Sugar Mills Ltd V. State of U.P. & Ors  Insc 974 (24 September 2007)
Thakker & Altamas Kabir
OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 4137 OF 2005 C.K. THAKKER, J.
present appeal is directed against the judgment and final order passed by the
Division Bench of the High Court of Judicature at Allahabad dated October 29, 2004 in Civil Miscellaneous Writ Petition No. 1369 of 2004. By
the said order, the High Court dismissed the writ petition filed by the writ
petitioner- appellant herein.
Facts in nutshell giving rise to the writ petition as well as present appeal
may now be stated.
appellant-M/s Dhampur Sugar Mills Ltd. (Company for short) is a
Public Limited Company incorporated under the Companies Act, 1956 having its
registered office at Dhampur (Bijnor). The appellant has sugar mill in the
State of Uttar Pradesh and has also a distillery. The
distillery manufactures ethyl alcohol, used for blending of petrol, manufacture
of chemicals and rectified spirit for medicines. It is also having a similar
business at Asmouli, District Moradabad, Mansurpur, District Muzaffarnagar and Rozagaon,
District Barabanki The writ petitioner approached the High Court by invoking
Article 226 of the Constitution against the respondents for issuance of
appropriate writ, direction or order quashing certain Government Orders said to
have been passed by the Authorities under the Uttar Pradesh Sheera Niyantran Adhiniyam,
1964 [Act XXIV of 1964] (hereinafter referred to as the Act)
directing the writ-petitioner to supply 20% of the molasses produced by the
sugar mills for manufacturing country made liquor by distilleries for
the financial years 2003-04 and 2004-05. The writ petitioner also challenged
consequential action of issuance of show cause notices as to why it should not
be prosecuted for committing offences punishable under the Act since it has not
complied with the orders issued by the Authorities and has not supplied 20%
molasses for manufacturing country liquor. The main challenge of the writ
petitioner was that though the Company was producing molasses, the entire
production was required by the Company itself which was used for captive
consumption and even that was not sufficient. The Company had, therefore,
obtained permission from the Government for import of molasses from other
States as also other Countries. Since the writ petitioner did not have balance
or extra stock of molasses for being supplied to distilleries for manufacturing
country-made liquor, the Authorities could not compel the writ petitioner to
supply molasses as directed in various Government Orders and Letters. Such
action was improper, illegal, arbitrary and unreasonable, inconsistent with the
provisions of the Act as also violative of Articles 14 and 19(1)(g) of the
action was also against public policy reflected in Article 47 of the
Constitution. It was contended that since the above directives could not have
been issued by the Authorities, issuance of show cause notices as to why the
writ petitioner should not be prosecuted also were not legal and the
prosecution should be quashed.
also the case of the writ petitioner that the State Government ought to have
constituted Advisory Committee under Section 3 of the Act.
stand of the Government before the High Court was that in accordance with the
provisions of the Act and the Uttar Pradesh Sheera Niiyantran Niyamavali, 1974
(hereinafter referred to as the Rules), it was open to the
Authorities to ask the writ petitioner to supply 20% molasses for the purpose
of manufacturing country liquor. As the said action was in consonance with law,
the Company was bound to supply 20% molasses for the said purpose and the
action could not be termed as illegal or unlawful.
was also contended by the respondents that an alternative and equally
efficacious remedy of filing an appeal under Section 9 of the Act was available
to the Company and hence writ petition was not maintainable.
to Article 47 of the Constitution, the case of the State Government was that
the point was finally concluded by a decision of this Court in Khoday
Distilleries Ltd. & Ors. V. State of Karnataka & Ors., (1995) 1 SCC 574 : JT 1994 (6) SC 588 in favour of the
State. Section 3 of the Act, according to the State, was merely an enabling
provision and thus directory in nature and the writ petitioner could not compel
the State to constitute Advisory Committee.
High Court, after hearing the parties, held that preliminary objection raised
by the respondents was not well-founded. Considering the totality of facts and
circumstances and the decisions taken by the respondents, the High Court held
that approaching the Appellate Authority would be a futile attempt.
The High Court, considering various decisions of this Court on the point, held
that it would not be justified in dismissing the petition on the ground of
alternative remedy and the said objection was not well-founded.
Court ruled that apart from the fact that Article 47 of the Constitution could
not be enforced by a Court of Law, the point no longer survived in the light of
decision of the Apex
Court in Khoday
3 of the Act, according to the High Court, was only directory and if
Advisory Committee was not constituted by the State, the powers under
the Act could be exercised by the Controller appointed by the State.
merits, the Court held that the reservation for 20% of molasses and directive
issued to the writ petitioner to supply such stock for manufacturing country
liquor was neither contrary to law nor against public policy. The order,
therefore, could have been issued by the Authorities as it was open to the
Authorities to ask for 20% molasses from the writ petitioner for manufacturing
country liquor. The Company was bound to supply the stock and as it was not
done, the Authorities were right in taking appropriate action in accordance
with law. Accordingly, the High Court dismissed the writ petition.
May 2, 2005, notice was issued by this Court.
The matter appeared on Board thereafter from time to time and ultimately on March 2, 2007, the Registry was directed to place
the matter for final disposal on a non-miscellaneous day. That is how the
matter has been placed before us.
have heard the learned counsel for the parties.
The learned counsel for the appellant contended that Section 3 of the Act
enjoins the State Government to constitute an Advisory Committee
to advise on matters relating to the control of storage, preservation,
gradation, price, supply and disposal of molasses under the Act. It was,
therefore, incumbent on the State Government to constitute such Committee.
is no such Committee at present as envisaged by the Act though such Committee was
there in past. This is contrary to law and against the legislative mandate.
absence of such Committee, no directive can be issued by the Controller to
supply molasses. All the directives are, therefore, without authority of law
and are required to be set aside. It was also contended that such directives
are against public policy reflected in the Directive Principles of State Policy
enshrined in Part IV of the Constitution and in particular, Article 47 which
requires the State to endeavour to bring about prohibition of intoxicating
drinks. The State Government wedded with implementation of principles
enumerated in Part IV of the Constitution cannot issue an order that molasses
should be reserved for manufacturing country liquor and such a directive
cannot be enforced. On that ground also, the impugned directives are liable to
be quashed. It was further urged that alternatively the impugned directive is
explicitly clear and requires a sugar mill to reserve 20% of molasses from the
balance stock i.e. over and above actual consumption by the industry for
manufacturing country liquor. Since the writ petitioner did not have balance
stock of molasses and the record clearly revealed that even for captive
consumption, it had to import molasses from other States in the country and
from foreign countries for which necessary permission was granted by the
Government, it could not be compelled to reserve 20% molasses for manufacturing
country liquor. It was submitted that even if the directive is held to be
legal, lawful and in consonance with law, the writ petitioner could not be
asked to supply 20% molasses for manufacturing country liquor. The directive
could not be applied to the writ petitioner and notices could not be issued to
show cause as to why the Company should not be prosecuted. On that limited
ground also, the writ petition ought to have been allowed and the High Court
was wrong in dismissing it.
The learned counsel for the respondents, on the other hand, submitted that the
constitutional validity of the Act has not been challenged by the
otherwise, the validity has been upheld by this Court in SIEL Ltd. & Ors.
V. Union of India & Ors., (1998) 7 SCC 26: JT 1998 (6) SC 323. It was,
therefore, open to the respondents to implement the provisions of the Act.
Section 8 of the Act empowers the Authorities to issue necessary directions
relating to sale and supply of molasses and in exercise of the said power,
orders were issued by the Authorities and the High court was right in upholding
them. Regarding Advisory Committee, it was submitted that it is in the
discretion of the State Government to constitute the Committee and if no such
Committee is constituted, there is no violation of law.
High Court was right in holding that in absence of Advisory Committee,
Controller could have exercised the power conferred on him by the State
Government. As to public policy and provisions in Part IV of the Constitution,
the counsel contended that the High Court was called upon to consider a limited
question as to whether the action was illegal or unconstitutional and once it
was held that it was in consonance with law, the Court was right in upholding
it and in dismissing the petition. It was, therefore, submitted that the appeal
deserves to be dismissed.
Having considered the rival contentions of the parties, in our opinion, the
appeal deserves to be partly allowed. So far as the constitutional validity of
the Act is concerned, it is rightly not challenged by the writ petitioner since
the point is concluded by a decision of this Court in SIEL Ltd. decided in
1998. It was held by this Court that the Act was within the legislative
competence of the State and the State Act was not inconsistent with the
Industries (Development and Regulation) Act, 1951, i.e. Central Act. But even
otherwise, the U.P. Act having received the assent of the President as required
by Article 254(2) of the Constitution, would operate.
to alternative remedy available to the writ petitioner, a finding has been
recorded by the High Court in favour of the writ-petitioner and the same has
not been challenged by the State before us. Even otherwise, from the record, it
is clear that the decision has been taken by the Government. Obviously in such
cases, remedy of appeal cannot be terms as alternative, or
equally efficacious. Once a policy decision has been taken by the
Government, filing of appeal is virtually from Caesar to Caesars
wife, an empty formality or futile attempt. The High
Court was, therefore, right in overruling the preliminary objection raised by
merits, the learned counsel for the appellant drew our attention to an order
dated June 9, 2004 which was relied upon by the High
Court for dismissing the writ petition. Clause (3) of the said order relates to
supply of 20% molasses for manufacturing country liquor. The High Court in its
order reproduced the said clause which is in Hindi and reads thus;
CHINI MILL KE SHEERE KE AWASHESHA STAAK ME SE DESHI MADIRA KE LIYE 20 PRATISHAT
SHEERE KA AARKSHAN EISI AASHWANI YO KE LIYE HOGAA JO USKAA UPYOG DESHI MADIRA
UTPADAN ME KAREGI. AISI CHINI MILE JINKI SWAYAM KI BHI AASHWANIYA HAI,
UKTANUSAR KIYE JA RAHE SHEERE KE AARAKSHAN SE OOS SEEMA TAK BAHAR RAHEGI KI
CHINI MILL SAH-AASHWANI DWARA SWAYAM KE VASTAVIK UPBHOG KE ATIRIKT JO SHEERA
BACHATA HAI, OOS PER 20 PRATISHAT KA AARAKSHAN LAGOO HOGA.
The English translation supplied by the appellant at Annexure P-3 reads thus;
the balance stock of molasses with each sugar mill, 20% of molasses shall be
reserved for the distilleries manufacturing country liquor. The sugar mills
having their own distilleries shall not be covered with this reservation to the
extent that after the actual consumption of molasses in their captive distillery,
20% reservation shall be applicable on the balance stock.
The learned counsel for the writ petitioner, in our opinion, is right in
contending that the said order applies only to balance stock (Avshesh staak).
According to the High Court, 20% molasses must be reserved by each and every
sugar mill for manufacturing country liquor notwithstanding whether there is
balance stock or not. In other words, the High Court held that 20% molasses
must be reserved by every sugar mill for the purpose of manufacturing country
liquor. If such sugar mill is having facility of manufacturing country liquor,
it should utilize the said stock for the said purpose, otherwise it should
supply to the Authorities.
our opinion, however, clause (3) applies only to excess stock of molasses, that
is, molasses which is in excess of and not used for captive consumption by
sugar factory and is thus balance stock. It is the assertion of the
writ petitioner that the Company has no excess stock of molasses. Not only that,
but it has to import molasses from other sources even for its own requirement
for manufacturing industrial alcohol and such permission has been granted by
the Central Government as well as by the State Government. If it is so, the
case does not fall within the mischief of clause (3) and said clause cannot be
pressed in service by the Authorities. The High Court, in our opinion, was not
right in holding that all sugar mills were bound to supply 20% molasses to the
Authorities under clause (3) of the Government Order dated June 9, 2004 irrespective of stock possessed.
Only on that ground, the appeal deserves to be allowed.
far as the submission of the learned counsel as to Article 47 of the
Constitution in Part IV comprising of Directive Principles of State
Policy is concerned, in our opinion, on the facts and in the
circumstances, it is not necessary to express any opinion one way or the other
and we refrain from doing so.
Before the High Court as well as before us it was strenuously urged by the writ
petitioner that it was obligatory on the State Government to constitute
Advisory Committee under Section 3 of the Act. Section 3 reads thus:
Constitution of Advisory Committee.
The State Government may, by notification in the Gazette, constitute an
Advisory Committee to advise on matters relating to the control of storage,
preservation, gradation, price, supply and disposal of molasses.
The Committee shall consist of such number of persons and shall be constituted
on such terms and conditions as may be prescribed.
Section 22 is a rule making power and enables the State Government to make
rules to carry out the purposes of the Act. Sub-section (2) enacts that in
particular and without prejudice to the generality of the power, such rules may
the composition of the Advisory Committee, the manner in which its members
shall be chosen, the term of office of its members, the allowances, if any,
payable to them, the manner in which the Advisory Committee shall tender its
advice and the procedure for the conduct of its business;
procedure relating to the removal of members of the Advisory Committee;
Rule 14 of 1974 Rules is also relevant and reads thus;
Orders regarding sale or supply of molasses.A consolidated statement of the
estimated availability of molasses will be drawn up and placed before the
Advisory Committee, constituted under Section 3(1) of the Act, by the
Controller who may make orders regarding the sale or supply of molasses in accordance
with the provisions of Section 8 of the Act.
exercise of power under Clauses (a) and (b) of sub-section (2) of Section 22
read with Section 3 of the Act, the Governor of Uttar Pradesh framed rules
known as the U.P. Molasses Advisory Committee Rules, 1965.
provides for constitution of Committee and reads as under:
The Advisory Committee to be constituted under Section 3 of the Act shall
Controller who shall be ex officio Chairman.
the Assistant Excise Commissioner, In charge of Molasses at the Headquarters of
the Excise Commissioner, Uttar Pradesh who shall be ex officio Secretary.
The Director of Industries, Uttar Pradesh or his representative not below the
rank of Deputy Director of Industries;
The Cane Commissioner, Uttar Pradesh, or his representative not below the rank
of Deputy Cane Commissioner;
Three representatives of sugar factories in Uttar Pradesh to be nominated by
the Indian Sugar Mills Association (U.P. Branch);
Three representatives of distilleries in Uttar Pradesh to be nominated by the
Uttar Pradesh Distillers Association;
One representative of the alcohol based industries in Uttar Pradesh to be
nominated by the Uttar Pradesh Alcohol Based Industries Development
One representative of Moulding and Foundry Industry in Uttar Pradesh to be
nominated by the Excise Commissioner, Uttar Pradesh; and (ix) Managing
Director, the Uttar Pradesh Co- operative Sugar Factories Federation Ltd.
a representative is not nominated by the concerned Association under Clause
(v), (vi) or (vii) of sub-rule (1) within the time specified in that behalf by
the State Government, it shall be lawfully for the State Government to nominate
the representative or representatives, as the case may be, under that clause.
While Rule 6 prescribes term of office of members and reconstitution of the
Committee, Rule 7 deals with vacancy caused by death, resignation or removal of
members. Rule 8 provides for quorum for meeting. Rules 9 and 10 prescribe time,
place and agenda for the meeting of the Committee and preparation of minutes of
resolutions passed and decisions taken.
11 requires the Chairman of the Committee to forward such resolutions to the
further appears that by a notification dated November 24, 1965, such Committee
had been constituted. The Notification was also published in U.P.
Gazette, Extraordinary and reads thus:
No.5586-E/XIII-251-65, dated 24th November, 1965, published in U.P. Gazette, Extra.,
dated November 24, 1965.
exercise of the powers under Section 3 of Uttar Pradesh Sheera Niyantran Adhiniyam,
1964 (Uttar Pradesh Act XXIV of 1964) read within Rules 3 and 5 of the Uttar
Pradesh Molasses Advisory Committee Rules, 1965, the Governor of Uttar Pradesh
is pleased to constitute an Advisory Committee to advise on matters relating to
the control on storage, supply, gradation and prices of molasses with effect
from the date of issue of this notification and further pleased to direct that
the said Committee shall consist of the following persons:
Controller of Molasses, Uttar PradeshEx Officio Chairman
Assistant Excise Commissioner (Molasses), Uttar PradeshEx Officio Secretary.
The representatives of Sugar Factories Sri V.D. Jhunjhunwala Kamlapat Moti Lal
Sugar Mills, Motinagar, district Faizabad.
B.C. Kohli, Ganga Sugar Corporation Ltd., Deoband, district Saharanpur.
L.N. Wahi, Indian Sugar Mills Association, Uttar Pradesh Branch, Sri Niwas, I, Kabir
Three representatives of Distilleries Sri Bansi Dhar, Director, Managing
Agents, Messrs Delhi Cloth & General Mills Co. Ltd., Bara Hindu Rao, Post
Box No.1039, Delhi.
D.S. Majithia Messrs, Saraya Distillery, Sardarnagar, Gorakhpur.
V.R. Mohan, Dyer Meakin Brewery Ltd., Lucknow.
One representative of Moulding and Foundry Industries Sri Raman, Secretary,
Agra Iron Founders Association, Agra.
One representative of Tobacco Manufacturers Association, Varanasi.
The Director of Industries, U.P. or his representative.
Sri Ram Surat Prasad, M.L.A., Mohalla Mohaddipur, Gorakhpur.
Reading the substantive provisions in the Act as also subordinate legislation
by way of Rules, there is no doubt in our minds that the submission of the
learned counsel for the writ petitioner that such a Committee ought to have
been constituted by the State is well- founded and must be upheld. The High
Court dealt with the submission of the writ petitioner but did not accept it
observing that the Legislature had used the expression may and not
shall in Section 3 of the Act. The Court ruled that the provision was
merely directory and not mandatory.
are unable to subscribe to the above view.
judgment, mere use of word may or shall is not conclusive.
The question whether a particular provision of a statute is directory or
mandatory cannot be resolved by laying down any general rule of universal
application. Such controversy has to be decided by ascertaining the intention
of the Legislature and not by looking at the language in which the provision is
for finding out the legislative intent, the Court must examine the scheme of
the Act, purpose and object underlying the provision, consequences likely to
ensue or inconvenience likely to result if the provision is read one way or the
other and many more considerations relevant to the issue.
Several statutes confer power on authorities and officers to be exercised by
them at their discretion.
power is in permissive language, such as, it may be lawful, it
may be permissible, it may be open to do, etc.
certain circumstances, however, such power is coupled with duty and
must be exercised.
more than a century in Baker, Re, (1890) 44 Ch D 262, Cotton, L.J. stated;
think that great misconception is caused by saying that in some cases may
never can mean must, so long as the English language retains its
meaning; but it gives a power, and then it may be question in what cases, where
a Judge has a power given by him by the word may, it becomes his duty
to exercise it.
leading case of Julius v. Lord Bishop of Oxford, (1880) 5 AC 214 : 49 LJ QB 580
: (1874-80) All ER Rep 43 (HL), the Bishop was empowered to issue commission of
inquiry in case of alleged misconduct by a clergyman, either on an application
by someone or suo motu. The question was whether the Bishop had right to refuse
commission when an application was made. The House of Lords held that the
Bishop had discretion to act pursuant to the complaint and no mandatory duty
was imposed on him.
Earl Cairns, L.C., however, made the following remarkable and oft-quoted
words it shall be lawful are not equivocal. They are plain and
are words merely making that legal and possible which there would otherwise be
no right or authority to do. They confer a faculty or power and they do not of
themselves do more than confer a faculty or power. But there may be something
in the nature of the thing empowered to be done, something in the object for
which it is to be done, something in the title of the person or persons for
whose benefit the power is to be exercised, which may couple the power with a
duty, and make it the duty of the person in whom the power is reposed, to
exercise that power when called upon to do so. (emphasis supplied)
Explaining the doctrine of power coupled with duty, de Smith, (Judicial
Review of Administrative Action, 1995; pp.300-01) states:
the question before a court is whether words which apparently confer a
discretion are instead to be interpreted as imposing duty. Such words as may
and it shall be lawful are prima facie to be construed as permissive,
not imperative. Exceptionally, however, they may be construed as imposing a
duty to act, and even a duty to act in one particular manner.
supplied) 35. Wade also says (Wade & Forsyth;
Law: 9th Edn.) : p.233):
hallmark of discretionary power is permissive language using words such as
may or it shall be lawful, as opposed to obligatory
language such as shall. But this simple distinction is not always a
sure guide, for there have been many decisions in which permissive language has
been construed as obligatory.
is not so much because one form of words is interpreted to mean its opposite,
as because the power conferred is, in the circumstances, prescribed by the Act,
coupled with a duty to exercise it in a proper case. (emphasis supplied)
the leading case of Padfield v. Minister of Agriculture, Fisheries & Food,
1968 AC 997 : (1968) 1 All ER 694 : (1968) 2 WLR 924 (HL), the relevant Act
provided for the reference of a complaint to a committee of investigation
if the Minister so directs. The Minister refused to act on a
complaint. It was held that the Minister was required to act on a complaint in
absence of good and relevant reasons to the contrary.
Likewise, it was held that the licensing authorities were bound to renew licences
of cab drivers if the prescribed procedural requirements had been complied with
[R.V. Metropolitan Police Commissioner, (1911) 2 QB 1131]. Similarly, local
authorities were held bound to approve building plans if they were in
conformity with bye-laws [R.V. Nescastle-upon-Tyne Corporation, (1889) 60 LT
963]. Again, the court was required to pass a decree for possession in favour
of a landlord, if the relevant grounds existed [Ganpat Ladha v. Shashikant,
(1978) 3 SCR 198 : (1978) 2 SCC 573].
Alcock v. Chief Revenue Authority, 50 IA 227 : AIR 1923 PC 138, the relevant
statute provided that if in the course of any assessment a question arises as
to the interpretation of the Act, the Chief Revenue Authority may
draw up a statement of the case and refer it to the High Court. Holding the
provision to be mandatory and following Julius, Lord Phillimore observed:
a capacity or power is given to a public authority, there may be circumstance
which couple with the power of duty to exercise it.
Commissioner of Police v. Gordhandas Bhanji, 1952 SCR 135 : AIR 1952 SC 16,
Rule 250 of the Rules for Licensing and Controlling Theatres and Other Places
of Public Amusement in Bombay City, 1884 read as under:
Commissioner shall have power in his absolute discretion at any time to cancel
or suspend any licence granted under these Rules.
was contended that there was no specific legal duty compelling the Commissioner
to exercise the discretion. Rule 250 merely vested a discretion in him but it
did not require him to exercise the power. Relying upon the observations of
Earl Cairns, L.C., the Court observed:
discretion vested in the Commissioner of Police under Rule 250 has been
conferred upon him for public reasons involving the convenience, safety,
morality and the welfare of the public at large. An enabling power of his kind
conferred for public reasons and for the public benefit is, in our opinion, coupled
with a duty to exercise it when the circumstances so demand. It is a duty which
cannot be shirked or shelved nor can it be evaded (emphasis supplied)
Ratlam Municipality v. Vardichan, (1981) 1 SCR 97 : (1980) 4 SCC 162; some
residents of Ratlam Municipality moved the Sub-Divisional Magistrate under
Section 133 of the Code of Criminal Procedure, 1973 for abatement of nuisance
by directing the municipality to construct drainpipes with flow of water to
wash the filth and stop the stench. The Magistrate found the facts proved and
issued necessary directions. The Sessions Court, in appeal, reversed the order.
The High Court, in revision, restored the judgment of the Magistrate and the
matter was carried to the Supreme Court.
Krishna Iyer, J. pithily summarized the principle thus;
key question we have to answer is whether by affirmative action a court lean
compel a statutory body to carry out its duty to the community by constructing
sanitation facilities at great cost and on a time-bound basis. At issue is the
coming of age of that branch of public law bearing on community actions and the
court's power to force public bodies under public duties to implement specific
plans in response to public grievances.
Holding the provision obligatory, the Court observed:
discretion when facts for its exercise are present, has a mandatory import.
when the sub-Divisional Magistrate, Ratlam, has, before him, information and
evidence, which disclose the existence of a public nuisance and, on the
materials placed, he considers that such unlawful obstruction or nuisance
should be removed from any public place which may be lawfully used by the
public, he shall act. This is a public duty implicit in the public power to be
exercised on behalf of the public and pursuant to a public proceeding.
do not wish to refer to other cases on the point. We are, however, in agreement
with the observations of Earl Cairns, L.J. in Julius referred to above wherein
His Lordship stated;
a power is deposited with a public officer for the purpose of being used for
the benefit of persons who are specifically pointed out, and with regard to
whom a definition is supplied by the Legislature of the conditions upon which
they are entitled to call for its exercise, that power ought to be exercised,
and the Court will require it to be exercised.
the case on hand, considering the legislative scheme as also Rules and
particularly Rules relating to constitution of Committee, namely, the U.P.
Molasses Advisory Committee Rules, 1965, in our opinion, investment of power in
the State Government is not merely enabling or discretionary. It is obligatory
on the Government to constitute a Committee to carry out the purpose and object
of the Act. The Committee has to perform an important role of advising the
State Government on matters relating to the control of storage,
preservation, gradation, price, supply and disposal of molasses. The
constitution of the Committee, as envisaged by Rule 3 of the 1965 Rules clearly
shows the representation of various groups and interests likely to be affected.
Rule 11 requires the Chairman (Controller of Molasses) to give due
consideration of the resolutions passed by the Committee and forward it to the
State Government for orders together with a copy of the proceedings and his
recommendations. In our considered opinion, it is not open to the State
Government to ignore this salutary provision taking specious plea that the
provision relating to constitution of Committee is enabling, directory or
discretionary and State, therefore, is not obliged to constitute such
Committee. In our judgment, the High Court was not right in upholding the
argument of the respondents. We, therefore, hold that in accordance with the
provisions of 1964 Act, the Rules framed thereunder as also under 1965 Rules,
it is the duty of the State Government to constitute Advisory Committee. We
accordingly direct the State of Uttar Pradesh to constitute Advisory Committee
as expeditiously as possible.
For the foregoing reasons, in our opinion, the appeal deserves to be allowed
and the order of the High Court deserves to be set aside. It is, accordingly
held that the directive issued by the respondents would not apply in case there
is no balance stock of molasses with any sugar mill. The respondent-authorities
have no right to compel such sugar mills to supply 20% molasses for the purpose
of manufacturing country liquor.
may, however, make one thing clear. As seen above, the assertion of the
appellant was that it has no balance stock and even for its own requirement, it
has to import molasses. On the other hand, the allegation of the respondents is
that excess and balance molasses was available with the appellant which it had
sold in open market. The High Court, in the impugned order has not decided the
question finally. Quoting certain paragraphs from the writ-petition, the High
Court observed that there was no proper pleading and as such, the Court was not
in a position to go into the question. It is, therefore, made clear that it is
open to the respondents to take appropriate action in accordance with law on
the basis of our decision and observations made in this judgment.
The appeal is allowed to the extent indicated above. On the facts and in the
circumstances of the case, however, the parties will bear their own costs.