Madhya Pradesh High Court

M/S Divyaahaar Foods Pvt.Ltd vs The State Of Madhya Pradesh on 28 January, 2025

     IN THE HIGH COURT OF MADHYA PRADESH
                 AT J A B A L P U R
                                BEFORE
              HON'BLE SHRI JUSTICE VINAY SARAF


                 WRIT PETITION No. 40416 of 2024
              M/S DIVYAAHAAR FOODS PVT.LTD
                          Versus
        THE STATE OF MADHYA PRADESH AND OTHERS


Appearance:

Shri Kailash Chandra Ghildiyal, learned Senior Counsel with Shri
Manoj Kumar Rajak and Shri Karnik Singh, learned counsel for the
petitioner.
Shri Amit Mishra, learned Panel Lawyer for the respondent/State.
Shri Guru Prasanna Singh Parihar, learned counsel for the
respondentno.3, 4, 5, 7 and 8.

Reserved on : 23.01.2025
Post for     : __.01.2025
_____________________________________________________________


                                 ORDER

The instant writ petition filed under Article 226 of the Constitution of India by the petitioner seeking following reliefs:

"(i) A writ, order or direction in the nature of mandamus directing the respondent authorities to allow the petitioner miller to lift the paddy for milling for the year 2024-25.

(ii) A writ, order or direction in the nature of the mandamus directing the respondent authorities not to cause any obstruction in lifting of the paddy for milling for the year 2024-25 unless and until the respondent no.4 appellate authority resolves the issue of quality of rice of the previous year which is pending for adjudication in a time bound manner.

(iii) A writ order or direction in the nature of certiorari quashing the impugned order dated 08.01.2025 (Annexure P-9) as the same is arbitrary and illegal.

(iv) Any other appropriate writ order or direction which this Hon'ble Court may deem just and proper in the nature and circumstances of the case."

2. Heard counsel for the parties for the purpose of final disposal.

3. According to the petitioner M/s Divyaahar Foods Private Limited,

the State Government has issued milling policy for providing paddy to

Rice Millers on certain conditions and in pursuance to the milling policy

of the year 2023-2024, the petitioner applied for registration for milling

which was accepted and on 02.02.2024 an agreement was executed with

M.P. Civil Supplies Corporation Limited, who provides paddy for

milling. In furtherance of the agreement, petitioner performed the milling

work and delivered the rice at DEO Warehouse, which was designated by

the Respondent No.3/Corporation and at the time of delivery of the rice,

quality was checked by surveyor and it was found of standard quality and

duly mentioned in the acceptance report.

4. As per the petitioner, after depositing the rice in DEO Warehouse

located in Gurh, Rewa, the petitioner had no control over the rice. Later

on, an investigation team was constituted by Respondent No.3, which

inspected the DEO Warehouse on 30.08.2024 and had taken sample of the

rice deposited by the petitioner in DEO Warehouse, which was found to

be of beyond reasonable level (BRL) i.e. of substandard quality.

According to petitioner at the time of inspection conducted by the

investigation team, the petitioner was not called for any explanation nor

any hearing was provided to the petitioner and directly by letter dated

27.09.2024 issued by General Manager (Milling), the direction was

issued to the petitioner to replace the alleged substandard quality rice

(BRL) with the rice of standard quality. Thereafter, the petitioner raised

objection regarding the investigation, collection of the sample and

declaring the rice as substandard quality on the ground that at the time of

delivering the rice to warehouse, surveyor checked the same and rice was

found to be fair average quality (FAQ), therefore, no liability can be

extended to the petitioner for replacing the rice. As per the petitioner, the

responsibility of the miller was to maintain and protect the quality of the

rice till the stock is handed over to warehouse and thereafter the miller is

not responsible for maintaining the quality of the rice after the stage of

stacking. The petitioner filed an appeal in terms of agreement before the

Managing Director of the Respondent No.3/Corporation assailing the

communication dated 27.09.2024, which is still pending.

5. Thereafter, petitioner applied for the season 2024-2025 and entered

into a fresh agreement for the year 2024-2025 in pursuance to the milling

policy floated by the respondent/Corporation for the year 2024-2025. The

petitioner provided bank guarantee of Rs.4,77,000,00/- in favour of the

Respondent No.4. A formal agreement was executed between the

petitioner and the District Manager, Rewa on 10.12.2024 for providing

the lots of paddy to the petitioner for the purpose of milling, however, no

paddy was provided to the petitioner for milling. The petitioner raised the

issue before the concerned authority and came to know that higher

authorities have restrained from providing paddy to the petitioner for the

purpose of milling and directions were issued to District Manager to

cancel the agreement executed with the petitioner on the ground that the

petitioner has failed to replace the BRL rice with FAQ as demanded by

the Corporation by communication dated 27.09.2024. Assailing the same,

the petitioner has approached this Court seeking directions to the

respondents/authorities to allow the petitioner to lift paddy for the

purpose of milling and for not causing any obstruction in lifting the paddy

and insisting upon the replacement of the rice in furtherance of the

communication dated 27.09.2024 until the disposal of the appeal

preferred by the petitioner before the appellate authority.

6. During the pendency of the petition, the respondents cancelled the

agreement on 08.01.2025 on the ground that as the material supplied by

the petitioner in the last year was found BRL and the petitioner has not

replaced the material as per the terms of the policy and agreement,

consequently, the petitioner is not entitled to carry out the milling work in

the year 2024-2025. The petitioner was informed to take back his security

deposit from the Respondent No.8.

7. Petitioner moved an I.A.No.332/2025 seeking amendment in the

writ petition, which was allowed by this Court and petitioner was

permitted to amend the petition. By the amendment, petitioner assailed

the order dated 08.01.2025, by which the agreement was cancelled on

various grounds and sought the relief of quashment of the cancellation

order.

8. Respondent Nos. 3, 4, 5, 7 and 8 submitted the common reply

whereby the action of the respondent no.8 was justified. It is submitted by

the respondent/Corporation that the paddy was provided to the petitioner

for the purpose of milling and after completing the milling work, the

petitioner supplied the rice which was found substandard i.e. BRL

therefore, the communication was issued on 27.09.2024 to the petitioner

to replace the rice by good quality material in furtherance of the Clause

10.11 of the milling policy of the year 2023-2024. However, petitioner

failed to comply with the communication, therefore, the petitioner is not

entitled to lift further material for the purpose of milling as per the policy.

As per Corporation, petitioner was under obligation to supply the rice of

standard quality, but the petitioner failed to supply the same and material

supplied by the petitioner was found of BRL quality, therefore, the

petitioner was not eligible to enter into the fresh agreement 2024-2025

and the agreement executed with the petitioner was liable to be cancelled

as the same was executed dehors the policy. Petitioner has already filed

an appeal as per Clause 13 of the agreement, which will be decided by the

appellate authority in accordance with law and in this way, the petitioner

has already availed the available alternate remedy, therefore, the present

petition is liable to be dismissed.

9. Additional reply has been filed by the Corporation, wherein the

Corporation has stated that the District Manager of the Corporation

erroneously entered into an agreement with the petitioner for 2024-2025

though the petitioner was not eligible for the same and when the matter

came to the knowledge of the higher officers, directions were issued to

District Manager, Rewa to cancel the agreement executed with petitioner,

as also the agreements executed with other defaulter millers. As per

respondent, huge quantity of 21260 bags of rice was found of BRL

quality therefore, until and unless the petitioner replaces the same with

FAQ, petitioner cannot be permitted to lift further material. The

Corporation prays for dismissal of the petition.

10. So far as the cancellation of the agreement executed for the year

2024-2025, the learned counsel for the Corporation submits that

petitioner is having alternate efficacious remedy of appeal as per the

terms of the contract therefore, no relief can be granted to the petitioner in

the present petition.

11. Learned Panel Lawyer for the respondent/State has not filed any

reply in the matter and supported the reply submitted by the Corporation.

12. The following facts are admitted in the present case;

(i) Petitioner, Company entered into an agreement with

the Respondent No.3, Corporation for the purpose of

milling of paddy, for the year 2023-2024 on 02.02.2024,

whereby it was decided that the Corporation will provide

paddy to the petitioner and after milling FAQ rice will be

deposited by the petitioner with DEO Warehouse and the

CMR (custom milled rice) should not be of BRL quality.

(ii) Petitioner lifted paddy and deposited rice with the

designated DEO Warehouse and at the time of deposition of

rice, the quality was checked by surveyor who found rice of

FAQ. An investigation team was constituted by the

Corporation, which inspected the DEO Warehouse on

30.08.2024 and sample of rice supplied by the petitioner

was taken and after examination rice was found to be BRL

i.e. substandard quality. As per terms no.2(V)(1) and 9 (II)9

of the agreement dated 02.02.2024, miller is under

obligation to replace BRL quantity by FAQ at his own

expenses. As per terms of the agreement, the

communication was issued to the petitioner for replacing

the 21,260 bags of rice which was found of BRL quality but

the petitioner has not accepted the liability to replace the

same and assailed the communication in appeal filed before

the Managing Director of the Corporation as per term no.12

of the agreement, which is still pending.

(iii) Fresh policy was issued for the year 2024-2025 and

petitioner registered itself upon the portal of the

Corporation for the purpose of fresh milling contract for

the year 2024-2025, which was executed between the

petitioner and Corporation on 10.12.2024. The petitioner

supplied the bank guarantee of Rs.4,77,000,00/-. The

agreement executed on 10.12.2024 was valid w.e.f.

10.12.2024 to 25.01.2025. Despite the execution of the

agreement with the petitioner, the petitioner was not

permitted to lift the paddy for the purpose of milling and no

paddy was supplied to the petitioner in furtherance of the

agreement dated 10.12.2024 on the ground that the

petitioner has failed to replace the rice of BRL quality with

FAQ. Complaining the same, the petitioner filed the present

petition before this Court and during pendency of the

petition on 08.01.2025, the agreement executed for the year

2024-2025 was cancelled by the Corporation. Petitioner has

not preferred any appeal assailing the order of cancellation

dated 08.01.2025 and challenged the same by amending the

present petition.

13. In the present matter, the aforesaid facts are admitted and the

following question arises for consideration:

"Whether the action of the Respondent/Corporation for

not supplying the paddy to the Petitioner for the purpose of

milling despite execution of the agreement on 10.12.2024 was

in accordance with the terms of the contract and the

prevailing policy of 2024-2025?"

14. Learned Senior Counsel appearing for the petitioner has pointed

out several provisions of the contract, and argued that the Corporation is

under obligation to provide the paddy to the miller in furtherance of the

agreement and the supply of the paddy for the purpose of milling cannot

be withheld upon the allegation that in last season, the petitioner supplied

the rice of BRL quality and not replaced upon the demand with the FAQ

quality. He further submits that the policy and agreements are separate for

both the years and the petitioner has already furnished the bank guarantee

of Rs.4,77,00000/- in furtherance of the agreement dated 10.12.2024 to

the Corporation, therefore, the action of the Corporation by not supplying

the paddy to the petitioner is not only contrary to the provisions of

contract but also arbitrary, illegal, incorrect and unjust. He further

submits that so far as the demand of replacing of 21260 rice bags of BRL

quality is concerned, the issue is pending before the Managing Director in

appeal and the same has not attained finality therefore, the same cannot

be made basis of depriving the petitioner from fresh supply. As per the

petitioner, respondent/Corporation entered into an agreement with the

petitioner for the year 2024-2025 even after having the knowledge that

petitioner has not complied with the demand dated 27.09.2024 and has

assailed the same in appeal therefore, the Corporation cannot deny to

fulfill the obligation under the contract. He further submits that even as

per the policy issued for the year 2024-2025, there is no clause to the

effect that if miller has failed to replace the rice of BRL quality with FAQ

quality, no fresh agreement should be executed. He has pointed out

Clause 5.1 of the policy and submits that as per the policy, the petitioner

was competent to enter into a fresh agreement. He also submits that the

issue of replacing alleged BRL by FAQ is pending before the appellate

authority therefore, the same cannot be made basis for the purpose of

cancellation of agreement. The action of the respondent by which they

cancelled the agreement during the pendency of this petition is highly

objectionable, ex facie arbitrary, illegal and has been taken with malafide

intention to pressurize the petitioner to succumb to the illegal demand of

the Corporation.

15. Learned Senior Counsel relied on the judgment delivered by

Supreme Court in Subodh Kumar Singh Rathour Vs. The Chief

Executive Officer & Ors. reported as 2024 SCC Online 1682 whereby

the Apex Court has held that the cancellation of a contract deprives a

person by his valuable rights and is a drastic step, often due to significant

investment having already made by the parties involved during the

subsistence of the contract. The public authorities should be circumspect

in disturbing or wriggling out of its contractual obligations through means

beyond the terms of the contract in exercise of their executive powers and

if the Court is of the view that powers have been exercised arbitrarily by

public authority in canceling the contract, which was issued in favour of

the private entity, the interference under Article 226 of the Constitution of

India is permissible. The relevant paras of the judgment are as follows:

"58. Thus, the demarcation between a private law element and public law element in the context of contractual disputes if any, may be assessed by ascertaining whether the dispute or the controversy pertains to the consensual aspect of the contract or tender in question or not. Judicial review is permissible to prevent arbitrariness of public authorities and to ensure that they do not exceed or abuse their powers in contractual transactions and requires overseeing the administrative power of public authorities to award or cancel contracts or any of its stipulations.

59. Therefore, what can be culled out from the above is that although disputes arising purely out of contracts are not amenable to writ jurisdiction yet keeping in mind the obligation of the State to act fairly and not arbitrarily or capriciously, it is now well settled that when contractual power is being used for public purpose, it is certainly amenable to judicial review.

x x x x x

65. The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned action is arbitrary or not, is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, the performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason

and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that be you ever so high, the laws are above you.

x x x x x x

69. To ascertain whether an act is arbitrary or not, the court must carefully attend to the facts and the circumstances of the case. It should find out whether the impugned decision is based on any principle. If not, it may unerringly point to arbitrariness. If the act betrays caprice or the mere exhibition of the whim of the authority it would sufficiently bear the insignia of arbitrariness. In this regard supporting an order with a rationale which in the circumstances is found to be reasonable will go a long way to repel a challenge to State action. No doubt the reasons need not in every case be part of the order as such. If there is absence of good faith and the action is actuated with an oblique motive, it could be characterised as being arbitrary. A total non-application of mind without due regard to the rights of the parties and public interest may be a clear indicator of arbitrary action.

70. One another way, to assess whether an action complained of could be termed as arbitrary is by way of scrutinizing the reasons that have been assigned to such an action. It involves overseeing whether the reasons which have been cited if at all genuinely formed part of the decision-making process or whether they are merely a ruse. All decisions that are taken must earnestly be in lieu of the reasons and considerations that have been assigned to it. The Court must be mindful of the fact that it is not supposed to delve into every minute details of the reasoning assigned, it need not to go into a detailed exercise of assessing the pros and cons of the reasons itself, but should only see whether the reasons were earnest, genuine and had a rationale with the ultimate decision. What is under scrutiny in judicial review of an action is the decision-making process and whether there is any element of arbitrariness or mala fide."

16. Learned Senior Counsel further submits that the cancellation of the

agreement be quashed and the respondents be directed to comply with the

terms of the contract dated 10.12.2024 by supplying the paddy to the

petitioner for the purpose of milling.

17. Learned counsel appearing on behalf of the respondent/Corporation

supported the action of the Corporation by referring Clause No.4.3 of the

policy and submits that as per the policy, if the miller has failed to replace

the material of BRL quality with FAQ, further supply is not permissible

to the miller. He further submits that in the present matter, opportunity

was granted to the petitioner to replace the material but the petitioner

failed to replace the BRL quality rice with FAQ and therefore, the action

taken by the Corporation is in accordance with the policy. He further

submits that as per the policy, the petitioner was not competent to enter

into an agreement for the year 2024-2025 as the petitioner was not

entitled to lift paddy for the purpose of milling as per Clause 4.3 of the

policy as well as Clause 9 (ii)(9) of the agreement. He submits that the

petitioner registered itself on the portal of the Corporation for the purpose

of entering into a fresh agreement after knowing the terms and conditions

of the policy, the agreement and the petitioner was aware of that in the

absence of replacement of the BRL quality of rice by FAQ the petitioner

will not be entitled to lift paddy for the purpose of milling and therefore,

the petitioner cannot raise any grievance against the Corporation for not

supplying the paddy and cancellation of the contract.

18. He further submits that petition is having alternate efficacious

remedy of appeal against the cancellation order dated 08.01.2025 as per

per Clause 18 and 20 of the agreement and no relief can be granted to the

petitioner in writ petition. He further submits that petitioner is a defaulter,

who entered into a contract on 02.02.2024 for the purpose of milling of

paddy and supply FAQ CMR, but failed to supply the standard quality

rice and upon inspection the rice was found of BRL quality therefore, as

per terms of the agreement and policy, the communication was issued and

opportunity was granted to the petitioner to replace the material with

standard quality rice however the petitioner instead of complying with the

communication challenged the same before the appellate authority and

registered itself again on the portal for the next season in a routein

manner and succeed to enter into fresh agreement with the Corporation

on 10.12.2024. When this fact came to the knowledge of the higher

authorities of the Corporation that the petitioner executed fresh

agreement with the Corporation, the same has been cancelled in

accordance with law. He further submits that in the present matter, no

relief can be granted to the petitioner and petition is liable to be

dismissed.

19. Learned P.L. appearing on behalf of the State supported the

arguments advanced by the learned counsel for the Corporation and prays

for dismissal of the petition.

20. Having heard learned counsel for the parties and having gone

through the material on record, it appears that upon inviting online

applications for registration of millers for the purpose of milling of paddy,

petitioner applied and registered itself for the year 2023-2024 and an

agreement was executed on 02.02.2024. However, the allegation against

the petitioner is that CMR (custom milled rice) deposited by the

petitioner with designated warehouse was upon inspection found BRL

quality and, consequently, as per the terms of the policy and contract

dated 02.02.2024, the petitioner was asked to replace 21260 bags of BRL

quality with FAQ (fair average quality). The relevant provisions of policy

enabling the Corporation to make the demand of FAQ reads as under:

"14- pkoy ds ch-vkj-,y- gksus ds laca/k esa nkf.Md izko/kku %& 14-1 pkoy ds ch-vkj-,y- gksus ij lacaf/kr feyj }kjk vekud ykWV dks 10 fnol esa cnydj ekud ykWV tek djuk vfuok;Z gS] fefyax dk;Z dks n`f"Vxr j[krs gq,s feyj }kjk 10 fnol ds vanj dqy vekud ykWV ds 50 izfr'kr vekud ykWV vixzsM djus ij vixsM dh x;h ek=k dh 50 izfr'kr /kku ds mBko djus dh vuqefr gksxhA ;fn 'ks"k 50 izfr'kr vekud ykWV 10 fnol esa ugh cnyk tkrk gS] rks ;Fkkor /kku ifjnku esa jksd jgsxhA 14-2 pkoy ds ch-vkj-,y- gksus ij jkT; dh fefyax jkf'k ,oa vixzsMs'ku jkf'k dh 04 xquk isukYVh feyj }kjk ns; gksxhA bldh x.kuk feyj }kjk dkWijs'ku dks lh,evkj pkoy tek djus ds mijkar fdlh Hkh Lrj ij fd;s x;s xq.koRrk fujh{k.k esa chvkj,y

ik;s tkus ij gh dh tk;sxhA HkaMkj.k dsanz esa feyj }kjk lh,evkj tek fd;s tkus gsrq yk;s tkus ij xq.koRrk ijh{k.k esa ik;s x;s ,sls chvkj,y Lda/k tks fd xksnke esa tek fd;s tkus ds iwoZ gh feyj dks okil fd;k x;k gks] bls x.kuk esa 'kkfey ugha fd;k tk;saA 14-3 feyj }kjk iwjs [kjhQ foi.ku o"kZ 2023&24 esa fefyax gsrq fd;s x;s dqy vuqca/kksa ds fo:) fefyax mijkar iznkf;r dqy lh,evkj dh ek=k dk 10 izfr'kr vFkok vf/kd lh,evkj pkoy ds fjtsDV gks tkus@lh,evkj pkoy ds vixzsM djus dh fLFkfr esa] feyj dks uksfVl fn;k tkdj pkyw [kjhQ lhtu ds fy;s Cysd fyLV ?kksf"kr dj vuqca/k fujLr fd;k tk;sxkA blds lkFk&lkFk dafMdk 14-2 ds varxZr dk;Zokgh lekukarj :i ls dh tk;sxhA The relevant clauses of agreement dated 02.02.2024 reads as under:

2-¼V½ f}rh; i{kdkj dks Hkkjr ljdkj [kk| ea=kyd }kjk i= Øekad F.No. 40-4/2020/QCC ubZ fnYyh fnukad 16-07-20214 ls lh-,e-vkj- ds laca/k esa tkjh SOP (Standard Operating Procedure) dk vuqikyu djuk vfuok;Z gksxk] ftlds vuqlj BRL ,oa Beyond FSSA CMR ds fujkdj.k esa fuEukuqlkj dk;Zokgh dh tk,xhA %& 2-¼V½1 fdlh Hkh Lrj ij fujh{k.k esa lh,evkj ds chvkj,y ik, tkus ij f}rh; i{kdkj dks chvkj,y pkoy dh ek=k dks vixzsM@fjIysl fd;s tkus gsrq uksfVl tkjh fd;k tk,xkA f}rh; i{kdkj }kjk chvkj,y ek=k dks ,Q,D;w pkoy ls fjIysl vius gtsZ [kpsZ ij fd;k tk,xkA x x x x x x 9(II)- ददतीय पककार को पदाय धान के दवरद सीएमआर जमा न करने / दनमन गणु वता का सीएमआर जमा करने पर दनमनानसु ार शादसत अदधरोदपत की जायेगी-

Ø- fooj.k 'kkfLr dk Li:i 1 lh,evkj ds ijh{k.k mijkar ik, x, :- 2 izfr fDoaVy izfrfnu ,oa 1 ekg chvkj,y pkoy dh owpuk feylZ esa ekud Lrj dk pkoy tek djus dks izkIr gksus dh fnukad ls 15 ij tek izfrHkwfr jkf'k jktlkrA fnlo esa ekud Lrj dk pkoy tek u djus ij

2 fu/kkZfjr vkmV VuZ js';ks vuqlkj de tek dh xbZ ek=k dh vkfFkZd pkoy tek u djuk ykxr ls 125 % jkf'k dh olwyh 3 ,d lhtu esa feyls }kjk fd, x, orZeku [kjhQ ekSle ds fy, feylZ dqy vuqca/k esa ls nks ckj vuqca/k dks Cysd fyLVsM vuqlkj fefyax u djuk 4 feylZ }kjk miktZu dsUnz@xksnke ls de tek ek=k ij :- 2 izfr /kku izkfIr fnukad ls 25 fnol dh fDaoVy@fnu dh isukYVhA vof/k esa MPSCSC/FCI ds xksnke esa pkoy tek u djukA 5 feylZ ifjlj ds lR;kiu esa /kku@pkoy dh de ikbZ xZ ek=k dh iznk; /kku ;k mlls fufeZr pkoy vkfFkZd ykxr dk 5 xq.kk jkf'k dh ek=k de ik, tkus ij olwyhA 6 vUrftZyk fefyax dh Lohd`fr fefyax vuqefr dh Lohd`fr Loeso mijkar 15 fnol esa feylZ }kjk fujLrA vuqca/k u djuk 7 vUrftZyk pkoy ifjogu dh Lohd`fr Loeso fujLr ,oa :- 2 izfr Lohd`fr mijkar 15 fnol esa lacaf/kr fDaoVy@fnu dh isukYVhA ftys esa pkoy tek u djuk 8 feylZ dh vlko/kkuh] nq"d`R;] {kfr jkf'k dh olwyhA 'kkldh; {kfr djus ij jkf'k dh olwyh 9 Chvkj,y pkoy 15 fnol esa ekud pkoy tek u djus dh cnydj ekud pkoy miyC/k u vof/k rd /kku ifjnku ij jksdA djus ij 10 Xkksnke esa HkaMkj.k mijkar ijh{k.k esa chvkj,y pkoy ek=k ij ns;

chvkj,y pkoy ik, tkus ij fefyax ,oa izksRlkgu jkf'k dh 4 xq.kk jkf'k olwyhA 11 ,d miktZu lhtu esa xksnke esa tek feylZ dks ,d o"kZ ds fy, Cysd pkoy esa ls yxkrkj 3 fefyax fyLVsM] vkxkeh vuqca/k fujLr ,oa vuqca/k varxZr chvkj,y pkoy ik, chvkj,y pkoy ek=k ij ns;

   tkus ij                                 fefyax ,oa izksRlkgu jkf'k dh 4 xq.kk
                                           jkf'k olwyhA

12 Beyond FSSAI fyfeV esa pkoy ik, 3 o"kZ ds fy;s CysdfyLVsM ,oa LVkWd tkus ij feyj dks okil ugha fd;k tk;sxkA

x x x x x x 9(IV)- fujh{k.k esa lh,evkj ds chvkj,y ik, tkus ij f}rh; i{kdkj dks chvkj,y pkoy dh ek=k dks fjIysl fd;s tkus gsrq

uksfVl tkjh fd;k tk,xkA f}rh; i{kdkj }kjk chvkj,y ek=k dks ,Q,D;w pkoy ls fjIysl vius O;; ij fd;k tkuk gksxkA "

21. When the Corporation came to know that the CMR supplied by the

petitioner was of BRL quality, communication was issued on 27.09.2024

for the purpose of upgradation of the supplied CMR. As the same was not

acceptable to the petitioner, the petitioner assailed that communication

before the Managing Director by preferring the appeal, which is pending.

Thereafter, the petitioner registered itself for the purpose of milling of

paddy for the year 2024-2025 and an agreement was executed under new

policy between petitioner and respondent/Corporation on 10.12.2024

w.e.f. 10.12.2024 to 25.01.2025 which was cancelled by respondent on

08.01.2025 during the pendency of the present petition on the ground that

as the petitioner failed to replace BRL quality of CMR with FAQ, the

petitioner was entitled to enter into any agreement with respondent.

22. After considering the provisions of policy of 2023-2024, 2024-

2025 and the terms of agreements dated 02.02.2024 and 10.12.2024, it

appears that there is no clause which prohibits the execution of fresh

agreement for fresh period with the miller who has not replaced the CMR

of BRL quality with FAQ in the previous season.. Consequently, the

contention of the respondent/Corporation that petitioner was not entitled

for the execution of fresh agreement for the year 2024-2025, is not

acceptable.

23. Learned counsel for the respondents failed to point out any clause

from the policy or agreement which stipulates that in case of failure of the

miller to replace CMR of BRL quality with FAQ, no fresh agreement can

be executed for the purpose of next season. At the same time, learned

counsel for the respondents failed to point out any clause from the policy

of 2024-2025 as well as agreement, which empowers the Corporation to

cancel or terminate the agreement unilaterally. In the absence of any

specific provisions in the contract or policy, the agreement which was

executed after raising the demand for replacing of BRL quality of CMR

with FAQ cannot be cancelled on the ground that the demand was not

fulfilled by the miller. Consequently, the action of the respondent to

cancel the agreement during the pendency of the petition appears to be an

attempt to wriggle out from its contractual obligation through means

beyond the terms of contract. Though the appeal is provided as per Clause

12 of the contract, but when the action of the respondent/Corporation

appears to be arbitrary, the same can be quashed by exercising the powers

under Article 226 of the Constitution of India as held by the Apex Court

in the matter of Subodh Kumar Rathour (supra).

24. The petitioner moved the present petition seeking directions to the

respondent/Corporation to supply paddy in furtherance of order dated

10.12.2024 for the purpose of milling, but during pendency of the

petition, the respondent/Corporation by communication dated 08.01.2025

cancelled the contract itself. It appears to be an attempt to avoid the

liability under the contract and therefore, the contract is deemed to be

remained in force up to the period for which it was executed i.e.

25.01.2025.

25. The crucial issue involved in the present case is whether the

Corporation can deny the supply of paddy to the petitioner on the ground

that the petitioner has failed to replace the CMR of BRL quality with the

FAQ. For the purpose of determining the said issue, the terms of the

policy for the year 2023-2024 are seen. Clause 14.1 of the policy as

reproduced herein above stipulates that if the supply of CMR was found

to be of BRL quality, the miller is under obligation to replace the same lot

within a period of ten days and if it upgrades 50% of the BRL quality

within ten days, it will be entitled to lift 50% of the paddy for the purpose

of milling and if it fails to upgrade the BRL quality with FAQ, the supply

of paddy will be stopped. Meaning thereby, if CMR supplied by the

miller is found to be of BRL quality, the miller has to upgrade the same

into FAQ quality by replacing the lot and if the miller fails to do so, no

fresh paddy will be supplied to miller for the purpose of milling.

26. Even in the contract dated 02.02.2024 the term no.2(v)(1) stipulates

that miller is under obligation to upgrade or replace the BRL quality into

FAQ quality at his own cost. Further term no.9(II) (9) provides that if the

miller fails to replace the CMR of BRL quality within 15 days, the further

supply of paddy shall be stopped. Meaning thereby even as per the policy

of the 2023-2024 and the terms of agreement, the petitioner is not entitled

to get further paddy for the purpose of milling in case it fails to replace

the BRL quality by FAQ. When the demand was issued to the petitioner

on 27.09.2024 for replacing the 21260 bags of BRL quality by FAQ, the

petitioner had two options; (i)- to challenge the demand by preferring an

appeal before the Managing Director and (ii)- to replace the BRL quality

CMR with FAQ. As the petitioner has chosen to prefer the appeal as per

the terms of the policy and agreement, the petitioner is not entitled to lift

further paddy for the purpose of milling until and unless the demand is set

aside in appeal.

27. As observed herein above that there was no impediment for

execution of the fresh agreement, the petitioner entered into fresh

agreement with the Corporation for the year 2024-2025 for the period

10.12.2024 to 25.1.2025, however, the policy issued in the year 2024-

2025 also provides the similar condition that if a miller has failed to

replace the BRL quality CMR with FAQ, it will not be eligible for fresh

paddy. The relevant provision reads as under:

"4-3 foxr [kjhQ foi.ku o"kksZa esa feyj }kjk dLVe fefyax ls pkoy ifjnku mijkar ijh{k.k esa BRL ik, x, pkoy dks vixszM dj ekud xq.koRrk pkoy dk ifjnku u fd;k x;k gksA"

28. The agreement dated 10.12.2024 was executed under the policy of

the year 2024-2025 and consequently terms of the policy are binding on

both the parties which provides that miller is not competent to mill the

paddy if in the last year, the CMR supplied by the miller was found of

BRL quality and the same was not upgraded by the miller in FAQ.

Similar provisions are there in Clause 13.6, 13.7, 13.9 and 14.1. Clause

14 .1 reads as under:

"14-1 pkoy ds ch-vkj-,y- gksus ij lacaf/kr feyj }kjk vekud ykWV dks 10 fnol esa cnydj ekud ykWV tek djuk vfuok;Z gS] ekud ykWV tek fd;s tkus rd /kku ifjnku esa jksd jgsxhA"

29. In the agreement dated 10.12.2024, the similar Clause 2(v)(i) is

available which creates a liability upon the miller to replace the BRL

quality CMR with FAQ. Clause 9(ii)9 and 9(iv) also provides for

replacing CMR and stopping the further supply in case of failure to

replace the material by FAQ.

30. In view of the above conspectus, it appears that there was no

impediment in execution of the fresh agreement for the year 2024-2025,

but at the same time, the clauses of the policy as well as agreement

prohibits for fresh supply of paddy to a miller, who fails to replace the

BRL quality with FAQ and therefore, the respondents have not committed

any error, illegality or irregularity in not supplying the fresh paddy to the

petitioner for milling purpose.

31. Learned Senior Counsel appearing on behalf of the petitioner has

vehemently argued that when the petitioner assails the communicated

dated 27.09.2024 before the appellate authority and as per the policy

fresh paddy could not be supplied to the petitioner, why the respondents

entered into the fresh contract with the petitioner. It appears that for the

purpose of execution of contract, the miller has to register itself on the

portal of the Corporation and upon registration on the portal the proposal

may be accepted by the Corporation for the purpose of execution of

agreement subject to the terms and conditions of the policy. The

petitioner itself applied on the portal for registration and execution of

fresh agreement for the year 2024-2025 and therefore, the agreement was

executed. Now the petitioner cannot take any advantage of execution of

agreement as the provisions of policy were in the knowledge of

petitioner, therefore, the petitioner cannot take the defense that the

petitioner was not aware that despite execution of agreement, the paddy

will not be supplied to him. The agreement was executed for the period

from 10.12.2024 to 25.01.2025. It may be understood that the same was

executed with a hope that demand raised by the Corporation on

27.09.2024 will be turned down by the appellate authority and petitioner

will be able to lift further quantity of paddy for the purpose of milling,

however, the appeal is still pending and the period of contract has also

expired. Under these circumstances, petitioner cannot take any benefit of

execution of agreement.

32. Consequently, the present petition is disposed of with the following

directions:

(I) The agreement executed between the petitioner and

respondent/Corporation on 10.12.2024 for the year 2024-2025 was valid

w.e.f. 10.12.2024 to 25.01.2025 as there was no impediment in the policy

or agreement to execute any fresh agreement.

(II) The action of the respondent/Corporation cancelling the agreement

dated 10.12.2024 on 08.01.2025 is arbitrary and illegal and consequently,

the same is hereby set aside and the agreement deemed to be in force

from 10.12.2024 to 25.01.2025.

(III) The petitioner was not entitled to lift the further stock of paddy for

the purpose of milling without replacing the alleged 21260 bags of BRL

quality with FAQ or quashment of demand by appellate authority.

(IV) The Corporation has not committed any error in not supplying the

fresh paddy to the petitioner as the appeal is still pending with the

appellate authority.

(V) This Court has not expressed any opinion on the issue of BRL

quality and the same shall be considered and decided by the appellate

authority in accordance with applicable terms of the policy and contract.

(VI) As the period of contract dated 10.12.2024 has already been over, no

further relief can be granted to the petitioner, however, the petitioner will

be entitled to take appropriate action for claiming damages before

appropriate forum.