Hyderabad, April 2026: Over 300 rice millers in Telangana have approached the High Court, alleging that the state government is using coercive methods to recover nearly ₹3,600 crore in dues linked to custom milling operations.
Millers Challenge Government Action in Court
During hearings before the Telangana High Court, millers argued that the government has violated contractual terms and initiated criminal proceedings to pressure them into clearing dues.
Their counsel contended that such actions are unjustified and sought the quashing of criminal cases filed against them.
Dispute Linked to Custom Milled Rice
The case relates to allegations of diversion and misappropriation of paddy supplied for custom milling, dating back to the 2022–23 season.
Millers claimed:
- The government itself instructed them not to mill certain paddy stocks
- Deadlines were allowed to lapse
- No actual financial loss was incurred by the state
Allegations of Misuse of Criminal Proceedings
The petitioners argued that criminal cases are being used as a tool for financial recovery, which they say goes against established legal principles.
They cited Supreme Court rulings stating that criminal proceedings should not be used for recovery of money disputes.
Government Rejects Claims
The state government, however, has opposed the petitions, maintaining that:
- Millers diverted paddy and defaulted on dues
- The delays have impacted public welfare schemes
- Objections regarding quality or supply were not raised earlier
Officials argue that the defaults are serious and cannot be treated merely as contractual disputes.
Arbitration Clause Dispute
Millers also pointed out that the agreements included an arbitration clause for dispute resolution, which was allegedly bypassed when criminal cases were filed.
They claimed that disputes should have been resolved through arbitration rather than legal कार्रवाई.
Court Reserves Order
After hearing arguments from both sides, the High Court has reserved its order, and a final decision is awaited.
