Pedantic Interpretation Of Policy To Deny Paddy Allotment To Millers Violative Of Fundamental Right To Trade: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that not allocating paddy to a miller for no fault of his is a violation of the fundamental right of business and trade guaranteed by Article 19 (1)(g) and a violation of Articles 14 and 21 of the Constitution.

Justice Jagmohan Bansal added that a policy cannot be read as per whims and caprices of officials who "seem more interested in the closure of a business rather than its running".

"A running unit is always source of livelihood of many families. There is huge investment in a rice mill and its closure is not only going to deprive couple of families from livelihood but also waste precious, valuable resources of the country...This Court has been assigned role of guard qua protection of fundamental rights guaranteed by Part III of the Constitution of India, thus, it is imperative to undertake whole gamut in the perspective of fundamental rights. The object of the policy is to regulate the business of milling and protect interest of the stakeholders."

The bench was hearing the plea moved by companies running mill businesses, seeking directions to allow them to apply for the allocation of paddy by correcting information on a government portal. Additionally, they requested registration as an existing mill.

Every year, the State prepares a policy called the Custom Milling Policy, regarding paddy allotment to mills in Punjab. The petitioner received paddy in 2021-22 but faced a dispute with Food Corporation of India over rice quality, leading to the replacement of their entire stock. Due to the non-availability of paddy, they could not process it during that season. They applied for allocation in 2023-24 as an existing unit but were denied, and their representation was rejected.

The petitioner argued that although there was a dispute in the previous season, it was resolved, and they were entitled to paddy allocation however, paddy could not be allocated on account of non-availability. In 2023-24, the government portal rejected their application, stating they were a non-existing unit.

The State contended that according to Clause 3 of the Custom Milling Policy, a unit is ineligible for existing unit registration if it didn't receive paddy or didn't mill during 2022-23. Since the petitioner did not mill due to the non-supply of paddy, they could not be considered an existing unit.

The Court however noted,"...petitioner was allotted paddy during KMS 2022-23, however, he could not undertake milling because of non-availability of paddy. The petitioner could not undertake milling on account of the non-supply of paddy by the respondent. There was no fault on the part of the petitioner. He did not deny to undertake milling."

The Court then cited the principle that one cannot be asked to comply with a condition beyond their control and referenced a Supreme Court case.

"No one can be asked to comply with a condition which is beyond his control. A person can be asked to comply with a condition which is humanly possible. The petitioner did not deny to mill paddy whereas, despite allotment, the petitioner was not supplied paddy on account of non-availability."

Furthermore, Justice Bansal said that it is a case of survival of a unit which is the source of livelihood for many families. The petitioner not get paddy during 2022-23 means he got no business during the said period and respondents want to deny paddy during 2023-24 because no business was extended to the petitioner during 2022-23, added the Court.

Thus, It was concluded that the petitioner's interpretation of the clause was harsh and impractical.

Consequently, the Court granted the relief and decided that, "petitioner is entitled to allotment of paddy during KMS 2023-24 as an existing unit."

The Court thus directed the State to consider the case of the petitioner subject to compliance with other conditions of Custom Milling Policy 2023-24.

Appearance: Sanjeev Sharma, Senior Advocate with Advocates Daman Dhir, Vikram Vir Sharda, Raman Dhir for the petitioner; Rohit Ahuja, DAG, Punjab.

Citation: 2023 LiveLaw (PH) 184

Case Title: M/s Luxi Saraswati Agro Pvt Ltd v. State of Punjab

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