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SUPREME COURT OF INDIA
Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah, Aniruddha Bose, JJ.
WEST U.P. SUGAR MILLS ASSOCIATION & ORS. – APPELLANTS
VERSUS
THE STATE OF UTTAR PRADESH & ORS. – RESPONDENTS
Civil Appeal No. 7508 of 2005 with C.A. No. 7509-7510 of 2005, Conmt. Pet. (C) No. 169 of 2006 in C.A. No. 7508 of 2005, C.A. No. 150 of 2007, Conmt. Pet. (C) No. 254 of 2007 in C.A. No. 7508 of 2005, Conmt. Pet (C) No. 253 of 2007 in C.A. No. 7508 of 2005, C.A. No. 2664 of 2007, C.A. No. 4026 of 2009, C.A. No. 4014-4023 of 2009, C.A. No. 4024 of 2009, C.A. No. 4025 of 2009, C.A. No. 3911-3912 of 2009, C.A. No. 3925 of 2009, C.A. No. 3996-3997 of 2009, SLP (C) No. 18681 of 2008, SLP (C) No. 19183 of 2008 SLP (C) No. 20206 of 2008, SLP (C) No. 20205 of 2008 SLP (C) No. 21576-21581 of 2008, SLP (C) No. 21585-21587 of 2008, SLP (C) No. 23202 of 2008 SLP (C) No. 26026 of 2008, Contmp. Pet (C) No. 263-264 of 2008 in C.A. No. 3996-3997 of 2009, Contmp. Pet (C) No. 267-268 of 2008 in C.A. No. 3996-3997 of 2009, Contmp. Pet (C) No. 265-266 of 2008 in C.A. No. 3996-3997 of 2009, C.A. No. 4764 of 2009 and T.C. (C) No. 96 of 2013
Decided on : 22-04-2020
(A) Constitution of India – Article 246 read with Schedule VII List III Entry 33 – U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 – Section 16 – Power of Government to fix price of sugarcane – By virtue of Entries 33 and 34 List III of seventh Schedule, both Central Government as well as State Government have power to fix price of sugarcane – Central Government having exercised power and fixed “minimum price”, State Government cannot fix “minimum price” of sugarcane – However, it is always open for State Government to fix “advised price” which is always higher than “minimum price” – Sugarcane (Control) Order, 1966 which has been issued under Section 16 of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 confers power upon State Government to fix remunerative/advised price at which sugarcane can be bought or sold which shall always be higher than minimum price fixed by Central Government – Section 16 of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 is not repugnant to Section 3(2)(c) of Essential Commodities Act, 1955 and Clause 3 of Sugarcane (Control) Order, 1966 – It is only in a case where “advised price” fixed by State Government is lower than “minimum price” fixed by Central Government, provisions of Central enactments will prevail and “minimum price” fixed by Central Government would prevail – So long “advised price” fixed by State Government is higher than “minimum price” fixed by Central Government, same cannot be said to be void under Article 254 of Constitution of India. (Para 23)
(B) Constitution of India – Article 246 read with Schedule VII List III Entry 33 – U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 – Section 16 – Power of Government to fix price of sugarcane – State Government is not denuded of power under Act of 1953 to fix “State Advised Price” under Section 16 – Power to regulate includes power to fix price – But State advised price has to be higher than minimum price fixed by Central Government – But exercise of power under Section 16 of Act of 1953 to fix State Advised Price, cannot be said to be irreconcilable with minimum price fixation under Section 3(2) (c) of Essential Commodities Act, 1955 and clause 3 of Sugarcane (Control) Order, 1966 – Power of fixation of State advised price under Section 16 of Act of 1953 cannot be said to be arbitrary or illegal in any manner – There is no conflict in exercise of powers by Central Government in fixing “minimum price” and in fixing “advised price” by State Government which is higher than “minimum price” fixed by Central Government – There is no inconsistency or repugnancy in fixing “advised price” or “remunerative price” by State Government and “minimum price” fixed by Central Government. (Paras 20.4 and 22)
(C) Constitution of India – Article 254 – Primacy of Central legislations – Inconsistency between two laws is irreconcilable, then question of repugnancy arises – It is necessary to find dominant intention of both legislatures, partial or incidental coverage of same area in a different context, and to achieve a different purpose, does not attract doctrine of repugnancy – Clause (1) of Article 254 of Constitution gives primacy to central legislations in case of conflict with State laws whether enacted before or after – 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 – There is a difference between “the price” and “the minimum price”. (Paras 20.1, 20.3 and 20.7)
Facts of the Case:
Core issue is whether the State of U.P. has the authority to fix the State Advised Price (SAP) which is required to be paid over and above minimum price fixed by the Central Government?
Findings of the Court:
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 fixation of State Advised Price has been done, the Cane Commissioner can direct the parties to follow the same. 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.
Result : Reference answered.
JUDGMENT
M. R. Shah, J.
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 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 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 Ju
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