P. K. Jain, J. - (1.) -By the present writ petition under Article 226 of the Constitution of India, the petitioners have come up with two-fold prayers : (i) to quash the first information report dated 22.4.1997 appended as Annexure-1 to the writ petition in Case Crime No. 305 of 1997, under Sections 17 (i) and (iii) of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (hereinafter called as the Act) and Section 3/7 of the Essential Commodities Act, P.S. Chauri Chaura, district Gorakhpur and (ii) to issue a writ or direction in the nature of mandamus commanding the respondent No. 3 not to arrest the petitioners in pursuance to the aforesaid first information report and also not to investigate the case on the basis of the said report.
(2.) M/s. Saraya Sugar Mills Limited, a Company incorporated under the Companies Act carries on business of manufacturing sugar by "Vacuum Pan Process" in its sugar mills situated at Sardarnagar, district Gorakhpur. Petitioner No. 1 Satyajit Singh Majithia is its Managing Director, Sri Girijit Singh Majithia, petitioner No. 2 is its Senior Managing Director, petitioner No. 3 Sri V. K. Verma is its ex-occupier, petitioner No. 4 Sri S. K. Gupta is its present occupier and petitioner No. 5 Dr. S. K. Bhaskaran is its Vice-President. According to the allegations made in the first information report , during the crushing year 1995-96 the said Company purchased sugarcane worth Rs. 7,25,56,707.92 paise from Sahkari Ganna Vikas Samiti Limited, Sardarnagar, Gorakhpur. Till 19.4.97, the Company paid only Rs. 6 crore and 39 lacs to the said Sahkari Ganna Vikas Samiti. A sum of Rs. 86,58,707.92 paise was out-standing for the crushing year 1995-96 which ended on 1.6.96. In view of clause 3 (A) of the Sugarcane (Control) Order, 1966, the Mill was required to make payment of the sugarcane purchased by it within 15 days but on 15.6.96, a sum of Rs. 5,03,58,707.92 paise was outstanding and despite order dated 25.6.96 passed by the Sugarcane Commissioner, Lucknow, the entire payment was not made and still a sum of Rs. 86,58,707.92 paise was outstanding. During the crushing year 1996-97, sugarcane worth Rs. 5,14,41,460.00 was purchased by the Company but no payment was made by the Company. Thus, non-payment of the purchase of price by the Company within the stipulated period under sub-clause 3 (4) of the Sugarcane (Control) Order, 1966 is clear violation of the provisions of the said sub-clause 3 (A) and of Section 17 (i) and (iii) of the Act which is punishable under Section 3/7 of the Essential Commodities Act, 1955. The Company is also guilty of non-compliance of the order dated 25.6.96 of the Sugarcane Commissioner and has thus violated condition No. 4 of the licence issued to it under the U. P. Vacuum and Sugar Factories Licensing Order, 1969 which is also punishable under Section 3/7 of the Essential Commodities Act. The case of the petitioners is that the supply and purchase of the sugarcane is governed by U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and the Union of India (the Central Government) under the provisions of the Sugarcane (Control) Order, 1966 (Central) is authorised to fix the minimum price of the sugarcane payable by the Sugar Mill to the Cane-growers Societies which is known as statutory minimum cane price. During the crushing years 1995-96 and 1996-97, the Central Government fixed statutory minimum cane price at Rs. 47,36 and Rs. 49.32 paise respectively. There was no agreement between the Sugar Mill and the canegrower societies for payment of the agreed price and the State Government has not declared any additional cane price for the aforesaid crushing years. The Sugar Mill in question has paid the entire statutory minimum cane price fixed by the Central Government for the years 1995-96 and 1996-97. However, a recovery certificate dated 22.4.97 was issued by the Cane Commissioner, U. P. Lucknow validity of which was challenged by the petitioners by filing a Writ Petition No. 1661 (M/B) of 1997, and in the aforesaid writ petition, Lucknow Bench of this Court after hearing the parties directed M/s. Saraya Sugar Mills to deposit a sum of Rs. 3.20 crore and furnish a bank guarantee for half of the amount of difference in price fixed by the Central Government and the State advised price. The petitioners complied with the aforesaid order of the Lucknow Bench of this Court passed on 12.5.97 within the time granted by the Court. The case of the petitioners appears to be that since the minimum statutory price fixed by the Central Government under Section 3 (A) of the Sugarcane (Control) Order, 1966 (Central) has been paid by the petitioners and since there was no agreed cane price between the Sugar Mill and Cane-growers Societies and the State Government has not declared any additional cane price for the said crushing years, no amount remains due to be paid by the petitioners and consequently, no offence is made out. The petitioners' further claim that in view of the provisions contained in Section 23 of the Act read with Rules, 120 and 121 framed under the said Act, respondent No. 2 has no authority to lodge the first information report . It is also the case of the petitioners that in view of the provisions contained in Sections 22A and 22B of the Act the police has no authority to investigate the case. One Sri D. S. Tiwari, Sub-Inspector as well as the Investigating Officer representing respondent No. 3 filed an affidavit wherein it is stated that under Section 17 of the Act as well as under Order III, Rule 3 of the Sugarcane (Control) Order, 1966, the petitioners were liable for payment of price of sugarcane purchased by them from the cane-growers within 14 days from the date of delivery of the sugarcane. In the present case, there is violation of this condition of the Act and Sugarcane (Control) Order, 1966. That under Rules 120 and 121 of the Rules framed under the Act investigation was not barred, only cognizance by the Court was barred and that prima facie offence under Section 406, I.P.C. was also made out. It is also stated that inspite of the agreement between the parties and inspite of the provisions contained in the Act as well as Sugarcane (Control) Order, 1966, neither the sugarcane price was paid to the cane-growers within the time limit provided under the Act as well as the Sugarcane (Control) Order, 1966, nor the interest was paid. Hence, prima facie offence was made out.
(3.) RESPONDENT No. 2, who is Cane Development Inspector and who had lodged the first information report in his counter-affidavit stated that the Sugarcane (Control) Order, 1966, is issued by the Central Government in exercise of powers conferred by Section 3 of the Essential Commodities Act and simultaneously the U. P. Government has issued U. P. Vacuum Pan Sugar Factories Licensing Order, 1969. Contraventions of the provisions of these Control Orders and conditions of the licence are punishable under the Essential Commodities Act, the petitioners admittedly, are manufacturing sugar by Vacuum Pan process and as such the petitioners' Sugar Mill or Factory is governed by the provisions of U. P. Vacuum Pan Sugar Factories Licensing Order, 1969. That the provisions of Rule 120 of the Rules framed under the Act are applicable to launching the prosecution in the Court and not to initiation of the investigation by lodging of the first information report ; that respondent No. 2 has been appointed as Cane Development Inspector in view of the provisions of Section 2 (jii) of the Act and has been authorised to lodge the first information report ; that the Factory issued a "parchi" to the cane-growers at the time of purchase of the sugarcane and in the said 'parchi' the price is shown at the rate of Rs. 70 per quintal and thus there was an agreement to make payment at the rate of Rs. 70 per quintal. Section 10A of the Essential Commodities Act makes every offence punishable under the Act as cognizable and therefore, the police is not barred from investigating the case. We have heard Sri A. D. Giri, learned counsel appearing on behalf of the petitioners and Sri Prem Prakash, learned counsel appearing on behalf of respondent No. 2 as also the learned A. G. A. appearing for respondent Nos. 1 and 2.;