IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No. 2795 of 1990 Date of Decision: April 15, 2009 M/s Bhatinda Rice Mills Pvt. Ltd. and others ...Petitioners Versus State of Punjab and others …Respondents CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE H.S. BHALLA For the Petitioner(s): Mr. G.C. Dhuriwala, Advocate, For the Respondent(s): Mr. P.K. Jain, Addl. AG, Punjab, Mr. S.K. Lamba, Advocate, Mr. Arun Bansal, Advocate, Mr. P.K. Goklaney, Advocate. 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This order shall dispose of Civil Writ Petition Nos. 2795, 5883, 6142, 6773, 8589 and 16801 of 1990 as common question of law has been raised in all these petitions. 2. These petitions filed under Article 226 of the Constitution, the petitioners have prayed for issuance of a direction to the respondents to pay the price which was prevalent at the time of taking rice under the Punjab Rice Procurement (Levy) Order, 1960. A C.W.P. No. 2795 of 1990 further prayer made is to issue directions declaring instructions issued by the Senior Regional Manager, Food Corporation of India- respondent No. 3 whereby two rates of the rice taken have been fixed as also the instructions dated 13.10.1989 against sub-section 3 of Section 3 of the Essential Commodities Act, 1955 (for brevity, ‘the Commodities Act’). 3. The petitioners are registered under the Punjab General Sales Tax Act, 1948 (for brevity, ‘the Act’) and the Central Sales Tax Act, 1956, and are licence holder under the Punjab Food Grains Dealers Licensing and Price Control Order, 1978. The business of the petitioners is to purchase paddy from the markets of Punjab and shell the paddy into rice. The 75 percent of the shelled rice is procured by the respondents according to the Punjab Rice Procurement (Levy) Order 1983 (for brevity, ‘the 1983 Levy Order’), and 25% is left with the miller for sale n the open market. The Government provided a special assistance for the farmers for the sale of their paddy to the millers before 13.10.1989 @ Rs.10/- per quintal for each variety of paddy and the farmers who had sold their paddy at the old support price but less than the revised support price were to be paid the difference only i.e. revised support price minus the original price paid to the farmers in the shape of special assistance. The policy of the Government is to give special assistance to the farmers in the form of support price for their paddy produce sold by them to the millers or other dealers in the form of a bonus at the rate of Rs. 10/- per quintal. On 13.10.1989, respondent No. 3 issued instructions (P-1) about the revised rates of rice according to which for the price procured from 2 C.W.P. No. 2795 of 1990 the paddy purchased uptil 12.10.1989 the rates of levy of rice was to be the same as before 12.10.1989. 4. According to the petitioners the rice procured after 13.10.1989 as per instructions 13.10.1989 (P-1) was to attract two different prices. The rice shelled out of the paddy, which was procured upto 12.10.1989, was to be procured at old rates and for the paddy purchased after 12.10.1989, the rate was to be different. According to the learned counsel the fixation of two rates by the respondents is arbitrary as the rates were required to be fixed strictly according to sub-section 3 of Section 3 of the Commodities Act. According to the petitioners the rice which was procured by the respondents was required to be paid at the price prevalent at the time of procurement of the rice and the respondents cannot make the payment at two different rates when the commodity is the same. According to the learned counsel, the paddy is converted into rice and rice is entirely a different item than paddy which cannot be treated by the respondents as one item. Therefore, the paddy procured before 12.10.1989 was purchased at one rate prevalent at that time and paddy purchased after 12.10.1989 was at the rate prevalent at that time. According to the petitioners when there were no different rates for purchase of paddy there cannot be two different rates of procurement of rice by the respondents under the 1983 Order. Learned counsel has also submitted that even otherwise there is enhancement of labour rates and the said enhancement comes to around 35% and other expenses for shelling of paddy in their mills. Therefore, less rate of procurement of rice by the respondents is just 3 C.W.P. No. 2795 of 1990 to put the millers to a financial loss. 5. In the written statement filed by respondent No. 3 the stand taken is that under the 1983 Order every rice miller is required to sell 75% of the rice manufactured by him at the procurement price fixed by the Government. The support price of paddy upto 12.10.1989 and the procurement price of rice upto 12.10.1989 was as under: “Variety Support price of Procurement price paddy (per qtl.) of rice (per qtl.) Common Rs 175/- Rs.294.55 Fine Rs. 185/- Rs.319.90 Superfine Rs.195/- Rs.338.90” 6. The Government of India, vide letter dated 12.10.1989, revised the price of paddy w.e.f. 13.10.1989 by Rs. 10/- in respect of all varieties of paddy. The procurement price of rice was also correspondingly raised. The price for levy rice manufactured out of paddy purchased on or after 13.10.1989 was to be paid at the new rates whereas the price of levy price manufactured out of the paddy purchased on or before 12.10.1989 was to be paid at the old rate. The difference of Rs 10/- per quintal in the support price of paddy purchased upto 12.10.1989 was to be paid by respondent No. 3 to the farmers and the difference has already been paid by the respondent No. 3 to the farmers. In view of this it is averred that petitioners are not entitled to the revised rate of levy rice in respect of the rice manufactured out of the paddy purchased upto 12.10.1989. 4 C.W.P. No. 2795 of 1990 7. In C.W.P. No. 16801 of 1990, an additional issue has also been raised in para 5 of the written statement. According to the petitioners, the levy rice of earlier years due to the Food and Supplies Department were cleared by the year 1989-90 and they were entitled to the prevalent rates as per instructions dated 13.10.1989. The respondents have clarified that the petitioners were defaulter and had offered to fulfill the demand concerning supply of levy rice in respect of the year 1987-88. Therefore, they were to supply the levy rice on the same terms and conditions as prevalent in 1987-88. 8. Having heard learned counsel for the parties and perusing the record with their assistance we find no invidious discrimination between the two rates fixed as on 12.10.1989 and thereafter on 13.10.1989. It would be appropriate to make a reference to sub-section (3) of Section 3 of the Commodities Act, which reads thus:- “3. Power to Control Production, Supply, Distribution etc. of essential commodities: (1) & (2) xxx xxx xxx xxx (3) Where any person sells any essential commodity in compliance with and order made with reference to clause (f) of sub-section (2), there shall be paid to him the price therefore as hereinafter provided: (a) Where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price; - (b) where no such agreement can be reached, the price calculated with reference to the price, if any; 5 C.W.P. No. 2795 of 1990 (c) where neither clause (a) nor clause (6) applies, the price calculated at the market rate prevailing in the locality at the date of sale.” 9. A perusal of the aforesaid provision makes it clear that a person who sells an essential commodity in compliance with an Order made with reference to sub-section (2)(f), is to be paid either the agreed price in a case where the price can be fixed under this section or the price calculated with reference to the controlled price or the price calculated at the market rate prevailing in the locality on the date of the sale. It is pertinent to notice that under sub-section (2)(f), any Order made under sub-section (1) could provide for requiring any person holding any stock or engaged in production or who is in the business of buying or selling of any essential commodity, to sell the whole or a specific part of the quantity, held any stock produced or received by him, or any such commodity which is likely to be produced or received by him, to sell the same when actually produced or received by him to the Central Government or to the State Government or to an officer or an agent to Government or to a Corporation owned or controlled by such Government etc. 10. It is in pursuance to the aforesaid provision that the 1983 Levy Order was issued and the price was fixed. In order to provide a special assistance to the farmers, a bonus of Rs. 10/- per quintal was given for each variety of paddy. The special assistance of Rs. 10/- in the support price of paddy purchased upto 12.10.1989 was to be paid by the Food Corporation of India-respondent No. 3 to the farmers, which stood paid in respect of the purchases made upto 12.10.1989. 6 C.W.P. No. 2795 of 1990 Therefore, the claim of the petitioners seeking the revised rate of levy rice manufactured out of the paddy purchased upto 12.10.1989 would be wholly misconceived. Accordingly, we are unable to see any arbitrariness by fixing aforesaid two rates as it was only a special assistance provided to the farmers in respect of the paddy purchased upto 12.10.1989. Additionally, in C.W.P. No. 16801 of 1990, the obligation sought to be fulfilled by the miller was of 1987-88 and no claim could be made for making payment at the prevalent market rate. 11. The argument of the learned counsel that the respondent State has recovered the price in respect of levy rice supplied by the petitioners to Central agency like the Food Corporation of India, is wholly ill founded. At one stage we had adjourned the hearing to ascertain from the learned State counsel as to whether the State had been paid in respect of the year 1989-90, the higher sale price than disbursed to the petitioners. Mr. P.K. Jain, learned Additional Advocate General, has made a categorical statement that there is nothing on record to suggest that the State has been paid the price of rice at a higher rate than the one disbursed to the petitioners. Accordingly, we find no merit in the aforesaid contention and the same is rejected. 12. For the reasons aforementioned, these petitions fail and the same are dismissed. (M.M. KUMAR) JUDGE (H.S. BHALLA) April 15, 2009 JUDGE 7 C.W.P. No. 2795 of 1990 okg/Pkapoor 8