UP Sugar Mills Case: SC Constitution Bench Reserves Order On Reference To Seven Judge Bench

The Supreme Court 5-judge bench headed by Justice Arun Mishra considered on Thursday whether the state of Uttar Pradesh has the authority to fix the State Advised Price ('SAP'), which is required to be paid over and above the minimum price fixed by the Central Government.In making the reference on the question of law to a bench of at-least 7 judges in 2012, a 3-judge bench had directed the sugar factories to pay the balance outstanding principal amount, according to the SAP of the relevant crushing seasons, to the cane growers or to the cooperative societies. It had even imposed an interest of 18% per annum if the payment is delayed beyond 3 months from the date of the judgment.Senior Advocate Jayant Bhushan on Thursday urged for a reference to a 7-judge bench, citing the conflict on the issue between two 5-judge benches in Tika Ramji (1956) and U.P. Cooperative Cane Unions Federations (2004) cases."The U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 has no specific power to fix price...there is only a power to regulate purchase, which may include price...this was noticed in Tika Ramji that while the earlier Act (of 1938) gave a specific power to the state government to fix price, this Act does not...section 16 of the Act confers on the state government the power to regulate distribution, sale or purchase of cane. The 2004 judgment found that there is a power under this section", he advanced.He indicated Entry 33 of List III of the 7th Schedule to the Constitution- Trade and commerce in, and the production, supply and distribution of the products of any industry over which the Union has, in public interest, control by law (as in Entry 52 of List I), foodstuffs, cattle fodder, raw cotton, and raw jute."Did this Entry come because of this judgment (in Tika Ramji)?", inquired Justice Aniruddha Bose. He was informed that while the Entry was expanded to include 'foodstuffs' etc by the Constitutional Amendment of 1954, the judgment was rendered only in 1956."...Before sugar industry became a controlled industry, both sugar and sugarcane fell within Entry 27 of List II but, after a declaration was made by Parliament in 1951, sugar industry became a controlled industry and the product of that industry, viz., sugar was comprised in Entry 33 of List III taking it out of Entry 27 of List II. Even so, the Centre as well as the Provincial Legislatures had concurrent jurisdiction in regard to the same. In no event could the legislation in regard to sugar and sugarcane be thus included within Entry 52 of List 1. The pith and substance argument also cannot be imported here for the simple reason that, when both the Centre as well as the State Legislatures were operating in the concurrent field, there was no question of any trespass upon the exclusive jurisdiction vested in the Centre under Entry 52 of List 1...", quoted Mr. Bhushan from the Tika Ramji."Even the power reserved to the State Government to fix minimum prices of sugarcane under (the earlier UP Act of 1938) was deleted from the impugned Act (of 1953), the same being exercised by the Centre under clause 3 of Sugar and Gur Control Order, 1950...", he stressed, reciting from Tika Ramji."'Omitted' would be a better term...", ventured both Justices Mishra and Vineet Saran, since there are two different enactments, one of 1938 and the other of 1953, and the use of the word "deleted" giving the impression that the same Act was amended."Is there any pari materia provision to section 16 in the 1938 Act? 16 will have to be interpreted in the best possible manner. A mere omission will not help", asked Justice Mishra.In response, Mr. Bhushan drew the bench's attention back to Tika Ramji, in as much as it observed that "The only provision which was retained by the State Government in the impugned Act for the protection of the sugarcane growers was that contained in section 17 which provided for the payment of price of sugarcane by the occupier of a factory to the sugarcane growers...the impugned Act merely confined itself to the regulation of the supply and purchase of sugarcane required for use in sugar factories and did not concern itself at all with the controlling or licensing of the sugar factories, with the production or manufacture. of sugar or with the trade and commerce in, and the production, supply and distribution of, sugar. If that was so, there was no question whatever of its trenching upon the jurisdiction of the Centre in regard to sugar industry which was a controlled industry within Entry 52 of List I""We can't agree outrightly with you...They (the constitution bench in Tika Ramji) have not considered 16...what is the meaning of 16?", pressed Justice Mishra."But they upheld the vires of the 1953 Act! The question squarely arose if the state government has the power to fix prices under the Act, making the 1953 Act repugnant to the Essential Commodities Act and the Sugarcane Control Order, because under the latter the Central government has the...

UP Sugar Mills Case: SC Constitution Bench Reserves Order On Reference To Seven Judge Bench

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