Co-Operative Cane Unions Federations Vs. West U.P. Sugar Mills Association
& Ors  Insc 368 (5 May 2004)
461/1997, 4685/1997, 932/2001, 1639-1645/1999, 1727/1999, 4602/1999, 6065/2001,
8117-8122/2001, SLP(c) Nos. 16851/2001, 1363/2002, 948/2003 ,T.C. (C) 21-22/2003,
CON.PETN.(C) No. 63/2003 in C.A.No.932/2001 AND I.A.Nos. 13-14 in C.A. Nos.3512-3513 of 1997 P. Venkatarama Reddi, J.
put it in a nut shell, the three questions that broadly arise for consideration
legal status and binding nature of 'State advised cane price',
power of the State Government to fix sugarcane price under the provisions of
U.P. Sugarcane (Regulation and Purchase) Act 1953 (hereinafter referred to as
U.P. Act) and
case such power exists and is exercised, whether the State law fixing the price
becomes repugnant to the provisions of the Central Law, namely the Sugarcane
Control Order of 1966 framed under E.C.Act. As pointed out by Srikrishna, J.
the third question need not be answered in case no power to fix the price is
discernible from the provisions of the U.P. Act of 1953.
Turning to first question, I find no statutory basis for the 'State advised
cane price'. The very expression 'advised' connotes that the State advised
price has no statutory flavour. If the fixation has been done in exercise of
statutory power traceable to any provision in the U.P. Act, it would be most
inapt to describe it as 'advised price'. The statutorily fixed price can never
take the form of advice. It binds, enforces obedience by providing for
punishment or penal consequences and does not look for volition of the persons
concerned for its compliance. But, that is not the case here. From year to
year, the State Government has been announcing the 'advised price' in the hope
and expectation that the sugar factories in the private sector will also agree
to pay that price. It is worth quoting a typical order/communication issued by
the Government and the Cane Commissioner. The following is the communication dt.
15.11.96 addressed by Principal Secretary to Govt. to the Cane Commissioner of
U.P. :- "As is evident, that for every crushing season State Advised Cane
Prince is announced by the State Government. Accordingly, I have been directed
to inform you on the above subject, that the State Advised Cane Price payable
by all sugar factories for the season 1996-97 has been fixed as under:
early maturing varieties at mill gate - 76.00
general varieties at mill gate - 72.00
have also been directed to inform you that during crushing seasons 1996-97 the
transport deduction for cane supplied to the sugar factories at their out centres
will continue to be Rs.3/- per quintal.
Above orders will be applicable for crushing season 1996-97.
Please take immediate action in the above matter." (Sd.) Principal Secretary *** *** *** Office order
dt.15.11.96 issued by Cane Commissioner, U.P.
State Advised Cane Price is announced by the State Government for every crushing
this in view, the sugar factories have been paying cane price to the cane
the State Government has announced the State Advised Price payable by factories
early maturing varieties at mill gate - 76.00
general varieties at mill gate - 72.00"
above price is for the mill gate and for supply at outcentres. Transport
deduction will be separate.
(Sd.) Cane Commissioner, U.P.
order of the Cane Commissioner is marked to several officials, organisations
and occupiers of sugar factories.
Even in the counter-affidavits filed in the writ petitions, no categorical
stand has been taken by the Government that the 'State advised price' is the
statutorily fixed price which is legally binding on all concerned. On the other
hand, the averments in the counter-affidavit give a fair indication that it is
nothing but advised price in its literal sense. The following excerpts from the
counter-affidavit filed in writ petition No. 36889 of 1996 (the corresponding
Civil Appeal No. being 460 of 1997) make this position clear.
far as the State of U.P. is concerned, there are 118 sugar mills out of which
70 sugar mills belong to either the Sugar Corporation which is the
instrumentally of the State or the cooperative sector in which the State
Government has major share holding and only 48 sugar mills belong to private
sector. Thus, the State Government is fully justified in law to provide a price
of sugarcane for its own mills and since the private sugar factories are also
aware that the cane growers will not supply sugarcane at a lower price, they
have also in the previous years agreed to pay the aforesaid price without any
objection. The State Advised cane price also ensures that there is parity in
the price of sugarcane throughout the state and it removes the element of
disparity in any manner." *** *** *** "It has already been stated
above that since 1973 the policy of State Advised cane price is in existence in
the State of U.P. and it is in existence in all other sugar producing areas of
aforesaid policy has been invoked merely for the purposes of ensuring that the
sugarcane continues to be a cash crop and that the cane growers do not resort
to any other alternative crop. It is for this purpose that the State Government
intervenes and advise a price which is remunerative and is comparable to the
prices of sugar in the State during the relevant period."
may also refer to the order issued by the Government in the State of A.P. where the provisions similar to U.P. Act exist and
the averments in the counter-affidavit filed on behalf of the Government in
Writ Petition 2876/99 (corresponding to SLP (c) 16851/01). The relevant
particulars of GOMS No. 420 (Industries & Commerce, (Sugar) Department)
dated 4.12.98 are as follows :
Government of India has announced the statutory Minimum Price of Rs.527.00 per
M.T. linked to a basic recovery of 8.5% to be paid by the sugar factories to
the cane suppliers, for the year 1998-99.
the context of ensuring payment of fair and reasonable cane price to the
farmers, who supply sugarcane to the sugar factories, the Government elicited
the views of sugar cane growers and management of sugar factories.
Government after carefully examining the views and various issues connected
with it, it accordingly advise all the sugar factories, including khandasari
units, whether situated within or outside the zone of sugar factories in the
State, to pay a minimum price of Rs.652.50 per M.T. linked to a basic recovery
of 8.5% or 19997-98 year's price, whichever is higher by each factory/khandaasari
Unit for the sugar cane purchased by it for the year 1998-99 season as against
the statutory minimum price of Rs.527.00 per M.T. fixed by the Government of
the sugar factories and khandasari units in the State have to pay the State
Advised cane price without any monetary assistance from the State Government.
The payment of sugarcane price shall be adjusted against the ultimate price
payable under price sharing formula under clause 5(A) of Sugarcane (control)
Order, 1966." In the counter-affidavit, it is made clear "that the
State Government only advised the sugar factories to pay certain price to the
cane suppliers which is fair and reasonable after eliciting the views of the
representatives of sugarcane growers and managements of sugar factories. It is
not true to state that the State Government have compelled the sugar factories
to pay the SAP to cane suppliers but sugar factories have to pay the purchase
tax at Rs.60 per M.T." Again at paragraph 7, it is stated in emphatic
terms that the State Government only advises the payment of cane price for the
welfare of sugar industry and cane growers. In fact, in the course of arguments
before the High Court, the learned Advocate General appearing for the State
rightly took the stand that the State advice price is not an 'Imposition'.
The stand taken by the State Governments in the cases previously decided by
this Court, viz., Jaora Sugar Mills and SKG Sugars, which has been accepted by
the Court was that efforts were made by the official machinery of the State to
convene the meetings and to arrive at an agreed price which was notified as the
State advised price.
the real basis for compliance with the State advised price is the agreement but
not its statutory authority or binding force. The apparent reason for not
notifying the price under the provisions of the statute, namely, U.P. Act of
1953 seems to be the doubt cast on the State's power to fix such price in the
light of the observations made in Tika Ramji's case and, it may also be
attributable to the difficulty arising on account of lack of criteria or
guidelines under the Act and Rules regarding fixation of price. Be that as it
may, the fact remains that the 'State advised price' cannot be said to have
been fixed in purported exercise of any statutory power and it cannot be
elevated to the level of a statutory price fixation order. The decisions of
this Court referred to supra did not hold that the State advised price is a
statutorily fixed price and is legally binding on the sugar factories on its
own force. The observation in Jaora Sugar Mills case at paragraph 14 to the
effect that "the price fixed or agreed is a statutory price" does not
mean that State advised price was construed as statutorily determined price.
the learned Judges were referring to the two concepts of price envisaged by the
Sugar Control Order as discussed in paragraph 8 of the said decision. But, it
does not appear to have reference to the 'State Advised Price' as such.
However, I would like to clarify that the question posed by the Court at
paragraph 12 i.e. "whether the State Government had entered into such a
contract" is not accurate and does not fit in with the actual decision in
the light of my conclusion that the State Advised Price has no statutory basis
and legal force, is it necessary to strike down the orders communicating the
State Advised Price? That is the next question. In my considered opinion, it is
not necessary or appropriate to do so. The State advised price, though lacking
the sanction of law and its compliance cannot be ensured against the will of
the factory owner, it can still serve as a framework within which an agreed
price over and above the minimum price fixed under the Central Control Order
can be brought about.
law does not prohibit the concerned authorities of the State Government from
advising or recommending a price for adoption by the sugar factories. The
authorities entrusted with the various functions under the Act conceived in the
interests of both growers and producers can certainly play a role, as has been
pointed out in Jaora Sugar Mills in bringing the parties to a negotiating table
and forging a mutual settlement leading to the payment of the State advised
price. The very fixation of State advised price cannot be legally faulted so
long as its compliance is ensured by a voluntary process by which the State
advised price can very well become an agreed price.
The next and more important controversy is about the State Government's power
to fix the price. Such power is traced to Section 16 of the U.P. Act by the
learned counsel appearing for the State and the Cooperative Cane Unions.
is almost a similar provision in the corresponding enactments in force in the
States of Andhra Pradesh, Punjab and Haryana.
In Bihar and Tamilnadu, there is no such
provision. In fact, Section 42 of the Bihar Act lays down that the minimum
price determined under the Act shall not exceed the minimum price payable under
any law for the time being in force.
would suffice to confine the discussion to the provisions of U.P. Act. Section
16 of U.P. Act carries the heading 'Regulation of purchase and supply of cane
in the reserved and assigned areas'. Sub-Section(1) empowers the State
Government, "for the purpose of maintaining supplies", to regulate
"the distribution, sale or purchase of cane in any reserved or assigned
"purchase of cane in any area other than a reserved or assigned
thus laying down the broad parameters of regulatory power, it is followed by
sub-Section (2) spelling out the specific areas to which such power can extend.
The fixation of price of cane is not one of them. However, sub-Section(2) does
not exhaust the field of operation of the regulatory power. The price fixation
could still come under the generality of the power reserved under sub-Section
(1). It is contended with much force that the power to regulate the sale or
purchase of sugarcane comprehends within its scope the power to fix the price
of sugarcane. The wide meaning given to the expression 'regulate' in various
cases coupled with the fact that price is an essential component of sale is
harped upon to preserve the power of the State Government to fix the price. Mathur,
J. has also highlighted the fact that the fixation of a remunerative price for
sugarcane supplied to factories would go a long way in accomplishing the
objective of maintaining supplies. The peculiarities associated with harvesting
and marketing of sugarcane have been pointed out. The need to protect the
interests of sugarcane growers has also been stressed. These are no doubt
weighty considerations which go to support the argument that the regulatory
power can extend to fixation of price of sugarcane supplied to the factories.
But, there are equally weighty factors which persuade me to hold, in
concurrence with the view expressed by Srikrishna, J, that the regulatory power
under Section 16 does not extend to price fixation.
Number of cases were cited at the bar to buttress the argument that the import
of the word 'regulatory' is wide and expansive enough to cover price fixation.
It was noticed M.P. Electricity Board [(1989) Suppl. 2 SCC 52]) that the
expression 'regulate' has no precise or fixed connotation and that it has
different shades of meaning. There is no doubt that it is a word of broad
import. Its width and content may vary according to the contextual setting in
which the expression occurs. The scheme and thrust of the provisions of the
relevant statute, the objective of legislation, the legislative intent gathered
from the legislative history and the run of the provisions contained in the
enactment can all be taken into account while appreciating the correct meaning
of the expression 'regulate' in a particular statute. I agree with Srikrishna,
J. that the decision in Tika Ramji's case is the main hurdle for giving an
amplified meaning to the expression 'regulate' so as to cover price fixation.
After giving anxious consideration to the issue, I find it difficult to
distinguish the judgment in the manner in which it was sought to be done by the
learned counsel appearing for the State and the Union of cane growers. Though
the Constitution Bench did not directly deal with the question of
interpretation of Section 16 vis-`-vis the power of price fixation, going by
the observations made therein and the basis of reasoning adopted to arrive at
the conclusion that there was no repugnancy, it is fairly clear that the
Constitution Bench negatived the existence of any provision empowering the
State Government to fix the price.
Court in addition observed that factually, there was no fixation of minimum
price by the State Government. On a comparative analysis of the provisions,
this Court found no repugnancy between the impugned Act (U.P. Act of 1953) and
the Sugarcane Control Order of 1955. The provisions were held to be mutually
exclusive and did not impinge upon each other. It is appropriate to refer to
the relevant observations made and the reasons given by the Constitution Bench
which are crucial. While dealing with the point No.1, i.e., whether the U.P.
Act of 1953 had trenched upon the subject of notified industries falling within
the exclusive domain of Parliament, this Court noticed that the provisions in
the repealed U.P. Act 1 of 1938 dealing with the minimum price of sugarcane
were deleted. The following observations may be noticed:
the power reserved to the State Government to fix the minimum prices of
sugarcane under Chapter 5 of U.P. Act 1 of 1938 was deleted from the impugned
Act, the same being exercised by the Centre under Clause (3) of Sugar and Gur
Control Order, 1950 issued by it in exercise of the powers conferred under
Section 3 of Act 24 of 1946."
prices fixed by the Centre were adopted by the State and the only thing which
the State Government required under Rule 94 was that the occupier of a factory
or the purchasing agent should cause to be put up at each purchasing centre a
notice showing the minimum price of cane fixed by the Government meaning
thereby the Centre." Again it was observed in the next para: "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 the sugarcane by the occupier of a
factory to the sugarcane growers. It could be recovered from such occupier as
if it were an arrear of land revenue. This comparison goes to show that the
impugned Act mainly confined itself to the regulation of the supply and
purchase of sugarcane required for use in sugar factories.."
Turning then to the question of repugnancy (point No.2), the Court after
clarifying that both the Parliament and the U.P. State Legislature had the
concurrent power of legislation under Entry 33 of the List III in regard to
sugarcane, found no repugnancy between the Central and State legislations.
Central to the reasoning of the case are the following observations :
we have noted above, the U.P. State Government did not at all provide for the
fixation of minimum prices for sugarcane nor did it provide for the regulation
of movement of sugarcane as was done by the Central Government in Clauses (3)
and (4) of the Sugarcane Control Order, 1955.
impugned Act did not make any provision for the same and the only provision in
regard to the price of sugarcane which was to be found in the U.P. Sugarcane
Rules, 1954, was contained in R.94 which provided that a notice of suitable
size in clear bold lines showing the minimum price of cane fixed by the
Government and the rates at which the cane is being purchased by the centre was
to be put up by an occupier of a factory or the purchasing agent as the case
may be at each purchasing centre. (emphasis supplied) The price of cane fixed
by Government here only meant the price fixed by the appropriate Government
which would be the Central Government, under Clause (3) of the Sugarcane
Control Order, 1955, because in fact the U.P.
State Government never fixed the price of
sugarcane to be purchased by the factories. * * * * * * * * * * ** * * * * * *
** * * * * * * ** * * * * * * * * * * * * * The provisions thus made by the
Sugarcane Control Order, 1955, did not find their place either in the impugned
Act or the Rules made thereunder or the U.P. Sugarcane Regulation of Supply and
Purchase Order, 1954, and the provision contained in Section 17 of the impugned
Act in regard to the payment of sugarcane price and recovery thereof as if it
was an arrear of land revenue did not find its place in the Sugarcane Control
provisions, therefore, were mutually exclusive and did not impinge upon each
other there being thus no trenching upon the field of one Legislature by the
doubt, the content of regulatory power under Section 16 was not discussed by
the Constitution Bench.
as viewed by Srikrishna, J., the observations made by the Court necessarily
suggest that the State Government was not invested with the power to fix the
price of sugarcane. It was argued that the question of repugnancy was
considered from the stand point of minimum price but not the price in general.
I find it difficult to accept this contention. The tenor of discussion more
especially the observations extracted supra would unmistakably indicate that
the Constitution Bench did not consider the question of repugnancy only from
such narrow angle but it was considered in the broader perspective of the provisions
relating to price and the exercise of power of price fixation by the State
Govt. No particular significance can be attached to the use of the expression
'minimum price' in the judgment of Constitution Bench because in one sense, the
price ordained to be paid by the State government, will become minimum price.
In another sense, it may be a more remunerative or higher price than what is
fixed by the Central Government.
a careful reading and analysis of the judgment, I am inclined to think that the
Constitution Bench did not discern any power to fix the price under the Act. If
under Section 16, the power to fix price was to be inferred, I have no doubt
that the Constitution Bench would have paused and considered the effect of it
on repugnancy. It is only on the premise that there was no such provision, the
Court recorded its conclusion on the issue of repugnancy. In other words, the
Court proceeded on the basis that the subject of price fixationminimum or
otherwise was not dealt with by U.P. Act of 1953. It is also not possible to
distinguish the decision on the ground that what was uppermost in the mind of
the Constitution Bench was the factual non fixation of the price by the State
Government but not the power to fix the price. It was on both aspects. Even if
the Constitution Bench recorded its conclusion on the question of repugnancy
without specifically considering Section 16 and the power to regulate the price
that could possibly flow therefrom, this coordinate Constitution Bench cannot
express a contrary view at this distance of time.
any case, apart from what was held in Tika Ramji's case, there are certain
features and indicators discernible from the scheme of the U.P. Act and the
legislative history which lead to the irresistible conclusion that price
regulation was not within the contemplation of the Act. In contrast to the
preamble of the predecessor Act, namely, the U.P. Sugar Factories Control Act,
1938 (as amended by Act 16 of 1952) the expression 'to regulate the price of
the sugarcane' has been omitted. Then, the specific provision contained in the
earlier Act (Section 21 of U.P. Act 1 of 1938) conferring power on the State
Government to fix minimum price and Section 22A empowering the State Government
to direct payment of additional price was omitted, the reason for such omission
being the promulgation of the Sugar and Gur control Order, 1950 by the Central
Government, as noticed by this Court in Tika Ram ji's case. Having omitted to
reenact those provisions, if the U.P. legislature wanted to retain the power to
fix higher price over and above the minimum fixed by the Central Government, it
is reasonable to expect the legislature to make a specific provision to that
effect rather than leaving it to the general regulatory power under Section 16
to take care of it. It cannot be gainsaid that the power to fix the price and
to regulate dealings between the parties accordingly is a matter of great
importance. When a parallel legislation in the Central field was in operation
in regard to price fixation, the State legislature would not have omitted to
enact the specific provision empowering the Government to fix the price higher
than the minimum level prescribed by that legislation if that was the intention
of the legislature.
provision would have contained norms, criteria or guidelines governing the
higher price fixation or at least left them to be prescribed by Rules. This is
also one of the factors which persuades me to think that the price fixation in
the guise of regulatory power under Section 16 was not within the contemplation
of the U.P. State Legislature.
J. has also referred to this aspect in his judgment. The learned Judge's
observations in this behalf are quite pertinent. The conspicuous absence of a
specific provision relating to price fixation must be viewed in the back drop
of legislative history and the parallel central legislation operating in the
field. Both the external and internal aids to construction reasonably point to
the conclusion that price regulation was not within the contemplation of State
legislature. In fact, that aspect was consciously left out. Above all, the
observations in Tika Ramji's case cannot be explained away by clear cut
distinguishing features as discussed earlier. I am, therefore, of the view that
Section 16 of the U.P. Act 1953 cannot be so construed as to confer the power
on the State Government to fix the price. Section 17 of the Act and the Rules
are only provisions to ensure prompt payment of price and to provide for
recovery in case of default. It is only to this extent a provision exists in
regard to price.
agree with Srikrishna, J, that there is no need to decide the constitutional
question whether the fixation of price by the State Government clashes with the
provisions of Sugar Control Order 1966 promulgated under the Essential
Commodities Act. As and when the legislation is enacted by the State and the
price is fixed by the State Government or other designated authority in terms
of such statutory provision, the need may arise to test the validity of such
provisions in the light of Article 254 of the Constitution. It is a well
settled practice of this Court not to render a decision on a constitutional
issue on hypothetical basis or in anticipation of future law, especially when
the Union of India is not a party to these proceedings. I, therefore, express
no view on the Constitutional issue relatable to Article 254.
Having considered the main points at issue, certain aspects concerning the
inter-relation between Agreements and State advised price and the role of State
machinery in this regard need to be dealt with. The ratio of certain decisions
of this Court cited at Bar in a bid to impart binding force to the State
advised price should also be considered.
First, I would like to clarify that the signing of an agreement incorporating
the State recommended Price should not cloud the issue whether the State
Government has statutory authority to fix such price. I agree with Srikrishna,
J. that the existence or otherwise of an agreement is not determinative of the
crucial controversy relating to the power of the State Legislature or its
there is no authority to fix the price, the fact that the Agreement is entered
into adopting the 'State advised price' does not impart statutory basis to such
price. On the other hand, if there is power under the Statute and such power
has been demonstrably exercised by the State, there is no need to have recourse
to the agreement to sustain the power. It needs to be clarified here that once
the agreement is arrived at or executed, the price specified therein, even if
it be 'State advised price', has to be paid irrespective of the question
whether such price has statutory flavour. At the same time, it must be made
clear, as pointed out by Mathur, J., that the agreement cannot be said to have
been vitiated on the ground of statutory compulsion for the reason that the
statutorily fixed price is incorporated into the agreement. A fortiori, the
agreement giving effect to the State advised price is perfectly valid and
enforceable unless any vitiating factors under the law of contract are
established. I would however like to make it clear that the State Government or
its agents cannot compel or coerce the sugar factories to enter into agreements
to pay to the growers the 'State Advised Price', even though it has no
statutory power to fix the price. In the absence of such statutory authority,
the only course left open to it to ensure higher price to the farmers is to
strive to evolve an agreement on price by way of consensus. In such a case, the
State advised price can enter into the terms of agreement. Such mutual
agreement should be the result of negotiations and voluntary acceptance. In
some of the decisions, it has been said that agreed price is the 'State Advised
Price'. It may or may not be always so. It depends on the fact whether
voluntary agreement as regards the price has been arrived at or not. The
super-imposition of State Specified Price into the terms of the agreement by means
of an unilateral action on the part of the Government does not obviously pass
the muster of agreed price. In short, an agreement cannot be forced on the
parties in the absence of statutory backing, though the State machinery can
play a role to evolve an agreement through a voluntary process.
The next point which needs to be clarified is that the judgments in Jaora Sugar
Mills case and S.K.G. Sugars case relied on by Mathur, J. are of little
assistance in answering the crucial issues arising in the present case.
rightly pointed out by Srikrishna, J., in those cases it was found as a matter
of fact that there existed valid consensual agreements between the factories
and the sugarcane growers. It may be that the official machinery was
instrumental in bringing about such agreements, but that is an immaterial
factor. Once the agreement is entered into the price specified therein (whether
equivalent to State advised price or otherwise), is liable to be paid without
raising further questions.
support can be drawn even from the decision in Maharashtra Rajya Sahakari Shakkar
Kharkhana Sangh's case. The following are the observations of R.M. Sahai, J. at
para 21 :- "..the Central Government did not fix any maximum price
obviously because the conditions in the agricultural sector differed from State
to State. Therefore, it having fixed a minimum price expects the State to offer
remunerative price to its cultivators. In a controlled economy, the price
fixation machinery is to be determined by the Government or under the 1966
Order in the manner provided therein.." The observations must be confined
to the facts and the issue arising therein. The distinguishing feature in that
case, as pointed out by Srikrishna, J., is that the bye-laws of the co-operative
society empowered the State Government to determine the price of the sugarcane
to be paid to the members so long as the loans advanced to the co-operative
society were not fully paid. It is this bye-law that empowered the State
Government to fix the price. No question arose in that case regarding
interpretation of Section 16 of U.P. Sugarcane Act or the conflict between the
State and Central law.
Now, a Summary of conclusions :
State Advised Price has no statutory flavour.
not fixed or purportedly fixed in exercise of any statutory power. It is only
persuasive or recommendatory in nature. The sugar factories cannot be compelled
or coerced to pay that price by taking any steps not sanctioned by law.
U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 does not confer
the power on the state government to fix the price of sugarcane. Such power
cannot be spelt out from section 16.
view of conclusions (1) and (2) it is not necessary to express any opinion on
the constitutional issue of repugnancy between the central and the state law.
The finding recorded on this aspect by the Allahabad High Court in writ
petition No. 36889 of 1996 is set aside. That question of law is left open.
writ or direction issued in some of the writ petitions to 'enforce' the State
Advised Price irrespective of the consent of the occupier of sugar factory is
declared illegal and hereby set aside.
Although the State Advised Price has no sanction of law, the action of the
State government in notifying the State Advised Price and advising the sugar
factories to comply with the same is not per se illegal. The State Advised
Price can serve as the framework within which the agreement as to price can be
reached between the cane growers and the sugar producers. Therefore, the orders
issued by the state government / Cane Commissioner communicating the fixation
of State Advised Price need not be set aside.
There is no legal taboo against the State government machinery playing a role
in evolving an agreement between the cane growers and the sugar producers as to
the price, without adopting any coercive methods.
Once the occupier of sugar factory reaches an agreement with the cane grower may
be on the persuasion of the state authorities, to pay the price equivalent to
State Advised Price either by executing a formal agreement in this behalf or
otherwise, the occupier of the factory is bound to pay such price and in case
of default it can be recovered by the State authorities by coercive process
laid down in the statute.
Whether or not there is an agreement to pay particular price is a question of
fact. In the absence of express agreement, it is not impermissible to look into
other evidence, if there is a dispute on the question of the price agreed to be
writ petitions and transferred cases shall be disposed of by the respective
High Courts de novo in the light of the declaration of law and the observations
made above. Accordingly Civil Appeals/S.L.Ps. other than those mentioned in the
last paragraph stand disposed of.
I.A.Nos. 13-14 in C.A. Nos.3512-3513 of 1997, S.L.P.(C) Nos. 948 of 2003 and
1363 of 2002 arising out of interim orders and C.A. Nos.1639-1645 of 1999
relating to recovery of agreed price are dismissed.
case to be posted before the appropriate Bench.