Jagatsinghpur Sugarcane Growers and etc. v. Union of India
2005-04-06
L.MOHAPATRA
body2005
DigiLaw.ai
Judgement ORDER :- Sugarcane growers of different places have filed the aforesaid writ applications for a declaration that para-C of sub-clause(1) of Clause-6 of the Sugarcane Control Order, 1966 is violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India and also for a declaration that the order in Annexure-1 and letter in Annexure-2 are ultra vires of the provisions of Articles 14, 19(1)(g) and 300-A of the Constitution of India and also for issuance of a writ permitting the petitioners to harvest and sell their sugarcane to any sugar factory of their choice. 2. That at the time of argument Shri Sanjit Mohanty, learned senior counsel appearing for the petitioners in all the four writ applications submitted that the petitioners do not press prayer Nos. 1 and 2 and only seek for a direction from the Court permitting the sugarcane growers to harvest and sell to any sugar factory of their choice without any restriction being put under the provisions of Clause-6 of Sugarcane (Control) Order, 1966. In normal course in view of the prayers 1 and 2 the writ application should have been heard by a Division Bench, but because of submission of the learned counsel for the petitioner confining his case to prayer No.3 these cases have been taken up by this Court for hearing. 3. Case of the petitioners in all the four cases being similar and relief claimed being similar, they were heard together and are disposed of in a common judgment. The petitioner in each case represents the farmers who grow sugarcane in the undivided Cuttack district. Their case is that generally sugarcane is a tropical crop grown in major parts of India and the cultivation starts from the month of October. Normally sugarcane take 11 to 12 months to mature for the purpose of harvesting and sale. The further case of the petitioners is that the existence as well as development of sugarcane in undivided Cuttack district was because of M/s. Sakthi Sugars Limited located in the district of Dhenkanal, who has been arrayed as opposite party No.3. The said Sakthi Sugars Limited for establishing their sugar factory at Dhenkanal has started its cane development activities in and around border areas of Dhenkanal and Angul districts during the year 1991-1992.
The said Sakthi Sugars Limited for establishing their sugar factory at Dhenkanal has started its cane development activities in and around border areas of Dhenkanal and Angul districts during the year 1991-1992. The farmers who are now engaged in growing sugarcane were earlier depending on one paddy crop in a year and because of encouragement and technical know-how given by M/s. Sakthi Sugars Limited they decided to take up alternative cash crop for better financial stability and accordingly started growing sugarcane. It is also case of the petitioners that under the technical guidance of M/s. Sakthi Sugars Limited the first harvest gave the farmers a substantial profit as a result of which the farmers started sugarcane cultivation in a larger scale from 1993-94. The petitioners also state in their writ applications that the farmers are cultivating sugarcane from the year 2003-04 by taking financial, technical and other inputs like seeds, fertilizers, chemicals and other irrigational infrastructure requirement from M/s. Sakthi Sugars Limited on the understanding that they would supply the crop to it. When the matter stood thus the Government of Orissa in the Department of Agriculture issued a notification dated 16-2-2004 reserving areas for different sugarcane factories operating in the State in exercise of powers under sub-clause (1) of Clause 6 of Sugarcane (Control) Order, 1966 read with notification of the Government of India in the Ministry of Food, Agriculture Community Development and Co-operation dated 16-7-1966. Though the petitioners do not question the powers of the State Government in reserving areas for different sugarcane factories operating within the State, their case is that even on the face of the said provision they are entitled to supply sugarcane to any factory of their choice. The order in Annexure-2 has been passed by the Principal Secretary to Government in the Department of Agriculture directing M/s. Sakthi Sugars Limited to stop procurement of sugarcane from those areas which are exclusively reserved for M/s. Baramba Cooperative Sugar Industries Limited. This has been challenged on the ground that because of such a restriction put by the State Government, M/s. Sakthi Sugars Limited is not in position to purchase sugarcane from the farmers. 4.
This has been challenged on the ground that because of such a restriction put by the State Government, M/s. Sakthi Sugars Limited is not in position to purchase sugarcane from the farmers. 4. Shri Sanjit Mohanty, learned senior advocate appearing for the petitioners referring to Clause 6 of the Sugarcane (Control) Order, 1966 submitted that the State Government has power to reserve any area where sugarcane is grown for a factory having regard to the crushing capacity of the factory and availability of sugarcane in the reserved area as well as need for production of sugarcane to enable the factory to purchase the quantity of sugarcane required by it. It was further submitted that mere reservation is not enough and the State Government has to determine the quantity of sugarcane which a factory requires for crushing in a given year and thereafter fix quantity or percentage of sugarcane that have to be supplied to such factory by the sugarcane growers from the reserve area either individually or as cooperative society. After fixation of the quantity or percentage of sugarcane, the sugarcane growers or the cooperative society, as the case may be, has to enter into an agreement for supply or purchase of sugarcane with the factory for which the area has been reserved and only after execution of such agreement reservation of area becomes effective. According to Sri Mohanty, learned senior counsel appearing for the petitioners so long as the provisions contained in Clause 6(1)(b)(c) and (d) have not been complied with, the petitioners are at liberty to sell sugarcane grown by them to any factory of their choice. Therefore, the restrictions put on opposite party No.3 is an indirect violation of Clause 6 of the Sugarcane (Control) Order, 1966. Apart from the above, it was also contended by the learned counsel for the petitioners that under Article 19 of the Constitution of India the petitioners are protected and they are free to exercise their right to carry on any business though it is open for the State under Article 19(2) of the Constitution of India to impose reasonable restriction on exercise of such right by making any law. 5.
5. Learned Advocate-General appearing on behalf of the State, on the other hand, submitted that a reading of Clause 6 of the Sugarcane (Control) Order, 1966 would clearly indicate that sub-clauses (b), (c) and (d) of Clause-6(1) are not required to be complied with so long as the State Government is not satisfied that even after supply of sugarcane to a particular factory from reserved area, there is still surplus sugarcane available in the reserved area for sale to any other factory. According to the learned Advocate General once a particular area is reserved for particular factory, growers of that area cannot sell sugarcane to any other factory. It was further contended by the learned Advocate-General that on the face of the notification dated 16-2-2004 reserving areas for different sugar factories, the opposite party No.3 started purchasing sugarcane from areas reserved for Baramba Co-operative Sugar Industries Limited, as a result of which the order in Annexure-2 was passed to prevent supply of sugarcane to any other factory from the reserved area for Baramba Co-operative Sugar Industries Limited. Shri Sarangi, learned counsel appearing for the Baramba Co-operative Sugar Industries Limited referring to the counter filed by the State submitted that requirement of Baramba Co-operative Sugar Industries Limited is such that the areas reserved for the said factory may not be sufficient to meet the requirement. In course of argument Shri Sarangi also drew attention of the Court to several documents to show the production made by the said factory in between 13-12-2004 to 31-1-2005. 6. In order to appreciate the contention of the learned counsel for the petitioners that mere notification under Clause 6(1)(a) of Sugarcane (Control) Order, 1966 reserving areas for different sugar manufacturing industries does not take away rights of the sugarcane growers to sell to other factories, it is necessary to look into the relevant provisions.
6. In order to appreciate the contention of the learned counsel for the petitioners that mere notification under Clause 6(1)(a) of Sugarcane (Control) Order, 1966 reserving areas for different sugar manufacturing industries does not take away rights of the sugarcane growers to sell to other factories, it is necessary to look into the relevant provisions. Clause 6 of Sugarcane (Control) Order, 1966 is reproduced below : "(1) The Central Government may, by order notified in the Official Gazette,- (a) reserve any area where sugarcane is grown (hereinafter in this clause referred to as reserved area ) for a factory having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it; (b) determine the quantity of sugarcane which a factory will require for crushing any year; (c) fix, with respect to any specified sugarcane grower or sugarcane growers generally in a reserved area, the quantity or percentage of sugarcane grown by such grower or growers, as the case may be, which each such grower by himself, or, if he is a member of a co-operative society of sugarcane growers operating in the reserve area, through such society, shall supply to the factory concerned; (d) direct a sugarcane grower or a sugarcane growers co-operative society, supplying sugarcane to a factory, and the factory concerned to enter into an agreement to supply or purchase, as the case may be, the quantity of sugarcane fixed under paragraph-(c).
(e) direct that no gur (jaggery) or khandasari sugar or sugar shall be manufactured from sugarcane except under and in accordance with the conditions specified in the licence issued in this behalf; (f) prohibit or restrict or otherwise regulate the export of sugarcane from any area (including a reserved area) except under and in accordance with a permit issued in this behalf; (2) Every sugarcane grower, sugarcane growers co-operative society and factory, to whom or to which an order made under paragraph (c) of sub-clause (1) applies, shall be bound to supply or purchase as the case may be, that quantity of sugarcane covered by the agreement entered into the paragraph and any wilful failure on the part of the Sugarcane Grower, Sugarcane Growers Co-operative society or the factory to do so, shall constitute a breach of the provision of this Order: Provided that where the default committed by any Sugarcane Growers Co-operative Society is due to any failure on the part of any sugarcane grower being a member of such society, such society shall not be bound to make supplies of sugarcane to the factory to extent of such default." On bare perusal of the said provision it appears that Central Government (power now delegated to the State Government) may by order notified in the Official Gazette, reserve any area where sugarcane is grown for a factory having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it. Sub-clause (b) prescribes that the State Government shall also determine the quantity of sugarcane which a factory will require for crushing any year. According to the learned Advocate General once a notification is issued reserving any area under sub-clause(a) and quantity of sugarcane required by a factory in a crushing year is determined, there is no need to comply with the provisions contained in clauses (c) and (d) and the sugarcane growers of the reserved area have to supply sugarcane for the factory for which the area has been reserved.
According to the learned Advocate-General, clause (c) and (d) shall come into operation only when there is surplus sugarcane in a reserved area even after meeting requirement of the factory for which the area is reserved and only in such event the State shall allow sugarcane growers to sell their surplus sugarcane to any other factory after compliance of the provisions contained in sub-clause (c) and (d). According to Sri Sanjit Mohanty, learned senior counsel appearing for the petitioners not only a notification is to be made reserving areas but also quantity of sugarcane required by a factory in a given year has to be determined. Only after determination of the quantity responsibility shall be fixed on individual growers of the reserved area or co-operative society of sugarcane growers operating in the reserved area, to sell sugarcane to factory concerned and after fixation of such responsibility the sugarcane growers have to enter into agreement with the concerned factory whereafter the farmers can sell sugarcane to the said factory. 7. From the argument advanced by the learned counsel for both sides it appears that the case of the petitioner is that provision has to be read as a whole whereas the learned Advocate General submitted that certain clauses of the said provision have to be read in isolation. On reading of the entire clause 6 of the Sugarcane (Control) Order, 1966 it appears that a procedure has been laid down in the said provision not only for reservation of area but also for supply/sale of sugarcane. Reservation of area for any factory is done under Clause 6(a) whereas quantum of sugarcane to be supplied to a factory for the purpose of crushing is to be determined and the responsibility shall be fixed on sugarcane growers generally in a reserved area, the quantity or percentage of sugarcane grown by them to be supplied to the factory concerned. Only after responsibility is fixed, the sugarcane growers can enter into an agreement for supply of sugarcane to a particular factory. On bare reading of sub-clause (1) of Clause 6 it appears that a detailed procedure has been prescribed to ensure that a particular factory producing sugar is not deprived of sugarcane. A provision or law has to be read as a whole and not in isolation.
On bare reading of sub-clause (1) of Clause 6 it appears that a detailed procedure has been prescribed to ensure that a particular factory producing sugar is not deprived of sugarcane. A provision or law has to be read as a whole and not in isolation. In sub-clause(1) of Clause 6 the entire procedure has been prescribed and the State Government has to not only notify the reserve areas for a particular factory producing sugar but also do such acts as provided under in the said provision in order to enable the factory to purchase quantity of sugarcane required by it. If the contention of the learned Advocate General that Clause 6(1)(c)(d) are not required to be complied with is accepted then the result will be that after reservation of an area and determination of quantity of sugarcane required by a factory for which reservation has been made, the sugarcane growers have to approach the factory authorities to purchase their sugarcane without any agreement and without knowing what quantity of sugarcane they are supposed to supply individually or collectively through a Co-operative Society. In order to ensure supply of required sugarcane to a factory as well as to ensure that sugarcane growers do not suffer because of such reservation, such provision have been made. I am, therefore, of the view that before asking sugarcane growers to supply sugarcane to a particular factory clause 6(1)(a) to (d) have to be complied with failing which sugarcane growers will be in dark about the quantity of sugarcane they are required to supply to the factory and the prices they are to get under agreement for such supply. The contention of the learned Advocate General may have some application so far as Clause 6(1)(f) is concerned. Only when the required quantity of sugarcane is supplied to a particular factory after reservation of areas if there is surplus sugarcane in the hand of the sugarcane growers, they can export sugarcane but under a permit to be issued in their behalf. I am, therefore, in complete agreement with the learned counsel for the petitioner that steps provided in Clause 6(1)(a) to (d) have to be complied with by the State Government as well as the factory concerned before the sugarcane growers can be asked to supply sugarcane to the concerned factory.
I am, therefore, in complete agreement with the learned counsel for the petitioner that steps provided in Clause 6(1)(a) to (d) have to be complied with by the State Government as well as the factory concerned before the sugarcane growers can be asked to supply sugarcane to the concerned factory. True it is once reservation is made, the sugarcane growers of that area cannot sell sugarcane to any other factory and they can only sell to others provided they are granted permit under Clause 6(1)(f) to do so. 8. So far as current year is concerned, as it appears from the counter affidavit filed by the Baramba Co-operative Sugars Industries Limited production of sugar has already started since December, 2004. Such production could not have been done without supply of sugarcane from reserved area. I am, therefore, of the view that for the current year sugarcane having been already been supplied. This discussion has become academic and may treated as guideline for future. So far as other point regarding power of the State Government to restrict right of the sugarcane growers to sell sugarcane to any factory of their choice is concerned, I am of the view that under Article 19(2)(g) State has the power to impose restriction and there is no dispute about the same as submitted by the learned counsel for the petitioner. Now the question is as to whether restriction put by the State by issuing letter under Annexure 2 is reasonable or not. Undisputedly the areas where the petitioners grow sugarcane have been reserved for Baramba Co-operative Sugar Industries Limited and learned counsel for the petitioner does not dispute that such a restriction is not unreasonable and the same is in accordance with the provisions of the Sugarcane (Control) Order, 1966. So far as right of sale of sugarcane to any factory of the choice of sugarcane growers is concerned, the only provision under which the same can be done is Clause 6(1)(f). Therefore, it cannot be said that the sugarcane growers are totally prohibited from selling sugarcane to any other factory apart from the factory for which their area of operation has been reserved. Only when sugarcane growers have surplus sugarcane in their hands after supply of required quantity to the concerned factory, they can supply the same to any other factory, but in terms of Clause 6(1)(f) of the Sugarcane (Control) Order, 1966. 9.
Only when sugarcane growers have surplus sugarcane in their hands after supply of required quantity to the concerned factory, they can supply the same to any other factory, but in terms of Clause 6(1)(f) of the Sugarcane (Control) Order, 1966. 9. With the aforesaid observations the writ applications are disposed of. Order accordingly.