Ch. Tika Ramji and Others vs The State of Uttar Pradesh and Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 24 April, 1956

Coram: Natwarlal H. Bhagwati, Bhuvneshwar P. Sinha, Syed Jaffer Imam

In the matter titled Ch. Tika Ramji and Others versus The State of Uttar Pradesh and Others, the Supreme Court of India delivered its judgment on 24 April 1956. The opinion was authored by Justice Natwarlal H. Bhagwati and the bench comprised Justices Natwarlal H. Bhagwati, Bhuvneshwar P. Sinha and Syed Jaffer Imam. The case is reported in the All India Reporter at volume 1956 page 676 and in the Supreme Court Reports at volume 1956 page 393. The petitioners challenged the constitutional validity of the Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act of 1953, together with two notifications issued by the State Government—one dated 27 September 1954 issued under sub-section 1(a) read with sub-section 2(b) of section 16 of the Act, and another dated 9 November 1955 issued under section 15 of the same Act. The 1954 notification required that where not less than three-quarters of the cane growers within the area of a Canegrowers’ Co-operative Society were members of that society, the occupier of the factory assigned to that area could not purchase or enter into an agreement to purchase cane except through the society. The 1955 notification assigned specific cane-purchasing centres to various sugarcane factories for the crushing season of 1955-56.

The petitioners contended that the Uttar Pradesh Act and the two notifications were ultra vires the State Legislature because the subject matter of sugarcane regulation fell within the exclusive legislative competence of Parliament. They argued that the provisions were repugnant to the Industries (Development and Regulation) Act, 1951 as amended by Act XXVI of 1953 (particularly sections 18-G, 15 and 16) and to the Essential Commodities Act, 1955 (section 16(1)(b)), as well as to the Sugarcane Control Order, 1955 (clause 7(1)). Further, they asserted that sections 15 and 16(1)(a) and (2)(b) of the Uttar Pradesh Act and the two notifications infringed fundamental rights guaranteed under Articles 14, 19(1)(c), (f) and (g), Article 31 and violated the trade and commerce clause of Article 301 and the authority of the State under Article 304 of the Constitution. The Court examined these contentions and held that the Uttar Pradesh Act and the notifications issued thereunder were within the legislative competence of the State Legislature and did not contravene any fundamental right or the provisions of Article 301. Accordingly, the petitions were dismissed. The Court further observed that the Central legislation concerning sugar and sugarcane, enacted under the concurrent jurisdiction of Entry 33 of List III of the Seventh Schedule, did not deprive the State Legislature of its authority to legislate on the regulation of supply and purchase of sugarcane, and that no repugnancy under Article 254 arose because the State and Central statutes dealt with distinct aspects of the subject matter.

The Constitution (Third Amendment) Act of 1954 amended the Seventh Schedule, but this amendment did not remove the authority of the Uttar Pradesh Legislature to legislate in the fields covered by that Schedule. Accordingly, there was no question of legislative incompetence on the part of the State Legislature, nor any encroachment upon the exclusive jurisdiction of the Centre when it enacted the impugned Act. The Court observed that, when the provisions of the impugned Act are compared with those of the Central Acts, it is clear that the impugned legislation deals solely with the regulation of the supply and purchase of sugarcane. It does not intrude upon the Centre’s exclusive jurisdiction over sugar, and therefore the Uttar Pradesh Legislature was fully competent to enact the Act.

The Court further held that a claim of repugnancy under Article 254 of the Constitution could not arise where Parliament and a State enact laws that occupy different fields and address separate matters, even if those matters are related or allied in character. In the present case, there was no inconsistency in the actual terms of the statutes enacted by Parliament and those enacted by the State. The test for repugnancy, therefore, is whether both legislatures, acting under an entry in the Concurrent List, have exercised their powers over the same subject-matter, or whether Parliament’s legislation was intended to be exhaustive and to cover the entire field. The analysis showed that such a condition did not exist.

The Court also examined Section 18-G of Act LXV of 1951 and concluded that its provisions did not extend to sugarcane nor did they reveal any intention on the part of Parliament to occupy the entire field of legislation relating to sugarcane. The phrase “any article or class of articles relatable to any scheduled industry” appearing in Sections 18-G, 15 and 16 of that Act was interpreted as referring only to finished products of the scheduled industries, not to raw materials such as sugarcane. The object of Section 18-G was to ensure equitable distribution and fair pricing of manufactured articles, not to empower the Central Government to legislate concerning the raw agricultural commodity of sugarcane.

Even assuming, for the sake of argument, that sugarcane could be deemed an article covered by Section 18-G, the Court noted that no order had been issued by the Central Government under that provision. Repugnancy, the Court explained, must exist as a factual circumstance, not merely as a theoretical possibility, and the existence of a Central order would be an essential prerequisite for a claim of repugnancy. Since no such order existed, the ground of repugnancy could not be pressed.

Finally, the Court observed that the provisions of Act X of 1955, the provisions of the impugned Act, and the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order 1951 operated in mutually exclusive spheres. The two legislatures did not infringe upon each other’s field; the Centre remained silent where the State acted, and the State remained silent where the Centre acted. Consequently, there was no inconsistency between the statutes, and no provision of the impugned Act or the rules made under it was invalidated by any of the Central legislation referred to.

The Court examined the statutory framework that governed sugarcane regulation, beginning with the provisions of Act LXV of 1951 as amended by Act XXVI of 1953 and Act X of 1955, together with the Sugarcane Control Order 1955 that was issued under those Acts. In doing so, it referred to earlier decisions such as Clyde Engineering Company Limited v. Cowburn ([1926] 37 C.L.R. 466), Ex Parte McLean ([1930] 43 C.L.R. 472), Stock-Motor Plough Ltd. v. Forsyth ([1932] 48 C.L.R. 128), G. P. Stewart v. B.K. Boy Chaudhury (A.I.R. 1939 Cal. 628) and Shyamakant Lal v. Rambhajan Singh ([1939] F.C.R. 188). The Court held that the power of repeal conferred on Parliament by the proviso to Article 254(2) of the Constitution is a limited power and may be exercised only by enacting legislation that deals with the same subject matter as the State law, and only where the State law falls within the categories enumerated in the body of Article 254(2) itself. Because the impugned Act did not belong to any of those categories, the proviso was inapplicable; consequently, the impugned Act, the notifications made under it, and the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order 1954 remained unrepealed by Section 16(1)(b) of Act X of 1955 and Clause 7(1) of the Sugarcane Control Order 1955. The Court also cited Zaverbhai Amaidas v. State of Bombay ([1955] 1 S.C.R. 799) in support of this view. Further, it observed that the repeal power under the proviso to Article 254(2) could be exercised only by Parliament itself and could not be delegated to any executive authority; therefore, the Central Government acquired no power of repeal under Clause 7 of the Sugarcane Control Order 1955. The Court then turned to the challenge that the impugned Act violated the fundamental right guaranteed by Article 14 because it allegedly gave the Cane Commissioner very wide powers that could be used discriminatorily. It rejected this contention, stating that the Commissioner’s powers under Section 15 of the impugned Act were clearly defined, and that the Act and the Rules made thereunder provided cane growers, cane growers’ cooperative societies, or factory occupiers the right to appeal to the State Government against any order passed by the Commissioner, thereby furnishing an adequate safeguard against arbitrary exercise of authority. The Court also dismissed the argument that the impugned Act and the notification dated 27 September 1954 infringed the fundamental right under Article 19(1)(c). While acknowledging that the right to form an association is a fundamental right, the Court clarified that the negative aspect of that right—namely, a right not to form an association—is not itself guaranteed. No cane grower was compelled to become a member of a cane growers’ cooperative society, nor was any grower prevented from resigning from such a society or from selling his crop elsewhere. Accordingly, the Act and the notification did not contravene the asserted fundamental right. Finally, the Court held that the powers given to the Cane Commissioner by Section 15 of the impugned Act to declare reserved or assigned areas were well defined, subject to oversight by higher authorities, and were by no means absolute.

In this case, the Court observed that the restriction imposed by the notification dated 27 September 1954, which limited the sale of sugarcane to factory occupiers in those areas where at least seventy-five per cent of the canegrowers were members of the Canegrowers’ Co-operative Society, constituted a reasonable restriction designed to serve the public interest. The restriction was intended to benefit a large majority of canegrowers and therefore fell within the protection afforded by Article 19(6) of the Constitution. Consequently, the Court held that the notification did not infringe the freedoms guaranteed by Articles 19(1)(f) and 19(1)(g). The Court further concluded that the impugned notifications were intra vires the State Legislature and could not be attacked under Article 31, because none of the petitioners had been deprived of any property except in accordance with the authority of law, as reflected in the decisions of Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh and two others ([1954] S.C.R. 803). Moreover, the Court found that the Act and the notifications did not violate Article 301, since Article 304(b) permits the State Legislature to impose reasonable restrictions in the public interest; this view was supported by the authorities Commonwealth of Australia v. Bank of New South Wales ([1950] A.C. 235) and Hughes and Vale Proprietary Ltd. v. State of New South Wales and others ([1955] A.C. 241).

The matter arose in the original jurisdiction of the Supreme Court under Article 32 of the Constitution of India for the enforcement of fundamental rights. The Court listed the petitions numbered 585, 599, 611, 622, 625, 565, 576 of 1954; 48, 58, 415, 416 of 1955; and 10, 16, 37, 39, 47 of 1956. Counsel for the petitioners included representatives for the various petitions, such as legal professionals appearing for petition numbers 10, 37, and 47 of 1956, for petition number 622 of 1954, for petition number 585 of 1954, for petitions numbers 565 and 576 of 1954, for petition numbers 599, 611 of 1954 and 58, 415, 416 of 1955 and 16, 39 of 1956, for petition number 48 of 1955, and for petition number 625 of 1954. The State of Uttar Pradesh and the Cane Commissioner were represented by the Advocate-General of Uttar Pradesh, a senior counsel, and another advocate. The Solicitor-General of India and an additional counsel represented the Cane-Growers’ Co-operative Development Unions in selected petitions, while a further counsel represented the same unions in the remaining petitions, except for petition number 37 of 1956. Additional counsel appeared for Daurala Sugar Mills in petition numbers 611 of 1954, 58, 415, 416 of 1955, and for Punjab Sugar Mills in the relevant petitions.

The record shows that counsel for respondent No. 3 was present, followed by counsel for respondent No. 9. The judgment was delivered on 24 April 1956 by Justice Bhagwati. The matter before the Court comprised a series of petitions filed under article 32 of the Constitution, challenging the validity of the Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1953 (U.P. Act XXIV of 1953), thereafter referred to as the impugned Act, and two notifications issued under that Act on 27 September 1954 and 9 November 1955. The petitioners were identified as sugarcane growers residing in various villages of the districts of Meerut, Kheri, Gorakhpur and Deoria in Uttar Pradesh, altogether numbering four thousand seven hundred twenty-four persons. In association with them were the President, Vice-Presidents and the Secretary of an organisation styled “the Ganna Utpadak Sangh,” which functioned as a rival body to the Co-operative Development Unions that had been established and recognised pursuant to the impugned Act. The notification dated 27 September 1954, issued under the authority of sub-section 1(a) read with sub-section 2(b) of section 16 of the Act, prescribed that where not less than three-quarters of the cane growers in the operational area of a Cane Growers Co-operative Society were members of that Society, the occupier of the factory assigned to that area was prohibited from purchasing, or from entering into any agreement to purchase, cane grown by any individual grower except through the said Co-operative Society. The subsequent notification dated 9 November 1955 was issued under the powers conferred by section 15 of the Act and allocated to the sugar factories listed in column 2 of the Schedule annexed thereto the cane-purchasing centres, together with the authorities attached to them, specified in column 3, for the purpose of supplying sugarcane during the crushing season of 1955-56, subject to the conditions and explanations contained therein. The earlier notification related to the agency of supply of sugarcane to factories, while the later one created specific zones for particular factories. All the petitions, except those numbered 0 of 1956 and 37 of 1956, challenged the former notification, though the grounds of attack against both notifications were common. The impugned Act was contested on the basis that it exceeded the legislative competence of the State Legislature because its subject-matter lay within the exclusive legislative field of Parliament, and that it conflicted with Central legislation, namely Act LXV of 1951 and Act X of 1955. Moreover, sections 15 and 16(1)(a) and 2(b) of the Act, together with the notifications issued thereunder, were alleged to be unconstitutional as they infringed fundamental rights guaranteed under article 14, article 19(1)(c), (f) and (g), and article 31, and also violated article 301 of the Constitution. Because all the petitions raised common questions of law, the Court noted that they could be disposed of in a single judgment. The Court then indicated that a brief historical overview of legislation enacted by the Central Legislature and by the Province of Uttar Pradesh concerning sugar and sugarcane would be useful for determining the issues raised in these petitions.

In order to understand the issues raised in the present petitions, the Court considered the historical development of legislation relating to sugar and sugarcane. On 8 April 1932 the Central Legislature enacted the Sugar Industry (Protection) Act, 1932 (Act XIII of 1932) with the purpose of promoting the growth of the sugar industry in India while taking account of the welfare of the community. The protective measures introduced by that Act caused a rapid increase in the number of sugar factories: the total rose from thirty-one before the Act to one hundred and thirty-nine by 1938. At the same time, cultivation of sugarcane expanded greatly, and millions of cultivators in the Province of Uttar Pradesh turned to growing sugarcane. To safeguard the interests of those cultivators and to ensure that they received a fair price for their produce, the Central Legislature passed the Sugarcane Act, 1934 (Act XV of 1934) on 1 May 1934. That Act regulated the price at which sugarcane destined for sugar manufacture could be purchased by or for factories. Because sugarcane was grown in many provinces, the declaration of controlled areas and the fixing of a minimum purchase price within any such area were left to the respective Provincial Governments. The provincial authorities were also given power to make rules to implement the Act, including provisions for organising sugarcane growers into cooperative societies for the sale of their crop to factories.

The coming into force of the Government of India Act, 1935 altered the distribution of legislative powers between the Dominion Legislature and the Provincial Legislatures. Agriculture (Entry No. 20), intra-provincial trade and commerce (Entry No. 27), and production, supply and distribution of goods and development of industries (Entry No. 29) were placed in List II, the Provincial List. Entry No. 34 of List II dealt with “development of industries where development under Dominion control is declared to be in the public interest”. Consequently, the entire subject-matter of the Sugarcane Act, 1934 fell within the competence of the provinces. It was later held that the 1934 Act was not sufficiently comprehensive to address the problems of the sugar industry, and a more effective measure was required to improve the organisation of cane supplies to sugar factories. In consultation with each other, the governments of Uttar Pradesh and Bihar therefore decided to introduce parallel legislation covering the two provinces, which together accounted for about eighty-five per cent of India’s sugar production. Accordingly, the Uttar Pradesh Legislature enacted the Uttar Pradesh Sugar Factories Control Act, 1938 (U.P. Act 1 of 1938) on 10 February 1938 to provide for the licensing of sugar factories, the regulation of sugarcane supply, the setting of minimum prices, and other related matters.

The Uttar Pradesh Legislature enacted the Sugar Factories Control Act, 1938 (Act 1 of 1938) with the purpose of licensing sugar factories, regulating the supply of sugarcane intended for those factories, fixing the price at which the cane could be purchased, and addressing other related matters. The Act expressly provided for the licensing of sugar factories, the regulation of cane supplies to those factories, the establishment of a minimum price for sugarcane, the creation of a Sugar Control Board together with an Advisory Committee, and the imposition of a tax on the sale of sugarcane destined for factory use. In consequence, the earlier Act XV of 1934 was repealed. The original duration of the Act was set to expire on 30 June 1947; however, the term was subsequently extended to 30 June 1950 by Uttar Pradesh Act XIII of 1947 and further prolonged to 30 June 1952 by Uttar Pradesh Act XXI of 1950.

During the Second World War an emergency was proclaimed by the Governor-General under section 102 of the Government of India Act, 1935. Under that emergency the Dominion Legislature acquired authority to legislate for the provinces on any matter enumerated in the Provincial Legislative List, thereby rendering that list effectively concurrent between the Dominion and the provinces. Where a provincial enactment conflicted with a Dominion law made under this power, the Dominion law prevailed and the provincial provision was void to the extent of the inconsistency. The emergency proclamation remained in force until it was rescinded by a later proclamation, and any Dominion legislation enacted under the emergency continued to have effect for six months after the proclamation ceased. The Defence of India Act and its rules subsequently dominated the field; sugar was declared a controlled commodity in 1942, and its production, distribution, and price fixation were supervised by the Sugar Controller. The emergency proclamation was revoked on 1 April 1946, and the Dominion statutes covering provincial matters were scheduled to lapse on 30 September 1946. Prior to that, on 26 March 1946, the British Parliament passed the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo. VI, Chapter 39). Section 2(1)(a) of that Act provided, notwithstanding the Government of India Act, 1935, that the Indian Legislature could, for a period specified in section 4, legislate on subjects such as trade and commerce, and the production, supply and distribution of various goods including cotton, woollen textiles, paper, foodstuffs, petroleum and related products, spare parts for mechanically propelled vehicles, coal, iron, steel and mica. The period defined in section 4 was one year commencing from the date the emergency proclamation ceased to operate, or, if directed by a public notification of the Governor-General, two years from that date.

In this case, the Court explained that the period during which the provisions of the India (Central Government and Legislature) Act, 1946 would operate began either on the date the emergency ceased, or, if the Governor-General issued a public notification, two years from that date. The Act contained a proviso stating that, should both Houses of Parliament pass a resolution approving an extension, the period could be prolonged for an additional twelve months from the date it would otherwise expire, but it could never be continued for more than five years from the date the emergency ended. Acting under the power granted by section 2(1)(a) of that Act, the Central Legislature enacted the Essential Supplies (Temporary Powers) Act, 1946 (Act XXIV of 1946) on 19 November 1946 to maintain limited powers to control the production, supply, distribution, trade and commerce of certain commodities. Section 1(3) of the Act provided that it would cease to operate when the period specified in section 4 of the India (Central Government and Legislature) Act, 1946 expired. In the absence of any notification by the Governor-General, the Act would have remained in force only until 31 March 1947. However, the Governor-General issued a notification on 3 March 1947 extending its operation for two years from the date the emergency ceased, which would have kept the Act effective until 31 March 1948. On 18 July 1947 the Indian Independence Act was passed and, on 15 August 1947, India became a Dominion. Under section 9 read with section 19(4) of the Indian Independence Act, the Governor-General dated 14 August 1947 issued an order substituting the words “Dominion Legislature” for “Both Houses of Parliament” in the proviso to section 4 of the 1946 Act and introduced a new subsection 4(a) providing that the powers of the Dominion Legislature would be exercised by the Constituent Assembly. The Constituent Assembly subsequently passed a resolution on 25 February 1948 extending the operation of the Essential Supplies Act for one year, up to 31 March 1949, and on 3 March 1949 passed a second resolution extending it further to 31 March 1950. With the commencement of the Constitution on 26 January 1950, article 369 vested Parliament with the authority, for a period of five years from that date, to make laws on matters as if they were listed in the Concurrent List, including trade and commerce within a State and the production, supply and distribution of foodstuffs. Consequently, Parliament extended the life of the Essential Supplies (Temporary Powers) Act repeatedly, ultimately up to 26 January 1955, by enacting successive statutes. Act XXIV of 1946 defined “essential commodity” to include the classes of commodities specified in the legislation.

The Act listed essential commodities, beginning with the class of “Foodstuffs,” and it expressly defined food crops to include sugarcane crops. Section 3 of that Act gave the Central Government authority to act whenever it deemed necessary or expedient to preserve or augment the supply of any essential commodity, to ensure that such commodity was distributed fairly, made available at reasonable prices, and to regulate or even prohibit its production, supply, distribution, trade, and commerce. Exercising those powers, the Central Government on 7 October 1950 issued the Sugar and Gur Control Order, 1950. That Order authorized the Government, among other things, to forbid or limit the export of sugarcane from any locality, to stipulate that gur or sugar could be manufactured from sugarcane only under conditions set out in a licence issued for that purpose, and to prohibit or restrict the dispatch of gur or sugar from any State or any area within a State. The Order also conferred on the Government the power to fix a minimum price for sugarcane; consequently, no person could sell or agree to sell sugarcane to a producer at a price below the notified floor, nor could any producer purchase or agree to purchase sugarcane for less than that notified minimum. The Central Government exercised this pricing power repeatedly by issuing notifications that fixed the minimum rates payable to producers of vacuum-pan sugar or to their agents for sugarcane bought during the 1950-51 crushing season in various States, including Uttar Pradesh. Subsequently, on 31 October 1951, Parliament passed the Industries (Development and Regulation) Act, 1951 (Act LXV of 1951) to promote the development and regulation of certain industries. Section 2 of that Act declared that, in the public interest, it was appropriate for the Union to assume control over the industries enumerated in the First Schedule, and Schedule Item 8 specifically named the industry engaged in the manufacture or production of sugar. The Province of Bihar, together with Uttar Pradesh, contributed roughly eighty-five percent of India’s total sugar production and, on its statute book, Bihar had enacted the Bihar Sugar Factories Control Act VII of 1937. On 10 April 1938 a joint meeting of the Uttar Pradesh and Bihar Sugar Control Boards resolved to constitute a Committee to investigate the operation of sugarcane regulations and the labour conditions prevailing in the sugar factories of the two provinces. The governments of Uttar Pradesh and Bihar accepted this recommendation and consequently appointed the Khaitan Committee. The Committee’s terms of reference were: (1) to examine the operation of the sugarcane rules; (2) to investigate complaints of malpractice that arose from time to time concerning the supply of sugarcane to the factories; (3) to inquire into the labour conditions prevailing in the sugar factories; and (4) to recommend remedial measures for the deficiencies identified in (1),

Shibban Lal Saxena, who was then President of the Ganna Utpadak Sangh and also one of the petitioners, served as a member of the Committee referred to in items (2) and (3). The Committee presented its report in 1940, advising among other things that the dual system of sugarcane supply be abolished and that a strong cooperative organisation of the growers be created together with a zonal system of distribution. In the meantime, the Indian Tariff Board issued a 1938 report on the sugar industry that praised the benefits of a zonal system. A later inquiry, the Uttar Pradesh Sugar Industry Enquiry Committee of 1951—commonly called the Swaminathan Committee—also recommended eliminating the dual agencies that supplied cane to factories and supported using cooperative societies to perform that function. The Swaminathan Committee further suggested amending Uttar Pradesh Act I of 1938 to enable such regulation. Act LXV of 1951 was brought into force on 8 May 1952, which rendered certain provisions of Uttar Pradesh Act I of 1938 inoperative. Consequently, on 29 June 1952 the Uttar Pradesh Legislature enacted the Uttar Pradesh Sugar Factories Control Amendment Act 1952, deleting the obsolete provisions and permanently placing the amended Act on the statute book. The amended Act I of 1938 remained in force until, as a result of the earlier enactment of Act LXV of 1951, the Indian Tariff Board’s 1938 report, and the findings of both the Khaitan Committee and the Swaminathan Committee, the Legislature passed the impugned Act. The pre-amble of the impugned Act stated that, with the coming into effect of the Industries (Development and Regulation) Act 1951 on 8 May 1952, regulation of the sugar industry became exclusively a Central subject, leaving the State concerned only with supplying sugarcane to factories. The Bill was introduced to ensure a rational distribution of sugarcane, to promote scientific development, to protect the interests of cane growers and the industry, and to place the new legislation permanently on the statute book, as recorded in the Uttar Pradesh Gazette Extraordinary dated 15 July 1953. The validity of this impugned Act is the subject of the petitions before the Court.

Under the rule-making authority granted by section 28 of the impugned Act, the Uttar Pradesh Government formulated the Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Rules, 1954. Exercising the powers conferred by section 16 of the same Act, the Government also issued the Uttar Pradesh Sugarcane Supply and Purchase Order, 1954, which became effective on 19 September 1954. Both the Rules and the Order dealt with the supply and purchase of sugarcane within the State. Subsequently, Act LXV of 1951 was amended by Act XXVI of 1953 to address related matters.

The provision added Chapter III(b) gave the Central Government, among other powers, the authority to take such action as it considered necessary or expedient for ensuring that any article or class of articles related to any scheduled industry was distributed equitably and made available at fair prices, by issuing a notified order to regulate the supply, distribution, trade and commerce of such articles. On 1 April 1955 Parliament passed the Essential Commodities Act, 1955 (Act X of 1955) with the purpose of safeguarding the general public by controlling the production, supply, distribution, trade and commerce of designated commodities. The Act defined an essential commodity as comprising any of the following categories of commodities: “(v) foodstuffs, including edible oilseeds, and oils;........................................... (xi) any other class of commodity which the Central Government may, by notified order, declare to be an essential commodity for the purposes of this Act, being a commodity with respect to which Parliament has power to make laws by virtue of Entry 33 in List III in the Seventh Schedule to the Constitution.” The definition of food crops expressly included sugarcane. Section 3(1) empowered the Central Government, when it was of the opinion that such action was necessary or expedient for maintaining or increasing the supply of any essential commodity or for securing its equitable distribution and availability at fair prices, to issue an order that could regulate or prohibit the production, supply, distribution, trade and commerce of that commodity. Section 3(2)(b) further authorized the Government to issue an order directing that any waste or arable land, whether attached to a building or not, be brought under cultivation for the purpose of growing foodcrops generally or specified foodcrops. Section 16 of the Act repealed (a) the Essential Commodities Ordinance, 1955, and (b) any other law that was in force in any State immediately before the commencement of the Act, insofar as such law authorised or controlled the production, supply, distribution, trade or commerce of any essential commodity. Exercising the powers conferred by section 3, the Central Government on 27 August 1955 issued two orders: the Sugar Control Order, 1955 and the Sugarcane Control Order, 1955. The Sugarcane Control Order, 1955 empowered the Central Government, after consulting such authorities, bodies or associations as it deemed appropriate, to fix the price of sugarcane, to direct the manner of payment, and also to regulate the movement of sugarcane. The regulation of movement included the authority to prohibit, restrict or otherwise control the export of sugarcane from any area for supply to different factories, and the authority to direct that no gur (jaggery) or sugar could be manufactured from sugarcane except under conditions specified in a licence issued for that purpose. Clause 7 of the order stipulated that the Sugar and Gur Control Order,

The Sugar and Gur Control Order of 1950, published by the Government of India through the Ministry of Food and Agriculture as S.R.O. 735 on 7 October 1950, repealed any order that had previously been issued by a State Government or any other authority which regulated or prohibited the production, supply and distribution of sugarcane and the trade or commerce in sugarcane, except to the extent that actions taken or omitted before the commencement of that Order were preserved. The matter now before the Court concerns the various Acts and Notifications that have been issued by the Central Government as well as by the State of Uttar Pradesh in relation to sugar and sugarcane. Counsel for the petitioners advanced several points. First, they contended that the State of Uttar Pradesh had no power to enact the impugned Act because the Act dealt, in substance, with an industry whose control Parliament has declared to be expedient in the public interest under Entry 52 of List I; consequently the legislation was beyond the competence of the State Legislature and amounted to a colourable exercise of its legislative authority. Second, they argued that the impugned Act is repugnant to Act LXV of 1951 and to Act X of 1955; therefore, even if the Court were to find that the State possessed the requisite competence, the Act would be void on the ground of repugnancy. Third, they submitted that the impugned Act has been effectively repealed to the extent that section 16 of Act X of 1955 and clause 7 of the Sugarcane Control Order, 1955—made under the powers conferred by section 3 of Act X of 1955—have already superseded it. Fourth, they maintained that the Act infringes the guarantee of equality before the law contained in article 14 because it bestows very wide powers on the Cane Commissioner, powers which could be exercised in a discriminatory manner. Fifth, they asserted that the Act and the notification dated 27 September 1954 violate article 19(1)(e) of the Constitution since the cooperative societies referred to are not voluntary organisations; a cane grower is compelled to become a member of such a society before he may sell his sugarcane to a factory. Sixth, they claimed that the Act and the accompanying notifications also contravene the freedoms guaranteed by article 19(1)(f) and article 19(1)(g) as well as article 31 of the Constitution. Seventh, they argued that the Act is void because it delegates very wide powers to executive officials, essentially constituting delegated legislation. Eighth, they contended that the Act destroys the freedom of trade and commerce and therefore violates article 301 of the Constitution. The first ground, identified as Re. (1), related to the legislative competence of the Uttar Pradesh State Legislature. The petitioners argued that, although the impugned Act appears to regulate sugarcane required for use in sugar factories, its true nature and effect is to regulate the sugar industry itself, an industry whose control Parliament has declared to be within the exclusive jurisdiction of the Union under Entry 52 of List I.

In this matter, the petitioners argued that the subject of the impugned legislation was an industry whose control by the Union had been declared by Parliament to be expedient in the public interest, and that therefore the subject fell within the exclusive legislative domain of Parliament under Entry 52 of List I. They further contended that the term “industry” was a term of very wide import. According to them, “industry” did not refer only to the process of manufacture or production but also embraced all matters necessarily incidental to manufacture, including the raw materials required by the industry as well as the products of that industry. Consequently, they maintained that the term would encompass the production, supply and distribution of the raw materials for the industry, and that in the context of the sugar sector the raw material was sugarcane. The petitioners also submitted that, insofar as the impugned Act attempted to legislate on sugarcane – a necessary ingredient in the manufacture of sugar – the State was engaging in a colourable exercise of legislative power. While the State purported to act within its own field under Entry 27 of List II, the petitioners asserted that this was in reality an intrusion into the field reserved to Parliament by Entry 52 of List I.

On the other side, counsel for the State argued that a series of constitutional and statutory developments had placed the subject within a concurrent field, thereby permitting both the Central and the Provincial Legislatures to legislate. The State pointed out that the advent of war and the proclamation of emergency under section 102 of the Government of India Act, 1935, together with the combined operation of the India (Central Government and Legislature) Act, 1946, article 369 of the Constitution, and the resolutions of both Houses of Parliament that extended the life of Act XXIV of 1946 up to 26 January 1955, as well as the Third Constitution Amendment Act of 1954 which amended Entry 33 of List III, had all contributed to this result. According to the State, the Central Legislature had been exercising legislative authority over the subject in what had effectively become a concurrent field, even with respect to sugarcane. The State further maintained that the vesting of power in the Central Government to legislate on matters that were originally in the Provincial List did not extinguish the power of the Provincial Legislature to legislate on the same matters. Both the Central Legislature and the State Legislatures, the State argued, possessed legislative competence over the fields in question, and that such competence was, for legislative purposes, treated as concurrent. Accordingly, the State contended that the Uttar Pradesh Legislature was competent to enact the impugned Act, and that the Act would be valid within the State’s jurisdiction provided it did not clash with any provision of a Central law covering the same field.

The Court then set out the relevant entries from the Seventh Schedule of the Constitution to clarify the scope of the respective legislative powers. List I, Entry 52 provides that “industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest” fall within the Union’s exclusive domain. List II contains Entry 24, which refers to “industries subject to the provisions of entry 52 of List I,” and Entry 27, which deals with “production, supply and distribution of goods subject to the provisions of entry 33 of List III.” Finally, List III, Entry 33— as it stood before its amendment—states: “Trade and commerce in and production, supply and distribution of, the products of industries where the control of such industries by the Union is declared by Parliament by law to be expedient in the public interest.” These provisions were cited to illustrate the overlapping and, at times, concurrent nature of the legislative powers relevant to the sugarcane and sugar industry context.

In the judgment, the Court explained that Entry 33, as it stood after being amended by the Constitution Third Amendment Act of 1954, read as follows: “Trade and commerce in, and the production, supply and distribution 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 cotton-seed; and (e) raw jute.” The Court observed that while the power to regulate production, supply and distribution of goods lay within the exclusive domain of the State Legislature, that power was nevertheless circumscribed by Entry 33 of List III, which assigned concurrent legislative authority to both the Union and the States concerning trade and commerce and the production, supply and distribution of products of industries whose control the Union had declared to be expedient in the public interest. The industries subject to Union control were assigned to Entry 52 of List I, a field that was exclusively parliamentary, whereas the remaining industries were placed in Entry 24 of List II, a field that was exclusively within the competence of the State Legislatures. The Court further noted that the State Legislatures, exercising the power conferred on them by Entry 27 of List II, could legislate with respect to the production, supply and distribution of goods as defined in article 366(12)—that definition encompassing all raw materials, commodities and articles. However, for the products of the controlled industries listed in Entry 52 of List I, the matters of trade and commerce and of production, supply and distribution fell under Entry 33 of List III, thereby granting both Parliament and the State Legislatures jurisdiction to enact laws on those subjects. The amendment of Entry 33 by the Constitution Third Amendment Act of 1954, the Court held, merely expanded the reach of that entry and did not in any way diminish the legislative competence of either Parliament or the State Legislatures to legislate on the same matters. The Court illustrated this point by referring to the sugar industry, which was a controlled industry. Under the pre-amendment scheme, any legislation concerning that industry would have been the exclusive preserve of Parliament, and the production, supply and distribution of sugar as a finished product would have been covered by Entry 33 of List III, while sugarcane—being a raw material rather than a product of the controlled industry—would not have fallen within Entry 33. Only after the amendment did foodstuffs, including edible oilseeds and oils, become part of Entry 33, thereby permitting the legislature to address sugarcane under the authority of Entry 33 of List III.

In this case, the Court observed that sugarcane, being a commodity, fell directly within Entry 27 of List 11 and consequently was within the exclusive jurisdiction of the State Legislatures. Because the production, supply and distribution of sugarcane were therefore situated wholly in the exclusive sphere of the State Legislatures, the Uttar Pradesh State Legislature was, without any additional justification, competent to enact legislation relating to those matters and the impugned Act was therefore intra vires the State Legislature. The opposite argument, however, contended that the word “industry” possessed a wide import and should be construed to include not only the processes of manufacture or production but also the activities that precede such processes, such as the acquisition of raw materials, and the activities that follow, such as the disposal of the finished products of that industry. The argument continued that the process of acquiring raw materials formed an integral part of the industrial process and was therefore embraced within the meaning of “industry”. Accordingly, when the Central Legislature was vested with the power to legislate regarding the sugar industry, a controlled industry under Entry 52 of List III, that legislative power was said to extend to the raw material of the sugar industry – namely sugarcane – and that the production, supply and distribution of sugarcane, being the necessary ingredient in the manufacture of sugar, fell within the legislative competence of the Central Legislature. The Court further explained that each entry in the constitutional Lists, being a category or head of a subject-matter of legislation, must be interpreted not in a narrow or restricted sense but as broadly as possible so as to encompass all ancillary or subsidiary matters that can fairly and reasonably be said to be included therein. The Court cited precedents such as The United Provinces v. Mst. Atiqa Begum and Others (1), Thakur Jagannath Baksh Singh v. The United Provinces (2) and Megh Raj and Another v. Allah Rakhia and Others (3) to support the proposition that the head “industries” should be read to include the raw materials that are essential ingredients and form an integral part of the industrial process. The Court’s attention was also directed to the definition of “industry” in section 2(j) of the Industrial Disputes Act, 1947 (Act XIV of 1947), which states: “Industry means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, bandicraft, or industrial occupation or avocation of workmen.” Moreover, the Court noted the wide construction given to the term “industry” in Australian Insurance Staffs’ Federation v. The Accident Underwriters’ Association and Others (4), where it was construed to include “all forms of employment in which a large number of persons are employed, the sudden cessation of whose work might prejudicially affect the orderly conduct of the ordinary operations of civil life.” A similarly expansive interpretation was applied by this Court in D.N. Banerji v. P.R. Mukherjee and Others (5), a dispute involving a municipality and its employees. However, the Court concluded that these interpretations of the term “industry”, being primarily concerned with the existence of an industrial dispute between employers and employees, did not aid in resolving the present question.

Because the courts, when they defined the word “industry” in the Industrial Disputes Act, 1947, and when they gave a broad construction to the term “industry” in the authorities cited as [1923] 33 C.L.R. 517 and 1953 S.C.R. 302, were primarily concerned with the question of whether an industrial dispute existed between employers and employees, the Court observed that the purpose of those definitions was to determine the existence of a dispute rather than to enumerate every element of an industrial process. The Court further explained that the test for deciding whether a particular entity fell within the definition of an “employer” was based on the criterion ultimately adopted in the earlier decisions reported in (1) [1940] F.C.R. 110, 134; (2) [1946] F.C.R. 111, 119; (3) [1947] F.C.R. 77; (4) [1923] 33 C.L.R. 517; and (5) [1953] S.C.R. 302. That criterion was that the abrupt cessation of the work in question might prejudice the orderly conduct of ordinary civil life, and that the withdrawal of such service would be detrimental to the industrial system of the community and could lead to its dislocation. The Court clarified that the present inquiry was not about applying that wide construction to the term “industry” in general, but rather about whether the raw materials that are an integral part of an industrial process fall within the subject matter of “industry” as placed in Item 52 of List I, either as ancillary or subsidiary matters that could reasonably be said to be comprehended by that entry. Accordingly, the Court examined whether the Central Legislature, while legislating on the sugar industry under Entry 52 of List I, could also legislate on sugarcane, which is the essential raw material for sugar production. The Court noted that if both the Central Legislature and the Provincial Legislatures were permitted to legislate on the production, supply and distribution of sugarcane, there would be no question of the provincial legislature’s competence in enacting the impugned Act. The Court identified that any conflict arose only from the differing interpretations attached to the two entries, namely Entry 52 of List I and Entry 27 of List II, when read side by side. It was submitted that Item 52 of List I covered not only legislation concerning the sugar industry itself but also legislation concerning sugarcane, because sugarcane is an essential ingredient of the manufacturing process of sugar and is therefore ancillary to the industry and falls within that topic. The Court observed that if legislation on sugarcane were deemed to lie exclusively within the jurisdiction of the Central Legislature, the Provincial Legislature could not legislate on the same matter under Entry 27 of List II, and consequently the impugned Act would be ultra vires the Provincial Legislature. The Court recognised an apparent clash between the legislative powers of the Centre and the Provinces in this regard, a clash that could not have been intended. Therefore, the Court held that a reconciliation must be attempted by reading the two provisions together and, where necessary, interpreting and modifying the language of one by reference to the other. In support of this approach, the Court relied on the observations of the Judicial Committee in The Citizens Insurance Company of Canada v. William Parsons, stating that “In these cases it…”.

The Court observed that it is the duty of the Courts, however difficult the task may be, to determine the degree and extent to which each legislature has authority to deal with matters that fall within the specified classes of subjects, and to define, in the case before them, the limits of the respective powers. The Court further stated that it could not have been the intention of the framers that a conflict of powers should exist; consequently, to avoid such a result, the two constitutional sections must be read together, and the language of one section must be interpreted, and where necessary modified, by reference to the other section. In this manner, the Court explained, it is often possible to arrive at a reasonable and practical construction of the language of the sections so that the respective powers contained in them are reconciled and all of them are given effect. While performing this difficult task, the Court advised that it is prudent for those charged with it to decide each case as best as they can, without engaging in an extensive reinterpretation of the statute beyond what is necessary to resolve the specific question presented. The Court also cited a passage from page 113 of the same authority, which stated: “It is enough for the decision of the present case to say that, in their view, its authority to legislate for the regulation of trade and commerce does not comprehend the power to regulate by legislation the contracts of a particular business or trade, such as the business of fire insurance in a single province ……” These observations were quoted with approval by the Chief Justice Gwyer in Re: The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (Central Provinces and Berar Act No. XI V of 1938). The Court further noted that the same authority held that a general power should not be construed so as to make a particular power granted by the same Act, and operating in the same field, a nullity. The Court reiterated that the duty to reconcile apparently conflicting provisions was also emphasized in earlier authorities, namely (1) [1881] L R. 7 A.C. 96,108 and (2) [1939] F.C.R. 18, 39. Referring to Governor-General in Council v. The Province of Madras, the Court quoted: “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 observations of Chief Justice Gwyer quoted in Subrahmanyan Chettiar v. Muthuswami Goundan, where it was observed that, as interpreted by the Judicial Committee, the British North America Act provides an exact analogy to the India Act, even to the overriding provisions in section 100(1) of the latter, and that “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,” as stated by Lord Haldane in the case of Great West Saddlery Co.

The Court noted that the principles articulated by the Judicial Committee in numerous decisions on the interpretation of the two sections of the British North America Act could be accepted as a guide for interpreting comparable provisions in the Government of India Act, as indicated in the case cited as v. The King (3). It was submitted that Entry 27 of List II should be understood in a broad sense to cover the production, supply and distribution of goods generally, whereas Entry 52 of List I ought to be read as encompassing ancillary matters that relate to controlled industries, thereby excluding from Entry 27 any production, supply or distribution matters that fall within the ancillary scope of Entry 52. The argument continued that adopting this construction would remove the apparent conflict between the two entries and would harmonise the legislative powers of the Provincial Legislatures with those of the Central Legislature. Accordingly, it was contended that the legislation concerning sugarcane, cited in [1945] F.C.R. 179, 191; [1940] F.C.R. 188, 201; and [1921] 2 A.G. 91, 116, should be treated as ancillary to the legislation on the sugar industry, which is a controlled industry and therefore falls within Entry 52 of List I. Consequently, the sugarcane provisions should be excluded from Entry 27 of List II, which should be interpreted to cover only categories that do not fall under Entry 52, even though a wide construction of the phrase “production, supply and distribution of goods” could otherwise include them. If this approach were applied to the two entries, the subject-matter of the impugned Act would be situated within the exclusive jurisdiction of Parliament under Entry 52 of List I and would thus be ultra vires the legislative competence of the Uttar Pradesh State Legislature.

The State of Uttar Pradesh responded with a two-fold defence. First, it asserted that from the outbreak of the Second World War until the enactment of Act X of 1955, the Central Legislature was exercising its powers in the concurrent field, and any legislation it passed concerning sugarcane as part of its sugar-related activities was not based on Entry 52 of List I but on its authority to legislate concurrently. Second, it argued that the impugned Act was confined solely to matters relating to sugarcane and did not attempt to legislate on sugar itself, which remained the exclusive domain of the Centre. On this basis, the State maintained that there was no intrusion upon the Centre’s exclusive jurisdiction and that the impugned Act fell within the legislative competence of the State Legislature. The Court further observed that, as previously noted, the entire subject-matter of Act XV of 1934 fell within the Provincial Legislative List as a result of the distribution of legislative powers under the Government of India Act, 1935, and that the Uttar Pradesh Legislature had enacted the Uttar Pradesh Act I of 1938 covering the same field.

The Uttar Pradesh Legislature had previously repealed Act XV of 1934. Entry 27 of List II concerned the production, supply and distribution of goods and the development of industries, except where the industries were classified as controlled. Because sugar was not a controlled industry in 1938, the Uttar Pradesh Legislature enacted provisions that authorised the licensing of sugar factories and that regulated the price and supply of sugarcane intended for use in those factories. With the outbreak of war and the proclamation of emergency under section 102 of the Government of India Act, 1935, the Central Government was given the power to make laws for the provinces on any matter enumerated in the Provincial Legislative List. Consequently, both the Central Legislature and the Provincial Legislatures were enabled to enact measures that exercised concurrent jurisdiction over the subjects listed in that Provincial Legislative List. The emergency was scheduled to end on 1 April 1946, and the British Parliament therefore passed the India (Central Government and Legislature) Act, 1946 on 26 March 1946. That Act provided, notwithstanding any provision of the Government of India Act, 1935, that for the period specified in section 4 the Central Legislature would be invested with the authority to make laws regarding (a) trade and commerce, and (b) the production, supply and distribution of foodstuffs, edible oilseeds and oils. This provision effectively continued the power that had been vested in the Central Legislature during the emergency under section 102 of the Government of India Act, 1935. The period defined in section 4 of the 1946 Act was subsequently extended from time to time until 31 March 1950. Acting under those powers, the Central Legislature enacted Act XXIV of 1946 on 16 November 1946. The list of essential commodities in that Act expressly included, inter alia, foodstuffs such as sugar as well as sugarcane, thereby bringing both sugar and sugarcane within the exclusive legislative jurisdiction of the Centre. Act XXIV of 1946 was kept in force up to 31 March 1950 by virtue of section 4 of the India (Central Government and Legislature) Act, 1946, through a notification of the Governor-General and resolutions of both Houses of Parliament. Before that extended period expired, the Constitution of India came into operation, and under article 369 Parliament was conferred with the power to make laws, inter alia, concerning trade and commerce within a State and the production, supply and distribution of foodstuffs, edible oilseeds and oils as if those matters were enumerated in the Concurrent List. By virtue of this constitutional power, Parliament extended Act XXIV of 1946 through various statutes until 26 January 1955. Consequently, the jurisdiction over sugar and sugarcane remained with the Centre up to that date. When Entry 33 of List III was amended by the Constitution (Third Amendment) Act, 1954, foodstuffs—including edible oilseeds and oils—were added to that entry, giving both Parliament and the State the authority to legislate on those subjects.

In this matter, the Court observed that the Constitution granted both the Parliament and the State Legislatures a concurrent power to make laws concerning the trade and commerce of sugar and sugarcane as well as the production, supply and distribution of these commodities. It was on the basis of this concurrent authority that Parliament passed Act X of 1955. Section 2 of that Act defined a list of essential commodities which included foodstuffs, edible oilseeds and oils, cattle fodder, raw cotton, cotton-seed and raw jute—these items correspond to items (b), (c), (d) and (e) in Entry 33 of List III. The Act further covered the products of the controlled industries, namely coal, textiles, iron and steel, paper, petroleum and petroleum products, and also allowed the Central Government, by notification or order, to declare any other class of commodity an essential commodity for the purposes of the Act. All of these commodities fell within the scope of Entry 33 of List III of the Seventh Schedule, which authorises Parliament to legislate on them, and they were among the products of the controlled industries listed in the First Schedule to Act LXV of 1951. Consequently, the Court held that Act X of 1955 was enacted by Parliament pursuant to the legislative powers conferred by Entry 33 of List III, and therefore it was an exercise of the concurrent jurisdiction shared with the States.

The Court further explained that every Act and notification issued by the Centre concerning sugar and sugarcane was made under this concurrent jurisdiction. The existence of a concurrent power does not remove or diminish the authority of the Provincial Legislatures to legislate on the same subjects under the Provincial Legislative List. Accordingly, there was no ground to assert legislative incompetence on the part of the Provincial Legislatures when they enacted similar statutes. Both the Central Legislature and the State Legislatures were competent to enact legislation on these matters, and no conflict of competence arose.

Moreover, the Court noted that even though the sugar industry had been classified as a controlled industry, none of the Central statutes relating to sugar and sugarcane was enacted under Entry 52 of List I. The concept of “industry” can be broken down into three components: first, the raw materials that are essential to the industrial process, which are covered by Entry 27 of List II; second, the manufacturing or production process itself, which ordinarily falls under Entry 24 of List II, except when the industry is a controlled industry, in which case it is placed under Entry 52 of List I; and third, the distribution of the finished products, which again is covered by Entry 27 of List II, except for products of controlled industries that are assigned to Entry 33 of List III. Given this classification, the Court concluded that the legislation enacted by the Centre with respect to sugar and sugarcane could not be said to fall within Entry 52 of List I.

In this case the Court observed that legislation enacted by the Centre concerning sugar and sugarcane could not be placed within Entry 52 of List I. It noted that before the sugar industry was declared a controlled industry, both sugar and sugarcane fell under Entry 27 of List II. However, after Parliament passed Act LXV of 1951, the sugar industry became a controlled industry and the product of that industry, namely sugar, was shifted to Entry 33 of List III, thereby removing it from Entry 27 of List II. The Court further explained that despite this shift, both the Centre and the Provincial Legislatures retained concurrent jurisdiction over the same subject matter. Consequently, no provision relating to sugar or sugarcane could be said to fall within the exclusive competence of Entry 52 of List I. The Court rejected the application of the pith-and-substance doctrine, reasoning that when both the Centre and the State legislate in a concurrent field, there is no trespass upon an exclusive jurisdiction of the Centre; the only remaining issue is whether the two statutes are repugnant, a matter to be examined later. A more persuasive answer, the Court said, was obtained by comparing the Uttar Pradesh Act I of 1938 with the impugned Act. While the 1938 Act covered both sugarcane and sugar, the impugned Act was limited solely to sugarcane, thereby leaving sugar entirely within the exclusive jurisdiction of the Centre and eliminating any claim of encroachment by the State Legislature. The Court described that the 1938 Act provided for a Sugar Control Board, a Sugar Commissioner, a Sugar Commission and a Cane Commissioner. In contrast, the impugned Act established only a Sugarcane Board; although the title of Sugar Commissioner remained, his functions under Rules 106 and 107 were confined to gathering information to regulate the supply and purchase of sugarcane for factories and did not extend to the production or disposal of sugar. Moreover, the Sugar Commission was omitted, and the Cane Commissioner alone was vested with all powers concerning the supply and purchase of sugarcane. The Court noted that inspectors appointed under the 1938 Act possessed the authority to examine factory records showing the quantity of sugarcane purchased and crushed, with the purpose of checking the production or manufacture of sugar. By contrast, inspectors appointed under the impugned Act, pursuant to Rule 20, were restricted to regulating the supply and purchase of sugarcane and were not authorized to intervene in any subsequent process of manufacturing sugar. The Court further pointed out that Chapter 3 of the 1938 Act, which dealt with the construction and extension of sugar factories, licensing of factories for crushing sugarcane, and fixing the price of sugar, had been deleted from the impugned Act. Accordingly, the power to license new industrial undertakings was thereafter exercised by the Centre under Act LXV of 1951 as amended by Act XXVI of 1953, specifically sections 11(a), 12 and 13. The authority to fix the price of sugar was also exercised by the Centre under section 3 of Act XXIV of 1946 by issuing the Sugar Control Order 1950. The Court observed that the power previously reserved to the State Government to fix minimum prices of sugarcane under Chapter V of the 1938 Act was removed from the impugned Act, and the same function was now performed by the Centre under clause 3 of the Sugar and Gur Control Order 1950, issued under the powers conferred by section 3 of Act XXIV of 1946. Finally, the Court noted that the prices fixed by the Centre were adopted by the State Government, and the State’s only remaining requirement under Rule 94 related to the implementation of those centrally fixed prices.

In the impugned Act the provisions that dealt with the construction and extension of sugar factories, the licensing of factories for crushing sugarcane, and the fixing of the price of sugar were removed. The authority to license new industrial undertakings was subsequently exercised by the Central Government under the Industrial Development (Regulation) Act, 1951, as amended by the Industrial Development (Amendment) Act, 1953, specifically pursuant to sections 11(a), 12 and 13 of that legislation. Likewise, the power to fix the price of sugar was exercised by the Central Government under section 3 of the Sugar Industry (Control) Act, 1946, by way of the Sugar Control Order, 1950. The power that had previously been vested in the State Government to fix a minimum price of sugarcane under Chapter V of the Uttar Pradesh Sugarcane Act, 1938 was also deleted from the impugned Act; that function was taken over by the Central Government under clause 3 of the Sugar and Gur Control Order, 1950, which itself was issued under the same section 3 of the 1946 Act. The State Government retained only a limited requirement under rule 94, namely that the occupier of a factory or the purchasing agent must display at each purchasing centre a notice indicating the minimum price of cane fixed by the Central Government. In addition, the State incorporated the prices notified by the Central Government from time to time into the standard forms of the agreements that were to be executed among cane growers, cane-growers’ cooperative societies, factories and their purchasing agents for the supply and purchase of sugarcane, as provided in the Uttar Pradesh Sugarcane Supply and Purchase Order, 1954.

The sole provision that the State Legislature preserved in the impugned Act for the protection of sugarcane growers was section 17, which mandated that the occupier of a factory pay the price of sugarcane to the growers and permitted recovery of that amount from the occupier as if it were an arrear of land revenue. This comparison demonstrates that the impugned Act was confined exclusively to the regulation of the supply and purchase of sugarcane needed by sugar factories and did not extend to the control or licensing of the factories themselves, to the production or manufacture of sugar, or to the trade, commerce, distribution or supply of sugar. Consequently, there was no encroachment upon the Central Government’s jurisdiction over the sugar industry, which falls within Entry 52 of List I of the Constitution. The Uttar Pradesh Legislature therefore possessed the competence to enact the impugned Act with respect to sugarcane. The next contention advanced was that the provisions of the impugned Act were repugnant to the provisions of the Industrial Development (Regulation) Act, 1951 and the Sugar Industry (Control) Act, 1955, both enacted by Parliament, and that, on that basis, the impugned Act should be declared void to the extent of any repugnancy.

In addressing the argument that the legislation enacted by Parliament should dominate and that the impugned State Act should be declared void to the extent of any conflict, the Court first found it necessary to clarify the precise meaning of the term “repugnancy.” Repugnancy arose only when a law made by Parliament and a law made by a State Legislature occupied the same legislative field; if the two statutes dealt with separate and distinct subjects, even though those subjects were of a related or allied nature, no repugnancy was said to exist. The Constitution dealt with the concept of repugnancy in Article 254. Under clause (1) of that article, the Court noted that if any provision of a State law was repugnant to any provision of a law made by Parliament, to which Parliament was competent to legislate, or to any provision of an existing law relating to a matter enumerated in the Concurrent List, then, subject to clause (2), the Parliamentary law—whether enacted before or after the State law, or even an existing law—would prevail, and the State provision would be void to the extent of the inconsistency. Clause (2) provided that where a State law, applicable to a State listed in Part A or Part B of the First Schedule, contained a provision repugnant to an earlier Parliamentary law or existing law on a Concurrent List matter, that State law would prevail in that State if it had been reserved for the President’s consideration and had received his assent. The clause further stipulated that nothing in this provision barred Parliament from later enacting any law on the same subject, including a law that added to, amended, varied, or repealed the State law. The Court explained that the present controversy concerned only the possible repugnancy arising because both Parliament and the Uttar Pradesh Legislature had legislated in the same field concerning a matter placed in the Concurrent List—namely, foodstuffs under Entry 33 of List III. Consequently, the Court was not called upon to express an opinion on the broader dispute regarding the exact scope and reach of Article 254(1) in relation to the phrase “a law made by Parliament which Parliament is competent to enact.” Specifically, the Court did not need to determine whether the phrase referred solely to powers enumerated in List I, List III, and the residuary power under Article 248, or whether it was confined only to matters listed in the Concurrent List, a question that had been raised in earlier authorities such as the 1942 Calcutta case cited by Justice Sulaiman and discussed in scholarly works like Nicholas’s treatise on the Australian Constitution, which identified three tests of inconsistency or repugnancy.

In the cited authorities, three principal situations in which inconsistency may arise between a State law and a Commonwealth law were identified. The first situation occurs when the actual wording of the two statutes directly conflicts, as illustrated in the case of R. v. Brisbane Licensing Court, [1920] 28 C.L.R. 23. The second situation arises even where there is no explicit clash, because a Commonwealth enactment or a decision of a Commonwealth court is intended to constitute a complete and exhaustive code, thereby rendering a State law inoperative; this principle was explained in Clyde Engineering Co. Ltd. v. Cowburn, [1926] 37 C.L.R. 466. The third situation may exist without any expressed intent to dominate the field, when both the State and the Commonwealth attempt to exercise legislative authority over the same subject matter; this was discussed in Victoria v. Commonwealth, [1937] 58 C.L.R. 618, and in Wenn v. Attorney-General (Vict.), [1948] 77 C.L.R. 84. Isaacs, J., addressing Clyde Engineering Company Limited v. Cowburn, formulated a decisive test of inconsistency, stating that if a competent legislature expressly or implicitly demonstrates an intention to occupy the whole field, that intention constitutes a conclusive test of inconsistency whenever another legislature seeks to legislate, even to a limited extent, within the same field. Dixon, J., extending this reasoning in Ex parte McLean, observed that when both the Commonwealth Parliament and a State Parliament legislate on the same subject and prescribe a rule of conduct, the resulting statutes are inconsistent despite identical conduct rules, and Section 109 therefore applies. He explained that the inconsistency does not arise merely from the coexistence of two statutes that can be obeyed simultaneously; rather, it depends on whether the superior legislature has intended, by its enactment, to provide a complete, exhaustive, or exclusive rule governing the particular conduct or matter. If the Commonwealth statute manifests such an intention, any State law attempting to govern the same conduct or matter is inconsistent. Evatt, J., echoing this view in Stock Motor Plough Ltd. v. Forsyth, affirmed that State and Commonwealth statutes may be inconsistent even when obedience to both is possible, and even when both impose the same duty. He noted that courts have often identified inconsistency by attributing to the Commonwealth law a “cover the field” character, a phrase that is ambiguous because legislative subject matters do not correspond to geographic areas; nonetheless, when the Commonwealth adopts a comprehensive scheme, any additional State regulation in the same area would obstruct that scheme.

The passage explains that the expression is merely a cliché used to convey that, because of the particular subject matter, the manner in which it is addressed, and the numerous regulations that have been prescribed, the Federal authority has formulated a plan or scheme that would be impeded or obstructed if any further regulations on the same subject were issued by any other authority; in other words, the subject would be either touched upon or infringed upon by a State authority. The Calcutta High Court, in the case of G. P. Stewart v. B. K. Roy Chaudhury (1), provided an opportunity to examine the meaning of repugnancy. Justice B. N. Rau, speaking for the Court, observed at page 632 that it is sometimes said that two statutes cannot be properly described as repugnant unless there is a direct conflict, such as one statute commanding “do” and the other prohibiting “don’t,” and that under that view there would be no true repugnancy if both statutes could be obeyed. The Court noted, however, that this test is too narrow because repugnancy may exist even when both statutes prohibit the same conduct in different ways. As an illustration, the Court cited a law that forbids the retail sale of liquor in quantities of less than five gallons and a second law that forbids the retail sale of liquor in quantities of less than ten gallons. Although a person could comply with both statutes by adhering to the stricter requirement of the second law, the Court held that the two statutes are nevertheless repugnant, because compliance with the more demanding law effectively nullifies the lesser one. The learned Judge then examined the authorities that had articulated the test of repugnancy in Australia, Canada and England, and at page 634 concluded that the principle derivable from English and Canadian cases aligns with the view expressed by Justice Isaacs in the Australian “44-hour” case (37 C.L.R. 466). According to that principle, if the dominant law expressly or impliedly shows an intention to occupy the whole field, any subordinate law covering the same field is repugnant and therefore inoperative. The Court further explained that determining whether, and to what extent, the dominant law demonstrates such an intention must depend on the specific language used in that law.

Justice Sulaiman, delivering the judgment in Shyamakant Lal v. Rambhajan Singh (1), laid down the principle of construction concerning repugnancy. He stated that when the issue is whether a provincial enactment conflicts with an existing Indian law, the burden of proving repugnancy and the scope of that repugnancy rests on the party challenging the validity of the provincial legislation. There is a presumption in favour of the validity of the provincial law, and every effort must be made to reconcile the two statutes and to interpret both in a manner that avoids repugnancy. The approach requires careful analysis of the language of each enactment to determine whether they operate in distinct fields without encroachment, and it emphasizes that repugnancy must exist in fact rather than being based merely on a hypothetical possibility.

The Court observed that the purpose of construction was to avoid any conflict between statutes, and that the parties should first examine whether the two enactments actually operated in distinct fields without encroaching on each other. It further held that a claim of repugnancy required a factual conflict, not merely a hypothetical possibility. Referring to the authorities from the Province of Ontario, the Court stated that it could find no satisfactory basis for declaring a repugnancy between two laws when the prohibitions contained in the Canadian Act were not in force and might never become operative. In the present matter, the Court found no inconsistency in the literal wording of the statutes passed by Parliament and the impugned State enactment. The only issues that required examination were whether Parliament and the State Legislature had attempted to exercise their powers over the same subject-matter, and whether the statutes created by Parliament were intended to be a complete, exhaustive code that either expressly or impliedly covered the entire field.

To resolve this question, the Court said it was necessary to compare the provisions of Act LXV of 1951, as amended by Act XXVI of 1953 and Act X of 1955, together with the Sugar Control Order of 1955 issued under that Act, with the provisions of the impugned State Act and the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order of 1954. Act LXV of 1951 was enacted to provide for the development and regulation of certain industries that the Union deemed it expedient to control in the public interest. The Act listed the industries covered in its First Schedule, and the sugar manufacturing industry was among those scheduled industries. Under this Act, the Union acquired control over the sugar industry and established a Central Advisory Council to advise on development and regulation matters. It also provided for the creation of Development Councils for each scheduled industry or group of industries, and it authorised the registration of existing industrial undertakings, the licensing of new undertakings, and the conduct of investigations within the scheduled industries.

The Court explained that these provisions were clearly intended to regulate the scheduled industries, including the sugar industry, by overseeing development, registration, licensing and investigation of enterprises engaged in the production or manufacture of sugar. However, the Act did not extend to the regulation of the supply and purchase of sugarcane, which, although an essential raw material for sugar production, was considered merely a component of the manufacturing process and therefore fell outside the scope of the Act. Consequently, if Act LXV of 1951 had remained unchanged, its provisions would not have conflicted with the Uttar Pradesh Act of 1938, because the two statutes addressed different fields.

It was observed that, when the statute had originally been enacted, its provisions could not have been considered in any way to be inconsistent with the provisions of the Uttar Pradesh Act of 1938, because the two statutes dealt with entirely separate subjects. The original legislation concerned the development and regulation of scheduled industries, whereas the Uttar Pradesh Act operated in a different field. Later, the legislature passed Act XXVI of 1953, which amended the original law. The amendment that was relevant to the present case was inserted as section 18-G, which read as follows: “Power to control supply, distribution, price, etc., of certain articles.—(1) The Central Government, so far as it appears to it necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relating to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein.” The Explanation attached to this provision clarified that the expression “article or class of articles relating to any scheduled industry” also encompassed any article or class of articles imported into India that were of the same nature or description as those manufactured or produced in the scheduled industry.

Because the sugar industry was one of the scheduled industries, the petitioners argued that sugarcane should be treated as an “article relating to the sugar industry” and therefore fall within the ambit of section 18-G. According to that view, the Central Government, by means of a notified order, had the authority to regulate the supply, distribution, and trade of sugarcane throughout the country. The petitioners further contended that if this interpretation were accepted, the entire field of legislation concerning sugarcane would be covered by the central provision and would consequently be removed from the legislative competence of the State legislatures, the purpose of the amendment being to place the whole subject under central control. The State of Uttar Pradesh, however, maintained that the phrase “articles relating to a scheduled industry” referred only to finished products that were of the same nature or description as the articles actually manufactured or produced by the scheduled industry, and that it did not extend to the raw materials required for production. To support this stance, the State relied on the wording of the Explanation to section 18-G as well as on sections 15 and 16 of the Act, where the same expression was used. The Court agreed with the State’s contention, finding it to be well founded. It noted that the whole structure of the Scheduled Industries Act of 1951, including the amendments made by Act XXVI of 1953, was designed to promote the development and regulation of scheduled industries. Even within section 18-G, the intended regulation was limited to the supply and distribution of articles related to the scheduled industry, and the provision did not aim to control the production of those articles. While raw materials such as sugarcane were essential ingredients in the manufacturing process, they were not of the same nature or description as the finished sugar product and therefore lay outside the scope of the central power to regulate under section 18-G.

The Court observed that the provision concerned articles that were related to the scheduled industry but did not have the same nature or description as the article or class of articles actually manufactured or produced within that industry. The purpose of enacting section 18-G, the Court explained, was to ensure that such related articles were distributed equitably and made available at fair prices, because their relation to the manufactured or produced articles could influence manufacture, production, supply, distribution, or trade and commerce in that industry. The Court further noted that the statute aimed not only to control articles or classes of articles that were themselves manufactured or produced in India and related to the scheduled industry, but also to control articles or classes of articles imported into India that were of the same nature or description as those domestically manufactured or produced. Consequently, both indigenous and imported articles falling within that description would fall under the regulatory power of the Central Government, which could regulate their supply, distribution, and trade in order to develop, regulate, and ultimately control the scheduled industries in the public interest. The Court then turned to the contents of section 15 of the Act. Section 15 authorised the Central Government, when it was of the opinion that a scheduled industry or an industrial undertaking was experiencing or was likely to experience a substantial decline in the volume of production of any article or class of articles related to that industry, and that such decline could not be justified by prevailing economic conditions, to order full and complete investigations into the circumstances. After such investigations, if the Central Government was satisfied that action under section 16 was warranted, it could issue directions to the concerned industrial undertakings. Those directions might regulate the production of any article or class of articles, set standards of production, require steps deemed necessary to stimulate development of the relevant industry, prohibit practices that might diminish production capacity or economic value, and control prices and regulate distribution of the investigated articles or classes of articles. The Court concluded that when an article or class of articles related to a scheduled industry became the subject of such investigation and appropriate directions could be issued under section 16, it was clear that the scheduled industry or the industrial undertakings themselves did not have the authority to control prices or regulate distribution of those articles unless those articles fell within the sphere of the scheduled industry itself.

In examining the scope of the power granted to industrial undertakings, the Court observed that raw materials required for the manufacture or production of an article or class of articles belonging to a scheduled industry could not be placed within the sphere of control contemplated by section 16. Consequently, such raw materials could not be subjected to price control or distribution regulation under that provision. The Court therefore concluded that the articles or class of articles that were related to the scheduled industry were, in fact, finished products rather than raw materials used in their manufacture. These finished products were of a cognate character and would be produced during the actual process of manufacturing carried out in the course of the scheduled industry itself.

The Court explained that raw materials did not fall within this category. For example, sugarcane, which serves as the raw material for producing sugar, could not be regarded as an article or class of articles that related to the sugar industry under section 18-G. As a result, section 18-G did not extend to the field of sugarcane, and the Central Government did not acquire the authority to legislate on sugarcane by virtue of the introduction of section 18-G through Act XXVI of 1953. Moreover, the field of sugarcane was not covered by Act LXV of 1951 as amended by Act XXVI of 1953, and the legislative competence of the Provincial Legislatures over sugarcane remained entirely untouched by that amendment.

Given that the two fields – sugarcane and the scheduled industry’s finished products – were distinct, and that the Central legislation exhibited no intention to encompass sugarcane, the Court held that the area was open to State legislation. Accordingly, there was no conflict or repugnancy between Act LXV of 1951 and the impugned Act. Even if one were to assume that sugarcane qualified as an article or class of articles related to the sugar industry under section 18-G of Act LXV of 1951, the Court noted that the Central Government had never issued any order exercising the powers conferred by that section. Because no such order existed, no question of repugnancy could arise; the Court emphasised that repugnancy must be factual, not merely theoretical. The mere possibility that the Central Government might issue an order under section 18-G was insufficient—an actual order would be a necessary pre-condition for any conflict.

The Court then turned to Act X of 1955, which defined “essential commodity” to include foodstuffs such as sugar and sugarcane. This Act had been enacted by Parliament under the concurrent legislative power provided by Entry 33 of List III, as modified by the Constitution Third Amendment Act of 1954. Within that Act, “foodcrops” were defined to include crops of sugarcane. Section 3(1) granted the Central Government authority to control the production, supply and distribution of essential commodities, and to regulate trade and commerce in them, for the purpose of maintaining or increasing supplies, securing equitable distribution and ensuring availability at fair prices. Further, section 3(2)(b) empowered the Central Government to take additional measures necessary to achieve those objectives.

The Court explained that section 3(2) of the Act authorised the Central Government, inter alia, to bring any waste or arable land—whether attached to a building or not—under cultivation for the purpose of growing foodcrops, either generally or as specified. Section 3(2)(c) further empowered the Central Government to control the price at which any essential commodity could be bought or sold. By virtue of these provisions, the regulation of sugarcane production and the control of the price at which sugarcane could be bought or sold fell squarely within the scope of Central legislation. In addition to the Sugar Control Order 1955, which the Central Government issued on 27 August 1955, the Central Government also issued the Sugarcane Control Order 1955 on the same day. That Order vested the Central Government with the authority to fix the price of sugarcane, to direct payment of that price, and to regulate the movement of sugarcane. The Court observed that Parliament was well within its constitutional authority to legislate on sugarcane, and that the Central Government was likewise within its power to promulgate the Sugarcane Control Order 1955, because both actions were undertaken under the concurrent legislative power conferred by Entry 33 of List III. However, the Court held that this did not detract from the legislative competence of the Uttar Pradesh State Legislature to enact its own law concerning sugarcane. The remaining issue, therefore, was whether any repugnancy existed between the Central legislation and the Uttar Pradesh State legislation. The Court noted that the Uttar Pradesh State Government did not provide for fixing a minimum price for sugarcane, nor did it regulate the movement of sugarcane, matters that were expressly covered by clauses (3) and (4) of the Sugarcane Control Order 1955. The impugned Act contained no provisions on either of those subjects. The only provision dealing with the price of sugarcane in the Uttar Pradesh framework was found in Rule 94 of the Uttar Pradesh Sugarcane Rules 1954. Rule 94 required that a notice of suitable size, printed in clear bold lines, display the minimum price of cane fixed by the Government and the rates at which the cane was being purchased by the centre; this notice had to be displayed by the occupier of a factory or by the purchasing agent at each purchasing centre. The phrase “price of cane fixed by Government” in that rule referred exclusively to the price fixed by the appropriate Government, namely the Central Government, under clause 3 of the Sugarcane Control Order 1955, because the Uttar Pradesh State Government had never fixed a price for sugarcane to be paid to factories. Moreover, the agreements annexed to clauses 3 and 4 of the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order 1954 stipulated that the price would be the minimum price to be notified by the Government, subject to any deductions that might be specified. This further confirmed that the price reference in the State rules was intended to denote the Central Government’s notified price.

In this case, it was observed that the expression “be notified by the Government from time to time” referred exclusively to the Central Government because the State Government had never made any provision in that respect. Consequently, the provisions incorporated in the Sugarcane Control Order, 1955 did not appear in the challenged Act, nor in the Rules framed under that Act, nor in the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order, 1954. Likewise, the clause contained in section 17 of the challenged Act, which dealt with payment of the sugarcane price and its recovery as if it were a land-revenue arrear, was not found in the Sugarcane Control Order, 1955. The Court held that these sets of provisions were mutually exclusive and did not encroach upon each other’s legislative field. The Court’s attention was drawn to the various provisions in the Sugarcane Control Order, 1955, and in the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order, 1954, together with the agreements annexed to them. It was pointed out that the two instruments differed in material respects, the provisions of the Uttar Pradesh regulation being more stringent than those of the central order. The Court did not consider it necessary to set out each provision in detail. It was sufficient to state that none of the provisions overlapped; the Centre remained silent on certain matters that the State had legislated upon, and the State remained silent on certain matters that the Centre had legislated upon. Accordingly, there was no repugnancy between these provisions and the challenged Act, its Rules, or the Uttar Pradesh Regulation, and none of them ventured into the field covered by Act X of 1955. Because there was no repugnancy, the Court found that Article 254(2) of the Constitution was not attracted, and no provision of the challenged Act or its Rules was invalidated by any provision of the Essential Commodities Act 1951 as amended by the 1953 and 1955 Acts, or by the Sugarcane Control Order, 1955.

The third contention raised before the Court was that the challenged Act had been repealed, either by section 16 of Act X of 1955 or by clause 7 of the Sugarcane Control Order, 1955, which were respectively exercised under section 3 of Act X of 1955. Section 16 of Act X of 1955, as quoted, provided that the Essential Commodities Ordinance, 1955, and “any other law in force in any State immediately before the commencement of this Act” were repealed to the extent that such law authorised control of the production, supply, distribution, trade or commerce in any essential commodity. The counsel submitted that the challenged Act qualified as “any other law” that was in force in the State of Uttar Pradesh immediately before the commencement of Act X of 1955, and therefore should be deemed repealed under that provision.

The Court observed that the Act of 1955 was repealed to the extent that it authorised control over the production, supply and distribution of sugarcane. Sugarcane was included within foodstuffs, an essential commodity, under Act X of 1955. Clause 7 of the Sugarcane Control Order, 1955, made under the authority of section 3 of the Act, provided the following: “7. (1) The Sugar and Gur Control Order, 1950, published with the Government of India in the Ministry of Food and Agriculture S.R.O. No. 735, dated the 7th October, 1950, and any order made by a State Government or other authority regulating or prohibiting the production, supply and distribution of sugarcane and trade or commerce therein are hereby repealed, except as respect things done or omitted to be done under any such order before the commencement of this order”. The Court noted that the petitioners submitted that the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order, 1954, issued under section 16 of the impugned Act, was repealed insofar as it regulated or prohibited the production, supply, distribution or trade of sugarcane. The petitioners argued that these provisions amounted to an express repeal of the impugned Act and of the 1954 Uttar Pradesh Order, and that accepting their contention would nullify the Act’s provisions and the notifications issued pursuant to sections 15 and 16 of the Act. The Court examined the validity and effect of section 16 of Act X of 1955, stating that its interpretation depended on the construction of Article 254(2) of the Constitution and the accompanying proviso. Article 254(2) dealt with repugnancy between a State law and an earlier Parliamentary law on Concurrent List matters, and it provided that a State law, after presidential reservation and assent, would prevail in the State. The proviso to Article 254(2) stipulated that nothing in that article prevented Parliament from enacting, at any time, a law on the same subject. Such a Parliamentary law could add to, amend, vary, or repeal the State legislation. Ordinarily, Parliament did not possess the power to repeal a law enacted by a State Legislature, even when the law concerned a Concurrent List matter. Section 107 of the Government of India Act, 1935, did not confer such power on Parliament. The Court cited its earlier decision in Zaverbhai Amaidas v. State of Bombay, observing that the provision in Article 254(2) essentially reproduced Section 107(2) of the Government of India Act, 1935. the

The passage began with a reference to the concluding portion whereof being incorporated in a proviso with further additions. The Court then examined the nature of the power held by the Dominion Legislature of Canada in comparison with the power of a Provincial Legislature, noting that the situation was similar to the one created by section 107(2) of the Government of India Act. In the decision of Attorney-General for Ontario v. Attorney-General for the Dominion, Lord Watson observed that although a law passed by the Parliament of Canada and within its competence would override provincial legislation covering the same field, the Dominion Parliament did not possess any constitutional authority to enact a statute that would directly repeal a provincial statute. The Court indicated that this view appeared to reflect the position that existed under section 107(2) of the Government of India Act with respect to subjects enumerated in the Concurrent List.

The Court explained that the proviso to article 254(2) of the Constitution has enlarged the powers of Parliament. Under that proviso Parliament may do what the Central Legislature could not do under section 107(2) of the Government of India Act, namely to enact a law adding to, amending, varying or repealing a law of the State when the law relates to a matter mentioned in the Concurrent List. Consequently, the Court held that, acting under the proviso to article 254(2), Parliament possesses the constitutional power to repeal a State law. The Court cited the authorities (1) [1955] 1 S.C.R. 799, 806 and (2) [1896] A.C. 348 in support of this proposition.

The State of Uttar Pradesh argued that, under the proviso to article 254(2), the power to repeal a law passed by a State Legislature is merely incidental to the enactment of a law relating to the same subject matter dealt with in the State legislation. It contended that a statute which solely repeals a State law without enacting any substantive provisions on the subject would fall outside the scope of the proviso, because it could not have been the Constitution’s intention to create a vacuum in a topic that lies within the concurrent sphere of legislation. The Court acknowledged that there was considerable force in this contention and that many would agree that a simple repeal might not be covered by the proviso.

Nevertheless, the Court pronounced that it was unnecessary to decide the issue on that basis, because the petitioners must fail on another ground. While the proviso to article 254(2) does confer on Parliament the power to repeal a law enacted by a State Legislature, that power is subject to certain limitations specified in the proviso. The limitation requires that Parliament must be enacting a law with respect to the same matter, and that the law must be adding to, amending, varying or repealing a “law so made by the State Legislature.” The Court clarified that the reference is to the law mentioned in the body of article 254(2), which is a law made by the State Legislature concerning a matter in the Concurrent List that contains provisions repugnant to an earlier law made by Parliament with the President’s consent. Only such a law, bearing those characteristics, can be altered, amended or repealed under the proviso.

The Court observed that the Act which was challenged did not deal with any subject matter that had previously been legislated by Parliament. It described the Act as a substantive statute that regulated a field which Parliament had left unoccupied, and therefore concluded that there could be no possibility that the Act contained any provision that conflicted with any earlier parliamentary law. Because the Act fell outside the scope of any prior parliamentary legislation, the Court held that the proviso to article 254(2) of the Constitution was inapplicable to it. Consequently, the Court found that section 16(1)(b) of Act X of 1955 and clause 7(1) of the Sugarcane Control Order, 1955 were invalid to the extent they attempted to rely on that proviso. The Court also identified an additional objection concerning clause 7(1) of the Sugarcane Control Order, 1955. It explained that the authority to repeal a law, if such authority existed, was vested exclusively in Parliament, which could exercise it only by passing a new enactment. Parliament could not lawfully delegate its power of repeal to any executive body. The Court declared that any such delegation would be void, and therefore the Central Government possessed no power to repeal an order that had been issued by the State Government under section 16 of the impugned Act. Accordingly, the Court held that the Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order, 1954 could not have been validly repealed by the Central Government through clause 7 of the Sugarcane Control Order, 1955. The purported repeal had no legal effect, and the 1954 Order remained in force. As a result, the Court concluded that neither the impugned Act nor the 1954 Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order had been repealed by section 16 of Act X of 1955 or by clause 7 of the Sugarcane Control Order, 1955, contrary to the petitioners’ claim.

The Court then turned to the argument raised in Re (4) concerning the powers of the Cane Commissioner. It noted that the Commissioner was authorized to declare certain areas as reserved or assigned for sugar factories and to transfer specific areas from one factory to another. The Commissioner also exercised sole responsibility for the management of Cane Growers Co-operatives. The petitioners argued that these powers were so extensive that they could be exercised arbitrarily, thereby violating the equality guarantee of article 14 of the Constitution. The Court quoted Section 15 of the Act, which provides that, “(1) Without prejudice to any order made under clause (d) of sub-section (2) of section 16 the Cane Commissioner may, after consulting the Factory and Cane-growers Co-operative 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 Court examined these provisions to determine whether the breadth of the Commissioner’s authority, as described, necessarily infringed the constitutional guarantee of equal protection. It considered the statutory language, the requirement of consultation, and the regulatory framework governing the Commissioner’s actions before reaching a conclusion on the constitutionality of the impugned Act’s provisions.

The provision stipulates that when an area has been declared a reserved area for a factory, the occupier of that factory must, if directed by the Cane Commissioner, purchase all of the cane that is grown in that area and offered for sale to the factory. Section three further provides that where an area has been declared an assigned area for a factory, the occupier of the factory is required to purchase the quantity of cane grown in that area and offered for sale to the factory as may be fixed by the Cane Commissioner. Section four creates a right of appeal, allowing any aggrieved party to approach the State Government against an order of the Cane Commissioner made under subsection one. Rule twenty-two of the Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Rules, 1954, which were issued by the Uttar Pradesh Government under the rule-making authority granted by section twenty-eight sub-section two of the Act, sets out the factors that the Cane Commissioner must consider when reserving or assigning an area to a factory or when determining the quantity of cane to be purchased from an area. The factors enumerated are: (a) the distance of the area from the factory; (b) the facilities available for transporting cane from the area; (c) the quality of cane that the area supplied to the factory in previous years; (d) any previous reservation or assignment orders; (e) the quantity of cane that the factory intends to crush; (f) the arrangements that the factory made in earlier years for payment of cess, the price of cane and any commission; and (g) the views expressed by the Canegrowers’ Co-operative Society of the area. Chapter eleven of the Rules deals with the management of the Canegrowers’ Co-operative Societies by the Cane Commissioner and provides for his supervision over them. Rule sixty-three of the same chapter states that an appeal against an order of the Cane Commissioner issued under the provisions of that chapter must be made to the State Government within one month from the date the order is communicated to the concerned society or its management. From these provisions it follows that the powers conferred on the Cane Commissioner by section fifteen are clearly defined and must be exercised within the prescribed limits, after consultation with both the factories and the Canegrowers’ Co-operative Societies as required by section fifteen sub-section one. Moreover, any order issued by the Cane Commissioner under that section is subject to appeal to the State Government by the party who is aggrieved, as provided in section fifteen sub-section four. The same principle applies to orders that the Cane Commissioner makes while managing and supervising the Canegrowers’ Co-operative Societies; such orders are likewise appealable to the State Government under rule sixty-three. Because of this statutory scheme of defined powers and available avenues of appeal, it cannot be argued that the Cane Commissioner possesses unfettered authority that could be exercised in a discriminatory manner so as to infringe the equality guarantee of article fourteen. Consequently, any individual cane grower, any Canegrowers’ Co-operative Society, or any factory occupier who is dissatisfied with an order of the Cane Commissioner may invoke the right of appeal to the State Government.

The Court observed that the statutory provision allowing appeal to the State Government serves as an adequate safeguard against any arbitrary exercise of the Cane Commissioner’s powers. By permitting aggrieved parties to challenge the Commissioner’s orders, the provision effectively removes the exercise of those powers from the prohibition of article 14 of the Constitution, which bars unreasonable discrimination.

The Court then turned to the second contention, identified as point (5), which argued that the Act and the notification dated 27 September 1954 infringed the fundamental right guaranteed by article 19(1)(c)—the right to form associations or unions. It was submitted that cane growers are not free to choose membership in a Cane-Growers’ Co-operative Society because they must join such a society in order to sell sugarcane to a factory. The petitioners characterised the right to form associations as a positive right that necessarily includes a negative aspect: namely, the freedom not to be compelled to join an association, union, or co-operative society as a condition for conducting business. To support this argument, they relied on a passage from the Madras High Court decision in Indian Metal and Metallurgical Corporation v. Industrial Tribunal, Madras and Another, which held that “if a citizen has got a right to carry on business, we think it follows that, he must be at liberty not to carry it on if he so chooses… A person can no more be compelled to carry on a business than a person can be compelled to acquire or hold property…”. (1) The petitioners also cited a statement from Justice Murphy in West Virginia State Board v. Barnette, as reproduced in Strong on ‘American Constitutional Law’, page 774, which says that the constitutional guarantee of freedom of thought and religion “includes both the right to speak freely and the right to refrain from speaking at all, except in so far as essential operations of government may require it for the preservation of an orderly society”. (2) On the basis of these authorities, the petitioners argued that if the right to carry on business implicitly contains a right not to carry on business, then similarly the right to speak freely must contain a right not to speak, and by analogy the right to form associations must contain a right not to be forced into an association.

In this case, the Court observed that while the right to form associations or unions logically includes a corresponding right not to form them, such a negative right does not automatically acquire the status of a fundamental right. The Court noted that many rights enjoyed by Indian citizens are not classified as fundamental rights, and it is neither absurd nor unusual for only the positive aspect of a right to be elevated to that level. The argument presented by the petitioners was described as fallacious because it ignored the factual circumstance that no cane grower is compelled to become a member of the Canegrowers’ Co-operative Society. The impugned Act defines a cane grower as “a person who cultivates cane 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.” Under the same Act, the Sugarcane Board is to consist of fifteen members appointed by the State Government, five of whom must represent cane growers and the Canegrowers’ Co-operative Societies. The occupier of a factory is required to maintain a register of all cane growers and Co-operative Societies that sell cane to that factory, and the occupier must pay commission on the purchase of cane whether the purchase is made through a Co-operative Society or directly from the growers. The Uttar Pradesh Sugarcane Regulation of Supply and Purchase Order, 1954, issued under the powers granted by section 16 of the impugned Act, also refers to both cane growers and Co-operative Societies; in reserved areas, both categories are entitled, within fourteen days of the issuance of a reservation order, to supply cane to the factory occupier, and Form B in Appendix II of that order specifies the agreement between a cane grower and the factory occupier. Consequently, both the individual cane grower and the Co-operative Society fall within the scope of the impugned Act, and it cannot be argued that the purpose of the Act is to promote Co-operative Societies to the detriment of the growers themselves. The Court explained that Co-operative Societies are intended, if at all, to further the interests of the cane growers, and there is no inherent conflict between the interests of the growers and those of the societies. Both parties are equally addressed by the provisions of the impugned Act, but the Act allows the State Government to issue an order only when it is satisfied that circumstances exist which justify such an order.

Under the provision that cane grown by a cane grower could be purchased only through a Canegrowers’ Co-operative Society, the State Government exercised the power vested in it by section 16(2)(b) and issued an order in accordance with that power. The contested notification, dated 27 September 1954, laid down the specific circumstances in which a prohibitory order of this kind could be made. It stipulated that such an order would be considered expedient and desirable only when the membership of a particular Canegrowers’ Co-operative Society comprised at least seventy-five per cent of the total number of cane growers residing in the designated area. In that situation, every purchase of cane by the occupier of a factory from that area had to be effected solely through the agency of that Co-operative Society.

The purpose of this provision, as explained, was to eliminate unhealthy competition between individual cane growers and the Canegrowers’ Co-operative Societies, and also to prevent any malpractices by the factory occupier that might be aimed at breaking up the Co-operative Society. Accordingly, the notification prohibited the factory occupier from making any purchase from the area except through the Co-operative Society. The Court held that this was a reasonable measure intended for the benefit of the large number of persons who were members of the Co-operative Society, and that it could not be challenged as violating any fundamental right of the petitioners.

The Court further observed that the petitioners’ argument contained a fallacy because it ignored the fact that no cane grower was prevented from resigning his membership in a Canegrowers’ Co-operative Society. These societies were described as voluntary organisations, to which a cane grower could choose to join or not join. Once a grower had become a member, he retained the right to resign at his own choice. The only obstacles to resignation, as set out in the bye-laws of the Society, were the existence of any debt owed by the member to the Society or the member acting as surety for another member’s debt. Until such debts were discharged, and until the crushing season—during which the Co-operative Society had an agreement with the factory occupier—had ended, a member could not resign. The Court emphasized that these restrictions did not fetter the member’s right to resign; they merely required compliance with the Society’s bye-laws before a member could relinquish his membership.

Finally, the Court clarified that a cane grower was not absolutely barred from selling his sugarcane. The only restriction was that he could not sell his cane directly to the owner of the factory. He remained free to sell his sugarcane to any other person or for any other purpose, such as the manufacture of gur, rab, khandsari, or any product other than sugar.

It may be true that the cane grower encounters practical difficulties when he attempts to sell his produce under the same conditions, but such difficulties do not create an absolute prohibition on his right to dispose of his goods unless he actually becomes a member of a Canegrowers’ Co-operative Society. The grower remains entirely free to decide not to join the Co-operative Society, and no authority, however powerful, can compel him to acquire membership. In the same way, the grower is under no obligation to offer his sugarcane for sale to the occupier of a factory, even if his fields lie within the area that the factory has been assigned. His liberty to choose a purchaser for his sugarcane is completely unrestricted, and the Court sees no basis on which it could be argued that the provisions of the impugned Act and the notification dated 27 September 1954 violate his fundamental right guaranteed by article 19(1)(c) of the Constitution.

The petitioners also maintain that the same Act and the related notifications infringe the fundamental rights protected by article 19(1)(f) and article 19(1)(g), as well as article 31 of the Constitution. In addressing this contention, the Court refers to a passage from a prior decision of this Court, authored by Mukherjea, J., in the case of Messrs Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh and two others. That passage observes that it is indisputable that, for the purpose of ensuring an equitable distribution of essential commodities and for keeping their prices fair, it is reasonable for the State to regulate the sale of such commodities through licensed vendors, to allocate specific quotas, and to prohibit those vendors from selling above prices fixed by the controlling authority. The passage further explains that the power to grant or withhold licences, and to fix prices, must necessarily be vested in designated public officers or bodies, and that those officers will inevitably retain a certain degree of discretion.

The judgment continues by warning that a problem arises when the discretionary power conferred upon such officers is exercised arbitrarily, without any rule, principle, or higher-level check. When the law or order bestows an unchecked and arbitrary authority on the executive to regulate trade or business in commodities that are normally available to the public, such a law cannot be deemed reasonable. The Court, citing the earlier case of Chintaman v. The State of Madhya Pradesh, explains that the term “reasonable restriction” requires that any limitation placed on a person’s enjoyment of a right must not be arbitrary or excessive beyond what is necessary for the public interest. Consequently, legislation that imposes an arbitrary or overly extensive limitation fails to satisfy the requirement of reasonableness.

In this case, the Court observed that a law which invades a fundamental right cannot be described as reasonable and must maintain a proper balance between the freedom guaranteed by article 19 (1) (g) and the social control permitted by clause (6) of article 19; otherwise, the law would lack reasonableness. The Court explained that the authority granted to the Cane Commissioner under section 15 of the Act for declaring reserved or assigned areas was clearly defined and was governed by the considerations enumerated in Rule 22 of Chapter 6 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954. Moreover, the Commissioner was required to consult both the factory and the Cane-growers’ Co-operative Society before making any order, and any order he issued could be appealed to the State Government by an aggrieved party. The Court stressed that this arrangement could not be regarded as an uncontrolled or unfettered power because a higher authority was available for review whenever the Commissioner acted wrongly. Consequently, the Court held that the Commissioner’s power was neither absolute nor unguided, and therefore it did not fall within the mischief targeted by article 19 (1)(f) and (g); accordingly, the notification dated 9 November 1955 could not be challenged on that ground. The same reasoning applied to the notification dated 27 September 1954. The Court further noted that the restriction imposed on cane growers—requiring them to sell their sugarcane to factory occupiers in areas where the Co-operative Society’s membership was at least 75 percent of all growers—was a reasonable public-interest measure designed to protect the majority of growers and to promote the greatest good for the greatest number. As a result, the restriction fell comfortably within the protection of article 19 (6) and could not be attacked as violating the fundamental rights guaranteed by article 19 (1)(f) and (g). The Court added that even if the impugned notifications intruded upon the legislative competence of the State Legislature, they could not be challenged under article 31 because none of the petitioners was deprived of property except by authority of law. Turning to the seventh contention, the Court observed that the petitioners argued the Act was void because it allegedly conferred overly wide powers on executive officials and amounted to delegated legislation. The Court found no provision in the Act that amounted to a delegation of legislative power to State Government officials; the only provisions cited were section 15 and section 16(1)(b) read with section 16(2)(b), which had already been examined and were not considered delegated legislation. Accordingly, the validity of the Act was not affected. Finally, addressing the eighth contention, the Court noted that the petitioners claimed the Act destroyed the freedom of trade and commerce and thus violated article 301 of the Constitution.

The Court observed that the Constitution’s provisions on fundamental rights are contained in Part III, yet it was argued that any law contravening article 301 would be invalid and would not benefit the State Government. The Court noted that this argument essentially extended the earlier contention based on article 19(1)(f) and (g), but it was presented as a separate ground for challenging the constitutionality of the impugned Act and the notifications issued under it. The petitioners claimed that the notifications violated the freedom of trade, commerce and intercourse guaranteed by article 301, because they restricted the petitioners from selling their sugarcane to anyone other than the occupier of a factory, and even then only through a Canegrowers’ Co-operative Society, thereby preventing them from selling sugarcane outside the State. Assuming that claim to be correct, the Court explained that article 304 of the Constitution supplies the appropriate response, stating that “Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law … (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest.” The Court further referred to a passage from the Privy Council’s judgment in Commonwealth of Australia v. Bank of New South Wales (1950) A.C. 235, 311, which had been endorsed in Hughes and Vale Proprietary Ltd. v. State of New South Wales and Others (1955) A.C. 241, wherein the Council held that each case must be judged on its own facts and circumstances, and that at certain stages of economic development a prohibition aimed at creating a State monopoly could be deemed the only practical and reasonable mode of regulation, while inter-State trade, commerce and intercourse remained absolutely free. The Court recalled that it had already determined that the restrictions imposed by the notifications were reasonable restrictions in the public interest. Consequently, the Court concluded that the petitioners’ contention under article 301 was untenable. The Court held that the impugned Act and the notifications dated 27 September 1954 and 9 November 1955 were intra-vires the State Legislature and therefore binding on the petitioners. Accordingly, the petitions were dismissed. Regarding costs, the Court ordered that the petitions numbered 625 of 1954, 48 of 1955 and 47 of 1956, in which the President, Vice-President and Secretary respectively of the Anna Utpadak Sangh were among the petitioners, should bear costs as detailed in the subsequent order.

The Court held that the petitions filed by the petitioners, together with Petition No. 37 of 1956 in which the Saraya Sugar Factory was the petitioner, were to be dismissed. In addition, the Court ordered that the costs associated with these dismissed petitions be awarded as a single consolidated set. This single costs order was to be shared collectively by all of the petitions that were dismissed and by all of the respondents who were parties to those dismissed petitions. Accordingly, the respondents and petitioners in that group would jointly bear the expense of the costs award, rather than each party being assessed separately. The Court further observed that the remaining petitions, which were not included in the group mentioned above, would be dealt with on a different basis with respect to costs. For those petitions, the Court directed that each party to each separate petition would be responsible for paying its own costs. In other words, the parties to the other petitions would not be required to contribute to any shared costs order; instead, each party would bear the cost incurred in its own proceeding. This distinction in the cost orders applied to all of the petitions that were before the Court, ensuring that the dismissed petitions incurred a joint costs liability, while the other petitions each bore their individual costs.