Unlike cooperative sugar mills, private establishments profit by ‘drowning cane growers in debt’, says HC

Justice C.V. Karthikeyan imposes costs of ₹1 lakh on East India Distilleries-Parry (India) Limited for having failed to find an amicable solution to allocation of farm lands in Cuddalore

In a judgement that has come as a shot in the arm for the cooperative movement, the Madras High Court has observed that private sugar factories profit by “drowning cane growers in debt” whereas the cooperative sugar factories prevent exploitation, provide return on share capital and do much more.

Justice C.V. Karthikeyan made the observation while imposing costs of ₹1 lakh on East India Distilleries-Parry (India) Limited for having being hostile instead of finding an amicable solution to re-allocation of 18 villages at Kammapuram Firka in Cuddalore district from it to MRK Cooperative Sugar Mills in Sethiathope.

The judge ordered the amount should be paid to Tamil Nadu State Legal Services Authority which, in turn, was directed to conduct a legal aid camp at Kammapuram Firka to address the grievances of farmers who had apprehensions over supplying their produce to the cooperative sugar mill.

Authoring a 165-page judgment, he dismissed two writ petitions, one filed by a group of 25 cane growers and another by EID Parry, challenging an order passed by the Director of Sugar (Cane Commissioner) on October 28, 2022 allotting the 18 villages at Kammapuram Firka to M.R. Krishnamurthi Cooperative Sugar Mills.

Advocate General R. Shunmugasundaram brought it to the notice of the court that the relationship between cane growers and sugar factories was controlled by the Sugar (Control) Order 1966 passed by the Centre by taking recourse to Section 3 of the Essential Commodities Act of 1955.

Since sugar was an essential commodity, the 1966 order empowers the Cane Commissioner to allocate lands, where sugarcanes were grown, to a particular sugar mill. The 18 villages in question had initially been allotted to Shree Ambika Sugar Mills Limited, a private company, which sank into liquidation.

Thereafter, they were re-allotted to EID Parry temporarily before being shifted to MRK Cooperative Sugar Mills on grounds that the latter required allocation of more cane for better utilization of its crushing capacity, the cooperative mill was closer to the 18 villages and there was a threat of 5,000 acres being acquired by Neyveli Lignite Corporation.