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PETITIONER: SUKHNANDAN SARAN DINESH KUMAR & ANOTHER ETC. ETC.

       Vs.

RESPONDENT: UNION OF INDIA & ANOTHER ETC. ETC.

DATE OF JUDGMENT03/03/1982

BENCH: DESAI, D.A. BENCH: DESAI, D.A. VARADARAJAN, A. (J)

CITATION:  1982 AIR  902            1982 SCR  (3) 371  1982 SCC  (2) 150        1982 SCALE  (1)165

ACT:      Sugar Cane  (Control) Order  1966, Clauses 3, 3A, 4 and 4A &  U.P. State  Government Notification dated September 3, 1980.      Sugar Cane brought in bundles-Binding material-Grant of rebate-Whether valid and reasonable.

HEADNOTE:      The raw  material for  manufacturing sugar or Khandsari sugar is  sugarcane. When the vacuum pan process is employed the end  product is  called sugar  and  when  the  open  pan process is  employed the  end product  is  called  Khandsari sugar. In  order to extend protection to the farmers who had undertaken raising of sugarcane crop, the Central Government issued the  Sugarcane (Control) Order 1966. Clause 3 of this Order conferred  power on  the  Central  Government  to  fix minimum price  of sugarcane to be paid by producers of sugar for sugarcane  purchased by them. Clause 4 conferred similar power to  fix the  minimum price to be paid by the producers of khandsari  sugar for  the sugarcane  purchased. Clause 3A which was  introduced on  September 24, 1976 conferred power on the  Central Government  and various other authorities to allow a  suitable rebate  in regard  to the  weight  of  the binding material  not exceeding  0.625 Kg.  per  quintal  of sugarcane, when  sugarcane was  purchased by the producer of the sugar. Later, Clause 4A was introduced on March 20, 1978 to provide  for the  rebate that  can be  deducted from  the price paid for sugarcane by producers of khandsari sugar.      The State Government issued a notification on September 3, 1980  to provide  that  where  sugarcane  is  brought  in bundles and  is weighed  as such,  a rebate in regard to the binding material at 0.625 Kg. per quintal should be allowed. As there  was a  printing error  in  mentioning  the  figure ’0.650 kg.’  a corrigendum  was issued  to  correct  it,  to ’0.625 kg’ per quintal in the notification.      The  petitioners   in  the   writ  petitions  who  were manufacturing  khandsari  sugar  by  the  open  pan  process assailed the  decision  of  the  State  Government  allowing rebate. They  contended that: (1) the power to prescribe the rate of  rebate under  the third  proviso  to  clause  4  is conditional  upon   the  fixing  of  the  minimum  price  of sugarcane and  as the  pre-condition for  exercise  of  that

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power was  not satisfied,  the authorities  cannot  exercise power to prescribe the rate of 372 rebate, (2)  if the  purchaser and  seller of  sugarcane are free agents  to negotiate  the price no useful purpose would be served  by prescribing the rate of rebate statutorily. If higher rebate  is to  be allowed,  the producer of khandsari sugar and  the grower  of sugarcane would work out the price accordingly and  if less  rebate is  allowed, it will have a direct impact on the negotiated price, (3) assuming that the power to  prescribe the  rate of rebate under clause 4A read with the  third proviso  could also  be exercised  where the price of  sugarcane was  left to  be negotiated  between the growers of  sugarcane and  the producers of khandsari sugar, the quantum  of rebate  determined must  have  a  reasonable relation to  the reality  of market  situation as well as to prevalent trade  practice, (4)  assuming  that  the  Central Government  was   influenced  by  the  report  made  by  the Director, National  Sugar Institute the report suggests that the  average   works  out  at  0.741  kg  per  quintal,  and consequently there was no justification for further reducing it to 0.625 kg, (5) the notification places a restriction on the freedom  of trade guaranteed under Article 19(1) (g) and as it  is neither reasonable nor imposed in public interest, it is  violative of freedom of trade and therefore void, and (6) in  order that  a restriction  may be reasonable it must have a  reasonable relation  to the object which the statute seeks to achieve and must not be in excess of that object.      Dismissing the writ petitions. ^      HELD: The State Government notification dated September 3, 1980 directing that where sugarcane is brought in bundles and is  weighed as  such a  rebate in  regard to the binding material at  0.625 kg  per quintal  be allowed, is valid and legal. The  rebate was statutorily prescribed to ensure that sugarcane growers  were not at the mercy of the producers of sugar and  khandsari sugar. The statutory rebate serves two- fold purpose:  (i) it  ensures price  of sugarcane  avoiding impermissible deductions  and (ii)  it circumvents  fraud by making such  deductions as  would render  illusory even  the negotiated price,  if not  fixed price.  The restriction  is undoubtedly reasonable and is imposed in the interest of the general public  and the guarantee of freedom of trade is not violated.                                      [376 E; 392 H; 393 A-C]      1. (i)  Though clause  3A was  inserted in  the Control Order in  1976 conferring power on the Central Government or with the  approval of  the Central  Government, on the State Government to  allow rebate  at 0.625  kg.  per  quintal  of sugarcane purchased  by manufacturers  of sugar, such rebate was being  prescribed by  the Central Government since 1968. [379 G]      (ii) Clause  4 confers  power on the Central Government or a  State Government  with the  concurrence of the Central Government  to  fix  the  minimum  price  or  the  price  of sugarcane to  be paid  by producers  of khandsari  sugar for sugarcane purchased  by them.  Third  proviso  to  clause  4 provides that the Central Government or with the approval of the Central  Government the  State  Government  to  allow  a suitable rebate in the price so fixed. If the provision were to end  with clause  4, the  question may  arise whether the power to  determine rate  of rebate can be exercised de hors the power  to fix minimum price or price of sugarcane or can be unilaterally  exercised. But  the language  of the  third proviso "...as  it may  specify, allow  a suitable rebate of

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the price so fixed", indicates that the rebate is co-related to the price fixed. [381 C-F] 373      (iii) The  rebate contemplated  by the third proviso to clause 4  is not  necessarily confined to rate of rebate for binding material  only but  permissible rate  of rebate from the price  or minimum  price  fixed  under  the  substantive provision of clause 4 can be prescribed. [381 H; 382 A]      (iv) Clause  4A stands on an independent footing and it is independent  of clause  4. Clause  4A is  neither  inter- dependent nor interrelated to clause 4. Clause 4A visualises a situation  in which  either the minimum price of sugarcane is fixed under clause 4 or where no such price if fixed, the price  agreed  to  between  the  sugarcane  grower  and  the producer who  purchased sugarcane  and even  in this  latter situation the  power to  prescribe rate  of rebate  only  in respect of binding material was conferred on the authorities set out in the third proviso to clause 4A. Therefore, fixing of the  minimum price may be a pre-condition to the exercise of power  under the  third proviso  of clause  4, as  far as clause 4A  is concerned,  even where the price to be paid by the producer  to the  sugarcane grower is the one negotiated between the  two, the  producer or  his agent  will have  to allow that  much rebate  and no more for binding material if notified under  the third proviso. This literal construction accords with  the intendment of the provision. [382 B-E; 383 G]      2. (i)  Sugarcane is a perishable commodity. The grower of the  sugarcane is  at the  mercy of producers of sugar or khandsari sugar. It would be uneconomic for him to transport sugarcane to  a long distance. The product, being perishable and transport  over a  distance being uneconomic, the grower of sugarcane has limited choice in selecting the producer to whom it could be sold. Between the producer of khandsari and the grower  of sugarcane,  the first  one is  primarily in a position to  dominate and dictate and they do not operate on the level  of equality.  The grower of sugarcane in relation to the  producer of  the khandsari  sugar would therefore be weaker and  requires to  be protected.  If the protection of fixing of  minimum price  is not  resorted  to  because  the authorities have  information that  the grower  of sugarcane would be  able to  obtain a  reasonably fair  price for  his labour, the  only thing  which is  required to  be protected against  is   iniquitous.  unauthorised   and  impermissible deductions. In  the States  of Uttar  Pradesh and  Bihar the weight of  the binding material when sugarcane is brought in bundles to  the producer  has been a fruitful source for the producers of  khandsari sugar  to make  deductions from  the weight of  sugarcane delivered  to  them  in  an  exorbitant quantity so  as to  deny in  real money worth the negotiated price. [382 H; 388 A-D]      (ii) While  retaining the power to fix minimum price or price to be paid and also in a given situation leaving it to the purchaser  of sugarcane  to negotiate the price in order to eschew any exploitation of the weaker section between the two, the  power to prescribe the rate of rebate was acquired and it  can be rightly enforced. There is therefore no merit in the  submission that unless the power to fix the price or minimum price  is exercised  there is  no power to prescribe the rate of rebate. [383 F-G]      3. The rate of rebate has been determined by the law of averages after  collection information  from  all  over  the country, and the present rate of rebate 374 is in vogue for over a quarter of a century. It is therefore

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difficult to accept the submission that the fixation of rate of rebate  for binding  material at  0.625 kg. for the whole country is  either arbitrary or unreal or unrelated to trade and practice.                                                   [376 G-H]      4. (i)  The differential between what is prescribed and what is  calculated as  average by the study of the National Sugar Institute  is not  so wide as to render the prescribed rate  arbitrary  or  unrealistic.  The  differentials  being within a  narrow range, the one which is in vogue for over a quarter of  a century  cannot be  rejected as  arbitrary  or unrelated to  trade and practice. Nor is the Court competent to work  out the  exact permissible rebate with mathematical accuracy.                                                   [387 D-E]      (ii) The  rate  of  rebate  set  out  in  the  impugned notification bears  resemblance to  the  sample  testing  of actual weight  of binding material used in binding sugarcane when brought in bundles to the khandsari factory. [388 G]      (iii) This does not however imply that no case has been made  for   upward  revision  of  the  rebate.  The  Central Government may  realistically examine  the same  before  the next crushing season commences. [388 G]      5. (i)  It would  be open  to the producer of khandsari sugar to  buy sugarcane  from the grower who may be asked to bring sugarcane not bound in bundles. The rebate for binding material is  to be allowed only when sugarcane is brought to the khandsari  sugar producing  unit bound in bundles. It is always open to the purchaser of sugarcane to insist upon the grower bringing the sugarcane not bound in bundles and he is free to  negotiate the  price of  sugarcane is not fixed and the impugned  notification will  not even  remotely  impinge upon his  freedom to  carry on  his trade.  The  restriction complained of  therefore does  not directly  and proximately interfere with  the exercise of freedom of trade and Article 19(1) (g) is not attracted. [389 E-G]      (ii) Producers  of sugar and khandsari sugar constitute powerful trade lobby, and this can be taken judicial notice. Sugar being  an essential  commodity  occasionally  kept  in short supply and being a commodity needed for consumption by almost the entire population, the powerful industry magnates are in  a position to dominate both the growers of sugarcane as also  the consumers of the essential commodity. Number of regulations have  been enacted  to  regulate  this  powerful combination of  manufacturers of  sugar and  khandsari sugar all over  the country for the ultimate benefit of consumers, the farmers-the  growers of sugarcane. The marginal farmers, are unable  to stand  up against  the organised industry and need protection  for selling  at  fair  price  their  meagre agricultural produce. [391 D-G]      (iii)  Sugarcane   growers  who   are  farmers   cannot negotiate on  the footing  of equality with the producers of sugar  and   khandsari  sugar.  The  State  action  for  the protection of  the weaker sections is not only justified but absolutely  necessary  unless  the  restriction  imposed  is excessive. If  price or minimum price of sugarcane is fixed, the producers  of sugar would try to circumvent the price or minimum price  by unrealistic  and impermissible deductions. The rebate  for weight  of binding  material seems  to be  a source for  indulging  in  this  nefarious,  if  not  wholly fraudulent conduct. 375      6.  To  strike  the  balance  between  the  conflicting interests not  only the  State acquired power to fix minimum price of  sugar and  khandsari sugar but that this wholesome

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effort may  not work  to the  disadvantage of  the sugarcane growers another  weaker section of the society, the power to prescribe rate  of rebate was acquired. And the power to fix price or  minimum price comprehends the power to so regulate supply as to ensure the price so fixed and to ensure that in the name of unauthorised and unwarranted deduction the price fixed or  negotiated is not rendered illusory. [393 G-H; 394 A]

JUDGMENT:      ORIGINAL JURISDICTION:  Writ Petition  Nos. 6443-44/80, 8829-30, 9123-24,  370-87, 777-796,  658-62, 732-63, 824-31, 847-62, 1080-1103, 1131-52, 8916, 9071-74, 9130-32, 9176-79, 8965, 8971-72, 9347-48, 9352-67 of 1981.      (Under Article 32 of the Constitution of India)                             AND      Writ Petitions  Nos. 14-19/82, 333-25, 458-96, 1307-17, 1410-13, 1595, 8268-72 of 1981 and 152 of 1982.      (Under article 32 of the Constitution of India)      C.M. Lodha. in W. P. No. 6443-44/80, Shanti Bhushan, in WP. Nos.  732-63, 3423-25/81-S.N.  Kackar, in  W.P. 777-96 & 1131-52 of  81; R.K.  Jain, S.  Mitter, K.K. Mohan, N.S. Das Bahl,  Rameshwar   Dial  and   Madan  Gopal  Gupta  for  the Petitioners.      G.N. Dikshit and Mrs. Shobha Dikshit for Respondents.      Girish Chandra  and Miss  A. Subhashini  for  Union  of India in W.P. Nos. 6443-44/80.      The Judgment of the Court was delivered by:      DESAI,  J.  Even  an  innocuous  marginally  regulatory measure affecting  the sugar  trade at fringes is sufficient for  this  powerful  industry  to  invade  the  courts  with petitions galore  almost proclaiming  that there  should  be hands off  policy in  respect of  this trade.  The  filimsty albeit untenable  grievance made  in this group of petitions would underscore the truth of what is just stated.      In exercise  of the power conferred by clause (4) third proviso of  the Sugarcane  (Control) Order,  1966,  (Control Order’  for   short),  the  2nd  respondent-State  of  Uttar Pradesh, with the permission of 376 the 1st respondent Union of India, issued Notification dated September 3, 1980, which is impugned in these petitions. The impugned Notification reads as under:      "Sr. No. 398 A (Ka)                       13-38-16, 56                   Government Gazette, U.P.                        Extraordinary                    Legislative Supplement                  Part 4, Section (b) (Kha)                           ...Order           Lucknow, Wednesday, 3rd September, 1980.                         Notification                          P.As.-306      In exercise of the powers conferred by clause 4 proviso 3 of  the Sugarcane  Control Order, 1966, the Governor, with the permission  of the  Central Government,  allows in Uttar Pradesh in respect of Khandsari units, producing Gur, rab or Khandsari sugar,  where sugarcane  is brought in bundles and is weighed  as such,  a rebate  in  regard  to  the  binding material at 0.650 kilograms per quintal.                                                  By Order,                                                  R. Basudev,                                                  Secretary" It was  stated that there was a printing error in mentioning

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the figure  ’0.650 kg.’ and a corrigendum has been issued to correct it to ’0.625 kg.’ per quintal in the Notification.      The allegations in all the petitions are identical and, therefore, we  would state  a few  representative facts from the writ  petition filed  by M/s.  Sukhnandan  Saran  Dinesh Kumar and Another. The petitioners are producers of sugar by open pan  process, the  product being described as Khandsari sugar. This  term is  to be understood in contra-distinction to the marketable commodity called ’sugar’ which is produced by vacuum pan process. The raw material for manu- 377 facturing  sugar   or  Khandsari  sugar  is  sugarcane.  The petitioners  have   set  up   a  factory  for  manufacturing khandsari sugar  by open  pan process.  The petitioners  buy sugarcane from  the sugarcane  growers. In  order to  extend protection to  the farmers  who have  undertaken raising  of sugarcane crop,  the Central  Government issued  the Control Order in exercise of the power conferred by section 3 of the Essential Commodities  Act, 1955. By clause 3 of this order, power was conferred on the Central Government to fix minimum price of  sugarcane to  be paid  by producers  of sugar  for sugarcane purchased  by them. Clause 4 confers similar power to fix  the minimum  price to  be paid  by the  producers of khandsari sugar  for  sugarcane  purchased  by  them.  Other clauses of  the  Order  for  the  present  purpose  are  not relevant. Clause  3A was  introduced  by  GSR  815  (E)/ESS. COM./Sugarcane dated  September 24, 1976, which, inter alia, conferred power  on the Central Government and various other authorities mentioned  therein to allow a suitable rebate in regard to  the weight  of the binding material not exceeding 0.625 kg,  per quintal  of  sugarcane,  when  sugarcane  was purchased  by   the  producer  of  sugar.  Subsequently,  by Notification GSR  197 (E)/Ess.  Com./Sugarcane  dated  March 20,1978, Clause  4A with  the marginal note "Robate that can be deducted  from the  price paid for sugarcane by producers of Khandsari  sugar" was  introduced. Clauses  4 and 4 A are material  for   the  present  discussion  and  they  may  be extracted:      "4.  Minimum price of sugarcane payable by producers of           Khandsari sugar:-           The Central Government or a State Government, with      the concurrence  of the  Central  Government,  may,  by      notification in  the Official  Gazette,  from  time  to      time, fix  the minimum  price or the price of sugarcane      to be  paid by  producers of  khandsari sugar  or their      agents for the sugarcane purchased by them:                x                   x                   x           Provided also that the Central Government or, with      the approval  of  the  Central  Government,  the  State      Government, may  in such  circumstances and  subject to      such con- 378      ditions as  it may  specify allow  a suitable rebate in      the price so fixed." *"4A.       Rebate  that can be deducted from the price paid           for sugarcane by producers of khandsari sugar:           A producer  of khandsari  sugar or his agent shall      pay,  for  the  sugarcane  purchased  by  him,  to  the      sugarcane grower or the sugarcane growers’ co-operative      society, either  the minimum  price of  sugarcane fixed      under clause  4, or  the price  agreed to  between  the      producer or  his agent  and the sugarcane grower or the      sugarcane growers’  co. operative  society, as the case      may be (hereinafter referred to as the agreed price:)      Provided that:

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              x                    x                     x                x                    x                     x       (iii) Where  the sugarcane is brought bound in bundles           and weighed  as such,  the Central Government, or,           with the  approval of  the Central Government, the           State Government or the Director of Agriculture or           the Cane  Commissioner or  the District Magistrate           within their  respective jurisdiction, may allow a           suitable rebate  in regard  to the  weight of  the           binding material not exceeding 0.625 Kilograms per           quintal of sugarcane; and,                x                   x                      x      Clause 4 conferred power on the Central Government or a State  Government   with  the  concurrence  of  the  Central Government  to  fix  the  minimum  price  or  the  price  of sugarcane to  be paid  by producers  of khandsari  sugar  or their agents for the sugarcane purchased by them. The second and third proviso to clause 4 were simultaneously introduced with clause  4A. By the Third proviso to clause 4, power was conferred on the Central Government or 379 with the  approval of  the Central  Government on  the State Government to  allow a suitable rebate in the price fixed in exercise of  the power  conferred by  clause 4.  The purpose underlying the  proviso is manifest. If the minimum price or price of  sugarcane to  be paid  by producers  of  khandsari sugar is  fixed, it  is  incumbent  upon  the  producers  of khandsari sugar to pay that price and nothing less than that price on  the pain  of criminal prosecution. The authorities clearly envisaged a situation where sugarcane may be brought in bundles  to the unit manufacturing khandsari sugar and if the sugarcane is weighed with the binding material used, the minimum price  or price  fixed by  the Government to be paid per quintal of sugarcane would ipso facto include the weight of the  binding material and if the power to grant rebate is not conferred  the producer of khandsari sugar will be under an obligation  to pay the same price even if the part of the payment was  for something  other  than  sugarcane,  namely, binding material.  The raison  d’etre behind conferring this power is thus clearly discernible.      Clause 4A  made it  obligatory to pay the minimum price of sugarcane if so fixed under clause 4 or in the absence of price fixation,  the  negotiated  price.  Proviso  (iii)  to clause 4A  confers power to allow rebate not exceeding 0.625 kg. per  quintal of  sugarcane where sugarcane is brought in bundles and  is weighed  as  such,  i.e.  with  the  binding material. Armed  with this  power, the  2nd respondent after obtaining approval  of the Central Government, as per letter dated September  6, 1979,  issued the  impugned notification directing that  where sugarcane is brought in bundles and is weighed as  such a  rebate in regard to the binding material at 0.625 kg. per quintal be allowed.      Before adverting  to the  contentions  raised  in  this group of  petitions it  may be  made distinctly  clear  that though clause  3A was  inserted in the Control Order in 1976 conferring similar  power on  the Central Government or with the  approval  of  the  Central  Government,  on  the  State Government to  allow rebate  at 0.625  kg.  per  quintal  of sugarcane purchased  by manufacturers  of sugar, such rebate was being  prescribed by  the Central Government since 1968. The Gazettes  of India setting out the notifications for the years 1968,  1971, 1972  and 1975  were  shown  to  us.  The notifications were issued in exercise of the power conferred by clause  3 of  the Sugarcane  Control Order,  1966. By the notifications  hereinabove  referred  to  minimum  price  of

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sugarcane per  quintal payable by each sugar mill enumerated in the Schedule to the notification was fixed. 380 While fixing  this  minimum  price  the  Central  Government authorised itself  as also  conferred  power  on  the  State Governments or  the Commissioner  or Director of Agriculture within their  jurisdiction to  allow a  suitable  rebate  in regard to the weight of binding material not exceeding 0.625 kg. per  quintal of  sugarcane. It  thus clearly  transpires that the  power  to  fix  the  minimum  price  of  sugarcane comprehended the  power to  fix rebate  to  be  allowed  for binding material  where sugarcane  is brought to the factory or the  producing centre bound in bundles. However, to avoid any quibbling  about the  power to fix such rates of rebate, clause 3A  was added  in 1976 and an identical clause 4A was added in  1978 acquiring  power to  prescribe rebate  to  be allowed for  binding material  where sugarcane is brought to the khandsari  sugar producing  units bound  in bundles  and weighed as  such. This  would at  least show that since 1968 rebate at  0.625  per  quintal  of  sugarcane  purchased  by producers of  sugar is  being allowed.  Sugarcane is  a  raw material both for sugar and khandsari sugar, the distinction between them  being that when vacuum pan process is employed the end product is called sugar and when open pan process is employed the  end product is called khandsari sugar. In case of either  of them,  the  grower  of  sugarcane  has  hardly anything to  do with the end product. After the grower sells his sugarcane,  as far  as he is concerned, it is immaterial whether the  producer produces  sugar or  khandsari sugar or rab  or   jaggery  or  shakkar.  Therefore,  clause  4A  was introduced to  avoid  discrimination  between  producers  of sugar and  khandsari sugar  in the  matter of  rebate to  be allowed when  the grower  of sugarcane brings the same bound in bundles to be delivered to the producer. The producers of sugar have  without a murmur accepted this position but once the producers  of khandsari  sugar are  brought  within  the purview of  an identical  provision,  they  have  filed  the present petitions.      Mr. C.M.  Lodha who  led on  behalf of  the petitioners contended that  the power  to prescribe rate of rebate under third proviso  to clause 4 is conditional upon the fixing of minimum price  or  price  of  sugarcane,  and  as  the  pre- condition  to  exercise  of  power  is  not  satisfied,  the authorities cannot  exercise  power  to  prescribe  rate  of rebate. The  submission  is  that  where  minimum  price  of sugarcane is  fixed by  the Government,  in order  to ensure that that  price is paid for sugarcane and simultaneously to avoid any  unauthorised deduction, the Central Government or the State  Government may prescribe the rate of rebate to be allowed beyond which no deduction 381 under the  camouflage of  rebate for binding material can be resorted to  by the  purchaser; but  if  the  power  to  fix minimum price  or price of sugarcane is not exercised, there does not  arise a  situation in which the power to prescribe rebate to  be allowed for binding material can be exercised. It was urged that the power to fix price or minimum price of sugarcane  and   to  prescribe   rate  of   rebate  are  not independent but  they are  inter-dependent and one cannot be exercised without exercising the other.      Clause 4  confers power  on the Central Government or a State  Government   with  the  concurrence  of  the  Central Government  to  fix  the  minimum  price  or  the  price  of sugarcane to  be paid  by producers  of khandsari  sugar for sugarcane purchased  by them.  Third  proviso  to  clause  4

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provides that the Central Government or with the approval of the Central  Government, the  State Government  may in  such circumstances and  subject to  such  conditions  as  it  may specify, allow  a suitable  rebate in the price so fixed. If the  provision   were  to  end  with  clause  4,  a  serious contention would  arise whether  the power to determine rate of rebate can be exercised de horse the power to fix minimum price  or   price  of   sugarcane  or  can  be  unilaterally exercised. Undoubtedly,  if the  power was  exercised  under clause 4  probably the pre-condition to exercise of power of prescribing suitable  rebate viz. fixing of minimum price or price of  sugarcane if not satisfied, the power to prescribe rate of  rebate could  not have  been exercised  because the latter power for its exercise is dependent upon the power to fix price or minimum price. Both the powers are interrelated as would  be evident  from the  language of  third  proviso: "...as it  may specify, allow a suitable rebate in the price so fixed."  The rebate  is thus  co-related to  price fixed. Therefore prima  facie it appears that the power to fix rate of rebate  under the  third proviso  to clause  4 cannot  be exercised without  exercising the  power  to  fix  price  or minimum  price.   It  being   a   conditional   power,   the satisfaction of  condition giving  rise to  the occasion  to exercise of  power is  a must. Therefore, before the rate of rebate is  prescribed the  price or  the  minimum  price  of sugarcane as  provided in  the substantive  part of clause 4 will have  to be fixed. From the price so fixed a rebate has to be allowed and, therefore, the power was conferred by the third proviso  to prescribe  the rate  of rebate. The rebate contemplated by  the  third  proviso  to  clause  4  is  not necessarily confined  to rate of rebate for binding material only but per- 382 missible rate  of rebate  from the  price or  minimum  price fixed under  the substantive  provision of  clause 4  can be prescribed.      Clause 4A  stands on  an independent  footing and it is independent  of  clause  4.  Clause  4A  is  neither  inter- dependent nor  interrelated to  clause 4. Clause 4A provides that the  producer of khandsari sugar or his agent shall pay for the  sugarcane purchased  by him to the sugarcane grower or the  sugarcane growers’  cooperative society  either  the minimum price of sugarcane fixed under clause 4 or the price agreed  to  between  the  producer  or  his  agent  and  the sugarcane grower  or  the  sugarcane  growers’  co-operative society as  the case  may be.  Clause 4A  thus visualises  a situation in  which either the minimum price of sugarcane is fixed under  clause 4  or where  no such price if fixed, the price  agreed  to  between  the  sugarcane  grower  and  the producer who  purchased sugarcane  and even  in this  latter situation the  power to  prescribe rate  of rebate  only  in respect of  binding material  was conferred  on the  Central Government or  the authorities  set out in the third proviso to clause  4A. Therefore, fixing of the minimum price may be a pre-condition  to the  exercise of  power under  the third proviso of  clause 4, as far as clause 4A is concerned, even where the  price to be paid by the producer to the sugarcane grower is  the one  negotiated between the two, the producer or his agent will have to allow that much rebate and no more for binding  material if  notified in  exercise of the power conferred by  the third  proviso. This  literal construction accords with  the intendment  of the  provision as  would be presently pointed out.      Mr. Lodha  urged that  if the  purchaser and  seller of sugarcane are  free agents  to  negotiate  the  price,  what

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useful purpose  would be  served by  prescribing the rate of rebate statutorily  ? Says  Mr. Lodha, that if higher rebate is to  be allowed,  the producer  of khandsari sugar and the grower of sugarcane would work out the price accordingly and if less  rebate is  allowed, it will have a direct impact on the  negotiated  price.  This  submission  proceeds  on  the unwarranted assumption  that a  producer of  khandsari sugar and the  grower of  sugarcane are capable of negotiating the price as  free agents  and stand  on a  footing of equality. Sugarcane is  a perishable  commodity.  The  grower  of  the sugarcane is at the mercy of producers of sugar or khandsari sugar. It would be uneconomic for him to transport sugarcane to a  long distance.  By the  very nature of the product, it being perishable and transport 383 over a  distance being  uneconomic, the  grower of sugarcane has limited  choice in  selecting the  producer to  whom  it could be  sold. Between  the producer  of khandsari  and the grower of  sugarcane,  the  first  one  is  primarily  in  a position to  dominate and dictate and they do not operate on the level of equality. Unquestionably, therefore, the grower of sugarcane  in relation  to the  producer of the khandsari sugar would  be weaker  and it  is he  who  requires  to  be protected. Now, if the protection of fixing of minimum price is not resorted to because the authorities under the Control Order may  have information  before them that looking to the supply and demand and the demand and the market economy, the grower of  sugarcane would  be able  to obtain  a reasonably fair price  for his labour, the only thing which is required to be  protected against  is  iniquitous,  unauthorised  and impermissible deductions.  It appears  that in  the State of Uttar Pradesh  and Bihar  the weight of the binding material when sugarcane  is brought  in bundles  to the  producer has been a  fruitful source for the producers of khandsari sugar to make deductions from the weight of sugarcane delivered to them in such an exorbitant quantity as to deny in real money worth  the   negotiated  price.  This  can  be  demonstrably established by  the claim  made in  these petitions that the weight of  binding  material  is  2.5  kg.  per  quintal  of sugarcane while  the authorities  have prescribed only 0.625 kg. per  quintal of  sugarcane and  the national  average as worked out  by National Sugar Institute, Kanpur is 0.741 kg. per quintal of sugarcane. If the price of sugarcane is fixed per quintal  and the  deduction is made as contended herein, it does not require imagination or mathematician’s intellect to work  out the  invisible loss  inflicted  by  the  subtle method  on   the  growers  of  sugarcane.  Therefore,  while retaining the power to fix minimum price or price to be paid and also in a given situation leaving it to the purchaser of sugarcane and  grower of sugarcane to negotiate the price in order to  eschew any  exploitation  of  the  weaker  section between the  two, the  power to prescribe the rate of rebate was acquired  and can be rightly enforced. Therefore, viewed from either  angle, there is no merit in the submission that unless the  power to  fix the  price  or  minimum  price  is exercised there is no power to prescribe the rate of rebate. Language  of   clause  4A   on  a   literal  or  grammatical construction negatives the submission and it must as well be rejected  looking   to  the   intendment   underlying   this provision.      Mr. Shanti  Bhushan, learned  counsel appearing for the petitioners in  Writ Petitions  No. 732  to 763  urged  that assuming that 384 power to  prescribe rate of rebate under clause 4A read with

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the third  proviso could  also be  exercised where  price of sugarcane may  be left  to be negotiated between the growers of sugarcane  and producers  of  khandsari  sugar,  yet  the quantum as determined must at least have reasonable relation to the  reality of  market situation  as well  as  prevalent trade  practice.  He  urged  that  viewed  from  this  angle fixation of  rate of  rebate at  0.625 kg.  per  quintal  of sugarcane is  unjust and  unfair  and  therefore  the  Court should strike  down the  impugned notification on the ground that the determination is arbitrary and utterly unrelated to trade  and   practice.  Simultaneously   he  contended  that assuming that national average of weight of binding material works out  at 0.741  kg. per  quintal as  submitted  by  the Respondents on  the strength of the report of National Sugar Institute, Kanpur, there was absolutely no justification for reducing the  same to  0.625 kg.  per quintal  and therefore prescribed rate  of rebate  apart from  being  arbitrary  is unrelated to  trade and practice and deserves to be quashed. In this  connection, he  referred  to  Paragraph  6  of  the counter-affidavit  filed   by  Shri   H.A.M.L.  Vaz,  Deputy Secretary, Ministry  of Agriculture,  Department of  Food in which it is stated as under:           "The limit  of 625  grams per quintal was adopted,      as it  was allowed  by the  States of  U.P.  and  Bihar      before the  Central Government  took over  the  control      over the  price of  sugarcane, and  has continued since      then.   Representations    were   received   from   the      Associations of the vacuum-pan sugar mills etc. against      that limit.  A survey  was carried  out by the National      Sugar Institute,  Kanpur, and the average weight of the      binding material  worked out  to 0.741 kg., per quintal      for the  winter season of the selected factories spread      over the  whole country.  Subsequently, on receipt of a      representation from  the Madras State Federation of Co-      operative  Sugar   Factories,  views   of   the   State      Governments in  the matter  were also  called for, with      the specific request that they might also ascertain the      views of  the cane  growers. The  major sugar producing      State   Governments   of   U.P.,   Punjab,   Rajasthan,      Maharashtra, Karnataka,  Andhra  Pradesh,  Pondicherry,      West  Bengal,   Orissa,  Madhya   Pradesh,  Kerala  and      Gujarat, recommended  that the limit already prescribed      was adequate  and that  there was no need to revise it.      The Bihar  Government had  already indicated  the  same      view. Hence fixation 385      of that limit cannot be said to be unreal and arbitrary      or contrary to actualities of trade and practice."      Petitioners countered  it by the affidavit in rejoinder of Shri  Prem Parkash Aggarwal; the relevant portion of para 4 reads as under:           "With reference to Para 6 of the counter-affidavit      I say  that to the best of my information no survey was      carried out  at any  time after 1976. It is to the best      of  my   information  that  National  Sugar  Institute,      Kanpur, conducted  some  kind  of  survey  in  1964  or      earlier." This half-hearted  lack of knowledge would not be sufficient to reject  what Mr.  Vaz stated  in  his  counter-affidavit. However, to  put this  factual averment  beyond the  pale of controversy  Mr.   Girish  Chandra,   learned  advocate  who appeared for  the Union  Government produced  a file  of the Department of  Food, Sugar  Policy Desk,  in which claim for upward revision  of allowance for binding material presently allowed under  Sugar (Control)  Order, 1966  in the light of

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the suggestions received from Indian Sugar Mills Association as per  its letter dated July 14, 1977 has been meticulously examined. It  appears that  Indian Sugar  Mills  Association approached the  Central Government  requesting it for upward revision of  the  rebate  for  binding  material  till  then granted  under   the  Control   Order.  Indian  Sugar  Mills Association  appears  to  be  the  spokesman  of  the  sugar industry.  Probably   a  grievance  was  voiced  that  while producers of sugar are under a statutory obligation to grant the prescribed  rate of  rebate, the  producers of khandsari sugar are under no such obligation even though they purchase sugarcane  from  the  the  same  market.  Accordingly  while examining the  question whether  any upward  revision in the rate of  rebate should  be allowed to the producers of sugar who purchase  sugarcane, it  was decided  to  simultaneously introduce an  identical provision  in respect of purchase of sugarcane by  producers of  khandsari  sugar.  That  is  the genesis of  the introduction  of clause  4A in  the  Control Order. The  file meticulously  examines the  suggestion  for upward revision of the rate of rebate. It clearly transpires from the  file that  a circular  letter was  sent to all the governments of  sugar producing  states requesting  them  to intimate their  view on the desirability or otherwise of any upward revision  in the  existing quantum of rebate of 0.625 kg. per  quintal in  respect of  the weight  of the  binding material 386 where sugarcane  is brought  bound in bundles and weighed as such. It  may be  briefly mentioned  that  Punjab,  Gujarat, Karnataka and  U.P., did  not consider it necessary to grant any upward  revision. On  the other hand, Tamilnadu, Kerala, West Bengal, Pondicherry, Haryana, Rajasthan and Orissa were of the  opinion that  there is  some  justification  for  an upward revision  not exceeding  1 kg. per quintal. The State of Bihar  took  a  neutral  stand  stating  that  in  Bihar, sugarcane is not supplied bound in bundles and therefore the question of giving any rebate in respect of binding material does  not   arise.  After  ascertaining  the  views  of  the different State  Governments, the department was of the view that since  the views  of the  State Governments are sharply divided, a  request may  be made to Director, National Sugar Institute, Kanpur  to carry  out  an  independent  study  in regard to  the quantum  of rebate  that should  be given for binding material,  to enable  the Government to take a final decision, on the request of the industry for upward revision of the  existing rebate of 0.625 kg per quintal. This is the genesis of  the  report  of  the  Director,  National  Sugar Institute referred  to in  Para 6  of the counter-affidavit. The summary  of the  report of  the Director, National Sugar Institute, Kanpur  was examined and it was observed that the percentage of  the binding  materials varies  from State  to State and ranges between 0.64 to 1.5% except in Orissa where it is  found to  be 3.00%.  When the  matter was still under consideration of  the Department, the present writ petitions were field.  It was observed that the present rate of rebate is in  force for  the last  over 20  years, so  far  as  the vacuum-pan sugar  manufacturers are  concerned and  the same can be  applied to  the khandsari  sugar manufacturers also. Probably further  examination  of  the  request  for  upward revision came  to be  stalled in  view of  the fact that the present writ petitions were filed.      In the light of the fact situation hereinabove set-out, it is  difficult to  accept the submission that the fixation of rate  of rebate for binding material at 0.625 kg. for the whole country  is either arbitrary or unreal or unrelated to

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trade and  practice. The  rate of  rebate seems to have been determined  by   the  law   of  averages   after  collecting information from  all over the country. Coupled with this is the fact  that the  present rate  of rebate  is in vogue for over a  quarter of  a century. It in itself is sufficient to negative the  contention that  the rate  of rebate  is fixed arbitrarily or unrelated to trade and practice. 387      The next  submission is  that assuming that the Central Government was influenced by the report made by the Director of the National Sugar Institute, Kanpur, the report suggests that the  average works  out at 0.741 kg, per quintal, being approximately the  mean between 0.64 and 1.5%. Therefore, it was vehemently  urged that  there was  no justification  for further reducing  it to 0.625 kg. When the determination has to be  made on  law of  averages and applicable to the whole country,  the   final  figure   cannot   be   mathematically determined. If  the existing  rate of  rebate, determined on the national  average is marginally higher or lower than the average worked  out by a later study team, it cannot be said that the  existing prescription is arbitrary or unrelated to trade or  practice No  doubt, if  the range is wide, and the gap  is   unexplained,  realistic   redetermination  may  be directed.  According  to  the  average  worked  out  by  the Director of  the National Sugar Institute, all India average rate of rebate would work out at 0.741 kg. per quintal while the Government  has been  fixing for  over a  quarter  of  a century the  rate of  rebate at  0.625 kg. per quintal. Thus the differential  between what  is prescribed  and  what  is calculated by  the study  is not  so wide  as to  render the prescribed rate  arbitrary or unrealistic. The differentials being within  a narrow  range, the one which is in vogue for over a  quarter of a century cannot be rejected as arbitrary or unrelated  to  trade  and  practice.  Nor  is  the  Court competent to  work out  the exact  permissible  rebate  with mathematical accuracy.      A reference  at this  stage  to  a  piece  of  evidence furnished by  the petitioners  would suffice  to  repel  the contention of  the petitioners  that the  average weight  of binding material  is 2.5 kg. per quintal and, therefore, the prescribed rate  is not  merely marginally  low  but  wholly unrealistic. Annexure  I to the rejoinder affidavit filed by Shri Prem  Prakash  Aggarwal,  Secretary  of  Gur  Khandsari Utpadak Sangh, Roorkee, dated December 24, 1981, purports to be a  report of  the Assistant Sugarcane Commissioner on his visit to  M/s Anand  Prakash Atulkumar,  a  Khandsari  sugar producing unit  on January  25, 1978.  He was accompanied by Shri  Shanker  Shukla,  Khandsari  Officer,  Sarvashri  S.D. Verma, R.C.  Kureel, Deoband  and Navin  Chandra,  Khandsari Inspectors. In  order to  ascertain the  average  weight  of binding material  a truck  loaded to  its full capacity with sugarcane was  weighed. The gross weight was 37 quintals and 36 kgs.  Shri Shobha  Ram, the  owner of  the sugarcane  was directed to 388 remove the  joon (binding material) of sugarcane. The weight of M.  Trolly was  found to  be  21  quintals  and  40  kgs. Subtracting the  weight of trolly from the gross weight, the weight of  sugarcane with binding materials worked out at 15 quintals and 96 kgs. Then followed the calculation which may be extracted:           "The above farmer (kastkar) also reported that the      sugarcane was  being purchased  at Rs.  9.  10  p.  per      quintal. Approximately  about 1800  quintals  cane  was      lying  at   site.  The  weight  of  the  joon  (binding

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    material) after it had been removed came to 32 kgs." If the  actual weight  of the binding material in respect of 1800  quintals  of  sugarcane  turned  out  to  be  32  kg., obviously per  each quintal it would be much less than 0.625 kg. Mr.  Shanti Bhushan, however, attempted to urge that the last sentence  in the Report is disjointed and misplaced and he wanted  us to  read the Report as meaning that the weight of sugarcane in the trolly was 15.96 kg. and that the weight of the  binding material  in respect  of the same was 32 kg. and, therefore, on an average it would work out at 2 kg. per quintal. It is not possible to read the Report in the manner indicated by  Mr. Shanti  Bhushan. In  fact, the  Report was produced on  behalf of  the petitioners  and not  a word has been stated  in the  affidavit to  which it is annexed as to how the  Report is to be read. It would thus appear that the rate of  rebate set  out in  the impugned Notification bears resemblance to  the  sample  testing  of  actual  weight  of binding material  used in  binding sugarcane when brought in bundles to the khandsari factory.      Our  rejection   of  the   submission  should   not  be interpreted to  imply that  no case  is made  out for upward revision of  the rate  of rebate for binding material. There is by  the law of average as recently worked out in 1980-81, an examinable case for revision up to at least 0.741 kg. per quintal. We  do not  purport to  indicate the  figure  as  a judicial pronouncement  but  we  believe  that  the  Central Government would  continue its  examination of  the  request made by  Indian Sugar  Mills Association, shelved because of these  petitions,  for  upward  revision  and  realistically examine the  same as  early as  possible and before the next crushing  season   commences.  With   this  we   reject  the submission that the fixation of rate of rebate at 389 0.625 kg.  per  quintal  in  the  impugned  notification  is arbitrary or unrelated to trade and practice.      Mr.  Kackar,  learned  counsel  who  appeared  in  Writ Petitions 777-796  and 1131-52/81  urged that  the  impugned notification places  a restriction  on the  freedom of trade guaranteed to  the petitioners  under Article 19 (1) (g) and as it  is neither  shown to  be reasonable  nor  imposed  in public interest, it is violative of the freedom of trade and is, therefore, void.      Whenever it  is contended  that  a  regulatory  measure imposes restriction  upon the freedom of trade guaranteed by Articles 19  (1) (g),  it must be shown that the restriction so imposed  directly and  proximately interferes in presenti with the  exercise of  freedom  of  trade.  If  the  alleged restriction does  not directly or proximately interfere with the exercise  of freedom of trade, the freedom guaranteed by Article 19 (1) (g) is not violated. Petitioners contend that they have  a  right  to  carry  on  trade  on  manufacturing khandsari sugar and for facilitating the carrying on of this trade they  have to  buy the  raw material called sugarcane. When they  buy sugarcane in the absence of minimum price for sugarcane the sugarcane grower and the producer of khandsari sugar are  free to negotiate the price. The negotiated price would take  care of  the condition in which sugarcane should be supplied.  It would  be open to the producer of khandsari sugar to  buy sugarcane  from the grower who may be asked to bring sugarcane not bound in bundles. The rebate for binding material is  to be allowed only when sugarcane is brought to the khandsari  sugar producing  unit bound in bundles. It is always open to the purchaser of sugarcane to insist upon the grower bringing the sugarcane not bound in bundles and he is free to  negotiate the  price when price or minimum price of

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sugarcane is  not fixed  and the  impugned notification will not even  remotely impinge  upon his freedom to carry on his trade. Therefore,  the short  answer is that the restriction complained of  does not  directly and  proximately interfere with the exercise of freedom of trade and Article 19 (1) (g) is not attracted.      Assuming  that  the  impugned  notification  making  it obligatory  to   grant  rebate  for  binding  material  when sugarcane is  brought bound bundles to the extent prescribed in the impugned notifica- 390 tion does  impose a  restriction on  the freedom to carry on trade, the  next question  is, whether  the  restriction  is reasonable and  imposed in  the interest  of general public. Once it  is assumed that the impugned notification imposes a restriction on  the freedom of trade, the burden is on those who support  it, to show that the restriction imposed by the impugned law is reasonable and is imposed in the interest of general public.  In other  words, the burden is on those who seek the  protection of  clause (6) of Article 19 not on the citizen who  says that  the restrictive enactment is invalid (see Saghir  Ahmad v. The State of U.P. & Ors.,(1) Khyerbari Tea Co.  Ltd. &  Anr. v.  The State  of Assam(2) and Vrajlal Manilal &  Co.  and  Ors.  v.  State  of  Madhya  Pradesh  & Ors.,(3). It  is of  course  not  necessary  to  recall  the dissent of  Sarkar, J.  in Khyerbari  Tea Co. Ltd. case. The learned judge  was of  the view  that the  whole  theory  of burden of  proof rests  on the assumption that clause (6) of Article 19  carves out  an exception  and that the burden to prove that  the case  is covered  by the exception is on him who pleads  the same,  but it  was observed that this way of reading  the   Constitution  is   not  proper  and  one  may legitimately say that there is no exception because the real fundamental right  is what is left after the restriction has been imposed.  Consistently  with  the  majority  view,  the burden will be on the authority who claims the protection of clause (6)  of Article  19 to show that the restriction is a reasonable one  and that  is  imposed  in  the  interest  of general public.      Having settled  the question  of  burden,  the  passing submission made  by Mr.  Kacker may  be dealt  with. It  was urged that  in the  batch of  petitions in  which he appears neither the  Union Government nor the State of Uttar Pradesh has filed  counter-affidavit and therefore, one can say that no attempt  has been made to justify the restriction. We are not disposed  to accept  this submission  because the  Union Government has  filed counter-affidavit  in  Writ  Petitions Nos. 6443-6444  of 1980  and all the petitions in this batch raised identical  contentions and  were directed to be heard with Writ  Petitions  Nos.  6443-6444  of  1980.  Undeserved respect for  processual justice  may have  persuaded  us  to direct the  Union Government  to file a copy of the counter- affidavit in each petition which we 391 consider superfluous.  At any  rate, the  petitioners in the petitions in  which Mr  Kacker appears, were supplied a copy of  the   counter  affidavit   and  therefore  this  passing submission must be negatived.      If freedom  of trade postulates, inter alia, freedom to negotiate price  for purchase and sale both the raw material and the finished product, the control order confers power to fix price  of sugarcane  and  to  that  extent  there  is  a restriction on  freedom of trade. But the restriction is not under  examination  here  Even  when  he  is  left  free  to negotiate the  price where  either the Central Government or

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with the  approval of  the  Central  Government,  the  State Government does  not fix minimum price or price of sugarcane there is a further restriction on his freedom of negotiating the price because he is statutorily bound to give rebate for the  binding   material  as   prescribed  in   the  impugned notification. To  that extent  one may  give credence to the contention that  there is  a  marginal  restriction  on  the freedom of trade.      The statutory  prescription of  quantum of  rebate  for binding material  has been  prescribed for  the  benefit  of sugarcane growers.  Producers of  sugar and  khandsari sugar constitute a powerful trade lobby, the fact of which one can take judicial  notice. Sugar  being an  essential  commodity occasionally kept  in short  supply and  being  a  commodity needed for  consumption by almost the entire population, the powerful industry  magnates in  this field are in a position to dominate  both the  growers  of  sugarcane  as  also  the consumers of  the essential commodity. Number of regulations have been  enacted almost  since the dawn of independence to regulate this powerful combination of manufacturers of sugar and khandsari  sugar all  over the  country for the ultimate benefit of  consumers on  the one hand and on the other hand the farmers  and the  growers of  sugarcane with their small holdings and  raising a  perishable food  crop. The marginal farmers, are  unable  to  stand  up  against  the  organised industry.  It   does  not  require  long  argument  in  this predominantly agricultural  society that  the farmers having small holdings  need protection  for selling  at fair  price their meagre  agricultural produce. As far back as 1953, the U.P.  Legislature  enacted  U.P.  Sugarcane  (Regulation  of Supply and Purchase) Act, 1953, for rational distribution of sugarcane to factories, for its development on the organised scientific line, to protect the interest of cane 392 growers and  of the industry, etc. Constitutionality of this Act was  challenged on  various grounds  including one under Article 19  (1) (g) In Ch. Tika Ramji & Ors. v. The State of Uttar Pradesh  & Ors.,(1)  this Court repelled the challenge under Article  19 (1) (g) holding that the restriction which is imposed upon the cane-growers in regard to sales of their sugarcane to  the occupiers  of factories in areas where the membership of  the Cane-growers  Co-operative Society if not less than  75 per  cent of the total cane growers within the area, is  a reasonable  restriction in  the public  interest designed for safeguarding the interest of the large majority of growers  of sugarcane  in the  area  and  works  for  the greatest good of the greatest number. The proposition is now beyond the  pale of  controversy that the State can impose a restriction in  the interest  of general public on the right of  a  party  to  contract  where  in  the  opinion  of  the Government the  contracting parties  are unable to negotiate on the  footing  of  equality.  Constitutional  validity  of statutes prescribing  minimum wages has been founded on this proposition. The  principle can  be effectively  extended to the powerful sugar industry and the cane growers because the cane growers admittedly are at a comparative disadvantage to the  producers   of  sugar  and  khandsari  sugar  who  were described in  the course  of arguments  as sugar  barons. It does  not  require  an  elaborate  discussion  to  reach  an affirmative  conclusion   that  sugarcane  growers  who  are farmers cannot negotiate on the footing of the equality with the producers of sugar and khandsari sugar. The State action for the  protection of  the  weaker  sections  is  not  only justified but  absolutely necessary  unless the  restriction imposed is excessive.

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    Viewed from  another angle, the impugned restriction is entirely reasonable.  If price or minimum price of sugarcane is fixed, the producers of sugar would try to circumvent the price  by  unrealistic  and  impermissible  deductions.  The rebate for  the weight  of binding  material seems  to be  a source for  indulging  in  this  nefarious,  if  not  wholly fraudulent conduct.  It is  equally well  settled  that  the State can impose reasonable restrictions under clause (6) of Article  19  to  prevent  fraud  or  where  advantage  of  a fraudulent conduct is sought to be taken (see M/s. Fedco (P) Ltd. v.  S.N. Bilgrami(1).  The impugned  restriction serves two-fold purpose: (i) it ensures price of sugarcane avoiding impermissible deductions; (ii) it circumvents 393 possible fraud  by making  such deductions  as would  render illusory even  the negotiated price, if not fixed price. And it is  indisputable that  if the  rebate is  not statutorily prescribed the  cane growers  will be  at the  mercy of  the producers of  sugar and khandsari sugar. If price or minimum price of  sugarcane can  be fixed by the State, because this power was  never  questioned  before  us,  this  very  power comprehends  the   power  to  provide  such  incidenta  land ancillary regulations  which will  ensure the  price.  Price fixation measure  is for  protection of  the farmer from the exactions of  producers  against  which  he  cannot  protect himself. (See  Lee Nebbia  v. People  of the  State  of  New York)(1). The impugned measure ensures price either fixed or negotiated and,  therefore, it  is a  restriction  which  is undoubtedly reasonable  and is  imposed in  the interest  of general public  and the guarantee of freedom of trade is not violated.      The  last   submission  is   that  in  order  that  the restriction  may  be  reasonable  it  must  have  reasonable relation to  the object  which the  statute seeks to achieve and must  not be  in excess of the object. It was urged that the Sugarcane  Control Order was issued in exercise of power conferred by section 3 of the Essential Commodities Act. One of the  objects sought  to  be  achieved  by  the  Essential Commodities Act,  1955, is  to ensure  availability at  fair price the  essential commodity  to  the  consumers.  It  was further urged  that one  can visualise that the power to fix minimum price  or price  of sugarcane  may have  a  rational nexus  to   the  object   sought  to  be  achieved,  namely, availability of sugar to the consumers at fair price. But it was urged  that prescribing  the rate  of rebate for binding material has  no relation  with the  aforementioned  object. This submission  does not  commend to  us  for  the  obvious reason that  the restriction  is imposed  in the interest of the cane  growers and the State while ensuring that sugar, a commodity of  daily consumption  by almost every one in this country,  is   available  to   everyone  at   a  fair  price simultaneously  wanted   to  ensure   that  the   grower  of sugarcane, another weaker section of the society is not left to vagaries  of the trade or the powerful sugar industry. To strike the  balance between  the conflicting  interests  not only State  acquired power to fix minimum price of sugar and khandsari sugar  but that this wholesome effort may not work to the  disadvantage of the sugarcane growers section of the society, the power to prescribe rate of rebate was acquired. And the  power to fix price or minimum price comprehends the power to 394 so regulate  supply as  to ensure  the price so fixed and to ensure that  in the  name of  unauthorised  and  unwarranted deduction the  price fixed  or negotiated  is  not  rendered

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illusory.      Viewed  from  either  angle  the  restriction  is  both reasonable and  it is  imposed in  the interest  of  general public, and  has a rational relation to the object sought to be achieved by the Control Order.      These  were  all  the  contentions  in  this  batch  of petitions and  as none  has merit  in it, the petitions fail and are dismissed with costs; hearing fee in one set. N.V.K.                                  Petitions dismissed. 395