- (1.) AMITAVA Lala, J. Initially some of the writ petitions were moved by the sugar producing factories in this Court to get appropriate order/s restraining the State from giving effect to recovery certificate/s issued for recovery of cane price to be paid to the sugarcane growers through the respective Cane-growers' Cooperative Societies. Out of such matters, in a few, additional prayer was made for the purpose of quashing the State Advised Price (hereinafter called as 'sap') fixed by the State over and above the Statutory Minimum Price (hereinafter called as 'smp') fixed by the Central Government for the crushing season 2006-07. At that juncture we were under the impression that their intention is only to stall the recovery. As a result whereof, we have directed to pay a substantial part of the claim amount immediately and to sell the products lying in the godowns of the factories of the respective companies and release the sale proceeds for further payment to the cane-growers through the respective Cane-growers' Cooperative Societies with such advice to the respective banks and also directed to secure balance amount by giving their details of movable and immovable assets for inspection and subjective satisfaction of the Cane Commissioner with a direction upon him to file a report in the Court as and when required. Subject to fulfilment of such conditions, the authorities were restrained from taking any coercive action. However, huge amount of cane price was recovered by such process apart from usual payments'made by the respective factories. In most of the cases parties were directed to exchange the respective affidavits for the purpose of final hearing. But during the interregnum period some of the matters were assigned before this Bench for the purpose of analogous hearing, from which it appears that fixation of SAP by the State for the crushing season 2006-07 is actually challenged. As a result whereof, the parties have arrived at a consensus that fixation of SAP by the State for the crushing season 2006-07 will be heard at first upon exchange of the affidavits irrespective of several directions given by the Court as above.
(2.) WE further clarify hereunder that an overenthusiastic approach was made before this Court by some of the parties to extend the scope of the writ petition so as to cover the prospective fixation of SAP by the State for the crushing season 2007-08 also, but the same has been discarded being premature. Therefore, several applications for amendment to that extent were allowed to be withdrawn and jf there be any, the same is infructuous in nature. Hence, the argument of the parties and determination thereof is confined to the alleged arbitrary and/or unreasonable fixation of SAP by the State for the crushing season 2006-07 and incidental issue regarding manner of exercise of such power etc. By opening the argument Mr. S. P. Gupta, learned Senior Counsel appearing for the petitioners in one of the writ petitions, himself categorically contended that neither they have challenged nor they can challenge the existence of power of the State about fixation of SAP in view of the decision of the Supreme Court reported in 2004 (5) SCC 430, (UP Cooperative Cane Unions Federations v. West U. P. Sugar Mills Association and others, but they can challenge exercise of such power if it is found arbitrary and/or unreasonable. Additionally, he said that due to export restriction price of sugar has been substantially slashed in the domestic market, due to which the sugar factories are also unable to cope up with the situation to pay SAP fixed by the State in time. To that, Mr. Zafar Naiyar, learned Additional Advocate General of the State, contended that slashing of the price of sugar in the domestic market arose due to wrong export policy of the Union of India, for which neither the State nor the cane-growers are responsible in getting their cane price fixed by the State for the relevant year. In reply thereto, not only Mr. Gupta but all the learned Counsels appearing for the petitioner/s, in chorus, contended that by virtue of slashing of price of sugar definitely they are affected in paying the cane price as fixed by the State, but the challenge of arbitrary fixation of SAP by the State for the crushing season 2006-07 is independent of such factum. Per year both the basic and remunerative price of sugarcane are being fixed by the Central and State respectively. But when the Central law is clear and categorical, the State law is silent about norms, criteria or guidelines to exercise power regarding price fixation being essential part of legislative function. As a result whereof, there is no dispute with regard to yearly fixation of SMP but several disputes with regard to yearly fixation of SAP. SAP is not the basic price but remunerative price, which is as good as incentive. Therefore, State has to be more careful in fixation of incentive of the cane-growers taking into account all other aspects particularly the interest of the sugar growing factories through which State is controlling the rural economy. State does not believe in plurality. It has omitted power of the Sugarcane Board with effect from 30th May, 2006 which was made to give advise in the matters pertaining to the regulation of supply and purchase of cane for sugar factories, amongst others, taking plea that since the functions of the Sugarcane Board are being performed by different committees, the existence of Sugarcane Board has become unnecessary. However, they have no knowledge about such committees. On the other hand, the State/cooperative Societies ignored report of the Mahajan Committee which was once formed. Therefore, it is urged that an appropriate committee of experts headed by any Judge of the High Court or Supreme Court can be formed under the order of the Court to submit report and to maintain independency of the decision. Alternatively, Court can quash the SAP for the crushing season 2006-07 and direct the State to re-fix the price taking into account all aspects expected to be taken note of. In further, they said that as per the Governmental Policy, known as tagging policy, most of them have obtained bank loans to the extent of 85% of the yearly expenditure. Under the tagging policy, 85% of the loan amount will go to the cane growers against cane price leaving aside the balance 15% for their own expenditure. But the situation is such that they are compelled to pay even balance 15% towards cane price without retaining it for their expenditure. Therefore, utilization of such balance sum is likely to affect future crushing season. Unlike the private companies, the Government companies are backed by their own subsidy. Hence, slashing of price of sugar in the domestic market obviously caused additional impact to the sugar industry irrespective of arbitrary fixation of price by the State. Against this background, a notice was served upon the Union of India as well as learned Attorney General and, in turn, Mr. K. P. Pathak, learned Additional Solicitor General of India, appeared before the Court as their representative and made submissions.
(3.) MR. Pathak said that the market price of the commodity depends upon the production, supply, export and import, international prices and market expectations on future prices, etc. The production of sugar is directly related to the production of sugarcane. Excess production of sugarcane produces excess sugar and as a result whereof, the price was declined. The basic reason of higher production of sugarcane is the fixation of higher price by the State over and above SMP. Higher sugar production vis-a-vis domestic consumption, limited export opportunities and decline in international prices are the main reasons of declining domestic sugar prices in the country. The sugar production in 2006-07 is provisionally estimated at 280 lac tonnes as against the domestic consumption of 190 lac tonnes. The closing stock at the end of 2006-07 season on 30th September, 2007 is about 119 lac tonnes. Export opportunities are limited as sugar produced ' by the majority of sugar factories in India does not match the international standard. Further, international prices are not sufficiently remunerative and there is glut in international market. Due to surplus production not only in India but in other major sugar producing countries like Brazil, Thatland, Australia, etc. the international prices have declined by over US 190 per metric tonne. Mainly due to aforesaid reasons, the open market price has declined by Rs. 450-600 per quintal in the current sugar season, which severely constrained the capacity of sugar mills to pay cane price to sugarcane farmers. It appears to us that Central Government has been following a policy of partial control over sugar production since 1966-67 except for two brief periods from 25th May, 1971 to 30th June, 1972 and 16th August, 1978 to 16lh December, 1979. Under the policy, a part of sugar production is requisitioned as levy sugar for distribution in the Public Distribution System (hereinafter called as 'pds') at a uniform Retail Issue Price (RIP) throughout the country and rest is allowed to be sold as non-levy (free sale) sugar subject to regulated release mechanism. The policy is continuing till date except that the levy obligation on the sugar factories has been reduced to 10% as indicated below: SI. Nos. Season 7levy percentage 1. 1979-80 to 1984-85 65 2. 1985-86 55 3. 1986-87 to 1987-88 50 4. 1988-89 to 1991 -92 45 5. 1992-93 to 31. 12. 1999 40 6. 1. 1. 2000 to 31. 1. 2001 30 7. 1. 2. 2001 to 31. 1. 2002 15 8. 1. 3. 2002 to till date 10 7. The retail prices of sugar, which were in the range of Rs. 17. 00 to 21. 00 per kg. in December, 2005 increased to Rs. 19. 50 to 23. 00 per kg. in the month of February, 2006 and further to Rs. 20. 00 to 23. 00 per kg. in the month of May, 2006. In order to check the rising prices, the Government had no option but to impose ban on export of sugar. Had the ban not been imposed, the retail prices could have increased hitting the common man. However, the Government reviewed the sugar availability position and lifted the ban on export of sugar with effect from 03rd January, 2007 for advance licence holders and with effect from 23rd January, 2007 for general licence holders. At present there is no ban on export of sugar. In order to liquidate excess stocks of sugar and to provide enough liquidity in the hands of sugar factories to enable them to pay cane price to sugarcane growers, the Central Government has decided to provide (i) export assistance to defray expenditure on internal transport, marketing and handling charges and ocean freight @ Rs. 1350/- per tonne for sugar factories located in coastal areas and Rs. 1450/- per tonne for sugar factories located in non-poastal areas (subject to actuals for export by road/rail to neighbouring countries) for a period of one year with effect from 19th April, 2007. The amount involved is Rs. 300 crore (approx) to be borne from Sugar Development Fund (hereinafter called as 'sdf' ). It is being notified shortly to continue with export assistance for one more year with effect from 19th April, 2008 for further export of three million tonnes of sugar involving about Rs. 420 crore of assistance to be borne from SDF. This assistance shall also be exclusively used for payment of cane price arrears of farmers; (ii) further, the requirement of obtaining release orders for the purpose of export has been dispensed with from 31st July, 2007. This would help the sugar factories to undertake exports expeditiously and improve their liquidity position. 8. In order to meet the point of alleged arbitrariness in fixing SAP, we have called upon the learned Additional Chief Standing Counsel for the State to keep the record of price fixation by the State with him, so that in case of necessity the Court can call upon for its perusal and/or for giving direction upon the parties to take inspection in the open Court and make their respective submissions irrespective of exchange of affidavits. In compliance of such direction, record was produced before the Court which after our perusal and necessary inspection by the parties was kept under a sealed cover. It was necessitated when we found that the learned Counsel appearing for the Cane-growers' Cooperative Society is holding photocopies of extracts from various documents and producing before the -Court in a phased manner to suit the purpose. When the affidavit has been filed on behalf of the State, with an utter surprise we find that those photocopies being extract of various documents irrespective of pagination hurriedly made part of the affidavit of the State to develop its case in the Court of law. Record does not speak anything about such extracts. Till the time Mr. Zafar Naiyar, learned Additional Advocate General, intervened and made his precised submission, we find that the State had danced to the tune of the Cooperative Society without independent application of mind. That apart, in a conflict between record and affidavit the Court has to rely upon the record. Therefore, apart from the record, the extracts of various documents, which the respondents want to rely in support of their respective cases to develop, have no face value excepting reading for academic purpose. 9. In any event, it is to be remembered that the price of sugar is one on which it will be sold to the ultimate purchasers. Out of such price, portions will go to SMP, SAP, expenditure and net profit. Sugar business is absolutely controlled business. Even non-levy sugar will be sold in a regulated manner. Therefore, if the price index falls, it will definitely hit the interest of the sugar producing factories. They have not come forward to do the charity but business. Therefore, fall in the price index will not only hit the net income but also the expenditure and SAP being an incentive to be paid to the cane-growers arising out of gross income. There is a gulf difference between the basic price and the remunerative price. In case of fixation of basic price and payment thereof, there might not be any say of the persons i. e. the sugar producing factories in refusing the payment to the cane-growers, but whenever a question 'of incentive price arises, the same is to be determined on the basis of the profit margin of the sugar producing factories. Therefore, margin of profit of the relevant year out of the production of sugarcane and crushing capacity by the sugar producing factories and the control of sale in the domestic market as well as export have to be considered for the purpose of incentive price fixation. It is true to say that any remunerative price is to be fixed with an estimate and/or calculation depending upon the economical condition. No economical agenda will be ruled by the political agenda in respect of fixation of price by the State. Whenever a group of people seek franchise by the people, it is a political platform but as soon as it gets majority and forms a Government, it is of the people and for the people as a whole but not for such majority people. There cannot be any discrimination between cane-growers and sugar producers even being tilted towards the interest of the cane-growers to be counted as have nots. The Government has to strike a balance. Live and let live policy is not an illusion or a fun. This has to be done with utmost diligence, so that there should not be any dispute or difference after fixation of the remunerative price or incentive. Individual executive price fixation with a formal recognition by the legislature cannot be said to be legislative function essentially. Active involvement of the legislative body in this type of case is dire necessity. We cannot disassociate ourselves from the well-known saying of Lord Acton in the Appendix to his "historical Essays and Studies" that power tends to corrupt and absolute power corrupts absolutely. 10. It is to be remembered that sugar business is essentially a controlled business. Its functioning is controlled. Its sale is controlled. Immediately after installation of factory an area will be attached with it which is called as reserved area and/or assigned area and the factory will be compelled upon to purchase cane from the producers of such area. Necessary requisition slips, parchies, etc. will be strictly maintained and agreement between Cooperative Societies of cane growers and cane producing factories will be made irrespective of fixation of SAP by the State. Hence, the State has to play a very crucial role in exercising power of price fixation. Even after fixation of price, the sugar producers cannot sell the goods in the open market as per their sweet will but under control of the Union of India irrespective of levy sugar. Therefore, situation of this type of controlled business is different from the open market business as colloquially called. In the controlled business sincere act of the Union of India or the State are required otherwise there would be every chance of infringement of Article 19 (1) (g) of the 'constitution of India in carrying on business. More encouragement for more production to get more incentive may lead to an absurdity. Against this background, we could see the following comparative chart of SMP and SAP of last few years. SI. Nos. Year Statutory Minimum Price SMP (Rs. Per Quintal) State Advised Price SAP (Rs. Per Quintal) 1. 2006-07 80. 25 130. 00 2. 2005-06 79. 50 115. 00 3. 2004-05 74. 50 107. 00 4. 2003-04 73. 00 95. 00 5. 2002-03 69. 50 95. 00 6. 2001-02 62. 05 95. 00 7. 2000-01 59. 50 90. 00 8. 1999-00 56. 10 85. 00 9. 1998-99 52. 70 80. 00 10. 1997-98 48. 45 75. 00 11. 1996-97 45. 90 72. 00 11. We have gone through the objections of the petitioners in different writ petitions regarding fixation of price. But if we go through with a conservative outlook on the basis of the representation of the U. P. Sugar Mills Association dated 11th August, 2006 addressed to the then Chief Minister of the State of Uttar Pradesh, we shall be able to find that they have requested not to increase at least the price of last year. In that letter, sugar producers categorically said about the steep fall of the sugar price and about there being no guidelines for fixation of SAP by the State and also that any increase of price will cause suffering to them. It has been categorically stated that as per the report of the Commission for Agricultural Costs and Prices (CACP), the cost of production of sugarcane in the State of Uttar Pradesh for the year 2005-06 was Rs. 80. 85 per quintal, which may be escalated by 5% and in the season 2006-07 the production cost would be Rs. 86. 00 per quintal. Statement has been prepared showing cane price paying ca-pacity in U. P. for the season 2006-07, as under: Particulars West UP Central UP East Up A. Realisation 90% free sale (Rs.) 10% Levy (Rs.) Average realisation (Rs.) 1650. 00 1277. 00 1613. 00 1625. 00 1332. 00 1595. 00 1650. 00 1385. 00 1623. 00 B. Less Conversion cost including interest and return as per CAB cost schedule (Rs.) 405. 00 450. 00 505. 00 C. Balance available for cane price and taxes (Rs.) 1208. 00 1145. 00 1118. 00 D. Recovery (Estimated %) 9. 70 9. 45 9. 90 E. Cane price paying capacity per qtl (Including taxes Rs.) 117. 18 108, 20 110. 68 F. Less : Purchase tax, society commission and driage (Rs.) (2. 00 + 2. 50 + 0. 50) 5. 00 5. 00 5. 00 G. Paying capacity per qtl (Rs.) 112. 18 103. 20 105. 68 Average- Rs. 108 per qtl. 1. Every Rs. 10/- variation in sugar price, will make a difference of approxi-mately Rs. 1/- per qtl. in cane price. 2. Molasses realisation has been fully adjusted in the conversion cost. " 12. In spite of the same, without considering any cost or following any method, the Cane Commissioner abruptly increased the price of sugarcane to the extent of Rs. 10/- per quintal and made a difference of few hundred crores of rupees to be recovered from the sugar producers. We have gone through the record and found that no reason has been shown how the authority has arrived at such figure. In 1985 (3) SCC 545, 0/ga Tellis and others v. Bombay Municipal Corporation and others a five Judges' Bench of the Supreme Court held that there is no estoppel against enforcement of fundamental rights. The doctrine of estoppel is based on the principle that consistency in word and action imparts certainty and honesty to human affairs. If a person makes a representation to another, on the faith of which the latter acts to his prejudice, the former cannot resile from the representation made by him. He must make it good. The plea of estoppel is closely connected with the plea of waiver, the object of both being to ensure bonafides in day-to-day transactions. 13. Mr. Zafar Naiyar, learned Additional Advocate General of the State, confined his argument to the agreements between the Cane-growers' Cooperative Societies and the respective sugar producing factories already entered into under Form C of the Clauses 3 (3) and 4 (1) of the U. P. Sugarcane Supply and Purchase Order, 1954. He said that price fixed by the State become part and parcel of the agreement and when the respective parties have acted upon such agreement, they cannot turn around and challenge the fixation of SAP for the crushing season 2006-07 by saying it is arbitrary and/or unreasonable. 14. On the other hand, Mr. Gupta contended that the purported agreement is entered into by or between Cane-growers' Cooperative Society and factories but price is not fixed by either of the contracting parties. It has been done independently by the State. Therefore, if the price is fixed arbitrarily or unreasonably, the petitioners cannot be debarred from challenging the same. It is more so when the price is recoverable as arrears of land revenue as per Section 17 (4) of the U. P Sugarcane (Regulation of Supply and Purchase) Act, 1953 (hereinafter called as "act, 1953" ). 15. In AIR 1990 SC 699, Bihar State Electricity Board, Patna and others v. M/s. Green Rubber Industries and others, it has been held that every contract is to be considered with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavouring to collect the intention of the parties. Difference between contractual element and thestatutory duty have to be observed. 16. lnair1990sc1031, Mahabirauto Stores and others v. Indian Oil Corporation and others, the Supreme Court held that every action of the State or an instrumentality of the State in exercise of its executive power must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution of India. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 of the Constitution springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. In this connection reference may be made to E. P. Royappa v. Sfate of Tamil Nadu, (1974) 4 SCC 3 : (AIR 1974 SC 555); Maneka Gandhi v. Union of India, (1978) 1 SCC 248 : (AIR 1978 SC 597); Ajay Has/a v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 : (AIR 1981 SC 487); R. D. Shetty v. International Airport Authority of India, (1979) 3 SCC 489: (Al R 1979 SC 162) and also Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, (1989) 3 SCC 293 : (AIR 1989 SC 1642 ). It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non- discrimination in the type of the transactions and nature of the dealing as in the present case. 17. Therefore, we have to see how far judicial review can go in case of such independent price fixation by the State. In 1987 (2) SCC 720, Union of India and another v. Cynamide India Ltd. and another, the Supreme Court held that price fixation is neither the function nor the forte of the Court. But the Court do not totally deny the jurisdiction to enquire into the question, in appropriate proceedings, whether relevant considerations have gone in and irrelevant considerations kept out of the determination of the price. The Court will, of course, examine if there is any hostile discrimination. 18. In 2005 (2) SCC 227, Pallavi Refractories and others v. Singareni Collieries Co. Ltd. and others, in paragraph-13 the Supreme Court again followed the ratio of judgment of Cynamide India Ltd. (supra) and held that price fixation in general is a legislative activity. The Court is neither concerned. with the policy nor with the rates. In case the legislature had laid down the pricing policy and prescribed the factors which should guide the determination of the price then the Court will, if necessary, enquire into the question whether policy and factors were present to the mind of the authorities specifying the price. Again in paragraph-14 of Pallavi Refractories (supra) the Supreme Court held that the Court does not substitute its judgment for that of the legislature or its agent as to the matters within the province of either. The legislature while delegating the powers to its agent may empower the agent to make findings of fact which are conclusive provided, such findings satisfy the test of reasonableness. In all such cases, the judicial enquiry is confined to the question whether the findings of facts are reasonably based on evidence and whether such findings are consistent with the laws of the land. The Court only examines whether the prices determined were with due regard to the provisions of the statute and whether extraneous matters have been excluded while making such determination. It was further observed the priceflxation is not within the province of the Courts. Judicial function in respect of such matters stands exhausted once it is found that the authority empowered to fix the price has reached the conclusion on a rational basis. 19. Paragraph 31 of Cynamide India Ltd. (supra), being relevant, is quoted hereunder: "31. We mentioned that the price fixed by the Government may be questioned on the ground that the considerations stipulated by the order as relevant were not taken into account. It may also be questioned on any ground on which a subordinate legislation may be questioned, such as, being contrary to constitutional or other statutory provisions. It may be questioned on the ground of a denial of the right guaranteed by Article 14, if it is arbitrary, that is, if either the guidelines prescribed for the determination are arbitrary or if, even though the guidelines are not arbitrary, the guidelines are worked in an arbitrary fashion. " 7 20. In AIR 1986 SC 1571, Central Inland Water Transport Corporation Ltd. and another v. Brojo Nath Ganguly and another, we get a guideline in respect of interference with such matters, as follows : "93. The Contract Act does not define the expression "public policy" or "opposed to public policy". From the very nature of things, the expressions "public policy", "opposed to public policy", or "contrary to public policy" are incapable of precise definition. Public policy, however, is not the policy of a particular Government. It connotes some matter which concerns the public good and the public interest. The concept of what is for the public good or in the public interest or what would be injurious or harmful to the public good or the public interest has varied from time to time. As new concepts take the place of old, transactions which were once considered against public policy are now being upheld by the Courts and similarly where there has been a well-recognized head of public policy, the Courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public policy. There are two schools of thought-"the narrow view" school and "the broad view" school. According to the former, Courts cannot create new heads of public policy whereas the latter countenances judicial law-making in this area. The adherents of "the narrow view" school would not invalidate a contract on the ground of public policy unless that particular ground had been well established by authorities. Hardly ever has the voice of the timorous spoken more clearly and loudly than in these words of Lord Davey in Janson v. Driefontein Consolidated Mines, Limited, (1902) AC 484, 500, "public policy is always an unsafe and treacherous ground for legal decision. " That was in the year 1902. Seventy-eight years earlier, Burrough, J. , in Richardson v. Mellish, (1824) 2 Bing 229, 252 SC 130 ER 294, 303, and (1824-34) All ER Reprint 258, 266, described public policy as "a very unruly horse, and when once you get astride it you never know where it will carry you. " The Master of the Rolls, Lord Denning, however, was not a man to shy away from unmanageable horses and in words which conjure up before our eyes the picture of the young Alexander the Great Taming Bucephalus, he said in Enderby Town Football Club Ltd. v. Football Association Ltd. , (1971) Ch 591, 606, "with a good man in the saddle, the unruly horse can be kept in control. It can jump over obstacles. " Had the timorous always held the field, not only the doctrine of public policy but even the Common Law or the principles of Equity would never have evolved. Sir William Holdsworth in his "history of English Law", Volume III, page 55, has said : "in fact, a body of law like the common law, which has grown up gradually with the growth of the nation, necessarily acquires some fixed principles, and if it is to maintain these principles it must be able, on the ground of public policy or some other like ground, to suppress practices which, under ever new disguises, seek to weaken or negative them. " It is thus clear that the principles governing public policy must be and are capable, on proper occasion, of expansion or modification. Practices which were considered perfectly normal at one time have today become obnoxious and oppressive to public conscience. If there is no head of public policy which covers a case, then the Court must in consonance with public conscience and in keeping with public good and public interest declare such practice to be opposed to public policy. Above all, in deciding any case which may not be covered by authority our Courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution. " 21. Mr. R. N. Trivedi, learned Senior Counsel, independently and in support of the argument as advanced by Mr. Gupta, contended that this Court should declare Section 16 of the Act, 1953 as unconstitutional. We discarded this argument at the threshold. We shall not be forgetful of our domain. Supreme Court by its majority view i. e. 3 : 2 in U. P. Cooperative Cane Unions Federations (supra) already held that the State has power to fix SAP as per interpretation of Section 16 of the Act, 1953. Therefore, we cannot consider the existability of such section in the teeth of such judgment. According to us, there is clear distinction between a provision to be unconstitutional and exercise of the power to be arbitrary or illegal. Once the provision is held to be valid, the only other question left open is whether exercise of power can be held to be arbitrary or illegal. Mr. Trivedi understood the limitation and switched over his argument towards exercisability of the power on the line of argument of Mr. Gupta. All the petitioners, through their respective Counsel, adopted the line of argument as advanced by Mr. Gupta. However, Mr. Trivedi has also made an interesting submission on a different point, which has been taken note hereunder. He said that under Article 141 of the Constitution of India the law declared by the Supreme Court shall be binding on all the Courts within the territory of India. So far as Article 145 (5) of the Constitution is concerned, no judgment and no such opinion shall be delivered by the Supreme Court save with the concurrence of a majority of the Judges present at the hearing of the case. But nothing in this clause shall be deemed to prevent a Judge who does not concur from delivering a dissenting judgment or opinion. Therefore, in view of the Article, both the judgments either concurring or dissenting have a binding effect upon all the Courts if the majority does not deal with any part. He said that majority view of existibility of the order is undisputed but minority view about absence of norms, criteria or guidelines to exercise the power is also undisputed. Therefore, this Court would not go with majority view alone. The minority judgment of two Judges will also have binding effect upon this Court. Against this background, we have gone through the minority judgment also, but our observation will be restricted only in respect of exercise of power not to the existence of power as we are bound by the majority judgment of the Supreme Court. In the dissenting judgment Hon'ble P. Venkatarama Reddy, J. held that it is reasonable to expect the legislature to make a specific provision to that effect rather than leaving it to the general regulatory power under Section 16 to take care of it. When a parallel legislation in the Central field was in operation in regard to price fixation, the State legislature would not have omitted to enact the specific provision empowering the Government to fix the price higher than the minimum level prescribed by the legislation if that was the intention of the legislature. Such provision would have contained norms, criteria or guidelines governing the higher price fixation or at least left them to be prescribed by the rules. 22. Mr. Ravindra Singh, learned Counsel appearing for the Cane-growers' Cooperative Societies, contended that in 2004 (8) SCC 29, West U. P. Sugar Mills Association and others v. U. P. Coop. Cane Unions Federation and others, the original case of U. P. Cooperative Cane Unions Federations (supra) was reviewed and the review petition was rejected by the majority. No view has been expressed about the question of repugnancy by Hon. P. Venkatarama Reddi and Hon. B. N. Srikrishna, JJ. He also contended that in 2004 (5) SCC 222, (Common Cause v. Union of India and others, it has been held by the Supreme Court that the view taken by the minority cannot be cited as the law laid down by the Constitution Bench nor can it be followed in the face of the opinion of the majority to the contrary. He said that State is fixing price each and every year and sugar producing factories are making several complaints regarding price fixation each and every year. In fact, a Division Bench of the High Court in an earlier occasion dismissed a writ petition on that score. However, the Division Bench of this Court by judgment and order dated 21st July, 2006 delivered in Civil Misc. Writ Petition No. 48159 of 2002 (West U. P. Sugar Mills Association and 41 others v. Stete of U. P. and others) dismissed the writ petition on the ground as follows : "the fixation of price for the crushing season 2002-03 is not so absurd, which can be interfered with. It appears few private sector sugar mills are apprehensive about the payment of arrears within the fold of joint corrobora-tion. But it is to be remembered they have already enjoyed the benefit of such sum fora considerable period. " 23. Both the learned Additional Advocate General and Mr. Ravindra Singh contended that if there is any grievance on the part of the sugar producing factories in respect of fixation of price, they could have come forward and raised their objections before fixation of price. Once the price is fixed by the State and the parties have entered into the agreement, they cannot take the plea now that the price, which has been fixed by the State, is arbitrary. However, according to us, both are forgetful of the fact that the petitioners have already raised objection prior to taking the decision. 24. Mr. Ravindra Singh further reiterated the line of argument of the State before the Supreme Court in U. P. Co-operative Cane Unions Federations (supra) and said that SMP as fixed by the Central Government under Clause-3 of the Sugarcane (Control) Order, 1966 is basically linked to fixation of price of the levy sugar and is not linked with the actual price of the sugar. Hence, deliberately the Central Government kept the minimum price of sugarcane at a low level. Additional price payable under Clause 5-Aof the Order, 1966 is factory-specific and has correlation only with the profits of the sugar factory and, therefore, it is only a matter of chance for a sugarcane-grower to get some additional amount. If at all the factory makes profits, the amount paid to a sugarcane-grower will be pitiably low or illusory. Sugarcane occupies land for a longer period than any other crop and it needs the larger investment in the inputs. The farmers can raise only one crop of sugarcane in a year. Price is the main incentive of any economy and the best incentive to the sugarcane-grower is remunerative price for his produce. The minimum price is not a remunerative price. It does not take into account higher costs and higher risks involved in raising sugarcane. If there is a higher investment and higher risk, the sugarcane-grower is entitled to higher returns but the said fact is not taken into consideration while fixing the minimum price by the Central Government. 25. In 1975 (3) SCC 602, State of Bihar and others v. Dr. Asis Kumar Mukherjee and others, it was held by the three Judges' Bench of the Supreme Court that when a writ of certiorari is moved, the Court has the power to call for the record. The power of the Court is wide but will have to be exercised judicially and judiciously, having regard to the totality of circumstances. Acts of public authorities must ordinarily be amenable to public scrutiny and not be hidden in suspicious secrecy. In this case we find that both the State and the Cooperative Society have abruptly annexed photocopies of various papers even sometimes without pagination to develop the case. Hence, it was necessitated for the Court to look into the record. Record is silent about any adoption of any norms, criteria or guidelines for fixation of price or its enhancement for the crushing season 2006-07. Record is totally silent about reasoning. It is verbatim reproduction of the submission of the State in the Supreme Court in re': U. P. Co-operative Cane Unions Federations (supra) that higher investment gives higher price. This note of an executive had received assent of the Chief Minister and Cabinet. Higher investment can give higher return might be a theory of economics which cannohbe the reason of fixation of SAP for the respective years. Year-wise investment is to be assessed. Recovery is to be assessed. Crushing capacity is to be assessed. International price is to be assessed. Domestic price is to be assessed. Fixation of SMP by the Central Government is to be assessed. Consumer's consumption is to be assessed. Competitive price of different States is to be assessed. Why price of Rs. 10/- will be increased this year-why not Rs. 15/- or Rs. 1/-, these relevant factors are to be assessed. Recommendations of various experts are to be assessed. Process of assessment of the Central Government is to be assessed. Then a price can be fixed. It is true that this exercise per year may take lot of time. Therefore, if specific norms, criteria or guidelines are fixed on a consensus arrived at taking into account all concerned, the dispute can be resolved as far as practicable. There is no scope of any average fixation under the law because any rate averagely fixed higher or lower means lot. One may be substantially looser or gainer. Therefore, hairline detection is obvious. The Central Government has evolved to a consensus in fixing SMP, therefore, they are free from litigation. The question is not fixation of price for levy sugar or non-levy sugar or basic price or remunerative price. The question relates to process of fixation. Therefore, if some norms, criteria or guidelines are borrowed from somewhere inclusive of Central Government and blend it up with the interest of the State, all will be benefited. In doing so good governance is required, who can come out from the political agenda and give effect of this economical agenda independently. It is to be remembered that the sugar business is totally controlled business in many ways, therefore, much caution is required in the economic policy so that no action can be seen to be in violation of Article 19 (1) (g) of the Constitution of India. In AIR 1982 SC 902, M/s. Sukhnandan Saran Dinesh Kumar and another etc. etc. v. Union of India and another etc. etc. , it has been held that a regulatory measure imposes restriction upon the freedom of trade guaranteed by Article 19 (1) (g) of the Constitution, it must be shown that the restriction so imposed directly and proximately interferes in praesenf/with the exercise of freedom of trade. 26. Therefore, in association with the observations of the Supreme Court about price fixation of coal as reported in 2007 (2) SCC 640, Ashoka Smokeless Coal India (P) Ltd. and others v. Union of India and others, we also hold that the doctrine of balancing as has been advocated before this Court is not at all an ignorable state of affairs. Price cannot be enhanced in a routine manner because sky has no limit. The right conferred upon the State will be exercised properly. It should not be one sided for the sake of political agenda otherwise one day will come when sugar producing factories will turn their faces from the State and the cane-growers will be the worse sufferers. Principle of live and let live is, of course, not an idle formality. Had it been the cases of cane-growers, the same reaction would have been there on the part of the Court. This is the basic principle of doctrine of balancing. Good administration always does so. It can be easily evaluated from the record how many litigations are coming forward challenging the SAP fixed by the other States and in the State of Uttar Pradesh. The State is also forgetful that if there is a difference of price even between State to State, it will also create a problem by which the farmers of the State will be ultimate sufferer. The fixation of price per year which has been provided by the Act, 1953, is to be determined on the basis of factum of each year. Neither it will be made theoretically nor mechanically but actually on the basis of assessment of all aspects of the economy for the purpose of good governance. From the argument of Mr. Singh it appears to us that exercise of power for fixation of price by the State is no more res Integra, which is actually not. The power and authority of the State is no more res Integra in view of the majority judgment of the Supreme Court in U. P. Cooperative Cane Unions Federations (supra) but exercise of power is still res Integra. 27. This industry is a unique agro-based industry of the State which should not be destroyed with a casual outlook of dispute between the haves and have nots. Even in a case of haves and have nots neither of the parties have unfettered right to squeeze each other. Therefore, doctrine of balancing is the latest and obvious path for the State to arrive at a solution. The Court can only help the parties inclusive of the State within its limited role. In 2001 (3) SCC 646, A. P. Bankers and Pawn Brokers'association v. Municipal Corporation of Hyderabad, the Supreme Court held that scope of judicial review in case of formation of opinion by the authority under the law is very limited but the opinion of such authority has to be based upon some relevant material. In 2001 (4) SCC 710, Appropriate Authority and another v. R. C. Chawla and others, it was held that the well-known principle of administrative law is that if a relevant factor is ignored, the order made becomes vitiated. In 1994 (4) SCC 269, Indian Nut Products and others v. Union of India and others, it was held by the Supreme Court that if a statute requires an authority to exercise power, when such authority is satisfied that conditions exist for exercise of that power, the satisfaction has to be based on the existence on grounds mentioned in the statute. The grounds must be made out on the basis of the relevant material. If the existence of the conditions required for the exercise of the power is challenged, the Courts are entitled to examine whether those conditions existed when the order was made. A person aggrieved by such action can question the satisfaction by showing that it was wholly based on irrelevant grounds and hence amounted to no satisfaction at all. In other words, the existence of the circumstances in question is open to judicial review. In 2005 (7) SCC 627, Hindustan Petroleum Corpn. Ltd. v. Darius Shapur Chenai and others) it was held by the Supreme Court that formation of opinion as regards the public purpose as also suitability thereof must be preceded by application of mind as regards consideration of relevant factors and rejection of irrelevant ones. The State in its decision-making process must not commit any misdirection in law. In 1991 Supp (1) SCC 600, Delhi Transport Corporation v. D. T. C. Mazdoor Congress and others, five Judges' Bench of the Supreme Court held that the rule of law which permeates our Constitution demands that it has to be observed both substantially and procedurally. Rule of law posits that the power is to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination. Further, the 'audi alteram partem rule which in essence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi-judicial orders but to administrative orders affecting prejudicially the party-in-question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule, which is not the case herein. Rules of natural justice do not supplant but supplement the Rules and Regulations. In 2001 (1) SCC 91, Saurashtra Cement and Chemical Industries Ltd. and another v. Union of India and others, it was held by the Supreme Court that taking recourse to the doctrine of stare would be an imperative necessity, so as to avoid uncertainty and confusion, since the basic feature of law is its certainty and in the event of any departure therefrom the society would be in utter confusion and the resultant effect of which would be legal anarchy and judicial indiscipline- a situation which always ought to be avoided. However, in 2001 (7) SCC 358, District Mining Officer and others v. Tata Iron and Steel Co. and another, the Supreme Court has held that the function of the Court is only to expound and not to legislate. The process of construction combines both literal and purposive approaches. In other words, the legislative intention i. e. the true/and legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed. A bare mechanical interpretation of the words and application of legislative intent devoid of concept or purpose will reduce most of the remedial and beneficent legislation to futility. The Wednesbury principle as we called from the reference of 1948 (1) K. B. 223 (Associated Provincial Picture Houses Limited v. Wednesbury Corporation) is ai follows: "in considering whether an authority having so unlimited a power has acted unreasonably, the Court is only entitled to investigate the action of the authority with a view to seeing if it has taken into account any matters that ought not to be or disregarded matters that ought to be taken into account. The Court cannot interfere as an appellate authority to override a decision of such an authority, but only as a judicial authority concerned to see whether it has contravened the law by acting in excess of its power. " 28. Price fixation is an art of economics. Hence, desirably legislature is to lay down price of the goods taking into account various relevant factors and without being influenced by the political considerations or on the bare reference of the Ef executives. Five Judges' Bench of the Supreme Court in AIR 1990 SC1277, (M/s. Shri Sitaram Sugar Co. Ltd. and anotherv. Union of India and others, also held that price fixation of levy sugar is in the nature of legislative action even when it is based on objective criteria founded on relevant material. No rule of natural justice is applicable to any such order. It is nevertheless imperative that the action of the authority should be inspired by reason. The Government cannot fix any arbitrary " price. It cannot fix prices on extraneous considerations. Therefore, we can not substitute our idea about economic policy by our judicial order. Our enquiry is confined to arbitrariness and reasonableness in fixing price. Price fixation of sugarcane is dependable upon representations of the cross section of various people involved therein to come to a consensus. Plurality is soul of such decision making process. A price fixed by an executive on surmises or conjectures and place it before the Chief Minister and his Cabinet for its formal approval is not at all a due process of price fixation. Element of arbitrariness arises therefrom. Reason is the basis of consideration which is not available in the record placed before this Court. If it appears arbitrary or unreasonable, the Court will have the power of judicial review to enquire about the exercise of power. In 2003 (4) SCC 289 Fecf-eration of Railway Officers Association and others v. Union of India, it has been held by the Supreme Court that judicial review of a policy evolved by the Government is limited. When policy according to which or the purpose for which discretion is to be exercised is clearly expressed in the statute, it cannot be said to be an unrestricted discretion. On matters affecting policy and requiring technical expertise the Court would leave the matter for decision of those who are qualified to address the issues. Unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of power, the Court will not interfere in such matters. It appears to us that after obtaining the majority judgment i. e. 3: 2 from the Supreme Court in U. P. Cooperative Cane Unions Federations (supra), the State had slept with the power in the place and instead of making various exercise in amending the law or framing norms, criteria or guidelines in the manner it was necessary. Better investment will give better incentive is a theoretical concept, but that does not necessarily mean no assessment will be made. If the better investment gives rise to the maximum amount of crops beyond the crushing capacity of the existing sugar mills then encouragement of better investment will be futile exercise. Sugarcane will be wasted. In further, if the factories are able to crush higher amount of gane by the better investment of the farmers then obviously availability of sugar in the market will rise and then price will fall. Capacity of consumption by the ultimate purchasers is an essential part of consideration. Therefore, in the case of price fixation not only the interest of the cane-growers and sugar producers but also the interest of purchasers and the competitive market of the other States and international will have to be considered. 29. Under Clause 5-Aof the Order, 1966 there is a provision regarding additional price fixation power either by the Central Government or by the Sfafe Government, as the case may be. Therefore, power of the State to fix additional price was pre-existing under Clause 5-A of the Order, 1966. Therefore, fixation of price as per ratio of the judgment of the Supreme Court in U. P. Cooperative Cane Unions Federations (supra) as per the word "regulate" became an additional power over the pre-existing power of tho State only to avoid pitiably low or illusory return, if any. But that does not mean State will misuse such power. Since the authority of fixation of price is given under List-Ill i. e. concurrent list of the Constitution of India, there is no bar for the State to follow the guidelines of the Sugarcane (Control) Order, 1966 principally irrespective of its applicability to 'levy sugar'. Such Clause 5-A itself speaks about the power of the State Government to authorise any person or authority to determine the additional price payable by the producers of sugar to the sugarcane-growers. Therefore, if the guidelines of such Control Order are taken note of principally, it will not be devoid of the power to exercise. The Supreme Court interpreted the power under the Act, 1953 within the fore-corners of the word "regulate" or "regulation". Eveninair 1956sc676, Ch. Tika Ramji and others v. State of Uttar Pradesh and others, it was held that production, supply and distribution of sugarcane is the exclusive sphere of the State but with subjective control of the Union as per Entry 33 of List III i. e. Concurrent List of the Constitution of India. These two words are available under two sections i. e. Section 4 under Chapter II and Section 16 under Chapter III of the Act, 1953. Chapter II speaks about administrative machinery when Chapter III speaks about sale, supply and purchase of the cane. Section 16 speaks about distribution, sale or purchase. Section 4 speaks about regulation of supply and purchase. Therefore, Section 4 cannot be said to be illusory at all in the context of regulation as per Section 16. On the contrary, Section 4 of the Act, 1953 is strengthening Section 16 since the Sugarcane Board under Section 3 consists of various important persons to regulate sale and purchase amongst others by applying plural minds. These two sections i. e. Sections 3 and 4, were omitted by the U. P. Act No. 17 of 2006 with effect from 30th May, 2006. Therefore, now it is solitary action of an executive i. e. Cane Commissioner under Section 16 of the Act. Mr. Singh contended that in AIR 1991 SC 1473, M/s. Hindustan Zinc Ltd. etc. etc. v. Andhra Pradesh State Electricity Board and others, it has been held that though seeking advice of the Consultative Council before revision of tariffs is advisable yet failure to seek advice of the Consultative Council before revision of the tariffs does not result in invalidation of the revised tariffs. Function of the Consultative Council and the force of its advice being at the best only persuasive, it cannot be said that revision of tariffs without seeking the advice of the Consultative Council renders the revision of tariffs itself invalid. But in the circumstances excessive delegation of power and its adverse effect can not be ruled out unless there is active participation of legislative body. In 2001 (5) SCC 212 (Kishan Prakash Sharma and others v. Union of India and others) the Supreme Court held that the legislatures in India possess wide power of legislation subject, however, to certain limitations such as the legislature can not delegate essential legislative functions which consist in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct. Legislature cannot delegate uncanalised and uncontrolled power. The legislature must set the limits of the power delegated by declaring the policy of the law and by laying down standards for guidance of those on whom the power to execute the law is conferred. In 1980 (1) SCC 340, Registrar of Coop. Societies v. K. Kunjabmu, as quoted in 1999 (9) SCC 700, B. R. Enterprises v. State of U. P. and others, is as follows : "the power to legislate carries with it the power to delegate. But excessive delegation may amount to abdication. Delegation unlimited may invite despotism uninhibited. So the theory has been evolved that the legislature cannot delegate its essential legislative function. Legislate it must, by laying down policy and principle and delegate it may to fill in detail and carry out policy. The legislature may guide the delegate by speaking through the express provision empowering delegation or the other provisions of the statute such as the preamble, the scheme or even the very subject-matter of the statute. If guidance there is, wherever it may be found, the delegation is valid. A good deal of latitude has been held to be permissible in the case of taxing statutes and on the same principle generous degree of latitude must be permissible in the case of welfare legislation, particularly those statutes which are designed to further the Directive Principles of State Policy. " 30. Mr. Naiyarcontended that in 199g (5) SCC 268, P. T. R. Exports (Madras) Pvt. Ltd. and others v. Union of India and others, it has been held by the Supreme Court that the doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The Court leaves the authority to decide its full range of choice within the executive and legislative power. In matters of economic policy, it is a well settled law that the Court gives a large leeway to the executive and the legislature. The Court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. The Supreme Court in 1988 (4) SCC 59, State of UP. and others v. Renusagar Power Co. and others, held that the exercise of power, whether legislative or administrative, will be set aside if it is manifestly arbitrary or erroneous, or on a non-consideration or non-application of mind to relevant factors, or based on facts which do not exist. If the action or decision is perverse or is such that no reasonable body or persons, properly informed, could come to or has been arrived at by the authority misdirecting itself by adopting a wrong approach or has been influenced by irrelevant or extraneous matters, the Court would be justified in interfering with the same. In 1999 (5) SCC 138, J. Jayalalitha v. Union of India and another, it was held by the Supreme Court that policy can be gathered from the preamble, the provisions of the enactment and other surrounding circumstances. What has to be considered is whether the Act discloses a policy and lays down a guideline. As per B. R. Enterprises (supra) to interpret a provision, its pith and substance, its objects and reasons should be gathered, and it is that interpretation which subserves the object of the Act should be accepted. One golden rule is of respecting the wisdom of legislature that they are aware of the law and would never have intended for an invalid legislation. This also keeps Courts within their track and check individual zeal of going wayward. Yet in spite of this, if the impugned legislation cannot be saved, the Courts shall not hesitate to strike it down. The principle of reading down, however, will not be available where the plain and literal meaning from a bare reading of any impugned provision clearly shows that it confers arbitrary, uncanalised or unbridled power. 31. Now coming back to the question raised before this Court about exercise of power of the State in fixing SAP, we have to hold and say that the State after coming to know about existence of its power regarding fixation of SAP by virtue of majority decision of the Supreme Court only utilized the power for recovery alone. State has neither formed suitable guidelines nor adopted any principle from identical legislation. As a result whereof, grievance was mounted by the passage of time. Therefore, when in the year 2006-07 a part of legislation was omitted, price of cane was enhanced without any reason and price of sugar fell down due to export policy, they have knocked the door of the judiciary. They said that if the condition persists, they will have no other alternative but to close down the industry. On the other hand, the State and the Cooperative Societies highlighted the subject matter of agreement between the Cooperative Societies and the sugar producing industries, fixation of price already made by the State and acting upon the industries on the basis of such agreement repeatedly. They also stated that the price fixation measure is for protection of the farmer from the exactions or producers against which he cannot protect himself. Doctrine of balancing originates from there. In the administrative action we rely upon the power of the executives but when such a wide power is vested, it should be exercised with greater circumspection. Greater is the power, greater should be the caution. Existence of power does not mean to give one on his mere asking. The entrustment of such power is neither to act in benevolence nor in the extra-statutory field. Entrustment of such a power is only for the public good and for the public cause. While exercising a power the authority has to keep in mind the purpose and the policy of the Act and while granting relief has to equate the resultant effect of such a grant on both the affecting parties. So every time the Government exercises its power it has to examine and balance this before exercising such a power. Thus, whenever any power is to be exercised, the Government must keep in mind, whether such a grant would recoil on the public or not and to what extent. Both the cane- growers and sugar producers are public at large for good governance by the State. State has to play an independent role with regard to price fixation of the sugarcane per year, so that the sugarcane-growers can get appropriate remunerative price and at the same time sugar producing factories can feel protective about their interest. Execution, performance and consideration are essential part of contract amongst the contracting parties. Here the bipartite contract is restricted under the law upto execution and performance. The consideration part will be fulfilled by the State without being party to the contract between the contracting parties. Therefore, by nomenclature it is contract or agreement but it is a dctted line contract under the law without power to bargain. In the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined in a manner that is fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. Statutory orders regulating the supply and distribution of goods by and between the parties under Control Orders in a State do not absolutely impunge on the freedom to enter into contract. Therefore, element of arbitrariness, unreasonableness and unfair play of the process is within the domain of judicial review. The writ petitioners being sugar producers are fighting for the cause at least from the month of August, 2006 for the purpose of fixation of appropriate price before execution of the purported agreement. Price has been fixed unilaterally by the State irrespective of the agreement between the cane-growers and the sugar producers in the month of December, 2006. In case of failure, the price will be recovered as land revenue, as such on the occasion of non-payment recovery certificate and citation will be issued. Therefore, to avoid the situation sugar producers were compelled to pay such amount to avoid any coercive action. Every year crushing season continues from the month of October of the year to the month of July of next year. Therefore, if by chance the sugar producers want to raise any grievance, they will get the opportunity to raise it between the month of August of the year till the date of fixation. Hence, there is no laches on the part of the sugar producing factories in approaching the State for consideration or invoking the jurisdiction of the Court when they have been faced with recovery certificates and/or citations. We find that in most of the cases sugar producing factories either for the coercive action on the part of the State or on the basis of several conditional interim orders of the Court have deposited 80-90% if not 100% of the SAP. Therefore, what the State want that at no point of time sugar producing factories will get an opportunity about consideration of their cause by the State at all. We think such submission is absurd in this situation. If the price is declared to be arbitrary and/or unreasonable then everything will fall down automatically irrespective of any agreement. Therefore, we have to draw a line to conclude the proceedings. (1) Whether Court by its unfettered power should legislate fixation of price? Our answer is "no". (2) Whether exercise of power by the State requires reconsideration? Our answer is "yes". 32. Hence, taking into account totality of the matter, we are of the view that following orders are necessary to be passed and accordingly passed hereunder: (a) Order impugned fixing SAP for the crushing season 2006-07 and circular/notification etc. in connection thereto stand quashed. (b) Consequently, the State will discharge the essential legislative function in its true sense by reassessing the SAP for the crushing season 2006-07 in consultation with the respective representatives of the cane-growers, sugar producing factories, appropriate executives of the Union and the State inclusive of representative of Cost Accounting Branch of the Ministry of Finance of the Union and the State, Commission for Agricultural Costs and Prices, National Sugar Institute Kanpur, and any other person or institute required for the purpose. (c) Calling of the representatives of the Union of India for sharing their experience regarding fixing the price and overall assessment, will not be treated to be interference with the existence of the power and authority of the State. (d) In case the legislature desires and wants to apply its discretion to form a Committee of experts and affected persons to make a report to work upon it and further wants that such Committee can be formed under the Chairmanship of a retired High Court or Supreme Court Judge to maintain absolute independency, they are at liberty to do so. (e) In either of cases the decision should be backed by reasons giving adequate outline of norms, criteria or guidelines to incorporate in the Act/rules/order/circular so that dispute in seriatim can be resolved for all time and delay in payment schedule price of sugarcane can be avoided. (f) Due to paucity of time, only for the crushing season 2006-07 norms, criteria or guidelines will be indicated in the decision having a binding effect upon the parties irrespective of making any formal amendment/circulation etc. , as prescribed above, and the parties will act upon the communication of the decision. (g) The Court is constrained to fix the period of three months for the purpose of entire exercise by the State, as directed hereinabove, due to intervention of the subsequent crushing season. (h) Subject to final decision and communication thereof, payment of SAP, in case of shortfall or adjustment/recovery in case of overpayment by the sugar producing factories, will be given effect, therefore, question of coercive action, if any, will arise at that juncture in the appropriate cases. (i) However, no part of the payment already made by the sugar producers to the cane-growers as per fixation of price by the State will be refunded by them. (j) This order will not affect or create any hindrance to any sugar producing factory in paying SMP to the Central Government regularly. 33. Thus, the writ petitions are disposed of. 34. No order is passed as to costs. 35. Let the original record produced by Sri Chandra Shekhar Singh, learned Additional Chief Standing Counsel, and kept under the sealed cover, be returned to him in the course of the day. .;