Shanti Sugar Industries vs State Of U.P. And 2 Others
2017 Latest Caselaw 6336 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


 
AFR
 
Court No. - 10
 

 
Case :- WRIT - C No. - 44211 of 2017
 

 
Petitioner :- Shanti Sugar Industries
 
Respondent :- State Of U.P. And 2 Others
 
Counsel for Petitioner :- Anil Kishore Sharma,Shrey Sharma
 
Counsel for Respondent :- C.S.C.,Diptiman Singh
 

 
Hon'ble Arun Tandon,J.

Hon'ble Rajiv Joshi,J.

The short question involved in this petition is as to whether the order of Cane Commissioner dated 24.8.2017 refusing to grant the certificate in favour of the writ petitioner- Shanti Sugar Industries qua its Khandsari Unit situate in village Karimnagar (Uledha), is not within the reserved area of a sugar mill, is correct or not ?

We reproduce the order of the Cane Commissioner in extenso :

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It is recorded that under the reservation order for the year 2016 -17, dated 8.11.2016, village Karimnagar (Uledha) where Kandsari unit of the petitioner is situated is reserved area for Chini Mill Bilai. The fact so stated is disputed with reference to the order issued by the Cane Commissioner dated 8.11.2016 and it is contended that the order is based on misreading of the reservation order. It is stated that areas covered by Purchase Centres Udela IInd and Udela Ist, district Bijnor are mentioned at serial no. 55 & 63 respectively of the Part 1(B) of the reservation order as the assigned areas of Upper Ganges Sugar & Industries Limited (mill Sehohara). There is a specific note that these sugar cane purchase centres have been so assigned from the area of Bilai Chini Mills i.e. the Sugar Mills established by respondent no. 4.

Learned counsel for the petitioner would contend that there cannot be overlapping of reservation of an area in favour of one sugar mill and assigning of the same area to another sugar factory. He would submit that once an assignment has been made of the purchase centre within the limits of village Udela Ist and Udela IInd in favour of Upper Ganges Sugar & Industries Limited, the area of Cane Purchase Centre is taken out of the reservation area of Bilai Chini Mills and now will fall within the assigned area of Upper Ganges Sugar Industries Limited only. It is therefore submitted that the order of the Cane Commissioner cannot be legally sustained.

With reference to section 15 of the U.P. Sugarcane (Regulation of Supply and Purchase ) Act, 1953 (hereinafter referred to as Act, 1953), it is contended that impact of reservation of an area and the impact of assignment of an area, are different. The sugar factory for which an area is reserved is bound to purchase the entire sugarcane offered for sale by the farmers on a direction being issued by the Cane Commissioner. While a sugar factory for which a area is assigned, has to purchase on such quantity of sugarcane as is mentioned in the order of assignment on being offered for sale by the farmers.

Sri G.K. Singh, learned senior counsel on behalf of the respondent-sugar factory, would contend that Udela IInd and Udela Ist would continue to be treated as reserved areas of Bajaj Hindustan Sugar Limited (Chini mill Billai) only, same quantity of the sugar cane within the reservation area has been assigned in favour of Upper Ganges Sugar & Industries Limited (Sheohara Chini Mill). He would contend that the reservation order dated 8.11.2016 has to be read in that manner only and therefore the order of the Cane Commissioner dated 24.8.2017 to the effect that village Karimnagar Udela where Khandsari unit of the petitioner is situated, is within the reserved area of Hindustan Sugar Mill ( Bilai Chini Mill), is factually correct.

An affidavit alongwith impleadment application has been filed by the Society of Cane Growers through Sri Ravindra Singh, Advocate. It is not necessary to implead the applicant-Society as one of the respondents in the present petition as they are neither necessary nor proper party in the case. However, in the larger interest of justice, we have permitted intervention by the counsel for applicant. He he has also been heard in opposition to the present petition. The impleadment application is rejected.

The stand taken by the applicant-cane development society is more or less identical to the one which has been taken by the counsel for Bajaj Hindustan Sugar Ltd.

An attempt was made to take the Court through the Sugar Cane Control Order 1966 specifically clause 6(1) (a) of the Control Order.

For appreciating the controversy involved, it is worthwhile to reproduce the definition of "Assigned area" and "Reserved area" as contained in clause 2(a) and 2(n) of the Act of 1953 as well as the definition of reserved area as contained in clause 2(j) of the Sugar Cane Control Order 1966, which read as under:

" 2. (a). "assigned area" means an area assigned to a factory under Section 15."

2. (n). " Reserved area" shall mean the area reserved for a factory under an Order for reservation of Sugarcane areas made under Rule 125-B of the Defence of India Rules, 1962, and when no such order is in force, the area specified in an order made under section 15."

"2 (j). "reserved area" means any area where sugarcane is grown and reserved for a factory under sub clause (1)(a) of clause 6."

We may also reproduce the provisions of section 15 of Act 1953 which confers power upon the Cane Commissioner to reserve any area and to assign any area for the purposes of supply of cane to a factory during one or more crushing seasons as may be specified. The Can Commissioner has further power to cancel such order or alter the boundaries of an area so reserved or assigned at any time. Relevant part of Section 15 reads thus :

"15. Declaration of reserved area and assigned area. (1) Without prejudice to any order made under Clause (d) of sub section (2) of Section 16 of the Cane Commissioner may, after consulting the Factory and Cane Growers' Co-operative Society in the manner to be prescribed:

(a) reserve any area (hereinafter called the reserved area); and

(b) assign any area ( hereinafter called as assigned area),

for the purposes of the supply of cane to a factory in accordance with the provisions of Section 16 during one or more crushing seasons as may be specified and may likewise at any time cancel such order or alter the boundaries of an area so reserved for assigned.

(2) Where any area has been declared as reserved area for a factory, the occupier of such factory shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory.

(3) Where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner."

From a simple reading of the aforesaid provisions, it shall be seen that reserved area and assigned area mean the area which is so reserved or assigned to the Sugar Factory under section 15 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. The Sugarcane Control Order, 1966 does not talk of any assigned area. Therefore, it has no application so far as the assigning of area as contemplated by section 15 is concerned.

What is important to note is that the reservation or assignment of an area is only for one or more crushing seasons as may be specified. In the facts of the case the order dated 8.11.2016 provides for reserved area/assigned area only for the crushing season 2016 -2017. There is no concept of an area being reserved or assigned to a particular Sugar Factory for all times.

From the reading of section 15 of the Act of 1953, it will be seen that reservation of an area makes it obligatory on the Sugar Factory for which the area is reserved, to purchase the entire quantity of the sugarcane grown in that area on same being offered for sale by the cane growers. While in the case of assignment of an area, only such quantity of sugarcane can be purchased by the sugar factory grown in that area as is offered for sale to the factory, as is fixed by the Cane Commissioner in the order of assignment. Meaning thereby that so far as reserved area is concerned, the sugar factory has to purchase the sugarcane which is offered for sale irrespective of the quantity. While in the case of assignment of the area, the sugar factory can purchase only such quantity of sugarcane which is mentioned in the order and nothing beyond it. It is therefore clear that rights/ obligation of the sugar factory under an order reserving a particular area viz-a-viz assigning of a particular area, are entirely different.

It is conceded by the counsel for the parties that there cannot be over lapping of assigned area and reserved area at any particular point of time. Either the area would fall within the reserved area contemplated under section 15(1) (a) or it will fall within the assigned area under section 15(1)(b).

In the facts of the present case, we find from the simple reading of the order of reservation dated 8.11.2016 that so far as reserved area of Bajaj Hindustan Sugar Ltd. (Bilai mill) is concerned, it does not include the areas of purchase centre, Udela Ist and Udela IInd as would be clear from the document enclosed at page 69. It is further apparent that aforesaid village Udela Ist and Udela IInd are the assigned areas for Upper Ganges Sugar & Industries Limited. Although in the remarks column it is mentioned that same is being assigned from the area of Bilai Sugar Mill. The same necessarily implies that earlier this has been a part of the reservation area of Bilai Sugar Mill but in the current session it is being assigned to Upper Ganges Sugar & Industries Limited.

We therefore have no hesitation to record that Udela Ist and Udela IInd are within the assigned area of Upper Ganges Sugar & Industries Limited for the crushing season 2016-17 as would be clear from simple reading of the Cane Commissioner Order dated 8.11.2016. The aforesaid two Udela Ist and Udela IInd do not fall within the reserved area of Bajaj Hindustan Sugar Ltd. For the crushing season 2016 -17. The order of the Cane Commissioner dated 24.8.2017 recording to the contrary, cannot be legally sustained and is hereby set aside. The Cane Commissioner is directed to issue necessary certificate in accordance with law, within one month from the date of receipt of certified copy of this order.

The writ petition stands allowed.

Order Date :- 6.11.2017

SNT/