Bombay High Court
Madhukar Sahakari Sakhar Karkhana Ltd ... vs The Union Of India And Another on 6 August, 2019
Author: Sunil P. Deshmukh
Bench: Sunil P. Deshmukh
1 WP - 8313-2017
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 8313 OF 2017
Madhukar Sahakari Sakhar Karkhana Ltd.,
at Jivram Nagar, NHAVI Marg,
At Faijpur, Tq. Yawal,
District Jalgaon
Through its Managing Director
Shri Mahesh Basling Sagare,
Age : 48 years, Occu. Service,
R/o. Faijpur, Tq. Yawal,
District Jalgaon .. Petitioner
Versus
1] The Union of India
Through the Secretary for
Food and Public Distribution Department,
New Delhi
2] The Chief Director (Sugar)
The Government of India,
Department of Food and Public
Distribution,
New Delhi .. Respondents
...
Mr.V.D. Hon, Sr. Advocate h/f. Mr. A.V. Hon, Advocate for petitioner
Mr. Bhushan Kulkarni, Standing Counsel for
respondent - Union of India
...
CORAM : SUNIL P. DESHMUKH &
S.M. GAVHANE, JJ.
DATE : 06-08-2019
ORAL JUDGMENT (PER - SUNIL P. DESHMUKH, J.) :
1. Rule. Rule made returnable forthwith. Heard learned counsel for the parties fnally, by consent.
2. The petitioner before us is a co-operative sugar manufacturing factory/mill.
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The respondents herein had issued an
order/communication dated 18-09-2015 under tradable export scrip scheme for allocation of factorywise Minimum Indicative Export Quota (MIEQ) of sugar as annexed to the petition as Exhibit
- 'A'. MIEQ was specifed for sugar season 2015-16 commencing from 01-10-2015.
Under the same, the quota shall be deemed to be discharged on submission to Department of Food and Public Distribution (DFPD) certain documents, inter-alia, agreements between quota holder sugar factory, merchant exporter and the source sugar factory, undertaking from the source sugar factory indicating factorywise MIEQ utilized for export of sugar. It also provides that, documents shall be submitted to DFPD within 180 days from the date of shipment of last consignment.
It appears that allocation of 4622.3 Tonnes quota had come to petitioner's way fguring at serial no. 228, as can be seen from table appended to the communication.
3. Subsequently, the respondents had declared a scheme under a notifcation dated 02-12-2015 granting 'production subsidy' to sugar mill with a view to ofset cost of cane and facilitate timely payment of cane price dues of farmers for sugar season 2015-16 relating to the Fair and Remunerative Price ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 ::: 3 WP - 8313-2017 (FRP) of sugarcane fxed by Central Government. Subsidy at the rate of Rs. 4.50 per quintal of cane crushed for production of sugar had been provided. Such production subsidy is payable directly to farmers on behalf of the mills to be adjusted against the cane price dues payable to farmers against FRP. The notifcation, inter- alia, also provides that the mills which have achieved at least 80% of the target as per terms and conditions under MIEQ pursuant to order issued on 18-09-2015 would be eligible for production subsidy. Under proforma annexed to the notifcation, it appears that details of cane crushed by mills were sought. Clause no. 4 of the notifcation enables DFPD to amend or withdraw the production subsidy scheme. On 19-05-2016, the production subsidy scheme foated on 02-12-2015 had been withdrawn.
4. The respondents had issued another notifcation dated 12-09-2016 whereunder, it has been observed that subsidy scheme notifed on 02-12-2015 had been withdrawn vide notifcation dated 19-05-2016 before time and, thus, the Central Government had decided to disburse performance based subsidy for cane crushed during 2015-16 till the tenancy of the scheme subject to the conditions therein, inter-alia, revising the MIEQ under 18-09-2015 order to 15.70 Kg of sugar per MT of actual cane crushed during current crushing season 2015-16 upto 19-05-2016. ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 :::
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5. The petitioner claims that it had dispatched sugar for export with the export agency pursuant to MIEQ. The petitioner refers to documents annexed to the petition and submits that all the documents had been submitted with the respondents as are required to show dispatch of consignments, yet, respondents are not paying any heed nor are taking any decision nor have paid amount of subsidy in accordance with production subsidy scheme dated 02-12-2015 for export under MIEQ quota.
6. It is being submitted that the amount is required by the petitioner for various purposes. The petitioner is entitled to receive the amount of production subsidy under notifcation dated 02-12-2015 in accordance with the MIEQ pursuant communication dated 18-09-2015. It is stated that the sugar manufactured and exported for which subsidy is claimed, had been manufactured well before 19-05-2016 and had been dispatched in the month of April-2016 to the export agency and subsequently, the exporter has also exported/shipped the goods out of country.
7. Petitioner claims that while it has dispatched and exported 36980 quintal sugar, it was entitled to subsidy in accordance with provisions of scheme under notifcation dated 02-12-2015. The petitioner, thus, seeks mandamus to the respondents to release amount of subsidy to petitioner implementing the notifcations.
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8. In response to the writ petition, the respondents referred to the background under which order/communication dated 18-09-2015 had been issued referring to that no export subsidy or incentive had been ofered to the petitioner which was expected to be exported at prevailing international price. The respondents also refer to notifcation dated 02-12-2015 providing production subsidy at the rate of Rs.4.50 per quintal during crushing season 2015-16 and to that it was to be used for payment of dues of sugarcane farmers. It is referred to that depending on market conditions, the scheme was amenable for amendment or withdrawal. Thus, invoking the authority under the notifcation, production subsidy scheme had been withdrawn under notifcation dated 19-05-2016.
It also has been referred to that since production subsidy had been withdrawn before time, the Central Government had decided to ofer performance based subsidy for crushing season 2015-16 till tenancy of the scheme subject to certain conditions referred to under notifcation dated 12-09-2016. It has been particularly provided that export quota under MIEQ notifed vide order dated 18-09-2015 which was 15.70 kg of sugar per metric tonne of estimated cane crushing was revised to 15.70 kg of sugar per metric tonne of actual cane crushed during sugar season 2015-16 upto 19-05-2016 or existing quota already notifed ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 ::: 6 WP - 8313-2017 under MIEQ whichever is lower.
9. In reply, it has been submitted that factories which could not achieve the targeted performance in respect of exports till the tenancy of scheme upto 19-05-2016 were not considered eligible to avail of the beneft of scheme. The production subsidy was provided to all the sugar mills which have exported at least 40% of MIEQ till the date of tenancy of scheme. While the petitioner had not exported even 40% of their target by 19-05-2016, it had not been found eligible for production subsidy. It has been referred to in the reply, that as per records available with the respondents, the factory though had delivered 3698 metric tonnes of sugar from its premises but only 1696 metric tonnes of sugar could be exported by the stipulated date i.e. 19-05-2016 which does not meet with the requirement of 40% of its MIEQ which is the minimum quantity required to be exported by a mill for being eligible to avail of beneft of the scheme under notifcation dated 12-09-2016.
10. It has further been referred to in the reply that notifcation dated 12-09-2016 mainly envisages eligibility criteria and modalities of disbursement of subsidy to sugar mills after withdrawal of scheme before time and only such factories were eligible to be paid subsidy which were satisfying all the conditions as per the notifcation dated 12-09-2016. Scheme particularly ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 ::: 7 WP - 8313-2017 parameter about export of 40% of its MIEQ.
11. In rejoinder, the petitioner refers to that it had dispatched about 3698 metric tonnes sugar during 07-04-2016 to 22-04-2016 for export shipment to the exporter and the exporter, in-fact, had shipped sugar so dispatched during 12-05-2016 to 23-06-2016.
12. Contention on behalf of the respondents is that only 1696 metric tonnes of sugar had been exported from allocated MIEQ till 19-05-2016 which falls short of meeting the minimum requirement of 40% of its MIEQ.
13. While there is no dispute on factual aspect about sugar having been dispatched and exported, may not be before 19-05-2016, yet, the situation appears to emerge that about 3698 MT of sugar has been exported upto 23-06-2016.
14. The notifcation dated 02-12-2015 foating production subsidy scheme under its term no. 2 clause (i) provides modalities and extent of subsidy. As referred to above, it provides production subsidy at the rate of Rs. 4.50 per quintal of cane crushed for sugar season 2015-16, further clause (iii) provides that those mills which have achieved at least 80% of the target as per terms and conditions under the MIEQ scheme notifed on 18-09-2015 would be eligible for production subsidy. Under term no. 4 thereof of said ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 ::: 8 WP - 8313-2017 production subsidy scheme, the respondents were empowered to amend or withdraw the scheme which purportedly had been exercised withdrawing the scheme on 19-05-2016.
15. Subsequently, it appears that respondents had considered that the production subsidy scheme notifed on 02-12-2015 had been withdrawn before time and, thus, had decided to disburse performance based subsidy for cane crushing for 2015-16 sugar season till the tenancy of scheme subject to certain conditions under notifcation of 12-09-2016, inter-alia, setting out two terms (ii) and (iv) reading, thus, " (ii) Export quota under MIEQ notified vide order dated 18-09-2015 which was 15.70 Kg of sugar per MT of estimated cane crushing shall be now revised to 15.70 Kg of sugar per MT of actual cane crushed during current sugar season 2015-16 upto 19.05.2016 or existing quota already notified under MIEQ, whichever is lower; to be referred to as Revised Export Quota (REQ).
(iv) Those mills which have undertaken at least half of the targeted export quantity i.e. 40% of REQ under the scheme and in case of mills having distillation capacity, have supplied ethanol as per (iii) above shall be eligible for the production subsidy. Mills which have exported 80% of REQ and in case of mills having distillation capacity, have supplied targeted ethanol as per (iii) above, shall be eligible for subsidy @ Rs. 4.5 per quintal of cane crushed."
16. Second term as can be seen, requires to take into account actual cane crushing during the sugar season 2015-16 upto 19-05-2016 or existing quota already notifed under MIEQ whichever is lower to be referred to as REQ. Under clause (iv) above those mills which have undertaken at least half of the ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 ::: 9 WP - 8313-2017 targeted export quantity i.e. 40% of REQ under the scheme would be eligible for subsidy. The notifcation does not appear to imply export by 19-05-2016.
17. Despite the notifcation dated 12-09-2016 and clauses
(ii) and (iv) referred to above, the reply proceeds on the footing that eligibility criterion is 40% of MIEQ whereas aforesaid clauses would depict that it is 40% of the REQ.
18. While the annexures with regard to dispatch and supply to the exporter by petitioner have not been disputed and further it has not been disputed that the fgure of such dispatch and supply to exporter are well before 19-05-2016. To quite a large extent, it gives indication about actual cane crushing for sugar cane season 2015-16 upto 19-05-2016. It is not the case that said fgure 3698 M.T. having regard to actual cane crushing upto 19-05-2016, does not meet with 40% of revised export quota [REQ].
19. The department of Food and Public Distribution having regard to that withdrawal of 02-12-2015 notifcation, production subsidy scheme have been before time and, as such, had decided to be lenient to the sugar producers, who were hit by abrupt withdrawal of the scheme. The stand taken by respondents in their reply about there ought to be actual export before 19-05-2016, does not appear to correspond to the intention ::: Uploaded on - 28/11/2019 ::: Downloaded on - 16/04/2020 09:01:22 ::: 10 WP - 8313-2017 underlying the notifcation dated 12-09-2016. It may also be referred to that MIEQ scheme gives allowance to submit shipment documents of 180 days after export. Taking overall view of the matter, for benefts of notifcation dated 12-09-2016 petitioner's case may have to be considered.
20. We, therefore, deem it appropriate that respondents would consider petitioner's case for benefts in accordance with provisions of notifcation dated 12-09-2016 without detaining the same on the ground that sugar dispatches were not meeting with 40% of MIEQ, if sugar dispatches as stated comply with REQ requirements under notifcation dated 12-09-2016.
21. Rule is accordingly made absolute. Writ petition is disposed of.
[S.M. GAVHANE] [SUNIL P. DESHMUKH]
JUDGE JUDGE
arp/
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