Govt using coercive methods to recover Rs 3,600 cr dues, rice millers tell HC

Hyderabad: Over 300 rice millers facing criminal cases over alleged diversion of custom milling rice and misappropriation of govt dues told Telangana high court that the state was violating contract terms and using coercive methods to recover about Rs 3,600 crore.Counsel for the millers made the submissions before Justice J Sreenivas Rao, opposing the state's claim that the millers deliberately diverted rice and prolonged the dispute since the 2022-23 financial year, causing financial burden and impacting welfare schemes. The court recorded the arguments and reserved the matter for final orders. Senior counsel RN Hemendranath Reddy, appearing for the millers, argued that the govt had itself instructed them not to mill the paddy supplied during the 2022-23 season and allowed the stipulated time to lapse. He contended that the state suffered no loss as a result. He further submitted that the govt's actions were contrary to contractual terms and that criminal cases were filed only to pressure millers into clearing dues. Urging the court to quash the cases, he cited Supreme Court rulings holding that criminal proceedings cannot be used as a tool for recovery of money. Dispute resolutionHemendranath also argued that the govt had declared the paddy quality to be poor, halted milling operations and later disposed of the stock through public auction. He added that while only about 8 lakh metric tonnes of rabi paddy were required per season, the Civil Supplies Corporation had dispatched nearly 10 times that quantity. He pointed out that despite the presence of an arbitration clause for dispute resolution, cases alleging fraud and misuse of govt property were filed without invoking it. Public prosecutor Palle Nageswara Rao opposed the submissions, stating that no objections were raised about paddy quality at the time of receipt and that such claims were being made only after remaining silent since 2022-23.