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2010 Supreme(All) 1132

[2010(3) ADJ 721 (DB)]
ALLAHABAD HIGH COURT
BEFORE : ASHOK BHUSHAN AND VINEET SARAN, JJ.
CHINI MILL KARMCHARI SANGH ....Petitioner
Versus
STATE OF U.P. AND OTHERS ...Respondents
(Civil Misc. Writ Petition Nos. 39850 of 2009 and 47934 of 2008,
decided on 1st April, 2010)

Advocates:
Counsel :
Ashwini Kumar Misra for the Petitioner in Civil Misc Writ Petition No. 39850 of 2009 and Anoop Trivedi for the Petitioner in Civil Misc. Writ Petition No. 47934 of 2008, Jaideep Narain Mathur, Addl. Advocate General assisted by S.P. Kesharwani for the State and Dr. Y.K. Srivastava for the U.P. State Sugar Corporation Ltd.

Headnote:(A) Constitution of India, 1950—Schedule Seventh—List I, Entry 52 and List II, Entry 24—Industries (Development and Regulation) Act, 1951—Section 2—Once declaration is made by parliament, as envisaged in Entry 52 of List I—State legislature is denied from its legislative power under Entry 24 of List II—Act of 1951, which takes control of sugar industries, by virtue of Section 2—State legislature cannot legislate any law on sugar industries—Permitting State legislature to legislate to close scheduled sugar industries or to permit change of its land—Amounts to entrenchment in field occupied by Act of 1951—As such, any enactment made by State legislature regarding closure of those industries—Beyond powers of State legislature. [Paras 24, 45, 54 and 64]

       (B) U.P. Sugar Undertakings (Acquisition) (Amendment) Act, 2009—Section 2—U.P. Sugar Undertakings (Acquisition) Act, 1971—Sections 3-C and 3-D (as inserted by Amendment Act, 2009)—Provisions of Sections 3-C and 3-D—Providing for closure of Scheduled undertakings or Sugar Mills of Corporation and its subsidiaries—Are beyond powers of State legislative competence—As such, struck down—All consequential actions to such extent—Automatically fall on grand. [Paras 55, 56, 69 and 70]

       (C) U.P. Sugar Undertakings (Acquisition) (Amendment) Act, 2009—Section 2—U.P. Sugar Undertakings (Acquisition) Act, 1971—Sections 3-C, 3-A and 3-B (as inserted by Amendment Act, 2009)—Constitution of India, 1950—Schedule Seventh—List II, Entry 18—Provisions of Section 3-E—Within legislative competence of State—Not ultra-vires—Act of 2009 does not fall within Entry 18 of List II—Provisions of Sections 3-A and 3-B are also intra vires and not ultra vires—Act of 2009 is not a legislation pertaining to land. [Paras 43, 58, 59, 60 and 70]

       (D) Industries (Development and Regulation) Act, 1951—Sections 18-A and 18-AA—Notified order under these provisions—Even if not issued or any step for regulation and development of scheduled undertaking is not taken by Central Government—State legislature cannot legislate any enactment on filed occupied by Central Act. [Para 66]

       (E) Constitution of India, 1950—Articles 31-A, 31-A proviso, 19 and 14—U.P. Sugar Undertakings (Acquisition) (Amendment) Act, 2009—Preamble—Presidential assent under Article 31-A—Requirement of, for enactment of law providing for acquisition to estate or of any rights therein or for extinguishment or modification of such rights—Obtaining of—Not necessary for enactment of Amendment Act of 2009. [Para 68]

       

JUDGMENT

Hon’ble Ashok Bhushan, J.—These two writ petitions raising similar issues have been heard together and are being decided by this Common judgement. Pleadings in both the writ petitions are complete and with the consent of learned Counsel for the parties, the writ petitions are being finally decided.

2. We have heard Sri Ashwini Kumar Misra, Advocate for the petitioner in first writ petition and Sri Anoop Trivedi, Advocate has appeared for the petitioner in the second writ petition. Sri Jaideep Narain Mathur, learned Additional Advocate General assisted by Sri S.P. Kesharwani has appeared for the State respondents. Dr. Y.K. Srivastava has appeared on behalf of U.P. State Sugar Corporation Ltd.

3. For deciding both the writ petitions, it is sufficient to refer the facts and pleadings of the first writ petition i.e. writ petition No. 39850 of 2009 in detail and reference of some facts of second writ petition also. The second writ petition No. (PIL) 47934 of 2008 was filed earlier in point of time on 10.9.2008 praying for quashing the request for proposal for strategic sale of entire equity of the Government of U.P. in U.P. State Sugar Corporation Ltd. as issued on 8.9.2008. Prayer for quashing the Government Order dated 4.6.2007 was also made by which the State of U.P. has taken decision for privatisation/sale of units of U.P. State Sugar Corporation Ltd. The writ petition was entertained and an order dated 30.9.2008 was passed by which a direction was issued that no third party right shall be created till the next date of listing. During the course of hearing in the said writ petition, the Court was informed that an Ordinance was also issued on 29.9.2008. Subsequently, the petitioner was permitted to challenge the U.P. Sugar Undertakings (Acquisition) (Amendment) Ordinance, 2008 promulgated on 29.9.2008. The said Ordinance was subsequently replaced by U.P. Sugar Undertakings (Acquisition) (Amendment) Act, 2009. The petitioner was also permitted to amend the writ petition adding the prayer for declaring the Ordinance of 2008 as well as Act of 2009 as ultra-vires.

4. The first writ petition being writ petition No. 39850 of 2009 Chini Mills Karmchari Sangh v. State of U.P. and others has been filed on behalf of Chini Mills Karmchari Sangh, Mohiuddinpur Unit through its President. The petitioner’s case in the writ petition is that petitioner is a workers union duly registered under the Trade Union Act, 1926. The petitioner union is directly and adversely affected by privatization policy of the State as the same is prejudicial to the interest of the members of the petitioner union and is a gross infraction of existing and prevalent statutes as well as the Constitution of India. U.P. State Sugar Corporation Ltd. was incorporated as Government Company in accordance with the provisions of Section 607 of Companies Act, 1956. U.P. Sugar Undertakings (Acquisition) Act, 1971 was enacted by the State of U.P. to acquire private sugar mills of the State which were creating serious problems for cane growers and labourers. The Act was enacted with the object of renovating and rehabilitating the sugar mills and to carry out the improvements therein. The State of U.P. issued a Government Order dated 4.6.2007 by which a decision was taken to privatize/sale the sugar mills of the U.P. State Sugar Corporation Ltd. The Managing Director of U.P. State Sugar Corporation Ltd. was asked to submit proposal alongwith recommendation for privatization/sale of the sugar mills of U.P. State Sugar Corporation Ltd. After the Government Order dated 4.6.2007, request for proposal for strategic sale of entire equity of Government of U.P. in U.P. State Sugar Corporation Ltd. was issued on September 8, 2008. The State Government by a subsequent Government Order dated 14.11.2008 decided not to continue with the disinvestment by sale of its shares and the said process was annulled. An Ordinance was promulgated on 29.9.2008 namely U.P. Sugar Undertakings (Acquisit











































































































































































































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