A Division Bench of the High Court of Judicature at Allahabad (Lucknow Bench) comprising Justice Rajan Roy and Justice Manjive Shukla has ordered the personal appearance of the Uttar Pradesh Cane Commissioner over the non-payment of statutory interest on delayed sugarcane dues to farmers. Clarifying that statutory dues must be cleared within 14 days failing which 15% annual interest is attracted, the court expanded the temporal scope of the 2006 Public Interest Litigation (PIL) to cover delays from 1996 through the present date.
Background of the Case
The Public Interest Litigation was instituted in 2006 by V.M. Singh, Convenor of the Kisan Mazdoor Sangathan, seeking court directions to ensure that sugar mills across Uttar Pradesh pay statutory interest on delayed cane dues owed to canegrowers from the 1996–97 crushing season onward.
Earlier, on May 1, 2024, the court had directed the State government to produce complete, year-wise data from 1996–97 till date regarding delayed payments and interest ordered or actually paid. The court referenced its previous binding judgment rendered on December 23, 2021, in Shailendra Kumar and others v. State of U.P. and others (Writ Petition No. 11355 (M/B) of 2021), which affirmed that interest on delayed sugarcane payments is payable at 15% per annum rather than 11%.
Arguments of the Parties
Petitioner V.M. Singh, appearing in person alongside advocate Amit Kumar Singh Bhadauria, argued that the Cane Commissioner is statutorily obligated to ensure timely disbursement of cane prices and to issue recovery certificates when payments are delayed. Referring to an affidavit filed by the State on July 10, 2024, the petitioner pointed out that while Paragraph 16 asserted that the Cane Commissioner had passed an order waiving interest on March 5, 2019, no such waiver order was attached to the affidavit or produced before the court.
Senior Advocate J.N. Mathur, representing the U.P. Sugar Mill Association, submitted that the phrase “on-wards to date” in the petitioner’s relief clause should confine the scope of the petition to the period between 1996 and October 2006 (when the writ petition was originally filed). He further stated that enforcing interest on delayed payments across the State could run into thousands of crores of rupees, which could potentially result in the closure of sugar mills.
Court’s Analysis and Key Observations
Reviewing the State’s compliance affidavit dated July 10, 2024, the court found that it failed to answer the pinpointed queries raised in its May 1, 2024 order. Expressing dissatisfaction with the State’s response, the Bench observed:
“Prima facie, the affidavit is nothing but an attempt to avoid straight forward and pinpointed answer to the queries made in our order dated 01.05.2024.”
Addressing the contention to restrict the time period of the petition, the court formally expanded the scope of the PIL beyond the filing date of October 2006, stating that the valuable rights and interests of sugarcane farmers were at stake. Responding to concerns regarding the potential financial strain on sugar mills, the court remarked:
“…what about the interest of the poor cane growers who also contribute to the ecomony of this country, why the law should be heavily laden or interpreted and implemented in a manner which favours only the sugar mills and not the cane growers.”
Reaffirming the statutory framework, the court emphasized that payment must be made within 14 days and default incurs interest at 15% per annum. The Bench noted:
“The only question is, has this statutory provision been complied by the Cane Commissioner and the authorities and whether such interest on delayed payment has been paid to the cane growers or not.”
Decision and Directions
The court directed the Cane Commissioner to appear personally before the Bench on August 3, 2026, to satisfy the court regarding compliance with statutory duties and previous court orders. The Cane Commissioner has also been directed to demonstrate whether recovery certificates issued under Section 17(3) of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, following the judgment in Shailendra Kumar, applied an interest rate of 12% or 15% per annum.
To adjudicate the issue of interest on delayed payments systematically, the court bifurcated the period into three distinct phases:
- First Phase: 1996 to 2006
- Second Phase: 2007 to 2013
- Third Phase: 2014 to 2025/26
The court listed the matter for further hearing on August 3, 2026, indicating that it will consider taking up the case on a day-to-day basis.
Case Details
Case Title: V.M. Singh Convenor Of Kisan Mazdoor Sangathan v. State Of U.P. Thru Secy. Sugarcane Dev. And Anr.
Case No.: Public Interest Litigation (PIL) No. 7066 of 2006
Bench: Justice Rajan Roy and Justice Manjive Shukla
Date: July 16, 2026
