M/S. SIEL LTD. AND ORS. ETC. versus UNION OF INDIA AND ORS.

Citation: [1998] SUPP. 1 S.C.R. 560 · Decided: 11-09-1998 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
M/S. SIEL LTD. AND ORS. ETC. 
v. 
UNION OF INDIA AND ORS. 
SEPTEMBER 11, 1998 
[M.M. PUNCHHI, CJI, AND SUJATA V. MANOHAR, JJ.] 
J/1dusflies (Development & Regulation) Act, 1951/Uttar Pradesh Sheera 
Niyantran Adhiniyam, 1964/Molasses Control Orde1; 1961/Constitution of 
India, 1950: Sections 2 and 18G/Section JO/Clause 1(2)/Schedule VII, List 
I and III-Colltrol over sugar indust1y taken over by the Central Govemment 
in 1953-Tlze Sheera Act enacted by the State of UP. in 1964-Molasses 
Control Order promulgated by the Central Govemment in 1961-Control 
Order not extended to the State of U.P.-State of U.P. fixed the maximum 
p1ice of molasses by notifications issued under Section JO of the Sheera 
D Act-Molasses Control Order rescinded by the Central Govemment-State of 
U.P. continued to issue notifications under the Sheera A ct-Challenge to the 
constitutional validity of the Sheera Act dismissed by the High Cowt-On 
appeal, Held: Section 18G is covered by Concwre1it List and not the Union 
List-Any notification under Section 18G is an exercise of power confe1red 
by Ent1y 33 of the Concwrent List-Molasses Control Order not extended to 
E the State of U.P., the ref ore, no repugnancy with the She era Act-State of U.P. 
empowered to issue notifications under Section 10 of the Sheera Act. 
lllleqJretation of Statutes--Overlapping between the Union and State 
legislation-Vires of State legislation challenged--Held--Encroachment alone 
F does not affect vires of legislation-Regard to the enactment as a whole with 
reference to object and scope is required. 
In pursuance of Section 2 of the Industries (Development & Regula-
tion) Act, 1951, control over the sugar industry was taken over by the 
Union Government in 1953 by introducing Section 18G in the said Act. In 
G 1961 the Central Government promulgated the Molasses Control Order 
under Section 18G of the IDR Act which imposed restriction on the sale 
of molasses and fixed the maximum price of molasses, Clause 1(2) of the 
Molasses Control Order provided that it shall come into force in a State 
on such date as the Central Government may, by notification in the Official 
H Gazette, appoint. Similarly Ethyl Alcohol Price Control Order was also 
560 
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SIEL LTD. v. U.O.L 
561 
issued in 1971. As the said Molasses Control Order was never extended to 
the State of U.P., the Government of U.P. used to notify maximum price 
of molasses, under Section 10 of the Uttar Pradesh Sheera Niyantran 
Adhiniyam, 1964, in consonance with the maximum price prescribed by the 
Central Government under the Molasses Control Order. In June, 1993 the 
said Molasses Control Order ·and the Ethyl Alcohol Control Order were 
rescinded by the Central Government by notification. However, in the State 
of U.P., the Sheera Niyantran Adhiniyam continued to operate. The Con· 
troller of Molasses/Excise Commissioner. U.P., thereafter, issued three 
notifications, under Section 10 of the Sheera Act, in 1993 and 1994 reserv-
A 
B 
ing different percentages of graded molasses for distilleries and industries 
based on molasses and alcohol which reCJuired to be sold at prices fixed 
C 
by the State Government under the said notifications. The appellants' 
challenge to constitutional validity of the Sheera Act on the ground of 
legislative incompetence of the U.P. Legislature was dismissed by the High 
Court.· Hence, the present appeals. 
The appellant contended that the State of U.P., by reason of Entry D 
25 in the First Schedule to the IDR Act, had no legislative competence to 
pass the Sheera Act or Orders thereunder as all legislation pertaining to 
sugar indnstry was within the exclusive domain of the Union Government 
being covered entinly by Entry 52 of List I of the Vllth Schedule to the 
Constitution of India. According to the respondents, as the Molasses E 
Control Order was never brought into operation in the States of U.P. and 
Bihar, the Power of the State of U.P. under Entry 33, List II of the VI Ith 
Schedule to the Constitution to legislate in relation to the trade and 
commerce in or supply and distribution of molasses in that State was not 
taken away as a result of which no repugnancy had been created between 
F 
the Union and the State Legislations. 
Dismissing the appeals, the Court 
HELD : 1.1. Section 2 of the Industries (Development & Regulation) 
Act, 1951 clearly declares an industry which is in the First Schedule as an 
industry falling under Entry 52 of List I of the Vl

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