HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE N.RAVI SHANKAR WRIT APPEAL No.1305 of 2003 Dated: 15-03-2011 Between: The Food Corporation of India, Rep. by its District Manager, Kurnoo. …Appellant AND Kirikera Food Products Private Limited, Hindupur, rep. by its Managing Director S.Chenna Krishnaiah and another. Respondents. This Court made the following: HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE N.RAVI SHANKAR WRIT APPEAL No.1305 of 2003 JUDGMENT: (Per Hon’ble Sri Justice A.Gopal Reddy) This Writ Appeal under Clause 15 of Letters Patent is directed by the appellant against the orders, dated 18.4.2003 passed by the learned single Judge of this Court allowing W.P.No.12965 of 1999 and ordering for refund of cost of gunny bags collected by the appellant- Corporation. In order to ease the prices of food grains particularly, wheat and wheat products, the Government of India had formulated a scheme for release of wheat to the State Government under Market Intervention Scheme vide letter No.1-86/97 DP.III, dated 16.01.1998 by allotting 10,000 Metric Tonns of wheat to the State of Andhra Prades. As per the scheme, the State Government has to allot the wheat to the companies engaged in the manufacture of various wheat products at the price fixed by the Government of India in consultation with the Food Corporation of India. By the said letter, it was decided to authorize the Food Corporation of India-appellant herein to release certain quantities of wheat to the State Governments subject to certain conditions at the rate of Rs.650/- per quintal for the period from January to March, 1998. By allocating certain quantities of wheat, the State Governments were directed to release the said quintals of wheat meant for open sale through Cooperative Societies/Apna Bazars, Super Bazars, Roller Flour Mills and State nominated agencies. Further State Governments were also directed to take necessary steps to ensure that wheat/wheat products are sold at reasonable price to be fixed by them with a further direction to maintain proper records of the details of the wheat allotted to various agencies. The appellant- Corporation issued release order of wheat to the State/UT Governments for market intervention stating that the price of food grains will be payable on the net weight basis and the cost of gunny bags and local taxes (wherever applicable) would be extra and would be recovered from the concerned State/UT Government in advance. The price chargeable would be Rs.650/- per quintal plus cost of gunny bag at the quarterly recovery rates plus taxes leviable and the same should be prominently displayed in all the concerned field offices of FCI and concerned State/UT Offices. It was directed that any unlifted quantity against the allocation for the month would expire on the last day of the month unless otherwise instructed. It is not in dispute that the writ petitioner is engaged in converting the wheat into maida, atta and sooji and sells the same to the public in the open market as per the price fixed by the State Government. As per the allotment made by the State Government, the writ petitioner would purchase the wheat from the Food Corporation of India through the A.P. State Civil Supplies Corporation Limited. The Commissioner of Civil Supplies, A.P., Hyderabad issued orders on 6.2.1998 intimating about the allotment of wheat by the Government of India and the second respondent was appointed as State Government agency to lift the stock from the FCI. As per the instructions issued by the Commissioner of Civil Supplies, keeping in view the guidelines communicated by the F.C.I. and Government of India, the petitioner was allotted certain quantities of wheat and he lifted 240 Metric Tonns of wheat by duly paying Rs.650/- per quintal and cost of gunny bags to the Food Corporation of India as per the rate fixed by it. The stock was lifted on 15.2.1998. Subsequently, the Commissioner of Civil Supplies through his letter, dated 24.2.1998 instructed all the Districts that Government of India have issued instructions to release wheat allotted under open sale at the rate of Rs.650/- per quintal without charging any extra cost towards cost of gunny bags. Basing on that, the above writ petition came to be filed by the writ petitioner stating hat he had paid the cost of gunny bags amounting to Rs.84,857.50 at the rate of Rs.32.50 per gunny for 2611 gunny bags as per the release order, dated 14.2.1998, and that in view of Fax letter issued by Government of India, dated 23.2.1998, it is entitled to refund of the said amount, but the same has not been paid. The fax letter issued by Government of India, dated 23.2.1998 reads as under: “No.S&S 11 (1)/98 AAA Govt. of India and FCI headquarters intimated that wheat to State Government under market intervention scheme issued at the rate of Rs.650/- per quintal without charging any extra cost towards gunny AAA advised collect cost of wheat at the above rate along with local taxes other fees as applicable but without charging gunny cost AAA.” On sending the above fax, the Government of A.P. through G.O.Ms.No.22, dated 7.3.1998 directed that the price of wheat and wheat products derived out of wheat stocks milled under the scheme as fixed in the G.O.Ms.No.201 F, CS & CA Department, dated 9.4.1997 shall be adopted as per the specifications mentioned therein. Accordingly, the Government of A.P. requested the Chief Rationing Officer, Hyderabad and all the Collectors to ensure that wheat products derived out of allotted under the Market intervention scheme are sold to consumers at prices not exceeding the ceiling prices approved. Therefore, according to the petitioner, it is entitled to refund of costs of gunny bags. In the counter affidavit filed by the first respondent, while admitting the scheme and allotment of wheat to the petitioner, it is categorically asserted that the petitioner has not stated what is the quantity of wheat/wheat products sold prior to 23.2.1998 and or on after 23.2.1998 from the wheat allotted and lifted i.e. from the date of receipt of Government of India letter. The petitioner should have taken up the mater with the Commissioner of Civil Supplies duly furnishing the stock position on the close of 22.2.1998. However, the matter is being pursued by the first respondent also with the Food Corporation of India even though the first respondent is not at all responsible for refund of the cost of gunny. The learned single judge of this Court by the impugned order allowed the writ petition mainly basing on the clarification letter, dated, 23.2.1998 wherein the Food Corporation of India was directed to release the wheat under open sale at the rate of Rs.650/- per quintal without charging any extra amount towards the cost of gunny bags. It is not in dispute that the prices were revised after the deletion of cost of gunny bags for the sale of wheat products by the Government of A.P. vide G.O.Ms.No.22, dated 7.3.1998. Prior to the said directions issued in the said G.O., the rate applicable for sale of wheat products was fixed taking into consideration the cost of the wheat plus cost incurred by the persons/corporations who are allotted the wheat for public distribution system and that the price was being fixed on the basis of the cost of wheat including the gunny bags. Admittedly, the petitioner had lifted the wheat on 15.2.1998, but till 7.3.1998 i.e. when the cost was revised, what is the quantity of wheat converted into the wheat products and its sale has not been furnished by the petitioner to claim refund of the amount. Unless the petitioner establishes that he has not passed on the burden of the price fixed earlier to the consumer and he has converted the wheat into wheat products and sold it at the revised rates as fixed in G.O.Ms.No.22, dated 7.3.1998, he is not entitled to claim refund of the amount basing upon the revised price fixed by the Government of A.P. in G.O.Ms.No.22. Learned single Judge has not taken into consideration about the lifting of wheat by the petitioner on 15.2.1998, where the transaction has been completed in all respects and the wheat which was lifted by the petitioner was also converted into wheat products and sold at the rates fixed by the Civil Supplies Corporation as per the G.O.Ms.No.201 F, CS & CA Department, dated 9.4.1997 and as per the circular of the Commissioner of Civil Supplies, dated 11.4.1997 which was in operation till the prices were revised in G.O.Ms.No.22, dated 7.3.1998. Under those circumstances, the petitioner is not entitled to claim refund of the amount as claimed by it. Accordingly, the writ appeal is allowed and the impugned order is set aside and the writ petition is dismissed. No order as to costs. ________________ A. GOPAL REDDY, J. ________________ N.RAVI SHANKAR, J. MARCH 15, 2011 Tsr