State Government Resolution Allowing Staggered Sugarcane FRP Payments Struck Down: Bombay High Court - 2025-03-17

A Victory for the Fields: Bombay High Court Strikes Down State's Sugarcane Payment Policy

In a landmark ruling that protects the financial security of thousands of farmers, the Bombay High Court has invalidated a February 2022 Maharashtra government resolution that permitted sugar factories to pay the Fair and Remunerative Price (FRP) of sugarcane in two installments. The bench, led by Justice G. S. Kulkarni and Justice Advait M. Sethna, declared the state’s policy "illegal" and "violative" of the central Sugarcane (Control) Order, 1966 ( SCO 1966 ).

The Conflict: State Policy vs. Central Mandate

The dispute stemmed from a government resolution (GR) issued by the State of Maharashtra in its Cooperation, Marketing and Textiles Department. This resolution sought to introduce a staggered payment mechanism for sugarcane farmers, arguing that the financial burdens on sugar factories required a more flexible approach.

However, petitioners—led by former MP and agriculturist Raju Shetty—argued that once sugarcane is delivered, the SCO 1966 and the Maharashtra Regulation of Sugarcane Price (Supplied to Factories) Act, 2013 mandate that the full FRP must be paid within 14 days. The state’s policy, which deferred a portion of the payment until the end of the crushing season, was described by the petitioners as a "fraud on farmers."

The Arguments: Stability vs. Survival

The State Government, represented by the Advocate General, defended the policy as a necessary measure to balance the economic stability of the sugar industry with the interests of farmers. They argued that the delegation of powers from the Union Government to the states allowed for localized policy refinements in the payment schedule.

Counsel for the sugar factories emphasized the practical difficulties of determining specific recovery rates at the start of a season and argued that the state was merely filling a "missing link" in the federal regulations.

The petitioners, however, countered that the SCO 1966 was intended to shield vulnerable farmers from the organized power of the sugar industry. They argued that the state had no authority to unilaterally dilute central law, emphasizing that the livelihoods of farmers—not the commercial balance sheets of mills—must remain the priority.

Legal Analysis: The Bounds of Delegated Power

The High Court’s reasoning hinged on the principles of statutory supremacy and the limits of delegated authority. Citing the classic legal maxim Delegatus non potest delegare (a delegate cannot sub-delegate or exceed their powers), the court held that the state government’s authority was strictly limited to the mandate specified in the Union's notification.

The court noted that the state was attempting to establish a parallel, conflicting regime that effectively nullified the legislative intent. By attempting to define its own calculation formula for FRP—long after the legislation had provided a clear, federal structure—the state exceeded its constitutional mandate.

Key Observations

The judgment provides a stern reminder of the state’s obligation toward its agrarian backbone: * "Any dilution of such mandate as contained in Clause 3 of the SCO would be fatal and would adversely affect the very livelihood of the agriculturists and the farmers." * "Agriculturist in no manner whatsoever should suffer, is the object and intention of the Central Government in providing immediate payment of the FRP." * "The rights of the agriculturist/farmers to receive the FRP as mandated... are paramount, which are intended to be safeguarded by law."

Final Decision: A Restoration of Rights

The High Court’s order leaves no room for ambiguity: the 2022 government resolution is quashed. The Court ruled that farmers are legally entitled to receive the full FRP within 14 days of delivery.

The practical effect of this decision is an immediate return to the pre-2022 standard, requiring sugar factories in Maharashtra to ensure timely full payments. While the state government sought a stay on the judgment, the bench firmly rejected the request, citing the dire repercussions any delay would have on the lives of farming families. This ruling establishes a clear precedent that when commercial interests of industries collide with the statutorily protected rights of farmers, the law strictly favors the latter.