SUBAS CHANDRA SAHOO Vs. STATE OF ORISSA

JUDGEMENT

(1.) The petitioner who is the General Secretary of Chini Silpa Sharmik Sangha, Sunapal, Baramba, Cuttak has challenged the legality of the sale and purchase agreement with regard to the assets and business of Co-operative Sugar Industries Limited, Baramba annexed to the writ petition as Annexure-10 and has also prayed for a direction to the opposite parties 1, 2 and 3 to execute the sale deed with respect to the above sugar industry in favour of the employees union on the same terms and conditions as has been settled, on which the said industry is to be sold to Balaji Sugars and Allied Industries Ltd. opposite party No. 5. It has also been prayed by the petitioner to direct investigation into the matter of sale of the above industry by the C.B.I.

(2.) Though this matter was listed for fresh admission on June 19, 2006, but as pleadings are complete, learned counsel for the respective parties advanced argument on the merit of the case in extenso. We, therefore, after conclusion of the hearing, reserved the matter for delivering the Judgment. However, on June 20, 2006, learned counsel for the petitioner made a mention before us that as the matter was listed for fresh admission, the same should be listed under the heading "To be mentioned" for further hearing. He also submitted that he is filing a memorandum to that effect. Since the matter was already heard at length on June 19, 2006, we did not feel that there is any necessity - to list the matter further under the heading "To be mentioned.''

(3.) The facts disclose that with the co-operation of the State Government, the sugar Industry of Baramba in the Co-operative : sector was established to encourage the local farmers to adopt alternative crop, i.e. sugar cane cultivation in place of paddy as the land in the locality was fit for cultivation of sugar cane. Accordingly, Baramba Co-operative; Sugar Industries Limited with few members was registered in the year 1982 as a Co-operative Society and thereafter on preparing the feasibility report etc. a Sugar Industry of 1250 TCD capacity extendable to. 2000 TCD was established by the aforesaid' Co-operative Society. The State Government financed the said industry in shape of share capital, loan and as guarantor for obtaining loan from other financial institutions/banks to the. tune of 99% of the total investment for running' the said industry. Unfortunately, the said sugar industry failed to be viable and incurred heavy losses which led to financial burden on the State Government and the financial institutions banks pressurised the Government to clear their dues for which the Government was a guarantor. A decision was thereafter taken in the year 2000 to privatise the said sugar Industry so that it can run and the local farmers can be benefited as per Section 14-B of the Orissa Co-operative Societies Act (hereinafter referred to as 'the Act'). On compliance of the provisions of Section 14-B of the Act, Shakti Sugar Limited which is a Tamil Nadu based company, took over the Industry initially for a, period of ten years by executing an agreement on January 9, 1991. The said period was subsequently extended till September 30, 1994. Shakti Sugar Limited failed to make payment of the amount as per the agreed conditions and finally left the industry unilaterally on September 30, 1994. Consequent thereto, cases filed by various financial institutions and banks, such as, IFCI, ICICI, IDBI and SBI for recovery of their dues were settled between the said institutions and the Government and the Government paid their dues whereupon various proceedings pending before the Debts Recovery Tribunal and other adjudicating forums were disposed of. Thus, the industry became free from financial liability to the financial institutions. After such development, a decision was taken to sell the unit and the opposite party No. 5 being the successful bidder was selected in the process of sale.