Tapan
Kumar Sadhukhan Vs. Food Corporation of India & Ors [1996] INSC 974 (20 August 1996)
N.P.
Singh, S.C. Sen Ahmadi, Cji.
ACT:
HEAD NOTE:
THE
20TH DAY OF AUGUST 1995 Present:
Hon'ble
the Chief Justice Hon'ble Mr. Justice N.P. Singh Hon'ble Mr.Justice S.C. Sen
G.L. Sanghi, Sr. Adv. Ranjit Kumar, Ms. Sarla Chandra, Y.P. Rao, J. Gupta, R. Mukherjee,
Ms. S. Mukherjee and Goodwill Indeevar, Advs. with him for the appearing
parties.
The
following Judgment of the Court was delivered:
Leave
granted.
The
present civil appeal arises out of an order of the Division Bench of the High
Court of Calcutta dated 13.10.1993 vacating an interim order of injunction
passed by a Single Judge of the same Court. The sequence of events upto the
filing of this special leave petition may be narrated as under :
The
Food and Supply Department of the Government of India issued instructions to
the Senior Regional Manager, Food Corporation of India, west Bengal region, the
respondent No.2 herein, on 28.4.1986 regarding disposal of sub-standard
par-boiled rice unacceptable to the Government of West Bengal through
auction/tender, The Food & Supplies Department of the Government of West
Bengal laid down certain conditions for disposal of such stocks of rice by the
Food Corporation of India. The important conditions relevant for the present
master are as under :
"(1)
All the stocks proposed to be auctioned should at first be jointly inspected by
the Quality Control Staff of this department and the Food Corporation of India.
Clear
markings should be made on the stocks unfit for human consumption to prevent
any mixture of these stocks with the stocks fit for human consumption.
(2)
Sub-standard stocks should be sold to established cattle/poultry feed
manufacturers only.
(3)
Stocks for human consumption should be sold to licensed rice dealers
only." By a subsequent communication, the Department of Food & Civil
Supplies substituted the word "sub-standard" appearing in para 2 of
the aforesaid communication by the word "damaged". On 2.8.1993, the
Food Corporation of India issued a tender notice inviting
tenders from the registered/licensed rice dealers for sale of 11,683 M.T. of
sub-standard rice. The relevant clauses of the tender notice dated 2.8.1993 are
as under:
"The
above stock of rice is presently not fit for human consumption, so it will be
subject to up gradation by the purchasers before issue for human consumption.
Out of
the above quantity some stock in which the percentage of damaged grains are
presently beyond PFA limits, which will have to be brought within the said
limit by the purchasers as they are not fit for human consumption so long they
remain beyond PFA limits. Tenderers shall have to give an undertaking to the
effect that no stock will be issued for human consumption without upgradation
and without bringing them in the PFA limits.
Stocks
lying in S.R. Areas will have to be moved out of S.R. Areas by the purchasers
after obtaining movement permit from Food & Supplies Department, West Bengal.
Tender
documents containing details of terms and conditions for sale of sub-standard
rice can be had from Commercial Division of F.C.I., 6, Royd Street, Calcutta-16, on payment of Rs.100/- in cash from 6.8.93 to 17.8.93
between 11-00 AM to 2-00 PM." Two licensed rice dealers who are
respondents No.6 & 7 in the present civil appeal filed writ petitions
before the High Court challenging the tender notice as being violative of the
West Bengal Rice and Paddy (Licencing & Control) Order, 1967 as amended
from time to time and also being violative of the Government circular issued in
that regard.
The
learned Single Judge of the Calcutta High Court made an interim order dated 3rd
September, 1993 directing the Quality Control Committee of the Food Corporation
of India to submit a report as to whether the rice which was the subject matter
of the tender notice dated 2nd August, 1993 was capable of being upgraded for
human consumption. Before submitting the report, the Quality Control Committee
was also to invite the food technologists from the Central Government for their
views. This interim order was challenged in appeal which was heard and disposed
of by a Division Bench by an order dated 13.10.1993 which is the impugned order
in this case. The injunction issued by the Single Judge was vacated and
detailed instructions to deal with the stock of rice were issued. The relevant
portion of the order is as under :
"Accordingly
considering the facts and circumstances of the case, the balance of convenience
and all other relevant factors, we are of the view that interim order of
injunction should be vacated on this condition that the tender should be finalised
and the goods may be delivered to the successful tenderers on condition that
the same is brought within the required standard as laid down in the Prevention
of Food Adulteration Act and that after the upgradation is made, the same
should be checked and examined by the Directorate of Inspection, Quality
Control, Govt. of West Bengal and only after the said authority gives a
certificate and clearance that the some was fit for human consumption and not
damaged and or unfit for human consumption. For this purpose the lifted stock
should be stored at the place which should be immediately notified to the
Directorate of Inspection and quality control Department of Food and Supplies, Govt,
of India, 11, Mirza Galib St., Calcutta-7 and without the permission and
obtaining a clearance certificate from the authority who would examine the
stock upon upgradation that it is fit for human consumption. The successful tenderers
shall also file written undertaking before the trial Judge to the extent that
they will keep the stock after lifting on a particular godown to be notified to
that quality control directorate within 94 hours from the storage and shall not
remove from that place without standardisation and without obtaining a
certificate and clearance on examination of the goods certifying that the same
is fit for human consumption. Further no part of the said stock of rice should
be released in public distribution system without having such certificates from
the competent authority," The appellant, Tapan Kumar Sadhukhan, claims to
be interested in the subject matter of the case as proprietor of one M/s Ma
'Kali Trading Company dealing in manufacture and supply of cattle food, poultry
food, manure etc., as a registered contractor of the Respondent No.1. His plea
is that rice which was unfit for human consumption was sought to be sold as
sub-standard/damaged rice, subject to up gradation by the purchasers.
The
appellant further claims that the Quality Control Manual issued by the
respondent No.1 in 1992 relating to the Central Legislation regarding food grain
handling makes no provision for sale of substandard/damaged rice for human
consumption and does not. prescribe that such sub- standard/damaged rice can be
upgraded for making it fit for human consumption. The appellant expresses
concern that while selling sub-standard rice in question. the respondent No. 1
was not taking any responsibility about the manner in which the seller would
sell the same after having purchased the sub-standard rice and it depended
entirely on the undertaking to be submitted by the purchaser for up gradation
of the products to the standard quality before selling the same for human
consumption.
The
appellant further says that even according to the manual of the respondent No.1
the stock being sub- standard/damaged could be sold only to cattle/poultry feed
manufacturers or used as manure. The appellant claims locus standi to file the
special leave petition as being a cattle/poultry feed manufacturer interested
in buying the stock in question.
On
5.11.1993, this Court stayed the implementation of the impugned order pending
notice to the respondents.
In
response, the respondent No.1 submitted that the appellant had no locus standi
whatsoever to file the petition as he was not a party before the Calcutta High
Court. The respondent No.1 further submitted that "sub- standard"
rice is far better than "damaged" rice and that the petitioner is
trying to buy such sub-standard rice at the price of damaged rice and thereby
attempting to make profit at the cost of the exchequer. The respondent No.1
denies that the rice is not capable of being upgraded for human consumption and
submits that since the Corporation did not have the necessary infrastructure
for the upgradation process, it had to sell the stock to the purchasers who
could upgrade the rice. The respondent No.1 says that rice is categorised as
category 'A' - (good quality), category 'B' (very fair quality) category 'C'
(fair quality) and category 'D' (average quality), and that rice of category
C&D require to be upgraded or improved before being sold for human
consumption and that if the rice contains less than 15% damaged grains and
foreign matter, it is said to be sub- standard and if the lot contains more
than 15% damaged grain and foreign matter apart from defective appearance,
smell, colour and contamination, etc., same is categorised as damaged rice
which is fit only for cattle/poultry feed manufacture. The respondent No.1
claims that the tender notice was within the authority granted by the
Government of India and within the provisions of the Food Adulteration Act. The
respondent No.1 had accordingly taken a specific undertaking from the tenderers
that they would sell the stock only after upgradation to make the rice fit for
human consumption. The respondent No.1 submits that the impugned order is
correct since it prevents the chances of the rice being sold for human
consumption without upgradation while ensuring that the stock of rice does not
further deteriorate in the godowns of the respondent No.1.
Keeping
in view the conflicting claims of the parties and the risk to the health of the
citizens, we made an order on 28.2.1994 directing The respondent, No.1
"(1)
to state the process of upgradation;
(2) what
measures can be taken to ensure that before the rice enters the market it is
upgraded and
(3) what
objection, if any, it has to the learned Single Judge's direction for a report
to be submitted by a Quality Control Committee of the FCI itself."
The
respondent No.1 in its additional affidavit stated that the rice could be
upgraded by a process of sieving, cleaning, winnowing, polishing, remilling
processing, reconditioning, etc. To ensure that the stocks of rice enter the
market only after upgradation, the respondent No.1 has taken the following measures
:
(1)
Stocks are sold to licensed dealers after being specifically informed that the
rice is unfit for human consumption and the sale of stocks to the dealers is
intimated to the State Government;
(2)
Stocks are sold on a specific stipulation that such stocks can be sold to the
public only after the same are upgraded and made fit for human consumption;
(3) on
the basis of information given to the State Government, the statutory
authorities will ensure that the stocks are not sold to public without making
the same fit for human consumption and bringing the same within PFA limits.
As for
the last direction, the respondent No.1 stated that the compliance of the directions
of the learned Single Judge of the Calcutta High Court would result in loss of
time during which the stock of rice would further deteriorate and that. it was
in the interest of the Corporation as well as the public that the stocks were
immediately sold to the tenderers. The respondent No.1 also constituted
Committee comprising of senior Officers from the quality control wing, who
first checked 427 101 of lower category sub-Standard rice representing about
11683 MT held in 24 FCI depots in the State of West Bengal which were the
subject matter of the tender dated 2.8.1993 on random check basis and also scrutinised
the results/findings of the analysis done by the earlier categorisation
Committees at different levels. The Committee found that the stocks which are
the subject matter of the present case are capable of being upgraded by tenderers
by employing various processes of upgrading, viz., sieving, cleaning,
winnowing, polishing, remilling reprocessing and reconditioning to make the
rice fit for human consumption. The report of the Committee was also filed.
Appended to the report were statements showing stockwise analysis results in
respect of different stocks, all of which contain a remark to the following effect
:
"All
stocks/stacks of LC/Sub- standard rice have developed an unpleasant smell and
have become dull in appearance in prolonged storage." The respondent No.1
did not have the infrastructure for upgradation and so the dealers would have
to be entrusted with the responsibility of upgrading the stock. The counsel for
the appellant, however, insisted that the rice was not fit for human
consumption and that the report of the Quality Control Committee of the
respondent No.1 could not be taken as an independent report. On 2.5.1994, we,
on the basis of the above, made the following order :
"Taking
into consideration the above submissions we appoint a two- member Committee
comprising one expert to be nominated by each of the Director of Indian
Agriculture Research Institute and Indian Council of Agricultural Research who
will submit a report to this Court within a fortnight from today. The Registrar
of the Court will send an intimation at once.
The
officers of the Food Corporation of India will extend all necessary assistance to the said two members for
enabling them to complete their task. The expenses for the same will be
reimbursed by the Food Corporation of India. We direct the Food Corporation of India to deposit a sum of Rs. 20,000/- in this Court in the first instance.
The Directorate may initially bear the cost and communicate the same to the
Food Corporation of India under advice to this Court. As soon
as the communication is received the Food Corporation of India will fully reimburse the cost and
charges incurred by the said two experts. Let the matter come up after the
report is received." The Committee consisted of Dr. S.L. Mehta, Head of
the Division of Biochemistry, IARI and Dr. R.P. Kachra, formerly Head Post
Harvest Engineering Division at Central Institute of Agricultural Engineering, Bhopal and presently Assistant Director
General (Process Engineering), ICAR, New Delhi.
They
collected the samples from the FCI Godowns at Cossipore, Midnapore and
Shalimar. The samples were sent to Delhi for analysis. The Committee observed as under :
"All
the rice samples had developed off flavour and also discolouration. This varied
from stack to stack and from godown to godown. The stocks at Midnapore were
better stored than samples at Cossipore and Shalimar. The samples were infested
in a large number of cases specially at Cossipore and Shalimar. At shalimar
many of the stocks had developed deep yellow colour. In the present form, the
samples were certainly not suitable for human consumption and did not conform
to standards. The major question before the committee was whether the stocks
could be upgraded to make them fit for human consumption. For this reason, the
samples were taken to IARI, New Delhi for
cleaning, milling and cookability etc.
The
Committee on scrutiny of the records furnished by FCI observed that the stocks
at Cossipore, Midnapore and Shalimar represented less than half of the total
stock under dispute. Since the rice was stored in different godowns throughout
the State, it was not feasible for the Committee to go to different places in
the short time at its disposal. The Committee therefore, directed Mr. M.K. Mitra,
DM (QC), Zonal Office, Calcutta and Mr. S.K. Dutta, DM (QC),
Regional Office, Calcutta to go to different places indicated
by the Committee, where large stocks are held and to draw samples personally
and send these to IARI for analysis. 32 samples were drawn by them from rice
stocks held in different places as per the list attached.
These
also included additional samples drawn from Cossipore and Shalimar because
earlier quality control team of FCI had not tested the samples from many of
these stocks which in the opinion of the Committee, represented larger
stock." The Committee proceeded to give specific recommendations stock
wise as to which stocks were suitable and could be upgraded for human
consumption and which were not suitable and could not be upgraded. The
Committee concluded thus:
"The
total stocks tested by the Committee represents little over 50% of the total
stocks. The Committee felt that wherever all the samples are suitable for upgradation,
the remaining stocks may also be taken up for upgradation, Where as in other
depots, the quality control team of FCI may be requested to test each stock
after cleaning, milling etc. and then give suitable recommendations as has been
done by this Committee. The stocks which have been marked as NS (not suitable
for upgradation) cannot be made fit for human consumption, because we have
tested it even by milling. After milling, there is no off flavour in the
samples, but discolouration which is light deep yellow cannot be removed."
The report shows that all the samples from FSD Midnapore were suitable for
human consumption but most of the samples from the other depots, viz., FSD Cossipore,
FSD Sitarampur, ARDC Gopalpur, FSD Shalimar and CWC Shyamnagar South Jute Mill
were not suitable for human consumption.
Needless
to say, the stocks found unsuitable for human consumption cannot be sold to any
rice dealer and have to be disposed of for purposes other than human
consumption in the manner prescribed by the Government. The stock that is found
suitable again cannot be immediately used for human consumption for, as the
expert report says, that can be so used only after being upgraded.
The
next question is whether the upgradation can be left to the volition of the
dealers or whether they should be bound by some further conditions in the
matter. It is to be remembered that Article 47 of the Constitution directs the
State to raise the level of nutrition and the standard of living and to improve
public health.
The
first respondent, FCI, is an agency of State. It was established under the Food
Corporation Act 1964. The function of the corporation are mentioned in Section
13 of the Act as Under:
13.
Functions of Corporation.----
(1)
Subject to the provisions of this Act, it shall be the primary duty of the
Corporation to undertake the purchase, storage, movement, transport
distribution and sale of foodgrains and other foodstuff.
(2)
Subject as aforesaid, the Corporation may also, with the previous approval of
Central Government,-
(a)
Promote by such means as it thinks fit the production of foodgrains and other
foodstuffs;
(b) set
up, or assist in the setting up of rice mills, flour mills and other
undertakings for the processing of foodgrains and other foodstuffs; and
(c) discharge
such other functions as may be prescribed or as are supplemental, incidental or
consequential to any of the functions conferred on it under this Act."
Thus
the processing of food grains and other foodstuffs is also one of the functions
which the respondent No.1 may perform with the prior approval of the Central
Government.
For
such processing of food grains and other foodstuffs, the respondent No.1 can
also set up or assist in setting up of rice mills, flour mills and other
undertakings.
In the
Statement of Objects and Reasons, the Government. while introducing the Bill,
inter alia stated :
"1.
It is considered desirable, in the interests of increased agricultural
production as well as in the interested of the common consumer, to set up a
State agency for the purpose of undertaking trading in food grains in a
commercial manner but within the framework of an over-all Government policy ...
... ...
2. ...
... ...
3. The
Corporation will engage itself primarily in the purchaser storage, movement,
distribution and sale of food grains. Provision has also been made in the Bill
enabling the Corporation to deal in other foodstuffs if considered necessary by
the Government. The Corporation may also discharge certain incidental functions
as provided for in the Bill in consultation with the Central Government.
4. The
Corporation will be encouraged to function generally as an autonomous organisation
working on commercial lines. It is expected to secure for itself a strategic
and commanding position in the food grains trade of the country.
Bearing
in mind the several large spheres in which the Corporation will ultimately have
to operate, this Bill is being introduced to enable it to function as a
statutory Corporation wholly owned by the Government." The Food
Corporation of India, i.e., respondent No.1, is to
secure a commanding position in the food grains trade of the country. Being an
important factor in the market of food grains and being an agency of the State,
it must conform to the letter and spirit of Article 47 of the Constitution.
Such
being the position of the respondent No.1, the trading activity in rice and
other foodgrains must be done keeping in view the obligation to improve public
health.
There
can be little doubt that if sub-standard rice is released and sold in the open
market it would be highly injurious to the consumers. Public health would be jeopardised
if such rice is consumed by members of the public. Poverty in our country is
quite rampant and illiterate, ignorant and poor persons would not hesitate to
consume such rice if sold at cheap rates. That would undoubtedly be exposing
the poor to the risk of consuming sub-standard rice. A mere undertaking is no
guarantee that the dealer will upgrade the rice before marketing the same.
What
action could be taken against a defaulting dealer who markets the rice without
upgrading the same? At the most, he may be blacklisted but the damage or injury
caused to the consumers cannot be remedied. Therefore, in addition the
undertaking, something more by way of a sanction against misuse seems
necessary.
It
seems to us that the most ideal solution is that FCI should itself upgrade the
rice before sale. A corporation dealing with such huge quantities of rice can
certainly set up a plant to upgrade the sub-standard rice before release to the
dealer. The concerned Ministry of the Government of India should seriously
examine this proposal. If, however, the idea of FCI itself setting up a plant
to treat the sub- standard rice is not feasible, the next alternative is that
the concerned Ministry in the Government of India should evolve guidelines
which would secure a foolproof system which ensures that sub-standard rice does
not enter the market for human consumption before it has been upgraded and made
fit for human consumption. We are particularly anxious because the consumers of
such rice are likely to be people who are downtrodden and stricken with
poverty. Such a segment of society needs the State's protection in this behalf.
If a reasonable and safe arrangement cannot be worked out, the third
alternative would be to use such sub- standard rice for any other purpose, such
as, for cattle- feed, chicken-feed, etc.
We
leave it to the State authorities to determine the course which it considers
most appropriate, keeping in mind this Court's anxiety to ensure that the poor
segment of society is not exposed to the risk of consumption of such rice
without it being upgraded. A copy of this judgment shall be forwarded by the
Registrar General of this Court by a letter to the Cabinet Secretary who will
ensure that the appropriate Ministries in the Government of India initiate
action in this behalf within a reasonable time and complete the exercise
without loss of time keeping in mind the fact that it concerns the lives of the
poor and downtrodden masses. We would appreciate it if the decision taken in
this behalf is communicated to the Registrar General of this Court within a
reasonable time, preferably not later than six months from the receipt of this
judgment.
Accordingly,
(i) we
direct that the entire stock of rice in question, to the extent it is suitable
for human consumption, be duly upgraded by the respondent No.1 either in its
own undertaking or under its active supervision and dispose of the same by
selling it to the licensed dealer only after the upgraded rice is tested and
certified by its quality control team
{ii)
the portion of the rice stock found by the expert Committee appointed by us to
be unsuitable for human consumption be disposed of for purposes other than
human consumption as may be deemed proper by the respondent No.1 in compliance
of government directions in the field. The appeal is disposed of accordingly. No.1
in compliance of government directions in the field.
The
appeal is disposed of accordingly. No costs.
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