Recovery of Embezzled Food Grain Dues Must Align with Statutory Circular Prescribing Commission Deductions

The petitioner is the President of Jankalayan Upbhokta Sahakari Bhandar No. 2, Suhagi, which operates a fair price shop.

Following an inspection, authorities alleged a variation between physical stock and POS machine records, claiming the petitioner sold food grains worth Rs. 26,62,990/- via manual register entries during the 2022-2023 COVID-19 period instead of through the POS system.

Consequently, the petitioner’s shop was suspended, and an embezzlement recovery order was issued.

The petitioner’s appeal to the Collector, Jabalpur was rejected on March 24, 2025.

The petitioner subsequently filed this writ petition seeking a direction for the respondents to recover dues from his commission in accordance with the State’s circular dated November 21, 2024.

1. Whether the respondents are bound to recover the alleged dues from the petitioner’s commission as per the guidelines laid down in the State Government’s circular dated November 21, 2024.

2. Whether the petitioner is entitled to a direction for the consideration of his representations regarding the continued operation of the fair price shop and the method of recovery.

Circular dated 21.11.2024 issued by the State of Madhya Pradesh.

Clause 2.8 of the Circular dated 21.11.2024, which mandates that in instances of food grain shortages at fair price shops, the recovery of the value (calculated at economic cost) should be adjusted by the District Manager, MPSCSC, from the dealer's payable commission at a rate not exceeding 20% per month.

The Court noted that the State Government had issued a specific circular to standardize the handling of stock variations discovered during inspections.

The petitioner contended that while he did not dispute the recovery in principle, it must be executed through the 20% commission deduction mechanism prescribed in Clause 2.8 of the said circular.

The Court observed that despite repeated opportunities, the State failed to file a response or dispute the validity of the circular.

By comparing the petitioner’s grievances with the explicit text of Clause 2.8, the Court found that the authorities had failed to act on the petitioner’s representations to implement this specific recovery mode.

The Court ordered that this exercise must be completed within 45 days from the receipt of the certified copy of the order.