M/S SHRI HIRANYAKESHI vs THE UNION OF INDIA

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HC-KAR
NC: 2026:KHC-D:16656-DB
WA No. 100580 of 2026

CNR: KAHC020155362026



IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

TH
DATED THIS THE 7 DAY OF OCTOBER 2026



PRESENT

THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

AND

THE HON'BLE MRS JUSTICE HEMA KULKARNI


WRIT APPEAL NO.100580 OF 2026 (GM-RES)

BETWEEN:

M/S. SHRI. HIRANYAKESHI
SAHAKARI SAKKARE KARKHANE NIYAMIT,
SANKESHWAR-591314,TQ: HUKKERI,
DIST: BELAGAVI,
(REP. BY ITS MANAGING DIRECTOR).
…APPELLANT

(BY SRI.AMEETKUMAR DESHPANDE, SENIOR ADVOCATE FOR









SRI.PRASHANT S.KADADEVAR,ADVOCATE)

AND:

1. THE UNION OF INDIA
BY ITS SECRETARY MINISTRY OF
CONSUMER AFFAIRS, FOOD AND
PUBLIC DISTRIBUTION, DEPT. OF
FOOD AND PUBLIC DISTRIBUTION,
(DIRECTORATE OF SUGAR AND VEGETABLE OILS),
KRISHI BHAWAN, NEW DELHI-110001.

2. THE DIRECTOR (SUGAR)
MINISTRY OF CONSUMER AFFAIRS,
FOOD AND PUBLIC DISTRIBUTION,
DEPT. OF FOOD AND PUBLIC DISTRIBUTION,
(DIRECTORATE OF SUGAR AND VEGETABLE OILS),
KRISHI BHAWAN, NEW DELHI-110001.


Digitally signed
by
VIJAYALAKSHMI
M KANKUPPI
Location: HIGH
COURT OF
KARNATAKA
DHARWAD
BENCH
Date: 2026.10.31
11:43:24 +0530

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WA No. 100580 of 2026

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3. THE COMMISSIONER FOR CANE DEVELOPMENT
AND DIRECTOR OF SUGAR,
KARNATAKA GRUHA MANDALI BUILDING,
C.B.A.B. COMPLEX F-BLOCK, 6 FLOOR,
CAUVERY BHAVAN, K.G.ROAD,
BENGALURU-560009.

4. THE BELAGAVI DISTRICT CO-OPERATIVE BANK LTD.,
REP. BY TS CHIEF EXECUTIVE OFFICER,
SRI. NISARAHMED GOHARAJAN KALAWANT,
HEAD OFFICE NEAR CENTRAL BUS STAND,
OLD P.B. ROAD, BELAGAVI-590016.
…RESPONDENTS

(BY SRI.MRUTYUNJAYA S.HALLIKERI, ADVOCATE FOR R1 AND R2;
SRI.RAKESH M.BILKI, GOVT. ADVOCATE FOR R3;
SRI.SRINAND A.PACHCHAPURE, ADVOCATE FOR 4)


THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
KARNATAKA HIGH COURT ACT, 1961, PRAYING THIS HON’BLE
COURT TO ALLOW THE APPEAL AND SET ASIDE THE JUDGMENT
AND ORDER DATED 31/07/2026 PASSED BY THE LEARNED
SINGLE JUDGE IN WP NO.101824/2026 (GM-RES) (ANNEXURE-
A); AND ETC.

THIS WRIT APPEAL COMING ON FOR PRELIMINARY
HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS
UNDER:

CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
AND
HON'BLE MRS JUSTICE HEMA KULKARNI

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NC: 2026:KHC-D:16656-DB
WA No. 100580 of 2026

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ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE M.NAGAPRASANNA )

The appellant stands before us calling in question an
order dated 31.07.2026 passed by the learned Single Judge in
Writ Petition No.101824 of 2026.

2. Heard the learned senior counsel Sri.Ameetkumar
Deshpande appearing for the petitioner and the learned counsel
Sri. Mrutyunjaya S. Hallikeri for respondent Nos.1 and 2, Sri.
Srinand A. Pachhapure for respondent No.4 and Sri. Rakesh M.
Bilki, Government Advocate for respondent No.3/State and
have perused the material on record.

3. The declining of interference in the hands of the
learned Single Judge has happened on account of the following
reasons:
“16. Equally significant is the objection raised by
respondent No.4-Bank. The materials placed before the
Court indicate that pursuant to the interim order dated
12.03.2026, substantial quantity of sugar stock was
released and the petitioner generated revenue to the tune
₹
of approximately 91.30 crores. The Bank has specifically
contended that despite having a subsisting lien over the
sugar stock, the petitioner neither informed the Bank
about the release nor ensured that the interests of the
secured creditor were adequately protected. Whether
such allegations ultimately require adjudication elsewhere
is immaterial for the present purpose. The fact remains

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that the petitioner has already enjoyed the benefit of an
extraordinary interim order and has substantially
exhausted the concession granted by this Court.

17. The conduct of the petitioner in seeking further
release after having already availed the earlier indulgence
does not persuade this Court to exercise its discretionary
jurisdiction once again. Equitable jurisdiction under Article
226 is founded upon fairness, transparency and bona fide
conduct. A party who has already been extended
extraordinary relief cannot legitimately claim repeated
deviations from the statutory framework as a matter of
right.

18. Even otherwise, on merits also, this Court does
not find any justification for granting the relief sought.
Along with the memo, the petitioner has furnished a
tabular statement indicating the proposed utilization of
sale proceeds towards various heads including cane dues,
statutory liabilities, operational expenses, maintenance
charges and other commitments. However, the same
statement itself reveals that the overall liabilities of the
₹
petitioner-sugar factory exceed 100 crores.

19. Having regard to the quantum of liabilities
disclosed by the petitioner itself, this Court is unable to
accept the contention that release of the remaining sugar
stock would substantially improve the financial position of
the petitioner. Even assuming that a further release of
nearly 50% of the available stock were to be permitted,
the likely revenue generated therefrom would still be
grossly inadequate to discharge the accumulated
liabilities. The financial burden resting upon the petitioner
is far in excess of the revenue that can reasonably be
expected from the proposed release.

20. Therefore, the plea that further release is
necessary to revive the financial health of the factory or
to enable payment of outstanding dues remains wholly
unsubstantiated. The exercise sought by the petitioner
would neither result in liquidation of its liabilities nor
generate any meaningful surplus enabling the petitioner
to meet the objectives stated in the memo. Thus, even on
equitable considerations, the petitioner has failed to

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establish that the extraordinary relief sought would
achieve any practical or beneficial purpose.

21. A writ of mandamus can be issued only when a
legal right in favour of the petitioner and a corresponding
statutory duty cast upon the respondents are clearly
established. The petitioner cannot seek a mandamus
compelling the authorities to act contrary to the statutory
mandate contained in the Control Order. Such a direction
would amount to compelling a statutory authority to
violate the very law which it is duty bound to administer.
No such writ can be issued.

22. This Court is therefore of the considered
opinion that any further direction permitting release of
sugar stock contrary to the Control Order would defeat
the very object and purpose of the regulatory regime,
create an undesirable precedent, and seriously impair
uniform implementation of the statutory policy governing
release of sugar throughout the country.

23. For the foregoing reasons, this Court proceeds
to pass the following;

ORDER

dismissed
(i) The writ petition is .

(ii) Consequently, I.A.No.3/2026 and all pending
interlocutory applications, if any, stand
disposed of.

(iii) No order as to costs.”


4. While issuing notice, this Court, on 09.09.2026,
passed the following order:
“Learned counsel, Shri Mrutyunjaya S. Hallikeri, is
directed to accept notice for respondent Nos.1 and 2.

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Learned Government Advocate is directed to accept
notice for respondent No.3.
Respondent No.4 stands on caveat.
The learned Senior Counsel, Amit Kumar
Deshpande appearing for the petitioner refers to an
interim order granted by the learned Single Judge prior to
its dismissal. The interim order reads as follows:

“In an identical matter, this Court has
granted an interim order in Writ Petition
No.100601 of 2026 on 29.01.2026. Considering
the same, the petitioner is entitled for similar
benefit on the ground of parity.
Accordingly, it is appropriate to pass the
following order:
(i) The petitioner is permitted to sell the sugar
produced for the current session i.e.2025-2026
subject to condition that they petitioners should
utilise 90% of the revenue derived from the said
stocks to clear the dues to the farmers.
(ii) Every month the status report with regard to the

transaction shall be placed before the Court by
way of a memo.
(iii) The respondents are at liberty to move this
matter seeking modification of the order based
on subsequent instructions, if any.”

The writ petition came to be dismissed. Therefore, the
interim order has now merged with the final order. The final
order is not in favour of the appellant. The appeal projects
the very same grounds that were projected before the
learned Single Judge.
The learned Senior Counsel submits that the dues of
the farmers are substantially cleared and the little dues that
are there would be cleared if permission is granted to sell
the sugar.
The sugar that is unsold today is 1,14,653 quintals.
Therefore, learned counsel, Shri Mrutyunjaya S. Hallikeri,
shall secure instructions with regard to the extent to which

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the dues of the farmers have been cleared and the extent to
which they remain to be cleared, by the next date.
Insofar as the right of the appellant to sell the sugar
and use the amount, or the amount to be paid to the bank,
is concerned, the same will be decided on the next date
after the information with regard to payment of dues to the
farmers.
List the matter on 15.09.2026 .”

The matter was directed to be relisted on 15.09.2026 and on
15.09.2026 the statement of objections or the report was taken
on record.

5. The Union of India was directed to secure a report
to assess whether the appellants had any dues pending qua the
farmers. The report is placed before us. It reads as follows:
“STATEMENT SHOWING THE CANE CRUSHED, SUGAR
PRODUCED, RECOVERY AND DATE OF START AND CANE
PAYMENT POSITION FOR THE SUGAR SEASON 2025-26
(As on 31.08.2026)
(As received from State Govt of Karnataka)
sl
No.
Actual
Cane
Rate
Declared
by
factories
to
farmers
₹
( /MT)
Amount
Payable
as per
factory
declarati
on incl.
H&T
( ₹ lakh)
Balan
-ce to
be
paid
₹
(
lakh)
Name of the
factory, Plant
Code & Sector
Total Cane
Produced
(MT)
Sugar
Prodcued
(MT)
Re-
cov
ery
(%)
Actual
Rate as
per
factory
decla-
ration
incl.
H&T
₹
( /MT)
Amou
nt
paid
by
factor
y incl.
H&T
( ₹
lakh)
% of
Pay-
ment
(%)
Date of
Start
Date of
Close
491304 51150 9.40 3310 4310 21175 21175 0 100 13-
%
11-
2025
1. Hiranya-
keshi SSK
Ltd.,
Hukkeri
Taluk,
Belagavi
District,
6701, Co-
operative
Working
10-
02-
2026

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The report is indicative of the fact that there are no dues to the
farmers as on date. The State Government has also produced
the fortnightly statement or statistical data drawn from the
Commissioner of Cane Development and Directorate of Sugar in
the State of Karnataka, which also indicates that dues to the
farmers is ‘nil’. With the aforesaid report being in place, it is
now an admitted fact that, for the current sugar year 2025-
2026 there are no dues to the farmers.

th th
6. The 4 respondent is a bank. The 4 respondent gets
impleaded in the writ petition on the score that its funds are at
₹
stake, as there is due of 150 crores payable by the appellant
th
to the bank. Learned counsel for the 4 respondent would
submit that the sugar that is now permitted to be sold and its
proceeds must be deposited with the bank, as the sugar is
th
pledged with the bank. Be that as it may. The 4 respondent
bank has adequate statutory remedy to secure the amount
more so in the teeth of the fact that the sugar that is produced
is already pledged with the bank.

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7. Our concern was only that the farmers should not
be hit by the tussle between the appellant/borrower and the
bank. Therefore, the report was sought from the hands of the
Union of India and the State as to whether a single farmer's
amount is due in the bargain. The report is indicative as
observed hereinabove that all the farmer's dues are fulfilled.
The reports are twofold, one by the Union of India and one by
the State Government.

8. The learned Senior Counsel Sri. Ameetkumar
Deshpande would submit that the sale of sugar must be
permitted in terms of the Circulars notified by the Government
of India. He would particularly rely on the Circulars dated
31.08.2026, 15.09.2026 and 30.09.2026.

9. The learned counsel Sri. Mrutyunjaya S. Hallikeri
appearing for the Union of India would submit that they would
have no objection for sale of sugar in terms of the Circular
dated 31.08.2026 or the Circulars preceding to the said
Circular.

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10. In the light of the said submission and contra
submission, the appellant is permitted to sell sugar in terms of
the Circulars dated 31.08.2026, 15.09.2026 and 30.09.2026.

th
11. Insofar as the rights of the 4 respondent are
concerned, liberty is reserved to initiate proceedings against
the appellants in a manner known to law.

12. With the aforesaid observations, the writ appeal
stands disposed .

13. It is made clear that the order is passed in the
peculiar facts of this case for the sugarcane year 2025-2026.
All other contentions would remain open.

Ordered accordingly.

Sd/-
(M.NAGAPRASANNA)
JUDGE


Sd/-
(HEMA KULKARNI)
JUDGE

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CT:VH