SATYAJIT SINGH MAJITHIA Vs. STATE OF U P

JUDGEMENT

(1.) -By the present writ petition under Article 226 of the Constitution of India, the petitioners have come up with two-fold prayers : (i) to quash the first information report dated 22.4.1997 appended as Annexure-1 to the writ petition in Case Crime No. 305 of 1997, under Sections 17 (i) and (iii) of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (hereinafter called as the Act) and Section 3/7 of the Essential Commodities Act, P.S. Chauri Chaura, district Gorakhpur and (ii) to issue a writ or direction in the nature of mandamus commanding the respondent No. 3 not to arrest the petitioners in pursuance to the aforesaid first information report and also not to investigate the case on the basis of the said report.

(2.) M/s. Saraya Sugar Mills Limited, a Company incorporated under the Companies Act carries on business of manufacturing sugar by "Vacuum Pan Process" in its sugar mills situated at Sardarnagar, district Gorakhpur. Petitioner No. 1 Satyajit Singh Majithia is its Managing Director, Sri Girijit Singh Majithia, petitioner No. 2 is its Senior Managing Director, petitioner No. 3 Sri V. K. Verma is its ex-occupier, petitioner No. 4 Sri S. K. Gupta is its present occupier and petitioner No. 5 Dr. S. K. Bhaskaran is its Vice-President. According to the allegations made in the first information report , during the crushing year 1995-96 the said Company purchased sugarcane worth Rs. 7,25,56,707.92 paise from Sahkari Ganna Vikas Samiti Limited, Sardarnagar, Gorakhpur. Till 19.4.97, the Company paid only Rs. 6 crore and 39 lacs to the said Sahkari Ganna Vikas Samiti. A sum of Rs. 86,58,707.92 paise was out-standing for the crushing year 1995-96 which ended on 1.6.96. In view of clause 3 (A) of the Sugarcane (Control) Order, 1966, the Mill was required to make payment of the sugarcane purchased by it within 15 days but on 15.6.96, a sum of Rs. 5,03,58,707.92 paise was outstanding and despite order dated 25.6.96 passed by the Sugarcane Commissioner, Lucknow, the entire payment was not made and still a sum of Rs. 86,58,707.92 paise was outstanding. During the crushing year 1996-97, sugarcane worth Rs. 5,14,41,460.00 was purchased by the Company but no payment was made by the Company. Thus, non-payment of the purchase of price by the Company within the stipulated period under sub-clause 3 (4) of the Sugarcane (Control) Order, 1966 is clear violation of the provisions of the said sub-clause 3 (A) and of Section 17 (i) and (iii) of the Act which is punishable under Section 3/7 of the Essential Commodities Act, 1955. The Company is also guilty of non-compliance of the order dated 25.6.96 of the Sugarcane Commissioner and has thus violated condition No. 4 of the licence issued to it under the U. P. Vacuum and Sugar Factories Licensing Order, 1969 which is also punishable under Section 3/7 of the Essential Commodities Act.

(3.) RESPONDENT No. 2, who is Cane Development Inspector and who had lodged the first information report in his counter-affidavit stated that the Sugarcane (Control) Order, 1966, is issued by the Central Government in exercise of powers conferred by Section 3 of the Essential Commodities Act and simultaneously the U. P. Government has issued U. P. Vacuum Pan Sugar Factories Licensing Order, 1969. Contraventions of the provisions of these Control Orders and conditions of the licence are punishable under the Essential Commodities Act, the petitioners admittedly, are manufacturing sugar by Vacuum Pan process and as such the petitioners' Sugar Mill or Factory is governed by the provisions of U. P. Vacuum Pan Sugar Factories Licensing Order, 1969. That the provisions of Rule 120 of the Rules framed under the Act are applicable to launching the prosecution in the Court and not to initiation of the investigation by lodging of the first information report ; that respondent No. 2 has been appointed as Cane Development Inspector in view of the provisions of Section 2 (jii) of the Act and has been authorised to lodge the first information report ; that the Factory issued a "parchi" to the cane-growers at the time of purchase of the sugarcane and in the said 'parchi' the price is shown at the rate of Rs. 70 per quintal and thus there was an agreement to make payment at the rate of Rs. 70 per quintal. Section 10A of the Essential Commodities Act makes every offence punishable under the Act as cognizable and therefore, the police is not barred from investigating the case.