LexLINGO SULPHITE CORPORATION OF INDIA LTD. & ORS. versus U.P. STATE SUGAR CORPORATION LTD., UNIT, BIJNOR & ORS.
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LINGO SULPHJTfj CORPORATiON OF
INDIA LTD. & ORS.
v.
U.P. STATE SUGAR CORPORATION LTD.,
UNIT, BIJNOR & ORS.
January 27, 1982
(S. MURTAZA FAZAL ALI AND R.B. MISRA, JJ.j
Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 (U.P. Act No. 24 of 1964), ·
sections 8 and 9 read. with rule 22( 1) and 22(2) of the Uttar Pradesh Sheera
Niyantran Niyamavali, 1974-Scope of-Classification made wilh regard io molasses
co•ered under rule 22( I) and 22(2} is reasonable and does not offend Article 14 of
tM Constitution-Esto_pptl by conduct-Here, thert is no question of contracting
out of/aw.
Molasses, the basic raw.material for the manufacture of lingo-suJphite,
basic refractories, steel plants, cement factories. carbon black plants and many
other important industries and also used for distillation, bas become a valuable
commodity on account of its multi·use.
The preservation, distribution and.
prices of the molasses were, .therefore, controlled by the Uttar Pradesh Sheera
Niyantran Adhiniyam, 1964 (U.P. Act 24 of 1964) and also the rules made
thereunder called Vttar Pradesh Sheera Niyantran NiyamavaJi, 1974.
Section
8 of tho Act authorised the Controller to direct the occupier of any sugar factory
to sell and supply in the prescribed manner sucb quantity of molasses to such
persons as may be specified in the order and the occupier shall notwithstanding
any contract comply with the order. Section 10 provided that the occupier of
a sugar factory shall sell molasses in respect of which an order under section 8
has been made at a price not exceeding that prescribed in the schedule attached
to section IO.
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United Commercial Syndicate, Allahabad is .the purchasing agent of M/s.
Lingo Sulphite Corporation and M/s. Audubon Trading and Export Corporation
of Allahabad and Calcutta, entered into an agreement with the U.P. State Sugar
Corporation Ltd. whereunder the latter agreed to sell 28,300 quintals of molasses
of 1977-78 production at the statutory price of Rs .. 9 per quintal and dlities
etc. provided the former agreed to pay the total amount of Rs. 3 lacs being the
total cost of molasses as estimated at the said statutory price. It was further
stipulated that in case the said _price was not valid in Jaw, The United.
Commercial Syndicate will have to pay the price at the rate of Rs. 25-10 per
quintal inclusive of administrative charges and other taxes and duties etc. as
agreed to by the Syndicate.
A sum of Rs. 2 lacs had been paid in pursuance
of the agreement and the balance of Rs. 1 lac was to be paid at the earliest.
The Sugar Corporation however sought to calcutate the price of the molasses
in question at the rate of Rs. 25-10 per quintal on the ground that the molasses
agreed upon was not covered by an order under section 8.
Syndicate filed two
petitions in the High Court of Allahabad for a writ of mandamus or any other
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i.INOO SULPHAtll OORPN. V. U.P.S.S. CoRPN.
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appropriate writ or direction declaring that Corporation was not entitled;o
charge the price for the molasses in excess of the price fixed by the Act, .namely,
Rs. 9 per ·quintal.
The High Court by its order dated 21st October, 1979
dismissed the petitions in limine.
Hence the appeal by special leave _by the
Syndicate and the writ petition by the principal M/s. Lingo Sulphite Corporation.
Dismissing the appeal and the writ petition, the Court,
HELD : I. Sections 3 to 8 and 10 of the Adhiniyam and Niyamavall
12, 13, 22, 23 and 24 make it clear that the occupier of a sugar factory can sell
molasses to a person specified in the order of the Controller at the cont!olled
price. The occupier of every sugar fa,ctory has to give an estimate of the mola~
to be produced in the sugar factory as also the estimate- of requirement of
molasses for distillation and industrial purposes.
If there is any surplus after
meeting the requirements of the persons in whose favour there is an order of the
Controller, the same will bo released in favour of tho occupier. [71 H, 72 A-BJ
2. Section 10 makes it clear that the occupier of a sugar factory is obliged
to sell molasses at the price not exceeding that prescribed in the schedule only in
respect-of which an order under'section 8 has been made. But sub-clause (2) of
rule 22 authorises the Controller to release any stock of molasses in favour of an ~
occupier of a sugar factory only when the same is not required fExcerpt shown. Read the full judgment & AI analysis in Lexace.