SHRIRAM INDUSTRIAL ENTERPRISES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Two Judges of this Court having differed in their opinion on the 9 question of competence of State Legislature to enact U.P. Shexra Niyantran Adhiniyam 1964 (U.P. Act No. XXIV of 1964) (in short, the Adhiniyam) have referred the following point of difference to third Judge for opinion:"Whether by virtue of Section 18G of the Industrial (Development and Regulation) Act, 1951, the State Legislature stood denuded of power to legislate regulating supply, distribution and price of molasses-a product of sugar industry, and was conseqeuntly incompetent to enact Sections 7, 8 and 10 of the Uttar Pradesh Sheera Niyantran Adhiniyam 1964 (U.P. Act No. 24 of 1964)?"Hon'ble the Chief Justice instead of referring the matter to the third Judge, constituted this Full Bench to answer the point of difference between the two Judges and that is how the matter has come up before us. It arises in the context of statement made in the Lok Sabha by the Minister of State in the Ministry of Chemical and Fertilisers regard ing decontrol of molasses and alochol which was followed by Notifications dated 10-6-1993 by which the Molasses Control Order 1961 and Ethyl Alcohol (Price Control) Order 1971 issued under Section 18G of the Industries (Development and Regulation) Act 1951 (hereinafter referred to as the Act) have been rescinded. On 11th of June, 1993 a circular letter addressed to the State Government by the Secretary to the Government, Department of Chemical and Petrochemicals, Ministry of Fertilisers Union of India was also sent giving the reasons for rescinding the aforesaid two control orders and further suggesting steps to be taken by the StateGovernment to prevent the undue diversion of molasses to potable alcohol sector.

(2.) Before an wering the question referred to us it would be appropriate to notice legislative development in respect of production use and control of molasses in the State of Uttar Pradesh.

(3.) In the year 1932 in response to the policy formulated by the Government of India for protection of sugar factories, large number of sugar factories came into existence resulting increase of production of sugar in the State of U.P. This bulk production of sugar created the problem of disposing of molasses which is a by product of sugar. In the year 1947 U.P. Molasses Act was enacted to provide grading of molasses and for regulating the supply there of for distilleries and the price at which it may be sold and for other purposes incidential thereto. In the year 1964 United provinces Molasses (Control) Act 1947 was repealed and an Act known as U.P. Sheera Niyantran Adhiniyam 1964 was enacted. Under Section 10 of the Adhiniyam the occupier of sugar factory was required to sell molasses in respect of which an order has been made at a price not exceeding what has been provided in the schedule of the Act. Before enactment of the Adhiniyam the Industries (Development and Regulation) Act 1951 was enacted and came into force in 8-5-1952. Sugar was mentioned in the schedule as Item No. 25 the control of which by the Central Government was declared to be expedient in the public interest. The Act was further amended in the year 1953 whereby Section 18G was inserted conferring power on the Central Government to control supply, distribution price etc of the articles produced by the industries controlled under the Act. It is the exercise of this power that the Central Government framed Molasses Control Order 1961. It is relevant to mention here that the Molasses Control Order 1961 was never applied to the State of U.P. as well as the State of Bihar and Control of Molasses so far as State of U.P. is concerned, continued to be governed by the Adhiniyam and such state of affairs contained till the rescinding of the Molasses Control Order 1961 on 10-6- 1993.