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Supreme Court today issued notice in plea seeking a defined mechanism for payment of dues to Sugarcane Farmers, so as to avoid accumulation of the same and further save them from the vicious cycle of sugar mill being declared sick and their dues remaining unpaid.

A Division Bench of Chief Justice NV Ramana and Justice Surya Kant, while issuing notice returnable 3 weeks, said,

“A similar order has been passed by the Allahabad High Court”

To this, Senior Counsel Anand Grover informed the Court that it was passed back in 2013 and the present petition seeks it for all States, throughout the Country.

“Around 18,000 crores remains due upon the sugar mills to the cane farmers,” submitted Mr. Grover.

Grounds inter-alia preferred by the Petitioner:

• Non-payment, delayed payment causes grave prejudice to the Fundamental Rights of the sugarcane farmers, under Article 14, 19 & 21.
• On one hand they are not paid their dues and on the other, they are saddled upon with recovery notices for non-payment of agricultural loan amount.
• Such delayed payment causes Financial Hardships to the cane growers leading to social unrest, sometimes suicide of farmers.
• Deprives them of their Rightful claim of payment for the cane supplied to the sugar mills/factories.
• Sugarcane (Control) Order 1966 mandates payment of FRP (minimum price payable to farmers) within 14 days of cane delivery.
• Sugar factories borrow money from nationalised banks for running the operations of sugar factories and to pay cane dues to cane growers – However, money so borrowed is diverted to set up other businesses and dues of cane growers are not paid, and they are defrauded.

Questions of law inter-alia raised by the Petitioner:

• Whether non-compliance of Sugar (Control) Order, 1966 which stipulates that the payment to sugarcane suppliers shall be made within 14 days from the date of supply of sugarcane, Respondents ought to have taken strict actions against the defaulting sugar mills/factories for violation of said provisions?
• Whether sugar mills/factories can and ought to be prosecuted under the provisions of Essential Commodities Act, 1955 for violation of provisions under Sugar (Control) Order, 1966?
• Whether non-payment of cane dues to cane growers by sugar mills/factories amounts to breach of statutory obligations under respective state legislations and also the Fundamental Rights of the sugar cane growers and sellers under Article 21 of the Constitution of India?
• Whether inactions on part of state governments to take necessary steps for recovery of cane dues in accordance with law against defaulting sugar mills/factories amounts to violation of statutory obligations and breach of legal duty cast upon state functionaries by respective state legislations?

Prayer sought by the petitioner:

• Issue directions to the Union and the State Governments to file affidavits setting out the details of the amounts due, the amounts paid and arrears by the sugar mills to the sugar cane grower or their cooperatives for sale of their cane along with interest thereon;
• Issue directions to the Union and the State Governments to place on record, steps taken on (a) non-payment of dues and arrears to the cane growers (b) fraudulent diversion of funds
• Issue directions to Respondent States to attach sugar stocks lying with the Mills/factories and sell the same to pay amounts due upon cane growers (Reliance is placed on Allahabad High Court judgment in Rashtriya Kisan Mazdoor v. State of UP, 2014 SCC OnLine All 16421)

“The Hon’ble Minister of State for Food and Consumer Affairs, in a reply to a query in the Rajya Sabha on February 12, 2021, mentioned that sugar mills owe Rs 18084 crores to cane farmers as on January 1, 2021.

He further informed that owing to various measures taken by the government, the cane dues of farmers for sugar seasons 2017-18, 2018-19 and 2019-20 are Rs 199 crore, Rs 410 crore and Rs 766 crore, respectively, as on January 31, 2021.

Sugar mills of Uttar Pradesh owed Rs 7555.09 crores, followed by Karnataka at Rs 3585.18 crore and Maharashtra at Rs 2030.31 crores,” the plea adds.

Advocate for the petitioner: Mr. Krishan Kumar

Arguing Counsel: Mr. Anand Grover

Case Title: Raju Shetti v. Union of India