M/S. Akhil Mohapatra, R.C

2015 (I) ILR - CUT- 1 AMITAVA ROY, CJ & DR. B.R. SARANGI, J. W.A. NOs. 181, 182 OF 2012 FOOD CORPORATION OF INDIA, REGIONAL OFFICE, BBSR & ANR. …….Appellants .Vrs. M/S. BINAYAK FOOD PRODUCTS ……..Respondent SALE OF GOODS ACT,1930 – Ss. 19, 23 (2) Contract – Effect of – Stock lifted subsequent to revision of price – Purchaser required to pay the differential amount prevailing on the date of physical delivery of goods. In this case stipulations in the contract as well as delivery orders show that prices prevailing on the date of physical delivery would be payable, the deeming provision contained U/s.23 (2) of the Act cannot help the respondents-writ petitioners – Only because the corporation being unaware of the revised price had permitted the respondents to take delivery of their goods at the old price cannot act as estoppel against it or amount to waiver of its claim for the differential amount other wise payable – Held, the impugned demand of the appellant-corporation for differential price qua the respondents-writ petitioners cannot be repudiated to be in repugnance of Sections 19 and 23 of the Act – The impugned judgment passed by the learned single Judge is set aside. (Paras 16, 18) For Appellants - M/s. Srikanta Ku. Nayak, A.C. Baral, D. Nayak, S.K. Nayak, S.K. Sahoo. For Respondent - M/s. Akhil Mohapatra, R.C. Sahoo, S.C. Nayak. Date of hearing : 17.09.2014 Date of Judgment : 30.09.2014 JUDGMENT AMITAVA ROY, C.J. These appeals witness a challenge to the judgment and order dated 03.03.2012 rendered, amongst others, in O.J.C. Nos. 4808 &4809 of 1997 respectively thereby sustaining the oppugnment of the demand for payment of differential amount for the price of wheat lifted by the respondents/writ 2 INDIAN LAW REPORTS, CUTTACK SERIES [2015] petitioners from the depot of Food Corporation of India (for short, hereinafter referred to as “the FCI/Corporation”) in terms of the release order issued by its District Office at Cuttack. 2. We have heard Mr. Srikanta Ku. Nayak, learned counsel for the appellant-Corporation and Mr. Akhil Mohapatra, learned counsel for respondents/writ petitioners. 3. The backdrop of facts in both these appeals is identical and thus the pleaded narrative would be permissibly common. 4. The respondents/writ petitioners are Roller Flour Mills, carrying on business, inter alia, of milling wheat and converting the same to different wheat products like Suji, Maida, Atta and Bran etc. They have obtained milling licence under the Wheat Roller Flour Mills (Licensing & Control) Order, 1957 (for short, hereinafter referred to as “the Order”) framed in exercise of power under Section 3 of the Essential Commodities Act, 1955. As per the pleaded averments in the writ petitions, in terms of Clause 10 of the Order in force at the relevant time, the licensing authority or the specified authority, as the case may be, was authorized to issue directions to the licensee with regard, inter alia, to the source from which and the manner in which wheat should be obtained for the purpose of manufacture of wheat products and disposal thereof. Sub-clause (2) of Clause 10 made it imperative on the licensee to carry out the aforesaid direction of the licensing authority/specified authority. Clause 5 of the licence also made it essential for the licensee to abide by the directions of the licensing authority while purchasing wheat and preparing Suji, Maida, Rawa etc. and also with regard to distribution and disposal of the wheat products. In terms of the above empowerment, the licensing authority/specified authority did direct all the Roller Flour Millers of the State that they would have to purchase wheat only from the Government through the agency of the Corporation and not from open market for the purpose of manufacture of wheat products in their mills. The Government of Orissa having decided to distribute the wheat by open sale, did invite applications in the month of January, 1997 indicating, inter alia, that maximum 500 MT wheat can be allotted to per flour Miller. The said notice further disclosed that the applications were to be submitted to the Corporation by 13.01.1997 with 10% EMD for the quantity intended and that the allotment would be finalized by 18.01.1997 after which the prospective buyers could have to deposit the cost of the allotted quantity 3 F.C.I. -V- M/S. BINAYAK FOOD PRODUCTS [ AMITAVA ROY, C.J. ] after adjusting the EMD on or before 31.01.1997. The price for open sale of wheat was fixed as follows: Balasore / Berhampur/ Sambalpur/ Rourkela Cuttack Bhubaneswar Titilargarh/ Jeypore Rs.5493 Rs.5499 per Rs. 5416 Rs. 5406 per MT. MT per MT per MT 5. In terms of the said notice, taxes were payable extra in addition and it was stipulated that the prices applicable on the date of issue/lifting/delivery would be collected and the deadline of the issue and lifting of allotted quantities of food grains was prescribed to be 10.02.1997. As the applications were to be submitted before the District Manager, FCI, District Office, Cuttack the respondents/writ petitioners applied on 13.01.1997 along with DCR for Rs. 2.9 lakhs drawn in favour of F.C.I. payable at State Bank of India, Cuttack and requested for allotment of 500 MT of wheat for the month of January, 1997 to be lifted from Cuttack depot of the Corporation. Thereafter the Senior Regional Manager, FCI, Regional Office, Bhubaneswar intimated the District Manager, FCI, District Office, Cuttack about the allotment of the above quoted wheat in favour of respondents/ writ petitioners. Subsequent thereto, the release orders in favour of the respondents/writ petitioners were issued on 27.1.1997 by this authority to lift 310/210 MT respectively to both the respondents/writ petitioners, which they did on different dates. The respondent/writ petitioner in OJC 4808 of 1997 specifically pleaded that the last date on which it had lifted the wheat was 5.2.1997. The respondents/writ petitioners have averred that thereafter they processed it for conversion to wheat products and had sold the same to the costumers at the rates mentioned in the letter dated 18.01.1997. It was thereafter that the appellant/Corporation by its letter dated 4.3.1997 demanded of respondents/writ petitioners an amount of Rs. 1,25,747.41 / Rs.3,95,132.84 as the differential price in view of the enhancement of the wheat price to Rs.740/- per quintal. Contending that they had lifted the allotted quantity of wheat by paying the price fixed therefor in response to the release orders dated 31.01.1997, whereby the contract between the parties stood concluded, the respondents/ writ petitioners having 4 INDIAN LAW REPORTS, CUTTACK SERIES [2015] unsuccessfully pleaded with the Corporation sought this Court’s intervention by instituting the above writ petitions to annul the demand. 6. The appellant/Corporation in its counter, while questioning the maintainability of the writ petitions on the ground of non impleadment of Ministry of Food, Government of India, New Delhi, asserted that the demand was in terms of the agreed clauses in the circular/notice inviting applications for allotment as well as the communication dated 18.01.1997 fixing the price of wheat. They pleaded that prior to 4.2.1997, the price of wheat per MT was fixed by the Central Government at Rs. 5493/- for Cuttack and the same was revised with effect from that date i.e. 4.2.1997 by a Press Note dated 4.2.1997 issued by the Government of India. According to them, the factum of the revision of this rate was conveyed by the headquarters of the Corporation to all its zonal and regional offices so much so that it was received by the office of the District Manager, FCI, Cuttack on 6.2.1997. The Corporation further averred that the information with regard to revision of price was intimated to the food storage depot and Civil Supply Officers for their information. According to the Corporation, this was well known to the respondents/writ petitioners and further in view of the condition that the price as applicable on the date of issue/lifting/delivery of the stock to the dealers would be payable, their (respondents/writ petitioners’) plea to the contrary was untenable. 7. Reference, in particular, to Clause-8 of the letter dated 18.01.1997 was made and the Corporation pleaded that vis-à-vis the stock lifted on or after 4.2.1997 i.e. subsequent to the revision of price, the millers were required to pay the differential amount. It was also mentioned that on revision, the price of wheat per MT was enhanced to Rs. 7,400/-. In endorsement to the claim, the Corporation not only insisted that the respondents/writ petitioners being parties to similar transactions from much before were well aware of such covenant, it also referred to a clause in the release order to the effect that price prevailing on the physical delivery would be payable in respect of the stock delivered irrespective of the date on which the order was issued or received by the parties. That by the notice dated 4.3.1997, the differential price of wheat at the enhanced rate was demanded of the respondents/writ petitioners vis-à-vis the quantity lifted after the revision was effected was underlined. 8. The learned Single Judge, by the impugned judgment and order, however, upheld the assailment on the ground that the entire amount having 5 F.C.I.

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