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Daya Sugar Limited v. State Of U.P. And Others - WRIT - C No. 6828 of 2006 [2006] RD-AH 6415 (23 March 2006)


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                                                                                       Court No.38

Civil Misc. Writ Petition No.6828 of 2006

Daya Sugar Limited              Versus             State of U.P.& others

Hon'ble Vineet Saran, J

The dispute in this writ petition relates to five cane purchase centres, namely, (1) Ranipur (2) Daleywala (3) Bandhi (4) Nalheda Gujar, and (5) Khatakhedi. The reservation order was issued by the Cane Commissioner on 5.10.2005 in the case of Daya Sugar Limited (for short ''petitioner-mill') and on 4.10.2005 in the case of U.P.State Sugar Corporation Limited Unit Bidwi (for short ''respondent no.3-mill'). By the said reservation orders the five cane centres in question were reserved in favour of respondent no.3-mill. The petitioner-mill filed an appeal under section 15(4) of the U.P.Sugarcane (Regulation of Supply and Purchase) Act, 1953 (for short ''the Act') praying that the said five cane centres be reserved in its favour. By the impugned order dated 3.1.2006 the Appellate Authority, Respondent no.1, has dismissed the appeal of the petitioner-mill. Aggrieved by the said order the petitioner-mill has filed this writ petition.

I have heard Sri S.D.Singh, learned counsel for the petitioner as well as learned Standing Counsel appearing for the State-respondent nos.1 and 2; Sri R.K.Srivastava learned Senior counsel assisted by Dr.Y.K.Srivastava on behalf of contesting respondent no.3 and Sri Ravindra Singh on behalf of Cane Cooperative Society, Respondent no.4. Counter and rejoinder affidavits have been exchanged between the contesting parties and with the consent of the learned counsel for the parties, this writ petition is being disposed of at this stage.

The submission of the learned counsel for the petitioner is that although as per the guide lines issued by the State Government for the current crushing season 2005-06, the drawal percentage to be fixed for the mills was to be between 55 to 60 per cent as has been noticed in the reservation order itself, but by the reservation order the drawal of the petitioner-mill was fixed at 62%, which was 2% higher than the maximum; whereas in the case of respondent no.3-mill, the same was fixed at 50%, which was 5% less than the minimum. The further submission is that the Cane Cooperative Society, Respondent no.4, had passed a resolution that the said five cane centres in dispute be reserved in favour of the petitioner-mill for the reason that payment by the petitioner-mill is better and that the respondent no.3-mill does not purchase cane from the cane centres but from the mill gate. A copy of the resolution of the Cane-growers' Cooperative  Society has been filed as Annexure-C.A.-1 to the counter affidavit filed by Respondent no.4. It has been submitted that as per the own document of the respondent no.3-mill (filed as Annexure-C.A.-4 to the counter affidavit filed by Respondent no.3), in the previous year the cane purchased by the respondent no.3-mill from its gate was about 13 (thirteen) lac quintals whereas that from out centres was only about 9 (nine) lac quintals and as such the contention is that the respondent no.3-mill does not purchase adequate cane from its centres. It has also been urged that the petitioner-mill has acute shortage of cane and the cane offered to the petitioner-mill is short by 17 lac quintals. The further contention is that although the estimated requirement of cane for the petitioner and the respondent no.3 mills is 57 lac quintals and 45 lac quintals (after considering the respective crushing capacity of the mills), the area allotted (which includes the reserved and assigned area) to both the sugar mills is almost the same which is 14,438 hectares and 14,150 hectares.

Sri R.K.Srivastava, learned Senior counsel appearing for the respondent no.3-mill has, however, submitted that in the previous three years the petitioner-mill has not able to achieve its targeted crushing and there has been a study decline in their crushing of cane, and as such in view of the fact that in the previous years the petitioner-mill has been able to crush much less cane than the estimated requirement assessed at 57 lac quintals, there would be no justification for reserving the five cane centres in dispute in favour of the petitioner-mill. It has also been contended that since the said centres are closer to the respondent no.3-mill, the same have rightly been reserved in its favour.

Sri Ravindra Singh, learned counsel for the Cane-growers' Cooperative Society, Respondent no.4, has submitted that the cane growers of the area have resolved in favour of the petitioner-mill and they would not be inclined to sell their cane to the respondent no.3-mill.

By the impugned order the Appellate Authority has refused to interfere with the reservation of the five cane centres in dispute on the ground that the cane centres in dispute are closer to respondent no.3-mill. Distance is one of the factors enumerated in Rule 22 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954 (for short ''the Rules'). Under section 15 of the Act as well as Rule 22 of the Rules it is mandatory to take the views of the Cane-growers' Cooperative Society before passing the reservation order. The other factors which were also necessary to be considered, were the facility of transport of cane from the area, the reservation and assignment of the centres in the previous years, the payment made to the cane growers' in the previous years and the effort made by the factories for developing the area. All these factors have not at all been considered or even discussed by the Appellate Authority in the impugned order. Before passing the order the Appellate Authority ought to have considered as to whether in the previous years, the respondent no.3-mill had purchased all the cane from the centres in question, as it is the specific case of the petitioner-mill that in the previous year, after the respondent no.3-mill had closed down prematurely, the petitioner-mill had purchased the cane from the centres in dispute. The Appellate Authority had also not given any reason as to why the drawal percentage of the petitioner-mill was fixed at higher than that given in the guidelines and lower than the minimum in the case of the respondent no.3-mill, which ground had been specifically raised by the petitioner.

In view of the fact that the various factors enumerated in Rule 22 of the Rules have not been considered by the Appellate Authority before passing the impugned order and also for the reasons given hereinabove, in my view the Appellate Order deserves to be set aside and is, accordingly, quashed. However, the Appellate Authority is directed to decide the matter with regard to the reservation of the aforesaid five cane centres afresh, in accordance with law, without being influenced by any observations made on merits hereinabove. The Appellate Authority shall give opportunity of hearing to all the parties. Learned counsel for all the parties have agreed that they shall appear before the Appellate Authority at 10.00 A.M. on 31.3.2006, along with a certified copy of this order, as well as their written submissions. The Appellate Authority shall either hear the matter on that date itself or give a short date and pass appropriate orders in appeal, within two weeks of the filing of the certified copy of this order.

For the foregoing reasons, this writ petition stands allowed to the extent indicated as above.

Let certified copies of this order be issued to the learned counsel for the parties by 28.3.2006, on payment of usual charges.




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