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M/s. Pragjyotish Food Products & Another v/s The State of Assam, Represented Commissioner & Secretary to the Govt. of Assam, Dept of Cooperation, Dispur, Guwahati & Others


Company & Directors' Information:- B. P. FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15311MP1994PTC032994

Company & Directors' Information:- S P P FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15412DL2004PTC128666

Company & Directors' Information:- J S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15314OR1991PTC002964

Company & Directors' Information:- H R B FOOD PRODUCTS PVT LTD [Active] CIN = U15146WB1988PTC045281

Company & Directors' Information:- V D FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15400DL2012PTC231717

Company & Directors' Information:- P R FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC030483

Company & Directors' Information:- S S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15310MH2003PTC142530

Company & Directors' Information:- B K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15312OR1996PTC004541

Company & Directors' Information:- O H P FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U52205DL1999PTC100269

Company & Directors' Information:- K V FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15122DL2007PTC162739

Company & Directors' Information:- K. C. FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15431JK1982PTC000554

Company & Directors' Information:- GUWAHATI FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U01222AS2015PTC012290

Company & Directors' Information:- K I C FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15316DL1979PTC009757

Company & Directors' Information:- R B FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15313DL2010PTC202753

Company & Directors' Information:- R K B FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15490KL2013PTC033500

Company & Directors' Information:- S K G FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15419UP1991PTC013771

Company & Directors' Information:- B H FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15134DL1997PTC084273

Company & Directors' Information:- N S FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15412WB1992PTC055591

Company & Directors' Information:- H N FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15146UP1990PTC011540

Company & Directors' Information:- V K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15412UP1988PTC010023

Company & Directors' Information:- B M FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15419WB1993PTC060386

Company & Directors' Information:- I K FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15412WB1991PTC051852

Company & Directors' Information:- S S V FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15499AP1982PTC003547

Company & Directors' Information:- S Q P FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15100MH2003PTC139217

Company & Directors' Information:- F S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15311MH2000PTC126031

Company & Directors' Information:- Z K FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400MH2010PTC209818

Company & Directors' Information:- M B S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U01112WB2003PTC096375

Company & Directors' Information:- N D FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15131DL2002PTC115754

Company & Directors' Information:- C K M FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51909KL1998PTC012358

Company & Directors' Information:- PRAGJYOTISH FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15419AS1987PTC002779

Company & Directors' Information:- G S C FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15316WB1985PTC038398

Company & Directors' Information:- A K G FOOD PRODUCTS PVT LTD [Under Liquidation] CIN = U15412WB1990PTC049789

Company & Directors' Information:- ASSAM FOOD PRODUCTS PVT LTD [Strike Off] CIN = U28129AS1969PTC001302

Company & Directors' Information:- J M D FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15419DL1998PTC097578

Company & Directors' Information:- L K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15200TG2016PTC103411

Company & Directors' Information:- FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15431JK1966PTC000304

Company & Directors' Information:- R R FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15490PN2015PTC154753

Company & Directors' Information:- A N FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400TG2013PTC091969

Company & Directors' Information:- R V S K FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15490DL2012PTC245851

Company & Directors' Information:- K G Y FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400KA1984PTC005909

Company & Directors' Information:- FOOD PRODUCTS (INDIA) PVT. LTD. [Strike Off] CIN = U15311HR1994PTC032356

Company & Directors' Information:- M K FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15209DL1979PTC009924

    Writ Petition (C) No. 3951 of 2009

    Decided On, 12 May 2016

    At, High Court of Gauhati

    By, THE HONOURABLE MR. JUSTICE HRISHIKESH ROY

    For the Petitioners: S. Kataki, A.N. Chowdhury, P. Deka, Advocates. For the Respondents: R1 & R2, Dr. B. Ahmed, R3, J. Bora, Advocates.



Judgment Text

Order (Oral)

1. Heard Mr. S. Kataki, the learned Counsel appearing for the petitioners. Also heard Dr. B. Ahmed, the learned standing counsel for the Cooperation Department for the respondent Nos.1 & 2. The learned counsel Ms. J. Bora appears for the Liquidator of STATFED (respondent No.3).

2. The petitioner’s claim on account of the closure of operation of the oil mill unit under the STATFED, was rejected on 28.8.2009 (Annexure-M) by the Liquidator of STATFED and this is what is challenged here. According to the petitioners, they suffered loss and damage due to sudden closure of the STATFED’s oil mill unit, which they were operating, under the agreement dated 2.9.2003 (Annexure-A). The Liquidator declared that the claimant had defaulted in making payment of the usage charge and monthly royalty and hence direction was issued to pay the arrear amount to the other side.

3. The petitioner does not challenge the legality of the impugned order on merit but Mr. S. Kataki, the learned counsel submits that hearing was not afforded to the affected party and therefore the Liquidator’s order is legally unsustainable. In support of his contention, Mr. Kataki relies on Sahara India (Firm), Lucknow vs. Commissioner of Income Tax reported in (2008) 14 SCC 151 and submits that since the decision of the Liquidator result in 'civil consequences' for the petitioner, the same should have been preceded by hearing.

4. On the other hand, Dr. B. Ahmed, the learned standing counsel for the Cooperation Department submits that the petitioners’ claim arise out of the contractual agreement dated 2.9.2003 and therefore such claim should appropriately be raised in the Civil Court, where full opportunity would be available to establish the bona-fide of the claim. The departmental lawyer further submits that the ratio of Sahara India (Firm) (Supra) is in the context of a pre-decisional hearing in a proceeding under Section 142 (2-A) of the Income Tax Act and therefore the said ratio can have no relevancy in the present case, where the petitioner’s claim is based upon the agreement executed with the STATFED on 2.9.2003 (Annexure-A).

5. Representing the 3rd respondent, Ms. J. Bora, the learned counsel refers to the counter affidavit filed on 10.12.2009 by the Liquidator of STATFED and she contends that when the demand for the user charge for the plant and machinery of STATFED and the guaranteed royalty was raised, the defaulting party made a false claim to contest the demand of the STATFED. She further submits that a speaking order was passed by the Liquidator and since the same is not challenged on merit, the Civil Court should be the proper forum to examine the claim arising out of the closure of the terms of the agreement.

6. The Assam State Co-operative Marketing & Consumers’ Federation Ltd. (STATFED) was registered under the Assam Co-operative Societies Act, 1949 and they invited offers to operate the STATFED’s oil mill at Amingaon. Thereafter the deed of agreement was signed on 2.9.2003 (Annexure-A), whereby the M/s. Pragjyotish Food Products (writ petitioner) agreed to import mustard oil in bulk and to sale them after re-packaging, under the ‘TRIPTI’ brand name. Under the agreement terms, the storage tank/godown and other facilities available in the STATFED premises was permitted to be used by the 2nd party and in turn, user charge and royalty was agreed to be paid by the 2nd party to STATFED. In the event of any disagreement, Clause 23 of the agreement provides for arbitration of the dispute.

7. In the meantime as the STATFED had failed to hold the Annual General Meeting to elect the Board of Directors of the Co-operative Society since inception and also defaulted on other fronts and was non-functional in majority of their Branches, the Registrar of Cooperative Societies issued the notification on 14.6.2006 (Annexure-C), canceling the registration of the Society and a departmental Officer was appointed as the Liquidator for the dissolved society.

8. As the agreement of 2.9.2003 (Annexure-A) was to operate only for five years and it was proposed not to extend the lease, notice was issued on 30.6.2008 (Annexure-I) by the Liquidator, whereby the petitioners were informed of the decision to not to further extend the lease period beyond 1.9.2008 and they were asked to deposit the arrear dues unpaid by the 2nd party and to vacate possession of the STATFED’s oil mill plant at Amingaon.

9. The aggrieved party then filed the WP(C) No.3786/2008. This Court on 24.10.2009 (Annexure-J), declined to interfere with the impugned notice of the Liquidator and allowed him to take possession of the oil mill plant. But the Liquidator was directed to consider the claim made by the 2nd party. Thereafter notice was issued by the Liquidator on 15.6.2009 (Annexure-K) to handover possession of the plant at Amingaon and in response to this notice, the petitioners’ side requested for three months time, to handover possession. But the possession was not given over by the 2nd party and eventually steps were taken by the Liquidator on 18.9.2009, to lock up the plant, without breaking the existing lock of the lessee.

10. The Liquidator in his impugned order observed that the 2nd party defaulted in payment of the monthly user charge as the lessee of the oil mill plant and that, they also failed to make payment of the guaranteed royalty to the STATFED. It was also noted that the claim raised by the writ petitioner are not supported by the terms of the agreement. The payable arrear dues of the 2nd party under Clause 13 of the deed of agreement was quantified at Rs.15.75 lakhs as on 30.9.2008 and the claimants were ordered to pay the quantified amount immediately. In so far as the adjusting of security deposit of Rs.3 lakhs and advance against royalty of Rs.2,83,124/-, the Liquidator observed that the same can be processed under Section 66(3) of the Assam Co-operative Societies Act, 1949, if supporting documents/records, are furnished by the claimant. Significantly the petitioners do not challenge the merit of the decision but they contend that since the decision has resulted in civil consequences for the claimants, the Liquidator should have afforded hearing to the claimant.

11. The petitioners rely on Sahara India (Firm) (Supra) to justify the opportunity of hearing and therefore the applicability of this decision is needed to be considered. The provisions of Section 142 (2-A) of the Income Tax Act was under consideration in that case. The expression 'civil consequences' was eloquently explained in Mohinder Singh Gill vs. Chief Election Commissioner, reported in (1978) 1 SCC 405. Here Justice Krishna Iyer, J., speaking for the majority explained the term ‘civil consequences’ in para-66 as follows:

'66..................................‘Civil consequences’ undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence..................................'

12. Thus the expression ‘Civil consequences’ encompasses infraction of not just personal right but also of civil liberties, material deprivations and non-pecuniary damages. But the question is whether the impugned decision has resulted in deprivation of any such rights of the 2nd party, which can be categorized under Civil consequences’, as explained in Mohinder Singh Gill (Supra). The claim here primarily emanates from the contract agreement dated 2.9.2003 and therefore the claim and the counter claim of the two litigants are within the boundary of the written contract. The obligation of the lessee to pay the user charge and guaranteed royalty to STATFED is contained in Clause 13 in the following terms:

'13. Payment to the First Party:

(a) The Second Party shall pay a minimum royalty for 75000 Litres of Oil on monthly basis @ Rs.175/- per M.T. on all sales made under the 'TRIPTI' brand. The Second Party will also pay for utilizing mill facilities for packing, storing, using maintenance, labours, supervisor for packing oil in different ranges @ Rs.400/- (Four hundred) per M.T. oil.

(b) The Second Party shall pay royalty and other service charges payable within 7 (seven) days of each consecutive month to the First Party, TDS if any, will be deducted at source.

(c) The Second Party shall make the required payment against the Electric charges based on the actual consumption including the minimum charges. However, the capacity of the connected load should be reduced to the required level as per design of the mill.'

13. On the other hand, the 1st party under Clause 13, was required to keep the mill and other facilities in running condition. Only the routine maintenance expenditure was to be borne by the 2nd party and the STATFED was obliged to carry out major maintenance/repairs, at their cost. Additional obligations of the parties are reflected in the other Clauses of the agreement.

14. What is seen here is that the operation of the oil mil unit by the 2nd party was allowed to be continued so long as the agreement was in force and it is clear enough that even after the STATFED’s registration was cancelled by the Registrar of the Co-operative Societies on 14.6.2006, the possession of the plant and machineries continued to remain with the 2nd party until the same was sealed in presence of the Magistrate, on 18.9.2009.

15. The claim and the counter claim of the parties, as is already noted, arise out of the terms of the agreement and the rejection of the claim of the writ petitioner in my understa

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nding, can’t be construed to be infringement of any civil liberty category rights of the petitioners. In fact it is a simple case of money claim arising out of the agreement dated 2.9.2003, this type of claim can’t be bracketed with those where the claimant suffered material deprivation or infringement of their civil rights. That apart, the ratio of Sahara India (Firm) (Supra), in my considered opinion, can have no application in the present case, as the said decision was rendered in the context of the statutory provision of the Income Tax Act. 16. The speaking order passed by the Liquidator do not however extinguish the right of the 2nd party to approach the competent forum for redressal of their claim arising out of the terms of the agreement dated 2.9.2003. But the intervention of the Writ Court in such matter which can best be described as a contractual dispute, would not in my view, is justified in the instant case. 17. For the aforesaid discussion and reasons, this petition is found to devoid of merit and the same is accordingly dismissed. No cost.
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