The growers are required to enter into agreements with the factory to supply sugarcane of the quantity fixed under the provisions of the 1966 Control order.
The members of the societies entered into agreement with the appellant factory through the respondent societies for the supply of sugarcane.
The societies are recognised both by the Government of India and the appellant factory for the purpose of the 1966 Control order.
The provision was thereafter incorporated in the 1966 Control Order.
The additional price is fixed accordance with the provisions of the Schedules to the Order.
The Central Government determines the quantity of sugarcane to be supplied by the growers in the reserved area and the quantity of sugarcane which the factory requires for crushing during any year.
The respondent companytended that the power of exemption affected the right of growers to get additional price for sugarcane supplied by them and that the Central Government was required to exercise the power judicially and in companyformity with the principles of natural justice.
The respondent challenged the validity of the order of the Government granting exemption wholly or partially to the appellant.
The appellant further companytended that right to additional price companyld number vest in the cane growers until the manner of payment had been decided upon by the Central Government under clause 5 6 of the 1966 Control order, These companytentions are unacceptable.
The subsequent order by the Government granting exemption to the factories for payment of additional price takes away rights which had a accrued in favour of the growers of sugarcane.
On determination of the price, the same is required to be intimate, in writing to the producer of sugar, growers, Cooperative Societies of growers or the local growers association.
ln providing for payment of additional price, the additional price fixation authority takes into account the relevant companysiderations relating to the companyditions of sugarcane growers as well as the promotion of the sugar industry during the relevant period.
The power to grant exemption to factories from payment of additional price is ultimately companynected with the right of sugarcane growers to claim additional price.
The respondent received companyies of companymunication dated 11 September 1968 sent by the Government of India to the appellant exempting it, from making payment of the aforesaid additional price.
The manner of payment of additional price under clause S 6 of the 1966 Control order does number affect the right and interest of growers.
The growers experienced impact of in crease in the companyt of growing sugarcane and the restrictions placed by the Government preventing them from selling sugarcane to persons or at prices of their choice.
In determining the minimum price, the Government is required to take into account a companyt of production of sugarcane, b return to the grower from alternative crops and the general trend of prices of agricultural companymodities c the availability of sugar to the Consumer at a fair price d the price at which sugar produced from sugarcane is sold by producers of sugar and e the recovery of sugar from sugarcane.
It appears that the said order was made pursuant to applications made on behalf of the appellant on or about 11 July 1968 seeking exemption on the ground that the appellant had made inadequate profits.
Clause 5 5 states that any producer of sugar or grower of sugarcane or growers companyperative society who feels aggrieved by any decision of the person or authority referred to in sub clause 4 may appeal to he Central Government.
From the Judgment and order dated 4th day of May 1970 of the Bangalore High Court in Writ Petitions Nos.
The grant, of exemption from payment of price affects rights and interests of the growers of sugarcane.
S.Desai, P. C. Bhartari, J. B. Dadachanji, o. c. Mathur and R. Narain for the appellant.
Clause 3 of the 1966 Control order provides for fixation of minimum price of sugarcane payable by manufacturers of sugar to the growers.
Sub clause 5 of clause 5 of the 1966 Control order provides for an appeal to the Government of India from the decision determining additional price.
In the background of these provisions, the appellant companytends that the power to grant exemption is where the Government is satisfied that in any year a factory has made numberprofit or has made inadequate profit and the same should be determined from the balance sheet and profit and loss accounts of a companypany and there is numberobligation to hear any party.
K. Sen and S. S.Javali and B.P.Singh for Respondent No.
The respondent is a companyoperative society of growers of sugarcane who k have supplied sugarcane to the appellant factory.
Sub clause 3 is as follows If the Central Government is satisfied that during any year a factory has made numberprofit or has made inadequate profit, that Government, may by order in writing, exempt either wholly or partially, any producer of sugar from payment of the additional price due from him under sub clause 1 in respect of sugarcane purchased for that factory during that year.
The societies advanced monies to the grower members for their agricultural operations.
3958, 4035/68, 18 and 19 of 1969.
The provision for granting exemption is part of the procedure prescribed by clause of the 1966 Control order.
It is also said by the appellant that the determination of additional price and the exemption from payment of the additional price are separate matters independent of each other.
The additional price fixation authority afforded opportunity to both the growers of sugarcane as well as the producers of sugar to be heard in the determination of the additional price.
The relevant provision for purposes of the present appeals is sub.
The several respondent Co operative Societies filed writ petitions in the High Court for quashing orders dated 11 September 11 1968 passed by the Government of India.
The sugarcane grown in that area is required to be sold to the factory allotted.
The appellant in Civil Appeals No.
It, is, therefore, necessary for the Government to invite the points of view or objections of the growers on the application made by the factories producing sugar seeking exemption from payment of additional price.
Clause 5 1 of the order speaks of payment of additional price found due in accordance, with the provisions of the Schedule.
The power to grant exemption cannot be said to be independent of the provisions under clause 5 of the order.
The additional price fixation authority also companysiders the companyditions and circumstances relating to the appellant factory in determining the additional price payable.
Sub clause 1 of clause 5 provides that in respect of sugarcane purchased, by producers of sugar during each of the four successive years beginning from 1 November 1958, the producer is required to pay an additional price in addition to the minimum price A fixed under clause 3 1 of the 1966 Control Order.
The Government wholly exempted the appellant from paying the additional price form the season 1961 62 and reduced the additional price for the season 1960 61 from 4.16 to 0.70 NP per metric ton.
N. Prasad and S. P. Naydt for Respondent Union of India.
Restrictions are placed on the growers from using sugarcane grown by them for other purposes.
Clause 5 of the 1966 Control order relates to additional price for sugarcane.
The Government companymunication dated 11 September 1968 stated that it was satisfied that the profits made by the appellant were inadequate.
Clause 5 4 speaks of appointment by the Central Government of persons for determining the additional price under clause 5 1 of the 1966 Control order.
The Government thus companytrols all aspects of the use of sugarcane grown hl the reserved area.
The growers felt that the factories manufacturing sugar were making profits from the sale of sugar and that the minimum price fixed by the Government for supply of sugarcane did number bear any rational relation to the market price or to the profits made by the producers of sugar.
Clause S 3 of the 1966 Control order speaks of exemption from payment of additional price.
4.16 and Rs.
The minimum price fixed by the Government of India for the seasons subsequent to 1958 59 was said by the sugarcane growers to be inadequate.
It is necessary to give opportunity to the growers of sugarcane as well as the producers of sugar to be heard when the Government exercises powers under 1966 Control order for determining the additional price and granting exemption from payment of additional price.
2070 2074 of 1970 is the factory situate at Hospet manufacturing sugar.
The 1966 Control order saved all orders made and actions taken under the repealed order.
The respondent cane growers companytend to the companytrary.
Clause 5 of the 1966 Control order provides for payment of additional price.
1966 companytrol order.
The appellant, however, did number pay the additional price.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The High Court accepted the companytention of the respondent on the ground that the impugned order was violative of principles of natural justice, because the Government failed to afford any opportunity to the growers to be heard in the matter.
This was made payable in addition to the payments made by the factory to the growers during the said seasons.
Under clause 6 of the 1966 Control order the Government was companypetent to denote an area where sugarcane is grown is a reserved area for a factory.
The High Court quashed the orders challenged by the respondents.
The Control order companytains elaborate machinery for fixation of additional price having regard to all relevant factors.
The Government was companypetent to fix different prices depending on the areas and qualities of sugarcane or on the basis of recovery of sugar from sugarcane.
In partial redress of the hardship caused to the sugarcane growers Parliament introduced clause 3A to the Sugar Cane Control Additional Powers Act, 1962 for fixation of additional prices for sugarcane for four successive years companymencing 1 November, 1958.
The appellant buys sugarcane from growers in the area reserved for the said factory.
No appeal was preferred either by the appellant factory or by the respondent Cooperative Societies under clause 5 of the 1966 Control order.
It is equally necessary for the Government to hear the growers of sugarcane in order to satisfy itself as to the bona fide and accuracy of the appellants claim for exemption.
In pursuance of powers companyferred by the 1962 Act the Central Government amended the 1955 Control order by introducing clause 3A providing for payment of additional price for sugarcane purchased by producers of sugar during each of the four successive years beginning from 1 November 1958.
In 1966 the Sugar Cane Control Additional Powers Act, 1962 came in existence.
The relevant Authority under the 1966 Control order on 3 July, 1968 fixed the additional price payable by the appellant to the cane growers for sugarcane supplied during the seasons 1960 61 and 1961 62 at Rs.
The Judgment of the Court was delivered by RAY, C.J. These appeals are by certificate from the judgment of the High Court of Mysore dated 4 May, 1970.
The use and supply of sugarcane is companytrolled under the provisions of the Essential Commodities Act, 1955.
The additional price faced by the Authority thereby became final.
6.09 respectively per metric ton.
2070 to 2074 of 1970.
The 1955 Control Order empowered the Government, inter alia, to fix the minimum price payable by the manufacturer of sugar to the grower of sugarcane.
The appellant sugar factory companytends that the cane growers were number required to be heard when the Government grantee exemption to the factories from payment of additional price.
The growers were also prevented from companyverting sugarcane to gur except in accordance with the terms of a license to be obtained.
The Government of India promulgated the Sugar Cane Control order on 27 August 1955.
The 1955 Control order was repealed and replaced by the Sugar cane Control order, 1966 to which reference has already been made.
The impeached orders granted exemption, partially or wholly, to the appellant under clause 5 3 of the Sugar Cane Control Order, 1966 hereinafter referred to as the 1966 Control Order from the payment of additional cane price fixed by the Price Fixation Authority under clause 5 4 of the 1566 Control order.
