The Supreme Court held on Wednesday that only the Centre has the exclusive power to fix the minimum price of sugarcane and the state government can only fix the remunerative or advised price which has to be higher than the one fixed by the Union government.
The top court held that in a case where the advised price fixed by the state is lower than the minimum price fixed by the Centre, the provisions of the central enactments will prevail.
It said that there cannot be any inconsistency or conflict between the prices fixed by the Centre and the state as the advised price has to be higher than the minimum price fixed by the Union government.
A five-judge Constitution bench headed by Justice Arun Mishra upheld the view taken by the apex court in its 2004 verdict in U.P. Cooperative Cane Unions Federations and said that there is no need to refer the issue to a larger seven judge bench.
The bench, also comprising Justices Indira Banerjee, Vineet Saran, M R Shah and Aniruddha Bose, said in its finding, by virtue of Entries 33 and 34 List III
of seventh schedule, both the Central Government as well as the State government have the power to fix the price of sugarcane.
"The central government having exercised the power and fixed the minimum price', the state Government cannot fix the minimum price of sugarcane.
It further said, However, at the same time, it is always open for the State Government to fix the advised price which is always higher than the minimum price, in view of the relevant provisions of the Sugarcane (Control) Order, 1966, which has been issued in exercise of powers under Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953.
The top court's 79 page verdict came on the issue whether a Uttar Pradesh government has the power to fix the price at which sugarcane can be bought or sold and whether the price fixed will be in conflict with the price fixed by Centre.
The bench said, that the Sugarcane (Control) Order, 1966 which has been issued under provisions of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 confers power upon the State Government to fix the remunerative/ advised price at which sugarcane can be bought or sold which shall always be higher than the minimum price fixed by the Central Government.
It said that provisions of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 is not repugnant to the Essential Commodities Act, 1955 as the price which is fixed by the Central Government is the minimum price and the price which is fixed by the State Government is the advised price which is always higher than the minimum price fixed by the Central Government and therefore, there is no conflict
The top court said that so long as the advised price fixed by the State Government is higher than the minimum price fixed by the Central Government, the same cannot be said to be void under Article 254 of the Constitution.
A three-judge bench of apex court had in 2012 referred to a larger bench the question that there may be a conflict of opinion in two five-judge verdicts of Tika Ramji of 1956 and UP Cooperative Cane Unions Federations of 2004, which dealt with the pricing of Sugarcane.
Answering the reference made by the three judge bench of the apex court, the Constitution bench said it is clear that the factual matrix and the relevant provisions which fell for consideration before this Court in both the cases were altogether different.
Therefore, we are of the opinion that as such there is no apparent conflict between the decisions in Tika Ramji's case and U.P. Coop. Cane Unions Federations, which require to be referred to a larger bench of seven judges, the bench said, adding that the view taken in the case of U.P. Cooperative Cane Unions Federations is the correct law.
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