2023 (10) TMI 1500 - HC - Indian Laws

Sugarcane growers retain pricing rights despite 2009 amendment deleting Clause 5A under Section 6 General Clauses Act

The South Indian Sugar Mills Association - Tamil Nadu, rep. by its Secretary Versus The Union of India, rep by the Secretary, New Delhi; The Director of Sugar and Cane Commissioner of Tamil Nadu; Tamil Nadu Karumbu Vivasayigal Sangam

Madras HC dismissed a writ appeal challenging the invocation of omitted Clause 5A of the Sugarcane Control Order, 1966. The court held that the 2009 ... Interpretation of statute - amendment to the Sugarcane (Control) Order 1966 - Dismissal of the writ petition holding that the omitted Clause 5A of the Sugarcane Control Order, 1966 can be invoked against the members of the Appellant Association - HELD THAT:- The sheet anchor of the argument of the appellants is that after the amendment in 2009 to the Sugarcane Control Order, deleting the Statutory Minimum Price and substituting Fair and Remunerative Price consequently omission of Second Schedule with effect from 22.10.2009 leads to a situation where the first respondent has no jurisdiction to determine the 'L' Factor for the sugar seasons 2004-2005 to 2008-09. It is further contended that omission of a Second Schedule with effect from 22.10.2009 is a deletion and no action can be taken on deleted / omitted provision since Section 6 of the General Clauses Act would have no application to a Control Order which is neither an enactment nor a regulation in terms of Section 6 of the General Clauses Act. The Writ Court, taking into consideration the scope of Essential Commodities Act, the object of the Sugarcane Control Order, the decisions of the Hon'ble Supreme Court in Union of India v. Cynamide India Ltd and another [1987 (4) TMI 478 - SUPREME COURT] and K. Ramanathan v. State of Tamil Nadu and another [1985 (2) TMI 249 - SUPREME COURT], observed that no attempt can be permitted to be made to dilute the object and if done, would be against the public interest. The right of cane growers to be entitled for Statutory Minimum Price (SMP) is a statutory right. It accrues on the date when supply of sugarcane is made to the sugar mills. The Central Government, though thought fit to introduce a new system of determining fair price and brought into effect Fair Remunerative Price, that would not in any manner affect the rights of cane growers to be entitled to SMP, which was very much available in the Sugarcane Control Order at the relevant time during which supply of sugarcane has been done. Nowhere in the amendment in the year 2009, there is any such intention to obliterate or to deny the benefit which has accrued in favour of the cane growers. The Central Government is right in its stand that the Sugarcane Control Amendment Order, 2009 dated 22.10.2009 is prospective with effect from the date of its publication in the Official Gazette and no time limit has been fixed for arriving at 'L Factor. Such a ground cannot be raised by the appellant to deny and defeat the vested rights of the cane growers. The Writ Court has considered all the aforesaid aspects in proper perspective and this Court, in exercise of is appellate jurisdiction, finds no reason to interfere with the order of the Writ Court and accordingly the writ appeal is liable to be dismissed. Conclusion - i) The omission of Clause 5A and the Second Schedule does not retroactively affect the rights of sugarcane growers to receive additional pricing for supplies made before the amendment. ii) Section 6 of the General Clauses Act applies to subordinate legislation, preserving accrued rights despite the omission of provisions. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment revolve around the amendment to the Sugarcane (Control) Order, 1966, specifically regarding the omission of Clause 5A and the Second Schedule by the 2009 amendment. The primary questions include:Whether the omission of Clause 5A and the Second Schedule by the 2009 amendment affects the accrued rights of sugarcane growers to receive additional price for sugarcane supplied before the amendment.Whether Section 6 of the General Clauses Act, 1897, which preserves rights and liabilities under repealed enactments, applies to the omission of Clause 5A, given that the Sugarcane (Control) Order is a subordinate legislation.Whether the Central Government retains jurisdiction to determine the 'L' Factor for sugar seasons prior to the 2009 amendment, despite the omission of Clause 5A.Whether the omission of a provision in subordinate legislation is equivalent to a repeal, and the implications of such omission on vested rights.ISSUE-WISE DETAILED ANALYSISOmission of Clause 5A and its Impact on Accrued RightsThe Court examined the legislative intent behind the Sugarcane (Control) Order, 1966, and its amendment in 2009. The amendment replaced the Statutory Minimum Price (SMP) with Fair and Remunerative Price (FRP), omitting Clause 5A and the Second Schedule, which provided for the determination of additional price based on the 'L' Factor. The appellant argued that this omission extinguished any rights accrued under the omitted provisions.The Court, however, emphasized that the right to receive the SMP was a statutory right that accrued at the time of sugarcane supply. The omission of Clause 5A did not retroactively affect these rights, as the amendment was prospective. The Court cited precedents, such as the Sikkim Subba Associates case, to support the principle that vested rights are not nullified by retrospective deletions unless expressly provided by statute.Applicability of Section 6 of the General Clauses ActThe appellant contended that Section 6 of the General Clauses Act, which preserves rights under repealed enactments, did not apply to the omission of Clause 5A, as the Sugarcane (Control) Order is not an enactment or regulation. The Court rejected this argument, noting that the terms 'repeal' and 'omission' are often used interchangeably in legal contexts, and the omission of a provision does not inherently negate accrued rights. The Court highlighted that the legislative intent was not to obliterate existing rights but to introduce a new pricing mechanism without affecting past entitlements.Jurisdiction to Determine the 'L' FactorThe appellant argued that post-2009, the Central Government lacked jurisdiction to determine the 'L' Factor for sugar seasons prior to the amendment. The Court dismissed this claim, affirming that the accrued rights of cane growers to receive additional pricing for past supplies remained intact. The Court underscored that the legislative intent of the 2009 amendment was not to disrupt previously established rights and obligations.Interpretation of Omission and RepealThe Court explored the distinction between 'omission' and 'repeal,' referencing multiple Supreme Court judgments. It concluded that, practically, there is no significant difference between these terms in the context of legislative amendments. The Court reinforced that the absence of a saving clause does not automatically negate accrued rights, and the omission of Clause 5A should be interpreted as prospective, preserving past rights.SIGNIFICANT HOLDINGSThe Court upheld the Writ Court's decision, affirming that the 2009 amendment to the Sugarcane (Control) Order was prospective and did not affect rights accrued under the previous regime. The key holdings include:The omission of Clause 5A and the Second Schedule does not retroactively affect the rights of sugarcane growers to receive additional pricing for supplies made before the amendment.Section 6 of the General Clauses Act applies to subordinate legislation, preserving accrued rights despite the omission of provisions.The Central Government retains jurisdiction to determine the 'L' Factor for sugar seasons prior to the 2009 amendment.The terms 'repeal' and 'omission' are legally interchangeable, and the omission of a provision does not inherently negate accrued rights.The legislative intent of the 2009 amendment was to introduce a new pricing mechanism without affecting past entitlements.The judgment reinforces the principle that legislative amendments should be interpreted in a manner that preserves accrued rights unless expressly stated otherwise, ensuring that vested rights are not inadvertently nullified by procedural changes.