JUDGMENT Rajiv Sharma, J.
1. Admit.
2. Issue notice to the respondent returnable at an early date. The respondent may file counter affidavit/objection.
3. Learned Counsel for the petitioner has submitted that the petitioner company is facing a liquidity crunch on account of the fact that there was steep fall in sugar prices and despite all efforts an amount of Rs. 81.80 crores was still payable to the farmers against the cane price arrears for the crushing season 2006-07 apart from other statutory dues i.e. cane commission, cane purchase tax, excise duty, salary to staff, wages of labourers, etc. The sugar release order dated 31.1.2008 passed on a reference under Section 3(e) of the Essential Commodities Act, 1955 read with Sugar Control Order, 1966 by the respondent was inadequate as in the said reference, the petitioner has prayed for release of 3.00 lakhs M.T. of sugar in addition to the normal release, but the opposite parties while passing the aforesaid orders has only allowed release of 33059.40 MT of sugar which is inadequate. On the basis of the release order dated 31.1.2008, the amount which can be realized after the sale will be only to the tune of Rs. 41.32 crores as against the total requirement of over Rs. 530 crores, i.e., 449.25 crores liability for the current crushing season 2007-08 plus Rs. 81.80 crores of 2006-07 being the cane price arrears.
4. He further submits that the order dated 31.1.2008 has been passed in a mechanical manner without assigning any reason for reducing the release of sugar from 3.00 lakhs M.T. of sugar to 33059.40 MT of sugar. His further contention is that this Court in the case of Shakumbari Sugar & Allied Industries Ltd. v. Union of India and Ors. held that the restriction placed on the producer of sugar to sell free-sale sugar beyond the quota is illegal and violative of Article 19 (1) (g).
5. Counsel for the petitioner further contends that in order to pay arrears of cane price of cane growers in the crushing season 2006-07, petitions were preferred and this Court passed the orders. Copies of the interim orders passed in Writ Petition Nos. 4446 (MB) of 2002, M/s. K.M. Sugar Mills Ltd. and Anr. v. Union of India and Ors. and W.P. No. 11764 of 2002, Shakumbari Sugar and Allied Industries Ltd. v. Union of India and others as well as Writ Petition No. 8054 (MB) of 2007; Balrampur Chini Mills v. Union of India and Ors. have also been annexed to the writ petition.
6. Considering the facts and circumstances of the case, it is provided that the petitioner shall be permitted to sale 3 lakhs M.T. sugar in the current crushing season. The Central Government shall issue release order accordingly in respect of free sale sugar within a period of 10 days from the date of receipt of a certified copy of this order, failing which the petitioner shall be at liberty to sale the above quantity of free sale sugar in the open market on his own because of non issuance of the release order, the petitioner shall intimate about the sale and place of sale to the concerned District Magistrate.
7. Learned Counsel for the petitioner undertakes that the amount so received from the sale of the aforesaid quantity of sugar, the same shall be paid to the cane growers being arrears of sugarcane dues within one week from the date of sale and the petitioner will inform about the same to the concerned District Magistrate. In case the petitioner fails to clear cane dues out of the aforesaid amount so received, it will be open for the District Magistrate to recover the same and make payment to the sugarcane growers towards the sugarcane dues.
8. The petitioner is directed not to divert the aforesaid amount towards any other dues except the cane dues to be payable to the cane growers. It is clarified that the amount out of the sale of sugar shall be utilized for clearing the dues of the farmers and it is only after clearing the dues of the farmers, if the excess amount is available then it should be utilized towards the payment of statutory liabilities.