Wp 8349 of 09 1 SSK/17 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 8349 OF 2009 Adinath Sahakari Sakhar Karkhana Ltd. ....Petitioner Versus Shri Jagannath Dattatraya Deshpande & Ors. ...Respondents Mr. V. V. Kanade a/w. Mrs. Jai B. Kanade, Advocate for the Petitioner. Mr. T. D. Deshmukh, Advocate for Respondent Nos. 1 to 4. CORAM : R. V. MORE, J. DATED : 13TH JULY, 2010. P.C.: Heard Mr. Kanade and Mr.Deshmukh, learned Counsel for the Petitioner and Respondents respectively. 2. The Respondents are admittedly Producer-Members of the Petitioner- Karkhana. It is the case of the Respondents that they cultivated sugar-cane in their land to the extent of 12 Hectares and 5 Are in the year 1998-99. The Respondents registered the said sugarcane with the Petitioner-Karkhana and the Petitioner-Karkhana also took note of the said fact. The Petitioner-Karkhana mentioned Respondents’ sugarcane in an application for the crushing licence. It is the further case of the Wp 8349 of 09 2 Respondents that the Petitioner-Karkhana though bound to harvest the Respondents entire sugarcane refused to do so for political reasons. Out of the entire sugarcane cultivated by the Respondents, the sugarcane cultivated to the extent of 1 Hectare and 8 Are is harvested by another factory. However, rest of the sugarcane is not harvested by any Karkhana including the Petitioner-Karkhana and therefore, the Respondents filed dispute under section 91 of the Maharashtra Co-operative Societies Act, 1960 for damages. 3. The dispute was opposed by the Petitioner on various grounds including denial of the Petitioner’s responsibility to harvest the entire sugarcane cultivated by the Respondents. The Trial Court viz. Co-operative Court allowed the Respondents dispute partly. It was held that the Petitioner-Karkhana was duty bound to harvest the Respondents’ sugar cane to the extent of 1 Hectare and 20 Are and therefore, the damages of Rs.1,25,635/- were granted to the Respondents. This order was accepted by the Petitioner. However, the Respondents challenged the same by filing an appeal in the Co-operative Appellate Court. The Co-operative Appellate Court allowed the appeal partly and thereby, the Trial Court’s order was set- aside. The Petitioner-Karkhana was directed to pay an amount of Rs.7,28,000/- to the Respondents alongwith interest @6% from the date of dispute till the amount is realised. This order is impugned in the present Wp 8349 of 09 3 petition. 4. Mr. Kanade, learned Counsel for the Petitioner invited my attention to the proviso of clause 3 of sugarcane order which was added by an amendment in the year 1997 and pointed out that in the absence of any agreement between the member and the sugar factory, the sugar factory is not bound to harvest sugarcane of the member in excess of ratio of share held by the member and area under sugarcane as per the bye-laws of the sugar factory. He also submitted that the Co-operative Appellate Court without any proof of damages awarded an amount of Rs.7,28,000/- to the Respondents. 5. Mr. Deshmukh, learned Counsel for the Respondents on the contrary supported the impugned order. He submitted that the Petitioner- Karkhana was duty bound to harvest registered sugarcane of the member. Regarding proof of damages, he submitted that the Appellate Court rightly granted damages taking into consideration the annual report of the Petitioner’s sugar factory. 6. Having considered the submissions of the learned Counsel for the respective parties and having gone through the impugned judgment and order alongwith the sugarcane order as amended in the year 1997, I find no merit in the petition. There is no dispute that the Respondents are Wp 8349 of 09 4 Producer-Members of the Petitioner-Karkhana. Under clause 4 of bye-laws 18(A) of the Petitioner-Factory, a member is bound to supply all the sugarcane cultivated by him to the Petitioner-Factory. The Petitioner- Factory, however, is obliged to harvest the member’s sugar cane in proportionate to his share. It is further made clear under this clause that if it is not possible for the Petitioner-Factory to harvest excess sugarcane registered by the member with them, then, the Petitioner in any case should inform the member to that effect before 15th of September. In the present case, there is no dispute that the Respondents registered sugar cane to the extent of 8 Hectares and 8 Are with the Petitioner-Karkhana. There is also no dispute and in fact the finding of facts is recorded by the Lower Appellate Court that before 15th of September, the Petitioner-Karkhana has not informed the Respondents about its inability to harvest the sugarcane registered with it. The sugarcane grown in 1 Hectare and 8 Are is harvested by other factories and rest of the sugar cane cultivated on 7 Hectares was not harvested either by the Petitioner-Karkhana or any other factory. Since intimation about inability to harvest sugarcane was not given to Respondents by the Petitioner, the Petitioner was under obligation to harvest entire registered sugarcane of the Respondents. The Lower Appellate Court in this regard has approached the matter from correct point of view and no fault can be found in the finding of the Lower Appellate Court. . Wp 8349 of 09 5 7. So far as the proof for loss/damages is concerned, the Co- operative Appellate Court relied upon the annual report of the Petitioner- Karkhana in which average yield per hectare is given at 130 metric tonnes. On the basis of this report, the Appellate Court correctly calculated the amount of loss caused to the Respondents. I find no error in the said finding. 8. Now, let us consider the submission of Mr.Kanade, learned Counsel for the Petitioner that in view of the amendment to the sugarcane order in the year 1997, the sugar factory is not obliged to harvest the entire sugarcane of its member. I have gone through the sugarcane order as amended in the year 1997. Clause 3 of the sugarcane order deals with reservation of area. The first proviso of this clause states that the cane grower who is not a member of the Co-operative Sugar Factory is free to supply their cane to any factory of their choice. This proviso is not applicable to the facts and circumstances of the present case in as much as, the Respondents are admittedly the members of the Petitioner- Karkhana. The second proviso is applicable to the facts and circumstances of the present case. It reads as follows: “Provided further that a member of a Co-operative sugar factory shall be bound to supply sugarcane to that Co- Wp 8349 of 09 6 operative sugar factory in the ratio of shares held by him and area of sugarcane as per the bye-laws of the Co- operative Sugar Factory and he will be free to supply excess cane, if any, to any factory of his choice by entering into agreement or contract to that effect.” The plain reading of the proviso makes it clear that the member of a Sugar-Factory is bound to supply sugarcane to the sugar factory in the ratio of shares held by him and the area under sugarcane as per the bye- laws of the sugar factory and he is free to supply excess sugarcane to any other factory of his choice. The agreement or contract contemplated in this proviso is agreement with the factory of which sugarcane producer is not a member. The plain reading further reveals that the member of the sugar factory is not required to enter into an agreement with the sugar factory for supply of sugarcane in excess to the ratio of shares held by him and area under sugar cane as per the bye-laws. Bye-law 18(A)(4) of the Petitioner- Factory is very clear under which a member can register excess sugar cane with the Petitioner-factory and if it is not possible for the Petitioner – factory to harvest then information of such fact should be given to the Producer-member before 15th of September. Taking over all circumstances into consideration, it is clear to my mind that the Petitioner failed to discharge its obligations thereby causing loss to Respondents to the extent Wp 8349 of 09 7 of Rs.7,28,000/-. I do not find any error so as to enable me to interfere with with the impugned order in writ jurisdiction of this Court under Article 227 of the Constitution of India. The Petition is, therefore, dismissed. 9. Mr. Kanade, learned Counsel for the Petitioner at this stage seeks continuation of the ad-interim order passed by this Court on 12th November, 2009. In the interest of justice and looking into the controversy involved in the matter, the ad-interm order is continued for a period of four weeks from today. (R. V. MORE, J.)