The Telangana High Court dismissed a batch of criminal petitions filed by rice millers from various districts seeking directions to quash the cases registered against them on charges of diverting paddy meant for Public Distribution System for personal gains.

Justice J. Sreenivasa Rao, while pronouncing the verdict on the pleas questioning issuance of FIRs against them, noted that the rice millers failed to deliver custom milled rice, equivalent to the paddy government had supplied. The allegations included that the petitioners “dishonestly and fraudulently misappropriated and diverted the paddy for their personal and pecuniary gains”.

The allegations “prima facie disclose cognisable offences and require investigation”, the order said. When the “investigation is at the threshold”, the petitioners were not entitled for quashing the proceedings, the judge said, and did not agree with the contention of the petitioners that Section 316 (5) of Bharatiya Nyaya Sanhita cannot be invoked against them since they did not fall within the meaning of ‘agent’ as per Section 182 of the Contract Act 1872.

They maintained that they entered into an agreement with the Civil Supplies Corporation to supply custom milled rice as per the paddy supplied by the latter. Describing the argument that Section 316 (5) of BNS cannot be invoked against them as ‘misconceived’ notion, the judge noted that execution of the agreement and the admitted entrustment of paddy clearly established a relationship of agency coupled with dominion over property.

The judgment said that the rice millers (having entered into a contractual arrangement for custom milling, having received the paddy procured under the MSP scheme) were under binding obligation to convert and return the custom milled rice to the corporation. “Such entrustment squarely attracts Section 316 (5) of the BNS,” the verdict said.

“Mere characterisation of the transaction (returning custom milled rice) as ‘job work’ does not detract from the legal effect of entrustment, as it is the existence of control coupled with an oblivion to return or account that is determinative,” the judge noted.