"Farmers Cannot Be Made Debt-Ridden": Bombay High Court Quashes State Resolution Providing 'Delayed & Less' Fair Price To Sugarcane Farmers

In a major relief for sugarcane farmers in Maharashtra, the Bombay High Court on Monday (March 17) quashed and set aside a Government Resolution (GR) which provided for a 'delayed and less' Fair and Remunerative Price (FRP) to the farmers as it would affect them adversely. 

A division bench of Justices Girish Kulkarni and Advait Sethna held that the GR issued by the Maharashtra government on February 21, 2022, was in contravention to the Sugar Control Order (SCO), 1966 issued by the Central government. 

The bench emphasised how 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. The agriculturist / farmers, the bench stressed, play a pivotal role in supporting the food requirements of the 140 crores population the country.

"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 Essential Commodities (EC) Act by the Central Government and are controlled items. In doing so the Central Government is conscious that the sugarcane grower ought to be paid fair price for the sugarcane grown by them and supplied to the sugar factories," the bench said in its order. 

The bench noted that in the SCO of 1996, the Central Government has provided a time line of 14 days for the sugarcane growers to get the FRP, which the judges said, shows that the Central Government is alive that there cannot be any delay in payment of the basic fair price of the sugarcane harvested by the agriculturalist.

"It also cannot be that the agriculturist supply the sugarcane as harvested by them and are required to endlessly wait till the end of the crushing season to receive the basic price of their products as supplied to the sugar factories. If this is accepted to be the regime as to what would happen to the farmers / agriculturists and their suffering, cannot be imagined. Agriculturist in no manner whatsoever should suffer, is the object and intention of the Central Government in providing immediate payment of the FRP to the sugarcane supplied by them, within 14 days of the supply," the judges observed. 

Any dilution of such mandate as contained in Clause 3 of the SCO, 1996, the judges said, would be fatal and would adversely affect the very livelihood of the agriculturists and the farmers.

"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)," the bench opined. 

Further, the bench acknowledged the large numbers of subsidies and benefits given to farmers, particularly sugarcane farmers, by the Central government. However, the bench made it clear that the farmers can never be neglected nor can their rights be suppressed and or they could be financially exploited.

"In the event of any delay in payment of the fair price or FRP or its non payment to the farmers/agriculturist for the sugarcane supplied by them, the prejudice which would be caused, would be enormous. It is certainly bound to be a hard financial blow and impact on them, for the reason that on such remuneration their very livelihood and the livelihood of their dependents / family members would rest," the judges held. 

By the instant judgment, which runs into 73 pages, the judges disposed of a clutch of petitions filed by various farmers and farmers' unions challenging the February 21, 2022 GR issued by the Maharashtra government, contended that it was in violation of the SCO 1996 and the FRP Scheme of the Central Government, initiated in 2009.

According to the farmers, among other provisions, the GR provided for calculating average harvesting and transportation cost for previous two accounting years and deducting such amounts, from the amount payable as first instalment to farmers and then after closure of sugar season, while paying final sugarcane FRP to the cane farmers, final recovery for entire season of respective sugar mill and final harvesting transportation cost, shall be deducted from final price payable to the farmers. It also provided that to fix final FRP payable to sugarcane farmers within 15 days of closure of sugar crushing season and accordingly difference price to be paid to the sugarcane farmers subsequently.

The farmers contended that the SCO 1996 as well as the FRP Policy of the Central Government provided immediate payment of the FRP within 14 days of their supply to the sugar factories or mills. Thus, the GR or the policy framed by the State was violative of the SCO and also the rights of the farmers. 

"We find substance in the contentions as urged on behalf of the petitioners that the denial of implementation of the orders of Central Government in Clause 3(1) of SCO 1966 would bring about a regime of uncertainty not only in relation to the liability the sugar mill would be required to incur, on payment of price for the sugarcane by the farmers, but it would amount to postponing payment of the FRP of the sugarcane beyond the mandate of Clause 3(3) of SCO 1966, which would be in breach of the rights of farmers and/or of the agriculturist," the judges held. 

The court, therefore, quashed and set aside the GR. 

Appearance:

Advocate Yogesh Pande appeared for the Farmers. 

Senior Advocates Anil Anturkar and Arshad Shaikh along with Advocates Tanaji Mhatugade, Ranjit Agashe, Namrata Agashe, Rajendra Jain, Vinsha Acharya, Pranil Lahigade, Aniket Pardeshi, Priyanka Ashok Deshpande and Manjiri Parasnis represented Sugar Factories. 

Advocates Dhirendra Pratap Singh, Parag Vyas, DA Dubey, AA Ansari, Gaurang Jhaveri and Ashok Varma represented the Union of India.

Advocate General Dr. Birendra Saraf along with Government Pleader Neha Bhide, "B" Panel Counsel Vaibhav Charulwar and Assistant Government Pleader YD Patil represented the State.

Case Title: Raju Shetty vs State of Maharashtra (Writ Petition 5736 of 2022)

Citation: 2025 LiveLaw (Bom) 102

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