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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   897         OF 2014 [Arising out of Special Leave Petition (Civil) No.30515 of 2013]

Anand Agro Chem India Ltd. ..            Appellant(s)

-vs-

Suresh Chandra & Ors. ..             Respondent(s)

J U D G M E N T

C. NAGAPPAN, J.  

1. Leave granted.

2. This  appeal  is  directed  against  the  interim  Order  dated  

31.7.2013 passed by the High Court of Judicature at Allahabad in  

Writ  Petition  no.14936  of  2013  whereby  the  Division  Bench  

rejected  the  prayer  of  the  appellant  to  stay  the  arrest  of  the  

Directors and occupiers of the appellant company.

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-

3. The facts  in  nutshell  are  as  follows.   Respondents  1  to  3  

supplied sugarcane to the sugar mill of the appellant in the year  

2007-08, for which the appellant has not paid the price in spite of  

several representations made by the respondents 1 to 3 herein.  

This led to the filing of Writ Petition in Writ-C no.14936 of 2013 by  

respondents 1 to 3 seeking for issuance of the Writ of Mandamus  

directing the appellant herein to release the sugarcane price to  

them.  The Division Bench of the High Court after hearing both  

sides directed the District Magistrate, Hathras to take immediate  

action against the Directors and occupiers of the appellant-sugar  

mill against whom several orders have been passed under the U.P.  

Sugarcane  (Regulation  and  Supply)  Act,  1913  and  it  further  

observed in the order that the District Magistrate may in exercise  

of his powers cause arrest of the Directors and occupiers of the  

sugar mill to recover the dues and in the event of such arrest,  

they will not be released until they have paid the entire amount  

due against them.  The appellant-sugar mill aggrieved by the said  

order  preferred  a  Special  Leave Petition in  SLP(C)  no.16633 of

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2013  and  this  Court  by  order  dated  1.5.2013  dismissed  the  

petition by observing thus :

-         “We have heard Shri Sanjay Parikh,  learned  counsel  for  the  appellant  and  perused the record.

A  reading  of  the  order  under  challenge shows that the appellant has  not paid Rs.16.12 crores to the farmers  for the crushing year 2005-06 to 2009- 10,  which  includes  the  price  of  sugarcane,  the  cane  development  commission and the interest.  It is also  borne  out  from  the  record  that  vide  letter dated 24.11.2012, the Director of  the  appellant  had  assured  the  Cane  Commissioner that the company will pay  Rs.160  lacs  as  the  price  of  the  cane  within  two  weeks  and  an  amount  of  Rs.700 lacs in installments,  the first  of  which  will  be  paid  on  15.01.2013,  but  the company did not fulfill its assurance.

In  the  above  backdrop,  it  is  not  possible  to  find  any  fault  with  the  direction given by the Division Bench of  the High Court  and there is  absolutely  no  justification  for  this  Court’s  interference with the impugned order.

The  special  leave  petition  is  accordingly dismissed.……..”                          

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Thereafter  the  appellant-sugar  mill  filed  an  application  in  the  

pending Writ Petition in the High Court of Judicature at Allahabad  

seeking for stay of arrest of the Directors pursuant to the order  

dated 26.4.2013 and the Division Bench of the High Court after -

hearing both sides and after referring to the earlier orders held  

that  no  modification/vacation  of  the  order  dated  26.4.2013  is  

required and, accordingly, rejected the prayer of stay of arrest.  

Challenging the said order the appellant-sugar mill has preferred  

the present appeal.

4. We have heard Mr. Ram Jethmalani  and Dr. Rajeev Dhawan,  

Senior  Advocates  appearing  on  behalf  of  the  appellant,  Ms.  

Shobha  Dixit,  Senior  Advocate  appearing  on  behalf  of  the  

respondents  and  Mr.  Prabodh  Kumar,  Advocate  appearing  on  

behalf of the intervenor.

5. The contention  of  Mr.  Ram Jethmalani,  Senior  Advocate  is  

that the property of the sugar mill has already been attached to  

recover the dues and the sale notice has been issued and unless  

there is proof of the minimal fairness of willful failure to pay in  

spite  of  sufficient  means,  the  arrest  cannot  be  ordered  and  it

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would be violative of Article 21 of the Constitution of India and  

placed  reliance  on  the  decision  of  this  Court  in  Jolly  George  

Varghese and Another  vs.  The Bank of Cochin (1980) 2 SCC  

360.  He further contended that in any event the Director, whom  

he -

representing, is a senior citizen above 65 years of age and hence  

he cannot be arrested as a defaulter in payment of arrear of land  

revenue  as  stipulated  in  Section  171  of  the  Uttar  Pradesh  

Revenue Code, 2006.

6. When the matter was listed before this Court on 7.10.2013,  

Dr.  Rajeev Dhawan,  learned Senior  Advocate appearing for  the  

appellant  said  that  the  Directors  of  the  mill  undertake  to  pay  

Rs.4.55 crores representing fifty per cent of the total amount to  

the  concerned authority  within  a  period  of  six  weeks  and this  

Court  stayed  the  arrest  subject  to  fulfillment  of  the  condition.  

Again  the  matter  was  listed  on  19.11.2013  and  Dr.  Rajeev  

Dhawan, learned senior counsel said that by mistake he made a  

statement about the total amount payable by the writ petitioner  

but the amount is far less than that and requested for time to file

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additional affidavit on behalf of the appellant.  In the next two  

hearings the matter was adjourned on the request made by the  

appellant and thereafter the matter was heard.

7. Section 17 of the U.P. Sugarcane (Regulation of Supply and  

Purchase) Act, 1953 stipulates that the occupier of the sugar -

factory  shall  make speedy payment  of  cane  price and in  the  

event  of  default,  sub-Section  (4)  stipulates  that  the  Cane  

Commissioner  shall  forward  to  the  Collector  a  certificate  

specifying the amount of arrears of the cane price due from the  

occupier  and  the  Collector  shall  proceed  to  recover  the  said  

amount from such occupier as if it were an arrear of land revenue.  

Section 170 of the Uttar Pradesh Revenue Code, 2006 prescribes  

the process for recovery of arrears of land revenue, wherein it is  

mentioned that it may be recovered by anyone or more of the  

processes  mentioned  therein  which  includes  by  arrest  and  

detention  of  the  defaulter  and  attachment  and  sale  of  his  

movable property.

8. The Division Bench of the Allahabad High Court in its order  

dated  26.4.2013  has  directed  the  District  Magistrate,  Hathras,

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namely,  the  Collector  to  take  immediate  action  against  the  

Directors and occupiers of the appellant-sugar mill against whom  

several  orders  have  been  passed  under  the  U.P.  Sugarcane  

(Regulation and Supply) Act, 1913 and this Court has confirmed  

the  said  order.   The  Division  Bench  in  the  present  application  

considered the plea of the -

appellant  for  the  stay  of  arrest  and  after  hearing  both  sides  

rejected the said plea by the impugned order and we find no error  

in it.

9. We say  so  firstly  because  order  dated  26th April,  2013  

passed  by  the  Division  Bench  of  the  Allahabad  High  Court  

directing  the  District  Magistrate  to  take  immediate  action  

against  the  Directors  of  the  sugar  mill  has  already  been  

affirmed by this Court in appeal.  The question whether or not  

one of the Directors who is said to be 65 years old could be  

arrested as a defaulter and committed to prison under Section  

171  of  the  Uttar  Pradesh  Revenue  Code,  2006,  could  and  

indeed  ought  to  have  been  raised  by  the  appellants  either  

before the High Court or before this Court in appeal preferred

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against  the  order  passed  by  the  High  Court.  No  such  

contention was, however, urged at that stage.

10. Secondly,  because the company and its  Directors  have  

not made their  promises good by paying even the amounts  

which they had offered to pay. A plain reading of order dated  

1st May, 2013 passed by this Court in SLP (C) No.16633 of 2013  

extracted  above  would  show  that  the  company  and  its  

Directors -

had assured the Commissioner that they would pay Rs.160 lacs  

towards  price  of  sugarcane  within  two  weeks  besides  an  

amount of Rs.700 lacs to be paid in installments, the first of  

which installment was to be paid on 15th May, 2013. No such  

payment  was,  however,  made  by  the  company  and  its  

Directors.  That apart,  the statement made at the bar on 7th  

October, 2013 by Dr. Rajeev Dhawan, learned senior counsel,  

for the appellant that the Directors would pay Rs.4.55 crores is  

also sought to be withdrawn on the ground that the same was  

made under a mistake. It is evident that the company and its  

Directors  have been despite  promises  made on  their  behalf

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committing breach of such assurances on one pretext or the  

other.  

11. Thirdly, because there is nothing before us to suggest that  

the company and its Directors are incapable of raising funds  

for liquidating the outstanding liability towards dues payable to  

the  farmers.  Simply  because  the  sugar  factory  has  been  

attached, is no reason for us to assume that the company or its  

Directors are in any financial distress thereby disabling them  

from making the payments recoverable from them. The fact  

situation in the -

present  case  is,  therefore,  completely  different  from that  in  

Jolly George Varghese case (supra) relied upon by Mr. Ram  

Jethmalani.

12. In the light of the above, we see no compelling reason for us  

to interfere with the order passed by the High Court in exercise of  

our extraordinary jurisdiction. We regret to say that the amounts  

due to the farmers towards price of the sugarcane and incidentals  

remains to be paid to them for several years in the past thereby  

accumulating huge liability  against  the company.  That is  not  a

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happy situation nor can repeated invocation of the process of law  

by the appellant be a remedy for it.

13. The appeal is devoid of merit and is accordingly dismissed.    

        …………………………….J.

(T.S. Thakur)

……………………………J. (C. Nagappan)

New Delhi; January 24, 2014.