Allahabad HC: Cane Allocation Discrimination Against Mill

Allahabad High Court Finds Discrimination in Cane Allocation, Orders Allocation Matching Badaun Mill's Capacity

Published: 16 September 2026 · NyayVidhan

The Allahabad High Court allowed Yadu Sugar Limited's writ petition and directed the Cane Commissioner to allocate sugarcane for the 2026-27 season according to its mill's estimated requirement of 100.80 lakh quintals, allowing for 40% pilferage, with uninterrupted supply for 180 days. It held that the mill, given only about half its requirement while seven nearby mills received more than theirs, faced discrimination that pushed it to closure (paras 32, 40, 46-47).

Key holdings

Seven of the eight mills in the area received more than 100% of their estimated requirement while the petitioner received about 50% (para 32).

The shortfall in allocation, not the mill's performance, caused the low drawl and the closure; the discrimination was writ large (para 40).

With no substantial delay and all payments made, the payment record could not justify the lower allocation (paras 44-46).

The mill must purchase and use its allotted cane so that growers are paid within a reasonable time (para 48).

Judgment digest by NyayVidhan: a summary of the court's judgment, not its text. The judgment itself is the authoritative version.

Brief Facts

Yadu Sugar Limited runs a 7,000 TCD sugar mill at Sujanpur-Bisauli, Badaun; its estimated cane requirement under Section 12(2) of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 was fixed at 100.80 lakh quintals (LQ) for 2020-25 and again for 2025-30 (paras 3, 6). It was admitted that the mill had not been provided its estimated requirement (para 7). For 2025-26 it was allotted 51.30 LQ, about 50.89% of its requirement, while seven other mills in the area received between 108.57% and 190.92%; it purchased only 9.17 LQ and closed on 26 January 2026 (paras 7, 8, 14, 18). The State relied on the mill's low drawl and delayed cane-price payments (paras 18-24).

Court's Findings

A Division Bench of Justices J.J. Munir and Siddharth Nandan (opinion by Justice Nandan) noted the admitted figures: the seven other mills all received more than 100% of their estimates, while the petitioner got about 50% (para 32). The mill's final manufacturing report showed 786.19 hours lost to cane shortage against 784.44 hours of actual crushing (para 34). Compared in proportion to allotment, its drawl was higher than that of Majhawali, which received 190.92% of its estimate (para 37). Taking 90 LQ as the requirement for a 180-day season, the Court found that with 51.30 LQ the mill could run for only 102.6 days (para 38). The Court held that the lower allocation forced a lower drawl and caused the closure, so that the discrimination against the petitioner was "writ large" (para 40). On payments, the Cane Commissioner's own policy of 2 September 2025 expects 60% drawl, acknowledging 40% pilferage; on that basis the allocation should have been about 140 LQ, and the Court found no substantial delay in payments, all of which had been made (paras 42-45).

Legal Principle

Where a mill is allotted far less cane than its estimated statutory requirement while the other mills in the area receive more than theirs, a low drawl and payment delays caused by that shortfall cannot justify it; the State must make allocations commensurate with the estimated requirement so that the mill can sustain itself (paras 40, 44-46).

NyayVidhan's view · Practice note

Why It Matters

For sugar mills and the cane department, the judgment ties allocation to outcomes. A mill allotted far less cane than its estimated requirement cannot then be faulted for the low drawl and payment delays that follow from that shortfall (paras 40, 44-45). The Court read the Cane Commissioner's own policy of 2 September 2025, with its 60% drawl expectation and 40% pilferage allowance, against the State (para 44), and directed allocation for 2026-27 in line with the mill's 100.80 LQ capacity, with a calendar for 180 days of supply (para 47). The mill, in turn, must buy and use the cane allotted to it so that growers are paid on time (para 48).

Editorial comment by the NyayVidhan Editorial Desk. It is not part of the Court's judgment and is not legal advice.