Sasa Musa Sugar Works (Pvt.) Ltd. vs State Of Bihar And Ors.

1. This group of appeals arise out of challenge to the levy of market fee on purchase of sugarcane by the sugar factories from the sugarcane growers and also on sales of sugar by the sugar factories to the Food Corporation of India and other purchasers of sugar.

2. Civil Appeals Nos. 629, 630 and 631/ 2001 arise out of the suits filed by the sugar factories challenging the levy of market fee on purchase of sugarcane by them and also demand of fee said to be collected on the sales of sugar from the Food Corporation of India and other buyers of sugar. In suits, applications were moved for grant of interim injunction which was allowed by the trial Court. Ultimately, the suit was decreed by

(AIR 1999 SC 3126 : 1999 AIR SCW 3074) the trial Court and a permanent injunction was issued restraining the deft market committees from realising the market fee as prayed for in the suit. Aggrieved, the market committees preferred first appeals before the High Court. The High Court allowed the appeals and reversed the decree of the trial Court. However. Letters Patent Appeals preferred by the respondent-sugar' factories were allowed following the Constitution Bench's decision of this Court in Belsund Sugar Co. Ltd, v. State of Bihar and others, reported in (1999) 9 SCC 620. It is against the said decision, the present appeals have been filed.

(AIR 1999 SC 3120 : 1999 AIR SCW 3074]

3. C.A, Nos. 4769, 4770 and 5461/1998 arise out of the writ petitions filed by the appellant-sugar factories challenging the aforesaid levy. The writ petitions were dismissed. It is against the said Judgment, the present appeals have been filed. It is not disputed that all these appeals stand concluded by the Judgment of this Court in Eelsund Sugar Co. (Supra)

3. Mr. K.K. Venugopal, learned senior counsel appearing for the appellants in C.A. Nos. 629/2001 and Mr. Krishnan Venugopal, learned counsel appearing for the appellants in C.A. Nos. 630 and 631/2001, however, argued that the blanket injunction granted by the High Court was totally unwarranted and illegal. Their case is that despite injunction granted by the trial Court, the sugar factories have collected market fee from the Food Corporation and other purchasers of sugar but failed to transmit the said amount to the market committee. Therefore, injunction granted by the High Court has to be modified and the sugar factories may be directed to pay to the market committee, the fee collected by them on the sale of sugar. Their case is that where the levy has already suffered and the amount of fee was collected by the sugar factories, the same is payable to the market committee. Learned counsel relied upon paragraphs 111, 112, 113 and 114 of the Judgment of this Court in Belsund Sugar Co. 4Ltd.'s

(supra) and also the decisions of this Court in Mahaluxmi Rice Mills and others v. State of U. P. and others, reported in (1998) 6 SCC 590, M/s. Amar Nath Om Prakash and Others v. State of Punjab and Others, reported in (1985) 1 SCC 345 and Mafatlal Industries Ltd. and Others v. Union of India and Others, reported in (1997) 5 SCC 536, We find that the aforesaid cases have no relevance to the subject matter of the dispute. In the present case, it has been held that the levy is illegal and unauthorised. Therefore, the appeals have to be dismissed. However, dismissal of these appeals shall not stand in the way of the appellants [Market Committee) in taking such proceedings for recovery of fee if permissible in law. With the aforesaid directions, C.A. Nos. 629. 630 and 631/2001 are dismissed. There shall be no order as to costs.

(Air 1999 SC 3125 1999 AIR SCW 3074)

(AIR 1999 SC 147: 1998 AIR SCW 3504)

(AIR 1985 SC 218)

C.A. Nos, 4769. 4770.and 5461/1998 stand concluded by the decision of this Court in Belsund Sugar Co. Ltd. v. State of Bihar and Others (supra) and, therefore, these appeals deserve to be allowed. The judgment under challenge is set aside.

(AIR 1999 SC 3125 ; 1999 AIR SCW 3074)

4. The appeals are allowed. There shall be no order as to costs.

I.A. No. 8 in C.A. No. 2110/1989

5. After the matter was heard at length, Mr. S. B. Sanyal, learned senior counsel representing the Bihar State Agricultural Marketing Board prays for withdrawal of the application. The application is dismissed as withdrawn.

I.A. No. 7 in C.A. No. 2110/1989

6. The application is allowed and the Bank Guarantee shall be released in favour of the Food Corporation of India.