CWP No.14119 of 2010.doc - 1 – HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** CWP No.14119 of 2010 Date of Decision: 10.08.2010 **** Akash Rice Mills and others . . . . Petitioners VS. Union of India and others . . . . . Respondents **** CORAM : HON’BLE MR.JUSTICE SURYA KANT **** 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? **** Present: Mr. DD Bansal, Advocate for the petitioners ***** SURYA KANT J. (ORAL) (1). The petitioner-rice mills seek quashing of the Circular dated 30.09.2009 (Annexure P3) issued by the Food Corporation of India regarding the payment of incentive bonus on levy rice. (2). The petitioners allege that the impugned Circular is not as per the spirit of paragraph 7 and/or in consonance with the Government of India Circular dated 2nd December, 2008 (Annexure P1). (3). In order to appreciate the contention, it may be mentioned that vide the Circular dated 02.12.2008, the Government of India has fixed the prices of levy rice for the Kharif Marketing Season (KMS 2008-09) for the paddy milled by the rice shellers and CWP No.14119 of 2010.doc - 2 – payment of incentive bonus by the State of Punjab thereupon. The relevant part of the aforesaid Circular (Paragraph 7) reads as follows:- “It is also clarified that FCI will release incentive bonus to the State Government/agency authorized by them against the total paddy milled by the miller to deliver the levy rice. In other words for instance at the out of turn ration of 67% for raw rice, 1 quintal of paddy gives 67 kilogram of raw rice and millers deliver 75% of 67 kg as levy rice i.e. 50.25 kg of levy rice. Therefore, when miller delivers 50.25 kg as levy rice, FCI would release incentive bonus of Rs.50/- per quintal of paddy to the State Government.” (4). In order to give effect to the above-reproduced policy decision, the FCI has issued a Circular dated 30.09.2009 (Annexure P3) the relevant part whereof reads as follows:- xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx “Sub: Procurement prices for levy rice during KMS 2008- 09 applicable for the period between 29.09.2008 and 20.10.2008 for paddy purchased by the millers – regarding. Please refer to your office memo No.4(5)/P&S/08- 09/Bonus/490 dated 05/07.09.2009 seeking clarification with regard to reimbursement of bonus on levy rice delivered by the millers to FCI during KMS 2008-09. In this context, it is informed that the GOI instructions dated 2nd December, 2008, conveyed to you vide this office letter No.Proc.111/1(1).2008-09/435-438 CWP No.14119 of 2010.doc - 3 – dated 04/05.12.2008 are very much clear and the position regarding release of incentive bonus levy rice has adequately been clarified under item No.7 of the said instructions (copy enclosed for ready reference). According to instructions, the FCI may have to pay bonus announced by GOI for the paddy equivalent to levy rice delivered. Bonus is given by the Government to traders or millers for giving 75% of levy out of the paddy purchase by millers (giving MSP to farmers) which is required to be delivered as per levy order. Since the miller delivers this levy rice (only 75% of the total paddy purchased to by them), to the FCI/Govt., the bonus can be claimed only to the extent of 75% of the paddy and not for the remaining quantity which comes under free levy rice or paddy category that is sold by him in the open market. The Ministry has already given a formula to work out the bonus payable on 75% of total paddy which the FCI has been paying. Hence the claim of the State Govt. to pay bonus for non-levy paddy/rice is not correct and all. Accordingly, you are requested to do the needful in the matter. This issues with the approval of CMD.” (5). It would be pertinent to note that a copy of the aforesaid Circular has been sent to the Union of India also in reference to the Instructions dated 2nd December, 2008 (Annexure P1), with a further reference to the Ministry’s letter No.170(1).2008- PY.1 dated 16 th September, 2009 which does suggest that the impugned Circular has been issued by the FCI with the concurrence of Government of India. CWP No.14119 of 2010.doc - 4 – (6). Be that as it may, I have heard learned counsel for the petitioners at some length and perused the records. (7). The contention that as per the Government of India policy decision dated 02.12.2008 (Annexure P1) the ‘incentive bonus’ is payable on the entire quantity of the paddy purchased by the millers for levy rice or that the impugned Circular arbitrarily restricts payment of ‘incentive bonus’ only on the proportionate levy rice milled and delivered by the rice millers resulting into 25% loss in the ‘incentive bonus’, appears to have no factual or legal basis. (8). In my considered view, the purposive object behind the Circular dated 02.12.2008 (Annexure P1) is to release the ‘incentive bonus’ based upon the quantity of levy rice delivered by the Millers out of the paddy purchased by them from the farmers. The impugned Circular dated 30.09.2009 explicitly regulates that very object for which it can neither be termed as in-consistent nor in conflict with the Government of India Circular dated 2nd December, 2008. (9). The additional object behind regulating the payment of ‘incentive bonus’ as is sought to be achieved by the FCI through the impugned Circular is to CWP No.14119 of 2010.doc - 5 – encourage the rice shellers to deliver maximum rice out of the paddy purchased by them. It discourages hoarding and black-marketing of the milled rice. (10). No fault can, thus, be found with the impugned Circular dated 30.09.2009 (Annexure P3) which applies uniformly and intends to achieve a defined public object. (11). Dismissed. (SURYA KANT) JUDGE 10.08.2010 vishal shonkar