1995 (10) TMI 240 - HC - Indian Laws

State Legislature's Competence to Enact U.P. Sheera Niyantran Adhiniyam 1964 under Federal Principles

The Full Bench held that the State Legislature was competent to enact the U.P. Sheera Niyantran Adhiniyam 1964, regulating molasses under Entry 33 of List ... Denudation of State legislative power by parliamentary declaration - concurrent legislative field under Entry 33 of List III - scope and effect of Section 18G of the Industries (Development and Regulation) Act, 1951 - pith and substance doctrine in distribution of legislative powers - operation of the non-obstante language in Article 246 - procedure under Chapter VIII, Rule 3 of Allahabad High Court Rules regarding divided opinionsScope and effect of Section 18G of the Industries (Development and Regulation) Act, 1951 - concurrent legislative field under Entry 33 of List III - pith and substance doctrine in distribution of legislative powers - operation of the non-obstante language in Article 246 - Whether by virtue of Section 18G of the I.D.R. Act the State Legislature was denuded of power to regulate supply, distribution and price of molasses and thereby incompetent to enact Sections 7, 8 and 10 of the U.P. Sheera Niyantran Adhiniyam, 1964. - HELD THAT: - Having examined the constitutional drafts, Constituent Assembly debates, the structure and inter-relationship of Entries in Lists I, II and III, the legislative history (including insertion of Section 18G in 1953) and the authorities cited, the Court held that Section 18G is referable to Entry 33 of List III and not to Entry 52 of List I. The Court applied the pith and substance doctrine to distinguish between 'industry' (Entry 24, List II) and trade/production/supply/distribution of products (Entries 26,27 List II and Entry 33 List III) and explained that a parliamentary declaration under Entry 52 transfers certain aspects of Entry 24 to Entry 52 but the regulation of products falls under Entry 33 (concurrent). The Court further held that the non-obstante and 'subject to' language in Article 246 operate only where irreconcilable conflict exists; reconciliation and pith-and-substance analysis must precede invocation of federal supremacy. On these bases Section 18G was held to be a concurrent-field provision and did not oust the competence of the U.P. Legislature; consequently Sections 7, 8 and 10 of the Adhiniyam, having Presidential assent under Article 254, are valid. The Court rejected authorities relied on by petitioners as distinguishable on facts or entries and treated certain observations in other cases as not overruling settled precedent (notably Tika Ramji). [Paras 33, 69, 70]Section 18G is referable to Entry 33 of List III and does not denude the State Legislature of competence; Sections 7, 8 and 10 of the U.P. Sheera Niyantran Adhiniyam, 1964 are valid.Procedure under Chapter VIII, Rule 3 of Allahabad High Court Rules regarding divided opinions - judicial meaning of 'judgment' versus 'opinion' - Whether the separate opinions delivered and signed by the two Judges of the Division Bench on January 6, 1995 operated as final judgments and thereby precluded formulation of a point of difference and reference to another Judge under the H.C. Rules. - HELD THAT: - The Court analysed the scope and purpose of Chapter VIII, Rule 3 of the Allahabad High Court Rules, examined authorities on the legal meaning of 'judgment' (and finality), and distinguished situations governed by civil procedure rules. It held that where two Judges give contradictory or differing conclusions the writings are opinions if they do not jointly and conclusively determine the rights of the parties; only a final adjudication that conclusively determines rights constitutes a 'judgment' for the purposes of precluding reference. The Division Bench had correctly stated that their views were divided and properly framed the point of difference on the same day; therefore the reference under Rule 3 to another Judge (or Judges) was competent. The Full Bench was limited to deciding the referred point and could not reopen issues on which the two Judges were unanimous. [Paras 76, 77, 89]The orders/opinions of the two Judges were opinions, not final judgments; the reference under Chapter VIII, Rule 3 was valid and the Full Bench is confined to the referred point.Final Conclusion: The Full Bench answered the referred question in the negative: Section 18G of the I.D.R. Act is a provision referable to Entry 33 of List III (a concurrent field), and did not denude the U.P. Legislature of power to enact Sections 7, 8 and 10 of the U.P. Sheera Niyantran Adhiniyam, 1964; those provisions, having Presidential assent, are valid. The Court also held that the Division Bench's differing opinions were properly referred under Chapter VIII, Rule 3 and confined the Full Bench to the single referred point. Issues Involved:1. Competence of the State Legislature to enact U.P. Sheera Niyantran Adhiniyam 1964.2. Legislative developments concerning the control of molasses.3. Interpretation of relevant constitutional entries and their interrelationship.4. Application of the doctrine of 'occupied field' and federal supremacy.5. Validity of the U.P. Sheera Niyantran Adhiniyam 1964 in light of Section 18G of the Industrial (Development and Regulation) Act, 1951.Issue-wise Detailed Analysis:1. Competence of the State Legislature to Enact U.P. Sheera Niyantran Adhiniyam 1964:The primary issue was whether the State Legislature was competent to legislate on the regulation of molasses, a product of the sugar industry, under Sections 7, 8, and 10 of the U.P. Sheera Niyantran Adhiniyam 1964, in light of Section 18G of the Industrial (Development and Regulation) Act, 1951. The Court concluded that the State Legislature retained the power to legislate on this matter under Entry 33 of List III of the Seventh Schedule, as Section 18G of the IDR Act is referable to this entry, making it a concurrent subject.2. Legislative Developments Concerning the Control of Molasses:The Court traced the history of legislation related to the control of molasses in Uttar Pradesh. Initially, the U.P. Molasses Act 1947 regulated the supply and pricing of molasses. This was repealed and replaced by the U.P. Sheera Niyantran Adhiniyam 1964. The Molasses Control Order 1961, issued under Section 18G of the IDR Act, was never applied to U.P., and control continued under the Adhiniyam until its rescindment in 1993.3. Interpretation of Relevant Constitutional Entries and Their Interrelationship:The Court examined the relevant entries in the Seventh Schedule of the Constitution. Entry 52 of List I pertains to industries controlled by the Union, while Entry 33 of List III covers trade, commerce, and production, supply, and distribution of products of controlled industries. The Court emphasized that the subject matter of trade, commerce, and production, supply, and distribution of controlled industries falls under Entry 33 of List III, not Entry 52 of List I.4. Application of the Doctrine of 'Occupied Field' and Federal Supremacy:The Court addressed the argument that the field became occupied by Parliament upon enacting Section 18G of the IDR Act. It was held that the doctrine of 'occupied field' and federal supremacy applies only when there is an irreconcilable conflict between Union and State legislation. Since Section 18G is a concurrent subject, the U.P. Legislature's enactment of the Adhiniyam was valid, subject to the President's assent as per Article 254 of the Constitution.5. Validity of the U.P. Sheera Niyantran Adhiniyam 1964 in Light of Section 18G of the Industrial (Development and Regulation) Act, 1951:The Court concluded that Section 18G of the IDR Act does not denude the State Legislature's power to legislate on the regulation of molasses. The Adhiniyam, being a concurrent legislation, is valid with the President's assent, as required under Article 254. The Court upheld the validity of Sections 7, 8, and 10 of the Adhiniyam.Conclusion:The Full Bench answered the referred question in the negative, holding that the State Legislature was competent to enact the U.P. Sheera Niyantran Adhiniyam 1964. The judgment emphasized the concurrent nature of the legislative field concerning the regulation of molasses and upheld the validity of the Adhiniyam, subject to the President's assent. The decision reaffirmed the principles of federalism and the proper interpretation of constitutional entries.