Allahabad High Court
Kisan Sahkari Chini Mills Ltd. vs State Of U.P. & Others on 1 February, 2010
Author: V.K. Shukla
Bench: V.K. Shukla
1
Reserved
Civil Misc. Writ Petition No.71005 of 2009
Kisan Sahkari Chini Mills Limited
Versus
State of U.P. and others
Hon'ble V.K. Shukla, J.
Present writ petition has been filed by the petitioner questioning the validity of order dated 05.1.2009 passed by the Cane Commissioner, in so far as it assigns cane centres, Aurangpur Fatehkhan and Bhanera, reserved in favour of the petitioner to the contesting respondent factory, and the order of its affirmance in appeal by the State Government dated 16.12.2009.
Brief background of the case, as disclosed in the writ petition, is that Kisan Sahkari Chini Mills Limited, Sneh Road, Najibabad, District Bijnor, is a registered cooperative society under the provisions of U.P. Cooperative Societies Act, 1965. Said society is running 3000 TCD sugar factory unit at Saneh Road, Najibabad, District Bijnor, through vacuum pan process. Petitioner's contention is that during crushing season 2008-09, cane requirement of petitioner was 50.31 lac quintals from an area of 15647 hectares; however, the petitioner could crush only 25.89 lac quintals and faced shortage of sugar cane. During the present crushing season, the petitioner has been made available 76.91 lac quintals of sugar cane from an area of 14285 hectare. Thus there has been reduction in cane production to the tune of 7.23 lac quintals and a reduction in cane area of 1362 hectares. Thus the petitioner is bound to face severe shortage of cane during the present crushing season. During crushing season 2006-07, the petitioner had operated for 184 days, whereas during crushing season 2007-08, the petitioner had operated for 155 days and in the last crushing season, it had operated for 106 days only; in crushing season 2008-09, petitioner's factory remained closed for 271 hours on account of non-availability of cane, which was 13% of total crushing hours.
The petitioner has given details of drawl rate fixed during crushing season 2006-07 at 56%; during 2007-08 at 54.8% and 55% during 2008-09; thus average drawl rate of the petitioner had been 55%, and at the said drawl rate, petitioner was required 78.33 lac quintals of sugar cane to meet its cane 2 requirements 43.08 lac quintals. Petitioner has gone to the extent of saying that average drawl rate of the petitioner for the last three years had been 41%, and at the said rate petitioner was required 105.1 lac quintals to meet its cane requirement of 43.08 lac quintals, and as such would face shortage of 28.19 lac quintals of sugar cane, as cane production available to the petitioner is 76.91 lac quintals. Further petitioner has gone to the extent of saying that there has been reduction in cane production and cane area allotted to the respective sugar mills and reduction in cane production in case of petitioner has been assessed at 10.48%, whereas in the case of respondent sugar mills the same has been assessed at 17.19%. During last crushing season same was assessed at 11.05% for the petitioner and 23.42% for the respondent sugar factory. The petitioner has given details of total reserved area of respondent at 18195 hectares having cane production of 97.96 lac quintals, and the respondent mill has been made available 14285 hectares of cane area having production of 76.91 lac quintals. It has also been mentioned that 3910 hectares of reserved cane area of the respondent comprising 13 purchase centres having cane production 12.05 lac quintals has been assigned in favour of other mills, and in this background the respondent mill has been deprived 21.5% of the cane production from its reserved area.
The petitioner has also given details that in the year 2006-07, 10 purchase centres of the petitioner were assigned in favour of other sugar mills and a similar situation prevailed in 2007-08. During 2008-09 11 purchase centres of the petitioner were assigned in favour of other sugar mills, and thus petitioner was deprived 15.4% of cane production from its reserved area during 2008-09.
Petitioner has also given details of the fact that there are 17 khandsari units and 41 kolhus in the cane area of the petitioner; they crush 38.51 lac quintals and 11.07 quintals of cane respectively, and thus, 42.54% and 12.23% respectively of the cane production available with the petitioner is diverted to these khandsari units and kolhus. Petitioner has further stated that two purchase centres in dispute which had been reserved in favour of the petitioner since its inception and in spite of the fact that the respondent sugar mill had not demanded the said centres in its proposal filed before the Cane Commissioner, the same have been assigned in favour of respondent, whereas fact of the 3 matter is that the said purchase centres being reserved in favour of the petitioner, same have been developed by the petitioner and they are well connected with the petitioner's mill. Petitioner has stated that it has invested huge money amounting to Rs.84.59 lacs for the development of its cane area and for the present crushing season the proposed expenditure to be made by the petitioner are Rs.117.07 lacs. Petitioner submits that against the unwarranted assignment dated 05.11.2009 made by the Cane Commissioner; appeal had been preferred before the State Government on 10.11.2009. Simultaneously, the petitioner also filed writ petition No.1130 of 2009, but as appeal was already there, writ petition was disposed of directing the State Government to decide the appeal. In the said appeal counter affidavit had been filed and thereafter, the State Government in its wisdom has chosen to dismiss the appeal. At this juncture, present writ petition has been filed, questioning the validity of both the orders.
Supplementary affidavit has also been filed, and therein it has been stated that against the assessed requirement of 43.08 lac quintals by the Cane Commissioner, the cane society operating in the area have offered 32.53 lac quintals only. The cane society, which is the supplier of cane, itself has not more than 31 lac quintals, then as per admitted fact there is more than 25% shortfall in the cane offered by the cane society. Even against the offered quantity actual supply is invariably much less and the petitioner has been made to suffer due to curtailment of its cane area in the past and any further reduction due to curtailment of its reserved area vide order impugned would virtually cripple the petitioner's factory. A chart was also given by the petitioner giving following details:
Sl. Crushing Cane area Cane Cane supply/ Drawl
No. season (Hectare) production (LQ) purchase rate %
(LQ)
01 2005-06 18340 117.39 34.43 29
02 2006-07 15960 96.4 50.50 52
03 2007-08 16364 101.76 43.32 43.32
04 2008-09 15647 90.52 25.89 29
05 2009-10 14285 76.91 - -
Counter affidavit has been filed on behalf of Dhampur Sugar Mills, and therein it has been stated that at present its crushing capacity is 14,000 TCD.
4In exercise of power conferred under Section 12 (2) of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953, the Cane Commissioner has notified/fixed 167.54 lac quintals of sugar cane for the crushing season 2009- 10 for the respondent sugar mill. The sugar cane requirement as notified is 28.1 lac quintals less than the previous year due to short fall in the production of about 14.37% in Moradabad Region. In the last year 195.65 lac quintals sugar cane was fixed for the answering respondent. Aggrieved less fixation, the respondent sugar mill preferred revision before the State Government for enhancement. However, the same was not accepted by the State Government on the ground that the order passed by the Cane Commissioner was equitable order. In the State of U.P. sugar cane is supplied and purchased by the sugar factories on the basis of reservation order passed by the Cane Commissioner /appellate authority under Section 15 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 read with Rule 22 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Rules, 1954. Subject to the availability of the sugar cane in the area reservation order has to be passed by the Cane commissioner. For the said purpose every year bonding policy is issued by the Cane Commissioner under Rule 57 of the the U.P. Sugar Cane (Regulation of Supply and Purchase) Rules, 1954. Said bonding policy provides that drawl percentage of the crushing by the sugar mills should be between 60 and 70. However, from perusal of the reservation order, it is apparent that sugar cane area allotted to the petitioner is at the drawl rate of 55.99%, whereas it is 80% in case of respondent sugar mill, which is contrary to the bonding policy, whereas average drawl of the answering respondent sugar mill in the last five years had been 48.07%. Aggrieved against the inadequate allotment of cane area/quantity of sugar cane as well as reservation/assignment of 36 purchase centres having 7890 hectares cane area (production 42.48 lac quintals to other sugar mills, namely, Bajaj Hindustan Ltd. Billai, Dwarikesh Sugar Industries and Bahadurpur unit of Bijnor, the answering respondent filed three separate statutory appeals under Section 15 (4) of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 before the State Government. These appeals were numbered as Appeal Nos.104 of 2009, 221 and 222 of 2009. With the start of crushing season 2009-10, the respondent sugar mill is facing acute shortage of sugar 5 cane; on average there is 11.84% shortage of sugar cane, whereas in respect of petitioner such shortage is only 0.31%. The Cane Commissioner considering the requirement of all the neighbouring sugar mills has passed reservation order, and looking to the less production of sugar cane in this particular season, requirement of sugar mills has been notified less than the actual requirement and in this way 54 centres having 70.58 lac quintals sugar cane, cane area of 13108 hectares has been taken away/diverted from the respondent sugar mill and assigned to other mills. The purchase centres in question though situated at more distance have been allotted to respondent sugar mills. The answering respondent has already preferred three appeals for restoration/allotment of 36 purchase centres in its favour. In the vicinity of the respondent sugar mill 285 kolhus and 19 crushers are operating having total crushing capacity of about 89.49 lac quintals, which is 42.79% of the total sugar cane production in the area. In respect of answering respondent 14.37% sugar cane requirement has been reduced by the Cane Commissioner over the previous year, whereas comparatively reduction in the allotment of cane production quantity is higher i.e. 19.99%.
In the last crushing season due to non availability of sugar cane, the crushing of the respondent mill was stopped for 822.05 hours (37 days) and the mill could utilize only 41% of its crushing capacity. The answering respondent has also placed a comparative chart between the petitioner and itself, which is as under:
Crushing D H A M P U R S N E H R OA D
Season Canesugar Allotted cane Allotted Canesugar Allotted cane
Required production cane area Required production
2008-09 195.65 261.32 15170 50.29 90.52
2009-10 167.54 209.09 38849 43.06 76.91
+/- -28.11 -52.23 -6321 -7.23 -13.61
percentage -14.37 -19.99 -13.99 -14.38 -15.04
The Cane Commissioner has allotted 38849 hectare sugar cane area having 209.09 lac quintals sugar cane against the requirement of 167.54 lac quintals, however the total cane offered by the respective cane societies, namely cane union Dhampur, Bijnor, Noorpur, Chandpur, Amroha, Nagina, Haldwar, Seohara is much below than the allotted cane i.e. 117.09 lac quintals.
6Thus the respondent sugar mill is in acute shortage of sugar cane in the crushing season 2009-10 and no sufficient cane is available for crushing.
Thus, in the facts of the case it has been stated that no interference is required, as crushing capacity of the respondent sugar mill has been looked into and taken into consideration, and then order impugned has been passed.
Rejoinder affidavit has been filed, and therein the averments made in the counter affidavit has been disputed and that of writ petition has been reiterated; in the shape of Annexure-R.A.1, the copy of letter dated 01.01.2010 addressed to the Cane Commissioner has been appended along with the copy of chart to show and substantiate that in absence of cane factory had remained closed for the hours mentioned therein and copy of the representation of the cane growers has also been appended.
From the side of the Cane Development union Najibabad copy of proposal originally submitted before the Cane Commissioner and subsequent proposal made before the appellate authority has been appended.
To this counter affidavit rejoinder affidavit has been filed and therein it has been stated that resolution was made in favour of petitioner and the same was communicated to the Cane Commissioner on prescribed format and no subsequent decision to the contrary is either contemplated under the Rules or any such contrary decision has been taken by the society by any resolution. Letter dated 01.12.2009 is not based on any resolution of the society and at the best same can be termed as personal information of the Secretary of the society. Said letter had not been sent to the State Government in the present appeal and the same was actually a personal letter. It is stated to have been sent in appeal No.192, which has been filed by Dwarikesh Sugar Industries, Bundki and is a procured letter. The view of the Secretary has been disputed.
Second supplement affidavit has also been filed, and therewith photostat copies of chart and letter signed by six Directors have been appended to show and substantiate that the letter of the Secretary is neither here nor there, and further facts have also been sought to be mentioned that due to acute shortage of sugar cane in the last season the factory had to be closed.
After pleadings aforesaid were exchanged, original record on the basis of which impugned decision was taken has also been produced before the Court, and thereafter present writ petition has been taken up for final hearing 7 and disposal with the consent of the parties.
Sri Ashwani Kumar Mishra, learned counsel for the petitioner, contended with vehemence that in the present case once centres in question, namely Aurangpur Fattehkhan and Bhanera were reserved in favour of the petitioner, then in routine manner looking into the requirement of petitioner that there was shortage of sugar cane, same could not have been assigned to the respondent sugar mill, as has been done in the present case, ignoring the statutory provisions as provided for under Section 15 (1) of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 and the guiding factor provided for under rule 22 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Rules, 1954, as such the orders passed are unsustainable and liable to be quashed.
Countering the said submission, Sri Satish Chaturvedi, Additional Advocate General, Sri Vinod Kumar Rai appearing for respondent sugar mill and Sri Ravindra Singh, Advocate, appearing for the cane union, on the other hand contended that in the facts of the case, looking into the respective cane requirement, taking into consideration the crushing capacity of the respective sugar mills, the shortage of sugar cane this year and interest of the cane growers, rightful orders have been passed, as such no interference be made.
The U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 was enacted with the object of regulating the supply and purchase of sugar cane required for the use in Sugar Factories (or Gur Rab and Khandsari Sugar Manufacturing Unit) and other connected matters. The Supreme Court had an occasion to test the constitutionality of the Act in the case of Ch. Tika Ramji v. State Uttar Pradesh, reported in AIR 1956, wherein the Supreme Court after tracing the history of enactment upheld the validity of the Act and upheld the powers of Cane Commissioner under the Act in the matter of Regulation of Supply and Purchase of sugar cane to the Sugar factories and other sugar manufacturing units. The main purpose of the Act is to provide mechanism for reasonable, necessary, sufficient and continuous supply of sugar cane to the sugar factories in the crushing season keeping in mind the interest of the Cane Growers, Cane Growers Cooperative Societies, the sugar factories and also inter se interest of the sugar factories. The supply of sugar cane to the sugar factories in the quantity which may be reasonably required by them for 8 production in a particular season or seasons is to be regulated by the provisions of this Act. While watching the interest of the sugar cane growers' it is implicit an obligatory upon the authorities to strike a balance in the interest of sugar factories and cane growers. Since there may be sugar factories more than one in number, which may claim certain areas as the reserved area looking to their location, the obligation extends upon the authorities to watch the inter se interest of such sugar factories also. It has been held by the Supreme Court in Purtapur Company Ltd. Cane Commissioner of Bihar, AIR 1970 SC that the decision of Cane Commissioner in dispute relating to reservation of areas between two parties is quasi judicial.
At this juncture the provisions of Sections 2(a), 2(n), 2(i), 2 (k), 12, 15, 16 and 17 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 are being extracted below:
"2(a) "assigned area" means an area assigned to a factory under Section 15;
2(n) "Reserved area" shall mean an area reserved for a factory under an order of reservation of Sugarcane areas made under Rule 125-B of the Defence India Rules 1962 and when no such order is in force, the area specified in an order made under Section 15;
2(i) "Crushing season" means the period beginning on the 1st October in any year and ending on the 15th July next following;
2(k) "occupier" in relation to a factory or gur, rab or khandsari sugar manufacturing unit, means the person (including a company firm or other association of individuals) who, or the authority which, owns or has the ultimate control over the affairs of such factory or unit where the said affairs are entrusted to a Managing Agent or a Director or other Officer of such person or authority, includes such Managing Agent,Director or other officer:
Explanation- Notwithstanding that the affairs of a factory or unit are entrusted to a Managing Agent or Director or other officer, the liability under Section 17 of the person, who or the authority which owns or has the ultimate control over the affairs of the factory or unit shall remain unaffected.
"12. Estimate of requirements: (1) The Cane Commissioner may for the purposes of Section 15, by order, require the occupier of any factory to furnish in the manner and by the date specified in the order to the Cane Commissioner an estimate of the quantity of cane which will be required by the factory during such crushing season (or crushing seasons) as may be specified in the order.
(2) The Cane Commissioner shall examine every such estimate and shall publish the same with such modification, if any, as he may make.
(3) An estimate under sub-section (2)may be revised by an authority to be prescribed."
15. Declaration of reserved area and assigned area.- (1) Without prejudice to any order made under Clause (d) of sub- section (2) of Section 16 the Cane Commissioner may, after consulting the factory and Cane Growers' Cooperative society in 9 the manner to be prescribed:
(a) reserve any area (hereinafter called the reserved area): and \
(b) assign any area (hereinafter called the assigned area), for the purposes of supply of cane to a factory in accordance with the provisions of Section 16 during one or more crushing seasons as may be specified and may likewise at any time cancel such order or alter the boundaries of an area so reserved or assigned.
(2) Where any area has been declared as reserved area for a factory, the occupier of such factory shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory.
(3) Where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of the cane grown in that area and offered for sale to the factory, as may be determined by the Cane Commissioner.
(4) An appeal shall lie to the State Government against the order of the Cane Commissioner passed under sub-section (1).
16. Regulation of purchase and supply of cane in the reserved and assigned area.- (1) the State Government may for maintenance and supplies, by order, regulate-
(a) the distribution, sale or purchase of any cane in any reserved or assigned area; and
(b) purchase of cane in any area other than a reserved or assigned area.
(2) Without prejudice to the generality of the foregoing powers such order may provide for-
(a) the quantity of cane to be supplied by each Cane-
grower or Cane-growers' Cooperative Society in such area to the factory for which are has so been reserved or assigned;
(b) the manner in which cane grown in the reserved area or assigned area, shall be purchased by the factory for which the area has been so reserved or assigned and the circumstance in which the cane grown by a cane-
grower shall not be purchased except through a cane growers' Cooperative society;
© The form and terms and conditions of the agreement to be executed by the occupier or manager of the factory for which an area is reserved or assigned for the purchase of cane offered for sale;
(d) the circumstance under which permission may be
granted-
(i) for the purchase of cane grown in reserved or
assigned area by a Gur, Rab or khandsari
manufacturing unit or any person or factory other
than the factory for which area has been reserved
or assigned, and
(ii) for the sale of cane grown in a reserved or
assigned area to a Gur, Rab or khandsari
manufacturing unit or any person or factory other
than the factory for which area is reserved or
assigned;
(e) such incidental and consequential matters as may
appear to be necessary or desirable for this purpose.
17. Payment of cane price- (1) The occupier of a factory shall make such provision for speedy payment of the price of cane purchased by him as may be prescribed.
10(2) Upon the delivery of cane the occupier of a factory shall be liable to pay immediately the price of the cane so supplied together with all other sums connected therewith.
(3) Where the person liable under sub-section (2) is in default in making the payment of the price for a period exceeding 15 days from the date delivering, he shall also pay interest at the rate of 7 ½ % per annum from the said date of delivering, but the cane Commissioner may, in any case, direct, with the approval of the State Government, that no interest shall be paid or be paid at such reduced rate as he may fix:
Provided that in relation to default in payment of price of cane purchased after the commencement of this proviso, for the figure 7 ½ the figure '12' shall be deemed substituted.
(4) The Cane Commissioner shall forward to the Collector a certificate under his signature specifying the amount of areas on account of the price of cane plus interest, if any, due from the occupier and the Collector, in receipt of such certificate, shall proceed to recover from such occupier the amount specified therein as if it were an arrears of land revenue.
(5) (a) Without prejudice to the provisions of the foregoing sub-sections, where the owner or any other person having control over the affairs of the factory or nay other person competent in that behalf enters into an agreement with a bank under which the bank agrees to give advance to him on the security of sugar produced or to be produced in the factory, the said owner or other person shall provide in such agreement that a percentage determined by such authority and in such manner as may be prescribed of the total amount of advance shall be set apart and be available only for repayment to cane growers or their co-
operative societies on account of price of sugar cane purchased or to be purchased for the factory during the current crushing season from those cane growers or from or through those societies, and interest thereon and, such society, commission in respect thereof.
(b) Every such owner or other person as aforesaid shall send a copy of every such agreement to the Collector within a week from the date on which it is entered into."
In exercise of powers conferred by Section 23 of the Act, the State Government has framed U.P. Sugarcane (Regulation of Supply and Purchase) Rules 1954 (hereinafter called as the Rules). Rules 21 and 22 of the Rules reads as follows:
"21. (1) The occupier of a factory shall apply to the Cane Commissioner in Form I, Appendix-III for the reservation or assignment of an area for supply of cane to the factory for one or more crushing seasons falling over the period of reservation and assignment.
(2) Every such application shall be accompanied by a Treasury receipt showing that a fee at the rate of Rupees One thousand for each crushing season has been deposited in local treasury. (3) Every such application shall be accompanied by a Treasury receipt showing that a fee of rupees two has been deposited in local treasury.
"22. In reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory, under Section 15, the Cane Commissioner may take into 11 consideration-
(a) the distance of the area from the factory,
(b) facilities for transport of cane from the area,
(c) the quantity of cane supplied from the area to factory in previous year
(d) previous reservation and assignment orders,
(e) the quantity of cane to be crushed in the factory
(f) the arrangement made by the factory in previous year for payment of cane price and commission,
(g) the views of the Cane Growers' Co-operative Society of the area
(h) efforts made by the factory in developing the reserved or assigned area."
Under the provisions contained in the U.P. Sugarcane (Regulation of supply and purchase) Act, 1953, the words 'assigned area', 'cane', 'reserved area' and 'crushing season' stand detailed. The 'assigned area' according to Section 2 (a) of the Act means an area assigned to a factory under Section 15 of the Act, 'cane' according to Section 2 (c) means sugarcane intended for use in the factory or Gur or Rab, or Khandsari sugar factory unit, 'reserved area' according to Section 2 (n) shall mean the area reserved for a factory under an order of reservation of sugar cane area made under rule 125-B of the Defence of India Rules, 1962 and when no such order is in force, the area specified in an order made under Section 15 of the Act, the 'crushing season' according to Section 2 (1) of the Act means as period beginning on the 1st October in any year and ending on the 15th July next following.
The provisions contained in Section 12 of the Act stipulate that the Cane Commissioner may for purpose of section 15 by order require the occupier of a factory to furnish in the manner and by the date specified in the order to the Cane Commissioner an estimate of the quantity of cane which will be required by the factory during such crushing season or crushing seasons as may be specified in the order and it further stipulates publication thereof with or without modification which estimate can also be revised. The provisions contained in Section 14 of the Act stipulate that the State Government may for purpose of Section 15 by order provide for a survey to be made of the area proposed to be reserved or assigned for the supply of cane to a factory. The provisions contained in Section 15 of the Act stipulates that the Cane Commissioner may after consulting the factory and cane Growers Cooperative Societies reserve any area called reserved area and assign any area called assigned area for the purpose of supply of cane to a factory in accordance 12 with Section 16 during one or more crushing season as may be specified and may likewise at any time cancel such order or alter the boundaries of an area so reserved of assigned. It also provides that when any area has been declared reserved for a factory, the occupier of such factory, if so directed by the Cane Commissioner purchased all the cane grown in that area which is offered for sale to the factory. It further stipulates that where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner. Section 15 of the Act envisages that the order assigning or reserving any area has to be made after consulting the Factory and Cane-growers Cooperative Society. The ownership of the Cane vests with the grower and normally he is entitled to sell the same to any one he likes, and naturally he would like to sell the Sugarcane to the person who offers him the best price without any delay. The Act, however imposes a restriction upon him and by virtue of an order issued under Sub-section (1) of Section 15 the Cane grower is compelled to sell his sugarcane to the factory to whom his area has been assigned or reserved. The Legislature has enacted Section 17 which makes provision for immediate payment of price to the seller of sugarcane. Therefore, promptness with which price is paid is a very important factory which has to be kept in mind at the time of passing of an order assigned or reserving any area in favour of a sugar factory. The Cane-growers Cooperative Society is expected to watch the interest of the produces and it is for this reason that it is obligatory upon the Cane Commissioner to consult the Society before passing any order of assignment or reservation. The heading of Section 15 is 'Declaration of reserved area and assigned area'. The right and forum of appeal against the order of the Cane Commissioner made under sub-Section (1) of Section 15 have been provided in sub-Section (4) of the same section. It, therefore, follows that the State Government has also to hear the concerned factory and Cane-growers Co-operative Society while deciding an appeal. The provisions contained in section 16 of the Act stipulate that the State Government may for maintaining supplies by order require the distribution, sale or purchase of any cane in any reserved or assigned area and purchase of cane in any area other than a reserved or assigned area, and may prescribe the quantity of cane to 13 be supplied by each cane grower or cane Growers Cooperative Society in such area to the factory for which the area has been reserved or assigned and the manner in which the cane grown in the reserved area or assigned area shall be purchased by the factory for which the area has been so reserved or assigned etc. the provisions contained in Section 17 of the Act stipulate imposition of various liabilities on the factories.
Rules 21 obliges the occupier of a factory to apply to Cane Commissioner in form Form I, Appendix-III for the reservation or assignment of an area for supply of cane to the factory for one or more crushing seasons falling over the period of reservation and assignment. Rules 22 gives some guidelines as to how the power of assigning or reserving any area has to be exercised by the Cane Commissioner. It mentions several factors which have to be taken into consideration. Apart from the distance of the area from the factory, the facility of transport, previous reservation and assignment orders, quality of cane to be crushed in the factory views of the Cane-growers Co- operative Society, arrangements made by the factory for payment of price etc. in previous years and efforts made by the factory in developing the area have also to be taken into consideration. Sub-rule (b) lays emphasis upon facilities for transport which is also important inasmuch as in a given case an area may be at a shorter distance from one factory than another but on account of better facility of transport it may be more convenient for the Cane-growers to supply sugarcane to the factory which is at is greater distance. Similarly sub-rule (f), which makes the payment of price in earlier years relevant, is very important from the point of view of cane growers. If the factory has defaulted in payment of price and the dues of the Cane-growers are not paid for a long time, they would not be willing to supply their produce to such a factory. Prompt payment of price is of primary importance to the Cane-growers as it takes almost a year before sugarcane crop is ready for harvesting. The cane-growers who have nurtured their crop for about a year would not like to wait for further period, if they have made the supply to the sugar factory. Under sub-rule (h) effort made by the factory in developing the area for producing more and better quality of cane also becomes relevant. If a factory has invested heavy amount in developing an area as a result whereof the quality of sugarcane has improved, naturally it would like the said came to be supplied to its factory. The provisions 14 of the Act and Rules show in unmistakable terms that the order for assignment or reservation of an area has to be passed after taking into consideration various factors and it cannot be based upon one solitary consideration.
The provisions quoted above are not new to this Court, as before this Court, such issues have been consistently raised and are virtually in the shape of annual events. This Court has taken note of the provisions of 1953 Act and the rules framed thereunder and has held that real purpose of the Act is to ensure the maintenance of reasonable supply of sugarcane to sugar producers in order to secure a reasonable return on their overall production. In the case of M/S Basti Sugar Mills Ltd. Vs. State of U.P., 1994 HVD (All) Vol II: 1994 All. L.J. 846, this Court has taken the view that purpose of Act is to regulate supply and purchase of cane for sugar factories, and while doing so interest of not only cane grovers and sugar producing factories but interest of sugar producing factories interse is also to be protected, and the way and manner in which such exercise is to be undertaken. Relevant paragraphs 17 to 24 are being quoted below:
"17. A perusal of the various provisions of the Act clearly indicate that while regulating the supply and purchase of the cane for the sugar factories the interests of not only the cane growers and the sugar producing factories but interests of the sugar producing factories interse also has to be protected and further healthy relations between occupiers and managers of factories Cane growers, Cane Growers Cooperative Societies, Cane Development Council has also to be secured. Those provisions have the effect of creating various rights and imposing various liabilities on the sugar factories and the cane growers.
18. On a consideration of the various provisions of the Act and the scheme underlying them as well as the Rules framed thereunder it seems to me that the real purpose is to ensure the maintenance of a reasonable supply of sugar cane to the sugar producers in order to secure a reasonable return on their over all production and investment provided the units are run economically securing on the other hand the interest of the cane growers. The provisions of the Act read together with the Sugar Cane Price Control Order make it abundantly clear that the cane price has to be fixed for determining the fair costs of the production of sugar in order to maintain regular supply of sugar it is necessary to have a regular supply of sugar cane. The supply of sugarcane depends upon the area actually brought under sugar cane cultivation. The agriculturist should have necessary incentive to grow sugarcane instead of other crops. It is in this view of the matter that the minimum price for the sugarcane which the producer of sugar should pay to the sugarcane grower on a future date has to be fixed.
19. The reservation or assignment of an area contemplated under the Act requires a detailed exercise involving the preparation of 15 estimate of the availability of cane, its quantity extent of expected recovery of sugar effective duration of the crushing season, quantity of sugarcane crushable by sugar factories, the estimates of sugar production and likely working condition that will prevail in the particular season. In addition to the factors enumerated in Rule 22 of the Rules framed under the Act which stipulates that while reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory under section 15 the Cane Commissioner may take into consideration the distance of the area from the factory, facilities for transport of the cane from the area, the quantity of cane supply for the area to factory in previous year, previous reservation and assignment orders the quantity of cane to be crushed in the factory, the arrangements made by the factory in previous year for payment of purchase tax cane price and commission and the views of the Cane Growers Cooperative Societies of the area and the buildings made by the factory in developing the reserved or assigned area.
20. The order of the Cane Commissioner dated 01.11.1993 was based on the estimates as indicated herein before and had been passed before the crushing season started. The facts and figures on the basis of which these estimates are prepared before the start of the crushing season may very during the progress of the season and the actualities and the developments which come to light with the progress of the crushing season and have a bearing on the estimates on the basis whereof the orders regarding reservation and assignment are passed before the beginning of the season cannot be ignored. In fact determination of the area to be reserved and assignment to be effected has to be continuous process depending upon the exigencies of the situation and the changing factors which come to the light with the progress of the crushing season. The factors on which the estimates are chalked out before the beginning of the crushing season may very during the progress of the crushing season and in order to adjust the equities such the developments which take place and new factors which come to light if brought to the notice of the concerned authorities may justify alterations and modifications in the boundaries of the reserved area or may warrant change. In the assignment orders at the beginning of the season. The scheme of the Act vests the authorities concerned with ample jurisdiction to vary or alter the reserved or assigned area during the currency of the crushing season to meet the exigencies of the situation. This is obvious from what has been specifically provided for in sections 15 and 16 of the Act.
21. In the present case that is obvious is that on the basis of estimates the Cane Commissioner had before the start of crushing season reserved an area comprising of nine purchase centers including "Tlnlch" in favour of the petitioner but had assigned the purchase Centre Tlnlch to the respondent sugar company. The word "assign" is a word of widest significance in respect to the nature of the transfers to which it relates. It was so observed by a Full Bench of this Court in its decision in the case of Behari Lal and others Versus Mohammad Muttakl reported in 20 ILR 482. It can safely be held that to assign means transfer from "A" to "B" of one or more obligations that "A" owed to "B". It vests in the assignee the right and remedies in respect of the subject matter. In the context of the various provisions of the Act and in view of the scheme underlying, it the "assignment"16
contemplated under Section 15 or 16 of the Act has to be of a temporary face or nature to begin with which in the exigencies of the situation may be continued during the entire period of the crushing season or can be done away with all depending upon the development which take place during that period. The fact remains that once an area is reserved for a particular factory, in the absence of any special reasons justifying the adoption of this temporary measure of assignment of an area carved out of the reserved area in favour of a factory to a factory other than the one for whose benefit the area had been reserved there can be no justification for depriving the factory for whom the area had been reserved from the benefits accruing under the reservation order made in its favour. It is incumbent upon the authorities concerned to ascertain from time to time and specially when called for by the aggrieved party to find out whether the special circumstances justifying the assignment still continue to exist so as to maintain the continuance of the assignment and continue depriving a factory of the benefits of the entire area reserved in its favour it seems to me that it is he duty of the answering respondents while carrying out the public law function to hold the balance fairly between competing sections of the public that cane growers in the present case and the sugar manufacturers producers on the one hand and the sugar producers interse as well on the other hand. A delicate just and equitable balance has to be struck protecting the competing interests of the sugar producers and cane growers and even sugar producers inter se and at the same time ensuring that public in general does not suffer on account of any fall in the production of sugar, while striking the aforesaid just and equitable balance it has to be kept in mind that the economic viability of the sugar factory/sugar producers is not unduly jeopardized.
22. It has to be emphasized that the above aspect cannot be lost sight of as the law does not operate in a vacuum and the language of a statutory provision is not a static vehicle of ideas and concepts. It cannot be interpreted without taking into account the social economic and political setting in which it is intended to operate. The provisions of the statute must be invested with a meaning which will harmonize the law with the prevailing concepts and values and make it an effective instrument of delivering justice.
23. It may further be emphasized that where an Act imposes a duty it is always implied that unless the contrary intention appears the duty is to be performed from time to time as occasion arises. As an appellate authority being vested with the jurisdiction which is coextensive with that of the Cane Commissioner the respondent No. 1 ought to have taken into account all the factors indicated herein above in order to arrive at a correct conclusion and arrangement should have been secured based on objective criterion founded on relevant material.
24. I am further of the view that the factors mentioned in rule 22 of the Rules framed under the Act only provides guidelines which are not exhaustive but are only enumerative. Further any single factor mentioned therein cannot be taken to be conclusive but a cumulative effect of all the factors has to be taken into account along with the other relevant criteria and material including the developments which take place during the currency of the crushing season in order to arrive at a conclusion while striking a delicate, just and equitable balance between the competing 17 interest in the matters relating to reservation of an area or assignment of an area as indicated herein before."
Division Bench of this of this Court, in the case of Simbholi Sugar Mills Ltd. vs. Appellate Authority and others, 2000 (3) AWC 1867, has recognised the case of Basti Sugar Mill (supra) and has not at all approved, under the scheme of things provided for, simultaneous assignment along with reservation order. Relevant extract of the said judgment as contained in paragraphs 15, 16, 17 and 18 is being quoted below:
"15. We are of the opinion that the Basti Sugar Mills case (supra) cannot be deemed to be an authority to return a finding that reservation of a centre in favour of factory and its simultaneous assignment in favour of another is contemplated or warranted under the scheme of the Act. Really speaking, in the said case, the Court did not address itself to this pointed question which is in real controversy presently before us. The scheme of the Act and Rules indicates that the Cane Commissioner for the purpose of Section 15 may by order require the occupier of the factory to furnish an estimate of the quantity of sugar cane which could be required by it during such crushing season or crushing seasons as may be specified in the order. Section 14 of the Act stipulates that the State Government, may for the purpose of Section 15, by order provide for a survey to be made of the area proposed to be reserved or assigned for supplying cane to a factory. It is after consideration of the estimate and all other relevant factors as per Rule 22 that reservation or assignment is made. As per the estimate, there was shortage of sugar cane for Simbhaoli Sugar Mills. Reservation of a centre in favour of a factory and simultaneous assigning it to another renders the reservation to be nugatory, meaningless, redundant and otiose. It would tantamount to giving by one hand and taking away by the other. No doubt, the assignment in favour of another factory can be only when there exists a reservation order in favour of some factory but it must be justified by some subsequent eventuality. For example, there may be break down in the factory for which a particular purchase centre is reserved; it may become in- operational for a certain period during a crushing season or myriad reasons; or it might not be making sufficient drawls from the area reserved for it. We have just cited some examples which may provide an occasion for assigning the centres in favour of a factory which had been reserved for the other. Reservation of centres in question had been made in favour of Simbholi Sugar Mills on consideration, inter alia, of its crushing capacity and sugar cane that was to be available to it from the centres reserved for it and the same could not be simultaneously assigned to Agauta Sugar and Chemicals. The situation would have been different, had the centre in question been assigned to Agauta Sugar and Chemicals at some later stage (subsequent to the same having been reserved for Simbholi Sugar Mills) consequent upon arising of any such eventuality as we have exemplified above. The mere fact that there was shortage of sugar cane for Agauta Sugar and Chemicals also could not clothe the Cane Commissioner with the power of simultaneously assigning some of the reserved centres of Simbholi Sugar Mills in favour of Agauta Sugar and Chemicals.
16. It should also be noted that in exercise of powers conferred 18 by Section 16 of the Act, U.P. Sugarcane (Supply and Purchase) Order, 1954, has been promulgated. Under clause 3 of the said Order the occupier of a factory is required to give an estimate by 31st October to the Cane Commissioner about the quantity of cane that is required by it. Under Clause 3 (2), a cane grower or cane growers' Cooperative society may within 14 days of the issue of an order by the Cane Commissioner reserving or assigning an area under Section 15 of the Act, has to make an offer to supply the cane grown under the said reserved area to the occupier of the factory. Clauses 3 and 4 talk about the agreement to be entered into in the prescribed form between the occupier of the factory and the Cooperative societies of the reserved area for the purchase of sugar cane. The purchase of sugar cane has to be for the entire crushing season and there is also a stipulation that the cane grown in the reserved or assigned area of a sugar factory shall not be purchased by any other person except the sugar factory concerned. It is gleaned from the various provisions of the Act,Rules and the above referred Order of 1954 that various factories submit an estimation of their requirements according to their crushing capacity on the basis of which Cane Commissioner passes the order of reservation. The philosophy is to ensure the maintenance of reasonable supply of sugar cane to the sugar producers and securing, on the other hand, the interest of the cane growers.
17. Reservation order has been passed in favour of Simbholi Sugar Mill (including nine disputed purchase centres which came to be assigned to the Agauta Sugar and Chemicals) on the estimates submitted by it. The situation could vary during the currency of crushing season Actualities and developments could surface with the progress of crushing seasons which could have bearing on estimates on the basis whereof the reservation order had been passed in favour of Simbholi Sugar Mills. The assignment of certain centres reserved for Simbholi Sugar Mills during the currency of the crushing season could be warranted upon the exigencies of the situation and the changing factors coming to light with the progress of the crushing seasons, but simultaneous assignment of the reserved centres in favour of another factory could not be possible. There is a purpose behind the assignment at a later stage during the currency of crushing seasons. That purpose is to safe guard the interest of cane growers. If some eventuality happens that the factory for which a particular area has been reserved and it is not able to make sufficient drawls or there is break down for some reason or the other, then the cane growers should not suffer and their produce is diverted to be purchased by another factory by making assignment in its favour. Truly speaking the assignment is a temporary phenomenon arising out of exigencies and developments coming to light during the progress of currency of crushing season. On giving our thoughtful consideration to the various provisions of the Act, Rules and Order of 1994, we have no manner of doubt that simultaneous assignment in favour of a factory in respect of an area reserved for the other is not at all contemplated.
18. Resultantly, the simultaneous assignment of nine purchase centres, namely Iklandi, Inayatpur, Karothi, Chitsona, Dhakole, Banboi, Sathala, Tibra and Tiana by the Cane Commissioner in favour of Agauta Sugar and Chemicals which had been reserved for Simbholi Sugar Mills by order dated 25.10.1999 (Annexure-5 to the writ petition No.53640 of 1999) has to be quashed. It has already been clarified that the purchase centre Partapur had not 19 been reserved for Simbholi Sugar Mills and as such it could not ventilate any grievance as to its assignment in favour of Agauta Sugar and Chemicals. The Simbholi Sugar Mill, which is the petitioner in writ petition No.53640 of 1999 is not entitled to any other relief."
In the case of Mawana Sugar Ltd. vs. State of U.P and others, Civil Misc. Writ petition 12786 of 2006 decided on 20th March, 2006, this Court while considering the question of reservation/assignment has taken the view, what is necessary to be considered by the authorities while reserving/ assigning cane centres in favour of sugar mills, is its crushing capacity, cane requirement, cane availably and only in special circumstance an exercise of assignment must be taken and not as a matter of course. Paragraphs 10 to 15 of the aforesaid jdugment are being quoted below:
"10. What is necessarily to be considered by the authorities while reserving and assigning the cane centres in favour of a sugar mill, is its crushing capacity, cane requirement, cane availability etc. For proper perusal of the said relevant factors the comparative position of the two mills in question is given in the chart below:-
"DETAILS PETITIONER-MILL RESPONDENT-MILL Crushing Capacity 11000 TCD 8000 TCD Cane Requirement (assessed on 5.7.2003 u/s 12) 180 lac quintals 140 lac quintals Drawal percentage (as per reservation order) 61% 74% Production of cane per hectare 680.20 quintals 680.20 quintals Required yield of cane in the area reserved or assigned 295.80 lac qtls. 189.18 lac qtls.
Total required yield to be available from 43,381 hectares 27,813 hectares Area allotted(reserved or assigned) by R.O. 43,750 hectares 28,218 hectares Available yield of cane from allotted area (as per drawal percentage) 297.28 lac qtls. 191.94 lac qtls.
Area of the disputed 7 cane centres = 624 hectaresYield of cane from such areas = 4.26 lac quintals
11. First of all the basic question to be considered is as to whether, under the scheme of the Act and Rules framed thereunder, the concept of reservation of an area in favour of one sugar mill and simultaneous assignment in favour of another sugar mill is at all permissible. For this, the relevant section 15 of the Act may first be considered, which is quoted below:-
"15. Declaration of reserved area and assigned area.- (1) Without prejudice to any order made under Clause (d) of sub-section (2) of Section 16 the Cane Commissioner may, after consulting the Factory and Cane-growers' Cooperative Society in the manner to be prescribed:
(a) reserve any area (hereinafter called the reserved area); and
(b) assign any area (hereinafter called an assigned area), for the purposes of the supply of cane to a factory in accordance 20 with the provisions of Section16 during one or more crushing seasons as may be specified and may likewise at any time cancel such order or alter the boundaries of an area so reserved or assigned.
(2) Where any area has been declared as reserved area for a factory, the occupier of such factory shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory.
(3) Where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner.
(4) An appeal shall lie to the State Government against the order of the Cane Commissioner passed under sub-section (1)."
12. While passing an order under sub-section (1) of section 15 of the Act, the Cane Commissioner is obliged to balance the interests of the sugar mills and the cane growers of the area. For this it is necessary to ensure that there is a reasonable supply of cane maintained for the sugar mills as per their comparative requirements, and also that the cane growers get a fair return for such supply.
13. The said sub-section (1) authorizes that the Cane Commissioner may ''at any time', cancel such order or alter the boundaries of an area so reserved or assigned. In the context in which it has been used, the phrase ''at any time' here would normally mean, at any time, after the passing of the reservation order and during the commencement of the crushing season. Assignment is a temporary phenomenon which has to be resorted to for certain valid and justifiable reasons (e.g. where there may be a break down in the factory or because of certain legal impediments, the factory may close down during the crushing season), and in such contingency, in order to safeguard the interest of the cane-growers, the cane area/centres may be assigned to another mill for the remaining part of the season.
14. Under sub-section (3) of section 15 of the Act, the factory in whose favour the area is assigned, is obliged to purchase "such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner". On the contrary, sub-section (2) of section 15 provides that the factory, in whose favour the area is reserved, "shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory." From the above it is clear that after ''reservation' or ''assignment' of an area/cane centre in favour of a sugar mill, the obligations cast on the sugar mill are distinct. When an area is reserved for a sugar mill, it is obliged to purchase all the cane grown in the area which is offered. A duty is further cast on the sugar mill to develop such area for its own benefit, by increasing the production of cane, and also for the benefit of the cane growers. For such purpose, the sugar mills make investments in its reserved areas by providing special quality of seeds to the farmers, constructing roads and culverts in the area, etc. There is no such obligation of development of the area cast on the sugar mill in whose favour such area is assigned nor is such sugar mill obliged to purchase all the cane which is produced in the area, as under the Act, it is to purchase only such quantity of cane which is offered to it by the Cane Commissioner.
2115. In the said situation, if an area is reserved in favour of one mill and simultaneously, in a routine manner, assigned in favour of another mill, none of the two sugar mills would invest for the development of the area, thereby resulting in loss to the cane growers and also to the yield of cane in the area. Such action, of reservation in favour of one sugar mill and simultaneous assignment to another mill, in a casual manner and in routine course, without assigning any adequate reason, is wholly unwarranted. There may be special circumstances where such simultaneous assignment, after reservation in favour of a mill, may be required, but only for special reasons. Like in the present case, where certain centres had been reserved in favour of two new sugar mills and simultaneously assigned to the respondent-mill till the start of the crushing operations by the new sugar mills, would be justified. The same was for a valid and justified reason, which was for the benefit of the cane-growers', who could not have been left in the lurch and made to retain the sugarcane with them till the new sugar mills commence their crushing operations. In exceptional cases, there could be other reasons also for making such reservation and simultaneous assignment, but in the absence of any such reason having been assigned, the simultaneous assignment of the seven disputed cane centres for the respondent-mill, after reserving them for the petitioner-mill, cannot be justified in law. The same is against the spirit of the Act and the Rules framed thereunder, as it would frustrate the purpose of reserving a cane centre for a sugar mill, without permitting it to purchase cane from such centre.
16. A Division Bench of this court in the case of Simbhaoli Sugar Mills Ltd. (supra) has held that "the assignment of certain centres reserved for Simbhaoli Sugar Mills during the currency of the crushing season could be warranted upon the exigencies of the situation and the changing factors coming to light with the progress of the crushing season, but simultaneous assignment of the reserved centres in favour of another factory could not be possible. There is a purpose behind the assignment at a later stage during the currency of crushing season. That purpose is to safeguard the interest of cane growers. ...... ...... ...... Truly speaking the assignment is a temporary phenomenon arising out of exigencies and developments coming to light during the progress of currency of crushing season. ...... ...... ...... We have no manner of doubt that simultaneous assignment in favour of a factory in respect of an area reserved for the other is not at all contemplated."
18. Even otherwise, before the passing of the reservation order declaring an area to be reserved or assigned in favour of a sugar mill, it is necessary to obtain the views of and consult the Cane- growers' Cooperative Society as well as the factories (sugar mills). In the present case, the seven cane centres in dispute were not even included by the respondent-mill in its proposal for reservation, on consideration of which the Cane Commissioner passes the reservation order. Further, the Cane-growers' Cooperative Society had also proposed that, for the present crushing season, the said cane centres should be reserved in favour of the petitioner-mill. As such also, in the aforesaid facts, there does not appear to be any justification of providing cane from these centres to the respondent-mill."
22On the parameters as set out, the facts of the present case are being adverted to. In the present case undisputed position is that two cane centres reserved in favour of the petitioner, namely, Aurangpur Fattehkhan and Bhanera, by the same order have been assigned in favour of respondent Dhampur Sugar mill. The facts which are reflected in the present case are that in respect of petitioner's mill for crushing season 2009-10 on demand note set up by the petitioner on 16.09.2009 as is provided for under Section 12 (2) the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953, estimate of requirement for purposes of Section 15 of the said Act was declared to be 43.08 lac quintals. Said order passed under Section 12 (2) of the Act has attained finality, inasmuch as after the estimate of requirement had been prepared, at no point of time validity of the said estimate of requirement had ever been disputed and at no point of time any revision as is provided for under Section 12 (3) of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 had ever been preferred. In the last crushing season, the petitioner sugar mill had started its operation since 16.11.2008 and finished the same on 21.03.2009, and total crushing days were 106; from the cane reserved area of the petitioner 90.52 lac quintals sugar cane was estimated and drawl rate was 29%, but only 25.89 lac quintals of sugar cane could be made available. The cane Commissioner while passing order under Section 15 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 has taken into account that there had been delay in payment of cane price and on account of the fact that less interest had been shown by the farmers in the crop of sugar, as a result of which there is decrease in sugar cane production, as such in respect of petitioner's reserved/assigned area there are possibilities of 10.48 less growth. Cane Commissioner has proceeded to mention that taking into account the geographical condition of the area, facility of conveyance, mode of payment of cane price, proposals received from cane societies and farmers, drawl in the mill area and production of sugar cane and its availability for sugar mills decision has been taken and the petitioner mill could be allotted 76.91 quintals of sugar cane from an area of 14285 hectare. Along with the decision table in question has also been appended. Page 48 of the paper book shows that centres, Aurangpur Fattehkhan and Bhanera, have been assigned to the respondent Dhampur Sugar mill. Qua respondent Dhampur Sugar mill also in 23 exercise of the authority vested under Section 12 (2) of the Act estimate of requirement has been prepared for 167.54 lac quintals of sugar cane. It has been further mentioned that last year Dhampur Sugar Mill started its crushing on 18.11.2008 and it came to an end on 23.03.2009 with 126 crushing days from its reserved/assigned area from where availability of 263.12 lac quintals of sugar cane was estimated; 39% drawl was made and 103.13 lac quintals of sugar cane was crushed. The Cane Commissioner has proceeded to mention same facts which were mentioned in the reservation order passed under Section 15 of the Act qua the petitioner, and then has proceeded to mention that qua Dhampur Sugar mill there are possibilities of 17.19 % fall in the crop of sugarcane, and thereafter, it has proceeded to mention that the said sugar mill can be allotted 209.09 lac quintals of sugar cane. It has been mentioned that for the said purpose area requirement would be 38849 hectare and then reservation order has been passed with various assignments, made therein also. Petitioner is aggrieved by the action of the Cane Commissioner by contending that there has been shortfall in the sugar cane as far as petitioner is concerned, and in this background the area reserved for it could not have been assigned to respondent sugar mill simultaneously as has been done in the present case and that too ignoring the provisions of Rule 22 of the Rules.
Simultaneous assignment, after reservation order has been passed, in casual manner and in routine course is not at all approved of, and only in special circumstances such an exercise is to be undertaken. Such special circumstances should be reflected either from the orders passed or from the record produced, keeping in view the crushing capacity of mill, cane requirement, cane availability, including the interest of cane growers. Such special circumstances have been taken note of in the judgment of Simbholi; Mawana quoted above.
In the present case, the appellate authority has proceeded to mention that the Cane Commissioner has taken into account each and every aspect of the matter while proceeding to pass the order of reservation/assignment, and in sugar cane production, there are possibilities of 10.48% and 17.19% reduction, as such there is difference in allocation of sugar cane area. Further mention has been made that order of reservation is not in the nature of permanent lease, and in the event of shortage of sugar cane to other mill, 24 assignment can be made. It is true that order of reservation is not in the nature of permanent lease (See M/S Triveni Engineering Workers v. Union of India, AIR 1996 All. 420, but the said aspect of the matter is not be looked into isolation, as when an area is reserved for sugar mill, it is obliged to purchase allthe cane grown in the area, which is offered for sale to the factory. A further duty is cast upon the sugar mill to develop such area for its own benefit, by increasing the production of cane and for benefit of cane growers. For such purpose the sugar mills make investment, in its reserved area. Here, petitioner claims to have invested Rs.84.59 lacs for its cane area, by providing special quality of seeds to farmers and constructing road and culvert in the area. Vis-a- vis assignees, no such obligation is cast upon, either of development or either of entire purchase, and assignee is to purchase only such quantity of cane which is offered to it by the Cane Commissioner. In view of the corresponding obligations cast upon, special reasons ought to have been assigned as to why simultaneous order of assignment was necessary, and specially in the backdrop when petitioner itself was claiming shortfall of sugar cane, and cane growers had given resolution in their favour, which has been subsequently disputed before this Court. Before this Court, the petitioner has tried to bring chart to show the impact of short supply of sugar cane. As special reasons are lacking, and over all picture has not at all been adverted to, as was raised by the petitioner, before the State Government, wherein while deciding Appeal, the authority of Cane Commissioner is virtually co-extensive.
Consequently, present writ petition succeeds and is allowed. The order passed by the appellate authority is hereby quashed and set aside, and the matter is remitted back to the appellate authority for being decided afresh, within a period of six weeks from the date of receipt of a certified copy of this judgment, keeping in view the observations made in the body of this judgment.
01.02.2010 SRY 25