Case: S.K.G. Sugar Limited Vs. State of Bihar and Others

bound by such an agreement and, therefore, the appellant is entitled to resile from the agreement with the farmers at that meeting convened by the State Government. In Jaoras case this court had held thus: "The question is; whether such a higher price has been agreed to be paid to the sugarcane growers, the contract has come into existence between the respondents and the cane growers with the aegis of the appellants? As a facts. except kaluram, all representatives of other factories were present at the time to the agreement dated march 21, 1976. As far as Kaluram is concerned, on the first occasion he was present, but on the second occasion when the meeting was adjorned, he was not present. it has been averred in the counter- affidavit that the Sercretary of the sugracene factories owners Association had contracteed him when he was in the hospital and thereafter, the agreement was entered into. Though, subsequently, an attempt was made by the Secretary to wriggle out form it, the Government have stated that and the sugarcane growers have also agreed for the same, we are of the considered view that he was consenting party and there was consensue ad idem to pay higher price of sugarcane than the minimum price fixed by the Central Government and they acted upon it. There was no prohibition for oral agreement between growers and owners through the service of the Cane Commissioner, a statutory authority to effect such agreement.It would thus be clear that the Cane Commissioner having power to compel the cane growers to supply cane to the factory khandsari unit, he has incidental power and duty bound to ensure payment of the price of the sugarcane supplied by the sugarcane grower. The price fixed or agreed is a statutory price and bears the stamp of statutory first charge on the sugar and assets of the factory over any other contracted liabilities to recover the price of the sugarcane supplied to the factory of Khandsari unit. Thus, it would be seen that the Act regulates the recovery as arrears of land revenue. Accordingly, demand has been for payment of the amount n a sum of Rs. 6, 34, 166/- in CA No. 1813/80, Rs.13, 40, 700/- in CA No. 1814 and Rs. 2, 71, 000/- in CA No.1812/80. Thus, the demands issued against the respondents are in accordance with the provisions of the Act and they are liable to pay the same". 6. It is not in dispute that under Section 31 of the Supply Act, the State Government has power to fix the reserved area, in other words, zone was carved out for the appellant for the supply of sugarcane to the factory. All the farmers who are cultifating the sugarcane within that zone ar bopund the State action to supply sugarcane to the factories within that reserved area. Consequently, the factory also is bound by the actions of the State Government. Obviously, pursuant to the obligation had by the State under the supply Act, the meeting was convened by the state Government whereat the factory owners Association and farmers participated and agreed to fixed the price at Rs.20.50 per quintal of sugarcane. As a consequence, both the cane growers as well as the owners of the factory are bound by the decision. This having been agreed upon, the price fixed by the State Government in excess of the minimum price fixed by the Central Government under Clause 3 of the Order would be the price fixed for upply of sugarcane and the Governemnt would beentitled to enforce the liablity. As a consequence, the Collector was empowered and duty bound to issue a vcertrificate of the dues as arrears of land revenue for recoery under the Revenue Recorvery Act. The certificate obviously relates to the difference between the minimum price fixed by the Central government, i.e., Rs. 13.92 per quintal and the price of Rs.20.50 determined by the agreement between the parties. Under the circumstances, there need not be any sparte agreement to be entered into between the cane growers in the reserved area and the appellants factory to be enforceable. We hold that the cerfificate issued by the Collector is vaild in law. As held earlier, the State Government acted in their statutory capacity to fix the increased price of the sugarcane. There is no need for the growers to file separate suit to recover the difference of the price. The recovery proceedings are the appropriate course of action rightly adopted by the State Government.Shri Giri next sought to contened that the appelahnt - factory was notified to be taken over and denotified for dvestment and in the interretgum sales and purchases have taken place and the consequence thereof requires to be considered. The appellant had crushed the sugarcane though vacuum pan process in producing sugar in the relevant period. So it alone is liable to pay the cane price. We find that the question in this case of sharing the liablity by the State Government does not arise. Therefore, it is unnecessary for us to go into the question in these appeals. 7. By order dated February 29, 1996 passed by this Court, the State Government was directed to work out the amount due and payable to the cane growers in terms of the undertaking given to this court at the time of passing the interim order. Pursuanat thereto, it appears and it is not in dispute that the Government has worked out the dues at Rs. 62, 90, 398.72 and made a demand on March 22, 1996 and in furtherance thereof, the appellant has deposited the amount on April 3, 1996. In view of the above, if there is any other demand than what was directed, the respondents are at liberty to proceed in accordance with law and if there is no demand and the demand has already been satisfied, than it is needless to mention that the respondents may not take any further steps in that behalf. 8.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]By order dated February 29, 1996 passed by this Court, the State Government was directed to work out the amount due and payable to the cane growers in terms of the undertaking given to this court at the time of passing the interim order. Pursuanat thereto, it appears and it is not in dispute that the Government has worked out the dues at Rs. 62, 90, 398.72 and made a demand on March 22, 1996 and in furtherance thereof, the appellant has deposited the amount on April 3, 1996. In view of the above, if there is any other demand than what was directed, the respondents are at liberty to proceed in accordance with law and if there is no demand and the demand has already been satisfied, than it is needless to mention that the respondents may not take any further steps in that behalf.