Document Fragment View

Matching Fragments

(1) That, there is a sea change in the law prevailing and considered by this Court in the case of Tika Ramji (Supra) and thereafter in the case of U.P. Coop. Cane Unions Federations (Supra);

(2) That, by the time of the challenge to the 1953 U.P. Act and the 1954 U.P. Order made under Section 16 of the 1953 U.P. Act in the U.P. Coop. Cane Unions Federations (Supra), there was a fundamental change in the substratum on which Tika Ramji case was decided to the extent that the Central Government had repealed and substituted the 1955 Order by the 1966 Order. The 1966 Order issued under Section 3 of the Essential Commodities Act, 1955 expressly left room for the State to advise a price higher than the minimum price fixed by the Central Government under Clause 3(1) of the 1966 Order at which agreements for cane procurement could be reached between farmers or cooperative societies, especially in the context of the reservation of cane­growing areas for exclusive procurement by sugar factories.

a. That, the Central Government repealed and substituted the 1955 Order by 1966 Order;
b. That, in the 1966 Order issued under Section 3 of the Essential Commodities Act, from the word “price and the minimum price”, word “price” came to be deleted and the power to fix “minimum price” came to be retained;
c. Clause 3 of the 1955 Order empowered the Central Government to fix “price” or “minimum price” to be paid by the producer of sugar for sugarcane purchased by him. However, 1955 Order came to be repealed by the 1966 Order and Clause 3 of 1966 Order provides that the Central Government may fix the “minimum price” of sugarcane to be paid by the producers of the sugar;
d. That, 1966 Order came to be further amended in 1976 and 1978 and Clauses 3(3) and 3­A came to be introduced which now contemplates “agreed price”;
9.1 Considering the Clause 3 of the 1955 Order by which the Central Government was empowered to fix “price” or the “minimum price” which fell for consideration by this Court in the case of Tika Ramji (Supra) and as even the time when the matter was decided by this Court in the case of Tika Ramji (Supra), no price was determined and/or fixed by the State and therefore, having felt there is no repugnancy and/or conflict, this Court in the case of Tika Ramji (Supra) did not as such enter into the question of repugnancy. Therefore, as such in the case of Tika Ramji (Supra), this Court considered Clause 3 of 1955 Order which specifically empowered the Central Government to fix the “price or minimum price” and also considered that the State Government has not exercised the power by fixing the price and therefore, the question of conflict does not arise. However, in the case of U.P. Coop. Cane Unions Federations (Supra), this Court was considering the subsequent change in law more particularly the 1966 Order and Clause 3 of the 1966 Order and other relevant Clauses of 1966 Order.
4. That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field."

“37. Under Sub­section (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 Sub­clause (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 Sub­clause (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 Sub­clause (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.” “39. …..that under the 1966 Order the Central Government only fixes the minimum price and it is always open to the State Government to fix a higher price. Under the enactments made by the State Legislatures areas are reserved for the sugar factories and the cane­growers therein are compelled to supply sugarcane to them and therefore the State Government has incidental power to fix the price of sugarcane which will also be statutory price. They further lay down that the Cane Commissioner can direct the cane­growers and the sugar factories to enter into agreements for purchase of sugarcane at a price fixed by the State Government and such agreements cannot be branded as having been obtained by force or compulsion.” “43. One of the main reasons given by the High Court for allowing the writ petition and quashing the order of fixation of State Advised Price is that power to fix sugarcane price had been given to the State Government under the Sugarcane Act, 1934 and hence it would be redundancy to say that the same power to fix cane price also flows from Section 16 of the 1953 Act. The High Court has also held that when the 1953 Act was enacted there was already a law, viz., the Sugarcane Act, 1934, which enabled the State Government to fix the minimum cane price and hence, it could not have been the intention of the U.P. Legislature while enacting 1953 Act that Section 16 thereof would include the power to fix the minimum cane price as such a power was already there with the State Government under Section 3(2) of the Sugarcane Act, 1934. The High Court, therefore, concluded that Section 16 of the 1953 Act only gave power to the State Government to regulate the supply and purchase of sugarcane in the narrower sense and not in the wider sense so as to include the power to fix the minimum price. This reasoning of the High Court proceeds on the footing that the Sugarcane Act, 1934 was in existence and was in operation when the 1953 Act was enacted by U.P. Legislature. It appears that the correct legal position was not brought to the notice of the learned judges. The Sugarcane Act, 1934 was repealed by U.P. Sugar Factories Control Act, 1938 (UP Act 1 of 1938). Section 26 of U.P. Sugarcane (Regulation of Supply & Purchase) Act, 1953 repealed the U.P. Sugar Factories Control Act, 1938. With the enforcement of the Government of India Act, 1935, there was distribution of legislative powers between the Dominion Legislature and the Provincial Legislature and the entire subject matter of Sugarcane Act, 1934 fell within the Provincial Legislative list. It was in these circumstances that the U.P. Legislature enacted the U.P. Sugar Factories Control Act, 1938 which repealed the Sugarcane Act, 1934 in its application in the State of U.P. This position has been noticed in Tika Ramji v. State of U.P., SCR at pp. 400, 401 and 417. Therefore, the aforesaid reasoning given by the High Court has no legal basis.” “44. The second reasoning given by the High Court is that even if the State Government had the power to fix the minimum cane price under Section 16 of the 1953 Act, this power came to an end in view of Article 254(1) of the Constitution on the enactment of the EC Act and the promulgation of the Sugarcane Control Order, 1955 (later replaced by the 1966 Order), which now gives exclusive power to the Central Government to fix the minimum price. As discussed earlier we are not in agreement with the aforesaid reasoning as the question of repugnancy does not arise. The High Court has also held that the Central Government, while fixing the price of the sugar under Section 3(3­C) of the EC Act, takes into consideration the minimum price of sugarcane fixed under 1966 Order and if the sugar mills are compelled to pay a higher price than that fixed by the Central Government, it will disturb the price of the levy sugar and such an eventuality could not have been contemplated by the legislature. Over a period of time, the quota of levy sugar has gone down from 40 per cent to 10 per cent of the total production of sugar and the sugar mills are now free to sell 90 per cent of their production in open market. Under Section 3(3­C) of the EC Act, the Central Government has to determine the price of the levy sugar having regard to several factors enumerated in the sub­section and the minimum price fixed under 1966 Order is only one of the factors. The manufacturing cost of sugar and securing of reasonable return on the capital employed in the business of manufacturing sugar are also relevant factors under Clauses (b) and (d) of Section 3(3­) EC Act and, therefore, the fixation of higher price for sugarcane by the State Government by itself cannot have any major or substantial impact on the fixation of the price of the levy sugar by the Central Government.”