State of Punjab and Another vs K.K. Rice and General Mills

L.N. Mittal, J.—Defendants-State of Punjab and District Food and Supply Controller having remained unsuccessful in both the courts

below have filed the instant second appeal.

Plaintiff-Respondent M/s K.K. Rice and General Mills through its proprietor Khushal Chand Vohra filed suit for recovery of `16,34,000/-against

Defendant-Appellants alleging that the Plaintiff supplied levy rice to Defendant No. 2.

Defendant No. 2 has not paid amount of `7,44,126/-of bill dated 30.12.2000, `2,43,801/-of bill dated 12.4.2001 and `1,30,824/-of bill dated

3.7.2001. The said amount has been withheld by the Defendants on the ground that Food Corporation of India (FCI) has withheld the same

Regular Second on the plea that Plaintiff misappropriated paddy belonging to FCI. The Plaintiff alleged that Defendants have no right to withhold

the price of levy rice supplied by the Plaintiff to Defendants. Accordingly, the Plaintiff claimed recovery of `16,34,000/-which included interest @

12% per annum.

The Defendants admitted supply of levy rice by Plaintiff to Defendant No. 2 and also admitted withholding of price of levy rice as alleged by the

Plaintiff. The Defendants pleaded that they paid the price of levy rice to the Plaintiff as and when the amount was received from the FCI. The

Defendants also pleaded that FCI has withheld the disputed amount as per its letter dated 29.5.2001 because Plaintiff has misappropriated paddy

of the FCI and there is dispute between the Plaintiff and FCI which has been referred to arbitration. Various other pleas were also raised.

Learned Civil Judge (Senior Division), Gurdaspur vide judgment and decree dated 25.8.2006 decreed Plaintiff''s suit. First appeal preferred by

Defendants has been dismissed by learned Additional District Judge, Gurdaspur vide judgment and decree dated 27.7.2010. Feeling aggrieved,

the Defendants have preferred the instant second appeal.

I have heard learned Counsel for the Appellants and perused the case file.

Learned Counsel for the Appellants vehemently contended that the levy rice given by Plaintiff to the Defendants was given by Defendants to

FCI and FCI has withheld the payment thereof because the Plaintiff misappropriated the paddy of FCI and therefore, Defendants are not liable to

pay the suit amount to the Plaintiff. The contention is completely untenable Regular Second and devoid of any substance. Admittedly, the Plaintiff

supplied the levy rice to the Defendants. Consequently, the Plaintiff is entitled to recover the price of the levy rice from the Defendants. If there is

any dispute between Plaintiff and FCI regarding alleged misappropriation of paddy of FCI by the Plaintiff, the said amount cannot be withheld by

the Defendants and Plaintiff is entitled to recover the same from the Defendants. FCI cannot recover the suit amount in this manner from the

Plaintiff. FCI may resort to due process of law for recovery of the amount if any payable by the Plaintiff to the FCI. However, merely because the

FCI claims that some amount is recoverable from the Plaintiff by the FCI on account of misappropriation of paddy, the Defendants cannot

withhold the amount payable by them to the Plaintiff. The dispute whether any amount is recoverable by FCI from Plaintiff is to be adjudicated

upon by competent authority or court in separate proceedings and on account of that dispute, the Plaintiff cannot be deprived of the suit amount

which is recoverable by Plaintiff from the Defendants.

There is concurrent finding of both the courts below which have been arrived at on the basis of material on record and is supported by cogent

reasons. The said finding cannot be said to be perverse or illegal so as to call for interference in second appeal. No question of law much less

substantial question of law arises for determination in the instant second appeal. The appeal is completely devoid of any merit and is accordingly

dismissed in limine.