- (1.) The petitioner is a purchaser of a rice mill from M/s Dhose Rice Mill Pvt. Ltd., Dharmkot. He is faced with an order declining an allotment by the Additional Director, Food Supplies and Consumer on the ground that he has purchased the rice mill from a person who faced civil litigation at the instance of FCI for a claim more than Rs. 42 lacs and an arbitral award that is for Rs. 2,14,056/- in favour of PUNSUP and being aggrieved that there is also an objection petition, which is said to have been filed by PUNSUP before the Additional District Judge, Moga. The denial of a prospect of allotment was on the ground that PUNSUP had admittedly initiated arbitral proceedings as well as civil proceedings for recovery of the amounts against the vendor and it could only be stated that the petitioner was not in knowledge of the proceedings in respect of the mill which he had purchased. It is brought out in the impugned order that the petitioner had not obtained NOC or prior approval from the department in terms of the circular dated 20.08.2010 that requires a prior approval from the Government before purchasing any mill to know the current status of the mill sought to be purchased by him. The learned counsel appearing on behalf of the petitioner would contend that at the time when he purchased the property, there was no encumbrance on the property and therefore, there could be no fetter of a purchase in his favour. He is a bona fide purchaser for value and there is no provision in the policy that disentitles a person to secure allotment from the State. The counsel would refer me to the definition in Clause 3 (x) defining "miller" to mean a person who had the ultimate control over the affairs of the mill and clause (xiv) defines the "family" as a person who has blood ties or through marriage or adoption a relationship with the defaulting miller. The counsel would plead that neither as a miller nor as a person who has no relationship with the defaulting miller, he would fall within any of the prescribed clauses. Even the definition of defaulter defined under Clause (xv), according to the counsel, only refers to a person who is yet to clear the dues of such a person. If he is a purchaser, clause 11H(c) would require that a lease or a sale shall be found to be sham or must have some financial relationship between the defaulting rice miller and the subsequent purchaser and it could not be stated that there was any sham character in the document of purchase.
(2.) If there is a State policy that dictates that award of State largesse is to be confined only to persons who are neither defaulters nor purchasers from defaulters and there is also a requirement that NOC must be obtained before a person purchases the rice mill to elicit information about the financial liabilities, then it should be taken to be only fair that the State protects its interest through a policy that a defaulting rice miller does not part with property without making adequate arrangement for satisfaction of the sum. The contracts are in respect of a large volume of paddy entrusted for milling and the claims of one against the other are invariably in terms of several lacs or crores of rupees. The requirement of NOC is in the manner of protecting such an interest and it has nothing to do with the normal transaction of purchase which will impinge on a transfer of title to the property. The petitioner can well be satisfied about the lawful transfer of title from his vendor by the fact that there was no encumbrance but this could definitely afford no guarantee to him that he will secure some collateral benefits from the State for obtaining an allotment. They are governed by wholly different considerations. The only matter that has to be seen is whether a policy that dictates that in the manner of sale by a defaulter a purchaser must obtain NOC, is reasonable to gather details that the transaction is above board and there are adequate resources still available for the vendor to clear the dues, I will find nothing wrong about a State giving effect such a policy. Indeed, the limit of intervention to matters of policy shall always be confined only to aspects which are arbitrary and capricious. I will find a policy term that requires the State agency to examine the benefits of the sale from its point of view of an undischarged liability and its own perception of whether the vendor and the purchaser had acted bona fide, should at all times prevail and a purchaser cannot have a grievance that the State shall not examine the indebtedness of his transferor if he is looking for distribution of largesse from the State. I clarify that the petitioner's own purchase may be good against the whole world, as a transferee of tile to the property against the State where he seeks for favours, the State can fetter his right to secure what he seeks for, such as, allotment of paddy for milling.
(3.) The further contention of the counsel for the petitioner is that NOC would be necessary only if it is a matter with reference to the purchase of the mill but in this case the petitioner has purchased only the land and he has installed the new mill with machinery which he owned. I would find the argument untenable, for, a person who has purchased only the land and not the mill definitely exposed himself to a very serious suspicion that the vendor who owned the rice mill and who had financial outstandings unsettled with the State and its functionaries could dispose of only the land and allow for the purchaser to put up only machineries. This cannot be taken to be a situation of purchase without blemish and it was perfectly possible for the State to insist on a NOC even in such a situation.;