# WEST U.P. SUGAR MILLS ASSOCIATION & ORS v. THE STATE OF UTTAR PRADESH & ORS

- **Citation:** [2020] 9 S.C.R. 530
- **Court:** Supreme Court of India
- **Decided:** 2020-04-22
- **Case number:** Civil Appeal No. 7508 of 2005
- **Bench:** Arun Mishra, Indira Banerjee, Vineet Saran, M. R. Shah, Aniruddha Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/west-u-p-sugar-mills-association-ors-v-the-state-of-uttar-pradesh-ors-34145
- **Pages:** 63

## Headnote

U.P. Sugarcane (Regulation of Supply and Purchase) Act,
1953 - s.16 - Authority of State of U.P. to fix the State Advised
Price (SAP) paid over and above the minimum price fixed by Central
Government - Matter referred by three Judge Bench having noted
conflict between two Constitution Bench judgments, Ch. Tika Ramji
& Others, Etc. v. The State of Uttar Pradesh & Others [1956] SCR 393
and U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills
Association and Others (2004) 5 SCC 430 - Held: Factual matrix and
the relevant provisions which fell for consideration in Tika Ramji
and in U.P. Coop. Cane Unions Federations case were altogether
different - Concept of fixation of minimum price by Central Govt.
vis-à-vis SAP to be fixed by State Government under the 1953 Act,
never fell for consideration in Ch. Tika Ram - While, in U.P. Coop.
Cane Unions Federations it was rightly held that there is no
inconsistency or repugnancy in fixing the remunerative/advised
price by the State Govt. and the "minimum price" fixed by Central
Govt. - And that if the price fixed by the State Govt. is higher than
that fixed by the Central Govt., there will be no inconsistency or
repugnancy as it is possible for both the orders to operate
simultaneously and to comply with both of them - View taken by the
Constitution Bench in U.P. Coop. Cane Unions Federations is the
correct law - No conflict between the two decisions in Tika Ramji
and U.P. Coop. Cane Unions Federations case - Matter not required
to be referred to a larger Bench of seven Judges - U.P. Sugarcane
(Regulation of Supply and Purchase) Order, 1954 - Sugarcane
(Control) Order, 1955 - Clause 3 - Essential Commodities Act, 1955
- s.3(2)(c) - Sugarcane (Control) Order, 1966 - Clause 3 -
Constitution of India - Art.254; List III of Seventh Schedule -
Interpretation of Statutes.
[2020] 9 S.C.R. 530
530
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Constitution of India - List III of Seventh Schedule - Entries
33 and 34 - Power to fix price of sugarcane - Held: By virtue of
Entries 33 and 34, List III, Seventh Schedule, both the Central
Government as well as the State Government have power to fix the
price of sugarcane - Central Government having exercised the power
and fixed the minimum price, the State Government cannot fix the
minimum price of sugarcane - However, it is always open for the
State Government to fix the advised price which is always higher
than the minimum price - U.P. Sugarcane (Regulation of Supply
and Purchase) Act, 1953 - s.16 - Sugarcane (Control) Order, 1966.
Sugarcane (Control) Order, 1966 - Held: 1966 Order issued
u/s.16, 1953 Act confers power upon the State Government to fix
the remunerative/advised price at which sugarcane can be bought
or sold - This price shall always be higher than the minimum price
fixed by Central Government - U.P. Sugarcane (Regulation of
Supply and Purchase) Act, 1953 - s.16.
U.P. Sugarcane (Regulation of Supply and Purchase) Act,
1953 - s.16 - If repugnant to s.3(2)(c), 1955 Act and Clause 3 of
1966 Order - Held: No - Essential Commodities Act, 1955 - s.3(2)(c)
- Sugarcane (Control) Order, 1966 - Clause 3.
Constitution of India - Art.254; List III of Seventh Schedule
- Repugnancy in laws - Held: Question of repugnancy in List III,
Seventh Schedule, where both the Union and the States have the
power to enact a law, arises only where there is an actual
irreconcilable conflict between the two laws.
Answering the reference, the Court
HELD: 1.1 From the legislative history and the relevant
provisions of Essential Commodities Act, 1955, U.P. Sugarcane
(Regulation of Supply and Purchase) Act, 1953, U.P. Sugarcane
(Regulation of Supply and Purchase) Order, 1954, Sugarcane
(Control) Order, 1955, Sugarcane (Control) Order, 1966 which
fell for consideration by this Court in the case of Tika Ramji and
U.P. Coop. Cane Unions Federations, it appears that as such there
has been a sea change in the law. [Para 9][562-C]
1.2 The question involved in Ch. Tika Ramji & Ors., etc.
v.

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SUPREME COURT REPORTS
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WEST U.P. SUGAR MILLS ASSOCIATION & ORS.
v.
THE STATE OF UTTAR PRADESH & ORS.
(Civil Appeal No. 7508 of 2005)
APRIL 22, 2020
[ARUN MISHRA, INDIRA BANERJEE, VINEET SARAN,
M. R. SHAH AND ANIRUDDHA BOSE, JJ.]
U.P. Sugarcane (Regulation of Supply and Purchase) Act,
1953 - s.16 - Authority of State of U.P. to fix the State Advised
Price (SAP) paid over and above the minimum price fixed by Central
Government - Matter referred by three Judge Bench having noted
conflict between two Constitution Bench judgments, Ch. Tika Ramji
& Others, Etc. v. The State of Uttar Pradesh & Others [1956] SCR 393
and U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills
Association and Others (2004) 5 SCC 430 - Held: Factual matrix and
the relevant provisions which fell for consideration in Tika Ramji
and in U.P. Coop. Cane Unions Federations case were altogether
different - Concept of fixation of minimum price by Central Govt.
vis-à-vis SAP to be fixed by State Government under the 1953 Act,
never fell for consideration in Ch. Tika Ram - While, in U.P. Coop.
Cane Unions Federations it was rightly held that there is no
inconsistency or repugnancy in fixing the remunerative/advised
price by the State Govt. and the "minimum price" fixed by Central
Govt. - And that if the price fixed by the State Govt. is higher than
that fixed by the Central Govt., there will be no inconsistency or
repugnancy as it is possible for both the orders to operate
simultaneously and to comply with both of them - View taken by the
Constitution Bench in U.P. Coop. Cane Unions Federations is the
correct law - No conflict between the two decisions in Tika Ramji
and U.P. Coop. Cane Unions Federations case - Matter not required
to be referred to a larger Bench of seven Judges - U.P. Sugarcane
(Regulation of Supply and Purchase) Order, 1954 - Sugarcane
(Control) Order, 1955 - Clause 3 - Essential Commodities Act, 1955
- s.3(2)(c) - Sugarcane (Control) Order, 1966 - Clause 3 -
Constitution of India - Art.254; List III of Seventh Schedule -
Interpretation of Statutes.
[2020] 9 S.C.R. 530
530
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Constitution of India - List III of Seventh Schedule - Entries
33 and 34 - Power to fix price of sugarcane - Held: By virtue of
Entries 33 and 34, List III, Seventh Schedule, both the Central
Government as well as the State Government have power to fix the
price of sugarcane - Central Government having exercised the power
and fixed the minimum price, the State Government cannot fix the
minimum price of sugarcane - However, it is always open for the
State Government to fix the advised price which is always higher
than the minimum price - U.P. Sugarcane (Regulation of Supply
and Purchase) Act, 1953 - s.16 - Sugarcane (Control) Order, 1966.
Sugarcane (Control) Order, 1966 - Held: 1966 Order issued
u/s.16, 1953 Act confers power upon the State Government to fix
the remunerative/advised price at which sugarcane can be bought
or sold - This price shall always be higher than the minimum price
fixed by Central Government - U.P. Sugarcane (Regulation of
Supply and Purchase) Act, 1953 - s.16.
U.P. Sugarcane (Regulation of Supply and Purchase) Act,
1953 - s.16 - If repugnant to s.3(2)(c), 1955 Act and Clause 3 of
1966 Order - Held: No - Essential Commodities Act, 1955 - s.3(2)(c)
- Sugarcane (Control) Order, 1966 - Clause 3.
Constitution of India - Art.254; List III of Seventh Schedule
- Repugnancy in laws - Held: Question of repugnancy in List III,
Seventh Schedule, where both the Union and the States have the
power to enact a law, arises only where there is an actual
irreconcilable conflict between the two laws.
Answering the reference, the Court
HELD: 1.1 From the legislative history and the relevant
provisions of Essential Commodities Act, 1955, U.P. Sugarcane
(Regulation of Supply and Purchase) Act, 1953, U.P. Sugarcane
(Regulation of Supply and Purchase) Order, 1954, Sugarcane
(Control) Order, 1955, Sugarcane (Control) Order, 1966 which
fell for consideration by this Court in the case of Tika Ramji and
U.P. Coop. Cane Unions Federations, it appears that as such there
has been a sea change in the law. [Para 9][562-C]
1.2 The question involved in Ch. Tika Ramji & Ors., etc.
v. The State of Uttar Pradesh & Ors. AIR 1956 SC 676 was
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
THE STATE OF UTTAR PRADESH & ORS.
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concerning the validity of the Uttar Pradesh Sugarcane
(Regulation of Supply and Purchase) Act, 1953 and notifications
dated 27.9.1954 and 9.11.1955 issued by the Government of Uttar
Pradesh thereunder. The notification dated 27.9.1954 was issued
in exercise of the powers/ conferred under sub-section 1(a) read
with sub-section 2(b) of Section 16 of the Act of 1953 which
provided that not less than 3/4 of the cane growers of the area of
operation of a Cane Growers Cooperative Society to be members
of the society. The occupier of the factory for which the area is
assigned shall not purchase or enter into an agreement to
purchase cane grown by a cane grower except through such Cane
Growers Co-operative Society. The notification dated 9.11.1955
which was issued in exercise of the powers conferred by section
15 of the Act of 1953, reserved or assigned to the sugar factories
mentioned in column 2 of the Schedule annexed to it, the cane
purchasing centers, with the authorities attached to them,
specified against them in column 3 for the supply of sugarcane
during the crushing season 1955-56. Thus, it is apparent that the
notification dated 27.9.1954 related to the agency of supply of
sugar cane to the factories and the notification dated 9.11.1955
related to the creation of the zones for particular factories were
questioned. [Paras 12, 13][577-G-H; 578-A-C]
1.3 This Court held that the State of Uttar Pradesh had the
legislative competence to enact the Act, and there was no
repugnancy of the Act of 1953 with the Act of 1951 or the Essential
Commodities Act, 1955. This Court upheld the validity of the
Act and notifications and also held that there was no unreasonable
restriction imposed. There was no violation of fundamental right
under Article 19(1)(f) and (g) and Article 31 of the Constitution.
The question of fixation of price by the State Government under
the Act of 1953 did not fall for consideration in Ch. Tika Ram.
This Court noted that the Uttar Pradesh Government had never
fixed the price of sugarcane to be purchased by the factories by
the time the decision was rendered. While examining the
repugnancy, passing reference has been made to the provisions
contained in the Act of 1954. During the pendency of petitions,
the Sugar Control Order, 1955, was issued on 27.8.1955, which
was referred to in the judgment. It was not even submission raised
or considered that the power of regulation under Section 16 of
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the Act would include the power to fix the advised price of
sugarcane. The concept of fixation of minimum price by Central
Government vis a vis to State Advised Price to be fixed by State
Government, never fell for consideration of this Court in the said
decision. The ratio of decision has to be considered in the light
of questions considered and answered. In Tika Ramji, it was held
that there was no repugnancy in the Act of 1953 with Act of 1955
or with the Act of 1951, and notifications which were impugned
did not infringe the fundamental rights. [Paras 15-17][578-G-H;
579-A-D]
1.4 Thus, the factual matrix and the relevant provisions
which fell for consideration before this Court in the case of Tika
Ramji and which fell for consideration by this Court in the case of
U.P. Coop. Cane Unions Federations were altogether different.
Clause 3 of 1955 Order empowered the Central Government to
fix "the price or the minimum price". The aforesaid Clause 3 of
1955 Order was under consideration by this Court in the case of
Tika Ramji. However, subsequently, 1955 Order has been
repealed by 1966 Order and Clause 3 of 1966 Order provides
that the Central Government may fix "the minimum price" of the
sugarcane. Therefore, when the legislature consciously deleted
the word "the price" and retained the power with the Central
Government to fix "the minimum price", some meaning has to
be given to such a deletion. The intention of the legislature is
also required to be considered when certain words in the
provisions of a statute are deleted or added and/or substituted.
In the case of Tika Ramji, this Court though specifically observed
and held that in the field of sugar and sugarcane, both, the
Parliament and the State legislature would have the concurrent
Jurisdiction as the same will fall under Entry 33 in the Concurrent
List of seventh Schedule. Considering the fact that the State
Government did not exercise the power of fixing the price, though
the powers were available and the Central Government fixed the
price/minimum price which came to be adopted by the State
Government, this Court in Tika Ramji's case held that in such a
situation there is no conflict and the question of repugnancy does
not arise. Therefore, as such there is no apparent conflict between
the decisions in Tika Ramji's case and U.P. Coop. Cane Unions
Federations, which require to be referred to a larger Bench of
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
THE STATE OF UTTAR PRADESH & ORS.
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seven Judges. Under clause 3 of the 1966 order, the minimum
price can be fixed. Under Clause 3A of the said order, as amended
in 1978, the agreed price is to be mentioned in the agreement,
which can be higher than the minimum price and not less than
that. Under Clause 3(2), no person shall sell or agree to sell
sugarcane to a producer of sugar or his agent, and no such
producer or agent shall purchase or agree to purchase sugarcane
at a price lower than that fixed under sub-clause (1). Thus, the
price fixed under Clause 3(1) has to be treated as a minimum
price. Under Clause 3(A), as inserted on 2.2.1978, agreement in
writing is required, and the price has to be paid as agreed to
within 14 days. [Paras 18, 19][579-D-H; 580-A-D]
1.5 Even otherwise and on merits, this Court is in complete
agreement with the view taken in the case of U.P. Coop. Cane
Unions Federations, which lays down that 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. [Para 20][580-E-F]
1.6 Question of repugnancy under Article 254 of the
Constitution:
Concerning laws in List III of the Seventh Schedule of the
Constitution of India, where both the Union and the States have
the power to enact a law, the question of repugnancy arises only
in a case where there is an actual irreconcilable conflict between
the two laws. Inconsistency between the two laws is irreconcilable,
then the question of repugnancy arises. It is necessary to find
the dominant intention of both the legislatures, partial or incidental
coverage of the same area in a different context, and to achieve a
different purpose, does not attract the doctrine of repugnancy.
Clause (1) of Article 254 of the Constitution gives primacy to
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central legislations in case of conflict with State laws whether
enacted before or after. The central law operates only in case of
repugnancy and not in a case of mere possibility when such an
order might be issued under state law. [Paras 20.1, 20.3][580-GH; 581-A; 584-C-D]
Rajiv Sarin v. State of Uttarakhand (2011) 8 SCC 708;
M. Karunanidhi v. Union of India (1979) 3 SCC 431 :
[1979] 3 SCR 254; Belsund Sugar Co. Ltd. v. State of
Bihar & Ors. (1999) 9 SCC 620 : [1999] 1 Suppl. SCR
146; Punjab Dairy Development Board & Anr. v.
Cepham Milk Specialities Ltd. & Ors. (2004) 8 SCC
621; Southern Petrochemicals Industries Ltd. v.
Electricity Inspector and ETIO & Ors. (2007) 5 SCC
447 : [2007] 6 SCR 955; Bharat Hydro Power
Corporation Ltd. & Ors. v. State of Assam & Anr. (2004)
2 SCC 553 : [2004] 1 SCR 284 - relied on.
1.7 In U.P. Cooperative Cane Unions Federations,
Constitution Bench has rightly opined that under section 16 of
the Act of 1953, there is the power to fix a price with State, which
is State advised price. It cannot be said that the Central legislation
occupies the field, the Essential Commodities Act, 1955, and the
Order of 1966 issued thereunder deals with minimum price. The
Central Government has the power to fix the minimum price in
clause 3. The State Government is not denuded of the power
under the Act of 1953 to fix the "State Advised Price" under
section 16 as held in U.P. Cooperative Cane Unions Federations.
The power to regulate includes the power to fix the price. But
State advised price has to be higher than the minimum price fixed
by Central Government. In a given case, the SAP price may be
an agreed price. But the exercise of the power under section 16
of the Act of 1953 to fix State Advised Price, cannot be said to be
irreconcilable with the minimum price fixation under section
3(2)(c) of the Essential Commodities Act, 1955 and clause 3 of
the Sugarcane (Control) Order, 1966. The power of fixation of
State advised price under section 16 of the Act of 1953 cannot be
said to be arbitrary or illegal in any manner. [Paras 20.4][584-EH; 585-A]
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
THE STATE OF UTTAR PRADESH & ORS.
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1.8 This Court took into consideration the effect, scope
and impact of Section 16 under the Act. This Court considered in
detail Section 16 of the Act - the provision to regulate purchase
and supply of sugarcane in the reserved and assigned area, under
which the State Government is vested with the power to regulate
the distribution, sale or purchase of sugarcane in any reserved
or assigned area and purchase of cane in any area other than a
reserved or assigned area by issuing an order to that effect.
Thereafter, this Court has held that the power to regulate includes
the power to fix the SAP. This Court has also specifically observed
and held that there was no repugnancy. This Court took into
account the relevance, importance, purpose and object, its impact,
implication and reasons for enacting Section 16 of the Act and
after taking into account all the relevant considerations this Court
has specifically held that the SAP is a price higher than that
determined by the Central Government which is known as
Statutory Minimum Price (SMP). Thus, in the case of U.P.
Cooperative Cane Unions Federations, this Court has specifically
upheld the power of the State Government to fix the SAP under
Section 16 of the Act. [Paras 20.4.2, 20.4.3][585-D-G]
1.9 The following factors are the relevant facts for
determination of SAP.
(i) The cost of cultivation of sugarcane.
(ii) The cost of transport of sugarcane by cane growers from
the field to purchase center or to mill gate as the case may be.
(iii) A reasonable return on the aforesaid amount of his
produce to cane growers.
(iv) Availability of the cane area, demand of sugarcane by
industries, profitability of the industries by selling sugar, and other
bye products etc.
(v) The price of sugarcane paid by sugar factories in the
proceeding year.
(vi) The factors necessary to avoid diversion of sugarcane
from sugar industries to other consumers like Kolhu and
Khandsari Units.
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It appears that determination and fixation of the SAP is a
Cabinet decision which has been fixed after considering several
factors, including the cost of cultivation/production of the
sugarcane etc. and after taking into consideration the relevant
factors as above and including increasing of national economic
growth, cost of production of sugarcane, increase in the cost of
seeds, fertilizers, labour charges, irrigation etc., including the
profit earned by sugar factories from the produces from byeproducts, power projects etc. Thus it appears that authority is
guided by all relevant factors while determining such price - SAP.
[Para 20.5][585-H; 586-A-E]
1.10 In the 1966 Order the word "the price" has been
deleted and Clause 3 of 1966 Order provides that the Central
Government may fix "the minimum price" of the sugarcane to be
paid by the producer of sugar. There is a difference between "the
price" and "the minimum price". The aforesaid shall be apparent
from the relevant Clauses of the 1966 Order. The provision of
State advised price has been made to protect the interests of the
sugarcane growers who are not in a position to negotiate. Clause
3(1) empowers the Central Government to fix the minimum price
of sugarcane to be paid by the producers of sugar or their agents
for the sugarcane purchased by them. Clause 3(2) provides that
no person shall sell or agree to sell sugarcane to a producer of
sugar or his agent, and no such producer or agent shall purchase
or agree to purchase sugarcane, at a price lower than that fixed
under sub-clause (1). As per Clause 3(3), where a producer of
sugar purchases any sugarcane from a grower of sugarcane or
from a Sugarcane-grower's Co-operative Society, the producer
shall, unless there is an agreement in writing to the contrary
between the parties, pay within fourteen days from the date of
delivery of the sugarcane to the seller or tender to him the price
of the cane sold at the rate agreed to between the producer and
the sugarcane- grower or Sugarcane- growers' Co-operative
Society or that fixed under sub-clause (1), as the case may be.
Clause (3-A) provides that a producer of sugar or his agent shall
pay, for the sugarcane purchased by him, to the sugarcane grower
or the sugarcane growers' coopearative society, either the
minimum price of sugarcane fixed under Clause 3, or the price
agreed to between the producer or his agent and the sugarcane
grower or the sugarcane growers' cooperative society, as the
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
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case may be (agreed price). Agreed Price to be paid under the
Agreement may be even SAP fixed and/or determined by the State
Government. Clause (5-A) provides that where a producer of
sugar purchases sugarcane, from a sugarcane-grower during each
sugar year, he shall be liable to pay, in addition to the minimum
sugarcane price fixed under Clause 3, an additional price. Subclause (2) of Clause 5-A authorizes the appropriate authority to
determine the additional price. Sub-clause (5) further provides
that no additional price determined under sub-clause (2) or subclause (3) is required to be paid by a producer of sugar who pays
a price higher than the minimum price fixed under Clause 3 to
the sugarcane-grower, provided that, "the price so paid is not
less than the total price comprising the minimum sugarcane price
fixed under Clause 3 and the additional price determined under
sub-clause (2) or sub-clause (3)." [Paras 20.7, 20.7.1, 20.7.2][588A-C; 589-E-H; 590-A-D]
Sukhnandan Saran Dinesh Kumar & Ors. v. Union of
India & Ors. (1982) 2 SCC 150 : [1982] 3 SCR 371 -
relied on.
1.11 The State has the competence to determine and fix
the State Advised Price fixed under section 16 and therefore
fixation of SAP by the State Government cannot be said to be
beyond the purview of legislative competence. Once the fixation
of State Advised Price has been done, the Cane Commissioner
can direct the parties to follow the same as held in U.P.
Cooperative Cane Growers Federation. It cannot be said that
fixation of price under the regulatory measure provided in section
16 suffers from arbitrariness, nor can it be termed to be
uncanalised power. Considering the entire scheme of 1966 Order,
it provides for "the minimum price" and "the additional price"
or "the advised price". Considering the aforesaid provisions
under 1966 Order, there cannot be any sugarcane price (advised
price) below "the minimum price". As per the agreement entered
into the "advised price" necessarily had to be higher than the
"minimum price". Thus, there is a difference between "the price"
and the "the minimum price". As per Clause 3 of 1966 Order, it
empowers the Central Government to fix the "minimum price"
and the State Government is authorized to fix the Advised Price
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which as observed hereinabove is always higher than the
"minimum price" fixed by the Central Government.
[Paras 21, 22][590-E-H; 591-A]
1.12 Thus, it is held that the view taken by the Constitution
Bench of this Court in the subsequent decision in the case of
U.P. Coop. Cane Unions Federations is the correct law. There is
no conflict between the two decisions of this Court in the case of
Tika Ramji and in the case of U.P. Coop. Cane Unions Federations
and therefore, there is no necessity to refer the matter to the
larger Bench consisting of seven Judges. Final conclusions are
as under:
a. By virtue of Entries 33 and 34 List III of seventh
Schedule, both the Central Government as well as the State
Government have the power to fix the price of sugarcane.
The Central Government having exercised the power and
fixed the "minimum price", the State Government cannot
fix the "minimum price" of sugarcane. However, at the same
time, it is always open for the State Government to fix the
"advised price" which is always higher than the "minimum
price", in view of the relevant provisions of the Sugarcane
(Control) Order, 1966, which has been issued in exercise
of powers under Section 16 of the U.P. Sugarcane
(Regulation of Supply and Purchase) Act, 1953;
b. The Sugarcane (Control) Order, 1966 which has been
issued under Section 16 of the U.P. Sugarcane (Regulation
of Supply and Purchase) Act, 1953 confers power upon the
State Government to fix the remunerative/advised price at
which sugarcane can be bought or sold which shall always
be higher than the minimum price fixed by the Central
Government;
c. Section 16 of the U.P. Sugarcane (Regulation of Supply
and Purchase) Act, 1953 is not repugnant to Section 3(2)(c)
of the Essential Commodities Act, 1955 and Clause 3 of
the Sugarcane (Control) Order, 1966 as, as observed
hereinabove, the price which is fixed by the Central
Government is the "minimum price" and the price which is
fixed by the State Government is the "advised price" which
is always higher than the "minimum price" fixed by the
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
THE STATE OF UTTAR PRADESH & ORS.
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Central Government and therefore, there is no conflict. It
is only in a case where the "advised price" fixed by the
State Government is lower than the "minimum price" fixed
by the Central Government, the provisions of the Central
enactments will prevail and the "minimum price" fixed by
the Central Government would prevail. So long as the
"advised price" fixed by the State Government is higher
than the "minimum price" fixed by the Central Government,
the same cannot be said to be void under Article 254 of the
Constitution of India.
d. The view taken by the Constitution Bench of this Court
in the case of U.P. Cooperative Cane Unions Federations
vs. West U.P. Sugar Mills Association and Others is the
correct law. [Para 23][591-D-H; 592-A-F]
U.P. Cooperative Cane Unions Federations v. West U.P.
Sugar Mills Association and Others (2004) 5 SCC 430:
[2004] 2 Suppl. SCR 238 - held correct law.
Ch. Tika Ramji & Others, Etc. v. The State of Uttar
Pradesh & Others AIR 1956 SC 676 : [1956] SCR
393; State of Orissa v. M.A. Tulloch & Co. [1964] 4
SCR 461; Dr. Preeti Srivastava v. State of M.P. (1999)
7 SCC 120 : [1999] 1 Suppl. SCR 249 - referred to.
Case Law Reference
[1956] SCR 393
referred to
Para 1
[2004] 2 Suppl. SCR 238
held correct law
Para 1
[1964] 4 SCR 461
referred to
Para 6.2
[1979] 3 SCR 254
relied on
Para 6.2
[1999] 1 Suppl. SCR 249
referred to
Para 7.2
(2011) 8 SCC 708
relied on
Para 20.1
[1999] 1 Suppl. SCR 146
relied on
Para 20.3
(2004) 8 SCC 621
relied on
Para 20.3
[2007] 6 SCR 955
relied on
Para 20.3
[2004] 1 SCR 284
relied on
Para 20.3
[1982] 3 SCR 371
relied on
Para 20.7.1
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CIVIL APPELLATE ORIGINAL JURISDICTION: Civil Appeal
No. 7508 of 2005.
From the Judgment and Order dated 07.10.2004 of the High Court
of Judicature at Allahabad in Civil Misc. Writ Petition No. 26291 of
2004.
C.A. Nos. 7509-7510 of 2005, 150 of 2007, 2664 of 2007, 4026 of
2009, 4014-4023 of 2009, 4024 of 2009, 4025 of 2009, 3911-3912 of
2009, 3925 of 2009, 3996-3997 of 2009, 4764 of 2009, CONMT. PET.
(C) Nos. 169 of 2006, 254 of 2007, 253 of 2007 in C.A. Nos. 7508/2005
SLP (C) Nos. 18681 of 2008, 19183 of 2008, 20206 of 2008, 20205 of
2008, 21576-21581 of 2008, 21585-21587 of 2008, 23202 of 2008, 26026
of 2008, Contempt Petition (C) Nos. 263-264 of 2008, 267-268 of 2008
in CA Nos. 3996-3997/2009 and 265-266 of 2008, T.C. (C) No. 96 of
2013.
Jayant Bhushan, Krishnan Venugopal, Sr. Advs., Mahesh Agarwal,
Shubham Kulshreshtha, Yojit Mehra, Amartya Bhushan, Narender
Kumar Verma, Ms. Malvika Kapila, Apoorv Khator, Tushar Bhushan,
Amritya Bhushan, Ms. Anushree Menon, Mithun S., Vikas Mehta, E. C.
Agrawala, Rohit K. Singh, Uday Tiwary, P. N. Razdan, Mirza Kayesh
Begg, Ms. Saloni Tangri, Ms. Anshruta Maheshwari, Navpreet Singh
Ahluwalia, Salil Seth, Anuj Dhingra, Neeraj Malik, Umesh Kumar
Khaitan, Syed Shahid Husain Rizvi, Sanjeev Kumar Singh, Zeeshan Rizvi,
Ms. Anas Rizvi, Syed Imtiyaz Ali, Piyush Beriwal, Padmesh Mishra,
D. L. Chidananda, Ms. Binu Tamta, Nikhil Rohatgi, Arkaj Kumar,
Amlendu Jha Kumar, Sandeep Lala, Raj Bahadur, Pratap Venugopal,
Ms. Surekha Raman, Akhil Abraham Ray, Vijay Valsan (for M/s K. J.
John & Co.), Ajay Majithia, Satyajit A. Desai, Ms. Anagha S. Desai,
Sumit Goeol, Ishan Nagar, Manu Bajaj, Raghav Bansal, Ms. Nikita
Pandey (for M/s. Parekh & Co.), Amol Chitale, Ms. Pragya Baghel,
G .N. Reddy, T. Vijaya Bhaskar Reddy, Digvijay Harichandan, Ms. Ruby
Singh Ahuja, Vishal Gehrana, Nakul Gandhi, Shravan Sahny, Mrs. Manik
Karanjawala (for M/s Karanjawala & Co.), Vikash S. Wagmare, Hitesh
Kumar Sharma, Akhileshwar Jha, Ms. Meenakshi S., Praveen Kumar,
Mr. Gunnam Venkateswara Rao, Y. Raja Gopala Rao, Y. Vismai Rao,
Prashant Kumar (for M/s. Ap & J Chambers,), P. N. Gupta, Parijat
Sinha, Vishnu Sharma, Ms. Anupama Sharma, V. P. Pathak, Kumar
Prasoon Ranjan, Dr. Abhishek Atrey, Ms. Ambika Atrey, Ms. Vidyottma,
S. S. Ray, Ms. Rakhi Ray, Amar Dave, P. S. Sudheer, Rishi Maheshwari,
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
THE STATE OF UTTAR PRADESH & ORS.
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Mrs. Mayuri Nayyar Chawla, Ms. Anne Mathew, Bharat Sood,
Ms. Shruti Jose, Vishwajit Singh, Akshat Kumar, Gaurav Agrawal, Pankaj
Gupta, Pradeep Misra, Mrs. Bina Gupta, Jatinder Kumar Bhatia, K. R.
Sasiprabhu, Vishnu Sharma, Ritesh Agrawal, Punit Dutt Tyagi, Abhishek
Atrey, Ms. C. K. Sucharita, Prashant Kumar, Siddhartha Chowdhury,
Mrs. V. D. Khanna, Bimal Roy Jad, V. K. Verma, Rohit K. Singh,
Ardhendumauli Kumar Prasad, Ambhoj Kumar Sinha, Ravi Prakash
Mehrotra, Mrs. Anil Katiyar, Praveen Kumar, P. K. Bhalla, T. Mahipal,
Akshat Kumar, P. I. Jose, Advs. for the appearing parties.
Petitioner-in-person.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Having noted that there is a clear conflict between the two
decisions of this Court, one in the case of Ch. Tika Ramji & Others,
Etc. vs. The State of Uttar Pradesh & Others [AIR 1956 SC 676 =
1956 SCR 393 = 1956 SCJ 625] and another subsequent decision in
the case of U.P. Cooperative Cane Unions Federations vs. West U.P.
Sugar Mills Association and Others [(2004)5 SCC 430], a three Judge
Bench of this Court has referred the matter to a larger Bench proposing
the following questions of law to be considered by the larger Bench,
preferably of a Bench consisting of seven Judges of this Court:
(1) Whether by virtue of Article 246 read with Schedule VII
List III Entry 33 of the Constitution the field is occupied by
the Central legislation and hence the Central Government
has the exclusive power to fix the price of sugarcane?
(2) Whether Section 16 or any other provision of the U.P.
Sugarcane (Regulation of Supply and Purchase) Act, 1953
confers any power upon the State Government to fix the
price at which sugarcane can be bought or sold?
(3) If the answer to this question is in the affirmative, then whether
Section 16 or the said provision of the U.P. Sugarcane
(Regulation of Supply and Purchase) Act, 1953 is repugnant
to Section 3(2)(c) of the Essential Commodities Act, 1955
and Clause 3 of the Sugarcane (Control) Order, 1966
[hereinafter referred to as "1966 Order"]? And if so, the
provisions of the Central enactments will prevail over the
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provisions of the State enactment and the State enactment
to that extent would be void under Article 254 of the
Constitution of India.
(4) Whether the SAP fixed by the State Government in exercise
of powers under Section 16 of the U.P. Sugarcane (Regulation
of Supply and Purchase) Act, 1953 is arbitrary, without any
application of mind or rational basis and is therefore, invalid
and illegal?
(5) Does the State Advised Price (for short "SAP") constitute a
statutory fixation of price? If so, is it within the legislative
competence of the State?
(6) Whether the power to fix the price of sugarcane is without
any guidelines and suffers from conferment of arbitrary and
uncanalised power which is violative of Articles 14 and
19(1)(g) of the Constitution of India?
2. The core issue is whether the State of U.P. has the authority to
fix the State Advised Price (SAP) [hereinafter referred to as "SAP"],
which is required to be paid over and above the minimum price fixed by
the Central Government?
3. At the outset it is required to be noted that in Tika Ramji case
(supra), a Bench of five Judges of this Court held as under:
(i)
That, section 16 of the U.P. Sugarcane (Regulation of Supply
and Purchase) Act, 1953 [hereinafter referred to as "1953
U.P. Act"] does not include the power to fix a price;
(ii)
That, the price of cane fixed by the U.P. Government only
mean the price fixed by the appropriate Government which
would be the Central Government, under Clause 3 of the
Sugarcane (Control) Order, 1955 [hereinafter referred to
as "1955 Order"];
(iii)
That, even the provisions in behalf of the agreement
contained in Clauses 3 and 4 of the U.P. Sugarcane
(Regulation of Supply and Purchase) Order, 1954
[hereinafter referred to as "1954 U.P. Order"] provided
that the price was to be the minimum price to be notified by
the Government subject to such deduction, if any, as may
be notified by the Government from time to time, meaning
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
THE STATE OF UTTAR PRADESH & ORS. [M. R. SHAH, J.]
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thereby the Central Government, the State Government not
having made any provision in that behalf at any time
whatsoever;
(iv)
That, there is no power to fix a price for sugarcane under
the U.P. Sugarcane Act or Rules and the Orders made
thereunder;
It is to be noted that in Tika Ramji case(supra), this Court did
not comment on whether a power which the State Government exercised
under Section 16 of the 1953 U.P. Act would be repugnant to the Central
legislation, since this Court found no such power exercised by the State
Government.
4. However, subsequently, another five Judges Bench of this Court
in the case of U.P. Coop. Cane Unions Federations (Supra) has
specifically gone into the question of repugnancy and held that the
inconsistency or repugnancy will rise if the State Government fixes a
price which is lower than that fixed by the Central Government. But, if
the price fixed by the State Government is higher than that fixed by the
Central Government, there will be no occasion for any inconsistency or
repugnancy as it is possible for both the orders to operate simultaneously
and to comply with both of them. A higher price fixed by the State
Government would automatically comply with the provisions of clause
3(2) of 1966 Order. Therefore, any price fixed by the State Government
which is higher than that fixed by the Central Government cannot lead
to any kind of repugnancy.
In the case of U.P. Coop. Cane Unions Federations (Supra),
this Court held that the State Government has power to fix the price
which may be higher than the minimum price fixed by the Central
Government.
This Court in the reference order observed that to the aforesaid
extent there is a difference of opinion and/or conflict.
5. We have called upon the learned Counsel appearing on behalf
of the respective parties to first address on whether in fact there is any
conflict between the decisions of this Court in the case of Tika Ramji
(Supra) and U.P. Coop. Cane Unions Federations (Supra) or not and
whether there is a need to refer the matter to a larger Bench of seven
Judges?
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6. Shri Jayant Bhushan, learned Senior Advocate appearing on
behalf of the appellants has submitted that this case raises the following
important issues.
(1)
Whether the State Government / Cane Commissioner has
any power or authority under the 1953 U.P. Act or the Rules
and the Orders made thereunder to fix the sugarcane price?
(2)
If the State of U.P. had such a power, would such legislation
be repugnant to the Central legislation i.e. Essential
Commodities Act and the 1966 Order?
(3)
Whether there is any conflict between the Constitution
Bench judgment of this Court in the case of Tika Ramji
(Supra) and in the case of U.P. Coop. Cane Unions
Federations (Supra)?
6.1 So far as the question No.1 is concerned, it is submitted that
the power to regulate the distribution, sale or purchase of cane under
Section 16 of the 1953 U.P. Act does not include the power to fix the
price. It is submitted that this aspect has been comprehensively dealt
with in the case of Tika Ramji (Supra) which analyzed the legislative
history of laws relating to sugar and sugarcane both Central and State
and came to the specific conclusion that the power reserved to the State
Government to fix the minimum price of sugarcane which existed in
U.P. Act 1 of 1938 was deleted from the 1953 U.P. Act since that power
was being exercised by the Centre under Clause 3 of Sugar and Gur
Control Order, 1950. Reliance is placed upon paragraph 34 of decision
in the case of Tika Ramji (Supra).
6.1.1 It is submitted that in the aforesaid decision it has specifically
been held that the 1953 U.P. Act or the Rules and the Orders made
thereunder made no provision for fixation of price of sugarcane
whatsoever and therefore, there was no question of repugnancy with
the Central law. It is submitted that in the case of U.P. Coop. Cane
Unions Federations (Supra), this Court did not quote paragraph 34
and relevant paragraphs of the decision in the case of Tika Ramji (Supra)
and erroneously holds that Tika Ramji (Supra) only held that the State
did not in fact exercise the power to fix the price.
6.1.2 It is submitted that the argument that Tika Ramji (Supra)
only hold that the State Government did not fix the price as this was
fixed for the first time in 1973, is totally misplaced. It is submitted that
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v.
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Tika Ramji case has specifically held that there was no power to fix the
price for sugarcane under the 1953 U.P. Act or the Rules and the Orders
made thereunder. It is submitted that although the judgment in Tika Ramji
(Supra) does not specifically quote section 16 of the 1953 U.P. Act, it is
clear from the judgment that every section and every Rule was examined
to see whether there was any power to fix cane price or any provision
relating to price of cane. It is urged that the only provision that was
found on detailed scrutiny of the 1953 U.P. Act and the Rules was Rule
94 which provided for a notice showing the minimum price fixed by the
Government, which was held by the Constitution Bench to mean price
fixed by the Central Government.
6.2 Now, so far as question No.2 is concerned, it is argued that
even if such a power exists under Section 16 of the 1953 U.P. Act, such
power would be totally repugnant to the power of Central Government
to fix the minimum price under Clause 3 of the 1955 Order and thereafter
under 1966 Order. It is submitted that although Tika Ramji case (supra)
has not commented on whether such a power with the State Government
would be repugnant to the Central Legislation, since it found no such
power exercised by the State Government, the majority in the later
Constitution Bench judgment in the case of U.P. Coop. Cane Unions
Federations (Supra) held that this would not be repugnant to the Central
Legislation. It is argued that basis for holding that there is no repugnancy
is that it is possible for both the orders to operate simultaneously and to
comply with both of them. It is argued that in the case of U.P. Coop.
Cane Unions Federations (Supra), subsequently it is held that any
price fixed by the State Government which is higher than that fixed by
the Central Government cannot lead to any kind of repugnancy. It is
argued that this conclusion and its use for determining repugnancy is
incorrect and contrary to the earlier Constitution Bench judgment including
in the case of Tika Ramji (Supra). It is argued that therefore this issue
also needs to be referred to a larger Bench to resolve the conflict. Reliance
is placed on some of the observations in the case of Tika Ramji (Supra);
in the case of State of Orissa vs. M.A. Tulloch & Co. [1964 (4) SCR
461] and in the case of M. Karunanidhi vs. Union of India [(1979)3
SCC 431].
6.2.1 It is argued that therefore there cannot be two minimum
prices, one fixed by the Central Government as minimum price and other
fixed by the State Government as SAP, which is also a minimum price.
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It is submitted that once the Centre has fixed a minimum price, any
other price whether minimum price or SAP would be repugnant to the
Centre's decision and the Centre's power and such power of the State
Government would therefore have to yield to the Central legislation under
Article 254 of the Constitution, both legislations being under the
Concurrent List.
6.3 It is urged that there is a direct conflict between the Constitution
Bench Judgment of this Court in the case of Tika Ramji (Supra) on
one hand and the later Judgment also of the Constitution Bench in the
case of U.P. Coop. Cane Unions Federations (Supra), which needs
to be referred to the larger Bench of seven Judges.
7. On the other hand, Shri Krishnan Venugopal, learned Senior
Advocate appearing on behalf of the State of U.P. has vehemently argued
that as such there is no apparent conflict between the two decisions of
Constitution Bench of this Court in the case of Tika Ramji (Supra) and
U.P. Coop. Cane Unions Federations (Supra). In support, he has made
the following submissions.
(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.