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of <h1>Civil Supplies Corporation can recover unaccounted rice deposits from millers as valid public demand under section 3(6)</h1> <h3>PAWAPURI RICE MILLS Versus THE BIHAR STATE FOOD AND CIVIL SUPPLIES CORPORATION LTD. & ORS</h3> PAWAPURI RICE MILLS Versus THE BIHAR STATE FOOD AND CIVIL SUPPLIES CORPORATION LTD. & ORS - 2024 INSC 999 Issues Involved:1. Whether the recovery by the Civil Supplies Corporation qualifies as a 'public demand' under the Bihar and Orissa Public Demands Recovery Act, 1914.2. Whether the Civil Supplies Corporation can initiate recovery proceedings under the Act against the Rice Millers as the nodal agency of the State Government.3. Whether the procedural safeguards under the Act and principles of natural justice have been adhered to during certificate proceedings.4. Whether the Rice Millers can avail alternate statutory remedies to challenge the recovery certificate.Issue-Wise Detailed Analysis:1. Public Demand Qualification:The core issue was whether the recovery by the Civil Supplies Corporation qualifies as a 'public demand' under the Act. The definition of 'public demand' under section 3(6) of the Act is broad and inclusive, encompassing any arrears mentioned in Schedule I, including loans or advances payable to the State Government, its departments, or officials. The judgment emphasized that the term 'public demand' is of wide amplitude and is designed to include all arrears or dues explicitly mentioned in Schedule I. The court noted that the Civil Supplies Corporation, acting as a nodal agency, provided paddy to Rice Millers for custom milling and subsequent delivery to FCI depots. The claim for recovery of the cost of undelivered CMR aligns with this definition, thus qualifying as a 'public demand' recoverable under the Act.2. Recovery Proceedings by Civil Supplies Corporation:The judgment addressed whether the Civil Supplies Corporation, as a nodal agency of the State Government, could initiate recovery proceedings under the Act against the Rice Millers. The court held that the Civil Supplies Corporation, recognized as the nodal agency, was acting on behalf of the State to ensure the smooth functioning of the Public Distribution System (PDS). The court found that all jurisdictional facts to accept the role of the Civil Supplies Corporation as the nodal agent of the State Government were satisfactorily established. The nature of the transaction, involving the procurement of public grain and its distribution, clearly fell within the definition of 'public demand.'3. Procedural Safeguards and Natural Justice:The Rice Millers argued that the initiation and conclusion of proceedings by the certificate officers were vitiated by procedural irregularities and violations of natural justice. The court noted that the Act provides adequate safeguards for parties facing recovery actions, including procedures for filing, serving, and contesting recovery certificates, as well as provisions for appeal, revision, and review. The Division Bench rightly emphasized the availability of these statutory remedies to the aggrieved persons. The court found no procedural infirmity in the respective certificates issued in favor of the Civil Supplies Corporation.4. Alternate Statutory Remedies:The judgment also considered whether the Rice Millers could avail alternate statutory remedies to challenge the recovery certificate. The court observed that the Rice Millers, by invoking writ jurisdiction, failed to exhaust statutory remedies at the first instance. The court granted the Rice Millers thirty days to avail a statutory remedy as may be available under the Act, without reference to the delay and the period of limitation in availing a remedy before the said authority.Conclusion:The Supreme Court upheld the finding in the impugned judgment that the recovery proceedings initiated by the Civil Supplies Corporation were valid and justified. The nature of the transaction between the State Government and the Rice Millers, involving the procurement, milling, and distribution of public grain, clearly fell within the ambit of 'public demand' as defined in the Act. The certificate officer's jurisdiction to initiate recovery proceedings was thus established. The civil appeals were dismissed, with no order as to costs.
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