JUDGMENT

R.M. SAHAI

(1) THESE are two sets of appeals filed by various Sahkari Sakkar Karkhanas, that is, Cooperative Societies of Sugarcane Growers, Private Undertakings, Joint Stock Companies producing sugar in the State of Maharashtra and the State itself being one, directed against direction by a full bench of the Bombay High court in Satara Sahakari Sakhar Karkhana Ltd. v. State of Maharashtra that the cane-growers who were not members of any Cooperative Society but who were required to supply their cane under reservation order or Control Orders to sugar factories with which they were attached were entitled to market price instead of price fixed by the government, and other directed against fixation of market price for 1993-94 by the High court at Rs. 740.00 as against Rs. 340.00 to Rs. 400.00 fixed by the government

(2) THE directions issued by the full bench are as under:

"WE are therefore of the view, that unless provisions for the following are made. in it, the State Order will not be valid- (i) The sugarcane-growers who are not members of the factory or factories to which they are required to supply their sugarcane shall be paid for the sugarcane supplied by them the price calculated at the market rate prevailing in the locality at the date of the sale; (ii) The market rate may be as agreed between the parties, namely, the sugarcane-grower and the factory or factories concerned. If there is any dispute over it, the same should be resolved by an independent authority which may be created under the Order such as the one under clause 12 of the present Order. The authority concerned should decide the dispute expeditiously after hearing the parties and by a speaking order; (iii) No unauthorised deductions on any account should be made by the factory from the price to be paid to the sugarcane-grower without his consent. The State Order should provide for a machinery similar to the above to hear and grant to the sugarcane-grower, expeditious relief if he has any complaint in that behalf."

The reasons for these directions were twofold, one, the non-members were not bound by the price fixed under bye-laws framed under the Cooperative Sugar Act and other that there was no machinery in the Zoning Order issued by the State government to hear the non-members before the price was fixed. Before examining whether these reasons are well founded in law leading to the impugned directions it is necessary to narrate in brief the necessity which impelled the central government to grant protection to sugar industry and consequently to control the supply and distribution of the sugarcane without sacrificing the interest of the cane-grower.

(3) SUGAR is an item of daily use in every household, rich or poor. Use of white sugar has increased with rolling of years, growth of population, rise in income etc. Today it is somewhere about 134 lakh tonnes. Even in 1931 the requirement was more than 9 lakh metric tonnes. But the production was nearly 1.8 lakh metric tonnes only. And there was an import of more than 8 lakh metric tonnes. The government, therefore, decided to grant protection to the sugar industry. The Bhargava Commission appointed by the central government in 1970 in Ch. I of Part I of its report has traced the growth and development of the sugar industry and observed that till 1930-31 there were only 29 sugar factories producing 1.22 lakh tonnes of sugar in the country. That was, however, not adequate to meet the internal requirement and nearly 8 lakh tonnes of sugar was imported in that year. In 1932 protection was granted to the sugar industry. Following this there was a phenomenal expansion of the industry and the number of sugar factories increased to III in 1933-34 and to 137 in 1936-37. The sugar import which was about 8 lakh tonnes in 1930-31 was almost stopped from 1936-37. Thereafter there was little development of the industry up to 1951-52. The development and regulation of the sugar industry came under the control of governme