TMI Blog1998 (9) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceeding that prescribed in the Schedule. Under sub-section (2) of Section 10the State Government may, by notification in the Gazette, amend the Schedule if such amendment is necessitated by reason of any variation in the cost of storage of molasses or loading or shunting charges of molasses in tank wagons or in order to bring the prices of molasses in conformity with the prices, if any, fixed by the Government of India. Under the said orders of the Controller dated 13.8.1993, 22.10.1993 and 1.1.1994, different percentages of graded molasses were reserved for distilleries and industries based no molasses and alcohol, in the State of U.P. The reserved quantity under the said orders was required to be sold at prices fixed by the State Government under the notification issued under sub-section (2) of Section 10 at the relevant time. The appellants have challenged the constitutional validity of the U.P. Sheera Niyartaran Adhiniyam 1964 on the ground that the State Legislature lacked competence to pass the Act. They have also challenged the restrictions imposed on the sale of molasses under the said Act and the said orders made thereunder as unreasonable restrictions violati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... although the Central Molasses Control Order of 1961 was never extended to the State of U.P. the State Government would notify the maximum price of molasses under Section 10 of the U.P. Act of 1964 in consonance with the maximum price prescribed by the Central Government under the Molasses Control Order of 1961. Identical notifications were issued by the Central Government and the State Government relating to the price of molasses every year. On 10.6.1993 the Molasses Control Order, 1961 and the Ethy1 Alcohol Price Control Order were rescinded by the Central Government by two separate notifications of the same date. In the State of U.P. however, the U.P. Sheera Niyantaran Adhiniyam, 1963 continued to operate despite the repeal of the Central Molasses Control Order, 1961. The State Government thereafter issued three notifications of 13.8.1993, 22.10.1993 and 1.1.1994 under the U.P.Sheera Niyantaran Adhiniyam, 1964. This gave rise to the present litigation. According to the appellants, by reason of the Industries (Development and Regulation) Act, 1951 and Entry 25 in the First Schedule to the said Act, all legislation pertaining to sugar industry is within the exclusive domain of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm industry which was used in both these entries. This Court held that in the first place, whatever be the connotation of industry , it must bear the same meaning in Entry 24 List of II as in Entry 52 of List I because the two entries are interconnected, and giving different meaning to the word industry in the two entries will snap their connection. this Court further observed that ordinarily industry was in the field of State Legislation; but, if Parliament by law makes a relevant declaration or declarations, the industry or industries so declared would be taken off the state field and passed on to Parliament. This Court in that case was concerned with interrelationship between Entry 52 List I, Entry 24 List II, and Entry 25 of List II. The last entry expressly dealt with gas and gas works. This Court held that if Entry 24 of List II is interpreted to include within the term industry , gas and gas works, Entry 25 of List II would be emptied of all its contents and would become nugatory. Therefore, one should apply the principle of harmonious construction and hold that gas and gas works would be outside the term industry under Entry 24 of List II. If this was so, then ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the essence of a Federal Constitution that there should be distribution of legislative powers between the Centre and the States. When the Constitution enumerates elaborately the topics on which the Centre and the States can legislate, some overlapping over the fields of legislation is inevitable. Therefore, to decide whether an impugned legislation is intra vires regard must be had to its pith and substance. If a statute is found in substance to relate to a topic within the competence of that Legislature it should be held to be intra vires, even though it might incidentally trench on topics not within its legislative competence. The extent of the encroachment may be an element in determining whether the legislation is colorable, but where that is not the position, the fact of encroachment does not affect the vires of the law. To determine this one must have regard to the enactment as a whole, to its objects and to the scope and effect of its provisions. In the light of these entries if one looks at Section 2 of the Industries (Development and Regulation) Act, 1951, Section 2 clearly declares an industry which is in the First Schedule as an industry falling under Entry 52 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the power of the State of U.P. under Entry 33 List III to legislate in relation to the trade and commerce in or supply and distribution of molasses in that State was not taken away, in any event, irrespective of Article 254of the Constitution of India. In this connection our attention was drawn to the observations of this Court in Ch. Tika Ramji's case (supra). The Court in that case was concerned with the legislative competence of the State Government to legislate in respect of sugarcane in the light of Section 18G of the Industries (Development and Regulation) Act, 1951. This Court observed (at page 432) that even assuming that sugarcane was an article relatable to the sugar industry within the meaning of Section 18G, no order had been issued by the Central Government in exercise of the powers vested in it under that section. Hence no question of repugnancy would arise. Repugnancy must exist in fact and not depend merely on a possibility. Ch. Tika Ramji's case (supra) has been cited with approval in the more recent case of Indian Aluminium companyLtd. and Anr. V. Karnataka Electricity Board and Ors. (1992 3 SCC 580) where this Court again held that in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e industry. The raw materials would be goods which would be comprised in Entry 27 of List II. The process of manufacture or production would be comprised in Entry 24 of List II except where the industry was a controlled industry when it would fall within Entry 52 of List I and the products of the industry would also be comprised in Entry 27 of List II except where they were the products of the controlled industries when they would fall within Entry 33 List III. In the case of (third) State of U.P. and Anr. V. Synthetics and Chemicals Ltd. and Anr. (1991 4 SCC 139) this Court explained certain observations made in the earlier Synthetics and Chemicals case (supra). What is however, relevant for our present purposes is to note that the case of Ch. Tika Ramji (supra) has been relied upon by this Court and this Court has reaffirmed that the power to control industry being vested in Parliament (Entry 52 of List 1) and the legislative power in respect of trade and commerce in the product of such industry being concurrently vested in the Union and the States (Entry 33 of List III) any exercise of control by the State by legislation under Entry 33 List III must be subject to and tin acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the year 1947 and this was not challenged. The State Government has tried the policy of partial decontrol by the notification of 13.8.1993 under which the State kept control only over 30% of the molasses and the sugar industry owners were left free to sell 70% in the open market subject to certain regulatory provisions. The impact of such partial decontrol had been watched and judged. By another order of 31.12.1993, the ratio of controlled over uncontrolled molasses was substantially changed. The percentages of permissible sales in the control zone and in the free market have had to be changed depending upon the economic impact of such decontrol. The respondents also submitted that molasses is an important raw material for the distilleries which produce industrial alcohol a raw material for chemical industries in the State. To attract various industries to that State, steps were taken from the beginning to facilitate availability of industrial alcohol. A policy of control over molasses is framed bearing in mind the economic requirements of the State and , therefore, this policy should not be now challenged. Respondents have pointed out that industrial development of Uttar Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Forum Ors. etc. V. Union of India 'Anr. etc. (JT 1996 (2) SC 295) and Dalmia Cement (Bharat) Ltd. Anr. etc. V. Union of India Ors. etc. (JT 1996 (4) SC 555). It has also been pointed out by the respondents that in public interest an industry, in the present case, the sugar industry, can be required to make a supply to another industry of their product or by-product. Looking to all the circumstances, the U.P. Sheera Niyantaran Adhiniyam 1964 and the State notifications of 13.8.1993, 22.10.1993 and 1.1.1994 having been held by the High Court as not violative of Article 19(1)(g) of the Constitution, we are inclined to agree with the findings so arrived at by the High Court. In the premises these appeals are dismissed with costs. CIVIL APPEAL NOS OF 1998 (Arising out of SLP (C)Nos.14670/95 and 16925/95) Leave granted. These two appeals pertain to the distribution and price control over molasses in the State of Bihar. In 1947 the Bihar State Legislature had enacted Bihar Molasses (Control) Act, 1947 with the assent of the Governor General. Initially the Act was intended to remain in force only for one year. But from time to time various Acts were passes by the St ..... X X X X Extracts X X X X X X X X Extracts X X X X
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