NDLI: Corporation of India and Another Vs. M/s. V.k. Traders and Others

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Ban on allocation of paddy to rice mills Rice Mills
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Registration Act, 1908 (16 of 1908)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Rice Mills: Ban on allocation of paddy to rice mills for custom milling – In this case, quality of rice supplied post milling by the rice mills was found to be defective – Ban imposed on these rice mills for allocating paddy for custom milling for three years for ‘Beyond Rejection Limit’ rice and for five years for ‘Beyond Prevention of Food Adulteration’ rice – Demand notice issued to them for compensating the appellant-FCI for the losses caused to it for supply of sub-standard rice – However, rice mills refused to accept liability and failed to make any payment to FCI – As a result blacklisted rice mills were not allocated any paddy for custom milling – Allegedly with a view to wriggle out of the ban period, the mill owners leased out their rice mills to other similar partnership/ proprietorship firms – Such lease deeds were unregistered – These new lessees consequently applied to the appellant-FCI for allocation of paddy and asserted that none of them had committed any default or been blacklisted and that the disqualification attached to their lessors would not traverse onto their lawful entitlements – Whether Respondents who took over on leasehold basis certain blacklisted rice mills were entitled to allocation of paddy for custom milling – Held: The lease deeds allegedly executed between the defaulting rice millers and the respondents were not reliable as they did not satisfy the statutory requirements of s.17(1)(d) of the Registration Act, 1908 – These Lease-deeds thus were not acceptable as evidence of valid transfer of possessory rights – Even in a case where a proprietorship/partnership firm has been in existence for long and took over a mill-in-default only on-word basis, no right to seek allocation of paddy can be claimed by it unless the liabilities arising out of the previous bilateral agreement were satisfied – Thus, High Court erred gravely in setting aside the orders through which the FCI declined to allocate paddy to the new lessees of the defaulting rice mills – Registration Act, 1908 – s.17(1)(d).
Judge	Hon'ble Mr. Justice Bhushan Ramkrishna Gavai Honble Mr. Justice Sharad Arvind Bobde Hon'ble Mr. Justice Surya Kant
Neutral Citation	2020 INSC 286
Petitioner	Corporation Of India And Another
Respondent	M/s. V.k. Traders And Others
SCR	[2020] 4 S.C.R. 110
Judgement Date	2020-03-06
Case Number	2070

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