Allahabad High Court
Rana Sugar Mill Ltd. Thru. Occupier vs State Of U.P. Thru. Prin. Secy. Secy. ... on 22 March, 2021
Equivalent citations: AIRONLINE 2021 ALL 561
Author: Jaspreet Singh
Bench: Jaspreet Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 21 Case :- MISC. SINGLE No. - 7653 of 2021 Petitioner :- Rana Sugar Mill Ltd. Thru. Occupier Respondent :- State Of U.P. Thru. Prin. Secy. Secy. Sugar Industries & Ors Counsel for Petitioner :- Ajay Kishor Pandey Counsel for Respondent :- C.S.C.,Paramanand Asthana,Sudhanshu Chauhan Hon'ble Jaspreet Singh,J.
Heard Sri Ajay Kishor Pandey, learned counsel for the petitioner. The learned Standing Counsel for the respondent nos. 1,2 and 3. Sri Permanand Asthana, learned counsel for the respondent no. 4 and Sri Sudhanshu Chauhan, learned counsel on behalf of respondent no. 5.
Sri Sudhanshu Chauhan, learned counsel for the respondent no. 5 has filed his counter affidavit which is taken on record.
Sri Ajay Kishor Pandey, learned counsel for the petitioner submits that he does not wish to file any rejoinder affidavit. With the consent of the learned counsel for the parties, this writ petition is being decided at the admission stage itself.
The instant petition assails the order dated 09.03.2021 passed by the respondent no. 1 in Appeal No. 663/Ga-Su-A-03/we, sa (Camp)/2021.
The learned counsel for the petitioner submits that the petitioner-mill is a company incorporated under the Companies Act having its sugar factory at Belwara, Mordabad and is involved in manufacturing of white crystal sugar through vacuum pan process having a crushing capacity of 6,500 T.C.D. The Cane Commissioner for the Crushing Season 2020-21 vide its Reservation Order dated 03.11.2020 reserved 125.49 lakh quintals of sugarcane. Further, by means of another order dated 03.11.2020, the Cane Commissioner reserved 126.88 lakh quintals of sugar cane for the respondent no. 5.
The respondent no. 5 being aggrieved by the Cane Reservation Order whereby the State Government had assigned the Cane Purchase Center at Kafiabad-II from Moradabad Society and Hakimpur-IV from Amroha Society in favour of the petitioner-mill preferred an appeal before the Appellate Authority i.e. the respondent no.2.
The petitioner appeared before the Appellate Authority and filed its detailed reply. It is submitted that initially the respondent no. 2 by means of an order dated 03.02.2021 had allowed the appeal of the respondent no. 5 modifying the reservation order dated 03.11.2020 in respect of the two contentious centers which were assigned to petitioner. Since the order dated 03.02.2021 did not take note of the submissions of the petitioner, hence, being aggrieved, the petitioner preferred a W.P. bearing No. 4669 (MS) of 2021.
It is further submitted that upon due contest, this Court by means of order dated 23.02.2021 allowed the said writ petition and remitted the matter to the Appellate Authority to pass a fresh order after hearing the parties concerned. Thereafter the respondent again in compliance of the order passed by this Court dated 23.02.2021 heard the parties and passed the impugned order dated 09.03.2021 which has been assailed in the instant petition.
The submission of the learned counsel for the petitioner is that the Appellate Authority has briefly noticed the submissions of the petitioner, however, has not dealt with it.
It is further submitted that from the perusal of the impugned order, it would indicate that no reasons have been assigned except only the drawl rate has been noticed whereas primarily the considerations which ought to have been taken note of especially in light of the Rule 22 of The Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Rules, 1994 have not been noticed at all.
It is further submitted that a complete criteria has been provided for reserving or assigning any area to a factory or determining the quality of cane to be purchased from any area by a factory.
It is submitted that on all the relevant parameters, the petitioner was better qualified then the respondent no. 5 and ignoring the aforesaid, the respondent no. 2 has passed the impugned order which suffers from the vice of arbitrariness, inasmuch as, it does not take note of the relevant facts and the parameters as mentioned in Rule 22.
The learned counsel has also submitted that from the perusal of the impugned order, it would indicate that it is nothing but a reproduction of the earlier order which was set aside by this Court, thus, it has been passed without due application of judicial mind to the facts of the case nor it contains reasons and thus the order is bad and is liable to be set aside.
Sri Sudhanshu Chauhan, learned counsel appearing for the respondent no. 5 has submitted that the two contentious centers namely Kafiabad-II and Hakimpur-IV are the reserved centers of the respondent no. 5.
It is also submitted that for the last two years, the aforesaid two centers were assigned to the petitioner, however, since the crushing capacity of the respondent no. 5 was enhanced, accordingly, the respondent no. 5 was facing shortage of cane. It is in the aforesaid backdrop that the assignment orders were assailed and the Appellate Authority considering the facts and circumstances has allowed the appeal. It is also submitted that in so far as the assigned centers of Kafiabad is concerned the same is at a distance of 7 Kms. from the respondent no. 5 while the distance with the petitioner-mill is 23 Kms. so also the Hakimpur Center is at a mere distance of 10 Kms. from the respondent no. 5 but about 40 Kms. from the petitioner-mill.
It has further been submitted that though Rule 22 amongst others also provides that the distance of the area from the factory and transport facility is also to be taken note of, coupled with the fact that the quantity of cane supplied from the area to the factory. If this is noticed, it would indicate that the same was in favour of the respondent no. 5 especially when both the area were actually reserved centers of the respondent no. 5 as already submitted that on account of the modernization towards the enhancement of the crushing capacity that for the last two years the said centers were assigned to the petitioner.
It is also submitted that the respondent no. 2 has considered all the aspects of the matter and has passed the impugned order reflecting reasons which does not require any interference from this Court.
Sri Parmanand Asthana, learned counsel appearing for the respondent no. 3 submits that as far as the Cane Society is concerned, they express their satisfaction with the petitioner, inasmuch as, it has been stated that the dues of cane purchased by the petitioner-mill, a larger part of the said dues have been paid by them as compared to the outstanding of respondent no. 5 on this count..
The learned Standing Counsel has defended the order stating that it is in compliance of Rule 22 and the order has noticed the facts as well as the submissions of the parties concerned, hence, does not require any interference.
The Court has heard the learned counsel for the parties and perused the record.
The facts between the parties are not much in dispute. The only issue that arises for consideration in the instant petition is whether the impugned order passed by the respondent no. 2 dated 09.03.2021 is sustainable in law.
From the perusal of the impugned order, it would indicate that the respondent no. 2 has briefly noted the submissions of the respective parties. In the last but one paragraph, the Appellate Authority has referred to the decisions of this Court dated 23.02.2021 passed in W.P. No. 4669 (MS) of 2021 and thereafter in 5 lines it has recorded its reasons and has allowed the appeal. For ready reference the relevant paragraph is being reproduced hereinafter:-
^^ ek0 mPp U;k;ky; esa nkf[ky fjV ;kfpdk la[;k% 4669¼,e@,l½@2021 esa ikfjr fu.kZ;kns'k fnukad 23-02-2021 ds Øe esa v/kksgLrk{kjh }kjk iqu% i=koyh ij izLrqr rF;ksa] mHk; i{kksa }kjk fn;s x;s rdksZ ,oa i=koyh dk lE;d~ ifj'khyu fd;k x;kA ifj'khyu ds mijkUr ;g Li"V gS fd oknh phuh fey dks 70-35 izfr'kr Mªky ij xUuk {ks=Qy ,oa mRiknu dk vkoaVu fd;k x;k gS] ogha izfroknh phuh fey dks 57-89 izfr'kr Mªky ij xUuk {ks=Qy ,oa mRiknu vkoaVu fd;k x;k gSA lV~Vk uhfr ds vUrxZr Mªky izfr'kr dks ns[krs gq, oknh phuh fey dks xUus dh deh gSA vr% lqj{k.k vkns'k esa la'kks/ku fd;k tkuk mfpr izrhr gksrk gSA** From the perusal of the aforesaid, it would indicate that it is only the drawl rate and the Satta Niti upon which the the respondent no. 2 has come to the conclusion that the respondent no. 5 is facing shortage of cane and for the said reason, it has allowed the appeal.
At this stage, it will be relevant to notice the decision of the this Court in the case of L.H. Sugar Ltd. Vs. State of U.P. and Others reported in 2017 (2) ALJ 769 wherein the Court had the opportunity to test the order passed by the Appellate Authority in terms of Rule 22 of the U.P. Sugarcane (Regulation of Supply and Purchase), Rules, 1954.
The Court considering the relevant Rules noticed that Rule 12 of the Rules of 1954 gives guidelines as to how the power of assigning or reserving any area has to be exercised by the Cane Commissioner.
The Court further held and it mentions several factors which have to be taken into consideration. Emphasis has also been led towards transport as well as the payments which are made in the earlier years being a very important factor from the point of view of the cane growers. The relevant paragraph paragraph 26 and 27 reads as under:-.
"26. Rule 12 of the Rules of 1954 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, quantity 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 short 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 a 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 cane to be supplied to its factory. The provisions of the Act of 1953 and Rules of 1954 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. May be in a given case one single factor may far outweigh the effect of all other remaining factors. For example, an area may be right at the gate of the Sugar Mill and in such a situation, distance alone can be taken into consideration for assigning or reserving that area in favour of that sugar factory. It is for the authorities, who are experts in the field, to take into consideration all the factors and after balancing them pass appropriate orders which best subserve the interest of the sugar factory and the cane growers.
27. Under the Act of 1953 and the Rules framed thereunder, it is obligatory for the authorities to pass order balancing the interest of the sugar factories as well as cane growers. Underlining idea of the Act is to ensure maintenance of reasonable supply of sugarcane required by the sugar factories from the producers of sugarcane and in turn to ensure a fair return to the cane-growers. The competitive interest of the sugarcane growers and sugar manufacturers have to be protected at the same time. The main purpose of the Act of 1953 is to provide mechanism for reasonable, necessary, sufficient and continuous supply of sugarcane to the sugar factories in the crushing season keeping in mind the interest of the cane growers, the Cane Growers' Cooperative Societies, the sugar factories and also inter se interest of the sugar factories. The exercise undertaken by the authorities should not be guided for extending benefit to one of the parties, it should be fair exercise and on account of the exercise so undertaken none of the parties should be unduly benefited, rather a fair effort ought to be made so that interest of each one of the parties is protected."
The learned counsel for the petitioner has also relied upon a decision of M/s Tikaula Sugar Mills Ltd. Vs. State of U.P. and Others in Civil Misc. Writ Petition No. 72469 (MS) of 2005 decided on 18.01.2006 and Triveni Engineer and Industries Vs. State of U.P. and Others reported in 2000 (2) AWC 1014. Relying upon the aforesaid decisions the thrust of the submission is that the Appellate Authority must consider all the parameters as provided in Rule 22 of the 1954 Rules and in case if the same has not been considered the order is rendered bad.
Per contra, Sri Sudhanshu Chauhan has relied upon a Division Bench of this Court in the case of Basti Sugar Mills Company Ltd. Vs. State of U.P. and Others reported in AIR 1995 Alld. 309. Relying upon the aforesaid decision, it is submitted that the factories submit an estimation of their requirement according to their crushing capacity and other factors on the basis of which the Cane Commissioner passes an order not only for reserving an area but also determining the capacity of cane that has to be purchased by a particular factory in a crushing season. It is submitted that the orders are passed considering the requirement and estimated capacity also depending upon the availability of the cane. In case if the mill is using their optimum crushing capacity and is falling short then the Authorities are well within their rights to assign areas.
It is also submitted that in the instant case, the two contentious centers namely at Kafiabad-II and Hakimpur -IV were originally the reserve area of the respondent no. 5, hence, upon the crushing capacity having been upgraded, the respondent no. 5 was facing shortage of cane and the initial area reserved for the respondent no. 5 but assigned to the petitioner for the last two years has been reverted back and thus the assignment was only temporary till such time the respondent no. 5 were upgrading the mill and once the same has been done, the Appellate Authority has reverted back the said centers to the respondent no. 5 which requires no interference.
The learned counsel for the rival mills have referred to various data and figures to establish their respective contentions to impress the Court that each is better poised than the other, hence, as per the petitioner, the order is bad being in contravention of the provisions and also bereft of reasons while as per the respondent no. 5, the order is just and requires no interference.
Be that as it may, the contentions raised by the parties before this Court apparently does not find mention in the impugned order. It is now well settled that the order passed by the Authority is judged on the basis of the reasons contained therein. Any subsequent facts or even by filing affidavits, reasons cannot be supplanted nor the same can be taken note of to justify an order which otherwise may not be sustainable, as held by the Apex Court in the case of Mohindhr Singh Gill and Another Vs. Chief Election Commissioner New Delhi and Others reported in 1978 (1) SCC 405.
The learned counsel for the respondent no. 5 could not dispute the fact that Rule 22 of the Rules 1954 are the guidelines which have to be taken note of while passing any order of reservation or assigning the Cane Centers.
Rule 22 lays down 9 parameters and for ready reference, the same is being reproduced hereinafter:-
"Rule 22. In reserving any area for or assigning any area to a factory or determining the quality of cane to be purchased from any area by a factory, under Section-15 of the Cane Commissioner may take into consideration;
(a) the distance of the area from a factory;
(b) facilities for transport;
(c) the quality of cane supplied from the area to the factory in the previous year;
(d) previous reservation and assignment orders;
(e) the quantity of cane to be crushed in the factory;
(f) the arrangements made by the factory in previous years for payment of cess, cane price and commission;
(g) the view of the Cane Growers Cooperative Society of the area;
(h) efforts made by the factory in developing the reserved or assigned area;
(i) cane information system."
If the aforesaid Rule is noticed, it would indicate that none of the criteria as mentioned therein finds reflection in the impugned order dated 09.03.2021. As already indicated above, the sole ground/reason upon which the respondent no. 2 has passed the order appears to be the drawl rate whereas the quantity of cane supply to the previous years, the arrangement made by the factory in the previous years for payment of cane prices, commission, the view of the cane growers cooperative society of the area amongst others have not been mentioned or taken note of, nor the data and its implications to arrive at any decision has been noticed.
The impugned order, though, refers to the views of the Cane Growers Cooperative Society which as per the Resolutions have expressed their satisfaction regarding assigning of the Centers with the petitioner, however, its consideration is conspicuously absent while arriving at any conclusion.
The learned counsel for the respondents though raised an issue regarding the distance which was in favour of the respondent no. 5, however, again it would be noticed that though it is one of the criteria which is mentioned in Rule 22 but the same has not been considered by the respondent no. 2 while passing the impugned order.
The Court further finds from the perusal of the Annexure No. 5 which is a copy of the appeal and though large contentions were raised by the petitioner but the same has not been noticed rather while passing the impugned order, the consideration of the Rule 22 has also not been taken note of. Apparently, the order is non-reasoned and has been passed without due application of mind and without considering the material as well as the contentions raised by both the parties, in ignorance of the relevant rules and provisions applicable to the controversy in appeal before the respondent no. 2.
In view of the aforesaid, This Court is of the view that the impugned order dated 09.03.2021 cannot sustain judicial scrutiny and is liable to be set aside.
This Court refrains from making any comment on the merits of the contention of the learned counsel for the parties. Since that may prejudice their case before the Appellate Authority and these are the factual matters which have to be considered by the Appellate Authority. Accordingly, the impugned order dated 09.03.2021 is set aside.
This Court directs the concerned parties to appear before the Appellate Authority on 31.03.2021 who after affording an opportunity of hearing to the parties concerned shall pass a fresh reasoned and speaking order noticing the various contentions and giving reasons for arriving at its conclusion within a period of 10 days thereafter.
For the aforesaid reasons, the writ petition succeeds. The order dated 09.03.2021 passed in Appeal No. 663/Ga-Su-A-03/we, sa (Camp)/2021 is set aside.
In the facts and circumstances, there shall be no order as to costs.
[Jaspreet Singh, J.] Order Date: 22.03.2021/Asheesh