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2017 DIGILAW 602 (ALL)

D. S. M. ASMOLI v. STATE OF U. P.

2017-02-21

MAHESH CHANDRA TRIPATHI

body2017
JUDGMENT Hon’ble Mahesh Chandra Tripathi, J.—M/s. D.S.M. Asmoli, District Shambhal through its Managing Director is before this Court assailing the order dated 16.1.2017 passed by the first respondent i.e. Special Secretary, Sugar Industries and Department of Cane Development, Lucknow/Appellate Authority in Appeal No. 361/2016-17 and for direction to the respondents to permit the petitioner to lift the sugarcane from the centre allotted to it by the order of Cane Commissioner dated 16.11.2016. 2. M/S. Dhampur Sugar Mills Limited is a Company incorporated under the Indian Companies Act. The said company has established an industrial unit namely M/s. D.S.M. Asmoli, District Shambhal for manufacturing sugar through vacuum pan process with the capacity of 9000 TDC (i.e. 90,000 quintals per day). The Cane Commissioner vide his order dated 16.11.2016 passed an order for reserving/assigning cane centres to the petitioner sugar mill. In compliance thereof the petitioner and the Cooperative Cane Development Union Ltd., Amroha executed an agreement in Form ‘C’ on 26.11.2016. As per agreement, the total cane to be supplied to the petitioner was 4.80 lac quintals sugarcane. Similarly third respondent i.e. M/s. Rana Sugar Limited has also established an industrial unit for manufacturing sugar through vacuum process at Belwara, District Moradabad. Aggrieved by the order of Cane Commissioner, the third respondent filed an appeal No. 361/2016-17 before the first respondent. By the impugned order dated 16.1.2017 the first respondent has allowed the appeal in question. The dispute giving rise to the present writ petition pertains to the following sugarcane purchase centres, namely (i) Dhyodi @ Hadipur, (ii) Gulariya, (iii) Ramhat, (iv) Dhanhori Aheer, (v) Husainpur and (vi) Aharoi. 3. Shri Shakti Swarup Nigam, learned counsel for the petitioner has assailed the impugned order on the ground that the Appellate Authority did not take into consideration the distance of the centres in question between the petitioner sugar mill and the sugar mill of third respondent i.e. M/s. Rana Sugar Ltd., Bailwada, District Moradabad. The third respondent had not paid the price of the sugarcane to the cane growers within time and as such, the Appellate Authority should not have interfered with the order passed by the Cane Commissioner in view of Rule 22 of U.P. Sugarcane (Regulation of Sugar and Purchase) Rules, 1954 (Rules of 1954) merely on the basis of assurance given by the third respondent. Even at the time of assignment of centres by the Cane Commissioner and at the stage of appeal, the dues of the sugarcane have not been paid to the farmers by the third respondent. It is claimed that the interest of farmers are paramount and fundamental. He had placed reliance on the letter dated 3.11.2016 sent by the District Magistrate, Amroha to the Cane Commissioner, U.P., Lucknow requesting the Cane Commissioner not to assign any area in favour of the third respondent. The same has also been ignored while passing the order impugned. 4. Shri Shakti Swarup Nigam has also contended that the order impugned is also perverse on the ground that at no point of time the third respondent has developed the assigned centres. The Central Government as well as State Government had taken a policy decision that every sugar mill has to make endeavour for payment of cane price promptly and contrary to the settled policy and as such, the said policy is binding on the Appellate Authority. Without adverting on the said issue the order impugned has been passed. In support of his submission, he has placed his reliance on paras 3, 5, 8(3), 14, 18, 28, 30, 31, 32, 51, 52, 54, 56, 64, 65, 66, 67, 68, 76 and 77 of the judgement passed by this Court in Simbholi Sugars Ltd through its Signatory v. State of U.P. through Principal Secretary, Department of Sugarcane Development, 2010(3) ADJ 628 (LB) and this Court should come for rescue and reprieve to the petitioner. 5. Shri Tarun Agarwal, learned counsel appearing for the third respondent has vehemently contended that U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (in short, Act of 1953) was enacted to secure the maintenance of reasonable supply of sugarcane required by the sugar factories from the producers of sugarcane and in turn to ensure a fair return to the cane growers. The competitive interest of the sugarcane growers and sugar manufacturers have to be protected at the same time. The main purpose of the Act of 1953 is to provide mechanism for reasonable, necessary, sufficient and continuous supply of sugarcane to the sugar factories in the crushing season keeping in mind the interest of the cane growers, the Cane Growers’ Cooperative Societies, the sugar factories and also inter-se interest of the sugar factories. The main purpose of the Act of 1953 is to provide mechanism for reasonable, necessary, sufficient and continuous supply of sugarcane to the sugar factories in the crushing season keeping in mind the interest of the cane growers, the Cane Growers’ Cooperative Societies, the sugar factories and also inter-se interest of the sugar factories. He submits that the scheme of the Act of 1953 with respect to supply and purchase of the Cane finds specific mention in Chapter-III, which provides for determination of estimated quantity of sugarcane and in what manner and by whom the areas would be declared as reserved area or assigned areas besides the manner and procedure to be adopted in doing so. Much emphasis has been placed to Section 12 and Section 15 read with Rules 21 and 22. 6. It is sought to be contended that the estimate prepared under the order of the Cane Commissioner himself under Section 12 of the Act of 1953 has to be adhered to by the Cane Commissioner at the time of passing an order of allotment under Section 15 (1) of the Act of 1953, unless there are exceptional reasons, which might intervene or crop up between the period when the estimate has been published and the reservation order is made under Section 15 (1) (not adversely affected the rights and interest of other sugar factories, cane growers and cane Societies etc.) as well as by the sugar factories. He submits that no doubt the sugar factories cannot raise any grievance against the estimate so prepared at that stage, yet it is always open to the Cane commissioner to allot more reserved area or assign further area if he is satisfied about the necessity of providing more sugarcane to any factory, during the crushing season in accordance with the provisions of the Act of 1953 and Rules of 1954. 7. It has been submitted that in the facts of the present case the estimate worked out under Section 12 was in fact in favour of the third respondent and moreover the same was never challenged before the Prescribed Authority under Section 12 (2) of the Act of 1953. He submits that having estimated the quantity of sugarcane, which may be needed by the respective sugar factory in a particular crushing season, the said estimate becomes basis for providing reserved area or assigned area to a sugar factory. He submits that having estimated the quantity of sugarcane, which may be needed by the respective sugar factory in a particular crushing season, the said estimate becomes basis for providing reserved area or assigned area to a sugar factory. It is for this purpose the occupiers of sugar factories are required under Rule 21 of the Rules of 1954 to indicate to the Cane Commissioner in Form-1 Appendix-III their options for reservation or assignment of sugarcane areas to the sugar factories during the crushing season. The Cane Commissioner after receipt of all such proposals from the sugar factories, thereafter passes an order of reservation/assignment under Section 15 for the purposes of ensuring supply of required quantity of sugarcane as determined under Section 12 (1) to the sugar factory concerned with specific reference guidelines as mentioned in Rule 22. In support of his submission, he has placed reliance on the judgement in Govind Nagar Sugar Ltd. v. State of U.P. and others, 2001 (1) AWC 65 (All). In para-3 of the aforesaid judgement the Court had proceeded to frame questions of law namely (i) whether the estimate of sugarcane as determined under Section 12 of the Act is conclusive and final for the purpose of reservation and assignment of area for purchase of sugarcane by the sugar factory? and (ii) whether there can be an order of joint purchase of sugarcane in favour of two or more sugar factories in respect of one reserved area?. The same has been answered in paras 41 and 42 of the judgment with following effect : “41. The answer to the first question, therefore, is that the estimate prepared under the order of Cane Commissioner himself under Section 12 of the Act has to be adhered to by the Cane Commissioner at the time of passing an order of allotment under Section 15 (1) of the Act, unless there are exceptional reasons which might intervene or crop up between the period when the estimate has been published and the reservation order is made under Section 15 (1) (not adversely affected the rights and interest of other sugar factories, cane growers and cane Societies etc.) as well as by the sugar factories. The sugar factories cannot raise any grievance against the estimate so prepared at that stage, yet it is always open to the Cane Commissioner to allot more reserved area or assign further area if he is satisfied about the necessity of providing more sugarcane to any factory, during the crushing season, in accordance with the observations made above, in accordance with the provisions of the Act and the Rules. 42. So far the question of Joint purchase by two or more than two sugar factories with respect to one reserved area is concerned, it is to be noticed that the Act has been promulgated for the purpose of smooth functioning of the sugar mills so as to give them an opportunity of having a reasonable quantity of sugarcane throughout the crushing season which supply should not be marred by any unhealthy competition and cause of exploitation either by the cane growers or by the Cane Growers Cooperative Societies or by the sugar factory in the vicinity or otherwise. The sugar factories are bound to take the sugarcane from their own reserved area or assigned area and likewise cane growers/Cane Growers’ Cooperative Societies are equally bound to supply the sugarcane to such sugar factories. The question of Joint purchase by two or more than two sugar factories from one reserved area cannot be in consonance with the scheme and object of the Act. In other words, the Act and the Rules, do not envisage reservation or assignment, one particular area in favour of two or more sugar factories.” 8. In the aforesaid circumstances, Shri Tarun Agarwal submits that the estimate prepared under the order of the Cane Commissioner himself under Section 12 of the Act of 1953 has to be adhered by the Cane Commissioner at the time of passing an order of allotment under Section 15 (1) of the Act of 1953 but in arbitrary manner the same has not been adhered by the Cane Commissioner and same has rightly been upset by the Appellate Authority and as such, there is no infirmity or illegality in the order impugned and the writ petition is liable to be dismissed. 9. Shri Ravindra Singh, learned counsel appearing for the fourth respondent submits that the cane growers are the members of the present Society. 9. Shri Ravindra Singh, learned counsel appearing for the fourth respondent submits that the cane growers are the members of the present Society. The Society has been created to supply the sugarcane to the concerned sugar mill and to work for the benefits of its cane growers members. At the very outset, he has submitted that in respect of current crushing season 2016-17, the Committee of Management/Board of Directors of the Cooperative Cane Development Union Ltd., Amroha/fourth respondent vide resolution dated 27.8.2016, have decided for allotment of nine purchase centres namely Hussainpur, Nagalia, Ramhat, Dhansurpur, Dhanauri Ahir, Kankar Sarai, Fatehpur Vishnoi, Daudhi urf Hadipur and Nagalia-B in favour of M/s. Rana Sugar Ltd., Belwara and cane purchase centre Guladia was proposed in favour of M/s. Triveni Engineering Chandanpur and the proposal was sent to the competent authority i.e. the Cane Commissioner, U.P., Lucknow. He further makes submission that either of the sugar mill has not cleared the outstanding cane price in the previous years within 14 days of the delivery of sugarcane at the gate. Admittedly they have not paid the annual interest @15% on the delayed payment. 10. Shri Tarun Agarwal, learned counsel appearing for the third respondent informs the Court that as against 4.8 lac quintals of sugarcane allotted under the reservation order dated 16.11.2016 to the third respondent, 1.5 lac quintals of sugarcane have been lifted by the petitioner before passing the order impugned. He has made a statement that 2.5 lac quintals of sugarcane has been lifted by the third respondent and at present, only 80,000 quintals of sugarcane are to be lifted for the present crushing season. 11. This Court is of the considered opinion that the Appellate Authority has not appreciated the correct facts as has been emerged from the pleadings and as such, the order impugned passed by the Appellate Authority is unsustainable under the present facts and circumstances. However, since this is admitted situation that only 80,000 quintals of sugarcane are to be lifted for the present crushing season in question, no useful purpose would be served in remitting back the matter to the Appellate Authority. 12. The writ petition stands disposed of accordingly.