In Brief
Two multi-state cooperative credit societies advanced large loans to sugar factories on the security of pledged sugar stocks. When the borrower defaulted on payments to sugarcane farmers and workers, revenue authorities seized and auctioned the sugar stocks under the Sugarcane (Control) Order to recover dues. The appellants, as secured creditors, claimed priority over the sale proceeds. The High Court dismissed their writ petitions, holding that an alternative remedy existed under land revenue law. The Supreme Court allowed the appeals, holding that valid pledges give secured creditors priority over unsecured claims by workers and farmers. The Court directed that amounts be disbursed recognizing the appellants' superior rights as pawnees.
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