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2025 DAILYLAW 22275 (KAR)

NIRANI SUGARS LTD v. STATE OF KARNATAKA

WP/9225/2025 · 2025-04-22

M Nagaprasanna

body2025

Judgment text

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- 1 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 9225 OF 2025 (GM-RES) C/W WRIT PETITION NO. 8685 OF 2025 (GM-RES) IN WP No. 9225/2025 BETWEEN: NIRANI SUGARS LTD., SURVEY NO.166, KULALI CROSS JAMAKHANDI, MUDHOL ROAD, BAGALKOTE DISTRICT, BAGALKOTE-587 313. A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, REP. BY ITS EXECUTIVE DIRECTOR MR. SANGAMESH NIRANI …PETITIONER (BY SRI AJAY KADKOL T, ADVOCATE) AND: 1. STATE OF KARNATAKA, THE SECRETARY TO GOVERNMENT, COMMERCE AND INDUSTRIES DEPARTMENT, VIKASA SOUDHA, DR. B.R AMBEDKAR VEEDHI, BENGALURU-560 001. 2. THE COMMISSIONER FOR CANE DEVELOPMENT, OFFICE OF THE COMMISSIONER FOR CANE DEVELOPMENT AND DIRECTORATE OF SUGAR, Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 K.H.B BUILDING, CBAB COMPLEX, 'F' BLOCK, 5TH FLOOR, CAUVERY BHAVAN, K.G ROAD, BENGALURU-560 009. 3. THE DEPUTY COMMISSIONER, OFFICE OF THE DEPUTY COMMISSIONER, ADMINISTRATION BHAVAN, NAVANAGAR, BAGALKOTE-587 102. …RESPONDENTS (BY SRI MOHAMMED JAFFAR SHAH, AGA) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO- QUASH THE ORDER PASSED BY R-2 BEARING NO. DSK/CANE BILL/21/2024-25 DATED 04.02.2025 WHICH IS PRODUCED AT ANNEXURE-A ETC. IN WP NO. 8685/2025 BETWEEN: SRI SAI PRIYA SUGARS LTD., VISHALA NAGAR, HIPPARAGI, HIPPARAGI, ALBALA ROAD, ALBALA JAMAKHANDI TALUK, BAGALKOT DISTRICT-587 119. A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, REP. BY ITS EXECUTIVE DIRECTOR, MR SANGAMESH NIRANI. ...PETITIONER (BY SRI AJAY KADKOL T, ADVOCATE) AND: 1. STATE OF KARNATAKA, THE PRINCIPAL SECRETARY, DEPARTMENT OF COMMERCE AND INDUSTRIES, VIKASA SOUDHA, DR B R AMBEDKAR VEEDHI, BENGALURU-560 001 - 3 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 2. THE COMMISSIONER FOR CANE DEVELOPMENT OFFICE OF THE COMMISSIONER FOR CANE DEVELOPMENT AND DIRECTORATE OF SUGAR, K H B BUILDING, CBAB COMPLEX, 'F' BLOCK, 5TH FLOOR, CAUVERY BHAVAN, K G ROAD, BENGALURU-560 009. 3. THE DEPUTY COMMISSIONER, OFFICE OF THE DEPUTY COMMISSIONER, ADMINISTRATION BHAVAN, NAVANAGAR, BAGALKOTE-587 102 ...RESPONDENTS (BY SRI MOHAMMED JAFFAR SHAH, AGA) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO A) QUASH THE DEMAND NOTICE ISSUED BY THE R-2 DATED 04.02.2025 BEARING NO. DSK/KABBU BILLU BAAKI/24/2024-25 WHICH IS PRODUCED AT ANNEXURE-A. B) QUASH THE ORDER PASSED BY R-3 BEARING NO. GABA/RRC/V.NI.DI-335/2024-25 DATED 25.02.2025 WHICH IS PRODUCED ANNEXURE-B ETC. THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA ORAL ORDER 1. Petitioner in W.P.No.9225/2025 is before this Court seeking the following prayers: WHEREFORE, the Petitioner above named humbly prays that this Hon'ble Court be pleased to: a. Pass an appropriate Writ, Order, or Direction, quashing the Order passed by Respondent No. 2 Bearing No.DSK/Cane Bill/ 21 /2024-25 dated 04.02.2025 which is produced at ANNEXURE - "A"; - 4 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 AND b. Pass an appropriate Writ, Order, or Direction, quashing the Order passed by Respondent No. 3 Bearing No. GABA/RRC/V.Ni.Di-338/2024-25 dated 25.02.2025 which is produced ANNEXURE - "B AND c. Pass an appropriate Writ, Order, or Direction preventing the Respondents from taking any coercive action against the Petitioner on the basis of the impugned Order. AND/OR d. Such other Order/s as this Hon'ble Court may deem fit, proper and necessary, in the ends of justice. 2. Petitioner in W.P.No.8685/2025 is before this Court seeking the following prayers: WHEREFORE, the Petitioner above named humbly prays that this Hon'ble Court be pleased to: a Pass an appropriate Writ, Order, or Direction, quashing the Demand Notice issued by the Respondent No. 2 dated 04.02.2025 Bearing No. DSK/KABBU BILLU BAAKI/24/2024- 25 which is produced at ANNEXURE - "A"; AND b. Pass an appropriate Writ. Order, or Direction, quashing the Order passed by Respondent No.3 Bearing No. GABA/RRC/V.Ni. Di-335/2024-25 dated 25.02.2025 which is produced ANNEXURE - "B; AND c. Pass an appropriate Writ. Order, or Direction preventing the Respondents from taking any coercive action against the Petitioner on the basis of the impugned order. AND/OR d. Such other Order/s as this Hon'ble Court may deem fit, proper and necessary, in the ends of justice. - 5 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 3. Heard Sri Ajay Kadkol T., learned counsel for the petitioners and Sri Mohammed Jaffar Shah, learned Additional Government Advocate for respondents – State in both the petitions. 4. The learned counsel appearing for the petitioners would submit that in identical cases, the co-ordinate bench of this Court has permitted the sale of Sugar to clear the dues of the farmers. 5. In that light, the petitioners in these petitions have filed their respective affidavits indicating that they would clear the dues by selling the sugar. The affidavits read as follows: In WP No. 9225 of 2025 I, Sangamesh Nirani, S/o Rudrappa, aged about 47 years, available at Nirani Sugars Limited at Survey No. 166, Kulali Cross, Jamakhandi, Mudhol Road, Bagalkote - 587313, do hereby solemnly affirm and state on oath as follows: 1. I am the Executive Director of the Petitioner entity in the above case and I am duly authorized and competent to swear to this affidavit. I am conversant with the facts of the case and as such, I am swearing to this affidavit. 2. I state that this affidavit is being filed in compliance of the Order dated 03.04.2025 passed by this Hon'ble Court in Writ Petition No.9225 of 2025. 3. I state that the Petitioner company is in the business of manufacturing and processing of sugar and allied products including ethanol and electricity. The Petitioner is a well- - 6 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 established entity and has been in the business for more than two decades. The Petitioner has made significant contributions to the agricultural and industrial sectors by sourcing sugarcane from local farmers, promoting sustainable cultivation practices, and ensuring fair and transparent procurement policies. 4. I state that the Petitioner has always strictly complied with and adhered to the provisions of the Sugarcane (Control) Order, 1966, the Karnataka Sugarcane (Control of Purchase and Supply) Act, 2013, the Amendment Act of 2014, and all other applicable notifications and guidelines issued from time to time by the competent authorities. 5. I respectfully submit that the delay in payment of the arrears to the sugarcane farmers, which has led to the issuance of the impugned orders by Respondent No.2 dated 04.02.2025 and Respondent No. 3 dated 25.02.2025, is solely due to the restrictions placed on the sale of sugar manufactured by the Petitioner, by the Central Government from time to time. 6. Such restrictions have severely affected the cash flow of the Petitioner company, resulting in its inability to make timely payments to the farmers despite its best intentions. 7. I state that the delay in payment is unintentional and bonafide. 8. The Petitioner has no intention of evading its statutory obligations toward the farmers who have supplied sugarcane to it. The Petitioner values its long-standing relationship with the farming community which has been built on mutual trust and respect over the decades. 9. I state that the Petitioner has been supplying co- generated energy to HESCOM (Hubli Electricity Supply Company Ltd) and other government-owned ESCOMs for several years. 10. During the Crushing Season 2024-25, the energy generated has been supplied to HESCOM, but the said entity has not made the due payments to the Petitioner, further exacerbating the financial constraints faced by the Petitioner. 11. I state that the Petitioner is fully committed and willing to make the payment of the arrears to the farmers as declared in the fortnightly report filed before the Cane Commissioner from time to time. The Petitioner is taking - 7 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 all possible steps to mobilize resources to clear the dues at the earliest opportunity. 12. I respectfully submit that the impugned orders passed by Respondent No. 2 dated 04.02.2025 and Respondent No. 3 dated 25.02.2025 were issued without providing any opportunity to the Petitioner to present its case or to explain the circumstances that led to the delay in payment. 13. The orders have been passed in violation of the principles of natural justice and without application of mind to the genuine difficulties faced by the Petitioner. 14. I hereby solemnly undertake that the Petitioner would seek the leave of this Hon'ble Court to sell the sugar it has manufactured and make use of the sale proceeds to satisfy the dues payable by it towards the farmers who have supplied cane to it and which amounts are due and payable as on this day, as declared in the fortnightly report filed by it. 15. I submit that the Petitioner has a strong and demonstrated commitment to ethical business practices and regulatory compliance. Any deviation from these standards in the present case is solely due to circumstances beyond its control and not due to any willful default or negligence on its part. I, therefore, most humbly pray that this Hon'ble Court be pleased to grant to the Petitioner leave to sell the sugar which the Petitioner has manufactured and make use of the sale proceeds arising from such sale to satisfy the dues payable by the Petitioner towards the farmers who have supplied sugarcane to it, as declared in the fortnightly reports filed by the Petitioner before the Cane Commissioner i.e., RespondentNo.2, in the ends of justice. I, Sangamesh Nirani, the Executive Director of the Petitioner entity, do hereby declare that this is my name and signature and that the contents of this affidavit are true to the best of my knowledge, information, and belief. In WP No. 8685 of 2025 I, Sangamesh Nirani, S/o Rudrappa, aged about 47 years, available at Nirani Sugars Limited at Survey No. 166, Kulali - 8 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 Cross, Jamakhandi, Mudhol Road, Bagalkote - 587313, do hereby solemnly affirm and state on oath as follows: 1. I am the Executive Director of the Petitioner entity in the above case and I am duly authorized and competent to swear to this affidavit. I am conversant with the facts of the case and as such, I am swearing to this affidavit. 2. I state that this affidavit is being filed in compliance of the Order dated 03.04.2025 passed by this Hon'ble Court in Writ Petition No.8685 of 2025. 3. 1 state that the Petitioner company is in the business of manufacturing and processing of sugar and allied products including ethanol and electricity. The Petitioner is a well- established entity and has been in the business for many years. The Petitioner has made significant contributions to the agricultural and industrial sectors by sourcing sugarcane from local farmers, promoting sustainable cultivation practices, and ensuring fair and transparent procurement policies. 4. I state that the Petitioner has always strictly complied with and adhered to the provisions of the Sugarcane (Control) Order, 1966, the Karnataka Sugarcane (Control of Purchase and Supply) Act, 2013, the Amendment Act of 2014, and all other applicable notifications and guidelines issued from time to time by the competent authorities. 5. I respectfully submit that the delay in payment of the arrears to the sugarcane farmers, which has led to the issuance of the impugned Demand Notice by Respondent No.2 dated 04.02.2025 Bearing No. DSK/KABBU BILLU BAAKI/24/2024-25 and the Order passed by Respondent No.3 dated 25.02.2025 Bearing No. GABA/RRC/V.Ni.Di- 335/2024-25, is solely due to the restrictions placed on the sale of sugar manufactured by the Petitioner, by the Central Government from time to time. 6. Such restrictions have severely affected the cash flow of the Petitioner company, resulting in its inability to make timely payments to the farmers despite its best intentions. 7. I state that the delay in payment is unintentional and bonafide. 8. The Petitioner has no intention of evading its statutory obligations toward the farmers who have supplied sugarcane to it. The Petitioner values its long-standing - 9 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 relationship with the farming community which has been built on mutual trust and respect over the years. 9. I state that the Petitioner has been supplying co- generated energy to HESCOM (Hubli Electricity Supply Company Ltd) and other government-owned ESCOMs for several years. 10. During the Crushing Season 2024-25, the energy generated has been supplied to HESCOM, but the said entity has not made the due payments to the Petitioner, amounting to several crores of rupees towards the electricity power supplied, which amounts were due on January 2025 and still pending as on this day. The Petitioner also produces Ethanol and supplies it to Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, and amounts are due to be received from these corporations as well. 11. I state that the Petitioner is fully committed and willing to make the payment of the arrears to the farmers as declared in the fortnightly report filed before the Cane Commissioner from time to time. The Petitioner is taking all possible steps to mobilize resources to clear the dues at the earliest opportunity. 12. I respectfully submit that the impugned Demand Notice issued by Respondent No. 2 dated 04.02.2025 and the Order passed by Respondent No. 3 dated 25.02.2025 were issued without providing any opportunity to the Petitioner to present its case or to explain the circumstances that led to the delay in payment. The Demand Notice does not disclose any information or records of the farmers or to whom such arrears have to be paid. 13. The orders have been passed in violation of the principles of natural justice and without application of mind to the genuine difficulties faced by the Petitioner. 14. I hereby solemnly undertake that the Petitioner would seek the leave of this Hon'ble Court to sell the sugar it has manufactured and make use of the sale proceeds to satisfy the dues payable by it towards the farmers who have supplied cane to it and which amounts are due and payable as on this day, as declared in the fortnightly report filed by it. 15. I submit that the Petitioner has a strong and demonstrated commitment to ethical business practices - 10 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 and regulatory compliance. Any deviation from these standards in the present case is solely due to circumstances beyond its control and not due to any willful default or negligence on its part. I, therefore, most humbly pray that this Hon'ble Court be pleased to grant to the Petitioner leave to sell the sugar which the Petitioner has manufactured and make use of the sale proceeds arising from such sale to satisfy the dues payable by the Petitioner towards the farmers who have supplied sugarcane to it, as declared in the fortnightly reports filed by the Petitioner before the Cane Commissioner i.e., RespondentNo.2, in the ends of justice. I, Sangamesh Nirani, the Executive Director of the Petitioner entity, do hereby declare that this is my name and signature and that the contents of this affidavit are true to the best of my knowledge, information, and belief. 6. In the light of the afore-quoted affidavits so filed, learned Additional Government Advocate would submit that the petitions be disposed with a direction to adhere to the undertaking given in the affidavits that on the sale of sugar, they would clear all the dues of the farmers at the outset. 7. The learned counsel for petitioners submits that the contents of the affidavits would be strictly adhered to, by the petitioners, on the sale of the sugar and at the outset, the dues of the farmers would be cleared and funds would not be diverted to any other purpose, without clearing the dues of the farmers. - 11 - NC: 2025:KHC:16511 WP No. 9225 of 2025 C/W WP No. 8685 of 2025 8. In the light of the said submissions, the petitions stand disposed, with a direction to the State to permit the petitioners to sell the sugar in terms of the undertaking that is already recorded hereinabove. As a matter form, the impugned orders in both the petitions, stand quashed. 9. Ordered accordingly. Sd/- (M.NAGAPRASANNA) JUDGE tsn* List No.: 1 Sl No.: 43