JUDGMENT Satish Chandra, C. J. - In 1947, the State Legislature had enacted the United Provinces Molasses (Control) Act No. XXIII of 1947. In 1964, it repealed this Act and re-enacted it as Uttar Pradesh Sheera Niyantran Adhiniyam, 1964. This was an Act to provide in public interest for the control of storage, gradation and price of molasses produced by Sugar Factories in Uttar Pradesh and the regulation of supply and distribution thereof. It came into force of Nov., 9, 1964. Section 5 of this Act enjoined upon every occupier of a sugar factory to provide covered accommodation for the safe preservation of molasses produced in the sugar factory free from mixture and adulterations. Section 8 authorised the Controller of Molasses to control the sale and supply of molasses. S. 10 postulates the fixture of price for the sale and supply of molasses in accordance with the orders of allotment passed by the Controller to various distilleries or for purposes of industrial development. 2. In 1974, the Act was amended by Act No. XV of 1974. The Amending Act introduced Section 10-A in the parent Act. It provides: "10-A. Funds for regulation of adequate storage facilities- Every occupier of a sugar factory shall from the price prescribed in the Schedule referred to in sub-section (1) of Section 10 for different grades of molasses, place in a separate fund the amount mentioned below or such other amount as the State Government may notify in that behalf for being utilised for provision and maintenance of adequate storage facilities in accordance with general or special orders issued from time to time by the Controller: Grade I molasses Re. 0.33 per 100 Kgs. Grade II molasses Re. 0.27 per 100 Kgs. Grade III molasses Re. 0.20 for every 40 Kgs. of reducing sugar content therein". Thus every sugar factory is obliged to create a separate fund for being utilised for provision and maintenance of adequate storage facilities of molasses. When S. 10-A was added, the Schedule to the Act prescribed the following as the maximum price per 100 Kgs. of molasses. Re. Grade I 1.00 Grade II 0.88 Grade III 0.40 3. On December 31, 1975, the State Government issued two notifications. One was issued under Section 10 (2) of the Act. It amended the maximum price of molasses as mentioned in the Schedule. of molasses. Re. Grade I 1.00 Grade II 0.88 Grade III 0.40 3. On December 31, 1975, the State Government issued two notifications. One was issued under Section 10 (2) of the Act. It amended the maximum price of molasses as mentioned in the Schedule. It increased the price of molasses by about 600% as below:- Grade I Rs. 6/- per quintal. Grade II Rs. 4.84 per quintal. Grade III Rs. 3.60 per quintal. The revised prices were to come into force from January 1,1976. 4. The second notification was issued under S. 10-A of the Act. It also came into effect from Jan. 1, 1976. It required every sugar factory to place in a separate fund the amount mentioned below in accordance with the general or special orders issued from time to time by the Controller: Grade I molasses Rs. 2.00 per 100 Kgs. Grade II molasses Rs. 1.60 per 100 Kgs. Grade III molasses Rs. 1.20 per every 40 Kgs. of reducing sugar content therein. 5. It will be seen that in this case also the rate was increased by six times. 6. The petitioners in this group of writ petitions challenge the constitutional validity of Section 10-A of the Act as well as the notifications issued by the State Government under Section 10-A. 7. The grounds on which the attack has been pressed at the hearing were. (1) Section 10-A violates Article 14; (2) It violates Article 19; (3) Section 10-A is not applicable to sugar factories which own distilleries as well and which use the molasses produced by that sugar factory for consumption in their distilleries; (4) The notification has been challenged on the ground that the increase has been made arbitrarily without application of mind to material and relevant considerations. 8. The orders issued by the Controller of Molasses directing the petitioners to create a separate fund under Section 10-A in the joint names of the sugar factory as well as the Controller has also been challenged. 9. Before dealing with the plea that the provision violates Article 14 or 19, it will be appropriate to consider the scheme of the Act and the circumstances in which S. 10-A was enacted. 10. 9. Before dealing with the plea that the provision violates Article 14 or 19, it will be appropriate to consider the scheme of the Act and the circumstances in which S. 10-A was enacted. 10. Section 3 of the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 contemplates that the State Government will constitute an Advisory Committee to advise on matters relating to the control of storage, preservation, gradation, price, supply and disposal of molasses. Section 5 requires every occupier of a sugar factory to provide covered accommodation in the factory premises for the safe preservation of molasses produced in the factory, to provide adequate safeguards against leakage, seepage, overflow, or any other accident likely to damage the quality of molasses stored in the factory, to provide adequate arrangements to prevent the mixing up of water with molasses or of old deteriorated molasses with fresh molasses; and to provide for adequate facilities of handling of molasses including taking out of samples and pumping and loading of molasses into tank wagons, tank lorries and other containers. 11. Section 6 enjoins the occupier of a sugar factory to prevent adulteration of molasses produced or stored by him. Section 7 authorises the Controller to require the occupier of a sugar factory to remove any adulterated molasses from the premises of the factory within a reasonable period and enjoins upon the occupier to obey the orders of the Controller which are passed with a view to ensuring proper storage, preservation, gradation, supply or disposal of unadulterated molasses. 12. It appears that the sugar factories did not have sufficient proper accommodation or did not have sufficient funds for the building of sufficient accommodation, arrangements and facilities for proper storing of molasses. With a view to ensure provision and maintenance of adequate storage facilities, the State Legislature enacted Sec. 10-A. This provision requires the occupier of a sugar factory to create a separate fund to be utilised exclusively for such provision and maintenance of adequate storage facilities in accordance with the orders of the Controller. Section 10-A laid down that a portion of the prescribed price of molasses be placed in the separate fund which was to be used for that purpose. The moneys so placed in the separate fund continued to remain the property of the sugar factory. This fund could not be utilised for any other purpose. It did not vest in the State Government. The moneys so placed in the separate fund continued to remain the property of the sugar factory. This fund could not be utilised for any other purpose. It did not vest in the State Government. The Controller could direct the sugar factory to utilise this fund for provision and maintenance of adequate storage facilities only. It is evident that requiring a sugar factory to place moneys in a separate fund was neither the imposition of any tax nor the levy of any fee by the State Government. The initial provision of the amount to be placed in the separate fund as prescribed by the Legislature under Section 10-A was made subject to 'such other amount as the State Government may notify in that behalf'. The learned Advocate General asked us to read down this provision as conferring a power on the State Government to vary the amount mentioned in Section 10-A after considering the material and relevant circumstances objectively and with a view to effectuate the purpose of the creation of this fund, namely, provision and maintenance of adequate storage facilities as may be required by the order of the Controller. Naturally the requirement of each sugar factory was likely to vary. In order to ameliorate and provide enough funds so that each sugar factory may be able to provide and maintain adequate storage facilities to the satisfaction of the Controller, a power was conferred on the State Government to vary the amount mentioned in Section 10-A which sugar factories were liable to place in a separate fund. The State Government could pass a general or special order in that behalf. 13. But it was incumbent upon the State Government to consider the relevant factors from the point of view of enabling the sugar factories to create a fund sufficient for making provision and maintaining adequate storage facilities to the satisfaction of the Controller. 14. We agree with the learned Advocate General that the provisions of Section 10-A were liable to be read down as indicated above. So read, Section 10-A is neither violative of the guarantee of equality enshrined under Article 14 of the Constitution nor does it violate Article 19. It does not deprive the sugar factories of the user of the money mechanically year after year. So read, Section 10-A is neither violative of the guarantee of equality enshrined under Article 14 of the Constitution nor does it violate Article 19. It does not deprive the sugar factories of the user of the money mechanically year after year. The scheme of Section 10-A enjoins upon the sugar factory to create a separate fund sufficient for making provision and maintenance of adequate storage facilities to the satisfaction of the Controller. It cannot be assumed nor has there been any allegation that the Controller has been passing orders arbitrarily without due regard to the existing storage facilities and the need for making it adequate. 15. That leads to a consideration of the notification issued by the State Government on December 30.1975 enhancing the rate at which the sugar factories were enjoined to place moneys in a separate fund under Section 10-A. The petitioners have alleged that the State Government acted mechanically; that it increased the rate because the State Government had increased the price of molasses. In reply to these allegations, the counter affidavit filed on behalf of the State authorities stated that the amount of Sheera fund has been enhanced on account of the rise in the price of the molasses and this is permissible under Section 10-A itself (vide paragraph 30 in writ petition No. 6571 of 1978). In paragraph 32 of the counter affidavit filed in writ petition No. 10575 of 1978 - Messrs. Sharda Sugar Industries Ltd. v. Excise Commissioner and another, the reason given was different. It was stated there that the amount of sheera fund has been increased on account of increase in the cost of production and on account of the construction of storage facilities and their maintenance. There also no date or details of the materials considered by the State Government have been indicated. The rise in the price of the molasses is not at all relevant consideration for fixing the rate of subscription to the sheera fund. This is certainly not permissible under Section 10-A. The State Government was completely misguided in taking the rise in the price of the molasses into account. There seems to be substance in the petitioner's allegation that the State Government acted mechanically. It did not apply its mind to the relevant and material consideration because it was influenced by irrelevant considerations. This is certainly not permissible under Section 10-A. The State Government was completely misguided in taking the rise in the price of the molasses into account. There seems to be substance in the petitioner's allegation that the State Government acted mechanically. It did not apply its mind to the relevant and material consideration because it was influenced by irrelevant considerations. The sudden enhancement of the rate by 600% in respect of all sugar factories in the State irrespective of their existing storage facilities and the existing fund already created under Section 10-A, if any, for maintenance as well as creation of further storage facilities as may have been required by the Controller of Molasses, appears arbitrary. The Legislature by enacting Section 10-A intended that the State Government will apply its mind to relevant and material considerations and vary the amount initially mentioned in Section 10-A so as to achieve the object of every sugar factory creating a separate fund for being utilised for provision and maintenance of adequate storage facilities by the Controller of Molasses. The impugned notification does not appear to have carried out the aforesaid legislative intent. It was hence in excess or in fatal deviation of the power entrusted by Section 10-A to the State Government. 16. It appears from the facts that the respondents have challenged prosecutions against the sugar factories for violating Section 10-A or the notification dated Dec. 31, 1975. Section 10-A enjoined upon each sugar factory to create a separate fund. If they did not do so they were guilty of violating the provision and were liable to prosecution. If an individual sugar factory had any grievance against the rate fixed by Section 10-A it was open to it to approach the State Government to vary the amount but in none of the cases in this group of writ petitions have the sugar factories approached the State Government and attempted to satisfy it on facts that a different or a lower rate than fixed by Section 10-A will be sufficient for achieving the purpose mentioned in that provision. Consequently the prosecutions for violating Section 10-A cannot be quashed; but since the notification issued by the State Government on Dec. 31, 1975 has been found to be invalid the prosecutions launched for violating it need to be quashed. 17. Some of the petitioners own a sugar factory as well as a distillery. Consequently the prosecutions for violating Section 10-A cannot be quashed; but since the notification issued by the State Government on Dec. 31, 1975 has been found to be invalid the prosecutions launched for violating it need to be quashed. 17. Some of the petitioners own a sugar factory as well as a distillery. Their case is that they produce molasses in their sugar factory and directly pump it to the distillery unit for being utilised there. They do not have any need to store the molasses in the sugar factory. The U.P. Sheera Niyantran Adhiniyam, 1964 does not prohibit consumption in the distillery owned by producers of molasses. Hence such sugar factories are outside the purview of Section 10-A. They need not create a separate fund thereunder. The argument is misconceived. 18. Section 7-A of the Act requires every person who needs molasses for his distillery or for any purpose for industrial development to apply to the Controller. The Controller, after considering the various factors mentioned in Section 7-A, dispose of the application. Such person is entitled in virtue of Section 8 of the Act to the supply of the allotted amount of molasses from a sugar factory mentioned in the Controller's order. The Act regulates the production as well as the sale and supply of entire quantity of molasses produced by the sugar factories in the State. The Sugar factory cannot consume any part of the molasses except by the orders of the Controller of Molasses. The scheme of the Act shows that personal consumption by a sugar factory which also owns a distillery is equally prohibited without an order of allotment by the Controller. From the affidavits filed in the cases of such sugar factories (which own a sugar factory as well as a distillery) like writ petition No. 6571 of 1978. The Oudh Sugar Mills Ltd. v. The Excise Commissioner and Controller of Molasses, it is apparent that the petitioners utilise the molasses produced at their own sugar factory under the orders of the Controller. The sugar factory which also owns a distillery either in the same compound or elsewhere is governed by Section 10-A. They have to create and maintain a separate fund as contemplated by that provision. The sugar factory which also owns a distillery either in the same compound or elsewhere is governed by Section 10-A. They have to create and maintain a separate fund as contemplated by that provision. Rule 22 of the U.P. Sheera Niyantran Niyamavali, 1974 which provides for reservation of entire stock of molasses for distillation and other purposes of industrial development in accordance with the orders of the Controller is not ultra vires of the provisions of the Act. On the other hand, it fulfils and carries out the scheme and the object of the Act. 19. It appears that the Controller had initially required the sugar factories to create a separate fund under Section 10-A by a savings bank account. Finding that such an order was not complied with, the Controller passed an order directing the sugar factories to create a separate fund under Section 10-A in the joint names of the sugar factory and the Controller of Molasses. There is no provision either in the Act or the Rules for the creation of a separate fund in the name of the Controller of Molasses either independently or jointly with the sugar factory. It is true that the subject of such a direction was to see the actual creation of a fund and also that the fund is not misutilised, but nonetheless the order was without jurisdiction because there was no such provision either in the Act or in the Rules. 20. In the result, the petition succeeds and is allowed in part. The notification dated December 31, 1975 issued by the State Government under Section 10-A is quashed. The prosecution, if any, launched against the petitioners for violation of the aforesaid notification are also quashed pro tanto. The Controller of Molasses is directed not to require the petitioners to create a separate fund in the joint names of the Controller of Molasses and the sugar factory. In view of the divided success, the parties will bear their own costs.