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DWARIKESH SUGAR INDUSTRY LIMITED versus STATE OF U.P. AND OTHERS

High Court of Judicature at Allahabad

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Dwarikesh Sugar Industry Limited v. State Of U.P. And Others - WRIT - C No. 3171 of 2006 [2006] RD-AH 3338 (14 February 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Reserved

Civil Misc. Writ petition No.3171 of 2006

Dwarikesh Sugar Industry Limited

Versus

State of U.P. and others

Connected with

Civil Misc. Writ petition No.3954 of 2006

Upper Ganges Sugar and Industries Limited

Versus

State of U.P. and others

Hon'ble V.K. Shukla, J.

Petitioner, Dwarikesh Sugar Industry Limited, in writ petition No. 3171 of 2006, is a company incorporated under the provisions of Indian Companies Act, 1956, having its registered office at Dwarikesh Nagar, Disrict Bijnor, and has got its factory at Dwarikesh Puram, Bahadurpur, Todarpur, District Bijnor. The said company is engaged in the business of manufacture and sale of sugar, for which purpose factory has been set up, which is new sugar factory at Dwarikesh Puram, Bahadurpur, Todarpur, District Bijnor. Crushing capacity of the said factory is 7500 TCD. In crushing season 2005-06, Cane Commissioner, U.P., Lucknow made reservation order dated 17.10.2005, and in the said reservation order need of the petitioner was assessed at 92 lacs quintals and drawl percentage of 61% was directed to be maintained. Keeping in view the need of petitioner and its drawl percentage reserved/assigned areas were allotted which were likely to yield 150.81 quintals of sugarcane. The said order of reservation was questioned by Upper Ganges Sugar Industries Limited by preferring appeal as provided under Section 15 (4) of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (hereinafter referred to as the Act, 1953) claiming six reserved centres which were part of Afjalgarh Cane Cooperative society and 26 purchase centres which were part of Nadehi Cane Co-operative society. The centres so demanded were as under:

(i) Meerapur North-First (ii) Kadrabad, (iii) Berkhera-First (iv) Berkhera-Second, (v) Jainagar and (v) Bhagtawala-First of Afjalgarh Society and  (i) Mepur Mohanchak, (ii) Kundesar, (iii) Balapur, (iv) Dariyapur-First, (v) Lalapur-First, (vi) Lalapur-Second, (vii) Pepali-First, (viii) Pepali-Second at Madhupuri, (ix) Paindapur, (x) Karanpur-First (xi) Bairampur-First, (xii) Sultanpur Khadar, (xiii) Malakpur Semali, (xiv) Surjan Nagar-First, (xv) Sujan Nagar-Second at Brahmanpur, (xvi) Bahadarnagar, (xviii) Dilari-First, (xviii) Panuwala-First, (xix) Sahaspuri-First, (xx) Razipur Milak-First, (xxi) Madhowala-First, (xxii) Munshiganj-First, (xxiii) Sultanpurdost-First, (xxiv) Kwajapur Dhantala-First (xxv) Asdullapur-First and (xxvi) Karanpur-Second. In the said appeal No.53 of 2005 preferred on behalf of Upper Ganges Sugar and Industries Limited, petitioner submitted reply, and the said appeal has been allowed on 23.12.2005, and thereby two cane purchase centres belonging to Afjalgarh Cane cooperative society and four centres belonging to  Nadehi Cane Cooperative society have been reserved in favour of Upper Ganges Sugar Industries Ltd. At this juncture writ petition No. 3171 of 2006 has been filed.

Counter affidavit has been filed on behalf of Upper Ganges Sugar and Industries Limited, respondent No. 3, contending therein that the statement of facts mentioned in the writ petition are based on incorrect facts and further details have been furnished giving distance of purchase centres in question from the mill of respondent No. 3 as also from the Mills of the petitioner. In paragraph 20 of Appeal No. 53 of 2005 said facts have been mentioned to show the distance of purchase centres from both the mills. Resolution dated 09.02.2005 has also been questioned by contending that neither such resolution was mentioned by the petitioner in reply to the aforesaid appeal nor the  same was produced, and the said material is being placed for the first time before this Court. It has also been contended that the views of Cane Cooperative Societies are submitted before the Cane Commissioner in the form of proposal in the month of July or August each year, and in the present case no such proposal was ever submitted to the Cane Commissioner for the purposes of passing reservation order in January or February of any year i. e. during the currency of the last crushing season. Details have also been set out that in the last crushing season total cane area allotted to answering respondent was 69,788 hectares, and on account of the fact that there are 56 crushers and 537 kolhus in the area allotted to respondent No 3 and also because of the fact that almost 45% of the sugarcane area available  in cane area of answering respondent was diverted to the said khandsari units, huge shortage of sugarcane had been suffered. The answering respondent has contended that they could crush only 140.35 lac quintals of sugarcane on account of non-availability of sugarcane in the allotted area of respondent No. 3. Details have been furnished for crushing season 2004-05. Answering respondent has further contended that shortage of sugarcane faced by them was ignored and instead of allotting additional 62 cane purchase centres demanded in the reservation proposal, Cane Commissioner carved out of the area of the answering respondent 92 purchase centres, which had been continuously reserved  in  favour of answering respondent  for the last four crushing seasons and in order to make good the said taking away of 92 purchase centres  only 23 purchase centres in far away areas were allotted to the answering respondent. Thus, total cane area of answering respondent was reduced from 69,788 to 47,687 hectares. It has also been contended that there is shortage of 63 lac quintals of sugarcane to the answering respondent, as five Cane Cooperative Societies of the area of answering respondent has merely offered 117 lac quintals of sugarcane. It has been further contended that the appellate authority has misdirected itself by not reserving all 32 disputed purchase centres in favour of answering respondent. In this background, it has been contended that these 32 purchase centres ought to have been reserved in favour of answering respondent.

Short counter affidavit has been filed on behalf of respondent No. 4, and it has been contended therein that Dwarikesh Sugar Industries Limited a newly established factory and further the cane growers of the said area are interested in supplying their cane to it on account of geographical situation, road and transport facility.

Rejoinder affidavit has been filed to the counter affidavit of Upper Ganges Sugar and Industries Limited, and it has been contended that distance of 32 cane purchase centres from the sugar mill of respondent No. 3 has been shown through a small bridge over Ramganga river, which is unfit for use of heavy vehicles and transportation of heavy loads of sugarcane, and if road distance is taken into consideration, the distance of these 32 cane purchase centres would be much more from the mill of respondent No. 3 and closer to that of the petitioner. A chart has been appended showing road distance of the centres from the competing sugar factories. It has also been contended that respondents were to purchase sugarcane from these centres, then they would have come up to the factory of the petitioner and transport it back to their factory. In this background, it has been contended that these centres were rightly reserved in favour of petitioner. It has also been contended that distance as indicated by respondent was duly controverted. This fact has also been sought to be reiterated that resolution dated 09.02.2005 was passed by Cane Cooperative Societies. Qua kolhus and crushers, it has been contended that it would affect all parties. It has also been contended that respondent No. 3 failed to purchase sugarcane available in its area, resultantly; the cane growers had no option but to supply their cane to crushers and kolhus. It has been denied that 45% of the sugarcane available in the area of respondent No. 3 is diverted to crushers and kolhus, and the respondent No. 3 has been asked to be put to strict proof thereof. The performance of respondent may further be gauged from the fact. Be that as it may, the petitioner denies that 45% of the sugarcane available in the area of respondent No. 3 is diverted to crushers and kolhus, and the respondent No. 3 has been asked to be put to strict proof thereof. The performance of respondent may further be gauged from the fact that in the crushing season 2002-03 it worked for 185  days and crushed only 164.13 lacs quintal out of the available quantity of 335 lacs quintal. In the crushing season 2003-04 it worked for only 149 days and crushed 143.88 lacs quintals against the available quantity of 326.27 lacs quintal. Similarly in the last crushing season the respondent worked only for 157 days and crushed 140.35 lacs quintal even though the sugar available in the area was approximately 412 lacs quintal. Reference has also been given of bonding policy, and as per the same, it has been contended that each and every individual cane grower is entitled to offer only 85% of the average quantity offered by it for sale in the last crushing season, which is basic quota. Details of such policies have also been mentioned. It has also been contended that despite excess sugarcane available in its area, respondents have never crushed on an average of 140 lac quintals and have never undertaken additional bonding. Allotment of 32 sugarcane purchase centres has been sought to be justified. Petitioner has contended that against total indent issue of 22,23,300 lac quintals , it has been offered to purchase only 3,36,189.75 lac quintals of sugarcane evidencing an indent failure of approximately 85%.

Writ petition No. 3954 of 2006 has been filed by Upper Ganges Sugar and Industries Limited questioning the validity of the same order, which has been questioned in writ petition No. 3171 of 2006, contending therein that appeal no. 53 of 2005 ought to have been allowed in toto and the entire cane centres claimed in the aforementioned appeal ought to have been reserved in its favour. Petitioner in the present writ petition is public limited company engaged in the manufacture and sale of white crystal sugar manufactured from vacuum pan process in its sugar factory situated at P.O. Seohara District Bijnor with crushing capacity at 11,000 TCD. It has been contended that for crushing season 2004-05 demand of sugar mill of petitioner was 198 lac quintals, but Cane Commissioner had fixed the estimated requirement of sugarcane for its factory at 180 lac quintals. In the present crushing season, viz. 2005-06,  the petitioner again demanded 198 lac quintals of sugarcane for its factory through reservation proposal dated 28.07.2005, but the Cane Commissioner fixed the requirement of the petitioner at 180 lac quintals. In the crushing season 2004-05, petitioner could crush only 140.35 lac quintals of sugarcane on account of non-availability of sugarcane in its allotted area. Petitioner has contended that on account of facing acute shortage of sugarcane in the preceding crushing season, petitioner vide its reservation proposal dated 28.07.2005 demanded additional 62 sugarcane purchase centres  in the present crushing season, on the allotment of which petitioner's requirement could be adequately met. Petitioner has contended that in preceding crushing season total cane area allotted to the petitioner was 69,88 hectares, but on account of the fact that there ware 56 crushers and 537 kolhus in the area allotted to the petitioner and also because of the fact that almost 45% of the sugarcane available in the cane area of the petitioner was diverted to the said khandsari units, the petitioner suffered huge shortage of sugarcane. Petitioner has contended that Cane Commissioner while passing order of reservation for crushing season 2005-06 instead of allotting 62 cane purchase centres as demanded by the petitioner in its reservation proposal  to obviate the possibility of shortage of sugarcane, the Cane Commissioner carved out of the area of the petitioner 92 purchase centres, which had continuously been reserved in favour of the petitioner for the last four crushing seasons and to make good the taking away of 92 purchase centres only 23 purchase centres were allotted to the petitioner by the Cane Commissioner by means of order dated 18.10.2005. The cane area of the petitioner which was earlier 69,788 hectares was reduced to 47,687 hectares. It has been contended that major sugarcane area of the petitioner's sugar mill has been diverted in the present crushing season to 3 sugarcane factories and one of them is Dwarikesh Sugar Industries. Petitioner has contended that 32 purchase centres, which were traditionally reserved in favour of petitioner's sugar unit, have been allotted to Dwarikesh Sugar Industries vide reservation order dated 18.10.2005. Petitioner has contended that Rule 22 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954 has been totally ignored and further reference has been given of the report dated 31.10.2005 of the Director, U.P. Sugarcane Research Board, Shahjahanpur in respect of reduction in yield of sugarcane. It has also been asserted that Afjalgarh society has made recommendation in favour of petitioner's sugar mill, and further it has also been contended that there was no proposal from Afjalgarh society for reservation of its centres in favour of Dwarikesh Sugar Industries. It has also been contended that centres, which have been taken away, were never demanded by Dwarikesh Sugar Industries nor were included in its proposal. Details of distance have also been set out.  Petitioner has further contended that in the reservation order the Cane Commissioner has taken average productivity of sugarcane in the area of petitioner's unit at 642.30 quintals per hectares whereas the office of the  Cane Development Board of the District Bijnor by means of letter dated 29.08.2005 had informed the petitioner that average production of sugarcane in the area of the petitioner was only 567 quintals per hectares. The petitioner vide its letter dated 08.09.2005 had intimated to the Cane Commissioner that average productivity of 642.30 quintals per hectare intimated vide letter dated 12.07.2005 was incorrect so far as the area of the petitioner's unit was concerned. According to the figures obtained by  Sugarcane Department of Crop Cutting for the crushing season 2005-06, the figure of average productivity in the area of Cane Development Council, Seohara was only 567.60 quintals per hectare. Thus by calculation of 75 quintals per hectare more in the average productivity, the figure of total productivity of sugarcane would naturally become erroneously much more than the actual figure according to the crop cutting thus, it was requested that while passing the order of reservation, the estimated requirement of the sugar mill of the petitioner should be taken care of on the basis of the average yield of 567 quintals per hectare and not the average yield intimated vide letter dated 12.07.2005. In this background, it has been contended that report dated 29.08.2005 was completely ignored . It has been contended that appellate authority has totally misdirected itself in not deciding the appeal in its correct perspective.

In this writ petition, no counter affidavit has been field  by the parties contending therein that writ petition No.34171 of 2006 be treated and accepted as leading case, an on the basis of pleadings in that writ petition, present writ petition be also heard and decided.

Sri S.P. Gupta, Senior Advocate, assisted by Sri Yashwant Verma, appearing for Dwarikesh Sugar Industries Limited, contended with vehemence that as far as Upper Ganges Sugar and Industries Limited is concerned, its requirement was already met, as such there was no grievance left to be adjudicated. Consequently, there was no scope of preferring appeal and further the appellate authority has not recorded any finding, where as issue had been raised qua production, and  as   no reasons, whatsoever, has been recorded, the order in question  is unjustifiable and unsustainable, and liable to be quashed.

Sri V.B. Upadhyaya, learned Senior Advocate, assisted by Sri V.K. Upadhyaya, learned counsel appearing for Upper Ganges Sugar and industries Limited, on the other hand, contended with vehemence that in the facts of the present case appeal in question ought to have been allowed in toto instead of allowing the same in part, and the authority concerned in the present case has totally misdirected itself inasmuch most relevant issue in regard to productivity has not at all be adjudicated, and further  this fact has also not been adjudicated that there was acute shortage of sugarcane qua Upper Ganges Sugar and Industries Limited, and no reason whatsoever, has come forward for depriving the Upper Ganges Sugar and Industries Limited from the said 26 cane purchase centres, as such writ petition preferred by Upper Ganges Sugar and Industries Limited  is liable to be allowed and writ petition preferred by Dwarikesh Sugar Industries is liable to be dismissed.

Sri Ravindra Singh, Advocate, representing the Cooperative Cane Development Societies before this Court has supported the claim of Dwarikesh Sugar Industries Limited, and has contended that interest of cane growers  would be more served in case cane growers are permitted to supply their sugarcane to Dwarikesh Sugar Industries Limited.

Now on the touchstone of the pleadings and arguments advanced, the impugned passed by the appellate authority is being looked into. A perusal of the impugned order reflects that the appellate authority has noted the fact of the case and thereafter has noted the contentions of respective parties, and thereby has contended that from a perusal of the record, it is reflected that Cane Commissioner in its reservation order dated 17.10.2005 qua Dwarikesh Sugar Industries Limited  on the basis of 61% of drawl has accepted the requirement  of 92 lac quintals of sugarcane and has assigned 150.8 lac quintals of sugarcane, and for this purpose area which has been assigned is 23481 hectares. In its reservation order centres which have been reserved, same comprised of purchase centres falling under Afjalgarh and Nadehi Cane Cooperative Societies, and these cane purchase centres were reserved for Upper Ganges. It has also been noted that both these societies    in the proposal had recommended for giving  these centres to Upper Ganges Sugar and Industries Limited. It has also been noted crushing capacity of Upper Ganges Sugar and Industries Limited is 11000 TCD. The Cane Commissioner in its order dated 18.10.2005 has noted that requirement of the aforementioned sugar mill is 180 lac quintals. Drawl percentage of the said sugar factory in the previous year has been noted at 34%, and in the present year the same has been noted as 59%. This fact has also been mentioned that Cane Commissioner in its reservation order has noted that Upper Ganges Sugar and Industries Limited in the last crushing season had crushed only 140.35 quintals sugarcane, as such keeping in view the requirement of 1`80 lac quintals of sugarcane and 59% drawl  percentage its requirement would be of 105.08 lac quintals of sugarcane, it has been assigned 304.13 lac quintals of sugarcane. In the last crushing season Upper Gangers Sugar and Industries Limited had been allotted 431.97 lac quintals of sugarcane an this year they have been assigned 127 lac quintals of sugarcane. Dwarikesh Sugar Industries Limited has been newly established and a such are in question can be assigned. It has also been noted that pursuant to order passed by Apex Court on 19.09.2005 reasonable allocation has to be made. It has also been mentioned that cane purchase centres which are placed at less distance from Dwarikesh Sugar Industries Limited and in its favour recommendation has been made by Cane Cooperative societies, qua them also while passing order of reservation/assignment has to be kept in mind. Thereafter straightaway order impugned has been passed.

A perusal of the order clearly indicates that in fact, in the facts of the present case, appellate authority has not undertaken any exercise , whatsoever, except for noting down the facts, at no point of time neither the claim of Upper Ganges Sugar and Industries Limited nor the plea set up by Dwarikesh Sugar Industries Limited  has ever been adverted to. Order in itself shows that there is no objective considerations of the issues which were sought to be raised by respective parties . The appellate authority, in fact, has totally misdirected itself by not adverting to the issues which were sought to be raised and no reason, whatsoever, has been assigned as to why the appeal was allowed in part and was not being allowed in toto and why only 6 centres have been taken away. As there is nothing in the order  to suggest that any exercise has been undertaken by the appellate authority except for noting down the facts, in these circumstances and in this background, as appellate authority has failed to address itself on various issues raised in the appeal by the appellant, and which have been sought to be countered by the respondent, as such there is failure on the part of the appellate authority in exercising its authority vested in it by law.

Consequently, both the writ petitions succeed and are allowed. The order dated 23.12.2005 passed by the Appellate Authority is hereby quashed. The matter is remitted back to the Appellate Authority for being decided afresh without being influenced by the order passed on earlier occasion ,within one month from the date of receipt of a certified copy of the judgment. The appellate authority shall advert itself to all the issues which are sought to raised by the parties and proceed to decide the matter by means of reasoned and speaking order.

No order as to costs.

14.02.2006

SRY.


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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