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TMI Blog2024 (12) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... an and anybody whatsoever, indicating the legislative intent to create an all-encompassing framework for recovery. Clause 15 additionally specifies that debts owed to certain banks and statutory bodies also qualify as public demands, provided that the liability is acknowledged in writing. As held by the Full Bench of the Patna High Court in Ram Chandra Singh [ 1986 (11) TMI 394 - PATNA HIGH COURT ], the term public demand is of wide amplitude and encompasses all arrears or dues explicitly mentioned or implied in Schedule I. The deliberate legislative design of section 3(6) and Schedule I reinforces the inclusive scope of the term. Upon examination of admitted circumstances and the alleged default in delivery of CMR, it is unable to subscribe to the view taken by the Learned Single Judge on the existence of jurisdictional facts. A cause of action is stated to be a bundle of facts set out in the plaint. Similarly, jurisdictional facts are determined by the totality of circumstances in a given case. It is as simple as not omitting from consideration what is obvious. Likewise, a relevant circumstance, even if obfuscated, is not omitted from consideration while deciding a jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictional fact against realising the sums as a public demand under the Act. As a writ court or in an appeal under Article 136, we are not examining the contentions on alleged procedural deviations. It is left open to the respective Rice Millers to avail a statutory remedy as may be available under the Act. For availing a statutory remedy, we grant thirty days from today to the Rice Millers. In the event of a Rice Miller availing a statutory remedy as permitted by this Judgment, the said authority shall entertain the case without reference to the delay and the period of limitation in availing a remedy before the said authority. Appeal dismissed. - WITH CIVIL APPEAL NO. 1892 OF 2023 WITH CIVIL APPEAL NO. 1902 OF 2023 WITH CIVIL APPEAL NO. 1905 OF 2023 WITH CIVIL APPEAL NO. 1903 OF 2023 WITH CIVIL APPEAL NO. 1904 OF 2023 WITH CIVIL APPEAL NO. 1908 OF 2023 WITH CIVIL APPEAL NO. 1909 OF 2023 WITH 2 CIVIL APPEAL NO. 1911 OF 2023 WITH CIVIL APPEAL NO. 1910 OF 2023 WITH CIVIL APPEAL NO. 1914 OF 2023 WITH CIVIL APPEAL NO. 1912 OF 2023 WITH CIVIL APPEAL NO. 1913 OF 2023 WITH CIVIL APPEAL NO. 1915 OF 2023 WITH CIVIL APPEAL NO. 1916 OF 2023 WITH CIVIL APPEAL NO. 1917 OF 2023 WITH CIVIL APPEAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, Government of India, conveyed the fixation of provisional rates of CMR and the cost of gunny bags of fifty kilograms used in the procurement scheme. The State, through the Development Commissioner, issued the memo dated 07.12.2011, setting out the objectives and major features in the implementation of procurement of thirty lakh metric tons of paddy from the farmers in the State of Bihar for the procurement year 2011-12. The Civil Supplies Corporation has a role to play as the nodal agency of the State for the procurement of paddy during the year 2011-12. In furtherance of such an arrangement, the Development Commissioner, Food and Consumer Protection, Government of Bihar issued the letter dated 07.12.2011 appointing Bihar State Food Corporation as the nodal agency for procuring paddy and entrusting the paddy to Rice Millers for CMR. This letter was sent to all Divisional Commissioners and District Magistrates in the State. The Rice Millers, as per the scheme, are required to enter into an agreement with the State and Civil Supplies Corporation for milling the paddy procured from the farmers. It is a matter of record that the Rice Millers have entered into an independent agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MI SILKY RICE MILL Rs.5,21,46,846/- 20. 1894/2023 PURSHOTTAM PRASAD Rs.1,46,30,844.76/- 21. 1898/2023 GANESH PRASAD JAISWAL Rs.28,23,921.39/- 22. 1896/2023 M/S. AKASH FEED PVT. LTD. Rs.6,60,41,846.32/- 23. 1893/2023 M/S MAA JAGDAMBA RICE MILL Rs.2,19,61,092.53/- 24. 1899/2023 M/S PUJA RICE MILL Rs.1,29,54,301.40/- 25. 1897/2023 M/S GANGOTRI RICE MILL Rs.58,13,662.50/- 26. 1900/2023 ABINASH KUMAR SINGH Rs.9,91,29,305/- 27. 1901/2023 RAKESH KUMAR Rs.88,53,551/- 28. 1906/2023 MUNNA PRASAD Rs.85,58,508/- 29. 1907/2023 RAMESH BHUSHAN Rs.1,17,06,648/- 4. For convenience, Civil Appeal No. 1890 of 2023 Sone Valley Rice Mill v. The State of Bihar and others and Civil Appeal No. 1889 of 2023 Pawapuri Rice Mills v. Bihar State Food and Civil Supplies Corporation Limited and others are treated as lead cases, and the circumstances noted in these two appeals are adverted for disposing of the batch of appeals. A. SONE VALLEY RICE MILLS 5. On 22.12.2011, the Rice Miller and the Civil Supplies Corporation entered into an agreement for CMR for the procurement year 2011-12. On 13.02.2012, the Rice Miller called upon the Civil Supplies Corporation to do the needful for lifting the CMR to the allotted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerning CMR for the procurement year 2011-12. Subsequently, the Rice Miller sent formal letters to the District Manager to lift the CMR from the depot/warehouse to enable further milling. The State Civil Supplies Corporation, on 16.03.2013, sent a letter requiring the Rice Miller to deposit the remainder of paddy. Following this, on 07.05.2013, the Certificate Officer initiated certificate proceedings against the Rice Miller in Certificate Case No. 20/13-14 demanding Rupees ten crore fifteen lakh ninety-four thousand nine hundred and sixty-one, and ninety-four paise (Rs. 10,15,94,961.94/-). II. PROCEEDINGS IN THE HIGH COURT OF PATNA 8. On 22.07.2014, the Learned Single Judge in the Rice Millers Writ Petition No. 13746/2013 and batch, set aside the recovery proceedings initiated. However, liberty was given to the Civil Supplies Corporation to initiate legal proceedings in accordance with the agreement and recover the amount due from the Rice Miller. The instant judgement accepted the argument of Rice Millers (i) that initiation and continuation of the certificate proceedings under the Act against them is without jurisdiction and illegal; (ii) the demand is not a public demand with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany or statutory body in which the Government has a majority share; (vii) the paddy is supplied to the Rice Miller by the Civil Supplies Corporation after purchasing from the funds made available by the State as its nodal agency, (viii) the Civil Supplies Corporation may not be the State itself or a Department of the Government or an official of the Government, but the nature of the transaction would go to show that the State is acting through the Civil Supplies Corporation for procurement of paddy and distribution through PDS system; (ix) the absence of a clause in the agreement enabling recovery under the Act would not be the determining circumstance; (x) the definition of public demand in section 3(6) of the Act read with clause 8-A of Schedule I is satisfied for initiation of recovery proceedings by the Civil Supplies Corporation from the Rice Millers on account of default in delivery of CMR. Hence, the Civil Appeals at the instance of Rice Millers. III. SUBMISSIONS 10. We have heard learned Senior Counsel Shri Navneeti Prasad Singh and Shri Amit Sibal for the Rice Millers and Shri Manish Kumar, learned Advocate-on-Record for the Civil Supplies Corporation. 11. The Senior Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m to the procedure stipulated by the Act. 12. Shri Manish Kumar, Advocate-on-Record, appearing for the respondents, argues that the Civil Supplies Corporation is a Government Company under section 617 of the Companies Act, 1956. The Memorandum and the Articles of Association of the Civil Supplies Corporation provide that it can act as an agent of the State, and in the subject procurement of paddy, the Civil Supplies Corporation acted as the Government s agent. The State changed the procurement policy of paddy by keeping it in line with the policy of the FCI and appointed the Civil Supplies Corporation as a nodal agency. There is no dispute that the Civil Supplies Corporation is a nodal agent and has duties and functions for implementing the procurement policy 2011-12. Taking the circumstances as presented by the Rice Millers, it would emerge that the State has formulated a policy for procuring paddy, converting it as CMR, supplying CMR to FCI, and, finally, distributing through PDS to eligible people. The Civil Supplies Corporation pays farmers the MSP stipulated for the season and makes over the paddy to the Rice Millers for CMR. The Rice Millers are required to deliver rice as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule I to the Act. This determination is crucial, as the recovery mechanism under the Act is available only to the State, its departments, and officials for the enforcement of public demands. The crux of the dispute is the distinction between a statutory body acting in a governmental capacity i.e., as a nodal agent, and acting purely with a commercial intent of its own. The answer depends on the consideration of jurisdictional facts. 15. On 01.07.1914, the Act was gazetted, and one of the objects was to consolidate and amend the law relating to the recovery of public demands. On the existence of a jurisdictional fact for invoking the summary procedure, the contesting parties have relied on section 3(6) of the Act, and clauses 8-A and 15 of Schedule I to the Act. The provisions read thus: Section 3(6) Public Demand means any arrear or money mentioned or referred to in Schedule I and includes an interest which may by law be chargeable thereon up to the date on which a certificate is signed under Part II[.] Schedule I Clause 8-A Any outstanding loans and advances are payable to the state government or to a department or official of the state government by anybody whatsoever. Clause 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever. (bc). Any advances payable to an official of the state government by anybody whatsoever. 19. The occasion to examine the scope of clause 15 arises only after examination of the scope of section 3(6) and clause 8-A on the one hand and, on the other hand, applying the circumstances of the case to these provisions of law. In other words, if the circumstances of the case are covered by clause 8-A, then clause 15 and its application need not be examined. 20. As noted earlier, section 3(6) of the Act by itself does not decide who can be termed as a claimant/creditor before the certificate officer, i.e., the District Collector. The standing or locus before the certificate officer is determined by one or the other exigencies and descriptions of public demand enumerated in Schedule I to the Act. It is contextual to note that Schedule I defines public demand and does not limit the term to the original concept of recovery of land revenue, tax, and fee from the defaulters. A few claims otherwise recoverable through the normal process of law are included and defined as public demand under the Act. The words that have a bearing in clause 8-A are any loan, advance, state, department, or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within its sweep any arrear or any money which may come to be mentioned or even referred to in Sch. I and include also any interest which may be chargeable thereon. Yet again it deserves highlighting that S. 3(6) of the Act is not merely an inclusive definition but expressly says that the public demand means whatever may be specified in Sch. I. In the result even the broad sweep of public demand is further extended by the statute herein and, in my view, designedly so. In logical essence, this leads to the result that for the purposes of this Act a public demand includes all arrears of revenue or any money due or demand payable which finds place in Sch. I even by reference. It seems patent that the legislature has deliberately not attempted to define public demand or limiting the same. All the arrears of revenue, money or payable demands which the legislature chooses to incorporate in Sch. I become by virtue of the definition under S. 3(6) a public demand of which recovery can be made under the Act. The scheme of the definition under S. 3(6) of the Act and the frame of the articles of the schedule complementary thereto thus become a key to the interpretation of these provisions. 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FCI depots. The claim for recovery of the cost of undelivered CMR is claimed as an arrear owed to a State-recognised nodal agent. 27. A jurisdictional fact implies the existence of a fact that is necessary to the validity of the proceeding, and without the existence of such fact, the proceeding before the court, Tribunal, or Authority would be a nullity. In Arun Kumar v. Union of India, ( 2007 ) 1 SCC 732 at 758 it is held that a jurisdictional fact is a fact that must exist before a court, tribunal or authority that assumes jurisdiction over a particular matter. It is the fact upon which an administrative agency s power through an act is dependent. The ratio in Ramesh Chandra Sankala v. Vikram Cement ( 2008 ) 14 SCC 58 at 81 is to the same effect. 28. The Learned Single Judge has considered the memorandum or the agreement between the parties and the existence of a few clauses enabling recovery of outstanding dues through the regular civil court as the determining factors on jurisdictional issues. It is held that the absence of a clause in the agreement authorising recovery through a proceeding under the Act denudes the certificate officer s jurisdiction. The Division Bench, throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration as a nodal agency by the State Government. 31. In the subject procurement year, the State Government aimed to procure thirty lakh metric tons of paddy from the farmers. The State Food Corporation and Civil Supplies Corporation have been assigned a few rights and duties to perform in this massive function as per the scheme. It is difficult to assume that the Civil Supplies Corporation, with its wherewithal of both manpower and financial ability, would have acted as an independent entity. The paddy is purchased either from the amount given by the state government or paddy received from primary agricultural societies. The control of the State Government and District Administration is evident, both from the circumstances noted in the impugned judgement, a letter dated 11.11.2011 of the Government of India, a letter dated 09.01.2012 of State Food and Civil Supplies Corporation, and a letter dated 11.01.2012 of the food and consumer department. Consequently, all the jurisdictional facts to accept the role of Civil Supplies Corporation as the nodal agent of the state government have been satisfactorily established in this case. The agreement between the parties explicitly recogni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available and legal. We are in complete agreement with the view expressed in the Judgement impugned in the Civil Appeals. 36. The impugned judgement correctly determined that the recovery proceedings initiated by the Civil Supplies Corporation were valid and justified. The court has appreciated the facts of the case and applied the law correctly. The nature of the transaction between the State Government and the Rice Millers, involving the procurement, milling, and distribution of public grain, clearly falls within the ambit of public demand as defined in the Act. The certificate officer s jurisdiction to initiate recovery proceedings is thus established. 37. The next limb of the argument is that the continuation and the concluding of proceedings by the certificate officers are vitiated by procedural irregularities. The arguments on this behalf are already referred to in the preceding paragraphs. To capture the arguments in a nutshell, it is noted that the initiation is not in accordance with the procedure stipulated under the Act, the procedure prescribed by the Act is not followed, and the principles of natural justice are violated. 38. The Act is a comprehensive and codified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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