1982 (3) TMI 281 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the impugned notification under the Sugarcane (Control) Order, 1966.
2. Power of the Central and State Governments to fix minimum price and rebate for sugarcane.
3. Reasonableness and fairness of the prescribed rebate for binding material.
4. Alleged violation of freedom of trade under Article 19(1)(g) of the Constitution.

Issue-Wise Analysis:

1. Validity of the Impugned Notification:
The notification dated September 3, 1980, issued by the State of Uttar Pradesh with the permission of the Union of India, allowed a rebate of 0.625 kg per quintal for binding material in sugarcane bundles. The petitioners challenged this notification, arguing that it was based on a printing error and was not justified.

2. Power of the Central and State Governments:
Clause 4 of the Sugarcane (Control) Order, 1966, empowers the Central Government or a State Government, with the concurrence of the Central Government, to fix the minimum price of sugarcane. Clause 4A introduced in 1978, allows a rebate for binding material up to 0.625 kg per quintal. The Court noted that the power to fix minimum price and rebate has been exercised since 1968, and the purpose behind the rebate is to ensure that the price paid for sugarcane does not include the weight of the binding material.

3. Reasonableness and Fairness of the Prescribed Rebate:
The petitioners argued that the prescribed rebate of 0.625 kg per quintal was arbitrary and unrelated to trade practices, suggesting that the actual weight of binding material was higher. The Court examined the historical context and evidence, including the National Sugar Institute's survey, which supported the 0.625 kg rebate. The Court found that the rebate was determined by the law of averages and was in force for over a quarter of a century, thus not arbitrary or unrealistic.

4. Alleged Violation of Freedom of Trade:
The petitioners contended that the notification restricted their freedom of trade under Article 19(1)(g) of the Constitution. The Court held that the restriction did not directly and proximately interfere with the exercise of freedom of trade. Even if it did, the restriction was reasonable and imposed in the interest of the general public, as it protected sugarcane growers from exploitation by powerful sugar producers. The Court emphasized that the restriction ensured fair pricing and prevented fraud, thus serving the public interest.

Conclusion:
The Court dismissed the petitions, upholding the validity of the impugned notification and the prescribed rebate for binding material. The Court found that the power to fix minimum price and rebate was lawfully exercised, the rebate was reasonable and fair, and the restriction on trade was justified in the public interest. The petitions were dismissed with costs.