WEST U.P. SUGAR MILLS ASSOCIATION & ORS. versus THE STATE OF UTTAR PRADESH & ORS.

Summary

The Constitution Bench affirmed Uttar Pradesh’s power to fix a State Advised Price for sugarcane above the Central Government’s minimum price. The two can operate together without repugnancy; a lower State price cannot displace the central floor. Changes between the 1955 and 1966 control regimes explained the earlier decisions, so no seven-judge reference was necessary. The pending matters were returned to the appropriate court for disposal.

Issues

1. Whether Uttar Pradesh could fix a sugarcane price above the central minimum.
2. Whether the State regulatory power conflicted with the Central Act and Control Order.
3. Whether Tika Ramji and U.P. Cooperative Cane Unions Federations required reconciliation by seven judges.
4. Whether the price-fixing power was arbitrary or uncanalised.

Provisions considered

• Section 16, Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1953Held that regulation of cane purchase and supply includes fixing a higher State Advised Price. (¶¶ 8.1, 20.4, 20.4.1, 20.4.2, 20.4.3, 21, 23)
• Clause 3(1)–(3), read with Clause 3A as discussed, Sugarcane (Control) Order, 1966Distinguished the central minimum floor from a higher agreed or State Advised Price and permitted simultaneous operation. (¶¶ 8, 9, 18, 19, 20, 20.7.2, 22, 23)
• Article 254, Constitution of IndiaRejected repugnancy where the higher State price and central minimum could be obeyed together; the central floor prevails over a lower State price. (¶¶ 20, 20.1, 20.2, 20.3, 20.4, 22, 23)

Held

• The two earlier Constitution Bench decisions addressed different factual and statutory settings. Tika Ramji did not decide the later question of a higher State Advised Price; the 1955 Order was subsequently replaced by the 1966 regime retaining a central minimum and contemplating higher agreed prices. No apparent conflict required a seven-judge reference. (¶¶ 8, 9, 9.1, 10.1, 11, 12, 13, 14, 15, 16, 17, 18, 21, 23)
• Section 16’s regulatory power includes price fixation. The State can determine a remunerative or advised price higher than the central minimum, and the Cane Commissioner can require compliance. The central minimum is the binding floor and cannot be undercut by a State price. (¶¶ 19, 20, 20.4, 20.4.1, 20.4.2, 20.4.3, 20.5.1, 21, 22, 23)
• Actual irreconcilable conflict, rather than merely overlapping subject matter or a possible future inconsistency, is necessary for repugnancy in this setting. A higher State price satisfies the central minimum simultaneously, so Section 16 is not repugnant to the Central Act’s price-control provision or Clause 3 of the 1966 Order. (¶¶ 20, 20.1, 20.2, 20.3, 20.4, 22, 23)
• The record showed price determination guided by relevant considerations including cultivation, transport, reasonable grower return, demand, industry profitability and avoidance of cane diversion. The regulatory power was not arbitrary or uncanalised. Mills benefiting from the composite procurement agreement could not reject its State-price term merely as involuntary. (¶¶ 20.5, 20.5.1, 20.6, 20.7, 20.7.1, 21)
• U.P. Cooperative Cane Unions Federations states the correct law. The Court answered the reference and directed listing of the individual matters before the appropriate court for disposal. (¶¶ 23, 24)

Result

Reference answered affirming the State’s higher advised-price power and rejecting the need for a seven-judge reference. Individual matters directed to the appropriate court for disposal.