Free Food Kit Distribution: Kerala High Court Directs State To Disburse Arrears To Retail Dealers Within 2 Months

The Kerala High Court has directed the State and the concerned authorities to disburse arrears of commission payable to Authorised Retail Distributors (ARDs) for distributing Covid-19 free food-kits at the rates specified in 2020 and 2021 Government Orders within two months.

Although the State took the stand that the kit distribution was a humanitarian service to be treated as voluntary and not a paid job, Justice N. Nagaresh opined that a service becomes voluntary only when the person performs it willingly without pay.

"In the case of Free Food-Kit distribution, neither willingness was called for from the ARDs nor the ARDs have came forward themselves expressing willingness to do the service without payment. The Government required the ARDs to distribute Free Food-Kits and even indicated that non-distribution of Kits in time will be viewed seriously. In the circumstances, the Government will not be justified in treating the Free Food-Kit distribution as voluntary service by ARDs."

In the light of the raging pandemic, the State issued a Government Order in 2020 to supply free Food-Kits to ration cardholders and others.

The distribution of these kits was to be done by ARDs appointed under the Kerala Rationing Order. The expenditure for the same was to be met from the Chief Minister's Relief Fund.

Meanwhile, the State proposed to fix the commission rate at ₹5/- per kit. This rate was subsequently revised to ₹7/- after the All Kerala Retail Ration Dealers' Association intervened. 

The kit weighed 10 kg each and the petitioners expected to get a commission at the rate of ₹22/- per kit. However, they were paid ₹7/- per kit and even this was discontinued during the months of May, June and July 2020. 

Meanwhile, in 2021, the commission was reduced from ₹7/- to ₹5/- per kit. Moreover, since September 2020, no commission was allegedly paid.

So when the State decided to continue to distribute of free kits in May 2021, the Dealers' Association submitted a representation demanding sanction and disbursement of commission pending from September 2020, 

Accordingly, the State permitted the Director of Civil Supplies to disburse ₹4.25 Crores towards ARD commission. However, it is asserted that the arrears of commission for the past 11 months were yet to be paid. Aggrieved by the same, the ARDs moved the Court.

Senior Advocate Jaju Babu representing the petitioners argued that as per the Food Safety Act and a Government Order dated 2018, the permissible commission is ₹220/- per quintal for public distribution of food articles.

Therefore, their argument was that since 2018, they are entitled to this rate of commission. It was also added that the ARDs supplied free food kits along with other rationed articles as a sincere service.  

Resisting the petition, Additional Advocate General K.P. Jayachandran argued that the disbursement of commission and price fixed for the distribution of free kits is a policy decision. Hence, a writ petition is not maintainable.

It was further pointed out that the petitioners were not legally entitled to claim commission for the same since they were supplied with kits at the doorstep. They only had to distribute the same. 

"During difficult times, all agencies including Government servants, came forward giving physical and other supports to aid the Government in its Herculean efforts to keep the pandemic situation under control,"  reads the counter affidavit.   

The Court noted that distribution of free food-kits undertaken by the Government during the Covid-19 pandemic stands on a different footing than the 2018 Order. Therefore, it was held that the ARDs had no legal right to claim commission prescribed under the 2018 Government Order. 

Moreover, it was found that the Government would not be justified in denying declared commission to the ARDs in view of the principles of estoppel. 

Accordingly, the State was directed to disburse arrears of commission, if any, payable to the petitioners for distribution of Covid-19 free food-kits and Onam Kits at the rates specified in 2020 and 2021 Orders within two months.

Case Title: P.A. Noushad v. State of Kerala & Ors.

Citation: 2022 LiveLaw (Ker) 57

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