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2008 Supreme(Pat) 1793
PATNA HIGH COURT
Chandramauli Kumar Prasad and Ravi Ranjan JJ.
Bihar Sugar Mills Association
Versus
State Of Bihar
Decided On : DECEMBER 22, 2008
Headnote:Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981-Section 42-Constitution of India-Articles 162 and 19(1)(g)-Quashing the order of Cane Commissioner fixing price of sugarcane at Rs.71/- and Rs. 75/- per quintal for its two different varieties to be purchased by Sugar Factory for crushing season 1996-97-Fixing price of sugarcane compulsorily payable to the sugarcane producers is nothing sort of putting restrictions on the fundamental right guaranteed under Article 19(1)(g) of the Constitution of India-Permitting State executive to exercise executive power curtailing citizens right, if abused, shall have dangerous consequences, difficult to fathom-It will have the potential of shattering the fundamental rights to pieces-Executive action, which operates to the prejudice of any person must have the authority of law to support it-The State executive cannot, while taking recourse to the executive power of the State under Article 162 of the Constitution deprive a person of his right to carry on trade and business-Such power, can be exercised only by authority of law and not by mere executive power or order-Order passed by the Cane Commissioner fixing price of sugar cane by the impugned order is absolutely illegal and quashed.
AIR 1967 SC 1170-Relied upon.
AIR 1955 SC 549; 1971(1) SCC 607; (1982)1 SCC 30-Distinguished.
(2004)5 SCC 430; (2004)4 SCC 580-Referred to.
Chandramauli Kumar Prasad, J.
1. In this writ application, prayer of the petitioner is for quashing the order dated 29th of November, 1996 (Annexure-1) issued by the respondent Cane Commissioner by which he for the crushing season 1996-97 has fixed the price of sugarcane at Rs. 71 and Rs. 75/-per quintal for its two different varieties to be purchased by the Sugar Factory.
2. Petitioner No. 1 Bihar Sugar Mills Association is an Association of the Sugar Factories in the State of Bihar and its object is to safeguard the interest of its members. Petitioner Nos. 2 to 11 are the members of petitioner No. 1, and companies owning sugar factories in the State of Bihar, producing sugar through vacuum pan process.
3. It is not in dispute that the State Government, in past, used to announce State advised cane price to be paid to the sugar producers. According to the petitioners in order to avoid any conflict with the State Government, it used to pay the State advised cane price to the sugar cane growers. According to the petitioners, for the crushing season 1996-97, the State advised cane price was exorbitantly higher and it was beyond their capacity to pay the price fixed by the impugned order of the Cane Commissioner. Accordingly, they filed the present writ application questioning the price fixation.
4. A Division Bench of this Court, by order dated 4th of February, 1997, allowed the writ application and held that the impugned order of the Cane Commissioner is illegal and invalid.
5. The State of Bihar and its officials aggrieved by the same, preferred appeal before the Supreme Court, which was registered as Civil Appeal No. 486 of 1997 State of Bihar v. Bihar Sugar Cane Mills Association. The appeal preferred by the State of Bihar and other appeals were taken up for hearing by the Supreme Court together and by a common order dated 5th of May, 2004, the aforesaid Judgment of this Court dated 4th February, 1997, has been set aside and the writ application remitted back to this Court for fresh consideration in accordance with law. The judgment of the Supreme Court finds reported in the case of U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and Ors., While setting aside the order of this Court, the Supreme Court has observed as follows (Para 160):
51. The State of Bihar has preferred this appeal by special leave against the judgment and order dated 4-2-1997 of the Patna High Court by which the writ petition preferred by Bihar Sugar Mills Association was allowed and the order dated 29-11-1996 passed by the Sugarcane Commissioner, Bihar, fixing the price of sugarcane for crushing season 1996-97 was quashed. For doing so, the High Court basically relied upon the provisions of the Sugarcane (Control) Order, 1966 Issued by the Central Government and also the judgment and order dated 11-12-1996 of the Allahabad High Court in West U.P. Sugar Mills Assn. v. State of U.P. The High Court did not examine the provisions of the Bihar Sugarcane (Regulation of Supply and Purchase) Act. 1981 in order to ascertain whether under the said Act the State Government has any power to fix the price of Sugarcane. We have set aside the judgment of the Allahabad High Court dated 11-12-1996. We are, therefore, of the opinion that the matter requires fresh consideration in the light of our decision in C.A. No. 460 of 1997 U.P. Co-op. Cane Unions Federation v. West U.P. Sugar Mills Assn. The appeal is accordingly allowed and the judgment and order dated 4-2-1997 of the High Court is set aside and the writ petition is remitted back to the High Court for fresh consideration in accordance with law. (Underlining ours)
6. This is how the matter has come up for consideration before us.
7. Mr. Y.V. Girl. Senior Advocate, appearing on behalf of the petitioners, submits that under Section 42 of the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981, hereinafter referred as the Act, the State Government has been conferred with
