Pupneja Rice Mills vs State Of Punjab And Another

Lisa Gill, J

This matter is being taken up for hearing through video conferencing due to the outbreak of pandemic, COVID-19.

Prayer in this writ petition is for setting aside impugned order dated 14.03.2018 (Annexure P-17), passed by the Principal Secretary, Department of

Food, Civil Supplies and Consumer Affairs, Punjab, in compliance of order dated 20.02.2018 in CWP-3964-2018 (Annexure P-16). Vide order dated

20.02.2018 in CWP-3964-2018, it was directed that petitioner’s representation regarding acceptance of its case under one time settlement Policy

be decided in accordance with applicable Policy and provisions of law. Principal Secretary, Department of Food, Civil Supplies and Consumer Affairs,

Punjab, rejected the petitioner’s claim vide impugned order dated 14.03.2018. Aggrieved therefrom present writ petition has been filed.

Brief facts necessary for adjudication of the case are that respondent no.2-Pungrain stored 110079 bags of paddy weighing 41279.625 quintals in rice

mills of petitioner. It was agreed that petitioner would supply custom milling rice weighing 27657.35 quintals in the account of Pungrain with the FCI till

30.03.2017, further extended to 30.06.2017. Physical verification of the stock was conducted on 08.03.2017, wherein shortage of 14250 bags weighing

5343.75 quintals was detected. Pursuant to detection of this shortage, remaining 18561 bags of paddy were shifted to other mills. Petitioner was

expected to deliver 27657.35 quintals of rice to FCI in account of Pungrain but again there was a shortage of 3581.336 quintals of rice with only

19412.336 quintals of rice being delivered by petitioner. Notice dated 08.03.2017 (Annexure P-1) was issued to petitioner. Petitioner in response

thereto furnished security in the form of immovable property belonging to Smt. Asha Rani i.e. wife of one of the partners of petitioner-firm Hari

Chand. An affidavit dated 29.03.2017 (Annexure P-2) was submitted by Smt. Asha Rani that she is ready to give her agricultural land measuring 3

acres to be attached in the name of respondent no.2 in order to discharge liability towards shortage of paddy. 20 Kanals of agricultural land owned by

Smt. Asha Rani was attached as security for outstanding amount. Property measuring 49 Kanals and 5 Marlas of family members of partners of

petitioner was also attached by the Deputy Commissioner, Fazilka vide Roznamcha dated 13.07.2017 (Annexure P-7). FIR No. 63 dated 29.04.2017

was lodged at P.S. City Jalalabad against the miller for misappropriation of Pungrain paddy.

Dispute was referred to the Arbitrator and award dated 17.01.2018 (Annexure P-15) was passed by the Arbitrator holding the petitioner liable to pay

a sum of Rs.1,34,91,394/-. Before passing of the said award and during pendency of arbitration proceedings, One Time Settlement Policy (for short

‘OTS Policy) was notified by the Government of Punjab, Department of Food, Civil Supplies and Consumer Affairs, on 07.09.2017.An application

for being considered under the OTS Policy was submitted by petitioner before passing of the Arbitral award on 26.07.2017 (Annexure P-9). As the

same was not considered, CWP-3964-2018 was filed and in compliance with order dated 20.02.2018 therein,thereafter, impugned order dated

14.03.2018 was passed. Aggrieved therefrom, this petition has been filed.

Primary controversy in this writ petition revolves around interpretation of clause of the OTS Policy dated 07.09.2017, regarding mode of payment

which reads as under:-

“MODE OF PAYMENT- The amount so calculated can be paid fully in one go within 45 days or the same may be paid in three equal yearly/half

yearly/quarterly installments as per convenience of the miller. In such cases of option to pay in installments, the miller will have to pay it with 10%

compound interest.â€​

Petitioner has taken a stand that it was entitled to deposit the amount in question in three equal yearly installments in terms of said Policy, whereas

respondents have taken a specific stand that the amount in question was to be deposited within one year itself and not in three years as projected.

Learned counsel for the petitioner has argued that respondent No. 1 while passing the impugned order dated 14.03.2018 has not only reproduced the

provisions of the policy regarding mode of payment incorrectly but has also interpreted the same in an incorrect manner. Reproduction of the

provision/clause regarding mode of payment in the impugned order, reads as under:-

“Mode of Payment - The amount so calculated can be paid fully in one go within 45 days (without any interest) or the same may be paid in three

equal quarterly/two half-yearly/one yearly instalment/s as per convenience of the miller. In such cases of option to pay in instalments, the miller will

have to pay it with 10% compound interest.â€​

Learned counsel for the petitioner submits that a bare reading of the provision regarding mode of payment in the Policy reveals that amount as

calculated under the OTS Policy could be paid fully in one go within 45 days thereof without interest or in three equal yearly/half yearly or quarterly

installments, as per convenience of the miller with interest. Petitioner, it is submitted, had been ready and willing to deposit said amount in three equal

yearly installments though, it is prayed in his application dated 21.11.2017 that said three yearly installments be further bifurcated into three

installments per year. It is further submitted that the petitioner, has always been ready and willing to deposit the amount in terms of the OTS but it is

only due to wrong interpretation of relevant clause by the authorities that petitioner has been made to run from pillar to post and furthermore land of

wife of one of the petitioner’s partner also stood attached. Bona fides of the petitioner, it is submitted,are not in dispute as land belonging to wife

of one of the partners of the petitioner was offered as security. It is thus prayed that this petition be allowed.

Learned counsel for the State, per contra, argues that it has always been the effort of petitioner to delay payment of government dues. The OTS

Policy, it is submitted, is to be complied with meticulously within the stipulated time frame and it is not open to the petitioner to give his own

interpretation of the Clause, which is abundantly clear and has been correctly interpreted in impugned order dated 14.03.2018 (Annexure P-17),

passed by the Principal Secretary, Department of Food, Civil Supplies and Consumer Affairs, Punjab. Learned counsel for the State relies upon

decision dated 23.12.2020 in CWP-327-2020, to submit that no relief whatsoever is made out qua petitioner. It is thus prayed that this petition be

dismissed.

I have heard learned counsel for the parties and have gone through the file.

Factual aspect of the petitioner submitting an application for being considered under the OTS Policy dated 07.09.2017, during pendency of the

Arbitration proceedings is not in dispute. The mode of payment provided in the Policy reads as under:-

MODE OF PAYMENT- The amount so calculated can be paid fully in one go within 45 days or the same may be paid in three equal yearly/half

yearly/quarterly installments as per convenience of the miller. In such cases of option to pay in installments, the miller will have to pay it with 10%

compound interest.â€​

The Principal Secretary, Department of Food, Civil Supplies and Consumer Affairs, Punjab, has evidently reproduced the said provision in the

impugned order dated 14.03.2018 as “Mode of Payment - The amount so calculated can be paid fully in one go within 45 days (without any

interest) or the same may be paid in three equal/quarterly/two half-yearly/one yearly installment/s as per convenience of the miller. In such cases of

option to pay in installments, the miller will have to pay it with 10% compound interest.â€​

In tune with the reproduction of the provision in his order, learned Principal Secretary held that petitioner’s proposal for payment of outstanding

amount in three years does not fall within the ambit of Policy promulgated by the State Cabinet and therefore, proposal set forth by the miller being

beyond the scope of defined Policy, could not be accepted. It is observed in the impugned order that payment can be made by the defaulter rice

millers by way of one annual installment, two equal half-yearly installments or three equal quarterly installments within a period of one year.Such an

interpretation is clearly not in consonance with the provision in the Policy which provides for payment to be deposited either in one go within 45 days

or in three equal yearly/half yearly/quarterly installments as per convenience of the miller. Plain reading of this provision does not indicate a cap of one

year for payment of the dues.

As there is a clear ambiguity on a bare reading of the provision in the Policy itself, further compounded by impugned order dated 14.03.2018, it was

considered necessary to look into the process of formulation of the OTS Policy to see if any light could be thrown on this aspect. It is mentioned in the

OTS Policy dated 07.09.2017 that Council of Ministers in its meeting dated 24.08.2017 had taken a decision that rice mills whose cases were pending

before various Arbitrators/Courts should be given a chance to avail the One Time Settlement facility and the OTS Policy was promulgated

accordingly.

Learned counsel for the State was directed on 09.12.2020, to produce a copy of the decision taken in the said Meeting/the Minutes thereof, in order to

find out whether a specific period of one year for deposit of dues had been stipulated therein. In response thereto, affidavit dated 21.01.2021 has been

filed alongwith a memorandum of the Council of Ministers’ Meeting dated 24.08.2017 besides communication dated 25.08.2017 from the

Department of General Administration. Mode of settlement as per the memorandum (Annexure R-3), reads as under:-

“MODE OF SETTLEMENT:-

The mode of settlement of defalcated default amount can be considered as follow:-

Lump sum without any interest component.

Two instalments with interest component @ 10%.

Three instalments with interest component @ 10%.

Memorandum is submitted to the Council of Ministers with regard to the policy of One Time Settlement with defaulter rice mills of the State. The

OTS Proposal with one of the options as given in the above Para No. 1.7 may be considered for approval.â€​

Para 1.7 of the said memorandum reads as under:-

In view of deliberations with the stakeholders including the agencies and the millers, following options may be considered for the recoveries from

defaulter rice mills:

RECOVERY IN CASE OF DEFAULTERS BECAUSE OF BALANCE RICE NOT DELIVERED TO FCI IN TIME-

a) Cost of undelivered rice be deposited on present Custom Milled Rice rates

OR

b) Any other option which the council of Ministers may deem appropriate.

RECOVERABLES FROM THE DEFAULTERS ON ACCOUNT OF OTHER COMPONENTS EXCLUDING RICE-

For amount recoverable against other components (except rice) like Bardana, Quality Cut, Statutory Charges, VAT etc, the option can be:

a) Principle Amount+ Simple interest@10%

OR

Principal Amount+50% Cash Credit Limit Rate

b) Or any other option which the Council of Minister may deem appropriate.

The recovery amount as per above formula shall be as per attached Proforma A and B.â€​

As per communication dated 25.08.2017 (Annexure R-4), issued thereafter, it is observed therein that subject matter was discussed in the meeting of

the Council of Ministers held on 24.08.2017 and it was decided that the amount would be paid in 45 days or in three annual installments with 10%

interest. Para 2 of this communication reads as under:-

“In the meeting of the Council of Ministers held on 24.08.2017, the subject matter was discussed and the decision taken in this regard is as under:

After deliberation of the memorandum dated 24.08.2017 of Department of Food Civil Supplies & Consumer Affairs, while approving the proposal in

Para 1.7.1(a) and Para 1.7.2(a), the Cabinet observed that the interest amount shown in Para 1.7.2(a) shall not exceed the principal amount.

Regarding the method of payment under Para 1.7, it was decided that the paddy would be allocated to the mill only after recovery of the entire

amount.The amount will be paid in 45 days, or in three annual installments with 10 percent interest. The Chief Minister is empowered to approve the

detailed notification of the scheme, including the necessary amendments, at his own level.â€​

The proposed Policy is attached as Annexure R-3 and mode of settlement of defalcated default amount is stated as under:-

Lump Sum without any interest component.

Two instalments with interest component @ 10%.

Three instalments with interest component @ 10%.

Thereafter, the OTS Policy dated 07.09.2017, was ultimately notified. The entire sequence of events as delineated above reveals that there is no such

indication of a cap of one year for deposit of defalcated default amount. In fact as per communication dated 25.08.2017 (Annexure R-4) attached with

affidavit dated 21.01.2021, there is a mention of three annual installments with 10% interest, clearly indicating that amount could be deposited in three

annual installments which in natural and normal parlance would mean that amount in question could be deposited in three equal yearly installments.

I do not find any merit in the argument raised by learned counsel for the State that details of the notification were worked out at a later stage and it

was decided that amount in question would have to be paid within one year whether by way of one installment or two installments or quarterly

installments. A bare reading of the provision regarding mode of payment in OTS Policy dated 07.09.2017 does not fall for such interpretation. The

words “three equal yearly/half yearly/quarterly installments†cannot by any stretch of imagination mean to read one single installment in one year

or two equal installments within one year or three equal installments in one year. Therefore, in my considered opinion, stand taken by the respondents

that no benefit could be given to the petitioner under the OTS Policy dated 07.09.2017, is not justified. There is further no merit in the stand taken by

respondent-authorities that at this stage, no benefit under the OTS Policy can be offered as the same was for a limited period. The petitioner has been

pursuing the matter constantly since notification of the policy on 07.09.2017. It applied under the OTS Policy of 2017 within the stipulated period.When

its application was not being decided, the petitioner approached this Court.Its application was rejected vide impugned order dated 14.03.2018

(Annexure P-17). Present writ petition was filed immediately. Land of wife of one of the petitioner’s firm’s partner was offered for

security.Thus decision dated 23.12.2020 in CWP No.327 of 2020, which deals with extension of time to deposit the amount in terms of OTS policy, is

not applicable in the factual matrix of this case. Gainful reference can in fact be made to a division bench judgement of this court in Anu Bhalla versus

DM,Pathankot, 2021(1) RCR (Civil)30. The object of an OTS Policy is to obviate lengthy procedures and ensure quicker deposit of dues, while

offering commensurate relief to the debtor as well.In the present case the petitioner has been pursuing the matter since issuance of the policy. Thus in

my considered opinion petitioner’s clam cannot be rejected on the ground that stipulated period in the policy has come to an end.

The petitioner has expressed that as per its calculations in terms of OTS Policy, a sum of Rs.1,02,000,00/- is due in case, he is allowed to pay the

amount in one go. It is submitted that petitioner is ready and willing to deposit the entire amount in one go. Therefore, he should be permitted to do so

even at this stage without any interest being levied. It issubmitted that petitioner had offered to deposit the amount within three years as per the Policy

and would have done so in three annual equated installments as well but he has never been given the chance to do so due to the incorrect and wrong

interpretation by the learned Principal Secretary. Therefore, now petitioner be permitted to deposit the amount without interest.

Keeping in view the facts and circumstances of the case, while in my considered opinion benefit of OTS Policy should be afforded to the petitioner, I

am not inclined to accept the submission on part of the petitioner that it should be permitted to deposit the amount in question without the component of

interest. Admittedly, the petitioner had offered to deposit the amount in question in equated installments within three years. In this eventuality, as per

the OTS Policy dated 07.09.2017, the petitioner was liable to pay 10% compounded interest.The amount which is admitted to be due even as per the

petitioner, has not been deposited till date. Over three years have since passed. At this stage, learned counsel for the petitioner has submitted that

calculations in terms of the Policy be given to the petitioner and the amount in question would thereafter be deposited.

I do not find any justification in first directing calculations to be handed over to the petitioner and then affording time to deposit the amount in question.

Even as per calculations of the petitioner, a sum of Rs.1,02,00,000/- is due. Thus, this amount in any case, should be deposited immediately by the

petitioner. Impugned order dated 14.03.2018 (Annexure P-17) is accordingly set aside, subject to the petitioner depositing the sum of Rs.1,02,00,000/-

within 15 days from receipt of certified copy of this order. It is made clear that the interest component as stipulated in the OTS Policy dated

07.09.2017, in case of three annual equated installments, would have to be deposited by the petitioner. The calculations thereof according to the

Department in this respect be intimated to the petitioner within one week of deposit of Rs.1,02,00,000/- and the petitioner shall be liable to pay the

same within four weeks thereafter.

It is made clear that in case, amount of Rs.1,02,00,000/- is not deposited by the petitioner within 15 days as above, benefit of the OTS Policy dated

07.09.2017 would not be available to it.

Petition is disposed of accordingly.