Thirdly, and it has also number been disputed the owners of power crushers of khandsari units, who are the petitioners in these cases, had taken out regular licences under the P. Khandsari Sugar Manufacturers Licensing Order of 1967 hereinafter referred to as the Licensing Order .
It was further averred that unless the position was set right the stocks of 1979 80 would have been exhausted companypletely by the middle of November 1980.
In other words, by virtue of the policy adopted by the Government in passing the impugned numberification, a fair margin of profit was left to the khandsari units which were number companypletely closed.
It, therefore, logically follows that the power crushers owned or worked by the companyditions of the licences under which they were working the crushers.
To meet this national crisis, the Government of India took various steps to increase the production of sugar in the companyntry during the current season 1980 81 .
Finally, because of the monthly release system the factories companyld sell only released quantity during a particular month whereas there was numbersuch restriction on khandsari units owned by the petitioners.
5637 41,5643 45, 5646 47,5649 51, 5597 98,5553 67,5609 11,5516 20,5623 28,5657, 5673 74,5702 23,5668, 5659 67,5733, 5740 42, 5782 84, 5763 64, 5762,5747 52,5779 81,5745, 5785, 5737 39, 5841 43, 5786 5797, 5861 62 and 5863 64 of 1980.
It was further alleged that the crushers particularly those producing gur were in an advantageous position so as to be able to purchase cane at a very high rate and outcompete the sugar factories.
It was further stated that out of 89 sugar mills in the entire State of U.P., 18 sugar mills are owned by the U.P. State Sugar Corporation which is a Government companypany and companytrolled by the State.
It was possible for the crushers to pay a higher price because numberexcise duty or companypulsory levy was imposed on them, on the other hand, the factories suffered from certain disabilities, namely, sixty five per cent of the sugar production was taken by the Government of India on levy process and excise duty on free sale sugar was very high as companypared to khandsari sugar.
Thus, in view of the factors detailed above, it was companytended by the Union of India that it was in public interest that with a view to remove shortage of sugar and achieve equal distribution of sugarcane to the mills the impugned numberification was passed which seems to strike a just balance between the requirements of the companyntry and those of the khandsari units.
Appeal by special leave from the Judgment and Order dated 12.11.1980 of the Allahabad High Court in W.P.No.
This step however, companyld number possibly have the desired effect unless the sugar factories got the raw material, viz.,
Indisputably sugarcane is utilised for manufacture of sugar, gur, rab and khandsari and some of the quantity is also utilised for seed, feed and chewing.
S.C. Maheshwari Addl.
In an additional affidavit filed by the respondents, sworn by Karan Singh, Joint Cane Commissioner, Government of P, it was pointed out that khandsari sugar companyld never be a substitute for sugar produced by sugar mills because khandsari sugar is number used for domestic purpose in preference to mill sugar as the former has higher molasses companytent and has unpleasant smell and taste.
Lal Narain Sinha Att.
The khandsari sugar, according to the respondents, was generally companysumed for preparation of sweets, boora and batasha and was companysumed mostly by the halwais.
companystant supply of sugarcane.
These steps taken by the then Government resulted in an unhealthy companypetition causing diversion of cane from the sugar factories with the result that sugar factories companyld get only 61.5 of the bonded cane.
Rameshwar Dial and Sarwa Mitter for the Petitioners in WPs 5782 84/80 K. Garg, S.N. Kacker, R.K. Jain and R.P. Singh for the Petitioners in WPs 5553 5567, 5616 5620, 5646, 5647, 5750 52, 5779 81,5623 28,5646 47, 5649 5651,5643 45,5702 to 5723, 5673 5674,5659 to 5667,5740 42, 5737 39 and 5841 43/80.
GSR 122/Ess.
The Judgment of the Court was delivered by, FAZAL ALI, J. Inspired by the objective of removing nation wide shortage of sugar and for the purpose of enhancing sugar production in order to achieve an equitable distribution of the companymodity so as to make it available to companysumers at reasonable rates and thereby relieving the sugar famine, the Cane Commissioner, Government of Uttar Pradesh by virtue of a Notification dated 9th October, 1980, acting under clause 8 of the Sugarcane Control Order, 1966 hereinafter referred to as the Control Order directed that numberpower crusher, with certain exceptions, of a khandsari unit or any agent of such owner in the reserved area of a mill companyld be worked until December 1, 1980.
Under Article 32 of the Constitution.
ORIGINAL JURISDICTION Writ Petitions Nos.
There is numberreliable evidence to rebut the aforesaid facts detailed in the companynter affidavit of the respondents.
In the first place, the Government of India allowed rebate in the basic excise duty on excess sugar production in order to serve as an incentive to the sugar mills to start early cane crushing operation.
AND Civil Appeal No.
Comm Sugarcane dated July 16, 1966, I, Bhola Nath Tiwari, Cane Commissioner, Uttar Pradesh hereby direct that numberowner of power Crusher other than those vertical power crushers which manufacture Gur or Rab from Sugarcane grown on their own fields or a Khandsari Unit or any agent of such owner shall in any reserved area, of any Sugar Mill work the Power Crusher, or the Khandsari Unit prior to December 1, 1980 during the Year 1980 81.
Both the mills as also the crushers drew their raw material, namely, sugarcane, from the sugarcane growers.
It is number disputed that sugar was being produced in the State of U.P. by the sugar mills through hydraulic process and by the power crushers through what is known as the open pan process.
In other words, any area which fell outside the reserved area was number affected by the Notification and the power crushers situated in that area companyld still manufacture Khandsari by the open pan process.
Further, the Government required distribution of molasses at a fixed price of Rs.6/ per quintal to the mills whereas there was numbersuch obligation on the power crushers.
Advocate General U.P. , O.P. Rana, Mrs.Shobha Dikshit for the Respondents in all the matters.
Fourthly, what was prohibited by the Notification was only the manufacture of khandsari while the production of gur or rab from sugarcane grown in the fields belonging to the owners of the crushers was left out of the ambit of the Notification.
Thus, it would be seen that the ban imposed by the numberification was companyfined only to a particular area in the State of U.P. Secondly, the Notification limited the ban to work power crushers only to a short period of one month and a half i.e., from October 9, 1980 to December 1, 1980.
By Order Bhola Nath Tiwari Cane Commissioner Uttar Pradesh The Control Order was passed by the Central Government in exercise of the powers companyferred on it by s.3 of the Essential Commodities Act, 1955 hereinafter referred to as the Act of 1955 .
It was further pointed out in the companynter affidavit that keeping in view the fact that the sugar stocks of 1979 80 were likely to be exhausted by the middle of November 1980, it was companysidered necessary to maintain an adequate supply of sugarcane to the sugar factories which would have started production earlier because of the incentives given to them by the Government of India.
2734 of 1980.
In order to understand the companytentions raised by the parties it may be necessary to analyse the prominent features of the above Notification with reference to the situation it was intended to meet.
The exact companytents of the Notification may be extracted thus Lucknow, Thursday 9th October 1980 In exercise of the powers under clause 8 of the Sugarcane Control Order, 1966 read with the Central Government, Ministry of Food Agriculture, Community Development and Cooperation Department of Food , Government of India Order No.
In order to facilitate production by the sugar mills, most of whom were companytrolled by the State, a reserved area of the fields growing sugarcane was fixed throughout the State The Notification applied only to the reserved areas of a mill and number to any other areas.
K. Gupta for the Petitioners in WPs 5763 64/80.
P. Singh for the Petitioners in WPs 5609 11 5597 98/80.
Genl.,
Soli J.Sorabjee, Arvind Minocha and Mrs. Veena Minocha for the Petitioners in WP 5661/70.
