Bangalore: The Karnataka High Court today (July 12, 2004) ordered that 8,000 metric tonnes of rice seized by the Food Department officials suspecting its illegal export be returned to the consignment owner after rejecting the State Government's plea for its custody.

Justice S R Bannurmath while allowing a criminal revision petition filed by M/S Sharp Menthol India Ltd of New Delhi, a registered company engaged in business of rice procurement and export, set aside the trial court judge order of June 24 that the stocks be auctioned and proceeds deposited in the court.

The judge also dismissed the petition filed by the State Government seeking the custody of the consignment on the ground that the rice would be used for the purpose of public distribution system under schemes including Rozgar Yojana and Food for Work.

The Food and Civil Supplies Department in a raid on the godowns of Mangalore Port Trust on May 23 seized rice worth Rs 4.80 Crore stored in plastic bags, suspecting that the rice meant for food for work was being illegally exported.

The Panambur Police registered cases against the forwarding agents under various provisions of the IPC and Trial Court ordered that the rice be auctioned and proceeds deposited, after rejecting both the applications filed by the New Delhi-based firm and the Government praying for the custody of the stocks stating that if allowed to be stored there, it would perish.

Justice Bannurmath after hearing the counsels for both parties ordered the rice be returned to Sharp Menthol India, subject to it furnishing a bank guarantee for Rs Six Crore and two sureties and a bond for Rs Five Crore to the trial court.

The Judge also ordered that the petitioner shall not claim any equity in case it fails in the Trial Court.

After the scam in export of rice meant for food for work surfaced, the Government has ordered a probe by the Corps of Detectives (COD).