Karnataka High Court
The South Indian Sugar Mills vs Government Of Karnataka on 6 November, 2014
Equivalent citations: AIR 2015 (NOC) 559 (KAR.), 2015 (1) AKR 723
Author: Ashok B.Hinchigeri
Bench: Ashok B. Hinchigeri
1
R
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 06TH DAY OF NOVEMBER, 2014
BEFORE
THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI
WRIT PETITION Nos.54865-54867/2013 (GM-RES)
C/w WRIT PETITION Nos.55958/2013, 8145-8147/2014,
21982/2014 and 26523-26525/2014
W.P.Nos.54865-54867/2013
BETWEEN:
1. The South Indian Sugar Mills
Association (Karnataka),
Farah Building, 1st Floor,
No.136/6, Infantry Road,
Bangalore - 560 001.
Rep. by its Secretary
Shri A.Ramakrishna,
S/o K.Annappa,
Aged about 63 years.
2. M/s. N.S.L.Sugars Ltd.,
Registered office at No.60/1,
2nd Cross, Residency Road,
Bangalore -560 025.
Rep. by its Authorized Signatory
Shri V. Muniyappan,
Aged about 60 years.
3. M/s. Coromandal Sugars Ltd.,
Makavali, K.R.Pet,
Taluk - 571 426.
Rep. by Vice President
Sri C.Pavan Kumar,
Aged about 57 years. ...Petitioners
2
(By Sri Vijayashankar, Sr.Counsel and
Sri Udaya Holla, Sr.Counsel for
Sri H.N.Shashidhara, Advocate for M/s. Kesvy and Co.)
AND:
1. Government of Karnataka,
Vidhana Soudha,
Dr.B.R.Ambedkar Veedhi,
Bangalore - 560 001,
Rep. by its Chief Secretary.
2. The Sugarcane Control Board,
Rep. by its Member Secretary,
Commissioner for Cane Development
And Director of Sugar,
Karnataka Housing Board Building
'F' Complex Annexe, 5th Floor,
CBAB Complex, K.G.Road,
Bangalore - 560 009.
3. The Tungabhadra Sugarcane and
Banana Growers Association,
A Society registered under the
Provisions of the Karnataka Societies
Registration Act (Registration No.
253/2009-10) Old II Ward,
Kamalapur - 583 221,
Taluk Hospet, Dist: Bellary,
Rep. by its President.
4. Sri A.Narayana Singh,
S/o late A. Nagmal Singh,
Aged about 59 years,
Agriculturist, R/at No.10th Ward,
Kamalapur - 583 221,
Taluk Hospet, Dist: Bellary.
5. Sri A.Siddeshwara,
S/o A.Goudappa,
Aged about 51 years,
3
Agriculturist, R/at No.18th Ward,
Kamalapur - 583 221,
Taluk Hospet, Dist: Bellary.
6. Sri C.H.Srinivasa Rao,
S/o late Chinnabasavaiah,
Aged about 47 years,
Agriculturist,
R/at Basava Durga Village,
Nagenahalli Post,
Taluk: Hospet, Dist: Bellary.
7. Sri S.Shoaib,
S/o late S.Khaleelulla,
Aged about 39 years,
Agriculturist, R/at New 3rd Ward,
Kamalapur - 583 221,
Taluk Hospet, Dist: Bellary.
8. Ramappa Shetteppa Rabakani,
S/o Shettappa,
Aged about 54 years,
R/at Boomnal,
Taluk: Raibag,
Belgaum District.
9. Sri Ravindra Shanker Mirje,
Aged about 38 years,
Agriculturist, R/at Kalloi,
Taluk Chikkodi,
Belgaum District.
10. Anil Vittal Patil,
S/o Vittal Patil,
Aged about 46 years,
R/at Chander,
Taluk Chikkodi,
Belgaum District.
11. National Farmers Organization,
CCB-94, Bhandar Galli,
Belgaum -590 002.
4
Rep. by its President,
B.P.Sheri,
S/o Parishappa Sheri,
Aged about 64 years.
12. Sri Subhash,
S/o Basappa Shirabur,
Aged about 54 years,
R/at Post Nagarale,
Taluk Mudhol,
Dist: Bagalkote-587 113.
13. Sidagouda,
S/o Kalagouda Modagi,
Aged about 42 years,
R/at Post Hudli,
Taluk and District Belgaum,
State General Secretary
Bharathik Krishika Samaja.
14. P.Guruswamy,
S/o S. Puttamadappa,
Aged about 52 years,
R/o Boodithittu,
Kollegal Town,
Chamarajanagar Dist - 571 442.
15. A.C.Ravikumar @ Anekere Ravi,
S/o P.Chennagowda,
Aged about 45 years,
R/o Aralabaraguru (Farm House),
Barguru Post, Dandiganahalli Hobli,
Chennarayapatna Taluk,
Hassan District - 573 225. ... Respondents
(By Sri Ravivarma Kumar, Advocate General for
Sri G.Narendra, AGA,
Sri H.V.Manjunatha, AGA for C/R-1 and R-2,
Sri Sajjan Poovayya, Sr. Counsel for
Ms.Nalina Mayegowda, Advocate for R-3 to R-7,
Sri Jayakumar S.Patil Associates for R-8 to R-10,
5
Sri T.P.Sharief, Advocate for
Sri G.Balakrishna Shastry, Advocate for R-11 to R-13,
Sri Ashok Haranahalli, Advocate for R-14 to R-15)
These writ petitions are filed under Articles 226 and 227 of
the Constitution of India praying to quash the proceedings dated
10.11.2013 vide Annexure-A issued by R-2 and notification
dated 23.11.2013 vide Annexure-A1 of the R-2 and etc.
W.P.No.55958/2013
BETWEEN:
Shree Renuka Sugars Ltd.,
A company incorporated under the
Companies Act, 1956 having its
Office at No.7 (Old No.24),
1st Cross, 'Sunanjaya',
1st and 2nd Floor,
Kumarakot Road,
Behind Hotel Janardhan,
Off Race Course Road,
Bangalore - 560 001.
Rep. by Mr.Sanjeev Kulkarni,
Law Officer and Constituted Attorney. ...Petitioner
(By Sri S.S.Javali, Sr.Counsel,
Sri Prabhuling K.Navadagi, Sr.Counsel for
Sri Rajesh D.M., Advocate)
AND:
1. The State of Karnataka,
Rep. by its Member Secretary,
Sugarcane Control Board and
Commissioner for Cane Development
And Director of Sugar,
CBAB Complex, 'F' Block,
5th Floor, Kaveri Bhavan.
Bangalore - 560 009.
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2. Sri Ramappa Shettepa Rabakani,
S/o Shettappa,
Aged about 54 years,
Agriculturist, R/at Boomnal,
Taluk Raibag, Belgaum Dist.
3. Sri Ravindra Shanker Mirje,
S/o Shanker,
Aged 38 years,
Agriculturist, R/at Kallol,
Taluk Chikkodi,
Belgaum Dist.
4. Sri Anil Vittal Patil,
S/o Vittal Patil,
Age 46 years,
R/at Chander, Taluk Chikkodi,
District Belgaum.
(Amended vide Court order, dated 7.3.2014.)
...Respondents
(By Sri Ravivarma Kumar, Advocate General for
Sri G.Narendra, AGA, Sri H.V.Manjunatha, AGA for R-1,
Sri A.Mohammed Tahir, Advocate for R-2 to R-4)
This writ petition is filed under Articles 226 and 227 of the
Constitution of India praying to call for the records and quashing
Government notification dated 23.11.2013 vide Annexure-G.
W.P.Nos.8145-8147/2014
BETWEEN:
1. Siddesh,
S/o Sri Puttaswamy K.V.,
Aged about 49 years,
Kuruburu Village (At Post),
Mugur Hobli,
T.Narasipura Taluk,
Mysore District.
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2. Madappa B.M.,
S/o Sri Madappa,
Aged about 58 years,
Bidarahalli Hundi Village,
Bidarahalli Post, Kandalike Hobli,
H.D.Kote Taluk,
Mysore District.
3. Shivashankara M.S.,
S/o Sri L.T.Subbanna,
Aged about 50 years,
Kittur Village, Bidarahalli Post,
Kandalike Hobli,
H.D.Kote Taluk,
Mysore District. ...Petitioners
(By Sri Yathish J.Nadiga, Advocate)
AND:
1. The State of Karnataka,
Rep. by its Chief Secretary,
Vidhana Soudha,
Bangalore - 560 001.
2. The Sugarcane Control Board,
Rep. by its Member Secretary,
Commissioner for Cane Development
And Director of Sugar,
Karnataka Housing Board Building,
'CBAB' Complex, 'F' Block,
5th Floor, Cavery Bhavan.
Bangalore District,
Bangalore - 560 001.
3. Bannari Amman Sugars Limited,
Rep. by its General Secretary,
Having Factory at Alaganchi Village,
Nanjangud Taluk,
Mysore District - 571 119. ...Respondents
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(By Sri Ravivarma Kumar, Advocate General for
Sri G.Narendra, AGA, Sri H.V.Manjunatha, AGA for R-1,
Sri Jayakumar S.Patil Associates for R-3)
These writ petitions are filed under Articles 226 and 227 of
the Constitution of India praying to quash the notification dated
23.11.2013 passed by the R2 vide Annexure-A and the R2 Board
proceedings/meeting dated 10.11.2013 vide Annexure-B fixing
the price for sugarcane and hereby seeking direction to direct
the R2 to fix the price of the sugarcane afresh considering the
recovery of sugar from sugarcane and income from the by
products of the sugarcane received by the R3.
W.P.No.21982/2014
BETWEEN:
M/s. Core Green Sugar and Fuels
Private Limited,
A Company incorporated under the
Provisions of the Companies Act, 1956,
Having its registered office at
Quinn House, #8-2-268/28/N,
Road No.2, Banjara Hills,
Hyderabad- 500 034.
Andhra Pradesh.
Rep. by its Authorised Signatory
Mr.Vamshi Krishna,
Having its Unit at Tumkur Village,
Tq: Shahpur, Dist: Yadgir. ...Petitioner
(By Sri R.Budhihal, Sr.Counsel for
Sri Prashanth F.Goudar, Advocate)
AND:
1. The Government of Karnataka,
Rep. by the Principal Secretary to Government,
Vikas Soudha, Bangalore - 560 001.
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2. The Government of Karnataka,
Rep. by the Secretary to Government,
Commerce and Industries Department,
Vikas Soudha, Bangalore - 560 001.
3. The Commissioner for Cane Development
And Director of Sugar,
Government of Karnataka,
K.H.B.Building, 'F' Complex Annexe,
CBAB Building Complex,
K.G.Road, Bangalore - 560 009.
4. The Sugarcane Control Board,
Rep. by its Member Secretary,
Commissioner for Cane Development
And Director of Sugar in Karnataka,
K.H.B. Building, 'F' Complex Annexe,
CBAB Building Complex, K.G.Road,
Bangalore - 560 009.
5. The Deputy Commissioner,
Office of the D.C.,
Yadgir District,
Yadgir - 585 101. ...Respondents
(By Sri Ravivarma Kumar, Advocate General for
Sri G.Narendra, AGA and
Sri H.V.Manjunatha, AGA for C/R-3 and R-5
This writ petition is filed under Articles 226 and 227 of the
Constitution of India praying to hold and declare that "The
Karnataka Act 33 of 2013 i.e., the Karnataka Sugarcane
(Regulation of Purchase and Supply) Act, 2013, first published in
the Karnataka Gazette extraordinary on 12.3.2013 vide
Annexure-J is ultra vires the constitution and is void.
10
W.P.Nos.26523-26525/2014
BETWEEN:
1. M/s. Sri Chamundeshwari Sugars Ltd.,
No.88/5, Richmond Road,
Bangalore-560 025.
Rep. by its President
Sri N.Nachiappan,
S/o Ramaswamy,
Aged about 67 years.
2. M/s Shamanur Sugars Limited,
Regd. Office No.374, 4th Main,
P.J.Extension, Davanagere-577 002.
Rep. by its Liason Officer
Sri H.C.Venkatesh,
Aged about 55 years.
3. The India Sugars & Refineries Ltd.,
Having its Branch office at
Midford House, Midford Garden,
Off M.G.Road, Bangalore - 560 001.
Rep. by its Manager Finance
Sri P.S.Krishnamurthy,
S/o late P.K.Soundarajan,
Aged about 54 years. ...Petitioners
(By Sri S.Vijayashankar, Sr.Counsel and
Sri Udaya Holla, Sr.Counsel for
Sri H.N.Shasidhara, Advocate for M/s. Kesvy and Co.)
AND:
1. The Government of Karnataka,
Vidhana Soudha,
Dr.B.R.Ambedkar Veedhi,
Bangalore - 560 001.
Rep. by its Chief Secretary,
11
2. The Sugarcane Control Board,
Government of Karnataka,
Rep. by its Member Secretary,
Commissioner for Cane Development
And Director of Sugar,
Karnataka Housing Board Building,
'F' Complex Annexe, 5th Floor,
CBAB Complex, K.G.Road,
Bangalore - 560 009. ...Respondents
(By Sri Ravivarma Kumar, Advocate General for
Sri G.Narendra, AGA and
Sri H.V.Manjunatha, AGA for R-1 and R-2)
These writ petitions are filed under Articles 226 and 227 of
the Constitution of India praying to declare that the Karnataka
Sugarcane (Regulation of Purchase and Supply) Act, 2013, vide
Annexure-A to the writ petition is void unconstitutional.
These writ petitions having been heard and reserved for
orders on 11.07.2014 at the Principal Bench, Bangalore, coming
on for pronouncement this day before the Dharwad Bench, the
Court made the following:
ORDER
W.P.Nos.54865-54867/2013 are filed by an association of private sugar manufacturing companies and by two sugar mills challenging the notification, dated 23.11.2013 fixing the sugarcane price at `2,500/- per metric ton on ex-gate basis in South Karnataka and on ex-field basis in North Karnataka. W.P.No.55958/2013 is filed by another sugar manufacturer raising the challenge to the very same notification. 12 W.P.Nos.8145-8147/2014 are filed by the sugarcane growing farmers assailing the very same notification and demanding that the sugarcane price be fixed taking into account the recovery of sugar from sugarcane and the income from the by-products of sugarcane. W.P.No.21982/2014 is filed by a sugar manufacturer challenging the validity of the Karnataka Sugarcane (Regulation of Purchase and Supply) Act, 2013, ['2013 Act' for short] and also the notification, dated 23.11.2013 and the consequential show cause notice, dated 12.5.2014 demanding the payment of amounts towards the purchase of sugarcane and in default thereof to face prosecution. W.P.Nos.26523-26525/2014 are also filed by the sugar manufacturers seeking the relief of declaration that the 2013 Act is void and unconstitutional and for quashing the proceedings, dated 10.11.2013 of the Sugarcane Control Board and the notification, dated 23.11.2013.
2. Sri S.S.Javali, the learned Senior Counsel appearing for M/s. Rajesh and Rajesh for the petitioner in W.P.No.55958/2013 submits that under Section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as 'EC Act' for short), the Central Government has made Sugarcane (Control) Order, 1966. The 13 said Order provides for the fixation of fair and remunerative price ('FRP' for short). While fixing the FRP, scientific methodology is followed. He submits that the Central Government has declared the FRP of sugarcane for 2013-14 sugar season at `210/- per quintal linked to a basic recovery rate of 9.5% subject to a premium of `2.21/- per quintal for every 0.1% point increase in recovery above that level.
3. The learned Senior Counsel submits that the producers of sugar are required in law to pay to the farmers the Central Government declared FRP. The sugar producers cannot be compelled to pay the price fixed by the State Government, as there is no delegation of power to the State Government under Clause 11 of the Sugarcane (Control) Order, 1966.
4. The learned Senior Counsel submits that any order made under Section 3 of the E.C. Act has primacy over the other enactments or any instrument, which has come into force by virtue of the other enactments. In this regard, he brings to my notice the provisions contained in Section 6 of the E.C. Act. They read as follows:-
14
"6. Effect of orders inconsistent with other enactments:- Any order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act."
5. He relies on the Division Bench's judgment of this Court in the case of VASAVI TRADERS v. STATE OF KARNATAKA AND OTHERS reported in 1982 (2) Kar.L.J. 357, wherein it is held that in view of the provisions of the Sugarcane (Control) Order, 1966 made under the E.C. Act, it is impermissible for the State legislature to regulate the marketing of the sugarcane. The Sugarcane (Control) Order regulates every aspect of marketing of the sugarcane and its provisions are irreconcilable with the provisions relating to the marketing under the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966.
6. He also relies on this Court's decision in the case of SOUTH INDIAN SUGAR MILLS ASSOCIATION (KARNATAKA) AND ANOTHER v. THE UNION OF INDIA, MINISTRY OF CONSUMER AFFAIRS AND OTHERS reported in ILR 2009 KAR 2216 for advancing the submission that the 15 State Government has no power to fix the sugarcane price, as it is beyond its legislative competence; and it is only the Central Government, which has the jurisdiction or power to fix the price of the sugarcane. He read out paragraph Nos.14, 15 and 20 of the said decision, which are as follows:
"14. The aforesaid reasoning clearly indicates that the entire field of regulation of purchase and sale of Sugarcane and fixing of the price of the Sugarcane, if it so purchased or sold is occupied by the Sugarcane Control Order. This reasoning of the Division Bench was affirmed in the case of ITC LIMITED AND OTHERS v. STATE OF KARNATAKA AND OTHERS. The said judgment has attained finality with the seal of the Apex Court.
15. This legal position is re-affirmed by the Apex Court in Constitution Bench judgment in the case of BELSUND SUGAR COMPANY LIMITED v. STATE OF BIHAR AND OTHERS.
20. Therefore, it is clear that the State Government has no power in the first instance to pass any legislation or to pass any order under Article 162 of the Constitution, in the absence of any such law, fixing the minimum price of sugarcane contrary to the minimum price fixed by the Central Government under Sugarcane (Control) Order. As held by the Division Bench of this Court, the entire area is covered by a Central law and therefore, the State Government has no power to pass an order fixing the minimum price for sugarcane. The minimum price fixed 16 by the Central Government under the aforesaid Order. When the minimum price fixed by the State collide with the minimum price fixed by the Central Government it is the minimum price fixed by the Central Government which would prevail and to that extent the minimum price fixed by the State Government has to yield. This is the Constitutional position."
7. The learned Senior Counsel would rely on the aforementioned decision in support of his argument that unless the State Government makes the law by obtaining the consent of the President or under the delegation of power by the Central Government under Clause 11 of the Sugarcane (Control) Order, the State Government does not get the power to fix the minimum price for sugarcane in Karnataka. He submits that the said order of the learned Single Judge is also upheld by the Division Bench in the appeal filed by the State Government against the South Indian Sugar Mills Association (reported in ILR 2012 KAR 4631).
8. The learned Senior Counsel has also relied on the Division Bench's decision of this Court in the case of TUNGABHADRA SUGARCANE AND BANANA GROWERS ASSOCIATION v. GOVERNMENT OF KARNATAKA reported in 17 ILR 2012 KAR 6380, wherein it is held that the minimum price of sugarcane, which is now substituted with the F.R.P., is to be prescribed by the Central Government by notification in the official gazette from time to time. Parties by agreement cannot reduce this price. However, there is no prohibition in law for the parties to enter into an agreement fixing the price of sugarcane on and above the price fixed by the Central Government.
9. The learned Senior Counsel submits that the regulation of the sugarcane price falls within the ambit of Entry No.33 (b) of List III - Concurrent List in Seventh Schedule to the Constitution of India. The provisions contained therein read as follows:
33. Trade and commerce in, and the production, supply and distribution of,-
(a) xxxxxxxxxx
(b) foodstuffs, including edible oilseeds and oils."
10. He submits that in view of the Central legislation and the Order made thereunder, the State Government is denuded of the power to fix the sugarcane control price. 18
11. The learned Senior Counsel read out the report of Dr.C. Rangarajan Committee, which contains the ways of rationalizing the price of sugarcane and of devising the scientific formula for ensuring a fair sharing of the value created in the cane-sugar value chain between the farmers and the producers of sugar.
12. He submits that the Sugarcane Control Board, as constituted under Section 3 of the 2013 Act has no expert for determining the price of sugarcane. He further submits that Section 4 of the said Act gives no formula for the price-fixation. It does not prescribe any factors for arriving at the price. It does not prescribe any year with reference to which the price fixation has to take place. It is not a self-contained Act. He submits that the word 'actual' used in Section 4(f) of the said Act indicates that the price has to be determined on the basis of the price, which has actually prevailed over.
13. He submits that the Government has arbitrarily divided the State into two zones - North Karnataka and South Karnataka for fixing two different prices for two zones. The prices have to vary from factory to factory depending on the recovery 19 percentage in the sugarcane in a particular area. He submits that the fixing of the price of sugarcane for North Karnataka at `2,500/- per metric ton on ex-field basis has further financial implications. It means that the sugar factories have to give `325/- more per metric ton towards harvesting and transporting charges. In effect, if the sugar factories are compelled to pay `2,825/- (`2,500 fixed by the Government + `325/- transporting and harvesting charges), it imposes heavy burden on them. He read out paragraph No.18 from the petitioner's reply to the affidavit filed by the respondents. It reads as follows:
"18...............In respect of the same, the distinction made by the Respondent is irrational considering that sugar factory in South-Karnataka with a recovery of 10.14% pays Rs.2500/- ex-gate and whereas a sugar factory with recovery of 9.46% in North Karnataka end up paying Rs.2500/- ex-filed in addition to Rs.500/- paid towards H&T, totaling to Rs.3,000/-. This irrational calculation done by the Respondent is in direct conflict with the Sugarcane Control Order which stipulates the calculation of 'price' on ex-gate basis. Therefore taking into such consideration is disadvantageous to the interest of the petitioner who operates only in North Karnataka."
14. He submits that the provisions of the 2013 Act are ambiguous, uncertain and lacking in guidance. Adherences to 20 both the Sugarcane (Control Order), 1966 and to the 2013 Act would mean the duality of payments for the producers of the sugarcane. The price determination as prescribed under the 2013 Act suffers from unreasonableness.
15. For advancing the contention that the courts can undertake judicial review in matters of price fixation, he relies on the Division Bench decision of this Court in the case of ISHAAN LABS PVT. LTD. AND ANOTHER v. UNION OF INDIA AND ANOTHER reported in 2013 (2) AKR 664. Paragraph No.16 of the said decision, relied upon by him, read as follows:
"16. A perusal of these judgments would clearly laid down the contours with regard to the judicial review in the matters of price fixation is permissible, which is essentially a legislative act and yet again it should satisfy the test of reasonableness, by keeping in mind the purpose to be achieved while exercising such power. In order to examine as to whether such power is exercised in accordance within the parameters or guidelines laid down thereunder, the Courts would undertake judicial review of such administrative Act. Thus, the Courts would examine the reasonableness in the action by going into the decision making process and not the decision itself. All that the Courts would do is to examine as to whether the repository of the power is exercised in a reasonable manner and thereby avoiding arbitrariness to surface. 21 Nevertheless such fixation being a policy matter which would be in the domain of the executive, minor infraction in exercise of such power would ipso facto does not give rise for a cause of action to challenge the said action so as to invite judicial scrutiny. However, it does not mean that the Government can fix the price by exercising arbitrary power, taking into consideration irrelevant material or not considering relevant factors essential for such fixation and thereby fixing the price which may be found to be contrary to the norms and guidelines fixed in this regard. Thus, burden is cast heavily on the person who approaches the Court to satisfy the Court with relevant material demonstrating that such price fixation is based on either irrelevant factors or has been fixed ignoring the relevant factors which ought to have been taken into consideration. This would form the foundation for invoking jurisdiction of this Court. Thus, when such grievance is brought before the Court, it is always open for judicial review or scrutiny to ascertain and examine as to whether the mode adopted by such authority is in consonance with prescribed norms and it is reasonable or otherwise and whether it has acted in ultra vires of its powers."
16. Sri S.Vijayashankar, the learned Senior Counsel appearing for Sri H.N.Shashidhara for the petitioners in W.P.Nos.54865-54867/2013 and W.P.Nos.26523-26525/2014 submits that under Article 254 of the Constitution of India, the law made by Parliament shall prevail over the law made by the 22 legislature of the State in respect of subjects enumerated in List III of the Seventh Schedule to the Constitution of India. An exception is carved out in clause (2) of Article 254 of the Constitution whereby the law made by the State Legislature prevails, if the Presidential assent is obtained. As there is repugnancy between the 2013 Act and the Sugarcane (Control) Order, 1966, the provisions of the latter shall prevail over those of the former. The State Government has no competence to fix the sugarcane price over and above the FRP fixed by the Government of India.
17. In support of his submissions, he has relied on the Apex Court's judgment in the case of M.P.AIT PERMIT OWNERS ASSOCIATION AND ANOTHER v. STATE OF M.P. reported in (2004) 1 SCC 320. Paragraph Nos.11 and 14 of the said decision relied upon by the learned Senior Counsel read as follows:
"11. It is clear that confiscation would arise only in the event an offence is committed under Section 66 read with Section 192-A of the MV Act and, therefore, such provision could not have been enacted without the assent of the President as the same directly impinges upon Article 254 of the Constitution. Under Article 254 of the 23 Constitution, the law made by Parliament will prevail in respect of subjects covered under List III of the Seventh Schedule to the Constitution. An exception is carved out in clause (2) of Article 254 of the Constitution whereby the law made by the State Legislature will prevail if the Presidential assent is received. But before this clause can be invoked there must be a repugnancy between the State Act and an earlier Act made by Parliament. In effect, the scheme is that Article 254(2) gives power to the State Legislature to enact a law with assent of the President, on any subject covered under List III of the Seventh Schedule to the Constitution, even though the Central Act may be inconsistent in operating in that State relating to that subject.
14. In the case on hand the prescription of punishment is for the same offence arising under Section 66 read with Section 192-A of the MV Act and further punishment is prescribed under the State MV Taxation Act for forfeiture of the vehicle. Thus, there is clear conflict between the two enactments. Therefore, we hold that the provision of Section 16(6) of the Act and the consequential provisions thereto are repugnant to Section 66 read with Section 192-A of the MV Act and hence, invalid as the State law has not complied with the requirements under Article 254(2) of the Constitution of obtaining assent of the President to the State Law."
18. He submits that under Section 3(2)(c) of the E.C. Act, the Order may be made for controlling the price, at which the 24 essential commodity may be bought or sold. He submits that a person contravening such an Order is liable to be punished as per Section 7 of the said Act.
19. The learned Senior Counsel brings to my notice the order of the Apex Court in the case of WEST UTTAR PRADESH SUGAR MILLS ASSOCIATION AND OTHERS v. STATE OF UTTAR PRADESH AND OTHERS and other connected matters reported in (2012) 2 SCC 773, in which the issues of whether the Central Government under the E.C. Act has the exclusive power to fix the price of sugarcane and five other incidental matters are placed before the larger Bench of seven Judges of the Hon'ble Supreme Court. Until such time the issues raised for consideration of the larger Bench of Supreme Court are conclusively answered, the State Government cannot fix the higher sugarcane price and demand the payment from the producers of sugar. Further, the State Government cannot have anybody punished invoking Section 10 of its Act.
20. Sri Udaya Holla, the learned Senior Counsel appearing for the petitioners in W.P.Nos.54865-54867/2013 and W.P.Nos.26523-26525/2014 submits that because of the 25 fluctuating prices, sugar sometime tastes sweet and sometimes bitter. He brings to my notice item No.27 in List II and item No.33 in List III of Seventh Schedule to the Constitution of India, which read as follows:
"Item No.27 in list II: Production, supply and distribution of goods subject to the provisions of entry 33 of List III.
Item No.33 in list III: Trade and commerce in, and the production, supply and distribution of, -
(a) .........
(b) foodstuffs, including edible oilseeds and oils;
(c) .........
(d) ......
(e) ........"
21. The learned Senior Counsel submits that the afore- extracted entries reveal that legislating power on item No.27 of List II is subject to the provisions of entry No.33 of List III. He submits that the sugarcane is a foodstuff. He submits that item No.3 in the Schedule to E.C. Act itself is taken from Entry No.33 of List III, because item No.3 in the schedule of essential commodities also reads as "foodstuffs including edible oilseeds and oil."
26
22. He submits that the State Government has no power to fix the price of sugarcane in view of the Sugarcane (Control) Order. In support of his submission, he relies on the Apex Court's judgment in the case of Ch. TIKA RAMJI AND OTHERS v. THE STATE OF UTTAR PRADESH AND OTHERS reported in AIR 1956 SC 676. The portions of the said decision read out by him are as follows:
"(23). ..........................
When Entry 33 of List 3 was amended by the Constitution Third Amendment Act, 1954, foodstuffs including edible oilseeds and oils were included therein and both Parliament and the State Legislatures acquired concurrent jurisdiction to legislate over sugar and sugarcane. Trade and commerce in, and production, supply and distribution of, sugar and sugarcane thus could be dealt with by Parliament as well as by the State Legislatures and it was in exercise of this jurisdiction that Parliament enacted Act 10 of 1955.
(24) It is clear, therefore, that all the Acts and the notifications issued thereunder by the Centre in regard to sugar and sugarcane were enacted in exercise of the concurrent jurisdiction. The exercise of such concurrent jurisdiction would not deprive the Provincial Legislatures of similar powers which they had under the Provincial Legislative List and there would, therefore, be no question of legislative incompetence qua the Provincial Legislatures 27 in regard to similar pieces of legislation enacted by the latter.
(25)................The power of licensing new industrial undertakings was thereafter exercised by the Centre under Act 65 of 1951 as amended by Act 26 of 1953, vide Ss.11 (a), 12 and 13, and the power of fixation of price of sugar was exercised by the Centre under S.3 of Act 24 of 1946 by issuing the Sugar Control Order, 1950. Even the power reserved to the State Government to fix minimum prices of sugarcane under Chap. 5 of U.P. Act 1 of 1938 was deleted from the impugned Act the same being exercised by the Centre under cl.3 of Sugar and Gur Control Order, 1950, issued by it in exercise of the powers conferred under S.3 of Act 24 of 1946.
The prices fixed by the Centre were adopted by the State Government and the only thing which the State Government required under R.94 was that the occupier of a factory or the purchasing agent should cause to be put up at each purchasing centre a notice showing the minimum price of cane fixed by the Government meaning thereby the Centre. The State Government also incorporated these prices which were notified by the Centre from time to time in the forms of the agreements which were to be entered between the cane growers, the cane growers co-operative societies, the factories and their purchasing agents for the supply and purchase of sugarcane as provided in the U.P. Sugarcane Supply and Purchase Order, 1954.
28
If that was so, there was no question whatever of its trenching upon the jurisdiction of the Centre in regard to the sugar industry which was a controlled industry within Entry 52 of List 1 and the U.P. Legislature had jurisdiction to enact the law with regard to sugarcane and had legislative competence to enact the impugned Act. (35). Section 3(2)(b) empowered the Central Government to provide inter alia for bringing under cultivation any waste or arable land whether appurtenant to a building or not for growing thereon of foodcrops generally or specified foodcrops and S.3(2)(c) gave the Central Government power for controlling the price at which any essential commodity may be bought or sold. These provisions would certainly bring within the scope of Central legislation the regulation of the production of sugarcane as also the controlling of the price at which sugarcane may be bought or sold, and in addition to the Sugar Control Order, 1955 which was issued by the Central Government on 27-8-1955, it also issued the Sugarcane Control Order, 1955, on the same date investing it with the power to fix the price of sugarcane and direct payment thereof as also the power to regulate the movement of sugarcane.
23. Relying on the Apex Court's judgment in the case of T.BARAI v. HENRY AH HOE AND ANOTHER reported in (1983) 1 SCC 177 he submits that if the State law and the Union law prescribe different punishments for the same offence, 29 it means that two laws possibly cannot stand together. Repugnancy arises in such a situation.
24. The learned Senior Counsel submits that the word 'actual' employed in Section 4(f) of the 2013 Act is determinative factor of the legislative intent. Referring to the Concise Oxford Dictionary, he submits that 'actual' means real, present and current. He submits that it is a well-settled principle in law that the Court cannot read anything into a statutory provision, which is plain and unambiguous. A statute is an edict of the legislature. The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself. In this regard, he draws support from the Apex Court's judgment in the case of UNIQUE BUTYLE TUBE INDUSTRIES (P) LTD. v. U.P. FINANCIAL CORPORATION AND OTHERS reported in (2003) 2 SCC 455 and SHARMA TRANSPORTS v. STATE OF MAHARASHTRA AND OTHERS reported in (2011) 8 SCC 647.
25. The fixation of the sugarcane price has to be with reference to the sugar price prevailing at present and not the one which was prevailing in the previous or preceding year. Nor 30 can the sugarcane price be fixed based on the probable or notional revenue.
26. The learned Senior Counsel brings to my notice the admission made by the Sugar Minister in the meeting held on 19.12.2013 that the fixation of the price is as per the price prevailing in the preceding six months and that in future the price fixation would be based on actuals. That portion of the proceedings read out by him is as follows:
"ªÀiÁ£Àå ¸ÀºÀPÁgÀ ¸ÀaªÀgÀÄ ªÀiÁvÀ£Ár, gÉÊvÀ gÀ ªÀÄvÀÄÛ PÁSÁð£ÉUÀ¼À »vÀªÀ£ÀÄß UÀªÀÄ£ÀzÀ°l è ÄÖPÉÆ AqÀÄ PÀ©â£À zÀgÀªÀ£ÀÄß ¤UÀ¢ªÀiÁqÀ¯ÁVzÀÄÝ EzÀPÉÌ PÁSÁð£ÉUÀ¼Ài ¸ÀºÀPÀj¸À¨ÉÃPÉAzÀÄ PÉÆ ÃjzÀgÀÄ. gÁdåzÀ°è ¥ÀæxÀªÀÄ ¨ÁjUÉ PÀ£ÁðlPÀ PÀ§Äâ (Rjâ ªÀÄvÀÄÛ ¤AiÀÄAvÀæt) C¢ü¤AiÀĪÀÄ 2013 C£ÀÄß eÁjUÉ vÀgÀ¯ÁVzÉ. F C¢ü¤AiÀĪÀÄzÀAvÉ ¸À«Äw gÀZÀ£É ªÀiÁqÀĪÀ ªÉüÉUÉ 2013-14 £Éà ¸Á°£À PÀ§Äâ £ÀÄj¸ÀĪÀ ºÀAUÁªÀÄÄ ¥ÁægÀA¨sÀªÁVzÀÄÝ PÀ¼ÉzÀ 6 wAUÀ½£À°è ªÀiÁgÁlªÁzÀ ¸ÀPÀÌgÉ, PÁPÀA©, PÀ©â£À ¹¥Éà ªÀÄvÀÄÛ ¥Éæ¸ï-ªÀÄqïUÀ¼À ªÀiË®åzÀ ¸ÀgÁ¸Àj ¨É¯ÉAiÀÄ£ÀÄß DzsÀj¹ PÀ§Äâ zÀgÀ ¤UÀ¢ ªÀiÁqÀ¯ÁVzÀÄÝ, ªÀÄÄA¢£À ªÀµÀðUÀ¼À°è ¤RgÀªÁzÀ ªÀiÁgÁlzÀ ¨É¯ÉAiÀÄ£ÀÄß DzsÀj¹ PÁSÁð£ÉUÉ §gÀĪÀ DzÁAiÀÄzÀ°è ±ÉÃ.70B30gÀ ¥ÀæªÀiÁtzÀ°è PÀ§Ä⠨ɼÉUÁgÀjUÉ ªÀÄvÀÄÛ ¸ÀPÀÌgÉ PÁSÁð£ÉUÀ½ UÉ ºÀAaPÉ ªÀiÁqÀ®Ä PÀæªÀĪÀÀ»¸À¯ÁUÀĪÀÅzÉAzÀÄ w½¹zÀgÀÄ."31
27. The learned Senior Counsel takes serious exception to the presence of outsiders in the meetings of the Sugarcane Control Board. He submits that the Sugarcane Control Board is constituted as per the provisions contained in Section 3 of the 2013 Act. He brings to my notice the proceedings of the meeting of the Sugarcane Control Board held on 10.11.2013. Apart from the members of the said Board, the Small Scale Industries Minister, Co-operative Minister and special invitees were present. Their presence has vitiated the decision-making process. He submits that the Sugarcane Control Board is a quasi-judicial body. Its very taking of the decision in the presence of and under the pressure of outsiders is unsustainable. He submits that some of the outsiders have given their consent to the passing of the resolution. The relevant portion of the proceedings read out by him is as follows:
"«±ÉõÀ DºÁé¤vÀgÀ ¥ÉÊQ ²æà PÀÄgÀħÆgÀÄ ±ÁAvÀPÀĪÀiÁgï ºÁUÀÆ ²æà ¸ÀĨsÁµï ²gÀ§ÆgÀÄ CªÀgÀ£ÀÄß ºÉÇ gÀvÀÄ¥Àr¹ G½zÉ®è DºÁâ¤vÀ ¸ÀzÀ¸ÀågÀÄ ªÉÄð£À ¤tðAiÀÄUÀ½UÉ vÀªÀÄä ¸ÀªÀÄäwAiÀÄ£ÀÄß ªÀåPÀÛ¥Àr¹zÀgÀÄ."32
28. He also brings to my notice the Hon'ble Supreme Court's decision in the case of THE PURTABPORE CO., LTD. v. CANE COMMISSIONER OF BIHAR AND OTHERS reported in 1969 (1) SCC 308, wherein the orders passed by the Cane Commissioner were quashed on finding that they were in fact made by the Chief Minister.
29. He has relied on the Apex Court's judgment in the case of INDIAN NATIONAL CONGRESS (I) v. INSTITUTE OF SOCIAL WELFARE AND OTHERS reported in (2002) 5 SCC
685. Paragraph Nos.24 and 25 of the said decision read out by him are as follows:
"24. The legal principles laying down when an act of a statutory authority would be a quasi-judicial act, which emerge from the aforestated decisions are these:
Where (a) a statutory authority empowered under a statute to do any act (b) which would prejudicially affect the subject (c) although there is no lis or two contending parties and the contest is between the authority and the subject and (d) the statutory authority is required to act judicially under the statute, the decision of the said authority is quasi-judicial.33
25. Applying the aforesaid principle, we are of the view that the presence of a lis or contest between the contending parties before a statutory authority, in the absence of any other attributes of a quasi-judicial authority is sufficient to hold that such a statutory authority is quasi-judicial authority. However, in the absence of a lis before a statutory authority, the authority would be quasi-judicial authority if it is required to act judicially."
30. Relying on the Apex Court's judgment in the case of STATE OF KERALA AND OTHERS v. MAR APPRAEM KURI COMPANY LIMITED AND ANOTHER reported in (2012) 7 SCC 106, Sri Uday Holla submits that there are two ways in which the repugnancy between Parliamentary legislation and State legislation arises. First type of repugnancy arises where the legislation, though enacted with respect to matters in their allotted spheres overlap and conflict. Second type of repugnancy arises where the two legislations are with respect to matters in Concurrent List and there is a conflict.
31. Sri R.Budhihal, the learned counsel for the petitioner in W.P.No.21982/2014 submits that the Sugarcane (Control) Order, 1966 having been promulgated under the provisions of E.C. Act passed by the Central Government, the field relating to the 34 buying and selling of sugarcane is occupied by the Central legislation in terms of and by virtue of the Article 246 read with Entry 33 of List III to the Seventh Schedule of the Constitution of India. Hence, it is the Central Government, which has the exclusive power to fix the price of sugarcane.
32. The learned counsel submits that as the provisions of law in pari matertia with Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 are not found in the impugned State enactment, no reliance can be placed on the Supreme Court judgments and its order referring the matter to the larger Bench. He submits that mere directions issued by the Hon'ble Supreme Court without laying down any principle of law cannot be treated as a precedent, as such directions contain no ratio decidendi. Such directions are issued in exercise of the power under Article 142 of the Constitution of India to do complete justice in a given fact situation. Such decisions are not binding on the High Courts. Making out a subtle distinction between the doctrine of repugnancy and doctrine of occupied field, the learned counsel submits that the State legislature is denuded of the legislative competence as soon as the Central legislation is made in respect of those legislative entries of the 35 State List, which are expressly made 'subject' to a corresponding entry either in the Union List or in the Concurrent List.
33. In support of his submissions, he relied on the following decisions:
(i) AIR 1964 SC 1284 - State of Orissa and another v. M/s. M.A.Tulloch and Co.
(ii) (2004) 4 SCC 513 - State of T.N. and another v.
S.V.Bratheep (Minor) and others.
(iii) (1982) 2 KLJ 357 - Vasavi Traders v. State of Karnataka and others .
(v) ILR 2009 KAR 2216 - South Indian Sugar Mills Association (Karnataka) and another v. The Union of India, Ministry of Consumer Affairs and others .
(vi) ILR 2012 KAR 4631 - The State of Karnataka, by its Secretary to Government, Department of Commerce and Industries and another v. South Indian Sugar Mills Association (Karnataka), by its Secretary and others.
34. He submits that it has been the stand of the State Government that it does not have the competence or power to fix the sugarcane price. In this regard, he read out the submissions made on behalf of the State Government in W.A.No.3956/2009:
36
"He (the learned Government Advocate) fairly submits that as per the provisions of the Sugarcane Control Order, the Government has no right to fix the sugar minimum price."
35. He submits that where the conflict is between two decisions, both pronounced by the Bench consisting of the same number of Judges, the sub-ordinate Court will be at liberty to follow that decision, which seems to be more correct, whether such decision be later or earlier. In support of his submission, he relies on the Full Bench decision of Madras High Court in the case of R.RAMA SUBBARAYALU REDDIAR v. RENGAMMAL reported in AIR 1962 Madras 450.
36. Relying on the Full Bench decision of this Court in the case of GOVINDANAIK G. KALAGHATIGI v. WEST PATENT PRESS CO. LTD. AND ANOTHER reported in AIR 1980 KAR 92, the learned counsel contends that two Judges of the said Full Bench have taken the view that if the High Court is confronted with two decisions of the Supreme Court by Benches consisting of equal number of Judges, the High Court would be well-advised to follow that which is better in point of law than in point of time. 37
37. He submits that the subordinate courts would be embarrassed to prefer one view to another, if they are confronted with two conflicting decisions passed by the two Benches of the same strength. For making this submission, he relies on the Apex Court's judgment in the case of ATMA RAM AND OTHERS v. STATE OF PUNJAB AND OTHERS reported in AIR 1959 SC 519.
38. W.P.Nos.8145-8147/2014 are filed by the agriculturists. Sri Yathish J.Nadiga, the learned counsel appearing for the said petitioners submits that the sugarcane growing farmers have no option of selecting the sugar factory. They have to supply the sugarcane to the specified sugar factories. He submits that the sugar factories would never give permission on time to cut and supply the sugarcane. Because of the delay in giving such a permission, there would be decline in the recovery percentage of the sugar from the sugarcane. This puts the sugarcane growing farmers to losses.
39. He submits that the price of the sugarcane has to be fixed separately for each factory. He submits that the cost of cultivating the sugarcane has not been considered by the 38 Sugarcane Control Board. He submits that the recovery rate is above 10% in respect of the sugarcane supplied to the respondent Bannari Amman Sugars Limited.
40. The learned counsel submits that while fixing the sugar price, the authorities have to take into account the cost of production of sugarcane and reasonable margins for the growers of the sugarcane on account of risk and profits as per the provisions contained in clause 3(1)(a) and (g) of the Sugarcane (Control) Order. He submits that the State Government has to arrange for supply of subsidized fertilizers and for interest free loans to alleviate the sufferings of the farmers.
41. Prof.Ravivarma Kumar, the learned Advocate General submits that the sugarcane falls under Entry Nos.14 and 27 of List II - State List. They read as follows:
"14. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases.
27. Production, supply and distribution of goods subject to the provisions of entry 33 in list III."
42. The learned Advocate General submits that the word 'agriculture' occurring in Entry No.14 should receive a wider 39 meaning so as to include sugarcane. Sugarcane being an agricultural produce is a State subject. Therefore, the State Government has the legislative competence to enact the 2013 Act and to fix the sugarcane price as provided under the said Act.
43. Relying on the Apex Court's judgment in the case of B.BANERJEE v. SMT. ANITA PAN reported in (1975) 1 SCC 166, he submits that the law is a social science and constitutionality turns not on abstract principles or rigid legal canons but on concrete realities and given conditions. Judicial conscience is not a mere matter of citations of precedents but of activist appraisal of social tears to wipe out which the State is obliged under the Constitution.
44. Relying on the Division Bench decision of the High Court of Judicature at Allahabad, Lucknow Bench in the case of MODI INDUSTRIES LTD., v. STATE OF U.P. in W.P.Nos.11435 and 11436/2011 disposed of on 10.02.2012, he submits that the sugar as a finished product falls within Entry 33 of List III but the sugarcane being an agricultural produce is covered under Entry 40 14 of the List-II. The relevant paragraphs of the said decision are extracted hereinbelow:
48. By using the word, 'agriculture' in the State List, the Constitutional framers have given wide power to State Legislature to deal with agriculture which seems to be comprehensive in nature. Exclusive power under List II has been conferred on the State to legislate law which includes all agriculture produce including sugarcane. In West U.P. Sugar Mills Association (supra), the Constitutional Bench of Hon'ble Supreme Court has discussed the issue and held that the sugarcane is a product of agriculture grown in the field like other agricultural crop.
51. It may be noted that under Entry 33 of List III, both the State legislature and Parliament may legislate law subject to repugnance test. But under Entry 14 of List II, only the State legislature has power to legislate law.
"Sugar" being the industrial product shall be covered by Entry 33 of List III. But sugar being not an agriculture produce, State lacks legislative competence to exercise power under Entry 14 of List II. Hence, the Union of India while exercising power under Entry 33 of List III may in appropriate case claim exclusive right to control sugar price.
69. Keeping in view the aforesaid broader principle with regard to repugnancy, argument advanced by the petitioner's counsel with regard to legislative competence of the State seems to be not sustainable. Entries 14 and 41 27 of List II of Seventh Schedule with regard to agriculture should be given wider meaning. The cane being agriculture produce, shall be covered under Entry 14 of List II and being a State subject, the State has got legislative competence to fix cane price.
70. However, price control under Entries 33 and 34 being falling under Concurrent List (List III of Seventh Schedule) and keeping in view the fact that FRP has been fixed by Union of India, State while fixing SAP cannot fix lower price than what has been fixed by the Union of India under Entry 33 read with Entry 34. Moreover, as submitted by learned Addl. Solicitor General, FRP being a "floor price" keeping in view the facts and circumstances of the cane growers and sugar mills and sugar price of the entire country and also being a well fair legislation, though the State is ligislatively competent to fix cane price but it shall not be lesser than the FRP which, according to learned Addl. Solicitor General of India is 'floor price' for the entire country. Otherwise also, being well fair legislation and keeping in view the ground reality of the State, the State Government has got right to fix SAP but not lower that what has been fixed by the FRP by the Government of India.
To sum up, under Entry 14 and 27 of List II of the Seventh Schedule. State has legislative competence to legislate law with regard to cane price, being an agriculture produce. Learned counsel on behalf of petitioners cited some other cases, being not relevant, does not require discussion.42
45. He has also relied on the interim order, dated 30.5.2014 passed by the Division Bench of Allahabad High Court in the case of RASHTRIYA KISAN MAZDOOR SANGATHAN (REGD.) THROUGH CONVENOR v. STATE OF U.P AND TWO OTHERS in PIL No.29523/2014. The said Division Bench has emphasized that the State Government cannot regard itself as powerless under the law to take stringent steps for the recovery of the sugarcane dues. The Division Bench has observed that unless the situation is remedied with a proactive approach, serious social problems may arise causing social unrest which manifests in suicides by farmers across the State.
46. He submits that the loss allegedly suffered by the sugarcane mills is no ground for seeking a judicial review of the price fixation. Relying on the Apex Court's judgment in the case of UNION OF INDIA AND ANOTHER v. CYNAMIDE INDIA LTD. AND ANOTHER reported in (1987) 2 SCC 720, he submits that the price fixation is more in the nature of legislative activity. It is held in the said case that the order made under Section 3(2)(c) of the E.C. Act controlling the price of an essential commodity may itself prescribe the manner in which 43 the price is to be fixed but that will not make the fixation of price a non-legislative activity, when the activity is not directed towards a single individual or transaction, but is of a general nature covering all individuals and all transactions. The legislative character of the activity is not shed and an administrative or quasi-judicial character acquired merely because the guidelines prescribed by the statutory order have to be taken into account. A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. If the legislature has decreed the pricing policy and prescribed the factors which should guide the determination of the price, the Courts would only enquire into the question whether the policy and the factors are present to the mind of the authorities specifying the price.
Even if the prices are demonstrably injurious to some manufacturers or producers, the courts would not re-evaluate the consideration as they are not concerned with the policy or with the rates. The mechanics of price fixation are to be left to the executive.44
47. He relies on the Apex Court's judgment in the case of KERALA STATE ELECTRICITY BOARD v. M/S. S.N. GOVINDA PRABHU AND BROTHERS and other connected cases reported in (1986) 4 SCC 198 to advance the submission that the processual basis of price fixation is to be accepted in the generality of the cases. The price fixation is not open to judicial review, if the same is reasonable and not arbitrary.
48. He read out the following paragraphs from the Constitution Bench judgment in the case of M/s. SHRI SITARAM SUGAR CO. LTD. AND ANOTHER v. UNION OF INDIA AND OTHERS reported in AIR 1990 SC 1277.
37. If a particular function is termed legislative rather than judicial, practical results may follow as far as the parties are concerned. When the function is treated as legislative, a party affected by the order has no fight to notice and hearing, unless, of course, the statute so re- quires. It being of general application engulfing a wide sweep of powers, applicable to all persons and situations of a broadly identifiable class, the legislative order may not be vulnerable to challenge merely by reason of its omission to take into account individual peculiarities and differences amongst those falling within the class.
41. The impugned orders, duly published in the official gazettes notifying the prices determined for sugar 45 of various grades and produced in various zones, and applicable to all producers of such sugar, can, in our view, be legitimately characterised as legislative. These orders are required by Sub-section (6) to be laid before both Houses of Parliament. The notified prices are applicable without exception to all persons falling within well defined groups. The prices are determined in accordance with the norms postulated in the sub-section. It is with reference to such predetermined prices of sugar that the "amount" payable to each producer, who has sold sugar in compliance with an order made with reference to clause (f) of sub-section (2), is calculated. The calculation of such amount is, in contradistinction to the determination of "price of sugar", a non-legislative act.
45. Price fixation is in the nature of a legislative action even when it is based on objective criteria rounded on relevant material. No rule of natural justice is applicable to any such order. It is nevertheless imperative that the action of the authority should be inspired by reason. Saras- wati Industrial Syndicate Ltd., [1975] 1 SCR 956, 961, 962. The Government cannot fix any arbitrary price. It cannot fix prices on extraneous considerations: Renusagar, (supra).
57. Judicial review is not concerned with matters of economic policy. The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The Court does not supplant the "feel of the expert" by its own views. When the legislature acts within the sphere of its authority and 46 delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness. In all such cases, judicial inquiry is confined to the question whether the findings of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land. As rated by Jagannatha Shetty, J. in M/s. Gupta Sugar Works, (supra): "the court does not act like a chartered accountant nor acts like an income tax officer. The court is not concerned with any individual case or any particular problem. The court only examines whether the price determined was with due regard to considerations provided by the statute. And whether extraneous matters have been excluded from determination."
58. Price fixation is not within the province of the courts. Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclu- sions reached by the concerned authority. As stated by Justice Cardozo in Mississippi Valley Barge Line Company v. United States of America, 292 US 282-290, 78 Led 1260, 1265: "The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commission by training and experience is qualified to form ..... It is not the province of a court to absorb this function to itself ..... The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body".
47
49. He submits that the Constitution Bench in the case of U.P.COOPERATIVE CANE UNIONS FEDERATIONS v. WEST U.P.SUGAR MILLS ASSOCIATION AND OTHERS reported in (2004) 5 SCC 430 has held that the field for a higher price than the minimum price is clearly left open in the 1966 Order made by the Central Government. He read out the following portion from the said decision:
"12. ..................Sub-Clause (5) of clause 5-A lays down that no additional price determined under sub-clause (2) shall become payable by a producer of sugar who pays a price higher than the "minimum sugarcane price" fixed under clause 3 to the sugarcane-grower, if the same is not less than the total of the price fixed under clause 3(1) and additional price determined under clause 5-A(2). This provision again contemplates payment of price higher than the minimum price fixed under clause 3(1). A whole reading of the 1966 Order would, therefore, show that the Central Government shall fix the minimum price of sugarcane but there can be a price higher than the minimum price which may be in the nature of agreed price between the producer of sugar and the sugarcane- grower or the sugarcane-growers' cooperative society. So the field for a price higher than the minimum price is clearly left open in the 1966 Order made by the Central Government.48
37. Under Sub-section (1) of Clause 3 of the 1966 Order, the Central Government can only fix a minimum price of sugarcane. This clause should be read along with Sub-clause (2) which creates an embargo or prohibition that no person shall sell or agree to sell sugarcane to a producer of sugar and no such producer shall purchase or agree to purchase sugarcane at a price lower than that fixed under Sub-clause (1). The inconsistency or repugnancy will arise if the State Government fixed a price which is lower than that fixed by the Central Government. But, if the price fixed by the State 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 Sub- clause (2) of Clause 3 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.
50. He submits that it is the State Government which would be knowing the local conditions like the cost of inputs and labour and of prices of molasses, bagasse and press mud. The State Government would therefore be in a better position to fix the sugarcane price.
49
51. He submits that the representatives of the stake- holders constitute the Sugarcane Control Body under Section 3 of the 2013 Act. It is a highly representative body. Just because the Co-operative Minister and the experts were present, the proceedings of the Board cannot be invalidated. He submits that none of the petitioners' representatives of the sugar factories ever objected to the presence of the non-members. The petitioners are therefore estopped from questioning the legality of the proceedings of the Sugarcane Control Board culminating in the fixation of the sugarcane price. He submits that the presence of the non-members is not taken for the purpose of counting the votes. Just because some of the special invitees to the meeting expressed their support to the resolution, it cannot be held that the resolution itself is bad.
52. He submits that no prejudice is caused to the sugar mills on account of the presence of the non-members in the meetings of the Sugarcane Control Board. Unless they demonstrate that they have suffered the prejudice on account of the presence of the non-members, the petitioners are not entitled to succeed in assailing the impugned price fixation. Not 50 every violation is actionable. In support of his submission, he relies on the Apex Court's judgment in the case of STATE BANK OF PATIALA AND OTHERS v. S.K.SHARMA reported in (1996) 3 SCC 364.
53. The proceedings of the board are not vitiated by the participation of the special invitees. The Sugarcane Control Board consists of 14 members. All of them were duly served with the meeting notice. Certain experts were invited so that they would throw light on the intricate issues cropping up in the fixation of the sugarcane price. The opinion expressed by the special invitees was not treated as a vote. The presence of the experts/special invitees has not affected the legality and sanctity of votes in any way.
54. He submits that some of the petitioning sugar mills have themselves entered into an agreement with the sugarcane growers for paying the price, as fixed by the Central Government/ State Government /as agreed upon between the parties. He read out the clause from one such agreement between the sugarcane growing farmer and the sugar mill, which reads as follows:
51
9. ¨ÉøÁAiÀÄUÁgÀ£ÀÄ ¸ÀPÀÌgÉ PÁSÁð£ÉUÉ ¸ÀgÀ§gÁdÄ ªÀiÁqÀĪÀ PÀ©âUÉ l£ï MAzÀPÉÌ PÉÃAzÀæ ¸ÀPÁðgÀ/gÁdå ¸ÀPÁðgÀ CxÀªÁ ¥ÀgÀ¸ÀàgÀ M¥ÀàAzÀ ªÀiÁrPÉÆAqÀÄ ¤UÀ¢ü¥Àr¸À§ºÀÅzÁzÀ zÀgÀPÉÌ PÁSÁð£É ªÀÄvÀÄÛ ¨ÉøÁAiÀÄUÁgÀ£ÀÄ §zÀÝgÁVgÀÄvÁÛgÉ ºÁUÀÆ ¸ÀzÀj zÀgÀzÀ ¥ÁªÀwAiÀÄ£ÀÄß PÀ§Äâ ¤AiÀÄAvÀæt DzÉñÀ 1966 gÀAvÉ ¥ÁªÀw¸À¯ÁUÀĪÀÅzÀÄ. ¸ÁªÀAiÀĪÀªÁV ¨É¼ÉzÀ PÀ§â£ÀÄß ºÉaÑ £À ¨É¯ÉAiÀÄ°è Rjâ¸ÀĪÀÅzÀÄ.
55. He submits that the 2013 Act does not confer unbridled power. The perusal of Section 4 of the said Act discloses sufficient and effective guidelines for the Board in the matter of fixing the sugarcane price on revenue sharing basis taking into account the actual revenue realized from sugar, molasses, bagasse and press mud.
56. He submits that under Section 9 of the 2013 Act, the sugar producer is required to pay the sugar price to the sugarcane growers within 14 days from the date of supply. Therefore, the fixation of the sugar price at the commencement of the sugar year has to be with reference to the price of the sugar prevailing in the immediately preceding period. If the sugarcane price has to be fixed as per the current price of sugar, then the payment within 14 days cannot be ensured. 52
57. On being asked when the prices are being reviewed next, he submits that the same would be done in one month's time. If the sugar factories still incur any loss this year, the Sugarcane Control Board, which consists of the representatives of sugar factories and farmers, would examine the matter while deciding the sugarcane price for the next year. He submits that the perusal of the proceedings of the board meeting, dated 10.11.2013 show that the impugned price fixation is temporary.
58. Relying on the Apex Court's judgment in the case of M/S. HOECHST PHARMACEUTICALS LTD. AND OTHERS v. STATE OF BIHAR AND OTHERS reported in (1983) 4 SCC 45 and VIJAY KUMAR SHARMA AND OTHERS v. STATE OF KARNATAKA AND OTHERS reported in AIR 1990 SC 2072, the learned Advocate General submits that in order to attract the doctrine of repugnancy, three tests have to be satisfied: (a) both the Central law and the State law should be in respect of the entry in the concurrent list (b) both the laws should operate in the same field (c) one law must be repugnant or irreconcilable with the other. He further submits that the incidental encroachment over the Central law is no ground to invoke the doctrine of repugnancy.
53
59. He submits that the neighbouring State, Tamil Nadu has declared the sugarcane price at `2,650/- per metric ton, although the average sugar recovery in Tamil Nadu is less than 9%. He submits that in States like Uttar Pradesh, Punjab, Haryana and Uttarkand, the sugarcane price fixed by the State Governments is much more than what is fixed in Karnataka, although the sugar recovery percentage in the said States is far lesser than what it is in Karnataka.
60. He submits that the Karnataka State Government has exempted the payment of purchase tax on sugarcane, road cess and value added tax on the sugar amounting to `100/- per metric ton. The sugarcane price being paid by the sugar factories therefore actually works out to be `2,400/- per metric ton.
61. He further submits that the State Government is also giving the additional incentive of `150/- per metric ton to the farmers and thus the sugar factories purchase the sugarcane at subsidised price. In most of the States, such incentives and concessions are not being given.
62. He submits that the sugar factories are indeed making good profits contrary to what the petitioning sugar mills 54 represented to this Court. In support of his submission, he has produced the statement depicting profit/loss account of sugar factories in the State. The same is produced as Annexure-5 to the points for arguments.
63. He submits that the statement of losses (Annexure-J in W.P.No.54865-54867/2014) is a doctored document. The figures shown in the said documents are for the lean period or off- season-from April to September 2013. If what they have earned for the next period is taken into account, it becomes clear that their grievance over the loss is artificial.
64. He submits that in 2012-13 also, the sugar factories in South Karnataka have paid the sugarcane price ranging from `2,350/- to `2,510/- per metric ton ex-gate. In North Karnataka sugar factories have paid the sugarcane prices ranging from `2,200/- to `2,550/- ex-field excluding the harvesting and transporting charges, which was also being borne by the sugar factories. He submits that 80% of the sugar factories are situated in the Northern Karnataka. Last year the average sugar recovery in Karnataka was 10.36%. This year it is 10.97%. He has furnished the material particulars in the following tabular form:
55
Statewise information on cane price, cane crushed, sugar recovery, cane arrears, sugar price, cost of cultivation of cane and conversion cost of sugar for 3 years Cane S Average Cane Average Tax Benefit Court Cane Price Crushe Cost of Installments of L No. of SAP Sugar arrears Sugar Price /waiver/inecentive Cases State Year Paid d Cultivation Cane Payment if N Factories (Rs./tonne) Recovery (Rs.in (Rs./Qtl.) If any announced by against (Rs./tonne) (Lakh (Rs./tonne) any o (%) crores) Upt to May, 13 By State Government SAP MTs) 2010-11 SAP is not 1750 331.74 10.99 16.37 2542 1291.5 Nil Govt.2, Co- 2011-12 implemented 1900 347.53 11.16 9.56 2794 1513.5 Nil op 13, 2012-13 2400 320.05 10.37 34.28 2989 1783.0 Rs.100/- Per MT Nil 1 Karnataka One Pvt.43, 2013-14 2650 2600 2076.2 Tax Exemption Total 58 Rs.150/- Per MT Incentive NIL 2010-11 SAP is not 1760 to 2270 17.2 9.44 Nil 2850/- Not Furnished Nil Co-op-4, Madhya 2011-12 implemented 1900 to 2440 17.01 9.51 Nil Not Furnished Nil 2 Pvt.14, Nil One Pradesh 2012-13 2550 to 2800 21.32 9.60 Nil 2141.78 Nil Total 14 2013-14 2310 to 2600 ... ... 10.21 Not Furnished Nil 2010-11 SAP is not Not Furnished 123.6 10.04 Nil Not Furnished Not Furnished Three equal Nil Co-op 17, 2011-12 implemented Not Furnished 93.93 10.67 Nil Not Furnished Not Furnished installments Nil 3 Gujarat Pvt-Nil, 2012-13 Not Furnished 104.31 10.81 Nil Not Furnished Not Furnished Nil Nil Total-17 2013-14 2300/- to 2600/- ... ... Nil 3300/- Not Furnished Nil 2010-11 SAP is not 1960 802.51 11.3 30.02 Not Furnished 1617.73 Two (Rs.2200/- Nil 2011-12 implemented 2150 771.08 11.67 3.52 Not Furnished Not Furnished +Balance) Nil Rs.130/- Per MT PT 4 Maharashtra Total-165 2012-13 2580 702.26 11.41 0.148 Not Furnished Not Furnished Nil Exemption 2013-14 2650 ... ... ... 2550/- Not Furnished Govt.2, Co- 2010-11 1900 1900 203.12 9.09 Nil 2678.14 1310.79 One Nil op 16, 2011-12 2000 2000 254.55 9.38 14.93 2783.7 1441.77 Nil 5 Tamil Nadu Nil Pvt.25, 2012-13 2250 2250 207.02 8.98 311.68 3305 1624.40 Nil Total 43 2013-14 2650 2650 ... ... ... 2750 ... Nil 2010-11 Early 2000 2000 343.32 8.8 732.46 Not Furnished 2070 One Nil Mid 1950 1950 Nil Late 1900 1900 2011-12 Early 2300 2300 427.12 9.13 965.88 Not Furnished 2330 One Nil Mid 2250 2250 Nil Co-op 09, Late 2200 2200 6 Punjab Pvt-07, Total-16 2012-13 Early 2500 2500 473.92 9.09 1162.9 Not Furnished 2450 One Nil Mid 2400 2400 Nil Late 2350 2350 2013-14 Early 2900 2900 ... ... ... 3200 ... One ...
Mid 2800 2800 Nil
Late 2750 2750
56
7 Haryana Co-op 11, 2010-11 Early 2200 2200 43.464 9.02 Nil 3018.83 1850 Nil
Pvt. 03, Mid 2150 2150 Nil
Total 14 Late 2100 2100
2011-12 Early 2310 2310 54.296 9.1 Nil 3133.58 2260 NIL
Mid 2260 2260 NIL
Late 2210 2210
2012-13 Early 2760 2760 52.451 9.76 Nil 3451.88 2360 Nil
Mid 2710 2710 Nil
Late 2660 2660
2013-14 Early 3010 -- -- -- -- 2900 -- One --
Mid 3950 Nil
Late 2900
8. Uttarakhad Govt. 2 2010-11 Early 2150 2150 32.351 9.19 Nil 2734.66 2450 Nil
Nil
Co-op 04 General 2100 2100
Pvt. 03 2011-12 Early 2550 2550 36.407 9.35 23.74 2792 2463 Nil
Nil
Total 09 General 2500 2500
2012-13 Early 2950 2950 36.93 9.1 111.29 3251 2668.9 Nil
Nil
General 2850 2850
2013-14 Early 2950 --- --- --- --- 2850 --- Two Nil
General 2850 Nil (Rs.2600/-+
balance)
9. Uttar Govt.1, Co- 2010-11 Early 2100 2100 643.81 9.14 7.13 3000.47 1207.1 Nil
Pradesh op.23, Mid 2050 2050
Nil
Pvt.95, Late 2000 2000
Total 119
2011-12 Early 2500 2500 768.55 9.07 17.01 3254.88 1695.27 Nil
Mid 2400 2400 Nil
Late 2350 2350
2012-13 Early 2900 2900 815.06 9.18 2387.59 3445.29 2196.64 Nil
Mid 2800 2800 Nil
Late 2750 2750
2013-14 Early 2900 --- --- --- --- 2800 --- Two Nil
Mid 2800 Rs.114/- Per MT Tax (Rs.2600/-+
Late 2750 exemption balance)
10 Andhra Govt.3, Co- 2010-11 SAP is not 1700 to 2100 103.17 9.75 Nil 2716.05 1880 Two Writ
Pradesh op.11, 2011-12 implemented 1900 to 2210 115.87 9.79 Nil 3014.34 2293.33 Nil (Rs.2160/-+ petition in
Pvt.26, 2012-13 2150 to 2600 103.01 9.64 39.41 3142.35 2460 Nil balance) pending
Total.40 2013-14 2160 to 2600 --- --- --- 2500 --- Nil in High
Rs.60/- per Tone Court of
AP
PT exemption
57
65. He brings to my notice the recent decision of the Government of India to increase the import duty on sugar from the present 15% to 40%. This would result in the increase of the sugar price by `300/- `400/- per quintal. He submits that the Central Government has also decided to increase the financial assistance in the form of interest-free loan to the sugar factories to the extent of excise duty paid by them during the preceding 5 years' period.
66. He refers to the Central Government's letter, dated 16.7.2013 sent to the State Government whereunder the Central Government has expressed its appreciation of State Government enacting the 2013 Act and fixing the realistic price of the sugarcane under the 2013 Act. The said letter itself is in the nature of the Central Government's recognition of the State's legislative competence in the matter. The relevant portions of the letter are extracted hereinbelow:
"Dr. Rangarajan Committee has suggested a price sharing formula to decide the cane price payable to the farmers. I am happy to note that Karnataka Government has accordingly notified "The Karnataka Sugar Cane (Regulation of Purchase and Supply) Act, 2013 on 10th May 2013. It is important that the cane price is fixed by 58 the State Governments realistically to ensure that the sugar sector is globally competitive."
67. He also takes serious exception to some of the petitioning sugar factories approaching this Court, as if they are the victims of injustice. He submits that the petitioner No.3 in W.P.Nos.26523-26525/2014 has not paid even the minimum price/F.R.P. fixed under the Sugarcane Control Order, 1966 from 2002-03. He submits that the State Government has been fighting for the last 14 years to have the sugar cane supply dues recovered from the said sugar factory. He submits that this has not been disclosed in the memorandum of writ petition. He submits that the sugarcane growing farmers are committing suicide.
68. Sri Shashidhar, the learned counsel appearing for some of the petitioners, quickly joins issue with the learned Advocate General and submits that no counter is filed taking objection to the alleged non-payment of the FRP dues. He submits that if the counter were to be filed, the said sugar factory would have met the State Government's contention by filing the appropriate rejoinder.
59
69. He submits that the 2013 Act is a welfare legislation. The petitioning sugar factories are not justified in seeking the declaration that it is ultra vires. He takes serious exception to the conduct of the petitioning sugar factories. They have not challenged the 2013 Act immediately after its commencement. They have not challenged it after the constitution of the Sugarcane Control Board. Only after the fixation of the sugarcane price, they have challenged it.
70. Sri Sajjan Poovayya, the learned counsel appearing for the respondent Nos.3 to 7 in W.P.Nos.54865-54867/2013 submits that the respondent No.3 is a registered body of farmers, who are primarily growing the sugarcane in the State of Karnataka and that the respondent Nos.4 to 7 are the sugarcane cultivating farmers in Karnataka. He submits that the sugar factories have failed to clear the arrears of multiple past season and as such there are several litigations pending in respect of the same.
71. He submits that it is settled law that the inconsistency or repugnancy will arise, if the State Government fixes the price, which is lower than the price fixed by the Central Government. 60 But if the price fixed by the State Government is higher than the one fixed by the Central Government, then there would not be any occasion for any inconsistency or repugnancy, as it is possible for both the orders to operate simultaneously. In support of his submission, he also relies on paragraph No.37 of the Apex Court's judgment in the case of U.P.Co-operative Cane Unions Federations (supra), which paragraph is already extracted hereinabove while referring to the submissions of the learned Advocate General. He submits that several sugar factories have earned good profits. If any of them have incurred any loss, it is only due to the usage of old and faulty machinery, which are prone to frequent breakdowns or due to mismanagement and inefficiency.
72. He submits that the Apex Court's decision in the case of M.Karunanadi v. Union of India, reported in (1979) 3 SCC 431 is reiterated in the subsequent decision in the case of Maa- apparanan Kuri Co. Ltd.,(supra). The said portions are extracted hereinbelow:
"24. It is well settled that the presumption is always in favour of the constitutionality of a statute and the onus lies on the person assailing the Act to prove that it is unconstitutional. Prima facie, there does not appear to us 61 to be any inconsistency between the State Act and the Central Acts. Before any repugnancy can arise, the following conditions must be satisfied:
(1) That there is a clear and direct inconsistency between the Central Act and the State Act.
(2) That such an inconsistency is absolute irreconcilable.
(3) That the inconsistency between the provisions of the two Acts is of such a nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other."
73. He submits that when it comes to the question of bargaining, the farmers are no match for the sugar factories. It is becoming impossible for the sugarcane growing farmers to continue supplying the sugarcane and wait indefinitely for the payment of the amounts by the receivers of sugarcane.
74. He submits that Sections 3(8) and 4(f) of the Karnataka Act, if read together, would yield one conclusion. The Sugarcane Control Board would meet once in four months for the purpose of fixing/revising the sugarcane price based on the actual price of sugar, molasses, bagasse and press mud. Relying on the Apex 62 Court's judgment in the case of B.PREMANAND AND OTHERS v. MOHAN KOIKAL AND OTHERS reported in (2011) 4 SCC 266, he submits that the courts cannot be troubled to read something into the statutory provision, which is plain and unambiguous.
75. He submits that in paragraph No.19 in the memorandum of W.P.Nos.54865-54867/2013, the petitioning sugar factories have virtually admitted that the fixation under the 2013 Act is based on actual realization from the sale of sugar, bagasse, molasses and press mud during the particular season. Their only grievance as sought to be made out in paragraph No.19 is that the price be fixed at the end of the season. However, in the course of the argument, the petitioners have gone far beyond their pleadings in the writ petition, which is impermissible.
76. Sri T.P.Sharief, the learned counsel for the respondent Nos.11 to 13 submits that the sugarcane growing farmers are at the vagaries of uncertainties. He submits that at the all India level two farmers commit suicide every hour; 20-30 farmers attempt to commit suicide every hour. The same is because the 63 farmers are not getting the remunerative price for what they grow. The recovery rate of the sugar from the sugarcane in Karnataka varies from 10% to 15%. Consequently, the owners of the sugar factories are making good profits. But on one pretext or the other, they are not paying to the farmers what the farmers are entitled to.
77. At this juncture, the learned Additional Government Advocate Sri Lakshminarayan submits that the manufacturers and the professionals fix the price for what they manufacture or for the service they render. But it is unfortunate that a farmer cannot fix the price for what he grows. Somebody else fixes the price and the farmer has to be content with that.
78. Sri Ashok Haranahalli, the learned Senior Counsel appearing on behalf of the respondent Nos.14 and 15 in W.P. Nos.54865-54867/2013 submits that the impugned fixation of the sugarcane price by the State Government is itself on the lower side. Relying on the fifth and final report, dated 4.10.2006 submitted by the National Commission on Farmers captioned "SERVING FARMERS AND SAVING FARMING", he submits that the average monthly income per farmer household is `2115/-, which 64 does not cover the average per capita monthly consumption expenditure of `2,770/-. Quoting from the said report, he submits that the rural poverty and under-nutrition are higher than the urban poverty and hunger. The said Commission, taking serious view of the agrarian distress hot spots, emphasized the need for paradigm shift from "Suicide Relief" to "Life-saving Support". The said Commission has noted with concern the occurrence of farmers' suicides in the States, particularly, Andhra Pradesh, Maharashtra, Karnataka, Kerala and Punjab. The extreme step of taking one's life marks the loss of hope in the prospect of leading a productive and satisfying life. The Commission has recommended that the prices received by the farmers for their produce should be atleast 50% more than the cost incurred.
79. Sri Ashok Haranahalli brings to my notice what is published in 'live mint' and the 'Wall Street Journal' on 23.1.2008 to highlight the plight of sugarcane growing farmers. Over the past few months, many farmers have chosen to burn their crops than let them dry up and die, a move driven by desperation. The learned Senior Counsel submits with reference to the said 65 publication that the sugarcane growing farmers have not been able to realize their capital, because of the delay in the commencement of the crushing operations by the sugar factories.
80. Relying on the document, 'Vision 2030' brought out by the Indian Institute of Sugarcane Research, Lucknow, he submits that the problem of delayed payment of cane arrears cannot be perpetuated, as the same is acting as a strong deterrent in the augmentation of cane acreage and cane development, which is also affecting the stability in the cane supply position.
81. The learned Senior Counsel also relies on the article 'Sugarcane leaves farmers crushed', contributed by Sri A.Narayanamoorthy P. Alli, published in 'The Hindu Business Line' and submits that the sugarcane growing farmers are only demanding the right price for their produce and immediate payment of their dues. They are asking themselves the question as to why they should cultivate the sugarcane, if they are not getting a reasonable return for the said crop. The price fixed by the Government and the Sugarcane Control Boards are neither fair nor remunerative. Not increasing the price of the sugarcane 66 in proportion to the rise in the price of the fertilizers, pesticides and other inputs has made the sugarcane cultivation extremely unviable.
82. The learned Senior Counsel submits that there is no inconsistency or repugnancy between the Sugarcane Control Order 1966 and the 2013 Act, because the State Government's fixation of the price under the 2013 Act is higher than the price fixed under the Sugarcane Control Order 1966. He also read out paragraph No.37 from the Apex Court's judgment in the case of U.P.Cooperative Cane Unions Federations (supra), which is already extracted while referring to the submissions of the learned Advocate General.
83. He also relies on the Apex Court's judgment in the case of VIJAY KUMAR SHARMA AND OTHERS v. STATE OF KARNATAKA AND OTHERS, reported in AIR 1990 SC 2072. Paragraph No.43 of the said decision read out by him is as follows:-
"43. Repugnancy between the two pieces of legislation, generally speaking, means that conflicting results are produced when both laws are applied to the same set of facts. Repugnancy arises when the provisions of both laws are fully inconsistent or are absolutely irreconcilable and 67 that it is impossible to obey without disobeying the other. Repugnancy would arise when conflicting results are produced when both the statutes covering the same field are applied to a given set of facts. The Court should, therefore, make every attempt to reconcile the provisions of the apparently conflicting enactments, and would give harmonious construction. There is no repugnancy unless the two Acts or provisions are wholly incompatible with each other or the two would lead to absurd result. The purpose of determining the inconsistency is to ascertain the intention of the Parliament which would be gathered from a consideration of the entire field occupied by the State Legislature. The proper test is whether the effect can be given to the provisions of both the laws or whether both the laws can stand together. There is no repugnancy if these two enactments relate to different fields or different aspects operating in the same subject. In my considered view, Art. 254 was engrafted in the Constitution by the founding fathers to obviate such an absurd situation. The reason is obvious that there is no provision in the Constitution that the law made by the Parliament is to be void by reason of its inconsistency with the law made by the Legislature of a State. It may be different if the State law is only to supplement the law made by the Parliament. If both the laws without trenching upon one another field or colliding with each other harmoniously operate, the question of repugnancy does not arise. It is also axiomatic that if no law made by Parliament occupies the field, the State Legislature is always free to make law on any subject/subjects in the 68 Concurrent List III of the Seventh Schedule of the Constitution."
84. He also read out paragraph No.16 from the Hon'ble Supreme Court's decision in the case of AMALGAMATED ELECTRICITY CO. (BELGAUM) LTD., v. MUNICIPAL COMMITTEE, AJMER, reported in AIR 1969 SC 227. The same is extracted hereinbelow:-
"16. We see no conflict between CL 12 of the Schedule in the Electricity Act and Sections 3 and 4 of the Bombay Act. Clause 12 prescribes a procedure for settling the price of electricity supplied by the licensee for street lighting. It merely lays down the machinery for settling the price if there is dispute between the contracting parties. That clause does not fix the price to be paid or even the maximum price payable. We fail to see how that clause takes away the power from the State Legislature to impose additional burden on the consumer. All that clause means is that the licensee cannot dictate his terms to the authority responsible for street lighting. We are unable to agree with the learned Judges of the High Court that incorporating Clause 12 of the Schedule, the Central Legislature intended that under no circumstances, the liability of the consumer can be increased beyond what is agreed during the continuance of the contract. In our opinion it imposes no fetters on the powers of the provincial legislatures in the matter of enhancing the price of the electricity supplied by the licensee for street lighting.69
85. The learned Senior Counsel submits that each State Government would be in a better position to fix the price of the sugarcane depending upon the local conditions. He submits that the combat between sugarcane barons and the marginal farmers is not the fight amongst the equals. Appreciating the comparative disadvantage of the farmers, if the State Government has come out with the impugned legislation, the sugar factories cannot have any genuine grievance.
86. He read out paragraph No.22 from the Apex Court's judgment in the case of M/S.SUKHNANDAN SARAN DINESH KUMAR AND OTHERS v. UNION OF INDIA AND OTHERS, reported in (1982) 2 SCC 150. The said paragraph is extracted hereinbelow:-
"22. The statutory prescription of quantum of rebate for binding material has been prescribed for the benefit of sugar-cane growers. Producers of sugar and khandsari sugar constitute a powerful trade lobby, the fact of which one can take judicial notice. Sugar being an essential commodity occasionally kept in short supply and being a commodity needed for consumption by almost the entire population, the powerful industry magnates in this field are in a position to dominate both the growers of sugar- cane as also the consumers of the essential commodity.70
Number of regulations have been enacted almost since the dawn of independence to regulate this powerful combination of manufacturers of sugar and khandsari sugar all over the country for the ultimate benefit of consumers on the one hand and on the other hand the farmers and the growers of sugar-cane with their small holdings and raising a perishable food crop. The marginal farmers are unable to stand up against the organised industry. It does not require long argument in this predominantly agricultural society that the farmers having small holdings need protection for selling at fair price their meagre agricultural produce. As far back as 1953, the U.P. Legislature enacted U.P. Sugar-cane (Regulation of Supply and Purchase) Act, 1953, for rational distribution of sugar-cane to factories, for its development on the organised scientific line, to protect the interest of cane growers and of the industry, etc. Constitutionality of this Act was challenged on various grounds including one under Article 19 (1) (g) In Ch. Tika Ramji. v. The State of U.P., this Court repelled the challenge under Article 19 (1)
(g) holding that the restriction which is imposed upon the cane-growers in regard to sales of their sugar-cane to the occupiers of factories in areas where the membership of the Cane-growers' Co-operative Society is not less than 75 per cent of the total cane growers within the area, is a reasonable restriction in the public interest designed for safeguarding the interest of the large majority of growers of sugar-cane in the area and works for the greatest good of the greatest number. The proposition is now beyond the pale of controversy that the State can impose a 71 restriction in the interest of general public on the right of a party to contract where in the opinion of the Government the contracting parties are unable to negotiate on the footing of equality. Constitutional validity of statutes prescribing minimum wages has been founded on this proposition. The principle can be effectively extended to the powerful sugar industry and the cane growers because the cane growers admittedly are at a comparative disadvantage to the producers of sugar and khandsari sugar who were described in the course of arguments as sugar barons. It does not require an elaborate discussion to reach an affirmative conclusion that sugar-cane growers who are farmers cannot negotiate on the footing of the equality with the producers of sugar and khandsari sugar. The State action for the protection of the weaker sections is not only justified but absolutely necessary unless the restriction imposed is excessive."
87. In the course of rejoinder, Sri Vijay Shankar, the learned Senior Counsel appearing on behalf of the petitioning sugar factories submits that the K.S.Act, 2013 itself is void and consequently, the fixation of the sugarcane price by the Sugarcane Control Board under the said Act is also void. In support of his submissions, he also relied on the Division Bench's judgment in the case of Vasavi Traders (supra). 72
88. He sought to draw support from the Apex Court's judgment in the case of K.JANARDHAN PILLAI AND ANOTHER v. UNION OF INDIA AND OTHERS, reported in (1981) 2 SCC 45 for advancing the submission that even raw material like sugarcane used in the manufacture of sugar is a 'foodstuff'. He submits that item No.3 in the Schedule to the E.C. Act is taken from item-33(b) in List III of the Seventh Schedule to the Constitution of India - food stuffs include edible oil seeds and oils.
89. As the field is occupied by the Central Legislation, the State Government is denuded or deprived of the legislative power. In support of his submissions, he relies on the Apex Court's judgment in the case of STATE OF ORISSA AND ANOTHER v. M/S.M.A.TULLOCH AND CO. AND ANOTHER, reported in AIR 1964 SC 1284. The relevant paragraph of the said decision is extracted hereinbelow:-
"15. But even if the matter was res integra, the argument cannot be accepted. Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one Legislature has superiority over the other then to the extent of the repugnancy the one 73 supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for, if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. In the present case, having regard to the terms of s. 18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no super- session of the State Act.
90. In the course of rejoinder, Sri Udaya Holla, the learned Senior Counsel appearing on behalf of some of the sugar factories submits that the provisions contained in Section 3(2) of the E.C. Act bring within the scope of Central Legislation the regulation of the production of sugarcane as well as the controlling of the price at which sugarcane may be brought or sold.
74
91. He submits that in case of the conflict between the earlier decision rendered by a co-ordinate Bench of three Judges and the later decision rendered by a majority of 2:1, the earlier decision will prevail over the later. In support of his submissions, he relies on the Apex Court's judgment in the case of BABU PARASU KAIKADI (DEAD) BY LRS. v. BABU (DEAD) THROUGH LRS. reported in (2004) 1 SCC 681.
92. He also relies on the Apex Court's judgment in the case of P.RAMACHANDRA RAO v. STATE OF KARNATAKA reported in (2002) 4 SCC 578 for advancing the contention that the decision of larger Bench is binding on the smaller Bench of the Hon'ble Supreme Court. First part of paragraph No.36 of the said decision read out by him is as follows:
"36. The declaration of law made by the Constitution Bench of five learned Judges of this Court in the decision reported in A.R.Antulay case still holds the field and its binding force and authority has not been undermined or whittled down or altered in any manner by any other decision of a larger Bench. Consequently, the Benches of lesser number of constitution of Judges which dealt with the cases reported in 'Common Cause' A Regd.Society v. Union of India; Raj Deo Sharma v. State of Bihar and Raj Deo Sharma (II) v. State of Bihar could not have laid down any principles in derogation of the ratio laid down in 75 A.R.Antulay case either by way of elaboration, expansion, clarification or in the process of trying to distinguish the same with reference to either the nature of causes considered therein or the consequences which are likely to follow and which, in their view, deserve to be averted.........."
93. The learned Senior Counsel submits that the 'Sugar Season' is defined in Section 2(n) of the 2013 Act as the year commencing on the first day of October and ending with the thirtieth day of September next year. The plain reading of this definition in juxtaposition with the provisions contained in Section 4(f) of the 2013 Act reveals that the taking of the price prevailing in the previous sugarcane season is not contemplated for fixing prices for the succeeding or the ensuing year.
94. He submits that even when the price of the sugar is comparatively lower in Karnataka, the sugar factories find it unviable to transport the sugar to other States, because of the high cost of transportation involved. He brings to my notice the statement at Annexure-J in W.P.No.54865-867/2013 showing the losses incurred by the sugar factories. It is in the interest of all that the sugar industries run efficiently and profitably. The 76 industry can only pay what it gets from selling the sugar and its by-products after meeting its expenses.
95. The submissions of the learned counsel have received my thoughtfull consideration. The first question that arises for my consideration is whether the 2013 Act is liable to be struck down as unconstitutional?
96. As held by the Apex Court in the case of SHRI RAM KRISHNA DALMIA VS SHRI JUSTICE S.R.TENDOLKAR reported in AIR 1958 SC 538 there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. If nothing is placed on record by the challengers, the verdict ordinarily goes against him, as held by the Apex Court in the case of B.Banerjee(supra).
97. As held by the Apex Court in the case of Vijay Kumar Sharma (supra), there is no repugnancy, if the two enactments relate to different aspects operating in the same field. If the State law supplements the law made by the Parliament, the question of repugnancy does not arise. In the case of U.P. Co- 77 operative Cane Unions Federations (supra) also the controversy related to the competence of the State Government to fix the State Advised Price for sugarcane over and above the minimum price fixed by the Central Government. The Hon'ble Supreme Court held that if the price fixed by the State 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. It was held that so long as the price fixed by the State Government is higher than the one fixed by the Central Government, it does not lead to any kind of repugnancy. If this Court is confronted with two conflicting decisions of the Hon'ble Supreme Court by its Benches consisting of equal number of Judges, this Court would follow the judgment, which is later in point of time.
98. The legislative competence of the State Government to enact the 2013 Act can also be examined with reference to the other provisions of law. Agriculture is in the legislative domain of the States as it figures in List II - State List. Entry No.14 thereat reads as follows: "Agriculture, including agricultural, education and research, protection against pests and prevention 78 of plant diseases." Now let me examine whether the term 'agriculture' includes sugarcane growing also. The definition of 'agriculture' may be taken from some neutral sources.
99. The Concise Oxford dictionary gives the meaning of the term 'agriculture' as "science or practice of cultivating the soil and rearing animals." The Collins English dictionary gives the meaning of agriculture as "the rearing of crops and livestock; farming." As per the Webster's Dictionary, 'agriculture' is "the cultivation of the ground; the raising of crops and feeding of cattle or other livestock; husbandry; tillage; farming; agronomy." The meaning of 'agriculture' is given by the Chambers 21st Century Dictionary as "the cultivation of the land in order to grow crops or raise animal livestock as a source of food or other useful products."
100. Going by these definitions, the sugarcane growing is certainly an agricultural activity. In the case of EAST U.P. SUGAR MILLS ASSOCIATION (supra), the Division Bench of the High Court of Judicature, Allahabad (Lucknow Bench) has held that the sugarcane is just like any other agricultural crop. The sugarcane being an agricultural produce is a State subject under Entry No. 14 of List II and therefore the State has got the 79 legislative competence to fix the sugarcane price. Exclusive power under List II has been conferred on the States to enact the law on the agricultural produce including the sugarcane.
101. Yet another relevant aspect is the adding of Explanation-II to Section 3(3-C) of the E.C.Act with effect from 01.10.2009. It reads as follows:
"Explanation II - For the removal of doubts, it is hereby declared that the expressions "fair and remunerative price" referred to in clause (a), "manufacturing cost of sugar" referred to in clause
(b) and 'reasonable return on the price paid or payable under any order or any enactment of any State Government and any price agreed to between the producer and grower or a sugarcane growers' co-
operative society."
102. The plain reading of the above extracted provisions reveals that the State Government has the power to fix the price higher than the FRP fixed by the Central Government.
103. Based on the Government Advocate's submission in W.A.No.3956/2009 that the State Government has no right to fix the minimum sugarcane price as per the Sugarcane Control Order, 1966 the State Government cannot be estopped from 80 passing the 2013 Act and fixing the price of the sugarcane as per the provisions of the said Act. It is trite that the concession made by the learned counsel on the question of law does not bind the concerned party.
104. The Apex Court judgment in the case of U.P.CO- OPERATIVE CANE UNION FEDERATIONS (supra) was brought to the notice of this Court's Division Bench in TUNGABHADRA SUNGARCANE AND BANANA GROWERS ASSOCIATION (supra). But, paragraph No.37 of the Hon'ble Supreme Court's judgment in the said case does not appear to have been brought to the notice of the Division Bench. It is in paragraph No.37 of its judgment that the Hon'ble Supreme Court has expressed the considered view that if the State Government's fixation of sugarcane price is higher than that of the Central Government, then there will be no occasion for any inconsistency or repugnancy. Therefore, the Division Bench's view that the State Government has no competence to fix the FRP does not come to the rescue of the petitioning sugar factories in any way.
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105. The agreements entered into between one sugarcane growing farmers and sugar mills themselves state that both the parties are bound by the price fixation arrived at by the Central Government/State Government. Such of the sugar mills who have entered into such an agreement are estopped from contending that the State Government has no jurisdiction to fix the sugarcane price.
106. For the reasons best known to the petitioning sugar factories, the Central Government is not made a party to these petitions. If the Central Government were to be made a party, it would have made its position clear on whether or not there is repugnancy between Sugarcane Control Order, 1966 made by the Central Government and the 2013 Act enacted by the State Government. Besides, the Central Government has conveyed its pleasure to the Karnataka State Government over enacting the 2013 Act, as is evident from the Central Government's letter, dated 16.07.2013. The said letter also states that it is important that the cane price is fixed by the State Governments realistically.
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107. In my considered view, the Sugar Cane Control Order, 1966 does not impose any fetters on the powers of the State Legislature to enact the law, as per the provisions of which the sugarcane price would be higher than that fixed under the Sugarcane Control Order, 1966. The width and amplitude of the State Government's power to fix the higher price are not hedged. In other words, the field for fixing the price higher than the minimum price fixed by the Central Government is left open in Sugarcane Control Order, 1966. The FRP fixed by the Union of India is the floor price for the entire Country but with the option to the State Government to fix higher price.
108. It is also profitable to refer to the interim order, dated 30.05.2014 of the Hon'ble Division Bench of the Allahabad High Court in (PIL) No.29523/2014 in the case of RASHTRIYA KISAN MAZDOOR SANGATHAN (supra), wherein the State Government of Uttar Pradesh was directed to ensure the payment of the outstanding amounts towards the purchase of sugarcane. The determination of the price at the rate of `280/- per quintal was under the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953; the 83 amounts aggregate to `2,800/- per ton. This is more than the price fixed in Karnataka and also more than the FRP fixed by the Central Government.
109. In the said interim order, the Division Bench of Allahabad High Court, taking note of the suicide by the farmers, has said that the non-payment of the sugarcane dues is a serious breach of the right to live under Article 21 of the Constitution of India. The said P.I.L. was disposed of by the Division Bench of Allahabad High Court on 05.09.2014 directing the immediate measures and action for the recovery of the sugarcane dues.
110. The Apex Court in the case of M/s SUKHANANDAN SARAN DINESH KUMAR (supra) has observed that the sugar cane growing farmers are at a comparative disadvantage, as they are in no position to negotiate with the powerful sugar industry on the footing of equality. The marginal farmers are unable to stand up against the organized industry. The farmers having small holdings need protection for selling their agricultural produce at fair price. To enable itself to discharge its 84 welfare functions, the State Government has come up with the impugned legislation.
111. I am thus not persuaded to accept the contentions urged on behalf of the petitioning sugar mills that the sugarcane price fixation is exclusively occupied by the Union of India. Consequently, the first question is answered in the negative.
112. The second question that falls for my consideration is whether the impugned price fixation is arbitrary? It is the grievance of some of the petitioners that fixing of the price of the sugarcane for North Karnataka on ex-field basis and for South Karnataka on ex-gate basis is irrational, arbitrary besides being discriminatory. Fixation of the price on ex-field basis is disadvantageous to those of the petitioning sugar factories, who are operating only in North Karnataka. Because they have to bear the additional burden of `325/- per metric ton towards harvesting and transportation charges.
113. The submission on behalf of the Government that the sugar factories in North Karnataka have been paying the sugarcane price on ex-field basis in the past also, is not disputed by the petitioning sugar factories. The system of fixing the price 85 according to certain regions or zones is not a new one. The zonal system is not violative of Article 14 of the Constitution. In the case of ANAKAPALLY CO-OPERATIVE AGRICULTURAL AND INDUSTRIAL SOCIETY vs. UNION OF INDIA reported in AIR 1973 SC 734, the Hon'ble Supreme Court held that Section 3(3C) of the E.C. Act clearly envisages and contemplates the fixation of different prices for different areas.
114. If different sugarcane prices are fixed for different zones, having regard to the relevant factors, it does not warrant any judicial interference. So long as the differentiation appears reasonable and far from being arbitrary and is based on intelligent and intelligible criteria, the question of quashing the price fixation would not arise at all.
115. Even if the petitioning sugar factories' case that they are incurring the losses is accepted, it may be for reasons unconnected to the impugned price fixation and geographic zoning. The losses, if any, being incurred by the petitioning sugar factories may have been caused by the condition of plant and machinery, quality of management, investment policy, labour relations, etc. These are the matters on which the 86 petitioning sugar factories have not furnished any data and in any event judicial review is hardly appropriate for their consideration. In the case of SHRI SITARAM SUGAR CO. LTD. (supra), the grouping of sugar factories by the Central Government for the purpose of determining the price of levy sugar is upheld by the Hon'ble Supreme Court. In the instant case also, the geographic zoning and fixing the FRP for South Karnataka on ex-gate basis and for North Karnataka on ex-field basis are slender grounds for interference in the impugned price fixation notification. The assertion that the petitioning sugar factories have suffered the loss on account of the impugned price fixation regime is not established. As there is sufficient compliance with Section 4(f) of the 2013 Act, I do not see any merit in the challenge to the price fixation in question.
116. It is also to be noted that in Tamilnadu, where the sugar recovery percentage is below 9%, the State-agreed price is `2,650/- per ton. The State Governments of Uttar Pradesh, Punjab and Haryana, Uttarkhand have fixed the sugarcane price, which is higher than what is fixed by the Government of Karnataka, although the sugar recovery percentage in those States is lower than what it is in Karnataka. The submission on 87 behalf of the Government that the average sugar recovery in Karnataka has gone up from 10.36% in 2012-2013 to 10.97% in this year is also not being disputed by the petitioning sugar factories.
117. It is also not in dispute that the State Government has exempted the sugar factories from paying the purchase tax on sugarcane, road cess and value added tax on sugar amounting to `100/- per metric ton. If such exemptions are taken into account, the sugarcane price being paid by the sugar factories may work out to `2,400/- per metric ton.
118. It is also to be noticed that out of about 60 sugar mills in Karnataka, only eight mills have the grievance over the price fixation. The other sugar mills have no difficulty in paying the sugarcane price, as fixed by the Karnataka State Government under the 2013 Act.
119. The State Governments are not restrained from fixing the higher price for the sugarcane taking into account the ground realities and circumstances prevailing in each State. The sugar factories are in no position to show that the impugned 88 price is either excessive or unreasonable, while it may be possible for the sugarcane growing farmers to contend that the impugned price fixation is on the lower side.
120. The understanding of the petitioners in W.P.Nos. 54865-67/13 that the price fixation should be at the end of the season runs contrary to Section 9 of the 2013 Act, which requires the occupier of a sugar factory to pay the sugarcane price within 14 days to the sugarcane growers.
121. I am also not in a position to accept the submission urged on behalf of the sugar mills that sugarcane price is to be fixed as per the current price of sugar. Section 9 of 2013 Act requires the sugarcane factory to pay the price of the sugarcane within 14 days from the date of supply of sugarcane to the sugarcane growers. If the sugarcane price is to be fixed as per the current price of sugar, then the payment within 14 days cannot be ensured. Viewed from this angle also, taking of the price of sugar prevailing in the immediately preceding period for the fixation of sugarcane price at the commencement of crushing season cannot be found fault with. Besides, the price fixation is a continuous and an ongoing process. Section 3(8) of the 2013 89 Act prescribes that the Sugarcane Control Board shall meet thrice in a year - (i) before the commencement of crushing season (ii) after the closure of crushing season and (iii) at the end of sugar season. Further, the meetings can be convened as often as necessary.
122. The facts of the case on hand and of ISHAAN LABS PVT. LTD. (supra) are entirely different. In ISHAAN LABS PVT. LTD., the notifications fixing the drug prices were issued mechanically year after year. That is why the Division Bench was pleased to hold that a notification issued in a particular year does not hold good for the eternity and that too without obtaining the necessary inputs/information from the manufacturers.
123. It is trite that the Court cannot act as a Court of appeal over the question of price fixation. Price fixation is neither a function nor a forte of the Court. As held by the Apex Court in the case of Cynamide India Ltd. (supra), the assembling of data and mechanism of price fixation are the concerns of the executive. The Court is neither concerned with the policy nor with the rates. It is not within the Court's province to examine the price structure in minute detail, if it is satisfied that the price 90 fixation is not the result of the application of any wrong principle. In saying so, I am fortified by the Hon'ble Supreme Court's decision in the case of Kerala State Electricity Board (supra). The Court's scrutiny is confined only to one aspect:
whether the relevant considerations have gone in and the irrelevant considerations are kept out of the determination of price.
124. In the case of M/s.Shri Sitaram Sugar Co. Ltd. (supra), the Apex Court has held that the Court only examines as to whether the price fixation is with due regard to the factors provided by the statute. If the price fixation is not arbitrary and if the extraneous considerations are excluded from the price determination, the Court's intervention is not called for. The Court does not act like a Chartered Accountant or an Income Tax Officer. The price fixation is not within the province of the Court.
125. The second question is thus liable to be answered in the negative and accordingly it is answered.
126. The third question that falls for my consideration is whether the presence of non-members of the Sugarcane Control Board in its meeting has vitiated the decision-making process? 91 It is not in dispute that the Small Scale Industries Minister, Co- operative Minister and the experts who were not the members of the Sugarcane Control Board attended its meetings held on the material dates. It is also true that they expressed their support to the resolution for fixing the sugarcane price. They should not have been permitted to attend the Board meetings.
127. But the question is whether their participation in the meeting automatically renders the resolution of the Sugarcane Control Board liable to be quashed. The complaint over the presence of non-members has to be examined on the touchstone of prejudice. It is not shown that their presence has lead to the passing of the impugned resolution. The presence of non- members is not taken for the purpose of counting the votes. If no prejudice is caused to the person proceeded against, no interference of the Court is called for. An order can be invalidated, only if it is shown that a party has suffered the prejudice or injustice.
128. Further, it is to be noted that the representatives of the sugar factories did not object to the presence of the non- members in the meetings of the Sugarcane Control Board. They 92 have not sent any protest - note to the Member Secretary of the Sugarcane Control Board. In the peculiar facts and circumstances of the case and in the light of my answering question No.2 in the negative, I am not persuaded to quash the impugned price fixation on the ground of the presence of the non-members in the meetings of the Sugarcane Control Board.
129. In the case of PURTAP PORE CO. LTD. Ltd.
(supra), the Cane Commissioner had merely acted as a mouthpiece of the Chief Minister. As per the orders of the Chief Minister, he made the modification in the matter of reservation of the villages for the sugarcane factories. Further, it is also worthwhile to notice that the said modification was made unilaterally, that is without affording an opportunity to the concerned sugar factory to represent its case. The said reported decision has no application for the case on hand.
130. I am nextly left with the question of what relief can be given to the petitioning farmers in W.P.Nos.8145-8147/2014? As far as the demand of the farmers for the supply of subsidised fertilizers and for sanctioning the interest-free loans and their grievance over the delay in giving the permission for cutting the 93 sugarcane are concerned, they have to approach the competent authority/authorities by filing the appropriate representations.
131. In the result, W.P.Nos.54865-54867/2013, 55958/2013, 21982/2014 and 26523-26525/2014 are dismissed with a direction to the petitioning sugar factories to pay the sugarcane dues, as fixed by the impugned notification, without any further delay. W.P.Nos.8145-8147/2014 are disposed of with the observations as made and the liberty as reserved in the preceding paragraph.
132. No order as to costs.
Sd/-
JUDGE MD/VGR/bvv/cm