The Supreme Court of India adjudicated disputes between Rice Millers and the Bihar State Food and Civil Supplies Corporation under the Bihar and Orissa Public Demands Recovery Act, 1914. The judgment clarified the definition of "public demand," validating the recovery proceedings against millers for defaulting on the Custom Milled Rice (CMR) supply agreement. The court held that the Civil Supplies Corporation, acting as the State's nodal agency, could recover dues as public demand. Procedural safeguards were acknowledged, and statutory remedies for millers were emphasized.

1. Background

• Policy Shift: The procurement policy for 2011-12 replaced levy rice with Custom Milled Rice (CMR).
• Parties Involved: Rice Millers entered agreements with the Bihar State Food and Civil Supplies Corporation to process paddy for CMR.
• Dispute: Non-delivery of CMR led to recovery actions under the Public Demands Recovery Act.

2. High Court Proceedings

• Single Judge: Ruled the recovery proceedings invalid due to the absence of jurisdiction and public demand classification.
• Division Bench: Overturned the Single Judge, recognizing the State's interest and validating the recovery proceedings.

3. Supreme Court Analysis

• Key Issues:
  • Whether dues qualify as public demand under Section 3(6) and Schedule I of the Act.
  • Whether procedural safeguards were adhered to.
• Findings:
  • The Civil Supplies Corporation, as a nodal agency, acted within its rights.
  • Undelivered CMR qualified as public demand.
  • Procedural compliance and statutory remedies available were adequate.

4. Procedural and Legal Observations

• Statutory Framework: The Act provides for filing, serving, and contesting recovery certificates.
• Safeguards: Sections 60, 62, and 63 of the Act allow appeals, revisions, and reviews.

5. Outcome

• Dismissal of Appeals: The Supreme Court upheld the Division Bench's findings.
• Relief for Millers: A 30-day extension to file statutory remedies was granted.

Acts and Sections Discussed:

• Bihar and Orissa Public Demands Recovery Act, 1914
  • Section 3(6): Defines "public demand."
  • Schedule I, Clause 8-A: Includes loans and advances payable to the State.
  • Procedural safeguards under Parts II and IV of the Act.

Ratio Decidendi:

The Court emphasized that public welfare schemes involve transactions with a significant public interest. The Civil Supplies Corporation, functioning as the State's nodal agency, is empowered to recover dues as public demand. Jurisdictional facts and legislative intent validated recovery under the Act.

Subject and Tags:

Public Demand, Procurement Policies, Welfare Distribution
Rice Millers, Bihar, Procurement Scheme, Recovery Proceedings, Civil Supplies Corporation