The Attorney General’s Chambers will be moving to have the Special Organised Crime Unit (SOCU) joined as a party in the $99.6 lawsuit brought against the Guyana Rice Development Board (GRDB) by Essequibo rice miller Arnold Sankar for alleged breach of a paddy supply deal and related costs.
The move comes after Justice Diana Insanally yesterday granted the request of Sankar’s attorneys to strike out an affidavit in answer filed by SOCU, which is not a party to the case.
Sankar’s attorney Anil Nandlall has since questioned the reason for SOCU’s involvement in the matter, while arguing that it has no locus standai or standing as a party to the proceedings.
At yesterday’s in-chambers hearing, head for the SOCU Sidney James was in attendance along with attorneys from the AG’s Chambers, who are representing the GRDB.
The attorneys, however, explained to the Stabroek News that Sankar is currently being investigated by SOCU, but would not go into detail. Attorney Judith Stuart-Adonis, however, noted that the Chambers will be filing for SOCU to be joined as a party to the litigation.
The affidavit in defence to Sankar’s claim was filed some five months late in spite of the court granting the AG’s Chambers several opportunities.
Associate attorneys for Sankar, Manoj Narayan and Rajindra Jaigobin, explained that after instituting their client’s claim against the GRDB on November 7 last, the respondents were to file their responding defence by January 19.
They, however, failed to so do, and sought leave to file by March 2. They again did not file their defence.
It was at this point that Justice Insanally granted a final further leave, with the order that if they failed to file their defence by March 16, judgment would have been entered for the plaintiff.
It was not, however, until April 10 that the AG’s Chambers filed its defence, which by then was out-of-time.
Narayan explained that thereafter, in a strange turn of events, James, who has no standing in the matter, filed an affidavit in answer to the plaintiff’s request to have the late defence struck out.
Ongoing investigations
According to Narayan, counsel for the respondent said that the delay in filing the responding defence was the result of ongoing investigations of Sankar by the SOCU.
Narayan, however, argued that the AG’s Chambers in such a case needed to have filed for “relief from sanctions,” which they failed to do. He explained that the sanction, would have been the court’s order of judgment being entered for the plaintiff once the respondent’s defence was filed out of time.
In this regard, Justice Insanally struck out the affidavit in answer filed by James to the summons Narayan filed to have the responding defence struck out.
In light of the judge’s decision, the AG’s Chambers has asked for leave to file a new responding affidavit, which has to be done by May 15, when the matter comes up for hearing again.
Additionally, on that date, the court will be hearing arguments from attorneys for the plaintiff as to why judgment ought to be entered for their client.
In his statement of claim, Sankar, of the Arnold Sankar and Sons Rice Mill, of Airy Hall Essequibo Coast, said that during the first rice crop of 2015, the GRDB requested that his company purchase as much paddy as was available on the market, at a price of between $3,000 and $3,300 per bag.
He identified the parties to the agreement as then GRDB General Manager Jagnarine Singh, accountant Peter Ramcharran and the Deputy General Manager Madanlall Ramraj.
Sankar swore in his affidavit in support of his lawsuit that the GRDB gave an undertaking to purchase all of the paddy from Sankar and Sons, at a cost of US$490 per metric tonne.
As part performance of their agreement, Sankar said that the GRDB made an advance payment of $60M to his company. After receiving the cash, Sankar noted that he paid by cheque, from the said $60M, to some of his suppliers, under the agreement. He said that this payment was done in the presence of the GRDB’s Singh, Ramcharran and Ramraj.
He, however, said that the advance sum paid by the defendant was inadequate to pay for all the paddy purchased and that the named representatives of the GRDB knew this but still desired the delivery of all the paddy purchased.
Sankar deposed that the GRDB representatives requested that his company fully pay the remainder of the farmers and thereafter promised to repay Arnold Sankar and Sons Rice Mill from the proceeds to be received from the sale of the said paddy by the GRDB.
Relying on this promise made by the GRDB, Sankar said that his company then went ahead and purchased a total of 32,622 bags of paddy, equivalent to 2,121 metric tonnes, at a cost of $90,749,215.
Again relying on the said “warranty, guarantee, promise, undertaking and agreement,” the plaintiff stated in his affidavit that he applied for, and obtained overdraft facilities from the Guyana Bank for Trade and Industry, therefrom paying the unpaid farmers the balance of $30,749,215.
Breached
Sankar asserted that the GRDB then breached the agreement when on May 5 last year, it accepted delivery of only 813 metric tonnes of paddy, valued at $21,447,467, thereby leaving a balance of 1,308 metric tonnes of paddy.
The plaintiff said that his repeated requests to the GRDB to accept delivery of the remaining 1,308 metric tonnes of paddy were futile.
Sankar said that as a result he was forced to sell this remaining amount to C-Rice Inc., at the price of $225 per metric tonne, which was a price far lower than the US$490 per metric tonne to which the GRDB had committed.
The plaintiff said he was forced to sell the paddy for $225 per metric tonne because it was on the verge of spoiling. As a result, Sankar is suing the Rice Board for $99,670,273, which he says Arnold Sankar and Sons Rice Mill suffered in loss and damage by the GRDB’s breach.
This figure comprises $131.3m, the value of the remaining paddy had it been accepted by the GRDB, less the $58.5m received from C-Rice Inc, added to $25.1m expended for the storage of the paddy plus $1.6m in interest paid to GBTI for use of its overdraft facility.
In addition to this sum, Arnold Sankar and Sons Rice Mill Co. is claiming interest at the rate of 6% per annum from the date of filing to the date of judgment; and thereafter at the rate of 4% per annum until fully paid.
The plaintiff company is also claiming costs in the sum $249,363 and such other reliefs as the court may deem just.
