Court mandates 15% interest on delayed payments since 1996; Directs Cane Commissioner for compliance.
In a significant judgment, the Allahabad High Court has reinforced the rights of sugarcane farmers in Uttar Pradesh by mandating the payment of interest on delayed cane dues. The Division Bench, comprising Justices Rajan Roy and Manjive Shukla, ruled that the statutory obligation under the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, requires sugar mills to pay dues within 14 days. Any delay in payment attracts an interest rate of 15% per annum.
The case, initiated as a Public Interest Litigation by V.M. Singh, Convenor of Kisan Mazdoor Sangathan, has been ongoing since 2006. It addresses the persistent issue of delayed payments to sugarcane growers, extending the scope to include dues from 1996 onwards. The court emphasized that the statutory provisions must be adhered to, ensuring that the interests of the farmers are protected.
The court directed the Cane Commissioner to ensure compliance with these statutory provisions and to submit detailed data regarding payments and interest on delayed dues. The judgment expands the scope of the litigation beyond the original filing date to include all delayed payments since 1996, underscoring the court's commitment to justice for the cane growers.
The judgment also noted that any failure to comply with these obligations could lead to significant financial liabilities for the sugar mills, potentially amounting to thousands of crores in interest. However, the court highlighted the necessity of balancing the interests of the sugar industry with those of the farmers who contribute significantly to the economy.
The Cane Commissioner has been ordered to personally appear before the court to demonstrate compliance with the court's orders and to ensure that the statutory obligations are met. The case is set to continue on August 3, 2026, with the possibility of day-to-day hearings, given the prolonged nature of the litigation.
Bottom line:-
Public Interest Litigation regarding delayed payment of cane dues and non-payment of statutorily prescribed interest to sugarcane growers. Statutory obligation under the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 mandates payment within 14 days, failing which an interest of 15% per annum is payable.
Statutory provision(s): U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 Sections 17(3) and 18
