AI Structured Summary
Not yet generated for this judgment
Judgment
P. Sathasivam, J.—Aggrieved by the proceedings of the Commissioner of Sugars, Chennai dated 09.11.2002, Padalam Cooperative Sugar
Mills Cane Growers Association, Salavakkam through its President K.P. Janakiraman has filed W.P. No. 44755 of 2002 to quash the same and
direct the respondents 1 to 3 to transfer the adjoining sugar area of Maduranthagam Sugar Mills Ltd., for the purpose of permitting farmers to plant
and harvest sugar cane to M/s. S.V. Sugar Mills Ltd., situated in Kancheepuram District, instead of Cheyyar Cooperative Sugar Mills, Thiruthani
Cooperative Sugar Mills. Maduranthakam Cooperative Sugar Mill Area Cane Growers Association through its General Secretary has preferred
W.P. No. 2443 of 2003, challenging the very same order on the same grounds.
The case of the Cane Growers Association as stated in W.P. No. 44755 of 2002 is briefly stated hereunder:
The petitioner Association has been formed to protect the interest of the Cane Growers, who are farmers supplying sugar cane to Padalam
Cooperative Sugar Mills, which is functioning in the name of Maduranthagam Cooperative Sugar Mills situated at Padalam, Kancheepuram
District. Padalam Cooperative Sugar Mills was started in the year 1960 and has been continuously functioning up to the year 1999-2000. Due to
financial crunch, the Mill was not able to crush the entire sugar cane planted in the area allotted to the said Mills. Due to the said difficulty faced by
the Sugar Mill, sugar cane from the area were diverted to other Sugar Mills situated in Chingleput District as well as other Districts.
During the cane year 2001-2002, the Maduranthagam Cooperative Sugar Mills did not function at all. The employees of the said Mills were
either laid off or transferred to some other Cooperative Sugar Mills. In such a situation, the sugar cane grown in the area of the said Mill were
diverted to other Sugar Mills, such as S.V. Sugar Mills, Kancheepuram Taluk and the Cooperative Sugar Mills situated at Thiruthani and Cheyyar.
The S.V. Sugar Mills situated at Palayaseevaram, near Kancheepuram is closer to the Madhuranthagam Sugar Mill area and the other two
Cooperative Sugar Mills are situated at far off places. The Thiruthani Cooperative Sugar Mills and Cheyyar Cooperative Sugar Mills are already
having sufficient supply of sugar cane and crushed more than the capacity in many seasons and will not be interested in drawing the cane from the
members of the petitioner Association. The members of the Maduranthangam Cooperative Sugar Mills have already made a representation to the
Commissioner of Sugar to reorganise certain areas to S.V. Sugar Mills. Without considering all the required details and without taking into
consideration of the interest of the framers and cane growers of Madhuranthagam Cooperative Sugar Mills area, the Commissioner of Sugar has
passed an order in his proceedings dated 09.11.2002, temporarily transferring certain areas from Maduranthagam Cooperative Sugar Mills,
Kacnheepuram District and temporarily allotting them to Tiruthani Cooperative Sugar Mills, Tiruvalangadu and Cheyyar Cooperative Sugar Mills
Ltd., Tiruvannamalai District from 2002-2003 season. Since the said order has been passed without taking into consideration of the
representation, which is highly arbitrary and also in violation of principles of natural justice, having no other effective remedy, approached this
Court. Similar averments have been made in W.P. No. 2443 of 2003.
The Commissioner of Sugar, Chennai 35 - third respondent has filed a counter affidavit in W.P. No. 44755 of 2002. The Maduranthagam
Cooperative Sugar Mills, which was expanded as 2500 TCD with effect from 12.06.1995, faced severe financial problem due to continuous
payment of high cane price. Apart from various other factors like excess employees, poor price realisation from sale of sugar, high production cost
of sugar, heavy interest burden on loan and non availability of adequate cane to meet the full capacity utilisation. Thus the Mill started incurring
heavy loss year after year and the accumulated loss of the Mills reached Rs. 101.10 crores as on 31.03.2002. In these circumstances, the
Government have ordered to stop crushing during 2001-2002 and advised to take action under Industrial Disputes Act to lay off the workmen due
to shortage of raw material i.e., sugar cane. Therefore, the cane available with the Mills was diverted to nearby Sugar Mills by the Commissioner
of Sugar by virtue of powers conferred in Clause 6 (2) of Sugar Cane (Control) Order, 1966. After discussing the matter in the Chief Executives
Meeting of all Cooperative Public Sector Mills held on 29.10.2002 and after ascertaining the requirement of cane to Cheyyar Cooperative Sugar
Mills and Tiruttani Cooperative Sugar Mills, Commissioner of Sugar decided to allot the areas of Maduranthagam Cooperative Sugar Mills to
these two Mills temporarily to maintain rights and responsibilities of the registered members of Maduranthagam Cooperative Sugar Mills during
planting season 2002-2003. As M/s. S.V. Sugars being a Private Sector Sugar Mills which has crushed cane above full capacity utilisation during
2001-2002 season and as there was no want of cane situation, it was not considered for cane area allotment for 2002-2003 season. The
impugned order was passed with a view to protect the interest of cane growers. The said order is in order. The areas of Maduranthagam
Cooperative Sugar Mills allotted to Cheyyar and Tiruttani Cooperative Sugar Mills is only a temporary measure and not a permanent one. As far
as the distance criteria is concerned, the transport charges over and above 10 Kms. has been borne by the cane receiving Mills. Hence, there is no
loss to the Cane Growers of Cheyyar and Tiruttani Cooperative Sugar Mills. With regard to price factor, for the past four years the
Maduranthagam cane growers were getting only a minimum price based on the peak period recovery obtained during previous season as their
recovery was very low. Thus, there is no loss to them while comparing the cane price which they are getting for the last four years from
Maduranthagam Cooperative Sugar Mills. Because of the price fixed by the State Advised Price, the cane growers were in advantageous situation
by supplying cane only to Cooperative Sugar Mills. Further, the question of allotment of area to S.V. Sugars does not arise since necessary
sufficient cane areas i.e., Uthiramerur and Kancheepuram Taluks had already been transferred from Maduranthakam Cooperative Sugar Mills to
S.V. Sugars on permanent basis and now they are having sufficient cane area and achieving more than 100% capacity utilisation. The said
arrangements are made only as a temporary measure and not on permanent basis, which is only to safeguard the interest of the cane growing
members of Maduranthakam Cooperative Sugar Mills and to safeguard the interest of the standing crop, as the latter Mills have gone for lay off.
In the light of the above pleadings, I have heard Mr. S. Ashok Kumar, Mr. K. Vijayan learned senior counsel for the petitioners, Mr. A.
Venkatesh, learned Additional Government Pleader for respondents 1 to 3 and Mr. D. Hariparanthaman, learned counsel for the 5th respondent.
The only point for consideration in these writ petitions is, whether the Commissioner of Sugar is justified in temporarily transferring certain areas
from Madhuranthagam Cooperative Sugar Mills to Tiruttani Cooperative Sugar Mills Ltd., and Cheyyar Cooperative Sugar Mills Ltd., from 2002-
2003 season?
It is seen that both the Association have been formed to protect the interest of the cane growers, who are farmers, supplying sugar cane to
Padalam Cooperative Sugar Mills, which is functioning in the name of Madhuranthagam Cooperative Sugar Mills situated at Padalam,
Kancheepuram District. There is no problem for the said Mill till 1999-2000. The said Sugar Mill faced problems both financially and technically
during the year 2000-2001 and the Mill was not able to crush the entire sugar cane planted in the area allotted to it. It is also seen that due to the
said difficulty faced by the Mill, sugar cane from the area were diverted to other Sugar Mills situated in Chingleput District and other Districts.
It is not disputed that during the cane year 2001-2002, the Madhuranthagam Cooperative Sugar Mills did not function. The employees of the
said Mills were either laid off or transferred to some other Cooperative Sugar Mills. In such a situation, the sugar cane grown in the area of the said
Mill were diverted to other Sugar Mills, particularly to S.V. Sugar Mills (Private Mill), Kancheepuram Taluk and the Cooperative Sugar Mills
situated at Tiruttani and Cheyyar. According to the petitioners, S.V. Sugar Mills situated at Palayaseevaram near Kancheepuram is closer to
Madhuranthagam Sugar Mill area and other two Cooperative Sugar Mills, namely, Tiruttani and Cheyyar Cooperative Sugar Mills are having
sufficient supply of sugar cane and crushed more than the capacity in many seasons. It is their apprehension that those Mills will not be interested in
drawing cane from outside area other than notified for them. It is the plea of the petitioners that in such a situation, in the interest of cane growers,
the sugar cane grown in the area of Madhuranthagam Cooperative Sugar Mills should be allowed to be supplied to the nearby sugar factory i.e.,
S.V. Sugar Mills Ltd., which has insufficient cane in its area. It is brought to my notice that considering all the above practical and other aspects,
both the Associations have submitted a representation to the respondents stating that the adjoining sugar cane area of Madhuranthagam
Cooperative Sugar Mill should be reorganised and attached to S.V. Sugar Mills. The representation of Madhuranthagam Cooperative Sugar Mills
Cane Growers Association dated 30.10.2002 addressed to the Deputy Secretary to Chief Minister with a copy to Commissioner of Sugar,
Madras and Industries Secretary, Madras 9, finds place at page 11 of the typed set filed in WP. No. 44755 of 2002.
It is vehemently contended that their detailed report highlighting their grievance and requesting the concerned authorities to permit them to supply
sugar cane to the nearby Sugar Mill, namely, S.V. Sugar Mills. A perusal of the impugned order of the Commissioner of Sugar dated 09.11.2002
does not show that the representation of the said Association dated 30.10.2002 was considered. Though the first paragraph of the order refers
about the representation of Madhuranthagam Cooperative Sugar Mills dated 30.10.2002, the other only paragraph, namely para 2 shows that the
Commissioner of Sugar has not even considered the request of the petitioners Association.
In this regard, it is relevant to refer that as per the orders of the Government in G.O.(D) No. 433, Labour & Employment Department dated
03.06.2002, the management of Madhuranthagam Cooperative Sugar Mills were permitted to lay off their workmen for a period of six months
from 03.06.2002 and by virtue of subsequent order, namely G.O. (D) No. 135 Labour & Employment Department dated 24.01.2003, the
Government have granted permission u/s 25-M of the Industrial Disputes Act, 1947 to the Madhuranthagam Cooperative Sugar Mills, Padalam to
lay off 425 workmen for six months from the date of issue of the said order i.e., 24.02.2003. It is clear that from June, 2002 till end of July, 2003,
the workmen of Madhuranthagam Cooperative Sugar Mills were laid off and no crushing of cane was taken place in the said Mill in the near future.
At this juncture, it is relevant to note that even in the previous years, when Madhuranthagam Cooperative Sugar Mills conveyed their inability
to crush all the sugar canes due to various reasons, on the representation of the petitioners Association, the farmers were permitted to supply their
sugar cane to the nearby private Mill, namely S.V. Sugars. Even according to the information furnished by the Commissioner of Sugar in his
counter affidavit, during 2001-2002 season, Tiruttani Cooperative Sugar Mills has lifted 26,631 Mts. of cane from Madhuranthakam Cooperative
Sugar Mills, they stopped their crushing on 09.04.2002 and they were unable to lift more, from Madhuranthakam Cooperative Sugar Mills.
Though S.V. Sugars is already self sufficient in the cane front, the fact remains, the other two Cooperative Sugar Mills, namely, Tiruttani and
Cheyyar Cooperative Sugar Mills were not in a position to exhaust their quota allotted to them. Though distance criteria is concerned, the transport
charges over and above 10 kms. has been borne by the cane receiving Mills, it is the complaint of the petitioners that S.V. Sugars is nearer to
Madhuranthagam Sugar Mill cane area, they are providing all assistance like arranging bank loan, giving security for the same and prompt payment
of cane price to the farmers.
Though it is stated that Cooperative Sugar Mills are giving State Advised Price, i.e., ranging from Rs. 130 to Rs. 180 per MT of cane more
than private sugar Mills in addition to the statutory minimum price, admittedly, due to continuous loss of Cooperative Sugar Mills, Government
took a decision to desist from paying State Advised Price, since 2001-2002 season. (vide para 14 of the counter affidavit of the Commissioner of
Sugar). In such a circumstance, it cannot be claimed that the cane growers are in a better position with the Cooperative Mills, than the Private
Sugar Mills.
Though learned counsel for the impleaded 5th respondent has contended that the Commissioner of Sugar is justified in temporarily diverting the
cane from Madhuranthagam Cooperative Sugar Mills to the other two Mills, the details furnished by the petitioners Association were not
considered by the Commissioner of Sugar before passing the impugned order. Inasmuch as the Commissioner of Sugar is vested with power under
the Sugar Cane (Control) Order, 1966 to demarcate the area of operation, it is the duty and responsibility of the authority to consider all the
relevant materials, even if the arrangement is for only a temporary period, because the paramount interest of the cane growers are very relevant. In
other words, the decision of the authority must always be beneficial to the cane growers. Merely because the Government has to encourage the
Cooperative Sugar Mills, the same cannot be done at the cost of cane growers. I am satisfied that the Commissioner of Sugar failed to consider all
the relevant materials as represented by the petitioners in their representation dated 30.10.2002. The Commissioner of Sugar is not justified in
asking the cane farmers of Madhuranthagam Cooperative Sugar Mills to supply sugar cane to a far off Sugar Mills, which could cause undue
hardship and irreparable loss. It is to be noted that in previous years, the very same Commissioner has permitted the cane growers to supply their
canes to the nearby S.V. Mills, when Madhuranthagam Cooperative Sugar Mill was not in a position to crush the sugar cane. I am also satisfied
that it is unjustifiable for the respondents, particularly the Commissioner of Sugar, to ignore the interest of the members of the petitioners
Association and others i.e., farmers of the cane growers Association of the Madhuranthagam Cooperative Sugar Mills area to transfer the area
temporarily to a far off Sugar Mill area.
The petitioners have also demonstrated before me that the prices for sugar cane supplied to S.V. Sugar Mills is self sufficient than what is paid
to Tiruttani and Cheyyar Cooperative Sugar mills. They supplied the following details, namely, S.V. Sugar Mills have fixed Rs. 750/- per tonne for
sugar cane, whereas the other Cooperative Sugar Mills have declared only statutory minimum price, which is Rs. 645/- per tonne by Tiruttani
Cooperative Sugar Mills, Rs. 682/- per tonne by Cheyyar Cooperative Sugar Mills. As rightly contended, no prejudice or loss to the respondents
if the sugar cane growers of Madhuranthakam are transferred to nearby Mill, namely S.V. Sugar Mills on a temporary basis.
During the course of argument, Mr. Ashok Kumar, learned counsel for the petitioner in WP. No. 44755 of 2002 has produced a letter dated
10.03.2003 from the General Manager, Personnel & HRD, S.V. Sugar Mills Ltd., addressed to the President, Padalam Sugar Mills Cane
Growers Association, Salavakkam wherein it is stated that,
..... we are willing to receive the entire cane for crushing our Mills even by extending our crushing season provided an order to this effect issued
either by this Hon''ble High Court or such other authorities . Regarding your request for supply of seed, financial assistance with tie-up
arrangements with the bank development activities for planting the sugar cane crop during the current season, we are willing to supply you the seed
and extend all help relating to cane developmental activities till Madhuranthagam Cooperative Sugar Mills revives. In case Madhuranthagam
Cooperative Sugar Mills start functioning we have no objection whatsoever in sending the cane so developed by us crushing in Madhurathagam
Cooperative Sugar Mills.
The above statement shows the willingness of S.V. Sugar Mills and it satisfies the requirement of the members of the petitioner Association.
In the light of what is stated above, the impugned proceedings of the Commissioner of Sugars dated 09.11.2002, is quashed and the respondents
1 to 3 are directed to transfer the adjoining sugar area of Madhuranthagam Sugar Mills for the purpose of permitting the farmers to plant and
harvest sugar cane to M/s. S.V. Sugar Mills, situate in Kancheepuram District instead of Cheyyar and Tiruttani Cooperative Sugar Mills for the
2002-2003 season. After expiry of the season, it is for the Commissioner of Sugars to consider the interest of the cane farmers, if the same
position continuous in Mnadhuranthagam Cooperative Sugar Mills. The writ petitions are allowed. No costs. Consequently, connected WPMPs.,
are closed.