The Allahabad High Court has held that discriminatory allocation of sugarcane below a mill's estimated requirement cannot be justified on the basis of its low drawl or alleged delay in payment of cane price, particularly where the short allocation itself contributed to the low drawl and affected the mill's ability to make payments.

It further held that sugarcane allocation should account for the fact that only about 60% of the cane supplied is ultimately available for crushing, with the remaining 40% lost to pilferage and other losses.

The bench of Justice J.J. Munir and Justice Siddharth Nandan made the observations while allowing a writ petition filed by Yadu Sugar Limited, which operates a sugar mill in Badaun district.

The Court directed the Cane Commissioner to allocate sugarcane for the 2026-27 crushing season in accordance with the mill's estimated requirement and ensure uninterrupted supply for the 180-day season.

“… by lesser allocation in comparison with the estimated cane requirement for the crushing seasons, the petitioner has been forced to a lower drawl percentage, which has resulted in the closure of the sugar Mill, and, as such, the State machinery was not justified in reallocating cane to other sugar Mills. Thus shortage of sugar supplied to petitioner far below the allocation was the root cause for the closure of the sugar Mill. As such, discrimination faced by the petitioner in comparison to other seven sugar mills is writ large,” it observed.

The mill has an installed crushing capacity of 7,000 tonnes per day. Its estimated cane requirement was fixed at 100.80 lakh quintals under memoranda issued in 2020 and 2025 under Section 12(2) of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. However, for the 2025-26 season, it was allotted only 51.30 lakh quintals and purchased 9.17 lakh quintals before closing operations on January 26, 2026.

The petitioner alleged discrimination, pointing out that seven other sugar mills in the area received allocations exceeding their estimated requirements. Majhawali, for instance, received 190.92% of its estimated requirement, while the petitioner received only 50.89%.

The State defended the lower allocation by relying on the petitioner's low procurement and delayed payment of cane price. It contended that the mill's failure to utilise even the 51.30 lakh quintals allotted to it showed that it was not operating to its crushing capacity. It also maintained that the Cane Commissioner had to balance the interests of sugar mills with those of cane growers, particularly their right to timely payment.

Rejecting this reasoning, the Court compared the allotment and actual drawl of the petitioner with other mills. Majhawali, despite receiving 190.92% of its estimated requirement, achieved a drawl of 36.32%, whereas the petitioner, despite receiving only 50.89%, achieved a drawl of 17.88%. When the figures were assessed proportionately to the quantity allotted, the Court found that the petitioner's drawl was actually higher.

The Court also accepted that an allocation of 51.30 lakh quintals could sustain the mill for only about 102.6 days of a 180-day crushing season, leaving it unable to function for approximately 80 days. It noted that the hours lost due to cane shortage (786.19 hours), were greater than the mill's actual crushing hours of 784.44 hours.

“It is the duty of the State to ensure that the allocations are made commensurate with the estimated requirement, so as to enable a sugar Mill to sustain itself and also yield results commensurate to the Cane Commissioner's expectation of achieving 60% drawl,” Court said.

Before parting with the judgment, the Court recorded a reminder to the Government:

“…this Court wishes to put a note of reminder for the Government who represent a welfare State that an approach with sustainable development, is the need of the hour, and as such, the Polices of the Government, should be such that it sustains existing Mills and at the same time, provide avenues for setting up new Mills.”

The writ petition was allowed.

Case Title: Yadu Sugar Limited v. State of UP and another

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