Supreme Court of India
KRISHI UPAJ MANDI SAMITI, NARSINGHPURversusM/S. SHIV SHAKTI KHANSARI UDYOG AND OTHERS
- Citation
- 2012 INSC 364
- Decided
- 30 August 2012
- Disposal
- Dismissed
- Bench
- G S SINGHVI
Holding
The special Madhya Pradesh Sugarcane Act, 1958 and the Sugarcane (Control) Order override the general provisions of the Madhya Pradesh Krishi Upaj Mandi Act, 1972, rendering the market‑fee notices invalid.
Summary
The respondents, operators of sugar factories in Madhya Pradesh, challenged notices issued by market committees that required them to obtain licences under the Madhya Pradesh Krishi Upaj Mandi Act, 1972 and to pay market fees on purchases of sugarcane. The High Court quashed the notices, holding that the transactions were governed by the specialised Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958 and the Sugarcane (Control) Order, which conflicted with the general provisions of the Mandi Act. On appeal, the Supreme Court examined the statutory scheme, noting that the Sugarcane Act and the Control Order constitute a complete code for the purchase, price fixation and payment of sugarcane, whereas the Mandi Act prescribes market‑yard auctions and market fees. The Court found a direct repugnancy between the two statutes and held that the special legislation prevails over the general Mandi Act, and that Article 254(2) presidential assent could not be invoked to give the Mandi Act superiority. Consequently, the Court affirmed the High Court’s decision and dismissed the appeals.
Issues considered
- The applicability of the Madhya Pradesh Krishi Upaj Mandi Act, 1972 to the purchase of sugarcane by factories operating in market areas.
- Whether market fee under Section 19 of the Mandi Act can be levied on such transactions.
- The existence of repugnancy between the Mandi Act and the Madhya Pradesh Sugarcane Act, 1958 and the Sugarcane (Control) Order.
- The effect of presidential assent under Article 254(2) of the Constitution on the hierarchy of the statutes.
Legislation cited
- Constitution of Indias. Article 254(2)
- Essential Commodities Act, 1955s. 3
- Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972s. 19, s. 31, s. 32, s. 36
- Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958s. 12, s. 15, s. 16, s. 19, s. 20, s. 21, s. 22
- Sugarcane (Control) Order (under Essential Commodities Act, 1955)s. Clause 3, s. Clause 4, s. Clause 5, s. Clause 5A, s. Clause 6
Subjects
Market feeSugarcane ActMandi ActRepugnancy of statutesSpecial legislation vs general legislationPresidential assentArticle 254(2)Essential Commodities ActPrice fixationLicence requirement
Judgment
[2012] 10 S.C.R. 416
A KRISHI UPAJ MANDI SAMITI, NARSINGHPUR
v.
MIS. SHIV SHAKTI KHANSARI UDYOG AND OTHERS
{Civil Appeal No. 6186 of 2012 etc.)
AUGUST 30, 2012
B
[G.S. SINGHVI AND H.L. DATIU, JJ.]
Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 -
ss.19, 31 rlw s.32 and 36 - Transactions involving purchase
C of sugarcane by sugar factories operating in market areas of
the State - Levy of market fee - Validity- Applicability of the
1972 Mandi Adhiniyam - Respondents operating sugar
factories· in different market areas of the State - Notices
issued by appellant-Market Committees requiring the
D respondents to take licence under the 1972 Mandi Adhiniyam
and pay market fee on purchase of sugarcane from Cane
Growers I Cane Growers Cooperative Societies - Quashed by
High Court - Justification of- Held: Justified - The entire field
of sale and purchase of sugarcane is covered by the 1958
E Sugarcane Act and the Sugarcane Control Order, which are
special legislations - The 1972 Mandi Adhiniyam on the
other hand generally deals with the sale and purchase of
agricultural produce specified in the Schedule appended to
the Adhiniyam - Even though the 1972 Mandi Adhiniyam is
F a subsequent legislation, the general provisions contained in
the said Adhiniyam cannot be invoked for compelling the
occupier of a factory engaged in the manufacture of sugar to
take licence under s.31 rlw s.32 and pay market fee in terms
of s. 19 because the same are in direct conflict with the
G provisions contained in the 1958 Sugarcane Act and the
Sugarcane Control Order - Plea of appellant that the
provisions of the Sugarcane Control Order cannot prevail over
the 1972 Mandi Adhiniyam because the latter was enforced
after receiving Presidential assent cannot be accepted since
H 416
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 417
SHAKTI KHANSARI UDYOG
the State Government had not reseNed the Adhiniyam for A
Presidential assent on the ground of any repugnancy between
the provisions thereof and the Sugarcane Control Order- The
State Government could not have even thought of any
repugnancy between these statutes because at the relevant
time, sugarcane was not treated as an agricultural produce B
and was not included in the Schedule appended to the 1972
Mandi Adhiniyam - Madhya Pradesh Sugarcane (Regulation
of Supply and Purchase) Act, 1958 - ss. 12, 15, 16, 19,20,21
and 22 - Sugarcane (Control) Order - Clauses 3,4,5,5A and
6 - Essential Commodities Act, 1955 - s. 3. c
Constitution of India, 1950 - Article 254(2) - Presidential
assent under - Nature and scope of - Discussed.
The respondents were operating sugar factories in
different market areas of the State of Madhya Pradesh D
and purchasing sugarcane from Cane Growers and Cane
Growers' Cooperative Societies. They filed writ petitions
for quashing the notices issued by the appellant-Market
Committees requiring them to take licence under the
Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 [for E
short 'the Market Act'] and to pay market fee on the
purchase of sugarcane. It was pleaded on their behalf
that the provisions of the Market Act were not applicable
to the transactions exclusively governed by the Madhya
Pradesh Sugarcane (Regulation of Supply and Purchase) F
Act, 1958 [for short, 'the Sugarcane Act'] and the
Sugarcane (Control) Order [for short, 'the Control Order']
issued by the Central Government under Section 3 of the
Essential Commodities Act, 1955. The appellants
contested the writ petitions pleading that there is no G
conflict between the Market Act on the one hand and the
Sugarcane Act and the Control Order on the other
because the two sets of legislations operate in different
fields and in view of the section 19 of the Market Act, the
respondents were bound to pay market fee on the H
418 SUPREME COURT REPORTS [2012] 10 S.C.R.
A purchase of Sugarcane within the market areas.
The High Court by the impugned order held that
transactions involving the sale and purchase of
sugarcane were governed by Sections 12, 15, 16, 19, 20,
8 21 and 22 of the Sugarcane Act and Clauses 3, 4, 5, SA
and 6 of the Control Order, which are in the nature of
special legislations vis-a-vis the Market Act and, &s such,
market fee could not be levied by the Market Committees.
In the instant appeals filed by the State of Madhya
C Pradesh and the Market Committees, the question which
arose for consideration was whether the provisions of the
Market Act were applicable to the transactions involving
the purchase of sugarcane by the factories operating in
the market areas of the State and whether market fee
D could be levied on such transactions.
Dismissing the appeals, the Court
HELD: 1. The High Court did not commit any error
by quashing the notices issued by appellant • Market
E Committees to the respondents requiring them to take
licence under the Market Act and pay market fee on the
purchase of sugarcane from Cane Growers/Cane
Growers Cooperative Societies. [Para 28] [479-C-D]
F 2.1. An analysis of the provisions of the Sugarcane
Act and the Control Order alongwith the Market Act
brings to fore the conflict between the three statutes
insofar as they relate to the transactions involving sale
of sugarcane by Cane Growers I Cane Growers' Co-
G operative Societies to the occupiers of factories. While
the Sugarcane Act and the Rules framed thereunder
constitute a complete code for regulating the supply of
sugarcane by Cane Growers and Cane Growers' Co-
operative Societies to the occupiers of the factories at the
H purchasing centres established and maintained by them
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 419
SHAKTI KHANSARI UDYOG
and payment of price without delay, the Market Act A
regulates sale and purchase of notified agricultural
produce in the market yards specified for the particular
produce or at other places provided in the bye-laws and
mandates that the price of the notified agricultural
produce should be settled by tender bid or open auction B
system. (Sugarcane was included in the Schedule w.e.f.
7-6-1979 by M.P. Act No.18/1997). The Control Order not
only lays down the mechanism for determination of the
minimum price of sugarcane payable by the producers
of sugar or their agents for the sugarcane purchased by c
them, but also prescribes the mode of payment of the
price. The Sugarcane Act and the Rules framed
thereunder also prescribe the mode of payment of the
price by the occupier of the factory. Likewise, the Market
Act contains provisions for payment of the price of the 0
notified agricultural produce brought into the market yard
for sale. It is thus evident that so far as sugarcane is
concerned, there is direct conflict between the provisions
of the Sugarcane Act and the Market Act both, in matters
relating to sale and purchase of sugarcane, and, payment
of price. Likewise, there is conflict between the Control E
Order and the Market Act in the matter of determination
of price of the sugarcane and mode of payment. [Para 17]
[456-H; 457-A-F]
2.2. Even though the Market Act is a subsequent F
legislation and one of its objectives is to regulate buying
and selling of agricultural produce including sugarcane,
the general provisions contained therein cannot prevail
over the Sugarcane Act and the Control Order, which are
special legislations exclusively dealing with issues G
relating to increase in the production of sugarcane, supply
of sugarcane by Cane Growers/Cane Growers
Cooperative Societies to the factories from any reserved
or assigned area or otherwise and payment of the price
of cane by the occupier of the factory. [Para 18] [459-F-H] H
420 SUPREME COURT REPORTS [2012] 10 S.C.R.
A 2.3. Though, there is no significant difference in the
Control Order and the Market Act insofar as the mode of
payment of the price of sugarcane is concerned, but the
mechanism enshrined in the two statutes for
determination of price is vastly different. The Control
s Order envisages fixation of the minimum price of
sugarcane by the Central Government after considering
the factors enumerated in Clause 3 and consulting such
authorities, bodies or associations as it may think fit and
the producer of sugar is bound to pay at least that price
c to Cane Growers/Cane Growers Cooperative Societies.
As against this, the Market Act postulates determination
of the price of the notified agricultural produce
(sugarcane is only one of such produce) brought into the
market yard for sale under Section 36(3) by tender bid or
open auction. In that exercise, the State Government/the
0
concerned Market Committee does not have any role to
play. Such price cannot be less than the support price
declared by the State Government. This difference also
indicates that the Control Order is a special legislation
E vis-a-vis the Market Act. [Para 19) [460-A-D]
2.4. The entire field of the sale and purchase of
sugarcane is covered by the Sugarcane Act and the
Control Order, which are special legislations and the
provisions contained in the Market Act, which generally
F deal with sale and purchase of agricultural produce
specified in the Schedule cannot be invoked for
compelling the occupier of a factory engaged in the
manufacture of sugar to take licence under Section 31
read with Section 32 and pay market fee in terms of
G Section 19 thereof because the same are in direct conflict
with the provisions contained in the Sugarcane Act and
the Control Order. [Para 22] [468-8-D]
Be/sund Sugar Co. Ltd. v. State of Bihar (1999) 9 SCC
H 620: 1999 (1) Suppl. SCR 146 and H.S. Jayanna and others
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 421
SHAKTI KHANSARI UDYOG
v. State of Kamataka (2002) 4 SCC 125: 2002 (2) SCR 261 A
- referred to.
Krishi Upaj Mandi Samiti v. Orient Paper and Industries
Ltd. (1995) 1 SCC 655: 1994 (5) Suppl. SCR 392; Basantlal
Banarsilal v. Bansilal Dagdulal AIR 1955 Born. 35; Tika 8
Ramji v. State of U.P. AIR 1956 SC 676: 1956 SCR 393;
Kai/ash Nath v. State of U.P. AIR 1957 SC 790; Basantlal
Banarsilal v. Bansilal Dagdulal AIR 1961 SC 823: 1967 SCR
38; Janardan Pillai v. Union of India (1981) 2 SCC 45: 1981
(2) SCR 676;.'M/s. Hoechst Pharmaceuticals Ltd. and others
v. State of Bihar 1983 (4) SCC 45: 1983 (3) SCR 130; Bharat C
Shivram Sif!gh and others v. State of Gujarat and others
(1986) 4 SCC 51: 1986 (3) SCR 602; P.N. Krishna/al v. Govt.
of Kera/a 1995 (Supp.) 2 SCC 187: 1994 (5) Suppl. SCR
526; Subhash Ramkumar Bind Alias Vakil and another v.
State of Maharashtra (2003) 1 SCC 506: 2002 (4) Suppl. D
SCR 65; Dharappa v. Bijapur Co-operative Milk Producers
Societies Union Limited (2007) 9 SCC 109: 2007 (5) SCR
729 and Grand Kakatiya Sheraton Hotel and Towers
Employees and Workers Union v. Srinivasa Resorts Limited
and others (2009) 5 sec 342: 2009 (3) SCR 668 - cited. E
3.1. The argument of the appellants that the
provisions of the Control Order cannot prevail over the
Market Act because the same was enforced after
receiving Presidential assent merits rejection for the F
following reasons: (i) In the counter filed before the High
Court, no such plea was raised and no document was
produced to show that the Market Act was reserved for
Presidential Assent on the ground that the provisions
contained therein are in conflict with those contained in G
the Control Order. (ii) It was not argued before the High
Court that the President had been apprised of the conflict
between the Control Order and the Market Act and he
accorded assent after considering this fact. (iii) From the
summary prepared for consideration of the President, it H
422 SUPREME COURT REPORTS (2012] 10 S.C.R.
A is clear that the State Government had not reserved the
Market Act for Presidential assent on the ground of any
repugnancy between the provisions of that Act and the
Control Order. As a matter of fact, the State Government
could not have even thought of any repugnancy between
B these statutes because at the relevant time, sugarcane
was not treated as an agricultural produce and was not
included in the Schedule appended to the Market Act.
[Paras 23, 24] [468-E-H; 471-C-D]
3.2. The assent of the President under Article 254(2)
C of the Constitution is not an empty formality and the
President has to be apprised of the reason why his
assent was being sought. If the assent is sought for a
specific purpose, the efficacy of assent would be limited
to that purpose and cannot be extended beyond it.
D Consequently, Article 254(2) of the Constitution is not
available to the appellants for seeking a declaration that
the Market Act would prevail over the Control Order and
that transactions involving the purchase of sugarcane by
the factories operating in the market areas would be
E governed by the provisions contained in the Market Act.
[Paras 25, 28] [471-F-G; 479-B-C]
Gram Panchayat of Village Jama/pur v. Ma/winder Singh
and others 1985 (3) sec 661: 1985 (2) Suppl. SCR 28 and
F Kaiser-I-Hind Private Limited and another v. National Textile
Corporation (Maharashtra North) Ltd. and others (2002) 8
SCC 182: 2002 (2) Suppl. SCR 555 - followed.
Case Law Reference:
G 1994 (5) Suppl. SCR 392 cited Para 7
AIR 1955 Born. 35 cited Para 7
1956 SCR 393 cited Para 7
AIR 1957 SC 790 cited Para 7
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 423
SHAKTI KHANSARI UDYOG
1967 SCR 38 cited Para 7 A
1981 (2) SCR 676 cited Para 7
1983 (3) SCR 130 cited Para 7
1986 (3) SCR 602 cited Para 7
B
1994 (5) Suppl. SCR 526 cited Para 7
2002 (4) Suppl. SCR 65 cited Para 7
2007 (5) SCR 729 cited Para 7
c
2009 (3) SCR 668 cited Para 7
1999 (1) Suppl. SCR 146 referred to Para 20
2002 (2) SCR 261 referred to Para 21
2002 (2) Suppl. SCR 555 followed Para 26 D
1985 (2) Suppl. SCR 28 followed Para 28
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6186 of 2012.
E
From the Judgment & Order dated 6.7.2006 of the High
Court of Madhya Pradesh at Jabalpur in Civil Misc. Writ Petition
No. 3928 of 2006.
WITH F
C.A. No. 6187, 6188, 6189, 6190, 6191, 6192, 6193, 6194,
6195, 6196, 6197, 6198, 6199 and 6200 of 2012.
Prashant Kumar, Anurag Sharma, Ashiesh Kumar, B.S.
Banthia for the Appellant. G
A.K. Sanghi, Jayant Bhushan, Saket Singh, Niranjana
Singh, Ankur Saijal, Bina Gupta, Pragati Neekhra,
Surynarayana Singh, S.S. Khanduja, B.K. Satija, S.K. Verma,
G. Prakash for the Respondent.
H
424 SUPREME COURT REPORTS [2012) 10 S.C.R.
A The Judgment of the Court was delivered by
G.S. SINGHVI, J. 1. Leave granted.
2. The questions which arise for consideration in these
appeals filed by the State of Madhya Pradesh and the Market
B Committees against the orders passed by the Division
Benches of the Madhya Pradesh High Court are whether the
provisions of the Madhya Pradesh Krishi Upaj Mandi
Adhiniyam, 1972 (hereinafter described as, 'the Market Act')
are applicable to the transactions involving the purchase of
C sugarcane by the factories operating in the market areas of the
State and whether market fee can be levied on such
transactions.
3. The contesting respondents are operating sugar
0 factories in different market areas of the State and have been
purchasing sugarcane from Cane Growers and Cane Growers'
Co-operative Societies. Thus, they are covered by the general
sweep of the Market Act because sugarcane is a notified
agricultural produce and by virtue of Section 19, the Market
E Committees are empowered to levy market fee on the
transactions involving purchase of sugarcane.
4. The respondents filed writ petitions for quashing the
notices issued by the Market Committees requiring them to
take licence under the Market Act and to pay market fee on
F the purchase of sugarcane, by asserting that the provisions of
the Market Act are not applicable to the transactions which are
exclusively governed by the Madhya Pradesh Sugarcane
(Regulation of Supply and Purchase) Act, 1958 (for short, 'the
Sugarcane Act') and the Sugarcane (Control) Order (for short,
G 'the Control Order') issued by the Central Government under
Section 3 of the Essential Commodities Act, 1955 (for short,
'the EC Act').
5. The appellants contested the writ petitions and pleaded
H that there is no conflict between the Market Act on the one hand
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 425
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.)
and the Sugarcane Act and the Control Order on the other A
because the two sets of legislations operate in different fields
and in view of Section 19 of the Market Act, the respondents
are bound to pay market fee on the purchase of sugarcane
within the market areas.
B
6. The Division Bench of the High Court referred to the
~provisions of the Market Act, the Sugarcane Act and the Control
Order and held that the transactions involving the sale and
~urchase of sugarcane are governed by Sections 12, 15, 16,
19, 20, 21 and 22 of the Sugarcane Act and Clauses (3), (4), C
(5), (SA) and (6) of the Control Order, which are in the nature
of special legislations vis-a-vis the Market Act and, as such,
market fee cannot be levied by the Market Committees. The
reasons assigned by the High Court for arriving at this
conclusion are contained in paragraph 17 of order dated
6.7.2006 passed in Writ Petition No. 391/1995 and batch, D
which is extracted below:
"17. Sub-section (1) of Section 36 quoted above clearly
provides that all notified agricultural produce brought into
the market for sale shall be brought into market yard/yards E
specified for such produce and shall not, subject to the
provisions of sub-section (2), be sold at any other place
outside such yard. Sub-section (3) of Section 36 further
provides that the price of the notified agricultural produce
brought into the market yard for sale shall be settled by F
tender bid or open auction system and no deduction shall
be made from the agreed price on any account
whatsoever. Sub-section (4) of Section 36 of the Market
Act further provides that weighment or measurement of all
the notified agricultural produce so purchased shall be G
done by a licensed weighman in the market yard or any
other place specified by the market committee for the
purpose. Sub section (1) of Se_ction 37 of the Market Act
states that any person who buys notified agricultural
produce in the market area shall execute an agreement
in triplicate in such form as may be prescribed, in favour H
426 SUPREME COURT REPORTS [2012] 10 S.C.R.
A of the seller. Sub-section (2) of Section 37 provides for
payment of price of agricultural produce brought in the
market yard on the same day to the seller at the market
yard and additional payment at the rate of one percent, per
day of the total price of the agricultural produce payable
B to the seller within five days. These provisions of Sections
36 and 37 of the Market Act are in direct conflict with the
provisions of Clauses (3), (4), (5), (SA) and (6) of the
Control Order made by the Central Government under
Section 3 of the Essential Commodities Act, 1955
c discussed above. Similarly these provisions of the Market
Act are in direct conflict with the provisions of Sections 12,
15, 16, 19, 20, 21 and 22 of the Sugarcane Act made by
the State Legislature of Madhya Pradesh, discussed
above. In view of such conflict, either, the aforesaid
provisions of the Market Act apply to the transactions of
D
buying and selling of sugarcane between the occupiers of
factories and the sugarcane growers or sugarcane
growers cooperative societies, or the provisions of the
Control Order made by the Central Government and the
aforesaid provisions of the Sugarcane Act made by the
E State Government apply to such transactions of buying and
selling between the occupiers or owners of sugar factories
and the sugarcane growers or sugarcane growers
cooperative societies. The Control Order made by the
Central Government and the Sugarcane Act made by the
F State Legislature being a Special Order and Special Act
relating to supply and purchase of sugarcane will apply to
transactions of sale and purchase of sugarcane between
the occupiers of the factory and the sugarcane growers or
sugarcane growers cooperative societies and the
G provisions of the Market Act being a General Act with
regard to agricultural produce will stand excluded and will
not apply to such transactions of buying and selling of
sugarcane between the occupiers of factories and the
sugarcane growers or sugarcane growers cooperative
H societies."
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 427
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
7. Shri Vivek Tankha, learned senior counsel appearing for A
the Market Committees and Shri B.S. Banthia, learned counsel
appearing for the State argued that the object of the Sugarcane
Act and the Control Order is to regulate the supply and purchase
of sugarcane and to ensure that price determined by the
competent authority is paid to the Cane Growers without delay, B
but these enactments have nothing to do with the levy of market
fee on transactions involving the purchase of sugarcane by the
factories within the market areas and the High Court committed
serious error by declaring that the provisions of the Sugarcane
Act and the Control Order would prevail vis-a-vis those c
contained in the Market Act. The learned counsel further argued
that the ratio of the judgment in Be/sund Sugar Co. Ltd. v. State
of Bihar (1999) 9 sec 620, on which reliance has been placed
by the High Court, has no bearing on the interpretation of the
provisions of the Sugarcane Act and the Market Act because
0
there is significant difference between the Bihar Acts and the
Madhya Pradesh Acts. Shri Tankha emphasized that the Market
Act and the Sugarcane Act operate in different fields and even
if there appears some conflict between the two enactments, the
provisions contained in the Market Act would prevail because E
the Sugarcane Act does not provide for levy of market fee on
the purchase of sugarcane by the factories. Learned senior
counsel relied upon the judgment in Krishi Upaj Mandi Samiti
v. Orient Paper and Industries Ltd. (1995) 1 SCC 655 and
argued that the sugarcane factories are liable to pay market
fee on the purchase of sugarcane which takes place within the F
market areas because they are benefitted by the development
works undertaken by the Market Committees and the Madhya
Pradesh Agricultural Marketing Board. Shri Tankha also relied
upon Article 254 of the Constitution and argued that even
though the Control Order has been framed under a Central G
legislation, the provisions contained therein cannot override the
Market Act which was enforced after receiving Presidential
assent. In support of this argument, Shri Tankha relied upon the
judgments in Basantlal Banarsilal v. Bansi/al Dagdulal AIR
1955 Born. 35, Tika Ramji v. State of U.P. AIR 1956 SC 676 H
428 SUPREME COURT REPORTS [2012) 10 S.C.R.
A = 1956 SCR 393, Kai/ash Nath v. State of UP. AIR 1957 SC
790, Basantlal Banarsilal v. Bansilal Dagdulal AIR 1961 SC
823, Janardan Pillai v. Union of India (1981) 2 SCC 45, Mis.
Hoechst Pharmaceuticals Ltd. and others v. State of Bihar
1983 (4) SCC 45, Gram Panchayat of Village Jamalpur v.
B Ma/winder Singh and others 1985 (3) SCC 661, Bharat
Shivram Singh and others v. State of Gujarat and others
(1986) 4 SCC 51, Krishi Upaj Mandi Samiti and others v.
Orient Paper and Industries (supra), P.N. Krishna/al v. Govt.
of Kera/a 1995 (Supp.) 2 SCC 187, H.S. Jayanna and others
C v. State of Kamataka (2002) 4 SCC 125, Kaiser-I-Hind Private
Limited and another v. National Textile Corporation
(Maharashtra North) Ltd. and others (2002) 8 SCC 182,
Subhash Ramkumar Bind Alias Vakil and another v. State
of Maharashtra (2003) 1 SCC 506, Dharappa v. Bijapur Co-
D operative Milk Producers Societies Union Limited (2007) 9
SCC 109 and Grand Kakatiya Sheraton Hotel and Towers
Employees and Workers Union v. Srinivasa Resorts Limited
and others (2009) 5 sec 342.
8. Shri Jayant Bhushan and Shri A.K. Sanghi, Senior
E Advocates and Ms. Pragati Neekhra, learned counsel
appearing for the respondents supported the impugned orders
and argued that being a special legislation, which covers all
aspects of the supply and purchase of sugarcane including the
payment of price to Cane Growers, the Sugarcane Act will
F prevail over the Market Act, which generally empowers the
market committees to levy market fee on the sale and purchase
of notified agricultural produce. More so, because the
procedure prescribed under Section 36 of the Market Act for
the purchase of agricultural produce within the market yard or
G market proper is in direct conflict with the provisions of the
Sugarcane Act which postulate the purchase of sugarcane by
the factories at an identified place or at the factory gate.
Learned senior counsel then argued that the sugar factories
cannot be burdened with the liability of paying market fee on
H the purchase of sugarcane because the same is not taken into
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV429
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
consideration while fixing the price of sugar under Clause 3 of A
the Control Order. Shri Bhushan submitted that the Court should
not entertain the argument made by Shri Tankha with reference·
to Article 254 of the Constitution because no such argument
was raised before the High Court and no document has been
produced before this Court to show that Presidential assent B
was obtained for amendment in the Market Act with specific
reference to the Sugarcane Act.
9. For deciding whether there is any conflict between the
Sugarcane Act and the Control Order on the one hand and the
Market Act on the other, it will be useful to notice the relevant C
statutory provisions:
The Sugarcane Act
10. The Sugarcane Act was enacted by the State D
legislature in the backdrop of inadequate supply of sugarcane
to the factories and the difficulties faced by the cultivators in
selling their produce and getting the price. Section 2 of the Act
contains definitions of various terms. Section 3 mandates the
State Government to establish Sugarcane Board for the State. E
In terms of Section 4, the Sugarcane Board is required to
advise the State Government on matters pertaining to the
regulation of supply and purchase of cane for sugar factories;
the varieties of cane which are suitable for use in sugar
factories; the maintenance of healthy relations between F.
occupiers, managers of factories, Cane-growers' Co-operative
Societies, Cane Development Council and purchasing agents
and such other matters as may be prescribed. Section 5
provides for establishment of a Cane Development Council,
whose functions are to consider and approve the programme
for development of the zone; to advise regarding the ways and G
means for the execution of the development plan in all its
essentials such as cane varieties, cane-seed, sowing
programme, fertilizers and manures; to undertake the
development of irrigation and other agricultural facilities in the
zone; etc. Section 8 lays down that there shall be a fund at the H
430 SUPREME COURT REPORTS [20121 10 S.C.R.
A disposal of the Council to meet the expenses required to be
incurred for the discharge of duties and performance of its
functions under the Act. The fund shall consist of the grants
made by the Indian Central Sugarcane Committee and the
State Government, sums received by the Council by way of
B commission under Section 21 and any other sum which may
be credited to the fund under the general or special order of
the State Government. Section 12 empowers the Cane
Commissioner to call upon the occupier to furnish an estimate
of the quantity of cane which will be required by the factory
c during the crushing season. The Cane Commissioner is
obliged to examine every such estimate and publish the same
with modification, if any. Section 13 casts a duty on the occupier
to maintain a register of all such Cane Growers and Cane-
Growers' Co-operative Societies which are required to sell
cane to the factory. Section 14 empowers the State
0
Government to make provision for survey of an area proposed
to be reserved or assigned for supply of cane to a factory.
Section 15 postulates declaration of reserved area and Section
16 provides for declaration of an assigned area. Under Section
19, the State Government has the power to issue an order for
E regulating the distribution, sale or purchase of cane in any
reserved or assigned area and purchase of cane in any area
other than the reserved or assigned area. Section 20 deals with
the payment of price. Section 21 provides for payment, by the
occupier, of a commission for every one maund of cane
F purchased by the factory. Section 22 gives power to the State
Government to declare varieties of cane which are unsuitable
for use in the factories. Chapter IV contains miscellaneous
provisions including Section 30 under which the State
Government is empowered to make rules for giving effect to
G the provisions of the Act. For the sake of reference, Sections
5, 6, 8, 15, 16, 19, 20 and 21 of the Sugarcane Act are
reproduced below:
"5. The Cane Development Council.- (1) There shall
H be established, by notification for the reserved area of a
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 431
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
factory a Cane Development Council which shall be a body A
corporate by the name of such area or such other name
as the State Government may notify in this behalf having
perpetual succession, and subject to such restrictions or
qualifications as may be imposed under this Act or any
other enactment, vested with the capacity of suing and s
being sued in its corporate name, of acquiring, holding,
administering and transferring property both movable and
immovable, and of entering into contracts :
Provided that where the Cane Commissioner so directs,
the Council may be established for a larger or smaller area C
than the reserved area of a factory.
(2) The area for which a Council is established shall be
called a zone.
D
(3) to (6) )()()()( )()()()( )()()()(
6. Functions of the Council.- (1) Functions of the
Council shall be-
(a) to consider and approve the programme of E
development for the zone;
(b) to devise ways and means for the execution of the
development plan in all its essentials such as cane
varieties, cane-seed, sowing programme, fertilizers
F
and manures;
(c) to undertake the development of irrigation and
other agricultural facilities in the zone;
(d) to take necessary steps for the prevention and G
control of diseases and pests and to render all
possible help in the soil extension work;
(e) to impart technical training to cultivators in matters
relating to the production of cane;
H
432 SUPREME COURT REPORTS [2012] 10 S.C.R.
A (f) to administer the funds at its disposal for the
execution of the development scheme subject to
such conditions as may be prescribed; and
(g) to perform other prescribed functions pertaining
and conducive to the general development of the
B
zone.
(2) The State Government may at any time direct the Cane
Commissioner to convene a joint meeting of two or more
councils. Every such meeting shall be presided over by
c such person as may be nominated in that behalf by the
State Government.
8. Council Fund.- (1) There shall be a fund at the
disposal of the Council to meet the charges in connection
D with the discharge of its duties and performance of its
functions under this Act.
(2) The fund of the Council shall consist of-
(a) grants, if any, made by the Indian Central
E Sugarcane Committee;
(b) grants, if any, made by the State
Government;
(c) sums received by the Council by way of
F commission under Section 21; and
(d) any other sums which may be credited to it
under the general or special orders of the
State Government.
G
15. Declaration of reserved area. - Without prejudice to
any order under clause (d) of sub-section (2) of Section
19, the Cane Commissioner may, after consulting in the
prescribed manner, the occupier and Cane-growers' Co-
operative Society, if any, in any area to be reserved for a
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 433
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
factory reserve such area for such factory and thereupon A
occupier thereof shall subject to provisions of Section 22
be liable to purchase all cane grown in such area which is
offered for sale to the factory.
16. Declaration of assigned area.- Without prejudice to 8
any order under clause (d) of sub-section (2) of Section
19, the Cane Commissioner may after consulting in the
manner prescribed, the occupier and Cane-growers' Co-
operative Society, if any, in any area to be assigned,
assign such area for the purpose of the supply of cane to C
a factory in accordance with the provisions of Section 19
during any crushing season; and thereupon the occupier
thereof shall subject to the provisions of Section 22 be
liable to purchase such quantity of cane grown in that area
and offered for sale to the factory as may be determined
by the Cane Commissioner. 0
19. Regulation of purchase anct supply of cane in the
reserved and assigned areas.- (1) The State
Government may, for maintaining supplies, by order
regulate- E
(a) distribution, sale or purchase of cane in any
reserved orassigned area; and
(b) purchase of cane in any area other than a reserved
or assigned area. F
(2) Without prejudice to the generality of the foregoing
powers such order may provide for-
(a) the quantity of cane to be supplied by each Cane- G
groweror Cane-growers' Co-operative Society in
such area to the factory for which the area has been
so reserved or assigned;
(b) the manner in which cane grown in the reserved
area orthe assigned area shall be purchased by the H
434 SUPREME COURT REPORTS [2012] 10 S.C.R.
A factory for which the area has been so reserved or
assigned and the circumstances in which the cane
grown by a cane-grower shall not be purchased
except through a Cane-growers' Co-operative
Society;
B
(c) the form and terms and conditions of the agreement
to beexecuted by the occupier of the factory for
which an areais reserved or assigned for the
purchase of cane offered for sale:
c (d) the circumstances under which permission may be
granted-
(i) for the purchase of cane grown in reserved or as-
signed area by a purchasing agent or any person
D other than the factory for which area has been
reserved or assigned; and
(ii) for the sale of cane grown in a reserved or
assigned area to any other person or factory other
than the factory for which the area is reserved or
E assigned;
(e) such incidental and consequential matters as may
appearto be necessary or desirable for this
purpose.
F
20. Payment of cane price.- (1) The occupier shall make
suitable provision to the satisfaction of the Collector for the
payment of the price of cane.
(2) Upon the delivery of cane, the occupier shall, subject
G to the deductions specified in sub-section (2-a) be liable
to pay immediately the price of the cane so supplied,
together with all other sums connected therewith and where
the supplies have been made through a purchasing agent,
the purchasing agent shall similarly be liable in addition to
H the occupier.
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 435
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
(2-a) Where a Cane-grower or a Cane-growers' Co- A
operative Society, as the case may be, to whom price is
payable under sub-section (1) has borrowed a loan for
cane development from any agency notified by the State
Government in this behalf, the occupier or the purchasing
agent, as the case may be, shall be, on being authorised B
by that agency so to do, entitled to deduct from the price
so payable, such amount as may be prescribed, towards
the recovery of such loan and pay the same to the agency
concerned forthwith.
(3) Where the person liable under sub-section (2) is in
c
default in making the payment of the price for a period
exceeding fourteen days from the date of delivery he shall
also pay interest at the rate of 14-1/2 per cent, per annum
from the said date of delivery upto the date of payment but
the Cane Commissioner may, in any case, direct with the D
approval of the State Government that no interest shall be
paid or be paid at such reduced rate as he may fix.
(4) The Cane Commissioner shall forward to the Collector
a certificate under his signature specifying the amount of E
arrears on account of the price of cane plus interest, if any,
due from the occupier and the Collector, on receipt of such
certificate, shall proceed to recover from such occupier the
amount specified therein as if it were an arrear of land
revenue together with further interest up to the date of F
recovery."
21. Commission on purchase of cane.- (1) There
shall be paid by the occupier a commission for every one
maund of cane purchased by the factory-
G
(a) where the purchase is made through a Cane-
growers' Co-operative Society, the commission
shall be payable to the Cane-growers' Co-operative
Society and the Council insuch proportion as the
State Government may declare;and H
436 SUPREME COURT REPORTS [2012] 10 S.C.R.
A (b) where the purchase is made directly from the Cane-
grower, the commission shall be payable to the
Council.
(2) The commission payable under clauses (a) and (b) of
sub-section (1) shall be at such rates as may be
B
prescribed provided, however, that the rate fixed under
clause (b) shall not exceed the rate at which the
commission may be payable to the Council under clause
(a).
c (3) The provisions relating to payment, interest and
recovery, including recovery as arrears of land revenue,
applicable to price of cane shall mutatis mutandis apply
to payment and recovery of commission under sub-section
(1 )."
D
11. In exercise of the power vested in it under Section 30
of the Sugarcane Act, the State Government framed the
Madhya Pradesh Sugarcane (Regulation of Supply and
Purchase) Rules, 1959 (for short, 'the Rules'). Rules 2(f), 35,
E 36, 40, 41 and 43, which have bearing on these appeals, read
as under:
"2(f) 'Purchasing Center' means any place at which cane
is purchased, delivered, weighed or paid for and includes
such portion of the premises of the factory as is used for
F any of these purposes.
35. At any purchasing centre adequate facilities for
weighment shall be provided to the satisfaction of the
Cane Commissioner by the occupier of a factory to avoid
G congestion and undue delay in weighment. Cane carts and
trucks shall not be kept waiting for more than ten hours
without adequate reasons.
Explanation.-A cart shall not be deemed to have been kept
waiting unduly if the supplier of cane, having received
H instructions in writing to deliver cane on a certain day,
KRISHI UfiAJ MANDI SAMITI, NARSINGHPUR v. SHIV 437
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
ignores such instructions or where the practice of issuing A
written instructions is in force, brings cane without receiving
such instructions.
36. The occupier of a factory shall - (a) provide, metalled
approaches from the public roads to the parking ground B
at the factory premises, from the parking ground to the
cane carrier of factory, and metalled exits from the cane
carrier to public roads, up to such distances as may be
directed by the Cane Commissioner and keep the same
in a proper state of repairs;
c
(b) provide to the satisfaction of the Cane Commissioner
reasonable space with metalled tracks separated by
railings or walls and properly lighted, for parking of carts
waiting for weighment and keep the same in a proper
state of hygienic cleanliness; D
(c) provide shelter and drinking water facilities for both
cartmen and bullocks at the factory gate and drinking water
facilities at all purchasing centres as directed by the Cane
Commissioner; and
E
(d) provide such other facilities as may be directed by the
Cane Commissioner from time to time.
40. Payments of the price of cane shall be made on the
recorded weight of the cane at the purchasing centre. The F
price shall be calculated to the nearest Naya Paisa.
41. Payments for cane shall be made only to the Cane-
grower or his representative duly authorised by him in
writing to receive payment or to a Cane-Growers' Co- G
op~rative Society.
43. The occupier of a factory or a purchasing agent shall
not make any deduction from the amount due for cane sold
to him by a Cane-grower or Cane-grower's Co-operative
Society: H
438 SUPREME COURT REPORTS [2ti12] 10 S.C.R.
A Provide that recovery of the dues of a Cane-growers' Co-
operative Society may be made by deduction form the
price payable for cane."
The Control Order
B 12. In exercise of the power vested in it under Section 3
of the EC Act, the Central Government framed the Control
Order, the relevant provisions of which are reproduced below:
"2(g) 'price' means the price or the minimum price fixed
c by the Central Government, from time to time, for
sugarcane delivered-
(i) to a sugar factory at the gate of the factory or at a sugar-
cane purchasing centre;
D (ii) to a khandsari unit;
3. Minimum price of sugarcane payable by producer
of sugar.-(1) The Central Government may, after
consultation with such authorities, bodies or associations
E as it may deem fit, by notification in the Official Gazette,
from time to time, fix the minimum price of sugarcane to
be paid by producers of sugar or their agents for the
sugarcane purchased by them, having regard to-
(a) the cost of production of sugarcane;
F
(b) the return to the grower from alternative crops and the
general trend of prices of agricultural commodities;
(c) the availability of sugar to the consumer at a fair price;
G (d) the price at which sugar produced from sugarcane is
sold by producers of sugar; and
(e) the recovery of sugar from sugarcane:
Provided that the Central Government or, with the approval
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 439
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
of the Central Government, the State Government, may, in A
such circumstances and subject to such conditions as
specified in Clause 3-A, allow a suitable rebate in the price
so fixed.
Explanation.-(1) Different prices may be fixed for different B
areas or different qualities or varieties of sugarcane.
(2) No person shall sell or agree to sell sugarcane to a
producer of sugar or his agent, and no such producer or
agent shall purchase or agree to purchase sugarcane, at
a price lower than that fixed under sub-clause (1). C
(3) Where a producer of sugar purchases any sugarcane
from a grower of sugarcane or from a sugarcane growers'
co-operative society, the producer shall, unless there is an
agreement in writing to the contrary between the parties, 0
pay within fourteen days from the date of delivery of the
sugarcane to the seller or tender to him the price of the
cane sold at the rate agreed to between the producer and
the sugarcane grower or sugarcane growers' co-operative
society or that fixed under sub-clause (1 ), as the case may E
be, either at the gate of the factory or at the cane collection
centre or transfer or deposit the necessary amount in the
bank account of the seller or the co-operative society, as
the case may be.
(3-A) Where a producer of sugar or his agent fails to make F
payment for the sugarcane purchased within 14 days of the
date of delivery, he shall pay interest on the amount due
at the rate of 15 per cent per annum for the period of such
delay beyond 14 days. Where payment of interest on
delayed payment is made to a cane growers' society, the G
society shall pass on the interest to the cane growers
concerned after deducting administrative charges, if any,
permitted by the rules of the said society.
(4) to (6) xxxx xxxx )()()()(
H
440 SUPREME COURT REPORTS [2012] 10 S.C.R.
A (7) In case, the price of the sugarcane remains unpaid on
the last day of the sugar year in which cane supply was
made to the factory on account of the suppliers of cane
not coming forward with their claims therefor or for any
other reason it shall be deposited by the producer of sugar
B with the Collector of the district in which the factory is
situated, within three months of the close of the sugar year.
The Collector shall pay, out of the amount so deposited,
all claims, considered payable by him and preferred before
him within three years of the close of the sugar year in
which the cane was supplied to the factory. The amount
c still remaining undisbursed with the Collector, after
meeting the claims from the suppliers, shall be credited
by him to the Consolidated Fund of the State, immediately
after the expiry of the time limit of 3 years within which
claims therefor could be preferred by the suppliers. The
D
State Government shall, as far as possible, utilise such
amounts, for development of sugarcane in the State."
The Market Act
E 13. Initially, the State Legislature had enacted the Madhya
Pradesh Agricultural Markets Act, 1960. After noticing certain
defects in the scheme of that Act and with a view to ensure
efficient functioning of the Market Committees which would
benefit agriculturists and traders, a committee of the members
F of the State Legislature was formed in 1965. The
recommendation made by the Committee for enactment of a
new legislation was accepted by the State Government.
Accordingly, the Market Act was enacted for better regulation
of buying and selling of agricultural produce and for the
G establishment and proper administration of markets of
agricultural produce in the State. The relevant provisions o·i the
Market Act read as under:
"2. Definitions.- (1) In this Act, unless the context
otherwise requires,
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 441
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
(a) "agricultural produce" means all produce of agriculture, A
horticulture, animal husbandry, apiculture, pisciculture, or
forest as specified in the Schedule;
(b) to (f) xxxx )()()()( )()()()(
(g) "Market" means a market established under Section B
4;
(h) "market area" means the area for which a market is
established under Section 4;
c
(i) "market committee" means a committee constituted
under Section 11;
0) xxxx xxxx )()()()(
(k) "market proper" in relation to a market yard means an 1)
area declared to be a market proper under clause (b) of
sub-section (2) of Section 5;
(I) "market yard or sub-market yard" in relation to a market
area means a specified place declared to be a market
yard or sub-market yard under clause (a) of sub-section E
(2) of Section 5;
(m) ~o (p) xxxx xxxx )()()()(
3. Notification of intention of regulating marketing of F
notified agricultural produce in specified area.-(1) Upon
a representation made by local authority or by the growers
of any agricultural produce within the area for which a
market is proposed to be established or otherwise, the
State Government may, by notification, and in such other G
manner as may be prescribed, declare its intention to
establish a market for regulating the purchase and sale of
agricultural produce in such area as may be specified in
the notification.
H
442 SUPREME COURT REPORTS [2012] 10 S.C.R.
A (2) A notification under sub-section (1) shall state that any
objection or suggestion which may be received by the
State Government within a period of not less than one
month to be specified in the notification shall be
considered by the State Government.
B
4. Establishment of market and of regulation of marketing
of notified agricultural produce therein.- After the expiry
of the period specified in the notification issued under
Section 3 and after considering such objections and
suggestions, as may be received before such expiry and
c making such inquiry, if any, as may be necessary, the State
Government may, by another notification, establish a
market for the area specified in the notification under
Section 3 or any portion thereof for the purpose of this Act
in respect of the agricultural produce specified in the
D Schedule and the market so established shall be known
by the name as may be specified in that notification.
5. Market yard and market proper.- (l)(a) In every
market area,-
E
(i) there shall be a market yard; and
(ii) there may be more than one sub-market yards;
F (b) for every market yard or sub-market yard there shall be
a market proper.
(2) The State Government shall, as soon as may be, after
the issue of notification under Section 4, by notification,-
G (a) declare any specified place including any structure,
enclosure, open place, or locality in the market area to be
a market yard or sub-market yard, as the case may be;
and
H (b) declare in relation to such market yard or sub-market
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 443
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
yard as the case may be, any specified area in the market A
area to be a market proper.
7. Establishment of Market Committee and its
incorporation. -
(1) For every market area, there shall be a Market B
Committee having jurisdiction over the entire market area.
(2) Every Market Committee shall be a body corporate by
the name specified in the notification under Section 4. It
shall have perpetual succession and a common seal and c
may sue and be sued in its corporate name and shall
subject to such restrictions as are imposed by or under this
Act, be competent to contract and to acquire, hold, lease,
sell or otherwise transfer any property and to do all other
things necessary for the purposes of this Act: D
Provided that no immovable property shall be acquired
without the prior permission of the Managing Director in
writing;
Provided further that no immovable property shall be E
transferred by way of sale, lease or otherwise in a manner
other than the manner prescribed in the rules made by the
State Government for the purpose.
(3) Notwithstanding anything contained in any enactment F
for the time being in force, every Market Committee shall,
for all purposes, be deemed to be a local authority.
19. Power to levy market fee.- (1) Every Market Commit-
tee shall levy market fee,-
G
(i) on the sale of notified agricultural produce whether
brought from within the State or from outside the
Stateinto the market area; and
{ii) on the notified agricultural produce whether brought H
444 SUPREME COURT REPORTS [2012] 10 S.C.R.
A from within the State or from outside the State
into themarket areas and used for processing;
at such rates as may be fixed by the State Government
from time to time subject to a minimum rate of fifty paise
and a maximum of two rupees for every one hundred
B
rupees of the price in the manner prescribed:
Provided that no Market Committee other than the one in
whose market area the notified agricultural produce is
brought for sale or processing by an agriculturist or trader,
c as the case may be, for the first time shall levy such market
fee.
(2) The market fees shall be payable by the buyer of the
notified agricultural produce and shall not be deducted from
D the price payable to the seller:
Provided that where the buyer of a notified agricultural
produce cannot be identified, all the fees shall be payable
by the person who may have sold or brought the produce
for sale in the market area:
E
Provided further that in case of commercial transaction
between traders in the market area, the market fees shall
be collected and paid by the seller:
Provided also that no fees shall be levied upto 31st March,
F 1990 on such agricultural produce as may be specified by
the State Government by notification in this behalf if such
produce has been sold outside the market yard or sub-
market yard by an agriculturist to a co-operative society
of which he is a member:
G
Provided also that for the agricultural produce brought in
the market area for commercial transaction or for
processing the market fee shall be deposited by the buyer
or processor as the case may be, in the Market
H Committee office within fourteen days if the buyer or
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 445
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
processor has not submitted the permit issued under sub- A
section (6) of Section 19.
(3) to (5) )()()()( )()()()( )()()()(
(6) No notified agricultural produce shall be removed out
of the market yard, market proper or the market area as 8
the case may be, except in accordance with a permit
issued by the Market Committee, in such form and in such
manner as may be prescribed by the bye-laws:
Provided that if any person removes or transports the c
processed product of notified agricultural produce from the
market yard, market proper or the market area, as the case
may be, such person shall carry with him the bill or cash
memorandum issued under Section 43 of the Madhya
Pradesh Vanijyik Kar Adhiniyam, 1994 {No. 5 of 1995). D
(7) )()()()( )()()()( )()()()(
31. Regulation of persons operating in market area.- No
person shall, in respect of any notified agricultural produce,
operate in the market area as commission agent, trader, E
broker, weighman, hammal, surveyor, warehouseman,
owner or occupier of processing or pressing factories or
such other market functionary except in accordance with
the provisions of this Act and the rules and bye-laws made
thereunder. F
32. Power to grant licences.- (1) Every person specified
in Section 31 who desires to operate in the market area
shall apply to the Market Committee for grant of a licence
or renewal thereof in such manner and within such period G
as may be prescribed by bye-laws.
(2) to (5) xxxx )()()()( )()()()(
36. Sale of notified agricultural produce in markets.- (1)
All notified agricultural produce brought into the market H
446 SUPREME COURT REPORTS [2012) 10 S.C.R.
A proper for sale shall, subject to the provisions of sub-
section (2), be sold in the market yard/yards specified for
such produce or at such other place as provided in the bye-
laws:
Provided that it shall not be necessary to bring agricultural
8
produce under contract farming, in the market yard and it
shall be sold at any other place to the person agreed to
purchase the same under agreement.
(2) Such notified agricultural produce as may be purchased
c by the licensed traders from outside the market area in the
course of commercial transaction may be brought and sold
anywhere in market area in accordance with the provisions
of the bye-laws.
D (3) The price of the notified agricultural produce brought
into the market yard for sale shall be settled by tender bid
or open auction system and no deduction shall be made
from the agreed price on any account whatsoever:
Provided that in the market yard the price of such notified
E agricultural produce of which support price has been
declared by the State Government, shall not be settled
below the price so declared and no bid shall be permitted
to start, in the market yard, below the rate so fixed.
F (4) Weighment or measurement of all the notified agricul-
tural produce so purchased shall be done by such person
and by such procedure as may be provided in the bye-laws
or any other place specified by the Market Committee for
the purpose:
G Provided that the weighment, measurement or counting as
the case may be, of Plantain, Papaya or any other
perishable agricultural produce as may be specified by the
State Government, by notification, shall be done by a
licensed weighman in the place where such produce has
H been grown.
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 447
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.)
37. Conditions of buying and selling.- (1) Any person who A
buys notified agricultural produce in the market area shall
execute an agreement in triplicate in such form as may be
prescribed, in favour of the seller. One copy of the
agreement shall be kept by the buyer, one copy shall be
supplied to the seller and the remaining copy shall be kept B
in the record of the Market Committee.
(2) (a) The price of the agricultural produce bought in the
market yard shall be paid on the same day to the seller at
the market yard;
c
(b) In the case purchaser does not make payment under
clause (a), he shall be liable to make additional payment
at the rate of one percent per day of the total price of the
agricultural produce payable to the seller within five days;
D
(c) In case the purchaser does not make payment with
additional payment to the seller under clauses (a) and (b)
above within five days from the day of such purchase, his
licence shall be deemed to have been cancelled on the
sixth day and he or his relative shall not be granted any E
licence under this Act for a period of one year from the
date of such cancellation.
Explanation.- For the purpose of this clause "relative"
means the relative as specified in the explanation in clause
(a) of subsection (1) of Section 11. F
(3) No wholesale transaction of notified agricultural produce
shall be entered into directly by licensed traders with
producers of such produce except in the market yards or
such other place as provided in the bye-laws.
G
(4) to (5) xxxx xxxx
xxxx
38. Market Committee Fund.- (1) All moneys received by
a Market Committee shall be paid into a fund to be called, H
448 SUPREME COURT REPORTS [2012] 10 S.C.R.
A "The Market Committee Fund" and all expenditure incurred
by the Market Committee under or for the purposes of this
Act shall be defrayed out of the said fund. Any surplus
remaining with the Market Committee after such
expenditure has been met, shall be invested in such
B manner as may be prescribed:
Provided that all such sums of money received by the
Market Committee as security deposit, contributions to
Provident Fund or for payment in respect of any notified
agricultural produce, or charges payable to weighman,
c hammal and other functionaries shall not form part of
Market Committee Fund but shall be accounted for
separately.
(2) )()()()( )()()()( )()()()(
D
39. Application of Market Committee Fund.- Subject to
the provisions of Section 38, the Market Committee Fund
may be expended for the following purposes only, namely,-
(i) the acquisition of a site or sites for the market yards;
E
(ii) the maintenance and improvement of the market
yards;
(iii) the construction and repairs of buildings necessary
for the purposes of the market and for
F convenience orsafety of the persons using the
market yard;
(iv) the maintenance of standard weights and
measures;
G
(v) xxxx xxxx )()()()(
(vi) the payment of interest on the loans that may be
raised for the purpose of the market and provisions
of sinkingfund in respect of such loans;
H
KRISHI UPAJ MANDI SAMITI, ,NARSINGHPUR v. SHIV 449
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
(vii) the collection and dissemination or information A
relating to crops statistics and marketing of
agriculturalproduce;
(viii) (a) xxxx )()()()( )()()()(
(b) xxxx )()()()( )()()()(
B
(c) contribution to State Marketing Development Fund;
(d) meeting any expenditure for carrying out order of
the State Government and any other work entrusted
to Market Committee under any other Act;
c
(e) contribution to any scheme for increasing
agricultural production and scientific storage;
(f) for development of market area in the manner D
prescribed;
(g) to educate or promote and undertake sale of
agricultural inputs, for increasing production, with
the prior sanctionof Managing Director;
E
(gg) to undertake development of Haat Bazars for
marketing of agricultural produce;
(h) )()()()( )()()()( )()()()(
F
(ix) any other purpose whereon the expenditure of the
Market Committee Fund is in the public interest,
subject to the prior sanction of the State
Government.
43. State Marketing Development Fund.-(1) Every Market G
Committee shall pay on the 10th day of every month to the
Board at such percentage of its gross receipts comprising
of licence fees and market fees as the State Government
may, by notification, declare from time to time. The amount
so paid and collected shall be called "Madhya Pradesh H
450 SUPREME COURT REPORTS [2012) 10 S.C.R.
A State Marketing Development Fund".
(2) to (7) xxxx xxxx )()()()(
44. Purposes for which Madhya Pradesh State Market-
ing Development Fund shall be expended.- The Madhya
B Pradesh State Marketing Development Fund shall be
utilised by the Board for the following purposes, namely,-
(i) market survey and research, grading and
standardizationof agricultural produce and other
c allied subjects;
(ii) propaganda and publicity and extension serviceson
the matters relating to general improvement of
conditions of buying and selling of agricultural
produces;
D
(iii) (a) construction of minimum infrastructure as
prescribed by the Board in the market yard or sub-
market yard established for the first time and for
giving grant to the extent of two lakh rupees to
E defray the establishment expenses;
(b) giving aid to financially weak Market Committees
the State in the form of loans and or grants;
(c) loans to any Market Committee for development of
F market yard and/or sub-market yard, construction
of cold storage, godown or warehouses, distribution
of plant protection equipments and other purpose
as may be considered desirable;
G (iv) acquisition or constructions or hiring by lease or
otherwise of buildings or land for performing the
duties of the Board;
(v) xxxx xxxxxxxx
H (vi) )()()()( )()()()( )()()()(
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 451
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
(vii) better control of Market Committee; A
(viii) xxxx )()()()( )()()()(
(ix) imparting education in regulated marketing of
agricultural produce;
B
(x) training the agriculturists, officers and staff of the
Market Committees;
(x-a) provision of technical assistance to the Market
Committees in the preparation of site plans and estimates
of construction and in the preparation of project reports or C
master plans for development of market yard;
(x-b) xxxx )()()()( )()()()(
(x-c) marketing the sale of agricultural inputs for increasing 0
agricultural production in the market areas;
(x-d) development of Haat Bazars for marketing of agricul-
tural produce and construction of infrastructure for
facilitating the flow of notified agricultural produce in the
market area; E
(x-e) xxxx )()()()( )()()()(
(x-f) xxxx )()()()( )()()()(
(x-g) development of testing and communication F
infrastructure relevant to agriculture and allied sectors.
(xi) any other purposes of general interest to regulate
marketing of agricultural produce."
G
Analysis
14. The primary object of the Sugarcane Act is to ensure
adequate supply of cane to the factories and timely payment
of price to the cultivators. ·The Act contains comprehensive
provisions for making available sugarcane to the factories and H
452 SUPREME COURT REPORTS [2012] 10 S.C.R.
A protection of the rights of Cane Growers to get adequate
remuneration for their labour. Under Section 15, the
Commissioner is empowered to declare any area to be
reserved for any particular factory and once such declaration
is made, the occupier of the factory is bound to purchase cane
B grown in that area which is offered for sale to the factory.
Likewise, under Section 16, the Commissioner can make a
declaration that any area shall be an assigned area for the
purpose of supply of cane to a factory and, in that event, the
factory is required to purchase the specified quantity of cane
C grown in that area. For achieving the object of maintaining
supplies, the State Government can pass an order under
Section 19 for regulating distribution, sale or purchase of cane
in any reserved or assigned area; and purchase of cane in any
area other than a reserved or assigned area. In such an order,
the State Government can specify the quantity of cane to be
D supplied by each Cane Grower or Cane-Growers' Co-operative
Society to the factory for which the particular area has been
reserved or assigned, the manner of purchase by the factory,
details of the sale agreements and grant of permission for sale
and purchase. Section 20 mandates that payment for the cane
E shall be made by the occupier immediately upon delivery and
only such deductions as authorised in lieu of loans can be
made. The Development Council established under Section
5(1) has been assigned various functions enumerated in
Section 6 for ensuring proper development of the zone. The
F Development Council is required to devise ways and means
for the execution of the development plan which includes cane
varieties, cane-seed, sowing programme, fertilizer and manure;
development of irrigation and other agricultural facilities;
prevention and control of diseases and pests, soil extension
G work and training to cultivators in matters relating to the
production of sugarcane. One of the components of the fund
required for the Council is the commission received by it under
Section 21 from the occupiers of the factory for every maund
of cane purchased. The rules framed under Section 30 of the
H Sugarcane Act help in achieving the objectives of the Act Rule
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 453
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
35 mandates the occupier to provide facilities for weighment A
at the purchasing centre so that there is no congestion and
undue delay in weighment. Rule 36 requires that the occupier
should provide metalled approaches and exits to the parking
area in the factory and shelter and drinking water at the
purchasing centres. Rules 40, 41 and 43 ensure payment of B
the price of cane by the occupier to the factory or the purchasing
agent without any deduction.
15. The Control Order deals with the fixation of minimum
price of sugarcane to Cane Growers or Cane Growers' Co-
operative Societies. Clause 3(1) of the Control Order C
empowers the Central Government to fix the minimum price of
sugarcane to be paid by the producers of sugar or their agents
for the sugarcane purchased by them. For this purpose, the
Central Government is required to take into account the cost
of production of sugarcane; return to the grower from alternative D
crop and the general trend of prices of agricultural
commodities; the availability of sugar to the consumers at a fair
price; the price at which sugar is sold by producers of sugar;
and the recovery of sugar from sugarcane. Clause 3(2)
mandates that no person shall sell or agree to sell sugarcane E
and no producer or his agent shall purchase or agree to
purchase sugarcane at a price lower than the minimum price.
Clauses 3(3) and (3-A) mandate payment of the price of cane
within 14 days from the date of delivery and levy interest at the
rate of 15% per annum for the period of delay beyond 14 days. F
16. The Market Act was enacted to regulate the
transactions involving the sale and purchase of agricultural
produce with the aim of preventing exploitation of the
agriculturists and the establishment and proper administration G
of markets of agricultural produce in the State. Section 4 read
with Section 3 provides for the establishment of a market for
the area specified in the notification issued under Section 3 for
regulating the purchase and sale of agricultural produce in such
area. Once a market is established for the particular area, the H
454 SUPREME COURT REPORTS [2012) 10 S.C.R.
A prohibition contained in Section 6(a) and (b) against the setting
up, establishment, continuance or use of any place in the market
area for the marketing of any notified agricultural produce
comes into play and no person can use any place in the market
area for the marketing of the notified agricultural produce or
B operate in the market area as a market functionary. Proviso to
this section carves out certain exceptions regarding the sale
or purchase of agricultural produce not exceeding four quintals
at a time for domestic consumption, etc. Section 5(1)(a) read
with Section 5(2) lays down that in every market area there shall
c be a market yard and there may be more than one sub-market
yards. Section 5(1)(b) read with Section 5(2) declares that for
every market yard or sub-market yard there shall be a market
proper. In terms of Section 7(1 ), a Market Committee is
required to be established for every market area. Section 7(2)
declares that every Market Committee shall be a body
0
corporate. Section 7(3) contains a deeming provision by which
every Market Committee is treated as a local authority. Section
17 specifies the powers and duties of a Market Committee.
Section 19(1) casts a duty upon every Market Committee to
E levy market fee on the sale of notified agricultural produce
whether brought from within the State or from outside the State
into the market area and on the notified agricultural produce
whether brought from within the State or from outside the State
into the market area and used for processing. Under Section
19(2), the market fee is payable by the buyer of such produce
F and is not to be deducted from the price payable to the seller.
It is only if the buyer of the produce cannot be identified that all
fees are payable by the seller or by the person who brought
the produce for sale in the market area, provided further that
in case of a commercial transaction between traders in the
G market area, the market fees are to be collected and paid by
the seller. Section 19(6) provides that no notified agricultural
produce shall be removed out of the market yard, market proper
or the market area except in accordance with a permit issued
by the Market Committee. Section 32 empowers the Market
H Committee to grant licence to any person who desires to
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 455
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
operate in the market area. Section 36(1) provides that all A
notified produce brought into the market proper for sale shall
be sold in the market yard/yards specified for such produce.
Proviso to this Section, which was added by MP Act No. 15 of
2003, carves out an exception in respect of agricultural produce
under contract farming and lays down that it shall not be B
necessary to bring such produce in the market yard and it can
be sold at any other place to the person who has agreed to
purchase the same under an agreement. Section 36(2) carves
out another exception and lays down that the produce
purchased from outside the market area by licenced traders c
in the course of a commercial transaction may be bought and
sold anywhere in the market area in accordance with the bye-
laws. Section 36(3) lays down that the price of the notified
agricultural produce brought into the market yard for sale shall
be settled by tender bid or open auction system and no
0
deduction shall be made from the agreed price on any account
whatsoever. Proviso to this sub-section lays down that where
support price of any notified agricultural produce has been
declared by the State Government, the price shall not be settled
below the support price and no bid shall be permitted below
such price. Section 36(4) provides for weighment or E
measurement of the notified agricultural produce purchased
under other sub-sections of this section. Section 37(1)
mandates execution of an agreement by any person who buys
agricultural produce in the market area. In terms of Section
37(2)(a), the price of the agricultural produce bought in the F
market yard is required to be paid on the same day to the seller
at the market yard. If the purchaser fails to make payment in
accordance with Section 37(2)(a), then he has to make
additional payment at the rate of 1% per day of the total price
of the agricultural produce. In case of further delay of more than G
5 days, his licence stands cancelled with a bar on grant of
further licence to him or his relative. Section 38(1) provides that
all monies received by a Market Committee including market
fee shall be paid into "the Market Committee Fund", which is
to be utilized for the purposes specified in Section 39 which H
456 SUPREME COURT REPORTS [2012] 10 S.C.R.
A include, the acquisition of a site or sites for the market yards;
the maintenance and improvement of the market yards; the
construction and repairs of buildings of the market; the
maintenance of standard weights and measures; contribution
to any scheme for increasing agricultural production and
B scientific storage; development of market area in the manner
prescribed and development of Haat Bazars for agricultural
produce. In terms of Section 43(1), every Market Committee
is required to pay to the State Agricultural Marketing Board a
specified percentage of its gross receipts comprising of licence
c fee or market fee, as may be notified by the State Government.
This amount is called Madhya Pradesh State Marketing
Development Fund and is to be used for the purposes specified
in Section 44, which include, market survey and research,
grading and standardization of agricultural produce and other
allied subjects; construction of minimum infrastructure in the
0
market yard or sub-market yard established for the first time;
grant of loan to Market Committees for development of market
yard/sub-market yard; construction of cold storage, godown or
warehouses, distribution of plant protection equipments;
E acquisition or construction or hiring by lease or otherwise of
buildings or land for the Board; imparting education in
regulated marketing of agricultural produce; training the
agriculturists, officers and staff of the Market Committees;
provision of technical assistance to the Market Committees in
the preparation of site plans and estimates of construction and
F in the preparation of project reports/master plan for
development of market yard; development of Haat Bazars for
marketing of agricultural produce; construction of infrastructure
for facilitating the flow of notified agricultural produce in the
market area; and development of testing and communication
G infrastructure relevant to agricultural and allied sectors.
17. The above analysis of the provisions of the Sugarcane
Act and the Control Order along with the Market Act brings to
fore the conflict between the three statutes insofar as they relate
H to the transactions involving sale of sugarcane by Cane
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 457
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
Growers I Cane Growers' Co-operative Societies to the A
occupiers of factories. While the Sugarcane Act and the Rules
framed thereunder constitute a complete code for regulating the
supply of sugarcane by Cane Growers and Cane Growers' Co-
operative Societies to the occupiers of the factories at the
purchasing centres established and maintained by them and B
payment of price without delay, the Market Act regulates sale
and purchase of notified agricultural produce in the market
yards specified for the particular produce or at other places
provided in the bye-laws and mandates that the price of the
notified agricultural produce should be settled by tender bid or c
open auction system. (Sugarcane was included in the Schedule
w.e.f. 7.6.1979 by M.P.Act No.18/1997). The Control Order not
only lays down the mechanism for determination of the minimum
price of sugarcane payable by the producers of sugar or their
agents for the sugarcane purchased by them, but also
0
prescribes the mode of payment of the price. The Sugarcane
Act and the Rules framed thereunder also prescribe the mode
of payment of the price by the occupier of the factory. Likewise,
the Market Act contains provisions for payment of the price of
the notified agricultural produce brought into the market yard
E
for sale. It is thus evident that so far as sugarcane is concerned,
there is direct conflict between the provisions of the Sugarcane
Act and the Market Act both, in matters relating to sale and
purchase of sugarcane, and, payment of price. Likewise, there
is conflict between the Control Order and the Market Act in the
matter of determination of price of the sugarcane and mode of F
payment.
18. The argument of Shri Tankha and Shri Banthia that the
Sugarcane Act and the Control Order are silent on the issue
of levy of market fee on transactions involving the purchase of G
sugarcane by the factories within the market areas and,
therefore, the provisions contained in Sections 19 and 36 of
the Market Act would prevail and the High Court committed an
error by applying the ratio of the judgment in Belsund Sugar
Co. Ltd. v. State of Bihar (supra) sounds attractive, but we have H
458 SUPREME COURT REPORTS [2012) 10 S.C.R.
A not felt persuaded to agree with them because the Sugarcane
Act is a special statute enacted for regulating the supply and
purchase of sugarcane to the factories and covers the entire
spectrum of the transactions involving sale and purchase of
sugarcane. The Sugarcane Act and the Rules framed
B thereunder cast a duty on the occupier of the factory to provide
amenities and facilities for supply of cane at the purchasing
centres from factory premises and pay the price of cane without
any tangible delay. The occupier is also obliged to pay
commission under Section 21 which becomes part of the
c Council Fund and is utilised for overall development of the
production of sugarcane by providing better varieties of seeds,
fertilizers and manures, devising appropriate sowing
programme, improving irrigation and other facilities and taking
steps for prevention and control of diseases and pesticides.
The Council Fund is also to be invested for imparting technical
0
training to cultivators in matters relating to the production of
cane. The mechanism for fixing the minimum price of cane is
contained in Clause 3 of the Control Order and the mode of
payment of the price is contained both in the Sugarcane Act
and the Control Order. The Market Act contains a
E comprehensive mechanism for establishment of market area
and Market Committee having jurisdiction over such area,
market yard/sub-market yard and market proper. Section 19
which obligates every Market Committee to levy market fee,
which is payable by the producer on the sale of notified
F agricultural produce finds place in Chapter IV (Conduct of
Business and Powers and Duties of Market Committee).
Proviso to sub-section (2) thereof also postulates payment I
collection of market fee from the seller in certain contingencies.
The sale of notified agricultural produce in the markets is,.
G governed by Section 36 which finds place in Chapter VI of the!
Market Act (Regulation of Trading). That section mandates that•
all notified agricultural produce brought into the market proper ·
for sale shall be sold in the market yard/yards specified for such
produce or at such other places as provided in the bye-laws.
H Sub-section (3) of Section 36 contains the mechanism for
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 459
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
determination of price on notified agricultural produce brought A
for sale into the market yard by tender bid or open auction.
Section 37(2) provides for payment of price of the agricultural
produce on the same day but only in relation to the produce
bought in the market yard. These provisions are irreconcilable
with those contained in Section 19 read with Sections 15 and B
16 of the Sugarcane Act and Clause 3 of the Control Order.
Sections 38 and 43 of the Market Act talk of 'Market Committee
Fund' and 'State Marketing Development Fund' which are to
be used for overall development of market areas. The benefit
of development of market areas and other activities undertaken c
by the Market Committees and the State Marketing Board is
available to all the agriculturists who sell their produce in the
market yards/sub-market yards and buyers of such produce in
accordance with Section 36 of the Market Act and no special
facility is provided to the Cane Growers and the occupiers of D
the factories who purchase sugarcane at the purchasing centres
or within the factory premises. Rather, the Development Council
constituted under Section 5 .of the Sugarcane Act is required
to spend funds, which include the commission paid by the
occupier for every maund of cane purchased by the factory on E
overall development of the zone and take measures for
improvement of the production of sugarcane by ensuring supply
of quality seeds, fertilizer and manure to the Cane Growers and
improving the soil quality and irrigation facilities. Therefore, even
though the Market Act is a subsequent legislation and one of
its objectives is to regulate buying and selling of agricultural F
produce including sugarcane, the general provisions contained
therein cannot.prevail over the Sugarcane Act and the Control
Order, which are special legislations exclusively dealing with
issues relating to increase in the production of sugarcane,
supply of sugarcane by Cane Growers/Cane Growers G
Cooperative Societies to the factories from any reserved or
assigned area or otherwise and payment of the price of cane
by the occupier of the factory.
19. Though, there is no significant difference in the Control H
460 SUPREME COURT REPORTS [2012] 10 S.C.R.
A Order and the Market Act insofar as the mode of payment of
the price of sugarcane is concerned, but the mechanism
enshrined in the two statutes for determination of price is vastly
different. The Control Order envisages fixation of the minimum
price of sugarcane by the Central Government after considering
B the factors enumerated in Clause 3 and consulting such
authorities, bodies or associations as it may think fit and the
producer of sugar is bound to pay at least that price to Cane
Growers/Cane Growers Cooperative Societies. As against
this, the Market Act postulates determination of the price of the
C notified agricultural produce (sugarcane is only one of such
produce) brought into the market yard for sale under Section
36(3) by tender bid or open auction. In that exercise, the State
Government/the concerned Market Committee does not have
any role to play. Of course, such price cannot be less than the
support price declared by the State Government. This
0
difference also indicates that the Control Order is a special
legislation vis-a-vis the Market Act.
20. We shall now deal with two of the many judgments
relied upon by the learned counsel for the parties. In Belsund
E Sugar Co. Ltd v. State of Bihar(supra), the Constitution Bench
considered the legality of levy of market fee under the Bihar
Agricultural Produce Markets Act, 1960 on the transactions
relating to sale and purchase of sugarcane by the sugar
factories. The Constitution Bench first considered Entries 26,
F 27, 28 and 33 of List 11 of the Seventh Schedule of the
Constitution and observed:
"In the first instance, we shall deal with the ·transactions of
purchase of sugarcane by the sugar factories functioning
in the market areas falling within the jurisdiction of
G
respective Market Committees constituted under the
Market Act. The Market Act has been enacted by the Bihar
Legislature as per the legislative power vested in it by
Entries 26, 27 and 28 of List II of the Seventh Schedule of
the Constitution. These entries read as under:
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. 461
SHIV SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
"26. Trade and commerce within the State subject to the A
provisions of Entry 33 of List Ill.
27. Production, supply and distribution of goods subject
to the provisions of Entry 33 of List Ill.
28. Markets and fairs." B
It becomes at once clear that if location of markets and
fairs simpliciter and the management and maintenance
thereof are only contemplated by the Market Act, then they
would fall squarely within the topic of legislative power C
envisaged by Entry 28 of List II. However, the Market Act,
as we will presently show, deals with supply and
distribution of goods as well as trade and commerce
therein as it seeks to regulate the sale and purchase of
agricultural produce to be carried on in the specified D
markets under the Act. To that extent the provisions of
Entry 33 of List Ill override the legislative powers of the
State Legislature in connection with legislations dealing
with trade and commerce in, and the production, supply
and distribution of, goods. Once we turn to Entry 33 ofthe E
Concurrent List, we find that on the topic of trade and
commerce in, and the production, supply and distribution
of, goods enumerated therein at sub-clause (b), we find
listed items of foodstuffs, including edible oilseeds and
oils. Thus to the extent to which the Market Act seeks to F
regulate the transactions of sale and purchase of
sugarcane and sugar which are foodstuffs and trade and
commerce therein, it has to be held that the Market Act
being enacted under the topics of legislative powers under
Entries 26, 27 and 28 of List II will be subject to any other
legislation under Entry 33 of the Concurrent List. As it will G
be seen hereinafter, the Bihar Legislature itself has
enacted the Sugarcane Act in exercise of its legislative
powers under Entry 33 of the Concurrent List and,
therefore, the field covered by the Sugarcane Act would
H
462 SUPREME COURT REPORTS [2012] 10 S.C.R.
A obviously remain exclusively governed by the Sugarcane
Act and to the extent the latter Act carves out an
independent field for its operation, the sweep of the
general field covered by the Market Act which covers all
types of agricultural produce, would pro tanto get excluded
B qua sugarcane and the products prepared out of it."
The Constitution Bench then took congnizance of the fact
that the Bihar Sugarcane Act, 1981 was a later enactment,
referred to the provisions of that Act and proceeded to observe:
c "The aforesaid provisions of the Sugarcane Act leave no
room for doubt that the Bihar Legislature in its wisdom has
enacted a special machinery for regulating the purchase
and sale of sugarcane to be supplied to sugar factories
for manufacturing sugar out of the sugarcane produced for
D them in the reserved area. The relevant provisions of the
Act project a well-knit and exhaustive machinery for
regulating the production, purchase and sale of sugarcane
for being supplied as appropriate raw material to the
factories manufacturing sugar and molasses out of them.
E
The aforesaid provisions, therefore, clearly indicate that the
need for regulating the purchase, sale, storage and
processing of sugarcane, being an "agricultural produce",
is completely met by the comprehensive machinery
provided by the Sugarcane Act enacted by the very same
F legislature which enacted the general Act being the Market
Act.
Once that conclusion is reached, it becomes obvious that
the Market Act which is an enabling Act empowering the
G State authorities to extend the regulatory net of the said
Act to notified agricultural produce as per Section 3(1} will
get its general sweep curtailed to the extent the special
Act being the Sugarcane Act enacted by the very same
legislature carves out a special field and provides special
H machinery for regulating the purchase and sale of the
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 463
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
specified "agricultural produce", namely, sugarcane. It has A
also to be kept in view that the very heart of the Market
Act is Section 15 of the Act which reads as under:
"15. Sale of agricultural produce.-(1) No agricultural
produce specified in notification under sub-section (1) of
8
Section 4, shall be made, bought or sold by any person at
any place within the market area other than the relevant
principal market yard or sub-market yard or yards
established therein, except such quantity as may on this
behalf be prescribed for retail sale or personal C
consumption.
(2) The sale and purchase of such agricultural
produce in such areas shall notwithstanding anything
contained in any law be made by means of open auction
or tender system except in cases of such class or D
description of produce as may be exempted by the
Board."
It is this section which enables the Market Committee
concerned to monitor and regulate the sale and purchase E
of the agricultural commodity which is covered by the
protective umbrella of the Act. Once such an agricultural
produce is brought for sale in the market yard or sub-
market yard, the sale is to be effected by auction or by
inviting tenders. Such a scheme is in direct conflict with F
the scheme of the Sugarcane Act wherein there is no
question of a sugar factory being called upon to enter into
a public auction for purchasing sugarcane which is
specially earmarked for it out of the reserved area. In fact,
the provisions of the Sugarcane Act and the provisions of
the Market Act, especially Section 15 read with Section G
3(1), cannot harmoniously coexist."
After further discussion, the Court observed:
"It must, therefore, be held that the entire machinery of the H
464 SUPREME COURT REPORTS [2012] 10 S.C.R.
A Market Act cannot apply to the transactions of purchase
of sugarcane by the appellant Sugar Factories as they are
fully covered by the special provisions of the Sugarcane
Act. It is also necessary to note that if both these Acts are
treated to be simultaneously applying to cover sale and
B purchase of sugarcane, the possibility of a clear conflict
of decisions of officers and authorities acting under the
Sugarcane Act on the one hand and the Market Act on the
other would arise. These authorities acting under both the
State Acts, dealing with the same subject-matter and
c covering the same transactions may come to independent
diverse conclusions and none of them being subordinate
to the other may create a situation wherein there may be
a head-on collision between the decisions and the orders
of these authorities acting on their own in the hierarchy of
the respective statutory provisions. For example, the
D
Marketing Inspector may find that weighment of sugarcane
was not proper at a given point of time, while the Cane
Officer may find to the contrary. In the hierarchy of
proceedings under the Market Act the Market Committee
may take one decision with respect to the same subject-
E matter, for which the Collector exercising appellate powers
under the Sugarcane Act may take a contrary decision.
This would create an irreconcilable conflict of decisions
with consequential confusion. So far as the buyers and
sellers of "agricultural produce - sugarcane" are
F concerned, it is of no avail to contend as submitted by
learned counsel for the respondents that for avoiding such
conflicts, Section 15 is dispensed with by the State in
exercise of its power under Section 42 of the Market Act,
whether such an exemption can be granted by the State
G under Section 42 or not is not a relevant consideration for
deciding the moot question whether the statutory scheme
of the Market Act can harmoniously coexist with the
statutory scheme of the Sugarcane Act as enacted by the
very same legislature. It is possible to visualise that the
H State authorities may not exercise powers under Section
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 465
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
42 of the Act. In such an eventuality, the Sugarcane Act A
would not countenance a public auction of sugarcane to
be supplied by the cane-grower to the earmarked factory
for which sugarcane is grown in the reserved area. On the
other hand, the Market Act would require the very same
sugarcane to be brought to the market yard for being sold B
at the public auction to the highest bidder who may not be
the sugar factory itself. Thus what is reserved for the sugar
factory by way of raw material by the Sugarcane Act would
get dereserved by the sweep of Section 15 of the Market
Act. To avoid such a head-on conflict, it has to be held that c
the Market Act is a general Act covering all types of
agricultural produce listed in the Schedule to the Act, but
out of the listed items if any of the "agricultural produce"
like sugarcane is made the subject-matter of a special
enactment laying down an independent exclusive 0
machinery for regulating sale, purchase and st'lrage of
such a commodity under a special Act, then the special
Act would prevail over the general Act for that commodity
and by nece~sary implication will take the said commodity
out of the sweep of the general Act. Therefore, learned
counsel for the appellants are right when they submit that E
because of the Sugarcane Act the regulation of sale and
purchase of sugarcane has to be carried out exclusively
under the Sugarcane Act and the said transactions would
be out of the general sweep of the Market Act. None of its
machinery would be available to regulate these F
transactions."
The Constitution Bench also considered the provisions of
the Control Order and observed:
G
"It has to be appreciated that the aforesaid provisions of
the Sugarcane (Control) Order operate in the same field
in which the Bihar legislative enactment, namely, the
Sugarcane Act operates and both of them are
complementary to each other. When taken together, they H
466 SUPREME COURT REPORTS [2012] 10 S.C.R.
A wholly occupy the field of regulation of price of sugarcane
and also the mode and manner in which sugarcane has
to be supplied and distributed to the earmarked sugar
factories and thus lay down a comprehensive scheme of
regulating purchase and sale of sugarcane to be supplied
B by sugarcane-growers to the earmarked sugar factories.
It is, however, true that a comprehensive procedure or
machinery for enforcing these provisions is found in greater
detail in the Sugarcane Act of the Bihar Legislature. But
on a combined operation of both these provisions, it
c becomes at once clear that the general provisions of the
Market Act so far as the regulation of sale and purchase
of sugarcane is concerned get obviously excluded and
superseded by these special provisions."
21. In H.S. Jayanna v. State of Kamataka (supra), the
D appellants had challenged the levy of market fee on rice by the
Marketing Committees constituted under the Karnataka
Agricultural Produce Marketing (Regulation) Act, 1966 on the
ground that the provisions of the Act are repugnant to those
contained in the Karnataka Rice Procurement (Levy) Order,
E 1984 framed under the Essential Commodities Act. The
learned Single Judge allowed the writ petitions filed by the
appellants but his order was reversed by the Division Bench.
Before this Court, reliance was placed on the judgment in
Belsund Sugar Co. Ltd. v. State of Bihar (supra) in support of
F the argument that the provisions of the State Act were
inconsistent with those contained in the Control Order. The two
Judge Bench extensively referred to the findings and
conclusions recorded in Belsund Sugar Co. Ltd. case (supra)
and proceeded to observe:
G
"We have no hesitation in concluding that the entire field
of regulating the purchase and sale of paddy or the rice
produced out of paddy is not covered under the Control
Order. The provisions of the Marketing Act do not trench
up the field covered by the Control Order. There is no
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 467
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
inconsistency between the Control Order and the Marketing A
Act. They do not cover the same field and therefore the
question of any inconsistency, repugnancy or the Marketing
Act being ineffectual in terms of Section 6 of the Essential
Commodities Act in view of the Control Order issued under
Section 3 of the Essential Commodities Act would not B
arise. The Control Order deals with the compulsory
acquisition of 1/3rd of rice of each variety produced by a
miller at a purchase price fixed by the Government. It
requires the miller to supply to the Government or its
purchase agent and deliver the procured rice at a notified c
place. It does not deal with the sale and purchase of the
remaining 2/3rd rice except that the miller is not permitted
to remove the stock of rice from the mill premises without
delivery of rice to the Government or its purchase agent
and without obtaining a release certificate required to be
0
taken under clause 8 of the said Order. It does not deal
with the marketing or the facilities to be provided to the
grower, seller and purchaser of paddy in the market area
or to the seller or purchaser of rice. The Control Order is
thus limited in operation. The Marketing Act provides for E
the regulation of marketing of agricultural produce (which
rice is) and the establishment and administration of
markets for agricultural produce and matters connected
therewith in the State of Karnataka. The Marketing Act
deals with the entire gamut of marketing of agricultural
produce starting from the establishment of the Market F
Committees, markets, declaration of market area, market
yard, market sub-yard, regulation of marketing of
specified agricultural produce therein and for obtaining
a licence under the Act, the process of appointing/electing
the Market Committees, the powers and duties of the G
Market Committee [Section 63(1)], the facilities to be
provided by the Market Committee [Section 63(2)] and
the levy of market fee (Section 65). The Marketing Act
does not deal with any of the provisions made in the Control
Order. The Control Order and the Marketing Act do deal H
468 SUPREME COURT REPORTS [2012] 10 S.C.R.
A with the same subject but do not cover the same field.
There is no conflict between them. They do not occupy
the same field."
(emphasis supplied)
B 22. In our view, the above extracted observations do not
help the appellants. Rather, they support the conclusion
recorded by us that the entire field of the sale and purchase of
sugarcane is covered by the Sugarcane Act and the Control
Order, which are special legislations and the provisions
C contained in the Market Act, which generally deal with sale and
purchase of agricultural produce specified in the Schedule
cannot be invoked for compelling the occupier of a factory
engaged in the manufacture of sugar to take licence under
Section 31 read with Section 32 and pay market fee in terms
D of Section 19 thereof because the same are in direct conflict
with the provisions contained in the Sugarcane Act and the
Control Order.
23. The argument of the learned senior counsel appearing
E for the appellants that the provisions of the Control Order cannot
prevail over the Market Act because the same was enforced
after receiving Presidential assent merits rejection. The reasons
for this conclusion of ours are:
(i) In the counter filed before the High Court, no such plea
F was raised and no document was produced to show that
the Market Act was reserved for Presidential Assent on
the ground that the provisions contained therein are in
conflict with those contained in the Control Order.
G (ii) It was not argued before the High Court that the
President had been apprised of the conflict between the
Control Order and the Market Act and he accorded assent
after considering this fact.
(iii) It also deserves to be mentioned that during the course
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 469
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
of hearing, this Court had after taking cognizance of the A
aforesaid argument, directed Shri B. S. Banthia, learned
counsel for the State of Madhya Pradesh to produce the
record to show as to in what context the Market Act was
reserved for Presidential assent. After the judgment was
reserved, Shri Banthia handed over an envelope B
containing File No.17/62/73-Judicial of the Ministry of
Home Affairs, perusal of which reveals that the request of
the State Government for Presidential assent was
processed by the Ministry of Home Affairs. In the first
instance, the Departments of Agriculture, Food and Internal c
Trade as also the Planning Commission were asked to
offer their comments. The Department of Agriculture
conveyed no-objection but wanted its suggestions to be
incorporated in the Bill. The others did not offer any
comment. Thereafter, the Joint Secretary (Home) recorded D
a note that the suggestions given by the Agriculture
Department will be sent to the State Government for
consideration. He also prepared the following summary for
consideration of the President:
"SUMMARY E
The Madhya Pradesh Krishi Upaj Mandi Vidheyak, 1972.
The Madhya Pradesh Agricultural Produce Markets Act,
1960 has been in force in the State since October, 1960.
During the operation of the Act for the last twelve years,
F
the number of agricultural market committees has risen
from 87 to 230. The working of the Act has revealed
certain shortcomings and it was considered desirable by
the State Government to review the Act in order to ensure
efficient working of the market committees to the best G
advantage of the agriculturists as well as traders. A
committee was constituted by the State Government for the
purpose and the committee recommended revision of the
Act of 1960. Hence the State Government have got passed
the present Bill. H
470 SUPREME COURT REPORTS [2012) 10 S.C.R.
A 2. The salient feature of the Bill are as follows:
(i) Establishment of markets for the specified areas
and of regulation of marketing of notified agricultural
produce therein.
B (ii) Establishment of market committee for every
market area and constitution of State Marketing
Service to secure efficient administration of market
committees.
c (iii) Constitution of the Madhya Pradesh State
Agricultural Marketing Board at the State level to
coordinate the work of market committees in the
State and to advise the State Government.
(iv) Election of Chairman of market committee from
D
amongst the representatives of agriculturists.
(v) Provision for deterrent punishment for resorting
to trade malpractices by market functionaries in the
market area.
E
3. Having regard to the provisions of article 31(3), 254(2)
and 304 of the Constitution of India, the Governor of
Madhya Pradesh has reserved the Bill for the
consideration and assent of the President.
F 4. The Department of Agriculture, Department of Food,
Planning Commission and the Department of Internal Trade
who were consulted have no objection to the assent of the
President being given to the Bill. The Department of
Agriculture have, however, suggested that the details of the
G composition of the State Marketing Board, which have not
been given in the Bill, should be specified in the Bill. This
suggestion will be communicated to the State Government.
The Ministry of Law who were consulted do not see any
objection to the assent of the President being given to the
H Bill from the legal and constitutional point of view.
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 471
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
Accordingly, if the Minister approves, the Bill may be A
recommended to the President for his assent.
(Sd/-)
(P.P. Nayyar)
Joint Secretary.•
B
24. From the summary reproduced hereinabove, it is clear
that the State Government had not reserved the Market Act for
Presidential assent on the ground of any repugnancy between
the provisions of that Act and the Control Order. As a matter
of fact, the State Government could not have even thought of C
any repugnancy between these statutes because at the relevant
time, sugarcane was not treated as an agricultural produce and
was not included in the Schedule appended to the Market Act.
25. The nature and scope of Presidential assent under
Article 254(2) of the Constitution was considered by the D
Constitution Bench in Gram Panchayat of Village Jamalpur v.
Ma/winder Singh (supra). In that case, it was argued that the
President's assent to Section 3(a) of the Punjab Village
Common Lands (Regulation) Act, 1953 would give it
precedence over the Administration of Evacuee Property Act, E
1950, which was enacted by Parliament. The Constitution
Bench held that the assent of the President under Article 254(2)
of the Constitution is not an empty formality and the President
has to be apprised of the reason why his assent was being
sought. The Constitution Bench further held that if the assent is F
sought for a specific purpose, the efficacy of assent would be
limited to that purpose and cannot be extended beyond it. The
relevant observations made on this issue are contained in Para
12, which is extracted below:
"12. The Punjab Act of 1953 was reserved for G
consideration of the President and received his assent on
December 26, 1953. Prima facie, by reason of the assent
of the President, the Punjab Act would prevail in the State
of Punjab over the Act of the Parliament and the
Panchayats would be at liberty to deal with the Shamlat- H
472 SUPREME COURT REPORTS [2012] 10 S.C.R.
A deh lands according to the relevant Rules or bye-laws
governing the matter, including the evacuee interest therein.
But, there is a complication of some nicety arising out of
the fact that the Punjab Act was reserved for the assent of
the President, though for the specific and limited purpose
8 of Articles 31 and 31-A of the Constitution. Article 31,
which was deleted by the Constitution (Forty-fourth
Amendment) Act, 1978 provided for compulsory
acquisition of property. Clause (3) of that article provided
that, no law referred to in clause (2), made by the
c Legislature of a State shall have effect unless such law,
having been reserved for the consideration of the
President, has received his assent. Article 31-A confers
protection upon laws falling within clauses (a) to (e) of that
article, provided that such laws, if made by a State
Legislature, have received the assent of the President.
D
Clause (a) of Article 31-A comprehends laws of agrarian
reform. Since the Punjab Act of 1953 extinguished all
private interests in Shamlat-deh lands and vested those
lands in the Village Panchayats and since, the Act was a
measure of agrarian reform, it was reserved for the
E consideration of the President. The judgment of the High
Court shows that the hearing of the writ petitions was
adjourned to enable the State Government to place
material before the Court showing the purpose for which
the Punjab Act of 1953 was forwarded to the President
F for his assent. The record shows, and it was not disputed
either before us or in the High Court, that the Act was not
reserved for the assent of the President on the ground
that it was repugnant to an earlier Act passed by the
Parliament, namely, the Central Act of 1950. In these
G circumstances, we agree with the High Court that the
Punjab Act of 1953 cannot be said to have been reserved
for the assent of the President within the meaning of
clause (2) of Article 254 of the Constitution insofar as its
repugnancy with the Central Act of 1950 is concerned.
H The assent of the President under Article 254(2) of the
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 473
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
Constitution is not a matter of idle formality. The A
President has, at least, to be apprised of the reason why
his assent is sought if, there is any special reason for
doing so. If the assent is sought and given in general
terms so as to be effective for all purposes, different
considerations may legitimately arise. But if, as in the B
instant case, the assent of the President is sought to the
Law for a specific purpose, the efficacy of the assent
would be limited ito that purpose and cannot be extended
beyond it. Not only was the President not apprised in the
instant case that his assent was sought because of the c
repugnancy between the State Act and the pre-existing
Central Act on the vesting of evacuee properties but, his
assent was sought for a different, specific purpose
altogether. Therefore, that assent cannot avail the State
Government for the purpose of according precedence to 0
the law made by the State Legislature, namely, the Punjab
Act of 1953, over the law made by the Parliament, even
within the jurisdiction of the State."
(emphasis supplied)
E
26. The proposition laid down in Gram Panchayat of
Village Jamalpur v. Ma/winder Singh (supra) was considered
by another Constitution Bench in Kaiser-I-Hind Pvt. Ltd. v.
National Textile Corporation (Maharashtra North) Ltd. (supra).
Speaking for the majority of the Court, Shah, J. observed: F
"In view of the aforesaid requirements, before obtaining the
assent of the President, the State Government has to point
out that the law made by the State Legislature is in respect
of one of the matters enumerated in the Concurrent List
by mentioning entry/entries of the Concurrent List and that G
it contains provision or provisions repugnant to the law
made by Parliament or existing law. Further, the words
"reserved for consideration" would definitely indicate that
there should be active application of mind by the President
to the repugnancy pointed out between the proposed H
474 SUPREME COURT REPORTS [2012] 10 S.C.R.
A State law and the earlier law made by Parliament and the
necessity of having such a law, in the facts and
circumstances of the matter, which is repugnant to a law
enacted by Parliament prevailing in a State. The word
"consideration" would manifest that after careful thinking
B over and due application of mind regarding the necessity
of having State law which is repugnant to the law made
by Parliament, the President may grant assent. This aspect
is further reaffirmed by use of the word "assent" in clause
(2), which implies knowledge of the President to the
c repugnancy between the State law and the earlier law
made by Parliament on the same subject-matter and the
reasons for grant of such assent. The word "assent" would
mean in the context as an expressed agreement of mind
to what is proposed by the State."
D (emphasis supplied)
Shah, J. then referred to various meanings of the word
"assenr and observed:
"Applying the aforesaid meaning of the word "assent" and
E
from the phraseology used in clause (2), the object of
Article 254(2) appears that even though the law made by
Parliament would have supremacy, after considering the
situation prevailing in the State and after considering the
repugnancy between the State legislation and the earlier
F law made by Parliament, the President may give his assent
to the law made by the State Legislature. This would
require application of mind to both the laws and the
repugnancy as well as the peculiar requirement of the State
to have such a law, which is repugnant to the law made
G by Parliament. The word "assent" is used purposefully
indicating affirmative action of the proposal made by the
State for having law repugnant to the earlier law made by
Parliament. It would amount to accepting or conceding and
concurring to the demand made by the State for such law.
H This cannot be done without consideration of the relevant
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 475
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
material. Hence, the phrase used is "reserved for A
consideration", which under the Constitution cannot be an
idle formality but would require serious consideration on
the material placed before the President. The
"consideration" could only be to the proposal made by the
State. B
It is true that the President's assent as notified in the Act
nowhere mentions that assent was obtained qua
repugnancy between the State legislation and specified
certain law or laws of Parliament. But from this, it also
cannot be inferred that as the President has given assent, C
all earlier law/laws on the subject would not prevail in the
State. As discussed above before grant of the assent,
consideration of the reasons for having such law is
necessary and the consideration would mean
consideration of the proposal made by the State for the D
law enacted despite it being repugnant to the earlier law
made by Parliament on the same subject. If the proposal
made by the State is limited qua the repugnancy of the
State law and law or laws specified in the said proposal,
then it cannot be said that the assent was granted qua the E
repugnancy between the State law and other laws for
which no assent was sought for. Take for illustration - that
a particular provision, namely, Section 3 of the State law
is repugnant to enactment A made by Parliament; other
provision, namely, Section 4 is repugnant to some F
provisions of enactment B made by Parliament and
Sections 5 and 6 are repugnant to some provisions of
enactment C and the State submits proposal seeking
"assenr mentioning repugnancy between the State law and
provisions of enactments A and B without mentioning G
anything with regard to enactment C. In this set of
circumstances, if the assent of the President is obtained,
the State law with regard to enactments A and B would
prevail but with regard to C, there is no proposal and hence
there is no "consideration" or "assent". Proposal by the H
476 SUPREME COURT REPORTS [2012] 10 S.C.R.
A State pointing out repugnancy between the State law and
of the law enacted by Parliament is a sine qua non for
"consideration" and "assent". If there is no proposal, no
question of "consideration" or "assent" arises. For finding
out whether "assent" given by the President is restricted
B or unrestricted, the letter written or the proposal made by
the State Government for obtaining "assent" is required to
be looked into."
27. In his concurring judgment, Doraiswamy Raju, J. made
the following observations:
c
"The assent of the President envisaged under Article
254(2) is neither an idle or empty formality, nor an
automatic event, necessitated or to be given for the mere
asking, in whatever form or manner and whether specific,
D vague, general or indefinite - in the terms sought for to
claim that once sought and obtained as well as
published, a curtain or veil is drawn, to preclude any
probe or contention for consideration that what was
sought and obtained was not really what should and
E ought to have been, to claim the protection envisaged
under clause (2) in respect of a particular State law vis-
a-vis or with reference to any particular or specified law
on the same subject made by Parliament or an existing
law, in force. The repugnancy envisaged under clause (1)
or enabled under clause (2) to get excepted from under
F
the protective coverage of the assent obtained from the
President, is such that there is a legislation or legislative
provision(s), covering and operating on the same field or
identical subject-matter made by both the Union and the
State, both of them being competent to enact in respect
G
of the same subject-matter or legislative field, but the
legislation by Parliament has come to occupy the entire
field. Necessarily, in the quasi-federal structure adopted
for the nation, predominance is given to the law made by
Parliament and in such circumstances only the State law
H
KRISHI UPAJ MANDI SAMITI, NARSINGHPUR v. SHIV 477
SHAKTI KHANSARI UDYOG [G.S. SINGHVI, J.]
which secured the assent of the President under clause A
(2) of Arlicle 254 comes to be protected, subject of course
to the powers of Parliament under the proviso to the said
clause. Therefore, the President has to be apprised of
the reasons at least as to why his assent is being sought,
the need or necessity and the justification or otherwise B
for claiming predominance for the State law concerned.
This itself would postulate an obligation, inherent in the
scheme underlying as well as the very purpose and
object of seeking the assent under clause (2) of Arlicle
254, to enumerate or specify and illustrate the parlicu/ar c
Central Jaw or provision with reference to which the
predominance is desired. The absence of any
standardized or stipulated form in which it is to be sought
for, should not detract the State concerned, to disown its
obligation to be precise and specific in the extent of
0
protection sought having regard to the serious
consequences which thereby inevitably follow i.e. the
substitution of the Union law in force by the State law, in
the territorial limits of the State concerned, with drastic
alteration or change in the rights of citizen, which it may,
E
thereby bring about.
The mere forwarding of a copy of the Bill may obviate, if
at all, only the need to refer to each one of the provisions
therein in detail in the requisition sent or the letter
forwarding it, but not obliterate the necessity to point out F
specifically the particular Central law or provisions with
reference to which, the predominance is claimed or
purported to be claimed. The deliberate use of the word
"consideration" in clause (2) of Article 254, in my view, not
only connotes that there should be an active application G
of mind, but also postulates a deliberate and careful
thought process before taking a decision to accord or not
to accord the assent sought for. If the object of referring
the State law for consideration is to have the repugnancy
resolved by securing predominance to the State law, the H
478 SUPREME COURT REPORTS (2012] 10 S.C.R.
A President has to necessarily consider the nature and extent
of repugnancy, the feasibility, practicalities and
desirabilities involved therein, though may not be obliged
to write a judgment in the same manner, the courts of law
do, before arriving at a conclusion to grant or refuse to
B grant or even grant partially, if the repugnancy is with
reference to more than one law in force made by
Parliament. Protection cannot be claimed for the State law,
when questioned before courts, taking cover under the
assent, merely asserting that it was in general form,
c irrespective of the actual fact whether the State claimed
for such protection against a specific law or the attention
of the President was invited to at least an apprehended
repugnancy vis-a-vis the particular Central law. In the teeth
of innumerable Central laws enacted and in force on
concurrent subjects enumerated in List Ill of the Seventh
D
Schedule to the Constitution, and the hoard of provisions
contained therein, artificial assumptions based on some
supposed knowledge of all those provisions and the
presumed regularity of official acts, cannot be blown out
of proportion, to do away with an essential exercise, to
E make the "assent" meaningful, as if they are empty
formalities, except at the risk of rendering Article 254 itself
a dead letter or merely otiose. The significant and serious
alteration in or modification of the rights of parties, both
individuals or institutions resulting from the "assent" cannot
F be overlooked or lightly brushed aside as of no
significance, whatsoever. In a federal structure, peculiar to
the one adopted by our Constitution it would become
necessary for the President to be apprised of the reason
as to why and for what special reason or object and
G purpose, predominance for the State law over the Central
law is sought, deviating from the law in force made by
Parliament for the entire country, including that part of the
State."
H (emphasis supplied)
KRISHI UPAJ MANDI SAMIT!, NARSINGHPUR v. SHIV 479
SHAKTI KHANSARI UDYOG [G.S. SINGHVi, J.]
28. In view of the aforesaid judgments of the Constitution A
Benches, we hold that Article 254(2) of the Constitution is not
available to the appellants for seeking a declaration that the
Market Act would prevail over the Control Order and that
transactions involving the purchase of sugarcane by the
factories operating in the market areas would be governed by B
the provisions contained in the Market Act. As a corollary, we
hold that the High Court did not commit pny error by quashing
the notices issued by appellant - Market Committees to the
respondents requiring them to take licence under the Market
Act and pay market fee on the purchase of sugarcane from c
Cane Growers/Cane Growers Cooperative Societies.
29. In the result, the appeals are dismissed. The parties
are left to bear their own costs.
B.B.B. Appeals dismissed. D
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