Madras High Court
Senthilkumar. R vs The State Of Tamil Nadu on 15 February, 2023
Author: C.V.Karthikeyan
Bench: C.V.Karthikeyan
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 27.01.2023
Pronounced on : 15.02.2023
CORAM
THE HON'BLE Mr. JUSTICE C.V.KARTHIKEYAN
W.P.Nos.1084 & 1536 of 2023
and
W.M.P.Nos.1037, 1625 & 1627 of 2023
Cause title in W.P.No.1084 of 2023:-
1.Senthilkumar. R
2.Elavarasan. S
3.Rajasekar. C
4.Kumar. R
5.Veerapathiran. K
6.Selvarasu. G
7.Ravi. K
8.Thangappan. R
9.Ezhilselvan. P
10.Sridevi. V
11.Pandiyan. R
12.Krishnasamy. C
13.Natarajan. K
14.Thiruvenkatam. T
15.Thenmozhi. K
16.Velmurugan. R
17.Enbamoorthy. K
18.Dhatchnamoorthy. K
19.Sundaramoorthy. R
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20.Subramaniyan. T
21.Gnanasundari. D
22.Renaganathan. K
23.Palanivel. C
24.Manikandan. K
25.Selvakumar. R ... Petitioners
Vs.
1.The State of Tamil Nadu
Represented by its Secretary to Government,
Agriculture Department,
Fort St. George, Chennai – 09.
2.The Commissioner of Sugar,
II Floor, Aavin Illam,
3A, Pasumpon Muthuramalinganar Salai,
Nandanam, Chennai – 600 035.
3.E.I.D.Parry (India) Limited,
Dare House, 234,
NSC Bose Road, Parrys Corner,
Chennai – 600 001.
4.The Managing Director,
M.R.K.Co-operative Sugar Mills,
Sethiathope,
Cuddalore District – 608 702. ... Respondents
Cause title in W.P.No.1536 of 2023:-
E.I.D. Parry (India) Limited,
Represented by its Senior Vice President-Legal & Company Secretary
Mr.Biswa Mohan Rath
Dare House,
234, N.S.C. Bose Road, Parrys Corner,
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Chennai – 600 001. ... Petitioner
Vs.
1.The State of Tamil Nadu
Represented by its Secretary to Government,
Agriculture Department,
Fort St. George, Chennai – 09.
2.The Commissioner of Sugar,
II Floor, Aavin Illam,
3A, Pasumpon Muthuramalinganar Salai,
Nandanam, Chennai – 600 035.
3.The Managing Director,
M.R.K.Co-operative Sugar Mills,
Sethiathope,
Cuddalore District – 608 702. ... Respondents
Prayer in W.P.No.1084 of 2023: Writ Petition filed under Article 226 of
the Constitution of India praying to issue a Writ of Certiorari, calling for the
records of the impugned order dated 28.10.2022 bearing RC.No.4388/Cane-
2/2022 passed by the 2nd respondent and quash the same as being wholly
arbitrary and illegal.
Prayer in W.P.No.1536 of 2023: Writ Petition filed under Article 226 of
the Constitution of India praying to issue a Writ of Certiorarified
Mandamus, calling for the records of the Order in RC.No.4388/Cane-
2/2022 dated 28.10.2022 passed by the 2nd respondent and quash the same as
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being wholly arbitrary and illegal and consequently, direct the 2nd
respondent to ensure that the allotment of Kammapuram Firka continues
with the petitioner.
In WP No.1084 of 2023:
For Petitioners .. Mr.Vijay Narayan, Senior Counsel,
for Mr.Adithya Reddy.
For R1 & R2 .. Mr.R.Shunmugasundaram,
Advocate General,
Assisted by Mr.T.Seenivasan,
Additional Government Pleader.
For R3 .. Mr.Rahul Balaji
For R4 .. Mr.S.Silambanan,
Additional Advocate General,
Assisted by Mr.T.Arunkumar
In W.P.No.1536 of 2023:
For Petitioner .. Mr.Rahul Balaji
For R1 & R2 .. Mr.R.Shunmugasundaram,
Advocate General
Assisted by Mr.T.Seenivasan,
Additional Government Pleader.
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For R3 .. Mr.S.Silambanan,
Additional Advocate General,
Assisted by Mr.T.Arunkumar
COMMON ORDER
W.P.No.1084 of 2023 has been filed by 25 petitioners / cane growers in Kammapuram Firka in Cuddalore District in the nature of Certiorari seeking interference with an order dated 28.10.2022 in R.C.4388/Cane- 2/2022 passed by the 2nd respondent / Commissioner of Sugar, Chennai. The 1st respondent is the State of Tamil Nadu represented by its Secretary to Government, Agriculture Department and the 3rd respondent is E.I.D, Parry (India) Limited, (EIDPIL) having its registered office at Chennai and the 4th respondent is the Managing Director, M.R.K. Co-operative Sugar Mills (MRK) at Sethiathope in Cuddalore District.
2.The writ petition came up before this Court on 12.01.2023 for the first time. It was represented by learned Senior Counsel, Mr.Vijay Narayan, that the sugarcane grown in Kammapuram Firka in Cuddalore District were originally supplied to M/s.Shree Ambika Sugars Limited, (SASL) but owing https://www.mhc.tn.gov.in/judis 6 to various circumstances, the said company suffered orders of liquidation and thereafter, the 2nd respondent had passed an order on 07.06.2019 in R.C.No.261/Cane 2/2019 temporarily allotting the area to the 3rd respondent, East India Distilleries (Parry) India Limited. He also stated that EIDPIL had taken substantial steps in investing in cultivating the land and in monitoring the growth of sugarcane to ensure that the sugarcanes are ripe for harvest and for supply to EIDPIL, when, an order was passed on 01.02.2021 by the 2nd respondent, temporarily again reallocating the lands under Kammapuram Firka to the 4th respondent / MRK Co-operative Sugar Mill (MRK) at Sethiathope in Cuddalore District. It was contended that questioning that particular shift in the allotment, the petitioners and 42 other cane growers had filed W.P.No.7692 of 2022 complaining that the said order was passed violating principles of natural justice. It was further pointed out by the learned Senior Counsel that the said argument was found favour with a learned Single Judge of this Court, who, by an order dated 11.08.2022 quashed the said order and directed opportunity of hearing to be afforded by the 2nd respondent to the cane growers and to then pass a considered order.
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3.It was further represented that the order now impugned came to be passed once again temporarily allotting the lands in Kammapuram Firka to MRK. Charging that MRK did not have the capacity or the facility to crush sugarcane or even to undertake transportation of sugarcane, the writ petition was moved seeking urgent orders, since if the crushing of sugarcane is delayed, it would directly result in making spare the sugarcane juice, thereby directly affecting the income of the cane growers.
4.On 12.01.2023, this Court, taking into consideration the immediate exigency of the day to day issue namely the log jam in transport and consequent delay in crushing, had given an option to the petitioners to take a decision to either supply the sugarcanes to EIDPIL / 3rd respondent or to MRK / 4th respondent.
5.At that time, this Court wondered why EIDPIL had not filed any writ petition, since they were directly affected by the order, as they had advanced money to the cane growers for utilization towards preparation of https://www.mhc.tn.gov.in/judis 8 land, monitoring the growth of sugarcane and cutting of sugarcane and also transportation of the cut sugarcane to the sugar mills and it is well known that the amount so advanced is adjusted only after the sugarcanes are crushed and the sap or juice are extracted and their money value is calculated. To set matters right, and probably to also show that they are not hiding behind the sugarcane growers, the 3rd respondent, EIDPIL, then filed, not voluntarily, but because of that observation made by this Court, W.P.No.1536 of 2023. That writ was also filed in the nature of Certiorarified Mandamus again seeking interference of the very same order of the 2nd respondent, Commissioner of Sugar, Chennai, and dated 28.10.2022 in R.C.No.4388/Cane-2/2022.
6.In that writ, EIDPIL stated that monies had been advanced to the cane growers and that it was done to help the cane growers to get maximum yield from their lands. It was also stated that such amount will have to be adjusted on the value realized from the sap extracted by crushing sugarcane. https://www.mhc.tn.gov.in/judis 9
7.Since arguments surrounded the order dated 28.10.2022 passed by the 2nd respondent and since both the writ petitioners took allied stands without disputing any of the contentions raised by the other and as a matter of fact, lending a supporting hand to each other, and also since the points raised were contested in response by Mr.R.Shunmugasundaram, learned Advocate General on behalf of the 1st and 2nd respondents and by Mr.S.Silambanan, learned Additional Advocate General on behalf of MRK and also since the documents and judicial precedents relied on both the sides overlapped, bowing down to prudence, a common order is passed in both the writ petitions.
W.P.No.1084 of 2023:-
Affidavit:
8.In the affidavit filed by Senthikumar, the 1st petitioner, resident of Periyakottimulai Post, Virudhachalam Taluk in Cuddalore District, on behalf of the petitioners, it had been stated that the petitioners are agriculturists, which is an euphemistic term for cane growers, and are residents of Kammapuram Firka villages, which includes 18 villages, https://www.mhc.tn.gov.in/judis 10 namely, Dharmanallur, U.Adhanur, Villakkapadi, Sathapadi, Ottimedu, Perundurai, Siruvarappur, Peruvarappur, Periyakottimulai, Chinnakottimulai, K.Puthur, Kammapuram, Kummangalam, Gopalapuram, Ko.Mavidanthal, Su.Keeranur and Ko.Ponneri. In all these villages sugarcane is grown as the primary crop. The deponent stated that harvested sugarcane were originally supplied to M/s.Shree Ambika Sugars Ltd., (SASL), Pennadam. The said sugar mill went into liquidation. The petitioners were not paid for the sugarcane supplied. Thereafter, the 2nd respondent, Commissioner of Sugar, had allocated the lands in Kammapuram Firka to EIDPIL, by an order dated 07.06.2019 in R.C.No.261/Cane-2/2019. There were certain conditions imposed namely, that EIDPIL should do cane registration, carry out development activities to increase the area under sugarcane cultivation, arrange crop loans and ensure timely cutting and effect payment of FRP to the cane growers. It had been further stated that EIDPIL established a section office at Kammapuram and supported the cane growers. They also provided several incentives such as making advance payment to the sugarcane growers and adjusting those sums when sugarcanes were actually supplied. The cane growers were also https://www.mhc.tn.gov.in/judis 11 extremely satisfied with the services extended relating to prompt release of payment, transport arrangement, bank loan support, incentives payment and arrangement of quality seeds. It had been further stated that the cane growers were cultivating sugarcane and supplying sugarcane to EIDPIL.
9.However, by an order dated 01.12.2021 in RC.No.261/Cane 2/2019, the 2nd respondent, Commissioner of Sugar reallocated the lands in Kammapuram Firka to the 4th respondent, MRK. The cane growers had raised a protest by forwarding a representation dated 06.12.2021 seeking reallocation of their lands to EIDPIL. Thereafter, 67 cane growers filed W.P.No.7692 of 2022 questioning such reallocation. A learned Single Judge of this Court by an order dated 11.08.2022 had set aside the order upholding the contention that there had been violation of principles of natural justice and directed issuance of a fresh order after following due procedure.
10.It had been further stated that the 2nd respondent then invited the https://www.mhc.tn.gov.in/judis 12 cane growers and the officials of EIDPIL and MRK for a hearing. It had also been stated that all stakeholders took full advantage and made their submissions. EIDPIL had also given their written representations. The cane growers expressed their willingness to supply their cane only to EIDPIL.
11.It had been stated that however, the 2nd respondent had passed the order now impugned in the writ petition on 28.10.2022, rejecting the views expressed by the petitioners / cane growers and also the claims of the 3rd respondent, EIDPIL.
12.It had been further stated that MRK, though a Co-operative Sugar Mill, is “almost like a sick unit” and had not been functioning properly and had done crushing only for 40 days during the crushing season in the year 2020-2021 and was not even meeting the average capacity of utilization during the entire crushing season. In fact, there have been frequent breakdowns of machineries and the cane growers were put to much hardship, since payment for sugarcane supplied were delayed. Owing to frequent machinery breakdown, the sugarcanes were transferred to other https://www.mhc.tn.gov.in/judis 13 sugar mills including EIDPIL. It had been further stated that the cane growers in Kammapuram Firka had also suffered from the poor functioning of SASL, but had then received benefits and incentives from EIDPIL on allocation of their lands to EIDPIL. An apprehension was raised that they would again be put to sufferance by the further reallocation of the lands to MRK. It had been stated that the order is in violation of livelihood guaranteed under Article 21 of the Constitution of India.
13.A comparative statement was made right through the affidavit about the benefits gained if the lands were allotted to EIDPIL and the suffering which the petitioners would have to undergo, if the lands are re- allocated to MRK. It was also stated that the 2nd respondent had passed the order now impugned without application of mind and without taking into consideration the welfare and interest of the cane growers. It was also stated that the order was passed at the instance of some “vested interest” and the sugarcane growers should not be forced to supply sugarcane to a buyer, whom they apprehend, would not honour the commitment to effect payments in time.
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14.Though the affidavit filed in support of the writ petition runs to nearly about 24 pages, the grievances expressed are the same, namely, apprehension against the functioning of MRK, while at the same time praising in laudatory terms the functioning of EIDPIL. It was finally stated that this Court should interfere with the order of the 2nd respondent and set it aside and direct allocation of lands in Kammapuram Firka to EIDPIL. Supplementary Affidavit:
15.A supplementary affidavit was filed by the 1st petitioner, Senthil Kumar, during the course of the hearing of the arguments. It was stated that this Court should take note of the fact that three named individuals, whom the 2nd respondent had mentioned in the impugned order as having spoken in favour of supplying sugarcane to MRK actually do not have any direct interest over the issues in the writ petition. It was stated that two of them do not do sugarcane cultivation in their farm and one of them holds less than 50 cents of land. The three individuals belong to a village which does not lie in Kammapuram Firka. It had been further stated that SASL stopped payment https://www.mhc.tn.gov.in/judis 15 for the sugarcane supplied from the year 2016 onwards. The cane growers who had taken loans, however, continued to supply sugarcane in the hope that SASL would recommence payment. They had so supplied till insolvency resolution process was initiated at the instance of Punjab National Bank on 18.12.2019 against SASL.
16.It was also stated that it had been disclosed by the Interim Resolution Professional that SASL owed dues to 8882 cane growers to a total sum of Rs.35.49 Crores towards cane already supplied. The petitioners were also included in that list. It was further stated that there is slim hope of that money flowing to the benefit of the cane growers. The cane growers who had taken loans earned negative CIBIL scores, which affected their prospects of future loans for any purpose including educational loan. It had been simultaneously stated that EIDPIL had however stabilized their livelihood. It was therefore stated that reallocation of land to MRK would be pushing the cane growers back economically.
17.Along with the supplementary affidavit, documents were also https://www.mhc.tn.gov.in/judis 16 filed, which, according to the petitioner showed that as on 26.07.2021, MRK had also not cleared the amounts payable to the cane growers for the previous year 2020-2021. MRK had also refused to give the actual amount due. It was stated that MRK was surviving on “unreliable and delayed Ways and Means advances” by the Government.
Further affidavits:
18.On the last day of arguments, on 27.01.2023, a further ten individual affidavits were forwarded on behalf of the petitioners. All these affidavits contained the same averments. The page alignments were also the same. All of them had been signed by ten separate petitioners, but all categorized themselves as the “third” petitioner. The date on which the affidavits were attested had not been given, but to give some semblance of authenticity, xerox copy of Aadhar cards, for some unknown reason, were attached to each affidavit. All the affidavits were attested by the same Notary Public at Vridhachalam.
19.It is evident that all these affidavits had been prepared. But as is https://www.mhc.tn.gov.in/judis 17 always the case when there is mass preparation of documents, care had not been taken to indicate the rank of the individual deponents of the affidavit. It is not known whether the contents were explained to them. It is a shame that these affidavits were presented before the Court. But the counsel on record for the petitioners, who had acted as a postman, rather than as someone lettered in law and trained to scrutinize documents before presenting them in Court, stated that what was sent came back and what came back to him were filed into Court. To say the least, it is very disappointing, that this practice was adopted in a High Court by the Counsel.
20.At any rate, all the 10 deponents stated that, they had been forced to supply sugarcane to MRK and that they had been assured by the EIDPIL that they would take legal steps to address the issue. The representatives of MRK were however, threatening them that they would lodge police complaints. They had therefore entered into agreements with MRK for the 2022 – 2023 season.
https://www.mhc.tn.gov.in/judis 18 Counter affidavit of the 2nd respondent / Commissioner of Sugars:-
21.The 2nd respondent in the counter affidavit stated that SASL had not commenced their crushing operation during the year 2018 – 2019 season due to non-settlement of cane prices to sugarcane growers. The issues were referred to National Company Law Tribunal (NCLT). Thereafter, in exercise of the power conferred under clause 6(1)(a) of the Sugarcane (Control) Order, 1966, considering the welfare of the cane growers, the command areas of SASL had been temporarily allotted to nearby sugar mills by an order dated 07.06.2019. By that order, the lands in Kammapuram Firka were temporarily allotted to EIDPIL. It was further stated that subsequently, a request was received from MRK and representations were also received from cane growers, and consequently, the 2nd respondent had allotted Kundaveli West, Kundaveli East, Kuvagam firkas in Udaiyarpalayam and Andimadam Taluk of Ariyalur District and 18 villages of Kammapuram firka in Cuddalore District to MRK, by an order dated 01.12.2021. These lands were allotted taking into consideration, the lesser capacity utilization and reduction in cane registration by MRK and also the proposed land acquisition by the Neyveli Lignite Corporation Ltd and also the distance https://www.mhc.tn.gov.in/judis 19 between the lands from MRK and also proposed the commencement of cogeneration and ethanol plant by MRK and the willingess of the cane growers.
22.Aggrieved by that order, 67 cane growers had filed W.P.No.7692 of 2022 and by an order dated 11.08.2022, a learned Single Judge had set aside that particular order and had remanded the matter back to the 2nd respondent for fresh consideration after affording a fair hearing to all the stake holders. Accordingly, personal hearing was held on 11.10.2022 through virtual mode.
23.The representations made by EIDPIL were stated in the counter affidavit, wherein, it had been stated that EIDPIL expressed that they had registered 24,000 acres with production of around 8.4 lakh MT of sugarcane in their sugar mill area. Further, during 2019, Virudhachalam, Pennadam and Kammapuram firka were allotted to EIDPIL. It was further stated that sugar area was increased from 59 acres to 926 acres. https://www.mhc.tn.gov.in/judis 20
24.The representation given by the cane growers were also stated in the counter affidavit. They had stated that EIDPIL was settling the cane prices immediately after supply of cane, but MRK were not in regular operation and were encountering frequent breakdowns and there was a delay in payment for supply of sugarcane. They expressed preference to supply sugarcane to EIDPIL. The cane growers of Siruvapur village stated that they are willing to supply cane to EIDPIL owing to good response for cane development activities and prompt payment. A similar statement was also put forth by another cane grower from Vilakkapadi Village. One of the writ petitioners stated that though transport costs were borne by the sugar mills and the lands are nearer to MRK, the waiting hours for transport was more than the time taken to transport sugarcane for EIDPIL. Another writ petitioner stated that he received cane supply details through SMS from EIDPIL. Yet another writ petitioner stated even though he was willing to supply cane to MRK, they could not register the cane since 2016.
25.In the counter, the representations of the Managing Director of https://www.mhc.tn.gov.in/judis 21 MRK were also extracted. It was stated that the said Managing Director had informed that Kammapuram firka is situated about 15-20 kms from MRK factory. MRK was extending support to the sugarcane farmers for cane development activities, cutting labours arrangements, easy transport of cane and cutting orders in time. It was further stated that the delay in payment had been addressed through Ways and Means advances from the Government of Tamil Nadu and settled to the cane growers without delay. It was also stated that to ensure smooth functioning of the sugar mill and to provide for repairs and maintenance work an outlay of Rs.7 Crore had been made and an assurance was held out that MRK would run the factory without any breakdown. The Managing Director requested permanent allotment of lands in three nearby firka, namely, Kammapuram, Kundaveli and Koovagam, which had been temporarily allotted to them.
26.In the counter affidavit, the representations of the three other farmers, whose representations had been criticized in the supplementary affidavit extracted above had also been stated. Those three farmers had stated that the distance between the lands and MRK is just about 15 to 20 https://www.mhc.tn.gov.in/judis 22 kms and were willing to supply their cane to MRK.
27.In the counter affidavit the capacity utilization for the past five seasons between EIDPIL and MRK were compared and the distance between the lands in Kammapuram firka to MRK and EIDPIL were also compared and it was also stated that owing to the fact that insolvency proceedings were still pending, a decision had been taken in the order now impugned to temporarily allot the lands in Kammapuram firka to MRK.
28.It was further stated that the factors which prevailed upon the 2nd respondent to take such a decision were the capacity utilization, which was 101% for EIDPIL when compared to 43% for MRK and the distance of MRK from the lands and also the welfare of the cane growers. It was also stated that the projected commencement of 15 MW production capacity co- generation plant and 60 KLPD production capacity of ethanol plant required sugarcane to meet 100% capacity (4.3 Lakh Metric Ton). It was stated that therefore temporary allotment was made till the outcome of insolvency proceedings which had been initiated against SASL before the NCLT. https://www.mhc.tn.gov.in/judis 23
29.It was also stated that MRK has about 35,000 cane growers as members of the mill and every year nearly 5,000 cane growers supply cane measuring about 2.50 Lakh Metric Tons. It was stated that MRK has a daily capacity to crush 2500 TCD and to crush 4.30 LMT of cane per year with 5.0 MW power exporting capacity with the co-generation plant. However, for the past five seasons, the full capacity could not be achieved owing to urbanization and industrialization of other competitive and marketable crops.
30.It was stated that lands to the extent of more than 6000 acres have also been acquired by Neyveli Lignite Corporation It had been stated that Neyveli Lignite Corporation had proposed to acquire further lands of 6950 acres from MRK command area. It was stated that the Government had also extended financial assistance to clear the cane price arrears and the details had also been given in the counter affidavit. It was further stated that to protect the welfare of the cane growers, the State Advisory Price (SAP) was fully paid to the cane growers of MRK. Further additional cane price was https://www.mhc.tn.gov.in/judis 24 announced under Clause 5A of Sugarcane (Control) Order 1966, which was also paid to the cane growers registered with MRK though EIDPIL had not paid the SAP from 2013-14 to 2016 to 17 and had not paid the additional cane price from 2004-05 to 2008 to 09. The SAP and additional cane price had been challenged by South Indian Sugar Mills Associations, SISMA in W.P.No.28620 of 2014 and W.A.No.1850 of 2019 and EIDPIL is also a member in SISMA.
31.It had been further stated that the Department of Sugar is implementing the National Agriculture Development Program (NADP) to support the cane growers by providing subsidy of Rs.12,000/- per hectare for purchase of breeder seeds, subsidy of Rs.11,000/- per hectare for purchase of bud chip seedlings and subsidy of Rs.90,000/- per hectare to purchase Tissue culture seedlings.
32.It had been further stated that MRK had proposed to start a 15 MW co-generation plant during 2023 and an ethanol plant with a production capacity of 60 KLPD during 2024. It was thus stated that MRK was also https://www.mhc.tn.gov.in/judis 25 taking necessary steps to extend the cane cultivation area for full capacity utilization of crushing.
33.It was also stated that unexpected machinery breakdowns are common in sugar mills. The cane crushing was stopped on 07.01.2023 due to a major issue in Power Turbine and was resumed on 09.01.2023. For those few days, the harvested cane were diverted to Arignar Anna Sugar Mills, Kurunkulam, Thanjavur District and Perambalur Sugar Mills Ltd., Eraiyur, in Perambalur District.
34.It was finally stated that the writ petition should be dismissed. Rejoinder to the counter affidavit of the 2nd respondent:-
35.A re-joinder was filed by the petitioners denying all the above averments stated in the counter affidavit. Every statement was disputed. It was specifically stated that distance to the factory is only one factor and not a vital factor for allotment of a particular area. It was stated that there were instances of lands allotted to sugar mills, which were at a longer distance. https://www.mhc.tn.gov.in/judis 26
36.It was also stated that the impugned order was passed on the basis that insolvency proceedings against SASL were pending, but as a matter of fact, final orders had been passed bringing SASL into liquidation. It had been stated that therefore the order had been passed without knowledge of that actual fact situation. The allegations relating to breakdown of factory were also again reiterated.
37.It was also stated that cases filed by SISMA challenging SAP and additional cane price have no bearing on the allocation of land made by the 2nd respondent and are of no relevance. The statements about NADP program were also denied and disputed and it was stated that the cane growers were not benefited. It was also stated that the 2nd respondent was only projecting a future possibility and there was no statement about how to manage the frequent breakdowns and how the co-generation and distillery operation would be managed. It was also stated that MRK was not functioning properly and sugarcane was diverted to other sugar mills. It was stated that additional reasons had been given in the counter affidavit, and that a quasi-judicial authority should not impose its case in the counter affidavit.
https://www.mhc.tn.gov.in/judis 27 Counter affidavit of the 3rd respondent:-
38.The Senior Vice President-Legal & Company Secretary of EIDPIL also filed a counter. Though termed a counter affidavit, in the very second paragraph he stated that he “agrees with the averments contained” in the affidavit filed in support of the writ petition. It was further stated that, however, he denies the statements made in the counter affidavits of the 2nd and 4th respondents. In effect, the counter affidavit, which had been submitted on the last date of hearing, 27.01.2023 is practically a repetition of the affidavit filed in support of W.P.No.1536 of 2023. The statements are the same, but presented in a different format.
39.The deponent naturally had to state in laudable terms, the services rendered by EIDPIL. The counter affidavit also contained a sequence of events for sugarcane cultivation. It was not specifically oriented to the facts of this case. An effort had been made to state that EIDPIL had spent much labour and more importantly money, by way of funding the cane growers. It was also stated that the amount spent will have to be adjusted with the monies worth of the sap obtained from crushing the sugarcane. https://www.mhc.tn.gov.in/judis 28
40.It is therefore clear that EIDPIL is only concentrating on how to collect back the money already advanced to the cane growers and more particularly to the petitioners in the writ petition.
41.The deponent of the affidavit, then placed para wise remarks for the counter of the 4th respondent by denying and disputing every statement made by the 4th respondent. It was wholly unnecessary, since they had already agreed with the statements made by the petitioners. Counter affidavit of the 4th respondent:
42.MRK had been established in the year 1987 and registered under the Tamil Nadu Co-operative Societies Act, 1961 and also registered with the Director of Sugar, Chennai. The first crushing started in the year 1990. It had been stated that it was functioning on 43% of annual installed capacity utilization. It had been stated that the mill has to utilize full capacity between December to May of every year and shortage of supply of sugarcane would seriously impact the operation of the sugar mills. It had been stated that MRK provides employment directly to 600 employees and https://www.mhc.tn.gov.in/judis 29 indirectly to 6000 cane harvest men and women, agricultural labourers, 400 tractor drivers and 5000 agricultural labourers were getting employment opportunities through intercultural operations in cane fields throughout the year in Bhuvanagiri, Chidambaram, Kattumannarkoil Taluks of Cuddalore District and Andimadam firka of Udayarpalayam Taluk in Ariyalur District. It had been further stated that MRK has a capacity to crush 2500 tons per day and for crushing 4.30 lakhs MT of cane per year with 5 MW power exporting capacity with the co-generation plant. It had also been stated that NLC had acquired more than 6000 acres of cultivable land in the command area of MRK. Further, NLC had proposed to acquire a further 6500 acres of command area of MRK. The details relating to capacity utilization for the past five seasons of MRK and EIDPIL were given. The cane crushed and amount disbursed by MRK was also given and the allegations that MRK were not functioning properly were denied and disputed.
43.It was also stated that owing to a technical issue for two days from 07.01.2023, sugarcane was diverted to Arignar Anna Sugar Mills at Thanjavur and Perambalur Sugar Mills. Further, from Kammapuram Firka, https://www.mhc.tn.gov.in/judis 30 about 135 farmers had entered into an agreement with MRK for 2022 – 23 crushing season for about 431.5 acres. Out of the 135 members only 10 had chosen to file the writ petition and out of the 10 members 3 were actually supplying sugarcane to the MRK. The rest of the writ petitioners were unregistered cane growers. It was stated that after considering all aspects including lesser capacity utilization, reduction in cane registration, additional land acquisition proposed by NLC and the commencement of the Co-generation and Ethanol plant and willingness of the cane growers, the lands in Kammapuram Firka were temporarily allotted to MRK.
44.It was further stated that the Government had allotted Rs.88 Crores to support MRK and there was business augmentation by producing 15 MW electricity and 60 KL Ethanol Production at a cost of Rs.85 Crores which would commence from April 2023 onwards. It was stated that Rs.7 Crores had been allotted for replacement of old spare parts to achieve 100% installed capacity. It was stated that as on 19.01.2023, there were no dues payable to the cane growers who had supplied sugarcane till 31.12.2022. Payment is regular and those who supplied on the first of every month https://www.mhc.tn.gov.in/judis 31 would be paid after 14 days through RTGS. The weight of the sugarcane will be sent to the cane growers and vehicle owners through SMS from the weigh bridge of the sugar mill. They also have transport facility for 400 vehicles during the season, kept ready at free of cost for use of cane growers. Further, subsides were extended under various schemes by the Government. It was also stated that every sugar factory should run throughout the crushing season with a maximum of 90% capacity. It was stated that the sugarcane supplied from Kammapuram firka would help MRK to increase its crushing capacity. It was stated that the writ petition has to be dismissed.
Rejoinder:-
45.A re-joinder was filed by the petitioners to the said counter affidavit again denying and disputing all the statements. Once again a comparative statement of the benefits of EIDPIL and ill effects of MRK were reiterated and restated. It was stated that the Government was infusing funds to MRK, which was a sick unit. It was stated that the petitioners do not know why the Government is extending funds to sick units without any https://www.mhc.tn.gov.in/judis 32 proper debate. It was stated that MRK was not providing any facility or services as stated. It was stated that the statement that in future the losses would be reduced, would not lessen the suffering of the cane growers. It was stated that the fact that cane had been diverted for two days shows that MRK has no proper infrastructure facility. Further, a harmonious relationship cannot be maintained with the cane growers. It was therefore stated that the statements made in the counter affidavit should be rejected. W.P.No.1536 of 2023:-
Affidavit:
46.The Senior Vice President – Legal and Company Secretary of East India Distilleries (Parry) India Limited (EIDPIL), the petitioner in the writ petition in his affidavit, after pouring encomiums about EIDPIL and its financial and infrastructural capacities, then stated about Clause 6(1)(a) of the Sugarcane (Control) Order, 1966, which relates to reservation of an area where sugarcane is grown for a factory and about delegation of such power to the Cane Commissioner (Director of Sugar) in Tamil Nadu by the Central Government. It was stated in the affidavit that Kammapuram firka had been https://www.mhc.tn.gov.in/judis 33 allotted to EIDPIL by an order dated 07.06.2019 with certain conditions. It was further stated that EIDPIL complied with such conditions by carrying out development activities to increase the area under sugarcane cultivation, arranging cash loans, ensuring timely cutting orders and payment of FRP and cane registration in the lands allotted. It was then stated that originally an order was passed by the 2nd respondent temporarily reallotting the lands to MRK and as stated quite often above, the said order had been interfered with by a learned Single Judge of this Court who opined that principles of natural justice had not followed and therefore directed re-examination of the entire issue.
47.The petitioner then stated that EIDPIL had, during the opportunity of hearing provided by the 2nd respondent consequent to the directions of the learned Single Judge, pointed out that they had increased the cultivation area from 59 acres to 926 acres and that the factors in Clause 6 of the Sugarcane (Control) Order, apply to only initial allotment and not for modification of an earlier order. He therefore stated that there was no reason to modify the earlier order and to re-allot the lands under Kammapuram https://www.mhc.tn.gov.in/judis 34 firka to MRK. He also pointed out that the cane growers also expressed during the hearing, and also by letter dated 14.10.2022, their inclination to supply sugarcane only to EIDPIL. They had stated that EIDPIL settles cane processes immediately and provides good response for cane development and draws cane in time with good transport arrangement and had compared those benefits with alleged deficiencies of MRK in those areas. He also stated that MRK is a “more or less a sick unit”. He also found fault with the entire functioning of MRK on all grounds.
48.As a matter of fact, these statements were also made in the counter affidavit filed in W.P.No.1084 of 2023 which counter affidavit actually supported the stand of the petitioners therein.
49.It was also stated that distance is not a criterion and at any rate, EIDPIL had made good transport arrangements. The observations of the Hon'ble Supreme Court in India Sugar and Refineries Vs. A.S.Co- operative Society, was also extracted without giving the citation. The deponent of the affidavit probably expected this Court to follow the said https://www.mhc.tn.gov.in/judis 35 observations. The recommendations of the Rangarajan Committee, which was set up by the Government of India by a notification dated 14.03.1997 was also extracted.
50.The deponent also made a very significant statement in his affidavit and I would extract that particular sentence, which is as follows:-
“The petitioner also made timely payments to the farmers and provided several incentives to the sugarcane growers such as making advance payments to the sugarcane growers and adjusting those sums when the sugarcane is supplied.”
51. It had also been stated that “the petitioner would also suffer huge losses as all its investments, both qualitative and quantitative, whether in the nature of planting incentive or loan and towards other activities will go in vain causing substantial loss to it.” https://www.mhc.tn.gov.in/judis 36
52.It was finally stated in the affidavit that MRK was practically a sick unit and cannot lend much assistance to the farmers, whereas the petitioner, EIDPIL is the best sugar mill for the farmers in Kammapuram firka to supply sugarcane. It was urged that the writ petition should be allowed and the impugned order should be set aside.
53.The statements extracted above may not do full justice to the affidavit of the petitioner, but in effect, the averments made and the averments made in the affidavit in W.P.No.1084 of 2023 practically overlapped and therefore, the vital aspect of the investments made by EIDPIL alone have been extracted above.
Additional affidavit:-
54.An additional affidavit had been filed which was presented during the hearing of the writ petitions. In the additional affidavit, the reasons given about capacity utilization and distance in the impugned order were questioned and challenged. It was specifically stated that the 2nd respondent had considered EIDPIL as having a capacity of 5000 TCD instead of 7500 https://www.mhc.tn.gov.in/judis 37 TCD. Further, the cane requirement had been considered at 8.60 LMT instead of 12.90 LMT. Further, the capacity utilization was given as more than 101% instead of 74%. It was therefore stated that even EIDPIL is facing severe cane shortage to meet its requirement for sustainable operation. With respect to the distance, it was stated that the sugar mills bear the entire transport costs and the cane growers were not burdened with that expenditure. It was also stated that 303 cane growers had entered into agreements with EIDPIL. Thereafter, the details of the amounts given to the cane growers through banks during the last four years had been given. The incentives provided were stated. The statistics relating to the number of cane growers cultivating sugarcane, which had increased had also been given. It was stated that MRK was “blessed” with a huge area with substantial cane potential. All these details had been tabulated.
55.Reliance was also placed on G.O.Ms.No.362 dated 27.11.2006 issued by the Agricultural Department, Tamil Nadu Government, that whenever any area for any proposed new sugar mill is carved out from the reserved area of existing sugar mills, the overall development of sugar https://www.mhc.tn.gov.in/judis 38 sector in the State has to be kept in mind, in such a way, that both the cane growers and the sugar mills are benefited. It was also stated that cane growers in Kammapuram firka have been suffering year after year owing to their alliance with SASL. It had been stated that MRK suffered continuous breakdowns. The total hours available and the total hours lost had also been given in the form of a tabulation.
Counter affidavit filed by the 2nd respondent:-
56.The counter affidavit is practically an exact replication of the counter affidavit filed to the averments made in the writ petition in W.P.No.1084 of 2023 and the order impugned had been justified on the same grounds. It is not repeated herein.
Rejoinder to the counter affidavit of the 2nd respondent:-
57.The rejoinder is also similar to the rejoinder given by the petitioners in W.P.No.1084 of 2023. It had also been stated that the pendency or outcome of insolvency proceedings against SASL before the NCLT does not have any bearing on allotment of land under Kammapuram https://www.mhc.tn.gov.in/judis 39 firka. It was also stated that the reasons about commencement of co- generation plant and ethanol plant by MRK should not have had a bearing on the allotment of lands.
58.The reduction of re-joinder is quite sketchy, but since the facts are the same and there has been a repetition of basic facts, I would refrain from stating each and every point.
Counter affidavit by the 3rd respondent / MRK:-
59.The counter affidavit was once again a repetition of the counter affidavit filed to W.P.No.1084 of 2023. The main thrust in the counter affidavit was the justification of their operations and their capabilities and the promise held out that there would not be any breakdown and that they would also look after the welfare and benefits of the cane growers and that steps have been taken to ensure that there are no breakdowns and amounts have also been allotted for that particular purpose. The installation of co- generation plant and ethanol plant had also been restated. In effect, the impugned order had been justified and it had been urged that the writ petition should be dismissed.
https://www.mhc.tn.gov.in/judis 40 Rejoinder to the counter affidavit of the 3rd respondent:-
60.The petitioner joined issue with every statement made and also took advantage to state a few further facts in the rejoinder affidavit once again projecting the advantages which the cane growers will get, if they align themselves with EIDPIL and take a decision to disassociate themselves with MRK and the sufferings which they would be put to if they were to associate themselves with MRK. In effect, the gist of the pleadings had been reiterated.
Arguments:
61.Heard arguments advanced by Mr.Vijay Narayan, learned Senior Counsel on behalf of the petitioners in W.P.No.1084 of 2023 and by Mr.Rahul Balaji, learned counsel on behalf of the petitioner in W.P.No.1536 of 2023 / 3rd respondent in W.P.No.1084 of 2023 and by Mr.R.Shunmugasundaram, learned Advocate General on behalf of the 1st and 2nd respondents in both the writ petitions and by Mr.S.Silambanan, learned Additional Advocate General, on behalf of the 4th respondent in W.P.No.1084 of 2023 / 3rd respondent in W.P.No.1536 of 2023. https://www.mhc.tn.gov.in/judis 41
62.Even before I address the arguments in detail, I must point out to the reference made to the judgment of the Constitution Bench reported in (1978) 1 SCC 405, Mohinder Singh Gill and Another Vs. The Chief Election Commissioner, New Delhi and others.
63.Mr.Rahul Balaji, learned counsel had adverted to this judgment by stating that counter affidavits cannot improve the reasons given in the impugned order. I must bow down to the wisdom of the said pronouncement, but I must also state that the said argument has to be cut both ways, as both the petitioners in both the writ petitions and everybody in their affidavits and also in their supplementary affidavits and in the additional affidavits and also in the rejoinder to the counter affidavits have substantially expanded the scope of arguments by giving more specific details. Thus both the petitioners and the respondents have moved a long distance in advancing reasons to either reject the impugned order or uphold the impugned order. To the extent possible, an endeavour shall be made to address all issues raised.
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64.Mr.Vijay Narayan, learned Senior Counsel, as a prelude, pointed out the intricacies involved in the plantation of sugarcane and the assistance rendered by sugarcane factories to cane growers. The learned Senior Counsel pointed out that EIDPIL, has a capacity to crush 7000 TCD which can be termed as 7000 tons per day of sugarcane. In this regard, to facilitate crushing activities to be carried out in full scale, the learned Senior Counsel stated that it required logistic arrangements for about 700 lorries to each carry 10 tons of sugarcane from the places where the sugarcanes are harvested to the factory premises. The learned Senior Counsel invited this Court to visualize the magnitude of the work which is undertaken for 10 tons of sugarcane to be carried in 700 lorries everyday during the crushing season which runs from December to May every year. This would require a huge quantity of sugarcane to be grown and grown systematically in such a manner that they have to provide 7000 tons sugarcane every day. This would require a deep study of the area under cultivation, a deep study of the manner in which the seedlings will have to be planted, the sequence of such planting to ensure that crops are not harvested at the same time, but in batches, to enable cutting of the first batch and thereafter followed by the https://www.mhc.tn.gov.in/judis 43 second batch to ensure that nearly about 7000 tons of sugarcane are cut everyday during the crushing season.
65.The learned Senior Counsel stated that the petitioners in W.P.No.1084 of 2023 had benefited from the assistance provided by the officials of EIDPIL. It was pointed out that EIDPIL as an established company, running the factory for more than two centuries has the expertise required to assist the sugarcane growers. There is an exclusive research and development wing and with the help of their knowledge, officials take the land under control, prepare the lands for plantation of seedlings, monitor the growth of the sugarcanes till they attain full size and during the time of their growth ensure that they are not affected by pests and for that purpose also provide necessary manure and fertilizers and pesticides to be sprayed in proper quantity to ensure that the plants are not affected and that quality sugarcane plants are produced, so that maximum sap/juice is extracted.
66.The learned Senior Counsel invited the Court to further visualize the transport arrangements to be made during the cutting season in the https://www.mhc.tn.gov.in/judis 44 narrow roads of the villages in Kammapuram firka. Every day provision must be made for movement of 700 lorries. To ensure their smooth movement, there must be prior cutting and loading of 10 tons of sugarcane in each lorry at intervals and these lorries have to moved from the lands of the petitioners to the factory immediately. The sugarcanes are registered and crushed to ensure that their value is not depreciated in any manner by exposure to sunlight and such other factors. The sugarcanes should not become dry. That would affect the quantity and quality of the sap / juice which are extracted.
67.The learned Senior Counsel further pointed out that sugarcane, unlike paddy or wheat is a crop which grows for one full year and has to be nurtured through the year. The petitioners are cane growers. They get their returns only after one year. EIDPIL therefore ensures that their basic necessities are provided for, and the seedlings are provided, manures and fertilizers and pesticides are also provided, labourers are supplied for the fields and transport is taken care of. The expenses towards all these are borne by EIDPIL and later, after the sugarcanes are crushed, and money https://www.mhc.tn.gov.in/judis 45 value is determined, the investments made upfront by EIDPIL are adjusted with the amounts payable to the cane growers.
68.The learned Senior Counsel further pointed out the scientific method adopted and undertaken by EIDPIL. He pointed out that messages through SMS are sent from the weigh bridge station directly to the cane growers indicating the quantity of sugarcane transported. The quantity of the sap/juice which are extracted are also immediately informed to the cane growers and the payments are released within a period of seven days. It was thus pointed out that there was never any delay or log jam caused in the process. The entire operation is conducted by the officials of EIDPIL for the benefit of the cane growers.
69.The learned Senior Counsel then pointed out the plight which the cane growers underwent when the command areas were originally under the control of SASL. Owing to various factors, SASL required appointment of an interim Resolution Professional. The matter become worse and finally, orders of liquidation came to be passed.
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70.The learned Senior Counsel also pointed out the actual order dated 20.06.2022 passed by the National Law Tribunal Division Bench – II, Chennai in IA(IBC)/1263(CHE)/2021 in IBA/1017/2019 on an application filed Punjab National Bank. Mr.Anurag Goel had been appointed as the Resolution Professional of SASL.
71.In paragraph No.13 of the aforementioned order, NCLT had very specifically stated as follows:
“13. ..... this Adjudicating Authority is left with no other choice than to order Liquidation of the Corporate Debtor.
Accordingly, we hereby order Liquidation of the Corporate Debtor. The applicant Mr.ANURAG GOEL is hereby appointed as the Liquidator of the Corporate Debtor to carry out the liquidation process. ......”
72.The learned Senior Counsel stated that particular point of time, the 2nd respondent stepped in and allotted the lands under the command area of https://www.mhc.tn.gov.in/judis 47 SASL to EIDPIL. It was stated that this allotment of lands came as a huge relief to the cane growers who at last had the benefit of experienced officials running a proper sugarcane factory and they reasonably believed that their expectations and returns for the growing of sugarcane would be obtained without default. It was further pointed out that after EIDPIL had come into picture, the cultivable area of land had increased from 59 acres to 926 acres. It was stated that this development of cultivable lands had brought about prosperity to the cane growers. It was pointed out that the impugned order had given a shock to the cane growers and without appreciating their representations in this regard, the 2nd respondent had proceeded to pass the impugned order.
73.The learned Senior Counsel, then pointed out the impugned order which had been passed. He pointed out the earlier order which had been passed. W.P.No.7692 of 2022 came to be filed by 67 cane growers. A learned Single Judge had appreciated the stand of the petitioners and it was held that it was imperative that they should be heard and accordingly, set aside that particular order and remanded the matter back to the 2nd respondent for fresh consideration by following due process. https://www.mhc.tn.gov.in/judis 48
74.The learned Senior Counsel stated that thereafter a communication was received from the 2nd respondent inviting the petitioners in W.P.No.1084 of 2023 and also the petitioner / EIDPIL in W.P.No.1536 of the 2023 to come forward and give their representations. They both did. However, the learned Senior Counsel lamented that the submissions had not been properly reduced in the order. The petitioners in W.P.No.1084 of 2023 had given extensive representations. They had pointed out the extreme suffering which they underwent when the lands were allocated to SASL and the corresponding benefits which they had when the lands were re-allocated to EIDPIL. The learned Senior Counsel pointed out that they were willing to supply their sugarcane to EIDPIL alone. It was pointed out by the learned Senior Counsel, that respect should have been given to such clear expression of intent by the cane growers.
75.The learned Senior Counsel wondered at the rationale and logic behind re-allocating the lands to MRK. As a matter of fact, he pointed out news paper reports wherein, consequent to the impugned order, lorries were diverted to MRK and this had caused traffic commotion and the lorries were https://www.mhc.tn.gov.in/judis 49 kept waiting outside the factory with loaded sugarcane. The learned Senior Counsel pointed out that this would have directly affected the extraction of sap / juice from the sugarcane, as the sugarcanes would dry up owing to passage of time. The learned Senior Counsel stated that this situation had never happened when the lands were allotted to EIDPIL. The learned Senior Counsel stated that though it is a fact that EIDPIL factory is situated at a far more distance than MRK, still the experience of the officials of EIDPIL ensured that transportation to such distance was not a factor at all to affect the income received by the cane grower.
76.The learned Senior Counsel further pointed out that the machineries in MRK suffered a breakdown and there were occasions when the factory itself was closed for repair purposes. It was also pointed out that payment to the cane growers by MRK would be delayed. It was stated that MRK was dependent on the Government for advancing loans. It was therefore stated that this is a clear indication that debts circulated without any emancipation or relief.
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77.The learned Senior Counsel then criticized the opinions of the three farmers who had spoken on behalf of MRK during the personal hearing. He very specifically questioned their creditabilities and locus. The learned Senior Counsel stated that they were cane growers having very negligible land or cane growers from a different village which does not come under Kammapuram firka or those who did not grow sugarcane at all. It was stated with much emphasis by the learned Senior Counsel that the 2 nd respondent should not have taken their views into consideration as over riding the views of the petitioners in W.P.No.1084 of 2023.
78.The learned Senior Counsel then relied on an order of a Division Bench of this Court in W.A.No.401 of 1998 order dated 08.06.2010, Nadippisai Pulavar K.R.Ramasamy Co-operative Sugar Mills Cane Growers Association Vs. Union of India. In that particular Writ Appeal, the Division Bench of this Court was concerned with an order of a learned Single Judge dated 20.04.2009 in W.P.Nos.19322 of 1997 batch and more particularly, with an interim order vacating the interim stay granted. The stay had been granted against an order of the Cane Commissioner who had https://www.mhc.tn.gov.in/judis 51 re-allotted lands to Thiru Arooran Sugars Limited from N.P.K.R.R. Co- operative Sugar Mills. The Division Bench took note of the arguments advanced on behalf of the private mills that under Section 3 of the Essential Commodities Act, 1955, the Cane Commissioner as well as the State Government had the authority to delimit the cane areas in accordance with the provision of the Sugar (Control) Order 1966 and that such delimition of the area was in the nature of a legislative function and that principles of natural justice have no application. In the face of such arguments presented, the Division Bench finally held as follows :
“103. ...When once statutorily as of right the cane growers are entitled to be included as representatives in the Advisory Committee namely the Area Delimitation Committee, the failure to include them in the said Committee by itself would invalidate the order of the Cane Commissioner.”
79.The learned Senior Counsel then relied on a judgment of the High Court of Karnataka reported in ILR 2012 Karnataka 6380, Tungabhadra Sugarcane & Banana Growers Association and Ors. Vs. The Government of Karnataka and Ors. The Division Bench therein was concerned with a https://www.mhc.tn.gov.in/judis 52 reference by a learned Single Judge. The issue was with respect to the price which had been agreed between the parties under the contractual agreements. In that judgment, the Division Bench had an occasion to examine the authority of the Government to reduce the quantum of sugarcane to be supplied to factories consequent to the change in the reserved area. The fundamental principle as laid down was that notices must be issued and all parties must be heard. In this connection, the Division Bench held as follows :
“24. The underlying principle behind these orders is based on public policy and public interest. The first and foremost requirement for the profitable running of the sugar factory is that it should get adequate quantity of sugarcane everyday throughout the crushing season and for ensuring this, a system of reserving or assigning an area in favour of sugar factory has been evolved. The reservation of an area ensures the supply of the entire sugarcane grown therein in the factory in whose favour it has been reserved. Similarly the assignment of an area ensures the supply of such quantity of sugarcane to the factory in whose favour it has been assigned. Sugarcane from its reserved or assigned https://www.mhc.tn.gov.in/judis 53 area cannot be sold to any other factory in the vicinity even if it offers a higher price to a grower. This arrangement does not allow the market forces to operate and thereby completely avoids competition amongst the sugar factories which could lead to escalation in prices. Once an area is reserved in favour of a factory the cane grower in the said area or the cane growers co-operative society operating therein gets tied to that factory and has to compulsorily enter into an agreement in prescribed form. Cane grown in the reserved or assigned area cannot be purchased by anyone without the previous permission of the Deputy Commissioner. Even in the event of a breakdown in the factory or its inability to purchase due to calamities or circumstances beyond human control, the cane grower or the cane grower's co-operative society is not at liberty to make any other arrangement for disposal of cane except after giving a week's notice to the factory and obtaining prior permission of the Cane Commissioner. The provisions referred to above have been made for the benefit of the sugar factory so that it is assured of and gets a continuous supply of freshly harvested sugarcane in quantity according to its crushing capacity and for the whole duration of the crushing season. No doubt the cane grower also gets some advantage in the sense that purchase of his yield is assured https://www.mhc.tn.gov.in/judis 54 but at the same time many limitations and restrictions are imposed upon him. In view of the aforesaid statutory provisions, the position of a cane grower becomes entirely different from that of a farmer producing any other kind of agricultural crop where there are absolutely no restrictions upon him.
28. It is in this background we would like to dispel some confusion or doubt in the mind of the authorities as well as parties are concerned. The power of the Government to earmark a particular area as sugarcane growing area for a particular factory is different from the power to permit sugarcane growers in the reserved area from exporting the excess sugarcane which is not utilized by the factory which is situated in the said reserved area. Under Clause 6 of the order a power is conferred on the Central Government which by delegation is conferred on the State Government, to reserve any area where sugarcane is grown for a factory having regard to its crushing capacity and the availability of sugarcane in the reserved area and need for production of sugarcane with a view to enabling the factory to purchase that quantity of sugarcane required to it. Once the power is exercised and an area is reserved, the factory which is set up on the basis of that assurance the assured https://www.mhc.tn.gov.in/judis 55 continuous supply of sugarcane to the factory should follow. If for any reason that area is to be curtailed/reduced, the aggrieved person will be the factory.
Without hearing the factory, without affording a reasonable opportunity to them the said power cannot be exercised to reduce the area. In fact in the instant case the area earmarked in the year 1979 was not sufficient or adequate. Therefore, on a request made by the factory in the year 1998, additional area was included to the reserved area. When that being the case, if the area earmarked or reserved for the petitioner is to be reduced, they must be heard before such an order is passed. However this reduction of the reserved area is nothing to do with the grant of permit to export sugarcane grown in the reserved area. Once an area is reserved and the cane is grown, in any particular year, if the factory is not able to crush the entire sugarcane grown, it is in those circumstances provision is made for export of that excess sugarcane by granting permits. The permit to be granted is only for that particular year when the sugarcane grown is in excess and the factory situated in the reserved area is unable to crush the same. That is a power which is conferred on the Deputy Commissioner by the State. But the Deputy Commissioner has no power to reduce the reserved area which is reserved by the State https://www.mhc.tn.gov.in/judis 56 Government by virtue of the power conferred under Clause-
6. Even in respect of grant of permits to export sugarcane, such an export would effect the existing factory in the reserved area. Before such export is permitted by issue of a permit, the factory is to be heard. They should be notified. Only after hearing them, a permit could be issued.
Therefore it is of utmost importance for the authorities to note even in case of grant of permits, they have no absolute power and the power to issue permit is to be exercised in a fair manner by following the principles of natural justice, that is by hearing the petitioner - factory, before any such permit is granted.
80.It is to be noted that the Division Bench had actually held that the focus should be on the factories when lands are re-allocated.
81.The learned Senior Counsel then relied on a judgment of a learned Single Judge of the Allahabad High Court reported in MANU/UP/0178/2010, Simbholi Sugars Ltd. Vs. State of U.P. It had been held as follows:
https://www.mhc.tn.gov.in/judis 57 “14.While deciding an issue with regard to reserved and assigned area whether it is the Cane Commissioner or the State Government, effective hearing should not only be given to factory but also the cane-growers co-operative society. Due weight should be given to the opinion of cane- growers, cooperative society while adjudicating dispute under Section 15 of the Act. It is the cane-growers who are aware of the ground realities of the locality as well as default if any, made by the factory with regard to payment of dues to the cane-growers or other facilities required under law.
22.In reversing 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---
(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 the factory in previous year,
(d)previous reservation and assignment orders,
(e)the quantity of cane to be crushed in factory,
(f)the arrangements made by the factory in previous years for payment of cess, cane price and commission, https://www.mhc.tn.gov.in/judis 58
(g)the views of the Cane-growers' Co-operative Society of the area,
(h)efforts made by the factory in developing the reserved for assigned area.
54.Similarly, in case sugar mill does not make any effort to develop any area and cane production reduced substantially, then also the area of such sugar mill may be reduced and given to other sugar mill which is comparatively serving the cane-growers' Co-operative Society or cane-growers in a better way.”
82.The learned Senior Counsel then relied on a judgment of the Division Bench of the Allahabad High Court reported in MANU/UP/0001/2007, Balrampur Chini Mills Ltd. Vs. State of Uttar Pradesh and Ors. It had been held as follows:
“45.Rule 22 makes it clear that in reserving an area, the Cane Commissioner may taken into consideration the distance of the area from the sugar factory, facilities for transport of cane from the area, the quantity of cane supplied from the area to the factory in previous year, previous https://www.mhc.tn.gov.in/judis 59 reservation and assignment order, the quantity of cane to be crushed in the factory and the arrangements made by the factory in previous years for payment of purchase tax, cane price Commission and the views of the Cane Growers’ Cooperative Societies of the area, efforts made by the factory in developing the reserved or assigned area.”
83.The learned Senior Counsel then relied on a judgment of the Hon'ble Supreme Court reported in MANU/SC/0008/1956 : AIR 1956 SC 676, Ch.Tika Ramji and Ors. Vs. The State of Uttar Pradesh and Ors. It had been held as follows:
“61.The cane grower, moreover, is not prevented absolutely from selling his sugarcane. The only person to whom he cannot sell his sugarcane is the owner of a factory but that does not prevent him from selling his sugarcane to any other person or for any other purpose, e.g. the manufacture or production of gur or rab or khandsari or any variety of product other than sugar. There may be of course difficulties in the matter of his being able to sell the https://www.mhc.tn.gov.in/judis 60 same in that manner but that does not mean that there is an absolute restriction on his power of disposal of his goods unless and until he becomes a member of a Cane-growers' Co-operative Society. He is at perfect liberty not to become a member of a Canegrowers' Co-operative Society if he chooses not to do so and no power on earth can compel him to become such a member. Just as he is not bound to become a member of a Canegrowers' Co-operative Society he is equally not bound to offer his sugarcane for sale to the occupier of a factory even if he happens to be a canegrower within the area reserved for that factory. His freedom in that behalf is absolutely unrestricted and we do not see how it can be urged that the provisions of the impugned Act and the notification dated 27-9-1954 are violative of his fundamental right under Article 19(1)(c) of the Constitution.”
84.The learned Senior Counsel then relied on a judgment of the Hon'ble Supreme Court reported in MANU/SC/0311/1998 : 1998 4 SCC 324, Maharashtra Rajya Sahakari Sakhar Karkhana Sangh Ltd. and Ors. Vs. State of Maharashtra and Ors. It had been held as follows:
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10. ..... Clause 6(1) only prescribes the matters with reference to which the Central Government may pass orders by notifying in the Official Gazette. By virtue of the Notification dated 16-7-1966, the State Government is also empowered to do so. Sub-clause (2) of clause 6 of the Sugarcane (Control) Order, 1966 is dependent upon an order made under para (c) of sub-clause (1) of clause 6.
Admittedly there is no order passed by the Central Government under clause 6(1)(c). Such an order was made by the State Government in 1984 as referred to by us earlier. The said Order of 1984 is amended by the present impugned Order of the State Government. It is not contended before us that the State Government has no power to amend the Order of 1984 or that the power delegated by the Central Government by the Notification dated 16-7-1966 got exhausted with the passing of the Order of 1984 and thereafter the State Government had no power to issue another order. Hence, there is no merit in the contention that the State Government has no power to pass the impugned order.”
85.The learned Senior Counsel then relied on a judgment of the Hon'ble Supreme Court reported in MANU/SC/0016/1968 : 1969 1 SCC https://www.mhc.tn.gov.in/judis 62 308, The Purtabpore Co., Ltd., Vs. Cane Commissioner of Bihar and Ors. It had been held as follows:
“14. This takes us to the question whether the proceeding which resulted in making the impugned orders is a quasi-judicial proceeding or an administrative proceeding. There was some controversy before us whether a proceeding under clause 6(1) of the “order” is a quasi judicial proceeding. It is not necessary for us to decide that question as in this case we are only concerned with the proceeding which resulted in making the impugned orders. In that proceeding the only question before the authorities was whether all or some of the villages reserved for the appellant should be taken out from the reserved area and reserved for the 5th respondent. The plea of the 5th respondent was that all those villages should be reserved for it whereas the appellant insisted that the reservation made in its favour should not be disturbed. Whether there was a lis between the appellant and the 5th respondent at an earlier stage or not, we are of the opinion, as soon as the 5th respondent moved the Government for altering or modifying the reservation made in favour of the appellant, a lis commenced. The dispute that arose https://www.mhc.tn.gov.in/judis 63 between the appellant and the 5th respondent had to be decided on the basis of the objective criteria, prescribed by clause 6 of the “order” i.e. (1) the crushing capacity of the appellant mill; (2) the availability of the sugarcane in the reserved area and (3) the need for the production of sugar.
15. There is hardly any doubt that the modification of the reservation made in favour of the appellant would have had serious repercussions on the working of the appellant's mill. It was bound to affect its interests adversely. Hence it is not possible to accept the conclusion of the High Court that the proceeding before the Cane Commissioner was not a quasi judicial proceeding.”
86.The learned Senior Counsel then relied on a judgment of a learned Single Judge of this Court in reported MANU/TN/0364/2013, Mangalam and Ors Vs. Commissioner of Sugar and Cane Commissioner and Ors. It had been held as follows:
23.The Government of Tamil Nadu issued orders in G.O.Ms. No. 217, Industries Department, dated 18.08.1997 directing that the Area Delimitation https://www.mhc.tn.gov.in/judis 64 Committee shall continue to examine the area demarcation proposals in respect of new Sugar Mills and the Sugar Mills under Private Sector. Based on the recommendations of the Area Delimitation Committee, the Government/Cane Commissioner shall pass orders under Clause 6 of the Sugarcane (Control) Order, 1966.
24. M/s. Dharani Sugars and Chemicals Limited was established in the year 1994-1995. The 3 firkas, namely Mangalam, Naidumangalam and Thurinjapuram in Thiruvannamalai Taluk were allotted to them, under Clause 6 of the Sugarcane (Control) Order, 1966, besides other firkas. When M/s. Arunachalam Sugar Mills was established during 2001-2002, the above 3 firkas as well as other firkas were allotted to M/s. Arunachalam Sugar Mills. However, M/s. Arunachalam Sugar Mills suspended its operation within 2 years of its establishment.
25. While so, the Government issued orders in G.O.Ms. No. 277, Agriculture Department, dated 25.10.2005 allotting 7 firkas, namely Mangalam, Naidumangalam, Thurinjapuram, Somasipadi, Keelpennathur, Veraiyur and Thiruvannamalai to M/s.
Dharani Sugars and Chemicals Limited temporarily, till https://www.mhc.tn.gov.in/judis 65 the revival of M/s. Arunachalam Sugar Mills Limited. The said Government Order was issued based on the recommendations of the 28th Area Delimitation Committee meeting that was held on 21.10.2005.
31. Since I have come to the conclusion that the impugned order dated 24.12.2009 is opposed to G.O.Ms. No. 277, I have no hesitation to quash the same.
Moreover, there is no recommendation from the Area Delimitation Committee for transfer of these 2 firkas namely, Mangalam and Thurinjapuram to M/s.
Bannariamman Sugar Mills Limited, from M/s. Dharani Sugars and Chemicals Limited.”
87.Pointing out the ratio laid down in the above judgments the learned Senior Counsel stated that the order impugned is surrounded with impeachable reasons. Further the proceedings before the NCLT against SASL had been wrongly understood as pending. It was pointed out that the Cane Commissioner, the 2nd respondent should have direct knowledge about the various petitions relating to sugar factories at various forums and therefore criticized the ignorance exhibited by the 2nd respondent with respect to the liquidation order passed by NCLT.
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88.The learned Senior Counsel then pointed out a Division Bench judgment of the Allahabad High Court reported in MANU/UP/0114/2006, Kisan Sahkari Chini Mills Ltd. Vs. State of U.P and Ors. It had been held as follows:
“12. Having considered the said statutory provision, we are of the opinion that having regard to the purpose and objective of the legislation, the aforesaid (underlined) words of the statute are not intended to give an unrestricted free hand to the Cane Commissioner to keep revising his reservation orders on any slight pretext. Any other interpretation would not only have the risk of mischief on part of sugar factories, but would also not be in the interest of the cane growers. One of the advantages of long term reservation is to give incentive to the factories to help in developing their reserved areas for better yield. Therefore, the power conferred by the said (underlined) words can be exercised only in the event of some major change, which may have taken place in the situation subsequent to the original reservation order. For example, where an area has been reserved or assigned in favour of a particular sugar mill which has subsequently expressed its unwillingness or inability to continue with any part of its reserved or assigned area, in which case the part of the area may be assigned to https://www.mhc.tn.gov.in/judis 67 another factory. Similarly, where for some subsequent unforeseen circumstances, a factory has become incapable of operating its reserved or assigned area. There may be other cases where exercise of the power may be justified on the part of the Cane Commissioner, but all such cases must relate to some subsequent major change in the situation and the power cannot be exercised merely because of a new line of thought on the part of the Cane Commissioner, or on the ground that there was some error (short of fraud) committed while passing the original order of reservation or assignment. At this point we must clarify, that the first example given above would not include cases where a factory says that it wants to surrender part of its reserved area in exchange or other area, because this would open a back-door to review of reservation.”
89.It was thus very specifically pointed out by the learned Senior Counsel that the Cane Commissioner cannot re-allot the land as according to his whims and fancies. There should be a proper consideration given to the efforts taken by EIDPIL to upgrade the standards of cultivation to ensure that there was maximum yield of sugarcane grown from the lands in Kammapuram firka and the support which had been given. He further stated https://www.mhc.tn.gov.in/judis 68 that the change of the allocation of land midway in the season would directly affect the financial condition of the petitioners in W.P.No.1084 of 2023.
90.The learned Senior Counsel also pointed out that the petitioners had filed affidavits stating that they preferred to supply sugarcane to EIDPIL alone. The learned Senior Counsel also pointed out the report of an inspection conducted in MRK and the reply received under RTI Act. It was revealed stated in the reply that there had been consistently significant number of working hours lost in MRK, which ranged from 287 hours to 687 hours in the crushing seasons. It was stated that transferring the land to such an inefficient cane factory would directly affect all the petitioners and it was therefore insisted that this Court should interfere with the orders of the 2nd respondent and set aside the same. Learned Senior Counsel was insistent in his assertion that the Writ Petition should be allowed.
91.As pointed out earlier EIDPIL did not file a writ petition in the first instance. This Court had expressed wonder, as the lands which were allocated to them had been transferred to MRK.
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92.It had been the contention of Mr.Vijay Narayan, that EIDPIL had invested heavily on the cane growers in the hope that the amounts can be adjusted when the sugarcanes are actually crushed, but in the face of the said financial investment made, EIDPIL had not questioned the impugned order. They then joined in the fray and filed W.P.No.1536 of 2023.
93.Mr.Rahul Balaji, learned counsel for EIDPIL adopted the arguments of Mr.Vijay Narayan, but further expanded the same by pointing out that MRK was thriving on loans given by the Government. It was pointed out that the Government had raised Ways and Means loans which in effect meant circulation of public fund to induce funds to MRK. It was therefore pointed out by the learned counsel that while inefficiency of MRK was rewarded, efficiency of EIDPIL was punished. The learned counsel further pointed out that any order passed in the nature of a quasi-judicial order should contain good reasons to justify the same.
94.In this connection, the learned Counsel relied on a judgment of the Hon'ble Supreme Court reported in (2010) 9 SCC 496, Kranti Associations https://www.mhc.tn.gov.in/judis 70 Private Limited and Another Vs. Masood Ahmed Khan and Ors., wherein it had been held as follows:
“47. Summarising the above discussion, this Court holds:
(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.
(b) A quasi-judicial authority must record reasons in support of its conclusions.
(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi- judicial or even administrative power.
(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.
(f) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.
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(g) Reasons facilitate the process of judicial review by superior courts.
(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.
(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
(j) Insistence on reason is a requirement for both judicial accountability and transparency.
(k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or “rubber-stamp reasons” is not to be equated with a valid decision-making process.
(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency https://www.mhc.tn.gov.in/judis 72 in decision-making not only makes the judges and decision- makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor [(1987) 100 Harvard Law Review 731-37] .)
(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)] , wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions”.
(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “due process”.”
95.The learned Counsel then relied on a judgment of the Hon'ble Supreme Court reported in 2022 SCC OnLine SC 871, Swami Samarth Sugars and Agro Industries Ltd., Vs. Loknete Marutrao Ghule Patil https://www.mhc.tn.gov.in/judis 73 Dnyaneshwar Sahakari Sakhar Karkhana Ltd. and Others, wherein it had been held as follows:
“47. We may further state that under the Chair of Dr. C. Rangarajan, the then Chairman, Economic Advisory Council to the Prime Minister, in its report dated 05.10.2012 has reported under the heading Executive Summary as under:
“2. The highly perishable nature of sugarcane, the small land holdings of sugarcane farmers and the need to keep the price of sugar at a reasonably affordable level while also making it available through the Public Distribution System (PDS) have been the drivers for regulation. The principal aspects regulated in the sugar sector are as under:
(i) Cane reservation area and bonding — Every designated mill is obligated to purchase from cane farmers within the cane reservation area, and conversely, farmers are bound to sell to the mill. As a consequence of the area requirement (distance criterion), setting up of a new mill requires approvals, notwithstanding delicensing under the Industries Development & Regulation Act.
(ii) xxx xxx
4. The minimum distance criterion for setting up of a new mill is expected to ensure a minimum availability of cane for all mills. This can cause distortion in the market. The virtual monopoly over a https://www.mhc.tn.gov.in/judis 74 large area can give the mills power over farmers, especially where landholdings are smaller.
This restriction inhibits entry and further investment, and adversely impacts competition for purchase of sugarcane as well as for improving mill efficiency. As such, it is not in the interest of development of sugarcane farmers or the sugar sector, and may be dispensed with as and when a state does away with cane reservation area and bonding.”
48. In respect of cane reservation area and minimum distance criteria, it was stated in Chapter 2, while dealing with the “Cane Area Reservation and the Minimum Distance Criterion” as under:
“2.1 Central Government has been protecting the interests of sugarcane farmers and sugar mills through various policy instruments. Sugarcane farmers are assured of a minimum price for sugarcane, payable by mills. On the other hand, sugar mills have been assured regular supply of sugarcane by providing that a minimum distance be maintained between two mills and an area be earmarked for each mill for drawal of cane. The expectatons implicit in the extant system of cane area reservation and the criterion for distance between mills could be as under:
(i) ensuring adequate cane supply to mills and preventing unhealthy competition to procure sugarcane;
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(ii) ensuring crushing of the entire quantity of cane grown by sugarcane farmers in the reserved area, with no cane remaining uncrushed at the end of the season; and
(iii) increasing the productivity of sugarcane cultivation so as to increase the income of farmers and enhance supplies and sugar recovery for mills.
49. The Ministry of Consumer Affairs, Food and Public Distribution has referred to recommendations of Dr. C. Rangarajan Committee. The gist of the recommendations of the Committee and Implementation of Recommendations of Dr. Rangarajan Committee, is as under:
Issues Gist of Status
Recommendati
ons
Cane Area Over a period States have been
Reservation: of time, states requested to
should consider the
encourage recommendation
development of s for
such market- implementation
based long- as deemed fit. So
term far, none of the
contractual States have
arrangements, taken action,
and phase out current system
cane continues
reservation
area and
https://www.mhc.tn.gov.in/judis
76
bonding. In the
interim, the
current system
may continue.
Minimum It is not in the States have been
Distance interest of requested to
Criteria: development of consider the
sugarcane recommendation
farmers or the s for
sugar sector, implementation
and may be as deemed fit.
dispensed with There is no
as and when a reservation of
State does area in
away with Maharashtra.
cane Rest of the
reservation States have not
area and made any
bonding. changes in the
current
arrangement.
50. We also note the reasoning given by the Central Government that in order to avoid unhealthy competition, the licensing under the Industries (Development and Regulation) Act, 1951 was done away with on 31.08.1998. Unhealthy competition has two major aspects- one relating to the existing and new sugar factory, and second in the context of the farmers. On account of competition between the existing and new sugar factory, it would be the farmers who will be the beneficiary as they would have an option to select the sugar mill https://www.mhc.tn.gov.in/judis 77 which provides better service in the manner of payment of price. Keeping in view the recommendations of the Rangarajan Committee and the fact that the Central Government has exercised its jurisdiction to grant extension in time, the ultimate beneficiary would be the farmer and not the existing or the new sugar factory.”
96.The learned Counsel placed special emphasis on the recommendation that distance to a factory should not be a compelling reason to re-allocate the reserved area from one factory to another factory.
97.The learned counsel pointed out that EIDPIL in their writ petition had furnished a comparative table relating to the efficiency in work by EIDPIL in contrast to that of MRK. It was pointed that cultivable land area had multiplied with the inputs given by the officials of EIDPIL. Further, the quality of cane which had been grown also improved and directly contributed to the increase in the revenue of the cane growers. It was also specifically pointed out by the learned counsel that the concept of distance should not be a factor as also pointed out in the Rangarajan Committee report, a portion of which had been extracted supra. The learned counsel stated that it is a fact that there were breakdowns of machinery in the MRK https://www.mhc.tn.gov.in/judis 78 and as a matter of fact, it had also been admitted that between 07.01.2023 and 09.01.2023, MRK, consequent to the breakdown of machinery in their factory had been forced to divert the sugarcane, which had been sent to them for crushing to two other factories, which were nearly 60 to 80 kms away from MRK. It was therefore pointed out that an illusory picture had been painted by the 2nd respondent that MRK would not default in the payment of amounts to the cane growers. The learned counsel stated that it was only on the basis of a projected image that the lands had been reallocated to MRK overlooking the reality of the efficient functioning of the EIDPIL. The learned counsel stated that the writ petition filed by EIDPIL should be allowed and the impugned order should be struck down.
98.Mr.R.Shunmugasundaram, learned Advocate General, was thrust with the onerous task of justifying the order of the 2nd respondent / Commissioner of Sugar.
99.The learned Advocate General first questioned the bonafide of the petitioners in W.P.No.1084 of 2023. He pointed out that the Cane https://www.mhc.tn.gov.in/judis 79 Commissioner had earlier passed an order which had been set aside by order in W.P.No.7692 of 2022. The issue was remanded back to the Cane Commissioner. About 67 petitioners had filed that writ petition. In the present writ petition, however, 25 cane growers alone had filed the writ petition. Out of the 25 cane growers, 10 cane growers had agreements with MRK and 3 of them actually supplied cane to MRK. The learned Advocate General pointing out that fact, wondered why they had chosen to file the writ petition. It was further asserted that the writ petitions had been filed with ulterior motives. The learned Advocate General also pointed out that EIDPIL had not originally filed any writ petition and it was only after this Court had expressed wonder over that fact did they come forward to file a writ petition.
100.The learned Advocate General then pointed out Section 3 of the Essential Commodities Act, 1955. The Sugar (Control) Order, 1966 had been passed under the authority and power given under that provision. He contrasted the judgments relied on by the learned Senior Counsel behalf of the petitioners and stated that unlike Tamil Nadu, most other States had their https://www.mhc.tn.gov.in/judis 80 own State enactments and therefore, the judgments cited would not have direct application to the issue now under consideration, since in this State, the provisions of the Sugar (Control) Order 1966 alone prevail. The learned Advocate General stated that the judgments cited could be on the points raised, but may not be directly binding on this Court. It was emphasised that each case should be examined on the facts of that case and there cannot be an universal application of the ratio laid in those judgments.
101.The learned Advocate General then pointed out that any order passed under Section 3 of the Essential Commodities Act, 1955, if not complied with, would invite prosecution and penalty under Section 7 of the said Act. It was therefore stated that the order of the Cane Commissioner is binding, and those who violate the same and even those who probably encourage such violation would invite prosecution and penalty. The learned Advocate General also pointed out that the punishment clause is quite stringent and stated that any offence which invites a sentence for one year would be cognizable. This was contrasted with sentencing for an offence under the Indian Penal Code, wherein, offences which invite punishment of three years alone are normally cognizable.
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102.The learned Advocate General also pointed out that the Government of India by a notification dated 04.06.1977, in exercise of Clause 11 of the Sugar (Control) Order 1966 had directed that the powers conferred under Clauses 6, 7, 8 and 9 shall also be exercisable by the Cane Commissioner (Director of Sugar) Tamil Nadu. It was thus pointed out that the Cane Commissioner acts under direct control and authority of the Central Government. The State Government has no say in either determining the price to be fixed or the reserved area to be allocated to each sugar factory.
103.The learned Advocate General also pointed out that by a notification dated 17.08.2022, the Ministry of Consumer Affairs Food and Public Distribution had determined the Fair and Remunerative price of sugarcane payable by sugar factories for the sugar season 2022 – 2023. It was thus pointed out that both MRK and EIDPIL would be making the same payment to the cane growers.
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104.The learned Advocate General further pointed out that the support of the Government is vital as it will ensure that the Co-operative Sugar Mills do not, under any circumstance, fail in its commitment to pay the cane growers. On the other hand, every Private Limited Company run the risk of proceedings being initiated leading to liquidation of the company itself. In this connection, the learned Advocate General pointed out the downfall of SASL.
105.With respect to the allegations of breakdown of machineries, the learned Advocate General pointed out that machineries suffer damages owing to various causes and the company as a whole cannot therefore be blacklisted for that particular reason. He pointed out that during crushing seasons when there is maximum utilization of machineries and when there is also human interplay in the work of such machineries, some breakdown is bound. However, correctional measures were immediately taken by MRK and the sugarcane which had arrived for crushing on 07.01.2023 had been diverted to other sugar factories by passing appropriate orders and therefore, the cane growers were not put to much loss. The learned Advocate General https://www.mhc.tn.gov.in/judis 83 also pointed out MRK had undertaken overhauling of the entire machinery and an outlay of 7 Crores had been budgeted for that purpose. He also pointed out that Co-generation and Ethanol manufacturing plants were in the pipeline for commencement and stated if they are so done, then, the MRK would earn sufficiently to ensure that the cane growers actually get more benefit, than if they supplied their sugarcane to EIDPIL.
106.The learned Advocate General insisted out that distance between the lands and the factory is a crucial factor to be taken into consideration. In this connection, the map of Cuddalore District was also produced for ready reference and it was pointed out that MRK factory at Sethiathope was situated just about 15 to 20 kms from the lands of Kammapuram firka while EIDPIL was situated at a far distance. This aspect had therefore played on the mind of the 2nd respondent. The learned Advocate General pointed out that the order impugned will work itself out and stated that time must be given to MRK to justify their credentials and criticised the petitioners for rushing to the Court immediately. The learned Advocate General also pointed out the threat of acquisition of lands by NLC to an extent of 6500 https://www.mhc.tn.gov.in/judis 84 acres of lands is real. These lands fall under the reserved area of MRK and was a crucial factor justifying the allocation of lands in Kammapuram firka to MRK.
107.The learned Advocate General also pointed out the reasons given namely, that EIDPIL is doing more than 100% of the crushing capacity while MRK is doing only 40% to 50% of the capacity and stated that this was also a vital factor in allocating lands to MRK so that investments would be justified and the crushing capacity would be increased. It was thus pointed out that only justifiable factors had been taken into consideration by the 2nd respondent and therefore, the learned Advocate General expressed his firm opinion that the order impugned should not be interfered with by this Court.
108.It was also pointed out that when the fair price payable to sugarcane growers was increased by the State Government, the South India Sugar Mills Association (SISMA) of which EIDPIL was a member had filed a writ petition questioning such re-fixation of the price. The learned https://www.mhc.tn.gov.in/judis 85 Advocate General pointed out that this actually shows that EIDPIL was and is not willing to abide by any State Government regulation and stated that on the one hand, they questioned the increase in price which would only generate more revenue for the cane growers while on the other hand, they proclaim that they are working only for the interest of the cane growers. It was also pointed by the learned Advocate General that this allocation of the lands was a temporary measure and it was therefore stated that it should not be altered, particularly also because the Cane Commissioner, as a statutory authority had passed the order after taking into consideration all factors.
109.The learned Advocate General then pointed out a judgment of the Hon'ble Supreme Court reported in (1976) 1 SCC 318, Indian Sugar & Refineries Ltd. Vs. Amarvathi Service Co-operative Society Ltd., to emphasise that the sugar cane growers will have to be heard only when there is price fixation. It had been held as follows:
“18. The grant of exemption from payment of price affects rights and interests of the growers of sugarcane. The control order contains elaborate machinery for fixation of additional price having regard to all relevant factors. The https://www.mhc.tn.gov.in/judis 86 additional price fixation authority afforded opportunity to both the growers of sugarcane as well as the producers of sugar to be heard in the determination of the additional price. The subsequent order by the Government granting exemption to the factories for payment of additional price takes away rights which had accrued in favour of the growers of sugarcane.
19. The manner of payment of additional price under clause 5(6) of the 1966 control order does not affect the right and interest of growers. In providing for payment of additional price, the additional price fixation authority takes into account the relevant considerations relating to the conditions of sugarcane growers as well as the promotion of the sugar industry during the relevant period. The additional price fixation authority also considers the conditions and circumstances relating to the appellant factory in determining the additional price payable. It is, therefore, necessary for the Government to invite the points of view or objections of the growers on the application made by the factories producing sugar seeking exemption from payment of additional price. It is equally necessary for the Government to hear the growers of sugarcane in order to satisfy itself as to the bona fides and accuracy of the appellant's claim for exemption. The growers should be given https://www.mhc.tn.gov.in/judis 87 an opportunity to show whether the claim by the appellant for exemption from payment of additional price should or should not be granted.”
110.The learned Advocate General then relied on a judgment of the Hon'ble Supreme Court reported in (1981) 2 SCC 600, M/s.Laxmi Khandsari and Ors. Vs. State of U.P. and Ors., wherein challenges were made to an order under Clause 8 of the Sugar (Control) Order, 1966, which related to the power to issue directions to producers of Khandsari sugar. It was complained that principles of natural justice were violated. It was held as follows :
“3. It is not disputed that sugar was being produced in the State of U.P. by the sugar mills through hydraulic process and by the power crushers through what is known as the “open pan process”. Both the mills as also the crushers drew their raw material, namely, sugarcane, from the sugarcane- growers. In order to facilitate production by the sugar mills most of whom were controlled by the State, a reserved area of the fields growing sugarcane was fixed throughout the State. The notification applied only to the reserved areas of a mill and not to any other areas. In other words, any area which https://www.mhc.tn.gov.in/judis 88 fell outside the reserved area was not affected by the notification and the power crushers situated in that area could still manufacture khandsari by the open pan process. Thus, it would be seen that the ban imposed by the notification was confined only to a particular area in the State of U.P. “29. On a parity of reasoning, therefore, a restriction (on the right of a trader dealing in essential commodities) like the ban in the instant case or fixation of prices aimed at bringing about distribution of essential commodities keeping the consumers interests as the prime consideration, cannot be regarded as unreasonable.
32. This is exactly what the petitioners have done in this case by rushing to this Court the moment the notification was issued and thus depriving the State as also themselves of the actual consequences of the issuing of the notification and the prejudice which it really may have caused. They did not at all show any patience in waiting for a while to find out if the experiment functioned successfully and in the long run paid good dividends. As the petitioners obtained stay orders from this Court on filing these petitions, the experiment died a natural death and the notification remained ineffective.
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49. For the above reasons the first contention put forward by the petitioners that the restrictions imposed by the impugned notification are unreasonable is hereby overruled and it is held that such restrictions clearly contain the quality of reasonableness and when tested on the touchstone of the principles laid down by the various authorities referred to above, they fully satisfy all the requirements of a reasonable restriction.
51. As regards the first limb of the argument it may be necessary to state that the Control Order itself has been passed under the authority of Section 3 of the Act of 1955 which has been held by this Court to be constitutionally valid and is not in any way discriminatory so as to attract Article 14. The Control Order itself having been passed under Section 3 contains sufficient guidelines, checks and balances to prevent any misuse or abuse of the power conferred on the authorities concerned under clause 8....
69. If hearing was to be given to so many owners of power crushers, it would have completely defeated and frustrated the very object not only of the notification but also of the Act of 1955 and created complications which may have resulted in a further deterioration of an already serious situation. If the https://www.mhc.tn.gov.in/judis 90 rules of natural justice were not applied in such an emergent case, the petitioners cannot be heard to complain. After all the notification directed stoppage of operation of the petitioners' crushers only for a very short period and they would have had an opportunity of recouping their loss after they were allowed to function because the proportion of consumption of khandsari sugar was limited as indicated above. The petitioners were, therefore, not seriously prejudiced and have rushed to this Court rather prematurely.
71. The last-mentioned case is an authority for the proposition that an order like the impugned notification is a legislative measure. That being the position, the rules of natural justice stand completely excluded and no question of hearing arises. Mr Garg, however, submitted that in that case the petitioner did not urge that the price fixation required a quasi-judicial procedure. Even so, the court clearly decided that a measure like the one we have in the instant case is purely of a legislative character and there is no question of complying with the rules of natural justice in such cases.”
111.The learned Advocate General then relied on a judgment of the Hon'ble Supreme Court reported in (2004) 5 SCC 430, U.P.Co-operative https://www.mhc.tn.gov.in/judis 91 Cane Unions Federations Vs. West U.P.Sugar Mills Association and Ors. It had been held as follows:
“10. Before adverting to the contentions raised at the Bar it is necessary to keep in mind that sugarcane is the main raw material for manufacture of sugar as it is the sugarcane juice which is ultimately converted into crystals which become a marketable commodity. Sugarcane, unlike coal or ore of minerals is not available under the surface of the earth which may be extracted and stored and may be used as and when required. It is a product of agriculture which has to be grown in fields like any other agricultural crop and requires inputs and hard labour for its production and it dries within a short time of its harvesting and becomes virtually useless. The sugar factories do not have an unlimited capacity to crush sugarcane but have a fixed capacity and, therefore, they require fresh sugarcane in a limited quantity everyday during the entire crushing season. Sugar factories in the State of U.P. generally commence crushing in the month of November and continue up to the end of April or sometimes middle of May i.e. for about six months. In order to ensure proper and continuous supply of sugarcane to sugar factory throughout the crushing season, the harvesting of crop has to be done in https://www.mhc.tn.gov.in/judis 92 limited quantity (according to crushing capacity and requirement of the sugar factory) everyday and not in one stretch. In view of this peculiar requirement of sugar factory the position of sugarcane-growers becomes entirely different from those who grow other crops like wheat or paddy which can be harvested in one go and can be sold later on at the convenience of the farmer at the opportune time. In order to achieve the proper balance viz. to ensure a continuous supply of adequate quantity of sugarcane to the sugar factory and proper remuneration to the cane-grower for the cane supplied by him, various enactments have been made which we will presently refer to.
18. A sugar factory normally runs in shifts for the whole day during the crushing season and it needs a continuous supply of freshly harvested sugarcane according to its daily crushing capacity which should be spread over the entire crushing season of about six months..... Any shortfall in supply of sugarcane to sugar factory will seriously affect its production resulting in huge losses. Therefore, the first and foremost requirement for the profitable running of the sugar factory is that it should get adequate quantity of sugarcane everyday throughout the crushing season and for ensuring https://www.mhc.tn.gov.in/judis 93 this, a system of reserving or assigning an area in favour of sugar factory has been evolved under Section 15 of the Act.
The reservation of an area ensures the supply of the entire sugarcane grown therein to the factory in whose favour it has been reserved. Similarly the assignment of an area ensures the supply of such quantity of sugarcane to the factory in whose favour it has been assigned as may be determined by the Cane Commissioner. Another advantage to the sugar factory is that sugarcane from its reserved or assigned area cannot be sold to any other factory in the vicinity even if it offers a higher price to a grower. This arrangement does not allow the market forces to operate and thereby completely avoids competition amongst the sugar factories which could lead to escalation in prices. It is common knowledge that every sugar factory is keen to have the maximum area reserved or assigned for it so that it may get adequate raw material. Sugarcane requires a particular type of soil and climatic condition and cannot be grown everywhere. The sugar factories are established in the sugar-producing belt in close proximity with each other and very often there are competing claims for reservation or assignment of an area in their favour...Once an area is reserved in favour of a factory, the cane-grower in the said area or the cane-growers' cooperative society operating therein gets tied to that factory and has to compulsorily enter https://www.mhc.tn.gov.in/judis 94 into an agreement in prescribed pro forma (Form B or Form C) given in the appendix to the 1954 Order. In view of clause 5 of the said Order cane grown in the reserved or assigned area cannot be purchased by anyone without the previous issue of requisition slips and identification cards to the growers by the occupier of the factory and in the case of members of the cane- growers' cooperative society by such society. Since the requisition slips are non-transferable and they are issued by the sugar factory according to its requirement of sugarcane, it thereby completely controls the purchase of sugarcane from a reserved or assigned area....
19. The provisions referred to above have been made for the benefit of the sugar factory so that it is assured of and gets a continuous supply of freshly harvested sugarcane in quantity according to its crushing capacity and for the whole duration of the crushing season. No doubt, the cane-grower also gets some advantage in the sense that purchase of his yield is assured but at the same time many limitations and restrictions are imposed upon him. In view of the aforesaid statutory provisions, the position of a cane-grower becomes entirely different from that of a farmer producing any other kind of agricultural crop where there are absolutely no restrictions upon him. He is at absolute liberty to harvest his crop at his https://www.mhc.tn.gov.in/judis 95 convenience without being dictated by a third party, to sell it to anyone whomsoever he likes and whenever he wants. It is in this scenario, which is not the creation of the cane-grower but of the statutory provisions operating in the field, that we have to examine the question whether the State has any authority or power to fix the price of the sugarcane supplied to a producer of sugar (sugar factory).
33. As discussed earlier, the reservation or assignment of area is made for the benefit of a sugar factory. The agreements executed by the cane-growers or cane-growers' cooperative society in favour of occupier of a factory are also for the benefit of the sugar factory as by such agreements it gets an assurance of a continuous supply of freshly harvested sugarcane on the days indicated in the requisition slips issued by it so that there may not be any problem in getting optimum quantity of raw material throughout the crushing season. In absence of the agreements the sugar factory will also be a loser as it may face great problem in getting the supply of sugarcane according to its requirement. The occupiers of the factory are themselves keen on execution of the agreements but their only objection is to the mention of State-advised price. The agreement is one composite transaction and it is not open to them to contend that the terms thereof which are to their https://www.mhc.tn.gov.in/judis 96 advantage should be enforced but the term relating to price notified by the State Government should not be enforced as their consent in that regard was not a voluntary act. In our opinion, having regard to the advantages derived by the sugar factories, they are fully bound by the agreement wherein the State-advised price may be mentioned and it is not open to them to assail the clause relating to price of the sugarcane on the ground that their consent was not voluntary or was obtained under some kind of duress.”
112.Pointing out the ratio laid down therein, wherein, it had been held that once the reserved area had been determined by the 2nd respondent, the cane growers had no option to seek reallocation, the learned Advocate General, again expressed his firm opinion that the petitioners in W.P.No.1084 of 2023 had been misled into filing this writ petition. He asserted that they have to obey the order of the Cane Commissioner, as otherwise prosecution would be initiated under Section 7 of the Essential Commodities Act, 1955. As stated, any offence punishable even with one year sentence is cognizable in nature. The learned Advocate General therefore justified the order passed and insisted that the writ petitions https://www.mhc.tn.gov.in/judis 97 lacked bonafide, and that the same should be dismissed.
113.Mr.S.Silambanan, learned Additional Advocate General, in his arguments on behalf of MRK, questioned the locus standi of EIDPIL to maintain the writ petition. He pointed out that there has been no violation of any order or rule or statutory provision in the passing of the impugned order. He further pointed out that there was no legitimate expectation or estoppel and EIDPIL cannot compel that a reserved area must be allotted only for EIDPIL. He pointed out that it was only a temporary allegation. He pointed out that on the earlier occasion when lands were allotted to EIDPIL questions were not raised about violation of principles of natural justice but when the lands were re-allocated to MRK, EIDPIL had filed the writ petition with ulterior motive. He stated that there was a vested interest behind the filing of the writ petitions. He also pointed out that the price fixed by the State Government was challenged by SISMA, wherein EIDPIL was a member. He further pointed out the advantages of a Cooperative Society where members will get their profits and they would get it as dividend. The support of the Government is very vital and it would ensure https://www.mhc.tn.gov.in/judis 98 that MRK never fails or falls, whereas, any Private Limited Company could always encounter that danger of its functioning being obstructed owing to various causes.
114.The learned Additional Advocate General further pointed out that MRK would only improve owing to the Co-generation plant which was on the way and the Ethanol plant which is also to be commissioned. He also pointed out that strict implementation will have to be insisted on any order of the Cane Commissioner, since if it is not done, then within one village, one cane grower may decide to send his sugarcanes to one factory and another may decide to send his sugarcanes to another factory. This anamalous situation would only ultimately bring frictions and could cause violations leading to breaking the law. Therefore, a regularized society is required and the learned Additional Advocate General emphasised that this arrangement is only to maintain order and it would only be appropriate that all the cane growers send their sugarcane to one factory. It was therefore insisted that the order under question should not be interfered with by this Court.
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115.Mr.Vijay Narayan, learned Senior Counsel, in his reply arguments very strongly refuted the suggestions of proxy litigation or lack of bonafide in filing the writ petitions. He again stated that the order had been passed on the basis that NCLT proceedings were pending, while actually final orders had been passed. He also pointed out the additional affidavits filed by the cane growers, who stated that they had been compelled to sell their canes to MRK. With respect to the proposed acquisition of lands by NLC, the learned Senior Counsel stated that specific details had not been given and therefore that cannot and should not have been a factor weighing in the mind of the Cane Commissioner. The learned Senior Counsel reiterated that the impugned order should be set aside.
116.Mr.Rahul Balaji, learned counsel on behalf of EIDPIL, in his reply arguments also took pain to emphasise that the litigations were certainly not proxy litigations. They were challenges to the impugned order by cane growers and a Private Limited Company. He also pointed out that in the counter affidavits, further reasons had been given, which have not been https://www.mhc.tn.gov.in/judis 100 stated in the impugned order. The learned counsel therefore stated that the additional reasons stated in the counter affidavit should be rejected by this Court and was insistent that the impugned order should be set aside. Discussion:-
117.I have given careful consideration to the arguments advanced and perused the records.
118.W.P.No.1084 of 2023 had been filed by 25 cane growers of Kammapuram firka in Cuddalore District. Kammapuram firka consists of 18 villages, namely, Dharmanallur, U.Adhanur, Villakkapadi, Sathapadi, Ottimedu, Perundurai, Siruvarappur, Peruvarappur, Periyakottimulai, Chinnakottimulai, K.Puthur, Kammapuram, Kummangalam, Gopalapuram, Ko.Mavidanthal, Su.Keeranur and Ko.Ponneri.
119.W.P.No.1536 of 2023 had been filed by the East India Distilleries Parry (India) Limited, (EIDPIL), a company incorporated under the provisions of the Companies Act, 1956. It is one of the companies under the https://www.mhc.tn.gov.in/judis 101 Murugappa Group, an industrial conglomerate.
120.The petitioners in both the writ petitions have filed the writ petitions seeking Certiorari to call for the records relating to an order in RC.No.4388/Cane-2/2022 dated 28.10.2022 passed by the 2nd respondent / Cane Commissioner, Chennai and to quash the same. By the said order, the Cane Commissioner had temporarily allocated the lands in Kammapuram Firka to MRK Co-operative Sugar Mills (MRK) at Sethiathope, Cuddalore District / 4th respondent in W.P.No.1084 of 2023 and 3rd respondent in W.P.No.1536 of 2023.
121.The petitioners in both the writ petitions claim serious prejudice by the said order. Originally, the Cane Commissioner had passed a similar order on 07.06.2019 allotting the lands in Kammapuram firka to MRK. That order was questioned by 67 cane growers including the 25 petitioners in W.P.No.1084 of 2023, by filing W.P.No.7692 of 2022, which writ was filed again in the nature of Certiorari seeking interference with the said order.
122.A learned Single Judge of this Court by an order dated https://www.mhc.tn.gov.in/judis 102 11.08.2022 opined that the said order dated 07.06.2019 had been passed without following the principles of natural justice and therefore, set aside the said order and directed the Cane Commissioner to give due opportunity to all stake holders and to then re-consider the entire facts and then pass an order, afresh.
123.The Cane Commissioner then invited both the petitioners for a hearing and then passed the order now impugned in the writ petitions, once again reiterating the earlier stand to allocate of the lands in Kammapuram firka to MRK.
124.The intrinsic relationship between sugarcane growers and the sugarcane factory to which the harvested sugarcane are supplied for crushing will have to be explained in a little more detail. The entire relationship is regulated by the Sugar (Control) Order, 1966. That order had been passed by the Central Government taking recourse to Section 3 of the Essential Commodities Act, 1955, which relates to powers vested to control production, supply and distribution of an essential commodity. https://www.mhc.tn.gov.in/judis 103
125.Sugar is an essential commodity. The order allocating the lands, where sugarcanes are grown to a particular sugar mill is passed by the Cane Commissioner taking recourse to Clause 6(1(a) of the Sugar (Control) Order, 1966. It must also kept in mind that if any order is passed in accordance with the above provision, which provision had been invoked only owing to the powers vested under Section 3 of the Essential Commodities Act, 1955, then any violation committed in defiance of the said order would invite punishment and penalty as provided under Section 7 of the Essential Commodities Act, 1955.
126.The Cane Commissioner derives his authority to pass an order under Clause 6(1)(a) of the Sugar (Control) Order, 1966 by virtue of a notification dated 04.06.1977 issued by the Ministry of Agriculture and Irrigation, Department of Food, Government of India. The said notification is extracted in entirety. It is as follows:
“The Gazette of India Extraordinary part-II Section-3 Sub-section (i) https://www.mhc.tn.gov.in/judis 104 Published by Authority No.182 New Delhi, Saturday, June 4, 1977 JYAISHA 14, 1899 Separate paging is given to this part in order that it may be filed as separate compilation.
Ministry of Agriculture and Irrigation (Department of Food) Notification, New Delhi, the 4th June 1977 G.S.R.267(E)/Ess.Com/Sugarcane – In exercise of the powers conferred by clause 11 of the Sugarcane (Control) Order 1966, the Central Government hereby directs that the powers conferred on it by clauses 6,7,8 and 9 said order shall be exercisable also by the Cane Commissioner (Director of Sugar) Tamil Nadu, and further directs that the following amendment shall be made in the notification of the Government of the India in the late Ministry of Food, Agriculture, Community Development and Co-operation (Department of Food) No.G.S.R.1127 Ess. Com/Sugarcane dated the 16th July 1966 namely;
In the said notification, after the words “The Director of Industries and Civil Supplies, Rajasthan, Jaipur “the words” the Cane Commissioner (Directorate of Sugar) Tamil Nadu shall be inserted.
https://www.mhc.tn.gov.in/judis 105 (No.4-9/74 SPY) R.K.Shastri, Joint Secretary //True copy / (Sd) xxxx for Commissioner of Sugar.”
127.It is thus seen that the Cane Commissioner is an authority created by statute. He has been delegated to exercise the power conferred under Clause 6 of the Sugar (Control) Order, 1966, which Control Order had been passed under the power granted in Section 3 of the Essential Commodities Act, 1955. The Sugarcane Control Order, 1966 is the Order in force in the State of Tamil Nadu.
128. Clause 6 of the Sugar (Control) Order, 1966, relates to the power of the Central Government, in this case, the Cane Commissioner, in view of the delegation of power under Clause 11 as stated above, to regulate distribution and movement of sugarcane.
129.Clause 6 (1)(a) is as follows:
https://www.mhc.tn.gov.in/judis 106 “6.Power to regulate distribution and movement of sugarcane.-
(1) The Central Government may, by order notified in the Official Gazette.-
(a)reserve any area where sugarcane is grown (hereinafter in this clause referred to as 'reserved area') for a factory having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it;” Emphasis supplied
130.It is seen that this regulation has as its focus, a factory. The considerations for determining the reserved area are (i) crushing capacity of the factory, (ii) availability of sugarcane, and (iii) need for production of sugar. The object is to enable the factory to purchase the quantity of sugar required by it (the factory) to attain crushing capacity to produce sugar.
131.By the order impugned the lands in Kammapuram firka which had been originally allotted to EIDPIL had been re-allocated to MRK. Complaining that this reallocation of lands caused much prejudice to their interests, both the writ petitions had been filed for the very same relief, by https://www.mhc.tn.gov.in/judis 107 the cane growers and by EIDPIL. They complain that the order impugned had been passed in a mechanical manner without taking into consideration the submissions made by them and have also charged the Cane Commissioner with oblique motives.
132.Even before proceeding further, it would be worthwhile to examine Clause 11 of the Sugar (Control) Order, 1966. It is as follows:-
“11.Delegation of powers:- The Central Government may, by notification in the Official Gazette, direct that all or any of the powers conferred upon it by this Order shall, subject to such restrictions, exceptions and conditions, if any, as may be specified in the direction, be exercisable also by.-
(a)any officer or authority of the Central Government;
(b)a State Government or any officer or authority of a State Government.
Where all or any of the powers conferred upon the Central Government by this Order have been delegated in pursuance of sub-clause (1)(b) to any officer or any authority of a State Government, every order or direction issued by such officer or authority in exercise of that power may be amended, varied or rescinded by the State Government to whom the officer or authority is subordinate either suo motu, https://www.mhc.tn.gov.in/judis 108 or on application made within a period of thirty days from the date of the order or direction:
Provided that no order revoking a licence or a permit issued to a person shall be made without giving such person an opportunity to make representation.” Emphasis Supplied
133.This clause is significant. It not only gives the Central Government the right to delegate its powers to the State Government or to an authority of the State Government, it also provides that, every order or direction issued by such officer or authority in exercise of that power, may be amended, varied or rescinded by the State Government under whom the said officer is subordinate. This power to amend, vary or rescind the order can be passed suo motu or an application within a period of 30 days from the date of the order.
134.I must state that neither the learned Senior Counsel on behalf of the petitioners nor the learned Advocate General on behalf of the 1st and 2nd respondents laid stress on the aforementioned provision. The State Government had not thought it necessary to interfere with the impugned https://www.mhc.tn.gov.in/judis 109 order. The petitioners have also not filed any application. It is thus seen that to a narrow extent the writ petition had an alternative remedy. During the course of arguments which spanned nearly for two days and more this provision was not pointed out by either the learned Senior Counsel on behalf of the petitioner or the learned Advocate General on behalf of the official respondents. It has not been clarified why such steps have not been taken by the petitioners, since they have reservations against the order.
135.Be that as it may, the nature of relationship between the two petitioners will have to be examined. The petitioners in W.P.No.1084 of 2023 are sugarcane growers. Under the Sugar (Control) Order, 1966, a reserved area means any area where sugarcane is grown and reserved for a factory under Sub-Clause 1(a) of Clause 6 of the Sugar (Control) Order, 1966. The Central Government or in this case, the Cane Commissioner, consequent to orders of delegation of power as the authority to regulate distribution and movement of sugarcane has the authority to pass an order to “reserve any area where sugarcane is grown (hereinafter in this clause referred to as 'reserved area') for a factory having regard to the crushing https://www.mhc.tn.gov.in/judis 110 capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it.”
136.It is thus seen that under Sugar (Control) Order, 1966, in any area where sugarcane is grown, which is categorised as reserved area, every sugarcane grown in that reserved area has to be forwarded to the named or designated sugarcane factory for crushing and extraction of sap/juice. The relationship becomes a little more significant as the lands of the petitioners in W.P.No.1084 of 2023 which had been originally declared as reserved for crushing purpose to EIDPIL had been re-allotted to MRK. Thus, an existing relationship of cane grower - factory (EIDPIL) receiving the harvested sugarcane for crushing purposes stood frustrated.
137.It is to be noted that every sugarcane factory has a crushing capacity. To ensure that the crushing capacity is utilized to its optimum level, the Cane Commissioner reserves an area where sugarcanes are grown to that particular sugar factory. The sugar factory in their turn play an active https://www.mhc.tn.gov.in/judis 111 part in preparing the soil for the planting of seeds, providing seeds, ensuring that the plants are properly nurtured, further providing fertilizers and all other manures for growth of the plants, and finally taking back the sugarcane for crushing purpose. The expenses involved in all these operations are borne upfront by the sugar factory. Till the time the sugarcanes are crushed and the extracted sap/juice are valued in money terms, the sugarcane growers are debtors of the factory (EIDPIL). They will continue to remain in debt, if the harvested sugarcanes are directed to be distributed to another sugar cane factory (MRK). The sugarcane growers are now in the clutches of EIDPIL.
138.By the impugned order, their relationship has soured to a money lender – borrower status. It is to extricate themselves from this distressing situation have the sugarcane growers filed the first writ petition. EIDPIL had all the cards in their hands. Having lent money, euphemistically and sophisticatedly called investment, they found that their trump card of getting back the money by crushing the harvested sugarcanes and valuing the sap/juice extracted, snatched by the impugned order. The privilege of https://www.mhc.tn.gov.in/judis 112 crushing the harvested sugarcane was handed to MRK. A reading between the lines make it clear, though not stated by the petitioners, that this frustration of the relationship at the crucial time when returns on the moneys lent/investments made were to come, is the actual reason for the frantic efforts made calling upon the Court to set aside the impugned order.
139.As a matter of fact, it is on record that educational loans and personal loans were also arranged by EIDPIL to the cane growers. Thus, the writ petitioners in both the writ petitions are intrinsically locked with each other. When there is reallocation of land, as in this case, to MRK, there is complete severance of such relationship. The sugarcane growers are, to put it mildly, now caught in a debt trap in a net spread by EIDPIL.
140.The cycle of amounts advanced by EIDPIL being adjusted with sugarcane crushed by them was broken by the passing of the impugned order. This has left EIDPIL as a creditor to the sugarcane growers, who now suddenly find themselves reduced from cane growers to debtors. https://www.mhc.tn.gov.in/judis 113
141.MRK is a Co-operative Society. Let me fall back on the object of a Co-operative Society. The Tamil Nadu Co-operative Societies Act, 1983, had been passed to ensure promotion of voluntary formation, autonomous function, democratic control and professional management of co-operative societies.
142.In a thesis called “the Role of Cooperative Societies in the Economic Development of India” by A.M.Rananavare and submitted to the UTAH State University, Utah in 1964, the concept of a co-operative society had been summed up as follows:
1).They aim to provide goods and services.
2).They aim to eliminate the unnecessary profits of middlemen in trade and commerce.
3).They seek to prevent the exploitation of the weaker members of society.
4).They aim to protect the rights of people both as producers and consumers.
5).They promote mutual understanding and education among their members and people in general.
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143.The basis, namely, the Rochdale Principles relating to co- operative societies are as follows:
“1).Open membership without restriction to race, religion, sex, or political or other affiliations.
2).Democratic control, with one vote per member irrespective of the amount invested.
3).Limited return on the share capital, the value of the share never to rise above par.
4).Savings made from the business to be distributed periodically on the basis of the member's patronage.
5).Neutrality on the part of the association in political, religious, and other related matters.
6).Business carried on by cash basis.
7).Goods and products handled at current market prices.
8).Education for continuous expansion.”
144.MRK is a Co-operative Society. EIDPIL is a Private Limited Company. A co-operative society will have to be contrasted from a Private Limited Company. There is no doubt that a Private Limited Company like EIDPIL as part of a large conglomerate would be in a position to readily pay https://www.mhc.tn.gov.in/judis 115 the cane growers upfront and provide them with all facilities. However, such provision of facilities and payments do not come free. They are adjusted with the value of the sap/juice extracted from the sugarcanes when actually crushed in the factory.
145.In the instant case, the lands in Kammapuram firka were originally allotted to a Private Limited Company, Shree Ambika Sugar Mills Limited, (SASL). The said company had sank into liquidation. A co- operative society may be down, but they are never out. This is so because, the Government infuses funds to ensure that the co-operative movement is kept alive.
146.A perusal of the documents filed along with the writ petitions reveal that temporary allotment and re-allotment of cane area to nearby Co- operative / Private / Public Sector Sugar Mills has been a continuous ongoing issue.
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147.By an order dated 07.06.2019 in RC.No.261/Cane2/2019, the Cane Commissioner had allotted the command areas of SASL and Thiru Arooran Group of Sugar Mills at Cuddalore to nearby Sugar Mills. By the said order, Kammapuram Firka had been allotted to EIDPIL. It was just one of nearly 15 other land areas so allotted to EIDPIL. Thereafter, that order was re-examined.
148.Subsequently, an order in R.C.No.261/Cane2/2019 dated 05.07.2019 was issued by the Commissioner of Sugar and one of the firkas allotted to EIDPIL namely, Vridhachalam South was re-allotted to Kothari Sugars and U-Mangalam which was allotted to Kothari Sugars was re- allotted to EIDPIL.
149.This order was re-examined in R.C.No.261/Cane2/2019 dated 18.12.2020 and U-Mangalam firka was temporarily declared as common area to MRK, Perambalur Sugar Mills, EIDPIL, Bannari Amman Sugars Ltd., Dhanalakshmi Srinivasan Sugars and Kothari Sugars or to any other nearby mills of Tamil Nadu of farmers’ choice as free will. https://www.mhc.tn.gov.in/judis 117
150.These orders show that allotment and re-allotment on temporary basis of reserved areas were frequently done owing to various factors, particularly representations given by the sugar factories and also from individual cane growers. The focus primarily was on the sugar factories and it was always ensured that regard was given to the crushing capacity of the factory, availability of sugarcane in the reserved area and the need for production of sugar to enable the factory to purchase the quantity of sugarcane required by it. These factors are evident from a reading of the orders. Every order under Clause 6(1)(a) of the Sugar (Control) Order 1966, have always been passed only on consideration of the above factors.
151. The main thrust with respect to the cane growers was to ensure that they are paid the Fair and Remunerative Price (FRP) as determined and that such payments are actually effected within specified dates.
152.It is thus seen that the relationship between the cane growers and the factories run deep. They both depend on each other for mutual survival. https://www.mhc.tn.gov.in/judis 118 Though it may seen a simple arrangement, cane growers are totally dependent on the factories to assist them in every step required for the planting, monitoring and cutting of sugarcane. The expenses involved in all these activities including preparing the soil are borne by the sugarcane factories. It is also represented that sugar factories also lend a helping hand to the farmers to obtain educational or personal loan from the nearby banks. Thus, till the sugarcanes actually reach the door steps of the factories and are crushed and sap/juice is extracted, the cane growers live in debt to the sugar factories. There is no indication that the sugarcane growers put up the monies upfront for tilling the soil, purchasing the seeds, monitoring the plants, providing manures and pesticides, if required, making arrangement for cutting the grown sugarcane and transporting the same to the sugar factories. All these activities are done only with the financial assistance of the factories. The sugarcane factories who so do, get their returns when they extract the sugarcane sap/juice and convert it into money value and adjust the same with the amounts advanced to the sugar growers. The sugarcane growers for their part are certainly contended with the factories taking over their entire lands and giving them the monies worth of the sap/juice https://www.mhc.tn.gov.in/judis 119 extracted from the sugarcanes, after adjusting the investment made by the sugarcane factories.
153.EIDPIL, very rarely known as East India Distilleries (Parry) India Limited, bring ominous thoughts about an earlier company which controlled lands under the guise of tradesmen and ultimately the administration of this country, the East India Company. EIDPIL was first established in the 18th century and they established the first distillery in this country. They had practically taken under their control the cane growers of Kammapuram firka.
154.By the impugned order, this subsisting relationship was crudely severed. EIDPIL had invested heavily on the production of sugarcane in the lands of Kammapuram firka. They would get their returns only if the sugarcanes are actually transported to their factory and they are permitted to extract the sap/juice and adjust the value of that with the investments made and pay back the reminder amount to the sugarcane growers. By this impugned order, transportation of sugarcane to their factory had been interfered with and directed to be stopped. The lorries are now diverted to https://www.mhc.tn.gov.in/judis 120 the factories premises of MRK. The fallout of this order is that the cane growers now are in debt to EIDPIL. It is that realization which has forced them to file the writ petition, hoping desperately to reverse the situation. They had to ensure that sugarcane in Kammapuram firka are continued to be supplied to EIDPIL, since the investments have to be paid back and the sugarcane growers cannot repay that amount since the sugarcanes have been directed to be transported to MRK.
155.With the above discussion as the background, the impugned order will now have to be examined.
156.During arguments, every aspect of the order had been questioned. It was understandable. There was a touch of desperation that the order should be set aside. The sugarcane growers had no alternate.
157.There was an alternate.
158.EIDPIL could very well have accepted to the order, come clean https://www.mhc.tn.gov.in/judis 121 with the investments they made and could have extended a friendly hand to MRK and could have joined with MRK in explaining their position as having been left high and dry owing to this particular order and adopted a more healthier attitude to ensure that when MRK pays the monies worth of sugarcane sap/juice extracted, EIDPIL is also put on notice and all parties could have come to an understanding to settle the dues to EIDPIL. Though the above statement appears improbable and hypothetical, still if EIDPIL had taken a more reconciliatory stand, they could have obtained their objective of getting back the investments made by them.
159.But they did not. Unfortunately they adopted a hostile stand.
160.By order dated 11.08.2022 in W.P.No 7692 of 2022, a learned Single Judge of this Court had directed that the Cane Commissioner should hear the representations of the cane growers and of EIDPIL and of MRK before taking a decision whether to reallocate the lands in Kammapuram firka from EIDPIL to MRK.
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161.The Cane Commissioner issued notices inviting for discussion the officials of EIDPIL and MRK and also the cane growers. The grievance of Mr.Vijay Narayan, learned Senior Counsel, is that the representations of the cane growers had not been properly appreciated by the 2nd respondent. The learned Senior Counsel lamented that it had been stated that the lands had been reallocated temporarily till the disposal of insolvency proceedings pending against SASL, when, in reality, SASL had been liquidated.
162.The learned Senior Counsel further stated that the reasons given namely, (i)lesser capacity utilization of MRK; (ii)reduction in cane registration by MRK; and (iii)additional land acquisition proposed by Neyveli Lignite Corporation, have been merely stated without substantiating such statements by relevant data.
163.However, the question which begs an answer is, whether those factors are relevant and whether those factors are actually genuine. https://www.mhc.tn.gov.in/judis 123
164.It is a fact that MRK was functioning with lesser capacity utilisation. Let me not compare its capacity utilisation with EIDPIL. It had been stated in the order that it was only 40 – 45% for the past five years.
165.It would be stretching the concept of judicial review a little too far, if one were to doubt those figures and impute, with no evidence, malafide on the part of the Cane Commissioner. The statistics are matters of record. It would have been extremely insensible to concoct those statistics.
166.It must also be pointed out that under Section 6(1)(a) of the Sugar (Control) Order, 1966, the crushing capacity of a factory is a factor to be considered while taking a decision to regulate distribution and movement of sugarcane. Thus that particular aspect of lesser capacity utilization of MRK is indeed a vital factor to be considered by the Cane Commissioner and I hold that, on that one issue the impugned order has to be sustained and malafide certainly cannot be attributed.
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167.As a matter of fact, statistics had been given with respect to capacity utilisation for the past 5 seasons with respect to both EIDPIL and MRK. The statistics are clear. For the season 2017 – 2018, the own cane production (LMT) for EIDPIL was 8.23 while it was 1.31 for MRK. The cane crushed (LMT) was 9.27 for EIDPIL and 1.32 for MRK. The capacity utilisation for own cane (%) was 96% for EIDPIL while it was just 30% for MRK. The capacity utilisation for cane crushing (%) was 108 for EIDPIL and 31 for MRK.
168.The statistics for the seasons 2018 – 19, 2019 – 20, 2020 – 21 and 2021 – 22 have also been given. They all reflect that MRK requires further sugar cane to attain crushing capacity. The impugned order was in conformity with the factors to be taken into consideration as stated in Clause 6(1)(a) of the Sugar (Control) Order, 1966 and has to be sustained on that ground also.
169.The further reason stated was that additional lands are proposed to be acquired by Neyveli Lignite Corporation of India Limited. This reason https://www.mhc.tn.gov.in/judis 125 is disputed by both the learned Senior Counsel for the petitioner in W.P.No.1084 of 2023 and by the learned counsel for the petitioner in W.P.No.1536 of 2023. It had been stated that specific details had not been given. But, the issue actually is should the Court doubt that statement. It is a fact stated. It is a fact reiterated and asserted. Acquisition of land runs through its own time zone. Planning for that eventuality is indeed a prudent administrative decision taken without waiting for the axe to fall. The Cane Commissioner had stated in clear terms that acquisition of lands under the command areas of MRK by Neyveli Lignite Corporation are very much in the offing and therefore lands must be allotted to MRK to offset such acquisition.
170.It must be kept in mind that only temporary reallotment of the lands had been directed. I am confident that, if ever the land acquisition is not pursued further by Neyveli Lignite Corporation then, the Cane Commissioner by himself would undertake an examination to determine whether any re-allocation should be done. However, as on date since land acquisition is not just a possibility, but a distinct possibility and could be a https://www.mhc.tn.gov.in/judis 126 reality in the immediate future, I hold that it was only prudent to re-allocate the lands. I therefore not just uphold that reason for re-allocation, but would appreciate the Cane Commissioner for planning in advance when such a distinct future possibility of acquisition of lands looms in the future.
171.In the impugned order, further reasons were given namely,
(i)shorter distance of the lands to MRK while compared to EIDPIL;
(ii)commencement of co-generation and ethanol plant in MRK.
172.The first reason had been criticized, particularly, by Mr.Rahul Balaji, learned counsel for the petitioner in W.P.No.1536 of 2023. It was the assertion of the learned Counsel that shorter distance should not be a factor at all and in this connection placed reliance on the observations of the Rangarajan Committee.
173.Mr.Vijay Narayan, learned Senior Counsel, was also equally sarcastic. He stated that distance should not have been a factor to be considered, since the farmers are not going to be affected by the distance of https://www.mhc.tn.gov.in/judis 127 the factory to their land. It was EIDPIL who transported the harvested sugarcane to the factories and logistics arrangement were perfected to such an expert level that there was movement of 700 lorries everyday transporting sugarcane to EIDPIL, some 80 kms away. This perfection was contrasted with the confusion at MRK, as highlighted in newspapers about lorries waiting in queue outside the factory premise.
174.The learned Senior Counsel was emphatic that immediate transport is required, since otherwise the sugarcane would go dry, thereby directly affected the quantity of sap/juice extracted, which would further directly affect the income earned by the cane growers, as the monies worth of sap/juice extracted is adjusted with the investments made by EIDPIL and the balance amount alone is paid to the cane growers. He pointed out that if lesser sap/juice is extracted, there would be lesser amount available for adjustment and there would be lesser amount paid to the cane growers.
175.The learned Senior Counsel stated that the 2nd respondent should therefore have taken into consideration the logistic experitise of EIDPIL. https://www.mhc.tn.gov.in/judis 128
176.Mr.R.Shunmugasundaram, learned Advocate General, however insisted that distance is indeed a relevant factor. The learned Advocate General stated that it is only logical that shorter the distance the quicker would sugarcane be transported to the factories. He produced a rough map of Cuddalore District and pointed out that, the lorries which transported sugarcane to EIDPIL would have to cross MRK factory and then reach EIDPIL nearly about 50 kms away down the highway. He therefore insisted that the Cane Commissioner, with much wisdom had considered this factor namely, the short distance of MRK factory as one among primary factors to reallocate the lands to MRK. I hold that it was only prudent that the distance factor played in the mind of the Cane Commissioner and would uphold that reasoning.
177.The issue of transportation through lorry by road, will always carry the risk and probable likelihood of disruption arising at any moment. There are so many external factors to be taken into consideration right from the operational capacity of individual lorries, to the driving capacity of the drivers, and the danger of 700 lorries travelling in the highways racing against time to reach the factory of EIDPIL to unload the sugarcane. There https://www.mhc.tn.gov.in/judis 129 is always an element of risk. A shorter distance would only indicate that the sugarcane would be transported quicker to MRK. The logistic aspect of transportation can always be worked and reworked. I am confident that MRK would have experienced officials to oversee this particular aspect of seamless transportation of harvested sugarcane. By any logical conclusion any lorry, driven at normal speed would reach a factory 15 – 20 kms away, earlier in time, then a factory situated 50 – 60 kms away. There cannot be two thoughts about this aspect. By any mathematical calculation, 15 – 20 kms is certainly less than 50 – 60 kms. It is elementary, so to say. I would therefore hold that the 2nd respondent was perfectly justified in considering the distance as a vital factor and swinging the scale in favour of MRK on that ground.
178.The next reason given in the order related to the commencement of co-generation and ethanol plants by MRK. These are allied activities and the raw material is crushed sugarcane.
179.In the link, https://corporate.enelx.com/en/question-and-answers/what-are- cogeneration-systems., it had been explained that Cogeneration is a system that produces heat and electricity simultaneously in a single plant, powered by https://www.mhc.tn.gov.in/judis 130 just one primary energy source, thereby guaranteeing a better energy yield than would be possible to achieve from two separate production sources.
180.In a note (reference: https://dfpd.gov.in/sugar-sugarcane-policy.htm) by the Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, Government of India, the Ethanol Blended Petrol Programme (EBP Programme) had been stated. It had been taken up since the year 2007. Reports from the Expert Committee had been received and the price for ethanol had also been determined. It had been stated that in the ethanol season 2015 – 16, the ethanol supply had been historically high and it reached 111 Crore litres achieving 4.5% of blending. Ethanol is an agro based product mainly produced from the by product of the sugarcane industries namely, molasses. It is thus seen that this explanation by MRK is indeed a step in line with the sugar policy of the Government of India.
181.It is thus seen that MRK are moving forward and their vision for the future will have to be appreciated.
182.The cogeneration and ethanol projects have been criticized by the https://www.mhc.tn.gov.in/judis 131 petitioners by stating that they are a mirage and any decision taken relating to substantiate the impugned order should be based on facts. MRK, in their counter affidavit have stated that the co-generation plant could commence operation in April 2023 and the ethanol plant would soon follow. Every sensible planning should provide for future possibility. I would not fault the Cane Commissioner for taking this particular factor into consideration.
183.Two further factors had been stated in the impugned order namely, (i)willingness of the cane growers and (ii)protection and welfare of sugar farmers. These two factors will have to examined together.
184.The very fact that the cane growers had earlier filed W.P.No.7692 of 2022 and have now filed W.P.No.1084 of 2023 show that the cane growers in Kammapuram firka are not willing to accept the decision to allocate their lands to MRK from EIDPIL. There are 25 petitioners in the writ petition now under consideration. It is contended by the learned Advocate General that out of 25 petitioners, 10 have actually entered into agreements with MRK and out of the 10, 3 have already supplied sugarcane https://www.mhc.tn.gov.in/judis 132 to MRK. It is therefore asserted by the learned Advocate General that the writ petition had been filed with an ulterior motive and there is an unknown third party nudging the cane growers hiding behind a screen.
185.One disturbing fact is the additional affidavits filed on the last date of arguments / 27.01.2023. The 10 cane growers who had entered into agreements with MRK filed them. But each of them claimed that they are the 'third' petitioner in W.P.No.1084 of 2023. It is evident that they (i) did not read the contents of the affidavit, and (ii) signed on the dotted line. I fervently hope they were not misled into filing the the affidavits. If they had signed the affidavits without knowledge of the contents, as is obvious and evident, since each affidavit is an exact replica of the other, then it would in their own interest that they are shielded and are drawn away from that mysterious force, which had persuaded them to sign the affidavits without examining the contents. Signing such affidavits enmasse is a violation of their freedom and restraint to exercise free will. They stated that they have been forced to enter into agreements with MRK. That statement will have to be taken with a pinch of salt since three of them have actually supplied https://www.mhc.tn.gov.in/judis 133 sugarcanes to MRK.
186.One further challenge and criticism of the impugned order is the assertion of the fact that EIDPIL is flushed with abundant funds, whereas MRK is availing loans advanced by the Government.
187.EIDPIL could be flooded with funds. They profit by drowning the cane growers in debt. On the other hand, a co-operative society has its own advantages. They promote mutual understanding. There is membership without restriction. There is automatic control. There are savings from the business to be distributed periodically. There is a return on the share capital. They eliminate unnecessary profits to middleman. They prevent exploitation of weaker members of society. They aim to protect the rights of people both as producers and consumers. Aligning with the co-operative society itself has its advantages. These factors are not stated in the impugned order, but are evident from the very fact that MRK is a cooperative society.
188.The issue of willingness or unwillingness to supply cane to MRK https://www.mhc.tn.gov.in/judis 134 is an issue of the mind. It is a swinging factor. As MRK get their registration of sugarcane and the crushing is done attaining higher capacity, then profits are generated and the farmers would be benefited. It is an ongoing process. EIDPIL have ready finance at hand, but MRK certainly has depth, as a cooperative society. These factors can be examined only as ‘time goes by’. I would not fault the Cane Commissioner for having kept in mind these factors while by passing the impugned order.
189.Opportunity of hearing was granted after the earlier order was struck down. The Senior Vice President-Legal & Company Secretary of EIDPIL, spoke on behalf of EIDPIL. The Managing Director of MRK spoke on behalf of MRK. The 1st petitioner and others had also spoken. There were also statements from cane growers from Siruvarappur Village. The cane growers were also named in the impugned order. There were also three individuals who spoke about the advantages of MRK, who were also named. Throughout this order, I have not mentioned the names of the cane growers, as I would like to avoid any semblance of hostility among them either in the present or forever in future. The gist of their representations had been https://www.mhc.tn.gov.in/judis 135 recorded in the impugned order. It is a matter of appreciation of the statements made during the personal hearing. The decision making process can be the basis of a challenge to an administrative order, but the decision, unless it is extremely irrational cannot be questioned. The Court is not an appellate authority. The Court cannot substitute its views and thrust them on the Cane Commissioner.
190.It must be kept in mind that the Sugar (Control) Order, 1966 had been passed in exercise of the power conferred by Section 3 of the Essential Commodities Act, 1955. In the Control Order, a Co-operative Society had been defined as a Co-operative Society registered under the Co-operative Societies Act, 1912 or under any law relating to co-operative societies.
191.A co-operative society had been described as follows:
2(b) “Co-operative society” means a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force relating to co- operative societies;
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192.A factory had been described as follows:
2(c) “Factory” means any premises including the precincts thereof in any part of which sugar is manufactured by vacuum pan process and at its own option, ethanol either directly from sugarcane juice or from molasses, including B-Heavy molasses, or both, as the case may be, is manufactured.
193.A combined reading of both the above definitions would indicate that a co-operative society can also run a factory and in such factory sugar can be manufactured from the sugarcane juice and from the molasses, ethanol can also be manufactured. This is significant because MRK is both a co-operative society and a factory manufacturing sugar and also has a proposal to manufacture ethanol. The advantages of the co-operative society over a Private Limited Company have been stated earlier in the order.
194.It had been complained by the learned counsel for the EIDPIL that by the impugned order inefficiency of MRK had been rewarded, while efficiency of EIDPIL had been overlooked or rather punished. The learned https://www.mhc.tn.gov.in/judis 137 counsel meant that the functioning of MRK which should have been deprecated had actually been recognized and lands allotted. The argument is misconceived.
195.Clause 6 of the Sugar (Control) Order, 1966, relates to the power to regulate distribution and movement of sugarcane. Clause 6(1) (a) gives the authority to the Central Government and on delegation to the Cane Commissioner to reserve any area for a factory. The Cane Commissioner had reserved lands in Kammapuram firka to MRK. The factors to be considered to take such a decision are the crushing capacity of the factory, the availability of sugarcane and the need for production of sugarcane. These factors will have to be examined in conjunction with the power to reserve such area with a view to enable the factories to purchase the quantity of sugarcane required by it. The quantity of sugarcane, which is required by a factory would depend on its crushing capacity and availability of sugarcane. Thus the focus of the Cane Commissioner would be to examine the crushing capacity and availability of sugarcane for the purpose of producing sugar by a factory and these are examined only to enable the https://www.mhc.tn.gov.in/judis 138 factory to produce the required amount of sugarcane. Once this as a fact is established as being a policy of the Central Government, unless that policy is questioned, the petitioners in W.P.No.1084 of 2023 have no case at all.
196.Clause 6(1)(a) draws focus on a sugarcane factory and not on cane growers. The cane growers are to be consulted when the minimum price of sugarcane is fixed by the Central Government under Clause 3 of the Sugar (Control) Order, 1966. The Central Government may fix the minimum price for sugarcane to be paid by the producers of sugarcane (the factory) for the sugarcane purchased by them (from cane growers), only after consultation with (i) such authorities (ii) bodies, and (iii) associations. This would indicate that prior to fixing the minimum price there must be a wide consultation with all stake holders and this would necessarily include the cane growers. This requirement is not expressly stated in Clause 6 of the Order.
197.Be that as it may, when an order was passed on 01.12.2021 by the https://www.mhc.tn.gov.in/judis 139 Cane Commissioner, W.P.No.7692 of 2022 had been filed by 66 cane growers. A learned Judge had remanded the matter back to the Cane Commissioner and directed that the cane growers should be heard prior to passing an order under Clause 6(1)(a) of the Sugar (Control) Order, 1966. Let me not enter into a dispute over that order. However, a reading of Clause 6(1)(a) indicates that the power vested with the Cane Commissioner to reserve any area has to be exercised only keeping in mind (i) the crushing capacity of a factory, (ii) the availability of sugarcane, and (iii) the need for production of sugar. These factors are considered only to enable the factory to produce the required quantity of sugar.
198.It must be reiterated that the Sugar (Control) Order, 1966, had been passed in exercise of Section 3 of the Essential Commodities Act, 1955. When an order under Section 3 of the Essential Commodities Act, 1955 is invoked or passed, then anybody who violates any such order would invite penal action under Sections 7 of the Essential Commodities Act, 1955. The said provision is so stringent, that it makes an offence, which invites a sentence of one year to be categorized as cognizable offence. https://www.mhc.tn.gov.in/judis 140
199.A cognizable offence has been defined under Section 2(c) of the Criminal Procedure Code, 1973 as follows:
2(c).“cognizable offence” means an offence for which, and “cognizable case” means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant;
200.A plain reading would mean that if any of the cane growers were to violate the orders of the Cane Commissioner, a police officer could arrest such cane grower without any warrant.
201.I therefore hold that the petitioners in the earlier writ petition in W.P.No.7692 of 2022 and in the present writ petition in W.P.No.1084 of 2023 have been grossly and unfortunately misled into questioning the reallocation of the sugarcane area in Kammapuram firka to MRK. It was for that reason that this Court wondered in the first instance as to why they had come to Court and why not EIDPIL. This also reflected that there was an underlying necessity to prompt the cane growers to file the writ petition. https://www.mhc.tn.gov.in/judis 141 The only reason was that the monies invested by EIDPIL were held by the cane growers who were ensnarled in a web spun by EIDPIL. The cane growers were thus desperate to find some solution.
202.How far better would it have been, had only EIDPIL with all its resources extended a helping hand and had reached out to MRK, informed MRK about the investments made and assisted MRK to also increase their crushing capacity with input of scientific data and knowledge which their officials have, with a view to enable inclusive growth and cooperation and harmony among the cane growers. It would very well have been a three way arrangement. There would have been no need for hostilities to prevail. If EIDPIL had extended their skill and knowledge to MRK and ultimately if MRK were to crush sugarcane by increasing its capacity and monies are paid to the cane growers, EIDPIL with harmony as objective, could have ensured that their investments are honoured by the cane growers. At the heart of every farmer in this country is a core code of conduct and that core code of conduct also includes a promise to repay a debt and I am sure that only if EIDPIL had extended a helping hand, the entire litigation could have https://www.mhc.tn.gov.in/judis 142 been avoided and a more peaceful relationship could have been built and everybody would have come out with a win win situation.
203.In the background of the above discussion, it has to be examined, whether the policy of the Central Government as reflected in the order of the Cane Commissioner relating to distribution and movement of sugarcane is susceptible to judicial review.
204.In R.K.Garg Vs. Union of India reported in (1981) 4 SCC 675, the constitutional validity of the Special Bearer Bonds (Immunities and Exemptions) Act, 1981, was challenged on the ground that it was violative of Article 14 of the Indian Constitution. The Constitution Bench, however held that laws relating to economic policies and activities must be examined on a different scale then while examining laws relating to civil rights. It was held as follows in paragraph 8 of the said judgment.
“8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J., that the legislature should be allowed some play in the joints, because it has to deal with https://www.mhc.tn.gov.in/judis 143 complex problems which do not admit of solution through any doctri- naire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where funda- mental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Doud [354 US 457 (1957) : 1 L.Ed.2d 1485 (1957)] where Frankfurter, J., said in his inimitable style:“In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial def- erence to legislative judgment. The legislature after all has the affir- mative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering con- flict of the experts, and the number of times the judges have been overruled by events - self-limitation can be seen to be the path to ju- dicial wisdom and institutional prestige and stability.” Emphasis Supplied
205.In Balco Employees Union Vs. Union of India reported in (2002) 2 SCC 333, the policy to disinvest and transfer 51% shares of Bharat Aluminum Company Limited was questioned and challenged. It was held as follows.
“92. In a democracy it is the prerogative of each elected Gov- ernment to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Unless any illegality is committed in the execution of the policy or the same is https://www.mhc.tn.gov.in/judis 144 contrary to law or mala fide, a decision bringing about change can- not per se interfered with by the Court.
93. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the ap- propriate forum is Parliament and not the courts.”
206.Mr.Vijay Narayan, learned Senior Counsel, relied on the judgment of the Division Bench of this Court in W.A.No.401 of 1998 dated 08.06.2010, Nadippisai Pulavar K.R.Ramasamy Co-operative Sugar Mills Cane Growers Association Vs. Union of India. In that particular case, the Division Bench had examined G.O.Ms.No.468, dated 06.12.1993 and had taken into consideration a modified procedure which had been proposed by the Director of Sugar and which was accepted by the Government. The Government restored the power relating to demarcation of area between the existing sugar mills in Cooperative and Public Sector sugar mills to the Director of Sugar / Cane Commissioner. However, it was directed that the Area Delimitation Committee can continue to examine the area demarcation process in respect to new sugar mills and sugar mill in private sector. https://www.mhc.tn.gov.in/judis 145
207.With respect to the representatives in the Advisory Committee namely, the Area Delimitation Committee, it was held by the Division Bench that the cane growers are entitled to be so included in the said committee. The Cane Commissioner had failed to include the cane growers in the said committee and therefore, the order of the Cane Commissioner was set aside.
208.The facts in the instant case are different and that particular order would not apply to the facts of this case, wherein Clause 6(1)(a) of the Sugar (Control) Order 1966 was invoked by the Cane Commissioner.
209.The learned Senior Counsel then relied on ILR 2012 Karnataka 6380, Tungabhadra Sugarcane & Banana Growers Association and Ors. Vs. The Government of Karnataka and Ors. As a matter of fact, the ratio in that particular judgment is that the principles of natural justice should be followed by hearing the petitioner factory therein before any permit is granted. The focus was on the factory.
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210.In this case, the Cane Commissioner had heard the representations of both EIDPIL and MRK. Opportunity had been granted. He had also heard the cane growers. He had followed the principles of natural justice as directed by the learned Single Judge in the earlier writ petition.
211.The learned Senior Counsel then relied on the judgment of the Allahabad High Court reported in MANU/UP/0178/2010, Simbholi Sugars Ltd. Vs. State of U.P. In that judgment, the learned Single Judge had examined the assignment of an area to the factory and determining the quantity of cane to be purchased under Section 15 of the Uttar Pradesh State Enactment. It was however, stated that as a concept, the area can be demarcated. Conditions had been stated and it must be noted that the distance of the area from the factory was the first condition to be taken into consideration. I hold that the opinion stated in the said judgment had been followed by the Cane Commissioner in this case also.
212.The learned Senior Counsel then relied on the Division Bench https://www.mhc.tn.gov.in/judis 147 Judgment of the Allahabad High Court reported in MANU/UP/0001/2007, Balrampur Chini Mills Ltd. Vs. State of Uttar Pradesh and Ors. The Division Bench had examined Rule 22 of the Uttar Pradesh State Enactment and actually stated that consideration must be given to various factors and cannot be based upon one solitary consideration.
213.Even in this case, the Cane Commissioner had examined the whole gambit of considerations and thereafter had taken a conscious decision to demarcate the area from EIDPIL to MRK.
214.The learned Senior Counsel then relied on the judgment reported in MANU/SC/0008/1956 : AIR 1956 SC 676, Ch.Tika Ramji and Ors. Vs. The State of Uttar Pradesh and Ors. That judgment was given prior to the introduction of the Sugar (Control) Order, 1966, which was passed under Section 3 of the Essential Commodities Act, 1955. Any violation would attract punishment and penalty under Section 7 of the Essential Commodities Act, 1955. The cane growers are bound by the order. The facts in that case relied on by the learned Senior Counsel are distinguishable. It https://www.mhc.tn.gov.in/judis 148 primarily related to option to become or not to become a member of a canegrowers' Cooperative Society.
215.The learned Senior Counsel then relied on the judgment reported in MANU/SC/0311/1998 : 1998 4 SCC 324, Maharashtra Rajya Sahakari Sakhar Karkhana Sangh Ltd. and Ors. Vs. State of Maharashtra and Ors. That was a judgment with respect to an order under Section 6(2) of the Sugar (Control) Order 1966 and the Hon'ble Supreme Court held that such an order is invalid, if a prior order had not been passed under Clause 6(1)(c) of the Sugar (Control) Order, 1966.
216.In the instant case, the order impugned had been passed under Clause 6(1)(a) of the Sugar (Control) Order, 1966. Therefore, the facts are distinguishable.
217.The learned Senior Counsel then relied on the judgment of the Hon'ble Supreme Court reported in MANU/SC/0016/1968 : 1969 1 SCC 308, The Purtabpore Co., Ltd., Vs. Cane Commissioner of Bihar and Ors. https://www.mhc.tn.gov.in/judis 149 The High Court in that case had held that the proceedings before the cane growers was not a quasi-judicial proceedings. That finding was interfered with by the Hon'ble Supreme Court. It was reiterated that the crushing capacity of the mill, the availability of sugarcane in the reserved area and the need of production to sugarcane were the factors to be considered. These were the very factors which had been considered by the Cane Commissioner in the order impugned. I would therefore, uphold the order of the Cane Commissioner.
218.The learned Senior Counsel then relied on the judgment of a learned Single Judge of this Court in reported MANU/TN/0364/2013, Mangalam and Ors Vs. Commissioner of Sugar and Cane Commissioner and Ors. In that case, the learned Single Judge examined G.O.Ms.No.277, Agriculture Department dated 25.10.2005 and therefore, interfered with transfer of reserve area from one Private Company to another Private Limited Company. Neither the learned Senior Counsel nor the learned Advocate General had addressed this Court about the G.O.Ms.No.277 dated 25.10.2005. The order in the instant case was passed under Clause 6(1)(a) of https://www.mhc.tn.gov.in/judis 150 the Sugar (Control) Order, 1966. That judgment is not applicable to the facts of this case.
219.The learned Senior Counsel then relied on the judgment of the Division Bench of the Allahabad High Court reported in MANU/UP/0114/2006, Kisan Sahkari Chini Mills Ltd. Vs. State of U.P and Ors. It was observed that the Cane Commissioner should not be given an unrestricted free hand to revise earlier orders.
220.In the instant case, specific factors were stated to allot the lands in Kammapuram firka from EIDPIL to MRK. The procedure adopted had been in accordance with the directions of the learned Single Judge in the earlier writ petition. There is no fault evident on the face of the record.
221.Mr.Rahul Balaji, learned counsel, had relied on the judgment of the Hon'ble Supreme Court reported in (2010) 9 SCC 496, Kranti Associations Private Limited and Another Vs. Masood Ahmed Khan and Ors. The directions given relating to a decision of a quasi-judicial authority https://www.mhc.tn.gov.in/judis 151 are binding.
222.In the instant case, the Cane Commissioner had given his reasons and had considered all relevant factors. An order has to be read as a whole and cannot be dissected minutely. The impugned order gives the necessary reasons for reallocation of lands from EIDPIL to MRK.
223.The learned counsel placed reliance on the Rangarajan Committee report, particularly with respect to the minimum distance criteria. But it was only a recommendation. The practical aspects will have to be examined. In the instant case, as pointed out MRK is certainly located closer to the lands than EIDPIL.
224.Mr.R.Shunmugasundaram, learned Advocate General, had relied on the judgment of the Hon'ble Supreme Court reported in (1976) 1 SCC 318, Indian Sugar & Refineries Ltd. Vs. Amarvathi Service Co-operative Society Ltd. The proposition held was that the cane growers should be heard when there is price fixation. In the instant case, there was only re- https://www.mhc.tn.gov.in/judis 152 allocation of lands and even in that exercise, the cane growers had been heard.
225.The learned Advocate General, then relied on the judgment of the Hon'ble Supreme Court reported in (1981) 2 SCC 600, M/s.Laxmi Khandsari and Ors. Vs. State of U.P. and Ors. That was a case where it was complained that principles of natural justice had not been followed. In the instant case, principles of natural justice had been followed and I hold that the Cane Commissioner had proceeded in accordance with due procedure while passing the impugned order.
226.The learned Advocate General then relied on the the judgment of the Hon'ble Supreme Court reported in (2004) 5 SCC 430, U.P.Co- operative Cane Unions Federations Vs. West U.P.Sugar Mills Association and Ors. In this case, the Hon'ble Supreme Court had emphasised that the first and foremost requirement for profitable running of the sugar factory is that it should get adequate quantity everyday throughout the crushing season and for this a system of reserving an area in favour of a sugar factory had https://www.mhc.tn.gov.in/judis 153 been evolved. It had also been held that this actually gives an advantage to the cane growers since the purchase of their yield is assured. It was also held that the cane growers are bound by the agreement to supply sugarcane to the sugar factories. This judgment emphasis the binding nature of an order of the Cane Commissioner.
227.The Sugar (Control) Order 1966, reflects the policy of the Central Government with respect to determining the minimum price for sugarcane and regulating distribution and movement of sugarcane. This is done on the basis of various factors as stated in the Control Order. Those factors reflect the policy of the Central Government. Those policies are reflected in the order of the Cane Commissioner. Unless the order is impugned on the ground that there was violation of those policies, the order of the Cane Commissioner cannot be subjected to judicial review of this Court.
228.In the instant case, the factors which had been taken into consideration by the Cane Commissioner before passing the impugned order were, https://www.mhc.tn.gov.in/judis 154
(i) the crushing capacity of MRK : It had been stated that MRK was performing with less than available crushing capacity and therefore there has got to be a further input of sugarcane for that purpose, the availability of sugarcane is obvious. Sugarcane is available in the lands in Kammapuram firka.
(ii) need for production of sugar : This factor is obvious. The order ensures demarcation of area to purchase the quantity of sugarcane required by it. Sugarcane is required by MRK to attain a crushing capacity. If the crushing capacity has not been attained, then to equalise the production of sugarcane to the maximum crushing capacity, the area where sugarcane are grown are allotted to that particular factory. This factor had been considered in the impugned order.
229.It is however stated that there is no guarantee that the minimum price would be paid to the cane growers. It must be kept in mind that MRK, as a co-operative society has the force of the Government behind it. There https://www.mhc.tn.gov.in/judis 155 may be teething problems. There may have been occasions when lorries transporting sugarcane were made to wait. But for every problem there is a solution and patience is also required. EIDPIL as a Private Limited Company has resources and skilled personnel. A public servant also has responsibilities to discharge. I am confident that employees of MRK would also be able to solve the logistic issues in planting, monitoring growth, harvesting and transporting sugarcanes to the factory.
230.The criticisms that in the impugned order the views of the cane growers were not properly appreciated and those who spoke in favour of MRK were appreciated will have to be rejected, because the focus must only be on the crushing capacity of the sugar factory and the necessity for purchase of sugarcane to enable it to attain maximum capacity.
231.The petitioners in W.P.No.1084 of 2023 were afforded an opportunity of hearing. Their views were also considered. This was in deference to the directions of the learned Single Judge in W.P.No.7692 of 2022. The premises on which the order should be passed has to be only in https://www.mhc.tn.gov.in/judis 156 accordance with the factors stated in Clause 6(1)(a) of the Sugar (Control) Order, 1966.
232.It is a fact that EIDPIL already has substantial lands under its fold. In the order, it had been stated that MRK would further suffer if lands under its command are snatched away consequent to land acquisition process proposed by NLC. It was therefore opined by the Cane Commissioner that lands should be allotted to MRK to offset lands acquired under such proposal. The issue whether such acquisition would actually happen or not, is not for this Court to examine, as it is not required to enter into the realm of policies of the Neyveli Lignite Corporation. That there is such a proposal had been stated by the Cane Commissioner and I would attach responsibility to that statement. Issues relating to the area of land or the probable time scale within such acquisition would take place are beyond the scope of examination in these writ petitions. A fact stated can be taken as a fact to happen. Oblique motive cannot be focused against the Cane Commissioner for planning in advance taking into consideration the probable acquisition of lands by the Neyveli Lignite Corporation. As a https://www.mhc.tn.gov.in/judis 157 matter of fact, the Cane Commissioner must be appreciated for planning for a future possibility of reduction of command area of MRK. Therefore, the criticisms focused on that ground is rejected by me.
233.The allotment of lands will have to be examined from the view point of a wide cluster of factors. No doubt, the cane growers are important stake holders in this particular aspect, but primarily, the Cane Commissioner had a duty to ensure that he equalizes the command area and upgrades supply of sugarcane to all factories under his control, including MRK, so that every factory attains its crushing capacity to a substantial degree. Statistics in this regard had been given in the impugned order. It is not for this Court to examine each and every data given. A presumption has to be made that data provided are correct or nearly correct, and certainly not wide off the mark. Judicial review cannot be stretched to examine and call for records relating to each and every data provided. It has to be examined whether there has been application of mind and personal satisfaction had been recorded by the authority passing the order under challenge. They are evident on the face of the record.
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234.One major criticism of the order was the statement that insolvency proceedings were still pending against SASL, while SASL had actually suffered an order of liquidation. I would not place much credence to such criticism. It is a fact that SASL had been directed to be liquidated. The statement that proceedings are pending, when proceedings had ended does not change the basic fact that alternate arrangements relating to the command lands under SASL have to be made. I wonder how this statement or rather mis-statement has adversely affected EIDPIL. Certainly, EIDIPIL cannot claim a right to be allotted the lands. It must be kept in mind that SASL was not a co-operative society. It was a private limited company like EIDPIL. When a co-operative society suffers the same fate, the Government is there to rescue it. When a private limited company suffers losses and is unable to pay its creditors, it has to face the fate of SASL. The criticism of the order about improper appreciation of the proceedings against SASL is neither here nor there. The statement in the impugned order only reflects that cane growers cannot any more rely on a private limited company - SASL and it would only be advantageous that the reserved areas are allocated to another company and while allocation is made, the crushing https://www.mhc.tn.gov.in/judis 159 capacity of a nearby factory is taken into consideration. That is the primary premise. Interpretation of a judicial proceedings by an Executive authority would be only to the limited knowledge of that authority about judicial proceedings. He or she may or may not be an expert in determining the significance of the terms, liquidation of a company / pendency of insolvency proceedings. One is the result of the other. The other is the cause for the one. They are both interlinked. I do not find any plausible reason to interfere with the impugned order, merely because a particular interpretation had been given to a judicial proceeding which SASL faced or is facing. That fact is irrelevant so far as the factors to be taken into consideration under Clause 6(1)(a) of the Sugar (Control) Order, 1966 are concerned.
235.In the impugned order, the factors which had been taken into consideration had been stated as follows :
“6.The following facts are thus crucial before arriving at a decision, “1.The average Capacity Utilization of their own cane of M/s.EID Parry (India) Ltd, Nellikuppam is 101% when compared to https://www.mhc.tn.gov.in/judis 160 M/s.MRK Cooperative Sugar Mills, Sethiyathope which is 43% for the past 5 years.
2.KammapuramFirka is geographically nearer to M/s.MRK Cooperative Sugar Mills as it 15-20 KM whereas the distance is 50 to 60 KM for M/s.EID Parry (India) Ltd, Nellikuppam.
3.In order to protect the welfare of the sugarcane farmers of KammapuramFirka, the said area shall be temporarily allotted to other nearby sugar Mills i.e M/s.MRK Cooperative Sugar Mills, Sethiyathope.
4.There are no dues with respect to cane payment from MRK Cooperative Sugar Mills.”
236.I hold that these are relevant factors. They are the only relevant factors. They have been correctly examined, appreciated and justified by the Cane Commissioner.
237.One further argument put forth by the learner Senior Counsel on behalf of the petitioners in W.P.No.1084 of 2023 is that the factors https://www.mhc.tn.gov.in/judis 161 mentioned in Clause 6(1)(a) have to be considered only when the reserved area lands are allotted afresh and not when an earlier allotment is modified. This argument has to be rejected because, the words in Clause 6(1)(a) itself relates to regulation of distribution and movement of sugarcane. It applies whenever any decision is taken to regulate the distribution and movement of sugarcane. There cannot be a distinction that these factors should apply only when allocation is made for the first time. When an allocation had been made for the first time, there would always be necessity to re-visit the said allocation. It must be kept in mind that it was a temporary arrangement. When such re-visitation is made, the factors enunciated under Clause 6(1)(a) alone will have to be examined. Therefore, I find no reason to interfere with the order on this particular ground.
Conclusion :
238.For all the reasons stated above, I hold that both the writ petitions will have to suffer an order of dismissal.
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239.It must be pointed out that EIDPIL had an opportunity of extending a helping hand not only to the cane growers, but also to MRK. They could have fallen back to Section 135 of the Companies Act, 2013, and discharged that noble object as a Corporate Social Responsibility. Though EIDPIL may justify that they already have under their fold substantive measures complying with Section 135 of the Act, they could still have, in the instant case, outreached with social responsibility. They failed. They have failed.
240.I also hold that the apprehension of the cane growers should not be left unheard or unattended. Judiciary shall lend them a helping hand. I would therefore direct the Principal District Judge Cuddalore / Chairperson, District Legal Services Authority at Cuddalore, to organize a legal aid camp at Kammapuram firka, hear out the cane growers and address their grievances or apprehensions.
241.In view of the above reasons, while placing a caveat, as above, on the District Legal Services Authority, Cuddalore, I hold as follows:
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(i).W.P.No.1084 of 2023 is dismissed. No costs.
(ii).W.P.No.1536 of 2023 is also dismissed. However, since EIDPIL had an alternate to reach out to both the sugarcane growers and MRK and facilitate an amicable way forward, and had failed to do so, costs of Rs.1,00,000/- (Rupees One Lakh only) is imposed payable to the Tamil Nadu Legal Services Authority, Chennai. It would be poor defence to state that the Court prodded them to file the writ petition. They had the cards in their hands and should have exercised judicious discretion before venturing to file this hostile, adversial writ petition.
(iii).Connected Writ Miscellaneous Petitions are closed.
15.02.2023 Index:Yes/No Internet:Yes/No Speaking order: Yes/No Neutral Citation: Yes/No smv https://www.mhc.tn.gov.in/judis 164 To
1.The Secretary Government of Tamil Nadu, Agriculture Department, Fort St. George, Chennai – 09.
2.The Commissioner of Sugar, II Floor, Aavin Illam, 3A, Pasumpon Muthuramalinganar Salai, Nandanam, Chennai – 600 035.
3.The Managing Director, M.R.K.Co-operative Sugar Mills, Sethiathope, Cuddalore District – 608 702.
4.The Principal District Judge, Cuddalore (To comply with the direction in paragraph 240 of this order). https://www.mhc.tn.gov.in/judis 165 C.V.KARTHIKEYAN,J.
smv W.P.Nos.1084 & 1536 of 2023 and W.M.P.Nos.1037, 1625 & 1627 of 2023 15.02.2023 https://www.mhc.tn.gov.in/judis