Holding

A repealed rule does not revive after the substituted rule becomes inoperative, and Section 6‑C of the Uttar Pradesh General Clauses Act does not apply to statutory rules.

Summary

The West U.P. Sugar Mills Association and other sugar factories challenged a circular issued by the Uttar Pradesh Cane Commissioner that, after the expiry of a temporary amendment (Rule 49) prescribing a society commission of 2.69% of the minimum statutory cane price, the commission should revert to 5%. The factories argued that the old Rule 49, which had been repealed and substituted by the temporary rule, could not revive once the latter ceased to operate, and that Section 6-C of the Uttar Pradesh General Clauses Act did not apply to statutory rules. The Supreme Court examined the legislative intent behind the substitution, held that the old rule was expressly repealed and not intended to revive, and noted that Section 6‑C is not incorporated by Section 20 for statutory instruments. Consequently, the Court ruled that the old rule did not revive and the State had no authority to impose the 5% commission. The appeal and the connected writ petition were allowed, setting aside the High Court’s order.

Issues considered

Whether a repealed statutory rule revives when the substituting rule ceases to be operative.
Whether Section 6‑C of the Uttar Pradesh General Clauses Act applies to statutory rules and thus causes revival of the old rule.
Whether the State Government could lawfully charge the society commission at 5% after the temporary Rule 49 expired.

Subjects

statutory rulerepealsubstitutionrevival of repealed ruleSection 6-CGeneral Clauses Actsociety commissionsugarcaneadministrative law

Judgment

WEST U.P. SUGAR MILLS ASSOCIATION AND ORS. A
v.
STATE OF U.P. AND ORS.

FEBRUARY 7, 2002

[V.N. KHARE, S.N. PHUKAN AND ASHOK BHAN, JJ.] B

LE•gislative Intention:

U.P. Sugarcane (Regulation of Supply and Purchase) Act, 19531 U.P.
Sugarcane (Regulation of Supply and Purchase) Rules, 1954-Sections 18 C
and 281.'?.ule 49-Sugar factories to pay society commission to cooperative
cane societies towards administrative expenses-Amendment of rule 49
providing society commission-Old rule 49 substituted by new rule 49-
Substituied new rule operative for ftxed period-Effect of old rule when
substituted rule ceases to be operative-Held, old rule does not revive, since D
legislatiFe intention is to repeal the old rule and substitute it with new one.

Ur der Section 18 of the U.P. Sugarcane (Regulation of Supply and
Purchas1!) Act, 1953, appellants-sugarcane factories are required to pay a
commis!.ion as society commission to the respondents-cooperative cane
societies and the rate of commission is to be determined and prescribed by E
the State Government by the statutory rules. State Government amended rule
49 and revised the society commission and fixed at 5% of the minimum
statutory cane price fixed by the Central Government. Subsequently, it
substitut:d rule 49 by which society commission was at the rate of 2.69% of
the minimum statutory price of sugarcane. Substituted rule remained
operative for the period from l.10.91 to 30.9.92. Thereafter, State Cane F
Commissioner ordered that after 30.9.92 commission shall be charged at the
rate of S'Vo since the substituted rule became inoperative after 30.9.92 and
old rule has revived. Aggrieved, appellant filed a petition challenging the order.
High Cot1rt dismissed the petition holding that on application of Section 6-C
of U.P. General Clauses Act, the repealed or deleted rule 49 revived after G
substitut~d rule 49 ceased to be operative. Hence the present appeal and the
connecteC writ petition.

Appellant contended that after the statutory rule 49 having bt,>en deleted
or repeah'd and substituted by a new rule 49, the old rule 49 does not revive
897 H
898 SUPREME COURT REPORTS (2002) I S.C.R.

A even after the substituted rule ceased to be operative and also that High Court
was not legally justified in applying Section 6-C of the Act.

Respondents contended that since the substituted rule in pith and
substance has been rendered non-existent, the old rule would revive.

B Allowing the matters, the Court

HELD: I. Once the old rule has been deleted or repealed and substituted
by a ne';V rule, old rule would not revive when the substituted rule ceased to
be operative. (902-D-E; 904-C)

C B.N. Tiwari v. Union of India and Ors., [1965) 2 SCR 421; Firm A.T.B
Mehtab Majid and Co. v. State of Madras and Anr., (1963) Supp. 2 435 end
Indian Express Newspaper (Bom) Pvt. Ltd. and Ors. etc. v. Union of India and
Ors., I1985) I sec 641, relied on.

2. The State Government in exercise of power under Section 211 read
D with Section 18 of the U.P. Sugarcane (Regulation of Supply and Purchase)
Act, amended rule 49 by deleting it and substituting the same by a new rule
49 providing the ~oclety commission@2.69% of the minimum statutory cane
price Oxed by the Government of India. The notification clearly and in an
unambiguous terms provided that old rule shall be substituted by the new
E rule. In fact, by doing so, the Government was very clear in its intention that
it is substitutinR on old rule by new one. Had the Government ever Intended
that after 30.9.92 the old rule would revive, it could have added a proviso to
the old rule 49 providing for society commission @ 2.69% with effect from
1.10.91 to 30.9.92. The deliberate commission to provide what has been
contained in the new rule 49 by way of a proviso to old rule 49 shows that
F the State Government intended to repeal the old rule and substitute it by a
new rule 49. (903-E-H)

3. It would have been a different case where a subsequent law which
modified the earlier law held to be void. In such a case, the earlier law shall q-
G be deemed to have never been modified or repealed and, therefore, continued
to be in force. Where it is found that the legislature lacked competence to
enact a law, still amends the existing law and subsequently it is found that
the legislature or the authority was denuded of the power to amend the
existing law, in such a case the old law would revive and continue. But it is
not the case here. It is not disputed that the State Government under Section
H 28 read with Section 18 of the Act, has power to frame rule prescribing the
WEST U.P. SUGAR MILLS ASSN. v. STATE [V.N. KHARE, J.] 899
society commission. The State Government by substituting new rule 49 11ever A
intended to keep alive the old rule. The totality of the circumstances shows
that the old rule w11s deleted and came to be substituted by 11ew rule 49 and,
therefore, after new rule 49 ceased to be operative, old rule 49 did not revive.
(903-H, 904-A-C)

4. Section 20 of the U.P. General Clauses Act shows that several B
provisions of the Act have been made applicable in relation to stlltutory
instruments including the statutory rules issued under any Uttar Pradesh Act.
However, Section 6-C of the Act does not find place in Section 20(2) of the
Act and in absence of application of Section 6-C to the statutory instrument,
including the statutory rule, the contention that after substituted rule 49 ceased C
to be operative and the same having been not re-enacted, the old rule 49
revived deserves to be rejected. [905-C-E)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9453 of
1996.

From the Judgment and Order dated 10.9.93 of the Allahabad High D
Court in C.M.W.P. No. 22515 of 1993.

Sudhir Chandra, Buddy A. Ranganadhan, Achintya Dwivedi for Mis.
J.B.D. and Co., Pramod Swarup, Praveen Swarup, Prashant Kumar, Arvind
Varma for Pradeep Misra for the appearing parties.
E
The Judgment of the Court was delivered by

V.N. KHARE, J. Appellant nos. 4 to 22 before us are the companies
incorporated under the Indian Companies Act and are engaged in the business
•
of production and sale of sugar. These appellants own sugar factories
(hereinafter referred to as 'sugar factories') which are located in various parts F
of the State of Uttar Pradesh. One of the raw material required for production
of sugar is sugarcane which is purchased from sugarcane growers through
sugarcane cooperative societies-which are the respondents in these matters.
The purchase of sugarcane by the sugar factoric;is is regulated under the
provisions ofU.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 G
(hereinafter referred to as the Act). In exercise of power conferred under
Section 28 of the Act, the State Government has framed rules known as the
U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954 (hereinafter
referred to as the Rules). Section 18 of the Act requires the sugar factories
to pay a commission known as society commission to the cooperative cane
societies a share of which is also trnnsferred to the Cane Development Council. H
900 SUPREME COURT REPORTS [2002] I S.C.R.

A The rate at which the said commission is payable is left to be determined and
prescribed by the State Government by the statutory Rules. The share of
commission which comes to the cooperative societies is to cover their
administrative costs, which include mainly the maintenance of staff deputed
for undertaking various cooperative activities connected with the sale of
B sugarcane to the sugar factories.

In the year 1985, the government ofUttar Pradesh by amending rule 49
of the Rules raised the society commission to .50 paise per quintal vide
notification dated 11.7.85 Subsequently, the government ofUttar Pradesh by
a subsequent notification dated 1.6. 91 again amended rule 49 and revised the
C rate of society commission from the existing rate of .50 paise per quintal to
5% of the minimum statutory cane price fixed by the Central Government.
After the existing rate of commission was enhanced, the appellant jointly
submitted representation before the State Government, inter alia, contending
that enhancement is excessive and arbitrary. Simultaneously, the appellants
also filed writ petition challenging the enhancement of society commission.
·D However, in January 1992, the writ petition was withdrawn.
It appears, the State Government on the representation of the appellants
reduced the rate of society commission from 5% of the minimum statutory
price of sugarcane to 2.69% of the minimum statutory price of sugarcane
which worked out to .70 paise per quintal. This was done by the amendment
E of rule 49 of the Rules by notification dated 24.4.92. The notification dated
24.4.92 runs as under :

"I. (1) These rules may be called the Uttar Pradesh Sugarcane
(Regulation of supply and Purchase) (Amendment) Rules, 1992.

(2) They shall remain in force with effect from 1.10.91 to 30.9.92.
F
2. In the Uttar Pradesh Sugarcane (Regulation of Supply and Purchases)
Rules, 1954, for the rules set out in column 1 below, the rules as set
out in column 2 shall be substituted :-
Column 1. Column 2.
Existing Rules Rules as hereby substituted
G
49. The occupier of a factory 49. The occupier of a factory
shall pay a commission on cane shall pay a commission on cane
purchased at the rate of five per cent purchased at the rate of 2.69% of
of the minimum statutory cane price the minimum statutory cane price
H fixed by the Govt. of India, out of fixed by the Govt. of India, out of
WESTU.P. SUGAR MILLS ASSN. v. STATE [V.N. KHARE,J.] 901

which seventy five per cent shall be which seventy five per cent shall be A
payable to the cane growers' payable to the cane growers' co-
cooperative society and twenty five operative society and twenty five per
percent to the Council. cent to the Council.

Amount thus calculated at the
rate of 2.69% per quintal will be B
calculated to the nearest round figure
to facilitate maintaining proper
accounts."

(Emphasis is mine) C
The affect of the aforesaid notification was that existing rule 49 was
deleted and in its place new rule 49 was substituted. However, the substituted
rule remained operative from 1.10.91 to 30.9.92. It is not disputed that the
appellants herein continued to pay the society commission on the basis of
substituted rule 49 i.e. @ 2.69% of the minimum statutory price of sugarcane.
After 30.9.92, the Cane Commissioner of Uttar Pradesh issued a circular to D
the effect that the society commission after 30.9.92 shall be charged@ 5% .
of the minimum statutory price of sugarcane fixed by the Central Government
on the premise that since the substituted rule came to be inoperative after
30.9.92, the old rule 49 has revived.

Since the respondents insisted to charge society commission @ 5% of
E
the minimum statutory price of sugarcane fixed by the Central Government,
it is alleged that the appellants were compelled to file a writ petition before
the High Court of Judicature at Allahabad. In the said writ petition, the
appellants challenged the order dated _5.1.93 passed by the Cane Commissioner
whereby and whereunder the Cane Commissioner issued direction to realise F
society commission @ 5% of the minimum statutory price of sugarcane,
fixed by the Central Government.

One of the grounds of challenge of the said circular was that once the
old rule 49 having been deleted and substituted by new rule 49 providing for G
2.69% of the minimum statutory price of sugarcane even thougli it has ceased
to be operative after 30.9.92, the old fuel does not revive and the respondents
have no authority in law to charge society commission @ 5% of the minimum
statutory price of sugarcane. The High Court was of the view that on the
application of Section 6-C of the U.P. General Clauses Act, the repealed or
deleted rule 49 revived after the substituted rule 49 ceased to be operative. H
902 SUPREME COURT REPORTS [2002) I S.C.R.

A In that view of the matter, the writ petition was dismissed. It is against the
said judgment and order of the High Court, the appellants have filed the
present appeal by way of special leave petition and there is also a connected
writ petition under Article 32 of the Constitution, challenging the impugned ,...
society commission.

B Learned counsel for the appellants raised two submissions. The first
submission is that, after the statutory rule 49 providing for society commission
@ 5% of the minimum statutory price of sugarcane having been deleted or
repealed and substituted by a new rule 49, providing for society commission
@ 2.69% of the minimum statutory price of sugarcane, the old rule 49 does
C not revive even after the substituted rule ceased to be operative. The second
argument is that, in any event of the matter, the High Court was not legally
justified in applying Section 6-C of U.P. General Clauses Act for holding that
after the substituted rules having become inoperative, the old rule 49 would
revive. Whereas, learned counsel appearing for the respondents urged that
since the substituted rule in pith and substance has been rendered non-existent,
D the old rule would revive and the respondents have a right to charge society
commission at the rate under the old rules.

On the argument of learned counsel for the parties, the first question
that arise for our consideration is that once the old rule has been deleted or
repealed and substituted by a new rule, whether the old rule would revive
E when the substituted rule ceased to be operative.

In B.N Tiwari v. Union of India and Ors., [1965] 2 SCR 421, the
question whether the old rule revives after the substituted rule was struck
down came up for consideration before this Court. In the said case, the
Central Services Rule of 1952 provided for carry forward rule whereby the
F unfilled reserved vacancy of a particular year could be carried forward for
one year. In the year 1955, the said 1952 rule was substituted by another rule
providing that unfilled reserved vacancies of a particular year would be carried
forward for two years. Su~sequently, the 1955 rule was declared ultra vires.
In that context, the question arose whether the 1952 rule had revived after the
G 1955 rule was struck down. A Constitution Bench of this Court held that old
1952 rule having repealed and substituted by the 1955 rule, the old 1952 rule
would not revive after the 1955 rule was struck down by this Court.

• In Firm A. T.B. Mehtab Majid and Co. v. State of Madras and Anr•.
( 1963) Suppl. (2) 435, it was held that where an old rule has been substituted
H by a new rule, it ceases to exist and does not get revive when the new rule
-{
WEST U.P. SUGAR MILLS ASSN. v. STA TE [V.N. KHARE, J.] 903
is held invalid. A
In Indian Express Newspaper (Bom.) Pvt. Ltd and Ors. v. Union of
India and Ors., (1985] I SCC 641, the Government of India issued a
notification dated July 15, 1977, which was in force prior to March I, 1981
under which total exemption had been granted. Subsequently, the said
notification was substituted by another notification dated March I, 1981. The B
question arose whether the old notification dated July 15, 1977 would revive
on quashing of the notification dated March I, 1981. This Court held that on
striking down of subsequent notification, the repealed notification does not
revive.

We are in total agreement with the statement of law declared by this C
Court in the aforesaid decisions.

In the present case, sub-section (I) of Section 18 of the Act provides
that there shall be paid by the occupier of a factory or a Gur, Rab or Khandsari
sugar manufacturing unit a commission for every one maund of cane purchased D
by the factory or sugarcane manufacturing unit. Sub-section (2) of the said
Section further provides that a commission payable under sub-section (I)
shall be at such rates as may be prescribed by the State government. Under
Section 28 of the Act, the State government is empowered to frame rules
prescribing the rate of commission payable by the occupier of the factory or
manufacturing unit. E
The government of U.P., in exercise of power under Section 28 read
with Section 18 of the Act, amended rule 49 by deleting it and substituting
the same by a new rule 49 which provided the society commission @ 2.69%
of the minimum statutory cane price fixed by the Government of India. The
notification dated 24.4.94 which has been extensively extracted above very F
clearly and in an unambiguous terms provided that old rule set out in column
I below the rules shall be substituted by the rule set out in column 2. In fact,
by doing so, the government was very clear in its intention that it is substituting
an old rule by a new one. Had the government ever intended that after
30.9.92 the old rule would revive, it could have added a proviso to the old G
rule 49 providing for society commission@ 2.69% with effect from 1.10.91
to 30.9.92. The deliberate omission to provide what has been contained in the
new rule 49 by way of a proviso to old rule 49 shows that the State government
intended to repeal the old rule and substitute it by a new rule 49.

It would have been a different case where a subsequent law which H
904 SUPREME COURT REPORTS [2002) I S.C.R.

A modified the earlier law held to be void. In such a case, the earlier law shall
be deemed to have never been modified or repealed and, therefore, continued
to be in force. Where it is found t!iat the legislature lacked competence to
enact a law, still amends the existing law and subsequently it is found that
the legislature or the authority was denuded with the power to amend the
existing law, in such a case the old law would revive and continue. But it is
B not the case here. It is not disputed that the State government under Section
28 read with Section 18 of the Act, has power to frame rule prescribing the
society commission. The State government by substituting new rule 49 never
intended to keep alive the old rule. The totality of the circumstances shows
that the old rule was deleted and came to be substituted by new rule 49 and,
C therefore, we are of the view that after new rule 49 ceased to be operative,
the old rule 49 did not revive.

-
Learned counsel for the respondent then pressed into service sub-section
(2) of Section 6-C of the U.P. General Clauses Act and contented that where
any amendment of text is made by any temporary U.P. Act or by an Ordinance,
D or by any law made in exercise of the power of the State Legislature by the
President, such Act, Ordinance or other law ceases to operate without being
re-enacted, the amendment of text made thereby shall also cease to operate.
It was, therefore, strongly argued that on application of Section 6-C of the
U .P. General Clauses Act, After substituted rule 49 ceased to be operative
E and the same having been not re-enacted, the old rule 49 revived. The
contention has no merit. Section 6-C of the U.P. General Clauses Act runs
as under:

"6-C. Repeal or expiration qf law-making textual, amendments in
other laws.-(!) Except as provided by sub-section (2), where any
F Uttar Pradesh Act amends the text of any Uttar Pradesh Act or
Regulation by the express omission, insertion or substitution of any
matter, the amending enactment is subsequently repealed, the repeal
shall not affect the continuance or any such amendment made by the
enactment so repealed and in operation at the time of such repeal.
G (2) Where any such amendment of text is made by any temporary
Uttar Pradesh Act or by an Ordinance or by any law made in exercise
of the power of the State Legislature by the President or other authority •
referred to in sub-clause (a) of clause (I) of Article 357 of the
Constitution, and such Act, Ordinance or other law ceases to operate
H without being re-enacted (with or without modifications) the
WESTU.P. SUGAR MILLS ASSN. v. STATE[V.N. KHARE, I.] 905
amendment of text made thereby shall also cease to operate." A
Section 20 of the U.P. General Clauses Act provides that where, by any
Uttar Pradesh Act, a power to issue any statutory amendment is conferred,
then expressions used in the statutory instruments shall, unless there is anything
repugnant in the subject or context, have the same respective meanings as in
the Act conferring the power. Sub-section (2) thereof further provides that B
the provisions of Section 4, 4A, 6, 6A, 68, 7, 8, 9, 10, lOC, 11, 12, 13, 14,
15, 16, 17, 18, 19, 19A and 28 shall mutatis mutandis apply in relation to any
statutory instrument issued under any Uttar Pradesh Act as they apply in
relation to any Uttar Pradesh Act.

A perusal of Section 20 shows that several provisions of Uttar Pradesh C
General Clauses Act have been made applicable in relation to statutory
instruments including the statutory rules issued under any Uttar Pradesh Act.
However, Section 6-C does not find place in sub-section (2) of Section 20 of

- the U.P. General Clauses Act. In absence of application of Section 6-C to the
statutory instrument, including the statutory rule, which is the case before us, D
the contention of the respondents deserves to be rejected. Since Section 6-C
of the U.P. General Clauses Act has not been applied to the statutory rule
framed by the government ofUttar Pradesh, the substituted rule after it became
inoperative, old rule 49 would not revive.

For the aforesaid reasons. we are of the view that these matters deserve E
to be allowed.

Before we part with the case, we would like to observe that learned
counsel for the appellant stated that they have paid the society commission
on the basis of substituted rule or whatever they have paid towards the
society commission, as per the respondents' demand, they would not claim F
any refund of the same. Under such circumstances, we feel that no further
order is required to be passed in that regard.

In view of what we have stated above, the judgment and order under
challenge is set aside. The appeal as well as the writ petition are allowed. G
There shall be no order as to costs.

~N.J. Appeal and petition allowed.