MP High Court Issues Notice To State On Plea For Independent Probe Into Alleged ₹43.03 Crore Paddy/ Rice Scam

The Madhya Pradesh High Court issued notice to the Government on a public interest litigation seeking a state-level inquiry into the alleged Paddy Scam of ₹43.03 crores. Per the petition, the rice millers and transporters, in collusion with the government officials, illegally sold the sanctioned rice in the open market using fabricated documents.

During the hearing, the State's counsel submitted that action had already been initiated and the matter was under primary consideration. Stating that an FIR has been filed, he sought time to file an affidavit.

Recording the State's submission, the division bench of Chief Justice Sanjeev Sachdeva and Justice Vinay Saraf ordered,

“Issue notice. Notice Accepted by learned council appearing for respondents no 1-4. Notice be issued to respondent no 5. Returnable in four weeks”.

For context, the Civil Supply Corporation is empowered as a procurement agency to supervise the supply chain of rice from the farmers to rice millers and subsequently to the consumers under the Public Distribution Scheme.

The said process is State-funded and governed by the milling policy and Standard Operating Procedure. After several security checks, the Corporation issues a release order in favour of a rice miller. The entire process from issuance of Release Orders to the final distribution to the consumers also involves multiple checks.

According to the published milling policy and SOP circulated on November 22, 2024, the rice millers must obtain permission from the Corporation, especially in the case of inter-state procurement and transportation. Rice millers are required to deposit a security as prescribed under clause 7.2 of the policy.

Rice millers are also required to approach the Corporation's district office and execute an agreement regarding the procurement, milling and deposition of the rice at the notified place within the specified period.

The rice millers are then required to deposit another security before being granted permission to procure rice. The Release Orders, listing the approved quantity for procurement, are issued by the Corporation. The rice millers, before issuance of their release order, do not have any information about the location of the procurement centre that would be allotted.

The information and particulars of the paddy challan truck are also transferred to the computer operator appointed by the MP Warehousing and Logistic Corporation to update the same in the portal. 

Allegations

The petition, however, states that due to a lack of checking and collusion between the rice millers and transporters, the paddy does not reach the required location. The same is allegedly misused and sold in open market using fabricated documents.

The Jabalpur District Administration discovered the said illegality, and the Collector constituted a committee for inquiry. It was discovered that more than ₹43.03 crores were embezzled, involving serious allegations against the Corporation's officers.

An FIR was filed, and the State issued a direction to verify the transport of the session 2024-25. However, the said direction was not followed. It also referred to a news published in the daily papers regarding the rise in paddy smuggling in Balaghat district due to failure of GPS norms.

The petition sought an independent inquiry across the state, claiming that it could be part of an interstate scam.

The case was listed for November 12, 2025.

Case Title: Nagrik Upbhokta Margdarshak Manch v State [WP 33728/2025]

For Petitioner: Advocate Dinesh Kumar Upadhyay, Manish Ku.Trivedi, Shanti Tiwari, Ashish Kumar Agrawal, Mohammad Sazid, Shivam Goutam, Saket Upadhyay

Click here to read/download the Order