Coercive recovery for paddy weight loss is impermissible without inquiry and invoking agreed dispute resolution mechanisms.

The petitioner, a Samiti Manager of an indigenous cooperative society, approached the High Court seeking protection against being held personally liable for paddy weight shortages

He contended that the shortage resulted from natural dryness/moisture evaporation because the paddy was not lifted in time by the Marketing Federation

He further sought the setting aside of directions issued by the Deputy Registrar and sought an inquiry into the liable parties

The petitioner argued his case was identical to the matter of Ashish Rajak v. State of Chhattisgarh (WPC No. 2440 of 2025), decided on 09.05.2025

1. Whether the respondents can initiate coercive recovery against the petitioner for paddy shortages without conducting a prior inquiry or following the dispute resolution mechanism under the agreement

2. Whether the dispute regarding weight loss due to natural dryness falls under the arbitration clause of the specific agreement

Clause 5.6 of the Agreement, which outlines the procedure for recovery of dues through the Chhattisgarh Cooperative Societies Act, 1960

Clause 13, which mandates an arbitration mechanism before the District Collector for any disputes arising from the agreement

The Court followed the precedent set in Ashish Rajak v. State of Chhattisgarh, which prohibits coercive recovery without first determining liability through an appropriate inquiry and invoking agreed dispute resolution mechanisms

The Court observed that the petitioner was being held personally liable for weight loss attributed to natural moisture evaporation without any formal inquiry to assess actual shortfall versus natural loss

By adopting the reasoning from the Ashish Rajak case, the Court found that the respondents ignored the mandatory dispute resolution procedure established in Clause 13 of the contract

The Court reasoned that any coercive recovery action taken before a formal determination of liability—especially regarding factors like natural dryness admitted in previous government circulars—is arbitrary and legally unsustainable

The Collector is ordered to provide a hearing and pass a speaking order within eight weeks

The Court held that no coercive steps shall be taken against the petitioner until the Collector reaches a decision

The petitioner was also directed to cooperate with any subsequent inquiry regarding the alleged loss