V.K. Shukla, J. - (1.) Apart from other issues, the pivotal issue raised/canvassed and to be answered is as to whether the power to waive the interest on delayed payment of Cane price for the season 2012-13; 2013-14 and 2014-15 has been rightly exercised under the 1953 Act, by the Cane Commissioner with the approval of the State Government.
(2.) Rashtriya Kishan Mazdoor Sangathan has been espousing cause of the farmers for ensuring payment of balance cane dues along with statutory interest.
(3.) This Court after hearing the parties vide its order dated 09.01.2014 held that payment of interest for delayed payment was a right and not bounty and directed payment of the cane dues inclusive of interest within a period of 3 weeks. The relevant portion of the order is reproduced as under for ready reference: "In the counter affidavit which has been filed by the State, it has been stated that the statutory provisions of Section 17(3) of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 providing for payment of interest on the delayed payment of sugarcane price is subservient to the wisdom of the Cane Commissioner with the approval of the State Government and while the State Government acknowledges that the wisdom of the Cane Commissioner must be fair and equitable, sugarcane growers are not entitled to seek interest on delayed payment of sugarcane price as a matter of right. This interpretation which is sought to be placed by the State is plainly contrary to the provisions of Section 17. Section 17(1) obligates the occupier of a factory to make provisions for speedy payment of the price of cane purchased by him as may be prescribed. Under sub-section (2), a liability is cast on the occupier of a factory upon the delivery of the cane to pay immediately the price of the cane so supplied together with all other sums connected therewith. Where there is a default in the payment of the price for a period exceeding 15 days from the date of delivery, the occupier of the factory is made liable under sub-section (3) of Section 17 to pay interest which, under the proviso, is prescribed at 12% per annum. However, the Cane Commissioner is empowered to direct, with the approval of the State Government, that no interest shall be paid or interest shall be paid at such reduced rate as he may fix. These provisions make it abundantly clear that there is a statutory obligation which is cast on the occupier of a factory not merely to pay price of the sugarcane purchased but any default in the immediate payment of price beyond the period of 15 days attracts a mandatory obligation to pay interest as prescribed under sub-section (3) of Section 17. The Cane Commissioner is empowered, with the approval of the State Government, to direct that either no interest shall be paid or that it would be paid at the reduced rate. From this, three consequences emerge. Firstly, there is a statutory entitlement of the supplier of the cane to the occupier of a factory to receive the payment of the cane price together with interest. Secondly, this is entitlement is as a matter of right and not a bounty. The farmers have no discretion since they are duty bound to supply cane to the sugar factory to which they are directed. Equally, there is a corresponding obligation to pay to the farmers the cane price and where there is a default in payment beyond a period of 15 days, to pay interest. Thirdly, whether the interest should be paid or not does not lie in the subjective wisdom of the Cane Commissioner. The Cane Commissioner is empowered to direct, in a given case, that interest may not be paid or should be paid at a reduced rate. This is subject to two important safeguards. The first is the approval of the State Government. When the State Government grants its approval to such a proposal, it cannot do so at its own whims and fancy. The interest of the farmers cannot be ignored and it is only when there are important reasons having a bearing on public interest that the power can be exercised in a given case. The Cane Commissioner, before he moves the State Government, must also be satisfied on the basis of objective considerations that reasons have been established for reducing or waiving the payment of interest. At this stage, it should also be noted that the issue in regard to the liability to pay interest has been dealt with in a judgment of the Supreme Court in State of M.P. v. Jaora Sugar Mills Ltd. & Ors., reported in (1997) 9 SCC 207 . It has been held that, as a matter of fact, interest is liable to be paid at the rate of 15% per annum under sub-clause (3A) of the Sugar Cane Control Order 1966. In the present case, since the State Government has now indicated to the Court that in pursuance of central assistance which has been made available, the process of disbursement of dues is to be completed within a period of three weeks from today, we would stand over the hearing to 30 January 2014. We would now expect and accordingly direct the State Government to perform its obligation to ensure the due payment of the arrears of cane price to the farmers within a period of three weeks from today in terms of the assurance made to the Court. We clarify that it would be inclusive of the statutory liability to pay interest from the applicable dates in accordance with law. Matter to stand over to 30 January 2014.";