Ch. Tika Ramji, v. State of Uttar Pradesh

These Petitions under article 32 of the

Constitution impugn the validity of the U.P. Sugarcane

(Regulation of Supply and Purchase) Act, 1953 (U.P. Act XXIV

of 1953) hereinafter called the impugned Act and the

notifications dated 27^th September, 1954 and 9^th November,

1955 issued by the U.P.Government thereunder.

The petitioners are sugarcane growers in the several

villages of the Districts of Meerut, Kheri, Gorakhpur and

Deoria in the State of U.P. numbering 4,724 in the

aggregate. Associated with them are the President, the

Vice-Presidents and the Secretary of an association which is

styled "the Ganna Utpadak Sangh" which is a rival body to

the Co-operative Development Unions established and

recognised under the impugned Act. The notification dated

27^th September, 1954, issued in exercise of the powers

conferred by sub-section 1 (a) read with sub-section 2(b) of

section 16 of the impugned Act ordered that where not less

than 3/4 of the cane growers of the area of operation of a

Cane Growers Co-operative Society are members of the

Society, the occupier of the factory for which the area is

assigned shall not purchase or enter into agreement to

purchase cane grown by a cane grower except through such

Cane Growers Co-operative Society. The notification dated

9^th November, 1955 was issued in exercise of the powers

conferred by section 15 of the impugned Act and reserved or

assigned to the sugar factories mentioned in column 2 of the

Schedule annexed thereto the cane purchasing centers (with

the authorities attached to them) specified against them in

column 3 for the purpose of supply of sugarcane during the

crushing season 1955-56 subject to the conditions and

explanations given therein. The former relates to the

agency of supply of sugarcane to the factories and the

latter relates to the creation of zones for particular

factories. All the Petitions except Nos. 0 of 1956 and 37

of 1956 impugn the former notification

but the grounds of attack against both are common. The

impugned Act is challenged as ultra vires the powers of the

State Legislature, the subject-matter of the Act being

within the exclusive field of Parliament and also as being

repugnant to Act LXV of 1951 and Act X of 1955 passed by

Parliament, and section 15 and section 16 (1) (a) and 2 (b)

and the notifications issued thereunder are challenged as

unconstitutional inasmuch as they infringe the fundamental

rights guaranteed under article 14, article 19(1)(c), (f)

and (g) and article 31 besides being in violation of article

301 of the Constitution. All these Petitions involve common

questions of law and may be disposed of by one judgment.

A short history of the legislation enacted by the Centre as

well as the Province of U.P. in regard to sugar and

sugarcane will be helpful for the determination of the

questions arising in these Petitions. On 8^th April, 1932,

the Central Legislature passed the Sugar Industry

(Protection) Act, 1932 (Act XIII of 1932) to provide for the

fostering and development of Sugar Industry in India in

pursuance of the policy of discriminating protection of

industries with due regard to the well being of the

community. As a result of the protection thus granted to

the sugar industry, the number of sugar factories which was

31 prior thereto registered a rapid rise and by 1938 they

were 139 in number. There was also a large expansion in the

cultivation of sugarcane and millions of cultivators in the

Province of U.P. took to growing sugarcane. In order to

protect their interests and for the purpose of assuring to

them a fair price for their produce, the Central Legislature

enacted on 1^st May, 1934 the Sugarcane Act, 1934 (Act XV of

1934) to regulate the price at which sugarcane intended to

be used in the manufacture of sugar might be purchased by or

for factories. Sugarcane was grown in various Provinces and

the declaration of controlled areas and the fixing of

minimum price for the purchase of sugarcane intended for use

in any factory in any controlled area was of necessity left

to the Provincial Governments and the Provincial

Governments were also empowered to make rules for the

purpose of carrying into effect the objects of the Act

including, in particular, the Organisation of growers of

sugarcane into Co-operative Societies for the sale of

sugarcane to factories.

With the coming into operation of the Government of India

Act, 1935, there was a distribution of legislative powers

between the Dominion Legislature and the Provincial

Legislatures and agriculture (Entry No. 20), trade and

commerce within the Province (Entry No. 27) and production,

supply and distribution of goods, development of industries

subject to the provision in List 1 with respect to

development of certain industries under Dominion control

(Entry No. 29) were included in List 11, the Provincial

Legislative List. The relevant provision in List 1 was

contained in Entry No. 34: "Development of industries where

development under Dominion control is declared to be in the

public interest". As a result of this distribution of

legislative powers, the entire subject-matter of Act XV of

1934 fell within the Provincial Legislative List. It was

felt that Act XV of 1934 was not sufficiently comprehensive

for dealing with the problems of the sugar industry and it

was found necessary to replace it by a new measure which

would provide for the better Organisation of cane supplies

to sugar factories. The Governments of U.P. and Bihar,

therefore, decided in consultation with each other to

introduce legislation on similar lines for both the

Provinces which together accounted for nearly 85 per cent.

of production of sugar in India. The U.P. Legislature

accordingly enacted on 10^th February, 1938 the U.P. Sugar

Factories Control Act, 1938 (U.P. Act 1 of 1938) to provide

for the licensing of the sugar factories and for regulating

the supply of sugarcane intended for use in such factories

and the price at which it may be purchased and for other

incidental matters. This Act provided for (a) the licensing

of sugar factories, (b) the regulation of the supply of

sugarcane to factories, (c) the minimum price for sugarcane,

(d) the establishment of Sugar Control Board and Advisory.

Committee, and (e) a

tax on the sale of sugarcane intended for use in factories,

and repealed Act XV of 1934. This Act was to remain in

force initially until 30^th June, 1947 but the period was

extended to 30^th June, 1950 by U.P. Act XIII of 1947 and to

30^th June, 1952 by U.P. Act XXI of 1950.

The Second World War intervened and an emergency was

proclaimed by the Governor-General under section 102 of the

Government of India Act, 1935. The Dominion Legislature

acquired the power to make laws for the Provinces with

respect to any of the matters enumerated in the Provincial

Legislative List. The result was in effect to make the

Provincial Legislative List also a Concurrent Legislative

List for the operation of the Dominion Legislature but if

any provision of a Provincial law was repugnant to any

provision of the Dominion law made in exercise of that

power, the Dominion law was to prevail and the Provincial

law was to be void to the extent of the repugnancy. The

proclamation of emergency was to operate until revoked by a

subsequent proclamation and laws made by the Dominion

Legislature as above were to have effect until the

expiration of a period of six months after the proclamation

had ceased to operate. The Defence of India Act and the

Rules made thereunder occupied the field, sugar was made a

controlled commodity in the year 1942 and its production and

distribution as well as the fixation of sugar prices were

regulated by the Sugar Controller thereafter. The

proclamation of emergency was revoked on 1^st April, 1946 and

the laws made by the Dominion Legislature in the field of

the Provincial Legislative List were to cease to have effect

after 30^th September, 1946. On 26^th March, 1946, the

British Parliament enacted the India (Central Government and

Legislature) Act, 1946 (9 & 10 Geo. 6, Chapter 39). Section

2(1) (a) provided that notwithstanding anything in the

Government of India Act, 1935, the Indian Legislature shall

during the period mentioned in section 4 of the Act have

power to make laws with respect to the following matters:

"(a) trade and commerce (whether or not within

a Province) in, and the production, supply and distribution

of, cotton and woollen textiles, paper (including

newsprint), foodstuffs (including edible oil seeds and

oils), petroleum and petroleum products, spare parts of

mechanically propelled vehicles, coal, iron, steel and

mica;………."

The period provided in section 4 was the period of one year

beginning with the date on which the proclamation of

emergency ceased to operate or, if the Governor-General by a

public notification directed, a period of 2 years beginning

with that date. There was a proviso to that section that if

and so often as a resolution approving the extension of the

said period was passed by both Houses of Parliament, the

same period shall be extended for a further period of 12

months from the date on which it would otherwise expire but

it was not to continue in any case for more than 5 years

from the date on which the proclamation of emergency ceased

to operate.

Acting under the power reserved to it under section 2(1)(a)

aforesaid, the Central Legislature enacted on 19^th November,

1946, the Essential Supplies (Temporary Powers) Act, 1946

(Act XXIV of 1946) to provide for the continuance during the

limited period of powers to control production, supply and

distribution of, and trade and commerce in, certain

commodities. Section 1(3) of the Act provided that it shall

cease to have effect on the expiration of the period

mentioned in section 4 of the India (Central Government and

Legislature) Act, 1946. In the absence of a notification by

the Governor-General, the Act remained operative until 31^st

March, 1947 only. The Governor-General, however, issued a

notification on 3^rd March, 1947 continuing its force for a

period of two years from the date of the cessation of emer-

gency. By virtue of this notification, the Act would have

remained in force till 31^st March, 1948. On 18^th July,

1947, the Indian Independence Act was passed and India

became a Dominion on 15^th August, 1947. Under section 9

read with section 19(4) of the Indian Independence Act,

1947, the Governor-General passed an order on 14^th August,

1947 which substituted the

words "Dominion Legislature" for "Both Houses of Parliament"

in the proviso to section 4 of India (Central Government and

Legislature) Act, 1946 and also introduced a new section

4(a) by way of adaptation providing that the powers of the

Dominion Legislature shall be exercised by the Constituent

Assembly. On 25^th February, 1948, the Constituent Assembly

passed its first Resolution extending the operation of the

Act for one year up to 31^st March, 1949. On 3^rd March,

1949, a second Resolution was passed by the Assembly

extending the life of the Act by one year more up to 31^st

March, 1950. With the advent. of our Constitution on 26^th

January, 1950, Parliament was invested under article 369

with power for a period of 5 years from the commencement of

the Constitution to make laws with respect to the following

matters as if they were enumerated in the Concurrent List:

"(a) trade and commerce within a State in, and the

production, supply and distribution of foodstuffs (including

edible oil seeds and oil) ……………….."

The life of the Act was accordingly extended from time to

time up to 26^th January 1955 by Acts passed by Parliament.

Act XXIV of 1946 defined an essential commodity to mean any

of the following classes of commodities:

"(1) Foodstuffs …………………"

Food crops were defined as including crops of sugarcane.

Section 3 of the Act empowered the Central Government, so

far as it appeared to it to be necessary or expedient for

maintaining or increasing the supply of any essential

commodity or for securing its equitable distribution and

availability at fair prices to provide for regulating or

prohibiting the production, supply and distribution thereof

and trade and commerce therein. On 7^th October, 1950, the

Central Government, in exercise of the powers conferred upon

it by section 3 of the Act, promulgated the Sugar and Gur

Control Order, 1950, inter alia empowering it to prohibit or

to restrict the export of sugarcane from any area, to direct

that no gur or sugar shall be

manufactured from sugarcane except under and in accordance

with the conditions specified in the licence issued in this

behalf and to prohibit or to restrict the despatch of gur or

sugar from any State or any area therein. Power was also

given to fix minimum price of sugarcane and no person was to

sell or agree to sell sugarcane to a producer and no

producer was to purchase or agree to purchase sugarcane at a

price lower than that notified thereunder. This power of

fixing the price of sugarcane was exercised by the Central

Government from time to time by issuing notifications fixing

the minimum prices to be paid by the producers of sugar by

vacuum pan process or their agents for sugarcane purchased

by them during the 1950-51 crushing season in various States

including U.P.

On 31^st October, 1951, Parliament enacted the Industries

(Development and RegulatiOn) Act, 1951 (Act LXV of 1951) to

provide for the development and regulation of certain

industries. By section 2 of the Act it was declared that it

was expedient in the public interest that the Union should

take under its control the industries specified in the First

Schedule which included in item 8 thereof the industry

engaged in the manufacture or production of sugar.

The Province of Bihar which, along with U.P. contributed to

nearly 85 per cent. of production of sugar in India had also

on its Statute Book the Bihar Sugar Factories Control Act

VII of 1937. On 10^th April, 1938, a joint meeting of the

U.P. and the Bihar Sugar Control Boards was held at which it

was resolved that a Committee be appointed to enquire into

the working of the sugarcane rules and labour conditions

prevailing in the sugar factories in the two Provinces. The

Governments of the U.P. and Bihar accepted this

recommendation of the Sugar Control Boards and accordingly

appointed the Khaitan Committee, (1) to examine the working

of the sugarcane rules, (2) to look into the complaints of

malpractices received from time to time in connection with

the supply of sugarcane to the sugar factories, (3) to

enquire into the labour conditions of the sugar factories,

and (4) to suggest remedial measures for the shortcomings as

noted in (1), (2) and (3) above. Shibban Lal Saxena, the

present President of the Ganna Utpadak Sangh and one of the

petitioners before us was also a member of that Committee.

That Committee submitted its Report in 1940 recommending

inter alia abolition of the dual system of supply and

creation of a strong co-operative Organisation of the

sugarcane growers themselves as also creation of a zonal

system. The Indian Tariff Board had also, in the meanwhile,

made its Report on the sugar industry in the year 1938

commending the advantages of a zonal system. There was

further the report of the U. P. Sugar Industry Enquiry

Committee, 1951 called the Swaminathan Committee, which also

recommended the abolition of dual agencies of cane supplies

to factories and commended the desirability of employing the

agency of the Co-operative Societies for the purpose. It

also recommended that the U. P. Act I of 1938 should be

amended in order to make this regulation possible. Act LXV

of 1951 was brought into force with effect from 8^th May,

1952. In view of the same, certain provisions of U. P. Act

I of 1938 became inoperative. The U.P. Legislature,

therefore, passed on 29^th June, 1952 the U. P. Sugar

Factories Control Amendment) Act) 1952, deleting those

provisions and putting the amended Act permanently on the

Statute Book. The U. P. Act I of 1938, as thus amended,

continued in force till, as a result of the prior enactment

of Act LXV of 1951 and the report of the Indian Tariff Board

on the Sugar Industry as well as the reports of the Khaitan

Committee and the Swaminathan Committee mentioned above, the

U. P. Legislature enacted the impugned Act. The object of

the enactment was stated to be as follows: "With the promul-

gation of the Industries (Development and Regulation) Act,

1951 with effect from 8^th May, 1952, the regulation of the

sugar industry has become exclusively a Central subject.

The State Governments are now only concerned with the supply

of sugarcane to the sugar factories. The Bill is being

introduced in order to provide for a rational distribution

of sugarcane to factories, for its development on organised

scientific lines, to protect the interests of the cane

growers and of the industry and to put the new Act

permanently on the Statute Book" (Vide Statement of objects

and reasons published in the U. P. Gazette Extraordinary

dated 15^th July, 1953). This is the impugned Act the vires

of which is challenged in these Petitions. In exercise of

the rule-making power conferred by section 28 of the Act,

the U.P. Government made the U.P. Sugarcane (Regulation of

Supply and Purchase) Rules, 1954. The U. P. Government

also, in exercise of the powers conferred by section 16 of

the Act, promulgated the U.P. Sugarcane Supply and Purchase

Order, 1954, which came into effect from 19^th September,

1954. All these related to the supply and purchase of

sugarcane in U.P.

Act LXV of 1951 was amended by Act XXVI of 1953 which, by

adding Chapter III(b), invested the Central Government inter

alia with power so far as it appeared to it necessary or

expedient for securing the equitable distribution and

availability at fair prices of any- article or class of

articles relatable to any scheduled industry to provide by

notified order for regulation of supply and distribution

thereof and trade and commerce therein.

On 1^st April, 1955, Parliament enacted the Essential

Commodities Act, 1955 (Act X of 1955) to provide in the

interests of the general public for the control of

production, supply and distribution of, and trade and

commerce in, certain commodities. The essential commodity

there was defined to mean any of the following classes of

commodities:

"(v) foodstuffs, including edible oilseeds, and oils;

…………………………………….

(xi) any other class of commodity which the Central

Government may, by notified order declare to be an essential

commodity for the purposes of this Act, being a commodity

with respect to which Parliament has power to make laws by

virtue of Entry 33 in List III in the Seventh Schedule to

the Constitution;"

Food crops were defined as inclusive of crops of sugar

cane. Section 3(1) empowered the Central Government, if it

was of the opinion that it was necessary or expedient to do

so for maintaining or increasing the supply of any essential

commodity or for securing its equitable distribution and

availability at fair prices, to provide by order for

regulating or prohibiting the production, supply and

distribution thereof and trade and commerce therein.

Section 3(2) (b) inter alia provided for the making of such

an order for bringing under cultivation any waste or arable

land whether appurtenant to a building or not, for the

growing thereon of foodcrops generally or of specified

foodcrops. Section 16 of the Act repealed (a) the Essential

Commodities Ordinance, 1955, and (b) any other law in force

in any State immediately before the commencement of the Act

in so far as such law controlled or authorised the control

of the production, supply and distribution of, and trade and

commerce in, any essential commodity.

In exercise of the powers conferred by section 3 of the Act,

the Central Government promulgated on 27^th August, 1955 the

Sugar Control Order, 1955 and the Sugarcane Control Order,

1955. The latter empowered the Central Government, after

consultation with such authorities, bodies or associations

as it may deem fit by notification in the official Gazette

from time to time, to fix the price of sugarcane and direct

payment thereof and also to regulate the movement of sugar-

cane. The power to regulate the movement of sugarcane

comprised the power to prohibit or restrict or otherwise

regulate the export of sugarcane from any area for supply to

different factories and the power to direct that no gur

(jaggery) or sugar shall be manufactured from sugarcane

except under and in accordance with the conditions specified

in a licence issued in this behalf Clause 7 of this order

provided that the Sugar and Gur Control Order, 1950,

published by the Government of India in the Ministry of Food

and Agriculture, S.R.O. 735 dated 7^th October, 1950, and any

order made by a State Government or other authority

regulating or prohibiting the production, supply and

distribution of sugarcane and trade or

commerce therein were thereby repealed except as respect to

things done or omitted to be done under any such order

before the commencement of the order.

These are the respective Acts and Notifications passed by

the Centre as well as the State of U. P. in regard to sugar

and sugarcane.

Learned counsel for the petitioners urged before us:

(1) that the State of U. P. had no power to enact the

impugned Act as the Act is with respect to the subject of

industries the control of which by the Union is declared by

Parliament by law to be expedient in the public interest

within the meaning of Entry 52 of List I and is, therefore,

within the exclusive province of Parliament. The impugned

Act is, therefore, ultra vires the powers of the State

Legislature and is a colourable exercise of legislative

power by the State;

(2)the impugned Act is repugnant to Act LXV of 1951 and Act

X of 1955 and in the event of the Court holding that the

impugned Act was within the legislative competence of the

State Legislature, it is void by reason of such repugnancy;

(3)the impugned Act stands repealed to the extent that it

has been repealed by section 16 of Act X of 1955 and by

clause 7 of the Sugarcane Control Order, 1955, made in

exercise of the powers conferred by section 3 of Act X of

1955;

(4)the impugned Act infringes the fundamental right

guaranteed by article 14 inasmuch as very wide powers are

given to the Cane Commissioner which can be used in a

discriminatory manner;

(5)the impugned Act and the notification dated 27^th

September, 1954, violate the fundamental right guaranteed

under article 19(1) (e) in that the Co-operative Societies

are not voluntary organisations but a cane grower is

compelled to become a member of the Society before he can

sell his sugarcane to a factory;

(6)the impugned Act and the notifications infringe the

fundamental right guaranteed by article 19(1)(f) and (g) and

article 31 of the Constitution;

(7) the impugned Act is void in that it confers

very wide powers on executive officials and is a piece of

delegated legislation; and

(8) the impugned Act is destructive of the freedom of trade

and commerce and thus is violative of article 301 of the

Constitution.

Re. (1): This contention relates to the legislative

competence of the U.P. State Legislature to enact the

impugned Act. It was contended that, even though the

impugned Act purported to legislate in regard to sugarcane

required for use in sugar factories, it was, in pith and

substance, and in its true nature and effect legislation in

regard to sugar industry which had been declared by Act LXV

of 1951 to be an industry the control of which by the Union

was expedient in the public interest and was, therefore,

within the exclusive province of Parliament under Entry 52

of List I. The word 'industry', it was contended, was a word

of very wide import and included not only the process of

manufacture or production but also all things which were

necessarily incidental to it, viz., the raw materials for

the industry as also the products of that industry and

would, therefore, include within its connotation the

production, supply and distribution of raw materials for

that industry which meant sugarcane in relation to sugar

industry. It was also contended that in so far as the

impugned Act purported to legislate in regard to sugarcane

which was a necessary ingredient in the production of sugar

it was a colourable exercise of legislative power by the

State, ostensibly operating in its own field within Entry 27

of List II but really trespassing upon the field of Entry 52

of List I.

It was contended on behalf of the State on the other hand

that., after the advent of war and the proclamation of

emergency under section 102 of the Government of India Act,

1935 and by the combined operation of the India (Central

Government and Legislature) Act, 1946 and article 369 of the

Constitution taken along with the resolutions of the Houses

of Parliament extending the life of Act XXIV of 1946 up to

26^th January, 1955 and the Third Constitution Amendment Act

of 1954 amending Entry 33 of List

III, the Central Legislature was operating all along on what

became in effect the Concurrent field even in regard to

sugarcane, that the investing of the Central Government with

power to legislate in this sphere of the Provincial List did

not deprive the Provincial Legislature of such power and

that both the Central Legislature as well as the State

Legislatures had legislative competence to legislate in

regard to these fields which were for the purpose of

legislative competence translated into Concurrent fields and

that, therefore, the U.P. State Legislature was competent to

enact the impugned Act which would be valid within its own

sphere except for repugnancy with any of the provisions of

the Central Legislature covering the same field. –

The relevant Entries in the respective Lists of the Seventh

Schedule to the Constitution are as follows:

List I, Entry 52: Industries, the control of which by the

Union is declared by Parliament by law to be expedient in

the public interest.

List II, Entry 24: Industries subject to the provisions of

entry 52 of List 1.

Entry 27: Production, supply and distribution of goods

subject to the provisions of entry 33 of List III.

List III, Entry 33: As it stood prior to its amendment:-

Trade and commerce in and production, supply and

distribution of, the products of industries where the

control of such industries by the Union is declared by

Parliament by law to be expedient in the public interest.

Entry 33 as amended by the Constitution Third Amendment Act,

1954: Trade and commerce in, and the production, supply and

distribution of-

(a)the products of any industry where the control of such

industry by the Union is declared by Parliament by law to be

expedient in the public interest, and imported goods of the

same kind as such products;

(b) foodstuffs, including edible oilseeds and oils;

(c) cattle fodder, including oilcakes and other

concentrates;

(d) raw cotton, whether ginned or unginned, and cotton-

seed; and

(e) raw jute.

Production, supply and distribution of goods was no doubt

within the exclusive sphere of the State Legislature but it

was subject to the provisions of Entry 33 of List III which

gave concurrent powers of legislation to the Union as well

as the States in the matter of trade and commerce in, and

the production, supply and distribution of, the products of

industries where the control of such industries by the Union

was declared by Parliament by law to be expedient in the

public interest. The controlled industries were relegated

to Entry 52 of List I which was the exclusive province of

Parliament leaving the other industries within Entry 24 of

List II which was the exclusive province of the State

Legislature. The products of industries which were

comprised in Entry 24 of List II were dealt with by the

State Legislatures which had under Entry 27 of that List

power to legislate in regard to the production, supply and

distribution of goods, goods according to the definition

contained in article 366(12) including all raw materials,

commodities and articles. When, however it came to the

products of the controlled industries comprised in Entry 52

of List 1, trade and commerce in., and -production, supply

and distribution of, these goods became the subject-matter

of Entry 33 of List III -and both Parliament and the State

Legislatures had jurisdiction to legislate in regard

thereto. The amendment of Entry 33 of List III by the

Constitution. Third Amendment Act, 1954, only enlarged the

scope of that Entry without in any manner whatever

detracting from the legislative competence of Parliament and

the State Legislatures to legislate in regard to the same.

If the matters had stood there, the sugar industry being a

controlled industry, legislation in regard to the same would

have been in the exclusive province of Parliament and

production, supply and distribution of the product of sugar

industry,

viz., sugar as a finished product would have been within

Entry 33 of List III: Sugarcane would certainly not have

been comprised within Entry 33 of List III as it was not the

product of sugar industry which was a controlled industry.

It was only after the amendment of Entry 33 of List III by

the Constitution -Third Amendment Act, 1954 that foodstuffs

including edible oilseeds and oils came to be included

within that List and it was possible to legislate in. regard

to sugarcane, having recourse to Entry 33 of List III. Save

for that, sugarcane, being goods. fell directly within Entry

27 of List 11 and was within the exclusive jurisdiction' of

the State Legislatures. Production, supply and distribution

of sugarcane being thus within the exclusive sphere of the

State Legislatures, the U. P. State Legislature would be,

without anything more, competent to legislate in regard to

the same and the impugned Act would be intra vires the State

Legislature.

The argument, however, was that the word 'industry' was a

word of wide import and should be construed as including not

only the process of manufacture or production but also

activities antecedent thereto such as acquisition of raw

materials and subsequent thereto such as disposal of the

finished products of that industry. The process of

acquiring raw materials was an integral part of the

industrial process and was, therefore, included in the

connotation of the word 'industry' and when the Central

Legislature was invested with the power to legislate in

regard to sugar industry which was a controlled industry by

Entry 52 of List. I, that legislative power included also

the power to legislate in regard to the raw material of the

sugar industry, that is sugarcane, and the production,

supply and distribution of sugarcane was, by reason of its

being the necessary ingredient in the process of manufacture

or production of sugar, within the legislative competence of

the Central Legislature. Each entry in the Lists which is a

category or head of the subject-matter of legislation must

be construed not in a narrow or restricted sense but as

widely as possible so as to extend to all ancillary

or subsidiary matters which can fairly and reasonably be

said to be comprehended in it (Vide The United Provinces v.

Mst. Atiqa Begum and Others(1), Thakur Jagannath Baksh

Singh v. The United Provinces (2), and Megh Raj and Another

v. Allah Rakhia and Others(3)), and the topic 'industries'

should, therefore, be construed to include the raw materials

which are the necessary ingredients thereof and which form

an integral part of the industrial process.

Our attention was drawn in this connection to the definition

of 'industry' in section 2(j) of the Industrial Disputes

Act, 1947 (Act XIV of 1947):

"Industry" means any business, trade, undertaking,

manufacture or calling of employers and includes any

calling, service, employment, bandicraft, or industrial

occupation or avocation of workmen"

and also to the wide construction which was put upon the

term 'industry' in the Australian Insurance Staffs'

Federation v. The Accident Underwriters' Association and

Others(4) where it was construed to include "all forms of

employment in which large number of persons are employed,

the sudden cessation of whose work might prejudicially

affect the orderly conduct of the ordinary operations of

civil life". A similarly wide interpretation was put on the

word 'industry' by our Court in D. N. Banerji v. P. R.

Mukherjee and Others(5) where the dispute was between a

Municipality and its employees. These interpretations of

the term 'industry', however, do not help us because in

defining the word 'industry' in the Industrial Disputes Act,

1947, as also in putting the wide construction on the

term industry' in [1923] 33 C.L.R. 517, as well as 1953

S.C.R. 302, they were concerned mainly with the question

whether an industrial dispute arose between employers and

employees. Whether a particular concern came within the

definition of an 'employer' was determined with respect to

the criterion ultimately adopted

(1) [1940] F.C.R. 110, 134. (2) [1946] F C R. 111, 119. (3)

[1947] F.C.R. 77. (4) [19231 33 C.L.R. 517,

(5) [1953] S.C R. 302.

which was that the sudden cessation of such work might

prejudicially affect the orderly conduct of the ordinary

operations of civil life and the withdrawal of service would

be detrimental to the industrial system of the community and

might result in its dislocation. What we are concerned with

here is not the wide construction to be put on the term 'in-

dustry' as such but whether the raw materials of an industry

which form an integral part of the process are within the

topic of 'industry' which forms the subject-matter of Item

52 of List I as ancillary or subsidiary matters which can

fairly or reasonably be said to be comprehended in that

topic and whether the Central Legislature while legislating

upon sugar industry could, acting within the sphere of Entry

52 of List 1, as well legislate upon sugarcane.

If both the Central Legislature and the Provincial

Legislatures were entitled to legislate in regard to this

subject of production, supply and distribution of sugarcane,

there would arise no question of legislative competence of

the Provincial Legislature in the matter of having enacted

the impugned Act. The conflict, if any, arose by reason of

the interpretation which was sought to be put on the two

Entries, Entry 52 of List I and Entry 27 of List II put in

juxtaposition with each other. It was suggested that Item

52 of List I comprised not only legislation in regard to

sugar industry but also in regard to sugarcane which was an

essential ingredient of the industrial process of the

manufacture or production of sugar and was, therefore,

ancillary to it and was covered within the topic. If

legislation with regard to sugarcane thus came within the

exclusive province of the Central Legislature, the

Provincial Legislature was not entitled to legislate upon

the same by having resort to Entry 27 of List 11 and the

impugned Act was, therefore, ultra vires the Provincial

Legislature. There was an apparent conflict between the

legislative powers of the Centre and of the Provinces in

this respect which conflict could not have been intended

and, therefore, a reconciliation was to be attempted by

reading the two provisions together and by inter-

preting and where necessary modifying the language of one by

that of the other. Reliance was placed on the observations

of the Judicial Committee in The Citizens Insurance Company

of Canada v. William Parsons(1):

"In these cases it is the duty of the Courts, however

difficult it may be, to ascertain in what degree, and to

what extent, authority to deal with matters falling within

these classes of subjects exists in each legislature, and to

define in the particular case before them the limits of

their respective powers. It could not have been the

intention that a conflict should exist; and, in order to

prevent such a result, the two sections must be read

together, and the language of one interpreted, and, where

necessary, modified, by that of the other. In this way it

may, in most cases, be found possible to arrive at a

reasonable and practical construction of the language of the

sections, so as to reconcile the respective powers which

they contain, and give effect to all of them. In performing

this difficult duty, it will be a wise course for those on

whom it is thrown, to decide each case which arises as best

they can, without entering more largely upon an

interpretation of the statute than is necessary for the

decision of the particular question in hand". and also at

page 113:

"It is enough for the decision of the present case to say

that, in their view, its authority to legislate for the

regulation of trade and commerce does not comprehend the

power to regulate by legislation the contracts of a

particular business or trade, such as the business of fire

insurance in a single province………… " These

observations were quoted with approval by Gwyer, C. J. in

Re: The Central Provinces and Berar Sales of Motor Spirit

and Lubricants Taxation Act, 1938 (Central Provinces and

Berar Act No. XI V of 1938) (2) and it was further held that

the general power ought not to be construed as to make a

nullity of a particular power conferred by the same Act and

operating in the same field. The same duty of reconciling

apparently conflicting provisions was reiterated in

(1) [1881] L R. 7 A.C. 96,108.

(2) [1939] F.C.R. 18, 39.

Governor-General in Council v. The Province of Madras(1):

"But it appears to them that it is right first to consider

whether a fair reconciliation cannot be effected by giving

to the language of the Federal Legislative List a meaning

which, if less wide than it might in another context bear,

is yet one that can properly be given to it, and equally

giving to the language of the Provincial Legislative List a

meaning which it can properly bear".

Reliance was also placed on the observations of Gwyer, C. J.

quoted in Subrahmanyan Chettiar v. Muthuswami Goundan(2):

"As interpreted by the Judicial Committee, the British North

America Act presents an exact analogy to the India Act, even

to the overriding provisions in section 100(1) of the

latter: "The rule of construction is that general language

in the heads of section 92 yields to particular expressions

in section 91, where the latter are unambiguous": per Lord

Haldane in Great West Saddlery Co. v. The King(3). The

principles laid down by the Judicial Committee in a long

series of decisions for the interpretation of the two

sections of the British North America Act may therefore be

accepted as a guide for the interpretation of similar

provisions in the Government of India Act."

and it was contended that Entry 27 of List II should be

construed in a general manner as applying to production,

supply and distribution of goods in general and Entry 52 of

List I should be construed as comprehending within its scope

ancillary matters in relation to the controlled industries

thus excluding production, supply and distribution of goods

which would be thus comprised within it as ancillary matters

from the sphere of Entry 27 of List II. If this con-

struction was adopted it would avoid the apparent conflict

between the two Entries and would reconcile the powers of

the Provincial Legislatures with those of the Central

Legislature. It was, therefore, contended that the

Legislation in regard to sugarcane

(1) [1945] F.C R. 179, 191. (2) [1940] F.C.R. 188, 201.

(3) [1921] 2 A.G. 91, 116.

should be considered as ancillary to the legislation in

regard to sugar industry which is a controlled industry and

comprised within Entry 52 of List I and should be excluded

from Entry 27 of List II which should be read as covering

only those categories which did not fall within Entry 52 of

List I even though on a wide construction of the words

"production, supply and distribution of goods" they would be

capable of covering the same. If this construction was put

upon these two Entries, it would follow that the subject-

matter of the impugned Act was within the exclusive juris-

diction of Parliament being comprised in Entry 52 of List I

and was ultra vires the U.P. State Legislature. The answer

of the State of U.P. was two-fold: (1) after the advent of

the Second World War and all throughout up to 1955 when Act

X of 1955 was enacted by Parliament, the Centre was

operating upon the Concurrent field of legislation and that

whatever legislation in regard to sugarcane was enacted by

the Centre as part of its legislative activities in regard

to sugar was not under Entry 52 of List I but was in

exercise of its legislative powers under Concurrent

jurisdiction, and (2) that the impugned Act merely confined

itself to legislation in regard to sugarcane and did not

purport to legislate in regard to sugar which was

exclusively dealt with by the Centre. There was, therefore,

no trespass upon the exclusive jurisdiction of the Centre

and the impugned Act was within the legislative competence

of the State Legislature.

As has been noted above, the entire subject-matter of Act XV

of 1934 came within the Provincial Legislative List on a

distribution of legislative powers effected under the

Government of India Act, 1935 and the U.P. Legislature

enacted the U.P. Act I of 1938 covering the same field and

repealing Act XV of 1934. Entry 27 of List II related to

production, supply and distribution of goods and development

of industries except in regard to controlled industries,

and, in so far as in 1938 sugar was not a controlled

industry, the U.P. Legislature enacted provisions for the

licensing of the sugar factories and for regulating the

price and supply of sugarcane intended for use in

such factories. With the advent of War and the proclamation

of emergency under section 102 of the Government of India

Act, 1935, the Centre was invested with the power to make

laws for the Provinces with respect to any of the matters

enumerated in the Provincial Legislative List and the

Central Legislature as well as the Provincial Legislatures

were thus enabled to enact measures exercising concurrent

jurisdiction in regard to the topics enumerated in the

Provincial Legislative List. The emergency was about to

come to an end on the 1^st April, 1946 and the British

Parliament, therefore, on 26^th March, 1946, passed the

India. (Central Government and Legislature) Act, 1946, under

which, notwithstanding anything in the Government of India

Act, 1935, the Central Legislature was, for the period

specified in section 4 thereof, invested with the powers to

make laws with respect to (a) trade and commerce in, and the

production, supply and distribution of foodstuffs, edible

oilseeds and oils and this provision in effect continued the

power which had been vested in the Central Legislature

during the emergency under section 102 of the Government of

India Act, 1935. The period mentioned in section 4 of this

Act was extended from time to time up to 31^st March, 1950.

It was in pursuance of these powers that the Central

Legislature enacted Act XXIV of 1946 on 16^th November, 1946.

The essential commodities therein comprised inter alia

foodstuffs which would include sugar as well as sugarcane

and both sugar and sugarcane, therefore, came within the

jurisdiction of the Centre. Act XXIV of 1946 was continued

in force up to 31^st March, 1950 under the terms of section 4

of India (Central Government and Legislature) Act, 1946 by

the notification of the GovernorGeneral and the resolutions

passed by both the Houses of Parliament but before the

expiration of this extended period the Constitution was

inaugurated and under article 369 Parliament was invested

with the power to make laws inter alia with respect to trade

and commerce within a State and production, supply and

distribution of foodstuffs, edible oilseeds

and oils as if they were enumerated in the concurrent list

and it was by virtue of this power that Act XXIV of 1946 was

extended up to 26^th January, 1955 by diverse pieces of

legislation enacted by Parliament. Sugar and sugarcane thus

continued within the jurisdiction of the Centre right up to

26^th January, 1955. When Entry 33 of List III was amended

by the Constitution Third Amendment Act, 1954, foodstuffs

including edible oilseeds and oils were included therein and

both Parliament and the State Legislatures acquired

concurrent jurisdiction to legislate over sugar and

sugarcane Tradeand commercein, and production, supply and

distribution of, sugar and sugarcane thus could be dealt

with by Parliament as well as by the State Legislatures and

it was in exercise of this jurisdiction that Parliament

enacted Act X of 1955. The list of essential commodities

defined in section 2 of the Act comprised foodstuffs,

including edible oilseeds and oils, cattlefodder, raw cotton

and cotton-seed and raw jute which were items (b), (c), (d)

-and (e) in Entry 33 of List III and the products of the

controlled industries, coal, textiles, iron and steel,

paper, petroleum and petroleum products and any other class

of commodity which the Central Government may by

notification or order declare to be an essential commodity

for the purposes of the Act being a commodity with respect

to which Parliament has power to make laws by virtue of

Entry 33 of List III of the Seventh Schedule to the

Constitution, which were amongst the products of the

controlled industries specified in the First Schedule to Act

LXV of 1951. It follows that Act X of 1955 was enacted by

Parliament in exercise of the legislative powers conferred

upon it by Entry 33 of List III and was an exercise of

concurrent jurisdiction.

It is clear, therefore, that all the Acts and the noti-

fications issued thereunder by the Centre in regard to sugar

and sugarcane were enacted in exercise of the concurrent

jurisdiction. The exercise of such concurrent jurisdiction

would not deprive the Provincial Legislatures of similar

powers which they had under the Provincial Legislative List

and there would, there-

fore, be no question of legislative incompetence qua the

Provincial Legislatures in regard to similar pieces of

legislation enacted by the latter. The Provincial

Legislatures as well as the Central Legislature would be

competent to enact such pieces of legislation and no

question of legislative competence would arise. It also

follows as a necessary corollary that, even though sugar

industry was a controlled industry, none of these Acts

enacted by the Centre was in exercise of its jurisdiction

under Entry 52 of List 1. Industry in the wide sense of the

term would be capable of comprising three different aspects:

(1) raw materials which are an integral part of the in-

dustrial process, (2) the process of manufacture or

production, and (3) the distribution of the products of the

industry. The raw materials would be goods which would be

comprised in Entry 27 of List II. The process of

manufacture or production would be comprised in Entry 24 of

List II except where the industry was a controlled industry

when it would fall within Entry 52 of List I and the

products of the industry would also be comprised in Entry 27

of List II except where they were the products of the

controlled industries when they would fall within Entry 33

of List 111. This being the position, it cannot be said

that the legislation which was enacted by the Centre in

regard to sugar and sugarcane could fall within Entry 52 of

List I. Before sugar industry became a controlled industry,

both sugar and sugarcane fell within Entry 27 of List II

but, after a declaration was made by Parliament in 1951 by

Act LXV of 1951, sugar industry became a controlled industry

and the product of that industry, viz., sugar was comprised

in Entry 33 of List III taking it out of Entry 27 of List

II.' Even so, the Centre as well as the Provincial

Legislatures had concurrent jurisdiction in regard to the

same. In no event could the legislation in regard to sugar

and sugarcane be thus included within Entry 52 of List 1.

The pith and substance argument also cannot be imported here

for the simple reason that, when both the Centre as well as

the State Legislatures were operating in the concurrent

field,

there was no question of any trespass upon the exclusive

jurisdiction vested in the Centre under Entry 52 of List 1,

the only question which survived being whether, putting both

the pieces of legislation enacted by the Centre and the

State Legislature together, there was any repugnancy, a

contention which will be dealt with hereafter.

A more effective answer is furnished by comparison of the

terms of the U.P. Act I of 1938 with those of the impugned

Act. Whereas the U.P. Act I of 1938 covered both sugarcane

and sugar within its compass, the impugned Act was confined

only to sugarcane, thus relegating sugar to the exclusive

jurisdiction of the Centre thereby eliminating all argument

with regard to the encroachment by the U.P. State Legisla-

ture on the field occupied by the Centre. The U.P. Act I of

1938 provided for the establishment of a Sugar Control

Board, the Sugar Commissioner, the Sugar Commission and the

Cane Commissioner.The impugned Act provided for the

establishmentof a Sugarcane Board. The Sugar

Commissionerwas named as such but his functions under

rules 106and 107 were confined to getting information which

would lead to the regulation of the supply and purchase of

sugarcane required for use in sugar factories and had

nothing to do with the production or the disposal of sugar

produced in the factories. The Sugar Commission was not

provided for but the Cane Commissioner was the authority

invested with all the powers in regard to the supply and

purchase of sugarcane. The Inspectors appointed under the

U.P. Act I of 1938 had no doubt powers to examine records

maintained at the factories showing the amount of sugarcane

purchased and crushed but they were there with a view to

check the production or manufacture of sugar whereas the

Inspectors appointed under the impugned Act were, by rule

20, to confine their activities to the regulation of the

supply and purchase of sugarcane without having anything to

do with the further process of the manufacture or production

of sugar. Chapter 3 of U.P. Act I of 1938, dealing with the

construction and extension of sugar factories, licens 55

ing of factories for crushing sugarcane, fixing of the price

of sugar, etc., was deleted from the impugned Act. The

power of licensing new industrial undertakings was

thereafter exercised by the Centre under Act LXV of 1951 as

amended by Act XXVI of 1953, vide sections 1 1 (a), 12 and

13, and the power of fixation of price of sugar was

exercised by the Centre under section 3 of Act XXIV of 1946

by issuing the Sugar Control Order, 1950. Even the power

reserved to the State Government to fix minimum prices of

sugarcane under Chapter V of U.P. Act I of 1938 was deleted

from the impugned Act the same being exercised by the Centre

under clause 3 of Sugar and Gur Control Order, 1950, issued

by it in exercise of the powers conferred under section 3 of

Act XXIV of 1946. The prices fixed by the Centre were

adopted by the State Government and the only thing which the

State Government required under rule 94 was that the

occupier of a factory or the purchasing agent should cause

to be put up at each purchasing centre a notice showing the

minimum price of cane fixed by the Government meanig there

by the centre. The State Government also incorporated these

prices which were notified by the Centre from time to time

in the forms of the agreements which were to be entered

between the cane growers, the cane growers co-operative

societies, the factories and their purchasing agents for the

supply and purchase of sugarcane as provided in the U.P.

Sugarcane Supply and Purchase Order, 1954. The only

provision which was retained by the State Government in the

impugned Act for the protection of the sugarcane growers was

that contained in section 17 which provided for the payment

of price of sugarcane by the occupier of a factory to the

sugarcane growers. It could be recovered from such occupier

as if it were an arrear of land revenue. This comparison

goes to show that the impugned Act merely confined itself to

the regulation of the supply and purchase of sugarcane

required for use in sugar factories and did not concern

itself at all with the controlling or licensing of the sugar

factories, with the production or manufacture. of sugar or

with the

trade and commerce in, and the production, supply and

distribution of, sugar. If that was so, there was no

question whatever of its trenching upon the jurisdiction of

the Centre in regard to sugar industry which was a

controlled industry within Entry 52 of List I and the U.P.

Legislature had jurisdiction to enact the law with regard to

sugarcane and had legislative competence to enact the

impugned Act.

Re. (2): It was next contended that the provisions of the

impugned Act were repugnant to the provisions of Act LXV of

1951 and Act X of 1955 which were enacted by Parliament and,

therefore, the law made by Parliament should prevail and the

impugned Act should, to the extent of the repugnancy, be

void. Before dealing with this contention it is necessary

to clear the ground by defining the exact connotation of the

term "repugnancy". Repugnancy falls to be considered when

the law made by Parliament and the law made by the State

Legislature occupy the same field because, if both these

pieces of legislation deal with separate and distinct

matters though of a cognate and allied character, repugnancy

does not arise. So far as our Constitution is concerned,

repugnancy is dealt with in article 254 which provides:

"254. (1) If any provision of a law made by the Legislature

of a State is repugnant to any provision of a law made by

Parliament which Parliament is competent to enact, or to any

provision of an existing law with respect to one of the

matters enumerated in the Concurrent List, then, subject to

the provisions of clause (2), the law made by Parliament,

whether passed before or after the law made by the Legisla-

ture of such State, or, as the case may be, the existing

law, shall prevail and the law made by the Legislature of

the State shall, to the extent of the repugnancy, be void.

(2)Where a law made by the Legislature of a State specified

in Part A or Part B of the First Schedule with respect to

one of the matters enumerated in the Concurrent List

contains any provision repugnant to the provisions of an

earlier law made by

Parliament or an existing law with respect to that matter,

then, the law so made by the Legislature of such State

shall, if it has been reserved for the consideration of the

President and has received his assent, prevail in that

State:

Provided that nothing in this clause shall prevent

Parliament from enacting at any time any law with respect to

the same matter including a law adding to, amending, varying

or repealing the law so made by the Legislature of the

State".

We are concerned here with the repugnancy, if any, arising

by reason of both Parliament and the State Legislature

having operated in the same field in respect of a matter

enumerated in the Concurrent List, i.e., foodstuffs

comprised in Entry 33 of List III and we are, therefore, not

called upon to express any opinion on the controversy which

was raised in regard to the exact scope and extent of

article 254(1) in regard to "a law made by Parliament which

Parliament is competent to enact", as to 'whether the

legislative power of Parliament therein refers to List I)

List III and the residuary power of legislation vested in

Parliament under article 248 or is confined merely to the

matters enumerated in the Concurrent List (Vide A.I.R. 1942

Cal. 587 contra, Per Sulaiman, J. in 1940 F.C.R. 185 at p.

226).

Nicholas in his Australian Constitution, 2^nd ed., p. 303,

refers to three tests of inconsistency or repugnancy:-

(1)There may be inconsistency in the actual terms of the

competing statutes (R. v. Brisbane Licensing Court, [1920]

28 C.L.R. 23).

(2)Though there may be no direct conflict, a State law may

be inoperative because the Commonwealth law, or the award of

the Commonwealth Court, is intended to be a complete

exhaustive code (Clyde Engineering Co. Ltd. v. Cowburn,

[1926] 37 C.L.R. 466).

(3) Even in the absence of intention a conflict may arise

when both State and Commonwealth seek to exercise their

powers over the same subject matter (Victoria v. Common

wealth, [1937] 58 C.L.R. 618; Wenn

v. Attorney-General (Vict.), [1948] 77 C.L.R. 84).

Isaacs, J. in Clyde Engineering Company, Limited v.

Cowburn(1) laid down one test of inconsistency as

conclusive: "If, however, a competent legislature expressly

or implicitly evinces its intention to cover the whole

field., that is a conclusive test of inconsistency where

another Legislature assumes to enter to any extent upon the

same field".

Dixon, J. elaborated this theme in Ex parte McLean(2):

"When the Parliament of the Commonwealth and the Parliament

of a State each legislate upon the same subject and

prescribe what the rule of conduct shall be, they make laws

which are inconsistent, notwithstanding that the rule of

conduct is identical which each prescribes, and section 109

applies. That this is so is settled, at least when the

sanctions they impose are diverse. But the reason is that,

by prescribing the rule to be observed, the Federal statute

shows an intention to cover the subject matter and provide

what the law upon it shall be. If it appeared that the

Federal law was intended to be supplementary to or

cumulative upon State law, then no inconsistency would be

exhibited in imposing the same duties or in inflicting

different penalties. The inconsistency does not lie in the

mere co-existence of two laws which are susceptible of

simultaneous obedience. It depends upon the intention of

the paramount Legislature to express by its enactment,

completely, exhaustively, or exclusively, what shall be the

law governing the particular conduct or matter to which its

attention is directed. When a Federal statute discloses

such an intention, it is inconsistent with it for the law of

a State to govern the same conduct or matter".

To the same effect are the observations of Evatt, J. in

Stock Motor Plough Ltd. v. Forsyth(3):

"It is now established, therefore, that State and Federal

laws may be inconsistent, although obedience to both laws is

possible. There may even be incon-

(1) [1926] 87 C.L.R 466, 489. (2) [1980] 48 C.L.R. 472,

483.

(3) [1932] 48 C.L.R. 128, 147.

sistency although each law imposes the very same duty of

obedience. These conclusions have, in the main, been

reached, by ascribing "inconsistency" to a State law, not

because the Federal law directly invalidates or conflicts

with it, but because the Federal law is said to "cover the

field". This is a very ambiguous phrase, because subject

matters of legislation bear little resemblance to

geographical areas. It is no more than a cliche for

expressing the fact that, by reason of the subject matter

dealt with, and the method of dealing with it, and the

nature and multiplicity of the regulations prescribed, the

Federal authority has adopted a plan or scheme which will be

hindered and obstructed if any additional regulations

whatever are prescribed upon the subject by any other

authority; if, in other words, the subject is either touched

or trenched upon by State authority".

The Calcutta High Court in G. P. Stewart v. B. K. Roy

Chaudhury(1) bad occasion to consider the meaning of

repugnancy and B. N. Rau, J. who delivered the judgment of

the Court observed at page 632:

"It is sometimes said that two laws cannot be said to be

properly repugnant unless there is a direct conflict between

them, as when one says 'do" and the other "don't", there is

no true repugnancy, according to this view, if it is

possible to obey both the laws. For reasons which we shall

set forth presently, we think that this is too narrow a

test: there may well be cases of repugnancy where both laws

say "don't" but in different ways. For example, one law may

say, "No person shall sell liquor by retail, that is, in

quantities of less than five gallons at a time" and another

law may say, "No person shall sell liquor by retail, that

is, in quantities of less than ten gallons at a time".

Here, it is obviously possible to obey both laws, by obeying

the more stringent of the two, namely the second one; yet it

is equally obvious that the two laws are repugnant, for to

the extent to which a citizen is compelled to obey one of

them, the other, though not actually disobeyed, is

nullified".

The learned Judge then discussed the various auth-

(1) A.I.R. 1939 Cal. 628.

orities which laid down the test of repugnancy in Australia,

Canada, and England and concluded at page 634:

"The principle deducible from the English cases, as from the

Canadian cases, seems therefore to be the same as that

enunciated by Isaacs, J. in the Australian 44 hour case (37

C.L.R. 466) if the dominant law has expressly or impliedly

evinced its intention to cover the whole field, then a

subordinate law in the same field is repugnant and therefore

inoperative. Whether and to what extent in a given case,

the dominant law evinces such an intention must necessarily

depend on the language of the particular law".

Sulaiman, J. in Shyamakant Lal v. Rambhajan Singh(1) thus

laid down the principle of construction in regard to

repugnancy:

"When the question is whether a Provincial legislation is

repugnant to an existing Indian law, the onus of showing its

repugnancy and the extent to which it is repugnant should be

on the party attacking its validity. There ought to be a

presumption in favour of its validity, and every effort

should be made to reconcile them and construe both so as to

avoid their being repugnant to each other; and care should

be taken to see whether the two do not really operate in

different fields without encroachment. Further, repugnancy

must exist in fact, and not depend merely on a possibility.

Their Lordships can discover no adequate grounds for holding

that there exists repugnancy between the two laws in

districts of the Province of Ontario where the prohibitions

of the Canadian Act are not and may never be in force:

(Attorney-General for Ontario v. Attorney-General for the

Dominion ) (2) ".

In the instant case, there. is no question of any in-

consistency in the actual terms of the Acts enacted by

Parliament and the impugned Act. The only questions that

arise are whether Parliament and the State Legislature

sought to exercise their powers over the same subject-matter

or whether the laws enacted

(1) [1939] F.C.R. 188, 212.

(2) [1896] A.C. 348, 369-70,

by Parliament were intended to be a complete exhaustive code

or, in other words, expressly or impliedly evinced an

intention to cover the whole field. It would be necessary,

therefore, to compare the provisions of Act LXV of 1951 as

amended by Act XXVI of 1953, Act X of 1955 and the Sugar

Control Order, 1955 issued thereunder with those of the

impugned Act and U.P. Sugarcane Regulation of Supply and

Purchase Order, 1954 passed thereunder.

Act LXV of 1951 was an Act to provide for the development

and regulation of certain industries the control of which by

the Union was declared by the Act to be expedient in the

public interest and it embraced the various industries

mentioned in the First Schedule to the Act. The industry

engaged in the manufacture or production of sugar was one of

such industries and under the Act the Union acquired control

over the-same. The Act provided for the establishment and

constitution of a Central Advisory Council for the purposes

of advising it on matters concerning the development and

regulation of the scheduled industries. It also provided

for the establishment and constitution of Development

Councils for any scheduled industry or group of scheduled

industries. It further provided for the regulation of

scheduled industries by registration of existing industrial

undertakings and licensing of new industrial undertakings

and causing investigations to be made in the scheduled

industries or industrial undertakings. These provisions

were evidently intended to control the scheduled industries

and if the sugar industry was one of the scheduled

industries the control there of involved the development and

regulation of the sugar industry and the registration and

the licensing as also investigation into the affairs of the

undertakings which were engaged in the production or

manufacture of sugar. It did not involve the regulation of

the supply and purchase of sugarcane which, though it formed

an integral part of the process of manufacture of sugar. was

merely the raw material for the industry and as such not

within the purview of the Act. If the, Act had remained as

originally enacted the

provisions of the Act would not have been in any manner

whatever repugnant to the provisions of U.P. Act I of 1938

because both the Acts covered different fields. Act XXVI of

1953, however, introduced certain amendments in the Act. the

relevant amendment for our purpose being section 18-G which

provided as follows:-

"18-G. Power to control supply,distribution, price, etc.,

of certain articles.-

(1) The Central Government, so far as it appears to it

necessary or expedient for securing the equitable

distribution and availability at fair prices of any article

or class of articles relatable to any scheduled industry,

may, notwithstanding anything contained in any other

provision of this Act, by notified order, provide for

regulating the supply and distribution thereof and trade and

commerce therein.

"………………………………………………….."

Explanation.In this section, the expression 'article or

class of articles' relatable to any scheduled industry

includes any article or class of articles imported into

India which is of the same nature or description as the

article or class of articles manufactured or produced in the

scheduled industry".

Sugar industry being one of the scheduled industries, it was

contended for the petitioners that sugarcane was an article

relatable to the sugar industry and was, therefore, within

the scope of section 18-G and the Central Government was

thus authorised by notified order to provide for regulating

the supply and distribution thereof and trade and commerce

therein. If that was so, it was next contended, the field

of legislation in regard to sugarcane was covered by this

provision of the Act and was taken away from the

jurisdiction of the State -Legislatures, the avowed in-

tention being to cover the whole field of such legislation.

It was, however, urged on behalf of the State of U. P. that

articles relatable to scheduled industry comprised only

those finished products which were of the same nature or

description as the article or class of articles manufactured

or produced in the scheduled industry and did not comprise

the raw materials for

the scheduled industry. Reliance was placed in support of

this contention on the terms of the explanation to section

18-G as also to sections 15 and 16 of the Act where the same

words "any article or class of articles relatable to that

industry" were used. In our opinion, the contention of the

State is sound. The structure of the whole Act LXV of 1951

related to the development and regulation of the scheduled

industries and all the provisions which were contained in

the Act including those which were introduced therein by Act

XXVI of 1953 were designed for effectuating that purpose.

It is significant to note that, even in section 18-G, the

regulation which was intended was that of the supply and

distribution of the article or class of articles relatable

to the scheduled industry and the production of those

articles was not sought to be regulated at all. The raw

materials would certainly be essential ingredients in the

process of manufacture or production of the articles in the

scheduled industry but would not be of the same nature or

description as the article or class of articles manufactured

or produced therein,. The whole object of enactment of

section 18-G was to secure the equitable distribution and

availability at fair prices of such articles which by rela-

tion thereof to the article or class of articles manu-

factured or produced in the scheduled industry would affect

such manufacture or production or the supply and

distribution thereof or trade and commerce therein. Not

only were the article or class of articles relatable to the

scheduled industry which were themselves manufactured or

produced in this country sought to be controlled in this

manner but also the articles or class of articles imported

into India which were of the same nature or description as

the article or class of articles manufactured or produced in

the scheduled industry, so that all these articles whether

indigenous or imported would be controlled by the Central

Government by regulating the supply and distribution thereof

and trade and commerce therein with a view to develop and

regulate and thus control the scheduled industries in the

public interest. See-

tion 15 of the Act provided that where the Central

Government was of the opinion that, in respect of any

scheduled industry or industrial undertaking there had been

or was likely to be a substantial fall in the volume of

production in respect of any article or class of articles

relatable to that industry or manufactured or produced in

the industrial undertakings for which, having regard to the

economic conditions prevailing, there was no justification,

it may make or cause to be made full and complete

investigations into the circumstances of the case. If,

after making or causing to be made any such investigations,

the Central Government was satisfied that action under

section 16 was desirable it was to issue such directions to

the industrial undertakings concerned as may be appropriate

for regulating production of any article or class of

articles of any industrial undertakings or fixing the

standard of production, requiring the industrial

undertakings to take such steps as are considered necessary

to stimulate the development of the industry to which the

undertakings relate, prohibiting the industrial undertakings

from resorting to any act or practice which may reduce its

production capacity and economic value and controlling the

prices and regulating the distribution of any article or

class of articles which has been the subject-matter of

investigation. If any article or class of articles

relatable to that industry could thus be the subjectmatter

of investigation and if appropriate directions in the manner

indicated in section 16 could be given in relation thereto,

it is obvious that it would not be within the province of

the scheduled industry or industrial undertakings to take

such steps in regard to the controlling of the prices or

regulating the distribution of these articles or class of

articles unless they were within the sphere of the scheduled

industries or industrial undertakings. Raw materials for

the manufacture or production of the article or class of

articles in the scheduled industry would certainly not be

within this sphere and they would not be able to control the

prices or regulate the distribution thereof within the

meaning of section 16.

These articles or class of articles relatable to the

scheduled industry, therefore, were finished products and

not raw materials for the manufacture or production of the

articles or class of articles in the scheduled industry.

They were finished products of a cognate character which

would be manufactured or produced in the very process of

manufacture or production in the course of carrying on that

scheduled industry. The raw materials would certainly not

be included within this category and sugarcane which is the

raw material for the manufacture or production of sugar

could, therefore, not be included in the category of the

articles or class of articles relatable to the sugar

industry. Section 18-G, therefore, did not cover the field

of sugarcane and the Central Government was not empowered by

the introduction of section 18-G by Act XXVI of 1953 to

legislate in regard to sugarcane. The field of sugarcane

was not covered by Act LXV of 1951 as amended by Act XXVI of

1953 and the legislative powers of the Provincial

Legislatures in regard to sugarcane were not affected by it

in any manner whatever. If the two fields were different

and the Central legislation did not intend at all to cover

that field, the field was clear for the operation of State

legislation and there was no repugnancy at all between Act

LXV of 1951 and the impugned Act.

Even assuming that sugarcane was an article or class of

articles relatable to the sugar industry within the meaning

of section 18-G of Act LXV of 1951, it is to be noted that

no order was issued by the Central Government in exercise of

the powers vested in it under that section and no question

of repugnancy could ever arise because, as has been noted

above, repugnancy must exist in fact and not depend merely

on a possibility. The possibility of an order under section

18-G being issued by the Central Government would not be

enough. The existence of such an order would be the

essential prerequisite before any repugnancy could ever

arise.

Act X of 1955 included within the definition of essential

commodity food stuffs which we have seen above would include

sugar as well as sugarcane. This

Act was enacted by Parliament in exercise of the concurrent

legislative power under Entry 33 of List III as amended by

the Constitution Third Amendment Act, 1954. Foodcrops were

there defined as including crops of sugarcane and section

3(1) gave the Central Government powers to control the

production, supply and distribution of essential commodities

and trade and commerce therein for maintaining or increasing

the supplies thereof or for securing their equitable

distribution and availability at fair prices. Section

3(2)(b) empowered the Central Government to provide inter

alia for bringing under cultivation any waste or arable land

whether appurtenant to a building or not for growing thereon

of foodcrops generally or specified foodcrops and section

3(2)(c) gave the Central Government power for controlling

the price at which any essential commodity may be bought or

sold. These provisions would certainly bring within the

scope of Central legislation the regulation of the

production of sugarcane as also the controlling of the price

at which sugarcane may be bought or sold, and in addition to

the Sugar Control Order, 1955 which was issued by the

Central Government on 27^th August, 1955, it also issued the

Sugarcane Control Order, 1955, on the same date investing it

with the power to fix the price of sugarcane and direct

payment thereof as also the power to regulate the movement

of sugarcane.

Parliament Was well within its powers in legislating in

regard to sugarcane and the Central Government was also well

within its powers in issuing the Sugarcane Control Order,

1955 in the manner it did because all this was in exercise

of the concurrent power of legislation under Entry 33 of

List III. That, however, did not affect the legislative

competence of the U. P. State Legislature to enact the law

in regard to sugarcane and the only question which remained

to be considered was whether there was any repugnancy

between the provisions of the Central legislation and the U.

P. State legislation in this behalf. As we have noted

above, the U. P. State Government. did not at all provide

for the fixation of minimum

prices for sugarcane nor did it provide for the regulation

of movement of sugarcane as was done by the Central

Government in clauses (3) and (4) of the Sugarcane Control

Order, 1955. The impugned Act did not make any provision

for the same and the only provision in regard to the price

of sugarcane which was to be found in the U. P. Sugarcane

Rules, 1954, was contained in Rule 94 which provided that a

notice of suitable size in clear bold lines showing the

minimum price of cane fixed by the Government and the rates

at which the cane is being purchased by the centre was to be

put up by an occupier of a factory or the purchasing agent

as the case may be at each purchasing centre. The price of

cane fixed by Government here only meant the price fixed by

the appropriate Government which would be the Central

Government, under clause 3 of the Sugarcane Control Order,

1955, because in fact the U. P. State Government never fixed

the price of sugarcane to be purchased by the factories.

Even the provisions in behalf of the agreements contained in

clauses 3 and 4 of the U. P. Sugarcane Regulation of Supply

and Parchase Order, 1954, provided that the price was to be

the minimum price to be notified by the Government subject

to such deductions, if any, as may be notified by the

Government from time to time meaning thereby the Central

Government, the State Government not having made any pro-

vision in that behalf at any time whatever. The provisions

thus made by the Sugarcane Control Order, 1955, did not find

their place either in the impugned Act or the Rules made

thereunder or the U.P. Sugarcane Regulation of Supply and

Purchase Order, 1954, and the provision contained in section

17 of the impugned Act in regard to the payment of sugarcane

price and recovery thereof as if it was an arrear of land

revenue did not find its place in the Sugarcane Control

Order, 1955. These provisions, therefore, were mutually

exclusive and did not impinge upon each other there being

thus no trenching upon the field of one Legislature by the

other. Our attention was drawn to the several provisions

contained in the

Sugarcane Control Order, 1955 and the U.P. Sugarcane

Regulation of Supply and Purchase Order, 1954 and the

agreements annexed thereto and it was pointed out that they

differed in material particulars, the provisions of the

latter being more stringent than those of the former. It is

not necessary to refer to these provisions in any detail.

Suffice it to say that none of these provisions do overlap,

the Centre being silent with regard to some of the

provisions which have been enacted by the State and the

State being silent with regard to some of the Provisions

which have been enacted by the Centre. There is no repug-

nancy whatever between these provisions and the impugned Act

and the Rules framed thereunder as also the U.P. Sugarcane

Regulation of Supply and Purchase Order, 1954 do not trench

upon the field covered by Act X of 1955. There being no –

repugnancy at all, therefore., no question arises of the

operation of article 254(2) of the Constitution and no

provision of the impugned Act and the Rules made thereunder

is invalidated by any provision contained in Act LXV of 1951

as amended by Act XXVI of 1953 or Act X of 1955 and the

Sugarcane Control Order, 1955 issued thereunder.

Re. (3): It was then contended that the impugned Act stands

repealed to the extent that it has been repealed by section

16 of Act X of 1955 and clause 7 of the Sugarcane Control

Order., 1955 made in exercise of the powers conferred by

section 3 of Act X of 1955.

Section 16 of Act X of 1955 reads as under:

"16. (1) The following laws are hereby repealed:-

(a) the Essential Commodities Ordinance, 1955;

(b) any other law in force in any State immediately before

the commencement of this Act in so far as such law controls

or authorises the control of the production, supply and

distribution of, and trade and commerce in, any essential

commodity".

It is submitted that the impugned Act was "any other law" in

force in the State of U. P. immediately before the

commencement of Act X of 1955 and stood repealed in so far

as it controlled or authorised the

control of production, supply and distribution of, and trade

and commerce in, sugarcane which was comprised within

foodstuffs an essential commodity under Act X of 1955.

Clause 7 of the Sugarcane Control Order, 1955 made in

exercise of the powers conferred by section 3 of the Act

provided:

"7. (1) The Sugar and Gur Control Order, 1950, published

with the Government of India in the Ministry of Food and

Agriculture S.R.O. No. 735, dated the 7^th October, 1950, and

any order made by a State Government or other authority

regulating or prohibiting the production, supply and

distribution of sugarcane and trade or commerce therein are

hereby repealed, except as respect things done or omitted to

be done under any such order before the commencement of this

order".

It is submitted that the U.P. Sugarcane Regulation of Supply

and Purchase Order, 1954, made by the U.P. Government in

exercise of the powers conferred by section 16 of the

impugned Act is repealed in so far as it regulates or

prohibits the production, supply and distribution of

sugarcane or trade and commerce therein. These are

provisions for the express repeal of the impugned Act and

the U.P. Sugarcane Regulation of Supply and Purchase Order,

1954, and if the contention of the petitioners in this

behalf were accepted it would have the effect of nullifying

the provisions of the impugned Act and also the impugned

notifications which have been issued in exercise of the

powers conferred by sections 15 and 16 of the Act.

As regards section 16 of Act X of 1955, the validity and

effect thereof depends upon the construction to be put on

article 254(2) and the proviso thereto. Article 254(2)

deals with repugnancy between the provisions of a law made

by the State Legislature and those of an earlier law made by

Parliament or an existing law with respect to one of the

matters enumerated in the Concurrent List and provides that

the law so made by the State Legislature shall, if it has

been reserved for the consideration of the President and has

received his assent, prevail in the State. A

proviso, however, has been attached thereto which says that

"nothing in article 254(2) shall prevent Parliament from

enacting at any time any law with respect to the same matter

including a law adding to, amending, varying or repealing

the law so made by the State Legislature". Ordinarily

Parliament would not have the power to repeal a law passed

by the State Legislature even though it be a law with

respect to one of the matters enumerated in the Concurrent

List. Section 107 of the Government of India Act, 1935 did

not contain any such power. As was observed by this Court

in Zaverbhai Amaidas v. The State of Bombay(1), this

provision contained in article 254(2) "is in substance, a

reproduction of section 107 (2) of the Government of India

Act, 1935, the concluding portion whereof being incorporated

in a proviso with further additions. Discussing the nature

of the power of the Dominion Legislature, Canada, in

relation to that of the Provincial Legislature, in a

situation similar to that under section 107(2) of the

Government of India Act, it was observed by Lord Watson in

Attorney-General for Ontario v. Attorney General for the

Dominion(2), that though a law enacted by the Parliament of

Canada and within its competence would override Provincial

legislation covering 'he same field, the Dominion Parliament

had no authority conferred upon it under the Constitution to

enact a statute repealing directly any Provincial statute.

That would appear to have been the position under section

107(2) of the Government of India Act with reference to the

subjects mentioned in the Concurrent List. Now, by the

proviso to. article 254(2) the Constitution has enlarged the

powers of Parliament, and under that proviso, Parliament can

do what the Central Legislature could not under section

107(2) of the Government of India Act, and enact a law

addihg to, amending, varying or repealing a law of the

State, when it relates to a matter mentioned in the

Concurrent List. The position then is that under the

Constitution Parliament can, acting under the proviso to

article 254(2), repeal a State law".

(1) [1955] 1 S.C.R. 799, 806. (2) [1896] A.C. 348,

it is argued for the state of U.P. that, under the proviso

to article 254(2),the power to repeal a law passed by the

State Legislature is incidental to enacting a law relating

to the same matter as is dealt with in the State

legislation, and that a statute which merely repeals a law

passed by the State Legislature without enacting substantive

provisions on the subject would not be within the proviso,

as it could not have been the intention of the Constitution

that in a topic within the concurrent sphere of legislation

there should be a vacuum. There is considerable force in

this contention, and there is much to be said for the view

that a repeal simpliciter is not within the proviso. But it

is unnecessary to base our decision on this point, as the

petitioners must, in our opinion, fail on another ground.

While the proviso to article 254(2) does confer on

Parliament a power to repeal a law passed by the State

Legislature, that power is, under the terms of the proviso,

subject to certain limitations. It is limited to enacting a

law with respect to the same matter adding to, amending,

varying or repealing a "law so made by the State Legiisla-

ture". The law referred to here is the law mentioned in the

body of article 254(2). It is a law made by the State

Legislature with reference to a matter in the Concurrent

List containing provisions repugnant to an earlier law made

by Parliament and with the consent of the President. It is

only such a law that could be altered, amended or repealed

under the proviso. The impugned Act is not a law relating

to any matter, which is the subject of an earlier

legislation by Parliament. It is a substantive law covering

a field not occupied by Parliament, and no question of its

containing any provisions inconsistent with a law enacted by

Parliament could therefore arise. To such a law, the

proviso has no application and section 16 (1)(b) of Act X of

1955 and clause 7(1) of the Sugarcane Control Order, 1955

must, in this view, be held to be invalid.

There is also a further objection to which clause 7 (1) of

the Sugarcane Control Order, 1955 is open. The

power of repeal, if any, was vested in Parliament and

Parliament alone could exercise it by enacting an

appropriate provision in regard thereto. Parliament could

not delegate this power of repeal to any executive

authority. Such delegation, if made, would be void and the

Central Government had no power, therefore, to repeal any

order made by the State Government in exercise of the powers

conferred upon it by section 16 of the impugned Act. The

U.P. Sugarcane Regulation of Supply and Purchase Order,

1954, could not, therefore, be validly repealed by the

Central Government as was purported to be done by clause (7)

of the Sugarcane Control Order, 1955, and that repeal was of

no effect with the result that the U.P. Sugarcane Regulation

of Supply and Purchase Order, 1954 stood unaffected thereby.

The result, therefore, is that there was no repeal of the

impugned Act or the U.P. Sugarcane Regulation of Supply and

Purchase Order, 1954 by section 16 of Act X of 1955 or by

clause (7) of the Sugarcane Control Order, 1955 as contended

by the petitioners.

Re. (4): It is pointed out that the Cane Commissioner

declares the reserved or assigned areas for the factories,

and also transfers particular areas from one factory to

another. He is also in sole charge and management of Cane

Growers Co-operative Societies. It is contended that the

powers thus conferred upon him are so wide that they are

capable of being exercised in a discriminatory manner and

therefore the impugned Act infringes the fundamental right

guaranteed by article 14 of the Constitution. Section 15 of

the Act provides:-

"15. (1) Without prejudice to any order made under clause

(d) of sub-section (2) of section 16 the Cane Commissioner

may, after consulting the Factory and Canegrowers Co-

operative Society in the manner to be prescribed-

(a)reserve any area (hereinafter called the reserved area),

and

(b)assign any area (hereinafter called an assigned area),

for the purpose of the supply of cane to a factory in

accordance with the provisions of section 16 during a

particular crushing season and may likewise at any time

cancel such order or alter the boundaries of an area so

reserved or assigned.

(2) Where any area has been declared as reserved area for a

factory, the occupier of such factory shall, if so directed

by the Cane Commissioner, purchase all the cane grown in

that area, which is offered for sale to the factory.

(3) Where any area has been declared as assigned area for a

factory, the occupier of such factory shall purchase such

quantity of cane grown in that area and offered for sale to

the factory, as may be determined by the Cane Commissioner.

(4) An appeal shall lie to the State Government against the

order of the Cane Commissioner passed under sub-section

(1)".

Rule 22 of the U.P. Sugarcane (Regulation of Supply and

Purchase) Rules, 1954, made by the U.P. Government in

exercise of the rule-making power conferred by section 28

(2) of the Act however lays down the factors which are to be

taken into consideration by the Cane Commissioner in

reserving an area for or assigning an area to a factory or

determining the quantity of cane to be purchased from an

area by a factory:

(a) the distance of the area from the factory,

(b) facilities for transport of cane from the area,

(c) the quality of cane supplied from the area to the

factory in previous years,

(d) previous reservation and assignment orders,

(e) the quantity of cane to be crushed in the factory,

(f the arrangements made by the factory in previous years

for payment of cess, cane price and commission, and

(g) the views of the Canegroweria' Co-operative Society of

the area.

Chapter 11 of the Rules provides for the management of the

Canegrowers' Co-operative Societies by the Cane Commissioner

and their supervision by him.

Rule 63 of that chapter however provides–

"Rule 63.-An appeal against an order of the Cane

Commissioner under the provisions of this Chapter shall lie

to the State Government within one month of the date of the

communication of the order to the Society or management

concerned".

It will be thus seen that the powers given to the Cane

Commissioner under section 15 are well defined and have got

to be exercised within the limits prescribed after

consulting the factories and the Canegrowers'Co-operative

Societies (Vide section 15(1)) and any order made by the

Cane Commissioner thereunder is liable to an appeal to the

State Government at the instance of the party aggrieved

(Vide section 15(4)). The same is the position in regard to

the orders made by the Cane Commissioner in the course of

his management and supervision of the Canegrowers' Co-opera-

tive Societies and any order made by him in regard thereto

is subject to appeal to the State Government at the instance

of the party aggrieved (Vide Rule 63). If this is the

position, it cannot be urged that wide powers are conferred

on the Cane Commissioner which can be used by him in a

discriminatory manner so as to violate the fundamental right

guaranteed under article 14. Any cane grower or a

Canegrowers' Cooperative Society or the occupier of a

factory can, if aggrieved, take an appeal to the State

Government against any order passed by the Cane Commissioner

and such provision is a sufficient safeguard provided in the

Act and the Rules against any arbitrary exercise of those

powers by the Cane Commissioner and takes them out of the

ban of article 14.

Re. (5): It is next contended that the impugned Act and the

notification dated 27^th September, 1954 violate the

fundamental right guaranteed under article 19 (1) (c) which

is the right to form associations or unions. It is urged

that the Cane Growers Co-

operative Societies are not voluntary organisations but a

cane grower is compelled to become a member of the Society

before he can sell his sugarcane to a factory. The right to

form associations or unions is a positive right but in the

positive right it is urged there is necessarily implied the

negative aspect which means that a citizen has the right not

to form associations or unions and cannot be compelled to

become a member of an association or a union or a Cane-

growers' Co-operative Society before be can sell his goods

to the owner of a factory. Reliance is placed in support of

this contention on the following passage in the judgment of

the Madras High Court in Indian Metal and Metallurgical

Corporation V. Industrial Tribunal, Madras and Another(1):-

"In this case, however, we are concerned with a much

narrower question, namely, whether an award made by the

Industrial Tribunal appointed under the Industrial Disputes

Act and published by the Government in accordance with the

provisions of the Act can direct the management of an

industry to continue to carry on any business against their

will. If a citizen has got a right to carry on business, we

think it follows that, he must be at liberty not to carry it

on if he so chooses. A person can no more be compelled to

carry on a business than a person can be compelled to

acquire or hold property…….. Mr. Bhasyam was really

unable to convince us how any one can be compelled to carry

on a business against his will and yet be said to enjoy a

right to carry on a business".

The following passage from Strong on 'American Con-

stitutional Law', page 774, taken from the judgment of Mr.

Justice Murphy in West Virginia State Board v. Barnette(2)

is also relied upon–

"The freedom of thought and of religion as guaranteed by the

Constitution against State action includes both the right to

speak freely and the right to refrain from speaking at all,

except in so far as essential operations of government. may

require it for the

(1) A.I.R. 1953 Mad. 98, 101.

(2) 819 U.S 624, 646.

preservation of an orderly society,-as in the case of

compulsion to give evidence in court".

It is urged that, if the right to carry on business carries

with it by necessary implication a right not to carry on

business, if the right to speak freely carries with it by

necessary implication the right to refrain from speaking at

all, the right to form associations or unions also carries

with it by necessary implication the right not to form

associations or unions. In the first place, assuming that

the right to form an association implies a right not to form

an association, it does not follow that the negative right

must also be regarded as a fundamental right. The citizens

of India have many rights which have not been given the

sanctity of fundamental rights and there is nothing absurd

or uncommon if the positive right alone is made a

fundamental right. The whole fallacy in the argument urged

on behalf of the petitioners lies in this that it ignores

that there is no compulsion at all on any cane grower to

become a member of the Canegrowers' Co-operative Society.

The very definition of a cane grower given in the impugned

Act talks of "a person who cultivates cane either by himself

or by members of his family or by hired labour and who is

not a member of the Canegrowers' Co-operative Society". The

Sugarcane Board is to consist of inter alia 15 members to be

appointed by the State Government of whom 5 are to be the

representatives of canegrowers and the Canegrowers' Co-

operative Societies. The occupier of a factory has to

maintain a register of all such canegrowers and Canegrowers'

Co-operative Societies as shall sell cane to that factory.

The payment of commission on purchase of cane is to be made

by the occupier of a factory in both cases., whether the

purchase is made through a Canegrowers' Co-operative Society

or the purchase is made direct from the canegrowers. The

U.P. Sugarcane Regulation of Supply and Purchase Order,

1954, made in exercise of the powers conferred by section 16

of the impugned Act also talks of cane growers as well as

Canegrowers' Co-operative Societies and in

the case of reserved areas both the cane growers and the

Canegrowers' Co-operative Societies are entitled within 14

days of the issue of an order reserving. an area for a

factory to offer to supply cane grown in the reserved area

to the occupier of the factory and Form B in Appendix II of

that Order provides the form of agreement between the cane

grower and the occupier of a factory. The cane grower as

well as the Canegrowers' Co-operative Society are both

within the ken of the impugned Act and it cannot be urged

that the object of the Act is to promote Canegrowers'Co-

operative Societies to the prejudice of the cane grower

himself. The Canegrowers' Co-operative Societies are to be

fostered if at all for furthering the interests of the cane

growers and there is no conflict between the interests of

the cane growers on the one hand and those of the Cane-

growers' Co-operative Societies on the other. Both are

equally catered for by the impugned Act but it is only when

the State Government feels that there are circumstances

justifying the issue of an order under which the cane grown

by a cane grower shall not be purchased except through a

Canegrowers' Co-operative Society, the State Government, in

exercise of the power reserved under section 16(2)(b) would

issue an order accordingly. The impugned notification dated

27^th September, 1954 specifies the circumstances under which

such a prohibitory order can be made. If the membership of

a particular Canegrowers' Cooperative Society is not less

than 75 per cent. of the total number of cane growers within

the particular area, then and then only it is considered

expedient and desirable that all the cane purchased by an

occupier of a factory from that area should be purchased

only through the agency of the particular Canegrowers' Co-

operative Society. It is with a view to eliminate unhealthy

competition between the cane growers on the one hand and the

Canegrowers' Cooperative Societies on the other and also to

prevent malpractices indulged in by the occupier of a

factory for the purpose of breaking up the Canegrowers'

Co-operative Society that such a provision is made and a

notification issued prohibiting the occupier of a factory

from making any purchases from the area except through the

Canegrowers' Co-operative Society. It is a reasonable

provision made for the benefit of the large number of

persons forming the members of the Canegrowers' Co-operative

Society and cannot be impugned as in any manner violative of

any fundamental right of the petitioners.

There is also another fallacy in their argument and it lies

in ignoring that no canegrower is prevented from resigning

his membership of a Canegrowers' Co-operative Society.

These are voluntary organisations which a canegrower is

entitled to join or not at his choice. If he has once

joined it he is also entitled to resign his membership at

his choice and the only obstacle to his right of

resignation, as has been laid down in the bye-laws of the

Society, is the fact of his being indebted to the Society,

or the fact of his being a surety for debt due by another

member of the Society. Until these debts are discharged and

also until the crushing season during which the Canegrowers'

Co-operative Society has entered into an agreement with the

occupier of a factory is over, a member of a Society cannot

resign his membership. These restrictions do not fetter his

right to resign his membership of the Society. If be became

a member of the Society he is bound by the bye-laws of the

Society and can only resign his membership after fulfilling

all the conditions which are laid down in the bye-laws of

the Society.

The cane grower,, moreover, is not prevented absolutely from

selling his sugarcane. The only person to whom he cannot

sell his sugarcane is the owner of a factory but that does

not prevent him from selling his sugarcane to any other

person or for any other purpose, e.g. the manufacture or

production of gur or rab or khandsari or any variety of

product other than sugar. There may be of course

difficulties in the matter of his being able to sell the

same in

that manner but that does not mean that there is an absolute

restriction on his power of disposal of his goods unless and

until he becomes a member of a Canegrowers' Co-operative

Society. He is at perfect liberty not to become a member of

a Canegrowers' Co-operative Society if he chooses not to do

so and no power on earth can compel him to become such a

member. Just as he is not bound to become a member of a

Canegrowers' Co-operative Society he is equally not bound to

offer his sugarcane for sale to the occupier of a factory

even if he happens to be a canegrower within the area

reserved for that factory. His freedom in that behalf is

absolutely unrestricted and we do not see how it can be

urged that the provisions of the impugned Act and the

notification dated 27^th September,'1954 are violative of his

fundamental right under article 19(1)(c) of the Constitu-

tion.

Be. (6): It is further contended that the impugned Act and

the notifications infringe the fundamental right guaranteed

under article 19(1) (f) and (g) and article 31 of the

Constitution. We may refer in this context to the following

passage from the judgment of this Court delivered by

Mukherjea, J. (as he then was) in Messrs Dwarka Prasad Laxmi

Narain v. The State of Uttar Pradesh and two others (1):-

"Nobody can dispute that for ensuring equitable distribution

of commodities considered essential to the community and

their availability at fair prices, it is quite a reasonable

thing to regulate sale of these commodities through licensed

vendors to whom quotas are allotted in specified quantities

and who are not permitted to sell them beyond the prices

that are fixed by the controlling authorities. The power of

granting or withholding licenses or of fixing the prices of

the goods would necessarily have to be vested in certain

public officers or bodies and they would certainly have to

be left with some amount of discretion in these matters. So

far no exception can be taken; but the mischief arises when

the power con-

(1) [1954] S.C.R. 803, 811.

ferred on such officers is an arbitrary power unregulated by

any rule or principle and it is left entirely to the

discretion of particular persons to do anything they like

without any check or control by any higher authority. A law

or order, which confers arbitrary and uncontrolled power

upon the executive in the matter of regulating trade or

business in normally available commodities cannot but be

held to be unreasonable. As has been held by this court in

Chintaman v. The State of Madhya Pradesh, the phrase

"reasonable restriction" connotes that the limitation

imposed upon a person in enjoyment of a right should not be

arbitrary or of an excessive nature beyond what is required

in the interest of the public. Legislation, which

arbitrarily or excessively invades the right, cannot be said

to contain the quality of reasonableness, and unless it

strikes a proper balance between the freedom guaranteed

under article 19 (1) (g) and the social control permitted by

clause (6) of article 19, it must be held to be wanting in

reasonableness".

The power which is given to the Cane Commissioner under

section 15 of the Act for declaring reserved or assigned

areas is well defined and guided by the considerations set

out in Rule 22 of Chapter 6 of the U.P. Sugarcane

(Regulation of Supply and Purchase) Rules, 1954 and is

further conditioned that he has to consult the factory and

the Canegrowers'Co-operative Society, ,and his orders made

thereunder are subject to an appeal to the State Government

at the instance of the party aggrieved. This cannot by any

means be treated as an uncontrolled or an unfettered power

without recourse to any higher authority in the event of his

going wrong. The power is not absolute nor is it unguided

and, therefore, does not fall within the mischief of article

19(1)(f) and (g) and the notification dated 9^th November,

1955 cannot be impugned on that ground. The same is the

position with regard to notification dated 27^th September,

1954. The restriction which is imposed upon the cane

growers in regard to sales of their sugarcane to the

occupiers of factories in areas where the membership of the

Canegrowers' Co-operative Society is not less than 75 per

cent. of the total cane growers within the area is a

reasonable restriction in the public interest designed for

safeguarding the interests of the large majority of growers

of sugarcane in the area and works for the greatest good of

the greatest number. That being so, it comes well within

the protection of article 19(6) and the impugned

notification cannot be challenged as violative of the

fundamental right guaranteed under article 19(1)(f) and (g).

If these impugned notifications are, therefore, intravires

the State Legislature, they cannot be challenged also under

article 31 as none of the petitioners is being deprived of

his property, if any, save by authority of law.

Re. (7): It is next contended that the impugned Act is void

in that it confers very wide powers on the executive

officials and is a piece of delegated legislation. Our

attention has not been drawn to any provisions of the

impugned Act which would amount to a delegation of

legislative power to any officials of the State Government.

The only provisions alleged to contain such delegation of

legislative power are those contained in section 15 and

section 16(1)(b) read with section 16 (2) (b) of the

impugned Act which we have dealt with above. They are

certainly no piece of delegated legislation and the vires of

the impugned Act is not affected thereby.

Re. (8): It is lastly contended that the impugned Act is

destructive of freedom of trade and commerce and is thus

violative of article 301 of the Constitution. Article 301

of the Constitution does not occur in Part III which deals

with fundamental rights but it is urged that if a law was

enacted in violation of the provisions of article 301 it

will be no law at all and will certainly not avail the State

Government. In effect this is an argument in furtherance of

the contention in regard to article 19(1)(f) and (g) dealt

with above but we shall deal with it separately as it has

been urged as an independent ground of attack

against the constitutionality of the impugned Act and the

notifications issued thereunder. It is urged that the

impugned notifications are violative of the freedom of

trade, commerce and intercourse embodied in article 301 of

the Constitution. The petitioners are not free to sell

their sugarcane to anybody other than the occupier of a

factory or even to him except through the agency of a

Canegrowers' Co-operative Society and are not at all

entitled to sell their sugarcane to anyone outside the

State. Assuming this is go, the short answer to this

contention is furnished by the provisions of article 304 of

the Constitution which provide:

"304. Notwithstanding anything in article 301 or article

303, the Legislature of a State may by law-

(a)………………………………

(b) impose such reasonable restrictions on the freedom of

trade, commerce or intercourse with or within that State as

may be required in the public

interest:…………………"

We may-also refer in this context to the following passage

from the judgment of their Lordships of the Privy Council in

Commonwealth of Australia v. Bank of New South Wales(1)

which was quoted with approval in the later Privy Council

decision in Hughes and Vale Proprietary Ltd. v. State of New

South Wales and Others(2):-

"Every case must be judged on its own facts and in its own

setting of time and circumstance, and it may be that in

regard -to some economic activities and at some stage of

social development it might be maintained that prohibition

with a view to State monopoly was the only practical and

reasonable manner of regulation, and that inter-State trade,

commerce and intercourse thus prohibited and thus

monopolized remained absolutely free".

We have already stated in the earlier part of this judgment

that the restrictions imposed by the alleged notifications

are reasonable restrictions imposed on

(1) [1950] A.C. 235, 311.

(2) [1955] A.C. 241.

the petitioners in the public interest. We are, therefore,

of opinion that this contention also is of no avail to the

petitioners.

The result, therefore, is that the impugned Act and the

notifications dated 27^th September, 1954 and 9^th November,

1955 issued thereunder were intravires the State Legislature

and are binding on the petitioners.

The Petitions must, therefore, stand dismissed. In regard

to costs we feel that the proper order for costs should be

that Petitions Nos. 625 of 1954, 48 of 1955 and 47 of 1956

in which the President, the VicePresident and the Secretary

respectively of the anna Utpadak Sangh are amongst the

petitioners and Petition No. 37 of 1956 in which Saraya

Sugar Factory is the petitioner will stand dismissed with

costs, one set between all the petitions and between all the

Respondents in those petitions. The parties in the rest of

the Petitions will bear and pay their own respective costs

of those Petitions.