1 2026:CGHC:6249-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 456 of 2026 Anshul Jotwani S/o Shri Puran Lal Jotwani Aged About 28 Years R/o H. No. 136, Near Sindhi Dharam Shala, Ward No. 10, Tilda, District- Raipur, Chhattisgarh, Sole- Proprietor of M/s Kavita Rice Industries, Hathbandh, District : Balodabazar-Bhathapara, Chhattisgarh ... Petitioner versus 1 - Union of India Through The Secretary, Department of Food And Public Distribution, Room No. 546 C , Krishi Bhawan, Dr. Rajendra Prasad Road, New Delhi- 110001, Email- secy-food@nic.in 2 - Chairman And Managing Director (C M D) of The Food Corporation of India (F C I) 16-20, Barakhamba Lane, New Delhi- 110001 3 - General Manager Food Corporation of India, Chhattisgarh Region, Daldal Seoni, Mowa, Raipur, Chhattisgarh 4 - State of Chhattisgarh Through Secretary, Department of Food, Civil Supplies And Consumer Protection, Indrawati Bhawan, Nawa Raipur, Chhattisgarh 5 - Managing Director Chhattisgarh State Cooperative Marketing Federation Limited (Markfed), 6th Floor, Tower C, Commercial Complex, C B D, Sector- 21, Block C, Nava Raipur, Raipur, Chhattisgarh 6 - Collector Baloda Bazar- Bhatapara, At, District : Balodabazar- Bhathapara, Chhattisgarh 7 - District Marketing Officer Chhattisgarh State Cooperative Marketing Federation Limited (Markfed), Baloda Bazar, District : Balodabazar- Bhathapara, Chhattisgarh ... Respondents ANURADHA TIWARI Digitally signed by ANURADHA TIWARI Date: 2026.02.04 17:04:10 +0530 2 (Cause-title taken from Case Information System) For Petitioner : Mr. Rajkamal Singh (through Video Conferencing) assisted by Mr. Suryapratap Yuddhveer Singh, Advocate For Respondent-UOI : Ms. Annapurna Tiwari, Central Government Counsel For Respondent-FCI : Mr. R.S. Patel, Advocate For Respondent-State : Mr. Soumya Rai, Deputy Government Advocate For Respondent-Markfed : Mr. Animesh Tiwari, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal, Judge Order on Board Per Ramesh Sinha , Chief Justice 0 4 .02.2026 1. Heard Mr. Rajkamal Singh, learned counsel through Video Conferencing assisted by Mr. Suryapratap Yuddhveer Singh, learned counsel for the petitioner. Also heard Ms. Annapurna Tiwari, learned Central Government Counsel appearing for the Union of India, Mr. R.S. Patel, learned counsel appearing for Food Corporation of India, Mr. Soumya Rai, learned Deputy Government Advocate appearing for the State and Mr. Animesh Tiwari, learned counsel appearing for Markfed. 2. The present petition has been filed by the petitioner with the following relief(s):- “10.1 This honourable Court may please be 3 kind enough in declaring the Chhattisgarh Rice Custom Milling Order, 2016 as illegal & Ultra- Vires, the provisions of the Essential Commodities Act, 1955. 10.2 This honourable Court may please be kind enough in directing the State of Chhattisgarh to modify the statutory Custom Milling Agreements to remove the provisions related to unilateral appointment of Arbitrator. 10.3 This honourable Court may please be kind enough in directing the respondents/ State of Chhattisgarh to open & unseal the petitioner's Rice Mill. 10.4 This honourable Court may please be kind enough in directing a detailed inquiry in the matter by a commissioner appointed by this honourable Court. 10.5 This honourable Court may please be kind enough in calling the entire records from the respondents. 10.6 This honourable Court may please be kind enough in allowing a cost of Rs.50,000/- per day with effect from 15.01.2026 on account of idling losses being incurred by petitioner because of illegal sealing & locking of petitioner's Rice Mill. 10.7 This honourable Court may please be kind enough in costs/ damages and any other relief deemed fit, in the facts and circumstances of the case in the interest of justice.” 3. Brief facts of the case, in a nutshell are that The petitioner is the sole proprietor of a rice mill namely M/s Kavita Rice Industries, located at Hathbandh, District Baloda Bazar–Bhatapara, Chhattisgarh, and is engaged in custom milling of paddy under the provisions of the Chhattisgarh Rice Custom Milling Order, 2016 and the agreements executed thereunder with the State 4 agencies. The petitioner has been regularly carrying on the said activity and has furnished the requisite bank guarantees as security towards the prescribed out-turn ratio. 4. On 29.12.2025, a Physical Verification Team inspected the petitioner’s rice mill and, on the basis of an allegedly erroneous and incomplete physical verification, reported a shortage of 2372.64 quintals of paddy, valuing the same at ₹56,20,784.16. Relying upon the said report, the authorities alleged misappropriation of government paddy and, consequently, an FIR bearing Crime No. 17 of 2026 was registered at Police Station Hathbandh under the provisions of the Bharatiya Nyaya Sanhita, 2023 and Sections 3/7 of the Essential Commodities Act, 1955. The said FIR is already under challenge in separate proceedings before this Court. Simultaneously, a show cause notice dated 31.12.2025 was also issued by the Collector, Baloda Bazar– Bhatapara, to which the petitioner submitted a detailed reply on 05.01.2026, and the said proceedings are still pending adjudication. 5. During the pendency of the aforesaid criminal and departmental proceedings, and without passing any written order or issuing any prior notice to the petitioner, the respondent authorities, allegedly acting on oral directions of the Collector, Baloda Bazar– Bhatapara, unlawfully sealed and locked the petitioner’s rice mill on 15.01.2026. The action of sealing has completely paralysed 5 the functioning of the rice mill, resulted in stoppage of all operations, rendered the mill staff idle, and exposed the stocked paddy and custom-milled rice to the imminent risk of deterioration and loss, thereby causing grave financial hardship to the petitioner. 6. The petitioner asserts that neither the Chhattisgarh Rice Custom Milling Order, 2016 nor the Essential Commodities Act, 1955 confers any power or authority upon the respondents to seal or lock a rice mill, and that the alleged shortage is a consequence of wrongful and malafide physical verification, ignoring the returned stock and existing rice and paddy available in the mill. The impugned action of sealing and locking the rice mill, without authority of law and during the pendency of statutory proceedings, is arbitrary, unreasonable and violative of the petitioner’s fundamental rights guaranteed under Articles 19 and 21 of the Constitution of India. 7. Mr. Rajkamal Singh assisted by Mr. Suryapratap Yuddhveer Singh, learned counsel for the petitioner submits that the Chhattisgarh Rice Custom Milling Order, 2016 is illegal, arbitrary and ultra-vires the Essential Commodities Act, 1955, being the parent and enabling statute. It is submitted that the powers conferred upon the Central and State Governments under Sections 3 and 5 of the Essential Commodities Act, 1955 do not contemplate or authorise “contractual milling of paddy” or 6 “contractual production of custom milled rice” by entering into compulsory statutory agreements. In absence of any express or implied statutory sanction under the parent Act, the State Government has exceeded its delegated legislative authority in framing the Chhattisgarh Rice Custom Milling Order, 2016, rendering the said Order liable to be declared ultra-vires. He further submits that the statutory Custom Milling Agreements framed and imposed by the State of Chhattisgarh through the Chhattisgarh State Co-operative Marketing Federation and executed with rice millers, including the agreement signed by the present petitioner, contain arbitration and mediation clauses which are ex facie arbitrary, one-sided and unconscionable. The said clauses vest unilateral power upon the State authorities to appoint the arbitrator, thereby violating the principles of impartiality, independence and equal treatment of parties. Such clauses have already been held to be impermissible and unconstitutional by the Hon’ble Supreme Court in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), (2020) 14 SCC 712, wherein it has been categorically held that unilateral appointment of arbitrators by one party, particularly a State entity, is contrary to Sections 12(5) and 18 of the Arbitration and Conciliation Act, 1996 and violative of Article 14 of the Constitution of India. 8. It is submitted by Mr. Singh that despite the authoritative pronouncement of the Hon’ble Supreme Court, the State of Chhattisgarh has failed to amend or rectify the said clauses and 7 continues to impose the same through statutory and compulsory agreements, leaving the petitioner with no bargaining power or meaningful choice. Such conduct clearly demonstrates arbitrary exercise of State power and abuse of dominant position, rendering the contractual framework itself constitutionally infirm. He contends that when the very foundation of the Custom Milling Order, 2016 and the consequential agreements is legally unsustainable, all coercive actions taken against the petitioner, including sealing and locking of the rice mill, are devoid of authority of law and liable to be quashed. 9. On the other hand, learned counsel appearing for the respective respondents opposed the petition and supported the impugned actions. 9.1. Ms. Annapurna Tiwari, learned Central Government Counsel appearing for the Union of India submits that the Chhattisgarh Rice Custom Milling Order, 2016 has been framed in exercise of powers duly delegated under Section 5 of the Essential Commodities Act, 1955 and is in furtherance of the policy objectives underlying Section 3 of the said Act, namely, to ensure proper procurement, storage, distribution and availability of essential commodities. It is contended that rice and paddy being essential commodities, the State is competent to regulate all stages connected with procurement and milling, including custom milling arrangements, as such, challenge to the vires of the said 8 Order is misconceived. 9.2. Mr. R.S. Patel, learned counsel appearing for the Food Corporation of India submits that the inspection and physical verification conducted at the petitioner’s rice mill revealed a substantial shortage of government paddy entrusted for custom milling, which justified initiation of criminal proceedings as well as departmental action. It is submitted that the presence or otherwise of alleged returned consignments or stock inside the mill is a disputed question of fact, which cannot be adjudicated in writ proceedings. According to learned counsel, the action taken against the petitioner is in the interest of safeguarding public property and food security, and no mala fides can be attributed to the officials concerned. 9.3. Mr. Soumya Rai, learned Deputy Government Advocate appearing for the State of Chhattisgarh submits that the Chhattisgarh Rice Custom Milling Order, 2016 is a valid piece of subordinate legislation, framed after due consideration and in conformity with the Essential Commodities Act, 1955. It is contended that the petitioner, having voluntarily entered into the Custom Milling Agreement and having availed benefits thereunder, is estopped from challenging the terms of the agreement as well as the statutory framework governing the same. It is further submitted that sealing of the rice mill was necessitated to prevent further loss or tampering of government 9 stock and to preserve evidence during the pendency of enquiry and criminal proceedings. He further submits that the Custom Milling Agreements are statutory in nature and apply uniformly to all rice millers across the State. The arbitration clauses contained therein are part of a contractual mechanism intended for expeditious resolution of disputes and do not suffer from any illegality. It is contended that the judgment of the Hon’ble Supreme Court relied upon by the petitioner is distinguishable on facts and does not ipso facto invalidate the arbitration clauses contained in the present agreements. 9.5. Mr. Animesh Tiwari, learned counsel appearing for Markfed adopts the submissions advanced on behalf of the State and submits that Markfed, being the nodal agency for procurement and custom milling, acts strictly in accordance with statutory provisions and government policy. It is submitted that the petitioner has alternative remedies available under the agreement as well as under the relevant statutory framework, and therefore the present writ petition is not maintainable. It is further submitted that no fundamental right of the petitioner has been violated, as the action complained of is regulatory in nature and undertaken in public interest. All the respondents, therefore, pray for dismissal of the writ petition, contending that no case for interference under Article 226 of the Constitution of India is made out and that the issues raised 10 by the petitioner involve disputed questions of fact requiring detailed evidence. 10. We have heard learned counsel for the parties at length and have carefully perused the pleadings and documents available on record. 11. As regards the challenge to the vires of the Chhattisgarh Rice Custom Milling Order, 2016, it is well settled that a presumption of constitutionality attaches to subordinate legislation and the burden lies heavily upon the person challenging its validity to establish that it is manifestly arbitrary, ultra-vires the parent statute or otherwise unconstitutional. The Essential Commodities Act, 1955 is a welfare legislation enacted to regulate the production, supply and distribution of essential commodities in the larger public interest. Sections 3 and 5 of the said Act confer wide regulatory powers upon the Central and State Governments to frame control orders for effective implementation of the objectives of the Act. 12. This Court finds that the Chhattisgarh Rice Custom Milling Order, 2016 has been promulgated in furtherance of the statutory object of ensuring proper procurement, milling, storage and distribution of paddy and rice, which are undisputedly essential commodities. Merely because the parent Act does not expressly employ the phrase “custom milling” cannot lead to the conclusion that the State lacked legislative competence to frame the impugned Order. Regulatory measures relating to custom milling are clearly 11 incidental and ancillary to the powers conferred under Sections 3 and 5 of the Essential Commodities Act, 1955. Therefore, the contention that the Chhattisgarh Rice Custom Milling Order, 2016 is ultra-vires the parent Act cannot be accepted. 13. Insofar as the challenge to the arbitration and mediation clauses contained in the Custom Milling Agreements is concerned, this Court is of the view that the said issue arises from contractual arrangements entered into between the parties. The petitioner, having consciously executed the Custom Milling Agreement and acted upon it, cannot ordinarily be permitted to approbate and reprobate by challenging select clauses thereof while continuing to derive benefits under the same contractual regime. Moreover, the issue relating to validity, enforceability or operation of arbitration clauses is a matter which can be appropriately raised before the competent forum at the relevant stage and does not, by itself, warrant exercise of extraordinary writ jurisdiction. 14. Coming to the grievance regarding sealing and locking of the petitioner’s rice mill, this Court is of the opinion that the said action has been undertaken in the backdrop of serious allegations relating to shortage and misappropriation of government paddy. Pursuant to a physical verification, an FIR has already been registered and departmental proceedings are pending consideration before the competent authority. At this stage, disputed questions of fact arise regarding the correctness of the 12 physical verification, availability of stock and alleged returned consignments, which cannot be adjudicated in writ proceedings under Article 226 of the Constitution of India. The petitioner has adequate remedies available under the statutory framework as well as in the pending proceedings to establish his defence. 15. It is trite law that the writ jurisdiction of this Court is discretionary and is not intended to be exercised in cases involving disputed facts requiring appreciation of evidence or where alternative and efficacious remedies are available. Interference at this stage would amount to pre-empting the outcome of pending statutory and criminal proceedings and would be contrary to the settled principles governing exercise of writ jurisdiction. 16. This Court also finds no merit in the prayer for appointment of a Court-appointed Commissioner or for award of damages at this stage. The petitioner has failed to demonstrate any manifest illegality, perversity or jurisdictional error warranting such extraordinary reliefs. The authorities have acted within the domain of their regulatory and statutory functions, and no mala fides of such magnitude are made out so as to justify judicial interference. 17. In view of the foregoing discussion, this Court holds that the petitioner has not been able to make out a case for declaring the Chhattisgarh Rice Custom Milling Order, 2016 as ultra-vires, nor for issuance of directions sought in the writ petition. The prayers made in the writ petition are accordingly declined. 13 18. Accordingly, the writ petition is dismissed. However, it is made clear that dismissal of this writ petition shall not prejudice the petitioner’s rights to raise all permissible contentions before the appropriate forum in the pending proceedings, in accordance with law. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Anu / Amit