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1 Reportable in the Supreme Court of India Civil 1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE/ORIGINAL JURISDICTION CIVIL APPEAL NO. 7508 OF 2005 WEST U.P. SUGAR MILLS ASSOCIATION & ORS. .. APPELLANTS VERSUS THE STATE OF UTTAR PRADESH & ORS. .. RESPONDENTS WITH C.A. No. 7509-7510/2005 CONMT. PET. (C) NO. 169/2006 IN C.A. NO. 7508/2005 C.A. NO. 150/2007 CONMT. PET. (C) NO. 254/2007 IN C.A. NO. 7508/2005 CONMT. PET (C) NO. 253/2007 IN C.A. NO. 7508/2005 C.A. NO. 2664/2007, C.A. NO. 4026/2009 C.A. NO. 4014-4023/2009, C.A. NO. 4024/2009 C.A. NO. 4025/2009, C.A. NO. 3911-3912/2009 C.A. NO. 3925/2009, C.A. NO. 3996-3997/2009 SLP (C) NO. 18681/2008, SLP (C) NO. 19183/2008 SLP (C) NO. 20206/2008, SLP (C) NO. 20205/2008 SLP (C) NO. 21576-21581/2008, SLP (C) NO. 21585-21587/2008, SLP (C) NO. 23202/2008 2 SLP (C) NO. 26026/2008, CONTMP. PET (C) NO. 263-264/2008 IN C.A. NO. 3996- 3997/2009 CONTMP. PET (C) NO. 267-268/2008 IN C.A. NO. 3996- 3997/2009 CONTMP. PET (C) NO. 265-266/2008 IN C.A. NO. 3996- 3997/2009 C.A. No. 4764/2009 and T.C. (C) NO. 96/2013 J U D G M E N T M. R. Shah, J. 1. Having noted that there is a clear conflict between the two decisions of this Court, one in the case of Ch. Tika Ramji & Others, Etc. vs. The State of Uttar Pradesh & Others [AIR 1956 SC 676 = 1956 SCR 393 = 1956 SCJ 625] and another subsequent decision in the case of U.P. Cooperative Cane Unions Federations vs. West U.P. Sugar Mills Association and Others [(2004)5 SCC 430], a three Judge Bench of this 3 Court has referred the matter to a larger Bench proposing the following questions of law to be considered by the larger Bench, preferably of a Bench consisting of seven Judges of this Court: (1) Whether by virtue of Article 246 read with Schedule VII List III Entry 33 of the Constitution the field is occupied by the Central legislation and hence the Central Government has the exclusive power to fix the price of sugarcane? (2) Whether Section 16 or any other provision of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 confers any power upon the State Government to fix the price at which sugarcane can be bought or sold? (3) If the answer to this question is in the affirmative, then whether Section 16 or the said provision of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 is repugnant to Section 3(2)(c) of the Essential Commodities Act, 1955 and Clause 3 of the Sugarcane (Control) Order, 1966 [hereinafter referred to as ª1966 Orderº]? And if so, the provisions of the Central enactments will prevail over the provisions of the State enactment and the State enactment to that extent would be void under Article 254 of the Constitution of India. (4) Whether the SAP fixed by the State Government in exercise of powers under Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 is arbitrary, without any application of mind or rational basis and is therefore, invalid and illegal? 4 (5) Does the State Advised Price (for short ªSAPº) constitute a statutory fixation of price? If so, is it within the legislative competence of the State? (6) Whether the power to fix the price of sugarcane is without any guidelines and suffers from conferment of arbitrary and uncanalised power which is violative of Articles 14 and 19(1)(g) of the Constitution of India? 2. The core issue is whether the State of U.P. has the authority to fix the State Advised Price (SAP) [hereinafter referred to as ªSAPº], which is required to be paid over and above the minimum price fixed by the Central Government? 3. At the outset it is required to be noted that in Tika Ramji case (supra), a Bench of five Judges of this Court held as under: (i) That, section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 [hereinafter referred to as ª1953 U.P. Actº] does not include the power to fix a price; (ii) That, the price of cane fixed by the U.P. Government only mean the price fixed by the appropriate Government which would be the Central Government, under Clause 3 of the Sugarcane (Control) Order, 1955 [hereinafter referred to as ª1955 Orderº]; (iii) That, even the provisions in behalf of the agreement 5 contained in Clauses 3 and 4 of the U.P. Sugarcane (Regulation of Supply and Purchase) Order, 1954 [hereinafter referred to as ª1954 U.P. Orderº] provided that the price was to be the minimum price to be notified by the Government subject to such deduction, if any, as may be notified by the Government from time to time, meaning thereby the Central Government, the State Government not having made any provision in that behalf at any time whatsoever; (iv) That, there is no power to fix a price for sugarcane under the U.P. Sugarcane Act or Rules and the Orders made thereunder; It is to be noted that in Tika Ramji case(supra), this Court did not comment on whether a power which the State Government exercised under Section 16 of the 1953 U.P. Act would be repugnant to the Central legislation, since this Court found no such power exercised by the State Government. 4. However, subsequently, another five Judges Bench of this Court in the case of U.P. Coop. Cane Unions Federations (Supra) has specifically gone into the question of repugnancy and held that the inconsistency or repugnancy will rise if the State Government fixes a price which is lower than that fixed by the Central Government. But, if the price fixed by the State 6 Government is higher than that fixed by the Central Government, there will be no occasion for any inconsistency or repugnancy as it is possible for both the orders to operate simultaneously and to comply with both of them. A higher price fixed by the State Government would automatically comply with the provisions of clause 3(2) of 1966 Order. Therefore, any price fixed by the State Government which is higher than that fixed by the Central Government cannot lead to any kind of repugnancy. In the case of U.P. Coop. Cane Unions Federations (Supra), this Court held that the State Government has power to fix the price which may be higher than the minimum price fixed by the Central Government. This Court in the reference order observed that to the aforesaid extent there is a difference of opinion and/or conflict. 5. We have called upon the learned Counsel appearing on behalf of the respective parties to first address on whether in fact there is any conflict between the decisions of this Court in the case of Tika Ramji (Supra) and U.P. Coop. Cane Unions Federations (Supra) or not and whether there is a need to refer 7 the matter to a larger Bench of seven Judges? 6. Shri Jayant Bhushan, learned Senior Advocate appearing on behalf of the appellants has submitted that this case raises the following important issues. (1) Whether the State Government / Cane Commissioner has any power or authority under the 1953 U.P. Act or the Rules and the Orders made thereunder to fix the sugarcane price? (2) If the State of U.P. had such a power, would such legislation be repugnant to the Central legislation i.e. Essential Commodities Act and the 1966 Order? (3) Whether there is any conflict between the Constitution Bench judgment of this Court in the case of Tika Ramji (Supra) and in the case of U.P. Coop. Cane Unions Federations (Supra)? 6.1 So far as the question No.1 is concerned, it is submitted that the power to regulate the distribution, sale or purchase of cane under Section 16 of the 1953 U.P. Act does not include the power to fix the price. It is submitted that this aspect has been comprehensively dealt with in the case of Tika Ramji (Supra) which analyzed the legislative history of laws relating to sugar and sugarcane both Central and State and came to the specific 8 conclusion that the power reserved to the State Government to fix the minimum price of sugarcane which existed in U.P. Act 1 of 1938 was deleted from the 1953 U.P. Act since that power was being exercised by the Centre under Clause 3 of Sugar and Gur Control Order, 1950. Reliance is placed upon paragraph 34 of decision in the case of Tika Ramji (Supra). 6.1.1 It is submitted that in the aforesaid decision it has specifically been held that the 1953 U.P. Act or the Rules and the Orders made thereunder made no provision for fixation of price of sugarcane whatsoever and therefore, there was no question of repugnancy with the Central law. It is submitted that in the case of U.P. Coop. Cane Unions Federations (Supra), this Court did not quote paragraph 34 and relevant paragraphs of the decision in the case of Tika Ramji (Supra) and erroneously holds that Tika Ramji (Supra) only held that the State did not in fact exercise the power to fix the price. 6.1.2 It is submitted that the argument that Tika Ramji (Supra) only hold that the State Government did not fix the price 9 as this was fixed for the first time in 1973, is totally misplaced.
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