Hyderabad: A dispute between the state government and rice millers over paddy supplied for milling has reached the High Court, with millers arguing that criminal cases filed against them are unjustified.
The issue dates back to the 2022–23 procurement season, when the government supplied paddy to rice mills under the Custom Milling Rice (CMR) system. Under this system, millers are required to process paddy into rice and return it to the government within a stipulated time.
However, the millers told the High Court that the government itself later instructed them not to proceed with milling the paddy and instead auctioned the stocks. Because of this decision, they argued, there was no actual financial loss to the state.
Despite this, the government registered criminal cases against rice mill owners, alleging that they had diverted paddy meant for CMR and failed to return rice or clear dues worth Rs 3,960 crore — an amount equivalent to the value of the paddy supplied, they said.
Govt’s actions violate contract terms: Millers
The millers countered that the government’s actions violated the terms of their contracts. They also claimed that criminal cases were filed as a pressure tactic to recover money. Referring to Supreme Court judgments, they argued that financial disputes or recovery of dues should be handled through civil proceedings, not criminal prosecution.
A total of around 360 rice millers have approached the High Court seeking to have these criminal cases quashed.
Judgment reserved
Justice J. Srinivasa Rao heard the matter on Thursday and has reserved his judgment, which will decide whether the criminal cases can continue or must be dismissed.
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