Bihar Sugar Mills Association (Branch Of Ah India Sugar Mills Association, New Delhi), Patna v. State Of Bihar, Through Secretary, Dept. Of Sugarcane-cum-industries
1997-02-04
D.P.WADHWA, SUDHANSU JYOTI MUKHOPADHAYA
body1997
DigiLaw.ai
Judgment D. P. Wadhwa, C. J. 1. There are 11 petitioners in this application - the first petitioner being an association of the same Sugar Mills, who are petitioners no.2 to 11. The respondents are two in number - First respondent being the state of Bihar through Secretary in the department of sugarcane-cum-Industries and, the second the Cane Commissioner, Bihar. 2. The petitioners have challenged the order dated November 29, 1996, issued by the Cane Commissioner, fixing the rate of sugarcane to be purchased by the sugar factories in the State of Bihar as also by those factories in the State of u. P. which purchase sugarcane from bihar for the crushing Session 1996-97 at the rate of Rs.71 and Rs.75 per quintal for two varieties of sugarcane. We may at the outset set out the order dated November 29, 1996, which is as under "letter No.2-02/95-2616 Govt. of bihar, Sugarcane Department. From sri Lalsota, sugarcane Commissioner, Bihar. To general Manager/manager/chairman, Acting Chairman of all the Sugar mills of Bihar. The Sugar Mills of Uttar Pradesh which purchase sugarcane from Bihar. Patna, dated 29th November, 1996. Sub: Regarding purchase and payment of sugarcane during the crushing session 1996-97. Sir, with reference to the above noted subject, it is to say that determination of state recommended price of sugarcane is under the consideration of the government. The crushing works In the Sugar mills are about to start and prices of the sugarcanes will have to be paid immediately. As directed, you are directed to pay the price of the sugarcanes supplied during the crushing session 1996-97 at the following rate on ad-hoc basis: varieties of sugarcane at the Mill gate at outside purchasing Centre. "in this connection you are runner directed that you will make arrangement for payment of the price of sugarcanes from the beginning of the crushing session Itself after the determination of State recommended sugarcane price for crushing season 1996-97 has been finally decided. Kindly inform the receipt of the letter. Yours faithfully sd/-Sugarcance Commissioner. 3. This order does not show under which provision of law, it has been issued. However, the Learned Advocate-General appearing for the Respondents, submitted that the authority for issuing this order could be traced in sections 42 and 43 of the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (For short Bihar Sugarcane Act ).
Yours faithfully sd/-Sugarcance Commissioner. 3. This order does not show under which provision of law, it has been issued. However, the Learned Advocate-General appearing for the Respondents, submitted that the authority for issuing this order could be traced in sections 42 and 43 of the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (For short Bihar Sugarcane Act ). Sec.42 and Sec.43, in its relevant part, are as under: "42. Minimum price of cane supplied to a unit - The State Government may, after consulting the Board, determine by notification in the official Gazette, in respect of any area the minimum price of cane payable by the owners of units to the cane-growers or co-operative societies for cane supplied to them In the crushing year concerned: provided that the minimum price so determined shall not exceed the minimum price payable by the occupier of a factory in respect of the cane supplied from the same area. " "43. Payment of price of cane.- (1)The occupier of a factory shall make such agreements for the payment of price of cane as may be prescribed. (2) (0 As soon as cane is supplied to a factory, the occupier of such factory shall be liable to pay the price of cane so supplied. (ii) Where the occupier, liable under clause (i) makes default in payment of the price for a period exceeding fourteen days from the date of supply of cane to the factory, he shall be liable to pay interest thereon at the rate specified in Sec.51 from ti le date of supply. (3) (i) ***** *- 4. board in Sec.42 means the sugarcane Board established under section 3 of this Act. As to what is the constitution of the Board and its functions are not quite relevant for our purposes and nothing has been stated on that. Sugar is controlled industry and finds mention in the first Schedule to the Industries (Development and Regulation)Act, 1951. Sec.2 of this Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the first schedule. Sugar industry, therefore, conies in List I - Union List Vllth schedule) to the Constitution as Entry 52, which reads as under: 52. Industries, the control of which by the Union is declared by Parliament by law to be expedient In the public interest.
Sugar industry, therefore, conies in List I - Union List Vllth schedule) to the Constitution as Entry 52, which reads as under: 52. Industries, the control of which by the Union is declared by Parliament by law to be expedient In the public interest. " It is not disputed before us that sugar is a scheduled industry control over which lies with the Union of India. We, however, did not understand as to why reference was made at all to the aspect that control of sugar industries is with the Union of India. Here we are concerned with the price fixed by the impugned order of the sugarcane by the cane Commissioner of Bihar. Relevant provisions would be the Essential Commodities Act, 1955 , (for short the E. C. Act} and Sugarcane (Control) Order, 1966, made by the Central Government under Sec.3 of the E. C. Act. 5. It is not disputed that in exercise of the powers conferred by the Sugarcane (Control) Order, 1966 , the Central government has fixed the statutory minimum price of the sugarcane for the session 1996-97 to be purchased by the sugar mills. The minimum statutory sugarcane price announced by the central Government payable by the sugar factories for 1996-97 sugar season is at Rs.45.90 per quintal linked to a basic recovery of 8.5% sugar subject to a premium of Rs.0.57 for every 0.1 percentage point increase in the recovery above that level. 6. There is no challenge to the sugarcane (Control) Order issued by the Central Government in exercise of its powers conferred by Sec.3 of the e. C. Act. Under the Sugarcane (Control) Order, price means the price or the minimum price fixed by the Central government from time to time for sugarcane delivered - (i) to a sugar factory at the gale of the factory or at a sugarcane purchasing centre; or (ii) to a khandsari unit" the Central Government fixes the minimum price of sugarcane under clause 3) of the Sugarcane (Control)Order after taking into consideration various factors. Sub-clauses (1) and (2)of Clause 3 which are relevant for our purpose read as under: "3.
Sub-clauses (1) and (2)of Clause 3 which are relevant for our purpose read as under: "3. Minimum price of sugarcane payable by producer of sugar.- (1) the central Government may, after consult ation with such authorities, bodies or associations as it may deem fit, by notification in the Official Gazette, from-time to time, fix minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them, having regard to - (a) the cost of production of sugarcane; (b) the return to the grower from alternative crops and the general trend of prices of agricultural commodities; (c) the availability of sugar to the consumer at a fair price; (d) the price at which sugar produced from sugarcane is sold by producers of sugar; and (e) the recovery of sugar from sugarcane : provided that the Central Government or with the approval of the Central government, the State Government may, in such circumstances and subject to such conditions as specified in Cl. (3-A), allow a suitable rebate in a price so fixed. Explanation, - Different prices may be fixed for different areas or different qualities or varieties of sugarcane. (2) No person shall sell or agree to sell sugarcane to producer of sugar or his agent and no such producer or agent shall purchase or agree to purchase sugarcane, at a price lower than fixed under sub-clause (1 ). " 7. Clause 5-A of the Sugarcane (Control) Order provides for payment of additional price for sugarcane purchased on or after 1st October, 1974, which reads as under: "5-A. Additional price for sugarcane purchased on or after 1st October, 7974.- (1) Where a producer of sugar or his agent purchases, from a sugarcane grower during each sugar year, he shall in addition to the minimum sugarcane price fixed under Cl.3 pay to the sugarcane grower an additional price, if found due in accordance with the provisions of the second Schedule annexed to this order.
(2) The Central Government or the state Government, as the case may be, may authorise any person or authority, as it thinks fit, for the purpose of determining the additional price payable by a producer of sugar under sub-clause (1) and the person or authority, as the case may be, who determines the addition a 1 price, shall intimate the same in writing to the producer of sugar and the sugarcane grower connected with the supply of sugarcane to such producer of sugar. " 3. (a) Such additional price is in addition to the minimum sugarcane price fixed under clause 3 and is to be paid in accordance with the provisions of the second Schedule to the Sugarcane (Control) Order. Thus, it is the Sugarcane (Control) Order which governs the price of the sugarcane to be paid by sugar factories of supplies of sugarcane and that would be the minimum price as fixed in Clause 3 and additional price as fixed under Clause 5-A of the sugarcane (Control) Order. The E. C. Act under which this order has been issued confers powers on the Central government only. It is not that the e. C. Act has been amended in the State of Bihar to confer power on the State government to add to the price fixed by the Central Government under sugarcane (Control) Order. 8. Learned Advocate-General, it appeared, found considerable difficulty in justifying the legality of the impugned order dated November 29, 1996. It is difficult to appreciate his argument that such an order could be issued under section 42 of the Bihar Sugarcane Act. This section clearly bars the State government for fixing price of sugarcane exceeding the minimum price payable by factory owners-under the sugarcane (Control) Order which is having the force of law. Learned Advocate-General then tried to justify the impugned order on the ground that such an order was being issued for the last 10 years without any objection from any of the Sugar factories and that they have been paying the price of sugarcane in accordance with such order. That may be so; but, once an order is challenged, its legality has to be tested with reference to the provisions of law. This the respondents have been unable to do.
That may be so; but, once an order is challenged, its legality has to be tested with reference to the provisions of law. This the respondents have been unable to do. Learned Advocate-General then said that if the petitioners come to the table and discuss this matter with the authorities and the representatives of the cane growers, the matter could be resolved. To this the petitioners were not agreeable. They say that the price of sugarcane as fixed by the impugned order was uneconomical to them. They said that for the sugarcane supplied to the sugar factories owned by the State government themselves, they were unable to pay even the minimum price fixed by the Central Government under sugarcane (Central) Order and that it did not lie in the mouth of the State government to pass order to pay the price of sugarcane over and above what was fixed by the Central Government. They further submitted that the workers of the sugar factories owned by the State government had not been paid their salaries for months together and now though the State Government was showing concern for the cane-growers, they had done nothing tor the workers. We do not think we have to enter into this controversy. We cannot force the petitioners to discuss the price of sugarcane with the respondents and/or cane growers as there is no such law which enjoins upon them to do so. We, therefore, held that the impugned order dated November 29, 1996, issued by the cane Commissioner, Bihar, is not valid and would set aside the same. For the view which we have taken, we get support from a Bench decision of the Allahabad High Court in the case of West up. Sugar Mills Association and others V/s. State of U. P. and others (CMWP No.36889 of 1996, decided on December 11, 1996 ). 9. This writ-petition is, therefore, allowed. The impugned order dated november 29, 19% is quashed. The rule is made absolute. There will be no order as to costs. Petition Allowed.