New India Sugar Mills and Others vs State of U.P.

D.K. Upadhyay, J.—1. Heard Shri Sudeep Kumar, learned counsel for the petitioners, learned Standing Counsel appearing for the State-respondents, Shri K.S. Pawar, learned counsel for Sahkari Ganna Vikas Samiti and Shri Dhruv Mathur, learned counsel for respondent No. 6.

The record which has been produced by the learned Standing Counsel has also been perused.

The petitioner No. 1, which is a Sugar Mill, has challenged the order dated 07.01.2016, passed by the State Government while exercising the appellate jurisdiction under section 15(4) of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (hereinafter referred to as ''the Act'') on various counts.

The dispute which engages attention of this Court in this writ petition relates to three cane purchase centres, namely, (i) Mahuwa, (ii) Pakadi Mahuwa-First and (iii) Gadahia-First. As per the order dated 24.11.2015, these centres were assigned to the petitioner-mill. However, on the appeal preferred by respondent No. 6, the said centres by means of the impugned orders have been assigned to respondent No. 6.

The Cane Commissioner by his order dated 24.11.2015 passed under Section 15 of the Act assigned the purchase centres in question to the petitioner-mill taking into account various factors which are found mentioned in the order dated 24.11.2015 itself. The respondent No. 6 preferred appeal challenging the said order. A writ petition bearing No. 7991 (M/S) of 2015 was filed by the respondent No. 6. which was disposed of finally by this Court on 23.12.2015 with the direction to the appellate authority to decide appeal expeditiously, say within a period of three weeks from the date of production of certified copy of this order.

From a perusal of the original record produced by the learned Standing Counsel, it appears that the appeal against the order of the Cane Commissioner dated 24.11.2015 was received in the State Government on 04.12.2015, on which an order was passed by the Special Secretary in the department concerned on 08.12.2015 fixing 22.12.2015 for hearing of appeal. The order-sheet produced today along with record does not contain any order which could have been passed on 22.12.2015, however, on 28.12.2015 an order was passed on the order-sheet fixing the matter on 31.12.2015. On 31.12.2015, the petitioners, who were respondents before the appellate authority, sought an adjournment to submit their objections to the appeal. Accordingly, the appellate authority referring to the order passed by this Court on 23.12.2015 while furnishing a copy of the appeal to the petitioner fixed the matter for hearing/arguments on 04.01.2016. On 04.01.2016 the matter was heard and it was posted for 05.01.2016 for orders. However, in the margin of the order-sheet, on 04.01.2016, the learned counsel, who represented the petitioners before the appellate authority, appears to have appended a note that a request has been made for disposal of the application made by the petitioners for consolidation of appeals, however, the said prayer was declined. The application for clubbing Appeal Nos. 137/2015-16 and 138/2015-16 was filed by the petitioners for getting the said appeals clubbed along with Appeal No. 124 of 2015-16 filed by the respondent No. 6 against the cane reservation order dated 24.11.2015. A prayer accordingly was made that all the three appeals be clubbed and decided together. Along with the said application, the objection on behalf of the petitioners to the appeal was also filed.

On 05.01.2016, it appears that judgment/order could not be rendered by the appellate authority and the matter was thereafter fixed on 07.01.2016, on which date, the order by the appellate authority has been passed which is under challenge in this writ petition.

The record produced today by the learned Standing Counsel also contains an application moved by the respondent No. 6 before the appellate authority which is title as ''an application for taking documents on record''. The said application contains certain records which have been annexed thereto. On the back of the first page of the said application, a note has been appended to by the learned counsel, who represented the petitioners before the appellate authority, to the effect that he has received the copy of the application during course of hearing and a request was made by him to file reply to the said application.

The most startling fact which is revealed from the perusal of the order-sheet maintained by the appellate authority is that the order-sheet has not been maintained appropriately. The order-sheet does not mention as to what happened in the matter on 22.12.2015, though the appeal was fixed for hearing on 22.12.2015 vide order dated 08.12.2015. The order-sheet also reveals that the application for clubbing all the three appeals was received but in the impugned order nothing has been recorded by the appellate authority as to whether the said application was considered or not, though learned counsel appearing for the petitioners while arguing the matter before this Court has stated that despite his request to club the three appeals, the appellate authority did not consider his prayer. On 04.01.2016 the application for taking the documents on record was moved by the respondent No. 6 after serving a copy thereof to the petitioners, however, on the prayer/request made by the learned counsel for the petitioners for giving some time to file reply to the said application, no heed appears to have been paid by the appellate authority.

The appellate authority has been assigned the function of hearing appeal against the order of the Cane Commissioner passed under sub Section 1 of section 15 of the Act that is the order relating to declaration of reserved area and assigned area. The remedy of appeal provided to the person aggrieved by any order passed under Section 15(1) of the Act is a statutory right conferred by the legislature. The appellate authority is, thus, under the statutory mandate to decide the appeal on the basis of recognized legal principles of equity, good conscience and fair play in absence of any Rule having been framed by the State Government or by any other authority to regulate the procedure to be adopted by the appellate authority. In the instant case, it is true that there was a direction issued by this Court by means of the order dated 23.12.2015 to decide the appeal preferred by the respondent No. 6 expeditiously, say within a period of six weeks, however, keeping the said time frame in mind the appellate authority ought to have conducted the proceedings of appeal preferred by respondent no 6 in a manner which would not have resulted in denial of appropriate opportunity to the petitioners or for that matter to any other party having sufficient interest in the matter. Admittedly, so far as the procedural lapses by the appellate authority in this case are concerned, two aspects can be mentioned, firstly, the appellate authority despite entertaining the application moved by the respondent No. 6 for taking certain documents on record has not given any time or opportunity to the petitioners to rebut the averments made in the said application or the documents annexed thereto and secondly, the appellate authority has not, at all, taken into account the prayer made by the petitioner for clubbing the three appeals which admittedly arose out of the reservation orders passed by the Cane Commissioner in respect of the petitioner-mill.

In respect of the first lapse as pointed out above, howsoever little time which could have been possible to be provided to the petitioner to raise objection to the application for taking documents on record, ought to have been provided by the appellate authority and by not doing so, in my considered opinion, the appellate authority has not adhered to the principles of fair play. In respect of the second lapse, which is noticeable from a perusal of the record, relating to non-consideration of the prayer made by the petitioner for clubbing the three appeals, it was well within the statutory discretion of the appellate authority to have even rejected the said prayer, however, by not adverting to the prayer made in the said application the appellate authority in my considered opinion has erred in the procedure which ought to have been adopted in the present case. As to whether the appeals were to be clubbed and decided together depended on various factors. One of the crucial factors which ought to have been taken into account by the appellate authority or which ought to have weighed in his mind is as to whether reservation centres being claimed by the petitioner in other two appeals, namely, appeal Nos. 137 of 2015-16 and 138 of 2015-16 had any bearing on the overall factors to be taken into account while assigning or reserving the cane area.

As has been asserted by the learned counsel for the petitioners that though the appeal Nos. 137 of 2015-16 and 138 of 2015-16 related to certain other cane purchase centres, however, the issue basically in these two appeals also related to the quantity of cane allotted to the petitioners vis-�-vis the quantity of cane allotted to the respondent No. 6. Thus, the submission of learned counsel for the petitioners is that any order passed in one appeal without taking into account the cumulative impact of the issues raised in other two appeals would, certainly, not be in tune with the object for which the orders under Section 15 of the Act are passed or the appeals arising out of these orders are heard and decided.

Apart from pointing out the aforesaid lapses on the part of the appellate authority, learned counsel for the petitioners has also addressed the court to establish as to how the impugned appellate order does not distribute the cane between the petitioners and the respondent-sugar mill equitably who has submitted that the order passed by the appellate authority ought to be set aside and the matter be remitted back to him for consideration of the entire issue afresh between the petitioners vis-�-vis the respondent No. 6.

Opposing the aforesaid prayers strongly, learned counsel for the respondent No. 6 has vehemently argued that unless and until the petitioners are able to show and establish that the appellate order causes any prejudice to them, remitting the matter back to the appellate authority would not be warranted in this case. He has further stated that so far as the application for taking the documents on record is concerned, the respondent No. 6 while arguing the appeal did not press any of the contents mentioned in the said application and did not even rely on documents. Shri Dhruv Mathur, has further submitted that the findings recorded in the impugned order by the appellate authority are independent of the averments made in the said application and the documents annexed thereto and hence by not providing opportunity to rebut the arguments made and documents annexed with the said application, the appellate authority cannot be said to have erred in any manner. Shri Mathur has taken the Court to the reservation order passed in respect of the petitioners as well as respondent-sugar mill and has submitted that taking into account all the relevant factors including the guidelines contained in Rule 22 of the Sugarcane (Regulation of Supply and Purchase) Rules, 1954, the appellate authority has passed the order which does not warrant any interference by this Court in its extraordinary jurisdiction under Article 226 of the Constitution of India. In any case, his submission is that if this Court is of the view that the matter needs to be remanded to the appellate authority for decision afresh, the petitioners would have to establish the serious or material prejudice and until and unless they succeeds in establishing the same, it would not be appropriate for this Court to quash the order of the appellate authority and remand the matter to him.

The appellate authority while passing the impugned order dated 7.1.2016 has considered only two aspects while reversing the order passed by the Cane Commissioner, namely, (1) the distance between the purchase centres and the respective sugar mills and (2) the payment made by both the sugar mills to the cane growers. As to on what documents the appellate authority has given a finding regarding the distance of the cane purchase centres from the respective mills is not clear from a perusal of the impugned order dated 7.1.2016. The impugned order also does not indicate that the record from the Cane Commissioner was available before him while passing the impugned order; it only mentions that the report/note presented on behalf of the Cane Commissioner has been perused. The application moved by respondent No. 6 for taking certain documents on record is accompanied by certain documents issued by the Executive Engineer, Public Works Department, giving the details of the distances of the cane purchase centres from the respective mills. Certain other documents have also been annexed with the said application. The State Government while deciding the appeal has given a finding in respect of the distance between the cane purchase centres in question and the respective sugar mills. The documents annexed along with the application moved by respondent No. 6 also contained documents relating to this distance only. Thus, merely because it has been submitted by learned counsel representing the respondent No. 6 that during the course of hearing in the appeal, the said application was not pressed and the documents annexed thereto were not taken aid of to press the appeal by respondent No. 6 would not justify the course of action adopted by the appellate authority. Shri Mathur, at this juncture, has submitted that for establishing the distance between the purchase centres with the respondent-sugar mill, apart from the documents annexed with the application for taking documents on record, the respondent No. 6 while filing the appeal had annexed certain other documents along with memo of appeal itself. However, in view of the fact that the appellate order which is under challenge in this petition does not disclose as to on which documents reliance has been placed by the appellate authority to arrive at a conclusion regarding the distance, the aforesaid submission made by Sri Mathur does not appeal to the Court.

Coming to the second aspect which, though procedural in nature, affects seriously the rights of the respective parties on account of non-consideration of the prayer made by the petitioners for clubbing both the appeals, it may be noticed here that the said application is on record of the appellate authority. The application bears an endorsements for keeping the said application on file as well. The margin of the order-sheet also contains a noting made by the learned counsel appearing for the petitioners before the appellate authority that request had been made for clubbing the proceedings of all the appeals, however, the appellate authority while passing the impugned order appears to have completely ignored the said prayer made by the petitioner.

As to whether non clubbing of all the appeals by the appellate authority and hearing and deciding them together would prejudice the case of the petitioners or not are the matters which assume significance in the facts of this case. What is to be borne in mind is the purpose for which orders under Section 15 reserving or assigning the cane areas are passed by the Cane Commissioner. After assessing the estimated requirement of the cane to be consumed or crushed by each individual sugar mill under section 12 of the Act, the cane areas are reserved and assigned to every individual sugar mill. The estimate of requirement is specified by passing an order under section 12 of the Act and the cane areas are declared or assigned to meet the said estimate of requirement. If a particular sugar mill is aggrieved by the order passed under Section 15 of the Act in respect of three centres and files three separate appeals against such reservation orders, it would always be prudent for the appellate authority to hear and decide all the three appeals together. The reason for the decision simultaneously, on all the appeals is that it is over all quantity of sugar cane which is to be ensured under Section 15 of the Act by the Cane Commissioner and the appeals by the State Government against reservation orders are also to be decided to achieve the same purpose. Keeping in mind the requirement of a particular mill and over all circumstances affecting the supply of cane are some of he factors which are to be taken into account for reserving or assigning the area under section 15, which, in my opinion, would require simultaneous hearing of the appeals.

In the instant case, the other two appeals were also filed by the petitioner in which the respondent No. 6 herein has been arrayed as a respondent. The aforesaid view finds support from a judgment of this court rendered in the case of M/s. Diwan Sugars Ltd. v. Appellate Authority/Principal Secretary, Sugar Industries and Development, Lucknow and others, reported in [, 2006 (3) ALJ 103].

As has been observed above, since no rules have been framed by the State Government or any other authority regulating the procedures to be adopted by the State Government while hearing and deciding the appeal preferred under Section 15(4) of the Act against the order passed by the Cane Commissioner under Section 15(1) of the Act, it is well established and well recognized principles of equity, good conscience and fair play which are to be borne in mind by the appellate authority while deciding these appeals.

Keeping the aforesaid discussion in view and also taking into account the fact that in other two appeals preferred by the petitioners respondent No. 6 herein was arrayed as a respondent and the cane purchase centres which were the subject matter of those two appeals were claimed both by the petitioners as well as by the respondent No. 6, it would have been appropriate for the appellate authority, following the established the principles of equity, good conscience and fair play to have clubbed the appeals and decided the same simultaneously.

In any event, what is apparent in this case is that the appellate authority, though passed an order for keeping the application for clubbing the appeals on file, however, he did not consider the said prayer. For appropriate reasons, it would have been proper in a given case for the appellate authority to have even rejected the said prayer, however, by not adverting to the prayer made by the petitioner for clubbing the appeals, in my opinion, the appellate authority has not followed the principles which are to be followed while hearing the appeals like the present one.

I may also notice that the orders passed by the Cane Commissioner under Section 15 relating to declaration of reservation and assigned area are passed by him in exercise of his purely administrative powers and discretion. However, the Cane Commissioner does not decide any lis between the parties, rather he take takes into account the respective requirements and other factors including the guidelines given in Rule 22 of the Rules for assigning or reserving of particular area for a particular sugar mill. But, while hearing the appeal under Section 15 (4) of the Act, it cannot be said that the State Government exercises any administrative power. The said appellate power, looking into the entire scheme of and the purpose for which the Act has been enacted, in my considered opinion, is atleast quasi judicial in nature. It is the claim put forth by the two contending sugar mills over a particular reserved or assigned area which is decided in appeal. The said consideration by the appellate authority has to be made on the basis of the provisions contained in the Act and the Rules and various factors which are conducive not only to the sugar industry but also to the cane growers. Thus, in a sense the appellate authorities decides a lis between two sugar mills. Accordingly, the appellate authority has to be more cautious and thus, conduct the proceedings of appeal on the basis of the well established principles of equity, good conscience and fair play.

In view of the aforesaid discussions, I refrain from making any observation as regards the merit of the respective claims which have been put forth by the learned counsel for the petitioners as well as learned counsel representing the respondent No. 6. The writ petition, in the facts and circumstances of the case, is allowed. The order dated 07.01.2016, passed by the respondent No. 2, as is contained in Annexure No. 1 to the writ petition is hereby quashed. The entire matter is remitted back to the appellate authority to take decision afresh in the light of the observations made herein above in this judgment and also taking into account all the relevant factors including those enumerated in Rule 22 of the Rules. The decision by the appellate authority in the matter shall be taken within a period of ten days from the date of production of certified copy of this judgment.

It has been informed at the bar that the two appeals, namely, Appeal Nos. 137/2015-16 and 138/2015-16 which are between the same parties are listed before the appellate authority on 27.01.2016. Accordingly the Appeal No. 124/2015-16 shall also be listed on the said date.

There will be no order as to costs.