1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD (REPORTED) WRIT PETITION NO.2186 of 2001 Date of decision:16th September, 2010. For approval and signature HON'BLE MR. JUSTICE S.B.DESHMUKH HON'BLE MR.JUSTICE K.U.CHANDIWAL 1. Whether the Reporters of Local Papers Yes may be allowed to see the Judgment ? 2. To be referred to the Reporter or not ? Yes 3. Whether Their Lordships wish to see No. the fair copy of the Judgment ? 4. Whether this case involves a substantial? No. question of law as to the interpretation of the Constitution of India, 1950, or any order made thereunder ? 5. Whether it is to be circulated to the No. Civil Judges ? 6. Whether the case involves an important No question of law and whether a copy of the Order should be sent to Bombay, Goa and Nagpur Office ? Private Secretary AGP/office/2186-01wp 2 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.2186 OF 2001 Shri Sant Eknath Sahakari Sakhar Karkhana Ltd. Nathnagar, Paithan, Taluka Paithan, District: Aurangabad, Through its: authorized Officer, Shaikh Hilaluddin Chotemiya. ...PETITIONER VERSUS 1. The State of Maharashtra Through Secretary, Co-operation and Textile Department, Mantralaya, Mumbai. 2. The Director of Sugar (Development) and Licensing Authority for issuance of Sugar Cane Crushing Licenses, Commissionerate of Sugar, Maharashtra State, sugar complex, Shivajinagar, Pune. 3. The Commissioner of Sugar, Commissionerate of Sugar, Maharashtra State, Sugar complex, Shivajinagar, Pune. 4. Shri Vradheshwar Sahakari Sakhar Karkhana Ltd., Adinathnagar, Tq.Pathardi, Dist. Ahmednagar, Through its Managing Director. 5. Shri Ramesh Ingale, Sugar Cane Development Officer, c/o Commissioner of Sugar 3 Sugar complex, Shivaji Nagar, Pune. (6. Prakash Mahindre, Director of Sugar ( Development) and Licensing Officer, Commissioner ( Sugar) Maharashtra State, Pune, Shivajinagar, Pune.) (Petition dismissed as against respondent no.6 vide Addl.Registrar's order dt.14.10.2002) ...RESPONDENTS ... Shri V.D.Salunke, Adv., for petitioner; Shri G.B.Rajale, Adv., for respondent no.4; Shri D.V.Tele, A.G.P., for respondent State. ... CORAM: S.B.DESHMUKH AND K.U.CHANDIWAL, JJ. *** Date of reserving the judgment: 13.9.2010 Date of pronouncing the judgment: 16.9.2010 *** JUDGMENT (Per:- K.U.Chandiwal, J.): 1. Rule was issued on 1st August, 2001. The petitioner, a cooperative sugar factory in Paithan, district Aurangabad, questions the propriety and legality of authority issuing impugned allotment order dt.7th Feb.,2001, thereby reducing the sugarcane harvesting of the petitioner and, allowing the sugarcane from its 4 area of operation to the cooperative sugar factory of respondent no.4. 2. The allotment pursuant to the application by petitioner for crushing license indicated that in the area of operation of petitioner karkhana, there was 3,17,000 MT of sugarcane available of its members and non members in the crushing season 2000-2001. This was in tune with the information furnished by the petitioner and due verification coupled with earlier year's record of petitioner. In spite of granting the sugarcane crushing license to the petitioner for 3,17,000 MT, the respondent no.1, allegedly, without giving opportunity of hearing to the petitioner, issued sugarcane allotment orders to the sugar factories, namely, 1) Kedareshwar Sahakari Sakhar Karkhana Ltd. 2) Vridheshwar Sahakari Sakhar Karkhana Ltd., for 36,455 metric tones. 3) Siddheshwar Sahakari Sakhar Karkhana Ltd., 4) Gangamai Sugar Industries Ltd., 5) Deogiri Sahakari Sakhar Karkhana Ltd., 6) Sanjiwani Sahakari Sakhar Karkhana Ltd., for 1000 metric tonne. 5 The grievance is, due to such illegality committed by the authorities of respondent no.1, an injustice is caused, adding sufferings by suffering heavy losses and facing difficulties in regular crushing. 3. The allotment order dated 2.11.2000 was questioned before the licensing authority by filing various representations and it was requested by pointing that the target of the petitioner to crush sugarcane would not be completed if the allotment orders granted in favour of the above referred sugar factories are not withdrawn and the already financially weak/sick petitioner shall be thrown in ditches. In spite of such representations, no heed was paid by the authorities, resulting in the other sugar factories withdrawing sugarcane of about 50,000 MT from the zone of operation of petitioner karkhana ( a reserved area). 4. The grievance of the petitioner is, respondent no.5 intentionally avoided to pass any order on the representations made by petitioner, to facilitate removal of sugarcane, to suit respondent no.4, from area of petitioner, for the crushing year 2000-2001 which has caused an estimated loss of around Rs.ten lacs to the petitioner and, hence, desirability to direct the respondent to cough off Rs.25,00,000/-(Rs.twenty 6 five lacs) as and by way of damages. 5. The petitioner, in its representation dt.13.10,2000, addressed to Respondent No.3 - Commissioner of Sugar, Pune, urged to cancel the allotment orders to other sugar factories, highlighting, though the Government has allowed it to lift 3.17 lac M.T. of sugarcane, it would be only 3.00 lac M.T. No hearing was given before taking such decision. 6. It is highlighted, since no heed was paid by respondent no.5, representation was also made to respondent nos. 1 and 2 on 19th Feb., 2001, urging to cancel the allotment order dt. 7.2.2001 or, suspension thereof. It was pointed, petitioner karkhana is situate in drought prone area. After issuing license dt.4.11.200, vide Outward No.Vikas-2/Ga-Parwana/91/2000 allotting total 3.17 lacs M.T. sugarcane, without giving opportunity of hearing, issued allotment orders to other factories. The order is vague to disclose particular agriculturists area, tonnage,etc. The petitioner approached the State Government and filed appeal against the order dt. 7th Feb.,2001, however, said appeal is not decided. Since petitioner was directed to approach the licensing authority, Respondent No. 5, the licensing authority, heard the petitioner on 12th March, 2001. Then it was entertained by 7 respondent no.5 on 27.3.2001. The matter was again adjourned to 14th May, 2001. Petitioner feels that, these authorities were interested in well being of respondent no.4, being from Ahmednagar district, and a shadow of hearing was managed to ensure prolongation, enabling respondent no.4 to lift the sugarcane in particular season. We do not advert to deal with allegation of regional discrimination. 7. The above details about passing of the orders and representations are not controverted in the affidavit in reply from respondent nos. 2, 3 and 5, tendered by Vijaykumar Babasaheb Ingale, Joint Director ( Development) of Sugar, Maharashtra State, Pune. According to respondent, the Directorate of Sugar in earlier year experienced that petitioner did not lift the sugarcane from the allotted quota of 3.30 lac MT from 5509 hectare area ( for the year 1999-2000) and, resultantly, the State had to suffer substantial losses of Rs.13,22,928/- to pay transport subsidy and to bear loss of Rs. 81,06,200/- for subsidizing un-crushed sugarcane at the rate of Rs.20,000/-. It was in this situation, the sugarcane crop quota of the petitioner, though was approved for 2000-2001 as 3.17 metric tonnes was reduced, and sugarcane was diverted to other sugar factories. 8 8. The petitioner has, in paragraph no.3 of the petition, referred applicability of the provisions of Maharashtra Sugar Factories ( Reservation of Areas and Regulation of Crushing and Sugarcane Supply) Order, 1984 ( for short, referred to as "Zoning Order". The Regulation of supply of sugarcane is specified in clause "5. Regulation of supply of Sugarcane.- (1) A permit officer may allow a sugar factory to purchase cane or to accept supplies of cane from cane growers from areas other than the area reserved for it under clause 3 if he is satisfied that any 'of the following circumstances exist namely (a)In the event of production of cane in the area reserved for the factory being not adequate for enabling it to reach optimum level of crushing; (b)In the, event 'of surplus production of cane in the areas reserved for other factories which those factories are not able to crush during the crushing season. (c)In the event of stoppage of nearby sugar factory due to mechanical break down, labour unrest, lock-out or any other reason. (d)In the event of cane grower or cane growers from the area reserved for a particular factory declining to supply cane to the said factory on account of any of the following reasons, if found justified by the Permit Officer 9 (i)Non-payment or late payment of cane price by the sugar factory; or (ii)Non-fulfilment of any of the obligations by the sugar factory arising out of agreement between the cane grower or cane growers and the sugar factory; or (iii)Discrimination by the sugar factory in harvesting of cane and thereby causing loss to the cane grower or the cane growers; Provided that before passing any order under this sub-clause, for any of the above reasons, the Permit Officer shall give the parties concerned a reasonable opportunity of being heard in person or through the authorised representative." While dealing with the orders under challenge, we find that respondent no.5 did not address enforceability of Regulation as indicated in clause (5) to emerge withdrawal of sugarcane from the petitioners Zoning Area. There are no situations highlighted that the petitioner has indulged three sorts of irregularities; either he did not pay the price of the cane at the proper time or it did not adhere to the agreements it has entered with the cane-growers or it has caused any discrimination in harvesting the cane thereby causing loss to the cane growers. The action of respondent no.5 is not justified in tune to clause (5) enabling him to reduce the area and sugarcane of the petitioner from 3.17 10 M.T., to be diverted to other factories, to the tune of more than 50,000 M.T. 9. The matter relating to Sugar Control Order and Essential Commodities Act was dealt with by this Court in a Full Bench judgment dt. 23.9.1988 in Writ Petition No.263/1988. It was assailed by the Sakhar Karkhana Sangh before the Apex Court. The Apex Court, as reported in 1995 Supp.(3) SCC 475 (Maharashtra Rajya Sahakari Sakkar Karkhana Sangh Ltd. and others V. State of Maharashtra and others), while dealing with the controversy of fixation of pricing has also indicated the procedure to be adhered by the competent authorities to eliminate the discrimination and allegations of extraneous consideration by the authorities concerned. This judgment of the Apex Court, though deals with fixation of price of sugar, is equally applicable to due diligence in exercise of power by the Permit Officer ( respondent no.5) to adhere to rigidity in clause (5), referred to above. 10. The respondent, could not point any source of origin to curtail the sugarcane in particular crushing season, once having so allotted to the petitioner. The conduct of respondent no.5 is demonstrated in paragraph nos. 9A,9B, 9C and 10B of the petition. There is no 11 contest to the assertion of the petitioner. During hearing, to avoid any delay, written submissions were tendered by the petitioner. In spite of the same, no orders were passed. However, a notice was issued on 21.5.2001, asking the petitioner to remain present for hearing scheduled on 18.6.2001. On 18.6.2001, the petitioner objected to the manner of dragging the proceedings and harassment meted out to it but no cognizance was taken. 11. Petitioner submits, it is common experience that respondent authorities are intentionally allowing sugarcane of the petitioner sugar factory and other sugar factories to respondent no.4 and other sugar factories in western Maharashtra. The high handed orders passed by respondents are totally arbitrary and discriminatory, resultantly, violative of Art.14 of the Constitution of India. 12. Having analyzed the factual matrix, there cannot be any deviation that the authorities/respondent nos.5, in spite of giving hearing, did not pass orders on the representation, to address and resolve the grievance of the petitioner. This has resulted in exhausting the crushing season and, consequently, the grievance and challenge concerning order dt.7.2.2001 has become 12 infructuous. This, naturally, will decant prayer clause (B) in awesome situation. 13. Respondent no.5, being competent responsible Government authority, had no concern to act as a benediction in favour of respondent no.4, thereby causing financial discomfort to the petitioner. The demonstration of trust deficit by respondent nos. 5 could not be countenanced from any angle. The experience, referred in earlier crushing season, could not be a set example as in the earlier season, it was 3.30 MT while in the crushing license dt.4.11.2000 it was 3.17 lacs MT from an area of 6354 hectares, that too restricting from area of operation (zone) only. It is difficult to digest, that the orders passed by the authorities could be branded to be a final matter. The orders could not travel scope of clause (5) of the Zoning Order. It is difficult even to accept that the act of respondent was in tune to the Apex Court directions. No situation is highlighted anywhere by respondent no.5 in passing the allotment order dt.7.2.2001, thereby reducing sugarcane of the petitioner., There was no complaint from agriculturists having adversely affected due to so-called non-lifting of sugarcane by the petitioner. 14. As indicated earlier, by passage of 13 time, prayer clause (B), seeking writ of Certiorari for allotment order dt.7.2.2001 has become infructuous. We are concern, with the conduct of respondent no.5 in dealing with the petitioner, and consequently, we hold that the act and action of the authorities/respondent no.5 warrants condemnation and deprecation. There was obviously renegation in discharge of duties. 15. The Apex Court has, in the matter of Eureka Forbes Limited Vs. Allahabad Bank and others (2010(5) Supreme 39), in paragraph nos. 42 and 43 has highlighted the concept of "public accountability by the Government officials and the obligation cast. It is stated in paragraph no.44, "44. Inaction, arbitrary action or irresponsible action would normally result in dual hardship. Firstly, it jeopardizes the interest of the Bank and public funds are wasted and secondly, it even affects the borrower's interest adversely provided such person was acting bona fide. Both these adverse consequences can easily be avoided by the authorities concerned by timely and coordinated action. The authorities are required to have a more practical and pragmatic approach to provide solution to such matters. The concept of public accountability and performance of functions takes in its ambit proper and timely action 14 in accordance with law. Public duty and public obligation both are essentials of good administration whether by the State instrumentalities and/or by the financial institutions. .. " The action of respondent no.5 dated 7th Feb., 2001, as indicated earlier, more leans to an arbitrary act associated with facilitation to the cause of respondent no.4 than due discharge of duties expected to be shouldered by respondent no.5. The lack of concern for public accountability in the process of protraction to resolve petitioner's grievance is evident, as the manner in which hearings were delayed by Respondent No.5. 16. In the petition, except reference of loss of Rs.10 lacs suffered by the petitioner, there is no whisper highlighting details as to such losses suffered by the petitioner. Compensation of Rs.25 lacs is claimed in the writ petition. This is an area which involves recording evidence, however, since there are no pleadings, even the evidence would be short of any consideration, least the documents. Having not furnished any calculation for such loss or claim of damages, the scope of writ jurisdiction need not be expanded. 15 17. In Salem Advocate Bar Association, T.N. V. Union of India ( (2005) 6 SCC 344), in para 37, it is observed, " Judicial notice can be taken of the fact that many unscrupulous parties take advantage of the fact that either the costs are not awarded or nominal costs are awarded on the unsuccessful party. Unfortunately, it has become a practice to direct parties to bear their own costs. In large number of cases, such an order is passed despite Section 35(2) of the Code. Such a practice also encourages filing of frivolous suits. It also leads to taking up of frivolous defences. Further wherever costs are awarded, ordinarily the same are not realistic and are nominal. When Section 35(2) provides for cost to follow the event, it is implicit that the costs have to be those which are reasonably incurred by a successful party except in those cases where the Court in its discretion may direct otherwise by recording reasons thereof. The costs have to be actual reasonable costs including the cost of the time spent by the successful party, the transportation and lodging, if any, or any other incidental cost besides the payment of the court fee, lawyer's fee, typing and other cost in relation to the litigation. It is for the High Courts to examine these aspects and wherever necessary make requisite rules, regulations or practice direction so as to provide appropriate guidelines for the subordinate courts to follow." 16 18. The omissions of respondent no.5, discussed here-in-before, clearly demonstrate us to compel and invite for imposition of costs. Respondent no.4 sugar factory has been benefited by omissions and laches of respondent no.5. The costs are also necessitated since, apart from blatantly killing time by respondent no.5, allowing, exhausting the harvesting season, the petitioners officers and Advocates were forced to shuttle either at Mumbai or at Pune for redressal. Their grievance was not entertained and the petitioner was required to suffer heavy expenses which even could be more than Rs. 50,000/-. Petitioner is required to file petition and pay charges to the Counsel and to bear incidental traveling expenses. Consequently, we quantify the costs of Rs.25,000/- each, to be paid by respondent no.4 and respondent no.5 to petitioner within a period of three months. 19. We direct the learned Principal Secretary, Cooperation Department, Maharashtra State, Mantralaya, Mumbai, to look into the matter, cause an inquiry in the light of what we have expressed, so far as discharge of duties by respondent no.5, is concerned, by giving him an opportunity of hearing. The report of compliance be furnished to this Court up to 31st of 17 March, 2011. Rule partly made absolute. (K.U.CHANDIWAL) (S.B.DESHMUKH) JUDGE JUDGE ... AGP/2186-01wp