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2000 Supreme(All) 831
IN THE HIGH COURT OF ALLAHABAD
Pradeep Kant, J.
GOVIND NAGAR SUGAR LTD. - Appellant
Versus
STATE OF UTTAR PRADESHAND OTHERS - Respondents
W. P. 544 Of 2000
Decided On : 05/30/2000
Headnote:
SUGAR INDUSTRY - Regulation of supply and purchase of sugarcane - U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 - Sections 12, 15(1), 15(2), 15(3), 16 - U. P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954 - Rules 21, 22 - Cane Commissioner - Power to reserve an area by allotting specific sugarcane centers to the sugar factories - Order of reservation - Estimate of sugarcane as determined under Section 12 - Finality - Joint purchase of sugarcane in favour of two or more sugar factories in respect of one reserved area - Permissibility - Guidelines for reservation and assignment of area - Consideration of relevant factors - Order of State Government in appeal - Scrutiny by High Court.
Fact of the Case:
Three writ petitions were filed challenging the orders passed by the State Government under Section 15(4) of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. The main questions raised were: (i) whether the estimate of sugarcane as determined under Section 12 of the Act is conclusive and final for the purpose of reservation and assignment of area for purchase of sugarcane by the sugar factory; (ii) whether there can be an order of joint purchase of sugarcane in favour of two or more sugar factories in respect of one reserved area.
Finding of the Court:
1. The estimate of sugarcane as determined under Section 12 of the Act is final for the purpose of initial declaration of reserved or assigned area under Section 15(1), and it is not open for the sugar factory to raise any grievance regarding the same at that stage. However, the Cane Commissioner has the authority to provide additional reserved area or assigned area to a sugar factory which bona fide feels the shortage of sugarcane and requires more sugarcane for producing sugar during a particular crushing season or seasons. 2. There cannot be an order permitting the joint purchase by two or more than two sugar factories in a particular reserved and assigned area and consequently, there cannot be an order for willing cane growers to sell the sugarcane to any factory of their choice in such area. In case the necessity is felt and exigencies so demand that two or more than two factories should be permitted to lift the sugarcane from one reserved or assigned area, the Cane Commissioner would be obliged to demarcate the reserved or assigned area for each sugar factory.
Issues: 1. Whether the estimate of sugarcane as determined under Section 12 of the Act is conclusive and final for the purpose of reservation and assignment of area for purchase of sugarcane by the sugar factory? 2. Whether there can be an order of joint purchase of sugarcane in favour of two or more sugar factories in respect of one reserved area?
Ratio Decidendi: 1. The purpose of the Act is to provide a 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 supply of sugarcane to the sugar factories in the quantity which may be reasonably required by them for production in a particular season or seasons is to be regulated by the provisions of this Act. 2. The estimate prepared under Section 12 is for the purpose of Section 15 of the Act, which deals with the declaration of reserved area and assigned area. The very opening words of Section 12 namely the Cane Commissioner may for the purpose of Section 15, . . . . . . . . leaves no room of doubt that this estimate is to be prepared for the purpose of Section 15 which in consequence means that such an estimate shall form the basis of allotting reserved area or assigned area to a particular sugar factory. 3. The Act and the Rules do not envisage reservation or assignment, one particular area, in favour of two or more sugar factories.
Final Decision: 1. Writ Petition No. 325 (MS) of 2000 is partly allowed and the matter is remanded to the State Government to decide the appeal afresh expeditiously in the light of the observations made in the Judgment. 2. Writ Petition No. 326 (MS) of 2000 is dismissed. 3. Writ Petition No. 544 (MS) of 2000 is also dismissed.
( 1 ) THESE are three writ petitions which required adjudication on common question of law.
( 2 ) TWO writ petitions viz. ; Writ Petition Nos. 325 and 326 (MS) of 2000, filed on the same day after effecting service upon the opposite parties and after filing the counter-affidavits by the contesting parties. are being decided and finally disposed of with the consent of the parties counsel by a common order as the lis is between the same parties which involves certain common question of law. Both the writ petitions have been filed by Govind Nagar Sugar Ltd. Walterganj, Basti [hereinafter referred to as walterganj Mills for short) against Balrampur Chini mills Ltd. Babhnan district Gonda (hereinafter referred to as babhnan Mills for short ). In both the writ petitions the orders passed by the State Government under Section 15 (4) of U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. have been challenged.
( 3 ) THE most important and common questions of law pressed in the writ petitions are :
(i) whether the estimate of sugarcane as determined under Section 12 of the Act is conclusive and final for the purpose of reservation and assignment of area for purchase of sugarcane by the sugar factory? (ii) Whether there can be an order of joint purchase of sugarcane in favour of two or more sugar factories in respect of one reserved area?
( 4 ) BESIDES the above, the third point raised in Writ Petition No. 325 (MS) of 2000, is that the state Government while passing the impugned order in appeal did not take into consideration the relevant provisions of the Act and the Rules including Rule 22 of the Rules.
( 5 ) THE first two questions referred to above can be safely taken up together for the benefit of both the writ petitions, namely, Writ Petition Nos. 325 and 326 (MS) of 2000. whereas the third question would be considered and answered by separate reasoning in the present order itself.
( 6 ) IN the third Writ Petition No. 544 (MS) of 2000, which was filed at a later date, the only question pressed is question No. (ii) referred to above. although the order passed by the State government in appeal under Section 15 (4) is under challenge. The U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (hereinafter referred to as the act for short) was enacted with the object of regulating the supply and purchase of sugarcane required for the use in sugar factories (or Gur, Rob and Khandsari Sugar Manufacturing Unit) and other connected matters. We are here concerned with the supply and purchase of sugarcane required for the use in sugar factories in the instant writ petitions. Question No. 1 (i) whether the estimate of sugarcane as determined under Section 12 of the Act is conclusive and final for the purpose of reservation and assignment of area, for purchase of sugarcane by the sugar factory?
( 7 ) THE Supreme Court had an occasion to test the constitutionality of the Act in the case of Ch. Tika Ramji and others etc. v. State of Uttar Pradesh and others, AIR 1956 SC 676, wherein the supreme Court after tracing the history of the enactment upheld the validity of the Act and thus upheld the powers of the Cane Commissioner under the Act in the matter of Regulation of supply and purchase of sugarcane to the sugar factories and other sugar manufacturing units.
( 8 ) THE dispute regarding the orders of reservation of an area by the Cane Commissioner and the outcome of the appeal preferred before the State Government by the aggrieved sugar factories consume a considerable time of the High Court almost every year at the start of the crushing season. Despite several statutory provisions and the guidelines being provided under the Act and the Rules coupled by various pronouncement of the Courts making it clear that the Cane commissioner cannot use the powers conferred upon him in a discriminatory manner so as to violate fundamental rights guaranteed under Article 14 of the Constitution and if he does act. arbitrarily, t
