INDIA SUGARS & REFINERIES LTD. versus AMRAVATHI SERVICE CO-OPERATIVE SOCIETY LTD.

Citation: [1976] 2 S.C.R. 740 · Decided: 19-11-1975 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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740 
INDIA SUGARS & REFINERIES LTD. 
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AMRAVATHI SERVICE CO-OPERATIVE SOCIETY LTD. 
November 19, 1975 
[A. N. RAY, C.J. AND N. L. UNTWALIA, J.] 
Natural Justice-Duty to act judicially and according to natural justice 
depends on nature of interest to be affected-Circumstances for exercise of powers 
and sanctions illl'O/ved-Sugar Cane Control Order, 1966 Clause 5(1), 5(3) 
and 5(5)-[Sugar Cane Control (Additional Powers)Act 1962]-Sugarcane grow-
ers to be heard both while fixing quantum of additional price as well as while 
granting exemption from payment of additional price. 
The re5pondent are co-operative societies of growers of sugarcane. who 
supplied sugarcane to the appeilant which is. a sugar manufacturing factory. 
The use and supply of sugaDcane is controlled under the provi;;ions of the 
Essential Commodities Act, 1955. The Sugarcane 
Control 
Order, 
1955 
empowers the Government to fix the minimum price payable by the manufac-
turer of sugar to the grower of sugarcane. In 1962, the Sugarcane Control 
(Additional Powers) Act, 1962 came into existence. Pursuant to the powers 
conferred by the 1962 Act, the Central Government amended the 1955 Control 
Order by intrQ_ducing clause 3A providing for payment of additional price for 
sugarcan.e purchased by the producers of sugar. The 1955 Control Order was 
repealed and replaced- by the Sugarcane Control Order 1966. The respondents 
are recognised by the Government of India and the appellant for the purpose 
of 1966 Control Order. Under the 1966 order the Government was competent 
to denote an area where sugarcane is grown as a reserved area for factory. 
The sugarcane grown in that area is required to be sold to the allotted f'actory. 
The Government controls all aspects of the use of sugarcane grown in the 
reserved area. The 1966 order provides for fixation of minimum price of sugar-
cane payable by manufacturers of sugar to the growers. Jn determining the 
minimum price the Government is required to take into account (i) cost of 
production of sugarcane, (ff) return to the grower rrom alternative crops and 
the general trend of prices 9f agricultural commodities; (iii) the availability of 
su,gar to the consumer at a fair price; (iv) the price at which sugar is sold by 
the producers; and (v) the recovery of sugar from sugarcane. 
The 1966 Control Order further provides for payment of additional price 
in addition to the minimum pr~. On determination of the price the same 
is required to be intimated in writing to the producers of sugar, growers, C9-
operative Societies of Growers or the local Growers' Association. 
An appeal 
is provided to the Government of India against the determination cf the addi-
tional price. Clause 5(3) of the 19'66 Control Order provides that if 
the 
Central Government is satisfied that during any year a factory has made no 
profit or has made inadequate profit. that Go.vernment may exempt either wholly 
or partially any producer of sugar from payment of the additional price. The 
relevant authority under the 1966 Control Order fixed additional price payable 
by the appellants to the respondent. No appeal w.as preferred either by the 
appellant or the respopdent. 
The appellants did not pay the additional price. Appellant made applica-
tions seeking exemption on the ground that the appellants had made inadequate 
profits. The Government exempted the appellants from paying whole of the 
additional price for the year 1961-62 and reduced the additional price for the 
year 1960-61 without giving any opportunity of being heard to the respondents. 
Th!! r~s11<?ndei:its challe.nged the validity of the grant of exemption by filing a 
~nt petition m )he High Court. 
The High Court allowed the said writ peti-
hov on the ground that the order of the Central Government was violative of 
principles of natural justice, since no opportunity was given to the respondent~ 
to be heard in the matter. 
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INDIA SUGARS & REFINERIES V. AMRAVATHI CO-OP. SOCIETY 
(Ray, C.J.} 
pismissing the appeal by certificate, 
741 
HELD: (1) Clause 5(11 provide~ for the payment of additional price and 
clause 5 (3) provides for exemption from the payment of additional price. 
Clause 5(5) provides for filing .an appeal to the Central Government by 
anY 
person feeling aggrieved by the -decision of the fixation of additional price. 
The power to grant exemption cannot be said to be independent of the pro-
visions of clause 5 of the orde

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