Land Ownership Prevails Over Technicality: Punjab and Haryana High Court Rules in Favor of Rice Mill Owner

In a recent judgment, the Punjab and Haryana High Court delivered a significant decision favoring a rice mill owner, emphasizing the importance of land ownership in the context of registration and paddy allocation. The court set aside an order rejecting the final registration of the rice mill and directed a reevaluation of the petitioner’s claim for paddy allotment.

The court’s ruling came in response to the petitioner, M/S DIVIA SHINE FOODS, seeking relief under Articles 226/227 of the Constitution of India. The petitioner had purchased a rice mill in an open auction under the SARFAESI Act. However, their application for the final registration of the mill had been rejected by authorities, citing technical reasons, particularly the size of the land.

The judgment, delivered by HON’BLE MR. JUSTICE JAGMOHAN BANSAL, highlighted the significance of land ownership, as per relevant policies and instructions. The court noted that while instructions had specified that a new mill should be established on owned land and not leased land, the petitioner had purchased the mill along with the land in a public auction. There was no dispute regarding the ownership of the land where the rice mill was located.

The court also took into account the petitioner’s possession of sufficient plant and machinery, as well as their compliance with policies allowing rice millers to obtain additional land on lease within a specified distance.

Addressing the allocation of paddy, the court pointed out that the petitioner had been allotted paddy from 2017 to 2022, even though the instructions from 2013 specified otherwise. The judgment stressed the time-sensitive nature of paddy allocation, particularly in the seasonal rice industry, and concluded that compelling the petitioner to purchase additional land at this late stage would be unjust and impractical.

As a result, the court directed the respondent to reconsider the petitioner’s claim for paddy allotment, taking into account their ownership of land and compliance with policy provisions regarding additional leased land. The respondent was instructed to complete this process within two weeks.

Date of Decision: 21.11.2023

M/S DIVIA SHINE FOODS VS STATE OF PUNJAB AND OTHERS