MAHALAKSHMI SUGAR MILLS CO. LTD. & ANR. versus UNION OF INDIA & ORS.

Citation: [2008] 5 S.C.R. 793 · Decided: 31-03-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

[2008] 5 S.C.R. 793 
-+ 
MAHALAKSHMI SUGAR MILLS CO. LTD. & ANR. 
A 
v. 
UNION OF INDIA & ORS. 
(Civil Appeal No. 2258 of 2008) 
MARCH 31, 2008 
B 
,. 
(S.B. SINHA AND V.S. SIRPURKAR, JJ.) 
~ 
Essential Commodities Act, 1955: 
s.3(3C)-Price fixation of levy sugar-Factors to be taken c 
into consideration - HELD: Fixation of price of levy sugar is 
within realm of Central Government - Determination of price 
of levy sugar is required to be carried out keeping in view the 
factors specified in s.3(3c).:.. Additional price paid to sugarcane 
growers by sugar producers under clause 5-A of Sugarcane 
(Control) Order, 1966 and State Advisory Price as mandated D 
x 
by State Government would be taken into account in 
determining the price of levy sugar - Central Government 
directed to refix price of levy sugar - Direction confined to 
parties before the Court including interveners - Sugarcane 
(Control) Order, 1966 .:.. Clause 5-A. 
E 
Administrative Law: 
Subordinate Legislation - Price fixation of levy sugar -
HELD: Determination of price in terms of statutory provisions 
is legislative function validity whereof may be questioned on 
F 
the grounds enumerated in the judgment - Judicial review 
Interpretation of Statutes: 
Purposive construction and executive construction -
HELD: when legislative policy is reflected in a statutory 
provision, Court while being called upon to determine as to G 
whether the same has been complied with or not must apply 
• -..,!. 
rule of purposive construction -
Rules of executive 
construction may a/so be applied in an appropriate situation. 
793 
H 
794 
SUPREME COURT REPORTS 
[2008] 5 S.C.R. 
A 
The sugar producers, namely, appellants, in CA No. 
2258 of 2008 and respondents in CA Nos. 2260 and 2261-
2272 of 2008, filed writ petitions before the High Court of 
Delhi challenging determination of price of levy sugar for 
the sugar years 1983-84 and 1984-85. It was the stand of 
B the sugar producers that in pursuance of the Bhargava 
Commission Report, the Central Government inserted 
clause 5-A in the Sugarcane (Control) Order, 1966 as a 
result whereof additional price came to be paid by the 
sugar producers to the sugarcane growers over and 
c above the Statutory Minimum Price and equivalent 
amount from free market sale realization came to be 
retained by the sugar producers, but the Government 
while determining the price of levy sugar under s.3(3C) of 
the Essential Commodities Act, 1955 did not consider the 
0 factors resulting from insertion of clause 5-A in the 
Sugarcane (Control) Order 1966, and continued 100% 
mopping up of the extra sale realization. It was, therefore, 
contended that 100% mopping up was illegal and the 
liability of the sugar producers towards the cane growers 
arising out of clause 5-A of the Order was to be considered 
E before arriving at the price of levy sugar. 
Meanwhile, in Malaprabha-11 , the Supreme Court held 
that the liability of sugar producers under clause 5-A of 
the Sugarcane (Control) Order would be taken into 
F account while determining the price of levy sugar, and 
directed the Union of India to amend the relevant 
notifications. In Modi Industries Ltd. 2 pertaining to sugar 
year 1982-83 the stand of the Central Government was 
that the additional cane price payable under clause 5-A of 
G the Sugarcane Control Order had not been taken into 
consideration and furthermore, no mopping up of excess 
1 Shri Malaprabha Cooperative Sugar Factor v. Union of India (Malaprabha-
1) 1993(2) Supp. SCR 415= (1994) 1sec648 
H 
2 Modi Industries Ltd. & Anr. v .. Union of India & Ors. (1999) 9 SCC 245 
... 
MAHALAKSHMI SUGAR MILLS CO. LTD. & ANR. v. 
795 
UNION OF INDIA & ORS. 
--t-
realization of free sugar sale was resorted to while fixing A 
price of the levy sugar for the said year. Therefore, the 
Court opined that in the facts of the case, Ma/aprabha-1 
was not applicable. Similar orders were passed in Bharat 
Sugar Mills3 and Triveni Engineering Works4 cases. Again 
in Malaprabh-115 , distinguishing Modi Industry Ltd. case, 
B 
I 
the Court reiterated its view in Malaprabha-1 that the new 
~ liability under clause 5-A of Sugarcane (Control) Order 
cast upon the sugar producers was to be taken into 
consideration while fixing the price of levy sugar. 
Two different Benches of the Court of Delhi High took c 
different views of the decisions of the Supreme Court. In 
the writ petition filed by Maha/akshmi Sugar Company 
(giving rise to CA No. 2258 of 

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