LexSUGAR MILLS ASSOCIATION & ORS . versus STATE OF UTTAR PRADESH & ORS.
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. A B (2012) 1 S.C.R. 352 WEST U.P. SUGAR MILLS ASSOCIATION & ORS . v. STATE OF UTTAR PRADESH & ORS. (Civil Appeal No. 7508 of 2005) JANUARY 17, 2012 [DALVEER BHANDARI, T.S. THAKUR AND DIPAK MISRA, JJ.] U.P. Sugarcane (Regulation of Supply and Purchase) C Act, 1953 - s. 16 - Fixation of State Advised Price (SAP) for sugarcane, over and above the minimum price fixed by the Central Government - Power of the State Government - Conflicting judgments by the Constitution Bench of five judges of the Court - Instant matter before a Bench of three o judges - Since conflicting judgments have been delivered by the Bench of five judges, matter referred to a larger Bench of at least seven judges - However, certain directions issued to the sugar factories to pay the balance outstanding principal amount to cane growers or to the co-operative societies E according to the SAP of the relevant crushing seasons. The question which arose for consideration in these matters was whether the State of Uttar Pradesh has the authority to fix the State Advised Price (SAP) which is required to be paid over and above the minimum price F fixed by the Central Government The appellant contended that in the Constitution Bench judgment in *Tika Ramji's case it was held that ~here was no power to fix a price for sugarcane under the G U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 or Rules and orders made thereunder and the same was contrary to the majority judgment in the later Constitution bench judgment of 2004 in **U.P. Co- operative Cane Unions Federation's case; and as such H 352 WEST U.P. SUGAR MILLS ASSOCIATION v. STATE 353 OF UTTAR PRADESH the cases may be referred to a larger bench.as regards . A the power to fix a price for sugarcane. Referring the matter to the larger Bench, the Court HELD: 1.1. Ordinarily a Bench of three Judges should B refer the matter to a Bench of five Judges, but, in the instant case since both the conflicting judgments *Ch. Tika Ramji and others etc. v. State of Uttar Pradesh and Others and **U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and Others have been delivered by the Constitution Benches of five C Judges of this Court and thus, this controversy can be finally resolved only by a larger Bench of at least seven Judges of this Court, the matters are referred to the larger Bench. [Para 10] [360-F-G] D •ch: Tika Ramji and others etc. v. State of Uttar Pradesh and others (1956) SCR 393; **U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and others (2004) 5 SCC 430: 2004 (2) Suppl. SCR 238 and Mineral Area Development Authority and others v. Steel Authority of E India and others (2011) 4 SCC 450: 2011 (4) SCR 19 - referred to. 1.2. In the peculiar facts and circumstances of the instant cases, the sugar factories are directed to pay the balance outstanding principal amount to the cane F growers or to the co-operative societies according to the SAP of the relevant crushing seasons. In other words, in all those cases where the sugar factories and other buyers have not paid the balance outstanding principal ·amount to the cane growers or to the co-operative G societies because of the stay orders obtained by them from this Court or from the High Court, they are now directed to pay the balance outstanding principal amount according to the SAP as fixed by the State Government from time to time. All the stay orders granted by this Court H 354 SUPREME COURT REPORTS [2012] 1 S.C.R. A or by the High Court are modified/vacated in the aforesaid terms. The balance outstanding principal amount are to be paid by the sugar factories within the stipulated period otherwise, buyers would be liable to pay interest at the rate of 18% per annum on the delayed payment to B the cane growers or to the co-operative societies, as the case may be. [Para 13 and 14] [361-F-H; 362-A-B] 1.3. It is made clear that the payment of the balance outstanding principal amount by the sugar factories is of course without prejudice to the main submissions C advanced by them (sugar factories) that the State Government lack legislative competence to impose the SAP. [Para 15] [362-C-D] 1.4. The SAP has been continuously increasing every o year. In all those cases, where for any reason, the SAP was not fixed in a particular year, then, the sugar factories/buyers would be liable to pay the balance outs
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