Thursday, August 18, 2022

Allahabad High Court says govt officials should exercise power in logical, proper manner in plea against Sugarcane Commissioner

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The Allahabad High Court has observed that government officials are expected to exercise their power in a logical and proper manner. The Cane Commissioner, while reserving sugarcane areas for sugar mills, should keep in mind that sugar mills not only develop the area but also protect interests of farmers.

The Division Bench of Justice Ashwani Kumar Mishra and Justice  Vikram D. Chauhan passed this order while hearing a petition filed by J.H.V. Sugar Limited.

The petitioner is a company that is running a sugar mill in Maharajganj District. It is aggrieved by a reservation order passed by the Cane Commissioner, UP dated November 22, 2021 in so far as its requirement of sugarcane estimated by the authorities of the State in terms of Section 12(2) of UP Sugarcane (Regulation of Supply and Purchase) Act, 1953 is overlooked and allocation is made only to the extent of 29.75% of its assessed requirement.

A prayer is made in the petition to direct the Cane Commissioner to modify the reservation order keeping in view its requirement assessed by the authorities of the State. It is pleaded that though an appeal lies against the order dated November 22, 2021 under Section 15(4) of the Act of 1953 but the remedy is illusory inasmuch as the appeal lies before the State Government and is heard by the Special Secretary of the Department of Sugar Industry and Cane Development who works under the administrative control of the Additional Chief Secretary of the Department of Sugar Industry and Cane Development, Government of UP, Lucknow.

It is further asserted that the Cane Commissioner who has passed the order dated November 22, 2021 is also the Additional Chief Secretary of the Department of Sugar Industry and Cane Development.

The Court noted that other sugar factories have been allocated cane area to the extent of 66% to 204% of their assessed requirement of sugarcane while the petitioner’s sugar mill is allotted only 29.75% of its assessed requirement which would at best allow the petitioner to crush sugarcane for twenty days and would render it economically unviable.

V.B. Pandey, Chief Standing Counsel appearing for the Cane Society under signatures of District Cane Officer, Maharajganj in which it is stated that the payment of sugarcane dues for 2014-15 has been released after five years two months and for subsequent years also cane dues of petitioner are pending.

It is contended that the petitioner has been extremely poor in clearing all the dues of the cane growers which is one of the relevant factors to be taken note of under the Act of 1953 and the Rules of 1954 framed thereunder, while passing the order of reservation, therefore, the authorities have adequately and appropriately allocated sugarcane area to the petitioner.

Ravindra Singh, counsel for the Cane Cooperative Society, said in addition to the poor financial health of petitioner, the petitioner has an alternative remedy of preferring appeal before the State Government and, therefore, this petition is not liable to be entertained.

In reply, counsel for the petitioner submitted that the petitioner has been subjected to hostile discrimination, as would be apparent from the figures contained in the petition.

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It is submitted that not just the petitioner but almost all other sugar factories are in default in clearing the cane dues and this cannot be a ground to justify extremely low allocation of sugarcane area to the petitioner.

It is also contended that appeal in the facts and circumstances is not an effective remedy as the Cane Commissioner who has passed the order is also the Additional Chief Secretary of the department concerned and, therefore, the Secretary/Special Secretary of the department cannot sit in appeal over the order passed by his superior i.e the Additional Chief Secretary of the department under whose administrative control he works.

So far as the question of arrears of cane dues is concerned, it is pointed out that the unit Gola has been allotted sugarcane area to the extent of 121.68% of its assessed requirement under Section 12 of the Act of 1953 although its cane dues arrears is Rs 335.85 crore.

It is contended that dues of petitioners as per the chart are only about Rs 16 crore, which is a small fraction of the dues of Gola unit. It is also pointed out with reference to the same chart contained in the petition that the authorities have been generous in awarding sugarcane areas to other units also which are in default of much larger arrears of cane dues.

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Other figures from the same chart is referred to by the counsel for the petitioner in order to submit that non-clearance of dues of farmers is not the only factor and the authorities have rightly not denied allocation of sugarcane to other units, for such purposes, but a different stand is taken in case of the petitioner.

A specific question has been raised to the counsel for the petitioner as to what is the basis of the chart contained in the petition? In reply, it is asserted that this chart has been downloaded from the website of the Cane Department of State.

It is stated that such a chart is prepared by the department and only the figures provided by the State have been relied upon in support of the petitioner’s contention.

Amit Saxena, Senior Counsel for the petitioner, submitted that even the reservation proposal of petitioner was not accepted because the District Cane Officer had refused to put his signatures on the treasury challan of Rs 1,000 and the petitioner was compelled to approach the Court by filing Writ Petition. The petition was opposed on the ground that the petitioner is in arrears of cane dues to the extent of Rs 16.0831 crore.

Submission is that petitioner has already undertaken to clear the cane dues of farmers but the authorities are creating all hindrances so that petitioner is not able to run its unit in which case it would become difficult for it to honor its commitment made in the above petition.

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The Court observed that the allocation of sugarcane area to petitioners is much below the allocation made for other units. The petitioner has already been permitted an order dated October 22, 2021 passed in Writ Petition to clear the outstanding dues in the manner specified and, therefore, the issue of outstanding arrears cannot be the only factor to be kept in mind for allocation of cane area.

The Court further observed that the State Authorities while exercising their powers under the Act of 1953 and the Rules of 1954 are expected to act in a reasonable and fair manner so that the sugar industry as a whole may flourish and contribute to the development of the area and also protect the interest of farmers. However, before proceeding any further, we would like the Cane Commissioner to examine the issues raised by the petitioner, as is noticed in our order, and to clarify the basis for allocation of sugarcane area to the petitioner with reference to the facts brought on record. The Cane Commissioner shall file his personal affidavit clearly disclosing as to what is the basis for allocation of only 29.75 % of the estimated requirement of the petitioner as against much higher allocation of sugarcane to other units.

“The object of the Act and the law settled with regard to factors to be kept considered while reserving and assigning cane areas shall be kept in mind while filing the affidavit. Liberty stands reserved to the Cane Commissioner to revisit the issue or make necessary modifications if it is so found expedient upon due consideration of issue. Put up as fresh once again on January 5, 2022, by then the Cane Commissioner shall file his personal affidavit,”

-the court ordered.

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