No conflict as long as minimum price of Sugarcane set by state is higher than Centre's price: Constitution Bench of Supreme Court
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No conflict as long as minimum price of Sugarcane set by state is higher than Centre's price: Constitution Bench of Supreme Court

Debayan Roy

A five judge Constitution Bench of the Supreme Court today ruled that there is no conflict between the minimum prices of sugarcane set by a state and the Centre, till the time the price set by the former is higher than that set by the latter.

The judgment was delivered via video conference by a Bench of Justices Arun Mishra, Indira Banerjee, Vineet Saran, MR Shah and Aniruddha Bose.

The Bench thus decided that there is no need to refer this question of conflict to a larger bench.

It was ruled that the Central government has complete authority to set the statutory minimum price and that state governments can fix an advisory price, which needs to be higher than the one fixed by Centre.

In effect, the Court has upheld the Supreme Court's five-judge Bench verdict in UP Cooperative Cane Unions Federation v. West UP Sugar Mills Association.

The case primarily revolves around a plea by the Western Uttar Pradesh Sugar Mills Association questioning whether the state government or the State Cane Commissioner had the power to fix a minimum price for sugarcane, when a similar price was already set by a central legislation.

Senior Advocate Jayant Bhushan, appearing for the petitioners, had submitted that even if the UP government or the cane commissioner had powers under the UP Sugarcane (Regulation of Supply & Purchase) Act 1953 to fix a price, such legislation would be repugnant to the Essential Commodities Act and the Sugarcane Control Order, 1966, which were Central legislation.

The petitioners had further contended that the power to regulate the distribution, sale or purchase of cane under Section 16 of the UP Sugarcane Act does not include the power to fix a price. 

The case law cited here to substantiate the point was Ch. Tika Ramji and others v. The State of Uttar Pradesh and others, which analyzed the legislative history of laws relating to pricing of sugarcane.

Both Central and state governments then had arrived at the specific conclusion that the power given to the state government to fix minimum price of sugarcane which existed in U.P. Act 1 of 1938 was to be deleted from the UP Sugarcane Act of 1953, since that power was being exercised by the Centre under Clause 3 of the Sugar and Gur Control Order, 1950.

Thus, in the present case, the UP government had argued that Tika Ramji only held that the state government did not fix the price.

Calling it "totally misplaced," Bhushan had stated that the Court in Tika Ramji specifically held that there was no power to fix a price for sugarcane under the UP Sugarcane Act 1953 or rules and orders made thereunder.

One of the primary contentions by the petitioner was that this issue needed to be referred to a larger bench of seven judges, since there was a direct conflict between the Constitution Bench judgments in Tika Ramji and UP Cooperative Cane Unions.

The majority in UP Cooperative Cane Union had held that the state-fixed price would not be repugnant to the Central legislation if the prices fixed by the state government was higher than that fixed by the central law.

However, the petitioners had made a case that there cannot be two minimum prices, one fixed by the Centre and the other fixed by the state government.

Bhushan had argued,

"Once the centre has fixed a minimum price, any other price whether minimum price or State advised price would be repugnant to the centre’s decision and the centre’s power and such power of the State Government would therefore have to yield to the Central legislation under Article 254 of the Constitution of India, both legislations being under the concurrent list."

The five judge constitution bench headed by Justice Arun Mishra, however, notes that so long as the price fixed by the state government is higher than the price set by the Centre, it cannot be said to be "void under Article 254 of the Constitution of India.

"It is only in a case where the “advised price” fixed by the State Government is lower than the “minimum price” fixed by the Central Government, the provisions of the Central enactments will prevail and the “minimum price” fixed by the Central Government would prevail. So long as the “advised price” fixed by the State Government is higher than the “minimum price” fixed by the Central Government, the same cannot be said to be void under Article 254 of the Constitution of India," reads the judgement.

[READ JUDGEMENT]

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