State Of Uttar Pradesh vs Mawana Sugars Ltd.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10610 OF 2017 (ARISING OUT OF S.L.P. (C) NO. 3244 OF 2017)

STATE OF UTTAR PRADESH & OTHERS ...APPELLANTS

VERSUS

MAWANA SUGARS LIMITED ...RESPONDENT

JUDGMENT

AMITAVA ROY,J.

Leave granted.

2. The State of Uttar Pradesh along with its functionaries

of the Department of Excise are in appeal against the

judgment and order dated 07.10.2016 rendered by the High

Court of Judicature at Allahabad, thereby in essence

directing the appellants to allow the respondent to retain 25%

of the balance stock of molasses, after utilization for its Signature Not Verified Digitally signed by

captive consumption, for supply to the distilleries BALA PARVATHI Date: 2017.08.19 14:16:52 IST Reason: 2

manufacturing liquor for the Molasses Year 2015-16. The

respondent was also left at liberty to move the appropriate

authority in the event of its requirement for further quantity of

molasses for its captive consumption during the said Molasses

Year. The appellants repudiate this determination and the

above directions to be opposed to and militative of the policy

for the Molasses Year 2015-16.

3. We have heard Mr. Dinesh Dwivedi, learned senior

counsel for the appellants and Ms. Indu Malhotra, learned

senior counsel for the respondent.

4. The pleaded facts in brief, sans the inessentials need be

adverted to for the required grip of the issues. The

respondent company has three sugar mills in the name and

style of “Mawana Sugar Works, Mawana, Distt. Meerut,”

“Nanglamnal Sugar Complex, Nanglamal, Distt. Meerut and

“Titawi Sugar Complex, Titiwi, Distt. Muzaffarnagar” which

are engaged in the manufacture of crystal sugar through

vacuum pan process and produce molasses as a by-product.

Admittedly the storage, sale, supply and distribution of 3

molasses within the State of U.P. is governed by the Uttar

Pradesh Sheera Niyantran Adhiniyam, 1964 (for short,

hereinafter to be referred to as “the Act”), whereunder in

terms of Section 8, the Controller of Molasses, with the prior

approval of the State Government, is empowered to issue

order to a sugar mill for transfer or sale or supply in the

prescribed manner, such quantity of molasses to such

persons, as may be specified therein. It is a matter of record

that every year, the State Government issues “Molasses

Policy”, whereby it prescribes the mode and manner in which

the molasses produced by the sugar mills would be dealt

with. The policy invariably provides for reservation of certain

portion of the molasses produced by the sugar mills for sale

and supply to the country liquor manufacturers.

5. The State Government, for the Molasses Year 2015-16,

vide its communication No. 39/2016/1501/E-2/13-2016-74/

2015 dated 24.6.2016 issued the “Molasses Policy” (for short

also “Policy”) for the said year. The Policy provided for a

reservation of 25% of the molasses produced to be supplied to 4

the country liquor manufacturers as per the formula

mentioned therein.

6. The parties are at issue on the interpretation of the

above Policy. Whereas, according to the respondent, the

reservation of 25% would apply to the balance stock of

molasses left over after its captive consumption for its

distillery, as propounded in Dhampur Sugar Mills Ltd. vs.

State of U.P. and others1 , the assertion of the appellants

herein is that having regard to the content and purport of

the Policy, the reservation of 25% would be on the total

production of molasses, to be adjusted eventually on the

basis of the balance stock computable in terms of the formula

defined in the Policy.

7. The pleaded case of the respondent is that the entire

requirement of molasses for operating its distillery is met from

the stock produced in its sugar mills and that dealing with

previous Molasses Year 2015-16, the balance stock of

molasses left over after such captive consumption was made 1

(2007) 8 SCC 338 5

available for supply to the country liquor manufacturers in

terms of the Policy for that year.

8. According to it, in the Molasses Year 2015-16, the

production of molasses has been much less for various

reasons and though it had consumed a portion of the stock

for its captive consumption in its distilleries till 6.6.2016,

when the operations had to be suspended due to rain, it was

anticipated that the whole of the remaining stock would be

utilised in its distilleries and no balance stock would be left

for reservation or supply to the country-made liquor

manufacturers. Though stating the above in details, it had

made a representation on 5.7.2016 before the Controller of

Molasses highlighting that the entire stock of molasses

produced during the Molasses Year 2015-16 would be

unavoidably utilised for its captive consumption in its

distillery, the said authority by the order dated 27.7.2016

without recording any reason has directed compliance of the

Policy for the Molasses Year 2015-16, and thereby for all

practical purposes has rejected the request made. 6

9. The appellants in their pleadings in reply, while

endorsing the Policy for the year 2015-16 and the reservation

of 25% of the molasses produced during that year, did inter

alia underline as well that in terms of the Act, the State

Government was authorised and empowered to

direct/regulate, control, storage, supply, gradation of price of

molasses. It was elaborated that the aim and object of the

fixation of reservation and to maintain the exist ratio of

molasses was to ensure proper availability of the commodity

for the country liquor distilleries each month so that the

revenue earned by the State from country liquor was not

adversely affected for the financial year 2016-17. It

underlined that the Minimum Guarantee Quantity of country

liquor in the financial year 2016-17 was about 32.02 crore

bulk liter by which a revenue of Rs. 8037.42 crores was likely

to be generated and for that purpose, the estimated

requirement of molasses was 52 lakhs quintal. That supply of

quality molasses of the above amount was uncompromisingly

essential to make available to the public, safe and potable 7

country liquor at an appropriate price, so as to guard against

consumption of spurious stuff manufactured illegally and

prevent fatal accidents and injuries to public health, has been

emphasized. The appellants thus, sought to flag that the

regulatory regime for reservation of molasses for production

of country liquor was not only to generate revenue for the

State Government but was also comprehended in the interest

of public life, health and safety. It was highlighted as well

that in absence of reservation of molasses, the sugar mills

would be at liberty to hold the stock thereof in order to earn

high profit at the end of the year or to convert it into free sale

stock which would dislocate the supply to the country liquor

manufacture distilleries, thus adversely affecting the

availability of the safe and quality country liquor for the

general pubic. After referring to the statistics pertaining to

the respondent company with regard, amongst others to its

opening balance, production and captive consumption over a

period of four years from 2012-13 to 2015-16, the appellants

endeavoured to demonstrate that in all these years, the 8

respondent company had been left with surplus

stock/balance stock after utilising the rest for its captive

consumption. Due reference was made as well of the Policy

and in particular of the computation of balance stock to

conclude that the impugned action was unassailable.

10. The High Court, as the impugned judgment would

attest, premised its determination, chiefly on the decision of

this Court in Dhampur Sugar Mills1, which, as would unfold

hereinafter, was founded on the policy distinctly different

from one, formulated for the Molasses Year 2015-16. Be that

as it may, according to the High Court, the Policy was based

on the directions given by this Court in the above

pronouncement. It found fault with the impugned order dated

27.7.2016 requiring compliance by the respondent of the

Policy, as devoid of reasons. It perceived the stand of the

appellants, to be that the entire excess stock had to be

reserved by the respondent for supply to the distilleries

manufacturing liquor, without however referring to in

particular the concept of balance stock, as explained in the 9

Policy and held, in terms of the decision in Dhampur Sugar

Mills1, that the respondent was required to reserve 25% only

of the excess stock left over after its captive consumption. It

noted the figures representing the opening stock, production

of molasses and the captive consumption thereof for the

Molasses Year 2015-16, which was based on the actual

consumption in the previous Molasses Year 2014-15 and

calculated the balance stock for the Molasses Year 2015-16 to

be 15,994 M.T. and held that the respondent would be

required to reserve 25% thereof only for supply to the

distilleries, manufacturing country liquor. The contention of

the respondent that it may be allowed to consume the entire

stock of molasses was rejected and in absence of particulars

furnished by it, accepted its captive consumption to be as in

the Molasses Year 2014-15. Accordingly, the respondent was

required to retain 25% of its balance stock, after its captive

consumption, to be reserved for supply to the distilleries

manufacturer country liquor as per the Policy. To reiterate,

the appellant was also granted the liberty to offer to the 10

authorities concerned, in case, it required further quantity of

molasses for its captive consumption during the Molasses

Year 2015-16.

11. Mr. Dinesh Dwivedi, learned senior counsel for the

appellants has emphatically asserted that the impugned

judgment proceeds on an erroneous reading of the decision

rendered by this Court in Dhampur Sugar Mills1 and a

patently wrong interpretation of the Policy and is thus, clearly

unsustainable in law and on facts. The learned senior

counsel maintained that the policy analysed and adverted to

by this Court in Dhampur Sugar Mills1 was distinctly

different in its text and tenor from the Policy in question, for

which no analogy therefrom was possible. According to him,

the Policy, though at places, has reference of the observations

in Dhampur Sugar Mills1, it stands on its own strength and

if correctly interpreted, would squarely defeat the assertions of

the respondent and the findings recorded in the impugned

judgment. The decision given in Dhampur Sugar Mills1 has

no decisive bearing at all on the Policy and thus, the starting 11

premise of the impugned judgment is patently flawed,

rendering it indefensible, he urged. Apart from reiterating the

underlying objectives of the Policy in espousal of public

interest as pleaded, Mr Dwivedi, referring to the concept of

balance stock, as explicated in the Policy, insisted that a

manufacturer of molasses, was at the outset, obligatorily

required to keep apart 25% of its total production in the

Molasses Year 2015-2016, to be adjusted, eventually subject

to its captive consumption for its distillery and in the face of

such unequivocal mandate thereof, any interpretation either

contrary thereto or in unwarranted moderation thereof, is

untenable in law.

12. Ms. Indu Malhotra, learned senior counsel for the

respondent in confutation of the above, argued that the

elucidation of the policy offered by the High Court, based on

the enunciation in Dhampur Sugar Mills1 is unimpeachable.

According to her, the interpretation of the Policy, as extended

by the appellants, besides being utterly wrong, if accepted,

would amongst others leave the respondent at the end of 12

Molasses Year 2015-16, without any stock whatsoever of

molasses to embark upon its manufacturing process for the

next year, which is inconceivable. She has urged that the

profuse reference of the decision in Dhampur Sugar Mills1 in

the Policy makes it abundantly clear that the exposition of the

policy, as made therein, was consciously made applicable to

the Policy involved and thus the respondent at the most in

terms thereof was required to reserve only 25% of the stock of

molasses left in balance after its captive consumption to the

fullest extent.

13. The disparate pleadings and the contrasting assertions

have received our due consideration. As a plain reading of the

impugned judgment would testify, that it is substantially

structured on the rendering in Dhampur Sugar Mills1, apt it

would be at the outset to advert thereto, so as to clear the

deck for the ultimate adjudication.

14. The parties are not at issue that the Act has installed a

legal regime whereunder the State Government may issue

necessary orders/directions for control, storage, supply, 13

gradation and prices of molasses and that the Policy and the

orders impugned do not suffer from any lack of authority. To

reiterate, neither the validity of the Act nor that of the Policy

has been assailed and hence, the instant exercise is limited to

the dissension on the interpretation of the Policy in its

application to the respondent and other sugar mills equally

situated. To address the issue and having regard to the

pre-supposition on which the impugned judgment has been

passed, it would be expedient to note in seriatim, the

rendition in Dhampur Sugar Mills1 and the relevant

portions of the Policy 2015-2016.

15. In Dhampur Sugar Mills1, the assailment pertained to

an order of the State of U.P. directing the appellant under the

Uttar Pradesh Sheera Niyantran Adhiniyam, 1964

(abbreviated as “the Act”) to supply 20% of the molasses

produced by its sugar mills for manufacturing “country-made

liquor” by distilleries for the financial years 2003-04 and

2004-05 as well as the consequential show cause notices for

prosecution, as upheld by the jurisdictional High Court. The 14

appellant did have a sugar mill in the State together with a

distillery which manufactured ethyl alcohol, used for blending

of petrol, manufacture of chemicals and rectified spirit for

medicines. It also had similar business at other places. The

main contention of the appellant was that though it was

producing molasses, the entire production was required by it

for captive consumption and even that was not sufficient for

which it, with the permission of government, had been

importing the commodity from other states as well as from

other countries. It therefore reasoned that as it was left with

no balance or extra stock of molasses for supply to the

distilleries manufacturing country-made liquor, the

authorities could not compel it to supply molasses vide the

impugned orders and repudiated the impugned action to be

illegal, arbitrary and unreasonable and also being violative of

Articles 14 and 19(1)(g) of the Constitution.

16. In refutation, the plea of the government was that in

accordance with the provisions of the Act, it was open to the

authorities to ask the appellant to supply 20% molasses for 15

the purpose of manufacturing country-made liquor and thus

the impugned orders were perfectly in accord with the

mandate of the enactment and by no means could be termed

as illegal and unlawful. The High Court, to reiterate, held

that the reservation for 20% of molasses and the directions

issued to the appellant to supply such stock for

manufacturing country-made liquor were neither contrary to

law nor against public policy and thus rejected the

impugnment of the appellant.

17. Before this Court, it was principally canvassed that the

impugned order(s) were expressly clear and required a sugar

mill to reserve 20% of the molasses from the balance stock i.e.

the left over after the actual consumption by the industry, for

manufacturing country liquor and as the appellant did not

have such balance stock of molasses, even for its captive

consumption and had to import molasses from other states in

the country and abroad, it could not be compelled to reserve

20% molasses for manufacturing country liquor by other

distilleries.

16

18. This Court, while noticing that the constitutional

validity of the Act had not been challenged, the same having

been upheld earlier in SIEL Limited vs. Union of India2

wherein the statute was held to be within the legislative

competence of the State and also not inconsistent with the

Industries (Development and Regulation) Act 1951, noted

further clause (3) of the order 9.6.2004 relied upon by the

High Court to partially uphold the challenge. The, original

text of the order impugned being in Hindi, the translation

thereof, as referred to in the judgment, is extracted

hereinbelow:

“25. The English translation supplied by the appellant at Annexure P-3 reads thus:

“From the balance stock of molasses with each sugar mill, 20% of molasses shall be reserved for the distilleries manufacturing country liquor. The sugar mills having their own distilleries shall not be covered within this reservation to the extent that after the actual consumption of molasses in their captive distillery, 20% reservation shall be applicable on the balance stock.”

19. Having regard to the above quoted text, this Court ruled

2 (1998(7) SCC 26 17

that the same applied only to the excess stock of molasses,

i.e., molasses which was in excess of and not used for captive

consumption by the sugar factory and was thus “the balance

stock” and sustained the assertion of the appellant to that

extent. This Court minuted as well the plea of the appellant

that it had no excess stock of molasses and had to import the

said commodity from other sources to meet its requirement for

manufacturing industrial alcohol, after obtaining such

permission granted by the Central Government as well as the

State Government. This Court therefore declared that the

case of the appellant in the singular fact situation as

projected, did not fall within the purview of clause (3) as above

and, therefore, could not have been invoked by the authorities

against it. It therefore, determined that the High Court was

not right in holding that all sugar mills were bound to supply

20% of molasses under Clause (3) of the Government Order

2004 irrespective of the stock possessed. The other

contentions addressed being not of any significance for the

instant adjudication are not being adverted to. Suffice it to 18

set-out hereinabove the operative portion of the decision as

contained in paragraphs 53 and 54 thereof:

“53. For the foregoing reasons, in our opinion, the appeal deserves to be allowed and the order of the High Court deserves to be set-aside. It is, accordingly, held that the directive issued by the respondents would not apply in case there is no balance stock of molasses with any sugar mill. The respondent authorities have no right to compel such sugar mills to supply 20% molasses for the purpose of manufacturing country liquor.

54. We may, however, make one thing clear.

As seen above, the assertion of the appellant was that it has no balance stock and even for its own requirement, it has to import molasses. On the other hand, the allegation of the respondents is that excess and balance molasses was available with the appellant which it had sold in open market. The High Court, in the impugned order has not decided the question finally. Quoting certain paragraphs from the writ petition, the High Court observed that there was no proper pleading and as such, the Court was not in a position to go into the question. It is, therefore, made clear that it is open to the respondents to take appropriate action in accordance with law on the basis of our decision and observation made in this judgment.” 19

20. The records testify that the said Policy 2015-16

was published by a Circular/Communication

No.39/2016/1501/E-2/Thirteen-2016-74/2015 in

vernacular and a translated copy thereof has been

placed on records and produced in course of the

arguments. As it had been attested on behalf of the

appellants by Mr. Dwivedi that the document produced

at the hearing bears the correct translated version of

the original, the same would be referred to. The

relevant excerpt therefrom is quoted hereinbelow:

“In this regard, I have been directed to say that suggestions/proposals received from you in pursuance to the aforesaid letters dated 9th November, 2015; 20th January, 2016; 2nd February, 2016; 2nd April, 2016; 4th May, 2016 and 23rd May, 2016, were placed in the meetings of the Molasses Advisory Committee headed by Chief Secretary held on 31.10.2015 and 15.03.2016 and the same were considered in the said meetings and in furtherance of the same, following Molasses Policy has been framed for the year 2015-16:

20 (1) Every sugar mill in the molasses year 2015-16 will keep 25% of the molasses, produced, reserved and those sugar mills whose distilleries are situated in the State will apply following reservation on the quantity of molasses produced by them in the year 2015-16:

(i) If the balance stock of the group of captive sugar mills exceeds reserved quantity (25%), then in that case full reservation shall apply to them with effect from the commencement of the molasses year as per directions contained in paragraph 47 of the Order dated 24.09.2007 passed in Civil Appeal No.4466 of 2007 titled M/s Dhampur Sugar Mills Limited Versus State of Uttar Pradesh and Others. Because it will not create any shortage in their own consumption of the molasses (in view of the quantity of self consumption of the molasses year 2014-15);

(ii) Whereas in case the balance stock of the group of captive sugar mills is lesser than the reserved quantity, then in that case reservation shall apply to them with effect from commencement of the molasses year and quantity of reservation shall be limited to the quantity of balance stock as it will not result in any shortage of their self-consumption (in view of the quantity of self consumption of the molasses year 2014-15) as per directions contained in paragraph 46 of the Order dated 21

24.09.2007 passed in Civil Appeal No.4466/07- titled M/s Dhampur Sugar Mills Limited versus State of Uttar Pradesh and Others. Because it will not create any shortage in their own consumption of the molasses (in view of the quantity of self consumption of the molasses year 2014-15);

(iii) Whereas in case the balance stock of the group of captive sugar mills is nil i.e. to say that their consumption of molasses exceeds the quantity of molasses available to them (self-consumption based on molasses year 2014-15), then in that case no reservation shall apply to them as per directions contained in paragraph 46 of the Order dated 24.09.2007 passed in Civil Appeal No.4466/2007- titled M/s Dhampur Sugar Mills Limited Versus State of Uttar Pradesh and Others.

Determination of the balance stock:

Balance stock has been elaborated by the Honorable Supreme Court in para 20 of its Judgment and Order dated 24.09.2007 passed in Civil Appeal No.4466/2007- titled M/s Dhampur Sugar Mills Limited Versus State of Uttar Pradesh and Others, which reads as under -

“In our opinion, however, Clause (3) applies only to excess stock of molasses that is, molasses which is in excess of and not used for 22

captive consumption by sugar factory and is thus balance stock.”

Therefore, balance stock for the molasses year 2015-16 = unreserved preliminary stock of the group of mills in the molasses year 2015-16 + production in the molasses year 2015-16 – self consumption of molasses in the molasses year 2015-16 (equivalent to self-consumption of molasses up to 31.10.2015 in the molasses year 2014-15).

(2). The aforesaid percentage of reservation is fixed with the condition that availability and necessity of molasses will be reviewed after every quarter and if there occurs any change (for increase or decrease) in the percentage of reservation due to availability of molasses and necessity of country liquor, then State Government will take an appropriate decision regarding change in the reservation percentage of the molasses, after considering each and every fact in detail.”

21. It would be apparent from the quoted text that for the

Molasses Year 2015-16, every sugar mill, at the first place,

would have to keep 25% of the molasses produced, reserved

and those sugar mills, whose distilleries are situated in the 23

State, would apply the following norms of reservation:

(a) If the balance stock exceeds the reserved quantity

(25%), then in that case, full reservation would apply

to them w.e.f. the commencement of the molasses year.

(b) In case the balance stock is less than the reserved

quantity then, reservation would apply w.e.f. the

commencement of the molasses year, but would be

limited to the quantity of balance stock.

(c) If the balance stock is nil i.e if the captive

consumption of molasses exceeds the quantity

available to them, no reservation would apply.

22. As all the clauses would demonstrate, reference of

paragraphs 46 and 47 of the decision in Dhampur Sugar

Mills1 has been referred to, highlighting that in all the

eventualities, the captive consumption of molasses by the

sugar mills would thereby not be curtailed or prejudicially

affected.

23. With reference to “balance stock” as well, in the 24

decision in Dhampur Sugar Mills1, following observation in

paragraph 20 (corresponds to para 27 of the reported

judgment, as above) has been alluded to:

“In our opinion, however, Clause (3) applies only to excess stock of molasses, that is, molasses which is in excess of and not used for captive consumption by sugar factory and is thus the balance stock.”

24. The Policy determined the balance stock as hereunder:

Balance stock for the Molasses Year 2015-16 = unreserved

preliminary stock of the group of mills in the Molasses Year

2015-16 + production in the Molasses Year 2015-16 –

self-consumption of molasses in the Molasses Year 2015-16

(equivalent of self-consumption of molasses up to 31.10.2015

in the Molasses Year 2014-15).

25. Thus the balance stock for the purpose of the Policy in

essence is the stock that would be left over after utilization of

the commodity for captive consumption in the Molasses Year

2015-16 from the sum total of the unreserved preliminary

produce of the same molasses year and the production thereof 25

in the said year. The computation of balance stock though

relevant to eventually decide as to the extent of reservation

that would be effective to ascertain the volume of supply to

other distilleries manufacturing country-made liquor, it

however does not in any way support the contention of the

respondent that irrespective of the eventualities in the

aforementioned clauses (a), (b) and (c), the reservation would

be of 25% only of such balance stock and not otherwise. This

is in view of the unambiguous prescript of the Policy that the

reservation would be of 25% of the molasses produced, which

by no means, can be construed to connote that such

reservation had been contemplated to be only of the balance

stock left over after the captive consumption of the sugar

mill(s) concerned. Such a construction would be a total

misreading of the Policy and would border on perversity.

26. To recount, clause (3) of the order dated 09.06.2004,

which fell for scrutiny of this Court in Dhampur Sugar

Mills1 was in following terms:

“25. The English translation supplied by the 26

appellant at Annexure P-3 reads thus:

“From the balance stock of molasses with each sugar mill, 20% of molasses shall be reserved for the distilleries manufacturing country liquor. The sugar mills having their own distilleries shall not be covered within this reservation to the extent that after the actual consumption of molasses in their captive distillery, 20% reservation shall be applicable on the balance stock.”

27. This is both in text and content totally dissimilar to the

above excerpt extracted from the Policy for the Molasses Year

2015-16. Whereas in the order under challenge in Dhampur

Sugar Mills1, it is crystal clear that the policy intended

reservation to the extent of 20% of the molasses from the

balance stock with the sugar mill, in apparent

contradistinction, in the Policy for the Molasses Year 2015-16,

the mandate is for 25% reservation of the total molasses

produced. The adjustment, if any, in the extent of reservation

to be eventually made depending on the quantum of balance

stock, in our comprehension, would not alter the essence of

the Policy in the manner as pleaded by the respondent. The 27

pith and purport of the two policies, being strikingly at

variance, no analogy is permissible.

28. A plain reading of paragraphs 46/47 of the decision in

Dhampur Sugar Mills1, (as referred to the Policy) which in

its reported version in (2007) 8 SCC 338, correspond to

paragraphs 53 & 54 authenticate the above deduction. In the

overall context, we are abundantly clear that such reference

was unwarranted and, in any case, had been made only to

indicate the notion that physically the balance stock would be

the stock that would be left over after the captive consumption

of molasses by the sugar mill concerned and has no bearing

at all on the computation of balance stock as envisaged in the

Policy and and in no manner would guide the interpretation

thereof. In that view of the matter, the presupposition of the

High Court that the Policy for the Molasses Year 2015-16 was

based on the decision in Dhampur Sugar Mills1 is patently

incorrect. Such policies being an annual event, contingent on

contemporaneous exigencies and within the realm of executive

discernment, the High Court, in our estimate, had fallen in 28

gross error in proceeding on that premise and issuing the

consequential directions as made. Noticeably, the Policy

consciously underlines that in any event thereby, the captive

consumption of molasses by the sugar mills is not affected at

all, so much so that if the balance stock is more than the

extent of reservation, the whole of it would apply, but if the

balance stock is less than the quantity to be reserved, the

reservation would work only to the extent of the balance stock

and not in excess thereof. As the balance stock, if any,

conceptually would be the residue after the utilization by way

of captive consumption, in absence of the challenge to the

Policy to be illegal, unfair, unjust, unreasonable or

unconstitutional, the plea of the respondent that the

reservation is unmistakably limited to 25% of the balance

stock under all situations is visibly flawed and fallacious. The

measure of the captive consumption for the Molasses Year

2015-16, on the basis of such utilization for the Molasses Year

2014-15, in absence of any overwhelming material to the

contrary, also cannot be faulted with.

29

29. In the wake up of the above, we are of the unhesitant

opinion that the impugned judgment being based on a total

misreading of the Policy for the Molasses Year 2015-16 and

also of the verdict in Dhampur Sugar Mills1 in its application

to the attendant facts and circumstances, it is clearly

insupportable and unsound in law and is thus liable to be set

aside, which we hereby do.

30. As a consequence, the operative directions contained

therein are also annulled. The appellants would ensure that

the Policy is implemented in its letter and spirit. The

respondent would abide by the same and extend its

cooperation without fail. The appeal is allowed. No costs.

…........................................J. [ARUN MISHRA]

…........................................J. [AMITAVA ROY] NEW DELHI;

AUGUST 18, 2017.

30

ITEM NO.1502 COURT NO.11 SECTION XI For judgment S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s).3244/2017

STATE OF UTTAR PRADESH & ORS. Petitioner(s)

VERSUS

MAWANA SUGARS LTD. Respondent(s)

(HEARD BY : HON. ARUN MISHRA AND HON. AMITAVA ROY, JJ.)

Date : 18-08-2017 This matter was called on for pronouncement of JUDGMENT today.

For Petitioner(s) Mr. Ardhendumauli Kumar Prasad, Adv.

For Respondent(s) Mr. Praveen Kumar, Adv.

Hon'ble Mr. Justice Amitava Roy pronounced the judgment of the Bench comprising Hon'ble Mr. Justice Arun Mishra and His Lordship.

Leave granted.

Appeal is allowed in terms of signed Reportable Judgment.

Pending applications, if any, stand disposed of.

(B.PARVATHI) (TAPAN KUMAR CHAKRABORTY) COURT MASTER (SH) BRANCH OFFICER

(Signed reportable judgment is placed on the file)