Administrative inaction causing logistical delays excuses contractual non-performance, barring coercive action against rice millers.

The Petitioner, a rice miller, entered into Custom Milling Agreements in December 2024 for the Kharif Marketing Season 2024–25 to deliver Custom Milled Rice (CMR) to the Food Corporation of India (FCI).

The deadline for delivery was extended to 30.04.2026.

Despite having milled the rice and being ready to deliver, the Petitioner faced systemic bottlenecks, including lack of stack allotments by the FCI, labor shortages at depots, rack movement delays, and changes in policies regarding Fortified Rice Kernels (FRK).

The Petitioner approached the High Court seeking an extension of time and a restraint on coercive actions (such as forfeiture of bank guarantees) since the delay was attributable to the respondents' administrative failures.

1. Whether the Petitioner is entitled to a direction for the acceptance of CMR beyond the 5:00 PM deadline on the final date of the contract due to administrative and logistical constraints of the State agencies.

2. Whether the Court should restrain the respondents from taking coercive actions for delays caused by systemic failures rather than the miller’s negligence.

The Court primarily relied on the constitutional principles of Article 14 (Right to Equality/Protection against arbitrariness) and Article 19(1)(g) (Right to practice any profession/trade) of the Constitution of India.

It applied the legal principle that a party cannot be penalized for non-performance rendered impossible due to administrative inefficiencies and factors beyond its control, often referred to as the doctrine of "balancing of equities" in contractual-administrative matters.

The Court observed that the Petitioner was a bona fide miller who had already fulfilled the milling process and remained ready to deliver the CMR.

It noted that the respondents' own official communications—such as the FCI report dated 23.03.2026 and Markfed’s records—acknowledged acute labor shortages, stack allotment gaps, and FRK supply disruptions.

The Court reasoned that since the delivery mechanism is entirely controlled by the respondents (stacking, labor, and online booking), the Petitioner could not be held solely responsible for the resulting delay.

Consequently, to prevent "irreversible prejudice," the Court found it necessary to intervene on the final day of the deadline to ensure the milled rice was accepted despite the impending cutoff.

It ordered the FCI and other authorities to facilitate acceptance and provide necessary logistical support, including stack allotment and labor, provided the rice meets quality standards.

The Court held that the respondents must act in a "fair and pragmatic manner" to balance the equities, while clarifying it expressed no opinion on other contractual disputes.