- (1.) The controversy raised in these appeals by special leave and transfer petitions basically relates to the competence of the state government to fix the State advised price for purchase of sugarcane by an occupier of a sugar factory over and above the minimum price fixed by the Central government. The validity of the procedure adopted for ensuring the payment of the aforesaid price to a sugarcane grower is also under challenge.
(2.) The power of the State government to fix higher sugarcane price was recognised in Maharashtra Rajya Sahkari Sakkar karkhana Sangh Ltd. v. State of maharashtra and Ors. and in State of M. P. v. Jaora Sugar Mills Ltd. and Ors. it was held that the State government has an obligation to ensure payment of proper price to the sugarcane growers by occupiers of the factory. However some observations made in State of Tamilnadu and ors. v. Kothari Sugar and Chemicals Ltd. and Ors. apparently indicate that State government has no power to fix the price. In view of this seeming conflict, the cases were initially referred for decision by a larger bench of three judges and then to a bench of five judges.
(3.) We will first deal with civil appeal nos. 460 of 1997, 461 of 1997, 1727 of 1999 and 4602 of 1999 which arise from State of U. P. and are directed against the judgment and orders of two benches of allahabad High Court wherein conflicting views have been taken. The Central government by the order dated 11.3.1996 fixed the statutory premium price of sugarcane payable by the sugar factories for 1996-97 sugar season at Rs. 45.90 per quintal linked to a basic recovery of 8.5 per cent sugar subject to a premium of Rs. 0. 57 for every 0. 1 percentage point increase in the recovery above that level. According to Sugar mills Association the average minimum statutory price for the whole of U. P. came to about Rs. 50. 33 per quintal and the additional price under clause 5-A of Sugarcane (Control) Order 1966 came to about Rs. 7 per quintal and thus they were liable to pay rs. 57.33 per quintal. The State government by the order dated 15.11.1996 fixed the State advised price at Rs. 72 per quintal for ordinary quality and Rs. 75 per quintal for fast ripening quality of sugarcane to be delivered at the gate of the factory. In case the sugarcane was delivered at the purchase centre the sugar mills were entitled to deduct about Rs. 3 per quintal towards transportation cost. Writ petition no. 36889 of 1996 was filed by West U. P. Sugar Mills association, Central U. P. Sugar Mills Association, East U. P. Sugar Mills Association and 32 sugar mills for quashing the order dated 15.11.1996 of U. P. government whereby State Advised Cane Price was fixed and for restraining the respondent authorities (State of U. P. and Cane Commissioner U. P. ) from taking any coercive steps to enforce the payment of the said state Advised Price. A declaration was also sought that the writ petitioners are liable to pay only the minimum price fixed by the central governmenr under clause 3 of sugarcane (Control) Order 1966 plus the additional cane price determined under clause 5-A of the said order. A Division bench of the High Court allowed the writ petition by the judgment and order dated 11.12.1996 The order of the State government dated 15.11.1996 was quashed and the respondent authorities were restrained from enforcing the State Advised price. It was, however, directed that where an agreement in Form B or Form C of the appendix to the U. P. Sugarcane Supply and Purchase Order, 1954 had been reached between occupiers of the factory and the cane growers or cane growers' cooperative society then the occupiers of the factory will have to pay the price in accordance with such agreement.;