important points
Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 is not ultra vires.
Section 3 of he Act is mandatory.
Clause (3) of the Government Order dated June 9, 2004, applies only to molasses which is in excess of and not used for captive consumption by sugar factory and is thus ‘balance stock’.
Interpretation of Statutes.

Headnote:(a)Constitution of India – Article 254(2) – Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 – Validity of the Act – The Act was within the legislative competence of the State and was not inconsistent with the Industries (Development and Regulation) Act, 1951, i.e. Central Act – Hence it was not ultra vires – Even otherwise, the Act having received the assent of the President as required by Article 254(2) of the Constitution, would operate.(Para 15)
       (b)Constitution of India – Article 226 – Once a policy decision has been taken by the Government, filing of appeal is virtually from ‘Caesar to Caesar’s wife’, an ‘empty formality’ or ‘futile attempt’ – In such cases, remedy of appeal cannot be termed as ‘alternative’, or ‘equally efficacious’ – The High Court was, therefore, right in overruling the preliminary objection raised by the respondents.(Para 16)
       (c)Uttar Pradesh Sheera Niyan-tran Adhiniyam, 1964 – Government Order dated June 9, 2004, clause (3) – Applies only to molasses which is in excess of and not used for captive consumption by sugar factory and is thus ‘balance stock’ – Therefore sugar mills were not bound to supply 20% molasses to the Authorities irrespective of stock possessed – Appellant not having excess stock of molasses – On the contrary, it has to import molasses from other sources even for its own requirement for manufacturing industrial alcohol being permitted by the Central Government as well as by the State Government – The case therefore does not fall within the mischief of clause (3) of the said order – Directive issued by the respondents would not apply in case there is no balance stock of molasses with any sugar mill.(Paras 20 and 46)
       (d)Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 – Section 3, and Clauses (a) and (b) of sub-section (2) of Section 22 r/w Rules 3 and 5, U.P. Molasses Advisory Committee Rules, 1965 – Constitution of an Advisory Committee was mandatory – It was obligatory on the Government to constitute a Committee to carry out the purpose and object of the Act.(Paras 28 and 45)
       (e)Interpretation of Statutes – Mere use of word ‘may’ or ‘shall’ is not conclusive – The question whether a particular provision of a statute is directory or mandatory cannot be resolved by laying down any general rule of universal application – Such controversy has to be decided by ascertaining the intention of the Legislature and not by looking at the language in which the provision is clothed; for which, the Court must examine the scheme of the Act, purpose and object underlying the provision, consequences likely to ensue or inconvenience likely to result if the provision is read one way or the other and many more considerations relevant to the issue – Such powers are generally in permissive language, such as, ‘it may be lawful’, ‘it may be permissible’, ‘it may be open to do’, etc. – In certain circumstances, however, when such power is ‘coupled with duty’ it must be exercised.(Paras 29 and 30)
       (1890) 44 Ch D 262; (1880) 5 AC 214 : 49 LJ QB 580 : (1874-80) All ER Rep 43 (HL); 1968 AC 997 : (1968) 1 All ER 694 : (1968) 2 WLR 924 (HL); (1911) 2 QB 1131; (1889) 60 LT 963; (1978) 3 SCR 198 : (1978) 2 SCC 573; 50 IA 227 : AIR 1923 PC 138; 1952 SCR 135: AIR 1952 SC 16; (1981) 1 SCR 97: (1980) 4 SCC 162 – Relied upon.
       Facts of the case:
       The appellant-M/s Dhampur Sugar Mills Ltd. is a Public Limited Company incorporated under the Companies Act, 1956 having its registered office at Dhampur (Bijnor). The appellant has sugar mill in the State of Uttar Pradesh and has also a distillery. The distillery manufactures ethyl alcohol, used for blending of petrol, manufacture of chemicals and rectified spirit for medicines. It is also having a similar business at Asmouli, District Moradabad, Mansurpur, District Muzaffarnagar and Rozagaon, District Barabanki. The writ petitioner approached the High Court against the respondents for quashing certain Government Orders said to have been passed by the Authorities under the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 [Act XXIV of 1964] directing the writ-petitioner to supply 20% of the molasses produced by the sugar mills for manufacturing ‘country made liquor’ by distilleries for the financial years 2003-04 and 2004-05. The writ petitioner also challenged consequential action of issuance of show cause notices as to why it should not be prosecuted for committing offences punishable under the Act since it has not complied with the orders issued by the Authorities and has not supplied 20% molasses for manufacturing country liquor.
       The High Court dismissed the writ petition.
       Findings of the Court:
       Constitution of an Advisory Committee u/s 3 of the Act is mandatory.
       Clause (3) of the Government Order dated June 9, 2004, applies only to molasses which is in excess of and not used for captive consumption by sugar factory and is thus ‘balance stock’.
       Result : Appeal allowed.

judgment

C.K. THAKKER, J. —

1.Leave granted.

2.The present appeal is directed against the judgment and final order passed by the Division Bench of the High Court of Judicature at Allahabad dated October 29, 2004 in Civil Miscellaneous Writ Petition No. 1369 of 2004. By the said order, the High Court dismissed the writ petition filed by the writ petitioner-appellant herein.

3.Facts in nutshell giving rise to the writ petition as well as present appeal may now be stated.

4.The appellant-M/s Dhampur Sugar Mills Ltd. (Company for short) is a Public Limited Company incorporated under the Companies Act, 1956 having its registered office at Dhampur (Bijnor). The appellant has sugar mill in the State of Uttar Pradesh and has also a distillery. The distillery manufactures ethyl alcohol, used for blending of petrol, manufacture of chemicals and rectified spirit for medicines. It is also having a similar business at Asmouli, District Moradabad, Mansurpur, District Muzaffarnagar and Rozagaon, District Barabanki The writ petitioner approached the High Court by invoking Article 226 of the Constitution against the respondents for issuance of appropriate writ, direction or order quashing certain Government Orders said to have been passed by the Authorities under the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 [Act XXIV of 1964] (hereinafter referred to as the Act) directing the writ-petitioner to supply 20% of the molasses produced by the sugar mills for manufacturing country made liquor by distilleries for the financial years 2003-04 and 2004-05. The writ petitioner also challenged consequential action of issuance of show cause notices as to why it should not be prosecuted for committing offences punishable under the Act since it has not complied with the orders issued by the Authorities and has not supplied 20% molasses for manufacturing country liquor. The main challenge of the writ petitioner was that though the Company was producing molasses, the entire production was required by the Company itself which was used for captive consumption and even that was not sufficient. The Company had, therefore, obtained permission from the Government for import of molasses from other States as also other Countries. Since the writ petitioner did not have balance or extra stock of molasses for being supplied to distilleries for manufacturing country-made liquor, the Authorities could not compel the writ petitioner to supply molasses as directed in various Government Orders and Letters. Such action was improper, illegal, arbitrary and unreasonable, inconsistent with the provisions of the Act as also violative of Articles 14 and 19(1)(g) of the Constitution. The action was also against public policy reflected in Article 47 of the Constitution. It was contended that since the above directives could not have been issued by the Authorities, issuance of show cause notices as to why the writ petitioner should not be prosecuted also were not legal and the prosecution should be quashed. It was also the case of the writ petitioner that the State Government ought to have constituted Advisory Committee under Section 3 of the Act.

5.The stand of the Government before the High Court was that in accordance with the provisions of the Act and the Uttar Pradesh Sheera Niiyantran Niyamavali, 1974 (hereinafter referred to as the Rules), it was open to the Authorities to ask the writ petitioner to supply 20% molasses for the purpose of manufacturing country liquor. As the said action was in consonance with law, the Company was bound to supply 20% molasses for the said purpose and the action could not be termed as illegal or unlawful.

6.It was also contended by the respondents that an alternative and equally efficacious remedy of filing an appeal under Section 9 of the Act was available to the Company and hence writ petition was not maintainable.

7.As to Article 47 of the Constitution, the case of the State Government was that the point was finally concluded by a decision of this

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2007 Supreme(SC) 1240

Cases Referred (6)