INDIA SUGARS AND REFINERIES LIMITED HOSPET BELLARY DISTRICT Vs. SECRETARY TO GOVERNMENT, COMMERCE AND INDUSTRIES DEPARTMENT BANGALORE

JUDGEMENT

(1.) THE bone of contention between the petitioner and the respondents is a food stuff called sugar which has turned out bitter due to the insistent fight between the growers as well as the manufacturers. THE core question which falls for consideration before this Court in this writ petition is whether the State is required to implement the relevant provisions of the Sugarcane (Control) Order, 1966, and also the relevant provisions of the Karnataka Sugarcane (Regulation of Distribution) (Hospet) Order, 1974 (for short, the Hospet Order) which would relate to the petitioners sugar factory. THE matter arises in the following manner. THE petitioner is a sugar factory. Respondents 1 to 6 according to the petitioner are the authorities who have to implement the statutes and rules. Respondent 7 is a Raitha Sangha which according to them takes care of several sugarcane growers in the area which is called as reserved area from which the petitioner-factory draws sugarcane and respondents 8 to 10 are the recipients of sugarcane from the area reserved for the petitioners sugar factory. Respondents 11 to 13 are growers. THE petitioner-company was established in the year 1933. According to them, it has crushing capacity of 2500 tonnes per day. It is the case of the petitioner that it has been crushing sugarcane since last 73 years i.e., from the date of its inception. Such sugar factory has a reserved area as defined under the Hospet Order. THE sugarcane is supplied from the said area which is disclosed in Schedule I as per Clause 3(2) of the said Hospet Order. It appears everything was running smoothly till certain point of time i.e., till the year 2002. THEreafter, it appears acrimony started between the petitioner and the sugarcane growers. It appears there was a fall in sugar price in the open market during the year 2002, 2003 and 2007. Several sugar factories had a set back. But, however, the petitioner-company was able to discharge about 16 crores loan to the KSSIDC and BDCC Bank during the sugar seasons 2004-05 and 2005-06. THEy would claim that it is not in arrears for the previous sugar seasons. It is not in dispute that the petitioners are due to sum of Rs.1.48 crores for the season 2002-03, a sum of Rs.75 lakhs for the season 2003-04 and there are no dues for the seasons 2004-05 and 2005-06. For the season 2006-07, the dues are to the tune of Rs.6.3 crores. It is submitted at the bar by the petitioner that insofar as two years i.e., 2002-03 and 2003-04, the mater is pending adjudication before the Apex Court. Insofar as the amount due for the year 2006-07, the matter is pending before the Cane Commissioner. To appreciate the controversy in question, one is required to refer to certain provisions of the Essential Commodities Act, 1955 (for short, the Act) and the Sugarcane (Control) Order, 1966 (for short, the Control Order). It is not in dispute that sugar is treated as an essential commodity. THE statement of objects and reasons would indicate that the Act would apply to two broad categories viz., (a) coal, textile, iron and steel, paper, etc., which are products of industries under Union control, and (b) foodstuffs, cattle fodder, etc., which are not products of such industries. THE definition of the sugar is also found in the Act which would define it as any form of sugar containing more than ninety per cent, of sucrose, including sugar candy and other kinds of sugar. THE powers to control production, supply, distribution, etc., of sugarcane is to be found in Section 3 of the Act. THE penal provisions for violations of the statutory provisions of the Act are to be found in Section 7 and 8 of the Act. Before adverting to the other provisions relating to sugar control as well as the Hospet Order, it is necessary to note the contentions of Mr. Shantharaju, learned Senior Counsel appearing for the petitioner, Mr. V.P. Kulkarni, learned Counsel appearing for respondent 7, Mr. Andanimath, learned Counsel appearing for respondent 9 and Mr. R.K. Hatti, learned Government Pleader appearing for respondents 1 to 6.

(2.) MR. Shantharaju, learned Senior Counsel at the outset submits that it is not in dispute that the sugar is an essential commodity as defined under the Act. The production of sugar is on the basis of the sugarcane supplied by the growers. Indeed, certain provisions of the Act are already referred to earlier but however he submits that the Control Order, would take over from the essential commodities as to the manufacturing of the sugar. He would press into service clause regarding the fixation of price as defined under Clause 2(g) and the reserved area under Clause 2(j). The minimum price of sugarcane payable by producers of sugar is found at Clause 3 and Clause 3(2) would say that no person shall sell or agree to sell sugarcane to a producer of sugar or his agent, and no such producer or agent shall purchase or agree to purchase sugarcane, at a price lower than that fixed under sub-clause (1) and sub-clause (3) would indicate that where a producer of sugar purchases any sugarcane from a grower of sugarcane or from a sugarcane growers co-operative society, the producer shall, unless, there is an agreement in writing to the contrary between the parties, pay within fourteen days from the date of delivery of the sugarcane to the seller or tender to him the price of the cane sold at the rate agreed to between them. He would also press into service sub-clause (8) of Clause 3 regarding the mode of recovery if the amount due to the sugarcane growers is not paid. He would also press into service Clause 5-A which would relate to additional price for sugarcane purchased on a specific date. According to MR. Shantharaju, learned Senior Counsel, Clause 6 of the Control Order on which the entire gamut of the case would revolve inasmuch as power to regulate distribution and movement of sugarcane. He would submit that every sugar factory will have a reserved area having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar. Thus, according to him, pursuant to the Hospet Order, certain area is earmarked for the petitioners sugar factory. The grievance of the petitioner is that they are not getting enough sugarcane from the growers and the same is being siphoned and being made use of by respondents 8 to 10 inasmuch as sugarcane which was legitimately that of the petitioner is stealthily diverted to these factories. Thus, he submits that there is a clear violation of the statutory provisions of the Act, the Control Order and also the Hospet Order. Hence, he submits that a direction in the nature of a writ of mandamus be issued to the Competent Authority to deal with this matter and to enforce the provisions of the Act. Indeed, MR. Shantharaju, learned Senior Counsel would also contend that all outstanding dues which are payable to the sugarcane growers is already been paid and if there is any amount due, the matter is pending adjudication before the Competent Authorities. But, however, his main submission is that the statue and orders are required to be implemented by the machinery of the State.

(3.) MR. Kulkarni, would submit that in the absence of an agreement between the company as well as the growers, the question of supplying the sugarcane from the reserved area to the petitioner-factory does not arise.