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1996 (10) TMI 511

..... n, A.P. Dhamija And K.K. Gogna, Advs. JUDGMENT 1. These appeals by special leave are filed against the judgment and order dated September 1, 1978 and September 4, 1978 passed by the Madhya Pradesh High Court, Indore Bench in Misc. Petition Nos. 140,139, 43 and 44 of 1977. 2. These appeals arise from the Sugarcane Control Order, 1966 (for short, the "Order") and the M.P. Sugarcane (Regulation of Supply and Purchase) Act, 1959 (for short, the "Act"). It is rather unfortunate that the sugarcane growers who spent their sweat and blood in raising the sugarcane in the years 1974-75, 1975-76 had to wait for 20 years to receive the price of the sugarcane supplied by them to the respondents' factories. Tin respondent in C.A. No. 1813/80 is a Hindu Undivided Family represented by its Karta and respondents in other appeals are factories. The Central Government had fixed the price of the sugarcane under Rule 3(1) of the Rules issued under Section 3(3)(c) of the Essential Commodities Act, 1955 at ₹ 8.60 per quintal. Various meetings of the sugarcane growers and the sugarcane factories and their associations, were convened by the Government of Madhya Pradesh and ult .....

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..... High Court is not valid in law. 4. Shri S.K. Jain, learned Counsel for the respondents, contended that Rules 3 and 5-A of the Order determine the liability to pay the price and the additional price. The Central Government having determined the price of the sugarcane under the Order, there is no power with the State Government, de hors the Order, to fix any agreed price. The concept of agreed price came into force on September 19, 1976 by virtue of Rule 3-A of the Order. Until then, there was no power to fix the agreed price. The State Government has, therefore, no power under the Act to fix any price since the field was occupied by the Order. Kaluram was not present and he had not agreed to the fixation of the increased price of the sugarcane. At best, it would be only a compulsion. Unless there is an individual written agreement between the factory and each sugarcane grower, there is no contract to pay over the same. Such of the amounts, de hors the Order, cannot be recovered as arrears of land revenue since such liability visits with penal consequences of prosecution under Section 7 of the Essential Commodities Act. He also contends that the retrospective effect cannot be given .....

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..... ction center or transfer or deposit the necessary amount in the Bank Account of the seller or the co-operative society, as the case may be." 7. Clause (3A) to Rule 3 was introduced by way of an amendment made in GSR 62(E), dated 2.2.1978. For payment of the price within 15 days with interest on the delayed payment at the rate of 15% per annum for the period of such delay beyond 14 days has been introduced. Earlier, it was covered by the Act. Clause (1) of Rule 3 fixes the minimum price of sugar payable by the purchaser of the sugarcane as fixed by the Central Government in the manner indicated therein. Clause (2) of Rule 3 is relevant for the purpose of this case which shows that "no person shall sell or agree to sell sugarcane to a producer of sugar or his agent, and no such producer or agent shall purchase or agree to purchase sugarcane, at a price lower than that fixed under Sub-clause (If. Section 23(3) of the Act, also couched in similar language, enables to novate by contract the minimum price fixed by the Central Government in respect of cess payable to Government. 8. This would clearly indicate that despite the fixation of minimum price under Clause (1) of Rule 3, .....

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..... e cane growers with the aegis of the appellant? As a fact, except Kaluram, all representatives of other factories were present at the time of 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 adjourned, he was not present. It has been averred in the counter-affidavit that the Secretary of the Sugarcane Factories Owners' Association had contacted 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 from 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 a consenting party and there was consensus 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 is not in dispute that thereafter the sugarcane growers supplied the sugarcane to the respondent factories and that the .....

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..... n making the payment of the price for a period exceeding fourteen days from the date of delivery he shall also pay interest at a rate of 7-1/2 per cent per annum from the said date of delivery up to the date of payment but the Cane Commissioner may, in any case direct, with the approval of the State Government that no interest shall be paid or be paid at such reduced rate as he may fix. (4) The Cane Commissioner shall forward to the Collector a certificate under his signature specifying the amount of arrears on account of the price of cane plus interest, if any, due from the occupier and the Collector on receipt of such certificate, shall proceed to recover from such occupier the amount specified therein as if it were an arrear of land revenue together with further interest up to the date of recovery. 13. 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 fa .....

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..... odd was the interest levied on delayed payment. It is seen that in view of the agreement, as upheld earlier, in addition to the minimum price, therefore, the liability has arisen under the Order for payment of the value of the sugarcane supplied by the growers. On account of the default in payment thereof, in terms of Clause (3) of Rule 3, since it was not paid, by operation of Section 20 of the Act, they are entitled to recover the same as arrears of land revenue. Therefore, the view of the High Court is clearly illegal. 18. Though Shri S.K. Jain is right in contending that unless there is an agreement between the parties, the liability cannot be fastened under the Order or the Act; but in view of the finding that there was an agreement between the parties, as held earlier, the ratio in the judgment in Kothari's case (supra) relied on by the Counsel is of not much assistance in the facts of this case. On the other hand, it supports the view we have expressed above. Therein, this Court upheld that if there is an agreement between the parties, then by operation of the Order the liability would be fastened on the sugar factory. In those cases, there was a finding that there was .....

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