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Balangir District Rice Mill … vs State Of Orissa And Ors. on 13 July, 2001

Orissa High Court
Balangir District Rice Mill … vs State Of Orissa And Ors. on 13 July, 2001
Equivalent citations: AIR 2002 Ori 12
Author: P Mohanty
Bench: P Mohanty

JUDGMENT

P.K. Mohanty, J.

1. The petitioners, Balangir District Rice Mills Association through its Secretary and Tanwani Rice Mill through its partner have filed this writ application challenging the policy decision of the Government, fixing and creating a target for the Khariff year 2000-2001 for procurement of rice by the Food Corporation of India from different districts allegedly in violation of the Orissa Rice and Paddy Procurement (Levy) and Restriction on Sale & Movement Order, 1982 (hereinafter called as ‘the Procurement Order, 1982) and have prayed ‘for quashing Annexures-4, 4/1, 4/2, 6 and 6/1 and for a direction to the opp. parties to strictly enforce the 1982 Procurement Order and purchase 75% of the rice produced and/or milled by the petitioners.

2. Petitioner No. 1 is a registered Association of 27 rice mills situated in the district of Balangir and petitioner No. 2 is one of the aggrieved mills and its partner is the Secretary of petitioner No. 1’s Association. The members of the Association are modernised rice mills installed with financial assistance from different Banks, Orissa State Financial Corporation, private financiers and all are agro based industries. It is the petitioners’ case that more than 50% of the paddy/rice are produced in Western Orissa and these districts contribute about 75% of the levy rice to the Food Corporation of India and other Government agencies in the State.

3. It is the specific case of the petitioners that the members of the Association have been issued with State Level Licences for procurement of paddy from the producers of the

entire State under the Orissa Rice and Paddy Control Order, 1965. A copy of the licence of petitioner No. 2 has been filed as a specimen copy which has been issued in favour of each member of the Association. It is asserted that for expendiency in supply of rice and for securing equitable distribution at fair price the State Government framed Orissa Rice & Paddy Procurement (Levy) and Restriction on Sale & Movement Order, 1982 in exercise of powers vested in it under Section 3 of the Essential Commodities Act, 1955 reserving to itself the right to fix the procurement price for every variety of rice which include the support price meant for the producers. The said order requires the Purchase Officer to purchase from every mill 75% of the total quantity, at the procurement price. The State Government being conscious of the distress sale by the producers of paddy directed all the Collectors in the State to issue directions to all the rice milers having State Level License including the mills situate in the district of Bolangir to procure paddy from distress pockets and obtain certificate from the respective Collectors for such procurement, a copy whereof is Annexure-3 to this writ application.

4. It is alleged that the State Government in violation of the provisions of Clause-3 of the Order fixed a target for each districts fixing a procurement price, movement of rice and the quantity of procurement for the Khariff year 2000-2001 by order dated 25-10-2000, a copy whereof is Annex-ure-4. In the district of Balangir the procurement target was fixed at 45,000 M. Ts. But however, the Collector being aware of the local situation had earlier fixed the target of 59,650 M. Ts. for 27 mills by order dated 30-11-2000. The petitioners allege that a target of 8,00.000 M. Ts. was inequitably distributed for procurement from mills of each districts. Even though Cuttack, Dhenkanal, Jagatsinghpur, Jaipur, Keonjhar, Kendrapara, Muyurbhanj, Nayagarh, Khurda, Kandhamal, Puri, Sundargarh and Deegarh districts have no mills at all, targests were fixed for such districts which works out discrimination, amongst the millers of districts having mills. It has also been brought on record that

Bargarh district having 60 mills was allotted a target of 1.35 lakh
M. Ts. and Kalahandi with about 30 mills was allotted 1.50 lakh
M. Ts. whereas Balangir district with 27 modernised mills was
allotted a meagre quantum of 45,000 M. Ts, without any reason-

able basis.

5. The petitioners allege that the allotment of the target by the State Government is illegal and in excess of jurisdiction conferred on it by the 1982 procurement Order and is otherwise discriminatory and, therefore, hit by Article 14 of the Constitution of India. The action of the opp. party No. 2-Corporation in revising the target fixed by the Collector and reducing such target was illegal and arbitrary. According to the petitioners the target of 45,000 M. Ts. fixed by the State Government for the district of Balangir and as revised by the opp. party No. 3 was completed within the very first three months of the Khariff year i. e. by the end of January, 2001 and the petitioners sold 45,000, M. Ts. of rice to the Purchase Officer and now the millers are compelled to close down the mills even though more than 25,000 M. Ts. of rice are still lying in their Stores/god owns for appropriate transportation and/or purchase by the Food Corporation of India. Such situation according to the petitioners not only affects the millers, but also the 10,000 labourers engaged by the millers and their families because of the closure of the mills. 6. The petitioners have asserted that the 27 millers in
Balangir district have the capacity to produce 1. 5 lakh M. Ts. rice every khariff year and unless the provisions of Clause-3 of 1982 Order is lawfully enforced, the millers are compelled to stop procurement of paddy from the, producers which may ultimately result in distress sale by the producers. It is stated that the Minister, Industries, as early as February, 2001 addressed a letter to the Central Food Minister and the Association also made a representation to the Chief Minister for appropriate direction to Food Corporation of India for purchase of levy rice in accordance, with the 1982 Procurement Order. The Government direction for procurement for distress pockets and direction to the Collector to make purchase keeping in mind the

Dalua crop the millers cannot make such purchase without appropriate assurance by Government and the Food Corporation of India for purchase of at least 75% of production. The petitioners, therefore, pray that unless the 1982 Procurement Order is appropriately enforced against the Statement and the Food Corporation of India every rice mill in the State including the mills of the members of the petitioner No. 1’s Association shall remain closed.

7. The opp. party No. 1– State has filed a comprehensive counter affidavit refuting the allegations and denying the claim made in the writ petition inasmuch as it is the specific stand of the State Government that this being a policy decision in accordance with the 1982 Order, the writ petition is not maintainable inasmuch as the writ petition at the instance of the Association of Millers cannot be maintained. It is asserted that the procurement policy of the State is finalised by the Cabinet with the approval of the Government of India. The Cabinet generally fix the target of procurement for the State and the Districts for a particular year and after formulation of procurement policy, the concerned Collector distributes the target among millers of that district. The Government re-adjust the District targets keeping the procurement trend in view. For the revision of State target, approval of the Cabinet is required. State Target and District targets are fixed to facilitate the Food Corporation of India and other procuring agents to arrange finance, godown, space, movement plan and deployment of manpower. This according to the opp. party No. 1 is an age-old practice. For the khariff year 2000-2001 there is a loss of 50% in the paddy due to severe drought in Western Orissa and it is further stated that as per the targets of previous years for the district, different millers of Balangir district have sold their rice to the Food Corporation of India and other Government agencies without questioning the authority. It is asserted that as a licence petitioner No. 2 is to comply with the direction given by the State Government in regard to purchase, sale and storage of rice as per the provisions in the Orissa Rice and Paddy Procurement Order, 1982. It is

emphatically stated that the Cabinet after due application of mind, and on consideration of relevant factors have fixed the target in accordance with the Procurement Order and that 75% levy is also not mandatory since the levy per centage is decided by the Cabinet for a particular year with the approval of the Government of India. It is stated that when the open market price is low, the millers demand for high per centage of levy through their Associations so that they will get the best price from the Food Corporation of India. On the other hand when the market price is high they demand for less per centage of levy.

8. The State in its counter has asserted that for the khariff year 1996-97 the target for procurement from the Balangir district was fixed 25,000 M. Ts., but the millers achieved a procurement of 20,097 M. Ts. Similarly, for the year 1997-98 the Government had fixed the procurement target of 75,000 M. Ts., out of which the millers of Balangir achieved only 64.269 M. Ts. , In the year 2000-2001 in spite of admitted drought in the Balangir district the millers now claim that they have exhausted the target as has been fixed by the State Government. In the current year, 28 districts have been affected by drought. The State Government has given direction to the different State Licencees to obtain a certificate from the concerned Collector from where they claim to have procured the paddy, to check the fake procurement shown on records by millers and ensure minimum support price to farmers.

9. It is stated that the State Government fixed 45,000 M. Ts. for the district of Balangir after taking into consideration the drought position inasmuch as the State Government distributed the State target of 8 lakh M. Ts. for procurement by the mills of different districts and any target fixed for different types of districts will not amount to discrimination since it is assessed as per the procurement trend in the district, and capabilities. It is reiterated that in view of the fact that the millers of Balangir district achieved less than the target fixed by the State Government, capacity of the petitioners to produce in the current year

cannot be a criteria to fix up the target inasmuch as the millers cannot compel the State Government to fix up their target. With regard to the representation of the petitioners submitted to the Chief Minister and Minister, Food, Supplies and Consumer Welfare, it is stated that since the entire Balangir district is declared drought affected resulting in loss of paddy, the claim of the millers about the procurement of paddy in the district was critically examined inasmuch as with regard to the claim of the petitioners regarding procurement of paddy from outside the district the Government have ordered that the concerned Collector should issue certificate for such procurement to the millers. However, it is submitted by the State that the Millers can file representation along with such certificates for upward revision of the district target and the District target will be revised to the extent of such procurement by the Millers of the district from outside. It is further stated that the Food Corporation of India is required to make necessary arrangement to keep the stock and has to increase the godown capacity and as such, cannot be directed to purchase any quantity that is collected by the petitioners. The other allegations and averments have been denied by this 6pp. party. The opp. party No. 2, the Food Corporation of India has filed a short counter affidavit stating therein that the State Government makes policy decision called ‘the Procurement Policy’ of each year for procurement of levy rice arid the Food Corporation of India procures and stoles the same for subsequent distribution under various schemes. The State Government keeping in view the availability of godown space and posting of Quality Control official and other allied materials fixes the target each year for procurement of rice in the State. For Balangir district target was fixed at 45,000 M. Ts. of rice. But subsequently the Collector, Balangir issued another letter dated 30-11-2000 to the Rice Mill Agents of the district in which target has been fixed for the khariff year 2000-2001 for rice at 59,650 M. Ts. . But in view of the two different targets the State being the authority for determining the quantity, the Food Corporation of India has fixed the target stipulated by the State Government.

10. A Misc. Case was filed by the petitioners after the matter was heard and closed for hearing praying for a direction; to the State Government to solve the impasse created by fixation of a target. It is alleged therein that, even though the State Government invited the petitioners and some other millers and they had attended the meeting, but nothing was resolved and the meeting was closed with a noting that in view of the pendency of the writ petition filed by the petitioners nothing could be done. It is alleged that the State Government threatened the petitioners that unless the purchase paddy in the support price fixed by the State even though there is no outlet to sale, their licence may be cancelled.

11. The main thrust of argument of Sri Bijan Ray, learned Senior Advocate appearing on behalf of the petitioners is that the orders framed under Section 3 of the Essential Commodities Act neither provide or prescribe fixation of a target nor envisages confirment of any power on the State Government or the Collector of a district or the Food Corporation of India to fix any target restricting the trade or purchase of paddy milling and sale of rice by a miller and as such, the target fixed by the, State Government/Collector/F.C.I. as in Annexure-4 to the writ petition is without jurisdiction and authority and, therefore, in-contravention of the orders framed by the State Government. Further the Central Government under Section, 5 of the Essential Commodities Act having delegated the powers to the State Government in relation to Clauses (a) to (j) except (g) of Section 3(2), the delegated authorities cap exercise powers so delegated only and thus, fixation of a target, which amounts to restriction on freedom of trade, do not come within the scope and ambit of any of the clauses. Alternatively, it is argued, assuming that such-fixation of. a target is available to be read into Clause (d) of Section 3(2) of the E. C. Act, any order by the State Government has to be made with prior concurrence of the Central Government and as such, in absence of any such prior concurrence, the fixation of a target is bad in law being in excess of the delegated authority. It is the further contention of Sri Ray, that so far as the

trade of millers are concerned, the Government by the two Central Orders imposes reasonable restrictions relating to licence for milling, procurement of paddy at the support price and its sale at the procurement price declared by the Government and 75% of the milled rice is to be sold to F. C. I,. Since no other
restriction is provided by the Central Orders and Procurement Orders, fixation of target which is not provided in the Central Orders themselves is, not available to be implemented.

12. The learned Addl. Government Advocate, however, reiterating the stand taken in the counter affidavit, submitted that, fixation of a target for procurement is a policy decision of the State Government, in accordance with the 1982 Order and as such, as the writ petition is otherwise not maintainable at the behest of the petitioners. The procurement policy is finalised at the State Level by the Cabinet with the approval/concurrence of the Government of India from year to year and after formulation of policy the concerned Collectors distribute the target among the millers of the district. The State Government in accordance with the Rice and paddy Control Order, 1965 and Rice and Paddy Procurement (Levy) and Restriction on Sale and Movement Order, 1982 is empowered to fix a target for procurement inasmuch as Clause 3 of, the 1982 Order is not mandatory in nature and, therefore, the F, C. I. or the State are not obliged under law to purchase 75% of the rice and/or paddy procured and or milled by the millers at its own mill. The State Government has been formulating the policy each year and fixing targets of procurement keeping in view the procurement trend in the district and capability of the millers. Since the millers in the Balangir district could not achieve the procurement target of last more than three years and 28 districts have been affected by drought situation including the Balangir district a target of 45,000 M. Ts. was fixed for them.

13. In order to appreciate the contentions raised, it is necessary to consider the, relevant provisions , of the Essential
Commodities Act
, 1955 (hereinafter referred to as ‘The E.G. Act’)
and the Control Orders formulated and framed thereunder by
the State Government.

Section 3 of the Essential Commodities Act, 1955 reads
thus :

Section 3. Powers to control production supply, distribution etc. of essential commodities-

(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies ,of any essential commodity or for securing their equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution
thereof and trade and commerce therein.

(2) Without prejudice to the generality of the powers conferred by Sub-section (1), an order made there-

under may provide-

  (a)xx        xx          xx  
  (b)xx        xx          xx  
  (c)xx        xx          xx  
 

 (d)       for regulating by licence, permits or otherwise the
storage,  transport, distribution, disposal, acquisition, use or consumption of, any essential commodity :  
  XX                XX               XX   "   
 

 Section 5 of the Act provides :--  
   

Section 5. Delegation of powers–The Central Government may, by ‘notified, order, direct that the power to make orders or issue notifications under section 3 shall in relation to such matters, and subject to such conditions, if any as may be specified in the direction, by exercisable also by :

  (a) xx             xx                xx  
 

 (b)   such State Government  or  such officer or authority subordinate to a State  Government as may be specified in the direction."   
 

 The  Central   Government  in exercise of powers under Section 5 of the E. C. Act  in the Ministry  of Agriculture and

Irrigation (Department of Food) Order GSR 800 dated 9th June, 1978, directed that the powers conferred on it by Sub-section (1) of Section 3 of the Essential Commodities Act to make orders, to provide for the matters specified in Clauses (a) to (j) except (g) of Sub-section (2) thereof shall also be exercised by the State Governments subject to the condition stipulated in the order. Order, GSR 800 dated 9th June, 1978 may be quoted hereunder :-

“MINISTRY OF AGRICULTURE AND IRRIGATION
(DEPARTMENT OF FOOD)

ORDER

New Delhi, the 9th June, 1978

G. S. R. 800–In exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (10 of 1955), and in supersession of the Order of the Government of India in the late Ministry of Agriculture (Department of Food) No. G. S. R. 316(E) dated, the 20th June, 1,972, the Central Government hereby directs that the powers conferred on it by Sub-section (1) of Section 3 of the said Act to make orders to provide for the matters specified in Clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of Sub-section (2) thereof shall, in relation to foodstuffs be exercisable also by a State Government subject to the conditions-

(1) that such powers shall be exercised by a State Government subject to such directions, if any, as may be issued by the Central Government in this behalf :

(2) that before making an order relating to any matter specified in the said Clauses (a), (c) or (f) or in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, under the said Clause (d), the State Government shall also obtain the, prior concurrence of the Central Government; and

(3) that in making an order relating to any of the matters specified in the said Clause (i) the State Government shall authorize only an officer of Government.”

The State Government being of the opinion that it was
necessary and expedient for maintaining the supply of rice and
for securing its equitable distribution and availability at fair
price in the State, in exercise of its powers conferred by Section 3
of the Essential Commodities Act in view of the authorisation in
the notified order G.S.R. 800 dated 9th June, 1978 with the prior
concurrence of the Government of India, by S.R.O. No. 769/82,
dared 30-10-1978, made “The Orissa Rice and Paddy Procurement
(Levy) and Restriction on Sale and Movement Order, 1982”. The
Orissa Rice and Paddy Control Order, 1965 has also been made by the State Government under the powers conferred under
section 3 of the Essential Commodities Act being delegated with
that power by the Central Government in the Ministry of Food
and Agriculture (Department of Food) No. 888 dated 28-6-1961
and with the prior concurrence of the Government of India
providing for licence by the appropriate authority maintenance of
accounts consequence on contravention of condition of licence,
cancellation of licence, sale, purchase and storage by purchasing
agents and power of entry, search and seizure.

14. The contention of Sri Ray, learned Senior Advocate appearing for the petitioners that the Central Government under Section 5 of the Essential Commodities Act having delegated the powers to the State Government in relation to Clauses (a) to (j) except (g) of Sub-section (2) of Section 3 the delegated authority can exercise powers so delegated only and thus, fixation of a target which amounts to restriction of freedom of trade does not come within the scope and ambit of any of the clauses, is based on the assumption that the powers delegated to the State Government under Section 5 of the Essential. Commodities Act is in respect of the powers of the Central Government under Subsection (2) of Section 3 and not Sub-section (1) of Section 3 of the Essential Commodities Act. Alternatively, it is argued that assuming that such a fixation of target is available to be made under Clause (d) of Section 3(2) of the Essential Commodities Act, any order by the State Government has to be made with prior concurrence of the Central Government and as such, in absence of

such prior concurrence the fixation of a target is bad in law being
in excess of delegated authority. The contention cannot be
accepted.

15. The notified order of the Central Government in G. S. R. 800 dated 9th June, 1978 quoted herein before clearly indicates that the Central Government directed that the powers conferred on it by Sub-section (1) of Section 3 of the Act to make orders etc. shall also be exercisable by the State Government subject to the condition set out therein. The first part of the notified order in specific terms provides for delegation by the Central Government under Section 5 of the Act and the powers conferred on it by Sub-section (1) of Section 3 of the Act. The power conferred on the State Government in terms of the authorisation is with regard to promulgation of any order providing for regulating or prohibiting the production, supply and distribution or and trade and commerce in any essential commodity as is necessary for maintaining or increasing distribution or availability at a fair price. The second part of the notification directs that the power to make orders thereunder meaning power under Sub-section (1) of Section 3 of the Act shall also be exercisable by the State Government in relation to foodstuffs with respect to such matters specified in Clauses (a) to (j) except (g) of Sub-section(2) thereof and subject to such condition stipulated therein. Before making an order under Clause (d) of Sub-section (2) of Section 3 of the Act in regard to distribution of disposal of foodstuffs to places outside the State or in regard to regulation or transport of foodstuffs, the State Government shall also obtain the prior concurrence of the Central Government. The source of power to make an order like the Orissa Rice and Paddy Control Procurement (Levy) and Restriction on Sale and Movement Order, 1982 is under Sub-section (1) of Section 3 of the Act, but however, Sub-section (1) provides illustration for the general power conferred by Sub-section (1). Sub-section (2) of Section 3 starts with word without prejudice to the generality of the power conferred by Sub-section (1) and, therefore, it is abundantly clear that Sub-section (2) of Section 3 of the Act merely illustrates the

general power conferred by Sub-Section (1) of Section 3 and no more.

16. This point however, is no more res Integra. This
question, directly arose, in the case of K. Ratnanathan v. State of
Tamil Nadu and Anr
. A.I.R 1985 S. C. 660. the Apex
Court, while considering its earlier decision in Santosh Kumar
Jain v. The State
A. I. R. 1951 S. C. 201 and the decision of
some other High Courts like Calcutta High Court, Punjab High Court, Allahabad High Court and of this Court, in Bijoy Kumar
Routrai and Ors. v. State of Orissa and Anr
; A. I. R. 1976
Orissa ,138 held that although Clause (d) of Sub-section (2)
of Section 3 of the Act deals only with a specific power,
the general power to issue the impugned orders flows from
the provisions of Sub-section (1) of Section 3 which stands delegated to the State Government by virtue of the notification
issued under Section 5 of the Act. In that case the Apex
Court was considering the legality of the Control Orders “T. N. Paddy (Restriction and Movement) Order, 1982 imposing a complete ban by the State Government on transport of paddy
by the State of Tamil Nadu under Section 3 of the Essential
Commodities Act read with the Government of India Order, G.S. R. 800 dated 9-6-1978, the very same order under which the State of Orissa has promulgated the aforesaid Control Order. The Apex Court held that Sub-section (2) of Sections is illustrative, but the rule making power is conferred by Sub-section (1) of the order which are referred to in Sub-section (2) are the orders which are authorised by and made under Sub-section (1) Sub-section (2) of Section 3, confers no special powers on the Central Government, than what are conferred under Sub-Section (1), but provides illustration of the general powers conferred by Sub-section (1), The Apex Court further has held that the word regulating in Clause (d) of Sub-section (2) of Section 3 includes the power in prohibiting. The word “regulation” cannot have any rigid or inflexible meaning as to exclude “prohibition”. It is a word of broad import having a broad meaning and is comprehensive.

17. The source of power to issue an order under Clause (d) of Sub-section (2) of Section 3 being relatable to the general powers of the Central Government under Sub-section (1) of section 3 there is no reason to give a restricted meaning to the word “regulating” in Clause (d) of Sub-section (2) of Section 3 so as not to take in prohibiting. The Apex Court rejected the contention that there cannot be a total prohibition of transport, movement or otherwise carrying of paddy outside of the areas in question under Clause (d) of Sub-section (2) of Section 3, but only regulation of such activities in the course of trade and commerce by grant of licence or permits. The learned counsel has referred to the Division Bench decision of this Court in Bijay Kumar Routrai’s case (supra) in support of his contention wherein it was held that what was delegated to the State Government was the power to make orders in respect of matters specifically referred to in Clauses (a) to (j) except (g) of Sub-section (2) of Section 3 and not in respect of the totality of the powers that falls under Sub-section (1) of Section 3 of the Essential Commodities Act. This Court held that the delegation is made in respect of powers of the Central Government under Sub-section (2) of Section 3 and does not include powers under Sub-section (1) of Section 3. The Court was considering the legality and validity of the Orissa Paddy Procurement (Levy) Order, 1974 promulgated by the State Government being a delegatee of the Central Government of the powers under Section 3 of the Essential Commodities Act. The view taken in the aforesaid decision in Bijay Kumar Routrai’s case (supra) has been declared not to be good law in K. Ramanthan’s case (supra), by the Apex Court. Thus, the decision does not come to the aid of the learned counsel and, therefore, the contention has to be rejected. It is, therefore, held that the State Government was competent and authorised to exercise powers under Sub-section (1) as well as Sub-section (2) of Section 3 of the Essential Commodities Act in formulating the aforesaid order and restricting the quantum of procurement and in fixation of target for such procurement by the millers.

Now coming to the relevant provisions of the Orissa Order promulgated by the State Government, the Orissa Rice

and Paddy Procurement (Levy) and Restriction on Sale and Movement Order, 1982 (hereinafter called the “Procurement Order, 1982”) and the Orissa Rice and Paddy Control Order, 1963 may be considered as to whether the notification of the Government in fixing a target for procurement by the millers in the present case was within the competence. Undesputedly, the petitioner – millers are licncees for procurement of paddy in terms of the Control Order. 1965. Clause 3 of the Control Order, 1965 provides that no person can act as dealer except under and in accordance with a licence issued in that behalf by the licensing authority unless under the proviso thereto the State Government exempt subject to such condition as made. Sub-clause (2) of Clause 3 provides that a person who stores rice or paddy or rice arid paddy taken together in quantity exceeding 10 quintals inside the State of Orissa, unless the contrary is proved is deemed to act as a dealer. Clause 4 provides the manner and procedure for issuance of and renewal of licence. Clause 8 is with regard to the consequence of Contravention of the condition of licence. Clause 11 provides for purchase in wholesale quantity or keep in storage in wholesale quantity of rice or paddy or rice and paddy taken together, anywhere within the State except as a purchasing agent or supply agent or under and in accordance with a permit granted by the Controller of Supplies or any other Officer authorised by the Government. It also provides that such person cannot purchase paddy at a price lower than that declared by the Government by a notification in the official gazette. Clause-13 of the Control Order authorises the State Government to issue direction from time to time to a licencee with regard to purchase, sale or storage for sale in wholesale quantity of rice or paddy and with regard to the manner of maintenance of Register of daily accounts etc. .

18. Under the Procurement Order, 1982 in Clause-3 every miller is required to sale to the Purchase Officer at a procurement price 75% of the total quantity of each variety of rice confirming to the specification milled by him everyday out of stocks of paddy owned by him. Clause-12 of the Procurement

Order, 1982 authorises the Government to impose a maximum storage limit on miller/dealers of quantity of rice to be specified in a notification to be publishe4 in the Orsssa Gazette which shall be exclusive of any stock of rice held by the miller/dealer as levy share of Government. Thus, on a reading of the aforesaid provisions of the aforesaid order, in specific Clause 13 of the Control Order, 1965 read with Clause 12 of the Procurement Order, 1982 there cannot be any manner of doubt that the State Government was competent under the orders and has the power to issue direction restricting purchase of paddy and fix a target for such procurement. However, such power or direction has to be exercised on consideration of relevant factors. What is relevant factor for the purpose of fixation of target has to be construed in a given fact and circumstances of a case and there cannot be a fixed formula. According to the State Government in view of the drought situation in 28 districts of the State, the district wise target for procurement was fixed by the Cabinet inasmuch as such a target was fixed keeping in view the performance of the millers/dealers-petitioners in three preceding years. It has been stated in the counter affidavit by the State that the millers of Balangir district could not meet the target fixed for them in the last three procurement years inasmuch as their procurement was far below the target. The details of the target fixed each year and the procurement achieved by the millers have been given in the counter affidavit which has not been controverted by the petitioners. It is also not in dispute that the State Government each year is formulating the procurement, policy for Khariff year and keeping in view the State target fixing districtwise target for procurement of paddy and the Collectors and the other authorities thereafter fix the target for the millers/agents for procurement of such district wise target. In the Khariff year 2000-2001 the millers have been given target for the procurement. In such situation, it cannot be held that fixation of a target for procurement of paddy by the State Government or in that matter by the Collector consequent upon such fixation by the State Government to be beyond the

powers and competence and the State Government making such fixation illegal or arbitrary.

19. Sri B, Ray, learned senior Advocate for the petitioners then contended with considerable force that the fixation of the target even assuming that such a power is vested with the Government was arbitrary inasmuch as the factors like the existence of number of mills, availability of paddy, capacity of the millers and the production of paddy have not been taken into account and in an arbitrary manner the target for the district of Balangir has been fixed at 45,000 M.Ts. wherein 27 mills were functioning whereas in respect of the districts of Cuttack, Dbenkanal, Jagatsinghpur, Jaipur, Keonjbar, Kendrapara, Mayurbhanj, Nayagarh, Khurda, Kandhamal, Puri, Sundargarh and Deogarh which have no mills at all targets have been fixed for such districts which works out discrimination among the millers of the districts having mills. It is further argued that the district of Bargarh with 60 mills was allotted a target of 1.35 lakh M. Ts. and Kalahandi with 30 mills was allotted 1.50 lakh M. Ts. whereas Balangir district having 27 modernised Mills was alloted a meagre 45.000 M. Ts. It is further submitted that the petitioner’s have already met their target within the first three months of the Khariff year and by the end of January, 2001, the members of the petitioners’ association have sold 45,000 M. Ts. of levy rice to the Purchase Officer and the F. C. I. and as such, the, millers were compelled to Close down their mills when they are left with sufficient stock and the producers have to make distress sale because of non-availability of the purchasers. The State Government in its counter submitted that for the years 1996-97, 1997-98 and 1999-2000, the Government had fixed the target for Balangir district, but for the
drought situation when loss of paddy is more than 50% in the entire Balangir district, it cannot be accepted that the millers have achieved their targets in a fair manner. The capacity to produce cannot be a criteria to fix a target inasmuch as the millers cannot compel the State Government to fix up their target. However, in paragraph-24 of the counter affidavit, it

has been stated by the State Government that the millers with State Level Licences are requested by the concerned Collectors for purchase from distress pockets so that farmers can be assured of the Minimum Support Price. In such a situation, the millers should obtain a certificate from the concerned Collectors that they have procured paddy from the distress pocket at Minimum Support Price and there will be no difficulty to consider to increase the target of the district where mills are located.

20. Undisputedly, the members of the petitioner’s Association, all have State Level Licences. Even if it is held that the State Government, is competent to fix up district wise targets, such target has to be fixed for each district keeping in view the relevant factors like, the crop position, expected production, availability thereof, capacity of the miller agents, the procurement trend, requirements of the State and similar other factors according to the demand of situation. The State counter does not disclose as to on what consideration, the district wise targets were fixed, except some basis for fixing the target in respect of Balangir District, like the drought situation, achievement of the targets by the millers and the procurement trend. This may satisfy to some extent the criteria for Balangir district, but not in respect of all the districts of the State inasmuch as according to the State, 28 districts were hit by drought situation. According to the State Government guidelines as indicated in paragraph-2 thereof, informal targets were fixed in the annexure thereto, inasmuch as the. Government also reserved to itself, the option of making changes in the district-wise procurement target in increasing or decreasing the same, keeping in view the trend of procurement. The allegation of the petitioner in the writ petition that, there is no equitable and rational allotment/fixation of target has not been refuted by giving any cogent reasons. Rather in paragraph 12 of the counter
it has been stated as under :–

“12. That in reply to the averments made in paras 6 to 6.1 of the Writ Petition it is humbly submitted that

the State Level Licencecs arc requested to procure from
distress, pockets to ensure Minimum Support Price to
formers. There is no clement of compulsion. When a
miller procures paddy from another district, the same quantity is added to the district target where the mill is located. In the current year, 28 districts have been
affected by drought. Now the State Govt. has given direction to the different State Licencees to obtain a certificate from the concerned Collectors from where they claim to have procured the paddy. This direction is only to check the fake procurement shown on records by millers arid ensure minimum support price to farmers. This will also act as an deterrant to re-cycling of subsidised rice into procurement operation by unscrupulous millers.”

Regard being had to the fact situation of the case and keeping in view the specific stand taken by the State in its counter with special reference to paragraphs 12 and 24 thereof, I deem it appropriate to direct the State Government, opp. party No. 1 to reconsider the matter along with the representation filed by the petitioners with regard to enhancement of the target of the district in the light of the relevant Orders under the Essential Commodities Act and Guidelines and Circulars governing the field, if any, and take appropriate decision expeditiously, but by not later the 7th August, 2001, since the khariff year 2000-2001 Would come to an end by 30th September, 2001, The State Government while considering the matter, may give an opportunity to the petitioners to support their claim by materials and if found necessary, by affording an opportunity of hearing. Ordered-accordingly.

The writ petition is disposed of in terms of the aforesaid observations and directions, but there shall be no order as to cost.

21. Writ petition disposed of.

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