# (2021) 11 ILRA 376

- **Citation:** (2021) 11 ILRA 376
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-12-23
- **Bench:** Rajan Roy, Suresh Kumar Gupta
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/2021-11-ilra-376-46554
- **Pages:** 27

## Headnote

C.S.C., Dileep Singh, Gaurav Mehrotra, Paavan
Awasthi

A.
Interpretation
of
Statute
-
U.P.
Sugarcane
(Regulation
of
Supply
and
Purchase) Act, 1953 - Sections 2(k), (l),
(o), (I) & 17 - U.P. Sugarcane (Regulation
of Supply and Purchase) Rules, 1954 - The
U.P.
Sugarcane
(Supply
and
Purchase)
Order, 1954 - The Essential Commodities
Act, 1955 - The Sugarcane (Control) Order,
1966: Clause 3(3), 3-A - When the St. Act is
in conflict with the Central Order and the former
will have to give way to the latter. The Central
Order has its backing and statutory force of a
Central enactment and would prevail over any
contrary
provision
contained
in
the
St.
enactment. (Para 57)

The Court observes that Section 17(3) of the St.
Act, 1953 prescribes a period of fifteen days but
the Central Order, 1966 made under the Central
Enactment, 1955 prescribes a period of fourteen
days for payment of sugarcane dues. Thus, for
the reasons already given hereinabove, the
company/occupier is required to pay the cane
dues to the cane farmers directly or to the Cane
grower's Co-operative Society within fourteen
days from the date of delivery. Similarly, the rate
of interest payable in case of delay in payment
to the farmers within stipulated period of time
would be 15 per cent per annum as is prescribed
in the Central Order, 1966 and not 12 per cent
per annum as is prescribed in the proviso to
Section 17(3) of the Act, 1953. (Para 56, 58)
Writ Petition Disposed of. (E-10)

List of Cases cited:

## Text

_Characters 0–39,983 of 102,708. This is a partial read: ask again with offset=39983 for what follows._

376 INDIAN LAW REPORTS ALLAHABAD SERIES
regard, the recovery of country made pistol at the
pointing out of the appellant Chandan Singh has been
denied by Chandan Singh and has been termed as
bogus/fabricated. The memorandum of recovery is not
witnessed by any public witness and the place from
where the recovery is made, from the statement of
PW-15 as well as from the site plan, is an open field
having direct access from the road. The spot from
where the recovery is stated to have been made is 35
paces outside the boundary wall of the house of
Chandan Singh. Further, the recovery is not stated to
have been made by digging out the weapon from
beneath the surface of the earth rather, it is alleged to
have been searched out from the field, where it was
stated to be lying. Interestingly, this weapon could not
get connected with the bullet recovered from the body
of the two deceased therefore, in such circumstances,
the disclosure statement that allegedly led to its
recovery becomes doubtful. Otherwise also, the
weapon lying in open field, not buried, cannot be said
to be in the possession of the appellant. We are
therefore, of the firm view that the appellant is also
entitled to be acquitted of the charge of an offence
punishable under Section 3/25 of the Arms Act.

38. For all the reasons recorded above, the
judgment and order of the trial court in both the trials
cannot be sustained. Both the appeals are allowed. The
reference to confirm the death penalty is answered in
the negative and the prayer to confirm the death
penalty awarded to the accused-appellant Chandan
Singh is rejected. The judgment and order of the trial
court in both the sessions trial is set aside. All the
appellants are acquitted of all the charges for which
they have been tried. They shall be released forthwith,
unless wanted in any other case, subject to compliance
of the provisions of Section 437A Cr.P.C. to the
satisfaction of the court below.

39. Before parting, we would like to express our
anguish with the shoddy manner in which the
investigation of the case was done. This was a case
where there were three murders in a village.
Noticeably, three persons died on or about the same
time in the intervening night of 18/19.06.2018. Their
bodies were found at three different places. In the age
of mobile telephony, ordinarily, most of the citizens
including villagers are having mobile phones. With the
help of CDR details, the tower location of the mobile
phones, an insight can be had to the turn of events that
led to the murders. The investigation is completely
absent in that regard. A very simplistic approach has
been adopted by the investigating agency in presuming
as if the same set of accused committed all the three
murders without even noticing that the entry wounds
apparently were of different dimensions and the
ballistic expert report indicated that the two bullets
recovered, one from deceased Sundar Singh and the
other from deceased Satya Prakash, could neither be
connected with the weapon recovered from Chandan
Singh nor could be found as to have been fired from a
single weapon. Hence, the investigating agency was
required to probe further to find out as to who else
could have been involved. No effort of that kind
appears visible on the record. It is unfortunate that a
triple murder has resulted in no conviction. The Courts
cannot convict unless the prosecution leads evidence
that establishes the guilt beyond the pale of doubt. The
burden is on the prosecution and the investigating
agency plays an important role in that regard, which, in
the present case they have miserably failed to
discharge.

40. Let a copy of this order be sent to the trial
court for information and compliance.
----------
(2021)12ILR A376
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 23.12.2021

BEFORE

THE HON'BLE RAJAN ROY, J.
THE HON'BLE SURESH KUMAR GUPTA, J.

Misc. Bench No. 11355 of 2021
Along with other connected cases.

Shailendra Kumar & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents
11 All. Shailendra Kumar & Ors. Vs. State of U.P. & Ors.
377
Counsel for the Petitioners:
Girish Chandra Verma

Counsel for the Respondents:
C.S.C., Dileep Singh, Gaurav Mehrotra, Paavan
Awasthi

A.
Interpretation
of
Statute
-
U.P.
Sugarcane
(Regulation
of
Supply
and
Purchase) Act, 1953 - Sections 2(k), (l),
(o), (I) & 17 - U.P. Sugarcane (Regulation
of Supply and Purchase) Rules, 1954 - The
U.P.
Sugarcane
(Supply
and
Purchase)
Order, 1954 - The Essential Commodities
Act, 1955 - The Sugarcane (Control) Order,
1966: Clause 3(3), 3-A - When the St. Act is
in conflict with the Central Order and the former
will have to give way to the latter. The Central
Order has its backing and statutory force of a
Central enactment and would prevail over any
contrary
provision
contained
in
the
St.
enactment. (Para 57)

The Court observes that Section 17(3) of the St.
Act, 1953 prescribes a period of fifteen days but
the Central Order, 1966 made under the Central
Enactment, 1955 prescribes a period of fourteen
days for payment of sugarcane dues. Thus, for
the reasons already given hereinabove, the
company/occupier is required to pay the cane
dues to the cane farmers directly or to the Cane
grower's Co-operative Society within fourteen
days from the date of delivery. Similarly, the rate
of interest payable in case of delay in payment
to the farmers within stipulated period of time
would be 15 per cent per annum as is prescribed
in the Central Order, 1966 and not 12 per cent
per annum as is prescribed in the proviso to
Section 17(3) of the Act, 1953. (Para 56, 58)
Writ Petition Disposed of. (E-10)

List of Cases cited:

1. Jaypal Singh & anr. Vs St. of U.P. & ors. Writ C No.
29214 of 2019

2. Kanikram & 3 ors. Vs St. of U.P. & 4 ors. Writ C No.
13313 of 2020

3. St. Bank of Patiala Vs Zila Adhikari & Ors (2013) 11
ADJ 7

4. Ahmadabad Municipal Corporation Vs Virendra
Kumar Jayantibhai Patel . AIR (SC) 3002

5. Narendra kumar Chandla Vs St. of Har. & ors. JT
1994 (2) S.C. 94

6. M/s Shakuntla Educational & Welfare Society Vs St.
of U.P. & 2 ors. Writ C No. 28968 of 2018

7. Simbholi Sugar Ltd. Vs St. of U.P. & ors. 2010 (3)
A.D.J. 628 (LB)

8. CH. Tika Ramji & ors. Etc.. Vs St. of U.P. & ors. AIR
1956 SC 676

9. West U.P. Sugar Mills Association & Ors. Vs St. of
U.P. & Ors. (2020) 9 SCC 548

10. Ispat Industries Ltd. Vs Commissioner of
Customs, Mumbai (2006) 12 SCC 583

11. Delhi Transport Corporation Vs Balwan Singh &
ors. (2019) 18 SCC 126

12. Ch. Tikaramji Vs St. of U.P. (1956) SCR 393

13. Govind Nagar Sugar Ltd. Vs St. of U.P. 2001 ALL
LJ 741

14. DCM Shriram Industries Ltd. Vs St. of U.P. 2005
All LJ 2159

15. L.H. Sugar Factories Ltd. Vs St. of U.P. WP. C. No.
1680 of 2017

16. Akram Khan & anr. Vs St. of U.P. (2020) 132 ALR
182

17.
Offshore
Holdings
Pvt.
Ltd.Vs
Bangalore
Development Authorities & Ors (2011) 3 SCC 139

18. CH. Tika Ramji & ors. Etc. Vs St. of U.P. & ors.
AIR 1956 SC 676

19. U.P. Cooperative Cane Union Federation Vs West
U.P. Sugar Mills Association & ors. (2004) 5 SCC 430

20. St. of M.P. Vs Jaora Sugar Mills & ors. 1997 (9)
SCC 207

21. Kalyani Maithivanan Vs K.V. Jeyaraj & ors. (2015)
6 SCC 363 (followed)
378 INDIAN LAW REPORTS ALLAHABAD SERIES
22. Government of Andhra Pradesh & ors. Vs P.
Laxmi Devi (2008) 4 SCC 720

23. Sant Ram Sharma Vs St. of Raj. AIR 1967 SC
1910

24. Dhananjay Malik & ors. Vs St. of Uttranchal &
ors. (2008) 4 SCC 171

25. Rashtriya Kisan Mazdoor Sangathan (Regd)
thru Convenor Vs St. of U.P. & Anr. PIL No. 67617
of 2014 (followed)

26. Saverbhai Amaidas Vs St. of Bombay (1995) 1
SCR 799

27. Raju Anna Shetti & ors. Vs U.O.I .& ors. Writ
Petition (s) (Civil) No. 805 of 2021

28. Ratan Lal Adukia Vs U.O.I .& ors. (1989) 3 SCC
537

29. Kanikaram & ors. Vs St. of U.P. & ors. (2020)
SCC Online All 1039

30. Ram Keval Vs St. of U.P & ors. Writ Petition No.
866 (M/B) of 2019 (Distinguished)

31. Ram Singh Vs St. of U.P. & ors. Writ Petition
No. 30937 (M/B) of 2018

32. Dharam Veer Singh & ors. Vs St. of U.P. & ors.
P.I.L. No. 1081 of 2013 (Distinguished)

33. Tejwal Gangwar Vs St. of U.P. Writ C No.
60912 of 2016 (Distinguished)

34. West U.P. Sugar Mills Association & ors Vs St.
of U.P. 7 ors. (2009) 9 SCC 548

35. Kaiser-i-Hind Pvt. Ltd. & anr. Vs National
Textile Corpn. (Maharashtra North) & ors. (2002) 8
SCC 182

36. Rajiv Sarin & anr. Vs St. of Uttarakhand & ors.
(2011) 8 SCC 708

37. Forum for People's Collective Efforts (FPCE) &
anr. Vs St. of W.B.l & anr. (2021) 8 SCC 599

(Delivered by Hon'ble Rajan Roy, J.)

1. Heard Sri G.C. Verma, learned counsel
for the petitioners, Sri H.P. Srivastava, learned
Addl. Chief Standing Counsel for the State, Sri
Satish Chandra Mishra, learned Senior Counsel
along with Sri Paavan Awasthi, Sri Sanjeev
Singh, Sri Sunil Kumar Chaudhary and Sri Kapil
Mishra, learned counsel for opposite party no. 6,
Sri Gaurav Mehrotra & Sri Parmanand Asthana,
learned counsels appearing for respective Cane
Growers' Co-operative Societies.

2. This is a bunch of writ petitions filed by
cane growers seeking their sugarcane dues
which have not been paid by the opposite party
no.06 i.e. Bajaj Hindustan Sugar Limited
(hereinafter referred to as ''the Company'). The
Company runs 14 sugar mills in the State of
U.P. and the petitioners are sugarcane growers
who sold their sugar cane to five of these mills
situated at Gola Gokaran Nath, Khambhar
Khera,
Palia
Kalan,
Barkhera,
and
Maqsoodapur. This matter relates to these five
mills only.

3. Writ Petition No.11355 (M/B) of 2021
has been treated as the leading writ petition.
Relief prayed in the writ petition is as under:-

"(i) Issue a writ, order or direction in the
nature of mandamus commanding thereby the
opposite parties to ensure that the payment of
entire cane price is made immediately to the
petitioners along with 15 % compound interest
from the date on which it becomes. due and till it
actually paid, in the light of the Departmental
Laws i.e. Sections 17 & 22 of the Uttar Pradesh
Sugar
Cane
(Regulation
of
Supply
and
Purchase) Act, 1953, Rule 45 of the Uttar
Pradesh Sugar Cane (Regulation of Supply and
Purchase) Rules, 1954 & Order 3 (3, 3A, 8, & 9)
of the Sugarcane (Control) Order, 1966 as
mentioned in para 3 of the W.P. and also in the
light of the an AFR judgment passed in the writ
petition no. 13313 of 2020 (MB), as contained in
11 All. Shailendra Kumar & Ors. Vs. State of U.P. & Ors.
379
Annexure ho. 4 to the W.P., in the interest of
justice.

(ii) Issue a writ, order or direction in the
nature of mandamus commanding thereby the
opposite party no.2 to take action against the
opposite party no.6 for ensuring that the payment
of entire cane price is made immediately to the
petitioners along with 15 %. compound interest
from the date on which it becomes due and till it
actually paid, in the light of the Departmental
Rules i.e. Sections 17 & 22 of the Uttar Pradesh
Sugar Cane (Regulation of Supply and Purchase)
Act, 1953, Rule 45 of the Uttar Pradesh Sugar
Cane (Regulation of Supply and Purchase) Rules,
1954 & Order 3 (3, 3A, 8, & 9) of the Sugarcane
(Control) Order 1966 as mentioned in para 3 of
the W.P. and also in the light of the an AFR
judgment passed in the writ petition no. 13313 of
2020 (MB), as contained in Annexure no. 4 to the
W.P., in the interest of justice.

(iii) Issue a writ, order or direction in the
nature of mandamus commanding thereby the
opposite party no. 6 to make payment of entire
cane price to the petitioner along with 15 %.
compound interest from the date on which it
becomes due and till it actually paid as the mill is
bound to pay in the light of the Departmental
Sections 17 & 22 of the Uttar Pradesh Sugar Cane
(Regulation of Supply and Purchase) Act, 1953,
Rule 45 of the Uttar Pradesh Sugar Cane
(Regulation of Supply and Purchase) Rules, 1954
& Order 3 (3, 3A, 8, & 9) of the Sugarcane
(Control) Order, 1966 as mentioned in para 3 of
the W.P. and also in the light of the an AFR
judgment passed in the writ petition no. 13313 of
2020 (MB), as contained in Annexure no. 4 to the
W.P., in the interest of justice.

(iv) Pass any other order or direction which
this Hon'ble Court may deem fit, just and proper in
the circumstances of the case, in favour of the
petitioners.

(v) Allow the writ petition with cost."

4. This Court on 05.07.2021 passed a
detailed interim order directing payment of
sugarcane dues to the petitioners and other
sugarcane growers on the principle of ''first
supply, first payment' so that there is uniformity
and fairness in payment of dues.

5. The provisions of law relevant in the
case are the U.P. Sugarcane (Regulation of
Supply and Purchase) Act, 1953 (hereinafter
referred to as ''the Act, 1953'); U.P. Sugarcane
(Regulation of Supply and Purchase) Rules,
1954 (hereinafter referred to as ''the Rules,
1954'); the U.P. Sugarcane (Supply and
Purchase) Order, 1954 (hereinafter referred to as
''the Order, 1954') made under Section 16 of the
Act, 1953; the Essential Commodities Act, 1955
and the Sugarcane (Control) Order, 1966
(hereinafter referred to as ''the Order, 1966')
issued by the Central Government under Section
(3) of the said Act, 1955.

6. The contention of Sri G.C. Verma and
other learned counsel appearing for the
sugarcane growers-petitioners was that Section
17 (1), (2) and (3) of the Act, 1953 obligate
upon the Company to pay sugarcane dues within
fifteen days from the date of the sugarcane
having been delivered in its factory / purchase
centre, which has not been paid. It is also
contended that on failure to pay the dues as
aforesaid, interest @12 per cent per annum is
payable by the company to the cane growers in
view of the proviso to sub-Section (3) of Section
17 of the Act, 1953, whereas, as per the Order
1966, it is @ 15 per cent per annum, which has
also not been paid. It is contended that for the
past five years, no interest has been paid on the
delayed payment of dues of sugarcane growers
by the Company and in fact, in all the years, the
dues have been paid belatedly. It has further
been submitted that sugarcane growers have
taken loan for growing their crop and on account
of delayed payment, great prejudice has been
caused to them in the matter of repayment of
loan and even otherwise as their livelihood is at
stake the said right is being violated by the
380 INDIAN LAW REPORTS ALLAHABAD SERIES
Company. Reliance has been placed in this
regard upon various decisions of this Court some
of which are Writ-C No.29214 of 2019 'Jaypal
Singh and Another vs. State of U.P. and
others.' decided on 16.09.2019; P.I.L. No.67617
of 2014 'Rashtriya Kisan Mazdoor Sangathan
(Regd) Thru. Convenor vs. State of U.P. &
Anr.' and other connected writ petitions decided
on 09.03.2017; Writ-C No.13313 of 2020
'Kanikram & 3 others. vs. State of U.P. and 4
Others' and other connected writ petitions
decided on 21.09.2020; (2013) 11 ADJ 7 'State
Bank of Patiala vs. Zila Adhikari and others';
AIR
(SC)
3002
'Ahmedabad
Municipal
Corporation vs. Virendra Kumar Jayantibhai
Patel'; JT 1994 (2) S.C. 94 'Narendra Kumar
Chandla vs. State of Haryana & Ors.' and
Writ-C No.28968 of 2018 'M/s Shakuntla
Educational And Welfare Society vs. State of
U.P. and 2 Others' and connected petitions
decided on 28.05.2020.

7. Sri H.P. Srivastava, learned Addl. Chief
Standing Counsel for the State has submitted
that it is a fact that in the last five years the
Company has failed to pay dues of sugarcane
growers within time and that no interest has
been paid on such delayed payment. He,
however, submits that the financial condition of
the Company is such that it is not possible to
recover the dues even on taking of coercive
measures rather a balancing approach has been
adopted by the Sugarcane Commissioner so that
on the one hand the interest of the sugarcane
growers is protected and they are paid their dues
and on the other hand, the factory run by the
Company is also not shut-down as if this
happens then ultimately it is the sugarcane
growers of the area who will suffer and they will
have to take their sugarcane to a far-off factory
incurring additional expenditure and consequent
losses in sale consideration. Therefore, the Sugar
Commissioner has opened an Escrow account
and 85% of the sale proceeds from sale of sugar
made by the Company from the sugarcane
supplied by the farmers as also certain
percentage of sale proceeds from the sale of byproducts, namely, Molasses, Ethanol, Bagasse,
Electricity, Pressmud and Distillery is deposited
in the said Escrow account, remaining 15%
having been left for meeting expenditures of the
sugar factory being run by the Company, and
this amount deposited in the Escrow account is
used for payment of sugarcane dues, apart from
other sources of payment by the Company. The
account is operated jointly by officers of the
Company and the Government officials. He says
that this arrangement takes care of the interest of
the sugarcane growers as also the Company.
Almost every day payment is being made to the
sugarcane growers. He has relied upon various
decisions in support of his contention rendered
in Writ-C No.13313 of 2020 'Kanikram & 3
others. vs. State of U.P. and 4 Others'; P.I.L.
No.67617 of 2014 'Rashtriya Kisan Mazdoor
Sangathan (Regd) Thru. Convenor vs. State
of U.P. & Anr.'; 2010 (3) ADJ 628 (LB)
'Simbholi Sugar Ltd. vs. State of U.P. and
Others'; AIR 1956 SC 676 'CH. Tika Ramji
and others etc vs. State of U.P. and others';
(2020) 9 SCC 548 ' West U.P. Sugar Mills
Association and others vs. State of U.P. and
others'; (2006) 12 SCC 583 'Ispat Industries
Ltd. vs. Commissioner of Customs, Mumbai'
and (2019) 18 SCC 126 'Delhi Transport
Corporation vs. Balwan Singh and others'.

8. Sri S.C. Mishra, learned counsel
appearing for the Company submitted that only
2.87% farmers have approached this Court in
this bunch of petitions, meaning thereby,
97.13% of sugarcane growers are satisfied with
the situation as they are assured of a higher
return on sale of sugarcane to the Company even
if they receive the proceeds belatedly. He
submitted that the financial operations of the
Company were being managed by a consortium
of seventeen Banks. The financial condition of
the Company was such that no financial
institution was willing to extend any credit or
11 All. Shailendra Kumar & Ors. Vs. State of U.P. & Ors.
381
loan or advance for payment of dues of
sugarcane farmers inspite of its best efforts. This
situation, according to him, has arisen on
account of the Government having renegaded on
its promise made in the sugarcane policy, 2004
for providing certain subsidies and incentives to
the companies which establish fresh sugar units
in the State based on which the units were set-up
by the Company, that too, inspite of various
decisions by the High Court and Hon'ble the
Supreme Court in favour of the Company. He
submitted that inspite of the the decisions, the
State Government arbitrarily rejected the claim
of the Company which has again been put to
challenge and the matter is now pending before
the High Court. He also submitted that
electricity had been generated by the Company
in its factory which was sold to U.P. Power
Corporation Ltd. and there are dues of few
crores in this regard which have not yet been
paid by UPPCL to the petitioners. All this has
made the financial condition of the Company
fragile which in turn has resulted in delayed
payment of dues to the sugarcane farmers. If the
Government abides by the promise made by it to
the Company under the sugarcane policy and the
Power Corporation pays the proceeds from sale
of electricity to it then this entire matter could be
resolved at once. In fact, he submitted that the
Government and the Power Corporation need
not pay the dues of the Company to it, instead,
they may directly pay it to the sugarcane
growers which will clear all the dues and the
dispute will end.

9. We have already made it clear in our
earlier orders that we will not tag the payment of
sugarcane dues of farmers with the claim of the
Company of dues against the State and UPPCL
and the Company can agitate it separately.

10. He, however, could not deny the fact
that in the past five years, interest on the delayed
payment has not been paid by the Company to
the sugarcane growers. In this regard, he
submitted firstly that nobody asked for it and
secondly, he submitted that there is a provision
in sub-Section (3) of Section 17 of the Act, 1953
for waiver of interest. However, on being asked
as to whether any such application has been filed
for the year 2020-21 or the earlier years, he
could not give any satisfactory reply in this
regard. The Court was, however, apprised of an
order of the High Court directing the Sugarcane
Commissioner to take a decision on the
application for waiver of interest, if any, filed by
the Company within three months but none of
the counsels could inform the Court as to
whether any such application had been moved
and/ or any such decision had been taken
thereon or not.

11. Sri Mishra, learned Senior Counsel
further submitted that the dues upto the year
2019-20 have been cleared by March, 2021 as
Hon'ble the Supreme Court had permitted the
Company to clear the dues by the said date in
S.L.P. (C) No.11948-11951 of 2020. Therefore,
he says that the Company has best of intentions
to pay the dues of the farmers but it is only on
account
of
the
compelling
financial
circumstances that it has not been able to pay the
same, timely. He did not deny the liability of the
Company in this regard, rather asserted its
commitment to pay the dues.

12. However, in this regard, he submitted
that the provisions of the Act, 1953 had
themselves become outdated and were also selfcontradictory. He submitted that in the year
1953, the production and sale of sugarcane was
not much, certainly not what it is today,
therefore, payment of sale proceeds for small
quantities of sugarcane could be made by the
companies to the sugarcane growers but as of
now, the production has increased many fold
and it was not possible for anyone including the
State Government to make payment of dues
within the short period of fifteen days prescribed
in the statute as stated by learned counsel for the
382 INDIAN LAW REPORTS ALLAHABAD SERIES
petitioners. The provisions of Section 17 of the
Act, 1953 are impractical and in fact, they are
impossible to be complied with, although, he
also submitted that the company is committed to
making the payments and also made a statement
before this Court that the dues for the years
2020-21 would be cleared by February-March,
2022, a fact which has also been stated on
affidavit. On being specifically asked as to
whether interest would also be paid, he
submitted that subject to any waiver by the
Sugarcane Commissioner in this regard if
anyone claims interest, the same would also be
paid.

13. He, however, invited attention of the
Court to Section 17 (1) of the Act, 1953 wherein
the words ''speedy payment of price of cane' has
been mentioned and in the succeeding subSection (2) of the aforesaid Section, the words
''to pay immediately the price of the cane so
supplied' has been used, which, according to
him, were incongruous, especially as, in subSection (3) of the Section 17 of the Act, 1953, it
has been said that if the company defaults in
making payment of the price for a period
exceeding fifteen days from the date of delivery
then interest would be payable. He says that subSection (1) of Section 17 of the Act, 1953 uses
words ''speedy payment' then sub-Section (2)
uses the words ''liable to pay immediately
payment' and then sub-Section (3) says that it
should be paid within fifteen days lest interest
becomes payable, all this, according to him was
contradictory. Moreover, he submitted that subSection (1) of Section 17 of the Act, 1953, while
referring to speedy payment of price of
sugarcane purchased by the occupier, refers to
making of such provision in this regard as may
be prescribed. He says that there is no such
prescription anywhere in the Rules as to how
this is to be done.

14. He also submitted that sub-Section (3)
of Section 17 of the Act, 1953, in fact, is mainly
concerned with payment of interest and does not
define the time limit during which the sugarcane
dues are to be paid. Based on this, he submitted
that unbridled power had been vested in Section
17(4) to the Sugarcane Commissioner for
issuance of Recovery Certificate.

15. In this regard, he also referred to the
agreement referred in Form B and C mentioned
in the Order, 1954 and the provisions contained
in the said Order to submit that the company and
the cane growers can arrive at an agreement
fixing the time limit for payment of dues.
Therefore, the time prescribed in sub-Section (3)
of Section 17 of the Act, 1953 is not mandatory.
However, on being pointed out that Form B and
C do not deal with payment of sugarcane price,
no satisfactory reply could be given.

16. He further submitted that sugar is a
controlled commodity. The company can sell
only so much as is permitted by the Central
Government. Therefore, this is also a handicap
as the company cannot sell as much as it wants.
Sugar can't be sold in open market freely.
Moreover, the sale price of sugar is also
controlled. Minimum price is fixed by the
Central Government and the state advisory price
is fixed by the State Government which has to
be adhered by the company. He went on to say
that, in fact, the cost price of sugar is more than
the selling price. All this makes the entire
exercise unviable ultimately resulting in delayed
payment.

17. He also submitted that the land on
which sugarcane is being grown in the districts
involved in these bunch of petitions has grown.
In this regard, he referred to Gola Gokaran Nath
where according to him, 80% of the agricultural
land is being used for cultivation of sugarcane
and as only 2.87% farmers have approached this
Court, therefore, obviously, huge majority of the
sugarcane growers from whom sugarcane is
purchased by the Company accept the fact
11 All. Shailendra Kumar & Ors. Vs. State of U.P. & Ors.
383
situation, as they will be getting higher sale
proceeds from the sale of sugarcane even if
belatedly, vis-a-vis the proceeds from sale of
other agricultural produce. It is only a handful of
farmers who are agitated.

18. He also submitted that the principle of
''first supply, first payment' is absolutely correct
as it leaves no room for arbitrariness otherwise
the writ courts are flooded with writ petitions
and only those sugarcane growers are paid the
dues who get an order from the High Court.

19. He submitted that paying capacity is
not a parameter for reserving/ assigning an area
under Rule-22 of the Rules, 1954. Various
factors have been given and it is not permissible
in law to base such decision on any sole factor.
He also submitted that considering the financial
condition of the company, the area reserved for
the company has been reduced by the Sugarcane
Commissioner in the recent years by about 30%.
Therefore, the Sugarcane Commissioner, who is
an expert in the field, is adopting correct
approach in the matter by balancing the rights of
the company, vis-a-vis the sugarcane growers.

20. He submitted that any drastic measures
adopted by the opposite parties or any coercive
action directed by the High Court would result in a
situation where the factory may itself have to be
shut down which would benefit neither the
company nor the sugarcane growers and if the
factory does not function then the dues will be put
in jeopardy. No purpose would be served by
putting the Directors in prison if sufficient money
is not available as of now to straightaway pay the
dues in one go. Gradual payment is being made
from the Escrow account which is in the hands of
authorities. He referred to various affidavits filed
on behalf of the company in this regard in response
to various orders of this Court.

21. He also submitted that the Company
undertakes various measures under Rule 22 for
development of the area and even advances
loans etc to the sugarcane growers and no
complaint has been received in this regard as
regards the Company. Therefore, it is not only
about payment of sale proceeds but the
development of the entire area where the
sugarcane is produced and the welfare measures
taken by the company in this regard as such if
the factory is closed, it enures to nobody's
benefit.

22. He very fairly submitted that the
Company does not deny its liability to pay dues
to cane growers but considering the situation,
the same will be paid in a phased manner but
certainly by February-March, 2022.

23. He also referred to prevalence of
Covid-19 pandemic which had also resulted in
financial losses to the Company/ Occupier as
one of the additional reasons for non-payment of
dues within time. He submitted that these were
circumstances beyond the control of the
Company / Occupier. Therefore, they have to be
taken into consideration not only with regard to
the delayed payment but also with regard to
levying of interest in the context of waiver of
such interest.

24. Sri Mishra, learned Senior Counsel
relied upon the decisions reported in (1956) SCR
393 'Ch. Tikaramji vs. State of U.P.'; 2001
ALL LJ 741 'Govind Nagar Sugar Ltd. vs.
State of U.P.'; 2005 All LJ 2159 'DCM
Shriram Industries Ltd. vs. State of U.P.';
W.P. C. No.1680 of 2017 'L.H. Sugar
Factories Ltd. v. State of U.P.' decided on
14.02.2017 and (2020) 132 ALR 182 'Akram
Khan and Anr. vs. State of U.P' in support of
his submissions.

25. Sri Gaurav Mehrotra, learned counsel
appearing for the Cane-growers' Co-operative
Society supported the stand of the petitioners
although in the same vein he also stated that the
384 INDIAN LAW REPORTS ALLAHABAD SERIES
Sugarcane Commissioner had, in fact, adopted
the correct approach by opening an Escrow
account wherein substantial amount of the sale
proceeds from the sale of sugarcane by the
Company and some percentage of sale from the
by-products are deposited and the same are
being used for payment of cane dues of cane
growers.

26. He submitted that, in fact, though subSection (3) of Section 17 of the Act, 1953
referred to a period of fifteen days for payment
of sugarcane dues failing which interest @ 12
per cent per annum was payable, the Control
Order, 1966 issued by the Central Government,
specifically Clause 3(3) and 3(3-A), referred to
payment to be made within fourteen days of the
date of delivery failing which interest on the
amount due @ 15 per cent per annum for the
period of such delay beyond fourteen days
becomes payable. He stated that thus there is
contradiction in this regard as the Order, 1966
refers to 14 days as the period for paying the
dues to the cane growers whereas sub-Section
(3) of Section 17 of the Act, 1953 refers to a
period of fifteen days. The difference is also in
the percentage of interest payable.

27. Furthermore, he submitted that as
regards Form-B and C of the Order, 1954 are
concerned they do not deal with the question of
payment of price of sugarcane to the sugarcane
growers, therefore, the Company cannot rely on
the same. He submitted that it is the Control
Order, 1966 which will prevail over the Act,
1953 and/or the Control Order, 1954 made
thereunder or for that matter, the Rules of 1954
made thereunder.

28. He submitted that prior to the area
being reserved for a company it is required to
submit an estimate of requirements of sugarcane
under Section 12 of the Act, 1953. Therefore, it
is very well aware as to how much cane it is
going to purchase and what price it will have to
pay. Therefore, the Company should have made
provision for such payment in advance so as to
protect the interest of the sugarcane growers. He
submitted
that
every
sugarcane
factory/
company enjoys a monopoly in the area reserved
for it subject to certain exceptions which on the
one hand protects the interest of the company
and makes the enterprise viable and on the other
hand also protects the interest of the sugarcane
growers. However, in view of this, the sugarcane
growers cannot sell their sugarcane to any other
factory/ company other than the one for whom
the area has been reserved, unless the Cane
Commissioner orders otherwise.

29. He laid great emphasis on clause (f) of
the Rule 22 of the Rules, 1954 to submit that
this clause permitted the assessment of financial
condition of the company prior to reserving area
for it as this would go a long way in protecting
the interest of the sugarcane growers, meaning
thereby, if the company already has financial
capacity to pay the estimated dues before the
area is reserved for it then there will be no
question of delayed payment and the intent and
scheme of the Act, 1953 and/ or the Control
Order, 1966 would be achieved.

30.

He
submitted
that
Sugarcane
Commissioner was well within his powers to
open an Escrow account. The provisions of the
Act and the Orders referred hereinabove are not
to be interpreted to institutionalise delayed
payment of dues by occupiers but to protect
interest of cane growers. The dues of the
sugarcane growers for the crushing season 202021 which started in October, 2020 and ending in
July, 2021, have not been cleared as of now nor
have the dues been deposited with the Cane
growers' Co-operative Society.

31. He relied upon various decisions in
support of his contention reported in (2011) 3
SCC 139 'Offshore Holdings Private Limited
vs. Banglore Development Authorities and
11 All. Shailendra Kumar & Ors. Vs. State of U.P. & Ors.
385
Ors.'; AIR 1956 SC 676 'CH. Tika Ramji and
others etc vs. State of U.P. and others'; (2004)
5 SCC 430 'U.P. Cooperative Cane Union
Federation vs. West U.P. Sugar Mills
Association and others'; 1997 (9) SCC 207
'State of M.P. vs. Jaora Sugar Mills and
Ors.';
(2015)
6
SCC
363
'Kalyani
Maithivanan vs. K.V. Jeyaraj and others';
(2008) 4 SCC 720 'Government of Andhra
Pradesh and others vs. P. Laxmi Devi'; AIR
1967 SC 1910 'Sant Ram Sharma vs. State of
Rajasthan'; (2008) 4 SCC 171'Dhananjay
Malik and ors. vs. State of Uttranchal and
Ors; PIL No.67617 of 2014 'Rastriya Kisan
Mazdoor Sangathan (Regd) Thru Convenor
vs. State of U.P. & Another'; (1955) 1 SCR
799
'Saverbhai
Amaidas
vs.
State
of
Bombay'; Writ Petition (s) (Civil) No.805 of
2021 'Raju Anna Shetti & Ors. vs. Union of
India & Ors.'; (1989) 3 SCC 537 'Ratan Lal
Adukia vs. Union of India' and (2020) SCC
Online All 1039 'Kanikram and Ors vs. State
of U.P. and Ors.' in support of his contention.

32. Sri Parmanand Asthana, learned
advocate also appearing for the Cane-growers'
Co-operative Societies in some of the petitions
has submitted in his written submissions that it
is the co-operative society which enters into
agreement with the sugar factory in Form-'C'
mentioned in the Control Order of 1954 for
supply of sugarcane to its members and the
sugar factory makes payment of the cane price
of sugarcane supplied by the society directly to
the cane growers in their account through
RTGS/ NEFT. The petitioners, therefore, cannot
independently file instant writ petition for
payment of cane price of sugarcane supplied by
them
through
Cane-growers'
Co-operative
Society. The petitions by cane growers are thus
not maintainable. He has supported the payment
of cane dues to the farmers on the principle of
''first supply, first payment' and submitted that
out of turn payment should not be allowed nor
should the que be broken as ultimate sufferers
would be the small farmers. He has relied upon
two Division Bench judgments rendered by this
Court in the Writ Petition No.866(M/B) of 2019
'Ram Keval vs. State of U.P. and others' and
Writ Petition No.30937 (M/B) of 2018 'Ram
Singh vs. State of U.P. and others' in support
of his contention that these writ petitions by
cane growers are not maintainable.

33. In response, learned counsel for the
petitioner submitted that the Company is
flourishing and is insensitive to the financial
needs of the sugarcane growers. He submitted
that some of the farmers have committed
suicide. However, he could not place before this
Court any material in this regard. He submitted
that the legal position has already been settled
by this Court in the case of Kanikram (supra),
Rastriya Kisan Mazdoor Sangathan (supra),
Jaypal Singh (supra), therefore, nothing was
required to be adjudicated so far as the legal
position is concerned. The Cane-growers'
Cooperative Society having failed to seek legal
redress, the petitioners-cane growers are entitled
to file this petition seeking their rightful dues.
The provisions of Section 17 being mandatory,
the Company had no option but to pay the entire
amount of dues of the petitioners within the
fifteen days mentioned in sub-Section (3) of
Section 17 of the Act, 1953 and not having done
so, the Sugarcane Commissioner is under an
obligation to issue recovery certificate to the
concerned Collectors who in turn are under an
obligation to recover the entire amount from the
Company as arrears of land revenue and pay the
same to the cane growers, but this is not being
done and interest of the sugarcane growers is not
being protected and served by the official
opposite parties nor by the Company. He further
alleged violation of Article 14 and 21 of the
Constitution of India. According to him, the
Escrow account mechanism evolved by the
Sugarcane Commissioner is in the teeth of the
mandatory provisions contained in the Act,
1953. The Company earns hundreds of crores
386 INDIAN LAW REPORTS ALLAHABAD SERIES
merely by delaying payment as it does not pay
interest on the said delayed payment.

34. It needs to be mentioned that as per the
records, crushing of sugar cane started in
October/ November, 2020 and ended sometime
in March, 2021 in respect of the five mills which
are involved in these petitions.

35. We have heard learned counsel for the
parties and perused the material available on
record.

36. First and foremost, as regards
contention of Sri Parmanand Ashthana, learned
counsel appearing for Cane-growers' Cooperative Society in some of the writ petitions
that the writ petitions by the sugarcane growers/
farmers for payment of dues directly before this
Court was not maintainable, it is surprising that
such an objection is coming from learned
counsel for Cane-growers' Co-operative Society
as in view of the admitted factual position that
the cane dues have not been paid as also the
Company's admission of its liability to pay such
dues, it is a question to be pondered by the
Cane-growers Co-operative Society as to why it
has not itself come forward before the Court
raising such a grievance and even if, for some
reason, it has not done so, why should it oppose
the petitions filed by the sugarcane growers who
are claiming their rightful dues to which they are
entitled for sale of sugarcane to the company?
especially when, these sale proceeds are the
source of their livelihood. This plea at the behest
of Sri Asthana is not acceptable at least in the
facts of the present case where the Company
admits to its liability, and as the Co-operative
Societies are also party in these proceedings.

37. Sri Gaurav Mehrotra, learned counsel
appearing
for
Cane-growers'
Co-operative
Society in other petitions, has very fairly stated
that he was not raising any such objection
considering
the
interest
of
the
farmers.
Furthermore, we find that the decision of this
Court in Ram Keval (supra) case relied by Sri
Asthana, learned counsel, does not contain any
reason for holding the petition to be not
maintainable it only refers to a decision rendered
in P.I.L.