Judgement H. L. GOKHALE, C.J. :- Heard Shri Bharatji Agarwal, learned Senior Advocate and Shri Vivek Chaudhary for the petitioner. Mr. S. K. Mishra appears for respondent No. 1. Mr. S. P. Kesarwani, learned Additional Chief Standing Counsel for the State of U. P. appears for respondent Nos. 2 to 6 and Mr. Ravindra Singh, appears for the Co-operative Cane Development Union - Intervener. 2. The petitioner is a limited Company manufacturing sugar and is situated in District Moradabad. The petition is filed through its Director Shri Gaurav Dewan. The first respondent to the petition is the Central Government through its Finance Secretary. Respondent No. 2 is the State of U. P., through the Chief Secretary. Respondent No. 3 is the Principal Secretary, Sugar Industry and Cane Development of the State Government. Respondent No. 4 is the Cane Commissioner of the State and respondent Nos. 5 and 6 are District Magistrate and the Tahsildar, Moradabad. 3. (i) The petition originally filed, seeks a writ of mandamus directing the first respondent - Union of India, to modify its scheme of loan finance and to exclude the necessity of obtaining a guarantee from the State Government for the NPA Units as according to the petitioner, it is superfluous. (ii) The second prayer is to issue a writ of mandamus to the State Government to quash and set aside its order dated 5-4-2008, whereby the State Government has declined to give any guarantee to the petitioner for the sugarcane price that it has sought. (iii) The third prayer to the petition is to seek a direction to the second respondent-the State Government, to issue a guarantee in that behalf. 4. The petition is rather sketchily drafted, but as the facts have come on record from the subsequent pleadings, they can be stated shortly as follows :- There is a dispute between the sugar manufacturing companies and the cane growers with respect to the price to be paid for the sugarcane for the years 2006-2007 and 2007-2008. Under the Essential Commodities Act, the Central Government has promulgated the Sugarcane Control Order, 1966 and under Clause (3) of that Order, it fixes the Statutory Minimum Price, shortly described as SMP. The State Government has passed an Enactment, known as the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, whereunder the State Government declares the State Advised Price, shortly described as SAP. The State Government has passed an Enactment, known as the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, whereunder the State Government declares the State Advised Price, shortly described as SAP. The legality of this Act has been upheld by the Apex Court in U. P. Co-operative Cane Unions Federations v. West U. P. Sugar Mills Association and Ors., reported in (2004) 5 SCC 430 : (2004 All LJ 2483). 5. As far as these two years are concerned, in 2006-2007, the SMP was declared at Rs. 84.50 per quintal, whereas the SAP was fixed between Rs. 120/- and 130/- depending upon the quality of the sugarcane. This led to litigation between the parties and ultimately, under the orders passed by the Apex Court on 27-2-2008 in Special Leave Petition No. 2248 of 2008 between Kisan Mazdoor Sangathan v. Basti Sugar Mills Co. Ltd. and Ors., following payments were directed to be made :- 1. For the declined unsuitable variety -Rs. 115/- per quintal 2. For the general variety -Rs. 118/- per quintal 3. For the early variety - Rs. 123/- per quintal The payment was to be made within six weeks from the date of that order and the factories, which had been closed for non-payment were permitted to be opened subject to filing of the undertaking that the amount will be paid within the stipulated time. No recovery charges or interest for the delayed payment was to be paid at this stage. This is an interim order and the Special Leave Petition is yet to be heard. 6. As far as 2007-2008 is concerned, the Lucknow Bench of the Allahabad High Court fixed the SAP at Rs. 110/- per quintal and in an appeal to the Apex Court, the Apex Court directed that the rate fixed by the Lucknow Bench for 2007-2008 will be applicable. This was by virtue of the Supreme Court order dated 15th May, 2008 passed in Special Leave Petition No. 25361 of 2007, State of U. P. v. Basti Sugar Mills and Ors. (Now, the petition in the Lucknow Bench has been disposed of finally on 7-7-2008 and the SAP has been fixed at Rs. 125/- per quintal. It is to be paid within two months from the date of the order). 7. (Now, the petition in the Lucknow Bench has been disposed of finally on 7-7-2008 and the SAP has been fixed at Rs. 125/- per quintal. It is to be paid within two months from the date of the order). 7. The case of the petitioner is that after the present petition was filed on 10-6-2008, a recovery certificate was issued on 14-6-2008 by the Cane Commissioner for recovery of an amount of about Rs. 15.68 crores and, therefore, by amendment, prayer clause (a) is added to quash and set aside this certificate. It has been submitted that the petitioner has made the payment for the years 2006-2007, (though there is a dispute about it) and for the years 2007-2008 also, part of the amount has been paid, but part remains. 8. In the counter affidavit filed on 7-8-2008 on behalf of the State Government by one Sanjay Gupta, District Cane Officer, affirmed on 6th August, 2008, the recovery certificate has been defended. It has been pointed out in paragraph L that payment for sugarcane supply between 1-3-2008 to 21-3-2008 appears to have been made, but it is further stated that payment has been made to give an impression to the farmers that the sugarcane price has been paid so as to get more supply of the sugarcane. 9. The petitioner has moved an interim application restraining the respondents from taking steps to recover cane dues for these two years. They are praying that no coercive measure be taken to recover this amount. 10. As far as the mandamus to the Union of India to modify the scheme framed by it on 7th December, 2007 is concerned, the scheme is defended by one Shri S. K. Condon, Deputy Secretary, Government of India, Department of Food and Public Distribution, Government by affirming the counter affidavit on 30th July, 2008. He has pointed out that the scheme was necessary because during these two years, there was excess production of sugar. In order to ensure that the high production of sugar and resultant decline in sugar prices does not lead to mounting of cane price arrears, the Central Government took measures to help the sugar industry and sugarcane farmers. He has pointed out that the scheme was necessary because during these two years, there was excess production of sugar. In order to ensure that the high production of sugar and resultant decline in sugar prices does not lead to mounting of cane price arrears, the Central Government took measures to help the sugar industry and sugarcane farmers. It is categorically stated in paragraph 15 that the scheme is made to clear the cane price arrears relating to SMP only and the Central Government has specifically written a letter to the State Governments on 2-1-2008 advising them to draw up their schemes in State budgets to enable the sugar factories to pay the differential cane price so that the farmers get the SAP. In paragraph 10 it is stated that under the Central Government scheme, the loan was to be granted equivalent to the notional Central Excise Duty payable on total production of sugar. Even as far as the NPA Units are concerned, it is stated in paragraph 12 that for loans to pay SMP, they will have to obtain guarantees from the State Government and then it is stated that it would have been unfair and financially disastrous to ask the Banks to grant fresh loans to NPA Units without the guarantee of the State Government. 11. The second prayer of the petition is to set aside the order dated 5-4-2008 issued by the State Government declining to give guarantee. This is defended by the State Government through the affidavit affirmed by Shri Sanjay Gupta, District Cane Officer. The relevant letter of the State Government states that under Article 293 (1) of the Constitution of India, it is not possible for the State Government to give guarantees to private institutions. 12. We have noted the pleas of the petitioner and the replies of the Central Government as well as by the State Government on the first two prayers. We have heard the counsel for all the parties. From the scheme of the Central Government, it is clear that the scheme is meant only for SMP and if the Unit is a NAP Unit, guarantee of the State Government is sought. Similarly, as far as the State Governments order dated 5th April, 2008 is concerned, the State Government has relied upon Article, 293 (1) and stated that it cannot give any guarantee from its Consolidated Fund for the NPA Units. Similarly, as far as the State Governments order dated 5th April, 2008 is concerned, the State Government has relied upon Article, 293 (1) and stated that it cannot give any guarantee from its Consolidated Fund for the NPA Units. What the petitioner wants is the relaxation of the condition of the Central Government and a loan from the State Government to pay the difference between the SAP and SMP. These are policy matters and it is for the Central Government and the State Governments to decide and that apart, we have not been pointed out anything improper, irrational or unjustified or illegal in the policy or the stand that both the Governments have taken nor do we find any infirmity therein. These prayers, therefore, cannot be maintainable. 13. It was submitted on behalf of the petitioner that the amount payable as of now is something over Rs. 10 crores and that the petitioner should be given time until the end of the October, to clear off these arrears. it was submitted that the petitioner would create charge on the agricultural land of the Director Shri Gaurav Dewan to protect the interest of the farmers. It was submitted that by the end of October, the new crushing season would have started and from the sale of the molasses and other by-products, these arrears would be cleared. The counsel for the farmers Union disputed that the liability was just about Rs. 10 crores. In the intervention application filed on 4th August, 2008, a detailed chart was annexed and it was stated that the amounts due on various counts, including commission and interest, came to Rs. 18.56 crores. It was accepted that an amount of Rs. 1.08 crores has been paid in the meanwhile, which left a balance of about Rs. 17.50 crores. The counsel for the farmers submitted that the arrears must be cleared before the next season starts and not one month after the starting of the season because that will lead to further liabilities. In the circumstances, there was no possibility of any understanding being arrived at between the parties. 14. Lastly, the submission of the petitioner is that a reference has been registered under the Sick Industrial Companies (Special Provision) Act, 1985, for revival of the petitioner Company. The same is registered on 3-2-2005. In the circumstances, there was no possibility of any understanding being arrived at between the parties. 14. Lastly, the submission of the petitioner is that a reference has been registered under the Sick Industrial Companies (Special Provision) Act, 1985, for revival of the petitioner Company. The same is registered on 3-2-2005. A draft rehabilitation scheme has been framed on 21st April, 2006 and operating agency is appointed on 7-2-2007. The Allahabad Bank is this operating agency. It is submitted that the petitioner has been paying amounts from time to time but there should be no coercive measure. Now, two F.I.R.s have been registered - one on 16-6-2008 and the other on 30-6-2008. It is submitted that these coercive measures be injuncted in view of the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. 15. Mr. Agarwal, learned Senior Advocate, appearing for the petitioner, relied upon the judgment of the Apex Court in Deputy Commercial Tax Officer and Ann v. Corromandal Pharmaceuticals and Anr., (1997) 10 SCC 649 : ( AIR 1997 SC 2027 ). That was a case where a scheme for rehabilitation of the respondent Company had been brought into force on 19-11-1990 and was modified on 29-12-1993. The appellants were pressing to recover the sales tax dues for the assessment years 1992-93 and 1993-94, and the assessment orders were passed on 3-1-1994 and in 1995 long after the scheme was sanctioned on 19th November, 1990. The respondents relied upon two judgments of the Apex Court in Gram Panchayat and Anr. v. Shree Vallabh Glass Works Ltd. and Ors., (1990) 2 SCC 440 : ( AIR 1990 SC 1017 ) and Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. and Anr., reported in (1993) 2 SCC 144 : (1993 AIR SCW 991). It was canvassed on behalf of the petitioner that those judgments were quite distinguishable on facts since in both matters, the amount sought to be claimed were prior amounts. It was submitted that Section 22 of the Act 1985 should be confined to matters included in pre-package state of affairs only. The Apex Court in the case of Deputy Commercial Tax Officer ( AIR 1997 SC 2027 ) (Supra), in paragraph 14 held as under : "The situation which has arisen in this case seems to be rather exceptional. It was submitted that Section 22 of the Act 1985 should be confined to matters included in pre-package state of affairs only. The Apex Court in the case of Deputy Commercial Tax Officer ( AIR 1997 SC 2027 ) (Supra), in paragraph 14 held as under : "The situation which has arisen in this case seems to be rather exceptional. The issue that has arisen in this appeal did not arise for consideration in two cases decided by this Court in Gram Panchayat v. Shree Vallabh Glass Works Ltd. ( AIR 1990 SC 1017 ) and Maharashstra Tubes Ltd. v. State Industrial and Investment Corpn. of Maharashstra Ltd. (1993 AIR SCW 991). It does not appear from the above two decisions of this Court nor from the decisions of the various High Courts brought to our notice that in any one of them, the liability of the sick company dealt with therein itself arose, for the first time after the date of sanctioned scheme. At any rate, in none of those cases, a situation arose whereby the sick industrial units was enabled to collect tax due to the Revenue from the customers after the "sanctioned scheme" but the sick unit simply folded its hands and declined to pay it over to the Revenue, for which proceedings for recovery, had to be taken. The two decisions of this Court as also the decisions of High Courts brought to our notice are, therefore, distinguishable. They will not apply to a situation as has arisen in this case. We are, therefore, of the opinion that Section 22 (1) should be read down or understood as contended by the Revenue. The decision to the contrary by the High Court is unreasonable and unsustainable. We set aside the judgment of the High Court and allow this appeal. There shall be no order as to costs." It is, therefore, clear that the judgment does not help the petitioner. 16. Mr. Agarwal has submitted that the scheme has not been finalized as yet and therefore, the liabilities accruing in the meanwhile would be protected under Section 22 of the Sick Industrial Companies (Special Provisions) Act. He relied upon another judgment of the Apex Court in Jai Engineering Works Ltd. v. Industry Facilitation Council and Anr., reported in (2006) 8 SCC 677 : ( AIR 2006 SC 3252 ). He relied upon another judgment of the Apex Court in Jai Engineering Works Ltd. v. Industry Facilitation Council and Anr., reported in (2006) 8 SCC 677 : ( AIR 2006 SC 3252 ). In that case, the respondent No. 2 was Small Scale Industry, manufacturing copper wires. It had supplied its products to the appellants during the period of 28th December, 1996 to 3-6-2000. The appellant Company had become sick and reference had been made to BIFR on 8th April, 1994. The rehabilitation scheme was, however, framed but it was declared to have failed and another scheme was sanctioned on 8-4-2003. The respondent No. 2 had filed a claim before the Industrial Facilitation Council under the provisions of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. The Council had given an award and that award was sought to be executed. The Apex Court noted that the award made in favour of the respondent No. 2 had found place in the category of dormant creditors in the scheme of rehabilitation. The Court, therefore, held that since the award was included in the scheme, Section 22 of the SICA would get attracted. 17. The Apex Court referred to the judgment in Corromandals case : ( AIR 1997 SC 2027 ) (supra) and noted that it had categorically opined therein that there cannot be any impediment in the enforcement of the scheme. Section 22 provided for a safeguard against impediment that is likely to be caused in the implementation of the scheme. In the present case, Mr. Kesarwani appearing for the State pointed out from the order of BIFR dated 7-2-2007 that when the operating agency was appointed, the BIFR had specifically laid down that the cut-off date of the scheme shall be taken as 31st March, 2007. He, therefore, submitted that in any case, so far as the sugarcane purchased during 2007-2008 is concerned, it would be outside the scheme to be framed by the BIFR. 18. In our view, the proposition laid down by the Apex Court in Jay Engineerings case ( AIR 2006 SC 3252 ) are laid down in the circumstances of that particular case. The rehabilitation scheme therein was sanctioned on 8th April, 2003. The supply made by respondent No. 2 was a prior supply and was made a part of the scheme of rehabilitation. The rehabilitation scheme therein was sanctioned on 8th April, 2003. The supply made by respondent No. 2 was a prior supply and was made a part of the scheme of rehabilitation. That being so, there could not be any order of execution for the same. In the instant case, the amounts claimed are essential for the years 2007-2008 and subsequent to the cut-off date and, therefore, the petitioners cannot seek the protection of Section 22 to deny the claim for the purchases made. 19. In the instant case, it has been pointed out in paragraph H of the counter affidavit of Sanjay Gupta, of the State Government that in paragraph 13 of the writ petition, the petitioner has contended that the petitioner company is running successfully every year. These are dues, which have arisen due to functioning of this company during the pendency of the proceedings before the BIFR. What is sought by the farmers is that the amounts for the sugarcane that they had sold be paid. Under the Sugarcane Control Order, 1966 operating in Uttar Pradesh, if a sugarcane factory is functioning in an area, the farmers are bound to supply sugarcane to the particular factory, and under Order 3(3-A) thereof, the factory has to make the payment within 14 days of the delivery failing which 15% interest per annum is payable for the period of delay. If the sugarcane is purchased, the Company cannot turn back and say that it cannot pay and that the farmers may go to BIFR. 20. Mr. Ravindra Singh has drawn our attention to another judgment of the Apex Court recently rendered in Criminal Appeal No. 845-846 of 2008, Southern Steel Ltd. and Ors. v. Jindal Vijainagar Steel Ltd., decided on 8-5-2008 (reported in 2008 AIR SCW 5294). In that matter, purchases were made by the appellants from the respondents after the appellant company was declared sick, the cheques given were bounced and proceedings under Section 138 of the Negotiable Instruments Act, were initiated. The Apex Court held that when purchase orders were entered into and purchases were made with full knowledge of the proceedings that the Company was declared sick under the SICA, the appellants gave an impression to the respondent Company that the outstanding dues towards the purchase would be cleared. In such a situation, the Apex Court held that the benefit of SICA could not be availed of. In such a situation, the Apex Court held that the benefit of SICA could not be availed of. This judgment refers to and in tune with the law laid down by the Apex Court in BSI Ltd. and Anr. v. Gift Holdings Pvt. Ltd. and Anr., (2000) 2 SCC 737 : ( AIR 2000 SC 926 ) and Kusum Ingots and Alloys Ltd. v. Pennar Peterson Securities Ltd. and Ors., (2000) 2 SCC 745 : ( AIR 2000 SC 954 ) where the Apex Court has taken the view that the protection of Section 22 of the Act 1985 is available only for suits or proceedings of the like manner and not against a criminal prosecution. 21. Similar has been the view with respect to the wages of workmen in a judgment rendered by a learned single Judge of the Bombay High Court (Justice B. N. Srikrishna, as His Lordship then was in that Court) that if the Company was working during the pendency of the reference, the wages of the workmen could not be denied. That view has been taken by the learned single Judge in P. B. Tawde v. Hes Ltd., 1995 LIC 2200. 22. In M/s. Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras reported in AIR 1992 SC 1439 , the Apex Court took the view that Section 22 did not bar eviction proceedings under the Karnataka Rent Control Act. They were held not to be amounting to the kind of proceedings, which are covered under Section 22. 23. In U. P. State Sugar Corporation v. M/s. Sumac International Ltd., AIR 1997 SC 1644 : (1997 All LJ 638) the question involved was with respect to invocation of unconditional bank guarantee. The Court held that mere fact of the pendency of a reference against a party under the Sick Industrial Companies (Special Provisions Act, was not sufficient to grant an injunction against the invocation of a bank guarantee. 24. Thus, as can be seen the fact-situation of every case has got to be seen. Where an industrial company continues its activities in spite of a reference pending before the BIFR and as seen in the instant case, the liabilities are incurred subsequent to the cut-off date, those liabilities will have to be honoured by the concerned industrial company. 24. Thus, as can be seen the fact-situation of every case has got to be seen. Where an industrial company continues its activities in spite of a reference pending before the BIFR and as seen in the instant case, the liabilities are incurred subsequent to the cut-off date, those liabilities will have to be honoured by the concerned industrial company. These liabilities will not become a part of the scheme or of the package of rehabilitation. Sugarcane is being purchased as a raw material subsequent to the cut-off date, the price there for will have to be paid. If workers are engaged to work in the factory subsequent to this cut-off date, obviously their wages will have to be paid. There cannot be a escape therefrom on the ground of Section 22 of the Sick Industrial Companies Act. The prayer for preventing the recovery of the amounts of sugarcane by coercive method will, therefore, have to be rejected. 25. For the reasons stated hereinabove, the petition is dismissed with cost. Petition dismissed.