Hon'ble Rakesh Srivastava, J.
(Delivered by Hon'ble Krishna Murari, J.) The dispute in this bunch of writ petitions is between the Government and the rice millers on account of condition of 67% Out Turn Ratio (recovery percentage) (hereinafter referred to as 'OTR') of custom milled rice fixed by the Union Government vide circular dated 25.10.2011.
In order to ensure equitable distribution of the food grains and to prevent exploitation of farmers, the Government has been purchasing food grains from farmers after paying a price known as Minimum Support Price. The food grains so purchased is harnessed into the Central Pool for distribution through Public Distribution System. For achieving the objective, the Government has framed various Control Orders under the provisions of Essential Commodities Act, 1955 and also issues notifications/executive instructions from time to time.
In case of paddy, it is purchased from farmers at Minimum Support Price, which is notified every year. After purchase, the paddy is given for hulling to licensed rice millers. The millers through a mechanical process, remove the husk and bran layers from the paddy, resulting into production of rice. The rice millers are under an obligation to return the specified quantity and quality of rice to the Government depending upon the paddy supplied to it. The process is known as 'Custom Milling of Rice (for short CMR). During the kharif season 2011-12, the Government of India issued a circular letter dated 25.10.2011 fixing the Minimum Support Price of rice. The said circular also provides that OTR for common rice will be 67% of the paddy supplied for hulling.
The petitioners have challenged fixing OTR (recovery percentage) of 67% for common rice being absolutely arbitrary, illegal and unreasonable and without considering the fact situation prevailing in different regions and part of the State of Uttar Pradesh. It is also pointed out that the said OTR, vide circular dated 31.08.2004, was fixed as 62% and now it has been arbitrarily increased to 67%. It is also pointed out that in view of the damage of the rice during recovery from hybrid common raw paddy, 67% recovery as per specification is not possible.
The power to require a rice miller to convert paddy into rice emanates from the provisions of Uttar Pradesh Rice and Paddy (Levy and Trade) Order, 1985 framed in exercise of powers conferred by Section 3 of Essential Commodities Act.
Procurement of food grains under the price support system in various States including the State of Uttar Pradesh is undertaken by Food Corporation of India in association with State Government and its agencies. The food grains procured by the State Government and their agencies are ultimately taken over by the Food Corporation of India. As per the provisions of Control Order and Food Purchase Scheme, the millers are required to enter into an agreement with the State Government. The agreement provides for terms and conditions under which the millers agree to convert paddy into rice. It not only regulates the rights and liabilities of the parties but also stipulates the forum for resolution of disputes and the mode for recovery of damages, if any, suffered by the Government.
In the counter affidavit filed on behalf of the State of U.P., it has been stated that the Government of India has fixed uniform OTR of 67% for Raw Rice and 68% for Parboiled Rice through out the country. The said ratio has been determined on the basis of the trial milling conducted by three specialised scientific institutions, namely, Central Food Technological Research Institute, Mysore, Paddy Processing Research Centre, Thanjavur and Indian Institute of Technology, IIT, Kharagpur in 1993-94 as per the recommendations of the Expert Committee headed by Shri. A.V. Gokak, the then Managing Director, Food Corporation of India.
The trials conducted during 1993-94 in State of Uttar Pradesh conducted by Central Food Technological Research Institute have shown the average OTR for Raw Rice as 71.10%. However, the other ratio at the rate of 67% for Raw Rce has been fixed by the Union Government uniformly for all the States.
Subsequently, on the request made by various State Governments, fresh trial millings were conducted by the Food Corporation of India in 2004-06 through reputed institutes, such as, IIT, Kharagpur; C.R.R.I., Cuttak, P.P.R.C., Thanjavur as well as Agricultural Universities, Hissar, Pantnagar, Raipur and Kanpur and keeping in view the reports of the trial milling carried out in all zones, Food Corporation of India recommended the continuance of existing OTR, i.e., 67% and 68% for Raw Rice and Parboiled Rice respectively and these OTR are continuing since 1995-96. Vide Government Order dated 25th October, 2011, Union of India fixed the provisional rates of economic cost of Custom Milled Rice and cost of new 50 kg. Gunny Bags used by Government of U.P. and its agencies for the procurement of Custom Milled Rice for the Central Pool during the Kharif marketing Session 2011-12 at the OTR of 67%.
Vide notification dated 19th September, 2011, State of Uttar Pradesh issued its policy for procurement of Custom Milled Rice in the Central Pool during the Kharif marketing session 2011-12. Vide said notification, the State Government fixed a detail procedure for the sale and procurement of paddy and rice in the State of U.P. As per paragraph 30 of the Notification dated 19th September, 2011, the State Government decided that delivery of Custom Milled Rice in the Central Pool during the Kharif marketing session 2011-12 shall be made to the Food Corporation of India at the standard prescribed rate by the Government of India at the OTR for 67% for Raw Rice. All the petitioners entered into an agreement with the purchase agencies of the State Government for 'Custom hulling of Common Raw Rice'' at the OTR of 67% for the Kharif Marketing year 2011-12 and 2012-13.
Paragraph 2 (3) (iii) of the 'Agreement regarding Processing of Paddy into Rice' provides that if the miller supplied rice lesser in quantity than the recovery percentage mentioned in paragraph 2 (d), the miller shall compensate the State Government for the quantities of rice in short supplies at the rate of one and half times the prevailing market price of the concerned variety of rice. Paragraph 11 of the 'Agreement regarding Processing of Paddy into Rice' provides that the State Government may recover any amount due from the bank guarantee given by the miller. Any loss occurred to the State Government due to non delivery of custom milled rice by or due to production of such rice which is not as per specification, will be recovered as land revenue from miller. Paragraph 12 of the aforesaid agreement provides that every dispute difference or question touching out of his agreement or the subject matter thereof shall be referred to the arbitration of the authorities as per value of the Government property involved in the matter, and the arbitrator shall pass an award, which shall be binding on both the parties.
The relevant paragraphs/conditions no. 2, 11 and 12 of the aforesaid 'Agreement regarding Processing of Paddy into Rice' are being quoted as under:
"2. (a) The Miller shall hull paddy supplied by the State Government and shall render all other services in connection with and ancillary thereto as hereinafter appearing:-
(i) Loading and unloading of paddy and rice at the premises of miller and storage thereafter.
(ii) Weighment of Paddy or rice,
(iii) Drying of paddy,
(iv) Dehusking of paddy,
(v) Dara making of rice,
(vi) Opening, filling, stencilling and seving of bags,
(vii) Storage of paddy/rice in the mill premises,
(viii) Loading of rice bags into truck for delivery,
(b) For shelling and other services under sub-clause (a) above, the miller shall be paid Rupees ... ... .. per quintal of paddy (as fixed by the Government for period of the Kharif Year . . . . .) and shall also be allowed to retain and appropriate to himself, the husk, rice bran polish and kinkee obtained in the milling process of paddy supplied to him under this agreement.
(c) The miller shall be responsible for loss, destruction or deterioration of paddy delivered to him till the delivery of rice.
(d) The miller shall return to the Regional Food Controller Faizabad Region, Faizabad 67% (Out Turn Ratio to be mentioned) quintals of rice or any other quantity fixed by the Government from time to time for every 100 quintals of paddy supplied to him. The rice should be of the same variety as that of paddy supplied to him.
(e) (i) The above quantity of rice to be delivered by the miller to the Regional Food Controller shall conform to the specifications laid down in the orders issued by the State Government from time to time under Section 3 of the Essential Commodities Act, 1955, hereinafter referred to as the said orders. If the rice to be delivered by the miller does not conform to the specification prescribed by the said orders (called the prescribed specifications) the miller will compensate the Government at the rates prescribed in the said orders on such quantity of rice which is not found to conform to prescribed specifications.
(ii) If the miller deliveres rice which is above the rejection limit mentioned in prescribed specifications, the Regional Food Controller shall reject such rice and the quantity so rejected shall be made good by the miller within 7 days of rejection and such supply shall be of the same variety as the miller would have delivered has there been no rejection.
(iii) If the miller supplied rice less in quantity then the recovery percentage mentioned in sub-clause (d) the miller shall compensate the State Government for the quantities of rice in short supplies at the rate of one and half times the prevailing market price of the concerned variety of rice. The decision of the Regional Food Controller regarding variety, specification and prevailing market price under sub-clause (d) and (e) shall be final and binding on the miller.
(iv) The miller shall return all the gunny bags supplied by the Regional Food Controller to the Regional Food Controller at the time to delivery of rice.
11. The State Government may recover any amount due from the bank guarantee given by the miller. Any lose occurred to the State Government due to non delivery of custom milled rice by or due to production of such rice which is not as per specification, will be recovered as land revenue from miller.
12. Every dispute difference or question touching out of this agreement or the subject matter thereof shall be referred to the arbitration of the following authorities as per value of the Government property involved:
S. No. Level of Arbitration Value of disputed Property 1 District Magistrate Upto Rs. 2.00 Lacs 2 Divisional Commissioner Above Rs. 2.00 Lacs and upto Rs. 10.00 Lacs 3 Principal Secretary/Secretary, Food & Civil Supplies Above Rs. 10.00 Lacs The decision of the arbitrator shall be final and binding on the parties.
The arbitrator shall pass an award, which shall be binding on both the parties."
It is further stated in the counter affidavit that petitioners deliberately avoided to supply the Custom Milled Rice in the Central Pool at the OTR of 67% and violated the terms and conditions of the agreement entered with the purchase agencies of the State Government during the Kharif marketing year 2011-12 and 2012-13. It is also stated that for recovery of balance Custom Milled Rice, recovery proceedings have been taken against the petitioners and it is only thereafter, they have approached this Court challenging the condition imposed in the Circular dated 25.10.2011 providing 67% OTR.
Admittedly, 67% OTR has been fixed on the basis of the views expressed by experts in Technology and Scientific Bodies. The question which arises for consideration is to what extent, judicial review is permissible in such matters, where the Government has taken a policy decision based on views expressed by such bodies having expertise.
In the case of University of Mysore Vs. C.D. Govinda Rao & Anr., AIR 1965 SC 491, while considering the criticism made by the High Court in respect of recommendations made by the Board of Appointment of the University recommending an appointment to the post of Research Reader, it was observed as under.
"Before we part with these appeals, however, reference must be made to two other matters. In dealing with the case presented before it by the respondent, the High Court has criticised the report made by the Board and has observed that the circumstances disclosed by the report made it difficult for the High Court to treat the recommendations made by the experts with the respect that they generally deserve. We are unable to see the point of criticism of the High Court in such academic matters. Boards of Appointments are nominated by the Universities and when recommendations made by them and the appointments following on them, are challenged before courts, normally the courts should be slow to interfere with the opinions expressed by the experts. There is no allegation about mala fides against the experts who constituted the present Board; and so, we think, it would normally be wise and safe for the courts to leave the decisions of academic matters to experts who are more familiar with the problems they face than the courts generally can be. The criticism made by the High Court against the report made by the Board seems to suggest that the High Court thought that the Board was in the position of an executive authority, issuing an executive fiat, or was acting like a quasi-judicial tribunal, deciding disputes referred to it for its decisions. In dealing with complaints made by citizens in regard to appointments made by academic bodies, like the Universities, such an approach would not be reasonable or appropriate. In fact, in issuing the writ, the High Court has made certain observations which show 'that the High Court applied tests which would legitimately be applied in the case of writ of certiorari. In the judgment, it has been observed that the error in this case is undoubtedly a manifest error. That is a consideration which is more germane and relevant in a procedure for a writ of certiorari. What the High Court should have considered is whether the appointment made by the Chancellor had contravened any statutory or binding rule or ordinance, and in doing so, the High Court should have shown due regard to the opinions expressed by the Board and its recommendations on which the Chancellor has acted. In this connection, the High Court has failed to notice one significant fact that when the Board considered the claims of the respective applicants, it examined them very carefully and actually came to the conclusion that none of them deserved to be appointed a Professor. These recommendations made by the Board clearly show that they considered the relevant factors carefully and ultimately came to the conclusion that appellant No. 2 should be recommended for the post of Reader. Therefore, we are satisfied that the criticism made by the High Court against the Board and its deliberations is not justified."
In another decision in the case of Basavaiah (Dr.) Vs. Dr. H.L. Ramesh & Ors., (2010) 8 SCC 373, in paragraph 21, it has been observed as under.
"It is the settled legal position that the courts have to show deference and consideration to the recommendation of an Expert Committee consisting of distinguished experts in the field. In the instant case, the experts had evaluated the qualification, experience and published work of the appellants and thereafter recommendations for their appointments were made. The Division Bench of the High Court ought not to have sat as an appellate court on the recommendations made by the country's leading experts in the field of Sericulture."
In the case of Avishek Goenka Vs. Union of India & Anr., (2012) 5 SCC 275, while considering the powers and functions of TRAI, the Hon'ble Apex Court in paragraph 22 has observed as under.
"We have clearly stated that it is not for this Court to examine the merit or otherwise of such policy and regulatory matters which have been determined by expert bodies having possessing requisite technical know-how and are statutory in nature. However, the Court would step in an direct the technical bodies to consider the matter in accordance with law, while ensuring that public interest is safeguarded and arbitrary decisions do not prevail."
In a more recent decision, in the case of G. Sundarrajan Vs. Union of India & Ors., (2013) 6 SCC 620, Hon'ble Apex Court has observed as under.
"15. India's national policy has been clearly and unequivocally expressed by the legislature in the Atomic Energy Act. National and international policy of the country is to develop control and use of atomic energy for the welfare of the people and for other peaceful purposes. NPP has been set up at Kudankulam as part of the national policy which is discernible from the Preamble of the Act and the provisions contained therein. It is not for Courts to determine whether a particular policy or a particular decision taken in fulfilment of a policy, is fair. The reason is obvious, it is not the province of a court to scan the wisdom or reasonableness of the policy behind the Statute.
15.1 Lord Macnaughten in Vacher & Sons v. London Society of Compositors has stated: (AC p.118) "... Some people may think the policy of the Act unwise and even dangerous to the community......But a Judicial tribunal has nothing to do with the policy of any Act which it may be called upon to interpret. That may be a matter for private judgment. The duty of the Court, and its only duty, is to expound the language of the Act in accordance with the settled rules of construction."
15.2 In Council of Civil Service Unions v. Minister for the Civil Service (AC p. 414 : All ER p. 954), it was held that it is not for the Courts to determine whether a particular policy or particular decision taken in fulfilment of that policy are fair. They are concerned only with the manner in which those decisions have been taken, if that manner is unfair, the decision will be tainted with what Lord Diplock labels as ''procedural impropriety'.
15.3 This Court in M.P. Oil Extraction and Anr. v. State of M.P. held that unless the policy framed is absolutely capricious, unreasonable and arbitrary and based on mere ipse dixit of the executive authority or is invalid in constitutional or statutory mandate, court's interference is not called for."
Thus, it would be seen that unless the Policy decision taken by the Government is demonstrated to be tainted with mala fide or is capricious, totally unreasonable and arbitrary or there are procedural impropriety and illegality or is invalid as per constitutional or any statutory mandate, the Court would not interfere in the same.
In the case in hand, the OTR of 67% was determined on the basis of the reports of the technical scientific institutions having expert technical know-how, namely, Central Food Technological Research Institute, Mysore, Paddy Processing Research Centre, Thanjavur and Indian Institute of Technology, IIT, Kharagpur and, thus, it is not for this Court to enter into merits of the policy to determine whether 67%, OTR determined on the basis of the reports of the technical experts in the field is viable or not. The petitioners have failed to demonstrate that the policy is tainted with any mala fide, or procedural irregularity or illegality or in violation of any statutory provision.
Apart from above, Kharif season 2011-12 and 2012-13 having been already over, the petitioners cannot be permitted to challenge the policy and the terms of agreement at such a belated stage.
It may be relevant to point out at this stage that the policy providing for recovery rate to be 67% and also the said clause incorporated in the agreement with the rice millers were subject matter of challenge in civil misc. writ petition no. 35296 of 2013 (M/s. Maa Bhawani Rice Mill & Anr. Vs. State of U.P. through Special Secretary & Ors.) connected with several other writ petitions. A Division Bench of this Court vide judgment and order dated 24-02-2014 refused to go into the question relating to the challenge to clause of paddy procurement policy and the agreement. It may be relevant to quote paragraph 21 of the said judgment :
"21.We have examined the aforesaid decisions cited on behalf of counsel for the respondents. In some writ petitions, a challenge has also been laid to the paddy procurement policy of the State Government and the agreement entered into between the millers and the State Government, on the ground that the policy and the agreement contain unilateral, arbitrary, one sided clauses and the petitioners cannot be compelled to perform the same. However, we find that all the millers have duly entered into the agreement at the start of Kharif season and all the writ petitions were filed after the Kharif season and even after the extended period for return of CMR, is over. Admittedly, the millers have taken paddy from the State Government and the procurement agencies on the basis of aforesaid policy and the agreement and therefore, at this distance of time, the petitioners cannot be permitted to challenge the same. For the said purpose, we uphold the contention of learned counsel for the respondents and refuse to go into the questions relating to the challenge laid to certain clauses of paddy procurement policy and the agreement. Since the contention of counsel for the respondents raised in this regard is being upheld, therefore, we do not consider it necessary to examine various judgments cited by the respondents on the aforesaid proposition of law."
Reference may also be made to an identical writ petition challenging the imposition of condition of 67% OTR of CMR fixed by Union of India vide same circular dated 25.10.2011 being Writ Petition No. 3626 of 2014 decided on 01.05.2014, which has been dismissed with following observations.
"The agreement entered into by the petitioner with the State, under the Custom Milling Scheme of the Kharif Year 2012-13 issued under the U.P. Rice and Paddy (Levy and Trade) Order, 1985, provides for an arbitration clause as follows:-
"12. Every dispute, difference or question touching out of this agreement or the subject matter thereof shall be referred to the arbitration of the following authorities as per value of the Government property involved.
S. No. Level of Arbitration Value of the disputed property 1 District Magistrate Upto Rs.2.00 Lacs 2 Divisional Commissioner Above Rs.2.00 lacs and upto Rs.10.00 Lacs 3 Principal Secretary/Secretary Food & Civil Supplies Above Rs.10.00 Lacs The decision of the arbitrators shall be final and binding on the parties.
The arbitrator shall give an award which shall be binding on both the parties."
The custom hulling was done by the petitioner under an agreement, which contains arbitration clause and thus any dispute with regard to quantities, recovery percentage, the quality of rice, the dates of deliveries, compensation if any, the delay if any in making payment and other disputes, which arise out of agreement have to be decided by the Arbitrator.
All such matters have been considered and that this Court has, in number of writ petitions, filed at Allahabad directed the petitioner to invoke arbitration clause. In case the petitioner wants any urgent relief against the recovery, it is always open to it to invoke arbitration clause and approach the Court under Section 9 of the Arbitration and Conciliation Act, 1996.
The writ petition is dismissed on the ground of alternative remedy of invoking arbitration clause."
Same view was taken by another Division Bench in an identical Writ Petition No. 4045 of 2014 and the petition was dismissed on the ground of alternative remedy of invoking arbitration clause vide judgment and order dated 15.05.2014.
It is also relevant to note that the judgment of this Court passed in M/s. Maa Bhawani Rice Mill (supra) has been affirmed by the Hon'ble Apex Court disposing of the Special Leave to Appeal (C) No (s). 12034-12109/2014 challenging the aforesaid judgment by making following observations:
"Having heard the learned counsel for the parties, while we are not inclined to interfere with the impugned order dated 24th February, 2014 passed by the High Court of Judicature at Allahabad, we allow the petitioners to deposit the price of the paid stock proportionate price of CMR as decided by the High Court by 15th June, 2014, failing which the petitioners shall be liable to pay interest @ 12% from the due date till the amount is paid."
A perusal of the judgment of the Hon'ble Apex Court leaves no room of doubt that the issue being raised in this writ petition, which came to be adjudicated in Writ Petition No. 35296 of 2013 (M/s. Maa Bhawani Rice Mill & Anr. Vs. State of U.P. through Special Secretary & Ors.), stands affirmed by Hon'ble Apex Court and, thus, we find no reason to take a different from the one taken by the aforesaid Division Bench decisions.
The writ petitions, accordingly, fail and stand dismissed.
However, in the facts and circumstances, there shall be no order as to costs.
23.12.2014 VKS