Judgement

JUDGMENT :- These appeals by special leave are filed against the judgment and order date September 1, 1978 and September 4, 1978 passed by the Madhya Pradesh High Court, Indore Bench in Misc. Petition No. 140, 139, 43 and 44 of 1977.

2. These appeals arise from the Sugarcane Control Order, 1966 (for short, the "Order" and the M. P. Sugarcane (Regulation of Supply and Purchase) Act, 1959 (for short, the "Act"). It is rather unfortunate that the sugarcane growers who spent their sweat and blood in raising the sugarcane in the years 1974-75, 1975-76 had to wait for 20 years to receive the price of the sugarcane supplied by them to the respondents factories. The respondent in C.A. 1813/80 is a Hindu Undivided Family represented by its Karta and respondents in other appeals are factories. The Central Government had fixed the price of the sugarcane under Rule 3(1) of the Rules issued under Section 3 (3) (c) of the Essential Commodities Act, 1957 at Rs. 8.60 per quintal. Various meetings of the sugarcane growers and the sugarcane factories and their associations, were convened by the Government of Madhya Pradesh and ultimately the agreement got crystallised at the meeting held on March 21, 1976 to fix the final price of the sugarcane at Rs. 12/- per quintal for the sugarcane supplied at the factory and Rs. 11.50 per quintal for the sugarcane supplied at other supply centres. Though the sugarcane was supplied by the cane-growers, since theirs amounts could not be paid, the appellant-Government resorted to Section 21 of the Act to enforce the liability by recovering the same as arrears of land revenue. The respondents come to challenge the demands by filing the aforesaid writ petitions. The Division Bench of the High Court in the aforesaid judgments in three appeals has held that since no separate agreement was entered into between the respondents and the sugarcane growers, the liability could not be enforced by way of arrears of land revenue. In C.A. No. 1811/80 involving the question of interest on account of delayed payment, it was held that since the amount was not paid as per the price fixed under the Order, no liability of interest would be charged thereon. Therefore, the demand for payment of interest on delayed payment is without authority of law. Thus these appeals by special leave.

3. Shri U. N. Bachawat, learned senior counsel appearing for the State, contended that as per the record produced and the averments made in the counter-affidavit filed in the High Court in the writ petitions that there was a specific oral agreement between the sugarcane growers and the factories represented by the Association and many of their representatives personally present except Kalurams sugarcane joint family firm and all of them have agreed to final price of sugarcane. Even with regard to Kalurams firm, since the meeting was adjourned once, to enable him to be consented, as he was present, the Secretary of the Association contacted him over telephone and he agreed to abide by the agreement. In furtherance thereof, on March 21, 1976 the gentleman agreement has been entered into for the final price of the sugarcane to be supplied by the sugarcane growers. As a consequence, there was an agreement between the owners of the sugar factories and the sugarcane growers. Since the sugarcane growers were not paid the price, in furtherance thereof, the factories are liable to pay the sugarcane price and also the interest on the delayed payment in one appeal. The view taken by the High Court is not valid in law.

4. Shri S. K. Jain, learned counsel for the respondents, contended that Rules 3 and 5-A of the Order determine the liability to pay the price and the additional price. The Central Government having determined the price of the sugarcane under the Order, there is no power to the State Government, de hors the Order, to fix any agreed price. The concept of agreed price came into force on September 19, 1976 by virtue of Rule 3-A of the Order.