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1997 Supreme(SC) 59

1997(2) Supreme 290
SUPREME COURT OF INDIA
K. Ramaswamy, S. Saghir Ahmad & G.B. Pattanaik, JJ.
S.K.G. Sugar Ltd. -Appellant
versus
State of Bihar & Ors. -Respondents
Civil Appeal Nos. 488-489 of 1985
Decided on 15-1-1997
Counsel for the Parties :
For the Appearing Parties : Y.V. Giri and D.D. Thakur, Sr. Advs., Jyoti Saran, Praveen Kumar, Ms. Vijay Lakshmi Menon, Sunil Gupta, Mrs. A.K. Verma, P.D. Tyagi, D. Goburdhan, D.N. Gourdhan, Ms. Pinky Anand, Ms. Geeta Luthra, B.B. Singh, Ashok Kr. Singh, Ms. Subhashini, A. Sharan, Gopal Singh, A.P. Singh, L.R. Singh, V. Shekhar, V.D. Mahajan, P.R. Seetharaman, B. Parthasarathy, Ms. Rani Chhabra, Sanjiv Seth, M.A. Krishna Moorthy, Advocates.

Headnote:Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981-Section 31-Sugarcane (Control) Order, 1966-Clause 3-Central Government determined minimum price for sugarcane at Rs. 13.92 per quintal-State Govt. announced price of sugarcane at Rs. 20.50 per quintal-Price fixed by State Government challenged as without authority of law and jurisdiction-There was an agreement by Sugar Factory Owners Association with sugarcane growers wherein price to the sugarcane at Rs. 20.50 per quintal was agreed to be paid-Meeting was convened by the State Government when agreement was reached-State Govt. acted in their statutory capacity to fix increased price of sugarcane-Recovery proceedings under Revenue Recovery Act were appropriate course.

       

ORDER

These two appeals arise from the judgment of the Division Bench of the Patna High Court, made on November 13, 1984 in Order No. 11 and Review Order arising thereunder in CWJC No. 2370/84.

The admitted position is that the appellant factory had a reserved area under Section 31 of the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (for short, the Supply Act ) and had the sugarcane supplied by the growers. The Central Government, exercising the power under Clause 3 of the Sugarcane (Control) Order, 1966 (for short, the Order ) determined the minimum price for sugarcane at Rs. 13.92 per quintal. The State Government announced on March 31, 1983 the price of Sugarcane at Rs. 20.50 per quintal. The cane growers supplied the sugarcane to the appellant, but the appellant admittedly had paid the minimum price determined under the Order but the difference between the price fixed under the Order and the price announced by the State Government was not paid. As a consequence, the Collector gave a certificate of dues for realisation under the Revenue Recovery Act. Calling those proceedings in question, the writ petition came to be filed. The contention raised in the High Court as well as in this Court is that the Central Government having determined the price of the sugarcane at Rs. 13.92 per quintal, the State Government was devoid of power to fix the price at Rs. 20.50 per quintal and, therefore, the Collector has no power to issue the certificate of arrears; since what is due is the price fixed under the Order which has already been paid, there is no due in accordance with law.

She Y.V. Giri, learned counsel for the appellant, has contended that Section 42 of the Supply Act prescribes only the power for fixation of the price in respect of the units, namely, Khandasari Unit or any unit manufacturing sugar under open pan process. Under the proviso, the Government have not power to fix higher price of sugarcane supplied to sugar factory than that is fixed for the Khandasari units. The fixation of the price at Rs. 20.50 per quintal is without any authority of law or jurisdiction. For a certificate proceeding what is required to be proceeded is the due in accordance with law but not in accordance with any order passed by the State Government. The dues in accordance with the price fixed under Clause 3 of the Order having been paid, the appellant is not due of any sugarcane price payable to the cane growers and, therefore, the view taken by the High Court is not correct in law. Even if there are dues, the same could be recovered in a suit by the growers. We find no force in the contentions.

Sub-clause (1) of Clause 3 of the Order provides thus :

"The Central Government may, after consultation with such authorities, bodies of associations as it may deem fit, by notification in the Official Gazette, from time to time, fix the minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them, having regard to... Provided that the Central Government or, with the approval of the Central Government, the State Government, may, in such circumstances and subject to such conditions as it may specify, allow a suitable rebate in the price so fixed."

It is seen that what is postulated under Clause 3 of the Order is the fixation of the minimum price payable to the cane growers for the sugarcane supplied by them and purchased by a sugar factory or its agents. Equally, Clause 5A prescribes payment of additional price consistent with the returns had by the factory. Clause 3A equally provides rebate that can be given in respect of the price for sugarcane. A reading of these relevant Clauses in the Order does not show that there is any prohibition on the factory or the association of the factories entering into an agreement to pay higher price than the minimum price prescribed under the Order. The object of the Order is to ensure that the cane growers should not be compelled to sell their sugarcane a













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