S.K.G SUGAR LTD. versus STATE OF BIHAR AND ORS.

Citation: [1997] 1 S.C.R. 279 · Decided: 15-01-1997 · Supreme Court of India · Bench: K. RAMASWAMY, S. SAGHIR AHMAD, G.B. PATTANAIK · Disposal: Dismissed
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Judgment (excerpt)

• 
.. 
S.K.G. SUGAR LTD. 
v. 
stA'fE OF BIHAR AND ORS. 
JANUARY i.5, 1991 
[K. RAMASWAMY, S. SAGHIR AHMAD AND 
G.B. PA'f'tANAIK, JJ.) 
Bihar Sugarcane (Regulation of Supply and Punhase) Act; 1981: Sec-
tions 31 and 42. 
Sugarcane (Control) Order, 1966: Clauses 3, 3A and 5A. 
Sugarcane--Pdce fixation-Appellant-Sugar Factory-Sugarcane sup-
plied by cane growers-Minimum price fixed by Central Govemment:-Appelc 
A 
B 
c 
!ant paid the mii1i111wi1 pdce detennined-Subsequently State Government. 
fixed the price in excess of the minimum p1ice fixed by Central GovenF .. D 
ment--Recovery pMceedings relating to dif!erence between the minimum price 
jiXed by Central Govemment and State Govemment--lssue of celtificate of 
dues f<Jr realisation under Recovery Act-Writ challenging recovery proceed-
lngS""iJismissal of appeaHleld the celtificate issued by the Collector was 
valid in law-A reading of the relevant Clauses in the Order does not show E 
_ that there is any prohibition on the factory or the association of the factories 
entering into an agreement to pay higher price than the minimum price 
prescribed under the Order-The State Government acted in their statutory 
capacity tofu: the increased price of the sugarcane-There was no need for 
the growers to file separate suit to recover the difference of the price-The. 
recovery proceedings were the appropriate course of action rightly adopted by F 
the State Govemmem. 
State of Madhya Pradesh v. Jaora Sugar Mills Ltd. & Ors. Etc., CA No. 
1811-14/96 decided on 10.10.1996 by Supreme Court, referred to. 
G 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 488-489 
of 1985 I 
From the Judgment and Order dated 13.11.84/8.1.85 of the Patna · 
High Court in C.W.T.C. No. 2370/84 and R.A. in W.P. No. C.W.J.C. No. 
~~~ 
H 
279 
A 
B 
c 
280 
SUPREME COURT REPORTS 
[1997] 1 S.C.R. 
Y.V. Giri, D.D. Thakur, Jyoti Saran, Praveen Kumar, Ms. Vijay 
Lakshmi Menon, Sunil Gupta, Mrs. A.K. Verma, P.O. Tyagi, D. 
Goburdhan, D.N. Gourdhan, Ms. Pinky Anand, Ms. Geela Luthra, B.B 
Singh, Ashok Kr. Singh, Ms. Subhashini, A. Sharan, Gopal Singh, A.P. 
Singh, L.R. Singh, V. Shekhar, V.D. Mahajan, P.R. Seelharaman, B. Par-
thasarathy, Ms. Rani Chhabra, Sanjiv Seth and M.A. Krishna Moorthy for 
the appearing parties. 
The following Order of the Court was delivered : 
These two appeals arise from the judgment of the Division Bench of 
the Patna High Court, made on November 13, 1984 in Order No. 11 and 
Review Order, arising thereunder in CWJC No, 2370/84. 
The admitted position is that the appellant factory had a 'reserved 
area' under ~.ection 31 pf the Bihar Sugarcane (Regulation of Supply and 
Purchase) Act, 1981 (for short, the 'Supply Act') and had the sugarcane 
D supplied by the growers. The Central Government, exercising the power 
under Clause 3 of the Sugarcane (Control) Order, 1966 (for short, the 
'Order') det~rmined the minimum price for sugarcane at Rs. 13.92 per 
quintal. The State Government announced on March 31, 1983 the price of 
Sugarcane at ~s. 20.50 per quintal. The cane growers supplied the sugar-
E cane to the appellant, but the appellant admittedly had paid ~!;., minimum 
price determined under the Order but the difference between the price 
fixed under the Order and the price annuunced by the State Government 
was not paid. As a consequence, the Collector gave a certificate of dues 
for realisation under the Revenue Recovery Act. Calling those proceedings 
in question, the writ petition came to be filed. The contention raised in the 
F High Court as well as in this Court is that the Central Government having 
determined the price of the sugarcane at Rs. 13.92 per quintal, tl;c State 
Government was devoid of power to fix the price at Rs. 20.50 per quintal 
and, therefore, the Collector has no power to issue the certificate of 
arrears; since what is due is the price fixed under the Order which has 
G already been paid and therefore, there is nothing due in accordance with 
law. 
Shri Y.V. Giri, learned counsel for the appellant, has contended that 
Secti~n 42 of the Supply Act prescribes only the power for fixation of the 
price in respect of the units, namely, Khandasari Unit or any unit manufac-
H turing sugar under open pan process. Under the proviso, the Government 
>} 
S.K.G. SUGAR LTD. v. STATE 
281 
have no power fix higher price of sugarcane supplied to sugar factC?ry than A 
that is fixed for the Khandasari units. The fixation of the price at Rs. 20.50 
per quintal is w
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