the respondents have issued the said notices by following procedure laid down under the R.R. Act. There is no error in it. 8 . (1998) 5 SCC 170 16 KL,J W.P. No.17985 of 2024 & batch ANALYSIS AND FINDING OF THE COURT:
9. SCHEME OF THE R.R. ACT:
i) In the light of the aforesaid rival submissions, it is relevant to note the Scheme of the Telangana Revenue Recovery Act, 1864. The R.R. Act was brought in for the purpose of consolidating the Law for the Recovery of Arrears of Revenue in the State of Telangana.
ii) Section - 4 of the R.R. Act deals with arrears of revenue, and it says when the whole or portion of a kist shall not be so paid, the amount of the kist or of its unpaid portion shall be deemed to be an arrear of revenue.
iii) Section- 5 of the R.R. Act deals with arrears of revenue how recovered, and it says that whenever revenue may be in arrear, it shall be lawful for the Collector, or other officer empowered by the Collector in that behalf, to proceed to recover the arrear, together with interest and costs of process, by the sale of the defaulter's movable and immovable property, or by execution against the person of the defaulter in manner hereinafter provided.
iv) Section - 7 deals with interest on arrears, and it says that arrears of revenue shall bear interest at the rate of 6 per cent per annum.17
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v) Section - 8 deals with rules for seizure and sale of movable property, and it says that in the seizure and sale of movable property for arrears of revenue, the following rules shall be observed:- First.- The Collector, or other officer empowered by the Collector in that behalf, shall furnish to the person employed to distraint the property of a defaulter, a demand in writing and signed with his name, specifying the name of the defaulter, the amount of the arrear for which the distress may be issued, and the date on which the arrear fell due. The person employed to distraint shall produce the writing which, if the arrear together with the batta due to him, under Section - 53, be not at once paid, shall be his authority for making the distress, and on the day on which the property may be distrained, shall deliver a copy of such writing to the defaulter, endorsing thereon a list or inventory of the property distrained, and the name of the place where it may be lodged or kept. Second.- The writing shall further set forth that the distrained property will be immediately brought to public sale unless the amount, with interest, batta, and all the expenses of the distress, be previously discharged. Third.- When a defaulter may be absent, a copy of the writing, with the endorsement, shall be fixed or left at his usual place of residence, or on the premises where the property may have been 18 KL,J W.P. No.17985 of 2024 & batch distrained, before the expiration of the third day, calculating from the day of the distress.
vi) Section - 9 deals with procedure when defaulter neglects to pay after notice and it says that when the amount due shall not have been paid pursuant to the terms of the demand, and no arrangement for securing the same shall have been entered into to the satisfaction of the Collector or other officer empowered by the Collector in that behalf, the distrainer shall transmit an inventory of the property distrained to the nearest public officer empowered to sell distrained property, under Act VII of 18391, in order that it may be publicly sold for the discharge of the arrear due, with interest, batta, and cost of distraint.
vii) Section - 22 deals with proclamation of time of sale and of property to be sold and it says that the public officer, empowered under Act VII of 18391 to sell distrained property, shall cause to be affixed to the outer door of the defaulter's house, or on the premises where the property may have been distrained, a list of the property to be sold, with a notice specifying the place where, and the day and hour at which the distrained property will be sold and shall cause proclamation of the intended sale to be made by beat of drum in the village to which the lands on which the arrear has accrued may belong, and in such place or 19 KL,J W.P. No.17985 of 2024 & batch places as the Collector, or other officer empowered by the Collector in that behalf, may consider necessary to give due publicity to the sale. No sale shall take place until after the expiration of a period of fifteen days from the date on which the notice may be so affixed.
viii) Section - 23 deals with sale how conducted and it says that at the appointed time, the property shall be put up in one or more lots, as the said officer may consider advisable, and shall be disposed of to the highest bidder. Where the property may sell for more than the amount of the arrear, the over plus after deducting expenses of process and interest, shall be paid to the defaulter.
ix) Section - 25 deals with demand to be served prior to attachment of land, and it says that before a Collector, or other officer empowered by the Collector in that behalf, proceeds to attach the land of the defaulter, or buildings thereon, he shall cause a written demand to be served upon the defaulter, specifying the amount due, the estate or land in respect of which it is claimed, the name of the party in arrear, the batta due to the person who shall serve the demand, and the time allowed for payment, which shall be fixed with reference to the distance from the land on which the arrear is due to the place at which the money is to be paid. Such demand shall be served by delivering a copy to the defaulter, 20 KL,J W.P. No.17985 of 2024 & batch or to some adult male member of his family at his usual place of abode, or to his authorized agent, or by affixing a copy thereof on some conspicuous part of his last known residence, or on some conspicuous part of the land about to be attached.
x) Section - 26 deals with procedure when defaulter neglects to pay, and it says that when the amount due shall not have been paid pursuant to the terms of the demand, and no arrangement for securing the same shall have been entered into to the satisfaction of the Collector or other officer empowered by the Collector in that behalf, he shall proceed to recover the arrear by the attachment and sale of the defaulter's land in the following manner.
xi) Section - 27 deals with mode of attachment, and it says that the attachment shall be effected by affixing a notice thereof to some conspicuous part of the land. The notice shall set forth that unless the arrear, with interest and expenses, be paid within the date therein mentioned, the land will be brought to sale in due course of law. The attachment shall be notified by public proclamation on the land, and by publication of the notice in the District Gazette.
xii) Section - 36 deals with procedure in sale of immovable property, and it says that in the sale of immovable property under this 21 KL,J W.P. No.17985 of 2024 & batch Act the following rules shall be observed:- First.- The sale shall be by public auction to the highest bidder. The time and place of sale shall be fixed by the Collector of the district in which the property is situated, or other officer empowered by the Collector in that behalf. The time may be either previous to or after the expiration of the fasli year. Second.- Previous to the sale the Collector, or other officer empowered by the Collector in that behalf, shall issue a notice thereof in English and in the language of the district, specifying the name of the defaulter; the position and extent of land and of his buildings thereon; the amount of revenue assessed on the land, or upon its different sections; the proportion of the public revenue due during the remainder of the current fasli; and the time, place, and conditions of sale. This notice shall be fixed up one month at least before the sale in the Collector's office and in the Taluk Cutcherry, in the nearest police station-house, and on some conspicuous part of the land. Third.-A sum of money equal to fifteen per cent of the price of the land shall be deposited by the purchaser in the hands of the Collector, or other officer empowered by the Collector in that behalf, at the time of the purchase, and where the remainder of the purchase- money may not be paid within thirty days, the money so deposited shall be liable to forfeiture. Fourth.-Where the purchaser may refuse or omit 22 KL,J W.P. No.17985 of 2024 & batch to deposit the said sum of money, or to complete the payment of the remaining purchase-money, the property shall be resold at the expense and hazard of such purchaser, and the amount of all loss or expense which may attend such refusal or omission shall be recoverable from such purchaser in the same manner as arrears of public revenue. Where the lands may, on the second sale, sell for a higher price than at the first sale, the difference or increase shall be the property of him on whose account the said first sale was made. Fifth.- All persons bidding at a sale may be required to state whether they are bidding on their own behalf or as agents, and, in the latter case, to deposit a written authority signed by their principals. If such requisition be not complied with, their bids may be rejected.
xiii) Section - 37-A deals with application to set aside sale of immovable property on deposit. Section - 38 deals with application to set aside sale. Section - 39 deals with proclamation of sale. Section - 40 deals with delivery of possession. Section - 44 deals with sale of land for arrears. Section - 48 deals with power of arrest in case of willful or fraudulent non-payment of arrears-period of imprisonment etc. Section - 57-A deals with revision.
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10. Distraint order issued under Section - 8 of the R.R. Act in Form No.1 as per Appendix - II (Standing Order No.41, Paragraph 25) is relevant and the same is extracted as under:
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11. Like-wise, demand prior to attachment of land issued under Section - 25 of the R.R. Act in Form No.4 is also relevant and the same is extracted below.
12. Similarly, notice of attachment issued under Section - 27 of the R.R. Act in Form No.5 is also relevant and the same is extracted below:
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13. The aforesaid Forms would reveal that the respondents shall mention all the details in Form No.1 - distraint order. Perusal of the said distraint order issued under Section - 8 of the R.R. Act in Form No.1 dated 27.05.2024 in respect of the petitioners in W.P. No.17993 of 2024 and 17985 of 2024 would reveal that the same lacks all the requisite details. It is a defective notice. Therefore, subsequent proceedings are also liable to be set aside.
14. In Shree Rameshwara Rice Mills1, the Apex Court categorically held that without determination of amount, any initiation of recovery of arrears under R.R. Act is impermissible. Paragraph Nos.7 and 8 are relevant and the same are extracted as under:
"7. On a consideration of the matter we find ourselves unable to accept the contentions of Mr Iyenger. The terms of clause 12 do not afford scope for a liberal construction being made regarding the powers of the Deputy Commissioner to adjudicate upon a disputed question of breach as well as to assess the damages arising from the breach. The crucial words in clause 12 are "and for any breach of conditions set forth hereinbefore, the first party shall be liable to pay damages to the second party as may 26 KL,J W.P. No.17985 of 2024 & batch be assessed by the second party". On a plain reading of the words it is clear that the right of the second party to assess damages would arise only if the breach of conditions is admitted or if no issue is made of it. If is was the intention of the parties that the officer acting on behalf of the State was also entitled to adjudicate upon a dispute regarding the breach of conditions the wording of clause 12 would have been entirely different. It cannot also be argued that a right to adjudicate upon an issue relating to a breach of conditions of the contract would flow from or is inhered in the right conferred to assess the damages arising from a breach of conditions. The power to assess damages, as pointed out by the Full Bench, is a subsidiary and consequential power and not the primary power. Even assuming for argument's sake that the terms of clause 12 afford scope for being construed as empowering the officer of the State to decide upon the question of breach as well as assess the quantum of damages, we do not think that adjudication by the officer regarding the breach of the contract can be sustained under law because a party to the agreement cannot be an arbiter in his own cause. Interests of justice and equity require that where a party to a contract disputes the committing of any breach of conditions the adjudication should be by an independent person or body and not by the officer party to the contract. The position will, however, be different where there is no dispute or 27 KL,J W.P. No.17985 of 2024 & batch there is consensus between the contracting parties regarding the breach of conditions. In such a case the officer of the State, even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of clause 12.
8. We are, therefore, in agreement with the view of the Full Bench that the powers of the State under an agreement entered into by it with a private person providing for assessment of damages for breach of conditions and recovery of the damages will stand confined only to those cases where the breach of conditions is admitted or it is not disputed."
i) The said principle was also laid down by a Division Bench of Kerala High Court in Shriram Engineering Constructions Company Limited2 and further held that when breach is not admitted, before determining the amount by suit or arbitration by independent authority, revenue recovery cannot be initiated for recovering disputed damages.
ii) In Taherunnisa Begum3, the combined High Court of Andhra Pradesh at Hyderabad held that where there are disputes between alleged debtor and Government with regard to certain liability, before initiating recovery proceedings under Section - 52, there is an obligation cast upon the State Government to hold a proper enquiry, furnish full particulars to person sought to be fastened with the liability, consider his 28 KL,J W.P. No.17985 of 2024 & batch representations and first determine liability or otherwise for the sums said to be due.
iii) In the light of the aforesaid legal principle, coming to the facts of the present, according to the respondents, there is shortfall in paddy and that the petitioners' mills diverted the said paddy to black market. They have also mentioned the quantity and amount i.e., Rs.64,09,39,079/- as mentioned in the distraint order dated 27.05.2024 of respondent No.1 in W.P. No.17993 of 2024, while an amount of Rs.91.13 Crores by respondent No.9 and Rs.77,10,78,639/- by respondent No.10 in W.P. No.18357 of 2024. Whereas, according to the petitioners, there is serious dispute with regard to the said alleged variation in quantity and shortfall. Admittedly, the amount was not determined by the respondents. Therefore, without determining the said amount, initiation of proceedings under the R.R. Act for recovery of arrears is contrary to the procedure laid down under the R.R. Act and the principle laid down in the aforesaid judgments.
iv) The respondents have to first determine the said amount and thereafter they have to initiate procedure laid down under the R.R. Act. Moreover, it is the specific case of the petitioners that there was no default at all. The said fact has to be considered by the respondents, 29 KL,J W.P. No.17985 of 2024 & batch conduct inquiry, then they have to initiate procedure laid down under the R.R. Act for recovery of arrears. Even after determination, they have to follow the aforesaid procedure under the R.R. Act for recovery of arrears of revenue. They cannot deviate from the procedure and issue notices under the guise of recovery of arrears of revenue.
15. It is also the contention of the petitioners that there exists an arbitration clause in the aforesaid agreement. Therefore, the proceedings under the R.R. Act cannot be resorted. There is no dispute that Clause No.13.4 of the said agreement deals with 'arbitration' and it says that both the parties have agreed that in the event of any dispute with regard to the said agreement, the same shall be referred to an Arbitrator. The Arbitrator shall be appointed by Commissioner, Civil Supplies, Government of Telangana/VC & Managing Director, TSCSCL.
i) In Sanjay Kumar4, the Patna High Court held that Arbitration Act being a Central Act would prevail over Recovery Act, which is enacted by the State. Paragraph Nos.51, 52 and 56 are relevant and the same are extracted as under:
"51. What requires consideration next is as to whether the petitioners' right under the Arbitration Act stands foreclosed in the light of proceedings initiated under the Recovery Act or not?30
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52. The answer is simple both on facts and law.
53. Under Clause 15 and 16 of the agreement, parties themselves chose to be governed by both the statutes, without ousting proceedings under the other. The language of the agreement is amply clear. The agreement itself stipulated two different situations.
54. Even in law, there cannot be any conflict or restriction. The Arbitration Act stands enacted under Part IV, Chapter I, Entry 13 of List 3 of the Schedule VII of the Constitution. By virtue of Article 234, the said statute would prevail over the Recovery Act which stands enacted by the State under its Legislative power flowing from List II of Schedule VII of the Constitution. The Arbitration Act Patna High Court REQ. CASE No. 146 of 2019 dt.03-07- 2020 is a central, and subsequent legislation would prevail over the said State Legislation.
55. xxxx
56. Matter needs to be examined from yet another angle. And that as to whether there is any conflict between the two statutes at all or not. A careful reading of both the Statutes only leads to an inescapable conclusion of not being so. More so considering the ambit and scope of both the legislations. The Arbitration Act provides a mechanism for adjudication of disputes, which can be by way of a claim and counterclaim inter se the parties to the agreement. Whereas the Recovery Act provides for a mechanism for determination of public 31 KL,J W.P. No.17985 of 2024 & batch debt and recovery thereof, by way of a particular procedure. It is not as though with the issuance of a mere notice, all amounts are deemed to be recoverable as public debt. What requires consideration is whether the debt can be classified as a public demand or not. There is no mechanism for Patna High Court REQ. CASE No. 146 of 2019 dt.03-07-2020 the adjudicatory process of the disputes or claims of a private party under the Recovery Act. The proceedings under the Recovery Act are summary in nature, based on admitted, certain or unsustainable objections rather than the lengthy process of adjudication of a dispute, be it monetary or otherwise."
16. In the light of the above principle, in the case on hand, according to the respondent authorities, there is shortage of paddy and the petitioner mills failed to supply the rice and diverted the same in black market. Whereas, according to the petitioners, there is no default and in fact there was delay in supply of paddy. The respondents have dumped paddy stocks of three (03) times to the agreed capacity. They are in the said business for the last fifteen (15) years and there are no complaints against the petitioners. Thus, there are disputes between the petitioners and the respondents on the said aspects. 32
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17. The petitioners in W.P. No.17985 of 2024 are claiming that they are the shareholders of petitioner No.1 Company in W.P. No.17993 of 2024. Therefore, the Company is a separate entity, liability cannot be fastened on the shareholders/Directors.
i) In R.K. Chaddha6, the Allahabad High Court held as under:
"In the absence of fraud being alleged to the effect that the Directors had siphoned off the funds of the Company, no recovery of the trade tax dues of the Company could be made from the personal assets of the Directors. The Court held that the liability of the shareholders as well as of the Directors was limited by shares and that if there were dues of the Trade Tax department against the Company, the department comes into the position of a secured creditor and can lodge a claim as a secured creditor in the liquidation proceedings.
The Company, in law has a separate legal entity of its own. Once incorporated, the entity of the Company is entirely separate from that of its shareholders. The Company has its own name, has its own seal, has its own assets and it can be sued or can sue for its own purposes. On the other hand, the liability of the shareholders is limited to the extent of its own shares, namely, to the extent of the capital invested by the shareholder. The creditors of the Company cannot obtain satisfaction from the assets of the shareholders 33 KL,J W.P. No.17985 of 2024 & batch of the Company and similarly, the shareholders have no right to the assets of the company.
The Court is of the opinion that when tax dues are to be recovered from the Company, the Directors would not automatically be responsible unless there is a statutory provision under the Act, which in the instant case is non-existent. In the instant case, the Court is further of the view that the doctrine of lifting the corporate veil is not applicable and that the petitioners cannot be made personally responsible for the dues of the Company."
The said aspects were not considered by the respondents while issuing distraint order, demand prior to attachment of land and notice of attachment in Form Nos.1, 4 and 5 of the R.R. Act.
ii) Likewise, petitioner Nos.6 to 8 in W.P. No.18357 of 2024 are claiming that they are not the Partners in petitioner Nos.9 and 10 mills. There is no dispute with regard to the same. They have also filed partnership deeds in proof of the same. Petitioner Nos.4 and 5 are no way connected with petitioner No.10 Mill. Likewise, petitioner Nos.6 to 8 are no way connected with the management and affairs of petitioner No.9 Mill. The said aspects were not considered by the respondents while issuing the impugned notices in Form Nos.4 and 5. 34
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iii) In S.K. Bhargava8, the Apex Court while exercising the provisions of the Haryana Public Moneys (Recovery of Dues) Act, 1979 held that even though Section 3 does not expressly provide for an opportunity being given to the alleged defaulter to explain as to whether any amount is due or not but in view of the nature of the said provision, the principles of natural justice must be read into it. The requirement of determination of the sum due by the Managing Director must be regarded as providing for the Managing Director hearing the alleged defaulter before coming to the conclusion as to what is the sum due. The very use of the word "determine" and "sum due" implies that there may be a lis between the parties and they have to be heard before a final conclusion is arrived at by the Managing Director. It is not a mere claim of the Corporation which is forwarded to the Collector for realisation, but it is the "sum due" as determined by the Managing Director which alone is recoverable. The determination cannot be done without notice to the alleged defaulter.
iv) It is also the specific contention of the petitioners that the properties of third parties, who are not revenue defaulters cannot be attached. They have placed reliance on the principle laid down in 35 KL,J W.P. No.17985 of 2024 & batch Taherunnisa Begum3. In the said decision, paragraph Nos.18, 19 and 26 are relevant and the same are extracted hereunder:
"18. In B. Kameswaramma v. Tahsildar, Tenali, 1975 (2) APLJ 26, Justice O. Chinnappa Reddy (as he then was) held that it is not open to the Tahsildar to attach property, which did not stand in the defaulters name.
19. This Court in Kalimili Radhakrishnaiah v. The Govt. of Andhra Pradesh, AIR 1979 AP 255 held that Section 5 of the Act empowers the Collector or any other officer empowered by him in that behalf to proceed against property belonging to a defaulter alone. It was also held that even assuming for a moment that if a person was in the position of a trustee and the state of a beneficiary, it would still not render the sale valid if it is not made in accordance with the requirement of the Act and that the person to whom loan was advanced for sinking the well alone but not a third party can be regarded as the defaulter for the purpose of the Act. This Court further held as follows:
"Section 5 of the Act itself gives an indication of the meaning of "defaulter" though this term has not been defined in the Act as it provided for steps to be taken for the recovery of arrears of revenue by proceeding against movable or immovable properties of the defaulters. Almost every one of the relevant sections in the Act refers to defaulter alone and not to the persons other than the defaulter. If it is proposed to 36 KL,J W.P. No.17985 of 2024 & batch recover the amount from the plaintiff on the ground that he has taken over all the liabilities of the family, the proper remedy, if any, would be to file a civil suit against him but in no event property admittedly belonging to him could be validly attached and sold under the Act for realization of arrears due from Sankaraiah who alone is the defaulter in this case."
26. Admittedly, the petitioners are not the revenue defaulters. Therefore, their properties cannot be a subject-matter of adjudication or sale, without determining their liability to pay the said amount or that the said properties were purchased by the revenue defaulter in their name benami. In the absence of the same, the impugned order, dated 17- 11-1999, passed by the Collector, Kadapa and the Gazette Notification, dated 17-8-2000, attaching the properties of the petitioners, cannot be sustainable and the same are accordingly quashed. However, this order shall not preclude the respondents to proceed in the manner authorized under the Act or any other law, if they are so advised."
v) As discussed above, the petitioners in W.P. No.17985 of 2024 are only shareholders, they are not revenue defaulters and their liability is to the extent of their share held. Petitioner Nos.4, 5, 6, 7 and 8 in W.P. No.18357 of 2024 are claiming that they have nothing to do with petitioner Nos.9 and 10 rice mills. Therefore, before issuing the distraint 37 KL,J W.P. No.17985 of 2024 & batch order in Form No.1, impugned demand prior to attachment of land in Form No.4 and notice of attachment in Form No.5, the respondents did not consider the said aspects. Therefore, on the said ground alone, the said order and notices are liable to be set aside.
18. It is also the specific contention of the petitioners in W.P. Nos.17993 of 2024 and 17985 of 2024 that the respondents have placed properties of the petitioners therein in the list of prohibitory properties under Section - 22A of the Registration Act, 1908, by way of issuing communication dated 27.05.2024. It is relevant to note that vide communication dated 27.05.2024, the District Collector, Suryapet District, respondent No.5 in the said writ petitions, requested respondent No.12 - Sub-Registrar, Kodada, to include the properties belonging to the Directors, Shareholders and Family Members of petitioner No.1 rice Mill in the list of prohibitory properties.
i) In the light of the above, it is relevant to note that in P. Srinivasulu v. The Sub-Registrar, Renigunta, Chittoor District9, the High Court of Andhra Pradesh at Hyderabad while dealing with Section
- 22-A of the Registration Act, detailed as follows: 9
. 2012 (6) ALD 260 38 KL,J W.P. No.17985 of 2024 & batch "A perusal of the aforesaid provisions would show that for class of documents relating to the properties covered by Section 22-A(1)(a), (b), (c) and (d) of the Registration Act, there is prohibition for registration, even without issuing any notification. But for the class of documents covered by Section 22- A(1)(e), the State Government is empowered to issue notification prohibiting registration of the documents relating to the properties in which avowed or accrued interests of Central and State Governments, Local Bodies, Educational, Cultural, Religious and Charitable Institutions is likely to adversely affect."
ii) Likewise, in Vinjamuri Rajagopala Chary v. Principal Secretary, Revenue Department, Hyderabad10, a Full Bench of the High Court of Judicature for the States of Telangana and Andhra Pradesh at Hyderabad held as follows:
"36. (vi) The properties covered under clause (e) of Section 22-A shall be notified in the official gazette of the State Governments and shall be forwarded, along with the list of properties, and a copy of the relevant notification/gazette, to the concerned registering authorities under the provisions of Registration Act and shall also place the said notification/gazette on the aforementioned websites of both the State Governments. The Registering 10 . 2016 (1) ALT 550 39 KL,J W.P. No.17985 of 2024 & batch authorities shall make available a copy of the Notification/Gazette on an application made by an aggrieved party.
19. Having regard to the position of law as stated above, and the material placed before this court, admittedly, there is no notification issued by the Government in exercise of its powers either suo moto or based on any application by any person. Though, it is stated by the Learned Advocate General that the concerned police authorities having regard to the complaints received, have issued the impugned communications directing the authorities not to register further documents, it is not shown to this Court that any communication having been addressed to the State Government requesting for issue of any notification in relation to the immovable properties from not being registered by placing the same in prohibitory list interalia including the petitioners properties.
20. Further, under the provisions of the Act, whereby the power to refuse to register a document being conferred only on the registering authority in respect of the properties for which a notification is issued by the State Government under Section 22- A(e) of the Act, and the Registration Act, 1908, being a complete code in itself, the action of the 17 registering authority in refusing to register a validly executed document on its presentation, on the basis of the impugned communications issued by the police 40 KL,J W.P. No.17985 of 2024 & batch authorities, is contrary to the powers conferred on the said authority under the Act. The submission of the Learned Advocate General that the communication issued directing the Registering authority not to entertain further registration cannot be construed as is not in the nature of seizure contemplated under Section 102 Cr.P.C. and that it is only in the course of investigating into the crimes registered, it is to be seen that exercise of such power by the authority should be expressly conferred on such authority by the statute. No such provision under statute conferring power on the police authorities to address such communication has been shown to this court.
21. The learned Advocate General placing reliance on the judgment of the Hon'ble Supreme Court in Nevada properties (supra) [2019 AIR 4554 (SC)] and by drawing attention of this Court to para 20 of the said judgment, wherein the Hon'ble Supreme Court observed that the authorities are empowered to seize the documents relating to 18 immoveable properties, would submit that the police authorities in the course of investigation into any crime are duly authorized to 13 seize title documents as they are considered as movable property under Section 102 of Cr.P.C. and in the facts of the present case instead of resorting to seizure after such documents are executed, the respondent police authority had issued the impugned communication not to register any documents 41 KL,J W.P. No.17985 of 2024 & batch presented for registration and such action is in preventive nature.
22. Though the above submission of the learned Advocate General is appealing at the first blush, in absence of any provision of law conferring such power on the Station House Officer to issue communication of such nature, the only source of power referable is Section 102 Cr.P.C. If Section 102 of Cr.P.C. is considered as source of power, the same applicable only in respect of moveable property and such power does not extend to immoveable property, as has been observed by the Hon'ble Supreme Court in Nevada properties (supra). Though, the Hon'ble Supreme Court in the above decision has observed that the power under Section 102 Cr.P.C. can be exercised in 19 relation to the documents of title relating to immovable property, no material is placed before this Court to show that any of the documents either relating to the petitioner or petitioners predecessors in title having been seized in connection with any crime under investigation, requiring further alienation from being stopped."
iii) Thus, issuance of Notification under Section - 22-A (1) (c) of the Registration Act is mandatory to mention properties in the list of prohibitory properties. In the present case, there is no notification issued in terms of Section - 22-A (1)(c) of the Registration Act. The District 42 KL,J W.P. No.17985 of 2024 & batch Collector, vide communication dated 27.05.2024 requested the Sub- Registrar, Kodada, to include the properties of shareholders, Directors and Family Members of petitioner No.1 Company in prohibitory properties list. Therefore, the same is in violation of the principle laid down in the aforesaid two (02) judgments.
19. It is relevant to note that Clause - 2 (b) of the Telangana Rice (Custom Milling) Order, 2015, vide G.O.Ms.No.18, dated 30.10.2015 deals with 'custom milling', and it says that milling of paddy, not belonging to the miller into rice in his rice mill on payment of mill charges in cash or in kind as prescribed by the Government of India/State Government. Clause - 8 (1) (e) (i) and (ii) envisages that any stock of rice or paddy in respect of which or part of which he has reason to believe, a contravention of any of the provisions of this Order has been, or is being, or is about to be committed; and that any package, covering or receptacle in which such stock of rice or paddy or is found, can be seized and removed with such aid or assistance as may be necessary.
20. Clause - 5 of the Agreement with Rice Milers for Custom Milling of Paddy KMS-2023-24 (Kharif & Rabi) deals with 'scope of work', and it says that the miller shall be supplied paddy in accordance 43 KL,J W.P. No.17985 of 2024 & batch with his/its milling capacity by the District administration as per the clauses of operational guidelines prescribed in Paddy Procurement Policy of KMS 2023-24 by the Telangana State Government for custom milling of paddy procured by the Corporation. But, according to the petitioners, the respondents have dumped three times the paddy to that of capacity of the petitioners.
i) Clause - 9 of the said Agreement deals with 'in the event of default', and it says that if the miller diverts paddy stocks delivered for custom milling or indulge in purchasing raw rice of PDS clandestinely and attempting to deliver under CMR category, then the miller will be blacklisted and action will also be initiated against all the concerned as per Order, 2015 and also under Criminal Laws.
ii) Clause - 9.1 of the agreement deals with 'default in CMR delivery'. As per Clause - 9.1.1, the Collector (CS) shall take over paddy available in the mill premises and auction the same. The default miller cannot participate in the auction process in cases where balance paddy is available in the mill. The TSCSCL reserves the right to invoke the provisions of the R.R. Act, so as to recover the value of defaulted CMR from the miller who failed to deliver CMR within due date @ 125% of rates of CMR fixed by the Government of India along with 44 KL,J W.P. No.17985 of 2024 & batch interest @ 12% per annum on the actual payable amount and also any other expenditure incurred on that by the first party from the due date to the date of actual payment, along with expenditure incurred for auctioning process, duly deducting the amount obtained through auction of available paddy stocks, waiving of the penalty is not appealable.
iii) Clause - 9.1.2 of the agreement says that in cases where balance paddy is not available in the Mill, the TSCSCL shall collect the cost of short quantity of equivalent rice for the defaulted paddy @ 125% of rates of CMR fixed by the Government of India along with interest @ 12% per annum on the actual payable amount and also any other expenditure incurred on that by the first party from the due date to the date of actual payment. For the said purpose, the TSCSCL shall invoke the provisions of the R.R. Act. Waiving of the penalty is not appealable. Therefore, power is available to the respondents including TSCSCL for initiation of the R.R. Act. But, at the same time, they have to follow the procedure laid down under the R.R. Act. Before initiation of recovery of arrears under the provisions of the R.R. Act, the respondents have to first determine the said arrears and then proceed with recovery of the same. Without determination, they cannot recover it. In the present case, the respondents failed to determine such arrears before issuing the impugned 45 KL,J W.P. No.17985 of 2024 & batch distraint order, demand prior to attachment of land and notice of attachment in Form Nos.1, 4 and 5, respectively.
iv) Clause - 10 of the said Agreement deals with 'Joint Custody', and it says that paddy received by the Miller from the respective PPC's shall be under the joint custody of the Corporation i.e., TSCSCL and Miller. On behalf of the Corporation, the Deputy Tahsildar (CS) of respective area or any other official nominated by the Collector (CS) shall be the joint custodian. Placing reliance on the same, learned counsel for the petitioners would contend that there is no default by the petitioners and question of diverting the rice in black market does not arise.
21. It is also relevant to note that according to the petitioners, TSCSCL and other respondents did not pay milling charges and transport charges to them. Statements showing the details are also filed. Therefore, the respondents have to consider the said aspects. However, this Court cannot consider the said aspect in the present writ petitions where challenge is with regard to initiation of proceedings under the R.R. Act. If the respondents did not pay such milling charges and transport charges, liberty is granted to the petitioners to take steps in accordance with law.
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22. The petitioners have also filed No Due Certificates for the year 2016-17, 2017-18 and 2021-22 etc., to contend that there were no dues by them. The respondent authorities have to consider the said aspects while initiating proceedings under the R.R. Act.
23. It is also apt to note that Clause - 10 of the Order, 2015 deals with 'periodical verification of stocks with the miller', and it says that the Enforcement Officer shall periodically, which shall not be less than once a week, verify the paddy/rice stock in the mill and issue a certificate, and that copies of the said certificates shall be furnished to the Purchase Officer and the Collector exercising jurisdiction in the area. It is the specific contention of the petitioners that the same was not followed and, therefore, the respondents cannot blame the petitioners.
24. It is the specific contention of petitioner No.1 in W.P. No.17993 of 2024 that no notice was issued to it. The respondents have failed to file any proof to show that notice was served on it.
25. It is also apt to note that in Shiv Shankar Dal Mills Ltd., v. State of Haryana 11, the Apex Court held that where public bodies under colour of public laws recover people's money, later discovered to be 11 . AIR 1980 SC 1037 47 KL,J W.P. No.17985 of 2024 & batch erroneous levies, the dharma of the situation admits of no equivocation. A Division Bench of this Court also had an occasion to deal with the said issue as to whether Board Standing Orders are statutory in nature or non- statutory in K. Anjaiah v. Asst. Commissioner of Proh. & Excise12. As discussed supra, Form No.1, Appendix-II was issued under Standing Order No.41, paragraph No.25. Therefore, the respondents have to consider the same.
26. It is relevant to note that in the agreements, there is no clause stating that the Mills whether partnership firm or Limited Company has to inform the TSCSCL with regard to change of constitution, if any. Therefore, TSCSCL shall be careful while drafting the agreements and has to specifically fix responsibility on the millers whether it is a Company or Partnership Firm to necessarily inform the change of constitution of either partnership firm or Company. CONCLUSION:
27. In the light of the aforesaid discussion, the respondents did not follow the aforesaid procedure laid down under the R.R. Act while issuing destraint order in Form No.1 under Section - 8 of the R.R. Act; demand prior to attachment of land in Form No.4 under Section - 25 of the R.R. Act and Notice of attachment in Form No.5 under Section - 27 12 . W.A. Nos.711 & 911 of 2008, decided on 26.05.2022 48 KL,J W.P. No.17985 of 2024 & batch of the R.R. Act. Therefore, they are liable to be set aside and accordingly the same are set aside. However, this order will not preclude the respondent authorities in initiating proceedings afresh by strictly following the procedure laid down under the R.R. Act and also the principle laid down in the aforesaid judgments.
28. All these writ petitions are accordingly allowed. In the circumstances of the case, there shall be no order as to costs.
As a sequel thereto, miscellaneous petitions, if any, pending in the writ petitions shall stand closed.
_________________ K. LAKSHMAN, J 28th August, 2024 Mgr