CIVIL WRIT JURISDICTION CASE No.10662 OF 1999 --------- In the matter of an application under Article 226 of the Constitution of India -------- New Swadeshi Sugar Mills Limited, Narkatiaganj, At, P.O., P.S. Narkatiaganj, District West Champaran, through its Executive President, Shri Madhusudan Sharma. …… …… Petitioner Versus 1. The State of Bihar. 2. The Secretary, Sugarcane, Government of Bihar, Patna. 3. The Cane Commissioner, Government of Bihar, Patna. 4. Shri Amruddin Ahmad, Son of Shirajuddin Ahmed, resident of village- Madhopur Muza, P.O.-Amolwan, P.S. Gaunaha, District-West Champaran. …… … … Respondents For the Petitioner : Mr. Y.V.Giri, Senior Advocate Mr. Jyoti Saran, Advocate Mr. Ashish Giri, Advocate For the Respondent : Dr. S.P.Thakur, Advocate ----------- P R E S E N T THE HON'BLE MR. JUSTICE AJAY KUMAR TRIPATHI Petitioner, a registered company under Indian Companies Act seeks quashing of the order dated 7.7.1999/9.7.1999/10.7.1999 passed by the Secretary, Sugarcane, Government of Bihar in Appeal Case No. 4 of 1999, which is Annexure-14 to the writ application. Petitioner also wants quashing of the order dated 10.2.1999 contained in Annexure-9, which is the order passed by the Cane Commissioner, respondent no.3 to the writ application. The background to the present dispute is that the petitioner‟s company is engaged in production of sugar from its sugar factory at Narkatiaganj, located in the district of West Champaran. Sugarcane is purchased by the company from the - 2 - adjoining areas and the purchase of such cane is regulated by the law in this regard enacted by the Central as well as the State Government. The dispute relates to the year 1997-98 with regard to the liability of the company to pay price of sugarcane to the sugarcane growers specially respondent no.4 of the present writ application as compensation under Section 32-A of Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (hereinafter to be referred to as „the Act‟). The Cane Commissioner has power under Section 31 of the Act to declare an area to be the reserved area for a sugar mill and purchase of cane grown in the reserved area is governed by Section 32 of the Act. The mills have the duty to make purchase from such reserved areas, where sugarcane is grown. Under the provisions of the Act itself an agreement has to be entered between the growers as well as the factory in the prescribed form, which is Form-XIV. The law underwent a change in the year 1993, where Section 32-A has been inserted by the legislators. By virtue of the amendment to the Act made in the year 1993 Section 32-A was introduced, which is reproduced here for ready reference: - “32-A – Payment of Compensation – If cane remains un-disposed in reserved area, the order for payment of compensation to the cane growers concerned shall be made after due enquiry by the Cane Commissioner after giving an opportunity of being heard to both the parties concerned.” The stand of the petitioner is that widest publicity is given to enable the growers to enter into agreement with the mill so that the sugar mill in question shoulders the responsibility to purchase the cane grown by the growers. Many a growers entered into an agreement with the petitioner company, some of them have been brought on record as Annexure-6 series. - 3 - A dispute arose when a claim for compensation was made by respondent no.4 on his behalf as well as on behalf of two other card holders, who are said to be independent persons or to be more precise labourers of respondent no.4 as well as on behalf of the sons and brothers of respondent no.4. The claim for compensation was lodged before the Cane Commissioner, respondent no.3. The parties were heard and vide order contained in Annexure-9, the petitioner company was directed to compensate respondent no.4, which was quantified to the extent of Rs.4,72,677/-. Aggrieved by this order, the petitioner filed an appeal under Section 32(5) of the Act before the Secretary, Sugarcane, Government of Bihar, respondent no.2. The appeal was registered as Appeal Case No.4/1999. The appellate authority after hearing the parties modified the order passed by the Cane Commissioner by directing the cane grower to place their matter for compensation afresh on certain points, but in so far as the compensation to respondent no.4, Amruddin Ahmed, was concerned the same was modified to a sum of Rs.1,62,805.09, which included interest at the rate of 11 per cent on the said compensation as well as cost of litigation. This order under appeal too is, therefore, under challenge in the present writ application. Submission of learned counsel for the petitioner is that the orders impugned are erroneous because the company has no liability or responsibility to pay compensation if an agreement has not been entered between the individual cane grower as is mandated under the law laid down in Section 32(3) and (4). The admitted position is that respondent no.4 never entered into an agreement with the company, therefore, in absence of an agreement under Section 32 no compensation can be claimed under Section 32-A. It is further urged that despite absence of agreement respondent no.4 was supplied challans but he failed to - 4 - utilize the said challans to the full and there is no explanation as to why there was non-supply on behalf of respondent no.4. If the law lays down responsibility upon the company there is also a duty cast upon cane growers. Challenge is also to the quantification of the compensation in view of the fact that the statutory price fixed for the season was Rs.55 per quintal and the respondent no.4 made supply to Khandsari Units at the rate of Rs.50 per quintal, therefore, even if the loss is accepted, for the sake of argument, the difference is only of Rs.5/- per quintal and the entire cane price cannot be used for calculation of compensation. Question has also been raised with regard to legality of grant of 11 per cent interest on the compensation, which according to the petitioner is payable only in case of non- payment to the cane growers after supply and not in the case of calculation of compensation where there was no supply at all. In this regard reliance is place on the case of Hukam Chand v. Union of India, A.I.R. 1976 S.C. 789, where reliance is placed on paragraph 18 of the said judgment, which reads thus: - “18. It is well settled that where a power is required to be exercised by a certain authority in a certain way, it should be exercised in that manner or not at all, and all other modes of performance are necessarily forbidden. It is all the more necessary to observe this rule where power is of a drastic nature and its exercise in a mode other than the one provided, will be violative of the fundamental principles of natural justice. Now, in the present case, if the telephones of the appellants were to be disconnected on the ground of misuse, then they had to give, in consonance with the principles of natural justice, opportunity to the appellants to explain their conduct before taking action under Rule 427 read with Rules 416 and 421. Resort to the wrong and more drastic course provided in Rule 422, on a ground which was not germane to an action under that Rule, vitiates the impugned order, particularly when it is manifest that in making the impugned order, the General Manager was influenced more by this ground and less, if at all, by the existence of „public emergency‟ certified by the Delhi Administration.” - 5 - Respondent no.4 has entered appearance and filed a detailed counter affidavit in support of the two orders. The stand of the respondents is that the definition of Cane Grower has been provided under the statute, as “Cane Grower means a person who grows cane in reserved area either by himself or by member of his family or by hired labourer”. Keeping the above definition in mind the composite claim for compensation was made by the respondent. He submits that the requirement of law is that a farmer should have cultivated sugarcane in the reserved area and the said cane should have been left in the field and not lifted. The above fact was duly established on enquiry and spot verification by the Civil Sub Divisional officer of the area as well as in the report of the Assistant Director, Sugarcane. The claim of compensation has been incorporated under Section 32-A with the object of protecting the interest of the cane growers and the objection being raised by the petitioner is a hyper technical one, which requires no interference. It is further urged that even for the sake of argument, if by omission an agreement was not entered between this respondent and the petitioner under Section 32, the basic fact cannot be denied that the petitioner is a cane grower within the reserved area and his name figures in the register of cane growers, which is to be maintained under Section 35 of the Act. Not only this, if there was no relationship between this respondent and the petitioner then there was no occasion for the company to issue challans to the respondent and his family members for supply of sugarcane to the factory. The whole effort, therefore, on the part of the petitioner is to somehow wriggle out of the liability, which has been created under law towards the cane growers, who are engaged in growing of sugarcane and are duty bound to supply the same only to the factory, duly notified as the receiver of the sugarcane, grown in the reserved area. - 6 - Learned counsel for the private respondent relies on a Constitution Bench decision rendered in the case of Nagendra Nath v. Commr. of Hills Division, A.I.R. 1958 S.C. 398, for the proposition that the nature and power of supervision and control by the High Court under Article 226 and 227 is limited where there are no errors of law apparent on the face of the record or there are no serious infirmity in the procedure or the finding. Further the order ought not to be interfered with where the dispute has been gone in details and the only reason why the same is being challenged is because it is not to the liking of the petitioner. Having taken the rival submissions made at the Bar and the various provisions of law which has been cited, this Court is of the considered opinion that keeping in mind the definition given in the Act with regard to sugarcane grower there was no infirmity in filing of an application by respondent no.4 for compensation even for and on behalf of his so-called labourers and the family members. The composite application filed would have only cut down on the litigation and it cannot be said to go to the root of the matter or jurisdiction. No doubt the provisions laid down in Section 32 of the Act provides for the cane growers and the mill to enter into an agreement, but then the agreement is to give a statutory status so as to fix the consequences arising out of such breach. Keeping in mind the object and purpose of the provisions laid down by amendment in Section 32-A which is to protect the farmers by begetting them compensation, mere absence of the agreement will not take away the right of the respondent to claim compensation because in the present case there is sufficiency of material to show that even in absence of the agreement the petitioner recognized the existence of respondent no.4 and other claimants as a „cane grower‟. The mill even without the agreement had issued challans for supply of - 7 - sugarcane. Even in the statutory survey of the reserved area under Section 35, the name of respondent no.4 figures in the register along with others meaning thereby that there are sufficient indications that respondent no.4 and the persons claiming under him had been treated as a „cane grower‟ in a reserved area attached to the petitioner‟s mill and, therefore, the petitioner had a responsibility and liability to the cane growers of the reserved area. The Court is of the considered opinion that no case is made out for interference with the impugned orders. The writ application has no merit and the same is dismissed. No order as to cost. (Ajay Kumar Tripathi, J.) Patna High Court The 28 February, 2009. NAFR/Pawan/-