West UP Sugar Mills Association v. State of Uttar Pradesh (2020 SCC OnLine SC 380)

CASE

West UP Sugar Mills Association v. State of Uttar Pradesh

CITATION

2020 SCC OnLine SC 380

CORAM

Supreme Court of India

Constitutional Bench - Hon’ble Justice Arun Mishra, Hon’ble Justice Indira Banerjee, Hon’ble Justice Vineet Saran , Hon’ble Justice M.R. Shah and Hon’ble Justice Aniruddha Bose

ALSO KNOWN AS

State Advised Price (SAP) for sugarcane case

POINT OF CONSIDERATION

Fixing of State Advised Price (SAP) for Sugarcane which is required to be paid over and above the minimum price fixed by the Central Government.

FACTS

Having noted that there is a clear conflict between the two decisions of the Supreme 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 the Supreme Court then referred the matter to a larger Bench of five judges.

ISSUES RAISED & RATIO

• 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?

By virtue of Entries 33 and 34 List III of seventh Schedule, both the Central Government as well as the State Government have the power to fix the price of sugarcane. The Central Government having exercised the power and fixed the “minimum price”, the State Government cannot fix the “minimum price” of sugarcane. However, at the same time, it is always open for the State Government to fix the “advised price” which is always higher than the “minimum price”, in view of the relevant provisions of the Sugarcane (Control) Order, 1966, which has been issued in exercise of powers under Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953.

• 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?

The Sugarcane (Control) Order, 1966 which has been issued under Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 confers power upon the State Government to fix the remunerative/advised price at which sugarcane can be bought or sold which shall always be higher than the minimum price fixed by the Central Government.

• 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?

Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 is not repugnant to Section 3(2)(c) of the Essential Commodities Act, 1955 and Clause 3 of the Sugarcane (Control) Order, 1966 as, as observed hereinabove, the price which is fixed by the Central Government is the “minimum price” and the price which is fixed by the State Government is the “advised price” which is always higher than the “minimum price” fixed by the Central Government and therefore, there is no conflict. It is only in a case where the “advised price” fixed by the State Government is lower than the “minimum price” fixed by the Central Government, the provisions of the Central enactments will prevail and the “minimum price” fixed by the Central Government would prevail. So long as the “advised price” fixed by the State Government is higher than the “minimum price” fixed by the Central Government, the same cannot be said to be void under Article 254 of the Constitution of India.

• Whether there is any conflict between the Constitution Bench judgment of this Court in the case of Tika Ramji and in the case of U.P. Coop. Cane Unions Federations?

The view taken by the Constitution Bench of Supreme Court in the case of U.P. Cooperative Cane Unions Federations vs. West U.P. Sugar Mills Association and Others is the correct law. Thus, it is held that the view taken by the Constitution Bench of this Court in the subsequent decision in the case of U.P. Coop. Cane Unions Federations (supra) is the correct law. There is no conflict between the two decisions of this Court in the case of Tika Ramji and in the case of U.P. Coop. Cane Unions Federations and therefore, there is no necessity to refer the matter to the larger Bench consisting of seven Judges.

IMPORTANT CASES REFERRED

1. M. Karunanidhi v. Union of India (1979) 3 SCC 431

2. Tika Ramji v. State of U.P. AIR 1956 SC 676

3. Rajiv Sarin v. State of Uttarakhand, (2011) 8 SCC 708

4. Belsund Sugar Co. Ltd. v. State of Bihar & Ors., (1999) 9 SCC 620

5. Punjab Dairy Development Board & Anr. v. Cepham Milk Specialities Ltd. & Ors, (2004) 8 SCC 621

6. Southern Petrochemicals Industries Ltd. v. Electricity Inspector and ETIO & Ors., (2007) 5 SCC 447

7. Bharat Hydro Power Corporation Ltd. & Ors. v. State of Assam & Anr. (2004) 2 SCC 553

8. Sukhnandan Saran Dinesh Kumar & Ors. v. Union of India & Ors., (1982) 2 SCC 150

The author is a law graduate from University School of Law and Legal Studies, GGS IP University, New Delhi.