PETITIONER:
TAPAN KUMAR SADHUKHAN
Vs.
RESPONDENT:
FOOD CORPORATION OF INDIA & ORS.
DATE OF JUDGMENT: 20/08/1996
BENCH:
N.P. SINGH, S.C. SEN
ACT
HEADNOTE
JUDGMENT
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.
JUDGMENT The following Judgment of the Court was delivered:
JUDGMENT AHMADI, CJI.
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 upgradation 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 upgradation 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 foodgrain handling makes no provision for sale of substandard/damaged rice for human consumption and does not. prescribe that such substandard/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 upgradation 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 substandard/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 "substandard" 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 substandard 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 foodgrains 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 foodgrains 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 foodgrains 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 foodgrains. 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
foodgrains 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 foodgrains trade of the country. Being an important factor in the market of foodgrains 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 substandard 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 substandard rice for any other purpose, such as, for cattlefeed, 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.