LAXMI KHANDSARI ETC. ETC. versus STATE OF U.P. & ORS.

Citation: [1981] 3 S.C.R. 92 · Decided: 09-03-1981 · Supreme Court of India · Bench: S. MURTAZA FAZAL ALI · Disposal: Dismissed

Cited by 8 judgment(s) · cites 14 · see the full citation network in Lexace

Judgment (excerpt)

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LAXMI KHANDSARI ETC. ETC. 
v • 
. STATE OF U.P. & ORS. 
March 9, 1981 
[S.' MURTAZA FAZAL ALI AND A.D. KOSHAL, JJ.J 
Essential Commodities Act 1955, S. 3 and Sugarcane (Control) Order 1966, 
Clause 8-Notification by Cane Commissioner-1mpo$ition of a ban for a month and 
half on operation of power crushers of Khandsari units in· reserved area of mill-
Va/idity of-Exemption in favour of vertical power crushers-Whether di~crimina· 
tory and justified. 
, In' the State of Uttar Pradesh, sugarcane was produced by the sugarmills 
through the 'hydraulic process' and by the power crushers through the 'open pan 
process'. Both the mills as also the crushers drew their raw material, namely 
sugarcane from sugarcane growers. In order to facilitate production by the 
sugar mills, most of which were controlled ·by the State, reserved area of. the 
fields growing sugarcane was fixed through out the State. 
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With a view to removing nation-wide shortage of sugar, enhancing sugar 
production and achieving an equitable distribution of the commodity so as to 
make it available to consumers at reasonable rates, the Cane Commissioner in 
exercise of the powers conferred under clause (8) of the Sugarcane (Control) 
Order, 1966 issued a notification dated 9th October, 1980 which directed that no 
power crusher other than vertical power crushers manufacturing gur or rab from 
sugarcane grown on their own fields or a Khandsari unit or any agent of such 
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owner in the reserved area of a mill could be worked until December I, 1980. 
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The petitioners who were owners of power crushers of Khandsari units and 
had taken out regular licences under the Uttar Pradesh Khandsari Sugar Manu-
facturers Licensing Order 1967, assailed the notification which limited the ban to 
work power crushers for a period of one month and a half i.e. from October 9. 
1980 to December 1, 1980 in writ petitions to this Court. 
They contended: 
(I) The notification, as also the Control Order under which it was passed are vio-
lative of Article J 9(1)(g) and the restrictions contained therein do not contain the 
quality of reasonableness. (2) Clause 8 of the Control Order under which the 
notification had been issued suffers from the vice of excessive delegation of 
powers and is, therefore, voilative of Article 14 of the Constitution. lhe 
Notification seeks to establish a monopoly in favour of the sugar mills at 
the cost of the petitioners, and must be struck down as being violative of 
Article 14. 
(3) There is no rational nexus between the prohibition contained 
in the Notification preventing the crushers of petitioners from working them 
and the object sought to be achieved by it. (4) Clause 8 of the Control 
Order does not contemplate a comolete prohibition of the production of an 
article but envisages only a regulation of the period of hours of working. 
(5) The Notification violates the principles of natural justice inasmuch as 
it was passed without hearing the petitioners whose rights were curtailed as 
they were put completely out of production. (6) The impugned Notification by 
imposing a prohibition against the working of the power crushers amounts to a 
partial revocation of the licences granted to the petitioners under clause 3 of the 
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LAXMI KHANDSARI ETC. ETC. V, U;P, STATE 
93 
Licensing Order and is, therefore violative of clause 11. (7) The impugned 
Notification goes against the very spirit and object of the Act of 1955 and in fact, 
frustrates the equal distribution and production of sugar which was the objective 
of the Notification. 
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On behalf of the respondent-State it was submitted that : (l) An _order 
passed under clause 8 of the Control Order is of a legislative character and "there· 
fore the question of the application of the principles of natural justice, does not 
arise. 
(2) The notification does not violate Article 14 or Article 19 because it is 
in public interest and aimed at maintaining and securing proper and equitable 
distribution of sugar. 
(3) The Notification is justified by the fact that the 
recovery of sugar from sugarcane in case of Khandsari · units run . by power 
crushers is between 4 to 6 per cent whereas in the case of sugar factories it ranges 
between 9-1/2 to 11-1/2 per cent, so that utilisation of sugarcane in the case of 
mills is double of that of the power crusher. 
(4) The Khandsari produced by the 
crushers has got a very narrow sphere of consumption as it is used mos

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