Punjab-Haryana High Court
Piccadily Agro Industries Ltd vs State Of Haryana And Others on 29 December, 2014
Author: K. Kannan
Bench: K. Kannan
CWP No. 24967 of 2014 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
(1) CWP No. 24967 of 2014 (O&M)
Date of decision: December 29, 2014
Picadily Agro Industries Limited
...Petitioner
Versus
State of Haryana and others
...Respondents
(2) CWP No. 25414 of 2014 (O&M)
Gurdial Singh and others
...Petitioners
Versus
State of Haryana and others
...Respondents
CORAM:- HON'BLE MR. JUSTICE K. KANNAN
1. Whether Reporters of local papers may be allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest?
Present: Mr. M.L.Sarin, Senior Advocate with
Mr. Nitin Sarin, Ms. Ankita Sambyal and Mr. Ritesh
Aggarwal, Advocates, for the petitioner in
CWP No. 24967 of 2014.
Mr. Bhag Singh, Advocate,
for the petitioners in CWP No. 25414 of 2014
Mr. Amar Vivek, Additional Advocate General, Haryana.
Mr. Akshay Bhan, Senior Advocate with
Mr. Gurinder Singh Sandhu, Advocate,
for respondent No.4 (Saraswati Sugar Mills Limited)
Mr. Rohit Sud, Advocate,
for the applicant.
PREM SINGH .
2014.12.29 11:06
I attest to the accuracy and
integrity of this document
CWP No. 24967 of 2014 2
K. KANNAN, J.
1. The proceedings of the Sugar Cane Board held on 11.11.2014 under the chairmanship of Shri Om Parkash Dhankar, Agriculture Minister, Haryana, has given rise to the present controversy, which is the subject matter of these two writ petitions. The decision at the meeting consisted, inter alia, of re-allocation of certain villages which would be bonded to certain specified sugar factories which is the point of contention between the petitioner and the 4th respondent- Saraswati Sugar Mills, Yamunanagar, both of which are sugar factories, the former having been made to cede 4 villages viz., Khukhani, Chogama, Chandraon and Hansumajra to the latter by virtue of the decision. There had been other changes as regards the allotment about which we are not immediately concerned about.
2. The petitioner in CWP No. 24967 of 2014 which is the sugar mill that has been deprived of the allotment of the four villages is before the court complaining that the decision was the result of the intervention of the Minister for Agriculture at whose direction the allocation has been made without any form of objective assessment. It had not been even made a subject of agenda for the meeting on 11.11.2014 but had been introduced as among other subjects which could be brought with the permission of the Chair. Even the Vice-President of the petitioner mill did not know of the subject till it was put through as a subject of consideration hurriedly and when the decision had been taken. According to the petitioner, it had raised immediate objection about the unjustness of the decision, whereupon, the Chairman of the Board assured the petitioner that it could give its detailed objections within a period of 24-48 hours and till the time the status quo be maintained. The petitioner had given its detailed objections, including the PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 3 fact that the bonding of the four villages to the petitioner had been in subsistance for more than 10 years, taking due note of the Haryana Sugarcane (Regulation of Purchase U Supply) Rules 1993, which set out the relevant criteria for the allocations. Although in the initial period from 1998 to 2004, there had been alternating allotments between the petitioner and the Yamunanagar Sugar Mill, on the last of the occasion 2005, when the four villages were assigned to the petitioner company, a writ petition was filed in CWP No. 18468 of 2005 challenging the order passed then on 10.11.2005. By the time when the matter was taken up the crushing season had already ended and the petition became infructuous but the petitioner in the said writ petition had prayed for direction that their representation be considered.
3. The consideration with the Cane Commissioner led to a direction to the Project Officer, Cane to conduct a survey to assess the distance of the four villages from the factory of the petitioner company and the Yamunanagar Sugar Mill. A detailed report had been given that suggested itself in favour of the assignment of the four villages to the petitioner Sugar Mill as most viable and accorded with all the relevant consideration under 1993 rules, referred to above and ever since 2005, the four villages remained allotted to the petitioner company. All these information by the petitioner was in the manner of explaining as to how the assignment of the villages to the petitioner company had been on consideration of all the relevant facts after detailed survey and this was thwarted on a whimsical intervention of the Agriculture Minister. There was no deliberation at all at the meeting for a sudden change in the allocation and being arbitrary, it is liable to be set aside. The prayer in the writ petition is to quash the order of assignment of four villages to the PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 4 Saraswati Sugar Mill - 4th respondent and to issue further consequential direction for retaining the four villages to the petitioner sugar mill.
4. The State would support its decision pointing out to the fact that the distribution of sugarcane for crushing to various sugar mills in the State for the season 2014-2015 had been identified as item 4 of the agenda and they had all the relevant data at their hand already about the allotted quantity of sugar cane for the previous years and the capacity to do the crushing of the respective factories. The comparison of the data for the previous year performance revealed that the 4th respondent sugar mill, which was one of the largest sugar mills in the area with a very high capacity for crushing, had not got the optimum allocation and could be entrusted with a larger area. Even the decision to assign the four villages to the 4th respondent was taken only after assessing the crushing capacity of the 4th respondent. It was not as if the petitioner had been deprived of supply of sugarcane from the four villages but had, by the resolution passed on 11.11.2014, the benefit of consideration for allotment of sugarcane from Panipat. The petitioner, therefore, stood to benefit by the decision and it has made an issue of only the deprivation that is said to have been made. Even the distance of the respective villages to the petitioner and the 4th respondent mill had been reassessed and it was found that there had been some mistakes made earlier and the distances as noted subsequently had surely vindicated the fresh manner of assignment of the villages. The distances as was originally given in the year 2006 by the report after the writ petition had been filed in the year 2005 and the measurements carried out in the year 2014 have been made through Annexure P/15 which could also be re- produced for appreciation of the relevant consideration for re-assignment. PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 5 The distances measured in 2006 as compared to 2014 as spelt out in Annexure P/15 are as follows:-
Village Distance in the year 2006 Distance in the year 2014 Petitioner Saraswati Petitioner Saraswati Company's Sugar Mill Company's Sugar Mill factory factory Khukhani 24 KM 25 KM 24 KM 23.5 KM Chogama 24 KM 29 KM 23.4 KM 27 KM Chandrao 23.5 KM 30 KM 24 KM 24 KM Hansumajra 24.5 KM 26 KM 24.5 KM 24.5 KM
5. The counsel appearing for the 4th respondent would support the decision of the State urging for a contention that the petitioner had come by some benefit of assignment only thanks to the presence of a particular Chairman who had been favourably disposed towards the petitioner and even before the assignment of the four villages to the petitioner sugar mill, the four villages had indeed been assigned to the 4th respondent in the year 2002 and had been assigned to the petitioner only 2005 which resulted in a challenge through the earlier writ petition. A wrong decision taken in 2005 is being sought to be corrected through the present dispensation and the minutes circulated would clearly show that the capacity for crushing with the 4th respondent was the highest in the State of Haryana and consequently the allocation had to be very a larger area where sugarcane is grown for the commensurate ability of the sugar mill to crush. The ultimate allotment was 185 lakhs quintals for the 4th respondent against 42 lakhs quintals for the petitioner and this was keeping in with the respective capacity for crushing at the sugar mills. The minutes of the meeting would also disclose that the petitioner never objected to the allocation and only objection expressed at the meeting was transfer of some other villages from the reserved areas from the petitioner mill to a sugar mill at Shahabad. The reference to transfer of PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 6 four villages from the petitioner sugar mill to the 4th respondent had indeed been made in the resolution that registered no form of objection from the petitioner. The 4th respondent would, therefore, contend that the petitioner is estopped from making any objection after the allocations are made. The 4th respondent would also support the decision by pointing out to an inevitable alteration of the status quo as it had obtained immediately after passing of the impugned order, when the farmers from the new villages assigned had entered into bonding agreements with the 4th respondent and partial supply had already been effected and the work of crushing had also started. Any disruption of the status after the impugned decision would cause serious prejudice to the farmers themselves.
6. The farmers in these four villages have themselves come by means of an application to be impleaded as parties to state that the immediate act of crushing undertaken by the 4th respondent subserves their own interest in that the field would be ready after harvest for the transplantation of the next crop and they would be grossly prejudiced if reallocation made through the impugned resolution is set aside. Some of the villages of the respective four villages have themselves filed a writ petition in CWP No. 25414 of 2014 contending for their preference to the petitioner mill by reference to the proximity of their villages to the petitioner mill and the fact that several collection centres have been installed by the petitioner mill very close to the respective fields to facilitate easier transportation.
According to them, their own fields are in Karnal district and they would be unnecessarily compelled to be bonded to the 4th respondent which is a location faraway in Yamunanagar. They have entered into the bonding agreement even earlier by October, 2014 itself and it is grossly inequitable PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 7 to make for reassignment of the villages only to satisfy certain vested interest closely associated with the 4th respondent.
7. In my view, it is unnecessary to look into the contention of the villages brought through CWP No. 25414 of 2014 and the applicants who have impleaded themselves as parties in CWP No. 24967 of 2014. They speak in different voices and it will not allow for any objective assessment of the soundness of the decision for assignment of villages, if we are to assess the decision through such discordant voices. The better guide would be the examination of the rules themselves that allow for relevant consideration for assignment of the villages to the respective sugar mills. The Haryana Sugarcane (Regulation of Purchase & Supply) Rules, 1993 give four factors for assignment of areas to the respective sugar mills as relevant. They are (i) the distance of the factory from the area proposed to be assigned; (ii) facilities available for the transportation of the cane; (iii) whether the area has previously supplied cane to the said factory and (iv) the quantity of cane to be crushed in a factory. Although the counsel for the State would contend that the distance of the factory from the proposed areas to be assigned shall not be very relevant and even if the relevant re- appraisal undertaken in the year 2014 indicates the proximity of the 4th respondent mill to the villages, I will discard this argument for two reasons, namely, (i) when the assignment was made in the year 2005 of the four villages to the petitioner company, the challenge made in CWP No. 18468 of 2005 surely gave place to a need for objective appraisal. It took shape by a survey to be undertaken through the Project Officer at the instance of the Cane Commissioner. We have already brought out the comparative table. It is inconceivable as to how distances can vary if the roads have not been PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 8 changed. It would be seen that even a survey undertaken in 2006 that remained unchallenged all these years have been tweaked to suit a modified decision. The changes have come about by increase and decrease of a few kilometers. I will not accord any weight to the new measurements undertaken when the survey have been completed in the year 2006 and the decision to stick the four villages to the petitioner had continued for nearly a decade without any necessity for change. I, therefore, find the new justification that the 4th respondent is equally proximate to the assigned areas is deliberately modified to suit the decision.
8. The point that the 4th respondent has a higher capacity to crush is well taken. However, an increased allocation could not be at the expense of withdrawing allocation made to smaller sugar mills such as the petitioner. There is no ground made that the petitioner could not crush what was allotted previous year or there was any appraisal made of the petitioner being inefficient or did not have the capacity to crush as much sugar cane as could be supplied by the four villages. When there was no adverse report against the petitioner, there was no justification for the withdrawal of the four assigned areas. The decision, on the other hand, can be seen to be purely arbitrary. Although the agenda for the discussion surely included "the distribution of sugarcane for crushing to various sugar Mills of the State", the said subject contemplated the allotment of quantity of sugarcane for crushing in various sugar mills, but the balance of interest must be so struck that an additional allocation made to the 4th respondent could not be to the detriment of an allotment already made to another sugar mill. If such reassignment was to be worked or was seriously contemplated on account of poor out turn of work by the petitioner mill during the previous year, it PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 9 ought to have been put through a specific agenda item. Even if the absence of specific agenda item is not very crucial but could be brought even as a residuary item, the manner in which it was introduced itself betrays a clear show of bias by the minister concerned in securing allocation differently. The way the minutes have been drawn would be testimony to how the issue was considered under "other issues with the permission of the Hon'ble Chairman". The assignment of villages is surely an important agenda and the minutes would make it appear that the minister was receiving representation from certain villages and, therefore, reassignment had been made. The decision seems to have gone through no deliberation at all. All that it states is a laconic statement that:-
"After discussions about the matter with the representatives of Saraswati Sugar Mill, Yamuna Nagar and Bhadson, it was decided by the board that the village Khukhni, Chandrao, Chogama and Hansu Majra may be detached from Bhadson Sugar Mill and be allotted to Saraswati Sugar Mill Yamuna Nagar."
The expression "after discussions" reveals nothing about the nature of discussion. It is inconceivable that no objection could have been taken by the petitioner. As spelt out in the petition in para 24, on the same day viz., 11.11.2014, representative of the petitioner company had been taken unawares and he raised objection with regard to reassignment. The State in its reply states that the proceedings of the Board meeting had been circulated on 11.11.2014 and the petitioner had not sent any comments or representation thereon. The fact that such representation had been given to the minister on the very following day itself is not denied. A copy of the PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 10 representation is actually filed as Annexure P/13. The petitioner would explain that the minutes of the meeting had not been prepared on 11.11.2014 for them to take note of and the ultimate decision of reassignment had been circulated only on 19.11.2014 and it had not taken note of the objection circulated through the minister who was the Chairman of the Board on 11.11.2014.
9. I must observe that the limited intervention for a decision of the Board cannot be on purely administrative matters of what will serve the interest of the sugar industries, the factory owners and farmers. It should normally be left to the expert body like the Sugar Board for they understand the local problems and know how to balance the interests of several competitive forces. The intervention ought to be indeed minimal only to ensure that there was a fair consideration on several competing interests and a balanced approach was being undertaken to address the concerns of all stakeholders. This court, while considering the subject of what would allow for a judicial intervention in Batala Cooperative Sugar Mils Limited, Batala Versus State of Punjab and others 2012 (5) R.C.R. (Civil) 73 has examined the factors that would be considered by a Cane Commissioner and a Board for allocations. This Court has held that the physical proximity of various villages to the respective sugar mills would merely be one of the several criteria and no one sugar factory could claim a vested interest over the villagers owing to the proximity. These observations ought to be taken as setting down the frontier of intervention to decision where weighty considerations might prevail to dislodge the distance criterion and still making allocations to the sugar mills not overly influenced by only the issue of proximity. In this case, if there had been any consideration by the Board PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 11 that the past experience with the petitioner in the manner of entrustment of sugarcane and its crushing capacity or experience of farmers undergoing any difficulty in supply with the petitioner or a serious mismatch of the capacity of the 4th respondent and the supplies which could not be commensurate with its capacity and assignment of sufficient villages to obtain an optimal utilization of its capacity, was not possible otherwise than by assignment of these four villages, then such decision could have been supported wholesale without any intervention. It is too well laid down as proposition of law that a decision which is impugned ought to be supported through reasons spelt out in the very same decision and cannot be buttressed by clever pleadings before the court for the first time. The strength of the decision of the Board meeting ought to reside in its decision itself and cannot come from outside. This proposition derives its strength from the pronouncement of the Supreme Court in Mohinder Singh Gill and another Versus The Chief Election Commissioner, New Delhi and others AIR 1978 Supreme Court 851, where the Supreme Court, while dealing with a case of Representation of People Act and considering the order of a statutory authority, held "when when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out." All the justification that is now brought that the question of allocation of villages was identified as an agenda item, that there were discussions about the reassignment of four villages but the petitioner did not object to the same and that reassignment was made on a PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 12 reappraisal of distances and that further fresh decision was on account of under utilization of the 4th respondent's capacity to crush and the imperative for making additional supply possible for the 4th respondent do not get reflected in the impugned order at all and hence cannot find justification for the decision.
10. The impugned decision itself cannot be taken to be purely administrative in character when the rules set down some defined parameters for allocations where sugar mills themselves have aright of consideration that the parameters are duly applied and a decision is taken objectively. This point was considered by the Supreme Court in The Purtabpur Company Ltd. V. Cane Commissioner of Bihar and others AIR 1970 Supreme Court 1896 which contained a clause 6 of the Sugar Cane (Control) Order in somewhat similar terms like clause 10 of the Haryana Sugarcane (Regulation of Purchase & Supply) Rules, 1993. The Supreme Court was considering a decision taken by the Commissioner acting at the behest of the Chief Minister. The Supreme Court held that though the decision purported to be of the Cane Commissioner, the Chief Minister's intervention was clearly visible for the ultimate decision. Referring to the extent of intervention that is possible under Article 226 of the Constitution and the nature of order that is passed, the Supreme Court explained that it was actually a quasi judicial function which a Cane Commissioner takes. The affected parties shall be the persons who seek for allotment in their favour for reservation of sugarcane area. The persons vying with each other for allotment were perceived to be disputants and adjudication was seen to be a lis requiring adjudication on objective criteria. The Supreme Court ruled: "Where both the parties to a dispute in a quashi-judicial proceeding PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 13 had made separate representation is to the Government and the deciding authority, but the representations were not made available to each other and one of the parties was not given opportunity to represent his case and the grievance, he is justified in complaining that the principles of natural justice had been contravened." In this case, we have already examined that there is no consideration of the plea by the petitioner of how the decision was prejudicial to their interest.
11. I am not impressed by the averments brought through an additional affidavit by the government that subsequent to the order, bonding agreements have been entered into with several farmers and about 30851 quintals have been supplied against a bonding of 2,84,350 quintals. All these have come about after the impugned order was passed and just before the institution of the writ petition. The learned Senior Counsel appearing on behalf of the petitioner would point out that bonding with all the farmers would require to be made by 31st October of the relevant year under Rule 11 of the 1993 Rules before the crushing started and petitioner sugar mill has indeed obtained the bonding agreements with all the farmers of the four villages. It is to ensure a smooth functioning of the mill who would know the quantity of sugarcane that would be available and a last minutes change or reassignment of village after the last date when the bonding agreements have to be entered into would themselves cause a grave dislocation of a planning that is invariably made by the sugar factories. I will not find the fact that bonding agreements made now by the 4th respondent as creating any right in favour of the 4th respondent. The agreement entered into by the farmers must be seen as consequential to the decision which is impugned in the writ petition and if that decision is flawed, all the subsequent bonding PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 14 agreements ought to be taken as frustrated and that cannot be pleaded either by the State or by the 4th respondent as creating any particular vested interest or equity in favour of the 4th respondent.
12. The impugned decision of respondents No. 1 to 3 dated 11.11.2014 is quashed. The petitioner will have the restoration of the status quo of the assignment of the four villages Khukhani, Chogama, Chandraon and Hansumajra to the petitioner sugar mill only. It is brought out at the time of arguments that the petitioner had given representation against the allotment of sugar mill at Panipat to the respondents 1 to 3. The State will be at liberty to consider the representation and take an independent decision. I set no direction or limitation as regards the manner of consideration. The supplies hitherto effected by the farmers in the four villages to the 4th respondent will suffer no detriment. They will come by the benefit of the respective supplies. Respondents No. 1 to 3 shall ensure a smooth transmission back of reworking the bonding of the farmers who have not yet made the supplies and who will rework the bonding arrangements already with the petitioner. Such of those farmers who have cut the sugarcane and transported them to the point of sugar mill to the 4th respondent shall continue the contract with the 4th respondent even if the crushing has not been done. Respondents No. 1 to 3 will immediately assign the work of making the assessment of transportation already made to the gates of 4th respondent and cause minimal dislocation to the farmers who have brought to the gates of the 4th respondent and entered in their books as having arrived. The entire work of reassignment shall be transparent and the respondents No. 1 to 3 shall communicate to all the farmers in the four villages about the decision of the court and the reassignment of the PREM SINGH 2014.12.29 11:06 I attest to the accuracy and integrity of this document CWP No. 24967 of 2014 15 respective supplies that they will make to the petitioner to commence from the date of the passing of the order. The respondents 1 to 3 will also be at liberty to take appropriate support from the police machinery to ensure that there is no squabble at the factory premises of the 4th respondent to divert the supplies that have arrived to the petitioner after passing of the order. This order will take effect only in respect of the transportation that will have to commence hereafter the passing of the order from the places of cutting to the petitioner factory.
13. The writ petitions are allowed with costs assessed against the State at Rs. 25,000/-.
December 29, 2014 (K.KANNAN)
prem JUDGE
PREM SINGH
2014.12.29 11:06
I attest to the accuracy and
integrity of this document