Collector’s supervisory role does not confer jurisdiction to adjudicate a MARKFED transporter’s contractual liability.

The petitioner was engaged by the Madhya Pradesh State Cooperative Marketing Federation Ltd. (“MARKFED”) as a transporter for paddy procured during Kharif Marketing Season 2021–22.

The petitioner’s rights and liabilities were governed by a transportation agreement, including Clauses 21.2 and 22.4 concerning weighment and liability for shortage.

Approximately 920 MT of shortage was allegedly detected when the paddy was weighed at government warehouses.

Following the petitioner’s explanation, an inquiry committee was constituted and submitted its report on 29 April 2022.

The Collector, Gwalior, acting as Chairman of the District Procurement Committee, passed an order dated 17 May 2022 directing recovery towards the alleged shortage.

The District Marketing Officer thereafter issued a consequential recovery order dated 19 May 2022.

Whether the Collector, merely by virtue of being Chairman of the District Procurement Committee under the Paddy Procurement Policy dated 9 November 2021, possessed jurisdiction to finally determine the petitioner’s contractual liability as a MARKFED transporter and direct recovery from him?

Whether Clauses 3.7 and 14.13 of the Procurement Policy conferred contractual adjudicatory jurisdiction upon the Collector, or whether those provisions were limited to supervision, monitoring and management of procurement activities?

Whether Clause 14.7 of the Procurement Policy, which permits the Collector to act as an arbitrator in specified disputes, applied to the petitioner’s separate transportation agreement with MARKFED?

Whether the inquiry report could, by itself, sustain recovery against the petitioner in the absence of adjudication by the competent authority under the MARKFED contractual mechanism?

The Court exercised judicial review under Article 226 of the Constitution of India to examine whether the authority passing the recovery order possessed jurisdiction.

It applied the principle that supervisory, monitoring and administrative powers do not, absent an express statutory, policy-based or contractual conferment, include the power to finally adjudicate contractual rights and liabilities.

Clause 3.7 and Clause 14.13 of the Paddy Procurement Policy dated 9 November 2021 were construed as conferring district-level supervisory, monitoring and managerial functions upon the Collector.

Clause 14.7, by specifically authorising the Collector to act as arbitrator in disputes concerning agreements between procurement agencies, societies and warehouse operators, was treated as a limited and specific dispute-resolution provision, not a general source of jurisdiction over every procurement-related contract.

The Court further applied the principle that an inquiry report is only fact-finding material and cannot confer jurisdiction upon an authority otherwise lacking power to adjudicate contractual liability.

An appellate remedy also cannot retrospectively cure a lack of original jurisdiction.

The Court distinguished the Collector’s supervisory role as Chairman of the District Procurement Committee from the adjudication of the petitioner’s contractual liability under the separate MARKFED transportation agreement.

Clauses 3.7 and 14.13 authorised supervision, monitoring, coordination and management of procurement operations, but did not expressly empower the Collector to determine the rights and liabilities of a MARKFED transporter.

Clause 14.7 could not be expansively interpreted because it identified a specific category of agreements and disputes involving procurement agencies, societies and warehouse operators; the respondents failed to establish that the petitioner’s transportation agreement fell within that category.

The petitioner had also raised substantive contractual defences concerning the absence of weighment at the procurement centre and the effect of Clauses 21.2 and 22.4.

Those issues were required to be considered by the competent authority under the contractual framework of MARKFED, not conclusively determined on the basis of an inquiry report by the Collector.

The respondents’ assertion that the District Marketing Officer’s order was appealable to the Managing Director, MARKFED, did not cure the absence of original jurisdiction in the Collector.

The order dated 17 May 2022 passed by the Collector and the consequential recovery order dated 19 May 2022 passed by the District Marketing Officer were therefore quashed insofar as they related to the petitioner.

The quashing was confined to the petitioner and did not affect proceedings against any other person, society, group or agency.

The Court expressed no final opinion on the actual cause of the shortage or the petitioner’s ultimate liability, and left MARKFED at liberty, if permissible in law, to reconsider the matter through its competent authority in accordance with the transportation agreement and applicable policy, after giving due notice and a reasonable opportunity of hearing.

The inquiry report could not, by itself, operate as an order of recovery.

The writ petition was allowed and disposed of, with no order as to costs.