Holding

The directive to reserve 20% of molasses cannot be enforced where a sugar mill has no balance stock, and the State is obligated to constitute the Advisory Committee under Section 3 of the Act.

Summary

Mis Dhampur Sugar Mills Ltd., a sugar mill and distillery, challenged a Uttar Pradesh government directive that required all sugar mills to reserve 20% of their molasses for country‑liquor production. The company argued it had no excess (balance) molasses because its entire output was used captive and it even imported molasses for its own needs, making the directive illegal, arbitrary and violative of Articles 14, 19(1)(g) and public‑policy considerations under Article 47. The High Court dismissed the writ, holding the directive lawful and that Section 3 of the Uttar Pradesh Sheera Niyantran Act was merely directory. The Supreme Court held that the directive applies only to excess stock, so it cannot be enforced where no balance stock exists, and that Section 3 obliges the State to constitute an Advisory Committee – the power is not merely discretionary. The Court also rejected the contention that an appeal under Section 9 was an adequate alternative remedy. Consequently, the appeal was partly allowed and the High Court order set aside.

Issues considered

The applicability of the 20% molasses reservation directive to sugar mills lacking balance stock.
Whether Section 3 of the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 mandates the State to constitute an Advisory Committee (mandatory vs. directory).
Whether the availability of an appeal under Section 9 of the Act bars the writ petition as an alternative remedy.
Whether the directive violates constitutional guarantees under Articles 14, 19(1)(g) and the policy principle of Article 47.

Legislation cited

Uttar Pradesh Sheera Niyantran Adhiniyam, 1964s. 22, s. 3, s. 8, s. 9

Subjects

molassesreserve 20% molassessugar milladvisory committeeUttar Pradesh Sheera Niyantran Actmandatory vs directory provisionalternative remedyArticle 14Article 19(1)(g)Article 47judicial review

Judgment

MIS. DHAMPUR SUGAR MILLS LTD. A
·er
v.
STATE OF U.P. AND ORS.

SEPTEMBER 24, 2007
B
[C.K. THAKKER AND ALTAMAS KABIR, JJ.]

. Uttar Pradesh Sheera Niyantran Adhiniyam, 1964-ss. 3 & 22-
Uttar Pradesh Sheera Niyantran Niyamavali, 1974-r.14-UP.
Molasses Advisory Committee Rules, 1965-rr. 3 and 11: c
Directive issued by Respondents under the Adhiniyam to sugar
mills to reserve 20% of the molasses produced by them for supply to
distilleries manufacturing country liquor-Applicability of-Held, not
applicable in case ofsugar mills not having 'balance stock' ofmolasses
i.e. molasses in excess of and not used for captive consumption -- D
_i,
Respondents having no right to compel such sugar mills to supply 20%
molasses for purpose ofmanufacturing country liquor.
Provision in s.3 ofthe Adhiniyam enjoining the State Government
to constitute an Advisory Committee to advise on matters relating to E
control ofstorage, preservation, gradation, price, supply and disposal
of molasses-Nature of-Held: Investment of power in the State
Government is not merely enabling or discretionary-It is obligatory
on the Government to constitute such a Committee to carry out the
~ purpose and object ofthe Adhiniyam-Doctrines-Doctrine ofpo we/
F
coupled with duty-Words and Phrases-"May" and "shall"-
Meaning of

Constitution of India, 1950
Article 226-Alternative remedy-Policy decision taken by
State-Respondents issuing directive under the Adhiniyam to sugar G
-I,
mills-Appellant-company having a sugar mill-Itfiled writ petition-
Objection raised by Respondents on ground of availability of appeal
under the Adhiniyam-Held: Rightly rejected by High Court-Once a
policy decision has been taken by the Government, filing ofappeal is
245 H
246 SUPREME COURT REPORTS [2007] 10 S.C.R.

A virtually an 'empty formality' or 'futile attempt '-Remedy of appeal
could not be termed as 'alternative ',or 'equally efficacious '-Uttar
Pradesh She era Niyantran Adhiniyam, .l 964-s. 9.
Article 47-State to endeavour to bring about prohibition-Point
already concluded by Supreme Court-No opinion expressed
B
Respondents issued directive under the Uttar Pradesh Sheera
Niyantran Adhiniy;l.m, 1964 (the Act) to sugar mills to reserve 20%
of the molasses produced by them for supply to distilleries
manufacturing country-made liquor. Appellant-company has a sugar
c mill a.swell as a distillery. It filed writ petition before the High Court
contending that though it was producing molasses, the entire
production was captively consumed in its own distillery and since
even that was not sufficient it imported molasses from other States
as also other Countries. Appellant company contended that since it
D did not have balance or extra stock of molasses for being supplied
to distilleries for manufacturing country-made liquor, the Authorities
could not compel it to supply molasses in terms of the said A..
Government directive and hence such action was improper, illegal,
arbitrary and unreasonable, inconsistent with the provisions of the
Act and violative of Articles 14and19(1)(g) of the Constitution as
E also against public policy reflected in Article 47 of the Constitution.
It was further contended that the State Government ought to have
constituted an Advisory Committee under Section 3 of the Act before
issuing such directive.
F High Court though rejected the preliminary objection raised by
the Respondents viz. availability of alternative remedy of appeal
under Section 9 of the Act, however, held that Section 3 of the Act
was only directory and if Advisory Committee was not constituted
by the State, the powers under the Act could be exercised by the
G Controller appointed by the State. The Court further held that the
reservation for 20% of molasses and directive issued to the
Appellant to supply such stock for manufacturing country liquor was
neither contrary to law nor against public policy and consequently
dismissed the writ petition. Hence the present appeal.
H Partly allowing the appeal, the Court
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 247

--\-- HELD~ 1. As to alternative remedy available to the Appellant, A
a finding has been recorded by the High Court in favour of the writ-
petitioner and the same has not been challenged by the State before
this Court. Even otherwise, from the record, it is clear that the
decision has been taken by the Government. Obviously in such
cases, remedy of appeal cannot be terms as 'alternative', or 'equally B
efficacious'. Once a policy decision has been taken by the
Government, filing of appeal is virtually from Caesar to Caesar's
wife, an 'empty formality' or 'futile attempt'. The High Court was,
therefore, right in overruling the preliminary objection raised by the
respondents. [Para 16] (254-E-F] c
2. As regards Article 47 of the Constitution, the stand of the
State Government was that the point was finally concluded by a
decision of this Court in Khoday Distilleries Ltd. & Ors. v. State of
Karnataka & Ors., in favour of the State. On the facts and in the
circumstances of the case, it is not necessary to express any opinion D
one way or the other and this Court refrains from doing so.
_>. (Para 7 and21] (251-E; 256-C}
Khoday Distilleries Ltd. & Ors. v. State of Karnataka & Ors.,
(1995] 1sec574, referred to.
3.1. The High Court was, however, not right in holding that all E
sugar mills were bound to supply 20% molasses to the Authorities
under clause (3) of the Government Order dated June 9, 2004
irrespective of stock possessed. Clause (3) applies only to excess
~ stock of molasses, that is, molasses which is in excess of and not
used for captive const~mption by sugar factory and is thus balance F
stock. It is the assertion of the Appellant that the Company has no
excess stock of molasses. Not only that, but it has to import
molasses from other sources even for its own requirement for
manufacturing industrial alcohol and such permission has been
granted by the Central Government as well as by the State G
--'· Government. If it is so, the case does not fall within the mischief of
clause (3) and said clause cannot be pressed in service by the
Auth~rities. [Para 20} [255-G, H; 256-A-B]

3.2. The directive issued hy the respondents would not apply
in case there is no balance stock of molasses with any sugar mill. H
248 SUPREME COURT REPORTS [2007] 10 S.C.R.

A The respondent-authorities have no right to compel such sugar mills
to supply 20% molasses for the purpose of manufacturing country
liquor. [Para 46] [265-D]
4.1. Reading the substantive provisions in the Act as also
subordinate legislation by way of Rules, there is no doubt that the
B submission of the Appellant that an Advisory Committee ought to
have been constituted by the State under Section 3 of the Act is well
founded and must be upheld. High Court dealt with the submission
of the Appellant.but.did not accept it observing that the Legislature
had used the expression 'may' and not 'shall' in Section 3 of the Act.
C The Court ruled that the provision was merely directory and not
mandatory. This Court is unable to subscribe to the above view.
(Para 28 and 29] [259-G, H; 260-A-B]
4.2. Mere use of word 'may' or 'shall' is not conclusive. The
question whether a particular provision of a statute is directory or
D mandatory cannot be resolved by laying down any general rule of
universal application. Such controversy has to be decided by
ascertaining the intention of the Legislature and not by looking at
the language in which the provision is clothed. And for finding out
the legislative intent, the Court must examine the scheme of the Act,
E purpose and object underlying the provision, consequences likely
to ensue or inconvenience likely to result ifthe provision is read one
way or the other and many more considerations relevant to the issue.
[Para 29] [260-B-C]
F 4.3. Several statutes confer power on authorities and officers
to be exercised by them at their discretion. The power is in
permissive language, such as, 'it may be lawful', 'it may be
permissible', 'it may be open to do', etc. In c.ertain circumstances,
however, such power is coupled with duty and must be exercised.
[Para 30] [260-D, E]
G
4.4. In the case on hand, considering the legislative scheme as
also Rules and particularly Rules relating to constitution of
Committee, namely, the U.P. Molasses Advisory Committee Rules,
1965, investment of power in the State Government is not merely
H enabling or discretionary. It is obligatory on the Government to
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 249

constitute a Committee to carry out the purpose and object of the A
~~ Act. The Committee has to perform an important role of advising
the State Government on matters relating to the control of storage,
preservation, gradation, price, supply and disposal of molasses. The
constitution of the Committee, as envisaged by Rule 3 of the 1965
Rules clearly shows the representation of various groups and B .
interests likely to be affected. Rule 11 requires the Chairman
(Controller of Molasses) to give due consideration of the resolutions
passed by the Committee and forward it to the State Government
for orders together with a copy of the proceedings· and his
recommendations. It is not open to the State Government to ignore C
this salutary provision taking specious plea that the provision relating
to constitution of Committee is enabling, directory or discretionary
and State, therefore, is not obliged to constitute such Committee.
In accordance with the provisions of 1964 Act, the Rules framed
thereunder as also under 1965 Rules, it is the duty of the State
Government to constitute Advisory Committee. Accordingly the D
State ofUttar Pradesh is directed to constitute Advisory Committee
_A as expeditiously as possible. [Para 45] [264-F, H; 265-A, C]
Judicial Review ofAdministrative Action, 1995, pp. 300-01 by
de Smith and Administrative Law: 9th Edn, p. 233 by Wade & E
Forsyth, referred to.
Baker, Re, (1890) 44 Ch D 262; Julius v. Lord Bishop ofOxford
(1880) 5 AC 214; Padfieldv. Minister ofAgriculture, Fisheries & Food,
(1968) AC 997 (1968) 1 All ER 694; R. V. Metropolitan Police
Commissioner (1911) 2 QB 1131; R. V. Nescastle-upon-Tyne F
Corporation, (1889) 60 LLT 963; Ganpat Ladhav. Shashikant, (1978)
3SCR198; Alcockv. ChiefRevenueAuthority50 IA227: AIR(1923)
PC 138; Commissioner ofPolice v. Gordhandas Bhanji, (1952) SCR 135
and Rat/am Municipalityv. Vardichan, (1981] 1SCR97, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4466 of G
2007.
From the Jl;ldgment and Order dated 29 .10.2004 of the High Court
of Judicature at Allahabad in Civil Misc. Writ Petition No. 1369of2004.
Dushyant Dave, Rajesh Kumar and Bharat Singh for the Appellant. H
250 SUPREME COURT REPORTS [2007] 10 S.C.R.

A Dinesh Dwivedi, Raj Kumar Gupta, Rajeev Dubey and Kamlendra
Mishra for the Respondents. ~··

The Judgment of the Court was delivered by
C.K. THAKKER, J. 1. Leave granted.
B
2. The present appeal is directed against the judgment and final order
passed by the Division Bench of the High Court of Judicature at Allahabad
dated October 29, 2004 in Civil Miscellaneous Writ Petition No. 1369
of2004. By the said order, the High Court dismissed the writ petition
C filed by the writ petitioner-appellant herein.
3. Facts in nutshell giving rise to the writ petition as well as present
appeal may now be stated.
4. The appellant-Mis Dhampur Sugar Mills Ltd. ('Company' for
D short) is a Public Limited Company incorporated under the Companies
Act, 1956 having its registered office at Dhampur (Bijnor). The appellant
has sugar mill in the State ofUttar Pradesh and has also adistillery. The
distillery manufactures ethyl alcohol, used for blending of petrol, ....t.._
manufacture of chemicals and rectified spirit for medicines. It is also having
a similar business at Asmouli, District Moradabad, Mansurpur, District
E Muzaffarnagar and Rozagaon, District Barabanki. The writ petitioner
approached the High Court by invoking Article 226 of the Constitution
against the respondents for issuance of appropriate writ, direction or order
quashing certain Government Orders said to have been passed by the
Authorities under the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964
F [Act XXIV of 1964] (hereinafter referred to as 'the Act') directing the ---'·
writ-petitioner to supply 20% of the molasses produced by the sugar mills
for manufacturing 'country made liquor' by distilleries for the financial years
2003-04 and 2004-05. The writ petitioner also challenged consequential
action of issuance of show cause notices as to why it should not be
G prosecuted for committing offences punishable under the Act since it has
not complied with the orders issued by the Authorities and has not supplied
20% molasses for manufacturing country liquor. The main challenge of
the writ petitioner was that though the Company was producing molasses,
the entire production was required by the Company itself which was used
H for captive consumption and even that was not sufficient. The Company
MIS. DHAMPURSUGARMILLS LTD. v. STATEOFU.P. 251
[THAKKER, J.]
had, therefore,.obtained pennission from the Government for import of A
molasses from other States as also other Countries. Since the writ
petitioner did not have balance or extra stock of molasses for being
supplied to distilleries for manufacturing country-made liquor, the
Authorities cm;ild not compel the writ petitioner to supply molasses as
directed in various Government Orders and Letters. Such action was B
improper, illegal, arbitrary and unreasonable, inconsistent with the
provisions of the Act as also violative of Articles 14 and 19(1 )(g) of the
Constitution. The action was also against public policy reflected in Article
47 of the Constitution. It was contended that since the above directives
could not have been issued by the Authorities, issuance of show cause C
notices as to why the writ petitioner should not be prosecuted also were
not legal and the prosecution should be quashed. It was also the case of
the writ petitioner that the State Government ought to have constituted
'Advisory Committee' under Section 3 of the Act.
5. The stand of the Government before the High Court was that in D
accordance with the provisions of the Act and the Uttar Pradesh Sheera
Niiyantran Niyamavali, 1974 (hereinafter referred to as 'the Rules'), it
was open to the Authorities to ask the writ petitioner to supply 20%
molasses for the purpose of manufacturing country liquor. As the said
action was in consonance with law, the Company was bound to supply E
20% molasses for the said purpose and the action could not be termed
as illegal or unlawful.
6. It was also contended by the respondents that an alternative and
equally efficacious remedy of filing an appeal under Section 9 of the Act
was available to the Company and hence writ petition was not maintainable. F
7. As to Article 47 of the Constitution, the case of the State
Government was that the point was finally concluded by a decision of
this Court in Khoday Distilleries Ltd. & Ors. v. State of Karnataka &
Ors., (1995) 1 SCC 574 : JT 1994 (6) SC 588 in favour of the State. G
Section 3 of the Act, according to the State, was merely an enabling
provision and thus directory in nature and the writ petitioner could not
compel the State to constitute 'Advisory Committee'.
8. The High Court, after hearing the parties, held that preliminary
objection raised by the respondents was not well-founded. Considering H
252 SUPREME COURT REPORTS (2007] 10 S.C.R.

A the totality of facts and circumstances and the decisions taken by the
respondents, the High Court held that approaching the Appellate Authority
would be a 'futile attempt'. The High Court, considering various decisions
of this Court on the point, held that it would not be justified in dismissing
the petition on the ground of alternative remedy and the said objection
B was not well-founded.
9. The Court ruled that apart from the fact that Article 47 of the
Constitution could not be enforced by a Court of Law, ~e point no longer
survived in the light of decision of the Apex Court in Khoday Distilleries
Ltd Section 3 of the Act, according to the High Court, was only directory
C and if' Advisory Committee' was not constituted by the State, the powers
under the Act could be exercised by the Controller appointed by the State.
10. On merits, the Court held that the reservation for 20% of
molasses and directive issued to the writ petitioner to supply such stock
D for manufacturing country liquor was neither contrary to law nor against
public policy. The order, therefore, could have been issued by the
Authorities as it was open to the Authorities to ask for 20% molasses
from the writ petitioner for manufacturing country liquor. The Company
was bound to supply the stock and as it was not done, the Authorities
were right in taking appropriate action in accordance with law.
E Accordingly, the High Court dismissed the writ petition.
11.0n May 2, 2005, notice was issued by this Court. The matter
appeared on Board thereafter from time to time and ultimately on March
2, 2007, the Registry was directed to place the matter for final disposal
F on a non-miscellaneous day. That is how the matter has been placed
before us.
12. We have heard the learned counsel for the parties.
13. The learned counsel for the appellant contended that Section 3
G of the Act enjoins the State Government to constitute an 'Advisory
Committee' "to advise on matters relating to the control of storage,
preservation, gradation, price, supply and disposal of molasses" under the
Act. It was, therefore, incumbent on the State Government to constitute
such Committee. There is no such Committee at present as envisaged
H by the Act though such Committee was there in past. This is contrary to
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 253
[THAKKER, J.]
law and against the legislative mandate. In absence of such Committee,. A
no directive can be issued by the Controller to supply molasses. All the
directives are, therefore, without authority oflaw and are required to be
set aside. It was also contended that such directives are against public
policy reflected in the Directive Principles of State Policy enshrined in Part
IV of the Constitution and in particular, Article 47 which requires the State ·. B
to endeavour to bring about prohibition of intoxicating drinks. The State
Government wedded with implementation of principles enumerated in Part
IV of the Constitution cannot issue an order that molasses should be
reserved for manufacturing 'country liquor' and such a directive cannot
be enforced. On that ground also, the impugned directives are liable to C
be quashed. It was further urged that alternatively the impugned directive
is explicitly clear and requires a sugar mill to reserve 20% of molasses
from the balance stock i.e. over and above actual consumption by the
industry for manufacturing country liquor. Since the writ petitioner did
not have balance stock of molasses and the record clearly revealed that
even for captive consumption, it had to import molasses from other States D
in the country and from foreign countries for which necessary pennission
was granted by the Government, it could not be compelled to reserve
20% molasses for manufacturing country liquor. It was submitted that
even ifthe directive is held to be legal, lawful and in consonance with
law, the writ petitioner could not be asked to supply 20% molasses for E
manufacturing country liquor. The directive could not be applied to the
writ petitioner and notices could not be issued to show cause as to why
the Company should not be prosecuted. On that limited ground also,
the writ petition ought to have been allowed and the High Court was wrong
in dismissing it. F'
14. The learned counsel for the respondents, on the other hand,
submitted that the constitutional validity of the Act has not been challenged
by the writ-petitioner. Even otherwise, the validity has been upheld by
this Court in SJEL Ltd & Ors. v. Union ofIndia & Ors., [1998] 7 SCC
26 : JT (1998) 6 SC 323. It was, therefore, open to the respondents to G ·
implement the provisions of the Act. Section 8 of the Act empowers the
Authorities to issue necessary directions relating to sale and supply of
molasses and in exercise of the said power, orders were issued by the
Authorities and the High court was right in upholding them. Regarding
Advisory Committee, it was submitted that it is in the discretion of the H
254 SUPREME COURT REPORTS [2007] 10 S.C.R.

A State Government to constitute the Committee and if no such Committee
is constituted, there is no violation oflaw. The High Court was right in ·::i.{-

holding that in absence of Advisory Committee, Controller could have
exercised the power conferred on him by the State Government. As to
public policy and provisions in Part IV of the Constitution, the counsel
B contended that the High Court was called upon to consider a limited
question as to whether the action was illegal or unconstitutional and once
it was held that it was in consonance with law, the Court was right in
upholding it and in dismissing the petition. It was, therefore, submitted
that the appeal deserves to be dismissed.
C 15. Having .considered the rival contentions of the parties, in our
opinion, the appeal deserves to be partly allowed. So far as the
constitutional validity of the Act is concerned, it is rightly not challenged
by the writ petitioner since the point is concluded by a decision of this
Court in SIEL Ltd decided in 1998. It was held by th.is Court that the
D Act was within the legislative competence of the State and the State Act
was not inconsistent with the Industries (Development and Regulation) Act,
1951, i.e. Central Act. But even otherwise, the U.P. Act having received
the assent of the President as required by Article 254(2) of the
Constitution, would operate.
E 16. As to alternative remedy available to the writ petitioner, a finding
has been recorded by the High Court in favour of the writ-petitioner and
the same has not been challenged by the State before us. Even otherwise,
from the record, it is clear that the decision has been taken by the
Government. Obviously in such cases, remedy of appeal cannot be terms
F as 'alternative', or 'equally efficacious'. Once a policy decision has been
taken by the Government, filing of appeal is virtually from 'Caesar to
Caesar's wife', an 'empty formality' or 'futile attempt'. The High Court
was, therefore, right in overruling the preliminary objection raised by the
respondents.
G 17. On merits, the learned counsel for the appellant drew our
attention to an order dated June 9, 2004 which was relied upon by the
High Court for dismissing tl1e writ petition. Clause (3) of the said order
relates to supply of 20% molasses for manufacturing country liquor. The
High Court in its order reproduced the said clause which is in Hindi and
H reads thus;
M/S.DHAMPURSUGARMILLSLTD.v. STATEOFU.P. 255
[THAKKER, J.]
"PRATYEK CHIN/ MILL KE SHEERE KE AWASHESHA A
STAAK ME SE DESHI MAD/RA KE LIYE 20 PRATISHAT
SHEERE KA AARKSHAN EIS/ AASHWANI YO KE LIYE
HOGAA JO USKAA UPYOG DESHI MAD/RA UTPADAN ME
KAREGI. A/SI CHIN/ MILE JJNKI SWAYAM Kl BHI
AASHWANIYA HAI, UKTANUSAR KIYE JA RAHE SHEERE B
KE AARAKSHAN SE OOS SEEMA TAK BAHAR RAHEGI Kl
CHIN/ MILL SAH-AASHWANI DWARA SWAYAM KE
VASTAVIK UPBHOG KE ATIRIKT JO SHEERA BACHATA
HAI, OOS PER 20 PRAT/SHAT KA AARAKSHAN LAGOO
HOGA". C
18. The English translation supplied by the appellant at Annexure
P-3 reads thus;
"From the balance stock of molasses with each sugar mill, 20%
of molasses shall be reserved for the distilleries manufacturing D
country liquor. The sugar mills having their own distilleries shall not
be covered with this reservation to the extent that after the actual
consumption of molasses in their captive distillery, 20% reservation
shall be applicable on the balance stock".
19. The learned counsel for the writ petitioner, in our opinion, is right E
in contending that the said order applies only to balance stock (Avshesh
staak). According to the High Court, 20% molasses must be reserved
by each and every sugar mill for manufacturing country liquor
notwithstanding whether there is balance stock or not. In other words,
the High Court held that 20% molasses must be reserved by every sugar F
mill for the purpose of manufacturing country liquor. If such sugar mill is
having facility of manufacturing country liquor, it should utilize the said stock
for the said purpose, otherwise it should supply to the Authorities.
20. In our opinion, however, clause (3) applies only to excess stock
of molasses, that is, molasses which is in excess of and not used for G
captive consumption by sugar factory and is thus 'balance stock'. It is
the assertion of the writ petitioner that the Company has no excess stock
of molasses. Not only that, but it has to import molasses from other
sources even for its own requirement for manufacturing industrial alcohol
H
256 SUPREME COURT REPORTS [2007] 10 S.C.R.

A and such pennission has been granted by the Central Government as well
as by the State Government. If it is so, the case does not fall within the
mischief of clause (3) and said clause cannot be pressed in service by
the Authorities. The High Court, in our opinion, was not right in holding
that all sugar mills were bound to supply 20% molasses to the Authorities
B under clause (3) of the Government Order dated June 9, 2004 irrespective
of stock possessed. Only on that ground, the appeal deserves to be
allowed.
21. So far as the submission of the learned counsel as to Article 47
of the Constitution in Part IV comprising of 'Directive Principles of State
C Policy' is concerned, in our opinion, on the facts and in the circumstances,
it is not necessary to express any opinion one way or the other and we
refrain from doing so.
22. Before the High Court as well as before us it was strenuously
D urged by the writ petitioner that it was obligatory on the State Government
to constitute Advisory Committee under Section 3 of the Act. Section 3
reads thus:
3. Constitution of Advisory Committee.-(1) The State
Government may, by notification in the Gazette, constitute an
E Advisory Committee to advise on matters relating to the control
of storage, preservation, gradation, price, supply and disposal of
molasses.
(2) The Committee shall consist of such number of persons and
shall be constituted on such terms .and conditions as may be
F prescribed.
23. Section 22 is a rule making power and enables the State
Government to make rules to carry out the purposes of the Act. Sub-
section (2) enacts that in particular and without prejudice to the generality
G of the power, such rules may provide for-
(a) the composition of the Advisory Committee, the manner in
which its members shall be chosen, the term of office of its
members, the allowances, if any, payable to them, the manner
in which the Advisory Committee shall tender its advice and
H the procedure for the conduct of its business;
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 257
[THAKKER, J.]
(b) the procedure relating to the removal of members of the A
Advisory Committee;
(c)

24. Rule 14of1974 Rules is also relevant and reads thus;
14. Orders regarding sale or supply ofmolasses. -A consolidated B
statement of the estimated availability of molasses will be drawn
up and placed before the Advisory Committee, constituted under
Section 3( 1) of the Act, by the Controller who may make orders
regarding the sale or supply of molasses in accordance with the
provisions ofS~ction 8 of the Act. C
25. In exercise of power under Clauses (a) and (b) of sub-section
(2) of Section 22 read with Section 3 of the Act, the Governor ofUttar
Pradesh framed rules known as the U.P. Molasses Advisory Committee
Rules, 1965. Rule 3 provides for constitution of Committee and reads as D
under:
3. Constitution-(!) The Advisory Committee to be constituted
under Section 3 of the Act shall consist of:
(i) the Controller who shall be ex officio Chairman.
E
(ii) the Assistant Excise Commissioner, In charge of Molasses at
the Headquarters of the Excise Commissioner, Uttar Pradesh
who shall be ex officio Secretary.
(rii) The Director oflndustries, Uttar Pradesh or his representative
not below the rank of Deputy Director oflndustries; F.
(iv) The Cane Commissioner, Uttar Pradesh, or his representative
not below the rank of Deputy Cane Commissioner;
(v) Three representatives of sugar factories in Uttar Pradesh to
be nominated by the Indian Sugar Mills' Association (U.P. G
Branch);
(vi) Three representatives of distilleries in Uttar Pradesh to be
nominated by the Uttar Pradesh Distillers' Association;
(vii) One representative of the alcohol based industries in Uttar H
258 SUPREME COURT REPORTS [2007] 10 S.C.R.

A · Pradesh to be nominated by the Uttar Pradesh Alcohol Based
Industries Development Association.
(viii) One representative of Moulding and Founchy Industry in Uttar
Pradesh to be nominated by the Excise Commissioner, Uttar
Pradesh; and
B
(ix) Managing Director, the Uttar Pradesh Co-operative Sugar
Factories Federation Ltd.
(2) If a representative is not nominated by the concerned
Association under Clause (v), (vi) or (vii) of sub-rule ( 1) within
C the time specified in that behalf by the State Government, it shall
be lawfully for the State Government to nominate the representative
or representatives, as the case may be, under that clause.
26. While Rule 6 prescribes term of office of members and
D reconstitution of the Committee, Rule 7 deals with vacancy caused by
death, resignation or removal of members. Rule 8 provides for quorum
for meeting. Rules 9 and 10 prescribe time, place and agenda for the
meeting of the Committee and preparation of minutes of resolutions passed
and decisions taken. Rule 11 requires the Chairman of the Committee to
forward such resolutions to the State Government.
E
27. It further appears that by a notification dated November 24,
1965, such Committee had been constituted. The Notification was also
published in U.P. Government Gazette, Extraordinary and reads thus:
Notification No.5586-EIXIIl-251-65, dated 24th November,
F 1965, published in UP. Gazette, Extra., dated November 24, 1965.
In exercise of the powers under Section 3 of Uttar Pradesh
Sheera Niyantran Adhiniyam, 1964 (Uttar Pradesh Act XXIV of
1964) read within Rules 3 and 5 of the Uttar Pradesh Molasses
G Advisory Committee Rules, 1965, the Governor of Uttar Pradesh
is pleased to constitute an Advisory Committee to advise on
matters relating to the control on storage, supply, gradation and
prices of molasses with effect from the date of issue of this
notification and further pleased to direct that the said Committee
shall consist of the following persons:
H
. .,.
M/S.DHAMPURSUGARMILLSLTD.v. STATEOFU.P. 259
[THAKKER, J.]

-~
(a) the Controller of Molasses, Uttar Pradesh-Ex Officio A
Chairman
(b) the Assistant Excise Commissioner (Molasses), Uttar Pradesh-
Ex Officio Secretary.
(i) The representatives of Sugar Factories- B
Sri V.D. Jhunjhunwala Kamlapat Moti Lal Sugar Mills,
Motinagar, district Faiz.abad.
Sri B.C. Kohli, Ganga Sugar Corporation Ltd., Deoband,
district Saharanpur. c
Sri L.N. Wahi, Indian Sugar Mills Association, Uttar Pradesh
Branch, Sri Niwas, I, Kabir Marg, Lucknow.
(ii) Three representatives of Distilleries-

Sii Bansi Dhar, Director, Managing Agents, Messrs Delhi D
Cloth & General Mills Co. Ltd., Bara Hindu Rao, Post Box
...
No.I 039, Delhi.
Sri D.S. Majithia Messrs, Saraya Distillery, Sardamagar,
Gorakhpur.
E
Sri V.R. Mohan, Dyer Meakin Brewery Ltd., Lucknow.
(iii) One representative of Moulding and Foundry Industries-

)
Sri Raman, Secretary, Agra Iron Founders Association, Agra.
(iv) One representative of Tobacco Manufacturers Association, F
Varanasi.
(v) The Director oflndustries, U.P. or his representative.
(vi) Sri Ram Surat Prasad, M.L.A., Mohalla Mohaddipur,
Gorakhpur. G
28. Reading the substantive provisions in the Act as also subordinate
legislation by way of Rules, there is no doubt in our minds that the
submission of the learned counsel for the writ petitioner that such a
Committee ought to have been constituted by the State is well-founded H
260 SUPREME COURT REPORTS [2007] I 0 S.C.R.

A and must be upheld The High Court dealt with the submission of the writ ={-
petitioner but did not accept it observing that the Legislature had used
the expression 'may' and not 'shall' in Section 3 of the A~t. The Court
ruled that the provision was merely directory and not mandatory.
B 29. We are unable to subscribe to the above view. In our judgment,
mere use of word 'may' or 'shall' is not conclusive. The question whether
a particular provision of a statute is directory or mandatory cannot be
resolved by laying down any general rule of universal application. Such
controversy has to be decided by ascertaining the intention of the
Legislature and not by looking at the language in which the provision is
C clothed. And for :fuidiilg out the legislative intent, the Court must examine
the scheme of the Act, purpose and object underlying the provision,
consequences likely to ensue or inconvenience likely to result if the
provision is read one way or the other and many more considerations
relevant to the issue.
D
30. Several statutes confer power on authorities and officers to be
exercised by them at their discretion. The power is in permissive language, ~--
such as, 'it may be lawful', 'it may be permissible', 'it may be open to
do', etc. In certain circumstances, however, such power is 'coupled with
E duty' and must be exercised.
31. Before more than a century in Baker, Re, (1890) 44 Ch D 262,
Cotton, L.J. stated;
"I think that great misconception is caused by saying that in some
cases 'may' means 'must'. It never can mean 'must', so long as
F
the English language retains its meaning; but it gives a power, and
then it may be question in what cases, where a Judge has a
power given by him by the word 'may', it becomes his dutf to
exercise it".
G (emphasis supplied)
32. In leading case of Julius v. Lord Bishop of Oxford, (1880) 5
AC 214: 49 LJ QB 580: (1874-80) All ER Rep 43 (HL), the Bishop
was empowered to issue commission of inquiry in case of alleged
misconduct by a clergyman, either on an application by someone or suo· ·
H
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 261
[THAKKER, J.]
motu. The question was whether the Bishop had right to refuse A
-}- commission when an application was made. The House of Lords held
that the Bishop had discretion to act pursuant to the complaint and no
mandatory duty was imposed on him.
33. Earl Cairns, L.C., however, made the following remarkable and B
oft-quoted observations:
"The words 'it shall be lawful' are not equivocal. They are plain
and unambiguous. They are words merely making that legal and
possible which there would otherwise be no right or authority to
do. They confer a faculty or power and they do not of themselves c
do more than confer a faculty or power. But there may be
something in the nature of the thing empowered to be done,
something in the object for which it is to be done, something
in the title of the person or persons/or whose benefit the
power is to be exercised, which may couple the power with a D
duty, and make it the duty of the person in whom the power
is reposed, to exercise that power when called upon to do so".
(emphasis supplied)
34. Explaining the doctrine of power coupled with duty, de Smith, E
('Judicial Review of Administrative Action', 1995; pp.300-0 I) states:
"Sometimes the questiori before a court is whether words which
apparently confer a discretion are instead to be interpreted as
imposing duty. Such words as 'may' and 'it shall be lawful' are
prima facie to be construed as permissive, not imperative. F
Exceptionally, however, they may be construed as imposing a
duty to act, and even a duty to act in one particular manner".

(emphasis supplied)
35. Wade also says (Wade & Forsyth; 'Administrative Law: 9th G
Edn.) : p.233) :
"The hallmark of discretionary power is permissive language using
words such as 'may' or 'it shall be lawful', as opposed to
obligatory language such as 'shall'. But this simple distinction is not H
262 SUPREME COURT REPORTS [2007] 10 S.C.R.

A always a sure guide, for there have been many decisions in which
permissive language has been construed as obligatory. This is not
so much because one form of words is interpreted to mean its
opposite, as because the power conferred is, in the
circumstances, prescribed by the Act, coupled with a duty to
B exercise it in a proper case".

(emphasis supplied)

36. In the leading case of Padfield v. Minister of Agriculture,
Fisheries & Food, 1968 AC 997: (1968) 1 All ER 694: (1968) 2 WLR
C 924 (HL), the relevant Act provided for the reference of a complaint to
a committee of investigation 'if the Minister so directs'. The Minister
refused to act on a complaint. It was held that the Minister was required
to act on a complaint in absence of good and relevant reasons to the
contrary.
D 37. Likewise, it was held that the licensing authorities were bound
to renew licences of cab drivers if the prescribed procedural requirements
had been complied with [R. V Metropolitan Police Commissioner,
(1911) 2 QB 1131 ]. Similarly, local authorities were held bound to
approve building plans if they were in conformity with bye-laws [R. V.
E Nescastle-upon-Tyne Corporation, ( 1889) 60 LT 963]. Again, the court
was required to pass a decree for possession in favour of a landlord, if
the relevant grounds existed [Ganpat Ladha v. Shashikant, ( 1978) 3
scR 198 : (1978) 2 sec 573].
F 38. In Alcock v. Chief Revenue Authority, 50 IA 227 : AIR 1923
PC 138, the relevant statute provided that if in the course of any
assessment a question arises as to the interpretation of the Act, the Chief
Revenue Authority 'may' draw up a statement of the case and refer it to
the High Court. Holding the provision to be mandatory and following
Julius, Lord Phillimore observed:
G
"When a capacity or power is given to a public authority, there
may be circumstance which couple with the power of duty to
exercise it".

H
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 263
[THAKKER, J.]
39. In Commissioner of Police v. Gordhandas Bhanji, [1952] A
-}-
SCR 135 : AIR (1952) SC 16, Rule 250 of the Rules for Licensing and
Controlling Theatres and Other Places of Public Amusement in Bombay
City, 1884 read as under:
"The Commissioner shall have power in his absolute discretion at
any time to cancel or suspend any licence granted under these Rules ...." B
40. It was contended that there was no specific legal duty compelling
the Commissioner to exercise the discretion. Rule 250 merely vested a
discretion in him but it did not require him to exercise the power. Relying
upon the observations of Earl Cairns, L.C., the Court observed: c
"The discretion vested in the Commissioner of Police under Rule
250 has been conferred upon him for public reasons involving the
convenience, safety, morality and the welfare of the public at large.
An enabling power ofhis kind conferredfor public reasons and
for the public benefit is, in our opinion, coupled with a duty D
to exercise it when the circumstances so demand It is a duty
which cannot be shirked or shelved nor can it be evaded... "
(emphasis supplied)
41. In Rat/am Municipality v. Vardichan, (1981) 1 SCR 97 : E
[1980] 4 SCC 162; some residents ofRatlam Municipality moved the
Sub-Divisional Magistrate under Section 133 of the Code of Criminal
Procedure, 1973 for abatement of nuisance by directing the municipality
to construct drainpipes with flow of water to wash the filth and stop the
stench. The Magistrate founct the facts proved and issued necessary F
directions. The Sessions Court, in appeal, reversed the order. The High
Court, in revision, restored the judgment of the Magistrate and the matter
was carried to the Supreme Court.
42. Krishna Iyer, J. pithily summariz.ed the principle thus;
"The key question we have to answer is whether by affirmative G
action a court lean compel a statutory body to carry out its duty
to the community by constructing sanitation facilities at great cost
and on a time-bound basis. At issue is the coming of age of that
branch of public law bearing on community actions and the court's
H
264 SUPREME COURT REPORTS [2007] 10 S.C.R.

A specific plans in response to public grievances".
43. Holding the provision obligatory, the Court observed:
"Judicial discretion when facts for its exercise are present, has a
mandatory import. Therefore, when the sub-Divisional Magistrate,
B Ratlam, has, before him, information and evidence, which disclose
the existence of a public nuisance and, on the materials placed, he
considers that such unlawful obstruction or nuisance should be
removed from any public place which may be lawfully used by the
public, he shall act .... This is a public duty implicit in the public
c power to be exercised on behalf of the public and pursuant to
a public proceeding".

(emphasis supplied)
44. We do not wish to refer to other cases on the point. We are,
D however, in agreement with the observations of Earl Cairns, L.J. in Julius
referred to above wherein His Lordship stated;
"(W)here a power is deposited with a public officer for the
purpose of being used for the benefit of persons who are
specifically pointed out, and with regard to whom a definition is
E supplied by the Legislature of the conditions upon which they are
entitled to call for its exercise, that power ought to be exercised,
and the Court will require it to be exercised'.

(emphasis supplied)
F 45. In the case on hand, considering the legislative scheme as also
Rules and particularly Rules relating to constitution of Committee, namely,
the U.P. Molasses Advisory Committee Rules, 1965, in our opinion,
investment of power in the State Government is not merely enabling or
discretionary. It is obligatory on the Government to constitute a Committee
G to carry out the purpose and object of the Act. The Committee has to
perform an important role of advising the State Government "on matters
relating to the control of storage, preservation, gradation, price, supply
and disposal of molasses". The constitution of the Committee, as envisaged
by Rule 3 of the 1965 Rules clearly shows the representation of various
H groups and interests likely to be affected. Rule 11 requires the Chairman
M/S.DHAMPURSUGARMILLSLTD. v. STATEOFU.P. 265
[T~AKKER, J.]

(Controller of Molasses) to "give due consideration of the resolutions A
->-
passed by the Committee and forward it to the State Government for
orders together with a copy of the proceedings and his recommendations".
In our considered opinion, it is not open to the State Government to ignore
this salutary provision taking specious plea that the provision relating to
constitution of Committee is enabling, directory or discretionary and State, B
therefore, is not obliged to constitute such Committee. In our judgment,
the High Court was not right in upholding the argument of the respondents.
We, therefore, hold that in accordance with the provisions of 1964 Act,
the Rules framed thereunder as also under 1965 Rules, it is the duty of
the State Government to constitute Advisory Committee. We accordingly c
direct the State of Uttar Pradesh to constitute Advisory Committee as
'expeditiously as possible.
46. For the foregoing reasons, in our opinion, the appeal deserves
to be allowed and the order of the High Court deserves to be set aside.
It is, accordingly held that the directive issued by the respondents would D
not apply in case there is no balance stock of molasses with any sugar
mill. The respondent-authorities have no right to compel such sugar mills
to supply 20% molasses for the purpose of manufacturing country liquor.
47. We may, however, make one thing clear. As seen above, the E
assertion of the appellant was that it has no balance stock and even for
its own requirement, it has to import molasses. On the other hand, the
allegation of the respondents is that excess and balance molasses was
available with the appellant which it had sold in open market. The High
Court, in the impugned order has not decided the question finally. Quoting
certain paragraphs from the writ-petition, the High Court observed that F
there was no proper pleading and as such, the Court was not in a position
to go into the question. It is, therefore, made clear that it is open to the
respondents to take appropriate action in accordance with law on the basis
of our decision and observations made in this judgment.
G
48. The appeal is allowed to the extent indicated above. On the facts
and in the circumstances of the case, however, the parties will bear their
own costs.
B.B.B. Appeal partly allowed.
H