Skip to content


A.R.A. Karuppiah Nadar and ors. Vs. the Commissioner of Civil Supplies, Madras and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 2416 etc. of 1970
Judge
Reported inAIR1972Mad204
ActsMadras Revenue Recovery Act
AppellantA.R.A. Karuppiah Nadar and ors.
RespondentThe Commissioner of Civil Supplies, Madras and anr.
Excerpt:
.....to me that the argument, as it stands, is..........seek in this batch is to interdict the respondents from invoking the provisions of the madras revenue recovery act for recovering certain alleged arrears due from the petitioners pursuant to certain contracts entered into between the petitioners and the commissioner of civil supplies. the agreement which is entered into between the parties on the one hand and the state on the other, may be looked into at this stage for a proper reckoning of their rights and obligations. the petitioners are all characterised as procuring agents and they have entered into an agreement to procure paddy and rice under the madras paddy and rice dealers licensing and regulation order, 1966. the procuring agent is expected to deposit as security (deposit) a specified sum for the due fulfilment of his part.....
Judgment:
ORDER

1. In this batch of writ petitions, the common question involved is whether the respondents are in order in invoking the provisions of the Madras Revenue Recovery Act and whether it is warranted. In all these cases, a writ of Mandamus is sought by the petitioners. The writ petitions however are not very clear as to the exact relief sought. The learned counsel for the petitioners makes it clear that the relief which the writ petitioners seek in this batch is to interdict the respondents from invoking the provisions of the Madras Revenue Recovery Act for recovering certain alleged arrears due from the petitioners pursuant to certain contracts entered into between the petitioners and the Commissioner of Civil Supplies. The agreement which is entered into between the parties on the one hand and the State on the other, may be looked into at this stage for a proper reckoning of their rights and obligations. The petitioners are all characterised as procuring agents and they have entered into an agreement to procure paddy and rice under the Madras Paddy and Rice Dealers Licensing and Regulation Order, 1966. The procuring agent is expected to deposit as security (deposit) a specified sum for the due fulfilment of his part under the agreement. Inter alia, the agreement provides that the procuring agent shall purchase quantities of food grains as may be directed by the Commissioner of Civil Supplies/Collector/the District Revenue Officer/Revenue Divisional Officer/District Supply Officer/Tahsildar at the prices fixed by the Government; he shall be responsible for the safe custody of the food grains procured by him; he shall see that the stocks purchased by him without any adulteration; the procuring agent shall deliver the stock on cent per cent weighment at the despatching end; the procuring agent agrees to book the consignments by rail under a clear and unqualified railway receipt; the procuring agent further undertakes to remit the value of the shortages if any noticed at the receiving end. One other important clause agreed to between the procuring agent and the Government is that any amount falling due to the Government from the procuring agent in the working of the agreement shall be recoverable as if it were an arrear of land revenue. After noticing the salient features of the agreement it is necessary to state that this batch itself is divisible under two heads; the first one is those writ petitions where the parties have entered into an agreement with the State; secondly those writ petitions where there is no agreement as such between the State and the procuring agent in the matter of the agent undertaking to remit the value of the shortage, if any, noticed at the receiving end. In this latter batch can also be included Writ Petition No. 2424 of 1970. I shall therefore deal with the cases covered by the agreement and the cases where the procuring agent did not undertake to shoulder the responsibility to cover any shortage in case such shortage occurs.

2. It is also common ground that, in this batch of Writ Petitions, orders under the Revenue Recovery Act have been issued only in Writ Petitions Nos. 2420, 2423, 2424 and 2432 of 1970, and in the other writ petitions, formal notices of demand have been issued by the respective authorities calling upon the procuring agents to remit the value of the shortage noted at the place of destination within a period mentioned in the said notice. There was also a threat that, in default, the amount shall be recovered from the supply bill or security deposit.

3. I have prefaced the consideration of the facts as above so that the recitals in the affidavit can easily be understood. I am now taking up writ petition No. 2416 of 1970 and it is common ground that the facts if notices in this case would suffice for the disposal of this batch of writ petitions. The petitioner in W. P. No. 2416 of 1970 is a dealer in paddy and rice having been licensed as such under the Madras Paddy and Rice Dealers Licensing Regulation Order, 1968. It is admitted that he was appointed as a procuring agent and he was acting as such under an agreement containing the several clauses already excerpted. The modus operandi in the matter of despatch of procured goods is clearly set out in the counter-affidavit filed on behalf of the State. It is extracted for the purpose of ready understanding:

'At the time of loading, the consignment is only test checked by the staff, who supervised the loading. The dealer or his agent signs the weight check memo at the time of loading accepting the test weighment made by the staff. The weight noted at the despatching end is on the basis of the weighment. After putting the consignment in the wagons, the wagons are sealed in the presence of the consignor. The seals are broken open at the destination after verification of the seals. The consignor or his representative is at liberty to be present at the destination when the consignment is unloaded. At the destination where the consignment is accepted the consignment is subjected to cent per cent weighment. Since petitioners are entitled to payment for the actual supply of foodgrains, the weight of foodgrains taken at the destination will determine the quantity supplied by the petitioners. If there was any shortage detected at the destination the over payments must be recovered. After the detection of the shortage the details are communicated to the despatching end for regularisation. Details of names of consignors, their agency etc., have to be obtained from the subordinate officers. On receipt of these particulars, the value of shortages are worked out by the Accounts Officers concerned and the persons responsible for the shortages are made to pay the cost of the shortages. This will normally take some time and hence the reason for the delay in the issue of notices to the dealers. In cases of protest received from the dealers, the merits and demerits are discussed and the reasons for their non-acceptance are given in the recovery order.'

It is, therefore, seen that, at the time when the consignment is loaded, the goods are tested, checked and weighed in the presence of the representative of the Government. At that time, it is also common ground that a certificate known as the weight check memo is issued by the representative of the State present at the time of the despatch. Invariably it is signed by the Revenue Inspector and the Special Deputy Tahsildar (Loading). It is no doubt countersigned by the procuring agent himself. This weight check memo no doubt says that the bags were weighed and weights recorded are correct. But it should be noted that this is merely a test check as, though the number of bags in the consignment amounted to 500, the number of bags weighed were actually 125. This is only by way of illustration. Invariably the number of bags weighed is disproportionately low to the number of bags which are actually the subject-matter of consignment. At the place of destination, the shortage is noticed. But, as it happens, no notice of such shortage of the goods was ever given to the petitioner as the consignor-cum-procuring agent. What is done is that, after some time, when the shortage is reckoned and its value arrived at by the audit department, a certain sum is claimed as if it is due from the procuring agent as a result of the alleged shortage in supply of the procured paddy or rice. The gravamen of the charge of the petitioner is that at no time he was put on notice of the fact that at the destination there was a shortage, or there was an apprehension of a shortage and that each weighment was effected as required under the agreement at the place of destination and that the shortage was discovered by such a process. The petitioner, therefore, complains that in the absence of any awareness on his part of such shortage in the supply, and as the weight memo issued would show that the despatch was regular and the weight of the consignment was correct, he ought not to be mulcted with the value of the alleged shortage on the mere ipse dixit of the consignee, without further examination of the material and the details connected with such shortage.

4. His next contention is that if therefore, there is no consensus between the procuring agent and the State regarding the alleged arrears and the quantum of such arrears, then it would be highly inequitable to invoke the provisions of the Revenue Recovery Act and threaten a summary process against the procuring agent for the adjustment of such arrears, either from the pending bills, or from the security deposit, or otherwise. It is in this perspective that the petitioners have come up to this Court for the issue of writs of mandamus directing the respondents not to pursue their notices threatening recoveries of the alleged arrears under the Revenue Recovery Act without the quantum of arrears of the liability to pay the same being tested and found against the petitioners in a manner known to law.

5. Regarding the first contention that the petitioner did not have an opportunity at the time of the reckoning of the shortage at the place of destination, it appears to me that the argument, as it stands, is well-founded. In all cases, the consignee is the representative of the State. He is either the Collector, or the District Revenue Officer or other duly authorised by the Commissioner of Civil Supplies. Under the contract, the stock has to be delivered by the procuring agent after cent per cent weighment at the despatching end. This obligation which the procuring agent has undertaken is one which has to be found on facts and materials and cannot be projected merely because the consignee intends to do so. The procuring agent prima facie has the weighment check memo issued by a competent officer of the State who is designed as the Special Deputy Tahsildar (Loading). If such a representative takes the responsibility of making a test check and subjectively satisfies himself as to the result thereof, that the consignment is regular and it ought to weigh what it purports to weigh, then it would be difficult for the other wing of the State to assume that the consignment is not regular and the supposition as to weighment is incorrect, without apprising the person responsible, of the situation. To make it more clear, natural justice--requires, that at the station of despatch, the consignor should be notified of the apprehended shortage, or the shortage in fact of the consignment and after due notice to him, the weighment at the other end ought to have been undertaken. What exactly has been done and how the shortage was discovered and how ultimately it was valued are all matters which have to be considered at the appropriate stage in an appropriate forum and it is unnecessary for me to undertake such an elaborate enquiry in a proceeding under Article 226. The fact however remains that merely because the authorities have given a notice threatening to take action under the Revenue Recovery Act, it is not as if the petitioners should willingly submit to the process and pay the sum without demur. It is, in this aspect, that the impugned orders threatening recovery under the Revenue Recovery Act are challenged. The apprehension entertained on the part of the petitioners that a similar action is likely to be taken for the recovery of the value of the alleged shortage once again under the penal and summary process available under the Revenue Recovery Act appears to be not without foundation. No doubt, the procuring agent has agreed that any arrears or any amount payable by him to the State under the agreement in question could be recovered under the Revenue Recovery Act. But this is not the be-all-and-end-all of the question. This leads us to the second contention of the learned counsel for the petitioners.

6. The Revenue Recovery Act is a law intended to enable the State to recover with utmost expedition and without undue expense, amounts payable by the defaulters, whose default cannot be challenged in any manner known to law in any Court of law. In fact, there must be consensus ad idem between the State and the defaulter as regards the nature and quantum of default if the State intends to set the provisions of the Revenue Recovery Act into motion for recovery of such arrears found and payable by the defaulters. As a matter of fact, there are innumerable instances in which statutes have adopted the process specifically enumerated in the Revenue Recovery Act as part and parcel of their own, for the easy recovery of the amounts due to the State in the circumstances mentioned in each of those statues. Thus the Revenue Recovery Act being enabling it must also satisfy certain acid tests, the most important of which is that the arrears sought to be recovered under that Act are indisputable and cannot be challenged under law. This seems t be the sine qua non for the State to invoke the provisions of the Revenue Recovery Act. This is absent in the instant case. As a matter of fact, I have stated that the gravamen of the charge is that no opportunity was given to the petitioners to associate themselves with the authorities at the crucial moment when the shortage was being found and reckoned at the station of destination. The first notice given to the procuring agent on this matter is when a demand notice is raised against him. Thus the process adopted for the purpose of reckoning the so-called arrears violates the principles of natural justice, since no notice has been given to the procuring agent at the material point of time when such shortage is discovered or attempted to be discovered. I am therefore of the view that whatever remedies the State may have in the matter of the recovery of the various amounts payable by the procuring agents (the Writ Petitioners) it cannot summarily invoke the provisions of the Revenue Recovery Act on the foot that there is a clause to that effect in the agreement between the parties in case where such an agreement has been entered into. In the other case, where there is no such agreement between the procuring agent and the State to pay for the shortage, it follows a fortiori that the provisions of the Revenue Recovery Act cannot be invoked at all.

7. In the result, the writ petitions are allowed. But the only direction that could be given in the circumstances is that the respondents in the absence of consensus between the Department and the procuring agents as regards the value of the shortages cannot invoke the provisions of the Revenue Recovery Act. No doubt, they are at liberty to recover the same by a process available under the contract and under law. The rule nisi in each of these cases is therefore discharged, in view of the directions as above. There will be no order as to costs.

8. Petitions allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //