KERALA RICE MILLERS ASSOCIATION Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioner is an association of Mill owners who have executed agreements with the Civil Supplies Corporation (the 2nd respondent) for processing of paddy procured by the 2nd respondent and delivering rice out of the same, in tune with the agreements executed by them. Their grievance is over the denial of processing and other charges by the 2 nd respondent before and after the flood of August 2018.

(2.) The 2nd respondent is the agency of the Govt. of Kerala for implementation of Decentralized Paddy Procurement, processing and marketing scheme of the Govt. of India. The members of petitioner association, who are owners of rice mills have entered into separate agreements like Ext.P2 for the year 2017-18 and Ext.P4 agreement for the year 2018- 19 for receiving, transporting, storing, processing and milling of paddy and delivery of rice for the 2 nd respondent. The 2nd respondent has authorised these millers to receive paddy from the farmers as per the allotment made by it; they have to store, parboil and mill the same, then process the rice by cleaning, dehusking, polishing and pack the same in large sacks in accordance with the grading given by the quality controller under the 2nd respondent after assuring its quality and bags of such Custom Milled Rice (CMR) are thereafter delivered to the public distribution system in the State based on release Orders issued by the 2nd respondent, as part of Paddy Procurement, Processing and Distribution Scheme implemented by it. The unprecedented and devastating flood which occurred in August, 2018 caused very serious damage to the paddy as well as rice which were stocked in the mills of the members of petitioner association. According to the petitioner, the entire stock with them, of paddy as well as CMR, is insured by the 2nd respondent on payment of premium by the Millers in accordance with the terms of agreement. The loss caused by the millers in natural calamities like flood is to be compensated by the 2 nd respondent, who keeps the insurance policy with them and receives the compensation from the insurance company. But even after the 2nd respondent received the insurance claim, it did not take any steps to compensate the millers despite their repeated representations for the same explaining their plight consequent to the flood and pointing out that they are not able to operate their mills due to non- payment of even the amount due to them towards the stock before the flood. It is stated that they had approached the 2nd respondent as well as the Government requesting for immediate release of payment. The petitioner states that the 2 nd respondent has received compensation from the insurance company and they are denying payment even when they are very well aware of the huge loss caused to the stock of paddy and rice in their mills inundated in the flood. According to them it is arbitrary and unjust on the part of the 2nd respondent to deny any payment to them, even after the receipt of the insurance claim, at least towards the processing and other charges for the stock which was available before the flood. It is stated that payment is due to each of its members towards processing charges for CMR lifted before the August, 2018 flood at the rate of Rs.214 per quintal of paddy. Similarly they are entitled to processing charges for the flood affected CMR/raw paddy at the rate of Rs.193/- per quintal of paddy which comes to a total of Rs.15,34,74,579/-, as they have explained in the table in paragraph 15 of the writ petition. It is also their case that the 2 nd respondent did not take any steps to lift the stock despite their repeated requests and it was only on such requests that they finally invited tenders for the salvaged paddy and CMR and the damaged paddy and rice were lifted as per the release orders for the successful bidders. The Corporation has received the payment for the damaged stock also based on the tenders issued. Petitioners claim payment on the basis of the provisions contained in clause 5 of Ext.P2 agreement under which the 2nd respondent has insured the stock from natural perils like flood from out of the premium paid by them. They also rely on clause 42/44 of the agreement Ext.P2/P4 for the processing charges.

(3.) Clause 4 to 6, 41 and 42 of the agreement, which are relevant, read as follows :