WEST U. P. SUGAR MILLS ASSOCIATION v. STATE OF UTTAR PRADESH
2006-07-21
AMITAVA LALA, SANJAY MISRA
body2006
DigiLaw.ai
JUDGMENT Hon’ble Amitava Lala, J.—This writ petition is made by the West U.P. Sugar Mills Association along with other sugar mills associations and individual sugar mills for the purpose of getting various common reliefs mainly as regards fixation of State Advised Price (hereinafter called as SAP) of sugarcane of the year 2002-2003. However an application for amendment of the writ petition was filed by the petitioners which was allowed on 24th September, 2004. Thus the writ petition was restricted only with regard to the prayers (c) and (d) as follows : “(c) pass a writ, order or direction restraining the State Government from diverting public funds for political purposes by giving subsidies/loans to the Corporation and Cooperative factories; (d) in the alternative direct the State Government to pay similar subsidies to private sector sugar factories also;” 2. Again the petitioners wanted to incorporate various grounds by making amendment application which was allowed on 3rd March, 2006. Altogether 22 grounds were added in paragraph 39 attacking a letter of the State Government dated 5th October, 2004 received by them during the pendency of the writ petition. By such letter private sector sugar factories were directed to pay the cane price for the crushing season 2002-2003 at the similar rate fixed for the sugar factories belonging to the U.P. State Sugar Corporation and Cooperative Societies. However no prayer is made challenging the validity of the letter. A plea has been taken that since representation had been made to the Hon’ble Chief Minister by the petitioners and since the matter is under consideration, the letter dated 5th October, 2004 is not challenged. According to us if the aforesaid plea is correct then the writ petition is premature in nature. 3. However from the record we find that during the pendency of the writ petition once the petitioners wanted to obtain an interim order as regards payment of arrears when the parties were heard at length. This Court was pleased to observe that most of the petitioners have been fully paid the amount allegedly due and payable by them. Some of the petitioners have only dues of 25% +. Such petitioners were directed to pay the outstanding within a month of passing the order by this Court. No order was passed against the petitioner companies which are under Board for Industrial and Financial Reconstruction (BIFR).
Some of the petitioners have only dues of 25% +. Such petitioners were directed to pay the outstanding within a month of passing the order by this Court. No order was passed against the petitioner companies which are under Board for Industrial and Financial Reconstruction (BIFR). Only petitioners No. 5 and 41 were shown as defaulters who were directed to pay the alleged dues in installments. Relevant order is dated 29th April, 2005. Inspite of the same an appeal was preferred to the Supreme Court of India from such order. However either such parties paid the dues within the time stipulated by this Court or by the order of the Supreme Court dated 6th March, 2006 arose from the above order. The Supreme Court held in Civil Appeal No. 1646 of 2006, U.P. Cane Union Federation Ltd. v. West U.P. Sugar Mills Association and others, that in view of the decision of the another Division Bench of this Court (read as parallel Bench of the Supreme Court) in SLP (C) No. 23495 of 2004, West U.P. Sugar Mills Association and another v. State of Uttar Pradesh and others, directing to pay the rest of the amount calculated in terms of the order passed by the State, fixing cane price, members of the respondent No. 1 therein (members of the petitioner No. 1 herein) are directed to pay the difference of price within the specified period taking into consideration the amount already paid by the mill owners and upon making calculation of the amount due and payable. Thus the writ petition virtually lost its force. 4. So far as the reliefs are concerned, first one is in the nature of public interest litigation wherein the second one is in the nature of policy decision. Even if this Court observes that the amendment is, in effect, touching the point of subsidy yet it is apparent that a challenge has been thrown in respect of a policy decision of the State. It is true to say that State cannot be allowed to take the plea of defence of policy decision as a shield to avoid the process of Court of law.
It is true to say that State cannot be allowed to take the plea of defence of policy decision as a shield to avoid the process of Court of law. It is well known that policy decision is not sacrosanct state of affairs but subject to legal sanction as decided by one of us (Hon’ble Amitava Lala, J.) in All Bengal Rickshaw Union and another v. State of West Bengal and others, AIR 2000 Cal. 186 . But in respect of a policy matter one has to approach the policy makers at first in case any decision goes against the interest of the public. Court does not necessarily enter into the arena of policy decision without any foundation. Executives have no role to play with the policy made by the legislature but to implement it. 5. Therefore the writ petition seems to be misconceived in nature irrespective of any further discussion. 6. There are three important aspects available in the letter dated 5th October, 2004. The first aspect is that the sugar mills of the private sector of the State had agreed with the cane societies/cane growers and given written consent on the cane supply on purchies that the payment of cane price shall be made in accordance with the decision of the Supreme Court. The Supreme Court has already decided the matter. 7. The second aspect is that the sugar mills in the private sector of the State have already paid the cane price at the rate fixed for Corporation/Cooperative Societies for the crushing season 2001-2002. There is no dispute with such reference. 8. The third aspect is that the Government has decided to enforce the rates for the crushing season 2002-2003 fixed under the Government Order dated 13th November, 2002 for the sugar mills of the private sector on the basis of the rates fixed for Corporation/Cooperative Societies. Such Government order is not under challenge. 9. According to the petitioners the price fixed for the mills of the private sectors and mills under Corporation/Cooperative Sector cannot be equated. The mills under the second category are getting subsidy from the State. The Supreme Court in the judgment reported in 2004 (5) SCC 430 , U.P. Cooperative Cane Unions Federation v. West U.P. Sugar Mills Association and others, per majority, held that the State has power to regulate the price but never fixed the price.
The mills under the second category are getting subsidy from the State. The Supreme Court in the judgment reported in 2004 (5) SCC 430 , U.P. Cooperative Cane Unions Federation v. West U.P. Sugar Mills Association and others, per majority, held that the State has power to regulate the price but never fixed the price. Moreover, the price was not fixed during the crushing season in between 16th October, 2002 to 15th July, 2003, but subsequently by the letter dated 5th October, 2004. The State has only wanted to give retrospective effect after the delivery of the judgment by the Supreme Court on 5th May, 2004. No SAP for the year 2002-2003 has been fixed by the State under Sections 15 and 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and also under U.P. Sugarcane (Regulation of Supply and Purchase) Order, 1954. The occupiers of the sugar factory are to enter into the agreements with the cane cooperative society concerned under Form C and for individual grower under Form B. Under both the forms minimum price will be notified by the Government from time to time which is called Statutory Minimum Price (hereinafter called as SMP). The SAP is to be governed under various factors for the crushing season of the year. Moreover the letter dated 5th October, 2004 purporting to lay down the SAP for the crushing season 2002-2003 had been neither preceded nor followed by any notification in the official Gazette fixing price payable by the sugar factories for the aforesaid season. Price fixation is to be made on the basis of cost of production of sugarcane and the price at which sugar produced from sugarcane is sold by the producer of the sugar. It also requires recovery of sugar from the sugarcane, return to the grower from the alternative crops and the general trend of agricultural commodities and also availability of sugar to the consumer at a fair price. A legislative policy is laid down in clause (a) to (e) of Clause 3 of the Sugarcane (Control) Order, 1966, (hereinafter called as Order 1966). The State Government, before issuance of order dated 5th October, 2004, did not undertake any scientific exercise to determine the cost of sugarcane production in Uttar Pradesh but fixed SAP Rs. 95/- per quintal for general varieties and Rs. 100/- for early varieties.
The State Government, before issuance of order dated 5th October, 2004, did not undertake any scientific exercise to determine the cost of sugarcane production in Uttar Pradesh but fixed SAP Rs. 95/- per quintal for general varieties and Rs. 100/- for early varieties. No board was formed to regularize the price. An expert body had gone into all relevant factors and recommended that the price should be fixed at Rs. 64.50 per quintal, later on, revised to Rs. 69.50 per quintal linked to a basic recovery of 8.5% based on the same an average price of sugarcane in Uttar Pradesh came to Rs. 79/- per quintal. If it is viewed then it will be seen that the fixation of price of Rs. 95/- per quintal by the State Government is wholly arbitrary and incorrect. 10. In 2004 (5) SCC 430 (supra) the Court held that although fixation of statutory price is laying with the Central Government but the State, for the benefit of the parties, can regulate the price over and above the statutory price particularly when the agreement and/or arrangements is/are made between the parties i.e., cane grower/cane growers, cooperative society and the mill owners. The SMP as fixed by the Central Government is basically linked with the fixation of price of levy sugar and is not linked with actual price of the sugarcane. The farmers can grow only one crop i.e. sugarcane in a year. Price is the main incentive in any economy and the best incentive to the sugarcane-grower is remunerative price for his produce. The minimum price fixed by the Central Government is not a remunerative price. It does not take into account higher costs and higher risk involved in the raising sugarcane. If there is a higher investment and higher risk, the sugarcane grower is entitled to higher returns but the said fact is not taken into consideration while fixing the minimum price by the Central Government. Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, empowers the State Government to regulate the distribution, sale or purchase of cane in any reserved or assigned area. The power conferred under the Act on the State Government is of a wide amplitude and takes within its fold the power to determine a remunerative price to the cane grower.
The power conferred under the Act on the State Government is of a wide amplitude and takes within its fold the power to determine a remunerative price to the cane grower. The Act not only confers power but also casts a duty upon the State Government to ensure that the sugarcane-grower gets a remunerative price and he is incentivised to grow sugarcane because the economy of the State to a significant extent is dependent upon growing sugarcane and supplying the same to the sugar factories. Under the Act when an agreement between the sugarcane-grower or sugarcane-growers cooperative society and occupiers of the factory is satisfying certain terms and conditions, and the price of the sugarcane will be one of the terms thereof and when the growers were bound to supply sugarcane as per terms and liable to give penalty in case of non supply, they ought to be given incentive in case of grow and supply of growing crops. It is remembered cane-growers are not in equal bargaining position with the occupiers of the factories. If their interest is not protected they will become more oppressed. Socio-economic condition of the State cannot be ignored in the awake of market economy. However it is expected that the State will show utmost transparency in fixing SAP. 11. Mr. S.P. Gupta, learned Senior Counsel appearing on behalf of the petitioners contended that the Supreme Court declared the power of the State to fix the SAP, when it is expected that the State will exercise such power validly. Invalid exercise of power can always be questioned under Article 226 of the Constitution of India. Any failure on the part of the State will infringe the right of citizens under Article 14 of the Constitution of India. 12. Earlier a Division Bench of this Court stayed the order of the State Government fixing SAP by press release dated 12th November, 2002. Such order is dated 13th November, 2002. On 10th January, 2003 such order was modified to the extent that it will remain open to the U.P. Sugar Corporation Ltd. as well as U.P. Cooperative Sugar Federation Limited to enter into negotiation with the respective Cane-growers’ Unions and make payment according to the agreement arrived at with regard to the price of the sugarcane.
On 10th January, 2003 such order was modified to the extent that it will remain open to the U.P. Sugar Corporation Ltd. as well as U.P. Cooperative Sugar Federation Limited to enter into negotiation with the respective Cane-growers’ Unions and make payment according to the agreement arrived at with regard to the price of the sugarcane. However on the basis of the decision of the Supreme Court in 2004 (5) SCC 430 (supra) this High Court was pleased to vacate the earlier interim order dated 14th September, 2004. On 13th November, 2002 vide G.O. No. 3153-C.D-/46-3-02-3(48)/98-99 the State was fixed a rate for sugar Corporation and Cooperative Societies which was referred in the letter dated 5th October, 2004 fixing similar rate for the private sector sugar factories. Therefore, the letter dated 5th October, 2004 is a communication of the earlier decision taken by the State on 13th November, 2002 i.e. during crushing season. In 2004 (5) SCC 430 (supra) fixation of uniform price of occupier of the private factories vis-a-vis the U.P. State Sugar Corporation or by cooperative sector was encouraged. Paragraph 48 is as follows : “48...........................................................The prices fixed by the Central Government clearly indicate that a sugarcane-grower who falls within the reserved area of a sugar mill run by U.P. State Sugar Corporation or by cooperative sector gets much less while one who falls within the reserved area of sugar mill run by private sector gets much higher. This is possibly due to the reason that the sugar mills of U.P. State Sugar Corporation are very old having obsolete technology due to which recovery is poor. There is no justifiable reason why a sugarcane-grower should suffer only on account of the fact that he happens to fall within the reserved area of a mill run by U.P. State Sugar Corporation or in the cooperative sector. The State Government fixes uniform prices and not factory wise. Such a fixation of price is, therefore, more just and equitable from the point of view of a sugarcane-grower.” 13. However, in the next paragraph i.e. paragraph 49 the Supreme Court held that it is, however, difficult to form any definite opinion on the factual aspect of the matter only on the basis of the statistical data placed by the learned Counsel for the parties as a correct or true assessment of the situation.
However, in the next paragraph i.e. paragraph 49 the Supreme Court held that it is, however, difficult to form any definite opinion on the factual aspect of the matter only on the basis of the statistical data placed by the learned Counsel for the parties as a correct or true assessment of the situation. Moreover, Court is more concerned with the legal aspect of the matter. 14. Hence one aspect is very clear that fixation of uniform price for Corporation/Cooperative Societies and Private Sector Sugar Mills for the sake of cane growers is far more equitable irrespective of the fact that Corporation/Co-operative Societies are getting subsidies or not. Whether a private sector sugar industry is failing to cope up with the comparable rate fixation with others getting subsidy is a matter of investigation. We are not inclined to pass any order against the private sector sugar industries which are already gone under BIFR. Recovery will be made therein subject to the relevant decisions by the BIFR, its appellate authority AAIFR or with the intervention of the competent Court. If the entire private sector sugar industry is sufferer then it is subject matter of legislative decision upon being called. This Court neither can investigate the individual arena nor take any policy decision suo moto. In 1994 (1) SCC 648 , Shri Malaprabha Coop. Sugar Factory Ltd. v. Union of India and another, it was held that price fixation is a legislative function. Government must have four factors (1) Minimum price of sugar-cane; (2) manufacturing costs; (3) taxes and duties; and (4) reasonable return on the capital employed. When legislature will fail to discharge its legislative then alone Court can be called upon to function but not before by moulding the prayers in the teeth of recovery of price under the letter dated 5th October, 2004. 15. So far as the question of retrospectivity is concern, we have to see whether the payment is in respect of past liability or existing liability. The writ petition was made on 11th November, 2002 during the crushing season of 2002-2003. A rate was fixed for the Corporation or cooperative sector on 13th November, 2002 during the crushing season of 2002-2003. After vacating the interim order the letter was issued on 5th October, 2004 to give effect of the rate fixed by the Government for Corporation/Co-operative Societies on 13th November, 2002.
A rate was fixed for the Corporation or cooperative sector on 13th November, 2002 during the crushing season of 2002-2003. After vacating the interim order the letter was issued on 5th October, 2004 to give effect of the rate fixed by the Government for Corporation/Co-operative Societies on 13th November, 2002. Therefore the claim arises out of existing liability but not past liability. Letter dated 5th October, 2004 requiring payment for the crushing season 2002-2003 on the basis of the letter dated 13th November, 2002 cannot be said to be past liability. Past liability means liability does not relate to the crushing season 2002-2003 but before. This is not such a case. Moreover in the legal parlance two words i.e. ‘retrospective’ and ‘retroactive’ are commonly used having different meaning but grammatically synonymous. Retrospective law only looks backward on things that are past but retroactive law that acts on things that are past. This analogy is clearly applicable in this case. Here claims are retroactive in nature since arising out of existing liability, therefore, recoverable. Liability was existing prior and after the Supreme Court judgment. Supreme Court only determined who can claim. Mr. Gupta contended that price fixation is always prospective. He relied upon a decision reported in 1998 (1) SCC 563 , Bejgam Veeranna Venkata Narasimloo and others v. State of A.P. and others. The factum of such case is that the State Government fixed a price of purchasing rice under a notification dated 24th February, 1977 from 7th September, 1976. Supreme Court was of the view that High Court’s order was in error because it has, one hand, held State has no power to fix price retrospectively but on the other hand tried to salvage the case of the State by saying that notification was not really retrospective. According to us the aforesaid case is factually distinguishable in nature. That apart the case under reference is in respect of retrospective fixation of price but in the present case there is no question of retrospective fixation at all. From the further reference being 2004 (6) SCC 191 , Employees State Insurance Corporation v. Hyderabad Race Club, it appears that in the ordinary course statute should apply from the date of law in question was brought into force, but there could be an exception to this principle depending upon the facts of the case. This is well known proposition of law.
This is well known proposition of law. In this case it is to be remembered that payment as regards crushing season 2001-2002 has not been disputed although price was fixed on the similar basis. Payment of SAP for the year 2003-2004 is bound by the Division Bench judgment dated 7th October, 2004 in Civil Misc. Writ Petition No. 26291 of 2004, West U.P. Sugar Mills Association and others v. State of U.P. and others, whereunder it is declared neither the similar price fixation is arbitrary nor illegal. Except the crushing season, facts and circumstances of both the cases are similarly placed including question of retrospectivity. Therefore, what is the special feature available for the crushing season 2002-2003 is unknown to this Court. 16. Mr. Gupta relied upon the aforesaid Division Bench judgment of this High Court to establish that time for fixation of SAP would be during crushing season. Upon going through such judgment it appears to us that the Division Bench held that no announcement can be made before the crushing season but it could be done during the crushing season. However, under an exceptional circumstance it could have been ascertained after crushing season. In the instant case, fixation of price was made during crushing season and communicated after crushing season when the Supreme Court delivered the judgment. Therefore no fixation was made before the crushing season. 17. Mr. Gupta, further raised an issue relying upon the judgment reported in AIR 1975 SC 2065 , Supdt. of Taxes, Dhubri and others v. M/s. Onkarmal Nathmal Trust, that the State was not diligent in vacating the interim order, therefore, it is in default. Hence it cannot get benefit of giving effect of recovery of price fixation retrospectively. 18. We repeat and say that the petitioners obtained an interim order, which was subsequently modified and lastly, vacated. Such vacation of the interim order was caused after the order of the Supreme Court dated 5th May, 2004 reported in 2004 (5) SCC 430 (supra). The letter dated 5th October, 2004 has directed to comply with the Government Order dated 13th November, 2002, which was not part and parcel of any order passed by the High Court. According to us, even if the letter dated 5th October, 2004, would not have been there but by virtue of the Government Order dated 13th November, 2002 price could have been made effective.
According to us, even if the letter dated 5th October, 2004, would not have been there but by virtue of the Government Order dated 13th November, 2002 price could have been made effective. On the other hand if the Government Order dated 13th November, 2002 would not have been pre-existing, State could have called upon the private sector sugar industries to pay the SAP being existing liability after the order of the Supreme Court. Therefore, knowledge or no knowledge if any, about the existence of the Government Order dated 13th November, 2002, as contended by the petitioner, makes no difference. 19. Now the question is with regard to prior notification regarding price fixation. Mr. Gupta contended that the price was not notified under the provisions of Section 16 of the 1953 Act nor under the Order 1954. Order 1954 requires agreement under Form B or Form C. He contended that both the forms speak that sale of sugarcane will be made to the occupier of the factory at a price notified by the Government, from time to time. Therefore, there should be notification in the official Gazette about the price payable by the sugar factories for the crushing season 2002-2003. U.P. General Clauses Act, 1904 gives meaning of the ‘Notification’ or ‘Publication’. He relied upon the judgment reported in 1996 (6) SCC 634 , I.T.C. Bhadrachalam Paperboards and another v. Mandal Revenue officer, A.P. and Others, to establish that the object of publication in the Gazette is not merely to give information to the public but to form a public document. Official Gazette is the official confirmation of the making of such an order or Rule. Official Gazette has more evidential value than press release. He further stated that in disposing of the Writ Petition No. 26291 of 2004 (supra) vide judgment dated 7th October, 2004, this High Court held that as per U.P. General Clauses Act the word ‘notified’ should be construed accordingly. It means that if something is notified then it should be published in the official Gazette. The Form Nos. B and C are statutory forms. However, it was held that forms do not speak about the price to be notified. The State Government would be well advised to consider this provision while issuing SAP in future, lest it becomes unnecessary bone of contention between the parties. 20. Mr.
The Form Nos. B and C are statutory forms. However, it was held that forms do not speak about the price to be notified. The State Government would be well advised to consider this provision while issuing SAP in future, lest it becomes unnecessary bone of contention between the parties. 20. Mr. P.M.N. Singh, learned Senior Counsel appearing for the U.P. Cane Union Federation, contended that the plea of notification of price was raised in the S.L.P. and in the review petition before the Supreme Court and also in the proceeding before the High Court. The petitioners cannot be allowed to re-agitate the issue. Neither the 1953 Act, nor the Order, 1954 provide that the Government Order under the aforesaid provision shall be issued by publication in the official Gazette. He relied upon the judgment reported in 1987 (1) SCC 658 , B.K. Srinivasan and others v. State of Karnataka and others, to establish that where parent statute prescribes the mode of publication or promulgation, that mode must be followed. Where the parent statute is silent, the subordinate legislation prescribes manner of publication. Such mode of publication will be sufficient. If subordinate legislation does not prescribe any mode, it will take effect only when it is published customarily either by official Gazette or by some other reasonable mode of publication. This issue was again considered in AIR 2002 SC 2322 , Chandra Prakash Tiwari and others v. Shakuntala Shukla and others. There it was held unless it is mandatory gazette publication may not be issued. 21. According to us, question of “Notification” or “Publication” in the official Gazette requires certain amount of clarification by this Court. It is well known that publication of notification requires for the purpose of giving information at large. It is also true to say that a circulation made to the public becomes official document by virtue of such notification. The parent law, as above, is pre-existing from 1953, wherein the Supply and Purchase Order thereunder is pre-existing from 1954. Nowhere the question of notification arose save and except Form Nos. B and C under Order, 1954. The extent of notification, if includes “notified”, the same is restricted in respect of minimum price. The minimum price is not under challenge. Therefore, the question of notification cannot be said to be mandatory for fixation of SAP.
Nowhere the question of notification arose save and except Form Nos. B and C under Order, 1954. The extent of notification, if includes “notified”, the same is restricted in respect of minimum price. The minimum price is not under challenge. Therefore, the question of notification cannot be said to be mandatory for fixation of SAP. Moreover question of SAP is outcome of the judgment reported in 2004 (5) SCC 430 (supra). Therefore question of pre-existence of such notification to that extent does not arise at all. It is true to say as per the ratio of 1996 (6) SCC 634 (supra) that in between an official Gazette and publication in the press, the farmer will be given much more evidential value than the later. But when the public, who would be made known, challenged the price fixation and the press release etc. in the Court, they themselves treated such documents are public documents. Hence no further evidence is required to prove such documents. Therefore, it is rightly pointed out by another Division Bench of this High Court in Civil Misc. Writ Petition No. 26291 of 2004 (supra) vide judgment dated 7th October, 2004 that the State would be well advised to consider this provision while issuing SAP in future. Meaning of “future” herein is where no cause of action is subsisting but yet to form. Facets of prices are like minimum price, minimum support price, fair price and maximum price. If the word “notified” in Form Nos. B and C are speaking about minimum price under no stretch of imagination SAP can be said to be notified in the official Gazette. Therefore, one should not be hyper-technical in this context. Attempt, which has been made hereunder, is futile in nature against the background of grant subsidy to the Corporation/Co-operative Societies is political in nature or the petitioners are to be directed to pay similar subsidy. 22. Next point argued by Mr. Gupta is that if regularization of supply and purchase of sugarcane includes price fixation then it is essential that a Sugarcane Board can be established and its advice is to be taken before the declaration of the price. State Government is not implementing the Sections 3 and 4 of the 1953 Act. It should not be treated as dead letter. In Writ Petition No. 26291 of 2004 (supra) it was also considered. Mr.
State Government is not implementing the Sections 3 and 4 of the 1953 Act. It should not be treated as dead letter. In Writ Petition No. 26291 of 2004 (supra) it was also considered. Mr. P.M.N. Singh, contended that the advise of the Board is not mandatory, but the role of the Board is advisory. When the Board is not in existence then the State Government cannot take its advice nor impugned order can be interfered with only on the ground that no advise was taken. Mr. Gupta also contended that no guideline or principle of price fixation has been followed by the State. According to Mr. P.M.N. Singh, U.P. Council of Sugarcane Research decided the valuation for the crushing season 2002-2003. 23. According to us, when there is acceptance of price fixation of prior and after the relevant crushing season by all and when price fixation of the relevant year is also accepted by most of the petitioners, raising of such question is purely academic in nature. Principle of Order 1 Rule 8 of the Code of Civil Procedure for the purpose of suing by one for the interest of all has failed. 24. Mr. Chandra Shekher Singh, Additional Chief Standing Counsel contended that only two questions are important for the purpose of determination as follows: (1) Whether Section 16 of 1953 Act is arbitrary and voilative of Article 14 of the Constitution, as it does not lay down any guideline for fixing SAP by the State Government; (2) Whether the rate of SAP determined by the State Government for 2002-2003 is highly excessive and arbitrary and based on no relevant consideration. He contended that the State Government regulates the price to protect the interest of both the parties i.e., buyers and purchasers. It makes a balance so that no party can take any advantage of its dominating position. 25. In 2001 A.W.C. 65, Govind Nagar Sugar Ltd. v. State, it was held that the main purpose of the Act is to provide continuous supply of sugarcane to the sugar factories for the crushing season keeping in mind the necessity of the cane-growers. In AIR 1982 SC 902 , M/s. Sukhnandan Saran Dinesh Kumar v. Union of India, it was held that producer of the sugarcane is weaker section whose interest requires to be protected.
In AIR 1982 SC 902 , M/s. Sukhnandan Saran Dinesh Kumar v. Union of India, it was held that producer of the sugarcane is weaker section whose interest requires to be protected. The marginal farmers are unable to stand against the organized industry, therefore, fixation of fair price is required. By showing AIR 1990 SC 1277 , M/s. Shri Sitaram Sugar Co. Ltd. and another v. Union of India and others, and AIR 1994 SC 1311 , Shri Malaprabha Co-op. Sugar Factory Ltd. v. Union of India and another, he contended that when an authority fixes a price, the same is a legislative exercise of power, and in the matter of the price fixation, any challenge is permissible only on the limited grounds. Although in both the cases the questions of fixation of price arose on account of levy sugar under the Essential Commodities Act and Sugarcane Control Order, but by and large argument is based on principle of fixation of price. 26. The fixation of price for the crushing season 2002-2003 is not so absurd, which can be interfered with. It appears few private sector sugar mills are apprehensive about the payment of arrears within the fold of joint corroboration. But it is to be remembered they have already enjoyed the benefit of such sum for a considerable period. 27. Therefore, in the totality no relief can be granted to the petitioners. 28. The writ petition stands dismissed. Interim order, if any, stands vacated. However recovery, if any, from the companies under BIFR will be guided by the law applicable therein. 29. No order is passed as to costs. Honble Sanjay Misra, J.—I agree. Petition Dismissed. ———