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D.S.M. SUGAR LTD. versus STATE OF U.P. AND OTHERS

High Court of Judicature at Allahabad

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D.S.M. Sugar Ltd. v. State Of U.P. And Others - WRIT - C No. 2737 of 2006 [2006] RD-AH 4564 (27 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 on 30.01.2006

Delivered on 27.02.2006

Civil Misc. Writ Petition No. 2737 of 2006

D.S.M. Sugar Mill, Asmoli, Moradabad

Versus

State of U.P. and others

&

Civil Misc. Writ Petition No. 4620 of 2006

M/s Diwan Sugar Mill Limited, Agwanpur

District Moradabad through its General Manager

Versus

Appellate Authority and others

Hon'ble V.K. Shukla,J.

Civil Misc. Writ Petition No. 2737 of 2006 has been filed by the D.S.M. Sugar Mill, Asmoli, Moradabad questioning the validity of the order dated 15.12.2005 passed by the Appellate Authority while deciding the appeal in exercise of its power vested under Section 15(4) of U.P. Sugar Cane (Regulation of Supply & Purchase) Act 1953 and consequential order dated 03.01.2006 passed by Cane Commissioner.

Civil Misc. Writ Petition No. 4620 of 2006 has been filed by M/s. Diwan Sugar Limited praying therein quashing of the same order dated 15.12.2005 passed by Appellate Authority and further prayer has been made commanding the respondents to fix the drawl percentage of the petitioner equal to other sugar factories of the area.

D.S.M. Sugrar Mills, Asmoli, Moradabad is a limited company duly registered under the companies Act 1956 having its registered office at Bijnore Unit which is run by the aforesaid Company is D.S.M. Sugar Mill, Asmoli, Sambhal, District Moradabad. Said factory is engaged in the manufacturing and sale of while crystal sugar with capacity of 7500 TCD (Tones crushing per day). It has been contended by the petitioner D.S.M Sugar Mill that the requirement qua Divan Sugar Mill was wrongly fixed in the earlier years and same has been rectified with effect from season 2004-05 and as per cruising capacity  Cane Commissioner, U.P. had allocated 13,628 hectare of cane area having cane production of 73.56 lacs quintals. D.S.M. Sugar Mill has contended that for crushing season 2004-05 estimation was made and based on the said estimation cane area 21807 hectare qua estimation yield of 90.00 lacs quintals was assessed. It has been asserted that in the year 2004-05, petitioner was not allotted over reserved area even equal to the estimated requirement as fixed by Cane Commissioner under Section 12 of the Act. Petitioner has contended that four cane purchase center namely Hakimpur-I, Hakimpur-II, Hakimpur-III and Fetehpur Bisnoai were operated by D.S.M Sugar Mill Ltd. upto 2001 but thereafter same were allotted to Divan Sugar Mill, district Moradabad. On account of non-payment of sugar dues, thereafter on 03.12.2004 these four center were allotted to D.S.M. Sugar Mills. Said allotment has been subject matter of challenge in Civil Misc. Writ Petition No. 52420 of 2004 and on 22.12.2004 directives were issued for re deciding the matter and parties were directed to appear on 29.12.2004 and on 30.12.2004 fresh orders were passed and all these four centers were allocated in favour of M/s D.S.M. sugar mills. The order dated 30.12.2004 was again challenged by M/s Divan Sugar Mills and matter was directed to the agitated before the Appellate Authority not before this Court. D.S.M. Sugar mill submitted its proposal for crushing season 2005-06 and alongwith same appended certificate of crushing capacity 6500 lacs. TDC and demanded sufficient sugar cane according to its crushing capacity. Divan sugar mill has also submitted its proposal of crushing season 2005-06 and annexed certificate of crushing capacity 4200 lacs. TDC and demanded sufficient sugar cane according to its crushing capacity. Thereafter Cane Commissioner passed reservation order dated 15.10.2005 in exercise of its power vested under Section 15 of U.P. Sugar Cane (Regulation of Supply & Purchase) Act 1953 qua D.S.M. sugar and qua Divan Sugar Mill industry. D.S.M. Sugar Limited was not satisfied by the aforesaid reservation order and allotment of centers as such appeal was preferred before the State Government. In appeal Divan mill sugar limited filed objection. Cane Society also submitted its reply supporting the claim of D.S.M sugar mill limited. Thereafter Appellate Authority noticed shortage of sugar cane being faced by D.S.M. Sugar Mill Ltd. however no order of reservation was passed and the matter was remitted back to be decided afresh. Petitioner has contended that thereafter detail representation was moved pointing out shortage of sugar cane and the Cane Commissioner on 03.01.2006 permitted only 15 cane growers to supply sugar cane to the petitioner's company. At this stage D.S.M. sugar mill has approached this Court complaining that they have not been assigned adequate cane and there is shortage of sugar cane and further it has also been complaint that Divan Sugar Mill has been put to advantageous situation and as such both the orders be quashed and further centers namely Hakimpur-I, Hakimpur-II, Hakimpur-III and Fetehpur Bishnoai may be allotted to D.S.M. Sugar Mill Limited.

Counter affidavit has been filed on behalf of Diwan Sugar Mill, respondent no. 4 and therein it has been contended that incorrect suggestion has been made qua the crushing capacity of petitioner's mill being 7500 TCD. Qua themselves it has been mentioned that in crushing season 2004-05 their requirement under Section 12 (2) of U.P. Sugar Cane (Regulation Supply and Purchase) Act 1953 was fixed at 81 lacs quintals and sugar cane area allotted to them had a total cane production of 112.94 lacs quintals and as such in the said crushing year they had an average drawl of 41%. In crushing year 2004-05 the requirement of respondent no. 4, Divan sugar Mill limited was fixed at 99 lacs quintals and to meet said requirement, Divan Sugar Mill limited was only allotted a total sugar cane production of 73.56 lacs. quintals which was grossly inadequate to meet its requirement. Dispute has also sought to be raised in respect of requirement of D.S.M Sugar Mill to be 106.20 lacs quintals in crushing season 2004-05 and it has been contended that same was assessed as 90 lacs quintal only while undertaking exercise under Section 12(2) of the Act 1953. This fact has also been disputed that four centers were being operated by D.S.M. Sugar Mill upto 2001. It has been contended that Divan Sugar Mill Ltd. was having its trail crushing in year 1999-2000 and started its regular functioning since crushing year 2000-2001 and it has also been asserted that every year said center have been reserved in favour of the Divan Sugar Mill Ltd. It has also been asserted that said centers are within a distance of 15 km. from the factory of the Divan Sugar Mill Ltd. In the crushing year 2004-05 said four centers had been wrongly been assigned to D.S.M. Sugar Mill, as such appeal was preferred by Divan Sugar Mill Ltd. which was allowed and Appellate Authority further directed the Cane Commissioner to pass fresh order in accordance with the directives issued by this Hon'ble Court. Crushing capacity of the petitioner has been disputed and it has been suggested that requirement of D.S.M. Sugar Mill is merely 90 lacs quintals. It has also been contended that D.S.M. Sugar Mill has not filed any appeal against the order of the Cane Commissioner by means of which requirement has been fixed as 90 lacs quintals. Divan Sugar Mill Ltd. has also contended that requirement had been fixed and it should be allotted area and sugar cane as per the said order passed under Section 12 of the Act. Contention has also been raised that Cane Commissioner has arbitrarily and without any basis reduced the requirement of the Divan Sugar Mill Ltd. whereas last year it was fixed as 99 lacs quintal. Fixation of drawl percentage has also been assailed. Dispute has also sought to be raised by mentioning that Cane Commissioner vide order dated 05.07.2005 had required the factories to submit their enhanced capacity under Section 12 (1) of the Act before 20.07.2005. It has been asserted that D.S.M. Sugar Mill at no point of had filed any reply to the said order of Cane Commissioner and in this background it has been sought to be suggested that there was nothing before the Cane Commissioner to consider the claim of the D.S.M. Sugar Mill on the basis of alleged enhanced capacity. Action of the Cane Commissioner has been sought to be justified. Details have also been sought to be furnished mentioning that the requirement of Divan Sugar Mill Ltd. fixing 80 lacs quintals is incorrect whereas in last crushing year requirement was assessed to be 99 lacs quintals. It has also been contended that crushing capacity has increased and has not decreased as such there is no rational justification to lower it down. The order passed by the Appellate Authority making adverse  observations have been criticized.

Rejoinder affidavit has been filed to the said counter affidavit and therein it has been contended that event as per CA-1 requirement of D.S.M. Sugar Mill is 135 lacs quintals. Order passed by the Appellate Authority has been criticized for not being in  accordance with law. Again fact has been narrated that there are dues against the Divan Sugar Mill Ltd.

Supplementary counter affidavit has been filed on behalf of Divan Sugar Mill Ltd. and therein it has been sought to be contended that Rampur Sugar Mill could not start its crushing in the present crushing season as yet and as such purchase center of Rampur Sugar Mills have been assigned in favour of different sugar factories vide order dated 17.11.2005, and Cane Commissioner has assigned purchase centeres Rajaura and Dalpatpur A and B in favour of the D.S.M. Sugar Mill and total crushing of the said two purchase centers is 5.61 lacs quintals. Details have also been mentioned that petitioner had filed appeal for purchase centers namely Kailsa II and Kalkhera II which were initially allotted in favour of U.P. State Sugar Corporation Limited Unit Amroha and it has been mentioned that said appeal has been allowed on 5.01.2006 and the aforesaid centers have been assigned to D.S.M. Sugar Mill. Cane production of the said two centers is 6.94 lacs quintals. In this background it has been sought to be suggested that D.S.M. Sugar Mill has been allotted 12.55 lacs quintals of additional sugar cane. It has also been stated that M/s Upar Gangej Sugar and Industries Limited had filed an appeal against M/s Divan Sugar Mill Ltd. and said appeal has been allowed on 18.01.2006 and by means of the same three centers namely Nanhera- A Nanhera-B and Sultanpur have been taken away. Thus, Divan Sugar Mill Ltd. has lost 5.01lacs quintal sugar cane.

Short counter affidavit has been filed on behalf of respondent no. 3 and therein claim of D.S.M. Sugar Mill has been supported and qua Divan Sugar Mill Ltd. it has been contended that there is outstanding of sugar cane dues.

Civil Misc. Writ Petition No. 4620 of 2006:-

M/s Divan Sugar Mill Ltd. had its first trial crushing in crushing season 1999-2000 and with effect from crushing season 2000-01 regular crushing has been undertaken. It has been contended that purchase centers namely Hakimpur-I, Hakimpur-II, Hakimpur-III and Fetehpur Bishnoai have remained in the reserved area of the Divan Sugar Mill Ltd. It has further been contended that under Section 12 (2) of U.P. Sugarcane (Regulation of Supply & Purchase) Act 1953 the Cane Commissioner fixed on 17.07.2003 the requirement of different factories from crushing year 2003-04 to 2007-08. In the said order M/s Divan Sugar Mill Ltd. was placed at serial no. 34 and the D.S.M. Sugar Mill placed at serial no. 35. In the said order for the crushing year 2005-06 requirement of sugar cane qua M/s Divan Sugar Mill Ltd. was fixed at 99 lacs quintals and for the crushing year 2005-06 requirement of sugarcane was fixed at 117 lacs quintals whereas qua the D.S.M. Sugar Mill for crushing year 2004-05 same fixed at 99 lacs quintals and for year 2005-06 the same was fixed as 135 lacs quintals. on the basis of order dated 17.7.2003 the Cane Commissioner on 25.10.2005 passed reservation order in favour of Divan Sugar Mill Ltd. The Cane Commissioner found the requirement of Divan Sugar Mill Ltd. at 99 lacs quintals and to meet the said requirement the Cane Commissioner allotted 73.56 lac quintals of sugarcane to M/s Divan Sugar Mill Ltd. M/s Divan Sugar Mill Ltd. has contended that virtually impossible situation was sought to be created and hence huge incentive to the farmers had been given to ensure supply sugar of cane to M/s Divan Sugar Mill Ltd. so that unit in question in a position to survive. It has also been asserted that reservation application dated 20.07.2005 was moved for crushing year 2005-06 with a request to allot sufficient sugarcane to meet its requirement at 117.00 lacs quintals. Cane Commissioner passed reservation order dated 15.10.2005 by means of the same Cane Commissioner reduced the requirement of the petitioner to 80 lac quintals. Petitioners were asked to maintain drawl of 68% and to meet the said requirement 118.02 lac quintals sugarcane was allotted to the petitioner by the Cane Commissioner. On 05.07.2005 Cane Commissioner asked for furnishing details in respect of increase in the crushing capacity made by sugar factories for passing orders under Section 12 of the Act. M/s D.S.M. Mill Ltd. has not submitted any response to the said notice and reservation order was passed on 15.10.2005 and by means of the same requirement of D.S.M. Sugar Mill was assessed at 90 lac. quintals and to achieve drawl of 63% was fixed. On the basis of said drawl to meet its requirement of 90 lacs quintals, Cane Commissioner allotted 143.96 lacs quintals of sugarcane in favour of D.S.M. Sugar Mill.  Averment has been  made that drawl percentage has been arbitrarily fixed and no reason have come forward for fixing different drawl percentage. Reference has also been given of  bonding policy dated 05.07.2003. In this background it has been contended that fixation of drawl percentage is arbitrary. Fact and figure has been sought to be submitted to demonstrate fixation of drawl percentage  being arbitrary.  Further reference has also been given to the appeal which has been filed by the D.S.M. Sugar Mill and  to the reply  submitted against  the same and thereafter the  order  passed by the Appellate Authority. Details have also been given that D.S.M. sugar Mill is at advantageous situation. At this stage present writ petition has been filed for quashing of the order passed by Appellate Authority and  for fixing the drawl percentage of the petitioner M/s Divan Sugar Mill Ltd. qua the other factories of the area.

Counter affidavit has been filed therein statement of the fact mentioned the writ petition has been disputed and it has been submitted writ petition has no force.

Supplementary affidavit has also been filed and therein it has been contended that nine purchase centers have been allotted to D.S.M. sugar mill.

After pleading mentioned above have been exchanged, both the writ petitioner have been taken up together for final hearing and disposal and both are being heard and decided together.

Sri A.B. Saran, Senior Advocate assisted by by Sri Parmatama Rai,  Advocate appeared on behalf of D.S.M. Sugar Mills Ltd. and contended that power of Appellate Authority is co-extensive with the power of Cane Commissioner and Appellate Authority had full authority and jurisdiction to take into account of shortage of sugar cane which D.S.M. Sugar Mill was going to face and ought to have remedied the situation instead of remitting the matter back despite noticing  the fact of shortage of sugarcane and further Cane Commissioner has clearly erred in directing the cane growers to make supply which is not permissible under the U.P. Sugar Cane (Regulation of Supply & Purchase) Act 1953 and further once M/s Divan Sugar Mill limited has not questioned the validity of the order passed under Section 15 U.P. Sugar Cane (Regulation of Supply & Purchase) Act 1953  then plea which has been sought to be raised by the Divan Sugar Mill is unsustainable and same is liable to be set rejected.

Sri Vivek Chudhary, Advocate, appearing on behalf of M/s Divan Sugar Mill  contended that four purchase centers have rightly been alloted in favour of M/s Divan Sugar Mill, as such no interference be made in the same and further it has been contended that M/s Divan Sugar Mill is facing acute shortage of sugarcane  as such it was boundan duty of the authorities to ensure that there  be no shortage of sugarcane and further in the matter of fixation of drawl percentage rational criteria ought to have been followed as such writ petition filed by D.S.M. Sugar Mill is liable to be dismissed and the writ petition filed by the  M/s Divan Sugar Mill is liable to be allowed.

The relevant provisions of U.P. Sugarcane (Regulation of Supply & Purchase) Act  1953 and the provisions as contained under Rule 22 of U.P. Sugarcane (Regulation of Supply & Purchase) Rules 1954 are being looked into. Sections  12,13,15,16 and 17 of  U.P. Sugarcane (Regulation of  Supply & Purchase) Rules 1953 and Rules 22 of U.P. Sugarcane (Regulation of  Supply & Purchase) Rules 1954 are being quoted below:-

12 Estimate of requirements (1) The Cane Commissioner, may for purposes of Section 15, by order, require the occupier or any factory to furnish in the manner and by the date specified in the order to the Cane Commissioner as estimate of the quantity of cane which will be required by the factory during such crushing seasons (or crushing seasons) as may be specified in the order.

(2) The Cane Commissioner shall examine every such estimate and shall publish the same with such modifications, if any, as he may make.

(3)An estimate under sub-section (2) may be revised by an authority to be prescribed.

15. Declaration of reserved area and assigned area-(1) Without prejudice to any order made under Clause (d) of sub-section (2) of Section 15 of the Cane Commissioner may, after consulting the Factory and Cane-growers' Co-operative Society in the manner to be prescribed:

(a) reserved any area (hereinafter called an assigned area).

(b) assign any area (hereinafter called an assigned area),

for the purposes of the supply of cane to a factory in accordance with the  provisions of Section 16 during (one or more crushing seasons as may be specified) and may likewise at any time cancel such order or alter the boundaries of an area so reserved or assigned.

(2) Where any area has been declared as reserved area for a factory, the occupier of such factory shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory

(3)Where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner.

(4) An appeal shall lie to the State Government against the order of the Cane Commissioner passed under sub-section(1).

16 Regulation of purchase  and supply of cane in the reserved and assigned areas-(1) The State Government may, for maintaining supplies, by order, regulate-.

(a) the distribution, sale or purchase of any cane in any reserved  or assigned area; and

(b)_ purchase of cane in any area other than a reserved or assigned area.

(2) Without prejudice to the generality of the foregoing powers such order may provide for-

(a) the quantity of cane to be supplied by each Cane-grower or Cane -growers' Co-operative Society in such area to the factory for which the area has so been reserved or assigned;

(b) the manner in which cane grown in the reserved area or the assigned area, shall be purchased by the factory for which the area has been so reserved or assigned and the circumstance in which the cane grown by a cane grower shall not be purchased except through a Cane-growers' Cooperative Society'

(c)  the form and the terms and conditions of the agreement to be executed by the occupier or manager of the factory for which an area is reserved or assigned for the purchase of Cane offered for sale;

(d) the circumstances under which permission may be granted-

(i) for the purchase of cane grown in reserved or assigned area by a (Gur, Rab or Khandsari Manufacturing Unit or any person or factory) other than the factory for which area has been reserved or assigned and;

(ii) for the sale of cane grown in a reserved or assigned area to a  (Gur, Rab or Khandsari Manufacturing Unit or any person or factory) other than the factory for which the area is reserved or assigned.

(e) such incidental and consequential matters as may appear to be necessary or desirable for this purpose.

17.Payment of cane price:-(1) The occupier of a factory shall make such provision for speedy payment of the price of cane purchased by him as may be prescribed)

(2)Upon the delivery of of cane the occupier of a factory shall be liable to pay immediately the price of the cane so supplied together with all other sums connected therewith.

(3)Where the person liable under sub-section (2) is in default in making the payment of the price for a period exceeding fifteen days from the date of delivering, he shall also pay interest at a rate of 7-1/2 per cent per annum from the said date of delivering, but the Cane Commissioner may, in any case, direct, with the approval of the State Government, that no  interest shall be paid or be paid at such reduced rate as he may fix;

Provided that in relation to default in payment of price of cane purchased after the commencement of this proviso, for the figure 7-1/2 the figure 12' shall be deemed substituted;

(4) The Cane Commissioner shall forward to the Collector a certificate under his signature specifying the amount of arrears on account of the price of cane plus interest. If any, due from the occupier and the Collector, in receipt of such certificate, shall proceed to recover from such occupier the amount specified therein as if it were an arrear of land revenue.

(5) (a) Without prejudice to the provisions of the foregoing sub-sections, where the owner or any other person having control over the affairs of the factory or any other person competent in that behalf enters into an agreement with a bank under which th4e bank agrees to give advance to him on the security of sugar produced or to be produced in the factory, the said owner or other person shall provide in such agreement that a (percentage determined  by such authority and in such manner as may be prescribed) of the total amount of advance shall be set apart and be available only for repayment to cane growers or their co-operative societies on account of the price of sugarcane purchased or to be  purchased for the factory during the current crushing season from those cane growers or from  or through those societies, and interest thereon and, such societies , commission in respect thereof.

(b) Every such owner or other person as aforesaid shall send a copy of every such agreement to the Collector within a week from the date on which it is entered into).

Rules 1954

Rule. 22.  In reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory, under Section 15, the Cane Commissioner may take into consideration;

(a)the distance of the area from the factory.

(b)Facilities for transport of cane from the area.

(c)The quantity of cane supplied from the area to the factory in previous year.

(d)Previous reservation and assignment orders.

(e)The quantity of cane to be crushed in factory.

(f)The arrangements made by the factory in previous years for payment of cess, cane price and commission

(g)The views of the Cane-growers' Co-operative Society of the area.

(h)Efforts made by the factory in developing the reserved or assigned area.

        Perusal of provisions quoted above, would to to show that  Section 12 deals with estimation of requirement of sugarcane by the factory concerned during crushing season or crushing seasons, as  specified in order and thereafter examination of every such estimate and then publication of the same with such modifications, as may be required. This publication is subject to revision by Prescribed Authority.

Under sub-Section (1) of Section 15 the Cane Commissioner may, after consulting the Factory and Cane Growers Co-operative Society in the manner to be prescribed, reserve and assign any area for the purposes of supply of cane to a factory in accordance with the provisions of Section 16 and may likewise at any time cancel such order or after the boundaries of an area so reserved or assigned. Section 16 confers powers upon the State Government to regulate the sale or purchase of Cane in any reserved or assigned area. It also confers power to regulate the manner in which cane grown in the reserved area or the assigned area shall be purchased by the factory for which the area has been so reserved or assigned. Section 17 provides that the occupier of a factory shall make such provisions for speedy payment of the price of cane purchased by him and upon the delivery of cane he shall be liable to pay immediately the price thereof.

Rules 22 gives some guidelines as to how the power of assigning or reserving any area has to be exercised by the Cane Commissioner. It mentions several factors which have to be taken into consideration. Apart from the distance of the area from the factory, the facility of transport, previous reservation and assignment orders, quality of cane to be crushed in the factory views of the Cane-growers Co-operative Society, arrangements made by the factory for payment of price etc. in previous years and efforts made by the factory in developing the area have also to be taken into consideration. Sub-rule (b) lays emphasis upon facilities for transport which is also important inasmuch as in a given case an area may be at a shorter distance from one factory than another but on account of better facility of transport it may be more convenient for the Cane-growers to supply sugarcane to the factory which is at is greater distance. Similarly  sub-rule (f), which makes the payment of price in earlier years relevant, is very important from the point of view of cane growers. If the factory has defaulted in payment  of price and the dues of the Cane-growers are not paid for a long time, they would not be willing to supply their produce to such a factory. Prompt payment of price is of primary importance to the Cane-growers as it takes almost a year before sugarcane crop is ready for harvesting. The cane-growers who have nurtured their crop for about a year would not like to wait for further period, if they have made the supply to the sugar factory. Under sub-rule (h) effort made by the factory in developing the area for producing more and better quality of cane also becomes relevant. If a factory has invested heavy amount in developing an area as a result whereof the quality of sugarcane has improved, naturally it would like the said came to be supplied to its factory.

The provisions of the Act and Rules show  in unmistakable terms  that the order assigning or reserving any area has to be made after consulting the Factory and Cane-growers Cooperative Society. The ownership of the Cane any vests with the producer and normally he is entitled to sell the same to any one he likes, and in normal course of  business he would like to sell the Sugarcane to the person who offers him the best price without any delay. The Act, however imposes a restriction upon him and by virtue of an order issued under Sub-section (1) of Section 15 the Cane grower is compelled to sell his sugarcane to the factory to whom his area has been assigned or reserved. The Legislature has enacted Section 17 which makes provision for immediate payment of price to the seller of sugarcane. Therefore, promptness with which price is paid is a very important factory which has to be kept in mind at the time of passing of an order assigned or reserving any area in favour of a sugar factory. The Cane-growers Cooperative Society is expected to watch the interest of the produces and it is for this reason that it is obligatory upon the Cane Commissioner to consult the Society before passing any order of assignment or reservation. The heading of Section 15 is 'Declaration of reserved area and assigned area'. The right and forum of appeal against the order of the Cane Commissioner made under sub-Section (1) of Section 15 have been provided in sub-Section (4) of the same section. It, therefore, follows that the State Government has also to hear the concerned factory and Cane-growers Co-operative Society while deciding an appeal.

Under the provisions of U.P. Sugarcane (regulation of Supply and Purchase) Act 1953 and the Rules framed thereunder, it is obligatory for the authorities to pass order balancing the interest of the sugar factories as well as cane growers. Underlining idea of the Act is to ensure 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 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 exercise undertaken by the authorities should not be guided for extending benefit to one of the parties, it should be fair exercise and on account of the exercise so undertaken none of the parties should be unduly benefited, rather a fair effort ought to be made so that interest of each one of the parties  is protected.

In the light of the provisions quoted above, impugned order in question dated 15.12.2005 has been perused and  perusal of the said order reflects that in the last crushing season all four centers were reserved in favour of the  M/s Divan Sugar Mill and on 03.12.2004 same were assigned in favour of M/s D.S.M. Sugar Mill Ltd.  M/s Divan Sugar Mill it has been mentioned that its requirement has been assessed at 117 lacs quintals and in crushing seasons 2002-03, 2003-04,2004-05 sugarcane which has been crushed is 54.80, 40.58, 49.54 lacs quintals respectively and in crushing season 2004-05 its drawl percentage has been 68% and this year drawl percentage has been fixed  as 68 percentage which is reasonable. D.S.M. Sugar Ltd. in crushing seasons 2002-03, 2003-04 and 2004-05 has crushed 65.84, 66.00 and 64.30 lacs quintals respective and  its drawl percentage  has been 53 %. As such it is clear that drawl percentage of D.S.M. Sugar Mills is less as compared to M/s Divan Sugar Mill Ltd as such in this background allotment of sugar cane by treating its drawl percentage to be 63 is not appropriate. Crushing capacity of D.S.M. Sugar Mill is more and payment position is also satisfactory  and further there is no resolution either in favour of D.S.M. Sugar Mills or in  M/s Divan Sugar Mill and in this background it has been contended that there are possibility of less sugar cane being obtained and matter has been remitted back. Cane Commissioner thereafter passed order directing fifteen cane growers to supply the sugarcane. The Appellate Authority in the present case has not at all applied its mind in correct perspective, inasmuch as as the order passed is based on mere presumption as he has noted  down the circumstances and straightway it has been mentioned that in these circumstances M/s D.S.M. Sugar Mill would not get required sugarcane. The Appellate Authority ought to have applied its mind on each and every aspect of the matter as to what was the requirement of the petitioners' sugar factory, its crushing capacity, its drawl percentage and whether there was shortage of sugarcane thereafter ought to have seen as to whether all these four centers were liable to be assigned in favour of M/s D.S.M. Sugar Mill Ltd or not. No exercise whatsoever has been undertaken and in fact case of the parties though it has been noted in the shape of arguments but the same has not at all been adverted to by the Appellate Authority while passing impugned order and matter has been sought to be remitted back. Once power of appeal is there and then Appellate Authority having been vested with coextensive authority qua the Cane Commissioner then Appellate Authority was obliged to address itself each and every issue which has been sought to be raised by the parties before the Appellate Authority. Here in the present case Appellate Authority in most casual manner proceed with the matter and dealt with the matter simply remitting the matter back. Cane Commissioner has also failed to discharge its part of the obligation by directing providing  of supply  of sugarcane by the cane grower  contrary to the provisions as contained in 1953 Act and Rules framed thereunder. The need of respective sugar mills ought to have been seen and this important aspect of the matter has also  to be seen that how much sugarcane to be supplied would have satisfied the need of the sugar factories looking into its , crushing capacity and drawl percentage etc.

Here in the present case nothing has been done and fact of the matter is that the Appellate Authority has undertaken no exercise whatsoever. Once order was being passed by the Appellate Authority respective claim set up by the parties ought to have been adverted to which has not at all been done in the present case. As far as  M/s Divan Sugar Mill is concerned reservation order has been passed and at no point of time any appeal has been filed. This said order of Cane Commissioner is  thus binding and  has attained the finality. However when appeal  filed  by M/s D.S.M. Sugar Mill was being taken up for hearing and said order in case was to  affect  then claim of M/S Divan Sugar Mills was also adverted to.

As order dated 15.10.2005 has not at all been passed in consonance with law and issue which has been sought to be raised has not at all been adverted to as such order dated 15.10.2005 and consequential order dated 03.01.2006 are hereby quashed and set aside. Matter is remitted back to be decided afresh after taking into consideration, respective claim set up by the parties within next two weeks from the date of receipt of certified copy of this order. Parties shall appear before Appellate Authority on 06.03.2006.

For the reasons stated, above, present writ petition no. 2737 of 2006 is allowed and writ petition No. 4620 of 2006 is disposed of.

Dated:27.02.2006

Dhruv          

       

       


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