Gwalior Sugar Co. Ltd. Vs. State of M.P. and ors. - Court Judgment

Excerpt:
other taxes - legality of levi - m.p. krishi upaj mandi adhiniyam, 1972(market act) and m.p. sugar cane (regulation of supply and purchase) act, 1958 and section 3 of the essential commodities act, 1955 - petitioners were owners of sugar factories - petitioners purchased sugar cane from cane growers - state government levied tax under market act - petitioners aggrieved by said levying of tax - hence, present petitions - held, provisions of market act have been made for dealing with general agricultural product - for sale and purchase of sugar cane special legislations had been enacted - section 3 of act of 1955 empowers central government to issue control order regarding purchase of sugar - act of 1958 gives power to state government to regulate sale and purchase of sugar cane - hence,.....ordera.k. patnaik, c.j.1. the petitioners in this batch of writ petitions are all owners of factories in the state of madhya pradesh and purchase sugar cane from cane growers or co-operative societies of cane growers for use as raw materials in their factories. their case in the writ petitions is that the purchase of sugar cane by factories in the state of m.p. is regulated by the m.p. sugar cane (regulation of supply and purchase) act, 1958 made by the state legislature of madhya pradesh (for short 'the sugar cane act') and by the sugar cane (control) order, 1966 made by the central government under section 3 of the essential commodities act, 1955 and that the m.p. krishi upaj mandi adhiniyam, 1972 which regulates the buying and selling of agricultural produce in the markets in the state.....

Judgment:
ORDER

A.K. Patnaik, C.J.

1. The petitioners in this batch of writ petitions are all owners of factories in the State of Madhya Pradesh and purchase sugar cane from cane growers or co-operative societies of cane growers for use as raw materials in their factories. Their case in the writ petitions is that the purchase of sugar cane by factories in the State of M.P. is regulated by the M.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1958 made by the State Legislature of Madhya Pradesh (for short 'the Sugar Cane Act') and by the Sugar Cane (Control) Order, 1966 made by the Central Government under Section 3 of the Essential Commodities Act, 1955 and that the M.P. Krishi Upaj Mandi Adhiniyam, 1972 which regulates the buying and selling of agricultural produce in the markets in the State of M.P. (for short 'the Market Act') does not apply to the purchases of sugar cane made for factories in the State of M.P. and accordingly, no fees under the Market Act can be levied on the purchases of sugar cane made for factories in the State of Madhya Pradesh and yet the Market Committees are demanding fees under the Market Act on such purchases from them. The petitioners have therefore prayed for declarations that the Market Act is not applicable to the transactions for purchase of sugar cane by occupiers of factories in the State of Madhya Pradesh and accordingly no fee is levible on such occupiers of factories under the Market Act on such purchases of sugar cane for their factories and for quashing all demands of fees under the Market Act issued by the concerned Market Committees on such purchases of sugar cane for their factories and for refund of such fees collected from them.

2. Mr. Kishore Shrivastava, learned Senior Counsel appearing for the petitioners in W.P. Nos. 391 of 1991,6001 of 2000,6209 of 2002, 6210 of 2002, 409 of 2004 and 3577 of 2004 took us through the provisions of the Sugar Cane Act to show that the Sugar Cane Act is a special Act providing for regulation of purchase of sugar cane for factories in the State of Madhya Pradesh. He submitted that the Market Act is a general Act for regulation of purchase and sale of agricultural produce including sugar cane in market areas in the State of Madhya Pradesh but this general Act cannot apply to purchase of sugar cane for factories in the State of M.P. to which the Sugar Cane Act applies. In support of this contention, he cited the decision of the Supreme Court in Belsund Sugar Co. Ltd. v. State of Bihar : AIR1999SC3125 , in which a similar question arose as to whether the Bihar Agricultural Produce Markets Act, 1960 will apply to purchase of sugar cane which is regulated by the Bihar Sugar Cane (Regulation of Supply and Purchase) Act, 1982 and a Bench of five Judges of the Supreme Court has held that the Bihar Sugar Cane (Regulation of Supply and Purchase) Act, 1982 being a special Act would prevail over the Bihar Agricultural Produce Markets Act, 1960. Mr. Shrivastava submitted that since the provisions of the Sugar Cane Act and the Market Act are similar to the Bihar Sugar Cane (Regulation of Supply and Purchase) Act, 1982 and the Bihar Agricultural Produce Markets Act, 1960, this Court should hold that the Sugar Cane Act would prevail over the Market Act also in the State of Madhya Pradesh and that market fees cannot be levied and demanded on transactions of buying and selling of sugar cane in the market areas from cane growers or co-operative societies of cane growers by the occupiers of factories in the State of Madhya Pradesh also.

3. Mr. Sanjay Agrawal, learned Counsel appearing for respondent Nos. 2 and 3 in W.P. No. 391 of 1995 submitted that the petitioner Gwalior Sugar Company Limited had filed a writ petition- Misc. Petition No. 2250 of 1990 before this Court challenging the demand of market fees under the Market Act on purchases of sugar cane made for its factory on inter alia the ground that the purchase by a factory from sugar cane cultivators was regulated entirely by the Sugar Cane Act and the sugar cane price was determined under the Control Order but a learned Single Judge of this Court dismissed the writ petition by order dated 20-7-1994 rejecting the said challenge. He submitted that the petitioner Gwalior Sugar Company Limited cannot raise the very same issue again because of the principle of res judicata. Mr. Agrawal next submitted that a reading of the provisions of the Sugar Cane Act and the Market Act would show that there is no direct conflict between the two Acts and hence both the Acts are enforceable in their respective fields and the petitioner in W.P. No. 391 of 1995 is liable to pay market fees under the Market Act on purchase of sugar cane for its factory, as demanded by the respondent Nos. 2 and 3.

4. Mr. Sanjay Yadav, learned Deputy Advocate General for the State of Madhya Pradesh submitted that under Section 19 of the Sugar Cane Act, the State Government has been vested with the power to issue orders for regulating the purchase and supply of sugar cane in the 'reserved' and 'assigned' areas. He submitted that the State Government may or may not pass an order regulating the purchase and supply of sugar cane in the 'reserved' and 'assigned' areas. He submitted that where the State Government issues an order under Section 19 of the Sugar Cane Act regulating the purchase and supply of sugar cane in the 'reserved' and 'assigned' areas, there may be conflict between the provisions of the Sugar Cane Act and the Market Act but if the State Government does not issue such an order regulating the purchase and supply of sugar cane under Section 19 of the Sugar Cane Act, the question of conflict between the two Acts would not arise. He submitted that a similar question arose before the Supreme Court in I.T.C. Limited v. Agricultural Produce Market Committee and Ors. : [2002]1SCR441 as to whether the Tobacco Board Act made by the Parliament or the Bihar Agricultural Produce Markets Act and Karnataka Agricultural Produce Markets Act would prevail in the respective States and Ruma Pal, J., in her opinion, held that so long as Sections 13, 13-A and 14-A levying fees on tobacco have not been brought into operation in any State, the provisions of the respective Market Acts must prevail. He submitted that until the State Government passes the order under Section 19 of the Sugar Cane Act, there can be no conflict between the provisions of the Sugar Cane Act and the Market Act and the provisions of Market Act will be operative.

5. Mr. Satish Sharma, learned Senior Counsel appearing for the petitioner in W.P. No. 3577 of 2004 and W.P. No. 3928 of 2004 adopted the arguments of Mr. Kishore Shrivastava but very fairly submitted that no 'reserved area' or 'assigned area' has been declared under Sections 15 and 16 of the Sugar Cane Act in respect of factory of the petitioner.

6. Mr. Sheel Nagu, learned Counsel appearing for respondent No. 4 in W.P. No. 3928 of 2006 cited the decision of the Supreme Court in H.S. Jayanna and Brothers and Ors. v. State of Karnataka : [2002]2SCR261 , in which the Supreme Court has taken a view that the Karnataka Agricultural Produce Markets Act, 1986 was not repugnant to the Karnataka Rice Procurement (Levy) Order, 1994 framed under the Essential Commodities Act and also held that the said Act and the Order operated in different fields and there was no conflict or inconsistency between them. He submitted that there is no conflict between the provisions of the Sugar Cane Act and the Control Order, on the one hand, and the provisions of the Market Act, on the other hand and that the Sugar Cane Act and the Control Order, on the one hand, and the Market Act, on the other hand, operate in two different fields.

7. In reply to the contention of Mr. Sanjay Agrawal in W.P. No. 391 of 1995 that the writ petitions filed by Gwalior Sugar Company Limited were barred by the principle of res judicata, Mr. Kishore Shrivastava cited the judgment of the Supreme Court in Mathura Prasad Sarjoo Jaiswal and Ors. v. Dossibai N.B. Jeejeebhoy : [1970]3SCR830 for the proposition that the doctrine of res judicata will not apply to questions relating to pure interpretation of an enactment. He submitted that in view of the interpretation now given by the Supreme Court in Belsund Sugar Company Limited v. State of Bihar (supra), to Acts similar to the Sugar Cane Act and the Market Act in the State of Bihar, the earlier order of a Single Judge of this Court, dated 20-7-1994 in M.P. No. 2250 of 1990 filed by the petitioner cannot create a bar of res judicata for this Court to consider and allow the writ petitions of Gwalior Sugar Company Limited.

8. We have examined the provisions of the Sugar Cane Act. Sub-section (1) of Section 1 of the Sugar Cane Act states that the Act may be called 'the Madhya Pradesh Sugar Cane (Regulation of Supply & Purchase) Act, 1958'. This sub-section, therefore, broadly indicates the object of the Sugar Cane Act to be regulation of supply and purchase of sugar cane. Sub-section (2) of Section 1 states that the Sugar Cane Act extends to the whole of Madhya Pradesh. Hence the Sugar Cane Act applies to the entire State of Madhya Pradesh. Sub-section (3) of Section 1 states that the Act shall come into force on such date as the State Government may, by notification, appoint. By notification dated 23rd June, 1959, the Sugar Cane Act has been brought into force with effect from 1959. Section 2 defines the expressions used in the Sugar Cane Act. Section 3 states that a Sugar Cane Board for Madhya Pradesh shall be established by the State Government by a notification and indicates the composition of the Sugar Cane Board. Section 4 deals with the functions of the Sugar Cane Board and it is stated therein that the Sugar Cane Board shall advise the State Government on various matters indicated therein. Section 5 of the Sugar Cane Act provides that there shall be established by notification, for the reserved area of a factory a Cane Development Council for each zone and also states the composition of such Cane Development Council. Section 6 deals with the functions of the Cane Development Council. Section 7 provides the manner in which a casual vacancy in the Cane Development Council can be filled up. Section 8 provides for the funds of the Cane Development Council. Section 9 states that the State Government may for purposes of the Act appoint a Cane Commissioner who shall perform such duties and exercise such powers as are conferred or imposed upon him by or under the Act. Section 10 states that the State Government may appoint such Government Officer as it thinks fit to be Additional Cane Commissioner, who will exercise such powers and discharge such duties of the Cane Commissioner as the State Government directs. Section 11 says that the State Government may for purposes of the Act appoint any person or designate such officer of the Government as it thinks fit to be Inspector within such local limits as may be assigned to him and such Inspector shall perform the duties and exercise the powers conferred or imposed upon him by or under the Act. Section 12 states that the Cane Commissioner may, for purposes of Section 15, 16 or 17 by order, require the occupier to furnish in the manner and by the date specified in the order to the Cane Commissioner an estimate of the quantity of cane which will be required by the factory during such crushing season as may be specified and the Cane Commissioner shall examine such estimate and shall publish the same with such modifications, if any, as he may make. Section 13 provides that the occupier shall maintain in the prescribed form a register of all such cane growers and Cane Growers' Co-operative Societies, as shall sell cane to that factory. Section 14 provides that the State Government may, for purposes of Section 15, 16 or 17 by order, provide for various matters relating to survey to be made of the area proposed to be reserved or assigned for supply of cane to a factory.

9. Sections 15, 16,19, 20, 21 and 22 of the Sugar Cane Act which are relevant for deciding the questions raised in these writ petitions are quoted herein below:

15. Declaration of reserved area.- Without prejudice to any order under Clause (d) of Sub-section (2) of Section 19, the Cane Commissioner may, after consulting in the manner prescribed, the occupier and Cane Growers' Co-operative Society, if any, in any area to be reserved for a factory, reserve such area for such factory and thereupon occupier thereof shall subject to the provisions of Section 22 be liable to purchase all cane grown in such area which is offered for sale to the factory.

16. Declaration of assigned area.- Without prejudice to any order under Clause (d) of Sub-section (2) of Section 19, the Cane Commissioner may after consulting in the prescribed manner the occupier and Cane Growers' Co-operative Society, if any, in any area to be assigned, assign such area for the purpose of the supply of cane to a factory in accordance with the provisions of Section 19 during any crushing season; and thereupon the occupier thereof shall subject to the provisions of Section 22 be liable to purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner.

19. Regulation of purchase and supply of cane in the reserved and assigned areas.- (1) The State Government may, for maintaining supplies, by order, regulate-

(a) a distribution, sale or purchase of cane in any reserved or assigned area; and

(b) purchase of cane in any area other than a reserved or assigned area.

(2) Without prejudice to the generality of the foregoing powers such order may provide for-

(a) the quantity of cane to be supplied by each cane grower or Cane Growers' Co-operative Society in such area to the factory for which the area has been so reserved or assigned;

(b) the manner in which cane grown in the reserved area or the assigned area shall be purchased by the factory for which the area has been so reserved or assigned and the circumstances in which the cane grown by a cane grower shall not be purchased except through a Cane Growers' Co-operative Society;

(c) the form and terms and conditions of the agreement to be executed by the occupier of the factory for which an area is reserved or assigned for the purchase of cane offered for sale;

(d) the circumstances under which permission may be granted-

(i) for the purchase of cane grown in reserved or assigned area by a purchasing agent or any person other than the factory for which area has been reserved or assigned; and

(ii) for the sale of cane grown in a reserved or assigned area to any other person or factory other than the factory for which the area is reserved or assigned;

(e) such incidental and consequential matters as may appear to be necessary or desirable for this purpose.

20. Payment of cane price.-

(1) The occupier shall make suitable provisions to the satisfaction of the Collector for the payment of the price of cane.

(2) Upon the delivery of cane, the occupier shall, subject to the deductions specified in Sub-section (2-a) be liable to pay immediately the price of the cane so supplied, together with all other sums connected therewith and where the suppliers have been made through a purchasing agent, the purchasing agent shall be similarly liable in addition to the occupier.

(2-a) Where a cane-grower or a Cane Growers' Co-operative Society, as the case may be, to whom price is payable under Sub-section (1) has borrowed a loan for cane development from any agency notified by the State Government in this behalf, the occupier or the purchasing agent, as the case may be, shall be, on being authorized by that agency so to do, entitled to deduct from the price so payable, such amounts as may be prescribed, towards the recovery of such loan and pay the same to the agency concerned forthwith.

(3) Where the person liable under Sub-section (2) is in default in making the payment of the price for a period exceeding fourteen days from the date of delivery he shall also pay interest at a rate of 14 1/2 per cent per annum from the said date of delivery up to the date of payment but the Cane Commissioner may, in any case direct, with the approval of the State Government that no interest shall be paid or be paid at such reduced rate as he may fix.

(4) The Cane Commissioner shall forward to the Collector a certificate under his signature specifying the amount of arrears on account of the price of cane plus interest, if any, due from the occupier and the Collector, on receipt of such certificate, shall proceed to. recover from such occupier the amount specified therein as if it were an arrear of land revenue together with further interest up to the date of recovery.

21. Commission on purchase of cane.-

(1) There shall be paid by the occupier a commission for every one maund of cane purchased by the factory-

(a) where the purchase is made through a Cane Growers' Cooperative Society, the commission shall be payable to the Cane Growers' Co-operative Society and the Council in such proportion as the State Government may declare; and

(b) where the purchase is made directly from the cane- grower, the commission shall be payable to the Council.

(2) The Commission payable under Clauses (a) and (b) of Sub-section (1) shall be at such rates as may be prescribed provided, however, that the rate fixed under Clause (b) shall not exceed the rate at which the Commission may be payable to the Council under Clause (a).

(3) The provisions relating to payment, interest and recovery, including recovery as arrears of land revenue, applicable to price of cane shall mutatis mutandis apply to payment and recovery of commission under Sub-section (1).

22. Power to declare varieties of cane to be unsuitable for use in factories.-

(1) The State Government may, by notification, declare that-

(a) cane of any variety grown in any area specified in such notification is unsustainable for use in a factory situated in the said area;

(b) ratoon cane of any variety grown in any area specified in such notification is unsuitable for use in a factory situated in the said area; and

(c) seed cane of any variety is unsuitable for distribution to cultivators in the area specified in such notification.

(2) A notification under Sub-section (1) shall be issued not later than the 20th November of the year immediately preceding the crushing season with respect to which such notification is to operate.

(3) Where any seed cane of any variety has been declared under Sub-section (1) to be unsuitable for distribution to cultivators in that area, the occupier or any other person acting on his behalf or Cane Growers' Co-operative Society shall not distribute seed cane of such variety or varieties to any person to be used by cane growers or the members of the Cane Growers' Co-operative Societies in any area.

(4) Where cane or ratoon cane of any variety has been declared under Sub-section (1) to be unsuitable for use in a factory, the occupier or any other person acting on his behalf or a cane grower or a Cane Growers' Co-operative Society shall not plant cane of any variety or keep ratoon cane of any such variety.

It will be clear from a reading of Section 15 of the Sugar Cane Act quoted above that the Commissioner may after consulting the occupier and Cane Growers' Co-operative Society, if any, in any area to be reserved for a factory, reserve such area for such factory and thereupon the occupier of the factory shall subject to provisions of Section 22 be liable to purchase all cane grown in such area which is offered for sale to the factory. A reading of Section 16 quoted above would further show that the Cane Commissioner may after consulting in the prescribed manner the occupier and Cane Growers' Co-operative Society, if any, in any area to be assigned, assign such area for the purpose of the supply of cane to a factory in accordance with the provisions of Section 19 during any crushing season; and thereupon the occupier of the factory shall subject to the provisions of Section 22 will be liable to purchase such quantity of cane grown in that area and offered for sale to the factory as may be determined by the Cane Commissioner.

10. Sub-section (1) of Section 19 quoted above states that the State Government may, for maintaining supplies, by order, regulate the distribution, sale or purchase of cane in any reserved or assigned area and purchase of cane in any area other than a reserved or assigned area. Sub-section (2) of Section 19 provides that without prejudice to the generality of the powers of the State Government under Sub-section (1), such order of the State Government may provide for the quantity of cane to be supplied by each cane grower or Cane Growers' Co-operative Society in such area to the factory for which the area has been so reserved or assigned, the manner in which cane grown in the reserved area or the assigned area shall be purchased by the factory for which the area has been so reserved or assigned, the form and terms and conditions of the agreement to be executed by the occupier of the factory for which the area is reserved or assigned for purchase of cane offered for sale and the circumstances under which permission may be granted for the purchase of cane grown in reserved or assigned area by a purchase agent or any person other than the factory for which area has been reserved or assigned and for the sale of cane grown in a reserved or assigned area to any other person or factory, other than the factory for which the area is reserved or assigned. Sub-section (1) of Section 20 quoted above provides that the occupier of the factory shall make suitable arrangement to the satisfaction of the Collector for the payment of the price of cane and Sub-section (2) of Section 20 states that upon the delivery of sugar cane the occupier of the factory shall be liable to pay immediately the price of the cane so supplied, together will all other sums connected therewith. Sub-section (3) of Section 20 further provides that where default is made in making the payment of the price for a period exceeding fourteen days from the date of delivery, he shall also pay interest at a rate of 7 1/2 per cent per annum from the said date of delivery up to the date of payment but the Cane Commissioner may, with the approval of the State Government, exempt such payment of interest or reduce the rate of interest. Sub-section (4) of Section 20 also provides that where such price or interest is not paid, the Cane Commissioner shall forward a certificate to the Collector for recovery of the amount of arrears of price plus interest as if it were an arrear of land revenue. Section 21 provides for payment of commission by the occupier to the Cane Growers' Co- operative Society and the Cane Development Council. Section 22 quoted above empowers the State Government to declare by notification any varieties of cane to be unsuitable for use in factories in which case the occupier of the factory will not be obliged to purchase such varieties or for use in factory. Thus, in the Sugar Cane Act, an exhaustive scheme has been made for purchase and delivery of Sugar Cane for factories and for payment of price of such sugar cane by occupiers of the factories to the cane growers in time and for payment of interest for delay in making such payment of price and for recovery of arrears of price and interest from the occupiers of factories as arrears of land revenue.

11. We may now examine the relevant provisions of the Control Order made under Section 3 of the Essential Commodities Act, 1955 by the Central Government. Clause 2(g) of the Control Order defines 'price' to mean the price or the minimum price fixed by the Central Government from time to time for sugar cane delivered to a sugar factory at the gate of the factory or at sugar cane purchasing centre, or to a Khandsari Unit. Clause 3 of the Control Order is quoted hereunder:

3. Minimum price of sugar cane payable by producer of sugar.-

(1) The Central Government may, after consultation with such authorities, bodies, or associations as it may deem fit, by notification in the Official Gazette, from time to time, fix the minimum price of sugar cane to be paid by producers of sugar or their agents for the sugar cane purchased by them, having regard to-

(a) the cost of production of sugar cane;

(b) the return to the grower from alternative crops and the general trend of price of agricultural commodities;

(c) the availability of sugar to the consumer at a fair price;

(d) the price at which sugar produced from sugar cane is sold by producer of sugar; and

(e) the recovery of sugar from sugar cane:

Provided 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.

Explanation :- Difference prices may be fixed for difference qualities or varieties of sugar cane.

(2) No person shall sell or agree to sell sugar cane to a producer of sugar or his agent and no such producer or agent shall purchase or agree to purchase sugar cane at a price lower than that fixed under Sub-clause (1).

(3) Where a producer of sugar purchases any sugar cane from a grower of sugar cane or from a sugar cane growers' co- operative society, the producer shall, unless there is an agreement in writing to the contrary between the parties, pay within fourteen days from the date of delivery of the sugar cane to the seller or tender to him the price of the cane sold at the rate agreed to between the producer and the sugar cane grower or sugar cane growers' co-operative society or that fixed under Sub-clause (1), as the case may be, either at the gate of the factory or at the cane collection centre or transfer or deposit the necessary amount in the Bank account of the seller of the co-operative society, as the case may be.

(4) Where sugar cane is purchased through an agent, the producer or the agent shall pay or tender payment of such price within the period and in the manner aforesaid and if neither of them has so paid or tendered payment, each of them shall be deemed to have contravened the provisions of this clause.

(5) At the time of payment at the gate of the factory or at the cane collection centre, receipts, if any, given by the purchaser, shall be surrendered by the cane grower or Co-operative Society.

(6) Where payment has been made by transfer or deposit of the amount to the Bank account of the seller or the Co-operative Society as the case may be, the receipt given by the purchaser if any, to the grower or the Co-operative Society, if not returned to the purchaser shall become invalid.

12. Sub-clause (1) of Clause 3 indicates the factors which the Central Government has to take into consideration while fixing the minimum price of sugar to be paid by purchasers of sugar or their agents for the sugar cane purchased by them and these are (a) the cost of production of sugar cane, (b) the return to the grower from alternative crops and the general trend of price of agricultural commodities, (c) the availability of sugar to the consumer at a fair price, (d) the price at which sugar produced is sold by producer of sugar cane, and (e) the recovery of sugar from sugar cane. Sub-clause (2) of Clause 3 provides that no person shall sell or agree to sell sugar cane to a producer of sugar or his agent and no such producer or agent shall purchase or agree to purchase sugar cane at a price lower than that fixed under Sub-clause (1). Sub-clause (3) of Clause 3 stipulates the time limit within which and the manner in which the price of cane purchased by a producer of sugar from grower of sugar cane or from sugar cane growers' co-operative society, will be paid. Clause 4 of the Control Order provides for minimum price of sugar cane payable by producer of khandsari sugar. Clause 5 provides for payment of additional price for sugar cane purchased during each of the four successive years beginning on the 1st day of November, 1958. Clause 5-A of the Control Order provides for additional price for sugar cane purchased on or after 1st October, 1974.

13. Clause 6 deals with the power to regulate distribution and movement of sugar cane and is quoted herein below:

6. Power to regulate distribution and movement of sugar cane.-

(1) The Central Government may, by order notified in the Official Gazette:

(a) reserve any area where sugar cane is grown (hereinafter in this clause referred to as 'reserved area') for a factory having regard to the crushing capacity of the factory, the availability of sugar cane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugar cane required by it;

(b) determine the quantity of sugar cane which a factory will require for crushing during any year;

(c) fix, with respect to any specified sugar cane grower or sugar cane growers generally in a reserved area, the quantity or percentage of sugar cane grown by such grower or growers as the case may be, which each such grower by himself or, if he is a member of a co-operative society of sugar cane growers operating in the reserved area, through such society, shall supply to the factory concerned;

(d) direct a sugar cane grower or a sugar cane growers' cooperative society, supplying sugar cane to a factory, and the factory concerned enter into an agreement to supply or purchase, as the case may be, the quantity of sugar cane fixed under paragraph (c);

(e) direct that no gur (jaggery) or khandsari sugar or sugar shall be manufactured from sugar cane except and in accordance with the conditions specified in the licence issued in this behalf;

(f) prohibit or restrict or otherwise regulate the export of sugar cane from any area (including a reserved area) except under and in accordance with a permit issued in this behalf.

(2) Every sugar cane grower, sugar cane growers' co-operative society and factory, to whom or to which an order made under paragraph (c) of Sub-clause (1) applies, shall be bound to supply or purchase, as the case may be, that quantity of sugar cane covered by the agreement entered into under the paragraph and any wilful failure on the part of the sugar cane grower, sugar cane growers' co-operative society or the factory to do so, shall constitute a breach' of the provisions of this order:

Provided that where the default committed by any sugar cane growers' co-operative society is due to an failure on the part of any sugar cane grower, being a member of such society, such society shall not be bound to make supplies of sugar cane to the factory to the extent of such default.

It will be clear on a reading of Sub-clause (1) of Clause 6 of the Control Order quoted above that the Central Government has the power to issue orders (a) reserving any area where sugar cane is grown for a factory with a view to enable the factory to purchase the sugar cane required, (b) determine the quantity of sugar which the factory will require for crushing during any year, (c) fix the quantity of sugar cane which the sugar cane grower or growers in any reserved area, shall supply to the factory concerned, (d) direct the sugar cane growers or a sugar cane growers' co-operative society supplying sugar cane to a factory and also the factory concerned, to enter into an agreement to supply or purchase, as the case may be, the quantity of sugar cane fixed by the Central Government and (e) direct that no sugar shall be manufactured from the sugar cane except and in accordance with the conditions specified in the license issued in that behalf. Sub-clause (2) of Clause 6 of the Control Order further provides that when the Central Government fixes the quantity of sugar cane to be supplied under para (c) of Sub-clause (1) of Clause 6, every sugar cane grower/sugar cane growers' co-operative society and the factory shall be bound to supply or purchase, as the case may be, that quantity of sugar cane covered by the agreement under the said para (c) of sub- Clause (1) of Clause 6. The Control Order made by the Central Government under Section 3 of the Essential Commodities Act, 1955, therefore, has made elaborate provisions for fixation of the minimum price by the Central Government payable by a producer of sugar to sugar cane growers and the sugar cane growers' co-operative society. The Control Order also confers wide powers on the Central Government for regulating the supply of sugar cane by sugar cane growers or sugar cane growers' co-operative society to factories.

14. The aforesaid provisions in the Control Order made by the Central Government under Section 3 of the Essential Commodities Act are complementary to the provisions of the Sugar Cane Act made by the State Legislature of Madhya Pradesh and the object of both the Control Order made by the Central Government and the Sugar Cane Act made by the State Legislature of Madhya Pradesh is to ensure payment of minimum and additional price to the sugar cane growers or the sugar cane growers' co-operative societies, timely supply of required quantity of sugar cane to the factories, prompt payment of price for such sugar cane to the sugar cane growers, payment of interest on unpaid price to the cane growers or cane growers' co-operative societies and recovery of arrears price and interest from the occupiers of the factories. The Sugar Cane Act and the Control Order thus protect the rights of the cane growers and the factories requiring sugar cane.

15. The Preamble of the Market Act makes it clear that the object of the Market Act is to provide for the better regulation of buying and selling of agricultural produce and the establishment and proper administration of markets of agricultural produce in the State of Madhya Pradesh and sugar cane has been specified in the Schedule to the Market Act as an agricultural produce for the purpose of the Market Act. Thus the question which arises for decision is whether buying and selling of sugar cane between occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies would also be regulated by the provisions of the Market Act. The answer to the question will depend upon whether the provisions of the Market Act, if applied to buying and selling of sugar cane between the sugar factories and the sugar cane growers or sugar cane growers' co-operative societies would come in conflict with the provisions of the Sugar Cane Act made by the State Legislature of Madhya Pradesh and/or the Control Order made by the Central Government under Section 3 of the Essential Commodities Act.

16. Section 4 of the Market Act provides that the State Government may by a notification establish a market for an area specified in the notification under Section 3 or any portion thereof for the purpose of the Act in respect of the agricultural produce specified in the Schedule. Section 6 of the Market Act inter alia provides that on the establishment of market under Section 4, no person shall except in accordance with the provisions of the Market Act and the Rules and the Bye-laws made thereunder, use any place in the market area for marketing of any notified agricultural produce. Hence, once a market is established under Section 4 of the Act for any area, buying and selling of the notified agricultural produce in such market area can be only in accordance with the provisions of the Market Act and the Rules and Bye-laws made thereunder. Sections 36 and 37 of the Market Act provide the manner in which such buying and selling will take place in the market area and are quoted herein below:

36. Sale of notified agricultural produce in markets.-

(1) All notified agricultural produce brought into the market proper for sale shall be brought into the market yard/yards specified for such produce and shall not, subject to the provisions of Sub-section (2), be sold at any other place outside such yard.

(2) Such notified agricultural produce as may be purchased by the licensed traders from outside the market area in the course of commercial transaction may be brought and sold any where in market area in accordance with the provisions of the bye-laws.

(3) The price of the notified agricultural produce brought into the market yard for sale shall settled by tender bid or open auction system and no deduction shall be made from the agreed price on any account whatsoever:

Provided that in the market yard the price of such notified agricultural produce of which support price has been declared by the State Government, shall not be settled below the price so declared and no bid shall be permitted to start, in the market yard, below the rate so fixed.

(4) Weighment or measurement of all the notified agricultural produce so purchased shall be done by a licensed weighman in the market yard or any other place specified by the market committee for the purpose:

Provided that the Weighment, measurement or counting as the case may be, of plantain, Papaya or any other perishable agricultural produce as may be specified by the State Government, by notification, shall be done by a licensed weighman in the place where such produce has been grown.

37. Conditions of buying and selling.-

(1) Any person who buys notified agricultural produce in the market area shall execute an agreement in triplicate in such form as may be prescribed, in favour of the seller. One copy of the agreement shall be kept by the buyer, one copy shall be supplied to the seller and the remaining copy shall be kept in the record of the market committee.

(2) (a) The price of the agricultural produce bought in the market yard shall be paid on the same day to the seller at the market yard.

(b) In the case purchaser does not make payment under Clause (a), he shall be liable to make additional payment at the rate of one per cent, per day of the total price of the agricultural produce payable to the seller within five days;

(c) In case the purchaser does not make payment with additional payment to the seller under Clauses (a) and (b) above within five days from the day of such purchase, his licence shall be deemed to have been cancelled on the sixth day and he or his relative shall not be granted any licence under this Act for a period of one year from the date of such cancellation.

Explanation :- For the purpose of this clause 'relative' means the relative as specified in the explanation in Clause (a) of Sub-section (1) of Section 11.

(3) No wholesale transaction of notified agricultural produce shall be entered into directly by licensed traders with producers of such produce except in the market yards.

(4) The Commission agent shall recover his commission only from his principal (Trader) at such rates as may be specified in the bye-laws including all such expenses as may be incurred by him in storage of the produce and other services rendered by him.

(5) Every commission agent shall be liable-

(a) to keep the goods of his principal in safe custody without any charge other than the commission payable to him; and

(b) to pay the principal, as soon as the goods are sold, the price thereof, irrespective of whether he has or has not received the price from the buyer of such goods.

17. Sub-section (1) of Section 36 quoted above clearly provides that all notified agricultural produce brought into the market for sale shall be brought into market yard/yards specified for such produce and shall not, subject to the provisions of Sub-section (2), be sold at any other place outside such yard. Sub-section (3) of Section 36 further provides that the price of the notified agricultural produce brought into the market yard for sale shall be settled by tender bid or open auction system and no deduction shall be made from the agreed price on any account whatsoever. Sub-section (4) of Section 36 of the Market Act further provides that weighment or measurement of all the notified agricultural produce so purchased shall be done by a licensed weighman in the market yard or any other place specified by the market committee for the purpose. Sub-section (1) of Section 37 of the Market Act states that any person who buys notified agricultural produce in the market area shall execute an agreement in triplicate in such form as may be prescribed, in favour of the seller. Sub-section (2) of Section 37 provides for payment of price of agricultural produce brought in the market yard on the same day to the seller at the market yard and additional payment at the rate of one per cent, per day of the total price of the agricultural produce payable to the seller within five days. These provisions of Sections 36 and 37 of the Market Act are in direct conflict with the provisions of Clauses (3), (4), (5), (5-A) and (6) of the Control Order made by the Central Government under Section 3 of the Essential Commodities Act, 1955, discussed above. Similarly these provisions of the Market Act are in direct conflict with the provisions of Sections 12, 15,16,19,20,21 and 22 of the Sugar Cane Act made by the State Legislature of Madhya Pradesh, discussed above. In view of such conflict, either the aforesaid provisions of the Market Act apply to the transactions of buying and selling of sugar cane between the occupiers of factories and the sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies, or the provisions of the Control Order made by the Central Government and the aforesaid provisions of the Sugar Cane Act made by the State Government apply to such transactions of buying and selling between the occupiers or owners of sugar factories and the sugar cane growers or sugar cane growers' co-operative societies. The Control Order made by the Central Government and the Sugar Cane Act made by the State Legislature being a Special Order and Special Act relating to supply and purchase of sugar cane will apply to transactions of sale and purchase of sugar cane between the occupiers of the factory and the sugar cane growers or sugar cane growers' co-operative societies and the provisions of the Market Act being a General Act with regard to agricultural produce will stand excluded and will not apply to such transactions of buying and selling of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies.

18. For the aforesaid conclusion, we are supported by the decision of the five Judge Bench of the Supreme Court in Belsund Sugar Company Limited v. State of Bihar (supra). Para 58 of the said judgment as reported in the AIR at Page 3148 is quoted herein below:

58. It has to be appreciated that the aforesaid provisions of the Sugar Cane (Control) Order operated in the same field in which the Bihar Legislative enactment, namely, the Sugar Cane Act operates and both of them are complementary to each other. When taken together, they wholly occupy the field of regulation of price of sugar cane and also the mode and manner in which sugar cane has to be supplied and distributed to the earmarked sugar factories and thus lay down a comprehensive scheme of regulating sugar cane growers to the earmarked sugar factories. It is, is however, true that comprehensive procedure or machinery for enforcing these provisions is found in greater detail in the Sugar Cane Act of the Bihar Legislation. But on a combined operation of both these provisions, it becomes at once clear that the general provisions of the Market Act so far as the regulation of sale and purchase of sugar cane is concerned get obviously excluded and superseded by these special provisions.

19. Moreover, once we hold that the provisions of the Sugar Cane Act and the Control Order apply and the provisions of the Market Act will not apply to such transactions of sale and purchase of sugar cane between the occupiers of the factories and the sugar cane growers or sugar cane growers co-operative societies, it is difficult to accept the contention of Mr. Sanjay Yadav that if no orders are passed by the State Government or the Central Government under the Sugar Cane Act or the Control Order for regulating the supply and purchase of sugar cane under the Sugar Cane Act or the Control Order, the provisions of the Market Act will apply to even such transactions of sale and purchase of sugar cane between occupiers of factories and sugar cane growers or sugar cane growers co-operative societies. In I.T.C. Limited v. Agricultural Produce Market Committee and Ors. (supra), cited by Mr. Sanjay Yadav, learned Deputy Advocate General, an order of assessment was passed by the Agricultural Produce Market Committee, Monghyr demanding a sum of Rs. 35,87,072/- as fees under the Bihar Agricultural Produce Market Act on purchases of unprocessed tobacco leaves from the growers. The said order of assessment passed by the Agricultural Produce Market Committee Monghyr was challenged by the I.T.C. Limited on inter alia the ground that transactions of purchase and sale of tobacco come under the purview of the Tobacco Board Act and do not come within the purview of Bihar Agricultural Produce Market Act. G.B. Patnaik, J., speaking for himself and S.P. Bharucha, the then CII, held:.if we examine the difference provisions of the Tobacco Board Act, more particularly, Sections 3, 8 and 32 and the provisions of the Agricultural Produce Markets Act, more particularly Section 4(2) thereof as well as Section 15, which is said to be the heart and soul of Markets Act in Belsund's case, the conclusion is irresistible that the two Acts come in direct collision with each other and it is difficult to reconcile the provisions of both the Acts. Necessarily, therefore, the Tobacco Board Act, having been enacted by the Parliament and making all provisions in relation to the tobacco industry including the provisions for growing of tobacco as well as sale and purchase of raw tobacco, in accordance with the procedure prescribed under the said Act, the provisions of the Agricultural Produce Markets Act, entitling the Market Committee to levy fee for sale and purchase of raw tobacco within the market area will not be operative, so far as the produce 'tobacco' is concerned. In other words, Central Act would prevail and would govern the entire gamut of tobacco industry....

Y.K. Sabharwal, J., as he then was, expressed the following opinion:

43. The State legislations and Parliamentary legislations cannot co-exist is apparent from various provisions of the two legislations. To illustrate in this regard reference may be made on one hand to Section 4(2) of Bihar Act and similar provision in other State legislations and on the other to the provisions of Section 13 of the Tobacco Board Act in States wherein this section has been enforced and also to Section 8(2)(cc). Reference can also be made to Rule 32 of the Tobacco Board Rules, 1976 framed in exercise of the powers conferred by Section 32 of the Tobacco Board Act regarding purchase of Virginia tobacco in comparison to Section 15 of the Bihar Act requiring the agricultural produce, which tobacco is, to be brought in the market yard and sold by means of an auction or tender to the highest bidder. The power of the Tobacco Board to purchase from growers as provided in Rule 32 cannot co-exist with sale by auction or tender. Even in regard the price and manner of payment, licensing and auction procedure under two legislations and rules made thereunder show that they cannot co-exist. In this regard reference can also be made to the Tobacco Board (Auction) Rules, 1984 and Tobacco Board (Auction) Regulation, 1984. It is evident that the compliance with the provisions of one would involve non- compliance of the provisions of the other. The provisions of the two legislations have been referred to in the judgment of Brother Patnaik, J. I am in respectful agreement with the opinion of Justice Patnaik that the two cannot operate and co-exist simultaneously. In this view, the question about the legislative competence of the State Legislature will have to be examined.

Brijesh Kumar, J., agreed with the conclusions of Y.K. Sabharwal, J., as he then was, on all points. Thus, as per the majority opinion stated in sub-paragraph (3) in Paragraph 193, as reported in the AIR at Page 937, the State Legislations and Tobacco Board Act, to the extent that they relate to sale of tobacco in market areas, cannot co-exist and the former prevails over the latter. In her minority opinion, Ruma Pal, J., held that even if one has to concede that there is conflict between the provisions of the aforesaid two Acts, atleast in those States where Sections 13, 13- A and 14 of the Tobacco Board Act do not operate, the provisions of the State Market Act must prevail and in such States where Sections 13, 13-A and 14 of the Tobacco Board Act are not applicable, fees can be levied under the Market Act. Obviously, the minority opinion of Ruma Pal, J., cited by Mr. Yadav cannot be the law binding on this Court.

20. In H.S. Jay anna and Brothers and Ors. v. State of Karnataka (supra), cited by Mr. S. Nagu, the Supreme Court found that the Karnataka Rice Procurement (Levy) Order, 1984 framed under the Essential Commodities Act, 1955 dealt with compulsory acquisition of 1/3rd of the rice of each variety produced by miller at a purchase price fixed by the Government and also required the miller to supply to the Government under its purchase agreement and deliver the procured rice at a notified place. But the said Control Order did not deal with the sale and purchase of remaining 2/3rd rice and, therefore, the Supreme Court held that the said Control Order was limited in operation and did not cover the entire field of marketing of sale and purchase of paddy or rice procured out of paddy and that the Karnataka Agricultural Produce Marketing Regulation Act, 1966 would apply to the regulation of marketing of rice and that the said two Acts did not deal with the same subject and do not cover the same field and there was no conflict between them; and that the reliance placed by the Counsel for the appellant on the decision in Belsund Sugar Company Ltd. (supra), was totally misplaced. In the present case on the other hand, we have found that the Sugar Cane Act and the Control Order together cover the entire field relating to transactions of purchase and sale of sugar cane between occupiers of factories and cane-growers and cane-growers' co-operative societies and the provisions of the Sugar Cane Act and the Control Order come in conflict with the provisions of the Market Act and that the Sugar Cane Act and the Control Order being Special Act and Order relating to transactions of sale and purchase of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies, the provisions of the Market Act stand excluded.

21. Coming now to the contention of Mr. Sanjay Agrawal that the writ petitions filed by Gwalior Sugar Company Limited were barred by res judicata, in Mathum Prasad Sarjoo Jaiswal and Ors. v. Dossibai N.B. Jeejeebhoy (supra), the Supreme Court cited the following observations of Rankin, C.J., in Tarini Charan Bhattacharjee's case AIR 1928 Cal. 777:

The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory by precluding the parties from reopening or recontesting that which has been finally decided.

It will be clear from the aforesaid observations of Rankin, C.J., that the object of doctrine of res judicata is not to fasten upon the parties special principles of law applicable to them inter se. One we have held, relying on the judgment of the Supreme Court in Belsund Sugar Company Limited (supra), that the provisions of the Market Act do not apply to the transactions of sale and purchase of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies and accordingly no market fee is leviable under the Market Act on such transactions of sale and purchase of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies, this will be the law according to which the rights of the litigating parties have to be determined and by the doctrine of res judicata, a different law will not determine the rights of Gwalior Sugar Company Limited, vis-a-vis the Market Committees. That apart, the earlier order dated 20-7-94 of this Court in Misc. Petition No. 2250 of 1990 was based upon a particular cause of action that had arisen then and the order passed by the Court is final with regard to the said cause of action but cannot constitute a bar for this Court to entertain a writ petition filed before this Court on the basis of a fresh cause of action.

22. In Ashok Leyland Ltd. v. Union of India : [1997]2SCR224 , the Supreme Court took a view that Section 6A of the Central Sales Tax Act, 1956 does not create conclusive presumption as contended by the assessee. In a subsequent decision in Ashok Leyland Ltd. v. State of Tamil Nadu and Ors. AIR 2004 SC 2836, interpretation of Section 6A of the Central Sales Tax Act, 1956 was again considered and it was contended on behalf of the State of Tamil Nadu that the question as regards the conclusiveness or otherwise of an order under Sub-section (2) of Section 6A of the said Act had already been determined in the aforesaid earlier decision of the Supreme Court and that the said decision binds the parties because of the principle of res judicata, but the Supreme Court turned down this plea of res judicata in Paragraph 116 of the judgment reported in the AIR, relevant portion of which is quoted herein below:

The principle of res judicata is a procedural provision. A jurisdictional question if wrongly decided would not attract the principle of res judicata. When an order is passed without jurisdiction, the same becomes a nullity. When an order is a nullity, it cannot be supported by invoking the procedural principles like estoppel, waiver or res judicata....

Since we have held that no market fee can be levied under the Market Act on transactions of sale and purchase of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies, all demands of market fees on such transactions are without jurisdiction and are nullities and the principle of res judicata cannot be invoked as a bar in respect of writ petitions filed by Gwalior Sugar Company Limited.

23. For the aforesaid reasons, we allow the writ petitions and declare that the Market Act will not apply to the transactions of sale and purchase of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies and accordingly no fees an be collected under the Market Act on such transactions of sale and purchase of sugar cane between the occupiers of factories and the sugar cane growers or sugar cane growers' co-operative societies. Accordingly demands of market fees under the Market Act which are contrary to the aforesaid declarations are quashed and the market fees collected from the petitioners contrary to the aforesaid declarations in respect of which refund has been claimed in the respective writ petitions, be refunded to the petitioners. We clarify that this judgment will apply prospectively and will not apply to fees already collected by Market Committees under the Market Act in respect of which writ petitions for refund have not been filed before this Court. Considering the facts and circumstances of the case, the parties shall bear their own costs.