Read Order: Union of India v. M/s Hemkunt Rice Mills and Others 

Monika Rahar

Chandigarh, February 10, 2022: In a suit for recovery, the Punjab and Haryana High court has recently held that the Food Corporation of India (FCI) being a body corporate and is a separate entity in the eyes of law,  is entitled to sue and be sued in its own right. 

The Bench of Justice Sudhir Mittal made the above stated observations while dealing with a case wherein a suit for recovery was filed by the FCI against the first and the second respondents. Seven years later, the Union of India filed an application for being impleaded as a party thereto. The application was rejected by the trial Court on the ground that it was belated and that the Union of India was neither a necessary nor a proper party. The argument that Union of India was providing the funds for the Food Corporation of India, was also not accepted. 

The only argument raised by counsel for the petitioner was that the FCI is a no profit no loss organisation and all funds are provided by the Union of India. The counsel further argued that the rice in respect of which the suit was filed was part of the central pool and the miller was supposed to mill the rice as per the specifications provided by the Government of India. Thus, he submitted that the trial court was in error in dismissing the application by its impugned order. 

After having held that the Food Corporation of India was a body corporate and a separate entity in law, the High court was of the opinion that the recovery suit was filed on the basis of the instructions issued by the Central Government and the interests of the Central Government were being looked after by it. Thus, the Court adjudged that the presence of the Union of India was not essential for a decision of the suit. 

Further, the court asserted that the Union of India also could not be termed to be a proper party. 

“Thus, the findings of the trial Court do not suffer from any infirmity”, concluded the court.

Therefore, the revision petition was dismissed.

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