The rice thieves in ration stores
An attempt to profiteer from the PDS is thwarted, but the rot runs deep
Jehangir B Gai
Backdrop: There is wide scale corruption in the Public Distribution System,
commonly known as rationing. The subsidised food stock and kerosene seldom
reach the target population huddled around the poverty line. The provisions
sent through the PDS are often illegally diverted and sold in black. All
this is usually done in connivance with the officials. Just how widespread
this malaise is was evident from the recent judgment, dated March 19, 2007,
passed by the National Commission in Original Petition No. 197 of 1997 in
the case of R S Industries v/s National Insurance Co. Ltd.
Case Study: R S Industries were running a rice mill and dealt in all kinds
of foodgrain. They claimed that in March 1994 12,654 bags of levy rice (i.e.
government requisitioned rice / paddy), each weighing one quintal, were
stolen on a particular night. The theft of rice and paddy bags was covered
by insurance policies issued by National Insurance Co. After lodging an FIR
with the police, a claim was lodged with the insurance company for this
loss.
However, the surveyor appointed by the insurance company concluded that
the claim was bogus, and recommended a thorough investigation. So the
insurance company appointed an investigator who concluded that the claim was
fraudulent.
Since it was levy rice, the government’s marketing inspector also
investigated the theft and concluded that the theft was not genuine. Hence a
criminal case for breach of trust was filed against R S Industries and its
partners, but they were acquitted by the court.
Thereafter, in September 1997, R S Industries and its partner Smt. Rem
Mittal filed a complaint before the National Consumer Disputes Redressal
Commission claiming over Rs 50 lakh on the ground that the repudiation of
the insurance claim was unjustified. They contended that the genuineness of
their claim was proved by the dismissal of the criminal case against them.
The Commission noted that according to the investigation, there were
witnesses who had seen the rice being taken out of the mill in loaded trucks
during the day. The quantity of rice so ‘stolen’ was so much that it would
have been physically impossible to take it out in just one night; the
operation would have had to have been spread over several days and it is
impossible to believe that the broken locks would go undetected. The
investigation revealed that this rice was transported from Dudhia Khurd to
Assam and Maharashtra.
Since levy rice belongs to the government, the PDS scheme requires the
stock in the mill to be checked by the marketing inspector daily, by the
in-charge of the office once a week, by the deputy regional marketing
officer fortnightly, and by the regional marketing officer monthly. The
lapse in carrying out such inspection by the marketing inspector and the
incharge made it evident that there was a nexus between the mill owner and
the officials, for which both these officials were suspended.
After the entire stock of rice had been ‘stolen’, an FIR was lodged with
the police, but the marketing inspector/food department, whose office is
close to the police station, was not informed of the ‘theft’ immediately,
but after a delay of five days. Even the intimation to the insurance company
was sent after five days by registered post.
The Commission held that the dismissal of criminal complaint against the
mill owner for misappropriation of the levy rice would have no bearing in
deciding the civil matter under the Consumer Protection Act. This is because
in a criminal case benefit of doubt is given; whereas in a civil dispute the
probability is that the theft was concocted by the complainant, which is
borne out by the findings of the insurance company’s investigator, the PDS
authorities, as also the Collector who had made independent inquiries and
found the mill owner guilty of fabricating the ‘theft’.
The Commission concluded that the ‘theft’ was a planned fraud on the
part of the complainants in collusion with government officials.
Accordingly, the complaint was dismissed with a direction to the complainant
to pay costs of Rs 2 lakh for filing such a false complaint.
Impact: The Commission hopes that the imposition of such heavy costs would
act as a deterrent against others filing such false complaints resulting in
wastage of the Commission’s time.
(The author has won the Govt of
India’s National Youth Award for
Consumer Protection. Email:
SEEDS OF TROUBLE