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1994 Supreme(All) 940

IN THE HIGH COURT OF ALLAHABAD
U. P. SINGH, C. A. RAHIM
BASTI SUGAR MILLS.CO.LIMITED - Appellant
Versus
STATE OF U.P - Respondents
C. M. W. P. 36612 Of 1994
Decided On : 12/22/1994

Advocates Appeared:
BHARATI SAPRU, DHANANJAI AVASTHI, SUDHIR CHANDRA AGARWAL, U.S.AVASTHI

The Cane Commissioner must take into consideration all relevant factors, including the crushing capacity of the sugar factory, the availability of sugarcane in the reserved area, and the need for production of sugar, while passing an order for the reservation or assignment of an area.

Headnote:

SUGARCANE CONTROL ORDER, 1966 - SECTION 6 - RESERVATION OF AREAS FOR SUGAR FACTORIES - ASSIGNMENT OF TINICH RAIL CENTRE TO RESPONDENT NO. 5 - VALIDITY - FACTUAL BACKGROUND AND LEGAL FRAMEWORK - COURT'S ANALYSIS AND CONCLUSION.

Fact of the Case:

The petitioner, a sugar factory, challenged the validity of the reservation order assigning Tinich Rail centre to respondent No. 5, another sugar factory, for the crushing season 1994-95. The petitioner argued that the assignment was illegal and arbitrary, and that it had been deprived of a significant portion of its reserved area, causing substantial losses.

Finding of the Court:

The court found that the impugned order was passed without due consideration of the relevant factors, including the petitioner's crushing capacity, the availability of sugarcane in the reserved area, and the need for production of sugar. The court also noted that the petitioner had developed the Tinich Rail centre over a period of 50 years and had invested in a rail siding to facilitate easy transportation of sugarcane.

Issues: 1. Whether the assignment of Tinich Rail centre to respondent No. 5 was valid and in accordance with the provisions of the Sugarcane Control Order, 1966 and the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. 2. Whether the Cane Commissioner had taken into consideration the relevant factors while passing the impugned order.

Ratio Decidendi: The court held that the impugned order was illegal and arbitrary, and that the Cane Commissioner had failed to take into consideration the relevant factors while passing the order. The court relied on the provisions of the Sugarcane Control Order, 1966 and the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, which provide for the reservation of areas for sugar factories and the assignment of such areas to ensure an equitable distribution of sugarcane.

Final Decision: The court quashed the impugned order and allowed the writ petition, holding that the assignment of Tinich Rail centre to respondent No. 5 was illegal and arbitrary.


( 1 ) IN this writ petition, the petitioner has challenged the validity of the Reservation order dated 9-11-1994 (Annexure-10 to the writ petition) in so far as it relates to the assignment of Tinich Rail centre to respondent No. 5 M/s. Babhnan Sugar Mills Ltd. By the said impugned order dated 9-11-1994, the Cane Commissioner, U. P. has issued the Reservation order for the Crushing season 1994-95 reserving Tinich Rail centre to the petitioner but assigning it once again to Babhnan sugar-Mills Ltd.

( 2 ) THE petitioner M/s. Basti Sugar Mills Co. Ltd. Unit Walterganj is a company engaged in the manufacture of crystal sugar through the vacuum Pan Process. The unit at Walterganj was established in the year 1932 and is one of the first sugar Mills established in the State of Uttar Pradesh. This unit at Walterganj has a crushing capacity of 1100 T. C. D. and has a requirement of 20 lac quintals of sugar cane for the crushing season 1994-95 and it has started its crushing w. e. f. : 14-11-1994. The crushing season is expected to last for a minimum of 180 days and, accordingly, the petitioner has a need to get a minimum supply of 20. 70. lakhs quintals of sugarcane for the crushing season 1994-95. On an average crushing season lasts for 150 days. In the previous crushing season 1993-94 most of the Sugar Factories crushed for approximately 180 days. The petitioner was unable to crushing beyond 108 days on account of shortage of sugarcane created by assignment of the Reserved areas of the petitioner to other neighbouring Sugar Factories. For the crushing season 1994-95 the Cane Commissioner has assessed the need of the petitioner to be 20. 70 lakh quintals of sugarcane. In exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1953, the Central Goverment promulgated the Order, called the Sugargane Control Order, 1966, Clause 6 of the said order regulates the distribution and movement of sugarcane within the reserved area of sugar factories having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar with a view to enable the factory to purchase the quantity of sugarcane required by it. The said clause further gives power to the Government to determine the quantity of sugarcane which a factory will require for crushing in a particular crushing season and further empowers to direct the sugarcane growers to supply sugarcane to the factory upon entering into an agreement. Clause 6 (2) of the order states that the sugarcane growers shall be bound to supply sugarcane to the Factory and the sugar Factories are also bound to receive supplies of the sugarcane under the Agreement. Clasue 7 of the Sugarcane Control Order, 1966 further gives powers to the Central Government to give direction that no sugarcane shall be purchased for crushing in the reserved area by any other person other than the Factory. The supply of the sugarcane to the petitioner is regulated under the provisions of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 read with Sugarcane Control Order of 1966. Section 2 (n) of the Sugarcane Control Order defines as assigned area of an area assigned to a factory under Section 15 of the Act, Section 2 (n) defines reserved areas as the area specified in the Order made under Section 15. Section 9 (1) defines crushing season which means the period beginning from Ist October in any year and ending on 15th day of July of the following year. Section 12 of the Act of 1953 requires the petitioner factory every year before the start of the crushing season to submit its requirement of the sugarcane to the Cane Commissioner and on the basis of the its requirements and availability of sugarcane crushing capacity of the petitioners factory etc. the Cane Commissioner reserves the area in favour of the Mill owners/ petitioners factory under Section 15 of the Act of 1953 read with order of 1966. Section 15 of the Act of 1953 giv











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