1997 INSC 0546
                                           Agauta Sugar and Chemicals

                                                           Vs

                                              State of U. P. and Others

                                       Civil Appeals Nos. 3512-13 of 1997

                                     (K. Ramaswamy, S. Saghir Ahmed JJ)

                                                      01.05.1997

                                                        ORDER

1. Leave granted.

2. Application for impleadment allowed.

3. These appeals by special leave, arise from the judgment and orders of the Division Bench of the
Allahabad High Court, made on 27-2-1997 and 2-3-1997 in CM Application No. 1255(W) of 1997
in Writ Petition No. 775(MB) of 1997 and Writ Petition No. 775(MB) of 1997.

4. It is not necessary to reiterate all the factual details. Suffice it to state that the appellant had used
the sugarcane supplied by the cane growers individually or through the societies. As a consequence,
we are informed, around Rs. 29 crores are in arrears for payment to the cane growers. The Collector
exercising the power of recovery proceedings had attached the sugar stock-in-hand; against that, the
appellant filed a writ petition. Pending writ petition, the High Court had granted certain directions,
which ultimately could not be complied with. Consequently, the interim directions stood vacated.
Thus, these appeals by special leave.

5. Having heard the learned counsel on both sides, we think that the following order would meet the
situation :

                  (1) The District Collector, Bulandshahr is directed to assess as to what is the quantum
                  of the sugar stock-in-hand which would be sufficient to meet the payment of price of
                  the sugarcane together with interest to all the cane growers towards the sugarcane
                  supplied by them for all the crushing seasons as also the societies' commission. It
                  would be a first charge and recordable against the stock of sugar. On so assessing, he
                  would permit the appellant to sell that quantum of stock of sugar. The sale proceeds
                  thereof, when received from the appellant, are directed to be credited to an account to
                  be opened by the Collector in a nationalised bank towards this amount. The Collector
                  is directed to depute a responsible officer of his collectorate to be present at the time
                  of sale. The officer would ensure that the sale would be made only of the permitted
                  stock and that the sale proceeds are credited to the said account directed to be opened
                  in that behalf. On the amount being so deposited, the entire amount due shall be paid
                  to the cane growers.

                  (2) After the sale thus is effected and payment made to the cane growers, it would be
                  open to the appellant to file an application before the Collector stating as to what
                  amount it is liable to pay towards excise duty and arrears of wages to the employees
                  etc. On the statement so made, the District Collector is directed to assess as to what
                  quantity of sugar from the remaining stock-in-hand would meet the above
                  requirements; he would accordingly allow the release of that part of the stock-in-
                  hand for sale by the appellant for liquidation of excise duty, arrears of wages etc.

6. The above exercise would be done within a period of two months from the date of receipt of this
order. In the event of the appellant succeeding a in the writ petition, appropriate directions may be
given by the High Court in the main writ petition for mutual adjustment of any amount repayable by
the cane growers. The order of attachment would stand lifted after compliance of these directions. If
there is any difficulty in the implementation of this order; liberty is given to the appellant to
approach this Court. Pending implementation of this order, we hope and trust that no further
coercive steps will be taken and no officers, who are members of the appellant Company or
shareholders of the Company, would be detained.

7. Appeals are accordingly disposed of. No costs.