SUKHNANDAN SARAN DINESH KUMAR & ANOTHER ETC. ETC. versus UNION OF INDIA & ANOTHER ETC. ETC.

Citation: [1982] 3 S.C.R. 371 · Decided: 03-03-1982 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Dismissed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

j 
' •, 
SUKHNANDAN SARAN DINESH KUMAR & 
ANOTHER ETC. ETC. 
v. 
UNION OF INDIA & ANOTHER ETC. ETC. 
March 3, 1982' 
[D.A. DESAI, AND A. VARADARAJAN, JJ.] 
371 
A 
B 
Sugar Cane (Control) Order 1966, Clauses 3, 3A, 4 and 4A & U.P. State 
C 
Government Notification dated September 3, 1980. 
Sugar Cane brought in bundles-Binding material-Grant of rebate-Whb 
ther valid and reasonable. 
The raw material for manufacturing sugar or Khands~ri sugar is sugarcane. 
When the vacuum pan process is employed the end product is called sugar and 
when the open pan process is employed the end product is called Khandsari 
sugar. In order to extend protectiOn to the farmers who had undertaken raising 
of sugarcane crop, the Central Government issued the Sugarcane (Control) Order 
1966. Clause 3 of this Order conferred power on the Central Government to fix 
minimum price of sugarcane to be paid by produ~rs of sugar for sugarcane pur-
chased by them. C1ause 4 conferred similar power to fix the minimum price to be 
paid by th" producers of khandsari sugar for the sugarcane purchased. Clause 3A 
which was introduced on September 24, 1976 conferred power on the Central 
Government and various other authorities to allow a suitable rebate in regard to 
the weight of the binding material not exceeding 0.62S Kg. per quintal of sugar-
cane, when sugarcane was purchased by the producer of the sugar. Later, 
Clause 4A ·was introduced on March 20, 1978,. to provide for the rebate that can 
be deducted from the price paid for sugarcane by prp<jucers of kbandsari 
sugar. 
The State Government issued a notification on September 3, 1980 to provide 
that where sugarcane is brought in !:undies and is weighed as such, a rebate in 
regard to the binding material at 0.650 Kg. per quintal should be allowed. As 
there waS a printing error in mentioning the figure '0.650 kg.' a corrigendum was 
issued to correct it, to '0.625 kS: per quintal in the notification. 
The petitioners in the writ petitions who were manufacturing khandsari 
sugar by the open pan process assailed the decision of the State Government 
allowing rebate. They cootcoded that : (I) the power to prescribe the rate of 
rebate under the third proviso to clause 4 is conditional upon the fixing of the 
minimum priae of sugarcane and as the pre~condition for exercise of that power 
was not satisfied, the authorities canQQ\ ~xercise Power to prescribe the 111te of 
• 
D 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
" 
372 
SUPREME COURT REPORTS 
[1982] 3 s.c.R. 
rebate, (2) if the p\lrchaser and seller of sugarcane are free agents to negotiate 
the price no useful purpose would be served by prescribing the rate of rebate 
statutorily. If higher rebate is to be allowed, the producer of khandsari sugar 
and the grower of sugarcane would work out the price accordingly and if Jess 
rebate is allowed, it will have a direct i~pact on the negotiated ptj,cc, (3) assum-
ing that the power to prescribe the rate of rebate under clause 4A read 
with the third proviso could also be exercised where the price of sugarcane was 
left to be negotiated between the growers of sugarcane and the producers of 
kbandsari sugar, the quantum of rebate determined must have a reasonable rela-
tion to the reality of market situation as well as to prevalent trade practice, (4) 
assuming that the Central Government was influenced by the report m::i.de by the 
Director, National Sugar Institute the report suggests that the average works out 
at 0.741 kg 
~er quintal, and consequently there was no justification for 
further reducing it to 0.625 kg, (5) the notification places a restriction on the 
freedom of trade guaranteed under Article 19(1) (g) and as it is neither 
reasonable nor imposed in public interest, it is violative of freedom of trade and 
therefore void, and (6) in order that a restriction may be reasonable it must have 
a reasonable relation to the object which the statute seeks to achieve and must 
not be in excess of that object. 
Dismissing the writ petitions. 
HELD: The State Government notification dated September 3, 19BO 
directing that where sugarcane is brought in bundles and is weighed as such a 
rebate in regard.to the binding material at 0.625 kg per quinta:I be allowed, is 
valid and legal. The rebate was statutorily prescribed to ensure that' sugarcane 
growers were not at the mercy of the producers of sugar and kbandsari sugar. 
The statutory rebate serves two-fold purpose: (i) it ensures price of sugarcane 
avoi

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