Their Rights Are Paramount: Bombay High Court Declares That Sugarcane Farmers Are Entitled To FRP At Beginning Of Crushing Season
The Bombay High Court observed that the State Government has no authority or jurisdiction to deny to the farmers, payment of FRP as determined by the Central Government.
The Bombay High Court has declared that the sugarcane farmers are entitled to the Fair Remunerative Price (FRP) for the sugarcane supplied by them to the sugar factories, at the beginning of the crushing season.
A batch of Writ Petitions were filed before the Court raising a common challenge to the Government Resolution dated February 21, 2022, issued by the State Government in its Cooperation, Marketing and Textiles Department, whereby a policy was formulated for payment of price of sugarcane, namely FRP to the farmers being contrary to the Sugarcane (Control) Order, 1966 (SCO 1966) issued by the Central Government.
A Division Bench comprising Justice G.S. Kulkarni and Justice Advait M. Sethna held, “… in our opinion, the rights of the agriculturist / farmers to receive the FRP as mandated by Clause 3 read with sub-clause (3) and (3A) thereof are paramount, which are intended to be safeguarded by law. … It is declared that sugarcane farmers are entitled to the Fair Remunerative Price (FRP) for the sugarcane supplied by them, to the sugar factories at the beginning of the crushing season, as determined by the Central Government as per Clause 3(1) and Clause 3(3) of SCO. 1966.”
The Bench observed that the State Government has no authority or jurisdiction to deny to the farmers, payment of FRP as determined by the Central Government as per Clause 3(1) of SCO 1966 within 14 days of the supply of sugarcane to the sugar factories as mandated by sub-clause (3) of Clause 3.
Senior Advocate Arshad Shaikh, Advocates Yogesh Pande, Ranjit Agashe, and S.R. Borulkar appeared for the Petitioners while Advocate General Birendra Saraf, Senior Advocate Anil V. Anturkar, and Advocate Parag Vyas appeared for the Respondents.
Case Background
The Petitioners were agriculturists/sugarcane farmers who have been cultivating sugarcane since past 10-30 years. The Central Government introduced the concept of FRP to be paid to sugarcane growers in or about the year 2009. The object behind the FRP was to ensure that the sugarcane growers are receiving a fair and adequate minimum price for the sugarcane supplied by them to the sugarcane factories. The intention of the Central Government was to protect the sugarcane growers from the organized sector of sugar factories in India. By an amendment to the definition clause as inserted with effect from October 22, 2009, the definition of FRP was inserted. The most imperative in the context of the proceedings was the mandate of Clause 3(2) of the SCO 1966, around which the entire controversy revolved that an obligation on the purchaser of the sugarcane inter alia to pay within 14 days from the date of delivery of the sugarcane to the seller and further sub-clause (3A) providing that when a producer of sugar or his agent fails to make payment for the sugarcane purchased within 14 days from the date of delivery, he shall pay interest on the amount due at the rate of 15% p.a. for the period of such delay beyond 14 days.
The Petitioners contended that although the said mandatory provisions were subsisting and binding at all material times, on the stakeholders including the State Government, however, contrary to the mandate of the said provisions, the State Government issued the impugned Government Resolution, providing that from the sugar crushing season for the year 2021-22, FRP of sugarcane payable to cane farmers be calculated based on sugar recovery of same year, hence, until final rates of FRP are finalized, base recovery for revenue circle of Pune and Nashik be calculated with basic minimum recovery as 10% and for Aurangabad, Amravati and Nagpur, minimum recovery base for calculating FRP shall be at 9.50% with a further provision that transportation and harvesting (T&H) cost to be deducted from sugarcane price payable to the farmers.
Contentions
The Petitioners contended that the impugned Government Resolution was contrary to the sugarcane pricing policy issued by the Government of India, and if the same is implemented, it shall adversely impact sugarcane farmers within the Maharashtra State inasmuch as the farmers would receive much lesser amounts, for the sugarcane supplied to the sugar factories. It was further contended that the said Government Resolution is contrary to the provisions of the Maharashtra Regulation of Sugarcane Price (Supplied to Factories) Act, 2013.
Court’s Observations
The High Court in the above context of the case, noted, “… considering the provisions of SCO 1966 as also the provisions of notification dated 22 October, 2020 which delegate the powers under Clause 3(1) on the State Government for fixing FRP mill-wise depending on its location, as also considering the powers vested with the State Government under Section 5 of the 2013 Act, we are of the opinion that such powers are quite compartmentalized.”
The Court was of the view that the agriculturist/farmers/sugarcane producers are not only entitled for the FRP being payable within 14 days of the supply as per the provisions of SCO 1966, but also for a determination of final price as may be arrived by the State Government in terms of its decision under sub-section (3) of Section 5.
“The element of FRP under Clause 3(1) as categorically stated by the Central Government in the reply affidavit can never be on the performance and/or final sugar price for the ongoing season and necessarily it is on the basis of prior season. However, as noted above, any final determination of the FRP on the basis of the final sugar produced for the season is an exercise to be undertaken after payment of the initial FRP to the sugarcane growers/farmers/agriculturist as per the provisions of Clause 3(3) of SCO 1966”, it added.
Furthermore, the Court remarked that traditionally our country is predominantly known to be an agrarian, wherein, a vast population of the country depends on agricultural and the related activities, for their livelihood and the agriculturist/farmers, hence, play a pivotal role in supporting the food requirements of the vast population the country has namely more than about 140 crores.
“The agriculturist / farmers producing sugarcane certainly play a significant role in their contribution to the sugar industries, which are scattered all over the country. It is for such reason sugarcane and sugar both are brought within the purview of the EC Act by the Central Government and are controlled items”, it said.
The Court emphasised that there cannot be a situation that the farmers become debt ridden, as it is only on the receipt of the fair price for the sugarcane as supplied by them, depends their further activities, for the next crushing season.
“Farmers / agriculturists certainly are not persons of commerce they are not capitalist are dependent fully on the agricultural income (albeit some exceptions who may not at all be the sufferers). We cannot be oblivious of the large numbers of subsidies, benefits, advantages and schemes the Government showers on sugar factories, the reasons which we need not delve upon”, it also remarked.
The Court said that although such benefits are granted to the sugar factories, the agriculturists / farmers can never be neglected nor can their rights be suppressed and or they could be financially exploited.
“… insofar as the sugar factories / sugar mills are concerned, any delayed payment of the fair price to the farmers or its non payment for some reason would certainly be an economic and / or a commercial consideration. Thus livelihood of the farmers / agriculturists can never be a matter of comparision to the commerce and economics of a sugar factory”, it concluded.
Accordingly, the High Court allowed the Writ Petitions and quashed the impugned Government Resolution.
Cause Title- Raju Alias Devappa Anna Shetti & Ors. v. The State of Maharashtra & Ors. (Neutral Citation: 2025:BHC-AS:12379-DB)
Appearance:
Petitioners: Senior Advocate Arshad Shaikh, Advocates Yogesh Pande, Ranjit Agashe, S.R. Borulkar, Namrata Agashe, Rajendra Jain, Vinsha Acharya, Pranil Lahigade, Aniket Pardeshi, Priyanka Ashok Deshpande, Manjiri Parasnis,
Respondents: Advocate General Birendra Saraf, Senior Advocate Anil V. Anturkar, AGP Y.D. Patil, Government Pleader Neha Bhide, Panel Counsel Vaibhav Charulwar, Advocates Parag A. Vyas, Tanaji Mhatugade, D.A. Dubey, Gaurang, Ashok Varma, A.A. Ansari, D.P. Singh, and Gaurang Jhaveri.
