Essential Commodities Act 1955, S. 3 and Sugarcane (Control) Order 1966, Clause 8-Notification by Cane Commissioner-Imposition of a ban for a month and half on operation of power crushers of Khandsari units in reserved area of mill Validity of Exemption in favour of vertical power crushers-Whether discriminatory and justified.

In the State of Uttar Pradesh, sugarcane was produced by the sugarmills through the 'hydraulic process' and by the power crushers through the 'open pan process'. Both the mills as also the crushers drew their raw material, namely sugarcane from sugarcane growers. In order to facilitate production by the sugar mills, most of which were controlled by the State, reserved area of the fields growing sugarcane was fixed through out the State.

With a view to removing nation-wide shortage of sugar, enhancing sugar production and achieving an equitable distribution of the commodity so as to make it available to consumers at reasonable rates, the Cane Commissioner in exercise of the powers conferred under clause (8) of the Sugarcane (Control) Order, 1966 issued a notification dated 9th October, 1980 which directed that no power crusher other than vertical power crushers manufacturing gur or rab from sugarcane grown on their own fields or a Khandsari unit or any agent of such owner in the reserved area of a mill could be worked until December 1, 1980.

The petitioners who were owners of power crushers of Khandsari units and had taken out regular licences under the Uttar Pradesh Khandsari Sugar Manufacturers Licensing Order 1967, assailed the notification which limited the ban to work power crushers for a period of one month and a half i.e. from October 9. 1980 to December 1, 1980 in writ petitions to this Court. They contended: (1) The notification, as also the Control Order under which it was passed are violative of Article 19(1)(g) and the restrictions contained therein do not contain the quality of reasonableness. (2) Clause 8 of the Control Order under which the notification had been issued suffers from the vice of excessive delegation of powers and is, therefore, violative of Article 14 of the Constitution. The Notification seeks to establish a monopoly in favour of the sugar mills at the cost of the petitioners, and must be struck down as being violative of Article 14. (3) There is no rational nexus between the prohibition contained in the Notification preventing the crushers of petitioners from working them and the object sought to be achieved by it. (4) Clause 8 of the Control Order does not contemplate a complete prohibition of the production of an article but envisages only a regulation of the period of hours of working. (5) The Notification violates the principles of natural justice inasmuch as it was passed without hearing the petitioners whose rights were curtailed as they were put completely out of production. (6) The impugned Notification by imposing a prohibition against the working of the power crushers amounts to a partial revocation of the licences granted to the petitioners under clause 3 of the Licensing Order and is, therefore violative of clause 11. (7) The impugned Notification goes against the very spirit and object of the Act of 1955 and in fact, frustrates the equal distribution and production of sugar which was the objective of the Notification.

On behalf of the respondent State it was submitted that (1) An order passed under clause 8 of the Control Order is of a legislative character and there- fore the question of the application of the principles of natural justice, does not arise. (2) The notification does not violate Article 14 or Article 19 because it is in public interest and aimed at maintaining and securing proper and equitable distribution of sugar. (3) The Notification is justified by the fact that the recovery of sugar from sugarcane in case of Khandsari units run by power crushers is between 4 to 6 per cent whereas in the case of sugar factories it ranges between 9-1/2 to 11-1/2 per cent, so that utilisation of sugarcane in the case of mills is double of that of the power crusher. (4) The Khandsari produced by the crushers has got a very narrow sphere of consumption as it is used mostly by halwais or villagers, whereas sugar produced by the sugar mills is consumed in far larger quantities by the public. The action taken in order to protect national interest and distribution of sugar to the entire country on rational basis cannot be said to be an unreasonable restriction. (5) There is a marked difference between the quality of Khandsari and that of sugar produced by the mills in their character, specification, etc. (6) The question of natural justice does not arise because the crusher owners were fully aware of the situation and had also knowledge of the considerations which prevailed with the Government in stopping crushers for a short period in order to boost production by the sugar mills and fix support price for the sugarcane supplied to the mills. (7) Clause 8 of the Control Order uses the words 'period or working hours' which are wide enough to embrace within their ambit a fixed period of time covering more than a day as also hours of work on any working day.