Case: State of Uttar Pradesh &amp; Others Vs. Mawana Sugars Limited

all the eventualities, the captive consumption of molasses by the sugar mills would thereby not be curtailed or prejudicially affected.23. With reference to "balance stock" as well, in the decision in Dhampur Sugar Mills, following observation in paragraph 20 (corresponds to para 27 of the reported judgment, as above) has been alluded to:"In our opinion, however, Clause (3) applies only to excess stock of molasses, that is, molasses which is in excess of and not used for captive consumption by sugar factory and is thus the balance stock."24. The Policy determined the balance stock as hereunder: Balance stock for the Molasses Year 2015-16 = unreserved preliminary stock of the group of mills in the Molasses Year 2015-16 + production in the Molasses Year 2015-16 - self-consumption of molasses in the Molasses Year 2015-16 (equivalent of self-consumption of molasses up to 31.10.2015 in the Molasses Year 2014-15).25. Thus the balance stock for the purpose of the Policy in essence is the stock that would be left over after utilization of the commodity for captive consumption in the Molasses Year 2015-16 from the sum total of the unreserved preliminary produce of the same molasses year and the production thereof in the said year. The computation of balance stock though relevant to eventually decide as to the extent of reservation that would be effective to ascertain the volume of supply to other distilleries manufacturing country-made liquor, it however does not in any way support the contention of the respondent that irrespective of the eventualities in the aforementioned clauses (a), (b) and (c), the reservation would be of 25% only of such balance stock and not otherwise. This is in view of the unambiguous prescript of the Policy that the reservation would be of 25% of the molasses produced, which by no means, can be construed to connote that such reservation had been contemplated to be only of the balance stock left over after the captive consumption of the sugar mill(s) concerned. Such a construction would be a total misreading of the Policy and would border on perversity.26. To recount, clause (3) of the order dated 09.06.2004, which fell for scrutiny of this Court in Dhampur Sugar Mills was in following terms:"25. The English translation supplied by the appellant at Annexure P-3 reads thus:"From the balance stock of molasses with each sugar mill, 20% of molasses shall be reserved for the distilleries manufacturing country liquor. The sugar mills having their own distilleries shall not be covered within this reservation to the extent that after the actual consumption of molasses in their captive distillery, 20% reservation shall be applicable on the balance stock."27. This is both in text and content totally dissimilar to the above excerpt extracted from the Policy for the Molasses Year 2015-16. Whereas in the order under challenge in Dhampur Sugar Mills, it is crystal clear that the policy intended reservation to the extent of 20% of the molasses from the balance stock with the sugar mill, in apparent contradistinction, in the Policy for the Molasses Year 2015-16, the mandate is for 25% reservation of the total molasses produced. The adjustment, if any, in the extent of reservation to be eventually made depending on the quantum of balance stock, in our comprehension, would not alter the essence of the Policy in the manner as pleaded by the respondent. The pith and purport of the two policies, being strikingly at variance, no analogy is permissible.28. A plain reading of paragraphs 46/47 of the decision in Dhampur Sugar Mills, (as referred to the Policy) which in its reported version in (2007) 8 SCC 338 , correspond to paragraphs 53 & 54 authenticate the above deduction. In the overall context, we are abundantly clear that such reference was unwarranted and, in any case, had been made only to indicate the notion that physically the balance stock would be the stock that would be left over after the captive consumption of molasses by the sugar mill concerned and has no bearing at all on the computation of balance stock as envisaged in the Policy and and in no manner would guide the interpretation thereof. In that view of the matter, the presupposition of the High Court that the Policy for the Molasses Year 2015-16 was based on the decision in Dhampur Sugar Mills is patently incorrect. Such policies being an annual event, contingent on contemporaneous exigencies and within the realm of executive discernment, the High Court, in our estimate, had fallen in gross error in proceeding on that premise and issuing the consequential directions as made. Noticeably, the Policy consciously underlines that in any event thereby, the captive consumption of molasses by the sugar mills is not affected at all, so much so that if the balance stock is more than the extent of reservation, the whole of it would apply, but if the balance stock is less than the quantity to be reserved, the reservation would work only to the extent of the balance stock and not in excess thereof. As the balance stock, if any, conceptually would be the residue after the utilization by way of captive consumption, in absence of the challenge to the Policy to be illegal, unfair, unjust, unreasonable or unconstitutional, the plea of the respondent that the reservation is unmistakably limited to 25% of the balance stock under all situations is visibly flawed and fallacious. The measure of the captive consumption for the Molasses Year 2015-16, on the basis of such utilization for the Molasses Year 2014-15, in absence of any overwhelming material to the contrary, also cannot be faulted with.29. In the wake up of the above, we are of the unhesitant opinion that the impugned judgment being based on a total misreading of the Policy for the Molasses Year 2015-16 and also of the verdict in Dhampur Sugar Mills in its application to the attendant facts and circumstances, it is clearly insupportable and unsound in law and is thus liable to be set aside, which we hereby do.

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

Explanation:
0[ds]13. The disparate pleadings and the contrasting assertions have received our due consideration. As a plain reading of the impugned judgment would testify, that it is substantially structured on the rendering in Dhampur Sugar Mills, apt it would be at the outset to advert thereto, so as to clear the deck for the ultimatereiterate, neither the validity of the Act nor that of the Policy has been assailed and hence, the instant exercise is limited to the dissension on the interpretation of the Policy in its application to the respondent and other sugar mills equally situated. To address the issue and having regard to theThe records testify that the said Policywas published by a Circular/Communicationin vernacular and a translated copy thereof has been placed on records and produced in course of the arguments. As it had been attested on behalf of the appellants by Mr. Dwivedi that the document produced at the hearing bears the correct translated version of the original, the same would be referred to.As all the clauses would demonstrate, reference of paragraphs 46 and 47 of the decision in Dhampur Sugar Mills has been referred to, highlighting that in all the eventualities, the captive consumption of molasses by the sugar mills would thereby not be curtailed or prejudicially affected.This is both in text and content totally dissimilar to the above excerpt extracted from the Policy for the Molasses YearWhereas in the order under challenge in Dhampur Sugar Mills, it is crystal clear that the policy intended reservation to the extent of 20% of the molasses from the balance stock with the sugar mill, in apparent contradistinction, in the Policy for the Molasses Yearthe mandate is for 25% reservation of the total molasses produced. The adjustment, if any, in the extent of reservation to be eventually made depending on the quantum of balance stock, in our comprehension, would not alter the essence of the Policy in the manner as pleaded by the respondent. The pith and purport of the two policies, being strikingly at variance, no analogy is permissible.28. A plain reading of paragraphs 46/47 of the decision in Dhampur Sugar Mills, (as referred to the Policy) which in its reported version in (2007) 8 SCC 338  , correspond to paragraphs 53 & 54 authenticate the above deduction. In the overall context, we are abundantly clear that such reference was unwarranted and, in any case, had been made only to indicate the notion that physically the balance stock would be the stock that would be left over after the captive consumption of molasses by the sugar mill concerned and has no bearing at all on the computation of balance stock as envisaged in the Policy and and in no manner would guide the interpretation thereof. In that view of the matter, the presupposition of the High Court that the Policy for the Molasses Yearwas based on the decision in Dhampur Sugar Mills is patently incorrect. Such policies being an annual event, contingent on contemporaneous exigencies and within the realm of executive discernment, the High Court, in our estimate, had fallen in gross error in proceeding on that premise and issuing the consequential directions as made. Noticeably, the Policy consciously underlines that in any event thereby, the captive consumption of molasses by the sugar mills is not affected at all, so much so that if the balance stock is more than the extent of reservation, the whole of it would apply, but if the balance stock is less than the quantity to be reserved, the reservation would work only to the extent of the balance stock and not in excess thereof. As the balance stock, if any, conceptually would be the residue after the utilization by way of captive consumption, in absence of the challenge to the Policy to be illegal, unfair, unjust, unreasonable or unconstitutional, the plea of the respondent that the reservation is unmistakably limited to 25% of the balance stock under all situations is visibly flawed and fallacious. The measure of the captive consumption for the Molasses Yearon the basis of such utilization for the Molasses Yearin absence of any overwhelming material to the contrary, also cannot be faulted with.29. In the wake up of the above, we are of the unhesitant opinion that the impugned judgment being based on a total misreading of the Policy for the Molasses Yearand also of the verdict in Dhampur Sugar Mills in its application to the attendant facts and circumstances, it is clearly insupportable and unsound in law and is thus liable to be set aside, which we hereby do.