2012 (1) TMI 205 - SC - Indian Laws

Whether the State of Uttar Pradesh has the authority to fix the State Advised Price (for short, SAP ), which is required to be paid over and above the minimum price fixed by the Central Government?

Summary

Issues involved:
1. Whether the State of Uttar Pradesh has the authority to fix the State Advised Price (SAP) over and above the minimum price set by the Central Government?

Detailed Analysis:

Issue 1: State's Authority to Fix SAP
The central issue in this judgment revolves around whether the State of Uttar Pradesh possesses the power to establish the State Advised Price (SAP) for sugarcane, in addition to the minimum price determined by the Central Government. The appellants argue that the State lacks the authority to fix prices under the U.P. Sugarcane Act, citing the Constitution Bench judgment in Ch. Tika Ramji's case, which highlighted the legislative history and concluded that the State did not have the power to set sugarcane prices. This contention is supported by the absence of provisions in the U.P. Sugarcane Act for price fixation. The conflicting interpretations between Tika Ramji's case and the later U.P. Cooperative Cane Unions Federations case regarding the potential repugnancy of State-fixed prices with Central legislation further complicate the matter.

Issue 2: Conflict in Judgments
The judgment identifies a clear conflict between the decisions of the Constitution Benches in Tika Ramji's case and U.P. Cooperative Cane Unions Federations case. Given the recurring nature of disputes on similar issues in courts, the resolution of this conflict through an authoritative judgment of a larger Bench is deemed necessary in the interest of justice. The appellants advocate for a reference to a larger Bench to provide clarity on the legal principles involved.

Issue 3: Questions for Consideration
The judgment outlines several crucial legal questions to be deliberated by a larger Bench, including the exclusive power of the Central Government to fix sugarcane prices, the State Government's authority under the U.P. Sugarcane Act to determine prices, and the potential repugnancy of State laws with Central enactments. Additionally, the validity and legality of SAP fixation, compliance with constitutional provisions, and the presence of guidelines for price fixation are key issues requiring examination.

Conclusion and Direction
In light of the conflicting judgments and the need for a comprehensive resolution, the judgment refers all Civil Appeals and related matters to a larger Bench for adjudication. Meanwhile, the directive is issued for sugar factories to pay outstanding amounts to cane growers based on the SAP, with a stipulated timeline for payment. Failure to comply would result in interest liabilities. Notably, this payment directive does not prejudice the sugar factories' challenge to the State Government's legislative competence in imposing SAP, emphasizing the separate agreements in place between the parties.

This detailed analysis encapsulates the legal complexities, conflicting interpretations, and the need for a definitive resolution through a larger Bench's authoritative judgment in the context of the State's authority to fix sugarcane prices in Uttar Pradesh.