JUDGMENT By the Court.—These writ petitions since raise common question of facts and law, therefore they are heard together with the consent of learned Counsel appearing on behalf of the parties. These petitions are now decided by this judgment. 2. The petitioners in the present writ petitions are Public Limited Companies within the meaning of the Companies Act, 1956, manufacture sugar by vacuum pan process. The petitioners are governed by the provisions of U.P. Sugarcane (Regulation of Supply & Purchase) Act, 1953 (hereinafter be referred to as “1953 Act”) and are also governed by legislation of the Parliament known as Industries Development & Regulation Act, 1951 (hereinafter shall be referred to as “IDR Act”) for manufacturing of sugar from the sugarcane. The Central Government issued Sugarcane Control Order, 1966 in exercise of power under Section 3 of the Essential Commodities Act (hereinafter referred to as “The Control Order”), which inter alia provides for fixation of the minimum price for Sugar Cane supplied to factories like petitioners and price payable by factories to the farmers, known as Statutory Minimum Price (SMP). This SMP is fixed by the Central Government every year before commencement of the crushing season 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. 3. Clause 5-A of the Control Order provides for fixation of additional price as per formulae set out in second schedule. Guided by the statutory parameters, every year the Commission on Agricultural Costs and Prices (CACP) undertakes a detailed study of data on cost of cultivation on all India basis and submits its report to the Central Government which after considering all factors announces SMP for the year. 4. In the year 1973 the State Government adopted a policy of announcing State Advised Price (SAP) for sugarcane mainly for its own sugar mills over and above the SMP fixed by the Central Government. The SAP was later on extended and made applicable to the private sugar mills also under pressure of the unions of the cane growers and on the basis of other extraneous considerations. The SAP was later on extended and made applicable to the private sugar mills also under pressure of the unions of the cane growers and on the basis of other extraneous considerations. This SAP is always fixed by the State Government only on the basis of political consideration and without any reasoning or even considering the relevant factors, such as the fixation always lead the SAP that is much higher than the SMP fixed by the Central Government. In case of non-compliance by any sugar manufacturer, the manufacturer would be proceeded against for the non-payment of sugar cane price. It is submitted that comparison of SMP and SAP fixed by the Central Government and the State Government would make it clear that SAP has always been consistently higher than SMP fixed by the Central Government and significantly so the current difference is higher by 60 per cent than the SMP fixed by the Central Government for the corresponding year 1996. Consequently a writ petition being 36889 of 1996 was filed by West U.P. Sugar Mills Association on behalf of the sugar mills inter alia with the prayer to quash the SAP fixed by the State Government vide order dated 15th November, 1996 for that year. This Court vide judgment and order dated 15th November, 1996 quashed the order fixing the SAP by the State Government on the ground that the State has no power to fix SAP under the 1953 Act and held that it is without any legal basis and therefore illegal. 5. Aggrieved by the order dated 15th November, 1996 passed by this Court, U.P. Cooperative Cane Union Federation filed Special Leave Petition before the Supreme Court. The Constitution Bench of Apex Court vide order dated 5th May, 2004 allowed the Special Leave Petition filed by U.P. Cooperative Cane Union Federation holding that the power to regulate purchase of sugarcane conferred by Section 16 of the U.P. Act includes within it the power of fixing the price for the purchase of sugarcane. Thus, it is clear that by the aforesaid judgment and order dated 5th May, 2004, reported in 2004 (5) SCC 430 , U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and others, the power to fix SAP has been upheld by the Apex Court. 6. Thus, it is clear that by the aforesaid judgment and order dated 5th May, 2004, reported in 2004 (5) SCC 430 , U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and others, the power to fix SAP has been upheld by the Apex Court. 6. On 30th May, 2006 by U.P. Act No. 17 of 2006, Sections 3 and 4 of “1953 Act” were deleted. The U.P. Sugar Mills Association wrote a letter to the Chief Minister of U.P. with the request that as per CACP report the cost of production of sugarcane in U.P. works out to Rs. 86.00 per qtl and that the Central Government had announced the SMP for the crushing season 2006-07 at Rs. 80.00 per qtl linked to a basic recovery of 9 per cent with a premium of Rs. 0.90 per point increase in recovery over 9 per cent. It was therefore prayed by the U.P. Sugar Mills Association that there should not be any increase in SAP for the season 2006-07. The Association also requested that while fixing the SAP, the State Government must consider the recommendation made by the Mahajan Committee, which is the expert body in this regard and follow the procedure prescribed therein. 7. On 14th August, 2006, the CACP had recommended the SMP at the rate of Rs. 80.25 per qtl to a basic recovery of 9 per cent with a premium of Rs. 0.90 per point increase over 9 per cent for the crushing season 2006-07. This was announced by the Central Government vide its letter No. F.No. 3(1)/2005-SP dated 14th August, 2006. Despite the aforesaid fixation of SMP by Central Government, the State Government vide its order dated 26th December, 2006 fixed the cane price at the rate of Rs. 125/- per qtl for the crushing season 2006-07. According the petitioners this price was fixed arbitrarily without taking any criteria or guidelines by the executive. It is further submitted that while exercising the legislative function on behalf of the State, the executives have not taken into consideration the relevant material for the purposes of fixation of the price of sugarcane. It is further alleged that there was absolutely no basis or material for such fixation of SAP, which has been fixed totally on extraneous consideration and under abuse of the power. It is further alleged that there was absolutely no basis or material for such fixation of SAP, which has been fixed totally on extraneous consideration and under abuse of the power. In the month of April to August, 2007, several writ petitions were filed including writ petition No. 33288 of 2007 (Basti Sugar Mills Company Ltd. and another v. State of U.P. and others) reported in 2008(1) ADJ 36 (DB), before this Court challenging the arbitrary fixation of SAP by the State Government for the year 2006-07. In this writ petition, this Court has passed a conditional interim order. While this writ petition was pending before this Court, in July, 2007 the CACP in its report on sugarcane price for the year 2007-08 arrived at the cost of production of sugarcane in the State of U.P. at Rs. 81.32 per qtl, which is lower than the SAP fixed by the State of U.P. On 31st October, 2007, the State Government announced cane price for the crushing season 2007-08 at the same level and price as that was announced in previous year i.e. in 2007. This fixation was wholly arbitrary and has been fixed without application of mind in a mechanical manner, there is absolutely no basis and even without considering any relevant material and further without ensuring the sugarcane industry including petitioner industry a reasonable return on the capital employed in the business of manufacturing sugar. The petitioner has already suffered a huge loss for 2006-07 due to the arbitrary and excessive fixation of the SAP by the State to the tune of about Rs. 5,000 crores for the entire sugar industries. In November, 2007, the Central Government has fixed SMP for the year 2007-08 at the rate of Rs. 81.18 per qtl linked to a basic recovery of 9 per cent. The petitioners have also submitted that the paying capacity of the U.P. sugar factories was even lower than the SMP fixed by the Central Government and this important aspect was completely ignored by the State while fixing the SAP in question. It would not be out of place to mention here that Khandsari units which have started there crushing operations are paying only between Rs. 40/- to Rs. 70/- per qtl and that the cane growers are willingly supplying cane to the Khandsari units at the said price. It would not be out of place to mention here that Khandsari units which have started there crushing operations are paying only between Rs. 40/- to Rs. 70/- per qtl and that the cane growers are willingly supplying cane to the Khandsari units at the said price. During the hearing of writ petition No. 33288 of 2007, the State Government on 2nd November, 2007 has produced the entire records before this Court and other connected material and the same were inspected by the Court along with senior Counsels appearing for the parties. A perusal of the records reveal that no relevant factor for fixation of SAP was taken into account by the State Government. The Division Bench of this Court on 19th December, 2007 allowed the writ petition and quashed the SAP fixed by the State Government for the year 2006-07 and held as under : “.........Hence, taking into account totality of the matter, we are of the view that following orders are necessary to be passed and accordingly passed hereunder : (a) Order impugned fixing SAP for the crushing season 2006-07 and circular/notification etc. in connection thereto stand quashed. (b) Consequently, the State will discharge the essential legislative function in its true sense by reassessing the SAP for the crushing season 2006-07 in consultation with the respective representatives of the cane-growers, sugar producing factories, appropriate executives of the Union and the State inclusive of representative of Cost Accounting Branch of the Ministry of Finance of the Union and the State Commission of Agricultural Costs and Prices, National Sugar Institute Kanpur, and any other person or institute required for the purpose. (c) Calling of the representatives of the Union of India for sharing their experience regarding fixing the price and overall assessment, will not be treated to be interference with the existence of the power and authority of the State. (d) In case the legislature desires and wants to apply its discretion to form a Committee of experts and affected persons to make a report to work upon it and further wants that such Committee can be formed under the Chairmanship of a retired High Court or Supreme Court Judge to maintain absolute independency, they are at liberty to do so. (e) In either of cases the decision should be backed by reasons giving adequate outline of norms, criteria or guidelines to incorporate in the Act/Rules/Order/Circular so that dispute in seriatim can be resolved for all time and delay in payment schedule price of sugarcane can be avoided. (f) Due to paucity of time, only for the crushing season 2006-07 norms, criteria or guidelines will be indicated in the decision having a binding effect upon the parties irrespective of making any formal amendment/circulation etc., as prescribed above, and the parties will act upon the communication of the decision. (g) The Court is constrained to fix the period of three months for the purpose of entire exercise by the State, as directed hereinabove, due to intervention of the subsequent crushing season. (h) Subject to final decision and communication thereof, payment of SAP, in case of shortfall or adjustment/recovery in case of overpayment by the sugar producing factories, will be given effect, therefore, question of coercive action, if any, will arise at that juncture in the appropriate cases. (i) However, no part of the payment already made by the sugar producers to the cane-growers as per fixation of price by the State will be refunded by them. (j) This order will not affect or create any hindrance to any sugar producing factory in payment SMP to the Central Government regularly. Thus, the writ petitions are disposed of.....................” 8. Against the judgment and order passed by this Court in the aforesaid writ petition, whereby the SAP fixed by the State Government for the year 2006-07 has been quashed, the respondents approached the Supreme Court by means of Special Leave Petition (C) Nos. 372-281/2008. The Apex Court vide order dated 18th January, 2008 has stayed the operation of the judgment and order dated 19th December, 2007 passed by this Court. It is significant to note that before the decision in writ petition Nos. 33288 of 2007 was pronounced by this Court on 19th December, 2007, the State Government has declared the cane price (SAP) for the year 2007-08 on 31st October, 2007. 9. It is significant to note that before the decision in writ petition Nos. 33288 of 2007 was pronounced by this Court on 19th December, 2007, the State Government has declared the cane price (SAP) for the year 2007-08 on 31st October, 2007. 9. The prayer made in writ petition No. 3271 of 2008 is reproduced below : “(a) issue a writ of mandamus or a writ, order or direction in the nature of mandamus commanding the opposite parties not to give effect to the decision announced vide Press Note dated 31.10.2007 fixing SAP for 2007-08 and/or further order/orders if any issued in this respect; (b) issue a writ of certiorari or a writ, order or direction in the nature of certiorari quashing the order dated 16.11.2007 passed by the opposite parties as contained in Annexure 4 to the Writ Petition; (c) issue a writ of mandamus or a writ, order or direction commanding the opposite parties to allow the Petitioner to pay SMP till the recommendation of the committee is submitted and amendment are made in the Act/rules/order; (d) issue a writ of mandamus or a writ, order or direction commanding the opposite parties not to compel the Petitioners to pay the cane price as per the Government Order/decision announced vide Press Note dated 31.10.2007 and the order dated 16.11.2007; (e) issue an appropriate writ or order holding that in the present scheme of the law, the State Government has no authority or jurisdiction of declaring any State Advised Price; (f) issue a writ or direction in the nature of certiorari calling for the records of the State Government related to fixation of the SAP for the sugar season 2007-08; (g) issue an appropriate writ, order or direction declaring Section 16 of the U.P. Sugarcane (Regulation of Supply & Purchase) Act, 1953 including the Orders made thereunder as unconstitutional being violative of Articles 14 and 19 (1)(g) of the Constitution of India so far it relates to the declaration of the Sugarcane price by the State Government under it; (h) issue a writ, order or direction in the nature of mandamus directing the respondents not to insist/enforce upon the execution of any agreement to be executed in Form C; (i) issue any other and further order which this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.” This Court on 22nd April, 2008 has passed the following interim order : “Heard learned Counsel for the petitioners, Sri Zafar Naiyar, learned Additional Advocate General assisted by Sri S.P. Kesarwani, learned Additional Chief Standing Counsel for the State, learned Additional Solicitor General of India for Union of India and Sri Ravindra Singh, learned Counsel for Cane Cooperative Federation." 10. This Court passed an order on 11th April, 2008, which is quoted below : “Despite information given by Counsel for the petitioner, neither learned Standing Counsel, nor learned Additional Advocate General appeared today. List in the next cause list. Till the next date of listing, interim order dated 14.2.2008 shall continue. It is made clear that on that date the matter may be finally heard and decided.” 11. This Court again passed an order on 18th April, 2008, which is quoted below : “Heard Sri Shashi Nandan, learned senior Counsel appearing for the petitioner and Sri Zafar Naiyar, learned Additional Advocate General appearing for the State. Sri Ravindra Singh appearing for the Cane Cooperative Federation has sent illness slip. With the consent of the parties, the matter be put on Tuesday i.e. 22.4.2008 at 10.00 A.M. Interim order already granted shall continue till the next date of listing.” Pursuant to the order dated 18th April, 2008, the matter is listed before this Court. When the case was taken up and learned Counsel for the petitioners stood up for placing his arguments, Sri S.P. Kesarwani, learned Additional Chief Standing Counsel made a statement that the State Government wants to file affidavit/ supplementary affidavit because it has discovered some new facts. This has been opposed by learned Counsel for the petitioners and stated that the petitioners have already filed an application for modification of the order dated 31st March, 2008 passed by this Court because the respondents are taking coercive measures by lodging of First Information Reports against the petitioners’ officers and officials. Sri G.S. Chaturvedi, learned senior Counsel, who also appeared for the petitioners, made a statement before this Court that he has recently filed two writ petitions in this Court, one misc. criminal writ petition No. 6612 of 2008 for the stay of arrest of the officer and official of the petitioners, which is filed to challenge the F.I.R. lodged by respondents for alleged non-payment of State Advised Price (S.A.P.) by the petitioners despite the interim order dated 31st March, 2008. Learned Additional Advocate General prays that State Government should be given some reasonable time for filing reply to the supplementary affidavit filed today. Learned Additional Advocate General prays that State Government should be given some reasonable time for filing reply to the supplementary affidavit filed today. Learned Counsel for the petitioners has placed a copy of the interim order dated 4th October, 2007 passed in writ petition No. 38967 of 2007 by this Court which was hearing the aforesaid writ petition involving similar question for the crushing season 2006-07 was ultimately allowed by this Court. Learned Counsel for the petitioners vehemently argued that in view of the aforesaid order instead of furnishing bank guarantee as directed by the order of this Court dated 31st March, 2008 the petitioners may be allowed to follow the interim order dated 4th October, 2007 passed in writ petition No. 38967 of 2007 and the petitioners may be permitted to furnish security for difference of the amount of S.A.P. fixed by the respondents i.e. Rs. 125/- per quintal i.e. (difference of Rs. 125/- and SMP) by security other than bank guarantee accordingly we may modify the order dated 31st March, 2008. Learned Additional Advocate General opposed this modification and prays that he may be given some time to file supplementary affidavit. To this learned Counsel for the petitioners states that every day the F.I.Rs. are being lodged against the petitioners’ officers and officials and they are also being harassed. In view of the facts stated above, we see no reason as to why the similar order be not passed and accordingly we modify the order dated 31st March, 2008 in the similar terms that instead of furnishing bank guarantee directed above and as directed by the order dated 31st March, 2008, the petitioners will prepare a list of assets and properties of each and every unit of the Company as directed in writ petition No. 38967 of 2007 and will place the same before the Court on the next date fixed i.e. 5th May, 2008 for the purposes of forwarding the same to the Cane Commissioner for his verification and subjective satisfaction about the realization of arrears, if any and there would be a clear undertaking of the petitioners to pay the balance amount forthwith in case decision of the Court goes against them. Subject to fulfilment of the above conditions no coercive steps, including lodging the F.I.R. will be taken by the respondents against the petitioners, their officers and officials without the leave of the Court. Subject to fulfilment of the above conditions no coercive steps, including lodging the F.I.R. will be taken by the respondents against the petitioners, their officers and officials without the leave of the Court. It is further directed that there will be no adjournment/postponement of the case which is now fixed i.e. 5th May, 2008 except in exceptional circumstances. Sri Ravindra Singh, learned Counsel appearing on behalf of U.P. Cooperative Cane Federation stated that no payments have been made to the cane growers by the petitioners after 7th February, 2008. On the other hand, the petitioners have contradicted this statement. The parties are directed to exchange their affidavits to this aspect also. Respondents are directed to release the stocks of the sugar taken into joint custody for the purposes of realisation of the cane price (SAP) at the rate of SAP immediately on production of a certified copy of the order. Put up this case on 5th May, 2008. Dated: 22.4.2008.” 12. Counter affidavit has been filed by the respondents denying the case advanced on behalf of the petitioners. Learned Counsel for the petitioners submitted that the Division Bench of this Court had issued a mandamus to the respondents to undergo exercises which according to this Court was fair and reasonable exercise before fixing SAP. While fixing the cane price for the year 2007-08, it is admitted case of the respondents-State that they have not undergone the exercise as contemplated in judgment of Division Bench of this Court dated 19th December, 2007 in the case of Basti Sugar Mills. Learned Additional Advocate General appearing for the State made a statement that the exercise as contemplated and directed by this Court before fixing of the cane price for the year 2007-08 has not undergone by the State Government, but the factors similar to those suggested by the Court were taken into consideration by the State while fixing the sugarcane price for the year 2007-08. During the pendency of the writ petition, an amendment application was filed by the petitioners, which was allowed by this Court and pursuant thereto the amendments have been incorporated in the petition. During the pendency of the writ petition, an amendment application was filed by the petitioners, which was allowed by this Court and pursuant thereto the amendments have been incorporated in the petition. It would not be out of place to mention here that the Division Bench of this Court vide judgment and order dated 19th December, 2007 has held as under : “.........Hence, taking into account totality of the matter, we are of the view that following orders are necessary to be passed and accordingly passed hereunder : (a) Order impugned fixing SAP for the crushing season 2006-07 and circular/notification etc. in connection thereto stand quashed. (b) Consequently, the State will discharge the essential legislative function in its true sense by reassessing the SAP for the crushing season 2006-07 in consultation with the respective representatives of the cane-growers, sugar producing factories, appropriate executives of the Union and the State inclusive of representative of Cost Accounting Branch of the Ministry of Finance of the Union and the State Commission of Agricultural Costs and Prices, National Sugar Institute Kanpur, and any other person or institute required for the purpose. (c) Calling of the representatives of the Union of India for sharing their experience regarding fixing the price and overall assessment, will not be treated to be interference with the existence of the power and authority of the State. (d) In case the legislature desires and wants to apply its discretion to form a Committee of experts and affected persons to make a report to work upon it and further wants that such Committee can be formed under the Chairmanship of a retired High Court or Supreme Court Judge to maintain absolute independency, they are at liberty to do so. (e) In either of cases the decision should be backed by reasons giving adequate outline of norms, criteria or guidelines to incorporate in the Act/Rules/Order/Circular so that dispute in seriatim can be resolved for all time and delay in payment schedule price of sugarcane can be avoided. (f) Due to paucity of time, only for the crushing season 2006-07 norms, criteria or guidelines will be indicated in the decision having a binding effect upon the parties irrespective of making any formal amendment/circulation etc., as prescribed above, and the parties will act upon the communication of the decision. (f) Due to paucity of time, only for the crushing season 2006-07 norms, criteria or guidelines will be indicated in the decision having a binding effect upon the parties irrespective of making any formal amendment/circulation etc., as prescribed above, and the parties will act upon the communication of the decision. (g) The Court is constrained to fix the period of three months for the purpose of entire exercise by the State, as directed hereinabove, due to intervention of the subsequent crushing season. (h) Subject to final decision and communication thereof, payment of SAP, in case of shortfall or adjustment/recovery in case of overpayment by the sugar producing factories, will be given effect, therefore, question of coercive action, if any, will arise at that juncture in the appropriate cases. (i) However, no part of the payment already made by the sugar producers to the cane-growers as per fixation of price by the State will be refunded by them. (j) This order will not affect or create any hindrance to any sugar producing factory in payment SMP to the Central Government regularly. Thus, the writ petitions are disposed of.....................” 13. Learned Additional Advocate General appearing for the State submitted that of course the directions contained in the aforesaid judgment dated 19th December, 2007 in terms have not been complied with, but the State Government has taken into consideration all relevant factors while fixing SAP for the year 2007-08. 14. Sri Ravindra Singh, learned Counsel appearing for U.P. Cooperative Cane Union Federation submitted that in the year 2007-08, the cost of cultivation/production of the sugarcane, which is based on the average of yield of Seorahi, Shahjahanpur and Muzaffarnagar Cane Research Farms has been increased up to Rs. 114.09; however as per announcement of the SAP by the State Government on 31.10.2007, for the 2007-08, the SAP rates are mentioned at the same as were in the previous year 2006-07 i.e. Rs. 122.50 for rejected variety, Rs. 125/- for the general variety and Rs. 130/- for early variety. Sri Singh further submitted that while fixing cane price for the year 2007-08 though the cost of labour, electricity, fertilizers etc. has been increased but the sugarcane price has not been increased by the State Government, therefore the demand of the petitioners are against the interest of cane growers, who are entitled under the law for getting the remunerative cane price. 15. has been increased but the sugarcane price has not been increased by the State Government, therefore the demand of the petitioners are against the interest of cane growers, who are entitled under the law for getting the remunerative cane price. 15. It is submitted by Sri Singh that the price fixation is policy matter and should not be interfered with by this Court, which supports the contention of learned Additional Advocate General that the State Government has determined the price under Section 16 of “1953 Act”, which is known as SAP with considerations of relevant factors; i.e. “(i) The cost of cultivation of sugarcane. (ii) The cost of transport of sugarcane by cane growers from the field to purchase center or to mill gate as the case may be. (iii) A reasonable return on the aforesaid amount of his produce to cane growers. (iv) Availability of the cane area, demand of sugarcane by industries, profitability of the industries by selling sugar, and other bye produces etc. (v) The price of sugar cane paid by sugar factories in the preceding year. (vi) The factors necessary to avoid diversion of sugarcane from sugar industries to other consumers like Kolhu and Khandsari Units. (vii) The SAP announced by the State Government is most reasonable and justified, it is less than the SAP announced by the Punjab/Haryana and Uttaranchal, the neighbouring States.” 16. It is submitted by Sri Singh that the State Government determines the SAP with a view to provide uniform sugarcane price, so that there may not be any discrimination amongst to the cane growers on the basis of place or reservation/assignment of area with particular sugar mills. During the previous crushing period, the private sugar mills have given additional payment in the name of premium/incentives to the cane growers in addition to the SAP announced by the State Government since the price should be uniform in respect of all the sugar mills within the State of U.P. whether it is Co-operative/Corporation or private, the State Government has considered and taken into consideration the payment of additional price by the private Sugar Mills to the cane growers. It is further submitted that the private sugar mills have paid upto Rs. 23/- per qtl in addition to the SAP. In the crushing season 2005-06, the rate of SAP was Rs. 115/- for the general variety and Rs. It is further submitted that the private sugar mills have paid upto Rs. 23/- per qtl in addition to the SAP. In the crushing season 2005-06, the rate of SAP was Rs. 115/- for the general variety and Rs. 120/- for the early variety and as such besides other relevant consideration, the State Government has decided to increase Rs. 10/- per qtl while fixing the SAP for the crushing season 2006-07. However, in the current crushing season 2007-08, the SAP has been fixed similar to the crushing season 2006-07, and no enhancement have been proposed therein, though the cost of cultivation/production of sugarcane have been increased at the rate of about Rs. 11.81 per qtl in the current crushing season 2007-08. 17. Learned Counsel for the petitioners submitted that this incentive or additional payment is made pursuant to the SMP fixed by the Central Government. It is further submitted that the system of payment to both either additional or incentive demonstrates that the interest of cane growers are fully secured by the State Government while fixing the SAP, therefore either there was no justification for fixing the SAP or SAP was fixed at the rate much higher to the rate as fixed by the Central Government. 18. We have given our considered thoughts to the arguments advanced by learned Counsel for the parties. 19. The basic facts leading to the filing of present bunch of writ petitions are as under : "In order to appraise the legislative background and regulatory provisions with regard to sugar industry and the sugarcane pricing it is submitted that the history of laws applicable to sugar industry is as follows : “(a) Sugar Industry (Protection) Act, 1932. On 8th April, 1932, the Central Legislature passed the above Act to provide for the fostering and development of Sugar Industry in India in pursuance of the policy of protective discrimination of industries with due regard to the well being of the community. (b) The Sugarcane Act, 1934. The Sugarcane Act, 1934 was enacted by the Central Legislature to protect the interest of the farmers and for the purpose of assuring to them a fair price for their produce and to regulate the price at which sugarcane intended to be used in the manufacture of sugar might be purchased by or for factories. (b) The Sugarcane Act, 1934. The Sugarcane Act, 1934 was enacted by the Central Legislature to protect the interest of the farmers and for the purpose of assuring to them a fair price for their produce and to regulate the price at which sugarcane intended to be used in the manufacture of sugar might be purchased by or for factories. Following an intervening distribution of legislative powers, whereby the entire subject matter fell within the Provincial Legislative List and following a perception that the Sugarcane Act, 1934 was not sufficiently comprehensive the U.P. Legislature introduced another enactment being the U.P. Sugar Factories Control Act, 1938. (c) The U.P. Sugar Factories Control Act, 1938. The above enactment repealed The Sugarcane Act, 1934. The Act provided for : 1. The licensing of sugar factories. 2. The regulation of the supply of sugarcane to factories, (c) the minimum price for sugarcane. 3. The establishment of Sugar Control Board and Advisory Committee; and 4. A tax on the sale of sugarcane intended for use in factories. (d) The Defence of India Act. The Second World War intervened and an emergency was proclaimed. In effect, the Dominion laws got over riding effect over all Provincial laws to the extent of any repugnancy. Therefore, the Defence of India Act and the Rules made thereunder occupied the field, sugar was made a controlled commodity in the year 1942 and its production and distribution as well as the fixation of sugar prices were regulated by the Sugar Controller thereafter. (e) India (Central Government and Legislature) Act, 1946. On 26th March, 1946, the India (Central Government and Legislature) Act, 1946, was enacted. Section 2(1)(a) provided that the Indian Legislature shall have power to make laws inter alia with respect to trade and commerce in, and the production, supply and distribution of foodstuffs among others. (f) The Essential Supplies (Temporary Powers) Act, 1946. Acting in exercise of the power reserved under India (Central Government and Legislature) Act, 1946 the Central Legislature enacted the Essential Supplies (Temporary Powers) Act, 1946 to provide for the continuance during of powers to control production, supply and distribution of, and trade and commerce in, certain commodities. Food crops were defined as including crops of sugarcane. Acting in exercise of the power reserved under India (Central Government and Legislature) Act, 1946 the Central Legislature enacted the Essential Supplies (Temporary Powers) Act, 1946 to provide for the continuance during of powers to control production, supply and distribution of, and trade and commerce in, certain commodities. Food crops were defined as including crops of sugarcane. Section 3 of the Act empowered the Central Government to provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce of any essential commodity for maintaining or increasing the supply or for securing its equitable distribution and availability at fair prices. (g) Sugar and Gur Control Order, 1950. In exercise of the powers under the Essential Supplies Act, the Central Government promulgated the Sugar and Gur Control Order, 1950, inter alia empowering it to fix minimum price of sugarcane. This power of fixing the price of sugarcane was exercised by the Central Government from time to time by issuing notifications fixing the minimum prices to be paid by the producers of sugar in various States including U.P. (h) Industries (Development and Regulation) Act, 1951. The Parliament enacted the Industries (Development and Regulation) Act, 1951, which provides for the development and regulation of certain industries. By Section 2 of the Act it was declared that it was expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. Item 8 thereof is the industry engaged in the manufacture or production of sugar. (i) U.P. Sugarcane (Regulation of Supply and Purchases) Act, 1953. This Act was made after repealing U.P. Sugar Factories Control Act, 1938. The Act aimed to regulate the supply and procurement of sugarcane. Section 15 thereof deals with the declaration of reserved area and assigned area by the Cane Commissioner. Section 16 deals with Regulation of purchase and supply of cane in the reserved and assigned areas by the State Government. However up till 1973 the State never fixed what has come to be known as State Advised Price (SAP) invoking any of the provisions of the Act and even after that no notified order was issued in exercise of the powers conferred under any of the provisions of the Act. (j) Essential Commodities Act, 1955. However up till 1973 the State never fixed what has come to be known as State Advised Price (SAP) invoking any of the provisions of the Act and even after that no notified order was issued in exercise of the powers conferred under any of the provisions of the Act. (j) Essential Commodities Act, 1955. On 1st April, 1955, Parliament enacted the Essential Commodities Act, 1955 to provide in the interests of the general public “for the control of production, supply and distribution of, and trade and commerce in, certain commodities”. Sugar is treated as an Essential Commodity thereunder. In fact, sub-sections 3-C, 3-D and 3-E of Section 3 of the Essential Commodities Act are wholly devoted to control and regulation of sugar. Thus, sugar has been and continues to be the subject of stringent control and regulation. (k) The Sugarcane (Control) Order, 1966. The Sugarcane (Control) Order, 1966 (In short ‘Order’) the Central Government is authorized to and fixes the ‘Statutory Minimum Price’, (which shall hereinafter be referred to as ‘SMP’ for brevity), for sugarcane. While doing so, the Central Government is guided by clause 3(1) of the Order whereby the minimum price of sugarcane to be paid by producers of sugar for the sugarcane purchased by them, is provided to be fixed only having regard to the following relevant factors : (a) Production cost of cane; (b) The return to the grower from alternative crops and the general trend of prices of agricultural commodities; (c) Availability of sugar at fair price; (d) Price at which sugar is sold by producers; and (e) The recovery of sugar from cane. 20. That for the fixation of sugarcane price (SMP) by the Central Government, there is a proper procedure and mechanism and every component is taken care of by the Central Government, while fixing SMP as stated hereinbefore. The Central Government has appointed Commission of Agricultural Costs and Prices (CACP), which is an independent body and which carries on the function of determining the cost of cultivation of various agricultural commodities and minimum support prices are determined and advised to the Central Government. 21. That the Commission for Agricultural Costs and Prices (CACP) recommends the fixation of SMP to the Central Government every year. 21. That the Commission for Agricultural Costs and Prices (CACP) recommends the fixation of SMP to the Central Government every year. The CACP in its report on sugarcane pricing for the season 2007-08 arrived at the cost of production of sugarcane of different States, including the State of U.P. as under : Andhra Pradesh - Rs. 90.78 Per qtl Haryana - Rs. 88.94 “ “ Karnataka - Rs. 77.75 “ “ Maharashtra - Rs. 91.01 “ “ Tamil Nadu - Rs. 79.63 “ “ Uttar Pradesh - Rs. 81.32 “ “ 22. That the CACP while working out the cost of production of sugarcane has taken into consideration the cost of all inputs including cost of hired labour and cost of family labour. The CACP also added 10% as managerial cost while arriving at the C-3 cost. The CACP has thus worked out the cost of production of sugarcane in U.P. for 2007-08 at Rs. 81.32 per qtl. Against this the State Government has fixed the SAP at Rs. 125/- per qtl, which is 47% higher than the cost of production. Therefore, the SAP has been fixed arbitrarily and is motivated by political consideration only. 23. That as per the procedure the cost of production of sugarcane including the transportation charges is surveyed and assessed by CACP every year and advised to the Central Government. The Central Government announces the Statutory Minimum Price (SMP) for sugarcane every year based on such advice. The SMP is linked with the recovery of sugar from sugarcane with the base recovery of 9% and for every increase by 0.10% additional price is paid to the cane grower. The Statutory Minimum Price for the State of U.P. for the current crushing year accordingly comes to Rs. 81.32 per qtl (based on recovery of 9%) and for every 0.10 % increase in recovery additional 90 paise are to be added thereto. 24. That as is also apparent from the above-referred report of the Commission for Agricultural Cost and Prices for the year 2007-08, the cost of agricultural labour and other components have only marginally increased during this year as compared to previous year and the same has been duly accounted for and therefore the exorbitant increase in State Advise Price is unwarranted and arbitrary. 25. 25. That it may be noted that the calculation of cost of sugarcane price in U.P. at the SMP and keeping in mind the international standards of sugarcane cost in the price of sugar (which is considered to be not more than 60-65% of the selling price of sugar), the price of sugar cane also comes to Rs. 78 per qtl (if standard of 60% is taken) and Rs. 84.50 per qtl (if standard of 65% is taken) based on current prices of Rs. 1,300 per qtl. It is pertinent to mention here that these prices are expected to lower down up to 1100 to 1200 per qtl in view of glut in global sugar market. Therefore, the fixation of sugarcane price by the State of U.P. for the season 2007-08, at Rs. 125/- per qtl is ex-facie arbitrary and restrictive to the statutory and constitutional rights of the petitioners. It may further be noted that in the world scenario, India is the country which has the highest cane price but lowest sugar price. Thus, in such situation the existence of sugar industry in India is on stake. 26. The contention of petitioners is that the power, if any, of the State Government to fix price of the sugarcane is un-constitutional and in-exercisable, as is apparent from the Act and its Scheme. In fact, there is no explicit provision in the Act related to price fixation of sugarcane. Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchases) Act, 1953 is reproduced hereunder : “16. Regulation of purchase and supply of cane in the reserved and assigned areas.—(1) The State Government may, for maintaining supplies, by order, regulate : (a) the distribution, sale or purchase of any cane in any reserved or assigned area; and (b) purchase of cane in any area other than a reserved or assigned area. (2) Without prejudice to the generality of the foregoing powers such order may provide for : (a) the quantity of cane to be supplied by each Cane-grower or Cane-growers’ Co-operative Society in such area to the factory for which the area has so been reserved or assigned. (2) Without prejudice to the generality of the foregoing powers such order may provide for : (a) the quantity of cane to be supplied by each Cane-grower or Cane-growers’ Co-operative Society in such area to the factory for which the area has so been reserved or assigned. (b) the manner in which cane grown in the reserved area or the assigned area, shall be purchased by the factory for which the area has been so reserved or assigned and the circumstance in which the cane grown by a cane-grower shall not be purchased except through a Cane-growers’ Co-operative Society. (c) the form and the terms and conditions of the agreement to be executed by the occupier or manager of the factory for which an area is reserved or assigned for the purchase of cane offered for sale; (d) the circumstances under which permission may be granted : (i) for the purchase of cane grown in reserved or assigned area by a Gur, Rab or Khandsari Manufacturing Unit or any person or factory other than the factory for which area has been reserved or assigned, and (ii) for the sale of cane grown in a reserved or assigned area to a Gur, Rab or Khandsari Manufacturing Unit or any person or factory other than the factory for which the area is reserved or assigned; (e) such incidental and consequential matters as may appear to be necessary or desirable for this purpose. Submissions of learned Counsel for the petitioners : Question of constitutionality of the provisions : 27. That upon clear reading of the above Section of the U.P. Sugarcane Act, 1953, admittedly there is no mechanism or procedure provided for such fixation of price and further the State has neither considered any relevant statistics or data nor followed a like procedure adopted by the Central Government while fixing the SMP. 28. That the power to fix State Advised Price (SAP) is traced to Section 16 of the U.P. Sugarcane (Regulation of Supply and Procurement) Act, 1953 (in terms of judgment in U.P. Co-operative Cane Unions Federations v. West U.P. Sugar Mills Association and others, 2004 (5) SCC 430 ). However, there is a glaring absence of a complete scheme, at least minimal, showing intent of legislature for price fixation in the Section. 29. However, there is a glaring absence of a complete scheme, at least minimal, showing intent of legislature for price fixation in the Section. 29. That the question of constitutionality of Section 16 or excessive delegation is not finally decided by the Supreme Court in U.P. Co-operative Cane Unions Federations v. West U.P. Sugar Mills Association and others, 2004 (5) SCC 430 , since the minority has held that Section 16 would be unconstitutional as it delegates essential legislative functions without any guidelines. The majority has expressed no opinion on this point. Thus, the view of the minority on this point is law laid down by the Hon’ble Supreme Court in (2004) 5 SCC 430 and thus, binding. 30. That in fact the question as to whether there were sufficient guidelines in the 1953 Act of U.P. (or in Section 16 thereof) as to the principles on which a further minimum price (SAP) could be fixed by the State Government under Section 16 i.e. in addition to the Statutory Minimum Price (SMP) under Clause 3(1) and further additional price under Clause 5-A of the Sugarcane (Control) Order, 1966, was and is a matter, not decided either by the majority judgment in (2004) 5 SCC 430 , or in any other decision. It is only by reason of the majority decision of the Constitution Bench of the Supreme Court holding that the regulatory power under Section 16 includes the power to fix price of sugarcane, that the question arises whether U.P. Legislature has indicated to its principles or the basis on which such price of sugarcane (additional to the price fixed by Central Government under Essential Commodities Act and Clause 5-A of Sugarcane (Control) Order should be fixed and determined. Since this was totally absent in the Act, and no guidelines were provided, it is tantamount to an abdication of essential legislative function to fix price, as held by Supreme Court in 1994 (1) SCC 648 . 31. That assuming that the regulatory power under Section 16, as traced by the Supreme Court, includes within its purview the power to fix the State Advised Price, the same would then be ultra vires of Article 14 of the Constitution of India, as it delegates essential legislative function on the executive without any guidelines whatsoever. 31. That assuming that the regulatory power under Section 16, as traced by the Supreme Court, includes within its purview the power to fix the State Advised Price, the same would then be ultra vires of Article 14 of the Constitution of India, as it delegates essential legislative function on the executive without any guidelines whatsoever. Therefore, the question of constitutionality of Section 16 needs to be re-examined, since the same has not yet been examined in the Judgment reported in (2004) 5 SCC, 430 even by the Supreme Court. 32. That in fact the provisions of Section 16 of the Act of 1953 would be clearly arbitrary in view of the fact that no guidelines are laid down therein on the basis of which the State Advised Price could be fixed. 33. Thus, on the strength of the aforesaid arguments, learned Counsel for the petitioners submitted that the provisions of Section 16 of 1953 Act is therefore clearly arbitrary in view of the fact that no guidelines are laid down therein on the basis of which the SAP could be fixed. The petitioner has extracted certain paragraphs of the judgment of Apex Court in 2004 (5) SCC 430 and a submission is made that since Section 16 of 1953 Act do not laid down any norms, criteria or guidelines governing the higher price fixation of the sugarcane or even have not left to be prescribed by the Rules. There is no scope for exercise of the powers of fixation of price, if any, at all and orders in the nature passed therein, namely the order fixing sugarcane price is therefore unconstitutional and liable to be struck down. 34. Our answer in view of the law laid down by the Apex Court in the case of U.P. Cooperative Cane Union Federation v. West U.P. Sugar Mills Association and others, 2004 (5) SCC 430 , is that we cannot go into this question and the law laid down in the case of U.P. Cooperative Cane Union Federation (supra) is binding on this Court. 35. It is then contended on behalf of the petitioners that the existence of power and exercise of powers are two different aspects. Mere existence of powers in the statute cannot give way to unrestricted exercise of powers. 35. It is then contended on behalf of the petitioners that the existence of power and exercise of powers are two different aspects. Mere existence of powers in the statute cannot give way to unrestricted exercise of powers. Where a power does exist, but the modality to exercise the power does not exist in the statute the power is nothing but excessive delegation of power and hence, it would be ultra vires and unconstitutional. 36. Even if it is presumed that the power does exist in Section 16, there is no statutory provisions/guidelines laying down mechanism for price fixation. Hence, even if it is presumed that power is there, the same cannot be exercised unless norms, criteria or guidelines governing the price fixation are decided. Hence, exercise of power by the State Government is illegal. This has been held by Supreme Court in large numbers of decisions. 37. That in addition to the above, it is essential to note that the power of regulation as stated in Section 16 is not an unfettered power and may not be used in an unguided and arbitrary manner except in so far as it provided for, and that for the purposes provided for specifically in the enactment. 38. That it is settled law that the price fixation is a legislative function. A legislative function may in certain limited cases be performed by the Executive, provided meaningful and sufficient control is exercised by the legislature over such activity entrusted with the executive by way of well established methods of legislative control and that if and only if delegation of the power is explicit in the Statute. Where such is the intention of the legislature, it essentially lays down a complete scheme in the statutory provisions which serve as guidelines for exercise of powers by the executive, and in addition exercises meaningful supervisory control. However, all the same are missing under the U.P. Sugarcane Act. 39. That the fixation of price is a statutory function of the State Government under the provisions of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. The Apex Court in its judgment in 2004 (5) SCC, 430 has interpreted the existence of power under the Act. However, all the same are missing under the U.P. Sugarcane Act. 39. That the fixation of price is a statutory function of the State Government under the provisions of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. The Apex Court in its judgment in 2004 (5) SCC, 430 has interpreted the existence of power under the Act. It is submitted that by the said judgment of Apex Court has recognized the power of the State Government for fixation of SAP but such power must be guarded and be exercised with application of mind as per the guidelines and after taking into account myriad factors provided therein. However, the same are absent in the Act and the power attributed is unguided. 40 That it is submitted that as per the aforesaid judgment of Apex Court, the power to fix price (SAP) is available to the State Government, which has been delegated to the executive. However, such delegation has been effected without appropriate and necessary guidelines in order to guide the exercise of such delegated powers. It is further submitted that there was a provision for constitution of a Board under Sections 4 and 5 of the Act, however the same was not established/constituted since 1953 and now the said provisions itself have been deleted from the Act. It is respectfully submitted that as such, the said delegation of legislative function without any norms, criteria or guidelines is tantamount to excessive delegation of ‘essential legislative power’ and is unconstitutional. 41. That it is submitted further that even if it is presumed that Section 16 gives power to the State Government, the respondent State Government has neither framed any guidelines nor laid down any norms or criteria for such price fixation and in view of the fact that this is in a case where even the legislature itself failed in doing so, the price fixed by the impugned order becomes absolutely arbitrary and illegal and is thus non est. Further, it is settled proposition of law that price fixation is in the nature of legislative action and it is imperative that the action of the Authority should be informed by the reasons and further also that State cannot fix an arbitrary price nor cane price be fixed on extraneous condition, as upheld by the Apex Court in various cases, including in the case of Sitaram’s Sugar (supra) (1990) 3 SCC 223 and Saraswati Industrial Syndicate Ltd. v. Union of India, (1974) 2 SCC 630 . 42. That it is submitted that if the power under the Act is being exercised without any reference to relevant factors and without any guidelines and without any scheme, material or facts by the State Government then the fixation of SAP under such exercise of power is totally illegal and arbitrary and is a clear case of abdication of essential legislative function, which may be restrained. 43. That it is settled that the discretion to fix the sugarcane price is coupled with the duty to ensure inter alia that the manufactures of sugar are not visited with arbitrary price of sugarcane. In the circumstance, the discretion was coupled with the duty which has not been discharged. In the facts of the case, the executive has indulged in the exercise of wide powers very clearly with an eye on a large vote bank and in such exercise, the purpose and the policy of the Act has been ignored and the same also have simultaneous distractive dimension in so far as the sugar mills are concerned. 44. That besides absence of guidelines/norms/criteria there was no material or basis before the Government while fixing the SAP for the sugar for crushing season 2007-08 and has been fixed on the whims and fancies. It is respectfully submitted that various relevant facets such as Year-wise investment, Recovery, production capacity, price of commodity-Domestic and International, SMP of the Central Government, Consumers’ consumption trends, Competitive price of different States as well as international market, the requirement of variation of price from previous year, recommendations of various experts and process of assessment of the Central Government etc. were completely excluded and the price was instead fixed solely with ulterior motive or creation of vote banks to serve vested interests. were completely excluded and the price was instead fixed solely with ulterior motive or creation of vote banks to serve vested interests. Hence, it is clear that the fixation of SAP is arbitrary and is in ignorance of “relevant factors” and materials and is only based on extraneous considerations and therefore liable to be quashed and set aside. 45. That as contrary to the above, Clause 3 of the Sugarcane (Control) Order, 1966 empowers the Central Government to fix the statutory price of sugarcane, payable by the producers of sugar. The Central Government, in fact, fixes the Statutory Minimum Price (SMP) for different factories in the country every year which is payable by them from the beginning of the crushing season. The Central Government fixes SMP of sugarcane payable by individual sugar factories in respect of each season (October-September) under Clause 3 of the Sugarcane (Control) Order, 1966, having regard to the factors mentioned therein, no sugar factory can pay the sugarcane growers below this price. The SMP of sugarcane is fixed on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) which collects data related to cost of producing sugarcane and price of sugar prevailing and analyses various “relevant factors” before fixing SMP. The Central Government also fixes the factory wise SMP of sugarcane taking into account the recovery level of the respective sugar factory. Therefore, the SMP is linked to the specified “relevant factors” particularly the recovery level. Higher the recovery level, higher is the SMP and vice-versa e.g. in U.P. the average recovery is 9.5%. At this recovery level the average SMP in U.P. works out to about Rs. 87.88 per qtl, whereas the average recovery level in Maharashtra is 11.63%, and thus, their the average SMP works out to be Rs. 95/- per qtl. 46. That the aforesaid Sugarcane (Control) Order also provides for payment of additional cane price calculated according to the formula contained in Clause 5-A of the Order, at the end of the sugar year. The payment of additional price is based, primarily, on the consideration that if the sugar prices increase beyond the fair level estimated and taken into consideration in fixing SMP, then the additional profit should be equitably shared between the farms and sugar mills. This takes due care of price fluctuation and provides for equitable basis of sugarcane price payable to the farmers. This takes due care of price fluctuation and provides for equitable basis of sugarcane price payable to the farmers. The said Order therefore, provides exhaustively for the cane price payable by the sugar factories to the cane growers and nothing over and above the same is payable by the sugar factories. Any violation of the statutory scheme governing cane price is bound to affect the health of the sugar industry as a whole, which is a matter emphasized by the various Expert Committees. 47. That as is apparent from the above, the price fixation of cane by the Central Government is logical and is based on scientific method taking into consideration the factors prescribed in law, whereas there are no such parameters prescribed under the State Act for fixing the SAP or any guidelines with the help of which and/or on the basis of which State Government has to fix SAP, making, therefore, the whole exercise arbitrary and per-se illegal. In essence, it may be seen that while the Central Government takes various relevant factors into account while fixing the minimum price, the State Government is not bound by any such considerations of relevant factors while fixing its minimum price. In absence of guidelines, the exercise of the legislative function by the executive is illegal. It is submitted that such fixation of cane price by the State merely taking reference to an enactment without being guided by any scientific or rational basis of any nature, is arbitrary and illegal. On the bare perusal of Section 16 and other provisions of the Act, it may be seen that the factors prescribed under Clause 3(1) of the Order do not find place anywhere therein. 48. That a comparison of SMP and SAP fixed for various years would make it clear that SAP has always been consistently higher than SMP and significantly so the current difference being in the region of 40%. It is hence clear that the actual/real price being paid by the mill owner is SAP and not SMP. While the Central Government has been at pains to fix a scientifically informed price, the State Government destroys its efficacy by fixing a price in complete disregard not only of the relevant considerations that form the basis in fixation of SMP but also of such other factors that may form a rational basis for a minimum price fixation. While the Central Government has been at pains to fix a scientifically informed price, the State Government destroys its efficacy by fixing a price in complete disregard not only of the relevant considerations that form the basis in fixation of SMP but also of such other factors that may form a rational basis for a minimum price fixation. It is submitted that the State Government may have the power and competence to fix minimum sugarcane price but the said power has to be exercised judiciously with reference to relevant factors and not arbitrarily guided by extraneous considerations, such as appeasement of lobbies with vested interests and political considerations. A Comparative chart of SAP and SMP for the last eleven years is as follows : Sl. No. Year Statutory Minimum State Advised Price (SMP) (Rs. Per Qntl.) Price (SAP) (Rs. Per Qntl.) 1. 2007-08 81.18 125.00 2. 2006-07 80.25 125.00 3. 2005-06 79.50 115.00 4. 2004-05 74.50 107.00 5. 2003-04 73.00 95.00 6. 2002-03 69.50 95.00 7. 2001-02 62.05 95.00 8. 2000-01 59.50 90.00 9. 1999-00 56.10 85.00 10. 1998-99 52.70 80.00 11. 1997-98 48.45 75.00 12. 1996-97 45.90 72.00 49. That in view of the above, it is apparent that on the one hand SMP is Rs. 80.25 per qtl for 2006-07 for U.P. after considering all the factors and following the procedure established by law on the other hand the SAP fixed by the State Government is Rs. 125/- (average), which is almost 60% higher than the SMP fixed by the Central Government. Further, the difference between SAP and SMP is around 50% of the SMP. Further, this year also mechanically and arbitrarily the SAP of previous year has been retained again. Thus, it is apparent that the fixation of SAP is based on extraneous consideration and arbitrary in nature and liable to be quashed. 50. That, it is apparent from the above that the State of U.P. has the maximum cost of sugar cane due to arbitrary fixation of SAP, which increases the sale price of sugar than the other States, which affects the sale of U.P. mill owners and thus offends their Fundamental Rights under Articles 14 and 19(1)(g) of the Constitution of India. That, it is apparent from the above that the State of U.P. has the maximum cost of sugar cane due to arbitrary fixation of SAP, which increases the sale price of sugar than the other States, which affects the sale of U.P. mill owners and thus offends their Fundamental Rights under Articles 14 and 19(1)(g) of the Constitution of India. It is submitted that the SAP is based on completely extraneous consideration and is fixed without application of mind and even without taking consideration the mandatory ingredients as seen in the Sugar Cane Control Order which is adhered to by the Central Government in the fixation of its SMP. 51. That sugar production, in the country in the crushing season 2007-08, is excepted to substantially increase to about 320 lakhs tons. In Uttar Pradesh alone this production may reach a level of 100 lakhs tons. Coupled with this the prices in the month of November, 2007 are excepted to fall below to Rs. 1,200 per qtl. The futures at the NCDEX for February/March, 2008 are being quoted at between Rs. 1100 to 1150 per qtl. 52. That in view of the fact that the cost of production of sugar for 2006-07 for the U.P. Sugar Industry, as a whole was estimated to be Rs. 1737 per qtl as against an actual realization of not more than Rs. 1300/- per qtl. Therefore the industry has suffered loss of approximately Rs. 437/- per qtl. On a production of 85 lakhs tons, the overall deficit for the year 2006-07 is estimated to be Rs. 3714 crores. 53. That various statutory and non-statutory committees are appointed by the Government to study the SAP and SMP comparatively in order to improve the over all performance of the Sugar Industry in the country. The said expert bodies are unanimous in their opinion that unscientific and unguided fixation of SAP by States militates against the whole scheme of price fixation of sugarcane and adversely affecting the sugar industry and is the most important reason behind closure of many sugar Industries. 54. To us it appears that in view of the decision of the Constitution Bench of the Apex Court in the case of U.P. Cooperative Cane Union Federation v. West U.P. Sugar Mills Association and others, 2004 (5) SCC 430 , we do not think it proper to enter into the controversy. 54. To us it appears that in view of the decision of the Constitution Bench of the Apex Court in the case of U.P. Cooperative Cane Union Federation v. West U.P. Sugar Mills Association and others, 2004 (5) SCC 430 , we do not think it proper to enter into the controversy. This has been settled by the decision of the Apex Court in the case of U.P. Cooperative Cane Union Federation (supra). 55. That it is submitted that after the said judgment of the Apex Court, the existence of the power of the State for fixing the SAP was upheld, but the issue of exercise of said power was neither before the Apex Court nor was decided by it, which still remains open to scrutiny of the Courts to withstand the litmus test of reasonableness. As a matter of fact, even the question of constitutionality of Section 16 by the reason of its being laden with excessive delegation was not examined by the Apex Court. 56. That the State Government has till date not promulgated any order relatable to Section 16 of the Act of 1953 on the basis of which the price may have been fixed; in the absence of any order framed by the State Government, the price as fixed and impugned is rendered without authority of law and arbitrary. 57. The State Government has, on the contrary, repealed Sections 3 and 4 which provided for constitution of a Sugarcane Board and could be treated theoretically as a legislative safeguard. However, the said Board was never constituted and/or never advised on price fixation. Further since it is repealed, even theoretically, there is no machinery to advice on price fixation. Hence the fixation of price is illegal and arbitrary. 58. That the SAP is fixed by State Government without considering any relevant factors and/or without any material or record or report before the State Government. Thus, fixation is based on extraneous mainly political consideration. Hence, it is arbitrary and liable to be quashed. The State has not collected any data in respect of either the cost of production of sugarcane or the cost of production of sugar, nor had any consultation with the representatives of the sugar industry, nor had taken any other relevant consideration before announcing the SAP. Hence, it is arbitrary and liable to be quashed. The State has not collected any data in respect of either the cost of production of sugarcane or the cost of production of sugar, nor had any consultation with the representatives of the sugar industry, nor had taken any other relevant consideration before announcing the SAP. The administrative order, therefore, appears to have been issued merely on political considerations in total disregard of the provisions of the U.P. Act of 1953 and the Sugarcane (Control) Order, 1966. 59. The failure on the part of the State Government to take into consideration relevant factors and further ignoring consideration of vital factors such as cost of manufacture and estimated realization rendered the impugned SAP arbitrary and unconstitutional. 60. As we have held that we cannot express any opinion on this aspect of the arguments advanced on behalf of the petitioners in view of the decision of the Apex Court in U.P. Cooperative Cane Union Federation (supra). It is then submitted by petitioners’ Counsel that Division Bench of this Court in a similar case in Basti Sugar Mills Company Ltd. and another v. State of U.P. and others, 2008(1) ADJ 36 (DB) whereby this Court vide its judgment and order dated 19th December, 2007 has quashed the SAP fixed by the State Government. 61. In writ petition No. 38967 of 2007 (Bajaj Hindusthan Ltd. and another v. State of Uttar Pradesh and others), wherein the SAP fixed for the year 2006-07 was challenged, wherein the SAP fixed by the State Government for the year 2006-07 has been quashed. The operative portion thereof is as under : “(a) Order impugned fixing SAP for crushing season 2006-07 and Circular/Notification etc. in connection thereto stands quashed. (b) Consequently, the State will discharge the essential legislative function in its true sense by reassessing the SAP for the crushing season 2006-07 in consultation with the respective representatives of the cane growers, sugar producing factories, appropriate executives of the union and the State inclusive of representative of Cost Accounting Branch of the union and the State, Commission of Agricultural Costs and Prices, National Sugar Institute, Kanpur, any other person or institute required for the purpose. (c) Calling of the representatives of the Union of India for sharing their experience regarding fixing the price and over all assessment, will not be treated to be interference with the existence of the power and authority of the State. (d) In case the legislature desires and wants to apply its discretion to form a committee of experts and affected persons to make a report to work upon it and further wants that such committee can be formed under the chairmanship of a retired High Court or Supreme Court Judge to maintain absolute independence, they are at liberty to do so. (e) In either of cases, the decision should be backed by reasons giving adequate outlines of norms, criteria or guidelines to incorporate in the Act/Rules/Circular so that dispute in seriatim can be resolved for all time and delay in payments in the scheduled price of sugarcane can be avoided. (f) Due to paucity of time, only for the crushing season 2006-07 norms, criteria or guidelines will be indicated in the decision having a binding effect upon the parties irrespective of making any formal amendment/circulation etc. as prescribed above, and the parties will act upon the communication of the decision. (g) The Court is constrained to fix the period of three months for the purpose of entire exercise by the State, as directed hereinabove, due to intervention of the subsequent crushing season. (h) Subject to final decision and communication thereof, payment of SAP, in case of shortfall or adjustment/recovery in case of over payment by the sugar producing factories, will be given effect, therefore, question of coercive action, if any will arise at that juncture in the appropriate cases. (i) However, no part of the payment already made by the sugar producers to the cane growers as per fixation of price by the State will be refunded by them. (j) This order will not affect or create any hindrance to any sugar producing factory in paying SMP to the Central Government regularly.” 62. It is then contended that despite the direction issued by the Division Bench of this Court in the case of Bajaj Hindustan Ltd. (supra), the State Government has fixed the SAP without undertaking the exercise contemplated in the judgment dated 19th December, 2007. It is then contended that despite the direction issued by the Division Bench of this Court in the case of Bajaj Hindustan Ltd. (supra), the State Government has fixed the SAP without undertaking the exercise contemplated in the judgment dated 19th December, 2007. Learned Counsel for the petitioners also relied upon the statement made by learned Additional Advocate General appearing for the State submitted that when this Court was pleased to pass an interim order dated 17th January, 2008 in the connected writ petition No. 3271 of 2008. The extract of the aforesaid order is reproduced below : “Learned Additional Advocate General and learned Standing Counsel for the respondent No. 4 (U.P. Co-operative Cane Union) ....................... During course of the arguments, learned Additional Advocate General has admitted that the judgment and order passed by this Court on 19th December, 2007 is still operative and binding................The Additional Advocate General has further stated that the exercise contemplated under the judgment dated 19th December, 2007 has not yet been undertaken.” 63. Learned Counsel for the petitioners further submitted that during the course of hearing of the matter for interim stay that the judgment and order dated 19th December, 2007 passed in writ petition 33288 of 2007 has not been stayed by the Apex Court and the Special Leave Petition is pending against the said judgment, therefore the said direction issued by this Court in the case of Bajaj Hindustan Ltd. (supra) has not yet been complied with by the State Government before fixing the sugarcane price for the current season, namely, 2007-08. This being contrary to the direction issued by this Court in the case of Bajaj Hindustan Ltd. (supra) in fact the State Government is in contempt of the orders passed by this Court. It is further submitted that since the direction issued in the case of Bajaj Hindustan Ltd. (supra) has not been undertaken by the State Government before fixing the sugarcane price for the current crushing season i.e. 2007-08, therefore the SAP fixed by the State Government for the current year is liable to be quashed on this ground alone. 64. It is further submitted that since the direction issued in the case of Bajaj Hindustan Ltd. (supra) has not been undertaken by the State Government before fixing the sugarcane price for the current crushing season i.e. 2007-08, therefore the SAP fixed by the State Government for the current year is liable to be quashed on this ground alone. 64. Learned Counsel for the petitioners on the strength of the judgment in the case of Basti Sugar Mills (supra) with regard to the SAP fixed for the year 2006-07 submitted that though Special Leave Petition has been filed against the judgment and order dated 19th December, 2007 in the case of Basti Sugar Mills (supra), but there is no interim order from the Apex Court and the judgment of the Division Bench still holds good and it does not lie in the mouth of the respondents to say that they can fix the SAP for the crushing season 2007-08 without complying with the directions issued by the Division Bench of this Court in the case of Basti Sugar Mills (supra). 65. It is then contended that the decision of the Apex Court in the case of U.P. Co-operative Federation (supra) lays down that the State Government has power to regulate the sugarcane price and that is why it has power to fix the SAP, but in view of the fact that the Control Order of 1953 Act do not provide for any guidelines or criteria for price fixation, thus the price fixation for the crushing season 2007-08 is to be declared arbitrary and deserves to be quashed on the basis of the principles laid down by the Division Bench of this Court in the case of Basti Sugar Mills (supra), inasmuch as learned Additional Advocate General has submitted that it is correct that the directions issued by the Division Bench of this Court in the case of Basti Sugar Mills (supra) have not been complied with while fixing the SAP for the year 2007-08. Therefore in our opinion so long the judgment of the Division Bench in the case of Basti Sugar Mills (supra) is not reversed or upset by the Apex Court, the respondents are bound to comply with the directions issued in the aforesaid case. Therefore in our opinion so long the judgment of the Division Bench in the case of Basti Sugar Mills (supra) is not reversed or upset by the Apex Court, the respondents are bound to comply with the directions issued in the aforesaid case. Admittedly, as would be clear from the different interim orders quoted in this judgment hereinabove, that there is no interim order passed by the Apex Court operative with regard to the judgment of this Court in the case of Basti Sugar Mills (supra). 66. Learned Additional Advocate General submitted that it may be correct that the State Government has not complied with the directions issued in the case of Basti Sugar Mills (supra) before fixing the SAP for the current year i.e. 2007-08, yet all the necessary criteria and interest are taken into consideration by the State Government while fixing the SAP for the year 2007-08, therefore the SAP fixed for the year 2007-08 cannot be quashed only on the ground that the State has not complied with the directions issued by this Court in the case of Basti Sugar Mills (supra). 67. We have given our considered thoughts to the arguments advanced on behalf of learned Counsel for the parties. In our opinion, since the judgment of this Court in the case of Basti Sugar Mills (supra) has neither been stayed nor upset by the Apex Court, though the Special Leave Petition is pending, it cannot be said on behalf of State that they were not bound by the directions issued by this Court before fixing the SAP for the current year i.e. 2007-08. 68. Learned Additional Advocate General further submitted that the judgment in Basti Sugar Mills (supra) relates to price fixation of the year 2006-07 and therefore the same cannot apply for the price fixation of the year 2007-08, therefore the principles of res-judicata or constructions will not apply while judging the price fixation for the year 2007-08. We are not impressed by the argument advanced by learned Additional Advocate General. We are not impressed by the argument advanced by learned Additional Advocate General. The machinery for fixation of the SAP which has been employed by the State while fixing sugarcane price for the crushing season 2006-07 and considerations that were laid before the State while fixing sugarcane price for the year 2006-07 having been held to be arbitrary by the Division Bench in the case of Basti Sugar Mills (supra) with which we are in full agreement, it is not open to the State to come forward and advance the argument that the price fixation which has been set aside by this Court in the case of Basti Sugar Mills (supra) since was with regard to the crushing season 2006-07, therefore the judgment will not apply to the present price fixation which is for the year 2007-08. A perusal of the guidelines/directions issued by this Court in the case of Basti Sugar Mills (supra), which have been quoted above clearly demonstrate that this Court had directed the State to fix the sugarcane price for any ensuing crushing year only after the directions issued in the case of Basti Sugar Mills (supra) are complied with and that having not been done by the State for the reasons given in the judgment of Basti Sugar Mills (supra) and for the reasons given by us, we are of the opinion that the sugarcane price fixed by the State for the crushing season 2007-08 by the impugned order dated 31st October, 2007 deserves to be quashed. 69. Before the judgment could be pronounced, learned Standing Counsel filed civil misc. application No. 154065 of 2008 with the prayer that these writ petitions may be dismissed in view of judgment of Lucknow Bench of this Court in writ petition Modi Sugar Mills v. State of U.P., 2008(7) ADJ 208 (DB)(LB). The said application is heard at length and we have dismissed the application referred to above by our order of the date. 70. In view of what has been stated above, these writ petitions succeed and are allowed. The impugned order dated 31st October, 2007 whereby the sugarcane price for the year 2007-08 has been fixed by the State is quashed. 70. In view of what has been stated above, these writ petitions succeed and are allowed. The impugned order dated 31st October, 2007 whereby the sugarcane price for the year 2007-08 has been fixed by the State is quashed. The petitioners are directed to pay the sugarcane price on the basis of SMP fixed by the Central Government till the State Government fixes the price in accordance with law after complying with the directions issued by this Court in the case of Basti Sugar Mills (supra). ———