Withholding of CMR costs pending criminal investigation is impermissible if matter is covered by established compensatory guidelines.

The petitioner, Chairman of Yogipur Panchayat PACS, Hilsa, filed this writ petition challenging an order dated 22-10-2018 (Letter No. 1161) issued by the District Manager, State Food Corporation, Nalanda.

The impugned order withheld payment for Custom Milled Rice (CMR) supplied by the petitioner on the grounds that two criminal cases (Hilsa P.S. Case Nos. 65/18 and 68/18) were pending investigation; payment was made contingent upon the petitioner’s exoneration.

The petitioner sought a direction for the release of Rs. 30,52,801.96 with 11% compound interest.

1. Whether the respondents can be directed to release the withheld dues for supplied CMR in light of pending criminal investigations.

2. Whether the dispute is governed by the procedural precedents set in similar matters regarding the constitution of an inquiry committee.

The court relied on the precedent established in Amrendra Kumar v. The State of Bihar & Ors. (CWJC No. 14138 of 2015).

The Division Bench ruling in The Bihar State Food and Civil Supplies Corporation Ltd. v. Nayan Kumar Sinha (LPA No. 881 of 2016) mandates the constitution of a high-level Committee—comprising the District Magistrate, the Block Enforcement Officer, and a Senior Officer of the BSFC—to investigate controversies regarding grain supply and dues.

The court noted that the petitioner’s counsel argued the case was "squarely covered" by the terms of the Amrendra Kumar judgment, a contention which the Respondent BSFC did not oppose.

Without adjudicating on the merits of the specific dues, the court applied the procedural framework established in Nayan Kumar Sinha, which shifts the burden of fact-finding to a specialized committee to determine if the claims are valid and if the pending criminal cases justify the continued withholding of funds.

The court reasoned that a representation to the District Manager was the appropriate first step to trigger this committee-led dispute resolution mechanism.

The District Manager is directed to consider the representation and, in accordance with the direction in LPA No. 881 of 2016, refer the matter to the designated Committee to examine the controversy; if the Committee’s report favors the petitioner, the Respondent No. 4 must pass orders for the payment of dues.

All pending interlocutory applications were dismissed.