STATE OF BIHAR Vs. MOTIPUR SUGAR FACTORY LTD

JUDGEMENT

(1.) By the impugned judgement the learned single Judge has declared the Bihar Sugar Undertakings (Acquisition) Act, 1976 to be ultra vireos as being beyond the competence of the Bihar State Legislature. The learned Judge has also held that S.17 of the Act is also bad for excessive delegation. The reasons which have weighed the learned Judge in coming to these conclusions are briefly as hereunder.

(2.) Entry 24 of the State List conferring jurisdiction on the State Legislature to legislate on "Industries" has expressly been made subject to Entry 52 of the Union List. Entry 52 of the Union List confers exclusive jurisdiction on Parliament to legislate on "Industries", "the control of which by the Union is declared by Parliament by law to be expedient in the public interest". Parliament has made the requisite declaration in respect of sugar industries in S.2 of the Industries (Development and Regulation) Act, 1951 read with Entry 25 of the First Schedule thereof. Sugar thus being a declared industry, it goes out of Entry 24 of the State List and comes within Entry 52 of the Union List and hence the Bihar Legislature had no legislative competence to legislate in respect of sugar industries. As the impugned Bihar Act is a Legislation in respect of industrial undertaking in sugar industries, the same is void on account of legislative incompetence. As to the contention on behalf of the State that the impugned legislation was covered by Entry 42 of the Concurrent List conferring jurisdiction on Parliament and also State Legislatures to legislate on "acquisition and requisition of property", the learned Judge observed that "the acquisition is in respect of property, in respect of industry, the control of which has been taken over by the Centre and it is indisputable that the requisition of an industry or acquisition of an industry certainly affects the industry in its essential true sense in its manufacture and production" and that "to construe Entry 42 of List III in such a manner as to permit the requisition or acquisition of an industry the control of which has been taken over by the Centre will defeat the purpose of Entry 52 of List I".

(3.) We have not been able to persuade ourselves to agree with the process of reasoning adopted by the learned Judge. As is well settled, when the validity of a legislation is challenged on the ground of want of legislative competence and it becomes necessary to determine to which entries in the three lists, the legislation is referable to the Court has evolved the theory of pith and substance. If in pith and substance a legislation comes within one entry within the competence of the Legislature concerned, but some portion of the subject matter of the legislation incidentally trenches upon and might come under another entry not within the competence of the concerned Legislature, the legislation would still be valid as a whole notwithstanding such incidental trenching. We have made a thorough examination of the provisions of the impugned legislation and we are satisfied that in pith and substance the same is a legislation for acquisition of some of the sugar industries in Bihar. It is true that sugar is an industry the control of which has been taken over by the Union by the Industries (Development and Regulation) Act, 1951 under Entry 52 of the Union list. But the Central Act is concerned with the development and regulation of the industries and not with the ownership thereof. Therefore, the acquisition of the sugar industries under the Bihar Act and the vesting thereof in the State or Corporation thereunder would not affect any control exercised by the Union under the provisions of the Industries (Development and Regulation) Act, 1951.