ARUNA SUGARS LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) These writ petitions have been filed challenging the constitutionality of Section 6-A of the Tamil Nadu Prohibition Act("the TNP Act" in short) and the Tamil Nadu Molasses Control and Regulation Rules, 1958("State Rules" in short). In some writ petitions, the prayer sought for is for quashing of orders passed in exercise of the powers under the Act or the Rules and for forbearance from exercising such powers.

(2.) The petitioners in W.P. Nos.1921, 2097 and 5514 to 5516 of 1981, manufacture sugar. Under the Industrial (Development and Regulation) Act, 1951 ("the IDR Act" in short) it is declared that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. Sugar has been included in serial No.25 and fermentation Industry in Serial No.26 in the Schedule. In W.P.Nos.3568 and 6809 of 1988, the writ petitioner manufactures cattle feed. Molasses is a by-product in manufacture of sugar and used in the manufacture of cattle feed. So in both the cases the manufacture necessarily involves possession/ transport/ sale of molasses. The power to legislate in respect of the controlled industries vests with the Central Government traceable to Entry 52 of List I of the Seventh Schedule to the Constitution of India, and the Central Government has also framed the Molasses Control Order, 1961 ("Central Order" in short) under Section 18-G of the I.D.R Act. According to the petitioners, the State Rules encroach into the field occupied by the Central Legislature. Therefore, it is unconstitutional. Further, since Molasses is not an intoxicating liquor, State cannot assert its legislative competence under Entry 8 of List II of the Seventh Schedule. Finally, the State Rules confer unguided power to the licensing authority and therefore, they fail the test of reasonableness and are arbitrary.

(3.) According to the respondents, Entry 8 List II speaks of manufacture of liquor and therefore the State definitely has the power to regulate the possession, sale, use and transport of Molasses. Molasses is the most common and versatile source for manufacturing alcohol. Therefore, since the TNP Act and the Rules are clearly referable to Entry 8 List II, State's legislative competence would not be affected by Entry 52 of List I. The Molasses Control Rules deal only with the equitable distribution of Molasses and fair price. It is clear from the purpose for which the State Rules have been enacted that the intention of the State is to regulate the manufacture of intoxicating liquor. Therefore, even if there is any incidental encroachment into a field occupied by Entry 52 List I, the Constitutionality of the Section and the Rules remains unaffected since the principal object of the Rules is directly referable to Entry 8 of List II.