1. Cross-border sugarcane area reservation — whether state government can reserve area for factory in another state. (Para 3 )
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2011 Supreme(SC) 1545
SUPREME COURT OF INDIA
MARKANDEY KATJU, GYAN SUDHA MISRA, JJ.
Lakshmi Sugar Mill, Uttaranchal - Appellant
Versus
State of U.P. And Ors. – Respondents
Civil Appeal No(s). 5955 of 2005 with Civil Appeal No. 5956 of 2005, Civil Appeal No. 5957 of 2005, Civil Appeal No. 5958 of 2005
Decided On : 05-04-2011
Advocates Appeared:
For the Appellant : Mr. Rakesh Dwivedi, Sr. Adv., Mr. Vishwajit Singh, Adv., Mr. Abhindra Maheshwari, Adv., Mr. Nikhil Sharma, Adv., M/S. Parekh & Co., Adv., Ms. Niranjana Singh, Ms. Rachana Srivastava.
For the Respondents: Mr. Sudhir Chandr, Sr. Adv., Mr. Jayant Bhushan, Sr. Adv., Mr. Sanjeev Anand, Adv., Mr. Vikram Singh, Adv., Mr. Dibya Nishant, Adv., Mr. Shail Kumar Dwivedi, AAG., Mr. Ravi Prakash Mehrotra, Adv., Mr. Mukesh Verma, Adv., Mr. Vibha Tiwari, Adv.
For the Appellant : Mr. Rakesh Dwivedi, Sr. Adv., Mr. Vishwajit Singh, Adv., Mr. Abhindra Maheshwari, Adv., Mr. Nikhil Sharma, Adv., M/S. Parekh & Co., Adv., Ms. Niranjana Singh, Ms. Rachana Srivastava.
For the Respondents: Mr. Sudhir Chandr, Sr. Adv., Mr. Jayant Bhushan, Sr. Adv., Mr. Sanjeev Anand, Adv., Mr. Vikram Singh, Adv., Mr. Dibya Nishant, Adv., Mr. Shail Kumar Dwivedi, AAG., Mr. Ravi Prakash Mehrotra, Adv., Mr. Mukesh Verma, Adv., Mr. Vibha Tiwari, Adv.
The Court held that prima facie, if a sugar factory and the sugarcane area are in different states, reservations must be sought from the Central Government, not the State Government, to avoid administrative chaos, necessitating a larger bench's reconsideration of prior precedents.
Headnote:(A) Sugar Cane (Control) Order, 1966 - Clauses 6 and 11 - Essential Commodities Act - State Sugarcane Act - Section 15 - Reservation of sugarcane area across state boundaries - Power of the Central Government to reserve a sugarcane area for a particular factory and the delegation of such power to State Governments - Prima facie view that if a factory is located in one state and the sugarcane area is in another, the application for reservation must be made to the Central Government rather than the State Government to avoid administrative chaos (Paras 5, 6).
(B) Statutory Interpretation - Meaning of 'factory' and 'any area' in state legislation - Prima facie opinion that such terms implicitly refer to factories and areas within the jurisdiction of that specific state (Para 7).
Facts of the case:
The appeals arise from a challenge to a High Court judgment regarding the reservation of sugarcane areas. The central point of contention is whether a state authority can reserve a sugarcane cultivation area within its own state for the benefit of a factory situated in a different state, and vice-versa.
Findings of Court:
The court expressed reservations about a previous two-judge bench decision that permitted a state authority to reserve an area for a factory in another state. It tentatively held that such inter-state reservations should be handled by the Central Government, as delegating this to state governments could lead to chaos.
Issues: Whether a State Cane Commissioner or State Government has the authority to reserve a sugarcane area in its own state for a factory located in another state.
Ratio Decidendi: The authority to reserve sugarcane areas across state lines resides with the Central Government; state governments, even when exercising delegated powers, cannot reserve areas within their territory for factories outside their borders, as state laws implicitly refer to entities within their own jurisdiction.
Result: Papers placed before the Chief Justice of India for constituting a larger Bench.
Legal Category Hierarchy
Table of Contents
2. Appellant argued that Cane Commissioner can reserve area for factory in another state based on precedent; court doubted correctness. (Para 4 )
3. Court prima facie held cross-border reservation must be sought from Central Government; state power implicitly limited to its territory. (Para 5 , 6 , 7 )
4. State Government cannot reserve sugarcane area within its state for a factory in another state; such reservation requires Central Government action. (Para 6 , 7 )
5. Matter referred to larger Bench; interim order may be challenged before larger Bench. (Para 9 , 10 )
6. Can a State Government reserve sugarcane area within its territory for a factory located in another state under the Sugar Cane (Control) Order, 1966?
No, the court prima facie held that the party should approach the Central Government, as delegation to State Government does not extend to cross-border reservations. (Para 5 , 6 )
7. Does Section 15 of the U.P. Sugarcane Act, 1953 implicitly limit its operation to factories and areas within U.P.?
Yes, the court prima facie held that despite the absence of explicit words, it is implicit to avoid chaos. (Para 7 )
8. Should the two-judge decision in Purtabpore Co. Ltd. v. Cane Commissioner of Bihar be reconsidered?
Yes, the court expressed reservations about its correctness and directed placement before the Chief Justice for constituting a larger bench. (Para 4 , 8 , 9 )
ORDER :
1. Heard Learned counsel for the parties.
2. This appeal has been filed against the impugned judgment and order dated 11.05.2005 in CMWP No. 9105 of the High Court of Judicature at Allahabad.
3. The short question in this case is that where the sugar cane area is in U.P. but the factory is in Uttaranchal, can the Cane Commissioner, U.P. or State of U.P. reserve that area in U.P. for a factory in Uttaranchal, and vice-versa.
4. Mr. Rakesh Diwedi, learned counsel for the appellant relied upon a two Judge decision of this Court in The Purtabpore Co. Ltd. vs. Cane Commissioner of Bihar and others, 1969 (1) SCC 308 in which it has been stated in para 23 that the Cane Commissioner of Bihar can make a reservation of an area in Bihar for a factory in U.P. We have some reservations about the correctness of this view.
5. It may be noticed that in the Sugar Cane (Control) Order, 1966 which has been passed by the Central Government under the Essential Commodities Act it is provided in clause 6 that the Central Government may reserve a Sugar cane area for a particular factory. Clause 11 of that order permits delegation of that power of the Central Government to the State Government.
6. We are prima facie of the opinion that if a factory is in one State and sugarcane area is in another State then the person who wants reservation for his factory should approach the Central Government and not to the State Government to which power may have been delegated under Clause 11. In our prima facie opinion it will create chaos if it is held that the State Government of one State can reserve an area in its own State when the factory for which the reservation is done is in another State.
7. It may be noted that Section 15 of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 uses the words ’factory’ and not ’factory in U.P.’ Similarly, it uses the words ’any area’ and not ’any area in U.P.’ However, in our prima facie opinion it is implicit that these words mean factory and area in U. P., otherwise there may be chaos.
8. However, this is only our tentative opinion. We are of the opinion that the aforesaid two Judge Bench decision of this Court requires reconsideration.
9. Let the papers of this case be placed before Hon’ble the Chief Justice of India for constituting a larger Bench.
10. As regards the interim order passed in this case anyone who is aggrieved by that order may approach the larger Bench for modifying or vacating the order.
