BHOPAL SUGAR INDUSTRIES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioner No. 1, namely, The Bhopal Sugar Industries Limited, Sehore, is a public limited company constituted under the Companies Act, 1956, petitioner No. 2 is the constituted attorney and factory manager of the petitioner company. The petitioner company has a factory situate at Sehore in the State of Madhya Pradesh for manufacture of sugar by vacuum pan process. By this petition under Article 226 of the Constitution, the petitioners challenge the validity of the Sugar (Price Determination for 1977-78 Production) Order, 1977, in relation to the State of Madhya Pradesh. By an amendment, the petitioners also challenge the validity of the Sugar (Price Determination for 1977-78 Production) Amendment Order, 1978, which was made during the pendency of the petition. These orders remained operative till 16th August 1978 when sugar was completely decontrolled.

(2.) Section 3 (1) of the Essential Commodities Act, 1955 (hereinafter referred to as 'the Act') confers power on the Central Government to make orders providing for regulating or prohibiting the production, supply and distribution of any essential commodity and trade and commerce therein. Sub-section (2) (f) of Section 3 enacts that any order made under Sub-section (1) of Section 3 may provide

(3.) It is not necessary to refer in detail to the history of partial control of sugar which is fully discussed by the Supreme Court in Panipat Co- operative Sugar Mills v. Union of India AIR 1973 SC 537 and Anakapalle Cooperative Agricultural & Industrial Society Ltd. v. Union of India, AIR 1973 SC 734. In exercise of the power conferred by Sub-section (2) (f) of Section 3 of the Act, the Central Government made the Levy Sugar Supply (Control) Order, 1972. By "Levy Sugar" is meant the sugar requisitioned by the Central Government under Subsection (2) (f) of Section 3. Clause 2 of the Levy Sugar Supply (Control) Order authorises the Central Government to issue directions by an order to any producer or recognized dealer to supply levy sugar of such type or grade and in such quantities to such persons or organisations in such areas or markets; or to such State Government, as may be specified in the order. The levy sugar requisitioned under Clause 2 of this order is for distribution to the consumers at a fair price. From 1974-75 till the control was finally lifted the Government requisitioned 65 per cent of the sugar produced by a producer as "levy sugar". The price payable for this sugar had to be fixed under Sub-section (3-C) of Section 3 of the Act by the Central Government. The remaining 35 per cent of sugar produced by each producer was "free sugar" which could be sold in market without any control as to its price.