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TMI Blog1956 (4) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... by article 14 inasmuch as very wide powers are given to the Cane Commissioner which can be used in a discriminatory manner? Whether the impugned Act and the notification dated 27th 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? Whether the impugned Act and the notifications infringe the fundamental right guaranteed by article 19(1)(f) and (g) and article 31 of the Constitution? Whether the impugned Act is void in that it confers very wide powers on executive officials and is a piece of delegated legislation? Whether the impugned Act is destructive of the freedom of trade and commerce and thus is violative of article 301 of the Constitution? Held that:- 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 27th September,’1954 are violative of his fundamental right under article 19(1)(c) of the Constitution. 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. 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 10th 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 19th 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 ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 31st 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 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t) 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 promulgation of the Industries (Development and Regulation) Act, 1951 with effect from 8th 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 organized 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 15th July, 1953). This is the impugned Act the vires of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 27th 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 sugarcane. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 cottonseed; 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 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ([1940] F.C.R. 110, 134.), Thakur Jagannath Baksh Singh v. The United Provinces ([1946] F C R. 111, 119), and Megh Raj and Another v. Allah Rakhia and Others([1947] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Governor-General in Council v. The Province of Madras([1945] F.C R. 179, 191): "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([1940] F.C.R. 188, 201): "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([1921] 2 A.G. 91, 116). 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject-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 1st April, 1946 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 notifications 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Legislature 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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, 2nd 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([1926] 87 C.L.R 466, 489.) laid down one test of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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( A.I.R. 1939 Cal. 628) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the laws enacted 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 intention 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subject matter 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 mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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. Food crops 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 food crops generally or specified food crops 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 Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Legiislature". 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sulting the Factory and Canegrowers Cooperative 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 27th 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 Canegrowers 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(A.I.R. 1953 Mad. 98, 101):- "In this case, however, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 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 Cooperative 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbership 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scretion 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, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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