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Judgment
S.P. Srivastava, J.—Being aggrieved by an order passed by the State Government dismissing the appeal of the Petitioner a sugar producer and affirming the order passed by the Cine Commissioner assigning the purchase centre ''Tinich'' falling within the area reserved for the Petitioner, to Babhnan Sugar Mill, Respondent No. 3 another sugar producer, it has now approached this Court seeking quashing of the appellate order and a direction requiring the State Government and the Cane Commissioner to allow the Petitioner to purchase sugar cane from the cane purchase centre ''Tinich'' from the willing cane growers for the crushing season 1993-94.
The facts, shorn of details and necessary for the disposal of this case He in a narrow compass By an order dated 1-11-93 this Cane Commissioner, after taking Into consideration the crushing capacity of the Sugar Mills, availability of the sugar cane, requirement of sugar production and other factors had reserved the areas having purchase centers Mildwar, Tinich (Rail), Kanchanpur Upathi, Athdama. Bhitehara, Ruchauli, Chandradeep Ghat, and Piraila in favour of the Basti Sugar Company Limited Walterganj subject to the assignment of the purchase centre ''Tinich'' to Babhnan Sugar Mills.
It may be noticed that as is evident from the Circular issued by the Cane Commissioner dated 2-7-93, a true copy of which has been filed as Annexure 4 to the petition the order dated 2-7-93 had been passed on the estimate that duration of the crushing season 1993-94 would be 180/200 days and during the season the total requirement of sugar cane of the Petitioner would be 20.70 lac quintals.
It appears that in view of some stay order issued by the Apex Court, the functioning of the Petitioner sugar company was stopped. In this view of the matter, considering the interest of the cane growers some alterations were made in the order dated 1-11-93 assigning various centers falling within the reserved area for the Petitioner sugar Mill to others. Subsequently, when the stay order was vacated, the Cane Commissioner passed another order on 27-11-93 whereby all the cane purchase centres referred to hereinbefore excepting ''Tinich'' were restored back to the Petitioner.
The Petitioner, appears to have frit aggrieved by the order assigning the purchase centre Tinich'' in favour of Babhnan Sugar Mill and therefore, challenged the same by filing an appeal before the State Government which remedy stands provided u/s 15(4) of the U.P. Sugar Cane (Regulation of Supply and purchase) Act, 1953 read with Rule 213 of the Rules framed thereunder.
In the appeal referred to above the Petitioner interalia, emphasised that the purchasing centre ''Tinich''-a rail centre was one of its major cane purchasing centre that considering the cane requirement of its factory which was already short of sugar cane supply the same was aggravated by snatching away its Tinich cane purchasing centre, that this ''purchase centre Tinich'' stood reserved for the Petitioner since its inception and during 1991-92 the Petitioner had 3.54 lac quintal of sugar cane from this centre and had spent huge amounts in development of this area; that the Petitioner had already made arrangement for the purchase of cane at this centre and was maintaining railway siding for the purchase of sugar cane which was directly brought from this centre to the factory of the Petitioner and it was paying approximately, 3.00 lacs every year on maintenance of railway siding besides Rs. 3. 00 lac for conversion of meter gauge to broad gauge in the year 1986-87 had been incurred by it.
The Babhnan Sugar Mill, the assignee, contested the appeal filed by the Petitioner asserting that the Petitioner had himself set forth its requirement of sugar cane in the season at a figure of 19.80 lac quintals and the District Cane Officer bad estimated it at a figure of 13 00 lac quintals. It was also asserted that the claim of the Petitioner that it had increased its crushing capacity to the extent of 1100 tons per day was not correct. It was not disputed that the Cane Commissioner had asserted the requirement of the Petitioner to be for 20.70 lac of sugar, cane but the correctness of this estimate was disputed. It was claimed that the requirement of the Babhnan Mill was much more and even with the assignment of ''Tinich'' centre this requirement could not be satisfied. Various other objections were taken asserting that the order dated l-U-93 did not require change so as to restore the ''purchase centre ''Tinich'' back in favour of the Petitioner.
The State Government disposed of the appeal vide its order dated 6-1-94 whereunder observing that tin purchase ''centre Tinich'' is a centre of considerable importance having a capacity of supplying sugar cane to the extent of 5 lacs quintals, it came to the conclusion that since the Walterganj Sugar Mills payments towards cane price have not been satisfactory and since at the end of crushing season 1992-93 a huge amounts of Rs. 350 lacs towards cane purchase remained unpaid by it out of which some amount was sill due and the cine purchase centre Tinich is near to Babhnan by road as compared to Walterganj, there was no justification for any interference in the order of the Cane Commissioner consequently the appeal was dismissed.
I have heard Sri Sudhir Chandra, the learned Senior Advocate in support of the writ petition and Sri Rakesh Dwivedi. learned Additional Advocate General representing the State and the Cane Commissioner and Sri U.S. Awasthi, the learned Counsel representing the other contesting Respondent and I have also perused the record carefully.
The learned Counsel for the Petitioner has strenuously contended that the impugned order hat been passed in an arbitrary manner proceeding on sentirely incorrect assumptions which has resulted in manifestly erroneous conclusion It has been pointed-out that as is evident for the certificate dated 20-9-93 issued by the Secretary Sahkari Ganna Vikas Samiti Limited Tinich Basti, a true copy of which has been filed as Annexure 8 to the writ petition there were no outstanding dues towards cane price against the Petitioner by that date showing in unmistakable terms that by the date 1-11-93 when the order was passed by the Cane Commissioner there could be no basis for assuming that the Petitioner was in arrears so far as pay amount towards purchase price of cane was concerned It has further been pointed out that the fact that all the payments have been made by the Petitioner is not disputed by the contesting Respondent and the only thing asserted is that the payment was made late. It is also asserted that the specific distance by rail from the Petitioner''s factory to Tinich centre is only 8 K.M. and further that Babhnan Sugar factory even by road is not close into Tinich and it is pointed out that by road the distance is 16 K.Ms. These facts are not disputed as in paragraph 38 of the counter-affidavit the averments made in paragraph 35 of the writ petition so far as distance factor is concerned are not denied, and applying the principles underlying order VIII Rule 5 of the CPC the assertion made by the Petitioner to the effect that the distance by rail from the Petitioner''s factory to ''Tinich'' is only 8 KM. and the distance by road between the Tinich centre and Babhnan sugar mill Is 16 K.M. will be deemed to have been admitted. Further the fact that the Petitioner was maintaining the railway siding to facilitate the transport of sugar cane will also be deemed to have been admitted. It is also contended that the assertion made in paragraph 35 of the writ petition to the effect that the supplies from Tinich rail centre constitute 1/4th of the supplies required by the Petitioner has not been denied specifically in the counter-affidavit and this assertion of fact is also habie to be deemed to have been admitted. The learned Counsel has further urged that the impugned order has been passed without applying the mind to the real controversy in issue and without understanding, the real purpose and Import of the term ''assigned'' as used in sections 14 and 15 of the Act and the Impugned order stands vitiated on account of a wrong approach.
The learned Additional Advocate General while supporting the impugned order has asserted that the impugned order is au order of affordance and since the order passed by the Cane Commissioner had been passed after taking into account all the relevant factors as indicated in Rule 22 of the Rules framed under the Act and that too on an appraisal of evidence, no ground for Interference by this Court is made out and the Petitioner cannot be permitted to assail the findings on questions of fact which stand affirmed in appeal, specially at this late stage when the crushing season Is quite close to its end.
The learned Counsel representing the other Respondent has also supported the impugned order on the grounds urged by the learned Additional Advocate General and has further tried to justify the impugned assignment on the ground that taking Into account the total requirement of the Respondent sugar mill and the financial condition, of the Petitioner''s mill in the past no Interference in the impugned order was called for. It has been further strenuously urged that all the relevant factors have been taken into account by the Cane Commissioner and the order of assignment in favour of the Respondent Mill did not require any alteration at all. It is, therefore, urged that the writ petition be dismissed as no ground far the intervention of equity at this stage is made out while exercising the extraordinary jurisdiction under Article 226 of the Constitution of India.
I have given my anxious consideration to the rival contentions of the learned Counsel for the parties.
It may be noticed at this stage that a similar controversy as is Involved in the present case was raised by the Petitioner in the crushing season 1992-93 wherein pursuant to an order of this Court dated 20-11-92 the appellate authority bad while disposing of the appeal of the Petitioner, remanded the case to the Cane Commissioner vide its order dated 26-12-92. In the said order it was observed that the Cane growers had no objection to the supply of sugarcane to any of the rival sugar mills and the appellate authority in such a circumstance had expressed an opinion that this fact was pf no significance. After remand the Cane Commissioner had upheld the assignment of Tiuich purchase centre in favour of Babhnan sugar mill. This order was challenged in writ petition No. 9643 of 1993 filed on 23-3-93 daring the pendency whereof the crushing season came to an end and a fresh order we the next season 1993-94 was passed as indicated hereinbefore.
Considering the facts and circumstance of the cue and the sub-missions made by the learned Counsel, the question which arises for consideration is as to whether the impugned order stands vitiated in law so as to warrant an interference by this Court in the present proceedings.
Under the provisions contained in the U.P. Sugarcane (Regulation of Supply and purchase) Act, 1953, the words ''assigned area'' ''cane'' ''reserved area'' and ''crushing season''. stand defined. The ''assigned area'' according to Section 2(a) of the Act means an area assigned to a factory u/s 15 of the Act, ''cane'' according to Section 2(c) means sugarcane intended for use in the factory or Gur, Rab, or Khaudsari sugar factory unit, ''reserved area'' according to Section (n) shall mean the area reserved for a factory under an order of reservation of sugar cane area made under Rule 125-B of the Defence of India Rules, 1962 and when no such order is in force the area specified in an order made u/s 15 of the Act, the ''crushing season'' according to Section (1) of the Act means a period beginning on the 1st October in any year and ending on the 15th July next following.
The provisions contained in Section 12 of the Act stipulate that the Cane Commissioner may for purposes of Section 15 order by require the occupier of a factory to furnish in the manner and by the date specified in the order to the Cane Commissioner an estimate of the quantity of cane which will be required by the factory during such crushing season or crushing reasons as may be specified in the order and it further stipulates publication thereof with or without modification which estimate can also be revised. The provisions contained in Section 14 of the Act stipulate that the State Government may for purposes of Section 15 by order provide for a survey to be made of the area proposed to be reserved or assigned for the supply of cane to a factory. The provisions contained in Section 15 of the Act stipulates that the Cane Commissioner may after consulting the factory and Cane Growers Cooperative Societies reserve any area called reserved area and assign any area called assigned area for the purposes of supply of cane to a factory in accordance with Section 16 during one or more crushing seasons as may be specified and may likewise at any time cancel, such order of alter the boundaries of an area so reserved or assigned. It also provides that when any area has been declared reserved for a factory, the occupier of such factory if so directed by the Cane Commissioner purchased all the cane grown in that area which is offered for sale to the factory. It further stipulates that where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner. The provisions contained in Section 16 of the Act stipulate that the State Government may for maintaining supplies by order regulate the distribution, sale or purchase of any cane in any reserved or assigned area and purchase of cane in any area other than a reserved or assigned area, and may prescribe the quantity of cane to be supplied by each cane grower or Cane Growers Cooperative Society in such area to the factory for which the area has been reserved or assigned and the manner in which the cane grown in the reserved area or the assigned area shall be purchased by the factory for which the area has been so reserved or assigned etc. The provisions contained in Section 17 of the Act stipulate imposition of various liabilities on the factories.
A perusal of the various provisions of the Act clearly indicate that while regulating the supply and purchase of the cane for the sugar factories, the Interests of not only the cane growers and the sugar producing factories but Interests of the sugar producing factories interse also has to be protected, and further healthy relations between occupiers and managers of factories, cane growers, Cane Growers Cooperative Societies, Cane Development Council has also to be secured. These provisions have the effect or creating various rights and imposing various liabilities on the sugar factories and this cane growers.
On a considerations of the various provisions of the Act and the scheme underlying them as well as the rules framed thereunder, it seems to me, that the real the real purpose Is to ensure the maintenance of reasonable supply of sugar cane to the sugar producers in order to secure n reasonable return on their over all production and investment provided the units are run economically, securing on the other hand the interest of the cane growers. The provisions of the Act read together with the Sugar Cane Price Control; Order make it abundantly clear that the cane price has to be fixed for determining the fair cost of the production of sugar. In order to maintain regular supply of sugar it is necessary to have a regular supply of sugar cane. The supply of sugarcane depends upon the area actually brought under sugarcane cultivation. The cultivation should have necessary Incentive to grow sugarcane instead of other crops. It is in this view of the matter that the minimum price for the sugarcane which the producer of sugar should pay to the sugarcane grower on a future date has to be fixed.
The reservation or assignment of an area as contemplated under the Act requires a detailed exercise involving the preparation of estimates of the availability of cane, Its quantity, extent of expected recovery of sugar, effective duration of the crushing season, quantity of sugarcane crushable by sugar factories, the estimates of sugar production and likely working conditions that will prevail in the particular season. In addition to the factors enumerated in Rule 22 of the Rules framed under the Act which stipulates that while reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory u/s 15 the Cane Commissioner may take Into consideration, the distance of the area from the factory, facilities for transport of cane from the area the quantity of cane supply for the area to factory in the -previous year, previous reservation and assignment orders, the quantity of cane to be crushed in the factory, the arrangements made by the factory in previous year for payment of purchase tax, cane price and commission and the views of the Cam: Growers Cooperative Societies of the area and the building made by the factory in developing the reserved or assigned area.
The order of the Cane Commissioner dated 1-11-93 was based on the estimates as Indicated herein before and had been passed before the crushing season started. The facts and figures on the basis of which these estimates are prepared before the start of the crushing season may vary during the progress of the season and the actualities and the developments which come to light with the progress of the crushing season and have a bearing on the estimates on the basis where of the orders regarding reservation and assignment are passed before the beginning of the season cannot be ignored. In fact the determination of the areas to be reserved and assignment to be effected has to be a continuous process depending upon the exigencies of the situation and the changing factors which come to light with the progress of the crushing season. The factors on which the estimates are chalked out before the beginning of the crushing season may very during the progress of the crushing season and in order to adjust the equities such the developments which take place and new factors which come to light if brought to the notice of the concerned authorities may justify alterations and modification in the boundaries of the reserved area or may warrant change in the assignment ordered at the beginning of the season The scheme of the Act vests the authorities concerned with ample jurisdiction to vary or alter the reserved or assigned area during the currency of the crushing season to meet the exigencies of the situation. This is obvious from what has been specifically provided for in Sections 15 and 16 of the Act.
In the present ease that is obvious is that on the basis of estimates the Cane Commissioner had, before the start of crushing season reserved an area comprising of nine purchase centres including ''Tinich'' in favour of the Petitioner but had assigned the purchase centre Tinich to the Respondent sugar company. The word ''assign'' is a word of widest significance in respect to the nature of the transfers to which it relates. It was so observed by a Full Bench of this Court in its decision In the case of Behari Lal v. Mohammad Muttaki 20 ILR 482. It can safely be held that to assign means transfer from ''A'' to ''B'' of one or more obligations that ''A'' owed to ''B'' It vests in the assignee the rights and remedies in respect of the subject matter. In the context of the various provisions of the Act and in view of the scheme underlying it the ''assignment'' contemplated u/s 15 or 16 of the Act has to be of a temporary case or nature to begin with, which, in the exigencies of the situation may be continued during the entire period of the crushing season or can be done away with all depending upon the developments which take place during that period. The fact remains that once an area is reserved for a particular factory, in the absence of any special reasons justifying the adoption of this temporary measure of assignment of an area carved out of the reserved area in favour of a factory to a factory other than the one foe whose benefit the area had been reserved there can be no justification for depriving the factory for whom the area had been reserved from the benefits accruing under the reservation order made in its favour. It is Incumbent upon the authorities concerned to ascertain from time to time and specially when called for by the aggrieved party to find out whether the special circumstances justifying the assignment still continue to exist so as to maintain the continue there of the assignment and continue depriving a factory of the benefits of the entire area reserved In its favout. It seems to me that it is the duty of the answering Respondents while carrying out the public law function to hold the balance fairly between the competing sections of the public the cane growers in the present case and the sugar manufacturers producer on the one hand and the sugar producers inter-se as well on the other hand. A delicate, just and equitable balance has to be struck protecting the competing interests of the sugar producers and cane growers, and even sugar producers inter-se and at the same time ensuring that public in general does not suffer on account of any fall in the production of sugar. While striking the aforesaid just and equitable balance it has to be kept in mind that the economic viability of the sugar factory/sugar producers is not unduly jeopardised.
It has to be emphasised that the above aspect cannot be lost sight of as the law does not operate in a vacum and the language of a statutory provision is not a static vehicle of ideas and concepts. It cannot be interpreted without taking into account the social, economic and political setting is which it is intended to operate The provisions of the statute must be invested with a meaning which will harmonies the law with the prevailing concepts and values and make it an effective instrument of delivering justice.
It may further be emphasised that where an Act imposes a duty it is always implied that unless the contrary intention appears the duty is to be performed from time to time as occasion arises. As an appellate authority, being vested with the jurisdiction which is coextensive with that of the Cane Commissioner, the Respondent No. 1 ought to have taken into account all the factors Indicated hereinabove in order to arrive at a; correct conclusion and arrangement should have been secured based on objective criterion founded on relevant material.
I am further of the view that the factors mentioned in Rule 22 of the Rules framed under the Act only provided guidelines which are not exhaustive but are only enumerative. Further any single factor mentioned therein cannot be taken to be conclusive but a cumulative effect of all the factors has to be taken into account along with the other relevant criteria and material including the developments which take place during the currency of the crushing season in order to arrive at a conclusion while striking a delicate, just and equitable balance between the competing interests in the matters relating to reservation of an area or assignment of an area as indicated herein before.
In the facts and circumstances of the case, taking into considerations the reasoning contained in my decision in Civil Misc. Writ Petition No. 1921 of 1991 R.C. Bajpai and Co. v. Rent Control and Eviction Officer and Ors. decided on 30-3-94, it is clear that the principles enshrined in orders VIII Rule 3 and will Rule 5 of the CPC can be sefely applied to proceedings under Article 226 of the Constitution of India and applying them to the facts and circumstances of the present case and taking into account the nature of the averments made in para 35 of the affidavit and para 36 of the counter affidavit, the fact that the Walterganj unit had spent considerable amount of money for the facilitation of transport by making a railway siding as a result of which Tinich cane purchasing centre falls within 8 K.Ms. distance from the Petitioner''s factory whereas it is at a distance of 16 K.Ms. from Babhanan Sugar Mill by road have to be deemed to be admitted. Further the fart that by 20-9-93 all the dues against the Petitioner stood paid up has also be accepted.
There is an other aspect which cannot be lost sight of The reasonableness of the order passed by the State Government can be tested by finding out whether or not the matters mentioned in Rule 22 of the Rules as also the above aspects referred to herein above have been generally considered by the government. The court will not however, scrutinise the extent to which the matters have been taken into account There may he sufficient compliance with the requirement of law if the government has addressed its mind to the relevant factors or any other factor which the government may consider relevant and has come to a conclusion which any reasonable person placed in the position of the government would have come to.
It seems to me that the appellate authority has not approached the case from a correct perspective and has based its conclusion on factors which had either lost their significance or were irrelevant. It has further derived support from the facts which are not borne out from the record and its conclusions are based on wrong assumptions. It further seems to me that the appellate authority has committed to consider the real implication arising under the ''assignment'' as envisaged under the Act and the rules framed thereunder. It has further committed to take into consideration the vital factors having a material bearing on the controversy involved in the case.
In the circumstances, therefore, sufficient ground has been made out flop the interference by this Court.
In view of my conclusions indicated herein before the writ petition succeeds in part. The impugned order dated 6-1-1994 passed by Respondent No. 1 is quashed with a direction that the appeal of the Petitioner shall be restored to its original number and decided afresh in accordant with law in the light of the observations made herein above within; ten days of the production of a certified copy of this order before Respondent No. 1.
It is further directed that the Petitioner and Respondent No. 3 shall appear before the Respondent No. 1 on 4-4-94.
A certified copy of this Judgment and order shall be supplied to the counsel for the parties by 2 -4-94 on payment of urgent charges.