TMI Blog1986 (5) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the supply of cane to factories. The immediate factor affecting the economy is the recovery of sugar from sugarcane and the sugar content in the cane produced goes a long way to determine the cost of sugar. Thus the sugar factories which were purchasing sugarcane yielding low recovery are distinguishable as a class separately from those which did not fall in it and there was a reasonable basis to classify those left out of that group. - Civil Appeal No. 1774 of 1980, - - - Dated:- 2-5-1986 - BHAGWATI P.N., CHINNAPPA REDDY O., MISRA R.B., KHALID V. AND OZA G.L. JJ. -------------------------------------------------- The judgment of the Court was delivered by R.B. MISRA, J. -The present group of appeals directed agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fixed by this notification for the area in which the petitioner's factory was situated was Rs. 8.38 per quintal. The cane growers felt agitated as according to them, the price fixed was much too low. They, therefore, made representation to the U.P. Government and as a result thereof the U.P. Government intervened in the matter and fixed sugarcane price at Rs. 12.25 per quintal for the sugar mills situated in the east zone. According to the petitioner, however, the price fixed was exorbitant and as the petitioner and other sugar factories were likely to suffer enormous losses, the sugar factories approached the State of U.P. and brought to its notice that they were not in a position to pay the higher sugar- cane price. The stand of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-A(1) provides that no owner of a factory shall remove, or cause to be removed any sugar produced in the factory either for consumption or for sale, or for manufacture of any other commodity in or outside the factory, until he has paid the tax levied under section 3, a sum specified under sub-section (2), sub-section (3) or sub-section (4). The next relevant section with which we are directly concerned is section 14. It confers powers on the State Government to grant remission. As the decision of these appeals hinges upon the interpretation of section 14(1), it would be advisable to read the section in full. Section 14(1) reads: "14. (1) The State Government, on being satisfied that it is necessary so to do in the public interest, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng them differently. The power conferred by clause (a) of section 14(1) of the Act, the counsel contends, could not be confined to factories purchasing sugarcane yielding low recovery inasmuch as this was a consideration foreign to the purpose contemplated by clause (a) of section 14(1) of the Act. The three clauses of sub-section (1) of section 14 of the Act have different object and purpose. The purpose of granting the power of remission under clause (a) is "encouragement and regulation" of the supply of sugarcane, the object of clause (b) is to encourage the establishment of new factories, and that of clause (c) is to assist factories established after the crushing season 1957-58 and purchasing sugarcane yielding low recovery. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of remission were founded on a ground extraneous to the provisions of section 14. The notifications issued by the State Government clearly show that the remission was granted with the sole object of encouraging and regulating the supply of sugarcane to these factories. The exercise of the power by the State Government was in accordance with the provisions of clause (a), sub-section (1) of section 14, and that by granting the remission to a few sugar factories it did not frustrate the purpose of the aforesaid provision. The use of the expression "encourage or regulate" clearly indicates that the factories which really need encouragement or regulation should get the benefit of the remission under clause (a) of sub-section (1) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been advanced against the validity of the notification on that basis. Under clause (c), remission is granted by way of support or aid to newly established factories to lessen the cost so that they could profitably compete in the market. The remission under clause (c) has to be confined to new factories which is a different category of sugar factories. The considerations needed for exercising the power under clause (c) are different from those under clause (a) or (b). Considered from this aspect there is no discrimination at all. Article 14 of the Constitution forbids class legislation but permits reasonable classification. It however must fulfil the twin requirements: (1) it must be founded on an intelligible differentia which distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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