1 RSA-1007-2017 (O&M) 136 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA-1007-2017 (O&M) Date of Decision: July 14, 2026 PUNJAB STATE CIVIL SUPPLIES CORP. LTD. AND ANR ..Appellants Versus MOHINDER PAL BADHAN AND ANR ......Respondents CORAM: HON’BLE MR. JUSTICE HARKESH MANUJA Present: Ms. Deepali Puri, Advocate with Mr. Arjun Dhaliwal, Advocate for the appellants. Mr. Rajiv Joshi, Advocate for the respondents. **** HARKESH MANUJA, J. (ORAL) 1. By way of present appeal, challenge has been laid to the judgment and decree dated 19.03.2016 passed by the learned Additional District Judge, Jalandhar (hereinafter referred to as "the First Appellate Court"), whereby Civil Appeal No.77 of 2016 preferred by the appellant- Corporation came to be dismissed and the judgment and decree dated 08.10.2011 passed by the learned Additional Civil Judge (Senior Division), Phillaur (hereinafter referred to as "the Trial Court"), dismissing the suit for recovery instituted by the appellant-Corporation against the respondents, was affirmed. FACTS 2. Brief facts necessary for adjudication of the present appeal are that the appellant-Corporation instituted a suit for recovery of Rs.2,52,06,138/-, comprising Rs.2,13,42,293/- towards principal amount and Rs.38,63,845/- towards interest, alleging that respondent No.1- Mohinder Pal Badhan, who was posted as Inspector, Punjab State Civil TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 2 RSA-1007-2017 (O&M) Supplies Corporation Limited (hereinafter referred to as “PUNSUP”) Centre, Nurmahal, was responsible for the procurement, storage and maintenance of wheat stock relating to the crop years 1999-2000 and 2000-2001 and respondent No.2-V.K. Chopra, the then Field Officer of the concerned Sub-Division, was the Supervisory Officer. It was pleaded that due to their negligence in preserving the wheat stock, the Corporation suffered heavy financial loss on account of shortage of stock, deterioration of wheat leading to its rejection by the Food Corporation of India (FCI), consequential sale of the damaged stock to private purchasers at lower rates, excess carry-over charges, shortage of gunny bags and other allied losses. Accordingly, the Corporation sought recovery of the aforesaid amount along with interest. 3. Respondent No.1 contested the suit by filing a written statement, inter alia, pleading that the wheat stock had remained stored in temporary open plinths for almost five years, though such storage was permissible only for a limited period of about five to six months. It was further pleaded that the deteriorating condition of the wheat stock had repeatedly been brought to the notice of the higher authorities through periodical reports and correspondence, but no effective steps were taken for timely disposal of the stock. It was also averred that respondent No.1 had not remained continuously posted at the Centre during the entire period and that the responsibility for disposal of the stock vested exclusively with the higher authorities. On these premises, dismissal of the suit was prayed for. 4. Upon consideration of the pleadings of the parties, the learned Trial Court framed the following issues:- TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 3 RSA-1007-2017 (O&M) “1. Whether plaintiffs are entitled for recovery of Rs.2,52,06,138/- as prayed for? OPP. 2. Whether the plaintiffs are entitled for interest, if so, to what rate? OPP. 3. Whether present suit is maintainable? OPP. 4. Whether this Court has jurisdiction to try and decide the present suit? OPP. 5. Whether the plaintiffs have got locus standi to file the present suit? OPP. 6. Whether the plaintiffs are barred by their own act and conduct from filing the present suit? OPP. 7. Whether the present suit is bad for misjoinder and non-joinder of necessary parties? OPD. 8. Relief.” 5. After appreciating the oral as well as documentary evidence available on record, the learned Trial Court vide judgment and decree dated 08.10.2011 dismissed the suit for recovery. 6. Aggrieved by the judgment and decree passed by the learned Trial Court, the appellant-Corporation preferred Civil Appeal No.77 of 2016 before the learned first Appellate Court, whereby the findings recorded by the learned Trial Court were affirmed and the appeal was dismissed vide judgment and decree dated 19.03.2016. Hence, the present Regular Second Appeal. CONTENTIONS:- ON BEHALF OF APPELLANTS-PLAINTIFFS:- 7. Learned counsel appearing on behalf of the appellant- Corporation contends that both the Courts below committed patent error in dismissing the suit. It is submitted that the respondents, being the officials entrusted with the maintenance, preservation and safe custody TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 4 RSA-1007-2017 (O&M) of the wheat stock were responsible for the loss suffered by the Corporation. It is further argued that the liability of the respondents stood duly established in the departmental proceedings and the Courts below failed to appreciate the documentary evidence on record in its proper perspective. Accordingly, it is prayed that the judgments and decrees passed by the Courts below be set aside and the appeal of the appellant- Corporation be allowed. ON BEHALF OF RESPENDENTS-DEFENDANTS: - 8. Per contra, learned counsel appearing on behalf of respondent No.1 submits that the wheat stock admittedly, remained stored in Grade-II godowns/open plinths for a period far beyond the permissible limit and its deteriorating condition was repeatedly brought to the notice of the higher authorities. It is further submitted that respondent No.1 had no authority to dispose of the wheat stock without the approval of the competent authority and, therefore, no negligence could be attributed to him. He asserts that the concurrent findings recorded by both the learned Courts below are based upon proper appreciation of the oral as well as documentary evidence and call for no interference. DISCUSSION AND REASONING 9. I have heard learned counsel for the parties and gone through the paper-book. I am unable to find substance in the submissions made on behalf of the appellants. 10. In the present case, admittedly, as per the records, the wheat crop was stored in the year 1999-2000 in open plinths (Grade-II). This fact was even admitted by PW2, own witness of appellants-plaintiffs namely, Mr. Sat Narain, Reader. As per the Accounting Manual of the Punjab State Civil Supplies Corporation Limited, produced on record as TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 5 RSA-1007-2017 (O&M) Ex.D-3, Grade-II godowns, i.e. open plinths, are suitable only for short- term storage, i.e. for a period of 5 to 6 months. However, in the present case, the wheat crop which was stored in the year 1999-2000 was disposed of in August 2004 (after a period of 4-5 years); far in excess of the permissible storage period. 11. Moreover, during this period, physical verification of the stock was conducted, commencing from 30.09.2000, and on every occasion the wheat bags were found to be in deteriorating condition, with the wheat having started turning into Atta. This position stood squarely admitted by PW-2 in his cross-examination. He conceded that the stock had been put into storage in April 1999 and was first verified only six months thereafter, the entire quantity having been kept in open plinth storage throughout. He further admitted that the physical verification report dated 31.03.2001 itself recorded Atta formation in the stock, and that despite this, the wheat was disposed of only in August 2004, more than three years after its deteriorating condition had first come on record, with a further verification report dated 30.09.2001 confirming that the wheat had been destroyed from the sides and upper side of the plinth. Despite every physical verification report been forwarded to the Managing Director of the appellant-Corporation at Chandigarh, no steps were taken to dispose of the stock in time. 12. It has also come on record that the respondents-defendants were not the officers competent to dispose of the wheat stock; that authority vested exclusively in the Managing Director, without whose permission or instructions no disposal could be effected. The defendants, being bound to act only on the Managing Director's directions, could take no independent action in the matter, and it was the Managing Director TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 6 RSA-1007-2017 (O&M) who failed to direct disposal of the deteriorating stock prior to 2004. The defendants cannot, therefore, be held negligent in the performance of their duties. 13. It has further come on record that the respondents- defendants were already subjected to departmental enquiry in respect of the very lapses now sought to be made the basis of the present suit for recovery. In this regard, the Hon'ble Apex Court in Punjab State Civil Supplies Corporation Ltd. v. Sikander Singh 2006 (3) SCC 736, held that negligence in the performance of a duty under a contract of employment may give rise to a disciplinary proceeding, but does not, give rise to a cause of action for recovery of money as recovery from the delinquent employee can itself be directed in the disciplinary proceeding by way of punishment. Once the respondents-defendants had already been proceeded against departmentally for the very default alleged, the remedy of a separate civil suit for recovery of the loss was neither necessary nor maintainable. The relevant para of Sikander Singh’s case (supra) is extracted hereunder:- “28. Negligence has further been defined to mean 'failure to do statutory duty or otherwise giving rise to damage'. Negligence in the performance of a duty under a contract of employment may give rise to a disciplinary proceeding but as at present advised, in a case of this nature, we are of the opinion that the same would not give rise to a cause of action for recovery of money for the goods lost as in the disciplinary proceeding itself recovery of money from the delinquent can be directed by way of punishment.” 14. Furthermore, material evidence establishes that the wheat stock belonged to the Central pool and was to be lifted by the Food Corporation of India (hereinafter referred to as “the FCI”), but could not be dispatched for want of special railway bogies, to be arranged by the TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 7 RSA-1007-2017 (O&M) FCI, despite repeated requests made by the appellant-Corporation vide Exs. P-7 to P-9. The appellant-plaintiff's own witness, PW4, namely, Shanti Saroop, District Manager, admitted that once Atta formation had set in, the stock ought to have been liquidated on priority, but this could not be done on account of the FCI's failure to arrange the requisite bogies in time. The correspondence (Exs. P-7 to P-9) further shows that the appellant-Corporation itself attributed the damage to the FCI's delay and sought reimbursement of the resultant loss from it. Having thus admitted, on its own record, that the deterioration of the stock was occasioned by the FCI's default and not by any lapse on the part of the defendants, subordinate employees with no authority over the FCI or over the Central pool arrangements, the appellant-Corporation cannot be permitted to turn around and attribute negligence to the defendants for the very loss it has claimed against the FCI. 15. In such circumstances, the Courts below rightly dismissed the suit for recovery filed at the instance of appellant-corporation against the respondent-defendant towards loss of stored wheat crop. Accordingly, in view of the detailed discussion made herein-above, finding no illegality or perversity with the concurrent findings of the fact recorded by the Courts below there being no misreading or misinterpretation of the pleadings and evidence on record, the judgment and decree dated 08.10.2011 passed by the learned Trial Court, as affirmed vide judgment and decree dated 19.03.2016 passed by the learned first Appellate Court, calls for no interference by this Court. Consequently, the present appeal, being devoid of merits, is thus dismissed. TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document 8 RSA-1007-2017 (O&M) 16. Pending application(s), if any, shall also stand disposed of. 14.07.2026 (HARKESH MANUJA) Tejwinder JUDGE Whether speaking/reasoned Yes/No Whether reportable Yes/No TEJWINDER SINGH 2026.07.20 16:17 I agree to specified portions of this document