MAHARASHTRA RAJYA SAHKARI SAKKAR KARKHANA SANGH LTD. ETC. ETC. versus STATE OF MAHARASHTRA AND ORS. ETC. ETC.

Citation: [1995] 3 S.C.R. 377 · Decided: 18-04-1995 · Supreme Court of India · Bench: R.M. SAHAI · Disposal: Disposed off

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Judgment (excerpt)

-./ 
. , 
MAHARASHTRA RAJYA SAHKARI SAKKAR KARKHANA 
A 
SANGH LTD. ETC. ETC. 
v. 
STATE OF MAHARASHTRA AND ORS. ETC. ETC. 
APRIL 18, 1995 
B 
(R.M. SAHAI, B.P. JEEVAN REDDY AND S.C. SEN, JJ.] 
Sugarcane Act, 1934/Maharashtra Cooperative Societies Act, 1960 : 
S.3(1) ss.22,23-Sugar-cane (Control) Order, 1966: 
c 
Maharashtra Sugar Factories (Reservation of Area and Regulation of 
Crushing and Sugarcane Supply) Order 1984 (as amended in 1987)-Sugar· 
cane-Zoning or reservation of area for supply of sugar-cane to factories a11d 
fvcation of price for each zone is not violative of the Acts or 1966 Order--
Uniform pricing for cane growers (whether non-members or members of 
co-operative societies) attached to sugar factory in reserved area is D 
vali<f;-Directions given to improve price structure and to protect interest of 
cane-growers. 
Essential Commodities Act, 1957 : ss.3(2) (f), 3(3)(c)-f'rovisio11S 
under Maharashtra Sugar Factories (Reservation of Areas and Regulatio11 of E 
Crushing and Sugar-cane Supply) Order, 1984, directing a sugar-cane to 
producer in a reserved area to supply sugar-cane to factory concerned does 
not amount to compulsory sale. 
The Government of Maharashtra, in order to ensure supply of cane 
to sugar factories and mlnlmuoi price to cane-growers, Issued F 
Maharashtra Sugar Factories (Reservation of Areas and Regulation of 
Crushing and Sugarcane Supply) Order, 1984. Clause 3 of the Order 
provided that having regard to the crushing capacity of sugar factories 
and the yield of sugarcane In the reserved areas and the need for produc· . 
on of sugar, the area specified In the Schedule to the Order .would be G 
served for the sugar factory with a view to enabling It to purchase the 
quired quantity of sugarcane. Sub-clause (2) of Clause 3 prohibited any 
ugar factory from purchasing cane or accepting supplies of cane from 
ane growers except from the area reserved for that factory. Sub-clause 
lA) added to clause 3 and sub-clause (6A) added to Clause 6, by 
aharashtra Sugar Factories (Reservation of Areas and Regulation of H 
377 
378 
SUPREME COURT REPORTS 
(1995] 3 S.C.R. 
A 
Crushing and Sugarcane Supply) (Second Amendment) Order, 1987 em-
powered the licensing authority to allow a sugar factory to manufacture 
sugar from the sugarcane to be purchased by it from non-members within 
lhe area reserved for it. 
Writ petitions were filed before the High Court challenging the 1984 
B Order as being beyond the scope of the Central Sugar-cane (Control) 
Order 1966 and violative of Articles 14 and 16 of the Constitution. For the 
cane growers it, was contended that the order in preventing them from 
selling their sugar-cane at the best price available imposed an un-
reasonable restriction inasmuch as in the process of reservation they were 
C deprived of the highest price in the area. The High Court upheld the 
reservation policy. On behalf of the Government, it was stated before the 
Court that the Government would follow a fair procedure in order to 
ventilate grievances of the non-members. The note showing the procedure 
to be followed, produced before the High Court, was found reasonable but 
D the Bench opined that it required to be given statutory shape by amending 
the 1984 Order. 
Later, In a different case, the High Court held that since the neces· 
sary amendments were not carried out by the Government as pointed out 
In the earlier decision, the sugarcane gl'Olftn had a right. to supply 
E sugarcane to the factory of their choice for better price. On a contrary view 
being taken by another Bench, the matter was referred to a larger Bench. 
The Full Bench of the High Court opined that the issue of depriva-
tion of sugarcane growers of best price available to them was not debated 
F in the earlier decisions and held that since there was no power In the State 
Order to llx the maximum price payable to the cane growers, the cane 
growers, who were not members of any cooperative society, were not bound 
by the price fixed by the State Government. The High Court also held that 
the supply by the cane growers belDK in the nature of compulsory sale, the 
cane growers were entitled to supply the sugarcane at the market rate. The 
G High Court for 1993·94 r1Xed the market price at Rs. 740 atonne as against 
340 to Rs. 400 rlXed by the Government, and directed that (I) the non-mem-
ber cane-growers would be paid market price prevailing In the locality; (II) 
the market rates would be as agreed bet

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