Dismissed

Sugarcane Growers &Sakthi Suga v. 1.THE Reserve Bank of India

Madras HC20 Dec 2016WP/2089/2003

Case brief

AI extract

What is this about?

The High Court held that the RBI Circular dated 27.11.1971 regarding sugar mill payments to growers was merely advisory and lacked statutory backing. Consequently, a writ of mandamus could not be issued against respondent banks to implement its provisions.

What did the court decide?

The writ petition was dismissed as being devoid of merits, with no costs awarded.

Sugarcane Growers &Sakthi Suga Vs 1.THE Reserve Bank of… — Banking and Recovery | Madras HC (2016)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated: 20.12.2016

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CORAM

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THE HONOURABLE MR.JUSTICE P.N.PRAKASH

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Writ Petition No.2089 of 2003

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Sugarcane Growers & Sakthi Sugars Shareholders Association,

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Rep. by its President A.M.Raja ...Petitioner -Versus-

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1. The Reserve Bank of India No.16, Fort Glacis Rajaji Salai, Chennai-600 001.

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The Assistant General Manager Canara Bank, Regional Office 166, T.V.Samy Road, Coimbatore - 641 002.

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The Chief Manager Karur Vysya Bank Ltd., Trichy Road, Ramanathapuram Coimbatore - 641 045.

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The Senior Regional Manager Indian Overseas Bank 11/952, Crosscut Road, Coimbatore - 641 012.

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The Divisional Manager Lakshmi Vilas Bank 541, D.B.Road, R.S.Puram Coimbatore - 641 002.

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The Chief Manager Punjab National Bank 774, Oppanakara Street, Coimbatore - 641 001.

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https://hcservices.ecourts.gov.in/hcservices/

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The Assistant General Manager South Indian Bank 1632, Trichy Road Coimbatore - 641 018.

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The Manager State Bank of Travancore 280, Oppanakara Street, Coimbatore - 641 001.

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The Commissioner of Sugar Government of Tamil Nadu EVR Buildings, Nandanam, Chennai-600 035.

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Sakthi Sugars Ltd., Sakthi Nagar, Erode Periyar District. ... Respondents Petition filed under Section 226 of the Constitution of India praying for issuance of a writ of Mandamus, to direct the respondents 2 to 8 to produce their records before this Hon'ble Court pertaining to the credit facilities / overdraft facilities given to Sakthi Sugars Ltd., and to direct the said respondents to implement Circular No.DBOD No.CAS.BC 137/C.446(H)-71 dated 27.11.1971 issued by the first respondent and direct the 10th respondent to make payments in terms thereof to the members of the petitioner association.

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For Petitioner: M/s.Chitra Narayan For R1 : M/s.Poornam, for RBI For R2, R4 : Mr.M.V.Chandran For R5 : Mr.A.V.Radhakrishnan For R8 : Mrs.S.Poonguzhali For R10 : Mrs.C.Uma

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ORDER

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This writ petition has been filed to direct the respondents 2 to 8 to produce their records before this Court pertaining to the credit facilities / overdraft facilities given to Sakthi Sugars Ltd., and to direct the said respondents to implement Circular No.DBOD No.CAS.BC 137/C.446(H)-71 dated 27.11.1971 issued by the first respondent and direct the 10th respondent to make payments in terms thereof to the members of the petitioner association.

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Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the 1st, 2nd, 4th, 5th,

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8th and 10th respondents.

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This writ petition has been filed by the association, representing the interest of sugarcane growers in Erode District. It is the grievance of the members of the petitioners' association that, they had supplied sugarcane to Sakthi Sugars Ltd., but, they have not received their payment from the said mill. Therefore, the petitioner has filed the present writ petition for a mandamus based on the Circular dated 27.11.1971 issued by the Reserve Bank of India to all the banks that give credit to sugar mills.

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The learned counsel appearing for the petitioner fairly submitted that when this writ petition was filed in the year 2002, a whopping sum of Rs.30 crore was due to the sugarcane growers from Sakthi Sugars Ltd., and over a period of time, the same has been paid, but, still, there are some dues for the subsequent period of supply.

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The learned counsel appearing for the 1st respondent refuted the allegations.

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This Court gave its anxious consideration to the rival submissions.

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On a perusal of the Circular dated 27.11.1971, this Court is of the view that this is a general advisory that was issued by the Reserve Bank of India to all the nationalized banks to insist upon sugarcane mills to make payments to sugarcane growers in time, so that they do not suffer. This Circular is not based on any statutory power vested with the Reserve Bank of India.

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A reading of the Circular shows that the Reserve Bank of India was concerned with the travails of the sugarcane growers and in order to mitigate their troubles, the Reserve Bank of India has requested the banks to evolve a scheme whereby, the interest of the sugarcane growers is safeguarded.

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Under such circumstances, since the Circular dated 27.11.1971 is only advisory, no mandamus as prayed for by the petitioner can be issued.

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In the result, this petition is dismissed as being devoid of merits. No costs.

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Assistant Registrar

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//True Copy//
Sub Assistant Registrar
mk
To
1. The Reserve Bank of India
No.16, Fort Glacis
Rajaji Salai, Chennai-600 001.
2. The Commissioner of Sugar
Government of Tamil Nadu
EVR Buildings, Nandanam,
Chennai-600 035.
+1cc to Mr.C. Uma, Advocate, S.R.No.74385
+1cc to Mr.O. Padmaprakash, Advocate, S.R.No.74863
+1cc to Mr. A.V. Radhakrishnan, Advocate Sr.No.74234
sk(CO)
md(19/01/2017)
W.P.No.2089 of 2003

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https://hcservices.ecourts.gov.in/hcservices/

Sugarcane Growers &Sakthi Suga v. 1.THE Reserve Bank of India

Case brief

What is this about?

What did the court decide?

Sugarcane Growers &Sakthi Suga v. 1.THE Reserve Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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